diff --git "a/China/2.ICBC_$267.08 B_Financials/2022/results.txt" "b/China/2.ICBC_$267.08 B_Financials/2022/results.txt"
new file mode 100644--- /dev/null
+++ "b/China/2.ICBC_$267.08 B_Financials/2022/results.txt"
@@ -0,0 +1,285798 @@
+Location where copies of this annual report are kept
+Office of the Board of Directors of the Bank
+201,457
+(1,947)
+533,508
+348,123
+278,176
+As at the end of reporting period
+(in RMB millions)
+Net cash flows from operating activities
+Total assets
+Total loans and advances to customers
+11,026,331
+18,917,752
+9,922,374
+17,542,217
+8,803,692
+15,476,868
+7,788,897
+13,458,622
+6,790,506
+20,609,953
+Allowance for impairment losses
+165,156
+238,532
+Profit before taxation
+361,612
+338,537
+308,687
+272,311
+215,426
+Net profit
+208,265
+276,286
+238,691
+208,445
+166,025
+Net profit attributable to equity holders
+of the parent company
+275,811
+262,649
+262,965
+213,280
+on loans
+240,959
+11,145,557
+Due to banks and other financial
+institutions
+1,539,239
+1,269,255
+1,486,805
+1,341,290
+12,261,219
+1,048,002
+of the parent company
+1,530,859
+1,274,134
+1,124,997
+956,742
+820,430
+Share capital
+Equity attributable to equity holders
+257,581
+13,642,910
+15,556,601
+220,403
+194,878
+167,134
+Investment
+4,433,237
+4,322,244
+4,083,887
+14,620,825
+3,915,902
+Total liabilities
+19,072,649
+17,639,289
+16,413,758
+14,519,045
+12,636,965
+Due to customers
+3,732,268
+353,495
+269,867
+336,440
+29.91
+29.24
+28.80
+27.93
+2010 2011 2012 2013 2014
+Allowance to non-performing loans
+%
+30.99
+295.55
+257.19
+228.20
+206.90
+2010 2011
+2012 2013 2014
+2010 2011 2012 2013 2014
+ICBC
+266.92
+Financial Data
+%
+2010 2011 2012 2013 2014
+21.13
+20.87
+20.02
+2010 2011 2012 2013 2014
+Non-performing loans ratio
+%
+1.13
+Cost-to-income ratio
+1.08
+0.94
+0.85
+23.44
+22.79
+23.02
+21.92
+19.96
+0.94
+306,035
+Financial Highlights
+2013
+470,601
+380,748
+Operating expenses
+Impairment losses
+218,674
+204,140
+189,940
+529,720
+169,613
+56,729
+38,321
+33,745
+31,121
+27,988
+Operating profit
+359,455
+139,480
+2014
+578,901
+Operating income
+2012
+2011
+2010
+Annual operating results (in RMB millions)
+Net interest income
+493,522
+443,335
+634,858
+417,828
+303,749
+Net fee and commission income
+132,497
+122,326
+106,064
+101,550
+72,840
+362,764
+351,390
+349,620
+349,084
+1.13
+0.94
+0.85
+0.94
+1.08
+Allowance to NPL(11)
+206.90
+Non-performing loans ("NPL") ratio (10)
+257.19
+266.92
+228.20
+Allowance to total loans ratio(12)
+2.34
+2.43
+2.50
+2.50
+295.55
+2.46
+Asset quality (%)
+29.91
+2.26
+2.45
+2.66
+2.68
+2.55
+Ratio of net fee and commission
+income to operating income
+30.99
+Cost-to-income ratio (9)
+21.13
+20.02
+21.58
+19.13
+27.93
+28.80
+29.24
+20.87
+Return on risk-weighted assets (8)
+Capital adequacy (%)
+11.92
+54.58
+52.85
+Notes: (1)
+Data for period since 2013 were calculated in accordance with the Capital Regulation and those for 2010-2012 were calculated
+in accordance with the Regulations Governing Capital Adequacy of Commercial Banks and related regulations promulgated by
+CBRC.
+(2) Calculated by dividing equity attributable to equity holders of the parent company at the end of the reporting period by the
+number of shares issued at the end of the reporting period.
+(3) The rating results are in the form of "long-term foreign currency deposits rating/outlook".
+(4) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(5) Calculated by dividing net profit attributable to equity holders of the parent company by the weighted average balance
+of equity attributable to equity holders of the parent company, which is calculated in accordance with the Rules for the
+Compilation and Submission of Information Disclosure by Companies that Offer Securities to the Public No. 9 - Calculation
+and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010) issued by CSRC.
+54.22
+(6) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+(8) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(9) Calculated by dividing operating expense (less business tax and surcharges) by operating income.
+(10) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(11) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(12) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+ICBC
+Fax: 852-28650990
+(7) Calculated by dividing net interest income by the average balance of interest-generating assets.
+Core tier 1 capital adequacy ratio(1)
+63.34
+ratio
+10.57
+Tier 1 capital adequacy ratio (1)
+12.19
+10.57
+Capital adequacy ratio(1)
+14.53
+13.12
+60.53
+13.66
+12.27
+Total equity to total assets ratio
+Risk-weighted assets to total assets
+7.46
+6.76
+6.43
+6.19
+6.11
+13.17
+2.44
+2.61
+2.66
+Net asset value per share(2)
+4.33
+3.63
+3.22
+2.74
+2.35
+Basic earnings per share
+Per share data (in RMB yuan)
+0.78
+0.68
+0.60
+0.48
+Diluted earnings per share
+0.78
+0.74
+0.67
+0.75
+0.59
+7,112,357
+9,511,205
+349,019
+Net core tier 1 capital (1)
+1,486,733
+1,266,841
+Net tier 1 capital(1)
+1,521,233
+1,266,859
+8,447,263
+Net capital base(1)
+1,572,265
+1,299,014
+1,112,463
+872,373
+Risk-weighted assets (1)
+12,475,939
+11,982,187
+1,812,137
+0.48
+Credit rating
+S&P(3)
+1.32
+Return on weighted average equity(5)
+19.96
+21.92
+23.02
+23.44
+22.79
+1.44
+Net interest spread(6)
+2.40
+2.49
+2.49
+2.35
+Net interest margin (7)
+2.66
+2.57
+2.46
+1.45
+1.44
+1.40
+Moody's (3)
+A/Stable
+A1/Stable
+A/Stable
+A1/Stable
+A/Stable
+A1/Stable
+A/Stable
+A1/Stable
+A/Stable
+A1/Stable
+Annual Report 2014
+Financial Highlights
+Financial Indicators
+2014
+2013
+2012
+2011
+2010
+Profitability (%)
+Return on average total assets(4)
+21.58
+19.13
+7
+income to operating income
+Accounting Standards for Business Enterprises promulgated by the Ministry of
+Finance
+The People's Bank of China
+Ministry of Finance of the People's Republic of China
+Accounting Standards Board, which comprise the International Accounting
+Standards
+The International Financial Reporting Standards promulgated by the International
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+ICBC Financial Leasing Co., Ltd.
+ICBC Credit Suisse Investment Management Co., Ltd.
+ICBC Credit Suisse Asset Management Co., Ltd.
+A Share convertible corporate bonds of Industrial and Commercial Bank of China
+Limited
+Industrial and Commercial Bank of China (USA) NA
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC PERU BANK
+Industrial and Commercial Bank of China (New Zealand) Limited
+ICBC International Holdings Limited
+ZAO Industrial and Commercial Bank of China (Moscow)
+The Stock Exchange of Hong Kong Limited
+National Council for Social Security Fund
+During the reporting period, the Bank did not identify any material risks that exerted negative impact on the Bank's
+development strategy and business objectives in the future. The Bank has actively adopted measures to effectively manage
+various types of risks. Please refer to the section headed "Discussion and Analysis Risk Management" for detailed
+information.
+Notes on Material Risks
+Mr. Jiang Jianqing, Legal Representative of the Bank, Mr. Yi Huiman, President in charge of finance of the Bank, and Mr. Liu
+Yagan, General Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that the
+financial statements contained in the Annual Report are authentic, accurate and complete.
+26 March 2015
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.554 (pre-tax) for each
+ten shares for 2014. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2014.
+The 2014 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by
+KPMG Huazhen (Special General Partnership) and KPMG in accordance with Chinese and International Standards on Audit
+respectively, with standard unqualified auditors' reports being issued.
+Shanghai Stock Exchange
+The 2014 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 26 March 2015. There were 14 directors eligible for attending the meeting, of whom 14
+directors attended the meeting in person.
+Important Notice
+ICBC
+2
+Bank of China Limited and its subsidiaries
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial
+The State Council of the People's Republic of China
+Standard Bank Group Limited
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+The report contains forward-looking statements on the Bank's financial positions, business performance and
+development. The statements are made based on existing plans, estimates and forecast, and bear upon future external
+events or the Group's future finance, business or performance in other aspects and may involve future plans which do not
+constitute substantive commitment to investors, hence shall not be unduly relied upon.
+Industrial and Commercial Bank of China, (London) plc
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Industrial and Commercial Bank Of China (Argentina) S.A.
+IFRSS
+ICBCFS
+ICBC-AXA
+ICBC Leasing
+ICBC International
+Management
+ICBC Credit Suisse Investment
+MOF
+ICBC Credit Suisse Asset Management
+ICBC (USA)
+ICBC (Thai)
+ICBC (Peru)
+ICBC (New Zealand)
+ICBC (Moscow)
+ICBC (Malaysia)
+ICBC (Macau)
+ICBC Convertible Bonds
+Industrial and Commercial Bank of China (Asia) Limited
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+PBC
+Securities and Futures Ordinance of
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Central Huijin Investment Ltd.
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
+Limited
+Banks undertaking key functions with global features in the financial markets as
+released by the Financial Stability Board
+China Securities Regulatory Commission
+convertible corporate bonds
+Company Law of the People's Republic of China
+PRC GAAP
+China Banking Regulatory Commission
+the Bank/the Group
+State Council
+Standard Bank
+SSF
+SSE
+SEHK
+Hong Kong
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by
+CBRC in June 2012
+ICBC (London)
+Annual Report 2014
+0101
+The "HKExnews" website of SEHK for publication of
+the annual report in respect of H shares
+www.hkexnews.hk
+www.sse.com.cn
+Website designated by CSRC for publication of the
+annual report in respect of A shares
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+Selected newspapers for information disclosure
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Legal advisors
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Board Secretary and Company Secretary
+Yi Huiman and Hu Hao
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and compliant hotline: 86-95588
+Hu Hao
+Telephone: 86-10-66106114
+Mainland China
+40/F, Office Tower A, Beijing Fortune Plaza, 7 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, PRC
+%
+Tel: 852-28628555
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong
+Computershare Hong Kong Investor Services Limited
+H Share
+Tel: 86-4008058058
+3/F China Insurance Building, No. 166 Lujiazui Dong Road,
+Pudong New Area, Shanghai, PRC
+King & Wood Mallesons
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+10/F, Alexandra House, Chater Road, Central, Hong Kong
+Share registrars
+Linklaters
+9/F, Three Exchange Square, Central, Hong Kong
+Allen & Overy
+Hong Kong, China
+20/F, China Resources Building, 8 Jianguomen North Street,
+Dongcheng District, Beijing, PRC
+Jun He Law Offices
+A Share
+3
+Postal code: 100140
+Registered address and office address
+10101010101101010101 A Global Leading Bank with the Best Profitability,
+AnnaBole1 101101101010
+111
+1110
+Our Vision
+0110110011001110010b10 1110 101
+011010 10
+010 1 1010101
+101111110 101001010001-1
+100011110 0101010
+10100101001-1010 1010
+Excellent Services to Clients, Maximum Returns to Shareholders
+Real Success for Our People, Great Contribution to Society
+Excellence for You
+Our Mission
+0101010110101010101
+ICBC £3
+H
+101
+1010110110101010111–110101010
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+0.0010010101010 0110
+Performance and Prestige
+Jiang Jianqing
+Legal representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+中國工商銀行股份有限公司(“中國工商銀行”)
+Legal name in Chinese
+Corporate Information
+01
+ICBC
+Integrity, Humanity, Prudence, Innovation and Excellence
+Integrity Leads to Prosperity
+Our Value
+pranaloto sio 10101010101101010
+101010010101 FOFO101011110101001
+10100 11.101
+101010
+on
+4
+ICBC (Indonesia)
+10/18/dic bo10
+ICBC (Canada)
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC USDPREF1
+Stock code: 4603
+Stock name: ICBC EURPREF1
+Stock code: 4604
+Stock name: ICBC CNHPREF1-R
+Stock code: 84602
+Offshore Preference Shares
+Change of registration during the reporting period
+Date of first registration: 22 November 1985
+Administration for Industry and
+Commerce of the People's
+Republic of China
+(www.saic.gov.cn)
+Date of change of registration: 29 May 2014
+Registration authority: State Administration for Industry and
+Commerce of the People's Republic
+of China
+Corporate business license number: 100000000003965
+Financial license institution number: B0001H111000001
+Tax registration certificate number: Jing Shui Zheng Zi
+110102100003962
+Organization code: 10000396-2
+Change in main business: None
+Change in controlling shareholders: None
+Name and office address of auditors
+Query index for first registration: Website of the State
+Domestic auditors
+Stock code: 1398
+The Stock Exchange of Hong Kong Limited
+Through its continuous endeavor and stable
+development, the Bank has developed into the top
+large listed bank in the world, possessing an excellent
+customer base, a diversified business structure, strong
+innovation capabilities and market competitiveness. The
+Bank has its presence in six continents, and its overseas
+network has expanded to 41 countries and regions.
+The Bank provides comprehensive financial products
+Industrial and Commercial Bank of China Limited,
+formerly known as Industrial and Commercial Bank
+of China, was established on 1 January 1984. On 28
+October 2005, the Bank was wholly restructured to a
+joint-stock limited company. On 27 October 2006, the
+Bank was successfully listed on both SSE and SEHK.
+Company Profile
+Annual Report 2014
+RMB Preference Shares Stock Code: 84602
+USD Preference Shares Stock Code: 4603
+EUR Preference Shares Stock Code: 4604
+Stock Code: 1398
+Stock name: ICBC
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+ICBC
+Place where shares are listed, and their names and
+codes
+A Share
+Shanghai Stock Exchange
+Stock name: 工商銀行
+Stock code: 601398
+H Share
+B
+KPMG Huazhen (Special General Partnership)
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue, Dongcheng
+District, Beijing, PRC
+CPA (Practicing): Song Chenyang and Li Li
+1,660
+2010 2011 2012
+2013 2014
+Basic earnings per share
+Unit: RMB
+2010 2011 2012 2013 2014
+Return on weighted average equity
+134,586
+%
+0.75
+0.68
+0.60
+0.48
+ICBC (Europe)
+2010 2011 2012 2013 2014
+Ratio of net fee and commission
+0.78
+154,769
+175,422
+189,178
+International auditors
+KPMG
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong
+This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese version shall prevail.
+Annual Report 2014
+5
+Financial Highlights
+6
+Net profit
+Unit: RMB100 millions
+Total assets
+Unit: RMB100 millions
+2,763
+2,630
+2,387
+2,084
+206,100
+and services to 5,090 thousand corporate customers
+and 465 million personal customers by virtue of the
+distribution channels consisting of 17,122 domestic
+institutions, 338 overseas institutions and 2,007
+correspondent banks worldwide, as well as through its
+E-banking network comprising a range of Internet and
+telephone banking services and self-service banking
+centers, forming a diversified and internationalized
+operating structure focusing on commercial banking
+business and maintaining a leading position in the
+domestic market in the commercial banking sector.
+By virtue of its outstanding performance, the Bank's
+brand image and international influence have been
+consolidated. The Bank has become one of most
+valuable financial brands in the world. In 2014, the
+E
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+(53
+Financial Statements
+Independent Auditors' Report and
+124
+Organizational Chart
+121
+Significant Events
+118
+126
+Report of the Board of Supervisors
+Report of the Board of Directors
+112
+Internal Control
+95
+58
+Corporate Governance Report
+85
+114
+2014 Ranking and Awards
+280
+List of Domestic and
+ICBC (Asia)
+ICBC (Argentina)
+(E3
+ICBC (Almaty)
+Huijin
+Hong Kong Listing Rules
+Global Systemically Important Banks
+CSRC
+convertible bonds
+Company Law
+CBRC
+Capital Regulation
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+284
+ICBC (Brasil)
+Employees and Institutions
+Directors, Supervisors, Senior Management,
+Overseas Branches and Offices
+Shareholding of Substantial Shareholders
+President's Statement
+Discussion and Analysis
+Chairman's Statement
+Corporate Information
+Financial Highlights
+Important Notice
+Definitions
+The Bank strives to duly implement the organic
+unification of economic and social responsibilities,
+gaining wide social recognition in the aspects of
+supporting economic and social development,
+protecting environment and resources, and
+participating in community services, and has won
+awards including "Best Social Responsibility Financial
+Institution Award" and "Best Social Responsibility
+Award".
+Bank was named the "Global Bank of the Year" by
+The Banker, ranked the first place among the Top 1000
+World Banks by the Banker and the largest enterprise
+in the world among the Global 2000 listed by the US
+magazine Forbes for the second consecutive year.
+2356221
+71
+67
+51
+34
+19
+17
+CONTENTS
+77
+17
+Economic, Financial and
+Regulatory Environments
+225 6 F
+Business Overview
+Details of Changes in Share Capital and
+76
+Financial Statements Analysis
+36
+Social Responsibility
+73
+H
+Regulatory Requirements
+(53)
+- Risk Management
+Other Information Disclosed Pursuant to
+Outlook
+-
+E
+– Capital Management
+28.0
+28.0
+No
+222222
+5.0
+Zhang Wei
+No
+Note2
+5.0
+No
+5.0
+No
+No
+Li Mingtian
+5.0 Note2
+No
+Zhang Hongli
+77.9
+No
+102.5
+24.6
+No
+10.0
+48.0
+96.3
+No
+48.0
+48.0
+43.0
+43.0
+No
+44.0
+44.0
+No
+Or Ching Fai
+48.0
+No
+Hong Yongmiao
+Yi Xiqun
+Wang Chixi
+Dong Juan
+Meng Yan
+46.0
+46.0
+43.0
+43.0
+74.6
+21.7
+10.0
+Wang Xiquan
+Liu Lixian
+24.4
+Hu Hao
+75.3
+23.9
+99.2
+No
+Directors leaving office
+77.9
+24.6
+Li Jun
+Wang Xiaolan
+No
+Yao Zhongli
+No
+Yes
+Yes
+Yes
+Notes: 1.
+2.
+According to the requirements of relevant government authorities, the 2014 final remuneration payable to the Chairman of
+the Board of Directors, the President, the Chairman of the Board of Supervisors, Shareholder Supervisors and other Senior
+Management members is still subject to final confirmation by relevant government authorities. Additional details of remuneration
+will be disclosed when they have been determined.
+Kenneth Patrick Chung
+Annual Report 2014
+Fees of Employee Supervisors Mr. Zhang Wei and Mr. Li Mingtian are their allowances obtained as Employee Supervisors of the
+Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+102.5
+99.2
+23.9
+75.3
+102.3
+No
+Zheng Wanchun
+77.7
+24.4
+102.1
+No
+Gu Shu
+77.7
+24.4
+102.1
+No
+Wang Jingdong
+77.7
+24.4
+102.1
+No
+Wei Guoxiong
+75.3
+23.9
+99.2
+No
+Lin Xiaoxuan
+77.9
+Malcolm Christopher McCarthy
+Mr. Gu has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since October
+2013. He joined ICBC in 1998, served as Deputy General Manager of Accounting and Settlement Department, Deputy
+General Manager of the Planning and Finance Department, General Manager of Finance and Accounting Department, Board
+Secretary, General Manager of Corporate Strategy and Investor Relations Department and Head of Shandong Branch of
+ICBC. Mr. Gu obtained Doctorate degree in Economics from Shanghai University of Finance and Economics, Master's degree
+in Economics from Dongbei University of Finance and Economics and Bachelor's degree in Engineering from Shanghai Jiao
+Tong University. He is a senior accountant.
+Yes
+Wang Jingdong, Senior Executive Vice President
+Mr. Wang has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since December
+2013. He joined the China Development Bank ("CDB") in 1994 and served as Deputy Head of Harbin Branch, Deputy
+Director of the Human Resources Department of the Head Office, Head of Project Appraisal Department III of the Head
+Office, Head of Beijing Branch and Head of Human Resources Department of the Head Office of CDB. He graduated from
+Huazhong Agricultural University and got the bachelor's degree of agronomy. He is a senior engineer.
+Wei Guoxiong, Chief Risk Officer
+Mr. Wei has served as Chief Risk Officer of Industrial and Commercial Bank of China Limited since August 2006. He joined
+ICBC in 1987 and previously served in several positions at ICBC including Acting Head of Wenzhou Branch, Deputy Head
+of Zhejiang Branch and General Manager of the Industrial and Commercial Credit Department and the Credit Management
+Department of the Head Office. He graduated from Tianjin University of Finance and Economics, and received a Master's
+degree in Economics. He is a research fellow.
+Lin Xiaoxuan, Chief Information Officer
+Mr. Lin has served as Chief Information Officer of Industrial and Commercial Bank of China Limited since November
+2010. Mr. Lin joined ICBC in 1989, and has served as General Manager of Information and Technology Department
+of ICBC from 2001, and Chief Officer of Information and Technology of ICBC since 2009. He also served as Chief of
+Technology Protection Section and Head of Software Development and Operation Centre of ICBC Fujian Branch, Deputy
+General Manager of Technology Protection Department of the Head Office and later General Manager of Information and
+Technology Department of ICBC, and for a certain period of time concurrently served as General Manager of Data Centre
+of ICBC. He graduated from East China Normal University and received a Master's degree in Engineering. He is a research
+fellow and has been granted the special governmental allowance by the State Council since 2001.
+Annual Report 2014
+91
+Directors, Supervisors, Senior Management, Employees and Institutions
+Hu Hao, Board Secretary
+Gu Shu, Senior Executive Vice President
+Mr. Hu has served as Board Secretary of Industrial and Commercial Bank of China Limited since December 2010. Mr. Hu
+joined ICBC in 1984, serving successively as Deputy General Manager of the Industrial and Commercial Credit Department,
+Deputy General Manager of the Credit Management Department, General Manager of the Institutional Banking Department,
+General Manager of the International Banking Department. He previously served as President of Chinese Mercantile Bank,
+Chairman of Industrial and Commercial Bank of China Luxembourg S.A., Deputy Director-General of Construction and
+Administration Bureau of South-to-North Water Diversion Middle Route Project, a Director of Taiping General Insurance
+Company Limited and Taiping Life Insurance Co., Ltd. and a Director of Xiamen International Bank. Currently, Mr. Hu is
+also General Manager of Corporate Strategy and Investor Relations Department of Industrial and Commercial Bank of China
+Limited. Mr. Hu graduated from Hunan University, and received a Doctorate degree in Economics from the Graduate School
+of the Chinese Academy of Social Sciences. He is a senior economist.
+Appointment and Removal
+◆ Directors
+At the First Extraordinary General Meeting of 2014 held on 15 April 2014, Mr. Zhang Hongli was appointed as Executive
+Director of the Bank, and his qualification remains to be approved by CBRC. At the First Extraordinary General Meeting
+of 2015 held on 23 January 2015, Mr. Jiang Jianqing was re-appointed as Executive Director of the Bank, and Ms. Wang
+Xiaoya and Ms. Ge Rongrong were appointed as Non-executive Directors of the Bank. Their terms of office took effect from
+the date of review and approval by the meeting. In addition, Mr. Zheng Fuqing was appointed as Non-executive Director
+of the Bank and his qualification was approved by CBRC in February 2015. Mr. Fei Zhoulin and Mr. Cheng Fengchao were
+appointed as Non-executive Directors of the Bank, and their qualifications were approval by CBRC in March 2015. Mr.
+Anthony Francis Neoh was appointed as Independent Non-executive Director of the Bank, and his qualification remains to be
+approved by CBRC.
+In November 2014, Mr. Yao Zhongli submitted a resignation to the Board of the Bank and ceased to act as Non-executive
+Director of the Bank due to his age. In December 2014, Mr. Wang Xiaolan and Mr. Liu Lixian submitted their resignations
+respectively to the Board of the Bank. By reason of their age, Mr. Wang Xiaolan ceased to act as Non-executive Directors of
+the Bank, and Mr. Liu Lixian ceased to act as Executive Director of the Bank. In March 2015, due to expiration of the term of
+office, Mr. Li Jun ceased to act as Non-executive Director of the Bank.
+Supervisors
+Upon the approval at the Annual General Meeting for the Year 2013 held on 6 June 2014, Mr. Zhao Lin was re-appointed as
+Shareholder Supervisor of the Bank, and his term of office took effect from the date of review and approval by the meeting.
+Upon the approval at the First Extraordinary General Meeting of 2015 held on 23 January 2015, Ms. Wang Chixi was re-
+appointed as Shareholder Supervisor of the Bank, and her term of office took effect from the date of review and approval by
+the meeting.
+Annual Remuneration
+92
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Fu Zhongjun, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao were
+recommended by Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please
+refer to the section headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders - Interests
+and Short Positions Held by Substantial Shareholders and Other Persons" for further details.
+Mr. Zheng has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since October
+2013. He joined ICBC in 1991 and once serviced as Assistant to Head and General Manager of Banking Department of
+Hainan Branch of ICBC, Deputy General Manager of Industrial and Commercial Credit Department of ICBC, Vice President
+of China Huarong Asset Management Corporation and President of China Great Wall Asset Management Corporation. He
+currently serves concurrently as Vice Chairperson of National Debt Association of China. Mr. Zheng Wanchun graduated
+from Renmin University of China, and obtained Doctorate degree in Economics. He is a senior economist.
+Zheng Wanchun, Senior Executive Vice President
+Mr. Wang has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since September
+2012. He joined ICBC in 1985 and has served as a member of Senior Management of Industrial and Commercial Bank of
+China Limited since April 2010. He previously served in several positions at ICBC, including Head of Yangquan Branch in
+Shanxi Province, Deputy Head of Hebei Branch, General Manager of the Asset Risk Management Department, Director-
+General of the Internal Audit Bureau and General Manager of the Human Resources Department of the Head Office. He
+graduated from Nanjing University, and received a Doctorate degree in Management.
+Mr. Hong has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+August 2012. Mr. Hong was previously in charge of the National Science Fund for Distinguished Overseas Young Scholars
+supported by the National Natural Science Foundation of China, and has acted as President of the Chinese Economists
+Society in North America, and editor for journals such as Journal of Econometrics and Econometric Theory. He is currently a
+professor of Economics and International Studies at Cornell University in the United States. He has been enrolled as one of
+the first participants of the "Thousand Talents Plan" and serves as a lecture professor of the "Changjiang Scholars" launched
+by the Ministry of Education, and Dean of the School of Economics and the Wang Yanan Institute for Studies in Economics
+at Xiamen University. He is a part-time professor in some scientific and research institutions and colleges, including Tsinghua
+University, Chinese Academy of Sciences and Shandong University. He is also a committee member of the academic board
+of Economic Research Journal of the Chinese Academy of Social Sciences and China Economic Quarterly published by
+Peking University. Mr. Hong graduated from Xiamen University with a Bachelor of Science degree and a Master's degree in
+Economics, and obtained his Doctorate degree in Economics from the University of California San Diego.
+93
+Yi Xiqun, Independent Non-executive Director
+Mr. Yi has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+December 2013. He once served as Deputy General Manager of Beijing Second Light Industry Company, Deputy Director of
+Beijing Municipal Restructuring Economic System Office, Head of Xicheng District of Beijing, Assistant to Mayor of Beijing
+and concurrently Director of the Foreign Economy and Trade Committee, Director of Administrative Committee of Beijing
+Economic and Technological Development Zone, member of Chinese People's Political Consultative Committee Beijing
+Committee and Chairman of the board of directors of Beijing Holdings Limited. He had been the Chairman of the board
+of directors of Beijing Enterprises Holdings Limited, the Chairman of the board of directors of Beijing Enterprises Holdings
+Group Company Limited, the Chairman of the board of directors of Beijing Private Equity Investment & Development Fund
+Management Co., Ltd., the Chairman of Bowei Capital and an independent non-executive of China Merchants Bank. He
+concurrently acts as Vice President of China Association of Private Equity, an Independent Non-executive Director of China
+Merchants Securities Co., Ltd., SOHO China Ltd., Asian Capital Holdings Limited, and Zheshang Jinhui Trust Co., Ltd. and
+a member of Entrepreneur Advisory Committee of Zhongguancun. He graduated from Tsinghua University and obtained a
+Master's degree in Economics Management Engineering.
+Wang Chixi, Shareholder Supervisor
+Ms. Wang has served as Supervisor of Industrial and Commercial Bank of China Limited since October 2005. She was
+appointed as full-time Supervisor (at the rank of Director-General) and General Manager of the Supervisory Board Office of
+ICBC as designated by the State Council in 2003. She joined ICBC in 2005. Ms. Wang had taken several positions including
+Deputy Director-General of the Financial Audit Department of the National Audit Office, Deputy Director-General of the
+Agricultural, Forestry and Sea Products Audit Bureau of the National Audit Office and was appointed as full-time Supervisor
+(at the rank of Director-General) and General Manager of the Board of Supervisors' Office of Agricultural Bank of China
+as designated by the State Council. She graduated from Shenyang Agricultural College, and is a PRC Certified Public
+Accountant (as a non-practising member).
+Dong Juan, External Supervisor
+Ms. Dong has served as External Supervisor of Industrial and Commercial Bank of China Limited since May 2009. She
+previously served as Deputy Chief and Chief of the Foreign Trade Division of Commerce and Trade Department of MOF,
+Director-General of the Enterprise Affairs Department of the State Administration of State-owned Assets, Director-General
+of the Evaluation Department of MOF, Chairperson of the Board of Directors of Grandchina International Consulting Co.,
+Ltd., an external supervisor of China Cinda Asset Management Corporation and an independent non-executive director of
+Baocheng Investment Co., Ltd. and Sinotex Investment & Development Co., Ltd. Ms. Dong graduated from Shanxi Finance
+and Economics Institute and from Dongbei University of Finance and Economics with a Master's degree in economics. Ms.
+Dong is also a PRC Certified Public Accountant (as a non-practising member).
+Annual Report 2014
+89
+Directors, Supervisors, Senior Management, Employees and Institutions
+Meng Yan, External Supervisor
+Mr. Meng has served as External Supervisor of Industrial and Commercial Bank of China Limited since May 2009. Currently,
+he is Dean, Professor and Tutor to PhD students in the School of Accountancy of Central University of Finance and
+Economics ("CUFE"). He is also an Executive Council Member of the Accounting Society of China, a Council Member of
+the China Audit Society, an Executive Council Member of the Banking Accounting Society of China, a member of the
+Steering Committee on Teaching and Learning of Business Administration Disciplines of Higher Education Institutions under
+the Ministry of Education, and a member of the National Accounting Master Education Steering Committee. Mr. Meng
+served as Head of the Department of Accountancy of CUFE. He was also an Expert Consultant of the Accounting Standards
+Committee of MOF for accounting standards, MOF for independent auditing standards, and MOF for enterprise performance
+evaluation and an independent non-executive director of Beijing North Star Company Limited, China Merchants Property
+Development Company and Beijing Bashi Media Co., Ltd. At present, he concurrently serves as an independent supervisor
+of China COSCO Holdings Company Limited, and an independent non-executive director of Wanhua Chemical Group Co.,
+Ltd., Jolimark Holdings Limited and COFCO Property (Group) Co., Ltd. Mr. Meng obtained his Doctorate degree in economics
+from the Research Institute for Fiscal Science of MOF.
+Zhang Wei, Employee Supervisor
+Mr. Zhang has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since August 2006.
+He joined ICBC in 1994, and has served as General Manager of the Legal Affairs Department since 2004. Currently, he is
+also Vice Chairman of the Banking Law Research Institute, a council member of China Legal Aid Foundation and Executive
+Deputy Director of the Legal Work Committee of China Banking Association. He graduated from Peking University with a
+Doctorate degree in Law and is a research fellow.
+Li Mingtian, Employee Supervisor
+Mr. Li has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since July 2012. He joined
+ICBC in 1984 and has served as Deputy Secretary of the Party Discipline Committee since 2001 and concurrently as Director
+of the Discipline Enforcement Department since 2004. He had previously served as Deputy Director of the Human Resources
+Department, Deputy General Manager of the Banking Department, and Deputy Head and CPC Committee member of
+Shaanxi Branch. He graduated from Hunan University of Finance and Economics with a Master's degree in Economics. He is
+a senior economist.
+Zhang Hongli, Senior Executive Vice President
+Mr. Zhang has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since May
+2010. Previously, he had been serving as a member of the Global Banking Management Committee and Head of Asia —
+Pacific of Deutsche Bank Global Banking and Chairman of Deutsche Bank (China) Co., Ltd. since October 2004. He worked
+as Financial Manager at the headquarters of Hewlett-Packard since July 1991, a Director and Head of the China operations
+of Schroders PLC since July 1994, an Executive Director of Goldman Sachs Asia and the Chief Representative of Goldman
+Sachs (China) LLC Beijing Representative Office since June 1998, and Head of Deutsche Bank Investment Banking Greater
+China, Vice Chairman of Deutsche Bank Asia and Chairman of Deutsche Bank China from March 2001 to September 2004.
+He was concurrently Chairman of ICBC International Holdings Limited and Chairman of Industrial and Commercial Bank of
+China (Brasil) S.A., and once serviced as Vice Chairman of Standard Bank Group Limited (SBG) and Chairman of Industrial
+and Commercial Bank of China (USA) NA. Mr. Zhang received a Bachelor's degree from Heilongjiang Bayi Agricultural
+University and a Master's degree in Genetics from the University of Alberta, Canada, as well as a Master's degree in Business
+Administration (MBA) from the Santa Clara University in California, USA, and a Doctorate degree in Management Science
+and Engineering from the Chinese Academy of Social Sciences.
+90
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Wang Xiquan, Senior Executive Vice President
+Remuneration from the Bank
+Wong Kwong Shing, Frank
+Note1
+by the
+113.9
+No
+84.0
+24.9
+108.9
+No
+Zhao Lin
+81.7
+25.3
+107.0
+26.5
+No
+Yes
+Ge Rongrong
+Yes
+Fu Zhongjun
+Zheng Fuqing
+Yes
+Yes
+Fei Zhoulin
+Cheng Fengchao
+Yes
+Wang Xiaoya
+87.4
+Yi Huiman
+Jiang Jianqing
+Unit: RMB10,000
+Remuneration
+paid
+Name
+(before tax)
+employer
+to social
+insurance,
+housing
+allowance,
+annuities,
+and additional
+medical
+insurances
+Obtain
+remuneration
+Total
+from
+Fee
+remuneration
+before tax
+shareholder
+entities or not
+(1)
+(2)
+(3)
+(4)=(1)+(2)+(3)
+Contribution
+Directors, Supervisors, Senior Management, Employees and Institutions
+Supervision
+Committee
+At the end of 2014, the Bank had 462,282 employees', an increase of 20,380 from the end of the previous year, of whom
+4,909 were employees in major domestic subsidiaries and 11,759 were local employees in overseas institutions.
+Management
+Committee
+Business & Product
+Innovation
+Management
+Committee
+Asset & Liability
+Management
+Committee
+Risk
+Management
+Committee
+Approval
+Committee
+Credit
+Approval
+Credit Risk
+Management
+Committee
+Market Risk
+Management
+Committee
+Operational Risk
+Management
+Committee
+Internal Audit
+Bureau
+Internal Audit
+Sub-bureau
+Marketing
+Management
+Departments
+Risk
+Management
+Departments
+Board of
+Supervisors
+Committee
+Technology
+Technology
+Information
+Note: (1) Overseas and others include investments in associates and joint ventures.
+1 Does not include labor dispatched for services totaling 2,962 persons, of which 43 were dispatched to major subsidiaries.
+94
+ICBC
+Corporate Governance Report
+Corporate Governance Framework
+Board of
+Directors
+Shareholders'
+General Meeting
+Primary reporting line
+Secondary reporting line
+Strategy
+Committee
+Risk Management
+Committee
+Nomination
+Committee
+Compensation
+Committee
+Related Party
+Transactions Control
+Committee
+Audit Committee
+Senior
+Management
+Financial
+Approval
+Committee
+Information
+Comprehensive
+Administration
+Departments
+100.0
+Supporting
+Departments
+Directly
+Controlled
+Institutions
+Development of Corporate Governance Regulations
+During the reporting period, the Bank amended the Articles of Association according to the regulatory requirements and
+the Bank's actual circumstances. The amended Articles of Association was approved by the Second Extraordinary General
+Meeting of the Bank of 2014 and by CBRC. Chapter 21 "Special Provisions regarding Preference Shares" was added,
+including articles on management of preference shares, issuance limit of preference shares, types of shareholders, conversion
+and repurchase of preference shares, rights and obligations of preference shareholders, rules for voting rights of preference
+shares, profit distribution for preference shares and distribution of residual properties. Besides, the Bank amended the Rules
+on the Recommendation and Nomination of Candidates for Directors, adding relevant provisions on diversified composition
+of the Board of Directors.
+Annual Report 2014
+97
+Corporate Governance Report
+Compliance with the Corporate Governance Code
+Regarding Code Provisions A.2.7 and E.1.2 of the Corporate Governance Code (the "Code") under Appendix 14 of the
+Hong Kong Listing Rules, Mr. Jiang Jianqing, Chairman of the Bank, held a meeting with the Non-executive Directors
+without other Executive Directors present on 22 January 2015; Mr. Jiang Jianqing, Chairman of the Bank, was absent from
+the Annual General Meeting for the Year 2013 held on 6 June 2014 due to important business arrangement, and thus
+delegated Mr. Yi Huiman, Vice Chairman and President of the Bank, to attend and chair the meeting. Save as disclosed
+above, during the reporting period, the Bank fully complied with the code provisions and the recommended best practices as
+stipulated in the Code.
+Shareholders' Rights
+Proposing the convening of an extraordinary general meeting
+An extraordinary general meeting should be convened within 2 months from the date when shareholders holding more than
+10% of the voting shares of the Bank, either individually or jointly, request to convene in writing. Proposing shareholders
+shall have the right to request the board of directors in writing to convene an extraordinary general meeting of shareholders.
+The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting within 10
+days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles of Association of
+the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by themselves due to the
+failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted from the payment to
+those negligent directors.
+The Bank continuously increased the level of transparency. Adhering to the principle of "authenticity, accuracy,
+completeness, timeliness and fairness" and the orientation of meeting investors' needs, the Bank continuously enhanced
+voluntary disclosure, to effectively guarantee shareholders' right to information. The Bank strictly implemented the
+administrative measures for inside information and insiders to prevent inside transactions and fully protect the interests of
+shareholders. The Bank improved its comprehensive investor relation management system, to reconcile the market value and
+inherent value of the Bank.
+Submitting interim proposals for the shareholders' general meeting
+Putting forward suggestions or inquiries
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, share capital documents and minutes of Shareholders' General Meetings, etc.
+Rights of preference shareholders
+Preference shareholders of the Bank enjoy precedence over ordinary shareholders in dividend distribution and are entitled to
+propose recommendations or questions on the Bank's business activities, review the Articles of Association, the register of
+shareholders, receipts of company bonds, minutes of the shareholders' general meeting, resolutions made at meetings of the
+Board of Directors, resolutions made at meetings of the Board of Supervisors, financial accounting reports, etc.
+In the calculation of shareholding ratio in case of requesting the convening of an extraordinary general meeting, convening
+and chairing a shareholders' general meeting, submitting interim proposals to a shareholders' general meeting, etc., only
+ordinary shares and preference shares with restored voting rights shall be included.
+Other rights
+Shareholders have the right to collect dividends and other forms of benefits distributed on the basis of the number of
+shares held by them. Shareholders have other rights conferred by laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+98
+ICBC
+Hong Yongmiao, Independent Non-executive Director
+Shareholders who hold more than 3% of shares of the Bank, either individually or jointly, may prepare an interim proposal
+and submit it in writing to the Board of Directors 10 days before the Shareholders' General Meeting is convened. The Board
+of Directors shall issue a supplementary notice for the Shareholders' General Meeting within 2 days upon receipt of the
+proposal and submit such proposal to the Shareholders' General Meeting for approval.
+The Bank improved its enterprise risk management system and implemented supervisory requirements on Global Systemically
+Important Banks. External and internal audit achievements were used to improve internal control and audit supervision.
+The overall risk of the Group was under control. The Bank improved the compensation management system and resource
+allocation mechanism of the Group, and steadily enhanced employee performance management and compensation incentive
+system, to boost vitality of all institutions and enthusiasm of all employees of the Bank. Besides, the Bank vigorously fulfilled
+its social responsibilities by enhancing social responsibilities management and communication and actively answering
+justified appeals of the stakeholders.
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors reinforced its
+supervision over performance standards of the Board of Directors, the Senior Management and their members in accordance
+with the priorities of the Bank. In order to help the Bank continue to improve corporate governance and realize healthy
+and sustainable growth, supervision over material risks and internal control system was enhanced. On-site inspections on
+compliance of financial income and expenses and use efficiency of financial resources were also scaled up.
+The Bank put the strategic decision-making role and corporate governance leading role of the Board of Directors into
+good use. The Board of Directors focused on the reform of important fields and key links, constantly followed up the
+implementation of strategies, plans and decisions, promptly adjusted strategic priorities, and thoroughly studied various
+matters including objectives of transformation and development, institution and business layout, resource allocation and
+integration of the Group and enterprise risk management, ensuring the stable results growth of the Group. Supporting rules
+and regulations for performance standards of the Board of Directors were established and improved to ensure the Board of
+Directors fulfill its duties in accordance with relevant laws and regulations.
+Domestic
+Institutions
+Overseas
+Institutions
+Note: The above is the corporate governance framework chart as of the end of 2014.
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Responsibilities of the Shareholders' General Meeting
+As the authority organ of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders'
+General Meeting is responsible for, among others, deciding on business policies and material investment plans of the Bank;
+considering and approving the proposals on the annual financial budget, final accounts, profit distribution plans and loss
+recovery plans, electing and changing directors, shareholder supervisors and external supervisors; considering and approving
+the work report of the Board of Directors and the work report of the Board of Supervisors; adopting resolutions on merger,
+division, dissolution, liquidation, change of corporate form, increase or decrease of registered capital, issuance and listing
+of corporate bonds or other negotiable securities and repurchase of stocks; and amending the Articles of Association of the
+Bank.
+Annual Report 2014
+95
+Corporate Governance Report
+Responsibilities of the Board of Directors
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report to, the
+Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the Shareholders'
+General Meeting; implementing resolutions of the Shareholders' General Meeting; deciding on business plans, investment
+plans and development strategies of the Bank; formulating annual financial budgets and final accounts of the Bank;
+formulating profit distribution plans and loss recovery plans; formulating proposals on the increase or decrease of registered
+capital of the Bank; formulating fundamental management rules on risk management and internal control, and supervising
+the implementation of these rules; appointing or removing the President and the Board Secretary, and based on the
+President's nomination, appointing or removing Senior Executive Vice Presidents and other Senior Management members
+(except the Board Secretary), and deciding on their remuneration, rewards and sanctions; deciding or authorizing the
+President to set up relevant internal institutions of the Bank; regularly evaluating and improving corporate governance of
+the Bank; managing information disclosure matters of the Bank; and supervising and ensuring effective performance of
+management responsibilities of the President and other Senior Management members.
+Responsibilities of the Board of Supervisors
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report to, the Shareholders'
+General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance and due diligence
+of Directors and Senior Management members; supervising the performance of duties of the Board of Directors and
+the Senior Management; conducting audits on retiring or resigning Directors and Senior Management members where
+appropriate; examining and supervising the Bank's financial activities; examining financial information such as financial
+report, business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of
+Directors; examining and supervising business decisions, risk management and internal control of the Bank, and providing
+guidance for the internal audit departments of the Bank; formulating performance assessment measures for supervisors,
+assessing the performance and conduct of supervisors, and reporting to the Shareholders' General Meeting for approval;
+presenting proposals to the Shareholders' General Meeting; proposing to convene extraordinary general meetings,
+and convening and presiding over such meetings in case the Board of Directors fails to perform its duty of convening
+Shareholders' General Meeting; proposing to convene interim meetings of the Board of Directors.
+Responsibilities of the Senior Management
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, carrying out operational management of the Bank; organizing the
+implementation of business plan and investment plan approved by the Board of Directors; formulating detailed regulations
+and rules for operational management; formulating proposals on remuneration distribution and performance assessment for
+heads of internal departments and branches of the Bank; reporting operating results to the Board of Directors and the Board
+of Supervisors; preparing the annual financial budget, final accounts, profit distribution plans and loss recovery plans, and
+proposals on the increase or decrease of registered capital, issuance or listing of bonds, and making recommendations to the
+Board of Directors.
+Overview of Corporate Governance
+During the reporting period, the Bank highlighted the improvement of corporate governance as a key move in responding
+to the challenges and opportunities under the new normal in economic development. The Bank accommodated to
+supervisory requirements on Global Systemically Important Banks, intensified the duty performance and effective checks
+and balances mechanism of the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the
+Senior Management, and enhanced the enterprise risk management of the Group and interaction between the parent
+bank and subsidiaries and between domestic and overseas institutions. Additionally, the Bank focused on service quality
+improvement, enhanced the core competitiveness, and boosted the healthy development of businesses in an all-around
+manner. There is neither material divergence between actual corporate governance of the Bank and applicable regulations
+and requirements of regulatory authorities including CSRC, nor any problem identified by regulatory authorities but remain
+unresolved in respect of corporate governance. During the reporting period, the Bank received various important domestic
+and overseas corporate awards, including the "Platinum Award for All-Round Excellence" by The Asset, the Citation for
+Corporate Governance Disclosure by The Hong Kong Management Association and the "Icon on Corporate Governance" by
+the Corporate Governance Asia.
+96
+ICBC
+Corporate Governance Report
+Construction of the Organizational Framework of Corporate Governance
+During the reporting period, the Bank appointed and renewed the appointments of some Directors and changed the
+chairman of some special committees of the Board of Directors to ensure the Board of Directors operate in compliance with
+laws and regulations. The Bank also implemented the strategies of simplification, efficiency and good service and improved
+its organizational structure by organizing and implementing institutional restructuring of the Head Office and domestic
+branches. In addition, the Bank proactively explored the Group's corporate governance, and perfected group management
+and control and collaboration mechanism as well as the corporate governance framework, institutional system and working
+mechanism of its subsidiaries.
+Construction of the Corporate Governance Mechanism
+Profitability
+Units
+462,282
+100.0
+17,460
+Doctorate
+Other financial businesses
+2.5%
+Non-banking business
+Others
+1.1%
+13.4%
+At the end of 2014, the Bank had a total of 17,460 institutions, representing a decrease of 114 as compared with the end
+of the previous year. Among them, there were 17,122 domestic institutions and 338 overseas ones. Domestic institutions
+include the Head Office, 31 tier-one branches, 5 branches directly controlled by the Head Office, 26 banking offices of tier-
+one branches, 403 tier-two branches, 3,081 tier-one sub-branches, 13,467 outlets, 30 Head Office-level profitability units
+along with their directly controlled-institutions and branches, and 78 major subsidiaries and their branches.
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES (As at the end of December 2014)
+Assets Percentage
+Item
+IT
+(In RMB millions)
+8,820,680
+Number of Percentage
+(%) institutions
+42.8
+Percentage
+(%) Employees
+(%)
+31
+0.2
+15,142
+3.3
+Yangtze River Delta
+Head Office
+0.1%
+3.2%
+4.7%
+SPECIALIZATIONS AND ACADEMIC ACHIEVEMENTS OF DOMESTIC EMPLOYEES
+Employee Specialization
+Academic Achievements
+Personal banking
+42.4%
+Finance, accounting, treasury
+15.1%
+operations and opertional
+management
+Bachelor
+47.0%
+Corporate banking
+10.5%
+Associate
+33.6%
+Management
+6.3%
+Below associate
+14.6%
+Risk and compliance
+5.5%
+management
+Master
+Pearl River Delta
+4,680,319
+22.7
+2,652
+21.0
+95,227
+20.6
+Northeastern China
+1,001,247
+4.9
+3,924
+22.5
+96,058
+20.8
+Overseas and others
+1,919,486
+9.3
+416
+2.4
+16,668
+3.6
+Eliminated and
+undistributed assets
+Total
+(7,136,620)
+20,609,953
+(34.6)
+100.0
+3,676
+Basic Information on Employees and Institutions
+12.5
+Western China
+15.2
+62,283
+13.5
+3,342,070
+16.2
+2,144
+12.3
+51,696
+11.2
+Bohai Rim
+3,394,573
+16.5
+2,850
+16.3
+72,897
+15.7
+Central China
+2,008,309
+9.7
+1,767
+10.1
+52,311
+11.3
+2,579,889
+Directors, Supervisors, Senior Management, Employees and Institutions
+Pursuant to the State's policies, the 2014 annual remuneration to the Chairman of the Board of Directors, the President,
+the Chairman of the Board of Supervisors, Shareholder Supervisors and other Senior Management members of the Bank
+still followed the former measures, and the table below sets out the remuneration paid for 2014. Since January 2015,
+the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of Supervisors and
+other executives of the Bank has followed the State's policies relating to the remuneration reform on executives of central
+enterprises, and the specific remuneration will be disclosed in the 2015 Annual Report.
+McCarthy
+3/3
+10/10
+3/3
+3/3
+Fu Zhongjun
+3/3
+10/10
+4/4
+4/4
+Zheng Fuqing
+Fei Zhoulin
+Cheng Fengchao
+Independent
+Non-executive
+Directors
+Wong Kwong Shing,
+Frank
+4/4
+8/10
+3/3
+Malcolm Christopher
+6/6
+2/4
+Ge Rongrong
+24
+5/5
+45
+4/4
+7/10
+33
+3/3
+1/3
+4/4
+4/4
+10/10
+Strategy
+Committee
+Board of
+Directors
+Meeting
+Directors
+General
+Related Party
+Transactions
+Audit Management
+Committee
+Risk
+Attendances in person/Number of meetings during the reporting period
+Special Committees of the Board of Directors
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Corporate Governance Report
+ICBC
+102
+Report on the Meeting Plan of the Board of Directors for 2015
+Shareholders'
+3/3
+Nomination Compensation
+Committee Committee
+Control
+Committee
+3/3
+Wang Xiaoya
+Non-executive Directors
+4/4
+3/3
+3/4
+Committee
+8/10
+Yi Huiman
+3/4
+9/10
+1/3
+Jiang Jianqing
+Executive Directors
+3/3
+Report on Internal Audit for the First Half of 2014
+1/3
+Kenneth Patrick Chung
+3/3
+10/10
+5/5
+3/3
+Wang Xiaolan
+3/3
+9/9
+5/5
+3/3
+3/3
+Yao Zhongli
+3/3
+6/8
+2/4
+1/3
+Notes: (1) "Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+(2) Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+During the reporting period, the Audit Committee held five meetings, considered eight proposals including the 2013 Annual
+Report, the 2013 Capital Adequacy Ratio Report, the 2013 Internal Control Assessment Report and the Internal Audit Plan
+for 2014, and heard 13 reports including the internal audit report and appraisal plan for performance of external auditors.
+The Audit Committee put forward comments or suggestions on matters including the preparation of regular reports and the
+arrangement of internal and external audit.
+Performance Standards of the Audit Committee
+The Audit Committee is mainly responsible for supervising, inspecting and evaluating internal control, financial information
+and internal audit of the Bank and assessing mechanisms for the Bank's staff to report misconducts in financial statements,
+internal control, etc. and for the Bank to make independent and fair investigations and take appropriate actions. As at the
+disclosure date of this annual report, the Audit Committee of the Bank consisted of seven directors, including Independent
+Non-executive Directors Mr. Wong Kwong Shing, Frank, Mr. Kenneth Patrick Chung, Mr. Or Ching Fai, Mr. Hong Yongmiao
+and Mr. Yi Xiqun; Non-executive Directors Mr. Fei Zhoulin and Mr. Cheng Fengchao. Independent Non-executive Director
+Mr. Wong Kwong Shing, Frank was the chairman of the committee.
+◆ Audit Committee
+During the reporting period, the Strategy Committee of the Board of Directors held four meetings, considered 12 proposals
+including the Final Accounts Plan for 2013, the 2015-2017 Capital Planning and the Issuance Plan for Preference Shares.
+The Strategy Committee put forward comments or suggestions on matters including the strategic development planning,
+strategic capital allocation and major investment and financing plan of the Bank.
+Performance Standards of the Strategy Committee
+Li Jun
+The Strategy Committee is mainly responsible for considering the Bank's strategic development plan, business and
+institutional development plan, major investment and financing plan and other major matters critical to the Bank's
+development, making recommendations to the Board, and examining and assessing the soundness of the corporate
+governance framework to ensure financial reporting, risk management and internal control are compliant with corporate
+governance criteria of the Bank. As at the disclosure date of this annual report, the Strategy Committee of the Bank
+consisted of nine directors, including Executive Directors Mr. Jiang Jianqing and Mr. Yi Huiman; Independent Non-executive
+Directors Sir Malcolm Christopher McCarthy, Mr. Wong Kwong Shing, Frank, Mr. Or Ching Fai and Mr. Hong Yongmiao;
+Non-executive Directors Ms. Wang Xiaoya, Mr. Fu Zhongjun and Mr. Zheng Fuqing. Chairman of the Board of Directors
+Mr. Jiang Jianqing and Independent Non-executive Director Sir Malcolm Christopher McCarthy were the chairman and vice
+chairman of the committee, respectively.
+Corporate Governance Report
+103
+Annual Report 2014
+The Board of Directors of the Bank has established six special committees, namely, the Strategy Committee, the Audit
+Committee, the Risk Management Committee, the Nomination Committee, the Compensation Committee and the Related
+Party Transactions Control Committee. Except the Strategy Committee, chairmen of all the other committees were assumed
+by independent non-executive directors and more than half of the committee members were independent non-executive
+directors. During the reporting period, the performance of duties by the special committees of the Board of Directors of the
+Bank is set out below:
+Special Committees of the Board of Directors
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+◆ Strategy Committee
+5/6
+5/9
+3/3
+3/3
+4/5
+3/4
+9/10
+3/3
+Or Ching Fai
+2/3
+6/6
+-
+3/3
+5/5
+-
+10/10
+3/3
+4/4
+2/4
+3/4
+3/3
+Liu Lixian
+6/6
+4/4
+3/3
+5/5
+10/10
+Hong Yongmiao
+3/3
+6/6
+3/3
+3/3
+5/5
+4/4
+10/10
+Yi Xiqun
+The Audit Committee reviewed financial statements of the Bank on a regular basis, and had reviewed and submitted to
+the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also organized and
+conducted the internal control assessment for 2013 of the Group and engaged external auditors to audit the assessment
+report and procedures of the Bank with respect to the relevant regulatory requirements. Additionally, it strengthened
+communication with external auditors, attached importance to the supervision of external auditors and heard several reports
+of external auditors concerning annual audit results, management proposal and audit plan.
+Report on Risk Management for the First Half of 2014
+Report on the Implementation of the Plan on Authorization of the Board of Directors to the President in 2013 of
+Industrial and Commercial Bank of China Limited
+2014
+19 September
+Second
+Extraordinary
+Listened to
+Reviewed and
+approved
+approved
+Reviewed and
+approved
+Reviewed and
+Reviewed and
+approved
+Reviewed and
+approved
+Reviewed and
+approved
+Reviewed and
+approved
+approved
+Reviewed and
+Meeting
+results
+Report on the Related Party Transactions of Industrial and
+Commercial Bank of China Limited in 2013
+Proposal on Launching the Engagement of Accounting Firm for
+2014
+Proposal on the 2013 Profit Distribution Plan
+Annual
+6 June
+General
+2014
+Meeting
+for the Year
+Proposal on the 2013 Annual Report and its Abstract
+Beijing and
+Hong Kong
+concurrently by
+satellite
+Content
+Proposal on Fixed Asset Investment Budget for 2014
+Proposal on the Appointment of Mr. Zhang Hongli as an
+Executive Director of Industrial and Commercial Bank of China
+Limited
+Proposal on the 2013 Work Report of the Board of Directors of
+Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Work Report of the Board of Supervisors
+of Industrial and Commercial Bank of China Limited
+Proposal on the Appointment of Mr. Zhao Lin as a Shareholder
+Supervisor of Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Audited Accounts
+2013
+General
+Meeting of
+Beijing Spot
+voting and
+Internet voting
+Work Report of Independent Non-executive Directors of
+Industrial and Commercial Bank of China Limited for 2013
+Report on the Implementation of the Plan on Authorization of
+the Shareholders' General Meeting to the Board of Directors of
+Industrial and Commercial Bank of China Limited in 2013
+Proposal on 2015-2017 Capital Planning of ICBC
+Composition of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing directors. With diversified backgrounds, the
+Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed diversified perspectives and views, which ensured scientific decision-making of the Board of Directors. As
+at the disclosure date of this annual report, the Board of Directors of the Bank consisted of 14 directors, including two
+Executive Directors: Mr. Jiang Jianqing and Mr. Yi Huiman; six Non-executive Directors: Ms. Wang Xiaoya, Ms. Ge Rongrong,
+Mr. Fu Zhongjun, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao; six Independent Non-executive Directors:
+Mr. Wong Kwong Shing, Frank, Sir Malcolm Christopher McCarthy, Mr. Kenneth Patrick Chung, Mr. Or Ching Fai, Mr.
+Hong Yongmiao and Mr. Yi Xiqun. Mr. Jiang Jianqing was Chairman and Mr. Yi Huiman was Vice Chairman of the Board of
+Directors. All Executive Directors have worked in the areas of banking and management for a long time, possess extensive
+professional expertise and experience in those areas and are familiar with operation and management of the Bank. Most
+Non-executive Directors specialize in economic management and have rich management experience and good understanding
+of relevant polices and theories. The Independent Non-executive Directors are prestigious experts in the areas of economy,
+finance and audit, respectively, and most of them once worked at international institutions and are familiar with corporate
+finance and management. The number of Independent Non-executive Directors of the Bank accounted for more than one-
+third of the total members of the Board of Directors, complying with relevant regulatory requirements.
+Meetings of the Board of Directors
+During the reporting period, the Board of Directors of the Bank held 10 meetings, considered 61 proposals and listened to
+28 reports. The main proposals and reports are set out below:
+Proposal on the Fixed Asset Investment Budget for 2014
+.
+Board of Directors and Special Committees
+Proposal on the Employment Plan of the Group for 2014
+Proposal on the Amendment of the Rules of ICBC on the Recommendation and Nomination of Candidates for Directors
+Proposal on the Internal Audit Plan for 2014
+Proposal on Convening the First Extraordinary General Meeting of 2014
+Proposal on the Consolidated Statement Management of the Group in 2013 and Consolidated Statement Management
+Plan for 2014
+Proposal on the Liquidity Risk Management Strategy of Industrial and Commercial Bank of China Limited for 2014
+Proposal on the 2013 Internal Control Assessment Report of Industrial and Commercial Bank of China Limited
+Proposal on Launching the Engagement of Accounting Firm for 2014
+Proposal on the 2013 Audited Accounts
+Proposal on the 2013 Profit Distribution Plan
+.
+2014
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting of the Bank during the reporting period.
+Corporate Governance Report
+Listened to
+Listened to
+Reviewed and
+approved
+Reviewed and
+approved
+2014
+Proposal on General Authorization to Share Issuance of
+Industrial and Commercial Bank of China Limited
+Proposal in Respect of Issuance of Offshore Preference Shares
+by Industrial and Commercial Bank of China Limited
+Proposal in Respect of Issuance of Domestic Preference Shares
+by Industrial and Commercial Bank of China Limited
+Proposal on the Impact of Diluted Current-period Return from
+Preference Share Issuance of Industrial and Commercial Bank
+of China Limited on Major Financial Indicators and Measures to
+Make Up the Return
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+Proposal on Developing the 2014-2016 Shareholders' Return
+Plan of ICBC
+Proposal on the Payment of Remuneration to Directors and
+Supervisors for 2013
+Reviewed and
+approved
+Reviewed and
+approved
+Reviewed and
+approved
+Reviewed and
+approved
+Reviewed and
+approved
+Reviewed and
+approved
+The shareholders' general meetings were convened and held in strict compliance with relevant laws and regulations and
+the Articles of Association of the Bank. The Bank made announcements on the resolutions and disclosed legal opinions
+in a timely manner in accordance with regulatory requirements. For details of the above meetings, please refer to the
+announcements of the Bank on 15 April 2014, 6 June 2014 and 19 September 2014 on the websites of SEHK and SSE or the
+website of the Bank.
+100
+ICBC
+Proposal on Amendments to the Articles of Association of
+Industrial and Commercial Bank of China Limited
+Report on Appraisal Plan for Annual Performance of External Auditors of ICBC
+General
+Meeting of
+15 April
+2014
+Proposal on Convening the Second Extraordinary General Meeting of 2014
+•
+Proposal on the 2014 Interim Report and its Abstract
+Proposal in Respect of the Senior Management Performance Evaluation Plan for 2014
+Proposal on Renewal of the Liability Insurance for Directors, Supervisors and Senior Management Members for 2014-2015
+Proposal on the Management Measures of ICBC for Global Systemically Important Banks
+Proposal on the Country Risk Concentration Limit for 2014
+Proposal on the Third Quarterly Report of 2014
+Proposal on the Measures for the Liquidity Risk Management of ICBC (2014 Version)
+Proposal on the Liquidity Risk Contingency Program of ICBC (2014 Version)
+Proposal on the Nomination of Mr. Jiang Jianqing as a Candidate for Executive Director of Industrial and Commercial
+Bank of China Limited
+Proposal on the Nomination of Mr. Anthony Francis Neoh as a Candidate for Independent Director of Industrial and
+Commercial Bank of China Limited
+Proposal on the Nomination of Ms. Wang Xiaoya as a Candidate for Non-executive Director of Industrial and
+Commercial Bank of China Limited
+Proposal on the Nomination of Ms. Ge Rongrong as a Candidate for Non-executive Director of Industrial and
+Commercial Bank of China Limited
+Proposal on the Nomination of Mr. Zheng Fuqing as a Candidate for Non-executive Director of Industrial and
+Commercial Bank of China Limited
+Proposal on the Nomination of Mr. Fei Zhoulin as a Candidate for Non-executive Director of Industrial and Commercial
+Bank of China Limited
+Proposal on the Nomination of Mr. Cheng Fengchao as a Candidate for Non-executive Director of Industrial and
+Commercial Bank of China Limited
+Proposal on Amendments to the Working Rules for the President of Industrial and Commercial Bank of China Limited
+Proposal on Adjusting the Validity of Authorization for Tier-2 Capital Instrument Issuance and the Issuing Markets
+Proposal on Convening the First Extraordinary General Meeting of 2015
+Report on the Implementation of the Plan on Authorization of the Shareholders' General Meeting to the Board of
+Directors of Industrial and Commercial Bank of China Limited in 2013
+Report on the Report on the Directors' Performance Appraisal by the Board of Directors for 2013
+Report on Anti-money Laundering of the Group for 2013
+Report on the Management Report about the Inside Transactions of Industrial and Commercial Bank of China Limited in
+2013
+Report on the Related Party Transactions of Industrial and Commercial Bank of China Limited in 2013
+Report on the Identification of Related Parties in 2013
+•
+Report on Information Technology Management in 2013
+Report on External Audit Work for 2013
+Report on Internal Control Audit Results of 2013
+Report on the Work of the Board of Directors in 2013 and the Work Plan for 2014
+Report on the Composition of the Board of Directors in 2013
+Report on Internal Audit in 2013
+Proposal on Early Redemption of A Share Convertible Corporate Bonds
+Report on Risk Management in 2013
+Proposal on Amendments to the Articles of Association of Industrial and Commercial Bank of China Limited
+Proposal on Developing the 2014-2016 Shareholders' Return Plan of ICBC
+Proposal in Respect of Issuance of Offshore Preference Shares by Industrial and Commercial Bank of China Limited
+Proposal in Respect of Issuance of Domestic Preference Shares by Industrial and Commercial Bank of China Limited
+Proposal on the Impact of Diluted Current-period Return from Preference Share Issuance of Industrial and Commercial
+Bank of China Limited on Major Financial Indicators and Measures to Make Up the Return
+The Bank continued to improve the management of group information disclosure affairs by adhering to the principle of
+"authenticity, accuracy, completeness, timeliness and fairness" and the orientation of meeting investors' needs. While
+ensuring legal and regulatory compliance of information disclosure, the Bank moderately enhanced voluntary disclosure
+and continued to expand the depth and breadth of information disclosure, to effectively guarantee shareholders' right to
+information.
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results, domestic and overseas road shows and reverse road shows and attending famous investment forums
+at home and abroad and delivering keynote speeches during the reporting period. The Bank gave full play to the
+communication platforms including investor interactive platform of SSE, investor relations website, investor hotline and
+investor email of the Bank, to understand investors' needs and provide sufficient information feedback in a timely manner.
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+shareholders' general meetings of the Bank strictly complied with the relevant provisions of the Company Law and the
+Articles of Association of the Bank, ensuring that shareholders could exercise their right of participation in the shareholders'
+general meetings smoothly. Since it was listed, in order to treat A and H minority shareholders fairly, the Bank has held the
+Annual General Meeting for the Year 2013 in Beijing and Hong Kong concurrently by satellite and set up registration offices
+of A and H shareholders both in Beijing and Hong Kong to facilitate the voting of shareholders. The number of shareholders
+who participated in voting at the Annual General Meeting for the Year 2013 amounted to 2,528, further increasing
+compared to the previous year.
+Contacts
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the shareholders' general meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform
+of SSE, investor relations website, investor hotline and investor email and hotline, fax and email of the shareholders' general
+meetings of the Bank as well. For contact details, please refer to the section headed "Corporate Governance Report
+Investor Relations".
+If a shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share certificates
+and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the Bank. For
+contact details, please refer to "Corporate Information".
+Annual Report 2014
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+99
+Shareholders' General Meeting
+During the reporting period, the Bank convened one annual general meeting and two extraordinary general meetings, which
+considered and approved a total of 16 proposals, and listened to three reports. Details of the meetings are as follows:
+Meeting
+First
+Date
+Place
+Extraordinary
+Corporate Governance Report
+Beijing
+Effective Communication with Shareholders
+Proposal on the 2013 Capital Adequacy Ratio Report
+Proposal on General Authorization to Share Issuance of Industrial and Commercial Bank of China Limited
+Proposal on 2015-2017 Capital Planning of ICBC
+•
+Corporate Governance Report
+101
+Annual Report 2014
+Corporate Governance Report
+Proposal on the Appointment of Mr. Zhang Hongli as a Member of the Risk Management Committee of the Board of
+Directors of Industrial and Commercial Bank of China Limited
+Proposal on Changes in the Chairman of Certain Special Committees of the Board of Directors
+Proposal on the Payment of Remuneration to Directors and Supervisors for 2013
+Proposal on the Payment of Remuneration to Senior Management Members for 2013
+Proposal on Acquisition of Shares in Turkey-based Tekstilbank
+Proposal on the First Quarterly Report of 2014
+Proposal on the 2013 Capital Adequacy Ratio Management Report of Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Corporate Social Responsibility Report of Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Work Report of the Board of Directors of Industrial and Commercial Bank of China Limited
+Proposal on Convening the Annual General Meeting for the Year 2013
+Proposal on the Nomination of Mr. Zhang Hongli as a Candidate for Executive Director of Industrial and Commercial
+Bank of China Limited
+During the preparation and audit of the 2014 financial statements, the Audit Committee set out related matters such as
+audit schedule and arrangement through negotiation with external auditors, followed the status of external audit and
+conducted supervisions over relevant works at appropriate time by means of listening to reports and holding informal
+discussions, and reviewed the unaudited and preliminarily audited annual financial statements respectively. The Audit
+Committee held a meeting on 24 March 2015, and considered that the annual financial statements truly and completely
+reflected the financial position of the Bank. The Audit Committee reviewed the summary of audit work performed by
+external auditors during the year and made an overall and objective assessment on its performance and quality of practice.
+It also approved the renewal of the engagement of KPMG Huazhen (Special General Partnership) and KPMG as the external
+auditors of the Bank for 2015 and the engagement of KPMG Huazhen (Special General Partnership) as the internal control
+auditors of the Bank for 2015, and presented the proposals to the Board of Directors for consideration.
+Resigned Directors
+ICBC
+107
+Corporate Governance Report
+Investigation and Training of Directors
+During the reporting period, the Bank developed the training plan for the Board of Directors, increased training resources,
+and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors in continuing
+to improve their comprehensive quality and ability to perform their duties. During the reporting period, the Directors of the
+Bank complied with Code Provision A.6.5 of the Corporate Governance Code under Appendix 14 of the Hong Kong Listing
+Rules and the relevant regulatory requirements in the PRC, and attended relevant trainings according to work needs. Besides,
+the Directors of the Bank enhanced their professional level by attending forums and seminars as well as conducting on-site
+investigations in some domestic and overseas peers and affiliates of the Bank. Subject matters of the trainings attended by
+the Directors of the Bank during the reporting period were mainly as follows:
+Trainings held by the regulatory institutions:
+Introduction to best corporate governance practices
+Interpretation of regulatory policies
+Overview of regulation over Global Systemically Important Banks
+Training on qualifications of independent directors of listed companies
+Special business trainings of the Bank:
+•
+•
+Cash flow statement of commercial banks
+Internet-based finance and e-commerce platforms
+Introduction to RMB bonds business
+Review of Chinese listed banks in 2013 and outlook
+From the perspective of bank governance leadership network - Status quo of the banking sector five years after the
+financial crisis
+104
+ICBC
+108
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors fully comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the Bank
+or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent Non-executive Directors and considered that they were independent.
+During the reporting period, the Bank's Independent Non-executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, gave independent opinions during consideration of issues, and provided
+recommendations on areas such as business development and significant decision-making of the Bank. During the
+adjournment, Independent Non-executive Directors of the Bank conducted on-site investigations in terms of localized
+operation and development of overseas institutions, risk management, Internet-based finance and talent cultivation, etc.
+Additionally, they also exchanged opinions with the Management during special-topic discussions. During the reporting
+period, the Bank's Independent Non-executive Directors put forward comments and suggestions in respect of operation and
+management and the implementation of the strategies of the Bank, such as improving the Group's corporate governance,
+controlling asset quality, implementing capital planning and so on. The Bank paid close attention to the comments and
+suggestions, and organized the implementation thereof according to the actual conditions.
+Independence and Performance of Duties of Independent Non-executive Directors
+During the reporting period, the Board Secretary of the Bank attended the specialized trainings held by the regulatory
+institutions and The Hong Kong Institute of Charted Secretaries, with the training hours over 15 hours, which meets relevant
+regulatory requirements.
+Annual Report 2014
+Training of Board Secretary
+Introduction to provisions on related party transactions management
+•
+Introduction to corporate governance of the Bank and operation of the Board of Directors
+Introduction trainings for newly-appointed directors of the Bank:
+Introduction to deposits models of commercial banks
+Introduction to investigation of the International Audit Committee in 2014
+Introduction to management of inside information and insiders
+The Bank has strictly complied with the provisions of the places where the Bank is listed and the Articles of Association of
+the Bank that Directors are elected by the Shareholders' General Meeting with a term of three years, and the appointment
+shall take effect from the date of approval by CBRC. Directors may be re-appointed through re-election at the Shareholders'
+General Meeting after expiry of their term. The term for re-appointment is from the date of approval by the Shareholders'
+General Meeting.
+•
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2013 Annual Report,
+the First Quarterly Report, the Interim Report and the Third Quarterly Report of 2014 as scheduled.
+◆ Compensation Committee
+Corporate Governance Report
+105
+Annual Report 2014
+During the reporting period, the Nomination Committee held three meetings, considered 11 proposals including the
+nomination of Mr. Jiang Jianqing and Mr. Zhang Hongli as candidates for Executive Directors, the nomination of Mr.
+Anthony Francis Neoh as a candidate for Independent Non-executive Director, the nomination of Ms. Wang Xiaoya, Ms.
+Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao as candidates for Non-executive Directors and
+the amendment of the Rules of ICBC on the Recommendation and Nomination of Candidates for Directors, and heard the
+report in respect of the composition of the Board of Directors in 2013. The Nomination Committee put forward comments
+or suggestions on matters including the preparation of diversified policy for members of the Board of Directors and
+recommendation and nomination of candidates for directors.
+Performance Standards of the Nomination Committee
+The Compensation Committee is mainly responsible for formulating assessment measures on the performance of duties
+for directors, organizing the assessment on the performance of duties of Directors, putting forth proposal on remuneration
+distribution for Directors, putting forth proposal on remuneration distribution for Supervisors based on the performance
+assessment on Supervisors carried out by the Board of Supervisors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the performance and behaviors of Senior
+Management members. As at the disclosure date of this annual report, the Compensation Committee of the Bank consisted
+of eight directors, including Executive Director Mr. Yi Huiman; Independent Non-executive Directors Mr. Yi Xiqun, Mr. Wong
+Kwong Shing, Frank, Sir Malcolm Christopher McCarthy, Mr. Kenneth Patrick Chung and Mr. Or Ching Fai; Non-executive
+Directors Ms. Wang Xiaoya and Mr. Fu Zhongjun. Independent Non-executive Director Mr. Yi Xiqun was the chairman of the
+committee.
+The Articles of Association of the Bank specifies methods and procedures to nominate directors. Please refer to Article 115
+of the Articles of Association of the Bank. During the reporting period, the Bank appointed and renewed the appointments
+of directors of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews
+the qualifications of candidates for directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+Committee shall pay attention to the complementarity in terms of expertise, professional competence and experience,
+cultural and educational background, gender, etc. of the candidates, to ensure the directors are well equipped, experienced
+and have diversified perspectives and views. In order to implement the requirement, the Nomination Committee assesses
+the improvement of diversified composition of the Board of Directors in addition to framework, number of directors and
+formation on a yearly basis, and discusses and designs measurable goals according to actual conditions. As at the disclosure
+date of this annual report, there were six Independent Non-executive Directors and two female Directors, accounting
+for three-seventh and one-seventh of the total members of the Board of Directors, respectively. The Bank attached
+importance on diversified sources and backgrounds of directors and continued the efforts to build a professional board, thus
+underpinning the effective operation and scientific decision-making of the Board of the Directors.
+During the reporting period, the Risk Management Committee held three meetings, considered seven proposals including
+the liquidity risk management strategy for 2014, the country risk concentration limit for 2014, the measures for the liquidity
+risk management and the management measures for Global Systemically Important Banks, and heard six reports including
+the risk management for 2013 and the first half of 2014. The Risk Management Committee put forward comments or
+suggestions on matters including the enterprise risk management of the Bank.
+Performance Standards of the Risk Management Committee
+The Risk Management Committee is primarily responsible for reviewing and revising the strategy, policy and procedures
+of risk management and internal control process of the Bank, and supervising and evaluating the performance of Senior
+Management members and risk management department in respect of risk management. As at the disclosure date of
+this annual report, the Risk Management Committee of the Bank consisted of eight directors, including Independent
+Non-executive Directors Mr. Or Ching Fai, Sir Malcolm Christopher McCarthy, Mr. Kenneth Patrick Chung and Mr. Hong
+Yongmiao; Non-executive Directors Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao.
+Independent Non-executive Director Mr. Or Ching Fai was the chairman of the committee.
+◆Risk Management Committee
+Corporate Governance Report
+Term of Directors
+◆ Nomination Committee
+Performance Standards of the Compensation Committee
+The Nomination Committee is mainly responsible for making recommendations to the Board of Directors on candidates for
+directors and Senior Management members, nominating candidates for chairmen and members of special committees of
+the Board of Directors, and formulating the standards and procedures for selection and appointment of directors and Senior
+Management members as well as the training and development plans for Senior Management members and key reserved
+talents. The Nomination Committee is also responsible for assessing the structure, size and composition of the Board of
+Directors on a yearly basis and making recommendations to the Board of Directors based on the Bank's development strategy.
+As at the disclosure date of this annual report, the Nomination Committee of the Bank consisted of eight directors, including
+Executive Director Mr. Yi Huiman; Independent Non-executive Directors Mr. Hong Yongmiao, Mr. Wong Kwong Shing, Frank,
+Sir Malcolm Christopher McCarthy, Mr. Or Ching Fai and Mr. Yi Xiqun; Non-executive Directors Ms. Ge Rongrong and Mr. Fei
+Zhoulin. Independent Non-executive Director Mr. Hong Yongmiao was the chairman of the committee.
+The Compensation Committee organized the performance assessment of directors, and put forth proposal on remuneration
+distribution for directors and submitted the same to the Shareholders' General Meeting after the approval of the Board
+of Directors. It also formulated and reviewed the assessment measures and compensation plans for Senior Management
+members of the Bank and evaluated the performance and behaviors of Senior Management members, results of which
+were submitted to the Board of Directors or the Shareholders' General Meeting, if falling into the responsibilities of the
+Shareholders' General Meeting, for approval. According to applicable regulations including the Measures on the Assessment
+of Performance of Duties of Directors in Commercial Banks (Trial) issued by CBRC, the Articles of Association and the Rules
+on the Assessment of Performance of Duties of Directors by the Board of Directors (Trial) of the Bank, the Compensation
+Committee organized the performance assessment of directors by the Board of Directors for 2013.
+Responsibilities of Directors in Respect of Financial Statements
+During the reporting period, the Compensation Committee held four meetings, considered three proposals on the
+payment of remuneration to Directors, Supervisors and Senior Management members for 2013 and the 2014 performance
+evaluation plan for Senior Management members, etc., and heard two reports including the 2013 assessment report on the
+performance of duties of the directors by the Board of Directors. The Compensation Committee put forward comments or
+suggestions on matters including improvement of performance standards assessment of directors.
+During the reporting period, the working groups of the special committees provided various services and supports to the
+performance of duties by special committees with the focus on transformation and development as well as reform and
+innovation. In particular, the working groups researched and discussed many activities to support and complement the work
+of the special committees, assisted in the surveys of special committees in respect of "making good use of both existing and
+additional monetary and financial resources and strictly controlling credit risk", "training and management of employees",
+etc., arranged special reports and seminars and provided references to directors, to further enhance the involvement of
+the special committees in the reform and development of the Bank and the communication and exchange between the
+Directors, between the Directors and the Management and between branches.
+The working groups of special committees of the Board of Directors are mainly responsible for, among others, assisting on
+the formulation of annual work plans of the Board of Directors and special committees; preparing for regular meetings of
+special committees of the Board of Directors; assisting special committee members to draft their research plans and carry out
+related researches; assisting special committees to communicate with Senior Management and relevant departments of the
+Bank; and providing assistance in daily operation of special committees.
+Working Groups of Special Committees of the Board of Directors
+During the reporting period, the Strategy Committee put forward comments or suggestions on matters including the
+strategic development planning, strategic capital allocation and major investment and financing plans of the Bank. The
+Audit Committee put forward comments or suggestions on matters including the preparation of regular reports, the
+internal audit plan and the assessment of performance standards of external auditors. The Risk Management Committee put
+forward comments or suggestions on matters including the enterprise risk management, management measures for Global
+Systemically Important Banks, anti-money laundering of the Group. The Nomination Committee put forward comments or
+suggestions on matters including the diversified composition of directors, recommendation and nomination of directors, the
+adjustment of members of special committees of the Board of Directors and the assessment of composition of the Board
+of Directors. The Compensation Committee put forward comments or suggestions on matters including the assessment
+of performance standards of directors, the payment of remuneration to Directors, Supervisors and Senior Management
+members and the Senior Management performance evaluation plan. The Related Party Transaction Control Committee put
+forward comments or suggestions on matters including the identification of related parties, the improvement of related party
+transactions management system and the management of inside transactions.
+Important Comments and Suggestions Put Forward by Special Committees of the Board of Directors
+To effectively play the role of special committees of the Board of Directors in offering professional support to the Board of
+Directors, according to the working regulations for special committees, the Bank established a mechanism of working groups
+of special committees. The Board of Directors' Office led relevant departments of the Bank and set up working groups of
+special committees of the Board of Directors as decision-making support center, research supporting institution and regular
+communication bridge for special committees. Working groups provided service support work for special committees in
+terms of information gathering, research support, day-to-day contact, etc.
+ICBC
+♦ Related Party Transactions Control Committee
+106
+During the reporting period, the Related Party Transactions Control Committee held six meetings, considered four proposals
+in respect of, among others, the identification of related parties of the Bank, and heard four reports on the related party
+transactions in 2013, the inside transactions management in 2013 and the identification of related parties of the Bank in
+2013, etc. The Related Party Transaction Control Committee put forward comments or suggestions on matters including the
+improvement of management of related party transactions and inside transactions of the Bank.
+Performance Standards of the Related Party Transactions Control Committee
+Corporate Governance Report
+The Related Party Transactions Control Committee is mainly responsible for identifying the Bank's related parties, reviewing
+major related party transactions, and receiving related party transaction statistics and reporting information of general
+related party transactions. As at the disclosure date of this annual report, the Related Party Transactions Control Committee
+of the Bank consisted of four directors, including Independent Non-executive Directors Mr. Kenneth Patrick Chung, Mr.
+Wong Kwong Shing, Frank, Mr. Hong Yongmiao and Mr. Yi Xiqun. Independent Non-executive Director Mr. Kenneth Patrick
+Chung was the chairman of the committee.
+0.001516
+Percentage in
+total ordinary
+share capital
+(%)
+(%)
+Percentage in
+H shares
+(share)
+1,316,040
+H shares held
+0.000372
+Capacity
+Spouse's interest
+Number of
+Nature of
+interests
+Long position
+Save as disclosed above, as at 31 December 2014, none of the Directors or Supervisors of the Bank had any interests or short
+positions in the shares, underlying shares or debentures of the Bank or any of its associated corporations (as defined in Part
+XV of the Securities and Futures Ordinance of Hong Kong) which have to be notified to the Bank and SEHK under Divisions
+7 and 8 of Part XV of the Securities and Futures Ordinance of Hong Kong (including interests or short positions therein
+that they shall be deemed to have pursuant to such provisions of the Securities and Futures Ordinance of Hong Kong), or
+any interests or short positions which have to be recorded in the register under Section 352 of the Securities and Futures
+Ordinance of Hong Kong, or any interests or short positions which have to be notified to the Bank and SEHK pursuant to
+the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong Listing
+Rules.
+Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for particulars on the related party
+transactions defined under the laws, regulations and accounting standards of China.
+In 2014, the Bank carried out standardized management of the Group's connected transactions in strict accordance with the
+regulations of CBRC and CSRC as well as listing rules in Shanghai and Hong Kong, and fostered the compliance culture on
+connected transactions by optimizing the information management system for connected transactions, organizing connected
+transaction management training and improving the connected transactions management process of pre-transaction
+examination, in-process monitoring and post-transaction assessment audit. As a result, the Group's refined management of
+connected transactions was further boosted. During the reporting period, the Bank's connected transactions were conducted
+in compliance with applicable laws and regulations, and no connected transaction that impaired the interest of the Bank and
+small and medium-sized shareholders was found.
+During the reporting period, the Bank's connected transactions were conducted in accordance with ordinary commercial
+terms under conditions that were not more favorable than the similar transactions between non-related parties. The
+terms and conditions of the relevant transactions were reasonable and complied with the overall interests of the Bank
+and shareholders. Furthermore, the Bank had no connected transaction to be submitted to the Board of Directors or the
+Shareholders' General Meeting for review, and all connected transactions occurred complied with the Listing Rules of the
+Shanghai Stock Exchange and the Hong Kong Listing Rules on disclosure exemptions.
+116
+ICBC
+Report of the Board of Directors
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank do not relate to one another with respect to finance, business, family, or other material
+relations required to be disclosed.
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved performance assessment system and incentive restriction mechanism. From the perspectives of economic benefit,
+risk cost control and social responsibilities, the Bank adopted a system composed of balanced scorecard-based indicators
+for management and duties allocation based indicators for individuals. Payment of part of the performance-based
+annual remuneration of the Bank's Chairman of the Board of Directors, President, Chairman of the Board of Supervisors,
+Shareholder Supervisors and other Senior Management members is deferred and shall be paid in three years, and the
+proportion payable each year will be one-third of the amount. The deferred payment is accrued in the Bank's accounts, and
+shall be made with regard to the operating performance and status for the said years. The Bank has contributed to statutory
+retirement programs organized by Chinese governmental organizations at different levels for Directors, Supervisors and
+Senior Management members concurrently as the employees of the Bank. Upon obtaining all applicable approvals, the Bank
+will implement a long-term incentive program. As at 31 December 2014, the Bank had not granted any share appreciation
+rights to any Director, Supervisor, Senior Management member, or other core business personnel designated by the Board of
+Directors.
+Executive Directors: Mr. Jiang Jianqing and Mr. Yi Huiman;
+Or Ching Fai (Director)
+Members of the Board of Directors
+Connected Transactions
+Name
+Donations During the reporting period, the Group made external donations of RMB50,863.3 thousand in total.
+Directors' and Supervisors' Rights to Acquire Shares or Debentures As at 31 December 2014,
+the Bank did not grant any rights to acquire shares or debentures to any of its Directors or Supervisors, nor were any such
+rights exercised by any of the Directors or Supervisors. Neither the Bank nor its subsidiaries entered into any agreement or
+arrangement enabling the Directors or Supervisors to acquire benefits by means of the acquisition of shares in or debentures
+of the Bank or any other body corporate.
+Formulation and Implementation of Cash Dividend Policy
+Non-executive Directors: Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Fu Zhongjun, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr.
+Cheng Fengchao;
+The formulation and implementation of the Bank's cash dividend policy, which has been reviewed and approved by
+the Independent Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the
+requirements provided in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and
+proportion are clear and explicit, and the decision-making procedure and mechanism are complete. Minority shareholders
+can fully express their opinions and appeals, to completely safeguard their legitimate rights.
+Reserves Changes in the reserves as at the end of 2014 are set out in the "Consolidated Statement of Changes in
+Equity" of the financial statements.
+114
+ICBC
+Report of the Board of Directors
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2014 are set out in
+"Note 42. to the Financial Statements: Reserves" of this annual report.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2014 is set
+out in the section headed "Financial Highlights" of this annual report.
+Property and Equipment Changes in property and equipment for the year ended 31 December 2014 are set out in
+"Note 30. to the Financial Statements: Property and Equipment" in this annual report.
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2014 are set out in the sections headed
+"Discussion and Analysis Business Overview Internationalized and Diversified Operation" and "Note 28. to the
+Financial Statements: Investments in Subsidiaries" in this annual report respectively.
+-
+Share Capital and Public Float Changes in the share capital of the Bank for the year ended 31 December 2014
+are set out in "Note 40. to the Financial Statements: Share Capital". As at the latest practicable date before the publication
+of this annual report, the Bank has maintained the minimum public float of 23.45%, based on the publicly available
+information and to the best knowledge of the Board of Directors of the Bank.
+_
+Purchase, Sale or Redemption of Securities For details on the redemption of ICBC Convertible Bonds,
+please refer to "Details of Changes in Share Capital and Shareholding of Substantial Shareholders Particulars of A Share
+Convertible Bonds". Save as disclosed above, during the reporting period, neither the Bank nor any of its subsidiaries
+purchased, sold or redeemed any listed securities of the Bank.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital by issuing shares through
+public or non-public offering, issuing bonus shares to the existing shareholders, converting capital reserve to share capital or
+using other methods as allowed by applicable laws and administrative regulations or approved by relevant authorities.
+Major Customers In 2014, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank during the year.
+Use of Proceeds from Fundraising Activities The funds raised from the Bank's fundraising activities were
+used for the purposes as disclosed in the prospectuses, namely, strengthening the capital base to support the ongoing
+growth of the Bank. For future planning disclosed in the public disclosure documents such as previous offering prospectuses
+and fund raising prospectuses issued by the Bank which has continued during the reporting period, its implementation
+progress conformed to the planning as described after verification and analysis. For details on the use of funds raised
+from the issue of preference shares of the Bank, please refer to "Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders - Particulars of Preference Shares".
+Annual Report 2014
+115
+Report of the Board of Directors
+Directors' and Supervisors' Interests in Contracts of Significance During the reporting period, none
+of the Directors or Supervisors of the Bank had any material interests, whether directly or indirectly, in any contract of
+significance regarding the Bank's business to which the Bank or any of its subsidiaries was a party. None of the Directors or
+Supervisors of the Bank has entered into any service contract with the Bank, which is not determinable by the Bank within
+one year without payment of compensation (other than statutory compensation).
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Group.
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and Supervisors
+As at 31 December 2014, the following Director of the Bank is regarded to possess the interests as defined in Part XV of the
+Securities and Futures Ordinance of Hong Kong for the shares held by his spouse:
+Independent Non-executive Directors: Mr. Wong Kwong Shing, Frank, Sir Malcolm Christopher McCarthy, Mr. Kenneth
+Patrick Chung, Mr. Or Ching Fai, Mr. Hong Yongmiao and Mr. Yi Xiqun.
+Report on the Management Recommendations for 2013
+Jiang Jianqing
+Chairman
+Report on the Special Investigation and Research concerning Inter-bank Business of ICBC
+Report on the Implementation of 2013 Supervision Report and 2014 Special Research Report of the Board of
+Supervisors
+Report on the Audit Results of 2013 Financial Statements
+Note: (1) Calculated by dividing cash dividends (pre-tax) by net profit attributable to equity holders of the parent company for the period.
+During the reporting period, the Bank did not distribute any preference share dividend.
+Report on Internal Control Audit Results of 2013
+Report on the Agreed-upon Procedures for the First Quarter of 2014
+Report on Review Results of the 2014 Interim Financial Report
+Report on the Agreed-upon Procedures for the Third Quarter of 2014
+Report on Internal Audit for 2013 and Internal Audit Plan for 2014
+Report on Internal Control and Compliance
+Report on the Operating Results for the First Quarter of 2014
+Report on the Operating Results for the First Half Year of 2014
+Report on the Operating Results for the Third Quarter of 2014
+Report on the Financial Management
+Report on the Group's Consolidated Management
+Report on the Implementation of Risk Appetite
+118
+Report on the Liquidity Risk Management
+Report on the Inter-bank Business Management
+Report on the Disposal and Write-off of Assets
+Report on the Credit Risk Management of Overseas Institutions
+Report on the Risk Management of Asset Business
+Report on the Specialized Financing Business Management
+ICBC
+Report on the Special Investigation and Research concerning Idle Fixed Assets of ICBC
+Report on the Special Inspection of Financial Income and Expenses
+Report on the Special Research
+Report on the Supervision for the Third Quarter of 2014
+Annual Report 2014
+117
+Report of the Board of Supervisors
+Meetings of the Board of Supervisors and its Special Committee
+Meetings of the Board of Supervisors
+During the reporting period, the Board of Supervisors held eight meetings, reviewed and approved 20 proposals and listened
+to 44 reports, of which the major ones are listed as follows:
+Proposal on the 2013 Work Report of the Board of Supervisors of Industrial and Commercial Bank of China Limited
+Proposal on the 2014 Annual Work Plan of the Board of Supervisors of Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Annual Report and its Abstract
+Proposal on the 2013 Audited Accounts
+Proposal on the 2013 Profit Distribution Plan
+Proposal on the 2013 Internal Control Assessment Report of Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Corporate Social Responsibility Report of Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Supervision Report of the Board of Supervisors of Industrial and Commercial Bank of China Limited
+Proposal on the 2013 Assessment Report on the Performance of Duties of the Board of Directors, the Senior
+Management and their Members
+By Order of the Board of Directors
+Proposal on the 2013 Assessment Report on the Performance of Duties of the Supervisors
+Proposal on the 2014 Interim Report and its Abstract
+Proposal on the Third Quarterly Report of 2014
+Proposal on Amendments to the Articles of Association of Industrial and Commercial Bank of China Limited
+Proposal on the Implementation Measures for Duty Performance of Financial Internal Control Risk Supervision by the
+Board of Supervisors of Industrial and Commercial Bank of China Limited
+Proposal on the Nomination of Candidates for Shareholder Supervisor of Industrial and Commercial Bank of China
+Limited
+Proposal on the 2014 Implementation Plan on the Performance Assessment of Duties of the Board of Directors, the
+Senior Management and their Members by the Board of Supervisors
+Proposal on the 2014 Implementation Plan on the Performance Assessment of Duties of the Supervisors by the Board of
+Supervisors
+Proposal on the Engagement of Accounting Firm for 2014
+Report on Interviews with Directors and Senior Management
+Report on the Supervision for the Fourth Quarter of 2013
+Report on the Supervision for the First Quarter of 2014
+Report on the Supervision for the Second Quarter of 2014
+Proposal on the First Quarterly Report of 2014
+35
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile take account of the long-term interests of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be argued and proved in detail to form a written
+argumentative report for Independent Non-executive Directors to issue their opinions, and then the report will be submitted
+to the Shareholders' General Meeting for approval as a special resolution.
+83,565
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Investor Enquiries
+In 2015, the Bank will further and proactively deepen the communication and exchange with investors to enhance the
+investors' understanding and acceptance of the Bank and protect legitimate interests of the investors, and at the same time
+expect to arouse more support from, and attention of, the investors.
+In 2014, against the backdrop of more stringent financial regulation around the globe and the new normal in Chinese economic
+development and operation of banks, the Bank strived to improve the quality of investor relations services and the generation of
+good return to shareholders following the principle of serving investors in a proactive, detailed, efficient and interactive manner.
+The Bank established a comprehensive management system for investor relations across regions and types of investors,
+and further enhanced the awareness to serve the investors in a more detailed manner. The Bank explored the effect of
+reform, predictable prospect and strategic consistency of the Bank through press conference in relation to periodic results,
+domestic and overseas non-transactional road shows, press conferences with large institutions, reverse road shows and
+daily investor communication platform. The Bank improved investor relations information collection and market information
+feedback transmission mechanism, strengthened dynamic monitoring of share price valuation, analyst reports and media
+public opinions, followed and analyzed spotlight issues of the capital market, and effectively enhanced the quality of
+communication with the investors. The Bank actively understood and solicited the opinions and suggestions of the capital
+market on the Bank, facilitated the timely reaction of the Management with the help of many operation and communication
+strategies, and minimized the influence of emergencies on the share price, so as to continuously strengthen the level of
+corporate governance and core values of the Bank.
+Overview of Investor Relations Activities in 2014
+Investor Relations
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as tax
+advisory services and professional services for the RMB-denominated bonds issuance project, and received RMB8.11 million
+for such professional non-audit services.
+KPMG Huazhen (Special General Partnership) and KPMG have been providers of audit services for the Bank for two consecutive
+years (2013 and 2014). Ernst & Young Hua Ming (LLP) and Ernst & Young were external auditors of the Bank in 2012.
+The Annual General Meeting for the Year 2013 of the Bank reviewed and approved the Proposal on Launching the Engagement
+of Accounting Firm for 2014, engaging KPMG Huazhen (Special General Partnership) to be domestic auditors of the Bank for the
+financial statements audit in 2014, and KPMG was international auditors of the Bank for the financial statements audit in 2014.
+KPMG Huazhen (Special General Partnership) was also auditors of internal control of the Bank in 2014.
+Engagement of Auditors
+of enhancing risk management and internal control of the Bank. Moreover, in order to address efficiency and effectiveness
+of audits, the Bank improved audit procedures, integrated audit resources, strengthened quality management, promoted
+information-based audit, upgraded audit information system platforms and popularized new audit technologies. Last but not
+least, the Bank continued to build a professional audit team by strengthening professional training and continuous education
+after obtaining professional qualifications for audit personnel and improving the structure and qualifications of the audit team.
+Corporate Governance Report
+ICBC
+110
+During the reporting period, the Bank implemented risk-oriented audit activities according to the development strategy and
+central tasks of the Bank, and fully accomplished the annual internal audit plan. In response to the changes of operating
+environment and financial regulation, the Bank intensified the audit efforts in the fields of credit business, financial benefits,
+financial assets business, Internet-based finance, information system security, liquidity management of overseas institutions,
+etc., reviewed the adequacy and effectiveness of identification, measurement, management and reporting of various risks
+during the implementation of the Capital Regulation, and assessed the efficiency and results of internal control of the
+Group. The Bank also paid close heed to audit findings and made full use of relevant audit recommendations, with the aim
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB161 million for the audit
+of financial statements (including the audit of financial statements of subsidiaries and overseas branches), of which, RMB135
+million (including fee for internal control audit of RMB11.40 million) was paid by the Bank.
+Secondary reporting line
+Postal code: 100140
+111
+Establishment and Implementation of the Accountability System for Material Errors in
+Information Disclosure in Annual Report
+To establish, improve and effectively implement internal control and to evaluate the effectiveness of the internal control are
+the responsibilities of the Board of Directors of the Bank. The target for the internal control of the Bank is to reasonably
+assure its operation and management are in compliance with relevant laws, safety of its assets, as well as the authenticity
+and completeness of its financial reports and relevant information, to enhance operation efficiency and results, and to
+facilitate the Bank to achieve its development strategy. Due to inherent limitation of internal control, only reasonable
+assurance can be provided for the above target.
+Declaration of the Board of Directors on Internal Control Responsibility
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines,
+the Guidelines for Internal Control of Listed Companies issued by SSE and relevant regulatory requirements of CBRC. No
+material or significant deficiencies were detected in the Bank's internal control system during the assessment. Risks that may
+arise from ordinary deficiencies are controllable and corrective actions have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives of the Bank.
+Internal Control Evaluation and Defects
+Internal Control
+ICBC
+Annual Report 2014
+112
+Internal Control Evaluation Report and Internal Control Audit
+Supervision and inspection have been strengthened continuously. All business lines and internal control and compliance
+departments launched the supervision and inspection activities within the scope of their respective business and effectively
+fulfilled the responsibilities of the first and second defense lines of internal control. Centering on the bank-wide reform
+and development strategy as well as central tasks, the internal audit departments conducted effective audit and supervision
+activities on bank-wide major risks, important systems and key business fields, provided constructive decisions and
+management suggestions from a systematic and strategic perspective, and paid attention to the following up of problem
+rectification. They effectively fulfilled the responsibilities of the third defense line of internal control.
+Information communication has been further smoothed. The Bank reinforced the information disclosure and investor
+relations management, enhanced its voluntary disclosure constantly and improved the communication with shareholders. It
+strengthened the development of the Group's information standardization and intensified data management and application
+to fulfill the task of IT-based banking development in an all-round manner. Moreover, the Bank improved the petition
+working mechanism and put more efforts on direct investigation of important petition letters.
+Control measures on business operations have been intensified. The Bank continuously ameliorated the financial resource
+allocation mechanism and performance assessment method. The standardized management reform of outlet operations was
+carried out to achieve unified monitoring and control of operational risks. Besides, the Bank optimized the global credit line
+approval system and strengthened the Group's anti-money laundering management.
+The enterprise risk management system has been continuously improved. The Bank formulated the Administrative Measures
+of ICBC for Global Systemically Important Banks and proactively carried forward the implementation of advanced capital
+management approaches.
+The internal control environment has been optimized continuously. The Bank revised the Articles of Association, adjusted the
+composition of special committees under the Board of Directors, and intensified the duty fulfillment and effective checks and
+balances mechanism of "the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior
+Management". The Development Plan of the Internal Control System for 2012-2014 was completed successfully.
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee, the Risk Management Committee and the Related Party
+Transactions Control Committee of the Board of Directors perform the responsibilities of internal control management
+and review the effectiveness of internal control. The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-
+bureau, which adopt a hierarchical management system and are responsible to and report to the Board of Directors. The
+Head Office and branches have internal control and compliance departments which are responsible for the bank-wide
+organization, promotion and coordination of internal control.
+Internal Control
+While disclosing the annual report, the Bank also disclosed the Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that, as
+at 31 December 2014 (benchmark date) the Bank had maintained effective internal control over financial reporting in all
+material aspects in accordance with the standard system for enterprise internal control and relevant rules as at 31 December
+2014 (benchmark date). The Bank engaged KPMG Huazhen (Special General Partnership) to audit and issue standardized
+audit report on internal controls of the Bank.
+During the reporting period, the Bank strictly implemented regulations and rules on annual report preparation and
+disclosure, and constantly reinforced the responsibility awareness of concerned parties to guarantee the quality of
+information disclosure in quality of annual report. During the reporting period, no correction of significant accounting errors,
+remediation of material omissions or modification of results preview referred in the Accountability System for Material Errors
+in Information Disclosure in Annual Report took place at the Bank.
+Primary reporting line
+Guangzhou Kunming
+Office
+Office
+109
+Annual Report 2014
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be separated, and the Chairman shall not
+concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+Chairman and President
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries with all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the aforesaid codes of conduct during the
+year ended 31 December 2014.
+Securities Transactions of Directors and Supervisors
+For information of meetings of the Board of Supervisors and the Supervision Committee, please refer to the section headed
+"Report of the Board of Supervisors - Meetings of the Board of Supervisors and its Special Committee".
+As the special committee of the Board of Supervisors established pursuant to the Articles of Association of the Bank, the
+Supervision Committee operates in accordance with the authorization of the Board of Supervisors and is accountable to
+the Board of Supervisors. The Supervision Committee is mainly responsible for formulating plans for the inspection and
+supervision of financial activities of the Bank; formulating plans for the audits on retiring or resigning Directors, President
+and other Senior Management members; formulating plans for the audits on business policies, risk management and internal
+control of the Bank when necessary; providing comments after review of the financial report of the Bank and reporting to
+the Board of Supervisors; reviewing the investigation report on significant events in the annual operation and financial status
+of the Bank submitted by the Supervisory Board Office, and reporting to the Board of Supervisors; giving opinions on the
+performance assessment of directors and Senior Management members, and reporting to the Board of Supervisors; giving
+opinions on the assessment of the development and implementation of risk management and internal control system, and
+reporting to the Board of Supervisors; and other functions and duties as may be authorized by the Board of Supervisors.
+The Supervision Committee consists of four Supervisors, including Ms. Dong Juan, Ms. Wang Chixi, Mr. Meng Yan and Mr.
+Zhang Wei. Ms. Dong Juan serves as the head member of the Supervision Committee. Daily operations of the Supervision
+Committee are conducted by the Supervisory Board Office.
+Corporate Governance Report
+Supervision Committee
+The Board of Supervisors discusses official matters at the meeting of the Board of Supervisors, which includes regular
+meetings and special meetings. Regular meetings shall be held at least four times a year and such meetings shall, in
+principle, be held before the disclosure of periodical reports.
+Operation of the Board of Supervisors
+As at the end of the reporting period, the Board of Supervisors of the Bank consisted of six members, including two
+Shareholder Supervisors, namely Mr. Zhao Lin and Ms. Wang Chixi, two External Supervisors, namely Ms. Dong Juan and Mr.
+Meng Yan, and two Employee Supervisors, namely Mr. Zhang Wei and Mr. Li Mingtian.
+Composition of the Board of Supervisors
+Board of Supervisors and Special Committee
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting period,
+please refer to the Work Report of Independent Non-executive Directors for 2014 issued by the Bank on 26 March 2015.
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of the
+Board of Directors and special committees of the Board of Directors.
+Corporate Governance Report
+As the day-to-day administrative organ of the Board of Supervisors, the Supervisory Board Office, as entrusted by the Board
+of Supervisors, is responsible for supervising and scrutinizing matters such as corporate governance, financial activities,
+risk management and internal control of the Bank, and organizing meetings of the Board of Supervisors and its special
+committee, preparing meeting documents, and taking minutes of the meetings.
+Chengdu
+Office
+Mr. Jiang Jianqing is the Chairman and legal representative of the Bank, who is responsible for leading the Board of
+Directors in considering and formulating business development strategies, risk management, internal control and other
+significant matters of the Bank.
+Powers and Functions of the Senior Management
+Xi'an
+Office
+Wuhan
+Office
+Shanghai
+Office
+Nanjing
+Office
+Office
+Tianjin
+Shenyang
+Office
+Beijing
+Office
+Mr. Yi Huiman is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+Board of Supervisors
+Senior Management
+Audit Committee
+Board of Directors
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Internal Audit
+During the reporting period, the Bank actively implemented regulatory requirements and strictly implemented the
+registration and reporting system in respect of insiders to strengthen inside information confidentiality management and
+control the number of insiders, and also organized insider transaction self-inspection activities. After self examination, none
+of the insider of the Bank was found to be involved in dealings in shares of the Bank which has taken advantage of inside
+information during the reporting period.
+Inside Information Management
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Internal Audit Bureau
+35
+Annual Report 2014
+Upon the approval at the Annual General Meeting for the Year 2013 held on 6 June 2014, the Bank has distributed cash
+dividends of RMB91,960 million, or RMB2.617 per ten shares (pre-tax), for the period from 1 January 2013 to 31 December
+2013 to the ordinary shareholders whose names appeared on the share register after the close of market on 19 June 2014.
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.554 (pre-tax) for each ten shares to
+ordinary shareholders for 2014, totaling RMB91,026 million. The Bank proposed to distribute dividends on the basis of the
+total share capital of ordinary shares as at the close of market on the record date for dividend distribution. The distribution
+plan will be submitted for approval to the Annual General Meeting for the Year 2014.
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+The Bank had no plan for converting capital reserve to share capital in the recent three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the recent three years:
+The profit and financial status of the Bank during the reporting period are presented in the Independent Auditors' Report
+and Financial Statements of the Annual Report.
+Profits and Dividends Distribution
+2014
+2.554
+Cash dividends (pre-tax, in RMB millions)
+2013
+2.617
+2.39
+91,026
+33
+91,960
+Principal Business The principal business of the Bank and its subsidiaries is the provision of banking and related
+financial services.
+Report of the Board of Directors
+113
+2012
+Percentage of cash dividends (1) (%)
+2.
+34. Due to Banks and Other Financial
+137
+191
+3.
+Summary of Significant Accounting Policies
+139
+Institutions
+192
+4. Significant Accounting Judgements and
+35. Repurchase Agreements
+Basis of Preparation
+Fair Value through Profit or Loss
+13. Directors' and Supervisors' Emoluments
+Corporate Information
+1.
+192
+Financial Liabilities Designated at
+33.
+NOTES TO FINANCIAL STATEMENTS
+190
+Other Assets
+136
+32.
+165
+204
+14. Five Highest Paid Individuals
+137
+203
+Estimates
+36. Certificates of Deposit
+Net Loss on Financial Assets and Liabilities
+42. Reserves
+200
+Designated at Fair Value through
+43. Components of Other Comprehensive Income 201
+Profit or Loss
+161
+44. Involvement with Unconsolidated Structured
+10. Net Gain on Financial Investments
+9.
+161
+202
+11. Other Operating Income, Net
+162
+45. Notes to the Consolidated Statement
+12. Operating Expenses
+162
+of Cash Flows
+46. Transferred Financial Assets
+163
+Entities
+156
+198
+161
+192
+5. Impact of Issued but not yet Effective
+37. Due to Customers
+193
+International Financial Reporting Standards 157
+38. Debt Securities Issued
+193
+6.
+Net Interest Income
+41. Preference Shares
+160
+197
+7.
+Net Fee and Commission Income
+161
+40.
+Share Capital
+197
+8.
+Net Trading Income
+39. Other Liabilities
+47. Share Appreciation Rights Plan
+Management
+Department
+15. Impairment Losses on Assets Other than
+19. Earnings Per Share
+167
+54. Financial Instruments Risk Management
+217
+20. Cash and Balances with Central Banks
+168
+55. Fair Value of Financial Instruments
+251
+21. Due from Banks and Other
+56. Other Events
+260
+Financial Institutions
+169
+57. After the Reporting Period Event
+261
+212
+53. Segment Information
+167
+18. Dividends
+Statement of financial position
+Loans and Advances to Customers
+166
+49. Designated Funds and Loans
+207
+16. Income Tax Expense
+166
+22. Financial Assets Held for Trading
+50. Assets Pledged as Security
+17. Profit Attributable to Equity Holders
+51. Fiduciary Activities
+207
+of the Parent Company
+167
+52. Related Party Disclosures
+207
+207
+170
+58. Comparative Amounts
+261
+Auditors' responsibility
+Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Our report is made
+solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other
+person for the contents of this report.
+We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply
+with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated
+financial statements are free from material misstatement.
+An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
+financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks
+of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
+assessments, the auditors consider internal control relevant to the entity's preparation of consolidated financial statements
+that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
+purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the
+appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well
+as evaluating the overall presentation of the consolidated financial statements.
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
+Opinion
+In our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the Bank and of
+the Group as at 31 December 2014 and of the Group's profit and cash flows for the year then ended in accordance with
+International Financial Reporting Standards and have been properly prepared in accordance with the disclosure requirements
+of the Hong Kong Companies Ordinance.
+KPMG
+The directors of the Bank are responsible for the preparation of consolidated financial statements that give a true and fair
+view in accordance with International Financial Reporting Standards and the disclosure requirements of the Hong Kong
+Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of
+consolidated financial statements that are free from material misstatement, whether due to fraud or error.
+Certified Public Accountants
+10 Chater Road
+Central, Hong Kong
+26 March 2015
+128
+ICBC
+205
+48. Commitments and Contingent Liabilities
+8th Floor, Prince's Building
+204
+Directors' responsibility for the consolidated financial statements
+(Incorporated in the People's Republic of China with limited liability)
+23. Financial Assets Designated at Fair Value
+59. Approval of the Consolidated
+through Profit or Loss
+170
+Financial Statements
+261
+24. Derivative Financial Instruments
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank")
+and its subsidiaries (together, the "Group") set out on pages 129 to 261, which comprise the consolidated and Bank's
+statements of financial position as at 31 December 2014, and the consolidated statement of profit or loss, the consolidated
+statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
+consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other
+explanatory information.
+171
+INFORMATION
+262
+Annual Report 2014
+127
+Independent Auditors' Report
+KPMG
+To the shareholders of Industrial and Commercial Bank of China Limited
+UNAUDITED SUPPLEMENTARY FINANCIAL
+Company:
+8/8
+Deferred Income Tax Assets and Liabilities
+Investigations, Administrative Penalties, Censures by CSRC; Public Reprimand by Stock
+Exchanges; and Sanctions Imposed by Other Regulatory and Judicial Authorities During
+the Reporting Period During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior
+Management members and shareholders holding 5% shares or above was subject to any investigation by competent
+authorities, coercive measures taken by judicial authorities or disciplinary inspection departments, transfer to judicial
+authorities or charged for criminal responsibility, case filing investigation or administrative penalty by CSRC, restricted
+access to market, identification as unqualified, penalty by other administrative authorities or public reprimand by the stock
+exchanges.
+Additional Commitments on Restrictions on Sale of Shares Made by the Shareholders
+Holding 5% Shares or Above During the Reporting Period None.
+Fulfillment of
+commitment
+Properly fulfilled
+according to the
+commitment
+Provided that Huijin continues
+to hold any shares of the Bank
+or is deemed as the controlling
+shareholder of the Bank or the
+related party of the controlling
+shareholder of the Bank according
+to the laws or listing rules of
+China or the listing place of the
+Bank, Huijin will not engage in
+or participate in any competitive
+commercial banking business
+including but not limited to
+granting loans, attracting deposits
+and providing settlement, fund
+custody, bank card and money
+exchange services. However, Huijin
+can engage in or participate in
+some competitive businesses by
+investing in other commercial
+banks. In this regard, Huijin has
+committed that it will (1) fairly
+treat the investments in commercial
+banks and will not make any
+decision or judgment that will have
+adverse impact on the Bank or
+be beneficial to other commercial
+banks by taking advantage of the
+status of being a shareholder of
+the Bank or information obtained
+by taking advantage of the status
+of being a shareholder of the Bank;
+and (2) perform the shareholders'
+rights for the maximum interests of
+the Bank.
+Commitment
+Legal document
+under which
+the commitment
+is made
+Prospectus of
+Industrial and
+Commercial Bank
+of China Limited
+on Initial Public
+Offering (A Shares)
+Prospectus
+Issuance of the A
+Share Convertible
+Corporate Bonds
+of Industrial and
+Commercial Bank
+of China Limited
+Prospectus on A
+Share Rights Issue
+of Industrial and
+Commercial Bank
+of China Limited
+on
+November 2010/
+No specific term
+August 2010/
+No specific term
+Time and term of
+commitment
+October 2006/
+No specific term
+non-competition
+Type of
+commitment
+Commitment of
+Huijin
+Shareholder
+During the reporting period, the Bank and the shareholders holding 5% shares or above did not make any new
+commitments. As at 31 December 2014, all of the continuing commitments made by the shareholders were properly
+fulfilled, and were listed as follows:
+Commitments Made by the Bank or Its Shareholders Holding 5% Shares or Above
+Significant Events
+ICBC
+122
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders or related parties of the Bank occupied any fund of the Bank. The auditors have
+issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related Parties of Industrial
+and Commercial Bank of China Limited in 2014.
+Wong Kwong Shing, Frank, Malcolm Christopher McCarthy,
+Kenneth Patrick Chung, Or Ching Fai, Hong Yongmiao, Yi Xiqun
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies (Zheng Jian Fa [2003] No. 56) issued by CSRC
+and relevant provisions of SSE, we, in the capacity of Independent Non-executive Directors of the Bank, reviewed
+external guarantees of the Bank on the principles of fairness, impartiality and objectivity, and hereby give our specific
+explanation and opinions as follows: upon review, external guarantees provided by the Bank mainly focus on issuance
+of letters of guarantee, which is part of the ordinary banking services within the business scope of the Bank as
+approved by PBC and CBRC. As at 31 December 2014, the balance of letters of guarantee offered by the Bank totaled
+RMB307,555 million.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+Annual Report 2014
+123
+Organizational Chart
+Board of Directors' Office
+Settlement & Cash
+Management
+Department
+Institutional Banking
+Department
+Personal Banking
+Department
+IT Department
+Executive Office
+Banking
+Department
+Credit and Investment
+Corporate
+Supporting
+Departments
+Departments
+Administration
+Comprehensive
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a
+material extent or entered into any material subcontract or lease arrangement in respect of assets of other corporations,
+which were subject to disclosure, and no other corporation had held on trust to a material extent or entered into any
+material sub-contract or lease arrangement in respect of the Bank's material assets, which were subject to disclosure.
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the
+reporting period, the Bank did not have any material guarantee that needed to be disclosed except for the financial
+guarantee services within the business scope as approved by PBC and CBRC.
+Risk
+Management
+Departments
+Senior Management
+Shareholders'
+General Meeting
+187
+Internal Audit Bureau
+Internal Audit
+Sub-bureau
+Related Party
+Transactions Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Audit Committee
+Strategy
+Committee
+Risk
+Management
+Committee
+Board of Directors
+Marketing
+Management
+Departments
+Material Contracts and Performance of Obligations thereunder
+Significant Events
+121
+(2) For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Notes: (1) During the reporting period, supervisors who could not attend the meetings of the Board of Supervisors and the Supervision
+Committee in person have appointed other supervisors to attend the meetings and exercise the voting right on their behalf.
+6/6
+8/8
+5/6
+7/8
+6/6
+8/8
+6/6
+8/8
+6/6
+8/8
+Work of the Board of Supervisors
+6/6
+Board of Supervisors
+Li Mingtian
+Zhang Wei
+Meng Yan
+Dong Juan
+Wang Chixi
+Zhao Lin
+Supervisor
+The table below sets out the attendance of Supervisors in meetings of the Board of Supervisors and the meetings of the
+Supervision Committee in 2014:
+During the reporting period, the Supervision Committee held six meetings, reviewed and approved 12 proposals including
+the 2013 Supervision Report of the Board of Supervisors and the Implementation Plan on Supervision and Inspection of the
+Board of Supervisors for 2014, and heard 17 reports.
+Meetings of the Supervision Committee
+Report of the Board of Supervisors
+Attendances in person/Number of meetings during the reporting period
+Supervision Committee
+Bank Card
+Department
+(ICBC Peony Card
+Center)
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations of the State, regulatory
+requirements and the Articles of Association of the Bank, focused on the key work of the Bank, carried out supervision tasks
+in depth, did a large number of work and played an important role in promoting the Bank to continuously improve the
+corporate governance, implement the operation transformation and achieve sound and sustainable development.
+Supervision on the performance of duties. Facing the new normal in economy and finance, the Board of Supervisors
+constantly deepened supervision on duty fulfillment, proactively made innovation in the supervision method on duty
+fulfillment, and conducted duty fulfillment supervision throughout financial activities, risk management, internal control and
+other supervision tasks. It paid high attention to strategic decisions and their implementation, carried out in-depth research,
+listened to reports on corporate governance, operational management and supervision, attended the meetings of the Board
+of Directors, its special committees and the Senior Management, and reviewed information on significant approval matters,
+to strengthen supervision on the implementation of the State's macro-policy, performance of responsibilities and execution
+of duty behaviors by the Board of Directors, the Senior Management and its members. Pursuant to regulatory requirements,
+the Board of Supervisors organized and launched the duty performance assessment, held interviews with the Board of
+Directors and Senior Management members one by one, heard opinions from other management personnel and reviewed
+the performance assessment report of the Board of Directors and the personal performance report. Upon appraisal and
+deliberation, the Board of Supervisors formulated its assessment report. Chairman of the Board of Supervisors reported on
+the annual supervision of the Board of Supervisors at the meeting of the Board of Directors, and the Board of Supervisors
+reported to the Shareholders' General Meeting and regulatory authorities about the performance assessment results.
+Financial supervision. The Board of Supervisors reviewed regular reports in an earnest manner, heard reports on annual or
+quarterly operating results and preparation of regular reports and audits, and made spot checks on financial income and
+expense accounting of branches pertinently to verify the authenticity of financial information. On the basis of intensifying
+supervision on material financial activities, the Board of Supervisors stepped up efforts in on-site inspection of financial
+affairs, organized and launched special inspections on the compliance of financial income and expenses and idle fixed
+assets management, and promoted the Bank to reinforce resource allocation management and increase use efficiency of
+assets. The Board of Supervisors regularly listened to reports on external audits, provided guidance to external audits and
+strengthened supervision on the audit independence and effectiveness.
+119
+Annual Report 2014
+Material Related Party Transactions During the reporting period, the Bank had not entered into any material
+related party transactions. Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for particulars on
+the related party transactions defined under the laws, regulations and accounting standards of China.
+Implementation of Share Incentive Plan The Fourth Extraordinary General Meeting of 2006 of the Bank held
+on 31 July 2006 approved the share appreciation rights plan. As at the end of the reporting period, the Bank did not grant
+any share appreciation right. Please refer to "Note 47. to the Financial Statements: Share Appreciation Rights Plan" for
+details.
+Acquisition of 75.5% Shares of Tekstilbank On 29 April 2014, the Bank entered into a share purchase
+agreement to acquire 75.5% of the existing issued shares in Tekstilbank from GSD Holding A.Ş. of Turkey. According to
+the capital markets law of Turkey, this transaction will trigger the provision that a mandatory tender offer shall be issued
+to purchase all the remaining shares of Tekstilbank that are traded on the Istanbul Stock Exchange. The Board of Directors
+of the Bank has authorized the Bank to issue a mandatory tender offer for the remaining shares at a proper time. The final
+completion of the abovementioned transaction is subject to approval of relevant regulatory authorities.
+Acquisition of 60% Shares in Standard Bank PLC On 29 January 2014, the Bank entered into a share
+purchase agreement to acquire 60% of the existing issued shares in Standard Bank PLC ("Target Bank") from Standard
+Bank London Holdings Limited ("SBLH"). In addition, the Bank also has a five-year option to acquire additional 20% of the
+existing issued shares of Target Bank exercisable from the second anniversary of the date that the transaction is completed
+(the "Call Option"). SBLH will have a put option, exercisable six months following the date on which the Bank's Call Option
+is exercised, to require the Bank to purchase all shares of the Target Bank that are held by SBLH and its related parties. This
+transaction was completed on 1 February 2015 (Beijing time) after obtaining approval from domestic and overseas regulatory
+authorities and complying with relevant preconditions for completion.
+Acquisition of 20% Shares in Bank SinoPac On 2 April 2013, the Bank, SinoPac Financial Holdings Co., Ltd.
+("SinoPac Holdings") and Bank SinoPac Co., Ltd. ("Bank SinoPac") entered into an agreement, pursuant to which the Bank
+shall subscribe 20% shares of SinoPac Holdings or Bank SinoPac. On 27 February 2014, the Bank, SinoPac Holdings and
+Bank SinoPac entered into an supplemental agreement on the extension of the transaction waiting period. The transaction
+will be carried out after the limit of shareholding percentage of a commercial bank from Mainland China is relaxed to 20%
+by the Taiwan's financial regulator. At that time, the Bank will subscribe for shares of Bank SinoPac. The final completion of
+the abovementioned transaction is subject to approvals of relevant regulatory authorities.
+Material Assets Acquisition, Sale and Merger
+Common Queries from the Media During the year, the Bank did not have any common queries from the media.
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank for recovering non-performing
+loans. In addition, some legal proceedings arose from customer disputes. As at 31 December 2014, the amount of pending
+proceedings which the Bank and/or its subsidiaries acted as defendants totaled RMB3,001 million. The Bank does not expect
+any material adverse effect from the abovementioned pending legal proceedings on the Bank's business, financial position or
+operating results.
+Significant Events
+ICBC
+120
+Annual Report 2014
+Save as disclosed above, the Board of Supervisors had no objection to other supervision matters during the reporting period.
+Internal Control Assessment Report of the Board of Directors The Board of Supervisors reviewed the
+2014 Internal Control Assessment Report of the Board of Directors and had no objection to the report.
+Implementation of Resolutions Passed at the Shareholders' General Meeting During the
+reporting period, the Board of Supervisors had no objection to the reports or proposals presented by the Board of Directors
+to the Shareholders' General Meeting for consideration. The Board of Directors earnestly implemented the resolutions
+approved at the Shareholders' General Meeting.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on
+normal commercial terms. The Board of Supervisors did not find any act that infringed upon the interests of the Bank. The
+approval, voting, disclosure and implementation of connected transactions complied with applicable laws and regulations
+and the Articles of Association of the Bank.
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading
+or any act that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's
+purchase or sale of assets.
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the
+Bank's fundraising activities was consistent with the purpose stated in the prospectuses.
+Preparation of Annual Report Preparation and review procedures of this annual report were in compliance with
+laws, administrative regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly,
+accurately and completely.
+Compliant Operation During the reporting period, the Bank continued to operate in compliance with applicable
+laws and regulations and improve its internal control system, and the decision-making procedures complied with applicable
+laws and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the Senior
+Management earnestly performed their duties. The Board of Supervisors did not find any violation of laws and regulations, or
+any act that contravened the interests of the Bank in the performance of duties during the reporting period.
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Further strengthening the team building. During the reporting period, the Board of Supervisors reviewed and approved the
+Proposal on the Implementation Measures for Duty Performance of Financial Internal Control Risk Supervision by the Board
+of Supervisors of Industrial and Commercial Bank of China Limited to improve the rule system of the Board of Supervisors
+with ICBC features. It organized and carried out the annual assessment on duty performance of supervisors. The members
+of the Board of Supervisors fulfilled their duties with due diligence, actively attended the meetings, earnestly deliberated the
+proposals, conducted in-depth surveys and studies and regularly participated in trainings to step up communication with
+peers and enhance performance capability constantly. During the reporting period, all external supervisors worked for the
+Bank exceeding 15 working days.
+Supervision on internal control. The Board of Supervisors, in accordance with the Basic Standard for Enterprise Internal
+Control and the Guidelines for Internal Control of Commercial Banks, conducted internal control supervision throughout
+financial activities, risk management and duty performance supervision, and mainly reinforced supervision on the soundness
+and effectiveness of internal control system as well as internal control status of key institutions and business areas.
+The Board of Supervisors carried out special investigations and researches on domestic subsidiaries and some overseas
+institutions, to get insights on corporate governance, risk management, internal control and legal and compliant operation.
+It listened to reports on internal control assessment and audit results, and reviewed the annual internal control assessment
+report. Besides, it strengthened supervision on swindle prevention and control, and reviewed inspection reports, to reinforce
+guidance on the internal audit as well as internal control and compliance.
+Supervision on risk management. The Board of Supervisors took initiative to adapt to changes in operating position and
+reinforce the risk management supervision. It highlighted regional features and risk management on cross-market, cross-
+industry and cross-field business, kept a watchful eye on new situations and new issues arising in the process of operating
+transformation and structural adjustment, and intensified supervision on the material risk management. It regularly heard
+reports on risk management supervision, reviewed the risk management report, and specially listened to ten reports on
+the Group's consolidated management, implementation of risk appetite, liquidity risk management, risk management on
+assets business, specialized financing business management, credit risk management of overseas institutions and so on.
+Furthermore, the Board of Supervisors carried out special investigations and researches on assets quality, management on
+small enterprise loans and personal business loans, wealth management and agency sales and financial interbank business to
+offer risk alerts in a timely manner.
+Report of the Board of Supervisors
+Implementation of Information Disclosure Management Rules During the reporting period, the Bank
+performed its duty of information disclosure in strict compliance with the regulatory policies, implemented the information
+disclosure management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed during
+the reporting period was authentic, accurate and complete.
+E-banking Department
+Head Office Departments, Profitability Units and
+Directly Controlled Institutions of the Head Office
+Risk Management
+Department
+Statements
+Independent Auditors
+Report and Financial
+125
+Annual Report 2014
+Secondary reporting line
+Primary reporting line
+its Representative Offices
+(3)
+Overseas Center and
+Credit Approval
+Department
+(76)
+Subsidiaries with Diversified
+Operation and their Branches
+Outlets
+(13,467)
+(3,081)
+Overseas Subsidiaries
+and their Institutions
+(299)
+Overseas Branches
+and their Institutions
+(36)
+Tier-one Sub-branches
+Tier-two Branches
+(403)
+Branches Directly Controlled
+by the Head Office
+(5)
+(26)
+Banking Departments of
+Tier-one Branches
+Tier-one
+Branches
+(31)
+Overseas Institutions
+Operational Risk
+Management Committee
+Market Risk Management
+Committee
+Credit Risk Management
+Committee
+CONTENTS
+Pages
+Pages
+INDEPENDENT AUDITORS' REPORT
+31.
+134
+Statement of cash flows
+186
+30. Property and Equipment
+132
+Statement of changes in equity
+184
+29. Investments in Associates and
+Joint Ventures
+131
+Statement of financial position
+130
+Domestic Institutions
+Statement of comprehensive income
+28. Investments in Subsidiaries
+129
+Income statement
+179
+27. Financial Investments
+Consolidated:
+176
+26. Loans and Advances to Customers
+AUDITED FINANCIAL STATEMENTS
+175
+25. Reverse Repurchase Agreements
+128
+182
+Risk Management
+Committee
+Rural Banks
+(2)
+Domestic Subsidiaries
+and their Branches
+ICBC Bills Discounting
+Department
+Asset Custody
+Department
+Asset Management
+Department
+Global Market
+Department
+Directly
+Controlled
+Institutions
+Profitability
+Units
+Committee
+Staff Union Working
+Retired Staff
+Management
+Department
+Security Department
+Discipline
+Enforcement
+Department
+Urban Finance
+Research Institute
+Private Banking
+Department
+Information
+Management
+Department
+Corporate
+Culture
+Department
+Product Innovation
+Credit Approval
+Committee
+International
+Banking
+Department
+Channel
+Management
+Department
+Department
+Corporate Strategy and
+Investor Relations
+Asset & Liability
+Management
+Department
+Human Resources
+Department
+Finance & Accounting
+Department
+Department (Consumer
+Protection Office)
+Legal Affairs
+Internal Control &
+Compliance
+Department
+Management
+Department
+Investment Banking
+Department
+Operation
+Management
+Department
+Special Financing
+Department
+(Banking Department)
+Precious Metal
+Business Department
+Domestic Branches
+Product Innovation
+Management Committee
+Business and
+Information Technology
+Approval Committee
+Management Committee Management Committee
+Asset & Liability
+Financial Approval
+Committee
+Supervision
+Committee
+Supervisory Board Office
+Board of Supervisors
+Organizational Chart
+ICBC
+Information Technology
+124
+Pension Business
+Department
+Software
+Development Center
+Data Center
+(Shanghai)
+Changchun Institute
+of Financial Managers
+Data Center (Beijing)
+of Financial Managers
+E-banking Center
+International
+Settlement
+Documents Center
+Production Research
+& Development
+Center
+Hangzhou Institute
+15,556,601
+176,248
+37
+Debt securities issued
+Income tax payable
+Due to customers
+130,558
+36
+Repurchase agreements
+299,304
+380,957
+35
+34
+1,269,255
+1,539,239
+14,620,825
+Certificates of deposit
+Deferred income tax liabilities
+Retained profits
+38
+Due to banks and other financial institutions
+Share capital
+Other equity instrument
+Equity component of convertible bonds
+Reserves
+Non-controlling interests
+Equity attributable to equity holders of the parent company
+31
+17,639,289
+55,674
+420
+253,018
+436,736
+464,690
+39
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+60,666
+451
+279,590
+19,072,649
+553,607
+19,168
+137,109
+24
+361,612
+2,097
+2,157
+336,440
+359,455
+(223)
+(462)
+15
+(38,098)
+(56,267)
+338,537
+26
+Equity holders of the parent company
+Attributable to:
+PROFIT FOR THE YEAR
+Income tax expense
+PROFIT BEFORE TAXATION
+Share of profits of associates and joint ventures
+OPERATING PROFIT
+Others
+Loans and advances to customers
+Impairment losses on:
+Non-controlling interests
+(204,140)
+16
+(75,572)
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+129
+Annual Report 2014
+The notes on pages 137 to 261 form part of these financial statements.
+Details of the dividends declared and paid or proposed are disclosed in note 18 to the financial statements.
+0.74
+0.78
+19
+0.75
+0.78
+(85,326)
+116
+Diluted (RMB yuan)
+_
+Basic (RMB yuan)
+EARNINGS PER SHARE
+316
+262,965
+262,649
+475
+276,286
+275,811
+262,965
+276,286
+19
+(218,674)
+12
+578,901
+146,678
+7
+443,335
+493,522
+TOTAL EQUITY
+6
+(323,776)
+(356,357)
+6
+767,111
+134,550
+849,879
+Fee and commission income
+NET INTEREST INCOME
+Interest expense
+Interest income
+2013
+2014
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2014
+Consolidated Statement of Profit or Loss
+6
+Fee and commission expense
+7
+(14,181)
+634,858
+Operating expenses
+OPERATING INCOME
+14,874
+15,315
+11
+Other operating income, net
+625
+(2,413)
+(10,024)
+1,803
+10
+Net gain on financial investments
+9
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+154
+1,745
+8
+Net trading income
+122,326
+132,497
+7
+NET FEE AND COMMISSION INCOME
+(12,224)
+Year ended 31 December 2014
+(In RMB millions, unless otherwise stated)
+Profit for the year
+Other comprehensive income:
+Investments in associates and joint ventures
+3,949,688
+4,086,409
+27
+Financial investments
+9,681,415
+10,768,750
+26
+Loans and advances to customers
+331,903
+29
+468,462
+Reverse repurchase agreements
+25,020
+24,048
+24
+Derivative financial assets
+344,413
+312,455
+23
+Financial assets designated at fair value through profit or loss
+28,143
+25
+28,919
+28,515
+Property and equipment
+Derivative financial liabilities
+589,385
+33
+profit or loss
+Financial liabilities designated at fair value through
+724
+631
+Due to central banks
+LIABILITIES
+18,917,752
+20,609,953
+TOTAL ASSETS
+323,457
+356,101
+32
+Other assets
+28,860
+24,758
+31
+Deferred income tax assets
+164,347
+199,280
+30
+34,373
+24,191
+22
+717,984
+3
+Others
+763
+(11,436)
+(2,173)
+Foreign currency translation differences
+80
+subsequently to profit or loss
+accounted for using equity method which will be reclassified
+Share of the other comprehensive income of the investee
+(209)
+Subtotal of other comprehensive income for the year
+110
+34,550
+cash flow hedging instruments
+Effective hedging portion of gains or losses arising from
+Net gain/(loss) from change in fair value of available-for-sale
+financial assets
+43
+2013
+262,965
+2014
+276,286
+Notes
+Items that may be reclassified subsequently to profit or loss:
+(after tax, net)
+(25,750)
+32,567
+(36,629)
+Total comprehensive income for the year
+782,776
+21
+Due from banks and other financial institutions
+3,294,007
+3,523,622
+20
+Cash and balances with central banks
+31 December 2014 31 December 2013
+Notes
+ASSETS
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Consolidated Statement of Financial Position
+226,375
+(39)
+226,336
+308,853
+308,122
+731
+ICBC
+130
+The notes on pages 137 to 261 form part of these financial statements.
+Equity holders of the parent company
+Non-controlling interests
+Total comprehensive income attributable to:
+226,336
+308,853
+Financial assets held for trading
+TOTAL EQUITY AND LIABILITIES
+-Effective hedging portion
+of gains arising from
+cash flow hedging
+instruments
+40
+10,785
+Accreted interest on impaired loans
+Gain on disposal of available-for-sale financial assets, net
+Net trading gain on equity investments
+60%
+(2,779)
+(2,019)
+10
+11,705
+(1,626)
+8
+(24)
+(40)
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+9
+10,024
+2,413
+Net gain on disposal and overage of property and equipment and
+(524)
+other assets (other than repossessed assets)
+Interest expense on debt securities issued
+(476)
+22
+16,094
+14,420
+2,211
+2,018
+Amortisation of financial investments
+(102)
+(163)
+6,206
+Impairment losses on loans and advances to customers
+56,267
+38,098
+Impairment losses on assets other than loans and advances
+to customers
+15
+462
+223
+Unrealised foreign exchange gain/(loss)
+26
+(944)
+(848)
+Dividend income
+(143,088)
+(10,432)
+(1,630,065)
+(1,552,720)
+Net increase/decrease) in operating liabilities:
+Financial liabilities designated at fair value through profit or loss
+33,136
+Due to central banks
+Other assets
+(93)
+260,411
+234,583
+(409)
+(207,685)
+Repurchase agreements
+81,653
+61,540
+Certificates of deposit
+43,147
+94,351
+Due to banks and other financial institutions
+(1,159,539)
+(1,121,840)
+Loans and advances to customers
+10
+(101)
+450,090
+406,908
+Net (increase)/decrease in operating assets:
+Due from central banks
+(223,291)
+(319,010)
+Due from banks and other financial institutions
+Financial assets held for trading
+3,069
+(6,047)
+81,342
+(7,804)
+Financial assets designated at fair value through profit or loss
+35,022
+(142,720)
+Reverse repurchase agreements
+(173,890)
+5,443
+12
+12
+(2,097)
+(2,157)
+(11,216)
+(220) (11,436)
+8
+(5)
+3
+(36,274) 262,649 226,375
+(39)
+(83,565)
+5,009
+(83,565)
+25,807 (25,807)
+13,869
+5,009
+(13,869)
+6,779
+6,779
+Capital injection by
+non-controlling shareholders
+953
+226,336
+(83,565)
+1,770
+Conversion of convertible bonds
+13,869
+8
+763
+763
+(11,216)
+(11,216)
+8
+(25,622) (11,216)
+(207)
+763
+63
+1
+763
+1
+763
+Dividend 2012 final (note 18)
+Appropriation to surplus
+reserve (i)
+25,807
+Appropriation to general
+reserve (ii)
+953
+Due to customers
+Dividends to non-controlling
+Conversion of equity component
+(ii)
+Includes the appropriation made by subsidiaries in the amount of RMB1,140 million.
+The notes on pages 137 to 261 form part of these financial statements.
+Annual Report 2014
+133
+Consolidated Statement of Cash Flows
+Year ended 31 December 2014
+(In RMB millions, unless otherwise stated)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB67 million and RMB358 million,
+respectively.
+Notes
+2013
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before taxation
+361,612
+338,537
+Adjustments for:
+Share of profits of associates and joint ventures
+Depreciation
+Amortisation
+2014
+1,278,463
+4,329
+408,835 511,949 1,274,134
+of convertible bonds (note 38)
+(748)
+Others
+296
+296
+(47)
+(47)
+(748)
+(748)
+296
+296
+47
+Balance as at
+31 December 2013
+351,390
+1,960 138,852 123,870
+202,940 (29,379)
+(24,038) (3,961)
+551
+shareholders
+Other liabilities
+920,197
+994,119
+32,865
+27,607
+23
+310,398
+344,091
+Derivative financial assets
+24
+22,292
+22
+23,049
+25
+259,213
+95,575
+Loans and advances to customers
+26
+10,184,215
+9,169,446
+Financial investments
+Reverse repurchase agreements
+Financial assets held for trading
+757,506
+737,740
+Annual Report 2014
+135
+Statement of Financial Position
+31 December 2014
+(In RMB millions, unless otherwise stated)
+ASSETS
+Notes
+31 December 2014 31 December 2013
+Property and equipment
+Deferred income tax assets
+Other assets
+TOTAL ASSETS
+Cash and balances with central banks
+Due from banks and other financial institutions
+22
+20
+3,473,327
+3,253,660
+21
+Investments in subsidiaries
+The notes on pages 137 to 261 form part of these financial statements.
+Investments in associates
+3,958,201
+profit or loss
+33
+589,217
+552,759
+Derivative financial liabilities
+24
+22,324
+16,986
+Financial liabilities designated at fair value through
+Due to banks and other financial institutions
+1,393,280
+1,172,312
+Repurchase agreements
+35
+161,718
+63,754
+Certificates of deposit
+36
+34
+418
+226
+Due to central banks
+3,861,326
+28
+80,419
+73,850
+29
+34,242
+34,243
+30
+126,868
+121,716
+31
+23,899
+28,139
+32
+310,036
+268,170
+19,553,715
+18,058,378
+LIABILITIES
+27
+Total comprehensive income
+(265,008)
+756,529
+Proceeds from disposal of investments in associates and
+joint ventures
+Consolidated Statement of Cash Flows
+Year ended 31 December 2014
+(In RMB millions, unless otherwise stated)
+Notes
+2014
+2013
+Investments in associates and joint ventures
+(53,957)
+3,802
+(1,109,178)
+1,088
+(1,239,747)
+1,011,771
+1,117,779
+(324)
+493
+Dividends received
+Net cash flows from investing activities
+(44,427)
+Proceeds from sale and redemption of financial investments
+Purchases of financial investments
+(other than repossessed assets)
+130,182
+42,214
+1,468,633
+1,218,713
+Net cash flows from operating activities before tax
+288,658
+72,901
+Income tax paid
+Net cash flows from operating activities
+(87,201)
+(74,848)
+201,457
+(1,947)
+The notes on pages 137 to 261 form part of these financial statements.
+134
+ICBC
+CASH FLOWS FROM INVESTING ACTIVITIES
+Purchases of property and equipment and other assets
+Proceeds from disposal of property and equipment and other assets
+CASH FLOWS FROM FINANCING ACTIVITIES
+(315,230)
+Proceeds from issue of preference shares
+Proceeds from issuance of debt securities
+Net cash flows from financing activities
+(26,344)
+(65,465)
+NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
+28,372
+(231,573)
+Cash and cash equivalents at beginning of the year
+957,402
+(47)
+1,201,647
+8,490
+(12,672)
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+45
+994,264
+957,402
+Interest paid
+836,797
+Effect of exchange rate changes on cash and cash equivalents
+(8)
+Dividends paid to non-controlling shareholders
+(83,565)
+Interest paid on debt securities
+Repayment of other debt securities
+Acquisition of non-controlling interests
+Dividends paid on ordinary shares
+1,145
+653
+(146,741)
+(164,161)
+34,549
+1,393
+955
+95,554
+44,367
+(11,278)
+(10,074)
+(54,594)
+(17,084)
+(17)
+(91,960)
+Capital injection by non-controlling shareholders
+Jiang Jianqing
+Chairman
+8
+1
+(2,065)
+34,188
+(2,065)
+108
+18
+80
+50
+1
+80
+34,188
+80
+80
+1
+I
+34,188
+362 34,550
+108
+18
+108
+80
+60
+80
+other equity holder
+34,428
+Conversion of convertible bonds
+2,105
+5,572
+Capital injection by
+non-controlling shareholders
+Dividends to non-controlling
+1
+shareholders
+of convertible bonds (note 38)
+(1,572)
+26,882
+1
+.
+18,682
+34,188
+108
+Conversion of equity component
+80
+2 110
+80
+30
+(1,572)
+30
+(1,572)
+30
+Others
+Balance as at
+31 December 2014
+353,495
+30
+34,428
+4,809 (26,103) (3,853)
+661
+492,312
+650,236 1,530,859
+6,445 1,537,304
+(i)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB114 million and RMB345
+million, respectively.
+(ii)
+388 144,424 150,752 221,622
+(8)
+(8)
+1,393
+50
+(2,065)
+32,311
+(2,065)
+(108)
+(2,173)
+275,811 308,122
+731
+308,853
+(91,960) (91,960)
+(91,960)
+26,882 (26,882)
+18,682
+(18,682)
+34,428
+34,428
+5,572
+7,677
+7,677
+1,393
+Capital injection by
+reserve (ii)
+Appropriation to general
+reserve (i)
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Equity
+Issued
+Other
+component
+of
+Foreign
+Year ended 31 December 2014
+Investment
+Cash flow
+Non-
+share equity convertible
+Capital
+Surplus
+General revaluation translation
+hedge Other
+Retained
+currency
+Consolidated Statement of Changes in Equity
+131
+Annual Report 2014
+40
+353,495
+34,428
+351,390
+38
+388
+42
+492,312
+1,960
+408,835
+650,236
+511,949
+1,530,859
+6,445
+1,537,304
+20,609,953
+1,274,134
+4,329
+1,278,463
+18,917,752
+Yi Huiman
+Vice Chairman and President
+The notes on pages 137 to 161 form part of these financial statements.
+Liu Yagan
+General Manager of Finance
+and Accounting Department
+controlling
+Includes the appropriation made by subsidiaries in the amount of RMB520 million.
+Total
+bonds
+32,567
+-Net gain from change in
+fair value of
+available-for-sale
+financial assets
+99,186
+-Share of the other
+comprehensive income
+equity
+of the investee accounted
+which will be reclassified
+subsequently to
+profit or loss
+-Foreign currency translation
+differences
+Total comprehensive income
+Dividend 2013 final (note 18)
+Appropriation to surplus
+for using equity method
+reserves Subtotal profits Total interests
+551 408,835 511,949 1,274,134 4,329 1,278,463
+275,811 275,811
+475 276,286
+32,311
+256
+32,311
+80
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+Balance as at 1 January 2014
+351,390
+1,960
+138,852
+123,870
+202,940 (29,379)
+(24,038)
+(3,961)
+Profit for the year
+Other comprehensive income
+34,188
+(2,065)
+108
+capital instrument
+The notes on pages 137 to 261 form part of these financial statements.
+132
+ICBC
+1,512,861
+19,553,715
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+484,105
+610,647
+42
+Retained profits
+430,720
+1,268,175
+1,960
+42
+Reserves
+38
+Equity component of convertible bonds
+34,428
+Other equity instrument
+351,390
+353,495
+388
+513,903
+18,058,378
+Jiang Jianqing
+Chairman
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+(1) Statement of compliance
+2. BASIS OF PREPARATION
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+The Bank's A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong Limited
+and the stock codes are 601398 and 1398, respectively.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking Regulatory Commission (the "CBRC")
+of the PRC. The Bank obtained its business license No. 100000000003965 from the State Administration for Industry and
+Commerce of the PRC. The legal representative is Jiang Jianqing and the registered office is located at No. 55 Fuxingmennei
+Avenue, Xicheng District, Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring.
+CORPORATE INFORMATION
+1.
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+General Manager of Finance
+and Accounting Department
+Liu Yagan
+ICBC
+136
+The notes on pages 137 to 261 form part of these financial statements.
+Vice Chairman and President
+Yi Huiman
+40
+(2) Basis of preparation
+40
+18,040,854
+cash flow hedging
+instruments
+- Share of the other
+comprehensive income
+of the investee accounted
+for using equity method
+which will be reclassified
+subsequently to
+profit or loss
+-Foreign currency translation
+differences
+of losses arising from
+- Others
+(25,622)
+(25,622)
+(128) (25,750)
+(207)
+(207)
+(207)
+(2)
+(209)
+(25,622)
+-Effective hedging portion
+financial assets
+available-for-sale
+407,911
+409,618
+39
+220,481
+243,690
+38
+54,868
+59,571
+14,201,528
+15,024,101
+37
+Share capital
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+Income tax payable
+Due to customers
+fair value of
+16,790,203
+1
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial
+instruments, financial assets and liabilities held for trading, financial assets and liabilities designated at fair value through
+profit or loss and available-for-sale financial assets (unless the fair value cannot be reliably measured) that have been
+measured at fair value, as further explained in the respective accounting policies below.
+Annual Report 2014
+reserve
+reserve
+reserve
+reserve
+Balance as at 1 January 2013
+349,620
+2,708
+133,835
+reserve reserve
+98,063 189,071
+(12,822)
+(3,754)
+controlling
+reserves Subtotal profits Total interests
+(508)
+400,128 372,541 1,124,997
+Total
+equity
+Profit for the year
+262,649 262,649
+Other comprehensive income
+(3,757)
+bonds
+capital
+Retained
+(i)
+Consolidated Statement of Changes in Equity
+Year ended 31 December 2014
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Equity
+Issued
+component
+of
+Foreign
+Investment
+currency
+Cash flow
+Non-
+share convertible
+Capital
+Surplus
+General revaluation
+translation
+hedge Other
+(25,622)
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4.
+(11,216)
+763 (36,274)
+Amendments to IAS 32 Financial instruments: presentation
+liabilities
+The amendments provide consolidation relief to those parents which qualify to be an investment entity as defined in the
+amended IFRS 10. Investment entities are required to measure their subsidiaries at fair value through profit or loss. The
+adoption does not have any material impact on the Group's financial statements.
+Amendments to IFRS 10, IFRS 12 and IAS 27, Investment entities
+The principal effects of adopting these new and amended IFRSS are as follows:
+Levies - Accounting for levies
+Impairment of assets — recoverable amount disclosures for non-financial assets
+Financial instruments: recognition and measurement - Novation of derivatives and
+continuation of hedge accounting
+Offsetting financial assets and financial liabilities
+IFRIC 21
+offsetting financial assets and financial
+Financial instruments: presentation
+Investment entities
+Amendments to IFRS 10,
+The IASB has issued the following revised IFRSS (including International Accounting Standards ("IASS")) and amendments to
+standards that are effective in 2014 and relevant to the Group's operation.
+(3) Change in accounting policies
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+137
+IFRS 12 and IAS 27,
+Amendments to IAS 32
+Amendments to IAS 36
+Amendments to IAS 39
+The amendments to IAS 32 clarify the offsetting criteria in IAS 32. The amendments to IAS 32 clarify the meaning of
+"currently has a legally enforceable right to set-off". To the extent that the requirements are applicable to the Group, the
+Group has provided those disclosures in notes 24 and 25.
+Amendments to IAS 36
+_
+(36,274)
+355
+3,462 1,128,459
+316
+262,965
+(355) (36,629)
+-Net loss from change in
+ICBC
+138
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretation and
+amendments.
+The interpretation defines a levy as an outflow from an entity imposed by a government in accordance with legislation.
+The interpretation provides guidance on when a liability to pay a levy imposed by a government should be recognised. The
+adoption does not have significant impact on the Group's financial statements.
+IFRIC 21 Levies -Accounting for levies
+The amendments to IAS 39 provide relief from discontinuing hedge accounting when novation of a derivative designated
+as a hedging instrument meets certain criteria. The adoption does not have any material impact on the Group's financial
+statements.
+Financial instruments: recognition and measurement Novation of derivatives
+and continuation of hedge accounting
+_
+Amendments to IAS 39
+The amendments to IAS 36 modify the disclosure requirements for impaired non-financial assets. Among them, the
+amendments expand the disclosures required for an impaired asset or cash generating units ("CGU") whose recoverable
+amount is based on fair value less costs of disposal. The adoption does not have any material impact on the Group's financial
+statements.
+assets
+Recoverable amount disclosures for non-financial
+Impairment of assets
+(207)
+Financial assets designated at fair value through profit or loss
+(177)
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+Available-for-sale financial assets are non-derivative financial assets which are designated as such or are not classified
+in any of the three preceding categories. After initial recognition, available-for-sale financial assets are subsequently
+measured at fair value. Premiums and discounts on available-for-sale financial assets are amortised using the effective
+interest rate method and are taken to the statement of profit or loss as interest income. Changes in fair value of available-
+for-sale financial assets are recognised as a separate component of other comprehensive income until the financial asset
+is derecognised or determined to be impaired at which time the cumulative gains or losses previously recorded in other
+comprehensive income are transferred to profit or loss. Dividend and interest income on available-for-sale financial assets are
+recorded in profit or loss.
+Available-for-sale financial assets
+Discounted bills are granted by the Group to its customers based on the bank acceptance held which has not matured.
+Discounted bills are carried at face value less unrealised interest income and the interest income of the discounted bills is
+recognised using the effective interest rate method.
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
+an active market and the Group has no intention of trading the assets immediately or in the near term. After initial
+measurement, such assets are subsequently carried at amortised cost using the effective interest rate method, less any
+allowance for impairment losses. Gains and losses are recognised in profit or loss when such assets are derecognised or
+impaired, as well as through the amortisation process.
+Loans and receivables
+If, as a result of a change in intention or ability, it is no longer appropriate to classify an investment as held-to-maturity, it
+shall be reclassified as available-for-sale and remeasured at fair value.
+Held-to-maturity financial investments are non-derivative financial assets with fixed or determinable payments and a fixed
+maturity and which the Group has the positive intention and ability to hold to maturity. After initial measurement, held-to-
+maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less
+any impairment loss. Gains and losses are recognised in profit or loss when the held-to-maturity financial investments are
+derecognised or impaired, as well as through the amortisation process.
+Held-to-maturity financial investments
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+141
+Annual Report 2014
+Financial assets and liabilities designated at fair value through profit or loss are measured at fair value after initial
+recognition. Realised and unrealised income or expenses are recognised in profit or loss.
+In the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be
+reliably measured, it cannot be designated as a financial asset at fair value through profit or loss.
+The financial instrument contains one or more embedded derivatives, unless the embedded derivative(s) does not
+significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
+It applies to a group of financial assets, financial liabilities or both which is managed and its performance evaluated on
+a fair value basis, in accordance with a documented risk management or investment strategy, and where information
+about that group of financial instruments is provided internally on that basis to key management personnel; or
+It eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from
+measuring the financial asset or financial liability or from recognising the gains and losses on them on different bases;
+(iii)
+(ii)
+(i)
+Other financial liabilities
+Other financial liabilities are carried at amortised cost using the effective interest rate method after initial recognition.
+(6) Impairment of the financial assets
+An assessment on carrying amount of financial assets is made at the end of each reporting period. Impairment is recognised
+if there is objective evidence of impairment of financial assets, i.e., one or more events that occur after the initial recognition
+of those assets and have an impact on the estimated future cash flows of the financial assets or group of financial assets
+that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers
+is experiencing significant financial difficulty, default or delinquency in interest or principal payments, they would probably
+enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable
+decrease in the estimated future cash flows.
+(7) Renegotiated loans
+If, after an impairment loss has been recognised on an available-for-sale debt instrument, the fair value of the debt
+instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the
+impairment loss was recognised the impairment loss is reversed through profit or loss. An impairment loss recognised for an
+investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. The impairment loss
+on an investment in unquoted equity instrument whose fair value cannot be reliably measured is not reversed.
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+143
+Annual Report 2014
+In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged
+decline in the fair value of the investment below its cost. The Group considers the time period and continuity of the
+magnitude of the decline to evaluate whether the decline in fair value is prolonged. More significantly the fair value declines
+relative to the cost, the less the volatility moves, and the longer the decline lasts or the more obvious the continuity of the
+magnitude of the decline is, the more likely the equity investment impairs. In general, the Group considers the situation
+when fair value is less than 40% of the cost as significant decline and that when fair value falls below the cost in a period
+over 12 months as prolonged decline
+If there is objective evidence that the financial asset is impaired, the cumulative loss, measured as the difference between the
+acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss on that
+financial asset previously recognised in profit or loss, is removed from other comprehensive income and recognised in profit
+or loss.
+Available-for-sale financial assets
+A financial instrument may be designated as a financial asset or financial liability at fair value through profit or loss upon
+initial recognition, if it meets any of the criteria set out below.
+If there is objective evidence that an impairment loss has been incurred on the financial asset, the amount of impairment
+loss, measured as the difference between the carrying amount of that financial asset and the present value of estimated
+future cash flows discounted at the current market rate of return for a similar financial asset, is recognised in profit or loss. In
+the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be reliably
+measured, the amount of impairment loss is recognised in profit or loss. Impairment losses on these assets are not reversed.
+When an item of loans and receivables is uncollectible, it is written off against the related allowance for impairment losses.
+Such loans and receivables are written off after all the necessary procedures have been completed and the amount of the
+loss has been determined. Subsequent recoveries of the amounts previously written off decrease the amount of the provision
+for loan impairment in profit or loss.
+If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be attributed objectively to an
+event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent
+reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the assets does not
+exceed its amortised cost at the reversal date.
+Future cash flows of a group of financial assets that are collectively evaluated for impairment are estimated on the basis of
+historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is
+adjusted on the basis of current observable data to reflect the impact of current conditions that did not affect the period on
+which the historical loss experience is based and to eliminate the impact of historical conditions that do not exist currently.
+The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group.
+The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
+significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no
+objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is
+included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively
+assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or
+continues to be recognised are not included in a collective assessment of impairment.
+If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments has been
+incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value
+of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's
+original effective interest rate and shall include the value of any relevant collateral. The original effective interest rate is the
+rate used to determine the values of financial assets at initial recognition. With respect to floating-rate loans, receivables and
+held-to-maturity investments, the discount rate could be the current effective interest rate determined under the contract.
+The carrying amount of the asset is reduced through the use of an impairment provision account and the amount of the loss
+is recognised in profit or loss.
+Financial assets carried at amortised cost
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+142
+ICBC
+Financial assets carried at cost
+Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending
+the payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is
+no longer considered past due. Management continuously reviews renegotiated loans to ensure that all criteria are met and
+that future payments are likely to occur. The loans continue to be subject to individual or collective impairment assessment,
+and the provision is calculated using the loan's original effective interest rate.
+Financial assets or financial liabilities designated at fair value through profit or loss
+it is a derivative that is not designated as an effective hedging instrument.
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+(4) Foreign currency translation
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+139
+Annual Report 2014
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see note 3(21)).
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+An associate is an entity in which the Group or Bank has significant influence.
+(3) Associates and Joint ventures
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Group.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+(2) Non-controlling interests
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses (see note
+3(21)).
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+Subsidiaries are entities controlled by the Group. The Group controls an entity if it is exposed, or has rights to, variable
+returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
+The Group reassesses whether it has control if there are changes to one or more of the elements of control. This includes
+circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead
+to the Group having power over an entity.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Subsidiaries
+(In RMB millions, unless otherwise stated)
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken directly to other comprehensive income. On disposal of a foreign operation,
+the deferred cumulative amount recognised in other comprehensive income relating to that particular foreign operation is
+recognised in profit or loss.
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for
+which there is evidence of a recent actual pattern of short term profit-taking; or
+(iii)
+(ii)
+it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
+(i)
+A financial asset or financial liability is classified as held for trading if:
+Financial assets or financial liabilities held for trading
+Financial assets or financial liabilities at fair value through profit or loss include financial assets or financial liabilities held for
+trading and financial assets or financial liabilities designated at fair value through profit or loss.
+Financial assets or financial liabilities at fair value through profit or loss
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Financial assets or financial liabilities held for trading are measured at fair value after initial recognition. Realised or
+unrealised income or expenses are recognised in profit or loss.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+ICBC
+140
+A financial asset or financial liability is measured initially at its fair value plus, in the case of a financial asset or financial
+liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the
+financial asset or financial liability.
+At initial recognition, financial liabilities are classified into two categories: financial liabilities at fair value through profit or
+loss and other financial liabilities.
+At initial recognition, financial assets are classified into four categories: financial assets at fair value through profit or loss,
+held-to-maturity financial investments, loans and receivables and available-for-sale financial assets.
+Initial recognition of financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(5) Financial instruments
+Measurement of fair value
+(8) Derecognition of financial assets and liabilities
+Financial assets
+A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised
+when:
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+147
+Annual Report 2014
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+Property and equipment, other than construction in progress are stated at cost less accumulated depreciation and any
+impairment losses. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+(16) Property and equipment
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in profit or loss.
+(15) Precious metals
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+•
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+•
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Estimated
+useful life
+Properties and buildings
+ICBC
+148
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+(19) Business combination and goodwill
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+(18) Repossessed assets
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the period of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the cost of properties and buildings as finance leases in property and equipment.
+(17) Land use rights
+An item of property and equipment and any significant part initially recognised is derecognised upon disposal or when
+no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+Equipment under operating leases where the Group is the lessor is aircraft, aircraft engines and vessels. The estimated useful
+lives and depreciation methods are determined according to the real conditions of each individual aircraft and vessels. The
+residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from 15 to
+25 years.
+Over the shorter of the economic useful lives
+and remaining lease terms
+Leasehold improvements
+16.67%-33.33%
+3-6 years
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+depreciation rate
+2.77% 19.40%
+Annual
+Estimated
+residual
+value rate
+3%
+5-35 years
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment losses.
+(13) Offsetting of financial instruments
+(In RMB millions, unless otherwise stated)
+31 December 2014
+When the issued preference shares contain equity and liability components, the Group follows the same accounting policy as
+for convertible bonds with equity components. For the issued preference shares which do not contain equity component, the
+Group follows the accounting policy as accounting for the convertible bonds only with liability component.
+Such preference shares or their components are initially recognised as financial assets, financial liabilities or equity
+instruments according to the terms and the economic substance combined with the definition of financial assets, financial
+liabilities and equity instruments.
+(10) Preference shares
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit or loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at fair value through profit or loss. The equity component is not re-measured.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+(9) Convertible instruments
+A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
+Financial liabilities
+31 December 2014
+(In RMB millions, unless otherwise stated)
+For the issued preference shares that should be classified as equity instruments, will be recognised as equity in actual amount
+received. Dividends payables are recognised as distribution of profits. Redemption before maturity will write down equity as
+redemption price.
+Notes to Financial Statements
+144
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+Sales of assets on condition of repurchase
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets are
+set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation of
+financial assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent of
+its continuing involvement, derecognise the remaining. The book value of the transferred assets is apportioned between the
+derecognised portion and the retained portion based on their respective relative fair values, and the difference between the
+book value of the derecognised portion and the total consideration paid for the derecognised portion is recorded in profit or
+loss.
+Securitisation
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash flows
+from the asset but has entered into a pass-through arrangement, and has neither transferred nor retained substantially all
+the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's
+continuing involvement in the asset.
+The Group has transferred its rights to receive cash flows from the asset; or has retained its rights to receive cash
+flows from the asset but has assumed an obligation to pay them in full without material delay to a third party under a
+"pass-through" arrangement; and either the Group has transferred substantially all the risks and rewards of ownership
+of the financial asset; or the Group has neither transferred nor retained substantially all the risks and rewards of
+ownership of the financial asset, but has transferred control of the asset.
+The rights to receive cash flows from the asset have expired; or
+•
+ICBC
+31 December 2014
+(11) Derivatives and hedge accounting
+Derivatives
+Certain derivatives embedded in other financial instruments are treated as separate derivatives when their economic
+characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair
+value through profit or loss. These embedded derivatives are measured at fair value with the changes in fair value recognised
+in profit or loss.
+Notes to Financial Statements
+ICBC
+146
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(12) Trade date accounting
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+a hedging instrument expires, or is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge
+accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive
+income until the hedged forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur,
+the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss. For
+designated and qualifying cash flow hedges, the effective portion of the gain or loss on the hedging instrument is initially
+recognised directly in other comprehensive income. The ineffective portion of the gain or loss on the hedging instrument is
+recognised immediately in profit or loss.
+Cash flow hedges
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised,
+the hedge no longer meets the criteria for hedge accounting or the Group revokes the designation. If the hedged items are
+derecognised, the unamortised fair value is recorded in profit or loss.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that is
+attributable to a particular risk and could affect the profit or loss. For fair value hedges, the carrying amount of the hedged
+item is adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the
+gains and losses from both are taken to profit or loss.
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
+the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
+The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk
+being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting the exposure to changes in
+the hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective
+in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they have
+actually been highly effective throughout the financial reporting periods for which they were designated.
+Hedge accounting
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+145
+Annual Report 2014
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+Fair value hedges
+Notes to Financial Statements
+In the case of an equity investment classified as available for sale, if neither a quoted market price in an active market exists
+nor its fair value can be reliably measured, it will be measured at cost less any impairment loss.
+Short-term employee benefits
+1
+Financial instruments
+IFRS 9
+Revenue from contracts with customers
+IFRS 15
+Annual Improvements to IFRSS 2012-2014 Cycle²
+Sale or contribution of assets between an investor and its associate or
+joint venture²
+Clarification of acceptable methods of depreciation and amortization²
+Separate financial statements
+Regulatory deferral accounts?
+Employee benefits'
+Joint Arrangements²
+IFRS 10 and IAS 28 Amendments
+IAS 27 Amendments
+IAS 16 and IAS 38 Amendments
+IFRS 14
+IFRS 11 Amendments
+IAS 19 Amendments
+Annual Improvements to IFRSS 2010-2012 Cycle and 2011-2013 Cycle'
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS
+5.
+For further disclosure in respect of unconsolidated investment funds, non-principal guaranteed wealth management
+products, segregated asset management plans, trust plans and assets-backed financings in which the Group has an interest
+or for which it is a sponsor, see Note 44.
+The Group acts as manager to a number of investment funds, non-principal guaranteed wealth management products,
+segregated asset management plans, trust plans and assets-backed financings. Determining whether the Group controls
+such a structured entity usually focuses on the assessment of the aggregate economic interests of the Group in the entity
+(comprising any carried interests and expected management fees) and the decision-making authority of the entity. For all
+these structured entities managed by the Group, the Group's aggregate economic interest is in each case not significant
+and the decision makers establish, market and manage them according to restricted parameters as set out in the investment
+agreements as required by laws and regulations. As a result, the Group has concluded that it acts as agent as opposed to
+principal for the investors in all cases, and therefore has not consolidated these structured entities.
+Investment funds, non-principal guaranteed wealth management products, segregated asset management
+plans, trust plans and asset-backed financings
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability
+of returns from the vehicles through its holding of debt securities in the vehicles. Outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract), key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+Securitisation vehicles
+Effective for annual periods beginning on or after 30 June 2015.
+2
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Effective for annual periods beginning on or after 1 January 2016, early adoption is permitted.
+ICBC
+158
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+The amendments introduce a rebuttable presumption to IAS 38 that the use of revenue-based amortisation methods for
+intangible assets is inappropriate. This presumption can be overcome only when revenue and the consumption of the
+economic benefits of the intangible asset are 'highly correlated', or when the intangible asset is expressed as a measure of
+revenue. The amendments also prohibit the use of revenue-based depreciation methods for property, plant and equipment
+under IAS 16.
+Amendments to IAS 16 and IAS 38, Clarification of acceptable methods of depreciation and
+amortization
+The amendments provide new guidance on how to account for the acquisition of an interest in a joint operation that
+constitutes a business. Specifically, the amendments require business combination accounting to be applied in this situation.
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+Amendments to IFRS 11, Joint Arrangements "Accounting for acquisitions of interests in
+joint operations"
+As an existing IFRS adopter, the Group is not applicable for the new standard.
+This interim standard permits first-time adopters of IFRS to continue to use previous GAAP to account for regulatory deferral
+account balances while the IASB completes its comprehensive project in this area.
+IFRS14, Regulatory deferral accounts
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+Amendments to IAS 19, Employee benefits "Defined benefit plans: Employee contributions"
+The amendments introduce a relief to reduce the complexity of accounting for certain contributions from employees or
+third parties under defined benefit plans. When the contributions meet the criteria set out in the amendments, a company
+is permitted (but not required) to recognise the contributions as a reduction of the service cost in the period in which the
+related service is rendered, instead of including them in calculating the defined benefit obligation.
+154
+The adoption of these annual improvements will not have any material impact on the financial position and the financial
+result of the Group.
+The 2010-2012 cycle of annual improvement contains amendments to seven standards with consequential amendments to
+other standards and interpretations including IFRS 2 Share based payment, IFRS 3 Business combinations, IFRS 8 Operating
+segments, IFRS 13 Fair value measurement, IAS 24 Related party disclosures, IAS 16 Property, plant and equipment and IAS
+38, Intangible assets.
+Annual Improvements to IFRSS 2010-2012 Cycle and 2011-2013 Cycle
+Further information about those changes that are expected to affect the Group is as follows:
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+157
+Annual Report 2014
+Effective for annual periods beginning on or after 1 January 2018, early adoption is permitted.
+4
+Effective for annual periods beginning on or after 1 January 2017, early adoption is permitted.
+3
+The 2011-2013 cycle of annual improvement contains amendments to four standards with consequential amendments to
+other standards and interpretations including IFRS 1 First-time adoption of International Financial Reporting Standards, IFRS 3
+Business combinations, IFRS 13, Fair value measurement, IAS 40 Investment property.
+ICBC
+(29) Related parties
+A party is considered to be related to the Group if:
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+Annual Report 2014
+155
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+4.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that
+have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
+financial period are described below.
+Designation of held-to-maturity investments
+(31) Contingent liabilities
+Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
+investments when the Group has the positive intention and ability to hold the investments to maturity. Accordingly, in
+evaluating whether a financial asset shall be classified as a held-to-maturity investment, significant management judgement
+is required. If the Group fails correctly to assess its intention and ability to hold the investments to maturity and the Group
+sells or reclassifies more than an insignificant amount of held-to-maturity investments before maturity, the Group would
+reclassify the whole held-to-maturity investment portfolio as available for sale.
+Impairment losses of available-for-sale and held-to-maturity investments
+In determining whether there is any objective evidence that impairment losses have occurred on available-for-sale and held-
+to-maturity investments, the Group assesses periodically whether there has been a significant or prolonged decline in the fair
+value below its cost or carrying amount, or whether other objective evidence of impairment exists based on the investee's
+financial conditions and business prospects, including industry environment, change of technology as well as operating and
+financing cash flows. This requires a significant level of judgement, which would affect the amount of impairment losses.
+Impairment of goodwill
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUS to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+Income tax
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+Fair value of financial instruments
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+156
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Impairment losses of loans and advances and amounts due from banks and other financial institutions
+The Group determines periodically whether there is any objective evidence that impairment losses have occurred on loans
+and advances and amounts due from banks and other financial institutions. If any such evidence exists, the Group assesses
+the amount of impairment losses. The amount of impairment losses is measured as the difference between the carrying
+amount and the present value of estimated future cash flows. Assessing the amount of impairment losses requires significant
+judgement on whether the objective evidence for impairment exists and also significant estimates when determining the
+present value of the expected future cash flows.
+Rental payments applicable to operating leases are charged to profit or loss on the straight-line basis over the lease terms.
+When the Group is the lessor under operating leases, the assets subject to operating leases are accounted for as the Group's
+assets. Rental income is recognised as "other operating income, net" in the statement of profit or loss on the straight-line
+basis over the lease term.
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities
+are measured at the higher of the initial fair value less cumulative amortisation and the best estimate of expenditure being
+required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability relating to a
+financial guarantee is taken to the statement of profit or loss.
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity).
+(a)
+the party is a person or a close member of that person's family and that person,
+(i)
+has control or joint control over the Group;
+(ii)
+has significant influence over the Group; or
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+or
+(b)
+(iii)
+(30) Financial guarantee contracts
+is a member of the key management personnel of the Group or of a parent of the Group;
+(i)
+the entity and the Group are members of the same group;
+(ii)
+(iii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+the entity and the Group are joint ventures of the same third party;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v)
+(vi)
+(vii)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+the entity is controlled or jointly controlled by a person identified in (a); and
+the party is an entity where any of the following conditions applies:
+Determination of control over investees
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls a securitisation vehicle, an investment fund, a non-principal guaranteed wealth management product, a segregated
+asset management plan, trust plans or asset-backed financings.
+Notes to Financial Statements
+31 December 2014
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+(ii)
+(i)
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+(ii)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+153
+Annual Report 2014
+Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+(i)
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred income tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Current tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+(27) Income tax
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+Net trading income
+Dividend income is recognised when the Group's right to receive payment is established.
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+Leases which transfer substantially all the risks and rewards of ownership of the assets to the lessees are classified as
+finance leases. Leases where substantially all the rewards and risks of the assets remain with the lessor are accounted for as
+operating leases.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUS) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+(20) Provisions
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+Annual Report 2014
+149
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(21) Asset impairment
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+(22) Cash and cash equivalents
+Cash and cash equivalents refer to short term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+(In RMB millions, unless otherwise stated)
+(23) Employee benefits
+Operating leases
+When the Group is a lessor under finance leases, an amount representing the minimum lease payment receivables and initial
+direct costs is included in the statement of financial position as loans and advances to customers. Any unguaranteed residual
+value is also recognised at the inception of the lease. The difference between the sum of the minimum lease payment
+receivables, initial direct costs, the unguaranteed residual value and their present value is recognised as unearned finance
+income. Unearned finance income is recognised over the period of the lease using the effective interest rate method.
+Finance leases
+(28) Leases
+Dividend income
+The fair value of the award credits granted to the bank card holders is deferred and recognised as fee and commission
+income when the award credits are redeemed or expire.
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the
+arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognised on
+completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are
+recognised after fulfilling the corresponding criteria.
+Insurance contracts classification
+(25) Insurance contracts
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+151
+Annual Report 2014
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+(24) Fiduciary activities
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when it is incurred.
+Early retirement benefits
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+When the Group can no longer withdraw an offer of those benefits; and
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+Termination benefits
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organizations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+Post-employment benefits-defined contribution plans
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+ICBC
+150
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. the contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+(i)
+(ii)
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards.
+Fee income from providing transaction services
+These fees mainly include fee income on settlement and clearing business, commission income and fee income on
+asset management, custody and other management advisory services. Fee income is recognised on the basis of when
+the transaction is completed or on an accrual basis when the service is provided over a period of time.
+Fee income on transactions conducted or from services provided over a period of time
+(ii)
+(i)
+The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be
+divided into the following two categories:
+Fee and commission income
+Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest
+income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the
+impairment loss.
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+ICBC
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+152
+Interest income
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+(26) Revenue recognition
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+Insurance contract liabilities
+(iii) Related income can be reliably measured.
+The related economic benefits are likely to flow to the Group; and
+(ii)
+(i) The insurance contract is issued, and related insurance risk is undertaken by the Group;
+Insurance premium income is recognised when:
+Insurance income recognition
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as available-
+for-sale financial assets, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where
+appropriate, to the net carrying amount of the financial asset. The calculation takes into account all contractual terms of
+the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly
+attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. The carrying
+amount of the financial asset is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying
+amount is calculated based on the original effective interest rate and the change in carrying amount is recorded in profit or
+loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+2,705
+28,898
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB16,307 million (2013: RMB15,050 million)
+with respect to trust and other fiduciary activities.
+8.
+NET TRADING INCOME
+Debt securities
+(14,663)
+10,110
+15,253
+(177)
+(147)
+10,287
+15,400
+2013
+2014
+12. OPERATING EXPENSES
+Insurance net income
+Insurance operating costs
+Net premium income
+Less: premiums ceded to reinsurers
+Premium income
+Details of insurance net income are as follows:
+(i)
+14,874
+15,315
+2,499
+2,708
+Others
+315
+303
+1,012
+(9,067)
+590
+1,043
+2014
+Utility expenses
+3,206
+3,556
+Repairs and maintenance charges
+5,799
+6,543
+Lease payments under operating leases in respect of land and buildings
+14,420
+16,094
+Depreciation (note 30)
+Premises and equipment expenses:
+103,455
+1,319
+112,022
+13,197
+defined contribution plans (i)
+_
+Post-employment benefits
+24,185
+28,541
+68,216
+70,284
+Staff benefits
+Salaries and bonuses
+Staff costs:
+2013
+11,054
+Net gain on disposal of property and equipment, repossessed assets and others
+Sundry bank charge income
+3,412
+Leasing income
+10. NET GAIN ON FINANCIAL INVESTMENTS
+The above amounts represent gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities designated at fair value through profit or loss upon initial
+recognition.
+(2,413)
+(10,024)
+(10,434)
+(26,182)
+8,021
+16,158
+2013
+2014
+Financial liabilities
+Financial assets
+2014
+9. NET LOSS ON FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE
+THROUGH PROFIT OR LOSS
+154
+1,745
+(1,269)
+618
+40
+24
+1,383
+1,103
+2013
+2014
+Derivatives
+Equity investments
+The above amounts include gains and losses arising from the buying and selling of, interest income and expense on, and
+changes in the fair value of financial assets and liabilities held for trading.
+2,669
+2013
+145
+6,593
+3,673
+Gain from foreign exchange and foreign exchange products, net
+1,043
+590
+Insurance net income (i)
+2013
+2014
+11. OTHER OPERATING INCOME, NET
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+Dividend income from unlisted investments
+161
+625
+1,803
+524
+1,626
+Gain on disposal of available-for-sale financial assets, net
+101
+177
+Dividend income
+8
+32
+Dividend income from listed investments
+93
+Annual Report 2014
+6,722
+Restricted balances with central banks:
+3,253,660
+(298,941)
+(273,797)
+(42,801)
+(38,209)
+(14,615)
+(11,770)
+(356,357)
+(323,776)
+Debt securities issued
+493,522
+Net interest income
+The above interest income and expense were related to financial instruments which are not at fair value through profit or
+loss.
+(i)
+Included in interest income on loans and advances to customers for the year is an amount of RMB2,779 million (2013:
+RMB2,019 million) with respect to the accreted interest on impaired loans.
+26,094
+(ii)
+Included in interest income on financial investments for the year is an amount of RMB27 million (2013: RMB7 million)
+with respect to interest income on impaired debt securities.
+160
+443,335
+ICBC
+Due to banks and other financial institutions
+Interest expense on:
+548,640
+437,789
+395,461
+164,612
+142,625
+13,087
+10,554
+Financial investments (ii)
+Due to customers
+159,262
+Due from central banks
+48,384
+45,487
+Due from banks and other financial institutions
+26,745
+24,470
+849,879
+767,111
+148,514
+7.
+NET FEE AND COMMISSION INCOME
+(i)
+Others
+Fee and commission income
+5,923
+6,893
+4,614
+4,357
+2,019
+1,857
+Trust and agency services (i)
+2,488
+146,678
+134,550
+Fee and commission expense
+(14,181)
+(12,224)
+132,497
+122,326
+Net fee and commission income
+2,069
+Guarantee and commitment business
+Asset custody business (i)
+12,611
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+2014
+2013
+Settlement, clearing business and cash management
+30,422
+30,513
+Investment banking business
+30,474
+29,486
+Bank card business
+35,133
+28,533
+Personal wealth management and private banking services (i)
+20,676
+18,231
+Corporate wealth management services (i)
+14,929
+615,488
+· Discounted bills
+· Personal loans
+- Corporate loans and advances
+2,967,011
+Mandatory reserves with central banks (ii)
+168,021
+186,197
+194,762
+201,085
+26,077
+20,477
+Fiscal deposits with the PBOC
+47,772
+overseas countries or regions
+Unrestricted balances with central banks of
+63,959
+80,027
+66,077
+80,436
+Surplus reserves with central banks (i)
+77,985
+31,935
+337,092
+2,805,957
+285,987
+2,946,700
+337,092
+3,473,327
+(ii)
+(i)
+3,294,007
+3,085,639
+3,287,130
+3,099,245
+3,322,537
+3,523,622
+225
+613
+3,136
+202
+7,076
+225
+202
+Other restricted balances with the PBOC (ii)
+18,232
+overseas countries or regions (ii)
+Mandatory reserves with central banks of
+285,987
+2,798,814
+85,693
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted deposits.
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain central
+banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks and other
+restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits mainly consist of
+deposits placed with the PBOC. As at 31 December 2014, the mandatory deposit reserve ratios of the domestic branches of
+the Bank in respect of customer deposits denominated in RMB and foreign currencies were consistent with the requirement
+of the PBOC. The amounts of mandatory reserve deposits placed with the central banks of those countries or regions outside
+Mainland China are determined by local jurisdictions.
+80,913
+Cash on hand
+On 24 July 2014, the IASB issued the complete standard of IFRS 9 (IFRS 9 (2014)).
+Annual Report 2014
+159
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Classification and measurement of financial assets and financial liabilities
+IFRS 9 (2014) includes a 3rd business model and requires some debt instruments to be measured at fair value through other
+comprehensive income less impairment with recycling. For the classification and measurement, IFRS 9 introduces a new
+requirement that the gain or loss on a financial liability designated at fair value through profit or loss that is attributable to
+changes in the entity's own credit risk is recognised in other comprehensive income; the remaining amount of change in fair
+value is recognised in profit or loss ("own credit risk requirements").
+IFRS 9, Financial instruments
+Hedge accounting
+Impairment
+The new impairment methodology in IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit loss"
+model. Under IFRS 9 it is not necessary for a credit event to have occurred before credit losses are recognised.
+The Group has started the process of evaluating the potential effect of this standard. Given the nature of the Group's
+operations, this standard is expected to have a pervasive impact on the Group's financial statements.
+6. NET INTEREST INCOME
+2014
+2013
+Interest income on:
+Loans and advances to customers (i)
+The new standard aligns hedge accounting more closely with risk management. It does not fundamentally change the types
+of hedging or the requirement to measure and recognise ineffectiveness; however, more hedging strategies that are used for
+risk management will qualify for hedge accounting.
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+IFRS 15 also introduces extensive qualitative and quantitative disclosure requirements which aim to enable users of the
+financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from
+contracts with customers. Some of these apply to interim financial reports prepared under IAS 34 as well as to annual
+financial statements. An entity may adopt IFRS 15 on a full retrospective basis. Alternatively, it may choose to adopt it from
+the date of initial application by adjusting opening balances at that date. Transitional disclosures are different depending on
+the approach adopted by the entity.
+The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue:
+at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether,
+how much and when revenue is recognised.
+central banks:
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Amendments to IAS 27, Separate financial statements "Equity method in separate financial
+statements"
+The amendments allow an entity to apply the equity method to account for its investments in subsidiaries, joint ventures and
+associates in its separate financial statements. As a result of the amendments, the entity can choose to account for these
+investments either:
+•
+at cost;
+•
+in accordance with IFRS 9 (or IAS 39); or
+•
+using the equity method as described in IAS 28.
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+Amendments to IFRS10 and IAS28, Sale or contribution of assets between an investor and
+its associate or joint venture
+The amendments address a long-standing conflict on transactions with Joint Venture, by creating a new dividing line-namely
+whether a business has been sold- with a new approach to steps-up. The amendments require the full gain to be recognised
+when the assets transferred meet the definition of the business under IFRS 3 Business Combinations.
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+Annual Improvements to IFRSS 2012-2014 Cycle
+The 2012-2014 cycle of annual improvement contains amendments to four standards with consequential amendments
+to other standards and interpretations including IFRS 5 Non-current assets held for sale and discounted operations, IFRS 7
+Financial instruments: disclosures, IAS 19 Employee benefits, IAS 34 Interim financial reporting.
+The adoption of these annual improvements will not have any material impact on the financial position and the financial
+result of the Group.
+IFRS 15, Revenue from contracts with customers
+88,714
+Amortisation
+217
+2,018
+RMB14,000,001 to RMB14,500,000
+RMB13,000,001 to RMB13,500,000
+RMB11,000,001 to RMB11,500,000
+RMB10,500,001 to RMB11,000,000
+RMB10,000,001 to RMB10,500,000
+RMB9,500,001 to RMB10,000,000
+RMB7,500,001 to RMB8,000,000
+2013
+2014
+Number of employees
+The number of these individuals whose emoluments fell within the following bands is set out below.
+51,995
+69,083
+641
+31,427
+57,407
+Contributions to defined contribution schemes
+Discretionary bonuses
+19,927
+11,676
+Salaries and allowances
+2013
+RMB'000
+2014
+RMB'000
+Group
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 13 and 52(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+14. FIVE HIGHEST PAID INDIVIDUALS
+During the year, no emoluments were paid by the Group to any of the persons who are directors or supervisors as an
+inducement to join or upon joining the Group or as compensation for loss of office (2013: Nil).
+During the year, there was no arrangement under which a director or a supervisor waived or agreed to waive any
+remuneration (2013: Nil).
+The non-executive directors of the Bank received emoluments from the Bank's shareholders or its affiliates in respect of their
+services during the year.
+RMB14,500,001 to RMB15,000,000
+1
+RMB18,000,001 to RMB18,500,000
+1
+3
+27(d)
+Other assets
+Available-for-sale financial assets
+Held-to-maturity investments
+Financial investments:
+58
+8
+21
+Due from banks and other financial institution
+Charge/(reversal) of impairment losses on:
+2013
+2014
+Notes
+Mr. Zhu Lifei, the Employee Representative Supervisor of the Bank, due to the expiration of the term of office, ceased to act as
+Employee Representative Supervisor of the Bank with effect from 9 September 2013.
+15. IMPAIRMENT LOSSES ON ASSETS OTHER THAN LOANS AND ADVANCES TO
+CUSTOMERS
+31 December 2014
+Notes to Financial Statements
+165
+Annual Report 2014
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group or as compensation for loss of office (2013: Nil).
+5
+1
+-1
+1
+1
+1
+| - | - | - - -
+5
+1
+(In RMB millions, unless otherwise stated)
+(295)
+At the Second Extraordinary Meeting held on 10 September 2013, Mr. Fu Zhongjun and Mr. Yi Xiqun were appointed as Non-
+Executive Director and Independent Non-Executive Director of the Bank, respectively, and their appointments were approved
+by CBRC in December 2013.
+(vii)
+ZHANG Wei
+280
+280
+280
+External Supervisor
+MENG Yan
+300
+300
+300
+External Supervisor
+DONG Juan
+1,215
+369
+1,584
+297
+920
+367
+Shareholder Representative Supervisor
+WANG Chixi
+Independent Non-executive Director
+YI Xiqun (vi)
+420
+420
+440
+440
+440
+440
+430
+430
+Employee Representative Supervisor
+50
+50
+50
+(vi)
+(v)
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+ICBC
+164
+At the Annual General Meeting for the year 2012 held on 7 June 2013, Mr. Luo Xi was appointed as Executive Directors of
+the Bank. Mr. Luo Xi, Executive Director and Executive Vice President of the Bank, due to change of job assignments, tendered
+his resignation to the board of the Bank on 11 November 2013. As well as, he ceased to act as member of the relevant special
+committees of the Board.
+On 22 May 2013, Mr. Yang Kaisheng, Ms. Wang Lili and Mr. Li Xiaopeng tendered his or her resignation to the Board of the
+Bank. Mr Yang Kaisheng ceased to act as Executive Director and President. Ms. Wang Lili and Mr. Li Xiaopeng ceased to act as
+Executive Director and Vice President.
+The above directors' and supervisors' emoluments for the year ended 31 December 2013 were restated in accordance with
+the supplemental announcement for the 2013 annual report released by the Bank on 29 June 2014. The remuneration before
+tax payable to the Chairman of the Board of Directors, the President, the Chairman of the Board of Supervisors and other
+senior management members for 2013 set out in the table above represents the total amount of annual remuneration for
+each of these individuals, which includes the amount of "remuneration paid" as disclosed in the 2013 Annual Report.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+(iv)
+(iii)
+(ii)
+(i)
+13,080
+On December 31, 2013, Mr. Xu Shanda has ceased to act as a director of the Bank as well as member of the relevant special
+committees of the Board due to expiration of his term of office; Mr. Huan Huiwu has ceased to act as a director of the Bank
+as well as member of the relevant special committees of the Board due to change of job assignments.
+4,125
+2,405
+8,417
+3,411
+2,972
+50
+50
+50
+Employee Representative Supervisor
+LI Mingtian
+42
+42
+42
+Former Employee Representative Supervisor
+ZHU Lifei (vii)
+17,205
+27(c)(i),(d)
+163
+102
+Basic earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the Bank divided
+by the weighted average number of ordinary shares in issue.
+0.75
+350,068
+0.78
+351,438
+Weighted average number of ordinary shares in issue (in million shares)
+Basic earnings per share (RMB yuan)
+Shares:
+262,649
+275,811
+Profit for the year attributable to ordinary equity holders of the parent company
+Earnings:
+2013
+2014
+The calculation of basic earnings per share is based on the following:
+19. EARNINGS PER SHARE
+91,958
+91,026
+Final dividend for 2014: RMBO.2554 per share (2013: RMBO.2617 per share)
+(not recognised as at 31 December):
+Dividends on ordinary shares proposed for approval
+2013
+2014
+83,565
+91,960
+Final dividend for 2013: RMBO.2617 per share (2012: RMBO.239 per share)
+2013
+2014
+Dividends on ordinary shares declared and paid:
+18. DIVIDENDS
+The calculation of diluted earnings per ordinary share is based on the following:
+2014
+2013
+Earnings:
+2013
+2014
+Bank
+Group
+20. CASH AND BALANCES WITH CENTRAL BANKS
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+167
+Annual Report 2014
+Diluted earnings per share was computed from dividing the profit attributable to ordinary equity holders of the parent
+company (after adjusting for interest expense on the convertible bonds) by the weighted average number of ordinary shares
+outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all
+the dilutive potential ordinary shares into ordinary shares.
+0.74
+354,720
+354,354
+0.78
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2014 includes
+a profit of RMB263,201 million (2013: RMB252,870 million) which has been dealt with in the financial statements of the
+Bank (Note 42).
+Diluted earnings per share (RMB yuan)
+4,652
+2,916
+all dilutive shares (in million shares)
+350,068
+351,438
+Weighted average number of ordinary shares outstanding (in million shares)
+Add: Weighted average number of ordinary shares assuming conversion of
+Shares:
+263,214
+276,258
+Profit used to determine diluted earnings per share
+262,649
+565
+447
+275,811
+Profit for the year attributable to ordinary equity holders of the parent company
+Add: Interest expense on convertible bonds (net of tax)
+Weighted average number of ordinary shares for diluted earnings per share
+(in million shares)
+17. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+(In RMB millions, unless otherwise stated)
+31 December 2014
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+75,572
+85,326
+1,972
+(7,673)
+(2,684)
+254
+76,284
+92,745
+1,044
+2,151
+1,081
+1,613
+74,159
+2014
+88,981
+2014
+(b) Reconciliation between income tax and accounting profit
+Deferred income tax (credit)/expense
+Adjustments in respect of current income tax of prior years
+Overseas
+Hong Kong and Macau
+Mainland China
+Current income tax expense:
+(a) Income tax
+16. INCOME TAX EXPENSE
+223
+462
+358
+288
+2013
+520
+Profit before taxation
+2013
+338,537
+Notes to Financial Statements
+ICBC
+166
+(ii) The non-taxable income mainly represents interest income arising from the PRC government bonds, which is exempted
+from income tax.
+The non-deductible expenses mainly represent non-deductible impairment provision and write-offs.
+(i)
+75,572
+85,326
+Current income tax expenses
+828
+927
+Others
+(2,684)
+254
+361,612
+Adjustment in respect of current income tax of prior years
+(539)
+Profits attributable to associates and joint ventures
+(8,283)
+(9,081)
+Non-taxable income (ii)
+1,865
+3,937
+Non-deductible expenses (i)
+(264)
+(575)
+Effects of different applicable rates of tax prevailing in other countries/regions
+84,634
+90,403
+Tax at the PRC statutory income tax rate
+(524)
+520
+420
+Independent Non-executive Director
+430
+430
+Independent Non-executive Director
+460
+460
+Independent Non-executive Director
+480
+480
+Independent Non-executive Director
+440
+440
+Independent Non-executive Director
+430
+430
+Independent Non-executive Director
+480
+480
+Former Non-executive Director
+Non-executive Director
+Independent Non-executive Director
+ZHANG Wei (v)
+MENG Yan
+DONG Juan
+WANG Chixi
+YI Xiqun
+HONG Yongmiao
+Or Ching Fai
+Kenneth Patrick CHUNG
+M.C. McCarthy
+WONG Kwong Shing, Frank
+FU Zhongjun
+Shareholder Representative Supervisor
+746
+168
+963
+Annual Report 2014
+Fees of Employee Supervisors Mr. Zhang Wei and Mr. Li Mingtian are their allowances obtained as Employee
+Supervisors of the Bank, excluding their remuneration with the Bank in accordance with the employee remuneration
+system.
+Mr. Wang Xiaolan, non-executive director of the Bank, due to his age, has tendered his resignation to the board of
+directors of the Bank on 16 December 2014, resigning from the positions as non-executive director of the Board and
+member of the Audit Committee, Risk Management Committee and Nomination Committee of the Board.
+Mr. Yao Zhongli, non-executive director of the Bank, due to his age, has tendered his resignation to the board of
+directors of the Bank on 19 November 2014, resigning from the positions as non-executive director of the Board and
+member of the Strategy Committee and Risk Management Committee of the Board.
+Mr. Li Jun, non-executive director of the Bank, due to expiration of his term of office, has ceased to act as non-
+executive director of the Bank as well as member of the relevant special committees of the Board in March 2015.
+Mr. Liu Lixian, executive director of the Bank, due to his age, has tendered his resignation to the board of directors of
+the Bank on 29 December 2014, resigning from the positions as executive director of the Board and member of the
+Related Party Transactions Control Committee of the Board.
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+Note: The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Supervisors of the Bank have not been finalised in accordance with the
+regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a significant impact
+on the Group's and the Bank's 2014 financial statements. The total compensation packages will be further disclosed when
+determined by the relevant authorities.
+8,486
+3,200
+WANG Xiaolan (iv)
+1,230
+50
+50
+Employee Representative Supervisor
+Total
+LI Mingtian (v)
+50
+50
+Employee Representative Supervisor
+280
+280
+External Supervisor
+100
+100
+External Supervisor
+4,056
+YAO Zhongli (iii)
+Former Non-executive Director
+Former Non-executive Director
+Fees
+schemes
+(before tax)
+Position
+Name
+contribution
+paid
+to defined
+Remuneration
+Year ended 31 December 2014
+Contributions
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing of
+Securities on the Stock Exchange of Hong Kong Limited and Chapter 622G of the Hong Kong Companies Ordinance, are as
+follows:
+13. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+RMB'000
+ICBC
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+Auditors' remuneration (including related assurance services for the Group and its subsidiaries and overseas branches)
+of RMB161 million for the year (2013: RMB160 million) is included in other administrative expenses.
+(ii)
+(i)
+204,140
+218,674
+10,411
+10,483
+Others
+37,441
+41,351
+24,721
+23,709
+Business tax and surcharges
+Other administrative expenses (ii)
+162
+163
+RMB'000
+(1)
+LI Jun (ii)
+Non-executive Director
+Non-executive Director
+WANG Xiaoya
+GE Rongrong
+Discipline Committee
+1,025
+1,070
+| |
+246
+779
+Former Executive Director, Secretary of Party
+LIU Lixian (i)
+253
+817
+RMB'000
+Chairman of the Board of Supervisors
+1,089
+249
+840
+Vice Chairman of the Board of Directors,
+Executive Director, President
+Executive Director Executive Director, President
+1,139
+265
+874
+Chairman of the Board of Directors,
+YI Huiman
+JIANG Jianqing
+Total
+emoluments
+before tax
+RMB'000
+(4)=(1)+(2)+(3)
+(3)
+(2)
+ZHAO Lin
+2,211
+Notes to Financial Statements
+(In RMB millions, unless otherwise stated)
+434
+Former Executive Director, Vice President
+LUO Xi (iv)
+534
+227
+761
+127
+453
+181
+Former Executive Director, Vice President
+LI Xiaopeng (iii)
+1,062
+499
+1,561
+168
+996
+397
+Former Executive Director, Vice President
+WANG Lili (iii)
+Discipline Committee
+1,288
+543
+1,831
+313
+1,084
+434
+Executive Director, Secretary of Party
+LIU Lixian
+1,358
+1,084
+313
+1,831
+543
+440
+Independent Non-executive Director
+Or Ching Fai
+HONG Yongmiao
+440
+Independent Non-executive Director
+Kenneth Patrick CHUNG
+430
+Independent Non-executive Directoror
+M.C. McCarthy
+520
+Independent Non-executive Director
+WONG Kwong Shing, Frank
+Former Independent Non-executive Director
+XU Shanda (v)
+564
+Non-executive Director
+Non-executive Director
+YAO Zhongli
+Non-executive Director
+WANG Xiaolan
+Non-executive Director
+LI Jun
+Non-executive Director
+GE Rongrong
+Non-executive Director
+WANG Xiaoya
+Cash and unrestricted balances with
+Former Non-executive Director
+HUAN Huiwu (v)
+1,288
+FU Zhongjun (vi)
+1,922
+348
+1,125
+(3)
+(2)
+(1)
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+paid (pre-tax)
+payment
+before tax
+allowance, etc.
+bonuses
+(4)
+paid
+remuneration
+deferred
+Actual
+amount of
+Of which:
+Total
+emoluments
+plans, housing
+Discretionary
+Remuneration
+and welfare
+to social
+insurance
+the employer
+Year ended 31 December 2013
+Contribution by
+Position
+Name
+Fees
+RMB'000
+31 December 2014
+(5)=(1)+(2)+(3)+(4)
+(7)=(5)-(6)
+449
+Chairman of the Board of Supervisors
+ZHAO Lin
+Executive Director, President
+1,346
+563
+1,909
+337
+1,124
+448
+Vice Chairman of the Board of Directors,
+YI Huiman
+Directors, Executive Director, President
+598
+(6)
+40
+838
+168
+479
+191
+Former Vice Chairman of the Board of
+YANG Kaisheng (iii)
+Chairman of the Board of Directors,
+Executive Director
+JIANG Jianqing
+1,419
+577
+1,996
+334
+1,152
+510
+240
+ICBC
+2013
+2014
+3,439
+five years
+Total
+Assets
+Liabilities
+Currency swap contracts
+69
+69
+16
+Interest rate swap contracts
+470
+837
+8,748
+3,688
+13,743
+51
+(217)
+470
+906
+8,748
+3,688
+13,812
+67
+(217)
+2013
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+five years
+one year
+months
+Over
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Fair value hedges
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates and exchange rates. Interest rate swaps and currency swaps are used as hedging
+instruments to hedge the interest risk and currency risk of financial assets and financial liabilities, respectively.
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+Gain/(loss) arising from fair value hedges, net:
+Hedging instruments
+- Hedged items attributable to the hedged risk
+Group
+2014
+2013
+136
+203
+(129)
+(206)
+7
+(3)
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+Group
+2014
+Notional amounts with remaining life of
+Over three
+Fair values
+Over
+Within
+three
+months
+but within
+one year
+but within
+months
+173
+three
+one year
+but within
+2014
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+three
+months
+but within
+one year
+but within
+months
+395
+one year
+837
+five years
+Over
+five years
+Total
+Assets
+8,297
+3,093
+12,622
+51
+Liabilities
+(148)
+Interest rate swap contracts
+2013
+Notional amounts with remaining life of
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Fair values
+ICBC
+174
+Interest rate swap contracts
+Bank
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Currency swap contracts
+55
+302
+68
+425
+8
+but within
+(5)
+1,080
+3,761
+5,386
+3,187
+13,414
+12
+(316)
+1,135
+4,063
+5,454
+3,187
+13,839
+20
+(321)
+Interest rate swap contracts
+Annual Report 2014
+There is no ineffectiveness recognised in profit or loss that arises from the cash flow hedge for the current year (2013: Nil).
+(1)
+Currency swap contracts
+3,022
+6,508
+9,530
+98
+Currency forward contracts
+25
+25
+3,340
+6,911
+1,778
+3,734
+15,763
+288
+(31)
+2013
+Notional amounts with remaining life of
+Fair values
+Over three
+Within
+months
+Over
+one year
+three
+but within
+but within
+Over
+months
+one year
+five years
+Liabilities
+(31)
+Assets
+190
+6,208
+3,734
+23,049
+(16,986)
+172
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts and currency forward
+contracts that are used to protect against exposures to variability of future cash flows arising from foreign currency assets
+and foreign currency liabilities during the year.
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out
+below.
+Group
+2014
+Notional amounts with remaining life of
+Over three
+Fair values
+five years
+Over
+three
+months
+but within
+one year
+but within
+Over
+months
+one year
+five years
+five years
+Total
+Interest rate swap contracts
+318
+378
+1,778
+Within
+Over three
+Total
+127
+3,022
+6,508
+9,530
+98
+Currency forward contracts
+25
+25
+3,022
+6,601
+156
+259
+10,038
+103
+(3)
+Interest rate swap contracts
+2013
+Notional amounts with remaining life of
+Over three
+Fair values
+Over
+Within
+three
+months
+months
+but within
+one year
+42
+one year
+but within
+five years
+159
+Over
+five years
+278
+Total
+Assets
+Liabilities
+479
+171
+Currency swap contracts
+(3)
+5
+483
+3,138
+2,531
+3,490
+9,286
+Assets
+291
+Liabilities
+(49)
+Bank
+2014
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+Interest rate swap contracts
+months
+three
+but within
+but within
+Over
+months
+Interest rate swap contracts
+one year
+68
+five years
+five years
+Total
+Assets
+Liabilities
+156
+259
+one year
+Over
+Within
+months
+220,403
+22,941
+15,157
+38,098
+35,964
+107,889
+143,853
+417
+(417)
+-reversal of impairment allowances
+(13,440)
+(92,315)
+(105,755)
+Accreted interest on impaired loans (note 6)
+(2,019)
+Write-offs
+(14,002)
+Recoveries of loans and advances previously written off
+740
+(2,498)
+237
+(2,019)
+(16,500)
+977
+At 31 December 2013 and 1 January 2014
+39,065
+201,894
+240,959
+Impairment loss:
+37,610
+18,657
+188,998
+56,267
+31,405
+Impairment loss:
+3,063,465
+7,046,515
+2,727,601
+7,083,319
+3,007,959
+6,574,098
+2,685,987
+350,274
+148,258
+344,099
+144,846
+11,026,331
+9,922,374
+10,435,377
+9,404,931
+Less: Allowance for impairment losses
+(257,581)
+(240,959)
+(251,162)
+(235,485)
+10,768,750
+9,681,415
+10,184,215
+9,169,446
+Movements of allowance for impairment losses during the year are as follows:
+Group
+Individually
+Collectively
+assessed
+assessed
+Total
+At 1 January 2013
+― impairment allowances charged
+-impairment allowances transferred
+― impairment allowances charged
+59,516
+134,411
+30,208
+186,252
+216,460
+22,175
+14,000
+36,175
+35,050
+106,641
+141,691
+404
+(404)
+(13,279)
+(92,237)
+(105,516)
+Accreted interest on impaired loans
+(2,008)
+Write-offs
+(13,644)
+(2,414)
+(2,008)
+(16,058)
+Recoveries of loans and advances previously written off
+679
+237
+916
+At 31 December 2013 and 1 January 2014
+37,410
+198,075
+235,485
+Impairment loss:
+reversal of impairment allowances
+― impairment allowances transferred
+― impairment allowances charged
+At 1 January 2013
+Impairment loss:
+193,927
+-impairment allowances transferred
+reversal of impairment allowances
+861
+(22,767)
+(861)
+(114,893)
+(137,660)
+Accreted interest on impaired loans (note 6)
+(2,779)
+Write-offs
+(33,875)
+Recoveries of loans and advances previously written off
+1,224
+(4,489)
+274
+7,612,592
+(2,779)
+(38,364)
+41,245
+216,336
+1,498
+257,581
+176
+ICBC
+Bank
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Individually
+Collectively
+assessed
+assessed
+Total
+At 31 December 2014
+Discounted bills
+Personal loans
+Corporate loans and advances
+21,259
+12,513
+Interest rate derivatives
+1,631
+1,348
+731
+824
+Commodity derivatives and others
+565
+1,070
+568
+1,123
+Netting settled credit default
+risk-weighted assets
+Credit value adjustment
+10
+10
+17,717
+19,874
+14,399
+16,194
+42,599
+53,544
+36,967
+30,654
+(i)
+The credit risk-weighted assets represent the counterparty credit risk associated with derivative transactions and are calculated
+with reference to Regulation Governing Capital of Commercial Banks (Provisional) promulgated by the CBRC, which includes
+counterparty credit default risk-weighted assets and credit value adjustment.
+25. REVERSE REPURCHASE AGREEMENTS
+Reverse repurchase agreements comprise reverse repurchases of securities, bills, loans, and cash advanced as collateral on
+securities borrowing.
+31,252
+22,676
+Currency derivatives
+14,460
+one year
+three
+but within
+but within
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+757
+547
+5,036
+Group
+2,350
+12
+Liabilities
+(188)
+The credit risk-weighted assets in respect of the above derivatives of the Group and the Bank as at the end of the reporting
+date are as follows:
+Group
+Bank
+2014
+2013
+2014
+2013
+Counterparty credit default
+risk-weighted assets
+24,882
+33,670
+22,568
+8,690
+1,856,735
+Bank
+Reverse repurchases (i)
+Bills
+133,752
+61,876
+133,752
+58,736
+Loans
+2,983
+388,512
+2,518
+292,731
+2,983
+7,863
+259,213
+95,575
+Annual Report 2014
+175
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(i)
+(ii)
+In accordance with master repo agreements and related supplementary agreements, the Group offsets reverse repurchase
+agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and presents net positive (or
+negative) amounts as reverse repurchase agreements (or repurchase agreements) in the financial statement. As at 31
+December 2014, reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting were
+RMB385,031 million and RMB429,705 million respectively (31 December 2013: RMB339,102 million and RMB366,696 million
+respectively), and the net reverse repurchase agreements and net repurchase agreements were RMB110,748 million and
+RMB155,422 million, respectively (31 December 2013: RMB173,497 million and RMB201,091 million respectively).
+As part of the reverse repurchase agreements, the Group has received securities that it is allowed to sell or repledge in
+the absence of default by their owners. As at 31 December 2014, the Group had received securities with a fair value of
+approximately RMB189,195 million on such terms (31 December 2013: RMB199,239 million). Of these, securities with a
+fair value of approximately RMB168,769 million have been repledged under repurchase agreements (31 December 2013:
+RMB191,300 million). The Group has an obligation to return the securities to its counterparties. If the collateral received
+declines in value, the Group may, in certain circumstances, require additional collateral.
+26. LOANS AND ADVANCES TO CUSTOMERS
+Group
+Bank
+2014
+2013
+2014
+2013
+28,976
+122,478
+228,337
+251,777
+388,512
+2013
+292,731
+2014
+259,213
+2013
+95,575
+Cash advanced as collateral on
+securities borrowing
+79,950
+39,172
+468,462
+331,903
+259,213
+95,575
+Reverse repurchases analysed by
+counterparty:
+2014
+Banks
+94,949
+230,922
+81,447
+Other financial institutions
+155,920
+197,782
+28,291
+14,128
+388,512
+292,731
+259,213
+95,575
+Reverse repurchases analysed by collateral:
+Securities
+232,592
+10,482
+187,668
+762,750
+27,176
+23,970
+27,808
+22,845
+27,607
+23. FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Group
+Bank
+2014
+2013
+Debt securities
+101,560
+103,027
+2014
+101,391
+2013
+102,705
+Other debt instruments:
+Banks and other financial institutions
+Others
+71,096
+70,689
+71,096
+70,689
+139,799
+170,697
+137,911
+170,697
+312,455
+344,413
+310,398
+21,258
+344,091
+27,199
+366
+2013
+2014
+Debt securities
+23,970
+27,808
+22,845
+2013
+27,607
+Other debt instruments:
+Banks and other financial institutions
+10,020
+10,020
+Equity investments
+383
+335
+34,373
+28,143
+32,865
+27,607
+Debt securities analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+64
+83
+64
+65
+2,634
+526
+1,523
+21,272
+Analysed into:
+Listed in Hong Kong
+62
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+1,015,906
+753,091
+92,944
+4,237
+1,866,178
+19,068
+(20,281)
+Option contracts purchased
+12,670
+32,181
+301
+45,152
+165
+Option contracts written
+9,564
+6,919
+99
+16,582
+(140)
+1,038,140
+792,191
+months
+Over
+but within
+one year
+63
+Listed outside Hong Kong
+3,312
+4,306
+Unlisted
+309,081
+340,044
+3,206
+307,192
+4,047
+340,044
+312,455
+344,413
+310,398
+344,091
+170
+2014
+ICBC
+24. DERIVATIVE FINANCIAL INSTRUMENTS
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+market participates at measured date.
+In accordance with master derivative financial instrument agreements and related supplementary agreements, the Group do
+not have derivative financial instruments which meet the criteria for offsetting (Note3 (13)).
+At the end of the reporting period, the Group and the Bank had derivative financial instruments as follows:
+Group
+2014
+Notional amounts with remaining life of
+Over three
+Fair values
+Over
+Within
+three
+months
+but within
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Bank
+Group
+22. FINANCIAL ASSETS HELD FOR TRADING
+292,670
+(183)
+304,273
+306,366
+270,129
+292,487
+Placements with banks and other financial
+institutions:
+Banks operating in Mainland China
+90,107
+89,643
+29,659
+61,428
+Other financial institutions operating in
+Mainland China
+272,392
+277,416
+305,074
+301,264
+Banks and other financial institutions
+operating outside Mainland China
+116,030
+44,625
+132,904
+102,391
+478,529
+411,684
+467,637
+465,083
+Less: Allowance for impairment losses
+270,360
+(231)
+(183)
+(231)
+Less: Allowance for impairment losses
+1,331
+Mainland China
+Other financial institutions operating in
+193,677
+180,944
+208,768
+202,309
+Banks operating in Mainland China
+institutions:
+Due from banks and other financial
+2013
+2014
+2013
+2014
+(26)
+Bank
+21. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+55,102
+3,438
+Banks and other financial institutions
+operating outside Mainland China
+100,864
+94,342
+88,085
+95,555
+304,504
+306,549
+Group
+93,344
+(66)
+(64)
+169
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Bank
+At 1 January 2013
+Charge/(reversal) for the year
+At 31 December 2013 and 1 January 2014
+Charge/(reversal) for the year
+At 31 December 2014
+Due from
+banks and other
+Placements with
+banks and other
+financial institutions
+financial institutions
+Total
+48
+132
+180
+135
+(68)
+67
+183
+64
+247
+48
+10
+231
+26
+257
+Annual Report 2014
+257
+26
+231
+478,503
+411,618
+467,611
+465,019
+782,776
+717,984
+737,740
+757,506
+As at 31 December 2014, the amount of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group is RMB163,700 million (31 December 2013: RMB175,862 million). During
+the year of 2014, the maximum exposure of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group is RMB176,624 million (2013: RMB207,546 million). The transactions were
+conducted in the ordinary course of business under normal terms and conditions and at market rates.
+Movements of the allowance for impairment losses during the year are as follows:
+Group
+At 1 January 2013
+Charge/(reversal) for the year
+At 31 December 2013 and 1 January 2014
+Charge/(reversal) for the year
+At 31 December 2014
+(26)
+Due from
+Placements with
+banks and other
+financial institutions
+Total
+48
+143
+191
+135
+(77)
+58
+183
+66
+249
+48
+(40)
+8
+banks and other
+financial institutions
+4,237
+1,927,912
+19,233
+67,766
+74,618
+113,972
+10,151
+266,507
+1,791
+(2,058)
+Commodity derivatives and others
+182,605
+52,507
+1,304
+219
+236,635
+2,378
+(1,357)
+1,095,727
+818,628
+172,011
+13,701
+2,100,067
+22,292
+(22,324)
+2013
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+(4)
+7,455
+819
+5,253
+Option contracts purchased
+6,019
+26,960
+1,558,414
+32,979
+18,045
+(18,839)
+78
+Option contracts written
+3,133
+2,399
+5,532
+(70)
+845,356
+691,503
+one year
+56,735
+1,596,925
+18,123
+(18,909)
+Interest rate contracts:
+Swap contracts
+Forward contracts
+66,383
+69,365
+113,153
+10,151
+259,052
+1,791
+(2,054)
+1,383
+3,331
+3,331
+three
+but within
+Interest rate contracts:
+Swap contracts
+Forward contracts
+35,798
+83,290
+120,522
+8,502
+248,112
+2,634
+(2,934)
+788
+3,806
+4,594
+36,586
+87,096
+120,522
+8,502
+252,706
+2,634
+(2,934)
+Commodity derivatives and others
+195,232
+40,513
+844
+254
+236,843
+3,605
+(2,408)
+895,835
+(11,644)
+16,810
+1,367,186
+1,726
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+660,230
+606,330
+66,302
+1,726
+but within
+1,334,588
+(11,638)
+Option contracts purchased
+3,590
+26,863
+30,453
+123
+Option contracts written
+197
+1,948
+2,145
+(6)
+664,017
+635,141
+66,302
+16,687
+1,331
+56,735
+836,204
+24,048
+(24,191)
+2013
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+months
+but within
+one year
+but within
+five years
+Over
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+841,965
+679,653
+79,228
+1,492
+Option contracts purchased
+Option contracts written
+4,071
+605
+30,395
+210
+(1,383)
+2,405
+239,258
+2,529,568
+219
+38,054
+(20,421)
+Interest rate contracts:
+Swap contracts
+Forward contracts
+70,707
+88,816
+152,041
+33,598
+345,162
+2,408
+(2,382)
+5,198
+11,219
+819
+5,471
+17,236
+(5)
+75,905
+100,035
+152,860
+33,598
+362,398
+2,410
+(2,387)
+Commodity derivatives and others
+185,228
+52,507
+1,299,273
+944,733
+1,304
+247,508
+2
+662,144
+210
+17,977
+164
+25,020
+(19,168)
+Annual Report 2014
+171
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Bank
+2014
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+but within
+but within
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+(2,409)
+3,811
+237,077
+2,198,450
+(3,395)
+(13,331)
+(33)
+846,641
+715,519
+79,648
+1,492
+1,643,300
+18,141
+(13,364)
+Interest rate contracts:
+Swap contracts
+Forward contracts
+39,736
+823
+40,559
+1,602,338
+34,676
+6,286
+Commodity derivatives and others
+1,082,666
+98,611
+3,878
+102,489
+40,513
+858,521
+153,414
+21,563
+313,324
+3,068
+(3,394)
+48
+4,749
+(1)
+153,462
+844
+233,954
+21,563
+254
+23,309
+318,073
+3,068
+195,466
+(38)
+18,147
+(105,516)
+55,102
+― impairment allowances charged
+· reversal of impairment allowances
+Accreted interest on impaired loans
+Write-offs
+Recoveries of loans and advances
+previously written off
+At 31 December 2014
+154,131
+38,117
+192,248
+(114,987)
+(22,159)
+(137,146)
+(2,772)
+(2,772)
+(33,726)
+(4,408)
+(38,134)
+1,213
+171,439
+268
+79,723
+1,481
+251,162
+15,958
+39,144
+Impairment loss:
+- reversal of impairment allowances
+251,162
+212,082
+39,080
+At 31 December 2014
+1,481
+(38,134)
+(4,408)
+268
+1,213
+Recoveries of loans and advances previously written off
+(33,726)
+Loans and advances for which allowance for
+Write-offs
+(2,772)
+Accreted interest on impaired loans
+(137,146)
+(114,864)
+(22,282)
+(856)
+856
+192,248
+133,867
+58,381
+(2,772)
+Group
+Bank
+2014
+(235,485)
+Net loans and advances for which allowance
+for impairment losses are:
+Individually assessed
+51,103
+Collectively assessed
+10,717,647
+34,198
+9,647,217
+10,768,750
+9,681,415
+(251,162)
+49,774
+10,134,441
+10,184,215
+9,169,446
+Identified impaired loans and advances
+Percentage of impaired loans and advances
+124,497
+1.13%
+93,689
+0.94%
+120,756
+1.16%
+90,199
+0.96%
+178
+ICBC
+32,615
+9,136,831
+Movements of allowance for impairment losses during the year analysed into those attributable to corporate loans and
+advances and discounted bills and personal loans are as follows:
+(240,959)
+(37,410)
+(198,075)
+2013
+2014
+2013
+impairment losses are:
+Individually assessed
+92,348
+Collectively assessed
+10,933,983
+11,026,331
+73,263
+9,849,111
+9,922,374
+(257,581)
+88,854
+10,346,523
+10,435,377
+9,404,931
+Less: Allowance for impairment losses:
+Individually assessed
+(41,245)
+(39,065)
+(39,080)
+Collectively assessed
+(216,336)
+(201,894)
+(212,082)
+70,025
+9,334,906
+― impairment allowances charged
+-impairment allowances transferred
+Group
+loans and
+advances and
+discounted bills
+156,570
+Impairment loss:
+At 1 January 2013
+Total
+Personal loans
+advances and
+discounted bills
+loans and
+Corporate
+Bank
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+177
+Annual Report 2014
+1,498
+257,581
+80,418
+177,163
+At 31 December 2014
+274
+1,224
+Recoveries of loans and advances previously written off
+59,890
+216,460
+25,983
+10,192
+167,580
+At 31 December 2013 and 1 January 2014
+916
+237
+679
+Recoveries of loans and advances previously written off
+(16,058)
+(2,414)
+(13,644)
+Write-offs
+(38,364)
+(2,008)
+Accreted interest on impaired loans
+36,955
+(21,354)
+(84,162)
+reversal of impairment allowances
+141,691
+31,546
+110,145
+- impairment allowances charged
+36,175
+(2,008)
+(4,489)
+(33,875)
+Write-offs
+Write-offs
+(2,019)
+(2,019)
+Accreted interest on impaired loans (note 6)
+(105,755)
+(21,372)
+(84,383)
+― reversal of impairment allowances
+143,853
+31,826
+(14,002)
+112,027
+10,454
+27,644
+220,403
+60,349
+160,054
+― impairment allowances charged
+Impairment loss:
+At 1 January 2013
+Total
+Personal loans
+38,098
+Corporate
+(2,498)
+Recoveries of loans and advances previously written off
+(2,779)
+(2,779)
+Accreted interest on impaired loans (note 6)
+(137,660)
+(22,163)
+(115,497)
+reversal of impairment allowances
+193,927
+38,254
+155,673
+(16,500)
+― impairment allowances charged
+16,091
+40,176
+Impairment loss:
+240,959
+68,542
+172,417
+At 31 December 2013 and 1 January 2014
+977
+237
+740
+56,267
+67,905
+235,485
+22
+82,613
+87,216
+2,148
+2,268
+2,150
+2,284
+68
+2
+84
+Held overseas
+1
+21
+1
+21
+2,147
+2,179
+2,147
+15,644
+15,382
+Group's share of net assets of the associate
+20.09%
+20.08%
+Group's effective interest
+85,669
+9
+69,146
+70,829
+68,445
+Short term leases (less than 10 years):
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+2,179
+71,601
+Goodwill
+81,053
+As at 31 December 2014, the net carrying value of aircraft and vessels leased out by the Group under operating leases was
+RMB62,957 million (31 December 2013: RMB32,043 million).
+(1,874)
+(6,941)
+(602)
+(2,400)
+at fair value through profit or loss
+Change in fair value of financial instruments
+9,782
+39,044
+(1,341)
+(5,457)
+financial assets
+Change in fair value of available-for-sale
+19,612
+78,779
+25,807
+104,244
+Allowance for impairment losses
+As at 31 December 2014, the net carrying value of aircraft and vessels owned by the Group that have been pledged as
+security for liabilities due to banks and financial institutions was RMB 15,598 million (31 December 2013: RMB4,980 million).
+31. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+Group
+2014
+2013
+Deductible/
+(taxable)
+As at 31 December 2014, the process of obtaining the title for the Group's properties and buildings with an aggregate net
+carrying value of RMB10,781 million (31 December 2013: RMB9,327 million) was still in progress. Management is of the
+view that the aforesaid matter would not affect the rights of the Group to these assets nor have any significant impact on
+the business operation of the Group.
+Deferred
+differences
+income
+tax assets/
+(liabilities)
+Deductible/
+(taxable)
+temporary
+differences
+Deferred
+income
+tax assets/
+(liabilities)
+Deferred income tax assets:
+temporary
+11,324
+12,277
+Carrying amount of the Group's interest in Standard Bank
+in the consolidated financial statements
+1,914
+658
+Aggregate amounts of the Group's share of those joint ventures
+Profit from continuing operations
+74
+70
+Other comprehensive income
+Total comprehensive income
+74
+70
+All of the above joint ventures are accounted for using the equity method in the consolidated financial statements.
+Annual Report 2014
+185
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Cost:
+Total
+vessels
+vehicles
+improvements
+in progress
+Aggregate carrying amount of individually immaterial joint ventures
+Aircraft and
+Leasehold
+Construction
+Properties and
+buildings
+Office
+equipment
+Group
+30. PROPERTY AND EQUIPMENT
+and motor
+2013
+2014
+The Group has interests in a number of individually immaterially joint ventures. The following tables illustrate the
+summarised financial information of the joint ventures that are not individually material to the Group:
+Total comprehensive income
+Other comprehensive income
+34
+29
+Profit from continuing operations
+Aggregate amounts of the Group's share of those associates
+29
+2013
+The following tables illustrate the summarised financial information of the associates that are not individually material
+to the Group:
+(ii)
+27,921
+26,706
+in the consolidated financial statements
+646
+2014
+Accrued staff costs
+34
+2014
+(b) Interest in joint ventures
+All of the above associates are accounted for using the equity method in the consolidated financial statements.
+27,857
+27,005
+Interest in associates in the consolidated financial statements
+(348)
+(iii) Reconciliation of carrying amounts to the Group's total interests in the associates:
+(348)
+284
+647
+Carrying amount of individually immaterial associates
+2013
+27,921
+26,706
+Carrying amount of material associates - Standard Bank
+Less: Allowance for impairment losses
+25,791
+6,448
+23,005
+Total
+gains/(losses)
+recorded in
+profit or loss
+2014
+At 1 January
+2014
+Group
+(b) Movements of deferred income tax
+28,139
+112,590
+23,899
+95,671
+(4,873)
+(19,390)
+(5,860)
+(23,368)
+Others
+5,751
+23,005
+financial assets
+(4,477)
+(1,110)
+39,425
+9,876
+Change in fair value of financial instruments
+Total losses
+recorded in
+at fair value through profit or loss
+(601)
+(7,576)
+(1,894)
+Accrued staff costs
+25,791
+6,448
+(2,411)
+other
+At
+comprehensive
+5,751
+697
+6,448
+Others
+(4,411)
+(387)
+Accrued staff costs
+(756)
+28,860
+7,777
+(11,879)
+24,758
+188
+ICBC
+(5,554)
+Change in fair value of available-for-sale
+(602)
+(1,874)
+31 December
+income
+2014
+Deferred income tax assets:
+Allowance for impairment losses
+19,612
+1,272
+6,195
+Change in fair value of available-for-sale financial assets
+9,782
+(11,123)
+(1,341)
+Change in fair value of financial instruments
+at fair value through profit or loss
+25,807
+At 1 January 2013
+19,279
+25,022
+(assets)
+liabilities/
+Deferred
+income tax
+temporary
+liabilities/
+(deductible)
+income tax
+Taxable/
+Deferred
+differences
+temporary
+(deductible)
+Taxable/
+2013
+2014
+Group
+(In RMB millions, unless otherwise stated)
+5,751
+Others
+(22,701)
+(5,554)
+(18,311)
+(4,411)
+differences
+99,477
+115,576
+28,860
+Annual Report 2014
+187
+Notes to Financial Statements
+31 December 2014
+24,758
+(assets)
+Deferred income tax liabilities:
+Allowance for impairment losses
+420
+Bank
+2014
+2013
+Deductible/
+(taxable)
+temporary
+1,650
+differences
+Deductible/
+(taxable)
+temporary
+differences
+Deferred
+income
+tax assets/
+(liabilities)
+Deferred income tax assets:
+Allowance for impairment losses
+100,136
+Deferred
+income
+tax assets/
+(liabilities)
+77,126
+451
+316
+(465)
+(68)
+(244)
+(45)
+Change in fair value of available-for-sale
+financial assets
+2,405
+396
+905
+149
+Others
+2,474
+449
+989
+70
+106,626
+22,662
+6,660
+125,479
+17,792
+7,953
+64,235
+215,459
+Accumulated depreciation and impairment:
+At 1 January 2013
+29,802
+58
+Depreciation and impairment charge for the year
+5,269
+Disposals
+(252)
+At 31 December 2013 and 1 January 2014
+34,819
+Depreciation and impairment charge for the year
+5,284
+70
+(1,137)
+(872)
+(13)
+12,317
+6,077
+At 31 December 2014
+959
+65,952
+32,668
+3,424
+8222
+(293)
+Disposals
+12
+(3,042)
+(2,233)
+(61)
+At 31 December 2013 and 1 January 2014
+(1,736)
+(1,024)
+(26)
+(263)
+(423)
+115,872
+Disposals
+(8,988)
+7,639
+CIP transfer in/out)
+19,682
+6,196
+1,054
+1,349
+4,370
+18,291
+57,589
+(77)
+(671)
+Disposals
+165
+(6,096)
+5,931
+7,096
+CIP transfer in/out)
+8,714
+918
+5,674
+4,347
+Additions
+198,848
+19,653
+8,861
+37,873
+934
+2013
+Long term leases (over 50 years):
+Held in the PRC (other than Hong Kong)
+12,236
+10,254
+12,236
+10,254
+Held in Hong Kong
+581
+514
+281
+154
+Held overseas
+514
+549
+55
+52
+69
+184
+279
+Held in Hong Kong
+68,423
+70,751
+2014
+68,316
+Held in the PRC (other than Hong Kong)
+Medium term leases (10 to 50 years):
+10,460
+12,572
+11,317
+13,331
+70,751
+2013
+2014
+Bank
+At 31 December 2013
+Net carrying amount:
+88,591
+43,468
+5,272
+41
+At 31 December 2014
+39,810
+(2,437)
+(2,083)
+(32)
+(29)
+13,896
+7,678
+At 31 December 2014
+77,132
+81,053
+2,726
+Group
+The carrying value of the Group's and the Bank's properties and buildings is analysed based on the remaining terms of the
+land leases as follows:
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+ICBC
+18,221
+186
+20,767
+2,681
+17,751
+85,669
+121,716
+19,716
+126,868
+Held overseas
+3,571
+180,902
+CIP transfer in/(out)
+5,931
+(10,615)
+165
+4,519
+Disposals
+(671)
+(94)
+(568)
+(3,053)
+(778)
+(5,164)
+At 31 December 2014
+127,413
+24,845
+8,662
+65,573
+6,852
+1,034
+5,459
+Depreciation charge for the year (note 12)
+67,631
+995
+53,815
+32,989
+58
+29,939
+At 1 January 2013
+Accumulated depreciation and impairment:
+293,317
+66,824
+3,650
+29,070
+8,731
+973
+1,349
+(12,561)
+7,639
+CIP transfer in/(out)
+43,617
+14,860
+3,573
+7,972
+15,132
+3,918
+Additions
+203,520
+15,794
+51,778
+1,735
+1,075
+Disposals
+(322)
+10,643
+4,398
+Additions
+244,666
+34,013
+59,730
+(428)
+8,257
+117,755
+At 31 December 2013 and 1 January 2014
+(2,471)
+(214)
+(1,369)
+(138)
+24,911
+Additions
+14,420
+12
+3,867
+94,037
+Net carrying amount:
+At 31 December 2013
+82,613
+24,841
+3,643
+21,207
+32,043
+164,347
+At 31 December 2014
+87,216
+24,804
+3,042
+21,261
+62,957
+199,280
+51,068
+6,068
+18,681
+105,085
+At 1 January 2013
+Cost:
+44,312
+Total
+and motor
+Leasehold
+improvements
+Construction
+in progress
+Properties and
+buildings
+Office
+equipment
+Bank
+vehicles
+5,620
+41
+40,197
+1,970
+38,523
+4,614
+70
+35,142
+At 31 December 2013 and 1 January 2014
+80,319
+(1,802)
+(1,318)
+(70)
+(256)
+Disposals
+70
+58
+(158)
+Impairment charge for the year
+Depreciation charge for the year (note 12)
+1,041
+At 31 December 2014
+571
+(22)
+(2,120)
+(35)
+(29)
+5,348
+(293)
+123
+123
+Impairment charge for the year
+16,094
+1,796
+7,909
+Disposals
+(2,499)
+investments
+Notes to Financial Statements
+MOP9, 188 million
+Leasing
+Tianjin, the PRC
+RMB11,000 million
+RMB11,000 million
+MOP461 million
+89.33
+89.33
+Macau, the PRC
+89.33
+100
+100
+ICBC Financial Leasing Co., Ltd. *
+Industrial and Commercial Bank of China
+banking
+banking
+Commercial
+Moscow, Russia
+RUB2,310 million
+100
+RUB2,310 million
+Commercial
+banking
+80
+100
+100
+80
+100
+Chongqing Bishan ICBC Rural Bank
+Co., Ltd.*
+banking
+(Macau) Limited ("ICBC Macau")
+Commercial
+RMB120 million
+RMB200 million
+60
+60
+60
+60
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd.*
+Zhejiang, the PRC
+RMB100 million
+100
+100
+Fund
+banking
+banking
+Commercial
+London,
+United Kingdom
+Beijing, the PRC
+RMB433 million
+929,961
+80
+Co., Ltd. *
+80
+ICBC Credit Suisse Asset Management
+USD200 million
+USD200 million
+80
+100
+100
+100
+80
+100
+Industrial and Commercial Bank of China
+(Europe) S.A.
+100
+ZAO Industrial and Commercial Bank of
+China (Moscow)
+banking
+Commercial
+Jakarta, Indonesia
+USD286 million
+IDR2,692.2 billion
+98.61
+98.61
+100
+98.61
+management
+Commercial
+Luxembourg
+EUR215 million
+EUR215 million
+80
+100
+80
+PT. Bank ICBC Indonesia (" ICBC Indonesia")
+RMB100 million
+Chongqing, the PRC
+Commercial
+(Argentina) S.A.("ICBC Argentina")
+ARS3,505 million
+ARS1,345 million
+80
+80
+80
+60
+Industrial and Commercial Bank of China
+(Peru) Limited
+Industrial and Commercial Bank of China
+RMB5,700 million
+USD258 million
+RMB8,705 million
+USD309 million
+80
+80
+80
+Industrial and Commercial Bank of China
+60
+(USA) NA
+60
+Industrial and Commercial Bank of China
+(Brazil) Limited
+10
+Real202 million
+100
+100
+80
+100
+Commercial
+banking
+100
+Commercial
+Broker dealer
+Delaware and
+New York,
+United States
+Shanghai, China
+New York,
+United States
+Buenos Aires,
+Argentina
+Lima, Peru
+USD50 million
+USD50 million
+100
+80
+100
+Insurance
+Commercial
+banking
+60
+ICBC-AXA Assurance Co., Ltd *
+Financial Services LLC
+Toronto, Canada
+CAD138.66 million
+CAD108 million
+80
+10
+80
+100
+Commercial
+100
+100
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+80
+50
+80
+Industrial and Commercial Bank of China
+(Canada)
+banking
+00
+MYR331 million
+MYR331 million
+Industrial and Commercial Bank of China
+USD50.25 million
+USD50 million
+100
+100
+80
+100
+27. FINANCIAL INVESTMENTS
+banking
+(Thai) Public Company Limited
+("ICBC Thai")
+banking
+Commercial
+banking
+Commercial
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+THB23,711 million
+THB20,132 million
+97.86
+97.70
+97.86
+ICBC (London) PLC ("ICBC London")
+Real202 million
+(Almaty) Joint Stock Company
+Almaty, Kazakhstan
+460
+At 1 January 2013
+Total
+Bank
+Available-
+for-sale
+equity
+investments
+investments
+Total
+806,671
+803
+892,248
+1,164,855
+988,318
+1,079,340
+914,488
+Equity investments analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+772,866
+Unlisted
+1,263
+801
+Reversal
+Charge for the year
+142
+and 1 January 2014
+At 31 December 2013
+(21)
+(21)
+361
+(23)
+Disposals
+(282)
+(282)
+(295)
+(295)
+Reversal
+1,162
+(23)
+Disposals
+1,391
+3,040
+(i)
+(ii)
+When impairment of an available-for-sale investment measured at fair value occurs, any impairment loss recognised is
+recorded in the carrying amount directly. As at 31 December 2014, the available-for-sale financial assets measured at fair
+value include impaired debt securities whose carrying amount was RMB75 million (31 December 2013: RMB39 million), and
+individually impaired equity investments whose carrying amount was RMB593 million (31 December 2013: RMB470 million),
+with the accrual of impairment loss recognised in profit or loss for the year of RMB52 million (2013: accrual of impairment
+loss of RMB36 million) on available-for-sale debt securities; and the accrual of impairment loss recognised in profit or loss for
+the year of RMB111 million (2013: RMB66 million) on available-for-sale equity investments.
+Certain available-for-sale unlisted equity investments which do not have any quoted market prices and whose fair values
+cannot be measured reliably are stated at cost less any impairment losses. There is no active market for these investments
+and it is the Group's intention to dispose of them as opportunities arise. During the year, the carrying amount of these equity
+investments decreased by RMB244 million (2013: RMB31 million). The gain on disposal of available-for-sale equity investments
+is RMB213 million during the year (2013: RMB10 million).
+Annual Report 2014
+181
+Notes to Financial Statements
+142,902
+31 December 2014
+(d) Movements of allowance for impairment losses of held-to-maturity investments and
+available-for-sale equity investments measured at cost during the year are as follows:
+Group
+Available-
+Held-to-
+maturity
+for-sale
+equity
+Held-to-
+maturity
+investments
+(In RMB millions, unless otherwise stated)
+347
+1,280
+187,092
+1,965
+189,057
+2,088
+1,965
+1,280
+7,251
+3,827
+732
+11,682
+141,622
+6,262
+773
+2,053
+Market value of listed securities:
+Debt securities
+234,894
+Equity investments
+4,431
+239,325
+181,647
+2,435
+184,082
+2,697
+¥+8ལེ
+803
+41
+Hong Kong, the PRC
+Principal
+activities
+and operations
+by the Bank
+HKD34,142 million
+HKD23,592 million
+100
+100
+Commercial
+100
+2014
+2014
+2013
+2014
+Name
+registration
+Place of
+incorporation/
+Industrial and Commercial Bank of China
+Amount
+invested
+(Asia) Limited ("ICBC Asia")
+ICBC International Holdings Limited
+KZT8,933 million
+KZT8,933 million
+100
+10
+100
+100
+Industrial and Commercial Bank of China
+banking
+banking
+Investment
+HKD4,882 million Hong Kong, the PRC
+HKD4,882 million
+100
+80
+100
+100
+("ICBC International")
+issued share/
+paid-in capital
+Percentage of equity interest % Voting rights %
+Nominal value of
+Others
+(198)
+(195)
+(3)
+(198)
+(195)
+(31)
+62
+(31)
+41
+859
+801
+58
+945
+བྷཝ8
+(38)
+(38)
+62
+At 31 December 2014
+142
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+2013
+73,850
+80,419
+2014
+Bank
+ICBC
+182
+Unlisted investments, at cost
+28. INVESTMENTS IN SUBSIDIARIES
+630
+606
+24
+812
+670
+Commercial
+Sao Paulo, Brazil
+Industrial and Commercial Bank of China
+Industrial and Commercial Bank of China
+For the year ended 31 December 2014, the Group disposed of securities classified as held-to-maturity with a total carrying
+amount of RMB16,370 million (31 December 2013: RMB898 million) prior to their maturity. The carrying amount of held-
+to-maturity securities sold accounted for 0.62% (31 December 2013: 0.03%) of the total amount of the Group's held-to-
+maturity investments.
+180
+ICBC
+(c) Available-for-sale financial assets
+Available-for-sale financial assets comprise the following:
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Group
+Bank
+842,066
+2014
+2014
+2013
+Debt securities, at fair value (i)
+1,164,855
+988,318
+1,079,340
+914,488
+Other debt instruments, at fair value
+11,751
+6,220
+2013
+8,079
+855,514
+844,581
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+Group
+Bank
+2014
+2013
+2014
+2013
+11,477
+Market value of listed debt securities
+1,167
+863,914
+843,414
+1,690,999
+1,779,819
+2,566,390
+2,624,400
+854,631
+1,693,463
+2,548,977
+842,066
+1,782,312
+2,624,378
+875,391
+883
+Analysed into:
+Equity investments:
+At cost (ii)
+1,090,116
+916,541
+Debt securities analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+23,843
+14,954
+11,701
+4,981
+1,000,800
+211,051
+175,391
+136,641
+77,871
+76,606
+Gross amounts of net assets of the associate attribute to the parent company
+Reconciled to the Group's interests in the associate
+3,742
+5,061
+Dividends received from the associate
+13,717
+166,693
+At fair value (i)
+1,188,288
+(606)
+Debt for equity swaps
+Others
+10,889
+5,461
+1,965
+1,370
+793
+801
+732
+683
+(801)
+1,061
+1,061
+1,209
+402
+395
+277
+275
+Less: Allowance for impairment losses of
+equity investments, at cost
+(670)
+(803)
+1,209
+2,624,378
+2,548,977
+(58)
+3,958,201
+3,861,326
+(a) Receivables
+The receivables are stated at amortised cost and comprise the following:
+Group
+Bank
+2014
+2013
+2014
+2013
+3,949,688
+Huarong bonds
+146,046
+112,128
+146,046
+Special government bond
+Others
+(ii)
+85,000
+85,000
+85,000
+85,000
+(iii)
+112,128
+134,603
+4,086,409
+1,090,116
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Group
+2014
+Bank
+2013
+2014
+Receivables
+(a)
+331,731
+916,541
+324,488
+Held-to-maturity investments
+(b)
+2,566,390
+2,624,400
+2,548,977
+2013
+320,407
+2,624,378
+Available-for-sale financial assets
+(c)
+1,188,288
+1,000,800
+319,108
+93,442
+121,980
+89,361
+Others include government, financial and corporate bonds, asset management plans with fixed or determined payments. They
+will mature from February 2015 to July 2027 and bear interest rates ranging from 3.35% to 8.60% per annum. During the
+reporting period, the amounts which have been matured have been repaid without overdue history.
+Annual Report 2014
+179
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(b) Held-to-maturity investments
+Held-to-maturity investments are stated at amortised cost and comprise the following:
+Group
+Bank
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by the
+MOF to the Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+2014
+2014
+2013
+Debt securities
+2,566,532
+Less: Allowance for impairment losses
+(142)
+2,566,390
+2,624,542
+(142)
+2,624,400
+2,549,001
+(24)
+2,624,436
+2013
+The Huarong bonds are a series of long term bonds issued by China Huarong Asset Management Corporation ("Huarong") in
+the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the issuance
+of the bonds were used to purchase non-performing loans of the Bank. The bonds are non-negotiable, with a tenure of
+10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank received a notice from the Ministry of
+Finance of the People's Republic of China (the "MOF") that the maturity dates of the Huarong bonds were extended for
+another ten years and the interest rate remains unchanged. Additionally, the MOF will continue providing funding in support
+of the repayment of the principal and interest of the bonds. As at 31 December 2014, the Bank received early repayments
+amounting to RMB200,868 million accumulated.
+(iii)
+(ii)
+331,731
+324,488
+319,108
+320,407
+Analysed into:
+Listed outside Hong Kong
+Unlisted
+Group
+Bank
+2014
+2013
+2014
+2013
+23,720
+23,720
+308,011
+324,488
+295,388
+320,407
+331,731
+324,488
+319,108
+320,407
+(i)
+10,416
+Total comprehensive income
+3,798
+187
+2014
+2013
+20.09
+Place of
+incorporation/
+31 December
+Voting
+rights %
+34,243
+34,242
+2013
+2014
+Bank
+registration
+20.08
+31 December 31 December
+Percentage of
+equity interest %
+Standard Bank Group Limited
+("Standard Bank") (i)
+Name
+(i) Particulars of the Group's only material associate is as follows:
+(a) Interest in associates
+Shares listed outside Hong Kong, at cost
+28,515
+28,919
+(348)
+2014
+(348)
+Principal
+activities
+Johannesburg,
+985,554
+1,021,036
+Other comprehensive income
+Profit from continuing operations
+Revenue
+Net assets
+Liabilities
+Assets
+Gross amounts of the associate
+2013
+20.08
+2014
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+ICBC
+184
+The market value of the Group's investment in Standard Bank amounts to RMB25,019 million as at 31 December 2014 (31
+December 2013: RMB24,016 million).
+(i) Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the
+Group to widen its customer base in Africa.
+banking
+Republic of
+South Africa
+Commercial
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts in the Group's consolidated financial statements:
+Less: Allowance for impairment losses
+28,863
+29,267
+Notes to Financial Statements
+183
+Annual Report 2014
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+*
+Commercial
+banking
+Mexico City, Mexico
+MXN664 million
+MXN664 million
+100
+31 December 2014
+100
+("ICBC New Zealand")
+banking
+banking
+Commercial
+Auckland,
+New Zealand
+(New Zealand) Limited
+NZD60.38 million
+NZD60.38 million
+100
+100
+100
+Industrial and Commercial Bank of China
+(Mexico) Limited
+(In RMB millions, unless otherwise stated)
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+12,313
+12,313
+16,550
+16,954
+Goodwill
+Share of net assets
+2013
+2014
+Group
+28,515
+28,919
+658
+1,914
+27,857
+27,005
+2013
+2014
+Group
+흐흐
+Interest in joint ventures
+Interest in associates
+Investment in associate and joint ventures comprise the following:
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+934,306
+banking
+Commercial
+and investment
+894,821
+90,733
+9,919
+10,229
+44,931
+48,112
+86,730
+RMB200 million
+The economic new normal gave birth to a financial new normal. Last year, in the context of greater-than-expected difficulties
+and challenges, we achieved better than expected operating results and managed to maintain a generally healthy and stable
+development trend. Meanwhile, our operation and development entered a new normal with new features emerging in
+terms of profit growth, asset quality control, business development, and operational transformation. In 2014, we realized
+a net profit of RMB276.3 billion (or USD44.5 billion), up 5.1%. Although the profit growth rate fell to the one-digit level
+for the first time in recent years, it should be noted that this growth was based on a higher level and greater size, which
+meant that every percentage point of growth contained higher value. The net profit of 2014 alone was equal to the total
+sum of profit of the eight years since 2000, or that of the three years following 2005 after the Bank became a joint-stock
+company. The enormous financial strength of ICBC, the world's largest bank in terms of net profit, constituted an important
+ground for absorbing and mitigating risks, supporting innovative transformation, and accumulating new growth energy.
+What's more valuable is that the constitution and structure of our profit growth are undergoing good qualitative changes.
+For instance, the upgrading and efficiency increase of traditional business and the innovative development of emerging
+business constitute "hybrid power" and "multiple supporting points" for profit growth. In particular, we seized favorable
+opportunities brought by increased consumer spending and diversified consumer demand, a widening investment field
+for market players, accelerated business merger and acquisition etc., and strived to build mega retail banking, mega asset
+management, and mega investment banking into new engines for profit growth. In 2014, our total financial assets from
+personal customers exceeded RMB10 trillion, which led the industry. Our retail banking business made a contribution of
+40%; asset management, investment banking and other businesses also maintained an industry-leading position. Taking
+another example, the accelerated optimization and structural adjustment of existing credit business brought new power
+and space for our business development and profit growth. To make further good and flexible use of these resources, we
+focused on increasing the revolving rate instead of the growth rate, which could not only enhance the effectiveness of
+serving the real economy, but also create inexhaustible value. To give another example, we deepened our transformation
+into less asset-intensive and less capital-intensive operations to further balance and coordinate profit growth and capital
+support. Last year, we issued credit asset-backed securities on the inter-bank market, and maintained a relatively satisfactory
+capital adequacy ratio (CAR) by employing various methods such as promotion of capital-saving development, strict control
+of risk asset growth, and multi-channel capital replenishment. Our CAR, tier 1 CAR and core tier 1 CAR reached 14.53%,
+12.19%, and 11.92%, up 141BP, 162BP, and 135BP from the previous year, respectively, and outperformed regulatory
+requirements.
+15
+20
+25
+30
+%
+YoY growth rate of
+RMB Toans (right axis)
+Data source: PBC.
+Monthly growth of
+RMB loans (left axis)
+-
+Movements of Interest Rate in Domestic
+0
+6,000
+9,000
+12,000
+15,000
+Unit: RMB100 million
+RMB Loan Growth of Domestic
+Financial Institutions since 2013
+Discussion and Analysis
+17
+Annual Report 2014
+3,000
+Inter-bank Market since 2013
+Unit: %
+8
+Chairman's Statement
+Chairman Jiang Jianqing
+Annual Report 2014
+9
+ICBC
+18
+Looking into 2015, though favorable factors such as the economic recovery in the US, drop of energy price and emergence
+of new technique and new industries are expected to bring new momentum to economic growth, it is difficult for the global
+economy to put an end to weak growth and high unemployment in a short term, and the international financial market will
+continue the high volatility triggered by strong US dollar and low oil price. In the medium term the international economic
+and financial development will be characterized by increasingly differentiated economic growth in the world, monetary
+policy differentiation of major economies, exacerbation of geopolitical turmoil and drastic fluctuation of commodity
+prices. The Chinese Government will continue to pursue a proactive fiscal policy and prudent monetary policy. China will
+implement three major strategies. One Belt and One Road, coordinated development for the Beijing-Tianjin-Hebei region,
+and Yangtze Economic Belt, and make efforts to promote the "Going Global" of infrastructure production capacity and
+construction of key city clusters. China will further expand the pilot scope and fields of changing business tax to value-
+added tax, and successively launch the measures such as implementation of the new budget law, trial implementation of
+three-year balanced budgets and reform in transfer payment rules. China will actively promote the government and social
+capital cooperation (PPP) model, and exploit new areas for private capital in order to channel more funds into key projects
+related to the people's livelihood and technological innovation fields. It will speed up state-owned enterprise reform and
+further streamline administration and delegate powers. It will maintain the reasonable growth of monetary credits and
+social financing scale, improve and upgrade financing and credit structure and increase the proportion of direct financing. In
+addition, it will also push forward the interest rate liberalization and the reform in RMB exchange rate formation mechanism,
+deepen financial institution reform, strengthen macro prudent management and enhance the financial operation efficiency
+and capability of serving the real economy.
+Asset scale of the banking industry grew steadily. At the end of 2014, the total assets of banking financial institutions
+(corporate) were RMB172.34 trillion, representing an increase of 13.87%. The balance of NPLs of commercial banks reached
+RMB842.6 billion; NPL ratio was 1.25%; allowance to NPL was 232.06%; core tier 1 capital adequacy ratio (CAR), tier 1 CAR
+and CAR were 10.56%, 10.76% and 13.18% respectively.
+at inter-bank
+borrowing market
+Monthly weighted
+average interest rate
+Monthly weighted
+average interest rate
+of collateralized repo
+Data source: PBC.
+13
+3
+5
+4
+10
+10
+5
+6
+7
+Money supply maintained stable growth in 2014. The M2 balance was RMB122.8 trillion, representing an increase of 12.2%.
+The outstanding RMB loans reached RMB81.7 trillion, an increase of 13.6%. The balance of RMB deposits was RMB113.9
+trillion, up 9.1%. The social financing scale was RMB16.5 trillion. The Shanghai Composite Index and the Shenzhen
+Component Index rose by 52.9% and 35.6% respectively. The capitalization of the free float stocks on the Shanghai and
+Shenzhen stock markets increased by 58.1%. The accumulative issuance amount of bonds (including central bank notes) in
+the bond market reached RMB10.98 trillion, representing an increase of RMB2.12 trillion. The central parity of RMB against
+the US dollar was RMB6.1190, representing a depreciation of 0.36% from the end of the previous year. The government
+bond yields moved downward on the whole in the inter-bank market.
+In the past year, the global economy experienced a weak recovery, with diverging trends in major economies. As China's
+economic development entered a new normal, transformation and upgrading became the main theme of the economy,
+which brought about positive influences as well as many difficulties and challenges. Profound changes took place in the
+financial ecological environment and the operating mechanism. Financial regulation became increasingly strict, interest rates
+and exchange rates liberalization sped up, financial disintermediation accelerated, and the emergence of Internet-based
+finance rose swiftly to prominence, which brought a profound impact on and new opportunities for banks' operations and
+development.
+PBC continued to follow a prudent monetary policy. In response to the economic downturn pressure and slowdown of CPI
+rise, PBC took the following actions with great composure: it cut reserve requirement ratio for targeted institutions twice
+with a view to supporting "Sannong" (agriculture, farmers and rural areas) and commercial banks with a high proportion of
+loans to small and micro enterprises; it guided the long and medium-term interest rates innovatively using the medium-term
+lending facility (MLF) and pledged supplementary lending (PSL); it also made a breakthrough in interest rate liberalization
+reform, increasing the upper limit of RMB deposit rate band to 1.2 times of the benchmark interest rates from originally 1.1
+times; besides, it reduced the foreign exchange intervention significantly. CBRC adjusted the loan-to-deposit ratio calculation
+criteria, improved regulatory indicators regarding deposits and loans of commercial banks and enhanced commercial banks'
+lending capacity. It approved the establishment of several private banks. It also further strengthened the management of
+deposit deviation of banks and promoted the smooth operation of commercial banks.
+In 2014, the global economy struggled to grow slowly, but the instability and imbalance of the recovery remained
+conspicuous. Different from other developed economies, the US maintained sound momentum of growth. European
+economy recovered slightly, but its deflation risk escalated. Japanese economy tended to decline, with its deflation
+still lingering. Emerging markets' economic growth continued to slow down while capital flight deteriorated. In the
+monetary markets, US dollar alone remained strong, while Euro, pound, yen and currencies of emerging markets generally
+depreciated. The stock markets of the US, Europe and Japan saw gains, and the stock markets of emerging economies
+generally fell. As the international oil price plummeted, international gold price also remained low. The yields of treasury
+bonds of developed economies decreased, and those of emerging markets went up slightly. The liquidity of US dollar was
+tightened, and that of Hong Kong dollar was relatively loose.
+First, profit growth relied more on multi-source drive. We conquered many difficulties such as narrowing interest spread as
+a result of interest rate liberalization, drainage of traditional business caused by financial disintermediation and increasing
+market competition, and increasing loss of financial resources due to rebounding NPLs, and actively explored new sources
+of profit growth by means of transformation and innovation. Our net profit for the year reached RMB276.3 billion, up 5.1%
+from the previous year; basic earnings per share went up RMB0.03 to RMB0.78. From the perspective of income sources,
+we generated a net interest income of RMB493.5 billion, up 11.3%, through optimizing asset and liability structure and
+increasing capital operation efficiency; net interest margin (NIM) increased by 9BP to 2.66%; through vigorously developing
+asset management, investment banking, consumer finance, and other innovative businesses, we realized fee and commission
+income of RMB146.7 billion, representing a growth of 9.0%. Our overseas institutions and comprehensive subsidiaries
+earned a net profit of RMB18.5 billion, up 34.2% from the previous year, becoming an important new profit growth pole for
+the Group.
+In 2014, facing complex domestic and overseas economic and financial situations, we adapted and made active efforts in
+the areas of profit growth, structure optimization, operational transformation, reform innovation, and risk management,
+maintaining healthy and steady development under the economic new normal and bringing to an end the first ten-year
+development outline and the third three-year development planning after our stock restructuring. There are five distinctive
+features of our development and business performance in 2014:
+President's Statement
+ICBC
+President Yi Huiman
+12
+President's Statement
+11
+Annual Report 2014
+Second, we focused more on serving the real economy in business development. We coordinated credit increment and
+existing credit and the management of credit financing and non-credit financing, and we boosted the transformation,
+upgrading, and development of the real economy through diversified financial services. In terms of credit financing, we
+adhered to the overall principle of "utilizing increments, revitalizing existing credit, optimizing structure, and improving
+quality" to proactively improve our credit business operations, which not only optimized the credit structure and marginal
+benefits, but also promoted the transformation, upgrading and enhancement of quality and efficiency of the real economy.
+Newly increased loans and relending of recovered loans mainly went to key economic development fields as well as new
+growth points and growth belts. Our domestic branches saw RMB927.3 billion worth of newly increased loans in both
+domestic and foreign currencies, up RMB34.9 billion or 10.1% on a year-on-year basis; they cumulatively extended loans
+of RMB8.98 trillion, 9.6 times the size of newly increased loans. During the year, RMB910.2 billon worth of project loans
+were granted, representing an increase of RMB166.4 billion year on year; RMB271.85 billion of newly increased loans went
+to the advanced manufacturing, modern services, cultural industry, and strategic emerging industries that represented
+the orientation of the industrial restructuring and optimization, accounting for 67% of the increment of corporate loans;
+residential mortgages, personal consumption loans, and credit card overdrafts increased by RMB346.0 billion, or 14.6%.
+In terms of non-credit financing, we actively adapted ourselves to the increasing trend of enterprises' demands for direct
+investment and financing, production capacity integration, merger and acquisition, and reorganization in economic
+transformation and upgrading, and utilized a combination of "commercial banking + investment banking" and "on-balance-
+sheet + off-balance-sheet" to vigorously develop bond underwriting, loan syndication, merger and acquisition advisory, etc.
+Debt financing instruments underwritten by us as the lead underwriter amounted to RMB470.0 billion, ranking No. 1 in the
+industry; the contractual amount of syndicated loans where we acted as the lead bank reached RMB46.7 billion, and we
+became the No. 1 lead bank of syndicated loans in Asia Pacific; 319 investment banking merger and acquisition advisory
+projects were completed, involving a transaction value of over RMB140.0 billion and increasing by nearly 60%, occupying
+the first position in Asia Pacific in terms of transaction volume.
+26 March 2015
+3414
+In the past year, all our enterprising efforts, whether in long-term construction or in our fearless exploration, have become
+more visible as we progress. Looking into the future, we see new conflicts and new challenges under the new normal, but
+we also see new development opportunities. We firmly believe that challenges are everywhere, thus, we should be prepared
+anytime anywhere, as opportunities always come hand in hand with challenges, and opportunities only favor those who are
+prepared. We are prepared and will strive to be even better prepared.
+Internationalized development is another highlight of our operational transformation. The internationalized operation
+pattern has basically taken shape, with a network of 338 overseas institutions covering 41 countries and regions, as well
+as another 20 African countries through strategic equity participation in the Standard Bank of South Africa. We have the
+widest coverage of overseas institutions among Chinese banks. In 2014, our overseas institutions realized a net profit of
+RMB15.1 billion (or USD2.44 billion), up 35.6%, and boosting the Group's profit growth by 1.4 percentage points. If our
+overseas institutions were regarded as an independent banking entity, it could be one of the world's top 100 banks in terms
+of scale and profitability. Our overseas institutions in Singapore, Luxembourg, Qatar, Canada, and Thailand have obtained
+the qualification of RMB clearing banks, making ICBC the first domestic financial institution that has branches with capacity
+of RMB clearing banks in Asia, Europe, and the Americas, the clearing business volume of our overseas RMB clearing banks
+has cumulatively exceeded RMB37 trillion (or USD5.96 trillion), the largest RMB business has officially become a unique
+advantage of our internationalized development. Moreover, we have completed the closing of our acquisition of 60%
+equity in Standard Bank Limited, the first acquisition of an institution engaged in commodity, capital, and money market
+trading in the history of Chinese banks. Under the macro context of China's new round of higher-level opening up and
+implementation of the "One Belt and One Road" strategy, we will set higher goals, accelerate the deepening development
+of our internationalized operations, and emphasize the improvement of localized operations of our overseas institutions
+and global service capability in a bid to make a contribution to China's economic integration into the world and the global
+economic recovery and development.
+experience, commercial banks have their own competitiveness beyond the reach of young Internet enterprises, such as
+a rich risk management culture and practical experiences accumulated over the years, and capability of both online and
+offline services. Banks have always been the most active force for innovation. Thus, the real challenge is not competitors
+from other industries but whether we can ground the innovation-oriented culture and embrace the new trends of scientific
+and technological development and financial industry reform with an open-minded and entrepreneurial attitude. This is
+based on the practical and strategic considerations that we, while focusing on the essence of finance, actively employed
+the Internet mentality and techniques to innovate in financial services and operational management, so as to gain a first-
+mover advantage in Internet-based finance and promote intelligent growth under the new normal. At present, over 86%
+of our transactions are completed through e-channels, mainly Internet banking, and the number of E-banking customers
+reached 460 million, including 150 million mobile banking customers. We have initially set up an Internet-based finance
+system integrating payment, financing, trading, business, and information, and capable of online-offline interaction; a group
+of new Internet-based finance platforms and products have been successively launched in the market, presenting a booming
+scenario of wide sowing and continuous harvesting. For instance, e-mall platform, an e-commerce platform launched at the
+beginning of last year, entered into the list of domestic front-rank e-commerce platforms in terms of transaction volume.
+The new-type payment product "ICBC e Payment", featuring small amounts and efficiency, has over 41.00 million users and
+boasts an industry-leading capability of simultaneous transaction processing per second. Moreover, the newly developed
+"Easy Loan", a kind of small-amount consumer loan product based on consumers' online or offline direct consumption,
+shows robust development momentum. The online revolving loan product, which is designed to meet short-term, frequent,
+and urgent financing needs of small and micro enterprises and allows enterprises to withdraw money and make repayments
+via the Internet, has a balance of close to RMB300.0 billion, and is the Internet financing product with the single largest
+amount in China. Quick moves are essential to innovating Internet-based finance. At present, we are speeding up the
+upgrading of Internet-based finance from the innovation of individual products to innovation of the overall service model,
+building a development structure for Internet-based finance featuring abundant and quality products, active customer
+trading, online-offline interaction, and comprehensive services and operations, and trying to imprint a clear "e-ICBC" mark
+on the game of Internet-based finance and to cover a bigger customer group by universal finance with lower costs, higher
+efficiency, and better customer experience.
+Chairman's Statement
+ICBC
+10
+At present, Internet-based finance is profoundly changing the operating mode, decisive factors, and competitive landscape
+of traditional finance. Compared with Internet enterprises' advantages in operation development and sensitivity to customer
+The new normal also brought new risk control challenges. In the course of de-production capacity, de-inventory and de-
+leveraging readjustment to the real economy, some enterprises suffer production or operational difficulties, with a higher
+frequency of market entry and exit. Economic transformation and industrial structural adjustments will no doubt cause some
+non-performing loans (NPLs). We took extraordinary measures to control and resolve NPLs and enhanced the predictability
+of risk control and the stability of asset quality under the economic new normal by means of innovative managerial models.
+We set up a credit risk monitoring center in the Head Office to strengthen dynamic monitoring and real-time early warning
+of risks through combining our risk management experiences with big data technologies. During the reporting period, we
+conducted risk screening on about half of the credit assets and made prompt rectification of financing with potential risk;
+at present, we are further expanding the scope of risk screening to every product, every customer, and the whole process.
+Risk-oriented credit base management was consolidated to highlight risk prevention and control in key fields such as local
+government financing vehicles (LGFVs), real estate development, industries with excessive capacity and commodity financing.
+Both the Head Office and branches built up specialized teams and applied innovative means such as investment banking to
+increase the efficiency and effectiveness of NPL disposal. In 2014, our NPL ratio climbed slightly 0.19 percentage points to
+1.13%, but was still staying at a lower level among large international banks. We attached great importance to resolving
+NPLs in business development and took enhancing quality and efficiency of the real economy as the basis for improving the
+quality and status of our credit business and stabilizing our asset quality. Oriented towards serving effective financial service
+demand and seizing strategic opportunities under the economic new normal, we actively supported major projects as well
+as advantageous and emerging industries in economic adjustment and upgrading, and we backed key fields and weak spots
+such as small and micro enterprises, personal consumption, and "Sannong" (agriculture, farmers and rural areas) in a bid
+to better nourish the real economy with financial services and to improve our quality structure and foundation in virtuous
+interactions with the real economy.
+Chairman: Jiang Jianqing
+Third, our operational transformation focused more on breakthroughs in key business fields. Capitalizing on the new trends
+of growing residents' wealth and diversified configurations of social financial assets, we made great efforts to implement
+mega retail banking and mega asset management strategies. The total amount of financial assets of personal customers
+exceeded RMB10 trillion, leading the industry; over 660 million bank cards have been issued with a transaction volume of
+RMB7.5 trillion, of which, over 100 million were credit cards, making ICBC one of the world's top three credit card issuers;
+the number of private banking customers totaled 40,000, and the scale of assets under management grew by 35.9%; the
+balance of wealth management products surpassed RMB1.9 trillion, consolidating our position as the largest banking asset
+custodian in Mainland China; the scale of asset custody reached RMB5.8 trillion and pension funds in custody approximated
+RMB70.0 billion, both maintaining the first position in the industry; in spite of the fluctuating downward trend of the
+market, we actively adjusted the structure of the precious metal business, resulting in a growth rate of over 50% in new
+businesses such as precious metal financing and pledging. Internationalized operations were developed both in scope and
+in depth. In addition to refining our overseas institution layout, we paid particular attention to the building of overseas key
+product lines. We provided 24-hour non-stop services for the trading of foreign-currency bonds, foreign exchange purchase
+and sale, paper precious metals and bulk commodities on the global market, and the centralized trading volumes of overseas
+Annual Report 2014
+13
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Chairman's Statement
+ICBC
+16
+Chairman of the Board of Supervisors Zhao Lin
+15
+Annual Report 2014
+26 March 2015
+President: Yi Huiman
+R
+ہر
+2015 is an important year for us to adapt to the new normal and move into a new development stage, as well as being
+the starting year of a new round of ten-year development outline and three-year development planning. The Management,
+oriented to the development strategy and business target set by the Board of Directors, will strive to realize better quality,
+more efficient and more sustainable development, to offer better services to our customers, and to create more stable
+returns for our investors.
+In some ranking lists issued by international professional institutions in 2014, ICBC continued to maintain the global first
+position in terms of major indicators like tier 1 capital, profitability, operating income, and customer deposits. Due to our
+long-term stable operating performance, we were named as "Bank of the Year in China" and "Bank of the Year in Asia-
+Pacific" by several authoritative media outlets; we were named as "Global Bank of the Year" by The Banker, becoming the
+first Asian bank that has obtained this honor during the 15 years since this award came into being.
+Fifth, risk management was made to be more forward-looking and precise. In the face of the rebounding trend of the
+banking industry's NPLs as a result of the triple impacts of the change of the economic growth rate, the pain of economic
+restructuring and the assimilation of the earlier stimulus policies, we carried out two big projects of credit asset quality and
+credit base management, strengthened credit risk management, stepped up the pre-setting of lines of defense, adopted
+category-specific measures, addressed root causes, lowered existing loans, and controlled new loan extension, thereby
+maintaining generally stable asset quality and enhancing the overall credit business operation and management capability
+of our institutions at all levels. At the year end, the Group's NPL ratio was 1.13%, maintaining at a lower level among
+domestic and overseas peers. As for fields of wide public concern like the LGFVs, real estate development, and over-capacity
+industries, we adopted full-coverage financing management and conducted industrial restructuring and optimization, further
+bringing down the financing balance and controlling the NPL ratio at a low level. Innovative risk prevention and control
+techniques and means, the setting up of a credit risk monitoring center in the Group's Head Office and the employment of
+big data technologies to strengthen dynamic monitoring and real-time pre-warning of risks cumulatively mitigated potential
+risks of RMB375.2 billion. Internal control and case prevention were strengthened with increased efforts in screening and
+disposing of key risk points. Therefore, indicators such as loss rate of operational risk were kept below the target set by the
+regulator. We finished the first recovery and resolution plan with high quality according to the regulator's requirements for
+global systemically important banks. The enterprise risk management system was further refined, and the abilities of making
+pre-judgments on and dealing with market risk, liquidity risk and reputational risk were thoroughly enhanced. We were also
+among the first domestic banks that have obtained approval for adopting advanced capital management approaches, which
+helped boost our capital-saving development.
+President's Statement
+ICBC
+14
+Fourth, reform and innovation became more market-oriented and customer-oriented. We defined 2014 as the "Year of
+Reform". Oriented to the market and customer demands, we enhanced top design for reform and advanced reforms in
+eight fields including organizational reform and human resources reform, credit business flow optimization and credit
+review reform, and performance appraisal system optimization, which reinvigorated operating vitality and comprehensively
+enhanced management effectiveness. In particular, facing the surging wave of Internet-based finance innovation, we made
+great efforts to build the "e-ICBC" service and operation system and expedited integration of online and offline services. A
+comprehensive Internet-based finance structure has been built up, consisting of three online platforms - ― the e-commerce
+platform "e-mall platform", the direct distribution platform "direct banking platform" and the instant communication
+platform "social networking platform" along with three product lines - financing, payment and investment. We quickly
+established our advantageous position in Internet-based finance in the banking sector, and Internet-based finance business
+launched by us showed explosive growth momentum. For instance, "e-mall platform" targeting renowned merchants,
+renowned brands, and renowned goods has over 12.00 million registered customers and has a transaction volume of over
+RMB70.0 billion only one year after it was opened, joining the list of domestic front-rank e-commerce platforms. The small-
+amount and quick payment product "ICBC e Payment" has over 41.00 million users and a yearly transaction volume of
+over RMB50.0 billion. "Easy Loan" the small-amount consumer loan product based on residents' online and offline direct
+consumptions, also shows a robust development momentum with a balance of up to RMB152.7 billion. The online revolving
+loan product designed to address the short-term, frequent and urgent financing needs of small and micro enterprises,
+has cumulatively provided loans of RMB1.6 trillion for 69 thousand small and micro enterprises with a balance of close to
+RMB300.0 billion, and it is the Internet-based financing product with the single largest amount in China by far. In 2014, the
+business volume of self-service and electronic channels accounted for 86% of all business volume. Continuous efforts were
+made to advance the operational transformation of banking outlets, carry out intelligent upgrading and optimization of
+marketing and service models of banking outlets in the IT-based construction initiative, and accelerate the new 020 service
+model combining online appointments and offline service rendering, resulting in an improvement in operating efficiency,
+competitiveness, and service quality of our outlets. To meet the needs of the IT-based construction initiative, we built up
+teams of data analysts and professional analysts covering all the main business lines, which were responsible for supporting
+marketing, risk control, and operational decision making through mining and analyzing all sorts of business information and
+data. In 2014, our Shanghai Secondary Data Center was officially put into operation, forming the highest-level deployment
+for production, operation and disaster recovery in the three centers in Beijing and Shanghai, and further consolidating our
+advantages in IT infrastructure.
+_
+foreign exchange spot, foreign-currency bonds, and derivatives multiplied six, seven and eight times, respectively. Our global
+cash management product line has been extended to nearly 70 countries and regions, and cooperative business relations
+have been established with over 4,300 corporate customers. Our global wealth management fund under private banking
+obtained approval from the Luxembourg Monetary Institute, turning ICBC into the first Chinese bank that had registered
+a private fund in a mainstream international fund market. With great attention paid to business cooperation between
+domestic and overseas institutions, we leverage on our domestic products, customers, and funds to support the high-level
+development of overseas institutions, and meanwhile, promoted domestic business development through the global services
+network built overseas. We supported a total of 121 "Going Global" projects like resources and energy introduction, high-
+end equipment export, export of advantageous product capacity, large project contracting etc., forging new advantages in
+serving economic globalization and China's new round of higher-level opening up. Tapping into our advantageous position
+as the biggest RMB business bank, we offered RMB business in all overseas institutions where the local regulator permitted,
+and have built up a global RMB clearing system covering 75 overseas countries and regions. In 2014, our cross-border RMB
+business volume amounted to RMB3.66 trillion, up 65.7% over the previous year. Comprehensive subsidiaries developed
+rapidly and played an increasing role in strategic synergy with the Group. ICBC Leasing has formed three financial leasing
+sections - "aviation, shipping and large-scale equipment", operating and managing total assets of RMB235.6 billion and
+consolidating the industry-leading position. ICBC Credit Suisse Asset Management managed public funds of over RMB250.0
+billion, jumping to the top three in the industry. ICBC-AXA realized premium income of RMB15.4 billion, representing an
+increase of nearly 50% and topping the rest of the bancassurance companies.
+President's Statement
+In 2014, in the face of the complicated international environments and the tough tasks of domestic development, reform
+and stability, China adhered to the guideline of making progress while ensuring stability; national economy showed a sound
+trend of smooth growth, structural upgrading, quality enhancement and improvement of the people's livelihood. China's
+gross domestic product (GDP) grew by 7.4% in 2014. China's consumer price index (CPI), total retail sales, fixed asset
+investment, industrial added value of above-scale enterprises and total imports and exports rose by 2.0%, 12.0%, 15.7%,
+8.3% and 2.3% respectively.
+Discussion and Analysis
+198
+Name
+(ii)
+(!!!)
+The Bank has the option to redeem all or part of the bonds at face value on 20 July 2019. If the Bank does not exercise this
+option, the annual coupon rate will increase by 300 bps thereafter.
+The Bank has the option to redeem all of the bonds on 14 September 2015 upon the approval of the relevant regulatory
+authorities.
+(iv) The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+(v)
+(vi)
+(vii)
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+(viii) The Bank has the option to redeem all of the bonds on 05 August 2019 upon the approval of the relevant regulatory
+authorities.
+(b)
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal
+amount with maturity due on 30 November 2020.
+On 4 November 2011, ICBC Asia issued subordinated notes with an aggregate nominal amount of RMB1,500 million,
+with a fixed interest rate of 6% per annum. The subordinated notes were issued at the price fixed at 100% of the
+nominal amount maturing on 4 November 2021.
+On 10 October 2013, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 4.5% per annum. The bond was issued at the price fixed at 99.463% of the nominal
+amount with maturity due on 10 October 2023.
+On 10 September 2014, ICBC Macau issued a subordinated bond with an aggregate nominal amount of USD320
+million, bearing a floating interest rate. The bond was issued at the price fixed at 99.298% of the nominal amount
+with maturity due on 10 September 2024.
+The above subordinated bonds and notes are all listed on The Singapore Exchange Securities Trading Limited and The
+Stock Exchange of Hong Kong Limited. ICBC Asia and ICBC Macau have not had any defaults of principal or interest or
+other breaches with respect to the subordinated bonds and notes during the year (2013: Nil).
+(2) Convertible bonds
+As approved by the CBRC and the China Securities Regulatory Commission, the Bank issued RMB25 billion A share
+convertible bonds on 31 August 2010.
+ICBC
+ICBC convertible bonds
+Issue date
+31 August 2010
+Issue
+price
+RMB100
+(i) The Bank has the option to redeem all or part of the bonds at face value on 6 September 2015. If the Bank does not exercise
+this option, the annual coupon rate will increase by 300 basis points ("bps") thereafter.
+Coupon rate
+Step-up
+interest rate
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+2014-08-04
+100
+5.80%
+2014-08-05
+2027-06-13
+2024-08-05
+2005-10-11
+2009-08-20
+2010-11-03
+2010-11-03
+2011-08-30
+2012-01-17
+2012-07-13
+2014-09-24
+13,000 million
+24,000 million
+(i)
+(ii)
+5,800 million
+(!!!)
+16,200 million
+(iv)
+38,000 million
+(v)
+50,000 million
+(vi)
+20,000 million
+(vii)
+20,000 million
+(viii)
+Annual Report 2014
+193
+31 December 2014
+14 ICBC 01 Bond
+Value date
+31 August 2010
+Balance as at 31 December 2010
+22,124
+2,985
+25,109
+Conversion
+(234)
+(31)
+(265)
+Accretion of interest
+718
+718
+Balance as at 31 December 2011
+22,608
+2,954
+25,562
+Conversion
+(1,916)
+(246)
+(2,162)
+Accretion of interest
+661
+661
+Balance as at 31 December 2012
+239
+Maturity date
+239
+24,870
+Circulation date
+31 August 2016 10 September 2010
+Issue amount
+RMB25 billion
+The convertible bonds have a term of six years. From the first year to the sixth year, the bonds pay an annual coupon at
+the rates of 0.5%, 0.7%, 0.9%, 1.1%, 1.4% and 1.8%, respectively. The conversion period of the bonds commenced on
+1 March 2011, which was the first trading day immediately following the expiry of the six-month period after the date of
+issuance of the convertible bonds, and ends on 31 August 2016, which is the maturity date of the bonds. Within five trading
+days after the maturity of the bonds, the Bank shall redeem all the outstanding convertible bonds which have not been
+converted into shares by then at 105% of the nominal value of these convertible bonds (including the interest last accrued).
+RMB15,463 million convertible bonds had been converted into shares from 1 March 2011 to 31 December 2014 (1 March
+2011 to 31 December 2013: RMB8,577 million).
+194
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+During the conversion period of the convertible bonds, if the closing prices of the A Shares of the Bank in at least 15 trading
+days out of 30 consecutive trading days are equal to or higher than 130% of the prevailing conversion price, the Bank
+shall have the right to redeem all or any part of the outstanding convertible bonds which have not been converted into the
+shares, at a price equal to the nominal value of the convertible bonds plus the interest accrued. When the nominal value
+of the balance of the outstanding convertible bonds is less than RMB30 million, the board of the Bank shall have the right
+to decide whether to redeem all the outstanding convertible bonds at a price equal to the nominal value plus the interest
+accrued.
+If, during the term of the convertible bonds, the closing prices of the A Shares of the Bank in any 15 trading days out of
+any 30 consecutive trading days are lower than 80% of the prevailing conversion price, the board of the Bank may propose
+a downward adjustment to the conversion price to the shareholders for their consideration and approval at a shareholders'
+general meeting.
+The initial conversion price was RMB4.20 per share. The conversion price is subject to adjustment, upon the occurrence
+of certain events which affect the share capital of the Bank, such as distribution of share dividend, capitalisation, issuance
+of new shares, rights issue or distribution of cash dividend. During the period from the date of issuance to 31 December
+2014, the conversion price was adjusted from RMB4.20 per share to RMB3.27 per share, as a result of the cash dividend
+distribution and rights issue of A shares and H shares.
+From 19 November 2014 to 30 December 2014, the closing prices of the A Shares of the Bank in at least 15 trading days out
+of 30 consecutive trading days were equal to or higher than RMB4.25 per share, which is 130% of the prevailing conversion
+price (RMB3.27 per share), and the Bank shall have the right to redeem all or any part of the outstanding convertible bonds
+which have not been converted into the shares, at a price equal to the nominal value of the convertible bonds plus the
+interest accrued. The board of the Bank had approved to early redeem all of the outstanding convertible bonds in advance.
+The early redemption of the convertible bond had got the approval from the China Banking Regulatory Commission.
+The convertible bonds issued have been split into the liability and equity components as follows:
+Nominal value of convertible bonds
+Direct transaction costs
+Liability
+component
+21,998
+(113)
+Equity
+component
+Total
+3,002
+25,000
+(17)
+(130)
+Balance as at the issuance date
+21,885
+2,985
+Accretion of interest
+2012-06-13
+4.99%
+100
+190,545
+187,024
+183,023
+Convertible bonds
+(2)
+9,485
+15,907
+9,485
+15,907
+Other debt securities issued by:
+(3)
+The Bank
+47,181
+21,048
+47,181
+21,551
+Subsidiaries
+26,262
+25,518
+73,443
+46,566
+47,181
+21,551
+196,662
+279,590
+7,522
+(1)(b)
+330,861
+221,489
+330,766
+221,187
+15,556,601
+14,620,825
+15,024,101
+14,201,528
+38. DEBT SECURITIES ISSUED
+Group
+Bank
+2014
+2013
+2014
+2013
+Subordinated bonds issued by:
+The Bank
+(1)(a)
+187,024
+183,023
+187,024
+183,023
+Subsidiaries
+9,638
+253,018
+243,690
+220,481
+3.90%
+2010-09-14
+2020-09-14
+10 ICBC 02 Bond
+2010-09-10
+100
+4.10%
+2010-09-14
+2025-09-14
+11 ICBC 01 Bond
+2011-06-29
+100
+5.56%
+2011-06-30
+2031-06-30
+11 ICBC 02 Bond
+2011-12-29
+100
+5.50%
+2011-12-30
+2026-12-30
+12 ICBC 01 Bond
+2012-06-11
+100
+2010-09-10
+10 ICBC 01 Bond
+2024-07-20
+As at 31 December 2014, the amount of debt securities issued due within one year was RMB28,886 million. (31 December
+2013: RMB29,731 million)
+(1) Subordinated bonds
+(a)
+As approved by the PBOC and the CBRC, the Bank issued callable subordinated bonds through open market bidding in
+2005, 2009, 2010, 2011, 2012 and 2014. These subordinated bonds were traded in the bond market among banks.
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds
+during the year (2013: Nil). The relevant information on these subordinated bonds is set out below:
+Issue
+price
+Name
+Issue date
+(RMB)
+Coupon
+rate
+Issue amount
+21,353
+05 ICBC 02 Bond
+100
+3.77%
+Value date
+2005-09-06
+Maturity date
+Circulation date
+(RMB) Notes
+2020-09-06
+09 ICBC 02 Bond
+100
+4.00%
+2009-07-20
+2005-08-19
+2,708
+24,061
+Conversion
+197
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+41. PREFERENCE SHARES
+(a) Preference shares outstanding at the end of the year
+Amount
+In original
+Financial instrument
+outstanding
+Issue date
+Accounting
+classification
+Dividend
+(million
+currency
+In RMB
+Conversion
+rate
+Issue price
+shares)
+million
+million
+Maturity
+condition Conversion
+Annual Report 2014
+Preference shares in:
+According to the "Announcement in relation to the Conversion of ICBC Convertible Bonds", the 250 million
+convertible bonds (with a nominal value of RMB100 each and an aggregate amount of RMB25 billion) issued by
+the Bank on 31 August 2010, can be converted into the Bank's A Shares from 1 March 2011. As at 31 December
+2014, a total of 154,633,710 convertible bonds were converted into A Shares of the Bank, resulting in an increase
+of 4,475,667,993 A Shares. In 2014, a total of 68,863,380 convertible bonds were converted into A shares of
+the Bank, resulting in an increase of 2,105,540,874 A Shares. The number of the Bank's A Shares amounted to
+266,700,169,270 at the end of the year.
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the H shares and A shares rank pari
+passu with each other in respect of dividends.
+Issued and fully paid:
+H shares of RMB1 each
+A shares of RMB1 each (i)
+Number
+of shares
+2014
+(millions)
+2013
+Nominal
+value
+Number
+of shares
+(millions)
+Nominal
+value
+86,795
+86,795
+86,795
+86,795
+266,700
+266,700
+264,595
+264,595
+353,495
+353,495
+351,390
+351,390
+(i)
+USD
+2014-12-10
+Equity
+Total
+307
+34,549
+Less: Issue fees
+121
+Book value
+34,428
+(b) Main Clauses
+(i)
+Dividend
+Fixed rate for a certain period (5 years for USD and RMB tranche and 7 years for EUR tranche) after issuance.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the fixed spread.
+The fixed spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+fixed spread will remain unchanged throughout the term of the preference shares.
+Dividends will be paid annually.
+(ii) Conditions to distribution of dividends
+The Bank could pay dividends while the Bank still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratio meets regulatory
+requirements. The Bank may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be
+passed.
+(iii) Dividend stopper
+If the Bank cancels all or part of the dividends to the preference shareholders, the Bank shall not make any dividend
+distribution to ordinary shareholders before the Bank pays the dividends for the current dividend period to the preference
+shareholders in full.
+(iv) Order of distribution and liquidation method
+The USD, EUR and RMB preference shareholders will rank equally for payment. The preference shareholders will be
+subordinated to the depositors, ordinary creditors, holders of subordinated debt, holders of convertible bonds, holders
+of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Bank, but will be senior to the ordinary
+shareholders.
+(v) Mandatory conversion trigger events
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Bank falling
+to 5.125% or below), the Bank shall have the right to convert all or part of the preference shares into H shares, in order to
+restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Bank
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Bank would become non-
+viable), the Bank shall have the right to convert all preference shares into H shares.
+No
+Mandatory
+None
+12,000
+6.00%
+20USD/Share
+147
+2,940
+17,991
+None
+Mandatory No
+EUR
+2014-12-10
+Equity
+6.00%
+40. SHARE CAPITAL
+15EUR/ Share
+600
+4,558 None
+Mandatory
+No
+RMB
+2014-12-10
+Equity
+6.00%
+100RMB/Share
+120
+12,000
+40
+Others
+As at 31 December 2014, the amount of other liabilities due within one year was RMB403,335million. (31 December 2013:
+RMB383,847 million)
+(!!)
+The Bank:
+(i)
+(ii)
+(iii)
+(iv)
+(v)
+(vi)
+Sydney Branch issued debt securities amounting to RMB4,452 million denominated in AUD, HKD and JPY. These
+securities were issued with maturities between 2015 and 2023 at fixed or floating interest rates. In 2014, Sydney
+Branch newly issued debt securities amounting to RMB7,998 million denominated in AUD, CHF, RMB, EUR, USD, HKD
+and JPY. These securities were issued with maturities between 2015 and 2024 at a fixed interest rate.
+In 2013, Singapore Branch issued debt securities amounting to RMB2,000 million with maturities in 2015 at a fixed
+interest rate. In 2014, Singapore branch issued debt securities amounting to RMB4,000 million with maturities
+between 2016 and 2021 at a fixed interest rate.
+In 2014, Tokyo Branch issued interest free commercial papers amounting to RMB2,380 million denominated in HKD,
+JPY and RMB. These commercial papers were issued at a discount with maturities in 2015.
+The Head Office issued debt securities in Hong Kong amounting to RMB3,495 million denominated in RMB with
+maturities between 2015 and 2019 at a fixed interest rate.
+The Head Office issued first to eighth edition interbank deposit and the unsettlement amount was RMB6,959 million
+with maturities in 2015.
+In 2013, Head Office issued debt securities in London amounting to RMB1,300 million and RMB700 million
+respectively denominated in RMB with maturities between 2016 and 2018 at a fixed interest rate.
+(vii) In 2014, New York Branch issued medium-term notes amounting to RMB13,914 million denominated in USD with
+maturities between 2017 and 2019 at fixed and floating interest rates.
+Subsidiaries:
+(i)
+ICBC Asia issued medium-term notes amounting to RMB9,414 million denominated in RMB, HKD and USD. The notes
+were issued at the price between 98.447% and 100% of the nominal amount with maturities between 2015 and
+2016. In 2014, ICBC Asia issued interbank deposit at a discount of RMB498 million with maturities in 2015.
+(ii) Skysea International Capital Management Limited ("Skysea International"), which is controlled by the Group, issued
+guaranteed notes of USD750 million with a fixed interest rate of 4.875%. The notes were guaranteed by Hong Kong
+Branch and were issued at the price fixed at 97.708% of the nominal amount with maturities due on 7 December
+2021 amounted to RMB4,494 million. By satisfying certain conditions, Skysea International has the option to redeem
+all of the notes at any time. The notes were listed on the Stock Exchange of Hong Kong Limited.
+(iv)
+(v)
+(vi)
+ICBC Thai issued debt securities amounting to RMB2,220 million denominated in THB with maturities between 2015
+and 2018 at a fixed interest rate. In 2014, ICBC Thai issued debt securities of RMB4,705 million denominated in THB
+with maturities between 2015 and 2019 at a fixed interest rate.
+In 2014, ICBC International issued fixed interest rate bonds amounting to RMB4,014 million denominated in USD with
+maturities in 2017.
+As at 31 December 2014, the Group's other debt securities issued mainly include:
+In 2014, ICBC New Zealand issued medium-term notes amounting to RMB243 million denominated in NZD with
+maturities in 2017 at fixed or floating interest rates.
+(3) Other debt securities issued
+31 December 2014
+(6,001)
+(748)
+(6,749)
+Accretion of interest
+555
+555
+Balance as at 31 December 2013
+15,907
+Conversion
+(6,829)
+1,960
+(1,572)
+17,867
+(8,401)
+Accretion of interest
+407
+407
+Balance as at 31 December 2014
+9,485
+388
+9,873
+Annual Report 2014
+195
+Notes to Financial Statements
+(In RMB millions, unless otherwise stated)
+In 2014, ICBC Indonesia issued fixed interest rate notes amounting to RMB250 million denominated in IDR with
+maturities between 2015 and 2017.
+(vii) In 2014, ICBC Argentina issued floating interest rate notes amounting to RMB424 million denominated in ARS with
+maturities between 2015 and 2016.
+196
+4,215
+4,798
+4,215
+Sundry tax payables
+11,612
+11,378
+11,870
+10,928
+Bank drafts
+2,409
+2,148
+2,161
+1,655
+Others
+77,428
+75,215
+43,507
+56,554
+464,690
+436,736
+409,618
+407,911
+(i) Except for the deferred discretionary bonuses for those employees under the deferred performance-based salary scheme
+4,798
+Early retirement benefits
+17,850
+19,679
+ICBC
+39. OTHER LIABILITIES
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Group
+Bank
+2014
+2013
+2014
+Interest payable
+pursuant to regulations of the PRC relevant authorities, the salaries, bonuses, allowances and subsidies payables were
+scheduled to be paid before 30 June 2015. There was no overdue payment for staff salaries, bonuses, allowances, subsidies
+payables as at 31 December 2014 (31 December 2013: Nil).
+242,433
+237,680
+2013
+209,129
+Settlement accounts
+104,972
+112,461
+89,923
+107,580
+Salaries, bonuses, allowances and
+subsidies payables (i)
+21,038
+18,742
+212,577
+3,841,987
+2009-07-16
+3,901,098
+25,022
+3,950,564
+(10,986)
+(1,110)
+(1,894)
+1,293
+(601)
+5,751
+697
+6,448
+(4,873)
+(259)
+(728)
+(5,860)
+28,139
+7,474
+(11,714)
+23,899
+Total
+Total
+At
+1 January
+2013
+5,743
+gains/(losses)
+recorded in
+profit or loss
+19,279
+income
+(In RMB millions, unless otherwise stated)
+Bank
+2014
+Deferred income tax assets:
+Allowance for impairment losses
+Change in fair value of available-for-sale
+financial assets
+Change in fair value of financial instruments at
+fair value through profit or loss
+Accrued staff costs
+Others
+2013
+Deferred income tax assets:
+Total losses
+Total
+At
+1 January
+2014
+gains/(losses)
+recorded in
+profit or loss
+recorded in
+other
+At
+comprehensive
+31 December
+2014
+31 December 2014
+gains/(losses)
+recorded in
+other
+comprehensive
+(2,168)
+8,163
+28,139
+The Group and the Bank did not have significant unrecognised deferred income tax assets or liabilities at the end of the
+reporting period.
+32. OTHER ASSETS
+Group
+Bank
+2014
+2013
+2014
+2013
+Interest receivable
+108,330
+98,475
+103,841
+94,825
+Precious metals
+95,950
+61,821
+95,885
+61,772
+Land use rights
+20,499
+22,144
+At
+(4,873)
+(543)
+31 December
+income
+2013
+Allowance for impairment losses
+19,235
+44
+19,279
+Change in fair value of available-for-sale
+financial assets
+1,692
+8,184
+9,876
+Change in fair value of financial instruments at
+fair value through profit or loss
+(406)
+(1,488)
+(1,894)
+Accrued staff costs
+5,932
+(181)
+5,751
+Others
+(4,309)
+(21)
+Notes to Financial Statements
+189
+Annual Report 2014
+(387)
+(1,487)
+(1,874)
+Accrued staff costs
+5,932
+(181)
+5,751
+Others
+(3,987)
+(456)
+32
+(4,411)
+22,789
+(2,073)
+8,144
+28,860
+Total
+gains/(losses)
+Total
+At
+gains/(losses)
+recorded
+in other
+At
+at fair value through profit or loss
+1 January
+Change in fair value of financial instruments
+8,112
+Group
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Total gains
+At 1 January
+2013
+Total
+gains/(losses)
+recorded in
+profit or loss
+recorded in
+other
+At
+comprehensive
+31 December
+income
+2013
+2013
+Deferred income tax assets:
+Allowance for impairment losses
+19,561
+51
+19,612
+Change in fair value of available-for-sale financial assets
+1,670
+9,782
+recorded in
+comprehensive
+31 December
+losses recorded
+in other
+comprehensive
+At
+31 December
+income
+2013
+Deferred income tax liabilities:
+Allowance for impairment losses
+(45)
+(45)
+Change in fair value of available-for-sale financial assets
+151
+(2)
+149
+Others
+446
+(101)
+(29)
+316
+552
+(101)
+(31)
+420
+Total
+gains/(losses)
+recorded in
+profit or loss
+2013
+2013
+1 January
+2014
+2014
+profit or loss
+income
+2014
+Deferred income tax liabilities:
+Allowance for impairment losses
+(45)
+(23)
+(68)
+Change in fair value of available-for-sale financial assets
+Others
+21,039
+149
+70
+316
+127
+6
+449
+420
+104
+(73)
+451
+Total
+At
+(79)
+20,429
+9,876
+Advance payments
+Repurchases (note 25(i))
+344,380
+281,060
+2014
+161,718
+2013
+63,754
+Cash received as collateral on
+securities lending
+36,577
+18,244
+380,957
+299,304
+161,718
+63,754
+Repurchases analysed by counterparty:
+Banks
+191,763
+83,928
+161,649
+62,756
+Other financial institutions
+152,617
+197,132
+2013
+69
+2014
+Group
+1,092,303
+876,896
+Money market takings:
+Banks and other financial institutions
+operating in Mainland China
+Banks and other financial institutions
+operating outside Mainland China
+136,819
+110,987
+39,674
+24,606
+295,644
+291,174
+261,303
+270,810
+432,463
+402,161
+300,977
+295,416
+1,539,239
+1,269,255
+1,393,280
+1,172,312
+35. REPURCHASE AGREEMENTS
+Repurchase agreements comprise repurchases of securities, bills, loans, and cash received as collateral on securities lending.
+Bank
+867,094
+998
+281,060
+Bank
+2014
+2013
+2014
+2013
+Demand deposits:
+Corporate customers
+4,134,828
+4,038,872
+4,026,374
+Personal customers
+3,153,817
+2,994,741
+3,115,187
+3,967,375
+2,964,012
+Time deposits:
+Corporate customers
+3,902,305
+3,464,625
+3,601,210
+3,206,967
+Personal customers
+4,034,790
+Group
+344,380
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+161,718
+63,754
+Repurchases analysed by collateral:
+Securities
+332,578
+271,512
+150,884
+55,507
+Bills
+Loans
+10,834
+8,259
+10,834
+8,247
+968
+344,380
+1,289
+281,060
+161,718
+63,754
+36. CERTIFICATES OF DEPOSIT
+Certificates of deposit were issued by Hong Kong Branch, Tokyo Branch, Singapore Branch, Luxembourg Branch, Seoul
+Branch, Frankfurt Branch, Doha Branch, New York Branch, Sydney Branch, Abu Dhabi Branch, Mumbai Branch, Dubai (DIFC)
+Branch, ICBC Asia, ICBC Macau, ICBC London and ICBC Argentina, and were recognised at amortised cost.
+20,952
+ICBC
+37. DUE TO CUSTOMERS
+31 December 2014
+1,106,776
+192
+148,548
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(i)
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash
+flow projections based on financial forecasts approved by management of the subsidiaries. The average growth rates are
+extrapolated using the estimated rates which do not exceed the long term average growth rate for the business in which the
+CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+As indicated by the impairment tests, goodwill arising from business combinations is not impaired and thus, no impairment
+loss was recognised.
+33. FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Group
+Bank
+2014
+2013
+Wealth management products
+(1)
+312,336
+349,634
+2014
+312,336
+2013
+349,634
+Structured deposits
+(2)(a)
+217,431
+141,925
+217,431
+141,790
+ICBC
+190
+268,170
+310,036
+23,501
+12,124
+30,417
+487
+936
+Settlement accounts
+95,014
+91,380
+79,474
+82,162
+Goodwill (i)
+Financial liabilities related to
+8,966
+Repossessed assets
+3,726
+1,926
+1,741
+Others
+11,492
+9,871
+6,443
+5,782
+356,101
+323,457
+8,528
+precious metals
+3,477
+53,227
+There were no significant changes in the credit spread of the Bank and therefore the amounts of changes in fair value of the
+financial liabilities that were attributable to changes in credit risk were considered not significant during the years presented
+and cumulatively as at 31 December 2014 and 31 December 2013. The changes in fair value of the financial liabilities were
+mainly attributable to changes in other market factors.
+Annual Report 2014
+191
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+34. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Group
+Bank
+2014
+2013
+2014
+2013
+Deposits:
+941,769
+832,325
+943,755
+853,395
+Banks and other financial institutions
+operating outside Mainland China
+165,007
+(2)(b)
+34,769
+The debt securities including notes issued by the Singapore Branch in 2012 and 2014 at fixed rates were classified as
+financial liabilities designated at fair value through profit or loss. The fair value of the debt securities is lower than the
+amount that the Group would be contractually required to pay to the holders of these debt securities upon maturity as
+at 31 December 2014 by RMB641 million (31 December 2013: RMB21 million lower).
+As at 31 December 2014, the fair value of the financial liabilities related to precious metals was approximately the same
+as the amount that the Group would be contractually required to pay to the holders (31 December 2013: approximately
+the same).
+Banks and other financial institutions
+operating in Mainland China
+(c)
+53,223
+59,527
+As at 31 December 2014, the fair value of structured deposits was higher than the amount that the Group would
+be contractually required to pay to the holders of these structured deposits upon maturity by RMB588 million (31
+December 2013: RMB306 million higher).
+59,524
+Debt securities
+(2)(c)
+6,227
+6,227
+1,811
+Other
+164
+163
+2,358
+589,385
+(a)
+Total
+The principal guaranteed wealth management products issued by the Group and the financial assets invested in by the
+aforementioned products form part of a group of financial instruments that are together managed on a fair value basis,
+and are classified as financial liabilities and financial assets designated at fair value through profit or loss, respectively. The
+fair value of the wealth management products was RMB1,531 million higher than the amount that the Group would be
+contractually required to pay to the holders of the wealth management products upon maturity as at 31 December 2014 (31
+December 2013: RMB869 million lower).
+(1)
+(b)
+(2)
+589,217
+553,607
+552,759
+Structured deposits, certain financial liabilities related to precious metals and debt securities have been matched with
+derivatives or precious metals as part of a documented risk management strategy to mitigate market risk, such as interest
+rate risk. An accounting mismatch would arise if these financial liabilities were accounted for at amortised cost, whereas the
+related derivatives or precious metals were measured at fair value with movements in the fair value taken through profit or
+loss. By designating these financial liabilities at fair value through profit or loss, the movement in their fair values is recorded
+in the statement of profit or loss.
+8,215
+9,065
+1,521
+1,521
+29,588
+2,213
+At the end of the reporting period, the Group and the Bank lease certain of its office properties under operating lease
+arrangements, and the total future minimum lease payments in respect of non-cancellable operating leases are as follows:
+(b) Operating lease commitments
+Operating lease commitments - Lessee
+Group
+Bank
+2014
+28,738
+2013
+2014
+2,197
+Contracted, but not provided for
+Group
+850
+ICBC
+48. COMMITMENTS AND CONTINGENT LIABILITIES
+2013
+(a) Capital commitments
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+676
+At the end of the reporting period, the Group and the Bank have capital commitments as follows:
+2014
+2013
+2014
+2013
+Authorised, but not contracted for
+850
+692
+Bank
+Within one year
+2014
+4,448
+(c) Credit commitments
+Group
+6,156
+2,993
+23,987
+10,745
+25,198
+Over five years
+7,755
+21,493
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+Annual Report 2014
+205
+204
+Notes to Financial Statements
+55,341
+5,210
+Over one year but within five years
+At the end of the reporting period, the Group leases certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+are as follows:
+4,799
+4,090
+Over one year but within five years
+Over five years
+12,389
+9,163
+11,533
+8,964
+Within one year
+580
+477
+2,073
+18,179
+16,044
+16,809
+15,127
+Operating lease commitments - Lessor
+2,433
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+20
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability. As at 31 December 2014,
+carrying amount of transferred assets that did not qualify for derecognition were RMB270 million (31 December 2013:
+RMB522 million) and carrying amount of their associated liabilities were RMB126 million (31 December 2013: RMB214
+million).
+2014
+2013
+Cash on hand
+Balances with central banks other than restricted deposits
+Nostro accounts with banks and other financial institutions with
+20
+88,714
+80,913
+Note
+20
+113,849
+original maturity of three months or less
+293,713
+221,474
+Placements with banks and other financial institutions with
+original maturity of three months or less
+Reverse repurchase agreements with original maturity of
+three months or less
+112,371
+245,148
+Analysis of balances of cash and cash equivalents
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2014 but matured
+before 31 December 2014 was RMB45,288 million.
+31 December 2014
+140,566
+517
+517
+219
+8,478
+140,566
+Notes to Financial Statements
+31 December 2014
+45. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+(In RMB millions, unless otherwise stated)
+(2) Structured entities sponsored by the Group which the Group did not consolidate but
+holds an interest in as at 31 December 2014
+The types of unconsolidated structured entities sponsored by the Group include investment funds and non-principal-
+guaranteed wealth management products. The nature and purpose of these structured entities are to generate fees from
+managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2014, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+As at 31 December 2014, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, was RMB1,454.84 billion and RMB590.39 billion
+respectively (31 December 2013: RMB847.50 billion and RMB226.86 billion respectively).
+(3) Unconsolidated structured entities sponsored by the Group during the year which the
+Group does not have an interest in as at 31 December 2014
+During the year of 2014, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB7,812 million. (2013: RMB10,541 million)
+During the year of 2014, the amount of income received from such category of investment funds was RMB17 million. (2013:
+the amount was not significant.)
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2014 but matured before 31 December 2014 was RMB2,308.47 billion. (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2013 but matured
+before 31 December 2013 was RMB2,330.93 billion.)
+The maximum exposures to loss in the above investment funds, wealth management products and segregated asset
+management plans are the fair value of the assets held by the Group at the reporting date. The maximum exposures to loss
+in the asset-backed securites are the amortised cost or fair value of the assets held by the Group at the reporting date in
+accordance with the line items of these assets recognised in the statement of financial positions.
+47. SHARE APPRECIATION RIGHTS PLAN
+282,479
+258,687
+liabilities
+Repurchase agreements
+1,998
+1,472
+Securities lending agreements
+13,361
+assets
+3,390
+17,443
+assets
+liabilities
+15,359
+1,472
+20,833
+2,145
+Securitisation transactions
+The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to
+structured entities which issue asset-backed securities to investors.
+As the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and it
+has retained control of them, those financial assets are recognised on the statement of financial position to the extent of
+the Group's continuing involvement. The extent of the Group's continuing involvement is the extent to which the Group is
+exposed to changes in the value of the transferred assets. As at 31 December 2014, loans with an original carrying amount
+of RMB9, 164 million (31 December 2013: RMB3,592 million) had been securitised by the Group under arrangements in
+which the Group retains a continuing involvement in such assets in the form of subordinated tranches. As at 31 December
+2014, the carrying amount of assets that the Group continues to recognise was RMB268 million (31 December 2013:
+RMB182 million).
+2,145
+254,318
+ssociated
+31 December 2013
+Carrying
+amount of
+transferred
+994,264
+957,402
+Annual Report 2014
+203
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Carrying
+amount of
+46. TRANSFERRED FINANCIAL ASSETS
+Repurchase transactions and securities lending transactions
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements. The
+counterparties are allowed to sell or repledge those securities sold under agreements to repurchase in the absence of default
+by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase or
+decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral. The Group
+has determined that it retains substantially all the risks and rewards of these securities and therefore has not derecognised
+them. In addition, it recognises a financial liability for cash received as collateral.
+The following table analyses the carrying amount of the abovementioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+31 December 2014
+Carrying
+amount of
+Carrying
+amount of
+transferred
+associated
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+(In RMB millions, unless otherwise stated)
+3.14 to 4.20
+Group
+Interest rate ranges during the year are as follows:
+Bond investments
+2014
+2013
+1,037,908
+1,015,396
+2014
+2013
+Redemption of the PRC government bonds
+Interest income on the PRC government bonds
+150,024
+123,113
+103,087
+29,323
+32,988
+%
+%
+2.25 to 6.34
+203,505
+0 to 6.34
+Subscription of the PRC government bonds
+The PRC government bonds and the special government bond
+2013
+865,931
+939,773
+865,492
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+50. ASSETS PLEDGED AS SECURITY
+Financial assets of the Group including securities, bills and loans have been pledged as security for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2014, the carrying value of the
+financial assets of the Group pledged as security amounted to approximately RMB194,448 million (31 December 2013:
+RMB64,358 million).
+Transactions during the year:
+51. FIDUCIARY ACTIVITIES
+52. RELATED PARTY DISCLOSURES
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+(a) Shareholders with significant influence
+(i)
+The MOF
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2014, the MOF directly owned approximately 34.88 % (31 December
+2013: approximately 35.09%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, including the subscription and redemption of government bonds issued by the MOF.
+Details of the material transactions are as follows:
+Balances at end of the year:
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+940,303
+Annual Report 2014
+Notes to Financial Statements
+2014
+2013
+20,821
+239
+16,506
+26
+19,387
+239
+11,763
+170
+2014
+ICBC
+2013
+677
+273
+216
+%
+%
+3.14 to 4.20
+6,220
+731
+207
+208
+Debt securities purchased
+31 December 2014
+(In RMB millions, unless otherwise stated)
+As at 31 December 2014, the Group holds a series of long term bonds issued by Huarong, which is under the control of
+the MOF, with an aggregate amount of RMB112,128 million (31 December 2013: RMB146,046 million). The details of the
+Huarong bonds are included in note 27.
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 52(g) "transactions with state-owned entities in the PRC".
+(ii) Huijin
+As at 31 December 2014, Central Huijin Investment Ltd ("Huijin") directly owned approximately 35.12% (31 December
+2013: approximately 35.33%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in the key state-owned financial institutions, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not engage in other business activities, and does not intervene in the day-to-day business operations of the key
+state-owned financial institutions it controls.
+As at 31 December 2014, the Huijin Bonds held by the Bank were of an aggregate face value of RMB21.63 billion (31
+December 2013: RMB21.63 billion), with terms ranging from 5 to 30 years and coupon rates ranging from 3.14% to 4.20%
+per annum. The Huijin Bonds are government-backed and the Bank's subscription of the Huijin Bonds was conducted in the
+ordinary course of business, in compliance with relevant regulatory requirements and the corporate governance of the Bank.
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the material transactions are as follows:
+Deposits
+Balances at end of the year:
+Interest receivable
+Deposits
+Interest payable
+Transactions during the year:
+Interest income on debt securities purchased
+Interest expense on deposits
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+2014
+(In RMB millions, unless otherwise stated)
+48,505
+72,480
+Usance letters of credit and other commitments
+334,838
+409,095
+327,832
+408,713
+88,669
+Loan commitments:
+235,664
+265,303
+99,245
+130,583
+584,362
+536,245
+531,827
+With an original maturity of under one year
+With an original maturity of one year or over
+Undrawn credit card limit
+470,595
+56,096
+320,312
+Bank
+Bank acceptances
+2014
+348,924
+2013
+327,048
+2014
+347,331
+2013
+325,147
+Guarantees issued:
+Sight letters of credit
+Financing letters of guarantees
+102,275
+86,357
+149,441
+Non-financing letters of guarantees
+274,186
+276,913
+314,375
+33,369
+Group
+474,684
+465,147
+As at 31 December 2013, the credit risk-weighted assets were calculated by weighted approach in accordance with
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by the CBRC.
+(d) Legal proceedings
+As at 31 December 2014, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB3,001 million (31 December 2013: RMB2,389 million).
+In the opinion of management, the Group and the Bank have made adequate allowance for any probable losses based on
+the current facts and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the
+financial position or operations of the Group and the Bank.
+(e) Redemption commitments of government bonds
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2014, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB90,874 million (31 December 2013: RMB87,982 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+As at 31 December 2014, Internal Ratings-Based approach was adopted to calculate the credit risk-weighted assets
+according to the scope approved by the CBRC, and others were calculated by weighted approach.
+(f) Underwriting obligations
+206
+ICBC
+49. DESIGNATED FUNDS AND LOANS
+Designated funds
+Designated loans
+Notes to Financial Statements
+31 December 2014
+As at 31 December 2014, the Group and the Bank had no unexpired securities underwriting obligations (31 December 2013:
+Nil).
+440,408
+894,779
+917,567
+432,465
+2,342,123
+2,445,956
+2,220,619
+2,309,736
+Credit risk-weighted assets of
+credit commitments(i)(ii)
+988,911
+(i)
+Group
+Bank
+2014
+2013
+2014
+2013
+1,014,045
+(ii)
+2,039
+2013
+Financial
+assets
+designated
+(d) Investment revaluation reserve
+The investment revaluation reserve records the fair value changes of available-for-sale financial assets.
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+(f) Cash flow hedge reserve
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(g) Other reserves
+Other reserves represent share of reserves of associates and joint ventures.
+ICBC
+200
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(h) Distributable profits
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+The general reserve balance of the Bank as at 31 December 2014 amounted to RMB218,078 million (2013: RMB199,916
+million), which has reached 1.5 % of the year end balance of the Bank's risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+(c) General reserve
+199
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+42. RESERVES
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+The movements in reserves and retained profits of the Bank during the year are set out below.
+(b) Surplus reserves
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 26 March 2015, an appropriation of 10% of the profit
+for the year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to the statutory surplus
+reserve, in the amount of RMB26,423 million (2013: RMB25,382 million) was approved.
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserve
+The Bank's overseas entities appropriate their profits to the surplus reserves in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(i) Statutory surplus reserve
+Reserves
+Investment
+Capital
+413,395
+352,978
+Profit for the year
+252,870
+Convertible bonds
+5,009
+5,009
+(4,080)
+Change in fair value of available-for-sale investments
+(24,632)
+(1,235)
+(24,632)
+(1,235)
+Dividend 2012 final (note 18)
+(83,565)
+Appropriation to surplus reserves (i)
+Foreign currency translation
+Annual Report 2014
+(338)
+187,187
+Surplus
+reserve
+reserves
+General
+reserve
+revaluation
+Foreign
+currency
+translation
+Cash flow
+hedge
+(4,509)
+Retained
+reserve
+reserve
+Total
+profits
+Balance as at 1 January 2013
+137,851
+97,284
+reserve
+other equity instruments
+Equity attribute to non-controlling interests of
+(2)
+147
+40
+120
+307
+In original currency (million)
+2,940
+600
+Amount (million shares)
+In RMB (million)
+4,558
+12,000
+12,000
+N/A
+34,549
+Decrease this year
+Amount (million shares)
+In original currency (million)
+17,991
+N/A
+Increase this year
+N/A
+0.01 to 3.30
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(vi) Redemption
+Under the premise of obtaining the approval of the CBRC and condition of redemption, the bank has right to inform foreign
+preference shareholders, registered persons and financial agents at least 30 days in advance but no more than 60 days,
+to redeem all or some of oversee preference shares in first call date and subsequent any dividend payment date. The first
+call date after issuance and subsequent any dividend payment date (redemption price is equal to issue price plus accrued
+dividend in current period).
+USD Preference Shares: the First Redemption Date is five years after issuance
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+RMB Preference Shares: the First Redemption Date is five years after issuance
+In RMB (million)
+(c) Changes in Preference shares outstanding
+USD
+Preference shares
+EUR
+RMB
+Total
+1 January 2014
+Amount (million shares)
+In original currency (million)
+Financial instrument outstanding
+Appropriation to general reserve
+In RMB (million)
+Amount (million shares)
+1.
+Total equity attribute to equity holders of the parent company
+(1) Equity attribute to ordinary equity holders of
+1,274,134
+1,530,859
+the parent company
+1,274,134
+1,496,431
+31 December 2014
+(2) Equity attribute to other equity holders of the parent company
+2.
+Total equity attribute to non-controlling interests
+4,329
+6,445
+(1) Equity attribute to non-controlling interests of ordinary shares
+4,329
+6,445
+34,428
+31 December 2014
+1 January 2014
+(e) Interests attribute to equity instruments' holder
+147
+40
+120
+307
+In original currency (million)
+In RMB (million)
+2,940
+17,991
+600
+Equity instrument
+12,000
+4,558
+12,000
+34,549
+(d) Dividends
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year.
+The Bank could pay dividends while the bank still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Bank are senior to the ordinary shareholders on the right to dividends.
+The Bank shall distribute dividends for the preference shares in cash, based on the total amount of the issued and
+outstanding preference shares on the corresponding times. Interest method of the preference shares of the Bank is once a
+year.
+N/A
+Others
+25,449
+12,729
+2,039
+2,039
+Wealth management products
+3,872
+3,872
+6,220
+6,220
+Investment funds
+Segregated asset management plans
+Trust plans
+139,194
+140,566
+140,566
+11,225
+11,225
+Asset-backed securities
+6,459
+139,194
+160,750
+exposure
+exposure
+3
+(36,629)
+Annual Report 2014
+201
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+44. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+amount
+(1) Structured entities sponsored by third party institutions in which the Group held an
+interest
+The following table sets out an analysis of the carrying amounts of interests held by the Group as at 31 December 2014 in
+the structured entities sponsored by third party institutions:
+Group
+31 December 2014
+Carrying
+Maximum
+31 December 2013
+Carrying
+Maximum
+amount
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+notes issued by these structured entities. Such structured entities include investment funds, wealth management products,
+segregated asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of notes to investors.
+32,567
+6,459
+160,750
+736
+Receivables
+3,672
+200
+139,004
+190
+11,225
+465
+465
+assets
+designated
+at fair value
+through
+profit or loss
+4,666
+8,338
+139,004
+12,943
+Held-to-
+maturity
+investments
+Group
+31 December 2013
+Available-for-sale
+financial assets
+1,328
+736
+149,561
+assets
+Available-
+149,561
+The following table sets out an analysis of the line items in the statement of financial position as at 31 December 2014 in
+which assets were recognised relating to the Group's interests in structured entities sponsored by third parties:
+Wealth management products
+Segregated asset management plans
+Trust plans
+Asset-backed securities
+Investment funds
+for-sale
+financial
+Wealth management products
+Asset-backed securities
+ICBC
+202
+Group
+31 December 2014
+Financial
+Held-to
+maturity
+investments
+Segregated asset management plan
+at fair value
+through
+profit or loss
+5
+(2)
+Less: Income tax effect
+5,572
+32,993
+32,993
+Change in fair value of available-for-sale investments
+Effective hedging portion of gains arising from
+cash flow hedging instruments
+Foreign currency translation
+5,572
+Dividend -2013 final (note 18)
+Appropriation to general reserve
+Balance as at 31 December 2014
+148,437
+44
+44
+(125)
+(125)
+Appropriation to surplus reserves (i)
+(91,960)
+263,201
+430,720
+5
+25,449
+(25,449)
+12,729
+(12,729)
+5
+Balance as at 31 December 2013 and
+484,105
+1 January 2014
+Convertible bonds
+142,865
+122,733
+199,916
+(29,141)
+(1,573)
+(4,080)
+Profit for the year
+763
+(11,436)
+26,537
+(26,537)
+8,114
+(25,750)
+Effective hedging portion of gains or losses arising from
+cash flow hedging instruments:
+gain/(loss) during the year
+Less: Income tax effect
+122
+(1,362)
+(272)
+63
+110
+(209)
+Share of the other comprehensive income of the investee accounted for
+using equity method which will be reclassified subsequently to profit or loss
+Foreign currency translation differences
+80
+(2,173)
+Others
+(12)
+26,537
+(32,502)
+Net gain/(loss) from change in fair value of available-for-sale financial assets:
+Changes in fair value recorded in other comprehensive income
+Less: Transfer to profit or loss arising from disposal/impairment
+Income tax effect
+18,162
+18,162
+(18,162)
+149,270
+218,078
+3,852
+(1,698)
+43,992
+1,602
+(11,044)
+34,550
+(4,036)
+610,647
+(i)
+Includes the appropriation made by overseas branches in the amount of RMB114 million (2013: RMB67 million).
+43. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+2014
+2013
+Items that may be reclassified subsequently to profit or loss:
+513,903
+0.01 to 3.30
+28
+%
+32,715
+102,591
+83,771
+114,660
+79,061
+114,886
+71,239
+Operating income
+8,839
+7,984
+(168)
+110
+(312)
+(8,272)
+(197)
+(2,221)
+11,915
+Other income/(expense), net (i)
+132,497
+(319)
+6,150
+5,143
+19,403
+20,643
+22,364
+22,016
+32,565
+4,532
+Net fee and commission income
+36,254
+533
+(319)
+Operating expenses
+2014
+2013
+The aggregated balance of loans and credit card overdraft to the person which are considered as related parties according to
+the relevant rules of Shanghai Stock Exchange was RMBO.54 million as at 31 December 2014 (31 December 2013: RMB2.44
+million).
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(f) Annuity fund
+Apart from the obligations for defined contributions to the annuity fund, annuity fund holds convertible bonds issued by the
+Group with an amount of RMB27.36 million (31 December 2013: RMB18.58 million).
+(g) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organizations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities, including but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+Annual Report 2014
+211
+(2,637)
+(7,131)
+(7,574)
+(6,806)
+(11,495)
+(15,641)
+(3,727)
+Loans and advances to customers
+Impairment losses on:
+(218,674)
+319
+(13,844)
+(14,525)
+(38,735)
+(33,689)
+(36,334)
+(25,307)
+(35,353)
+(21,206)
+634,858
+9,127
+7,669
+15,274
+Western China: including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+Central China: including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+Bohai Rim: including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+Pearl River Delta: including Guangdong, Shenzhen, Fujian and Xiamen;
+Head Office ("HO"): the HO business division (including institutions directly controlled by the HO and their offices);
+Yangtze River Delta: including Shanghai, Jiangsu, Zhejiang and Ningbo;
+Mainland China (Head Office and domestic branches):
+The distribution of the geographical areas is as follows:
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane,
+Lima, Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City and Yangon).
+(b) Geographical information
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+ICBC
+214
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+(ii)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(i)
+2,445,956
+440,408
+2,005,548
+Credit commitments
+Other segment information:
+17,639,289
+45,449
+2,475,913
+7,087,551
+8,030,376
+Segment liabilities
+Northeastern China: including Liaoning, Heilongjiang, Jilin and Dalian
+Overseas and others: branches located outside Mainland China, domestic and overseas subsidiaries, and investments
+in associates and joint ventures.
+Year ended 31 December 2014
+Mainland China (HO and domestic branches)
+70,935
+9,293
+21,946
+(134,777)
+Internal net interest income/(expense)
+493,522
+21,587
+18,613
+75,409
+48,166
+29,633
+47,949
+62,596
+189,569
+Loans
+External net interest income
+Eliminations
+Overseas and
+others
+China
+China
+China
+Rim
+River Delta
+River Delta
+Head Office
+Western Northeastern
+Central
+Bohai
+Pearl
+Yangtze
+Total
+The transactions between the Group and the aforementioned parties for the year are as follows:
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the
+Group.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2014 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's and the Bank's 2014 financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+78
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+538
+956
+61
+467
+Interest expense on amounts due to banks and other financial institutions
+Net trading expense
+386
+657
+345
+55
+Net fee and commission income
+Interest rate ranges during the year are as follows:
+396
+453
+%
+204
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Due to banks and other financial institutions
+0.0125 to 1.56
+0 to 2.74
+0 to 5.65
+1.84 to 6.40
+0.01 to 6.98
+0 to 7.78
+1.67 to 6.77
+0 to 7.77
+The material balances and transactions with subsidiaries have been eliminated in full in the consolidated financial statements.
+Annual Report 2014
+209
+71
+Interest income on debt securities purchased
+Transactions during the year:
+2013
+Interest income on amounts due from these banks and financial institutions
+Interest expense on amounts due to these banks and financial institutions
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+Due from these banks and financial institutions
+Due to these banks and financial institutions
+38,975
+380
+2,193
+%
+39,579
+793
+2,290
+%
+0.0331 to 6.50
+0 to 6.00
+0 to 7.20
+0 to 8.25
+0 to 7.80
+0.0001 to 7.50
+The interest rates disclosed above vary across product groups and transactions depending on the maturity date, credit risk
+of counterparty and currency. In particular, given local market conditions, the spread of certain significant or long dated
+transactions can vary across the market.
+(b) Subsidiaries
+Balances at end of the year:
+Debt securities purchased
+Notes to Financial Statements
+Due from banks and other financial institutions
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Commitments
+2014
+2013
+13,768
+195,574
+18,308
+1,653
+6,868
+214,705
+9,701
+199
+210,237
+1,984
+127,089
+215,164
+2,459
+126,398
+2014
+Loans and advances to customers
+36,548
+31 December 2014
+(c) Associates and affiliates
+Deposits
+Transactions during the year:
+Interest expense on deposits
+Interest rate ranges during the year are as follows:
+Deposits
+2014
+2013
+47
+2014
+2013
+2
+%
+%
+0.35 to 3.90
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+210
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(e) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+The aggregate compensation for the year, other than those for the personnel disclosed in note 13 above, is as follows:
+Short term employment benefits
+Post-employment benefits
+2014
+RMB'000
+7,770
+317
+2013
+RMB'000
+9,774
+199
+8,087
+9,973
+Note: The above compensation for the year ended 31 December 2013 was restated in accordance with the supplemental
+announcement for the 2013 annual report.
+Balances at end of the year:
+(d) Joint ventures and affiliates
+The major transactions between the Group and the associates and their affiliates mainly comprised taking and placing
+interbank balances, lending and deposit taking and the corresponding interest income and interest expense. In the opinion
+of management, the transactions between the Group and the associates and their affiliates were conducted under normal
+commercial terms and conditions.
+0 to 2.50
+1.05 to 1.11
+Balances at end of the year:
+Due from banks
+Loans to associates
+Due to banks
+Deposits
+2014
+2013
+62
+203
+106
+488
+566
+850
+40
+(In RMB millions, unless otherwise stated)
+42
+2013
+Transactions during the year:
+Interest income on loans to associates
+Interest expense on amounts due to banks
+Interest rate ranges during the year are as follows:
+Due from banks
+Loans to associates
+Due to banks
+Deposits
+20
+14
+%
+%
+0.15 to 0.35
+2.23 to 2.68
+0.35 to 1.60
+0 to 0.68
+0.01 to 2.50
+1.63 to 2.68
+2014
+9,902
+4,638
+164,347
+2,865,472
+69,193
+19,072,649
+Other segment information:
+Credit commitments
+1,867,439
+474,684
+2,342,123
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(ii)
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+Annual Report 2014
+213
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Others
+Total
+Year ended 31 December 2013
+External net interest income/(expense)
+271,599
+(168)
+171,421
+7,404,957
+8,733,027
+Segment liabilities
+38,980
+413
+26
+2,211
+Capital expenditure
+26,235
+19,322
+9,770
+777
+56,104
+As at 31 December 2014
+Segment assets
+7,978,544
+3,110,238
+9,402,275
+483
+118,896
+Including: Investments in associates and
+joint ventures
+28,919
+28,919
+Property and equipment
+Other non-current assets (ii)
+81,543
+16,915
+60,209
+30,286
+27,242
+199,280
+7,059
+4,629
+10,377
+20,609,953
+661
+443,335
+(68,036)
+9
+(276)
+(223)
+Operating profit/(loss)
+161,589
+103,581
+71,492
+(222)
+336,440
+Share of profits and losses of associates and
+joint ventures
+2,097
+2,097
+Profit before taxation
+161,589
+103,581
+71,492
+1,875
+338,537
+Income tax expense
+(75,572)
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+262,965
+6,614
+5,058
+2,544
+1
+43
+Others
+(38,098)
+154,921
+(86,885)
+Net fee and commission income
+76,911
+45,254
+995
+(834)
+122,326
+Other income, net (i)
+1,310
+21
+3,779
+8,130
+13,240
+Internal net interest income/(expense)
+Operating income
+200,028
+89,310
+7,779
+578,901
+Operating expenses
+(92,594)
+(85,994)
+(17,827)
+(7,725)
+(204,140)
+Impairment losses on:
+Loans and advances to customers
+(27,644)
+(10,454)
+281,784
+Interest income on debt securities purchased
+1,111
+242
+(a) Operating segments
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services.
+Treasury operations
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers.
+Others
+This segment covers the Group's insurance and leasing services as well as the other assets, liabilities, income and expenses
+that are not directly attributable or cannot be allocated to a segment on a reasonable basis.
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as
+"internal net interest income/expense". Net interest income and expense relating to third parties are referred to as "external
+net interest income/expense".
+212
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Others
+Total
+Year ended 31 December 2014
+External net interest income
+294,461
+17,155
+180,776
+53. SEGMENT INFORMATION
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of
+business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and
+those state-owned entities are ultimately controlled or owned by the Government. The Group has also established pricing
+policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned
+entities.
+(In RMB millions, unless otherwise stated)
+31 December 2014
+26,671
+24,496
+48,874
+7,141
+14,867
+Other non-current assets (ii)
+64,306
+Property and equipment
+28,515
+28,515
+joint ventures
+Including: Investments in associates and
+18,917,752
+138,401
+8,820,870
+1,130
+2,765,136
+Segment assets
+As at 31 December 2013
+45,880
+592
+8,103
+15,990
+21,195
+Capital expenditure
+2,018
+20
+381
+601
+1,016
+Notes to Financial Statements
+7,193,345
+16,094
+493,522
+(72,827)
+5
+(462)
+Operating profit
+165,248
+128,365
+65,401
+441
+359,455
+Share of profits and losses of associates and
+joint ventures
+2,157
+2,157
+Profit before taxation
+165,248
+128,365
+65,401
+2,598
+361,612
+Income tax expense
+(85,326)
+Profit for the
+Other segment information:
+Depreciation
+Amortisation
+276,286
+year
+7,473
+5,576
+2,803
+(144)
+(322)
+Others
+(56,267)
+168,038
+(95,211)
+Net fee and commission income
+80,513
+52,317
+575
+(908)
+132,497
+Other income, net (i)
+1,225
+22
+(466)
+8,058
+8,839
+Internal net interest income/(expense)
+Operating income
+237,532
+85,674
+8,280
+634,858
+Operating expenses
+(97,626)
+(93,075)
+(20,129)
+(7,844)
+(218,674)
+Impairment losses on:
+Loans and advances to customers
+(40,176)
+(16,091)
+303,372
+2013
+14,420
+382
+82,077
+394
+32,056
+28,301
+Operating expenses
+(16,468)
+(34,465)
+(24,769)
+(34,237)
+95,872
+(32,384)
+(14,199)
+(11,205)
+550
+(50)
+578,901
+(204,140)
+Impairment losses on:
+(36,463)
+Loans and advances to customers
+80,006
+74,761
+5,441
+(50)
+122,326
+Other income/(expense), net (i)
+6,139
+(125)
+865
+114,472
+(388)
+426
+115
+5,909
+13,240
+Operating income
+39,376
+114,107
+299
+4,829
+(2,695)
+(5,428)
+75,968
+44,866
+55,908
+17,285
+14,549
+336,440
+Share of profits and losses of associates and
+44,546
+joint ventures
+Income tax expense
+Profit for the year
+2,097
+2,097
+20,296
+63,022
+44,546
+Profit before taxation
+(16,599)
+63,022
+Operating profit
+(4,108)
+(2,754)
+(3,586)
+(739)
+(2,189)
+(38,098)
+Others
+20,296
+83
+(18)
+(159)
+(2)
+85
+167
+(358)
+(223)
+(21)
+75,968
+18,133
+20,493
+61,117
+Unallocated liabilities
+Total liabilities
+19,072,649
+Other segment information:
+Credit commitments
+469,704
+19,011,532
+438,216
+419,494
+129,088
+158,055
+58,811
+348,904
+2,342,123
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+319,851
+Mainland China (HO and domestic branches)
+(7,161,378)
+959,520
+3,631
+5,307
+5,674
+1,325
+3,092
+38,980
+24,758
+747,042
+Unallocated assets
+Total assets
+Liabilities by geographical areas
+7,431,623
+4,693,296
+3,457,784 4,344,494
+1,983,382
+2,555,769
+20,609,953
+19,439
+Yangtze
+Bohai
+17,334
+16,386
+443,335
+Internal net interest income/(expense)
+(143,331)
+25,426
+10,766
+63,647
+64,587
+13,666
+9,778
+565
+Net fee and commission income
+3,860
+30,125
+20,056
+18,543
+Pearl
+41,725
+43,074
+Central
+Western Northeastern
+Overseas and
+Head Office
+River Delta
+River Delta
+Rim
+29,780
+China
+China
+others Eliminations
+Total
+Year ended 31 December 2013
+External net interest income
+172,708
+58,681
+China
+2,691
+44,866
+17,285
+4,709,007
+2,988,614
+3,648,679
+1,763,358
+2,273,841
+926,129
+1,483,349
+6,891,849
+(7,101,686)
+Unallocated liabilities
+56,149
+Total liabilities
+17,639,289
+Other segment information:
+Credit commitments
+494,153
+17,583,140
+456,115
+Liabilities by geographical areas
+Total assets
+23,017
+10,470
+42,789
+164,347
+Other non-current assets (i)
+11,177
+5,552
+18,917,752
+2,766
+4,896
+4,716
+1,348
+2,403
+36,548
+Unallocated assets
+28,860
+3,690
+19,467
+389,353
+149,095
+Centralised credit management policies and procedures;
+Risk management rules and procedures that focus on risk control throughout the entire credit business process,
+including customer investigation and credit rating, granting of credit limits, loan evaluation, loan review and approval,
+granting of loan and post-disbursement loan monitoring;
+•
+Stringent qualification system for the loan approval officers; and
+Information management systems designed to enable a real time risk monitoring.
+To enhance the credit risk management practices, the Group also launches training programs periodically for credit officers
+at different levels.
+In addition to the credit risk exposures on credit-related assets and amounts due from or lending to banks and other
+financial institutions, credit risk also arises in other areas. For instance, credit risk exposure also arises from derivative
+financial instruments which is, however, limited to those with positive fair values, as recorded in the statement of financial
+position. In addition, the Group also makes available to its customers' guarantees which may require the Group to make
+payments on their behalf. Such payments are collected from customers based on the terms of the agreements signed. They
+expose the Group to similar risks as loans and these are mitigated by the same control processes and policies.
+.
+The Group will normally sign an ISDA Master Agreement, a China Interbank Market Financial Derivatives Master Agreement
+("NAFMII master agreement") with its counterparties for documenting over-the-counter derivative activities. Each of these
+master agreements provides the contractual framework within which derivative dealing activities are conducted. Under each
+of these master agreements, close-out netting shall be applied across all outstanding transactions covered by the agreement
+if either party defaults.
+Credit risk is often greater when counterparties are concentrated in one single industry or geographical location or have
+comparable economic characteristics.
+Impairment assessment
+The main considerations for the loan impairment assessment include whether any payments of principal or interest are
+overdue or whether there are any liquidity problems of counterparties, credit rating downgrades, or infringement of the
+original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed impairment
+and collectively assessed impairment.
+Individually assessed loans
+All corporate loans and discounted bills are individually reviewed for objective evidence of impairment and classified based
+on a five-tier classification system. Corporate loans and discounted bills that are classified as substandard, doubtful or loss
+are assessed individually for impairment.
+218
+ICBC
+Risk concentration
+386,886
+The principal features of the Group's credit risk management function include:
+(a) Credit risk
+192,459
+71,345
+306,550
+2,445,956
+(i) Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+54. FINANCIAL INSTRUMENTS RISK MANAGEMENT
+A description and an analysis of the major risks faced by the Group are as follows:
+Credit risk is the risk of loss arising from a borrower's or counterparty's inability to meet its obligations. Credit risk can also
+arise from operational failures that result in an unauthorised or inappropriate guarantee, commitment or investment of
+funds. The Group is exposed to credit risk primarily due to loans, guarantees and other credit related commitments.
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+The Group has also assigned departments monitoring financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to both the corresponding risk management departments at the
+Head Office and management of the relevant branches.
+Annual Report 2014
+217
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+55,908
+18,498
+23,791
+231
+255
+60
+137
+2,018
+Capital expenditure
+3,169
+112
+5,307
+4,631
+5,855
+6,955
+2,341
+14,212
+45,880
+(i)
+3,410
+Including net trading income/(expense), net loss on financial assets and liabilities designated at fair value through profit or
+loss, net gain on financial investments and other operating income (net).
+143
+855
+16,646
+338,537
+(75,572)
+262,965
+Other segment information:
+Depreciation
+1,564
+225
+2,203
+1,984
+2,327
+2,623
+1,075
+1,172
+14,420
+Amortisation
+1,472
+12,458
+216
+Mainland China (HO and domestic branches)
+8,178,181
+4,769,329
+3,032,428
+3,326,666
+1,808,412
+2,331,126
+945,023
+Assets by geographical areas
+1,599,413
+18,888,892
+Including: Investments in associates and
+joint ventures
+28,515
+28,515
+Property and equipment
+13,857
+(7,101,686)
+ICBC
+As at 31 December 2013
+others Eliminations
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Yangtze
+Pearl
+Bohai
+Central
+Total
+Head Office
+River Delta
+Rim
+China
+Western
+China
+Northeastern
+Overseas and
+China
+River Delta
+2014
+5,986
+Other non-current assets (i)
+125
+137
+15,542
+56,728
+42,456
+71,495
+42,266
+63,843
+46,239
+Operating profit
+(268)
+(11)
+3
+(52)
+(25)
+11,274
+7
+2014
+Transactions during the year:
+Due to these banks and financial institutions
+Derivative financial liabilities
+Due from these banks and financial institutions
+Derivative financial assets
+Debt securities purchased
+Balances at end of the year:
+202
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group.
+Significant transactions during the year conducted with these banks and financial institutions, and the corresponding
+balances as at 31 December 2014 are as follows:
+Notes to Financial Statements
+31 December 2014
+1
+(1,256)
+Others
+(67)
+(49)
+(In RMB millions, unless otherwise stated)
+859
+Amortisation
+16,094
+15,542
+56,728
+42,456
+71,495
+42,266
+63,843
+23,043
+46,239
+Profit before taxation
+joint ventures
+Share of profits and losses of associates and
+359,455
+(462)
+(56,267)
+2,157
+2013
+1
+2,157
+2,219
+1,083
+2,806
+2,440
+2,016
+1,469
+Income tax expense
+2,252
+Depreciation
+Other segment information:
+Profit for the year
+276,286
+(85,326)
+361,612
+1,809
+973,027
+20,886
+993,156
+69,330
+Bohai
+Central
+Western
+Northeastern
+Overseas and
+Head Office
+Pearl
+River Delta
+Rim
+China
+China
+China
+others
+Eliminations
+River Delta
+As at 31 December 2014
+Yangtze
+(i)
+82,410
+537
+3,246
+4,007
+1,317
+35,917
+56,104
+Mainland China (HO and domestic branches)
+(i)
+Annual Report 2014
+215
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(b) Geographical information (continued)
+Including net trading income/(expense), net loss on financial assets and liabilities designated at fair value through profit or
+loss, net gain on financial investments and other operating income (net).
+3,033
+Total
+8,820,680
+24,204
+10,748
+72,633
+199,280
+1,376
+4,795
+Assets by geographical areas
+2,413
+2,211
+174
+66
+385
+263
+143,845
+425
+Capital expenditure
+19,086
+19,839
+26,113
+4,680,319
+3,342,070
+3,394,573
+2,008,309
+12,294
+1,001,247
+1,919,486
+2,579,889
+Including: Investments in associates and
+joint ventures
+28,919
+28,919
+Property and equipment
+14,363
+(7,161,378) 20,585,195
+Special
+mention
+41,084
+64,417 1,459,271 1,312,889
+106,667 4,846,744 4,246,081
+25,750 1,385,277 1,154,073
+237,918 10,814,697 9,628,284
+mention
+2013
+Special
+Total
+Pass
+Total
+23,796 1,177,869
+156,826 9,785,110
+32,189
+The following tables present the ageing analysis of each type of loans and advances to customers of the Group and the Bank
+that are subject to credit risk which are past due but not impaired as at the end of the reporting period:
+Group
+2014
+2013
+Corporate
+loans and
+advances
+Total
+Corporate
+loans and
+advances
+Personal
+loans
+Total
+Past due for:
+Less than one month
+33,068
+14,004
+47,072
+13,652
+15,930
+29,582
+One to two months
+14,428
+6,891
+21,319
+242
+6,667
+6,909
+Two to three months
+10,977
+7,769
+18,746
+12
+Past due but not impaired
+2,915,241
+2,726,628
+1,228,218
+56,506 4,175,525
+23,254 1,145,399
+150,813 9,275,770
+4,119,019
+2,947,430
+41,048
+59,793
+1,353,937
+4,305,874
+Bank
+2014
+Pass
+Special
+mention
+Total
+Pass
+2013
+Special
+mention
+Total
+Unsecured loans
+2,903,774
+39,852
+2,943,626
+Guaranteed loans
+1,275,140
+63,887
+1,339,027
+2,695,788
+1,188,005
+30,840
+40,213
+Loans secured by mortgages
+4,502,333
+103,629
+Pledged loans
+Available-
+for-sale
+financial
+assets
+10,000,938
+4,605,962
+25,220 1,344,911
+232,588 10,233,526
+1,122,145
+9,124,957
+Personal
+loans
+14,666
+7,084
+The carrying amount of renegotiated loans and advances to customers is as follows:
+The Group has formulated a set of loan restructuring policies to renegotiate the contractual terms with customers, to
+maximise the collectability of loans and to manage customer relationships.
+Renegotiated loans and advances to customers
+The fair values of collateral that the Group and the Bank hold relating to loans individually determined to be impaired as
+at 31 December 2014 amounted to RMB28,925 million (31 December 2013: RMB21,601 million) and RMB28,058 million
+(31 December 2013: RMB20,537 million), respectively. The collateral mainly consists of land and buildings, equipment and
+others.
+Impaired loans and advances are defined as those loans and advances having objective evidence of impairment as a result of
+one or more events that occured after initial recognition and that event has an impact on the estimated future cash flows
+of loans and advances that can be reliably estimated. These loans and advances include corporate loans and personal loans
+which are graded as "Substandard", "Doubtful" or "Loss".
+Impaired
+70,913
+57,237
+13,676
+108,372
+Group
+53,438
+Fair value of collateral held
+38,962
+29,337
+9,625
+81,095
+28,206
+52,889
+Over three months
+7,063
+7,061
+54,934
+Bank
+2014
+2013
+The credit risk of debt securities mainly arises from the risk that the issuer might default on a payment or go into liquidation.
+Debt securities by different types of issuers are generally subject to different degrees of credit risk.
+(iv) Debt securities
+(a) Credit risk (continued)
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+ICBC
+226
+During the year, the Group took possession of collateral held as security with a carrying amount of RMB2,030 million (2013:
+RMB868 million). Such collateral mainly comprises land and buildings, equipment and others.
+Collateral repossessed
+3,179
+2,004
+3,225
+2,061
+customers included in above
+Impaired loans and advances to
+4,825
+3,882
+4,929
+4,579
+to customers
+Renegotiated loans and advances
+2013
+2014
+2
+7,072
+18,655
+10,899
+Corporate
+2013
+2014
+(a) Credit risk (continued)
+Bank
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+225
+Annual Report 2014
+72,168
+Corporate
+57,502
+54,452
+57,332
+Fair value of collateral held
+43,575
+29,669
+13,906
+87,137
+28,664
+58,473
+Over three months
+111,784
+loans and
+Personal
+loans and
+Two to three months
+6,822
+6,633
+189
+20,599
+6,841
+13,758
+One to two months
+25,077
+15,643
+9,434
+41,841
+13,609
+28,232
+Less than one month
+Past due for:
+Total
+loans
+advances
+Total
+loans
+advances
+Personal
+7,756
+406,136
+assets
+Group
+318,918
+Subtotal
+508,609
+57,685
+19,557
+373,860
+9,943
+2,548,977
+47,564
+340,141
+11,565
+769
+137,921
+22,608
+167,278
+Banks and other financial institutions
+Corporate entities
+1,079,310
+22,845
+101,391
+30
+(24)
+(24)
+54
+30
+24
+54
+30
+24
+31 December 2013
+Total
+Subtotal
+Less: Allowance for impairment losses
+Corporate entities
+Banks and other financial institutions
+Impaired (*)
+4,071,441
+115,487
+30
+3,021
+90,664
+investments
+Receivables
+through
+at fair value
+Financial
+assets held
+financial
+maturity
+1,359,527
+10,576,779
+for-sale
+designated
+assets
+Financial
+Available-
+31 December 2014
+Bank
+(a) Credit risk (continued)
+Held-to-
+for trading
+profit or loss
+Total
+20,110
+1,500
+Public sector entities
+1,678,396
+29,120
+789
+359,775
+1,273,622
+15,090
+Policy banks
+1,428,808
+1,538
+117,090
+1,222,694
+87,486
+Governments and central banks
+Neither past due nor impaired
+192
+318,918
+2,548,977
+1,079,340
+1,500
+20,124
+67,326
+2,327
+91,277
+Banks and other financial institutions
+176,597
+Public sector entities
+15,559
+5,492
+307,454
+Corporate entities
+36,676
+9,043
+345,364
+26,941
+109,806
+1,673,559
+33,223
+289
+designated
+Financial
+assets held
+for trading
+at fair value
+through
+profit or loss
+Total
+Neither past due nor impaired
+Governments and central banks
+90,544
+1,260,755
+85,901
+377
+1,954
+1,439,531
+Policy banks
+15,090
+1,318,866
+306,091
+59,709
+477,733
+Subtotal
+320,407
+66
+23
+89
+(58)
+31
+3,989,585
+(*)
+Impaired debt securities above are all determined based on individual assessments. In determining whether a debt security is
+impaired, the Bank considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral was
+held by the Bank as security of the impaired debt securities.
+228
+ICBC
+Receivables
+Held-to-
+assets
+Financial
+4,071,471
+101,391
+22,845
+102,705
+(In RMB millions, unless otherwise stated)
+27,607
+2,624,378
+2,624,347
+914,488
+27,607
+102,705
+3,989,554
+Impaired (*)
+Banks and other financial institutions
+Corporate entities
+Less: Allowance for impairment losses
+Subtotal
+Total
+320,407
+66
+23
+89
+(58)
+31
+914,488
+31 December 2014
+Notes to Financial Statements
+227
+Impaired (*)
+4,175,565
+101,560
+23,970
+1,164,780
+2,566,337
+318,918
+Banks and other financial institutions
+Subtotal
+57,854
+19,557
+404,755
+21,468
+47,564
+Corporate entities
+359,111
+551,198
+78
+78
+Corporate entities
+1,164,855
+2,566,390
+318,918
+128
+75
+53
+Total
+Subtotal
+(142)
+(142)
+Less: Allowance for impairment losses
+270
+75
+195
+192
+75
+117
+11,565
+796
+162,806
+16,666
+Governments and central banks
+Neither past due nor impaired
+Total
+profit or loss
+for trading
+assets
+through
+at fair value
+Financial
+assets held
+financial
+maturity
+investments
+Receivables
+designated
+Available-
+for-sale
+Held-to-
+Financial
+assets
+31 December 2014
+87,486
+23,970
+1,231,741
+2,636
+167,278
+Banks and other financial institutions
+119,326
+3,021
+192
+93,488
+21,125
+1,500
+Public sector entities
+1,687,791
+29,120
+789
+367,455
+1,275,337
+15,090
+Policy banks
+1,458,139
+136,276
+The following tables present an analysis of the Group's total credit risk exposures of debt securities by types of issuers and
+investments:
+101,560
+31 December 2013
+Corporate entities
+149
+149
+Banks and other financial institutions
+Impaired (*)
+4,067,972
+103,027
+23
+27,808
+2,624,370
+324,488
+Subtotal
+510,003
+60,031
+26,996
+369,925
+988,279
+39
+62
+172
+Annual Report 2014
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Group considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Group as security of the impaired debt securities.
+(*)
+4,068,041
+103,027
+27,808
+988,318
+2,624,400
+324,488
+Total
+69
+39
+(142)
+(142)
+30
+Less: Allowance for impairment losses
+Subtotal
+211
+39
+12,294
+40,757
+Corporate entities
+329,182
+95,153
+1,262,845
+90,544
+Governments and central banks
+Neither past due nor impaired
+Total
+through
+profit or loss
+for trading
+assets
+at fair value
+Financial
+assets held
+designated
+Available-
+for-sale
+financial
+maturity
+investments
+Receivables
+Held-to-
+Financial
+assets
+523
+4,175,693
+1,954
+Policy banks
+5,492
+138,292
+8,801
+176,597
+Banks and other financial institutions
+95,149
+2,327
+70,362
+20,960
+1,500
+Public sector entities
+1,682,619
+33,223
+289
+314,547
+1,319,470
+15,090
+1,451,019
+Pledged loans
+1,319,691
+Loans secured by mortgages
+27,607
+Financial assets held for trading
+717,984
+Individually assessed loans with no objective evidence of impairment
+Individually assessed loans with no objective evidence of impairment are grouped together in portfolios of similar credit
+risk characteristics for the purpose of assessing a collective impairment loss. The collective impairment loss is assessed after
+taking into account:
+•
+Historical loss experience in portfolios of similar risk characteristics; and
+•
+The current economic and credit environment and, whether these, in management's experience, indicate that the
+actual level of incurred but not yet identified losses is likely to be greater or less than that suggested by historical
+experience.
+As soon as information that specifically identifies objective evidence of impairment on individual assets in a pool is available,
+those assets are excluded and individually assessed. Assets that are individually assessed for impairment and for which an
+impairment loss is or continues to be recognised are not included in a collective assessment for impairment.
+Collateral
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Fair value of collateral is shown in note 25.
+Corporate loans are mainly collateralised by properties or other assets. As at 31 December 2014, the carrying value
+of corporate loans and discounted bills covered by collateral amounted to RMB7,962,866 million (31 December 2013:
+RMB7,194,773 million), of which credit exposure of corporate loans covered by collateral amounted to RMB3,666,694million
+(31 December 2013: RMB3,256,175 million).
+Retail loans are mainly collateralised by residential properties. As at 31 December 2014, the carrying value of retail loans
+covered by collateral amounted to RMB3,063,465 million (31 December 2013: RMB2,727,601 million), of which credit
+exposure of retail loans covered by collateral amounted to RMB2,577,534 million (31 December 2013: RMB2,336,089
+million).
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Although collateral can be an important mitigation of credit risk, the Group grants loans based on the assessment of the
+borrowers' ability to meet obligations out of their cash flow, instead of the value of collateral. The necessity of a collateral
+is dependent on the nature of the loan. In the event of default, the Group might sell the collateral for repayment. The fair
+value of collateral of past due but not impaired loans and impaired loans are disclosed in note 54(a)(iii).
+220
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+201
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+27,808
+through profit or loss
+3,203
+57,440
+Reverse repurchase agreements
+25,020
+4,929
+850
+344,413
+1,245
+10
+29
+25
+101
+33
+213
+1,875
+446
+16,573
+Derivative financial assets
+27
+121
+58
+84
+342,839
+Financial assets designated at fair value
+(i)
+Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+As at the end of the reporting period, the maximum credit risk exposure of the Group and of the Bank without taking
+account of any collateral and other credit enhancements is set out below:
+Derivative financial assets
+24,048
+25,020
+22,292
+23,049
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+Receivables
+468,462
+10,768,750
+331,903
+9,681,415
+259,213
+95,575
+10,184,215
+9,169,446
+331,731
+324,488
+Held-to-maturity investments
+2,566,390
+2,624,400
+319,108
+2,548,977
+320,407
+344,091
+310,398
+344,413
+312,455
+Group
+Bank
+2014
+2013
+2014
+2013
+Balances with central banks
+3,434,908
+3,213,094
+3,387,634
+3,175,675
+3,845
+Due from banks and other financial
+782,776
+717,984
+737,740
+757,506
+Financial assets held for trading
+33,990
+27,808
+32,865
+27,607
+Financial assets designated at fair value
+through profit or loss
+institutions
+10,972
+7,334
+7,380
+31 December 2014
+Bank
+Credit risk (continued)
+(a)
+ICBC
+222
+The compositions of each geographical distribution above are set out in note 53(b).
+20,956,039
+2,445,956
+306,550
+1,620,863
+679,774
+1,963,390
+71,345
+192,459
+18,510,083
+1,314,313
+608,429
+1,770,931
+1,371,068
+149,095
+1,520,163
+2,334,787
+386,886
+2,721,673
+1,413,425
+389,353
+1,802,778
+456,115
+2,699,471
+7,947,927
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Yangtze
+179,692
+49,194
+67,318
+3,006,630
+Balances with central banks
+Total
+and others
+China
+China
+China
+Rim
+Total maximum credit risk exposure
+Delta
+Office
+Overseas
+eastern
+Western
+Central
+Bohai
+River
+River
+Head
+North-
+Pearl
+Delta
+2,624,378
+494,153
+2,243,356
+324,488
+4,081
+240
+1,398
+2,480
+4,124
+320
+584
+311,261
+- Receivables
+Financial investments
+9,681,415
+746,257
+553,825
+1,707,744
+1,306,448
+1,688,082
+1,282,763
+2,017,579
+378,717
+Loans and advances to customers
+331,903
+241,729
+-Held-to-maturity investments
+2,526,627
+54,571
+23,682
+7,453,774
+225,020
+45,661
+2,763
+10,080
+8,463
+15,255
+7,274
+15,825
+119,699
+Others
+Credit commitments
+994,538
+4,029
+13,955
+14,440
+214,179
+33,959
+50,368
+565,796
+-Available-for-sale financial assets
+2,624,400
+13,186
+6,334
+97,812
+Available-for-sale financial assets
+1,176,606
+994,538
+Western
+Central
+Bohai
+River
+River
+Head
+North-
+Pearl
+Yangtze
+31 December 2013
+The compositions of each geographical distribution above are set out in note 53(b).
+22,440,721
+2,077,102
+684,845
+2,163,329
+1,646,014
+2,342,123
+348,904
+58,811
+158,055
+129,088
+419,494
+2,730,645
+319,851
+1,857,168
+eastern
+Overseas
+Office
+Delta
+6,924
+8,836
+250,188
+12,653
+37,545
+277,596
+other financial institutions
+Due from banks and
+Total
+3,213,094
+64,454
+9,848
+438,216
+2,785,580
+30,700
+145,319
+46,996
+63,151
+2,829,619
+Balances with central banks
+and others
+China
+China
+China
+Rim
+Delta
+23,007
+29,484
+469,704
+8,496,038
+Credit commitments
+18,931
+4,140
+36,717
+2,566,390
+- Available-for-sale financial assets
+695,131
+62,585
+37,264
+228,694
+15,006
+17,094
+3,422
+117,410
+1,176,606
+Others
+93,801
+16,278
+10,303
+16,925
+11,312
+11,572
+2,823
+35,468
+51,699
+2,454,903
+-Held-to-maturity investments
+331,731
+20,098,598
+1,728,198
+626,034
+2,005,274
+1,516,926
+2,311,151
+1,537,317
+2,347,364
+8,026,334
+198,482
+1,940,872
+Total maximum credit risk exposure
+608,799
+10,768,750
+Financial investments
+- Receivables
+304,092
+1,140
+510
+5,948
+5,960
+1,218
+240
+12,623
+921,904
+20,387
+94,758
+1,816,719
+The following tables set out the breakdown of the Group's and the Bank's maximum credit risk exposure without taking
+account of any collateral and other credit enhancements, as categorised by geographical distribution:
+Group
+31 December 2014
+Yangtze
+Pearl
+North-
+Head
+River
+River
+Bohai
+Central
+Western
+eastern
+Overseas
+Office
+Delta
+Delta
+Rim
+China
+China
+China
+Balances with central banks
+3,006,630
+By geographical distribution
+(a) Credit risk (continued)
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+1,087,419
+914,488
+Others
+198,482
+225,020
+164,875
+181,070
+20,098,598
+18,510,083
+19,054,736
+17,633,292
+67,318
+Credit commitments
+Total maximum credit risk exposure
+22,440,721
+2,445,956
+20,956,039
+2,220,619
+2,309,736
+21,275,355
+19,943,028
+(ii) Risk concentrations
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+Annual Report 2014
+221
+2,342,123
+1,462,435
+49,194
+20,387
+79
+20
+3,094
+312,455
+Derivative financial assets
+9,377
+1,371
+5,519
+848
+255
+322
+910
+5,446
+24,048
+Reverse repurchase agreements
+256,230
+2,983
+209,249
+468,462
+Loans and advances to customers
+463,735
+2,141,295
+1,412,991
+58
+7,675
+126
+172
+32,200
+8,599
+and others
+70,888
+Total
+3,434,908
+Due from banks and
+other financial institutions
+408,339
+5,506
+2,479
+47,527
+179,692
+1,513
+1,221
+314,274
+782,776
+Financial assets held for trading
+32,865
+4,740,077
+1,125
+33,990
+Financial assets designated at fair value
+through profit or loss
+301,231
+1,917
+32,200
+maturity
+investments
+23,614
+3,082,321
+3,123,405
+Guaranteed loans
+1,394,854
+(a) Credit risk (continued)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+223
+Annual Report 2014
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+2,309,736
+114,356
+520,492 19,943,028
+685,356
+1,967,509
+73,566
+196,480
+154,988
+1,526,071
+17,633,292
+611,790
+1,771,029
+1,371,083
+2,338,749
+397,563
+2,736,312
+Unsecured loans
+1,413,898
+407,798
+1,821,696
+Pass
+Group
+9,275,770
+38,962
+90,199
+11,026,331
+9,922,374
+10,435,377
+9,404,931
+Less: Allowance for impairment losses
+(257,581)
+(240,959)
+(251,162)
+(235,485)
+10,768,750
+9,681,415
+10,184,215
+9,169,446
+224
+ICBC
+(a) Credit risk (continued)
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Neither past due nor impaired
+The balance of loans and advances to customers of the Group and the Bank that are neither past due nor impaired analysed
+by five-tier classification and by collateral are as follows:
+2014
+2,243,594
+470,832
+2,714,426
+494,153
+7,971,166
+Total maximum credit risk exposure
+•
+The availability of other financial support and the realisable value of collateral; and
+•
+The timing of the expected cash flows.
+It may not be possible to identify a single, discrete event that caused the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+Collectively assessed loans
+Loans that are assessed for impairment losses on a collective basis include the following:
+Homogeneous groups of loans, including all personal loans; and
+•
+.
+All loans for which no impairment can be identified individually, either due to the absence of any loss events or due to
+an inability to measure reliably the impact of potential loss events on future cash flows.
+For the purpose of collective assessment, assets are grouped on the basis of similar credit risk characteristics that are
+indicative of the debtors' ability to pay all amounts due according to the contractual terms.
+Objective evidence of impairment losses on a collective basis consists of observable data indicating a measurable decrease in
+the estimated future cash flows from a portfolio of loans since the initial recognition of those loans, including:
+•
+Adverse changes in the payment status of borrowers in the group of loans; and
+.
+National or local economic conditions that correlate with defaults on assets in the portfolio of loans.
+Homogenous groups of loans not considered individually significant
+For homogeneous groups of loans, the Group uses a collective assessment approach for impairment losses. The approach
+analyses historical trends of probability of default and the amount of the consequential loss, as well as evaluates current
+economic conditions that may have a consequential impact on inherent losses in the portfolio.
+Annual Report 2014
+219
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Projected receipts and the expected payout should bankruptcy ensue;
+•
+The borrower's ability to improve performance once a financial difficulty has arisen;
+.
+Credit commitments
+7,477,013
+181,070
+1,724
+2,763
+350,274
+11,026,331
+8,463
+15,255
+7,274
+15,825
+119,686
+10,233,526
+81,095
+120,756
+Others
+17,762
+4,029
+13,955
+14,440
+214,179
+33,959
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+If there is objective evidence that an impairment loss on a loan or advance has been incurred on an individual basis, the
+amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated
+future cash flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in
+the carrying amount. The impairment loss is recognised in profit or loss. In determining allowances on an individual basis, the
+following factors are considered:
+•
+The sustainability of the counterparty's business plan;
+914,488
+9,785,110
+43,575
+93,689
+87,137
+124,497
+Impaired
+7,612,592
+Subtotal for corporate loans and advances
+243,063
+284,839
+323,557
+354,450
+Others
+101,590
+115,238
+104,510
+123,207
+Science, education, culture and sanitation
+183,132
+210,093
+193,035
+220,860
+Construction
+149,748
+161,846
+203,428
+224,994
+8,599
+Lodging and catering
+7,046,515
+7,083,319
+6,574,098
+Personal mortgage and business loans
+148,258
+9,922,374
+344,099
+10,435,377
+144,846
+9,404,931
+(iii) Loans and advances to customers
+The total credit risk exposures of loans and advances to customers are summarised as follows:
+Group
+Bank
+2014
+Discounted bills
+2,685,987
+260,348
+3,007,959
+3,063,465
+Subtotal for personal loans
+661,430
+662,217
+678,273
+676,134
+Others
+2,024,557
+2,345,742
+2,049,328
+2,387,331
+2,727,601
+(a) Credit risk (continued)
+281,433
+301,261
+1,235,150
+1,352,250
+1,301,794
+1,439,285
+Transportation, storage and postal services
+2013
+1,511,663
+1,565,314
+1,580,147
+1,642,460
+Manufacturing
+2014
+2013
+2014
+Bank
+Group
+The credit risk exposures of the Group mainly comprise loans and advances to customers and investments in securities.
+Details of the composition of the Group's investments in debt securities are set out in note 54(a)(iv) to the financial
+statements. The composition of the Group's and of the Bank's gross loans and advances to customers by industry is analysed
+as follows:
+By industry distribution
+2013
+2014
+2013
+Neither past due nor impaired
+10,814,697
+Past due but not impaired
+Wholesale and retail
+923,005
+914,012
+878,113
+Mining
+465,037
+470,172
+472,981
+477,193
+469,612
+454,883
+530,600
+530,103
+public utility management
+Water, environment and
+273,049
+Real estate
+600,812
+482,938
+624,046
+Leasing and commercial services
+625,368
+708,326
+666,464
+751,728
+heating, gas and water
+Production and supply of electricity,
+867,155
+462,232
+50,368
+10,080
+- Available-for-sale financial assets
+2,317,911
+1,516,969
+2,005,425
+626,045
+560,085
+19,054,736
+1,537,513
+Credit commitments
+470,929
+8,614,343
+453,676
+2,801,050
+327,181
+1,864,694
+430,897
+2,748,808
+136,142
+169,578
+Total maximum credit risk exposure
+63,188
+2,347,374
+164,875
+15,006
+17,094
+3,422
+28,223
+1,087,419
+Others
+8,143,414
+93,801
+10,303
+16,925
+11,312
+11,572
+2,823
+1,861
+16,278
+228,694
+169,028
+1,653,111
+Delta
+Rim
+China
+China
+China
+Balances with central banks
+Delta
+2,829,619
+46,996
+145,319
+23,007
+30,700
+9,848
+and others
+27,035
+63,151
+2,220,619
+Office
+eastern
+2,175,003
+689,233
+729,113 21,275,355
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+31 December 2013
+Yangtze
+Overseas
+Pearl
+Head
+River
+River
+Bohai
+Central
+Western
+North-
+Total
+37,264
+695,131
+172
+126
+7,675
+58
+79
+20
+301,231
+1,037
+Derivative financial assets
+10,479
+1,371
+5,519
+848
+255
+310,398
+322
+through profit or loss
+32,865
+3,387,634
+Due from banks and
+other financial institutions
+524,317
+5,516
+2,675
+Financial assets designated at fair value
+47,560
+2,068
+1,232
+152,816
+737,740
+Financial assets held for trading
+32,865
+1,556
+62,585
+910
+22,292
+510
+5,948
+5,960
+1,218
+240
+319,108
+1,140
+-Held-to-maturity investments
+51,699
+18,931
+4,140
+19,304
+2,548,977
+-Available-for-sale financial assets
+2,454,903
+2,588
+304,092
+Financial investments
+Reverse repurchase agreements
+256,230
+2,983
+259,213
+Loans and advances to customers
+463,735
+- Receivables
+2,141,295
+1,823,446
+1,462,435
+1,940,872
+608,799
+330,642
+10,184,215
+1,412,991
+565,796
+Total for loans and advances to customers
+344,091
+121
+27
+27
+Derivative financial assets
+18,345
+446
+1,875
+213
+33
+101
+25
+29
+10
+923
+850
+58
+1,186
+84
+through profit or loss
+Due from banks and
+other financial institutions
+299,076
+37,783
+13,126
+250,231
+8,851
+7,022
+29,500
+111,917
+757,506
+Financial assets held for trading
+27,607
+27,607
+Financial assets designated at fair value
+342,839
+Reverse repurchase agreements
+23,049
+9,169,446
+Financial investments
+- Receivables
+311,261
+584
+320
+4,124
+2,480
+1,398
+240
+320,407
+-Held-to-maturity investments
+2,526,627
+54,571
+23,682
+6,334
+57,440
+13,164
+232,369
+1,707,744
+3,203
+3,845
+12,972
+7,334
+10,725
+56
+553,825
+95,575
+378,717
+3,175,675
+2,017,579
+1,282,763
+1,690,001
+1,306,448
+Loans and advances to customers
+2,624,378
+three
+months to
+Less than
+on demand
+53,902
+months
+one year
+repayable
+one month
+Three
+One to
+Overdue/
+15,801,819
+Debt securities issued
+Others
+67,980
+8,954,042
+4,627 11,510
+28,138 27,609
+1,771,340 1,932,748
+20,991
+79,094
+260,034
+376,256
+37,415
+17,277
+6,991
+5,815
+191,225
+3,833,512
+2,230,189
+46,026
+347,270
+2,085,875
+179,095
+1,933,499
+33,683
+18,295
+196,947
+592,370
+6,992
+59,683
+206,447 265,981
+495,736 266,186
+34,189
+1,002,203 1,307,264
+7,910,143
+Due to customers
+22,453
+922,652
+Due to banks and other financial institutions (*)
+53,267
+through profit or loss
+Financial liabilities designated at fair value
+536
+3,450,308
+68,015
+5,815 19,074,916
+Derivative financial instruments settled on net basis
+Total
+(94,173)
+(4,454)
+2,329,769
+(2,327,611)
+(1,279)
+477
+2
+2,158
+(*)
+Includes reverse repurchase agreements.
+Annual Report 2014
+233
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+31 December 2013
+Non-derivative cash flows:
+Derivative cash flows:
+Financial liabilities:
+296
+6
+5
+11
+(42)
+43
+23
+Derivative financial instruments settled on gross basis:
+- Cash inflow
+- Cash outflow
+3,444
+687,144 660,772
+(683,700) (661,258)
+(486)
+882,747
+(884,026)
+94,650
+4,456
+652
+203
+153
+Due to central banks
+Certificates of deposit
+29
+144,131
+54
+five years
+39
+13
+85
+45
+50
+Lowest
+Highest
+Average
+31 December 2013
+2013
+Total portfolio VaR
+Commodity risk
+Interest rate risk
+Currency risk
+24
+90
+46
+72
+15
+6
+16
+19
+2,220,619
+Repayable
+on demand
+Less than
+one month
+ICBC
+238
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(3)
+(2)
+(1)
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+VaR.
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there was a
+diversification effect due to the correlation amongst the risk factors, the individual VaR did not add up to the total portfolio
+26
+95
+53
+61
+0
+5
+20
+12
+9
+Notes to Financial Statements
+237
+Annual Report 2014
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between the
+repricing dates of interest-generating assets and interest-bearing liabilities.
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+(c) Market risk
+2,309,736
+175,587
+365,270
+543,185
+326,221
+162,823
+736,650
+Total
+More than
+five years
+five years
+one year
+One to
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios as immaterial.
+Sensitivity analysis, interest rate repricing gap analysis and currency risk concentration analysis are the major market risk
+management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Bank adopts VaR analysis as the major tool for calculating and monitoring the market risk of trading
+portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the parent company
+and a sensitivity analysis based on the Group's interest rate risk exposure and currency risk exposure (both trading and non-
+trading portfolios).
+17
+65
+39
+55
+Total portfolio VaR
+Commodity risk
+Currency risk
+8
+60
+195,584
+24
+Interest rate risk
+Lowest
+Highest
+Average
+31 December 2014
+2014
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(i) VaR
+32
+380,889
+534,912
+263,299
+230
+5,505
+(114)
+(215)
+(*)
+Includes reverse repurchase agreements.
+236
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+(iii) Analysis of credit commitments by contractual expiry date
+Management expects that not all of the commitments will be drawn before the expiry of the commitments.
+Group
+31 December 2014
+Credit commitments
+31 December 2013
+Three
+(206)
+1,816
+3,043
+622
+322,127
+376
+16,907,424
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis:
+- Cash inflow
+- Cash outflow
+(8)
+Repayable
+on demand
+(5)
+(363)
+341,175 374,401
+(340,553) (371,358)
+675,655
+(673,839)
+66,819
+1,980
+1,460,030
+(67,025)
+(1,750)
+(1,454,525)
+(21)
+376
+Less than
+one month
+months to
+519,717
+382,406
+178,669
+2,445,956
+Bank
+31 December 2014
+Credit commitments
+31 December 2013
+Credit commitments
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Total
+688,108
+157,827
+335,930
+173,098
+856,136
+Credit commitments
+One to
+one year
+five years
+More than
+five years
+Total
+692,629
+156,397
+257,582
+610,824
+One to
+three months
+429,940
+2,342,123
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Total
+194,751
+One to More than
+five years
+Derivative financial instruments settled on gross basis:
+- Cash inflow
+(***)
+5
+4
+Includes reverse repurchase agreements.
+(*)
+- Cash outflow
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+18,028,719
+8
+128
+1,429,120 1,762,783 3,629,240 2,162,662
+8,757,632
+143,263
+128
+4,673
+329,172
+239,007
+66,212
+263
+15,263,357
+42,938
+287,154
+(65)
+(218)
+(266)
+One to
+months to
+three
+Less than
+one month
+Three
+One to
+Overdue/
+repayable on
+demand
+31 December 2013
+(b) Liquidity risk (continued)
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+235
+Annual Report 2014
+(501)
+14
+(107)
+(124)
+2,010,365
+(2,010,866)
+(3,536)
+3,550
+58,039
+(58,146)
+590,574 573,384 784,818
+(590,643) (573,508) (785,033)
+(215)
+(69)
+2,063,319
+months
+3,347,164
+14,021
+31,024
+536
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+Overdue/
+repayable on
+demand
+31 December 2014
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+Undated
+(*)
+6,847,681
+7,137,001
+1,385,608 1,250,880 3,793,806
+940,428
+154,565
+1,240
+323,698
+13,910 4,160
+5,454,756 149,360 14,763,191
+1,375,927 2,727 4,704,024
+5
+120,507
+4,366,518
+2,621,735
+46
+505,382
+102
+3,107,525 24,462,929
+Total
+Non-derivative cash flows:
+Financial liabilities:
+20,978
+49,003
+1,560,660
+5,022
+128,345
+592,202
+6,868
+59,683
+206,447 265,981
+332,974 224,893
+28,872 40,449
+837,965 1,202,171
+2,253 7,679
+20,609 21,383
+65,183
+Others
+Debt securities issued
+7,769,800
+Due to customers
+Certificates of deposit
+869,426
+Due to banks and other financial institutions (*)
+53,223
+through profit or loss
+Financial liabilities designated at fair value
+227
+227
+Borrowing from central banks
+139,838
+123,787
+3,025,846
+one year
+More than
+five years
+Due to banks and other financial institutions (*)
+557,430
+1,969
+1,209
+243,796 250,933
+59,523
+through profit or loss
+Financial liabilities designated at fair value
+418
+418
+620,335
+Borrowing from central banks
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+Overdue/
+repayable on
+demand
+31 December 2013
+Financial liabilities:
+347,306 218,260
+54,206
+1,977
+5,194
+18,062
+320,014
+254,129
+44,890
+16,160
+14,542,820
+62,408
+1,736,614
+3,306,237
+100,131
+8,996
+29,368
+26,339 35,428
+714,570 1,214,061
+3,022 1,813
+3,415 18,206 29,544
+1,338,448 1,738,701 3,436,724 1,812,926
+8,258,122
+69,334
+Others
+Debt securities issued
+7,508,930
+Due to customers
+Certificates of deposit
+1,242,480
+396
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+five years
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+(*)
+19,258
+7,595
+958
+Financial assets held for trading
+866,723
+2,533
+28,899
+124,899
+104,415
+385,104
+1,315
+220,873
+3,254,920
+2,799,652
+1,260
+454,008
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+Undated
+Due from banks and other financial institutions (*)
+226
+29,352
+Financial assets designated at fair value
+148,169
+364,522
+9,406
+104,083 13,141,260
+2,083 4,660,728
+1,153
+2,916,377 22,465,674
+6,390,969
+6,410,420
+4,875,506
+1,502,346
+2,411,189
+10
+3,744,041
+905,127 2,793,363
+42,155 117,095 585,860
+13,487
+164
+1,426
+1,212,175 1,162,019 3,552,073
+821,641
+131,925
+Others
+Financial investments
+704,633
+14,507
+Loans and advances to customers (**)
+10,354
+224,966
+27,267
+26,363
+65,838
+328
+through profit or loss
+Includes reverse repurchase agreements.
+19,375 41,164
+963,972
+44,237 154,016
+202
+12,648
+140,322
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2013
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Undated
+Includes reverse repurchase agreements.
+2,942,095 23,533,866
+6,626,776
+6,742,745
+167,134
+5,083
+34
+108
+4,762,988
+6,331
+1,521,807
+(*)
+Total
+Non-derivative cash flows:
+Financial liabilities:
+29,206
+Certificates of deposit
+1,582,938
+3,768
+10,681
+177,587
+233,593
+558,571
+598,738
+Due to banks and other financial institutions (*)
+558,278
+1,969
+1,330
+251,115
+244,337
+59,527
+through profit or loss
+Financial liabilities designated at fair value
+797
+695
+51
+51
+Due to central banks
+2,466,506
+40,026
+602,788
+1,983
+885,782 1,443,316
+266
+1,498
+19,300
+7,595
+987
+Financial assets held for trading
+1,069,625
+4,512
+48,255
+76,579
+335
+111,385
+247,509
+Due from banks and other financial institutions (*)
+3,295,273
+2,813,258
+1,266
+480,749
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+581,385
+29,981
+Financial assets designated at fair value
+through profit or loss
+15,266
+140,761
+Others
+119,357
+46,199
+Financial investments
+13,844,011
+107,682
+5,089,803
+4,001,244
+2,932,718
+962,581
+733,548
+16,435
+Loans and advances to customers (**)
+364,854
+9,406
+10,354
+225,134
+27,336
+26,365
+65,931
+328
+3,899
+1,232,448 3,660,704
+52,953
+10,559
+132,744
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+More than Undated
+five years
+One to
+five years
+months to
+one year
+months
+three
+523,289
+Less than
+one month
+One to
+Overdue/
+repayable on
+demand
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+31 December 2014
+Bank
+(b) Liquidity risk (continued)
+ICBC
+234
+Three
+3,983
+2,950,038
+3,477,310
+Others
+Financial investments
+770,805
+31,934
+Loans and advances to customers (**)
+795
+through profit or loss
+Financial assets designated at fair value
+34,829
+708
+1,817
+28,345
+3,801
+158
+Financial assets held for trading
+1,005,312
+2,375
+26,378
+110,344
+83,742
+538,385
+244,088
+Due from banks and other financial institutions (*)
+Includes reverse repurchase agreements.
+(*)
+5,084
+230
+5,721
+18,560
+31,027
+18,795
+5,200
+1,694,076
+8,336,246
+69,748
+Others
+358,222
+268,154
+50,021
+22,677
+7,228
+10,142
+Debt securities issued
+14,965,556
+66,671
+1,755,324
+3,369,544
+1,319,164
+846,620
+7,608,233
+Due to customers
+4,906
+Undated
+153,957
+1,847,809
+(70)
+1,317
+(1,731,292)
+(1,515)
+(80,235)
+1,736,376
+1,745
+80,165
+423,529 756,032
+(420,304) (754,715)
+3,225
+382
+474,905
+(474,523)
+- Cash outflow
+(379)
+(136)
+(127)
+(102)
+(4)
+(10)
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+17,752,492
+4,906
+344,314
+1,869,972 3,655,169
+4
+20,301
+More than
+five years
+1,385,557
+903,831
+27,575
+27,330
+161,959
+164,347
+164,347
+28,515
+28,515
+1,083,107
+Total assets
+Property and equipment
+joint ventures
+Investments in associates and
+3,949,688
+6,331
+1,264,229
+2,063,210
+482,330
+94,241
+Others
+39,347
+55,093
+3,088,310 4,684,784
+20,638
+Derivative financial liabilities
+553,607
+1,812
+1,279
+247,261
+243,728
+59,527
+through profit or loss
+Financial liabilities designated at fair value
+20,334
+724
+50
+51
+Due to central banks
+Liabilities:
+18,917,752
+3,117,809
+4,654,354
+352,317
+39,388
+623
+Financial investments
+9,681,415
+56,229
+335
+223
+1,200
+18,237
+7,211
+937
+Financial assets held for trading
+1,049,887
+2,812
+28,143
+43,179
+109,131
+578,829
+244,678
+other financial institutions (*)
+Due from banks and
+3,294,007
+2,813,258
+480,749
+Cash and balances with central banks
+71,258
+Financial assets designated at fair value
+through profit or loss
+328
+3,357,223
+2,340,307
+2,428,835
+811,950
+670,754
+16,117
+Loans and advances to customers
+25,020
+453
+4,067
+9,736
+7,669
+3,095
+Derivative financial assets
+344,413
+9,406
+8,776
+212,487
+22,821
+25,330
+65,265
+2,678
+3,716
+8,057
+4,169
+on
+Three
+One to
+Less
+repayable
+Overdue/
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+than one
+31 December 2014
+(b) Liquidity risk (continued)
+ICBC
+230
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+1,278,463
+(529,145) 2,978,075 4,387,952 3,117,809
+Bank
+three
+months to
+One to
+2,023
+25,572
+106,694
+82,043
+536,533
+244,088
+other financial institutions (*)
+Due from banks and
+3,473,327
+2,950,038
+523,289
+Cash and balances with central banks
+Assets:
+Total
+Undated
+(***)
+More than
+five years
+five years
+one year
+months
+month
+demand
+(767,112)
+Assets:
+(339,167)
+Net liquidity gap
+1,280,864
+831,305
+7,602,977
+Due to customers
+1,568,559
+130,558
+10,274
+51,353
+39,796
+29,135
+3,237,621
+Certificates of deposit
+9,745
+173,382
+229,780
+555,362
+598,585
+institutions (**)
+Due to banks and other financial
+19,168
+548
+1,705
+1,610,908
+57,150
+14,620,825
+17,639,289
+266,402
+492,830
+11,704
+41,186
+132,042
+3,617,455 1,706,709
+1,850,219
+1,724,724
+8,473,780
+Total liabilities
+42,261
+52,946
+212,691
+Others
+253,018
+195,295
+27,992
+13,671
+6,490
+9,570
+Debt securities issued
+(7,569,949)
+996,953
+Total
+five years
+747,392
+37,605
+Loans and advances to customers
+24,048
+1,020
+2,524
+10,483
+5,525
+4,496
+865,101
+Derivative financial assets
+4,160
+13,506
+113,550
+122,230
+39,189
+19,025
+795
+through profit or loss
+Financial assets designated at fair value
+312,455
+34,373
+2,631,307
+3,690,574
+24,360
+174,503
+Others
+199,280
+199,280
+Property and equipment
+28,919
+28,919
+joint ventures
+2,697,265
+Investments in associates and
+14,412
+1,171,357
+2,311,141
+416,039
+134,162
+39,298
+Financial investments
+10,768,750
+99,506
+4,086,409
+383
+686
+2,007
+demand
+on
+Overdue/
+repayable
+31 December 2014
+Group
+(i) Analysis of the remaining maturity of the assets and liabilities is set out below:
+The Group and the Bank's expected remaining maturity of its financial instruments may vary significantly from the following
+analysis. For example, demand deposits from customers are expected to maintain a stable or increasing balance although
+they have been classified as repayable on demand in the following tables.
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+projecting cash flows and evaluating the level of current assets; and
+Less than
+one month
+maintaining the stability of the deposit base;
+•
+•
+•
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Liquidity risk is the risk that capital will not be sufficient or funds will not be raised at a reasonable cost in a timely manner
+to meet the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or
+maturity mismatches of assets and liabilities.
+(b) Liquidity risk
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+Undated
+optimising the structure of assets and liabilities;
+One to
+three
+months
+Three
+months to
+one year
+27,449
+3,693
+1,251,238
+30,310
+99,055
+113,831
+645,635
+155
+Financial assets held for trading
+362,407
+other financial institutions (*)
+Due from banks and
+3,523,622
+2,985,445
+538,177
+Cash and balances with central banks
+Assets:
+Total
+(***)
+Undated
+More than
+five years
+One to five
+years
+Total assets
+1,113,487
+1,480,361
+18,882
+1,180,383
+Includes reverse repurchase agreements.
+(*)
+1,537,304
+3,372,950
+4,628,344
+19,072,649
+285,888
+525,807
+11,398
+(**) Includes repurchase agreements.
+49,964
+203,898
+46,806
+176,248
+15,556,601
+37,292
+1,958,020
+3,361,635
+13,091
+141,568
+3,843,817 2,101,575
+(479,125) 3,082,273
+443
+21,738
+66,727
+279,590
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2014
+229
+five years
+one year
+months
+month
+demand
+Undated
+More than
+One to
+months to
+three
+than one
+on
+Three
+One to
+Less
+repayable
+Overdue/
+31 December 2013
+(b) Liquidity risk (continued)
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+53,404
+1,291,090
+11,189
+72,135
+1,963,316
+(782,933)
+(***)
+(325,851)
+Net liquidity gap
+Certificates of deposit
+922,373
+Due to banks and other financial institutions (**)
+Derivative financial liabilities
+53,267
+through profit or loss
+Financial liabilities designated at fair value
+631
+186
+206,035
+4,210
+494,320
+33,936
+150
+Due to central banks
+Liabilities:
+20,609,953
+3,372,950
+380,859
+40,845
+37,089
+4,914,232
+27,051
+5,183,848
+58,129
+3,364,692
+295
+265,024
+58,708
+6,351
+1,806,212
+9,071,841
+63,224
+187,518
+Total liabilities
+Others
+4,606
+Debt securities issued
+999,881
+7,908,683
+Due to customers
+24,191
+1,920,196
+31,858
+15,779
+191,326
+264,540
+999
+2,731
+10,612
+5,639
+589,385
+(7,958,354)
+Financial assets held for trading
+One to
+three months
+3,664
+53,706
+1,593,899
+3,174,854
+1,175,993
+699,396
+7,503,680
+Due to customers
+99,186
+8,815
+14,201,528
+28,822
+26,296
+Certificates of deposit
+1,236,066
+146
+1,759
+52,968
+216,130
+344,880
+620,183
+35,253
+other financial institutions (**)
+Debt securities issued
+Total liabilities
+ICBC
+232
+The tables below summarise the maturity profile of the Group's and of the Bank's financial instruments based on the
+contractual undiscounted cash flows. The balances of some items in the tables below are different from the balances on
+the statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group
+and the Bank's expected cash flows on these instruments may vary significantly from the following analysis. For example,
+demand deposits from customers are expected to maintain a stable or increasing balance although they have been classified
+as repayable on demand in the following tables.
+(ii) Maturity analysis of contractual undiscounted cash flows
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+1,268,175
+Others
+16,790,203
+462,779
+7,260
+220,481
+183,214
+7,127
+122,240 27,228
+3,394,456 1,663,062
+(401,621) 2,779,154 4,249,232 3,123,289
+25,347
+3,005
+1,788
+54,284
+42,212
+1,373,253 1,721,753
+(218,751) (704,039)
+209,555
+8,392,941
+(7,559,089)
+Net liquidity gap
+244,738
+Due to banks and
+16,986
+412
+833,852
+Total assets
+20,679
+22,507
+147,257
+Others
+121,716
+121,716
+Property and equipment
+1,154,502
+108,093
+Investments in subsidiaries and associates
+3,861,326
+2,083
+2,014,192 1,249,111
+467,733
+92,482
+35,725
+Financial investments
+9,169,446
+108,093
+1,017,714
+40,403
+17,685
+2,992,835 4,442,216
+19,835
+3,784
+7,287
+3,298
+552,759
+1,812
+1,158
+247,079
+243,187
+2,205
+Derivative financial liabilities
+59,523
+through profit or loss
+Financial liabilities designated at fair value
+418
+418
+Due to central banks
+Liabilities:
+18,058,378
+3,123,289
+4,493,970
+296,309
+27,943
+(b) Liquidity risk (continued)
+Group
+31 December 2014
+Notes to Financial Statements
+3,964
+4,564
+19,800
+146,900
+Others
+4,857,696
+14,412
+1,398,445
+2,696,242
+150
+539,907
+48,610
+Financial investments
+15,568,828
+151,851
+4,643,923
+3,217,940
+1,039,168
+819,226
+38,313
+160,080
+62
+8,259
+183,699
+five years
+150
+One to
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+demand
+Overdue/
+repayable on
+31 December 2014
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+25,810,947
+3,164,510
+7,071,583
+7,496,216
+4,019,801
+1,375,179
+1,596,495
+1,087,163
+Loans and advances to customers (**)
+54,396
+325,671
+13,910
+538,177
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+More than Undated
+five years
+five years
+one year
+4,030
+months
+demand
+One to
+Three
+months to
+three
+Less than
+One to
+Overdue/
+repayable on
+(In RMB millions, unless otherwise stated)
+31 December 2014
+one month
+2,985,445
+3,527,652
+Due from banks and other financial institutions (*)
+121,307
+124,895
+41,228
+19,376
+795
+through profit or loss
+Financial assets designated at fair value
+36,448
+383
+759
+2,291
+29,015
+3,836
+164
+Financial assets held for trading
+1,310,953
+32,303
+104,080
+122,273
+689,319
+362,978
+4,160
+3,213,682
+5,658,407
+2,313,664
+58,708
+265,024
+206,035
+53,223
+through profit or loss
+Financial liabilities designated at fair value
+226
+226
+Due to central banks
+6,227
+Liabilities:
+3,320,966
+4,769,927
+333,935
+25,471
+34,066
+24,779
+4,932,476
+48,807
+3,171,523
+1,069,642
+1,321,083
+19,553,715
+589,217
+Derivative financial liabilities
+3,801
+Due to customers
+137,109
+443
+Three
+months to
+47,779
+39,966
+28,620
+Certificates of deposit
+1,554,998
+4,835
+125,181
+223,864
+331,701
+869,417
+institutions (**)
+Due to banks and other financial
+22,324
+798
+2,140
+10,284
+5,301
+968,098
+Debt securities issued
+Total assets
+22,751
+1,838
+10,297
+5,331
+4,249
+Derivative financial assets
+310,398
+4,160
+13,506
+112,696
+577
+121,089
+19,025
+795
+through profit or loss
+Financial assets designated at fair value
+32,865
+651
+2,167,134
+26,820
+1,580
+39,127
+22,292
+31,294
+702,985
+168,632
+Others
+126,868
+126,868
+Property and equipment
+114,661
+114,661
+Investments in subsidiaries and associates
+2,727 3,958,201
+1,157,691
+2,247,973
+385,644
+128,776
+35,390
+Financial investments
+10,184,215
+97,041
+3,561,413
+2,518,038
+2,472,172
+801,272
+9,429
+Others
+Loans and advances to customers
+7,768,923
+7,211
+910
+Financial assets held for trading
+853,081
+2,128
+26,205
+120,913
+102,851
+382,942
+18,199
+218,042
+Due from banks and
+3,253,660
+2,799,652
+454,008
+Cash and balances with central banks
+Assets:
+Total
+(***)
+Undated
+other financial institutions (*)
+More than
+five years
+1,092
+27,607
+14,217
+761,913
+Total liabilities
+Loans and advances to customers
+23,049
+243
+3,591
+9,163
+7,248
+195
+2,804
+344,091
+8,776
+212,317
+22,760
+25,330
+65,174
+328
+through profit or loss
+Financial assets designated at fair value
+Derivative financial assets
+five years
+9,406
+months
+469,189
+7,426
+135,334
+3,644,445 2,052,325
+(472,922) 2,880,151 4,537,039 3,320,966
+44,936
+243,690
+189,801
+37,504
+6,665
+7,469
+68,472
+1,797,623
+(727,981)
+49,115
+163,906
+8,855,469 1,458,104
+(137,021)
+(7,887,371)
+Net liquidity gap
+2,251
+15,024,101
+34,420
+1,936,382
+one year
+3,260,494
+1,187,301
+836,581
+232,888
+18,040,854
+644,440
+(*)
+1,512,861
+One to
+month
+three
+than one
+on
+Three
+One to
+Less
+Overdue/
+repayable
+31 December 2013
+(b) Liquidity risk (continued)
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+231
+Annual Report 2014
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+demand
+months to
+253
+28,143
+69
+104
+27,717
+Due from banks and other financial institutions (*)
+1,049,887
+57,037
+14,742
+349,912
+628,196
+Financial assets designated at fair value
+3,294,007
+Financial assets held for trading
+though profit or loss
+9,311
+208
+Financial investments
+9,681,415
+94,027
+117,498
+704,622
+8,765,268
+Loans and advances to customers
+343,211
+25,020
+864
+16,003
+13,668
+Derivative financial assets
+344,413
+862
+132
+1,177
+22,619
+Others
+(equivalent
+3,217,297
+53,552
+87,527
+427,876
+1,773,168
+Credit commitments
+1,537,304
+13,204
+(50,288)
+299,727
+1,274,661
+Net position
+19,072,649
+265,119
+3,846,591
+330,988
+2,342,123
+(*)
+(**) Includes repurchase agreements.
+Annual Report 2014
+Cash and balances with central banks
+Total
+to RMB)
+to RMB)
+to RMB)
+RMB
+HKD
+(equivalent
+38,088
+(equivalent
+Assets:
+31 December 2013
+(c) Market risk (continued)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+245
+USD
+Includes reverse repurchase agreements.
+525,795
+2,956
+14,032,121
+Due to customers
+130,558
+11,812
+9,807
+78,806
+30,133
+Certificates of deposit
+553,607
+19,168
+1,568,559
+69,907
+19,373
+953,484
+Due to banks and other financial institutions (**)
+793
+2,183
+299,284
+188,478
+100,942
+14,620,825
+951,219
+1,120,050
+16,197,630
+492,830
+7,897
+6,629
+12,741
+8,864
+465,563
+Others
+253,018
+10,700
+1,781
+23,352
+217,185
+Debt securities issued
+Total liabilities
+76,616
+7,328
+59,514
+Others
+164,347
+1,280
+1,232
+23,891
+137,944
+Property and equipment
+28,515
+27,661
+196
+529
+129
+Investments in associates and joint ventures
+3,949,688
+23,525
+242,542
+23,986
+1,663
+84,126
+2,377
+491,716
+through profit or loss
+Financial liabilities designated at fair value
+724
+624
+100
+Derivative financial liabilities
+Due to central banks
+18,917,752
+305,767
+162,006
+1,227,416
+17,222,563
+Total assets
+352,317
+Liabilities:
+17,356,492
+Financial assets designated at fair value
+12,465
+Financial assets held for trading
+1,251,238
+47,076
+22,996
+407,649
+773,517
+Due from banks and other financial institutions (*)
+3,523,622
+26,006
+22,551
+37,638
+3,437,427
+Cash and balances with central banks
+Total
+Others
+(equivalent
+to RMB)
+33,048
+446
+200
+679
+148,227
+780,538
+9,743,072
+Loans and advances to customers
+24,048
+1,644
+3,157
+HKD
+(equivalent
+to RMB)
+12,517
+Derivative financial assets
+312,455
+145
+232
+312,078
+though profit or loss
+34,373
+6,730
+96,913
+to RMB)
+(equivalent
+2014
+2013
+Effect on equity
+Effect on profit
+before taxation
+2014
+Change in
+currency rate
+HKD
+USD
+Currency
+Bank
+(511)
+(585)
+848
+572
+-1%
+228,251
+2013
+(3)
+127
+(71)
+434
+(16)
+USD
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+Assets:
+31 December 2014
+Group
+RMB
+A breakdown of the assets and liabilities analysed by currency is as follows:
+ICBC
+244
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+-1%
+-1%
+(10)
+(12)
+(10)
+(c) Market risk (continued)
+525,807
+10,768,750
+3,936,518
+90,490
+57,040
+Certificates of deposit
+1,920,196
+106,206
+10,405
+532,625
+1,270,960
+Due to banks and other financial institutions (**)
+24,191
+2,157
+3,477
+14,609
+3,948
+Derivative financial liabilities
+9,793
+18,925
+176,248
+Due to customers
+5,993
+32,883
+474,466
+Total liabilities
+Others
+279,590
+15,294
+589,385
+3,891
+221,052
+Debt securities issued
+15,556,601
+122,302
+231,560
+403,863
+14,798,876
+39,353
+Financial investments
+53,227
+529,931
+1,565
+612
+44,757
+152,346
+Property and equipment
+28,919
+26,455
+1,424
+870
+170
+Investments in associates and joint ventures
+4,086,409
+38,208
+13,181
+98,502
+199,280
+Others
+236,247
+36,628
+through profit or loss
+Financial liabilities designated at fair value
+631
+412
+219
+Due to central banks
+Liabilities:
+6,227
+20,609,953
+214,831
+1,419,777
+18,631,153
+Total assets
+380,859
+105,501
+2,483
+344,192
+262,189
+Financial assets held for trading
+Net position
+23,898
+9,593
+507,956
+8,627,999
+Loans and advances to customers
+23,049
+1,058
+8,281
+13,710
+Derivative financial assets
+344,091
+862
+1
+343,228
+though profit or loss
+9,169,446
+Financial assets designated at fair value
+Financial investments
+38,790
+121,716
+78
+7
+221
+121,410
+Property and equipment
+108,093
+60,294
+30,504
+4,742
+12,553
+Investments in subsidiaries and associates
+3,861,326
+13,704
+1,614
+3,807,218
+27,607
+108
+27,499
+(equivalent
+USD
+Assets:
+31 December 2013
+(c) Market risk (continued)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+247
+Annual Report 2014
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,220,619
+53,342
+RMB
+to RMB)
+HKD
+(equivalent
+to RMB)
+HKD
+853,081
+52,242
+21,811
+160,486
+618,542
+Due from banks and other financial institutions (*)
+Others
+3,253,660
+2,264
+34,298
+3,209,507
+Cash and balances with central banks
+Total
+to RMB)
+Others
+(equivalent
+7,591
+205,272
+18,676
+455
+560,224
+15,989,116
+462,779
+3,805
+3,988
+8,068
+446,918
+Total liabilities
+Others
+220,481
+5,939
+1,300
+5,043
+208,199
+Debt securities issued
+66,953
+173,910
+16,790,203
+Net position
+248
+ICBC
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,309,736
+73,299
+14,201,528
+22,812
+1,824,552
+Credit commitments
+1,268,175
+57,723
+(705)
+213,335
+997,822
+389,073
+55,594
+31,650
+201,349
+491,418
+through profit or loss
+Financial liabilities designated at fair value
+418
+418
+Due to central banks
+Liabilities:
+18,058,378
+231,633
+66,248
+773,559
+16,986,938
+Total assets
+296,309
+71,906
+1,830
+59,511
+Derivative financial liabilities
+7,322
+13,934,111
+Due to customers
+99,186
+11,544
+5,910
+64,763
+16,969
+34,418
+Certificates of deposit
+60,230
+21,337
+270,320
+884,179
+Due to banks and other financial institutions (**)
+813
+8,851
+552,759
+16,986
+1,236,066
+347,315
+1,764,368
+Credit commitments
+310,398
+145
+63
+310,190
+though profit or loss
+Financial assets designated at fair value
+32,865
+64
+32,801
+Financial assets held for trading
+996,953
+44,037
+20,728
+184,773
+747,415
+Derivative financial assets
+6,819
+13,946
+1,527
+3,836
+16,920
+Investments in subsidiaries and associates
+3,958,201
+22,387
+1,350
+58,041
+Due from banks and other financial institutions (*)
+3,876,423
+10,184,215
+30,295
+9,773
+568,158
+9,575,989
+Loans and advances to customers
+22,292
+Financial investments
+34,331
+3,473,327
+2,391
+246
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,445,956
+95,306
+187,051
+358,832
+1,804,767
+Credit commitments
+1,278,463
+43,578
+(66,245)
+276,197
+1,024,933
+ICBC
+(c) Market risk (continued)
+Bank
+31 December 2014
+29,572
+3,429,507
+Cash and balances with central banks
+Assets:
+Total
+Others
+(equivalent
+to RMB)
+to RMB)
+11,857
+to RMB)
+(equivalent
+(equivalent
+HKD
+USD
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+RMB
+17,639,289
+59,574
+Property and equipment
+2,913
+14,523
+218,713
+Debt securities issued
+15,024,101
+34,382
+24,386
+269,220
+14,696,113
+Due to customers
+137,109
+18,666
+7,818
+64,469
+46,156
+7,541
+243,690
+Others
+Total liabilities
+1,512,861
+43,103
+17,429
+220,867
+1,231,462
+Net position
+18,040,854
+Certificates of deposit
+221,180
+661,365
+17,106,821
+469,189
+6,949
+3,006
+21,040
+438,194
+51,488
+114,661
+1,554,998
+13,365
+68,917
+882,232
+18,338,283
+Total assets
+333,935
+94,366
+337
+23,565
+215,667
+Others
+126,868
+95
+7
+214
+126,552
+264,283
+19,553,715
+Liabilities:
+Due to central banks
+269,703
+1,173,756
+Due to banks and other financial institutions (**)
+22,324
+2,020
+16,183
+4,121
+98,174
+Derivative financial liabilities
+53,222
+6,227
+529,768
+through profit or loss
+Financial liabilities designated at fair value
+226
+226
+589,217
+(192)
+378,505
+(86)
+597
+18,442
+8,599
+Financial assets held for trading
+1,049,887
+17,071
+3,133
+12,998
+112,495
+904,190
+other financial institutions (*)
+Due from banks and
+3,294,007
+368,370
+2,925,637
+170
+Cash and balances with central banks
+335
+Financial assets designated at
+3,447,561
+623,507
+327,092
+Financial investments
+5,948,681
+Loans and advances to customers
+25,020
+25,020
+Derivative financial assets
+344,413
+9,734
+6,984
+206,352
+26,644
+94,699
+fair value through profit or loss
+28,143
+Assets:
+Total
+bearing
+19,072,649
+525,807
+525,807
+1,090,318
+267,276
+1,022,777
+361,676
+2,014,083
+3,699,928
+1,147,908
+(1,047,439)
+Interest rate mismatch
+12,001,044
+Total liabilities
+Others
+279,590
+201,926
+32,344
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+five years
+five years
+interest-
+More than
+One to
+Non-
+Three
+months to
+one year
+96,671
+Less than
+three
+months
+31 December 2014
+Notes to Financial Statements
+31 December 2013
+(c) Market risk (continued)
+ICBC
+240
+(**) Includes repurchase agreements.
+(In RMB millions, unless otherwise stated)
+146,208
+42,294
+9,681,415
+3,237,299
+9,380,482
+Due to customers
+10,274
+51,353
+68,931
+Certificates of deposit
+1,568,559
+2,749
+2,211
+9,543
+173,563
+1,380,493
+other financial institutions (**)
+Due to banks and
+1,607,592
+54,442
+341,010
+130,558
+14,620,825
+246,361
+1,654,039
+3,475,027
+755,071
+(1,106,776)
+Interest rate mismatch
+11,348,578
+Total liabilities
+19,168
+492,830
+Others
+253,018
+189,708
+24,195
+11,483
+27,632
+Debt securities issued
+492,830
+21,977
+19,168
+553,607
+1,449
+4,230,098
+10,241,802
+Total assets
+32,904
+Others
+164,347
+164,347
+Property and equipment
+28,515
+28,515
+joint ventures
+Investments in associates and
+3,949,688
+6,262
+1,181,841
+28
+6
+317,930
+352,317
+59,527
+1,812
+1,279
+490,989
+fair value through profit or loss
+Financial liabilities designated at
+724
+Derivative financial liabilities
+623
+51
+Due to central banks
+Liabilities:
+18,917,752
+979,878
+1,338,342
+2,127,632
+50
+915,284
+23,343
+15,556,601
+Assets:
+Total
+Non-
+interest-
+bearing
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+Less than
+three
+months
+31 December 2014
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+(c) Market risk (continued)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+239
+Annual Report 2014
+Cash and balances with central banks
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's and the Bank's current interest rate risk profile. This effect, however, does not incorporate
+actions that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+3,097,706
+3,523,622
+Financial assets designated at
+34,373
+383
+666
+1,553
+27,444
+4,327
+Financial assets held for trading
+1,251,238
+5,585
+27,269
+101,192
+1,117,192
+other financial institutions (*)
+Due from banks and
+425,916
+23,794
+2013
+(22,475)
+(28,604)
+30,306
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming year,
+including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates on
+other comprehensive income, calculated by revaluing fixed rate available-for-sale financial assets held at year end, including
+the effect of any associated hedges.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held
+constant, of the Group's and the Bank's net interest income and equity.
+revenue.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+managing the deviation of the pricing of interest-generating assets and interest-bearing liabilities from the PBOC
+benchmark interest rates.
+optimising the differences in timing between contractual repricing (maturities) of interest-generating assets and
+interest-bearing liabilities; and
+•
+regularly monitoring the macroeconomic factors that may have impact on the PBOC benchmark interest rates;
+•
+The Group manages its interest rate risk by:
+The Group's interest rate risk mainly arises from the mismatches between the repricing dates of interest-generating assets
+and interest-bearing liabilities. The Group's interest-generating assets and interest-bearing liabilities are mainly denominated
+in RMB.
+(ii) Interest rate risk
+(c) Market risk (continued)
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+Group
+Effect on net interest income
+Effect on equity
+Change in basis points
+2014
+2013
+(4,408)
+4,408
+Effect on equity
+2014
+(1,891)
+1,891
+Effect on net interest income
+-100 basis points
++100 basis points
+fair value through profit or loss
+Change in basis points
+2013
+(23,845)
+25,219
+2014
+(30,483)
+32,354
+2013
+(3,625)
+3,625
+(1,635)
+1,635
+-100 basis points
++100 basis points
+2014
+Bank
+59,088
+122,379
+112,527
+24,191
+24,191
+Derivative financial liabilities
+589,385
+53,267
+6,351
+58,708
+471,059
+fair value through profit or loss
+Financial liabilities designated at
+631
+186
+150
+295
+Due to central banks
+Due to banks and
+other financial institutions (**)
+1,675,165
+193,198
+480,865
+34,420
+1,953,002
+3,360,963
+9,727,351
+Due to customers
+176,248
+Liabilities:
+443
+64,932
+103,831
+Certificates of deposit
+1,920,196
+6,188
+30,487
+15,158
+7,042
+Debt securities issued
+20,609,953
+1,290,053
+336,616
+Financial investments
+10,768,750
+72,744
+146,863
+159,555
+4,053,430
+6,336,158
+Loans and advances to customers
+24,048
+24,048
+Derivative financial assets
+312,455
+4,955
+13,506
+534,238
+2,074,855
+1,129,018
+11,682
+2,375,759
+380,859
+369,188
+9,153
+4,847,836
+10,953,605
+Total assets
+2,518
+1,142,700
+Others
+199,280
+Property and equipment
+28,919
+28,919
+joint ventures
+Investments in associates and
+4,086,409
+199,280
+17,639,289
+473,593
+1,091,981
+108,093
+108,093
+Investments in
+3,861,326
+2,053
+1,172,354
+1,767,610
+603,038
+316,271
+Financial investments
+9,169,446
+40,587
+119,474
+59,360
+3,370,294
+121,716
+5,579,731
+121,716
+161
+Liabilities:
+Total assets
+Others
+Property and equipment
+subsidiaries and associates
+18,058,378
+984,743
+1,302,099
+2,034,721
+4,114,644
+9,622,171
+296,309
+295,797
+3
+16
+332
+Loans and advances to customers
+23,049
+23,049
+734,452
+other financial institutions (*)
+Due from banks and
+3,253,660
+365,442
+2,888,218
+Cash and balances with central banks
+Assets:
+Total
+bearing
+five years
+five years
+one year
+months
+interest-
+96,163
+1,061
+3,133
+18,272
+Derivative financial assets
+344,091
+9,734
+6,985
+206,182
+26,583
+94,607
+Due to central banks
+fair value through profit or loss
+27,607
+150
+492
+18,405
+8,560
+Financial assets held for trading
+853,081
+Financial assets designated at
+418
+418
+Financial liabilities designated at
+243
+Annual Report 2014
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+N/A
+N/A
+1,070,519
+16,790,203
+810,803
+231,580
+1,628,240
+406,481
+3,258,373
+856,271
+(1,239,036)
+Interest rate mismatch
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+(iii) Currency risk
+(42)
+-1%
+USD
+2013
+2014
+2013
+2014
+10,861,207
+Effect on equity
+Change in
+currency rate
+Currency
+Group
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant, on profit before taxation and
+equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity, while a positive
+amount reflects a potential net increase. This effect, however, is based on the assumption that the Group's foreign exchange
+exposures as at the year end are kept unchanged and, therefore, have not incorporated actions that would be taken by the
+Group to mitigate the adverse impact of this currency risk.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+Effect on profit
+before taxation
+More than
+Total liabilities
+462,779
+139
+1,739
+47,784
+1,185,047
+other financial institutions (**)
+Due to banks and
+16,986
+16,986
+Derivative financial liabilities
+552,759
+59,524
+1,812
+1,158
+490,265
+fair value through profit or loss
+1,357
+1,236,066
+Certificates of deposit
+61,549
+Others
+220,481
+177,735
+21,557
+5,755
+15,434
+Debt securities issued
+462,779
+99,186
+14,201,528
+53,706
+1,593,899
+3,174,854
+9,108,912
+Due to customers
+8,815
+28,822
+270,157
+One to
+months to
+Non-
+59,402
+3,907,837
+6,033,430
+Loans and advances to customers
+22,292
+22,292
+Derivative financial assets
+310,398
+4,955
+13,506
+111,674
+121,238
+59,025
+fair value through profit or loss
+Financial assets designated at
+111,002
+32,865
+72,544
+Financial investments
+417
+Others
+126,868
+126,868
+Property and equipment
+114,661
+114,661
+subsidiaries and associates
+Investments in
+3,958,201
+2,697
+1,114,350
+2,014,637
+505,118
+321,399
+10,184,215
+651
+1,153
+26,820
+Three
+months to
+one year
+Less than
+three
+months
+31 December 2014
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Bank's assets and
+liabilities:
+(c) Market risk (continued)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+241
+Annual Report 2014
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+N/A
+N/A
+One to
+five years
+More than
+five years
+Non-
+interest-
+bearing
+4,241
+Financial assets held for trading
+996,953
+9,732
+2,023
+25,572
+106,694
+58
+852,932
+Due from banks and
+3,473,327
+422,896
+3,050,431
+Cash and balances with central banks
+Assets:
+Total
+other financial institutions (*)
+(184)
+333,460
+Total assets
+930,416
+224,664
+1,974,548
+3,505,791
+11,405,435
+Total liabilities
+469,189
+469,189
+Others
+243,690
+189,801
+21,403
+16,150
+16,336
+Debt securities issued
+18,040,854
+Interest rate mismatch
+(1,083,560)
+1,161,974
+Three
+Less than
+three
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+31 December 2013
+(c) Market risk (continued)
+15,024,101
+ICBC
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+N/A
+N/A
+1,016,868
+237,890
+242
+333,935
+34,420
+3,260,487
+53,223
+6,227
+58,708
+471,059
+fair value through profit or loss
+Financial liabilities designated at
+226
+589,217
+226
+Liabilities:
+19,553,715
+1,110,105
+1,241,532
+2,212,438
+4,667,765
+10,321,875
+Due to central banks
+1,936,382
+Derivative financial liabilities
+22,324
+9,414,307
+Due to customers
+137,109
+443
+5,701
+46,014
+84,951
+22,324
+Certificates of deposit
+1,554,998
+7,175
+4,835
+124,432
+1,418,556
+other financial institutions (**)
+Due to banks and
+1,810,986
+1,951
+20,341
+108,202
+155,102
+Financial liabilities:
+Derivative financial liabilities
+Exchange rate contracts
+(650)
+(1,096)
+Interest rate contracts
+(552)
+(236)
+Commodity derivatives and others
+(52)
+(1,254)
+(1,314)
+(51)
+Financial assets:
+Derivative financial assets
+5
+(1,319)
+59
+3
+(726)
+(34)
+481
+8
+(2,079)
+As at
+1 January
+Total gains/
+(losses)
+recorded in
+2013
+422
+profit or loss
+(2,665)
+57,353
+770
+(1)
+32
+(370)
+(51)
+1,942
+Financial assets designated at fair value
+through profit or loss
+140,566
+6,857
+43,793
+(52,212)
+139,004
+(52,456)
+Available-for-sale financial assets
+3,141
+(142)
+136
+13,256
+(244)
+(2,295)
+13,852
+Equity investment
+304
+304
+144,819
+7,966
+136
+Debt securities
+(51)
+Total losses
+recorded
+in other
+comprehensive
+income
+As at
+Financial assets designated at fair value
+through profit or loss
+2,834
+Available-for-sale financial assets
+Debt securities
+128,082
+(3,088)
+12,738
+140,566
+1,015
+3
+21
+2,467
+1,112
+(95)
+(19)
+3,141
+2,398
+3,176
+21
+130,594
+(3,183)
+(827)
+12,640
+144,819
+Financial liabilities:
+Derivative financial liabilities
+Exchange rate contracts
+(251)
+Transfers to
+Level 2 from
+(79)
+(74)
+31 December
+Additions
+Disposals
+Settlements
+Level 3
+2013
+Exchange rate contracts
+178
+331
+Interest rate contracts
+896
+6
+44
+52
+Commodity derivatives and others
+2
+1
+1,383
+339
+45
+(1)
+508
+(389)
+(186)
+(576)
+' @gË
+(5)
+552
+309
+(52)
+1,140
+(317)
+1,100
+23,049
+Available-for-sale financial assets
+Equity investment
+Debt securities
+1,269
+101
+1,370
+29,504
+882,512
+914,488
+30,773
+882,613
+21,949
+2,472
+31,372
+1,135,095
+144,138
+1,310,605
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+Wealth management products
+Structured deposits
+Financial liabilities related to
+precious metals
+Debt securities issued
+915,858
+349,634
+3,605
+3,554
+27,607
+Financial assets designated at fair value
+through profit or loss
+Debt securities
+Other debt instruments
+491
+102,214
+102,705
+70,689
+70,689
+Others
+30,131
+140,566
+51
+170,697
+203,034
+140,566
+344,091
+Derivative financial assets
+Exchange rate contracts
+Interest rate contracts
+Commodity derivatives and others
+16,313
+497
+16,810
+2,082
+552
+2,634
+491
+141,790
+59,524
+1,811
+Group
+Financial assets:
+Derivative financial assets
+As at
+1 January
+Total gains/
+(losses)
+recorded in
+Total losses
+recorded
+in other
+2014
+profit or loss
+comprehensive
+income
+Additions
+Disposals
+Settlements
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and liabilities which
+are recorded at fair value and the movement during the year:
+Transfers to
+Level 2 from
+Level 3
+31 December
+2014
+Exchange rate contracts
+508
+949
+Interest rate contracts
+552
+321
+Commodity derivatives and others
+52
+(19)
+1,112
+1,251
+As at
+(b) Movement in level 3 financial instruments measured at fair value
+(In RMB millions, unless otherwise stated)
+31 December 2014
+552,759
+| I
+349,634
+141,790
+59,524
+1,811
+552,759
+Derivative financial liabilities
+Exchange rate contracts
+11,138
+506
+11,644
+Interest rate contracts
+2,386
+548
+2,934
+Commodity derivatives and others
+2,356
+52
+2,408
+15,880
+1,106
+16,986
+568,639
+1,106
+569,745
+Annual Report 2014
+255
+Notes to Financial Statements
+(180)
+27,499
+(467)
+(943)
+12,738
+140,566
+3
+(5)
+2,467
+(95)
+(216)
+(19)
+2,472
+1,487
+3,172
+(5)
+130,594
+(3,088)
+(3,183)
+12,640
+144,138
+Financial liabilities:
+Derivative financial liabilities
+Exchange rate contracts
+(180)
+(327)
+1
+(506)
+Interest rate contracts
+(943)
+(7)
+(44)
+(567)
+441
+128,082
+(79)
+Exchange rate contracts
+178
+327
+Interest rate contracts
+896
+6
+44
+Commodity derivatives and others
+76
+2
+1
+1,150
+335
+1,100
+45
+through profit or loss
+2,834
+Available-for-sale financial assets
+Debt securities
+(8)
+497
+(389)
+(5)
+552
+46
+(74)
+51
+(351)
+Financial assets designated at fair value
+337
+5
+Commodity derivatives and others
+6,764
+2013
+Realised
+Group
+Unrealised
+Bank
+Total
+Realised
+Unrealised
+Total
+Total gains for the year
+33
+2,657
+2,690
+1,044
+37
+2,836
+(c) Transfers between levels
+(i)
+Transfers between level 1 and level 2
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy on the balance sheet date.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy on
+the balance sheet date.
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+(ii) Transfers between level 2 and level 3
+On the balance sheet date, certain financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+(d) Valuation of financial instruments with significant unobservable inputs
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+As at 31 December 2014, the carrying amount of financial instrument valued with significant unobservable inputs
+were immaterial, and the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were also immaterial.
+2,799
+(548)
+5,720
+984
+(76)
+(2)
+(1)
+(47)
+74
+(52)
+(1,199)
+(336)
+(45)
+395
+79
+(1,106)
+Annual Report 2014
+6,652
+257
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Gains or losses on level 3 financial instruments included in the statement of profit or loss for the year comprise:
+2014
+Realised
+Group
+Unrealised
+Total
+Realised
+Bank
+Unrealised
+Total
+Total gains for the year
+5,668
+Notes to Financial Statements
+2013
+Level 3
+Settlements
+2014
+profit or loss
+Total losses
+recorded
+in other
+comprehensive
+income
+Transfers to
+Level 2 from
+As at
+31 December
+Additions
+Disposals
+Settlements
+Level 3
+2014
+Exchange rate contracts
+497
+Total gains/
+(losses)
+recorded in
+959
+1,149
+Interest rate contracts
+552
+321
+(52)
+(51)
+770
+Commodity derivatives and others
+51
+(19)
+32
+1,100
+1,261
+(307)
+(359)
+1 January
+Derivative financial assets
+(17)
+(44)
+Commodity derivatives and others
+(76)
+(2)
+(1)
+འs+
+(3)
+447
+(47)
+152
+(650)
+(552)
+As at
+74
+(1,199)
+(486)
+(45)
+397
+79
+(1,254)
+256
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Bank
+Financial assets:
+(52)
+(51)
+1,951
+Financial assets designated at fair value
+(1,106)
+(1,264)
+344
+44
+287
+5
+(1,263)
+57
+3
+(721)
+(34)
+8
+(2,018)
+18
+-
+Derivative financial assets
+Total losses
+As at
+1 January
+Total gains/
+(losses)
+recorded in
+2013
+profit or loss
+recorded
+in other
+comprehensive
+income
+Transfers to
+Level 2 from
+As at
+31 December
+Additions
+Disposals
+Financial assets:
+(52)
+Commodity derivatives and others
+(233)
+through profit or loss
+140,566
+6,857
+41,905
+(52,212)
+137,116
+Available-for-sale financial assets
+Debt securities
+2,472
+(90)
+112
+5,418
+(2,295)
+5,617
+144,138
+8,028
+112
+47,323
+(52,212)
+(2,654)
+(51)
+144,684
+Financial liabilities:
+Derivative financial liabilities
+Exchange rate contracts
+(506)
+(1,049)
+Interest rate contracts
+(548)
+Interest rate contracts
+108
+Debt securities
+Financial assets held for trading
+Debt securities
+Equity investments
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+31 December 2013
+27,808
+(a) Financial instruments recorded at fair value (continued)
+252
+613,576
+2,079
+611,472
+25
+24,191
+2,079
+22,087
+25
+1,383
+34
+1,324
+25
+ICBC
+Commodity derivatives and others
+335
+220
+2,516
+Interest rate contracts
+18,141
+508
+17,633
+Exchange rate contracts
+Derivative financial assets
+344,413
+140,566
+203,033
+814
+170,697
+140,566
+- - 335
+30,131
+70,689
+70,689
+Other debt instruments
+103,027
+102,213
+814
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+28,143
+27,588
+555
+27,588
+Others
+552
+2,387
+1,661
+14,156
+155,102
+1,311,605
+91,664
+11,751
+11,751
+1,082,623
+90,716
+Other debt instruments
+10,889
+1,164,855
+13,852
+1,070,162
+80,841
+Debt securities
+304
+1,187,495
+710
+Equity investments
+Available-for-sale financial assets
+24,048
+1,942
+22,020
+86
+2,405
+32
+2,287
+86
+Commodity derivatives and others
+2,410
+770
+9,875
+726
+1,558,371
+fair value on a recurring basis:
+Interest rate contracts
+20,421
+1,319
+19,102
+Exchange rate contracts
+Derivative financial liabilities
+589,385
+164
+6,227
+53,227
+| | | |
+589,385
+312,336
+217,431
+Financial liabilities which are measured at
+164
+53,227
+217,431
+| | ||
+Others
+Other debt securities issued
+312,336
+| |
+Structured deposits
+precious metals
+Financial liabilities related to
+Wealth management products
+Financial liabilities designated at fair value
+through profit or loss
+6,227
+3,068
+Commodity derivatives and others
+205
+10,020
+22,781
+64
+32,865
+10,020
+22,845
+Other debt instrument
+Debt securities
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+64
+Level 2
+31 December 2014
+Bank
+(a) Financial instruments recorded at fair value (continued)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+253
+Annual Report 2014
+572,775
+1,254
+571,521
+19,168
+1,254
+Level 1
+17,914
+32,801
+through profit or loss
+2,378
+32
+2,346
+Commodity derivatives and others
+1,791
+770
+1,021
+Interest rate contracts
+18,123
+1,149
+16,974
+Exchange rate contracts
+Derivative financial assets
+Financial assets designated at fair value
+310,398
+173,074
+208
+137,911
+137,116
+795
+Others
+71,096
+71,096
+Other debt instruments
+101,391
+101,183
+208
+Debt securities
+137,116
+2,409
+52
+2,357
+1,397,575
+144,819
+1,174,056
+78,700
+999,999
+3,141
+919,732
+77,126
+6,220
+6,220
+Other debt instruments
+988,318
+3,141
+Financial liabilities which are measured at
+912,610
+Debt securities
+5,461
+902
+4,559
+Equity investments
+Available-for-sale financial assets
+25,020
+1,112
+23,703
+205
+3,811
+52
+3,554
+72,567
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+3,395
+552
+2,843
+13,364
+650
+12,714
+553,607
+163
+553,607
+| | ||
+Commodity derivatives and others
+Interest rate contracts
+Exchange rate contracts
+Derivative financial liabilities
+59,527
+2,358
+349,634
+141,925
+| | | |
+163
+2,358
+59,527
+141,925
+| | || |
+349,634
+I I
+Wealth management products
+Other debt securities issued
+Others
+precious metals
+Financial liabilities related to
+Structured deposits
+1,640
+Interest rate contracts
+19,233
+1,140
+31 December 2013
+31 December 2014
+The capital adequacy ratios calculated in accordance with Regulation Governing Capital of Commercial Banks (Provisional)
+and relevant requirements promulgated by the CBRC are as follows:
+(d) Capital management (continued)
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+249
+Annual Report 2014
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements promulgated
+by the CBRC. The requirements pursuant to these regulations may have certain differences comparing to those applicable in
+Hong Kong and other jurisdictions.
+The CBRC requires commercial banks to meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For systemically important banks, CBRC requires
+minimum core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, CBRC requires corresponding minimum ratios of 7.50%, 8.50%
+and 10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and
+the requirements of capital adequacy ratios differ by countries.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations promulgated by the CBRC. In April 2014,
+CBRC officially approved the Bank to adopt advanced capital management approaches. Within the scope of the approval,
+the foundation internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit
+risk, the internal model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory
+requirements.
+Core tier 1 capital
+The Group's Management monitors the capital adequacy and the use of regulatory capital regularly based on regulations
+issued by the CBRC. The required information is respectively filed with the CBRC by the Group and the Bank semi-annually
+and quarterly.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution policy,
+issue or repurchase own shares, other tier 1 capital instruments, qualifying tier 2 capital instruments and convertible bonds,
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrated the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+•
+•
+•
+The Group's objectives on capital management are:
+(d) Capital management
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+22,292
+Available-for-sale financial assets
+etc.
+Equity investment
+1,498,403
+Paid-in capital
+1,474
+1,279
+Other intangible assets other than land use rights
+8,049
+8,487
+Goodwill
+9,503
+11,670
+(24,038)
+(24,839)
+1,956
+2,191
+512,024
+1,276,344
+650,308
+221,622
+123,870
+150,752
+Core tier 1 capital deductions:
+Others
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+144,874
+Valid portion of capital reserve
+351,390
+353,495
+202,940
+1,965
+1,965
+Debt securities
+589,217
+589,217
+17,646
+1,263
+18,909
+1,337
+721
+2,058
+1,323
+34
+1,357
+20,306
+2,018
+6,227
+22,324
+2,018
+611,541
+(a) Financial instruments recorded at fair value (continued)
+31 December 2013
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Level 1
+Level 2
+Level 3
+Total
+Financial assets which are measured at
+fair value on a recurring basis:
+609,523
+53,223
+6,227
+53,223
+41,497
+1,032,226
+5,617
+Other debt instrument
+43,462
+43,734
+8,079
+1,040,305
+1,266,521
+5,617
+1,079,340
+8,079
+1,089,384
+144,684
+1,454,939
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+Wealth management products
+Structured deposits
+Financial liabilities related to
+precious metals
+Debt securities issued
+Derivative financial liabilities
+Exchange rate contracts
+Interest rate contracts
+Commodity derivatives and others
+254
+ICBC
+| |
+312,336
+217,431
+312,336
+217,431
+Cash flow hedge reserves that relate to the hedging of items
+258
+that are not fair valued on the balance sheet
+(3,920)
+Equity investments
+Financial assets held for trading
+Total
+Level 3
+Level 2
+Level 1
+fair value on a recurring basis:
+Financial assets which are measured at
+31 December 2014
+Group
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+(a) Financial instruments recorded at fair value
+(In RMB millions, unless otherwise stated)
+Debt securities
+31 December 2014
+251
+Annual Report 2014
+For unquoted other liabilities designated at fair value through profit or loss, discounted cash flow model is used based on
+current yield curve appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and
+Heston model is applied based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which
+is calibrated by active market quotes of standard European options with the same underlying.
+Other liabilities designated at fair value through profit or loss
+Structured products are mainly valued using dealer's quotations.
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc.
+Derivatives
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+Financial investments
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the
+framework of fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter
+solutions. Operating procedures specify measurement operating procedures, valuation date, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for
+daily transactions management. Financial Accounting Department plays a lead role of developing accounting policies of fair
+value measurement, valuation methodologies and system implementation. Risk Management Department is responsible for
+verifying trade details and valuation models.
+techniques which use inputs which have a significant effect on the recorded fair value that are not based on
+observable market data.
+Notes to Financial Statements
+techniques for which all inputs which have a significant effect on the recorded fair value are observable, either
+directly or indirectly; and
+Other debt instruments
+383
+18,093
+Exchange rate contracts
+Derivative financial assets
+312,455
+139,004
+173,074
+377
+139,799
+139,004
+795
+Others
+71,096
+71,096
+383
+Other debt instruments
+101,183
+377
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+34,373
+33,888
+485
+10,020
+10,020
+23,970
+23,868
+102
+101,560
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 3:
+Level 2:
+Valid portion of minority interests
+134,857
+118,633
+Surplus provision for loan impairment
+189,877
+187,829
+Valid portion of tier 2 capital instruments and related premium
+324,806
+306,704
+Tier 2 capital
+1,266,859
+1,521,233
+Net tier 1 capital
+Tier 2 capital deductions
+18
+Valid portion of minority interests
+34,428
+Additional tier 1 capital instruments and related premium
+18
+34,500
+Additional tier 1 capital
+1,266,841
+1,486,733
+Net core tier 1 capital
+3,900
+5,700
+financial institutions that are under control but not subject to
+consolidation
+Investments in core tier 1 capital instruments issued by
+72
+242
+15,800
+72
+19,400
+Level 1:
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+55. FAIR VALUE OF FINANCIAL INSTRUMENTS
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Notes to Financial Statements
+ICBC
+250
+As at 31 December 2014, it refers to risk-weighted assets after capital floor and adjustments.
+(i)
+13.12%
+14.53%
+Capital adequacy ratio
+10.57%
+12.19%
+Tier 1 capital adequacy ratio
+10.57%
+11.92%
+Core tier 1 capital adequacy ratio
+11,982,187
+12,475,939
+Risk-weighted assets (i)
+1,572,265
+1,812,137
+Net capital base
+19,400
+15,800
+issued by financial institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital instruments
+(3,796)
+ICBC
+2,472
+Index
+Spot liabilities
+1,202,996
+(945,124)
+160,578
+(228,251)
+276,826
+(262,189)
+1,640,400
+(1,435,564)
+Spot assets
+Forward purchases
+124,180
+261,060
+1,099,581
+Forward sales
+(928,733)
+(43,345)
+714,341
+31 December 2013
+Total
+Others
+Net option position
+1,364
+1,364
+Net long/(short) position
+29,831
+40,703
+(1,431)
+69,103
+Net structural position
+27,348
+1,570
+28,020
+56,938
+USD
+HKD
+(265,291)
+(1,237,369)
+Net option position
+(11,255)
+.
+investments in overseas subsidiaries, associates and joint ventures.
+(d) Cross-border claims
+The Group is principally engaged in business operations within Mainland China, and regards all claims on third parties
+outside Mainland China as cross-border claims.
+Cross-border claims include loans and advances to customers, balances with central banks, amounts due from banks and
+other financial institutions and debt investments.
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of cross-border
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose head
+office is located in another country.
+Banks and
+Public
+other financial
+sector
+institutions
+entities
+Others
+Total
+31 December 2014
+capital and statutory reserves of overseas branches; and
+1,903,117
+(1,697,412)
+1,358,653
+(1,496,619)
+•
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+(11,255)
+Net long/(short) position
+32,225
+13,162
+10,406
+55,793
+Net structural position
+18,325
+1,428
+28,941
+48,694
+262
+ICBC
+Unaudited Supplementary Financial Information
+31 December 2014
+(In RMB millions, unless otherwise stated)
+property and equipment, net of depreciation charges;
+Asia Pacific excluding Mainland China
+(361,857)
+(1,100,639)
+Given that the closing price of the A shares of the Bank from 19 November 2014 to 30 December 2014 is not less than
+130% (i.e., RMB4.25 per share) of the prevailing conversion price of the ICBC Convertible Bonds (RMB3.27 per share) for
+15 trading days out of 30 consecutive trading days, the redemption clause of the Convertible Bonds has been triggered
+according to the Prospectus in Relation to the Public Issuance of the A Share Convertible Corporate Bonds of the Bank. By
+a resolution of the board of directors of the Bank, it was resolved that the Bank would exercise its right of early redemption
+of the Convertible Bonds to redeem all outstanding ICBC Convertible Bonds which appear on the register of bonds on the
+Redemption Record Date. The early redemption of the Convertible Bonds was approved by the CBRC. The Redemption
+Price for the current redemption of the ICBC Convertible Bonds is RMB100.629 per bond (including included tax accrued
+interest for the current period RMB0.629 per bond), and the redemption amount was paid on 26 February 2015. The ICBC
+Convertible bonds (113002) and the ICBC Converted Shares (191002) have been delisted from the Shanghai Stock Exchange
+from 26 February 2015.
+57. AFTER THE REPORTING PERIOD EVENT
+The profit distribution plan
+A final dividend of RMBO.2554 per share after the appropriation of statutory surplus reserve and general reserve, was
+approved at the board of directors' meeting held on 26 March 2015, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of shares issued as at 31 December 2014,
+the final dividend amounted to RMB91,026 million. The dividend payable was not recognised as a liability as at 31 December
+2014.
+58. COMPARATIVE AMOUNTS
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+(c) Redemption of convertible bond
+59. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+Annual Report 2014
+261
+Unaudited Supplementary Financial Information
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+The financial statements were approved and authorised for issue by the board of directors on 26 March 2015.
+The Bank has submitted the issuance of domestic preference shares to relevant regulatory authorities for approval in
+accordance with relevant laws and regulations. On 9 March 2015, the Bank has received the "Approval from CBRC
+concerning the Issuance of Domestic Preference Shares by Industrial and Commercial Bank of China Limited" (Yin Jian Fu
+[2015] No. 189) pursuant to which, approval was granted to the Bank by the CBRC to issue no more than 450 million
+domestic preference shares raising proceeds not exceeding RMB45 billion which will be counted as Additional Tier-1 Capital
+of the Bank in accordance with relevant regulatory requirements.
+The issuance of offshore preference shares has been completed on 10 December 2014. The listing of the offshore preference
+shares on The Stock Exchange of Hong Kong Limited has become effective on 11 December 2014. The net amount of the
+offshore insurance of preference shares was RMB34.4 billion or its equivalent.
+The meeting of the board of directors and the shareholders' general meeting of the Bank were held on 25 July 2014 and 19
+September 2014 respectively, at which the Proposal in respect of Issuance of offshore Preference Shares by Industrial and
+Commercial Bank of China Limited and the Proposal in respect of Issuance of Domestic Preference Shares by Industrial and
+Commercial Bank of China Limited were considered and approved, with an aggregate amount of not more than RMB80
+billion or its equivalent. The Bank proposes to issue domestic preference shares with an aggregate amount of not more than
+RMB45 billion and offshore preference shares with an aggregate amount of not more than RMB35 billion or its equivalent.
+The specific issuance amount was determined by shareholders' general meeting under the authorization of the board of
+directors within the above limit. The funds raised through issuing domestic and offshore preferred shares will be totally used
+to replenish the Bank's capital after deducting issuance fee.
+Reverse repurchase agreements
+Loans and advances to customers
+Other financial assets
+Liabilities
+Due to banks and other financial institutions
+Repurchase agreements
+Due to customers
+Other financial liabilities
+56. OTHER IMPORTANT MATTERS
+(a) Acquire 60% shares of Standard Bank Plc
+The Bank entered into a share purchase agreement on 29 January 2014. Under the share purchase agreement, the Bank
+agreed to acquire 60 percent of the existing issued shares in Standard Bank Plc ("SB Plc") from Standard Bank London
+Holdings Limited ("SBLH"). Standard Bank Group Limited ("SBG") entered into the share purchase agreement as guarantor
+of the performance of SBLH's obligations. The Bank also has a five-year option to acquire a further 20 percent of the
+existing issued shares of SB Plc, exercisable from the second anniversary of the date that the transaction is completed (the
+"Call Option"). SBLH will have a put option, exercisable six months following the date on which the Bank's Call Option is
+exercised, to require the Bank to purchase all of the shares held by SBLH and its affiliates.
+The Transaction completed on 1 February 2015, Beijing time. As of the issuing date of the report, SB Plc is held as to 60 per
+cent by the Bank.
+260
+ICBC
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(b) The issuance of preference shares
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and
+IFRSS for the year ended 31 December 2014 (2013: no differences). There are no differences between the equity attributable
+to equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2014 (31 December 2013: no
+differences).
+(b) Liquidity ratios
+As at
+31 December
+USD
+HKD
+Others
+Total
+31 December 2014
+Spot assets
+Spot liabilities
+1,374,150
+(1,101,771)
+212,795
+(264,653)
+316,172
+(330,988)
+Forward purchases
+856,727
+126,684
+375,242
+Forward sales
+(c) Foreign currency concentrations
+(34,123)
+The Hong Kong Banking (Disclosure) Rules (the "Rules") took effect on 1 January 2007. It requires the disclosure of an
+average liquidity ratio, which is the arithmetic mean of the liquidity ratios for each calendar month liquidity ratio. The Group
+prepares the liquidity ratio on a semi-annual basis and the disclosed average liquidity ratio is the arithmetic mean of two
+consecutive liquidity ratios as at 30 June and 31 December.
+64.25%
+2014
+Average for
+the year ended
+31 December
+2014
+As at
+31 December
+RMB current assets to RMB current liabilities
+33.19%
+33.37%
+2013
+30.20%
+Average for
+the year ended
+31 December
+2013
+31.02%
+Foreign currency current assets to
+foreign currency current liabilities
+91.10%
+86.14%
+60.98%
+The above liquidity ratios are calculated in accordance with the formula promulgated by the CBRC and based on the
+financial information prepared in accordance with PRC GAAP.
+Due from banks and other financial institutions
+80,328
+371,629
+147,319
+2,792
+1,634
+1,102
+12,933
+14,035
+751,728
+Real estate
+406,577
+6,213
+4,198
+2,157
+9,067
+11,224
+530,103
+gas and water
+Production and supply of electricity, heating
+30,048
+Transportation, storage and postal services
+1,439,285
+425,696
+6,666
+4,788
+2,117
+24,733
+26,850
+Wholesale and retail
+923,005
+515,576
+56,773
+35,935
+14,754
+15,294
+Water, environment and public utility management
+477,193
+251,171
+1,098
+6,149
+Construction
+220,860
+103,291
+2,901
+1,312
+556
+3,785
+4,341
+Lodging and catering
+224,994
+157,739
+3,217
+1,715
+798
+5,165
+44,497
+984
+3,034
+101
+41
+8,226
+8,267
+Leasing and commercial services
+624,046
+404,920
+5,093
+2,319
+745
+10,720
+11,465
+Mining
+301,261
+44,742
+1,708
+13,509
+27,695
+36,184
+entities
+Others
+Total
+31 December 2013
+Asia Pacific excluding Mainland China
+73,091
+sector
+3,587
+431,645
+―of which attributed to Hong Kong
+25,702
+123
+226,158
+251,983
+354,967
+other financial
+institutions
+Public
+Banks and
+465,466
+of which attributed to Hong Kong
+25,733
+2,531
+255,482
+283,746
+North and South America
+91,568
+650
+70,780
+162,998
+171,896
+14,159
+442,409
+628,464
+North and South America
+93,327
+168
+39,743
+Loans and
+advances
+individually
+Allowance for impairment losses
+and advances
+to customers*
+assessed to
+Individually
+Collectively
+be impaired
+assessed
+assessed
+Total
+Manufacturing
+1,642,460
+712,403
+57,155
+Overdue loans
+16,802
+Loans and
+advances
+covered by
+collateral
+Gross loans
+and advances
+133,238
+166,418
+3,755
+394,710
+564,883
+Annual Report 2014
+263
+Unaudited Supplementary Financial Information
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(e) Loans and advances to customers
+(i)
+Analysis by industry sector
+31 December 2014
+*
+to customers
+Balances with central banks
+Assets
+Those financial instruments for which their carrying amounts are the reasonable approximations of their fair values because,
+for example, they are short term in nature or repriced at current market rates frequently, are as follows:
+108,202
+144,874
+Capital reserve
+За
+84,164
+120,035
+X19
+(and other public reserve)
+3
+X23
+512,024
+650,308
+Retained profits
+2c
+Accumulated other comprehensive income
+3b
+Others
+(24,839)
+7
+X25
+1,956
+1,276,344
+1,498,403
+Core tier 1 capital before regulatory adjustments
+Core tier 1 capital: Regulatory adjustments
+6
+2,191
+Valid portion of minority interests
+5
+stock companies. Fill in 0 for joint stock banks)
+transition period (only applicable to non-joint
+Valid portion to core tier 1 capital during the
+4
+X24
+(24,038)
+X22
+202,940
+221,622
+General reserve
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+2,566,390
+2,568,458
+26,454
+2,309,962
+232,042
+Receivables
+331,731
+331,582
+2014
+Prudential valuation adjustments
+Group
+(e) Fair value of financial assets and liabilities not carried at fair value
+2b
+X21
+123,870
+150,752
+Surplus reserve
+2a
+838,834
+1,022,682
+Retained earnings
+2
+X18
+351,390
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+The following table summarises the carrying amounts, the fair value and the analysis by level of the fair value hierarchy of
+held-to-maturity investments, receivables, subordinated bonds and convertible bonds:
+74,635
+Annual Report 2014
+Unaudited Supplementary Financial Information
+--
+X20
+(3,920)
+(3,796)
+X14-X15
+1,474
+--
+1,279
+8,049
+Index
+31 December 2014 31 December 2013
+8,487
+by financial institutions
+Including: Deductible amount of significant
+minority investments in core
+tier 1 capital instruments issued
+for significant minority capital investments
+in core tier 1 capital instruments issued by
+financial institutions that are not subject to
+consolidation and undeducted portion of
+deferred tax assets arising from temporary
+differences
+X16
+N/A
+N/A
+24
+ICBC
+268
+26b Shortfall in core tier 1 capital instruments issued
+by financial institutions that are under control
+but not subject to consolidation
+X11
+3,900
+5,700
+issued by financial institutions that are under
+control but not subject to consolidation
+Investment in core tier 1 capital instruments
+26a
+Including: Deductible amount in deferred tax
+assets arising from temporary
+differences
+25
+N/A
+N/A
+servicing rights
+Including: Deductible amount of mortgage
+Deductible amount exceeding the 15% threshold
+23
+22
+22
+13
+Shortfall of provisions for loan impairment
+12
+hedging of items that are not fair valued on the
+balance sheet
+Cash flow hedge reserves that relate to the
+Deferred tax assets that rely on future profitability
+excluding those arising from temporary
+differences
+11
+10
+Other intangible assets other than land use rights
+(net of deferred tax liabilities)
+9
+Goodwill (net of deferred tax liabilities)
+Item
+8
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Gain on sale related to asset securitization
+267
+14
+16
+21 Deductible amount in deferred tax assets arising
+from temporary differences
+22
+20 Mortgage servicing rights
+issued by financial institutions that are not
+subject to consolidation
+investment in core tier 1 capital instruments
+Deductible amount of significant minority
+19
+issued by financial institutions that are not
+subject to consolidation
+18
+Deductible amount of non-significant minority
+investment in core tier 1 capital instruments
+Reciprocal cross-holdings in core tier 1 capital
+between banks or between banks and other
+financial institutions
+(net of related deferred tax liabilities)
+Directly or indirectly holding in own ordinary
+shares
+Defined-benefit pension fund net assets
+Unrealised gains and losses due to changes in
+own credit risk on fair valued liabilities
+17
+15
+256,947
+Subtotal
+2,898,121
+Annual Report 2014
+259
+Notes to Financial Statements
+31 December 2014
+(In RMB millions, unless otherwise stated)
+2013
+187,711
+Carrying
+Fair value
+Level 1
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+amount
+14,264
+201,975
+196,509
+2,868,085
+2,869,685
+5,464
+2,379,297
+484,924
+Financial liabilities
+Subordinated bonds
+187,024
+187,711
+187,711
+Convertible bonds
+9,485
+14,264
+14,264
+Subtotal
+2,624,378
+2,498,502
+2,105
+2,264,714
+16,634
+16,634
+Subtotal
+198,930
+195,728
+16,634
+179,094
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described below
+are adopted to determine the fair values of these assets and liabilities:
+(i)
+(ii)
+(iii)
+The receivables are not quoted in an active market. The fair values of those receivables relating to the restructuring
+of the Bank are estimated on the basis of the stated interest rates and the consideration of the relevant special
+clauses of the instruments evaluated in the absence of any other relevant observable market data, and the fair values
+approximate to their carrying amounts. The fair values of receivables other than those relating to the restructuring of
+the Bank are estimated on the basis of pricing models or discounted cash flows.
+The fair values of held-to-maturity investments, subordinated bonds and convertible bonds are determined with
+reference to the available market values. If quoted market prices are not available, then fair values are estimated on
+the basis of pricing models or discounted cash flows.
+Available-for-sale equity investments measured at cost were all non-listed shares. The fair value was approximately the
+same with its book value and classified in fair value hierarchy level 3.
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of
+the Group and the Bank's assets and liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+15,907
+Subtotal
+Convertible bonds
+179,094
+231,683
+Receivables
+320,407
+318,744
+43,312
+275,432
+Subtotal
+2,944,785
+2,817,246
+2,105
+2,308,026
+507,115
+Financial liabilities
+Subordinated bonds
+183,023
+179,094
+244,324
+74,635
+318,959
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+2,624,400
+2,498,557
+5,373
+2,262,563
+230,621
+Receivables
+324,488
+322,825
+2013
+43,312
+197,702
+211,966
+2,900,040
+26,454
+2,384,597
+488,989
+Financial liabilities
+Subordinated bonds
+196,662
+197,702
+197,702
+Convertible bonds
+9,485
+14,264
+14,264
+Subtotal
+206,147
+14,264
+3,850
+279,513
+2,948,888
+2014
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+2,548,977
+2,550,726
+5,464
+2,304,662
+240,600
+Receivables
+319,108
+Bank
+Subtotal
+186,847
+203,481
+2,821,382
+5,373
+2,305,875
+510,134
+Financial liabilities
+Subordinated bonds
+190,545
+186,847
+186,847
+Convertible bonds
+15,907
+16,634
+16,634
+Subtotal
+206,452
+16,634
+4,648
+353,495
+123,207
+23
+21
+11,729
+Yangtze River Delta
+47,637
+14,229
+21
+4,868
+4,926
+44,967
+Pearl River Delta
+38,947
+18,951
+9,494
+15,113
+23
+9,795
+Head Office
+Individually
+allowance for
+allowance for
+Gross
+assessed to
+impairment
+assessed to
+impairment
+impairment
+amount
+be impaired
+losses
+be impaired
+losses
+losses
+19,747
+9,572
+30,710
+Western China
+38,037
+Northeastern China
+9,511
+5,251
+3,533
+5,465
+3,598
+13,060
+Overseas and others
+10,923
+3,009
+1,423
+3,607
+2,231
+5,201
+6,993
+allowance for
+17,391
+17,046
+37,171
+16,269
+6,628
+16,908
+6,761
+41,301
+Central China
+28,334
+13,702
+7,116
+14,094
+7,143
+31,331
+Bohai Rim
+28,260
+6,893
+Total
+Individually
+Collectively
+Subtotal for personal loans
+38,254
+4,489
+31,826
+2,498
+Discounted bills
+1,409
+Total for loans and advances to customers
+2,457
+38,364
+143,853
+16,500
+(ii) Overdue loans and advances to customers
+Gross loans and advances to customers of the Group which have been
+overdue with respect to either principal or interest for periods of:
+8,945
+193,927
+12,669
+2,528
+18,309
+5,152
+493
+13,545
+249
+Subtotal for corporate loans and advances
+146,728
+33,875
+109,570
+14,002
+Personal mortgage and business loans
+19,945
+1,961
+19,157
+1,089
+Others
+2014
+2013
+Between 3 and 6 months
+Between 6 and 12 months
+1.04%
+0.80%
+The definition of overdue loans and advances to customers is set out as follows:
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+Annual Report 2014
+265
+Unaudited Supplementary Financial Information
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(iii) Overdue and impaired loans and advances to customers by geographical distribution
+31 December 2014
+Overdue loans and advances to customers
+Impaired loans and
+advances to customers
+Individually
+assessed
+Individually
+assessed
+0.44%
+assessed
+0.45%
+0.17%
+Over 12 months
+33,930
+18,712
+31,204
+17,518
+50,034
+43,533
+115,168
+79,763
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+0.31%
+0.19%
+Between 6 and 12 months
+0.28%
+Over 12 months
+210,578
+88,480
+39,976
+4,579
+% of total
+loans and
+advances
+0.04%
+% of total
+loans and
+advances
+4,929
+0.05%
+31 December 2014
+(1,926)
+(2,701)
+(0.03%)
+2,653
+0.02%
+2,228
+0.02%
+(0.02%)
+ICBC
+266
+Less: Renegotiated loans and advances
+overdue for more than three months
+Renegotiated loans and advances overdue for
+less than three months
+6,821
+2,040
+752
+3,411
+1,761
+4,640
+Total
+133,631
+62,043
+30,792
+73,263
+39,065
+201,894
+(iv) Renegotiated loans and advances to customers
+Renegotiated loans and advances
+Unaudited Supplementary Financial Information
+31 December 2014
+(In RMB millions, unless otherwise stated)
+(f) Overdue placements with banks and other financial institutions
+2,319,179
+11,751,059
+2,408,947
+15,452,338
+41,571
+14,160,006
+39,363
+In addition to those disclosed above, exposures to other non-bank counterparties outside Mainland China to which credit is
+granted for use in Mainland China are considered insignificant to the Group.
+(h) Correspondence between balance sheet in published financial statements and capital
+composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on CBRC Notice on issuing regulatory documents on capital regulation for Commercial Banks (Yin Jian Fa, No 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(i)
+Capital composition
+Item
+Core tier 1 capital:
+1 Paid in capital
+31 December 2014 31 December 2013
+Science, education, culture and sanitation
+13,133,159
+Overseas and others
+2013
+0.01%
+The Group's gross placements with banks and other financial institutions
+which have been overdue with respect to either principal or
+interest for a period of:
+Over 12 months
+As a percentage of total gross placements with banks and
+other financial institutions:
+Over 12 months
+(g) Exposures to Mainland China non-bank entities
+On-balance sheet exposure
+Off-balance sheet exposure
+Individually assessed allowance for impairment losses
+2014
+2013
+16
+16
+0.01%
+2014
+12,229
+2,457
+4,462
+impairment
+amount
+be impaired
+losses
+be impaired
+losses
+losses
+Head Office
+8,858
+5
+1
+5
+1
+9,379
+Yangtze River Delta
+impairment
+33,896
+allowance for
+Individually
+assessed to
+92,348
+41,245
+216,336
+31 December 2013
+Overdue loans and advances to customers
+Impaired loans and
+advances to customers
+Individually
+assessed
+Individually
+Collectively
+assessed
+assessed
+Gross
+Individually
+assessed to
+allowance for
+impairment
+allowance for
+Others
+15,276
+17,047
+4,101
+12,200
+5,526
+28,654
+Western China
+16,703
+7,705
+4,360
+9,169
+5,401
+37,569
+Northeastern China
+6,790
+4,135
+2,170
+9,030
+7,232
+19,160
+36,645
+9,284
+44,172
+Pearl River Delta
+21,432
+10,362
+5,981
+13,091
+7,652
+28,606
+Bohai Rim
+19,971
+13,490
+6,195
+13,878
+6,983
+Central China
+61
+31 December 2013
+85
+4,053
+24,268
+28,321
+Wholesale and retail
+914,012
+552,330
+5,798
+30,320
+12,271
+16,609
+28,880
+Production and supply of electricity, heating,
+gas and water
+666,464
+27,052
+5,188
+336,295
+1,301,794
+collateral
+customers*
+be impaired
+assessed
+assessed
+Total
+Manufacturing
+1,580,147
+717,905
+31,151
+27,679
+15,710
+29,069
+44,779
+Transportation, storage and postal services
+115,262
+1,872
+2,078
+992
+291,876
+1,709
+1,002
+272
+9,024
+9,296
+Mining
+273,049
+45,796
+719
+730
+264
+5,099
+5,363
+Lodging and catering
+482,938
+to customers
+8,945
+91
+12,441
+13,433
+Real estate
+530,600
+425,202
+5,169
+4,480
+2,827
+9,852
+12,679
+Water, environment and public utility management
+Leasing and commercial services
+472,981
+218,110
+116
+164
+8,854
+203,428
+Collectively
+assessed to
+92,277
+41,194
+129,662
+170,856
+Personal mortgage and business loans
+2,387,331
+149,018
+2,295,752
+62,669
+Others
+676,134
+281,782
+21,307
+17,749
+39,954
+3,316,420
+7,612,592
+Subtotal of corporate loans and advances
+2,002
+38,137
+668
+480
+335
+2,116
+2,451
+Others
+354,450
+108,849
+3,408
+1,903
+803
+6,078
+6,881
+17,749
+Subtotal of personal loans
+3,063,465
+2,577,534
+Current market value of collateral held against the
+covered portion of overdue loans and advances
+Covered portion of overdue loans and advances *
+Uncovered portion of overdue loans and advances *
+Please see section (e) (ii) for the definition of overdue loans and advances to customers.
+189,729
+95,409
+115,169
+31 December 2013
+*
+Loans and
+Loans and
+advances
+Gross loans
+and advances
+advances
+covered by and advances to
+Overdue loans
+individually
+Allowance for impairment losses
+*
+Individually
+257,581
+41,245
+61,261
+80,418
+80,418
+Discounted bills
+Total loans and advances to customers
+350,274
+11,026,331
+350,274
+299
+71
+51
+6,256
+6,307
+6,244,228
+210,578
+92,348
+216,336
+147,661
+62,669
+1,096
+15,120
+26,339
+6,709
+Transportation, storage and postal services
+23,953
+1,129
+33,480
+18,011
+Wholesale and retail
+25,687
+14,438
+20,520
+5,803
+Production and supply of electricity, heating,
+237
+Manufacturing
+loans
+loss
+Please see section (e) (ii) for the definition of overdue loans and advances to customers.
+264
+ICBC
+Unaudited Supplementary Financial Information
+31 December 2014
+(In RMB millions, unless otherwise stated)
+The amount of new impairment loss charged to the consolidated income statement and the amount of impaired loans and
+advances written off during the year are set out below:
+2014
+2013
+New
+impairment
+loss
+Write-offs
+of impaired
+loans
+New
+Write-offs
+impairment of impaired
+gas and water
+16,142
+26
+5,870
+3,166
+27
+Lodging and catering
+4,152
+896
+4,266
+168
+Construction
+5,757
+566
+4,265
+425
+Science, education, culture and sanitation
+2,210
+2,834
+3,498
+Uncovered portion of overdue loans and advances *
+Mining
+8,547
+39
+Real estate
+878
+454
+2,492
+205
+Water, environment and public utility
+management
+1,011
+42
+547
+10
+Leasing and commercial services
+24,184
+439
+69
+77,641
+187
+Covered portion of overdue loans and advances *
+Others
+323,557
+133,272
+2,443
+1,675
+859
+6,027
+6,886
+Subtotal of corporate loans and advances
+7,046,515
+3,107,917
+82,828
+73,253
+39,058
+130,576
+2,356
+169,634
+1,947
+554
+3,789
+55,990
+826
+4,615
+Construction
+193,035
+95,209
+1,285
+945
+484
+4,081
+Science, education, culture and sanitation
+104,510
+28,999
+646
+409
+Personal mortgage and business loans
+3,597
+1,991,041
+148,258
+9,922,374
+148,258
+135
+10
+7
+2,776
+2,783
+Total loans and advances to customers
+5,592,264
+39,065
+201,894
+125,538
+240,959
+2,049,328
+Current market value of collateral held against
+the covered portion of overdue loans and advances *
+73,263
+Discounted bills
+133,631
+68,542
+68,542
+Others
+678,273
+51,498
+345,048
+17,044
+17,044
+19,301
+Subtotal of personal loans
+-
+31,367
+50,668
+2,336,089
+51,498
+2,727,601
+77
+X01
+Valid cap
+of provision for loan impairment to tier
+2 capital under the weighted approach
+9,684
+134,857
+X02
+15,541
+Provision for loan impairment under the weighted
+approach
+76
+Valid caps of surplus provision for loan impairment to
+tier 2 capital
+28,724
+240,959
+N/A
+differences (net of deferred tax liabilities)
+Deferred tax assets arising from temporary
+75
+N/A
+Mortgage servicing rights (net of deferred tax
+liabilities)
+74
+X07+X13
+27,893
+78
+X05+X06+
+X08+X09+X12
+26,658
+Undeducted amount of significant minority
+investments in capital instruments issued by
+financial institutions that are not subject to
+consolidation
+73
+24,569
+Provision for loan impairment under the internal
+ratings-based approach
+83
+N/A
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+26,898
+271
+Annual Report 2014
+17,006
+17,932
+185,346
+164,752
+current period due to phase-out arrangements
+Excluded from tier 2 capital for the current period
+due to cap
+85
+Valid cap to tier 2 capital instruments for the
+84
+Excluded from additional tier 1 capital due to cap
+Valid cap to additional tier 1 capital instruments
+for the current period due to phase-out
+arrangements
+82
+Excluded from core tier 1 capital due to cap
+81
+current period due to phase-out arrangements
+Capital instruments subject to phase-out arrangements
+80 Valid cap to core tier 1 capital instruments for the
+X04
+N/A
+108,949
+Valid cap of provision for loan impairment to
+tier 2 capital under the internal rating-based
+approach
+79
+X03
+242,040
+33,067
+3.5%
+31 December 2013
+requirement
+3.5%
+13.12%
+14.53%
+10.57%
+12.19%
+10.57%
+11.92%
+65 Including: Capital conservation buffer
+Institution specific buffer requirement
+64
+Capital adequacy ratio
+63
+Tier 1 capital adequacy ratio
+62
+61 Core tier 1 capital adequacy ratio
+Requirements for capital adequacy ratio and reserve
+capital
+11,982,187
+12,475,939
+60 Total risk-weighted assets
+1,572,265
+1,812,137
+Total capital (tier 1 capital + tier 2 capital)
+59
+(ii) Consolidated financial statements
+19,400
+305,406
+15,800
+290,904
+2.5%
+2.5%
+668
+66 Including: Countercyclical buffer requirement
+31 December 2014
+Undeducted amount of non-significant minority
+investments in capital instruments issued by
+financial institutions that are not subject to
+consolidation
+72
+Amounts below the thresholds for deduction
+Item
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+ICBC
+270
+8%
+8%
+6%
+6%
+Index
+5%
+Tier 1 capital adequacy ratio
+Capital adequacy ratio
+71
+70
+69 Core tier 1 capital adequacy ratio
+Domestic minima for regulatory capital
+5.57%
+6.92%
+Percentage of core tier 1 capital meeting buffers
+to risk-weighted assets
+68
+1%
+1%
+Including: G-SIB buffer requirement
+67
+5%
+31 December 2014 31 December 2014
+Balance sheets
+as in published
+financial
+statement (i)
+Construction in progress
+Under
+regulatory
+scope of
+consolidation (i)
+265,279
+256,829
+20,576,732
+20,609,953
+Total assets
+263,193
+Other assets
+28,860
+28,860
+24,758
+24,758
+24,841
+24,841
+24,784
+24,804
+135,828
+135,863
+171,393
+171,434
+Deferred income tax assets
+Fixed assets
+32,415
+28,515
+34,619
+28,919
+Long term equity investments
+320,407
+324,488
+259,332
+319,108
+18,917,752
+(i)
+1,106,776
+Tier 2 capital
+institutions
+Due to banks and other financial
+724
+724
+631
+Due to central banks
+consolidation (i)
+statement (i)
+scope of
+Under
+regulatory
+Balance sheets
+as in published
+financial
+financial
+consolidation (i)
+statement (i)
+scope of
+Under
+regulatory
+as in published
+Balance sheets
+31 December 2014 31 December 2014 31 December 2013 31 December 2013
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Liabilities
+ICBC
+272
+Prepared in accordance with PRC GAAP.
+18,900,015
+31 December 2013 31 December 2013
+331,731
+2,623,602
+411,618
+478,503
+478,503
+other financial institutions
+Placements with banks and
+61,821
+61,821
+95,950
+95,950
+Precious Metals
+300,543
+306,366
+298,128
+304,273
+3,294,006
+3,294,007
+3,523,622
+3,523,622
+institutions
+Due from banks and other financial
+Cash and Balances with central banks
+Assets
+consolidation (i)
+scope of
+financial
+statement (i)
+Under
+regulatory
+Balance sheets
+as in published
+411,618
+Receivables
+Financial assets at fair value through profit
+346,828
+2,624,400
+2,565,606
+2,566,390
+Held-to-maturity investments
+996,556
+1,000,800
+1,176,369
+1,188,288
+Available-for-sale financial assets
+9,680,819
+9,681,415
+10,767,798
+10,768,750
+Loans and advances to customers
+331,870
+331,903
+468,452
+468,462
+Reverse repurchase agreements
+25,020
+25,020
+24,048
+24,048
+Derivative financial assets
+372,477
+372,556
+346,765
+or loss
+58
+❘ ∞
+57
+34,428
+34,428
+Including: Portion classified as equity
+31
+Additional tier 1 capital instruments and related
+premium
+30
+Additional tier 1 capital:
+9,503
+1,266,841
+11,670
+1,486,733
+from additional tier 1 capital and tier 2 capital
+Total regulatory adjustments to core tier 1 capital
+Core tier 1 capital
+29
+28
+Undeducted shortfall that should be deducted
+27
+Others that should be deducted from core tier 1
+capital
+26c
+Index
+31 December 2013
+31 December 2014
+Item
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Unaudited Supplementary Financial Information
+Regulatory treatment
+People's Republic of China/China
+Securities Law of the
+ICBC
+1428009
+Tier 2 capital instrument
+32
+in connection with the Notes will be
+governed by, and shall be construed
+in accordance with English law, except
+that the provision of the Notes relating to
+Subordination shall be governed by,
+and construed in accordance with,
+the laws of Hong Kong
+Including: Portion classified as liabilities
+33
+41b Shortfall in additional tier 1 capital instruments
+issued by financial institutions that are under
+control but not subject to consolidation
+Investment in additional tier 1 capital instruments
+issued by financial institutions that are under
+control but not subject to consolidation
+financial institutions that are not subject to
+consolidation
+tier 1 capital instruments issued by
+Significant minority investments in additional
+are not subject to consolidation
+instruments issued by financial institutions that
+Deductible amount of non-significant minority
+investment in additional tier 1 capital
+41a
+40
+39
+capital between banks or between banks and
+other financial institutions
+Reciprocal cross-holdings in additional tier 1
+38
+37
+Additional tier 1 capital: Regulatory adjustments
+Directly or indirectly holding additional tier 1
+capital of the Bank
+18
+34,500
+Including: Invalid portion to additional tier 1
+capital after the transition period
+Additional tier 1 capital before regulatory
+adjustments
+36
+35
+18
+72
+Valid portion of minority interests
+34
+after the transition period
+Invalid instruments to additional tier 1 capital
+| | │
+The Notes and any non-contractual
+obligations arising out of or
+ISIN: XS0976879279
+BBGID:BBG005CMF4N6
+ICBC (Asia)
+NA
+N/A
+non-compliant features
+N/A
+N/A
+Including: If yes, specify
+No
+No
+Non-compliant transitioned features
+After depositor,
+general creditor
+and the creditor
+of the
+subordinated debts
+After depositor,
+general creditor
+and the creditor
+of the
+subordinated debts
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+름름
+N/A
+N/A
+No
+No
+རྔུཊྚ
+1,106,776
+름름
+N/A
+N/A
+N/A
+Tier 2 capital instrument
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+Main features of regulatory capital instrument
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Unaudited Supplementary Financial Information
+N/A
+No
+277
+N/A
+No
+41c
+Annual Report 2014
+No
+Bank ranking senior to
+the Offshore Preference
+Shares, in the same
+liquidation order with the
+holders of Parity Obligations
+Bank and instruments
+issued or guaranteed by the
+After all liabilities of the
+Shares, in the same
+liquidation order with the
+holders of Parity Obligations
+Bank ranking senior to
+the Offshore Preference
+Bank and instruments
+issued or guaranteed by the
+After all liabilities of the
+Bank ranking senior to
+the Offshore Preference
+Shares, in the same
+liquidation order with the
+holders of Parity Obligations
+After all liabilities of the
+Bank and instruments
+issued or guaranteed by the
+N/A
+N/A
+N/A
+N/A
+Total regulatory adjustments to tier 2 capital
+Others that should be deducted from additional
+tier 1 capital
+X26
+Fixed
+4.50%
+N/A
+10 October 2018, in full amount
+Yes
+10 October 2023
+10 October 2013
+Dated
+Debt securities issued
+USD 500
+Tier 2 capital instrument
+RMB equivalent 3,102
+Tier 2 capital instrument
+RMB 19,974
+Group
+Group
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+coupons/dividends
+mandatory cancellation of
+partially discretionary or
+Including: Fully discretionary,
+Including: Existence of a dividend stopper
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent call dates
+and redemption amount
+No
+Including: Original maturity date
+Mandatory
+Cumulative
+capital
+Others that should be deducted from tier 2
+56c
+X10
+19,400
+15,800
+56b Shortfall in tier 2 capital instruments issued by
+financial institutions that are under control but
+not subject to consolidation
+Significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+Investment in tier 2 capital instruments issued by
+financial institutions that are under control but
+not subject to consolidation
+Deductible portion of non-significant minority
+investment in tier 2 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+56a
+55
+54
+Reciprocal cross-holdings in tier 2 capital between
+banks or between banks and other financial
+institutions
+ICBC
+278
+Cumulative
+No
+Fully discretionary
+No
+5.80%
+Fixed
+N/A
+5 August 2019, in full amount
+5 August 2024
+Yes
+4 August 2014
+Dated
+Debt securities issued
+RMB 20,000
+No
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Unaudited Supplementary Financial Information
+269
+Annual Report 2014
+185,346
+164,752
+Invalid instruments to tier 2 capital after the
+transition period
+47
+X17
+189,877
+187,829
+Tier 2 capital instruments and related premium
+46
+Tier 2 capital
+1,266,859
+1,521,233
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+45
+18
+34,500
+Additional tier 1 capital
+44
+capital
+Total regulatory adjustments to additional tier 1
+43
+from tier 2 capital
+Undeducted shortfall that should be deducted
+42
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Item
+48
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Instrument type
+of Commercial Banks (Provisional)
+Including: Post-transition arrangement of
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+Including: Eligible to the parent company/
+group level
+Including: Transition arrangement of
+Regulation Governing Capital
+53
+Directly or indirectly holding tier 2 capital of the
+Bank
+52
+Tier 2 capital: Regulatory adjustments
+324,806
+306,704
+Tier 2 capital before regulatory adjustments
+X28
+51
+134,857
+118,633
+Valid portion of surplus provision for loan
+impairment
+50
+transition period
+Including: Invalid portion to tier 2 capital after the
+49
+X27
+72
+Index
+31 December 2013
+31 December 2014
+242
+Valid portion of minority interests
+X02+X04
+867,094
+631
+Placements from banks and
+RMB 266,700
+Par value of instrument (in millions)
+RMB 169,200
+RMB 328,447
+Parent company/ Group
+Parent company/ Group
+Parent company/ Group
+Parent company/
+Group
+Ordinary share
+Group
+Ordinary share
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Instrument type
+company/group level
+Parent company/
+Including: Eligible to the parent
+(Provisional)
+Commercial Banks
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+Governing Capital of
+arrangement of Regulation
+Including: post-transition
+Commercial Banks (Provisional)
+Governing Capital of
+Perpetual or dated
+Arrangement of Regulation
+Accounting treatment
+Including: Original maturity date
+if applicable
+N/A
+N/A
+Including: Subsequent call dates,
+redemption amount
+Contingent call dates and
+Yes
+Perpetual
+No maturity date
+Perpetual
+No maturity date
+Yes
+No
+N/A
+N/A
+Including: Optional call date,
+No
+10 December 2014
+10 December 2014
+RMB 12,000
+Other equity
+Additional tier 1
+capital instrument
+RMB 11,958
+EUR 600
+Other equity
+Additional tier 1
+capital instrument
+RMB equivalent 4,542
+Additional tier 1
+capital instrument
+RMB equivalent 17,928
+USD 2,940
+Other equity
+RMB 86,795
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+No maturity date
+No maturity date
+19 October 2006
+Perpetual
+Capital reserve
+Share capital,
+Issuer call (subject to prior Supervisory approval)
+Original date of issuance
+The First Redemption Date
+is 10 December 2019,
+in full or partial amount
+10 December in each
+year after the First
+Redemption Date
+Additional tier 1 capital
+Additional tier 1 capital
+275
+Annual Report 2014
+X27
+242
+X26
+72
+Including: Valid portion to additional tier 1 capital
+Including: Valid portion to tier 2 capital
+867,094
+X25
+2,191
+Including: Valid portion to core tier 1 capital
+2,798
+Minority interests
+X23
+650,308
+Retained profits
+X22
+221,622
+General reserve
+X21
+150,752
+Surplus reserve
+(25,912)
+Foreign currency translation reserve
+408
+Changes in share of other owners' equity of associates and joint ventures
+X20
+Unaudited Supplementary Financial Information
+Additional tier 1 capital
+31 December 2014
+(iv) Main features of eligible capital instruments
+Core tier 1 capital
+Core tier 1 capital
+Including: transition
+Regulatory treatment
+The creation and issue of
+the Offshore Preference
+Shares and the rights
+and obligations (including
+non-contractual rights and
+obligations) attached to
+them are governed by,
+and shall be construed in
+accordance with, PRC law
+shall be construed in
+accordance with, PRC law
+obligations) attached to
+them are governed by, and
+The creation and issue of
+the Offshore Preference
+Shares and the rights
+and obligations (including
+non-contractual rights and
+The creation and issue of
+the Offshore Preference
+Shares and the rights
+and obligations (including
+non-contractual rights and
+obligations) attached to
+them are governed by,
+and shall be construed in
+accordance with, PRC law
+Securities and
+Futures Ordinance
+of Hong Kong/
+Hong Kong,
+China
+the People's
+Republic of
+China/China
+Governing law(s) of the instrument
+ICBC
+84602
+ICBC
+4604
+ICBC
+4603
+capital instrument
+Additional tier 1
+Additional tier 1
+capital instrument
+Additional tier 1
+capital instrument
+Ordinary share
+(H share)
+ICBC
+1398
+ICBC
+601398
+Ordinary share
+(A share)
+Unique identifier
+Issuer
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+The First Redemption Date
+is 10 December 2021,
+Coupons/dividends
+Including: Fixed or floating
+N/A
+N/A The initial conversion price is
+equal to the average trading
+price of the H shares of the
+Bank for the 20 trading days
+Additional tier 1
+capital instrument
+Fully or partially convertible
+when an Additional Tier 1
+Capital Trigger Event occurs,
+fully convertible when a
+Tier 2 Capital Trigger
+Event occurs
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Unaudited Supplementary Financial Information
+//
+N/A
+N/A
+Position in subordination hierarchy in
+liquidation (specify instrument type
+immediately senior to instrument)
+of write-up mechanism
+write-down, description
+Including: If temporary
+permanent or temporary
+Including: If write-down,
+Including: If write-down, full or partial
+write-down trigger(s)
+Including: If write-down,
+Write-down feature
+Instrument it converts into
+Including: If convertible, specify issuer of
+convertible into
+instrument type
+Including: If convertible, specify
+or optional conversion
+Including: If convertible, mandatory
+N/A
+preceding 25 July 2014,
+Including: If convertible, conversion rate
+the date of publication
+of the Board resolution in
+respect of the issuance plan
+Additional tier 1
+capital instrument
+Fully or partially convertible
+when an Additional Tier 1
+Capital Trigger Event occurs,
+N/A
+N/A
+N/A
+No
+No
+z
+No
+ICBC
+ICBC
+ICBC
+N/A
+N/A
+름금름
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+N/A
+름름
+of the Board resolution in
+respect of the issuance plan
+Mandatory
+preceding 25 July 2014,
+the date of publication
+The initial conversion price is
+equal to the average trading
+price of the H shares of the
+Bank for the 20 trading days
+fully convertible when a
+Tier 2 Capital Trigger
+Event occurs
+Additional tier 1
+capital instrument
+Fully or partially convertible
+when an Additional Tier 1
+Capital Trigger Event occurs,
+the date of publication
+of the Board resolution in
+respect of the issuance plan
+Mandatory
+preceding 25 July 2014,
+The initial conversion price is
+equal to the average trading
+price of the H shares of the
+Bank for the 20 trading days
+fully convertible when a
+Tier 2 Capital Trigger
+Event occurs
+Mandatory
+N/A
+N/A
+Including: If convertible, fully or partially
+Fixed to floating
+in full or partial amount
+10 December in each
+year after the First
+Redemption Date
+is 10 December 2019,
+The First Redemption Date
+No maturity date
+Yes
+10 December 2014
+Perpetual
+Fixed to floating
+in full or partial amount
+10 December in each
+year after the First
+Redemption Date
+Partially discretionary
+Partially discretionary
+Fully discretionary
+Fully discretionary
+6% (dividend rate)
+before 10 December 2021
+Yes
+6% (dividend rate)
+before 10 December 2019
+Yes
+N/A
+N/A
+N/A
+N/A
+Fixed to floating
+Floating
+Floating
+discretionary or mandatory
+Including: Fully discretionary, partially
+Including: Existence of a dividend stopper
+any related index
+Including: Coupon rate and
+dividend/coupon
+6% (dividend rate)
+before 10 December 2019
+Yes
+Partially discretionary
+cancellation of coupons/
+dividends
+(H share)
+Ordinary share
+Ordinary share
+(A share)
+capital instrument
+Main features of regulatory
+Yes
+Additional Tier 1 Capital
+Trigger Event or Tier 2
+Capital Trigger Event
+Non-cumulative
+Yes
+Additional Tier 1 Capital
+Trigger Event or Tier 2
+Capital Trigger Event
+Non-cumulative
+Additional Tier 1 Capital
+Trigger Event or Tier 2
+Capital Trigger Event
+Yes
+Non-cumulative
+No
+(3,796)
+No
+ICBC
+276
+No
+N/A
+No
+N/A
+Including: If convertible, conversion
+trigger(s)
+Convertible or non-convertible
+Non-cumulative
+Non-cumulative
+Including: Non-cumulative or cumulative
+mechanism
+No
+No
+Including: Redemption incentive
+No
+Including: Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+Securities Law of
+Reserve for cash flow hedging
+11,025,379
+Index
+10,767,798
+consolidation
+scope of
+Less: Provision for loan impairment under the weighted approach
+15,541
+Total loans and advances to customers
+Item
+Under
+regulatory
+31 December 2014
+(iii) Description of related items
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Loans and advances to customers
+X01
+Including: Valid cap of provision for loan impairment to
+tier 2 capital under the weighted approach
+that are not subject to consolidation
+instruments issued by financial institutions
+Including: Non-significant minority investments in tier 2 capital
+1,156,165
+Bond investment measured at fair value
+1,176,369
+Available-for-sale financial assets
+X04
+Including: Valid cap of provision for loan impairment to tier 2 capital
+under the Internal Ratings-Based Approach
+X03
+242,040
+Internal Ratings-Based Approach
+Less: Provision for loan impairment under the
+X02
+9,684
+Unaudited Supplementary Financial Information
+273
+Annual Report 2014
+Prepared in accordance with PRC GAAP.
+202,940
+221,622
+221,622
+General reserve
+123,870
+123,870
+150,752
+150,752
+Surplus reserve
+(56,680)
+(56,859)
+(24,839)
+(24,548)
+Other comprehensive income
+140,844
+202,940
+5,781
+Retained profits
+650,308
+(i)
+1,276,586
+2,198
+1,274,388
+1,274,134
+4,329
+1,278,463
+1,530,640
+2,798
+1,533,438
+1,537,304
+Total equity
+6,445
+Minority interests
+1,530,859
+the parent company
+Equity attributable to equity holders of
+512,024
+511,949
+650,236
+X05
+Other debt instrument investment measured at fair value
+11,751
+Goodwill
+Other receivables
+Including: land use rights
+Intangible assets
+Interest receivable
+Other assets
+Item
+scope of
+Under
+regulatory
+31 December 2014
+(In RMB millions, unless otherwise stated)
+31 December 2014
+Unaudited Supplementary Financial Information
+X13
+26,523
+consolidation
+X12
+Index
+107,846
+(3,854)
+Debt securities issued
+1,852
+Others
+3,726
+Repossessed assets
+4,748
+Long-term deferred and prepaid expenses
+X16
+8,487
+108,291
+X15
+20,600
+X14
+21,879
+256,829
+140,844
+97
+5,700
+2,441
+that are not subject to consolidation
+instruments issued by financial institutions
+2,565,606
+X07
+135
+Including: Non-significant minority investments in tier 2 capital
+Held-to-maturity investments
+Including: Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+X06
+2,135
+that are not subject to consolidation
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+8,453
+Equity investment
+X08
+X11
+Receivables
+Including: Non-significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+34,619
+X10
+15,800
+ICBC
+274
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Including: Undeducted portion of significant minority investments
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+issued by financial institutions that are under control
+but not subject to consolidation
+Including: Investment in core tier1 capital instruments
+Long term equity investments
+instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in tier 2 capital
+X09
+22,613
+319,108
+144,874
+108,949
+Capital reserve
+Financial liabilities at fair value
+through profit or loss
+589,385
+589,346
+553,607
+553,543
+Derivative financial liabilities
+24,191
+24,191
+402,161
+19,168
+Repurchase agreements
+380,957
+377,037
+299,304
+297,616
+Certificates of deposit
+176,248
+176,248
+130,558
+19,168
+402,161
+432,463
+432,463
+4,519
+Reserve for changes in fair value of available-for-sale financial assets
+X24
+(24,839)
+Other comprehensive income
+X19
+144,874
+Capital reserve
+X28
+34,428
+144,874
+34,428
+Other equity instrument
+X18
+353,495
+Share capital
+X17
+187,829
+Including: Valid portion of tier 2 capital instruments and their premium
+279,590
+other financial institutions
+130,558
+Due to customers
+Including: Preference shares
+15,559,727
+396,907
+Total liabilities
+19,072,649
+420
+400,830
+17,639,289
+136
+385,665
+17,623,429
+Shareholders' equity
+Share capital
+353,495
+424,930
+353,495
+351,390
+351,390
+Other equity instrument
+34,428
+15,556,601
+34,428
+Including: Preference shares
+34,428
+34,428
+Other liabilities
+19,043,294
+189
+24,529
+24,425
+Taxes payable
+Employee benefits payable
+14,622,319
+14,620,825
+72,278
+27,982
+67,051
+72,207
+Debt securities issued
+279,590
+279,590
+253,018
+253,018
+Deferred income tax liabilities
+451
+67,002
+28,148
+Special Contribution Award for Golden Round Table Board
+Building
+Golden Round Table Most Innovative Board Secretary
+China Report
+Directors & Boards
+Top 500 Valuable Brands in China
+Brand Observation
+Social One
+Treasury China
+Best Treasury Management Bank of the Year
+Best Global Cash Management Bank of the Year
+Best Reliable Bank for Enterprises of the Year
+Leading Bank in Mobile Finance in China
+Top 50 Chinese Enterprises in terms of Overseas Image
+Golden Shield Award for Information Disclosure of
+Listed Companies
+China Newsweek
+Gold Custodian Bank of the Year
+Including: If convertible, specify instrument type
+optional conversion
+Including: If convertible, mandatory or
+Including: If convertible, conversion rate
+Including: If convertible, conversion trigger (s)
+Including: If convertible, fully or partially
+Social Responsibility Leader of the Year
+Wisemoney
+Excellent E-banking
+Excellent Bank President
+Brand Bank with Excellent Global Competitiveness
+Excellent Bank Card Innovation Management Figure
+Excellent Bank Card
+282
+China Times
+ICBC
+Classic Socialized Marketing Cases: Connections
+Most Responsible Enterprise
+CCM World
+Best Call Center in China
+CFO WORLD
+Best Corporate Wealth Management Award
+Best Cash Management Brand Award
+Financial Money
+Gold E-banking of the Year
+Financial Wealth Management Bank of the Year
+Gold Retail Banker of the Year
+Excellence Award of Gold Private Bank of the Year
+2014 Ranking and Awards
+Taihe Consulting
+288
+Bankrate.com.cn
+ICBC PERU BANK
+SWIFT: ICBKBRSP
+Fax: +5511-2395-6600
+Email: gybx@br.icbc.com.cn
+Tel: +5511-2395-6600
+6 andar SAO PAULO/SP -
+Brasil
+-
+Address: Av. Brigadeiro Faria Lima,
+3477 Block B -
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-11-4820-9018
+Fax: +54-11-4820-1901
+SWIFT: ICBKARBA
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Address: Florida 99-City of Buenos
+Aires, Argentina
+Fax: +1416-607-2000
+SWIFT: ICBKCAT2
+Tel: +1416-366-5588
+Email: info@icbk.ca
+Toronto, Ontario,
+M5H 2R2, Canada
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Industrial and Commercial Bank
+of China (Canada)
+Fax: +1-212-993-7349
+SWIFT: ICBKUS33FIN
+Tel: +1-212-993-7300
+Email: info@icbkus.com
+Floor, New York, NY,
+10019, USA
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway, 28th
+Email: info@us.icbc.com.cn
+Tel: +1-212-238-8208
+Fax: +1-212-619-0315
+SWIFT: ICBKUS3N
+New York, NY 10013, USA
+of China (USA) NA
+Address: 202 Canal Street,
+Industrial and Commercial Bank
+Address: Av.Juan de Arona 151,
+Oficina 204, San Isidro,
+2014 China Employer
+Lima27, Perú
+Email:gongwen@pe.icbc.com.cn
+Fax: +51-16316803
+Financial Service Innovation Award
+Consumer Satisfaction Awards: General Banking Services
+Consumer Satisfaction Awards: Internet Banking Service
+Consumer Satisfaction Awards: Personal Loans Business
+Financial Product Innovation Award
+ChinaHR
+Top 50 Best Employers for University Students
+Top 50 Best Banking Employers for University Students
+Zhaopin.com
+Best Employer in China (Top 100)
+Xinhuanet. com
+Best Payment Product of the Year
+People.cn
+ICBC
+convertible into
+Fax: +27-212008012
++27-0761837882
+Tel: +27-212008006
+Email: icbc.africa@gmail.com
+South Africa, 7806
+Address: 47 Price Drive, Constantia,
+Cape Town,
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Tel: +95-1255045
+Fax: +95-1255045
+Kyauktada Township,
+Yangon, Union of
+Myanmar
+Bogyoke Aung San Street,
+Sakura Tower, No. 339,
+Representative Office
+Address: 601A, 6th Floor,
+Industrial and Commercial
+Bank of China Limited, Yangon
+Tel: +51-16316801
+Including: If convertible, specify issuer of
+No
+Write-down feature
+2014 Ranking
+Forbes
+The 1st place among the Global 2000
+Ranking in terms of combination of sales, profit,
+assets, and market value
+The Banker
+The 1st place among the Top 1000 World Banks
+Ranking in terms of tier 1 capital of the bank
+Fortune
+The 25th place among the Global 500
+(The 1st place on the sub-list of commercial banks)
+Ranking in terms of operating income
+Millward Brown
+The 17th place among the Top 100 Most Valuable Global Brands
+(The 2nd place among the brands of financial institutions)
+Ranking in terms of brand value
+China Enterprise Confederation
+The 4th place among the Top 500 Enterprises of China
+Ranking in terms of operating income
+2014 Awards
+OVERSEAS AWARDS
+The Banker
+Global Bank of the Year
+Bank of the Year in Asia-Pacific
+Bank of the Year in China
+Euromoney
+Best Investment Bank in China
+2014 Ranking and Awards
+279
+Annual Report 2014
+N/A
+ICBKRUMM
+Best Banking Brand
+Netease
+Best State-owned Commercial Bank
+Most Popular Credit Card
+Best E-banking of the Year
+Finance.sina.com.cn
+Best Credit Card of the Year
+N/A
+After depositor and general creditor,
+in the same liquidation order with
+other subordinated debts
+Best Precious Metal Trading Bank in China
+No
+N/A
+N/A
+Yes
+Non-viability of the Bank
+Full write-down
+Permanent write-down
+N/A
+After depositor and general creditor,
+in the same liquidation order with
+other subordinated debts
+No
+N/A
+instrument it converts into
+Best Airfinance Transaction in China
+The Hong Kong Management Association
+Citation for Corporate Governance Disclosure
+N/A
+N/A
+N/A
+N/A
+No
+름름름름 ㅎ
+Tier 2 capital instrument
+Tier 2 capital instrument
+31 December 2014
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+description of write-up mechanism
+Including: If temporary write-down,
+permanent or temporary
+Including: If write-down,
+full or partial
+Including: If write-down,
+write-down trigger(s)
+Including: If write-down,
+N/A
+N/A
+N/A
+N/A
+Best Corporate Bank in China
+Best Consumer Bank in China
+Best Sub-Custodian Bank in China
+Best Treasury & Cash Management Bank in China
+Best Commercial Corporate Credit Card Bank in China
+Best Corporate/Institutional Internet Bank in China
+Best Mobile Banking App in Asia-Pacific
+Financial Times
+Precious Metal Trading Bank of the Year in China
+Interbrand
+Best China Brand
+Best Internet Banking Customer Experience Award
+Best E-banking Brand Award
+Global Finance
+Best Chinese-funded Bank Award
+Best Security Award
+Best Interaction Innovation Award
+Best Mobile Banking Award
+Sohu
+Permanent write-down
+ICBC (Asia) or the Bank
+Full write-down
+Non-viability of
+Yes
+N/A
+N/A
+MA
+JRJ.com
+SWIFT:
+Fax: +352-26866666
+Tel: +7-495 2873099
+Tel: 0531-66681622
+Fax: 0531-87941749
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Postcode: 030001
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHAANXI PROVINCIAL BRANCH
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Postcode: 710004
+Tel: 029-87602608/87602630
+Postcode: 250001
+Fax: 029-87602999
+Pudong New District,
+Shanghai, China
+Postcode: 200120
+Tel: 021-5029200
+Fax: 021-58886888
+SHENZHEN BRANCH
+Address: North Block Financial
+Center, No. 5055 Shennan
+East Road, Luohu District,
+Shenzhen City,
+Guangdong Province,
+China
+Postcode: 518015
+Tel: 0755-82246400
+Fax: 0755-82062761
+SICHUAN PROVINCIAL BRANCH
+Address: No. 35 Zongfu Road,
+SHANGHAI MUNICIPAL BRANCH
+Address: No. 9 Pudong Avenue,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+SHANDONG PROVINCIAL
+Fax: 0471-6940096
+NINGBO BRANCH
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+Postcode: 315010
+Tel: 0574-87361162
+Fax: 0574-87361190
+NINGXIA AUTONOMOUS
+REGION BRANCH
+Address: No. 901 Huanghe East
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region,
+China
+Postcode: 750002
+BRANCH
+Tel: 0951-5039558
+QINGDAO BRANCH
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+Postcode: 266071
+Tel: 0532-85809988-621031
+Fax: 0532-85814711
+QINGHAI PROVINCIAL BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Postcode: 810001
+Tel: 0971-6146733/6152326
+Fax: 0971-6152326
+Fax: 0951-5042348
+Postcode: 610016
+Tel: 028-82866000
+Fax: 028-82866025
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring Road,
+Pudong New Area,
+Shanghai
+Postcode: 200120
+Tel: 021-5879-2288
+Fax: 021-5879-2299
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Address: No. 1 Aokang Avenue,
+Bishan County, Chongqing
+Postcode: 402760
+Fax: 010-66583158
+Tel: 023-85297704
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No. 258 Chengnan West
+Road, Pinghu, Zhejiang
+Province
+Postcode: 314200
+Tel: 0573-85139616
+Fax: 0573-85139626
+Annual Report 2014
+285
+List of Domestic and Overseas Branches and Offices
+Fax: 023-85297709
+Tel: 010-66583333
+Postcode: 100140
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Bank of Beijing Building,
+17 C Financial Street,
+Xicheng District, Beijing,
+China
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Postcode: 300074
+Tel: 022-28400648
+Fax: 022-28400123/28400647
+XIAMEN BRANCH
+Address: No. 17 Hubin North Road,
+Xiamen City, Fujian
+Province, China
+Postcode: 361012
+Tel: 0592-5292000
+Fax: 0592-5054663
+XINJIANG AUTONOMOUS
+REGION BRANCH
+Address: No. 231 Remin Road,
+Tianshan District,
+Urumuqi, Xinjiang
+Autonomous Region,
+China
+Postcode: 830002
+Tel: 0991-5981888
+Fax: 0991-2337527
+TIBET AUTONOMOUS REGION
+BRANCH
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+Postcode: 850000
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 650021
+Tel: 0871-63136172/63178888
+Fax: 0871-63134637
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Zhejiang Province, China
+Postcode: 310009
+Tel: 0571-87803888
+Fax: 0571-87808207
+Tel: 0471-6940297
+Postcode: 010050
+Huhehot City, Inner
+Mongolia Autonomous
+Region, China
+Address: No. 105 Xilin North Road,
+Tel: 023-62918002
+Fax: 023-62918059
+DALIAN BRANCH
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+Postcode: 116001
+Tel: 0411-82378888/82819593
+Fax: 0411-82808377
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+Postcode: 350005
+Tel: 0591-88087810/
+88087819/88087000
+Postcode: 400060
+Fax: 0591-83353905/83347074
+Postcode: 730030
+Tel: 0931-8434172
+Fax: 0931-8435166
+GUANGDONG PROVINCIAL
+BRANCH
+Address: No. 123 Yanjiangxi
+Road, Guangzhou City,
+Guangdong Province,
+China
+Postcode: 510120
+Tel: 020-81308130/81308123
+Fax: 020-81308789
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+CHONGQING MUNICIPAL
+BRANCH
+Fax: 010-66410579
+Best Retail Bank Award
+Best Social Responsibility Award
+Best Wealth Management Product Brand Award
+Eastmoney.com
+Best Universal Bank of the Year
+Best Precious Metal Trading Platform
+ᎠᏃᎻ
+Most Popular Private Bank among Investors
+Hexun
+Top Ten Brand Banks
+Excellent Internet Banking Brand of the Year
+Excellent Mobile Banking Brand of the Year
+Best Financial Services Website
+Best Precious Metal Business Service Bank
+Annual Report 2014
+283
+List of Domestic and Overseas Branches and Offices
+Domestic Institutions
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui Province,
+China
+Postcode: 230001
+Tel: 0551-62869178/62868101
+Fax: 0551-62868077
+BEIJING MUNICIPAL BRANCH
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+Postcode: 100031
+Tel: 010-66410579
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Overseas Institutions
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+Tel: 0771-5316617
+JILIN PROVINCIAL BRANCH
+Address: No. 9559 Renmin Avenue,
+Changchun City, Jilin
+Province, China
+Postcode: 130022
+Tel: 0431-89569073/89569712
+Fax: 0431-88923808
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+South Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 210006
+Tel: 025-52858000
+Fax: 025-52858111
+JIANGXI PROVINCIAL BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Province, China
+Postcode: 330008
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+Tel: 0791-6695117/6695018
+LIAONING PROVINCIAL BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+Postcode: 110001
+Tel: 024-23491600
+Fax: 024-23491609
+284
+ICBC
+List of Domestic and Overseas Branches and Offices
+INNER MONGOLIA
+AUTONOMOUS REGION
+BRANCH
+Fax: 0791-6695230
+Postcode: 410011
+Hunan Province, China
+Changsha City,
+Fax: 0771-5316617/2806043
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua
+North Road, Guiyang City,
+Guizhou Province, China
+Postcode: 550003
+Tel: 0851-862000/8620018
+Fax: 0851-5963911/8620017
+HAINAN PROVINCIAL BRANCH
+Address: Tower A, No. 3 Heping
+South Road, Haikou City,
+Hainan Province, China
+Postcode: 570203
+Tel: 0898-65303138
+Fax: 0898-65303138
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Postcode: 050051
+Tel: 0311-66001888/66000001
+Fax: 0311-66001889/66000002
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Postcode: 450011
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+HEILONGJIANG PROVINCIAL
+BRANCH
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+China
+Postcode: 150010
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115/85870962
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province,
+China
+Postcode: 430071
+Tel: 027-69908676/69908658
+Fax: 010-69908040
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong
+Middle Road Yi Duan,
+Postcode: 530022
+Fax: +7-495 2873098
+ICBC, Hong Kong Branch
+Address: 33/F, ICBC Tower,
+Email: icbchk@icbcasia.com
+Fax: 00965-22281799
+SWIFT:
+ICBKKWKW
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong
+Email: enquiry@icbcasia.com
+Tel: +852-25881188
+Fax: +852-28787784
+SWIFT: UBHKHKHH
+ICBC International Holdings
+Limited
+Tel: 00965-22281777
+Address: 37/F, ICBC Tower,
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICBHHKHH
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark,
+555 Avenida da Amizade,
+Macau
+Email: icbc@mc.icbc.com.cn
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT:
+ICBKMOMX
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 34C, Menara Maxis,
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Email: icbcmalaysia@icbcmalaysia.
+com.my
+Tel: +603-23013399
+3 Garden Road, Central,
+Hong Kong
+Email:info@icbci.com.hk
+Fax: +603-23013388
+SWIFT:
+Email: reception@kw.icbc.com.cn,
+Khalid Bin Al-Waleed
+L-2449 Luxembourg
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-26866666
+SWIFT: ICBKLULL
+ICBC, Frankfurt Branch
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Email:icbc@icbc-ffm.de
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+ICBC, New York Branch
+St. Block 3, Section 4,
+Kuwait City, Kuwait.
+Address: 725 Fifth Avenue,
+20th Floor, New York,
+NY 10022, USA
+Fax: +1-212-838 6688
+SWIFT:
+ICBKUS33
+ICBC, London Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: service@ld.icbc.com.cn
+Tel: +44 20 7397 8888
+Fax: +44 20 7397 8890
+ICBKGB3L
+SWIFT:
+ICBC, Kuwait Branch
+Address: Mazaya Tower 2,
+Floor 21, Al-Morqab,
+Email: info@us.icbc.com.cn
+Tel: +1-212-838 7799
+ICBKMYK
+PT. Bank ICBC Indonesia
+Address: 32nd TCT ICBC Tower,
+JI. MH. Thamrin No. 81,
+Jakarta Pusat 10310,
+Indonesia
+Email: cs@ina.icbc.com.cn
+SWIFT: ICBKNZ2A
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT:
+ICBKGB2L
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Fax: +64-93747287
+Address: 32,Boulevard Royal,
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+SWIFT:
+ICBKLULU
+ZAO Industrial and Commercial
+Bank of China (Moscow)
+Address: Building 29,
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Email: info@ms.icbc.com.cn
+L-2449 Luxembourg
+Tel: +64-93747288
+Email: info@nz.icbc.com.cn
+New Zealand
+Tel: +62-2123556000
+Fax: +62-2131996010
+SWIFT:
+ICBKIDJA
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Address: 622 Emporium Tower
+11th-13th Fl.,
+Sukhumvit Road,
+Khlong Ton, Khlong Toei,
+Bangkok, Thailand
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT:
+ICBKTHBK
+Industrial and Commercial
+Bank of China (Almaty)
+Joint Stock Company
+Address: 150/230, Abai/
+Turgut Ozal Street,
+Almaty,
+Kazakhstan.050046
+Email: office@kz.icbc.com.cn
+Tel: +7727-2377085
+Fax: +7727-2377070
+ICBKKZKX
+SWIFT:
+Annual Report 2014
+287
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China (New Zealand)
+Limited
+Address: Level 11,188 Quay Street,
+Auckland 1010,
+ICBC, Luxembourg Branch
+Address: 32, Boulevard Royal,
+ICBKAU2S
+SWIFT:
+Fax: +612-92333982
+Address: 1st Floor, Samsung
+Fire & Marine
+Insurance Bldg.,
+#184, Jungang-daero,
+Dong-gu, Busan 601-728,
+Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +8251-4638868
+Fax: +8251-4636880
+SWIFT:
+ICBC, Busan Branch
+ICBKKRSE
+Address: 3rd Floor Daeha Business
+Center, No. 360,
+Kim Ma Str., Ba Dinh Dist.,
+Hanoi, Vietnam
+Email: admin@vn.icbc.com.cn
+Tel: +84-462698888
+Fax: +84-462699800
+SWIFT: ICBKVNVN
+ICBC, Vientiane Branch
+Address: Lanexang Avenue, Home
+No. 12, Unit 15,
+Ban Hatsadee,
+Chanthabouly District,
+Vientiane Capital,
+Lao PDR.
+ICBC, Hanoi Branch
+ICBKKRSE
+SWIFT:
+Fax: +822-7553748
+Tel: +852-25881188
+Fax: +852-28787784
+SWIFT: ICBKHKHH
+ICBC, Singapore Branch
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@icbc.com.sg
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT:
+ICBKSGSG
+ICBC, Tokyo Branch
+Address: 2-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-0005,Japan
+Email: icbctokyo@icbc.co.jp
+Tel: +813-52232088
+Fax: +813-52198502
+SWIFT: ICBKJPJT
+ICBC, Seoul Branch
+Address: 16th Floor,
+Taepyeongno Bldg.,
+#73 Sejong-daero,
+Jung-gu, Seoul
+100-767, Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +822-37886670
+Email: icbcvte@la.icbc.com.cn
+3 Garden Road, Central,
+Hong Kong
+Tel: +856-21258888
+SWIFT: ICBKLALA
+ICBC, Karachi Branch
+Address: Room No.G-02 & G-03
+Ground Floor,
+Office #803-807,
+8th Floor, Parsa Towers,
+Plot No.31-1-A, Block 6,
+PECHS, Karachi, Pakistan
+Tel: +92-2135208990
+Fax: +92-2135208930
+SWIFT: ICBKPKKAXXX
+ICBC, Mumbai Branch
+Address: Level 1, East Wing,
+Wockhardt Tower,
+C-2, G Block,
+Bandra Kurla Complex,
+Bandra (E),
+Mumbai-400 051, India
+ICBKAEAD
+Email: icbcmumbai@india.icbc.com.cn
+Fax: +91-2233155900
+SWIFT:
+ICBKINBBXXX
+286
+ICBC
+List of Domestic and Overseas Branches and Offices
+ICBC, Sydney Branch
+Address: Level 1, 220 George
+Street, Sydney NSW 2000,
+Australia
+Email: Info@icbc.com.au
+Tel: +612-94755588
+Tel: +91-2233155999
+Fax: +971-47031199
+SWIFT:
+Tel: +971-47031111
+Email: dboffice@dxb.icbc.com.cn
+ICBC, Phnom Penh Branch
+Address: No. 15, Preah Norodom
+Boulevard, Phsar Thmey I,
+Duan Penh, Phnom Penh,
+Cambodia
+Tel: +855-23965280
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+ICBC, Doha Branch
+Address: Office 1202, 12/F,
+QFC Tower 1,
+Diplomatic Area,
+West Bay, Doha, Qatar
+Email: dboffice@dxb.icbc.com.cn,
+Tel: +974-44968076
+Fax: +974-44968080
+SWIFT:
+ICBKQAQA
+ICBC, Abu Dhabi Branch
+Address: 9th floor &
+Mezzanine floor
+AKAR properties,
+Al Bateen Tower C6
+Bainuna Street,
+Al Bateen Area
+Abu Dhabi
+United Arab Emirates
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-2-4998600
+Fax: +971-2-4998622
+SWIFT: ICBKAEAA
+ICBC, Dubai (DIFC) Branch
+Address: Floor 5&6,
+Gate Village Building 1,
+Dubai International
+Financial Center,
+United Arab Emirates
+Fax: +856-21258897
+Dubai,
+Best Corporate Social Responsibility Award
+Board Secretary Award
+1st Place among enterprises of China Brand Value Assessment
+Daonong Center for Enterprise
+Chinese Green Companies Top 100
+Annual Report 2014
+281
+2014 Ranking and Awards
+China Business Council for Sustainable Development
+Excellent Corporate Social Responsibility Report: Leader
+Enterprise
+Corporate Citizen Committee of China Association of Social
+Work, CCTV-2, Tencent Charity Foundation
+Excellent Corporate Citizen of China
+Brand Building and Promotion Society of China, China National
+Institute of Standardization
+Global Compact Network China
+Pioneer Enterprise Award
+Best Practices in Contributing to Social Development and
+Cooperation
+Chinese Foundation for Lifeline Express
+Bright Merit Award
+Govmade Informationization Development Research Center
+Comprehensive Leadership Award
+China Internet Finance Conference, China Internet Finance
+Association, Hexun
+Top 100 Internet Finance Brands in China
+China Financial Certification Authority
+Best E-banking in China
+Ten 10 Marketing Cases in Financial Sector: Connections
+"Caring for Climate, Ecological Civilization"
+Best Award in Transparency to Public
+The Chinese Institute of Business Administration
+Award of Innovation Achievements of National Enterprises
+Management Modernization
+Best Foreign Currency Pair Trading Award
+Most Popular Forward and Swap Market Maker
+Best Market Maker Award in Outright-traded Currency
+Best Market Maker Award in Technology
+Best Market Maker Award in Back-office Support
+Best Membership Award in Foreign Currency Pair
+Top 100 Interbank RMB Market Transactions
+Member of Excellent Interbank RMB Market Transactions
+Best Market Maker in Back-office Support of
+Interbank Foreign Exchange Market
+Shanghai Clearing House
+Excellent Member of Shanghai Clearing House in Settlement
+Excellent Member of Shanghai Clearing House in Clearing
+Excellent Member of Shanghai Clearing House in Foreign
+Exchange Clearing
+China Gold Association
+Best Innovation Award of the World Gold Council
+Special Contribution Award of the World Gold Council
+Shanghai Gold Exchange
+Excellent Financial Institution Member
+First Award in Leasing Services
+China UnionPay
+Outstanding Contribution Award in UnionPay Card Cross-bank
+Transaction
+Contribution Award in UnionPay Card Promotion
+Contribution Award in UnionPay IC Card Promotion
+Police-Bank Joint Development Contribution Award
+China Advertising Association
+China Advertising Great Wall Award: Advertiser
+China Enterprise Confederation
+China Internet Banking Union
+Best Non-USD Trading Award
+E-banking Innovation Award: Best Practices in Financial Internet
+China Association of Trade in Service, China Information
+Industry Association
+The Economic Observer
+Excellent Financial E-commerce Platform of the Year
+Most Respectable Enterprise in China
+China Business Network
+Retail Bank of the Year
+CBN Corporate Social Responsibility Ranking in China:
+Excellent Enterprise Award
+Chinese Securities Journal
+Gold Board Secretary
+Excellent Board Secretary Award in Investor Relations
+Maintenance
+Brand Building Bank with Excellent Competitiveness
+State-owned Commercial Bank with Excellent Competitiveness
+International Banking with Excellent Competitiveness
+Investment Banking with Excellent Competitiveness
+Best Main Board Listed Company
+Best Internet Marketing Bank of the Year
+Small & Micro Finance Outstanding Contribution Award
+Golden Tripod Award: Most Reputed Credit Card of the Year
+21st Century Business Herald
+Best Precious Metal Bank
+Best Chinese-funded Private Bank
+Southern Weekly
+Caijing.com.cn
+Main features of regulatory capital instrument
+Convertible or non-convertible
+National Business Daily
+China Business Journal
+Best Structured Financing Project
+Best Equity Financing Project
+Best Customer Service Center in China
+Best Customer Service Management Team in China
+China Call-Centre & CRM Association
+China Best Call Center Operations Award
+Organizing Committee of Annual China E-finance Conference
+Internet-based Finance Innovation Award in China
+Asia Pacific Call Center Association Leaders
+China Best Call Center Operations Award
+Association for Safe Internet-based Payment
+Excellence Award for Security Promotion
+China E-Commerce Association
+China Best Call Center Operations Award
+Financial News
+Best Commerical Bank
+China Financial Institutions Medal Tally: Golden Dragon Award
+China Securities Journal
+Golden Bull Wealth Management Bank Award
+Golden Bull Award: Top 100 Listed Companies
+Golden Bull Award: Best Board Secretary
+Shanghai Securities News
+Best Brand Financial Institutions Award
+Golden Governance Information Disclosure Enterprises:
+Best Private Bank in China
+Best Credit Card
+Securities Times
+Best Bank in Investment Banking
+Best Merger & Acquisition Advisor Bank
+China Financial Industry Call Center Development League
+Operation and Management Elite Team Award
+Best Forward and Swap Trading Award
+Model of Transparency to the Public
+Best Trading Award
+The American Lawyer
+2014 Ranking and Awards
+ICBC
+Best Corporate Governance: Listed Companies
+Ta Kung Pao
+Best Private Bank in China
+Best Bank in China
+FinanceAsia
+Enterprise with the Largest Market Value
+Enterprise with the Best Performance
+Excellent Corporate Governance Enterprise
+YZZK
+Asian Corporate Director Recognition Awards
+Asian Company Secretary Recognition Awards
+Asian Best CEO Recognition Awards
+Best Investor Relations
+Corporate Governance Asia
+Best of The Best Domestic Bank in China
+Best Domestic Bank in China
+Asiamoney
+Best Internet Banking Product in China
+Best Large-Scale Retail Bank in China
+Best Cash Management Bank in China
+Leading Counterparty Bank in China
+Best Asian International Transaction Bank
+The Asian Banker
+Domestic Top Rated Provider (China)
+Global Custodian
+Best Service Providers, Cash Management in China
+Platinum Award for All-Round Excellence
+Best Commodity Derivatives Trading Bank in China
+First Place in the List of Chinese State-owned Listed Companies
+on Corporate Social Responsibilities
+Best Custodian Bank in China
+Best Private Bank in China
+Best Domestic Bank in China
+The Asset
+280
+Best Spot Trading Award
+Best M&A Deal of the Year
+Institutional Investor
+Icon on Corporate Governance
+Visa Inc.
+Best Market Maker Award in Forward and Swap
+Best Cross-border M&A Expert in China
+Best Market Making Award
+Best Market Maker
+China Foreign Exchange Trade System
+Best Performance Award for Syndicated Loans
+Best Management Award for Syndicated Loans
+Best Transaction Award for Syndicated Loans
+Best Performance Award for Pension Service
+Best Growth Award for Pension Service
+Most Influential Figure in Pension Sector
+Customer Service Center — Comprehensive Model Award
+Customer Service Center - Excellent Innovation Award
+Customer Service Center - Excellent Services Award
+Best Bank in Internet Trade Finance
+Outstanding Contribution Award in Civilized and
+Standard Services of the Chinese Banking Sector
+Outstanding Contribution Award in "The Month of Bank Card
+Internet Payment Security" of the Chinese Banking Sector
+of the Year
+Best Social Responsibility Special Contribution Outlet Award
+Best Social Responsibility Financial Institution Award
+Best Green Finance Award in Social Responsibility of the Year
+Social Responsibility Leader Award of the Year
+Excellent Charity Project Award of the Year
+China Banking Association
+No. 1 Credit Card Brand in China
+Ministry of Industry and Information Technology
+Best Effect Award for "Popularizing Financial Knowledge"
+Series in Chinese Banking Industry
+Award for Excellent Achievement in Innovative Cultural and
+Financial Cooperation
+Best Risk Control in Asia-Pacific
+MasterCard Worldwide
+Leading Enterprise in Mobile Payment Innovation
+Best Business Card Issuer of the Year
+Best Acquiring Bank in Merchant Marketing
+Improvement Award in Cross-border Transaction
+Best Traveling Innovative Payment Product
+American Express
+Best Product
+Best Channel Cooperation
+Best Acquirer Service Partner
+MOF
+1st Place among “counter-based service handling banks" by
+spot trading volume of book-entry treasury bond
+PBC
+First Award for Bank Technological Development
+Ministry of Culture, PBC
+DOMESTIC AWARDS
+1.8
+633,106
+20,609,953
+3.8
+331,903
+2.3
+468,462
+717,984
+Reverse repurchase agreements
+782,776
+Total assets
+Others
+3,294,007
+17.4
+17.1
+3.1
+3.8
+570,199
+1,483
+100.0
+70,465
+3,523,622
+76,126
+1,840
+3,503
+22,871
+27,276
+30,635
+Unit: RMB100 millions
+36,254
+Composition of Loan
+In 2014, the Bank attached importance to the combination of credit
+increment optimization and structural adjustment in supporting the real
+economy development based on changes in macroeconomic environment
+and financial regulatory requirements. The Bank continuously bolstered the
+national key projects under construction and continuing projects, focused
+on supporting advanced manufacturing, modern services, culture industries
+and strategic emerging sectors, innovated the financial service modes for
+small and micro enterprises, and intensified its support for the "Going
+Global" Chinese-invested enterprises. Besides, the Bank proactively backed
+rational credit demands of residents, and paid equal attention to both
+credit structure adjustment and risk prevention and control, maintaining
+a stable and balanced loan growth and the reasonable lending direction
+and structure. As at the end of 2014, total loans reached RMB11,026,331
+million, RMB1,103,957 million or 11.1% higher than that at the end of
+the previous year, of which, RMB-denominated loans of domestic branches
+were RMB9,717,224 million, RMB902,042 million or 10.2% higher than
+that at the end of 2013.
+Loan
+100.0
+18,917,752
+3.0
+Cash and balances with central banks
+Due from banks and other financial
+institutions
+Amount
+11,026,331
+4,322,244
+In 2014, the Bank timely adjusted its business strategy based on the external macroeconomic environment, improved the
+asset and liability structure, maintained coordinated development of deposit and loan business, strengthened liquidity
+management and interest rate pricing management and strived to enhance the efficiency of resource allocation for assets
+and liabilities. Taking development needs of the real economy into account, the Bank reasonably controlled the aggregate
+amount, direction and pace of lending. Closely monitoring the trends of the domestic and international financial markets,
+the Bank flexibly arranged its investment schedule and priorities and optimized the structure of investment portfolios. It
+followed the fund position and the trend of price changes to develop inter-bank business in a prudent manner. Furthermore,
+the Bank actively adopted measures to promote steady growth in due to customers, and refined the inter-bank liability
+structure, thereby ensuring a stable and sustainable growth of funding sources.
+26
+ICBC
+Discussion and Analysis
+Assets Deployment
+As at the end of 2014, total assets of the Bank amounted to RMB20,609,953 million, RMB1,692,201 million or 8.9%
+higher than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred
+to as "loans") increased by RMB1,103,957 million or 11.1%; investment grew by RMB110,993 million or 2.6%; and cash
+and balances with central banks rose by RMB229,615 million or 7.0%. In terms of structure, net loans and advances to
+customers accounted for 52.2% of total assets; investment accounted for 21.5%; and cash and cash balances with central
+banks accounted for 17.1%.
+ASSETS DEPLOYMENT
+Item
+Total loans and advances to customers
+Less: Allowance for impairment losses on
+loans
+At 31 December 2014
+In RMB millions, except for percentages
+At 31 December 2013
+Percentage
+(%)
+Amount
+9,922,374
+63,326
+Balance Sheet Analysis
+22.8
+Note: Please see "Note 53. to the Financial Statements: Segment Information" for the Bank's classification of geographic regions.
+578,901
+21.5
+4,433,237
+51.2
+9,681,415
+52.2
+10,768,750
+Loans and advances to customers, net
+Investment
+240,959
+257,581
+Percentage
+(%)
+5.6
+28,301
+4.9
+634,858
+100.0
+100.0
+2012
+Please refer to the section headed "Discussion and Analysis - Business Overview" for the details of the development of
+each of these operating segments.
+2014
+4,630,167
+Medium to long-term corporate loans
+Total
+40.7
+2,871,038
+39.2
+5.5
+2,982,425
+Short-term corporate loans
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+60.8
+At 31 December 2013
+4,175,477
+7,612,592
+Working capital loans
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2013
+In RMB millions, except for percentages
+At 31 December 2014
+DISTRIBUTION OF CORPORATE LOANS BY PRODUCT LINE
+100.0
+7,046,515
+100.0
+59.3
+At 31 December 2014
+In RMB millions, except for percentages
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+Percentage
+At 31 December 2014
+At 31 December 2013
+In RMB millions, except for percentages
+Total
+Personal loans
+Discounted bills
+Corporate loans
+Item
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Discussion and Analysis
+27
+Annual Report 2014
+Discounted bills
+Personal loans
+Percentage
+Amount
+(%)
+Amount
+100.0
+9,922,374
+100.0
+11,026,331
+2,727,601
+27.8
+3,063,465
+2013
+Corporate loans
+1.5
+3.2
+350,274
+71.0
+7,046,515
+69.0
+7,612,592
+(%)
+148,258
+32,056
+13.2
+32,715
+3.24
+26,745
+826,615
+institutions (4)
+Due from banks and other financial
+1.58
+45,487
+2,883,971
+1.57
+48,384
+3,087,982
+Due from central banks(3)
+2.25
+5,801
+257,826
+2.25
+5,192
+3,969,162
+148,514
+3.74
+Investment in bonds not related to
+restructuring
+3,817,143
+908,823
+154,070
+3,711,336
+142,713
+3.85
+Investment in bonds related to
+restructuring (2)
+230,818
+4.04
+3.93
+24,470
+Total interest-generating assets
+2.27
+38,209
+1,685,542
+2.35
+42,801
+1,819,544
+institutions(4)
+Due to banks and other financial
+1.98
+273,797
+13,843,197
+2.04
+298,941
+14,627,258
+Deposits
+Liabilities
+18,157,992
+18,561,652
+849,879
+4.58
+17,219,456
+767,111
+4.45
+2.69
+Non-interest-generating assets
+1,172,816
+Allowance for impairment losses
+(253,327)
+(234,280)
+Total assets
+19,679,578
+1,371,253
+159,262
+4,047,961
+Investment
+Non-controlling interests
+5.0
+13,162
+262,649
+275,811
+company
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+In RMB millions, except for percentages
+2014
+2013
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+12.5
+100.0
+79,061
+Pearl River Delta
+19.7
+114,107
+475
+18.1
+Yangtze River Delta
+6.8
+39,326
+11.1
+70,920
+Head Office
+114,886
+316
+159
+50.3
+balance
+expense
+(%)
+balance
+expense
+(%)
+Average
+yield/cost
+Item
+Assets
+10,599,094
+615,488
+5.81
+9,457,500
+548,640
+5.80
+Loans and advances to customers
+Debt securities issued
+income/
+yield/cost
+Net Interest Income
+Confronted by the accelerated interest rate liberalization reform and increasingly fierce market competition, the Bank
+constantly strengthened asset and liability management, proactively adjusted its credit structure and optimized its investment
+portfolio structure. Meanwhile, the Bank reinforced liquidity management and interest rate pricing management, strived
+to control liability cost and achieved stable growth in net interest income. In 2014, net interest income was RMB493,522
+million, RMB50,187 million or 11.3% higher than that of last year, accounting for 77.7% of the Bank's operating income.
+Interest income amounted to RMB849,879 million, growing by RMB82,768 million or 10.8%, and interest expenses rose by
+RMB32,581 million or 10.1% to RMB356,357 million. Net interest spread and interest margin came at 2.46% and 2.66%, 6
+basis points and 9 basis points higher than those of the previous year, respectively.
+Annual Report 2014
+19
+Discussion and Analysis
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+Average
+In RMB millions, except for percentages
+2013
+Interest
+Average
+Interest
+Average
+income/
+2014
+5.2
+397,785
+3.67
+Average yield
+Interest
+income
+balance
+Item
+Average
+2013
+2014
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Interest income on loans and advances to customers was RMB615,488 million, RMB66,848 million or 12.2% higher than
+that of the previous year, principally due to an increase of RMB1,141,594 million in average balance. The benchmark interest
+rate cut in November 2014 had slight impact on interest income on loans and advances to customers in 2014.
+♦ Interest Income on Loans and Advances to Customers
+Interest Income
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+50,187
+4,105
+46,082
+32,581
+Debt securities issued
+Changes in interest expenses
+Impact on net interest income
+16,838
+8,306
+25,144
+Average
+3,244
+4,592
+3,895
+(1,050)
+2,845
+23,977
+8,604
+1,348
+Due to banks and other financial institutions
+(%)
+3,684,391
+16.6
+95,872
+16.2
+102,591
+Total operating income
+Overseas and others
+Northeastern China
+Western China
+13.8
+80,006
+3,411,064
+83,771
+Central China
+19.8
+114,472
+18.1
+114,660
+185,177
+5.03
+balance
+3,297,942
+Interest
+income
+Average yield
+(%)
+Short-term loans
+167,117
+Medium to long-term
+loans
+6,914,703
+74,761
+12.9
+Bohai Rim
+5.07
+Deposits
+Liabilities
+82,768
+20
+20
+(4) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+(3) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(2) Investment in bonds related to restructuring includes Huarong bonds and special government bonds. Please see "Note 27.(a) to
+the Financial Statements: Receivables" for details.
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+represent the average of the balances at the beginning of the year and that at the end of the year.
+2.57
+2.40
+2.66
+Net interest margin
+2.46
+Net interest spread
+443,335
+493,522
+Net interest income
+16,992,011
+18,233,851
+291,733
+11,770
+4.03
+Total interest-bearing liabilities
+16,844,587
+356,357
+ICBC
+2.12
+323,776
+2.05
+Non-interest-bearing liabilities
+1,389,264
+1,171,539
+Total liabilities
+15,820,472
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Item
+Discussion and Analysis
+Investment in bonds related to restructuring
+(609)
+(609)
+Due from central banks
+3,185
+(288)
+11,357
+2,897
+(2,724)
+4,999
+2,275
+Changes in interest income
+70,059
+12,709
+Due from banks and other financial institutions
+14,615
+7,052
+Investment in bonds not related to restructuring
+In RMB millions
+Comparison between 2014 and 2013
+Increase/(decrease) due to
+Volume
+Interest rate
+Net increase/
+(decrease)
+Assets
+4,305
+Loans and advances to customers
+946
+66,848
+Investment
+3,696
+7,052
+10,748
+65,902
+44.8
+27.5
+45.8
+146,678
+Fee and commission income
+20.3
+419
+2,069
+2,488
+Others
+8.7
+162
+1,857
+2,019
+134,550
+agency services
+5.9
+257
+4,357
+4,614
+Guarantee and commitment business
+(14.1)
+(970)
+6,893
+5,923
+Asset custody business
+18.4
+Trust and
+2,318
+12,128
+Less: Fee and commission expense
+3,227,142
+1,591
+154
+1,745
+Net trading income
+2013
+2014
+Item
+OTHER NON-INTEREST RELATED GAIN
+Income from settlement, clearing business and cash management was RMB30,422 million, slightly lower than that of
+last year, mainly because the List of Service Prices of Commercial Banks Guided and Mandated by the Government was
+promulgated to decrease the fee standards for some products settled in RMB, leading to an increase in business volume of
+RMB settlement and certain decline in income at the same time. Income from franchise foreign exchange purchase and sales
+and e-commerce business realized a fast growth.
+Income from others increased by RMB419 million or 20.3% to RMB2,488 million, mainly attributable to a fast growth in
+income from pension business.
+9.0
+Income from corporate wealth management services rose by RMB2,318 million or 18.4% to RMB14,929 million, mainly due
+to the increase in investment income from corporate wealth management products and income from gold accumulation
+service.
+Income from investment banking business rose by RMB988 million or 3.4% to RMB30,474 million. Specifically, the Bank
+achieved growth in income from businesses including equity financing, merger and acquisition and structural financing.
+Income from bank card business grew by RMB6,600 million or 23.1% to RMB35,133 million, mainly due to the increase
+in income from relevant business driven by the increase in the number of bank cards issued, consumption volume and
+acquiring business.
+8.3
+10,171
+122,326
+132,497
+Net fee and commission income
+16.0
+1,957
+12,224
+14,181
+Income from personal wealth management and private banking services amounted to RMB20,676 million, increasing by
+RMB2,445 million or 13.4%, of which, income from private banking and personal wealth management services increased
+rapidly.
+12,611
+14,929
+Corporate wealth management services
+In RMB millions, except for percentages
+NET FEE AND COMMISSION INCOME
+Discussion and Analysis
+23
+Annual Report 2014
+The Bank promoted innovation and development in fee-based business transformation as well as optimization of income
+structure, and carried out product and service innovation in retail banking to ultimately satisfy customer needs to the
+maximum extent. It enhanced its investment management and asset allocation capacity of asset management business,
+standardized the design, marketing and fund investment direction of banking wealth management products, and facilitated
+coordinated development of private banking, credit card, precious metals, asset custody and pension services. Moreover,
+the Bank promoted the application of technological progress of financial services to benefit customers and actively reduced
+or exempted part of service fees, while the new version of service price list strictly followed regulatory rules and exercised
+standardized fee charging. In 2014, fee and commission income augmented by RMB12, 128 million or 9.0% to RMB146,678
+million, of which, income from bank card business, private banking and wealth management services achieved a rapid
+growth. Fee and commission expense increased by 16.0% to RMB14,181 million, mainly attributable to the increase in fee
+and commission expense from bank card and lease business.
+In 2014, the Bank realized non-interest income of RMB141,336 million, RMB5,770 million or 4.3% higher than that of the
+previous year. Specifically, net fee and commission income grew by 8.3% to RMB132,497 million, and other non-interest
+income dropped by 33.2% to RMB8,839 million.
+Non-interest Income
+Interest expense on debt securities issued was RMB14,615 million, RMB2,845 million or 24.2% higher than that of last year,
+mainly attributable to the rapid increase in the issuance of certificates of deposit and bills by overseas institutions. Please
+refer to "Note 38. to the Financial Statements: Debt Securities Issued" for details of the debt securities issued by the Bank.
+♦ Interest Expense on Debt Securities Issued
+Interest expense on due to banks and other financial institutions was RMB42,801 million, RMB4,592 million or 12.0% higher
+than the previous year, principally attributable to an increase of RMB134,002 million in average balance and a rise of 8 basis
+points in cost. The Bank intensified liquidity management and optimized inter-bank liability structure to make great efforts to
+control the cost of funding.
+Increase/
+♦ Interest Expense on Due to Banks and Other Financial Institutions
+1.98
+273,797
+13,843,197
+2.04
+298,941
+14,627,258
+Total deposits
+1.65
+6,513
+395,090
+1.86
+Note: (1) Includes outward remittance and remittance payables.
+Item
+2014
+2013
+13.4
+2,445
+18,231
+20,676
+private banking services
+Personal wealth management and
+(0.3)
+(91)
+30,513
+30,422
+cash management
+Settlement, clearing business and
+3.4
+23.1
+(%)
+Growth rate
+988
+29,486
+30,474
+Investment banking business
+6,600
+28,533
+35,133
+Bank card business
+(decrease)
+Growth rate
+(%)
+1,033.1
+Net loss on financial assets and liabilities
+designated at fair value through profit or
+loss
+(10,024)
+Treasury operations
+Personal banking
+Corporate banking
+Item
+SUMMARY OPERATING SEGMENT INFORMATION
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the Management of Value Accounting (MOVA) to evaluate the performance of each of its operating segments.
+Segment Information
+Discussion and Analysis
+25
+Annual Report 2014
+Income tax expense was RMB85,326 million, RMB9,754 million or 12.9% higher than that of the previous year. The effective
+tax rate stood at 23.60%. Please see "Note 16. to the Financial Statements: Income Tax Expense" for the reconciliation of
+income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective income tax rate.
+Others
+Income Tax Expense
+Impairment Losses
+The Bank exercised strict cost management and control and continued to boost its operating efficiency. Operating expenses
+recorded at RMB218,674 million, RMB14,534 million or 7.1% higher than that in 2013, among which, staff costs grew by
+8.3% to RMB112,022 million; salaries and bonuses added by 3.0%; and other operating expenses dropped by 2.7% to
+RMB34,192 million, mainly due to a reduction in marketing expense, conference expense and publicity expense compared
+with last year. Cost-to-income ratio declined by 0.87 percentage points to 27.93%.
+7.1
+14,534
+204,140
+218,674
+Total
+(2.7)
+(940)
+35,132
+34,192
+The Bank continued to strengthen loan risk prevention and control and maintained its capability in risk offsetting. It set aside
+allowance for impairment losses of RMB56,729 million, an increase of RMB18,408 million or 48.0% as compared to the
+previous year. Specifically, allowance for impairment losses on loans was RMB56,267 million, indicating a rise of RMB18,169
+million or 47.7%. Please refer to "Note 26. to the Financial Statements: Loans and Advances to Customers" and "Note 15.
+to the Financial Statements: Impairment Losses on Assets Other than Loans and Advances to Customers" for details.
+Total operating income
+In RMB millions, except for percentages
+2014
+578,901
+100.0
+1.3
+7,779
+1.3
+8,280
+634,858
+15.4
+89,310
+13.5
+85,674
+34.6
+200,028
+37.4
+237,532
+48.7
+281,784
+47.8
+303,372
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+2013
+Others
+9,508
+9.6
+2,018
+OPERATING EXPENSES
+Operating Expenses
+Other non-interest income was RMB8,839 million, RMB4,401 million less than that in 2013, mainly because the increase in
+expenses from structural deposits paid to customers resulted in a large increase in net loss on financial assets and liabilities
+designated at fair value through profit or loss.
+Discussion and Analysis
+ICBC
+24
+24
+(33.2)
+(4,401)
+13,240
+8,839
+In RMB millions, except for percentages
+Total
+441
+14,874
+15,315
+Other operating income, net
+N/A
+188.5
+1,178
+625
+1,803
+Net gain on financial investments
+(7,611)
+(2,413)
+3.0
+Item
+2014
+2013
+2,211
+Amortisation
+10.4
+3,910
+37,441
+41,351
+Business tax and surcharges
+10.7
+2,804
+26,094
+28,898
+Premises and equipment expenses
+3.0
+2,068
+68,216
+70,284
+Including: Salaries and bonuses
+8.3
+8,567
+103,455
+112,022
+Staff costs
+(%)
+Growth rate
+Increase/
+(decrease)
+193
+511,599
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2.09
+12.9
+9,754
+75,572
+85,326
+Less: Income tax expense
+6.8
+23,075
+338,537
+361,612
+Profit before taxation
+2.9
+Net profit
+60
+2,157
+joint ventures
+Share of profits of associates and
+6.8
+23,015
+336,440
+359,455
+Operating profit
+48.0
+18,408
+38,321
+2,097
+56,729
+276,286
+13,321
+balance
+Item
+Average
+2013
+2014
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+Discussion and Analysis
+21
+Annual Report 2014
+5.80
+262,965
+548,640
+5.81
+615,488
+advances to customers 10,599,094
+Total loans and
+6.19
+381,523
+6,159,558
+6.22
+430,311
+Attributable to: Equity holders of the parent
+5.1
+9,457,500
+Less: Impairment losses
+7.1
+14,534
+ICBC
+28
+Discounted bills rose by RMB202,016 million or 136.3%, principally because the Bank moderately increased its supply of
+discounted bills based on the pace of bank-wide credit granting to satisfy management needs of asset-liability portfolios.
+Corporate loans rose by RMB566,077 million or 8.0% from the end of last year. In terms of maturity structure, short-
+term corporate loans increased by RMB111,387 million or 3.9%, while medium to long-term corporate loans grew by
+RMB454,690 million or 10.9%. In terms of product type, working capital loans were RMB183,922 million or 5.7% higher,
+mainly because the Bank actively responded to the strategy of economic transformation and upgrade, and stepped up
+its support to superior enterprises in advanced manufacturing, modern services and other sectors; project loans increased
+by RMB408,906 million or 12.4%, mainly due to the continuous support to national key projects under construction and
+continuing projects; and property loans declined by RMB26,751 million or 5.2%.
+100.0
+7,046,515
+100.0
+7,612,592
+Total
+7.3
+516,564
+Discussion and Analysis
+6.4
+Property loans
+46.9
+3,302,809
+48.8
+Overseas business
+Project loans
+15.8
+1,110,219
+12.9
+982,384
+Including: Trade finance
+489,813
+FINANCIAL STATEMENTS ANALYSIS
+Income Statement Analysis
+In 2014, the Bank proactively responded to profound changes in the domestic and international operating environment
+and new normal demands of economic development, substantially promoted operational transformation and service
+enhancement on the basis of serving the real economy and satisfying customers' financial needs, and implemented strict
+cost management and risk prevention and control, achieving steady growth in profit on the whole. The Bank realized a net
+profit of RMB276,286 million in 2014, representing an increase of RMB13,321 million or 5.1% as compared to the previous
+year. Return on average total assets stood at 1.40%, and return on weighted average equity was 19.96%. Operating income
+amounted to RMB634,858 million, recording an increase of 9.7%. Specifically, net interest income was RMB493,522 million,
+growing by 11.3%. Non-interest income reached RMB141,336 million, rising by 4.3%. Operating expenses amounted
+to RMB218,674 million, recording an increase of 7.1%, and cost-to-income ratio dropped by 0.87 percentage points to
+27.93%. Allowance for impairment losses was RMB56,729 million, indicating an increase of 48.0%. Income tax expense
+added by RMB9,754 million or 12.9% to RMB85,326 million.
+204,140
+218,674
+Less: Operating expenses
+9.7
+55,957
+578,901
+634,858
+4.3
+5,770
+135,566
+141,336
+11.3
+50,187
+443,335
+493,522
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2013
+2014
+Operating income
+Non-interest income
+Net interest income
+Item
+CHANGES OF KEY INCOME STATEMENT ITEMS
+Interest
+income
+Average yield
+3,711,715
+(%)
+0.75
+28,454
+3,771,329
+0.79
+30,297
+3,853,902
+Demand deposits (1)
+3.30
+99,468
+3,011,134
+3.43
+Subtotal
+116,431
+Time deposits
+Corporate deposits
+Average cost
+(%)
+Interest
+expense
+Average
+balance
+(%)
+Average cost
+Interest
+expense
+balance
+Item
+Average
+3,398,080
+2013
+7,251,982
+2.02
+139,362
+Average
+6,665,644
+2.08
+142,705
+6,863,677
+0.35
+9,884
+2,807,087
+0.35
+10,326
+146,728
+2,951,896
+3.36
+129,478
+3,858,557
+3.38
+132,379
+3,911,781
+Time deposits
+Personal deposits
+1.89
+127,922
+6,782,463
+Demand deposits
+2014
+Subtotal
+Discussion and Analysis
+5.60
+140,608
+2,509,792
+5.65
+162,346
+2,873,029
+Personal loans
+6.02
+10,330
+171,591
+5.76
+12,746
+221,383
+Discounted bills
+6.10
+378,988
+6,216,071
+6.13
+413,751
+Corporate loans
+(%)
+Average yield
+In RMB millions, except for percentages
+balance
+Interest
+income
+Overseas business
+754,158
+6,750,524
+3.53
+ICBC
+Interest expense on deposits amounted to RMB298,941 million, RMB25,144 million or 9.2% higher than that of last year,
+and accounted for 83.9% of total interest expense, principally due to an increase of RMB784,061 million in average balance
+of deposits, and a rise of 6 basis points in average cost as affected by a growth in corporate time deposits with a relatively
+higher cost and upward floating of deposit interest rate.
+♦ Interest Expense on Deposits
+Interest Expense
+22
+Interest income on due from banks and other financial institutions was RMB26,745 million, RMB2,275 million or 9.3%
+higher than that of last year, mainly because the Bank actively adjusted the outward financing structure based on the trend
+of market interest rate and effectively enhanced return on funds operation, resulting in an increase of 55 basis points in
+average yield.
+♦ Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from central banks was RMB48,384 million, RMB2,897 million or 6.4% higher than that of the
+previous year, mainly driven by the increase in the size of mandatory reserves with central banks resulting from the growth in
+customers' deposits.
+♦ Interest Income on Due From Central Banks
+Interest income on bond investments related to restructuring declined by RMB609 million or 10.5% to RMB5,192 million
+from the previous year, mainly because advance repayment of part of the Huarong bonds in 2013 resulted in a decrease in
+the average balance.
+Interest income on investment was RMB 159,262 million, RMB10,748 million or 7.2% higher than that of the previous year.
+Specifically, interest income on investment in bonds not related to restructuring was RMB154,070 million, representing an
+increase of RMB11,357 million or 8.0%, mainly because the Bank seized a favorable opportunity in the bond market to
+increase bond investment and actively optimized the structure of bonds investment portfolios during the reporting period
+and the new bond investment produced a relatively high yield, resulting into a rise of 19 basis points in average yield of
+bonds not related to restructuring.
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+26,645
+5.80
+560,046
+18,714
+3.34
+Total loans and
+♦ Interest Income on Investment
+10,599,094
+advances to customers
+548,640
+9,457,500
+5.81
+615,488
+Post Code: 100140
+中國北京市西城區復興門內大街55號
+No.55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+ICBC
+郵編:100140
+wwww.icbc.com.cn, www.icbc-ltd.com
+Loans to small, (micro) and medium-sized enterprises
+(%)
+At 31 December 2014
+(%)
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2013
+Amount
+1.7%
+LOANS TO DOMESTIC SMALL, (MICRO) AND MEDIUM-SIZED ENTERPRISES
+At the end of December 2014, the balance of loans to small, micro and medium enterprises totaled RMB4,525,444
+million, of which, the loans to medium-sized enterprises reached RMB2,803,904 million and the loans to small and
+micro enterprises stood at RMB1,721,540 million.
+The Bank was named the "Award of Outstanding Contribution to Micro and Small Enterprise Finance" by National
+Business Daily.
+Discussion and Analysis
++
+2.4%
+Others
+2014
+Time deposits
+Demand deposits
+and sanitation
+Science, education, culture
+In RMB millions, except for percentages
+4,525,444
+20.4
+4,386,581
+35
+Annual Report 2014
+2013
+At the end of 2014, the Bank maintained 6,126 thousand corporate settlement accounts, representing an increase of
+7.3% over the end of the previous year, and the volume of settlements reached RMB1,897 trillion, up 9.6% over the
+previous year. The Bank maintained its leading position in the business size. Our cash management customers grew
+by 16.6% to 1,125 thousand, including 4,374 global cash management customers after increasing by 14.7% over the
+year beginning.
+With diversified products system and service contents, the Bank offered comprehensive cash management solutions
+to enterprises across account management, liquidity management, collection and payment management, information
+service and risk management. The Bank provided enterprise group customers with the centralized operations
+management service of cross-border RMB and foreign exchange funds and the China (Shanghai) Pilot Free Trade Zone
+policy-based cross-border cash management service, extending the global cash management business to nearly 70
+countries and regions. The Bank was named the "Best Cash Management Bank in China" by The Asset, Global Finance
+and The Asian Banker.
+The "Enterprise Link" service integrating such functions such as industrial and commercial registration, account
+opening, Internet banking and settlement was rolled out in some places for a full range of whole-process and one-
+stop services for new registrants. The card functions of Caizhi Account were improved in a way enabling enterprises'
+interbank POS card-swiping and self-service small deposit & withdrawal.
++
+Settlement and Cash Management
+The Bank was designated as one of the first banks to provide settlement service for "Southbound Trading Link"
+and "New Third Board", centralized clearing business of RMB interest rate swap in the Shanghai Clearing House,
+centralized e-payment service for local national treasury and reform on the clearance of e-L/G in Beijing, Tianjin and
+Hebei on a pilot basis.
++ The Bank improved people's livelihood related financial services, actively blazed new trails into interbank cooperation
+and effectively consolidated partnership with customers. The Bank kept on leading the market in the number of third-
+party custody customers and the amount of funds under custody for five straight years. The Bank ranked the first in
+the banking industry in terms of the amount of central finance and government business cards under agency service
+and in terms of the number and amount of local government bonds for which it was the lead underwriter.
+Institutional Banking
+44.8
+Small and micro enterprises loans in 2014 include loans granted to small and micro enterprises, loans to privately or individually-
+owned business and loans to small and micro enterprise owners.
+Notes: (1) "Percentage" refers to the proportion against domestic branch loans.
+1,869,769
+17.1
+1,721,540
+Small and micro enterprises
+27.4
+2,516,812
+27.7
+2,803,904
+Medium-sized enterprises
+47.8
+(2)
+2012
+Manufacturing
+Lodging and catering industry
+34
+Note: Domestic operations data.
+Growth of Corporate Deposits
+Breakdown of Corporate Loans by Industry
+Actively engaging into product innovation, the Bank released "Chain Financing" products after R&D and also
+strengthened cooperation with policy financing guarantee institutions in a bid to enhance the credits of small and
+micro enterprise loans in diverse ways.
+The Bank established an independent micro and small enterprise banking business management system, propelled the
+pilot micro and small enterprise banking center, developed the institutions specialized in micro and small enterprise
+banking in a down-to-earth manner and improved the intensive and professional operation model.
+Small and Medium-Sized Enterprise Business
+At the end of 2014, the balance of corporate loans reached RMB7,612,592 million, representing an increase of
+RMB566,077 million or 8.0% over the end of the previous year. The balance of corporate deposits hit RMB8,037,133
+million, representing an increase of RMB533,636 million or 7.1% over the end of the previous year.
+The Bank was awarded the title of the "Best Corporate Bank in China" by the Global Finance for five years in a row
+and ranked top in the list of 2014 syndicated loan lead banks in Asia Pacific by Thomson Reuters LLP.
+E-commerce platforms and supply chains, among other new channels and approaches, were utilized to expand the
+customer base. The Bank promoted all-product marketing and leveraged on its advantages in diversified financial
+services such as corporate wealth management, cash management, E-banking, assets custody and cross-border RMB
+settlement to sharpen market competitiveness in corporate deposits business.
++
++ To serve diversified financing requirements of customers, the Bank promoted the interactive development of
+commercial banking and investment banking businesses and also accelerated the development of bond underwriting,
+assets trading, syndicated loan, equity financing and entrusted loan businesses.
+Corporate Deposits and Loans
+The Bank took initiatives to be aligned with the overall requirements of China's economic restructuring, transformation
+and upgrading. With optimized business structure, solidified customer base and improved control of credit risk, corporate
+banking developed steadily in return. At the end of 2014, the Bank's corporate customers increased by 359 thousand over
+the end of the previous year to 5,094 thousand, including 140 thousand corporate customers having loan balances with the
+Bank. According to statistics from PBC, the Bank had the largest balance of both corporate loans and corporate deposits in
+the banking industry, with a market share of 11.17% and 11.64%, respectively.
+Corporate Banking
+BUSINESS OVERVIEW
+Discussion and Analysis
+33
+Annual Report 2014
+Net cash outflows from investing activities amounted to RMB146,741 million, of which, cash inflows declined by
+RMB103,295 million to RMB1,016,718 million, principally due to lower cash inflows generated from sale and payment of
+bond investment compared with last year; and cash outflows dropped by RMB120,715 million to RMB1,163,459 million,
+mainly resulting from less cash payment generated from investment in RMB-denominated bonds compared with last year.
+Net cash outflows from financing activities amounted to RMB26,344 million, of which, cash inflows were RMB131,496
+million, mainly due to the issuance of debt securities and preference shares; and cash outflows were RMB157,840 million,
+primarily resulting from the distribution of ordinary share dividends and the repayment of debt securities.
+Net cash inflows from operating activities amounted to RMB201,457 million. Specifically, net cash outflows of operating assets
+grew by RMB77,345 million compared with last year and net cash inflows of operating liabilities rose by RMB249,920 million,
+mainly due to the increase in net deposits from banks and other financial institutions as compared to the previous year.
+Discussion and Analysis
+Analysis on Statement of Cash Flows
+ICBC
+Unit: RMB100 millions
+22.7%
+Transportation, storage and
+3.1%
+Construction
+3.9%
+Mining
+39,932
+40,389
+41,348
+6.6%
+Real estate
+utility management
+7.0%
+2.4%
+Water, environment and public
+Leasing and commercial services
+electricity, heat, gas and water
+29,150
+10.4%
+Production and supply of
+11.5%
+Wholesale and retail
+34,646
+39,023
+postal services
+19.8%
+8.5%
+International Settlement and Trade Finance
+Credit cards
++
+Discussion and Analysis
+37
+Annual Report 2014
+Note: (1) Average consumption volume per card = Consumption volume during the reporting period/Average monthly cards issued during
+the reporting period.
+5.0
+29.8
+11,477
+57,724
+12,056
+74,915
+(in RMB yuan)
+Average consumption volume per card (1)
+(in RMB100 millions)
+Consumption volume
+Growth rate (%)
+2013
+2014
+14.2
+8,805
+10,056
+14.8
+48,975
+56,232
+◆ Credit Card Business
++
+4
+4
+For details of off-balance sheet items, please refer to "Note 48. to the Financial Statements: Commitments and Contingent
+Liabilities".
+ICBC
+By the end of 2014, the Bank's stock wealth management products increased by 48.0% compared with the previous
+year end to RMB 1,982,483 million.
+The Bank optimized product issuance and marketing strategies, and meanwhile, expanded on and off-line sales
+channels. As a result, customers could be accessible to wealth management products online through "e-mall
+platform".
+The Bank seized the investment opportunities from mixed ownership reform and made a breakthrough in purely
+market-based equity investment. Besides, structured investment in other banks' assets and credit enhancements for
+other banks were released creatively to explore the potential investment opportunities, with normalization and scale
+development of investment in other banks' bill assets.
+Priority was given to develop the line of net-worth products including Enhanced Return series, Stable Return series,
+Non-fixed Term series and Quasi-fund series. The Bank launched "TONGLI" corporate product series exclusively for
+customers of other banks and customized country area-specific wealth management products, in order to bolster the
+development of Western China, county areas and remote regions.
+38
++
+4
+Wealth Management Services
+Embracing the opportunities of co-existing cross-industry competition and cooperation and addressing the diverse needs
+of customers for allocating their financial assets, the Bank expedited the establishment of an integrated business operation
+system across different sectors throughout the world based on the integration of the Group's business strengths including
+asset management, custody, pension and precious metals, along with the functions of diversified subsidiaries specializing in
+investment banking, fund, insurance, etc.
+Debit cards
+Financial Asset Services
+Chip cards had wider industry applications such as with social security, medical care, transportation, education and elD
+such that one card could be applied in many sectors.
+The Bank adopted measures to improve the safety of chip cards, strengthened the popularization of single chip cards,
+improved card replacement service and launched the activity of replacing magnetic cards with chip cards to speed up
+the replacement.
++
+◆ Debit Card Business
+At the end of 2014, over 100 million credit cards were issued and the consumption volume expanded by 15.8%
+from the previous year to RMB1,868.6 billion. Total credit card loans went up by RMB59,110 million or 19.2% to
+RMB366,245 million. The Bank led its peers in terms of number of cards issued, consumption volume and loan volume.
+The Bank was named "No. 1 Credit Card Brand in China" by the Ministry of Industry and Information Technology.
+Apart from that, the Bank was also the winner of the Global Finance "Best Commercial Corporate Credit Card" and
+received the "Best Risk Control in Asia-Pacific" from the Visa Inc.
+The Bank quickened the promotion of Easy Loan corporate cards for small and micro merchants based on the big data
+technology by expanding our marketing coverage in a bid to remove financing bottleneck of small and medium-sized
+enterprises.
+With innovations in Internet-based financial products, the Bank was the first in China to have POS online by combining
+the four authentication methods (Internet banking payment, mobile phone verification, 3D certification and card-not-
+present payment) for universal acceptance of bank cards by online merchants.
+Rights and interests of Peony Driver's Card, ETC Co-brand Card were upgraded to better serve auto owners. A brand-
+new credit card, named ICBC I Sports, was made debut to provide exercisers with discounts and privileges. To expand
+the offshore consumption markets, the Bank made greater effort to promote all-currency card, Global Travel Credit
+Card and air travel card. A larger share of the small-value quick payment market was seized on the strength of ICBC
+Cool Pass Card.
+4
++
+In 2014, debit card-based consumption volume ascended by 35.2% from 2013 to RMB5,622.9 billion.
++
+14.7
+66,288
+Personal Loans
+Discussion and Analysis
+ICBC
+36
+At the end of 2014, the balance of the Bank's personal deposits amounted to RMB7,188,607 million, representing an
+increase of RMB292,768 million or 4.2% from the end of the previous year, of which, personal demand deposits and
+personal time deposits added by 5.3% and 3.4% respectively.
+Adapting to the trend of interest rate liberalization, the Bank enhanced sophisticated management of interest
+rates. The more synergetic development of wealth management products and savings deposits promoted a benign
+circulation of customer funds within the Bank's system. The balance of financial assets of personal customers exceeded
+RMB10 trillion.
+The Bank targeted important customer groups, constantly expanded the base of basic customers and optimized the
+customer structure. The Bank promoted the "ICBC Salary Manager", a financial service product on the basis of payroll
+payment agency service.
+4
++
+Personal Deposits
+Pressing ahead with the mega retail strategy, the Bank improved the customer-oriented operating service system as well as
+the integrated service capability and market edges of retail banking. The Bank still developed ahead of other banks in terms
+of personal loans, banking wealth management and credit card businesses. The Bank stood out as the "Best Consumer Bank
+in China" in the selection of the Global Finance and was named the "Best Large-Scale Retail Bank in China" by The Asian
+Banker for the seventh time consecutively. At the end of 2014, the Bank had 465 million personal customers, including 9.64
+million personal loan customers, representing an increase of 33.30 million and 0.90 million from the end of the previous year
+respectively.
+Personal Banking
+In 2014, the investment banking income jumped by 3.4% from the previous year to RMB30,474 million.
+The Bank was named the "Best Investment Bank in China" by the Euromoney, and it was named as "Best Bank in
+Investment Banking" by Securities Times for six consecutive years.
+The Bank took the lead in participating in the enterprise asset securitization business as a financial advisor, innovatively
+introduced the advisory service for distribution of investment banking products and stepped up marketing and
+integration of funding channels outside the Bank. Moreover, it expanded bond underwriting business and underwrote
+various debt financing instruments worth RMB470.0 billion throughout 2014.
+The Bank participated into the reform of state-owned enterprise, innovated major capital financing methods and
+expanded equity financing business in the capital market. It provided equity financing advisory service for the mixed
+ownership reform of Sinopec Chemical Commercial Holding Company, the investment by China Railway Development
+Fund on preference shares and equity asset securitization of Suning Cloud.
+The Bank proactively expanded merger and acquisition advisory business. It participated in the rights issue by CMB
+Securities and the share placement by C&D, and was also the financial advisor for Fosun International's acquiring of a
+Portuguese insurer CSS and Jin Jiang International's acquiring of Louvre Hotels Group.
++
+4
+Investment Banking
+In 2014, domestic branches disbursed an aggregate of USD148.6 billion in international trade finance. International
+settlements in domestic branches scaled up by 16.7% over the previous year to USD2.7 trillion. Overseas institutions
+handled transactions worth USD956.7 billion, up 29.9%.
+Import aval business and e-presentation of documents of L/C were innovated. The Bank rolled out a global documents
+management system, further enhancing the centralized processing efficiency of the documents business system.
+Leveraging on its advantages in local and foreign currency resources and close interaction between domestic and
+overseas branches, the Bank enhanced its services to import and export enterprises. Optimizing of the "ICBC Quick
+Remittance" product functions and improvement of the differential pricing policy enhanced the Bank's cross-border
+remittance service capability.
++
++
++
++
+Issued bank cards (in 10 thousands)
+31 December 2013
+31 December 2014
+Item
+Growth rate (%)
+At
+At
+At the end of 2014, the Bank issued 660 million cards, representing an increment of 85.08 million from the end of the
+previous year. In 2014, bank cards-based consumptions increased by 29.8% compared with last year to RMB7,491.5 billion.
+Bank card business income rose by 23.1% to RMB35,133 million.
+Bank Card Business
+Global Wealth Management Fund of Private Banking was registered in Luxembourg as the first PE established by a
+Chinese commercial bank in the international mainstream fund market. A global private banking service network was
+formed across 20 countries and regions.
+Private banking services were made available under mobile banking, Internet banking, WeChat services and "social
+networking platform" on all fronts.
+57,780
+Private Banking
+2013
+2012
+27,276
+30,635
+22,871
+Unit: RMB100 millions
+Growth of Personal Loans
+At the end of 2014, the balance of the Bank's personal loans
+amounted to RMB3,063,465 million, representing an increase of
+RMB335,864 million or 12.3% from the end of the previous year.
+According to PBC data, the Bank remained an industry leader in
+terms of personal loan balance with a market share of 12.94%.
+The Bank's personal customers could pledge their financial assets on
+a self-service basis and thus obtain loans by providing different kinds
+of collaterals through simple process and speedy channels.
+To accord with consumers' changing consumption ways and
+transaction practices in the new era, the Bank applied "Easy Loan"
+in a wider scope. "Easy Loan" is an unsecured consumer loan
+product for individuals characterized with small value, quickness and
+convenience for meeting customers' various living, consuming and
+financing needs for financing to support their consumption.
+The Bank put the role of residential mortgages as a main component
+and the pillar of personal loans system into play. Personal housing
+loans continued to grow in a steady and healthy manner.
+2014
+As at the end of 2014, shareholders' equity amounted to RMB1,537,304 million in aggregate, RMB258,841 million or
+20.2% higher than that at the end of the previous year. Equity attributable to equity holders of the parent company
+amounted to RMB1,530,859 million, recording an increase of RMB256,725 million or 20.1%. Please refer to the "Financial
+Statements: Consolidated Statement of Changes in Equity" for details.
+The Bank was named the Best Private Bank in China by the FinanceAsia, The Asset and the Shanghai Securities News.
+At the end of 2014, the Bank managed RMB735.7 billion assets for 43.1 thousand private banking customers. The
+managed assets increased by RMB194.4 billion or 35.9% compared with the previous year end and the customer size
+expanded by 11.8 thousand or 37.5%.
+In terms of the currency structure, the balance of RMB deposits amounted to RMB14,798,876 million, which accounted for 95.1%
+of the total balance of due to customers, RMB766,755 million or 5.5% higher than that at the end of the previous year. The
+balance of foreign currency deposits was equivalent to RMB757,725 million, an increase of RMB169,021 million or 28.7%.
+100.0
+3,836,995
+100.0
+In terms of remaining maturity structure, bonds not related to restructuring within 1-year maturity reduced by RMB45,889
+million from the end of the previous year and their percentage dropped by 1.8%; and bonds not related to restructuring
+within 1 to 5-year maturity grew by RMB241,433 million or 11.3%, mainly because the Bank actively reduced investment in
+short-term bonds and moderately stepped up investment in medium-term bonds.
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY CURRENCY
+In RMB millions, except for percentages
+At 31 December 2013
+At 31 December 2014
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+RMB-denominated bonds
+3,829,614
+96.3
+3,734,780
+97.3
+USD-denominated bonds
+98,593
+2.5
+75,556
+2.0
+Other foreign currency bonds
+50,358
+1.2
+27.0
+26,659
+1,036,182
+982,208
+3,978,565
+1 to 5 years
+Over 5 years
+Total
+Note: (1) Refers to impaired bonds.
+At 31 December 2014
+Percentage
+Percentage
+Amount
+(%)
+Amount
+(%)
+126
+0.0
+77
+0.0
+180,728
+4.5
+148,963
+3.9
+444,672
+11.2
+522,375
+13.6
+2,370,831
+59.6
+2,129,398
+55.5
+24.7
+0.7
+Total
+3,978,565
+2,624,400
+60.7
+Receivables
+331,731
+7.5
+324,488
+7.5
+Total
+4,433,237
+100.0
+4,322,244
+100.0
+As at the end of 2014, the Group held RMB2,046,902 million of financial bonds', including RMB1,687,791 million of policy
+bank bonds and RMB359,111 million of bonds issued by banks and non-bank financial institutions, accounting for 82.5%
+and 17.5% of financial bonds, respectively.
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+1
+In RMB millions, except for percentages
+Impairment
+loss
+Nominal
+Debt securities
+value
+Annual
+interest rate
+Maturity date
+Policy bank bonds 2010
+19,810
+3.60%
+3 February 2015
+57.9
+2,566,390
+Held-to-maturity investments
+23.2
+100.0
+3,836,995
+100.0
+30
+ICBC
+Discussion and Analysis
+In terms of currency structure, RMB-denominated bonds rose by RMB94,834 million or 2.5%; USD-denominated bonds
+increased by the equivalent of RMB23,037 million or 30.5%, and other foreign currency bonds grew by the equivalent of
+RMB23,699 million or 88.9%, principally driven by the increased investment of overseas institutions in foreign currency
+bonds.
+DISTRIBUTION OF INVESTMENT BY HOLDING PURPOSE
+Item
+At 31 December 2014
+Percentage
+Amount
+(%)
+3 to 12 months
+In RMB millions, except for percentages
+Amount
+Percentage
+(%)
+Financial assets at fair value through
+profit or loss
+346,828
+7.8
+372,556
+8.6
+Available-for-sale financial assets
+1,188,288
+26.8
+1,000,800
+At 31 December 2013
+Less than 3 months
+Undated (1)
+Remaining maturity
+Total
+3,063,465
+100.0
+2,727,601
+100.0
+Personal loans rose by RMB335,864 million or 12.3%, primarily resulting from an increase of RMB349,831 million or 20.3%
+in residential mortgages. Personal consumption loans dropped by RMB61,249 million or 16.5%, mainly because the Bank
+reinforced the purpose management on personal consumption loans and took the initiative to adjust the loan product
+system. Personal business loans declined by RMB11,828 million or 3.6%, mainly due to the lower willingness of some small
+and micro enterprise owners to obtain financing as affected by the decelerated growth of the macro economy. Credit card
+overdrafts grew by RMB59,110 million or 19.2%, primarily attributable to the continuously healthy development of credit
+card installment business as well as a stable growth in the number of credit cards issued and their consumption volume.
+Please see "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and their quality.
+Investment
+In 2014, the Bank precisely seized opportunities in the market, flexibly organized its investment schedule and focus,
+optimized the investment structure in strict adherence to the trends in financial markets, and continuously improved
+the return on investment portfolios on the basis of guaranteeing liquidity and risk under control. As at the end of 2014,
+investment amounted to RMB4,433,237 million, RMB110,993 million or 2.6% higher compared with the end of the previous
+year.
+INVESTMENT
+Item
+Debt instruments
+In RMB millions, except for percentages
+At 31 December 2013
+At 31 December 2014
+Percentage
+Amount
+4,268,560
+(%)
+Amount
+96.3
+4,144,950
+Percentage
+(%)
+95.9
+Investment in bonds not related to
+restructuring
+3,978,565
+11.3
+307,135
+12.0
+366,245
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2013
+At 31 December 2014
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+Residential mortgages
+89.7
+2,070,366
+1,720,535
+63.1
+Personal consumption loans
+309,889
+10.1
+371,138
+13.6
+Personal business loans
+316,965
+10.3
+328,793
+12.0
+Credit card overdrafts
+67.6
+Policy bank bonds 2007
+3,836,995
+Investment in bonds related to restructuring
+Percentage
+Amount
+(%)
+Amount
+(%)
+1,026,985
+25.8
+976,351
+25.4
+346,154
+8.7
+389,662
+10.2
+1,687,791
+42.4
+1,682,619
+43.9
+917,635
+3,978,565
+23.1
+100.0
+788,363
+20.5
+3,836,995
+100.0
+In terms of distribution by issuers, government bonds increased by RMB50,634 million or 5.2%; central banks bills fell by
+RMB43,508 million or 11.2%, principally because of the maturity of part of the central bank bills during the reporting
+period; policy bank bonds added by RMB5,172 million or 0.3%; and other bonds augmented by RMB129,272 million or
+16.4%, mainly because the Bank moderately intensified investment in high-quality credit bonds.
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY REMAINING MATURITY
+In RMB millions, except for percentages
+At 31 December 2013
+Percentage
+At 31 December 2014
+Other bonds
+Total
+Policy bank bonds
+197,128
+4.4
+231,046
+5.3
+Shareholders' Equity
+92,867
+2.2
+76,909
+1.8
+Equity instruments and others
+164,677
+3.7
+177,294
+88.8
+4.1
+4,433,237
+100.0
+4,322,244
+100.0
+Bonds not related to restructuring amounted to RMB3,978,565 million, RMB141,570 million or 3.7% higher than that at the
+end of last year. Investment in bonds related to restructuring was RMB197,128 million, reducing by RMB33,918 million or
+14.7%, mainly due to advance repayment of part of the Huarong bonds. For details of the investment in bonds related to
+restructuring, please refer to "Note 27. (a) to the Financial Statements: Receivables".
+Annual Report 2014
+29
+Discussion and Analysis
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY ISSUERS
+In RMB millions, except for percentages
+At 31 December 2013
+Item
+Government bonds
+Central bank bills
+Total
+17,900
+Other debt instruments
+29 November 2017
+(%)
+Amount
+(%)
+Head Office
+76,972
+0.5
+128,631
+0.9
+Yangtze River Delta
+3,078,463
+19.8
+2,961,946
+20.2
+Pearl River Delta
+2,001,180
+12.8
+1,903,961
+13.0
+Bohai Rim
+4,163,766
+26.8
+3,783,427
+25.9
+Central China
+2,189,392
+14.1
+2,070,744
+Amount
+Item
+Percentage
+Percentage
+4,034,790
+25.9
+3,901,098
+26.7
+3,153,817
+20.3
+2,994,741
+20.5
+7,188,607
+46.2
+6,895,839
+47.2
+330,861
+14.2
+2.1
+1.5
+15,556,601
+100.0
+14,620,825
+100.0
+Note: (1) Includes outward remittance and remittance payables.
+32
+ICBC
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+Discussion and Analysis
+At 31 December 2014
+In RMB millions, except for percentages
+At 31 December 2013
+221,489
+Total
+Western China
+16.5
+(%)
+Amount
+(%)
+7,908,683
+50.8
+7,602,977
+52.0
+2,290,971
+14.7
+2,112,169
+14.5
+3,361,635
+21.6
+3,237,621
+22.1
+1,958,020
+12.6
+1,610,908
+11.0
+37,292
+15,556,601
+0.3
+57,150
+0.4
+100.0
+14,620,825
+100.0
+5.07%
+Amount
+Percentage
+Percentage
+At 31 December 2013
+2,432,806
+16.6
+Northeastern China
+901,068
+5.8
+886,193
+6.1
+Overseas and others
+573,450
+3.7
+453,117
+3.1
+Total
+2,572,310
+15,556,601
+14,620,825
+100.0
+DISTRIBUTION OF DUE TO CUSTOMERS BY REMAINING MATURITY
+Remaining maturity
+Demand deposits (1)
+Less than 3 months
+3 to 12 months
+1 to 5 years
+Over 5 years
+Total
+Note: (1) Includes time deposits payable on demand.
+At 31 December 2014
+In RMB millions, except for percentages
+100.0
+Other deposits(¹)
+Percentage
+Demand deposits
+Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bills.
+Annual Report 2014
+31
+Discussion and Analysis
+Liabilities
+As at the end of 2014, total liabilities of the Bank amounted to RMB19,072,649 million, RMB1,433,360 million or 8.1%
+higher than that at the end of the previous year.
+LIABILITIES
+Item
+Due to customers
+Due to banks and other financial institutions
+Repurchase agreements
+Debt securities issued
+Others
+Total liabilities
+At 31 December 2014
+In RMB millions, except for percentages
+At 31 December 2013
+Percentage
+Amount
+(%)
+15,556,601
+81.6
+Amount
+14,620,825
+(%)
+82.9
+1,539,239
+8.1
+13 July 2019
+3.76%
+11,040
+Policy bank bonds 2012
+Subtotal
+Policy bank bonds 2008
+16,890
+4.95%
+11 March 2018
+Policy bank bonds 2008
+15,570
+4.83%
+4 March 2015
+Policy bank bonds 2011
+13,990
+4.49%
+25 August 2018
+1,269,255
+Policy bank bonds 2011
+4.25%
+24 March 2018
+Policy bank bonds 2012
+4.04%
+25 June 2022
+Policy bank bonds 2012
+11,520
+3.94%
+21 August 2019
+Policy bank bonds 2010
+11,050
+3.51%
+27 July 2020
+11,745
+7.2
+11,650
+2.0
+Percentage
+Amount
+(%)
+Personal deposits
+In RMB millions, except for percentages
+At 31 December 2013
+Amount
+Percentage
+(%)
+Corporate deposits
+Time deposits
+3,902,305
+25.1
+3,464,625
+23.7
+Demand deposits
+4,134,828
+4,038,872
+27.6
+Subtotal
+8,037,133
+51.7
+7,503,497
+51.3
+380,957
+Time deposits
+Personal deposits
+At 31 December 2014
+Item
+26.6
+2014
+Other deposits
+279,590
+1.7
+299,304
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+1.4
+253,018
+1.4
+6.9
+1,196,887
+6.8
+100.0
+17,639,289
+100.0
+Due to Customers
+1,316,262
+19,072,649
+Composition of Due to Customers
+69,082
+Due to customers is the Bank's main source of funds. In 2014, proactively
+responding to the changes in external environment such as in-depth
+advancement of interest rate liberalization, increasingly fierce inter-
+bank competition and rapid development of Internet-based finance,
+the Bank gave full play to its comprehensive edges in financial services,
+improved the differential pricing mechanism of deposit interest rate,
+reinforced marketing for deposits and promoted the steady growth in
+deposit business. As at the end of 2014, the balance of due to customers
+was RMB15,556,601 million, RMB935,776 million or 6.4% higher than
+that at the end of the previous year. In terms of customer structure, the
+balance of corporate deposits grew by RMB533,636 million or 7.1%; and
+the balance of personal deposits increased by RMB292,768 million or
+4.2%. In terms of maturity structure, the balance of time deposits rose by
+RMB571,372 million or 7.8%, while the balance of demand deposits grew
+by RMB255,032 million or 3.6%.
+2012
+2013
+Corporate deposits
+80,371
+75,035
+68,958
+65,543
+71,886
+1,804
+2,215
+3,309
+Unit: RMB100 millions
+ICBC (Brazil) (Brazil)
+9
+1
+ICBC (Canada) (Canada)
+1
+ICBC (Argentina) (Argentina) -106
+ICBCFS (USA) ------
+New York Branch (USA).
+ICBC (USA) (USA).
+----- 1
+institutions
+(country/region)
+Number of
+Institution
+ICBC (Peru) (Peru)-
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+America
+13
+Number of
+Busan Branch (South Korea)
+Mexico Subsidiary
+Doha Branch (Qatar)------
+(ES)
+(Under preparation) (Myanmar) ---1
+Yangon Branch
+Phnom Penh Branch (Cambodia). ---- 1
+Vientiane Branch (Lao PDR) ----------- 1
+1
+Hanoi Branch (Vietnam)-----
+1
+3
+Seoul Branch (South Korea)
+3
+Tokyo Branch (Japan)----
+Singapore Branch (Singapore) ------ 7
+(country/region)
+Institution
+Hong Kong and Macau)
+Asia-Pacific Region (except
+(Under preparation) (Mexico)-- 1
+institutions
+E
+Luxembourg Branch
+Institution
+Frankfurt Branch (Germany) -
+1
+(Luxembourg) -
+institutions
+(country/region)
+Number of
+Institution
+Europe
+Annual Report 2014
+ICBC
+44
+The Bank boosted business product innovation and bolstered the establishment of offshore RMB market. ICBC (Asia)
+promoted the completion of issuance and trading of the first International Finance Corporation (IFC) RMB bond in London
+Stock Exchange. The RMB clearing bank in Singapore realized large growth in business volume. "Lion City bonds"
+underwriting accounted for 68.5% of the market. ICBC (Europe) successfully issued the European UCITS fund, becoming
+the first Chinese-funded institution entering the European investment fund industry. The Bank took the initiative in offering
+cross-border RMB bi-directional fund pool and completing the first cross-border RMB loan disbursement and the first
+cross-border merger and acquisition etc. in China (Shanghai) Pilot Free Trade Zone. The Bank took the lead in promoting
+establishment of the first sovereign wealth fund in Shenzhen Qianhai. In 2014, the volume for cross-border RMB business
+reached RMB3.66 trillion, increasing by 65.7% over the previous year.
+Following Singapore Branch, Luxembourg Branch, Doha Branch and ICBC (Canada) successively obtained authorization
+from PBC to act as RMB business clearing banks in local countries and regions. Hence, the Bank became the first financial
+institution with RMB clearing banks across Asian, European and American time zones. Its RMB clearing accounts increased
+continuously with 543 accounts opened accumulatively and RMB clearing network covering 75 countries and regions around
+the world.
+◆ Cross-border RMB Business
+As at the end of 2014, total assets of overseas institutions (including overseas branches, subsidiaries and investments in
+Standard Bank) of the Bank were USD235,996 million, an increase of USD26,833 million or 12.8% from the end of the
+previous year, and they accounted for 7.1% of the Group's total assets, representing an increase of 0.4 percentage points.
+Total loans amounted to USD130,983 million, rising by USD22,862 million or 21.1%, and total deposits were USD92,449
+million, indicating an increase of USD 17,699 million or 23.7%. Profit before tax during the reporting period was USD3,023
+million, increasing by 35.4% compared with the previous year.
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before tax represents the Bank's gain
+on investment recognized by the Bank during the reporting period.
+329
+338
+1
+3
+(country/region)
+London Branch (UK).
+ICBC (Europe) (Luxembourg)-----1
+Africa
+ICBC (Moscow) (Russia)
+45
+2
+ICBC (London) (UK)-
+1
+Brussels Branch (Belgium)
+1
+(the Netherlands) -
+Amsterdam Branch
+25)
+1
+Milan Branch (Italy)-
+2
+Madrid Branch (Spain)-
+1
+Warsaw Branch (Poland)-
+1
+Paris Branch (France) -----
+1
+Abu Dhabi Branch (UAE).
+46
+Riyadh Branch (Saudi Arabia)-
+ICBC (New Zealand) is a wholly-owned subsidiary of the Bank. On 26 February 2014, it officially started business with
+registered capital of NZD60,377.7 thousand. ICBC (New Zealand) provides financial services such as account management,
+transfer and remittance, international settlement, trade finance and corporate credit etc. At the end of 2014, it recorded
+total assets of USD526 million and net assets of USD44.92 million.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a registered capital of KZT8,933
+million. It principally engages in commercial banking services such as deposit, loan, international settlement and trade
+finance, foreign currency exchange, guarantee, account management, Internet banking and bank card service etc. At the
+end of 2014, ICBC (Almaty) recorded total assets of USD243 million and net assets of USD69.53 million. It generated a net
+profit of USD4.68 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+Discussion and Analysis
+ICBC
+2,233
+ICBC (Thai), a subsidiary of the Bank, has a registered capital of THB20,132 million, in which the Bank holds a 97.86%
+stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade finance,
+remittance, settlement, leasing and consulting etc. At the end of 2014, ICBC (Thai) recorded total assets of USD5,915 million
+and net assets of USD711 million. It generated a net profit of USD35.62 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary registered in Indonesia, with a paid-up capital of IDR2.69
+trillion, in which ICBC holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as deposit, loan
+and trade finance, settlement, agency services, inter-bank borrowing and lending and foreign exchange etc. At the end of
+2014, ICBC (Indonesia) recorded total assets of USD3,021 million and net assets of USD279 million. It generated a net profit
+of USD24.66 million during the year.
+PT. BANK ICBC INDONESIA
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a registered capital of MYR331
+million, it is able to provide a full range of commercial banking services. At the end of 2014, ICBC (Malaysia) recorded total
+assets of USD1,155 million and net assets of USD110 million. It generated a net profit of USD5.49 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP461 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement etc. At the end of 2014, ICBC (Macau) recorded total assets of USD22,177 million
+and net assets of USD1,460 million respectively. It generated a net profit of USD222 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+ICBC International, a wholly-owned subsidiary of the Bank as well as a full-licensed investment bank in Hong Kong, has a
+paid-up capital of HKD4,882 million. It mainly renders a variety of investment banking services, including listing sponsor and
+underwriting, equity financing, bond financing, securities brokerage and fund management etc. At the end of 2014, ICBC
+International recorded total assets of USD2,599 million and net assets of USD766 million respectively. It generated a net
+profit of USD43.85 million during the year.
+ICBC INTERNATIONAL HOLDINGS LIMITED
+ICBC (Asia) is a wholly owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD23,592
+million. It provides comprehensive commercial banking services and the major businesses include commercial credit, trade
+finance, investment service, retail banking, E-banking, custody, credit card, receiving bank services for IPOS and dividend
+distribution etc. At the end of 2014, ICBC (Asia) recorded total assets of USD86,920 million and net assets of USD6,638
+million respectively. It generated a net profit of USD821 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA, (LONDON) PLC
+◆ Overseas Subsidiaries
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a registered capital
+of USD200 million. It provides a full spectrum of banking services such as exchange and remittance, loan, trade finance,
+international settlement, funds clearing, agency and custody etc. At the end of 2014, ICBC (London) recorded total assets of
+USD3,838 million and net assets of USD329 million. It generated a net profit of USD30.25 million during the year.
+ICBC (Europe), a wholly-owned subsidiary of the Bank, was incorporated in Luxembourg with a registered capital adding
+to EUR215 million. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and Warsaw Branch
+are structured under ICBC (Europe), which mainly offers corporate and retail banking services such as deposit, withdrawal,
+remittance, settlement, loan, trade finance, capital, investment banking, custody, franchise wealth management. At the end
+of 2014, ICBC (Europe) recorded total assets of USD6,485 million and net assets of USD385 million. It generated a net profit
+of USD50.37 million during the year.
+ICBC
+48
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, officially started business on 6 February 2014 with registered
+capital of USD50.00 million. Holding a full-functional commercial banking license, ICBC (Peru) offers corporate deposit, loan,
+financial leasing, international settlement, trade finance, foreign exchange trading, offshore finance, E-banking and other
+services. At the end of 2014, ICBC (Peru) had total assets of USD96.10 million and net assets of USD37.56 million.
+ICBC PERU BANK
+ICBC (Brasil), a subsidiary of the Bank, has a registered capital of BRL202 million, in which the Bank holds a 99.99% stake.
+ICBC (Brasil) mainly engages in commercial banking and investment banking services such as deposit, loan, trade finance,
+international settlement, fund transaction, franchise wealth management and financial advisory etc. At the end of 2014,
+ICBC (Brasil) recorded total assets of USD300 million and net assets of USD75.42 million. It generated a net profit of
+USD0.42 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+ICBC (Argentina), a controlled subsidiary of the Bank in the Argentina, has a paid-up capital of ARS1,345 million, in which
+the Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) specializes in deposit,
+loan, settlement and remittance, trade finance, foreign exchange trading, capital settlement, financial market, offshore
+finance, cash management, investment banking, cross-border loan, E-banking, credit card, retail banking and small and
+medium-sized enterprise business etc. At the end of 2014, ICBC (Argentina) recorded total assets of USD4,514 million and
+net assets of USD526 million respectively. It generated a net profit of USD151 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD108.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) became RMB clearing bank in North
+America on 9 November 2014, providing various corporate and retail banking services such as deposit, loan, settlement
+remittance, trade finance, foreign exchange trading, funds clearing, RMB cross-border settlement, RMB currency notes,
+cash management, E-banking, bank card and investment and financing information consulting service etc. At the end of
+2014, ICBC (Canada) recorded total assets of USD972 million and net assets of USD124 million. It generated a net profit of
+USD8.62 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a registered capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers professional banking services including securities
+clearing, settlement and financing, accounting and transaction statement in European and American markets for institutional
+customers. At the end of 2014, ICBCFS recorded total assets of USD34.55 billion and net assets of USD97.78 million. It
+generated a net profit of USD13.87 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+Discussion and Analysis
+47
+Annual Report 2014
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD309 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2014, ICBC (USA) recorded total assets of USD1,251 million and net assets of USD311 million. It generated a net
+profit of USD1.04 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (Moscow), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a registered capital of RUB2,310
+million. It mainly provides a full spectrum of corporate banking services including loan, settlement, trade finance, deposit,
+foreign currency exchange, franchise treasury business, global cash management, corporate financial consulting and
+financing arrangement in bond market, opening accounts in various currencies for financial institutions and handling
+interbank clearing, as well as remittance for natural persons without account. ICBC (Moscow) is RUB clearing bank for RMB
+trading against RUB on China Foreign Exchange Trade System, important market maker and RMB clearing bank for RMB
+trading against RUB on MICEX-RTS. At the end of 2014, ICBC (Moscow) recorded total assets of USD1,028 million and net
+assets of USD54.64 million. It generated a net profit of USD7.41 million during the year.
+ZAO INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MOSCOW)
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+1
+Controlled Subsidiaries and Major Equity Participating Company
+Discussion and Analysis
+ICBC (Almaty) (Kazakhstan).
+22
+ICBC (Thai) (Thailand).
+23
+ICBC (Indonesia) (Indonesia).
+5
+ICBC (Malaysia) (Malaysia).
+institutions
+1
+Mumbai Branch (India)
+Number of
+3
+Karachi Branch (Pakistan).
+1
+Kuwait Branch (Kuwait).
+1
+Dubai (DIFC) Branch (UAE).
+E
+1
+1
+Discussion and Analysis
+3
+Hong Kong and Macau
+E
+(ES)
+1
+Sydney Branch (Australia)-
+ICBC (New Zealand)
+(New Zealand)---
+Note: Institutions in light red are under preparation.
+ICBC (Macau) (Macau, China) -- 21
+10
+(Hong Kong, China)
+ICBC International
+(Hong Kong, China).
+Hong Kong Branch
+(South Africa)--
+African Representative Office
+(South Africa)
+Investments in Standard Bank
+institutions
+ICBC (Asia) (Hong Kong, China) 73
+(country/region)
+Institution
+Number of
+3,023
+43
+235,996
++
+Franchise Treasury Business
+In 2014, the sum of precious metal business transactions was RMB1.03 trillion. The Bank cleared RMB343.7 billion on
+behalf of the Shanghai Gold Exchange, ranking No. 1.
+The Bank became the winner of the "Best Precious Metal Trading Bank in China" from the Euromoney. What's
+more, we were also selected as the "China's Excellent Precious Metal Trading Bank" by the Financial Times and the
+"Excellent Financial Institution Member" by the Shanghai Gold Exchange.
+The Bank provided precious metal trading brokerage, agency and clearing services to Chinese and foreign customers
+and physical gold warehousing and agency custodian services in the China (Shanghai) Pilot Free Trade Zone for foreign
+customers through the Shanghai Gold Exchange's International Board in the China (Shanghai) Pilot Free Trade Zone.
+New precious metal offerings adapting to the needs of the youth and suitable for collection and inheritance by virtue
+of their traditional cultural features were introduced innovatively.
+4
+Precious Metal Business
+The Bank enhanced the service capability of personal foreign exchange settlement and sales outlets and enriched the
+variety of trading currencies. As a result, 18 currencies were tradable through the personal E-banking channel. Usance/
+forward foreign exchange trading business of corporate Internet banking was promoted, further enhancing the Bank's
+corporate exchange trading service capability. The Bank could provide exchange trading for 26 currencies, leading the
+banking industry. It completed franchise foreign exchange settlement and sales of USD523.6 billion.
+At the end of 2014, the Bank provided pension management services for 44,024 enterprises, rising by 4,749 from
+the end of the previous year. The pension funds under the Bank's trusteeship amounted to RMB69.1 billion; the
+Bank managed 13.57 million individual pension accounts, and the pension funds under the Bank's custody totaled
+RMB349.7 billion. The Bank led other banks in terms of the scale of enterprise annuity funds under the Bank's
+trusteeship, number of individual enterprise annuity accounts and enterprise annuity funds under the Bank's custody.
+A variety of service channels including sales outlets, Internet banking, telephone banking and mobile banking were
+made available, enabling customers to have better experience.
+Diversifying the product system, the Bank optimized the integrated enterprise annuity scheme "Ruyi Pension
+Management" and the serial pension-related wealth management products "Ruyi Benefit Plan" and issued Taikang
+Golden Banking Co-brand Card for Special Medical Services.
++
++
+Pension Services
+At the end of 2014, total net value of assets under the Bank's custody exceeded RMB5.82 trillion, representing an
+increase of 26.1% from the previous year end. The Bank remained as China's top custodian bank.
+The Bank was recognized as the "Best Custodian Bank in China" by the Global Custodian, the Global Finance and The
+Asset.
+The Bank actively expanded emerging custody service markets. Enterprise annuity funds under custody scaled up
+rapidly, giving the Bank the largest market share among banks.
+The Bank's pension services won a slew of awards from the China Banking Association, e.g. the "Best Performance
+Award" and the "Best Development Award".
+Bundled marketing of foreign exchange trading, trade finance and RMB and foreign currency-denominated deposits
+was launched to meet customers' requirements for managing currency risk. The franchise foreign exchange trading
+volume hit USD160.7 billion.
+The Bank had paper gold, silver, platinum and palladium to offer and supported RMB and USD-denominated
+deals under a range of flexible transaction patterns including real-time, pending order, conversion and automatic
+investment. The franchise paper precious metal trading volume increased to USD29.9 billion.
+Annual Report 2014
+In 2014, the yield on RMB bond descended. The Bank took a variety of measures to raise the yield. In the first half year
+when the yield was relatively high, the Bank properly invested more in RMB bond, increased the weight of premier
+unsecured bonds as long as the risk was controllable and stably replaced the existing low-yield bonds.
++
++
+Investment
+In the foreign exchange money markets, the Bank innovatively launched interbank lending to non-banking financial
+institutions.
+The Bank actively probed into the innovation of business patterns, steadily expanded the scale of RMB bond loans and
+put efforts into vitalizing stock bond assets.
+The Bank conducted a flexible operation and improved fund returns to satisfy the liquidity management needs. In
+2014, domestic trading amount in the inter-bank market was RMB15.27 trillion, of which lending amounted to
+RMB11.25 trillion. The transaction volume in foreign exchange money markets recorded USD198.6 billion.
++
++
+Money Market Activities
+In 2014, the Bank actively adapted to the new normal of economic growth, adjusted investment and trading strategies at
+due time, took different measures to increase the profitability of treasury operations and proactively explored the innovation
+of business patterns and key products.
+Treasury Operations
+By attracting new customers and strengthening precision marketing, the Bank increased the funds under agency sales by
+19.7% compared with 2013 to RMB1,062.8 billion. Leveraging on the yield characteristics of treasury bond products and
+expanding the base of customers preferring low risk, the Bank conducted agency sales of RMB81.5 billion worth of treasury
+bonds. Widening the distribution channels of Internet banking, self-service terminals and e-commerce platform, etc., the
+Bank sold RMB102.7 billion worth of insurance products on an agency basis, increasing by 21.5%.
+Agency Sales
+The Bank successfully issued an aggregate of RMB5,572 million worth credit assets backed securities on 14 May 2014.
+Corporate loans were the underlying assets of this project in which the Bank served as originator and lending services
+provider. Besides, ICBC (Argentina), a subsidiary of the Bank, originated two issues of traditional asset securitization products
+in 2014.
+Asset Securitization Business
+The Bank issued the first counter-based China Development Bank Bond and the first counter-based Export-Import
+Bank of China Bond on innovation as the exclusive agent and routinized the issuance. The counter-based bond trading
+volume had an increment of 190.9%.
+Discussion and Analysis
+39
+4
+4
++ The Bank rallied the advantages of custody services on the capital markets and launched marketing campaigns actively.
+We successfully took custody of the first mixed ownership reform fund, the first merger and acquisition concept fund,
+the first fund investing into the Hong Kong market under the Shanghai-Hong Kong Stock Connect approach and the
+first securities broker's publicly offered fund.
+Asset Custody Services
+Note: The proportion of E-banking business refers to the number of
+E-banking transactions against the total number of transactions
+of the Bank.
+2014
+2013
+2012
+2011
+Internet Banking
+86.0
+80.2
+75.1
+70.1
+%
+Proportion of E-banking Business
+Based on the e-ICBC strategy, the Bank closely followed the trend of
+mobile, personalized and intelligent banking, intensified innovation and
+application of E-banking products and services, and stepped up to build an
+integrated and open E-banking platform. It continued to build the overseas
+E-banking channel, and launched overseas products such as trade finance
+of overseas corporate Internet banking and corporate Internet banking
+cross-border authorization, basically completing global distribution of
+overseas E-banking business. The transaction volume of E-banking topped
+RMB400 trillion. The number of E-banking transactions accounted for
+86.0% of total transactions of the Bank, representing an increase of 5.8
+percentage points from the previous year.
+E-banking
+The Bank reinforced coordination and allocation as well as service collaboration between self-service banking and
+physical outlets, introduced the intelligent service mode on a pilot basis, and continued to enhance the service
+efficiency of outlets.
+The Bank improved the layout of physical outlets and moderately expanded the channel network in key regions,
+areas with potential and emerging markets. It also upgraded and adjusted outlets with low efficiency and completed
+upgrading and adjustment of 607 outlets with low efficiency by diversified means of merger, relocation and
+renovation.
+The Bank started a reform standardizing the operational management throughout outlets, built an operational
+management platform and formulated operating standards including operating status, high/low counter allocation,
+post setting and teller allocation of outlets to optimize their resource allocation.
++
+Physical Outlets
+The Bank further enriched its Internet banking product lines. Innovative
+products, including simplified version of personal Internet banking,
+electronic lottery and corporate B2B settlement-backed electronic bills,
+were launched to solidify the core competitive edge of Internet banking.
+A series of marketing activities such as "Banking @ Home, My Environment Contribution" were carried out to effectively lift
+the number of transactions via electronic channels regarding remittance, fund, wealth management, precious metals and
+other business of the Bank. At the end of 2014, personal Internet banking customers broke the record of 180 million. The
+Bank was named the "Best Corporate/Institutional Internet Bank in China" by Global Finance for the fourth time.
+The Bank actively optimized the structure of foreign currency bond portfolio, suitably increased the investment in
+offshore USD bonds of Chinese institutions and effectively improved the resistance against interest rate risk and the
+profitability of foreign currency bond portfolio.
+Telephone Banking
+Mobile Banking
+Discussion and Analysis
+Annual Report 2014
+The Bank's acquisition of 60% shares in Standard Bank PLC was formally completed on 1 February 2015.
+1
+The Bank steadily advanced internationalized and diversified operation and development, and stepped up its financial
+support to "Going Global" enterprises, "One Belt and One Road" construction and RMB internationalization. It further
+improved the distribution of global services network, and enhanced core market penetration rate and localization operation.
+ICBC (New Zealand), Kuwait Branch and London Branch officially started business. Yangon Branch and Mexico Subsidiary
+have obtained regulatory approval. As the project of share acquisition of Standard Bank PLC' had obtained regulatory
+approval, ICBC became the first Chinese-funded bank acquiring an institution engaging in transactions in commodity,
+capital and monetary market. The Bank entered into a share purchase agreement to acquire 75.5% shares of Tekstilbank.
+Comprehensive subsidiaries delivered stronger profit contributions and strategic synergies to the Group. ICBC Credit Suisse
+Asset Management remarkably elevated its size of funds under management, achieving balanced growth in both size and
+benefits. ICBC Leasing insisted on serving the real economy and consolidated its leading position in the industry. ICBC-AXA
+seized the market development opportunity in life insurance, taking its profitability into a higher level. ICBC International
+proactively promoted large-sized transnational companies and domestic enterprises listing in Hong Kong, further stabilizing
+its profit structure.
+Internationalized and Diversified Operation
+The Bank continuously strengthened the mechanism and framework development for consumer protection. It
+paid attention to respecting and protecting consumers' legitimate rights and interests and ensured that business
+arrangements and legal documents were fair and reasonable and met laws, regulations and regulatory requirements
+on consumer protection. It reinforced internal control and management on agency sales and issued explicit risk alerts
+to consumers so as to prevent from misleading sales behavior. It organized various activities to expose consumers
+to financial knowledge, such as "3.15 Theme Education", "Popularizing Financial Knowledge", "National Financial
+Education Campaign" and "Financial Literacy Education Month", and launched regular promotion by taking
+advantage of portal websites and operating outlets. Moreover, the Bank enhanced its employees' awareness and
+capacity in customer rights protection via training, knowledge contest and other activities.
+The Bank carried out activities themed "Year for Developing a Bank of People's Satisfaction" and propelled the service
+improvement from sources to enhance the bank-wide customer service level. It reinforced the duties of persons in
+charge of outlets, posed strict lobby management and provided more customer-friendly window services. It also set
+up a mobile teller team and implemented flexible windows and shifting system to reduce waiting time of customers
+in peak hours. More than 120 transactions in personal business such as personal account opening and E-banking
+registration can be handled without filling in any form at the counter. The Bank strengthened management on
+customer complaints and established the initial consultation system for onsite services, so that customer satisfaction
+rate in relation to complaint handling maintained at higher than 95%. Besides, the Bank intensified inspection and
+supervision, and assessed service quality of outlets more frequently.
+The Bank improved the working mechanism and approaches on product innovation, implemented product lifecycle
+management and elevated its financial service level for customers. Large-denomination certificates of deposit (CD)
+for personal customers were launched to enrich their investment and wealth management ways. The Bank improved
+the corporate Caizhi account/card product and increased new product functions such as POS channel consumption. It
+launched the comprehensive service management platform on social security and upgraded the centralized electronic
+payment products for local treasuries. It promoted cross-border financial innovation, put into production ICBC Express
+AUD and CAD-denominated products, and offered abundant products and services to customers in the China
+(Shanghai) Pilot Free Trade Zone. The Bank also expanded the product innovation scope by holding the Fifth "ICBC
+Cup" Banking Product Innovative Design Competition for College Students.
++
+4
++
+Product Innovation and Service Enhancement
+The Bank intensified its efforts in self-service development, achieving initial results in intelligent service. Emerging areas
+including commodity trading market and key counties were mainly selected to extend service channels. The Bank optimized
+the transaction process of self-service terminals and increased new agent sales business of personal insurance. The Bank
+made intellectualized reconstruction to some outlets, and handled cash and non-cash businesses of outlets by the human-
+computer interaction mode. At the end of 2014, the Bank owned 25,861 self-service banking outlets, representing an
+increase of 18.5% from the end of the previous year, and 92,319 ATMs, up by 14.7%. The volume of ATM transactions
+amounted to RMB10,852.4 billion, up by 23.5% from the previous year.
+Self-service Banking
+Discussion and Analysis
+ICBC
+42
+The Bank continuously enriched business features of mobile banking, launching credit card application, remittance to
+any mobile phone number and other distinctive services. More application scenarios for mobile life were added to mobile
+banking, and emerging applications were brought in such as car rental and medical care. The Bank also upgraded the safety
+of mobile banking products, optimized user interactive interface and improved customer experience. At the end of 2014, the
+number of mobile banking customers increased by 33.6% from the end of the previous year.
+The Bank optimized the self-service menu of telephone banking, and set up an information management platform for
+customer service centers, shaping a management system with a full range of functions and intelligent services. It also
+upgraded the self-service voice service of telephone banking, strengthened customer diversion from staff service and inter-
+channel development, and enhanced the value creation capacity of telephone banking. Furthermore, the Bank expanded
+customer service channels, resulting in a year-on-year growth of 136% in daily average business volume of SMS banking and
+WeChat banking, as well as more convenient and efficient services offered.
+209,163
+In 2014, the transaction volume of RMB bonds and foreign currency bonds in trading book scored RMB246.6 billion
+and USD12.2 billion respectively.
+As an innovator of active liability models and approaches, the Bank enhanced the support of diversified liabilities
+toward asset business growth. In 2014, the Head Office offered RMB bonds totaling RMB2.5 billion in Hong Kong
+and eight issues of interbank CDs totaling RMB10,640 million in the domestic interbank market. For details on the
+Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements: 36. CDs; 38. Debt Securities
+Issued".
+22,592
+Europe
+78
+82
+358
+689
+46,992
+62,457
+22,770
+Macau)
+Asia-Pacific region
+104
+106
+1,129
+1,374
+101,024
+118,110
+Hong Kong and Macau
+(except Hong Kong and
+238
+166
+16
+Total
+(20,636)
+(23,838)
+Eliminations
+1
+1
+324
+331
+4,606
+4,305
+Africa (1)
+131
+133
+256
+391
+54,407
+52,370
+America
+15
+of 2013
+of 2014
+2013
+2014
+Easy Loan products were improved. Customers may apply for loans by self-service on Internet banking, mobile banking, SMS
+banking and other channels during or after consumption. Loans would be reviewed and approved automatically by the system
+and loan funds can be transferred to customers' account in a real-time manner. The self-service pledged loan platform of
+personal Internet banking was equipped with a new feature regarding partial pledge of wealth management products, paper
+precious metals and book-entry treasury bonds, and a new channel, i.e. mobile banking was added for handling pledged loans.
+Financing Product Line
+The Bank introduced the online POS cashier product, with which, merchants could access by a simple click to accept domestic
+and overseas bank cards. The Bank also launched the open-ended multi-channel general payment platform and added new
+payment channels via mobile banking and open-ended website to support bill payment for customers of other banks. ICBC e
+Payment products were upgraded to facilitate customers in small-value payment on the Internet.
+Payment Product Line
+The Bank built the open-ended direct banking platform, i.e. ICBC direct banking platform, to attract, obtain
+and serve customers through the Internet. It included electronic account opening, deposit taking, investment,
+transaction and other core functions, providing all-in-one online financial services for customers.
+Direct Banking Platform
+The Bank formally launched the social networking platform mobile financial information service platform to set
+up the social circle between customers and customer managers, online customer service as well as institutions
+inside and outside ICBC. It rendered intelligent and convenient services for customers through modes of voice,
+text, picture and video, forming a uniform platform for financial services and social communication.
+Social Networking Platform
+Targeting the "famous merchants, commodities and stores", the Bank officially launched the B2C e-mall platform
+integrating online shopping and consumer credit, which gathered brand products under direct sales relating to
+finance, digital home appliance, automobile, clothing and shoes, food and beverage, jewelry and other sectors.
+Besides, the Bank researched and developed the B2B e-mall platform to corporate customers, offering supply
+chain, specialized wholesale and other market modes. Caizhi Trade Link products were launched to provide
+financial service solutions integrating account, payment and financing for B2B electronic trading market.
+E-mall Platform
+The Bank improved its service mode by virtue of Internet-based thinking, and built a relatively comprehensive Internet-based
+financial service and operational system integrating five major functions including fundraising, finance, trade, commerce and
+information, so as to establish its superiority in Internet-based finance and set up an e-ICBC.
+101 Innovations and Services
+and services 
+10101011101 01011, 1, 1101011 h 11.10
+100x Internet-based Finance CP401111010110401 01014010101 101 Moving
+101010
+Discussion and Analysis
+101-101-110111
+1101 01
+ICBC
+40
+For details on the Bank's issuing of preference shares and tier-2 capital instruments, please refer to "Details of
+Changes in Share Capital and Shareholding of Substantial Shareholders - Details of Securities Issuance and Listing".
+Investment and Financing Product Line
+Financing
+The Bank launched the transaction terminal ICBC e Investment integrating express delivery of market information, professional
+analysis, rich information, efficient transaction and other functions, to satisfy personal customers' needs with respect to
+investment in paper precious metals, paper crude oil, franchise foreign exchange, paper agricultural products and so on.
+The Bank explored 020 business modes, and integrated online and offline channels to provide integrated services for
+customers whenever and wherever possible. E-banking account and authentication system were integrated to establish
+a unified customer-oriented electronic authentication system centering on customers. Moreover, the Bank strengthened
+collaboration online and offline, and introduced the foreign currency online appointment and offline cash withdrawal service.
+of 2013
+of 2014
+Item
+At the end
+At the end
+At the end At the end
+Number of institutions
+(in USD millions)
+(in USD millions)
+Profit before tax
+Assets
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+At the end of 2014, the Bank established 338 institutions in 41 countries and regions and indirectly covered 20 African
+countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking relationships with
+1,809 overseas banking institutions in 147 countries and regions, making its service network covering six continents and
+important international finance centers around the world.
+Discussion and Analysis
+.
+Channel Development
+Discussion and Analysis
+41
+Annual Report 2014
+Online and Offline Integration
++
+equipment
+58
+399
+0.9
+58,267
+0.39
+204
+0.8
+51,951
+fuel
+0.68
+coking and nuclear
+2.71
+1,843
+1.1
+67,942
+2.82
+1,980
+1.0
+70,236
+Petroleum processing,
+Non-metallic mineral
+Others
+3.9
+772,536
+Wholesale and retail
+0.44
+5,381
+19.2
+1,219,345
+0.32
+4,226
+270,089
+19.8
+and postal services
+Transportation, storage
+2.33
+6,109
+4.1
+262,053
+3.40
+9,189
+1,335,127
+11.5
+1.86
+1.4
+1.04
+Discounted bills
+Personal loans
+Total
+350,274
+3.2
+71
+0.02
+148,258
+1.5
+73,253
+10
+3,063,465
+27.8
+32,149
+1.05
+2,727,601
+27.5
+20,426
+0.75
+0.01
+1,635
+906
+99,701
+88,098
+3.63
+3,569
+1.5
+98,443
+Transport equipment
+0.27
+321
+0.75
+1.9
+0.81
+908
+1.7
+111,892
+Iron and steel
+1.00
+1,000
+1.6
+120,375
+35,612
+4.61
+786,202
+Accommodation and
+0.49
+881
+2.9
+181,605
+0.60
+1,242
+3.1
+catering
+205,881
+0.26
+629
+3.9
+245,930
+0.60
+1,576
+3.9
+262,338
+Construction
+Mining
+159,469
+1,312
+2.4
+172,986
+Others
+0.53
+535
+1.6
+100,878
+0.38
+2.4
+429
+114,012
+culture and sanitation
+Science, education,
+0.50
+739
+2.3
+146,625
+0.82
+1.7
+0.87
+4,029
+7.3
+8.5
+575,469
+commercial service
+Leasing and
+0.29
+1,813
+9.8
+618,246
+2,164
+0.19
+10.4
+699,649
+gas and water
+electricity, heat,
+Production and supply of
+3.40
+26,739
+12.4
+1,353
+0.38
+456,519
+7.2
+463,585
+0.84
+3,713
+6.6
+443,471
+Real estate
+0.02
+114
+7.3
+465,037
+0.01
+56
+7.0
+470,014
+management
+public utility
+Water, environment and
+0.19
+867
+11,026,331
+1,306
+100.0
+1.13
+Percentage
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+(%)
+NPLs
+In RMB millions, except for percentages
+At 31 December 2013
+(%)
+(%)
+NPLs
+(%)
+Manufacturing
+1,532,947
+22.7
+35,681
+2.33
+Loan
+1,488,594
+At 31 December 2014
+Discussion and Analysis
+0.41
+752,658
+7.6
+3,663
+0.49
+Total
+11,026,331
+100.0
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+124,497
+9,922,374
+100.0
+93,689
+0.94
+The Bank continuously optimized the geographic credit mix and promoted a balanced allocation of credit resources for
+different geographic areas, maintaining the stability of credit quality. The Bank actively supported the regional development
+of Central China, Western China and Northeastern China, and granted RMB455,447 million loans to the three regions,
+accounting for 41.3% of the total new loans. Overseas and other loans increased by RMB176,678 million or 23.5%,
+accounting for 16.0% of the total new loans, which was mainly due to the rapid lending growth of ICBC (Macau),
+ICBC (Asia) and other overseas institutions, resulting from their stronger support to "Going Global" of Chinese-funded
+enterprises, innovation in cross-border trade finance and efforts in exploring local businesses.
+The Western China, the Pearl River Delta and the Bohai Rim witnessed relatively large increases in NPLs. NPL increase in
+Western China was mainly caused by loan default of some coal-related enterprises as a result of price fall in coal, as well
+as NPL increase of several other enterprises. NPL rise in the Pearl River Delta primarily resulted from operating difficulties of
+some small and medium-sized trade enterprises in the face of weak domestic and overseas demand. NPL rise in the Bohai
+Rim was largely due to loan default of some enterprises in the manufacturing and wholesale and retail industry afflicted by
+funds shortage.
+Annual Report 2014
+55
+1.13
+3,854
+23.5
+1.82
+2.75
+180,786
+2.9
+3,646
+2.02
+Textiles and apparels
+139,117
+2.1
+4,819
+1.8
+141,603
+2.2
+4,460
+3.15
+Computer,
+telecommunications
+equipment, and
+other electronic
+3.01
+27,054
+2.6
+Metal processing
+Chemical industry
+256,186
+3.8
+3,637
+1.42
+237,524
+3.7
+3,159
+175,163
+1.33
+238,857
+3.5
+6,288
+2.63
+232,245
+3.7
+4,482
+1.93
+Machinery
+8.4
+929,336
+Overseas and others
+Head Office
+475,485
+4.3
+5,139
+1.08
+388,097
+3.9
+4,069
+(%)
+1.05
+2,191,188
+19.9
+26,208
+1.20
+2,071,035
+20.9
+22,568
+1.09
+Yangtze River Delta
+Pearl River Delta
+NPLs
+Loan
+9,922,374
+100.0
+93,689
+0.94
+Non-performing corporate loans stood at RMB92,277 million, increasing by RMB19,024 million from the end of the previous
+year, and NPL ratio was 1.21%, up 0.17 percentage points, which was mainly due to loan default by some enterprises,
+especially small and medium-sized enterprises as a result of operating difficulties in the face of macroeconomic slowdown
+and weak external markets. Non-performing personal loans stood at RMB32,149 million, increased by RMB11,723 million,
+and NPL ratio was 1.05%, which was mainly due to the increase in NPL amount of personal loans as a result of decrease of
+operating income or salaries of some borrowers.
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+In RMB millions, except for percentages
+31 December 2013
+(%)
+At 31 December 2014
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+(%)
+NPLs
+(%)
+Percentage
+1,453,273
+13.2
+23,858
+Western China
+1,988,934
+18.0
+20,701
+1.04
+1,750,714
+17.6
+11,490
+1.07
+0.66
+625,457
+5.7
+6,932
+1.11
+568,511
+5.7
+5,443
+0.96
+Northeastern China
+14,323
+13.5
+1,340,628
+1.64
+1,319,021
+13.3
+15,507
+1.18
+Bohai Rim
+1,861,749
+16.9
+20,611
+1.11
+1,731,710
+17.5
+16,626
+0.96
+Central Chinal
+1,500,909
+13.6
+17,194
+1.15
+124,497
+ICBC
+0.75
+2.6
+Credit Risk
+Credit Risk Management
+The Bank is primarily exposed to credit risk. Credit risk is the risk that loss is caused to banking business when the borrower
+or counterparty fails to meet its contractual obligations. The Bank's credit risks mainly originate from loans, treasury
+operations (including due from banks, placements with banks, reverse repurchase agreements, corporate bonds and financial
+bonds investment), receivables and off-balance sheet credit business (including guarantees, commitments and financial
+derivatives trading).
+The Bank strictly adheres to the guidance from CBRC regarding credit risk management and other regulatory requirements,
+diligently fulfills established strategies and objectives under the leadership of the Board of Directors and the Senior
+Management, and implements an independent, centralized and vertical credit risk management mode. The Board of
+Directors assumes the ultimate responsibility for the effectiveness of the implementation and monitoring of credit risk
+management. The Senior Management is responsible for executing the strategies, overall policy and system regarding credit
+risk management approved by the Board of Directors. The Credit Risk Management Committee of the Senior Management
+is the reviewing and decision-making organ of the Bank in respect of credit risk management, is responsible for reviewing
+material and important affairs of credit risk management, and performs its duty in accordance with the Working Regulations
+for the Credit Risk Management Committee. The credit risk management departments at different levels undertake the
+responsibility of coordinating credit risk management at respective levels, and the business departments play their roles in
+implementing credit risk management policies and standards in respective business areas.
+The Bank's credit risk management has the following characteristics: (1) standardized credit management processes are
+implemented throughout the Bank; (2) the principles and processes of risk management focus on the entire process of credit
+business, covering customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and post-
+lending monitoring; (3) special organization is set up to supervise the entire process of credit business; (4) the qualification
+of the employees who are responsible for credit review and approval is strictly reviewed; and (5) a series of information
+management systems are designed to reinforce monitoring on the risks.
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the 12-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months for which the lender is in default, anticipated loss
+rate, credit rating, collaterals and other quantitative and qualitative factors.
+In 2014, in response to the changes in the macroeconomic environment and financial regulatory requirements, the Bank
+proactively innovated the credit risk management mechanism and means, enhanced the foresight and effectiveness of risk
+prevention and control, and continuously improved credit risk management. The Bank set up a credit risk monitoring center,
+and strengthened the dynamic monitoring and real time pre-warning of credit risk using big data technology. The Bank
+continued to reinforce credit asset quality management, enhance NPL management, recovery and disposal, and maintain
+stable credit asset quality on the whole.
+◆ Credit Risk Management of Corporate Loans
+Discussion and Analysis
+The Bank continued to strengthen the formation of the credit rule framework and improve credit system. The Bank
+improved loan guarantee management and revised the administrative measures for loan guarantee. The Bank designed the
+new version of basic operating procedures for credit business of corporate customers, and enhanced the control over risks
+throughout the whole process of credit business while optimizing and integrating business processes. The Bank expedited
+the improvement of rules for Internet-based financing business, and formulated the rules and measures related to supporting
+credit products of e-mall platform.
+52
+ICBC
+Discussion and Analysis
+The Bank strengthened risk management of loans to LGFVs. The Bank strictly implemented various loan policies and
+regulatory requirements of CBRC on loans to LGFVs. The Bank also strengthened the control over total financing amount
+and adjusted credit direction dynamically and further optimized the loan structure.
+The Bank strengthened risk management of the real estate industry. The Bank closely monitored the risk changes in the real
+estate market of each place and reinforced the control over total amount of financing for real estate development. It also
+formulated strict customer and project eligibility criteria, enhanced the monitoring of risks from outstanding real estate loans
+and promptly took measures to prevent and mitigate project risk.
+The Bank strengthened risk management in relation to trade finance. The Bank revised domestic trade finance and supply
+chain finance credit policy, in order to strengthen the prevention and control of trade finance business risk. The Bank
+modified and improved trade finance product rules to fortify the foundation for product management. The Bank enhanced
+the inspection on the truthfulness of trade background, and specially reinforced the refined management of trade finance
+with the focus on preventing and combating fraudulent transactions. The Bank perfected supply chain finance management,
+tightened the core enterprise eligibility criteria and reinforced the supply chain financing limit management. The Bank also
+strengthened the quality management of trade finance assets.
+The Bank strengthened credit risk management of small enterprise. The Bank reinforced the small enterprise credit market
+plan, and promptly adjusted credit policies of small enterprises. The Bank reinforced credit orientation management on small
+enterprises and improved post-lending management. The Bank inspected and evaluated risks of small enterprises involved in
+industries with excessive capacity, strictly controlled total financing amount, and promptly took effective risk management
+measures to avoid systemic risks. Furthermore, the Bank optimized credit business system for small enterprises, applied big
+data technology to create the risk monitoring model, and increased accuracy and timeliness of risk pre-warning.
+◆ Credit Risk Management of Personal Loans
+The Bank continuously adjusted and improved industrial credit policy in accordance with the macroeconomic policy, the
+prevailing trends of industry policy and the characteristics of the operation of the industry. The Bank vigorously supported
+the development of advanced manufacturing industry, modern services, cultural industry and strategic emerging industries,
+highlighted key indicators such as resource consumption, benefit and environmental protection in industrial credit policy,
+strictly controlled the loans to local government financing vehicles (LGFVS) and real estate industry, and focused on
+preventing industry-specific systemic risks.
+The Bank improved the credit risk management system for personal loans, proactively adjusted personal credit product
+structure, optimized credit resource allocation and further perfected the management of credit risk on personal loans. The
+Bank continued to push forward the personal customer financing limit management, improved limit management process
+and realized the differentiated approval of customer limits. The Bank bettered the classified approval process for residential
+mortgages, and continued to implement the differentiated housing credit policy. The Bank proactively furthered the
+innovation in personal consumer loan products. The Bank enhanced the personal loan compliance management to ensure
+the business legality and compliance.
+51
+In 2014, the Bank further improved the enterprise risk management system, proactively implemented domestic and overseas
+regulatory requirements on systemically important banks, strengthened the development of enterprise risk management
+regulations, and further strengthened the risk appetite and risk limit management system. It reinforced consolidated
+risk management at the Group level, with the focus on risk management of non-banking subsidiaries. It also reinforced
+country risk management and strengthened country risk monitoring and reporting and limit management. The Bank also
+propelled the implementation of advanced capital management approaches and improved the measurement system, system
+development and management application concerning credit risk, market risk and operational risk. Accordingly, the Bank
+further improved the level of its enterprise risk management.
+Internal Control &
+Compliance Department
+Risk Management Committee
+of the Board of Directors
+Risk Management
+Committee
+Asset & Liability
+Management Committee
+Chief Risk Officer
+Operational Risk
+Risk Management
+Department
+Market Risk
+Annual Report 2014
+Asset & Liability
+Management Department
+At the level of Head Office
+At the level of Board
+of Directors
+Management of Branches
+Risk Management
+Departments of Branches
+Primary reporting line
+Secondary reporting line
+At the level of branches
+Note: Substantial risks including country risk and reputational risk have been incorporated into the enterprise risk management framework.
+Liquidity Risk
+Credit Risk
+◆ Credit Risk Management of Credit Card Business
+◆ Credit Risk Management of Treasury Operations
+Percentage
+Percentage
+Amount
+10,582,050
+(%)
+95.97
+Amount
+9,632,523
+(%)
+97.08
+At 31 December 2014
+319,784
+196,162
+1.98
+124,497
+1.13
+93,689
+0.94
+66,809
+0.60
+2.90
+In accordance with risk characteristics and trends of credit card business, the Bank improved credit card credit policies and
+reinforced dynamic and differentiated credit management of credit cards. The Bank strictly controlled the lending to the
+same customer by several branches, and adjusted personal credit card limit based on financing limit, so as to effectively
+control the credit exposure. The Bank integrated the credit card approval system, and enhanced the precise credit of credit
+cards and credit risk prevention and control capability. The Bank extended the functions of dynamic management of credit
+cards and reinforced post-lending risk control. The Bank put into service the real-time intervention system for credit card
+authorization and the visible monitoring platform of big data of credit cards, improved business monitoring system and
+enhanced business monitoring and analysis capability. The Bank reinforced overdue loan collection management of credit
+cards, optimized and adjusted collection strategies and further strengthened the NPL collection and disposal of credit cards.
+At 31 December 2013
+Total
+The Bank's treasury operations are exposed to credit risk mainly as a result of bonds investment and trading, interbank
+offering, bills with reverse repurchase agreements and RMB securities borrowing. The RMB debt securities investment
+portfolio mainly included bonds issued by the Chinese government and other domestic issuers. The foreign currency debt
+securities investment portfolio mainly included investment-rated bonds. Most of the counterparties of RMB securities
+borrowing business were financial peers with good asset quality. Credit risk management measures adopted by the Bank
+in relation to treasury operations mainly comprised defining customers' entry criteria, controlling credit limit, controlling
+investment limit (scale), strict margin management, rating management and controlling authorization limit for single
+transactions. Except for sovereign bonds, central bank bills and other government bonds, the Bank has purchased bonds of
+an entity within the credit line limit of that entity as approved by the Bank. The Bank set financing limits for each interbank
+offering and adopted the principle of management for both credit and authorization.
+Annual Report 2014
+53
+Discussion and Analysis
+In 2014, the Bank continued to strengthen credit risk management of treasury operations. It further developed the credit
+risk management system for institutional customers, improved the risk monitoring and analysis mechanism and proactively
+optimized the structure of bonds investment portfolios based on international and domestic financial market trends, thus
+effectively reducing credit risk of bonds investment portfolios.
+♦ Risk Management of Financial Asset Service Business
+The Bank's financial asset service business is exposed to risks mainly as a result of credit risk of financing customers,
+management risk of partner institutions and market risk of price fluctuation of underlying assets. The Bank took various
+risk management measures in the financial asset service business. The Bank implemented measures to manage access of
+capital according to different business nature of financial asset business and risk management requirements, performed
+access approval process in terms of investment customers, financing customers, partner institutions, new business types, new
+products and domestic and overseas affiliates of financial asset service business according to applicable access standards,
+included business authorization into unified authorization management of the Bank, and established risk limit management
+system.
+In 2014, in view of the Bank's core objective in building sound financial asset service policies and rules, the Bank kept
+enhancing the risk management level of financial asset service business. It formulated 10 policies, including basic rules
+on management of financial asset service business and administrative measures for direct investment under the wealth
+management plan. As a result, policies on agency investment business under financial asset service covered all products,
+all processes and all links, and policy and systems for financial asset service business were fully established. The Bank also
+further regulated the authorization of its agency investment business and accelerated the system development for its
+financial asset service business.
+In RMB millions, except for percentages
+Credit Risk Analysis
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Item
+Pass
+Special mention
+NPLs
+Substandard
+Doubtful
+Loss
+By the end of 2014, the Bank's maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements was RMB22,440,721 million, up by RMB1,484,682 million from the end of the previous year. Please refer to
+"Note 54.(a)(i) Details of the Bank's Maximum Exposure to Credit Risk Without Taking Account of Any Collateral and Other
+Credit Enhancements". For mitigated risk exposures of credit risk asset portfolio of the Bank, please refer to "Credit Risk" of
+the 2014 Capital Adequacy Ratio Report.
+Credit and Investment
+Management Department
+President
+Board of Directors
+Transportation, storage and postal services
+Borrower F
+0.2
+20,076
+Transportation, storage and postal services
+Borrower E
+0.2
+22,452
+121,013
+Manufacturing
+0.2
+26,099
+Transportation, storage and postal services
+Borrower C
+0.3
+28,090
+Transportation, storage and postal services
+Borrower B
+Borrower D
+0.8
+19,263
+Borrower G
+2.5
+270,381
+Total
+0.1
+16,268
+Transportation, storage and postal services
+Borrower J
+0.1
+0.2
+16,344
+Borrower I
+0.2
+16,968
+Transportation, storage and postal services
+Borrower H
+0.2
+18,517
+Transportation, storage and postal services
+Mining
+86,304
+% of total
+Amount
+Annual Report 2014
+49
+Discussion and Analysis
+IT-based Banking Development
+The Bank continued to improve the "big data" basis for IT-based banking development, inputted data of financial market,
+e-commerce platform and comprehensive subsidiaries into data warehouse, and incorporated personal Internet banking
+logs and other unstructured data into the Group's database. It strengthened data analysis mining and application in terms
+of e-commerce, risk management, precision marketing and product classification. It integrated business handling process,
+continued to improve uniform view of customer information and optimized the customer-oriented marketing assessment
+system. It also perfected the financial asset service system constantly and realized management on asset investment and
+operation throughout the complete process. Furthermore, the Bank advanced the system building in respect of international
+and diversified operations with FOVA covering 38 overseas institutions, and accomplished comprehensive business system
+development in ICBC-AXA, ICBC Credit Suisse Investment Management and other subsidiaries.
+The information system maintained stable operation. Among the domestic financial peers, the Bank took the lead in
+switching operation of city-wide host systems in two technical parks within several minutes, and transformed from
+traditional disaster recovery mode to dual-center parallel mode, to ensure the around-the-clock operation of global business
+in an all-round manner. It continued to build the group-wide daily administrative mechanism on information security and
+conducted tiered authorization and protection to information. By utilizing the cryptographic algorithm under national
+security review, the Bank reformed the financial IC card, mobile payment and other application systems, enhanced its
+controllability on information security protection and reinforced security protection measures for customer service system. In
+2014, the Bank obtained 50 patents from the State Intellectual Property Office, and the total number of patents owned by
+the Bank increased to 357.
+Human Resources Management
+Based on the bank-wide information-based, internationalized and diversified development strategy, the Bank adhered to
+the concept of humanity, service collaboration and scientific management, and continued to boost innovation in philosophy
+and methods as well as system and mechanism on human resources management of the Group. It strengthened the human
+resources system building, deepened cadre system reform and optimized official rank system. It improved remuneration
+incentive mechanism and expanded the career development platform for all staff. It ceaselessly enhanced the Group's
+human resources allocation and perfected the supporting mechanism for selection, utilization, cultivation and reserve of
+talents. It carried forward the institutional reform and in-depth human resources management project.
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.08% ordinary shares of Standard Bank, and both sides
+maintains frequent strategic cooperation and exchange. In 2014, upholding the spirit of mutually beneficial cooperation,
+both sides continued to keep sound cooperation in areas such as corporate banking and investment banking, financial
+market and international clearing and settlement, and precious metals. At the end of 2014, Standard Bank recorded total
+assets of ZAR1,902,845 million and net assets of ZAR161,634 million. It generated an annual net profit of ZAR17,905
+million.
+Focusing on the establishment of a perfect employee training and qualification authentication system, the professional
+competence of all employees was enhanced. The Bank reinforced training innovation, carried out the "study+practice"
+dualistic training mode and the training evaluation and feedback mechanism of "compulsory examination for each training
+course", built the knowledge sharing platform and pushed information to front-line staff on a real-time basis. It set up the
+"ICBC College" website on the intranet, explored to launch ICBC mobile learning, and organized "bank-wide reading"
+series activities, providing diversified and multi-channel learning path for all staff. In 2014, the Bank organized 52 thousand
+sessions of training for 4.56 million persons, with an average of 9.5 days per person. The total page view of the bank-wide
+online college reached 25.00 million person-times and the daily average page view came at 95 thousand person-times.
+The Bank intensified the dissemination of corporate culture inside and outside the Bank. It also organized the fourth
+"Touching ICBC" selection activity, to inspire staff and gather strengths of the Bank. It carried out activities themed "Year
+for Developing a Bank of People's Satisfaction" and led staff to set up the customer first service concept, enhancing
+customer satisfaction of the whole bank again. Through the column of "President talks about culture" on the Internal
+Information Net, the Bank established an experience sharing platform on cultural development for administrative staff at
+various levels. It reinforced publicity and cultural exchange, and made special coverage on "Enterprise Spirit, Gathering
+Strength" at China Economic Net. In addition, the Bank strengthened compliance culture development and blended such
+culture into staff compliance education.
+ICBC
+RISK MANAGEMENT
+Discussion and Analysis
+Enterprise Risk Management System
+Enterprise risk management is a process where the Board of Directors, the Senior Management and other employees of the
+Bank perform their respective duties and responsibilities to take effective control of all the risks at various business levels
+in order to provide reasonable guarantee to the achievement of objectives of the Bank. The principles of risk management
+include matching return with risk, internal check and balance with consideration as to efficiency, risk diversification,
+combination of quantitative and qualitative analysis, dynamic adaptability adjustments and gradual improvement, etc.
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Senior Management and its special committees, the Risk Management Department, the Internal Audit Department, etc. The
+risk management organizational structure is illustrated below:
+Senior Executive
+Vice Presidents
+50
+STANDARD BANK GROUP LIMITED
+Majority Equity Participation Company
+ICBC-AXA, a subsidiary of the Bank, has a registered capital of RMB8,705 million, in which the Bank holds a 60% stake.
+ICBC-AXA engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and
+re-insurance of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the
+State, and other businesses approved by the CIRC. At the end of 2014, it recorded total assets of RMB40.5 billion and net
+assets of RMB8,299 million. It generated a net profit of RMB70.72 million during the year.
+Transportation, storage and postal services
+Industry
+Borrower
+Borrower A
+In RMB millions, except for percentages
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted for
+4.8% and 14.9% of the Bank's net capital respectively. The total amount of loans granted to the top ten single customers
+was RMB270,381 million, accounting for 2.5% of the total loans. The table below shows the details of the loans granted to
+the top ten single borrowers of the Bank as at the end of 2014.
+BORROWER CONCENTRATION
+The balance of extended loans amounted to RMB28,988 million, representing an increase of RMB18,605 million from the
+end of the previous year, of which the NPL was RMB4,212 million, representing an increase of RMB1,736 million from the
+end of last year.
+EXTENDED LOANS
+Renegotiated loans and advances amounted to RMB4,579 million, representing a decrease of RMB350 million or 7.1% as
+compared to the end of the previous year. Renegotiated loans and advances overdue for over three months amounted to
+RMB1,926 million, representing a decrease of RMB775 million.
+RENEGOTIATED LOANS
+Overdue loans stood at RMB210,578 million, representing an increase of RMB76,947 million from the end of the previous
+year. Among which, loans overdue for over 90 days amounted to RMB115,168 million, representing an increase of
+RMB35,405 million.
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Major Domestic Subsidiaries
+Discussion and Analysis
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a registered capital of RMB200 million, in which
+the Bank holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other
+businesses as approved by the CSRC, and owns many business qualifications including public fund, QDII, enterprise annuity,
+specific asset management, domestic and overseas investment manager of social security fund, RQFII, insurance asset
+management and special asset management. It is one of the fund companies with "full-qualification" in the industry. ICBC
+Credit Suisse Asset Management (International) and ICBC Credit Suisse Investment are structured under ICBC Credit Suisse
+Asset Management. At the end of 2014, ICBC Credit Suisse Asset Management managed a total of 52 public funds and over
+150 enterprise annuities and special account portfolios, and the size of the assets under management amounted to over
+RMB254.1 billion, recorded total assets of RMB2,285 million and net assets of RMB1,539 million. It generated an annual net
+profit of RMB505 million.
+ICBC FINANCIAL LEASING CO., LTD.
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a registered capital of RMB11.0 billion. It mainly engages
+in financial leasing in the fields of aviation, shipping and large-scale equipment and provides a variety of financial and
+industrial services including rental assignment, investment funds, securitization of investment assets, assets transactions and
+management. It has become a financial leasing company with the strongest comprehensive strength in China. At the end of
+2014, ICBC Leasing recorded total assets of RMB235.6 billion and net assets of RMB19,077 million. It generated a net profit
+of RMB2,813 million during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+36,532
+166,154
+0.37
+0.45
+Proportion
+(%)
+Amount
+(%)
+Amount
+Item
+Proportion
+At 31 December 2014
+31 December 2013
+Loans secured by mortgages
+In RMB millions, except for percentages
+As at the end of 2014, the allowance for impairment losses on loans stood at RMB257,581 million, a year-on-year increase
+of RMB16,622 million. Allowance to NPL was 206.90%; allowance to total loans was 2.34% and that to loans of domestic
+branches was 2.48%.
+257,581
+216,336
+1,498
+274
+(2,779)
+(38,364)
+(4,489)
+(2,779)
+(33,875)
+1,224
+41,245
+DISTRIBUTION OF LOANS BY COLLATERAL
+(137,660)
+4,964,791
+4,446,023
+1,534,012
+Guaranteed loans
+1.5
+148,258
+3.2
+350,274
+Including: Discounted bills
+11.9
+45.0
+1,184,175
+1,372,605
+Pledged loans
+17.3
+1,720,535
+18.8
+2,070,366
+Including: Residential mortgages
+44.8
+12.5
+13.9
+(114,893)
+(861)
+At the beginning of the year
+CHANGES IN ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+NPLs of the transportation, storage and postal services industry declined by a large margin. Increase in NPLs of the wholesale
+and retail industry was largely attributable to loan default of some wholesale enterprises triggered by funds shortage,
+which is caused by macroeconomic slowdown and price fall of bulk commodity. NPLs increased in the manufacturing
+industry, mainly because of operating difficulties of some enterprises in industries facing overcapacity pressure, amidst
+macroeconomic slowdown and declining market demand.
+Discussion and Analysis
+ICBC
+56
+In 2014, the Bank navigated credit extension and credit structure adjustment in a scientific manner, and proactively
+supported the development of advanced manufacturing, modern service sector, culture industries and strategic emerging
+industries in line with the country's economic structural adjustment orientation. The increment of loans to the leasing and
+commercial service industry was RMB118,950 million, up 26.1%, which was mainly attributable to the rapid growth of
+loans to the commercial service and lease of machinery equipment. Loans granted to the transportation, storage and postal
+services industry increased by RMB115,782 million or 9.5%, which was mainly used to support high-quality transportation
+infrastructure construction projects. Loans granted to the production and supply of electricity, heat, gas and water industry
+rose by RMB81,403 million or 13.2%, mainly meeting the loan demand of the energy sector. Loans to the real estate
+industry decreased by RMB20,114 million, which primarily resulted from continuous strict limit management on the industry.
+Loans to the wholesale and retail industry declined by RMB13,666 million, which was mainly caused by the Bank's proactive
+adjustment of its commodity financing business.
+1.10
+Charge for the year
+69,842
+6,338,720
+1.31
+88,670
+100.0
+6,743,899
+Total
+0.64
+1,061
+100.0
+(22,767)
+Including: Impairment allowances charged
+Reversal of impairment allowances
+861
+193,927
+134,411
+59,516
+56,267
+18,657
+37,610
+Total
+240,959
+Impairment allowances transferred
+201,894
+assessed
+Collectively
+Individually
+assessed
+In RMB millions
+At the end of the year
+Recoveries of loans and advances previously written off
+Write-offs
+Accrued interest on impaired loans
+39,065
+1,365,199
+13.8
+Unsecured loans
+Item
+Loan
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+NPL ratio
+(%)
+7,612,592
+69.0
+92,277
+1.21
+7,046,515
+71.0
+1.35
+133,631
+Corporate loans
+1.91
+Percentage
+Percentage
+43,020
+0.43
+8,329
+0.08
+14,137
+0.14
+11,026,331
+100.00
+NPL ratio
+9,922,374
+Loan quality was generally stable. As at the end of 2014, according to the five-category classification, pass loans amounted
+to RMB10,582,050 million, representing an increase of RMB949,527 million from the end of the previous year and
+accounting for 95.97% of total loans. Special mention loans amounted to RMB319,784 million, representing an increase
+of RMB123,622 million and accounted for 2.90% of the total. NPLs amounted to RMB124,497 million, increased by
+RMB30,808 million, and NPL ratio was 1.13%, up 0.19 percentage points.
+54
+ICBC
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+At 31 December 2014
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2013
+100.00
+210,578
+0.23
+22,685
+1 to 3 years
+91 days to 1 year
+1 to 90 days
+Overdue periods
+OVERDUE LOANS
+Discussion and Analysis
+57
+Annual Report 2014
+Over 3 years
+Loans secured by mortgages stood at RMB4,964,791 million, representing an increase of RMB518,768 million or 11.7%
+from the end of the previous year. Pledged loans amounted to RMB1,372,605 million, representing an increase of
+RMB188,430 million or 15.9% from the end of the previous year. Unsecured loans amounted to RMB3, 154,923 million,
+representing an increase of RMB227,946 million or 7.8% from the end of the previous year.
+9,922,374
+100.0
+11,026,331
+Total
+29.5
+2,926,977
+28.6
+3,154,923
+100.0
+Total
+At 31 December 2014
+In RMB millions, except for percentages
+0.13
+14,882
+0.21
+20,848
+0.32
+35,152
+0.37
+36,230
+0.59
+65,134
+0.54
+53,868
+0.87
+95,410
+% of total
+Amount
+% of total
+Amount
+At 31 December 2013
+49,359
+4,181
+Discussion and Analysis
+Reputational Risk
+Based on the objective to ensure legal and compliant operation, the Bank always attaches importance to establishing a
+sound legal risk management system and forming a full-process legal risk prevention and control mechanism to support and
+secure business innovation and market competition, and prevent and eliminate various potential or practical legal risks. The
+Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk management,
+and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for executing
+the legal risk management strategy and policy, formulating relevant systems and measures, and examining and approving
+relevant important affairs. The Legal Affairs Department of the Head Office is the functional department in charge of legal
+risk management across the Bank, with relevant business departments providing related support and assistance on the
+work regarding legal risk prevention and control, and the affiliates and domestic and overseas branches undertaking the
+responsibility of legal risk management of their respective institutions.
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arise out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions and requirements of other relevant rules in the operational management of
+the Bank; the unfavorable legal defects that exist in products, services or information provided, transactions engaged in,
+and contracts, agreements or other documents executed by the Bank; legal disputes (legal or arbitration proceedings)
+between the Bank and its customers, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally and
+externally.
+Legal Risk
+In 2014, in accordance with latest regulatory requirements concerning operational risk and the trends of operational risk,
+the Bank continuously strengthened the refined management of operational risks in key fields and core links, gradually
+promoted operational risk management in overseas institutions, and further improved the operational risk management of
+the Group. The Bank further developed the operational risk management policies, improved the three-tier operational risk
+management policy system consisting of regulations, measures and implementing rules and manuals concerning operational
+risk management. It strengthened the risk management functions and system development of the controlling departments of
+various operational risks, continuously enhanced compliance supervision over credit business and improved the operational
+risk control system of each business line. Besides, the Bank promoted the application of operational risk limit management
+tools, reinforced the compliance management of operational risk and reinforced quality control over the loss data and
+assessment data concerning operational risk. Moreover, the Bank fully upgraded the operational risk measurement system,
+proactively promoted the optimization of system functions in domestic institutions and extension of system functions in
+overseas institutions, laying a solid foundation for the implementation of the advanced measurement approach (AMA) for
+operational risk. During the reporting period, the operational risk management system of the Bank operated smoothly and
+the operational risk was controllable on the whole.
+The Bank strictly followed the requirements of the Guidance to the Operational Risk Management of Commercial Banks
+issued by CBRC. Under the leadership of the Board of Directors and the Senior Management, the Bank adopted the
+operational risk control mode of "integrated management, classified control". The Board of Directors assumes relevant
+responsibility for the effectiveness of the operational risk management according to the Articles of Association, and the
+Senior Management is responsible for implementing the strategy, overall policy and system for operational risk management
+approved by the Board of Directors. The Operational Risk Management Committee under the Senior Management, as
+the organizer and coordinator of operational risk management of the Bank, is responsible for reviewing and approving
+significant matters related to operational risk management according to the Working Regulations for the Operational Risk
+Management Committee. Marketing and product departments at all levels form the first line of defense of operational risk
+management, which assume direct responsibility for operational risk management in each business line. Internal control and
+compliance departments at various levels are comprehensive management departments for operational risk in institutions
+at various levels and assume the duty of operating the second line of defense of operational risk management, which
+are responsible for the overall management of operational risks of institutions at various levels and for the arrangement
+and organization for the establishment and implementation of operational risk management system at each level;
+discipline enforcement, security, human resources, IT, finance and accounting, legal affairs, operation management, credit
+management and risk management departments at all levels are classification control departments for operational risk in
+institutions at various levels, which are responsible for management and control on specific types of operational risk. These
+departments, together with comprehensive management departments, form the second line of defense of operational risk
+management. The internal audit departments at all levels are responsible for auditing and evaluating the operation of the
+operational risk management system, and form the third line of defense.
+Discussion and Analysis
+63
+Annual Report 2014
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, customers, products and business activities, and external fraud constitute major sources of
+operational risk losses of the Bank.
+Operational Risk Management
+Operational Risk
+Note: Please refer to "Note 54. (b) to the Financial Statements: Liquidity risk".
+64
+1,278,463
+Undated
+3,372,950
+3,117,809
+5 years
+4,628,344
+4,387,952
+2,978,075
+(529,145)
+(767,112)
+(339,167)
+(7,569,949)
+At 31 December 2013
+years
+3,082,273
+1 year
+(479,125)
+(782,933)
+(325,851)
+Total
+1,537,304
+ICBC
+Discussion and Analysis
+In 2014, the Bank continued to strengthen legal risk management and control and provided stronger legal support to
+business transformation and innovative development with a view to ensuring the legal and compliant operation and
+healthy business development of the Group. The Bank advanced IT-based legal risk prevention and control and upgraded
+the working mechanism and process for consolidated legal risk management. The Bank collected NPLs by legal means and
+improved the effectiveness of legal collection. In addition, the Bank strengthened the management of lawsuits, in particular
+where the Bank was the defendant, to continuously enhance litigation management. The Bank also further standardized
+contract management and reinforced authorization management, trademark management and intellectual property
+protection.
+At 31 December 2014
+Risk type
+CHANGES IN VARIOUS RISK MEASUREMENT APPROACHES
+In April 2014, CBRC officially approved the Bank's implementation of advanced capital management approaches. In
+accordance with the implementation terms of the approval, the foundation internal ratings-based (IRB) approach has been
+adopted for corporate credit risk, the IRB approach for retail credit risk, the internal model approach (IMA) for market risk,
+and the standardized approach for operational risk meeting regulatory requirements.
+Capital Adequacy Ratio and Leverage Ratio
+In 2014, the Bank further improved its capital management mechanism, strived to promote the optimization of bank-
+wide capital utilization, intensified the rigid constraint of economic capital on business and continued to elevate the capital
+use efficiency and return on capital. On the basis of supplementing core tier 1 capital by retained profits, the Bank issued
+preference shares for the first time to replenish the additional tier 1 capital, and issued eligible tier 2 capital instruments with
+write-down feature for the first time to replenish the tier 2 capital, further consolidating the bank-wide capital base and
+reinforcing its capacity in supporting the real economy development. Moreover, the Bank coordinated, allocated and utilized
+various capital resources to satisfy capital supplement requirements of subsidiaries. At the end of 2014, the Bank's capital
+management indicators performed soundly, and capital adequacy ratio reached the highest level since its listing.
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly consolidating and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channel, raising capital quality and optimizing capital structure. The Bank's capital management covers
+various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management and capital financing management.
+Discussion and Analysis
+CAPITAL MANAGEMENT
+ICBC
+66
+In 2014, in response to the new changes in international political and economic situation, the Bank continued to strengthen
+country risk management according to regulatory requirements and business development. It further improved the country
+risk management policies and procedures, closely monitored country risk exposure, kept tracking, monitoring and reporting
+country risk and promptly updated and adjusted the rating and limits of country risk. The Bank also further improved the
+country risk pre-warning mechanism, actively conducted stress test on country risk and effectively controlled country risk
+while pushing ahead the internationalization strategy.
+The Bank strictly observes the Guidelines on the Management of Country Risk by Banking Financial Institutions and other
+regulatory requirements of CBRC, implemented a management model where responsibilities of each department or business
+line are clearly defined under the leadership of the Board of Directors and the Senior Management. The Board of Directors
+assumes the ultimate responsibility for the effectiveness of country risk management. The Senior Management is responsible
+for executing the country risk management policies approved by the Board of Directors. The Risk Management Committee
+of the Head Office is responsible for reviewing matters regarding country risk management. The Bank manages and controls
+country risk through a series of management tools, including country risk assessment and rating, country risk limits for the
+entire group and continuous statistics, analysis and monitoring of country risk exposure, as well as country risk assessment
+using stress tests. The Bank reviews the country risk rating and limits at least once every year.
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or region.
+Country Risk
+In 2014, the Bank continued to strengthen reputational risk management and enhance the reputational risk management
+level and prevention ability across the Bank. According to the latest regulatory requirements and external situation changes,
+the Bank further improved reputational risk management system and working mechanism. In response to the influence of
+the new media development on reputational risk management, the Bank studied and worked out corresponding reputational
+risk management strategies. It also carried out identification, evaluation, monitoring, control, mitigation and assessment
+of reputational risk in an in-depth manner and strengthened consolidated management of reputational risk. Besides, it
+conducted reputational risk assessment on new businesses and products, made comprehensive inspections on reputational
+risk and created the reputational risk management ledger level by level. In addition, the Bank organized emergency response
+drill on reputational risk and reinforced prevention control and mitigation of reputational risk.
+Discussion and Analysis
+65
+Annual Report 2014
+As the highest decision-making body of the Bank's reputational risk management, the Board of Directors is responsible for
+formulating strategies and policies concerning reputational risk management that are in line with the strategic objective of
+the Bank. The Senior Management is responsible for implementing such strategies and policies established by the Board
+of Directors and leading reputational risk management of the Bank. The Bank has established a special reputational risk
+management team to take charge of the daily management of reputational risk.
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the objective and planning for reputational risk management, including
+the establishment and improvement of the reputational risk management system through the identification, assessment,
+monitoring and handling of reputational risk factors and reputational events. The Bank adheres to the prevention oriented
+principle and incorporates reputational risk management into each aspect of operational management of the Bank and
+every customer service process, with a view to controlling and mitigating reputational risk at its source and minimizing the
+possibility of occurrence of and influence from reputational events.
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+At 31 December 2014
+During the reporting period, no domestic or overseas institutions or any employees were found to be or were suspected of
+being involved in money laundering or terrorist financing activities.
+In 2014, the Bank completed the reform on centralized identification mechanism for the global special control list, thus
+realizing "centralized, specialized and systematic management" of sanction-related risks in key business areas. It revised
+the risk classification system for anti-money laundering customers, regularly conducted analysis on money laundering types
+and completed the money-laundering risk assessment on existing products. The Bank also formulated the administrative
+guideline for anti-money laundering of overseas institutions and intensified supervision over and inspection on their anti-
+money laundering actions, which effectively prevented the anti-money laundering compliance risk and reputational risk
+arising amidst the international development of the Group. The Bank also developed the model for monitoring terrorism
+financing, which reinforced system monitoring, manual identification and timely reporting of terrorism financing activities.
+Besides, it optimized the anti-money laundering monitoring model and system functions, strengthened the reporting,
+analysis, judgment and random quality examination on suspicious transactions and improved the value of information in
+the suspicious transaction reports. The Bank upgraded customer information maintenance to further enhance the integrity,
+authenticity and validity of customer information. In addition, it stepped up anti-money laundering team building and
+organized anti-money laundering trainings and qualification authentication, so as to improve the compliance awareness,
+professionalism and duty performance ability of anti-money laundering professionals.
+In strict compliance with applicable laws and regulations concerning anti-money laundering, the Bank actively implemented
+the "risk-based" regulatory requirements in respect of anti-money laundering, earnestly fulfilled the social duties and legal
+obligations concerning anti-money laundering, and kept enhancing the Group's risk management level regarding anti-money
+laundering and anti-terrorist financing.
+Anti-Money Laundering
+(7,958,354)
+At 31 December 2014
+Over
+1 to 5
+Annual Report 2014
+In 2014, in accordance with relevant regulatory requirements specified by CBRC in the Regulation Concerning Liquidity Risk
+of Commercial Banks (Provisional) and based on business management needs, the Bank promptly revised the liquidity risk
+management measures, liquidity risk contingency plan, RMB fund management measures and other relevant policies and
+rules and further improved the liquidity risk management mechanism. The Bank also actively promoted system development
+regarding liquidity risk management and realized more sophisticated and automated management and the Bank successfully
+gained access to the PBC second-generation payment system, further improved the liquidity management efficiency. Besides,
+the Bank kept enhancing its consolidated liquidity risk management through strengthening coordinated management of on-
+and off-balance sheet liquidity and unified management of domestic and overseas liquidity.
+Liquidity Risk Management
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, perform other payment obligations and satisfy other funding demands of normal business development.
+Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of loans by
+customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization, operating
+losses, derivatives trading risk and risk associated with its affiliates.
+Liquidity Risk
+For value at risk (VaR) of the trading book of the Bank, please refer to "Note 54. (c)(i) to the Financial Statements: Value at
+Risk (VAR)".
+Please refer to "Note 54. (c)(iii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+17,237
+104,487
+20,316
+(24,587)
+(149,043)
+(22,018)
+(136,602)
+126,041
+Total foreign exchange exposure, net
+exchange items, net
+Exposure of off-balance sheet foreign
+41,824
+253,530
+42,334
+262,643
+Exposure of on-balance sheet foreign
+exchange items, net
+USD
+equivalent
+RMB
+equivalent
+RMB
+Item
+61
+At 31 December 2013
+Discussion and Analysis
+The Bank's liquidity risk management system conforms to the overall development strategy and the entire risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control procedures for liquidity risk and a complete management information system.
+to
+1 to 3
+months
+1 month
+demand
+Less than
+on
+3 months
+Overdue/
+repayable
+In RMB millions
+LIQUIDITY EXPOSURE ANALYSIS
+The Bank also assessed the liquidity risk status by using liquidity exposure analysis. As at the end of 2014, the increased
+positive liquidity exposure for the 1 to 5 years category was mainly due to the increase of loans with corresponding term and
+bond investment; the increased positive liquidity exposure for the over 5 years category was mainly attributed to the increase
+of loans. Deposits of the Bank maintained steady growth with a high deposition rate, and at the same time the Bank made
+major investment in central bank bills, treasury bonds and other high-liquidity assets, and possessed sufficient liquidity
+reserves, which have driven the cumulative positive liquidity exposure to further increase compared to the end of last year.
+Therefore, the overall liquidity of the Bank maintained at a safe level. The liquidity exposure analysis of the Bank as at the
+end of 2014 is shown in the table below:
+In 2014, the deposit and loan businesses of the Bank maintained coordinated development, and liquidity risk management
+ability was further strengthened. Relevant indicators reflecting the Bank's liquidity status all met the regulatory requirements.
+Specifically, the RMB liquidity ratio, foreign currency liquidity ratio, loan-to-deposit ratio and liquidity coverage ratio of the
+Bank were 33.2%, 91.1%, 68.4% and 142.4%, respectively. Please refer to "Discussion and Analysis - Other Information
+Disclosed Pursuant to Regulatory Requirements" for details.
+In respect of foreign currencies, the Bank closely observed the changes in market interest rates and funds, adjusted foreign
+currency liquidity management strategy and internal and external fund prices in a flexible manner and coordinated the
+balanced development of foreign currency assets and liabilities business while ensuring a safe liquidity level.
+The Bank paid close attention to the macro-control policy and the trend of market funds, and dynamically adjusted its
+liquidity management strategy and fund operation tempo, consolidated the foundation for deposit growth and strived to
+stabilize liability growth, in accordance with the Bank's assets and liabilities business development and liquidity status. It
+flexibly adjusted internal and external pricing strategies, further strengthened the management over matching degree of
+assets and liabilities, optimized term structure, focused on preventing long and medium-term liquidity risk and took various
+measures to properly perform daily liquidity management.
+Liquidity Risk Analysis
+Discussion and Analysis
+ICBC
+62
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress test on
+liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress tests on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress tests at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+◆ Stress Test
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+Liquidity Risk Management Mode
+.
+Formulated taking into account the liquidity risk appetite, the liquidity risk management strategy, policy and procedure cover
+all businesses on and off the balance sheet, all domestic and overseas business departments and branches that are likely to
+deliver a material impact on the liquidity risk, and contain the liquidity risk management under normal and stress scenarios.
+The liquidity risk management strategy specifies the overall objective and management mode of liquidity risk management
+and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk management are
+formulated in accordance with external and macro operating environments and business development of the Bank, with a
+view to striking an effective balance among security, liquidity and profitability.
+Objective of liquidity risk management: By establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity
+risk at the Group level, the Bank, the branches and the business lines, and ensuring the liquidity demand is satisfied at a
+reasonable cost in time under the normal business scenario and the stress scenario.
+Objective, Strategy and Important Policy of Liquidity Risk Management
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset & Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control & Compliance Department; and the execution system comprising the Asset & Liability
+Management Department, leading management departments of on and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs corresponding decision making, supervision and execution functions according to division of
+responsibilities.
+Liquidity Risk Management System and Governance Structure
+Credit risk
+Market risk
+Operational risk
+Interest rate risk is defined as the risk of loss in the overall gain and economic value of the banking book arising from
+adverse movements in interest rate and term structure, etc. Interest rate risks mainly include repricing risk, yield curve risk,
+benchmark rate risk and option risk, of which, repricing risk and benchmark rate risk are the Bank's primary interest rate
+risks.
+♦ Interest Rate Risk Management
+Market Risk Management of the Banking Book
+In order to take more effective market risk management measures and accurately measure regulatory capital arising from
+market risk, the Bank categorized all on- and off-balance sheet assets and liabilities into its trading book and banking book
+according to the nature and characteristics of different books. The trading book includes tradable financial instruments and
+commodity positions held by the Bank for the purposes of trading or hedging the risks of other items in the trading book,
+whereas all other positions are included in the banking book.
+Banking Book and Trading Book
+In 2014, the Bank continued to strengthen consolidated management of market risk and comprehensively enhanced
+the management and measurement of market risk at the Group's level. Besides, the Bank reinforced market risk limit
+management of the Group and accelerated overseas expansion of the global market risk management (GMRM) system. It
+also improved the automation level of market risk control measures and enhanced data quality management. In addition, the
+Bank optimized market risk measurement models and promoted the application of risk measurement results in management
+practices.
+The Bank strictly complies with the Guidelines on Market Risk Management of Commercial Banks issued by CBRC and other
+related regulatory requirements, implemented an independent, centralized and coordinated market risk management model
+under the leadership of the Board of Directors and the Senior Management, and formed a management organizational
+structure featuring the segregation of the front office, the middle office and the back office in the financial market
+business. The Board of Directors assumes the ultimate responsibility for the implementation and monitoring of market risk
+management. The Senior Management is responsible for executing the strategies, overall policy and system regarding market
+risk management approved by the Board of Directors. The Market Risk Management Committee of the Senior Management
+is the reviewing and decision-making organ of the Bank in respect of market risk management, and is responsible for
+reviewing important matters of market risk management, and performs its duty in accordance with the Working Regulations
+for the Market Risk Management Committee. The market risk management departments at different levels are responsible
+for coordinating the market risk management at respective levels, and the business departments play their roles in
+implementing market risk management policies and standards in respective business areas.
+The Bank's market risk management is the process of identifying, measuring, monitoring, controlling and reporting market
+risk for the purposes of setting up and enhancing the market risk management system, specifying responsibilities and
+process, determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, and stock price and commodity prices). The Bank is primarily exposed
+to interest rate risk and currency risk (including gold).
+Market Risk
+Discussion and Analysis
+◆ Currency Risk Analysis
+In 2014, Renminbi depreciated slightly with obvious two-way fluctuations, and exchange rate elasticity was significantly
+enhanced. The exchange rate of Renminbi against US dollar depreciated by 221 basis points from the end of the previous
+year. The Bank closely watched the changes in external market, actively took a combination of measures such as price
+leverage to adjust and optimize the aggregate amount and structure of foreign exchange assets and liabilities, and
+controlled the currency risk of the Bank while maintaining a coordinated development of foreign exchange deposit and loan
+businesses.
+FOREIGN EXCHANGE EXPOSURE
+In RMB (USD) millions
+For interest rate sensitivity analysis of the Bank, please refer to "Note 54. (c)(ii) to the Financial Statements: Interest Rate
+Risk".
+ICBC
+68
+As at the end of 2014, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 11.92%, 12.19% and 14.53%, respectively,
+complying with regulatory requirements. In 2014, the Bank's profits maintained continuous growth and effectively
+replenished the core tier 1 capital. The Bank proactively carried out external capital replenishments and effectively
+replenished the additional tier 1 capital and tier 2 capital. Meanwhile, the Bank further reinforced its capital constraint
+mechanism so that the growth rate of risk-weighted assets was controlled effectively and that the capital adequacy ratio
+remained at a moderate level. In addition, the adoption of advanced capital measurement approaches had a positive impact
+on the Bank's current capital adequacy ratio.
+13.25%
+10.86%
+13.31%
+10.62%
+11.82%
+14.35%
+11.49%
+14.29%
+Capital adequacy ratio
+Core capital adequacy ratio
+The Bank's interest rate risk management is aimed at maximizing the risk-adjusted net interest income within the tolerable
+level of interest rate risk under its risk management and risk appetite. The Bank adheres to the prudence principle in interest
+rate risk management of the banking book. The department in charge of interest rate risk management of the banking
+book and business departments jointly monitor and forecast interest rate trends and manage the interest rate risk based on
+monitoring results, so as to maximize the risk-adjusted income.
+related regulations:
+Annual Report 2014
+Discussion and Analysis
+1,091,981
+1,022,777
+Over 5 years
+1 to 5 years
+361,676
+473,593
+In RMB millions
+ICBC
+60
+755,071
+Note: Please refer to "Note 54.(c)(ii) to the Financial Statements: Interest Rate Risk".
+1 year
+1,147,908
+(1,047,439)
+(1,106,776)
+3 months
+3 months to
+Less than
+At 31 December 2013
+At 31 December 2014
+INTEREST RATE RISK EXPOSURE
+As at the end of 2014, the Bank had a cumulative interest rate sensitivity positive exposure within one year of RMB100,469
+million, representing an increase of RMB452,174 million, mainly because of the increase of loans repriced and matured
+within one year. Cumulative interest rate sensitivity positive exposure over one year stood at RMB1,384,453 million, a
+decrease of RMB181,121 million from the end of the previous year, mainly due to rise of customer deposits with the term of
+over one year. The structure of the Bank's interest rate risk exposure according to the contractual repricing date or maturity
+date (whichever is earlier) is shown in the following table:
+In 2014, PBC continued to advance the interest rate liberalization reform. As a result, interest rate controls on financial
+institutions were lifted in an orderly manner, the disciplined market interest rate pricing system was further improved
+and the interbank CDs issuance and trading was advanced steadily. In response to the new challenges of interest rate
+risk management, the Bank actively developed plans to promote the application of loan prime rate (LPR) and improve the
+accuracy of LPR-based quotation. It also bettered the differentiated pricing management of deposits and increased the
+pricing elasticity of deposit rate. Moreover, the Bank rationally controlled the high-cost medium and long-term interbank
+time deposits and negotiated deposits, striving to reduce the interest cost and effectively prevent the downward interest rate
+repricing risk.
+♦ Interest Rate Risk Analysis
+Market Risk Analysis
+The Bank continued to improve risk measurement and product control of the trading book by adopting multiple methods
+including Value at Risk (VAR), sensitivity analysis and exposure analysis to measure and manage products in the trading
+book. The Bank further also optimized the market risk limit management system based on trading portfolios, established
+and improved the three-tier limit approval mechanism consisting of the Board of Directors, the Market Risk Management
+Committee and business departments. In addition, it optimized limit setting in a scientific manner and realized quick and
+flexible limit monitoring and dynamic adjustment relying on the Global Market Risk Management system (GMRM).
+Market Risk Management of the Trading Book
+The Bank's objective of currency risk management is to control the impact of exchange rate fluctuations on the Bank's
+financial position and shareholders' equity within a tolerable extent. The Bank mitigates such risk principally by limit
+management and hedging of risks. The Bank carries out sensitivity analysis and stress testing of currency risk on a quarterly
+basis, and submits currency risk reports to the Senior Management and the Market Risk Management Committee.
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities.
+◆ Currency Risk Management
+In 2014, the Bank closely followed policy trends and market changes and actively responded to the challenges brought
+by interest rate liberalization. It propelled development of loan prime rate (LPR) system, put into operation the pricing and
+quotation management system for LPR and enhanced management and control over interest rate risk of market-based
+pricing loan products. Besides, the Bank strengthened control over interest rate risk limit of the banking book and guided
+branches to reasonably control the floating range of interest rates and optimize the interest rate structure. In addition, it
+intensified interest rate risk monitoring and analysis and improved interest rate risk management level.
+59
+USD
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and
+13.12%
+Parent
+Company
+At 31 December 2014
+Group
+Item
+At 31 December 2013
+In RMB millions, except for percentages
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+The table below sets out the capital adequacy ratios of the Bank at the end of 2014 calculated in accordance with the
+Capital Regulation and the Regulation Governing Capital Adequacy of Commercial Banks promulgated by CBRC.
+Discussion and Analysis
+67
+Annual Report 2014
+Basic indicator approach
+Standardized approach
+Standardized approach
+Standardized approach
+Weighted approach
+Internal model approach
+Weighted approach
+approach
+Foundation internal
+ratings-based approach
+Internal ratings-based
+internal model approach
+Parts uncovered by
+internal model approach
+Parts covered by
+internal ratings-based
+approach
+Parts uncovered by
+Retail risk exposure
+Corporate risk exposure
+Parts covered by
+internal ratings-based
+approach
+Group
+13.14%
+Parent
+Company
+Net core tier 1 capital
+14.70%
+14.53%
+Capital adequacy ratio
+10.58%
+10.57%
+12.35%
+12.19%
+Tier 1 capital adequacy ratio
+10.58%
+10.57%
+12.05%
+11.92%
+Core tier 1 capital adequacy ratio
+1,478,863
+1,572,265
+1,699,357
+1,812,137
+Net capital base
+1,190,490
+1,266,859
+1,427,548
+1,521,233
+Net tier 1 capital
+1,190,490
+1,266,841
+1,393,120
+1,486,733
+Calculated in accordance with the Capital Regulation:
+At 31 December 2013
+5,700
+CAPITAL ADEQUACY RATIO
+650,308
+512,024
+2,191
+1,956
+(24,839)
+(24,038)
+11,670
+9,503
+Goodwill
+202,940
+8,487
+Other intangible assets other than land use rights
+1,279
+1,474
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+(3,796)
+(3,920)
+Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+8,049
+221,622
+123,870
+150,752
+Discussion and Analysis
+In RMB millions, except for percentages
+At
+At
+Item
+Core tier 1 capital
+Paid-in capital
+Valid portion of capital reserve
+Surplus reserve
+General reserve
+Retained profits
+Valid portion of minority interests
+Others
+Core tier 1 capital deductions
+31 December 2014
+1,498,403
+31 December 2013
+1,276,344
+353,495
+351,390
+144,874
+108,202
+3,900
+Net core tier 1 capital
+1,486,733
+1,266,841
+reporting period
+Company
+(RMB yuan)
+(10,000 shares)
+(%)
+(RMB yuan)
+(RMB yuan)
+China UnionPay
+146,250,000
+11,250.00
+period (3)
+3.84
+5,062,500
+-
+Co., Ltd.
+Xiamen
+102,301,500
+20,043.00
+8.74
+102,301,500
+50,000,000
+International Bank
+146,250,000
+of the period
+percentage
+shares held
+Total
+35,403,162,680
+28,554,346,347
+2,494,025,158
+(123,694,558)
+Notes: (1) The table sets out shares held by the Group in other listed companies at the percentage of 1% or above included in the
+accounting of long-term equity investment and available-for-sale equity investment.
+74
+(2) The shares in CHINA TAIPING were held by ICBC (Asia), a subsidiary of the Bank; shares in Mingyang Wind Power and TRONY
+SOLAR were held by ICBC International, a subsidiary of the Bank; and shares in FSS, M-CHAI-CS and PPP-CS were held by ICBC
+(Thai), a subsidiary of the Bank.
+(3) Refers to dividend income, investment income of associates and impairment losses.
+ICBC
+SHARES IN UNLISTED FINANCIAL INSTITUTIONS
+Discussion and Analysis
+Change in
+Book value
+Gain/(loss)
+owner's equity
+Initial
+Number of
+Shareholding
+at the end
+during the
+during the
+investment cost
+(RMB yuan)
+Accounting item
+Available-for-sale
+financial assets
+Available-for-sale
+financial assets
+Refers to dividend income.
+PURCHASE AND SALE OF SHARES IN OTHER LISTED COMPANIES
+Shares held
+Shares
+bought/sold
+Shares held
+Stock name
+Buy
+Sell
+at the beginning
+of the period
+(Share)
+21,285,487
+during the
+reporting period
+(Share)
+5,645,952
+at the end
+of the period
+(Share)
+26,931,439
+41,266,772
+16,721,695
+24,545,077
+Capital utilized
+(RMB yuan)
+53,702,186
+Investment
+income
+generated
+(RMB yuan)
+153,203,507
+GLOBAL SYSTEMICALLY IMPORTANCE ASSESSMENT INDICATORS OF COMMERCIAL BANKS
+In RMB millions
+2013
+(3)
+Investment with
+self-owned capital
+Notes: (1) The table sets out shares held by the Group at the percentage of 1% and above in unlisted financial institutions.
+(2) The shares in Bangkok BTMU Ltd. were held by ICBC (Thai), a subsidiary of the Bank; and shares in Luen Fung Hang Insurance
+Co., Ltd. were held by ICBC (Macau), a subsidiary of the Bank.
+253,742,288
+Source of shares
+Investment with
+self-owned capital
+self-owned capital
+Investment with
+Bangkok BTMU Ltd.
+4,272,984
+20.00
+10.00
+3,843,734
+565,544
+Luen Fung Hang
+Insurance Co., Ltd.
+1,518,440
+2.40
+6.00
+1,347,054
+745,367
+Available-for-sale
+financial assets
+Available-for-sale
+Investment with
+self-owned capital
+financial assets
+Investment with
+self-owned capital
+Total
+254,342,924
+56,373,411
+Indicator
+financial assets
+Purchase from
+market
+SBK (South Africa)
+Standard Bank
+Initial
+investment cost
+(RMB yuan)
+34,713,171,914
+Shareholding
+Book value
+at the end
+Gain/(loss)
+during the
+Change in
+owner's equity
+percentage
+of the period
+Stock name
+reporting
+period (3)
+reporting period
+(%)
+(RMB yuan)
+(RMB yuan)
+20.08
+26,706,658,225
+2,054,018,274
+(RMB yuan)
+(1,256,880,651)
+Accounting item
+Source of shares
+during the
+Stock code
+SHARES IN OTHER LISTED COMPANIES
+Note: The stocks specified above are recognized as financial assets held for trading. The Bank held shares in AIA, China Construction Bank
+and Agricultural Bank of China through its subsidiary, ICBC (Asia).
+2,569,814
+50
+2,539,900
+1.3
+389,552
+(Hong Kong, China)
+3
+Stock
+1288
+ABC
+2,093,235
+72
+2,251,560
+1.2
+241,258
+(Hong Kong, China)
+Other securities investment held as at the end of the reporting period
+Gain/(loss) from sale of securities investment during the
+reporting period
+Total
+97,220,034
+190,475,367
+100.0
+24,315,884
+002013
+Group
+AVIC
+216,468,939
+6.70
+44,091,269
+Power
+M-CHAI-CS
+M-CHAI-CS
+4,963,064
+4.87
+26,377,030
+568,686
+(Thailand)
+PPP-CS (Thailand)
+PPP-CS
+745,862
+1.32
+4,487,424
+37,395
+2468 (Hong Kong,
+China)
+TRONY SOLAR
+168,439,670
+11.88
+(65,660)
+(5,460,074) Available-for-sale
+financial assets
+8,158,086 Available-for-sale
+financial assets
+1,115,522 Available-for-sale
+financial assets
+Available-for-sale
+Investment with
+self-owned capital
+2.68
+Debt-equity swap
+101,315,110
+MY (U.S.)
+1,197,911,870
+431,993,619
+Electromechanical
+Long-term equity
+investment
+981,442,932 Available-for-sale
+financial assets
+Investment with
+self-owned capital
+Debt-equity swap
+966 (Hong Kong,
+China)
+CHINA TAIPING
+132,306,737
+1.58
+478,283,571
+147,929,627 Available-for-sale
+financial assets
+Purchase from
+market
+FSS (Thailand)
+FSS
+65,751,384
+23.56
+96,536,958
+7,472,844
+Long-term equity
+investment
+Investment with
+self-owned capital
+Mingyang Wind
+2014
+Balance of adjusted on- and off-balance sheet assets
+23,409,777
+of China, Ltd. Traditional
+_
+Other
+domestic
+- Ordinary insurance products
+entities
+A shares
+1.27
+4,503,771,410
+None
+ICBC Credit Suisse Asset
+Ping An Life Insurance Company
+Management Co., Ltd.
+Other
+domestic
+specific customers
+entities
+A shares
+0.30
+1,053,190,083
+None
+China Life Insurance Company
+Limited Traditional
+Other
+- Asset management for
+Unknown
+None
+None
+(%)
+Huijin
+State-owned A shares
+35.12
+Total number of
+shares held
+124,155,852,951
+MOF
+State-owned A shares
+34.88
+123,316,451,864
+Hong Kong Securities Clearing
+Company Limited/
+A shares
+0.18
+625,028,761
+Foreign
+legal person
+HKSCC Nominees Limited
+H shares
+24.33
+86,021,039,918
+Number of
+shares subject
+to restrictions
+Number of
+pledged or
+locked-up
+on sales
+shares
+None
+- Ordinary insurance products
+―005L CT001 Hu
+domestic
+entities
+A shares
+entities
+A shares
+0.06
+196,865,702
+None
+China Foreign Economy and
+Trade Trust Co., Ltd.
+- Yun Feng Securities
+Investment Collective Fund
+Trust Plan
+Other
+domestic
+entities
+A shares
+0.05
+188,007,006
+None
+Notes: (1) Particulars of shareholding of H shareholders were based on the number of shares set out in the Bank's register of shareholders
+maintained at the H share registrar.
+78
+(2)
+The Bank is not aware of any connected relations or concert party action among the afore-mentioned shareholders.
+(3)
+Hong Kong Securities Clearing Company Limited held 625,028,761 A shares and HKSCC Nominees Limited held 86,021,039,918
+H shares.
+ICBC
+Additional tier 1 capital
+Co., Ltd.
+shares
+domestic
+Other
+0.09
+317,038,827
+None
+TEMASEK FULLERTON
+Foreign
+ALPHA PTE LTD
+legal person
+A shares
+0.07
+255,422,003
+None
+China Securities Finance
+Other
+Co., Ltd.
+domestic
+entities
+A shares
+0.06
+203,612,909
+None
+Guarantee securities accounts for
+customer unsecured
+transactions of Guotai Junan
+Investment Management
+Shareholding
+percentage
+Nature of Type of
+shareholder
+Name of shareholder
+144,819
+915,598
+841,895
+1,155,853
+1,046,604
+Annual Report 2014
+75
+Social Responsibility
+Taking "providing outstanding financial services excellent services to customers, maximum returns to shareholders,
+real success for our people and great contribution to society" as its mission, the Bank has been dedicated to meeting the
+general appeal of economic and social development and serving the overall economic growth and social progress in a
+sustainable way. The Bank gained extensive social recognition by its good performance in social responsibility fulfillment,
+and successively won various awards, including "Best Social Responsibility Financial Institution Award", "Most Respectable
+Enterprise in China" and "Most Responsible Enterprise".
+4
+4
+4
+The Bank was dedicated to meeting the essential requirement that finance shall serve the real economy. It has
+substantially fulfilled the obligations of a large bank by assuring credit directions, strictly controlling asset quality,
+accelerating financial innovation and improving service efficiency. It made great efforts to support the development of
+real economy, promote industry structural adjustment, drive regional structural balance, intensify support for small and
+micro enterprises and "Sannong" (agriculture, farmers and rural areas), and improve people's livelihood.
++
+The Bank improved counter-based service and elevated outlet service efficiency by the campaign themed "Year of
+Development of Satisfactory Bank". It also kept innovating in form and content of financial services and improving
+business process and management mechanisms. Besides, the Bank has actively improved its overseas strategic layout
+to raise its global financial service ability and competitiveness. The Bank was ranked the global largest corporation by
+Forbes, the largest bank in terms of tier 1 capital and total assets by The Banker and the 1st place among commercial
+banks in terms of revenue by Fortune for the second year in a row.
+Strictly adhering to the guideline of green finance and the principle of controllable risk and sustainable business, the
+Bank actively promoted green, recyclable and low-carbon development and green credit and enhanced support to the
+green economy sectors such as energy saving and environment protection. It continued to speed up the innovation of
+online banking, mobile banking and telephone banking products and services, and spared no efforts to build a green
+and convenient mobile Internet-based financial ecosphere. It also kept advancing IT-based banking development,
+innovating in the emission reduction mode and beautifying our homeland with practical actions.
+The Bank made active efforts to build a long-acting and normalized mechanism to protect customers' rights and
+interests from such aspects as financial knowledge publicity, service pricing management and customer complaint
+coordination. In the year, the Bank organized over 66,000 financial knowledge popularizing and publicity activities
+with over 480,000 employees participated. The Bank adhered to legal compliance, enhanced internal self-discipline
+and actively participated in establishing and improving the social credit system where good credit behaviors are
+rewarded and poor ones are disincentivised, in a bid to raise the public responsibility awareness of money laundering
+crimes and create a healthy financial ecosphere.
+Adhering to the "people-oriented" concept, the Bank effectively protected the legitimate rights and interests
+of employees, improved their career development path and strived to build a harmonious employer-employee
+relationship, so that employees and the Bank could grow together. The Bank also proactively promoted a commitment
+performance culture with intensive involvement of employees, to achieve beneficial interaction between personal
+competence improvement and business performance enhancement. It attached great importance to employees' health
+and safety.
+The Bank closely connected its sustainable development with the fulfillment of social responsibility and devotion to
+public welfare and charity. It was committed to developing ICBC into a brand that is known for its caring about society
+by involving in disaster relief, poverty alleviation, environmental protection, volunteer services and other public welfare
+efforts, as well as creating a corporate culture that attaches great importance to public welfare. The Bank actively
+participated in disaster relief and donated RMB5.00 million to the earthquake-stricken Ludian County. It also created
+a green financial service channel to ensure efficient operation of the fund transfer and settlement system, to meet
+the financial service demand of post-disaster reconstruction. It input poverty alleviation fund over RMB11.00 million
+to build new dormitory buildings, reward excellent village teachers, support outstanding college students from low-
+income families and develop infrastructure construction projects in local education and health care sectors, which gave
+strong support to economic growth and farmers' income increase in designated poverty alleviation areas. In addition,
+the Bank organized a series themed of public welfare activities including "Pursuit of Dreams - Schoolbag Donation
+Program for the Blind".
+For more details on the Bank's social responsibilities, please refer to the 2014 Social Responsibility Report of Industrial and
+Commercial Bank of China Limited published on its official website.
+76
+ICBC
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+155,102
+Changes in Ordinary Shares
+92,585
+2,198,301
+21,475,566
+Intra-financial system assets
+2,191,729
+2,113,543
+Intra-financial system liabilities
+1,630,141
+1,314,192
+Securities and other financing instruments issued
+1,937,790
+1,557,845
+Payments settled via payment systems or correspondent banks
+287,748,223
+220,468,189
+Assets under custody
+Underwritten transactions in debt and equity markets
+5,828,863
+512,679
+4,621,301
+329,523
+Notional amount of over-the-counter (OTC) derivatives
+Trading and available-for-sale securities
+Level 3 assets
+Cross-jurisdictional claims
+Cross-jurisdictional liabilities
+2,529,568
+625,941
+CCB
+DETAILS OF CHANGES IN SHARE CAPITAL
+Number of
+shares
+86,794,044,550
+24.55
+overseas
+וודי
+Total number of shares
+351,388,672,946
+100.00
+2,105,540,874
+353,494,213,820
+100.00
+Note: "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the Content
+and Format of Information Disclosure of Companies with Public Offerings - Content and Format of the Report of Change in
+Corporate Shareholding" (Revision 2007) of CSRC.
+Details of Securities Issuance and Listing
+The Bank conducted no rights issue nor issued convertible bonds in the three years prior to the end of the reporting period.
+For details on the issuance of preference shares of the Bank, please refer to "Details of Changes in Share Capital and
+Shareholding of Substantial Shareholders - Particulars of Preference Shares".
+Upon the approval of CBRC and PBC, the Bank issued tier 2 capital bonds worth of RMB20.0 billion in national interbank
+bond market in August 2014 to replenish its tier 2 capital. Such tier 2 capital bonds were 10-year bonds at a fixed coupon
+rate of 5.8%, with the issuer's right of redemption exercisable at the end of the fifth year. For information on the tier 2
+capital bonds and other bonds issued by the Bank and its subsidiaries, please refer to "Note 38 to the Financial Statements:
+Debt Securities Issued" for details.
+The Bank did not have any employee shares.
+Annual Report 2014
+77
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Particulars of Shareholders
+Number of Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had a total number of 827,567 ordinary shareholders and no preference
+shareholders with their voting rights resumed, including 143,131 holders of H shares and 684,436 holders of A shares. As at
+the end of the fifth trading day (19 March 2015) before the release day of the Annual Report, the Bank had a total number
+of 854,445 ordinary shareholders and no preference shareholders with voting rights restored.
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK (The following data are
+based on the register of shareholders as at 31 December 2014)
+Unit: Share
+24.70
+At 31 December 2013
+86,794,044,550
+ordinary shares
+Percentage
+(%)
+Increase/decrease
+during the
+reporting period (+, -)
+Unit: Share
+At 31 December 2014
+Number of
+shares
+Percentage
+(%)
+I.
+Shares subject to
+restrictions on sales
+II.
+Shares not subject to
+351,388,672,946
+100.00
+2,105,540,874
+353,494,213,820
+100.00
+restrictions on sales
+1.
+RMB-denominated
+264,594,628,396
+75.30
+2,105,540,874
+266,700,169,270
+75.45
+2. Foreign shares listed
+939
+Conversion of
+convertible bonds
+Notes: (1) The regulatory indicators of the current period in the table are calculated in accordance with related regulatory requirements,
+definitions and accounting standards applicable to the current period. The comparative figures are not adjusted and restated.
+AIA
+92,556,985
+540
+185,683,907
+97.5
+23,685,074
+(Hong Kong, China)
+2
+Stock
+Note: Calculated based on relevant provisions in the Administrative Measures for Leverage Ratio of Commercial Banks promulgated by CBRC
+in 2011.
+5.90%
+6.50%
+21,475,566
+23,409,777
+2,557,075
+2,824,092
+18,927,994
+20,597,355
+1,266,859
+1,521,233
+9,503
+11,670
+31 December 2013
+1,276,362
+1,532,903
+31 December 2014
+1299
+Stock
+1
+(RMB yuan)
+(40,801)
+(7,684)
+Annual Report 2014
+73
+Discussion and Analysis
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and those under IFRSS
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2014 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+Shares in Other Listed Companies and Financial Enterprises Held by the Bank
+SECURITIES INVESTMENT
+Initial
+Number of
+shares held
+Book value
+At
+at the end
+Stock code
+Stock name
+investment cost
+(RMB yuan)
+(10,000
+of the period
+of the period
+Percentage
+of total
+securities
+investment
+at the end
+Gain/(loss)
+during the
+period
+shares)
+(RMB yuan)
+(%)
+S/N Туре
+At
+Balance of adjusted on- and off-balance sheet assets
+Leverage ratio
+Balance of adjusted off-balance sheet items
+Risk-weighted assets (2)
+Net capital base
+financial institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital instruments issued by
+19,400
+15,800
+Tier 2 capital deductions
+72
+242
+Valid portion of minority interests
+134,857
+118,633
+Core tier 1 capital adequacy ratio
+Surplus provision for loan impairment
+187,829
+Valid portion of tier 2 capital instruments and related premium
+324,806
+306,704
+Tier 2 capital
+1,266,859
+1,521,233
+Net tier 1 capital
+18
+72
+Valid portion of minority interests
+18
+189,877
+(613,576)
+Tier 1 capital adequacy ratio
+15,800
+Balance of adjusted on-balance sheet assets
+Net tier 1 capital
+Deductions of tier 1 capital
+Tier 1 capital
+Item
+In RMB millions, except for percentages
+LEVERAGE RATIO
+Discussion and Analysis
+69
+Annual Report 2014
+Please refer to the 2014 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement of the Bank.
+As at the end of 2014, this refers to risk-weighted assets after capital floor and adjustments.
+Capital adequacy ratio
+(2)
+Notes: (1)
+13.12%
+14.53%
+10.57%
+12.19%
+10.57%
+11.92%
+11,982,187
+12,475,939
+1,572,265
+1,812,137
+19,400
+Please refer to "Note 54. (d) to the Financial Statements: Capital management".
+34,500
+34,428
+(572,775)
+(5,041)
+33.2
+30.2
+32.5
+Foreign currency
+>=25.0
+91.1
+61.0
+65.2
+Loan-to-deposit ratio (%)
+RMB and foreign
+<=75.0
+68.4
+66.6
+64.1
+Liquidity coverage ratio (%)
+Percentage of loans to single largest
+customer (%)
+Percentage of loans to top 10
+currency
+RMB and foreign
+>=100.0(2)
+142.4
+currency
+<=10.0
+4.8
+4.2
+>=25.0
+RMB
+Liquidity ratio (%)
+2012
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc. The Bank intensified the adjustment of the aggregate amount
+and structure of risk-weighted assets through its economic capital management, further raising the level of resource
+allocation efficiency and return on capital.
+In 2014, the Bank further improved its economic capital management in terms of measurement, allocation and assessment,
+intensified the capital constraint mechanism, and strictly implemented the measures for quota management to enhance the
+capital management efficiency and vigorously pushed forward operational management and business front-line application
+of economic capital. The Bank constantly carried through the optimization of economic capital, collated and analyzed the
+economic capital occupation status in all products, prepared the schemes for optimization and enhancement, promoted
+and explored the capital-intensive development mode. The Bank further improved its economic capital measurement policy
+and optimized its economic capital measurement standards and system. Moreover, the Bank upgraded the economic capital
+measurement and appraisal policy of credit business and proactively facilitated the bank-wide credit structure adjustment.
+70
+ICBC
+OUTLOOK
+Discussion and Analysis
+At present, the global economy is still undergoing profound post-crisis adjustment while the Chinese economy enters into a
+new normal featuring "medium-high-level growth rate, structure optimization, new driving forces and various challenges".
+Meanwhile, the financial regulatory environment and market operational mechanism are also undergoing profound changes,
+bringing a slew of new opportunities and challenges to business development of the Bank.
+Major opportunities faced by the Bank are listed as follows. First, as the Chinese economy is of strong resilience, great
+potential and has plentiful room for maneuvering, the simultaneous acceleration of economic growth model transformation
+and structural adjustment have created a stable and healthy environment for business development of the Bank in general.
+Second, with the advance of "New Four Modernizations" and implementation of the strategy of developing the "Three
+Supporting Belts" comprising "One Belt And One Road", the synchronizing development of Beijing-Tianjin-Hebei region,
+and the Yangtze River Economic Belt, the Bank is offered new opportunities and broad room for transformation and
+development. Third, the booming Internet technology and extensive application of big data technology have offered good
+opportunities for the Bank to propel fundamental reform on operation and management models and service methods.
+Fourth, new favorable conditions for the Bank's internationalized development and integrated operation will be created by
+the nation's new round of high-quality opening-up and comprehensive deepening of financial reforms in key sectors.
+Major challenges faced by the Bank include: First, in the process of de-capacity, de-stocking and de-leverage of the real
+economy, enterprises in some industries are under mounting pressure to maintain stable credit asset quality. At the same
+time, various risks in domestic and overseas operations as well as on- and off-balance sheet operations interact and change,
+and emerge frequently in many fields, which raises higher requirements on the Bank's comprehensive risk prevention and
+control ability. Second, a series of macro-prudential regulatory rules under the framework of Basel III have been gradually
+carried out, resulting in stricter regulatory requirements on banks regarding capital, liquidity and leverage ratio, which
+necessitates further adjustment and transformation of the business structure and model. Third, market pricing ability and
+profit growth of banks are challenged by the accelerated reform of interest rate liberalization. Fourth, multi-tier capital
+market is growing rapidly and Internet banking springs up, which bring fiercer competition to banks.
+2014 was the year of completing the first ten-year development outline and the third three-year development planning of
+the Bank after its shareholding reform. Major operating indicators were fully completed, indicating a new step in business
+development of the Bank. 2015 is a critical year for the Bank's transformation and development, and is also the starting year
+of the new round of ten-year development outline and three-year development planning. The Bank will proactively adapt
+to the economic new normal, seize opportunities and rise up to challenges, striving to increase quality and efficiency and
+maintain healthy and stable growth in the new economic and market environment.
+Serve the real economy and optimize credit business layout. The Bank will closely track financial needs under the
+new normal, innovate in and improve credit management and make full use of existing and new credit facilities in a
+coordinated manner, in a bid to raise the efficiency in allocating credit resources and the effectiveness in serving the
+real economy. By seizing the new opportunities emerging during the implementation of national strategies and plans,
+the Bank will actively support the development of the "Three Supporting Belts" as well as modern service industry,
+advanced manufacturing, cultural industry and strategic emerging industries that conform to the national industrial
+structure adjustment direction. In addition, the Bank will actively explore and improve the small and micro financial
+service model and innovatively expand personal credit business to support the development of small and micro
+economies.
+Firmly promote business transformation and innovative development. The Bank will put equal emphasis on the
+transformation and upgrading of traditional businesses and the rapid growth of emerging businesses, actively cultivate
+new profit growth points and build retail finance, asset management and other operations into important driving
+forces of business transformation and upgrading. It will promote in-depth internationalized operation standard and
+strive to improve overseas institutions' local operation ability and profit contribution to the Group. Furthermore, the
+Bank will step up developing Internet-based finance and establishing an Internet-based finance system featuring
+numerous and high-quality products, active customer transactions, online and offline interaction and comprehensive
+service operation.
+Annual Report 2014
+4.0
+71
+Deepen reform on key sectors and links. The Bank will continuously enhance the customer service system and
+vigorously raise customer service quality. It will reform the capital management mechanism and urge institutions at all
+levels to strengthen self-restraint on capital and increase the capital allocation efficiency and the return level by placing
+more direct and efficient pressure. Besides, the Bank will improve financial resource allocation mechanism and further
+motivate the value creation of business entities, on the basis of strengthening cost control and expense management.
+Properly manage risks. The Bank will keep strengthening and improving credit management through aspects like
+improving the credit system, optimizing the credit process and implementing accountability mechanism. It will give full
+play to the role of big data analysis in risk alert, thus realizing whole-process sophisticated monitoring on risk profile
+across the Group. It will also understand the cross-market, cross-industry and cross-region risks in the new situation
+and improve the enterprise risk management system adaptable to internationalized and integrated development.
+Based on the macroeconomic requirements and its own operation and development strategies, the Bank expects to increase
+its total assets and total liabilities by RMB1.3 trillion and RMB1.1 trillion respectively in 2015 and control its NPL ratio at the
+end of the year within 1.45%.
+◇
+72
+ICBC
+Discussion and Analysis
+OTHER INFORMATION DISCLOSED PURSUANT TO
+REGULATORY REQUIREMENTS
+Major Regulatory Indicators
+Regulatory
+Item
+criteria
+2014
+2013
+Discussion and Analysis
+14.9
+16.2
+17.9
+Balance
+at the end
+of the
+year
+346,828
+1,187,495
+Changes in
+current year
+Effects
+on profit
+for the
+year
+(25,728)
+3,208
+187,496
+(163)
+25,020
+24,048
+(972)
+(969)
+Total financial assets
+999,999
+1,397,575
+160,796
+2,076
+Financial liabilities at fair value through
+profit or loss
+(553,607)
+(589,385)
+(35,778)
+(2,643)
+Derivative financial liabilities
+(19,168)
+(24,191)
+(5,023)
+1,558,371
+Total financial liabilities
+372,556
+Derivative financial assets
+customers (%)
+Loan migration ratio (%)
+Pass
+Special mention
+Substandard
+Doubtful
+2.7
+1.7
+1.9
+17.2
+9.7
+4.1
+37.4
+Balance
+at the
+beginning
+of the year
+43.9
+28.1
+5.2
+9.5
+4.4
+Capital Financing Management
+(2) Pursuant to the Administrative Measures for Liquidity Risk Management of Commercial Banks (Provisional), the liquidity coverage
+ratio of commercial banks shall reach 100% by the end of 2018. During the transitional period, such ratio shall reach 60%, 70%,
+80% and 90% by the end of 2014, 2015, 2016 and 2017, respectively.
+Financial Instruments Measured at Fair Value
+MOVEMENT OF FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE
+In RMB millions
+Available-for-sale financial assets
+Item
+Financial assets at fair value through profit or loss
+The Bank proactively carried out external capital replenishment and constantly promoted the issuance of new capital
+instruments on the basis of achieving capital replenishment by retained profits. Pursuant to the issuance plans on eligible
+tier 2 capital instruments and preference shares as reviewed and approved by the Board of Directors of the Bank, the Bank
+issued tier 2 capital bonds worth of RMB20.0 billion in the national interbank bond market in August 2014 to replenish
+its tier 2 capital. In December 2014, the Bank privately offered non-cumulative, non-participating and perpetual offshore
+preference shares in U.S. dollar, Euro and Renminbi, raising total funds of around RMB34.55 billion. All of these funds (net
+of costs of issuance) were used to replenish additional tier 1 capital. As a result of the issuance of preference shares and tier
+2 capital instruments, the Bank further strengthened its capital strength and ability to support the real economy, optimized
+its capital structure and raised its risk resistance capability. For details on the issuance of tier 2 capital bonds and offshore
+preference shares, please refer to the announcements published by the Bank on the websites of SEHK and SSE.
+Allocation and Management of Economic Capital
+For details of relevant fundraising activities, please refer to "Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders - Details of Securities Issuance and Listing".
+Additional tier 1 capital instruments and related premium
+9,540,438,314
+Upon the approval granted by CBRC in the Yin Jian Fu [2014] No. 801 Document and by CSRC in the Zheng Jian Xu Ke
+[2014] No. 1229 Document in November 2014, the Bank privately offered non-cumulative, non-participating and perpetual
+offshore preference shares in U.S. dollar, Euro and Renminbi on 10 December 2014 (The table below shows the details). The
+offshore preference shares issued by the Bank were listed on SEHK on 11 December 2014.
+To ensure the continuous business development of the Bank and further enhance its comprehensive competitiveness and
+risk resistance capability, the Bank proposed to issue preference shares in domestic and offshore markets so as to replenish
+additional tier 1 capital. The Meeting of the Board of Directors and the Second Extraordinary General Meeting of 2014
+considered and approved the Proposal on General Authorization to Share Issue of Industrial and Commercial Bank of China
+Limited, the Proposal in Respect of Issuance of Offshore Preference Shares by Industrial and Commercial Bank of China
+Limited and the Proposal in Respect of Issuance of Domestic Preference Shares by Industrial and Commercial Bank of China
+Limited on 25 July and 19 September 2014 respectively, approving the Bank to issue preference shares within and outside
+the People's Republic of China with an aggregate amount of private offering not more than RMB80.0 billion based on
+general authorization as well as relevant authorization for the issuance of preference shares. In particular, the Bank was
+to issue preference shares of not more than RMB35.0 billion or its equivalent in the offshore market and not more than
+RMB45.0 billion or its equivalent in the domestic market.
+◆ Issuance and Listing of Preference Shares in Latest Three Years
+Preference Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+82
+China Chengxin Securities Appraisal Co., Ltd. traced and analyzed the credit standing of the ICBC Convertible Bonds
+and issued a credit rating report (Xin Ping Wei Han Zi [2014] Gen Zong No. 074). The Bank was rated AAA with a stable
+prospect, and the credit rating for the convertible bonds as at the end of the reporting period was AAA.
+◆ Credit Rating of Convertible Bonds
+2012 profit distribution, RMB2.39 per ten shares (pre-tax)
+2013 profit distribution, RMB2.617 per ten shares (pre-tax)
+3.97
+2010 profit distribution, RMB1.84 per ten shares (pre-tax)
+3.77 2011 profit distribution, RMB2.03 per ten shares (pre-tax)
+3.53
+3.27
+Unit: RMB yuan/share
+H share rights issue
+A share rights issue
+4.16
+4.15
+Details
+Conversion price
+after adjustment
+20 June 2014
+Type of
+preference share
+Dividend
+Stock code
+rate
+6%
+84602
+shares
+RMB preference
+40,000,000
+147,000,000
+USD20
+EUR15
+USD2,940,000,000
+EUR600,000,000
+26 June 2013
+6%
+EUR preference shares
+6%
+4603
+shares
+USD preference
+Number of
+issued shares
+Full amount of
+raised fund
+per share
+Total amount
+4604
+14 June 2012
+15 June 2011
+27 December 2010
+Sunshine Life Insurance Co., Ltd. - Participating insurance products
+MERRILL LYNCH INTERNATIONAL
+Manulife Teda Efficient Optimal Hybrid Securities Investment Fund
+ICBC Credit Suisse Asset Management Co., Ltd.
+E Fund Management (HK) Co., Limited - Customer Funds (Exchange)
+Dacheng Value Growth Securities Investment Fund
+Shanghai Baoyin Chuangyin Hedge Fund with Most Buffett Potential Issue 3
+Guotai Junan Investment Management Co., Ltd.
+Happy Life Insurance Co., Ltd - - Participating
+315,158,000
+Unit: RMB yuan
+Shanghai Baoyin Chuangyin Investment Management Co., Ltd.
+Name of bond holder
+PARTICULARS OF HOLDING OF THE TOP 10 HOLDERS OF THE A SHARE CONVERTIBLE BONDS
+Particulars of A Share Convertible Bonds
+0.00
+0.01
+Short
+position
+Nominal
+value of
+bonds held
+809,411,000
+Bosera Value Growth Securities Investment Fund
+302,053,000
+256,794,000
+26 November 2010
+Date of adjustment
+On 31 August 2010, the Bank issued A share convertible bonds with an aggregate nominal value of RMB25.0 billion and
+an initial conversion price of RMB4.20 per share. The conversion price at the end of the reporting period was RMB3.27 per
+share. The table below shows the details of adjustment:
+Adjustment of Conversion Price of Convertible Bonds
+The Bank had no guarantor of convertible bonds.
+◆ Particulars of Guarantors of Convertible Bonds
+Given that the closing price of A shares of the Bank from 19 November 2014 to 30 December 2014 is not less than 130%
+(i.e., RMB4.25 per share) of the prevailing conversion price of the ICBC Convertible Bonds (RMB3.27 per share) for 15
+trading days out of 30 consecutive trading days, the redemption clause of convertible bonds was triggered. The Board
+of Directors of the Bank resolved to exercise the right of early redemption of the ICBC Convertible Bonds to redeem all
+outstanding ICBC Convertible Bonds which appeared on the register on the redemption record date. The abovementioned
+redemption record date was 12 February 2015. As at 12 February 2015, a total amount of RMB24,985,764,000 ICBC
+Convertible Bonds were converted into A shares of the Bank, and unconverted ICBC Convertible Bonds of RMB14,236,000
+were redeemed by the Bank. The redemption payment date was 26 February 2015 and the delisting date of ICBC
+Convertible Bonds was 26 February 2015. For the redemption results, payment and delisting details, please refer to the
+Announcement on Results of Redemption and Delisting of ICBC Convertible Bonds issued by the Bank on 16 February 2015.
+The conversion period of ICBC Convertible Bonds started on 1 March 2011. As at 31 December 2014, a total of
+RMB15,463,371,000 ICBC Convertible Bonds were converted into A shares of the Bank, and the total number of converted
+shares reached 4,475,667,993. As at the end of the reporting period, an amount of RMB9,536,629,000 of ICBC Convertible
+Bonds remains outstanding, representing 38.15% of the total value of the issued ICBC Convertible Bonds.
+◆ Conversion and Redemption of Convertible Bonds
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+81
+Annual Report 2014
+Note: Pursuant to the Notice on Participation of Convertible Corporate Bonds in Collateralized Bond Repurchase Business and relevant rules
+of SSE, convertible bonds of the Bank have participated in collateralized bond repurchase since 21 May 2012. The Bank consolidated
+and summed up relevant data according to the register of holders of A share convertible bonds at the end of the reporting period
+provided by China Securities Depository and Clearing Corporation Limited and the information on holders of specific accounts for
+collateralized bond repurchase of settlement participants.
+165,000,000
+166,161,000
+167,574,000
+203,330,000
+205,190,000
+255,774,000
+RMB12,000,000,000
+RMB100
+120,000,000
+Each offshore preference share had a par value of RMB100. The USD preference shares, EUR preference shares and RMB
+preference shares were fully paid and issued in U.S. dollar, Euro and Renminbi.
+Tenure
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+ICBC
+84
+According to the Rules for Distinguishing Financial Liabilities and Equity Instruments and Relevant Accounting Treatment (Cai
+Kuai [2014] No. 13) promulgated by MOF as well as other accounting standards and main issuance clauses of the offshore
+preference shares, issued and existing preference shares of the Bank excluded contractual obligations of delivering cash
+or other financial assets and contractual obligations of settlement by delivering variable equity instruments, and shall be
+calculated as other equity instruments.
+◆ Accounting Policy Adopted for Preference Shares and Grounds
+During the reporting period, the Bank did not restore any voting right of preference share.
+Name
+◆ Restoration of Voting Rights of Preference Shares
+◆ Redemption or Conversion of Preference Shares
+During the reporting period, the Bank did not distribute any preference share dividend.
+◆ Profit Distribution of Preference Shares
+(2) As the issuance was private offering, the register of preference shareholders presented the information on proxies of placees.
+(3) The Bank is not aware of any connected relations or concert party action among the afore-mentioned preference shareholders.
+Notes: (1) Particulars of shareholding of preference shareholders were based on the number of shares set out in the Bank's register of
+preference shareholders maintained.
+None
+None
+None
+During the reporting period, the Bank did not redeem or convert any preference share.
+shares
+Position
+Age
+Female
+Non-executive Director
+Wang Xiaoya
+June 2014-June 2017
+60
+Male
+Chairman of the Board of Supervisors
+Zhao Lin
+Gender
+July 2013-July 2016
+Male
+Vice Chairman, Executive Director,
+President
+Yi Huiman
+January 2015 January 2018
+61
+Male
+Chairman of the Board of Directors,
+Executive Director
+Jiang Jianqing
+50
+or locked-up
+Number
+of pledged
+unit: Share
+Foreign
+legal person
+The Bank of New York
+Depository (Nominees)
+Limited
+legal person
+Foreign
+Cede & Co.
+shareholder
+Name of shareholder
+Nature of
+Type of shares
+USD
+preference shares
+RMB
+preference shares
+Shareholding
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE BANK (The
+following data are based on the register of shareholders as at 31 December 2014)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+83
+Annual Report 2014
+As at the end of the reporting period, the Bank had two preference shareholders (or proxies). As at the end of the fifth
+trading day (19 March 2015) before the publication date of the Annual Report, the Bank had two preference shareholders
+(or proxies).
+Changes in Preference Shares
+In accordance with the middle rate of RMB exchange rate on 10 December 2014 published by China Foreign Exchange Trade
+System, total funds raised from the issuance of offshore preference shares amounted to about RMB34.55 billion. After the
+deduction of commissions and issuance fees, net funds raised therefrom reached around RMB34.43 billion. All funds raised
+therefrom net of cost of issuance fees would be used to replenish additional tier 1 capital and increase capital adequacy
+ratio.
+The offshore preference shares had no maturity. They had no less than 6 qualified placees. They were offered to professional
+investors only rather than retail investors and transferred privately in the OTC market only.
+Increase/decrease
+during the
+reporting period
+percentage
+Total number
+on sales
+restrictions
+subject to
+Number
+of shares
+Limited
+40,000,000
+13.0
+40,000,000
+EUR
+preference shares
+Foreign
+legal person
+Depository (Nominees)
+The Bank of New York
+120,000,000
+39.1
+120,000,000
+of shares held
+147,000,000
+47.9
+147,000,000
+(%)
+12,070,000
+Long
+position
+6.04
+100.00
+17
+Jiantou CITIC Asset Management Co., Ltd.
+70.00
+10.99
+Guotai Junan Investment Management Co., Ltd.
+14.54
+Notes: (1)
+China Investment Securities Co., Ltd.
+(2)
+On 26 January 2015, Shenwan Hongyuan Group Co., Ltd. which was formed as a result of the merger between Shenyin &
+Wanguo Securities Co., Ltd. and Hongyuan Securities Co., Ltd. was listed on the Shenzhen Stock Exchange. Huijin held 25.03%
+shares of Shenwan Hongyuan Group Co., Ltd., and China Jianyin Investment Limited held 32.89% shares of Shenwan Hongyuan
+Group Co., Ltd.
+(3) A represents A share listed company, while H represents H share listed company.
+1
+The operating results, financial position and cash flows of Huijin in 2014 shall be determined after the financial statements of all
+institutions controlled or held by Huijin have been audited.
+Annual Report 2014
+79
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 34.88% shares of the Bank as at 31
+December 2014. MOF is a constituent part of the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the financial and taxation policies, and supervising State finance at a macro level.
+On 8 December 2014, China Everbright Group was restructured into China Everbright Group Ltd., 55.67% shares of which was
+held by Huijin. Huijin contributed to China Everbright Group Ltd. by its holding of RMB9.0 billion shares of China Everbright
+Bank Company Limited and 100% equity of China Everbright Industry Group Limited. The transfer procedures for relevant shares
+(equity) are currently in progress.
+◆ Particulars of other Corporate Shareholders Holding 10% Shares or More (excluding HKSCC Nominees
+Limited)
+16
+China Securities Co., Ltd.
+China Reinsurance (Group) Corporation
+84.91
+10
+New China Life Insurance Company Limited (A; H)
+31.34
+11
+China Jianyin Investment Limited
+100.00
+40.00
+12
+78.57
+13
+Shenyin & Wanguo Securities Co., Ltd. (2)
+55.38
+14
+China International Capital Corporation Limited
+43.35
+15
+China Galaxy Financial Holdings Company Limited
+None.
+◆ Particulars of the De Facto Controller
+None.
+33.38
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2014, MOF held 123,316,451,864 shares in the Bank.
+(2) According to the register of shareholders of the Bank as at 31 December 2014, Huijin held 124,155,852,951 shares in the Bank.
+80
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+HOLDERS OF H SHARES
+Name of substantial
+shareholder
+44.25
+SSF
+Number of
+H shares held
+(share)
+Nature of
+interests
+Percentage of
+H shares
+Percentage
+of total
+ordinary shares
+(%)
+(%)
+Beneficial owner
+Capacity
+Long
+position
+118,006,174,032
+Beneficial owner
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong
+Kong
+As at 31 December 2014, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's shares and relevant shares, which were recorded in the register pursuant to Section 336 of the Securities and
+Futures Ordinance of Hong Kong as follows:
+Interests or short positions of ordinary shares of the Bank:
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+MOF(1)
+Huijin (2)
+Capacity
+Beneficial owner
+Number of
+A shares held
+(share)
+Nature of
+interests
+118,006,174,032
+Long
+position
+Percentage of
+A shares
+(%)
+44.25
+Percentage
+of total
+ordinary shares
+(%)
+33.38
+9
+73.63
+China Export & Credit Insurance Corporation
+8
+Custodian/
+position
+bare trustee)
+0.00
+0.00
+Long
+99,300
+Trustee (excluding
+3,954,514,159
+position
+0.19
+0.75
+Long
+655,207,259
+Investment
+position
+0.28
+1.13
+manager
+Shares
+4.56
+1.12
+Long
+5,239,506,203
+Interest of
+controlled
+corporations
+Blackrock, Inc.
+position
+0.12
+0.48
+Short
+416,834,931
+Beneficial owner
+1.58
+6.44
+5,591,029,285
+Total
+lending
+for
+lending agent
+available
+approved
+Long
+1.48
+981,208,567
+JPMorgan Chase & Co.
+Industrial and Commercial Bank of China Limited (A; H)
+Agricultural Bank of China Limited (A; H)
+Proportion of Huijin's
+shareholding (%)
+47.63
+35.12
+40.28
+4
+Bank of China Limited (A; H)
+Enterprise
+65.52
+China Construction Bank Corporation (A; H)
+57.26
+6
+China Everbright Group Ltd.(1)
+55.67
+7
+China Everbright Bank Company Limited (A; H)
+41.24
+5
+3
+2
+China Development Bank Corporation
+corporations
+position
+controlled
+2.21
+9.00
+Long
+7,812,951,355
+Interest of
+Temasek Holdings
+(Private) Limited
+position
+2.70
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Particulars of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+• Controlling shareholders
+The single largest shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. incorporated on
+16 December 2003, Huijin is a state-owned company founded by the State according to the Company Law. Both of its
+registered capital and paid-in capital are RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen
+North Street, Dongcheng District, Beijing, its organizational code is 71093296-1, and its legal representative is Ding
+Xuedong. Huijin, a wholly-owned subsidiary of China Investment Corporation, makes equity investment in state-owned
+key financial institutions as authorized by the State, and exercises the contributor's rights and obligations in such
+financial institutions up to its contribution on behalf of the State to achieve preservation and appreciation of state-owned
+financial assets. Huijin does not engage in any other commercial activities nor does it intervene in the daily operation of
+those state-owned key financial institutions in which it holds shares. As at 31 December 2013, Huijin had total assets of
+RMB2,650,373,613.0 thousand, total liabilities of RMB135,993,548.5 thousand, and owner's equity of RMB2,514,380,064.5
+thousand. It realized net profit of RMB450,150,738.8 thousand in 2013. The net cash flows from operating activities,
+investing activities and financing activities of Huijin in 2013 totaled RMB41,743,761.4 thousand¹.
+As at 31 December 2014, it held approximately 35.12% shares of the Bank. As at 31 December 2014, enterprises whose
+shares are directly held by Huijin are listed below:
+S/N
+1
+Beneficial owner
+Ge Rongrong
+18
+50
+December 2010-
+Directors Leaving Office
+Liu Lixian
+Executive Director, Secretary of Party
+Male
+60
+July 2013-December 2014
+Discipline Committee
+Li Jun
+Non-executive Director
+Male
+55
+November 2011-November 2014
+Wang Xiaolan
+Non-executive Director
+Male
+59
+January 2012-December 2014
+Yao Zhongli
+52
+Male
+Board Secretary
+Hu Hao
+Gu Shu
+Senior Executive Vice President
+Male
+47
+October 2013-
+Wang Jingdong
+Senior Executive Vice President
+Male
+52
+Non-executive Director
+December 2013-
+Chief Risk Officer
+Male
+59
+August 2006-
+Lin Xiaoxuan
+Chief Information Officer
+Male
+49
+November 2010-
+Wei Guoxiong
+Male
+60
+January 2012-November 2014
+Zheng Fuqing, Non-executive Director
+Mr. Zheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since February 2015.
+He joined MOF in 1989, and once serviced as Deputy Head and Head of Shanxi Finance Ombudsman Office of MOF, and
+Assistant Ombudsman and Associate Counsel of Shanxi Finance Ombudsman Office of MOF. Mr. Zheng graduated from the
+Party School of the Central Committee of C.P.C. majoring in law theory. He is an economist.
+Fei Zhoulin, Non-executive Director
+Mr. Fei has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015. He
+joined MOF in 1995, and previously served as Deputy Head of General Section and Head of Business Section II of Shaanxi
+Finance Ombudsman Office of MOF, Assistant Ombudsman and Vice Ombudsman of Shaanxi Finance Ombudsman Office of
+MOF, and Ombudsman of Ningxia Finance Ombudsman Office of MOF. Mr. Fei graduated from the Correspondence Institute
+of the Party School of the Central Committee of C.P.C. in economic management.
+Cheng Fengchao, Non-executive Director
+Mr. Cheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015.
+He joined Huijin in 2009, and served as Deputy Director of Finance Bureau of Pingquan County in Hebei Province, Deputy
+Director of Finance Office of Hebei Province, Head of Hebei Certified Public Accountants, Vice Chairman and Secretary
+of Hebei Institute of Certified Public Accountants, Deputy General Manager of Shijiazhuang Office, General Manager of
+Evaluation Management Department, General Manager of Tianjin Office and General Manager of Development Research
+Department of China Great Wall Asset Management Corporation, and a Non-executive Director of Agricultural Bank of
+China Limited. Currently, he also acts as guest professor of Peking University HSBC Business School, tutor to PhD students
+of Hunan University, graduate supervisor for Graduate School of Chinese Academy of Social Sciences, Central University of
+Finance and Economics and Capital University of Economics and Business, and member of the Expert Advisory Committee
+for Mergers, Acquisitions and Restructurings of CSRC. He obtained Doctorate degree in management from Hunan University.
+Now, he is a senior accountant, PRC Certified Public Accountant and China's Certified Public Valuer.
+Wong Kwong Shing, Frank, Independent Non-executive Director
+Mr. Wong has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+January 2009. He previously held a number of senior positions with regional responsibility at financial institutions including
+Citibank, JPMorgan and NatWest, and took positions as Chairman of Hong Kong Futures Exchange Limited, Chairman of the
+Leveraged Foreign Exchange Trading Ordinance Arbitration Panel and member of the Foreign Exchange and Money Market
+Practices Committee of Hong Kong Association of Banks. He joined DBS Bank in 1999, and served as Vice Chairman of
+DBS Bank Ltd., Director and Chief Operating Officer of DBS Bank Ltd. and DBS Group Holdings, and Chairman of DBS Bank
+(Hong Kong) and Chairman of DBS Bank (China). He also served as an Independent Non-executive Director of the National
+Healthcare Group Pte Ltd under the Ministry of Health of Singapore and Mapletree Investments Pte Ltd. At present, he is
+concurrently a Non-executive Director of PSA International Pte Ltd and PSA Corporation Limited, Independent Non-executive
+Director of China Mobile Limited, and President and Independent Non-executive Director of Mapletree Greater China
+Commercial Trust.
+Annual Report 2014
+Mr. Fu has served as Non-executive Director of Industrial and Commercial Bank of China Limited since December 2013. He
+joined MOF in 1983, and once serviced as Secretary of Organizational Communist Youth League of MOF, Deputy Chief and
+Chief of the Business and Finance Department, Finance Supervision Department and Inspection and Supervision Department
+of MOF, Vice Ombudsman of Shanghai Finance Ombudsman Office of MOF, Vice Ombudsman (person-in-charge) of Anhui
+Finance Ombudsman Office of MOF, Associate Counsel and Counsel of Beijing Finance Ombudsman Office of MOF. He
+served as Non-executive Director of Industrial and Commercial Bank of China Limited and China Everbright Industry Group
+Limited. He graduated from Sichuan University and obtained a Bachelor's degree of Philosophy.
+87
+Malcolm Christopher McCarthy, Independent Non-executive Director
+Sir M.C. McCarthy has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited
+since December 2009. He worked first as an economist for ICI before joining the UK Department of Trade and Industry
+where he held various posts from economic adviser to undersecretary. He subsequently worked as a senior executive of
+Barclays Bank first in Japan and then North America. He served as Chairman and Chief Executive of Office of Gas and
+Electricity Markets (Ofgem), Chairman of the Financial Services Authority (FSA), a non-executive director of HM Treasury,
+Chairman of the board of directors of J.C. Flowers & Co. UK Ltd, and a non-executive director of NIBC Holding N.V., NIBC
+Bank N.V., OneSavings Bank plc and Castle Trust Capital plc. Currently Sir M.C. McCarthy serves as a non-executive director
+of Intercontinental Exchange, a Trustee of the Said Business School of Oxford University and IFRS Foundation, and the
+Chairman in the United Kingdom of Promontory Financial Group. He is an Honorary Fellow of Merton College, an Honorary
+Doctorate of the University of Stirling and the Cass Business School, and a Freeman of the City of London. He has a MA
+History at Merton College of Oxford University, PhD Economics of Stirling University, and MS at Graduate School of Business
+of Stanford University.
+Kenneth Patrick Chung, Independent Non-executive Director
+Mr. Chung has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited
+since December 2009. He joined Deloitte Haskins and Sells London Office in 1980. He became a partner of
+PricewaterhouseCoopers in 1992, and was a financial service specialist of PricewaterhouseCoopers (Hong Kong and China)
+since 1996. Previously, he was the human resources partner of PricewaterhouseCoopers (Hong Kong), the responsible
+partner of the audit department of PricewaterhouseCoopers (Hong Kong and China), the global lead partner of the audit
+engagement team for Bank of China Limited, the honorary treasurer of The Community Chest of Hong Kong and was
+a member of the Ethics Committee, Limitation of Professional Liability Committee, Communications Committee, and
+the Investigation Panel of the Hong Kong Society of Accountants. Mr. Chung has also served as the audit partner for
+the restructurings and initial public offerings of Bank of China Limited, Bank of China (Hong Kong) Limited and Bank of
+Communications Co. Ltd. and Chairman of the Audit Committee of the Harvest Real Estate Investments (Cayman) Limited.
+Currently, Mr. Chung serves as the Vice Chairman of International Social Service Hong Kong Branch. He is a member of
+the Institute of Chartered Accountants in England and Wales, a member of the Hong Kong Institute of Certified Public
+Accountants and a member of the Macau Society of Certified Practising Accountants. Mr. Chung received a bachelor's
+degree in economics from the University of Durham.
+Or Ching Fai, Independent Non-executive Director
+Mr. Or has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since May
+2012. Mr. Or previously served as General Manager and a Director of The Hongkong and Shanghai Banking Corporation
+Limited, Chairman of HSBC Insurance Limited, Chief Executive and Vice Chairman of Hang Seng Bank Limited, Chairman of
+Hang Seng Insurance Company Limited and Hang Seng Bank (China) Limited, a Director of Cathay Pacific Airways Limited,
+and a Director of Hutchison Whampoa Limited. He was Chairman of the Hong Kong Association of Banks, Vice President
+and a Council Member of the Hong Kong Institute of Bankers, Chairman of the Financial Services Advisory Committee and a
+member of the Services Promotion Programme Committee of the Hong Kong Trade Development Council, a member of the
+Risk Management Committee of the Hong Kong Exchanges and Clearing Limited, a member of the Aviation Development
+Advisory Committee, Chairman of Executive and Campaign Committee of the Community Chest of Hong Kong, Acting
+Chairman of the Council of City University of Hong Kong, a Council Member of The University of Hong Kong, and an Adviser
+of the Employers' Federation of Hong Kong. Mr. Or currently acted as Chairman, CEO and Executive Director of China
+Strategic Holdings Limited, Chairman and Independent Non-executive Director of Esprit Holdings Limited, Vice Chairman and
+an Independent Non-executive Director of G-Resources Group Limited, an Independent Non-executive Director of Chow Tai
+Fook Jewellery Group Limited and Television Broadcasts Limited, and a Vice Patron of the Board of the Community Chest
+of Hong Kong. Mr. Or graduated from The University of Hong Kong with a Bachelor's degree in Economics and Psychology.
+He is an Honorary Doctorate of Social Science of City University of Hong Kong. Mr. Or was awarded a Silver Bauhinia Star
+from the Hong Kong Special Administrative Region and Honorary University Fellowships from The University of Hong Kong in
+2009. He is a Justice of the Peace.
+88
+ICBC
+Fu Zhongjun
+Directors, Supervisors, Senior Management, Employees and Institutions
+October 2013-
+Fu Zhongjun, Non-executive Director
+ICBC
+Notes: (1) Please refer to the section headed "Directors, Supervisors, Senior Management, Employees and Institutions - Appointment and
+Removal".
+(2)
+The current terms of Mr. Jiang Jianqing and Mr. Yi Huiman as Directors of the Bank are set out in the above table and their terms
+as Senior Management members of the Bank started from October 2005 and July 2008 respectively.
+(3) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+(4) During the reporting period, the Bank did not implement any share incentives. Existing and retiring Directors, Supervisors and
+Senior Management members during the reporting period, except Mr. Zhang Hongli who held 2,000 H shares of the Bank, did
+not hold any share or share option nor were authorized with any restricted share of the Bank, and there was no change during
+the reporting period.
+Annual Report 2014
+85
+Directors, Supervisors, Senior Management, Employees and Institutions
+Biographies of Directors, Supervisors and Senior Management
+Directors, Supervisors, Senior Management, Employees and Institutions
+Jiang Jianqing, Chairman, Executive Director
+Yi Huiman, Vice Chairman, Executive Director, President
+Mr. Yi has served as Vice Chairman and Executive Director of Industrial and Commercial Bank of China Limited since
+July 2013, and President since May 2013. He joined ICBC in 1985 and has served as a member of Senior Management
+of Industrial and Commercial Bank of China Limited since October 2005. He had previously served in several positions
+including Deputy Head of ICBC Zhejiang Branch, Head of ICBC Jiangsu Branch and ICBC Beijing Branch and Senior Executive
+Vice President of ICBC. He obtained a Master's degree in Executive Business Administration from Guanghua School of
+Management of Peking University.
+Zhao Lin, Chairman of the Board of Supervisors
+Mr. Zhao has served as Chairman of the Board of Supervisors of Industrial and Commercial Bank of China Limited since June
+2008. He was appointed as Executive Director and Senior Executive Vice President of China Construction Bank in September
+2004, and previously was Deputy Head of Hubei Branch, Deputy General Manager and General Manager of the Executive
+Office of the Head Office, Chief Auditor, and Senior Executive Vice President of China Construction Bank. He graduated
+from Zhongnan University of Economics and Law, and received the Executive Master of Business Administration (EMBA)
+degree from Tsinghua University. He is a senior economist.
+Wang Xiaoya, Non-executive Director
+Ms. Wang has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012. She
+has joined Central Huijin Investment Ltd. since 2012. She joined the Research Bureau of the People's Bank of China in 1997
+where she served as Deputy Chief of division, Chief of division and Deputy Director and served as Deputy Mayor of Tongliao
+City in Inner Mongolia Autonomous Region at the same time. Ms. Wang was a researcher and a Member of the Post-
+Doctoral Academic Committee and a Post-Doctoral Co-mentor at the People's Bank of China Research Institute of Finance.
+She previously taught at Central China Normal University where she served as Assistant Lecturer and Lecturer. Ms. Wang
+graduated from the Graduate School of Chinese Academy of Social Sciences and received a Doctorate degree in Economics.
+Ge Rongrong, Non-executive Director
+Ms. Ge has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012. She
+has worked at Huijin since 2005 and had served as Deputy Officer and Officer of the Construction Bank Share Management
+Division of the Banking Department at Huijin and an Employee Supervisor of Huijin. Ms. Ge previously served as Lecturer
+at the Economics Management College of Beijing University of Industry in 1994, and subsequently served as Assistant
+Researcher at China Eagle Securities Company and staff member of the Department of Public Offering and Supervision at
+China Securities Regulatory Commission. Ms. Ge graduated from China University of Technology and received a Doctorate
+degree in Management. Ms. Ge also received a Bachelor's degree in Engineering from Zhejiang University and a Master's
+degree in Economics from Beijing Normal University. She is a senior economist.
+86
+Mr. Jiang has served as Chairman of the Board of Directors and Executive Director of Industrial and Commercial Bank
+of China Limited since October 2005. He joined ICBC in 1984, and was appointed as President in February 2000. Mr.
+Jiang previously served in several positions including Deputy Head of ICBC Shanghai Branch, President of Shanghai Urban
+Cooperation Commercial Bank (now known as Bank of Shanghai), Head of ICBC Shanghai Branch and Senior Executive Vice
+President of ICBC. At present, he is concurrently Vice Chairman of China Society for Finance and Banking, and a tutor to PhD
+students of Shanghai Jiao Tong University. He graduated from Shanghai University of Finance and Economics and Shanghai
+Jiao Tong University, and received a Master's degree in Engineering and a Doctorate degree in Management from Shanghai
+Jiao Tong University.
+50
+January 2015 January 2018
+Senior Executive Vice President
+Independent Non-executive Director
+Male
+66
+January 2012-January 2015
+Frank
+Malcolm Christopher
+Independent Non-executive Director
+Male
+70
+March 2013-March 2016
+McCarthy
+Kenneth Patrick Chung
+Independent Non-executive Director
+Male
+57
+March 2013-March 2016
+Or Ching Fai
+Independent Non-executive Director
+Male
+Wong Kwong Shing,
+March 2015-March 2018
+55
+Male
+Male
+Zheng Fuqing
+Non-executive Director
+Female
+46
+January 2015-January 2018
+Non-executive Director
+Male
+57
+65
+December 2013-December 2016
+Male
+51
+February 2015-February 2018
+Fei Zhoulin
+Non-executive Director
+56
+March 2015-March 2018
+Cheng Fengchao
+Non-executive Director
+Non-executive Director
+May 2012-May 2015
+Male
+Yi Xiqun
+Employee Supervisor
+Male
+52
+August 2012-August 2015
+Li Mingtian
+Employee Supervisor
+Male
+58
+July 2012-July 2015
+Zhang Wei
+Zhang Hongli
+Male
+49
+May 2010-
+Wang Xiquan
+Senior Executive Vice President
+Male
+54
+Hong Yongmiao
+Zheng Wanchun
+September 2012-
+May 2012-May 2015
+Senior Executive Vice President
+Male
+Dong Juan
+59
+Independent Non-executive Director
+Male
+50
+Independent Non-executive Director
+Male
+67
+December 2013-December 2016
+Shareholder Supervisor
+August 2012-August 2015
+59
+External Supervisor
+Meng Yan
+Female
+May 2012-May 2015
+62
+Wang Chixi
+Female
+External Supervisor
+January 2015-January 2018
+Articles of Association
+ICBC (Almaty)
+Huijin
+Global Systemically Important Banks
+CSRC
+convertible bonds
+Company Law
+CBRC
+Capital Regulation
+Bank ICBC (JSC)
+ICBC (Argentina)
+Hong Kong Listing Rules
+Financial Statements
+Definitions
+H
+292
+Overseas Branches and Offices
+List of Domestic and
+288
+2015 Ranking and Awards
+126
+Independent Auditor's Report and
+124
+Organizational Chart
+120
+Significant Events
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+ICBC (Asia)
+MOF
+ICBC (Canada)
+117
+Standard Bank
+SSF
+SSE
+SEHK
+Hong Kong
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+IFRSS
+ICBCFS
+ICBC-AXA
+ICBC Standard Bank
+ICBC (Brasil)
+ICBC Leasing
+ICBC Credit Suisse Asset Management
+ICBC Convertible Bonds
+ICBC (USA)
+ICBC (Turkey)
+ICBC (Thai)
+ICBC (Peru)
+ICBC (New Zealand)
+ICBC (Mexico)
+ICBC (Malaysia)
+ICBC (Macau)
+ICBC (London)
+ICBC (Indonesia)
+ICBC (Europe)
+ICBC International
+Report of the Board of Supervisors
+E
+Report of the Board of Directors
+- Capital Management
+- Risk Management
+Business Overview
+Financial Statements Analysis
+Regulatory Environments
+Economic, Financial and
+16
+12
+2356226
+CONTENTS
+State Council
+52
+(宮
+H
+E
+00
+The Bank continued to promote reform, innovation
+and operation transformation. The Bank's assets
+and liabilities business kept stable profitability
+during the structural adjustment. Retail banking,
+asset management and investment banking became
+important engines driving the profit growth, and
+the development of internet-based finance with
+leading edge gave impetus to the fundamental
+reform on operation and management models and
+service methods. The pattern of internationalized and
+diversified operation was further improved, covering
+42 countries and regions, and overseas operations and
+comprehensive subsidiaries of fund, insurance and
+leasing contributed more to the Bank's profit-making.
+Through its continuous endeavor and stable
+development, the Bank has developed into the top
+large listed bank in the world, possessing an excellent
+customer base, a diversified business structure, strong
+innovation capabilities and market competitiveness and
+providing comprehensive financial products and services
+to 5,320 thousand corporate customers and 496 million
+personal customers.
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Company Profile
+Annual Report 2015
+SHOW BHO
+RMB Preference Shares Stock Code: 84602
+USD Preference Shares Stock Code: 4603
+EUR Preference Shares Stock Code: 4604
+Stock Code: 1398
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+ICBC (
+-
+Outlook
+52
+62228
+96
+Corporate Governance Report
+84
+Employees and Institutions
+Directors, Supervisors, Senior Management,
+76
+Shareholding of Substantial Shareholders
+Details of Changes in Share Capital and
+74
+Social Responsibility
+72
+Regulatory Requirements
+Other Information Disclosed Pursuant to
+113
+M
+H
+H
+Discussion and Analysis
+President's Statement
+Chairman's Statement
+Corporate Information
+Financial Highlights
+Important Notice
+Definitions
+The Bank consciously unified the social responsibilities
+to its development strategy and operation and
+management activities, gaining wide social recognition
+in the aspects of supporting economic and social
+development, protecting environment and resources,
+participating in community services and promoting
+inclusive finance. In 2015, the Bank was named the
+"Best Emerging Markets Bank" by Euromoney, and
+ranked 1st place among the Top 1000 World Banks
+by the Banker and the Global 2000 listed by the US
+magazine Forbes for the third consecutive year.
+71
+32
+17
+16
+(53)
+the Bank/the Group
+The 2015 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board
+of Directors of the Bank held on 30 March 2016. There were 16 directors eligible for attending the meeting, of whom
+14 directors attended the meeting in person, 2 directors appointed others to attend the meeting. Director Wang Xiquan
+appointed Director Zhang Hongli to attend the meeting and vote on his behalf, and Director Yi Xiqun appointed Director
+Hong Yongmiao to attend the meeting and vote on his behalf.
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by
+CBRC in June 2012
+63.34
+54.22
+54.58
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2)
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(6) Calculated by dividing operating expense (less business tax and surcharges) by operating income.
+(7)
+Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers
+(10) Data for period since 2013 were calculated in accordance with the Capital Regulation and those for 2011-2012 were calculated
+in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related regulations promulgated by
+CBRC.
+Quarterly Financial Data
+8
+2015
+(In RMB millions)
+Q1
+Operating income
+165,808
+Q2
+170,929
+Q3
+Q4
+167,096 164,900
+Q1
+156,863
+59.51
+2014
+Q2
+ratio
+6.19
+266.92
+Allowance to total loans ratio (9)
+2.35
+2.34
+2.43
+2.50
+2.50
+Capital adequacy (%)
+Core tier 1 capital adequacy ratio (10)
+12.87
+11.92
+10.57
+Tier 1 capital adequacy ratio (10)
+13.48
+12.19
+10.57
+Capital adequacy ratio (10)
+15.22
+14.53
+13.12
+13.66
+13.17
+Total equity to total assets ratio
+8.11
+7.46
+6.76
+6.43
+Risk-weighted assets to total assets
+159,990
+Q3
+152,688
+Q4
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Financial Leasing Co., Ltd.
+ICBC International Holdings Limited
+ICBC Credit Suisse Asset Management Co., Ltd.
+A Share convertible corporate bonds of Industrial and Commercial Bank of China
+Limited
+Industrial and Commercial Bank of China (USA) NA
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC PERU BANK
+Industrial and Commercial Bank of China (New Zealand) Limited
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Industrial and Commercial Bank of China (Macau) Limited
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+Industrial and Commercial Bank of China (Asia) Limited
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Central Huijin Investment Ltd.
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
+Limited
+Banks undertaking key functions with global features in the financial markets as
+released by the Financial Stability Board
+China Securities Regulatory Commission
+convertible corporate bonds
+Company Law of the People's Republic of China
+China Banking Regulatory Commission
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting
+Standards
+Ministry of Finance of the People's Republic of China
+The People's Bank of China
+165,317
+Net profit attributable to equity
+holders of the parent
+company
+74,324
+74,697 72,740 55,370
+73,302
+74,798 72,364 55,347
+Net cash flows from operating
+activities
+518,295
+565,554 (331,219) 379,134
+247,991
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+170,100 (341,402) 124,768
+The 2015 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+ICBC
+2
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial
+Bank of China Limited and its subsidiaries
+The State Council of the People's Republic of China
+Standard Bank Group Limited
+National Council for Social Security Fund
+Shanghai Stock Exchange
+The Stock Exchange of Hong Kong Limited
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Accounting Standards for Business Enterprises promulgated by the Ministry of
+Finance
+ICBC
+60.53
+2011 2012 2013 2014 2015
+呂
+956,742
+Share capital
+356,407
+353,495
+351,390
+349,620
+349,084
+Net core tier 1 capital (1)
+1,701,495
+1,486,733
+1,266,841
+Net tier 1 capital(1)
+1,781,062
+1,521,233
+1,266,859
+Net capital base(1)
+2,012,103
+1,812,137
+1,572,265
+1,299,014
+1,112,463
+Risk-weighted assets (1)
+13,216,687
+1,124,997
+12,475,939
+1,274,134
+1,789,474
+4,083,887
+3,915,902
+Total liabilities
+20,409,261
+19,072,649
+17,639,289
+16,413,758
+14,519,045
+Due to customers
+16,281,939
+15,556,601
+14,620,825
+13,642,910
+12,261,219
+Due to banks and other financial
+institutions
+2,265,860
+1,539,239
+1,269,255
+1,486,805
+1,341,290
+Equity attributable to equity holders
+of the parent company
+1,530,859
+11,982,187
+9,511,205
+8,447,263
+A1
+A1
+A1
+A1
+Notes: (1) Data for period since 2013 were calculated in accordance with the Regulation Governing Capital Adequacy of Commercial
+Banks (Provisional) promulgated by CBRC in June 2012 ("Capital Regulation") and those for 2011-2012 were calculated in
+accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related regulations promulgated by
+CBRC.
+(2)
+Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments
+at the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(3) The rating results are in the form of "long-term foreign currency deposits rating".
+Annual Report 2015
+7
+Financial Highlights
+Financial Indicators
+2015
+2014
+2013
+2012
+2011
+Profitability (%)
+Return on average total assets(1)
+1.30
+1.40
+1.44
+1.45
+A1
+A
+A
+A
+Per share data (in RMB yuan)
+Net asset value per share(2)
+4.80
+4.23
+3.63
+3.22
+2.74
+Basic earnings per share
+0.77
+0.78
+0.75
+4,322,244
+0.68
+Diluted earnings per share
+0.77
+0.78
+0.74
+0.67
+0.59
+Credit rating
+S&P(3)
+Moody's (3)
+A
+A
+0.60
+4,433,237
+5,009,963
+Investment
+Impairment losses
+220,835
+218,674
+204,140
+189,940
+169,613
+86,993
+56,729
+38,321
+33,745
+31,121
+Operating profit
+360,905
+359,455
+336,440
+306,035
+269,867
+Profit before taxation
+363,235
+361,612
+338,537
+308,687
+272,311
+Operating expenses
+470,601
+529,720
+578,901
+ICBC
+Financial Data
+Financial Highlights
+2015
+2014
+2013
+2012
+2011
+Annual operating results (in RMB millions)
+Net interest income
+507,867
+Net profit
+493,522
+417,828
+362,764
+Net fee and commission income
+143,391
+132,497
+122,326
+106,064
+101,550
+Operating income
+668,733
+634,858
+443,335
+1.44
+277,720
+262,965
+Net cash flows from operating activities
+1,131,764
+201,457
+(1,947)
+533,508
+348,123
+As at the end of reporting period
+(in RMB millions)
+Total assets
+22,209,780
+Total loans and advances to customers
+11,933,466
+20,609,953
+11,026,331
+18,917,752
+9,922,374
+17,542,217
+8,803,692
+15,476,868
+7,788,897
+Allowance for impairment losses
+on loans
+280,654
+257,581
+240,959
+220,403
+194,878
+208,265
+238,532
+262,649
+275,811
+238,691
+208,445
+Net profit attributable to equity holders
+of the parent company
+277,131
+13.12
+13.66
+13.17
+14.53
+15.22
+%
+276,286
+Capital adequacy ratio
+0.85
+0.94
+0.94
+1.13
+1.50
+%
+Non-performing loans ratio
+2011 2012 2013 2014 2015
+26.69
+29.24 28.80 27.93
+20.02
+2011 2012 2013 2014 2015
+2011 2012 2013 2014 2015
+Return on weighted average equity(2)
+19.96
+10/F, Alexandra House, Chater Road, Central, Hong Kong
+Linklaters
+9/F, Three Exchange Square, Central, Hong Kong
+Allen & Overy
+Hong Kong, China:
+20/F, China Resources Building, 8 Jianguomen North Street,
+Dongcheng District, Beijing, PRC
+Jun He Law Offices
+40/F, Office Tower A, Beijing Fortune Plaza, 7 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, PRC
+King & Wood Mallesons
+Mainland China:
+Legal advisors
+The "HKExnews" website of SEHK for publication of
+the annual report in respect of H shares:
+www.hkexnews.hk
+www.sse.com.cn
+Website designated by CSRC for publication of the
+annual report in respect of A shares:
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+Selected newspapers for information disclosure:
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Hu Hao
+Board Secretary and Company Secretary:
+Yi Huiman and Hu Hao
+Authorized representatives:
+Share Registrars
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong
+A Share:
+3/F China Insurance Building, No. 166 Lujiazui Dong Road,
+Pudong New Area, Shanghai, PRC
+Stock name: ICBC CNHPREF1-R
+Stock code: 4604
+Stock name: ICBC EURPREF1
+Stock code: 4603
+Stock name: ICBC USDPREF1
+The Stock Exchange of Hong Kong Limited
+Offshore Preference Share:
+Stock code: 1398
+Stock name: ICBC
+The Stock Exchange of Hong Kong Limited
+H Share:
+Stock code: 601398
+Stock name: 工商銀行
+Shanghai Stock Exchange
+A Share:
+Place where shares are listed, and their names and
+codes
+Location where copies of this annual report are kept:
+Office of the Board of Directors of the Bank
+Fax: 852-28650990
+Tel: 852-28628555
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong
+Computershare Hong Kong Investor Services Limited
+H Share:
+Tel: 86-4008058058
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+Principal place of business in Hong Kong:
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and compliant hotline: 86-95588
+Our Vision
+0110110011001110101010110 101ic
+011010 10
+010 1 1010101
+10111 110 101 001010001-1
+10100101001-1010 1010
+1010110110101010111–110101010
+Excellent Services to Clients, Maximum Returns to Shareholders
+Real Success for Our People, Great Contribution to Society
+Excellence for You
+Our Mission
+0101010110101010101
+ICBC £3
+H
+101
+0101
+3
+Annual Report 2015
+This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.
+The report contains forward-looking statements on the Bank's financial positions, business performance and
+development. The statements are made based on existing plans, estimates and forecast, and bear upon future external
+events or the Group's future finance, business or performance in other aspects, and may involve future plans which do
+not constitute substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the
+risks and understand the difference between plans, estimates and commitments.
+During the reporting period, the Bank did not identify any material risks that exerted negative impact on the Bank's
+development strategy and business objectives in the future. The Bank has actively adopted measures to effectively manage
+various types of risks. Please refer to the section headed "Discussion and Analysis Risk Management" for detailed
+information.
+Notes on Material Risks
+Mr. Jiang Jianqing, Legal Representative of the Bank, Mr. Yi Huiman, President in charge of finance of the Bank, and Mr. Liu
+Yagan, General Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that the
+financial statements contained in the Annual Report are authentic, accurate and complete.
+30 March 2016
+111
+1110
+Menon 4B0101 101101101010
+10101010101010101 A Global Leading Bank with the Best Profitability,
+Telephone: 86-10-66106114
+Postal code: 100140
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Registered address and office address:
+Jiang Jianqing
+Legal representative:
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English:
+中國工商銀行股份有限公司(“中國工商銀行”)
+Legal name in Chinese:
+Corporate Information
+Stock code: 84602
+ICBC
+Integrity, Humanity, Prudence, Innovation and Excellence
+Integrity Leads to Prosperity
+Our Value
+pranaloto sio 10101010101101010
+101010010101 FOFO101011110101001
+10100 1.1.1.01
+on
+2/10101001110
+Performance and Prestige
+01
+0.0010010101010 0110
+100011110 0101010
+4
+Domestic Preference Share:
+Shanghai Stock Exchange
+Stock name: I
+Stock code: 360011
+21.58
+26.69
+27.93
+28.80
+29.24
+29.91
+Asset quality (%)
+Non-performing loans ("NPL") ratio (7)
+1.50
+1.13
+0.94
+0.85
+0.94
+Allowance to NPL (8)
+156.34
+206.90
+257.19
+295.55
+29.91
+21.44
+20.87
+21.13
+21.58
+20.02
+21.13
+20.87
+21.44
+21.92
+23.02
+23.44
+Net interest spread (3)
+2.30
+2.46
+2.40
+2.49
+2.49
+Net interest margin (4)
+2.47
+%
+2.66
+2.66
+2.61
+Return on risk-weighted assets (5)
+2.16
+2.26
+2.45
+2.66
+2.68
+Ratio of net fee and commission
+income to operating income
+Cost-to-income ratio (6)
+2.57
+17.10
+%
+Ratio of net fee and commission
+income to operating income
+Unit: RMB100 millions
+Total assets
+Unit: RMB100 millions
+Net profit
+6
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Highlights
+UT
+5
+Annual Report 2015
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong
+KPMG
+International auditors:
+CPA (Practicing): Song Chenyang and Li Li
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue, Dongcheng
+District, Beijing, PRC
+KPMG Huazhen LLP
+Domestic auditors:
+Name and office address of auditors
+11 December 2015 to 31 December 2016
+Continuous inspection and supervision period:
+618 Shangcheng Road, China (Shanghai) Pilot Free Trade Zone
+Sponsor representatives: Zhang Jianhua, Wu Guomei
+Guotai Junan Investment Management Co., Ltd.
+Sponsor of domestic preference shares:
+2,763
+2,777
+2,630
+2,387
+2011 2012 2013 2014 2015
+17.10
+19.96
+21.92
+23.44 23.02
+2011 2012 2013 2014 2015
+0.60
+0.68
+0.77
+0.75
+0.78
+Cost-to-income ratio
+%
+2011 2012 2013 2014 2015
+154,769
+175,422
+189,178
+206,100
+222,098
+Unit: RMB
+Basic earnings per share
+2012 2013 2014 2015
+2011
+2,084
+Return on weighted average equity
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.333 (pre-tax) for each
+ten shares for 2015. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2015.
+The Bank did not convert capital reserve to share capital.
+Responsibilities of the Shareholders' General Meeting
+Total
+(7,351,403)
+(33.1)
+22,209,780
+100.0
+17,498
+100.0
+466,346
+100.0
+Note: (1) Overseas and others include investments in associates and joint ventures.
+undistributed assets
+Annual Report 2015
+Corporate Governance Report
+Corporate Governance Framework
+Shareholders'
+General Meeting
+Primary reporting line
+Secondary reporting line
+Board of
+Directors
+Board of
+Supervisors
+Strategy
+Committee
+Risk Management
+Committee
+Nomination
+Committee
+95
+Eliminated and
+4.2
+19,504
+3,676
+21.0
+95,050
+20.4
+Western China
+2,819,807
+12.7
+3,906
+22.3
+95,988
+20.6
+Northeastern China
+1,069,622
+4.8
+1,765
+10.1
+52,062
+11.1
+Overseas and others
+2,450,563
+11.0
+496
+2.8
+Compensation
+Committee
+10.0
+Related Party
+Transactions Control
+Committee
+Supervision
+Committee
+Profitability
+Units
+Directly
+Controlled
+Institutions
+Domestic
+Institutions
+Overseas
+Institutions
+Note: The above is the corporate governance framework chart as of the end of 2015.
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+As the authority organ of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders'
+General Meeting is responsible for, among others, deciding on business policies and material investment plans of the Bank;
+considering and approving the proposals on the annual financial budget, final accounts, profit distribution plans and loss
+recovery plans, electing and changing directors, shareholder supervisors and external supervisors; considering and approving
+the work report of the Board of Directors and the work report of the Board of Supervisors; adopting resolutions on merger,
+division, dissolution, liquidation, change of corporate form, increase or decrease of registered capital, issuance and listing
+of corporate bonds or other negotiable securities and repurchase of stocks; and amending the Articles of Association of the
+Bank.
+96
+ICBC
+Corporate Governance Report
+Supporting
+Departments
+Responsibilities of the Board of Directors
+Responsibilities of the Board of Supervisors
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report to, the Shareholders'
+General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance and due diligence
+of Directors and Senior Management members; supervising the performance of duties of the Board of Directors and
+the Senior Management; conducting audits on retiring or resigning Directors and Senior Management members where
+appropriate; examining and supervising the Bank's financial activities; examining financial information such as financial
+report, business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of
+Directors; examining and supervising business decisions, risk management and internal control of the Bank, and providing
+guidance for the internal audit departments of the Bank; formulating performance assessment measures for supervisors,
+assessing the performance and conduct of supervisors, and reporting to the Shareholders' General Meeting for approval;
+presenting proposals to the Shareholders' General Meeting; proposing to convene extraordinary general meetings,
+and convening and presiding over such meetings in case the Board of Directors fails to perform its duty of convening
+Shareholders' General Meeting; proposing to convene interim meetings of the Board of Directors.
+Responsibilities of the Senior Management
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, carrying out operational management of the Bank; organizing the
+implementation of business plan and investment plan approved by the Board of Directors; formulating detailed regulations
+and rules for operational management; formulating proposals on remuneration distribution and performance assessment for
+heads of internal departments and branches of the Bank; reporting operating results to the Board of Directors and the Board
+of Supervisors; preparing the annual financial budget, final accounts, profit distribution plans and loss recovery plans, and
+proposals on the increase or decrease of registered capital, issuance or listing of bonds, and making recommendations to the
+Board of Directors.
+27.14
+22.40
+Yes
+11.75
+11.75
+Yes
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report to, the
+Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the Shareholders'
+General Meeting; implementing resolutions of the Shareholders' General Meeting; deciding on business plans, investment
+plans and development strategies of the Bank; formulating annual financial budgets and final accounts of the Bank;
+formulating profit distribution plans and loss recovery plans; formulating proposals on the increase or decrease of registered
+capital of the Bank; formulating fundamental management rules on risk management and internal control, and supervising
+the implementation of these rules; appointing or removing the President and the Board Secretary, and based on the
+President's nomination, appointing or removing Senior Executive Vice Presidents and other Senior Management members
+(except the Board Secretary), and deciding on their remuneration, rewards and sanctions; deciding or authorizing the
+President to set up relevant head office departments of the Bank; regularly evaluating and improving corporate governance
+of the Bank; managing information disclosure matters of the Bank; and supervising and ensuring effective performance of
+management responsibilities of the President and other Senior Management members.
+Comprehensive
+Administration
+Departments
+Risk
+Management
+Departments
+Marketing
+Management
+Departments
+Senior
+Management
+Information
+Technology
+Approval
+Committee
+Financial
+Approval
+Committee
+Information
+Technology
+Management
+Committee
+Business & Product
+Innovation
+Management
+Committee
+Asset & Liability
+Management
+Committee
+Risk
+Management
+Committee
+Credit
+Approval
+Committee
+Credit Risk
+Management
+Committee
+Market Risk
+Management
+Committee
+Operational Risk
+Management
+Committee
+Internal Audit
+Bureau
+Internal Audit
+Sub-bureau
+Audit Committee
+Lin Xiaoxuan
+2,216,719
+15.7
+As at the end of 2015, the Bank had 466,346 employees', representing an increase of 4,064 from the end of the previous
+year, of whom 5,076 were employees in major domestic subsidiaries and 14,428 were local employees in overseas
+institutions.
+SPECIALIZATIONS AND ACADEMIC ACHIEVEMENTS OF DOMESTIC EMPLOYEES
+Employee Specialization
+Academic Achievements
+Personal banking
+40.0%
+Finance, accounting, treasury
+14.5%
+operations and operational
+management
+Basic Information on Employees and Institutions
+Bachelor
+Corporate banking
+10.6%
+Associate
+32.3%
+Management
+7.1%
+Below associate
+14.1%
+Risk and compliance
+5.5%
+48.4%
+For the change of the Bank's directors, supervisors and senior management, please refer to the section headed "Directors,
+Supervisors, Senior Management, Employees and Institutions - Appointment and Removal".
+(6)
+(5) As the Bank's independent non-executive directors and external supervisors served as directors or senior management of other
+legal persons or organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations
+became connected persons of the Bank. The Bank's independent non-executive directors and some external supervisors obtained
+remuneration from such connected persons. Except to the extent of the aforementioned circumstances, none of the Bank's
+directors, supervisors and senior management were paid by the Bank's connected persons during the reporting period.
+No
+27.22
+27.22
+Yes
+- 3.75
+3.75
+No
+37.20
+9.02
+46.22
+No
+37.62
+12.25
+49.87
+No
+Annual Report 2015
+93
+Directors, Supervisors, Senior Management, Employees and Institutions
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2)
+According to the requirements of relevant government authorities, the total final remuneration payable to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors, Shareholder Supervisors and
+other Senior Management members is still subject to final confirmation by relevant government authorities. Additional details of
+remuneration will be disclosed when they have been determined.
+(3) During the reporting period, Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Fu Zhongjun, Mr. Zheng Fuqing, Mr. Fei Zhoulin, Mr.
+Cheng Fengchao and Mr. Li Jun were paid by Huijin for their performance of responsibilities as the Bank's directors.
+(4) Fees of Employee Supervisors Mr. Zhang Wei, Mr. Hui Ping and Mr. Li Mingtian are their allowances obtained as Employee
+Supervisors of the Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+management
+Central China
+Master
+3.2%
+15,271
+3.3
+Yangtze River Delta
+4,862,465
+21.9
+2,637
+15.1
+63,646
+13.6
+Pearl River Delta
+0.2
+3,366,173
+2,133
+12.2
+51,556
+11.1
+Bohai Rim
+3,633,597
+16.4
+2,855
+16.3
+73,269
+15.2
+30
+41.1
+9,142,237
+5.1%
+0.1%
+Doctorate
+Other financial businesses
+2.5%
+Non-banking business
+Others
+1.3%
+15.3%
+At the end of 2015, the Bank had a total of 17,498 institutions, representing an increase of 38 as compared with the end
+of the previous year. Among them, there were 17,094 domestic institutions and 404 overseas ones. Domestic institutions
+include the Head Office, 31 tier-one branches, five branches directly controlled by the Head Office, 27 banking offices of
+tier-one branches, 409 tier-two branches, 3,080 tier-one sub-branches, 13,420 outlets, 29 Head Office-level profitability
+units along with their directly controlled-institutions and branches, and 92 major subsidiaries and their branches.
+1
+94
+Does not include labor dispatched for services totaling 489 persons, of whom 41 were dispatched to major subsidiaries.
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES (As at the end of December 2015)
+Assets Percentage
+Item
+(In RMB millions)
+Number of Percentage
+(%) institutions
+Percentage
+(%)
+Employees
+(%)
+Head Office
+IT
+Zheng Wanchun
+4.74
+Meng Yan
+Contribution
+Remuneration from the Bank
+paid
+Remuneration
+Unit: RMB10,000
+Annual Remuneration
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+92
+In June 2015, Mr. Lin Xiaoxuan ceased to act as Chief Information Officer of the Bank due to work change. In October 2015,
+Mr. Zheng Wanchun ceased to act as Senior Executive Vice President of the Bank due to work change.
+by the
+employer
+In July 2015, Mr. Wang Lin was appointed as Secretary of Party Discipline Committee. In October 2015, the Board of
+Directors of the Bank engaged Mr. Hu Hao as Senior Executive Vice President of the Bank, and his qualification was
+approved by CBRC in November 2015.
+On 19 June 2015, Mr. Zhao Lin resigned from the posts of Supervisor and Chairman of the Board of Supervisors due to his
+age. On 23 July 2015, the term of office of Employee Supervisor Mr. Li Mingtian expired, and he continued to perform the
+supervisor's responsibilities up to 25 September 2015 according to the Articles of Association of the Bank. On 21 December
+2015, Mr. Meng Yan ceased to act as External Supervisor of the Bank due to expiration of the term of office.
+The Bank re-appointed Ms. Wang Chixi as Shareholder Supervisor of the Bank at the First Extraordinary General Meeting
+of 2015 on 23 January 2015, and her term of office took effect from the date of review and approval by the meeting. The
+Bank appointed Mr. Qian Wenhui as Shareholder Supervisor of the Bank at the 2014 Annual General Meeting on 19 June
+2015, and his term of office took effect from the date of review and approval by the meeting. The Bank appointed Mr. Qian
+Wenhui as Chairman of the Board of Supervisors of the Bank at a meeting of the Board of Supervisors. On 25 September
+2015, the Bank appointed Mr. Zhang Wei and Mr. Hui Ping as Employee Supervisors of the Bank at the Interim Employees'
+Congress, and their terms of office took effect from the date of review and approval by the Employees' Congress. On 21
+December 2015, the Bank appointed Mr. Qu Qiang as External Supervisor of the Bank at the Second Extraordinary General
+Meeting of 2015, and his term of office took effect from the date of review and approval by the meeting.
+Supervisors
+In March 2015, due to expiration of the term of office, Mr. Li Jun ceased to act as Non-executive Director of the Bank.
+In April 2015, due to expiration of the term of office, Mr. Wong Kwong Shing, Frank ceased to act as Independent Non-
+executive Director of the Bank. In October 2015, the Board of Directors of the Bank reviewed and approved the resignation
+of Mr. Yi Xiqun as Independent Non-executive Director due to work reasons, which will become effective upon approval by
+CBRC of the qualification of the new independent non-executive director.
+At the First Extraordinary General Meeting of 2014 held on 15 April 2014, Mr. Zhang Hongli was appointed as Executive
+Director of the Bank, and his qualification has been approved by CBRC in June 2015. At the First Extraordinary General
+Meeting of 2015 held on 23 January 2015, Mr. Jiang Jianqing was re-appointed as Executive Director of the Bank, and
+Ms. Wang Xiaoya and Ms. Ge Rongrong were appointed as Non-executive Directors of the Bank. Their terms of office took
+effect from the date of review and approval by the meeting. In addition, Mr. Zheng Fuqing was appointed as Non-executive
+Director of the Bank and his qualification was approved by CBRC in February 2015. Mr. Fei Zhoulin and Mr. Cheng Fengchao
+were appointed as Non-executive Directors of the Bank, and their qualifications were approved by CBRC in March 2015.
+Mr. Anthony Francis Neoh was appointed as Independent Non-executive Director of the Bank, and his qualification has been
+approved by CBRC in April 2015. At the Annual General Meeting for the Year of 2014 held on 19 June 2015, Mr. Wang
+Xiquan was appointed as Executive Director of the Bank, and his qualification has been approved by CBRC in June 2015;
+Mr. Or Ching Fai was re-appointed as Independent Non-executive Director of the Bank, and his new term of office took
+effect from the date of review and approval by the meeting. At the Second Extraordinary General Meeting of 2015 held
+on 21 December 2015, Mr. Hong Yongmiao was re-appointed as Independent Non-executive Director of the Bank, and his
+new term of office took effect from the date of review and approval by the meeting; Mr. Yang Siu Shun was appointed as
+Independent Non-executive Director of the Bank, and his qualification remains to be approved by CBRC.
+◆ Directors
+Appointment and Removal
+Directors, Supervisors, Senior Management, Employees and Institutions
+91
+Annual Report 2015
+◆ Senior Management
+to social
+insurance,
+housing
+allowance,
+annuities, and
+54.68
+9.88
+44.80
+Jiang Jianqing
+Li Mingtian
+(3)
+(2)
+(1)
+persons or not
+before tax
+Fee
+insurances
+(before tax)
+Name
+or other
+connected
+entities
+shareholder
+remuneration
+Total
+from
+Obtain
+remuneration
+medical
+additional
+None of the directors, supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been published by the securities regulator in the past three years.
+No
+Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Fu Zhongjun, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao were
+recommended by Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please
+refer to the section headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders — Interests
+and Short Positions Held by Substantial Shareholders and Other Persons" for further details.
+Wei Guoxiong, Chief Risk Officer
+Yi Xiqun, Independent Non-executive Director
+Mr. Hong has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+August 2012. Mr. Hong was previously in charge of the National Science Fund for Distinguished Overseas Young Scholars
+supported by the National Natural Science Foundation of China, and acted as President of the Chinese Economists Society
+in North America, and editor for journals such as Journal of Econometrics and Econometric Theory. He is currently an
+academician of the Academy of Sciences for the Developing World and a professor of Economics and International Studies at
+Cornell University in the United States. He has been enrolled as one of the first participants of the "Thousand Talents Plan"
+and serves as a lecture professor of the "Changjiang Scholars" launched by the Ministry of Education, Vice Chairman of
+the Steering Committee of Economics Teaching at Institutions of Higher Learning under the Ministry of Education and Dean
+of the School of Economics and the Wang Yanan Institute for Studies in Economics at Xiamen University. He is a part-time
+professor in some scientific and research institutions and colleges, including the Chinese Academy of Sciences. He is also an
+editorial board member of Economic Research Journal of the Chinese Academy of Social Sciences and an academic board
+member of China Economic Quarterly published by Peking University. Mr. Hong graduated from Xiamen University with a
+Bachelor of Science degree and a Master's degree in Economics, and obtained his Doctorate degree in Economics from the
+University of California San Diego.
+Hong Yongmiao, Independent Non-executive Director
+Directors, Supervisors, Senior Management, Employees and Institutions
+Overview of Corporate Governance
+During the reporting period, the Bank highlighted the improvement of corporate governance as a key move in responding to
+the challenges and opportunities under the new normal in economic development. The Bank accommodated to supervisory
+requirements on Global Systemically Important Banks, and constantly improved the structure, mechanism and culture of
+corporate governance, boosting the healthy and sustainable development of all businesses. There is neither any material
+divergence between actual corporate governance of the Bank and applicable regulatory documents regarding corporate
+governance issued by CSRC, nor any problem identified by regulatory authorities but remain unresolved in respect of
+corporate governance. During the reporting period, the Bank received various important domestic and overseas corporate
+governance awards, including the "Hong Kong Corporate Governance Excellence Award" by The Chamber of Hong Kong
+Listed Companies, the "The Asset Corporate Award ― Platinum Award" by The Asset and the "Citation for Corporate
+Governance Disclosure" by The Hong Kong Management Association.
+Annual Report 2015
+97
+Corporate Governance Report
+Construction of the Organizational Framework of Corporate Governance
+Mr. Yi has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+December 2013. He once served as Deputy General Manager of Beijing Second Light Industry Company, Deputy Director of
+Beijing Municipal Restructuring Economic System Office, Head of Xicheng District of Beijing, Assistant to Mayor of Beijing
+and concurrently Director of the Foreign Economy and Trade Committee, Director of Administrative Committee of Beijing
+Economic and Technological Development Zone, member of Chinese People's Political Consultative Committee Beijing
+Committee and Chairman of the board of directors of Beijing Holdings Limited. He had been the Chairman of the board
+of directors of Beijing Enterprises Holdings Limited, the Chairman of the board of directors of Beijing Enterprises Holdings
+Group Company Limited, the Chairman of the board of directors of Beijing Private Equity Investment & Development
+Fund Management Co., Ltd., the Chairman of Bowei Capital and an independent non-executive of China Merchants Bank
+and SOHO China Ltd. He concurrently acts as Vice President of China Association of Private Equity, an Independent Non-
+executive Director of China Merchants Securities Co., Ltd., Asian Capital Holdings Limited, and Zheshang Jinhui Trust Co.,
+Ltd. and a member of Entrepreneur Advisory Committee of Zhongguancun. He graduated from Tsinghua University and
+obtained a Master's degree in Economics Management Engineering.
+During the reporting period, the Bank appointed and renewed the appointments of some Directors and changed the
+chairman and members of some special committees of the Board of Directors to ensure the Board of Directors operate in
+compliance with laws and regulations. The Bank continued to improve the structure of the Board of Directors and further
+Igave play to the decision-making supporting role of the special committees of the Board of Directors. Besides, the Bank
+stepped up efforts to explore the Group's corporate governance, and perfected group management and control and
+collaboration mechanism as well as the corporate governance framework, institutional system and working mechanism of its
+subsidiaries.
+The Bank put the strategic decision-making role and corporate governance leading role of the Board of Directors into good
+use. Upholding scientific development and the acceleration of change in the mode of development, the Board of Directors
+focused on the reform of important fields and key links, constantly followed up the implementation of strategies, plans
+and decisions, and thoroughly studied objectives, missions and paths of transformation and development, ensuring the
+stable results growth of the Group. In addition, the Board of Directors kept improving corporate governance, consolidated
+enterprise risk management and internal control, stepped up information disclosure and managed investor relations in a
+more professional manner, and constantly strengthened its self-building.
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors continuously
+improved its working mechanism in accordance with the priorities of the Bank, specified the details and methods of its
+supervision over performance of the Board of Directors and the Senior Management and earnestly conducted the annual
+performance assessment. Financial supervision and supervision over risk management and internal control of the Bank
+were enhanced. The role of the Board of Supervisors which is key to corporate governance was effectively exerted, and this
+promoted the legal and compliant operation and healthy and stable development of the Bank.
+The Bank improved its enterprise risk management system comprehensively and amended the rules on consolidated
+management to enhance the consolidated management of the Group. Risk management of non-banking subsidiaries
+was strengthened, the risk assessment indictor system was revised, and prevention and control of credit risk during the
+economic downward cycle were highly valued. Moreover, the Bank continuously improved internal control and compliance
+management mechanism and raised its whole-process management capacity in regard to compliance risk and operational
+risk of the Group. As for audit work, the Bank implemented risk-oriented audit activities thoroughly and constantly
+promoted professional update. As for human resource management improvement, the Bank accelerated the human resource
+structure adjustment, enhanced human resource allocation efficiency and focused more on training and development of
+talents in key fields. As for social responsibility management reinforcement, the Bank explored work patterns to fulfill its
+social responsibilities given its own characteristics.
+The Bank continuously increased the level of transparency. The Bank proactively enhanced the management of group
+information disclosure and continuously enhanced voluntary information disclosure by adhering to the principle of
+"authenticity, accuracy, completeness, timeliness and fairness". Aiming at effectively safeguarding shareholders' right to
+information, the Bank explored in depth new paths to improve transparency. The Bank also improved its comprehensive
+investor relation management system, to reconcile the market value and inherent value of the Bank.
+Development of Corporate Governance Regulations
+During the reporting period, the Bank amended the Plan on Authorization of the Shareholders' General Meeting to the
+Board of Directors and the Plan on Authorization of the Board of Directors to the President based on the actual operational
+and developing needs.
+Compliance with the Corporate Governance Code
+During the reporting period, the Bank fully complied with the code provisions and the recommended best practices as
+stipulated in the Corporate Governance Code under Appendix 14 of the Hong Kong Listing Rules.
+98
+ICBC
+Construction of the Corporate Governance Mechanism
+Anthony Francis Neoh, Independent Non-executive Director
+Mr. Neoh has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+April 2015. He previously served as Chief Advisor to the CSRC, a member of the Basic Law Committee of the Hong Kong
+Special Administrative Region under the Standing Committee of the National People's Congress of People's Republic of
+China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the Technical Committee
+of the International Organization of Securities Commissions, a Non-executive Director of Global Digital Creations Holdings
+Limited. He was an Independent Non-executive Director of Link Management Limited, which is the Manager of Link Real
+Estate Investment Trust. He was also an Independent Non-executive Director of China Shenhua Energy Company Limited and
+Bank of China Limited. Mr. Neoh currently serves as a member of the International Consultation Committee of the CSRC,
+an Independent Non-executive Director of China Life Insurance Company Limited and CITIC Limited. He graduated from
+the University of London with a Bachelor's degree in Law. He was conferred the degree of Doctor of Laws. He is Honorary
+Doctorate of Law of Chinese University of Hong Kong and Open University of Hong Kong. He was elected Honorary Fellow
+of the Hong Kong Securities Institute and Academician of the International Euro-Asian Academy of Sciences. Mr. Neoh was
+appointed as Senior Counsel in Hong Kong. He is a barrister of England and Wales. He was admitted to the State Bar of
+California.
+Annual Report 2015
+Mr. Hu has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since November
+2015, and Board Secretary since December 2010. Mr. Hu joined ICBC in 1984, serving successively as Deputy General
+Manager of the Industrial and Commercial Credit Department, Deputy General Manager of the Credit Management
+Department, General Manager of the Institutional Banking Department, General Manager of the International Banking
+Department, President of Chinese Mercantile Bank and Chairman of Industrial and Commercial Bank of China Luxembourg
+S.A. Besides, he once served as Deputy Director-General of Construction and Administration Bureau of South-to-North
+Water Diversion Middle Route Project, as well as a Director of Taiping General Insurance Company Limited, Taiping Life
+Insurance Co., Ltd. and Xiamen International Bank. Currently, Mr. Hu is also General Manager of Corporate Strategy
+and Investor Relations Department of Industrial and Commercial Bank of China Limited. Mr. Hu graduated from Hunan
+University, and received a Doctorate degree in Economics from the Graduate School of the Chinese Academy of Social
+Sciences. He is a senior economist.
+Hu Hao, Senior Executive Vice President, Board Secretary
+Mr. Wang has served as Secretary of Party Discipline Committee of Industrial and Commercial Bank of China Limited
+since July 2015. He began his work career in 1987. Prior to joining ICBC, he once served as Director of Fund Supervision
+Department and Director of Securities and Fund Institution Supervision Department of CSRC. Mr. Wang graduated from
+Tsinghua University, and received a Doctorate degree in Management.
+Wang Lin, Secretary of Party Discipline Committee
+Mr. Wang has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since December
+2013. He joined China Development Bank in 1994 and served as Deputy Head of Harbin Branch, Deputy Director of the
+Human Resources Department of the Head Office, Head of Project Appraisal Department III of the Head Office, Head
+of Beijing Branch and Head of Human Resources Department of the Head Office. Mr. Wang graduated from Huazhong
+Agricultural University with a Bachelor's degree in Agronomy. He is a senior engineer.
+Wang Jingdong, Senior Executive Vice President
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+90
+Mr. Gu has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since October
+2013. He joined ICBC in 1998, where he served as Deputy General Manager of Accounting and Settlement Department,
+Deputy General Manager of the Planning and Finance Department, General Manager of Finance and Accounting
+Department, Board Secretary and General Manager of Corporate Strategy and Investor Relations Department and Head of
+Shandong Branch. Mr. Gu obtained a Doctorate degree in Economics from Shanghai University of Finance and Economics,
+Master's degree in Economics from Dongbei University of Finance and Economics and Bachelor's degree in Engineering from
+Shanghai Jiao Tong University. He is a senior accountant.
+Gu Shu, Senior Executive Vice President
+Mr. Hui has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since September 2015. He
+joined ICBC in 1984 and has served as Deputy Secretary of the Party Discipline Committee and concurrently as Director of
+the Discipline Enforcement Department since 2015. He was Deputy Head and Head of Shaanxi Branch and General Manager
+of the Internal Control and Compliance Department of ICBC. Mr. Hui graduated from Xiamen University and obtained a
+Doctorate degree in Finance. He is a senior economist.
+Hui Ping, Employee Supervisor
+Mr. Zhang has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since August 2006.
+He joined ICBC in 1994, and has served as General Manager of the Legal Affairs Department since 2004. Currently, he is
+also Vice Chairman of the Banking Law Research Institute, a council member of China Legal Aid Foundation and Executive
+Deputy Director of the Legal Work Committee of China Banking Association. He graduated from Peking University with a
+Doctorate degree in Law and is a research fellow.
+Zhang Wei, Employee Supervisor
+Mr. Qu has served as External Supervisor of Industrial and Commercial Bank of China Limited since December 2015.
+Currently, he is a professor and tutor to PhD students of Renmin University of China, Director of China Fiscal and Financial
+Policy Research Center, Deputy Director of Financial and Securities Institute, a council member of China Finance Society, a
+Member of China Finance 40 Forum and External Expert of China Development Bank. He was Head of the Applied Finance
+Department of Renmin University of China The School of Finance. Mr. Qu graduated from Renmin University of China, and
+received a Doctorate degree in Economics.
+Qu Qiang, External Supervisor
+Ms. Dong has served as External Supervisor of Industrial and Commercial Bank of China Limited since May 2009. She is
+now the External Supervisor of China Huarong Asset Management Co., Ltd. She previously served as Deputy Chief and
+Chief of the Foreign Trade Division of Commerce and Trade Department of MOF, Director-General of the Enterprise Affairs
+Department of the State Administration of State-owned Assets, Director-General of the Evaluation Department of MOF,
+Chairperson of the Board of Directors of Grandchina International Consulting Co., Ltd. and External Supervisor of China
+Cinda Asset Management Corporation. Ms. Dong graduated from Shanxi Finance and Economics Institute and from Dongbei
+University of Finance and Economics with a Master's degree in Economics. She is a PRC Certified Public Accountant (as a
+non-practising member).
+Dong Juan, External Supervisor
+Ms. Wang has served as Supervisor of Industrial and Commercial Bank of China Limited since October 2005. She was
+appointed as full-time Supervisor (at the rank of Director-General) and General Manager of the Supervisory Board Office of
+ICBC as designated by the State Council in 2003. She joined ICBC in 2005. Ms. Wang had taken several positions including
+Deputy Director-General of the Financial Audit Department of the National Audit Office, Deputy Director-General of the
+Agricultural, Forestry and Sea Products Audit Bureau of the National Audit Office and was appointed as full-time Supervisor
+(at the rank of Director-General) and General Manager of the Board of Supervisors' Office of Agricultural Bank of China as
+designated by the State Council. Ms. Wang graduated from Shenyang Agricultural College, and is a PRC Certified Public
+Accountant (as a non-practising member).
+Wang Chixi, Shareholder Supervisor
+Directors, Supervisors, Senior Management, Employees and Institutions
+89
+Mr. Wei has served as Chief Risk Officer of Industrial and Commercial Bank of China Limited since August 2006. He joined
+ICBC in 1987 and previously served in several positions at ICBC including Acting Head of Wenzhou Branch, Deputy Head
+of Zhejiang Branch and General Manager of the Industrial and Commercial Credit Department and the Credit Management
+Department of the Head Office. He graduated from Tianjin University of Finance and Economics, and received a Master's
+degree in Economics. He is a research fellow.
+Yi Huiman
+(4)(1)+(2) + (3)
+9.88
+9.88
+40.32
+1.25
+1.25
+No
+5.00
+5.00
+No
+0.78
+0.78
+50.20
+Wang Jingdong
+Hui Ping
+Zhang Wei
+Qu Qiang
+No
+44.80
+No
+94.59
+20.03
+74.56
+Wang Chixi
+Gu Shu
+40.32
+9.88
+50.20
+Zhao Lin
+Wong Kwong Shing, Frank
+Li Jun
+Directors, Supervisors and Senior Management Leaving Office
+No
+No
+No
+No
+No
+No
+222222
+98.37
+23.49
+74.88
+91.58
+22.31
+69.27
+21.14
+4.34
+16.80
+Wei Guoxiong
+Hu Hao
+Wang Lin
+Yes
+33.00
+Dong Juan
+Anthony Francis Neoh
+Fu Zhongjun
+Yes
+Ge Rongrong
+Yes
+33.00
+No
+50.20
+9.88
+40.32
+Wang Xiquan
+Zheng Fuqing
+No
+9.88
+40.32
+Zhang Hongli
+No
+45.65
+8.32
+37.33
+Qian Wenhui
+No
+54.68
+50.20
+Fei Zhoulin
+Wang Xiaoya
+Malcolm Christopher McCarthy
+Yes
+46.25
+46.25
+Yi Xiqun
+Yes
+Cheng Fengchao
+47.00
+47.00
+Hong Yongmiao
+47.00
+47.00
+Yes
+44.00
+Kenneth Patrick Chung
+Or Ching Fai
+Yes
+Yes
+Yes
+Yes
+43.00
+43.00
+Yes
+44.00
+Yes
+Special provisions on rights of preference shareholders
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis
+of the number of shares held by them; preference shareholders of the Bank enjoy precedence over ordinary shareholders in
+dividend distribution. Shareholders have other rights conferred by laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+Other rights
+In the following circumstances, preference shareholders have the right to attend the shareholders' general meeting and
+jointly vote with ordinary shareholders as of the date following the date on which the Shareholders' General Meeting
+approves the profit distribution plan for the given year not in accordance with the previous agreement: the Bank fails to pay
+dividends on preference shares for three accounting years accumulatively or two consecutive accounting years contrary to
+previous agreement. Where the dividend of the preference shares cannot be accumulated, the voting rights of preference
+shareholders of the Bank shall be recovered until the Bank pays the dividend in full amount for the given year.
+In the following circumstances, preference shareholders of the Bank have the right to attend the shareholders' general
+meeting and exercise voting rights: (1) amendment of contents of the Articles of Association relating to preference shares;
+(2) decrease of the registered capital of the Bank by more than 10% once or cumulatively; (3) merger, division and
+dissolution of the Bank or change of the Bank's corporate form; (4) issuance of preference shares; or (5) other circumstances
+of changing or abolishing rights of preference shareholders as specified by the Articles of Association. If any of the above
+circumstances occurs, the Bank shall notify preference shareholders of the convening of the shareholders' general meeting,
+and observe the procedure specified by the Articles of Association for notifying ordinary shareholders.
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, share capital documents and minutes of Shareholders' General Meetings, etc.
+Annual Report 2015
+Shareholders who hold more than 3% of shares of the Bank, either individually or jointly, may prepare an interim proposal
+and submit it in writing to the Board of Directors 10 days before the Shareholders' General Meeting is convened. The Board
+of Directors shall issue a supplementary notice for the Shareholders' General Meeting within 2 days upon receipt of the
+proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Submitting interim proposals for the shareholders' general meeting
+An extraordinary general meeting should be convened within 2 months from the date when shareholders holding more than
+10% of the voting shares of the Bank, either individually or jointly, request to convene in writing. Proposing shareholders
+shall have the right to request the board of directors in writing to convene an extraordinary general meeting of shareholders.
+The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting within 10
+days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles of Association of
+the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by themselves due to the
+failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted from the payment to
+those negligent directors.
+Proposing the convening of an extraordinary general meeting
+Corporate Governance Report
+Shareholders' Rights
+Putting forward suggestions or inquiries
+99
+If a shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share certificates
+and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the Bank. For
+contact details, please refer to "Corporate Information".
+Effective Communication with Shareholders
+4/4
+4/4
+Yi Xiqun
+3/3
+7/8
+2/2
+3/7
+2/4
+1/2
+4/4
+Anthony Francis Neoh
+2/2
+6/6
+4/5
+2/2
+2/3
+1/1
+Resigned Directors
+Li Jun
+3/3
+7/7
+4/4
+8/8
+4/4
+2/2
+Kenneth Patrick Chung
+3/3
+8/8
+7/7
+3/3
+2/2
+4/4
+1/1
+Or Ching Fai
+8/8
+4/4
+7/7
+1/1
+4/4
+2/2
+2/2
+Hong Yongmiao
+3/3
+3/3
+1/1
+1/1
+Wong Kwong Shing,
+Frank
+The Audit Committee reviewed financial statements of the Bank on a regular basis, and had reviewed and submitted
+to the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also
+organized and conducted the internal control assessment for 2014 of the Group and engaged external auditors
+to audit the assessment report and procedures of the Bank with respect to the relevant regulatory requirements.
+Additionally, it strengthened communication with external auditors, attached importance to the supervision of
+external auditors and heard several reports of external auditors concerning audit plan, audit results and management
+proposals.
+Annual Report 2015
+103
+Corporate Governance Report
+During the preparation and audit of the 2015 financial statements, the Audit Committee set out related matters such
+as audit schedule and arrangement through negotiation with external auditors, followed the status of external audit
+and conducted supervisions over relevant works at appropriate time by means of listening to reports and holding
+informal discussions, and reviewed the unaudited and preliminarily audited annual financial statements respectively.
+The Audit Committee held a meeting on 28 March 2016, and considered that the annual financial statements truly
+and completely reflected the financial position of the Bank. The Audit Committee reviewed the summary of audit work
+performed by external auditors during the year and made an overall and objective assessment on its performance and
+quality of practice. It also approved the renewal of the engagement of KPMG Huazhen LLP and KPMG as the external
+auditors of the Bank for 2016 and the engagement of KPMG Huazhen LLP as the internal control auditors of the Bank
+for 2016, and presented the proposals to the Board of Directors for consideration.
+•
+Examining internal control system
+The Audit Committee performed its function of examining the Bank's internal control system through reviewing
+the administrative rules and regulations and their implementation, and examined and assessed the compliance and
+effectiveness of major operating activities of the Bank. In addition, the Bank amended the Working Regulations for the
+Audit Committee of the Board of Directors, expanding the role of the Audit Committee in respect of the continuous
+supervision and examination of the internal control system of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing internal
+control and truthfully disclosing internal control assessment reports according to the standard system for enterprise
+internal control. The objective of the internal control of the Bank is to reasonably assure the compliance of its
+operation and management with relevant laws, safety of its assets, as well as the authenticity and completeness of its
+financial reports and relevant information, in order to enhance operation efficiency and results, and to facilitate the
+realization of its development strategy. Due to inherent limitation of internal control, only reasonable assurance can
+be provided for the aforementioned objectives. The Board of Directors and the Audit Committee have reviewed and
+approved the 2015 Internal Control Assessment Report of the Bank. For details of the Bank's internal control, please
+refer to "Corporate Governance Report ― Internal Control".
+Reviewing periodical reports
+Effectiveness of the internal audit function
+◆Risk Management Committee
+The Risk Management Committee is primarily responsible for reviewing and revising the strategy, policy and procedures
+of risk management and internal control process of the Bank, and supervising and evaluating the performance of Senior
+Management members and risk management department in respect of risk management. As at the disclosure date of this
+annual report, the Risk Management Committee of the Bank consisted of nine directors, including Executive Director Mr.
+Zhang Hongli; Independent Non-executive Directors Mr. Anthony Francis Neoh, Sir Malcolm Christopher McCarthy, Mr.
+Kenneth Patrick Chung and Mr. Hong Yongmiao; Non-executive Directors Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei
+Zhoulin and Mr. Cheng Fengchao. Independent Non-executive Director Mr. Anthony Francis Neoh was the chairman of the
+committee.
+104
+ICBC
+Corporate Governance Report
+Performance of the Risk Management Committee. During the reporting period, the Risk Management Committee held
+three meetings, considered four proposals including the risk management plan for 2015-2017, the liquidity risk management
+strategy for 2015, the country risk concentration limit for 2015-2016 and the management measures for stress test, and
+heard six reports including the risk management for 2014 and the first half of 2015. The Risk Management Committee put
+forward comments or suggestions on matters including the risk management plan, the enterprise risk management, the
+behavior risk management and the anti-money laundering of the Group.
+Examining the risk management system
+Under the enterprise risk management system structure of the Bank, the Risk Management Committee performed its
+function of examining the Bank's risk management system through reviewing and revising the Bank's risk strategy,
+risk management policy, risk appetite and the enterprise risk management structure, monitoring and evaluating the
+setup, mode of organization, work procedures and results of risk management departments, regularly assessing the
+risk appetite and the enterprise risk management status, supervising and assessing control activities conducted by
+the Senior Management members in terms of credit risk, market risk, operational risk and other risks. The Board of
+Directors and the Risk Management Committee listened to the report made by the Management on the Group's risk
+management every half year and examined the Bank's risk management and internal control system. In addition, the
+Bank amended the Working Regulations for the Risk Management Committee of the Board of Directors, expanding
+the role of the Risk Management Committee in respect of continuous supervision and examination of the risk
+management system of the Bank. For details of the Bank's risk management, please refer to the section headed
+"Discussion and Analysis Risk Management".
+◆ Nomination Committee
+The Bank has established a vertical and independent internal audit management system responsible and reporting to
+the Board of Directors. The Board of Directors regularly reviews the internal audit plan and hears internal audit reports
+on internal audit activities, audit supporting measures, internal audit team building, etc., thus effectively performing
+the function of risk management. The Audit Committee examines, monitors and assesses the internal audit work of
+the Bank, supervises the internal audit rules and their implementation, and makes assessment of audit procedures
+and results of internal audit departments. It is also responsible for urging the Bank to ensure adequate resources for
+internal audit departments and coordinating the communication between internal audit departments and external
+auditors. Internal audit departments of the Bank is accountable to and reports to the Board of Directors, is guided by
+the Board of Supervisors and is under the examination, supervision and assessment of the Audit Committee. For details
+of the Bank's internal control, please refer to "Corporate Governance Report ― Internal Control".
+3/3
+Performance of the Audit Committee. During the reporting period, the Audit Committee held seven meetings, considered
+11 proposals including the 2015-2017 internal audit development plan, the engagement of accounting firm for 2015 and
+the 2014 annual report and heard 12 reports including the internal audit report and the external audit work summary.
+The Audit Committee put forward comments or suggestions on matters including the internal audit development plan, the
+engagement of accounting firm and the arrangement of internal and external audit.
+◆ Audit Committee
+1/1
+2/2
+2/2
+2/2
+1/1
+1/1
+2/2
+Notes: (1)
+"Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+The Audit Committee is mainly responsible for supervising, inspecting and evaluating internal control, financial information
+and internal audit of the Bank and assessing mechanisms for the Bank's staff to report misconducts in financial statements,
+internal control, etc. and for the Bank to make independent and fair investigations and take appropriate actions. As at the
+disclosure date of this annual report, the Audit Committee of the Bank consisted of seven directors, including Independent
+Non-executive Directors Mr. Or Ching Fai, Mr. Kenneth Patrick Chung, Mr. Hong Yongmiao, Mr. Yi Xiqun and Mr. Anthony
+Francis Neoh; Non-executive Directors Mr. Fei Zhoulin and Mr. Cheng Fengchao. Independent Non-executive Director Mr. Or
+Ching Fai was the chairman of the committee.
+(2) Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+102
+ICBC
+Corporate Governance Report
+Special Committees of the Board of Directors
+The Board of Directors of the Bank has established six special committees, namely, the Strategy Committee, the Audit
+Committee, the Risk Management Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee. Except the Strategy Committee, chairmen of all the other committees were
+assumed by independent non-executive directors. More than half of the members of the Audit Committee, the Nomination
+Committee, the Compensation Committee and the Related Party Transactions Control Committee were independent non-
+executive directors. During the reporting period, the performance of duties by the special committees of the Board of
+Directors of the Bank is set out below:
+Strategy Committee
+The Strategy Committee is mainly responsible for considering the Bank's strategic development plan, business and
+institutional development plan, major investment and financing plan and other major matters critical to the Bank's
+development, making recommendations to the Board, and examining and assessing the soundness of the corporate
+governance framework to ensure financial reporting, risk management and internal control are compliant with corporate
+governance criteria of the Bank. As at the disclosure date of this annual report, the Strategy Committee of the Bank
+consisted of nine directors, including Executive Directors Mr. Jiang Jianqing and Mr. Yi Huiman; Independent Non-executive
+Directors Sir Malcolm Christopher McCarthy, Mr. Or Ching Fai, Mr. Hong Yongmiao and Mr. Yi Xiqun; Non-executive
+Directors Ms. Wang Xiaoya, Mr. Fu Zhongjun and Mr. Zheng Fuqing. Chairman of the Board of Directors Mr. Jiang Jianqing
+and Independent Non-executive Director Sir Malcolm Christopher McCarthy were the chairman and vice chairman of the
+committee, respectively.
+Annual Report 2015
+Performance of the Strategy Committee. During the reporting period, the Strategy Committee of the Board of Directors
+held four meetings, considered 9 proposals including the 2015-2017 strategic development planning and the green credit
+development strategy, and heard the reports on capital replenishment of the affiliates in 2015, merger and acquisition
+and equity investment and capital injection plan for institutions to be established. The Strategy Committee put forward
+comments or suggestions on matters including the strategic development planning, strategic capital allocation and major
+investment plan of the Bank.
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+4/4
+7/8
+3/3
+Shareholders'
+General
+Board of
+Directors
+Meeting
+Directors
+Strategy
+Committee
+Risk
+Audit Management
+Attendances in person/Number of meetings requiring attendance
+Special Committees of the Board of Directors
+Nomination Compensation
+Committee Committee Committee Committee
+Control
+Committee
+Executive Directors
+Jiang Jianqing
+3/3
+7/8
+4/4
+Yi Huiman
+3/3
+8/8
+Related Party
+Transactions
+4/4
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+101
+ICBC
+108
+As the day-to-day administrative organ of the Board of Supervisors, the Supervisory Board Office, as entrusted by the Board
+of Supervisors, is responsible for supervising and scrutinizing matters such as corporate governance, financial activities,
+risk management and internal control of the Bank, and organizing meetings of the Board of Supervisors and its special
+committee, preparing meeting documents, and taking minutes of the meetings.
+The Board of Supervisors discusses official matters at the meeting of the Board of Supervisors, which includes regular
+meetings and special meetings. Regular meetings shall be held at least four times a year and such meetings shall, in
+principle, be held before the disclosure of periodical reports.
+Operation of the Board of Supervisors
+As at the end of the reporting period, the Board of Supervisors of the Bank consisted of six members, including two
+Shareholder Supervisors, namely Mr. Qian Wenhui and Ms. Wang Chixi, two External Supervisors, namely Ms. Dong Juan
+and Mr. Qu Qiang, and two Employee Supervisors, namely Mr. Zhang Wei and Mr. Hui Ping.
+Composition of the Board of Supervisors
+Board of Supervisors and Special Committee
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting period,
+please refer to the Work Report of Independent Non-executive Directors for 2015 issued by the Bank on 30 March 2016.
+Corporate Governance Report
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of the
+Board of Directors and special committees of the Board of Directors.
+Independence and Performance of Duties of Independent Non-executive Directors
+During the reporting period, the Board Secretary of the Bank attended relevant specialized trainings, with the training hours
+over 15 hours, which meets relevant regulatory requirements.
+Training of Board Secretary
+Introduction trainings for newly-appointed directors of the Bank: Introduction to corporate governance and operation
+of the board of directors, businesses of the Bank, introduction to external regulatory requirements and matters to note
+during tenure of office, financial control system of international banks and differences between PRC GAAP and IFRSS, risk
+management practices of international financial holding groups.
+Special business trainings of the Bank: Hot issues of China's banking industry, latest development of IFRSS, green credit
+business, intellectualized transformation of outlets, institutional banking business, internet-based finance and e-commerce
+platforms, credit risk management;
+Corporate Governance Report
+107
+During the reporting period, the Board of Directors of the Bank held eight meetings, considered 58 proposals including the
+proposals on the 2014 Work Report of the Board of Directors, nomination of candidates for directors, appointment of senior
+executive vice president and engagement of accounting firm for 2015 and listened to 23 reports including the reports on the
+2015 Work Plan of the Board of Directors, the directors' performance assessment by the Board of Directors for 2014, risk
+management of the Bank and internal and external audits. For major proposals reviewed by the Board of Directors, please
+refer to the announcements of the Bank on the websites of SSE and SEHK or the website of the Bank.
+Annual Report 2015
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the Bank
+or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent Non-executive Directors and considered that they were independent.
+During the reporting period, the Bank's Independent Non-executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, gave independent opinions during consideration of issues, and provided
+recommendations on areas such as business development, significant decision-making, resource allocation, risk management
+and financial innovation of the Bank. During the adjournment, Independent Non-executive Directors of the Bank conducted
+on-site investigations in terms of operation and development of domestic and overseas institutions, financial innovation of
+free trade zone business, risk management and talent cultivation, etc. Additionally, they also proactively exchanged opinions
+with the Management during special-topic discussions. During the reporting period, the Bank's Independent Non-executive
+Directors put forward comments and suggestions in respect of operation and management and the implementation of
+the strategies of the Bank, such as improving the Group's corporate governance, dealing with interest rate liberalization,
+promoting transformation and innovation, continuously strengthening internal control and risk management, further
+improving the internationalized development strategy and effecting its implementation, etc. The Bank paid close attention to
+the comments and suggestions, and organized the implementation thereof according to the actual conditions.
+The Nomination Committee is mainly responsible for making recommendations to the Board of Directors on candidates
+for directors and Senior Management members, nominating candidates for chairmen and members of special committees
+of the Board of Directors, and formulating the standards and procedures for selection and appointment of directors
+and Senior Management members as well as the training and development plans for Senior Management members and
+key reserved talents. The Nomination Committee is also responsible for assessing the structure, size and composition of
+the Board of Directors on a yearly basis and making recommendations to the Board of Directors based on the Bank's
+development strategy. As at the disclosure date of this annual report, the Nomination Committee of the Bank consisted of
+eight directors, including Executive Director Mr. Yi Huiman; Independent Non-executive Directors Mr. Hong Yongmiao, Sir
+Malcolm Christopher McCarthy, Mr. Or Ching Fai, Mr. Yi Xiqun and Mr. Anthony Francis Neoh; Non-executive Directors
+Ms. Ge Rongrong and Mr. Fei Zhoulin. Independent Non-executive Director Mr. Hong Yongmiao was the chairman of the
+committee.
+4/4
+Zhang Hongli
+2/2
+7/7
+3/3
+3/3
+Fei Zhoulin
+2/2
+7/7
+5/6
+2/3
+Zheng Fuqing
+2/3
+2/2
+7/7
+6/6
+3/3
+Independent
+Non-executive
+Directors
+Malcolm Christopher
+McCarthy
+Cheng Fengchao
+2/2
+2/2
+8/8
+2/2
+4/4
+1/1
+Wang Xiquan
+1/1
+2/3
+2/2
+Non-executive Directors
+Wang Xiaoya
+4/4
+3/3
+4/4
+2/2
+Ge Rongrong
+3/3
+8/8
+2/3
+4/4
+Fu Zhongjun
+3/3
+8/8
+The Articles of Association of the Bank specifies methods and procedures to nominate directors. Please refer to Article 115
+of the Articles of Association of the Bank. During the reporting period, the Bank appointed and renewed the appointments
+of directors of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews
+the qualifications of candidates for directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+Committee shall pay attention to the complementarity in terms of expertise, professional competence and experience,
+cultural and educational background, gender, etc. of the candidates, to ensure the directors are well equipped, experienced
+and have diversified perspectives and views. In order to implement the requirement, the Nomination Committee assesses
+the improvement of diversified composition of the Board of Directors in addition to framework, number of directors and
+formation on a yearly basis, and discusses and designs measurable goals according to actual conditions. As at the disclosure
+date of this annual report, there were six Independent Non-executive Directors, accounting for more than one third of the
+total members of the Board of Directors; and there were two female Directors. The Bank attached importance on diversified
+sources and backgrounds of directors and continued the efforts to build a professional board, thus underpinning the
+effective operation and scientific decision-making of the Board of the Directors.
+Corporate Governance Report
+Annual Report 2015
+Trainings held by the regulatory institutions: Interpretation of corporate bonds policies, special training on Internet-
+based finance, special training on financial norms for listing companies;
+Meetings of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing directors. With diversified backgrounds, the
+Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed diversified perspectives and views, which ensured scientific decision-making of the Board of Directors. As
+at the disclosure date of this annual report, the Board of Directors of the Bank consisted of 16 directors, including four
+Executive Directors: Mr. Jiang Jianqing, Mr. Yi Huiman, Mr. Zhang Hongli and Mr. Wang Xiquan; six Non-executive Directors:
+Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Fu Zhongjun, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao; six
+Independent Non-executive Directors: Sir Malcolm Christopher McCarthy, Mr. Kenneth Patrick Chung, Mr. Or Ching Fai,
+Mr. Hong Yongmiao, Mr. Yi Xiqun and Mr. Anthony Francis Neoh. Mr. Jiang Jianqing was Chairman and Mr. Yi Huiman
+was Vice Chairman of the Board of Directors. All Executive Directors have worked in the areas of banking and management
+for a long time, possess extensive professional expertise and experience in those areas and are familiar with operation and
+management of the Bank. Most Non-executive Directors specialize in economic management and have rich management
+experience and good understanding of relevant policies and theories. The Independent Non-executive Directors are
+prestigious experts in the areas of economy, finance and audit, respectively, and most of them once worked at international
+institutions and are familiar with corporate finance and management. The number of Independent Non-executive Directors
+of the Bank accounted for more than one third of the total members of the Board of Directors, complying with relevant
+regulatory requirements.
+Composition of the Board of Directors
+Board of Directors and Special Committees
+ICBC
+100
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting of the Bank during the reporting period.
+During the reporting period, the Bank developed the training plan for the Board of Directors, increased training resources,
+and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors in continuing
+to improve their comprehensive quality and ability to perform their duties. During the reporting period, the Directors of the
+Bank complied with relevant regulatory requirements, and attended relevant trainings according to work needs. Besides,
+the Directors of the Bank enhanced their professional level by attending forums and seminars as well as conducting on-site
+investigations in some domestic and overseas peers and affiliates of the Bank. Subject matters of the trainings attended by
+the Directors of the Bank during the reporting period were mainly as follows:
+Implementation of Resolutions of the Shareholders General Meeting by the Board
+of Directors
+Shareholders' General Meeting
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the shareholders' general meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform
+of SSE, investor relations website, investor hotline and investor email and hotline, fax and email of the shareholders' general
+meetings of the Bank as well. For contact details, please refer to the section headed "Corporate Governance Report
+Investor Relations".
+Contacts
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+shareholders' general meetings of the Bank strictly complied with the relevant provisions of the Company Law and the
+Articles of Association of the Bank, ensuring that shareholders could exercise their right of participation in the shareholders'
+general meetings smoothly. Since it was listed, in order to treat A and H minority shareholders fairly, the Bank has held
+the Annual General Meeting in Beijing and Hong Kong concurrently by satellite and set up registration offices of A and
+H shareholders both in Beijing and Hong Kong to facilitate the voting of shareholders. The number of shareholders who
+participated in voting at the Annual General Meeting for the Year 2014 amounted to 3,410, up 35% compared to the
+previous year.
+Performance of the Nomination Committee. During the reporting period, the Nomination Committee held four
+meetings, considered seven proposals including the nomination of Mr. Wang Xiquan as a candidate for Executive Director,
+the nomination of Mr. Or Ching Fai, Mr. Hong Yongmiao and Mr. Yang Siu Shun as candidates for Independent Non-
+executive Directors, the appointment of Mr. Hu Hao as Senior Executive Vice President, and heard the report in respect of
+the composition of the Board of Directors in 2014. The Nomination Committee put forward comments or suggestions on
+matters including the building of the talent bank of independent directors, recommendation and nomination of candidates
+for directors and the assessment of the composition of the Board of Directors.
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results and domestic and overseas road shows and attending famous investment forums at home and abroad and
+delivering keynote speeches during the reporting period. The Bank gave full play to the communication platforms including
+investor interactive platform of SSE, investor relations website, investor hotline and investor email of the Bank, to understand
+investors' needs and provide sufficient information feedback in a timely manner.
+The Bank adhered to the principle of "authenticity, accuracy, completeness, timeliness and fairness" and the orientation
+of meeting investors' needs to continuously enhance the Group's information disclosure management and to improve
+the Bank's level of transparency, thereby effectively guaranteeing the right of all stakeholders including shareholders and
+customers to information.
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+During the reporting period, the Bank convened the First Extraordinary General Meeting of 2015 on 23 January 2015, the
+2014 Annual General Meeting on 19 June 2015 and the Second Extraordinary General Meeting of 2015 on 21 December
+2015. The aforementioned shareholders' general meetings were convened and held in strict compliance with relevant laws
+and regulations and the Articles of Association of the Bank. The Bank made announcements on the resolutions and disclosed
+legal opinions in a timely manner in accordance with regulatory requirements. For details of the above meetings, please refer
+to the announcements of the Bank on the websites of SSE and SEHK or the website of the Bank.
+Investigation and Training of Directors
+Corporate Governance Report
+Term of Directors
+105
+Corporate Governance Report
+◆ Compensation Committee
+The Compensation Committee is mainly responsible for formulating assessment measures on the performance of duties
+for directors, organizing the assessment on the performance of duties of Directors, putting forth proposal on remuneration
+distribution for Directors, putting forth proposal on remuneration distribution for Supervisors based on the performance
+assessment on Supervisors carried out by the Board of Supervisors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the performance and behaviors of Senior
+Management members. As at the disclosure date of this annual report, the Compensation Committee of the Bank consisted
+of eight directors, including Executive Director Mr. Yi Huiman; Independent Non-executive Directors Mr. Yi Xiqun, Sir
+Malcolm Christopher McCarthy, Mr. Kenneth Patrick Chung, Mr. Or Ching Fai and Mr. Anthony Francis Neoh; Non-executive
+Directors Ms. Wang Xiaoya and Mr. Fu Zhongjun. Independent Non-executive Director Mr. Yi Xiqun was the chairman of the
+committee.
+Performance of the Compensation Committee. During the reporting period, the Compensation Committee held two
+meetings, considered three proposals on the payment of remuneration to Directors, Supervisors and Senior Management
+members for 2014 and the 2015 performance evaluation plan for Senior Management members, etc., and heard the 2014
+assessment report on the performance of duties of the directors by the Board of Directors. The Compensation Committee
+put forward comments or suggestions on matters including improvement of performance standards assessment of directors.
+The Compensation Committee organized the performance assessment of directors, and put forth proposal on remuneration
+distribution for directors and submitted the same to the Shareholders' General Meeting after the approval of the Board
+of Directors. It also formulated and reviewed the assessment measures and compensation plans for Senior Management
+members of the Bank and evaluated the performance and behaviors of Senior Management members, results of which
+were submitted to the Board of Directors or the Shareholders' General Meeting, if falling into the responsibilities of the
+Shareholders' General Meeting, for approval. According to applicable regulations including the Measures on the Assessment
+of Performance of Duties of Directors in Commercial Banks (Trial) issued by CBRC, the Articles of Association and the Rules
+on the Assessment of Performance of Duties of Directors by the Board of Directors (Trial) of the Bank, the Compensation
+Committee organized the performance assessment of directors by the Board of Directors for 2014.
+◆ Related Party Transactions Control Committee
+The Related Party Transactions Control Committee is mainly responsible for identifying the Bank's related parties, reviewing
+major related party transactions, and receiving related party transaction statistics and reporting information of general
+related party transactions. As at the disclosure date of this annual report, the Related Party Transactions Control Committee
+of the Bank consisted of five directors, including Executive Director Mr. Wang Xiquan, Independent Non-executive Directors
+Mr. Kenneth Patrick Chung, Mr. Or Ching Fai, Mr. Hong Yongmiao and Mr. Yi Xiqun. Independent Non-executive Director
+Mr. Kenneth Patrick Chung was the chairman of the committee.
+The Bank has strictly complied with the exchanges on which the Bank is listed and the Articles of Association of the Bank
+that Directors are elected by the Shareholders' General Meeting with a term of three years, and the appointment shall take
+effect from the date of approval by CBRC. Directors may be re-appointed through re-election at the Shareholders' General
+Meeting after expiry of their term. The term for re-appointment is from the date of approval by the Shareholders' General
+Meeting.
+Performance of the Related Party Transactions Control Committee. During the reporting period, the Related Party
+Transactions Control Committee held four meetings, considered the proposals in respect of the identification of related
+parties of the Bank, and heard three reports on the related party transactions in 2014, the inside transactions management
+in 2014 and the identification of related parties of the Bank in 2014. The Related Party Transaction Control Committee put
+forward comments or suggestions on matters including the improvement of management of related party transactions and
+inside transactions of the Bank.
+Important Comments and Suggestions Put Forward by Special Committees of the Board of Directors
+During the reporting period, the Strategy Committee put forward comments or suggestions on matters including the
+strategic development planning, strategic capital allocation and major investment plans of the Bank. The Audit Committee
+put forward comments or suggestions on matters including the preparation of regular reports, the internal audit
+development plan and the engagement of accounting firm. The Risk Management Committee put forward comments
+or suggestions on matters including the risk management plan, the enterprise risk management, the behavior risk
+management, and anti-money laundering of the Group. The Nomination Committee put forward comments or suggestions
+on matters including the building of the talent bank of independent directors, recommendation and nomination of
+candidates for directors and the assessment of the composition of the Board of Directors. The Compensation Committee put
+106
+ICBC
+Corporate Governance Report
+forward comments or suggestions on matters including the assessment of performance standards of directors, the payment
+of remuneration to Directors, Supervisors and Senior Management members and the Senior Management performance
+evaluation plan. The Related Party Transaction Control Committee put forward comments or suggestions on matters
+including the identification of related parties and the improvement of management of related party transactions and inside
+transactions of the Bank.
+• Working Groups of Special Committees of the Board of Directors
+To effectively play the role of special committees of the Board of Directors in offering professional support to the Board of
+Directors, according to the working regulations for special committees, the Bank established a mechanism of working groups
+of special committees. The Board of Directors' Office led relevant departments of the Bank and set up working groups of
+special committees of the Board of Directors as decision-making support center, research supporting institution and regular
+communication bridge for special committees.
+The working groups of special committees of the Board of Directors are mainly responsible for, among others, assisting on
+the formulation of annual work plans of the Board of Directors and special committees; preparing for meetings of special
+committees of the Board of Directors; assisting special committee members to draft their research plans and carry out related
+researches; assisting special committees to communicate with the Management; and providing assistance in daily operation
+of special committees.
+During the reporting period, the working groups of the special committees assisted in the studies of special committees
+in respect of mid-term and long-term strategic planning, credit business, corporate governance framework, related party
+transactions management, etc., provided various services and supports to the daily performance of duties by special
+committees with the focus on the central works of the Board of Directors and the special committees. In this way, they
+enhanced the communication and exchange between the Directors, between the Directors and the Management and
+between branches, and helped the special committees better give play to their professional advantages.
+Responsibilities of Directors in Respect of Financial Statements
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2014 Annual Report,
+the First Quarterly Report, the Interim Report and the Third Quarterly Report of 2015 as scheduled.
+Beijing
+Office
+Li Mingtian
+Meng Yan
+5/5
+9/9
+(2) For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+5/6
+Notes: (1) During the reporting period, supervisors who could not attend the meetings of the Board of Supervisors and the Supervision
+Committee in person have appointed other supervisors to attend the meetings and exercise the voting right on their behalf.
+Annual Report 2015
+117
+3/3
+7/7
+6/6
+Dong Juan
+1/1
+Jiang Jianqing
+Chairman
+Report of the Board of Supervisors
+Meetings of the Board of Supervisors and its Special Committee
+Meetings of the Board of Supervisors
+During the reporting period, the Board of Supervisors held 10 meetings, reviewed and approved 26 proposals including
+the 2015 Annual Work Plan of the Board of Supervisors, the 2014 Work Report of the Board of Supervisors, the 2014
+Supervision Report of the Board of Supervisors, the 2014 Annual Report and its Abstract, and nomination of candidates for
+shareholder supervisor and external supervisor, and listened to 38 reports including the reports on supervision, operating
+results, internal audit for 2014 and internal audit plan for 2015, internal control and compliance, development and
+management of Internet-based finance business, performance appraisal and remuneration management.
+Meetings of the Supervision Committee
+During the reporting period, the Supervision Committee held six meetings, reviewed and approved 12 proposals including
+the 2015 Annual Work Plan of the Supervision Committee of the Board of Supervisors and the Implementation Plan on
+Supervision and Inspection of the Board of Supervisors for 2015, and heard 16 reports on supervision, special inspections
+and surveys, etc.
+The table below sets out the attendance of Supervisors in meetings of the Board of Supervisors and the meetings of the
+Supervision Committee in 2015:
+Attendances in person/Number of meetings that should be attended
+Supervisor
+Qian Wenhui
+Wang Chixi
+10/10
+Report of the Board of Supervisors
+Zhang Wei
+Hui Ping
+Resigned supervisor
+Zhao Lin
+Supervision Committee
+6/6
+6/6
+Board of Supervisors
+6/6
+10/10
+10/10
+Qu Qiang
+Work of the Board of Supervisors
+Senior Management
+Financial supervision. The Board of Supervisors reviewed regular reports in an earnest manner, strengthened financial
+compliance and authenticity supervision, heard reports on the preparation of annual and quarterly reports for four times,
+and made spot checks on financial income and expense accounting of branches pertinently to verify the authenticity of
+financial information. The Board of Supervisors strengthened supervision on operating conditions by hearing reports on
+operating results quarterly, monitoring and analyzing changes in financial data and indicators of domestic branches, overseas
+institutions and subsidiaries monthly, providing comments and suggestions and improving the overall management and
+profitability of the Group. The Board of Supervisors strengthened financial supervision in key fields by regularly supervising
+significant financial decisions and their implementation, focusing on compliance of authorization and approval processes and
+authenticity of accounting and surveying the effectiveness of financial resource allocation in order to boost effectiveness of
+financial resource allocation across the Bank. The Board of Supervisors strengthened communication with and supervision on
+external auditor by hearing reports on annual audit and quarterly reviews for four times, identifying focus areas of audit and
+strengthening supervision on the independence and effectiveness of audit.
+new era.
+The internal control environment has been optimized continuously. The Bank improved the fundamental regulations of
+corporate governance adhering to the guideline of the group integration. It formulated the Development Plan of the Internal
+Control System for 2015-2017, identifying the fundamental framework of the Group's internal control construction in the
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee, the Risk Management Committee and the Related Party
+Transactions Control Committee of the Board of Directors perform the responsibilities of internal control management
+and review the effectiveness of internal control. The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-
+bureau, which adopt a hierarchical management system and are responsible to and report to the Board of Directors. The
+Head Office and branches have internal control and compliance departments which are responsible for the bank-wide
+organization, promotion and coordination of internal control.
+Internal Control
+Corporate Governance Report
+109
+Annual Report 2015
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued
+to strengthen inside information confidentiality management, timely organized the completion of insider lists and regularly
+conducted insider transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be
+involved in dealings in shares of the Bank who have taken advantage of inside information during the reporting period.
+The enterprise risk management framework has been improved. The Bank completed the report on internal capital adequacy
+assessment process (ICAAP) and revised the risk appetite indicator system. It strengthened the construction of group risk
+system and implemented the new version of the consolidated management regulations. It updated the G-SIB recovery and
+resolution plan and completed the first self-evaluation on the resolution capability.
+Inside Information Management
+Powers and Functions of the Senior Management
+Mr. Yi Huiman is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+Mr. Jiang Jianqing is the Chairman and legal representative of the Bank, who is responsible for leading the Board of
+Directors in considering and formulating business development strategies, risk management, internal control and other
+significant matters of the Bank.
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be separated, and the Chairman shall not
+concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+Chairman and President
+Corporate Governance Report
+Supervision Committee
+As the special committee of the Board of Supervisors established pursuant to the Articles of Association of the Bank, the
+Supervision Committee operates in accordance with the authorization of the Board of Supervisors and is accountable to
+the Board of Supervisors. The Supervision Committee is mainly responsible for formulating plans for the inspection and
+supervision of financial activities of the Bank; formulating plans for the audits on retiring or resigning Directors, President
+and other Senior Management members; formulating plans for the audits on business policies, risk management and internal
+control of the Bank when necessary; providing comments after review of the financial report of the Bank and reporting to
+the Board of Supervisors; reviewing the investigation report on significant events in the annual operation and financial status
+of the Bank submitted by the Supervisory Board Office, and reporting to the Board of Supervisors; giving opinions on the
+performance assessment of directors and Senior Management members, and reporting to the Board of Supervisors; giving
+opinions on the assessment of the development and implementation of risk management and internal control system, and
+reporting to the Board of Supervisors; and other functions and duties as may be authorized by the Board of Supervisors.
+The Supervision Committee consists of four Supervisors, including Ms. Dong Juan, Ms. Wang Chixi, Mr. Zhang Wei and Mr.
+Qu Qiang. Ms. Dong Juan serves as the head member of the Supervision Committee. Daily operations of the Supervision
+Committee are conducted by the Supervisory Board Office.
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+The control activities became more effective. The Bank improved the business performance appraisal system and capital
+constraint mechanism, with a focus on the risk control and transformation and innovation orientation. It completed the
+reform that standardizes the operational management throughout outlets and launched the portfolio service process
+reform on a pilot basis. Besides, the Bank optimized the global credit line approval system and strengthened the credit risk
+monitoring and warning. It implemented the risk-oriented regulatory philosophy, advanced the domestic and overseas AML
+compliance management and conducted the evaluation on the AML risk of institutions, products and customers.
+Information communication has been further streamlined. The Bank established the new investor relationship disclosure
+regulations, optimized the social responsibility management evaluation system and constantly enhanced its information
+disclosure. Meanwhile, it constantly intensified its data management, improved the Group's information standardization,
+promoted the consistent management and application service of data bank and group information bank and carried out the
+big data and IT application strategy.
+The internal monitoring has remained effective. All business lines and internal control and compliance departments
+launched the supervision and inspection activities within the scope of their respective business and effectively fulfilled
+the responsibilities of the first and second lines of defense of internal control. Centering on the bank-wide reform and
+development strategy as well as central tasks, the internal audit departments conducted effective audit and supervision
+activities on bank-wide major risks, important systems and key business fields, provided constructive decisions and
+management suggestions from a systematic and strategic perspective, and paid attention to the follow-up of problem
+rectification. The Bank effectively fulfilled the responsibilities of the third line of defense of internal control.
+Internal Control Evaluation Report and Internal Control Audit
+Supervision on risk management. The Board of Directors adapted itself to changes in business environment, further
+deepened supervision on risk management, paid due attention to main risks and problems facing the Bank under the
+economic new normal and gave risk alerts against any potential, sign and tendency of problems while putting focus on
+supervision on asset quality. The Board of Supervisors strengthened supervision on the risk management system of the
+Group by regularly hearing reports on risk management supervision, reviewing risk management reports and focusing
+on improvements in the enterprise risk management framework and rules of the Bank, formulation of and compliance
+with risk appetite and limits and implementation of domestic and overseas financial regulatory requirements. Supervision
+on consolidated management was strengthened by conducting survey and research on consolidated management of the
+Group. The Board of Supervisors paid great attention to the Bank's credit risk management. Members of the Board of
+Supervisors conducted onsite survey and supervision on asset quality and operating conditions at a number of domestic and
+overseas branches and heard reports on risk management of loans issued since 2013 and collateral management. The Board
+of Supervisors paid due attention to the impact of capital market fluctuations on market risk of the Bank, strengthened
+supervision on risks in emerging businesses, conducted overseas RMB exposure management and surveys, heard reports on
+internet-based finance development and management and gave timely risk alerts.
+118
+ICBC
+Securities Transactions of Directors and Supervisors
+Board of Supervisors
+Internal Audit Bureau
+By Order of the Board of Directors
+Audit Committee
+Board of Directors
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Internal Audit
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+Corporate Governance Report
+ICBC
+110
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines,
+the Guidelines for Internal Control of Listed Companies issued by SSE and relevant regulatory requirements of CBRC. No
+material or significant deficiencies were detected in the Bank's internal control system during the assessment. Risks that may
+arise from ordinary deficiencies are controllable and corrective actions have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives of the Bank.
+Internal Control Evaluation and Defects
+For details of the internal control assessment report of the Bank, please refer to the 2015 Internal Control Assessment Report
+of Industrial and Commercial Bank of China Limited published on the websites of SSE, SEHK and the Bank.
+While disclosing the annual report, the Bank also disclosed the Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2015 (benchmark date). The Bank engaged
+KPMG Huazhen LLP to audit and issue standardized audit report on internal controls of the Bank.
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations of the State, regulatory
+requirements and the Articles of Association of the Bank, focused on the key tasks of the Bank, carried out supervision tasks
+in depth, did a large number of work and played an important role in promoting the Bank to continuously improve the
+corporate governance, implement the transformation and upgrading and achieve sound and sustainable development.
+Supervision on the performance of duties. Facing the new normal in economy and finance, the Board of Supervisors
+constantly deepened supervision on duty fulfillment, proactively made innovation and improvements in the supervision
+method on duty fulfillment, continuously enriched ways of communication with the Board of Directors and Senior
+Management, and conducted duty fulfillment supervision throughout financial activities, risk management, internal control
+and other supervision tasks. It strengthened its supervision on the implementation of national macroeconomic policies
+and compliance with regulatory requirements by the Board of Directors and the Senior Management as well as the
+formulation and implementation of development strategies, carefully studied the adjustment and implementation of major
+strategic decisions, carried out in-depth research, listened to reports on corporate governance, operational management
+and supervision, attended the meetings of the Board of Directors, its special committees and the Senior Management,
+and reviewed information on significant approval matters, to strengthen supervision on the implementation of the State's
+macro-policy, performance of responsibilities and execution of duty behaviors by the Board of Directors, the Senior
+Management and its members. Pursuant to regulatory requirements, the Board of Supervisors organized and launched
+the duty performance assessment, held interviews with members of the Board of Directors and Senior Management,
+business directors and the persons in charge of certain business departments and affiliates one by one, and reviewed the
+performance assessment report of the Board of Directors and the performance report of persons subject to the assessment.
+Upon appraisal and deliberation, the Board of Supervisors formulated its assessment report on the performance of
+the Board of Directors and the Senior Management and assessment opinions on the performance of directors and the
+Senior Management members. Chairman of the Board of Supervisors reported on the annual supervision of the Board of
+Supervisors at the meeting of the Board of Directors, and the Board of Supervisors reported to the Shareholders' General
+Meeting and regulatory authorities about the performance assessment results.
+ICBC
+Connected Transactions
+Independent Non-executive Directors: Sir Malcolm Christopher McCarthy, Mr. Kenneth Patrick Chung, Mr. Or Ching Fai, Mr.
+Hong Yongmiao, Mr. Yi Xiqun and Mr. Anthony Francis Neoh.
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+Postal code: 100140
+112
+ICBC
+Report of the Board of Directors
+Principal Business The principal business of the Bank and its subsidiaries is the provision of banking and related
+financial services. Please refer to the section headed "Discussion and Analysis" for the business review of the Bank.
+Profits and Dividends Distribution
+The profit and financial status of the Bank during the reporting period are presented in the Independent Auditor's Report
+and Financial Statements of the Annual Report.
+Upon the approval at the Annual General Meeting for the Year 2014 held on 19 June 2015, the Bank has distributed cash
+dividends of approximately RMB91,026 million, or RMB2.554 per ten shares (pre-tax), for the period from 1 January 2014 to
+31 December 2014 to the ordinary shareholders whose names appeared on the share register after the close of market on 6
+July 2015.
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.333 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2015, totaling RMB83,150 million. The distribution plan will be submitted for approval
+to the Annual General Meeting for the Year 2015. Once approved, the abovementioned dividends will be paid to the holders
+of A shares and H shares whose names appeared on the share register of the Bank after the close of market on 7 July 2016.
+Pursuant to relevant regulatory requirements and operational rules, dividends of A shares and H shares will be paid on 8 July
+2016 and 17 August 2016, respectively.
+The Bank had no plan for converting capital reserve to share capital in the recent three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the recent three years:
+Item
+Dividend per ten shares (pre-tax, in RMB yuan)
+Cash dividends (pre-tax, in RMB millions)
+2015
+2.333
+2014
+2.554
+2013
+2.617
+Investor Enquiries
+83,150
+In 2016, the Bank will further and proactively deepen the communication and exchange with investors to enhance the
+investors' understanding and acceptance of the Bank and protect legitimate interests of the investors, and at the same time
+expect to arouse more support from, and attention of, the investors.
+Overview of Investor Relations Activities in 2015
+Shenyang
+Office
+Tianjin
+Office
+Nanjing
+Office
+Shanghai
+Office
+Wuhan
+Office
+Xi'an
+Office
+Guangzhou Kunming
+Office
+Office
+Chengdu
+Office
+Primary reporting line
+Secondary reporting line
+During the reporting period, the Bank implemented risk-oriented audit activities according to the development strategy and
+central tasks of the Bank, and fully accomplished the annual audit plan. Attention was drawn to credit risk, operational risk,
+regional risk and financial innovation risk under the complicated operating circumstances as well as systematic and strategic
+risks in the process of diversified and internationalized development. The audit examined and assessed the effectiveness of
+risk management, internal control, key policies, procedures, system and operational control in major operating activities. The
+Bank also paid close heed to audit findings and made full use of relevant audit recommendations, with the aim of enhancing
+risk management and internal control of the Bank. Additionally, the Bank improved project operation process and the
+distribution of project resources, upgraded the audit information system platform, and strengthened the efforts in vocational
+qualification education and training before audit projects to build a more professional audit team. As a result, the quality
+and level of audit work was constantly enhanced.
+Engagement of Auditors
+The Annual General Meeting for the Year 2014 of the Bank reviewed and approved the Proposal on Launching the
+Engagement of Accounting Firm for 2015, engaging KPMG Huazhen LLP to be domestic auditors of the Bank for the
+financial statements audit in 2015, and KPMG was international auditors of the Bank for the financial statements audit in
+2015. KPMG Huazhen LLP was also auditors of internal control of the Bank in 2015.
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for three consecutive years (2013, 2014
+and 2015).
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB167 million for the audit
+of financial statements (including the audit of financial statements of subsidiaries and overseas branches), of which, RMB139
+million (including fee for internal control audit of RMB11.60 million) was paid by the Bank.
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as
+professional services and tax advisory services for the bonds issuance, issuance of domestic preference shares and asset
+securitization, and received RMB8.00 million for such professional non-audit services.
+Annual Report 2015
+111
+Corporate Governance Report
+Investor Relations
+In 2015, against the backdrop of increasing downward pressure of the economy, accelerating interest rate liberalization and
+fluctuating capital markets, the Bank strived to improve the quality of investor relations services and generate stable return
+to shareholders following the principle of serving investors in a proactive, detailed, efficient and interactive manner.
+The Bank established a comprehensive management system for investor relations across regions and types of investors, and
+further enhanced the awareness to serve the investors in a more detailed manner. The Bank made constant and extensive
+communication with institutional investors and minority investors through press conference in relation to periodic results,
+domestic and overseas non-transactional road shows, press conferences with large institutions, investor hotline, investor
+relations mailbox, investor relations website and the online platform of sseinfo.com, which enhanced investors' confidence
+in economic development of China and the operational transformation of the Bank and helped bring the market value in
+line with the long-term intrinsic value of the Bank. The Bank improved investor relations information collection and market
+information feedback transmission mechanism, strengthened dynamic monitoring of share price valuation, analyst reports
+and media public opinions, followed and analyzed spotlight issues of the capital market, and effectively enhanced the quality
+of communication with the investors. The Bank actively understood and solicited the opinions and suggestions of the capital
+market on the Bank, facilitated the timely reaction of the Management with the help of many operation and communication
+strategies, and minimized the influence of emergencies on the share price, so as to continuously strengthen the level of
+corporate governance and core values of the Bank.
+116
+30.3
+91,960
+Equity-linked Agreement There is neither any agreement to which the Bank is a party, any options to subscribe
+shares, nor any securities convertible to shares of the Bank that requires the Bank to issue shares. In addition, there is no
+securities offering holders the right to subscribe shares of the Bank. The employee participation plan and share option plan
+etc. meet the disclosure requirements of the Hong Kong Listing Rules.
+114
+ICBC
+Report of the Board of Directors
+Administration Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Directors' and Supervisors' Interests in Transactions, Agreements and Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Group.
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Bank or
+any other body corporate.
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and
+Supervisors As at 31 December 2015, Mr. Zhang Hongli, Executive Director and Senior Executive Vice President of
+the Bank, held 2,000 H shares of the Bank, and the spouse of Mr. Or Ching Fai, Independent Non-executive Director of the
+Bank, held 1,316,040 H shares of the Bank. Save as disclosed above, as at 31 December 2015, none of the Directors of the
+Bank had any interests or short positions in the shares, underlying shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and Futures Ordinance of Hong Kong) which have to be notified to the
+Bank and SEHK under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance of Hong Kong (including interests
+or short positions therein that they shall be deemed to have pursuant to such provisions of the Securities and Futures
+Ordinance of Hong Kong), or any interests or short positions which have to be recorded in the register under Section 352 of
+the Securities and Futures Ordinance of Hong Kong, or any interests or short positions which have to be notified to the Bank
+and SEHK pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to
+the Hong Kong Listing Rules.
+In 2015, the Bank carried out standardized management of the Group's connected transactions in strict accordance with the
+regulations of CBRC and CSRC as well as listing rules in Shanghai and Hong Kong, and further boosted the Group's refined
+management of connected transactions by improving the institutional system of connected transactions, optimizing the
+information management system for connected transactions, standardizing the approval authority for connected transactions
+and strengthening the management and study of connected transactions. During the reporting period, the Bank's connected
+transactions were conducted in compliance with applicable laws and regulations, and no connected transaction that
+impaired the interest of the Bank and small and medium-sized shareholders was found.
+During the reporting period, the Bank's connected transactions were conducted in accordance with ordinary commercial
+terms under conditions that were not more favorable than the similar transactions between non-related parties. The terms
+and conditions of the relevant transactions were reasonable and complied with the overall interests of the Bank and
+shareholders. The Bank's connected transactions conformed to the regulatory requirements of CBRC. Furthermore, the Bank
+had no connected transaction to be submitted to the Board of Directors or the Shareholders' General Meeting for review,
+and all connected transactions occurred complied with the Listing Rules of the Shanghai Stock Exchange and the Hong Kong
+Listing Rules on disclosure exemptions.
+Please refer to "Note 53. to the Financial Statements: Related Party Disclosures" for particulars on the related party
+transactions defined under the laws, regulations and accounting standards of China.
+Annual Report 2015
+115
+Report of the Board of Directors
+Liability Insurance of Directors, Supervisors and Senior Management
+Pursuant to the Articles of Association of the Bank, where conditions permit, the Bank may establish the professional liability
+insurance system of Directors, Supervisors and Senior Management members upon approval of the Shareholders' General
+Meeting. The Bank will use its own assets to compensate each Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the maximum extent permitted by laws and administrative regulations
+or within the scope not prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior
+Management members are otherwise proved to have failed to act honestly or in good faith during their duty performance.
+During the reporting period, the Bank renewed liability insurance for Directors, Supervisors and Senior Management
+members.
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank did not relate to one another with respect to finance, business, family, or other material
+relations required to be disclosed.
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved performance assessment system and incentive restriction mechanism. From the perspectives of economic benefit,
+risk cost control and social responsibilities, the Bank adopted a system composed of balanced scorecard-based indicators
+for management and duties allocation based indicators for individuals. The remuneration to the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors and other executives of the Bank has followed the
+State's policies relating to the remuneration reform on executives of central enterprises, which consists of basic annual
+remuneration, performance-based remuneration and incentive income linked to term appraisal. The remuneration to other
+Senior Management members and Shareholder Supervisors consist of basic annual remuneration and performance-based
+remuneration, and part of performance-based remuneration is paid in a deferred manner. The Bank has contributed to
+statutory retirement programs organized by Chinese governmental organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the employees of the Bank. Upon obtaining all applicable approvals,
+the Bank will implement a long-term incentive program. As at 31 December 2015, the Bank did not granted any share
+appreciation rights to any Director, Supervisor, Senior Management member, or other core business personnel designated by
+the Board of Directors.
+Members of the Board of Directors
+Executive Directors: Mr. Jiang Jianqing, Mr. Yi Huiman, Mr. Zhang Hongli and Mr. Wang Xiquan;
+Non-executive Directors: Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Fu Zhongjun, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr.
+Cheng Fengchao;
+For details on the use of funds raised from the issue of preference shares of the Bank, please refer to "Details of Changes in
+Share Capital and Shareholding of Substantial Shareholders - Particulars of Preference Shares".
+91,026
+33.0
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+Use of Proceeds from Fundraising Activities
+35.0
+Percentage of cash dividends (1) (%)
+Note: (1) Calculated by dividing cash dividends of ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+According to the terms in respect of dividend payment as agreed on the issuance proposal for offshore preference shares,
+the Bank totally paid approximately RMB2,331 million equivalent dividends of offshore preference shares. For details on
+the dividends of preference shares of the Bank, please refer to "Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders — Particulars of Preference Shares".
+Formulation and Implementation of Cash Dividend Policy
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile take account of the long-term interests of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be argued and proved in detail to form a written
+argumentative report for Independent Non-executive Directors to issue their opinions, and then the report will be submitted
+to the Shareholders' General Meeting for approval as a special resolution.
+The formulation and implementation of the Bank's cash dividend policy, which has been reviewed and approved by
+the Independent Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the
+requirements provided in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and
+proportion are clear and explicit, and the decision-making procedure and mechanism are complete. Minority shareholders
+can fully express their opinions and appeals, to completely safeguard their legitimate rights.
+Reserves Changes in the reserves as at the end of 2015 are set out in the "Consolidated Statement of Changes in
+Equity" of the financial statements.
+Annual Report 2015
+113
+Report of the Board of Directors
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2015 are set out in
+"Note 42 to the Financial Statements: Reserves" of this annual report.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2015 is set
+out in the section headed "Financial Highlights" of this annual report.
+Donations During the reporting period, the Group made external donations of RMB55,749.2 thousand in total.
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2015 are set out in the sections headed
+"Discussion and Analysis Business Overview Internationalized and Diversified Operation" and "Note 28. to the
+Financial Statements: Investments in Subsidiaries; Note 44. to the Financial Statements: Acquisition of subsidiaries" in this
+annual report respectively.
+Share Capital and Public Float
+Changes in the share capital of the Bank for the year ended 31 December 2015 are set out in "Note 40. to the Financial
+Statements: Share Capital".
+As at the latest practicable date before the publication of this annual report, the Bank has maintained the minimum public
+float of 23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the
+Bank.
+Purchase, Sale or Redemption of Securities For details on the redemption of ICBC Convertible Bonds, please
+refer to "Details of Changes in Share Capital and Shareholding of Substantial Shareholders — Conversion and Redemption
+of Convertible Bonds". Save as disclosed above, during the reporting period, neither the Bank nor any of its subsidiaries
+purchased, sold or redeemed any listed securities of the Bank.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding
+preemptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining
+approval of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public
+offering, issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods
+as allowed by applicable laws and administrative regulations or approved by relevant authorities.
+Major Customers In 2015, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank during the year.
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing growth of the Bank.
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries with all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the aforesaid codes of conduct during the
+year ended 31 December 2015.
+3.
+Other Assets
+17. Profit Attributable to Equity Holders
+53. Related Party Disclosures
+213
+of the Parent Company
+168
+54. Segment Information
+217
+18. Dividends
+168
+213
+55. Financial Instruments Risk Management
+19. Earnings Per Share
+168
+56. Fair Value of Financial Instruments
+256
+20. Cash and Balances with Central Banks
+169
+57. Other Important Matters
+265
+21. Due from Banks and Other
+222
+52. Fiduciary Activities
+167
+16. Income Tax Expense
+Cash Flow Statement
+210
+12. Operating Expenses
+162
+47. Transferred Financial Assets
+210
+13. Directors' and Supervisors' Emoluments
+163
+48. Share Appreciation Rights Plan
+211
+14. Five Highest Paid Individuals
+166
+49. Commitments and Contingent Liabilities
+211
+15. Impairment Losses on Assets Other than
+50. Designated Funds and Loans
+213
+Loans and Advances to Customers
+167
+51. Assets Pledged as Security
+213
+58. Company-Level Statement of
+Financial Institutions
+170
+Financial Position
+(Incorporated in the People's Republic of China with limited liability)
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank")
+and its subsidiaries (together, the "Group") set out on pages 129 to 267, which comprise the consolidated and Bank's
+statements of financial position as at 31 December 2015, the consolidated statement of profit or loss, the consolidated
+statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
+consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other
+explanatory information.
+Directors' responsibility for the consolidated financial statements
+The directors of the Bank are responsible for the preparation of consolidated financial statements that give a true and fair
+view in accordance with International Financial Reporting Standards and the disclosure requirements of the Hong Kong
+Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of
+consolidated financial statements that are free from material misstatement, whether due to fraud or error.
+Auditor's responsibility
+Our responsibility is to express an opinion on these consolidated financial statements based on our audit. This report is made
+solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other
+person for the contents of this report.
+Independent Auditor's
+L
+125
+Annual Report 2015
+Secondary reporting line
+Primary reporting line
+Overseas Center
+(1)
+Rural Banks
+(3)
+(89)
+Subsidiaries with Diversified
+Operation and their Branches
+Outlets
+(13,420)
+Tier-one Sub-branches
+(3,080)
+Overseas Subsidiaries
+and their Institutions
+(361)
+Overseas Branches
+and their Institutions
+(42)
+Tier-two Branches
+(409)
+To the shareholders of Industrial and Commercial Bank of China Limited
+162
+KPMG
+127
+266
+22. Financial Assets Held for Trading
+171
+59. After the Reporting Period Event
+267
+23. Financial Assets Designated at Fair Value
+60. Comparative Amounts
+267
+through Profit or Loss
+171
+61. Approval of the Consolidated
+24. Derivative Financial Instruments
+171
+Financial Statements
+267
+25. Reverse Repurchase Agreements
+176
+UNAUDITED SUPPLEMENTARY FINANCIAL
+INFORMATION
+268
+Annual Report 2015
+Independent Auditor's Report
+11. Other Operating Income, Net
+161
+46. Notes to the Consolidated
+136
+Statement of financial position
+Financial Liabilities Designated at
+Company:
+33.
+134
+Cash Flow Statement
+191
+39. Other Liabilities
+32.
+132
+Statement of changes in equity
+188
+Deferred Income Tax Assets and Liabilities
+31.
+131
+187
+30. Property and Equipment
+130
+Other Comprehensive Income
+Statement of financial position
+185
+Fair Value through Profit or Loss
+29. Investments in Associates and
+Joint Ventures
+192
+34. Due to Banks and Other Financial
+38. Debt Securities Issued
+156
+Estimates
+194
+37. Due to Customers
+Significant Accounting Judgements and
+4.
+193
+36. Certificates of Deposit
+139
+Summary of Significant Accounting Policies
+193
+35. Repurchase Agreements
+137
+Basis of Preparation
+2.
+193
+Institutions
+137
+Corporate Information
+1.
+NOTES TO FINANCIAL STATEMENTS
+Branches Directly Controlled
+by the Head Office
+(5)
+129
+183
+199
+7.
+Net Fee and Commission Income
+161
+42.
+Reserves
+202
+8.
+Net Trading Income
+161
+9.
+Net Loss on Financial Assets and Liabilities
+43. Components of Other Comprehensive Income 204
+44. Acquisition of Subsidiary
+205
+Designated at Fair Value through
+45. Involvement with Unconsolidated Structured
+Profit or Loss
+161
+Entities
+208
+10. Net Gain on Financial Investments
+Preference Shares
+Statement of Profit or Loss
+Statement of Profit or Loss and
+41.
+Net Interest Income
+28. Investments in Subsidiaries
+180
+27. Financial Investments
+177
+26. Loans and Advances to Customers
+128
+Consolidated:
+AUDITED FINANCIAL STATEMENTS
+INDEPENDENT AUDITOR'S REPORT
+Pages
+Pages
+CONTENTS
+Statements
+Report and Financial
+198
+International Financial Reporting Standards
+157
+40.
+Share Capital
+198
+6.
+160
+194
+(27)
+Tier-one
+Branches
+(31)
+November 2010/
+No specific term
+August 2010/
+No specific term
+Time and term of
+commitment
+October 2006/
+No specific term
+non-competition
+Type of
+commitment
+Commitment of
+Huijin
+Shareholder
+As at 31 December 2015, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Legal document
+under which
+the commitment
+Commitments
+121
+Annual Report 2015
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders or related parties of the Bank occupied any fund of the Bank. The auditors have
+issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related Parties of Industrial
+and Commercial Bank of China Limited in 2015.
+Entrusted Cash Asset Management During the reporting period, the Bank has not entrusted any other parties to
+manage cash assets.
+Hong Yongmiao, Yi Xiqun and Anthony Francis Neoh
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Malcolm Christopher McCarthy, Kenneth Patrick Chung, Or Ching Fai,
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies (Zheng Jian Fa [2003] No. 56) issued by CSRC
+and relevant provisions of SSE, we, in the capacity of Independent Non-executive Directors of the Bank, reviewed
+external guarantees of the Bank on the principles of fairness, impartiality and objectivity, and hereby give our specific
+explanation and opinions as follows: upon review, external guarantees provided by the Bank mainly focus on issuance
+of letters of guarantee, which is part of the ordinary banking services within the business scope of the Bank as
+approved by PBC and CBRC. As at 31 December 2015, the balance of letters of guarantee offered by the Bank totaled
+RMB343,643 million.
+Significant Events
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+is made
+Prospectus of
+Industrial and
+Commercial Bank
+of China Limited
+on Initial Public
+Offering (A Share)
+Prospectus on
+Issuance of the A
+Share Convertible
+Corporate Bonds
+of Industrial and
+Commercial Bank
+of China Limited
+Prospectus on A
+Share Rights Issue
+of Industrial and
+Commercial Bank
+of China Limited
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or
+the listing place of the Bank, Huijin
+I will not engage in or participate in any
+competitive commercial banking business
+including but not limited to granting
+loans, attracting deposits and providing
+settlement, fund custody, bank card
+and money exchange services. However,
+Huijin can engage in or participate in
+some competitive businesses by investing
+in other commercial banks. In this regard,
+Huijin has committed that it will (1) fairly
+treat the investments in commercial
+banks and will not make any decision or
+judgment that will have adverse impact
+on the Bank or be beneficial to other
+commercial banks by taking advantage
+of the status of being a shareholder of
+the Bank or information obtained by
+taking advantage of the status of being a
+shareholder of the Bank; and (2) perform
+the shareholders' rights for the maximum
+interests of the Bank.
+Nomination
+Committee
+Audit Committee
+Strategy
+Committee
+Risk
+Management
+Committee
+Board of Directors
+Board of Directors' Office
+Organizational Chart
+Banking Departments of
+Tier-one Branches
+Commitment
+Annual Report 2015
+On 5 January 2015, there were exceptions in the Bank's third-party custody system for securities funds, leading to slow
+transactions and missing of day-end reconciliation records. On March 26, 2015, CSRC issued the written decision on the
+administrative supervision measures, Decision on Ordering Industrial and Commercial Bank of China Limited to Correct
+Its Practices ([2015] No.36). The Bank paid high attention to the incident that occurred on January 5 and implemented
+correction measures rapidly. It improved the relevant technology systems and emergency processing flow and further
+optimized the system and flow based on the rectification requirements before the end of March. The Bank submitted the
+rectification report on May 6. In order to prevent such incident from happening again, the Bank further improved the
+monitoring and reconciliation mechanism for third party depositary business and made comprehensive inspection on relevant
+business systems in 2015. No such hidden danger was found.
+Investigations, Administrative Penalties by CSRC; Public Reprimand by Stock Exchanges;
+and Sanctions Imposed by Other Regulatory and Judicial Authorities During the Reporting
+Period
+Significant Events
+ICBC
+122
+Save as disclosed above, neither the bank nor any of its Directors, Supervisors and Senior Management members or other
+related parties made any commitments.
+In July 2015, the Bank received the notifications from MOF and Huijin, shareholders of the Bank, that during times of
+abnormal fluctuations in the stock market, MOF and Huijin would proactively perform their obligations as capital providers
+and undertake not to reduce their shareholdings in the Bank. Please refer to the Announcement Regarding Undertakings by
+the Ministry of Finance and Huijin not to Reduce Shareholding in the Bank issued by the Bank for detailed information.
+Fulfillment of
+commitment
+Properly fulfilled
+according to the
+commitment
+Save as disclosed above, during the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior
+Management members and controlling shareholders was subject to any investigation by competent authorities, coercive
+measures taken by judicial authorities or disciplinary inspection departments, transferred to judicial authorities or charged for
+criminal responsibility, case filing investigation or administrative penalty by CSRC, restricted access to market, identification
+as unqualified, major penalty by other administrative authorities of environmental protection, taxation, safety supervision,
+etc. or public reprimand by the stock exchanges.
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needed to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and CBRC.
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material subcontract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's material assets, which were subject to disclosure.
+Material Contracts and Performance of Obligations thereunder
+Preparation of Annual Report Preparation and review procedures of this annual report were in compliance with laws,
+administrative regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly,
+accurately and completely.
+Compliant Operation During the reporting period, the Bank continued to operate in compliance with applicable laws
+and regulations and improve its internal control system, and the decision-making procedures complied with applicable laws
+and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the Senior Management
+earnestly performed their duties. The Board of Supervisors did not find any violation of laws and regulations, or any act that
+contravened the interests of the Bank in the performance of duties during the reporting period.
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Supervision on internal control. Under the new normal, the Board of Supervisors focused its attention mainly on
+systematic, mechanical and institutional problems revealed in internal control. The Board of Supervisors strengthened
+supervision on the effectiveness of the internal control system, studied supervisory opinions of external regulators with due
+care, heard reports on the annual regulatory report of CBRC for 2014 and implementation by the Bank and the inspection
+for strengthening internal control and deterring illegal operations and delinquencies and surveyed effectiveness of the
+internal supervision system. The Board of Supervisors strengthened supervision on case prevention, paid great attention to
+case prevention of the Bank, kept abreast of the progress of major cases, significant incidents and negative information
+handling and attached importance to behavior risk management. The Board of Supervisors strengthened supervision on
+compliance and internal control of overseas and subsidiaries, heard reports on compliance of overseas institutions and
+surveyed risk management and internal control of selected overseas institutions and subsidiaries. The Board of Supervisors
+strengthened review of the report on annual internal control evaluation and heard the external auditor's report on internal
+control audit findings. The Board of Supervisors took the remediation of and accountability for supervisory inspection
+findings seriously and further strengthened guidance on internal audit, internal control and compliance.
+Strengthening the team building. During the reporting period, the Board of Supervisors revised, deliberated and
+approved the Supervisory Measures of the Board of Supervisors of Industrial and Commercial Bank of China Limited on the
+Board of Directors, the Senior Management and Their Members and the Rules on the Performance Assessment of Duties of
+the Board of Directors, the Senior Management and their Members by the Board of Supervisors of Industrial and Commercial
+Bank of China Limited, laying a solid institutional foundation for the Board of Supervisors to lawfully exercise the duty
+performance. It completed the rotation and selection of supervisors, organized and carried out the annual assessment
+on duty performance of supervisors. The members of the Board of Supervisors fulfilled their duties with due diligence,
+actively attended the meetings, earnestly deliberated the proposals, conducted in-depth surveys and studies and regularly
+participated in trainings to step up communication with peers and enhance performance capability constantly.
+Report of the Board of Supervisors
+We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply
+with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated
+financial statements are free from material misstatement.
+An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
+financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks
+of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
+assessments, the auditor considers internal control relevant to the entity's preparation of the consolidated financial
+statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but
+not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
+evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
+directors, as well as evaluating the overall presentation of the consolidated financial statements.
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
+Opinion
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Bank and
+of the Group as at 31 December 2015 and of the Group's financial performance and cash flows for the year then ended
+KPMG
+Certified Public Accountants
+8th Floor, Prince's Building
+10 Chater Road
+Central, Hong Kong
+30 March 2016
+128
+ICBC
+in accordance with International Financial Reporting Standards and have been properly prepared in compliance with the
+disclosure requirements of the Hong Kong Companies Ordinance.
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+act that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's purchase
+or sale of assets.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any act that infringed upon the interests of the Bank. The approval,
+voting, disclosure and implementation of connected transactions complied with applicable laws and regulations and the
+Articles of Association of the Bank.
+Implementation of Resolutions Passed at the Shareholders' General Meeting During the reporting period, the Board
+of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders' General
+Meeting for consideration. The Board of Directors earnestly implemented the resolutions approved at the Shareholders'
+General Meeting.
+Please refer to "Note 53. to the Financial Statements: Related Party Disclosures" for particulars on the related party
+transactions defined under the laws, regulations and accounting standards of China.
+During the reporting period, the Bank had not entered into any material related party transactions.
+Material Related Party Transactions
+Employee Stock Ownership Plan During the reporting period, the Bank did not implement any employee stock
+ownership plan.
+Significant Events
+ICBC
+120
+Implementation of Share Incentive Plan The Fourth Extraordinary General Meeting of 2006 of the Bank held
+on 31 July 2006 approved the share appreciation rights plan. As at the end of the reporting period, the Bank did not grant
+any share appreciation right. Please refer to "Note 48. to the Financial Statements: Share Appreciation Rights Plan" for
+details.
+Credit Standing During the reporting period, there has not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor has there been any outstanding debt of significant amount.
+Acquisition of Majority Stake in Tekstilbank On 29 April 2014, the Bank entered into a share purchase agreement to
+acquire 75.5% of the existing issued shares in Tekstilbank from GSD Holding A.Ş. of Turkey. This transaction was completed
+on 22 May 2015 (Beijing time) after obtaining approval from domestic and overseas regulatory authorities and complying
+with relevant preconditions for completion. According to the capital markets law of Turkey, this transaction triggered the
+provision that a mandatory tender offer shall be issued to purchase all the remaining shares of Tekstilbank that are traded on
+the Istanbul Stock Exchange. The Board of Directors of the Bank authorized the Bank to issue a mandatory tender offer for
+the remaining shares at a proper time. Upon the approval of relevant regulatory authorities, the Bank completed the tender
+offer and purchased additional shares of Tekstilbank with the total nominal value of TRY72,730,110.49 from 20 July 2015
+to 14 August 2015. After the tender offer, 92.8169% of the issued shares of Tekstilbank are held by the Bank. After going
+through relevant approval procedures of regulatory authorities, Tekstilbank was officially renamed ICBC Turkey Bank A.Ş..
+Termination of the Acquisition of 20% shares in Bank SinoPac On 2 April 2013, the Bank, SinoPac Financial Holdings
+Co., Ltd. ("SinoPac Holdings") and Bank SinoPac Co., Ltd. ("Bank SinoPac") entered into a share subscription agreement by
+the Bank of 20% shares of SinoPac Holdings or Bank SinoPac. On 27 February 2014 and 1 April 2015, the Bank, SinoPac
+Holdings and Bank SinoPac entered into two supplemental agreements to extend the transaction waiting period to 1
+October 2015. As at the end of the transaction waiting period, as the Cross-Strait Service Trade Agreement was still not
+passed by Taiwan, the limit of percentage of outstanding voting shares or capital held by a commercial bank from Mainland
+China in a Taiwan financial institution was not relaxed to 20%. The Bank, SinoPac Holdings and Bank SinoPac, upon
+consultation, unanimously agreed not to further extend the transaction waiting period. Termination of the acquisition of
+SinoPac Holdings or Bank SinoPac will not have a significant impact on the future operation of the Bank.
+Acquisition of 60% Shares in Standard Bank PLC On 29 January 2014, the Bank entered into a share purchase
+agreement to acquire 60% of the existing issued shares in Standard Bank PLC ("Target Bank") from Standard Bank London
+Holdings Limited ("SBLH"). In addition, the Bank also has a five-year option to acquire additional 20% of the existing
+issued shares of Target Bank exercisable from the second anniversary of the date that the transaction is completed (the
+"Call Option"). SBLH will have a put option, exercisable six months following the date on which the Bank's Call Option is
+exercised, to require the Bank to purchase all shares of the Target Bank that are held by SBLH and its related parties. This
+transaction was completed on 1 February 2015 (Beijing time) after obtaining approval from domestic and overseas regulatory
+authorities and complying with relevant preconditions for completion. The Bank officially became a controlling shareholder
+of the Target Bank. After going through relevant approval procedures of regulatory authorities, Standard Bank PLC was
+renamed ICBC Standard Bank PLC.
+Material Assets Acquisition, Sale and Merger
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank for recovering non-performing
+loans. In addition, some legal proceedings arose from customer disputes. As at 31 December 2015, the amount of pending
+proceedings which the Bank and/or its subsidiaries acted as defendants totaled RMB4,715 million. The Bank does not expect
+any material adverse effect from the abovementioned pending legal proceedings on the Bank's business, financial position or
+operating results.
+Significant Events
+119
+Annual Report 2015
+Save as disclosed above, the Board of Supervisors had no objection to other supervision matters during the reporting period.
+Implementation of Information Disclosure Management Rules During the reporting period, the Bank performed its
+duty of information disclosure in strict compliance with the regulatory policies, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed during the
+reporting period was authentic, accurate and complete.
+Internal Control Assessment Report of the Board of Directors The Board of Supervisors reviewed the 2015 Internal
+Control Assessment Report of the Board of Directors and had no objection to the report.
+Compensation
+Committee
+Related Party
+Transactions Control
+Committee
+123
+Internal Audit Bureau
+Production Research
+Documents Center
+International
+Settlement
+E-banking Center
+of Financial Managers
+Hangzhou Institute
+Changchun Institute
+of Financial Managers
+Data Center
+(Shanghai)
+& Development
+Center
+Data Center (Beijing)
+Department
+Pension Business
+Special Financing
+Department
+(Banking Department)
+Precious Metal
+Business Department
+Investment Banking
+Department
+Private Banking
+Department
+ICBC Bills Discounting
+Department
+Asset Custody
+Department
+Internal Audit
+Sub-bureau
+124
+ICBC
+Organizational Chart
+Overseas Institutions
+Operational Risk
+Management Committee
+Market Risk Management
+Committee
+Credit Risk Management
+Committee
+Domestic Institutions
+Risk Management
+Committee
+Credit Approval
+Committee
+Domestic Subsidiaries
+and their Branches
+Domestic Branches
+Product Innovation
+Management Committee
+Business and
+Information Technology
+Approval Committee
+Management Committee Management Committee
+Information Technology
+Asset & Liability
+Financial Approval
+Committee
+Supervision
+Committee
+Supervisory Board Office
+Board of Supervisors
+Asset Management
+Department
+Global Market
+Department
+Software
+Development Center
+Staff Union Working
+Institutional Banking
+Department
+Personal Banking
+Department
+Banking
+Department
+Directly
+Controlled
+Institutions
+Profitability
+Units
+Senior Management
+Shareholders'
+General Meeting
+Committee
+Settlement & Cash
+Management
+Department
+Executive Office
+Corporate
+Supporting
+Departments
+Departments
+Administration
+Comprehensive
+Risk
+Management
+Departments
+Marketing
+Management
+Departments
+Head Office Departments, Profitability Units and
+Directly Controlled Institutions of the Head Office
+Credit and Investment
+Bank Card
+Department
+(ICBC Peony Card
+Center, Consumer
+Credit Finance Center)
+IT Department
+Management
+Department
+E-banking Department
+Retired Staff
+Management
+Department
+Security Department
+Discipline
+Enforcement
+Department
+Urban Finance
+Research Institute
+Information
+Management
+Department
+Corporate
+Culture
+Department
+Management
+Department
+Product Innovation
+Operation
+Management
+Department
+International
+Banking
+Department
+5. Impact of Issued but not yet Effective
+Corporate Strategy and
+Investor Relations
+Department
+Asset & Liability
+Management
+Department
+Human Resources
+Department
+Finance & Accounting
+Department
+Department (Consumer
+Protection Office)
+Legal Affairs
+Internal Control &
+Compliance
+Department
+Risk Management
+Department
+Credit Approval
+Department
+Channel
+Management
+Department
+Derivative financial assets
+24
+33,290
+792,876
+Reverse repurchase agreements
+25
+310,398
+22,292
+206,282
+22
+Financial assets designated at fair value through profit or loss
+32,865
+115,950
+Financial assets held for trading
+737,740
+772,568
+21
+3,473,327
+23
+2,991,619
+34,549
+22
+288,658
+1,218,547
+Net cash flows from operating activities before tax
+1,468,633
+1,960,343
+130,182
+896,426
+920,197
+688,632
+Other liabilities
+Due to customers
+43,147
+1,136
+Certificates of deposit
+81,653
+Income tax paid
+(43,766)
+Net cash flows from operating activities
+(87,201)
+(other than repossessed assets)
+Proceeds from disposal of property and equipment and other assets
+Purchases of property and equipment and other assets
+CASH FLOWS FROM INVESTING ACTIVITIES
+2014
+2015
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2015
+Consolidated Cash Flow Statement
+ICBC
+134
+The notes on pages 137 to 267 form part of these financial statements.
+201,457
+1,131,764
+(86,783)
+Purchases of financial investments
+Repurchase agreements
+703,298
+35,022
+103,856
+Financial assets designated at fair value through profit or loss
+(6,047)
+(98,020)
+Financial assets held for trading
+3,069
+(91,173)
+Due from banks and other financial institutions
+(223,291)
+442,973
+Due from central banks
+Net decrease/(increase) in operating assets:
+450,090
+468,671
+Reverse repurchase agreements
+260,411
+130,224
+Loans and advances to customers
+Due to banks and other financial institutions
+(93)
+(421)
+Due to central banks
+33,136
+(284,962)
+Financial liabilities designated at fair value through profit or loss
+Net (decrease)/increase in operating liabilities:
+(1,630,065)
+(1,210,467)
+(143,088)
+(774,096)
+Other assets
+(1,121,840)
+(924,231)
+(173,890)
+20
+Proceeds from sale and redemption of financial investments
+(53,957)
+994,264
+1,441,298
+46
+8,490
+18,963
+957,402
+994,264
+28,372
+428,071
+(26,344)
+(36,732)
+(8)
+(8)
+(2,331)
+(91,960)
+864,899
+(91,026)
+836,797
+(315,230)
+Due from banks and other financial institutions
+Cash and balances with central banks
+TOTAL ASSETS
+Other assets
+Deferred income tax assets
+Property and equipment
+31 December 2015 31 December 2014
+Notes
+ASSETS
+(In RMB millions, unless otherwise stated)
+31 December 2015
+Statement of Financial Position
+135
+Annual Report 2015
+The notes on pages 137 to 267 form part of these financial statements.
+(338,014)
+(42,297)
+(374)
+(94,205)
+Proceeds from issue of preference shares
+CASH FLOWS FROM FINANCING ACTIVITIES
+(146,741)
+(666,961)
+1,145
+1,094
+(324)
+(158)
+Net cash flows from investing activities
+Dividends received
+Investments in associates and joint ventures
+1,011,771
+1,378,079
+3,802
+(1,109,178)
+3,481
+(2,007,160)
+45,000
+(54,594)
+259,213
+323
+(11,278)
+(10,325)
+Interest paid
+NET INCREASE IN CASH AND CASH EQUIVALENTS
+Cash and cash equivalents at beginning of the year
+Effect of exchange rate changes on cash and cash equivalents
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+Net cash flows from financing activities
+Dividends paid to non-controlling shareholders
+Dividends paid on preference shares
+Dividends paid on ordinary shares
+Acquisition of non-controlling interests
+Repayment of other debt securities
+Interest paid on debt securities
+95,554
+116,214
+Proceeds from issuance of debt securities
+1,393
+Capital injection by non-controlling shareholders
+Loans and advances to customers
+Year ended 31 December 2015
+11,026,476
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+2. BASIS OF PREPARATION
+(1) Statement of compliance
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+(2) Basis of preparation
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial
+instruments, financial assets and liabilities held for trading, financial assets and liabilities designated at fair value through
+profit or loss and available-for-sale financial assets (unless the fair value cannot be reliably measured) that have been
+measured at fair value, as further explained in the respective accounting policies below.
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4.
+Annual Report 2015
+137
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(3) Change in accounting policies
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS")) that are
+effective in 2015 and relevant to the Group's operation.
+Amendments to IAS 19 Employee benefits "Defined benefit plans: Employee contributions"
+Annual Improvements to IFRSS 2010-2012 Cycle
+Annual Improvements to IFRSS 2011-2013 Cycle
+The Bank's A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong
+Limited and the stock codes are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on the
+Stock Exchange of Hong Kong Limited and the stock codes are 4603, 4604 and 84602, respectively. The Bank's domestic
+preference shares are listed on the Shanghai Stock Exchange and the stock code is 360011.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking Regulatory Commission (the "CBRC")
+of the PRC. The Bank obtained its business license No. 100000000003965 from the State Administration for Industry and
+Commerce of the PRC. The legal representative is Jiang Jianqing and the registered office is located at No. 55 Fuxingmennei
+Avenue, Xicheng District, Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring.
+1. CORPORATE INFORMATION
+729,783
+610,647
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+1,761,746
+21,046,946
+1,512,861
+19,553,715
+Jiang Jianqing
+The principal effects of adopting these amended IFRSS are as follows:
+Chairman
+Vice Chairman and President
+The notes on pages 137 to 267 form part of these financial statements.
+136
+ICBC
+Liu Yagan
+General Manager of Finance
+and Accounting Department
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Yi Huiman
+Amendments to IAS 19 Employee benefits "Defined benefit plans: Employee contributions"
+The amendments introduce a relief to reduce the complexity of accounting for certain contributions from employees or third
+parties under defined benefit plans. When the contributions are eligible for the practical expedient (by meeting the criteria
+set out in the amendments), a company is permitted (but not required) to recognise the contributions as a reduction of the
+service cost in the period in which the related service is rendered, instead of including them in calculating the defined benefit
+obligation.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+7
+493,522
+507,867
+9
+(356,357)
+(363,912)
+6
+849,879
+161,670
+871,779
+Fee and commission income
+NET INTEREST INCOME
+Interest expense
+Interest income
+2014
+2015
+Notes
+(In RMB millions, unless otherwise stated)
+6
+42
+146,678
+7
+Annual Improvements to IFRSS 2010-2012 Cycle and 2011-2013 Cycle
+The 2010-2012 cycle of annual improvement contains amendments to seven standards with consequential amendments to
+other standards and interpretations including IFRS 2 Share based payment, IFRS 3 Business combinations, IFRS 8 Operating
+segments, IFRS 13 Fair value measurement, IAS 24 Related party disclosures, IAS 16 Property, plant and equipment and IAS
+38 Intangible assets.
+The 2011-2013 cycle of annual improvement contains amendments to four standards with consequential amendments to
+other standards and interpretations including IFRS 1 First-time adoption of International Financial Reporting Standards, IFRS 3
+Business combinations, IFRS 13 Fair value measurement, IAS 40 Investment property.
+The adoption of these annual improvements does not have any material impact on the financial position and the financial
+result of the Group.
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretation and
+amendments.
+138
+ICBC
+(177)
+Fee and commission expense
+1,745
+8
+Net trading income
+132,497
+143,391
+7
+NET FEE AND COMMISSION INCOME
+(14,181)
+(18,279)
+4,227
+26
+Retained profits
+596,181
+310,036
+21,046,946
+19,553,715
+LIABILITIES
+Due to central banks
+Financial liabilities designated at fair value through profit or loss
+33
+297,414
+226
+589,217
+Derivative financial liabilities
+24
+33,144
+22,324
+Due to banks and other financial institutions
+34
+2,103,289
+1,393,280
+371,556
+Consolidated Statement of Profit or Loss
+32
+23,899
+10,184,215
+Financial investments
+Investments in subsidiaries
+Investments in associates
+27
+4,450,998
+3,958,201
+28
+Repurchase agreements
+101,066
+29
+34,242
+34,242
+30
+129,669
+126,868
+31
+20,354
+80,419
+35
+130,830
+161,718
+18,040,854
+Share capital
+40
+40
+356,407
+353,495
+Other equity instrument
+79,375
+19,285,200
+34,428
+41
+79,375
+34,428
+Equity component of convertible bonds
+38
+388
+Reserves
+42
+Including: Preference shares
+513,903
+409,618
+39
+Certificates of deposit
+36
+150,113
+137,109
+Due to customers
+37
+15,781,673
+15,024,101
+486,426
+Income tax payable
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+62,136
+59,571
+38
+240,175
+243,690
+Debt securities issued
+(155)
+share equity convertible
+Dividend income
+337,191
+380,957
+Certificates of deposit
+36
+183,352
+176,248
+Due to customers
+37
+16,281,939
+15,556,601
+Income tax payable
+Deferred income tax liabilities
+31
+63,266
+995
+60,666
+451
+Debt securities issued
+Equity component of convertible bonds
+Other equity instrument
+Share capital
+Equity attributable to equity holders of the parent company
+EQUITY
+19,072,649
+35
+20,409,261
+279,590
+464,690
+589,073
+39
+Other liabilities
+306,622
+38
+TOTAL LIABILITIES
+Repurchase agreements
+1,539,239
+631
+589,385
+24,191
+24,758
+21,066
+31
+Deferred income tax assets
+199,280
+224,426
+Other assets
+30
+28,919
+24,185
+29
+Investments in associates and joint ventures
+4,086,409
+4,666,691
+Property and equipment
+Reserves
+32
+356,101
+76,826
+2,265,860
+34
+Due to banks and other financial institutions
+24
+Derivative financial liabilities
+303,927
+458,699
+33
+210
+Due to central banks
+LIABILITIES
+20,609,953
+22,209,780
+TOTAL ASSETS
+Financial liabilities designated at fair value through profit or loss
+27
+Including: Preference shares
+Non-controlling interests
+component
+Foreign
+Issued
+Other
+of
+Investment
+currency
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+Capital
+Surplus
+General revaluation translation
+Cash flow
+hedging Other
+Non-
+Retained
+controlling
+Total
+Balance as at 1 January 2015
+221,622
+150,752
+144,424
+388
+Total interests equity
+Subtotal profits
+Equity
+reserves
+reserve
+reserve
+reserve
+reserve
+reserve
+capital instrument bonds
+353,495 34,428
+reserve
+Reserves
+Attributable to equity holders of the parent company
+(In RMB millions, unless otherwise stated)
+42
+388
+38
+34,428
+79,375
+41
+571,704
+34,428
+353,495
+356,407
+40
+40
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+79,375
+Retained profits
+492,312
+650,236
+Year ended 31 December 2015
+Consolidated Statement of Changes in Equity
+131
+Annual Report 2015
+General Manager of Finance
+and Accounting Department
+Liu Yagan
+781,988
+The notes on pages 137 to 267 form part of these financial statements.
+Yi Huiman
+Jiang Jianqing
+Chairman
+20,609,953
+6,445
+1,537,304
+1,530,859
+1,789,474
+11,045
+1,800,519
+22,209,780
+Vice Chairman and President
+4,809
+Financial investments
+11,652,812
+2,330
+2,157
+363,235
+361,612
+16
+(85,515)
+(85,326)
+277,720
+276,286
+277,131
+589
+277,720
+275,811
+475
+276,286
+EARNINGS PER SHARE
+Basic (RMB yuan)
+_
+Diluted (RMB yuan)
+19
+Other comprehensive income:
+Profit for the year
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2015
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+129
+359,455
+Annual Report 2015
+Details of the dividends declared and paid or proposed are disclosed in note 18 to the financial statements.
+0.78
+0.77
+19
+0.78
+0.77
+The notes on pages 137 to 267 form part of these financial statements.
+360,905
+(462)
+(971)
+634,858
+668,733
+Operating expenses
+OPERATING INCOME
+15,315
+14,281
+12
+11
+1,803
+4,920
+10
+Net gain on financial investments
+(10,024)
+(5,953)
+Other operating income, net
+(after tax, net)
+(220,835)
+Impairment losses on:
+15
+(56,267)
+(86,022)
+26
+Non-controlling interests
+Equity holders of the parent company
+(218,674)
+Attributable to:
+Income tax expense
+PROFIT BEFORE TAXATION
+Share of profits of associates and joint ventures
+OPERATING PROFIT
+Others
+Loans and advances to customers
+PROFIT FOR THE YEAR
+10,768,750
+Items that will not be reclassified to profit or loss:
+Notes
+31 December 2015
+(In RMB millions, unless otherwise stated)
+ASSETS
+Notes
+31 December 2015 31 December 2014
+Cash and balances with central banks
+20
+3,059,633
+3,523,622
+Due from banks and other financial institutions
+21
+683,793
+782,776
+Financial assets held for trading
+22
+132,838
+34,373
+26
+Loans and advances to customers
+468,462
+996,333
+25
+Reverse repurchase agreements
+Consolidated Statement of Financial Position
+24,048
+24
+Derivative financial assets
+312,455
+210,434
+23
+Financial assets designated at fair value through profit or loss
+78,870
+308,853
+731
+1,101
+298,125
+reclassified subsequently to profit or loss
+accounted for using equity method which will be
+Share of the other comprehensive income of the investee
+110
+(88)
+Effective hedging portion of gains or losses arising from
+cash flow hedging instruments
+156
+34,550
+Items that may be reclassified subsequently to profit or loss:
+Net gain from change in fair value of available-for-sale
+financial assets
+(8)
+43
+2014
+276,286
+277,720
+2015
+25,745
+Share of the other comprehensive income of the investee
+accounted for using equity method which will not be
+reclassified subsequently to profit or loss
+80
+(5,400)
+308,122
+297,024
+ICBC
+130
+The notes on pages 137 to 267 form part of these financial statements.
+Equity holders of the parent company
+Non-controlling interests
+Foreign currency translation differences
+Total comprehensive income attributable to:
+298,125
+Total comprehensive income for the year
+32,567
+20,405
+Subtotal of other comprehensive income for the year
+(2,173)
+308,853
+(26,103)
+(3,853)
+661
+controlling shareholders
+Dividends to non-controlling
+shareholders
+Conversion of equity component
+of convertible bonds
+18,682
+34,428
+5,572
+(91,960)
+(91,960)
+(91,960)
+26,882 (26,882)
+18,682 (18,682)
+34,428
+34,428
+5,572
+7,677
+30
+(1,572)
+(8)
+30
+(1,572)
+30
+Capital injection by non-
+30
+Others
+(1,572)
+........--(8)
+1,393
+1,393
+7,677
+Balance as at
+2,105
+bonds
+Conversion of convertible
+108
+(2,065)
+34,188
+276,286
+475
+275,811 275,811
+80
+reserve (i)
+2013 final (note 18)
+Dividends ordinary shares
+Total comprehensive income
+Other comprehensive income
+(note 43)
+Profit for the year
+4,329 1,278,463
+Appropriation to surplus
+31 December 2014
+32,311
+256
+equity holder
+Capital injection by other
+reserve (ii)
+Appropriation to general
+26,882
+308,853
+32,311
+731
+275,811
+32,311
+80
+108
+34,188 (2,065)
+32,567
+308,122
+1,274,134
+353,495 34,428
+4,809 (26,103)
+56,267
+Impairment losses on assets other than loans and advances
+to customers
+15
+971
+462
+Unrealised foreign exchange gains
+(7,494)
+(476)
+Interest expense on debt securities issued
+13,349
+11,705
+Accreted interest on impaired loans
+Net trading gain on equity investments
+Gain on disposal of available-for-sale financial assets, net
+69 80
+(4,156)
+(944)
+(848)
+other assets (other than repossessed assets)
+Net gain on disposal and overage of property and equipment and
+10,024
+5,953
+86,022
+9
+(24)
+(33)
+(1,626)
+(4,765)
+10
+(2,779)
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+26
+Impairment losses on loans and advances to customers
+(102)
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2015
+Consolidated Cash Flow Statement
+133
+Annual Report 2015
+2015
+The notes on pages 137 to 267 form part of these financial statements.
+(ii)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB114 million and RMB345
+million, respectively.
+6,445 1,537,304
+1,530,859
+661 492,312 650,236
+(3,853)
+Includes the appropriation made by subsidiaries in the amount of RMB520 million.
+388 144,424 150,752 221,622
+2014
+363,235
+(1,422)
+Amortisation of financial investments
+2,211
+2,295
+12
+Amortisation
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before taxation
+16,094
+Depreciation
+(2,157)
+(2,330)
+Share of profits of associates and joint ventures
+Adjustments for:
+361,612
+18,049
+511,949
+408,835
+551
+(2,331)
+reserve (i)
+Appropriation to general
+reserve (ii)
+Capital injection by other
+equity holder
+Conversion of convertible
+bonds
+2,912
+Acquisition of subsidiaries
+Change in share holding
+27,288
+27,288
+(27,288)
+24,734
+24,734
+(24,734)
+(498)
+(339)
+(159)
+(159)
+3,438
+3,438
+(2,331) (2,331)
+10,673
+7,761
+(159)
+7,761
+44,947
+44,947
+44,947
+10,673
+(91,026)
+(91,026)
+(91,026)
+148
+(73)
+(5,329)
+25,147
+(note 43)
+Other comprehensive income
+19,893
+277,720
+277,131 277,131
+Profit for the year
+1,537,304
+6,445
+650,236 1,530,859
+492,312
+589
+(i)
+19,893
+20,405
+Appropriation to surplus
+Dividends preference shares
+2014 final (note 18)
+Dividends ordinary shares
+(note 18)
+298,125
+512
+1,101
+19,893
+148
+(73)
+(5,329)
+25,147
+Total comprehensive income
+277,131 297,024
+in subsidiaries
+Capital injection by non-
+controlling shareholders
+capital instrument bonds
+Surplus
+Capital
+share equity convertible
+Cash flow
+Investment currency
+reserve
+of
+Issued
+Foreign
+component
+Equity
+Reserves
+Attributable to equity holders of the parent company
+Other
+Year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+reserve
+hedging Other
+(3,961)
+(29,379) (24,038)
+123,870 202,940
+138,852
+1,960
+351,390
+General revaluation translation
+reserve reserve reserve
+Balance as at 1 January 2014
+profits Total interests
+reserves Subtotal
+reserve
+Total
+Non-
+controlling
+Retained
+equity
+10
+Consolidated Statement of Changes in Equity
+ICBC
+(8)
+(8)
+323
+323
+(388)
+356,407 79,375
+(388)
+31 December 2015
+Others
+convertible bonds (note 38)
+equity component of
+Conversion and redemption of
+shareholders
+Dividends to non-controlling
+Balance as at
+(i)
+(388)
+(125)
+132
+The notes on pages 137 to 267 form part of these financial statements.
+Includes the appropriation made by subsidiaries in the amount of RMB1,303 million.
+(ii)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB71 million and RMB890 million,
+respectively.
+1,789,474 11,045 1,800,519
+(125)
+684 571,704 781,988
+246,356 29,956
+178,040
+152,026
+(40)
+85
+(125)
+(31,432) (3,926)
+9
+Other financial liabilities
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets are
+set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation of
+financial assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent of
+its continuing involvement, derecognise the remaining. The book value of the transferred assets is apportioned between the
+derecognised portion and the retained portion based on their respective relative fair values, and the difference between the
+book value of the derecognised portion and the total consideration paid for the derecognised portion is recorded in profit or
+loss.
+143
+Annual Report 2015
+In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged
+decline in the fair value of the investment below its cost. The Group considers the time period and continuity of the
+magnitude of the decline to evaluate whether the decline in fair value is prolonged. More significantly the fair value declines
+relative to the cost, the less the volatility moves, and the longer the decline lasts or the more obvious the continuity of the
+magnitude of the decline is, the more likely the equity investment impairs. In general, the Group considers the situation
+when fair value is less than 40% of the cost as significant decline and that when fair value falls below the cost in a period
+over 12 months as prolonged decline.
+If there is objective evidence that the financial asset is impaired, the cumulative loss, measured as the difference between the
+acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss on that
+financial asset previously recognised in profit or loss, is removed from other comprehensive income and recognised in profit
+or loss.
+Available-for-sale financial assets
+If there is objective evidence that an impairment loss has been incurred on the financial asset, the amount of impairment
+loss, measured as the difference between the carrying amount of that financial asset and the present value of estimated
+future cash flows discounted at the current market rate of return for a similar financial asset, is recognised in profit or loss. In
+the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be reliably
+measured, the amount of impairment loss is recognised in profit or loss. Impairment losses on these assets are not reversed.
+Financial assets carried at cost
+When an item of loans and receivables is uncollectible, it is written off against the related allowance for impairment losses.
+Such loans and receivables are written off after all the necessary procedures have been completed and the amount of the
+loss has been determined. Subsequent recoveries of the amounts previously written off decrease the amount of the provision
+for loan impairment in profit or loss.
+If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be attributed objectively to an
+event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent
+reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the assets does not
+exceed its amortised cost at the reversal date.
+Notes to Financial Statements
+Future cash flows of a group of financial assets that are collectively evaluated for impairment are estimated on the basis of
+historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is
+adjusted on the basis of current observable data to reflect the impact of current conditions that did not affect the period on
+which the historical loss experience is based and to eliminate the impact of historical conditions that do not exist currently.
+The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group.
+If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments has been
+incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value
+of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's
+original effective interest rate and shall include the value of any relevant collateral. The original effective interest rate is the
+rate used to determine the values of financial assets at initial recognition. With respect to floating-rate loans, receivables and
+held-to-maturity investments, the discount rate could be the current effective interest rate determined under the contract.
+The carrying amount of the asset is reduced through the use of an impairment provision account and the amount of the loss
+is recognised in profit or loss.
+Financial assets carried at amortised cost
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+142
+ICBC
+An assessment on carrying amount of financial assets is made at the end of each reporting period. Impairment is recognised
+if there is objective evidence of impairment of financial assets, i.e., one or more events that occur after the initial recognition
+of those assets and have an impact on the estimated future cash flows of the financial assets or group of financial assets
+that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers
+is experiencing significant financial difficulty, default or delinquency in interest or principal payments, they would probably
+enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable
+decrease in the estimated future cash flows.
+(6) Impairment of the financial assets
+Other financial liabilities are carried at amortised cost using the effective interest rate method after initial recognition.
+(4) Foreign currency translation
+The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
+significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no
+objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is
+included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively
+assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or
+continues to be recognised are not included in a collective assessment of impairment.
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+If, after an impairment loss has been recognised on an available-for-sale debt instrument, the fair value of the debt
+instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the
+impairment loss was recognised the impairment loss is reversed through profit or loss. An impairment loss recognised for an
+investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. The impairment loss
+on an investment in unquoted equity instrument whose fair value cannot be reliably measured is not reversed.
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+(9) Convertible instruments
+A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
+Financial liabilities
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+144
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+Sales of assets on condition of repurchase
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Securitisation
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash flows
+from the asset but has entered into a pass-through arrangement, and has neither transferred nor retained substantially all
+the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's
+continuing involvement in the asset.
+The Group has transferred its rights to receive cash flows from the asset; or has retained its rights to receive cash
+flows from the asset but has assumed an obligation to pay them in full without material delay to a third party under a
+"pass-through" arrangement; and either the Group has transferred substantially all the risks and rewards of ownership
+of the financial asset; or the Group has neither transferred nor retained substantially all the risks and rewards of
+ownership of the financial asset, but has transferred control of the asset.
+The rights to receive cash flows from the asset have expired; or
+•
+A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised
+when:
+Financial assets
+(8) Derecognition of financial assets and liabilities
+Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending
+the payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is
+no longer considered past due. Management continuously reviews renegotiated loans to ensure that all criteria are met and
+that future payments are likely to occur. The loans continue to be subject to individual or collective impairment assessment,
+and the provision is calculated using the loan's original effective interest rate.
+(7) Renegotiated loans
+In the case of an equity investment classified as available for sale, if neither a quoted market price in an active market exists
+nor its fair value can be reliably measured, it will be measured at cost less any impairment loss.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Available-for-sale financial assets are non-derivative financial assets which are designated as such or are not classified
+in any of the three preceding categories. After initial recognition, available-for-sale financial assets are subsequently
+measured at fair value. Premiums and discounts on available-for-sale financial assets are amortised using the effective
+interest rate method and are taken to the statement of profit or loss as interest income. Changes in fair value of available-
+for-sale financial assets are recognised as a separate component of other comprehensive income until the financial asset
+is derecognised or determined to be impaired at which time the cumulative gains or losses previously recorded in other
+comprehensive income are transferred to profit or loss. Dividend and interest income on available-for-sale financial assets are
+recorded in profit or loss.
+Discounted bills are granted by the Group to its customers based on the bank acceptance held which has not matured.
+Discounted bills are carried at face value less unrealised interest income and the interest income of the discounted bills is
+recognised using the effective interest rate method.
+(i)
+A financial asset or financial liability is classified as held for trading if:
+Financial assets or financial liabilities held for trading
+Financial assets or financial liabilities at fair value through profit or loss include financial assets or financial liabilities held for
+trading and financial assets or financial liabilities designated at fair value through profit or loss.
+Financial assets or financial liabilities at fair value through profit or loss
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+Measurement of fair value
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
+ICBC
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities at
+fair value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other
+categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their
+initial costs.
+At initial recognition, financial liabilities are classified into two categories: financial liabilities at fair value through profit or
+loss and other financial liabilities.
+At initial recognition, financial assets are classified into four categories: financial assets at fair value through profit or loss,
+held-to-maturity financial investments, loans and receivables and available-for-sale financial assets.
+Initial recognition of financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(5) Financial instruments
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken to other comprehensive income. On disposal of a foreign operation, the
+cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in
+profit or loss.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+140
+(ii)
+(iii)
+on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for
+which there is evidence of a recent actual pattern of short term profit-taking; or
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
+an active market and the Group has no intention of trading the assets immediately or in the near term. After initial
+measurement, such assets are subsequently carried at amortised cost using the effective interest rate method, less any
+allowance for impairment losses. Gains and losses are recognised in profit or loss when such assets are derecognised or
+impaired, as well as through the amortisation process.
+Loans and receivables
+If, as a result of a change in intention or ability, it is no longer appropriate to classify an investment as held-to-maturity, it
+shall be reclassified as available-for-sale and remeasured at fair value.
+Held-to-maturity financial investments are non-derivative financial assets with fixed or determinable payments and a fixed
+maturity and which the Group has the positive intention and ability to hold to maturity. After initial measurement, held-to-
+maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less
+any impairment loss. Gains and losses are recognised in profit or loss when the held-to-maturity financial investments are
+derecognised or impaired, as well as through the amortisation process.
+Held-to-maturity financial investments
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+141
+Annual Report 2015
+Financial assets and liabilities designated at fair value through profit or loss are measured at fair value after initial
+recognition. Realised and unrealised income or expenses are recognised in profit or loss.
+In the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be
+reliably measured, it cannot be designated as a financial asset at fair value through profit or loss.
+The financial instrument contains one or more embedded derivatives, unless the embedded derivative(s) does not
+significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
+It applies to a group of financial assets, financial liabilities or both which is managed and its performance evaluated on
+a fair value basis, in accordance with a documented risk management or investment strategy, and where information
+about that group of financial instruments is provided internally on that basis to key management personnel; or
+It eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from
+measuring the financial asset or financial liability or from recognising the gains and losses on them on different bases;
+(iii)
+(ii)
+(i)
+A financial instrument may be designated as a financial asset or financial liability at fair value through profit or loss upon
+initial recognition, if it meets any of the criteria set out below:
+Financial assets or financial liabilities designated at fair value through profit or loss
+Financial assets or financial liabilities held for trading are measured at fair value after initial recognition. Realised or
+unrealised income or expenses are recognised in profit or loss.
+it is a derivative that is not designated as an effective hedging instrument.
+Available-for-sale financial assets
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at fair value through profit or loss. The equity component is not re-measured.
+(10) Preference share
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+(17) Land use rights
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels. The
+residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from 15 to
+25 years.
+Over the shorter of the economic useful lives
+and remaining lease terms
+14.29%-50%
+(18) Repossessed assets
+2-7 years
+1.94%-20%
+depreciation rate
+Annual
+Estimated
+residual
+value rate
+0%-3%
+5-50 years
+Properties and buildings
+Estimated
+useful life
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+(In RMB millions, unless otherwise stated)
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+(19) Business combination and goodwill
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Subsidiaries
+Subsidiaries are entities controlled by the Group. The Group controls an entity if it is exposed, or has rights, to, variable
+returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
+The Group reassesses whether it has control if there are changes to one or more of the elements of control. This includes
+circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead
+to the Group having power over an entity.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses (see note
+3(21)).
+(2) Non-controlling interests
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Group.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+(3) Associates and Joint ventures
+An associate is an entity in which the Group or Bank has significant influence.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see note 3(21)).
+Annual Report 2015
+139
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+148
+Financial Statements for the year ended 31 December 2015
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+Notes to Financial Statements
+Annual Report 2015
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised,
+the hedge no longer meets the criteria for hedge accounting or the Group revokes the designation. If the hedged items are
+derecognised, the unamortised fair value is recorded in profit or loss.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that is
+attributable to a particular risk and could affect the profit or loss. For fair value hedges, the carrying amount of the hedged
+item is adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the
+gains and losses from both are taken to profit or loss.
+Fair value hedges
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
+the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
+The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk
+being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting the exposure to changes in
+the hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective
+in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they have
+actually been highly effective throughout the financial reporting periods for which they were designated.
+Hedge accounting
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Cash flow hedges
+Notes to Financial Statements
+Annual Report 2015
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+Certain derivatives embedded in other financial instruments are treated as separate derivatives when their economic
+characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair
+value through profit or loss. These embedded derivatives are measured at fair value with the changes in fair value recognised
+in profit or loss.
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+(11) Derivatives and hedge accounting
+Derivatives
+For the issued preference shares that should be classified as equity instruments, will be recognised as equity in actual amount
+received. Dividends payables are recognised as distribution of profits. Redemption before maturity will write down equity as
+redemption price.
+When the issued preference shares contain equity and liability components, the Group follows the same accounting policy as
+for convertible bonds with equity components. For the issued preference shares which do not contain equity component, the
+Group follows the accounting policy as accounting for the convertible bonds only with liability component.
+Such preference shares or their components are initially recognised as financial assets, financial liabilities or equity
+instruments according to the terms and the economic substance combined with the definition of financial assets, financial
+liabilities and equity instruments.
+145
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss. For
+designated and qualifying cash flow hedges, the effective portion of the gain or loss on the hedging instrument is initially
+recognised directly in other comprehensive income. The ineffective portion of the gain or loss on the hedging instrument is
+recognised immediately in profit or loss.
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+a hedging instrument expires, or is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge
+accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive
+income until the hedged forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur,
+the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+(12) Trade date accounting
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+(16) Property and equipment
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+(15) Precious metals
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+•
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+(13) Offsetting of financial instruments
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+146
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+147
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+IFRS14, Regulatory deferral accounts
+Amendments to IFRS 11, Joint Arrangements "Accounting for acquisitions of interests in
+joint operations"
+The amendments provide new guidance on how to account for the acquisition of an interest in a joint operation that
+constitutes a business. Specifically, the amendments require business combination accounting to be applied in this situation.
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+Amendments to IAS 16 and IAS 38, Clarification of acceptable methods of depreciation and
+amortization
+The amendments introduce a rebuttable presumption to IAS 38 that the use of revenue-based amortisation methods for
+intangible assets is inappropriate. This presumption can be overcome only when revenue and the consumption of the
+economic benefits of the intangible asset are 'highly correlated', or when the intangible asset is expressed as a measure of
+revenue. The amendments also prohibit the use of revenue-based depreciation methods for property, plant and equipment
+under IAS 16.
+The adoption will not have any material impact on the financial position and the financial result of the Group.
+Amendments to IAS 27, Separate financial statements "Equity method in separate financial
+statements"
+The amendments allow an entity to apply the equity method to account for its investments in subsidiaries, joint ventures and
+associates in its separate financial statements. As a result of the amendments, the entity can choose to account for these
+investments either:
+.
+This interim standard permits first-time adopters of IFRS to continue to use previous GAAP to account for regulatory deferral
+account balances while the IASB completes its comprehensive project in this area.
+at cost;
+in accordance with IFRS 9 (or IAS 39); or
+using the equity method as described in IAS 28.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Amendments to IFRS10 and IAS28, Sale or contribution of assets between an investor and
+its associate or joint venture
+The amendments address a long-standing conflict on transactions with Joint Venture, by creating a new dividing line-namely
+whether a business has been sold with a new approach to steps-up. The amendments require the full gain to be recognised
+when the assets transferred meet the definition of the business under IFRS 3 Business Combinations.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+158
+ICBC
+•
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+As an existing IFRS adopter, the Group is not applicable for the new standard.
+or
+the party is a person or a close member of that person's family and that person:
+(a)
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+A party is considered to be related to the Group if:
+(29) Related parties
+ICBC
+154
+Rental payments applicable to operating leases are charged to profit or loss on the straight-line basis over the lease terms.
+When the Group is the lessor under operating leases, the assets subject to operating leases are accounted for as the Group's
+assets. Rental income is recognised as "other operating income, net” in the statement of profit or loss on the straight-line
+basis over the lease term.
+Operating leases
+When the Group is a lessor under finance leases, an amount representing the minimum lease payment receivables and initial
+direct costs is included in the statement of financial position as loans and advances to customers. Any unguaranteed residual
+value is also recognised at the inception of the lease. The difference between the sum of the minimum lease payment
+receivables, initial direct costs, the unguaranteed residual value and their present value is recognised as unearned finance
+income. Unearned finance income is recognised over the period of the lease using the effective interest rate method.
+(i)
+Finance leases
+(28) Leases
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly. Future taxable profits are determined based on business plans for individual subsidiaries in the Group.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+(ii)
+(i)
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+(ii)
+Leases which transfer substantially all the risks and rewards of ownership of the assets to the lessees are classified as
+finance leases. Leases where substantially all the rewards and risks of the assets remain with the lessor are accounted for as
+operating leases.
+has control or joint control over the Group;
+(ii)
+has significant influence over the Group; or
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(31) Contingent liabilities
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities
+are measured at the higher of the initial fair value less cumulative amortisation and the best estimate of expenditure being
+required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability relating to a
+financial guarantee is taken to the statement of profit or loss.
+(30) Financial guarantee contracts
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+the entity is controlled or jointly controlled by a person identified in (a);
+(vi)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(v)
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+the entity and the Group are joint ventures of the same third party;
+(iii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(ii)
+the entity and the Group are members of the same group;
+(i)
+the party is an entity where any of the following conditions applies:
+(b)
+99
+Annual Report 2015
+is a member of the key management personnel of the Group or of a parent of the Group;
+(iii)
+(In RMB millions, unless otherwise stated)
+(32) Dividends
+Financial Statements for the year ended 31 December 2015
+153
+152
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as available-
+for-sale financial assets, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where
+appropriate, to the net carrying amount of the financial asset. The calculation takes into account all contractual terms of
+the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly
+attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. The carrying
+amount of the financial asset is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying
+amount is calculated based on the original effective interest rate and the change in carrying amount is recorded in profit or
+loss.
+Interest income
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+(26) Revenue recognition
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+Insurance contract liabilities
+(iii) Related income can be reliably measured.
+The related economic benefits are likely to flow to the Group;
+(ii)
+ICBC
+(i) The insurance contract is issued, and related insurance risk is undertaken by the Group;
+Insurance income recognition
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards.
+(ii)
+(i)
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. the contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+Insurance contracts classification
+(25) Insurance contracts
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Insurance premium income is recognised when:
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest
+income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the
+impairment loss.
+Annual Report 2015
+Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+(i)
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred income tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Current tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+(27) Income tax
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+Net trading income
+Dividend income is recognised when the Group's right to receive payment is established.
+Dividend income
+The fair value of the award credits granted to the bank card holders is deferred and recognised as fee and commission
+income when the award credits are redeemed or expire.
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the
+arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognised on
+completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are
+recognised after fulfilling the corresponding criteria.
+Fee income from providing transaction services
+These fees mainly include fee income on settlement and clearing business, commission income and fee income on
+asset management, custody and other management advisory services. Fee income is recognised on the basis of when
+the transaction is completed or on an accrual basis when the service is provided over a period of time.
+Fee income on transactions conducted or from services provided over a period of time
+(ii)
+(i)
+The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be
+divided into the following two categories:
+Fee and commission income
+Notes to Financial Statements
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+Annual Report 2015
+155
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+150
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Post-employment benefits-defined contribution plans
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organizations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Termination benefits
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+When the Group can no longer withdraw an offer of those benefits;
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when it is incurred.
+(24) Fiduciary activities
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+Further information about those changes that are expected to affect the Group is as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+157
+Annual Report 2015
+Early retirement benefits
+Short-term employee benefits
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+(23) Employee benefits
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUS) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+(20) Provisions
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+Annual Report 2015
+149
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(21) Asset impairment
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+(22) Cash and cash equivalents
+Cash and cash equivalents refer to short term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+Effective for annual periods beginning on or after 1 January 2016, early adoption is permitted.
+Effective for annual periods beginning on or after 1 January 2018, early adoption is permitted.
+2
+1
+Securitisation vehicles
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls a securitisation vehicle, an investment fund, a non-principal guaranteed wealth management product, a segregated
+asset management plan, trust plans or asset-backed financings.
+Determination of control over investees
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+156
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+Fair value of financial instruments
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+Income tax
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUS to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+Impairment of goodwill
+In determining whether there is any objective evidence that impairment losses have occurred on available-for-sale and held-
+to-maturity investments, the Group assesses periodically whether there has been a significant or prolonged decline in the fair
+value below its cost or carrying amount, or whether other objective evidence of impairment exists based on the investee's
+financial conditions and business prospects, including industry environment, change of technology as well as operating and
+financing cash flows. This requires a significant level of judgement, which would affect the amount of impairment losses.
+Impairment losses of available-for-sale and held-to-maturity investments
+Impairment losses of loans and advances and amounts due from banks and other financial institutions
+The Group determines periodically whether there is any objective evidence that impairment losses have occurred on loans
+and advances and amounts due from banks and other financial institutions. If any such evidence exists, the Group assesses
+the amount of impairment losses. The amount of impairment losses is measured as the difference between the carrying
+amount and the present value of estimated future cash flows. Assessing the amount of impairment losses requires significant
+judgement on whether the objective evidence for impairment exists and also significant estimates when determining the
+present value of the expected future cash flows.
+Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
+investments when the Group has the positive intention and ability to hold the investments to maturity. Accordingly, in
+evaluating whether a financial asset shall be classified as a held-to-maturity investment, significant management judgement
+is required. If the Group fails correctly to assess its intention and ability to hold the investments to maturity and the Group
+sells or reclassifies more than an insignificant amount of held-to-maturity investments before maturity, the Group would
+reclassify the whole held-to-maturity investment portfolio as available for sale.
+Designation of held-to-maturity investments
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that
+have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
+financial period are described below.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+4.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+Notes to Financial Statements
+Investment funds, non-principal guaranteed wealth management products, segregated asset management
+plans, trust plans and asset-backed financings
+For further disclosure in respect of unconsolidated investment funds, non-principal guaranteed wealth management
+products, segregated asset management plans, trust plans and assets-backed financings in which the Group has an interest
+or for which it is a sponsor, see Note 45.
+IFRS 9
+IFRS 15
+IAS 1 Amendments
+IAS 28 Amendments
+Financial instruments²
+Revenue from contracts with customers'
+Presentation of financial statements'
+Investment entities: Applying the consolidation exception'
+IFRS 10, IFRS 12 and
+Annual Improvements to IFRSS 2012-2014 Cycle'
+Sale or contribution of assets between an investor and its associate or joint venture
+Separate financial statements'
+Clarification of acceptable methods of depreciation and amortization'
+Joint Arrangements'
+Regulatory deferral accounts'
+IFRS 10 and IAS 28 Amendments
+IAS 27 Amendments
+IAS 16 and IAS 38 Amendments
+IFRS 11 Amendments
+IFRS 14
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS
+5.
+The Group acts as manager to a number of investment funds, non-principal guaranteed wealth management products,
+segregated asset management plans, trust plans and assets-backed financings. Determining whether the Group controls
+such a structured entity usually focuses on the assessment of the aggregate economic interests of the Group in the entity
+(comprising any carried interests and expected management fees) and the decision-making authority of the entity. For all
+these structured entities managed by the Group, the Group's aggregate economic interest is in each case not significant
+and the decision makers establish, market and manage them according to restricted parameters as set out in the investment
+agreements as required by laws and regulations. As a result, the Group has concluded that it acts as agent as opposed to
+principal for the investors in all cases, and therefore has not consolidated these structured entities.
+151
+The new standard aligns hedge accounting more closely with risk management. It does not fundamentally change the types
+of hedging or the requirement to measure and recognise ineffectiveness; however, more hedging strategies that are used for
+risk management will qualify for hedge accounting.
+Interest income on:
+The new impairment methodology in IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit loss"
+model. Under IFRS 9 it is not necessary for a credit event to have occurred before credit losses are recognised.
+•
+disaggregation and aggregation;
+presentation of sub-totals; and
+presentation of other comprehensive income items arising from equity-accounted associates and joint ventures.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+IFRS 15, Revenue from contracts with customers
+The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue:
+at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether,
+how much and when revenue is recognised.
+IFRS 15 also introduces extensive qualitative and quantitative disclosure requirements which aim to enable users of the
+financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from
+contracts with customers. Some of these apply to interim financial reports prepared under IAS 34 as well as to annual
+financial statements. An entity may adopt IFRS 15 on a full retrospective basis. Alternatively, it may choose to adopt it from
+the date of initial application by adjusting opening balances at that date. Transitional disclosures are different depending on
+the approach adopted by the entity.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Annual Report 2015
+159
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+IFRS 9, Financial instruments
+On 24 July 2014, the IASB issued the complete standard of IFRS 9 (IFRS 9 (2014)).
+Classification and measurement of financial assets and financial liabilities
+IFRS 9 (2014) includes a 3rd business model and requires some debt instruments to be measured at fair value through other
+comprehensive income less impairment with recycling. For the classification and measurement, IFRS 9 introduces a new
+requirement that the gain or loss on a financial liability designated at fair value through profit or loss that is attributable to
+changes in the entity's own credit risk is recognised in other comprehensive income; the remaining amount of change in fair
+value is recognised in profit or loss ("own credit risk requirements").
+Hedge accounting
+•
+Impairment
+order of notes;
+assessment of materiality versus minimum disclosure requirements of a standard;
+6. NET INTEREST INCOME
+The Group has started the process of evaluating the potential effect of this standard. Given the nature of the Group's
+operations, this standard is expected to have a pervasive impact on the Group's financial statements.
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Annual Improvements to IFRSS 2012-2014 Cycle
+The 2012-2014 cycle of annual improvement contains amendments to four standards with consequential amendments
+to other standards and interpretations including IFRS 5 Non-current assets held for sale and discounted operations, IFRS 7
+Financial instruments: disclosures, IAS 19 Employee benefits, IAS 34 Interim financial reporting.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Amendments to IFRS 10, IFRS 12 and IAS 28, Investment entities: Applying the consolidation
+exception
+The amendments clarify the following areas of the accounting requirements of investment entities:
+•
+•
+.
+Exemption from preparing consolidated financial statements under IFRS 10.4(a) is available to a parent entity that is a
+subsidiary of an investment entity, even if the investment entity measures all of its subsidiaries, including that parent
+entity, at fair value.
+A subsidiary that is itself an investment entity should not be consolidated even if it provides services related to the
+parent's investment activities.
+When applying the equity method, a non-investment entity investor is allowed, but not required, to retain the fair
+value measurement applied by its investment entity associate or joint venture for their subsidiaries, i.e. the investor can
+make a policy choice.
+An investment entity measuring all of its subsidiaries at fair value is still required to provide the disclosures relating to
+investment entities required by IFRS 12, even though it is not preparing consolidated financial statements.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Amendments to IAS 1, Presentation of financial statements "Disclosure initiative"
+The amendments clarify various presentation issues relating to:
+•
+•
+•
+1,319
+2014
+78
+937
+313
+1,628
+376
+1,252
+DONG Juan
+External Supervisor
+378
+100
+MENG Yan
+External Supervisor
+280
+280
+ZHANG Wei
+Employee Representative Supervisor
+50
+50
+100
+Shareholder Representative Supervisor
+WANG Chixi
+430
+574
+1,394
+480
+480
+430
+430
+440
+440
+480
+480
+HONG Yongmiao
+Independent Non-executive Director
+460
+460
+460
+YI Xiqun
+Independent Non-executive Director
+430
+430
+LI Mingtian
+1,968
+Employee Representative Supervisor
+50
+12,642
+2,634
+10,008
+Note: The remuneration before tax payable to directors and supervisors for 2014 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2014 Annual
+Report.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+Fees of Employee Supervisors Mr. Zhang Wei and Mr. Li Mingtian are their allowances obtained as Employee Supervisors of
+the Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+(i)
+In December 2014, Mr. Liu Lixian submitted a resignation to the Board of the Bank. By reason of his age, Mr. Liu Lixian
+ceased to act as Executive Director of the Bank.
+1,716
+(ii)
+(iii)
+(iv)
+In December 2014, Mr. Wang Xiaolan submitted a resignation to the Board of the Bank. By reason of his age, Mr.
+Wang Xiaolan ceased to act as Non-executive Director of the Bank.
+In November 2014, Mr. Yao Zhongli submitted a resignation to the Board of the Bank and ceased to act as Non-
+executive Director of the Bank due to his age.
+Annual Report 2015
+165
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+In March 2015, due to expiration of the term of office, Mr. Li Jun ceased to act as Non-executive Director of the Bank.
+5,442
+2,284
+3,200
+གླུ ,,,,
+100
+280
+50
+50
+LIU Lixian (i)
+Former Executive Director,
+446
+1,103
+326
+1,875
+553
+1,322
+Secretary of Party Discipline Committee
+LI Jun (ii)
+WANG Xiaolan (iii)
+Former Non-executive Director
+Former Non-executive Director
+YAO Zhongli (iv)
+Former Non-executive Director
+50
+361
+1,145
+,,,,,,, Ê
+Total
+emoluments
+Of which:
+Actual
+amount of
+deferred
+remuneration
+Fees
+paid
+bonuses
+plans, housing
+allowance, etc.
+payment
+paid (pre-tax)
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+before tax
+Discretionary
+Remuneration
+and welfare
+(ix) In March 2015, due to expiration of the term of office, Mr. Li Jun ceased to act as Non-executive Director of the Bank.
+(x)
+K
+(xi)
+(xii)
+In April 2015, due to expiration of the term of office, Mr. Wong Kwong Shing, Frank ceased to act as Independent
+Non-executive Director of the Bank.
+On 19 June 2015, Mr. Zhao Lin resigned from the posts of Supervisor and Chairman of the Board of Supervisors due to
+his age.
+On 21 December 2015, Mr. Meng Yan ceased to act as External Supervisor of the Bank due to expiration of the term of
+office.
+(xiii) On 23 July 2015, the term of office of Employee Supervisor Mr. Li Mingtian expired, and he continued to perform the
+supervisor's responsibilities up to 25 September 2015 according to the Articles of Association of the Bank.
+164
+ICBC
+Name
+Position
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2014
+Contribution by
+the employer
+to social
+insurance
+RMB'000
+(1)
+(2)
+(3)
+1,133
+369
+1,975
+568
+1,407
+Non-executive Director
+FU Zhongjun
+Non-executive Director
+WONG Kwong Shing, Frank
+M.C. McCarthy
+Kenneth Patrick CHUNG
+Independent Non-executive Director
+480
+Independent Non-executive Director
+430
+Independent Non-executive Director
+440
+Or Ching Fai
+Independent Non-executive Director
+480
+462
+473
+(In RMB millions, unless otherwise stated)
+Non-executive Director
+Executive Director, President
+(4)
+(5)=(1)+(2)+(3)+(4)
+(6)
+(7)=(5)-(6)
+525
+1,124
+347
+1,996
+563
+63
+1,433
+JIANG Jianqing
+YI Huiman
+ZHAO Lin
+WANG Xiaoya
+GE Rongrong
+Chairman of the Board of Directors,
+Executive Director
+Vice Chairman of the Board of Directors,
+Chairman of the Board of Supervisors
+The non-executive directors of the Bank received emoluments from the Bank's shareholders in respect of their services during
+the year.
+During the year, there was no arrangement under which a director or a supervisor waived or agreed to waive any
+remuneration (2014: Nil).
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2014: Nil).
+(ii)
+The non-taxable income mainly represents interest income arising from the PRC government bonds, which is exempted
+from income tax.
+Annual Report 2015
+167
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+17. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+The non-deductible expenses mainly represent non-deductible impairment provision and write-offs.
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2015 includes
+a profit of RMB262,322 million (2014: RMB263,201 million) which has been dealt with in the financial statements of the
+Bank (Note 42).
+Dividends on ordinary shares declared and paid:
+2015
+2014
+Final dividend on ordinary shares for 2014: RMB0.2554 per share
+(2013: RMB0.2617 per share)
+91,026
+91,960
+Dividends on preference shares declared and paid:
+Final dividends for 2015
+18. DIVIDENDS
+(i)
+85,326
+85,515
+90,403
+(511)
+(575)
+Non-deductible expenses (i)
+5,774
+3,937
+Non-taxable income (ii)
+(10,256)
+(9,081)
+Profits attributable to associates and joint ventures
+(582)
+(539)
+Adjustment in respect of income tax of prior years
+(1,232)
+254
+Others
+1,513
+927
+Income tax expense
+2,331
+2015
+2014
+Dividends on ordinary shares proposed for approval
+274,800
+13
+275,811
+447
+Profit used to determine diluted earnings per share
+274,813
+276,258
+Shares:
+Weighted average number of ordinary shares outstanding (in million shares)
+Add: Weighted average number of ordinary shares assuming conversion of
+all dilutive shares (in million shares)
+356,027
+351,438
+2,916
+Weighted average number of ordinary shares for diluted earnings per share
+(in million shares)
+356,027
+354,354
+Diluted earnings per share (RMB yuan)
+0.77
+0.78
+168
+ICBC
+2015
+Profit for the year attributable to ordinary equity holders of the parent company
+Add: Interest expense on convertible bonds (net of tax)
+90,809
+Earnings:
+2015
+(not recognised as at 31 December):
+Final dividend on ordinary shares for 2015: RMBO.2333 per share
+(2014: RMBO.2554 per share)
+83,150
+91,026
+19. EARNINGS PER SHARE
+The calculation of basic earnings per share is based on the following:
+2015
+2014
+Earnings:
+Profit for the year attributable to ordinary equity holders of the parent company
+Shares:
+274,800
+275,811
+Weighted average number of ordinary shares in issue (in million shares)
+356,027
+Basic earnings per share (RMB yuan)
+0.77
+351,438
+0.78
+Basic earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the parent
+company divided by the weighted average number of ordinary shares in issue.
+The calculation of diluted earnings per ordinary share is based on the following:
+2014
+(viii) On 25 September 2015, the Bank appointed Mr. Hui Ping as Employee Supervisor of the Bank at the Interim Employees'
+Congress, and his term of office took effect from the date of review and approval by the Employees' Congress.
+Tax at the PRC statutory income tax rate
+2015
+363,235
+1
+1
+1
+1
+1
+1
+-
+1
+1
+1
+5
+5
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2014: Nil).
+166
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+15. IMPAIRMENT LOSSES ON ASSETS OTHER THAN LOANS AND ADVANCES TO
+CUSTOMERS
+Notes
+1
+RMB12,000,001 Yuan to RMB12,500,000 Yuan
+RMB12,500,001 Yuan to RMB13,000,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB18,000,001 Yuan to RMB18,500,000 Yuan
+RMB19,500,001 Yuan to RMB20,000,000 Yuan
+RMB21,500,001 Yuan to RMB22,000,000 Yuan
+RMB10,000,001 Yuan to RMB10,500,000 Yuan
+RMB11,000,001 Yuan to RMB11,500,000 Yuan
+2014
+14. FIVE HIGHEST PAID INDIVIDUALS
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 13 and 53(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+Group
+Salaries and allowances
+Discretionary bonuses
+2015
+RMB'000
+13,770
+2014
+61,608
+RMB'000
+11,676
+57,407
+Contributions to defined contribution plans
+394
+Compensation for terminating contract
+Others
+2,458
+2,789
+81,019
+69,083
+The number of these individuals whose emoluments fell within the following bands is set out below.
+Number of employees
+2015
+2015
+2014
+Charge/(reversal) of impairment losses on:
+Due from banks and other financial institutions
+Deferred income tax credit
+2015
+2014
+86,541
+88,981
+1,837
+1,613
+2,238
+2,151
+90,616
+92,745
+(1,232)
+254
+(3,869)
+(7,673)
+85,515
+85,326
+(b) Reconciliation between income tax and accounting profit
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+Profit before taxation
+Adjustments in respect of income tax of prior years
+2014
+361,612
+Overseas
+Mainland China
+21
+111
+8
+Financial investments:
+Held-to-maturity investments
+Available-for-sale financial assets
+Other
+27(d)
+27(c)(i),(d)
+(25)
+3
+(4)
+163
+889
+288
+971
+462
+16. INCOME TAX EXPENSE
+(a) Income tax
+Current income tax expense:
+Hong Kong and Macau
+On 21 December 2015, the Bank appointed Mr. Qu Qiang as External Supervisor of the Bank at the Second
+Extraordinary General Meeting of 2015, and his term of office took effect from the date of review and approval by the
+meeting.
+Effects of different applicable rates of tax prevailing in other countries/regions
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun from
+Independent Non-executive Director due to work reasons, which will become effective upon approval of new
+independent non-executive director's qualification by CBRC.
+(10,024)
+The above amounts represent gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities designated at fair value through profit or loss upon initial
+recognition.
+10. NET GAIN ON FINANCIAL INVESTMENTS
+2015
+2014
+Dividend income from unlisted investments
+125
+145
+(5,953)
+Dividend income from listed investments
+32
+Dividend income
+155
+177
+Gain on disposal of available-for-sale financial assets, net
+4,765
+1,626
+4,920
+30
+(26,182)
+(20,273)
+16,158
+Equity investments
+Derivatives
+2015
+2014
+4,444
+1,103
+33
+24
+(250)
+618
+4,227
+1,745
+The above amounts include gains and losses arising from the buying and selling of, interest income and expense on, and
+changes in the fair value of financial assets and liabilities held for trading.
+9. NET LOSS ON FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE
+THROUGH PROFIT OR LOSS
+Financial assets
+Financial liabilities
+2015
+2014
+14,320
+1,803
+Annual Report 2015
+161
+Notes to Financial Statements
+14,281
+15,315
+(i) Details of insurance net income are as follows:
+Premium income
+Less: premiums ceded to reinsurers
+Net premium income
+Insurance operating costs
+Insurance net income
+12. OPERATING EXPENSES
+Staff costs:
+2015
+2014
+23,538
+15,400
+(2,905)
+(147)
+20,633
+15,253
+(20,599)
+2,708
+Debt securities
+4,124
+487
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+11. OTHER OPERATING INCOME, NET
+2015
+2014
+Insurance net income (i)
+34
+590
+Gain from foreign exchange and foreign exchange products, net
+1,894
+3,673
+Leasing income
+5,866
+6,722
+Net gain on disposal of property and equipment, repossessed assets and others
+1,664
+Sundry bank charge income
+212
+303
+Gain on acquisition of subsidiary
+Others
+(14,663)
+NET TRADING INCOME
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB18,659 million (2014: RMB16,307 million)
+with respect to trust and other fiduciary activities.
+849,879
+Interest expense on:
+Due to customers
+Due to banks and other financial institutions
+Debt securities issued
+(298,010)
+(298,941)
+(49,801)
+871,779
+(42,801)
+(14,615)
+(363,912)
+(356,357)
+507,867
+493,522
+Net interest income
+The above interest income and expense were related to financial instruments which are not at fair value through profit or
+loss.
+(i)
+(16,101)
+26,745
+36,538
+Due from banks and other financial institutions
+Loans and advances to customers (i)
+At the First Extraordinary General Meeting of 2015 held on 23 January 2015, Mr. Anthony Francis Neoh was appointed
+as Independent Non-executive Director of the Bank, and his qualification has been approved by CBRC in April 2015.
+- Corporate loans and advances
+· Personal loans
+Discounted bills
+616,541
+615,488
+421,877
+437,789
+174,503
+164,612
+20,161
+13,087
+Financial investments (ii)
+170,833
+159,262
+Due from central banks
+47,867
+48,384
+Included in interest income on loans and advances to customers for the year is an amount of RMB4, 156 million (2014:
+RMB2,779 million) with respect to the accreted interest on impaired loans.
+(ii)
+Included in interest income on financial investments for the year is an amount of RMB28 million (2014: RMB27 million)
+with respect to interest income on impaired debt securities.
+ICBC
+Others
+Fee and commission income
+5,544
+5,923
+4,687
+4,614
+1,979
+2,019
+2,784
+2,488
+161,670
+146,678
+Fee and commission expense
+(18,279)
+(14,181)
+Net fee and commission income
+143,391
+132,497
+(i)
+Trust and agency services (i)
+8.
+Guarantee and commitment business
+14,929
+7.
+NET FEE AND COMMISSION INCOME
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2015
+2014
+Bank card business
+37,684
+35,133
+Personal wealth management and private banking services (i)
+35,910
+20,676
+Settlement, clearing business and cash management
+27,986
+30,422
+Investment banking business
+26,791
+30,474
+Corporate wealth management services (i)
+18,305
+Asset custody business (i)
+34
+160
+2015
+Anthony Francis Neoh (vi)
+WANG Chixi
+DONG Juan
+QU Qiang (vii)
+ZHANG Wei
+HUI Ping (viii)
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+External Supervisor
+463
+470
+463
+330
+746
+200
+946
+-
+External Supervisor
+Employee Representative Supervisor
+LI Jun (ix)
+330
+470
+Independent Non-executive Director
+470
+FU Zhongjun
+ZHENG Fuqing (iv)
+FEI Zhoulin (iv)
+CHENG Fengchao (iv)
+M.C. McCarthy
+Kenneth Patrick CHUNG
+Or Ching Fai
+HONG Yongmiao
+YI Xiqun (v)
+Non-executive Director
+Independent Non-executive Director
+Non-executive Director
+Non-executive Director
+Non-executive Director
+430
+430
+Independent Non-executive Director
+440
+440
+Independent Non-executive Director
+470
+Employee Representative Supervisor
+Former Non-executive Director
+8
+8
+50
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Supervisors of the Bank have not been finalised in accordance with the
+regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a significant impact
+on the Group's and the Bank's 2015 financial statements. The total compensation packages will be further disclosed when
+determined by the relevant authorities.
+Fees of Employee Supervisors Mr. Zhang Wei, Mr. Hui Ping and Mr. Li Mingtian are their allowances obtained as Employee
+Supervisors of the Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+(i)
+The Bank appointed Mr. Qian Wenhui as Shareholder Supervisor of the Bank at the 2014 Annual General Meeting
+on 19 June 2015, and his term of office took effect from the date of review and approval by the meeting. The Bank
+appointed Mr. Qian Wenhui as Chairman of the Board of Supervisors of the Bank at a meeting of the Board of
+Supervisors.
+Annual Report 2015
+163
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(ii)
+(iv)
+(v)
+(vi)
+(vii)
+At the First Extraordinary General Meeting of 2014 held on 15 April 2014, Mr. Zhang Hongli was appointed as
+Executive Director of the Bank, and his qualification has been approved by CBRC in June 2015.
+At the First Extraordinary General Meeting of 2015 held on 23 January 2015, Mr. Zheng Fuqing was appointed as Non-
+executive Director of the Bank and his qualification was approved by CBRC in February 2015. Mr. Fei Zhoulin and Mr.
+Cheng Fengchao were appointed as Non-executive Directors of the Bank, and their qualifications were approved by
+CBRC in March 2015.
+590
+At the Annual General Meeting for the Year of 2014 held on 19 June 2015, Mr. Wang Xiquan was appointed as
+Executive Director of the Bank, and his qualification has been approved by CBRC in June 2015.
+6,874
+Non-executive Director
+3,102
+3,046
+50
+13
+13
+WONG Kwong Shing, Frank (x)
+Former Independent Non-executive Director
+118
+118
+ZHAO Lin (xi)
+MENG Yan (xii)
+Former Chairman of the Board of Supervisors
+Former External Supervisor
+224
+47
+271
+272
+272
+LI Mingtian (xiii)
+Former Employee Representative Supervisor
+38
+Total
+726
+GE Rongrong
+38
+99
+2,690
+2,705
+28,114
+28,898
+Amortisation
+2,295
+2,211
+Other administrative expenses (ii)
+Business tax and surcharges
+21,219
+23,709
+42,320
+41,351
+Others
+12,714
+10,483
+220,835
+218,674
+(i)
+Utility expenses
+(ii)
+3,556
+Repairs and maintenance charges
+Salaries and bonuses
+2014
+72,721
+502
+70,284
+Staff benefits
+27,563
+28,541
+Post-employment benefits defined contribution plans (i)
+13,889
+13,197
+114,173
+112,022
+Premises and equipment expenses:
+14,560
+16,094
+Lease payments under operating leases in respect of land and buildings
+7,349
+6,543
+3,515
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+Auditor's remuneration (including related assurance services for the Group and its subsidiaries and overseas branches)
+of RMB167 million for the year (2014: RMB161 million) is included in other administrative expenses.
+Depreciation
+162
+448
+99
+547
+JIANG Jianqing
+YI Huiman
+Chairman of the Board of Directors,
+Executive Director
+QIAN Wenhui (i)
+ZHANG Hongli (ii)
+WANG Xiquan (iii)
+before tax
+RMB'000
+(4)=(1)+(2)+(3)
+WANG Xiaoya
+448
+547
+374
+83
+457
+403
+403
+99
+Vice Chairman of the Board of Directors,
+Executive Director, President
+Chairman of the Board of Supervisors
+Executive Director, Vice President
+Executive Director, Vice President
+Non-executive Director
+RMB'000
+(3)
+99
+502
+(2)
+ICBC
+13. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+Position
+Year ended 31 December 2015
+Contributions
+Remuneration
+to defined
+Total
+Name
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+contribution
+emoluments
+(before tax)
+schemes
+Fees
+RMB'000
+paid
+RMB'000
+(1)
+305,880
+1,676
+(1,860)
+Commodity derivatives and others
+38,407
+54,475
+1,079,702
+299
+18,045
+3,711
+18,354
+(1,002)
+439
+93,620
+(30,282)
+137,193
+54,607
+2,286
+2,286
+Forward contracts
+(1,860)
+1,676
+18,354
+95,726
+134,907
+54,607
+Swap contracts
+1,357,589
+Interest rate contracts:
+95,726
+303,594
+five years
+21,123
+26,960
+27,903
+6,019
+Option contracts purchased
+3,331
+56,735
+662,144
+836,204
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+Over
+five years
+1,558,414
+32,979
+one year
+months
+2,633,063
+33,290
+(33,144)
+2014
+Notional amounts with remaining life of
+Fair values
+174,649
+Over three
+Within
+months
+one year
+three
+but within
+but within
+Over
+2,233,563
+Notional amounts with remaining life of
+78,484
+Within
+Over
+Over three
+Fair values
+2015
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Bank
+ICBC
+172
+(24,191)
+24,048
+(1,383)
+2,405
+239,258
+2,529,568
+(2,387)
+2,410
+362,398
+2
+(5)
+(18,839)
+75,905
+100,035
+152,860
+months
+Commodity derivatives and others
+52,507
+1,304
+1,299,273
+944,733
+247,508
+33,598
+219
+38,054
+185,228
+2,470
+one year
+but within
+1,165,921
+986,688
+(623)
+51,917
+238
+29,184
+22,495
+Option contracts written
+(29,659)
+27,457
+446
+55,898
+26
+42,911
+12,961
+Option contracts purchased
+2,125,748
+2,470
+but within
+Over
+months
+one year
+five years
+five years
+three
+Total
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+951,232
+1,093,826
+78,220
+Assets
+78
+4,155
+3,133
+(122)
+221
+17,786
+2,192
+11,300
+1,605
+2,689
+(60)
+265
+104
+84
+77
+Equity derivative instruments
+(30)
+2014
+20
+1,018
+2,347
+Currency swap contracts
+(32)
+201
+13,366
+2,192
+10,406
+503
+265
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+790
+Notional amounts with remaining life of
+Fair values
+Over three
+25
+17,236
+25
+Currency forward contracts
+98
+9,530
+6,508
+3,022
+Currency swap contracts
+(31)
+190
+6,208
+3,734
+1,778
+378
+318
+Interest rate swap contracts
+Over
+Within
+three
+months
+but within
+one year
+but within
+five years
+Over
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+months
+five years
+one year
+months
+1,791
+266,507
+10,151
+113,972
+74,618
+67,766
+(4)
+7,455
+819
+5,253
+1,383
+(2,054)
+1,791
+259,052
+10,151
+113,153
+69,365
+2,399
+5,532
+(70)
+845,356
+691,503
+56,735
+(2,058)
+3,331
+18,123
+(18,909)
+Interest rate contracts:
+Swap contracts
+Forward contracts
+66,383
+1,596,925
+Option contracts written
+Commodity derivatives and others
+52,507
+Over
+but within
+one year
+months
+but within
+three
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2015
+Group
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out
+below.
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts and equity derivatives that are
+used to protect against exposures to variability of future cash flows.
+Cash flow hedges
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+1,304
+1,095,727
+818,628
+172,011
+219
+13,701
+236,635
+182,605
+2,378
+2,100,067
+22,292
+(22,324)
+Annual Report 2015
+173
+Notes to Financial Statements
+(1,357)
+819
+71,096
+5,198
+177,973
+139,799
+181,910
+6,300
+71,096
+6,300
+Banks and other financial institutions
+Others
+Other debt instruments:
+Debt securities
+2014
+101,391
+2015
+22,009
+101,560
+22,224
+2014
+137,911
+2015
+Group
+23. FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+32,865
+115,950
+33,990
+31,278
+115,950
+1,523
+2,634
+31,292
+116,930
+132,465
+Unlisted
+14,848
+Listed outside Hong Kong
+64
+Bank
+210,434
+312,455
+206,282
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2015
+Group
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which meet
+the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2015, derivative assets
+and derivative liabilities which meet the criteria for offsetting were RMB65,861 million and RMB64,354 million respectively,
+and the net derivative assets and net derivative liabilities were RMB39,774 million and RMB38,267 million respectively.
+At the end of the reporting period, the Group and the Bank had derivative financial instruments as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+171
+Annual Report 2015
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+markets participates at measured date.
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+24. DERIVATIVE FINANCIAL INSTRUMENTS
+310,398
+310,398
+Analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+210
+64
+3,250
+206,974
+210,434
+210
+563
+205,509
+3,206
+307,192
+312,455
+206,282
+62
+3,312
+309,081
+687
+Listed in Hong Kong
+Debt securities analysed into:
+banks and other
+financial institutions
+Placements with
+Due from
+banks and other
+financial institutions
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+At 31 December 2015
+Charge for the year
+At 31 December 2014 and 1 January 2015
+Charge/(reversal) for the year
+At 1 January 2014
+Bank
+368
+39
+329
+111
+13
+98
+3,340
+Due from
+banks and other
+financial institutions
+Placements with
+banks and other
+financial institutions
+Total
+Total
+183
+48
+249
+(40)
+8
+231
+26
+257
+66
+Within
+183
+247
+32,865
+115,950
+34,373
+132,838
+383
+373
+Equity investments
+32,865
+115,950
+33,990
+132,465
+Debt securities
+2014
+2015
+2014
+2015
+Bank
+48
+(38)
+10
+231
+26
+257
+64
+98
+105
+329
+33
+362
+22. FINANCIAL ASSETS HELD FOR TRADING
+Group
+7
+11,219
+months
+three
+months
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+one year
+but within
+but within
+three
+months
+one year
+months
+Within
+Over
+Forward and swap contracts
+Over three
+Notional amounts with remaining life of
+2014
+(76,826)
+78,870
+(9,665)
+15,274
+1,003,663
+5,881,704
+1,460
+167,216
+(28,236)
+26,989
+2,003,186
+161,466
+984,986
+44,352
+1,169,459
+266,823
+2,262,389
+Fair values
+1,015,906
+753,091
+92,944
+Forward contracts
+(2,382)
+2,408
+345,162
+33,598
+152,041
+88,816
+70,707
+Swap contracts
+Interest rate contracts:
+(140)
+(20,421)
+19,233
+1,927,912
+4,237
+93,344
+792,191
+1,038,140
+4,237
+Option contracts purchased
+12,670
+32,181
+301
+1,866,178
+45,152
+2,282,640
+19,068
+165
+Option contracts written
+9,564
+6,919
+99
+16,582
+(20,281)
+691,028
+Commodity derivatives and others
+567,384
+1,302,262
+(1,203)
+104,389
+283
+53,240
+50,866
+Option contracts written
+1,074
+106,099
+778
+65,470
+39,851
+Option contracts purchased
+(37,722)
+35,533
+2,664,367
+4,290
+but within
+but within
+Over
+one year
+five years
+five years
+1,428,182
+Total
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+1,211,545
+1,309,472
+139,060
+Assets
+one year
+140,121
+2,874,855
+289,350
+(46)
+12,785
+16
+7,383
+5,386
+Option contracts written
+101
+13,473
+8,059
+28
+5,386
+Option contracts purchased
+(111)
+119
+585,736
+322,529
+36,607
+(38,925)
+Interest rate contracts:
+Swap contracts
+209,289
+373,438
+4,290
+647,015
+1,391,192
+26,769
+(28,079)
+Forward contracts
+69,289
+193,918
+161,450
+6,911
+assessed
+3,734
+(114,893)
+(22,767)
+reversal of impairment allowances
+(861)
+861
+193,927
+134,411
+59,516
+56,267
+18,657
+37,610
+240,959
+201,894
+39,065
+(137,660)
+- impairment allowances charged
+-impairment allowances transferred
+At 1 January 2014
+Total
+assessed
+ICBC
+Collectively
+Individually
+Group
+Movements of allowance for impairment losses during the year are as follows:
+10,184,215
+11,026,476
+10,768,750
+11,652,812
+(251,162)
+(272,556)
+Impairment loss:
+Accreted interest on impaired loans (note 6)
+(2,779)
+(2,779)
+(50,365)
+414
+88
+(140,118)
+(4,156)
+(902)
+(111,066)
+902
+(29,052)
+(4,156)
+326
+Recoveries of loans and advances previously written off
+At 31 December 2015
+Acquisition of subsidiaries
+Accreted interest on impaired loans (note 6)
+reversal of impairment allowances
+-impairment allowances transferred
+Write-offs
+226,140
+134,262
+91,878
+― impairment allowances charged
+86,022
+Write-offs
+(33,875)
+Recoveries of loans and advances previously written off
+1,224
+(4,489)
+274
+(38,364)
+(257,581)
+1,498
+41,245
+216,336
+257,581
+Impairment loss:
+63,728
+22,294
+At 31 December 2014 and 1 January 2015
+(280,654)
+Less: Allowance for impairment losses
+10,435,377
+2,983
+Loans
+133,752
+308,984
+133,752
+304,488
+Bills
+122,478
+483,892
+251,777
+638,863
+Securities
+Reverse repurchases analysed by collateral:
+259,213
+792,876
+388,512
+943,351
+792,876
+259,213
+Reverse repurchases analysed by
+counterparty:
+Banks
+Other financial institutions
+2,983
+569,932
+561,954
+230,922
+373,419
+155,920
+230,922
+28,291
+232,592
+(9,931)
+943,351
+792,876
+11,299,032
+11,026,331
+11,933,466
+344,099
+511,707
+350,274
+522,052
+3,007,959
+7,083,319
+7,315,786
+3,471,539
+7,612,592
+3,063,465
+3,541,862
+7,869,552
+Discounted bills
+Personal loans
+Corporate loans and advances
+2014
+259,213
+176
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(i)
+(ii)
+388,512
+In accordance with master repo agreements and related supplementary agreements, the Group offsets reverse
+repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and presents
+net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the financial
+statement. As at 31 December 2015, reverse repurchase agreements and repurchase agreements which meet
+the criteria for offsetting were RMB572,560 million and RMB597,258 million respectively (31 December 2014:
+RMB385,031 million and RMB429,705 million respectively), and the net reverse repurchase agreements and net
+repurchase agreements were RMB137,066 million and RMB161,764 million, respectively (31 December 2014:
+RMB110,748 million and RMB155,422 million, respectively).
+26. LOANS AND ADVANCES TO CUSTOMERS
+Group
+Bank
+2015
+2014
+2015
+As part of the reverse repurchase agreements, the Group has received securities that it is allowed to sell or repledge in
+the absence of default by their owners. At 31 December 2015, the Group had received securities with a fair value of
+approximately RMB140,834 million on such terms (31 December 2014: RMB189,195 million). Of these, securities with
+a fair value of approximately RMB168,826 million have been repledged under repurchase agreements (31 December
+2014: RMB168,769 million). The Group has an obligation to return the securities to its counterparties. If the collateral
+received declines in value, the Group may, in certain circumstances, require additional collateral.
+468,462
+(60,296)
+51,499
+At 31 December 2014 and 1 January 2015
+1,498
+(38,364)
+(4,489)
+274
+1,224
+Recoveries of loans and advances previously written off
+(33,875)
+Write-offs
+(2,779)
+(2,779)
+Accreted interest on impaired loans (note 6)
+(137,660)
+(22,163)
+(115,497)
+177,163
+reversal of impairment allowances
+193,927
+38,254
+155,673
+56,267
+16,091
+40,176
+240,959
+68,542
+172,417
+― impairment allowances charged
+Impairment loss:
+At 1 January 2014
+Total
+Personal loans
+_
+80,418
+257,581
+Impairment loss:
+ICBC
+178
+280,654
+93,167
+187,487
+At 31 December 2015
+1,089
+368
+721
+Recoveries of loans and advances previously written off
+414
+(60,296)
+(9,931)
+(50,365)
+Write-offs
+42
+372
+Acquisition of subsidiaries
+63,752
+22,270
+86,022
+― impairment allowances charged
+171,571
+54,569
+advances and
+discounted bills
+226,140
+(107,819)
+(32,299)
+(140,118)
+Accreted interest on impaired loans (note 6)
+(4,156)
+(4,156)
+reversal of impairment allowances
+loans and
+Corporate
+Group
+Accreted interest on impaired loans
+(137,146)
+(114,864)
+(22,282)
+(856)
+856
+192,248
+133,867
+58,381
+55,102
+18,147
+36,955
+235,485
+198,075
+37,410
+reversal of impairment allowances
+― impairment allowances transferred
+368
+229,155
+1,089
+280,654
+Annual Report 2015
+177
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(2,772)
+Bank
+Collectively
+assessed
+assessed
+Total
+At 1 January 2014
+Impairment loss:
+- impairment allowances charged
+Individually
+721
+Write-offs
+Recoveries of loans and advances previously written off
+Movements of allowance for impairment losses during the year analysed into those attributable to corporate loans and
+advances and discounted bills and personal loans are as follows:
+272,556
+1,080
+(4,144)
+(60,028)
+(9,867)
+359
+224,682
+(139,423)
+(110,879)
+(28,544)
+(4,144)
+(50,161)
+721
+47,874
+At 31 December 2015
+Recoveries of loans and advances previously written off
+Write-offs
+(890)
+890
+223,909
+133,877
+90,032
+Accreted interest on impaired loans
+1,213
+(4,408)
+268
+(2,772)
+(38,134)
+1,481
+At 31 December 2014 and 1 January 2015
+39,080
+(33,726)
+212,082
+Impairment loss:
+62,378
+22,108
+84,486
+― impairment allowances charged
+-impairment allowances transferred
+reversal of impairment allowances
+251,162
+996,333
+79,950
+52,982
+Fair values
+Notional amounts with remaining life of
+Over three
+2015
+Group
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+7
+(129)
+(73)
+18
+136
+91
+2014
+2015
+Group
+- Hedged items attributable to the hedged risk
+Over
+- Hedging instruments
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates and exchange rates. Interest rate swaps and currency swaps are used as hedging
+instruments to hedge the interest risk and currency risk of financial assets and financial liabilities, respectively.
+Fair value hedges
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+174
+There is no ineffectiveness recognised in profit or loss that arises from the cash flow hedge for the current year (2014: Nil).
+(3)
+103
+10,038
+259
+156
+6,601
+3,022
+Gain/(loss) arising from fair value hedges, net:
+Within
+three
+months
+but within
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2014
+(133)
+(133)
+Liabilities
+Assets
+311
+311
+22,342
+2,896
+18,828
+339
+279
+one year
+but within
+Over
+months
+one year
+five years
+25
+five years
+Interest rate swap contracts
+279
+339
+18,828
+2,896
+22,342
+Total
+25
+Currency forward contracts
+98
+220
+2,081
+Currency swap contracts
+4
+758
+245
+513
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+five years
+five years
+one year
+months
+Over
+but within
+15,763
+288
+(31)
+Bank
+2015
+Notional amounts with remaining life of
+2,301
+Fair values
+Over
+Within
+months
+one year
+three
+but within
+Over three
+three
+20
+220
+9,530
+6,508
+3,022
+Currency swap contracts
+(3)
+5
+483
+259
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+156
+one year
+68
+Interest rate swap contracts
+months
+but within
+513
+245
+3,059
+24
+2014
+Notional amounts with remaining life of
+2,081
+Fair values
+Over
+Within
+months
+one year
+three
+but within
+Over three
+but within
+but within
+months
+731
+769
+1,631
+3,819
+Interest rate derivatives
+21,259
+17,616
+22,676
+24,281
+Currency derivatives
+22,568
+26,194
+24,882
+45,372
+risk-weighted assets
+Counterparty credit default
+2014
+Liabilities
+395
+837
+8,297
+3,093
+12,622
+Credit derivatives
+51
+The credit risk-weighted assets in respect of the above derivatives of the Group and the Bank as at the end of the reporting
+date are as follows:
+Group
+Bank
+2015
+2014
+2015
+(148)
+Assets
+75
+7,207
+Cash advanced as collateral on securities
+borrowing
+2014
+259,213
+2015
+792,876
+388,512
+943,351
+Reverse repurchases (i)
+2014
+2015
+Bank
+Group
+Reverse repurchase agreements comprise reverse repurchases of securities, bills, loans, and cash advanced as collateral on
+securities borrowing.
+25. REVERSE REPURCHASE AGREEMENTS
+The credit risk-weighted assets represent the counterparty credit risk associated with derivative transactions and are
+calculated with reference to Regulation Governing Capital of Commercial Banks (Provisional) promulgated by the
+CBRC, which includes counterparty credit default risk-weighted assets and credit value adjustment.
+(i)
+36,967
+42,269
+14,399
+565
+5,541
+568
+Netting settled credit default
+risk-weighted assets
+9,990
+Commodity derivatives and others
+10
+10
+Credit value adjustment
+20,332
+65,704
+17,717
+42,599
+16,075
+2,268
+1,778
+Total
+five years
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2015
+Bank
+(217)
+67
+13,812
+3,688
+8,748
+906
+470
+(217)
+51
+13,743
+3,688
+one year
+five years
+Over
+five years
+Total
+Assets
+Liabilities
+Within
+Currency swap contracts
+69
+16
+Interest rate swap contracts
+470
+837
+8,748
+69
+five years
+one year
+but within
+one year
+months
+Over
+but within
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2014
+Interest rate swap contracts
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+but within
+Interest rate swap contracts
+162
+one year
+282
+five years
+Over
+five years
+three
+months
+15,290
+Total
+18,360
+Assets
+73
+Liabilities
+(99)
+Annual Report 2015
+175
+2,626
+170
+months
+Charge for the year
+2,844,561
+3,322,537
+2,879,564
+3,136
+202
+6,467
+11,054
+18,232
+202
+3,287,130
+11,054
+37,313
+Mandatory reserves with central banks of
+overseas countries or regions (ii)
+2,946,700
+337,092
+2,535,503
+291,537
+337,092
+291,537
+Other restricted balances with the PBOC (ii)
+Fiscal deposits with the PBOC
+3,059,633
+2,991,619
+2015
+2014
+2015
+Bank
+Group
+21. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+3,523,622
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+169
+Annual Report 2015
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks
+and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits
+mainly consist of deposits placed with the PBOC. As at 31 December 2015, the mandatory deposit reserve ratios of
+the domestic branches of the Bank in respect of customer deposits denominated in RMB and foreign currencies were
+consistent with the requirement of the PBOC. The amounts of mandatory reserve deposits placed with the central
+banks of those countries or regions outside Mainland China are determined by local jurisdictions.
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+3,473,327
+Financial Statements for the year ended 31 December 2015
+2014
+2,967,011
+Restricted balances with central banks:
+central banks:
+Cash and unrestricted balances with
+2014
+2015
+2014
+2015
+Cash on hand
+Bank
+(ii)
+(i)
+20. CASH AND BALANCES WITH CENTRAL BANKS
+Diluted earnings per share was computed from dividing the profit attributable to ordinary equity holders of the parent
+company (after adjusting for interest expense on the convertible bonds) by the weighted average number of ordinary shares
+outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of
+all the dilutive potential ordinary shares into ordinary shares. As approved by the CBRC and the China Securities Regulatory
+Commission, the Bank issued RMB25 billion A share convertible bonds on 31 August 2010. As of the end of the financial
+reporting period, the balance of outstanding convertible bonds of the bank is nil.
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+At 31 December 2015
+Group
+Mandatory reserves with central banks (ii)
+85,226
+81,631
+186,197
+147,058
+201,085
+180,069
+20,477
+64,915
+88,714
+31,935
+80,027
+512
+80,436
+2,946
+Surplus reserves with central banks (i)
+Unrestricted balances with central banks of
+overseas countries or regions
+85,693
+91,897
+Due from banks and other financial
+2,539,660
+Banks operating in Mainland China
+467,637
+582,331
+478,529
+472,273
+132,904
+228,299
+(39)
+116,030
+Banks and other financial institutions
+operating outside Mainland China
+305,074
+307,762
+272,392
+284,335
+Mainland China
+132,563
+Other financial institutions operating in
+(26)
+(26)
+At 31 December 2014 and 1 January 2015
+institutions:
+Charge/(reversal) for the year
+At 1 January 2014
+Group
+As at 31 December 2015, the amount of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group is RMB123,397 million (31 December 2014: RMB163,700 million). During
+the year of 2015, the maximum exposure of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group is RMB199,316 million (2014: RMB176,624 million). The transactions were
+conducted in the ordinary course of business under normal terms and conditions and at market rates.
+Movements of the allowance for impairment losses during the year are as follows:
+(33)
+737,740
+782,776
+683,793
+467,611
+582,298
+478,503
+472,234
+772,568
+29,659
+Less: Allowance for impairment losses
+46,270
+88,085
+86,828
+100,864
+88,702
+1,331
+1,358
+211,888
+1,331
+Mainland China
+Other financial institutions operating in
+180,944
+102,413
+202,309
+121,745
+1,441
+304,504
+Banks and other financial institutions
+operating outside Mainland China
+270,129
+190,599
+Banks operating in Mainland China
+institutions:
+Placements with banks and other financial
+190,270
+304,273
+90,107
+211,559
+(329)
+(231)
+(329)
+Less: Allowance for impairment losses
+270,360
+(231)
+55,375
+145,652
+134,603
+2015
+121,980
+Others
+158,956
+352,143
+Bank
+338,839
+319,108
+Analysed into:
+Listed outside Hong Kong
+Unlisted
+Group
+85,000
+331,731
+85,000
+Group
+85,000
+2014
+The receivables are stated at amortised cost and comprise the following:
+(a) Receivables
+Bank
+2015
+2014
+2015
+2014
+Huarong bonds
+(i)
+108,187
+112,128
+108,187
+112,128
+Special government bond
+85,000
+2015
+(95)
+54,900
+(b) Held-to-maturity investments
+Held-to-maturity investments are stated at amortised cost and comprise the following:
+Group
+Bank
+2015
+2014
+2015
+2014
+Debt securities
+2,870,448
+2,566,532
+Less: Allowance for impairment losses
+2,870,353
+(142)
+2,566,390
+3,958,201
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2014
+ICBC
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the MOF to the Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+Others include government, financial and corporate bonds, asset management plans with fixed or determined
+payments. They will mature from January 2016 to July 2027 and bear interest rates ranging from 2.10% to 9.50%
+per annum. During the reporting period, the amounts which have been matured have been repaid without overdue
+history.
+23,720
+54,900
+23,720
+297,243
+308,011
+283,939
+295,388
+352,143
+331,731
+338,839
+319,108
+(i)
+(ii)
+(iii)
+The Huarong bonds are a series of long term bonds issued China Huarong Asset Management Co., Ltd ("Huarong")
+in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the
+issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are non-negotiable, with a
+tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank received a notice from the
+Ministry of Finance of the People's Republic of China (the "MOF") that the maturity dates of the Huarong bonds were
+extended for another ten years and the interest rate remains unchanged. Additionally, the MOF will continue providing
+funding in support of the repayment of the principal and interest of the bonds. As at 31 December 2015, the Bank
+received early repayments amounting to RMB204,809 million accumulated.
+180
+4,450,998
+impairment losses are:
+4,666,691
+(39,080)
+Collectively assessed
+(229,155)
+(216,336)
+(224,682)
+(212,082)
+(280,654)
+(257,581)
+(272,556)
+(251,162)
+Net loans and advances for which
+allowance for impairment losses are:
+Individually assessed
+84,281
+Collectively assessed
+(47,874)
+11,568,531
+(41,245)
+Individually assessed
+2014
+2015
+2014
+Loans and advances for which allowance for
+2,813,118
+(27)
+Individually assessed
+135,780
+Collectively assessed
+11,797,686
+92,348
+10,933,983
+11,933,466
+11,026,331
+130,375
+11,168,657
+11,299,032
+88,854
+10,346,523
+10,435,377
+Less: Allowance for impairment losses:
+(51,499)
+4,086,409
+51,103
+10,717,647
+Identified impaired loans and advances
+352,143
+331,731
+338,839
+319,108
+Held-to-maturity investments
+(b)
+2,870,353
+2,566,390
+2,813,091
+2,548,977
+Available-for-sale financial assets
+1,444,195
+1,188,288
+1,299,068
+1,090,116
+Receivables
+11,652,812
+2014
+2014
+Percentage of impaired loans and advances
+179,518
+1.50%
+10,768,750
+124,497
+1.13%
+82,501
+10,943,975
+11,026,476
+173,857
+1.54%
+49,774
+10,134,441
+10,184,215
+120,756
+1.16%
+Annual Report 2015
+179
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+27. FINANCIAL INVESTMENTS
+Group
+Bank
+2015
+2015
+2,549,001
+(24)
+448
+2,548,977
+1,402,673
+1,172,934
+1,296,903
+1,087,419
+Equity investments analysed into:
+Listed in Hong Kong
+900,327
+Listed outside Hong Kong
+508
+1,391
+6,730
+3,040
+1,433
+1,965
+Unlisted
+1,158,238
+938,040
+1,189,131
+1,444,195
+1,188,288
+1,299,068
+1,090,116
+Debt securities analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+44,362
+169,180
+23,843
+211,051
+21,770
+11,701
+116,895
+175,391
+6,691
+7,251
+732
+13,929
+(d) Movements of allowance for impairment losses of held-to-maturity investments and
+available-for-sale equity investments measured at cost during the year are as follows:
+Group
+Available-
+At 1 January 2014
+Charge for the year
+Reversal
+Bank
+Available-
+Held-to-
+for-sale
+maturity
+investments
+equity
+investments
+Total
+Held-to-
+maturity
+investments
+for-sale
+equity
+investments
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(606)
+ICBC
+(ii) Certain available-for-sale unlisted equity investments which do not have any quoted market prices and whose fair
+values cannot be measured reliably are stated at cost less any impairment losses. There is no active market for these
+investments and it is the Group's intention to dispose of them as opportunities arise. During the year, the Group did
+not dispose of these equity investments (2014: RMB244 million). No gain was recognised on disposal of these equity
+investments during the year (2014: RMB213 million).
+11,682
+2,165
+732
+2,697
+Market value of listed securities:
+Debt securities
+213,542
+Equity investments
+7,238
+220,780
+234,894
+4,431
+239,325
+138,665
+1,433
+140,098
+187,092
+1,965
+189,057
+(i)
+When impairment of an available-for-sale investment measured at fair value occurs, any impairment loss recognised is
+recorded in the carrying amount directly. As at 31 December 2015, the available-for-sale financial assets measured at
+fair value include impaired debt securities whose carrying amount was RMB141 million (31 December 2014: RMB75
+million), and individually impaired equity investments whose carrying amount was RMB264 million (31 December
+2014: RMB593 million), with the reversal of impairment loss recognised in profit or loss for the year of RMB37
+million (2014: accrual of impairment loss of RMB52 million) on available-for-sale debt securities; and the accrual of
+impairment loss recognised in profit or loss for the year of RMB33 million (2014: RMB111 million) on available-for-sale
+equity investments.
+182
+(606)
+(670)
+(673)
+1,690,999
+2,870,353
+57,116
+2,566,390
+2,798,223
+2,813,091
+1,693,463
+2,548,977
+875,391
+Market value of listed debt securities
+14,868
+855,514
+For the year ended 31 December 2015, the Group disposed of securities classified as held-to-maturity investments with a
+total carrying amount of RMB25,472 million (31 December 2014: RMB16,370 million) prior to their maturity. The carrying
+amount of held-to-maturity securities sold accounted for 0.88% (31 December 2014: 0.62%) of the total amount of the
+Group's held-to-maturity investments.
+Annual Report 2015
+181
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2,813,237
+(c) Available-for-sale financial assets
+854,631
+863,914
+Analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+Group
+Bank
+2015
+2014
+2015
+2014
+21,318
+11,477
+3,830
+883
+35,798
+11,038
+2,813,091
+Available-for-sale financial assets comprise the following:
+Bank
+10,889
+1,433
+1,965
+838
+793
+732
+732
+1,063
+1,061
+1,061
+1,061
+2015
+402
+277
+277
+13,091
+Group
+Less: Allowance for impairment losses of
+equity investments, at cost
+Debt for equity swaps
+2015
+2014
+2015
+2014
+Debt securities, at fair value (i)
+1,402,673
+1,172,934
+1,296,903
+1,087,419
+Other debt instruments, at fair value
+27,593
+3,672
+Equity investments:
+At fair value (i)
+At cost (ii)
+Others
+Bank
+vehicles
+272,556
+13,331
+14,259
+55
+172
+514
+600
+Held overseas
+281
+293
+581
+615
+Held in Hong Kong
+12,236
+13,044
+12,236
+13,509
+13,044
+12,572
+Held in the PRC (other than Hong Kong)
+71,366
+9
+8
+571
+602
+Held overseas
+69
+66
+279
+305
+Held in Hong Kong
+70,751
+70,331
+70,751
+70,459
+Medium term leases (10 to 50 years):
+71,601
+Held in the PRC (other than Hong Kong)
+2014
+17,751
+85,669
+At 31 December 2015
+At 31 December 2014
+Net carrying amount:
+100,337
+49,143
+6,177
+41
+44,976
+At 31 December 2015
+(2,473)
+(2,108)
+(89)
+(276)
+2,681
+Long term leases (over 50 years):
+20,767
+86,838
+2015
+2014
+2015
+Bank
+Group
+The carrying value of the Group's and the Bank's properties and buildings is analysed based on the remaining terms of the
+land leases as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+187
+Annual Report 2015
+129,669
+20,575
+2,566
+19,690
+126,868
+Disposals
+70,405
+Short term leases (less than 10 years):
+(3,166)
+at fair value through profit or loss
+Change in fair value of financial instruments
+(1,341)
+(5,457)
+(9,670)
+(38,283)
+financial assets
+Change in fair value of available-for-sale
+25,807
+104,244
+28,443
+113,845
+Allowance for impairment losses
+Deferred income tax assets:
+(790)
+tax assets/
+(liabilities)
+(2,400)
+Accrued staff costs
+ICBC
+188
+24,758
+99,477
+21,066
+84,206
+(5,554)
+(22,701)
+(4,091)
+(16,886)
+Others
+6,448
+25,791
+7,174
+28,696
+(602)
+70,829
+income
+Deductible/
+(taxable)
+temporary
+differences
+2,941
+88,566
+68
+68
+84
+85
+Held overseas
+21
+34
+21
+34
+2,179
+2,822
+2,179
+2,822
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+2,284
+Deferred
+2,924
+87,216
+tax assets/
+(liabilities)
+differences
+temporary
+income
+Deferred
+Deductible/
+(taxable)
+2014
+2015
+Group
+31. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+As at 31 December 2015, the net carrying value of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB22,850 million (31 December 2014: RMB15,598 million).
+As at 31 December 2015, the net carrying value of aircraft and vessels leased out by the Group under operating leases was
+RMB85,763 million (31 December 2014: RMB62,957 million).
+As at 31 December 2015, the process of obtaining the title for the Group's properties and buildings with an aggregate net
+carrying value of RMB11,852 million (31 December 2014: RMB10,781 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+85,669
+86,838
+2,268
+Group
+14,219
+994
+Impairment loss:
+- impairment allowances charged
+167,580
+67,905
+235,485
+39,144
+15,958
+55,102
+154,131
+38,117
+192,248
+- reversal of impairment allowances
+(114,987)
+(22,159)
+(137,146)
+At 1 January 2014
+Accreted interest on impaired loans
+Total
+loans and
+advances and
+discounted bills
+At 1 January 2014
+Cost:
+Total
+Total
+and motor
+Leasehold
+improvements
+Construction
+in progress
+Properties and
+buildings
+Office
+equipment
+Bank
+224,426
+Bank
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Corporate
+Personal loans
+115,872
+(2,772)
+Write-offs
+(107,154)
+(32,269)
+(139,423)
+Accreted interest on impaired loans
+(4,144)
+Write-offs
+Recoveries of loans and advances previously written off
+(50,161)
+721
+(9,867)
+359
+(4,144)
+(60,028)
+1,080
+At 31 December 2015
+180,188
+92,368
+reversal of impairment allowances
+(2,772)
+223,909
+169,487
+(33,726)
+(4,408)
+Recoveries of loans and advances previously written off
+1,213
+268
+(38,134)
+1,481
+At 31 December 2014 and 1 January 2015
+171,439
+79,723
+251,162
+Impairment loss:
+62,333
+22,153
+84,486
+― impairment allowances charged
+54,422
+7,783
+18,291
+57,589
+At 31 December 2014 and 1 January 2015
+(293)
+Disposals
+5,284
+Depreciation and impairment charge for the year
+34,819
+At 1 January 2014
+Accumulated depreciation and impairment:
+230,006
+69,718
+8,743
+19,731
+131,814
+At 31 December 2015
+(3,765)
+39,810
+(2,128)
+➢'གླུ¥¢
+4,370
+5,442
+Depreciation and impairment charge for the year
+88,591
+43,468
+5,272
+41
+(2,437)
+(2,083)
+(32)
+(29)
+13,896
+7,678
+934
+77,132
+37,873
+70
+7,096
+(90)
+(1,238)
+(61)
+(77)
+(671)
+Disposals
+165
+(6,096)
+5,931
+CIP transfer in/out)
+19,653
+8,714
+918
+5,674
+4,347
+Additions
+198,848
+(2,233)
+(309)
+(3,042)
+125,479
+Disposals
+187
+(6,105)
+5,918
+CIP transfer in/(out)
+18,312
+7,424
+880
+8,353
+1,655
+Additions
+215,459
+64,235
+7,953
+17,792
+At 31 December 2014 and 1 January 2015
+142
+2015
+945
+20.08%
+20.08%
+Group's share of net assets of the associate
+12,954
+15,382
+Goodwill
+76,606
+8,788
+Carrying amount of the Group's interest in Standard Bank
+in the consolidated financial statements
+21,742
+26,706
+(ii)
+The following tables illustrate the summarised financial information of the associates that are not individually material
+to the Group:
+11,324
+64,508
+Gross amounts of net assets of the associate attribute to the parent company
+Group's effective interest
+Reconciled to the Group's interests in the associate
+934,306
+74,515
+86,730
+42,950
+48,012
+11,197
+10,229
+826
+187
+Total comprehensive income
+12,023
+10,416
+Dividends received from the associate
+4,950
+5,061
+2015
+2014
+Aggregate amounts of the Group's share of those associates:
+Profit from continuing operations
+22,095
+27,005
+All of the above associates are accounted for using the equity method in the consolidated financial statements.
+(b) Interest in joint ventures
+The Group has interests in a number of individually immaterially joint ventures. The following tables illustrate the
+summarised financial information of the joint ventures that are not individually material to the Group:
+2015
+2014
+Aggregate carrying amount of individually immaterial joint ventures
+in the consolidated financial statements
+2,090
+1,914
+Aggregate amounts of the Group's share of those joint ventures:
+Profit from continuing operations
+Other comprehensive income
+59
+Interest in associates in the consolidated financial statements
+749,889
+(348)
+Less: Allowance for impairment losses
+22
+29
+Other comprehensive income
+-
+Total comprehensive income
+22
+29
+Reconciliation of carrying amounts to the Group's total interests in the associates:
+2015
+Carrying amount of material associates - Standard Bank
+21,742
+2014
+26,706
+Carrying amount of individually immaterial associates
+701
+647
+(348)
+1,021,036
+824,404
+Other comprehensive income
+Share of net assets
+Goodwill
+15,709
+16,954
+8,824
+12,313
+24,533
+29,267
+Less: Allowance for impairment losses
+(348)
+(348)
+24,185
+28,919
+Shares listed outside Hong Kong, at cost
+(a) Interest in associates
+2014
+(i)
+2015
+28,919
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Investment in associates and joint ventures comprise the following:
+Interest in associates
+Interest in joint ventures
+Group
+2015
+2014
+(a)
+22,095
+27,005
+(b)
+2,090
+1,914
+24,185
+Group
+74
+Particulars of the Group's only material associate is as follows:
+Standard Bank Group Limited
+("Standard Bank") (i)
+The market value of the Group's investment in Standard Bank amounts to RMB15,362 million as at 31 December 2015 (31
+December 2014: RMB25,019 million).
+Annual Report 2015
+185
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts in the Group's consolidated financial statements.
+2015
+2014
+Gross amounts of the associate
+Assets
+Liabilities
+Net assets
+Revenue
+Profit from continuing operations
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the
+Group to widen its customer base in Africa.
+Name
+(i)
+Republic of
+Percentage of
+equity interest %
+31 December 31 December
+2015
+20.08
+Bank
+2015
+34,242
+2014
+34,242
+2014
+Voting
+rights %
+31 December
+2015
+Place of
+incorporation/
+registration
+Principal
+activities
+20.08
+20.08
+Johannesburg, Commercial banking
+South Africa
+Total comprehensive income
+59
+All of the above joint ventures are accounted for using the equity method in the consolidated financial statements.
+ཥ ' 'སྤྲེ¥ !,,
+70
+4,614
+38,523
+1,970
+80,319
+1,041
+7,909
+1,796
+16,094
+123
+123
+(35)
+(2,120)
+(22)
+189
+(2,499)
+Acquisition of subsidiaries
+Disposals
+5,562
+333,844
+Accumulated depreciation and
+impairment:
+At 1 January 2014
+35,142
+Depreciation charge for the year
+5,348
+Impairment charge for the year
+Disposals
+(293)
+(29)
+At 31 December 2014 and 1 January 2015
+40,197
+41
+Depreciation charge for the year
+Impairment charge for the year
+92,785
+5,620
+3,867
+7,022
+109,418
+Net carrying amount:
+At 31 December 2014
+87,216
+24,804
+3,042
+21,261
+62,957
+199,280
+At 31 December 2015
+88,566
+26,101
+2,924
+21,072
+50,103
+44,312
+6,585
+45,667
+94,037
+1,073
+7,925
+3,489
+18,049
+324
+324
+97
+286
+(281)
+(108)
+(2,231)
+(658)
+(3,278)
+At 31 December 2015
+41
+Notes to Financial Statements
+71,175
+26,142
+59,730
+34,013
+244,666
+Additions
+4,398
+10,643
+973
+8,731
+29,070
+53,815
+CIP transfer in/(out)
+5,931
+(10,615)
+165
+4,519
+8,257
+Disposals
+24,911
+At 1 January 2014
+186
+ICBC
+74
+30. PROPERTY AND EQUIPMENT
+Group
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Properties and
+buildings
+Construction
+in progress
+Leasehold
+improvements
+Office
+equipment
+and motor
+vehicles
+Aircraft and
+vessels
+Total
+Cost:
+117,755
+9,509
+(671)
+(568)
+188
+4,550
+Acquisition of subsidiaries
+319
+160
+479
+Disposals
+(1,328)
+(350)
+(154)
+(2,276)
+(10,371)
+(14,479)
+At 31 December 2015
+134,233
+(10,658)
+(94)
+5,920
+54,527
+(3,053)
+(778)
+(5,164)
+At 31 December 2014 and 1 January 2015
+127,413
+24,845
+8,662
+65,573
+66,824
+293,317
+Additions
+12,305
+1,001
+7,530
+31,782
+CIP transfer in/(out)
+803
+ICBC
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+00
+100
+KZT8,933 million
+KZT8,933 million
+Almaty, Kazakhstan
+Commercial
+100
+(Almaty) Joint Stock Company
+100
+100
+80
+100
+USD200 million
+USD200 million
+ICBC (London) PLC ("ICBC London")
+00
+100
+banking
+activities
+Hong Kong, the PRC
+Commercial
+(Asia) Limited ("ICBC Asia")
+ICBC International Holdings Limited
+("ICBC International")
+Industrial and Commercial Bank of China
+banking
+100
+100
+180
+100
+HKD4,882 million
+HKD4,882 million Hong Kong, the PRC
+Investment
+London,
+banking
+Commercial
+ICBC Credit Suisse Asset Management
+80
+PT. Bank ICBC Indonesia ("ICBC Indonesia")
+98.61
+98.61
+98.61
+IDR2,692.2 billion
+USD286 million
+Jakarta, Indonesia
+banking
+Commercial
+banking
+Bank ICBC (Joint stock company)
+100
+100
+100
+RUB2,310 million
+RUB2,310 million
+management
+Commercial
+and operations
+Luxembourg
+EUR437 million
+80
+80
+80
+80
+80
+RMB200 million
+RMB433 million
+United Kingdom
+Beijing, the PRC
+banking
+Fund
+Co., Ltd. *
+Industrial and Commercial Bank of China
+(Europe) S.A.
+100
+100
+100
+EUR437 million
+Principal
+invested
+by the Bank
+HKD46,930 million
+HKD36,379 million
+and 1 January 2015
+142
+670
+812
+24
+Charge for the year
+Reversal
+Disposals
+Others
+At 31 December 2015
+(25)
+(25)
+(30)
+(30)
+8
+At 31 December 2014
+3
+Others
+85,763
+58
+801
+859
+41
+41
+(38)
+(38)
+(31)
+(31)
+(195)
+(198)
+(195)
+(198)
+62
+62
+Disposals
+Moscow, Russia
+11
+95
+(In RMB millions, unless otherwise stated)
+Percentage of equity interest % Voting rights %
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Place of
+incorporation/
+registration
+Nominal value of
+issued share/
+paid-in capital
+Amount
+Name
+2015
+2014
+2015
+Industrial and Commercial Bank of China
+100
+100
+100
+Financial Statements for the year ended 31 December 2015
+3
+Notes to Financial Statements
+Annual Report 2015
+673
+768
+27
+606
+633
+2 | | Im
+606
+630
+28. INVESTMENTS IN SUBSIDIARIES
+Unlisted investments, at cost
+Bank
+2015
+2014
+101,066
+80,419
+183
+Commercial
+banking
+ICBC Financial Leasing Co., Ltd. *
+USD50 million
+USD50 million
+Argentina
+Lima, Peru
+banking
+Commercial
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+100
+99.99
+99.99
+Real202 million
+Real202 million
+Sao Paulo, Brazil
+banking
+Commercial
+and investment
+99.99
+100
+100
+ICBC PERU BANK
+80
+RMB8,705 million
+USD309 million
+RMB5,700 million
+USD258 million
+(USA) NA
+Industrial and Commercial Bank of China
+80
+80
+80
+ARS1,345 million
+ARS3,505 million
+Delaware and
+New York,
+United States
+Shanghai, China
+New York,
+United States
+Buenos Aires,
+Broker dealer
+Insurance
+Commercial
+banking
+Commercial
+(Argentina) S.A.("ICBC Argentina")
+Industrial and Commercial Bank of China
+100
+100
+100
+USD309 million
+Istanbul, Turkey
+Commercial
+banking
+Commercial
+("ICBC Turkey")
+banking
+ICBC Standard Bank PLC ("ICBC Standard")
+60
+60
+USD1,083 million
+USD680 million
+London,
+United Kingdom
+Banking
+*
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+Management, result in particulars of excessive length.
+TRY420 million
+80
+92.8169
+ICBC Turkey Bank Anonim Şirketi
+NZD60.38 million
+NZD60.38 million
+(New Zealand) Limited
+Auckland,
+New Zealand
+banking
+Commercial
+banking
+("ICBC New Zealand")
+Industrial and Commercial Bank of China
+100
+100
+100
+MXN664 million
+MXN664 million
+Mexico City, Mexico
+(Mexico) S.A.
+92.8169
+184
+80
+60
+60
+60
+60
+RMB200 million
+RMB120 million
+100
+10
+100
+100
+RMB100 million
+RMB100 million
+Zhejiang, the PRC
+Chongqing, the PRC
+Commercial
+banking
+Commercial
+60
+banking
+60
+Commercial
+Industrial and Commercial Bank of China
+(Macau) Limited ("ICBC Macau")
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd. *
+Chongqing Bishan ICBC Rural Bank
+Co., Ltd. *
+100
+100
+89.33
+89.33
+333
+100
+89.33
+RMB11,000 million
+MOP589 million
+RMB11,000 million
+MOP12,064 million
+Tianjin, the PRC
+Macau, the PRC
+Leasing
+banking
+Industrial and Commercial Bank of China
+(Canada)
+80
+80
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+banking
+Commercial
+(Thai) Public Company Limited
+banking
+Commercial
+banking
+("ICBC Thai")
+Industrial and Commercial Bank of China
+100
+100
+100
+USD50 million
+USD50.25 million
+Financial Services LLC
+ICBC-AXA Assurance Co., Ltd. *
+60
+60
+THB23,711 million
+THB20,132 million
+97.86
+97.86
+80
+CAD158 million
+CAD178.66 million
+Toronto, Canada
+Commercial
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+100
+Industrial and Commercial Bank of China
+100
+00
+100
+MYR331 million
+MYR331 million
+Industrial and Commercial Bank of China
+97.86
+0
+1,909
+1,383,096
+20,142,166
+Total liabilities
+11
+5.3
+33,875
+634,858
+668,733
+13.8
+19,530
+141,336
+160,866
+2.9
+14,345
+493,522
+(%)
+Growth rate
+Less: Operating expenses
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2015
+Operating income
+Non-interest income
+Net interest income
+Item
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In 2015, the Bank explored business growth potentials, actively pressed ahead with reform and innovation, made greater
+effort to increase income and reduce expenditure, implemented strict risk prevention and control, with a focus on serving
+the real economy and meeting the financial requirements of consumers. The profit was generally stable in spite of adversities
+such as rising risk cost and narrower interest spread. The Bank realized a net profit of RMB277,720 million in 2015,
+representing an increase of RMB1,434 million or 0.5% as compared to the previous year. Return on average total assets
+stood at 1.30%, and return on weighted average equities was 17.10%. Operating income amounted to RMB668,733
+million, recording an increase of 5.3%. Specifically, net interest income was RMB507,867 million, growing by 2.9%. Non-
+interest income reached RMB160,866 million, rising by 13.8%. Operating expenses amounted to RMB220,835 million,
+recording an increase of 1.0%, and cost-to-income ratio dropped by 1.24 percentage points to 26.69%. Allowance
+for impairment losses was RMB86,993 million, indicating an increase of 53.3%. Income tax expense grew by 0.2% to
+RMB85,515 million.
+Income Statement Analysis
+FINANCIAL STATEMENTS ANALYSIS
+In 2016, global economy is expected to maintain mild growth, but numerous challenges lie in the way of recovery.
+Developed economies are expected to embrace stabilized growth while emerging economies may face greater uncertainty.
+Chinese economy will step further into the new normal, with economic structural adjustment and economic development
+approach transformation at the core. Chinese government will adhere to the general principle of making steady progress.
+In parallel with expanding total demand appropriately, it will promote the supply-side structural reform alongside cutting
+overcapacity, destocking, deleveraging, reducing costs and identifying growth areas, aimed at improving the quality and
+efficiency of the supply system. Besides, China will implement the macro-control policy that ensures steady government
+macro policies, accurate industrial policies, flexible micro policies, practical reform policies and social policies meeting
+people's basic needs.
+Discussion and Analysis
+ICBC
+16
+2014
+Asset scale of the banking industry grew steadily. At the end of 2015, the total assets of banking financial institutions
+(corporate) were RMB 199.35 trillion, representing an increase of 15.67%. The balance of NPLs of commercial banks reached
+RMB1,274.4 billion; NPL ratio was 1.67%; allowance to NPL was 181.18%; core tier 1 capital adequacy ratio (CAR), tier 1
+CAR and CAR were 10.91%, 11.31% and 13.45% respectively.
+220,835
+2,161
+Profit for the year
+0.2
+189
+85,326
+85,515
+Less: Income tax expense
+0.4
+1,623
+361,612
+363,235
+Profit before taxation
+8.0
+173
+218,674
+2,157
+joint ventures
+Share of profits of associates and
+0.4
+1,450
+359,455
+360,905
+Operating profit
+53.3
+30,264
+56,729
+86,993
+Less: Impairment losses
+1.0
+2,330
+277,720
+PBC continued to follow a prudent monetary policy and firmly advanced market-oriented financial reform, striving to ensure
+smooth monetary policy transmission and improve allocation efficiency of financial resources. It comprehensively used
+tools such as open market operations, mid-term lending facility and general reduction of the deposit reserve ratio of all
+financial institutions to rationally adjust the liquidity of the banking system. PBC also lowered the benchmark rate of RMB
+deposits and loans and open market reverse repurchase rate, in a bid to guide the market interest rate downwards within an
+appropriate range and promote the basic stability of effective interest rate. PBC cut deposit reserve ratio of targeted financial
+institutions and extended the pilot programs of pledge with credit assets and internal ratings within the central bank. It
+brought the counter-cyclical regulating and structural guiding role of the differentiated reserve fund dynamic adjustment
+mechanism into play, increased the relending and rediscount quotas for many times, expanded the scope of pledged
+supplementary lending disbursement and guided financial institutions to channel more credit resources to micro and small-
+sized enterprises, "Sannong" (agriculture, farmers and rural areas), shantytown renovation and other key or weak links of
+national economy. Meanwhile, PBC firmly advanced market-oriented financial reform and further improved the monetary
+policy regulation framework. It removed the cap on deposit rate, improved the central parity quotation mechanism for RMB-
+USD exchange and implemented the deposit insurance system step by step. Besides, it changed the assessment on required
+reserves from a time point-based method to an average method, and the Chinese currency RMB was successfully included
+in the basket of currencies which make up the IMF's Special Drawing Right (SDR). CBRC developed an inclusive finance
+development plan which improved its overall policy framework, strengthened the policy support for ameliorating financial
+services to weak areas, unveiled the guidelines on the reform and development of private banking, financial guarantee and
+financial leasing sectors and changed the "loan-to-deposit ratio" from a regulatory indicator to a monitoring indicator.
+Money supply maintained stable growth in 2015. At the end of December, the M2 balance was RMB139.23 trillion,
+representing an increase of 13.3%. The outstanding RMB loans reached RMB93.95 trillion, representing an increase of
+14.3%. The balance of RMB deposits registered RMB135.70 trillion, up 12.4%. The social financing scale was RMB15.41
+trillion. The Shanghai Composite Index and the Shenzhen Component Index rose by 9.4% and 15.0% respectively. The
+capitalization of the free float stocks on the Shanghai and Shenzhen stock markets increased by 31.7%. The accumulative
+issuance amount of bonds in the bond market reached RMB22.9 trillion, up 108.3%. The central parity of RMB against the
+US dollar was RMB6.4936, representing a depreciation of 5.77% from the end of the previous year. The government bond
+yields decreased on the whole in the interbank market.
+In 2015, global economic landscape became more complicated and volatile, with major economies further diverging in their
+growth trend and monetary policy. The US economic situation was relatively good, the economy of the Eurozone was back
+on its recovery track yet still faced with some constraints. The Japanese economy experienced great ups and downs and
+was subject to downward pressure in respect of the consumer price index; and emerging economies grew slower overall.
+The fluctuations of international financial market and commodity prices intensified and the currencies of most economies
+weakened against the US dollar. There were bigger swings in the global stock markets and there was widespread decline
+in the stock markets of emerging economies. The liquidity of US dollar was significantly tightened, and that of Hong Kong
+dollar was of slight shortage.
+Chairman's Statement
+ICBC
+10
+Where was the progress? Key steps were taken to promote operating transformation and improvements were
+achieved in assets and liabilities business. In the new environment of faster interest rate liberalization and financial
+disintermediation, the Bank adjusted its asset-liability structure with new ideas, tools and mechanisms to further utilize
+the growing potential of traditional businesses. In financing business, the Bank insisted that its own business development
+should adapt to and promote transformation and upgrading of the economy as well as structural adjustments with improved
+reallocation, relending and a combination of incremental and existing loans to achieve comprehensive arrangements for the
+distribution of credit resources. The Bank also improved differentiated credit policies and made structural arrangements, so
+as to fundamentally adjust credit structure and improve credit quality. At the same time, the Bank stepped up its efforts to
+comprehensively apply credit and non-credit financing services in a coordinated manner and to accelerate the transformation
+of assets business. In 2015, we granted actual new loans totaling RMB2.76 trillion, including RMB880.8 billion of new RMB
+loans, up 9.1% compared with last year; which is equivalent to RMB1.88 trillion of relending of recovered loans. Non-credit
+financing including bond underwriting, asset transactions, financial leasing, syndicated distribution and entrusted loans
+amounted to RMB1.36 trillion, a year-on-year increase of RMB232 billion. As a result, the Bank promptly and effectively
+met demand for corporate financing and diversified financial services, and transitioned from an asset holding bank to a
+Where was the stability? Asset quality remained generally stable notwithstanding continuous pressure. The
+complex changes in the international and domestic economic and financial situation in recent years have presented new
+challenges and pressures to bank risk management, especially with regard to the stability of asset quality. By carefully
+appraising the situation and taking appropriate steps, the Bank comprehensively strengthened risk management,
+continuously improved credit risk prevention and control, optimized big data risk monitoring systems, intensified the
+identification, diagnosis, and prevention of potential risks, and established professional teams to enhance NPL disposal
+efficiency. Our NPL ratio stood at 1.5% at the year-end, and our credit asset quality maintained overall stability. At the same
+time, the Bank intensified prevention and control of market and liquidity risks and effectively fended off risks caused by
+stock market turmoil and foreign exchange market fluctuations. We also reinforced internal control and case prevention and
+control, carried out special reviews in high-risk areas and key links, and implemented special governance of new risks, thus
+effectively mitigated adverse effects presented by external risks.
+Where were the improvements? Profit increased steadily and more positive factors appeared. A number of
+complex factors impacted our profits in 2015, including the surfacing of potential risks during economic transformation and
+the narrowing of interest margin during the interest rate liberalization. Nevertheless, the Bank managed to maintain solid
+operating performance and steady profit increase by strengthening and consolidating risk control, accelerating operational
+transformation and business innovation, diversifying income sources, reducing costs and tapping on potential to improve
+efficiency. In 2015, we realized a net profit of RMB277,720 million, up 0.5%, a pre-provision profit of RMB450,228 million,
+up 7.6%. Return on weighted average equity stood at 17.10%, return on average total assets 1.30%, and earnings per
+share of RMBO.77, which were essentially on par with the previous year. Although profit growth slowed, total profit and
+return on assets remained in a leading position amongst comparable banking institutions worldwide, and there were
+three main highlights of the Bank in terms of profit structure. First, income from fee-based businesses increased faster
+than interest income. Net interest income was RMB507,867 million, up 2.9%, while fee and commission income was
+RMB143,391 million, up 8.2%, accounting for 21.44% of operating income, rising by 0.57 percentage points. Second,
+income from strategic and emerging businesses continuously increased. As a business that traditionally has an advantage,
+retail banking achieved rapid development based on continuous innovations in recent years and served as a profit stabilizer
+during periodic economic fluctuations. As a strategic area and the focus of innovative development, asset management
+business developed steadily with broad prospects and its contribution to operating income continued to increase. Third,
+profits of overseas institutions and comprehensive subsidiaries grew faster than the Group's average profit growth. As a
+result of China's further opening up and the Bank's improved overseas operating network and business systems, in particular
+the network for cross-border RMB clearing, net profits of overseas institutions (other than the newly acquired ICBC Standard
+Bank and ICBC (Turkey)) increased by 12.2%. Comprehensive subsidiaries engaged in funds, insurance and leasing also
+seized the opportunity and realized a rapid profit increase of 55.4% in terms of total net profits, making greater profit
+contributions to the Group. The changes in the profit structure demonstrated that the Bank's new driving force is being
+formed and enhanced, and indicated a stronger development momentum and a more promising growth.
+In 2015, the global economy saw a weak recovery and sluggish growth, while international financial markets underwent
+more volatility. The Chinese economy entered a new normal which is shifting gears in respect of the speed of growth,
+structural adjustments, and a shift of old and new driving forces. Moreover, banks were in a new development landscape
+and were faced with many new situations. In the statement in the interim report this year, I responded to investor concerns
+over several key issues in these respects. As predicted at the time, despite the many difficulties and challenges, our annual
+operations continued to display a sound momentum characterized by improvement, progress, better quality and innovations
+amidst stability.
+Chairman's Statement
+9
+Annual Report 2015
+Chairman Jiang Jianqing
+Chairman's Statement
+1,389,264
+18,233,851
+light asset-based bank with large asset flows. In terms of liability business, the Bank improved operating mechanisms to
+coordinate development of active and passive liabilities, with special emphasis on highlighting its strength in the realms
+of payment settlement, custody, depository services as well as IT services. We also seized opportunities to attract a large
+quantity of low-cost and steady capital, improving the structure of liabilities business and coordinating the volume and price
+of liabilities. RMB deposits and due to banks and other financial institutions at domestic branches increased by RMB1,277.8
+billion, a year-on-year increase of RMB397.2 billion and 8.2%, each representing a three-year high. The interest payment
+rate on RMB deposits dropped by 13 base points from the previous year, equivalent to savings of RMB20.3 billion in costs.
+Where was the innovation? The pace of establishing new forms of business and driving forces were accelerated.
+With the formation of new driving forces for economic growth and the development of new forms of financial business,
+banks have had to accelerate reforms and innovation to create new growth engines and driving force in preparation for
+sustained and robust development. The effects of the Bank's sustained efforts toward transformation and innovation in past
+years are now showing results, and a series of new profit growth poles and points are taking shape. In particular, businesses
+that have been developed gradually in the construction of multi-layer capital market and two-way financial opening up,
+such as new retail banking, financial markets, asset management and investment banking are becoming important profit
+pillars. The Bank achieved progress in the realm of internationalization last year. As five of our overseas institutions opened
+for business or obtained banking licenses, we became the Chinese-funded bank with the widest overseas coverage (with
+direct and indirect networks covering 61 countries and regions). We completed our acquisition of Standard Bank PLC's public
+equity and established a global trading platform. We were qualified as a RMB clearing bank in six countries, creating a RMB
+clearing network that covers time zones in Asia, Europe and America. Our comprehensive subsidiaries engaged in fund,
+insurance and other businesses became more organically integrated with the Group's overall development, and our cross-
+border and cross-market coordinated development landscape was deepened, thereby enhancing the Bank's value creation
+capabilities and market competitiveness across the entire business chain.
+ICBC
+(4) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+(3) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(2) Investment in bonds related to restructuring includes Huarong bonds and special government bonds. Please see "Note 27. (a) to
+the Financial Statements: Receivables" for details.
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+represent the average of the balances at the beginning of the year and that at the end of the year.
+2.66
+2.47
+Net interest margin
+2.46
+2.30
+Net interest spread
+493,522
+507,867
+Net interest income
+18
+In 2015, Chinese economy maintained overall stability and made progress while ensuring stability. China's gross domestic
+product (GDP) grew by 6.9%. China's consumer price index (CPI), retail sales of consumer goods, fixed asset investment,
+industrial added value of above-scale enterprises rose by 1.4%, 10.6%, 12.0% and 6.1% respectively, while total imports
+and exports dropped by 7.0%.
+It is worth a special mention that the Bank is fostering new business forms and advantages at a faster pace in the internet-
+based finance field. Last year, we successively launched the e-ICBC brand and upgraded development strategy, while also
+establishing an internet-based financial architecture centered on "three platforms and one center" (the open online banking
+platform ICBC Mobile, the e-commerce platform ICBC Mall, the instant messaging platform ICBC Link, and an Internet
+Financing Center) which also integrated financial services, e-commerce and social life. Integrating and recasting the previous
+internet banking and mobile banking businesses, ICBC Mobile is a more open direct sales online banking platform optimally
+adapted to mobile finance trends. The platform now boasts 190 million customers and after opening up its comprehensive
+services are reaching out to even more people. With an annual transaction volume of over RMB800 billion, ICBC Mall is the
+second largest e-commerce platform in China. As a social financial service platform independently developed by the Bank,
+ICBC Link has essentially completed its strategic layout and will provide information communications and financial services
+for hundreds of millions of customers in 2016. We established the Internet Financing Center and Consumer Credit Finance
+Center, and kicked off credit business characterized by standardization and internet applications. The total scale of our
+online financing has exceeded RMB500 billion.
+3214
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Discussion and Analysis
+15
+Annual Report 2015
+Chairman of the Board of Supervisors Qian Wenhui
+30 March 2016
+President: Yi Huiman
+号
+ICBC
+14
+Seasons change and all things grow according to their own cycle. Banks are no different in their operations. In 2016 as the
+external economic situation remains complicated and volatile and various risks continue to accumulate, our management
+team will focus on development strategies and operation goals set by the Board of Directors and will strictly adhere to the
+key themes of transformation and upgrading. By adopting a strong work ethic and clear vision, we will do our utmost to
+stabilize quality and growth, prepare for and leverage our potential to achieve further growth in the future, and reward the
+support and trust of our shareholders and society with stronger operating results!
+In 2015, our stable growth amidst a complicated business environment was widely recognized by the market. We were
+awarded "Best Emerging Markets Bank" by UK's Euromoney, becoming the first Asian financial institution to win this global
+award. At the same time, for the third consecutive year, we were ranked the 1st place among the Top 1000 World Banks by
+UK's the Banker and the Global 2000 listed by the US magazine Forbes, and 1st place on the sub-list of commercial banks of
+the Fortune 500.
+We achieved these results while stepping up structural optimization and building new momentum. We adhered
+to innovation-driven growth, actively created conditions for accelerating business transformation, and improved the
+implementation of business strategies involving retail banking, asset management and investment banking with new
+ideologies thus creating multiple growth drivers and establishing new growth potential. In terms of retail banking, financial
+assets of personal customers reached RMB11.6 trillion. We issued 750 million bank cards, including 109 million credit
+cards, ranking first in Asia Pacific. The number of private banking customers recorded was 62 thousand, up by 44.8%,
+with assets under management exceeding RMB1 trillion for the first time. As to asset management, balance of wealth
+management products amounted to RMB2.62 trillion, up by 32.0%, leading industry peers in terms of scale; assets under
+custody stood at RMB11.5 trillion, up by nearly 100%, and maintaining a leading position amongst industry peers. Amount
+and volume of precious metal business registered was RMB1.25 trillion and 159 thousand tons, representing an increase of
+21.4% and 38.1%, respectively. Total assets under management and the number of customers of ICBC Credit Suisse Asset
+Management surpassed RMB900 billion and 13 million, respectively. ICBC-AXA realized premium income of RMB23.54
+billion, an increase of 52.8%, and its total assets exceeded RMB66 billion. With continuously optimized business structure
+and enhanced influence in the investment banking field, we were ranked by Thomson Reuters as the No. 1 M&A financial
+advisor in Asia Pacific by number of deals advised and globally by the number of overseas acquisitions made by Chinese
+enterprises. Internet-based finance is another of our strategic focuses. We have essentially established the framework for an
+internet-based finance platform in line with the newly issued development strategy for the e-ICBC internet-based finance
+brands and their upgrading. We also stepped up growth of all businesses with new strategies and new concepts, propelled
+the formation of online and offline integrated service patterns, and catalyzed the rapid growth of internet-based financing,
+online payment and other operations, achieved a smart transformation of offline outlets as well as significant improvements
+to customer service efficiency and quality.
+Our significant efforts in the past will be felt by history, and we bring great hope for the future. 2016 is the first year
+of China's 13th Five-Year Plan and is also a critical juncture in the implementation of the Bank's new three-year plan.
+Difficulties, challenges and the greater risks in operation and development cannot be underestimated, but we have the
+confidence, capabilities and means to maintain robust and steady development. Our confidence stems, in particular, from
+the fundamental trends in the Chinese economy toward long-term growth and the new progress in relation to reforms
+and development, from the solid foundation and strong resilience that the Bank has fostered through almost a decade of
+development, from the upgrading of traditional drivers and the accelerated formation of new ones, as well as from the
+accumulated preemptive advantages of new businesses such as internet-based finance. With the united efforts of all of our
+employees, the support from our shareholders and support from all walks of life, I believe ICBC will overcome every obstacle
+which it may encounter, pressing ahead steadily toward long-term goals while injecting positive energy and making new
+contributions to economic and social development.
+President's Statement
+Annual Report 2015
+We achieved these results while resisting the pressures of risk accumulation, maintaining stable asset quality and
+controlling various risks. In 2015, financial risks emerged in multiple fields and threatened to spread under the pressure
+of downward trends in the economy, declining corporate profits, and tumbling capital markets. The Bank prioritized credit
+risk control and prevention and adopted innovative measures to intensify dynamic risk monitoring and pre-warnings, thus
+effectively mitigating risk in existing credit and strictly controlling risks in credit increments. By the end of 2015, NPL ratio
+rose to 1.50%, an increase by 0.37 percentage points compared to the bank's own NPL ratio at the beginning of the year,
+but it is still within a controllable range. Compared with peers domestically and internationally, our NPL ratio is at a relatively
+superior level. At the same time, we further optimized full-coverage investment and financing risk management mechanisms
+across markets and products for various emerging financial risks in asset management and agency investments, substantially
+strengthened comprehensive management of underlying assets, and normalized stress tests. As a result, we effectively
+avoided risk contagions caused by stock market fluctuations and exchange market volatility. To repel recurring illegal
+fundraising, financial fraud, and other external risks, we engaged in thorough special reviews and targeted rectifications
+involving emerging risks, to fend off and effectively curb the rebounding of fraud cases and risk incidents.
+The operating results were attained in the context of virtuous interaction with the real economy. We persisted
+in improving our own operating performance through promoting the enhancement of quality and efficiency of the real
+economy, we focused on utilizing increments and revitalizing existing credit, and enhanced structural adjustments, striving to
+optimize business structure and foster new growth points in the course of economic transformation and upgrading. In 2015,
+we granted actual new loans of RMB2.76 trillion, including new RMB loans of RMB880.8 billion, up by 9.1% compared with
+last year; relending of recovered loans reached RMB1.88 trillion. In addition, non-credit financing business, including bond
+underwriting, equity financing and entrusted loans amounted to RMB1.36 trillion, functioning as a major funding source
+for supporting the real economy. In terms of arrangements for financing business, we actively strengthened support for key
+and critical projects with loans totaling RMB816.8 billion. As part of this, we seized upon the opportunities presented by
+the "three strategies", namely the "One Belt and One Road", the Beijing-Tianjin-Hebei coordinated development strategy,
+and the Yangtze River Economic Belt Strategy. During the year, we provided loans of USD42.7 billion to support 170
+"Going Global" projects. We also integrated offline specialized operations with online standardized operations by utilizing
+internet-based thinking and big data technology, in a bid to flexibly serve "mass entrepreneurship and innovation" as well
+as consumption expansion and upgrading. Loans to small and micro enterprises saw a net increase of RMB161.7 billion or
+9.4%, higher than the average growth rate of all loans. Personal consumption loans and residential mortgages grew by
+RMB436.5 billion, accounting for 55.4% of all loan increments.
+The operating results were achieved on top of a high base in light of mounting growth-related difficulties.
+The larger the total profit, the harder the growth will be. One percentage point growth in the Bank's current net profit is
+equivalent to 1.7 percentage points five years ago or 7.3 percentage points a decade ago. Net profit of 2015 exceeded the
+aggregate of the 8 years after 2000. In addition, from the perspective of other indicators, pre-provision profit grew by 7.6%
+compared with last year; cost-to-income ratio declined by 1.24 percentage points to 26.69%; and capital adequacy ratio
+rose by 0.69 percentage points to 15.22%, which was higher than the regulatory requirement. This progress demonstrated
+our robust profitability and sound growth potential while also creating favorable conditions for structural adjustment and
+transition.
+Spring is always full of promise. We now report our 2015 operating results in this season of hope. In 2015, faced with a
+complicated external environment while adhering to the targets and tasks set by the Board of Directors, the Management
+focused on the market, made structural adjustments, promoted reforms, and controlled risks which resulted in stable growth
+in operating efficiency, overall controllable risk, and further structural adjustments and the Bank has maintained sound
+operating performance overall. Our net profit for the year reached RMB277,720 million, up by 0.5% from the previous
+year. In spite of the growth slowdown from a static view, given the macro background of a new normal in economical and
+financial development, the Bank's operating results were in line with expectations and were hard-earned in a dynamic and
+dialectical perspective.
+President's Statement
+ICBC
+President Yi Huiman
+12
+President's Statement
+Annual Report 2015
+30 March 2016
+Chairman: Jiang Jianqing
+13
+276,286
+507,867
+0.5
+Total assets
+(253,327)
+(273,612)
+Allowance for impairment losses
+1,371,253
+1,515,899
+Non-interest-generating assets
+4.58
+849,879
+18,561,652
+4.24
+871,779
+20,550,489
+21,792,776
+Total interest-generating assets
+26,745
+826,615
+2.52
+36,538
+1,448,398
+institutions (4)
+Due from banks and other financial
+1.57
+48,384
+3,087,982
+1.51
+47,867
+3,161,562
+3.24
+19,679,578
+Liabilities
+Deposits
+Non-interest-bearing liabilities
+2.12
+356,357
+16,844,587
+1.94
+363,912
+18,759,070
+Total interest-bearing liabilities
+3.67
+14,615
+397,785
+3.70
+16,101
+435,460
+Debt securities issued
+2.35
+42,801
+1,819,544
+1,434
+49,801
+2,744,339
+institutions (4)
+Due to banks and other financial
+2.04
+298,941
+14,627,258
+1.91
+298,010
+15,579,271
+Due from central banks(3)
+2.25
+1.81
+230,818
+expense
+balance
+Item
+Assets
+Average
+yield/cost
+Interest
+income/
+yield/cost
+Average
+Interest
+income/
+Average
+2014
+2015
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In RMB millions, except for percentages
+Confronted with the accelerated interest rate liberalization reform and the increasingly fierce market competition, the Bank
+constantly strengthened asset and liability management, proactively adjusted its credit structure and optimized its investment
+portfolio structure. Meanwhile, the Bank reinforced liquidity management and interest rate pricing management, strived
+to control liability cost and achieved stable growth in net interest income. In 2015, net interest income was RMB507,867
+million, RMB14,345 million or 2.9% higher than that of last year, accounting for 75.9% of the Bank's operating income.
+Interest income increased by RMB21.9 billion or 2.6% to RMB871,779 million, and interest expenses increased by RMB7,555
+million or 2.1% to RMB363,912 million. Due to the five interest rate cuts and the removal of deposit interest caps by PBC
+in 2015, net interest spread and interest margin came at 2.30% and 2.47%, 16 basis points and 19 basis points lower than
+those of the previous year, respectively.
+Attributable to: Equity holders of the parent
+company
+277,131
+275,811
+1,320
+0.5
+Non-controlling interests
+589
+475
+114
+24.0
+Annual Report 2015
+17
+Discussion and Analysis
+Net Interest Income
+5,192
+(%)
+balance
+Average
+(%)
+3.93
+159,262
+4,047,961
+4,136,085
+166,399
+4.02
+expense
+3,817,143
+154,070
+4.04
+Investment in bonds related to
+restructuring (2)
+197,117
+Investment in bonds not related to
+4,434
+3.94
+170,833
+4,333,202
+Investment
+5.81
+615,488
+10,599,094
+5.31
+616,541
+2.25
+11,607,327
+Loans and advances to customers
+restructuring
+121,365
+150,884
+10,834
+968
+9,465
+Loans
+9,465
+10,834
+313,306
+344,380
+130,830
+161,718
+36. CERTIFICATES OF DEPOSIT
+Annual Report 2015
+332,578
+Certificates of deposit issued by Hong Kong Branch, Tokyo Branch, Singapore Branch, Luxembourg Branch, Seoul Branch,
+Doha Branch, New York Branch, Sydney Branch, Abu Dhabi Branch, London Branch, Dubai (DIFC) Branch, ICBC Asia, ICBC
+Macau, ICBC Argentina, ICBC New Zealand and ICBC Standard were recognised at amortised cost.
+Bills
+303,841
+180,681
+Repurchases analysed by collateral:
+161,718
+Repurchases analysed by counterparty:
+Banks
+193
+191,763
+121,420
+161,649
+Securities
+Other financial institutions
+152,617
+9,410
+69
+313,306
+344,380
+130,830
+161,718
+132,625
+Notes to Financial Statements
+3,645,906
+37. DUE TO CUSTOMERS
+243,811
+330,861
+243,721
+330,766
+16,281,939
+15,556,601
+15,781,673
+15,024,101
+38. DEBT SECURITIES ISSUED
+Group
+Bank
+2015
+2014
+2015
+2014
+Subordinated bonds and Tier 2
+Capital Notes issued by
+(1)
+The Bank
+Subsidiaries
+181,092
+14,461
+187,024
+130,830
+Others
+3,950,564
+4,134,525
+4,034,790
+Group
+Bank
+2015
+2014
+2015
+2014
+Demand deposits:
+Corporate customers
+4,507,661
+4,134,828
+4,413,305
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+4,026,374
+3,390,514
+3,153,817
+3,344,216
+3,115,187
+Time deposits:
+Corporate customers
+3,929,353
+3,902,305
+3,601,210
+Personal customers
+4,210,600
+Personal customers
+380,957
+20,000
+36,577
+(2)
+The principal guaranteed wealth management products issued by the Group and the financial assets invested in by the
+aforementioned products form part of a group of financial instruments that are together managed on a fair value basis,
+and are classified as financial liabilities and financial assets designated at fair value through profit or loss, respectively. The
+fair value of the wealth management products was RMB1,496 million higher than the amount that the Group would be
+contractually required to pay to the holders of the wealth management products upon maturity as at 31 December 2015 (31
+December 2014: RMB1,531 million higher).
+Structured deposits, certain financial liabilities related to precious metals and debt securities have been matched with
+derivatives or precious metals as part of a documented risk management strategy of the group to mitigate market risk,
+such as interest rate risk. An accounting mismatch would arise if these financial liabilities were accounted for at amortised
+cost, whereas the related derivatives or precious metals were measured at fair value with movements in the fair value taken
+through profit or loss. By designating these financial liabilities at fair value through profit or loss, the movement in their fair
+values is recorded in the statement of profit or loss.
+(a)
+(b)
+(c)
+As at 31 December 2015, the fair value of structured deposits was higher than the amount that the Group would
+be contractually required to pay to the holders of these structured deposits upon maturity by RMB159 million (31
+December 2014: RMB588 million higher).
+As at 31 December 2015, the fair value of the financial liabilities related to precious metals was approximately the same
+as the amount that the Group would be contractually required to pay to the holders (31 December 2014: approximately
+the same).
+The debt securities including notes issued by Singapore Branch in 2012 and 2014 at fixed rates and note issued by
+London Branch in 2015 were classified as financial liabilities designated at fair value through profit or loss. The fair
+value of the debt securities was lower than the amount that the Group would be contractually required to pay to
+the holders of these debt securities upon maturity as at 31 December 2015 by RMB383 million (31 December 2014:
+RMB641 million lower).
+192
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+There were no significant changes in the credit spread of the Bank and therefore the amounts of changes in fair value of the
+financial liabilities that were attributable to changes in credit risk were considered not significant during the years presented
+and cumulatively as at 31 December 2015 and 31 December 2014. The changes in fair value of the financial liabilities were
+mainly attributable to changes in other market factors.
+34. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Group
+Bank
+2015
+2014
+(1)
+589,217
+297,414
+164
+589,385
+181,092
+217,431
+27,521
+217,431
+Financial liabilities related to
+precious metals
+(2)(b)
+55,871
+53,227
+55,866
+2015
+53,223
+(2)(c)
+8,496
+6,227
+8,496
+6,227
+Other
+6,508
+Total
+303,927
+Debt securities
+337,191
+2014
+Banks and other financial institutions
+operating in Mainland China
+300,977
+2,265,860
+1,539,239
+2,103,289
+1,393,280
+35. REPURCHASE AGREEMENTS
+Repurchase agreements comprise repurchases of securities, bills, loans, and cash received as collateral on securities lending.
+Group
+Bank
+2015
+2014
+Repurchases (note 25(i))
+313,306
+344,380
+2015
+130,830
+2014
+161,718
+Cash received as collateral on
+securities lending
+23,885
+381,540
+432,463
+477,593
+261,303
+1,673,179
+941,769
+1,653,551
+943,755
+Banks and other financial institutions
+operating outside Mainland China
+115,088
+165,007
+1,788,267
+1,106,776
+Deposits:
+68,198
+1,721,749
+Money market takings:
+Banks and other financial institutions
+operating in Mainland China
+Banks and other financial institutions
+operating outside Mainland China
+185,789
+136,819
+74,950
+39,674
+291,804
+295,644
+306,590
+148,548
+1,092,303
+187,024
+353,495
+195,553
+86,795
+86,795
+86,795
+Nominal
+value
+(millions)
+value
+(millions)
+Number
+of shares
+Nominal
+Number
+of shares
+2014
+2015
+A shares of RMB1 Yuan each (i)
+H shares of RMB1 Yuan each
+Issued and fully paid:
+40. SHARE CAPITAL
+As at 31 December 2015, the amount of other liabilities due within one year was RMB518,166 million (31 December 2014:
+RMB403,335 million).
+There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2015 (31
+December 2014: Nil).
+409,618
+486,426
+464,690
+86,795
+589,073
+269,612
+266,700
+20,000
+20,000
+4.99%
+13/06/2012
+13/06/2027
+13/07/2012
+(vii)
+14 ICBC 01 Bond
+04/08/2014
+100 Yuan
+20,000
+ICBC
+198
+According to the "Announcement in Relation to the Conversion of ICBC Convertible Bonds", the 250 million
+convertible bonds (with a nominal value of RMB100 each and an aggregate amount of RMB25 billion) issued by the
+Bank on 31 August 2010 can be converted into the Bank's A shares from 1 March 2011. Given that the closing price
+of A shares of the Bank from 19 November 2014 to 30 December 2014 is not less than 130% (i.e. RMB4.25 per share)
+of the prevailing conversion price of the ICBC Convertible Bonds (RMB3.27 per share) for 15 trading days out of 30
+consecutive trading days, the redemption clause of convertible bonds was triggered. The Bank exercised the right of
+early redemption of the ICBC Convertible Bonds to redeem all outstanding ICBC Convertible Bonds which appeared
+on the register on the redemption record date. The abovementioned redemption record date was 12 February
+2015. As at 12 February 2015, 249,857,640 ICBC Convertible Bonds were converted into A shares of the Bank, and
+unconverted ICBC Convertible Bonds of 142,360 were redeemed by the Bank. A total of 7,387,711,262 shares have
+been converted and total of 269,612,212,539 A shares have been issued by the Bank.
+(i)
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary H shares and A shares rank
+pari passu with each other in respect of dividends.
+27,521
+353,495
+356,407
+356,407
+266,700
+269,612
+43,507
+34,145
+77,428
+196,320
+Settlement accounts
+237,680
+250,425
+242,433
+254,942
+Interest payable
+2014
+Bank
+2015
+2014
+2015
+Group
+(ii)
+(i)
+39. OTHER LIABILITIES
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+197
+Annual Report 2015
+(vii) ICBC Argentina issued medium-term notes amounting to RMB476 million denominated in ARS with maturities
+between 2016 and 2017 at floating interest rates. Of which, in 2015, ICBC Argentina issued medium-term notes
+amounting to RMB334 million denominated in ARS with maturities between 2016 and 2017 at floating interest rates.
+104,972
+158,757
+89,923
+Salaries, bonuses, allowances and
+92,327
+Others
+2,161
+4,843
+2,409
+5,052
+Promissory notes
+11,870
+11,455
+11,612
+100 Yuan
+11,968
+4,798
+4,716
+4,798
+4,716
+Early retirement benefits
+19,679
+22,085
+21,038
+23,748
+subsidies payables (i)
+Sundry tax payables
+9,638
+11/06/2012
+17/01/2012
+As at 31 December 2015, the amount of debt securities issued due within one year was RMB38,723 million (31 December
+2014: RMB28,886 million).
+(1) Subordinated bonds and Tie 2 Capital Notes
+The Bank:
+As approved by the PBOC and the CBRC, the Bank issued callable subordinated bonds through open market bidding in
+2005, 2009, 2010, 2011, 2012 and 2014. These subordinated bonds were traded in the bond market among banks. In
+2015, the Bank issued Tier 2 Capital Notes denominated in USD. The Notes listed on the Stock Exchange of Hong Kong
+Limited. The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds
+and Tier 2 Capital Notes during the year (2014: Nil). The relevant information on these subordinated bonds is set out below:
+Issue Price
+Name
+Issue date
+(In RMB)
+Amount
+(In RMB)
+Ending
+balance
+(In RMB)
+Coupon
+rate
+Value date
+Maturity date
+Circulation date Notes
+(million)
+(million)
+05 ICBC 02 Bond
+19/08/2005
+100 Yuan
+13,000
+243,690
+3.77%
+240,175
+306,622
+196,662
+181,092
+187,024
+Convertible bonds
+(2)
+9,485
+9,485
+Other debt securities issued by
+m
+The Bank
+59,083
+47,181
+59,083
+47,181
+Subsidiaries
+51,986
+26,262
+111,069
+73,443
+59,083
+47,181
+279,590
+06/09/2005
+06/09/2020
+11/10/2005
+14/09/2025
+03/11/2010
+(iv)
+11 ICBC 01 Bond
+29/06/2011
+100 Yuan
+38,000
+38,000
+5.56%
+30/06/2011
+30/06/2031
+30/08/2011
+(v)
+11 ICBC 02 Bond
+12 ICBC 01 Bond
+29/12/2011
+100 Yuan
+50,000
+50,000
+5.50%
+30/12/2011
+30/12/2026
+14/09/2010
+4.10%
+16,200
+16,200
+(i)
+09 ICBC 02 Bond
+16/07/2009
+100 Yuan
+24,000
+4.00%
+20/07/2009
+20/07/2024
+20/08/2009
+(ii)
+(vi)
+10 ICBC 01 Bond
+100 Yuan
+5,800
+3.90%
+14/09/2010
+14/09/2020
+03/11/2010
+(iii)
+10 ICBC 02 Bond
+10/09/2010
+100 Yuan
+10/09/2010
+(2)(a)
+23,899
+2015
+205,531
+35
+(4,091)
+24,758
+3,869
+(7,596)
+35
+21,066
+Annual Report 2015
+189
+733
+Notes to Financial Statements
+Group
+Total
+gains/(losses)
+Total losses
+At
+At 1 January
+recorded in
+recorded in
+31 December
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2014
+695
+Others
+subsidiaries
+2015
+Deferred income tax assets:
+Allowance for impairment losses
+25,807
+2,636
+28,443
+Change in fair value of available-for-sale financial assets
+(1,341)
+(5,554)
+(8,329)
+Change in fair value of financial instruments at fair value
+through profit or loss
+(602)
+(188)
+(790)
+Accrued staff costs
+6,448
+726
+7,174
+(9,670)
+2014
+profit or loss
+equity
+7,777
+(11,879)
+24,758
+Total
+At
+gains/(losses)
+Total losses
+At
+1 January
+28,860
+recorded in
+2015
+profit or loss
+recorded in
+equity
+31 December
+2015
+Deferred income tax liabilities:
+Allowance for impairment losses
+(68)
+(228)
+2015
+(5,554)
+(756)
+(387)
+2014
+Deferred income tax assets:
+Allowance for impairment losses
+19,612
+6,195
+25,807
+Change in fair value of available-for-sale financial assets
+9,782
+(11,123)
+(1,341)
+Change in fair value of financial instruments at fair value
+through profit or loss
+(1,874)
+1,272
+(602)
+Accrued staff costs
+5,751
+697
+6,448
+Others
+(4,411)
+31 December
+of
+At
+Acquisition
+(465)
+(68)
+Change in fair value of available-for-sale
+financial assets
+2,848
+595
+396
+70
+Others
+(296)
+2,304
+2,474
+449
+4,009
+995
+2,405
+451
+Bank
+2015
+2014
+696
+(1,143)
+Allowance for impairment losses
+Deferred income tax liabilities:
+5.80%
+Group
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2015
+2014
+Taxable/
+Deferred
+Taxable/
+(deductible)
+income tax
+(deductible)
+temporary
+liabilities/
+temporary
+differences
+(assets)
+differences
+Deferred
+income tax
+liabilities/
+(assets)
+Deductible/
+(296)
+(taxable)
+Deferred
+income
+tax assets/
+7,174
+25,791
+6,448
+Others
+(18,900)
+(4,733)
+(23,368)
+(5,860)
+81,534
+28,696
+20,354
+23,899
+(b) Movements of deferred income tax
+Group
+At 1 January
+2015
+2015
+Total
+gains/
+(losses)
+recorded in
+profit or loss
+Total
+(losses)/
+gains
+recorded
+in equity
+95,671
+Accrued staff costs
+(601)
+(2,411)
+differences
+(liabilities)
+Deductible/
+(taxable)
+temporary
+differences
+Deferred
+income
+tax assets/
+(liabilities)
+Deferred income tax assets:
+Allowance for impairment losses
+112,204
+28,054
+100,136
+25,022
+Change in fair value of available-for-sale
+financial assets
+(37,275)
+(9,343)
+(4,477)
+(1,110)
+Change in fair value of financial instruments
+at fair value through profit or loss
+(3,191)
+(798)
+temporary
+2014
+312,336
+Change in fair value of available-for-sale financial assets
+525
+The Group and the Bank did not have significant unrecognised deferred income tax assets or liabilities at the end of the
+reporting period.
+32. OTHER ASSETS
+Group
+Bank
+2015
+2014
+2015
+2014
+Interest receivable
+23,899
+108,907
+103,613
+103,841
+Precious metals
+114,619
+95,950
+92,967
+95,885
+Land use rights
+19,756
+108,330
+20,499
+(11,714)
+(728)
+5,743
+25,022
+Change in fair value of available-for-sale
+financial assets
+9,876
+(10,986)
+(1,110)
+Change in fair value of financial instruments at
+fair value through profit or loss
+(5,860)
+(1,894)
+(601)
+Accrued staff costs
+5,751
+697
+6,448
+Others
+(4,873)
+28,139
+(259)
+7,474
+1,293
+19,682
+20,429
+Advance payments
+Annual Report 2015
+191
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(i)
+The Group paid RMB1,550 million as acquisition cost for the purchase of 92.8169% equity interest in Turkey Tekstilbank in
+2015. The excess of the acquisition cost over the Group's interest in the fair value of Turkey Tekstilbank's identifiable net
+assets, amounting to RMB458 million, was recognised as goodwill attributable to Turkey Tekstilbank.
+The Group paid RMB4,251 million as acquisition cost for the purchase of 60% equity interest in ICBC Standard in 2015.
+The acquisition cost less than the Group's interest in the fair value of ICBC Standard's identifiable net assets, amounting to
+RMB487 million, was recognised as non-operating income attributable to ICBC Standard.
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+310,036
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash flow
+projections are based on financial forecasts approved by management of the subsidiaries. The average growth rates are
+projected based on the similar rates which do not exceed the long term average growth rate for the business in which the
+CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+33. FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Group
+Bank
+2015
+2014
+Wealth management products
+Structured deposits
+(1)
+205,531
+312,336
+As indicated by the impairment tests, goodwill arising from business combinations is not impaired and thus, no impairment
+loss was recognised.
+371,556
+356,101
+458,699
+11,310
+12,124
+428
+487
+Settlement accounts
+173,241
+95,014
+141,516
+79,474
+Goodwill (i)
+8,956
+8,966
+Repossessed assets
+6,808
+Others
+15,102
+3,726
+11,492
+6,624
+3,477
+6,726
+6,443
+19,279
+Allowance for impairment losses
+2014
+31 December
+(68)
+Change in fair value of available-for-sale financial assets
+149
+(79)
+Others
+316
+127
+420
+104
+(23)
+(73)
+70
+449
+451
+190
+ICBC
+Bank
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Total
+163
+(45)
+Allowance for impairment losses
+Deferred income tax liabilities:
+595
+Others
+449
+247
+696
+451
+19
+525
+995
+Total
+Total
+At
+1 January
+2014
+2014
+gains/(losses)
+recorded in
+profit or loss
+(gains)/losses
+At
+recorded
+in equity
+31 December
+2014
+Total
+70
+At
+2015
+7,174
+Others
+(5,860)
+378
+749
+(4,733)
+(vi) ICBC Indonesia issued medium-term notes amounting to RMB109 million denominated in IDR with maturities in 2017
+at fixed interest rates.
+3,939
+(7,484)
+726
+20,354
+Deferred income tax assets:
+Total
+At
+1 January
+gains/(losses)
+recorded in
+2014
+profit or loss
+Total losses
+recorded in
+equity
+At
+2014
+6,448
+Accrued staff costs
+(798)
+Deferred income tax assets:
+2015
+gains/(losses)
+recorded in
+profit or loss
+(losses)/gains
+At
+recorded in
+equity
+31 December
+2015
+Allowance for impairment losses
+25,022
+3,032
+28,054
+Change in fair value of available-for-sale
+financial assets
+(1,110)
+(8,233)
+(9,343)
+Change in fair value of financial instruments at
+fair value through profit or loss
+(601)
+(197)
+1 January
+rates.
+24,000
+196
+(17,577)
+Amortisation
+2,580
+2,580
+Balance as at 31 December 2014
+9,485
+(2,597)
+388
+Conversion
+(9,482)
+(386)
+(9,868)
+Amortisation
+11
+9,873
+(14,980)
+Conversion
+24,870
+RMB25 billion
+The convertible bonds issued have been split into the liability and equity components as follows:
+Liability
+component
+Equity
+component
+Nominal value of convertible bonds
+Direct transaction costs
+21,998
+(113)
+3,002
+Total
+25,000
+(17)
+(130)
+Balance as at the issuance date
+21,885
+2,985
+11
+10/09/2010
+Redemption
+(14)
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(ix) Shanghai Branch issued cross-board interbank deposits in Shanghai Free Trade Zone amounting to RMB280 million
+denominated in RMB with maturities in 2016.
+Subsidiaries:
+(i)
+(ii)
+(viii) The Head Office issued debt securities in London amounting to RMB1,997 million denominated in RMB with maturities
+between 2016 and 2018 at fixed interest rates.
+(iv)
+ICBC Asia issued notes amounting to RMB5,717 million denominated in RMB, EUR, HKD and USD with maturities
+between 2016 and 2020 at fixed interest rates. Of which, in 2015, ICBC Asia issued notes amounting to RMB5,124
+million denominated in USD, EUR, RMB and HKD, with maturities between 2016 and 2020 at fixed interest rates; ICBC
+Asia issued interbank deposits amounting to RMB14,106 million denominated in RMB with maturities in 2016 at fixed
+interest rates.
+ICBC Financial Leasing issued medium-term notes amounting to RMB21,203 million denominated in RMB and USD
+with maturities between 2018 and 2021 at fixed or floating interest rates. Of which, Skysea International Capital
+Management Limited ("Skysea International"), which is controlled by the Group, issued guaranteed notes of USD750
+million with a fixed interest rate of 4.875% in 2011 and redeemed USD112 million in 2015. As at 31 December 2015,
+the carrying amount of the Notes were RMB3,975 million. The notes were guaranteed by Hong Kong Branch and were
+issued at the price fixed at 97.708% of the nominal amount with maturities due on 7 December 2021. By satisfying
+certain conditions, Skysea International has the option to redeem all of the notes at any time. The Notes were listed on
+the Stock Exchange of Hong Kong Limited.
+In 2015, ICBCIL Finance Co. Ltd, which is controlled by the Group, issued medium-term notes amounting to RMB1,500
+million denominated in RMB, with maturities in 2018 at a fixed interest rate of 3.90%. In 2015, ICBCIL Finance Co.
+Ltd issued medium-term notes amounting to RMB15,728 million denominated in USD, with maturities between 2018
+and 2020 at fixed or floating interest rates. By satisfying certain conditions, ICBCIL Finance Co. Ltd has the option to
+redeem all of the notes at any time. Above notes were guaranteed by ICBC Financial Leasing Co. Ltd and listed on the
+Irish Stock Exchange and the Stock Exchange of Hong Kong Limited respectively.
+ICBC Thai issued debt securities amounting to RMB5,979 million denominated in THB with maturities between 2016
+and 2019 at fixed interest rates. Of which, in 2015, ICBC Thai issued debt securities of RMB2,006 million denominated
+in THB with maturities between 2016 and 2017 at fixed interest rates.
+ICBC International issued debt securities amounting to RMB4,203 million denominated in USD with maturities in 2017
+at fixed interest rates.
+ICBC New Zealand issued medium-term notes amounting to RMB313 million denominated in NZD and USD with
+maturities between 2017 and 2018 at fixed or floating interest rates. Of which, in 2015, ICBC New Zealand issued
+medium-term notes amounting to RMB91 million denominated in USD with maturities in 2018 at floating interest
+(v)
+(vii) The Head Office issued debt securities in Hong Kong amounting to RMB2,498 million denominated in RMB with
+maturities between 2016 and 2019 at fixed interest rates.
+In 2015, Dubai (DIFC) Branch issued debt securities amounting to RMB3,235 million denominated in USD with
+maturities in 2020 at fixed interest rates.
+In 2015, Luxembourg Branch issued notes amounting to RMB5,321 million denominated in USD with maturities
+between 2016 and 2018 at fixed or floating interest rates.
+(2)
+(16)
+(3) Other debt securities issued
+As at 31 December 2015, the Group's other debt securities issued mainly include:
+The Bank:
+(i)
+(!!)
+(iii)
+(iv)
+(v)
+(vi)
+Sydney Branch issued debt securities amounting to RMB13,146 million denominated in AUD, CHF, RMB, EUR, HKD,
+JPY and USD with maturities between 2016 and 2024 at fixed or floating interest rates. Of which, in 2015, Sydney
+Branch issued debt securities amounting to RMB5,055 million denominated in AUD, RMB, HKD, JPY and USD with
+maturities between 2016 and 2022 at fixed or floating interest rates.
+Singapore Branch issued debt securities and notes amounting to RMB7,034 million denominated in RMB and USD with
+maturities between 2016 and 2021 at fixed interest rates. Of which, in 2015, Singapore Branch issued debt securities
+and notes amounting to RMB3,090 million denominated in RMB and USD, with maturities in 2018 at fixed rates.
+In 2015, Tokyo Branch issued debt securities amounting to RMB4,012 million denominated in USD, JPY and RMB with
+maturities in 2016 at fixed interest rates.
+New York Branch issued notes amounting to RMB21,440 million denominated in USD with maturities between 2016
+and 2020 at fixed or floating interest rates. Of which, in 2015, New York Branch issued notes amounting to RMB6,976
+million denominated in USD with maturities between 2016 and 2020 at fixed interest rates.
+Balance as at 31 December 2015
+31/08/2016
+(iii)
+Issue amount
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+(viii) The Bank has the option to redeem all of the bonds on 5 August 2019 upon the approval of the relevant regulatory
+authorities.
+Name
+Issue date Currency
+Issue Price
+Amount
+(Original
+Currency)
+(million)
+Ending
+balance
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+(In RMB)
+Value date
+Maturity date
+Circulation date
+Notes
+(million)
+15 USD
+Coupon
+rate
+The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+The Bank exercised the option to redeem all of the bonds on 14 September 2015 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all or part of the bonds at face value on 20 July 2019. If the Bank does not exercise this
+option, the annual coupon rate will increase by 300 basis points thereafter.
+31/08/2010
+05/08/2014
+05/08/2024
+24/09/2014
+(viii)
+194
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(i)
+(ii)
+(iii)
+(iv)
+(v)
+(vi)
+(vii)
+The Bank exercised the option to redeem all of the bonds at face value on 6 September 2015 upon the approval of the
+relevant regulatory authorities.
+Tier 2 Capital Notes
+15/09/2015
+ICBC
+99.189%
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(2) Convertible bonds
+As approved by the CBRC and the China Securities Regulatory Commission, the Bank issued RMB25 billion A share
+convertible bonds on 31 August 2010. As at 31 December 2015, the bank redeemed all outstanding ICBC Convertible Bonds
+which was approved by the CBRC and the board of directors of the Bank and delisted from the Shanghai Stock Exchange.
+Name
+ICBC convertible bonds
+Notes to Financial Statements
+Issue
+31/08/2010
+Circulation date
+Coupon rate
+Step-up
+interest rate
+Value date
+Maturity date
+USD
+Issue date
+195
+price
+RMB100
+Yuan
+The above subordinated bonds and notes are separately listed on the Singapore Exchange Securities Trading Limited, the
+Stock Exchange of Hong Kong Limited and the London Stock Exchange Plc. ICBC Asia, ICBC Macau and ICBC Standard have
+not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and notes during the
+year (2014: Nil).
+Annual Report 2015
+12,987 4.875%
+21/09/2015
+22/09/2015
+(ix)
+(ix)
+On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal amount
+with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+21/09/2025
+2,000
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal
+amount with maturity due on 30 November 2020.
+On 4 November 2011, ICBC Asia issued subordinated notes with an aggregate nominal amount of RMB1,500 million,
+bearing a fixed interest rate of 6% per annum. The subordinated notes were issued at the price fixed at 100% of the
+nominal amount with maturity due on 4 November 2021.
+On 10 October 2013, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million, bearing
+a fixed interest rate of 4.5% per annum. The bond was issued at the price fixed at 99.463% of the nominal amount with
+maturity due on 10 October 2023.
+On 10 September 2014, ICBC Macau issued a subordinated bond with an aggregate nominal amount of USD320 million,
+bearing a floating interest rate. The bond was issued at the price fixed at 99.298% of the nominal amount with maturity due
+on 10 September 2024.
+On 27 July 2006, ICBC Standard issued a subordinated bond with an nominal amount of USD140 million, bearing a fixed
+interest rate of 8.012% per annum. ICBC Standard has the right to fully or partly redeem at face value after 27 July 2016.
+Subsidiaries:
+On 2 December 2009, ICBC Standard issued a subordinated bond with an amount of USD500 million, bearing a fixed
+interest rate of 8.125% per annum and with maturity due on 2 December 2019.
+1.
+2015
+31 December
+1 January
+2015
+Equity instrument
+120
+12,000
+12,000
+79,549
+N/A
+757
+4,558
+Total equity attribute to equity holders of the parent company
+(1)
+450
+(d) Interests attribute to equity instruments' holders
+45,000
+45,000
+79,375
+1,789,474
+2.
+Equity attribute to ordinary equity holders of the parent company
+(2) Equity attribute to other equity holders of the parent company
+Total equity attribute to non-controlling interests
+1,496,431
+1,710,099
+34,428
+6,445
+11,045
+(1)
+(2)
+Equity attribute to non-controlling interests of ordinary shares
+Equity attribute to non-controlling interests of other equity instruments
+6,445
+11,045
+42. RESERVES
+1,530,859
+17,991
+450
+45,000
+2,940
+Domestic
+RMB
+Total
+(a) Capital reserve
+120
+307
+In original currency (million)
+In RMB (million)
+2,940
+600
+17,991
+4,558
+12,000
+12,000
+N/A
+34,549
+Increase this year
+Amount (million shares)
+In original currency (million)
+In RMB (million)
+450
+45,000
+45,000
+45,000
+Amount (million shares)
+Decrease this year
+In original currency (million)
+In RMB (million)
+N/A
+31 December 2015
+Amount (million shares)
+147
+40
+In original currency (million)
+In RMB (million)
+600
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+Other
+share equity convertible Capital Surplus
+capital instrument
+bonds reserve
+(i) Statutory surplus reserve
+currency
+translation
+Foreign
+Cash flow
+hedging
+Retained
+Total
+reserve
+reserve
+reserve
+reserve
+reserve Subtotal
+profits equity
+Balance as at 1 January 2014
+351,390
+1,960
+142,865
+122,733
+199,916
+(29,141)
+(1,573)
+(4,080) 430,720
+Profit for the year
+484,105
+263,201 263,201
+1,268,175
+Other comprehensive income
+32,993
+(125)
+RMB
+44 32,912
+Investment
+General revaluation
+Equity
+component
+of
+Issued
+Reserves
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2016, an appropriation of 10% of the profit
+for the year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to the statutory surplus
+reserve, in the amount of RMB26,398 million (2014: RMB26,537 million) was approved.
+202
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserve
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(c) General reserve
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+The general reserve balance of the Bank as at 31 December 2015 amounted to RMB241,509 million (2014: RMB218,078
+million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+(b) Surplus reserve
+(d) Investment revaluation reserve
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+(f) Cash flow hedge reserve
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(g) Other reserves
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+(h) Distributable profits
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+Annual Report 2015
+203
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+The statement of changes in equity of the Bank during the year are set out below.
+The investment revaluation reserve records the fair value changes of available-for-sale financial assets.
+EUR
+40
+45,000
+Amount (million shares)
+2,940
+17,991
+None
+Mandatory
+No
+40
+600
+4,558 None
+Mandatory No
+120
+12,000
+12,000
+None
+Mandatory
+No
+Domestic Preference
+Shares in:
+RMB
+Total
+Less: Issue fees
+Book value
+2015-11-18
+Equity
+4.50% 100RMB/Share
+450
+32,912
+45,000
+None
+Mandatory
+བཝཤྩ
+6.00% 100RMB/Share
+15EUR/Share
+6.00%
+163,896
+41. PREFERENCE SHARES
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(a) Preference shares outstanding at the end of the year
+Amount
+In original
+Financial instrument
+outstanding
+Issue date
+Accounting
+classification
+Dividend
+(million
+currency
+In RMB
+rate
+No
+Issue price
+million
+million
+Maturity
+Conversion
+condition
+Conversion
+Overseas Preference
+Shares in:
+USD
+EUR
+RMB
+2014-12-10
+2014-12-10 Equity
+2014-12-10 Equity
+Equity
+6.00% 20USD/Share
+147
+shares)
+147
+79,549
+79,375
+Dividends will be paid annually.
+200
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(ii) Conditions to distribution of dividends
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+(iii) Dividend stopper
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+(iv) Order of distribution and liquidation method
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated debt, holders of
+convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will be
+senior to the ordinary shareholders.
+(v) Mandatory conversion trigger events
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to A
+shares, it could not be converted to Preference Shares again.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-
+viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were converted to
+A shares, it could not be converted to Preference Shares again.
+(vi) Redemption
+Five years after the first redemption date of issuance (18 November 2015) under the premise of obtaining the approval of
+the CBRC and meets regulatory requirements, the Group has right to redeem all or some of oversea preference shares. The
+redemption period of preference shares ranges the start date from the date of redemption or conversion of all (Redemption
+price is equal to book value plus accrued dividend in current period).
+(vii) Dividend setting mechanism
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+Annual Report 2015
+201
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(c) Changes in Preference shares outstanding
+Preference shares
+Overseas
+Financial instrument outstanding
+USD
+1 January 2015
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Fixed rate for a certain period (5 years) after issuance.
+(i) Dividend
+757
+55
+(b) Main Clauses
+(1) Overseas preference shares
+(i) Dividend
+Fixed rate for a certain period (5 years for USD and RMB tranche and 7 years for EUR tranche) after issuance.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividends will be paid annually.
+(ii) Conditions to distribution of dividends
+The Bank could pay dividends while the Bank still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Bank are senior to the ordinary shareholders on the right to dividends. The
+Bank may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+(iii) Dividend stopper
+If the Bank cancels all or part of the dividends to the Preference Shareholders, the Bank shall not make any dividend
+distribution to ordinary shareholders before the Bank pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+(iv) Order of distribution and liquidation method
+174
+The USD, EUR and RMB Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for
+payment. The Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated
+debt, holders of convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the
+Bank, but will be senior to the ordinary shareholders.
+199
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(v) Mandatory conversion trigger events
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Bank falling
+to 5.125% or below), the Bank shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%; If Preference Shares were converted to H
+shares, it could not be converted to Preference Shares again.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Bank
+would become non-viable if there is no conversion or write-down of capital; (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Bank would become non-
+viable), the Bank shall have the right to convert all Preference Shares into H shares. If Preference Shares were converted to H
+shares, it could not be converted to Preference Shares again.
+(vi) Redemption
+Under the premise of obtaining the approval of the CBRC and condition of redemption, the bank has right to redeem all
+or some of oversea preference shares in first call date and subsequent any dividend payment date. The first call date after
+issuance and subsequent any dividend payment date (redemption price is equal to issue price plus accrued dividend in
+current period).
+USD Preference Shares: the First Redemption Date is five years after issuance
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+RMB Preference Shares: the First Redemption Date is five years after issuance
+(vii) Dividend setting mechanism
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Bank will not participate the distribution of residual profits with
+ordinary shareholders.
+The Bank could pay dividends while the bank still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Bank are senior to the ordinary shareholders on the right to dividends.
+The Bank shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Bank is once a
+year.
+Domestic preference shares
+Annual Report 2015
+Total comprehensive income
+163,896
+(125)
+222
+102
+102
+20
+62
+5,474
+5,474
+274
+274
+7
+7
+546
+546
+923
+923
+Carrying
+value
+Fair value
+ICBC Turkey
+Other assets
+Deferred income tax assets
+Fixed assets
+62
+20
+Liabilities:
+Derivative financial liabilities
+355
+Less: Non-controlling interests
+1,447
+1,447
+Net assets
+229
+229
+Other liabilities
+18
+18
+Loans and advances to customers
+Deferred income tax liabilities
+453
+Placements from banks and other financial institutions
+148
+148
+Due to banks and other financial institutions
+5,112
+5,112
+Due to customers
+1
+1
+453
+Net assets acquired
+Financial assets held for trading
+Available-for-sale financial asstes
+Cash and balances with central banks
+(4,251)
+6,388
+1 February 2015
+Net cash inflow on acquisition of ICBC Standard
+Cash consideration paid on acquisition of ICBC Standard
+Cash and cash equivalents held by ICBC Standard
+(e) An analysis of the net inflow of cash and cash equivalents in respect of the acquisition of ICBC
+Standard is as follows:
+5,130
+(1,390)
+Net cash flows for the period
+Loss for the period
+Operating income
+800
+1 February 2015
+to 31 December 2015
+Period from
+(d) The financial performance and cash flows of ICBC Standard from the date of acquisition until 31
+December 2015 are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+205
+Annual Report 2015
+2,137
+(2) ICBC Turkey
+(a) Background of subsidiaries acquisition
+On 29 April 2014, the Bank entered into a share purchase agreement to acquire 75.5% of the existing issued shares in
+Tekstilbank from GSD Holding A.Ş. of Turkey. This transaction was completed on 22 May 2015 (Beijing time) after obtaining
+approval from domestic and overseas regulatory authorities and complying with relevant preconditions for completion.
+According to the capital markets law of Turkey, this transaction will trigger the provision that a mandatory tender offer shall
+be issued to purchase all the remaining shares of Tekstilbank that are traded on the Istanbul Stock Exchange. The Board
+of Directors of the Bank has authorized the Bank to issue a mandatory tender offer for the remaining shares at a proper
+time. Upon the approval of relevant regulatory authorities, the Bank completed the tender offer to purchase the remaining
+shares of Tekstilbank with the total face value of TRY72,730,110.49 from 20 July 2015 to 14 August 2015. After the tender
+offer, the Bank has held 92.8169% of the issued shares of Tekstilbank. After the fulfilment of relevant regulatory authorities
+approval procedure, Tekstilbank was formally renamed as Industrial and Commercial Bank of China (Turkey) Limited.
+Assets:
+The details of the identifiable assets and liabilities acquired are as follows:
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(c)
+458
+1,447
+355
+1,550
+1,550
+1,550
+Due from banks and other financial institutions
+1,550
+value
+ICBC Turkey
+Carrying
+ICBC
+206
+Goodwill
+Less: Fair value of identifiable net assets
+Non-controlling interests
+Total consideration transferred
+Cash
+(b) Total consideration transferred and Goodwill
+Fair value
+1,092
+(d) The financial performance and cash flows of ICBC Turkey from the date of acquisition until 31
+December 2015 are as follows:
+Operating income
+181,682
+3,657
+90
+38,075
+259,815
+259,815
+6,459
+6,459
+7,182
+7,182
+Asset-backed securities
+11,225
+11,225
+3,657
+3,657
+139,194
+139,194
+215,504
+215,504
+Segregated asset management plans
+Trust plans
+3,872
+3,872
+27,793
+39,752
+306
+306
+6,480
+The following table sets out an analysis of the line items in the statement of financial position as at 31 December 2015 in
+which assets were recognised relating to the Group's interests in structured entities sponsored by third parties:
+32,993
+Investment funds
+Wealth management products
+Segregated asset management plans
+Trust plans
+Asset-backed securities
+208
+ICBC
+Held-to
+maturity
+investments
+27,793
+Group
+31 December 2015
+Available-
+for-sale
+financial
+assets
+designated
+at fair value
+through
+profit or loss
+assets
+5,679
+27,593
+Receivables
+181,376
+200
+34,128
+306
+Financial
+Wealth management products
+3,146
+3,146
+Impact on non-controlling interests and equity attribute to equity holders of the parent company of transaction:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+207
+Annual Report 2015
+The Bank completed the tender offer to purchase the remaining shares of ICBC Turkey with the total face value of
+TRY72,730,110.49 from 20 July 2015 to 14 August 2015. After the tender offer, the Bank has held 92.8169% of the issued
+shares of ICBC Turkey.
+(f) Acquisition of Non-controlling interests
+(627)
+923
+(1,550)
+Acquisition cost
+22 May 2015
+Cash consideration paid on acquisition of ICBC Turkey
+Cash and cash equivalents held by ICBC Turkey
+(e) An analysis of the net outflow of cash and cash equivalents in respect of the acquisition of ICBC
+Turkey is as follows:
+(195)
+0
+290
+to 31 December 2015
+Period from
+22 May 2015
+Net cash flows for the period
+Profit for the period
+Net cash outflow on acquisition of ICBC Turkey
+4,738
+Cash
+Less: share of net assets in subsidiaries based on the shares acquired
+5,679
+5,679
+Investment funds
+exposure
+amount
+exposure
+amount
+31 December 2014
+Carrying
+Maximum
+Maximum
+31 December 2015
+Carrying
+Total
+Group
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+notes issued by these structured entities. Such structured entities include investment funds, wealth management products,
+segregated asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of notes to investors.
+(1) Structured entities sponsored by third party institutions in which the Group held an
+interest
+45. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+155
+219
+374
+374
+ICBC Turkey
+Including: Adjustment of capital reserve
+Difference
+The following table sets out an analysis of the carrying amounts of interests held by the Group as at 31 December 2015 in
+the structured entities sponsored by third party institutions:
+3,159
+155
+7,897
+Appropriation to general reserve
+26,398 (26,398)
+26,398
+Appropriation to surplus reserve (i)
+(2,331)
+(2,331)
+Dividends preference shares (note 18)
+(91,026)
+(91,026)
+2014 final (note 18)
+Dividends ordinary shares
+10,285
+7,761
+7,761
+88
+(388)
+2,912
+Convertible bonds
+44,947
+44,947
+Capital injection by other equity holder
+23,431
+23,431
+(23,431)
+Others
+(8,854)
+1,602
+(2,357)
+43,992
+36,956
+Net gain from change in fair value of available-for-sale financial assets
+Less: Transfer to profit or loss arising from disposal/impairment
+Income tax effect
+(8)
+Share of the other comprehensive income of the investee accounted for
+using equity method which will not be reclassified to profit or loss
+Items that may be reclassified subsequently to profit or loss:
+2014
+2015
+287,013
+Items that will not be reclassified to profit or loss:
+(i) Includes the appropriation made by overseas branches in the amount of RMB71 million (2014: RMB114 million).
+(4,079) 596,181 729,783 1,761,746
+(1,601)
+175,668 241,509 28,489
+(3)
+(3)
+(3)
+156,195
+79,375
+356,407
+Balance as at 31 December 2015
+43. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+262,322
+24,691
+(43)
+Appropriation to general reserve
+26,537 (26,537)
+26,537
+Appropriation to surplus reserves (i)
+(91,960)
+(91,960)
+2013 final (note 18)
+Dividends ordinary shares
+6,105
+5,572
+18,162
+5,572
+2,105
+Convertible bonds
+34,428
+34,428
+Capital injection by other equity holder
+296,113
+263,201
+7,870
+32,912
+44
+(1,572)
+(11,044)
+18,162 (18,162)
+and 1 January 2015
+97
+24,637
+Total comprehensive income
+24,691
+24,691
+(43)
+97
+24,637
+Other comprehensive income
+262,322
+Balance as at 31 December 2014
+262,322
+1,512,861
+(4,036)
+(1,698)
+3,852
+218,078
+149,270
+148,437
+388
+34,428
+353,495
+Profit for the year
+25,745
+513,903 610,647
+Effective hedging portion of gains or losses arising from cash flow
+hedging instruments:
+3,179
+Other assets
+16
+16
+Available-for-sale financial assets
+1,922
+1,925
+Loans and advances to customers
+15,806
+15,806
+3,177
+Reverse repurchase agreements
+59,324
+Derivative financial assets
+17,110
+17,110
+Financial assets at fair value through profit and loss
+12,913
+12,950
+Placements with banks and other financial institutions
+18,426
+18,426
+59,324
+Precious metals
+Liabilities:
+35,062
+4,378
+4,378
+4,366
+34,550
+4,342
+Net assets acquired
+Less: Non-controlling interests
+Net assets
+Other liabilities
+Debt securities issued
+Due to banks and other financial institutions
+16,811
+Certificates of deposit
+1,812
+1,812
+Repurchase agreements
+59,674
+59,674
+Derivative financial liabilities
+7,385
+Financial liabilities at fair value through profit or loss
+35,025
+16,813
+2,239
+7,385
+Due from banks and other financial institutions
+(b) Total consideration transferred and Goodwill
+On 29 January 2014, the Bank entered into a share purchase agreement to acquire 60% of the existing issued shares in
+Standard Bank PLC ("Target Bank") from Standard Bank London Holdings Limited ("SBLH"). In addition, the Bank also has
+a five-year option to acquire additional 20% of the existing issued shares of the Target Bank exercisable from the second
+anniversary of the date that the transaction is completed. SBLH will have a put option, exercisable six months following the
+date on which the Bank's Call Option is exercised, to require the Bank to purchase all shares of the Target Bank that are held
+by SBLH and its related parties. This transaction was completed on 1 February 2015 (Beijing time) after obtaining approval
+from domestic and overseas regulatory authorities and complying with relevant preconditions for completion. After the
+completion of acquisition, Standard Bank Plc was formally renamed as Industrial and Commercial Bank of China Standard
+Bank Plc ("ICBC Standard") on 27 March 2015. ICBC acquired directly 60% of total issued shares of Standard Bank Plc as of
+31 December 2015.
+(a) General information
+(1) ICBC Standard
+44. ACQUISITION OF SUBSIDIARY
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+204
+32,567
+20,405
+(5,400)
+80
+156
+for using equity method which will be reclassified subsequently to profit or loss
+Foreign currency translation differences
+Share of the other comprehensive income of the investee accounted
+110
+(88)
+(12)
+(Loss)/gain during the year
+2,239
+122
+Less: Income tax effect
+(88)
+Cash
+Total consideration transferred
+(2,173)
+Less: Fair value of identifiable net assets
+Assets:
+Cash and balances with central banks
+Non-controlling interests
+Carrying
+value
+6,388
+Fair value
+ICBC Standard
+(487)
+3,159
+4,251
+4,251
+4,251
+4,251
+7,897
+Fair value
+value
+Carrying
+ICBC Standard
+Consideration transferred less than fair value of identifiable net assets
+(c)
+6,388
+The details of the identifiable assets and liabilities acquired are as follows:
+Financial Statements for the year ended 31 December 2015
+2015
+As at 31 December 2015, the Huijin Bonds held by the Bank are of an aggregate face value of RMB16.91 billion (31
+December 2014: RMB21.63 billion), with terms ranging from 3 to 30 years and coupon rates ranging from 3.16% to 4.20%
+per annum. The Huijin Bonds are government-backed and the Bank's subscription of the Huijin Bonds was conducted in the
+ordinary course of business, in compliance with relevant regulatory requirements and the corporate governance of the Bank.
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the material transactions are as follows:
+As at 31 December 2015, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71% (31 December
+2014: approximately 35.12%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in the key state-owned financial institutions, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not engage in other business activities, and does not intervene in the day-to-day business operations of the key
+state-owned financial institutions it controls.
+(ii) Huijin
+As at 31 December 2015, the Group holds a series of long term bonds issued by Huarong, which is under the control of
+the MOF, with an aggregate amount of RMB108,187 million (31 December 2014: RMB112,128 million). The details of the
+Huarong bonds are included in note 27.
+2.25 to 6.34
+(In RMB millions, unless otherwise stated)
+Annual Report 2015
+2014
+213
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 53(g) "transactions with state-owned entities in the PRC".
+Balances at end of the year:
+21
+Debt securities purchased
+Interest expense on due to customers
+Interest income on debt securities purchased
+Expense on financial liabilities designated at fair value through profit or loss
+Interest rate ranges during the year are as follows:
+2.16 to 6.34
+Transactions during the year:
+Interest receivable
+5,000
+26
+Interest payable
+20,821
+239
+16,506
+22,765
+Due to customers
+16,897
+200
+Financial liabilities designated at fair value through profit or loss
+%
+(i)
+29,323
+The MOF
+(a) Shareholders with significant influence
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+53. RELATED PARTY DISCLOSURES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+52. FIDUCIARY ACTIVITIES
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2015, the MOF directly owned approximately 34.60% (31 December
+2014: approximately 34.88%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, including the subscription and redemption of government bonds issued by the MOF.
+Details of the material transactions are as follows:
+Financial assets of the Group including securities, bills and loans have been pledged as security for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2015, the carrying value of the
+financial assets of the Group pledged as security amounted to approximately RMB144,813 million (31 December 2014:
+RMB194,448 million).
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+Debt securities purchased
+939,773
+Designated loans
+1,012,587
+51. ASSETS PLEDGED AS SECURITY
+%
+Balances at end of the year:
+Transactions during the year:
+29,169
+123,113
+89,719
+150,024
+48,340
+2014
+The PRC government bonds and the special government bond
+2015
+834,549
+2014
+2015
+Interest rate ranges during the year are as follows:
+Bond investments
+Redemption of the PRC government bonds
+Interest income on the PRC government bonds
+Subscription of the PRC government bonds
+1,037,908
+Due to customers
+Debt securities purchased
+2014
+38,975
+263
+380
+16
+1,666
+%
+2,193
+%
+0.50 to 6.50
+0.0331 to 6.50
+0 to 6.00
+Due from banks and other financial institutions
+Loans and advances to customers
+Due to banks and other financial institutions
+0 to 6.20
+0.70 to 3.80
+0 to 5.45
+0 to 7.20
+The interest rates disclosed above vary across product groups and transactions depending on the maturity date, credit risk
+of counterparty and currency. In particular, given local market conditions, the spread of certain significant or long dated
+transactions can vary across the market.
+(b) Subsidiaries
+Balances at end of the year:
+2014
+2014
+940,303
+19,827
+362,556
+2015
+Credit commitments
+Financial investments
+32,756
+Repurchase agreements
+Derivative financial liabilities
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Debt securities purchased
+Reverse repurchase agreements
+2014
+2015
+Interest rate ranges during the year are as follows:
+Loans and advances to customers
+Due from banks and other financial institutions
+Debt securities purchased
+Balances at end of the year:
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group.
+Significant transactions during the year conducted with these banks and financial institutions, and the corresponding
+balances as at 31 December 2015 are as follows:
+3.14 to 4.20
+0.01 to 3.30
+Derivative financial assets
+3.16 to 4.20
+0.01 to 2.99
+%
+515
+273
+662
+731
+722
+%
+2015
+Due to banks and other financial institutions
+Credit commitments
+Interest expense on amounts due to banks and other financial institutions
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest income on debt securities purchased
+Transactions during the year:
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+3,415
+Derivative financial liabilities
+425
+973,027
+82,410
+870,280
+76,449
+2,366
+814
+158,662
+833
+14,945
+2014
+2015
+ICBC
+214
+537
+143,845
+1,013,303
+17,089
+Group
+580
+2,094
+477
+18,978
+18,179
+16,809
+Operating lease commitments - Lessor
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+Within one year
+Over one year but within five years
+Over five years
+Group
+2015
+2014
+10,198
+6,156
+39,463
+23,987
+Group
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+(c) Credit commitments
+(In RMB millions, unless otherwise stated)
+2,369
+Financial Statements for the year ended 31 December 2015
+211
+Annual Report 2015
+55,341
+89,005
+25,198
+39,344
+Notes to Financial Statements
+Bank
+Over five years
+4,799
+2014
+13,768
+Authorised, but not contracted for
+719
+Contracted, but not provided for
+22,081
+850
+28,738
+701
+850
+3,261
+8,215
+22,800
+29,588
+3,962
+9,065
+(b) Operating lease commitments
+Operating lease commitments - Lessee
+4,965
+10,030
+12,389
+11,093
+Over one year but within five years
+5,210
+5,516
+11,533
+Within one year
+2015
+2014
+2015
+Bank
+Group
+At the end of the reporting period, the Group and the Bank leased certain office properties under operating lease
+arrangements, and the total future minimum lease payments in respect of non-cancellable operating leases were as follows:
+2014
+Guarantees issued:
+Non-financing letters of guarantees
+Bank acceptances
+465,147
+2,297,884
+2,342,123
+2,289,444
+2,220,619
+Credit risk-weighted assets of
+credit commitments(i)
+Group
+Bank
+2015
+2014
+2015
+2014
+1,071,193
+1,014,045
+1,042,388
+988,911
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Designated funds
+50. DESIGNATED FUNDS AND LOANS
+ICBC
+212
+As at 31 December 2015, the Group and the Bank had no unexpired securities underwriting obligations (31 December 2014:
+Nil).
+527,533
+(f) Underwriting obligations
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2015, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB97,477 million (31 December 2014: RMB90,874 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+(e) Redemption commitments of government bonds
+In the opinion of management, the Group and the Bank have made adequate allowance for any probable losses based on
+the current facts and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the
+financial position or operations of the Group and the Bank.
+As at 31 December 2015, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB4,715 million (31 December 2014: RMB3,001 million).
+(d) Legal proceedings
+(i) Internal Ratings-Based approach was adopted to calculate the credit risk-weighted assets according to the scope
+approved by the CBRC, and others were calculated by weighted approach.
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+474,684
+538,709
+531,827
+295,055
+274,186
+281,804
+86,357
+110,738
+33,369
+314,375
+61,839
+2015
+336,461
+2014
+348,924
+2015
+339,494
+Usance letters of credit and other commitments
+Sight letters of credit
+Financing letters of guarantees
+2014
+347,331
+2015
+27,148
+25,588
+691,737
+584,362
+727,316
+99,245
+91,546
+235,664
+56,096
+102,375
+Loan commitments:
+327,832
+210,786
+334,838
+219,199
+48,505
+With an original maturity of under one year
+With an original maturity of one year or over
+Undrawn credit card limit
+195,574
+Operating profit/(loss)
+18,308
+5,238
+17,475
+Operating income
+325,914
+244,969
+92,612
+5,238
+668,733
+Operating expenses
+(93,129)
+(100,962)
+(20,633)
+(6,111)
+(220,835)
+Impairment losses on:
+Loans and advances to customers
+(63,752)
+Share of profits of associates and joint ventures
+360,905
+(1,441)
+71,777
+121,736
+168,833
+5,519
+(971)
+(202)
+(1)
+(200)
+Others
+(86,022)
+(22,270)
+(568)
+2,330
+539
+Other income, net (i)
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Others
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as
+"internal net interest income/expense". Net interest income and expense relating to third parties are referred to as "external
+net interest income/expense".
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Year ended 31 December 2015
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Others
+Total
+143,391
+471
+64,709
+78,211
+Net fee and commission income
+(107,145)
+6,179
+152,758
+Internal net interest (expense)/income
+507,867
+193,767
+26,963
+287,137
+External net interest income
+(45,613)
+2,330
+Profit before taxation
+168,833
+24,185
+Property and equipment
+89,197
+69,444
+35,629
+30,156
+224,426
+Other non-current assets (ii)
+18,472
+7,148
+5,077
+11,083
+41,780
+Segment liabilities
+9,073,983
+7,843,009
+3,379,557
+2015
+ICBC
+218
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+(ii)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+24,185
+(i)
+538,709
+1,759,175
+Credit commitments
+Other segment information:
+20,409,261
+112,712
+2,297,884
+Including: Investments in associates and joint ventures
+22,209,780
+119,123
+2,625
+5,109
+6,534
+Amortisation
+Depreciation
+Other segment information:
+292
+Profit for the year
+(85,515)
+Income tax expense
+363,235
+889
+71,777
+121,736
+277,720
+217
+14,560
+704
+10,075,355
+3,587,372
+8,427,930
+Segment assets
+As at 31 December 2015
+57,501
+1,053
+1,189
+20,045
+25,873
+Capital expenditure
+2,295
+64
+474
+10,394
+31,906
+Annual Report 2015
+Treasury operations
+Loans and advances to customers
+Due to banks and other financial institutions
+0.73 to 4.50
+0 to 8.00
+0.05 to 6.46
+0.01 to 9.00
+0.0125 to 1.56
+0 to 5.65
+1.84 to 6.40
+0.01 to 6.98
+The material balances and transactions with subsidiaries have been eliminated in full in the consolidated financial statements.
+(c) Associates and affiliates
+Balances at end of the year:
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Due to customers
+Derivative financial liabilities
+Credit commitments
+2015
+2014
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+215
+Annual Report 2015
+10
+40
+Due from banks and other financial institutions
+66
+2,003
+305
+11,957
+2,242
+106
+329
+62
+1,062
+566
+(In RMB millions, unless otherwise stated)
+Debt securities purchased
+%
+3,169
+1,653
+385,187
+210,237
+1,893
+1,984
+4,496
+11,689
+12,500
+109,424
+127,089
+2015
+2014
+Transactions during the year:
+Interest income on debt securities purchased
+55
+71
+396
+881
+Interest rate ranges during the year are as follows:
+Net fee and commission income
+345
+106
+%
+386
+Interest expense on amounts due to banks and other financial institutions
+Net trading expense
+61
+91
+538
+779
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+616
+Transactions during the year:
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Short term employment benefits
+Post-employment benefits
+2015
+RMB'000
+3,828
+245
+2014
+RMB'000
+14,465
+317
+4,073
+14,782
+Note: The above remuneration before tax payable to key management personnel for 2014 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2014 Annual Report.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2015 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's and the Bank's 2015 financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+216
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the
+Group.
+The transactions between the Group and the aforementioned parties for the year are as follows:
+Loans
+2015
+2014
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+Personal banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Corporate banking
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+(a) Operating segments
+The aggregate compensation for the year, other than those for the personnel disclosed in note 13 above, is as follows:
+54. SEGMENT INFORMATION
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organizations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+(g) Transactions with state-owned entities in the PRC
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund does not hold any share or bond
+issued by the Group as at 31 December 2015 (31 December 2014: Annuity Fund holds the convertible bonds issued by the
+Group with an amount of RMB27.36 million).
+(f) Annuity Fund
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+The aggregated balance of loans and credit card overdraft to the person which are considered as related parties according to
+the relevant rules of Shanghai Stock Exchange was RMB6.86 million as at 31 December 2015 (31 December 2014: RMB0.54
+million).
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of
+business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and
+those state-owned entities are ultimately controlled or owned by the Government. The Group has also established pricing
+policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned
+entities.
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+(e) Key management personnel
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+0 to 8.99
+%
+%
+8
+12∞
+129
+1.61 to 2.69
+0 to 4.51
+0 to 0.45
+5
+2014
+2015
+Due to banks and other financial institutions
+Due to customers
+Loans and advances to customers
+Due from banks and other financial institutions
+Interest rate ranges during the year are as follows:
+65
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers.
+0.15 to 0.35
+2.23 to 2.68
+0.35 to 1.60
+0 to 0.68
+(d) Joint ventures and affiliates
+0.35 to 1.15
+%
+%
+2014
+2015
+16
+The major transactions between the Group and the associates and their affiliates mainly comprised due from banks and
+other financial institutions, loans and advances to customers and due to banks and other financial institutions and the
+corresponding interest income and interest expense. In the opinion of management, the transactions between the Group
+and the associates and their affiliates were conducted under normal commercial terms and conditions.
+2014
+Due to customers
+Interest rate ranges during the year are as follows:
+Interest expense on due to customers
+Transactions during the year:
+Due to customers
+Balances at end of the year:
+2015
+2014
+Notes to Financial Statements
+Bank
+4,666
+11,484
+1,328
+139,004
+12,943
+The maximum exposures to loss in the above investment funds, wealth management products and segregated asset
+management plans are the fair value of the assets held by the Group at the reporting date. The maximum exposures to loss
+in the asset-backed securites are the amortised cost or fair value of the assets held by the Group at the reporting date in
+accordance with the line items of these assets recognised in the statement of financial positions.
+(2) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest in as at 31 December 2015
+The types of unconsolidated structured entities sponsored by the Group include investment funds and non-principal-
+guaranteed wealth management products. The nature and purpose of these structured entities are to generate fees from
+managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2015, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+As at 31 December 2015, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,385,200 million (31 December 2014:
+RMB1,454,836 million) and RMB936,220 million (31 December 2014: RMB590,386 million) respectively.
+(3) Unconsolidated structured entities sponsored by the Group during the year which the
+Group did not have an interest in as at 31 December 2015
+During the year of 2015, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB6,076 million (2014: RMB7,812 million).
+During the year of 2015, the amount of income received from such category of investment funds was RMB57 million. (2014:
+RMB17 million.)
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2015 but matured before 31 December 2015 was RMB821.48 billion (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2014 but matured
+before 31 December 2014 was RMB2,308.47 billion).
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2015 but matured
+before 31 December 2015 was RMB57,936 million (The aggregated amount of the investment funds sponsored and issued
+by the Group after 1 January 2014 but matured before 31 December 2014 was RMB45,288 million).
+Annual Report 2015
+209
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+46. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+Analysis of balances of cash and cash equivalents
+Note
+2015
+2014
+Cash on hand
+20
+465
+465
+11,225
+190
+2015
+Investment funds
+Wealth management products
+Segregated asset management plans
+Trust plans
+Asset-backed securities
+Held-to
+maturity
+investments
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Group
+31 December 2014
+85,226
+Financial
+designated
+Available-
+at fair value
+financial
+through
+assets
+profit or loss
+Receivables
+3,146
+3,672
+200
+139,004
+assets
+88,714
+for-sale
+20
+assets
+1,998
+liabilities
+1,472
+Securities lending agreements
+63,834
+13,361
+71,025
+7,107
+15,359
+1,472
+Securitisation transactions
+The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to
+structured entities which issue asset-backed securities to investors.
+As the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial assets and it
+has retained control of them, those financial assets are recognised on the statement of financial position to the extent of
+the Group's continuing involvement. The extent of the Group's continuing involvement is the extent to which the Group is
+exposed to changes in the value of the transferred assets. As at 31 December 2015, loans with an original carrying amount
+of RMB29,527 million (31 December 2014: RMB9,164 million) had been securitised by the Group under arrangements in
+210
+ICBC
+Notes to Financial Statements
+which the Group retains a continuing involvement in such assets in the form of subordinated tranches. As at 31 December
+2015, the carrying amount of assets that the Group continues to recognise was RMB1,310 million (31 December 2014:
+RMB268 million).
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability. As at 31 December 2015,
+carrying amount of transferred assets that did not qualify for derecognition were RMB122 million (31 December 2014:
+RMB270 million) and carrying amount of their associated liabilities were RMB17 million (31 December 2014: RMB126
+million).
+48. SHARE APPRECIATION RIGHTS PLAN
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+49. COMMITMENTS AND CONTINGENT LIABILITIES
+(a) Capital commitments
+At the end of the reporting period, the Group and the Bank had capital commitments as follows:
+Balances with central banks other than restricted deposits
+Group
+7,107
+7,191
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+liabilities
+112,371
+94,843
+Repurchase agreements
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+122,082
+293,713
+original maturity of three months or less
+235,904
+245,148
+Reverse repurchase agreements with original maturity of
+three months or less
+903,243
+254,318
+Placements with banks and other financial institutions with
+994,264
+Carrying
+amount of
+ssociated
+1,441,298
+assets
+Carrying
+amount of
+associated
+transferred
+31 December 2014
+Carrying
+amount of
+transferred
+The following table analyses the carrying amount of the abovementioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+31 December 2015
+Carrying
+amount of
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements. The
+counterparties are allowed to sell or repledge those securities sold under agreements to repurchase in the absence of default
+by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase or
+decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral. The Group
+has determined that it retains substantially all the risks and rewards of these securities and therefore has not derecognised
+them. In addition, it recognises a financial liability for cash received as collateral.
+Repurchase transactions and securities lending transactions
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+47. TRANSFERRED FINANCIAL ASSETS
+469,704
+Other segment information:
+19,072,649
+438,216
+Total liabilities
+Credit commitments
+61,117
+747,042
+19,011,532
+(7,161,378)
+959,520
+2,555,769
+1,983,382
+319,851
+4,344,494
+3,457,784
+Unallocated liabilities
+419,494
+A description and an analysis of the major risks faced by the Group are as follows:
+158,055
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+4,693,296
+ICBC
+222
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to both the corresponding risk management departments at the
+Head Office and management of the relevant branches.
+The Group has also assigned departments monitoring financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+129,088
+55. FINANCIAL INSTRUMENTS RISK MANAGEMENT
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+221
+Annual Report 2015
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+2,342,123
+348,904
+58,811
+(In RMB millions, unless otherwise stated)
+7,431,623
+joint ventures
+20,609,953
+Property and equipment
+28,919
+28,919
+Including: Investments in associates and
+20,585,195
+(7,161,378)
+1,919,486
+1,001,247
+2,579,889
+2,008,309
+3,394,573
+3,342,070
+4,680,319
+8,820,680
+Assets by geographical areas
+Total
+(a) Credit risk
+14,363
+26,113
+12,294
+19,086
+Total assets
+24,758
+Unallocated assets
+38,981
+3,092
+1,326
+5,674
+5,307
+Liabilities by geographical areas
+3,631
+5,986
+11,274
+Other non-current assets (i)
+199,280
+72,633
+10,748
+24,204
+19,839
+2,691
+Credit risk is the risk of loss arising from a borrower's or counterparty's inability to meet its obligations. Credit risk can also
+arise from operational failures that result in an unauthorised or inappropriate guarantee, commitment or investment of
+funds. The Group is exposed to credit risk primarily due to loans, guarantees and other credit related commitments.
+The principal features of the Group's credit risk management function include:
+Collateral
+Centralised credit management policies and procedures;
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Retail loans are mainly collateralised by residential properties. As at 31 December 2015, the carrying value of retail loans
+covered by collateral amounted to RMB3,541,862 million (31 December 2014: RMB3,063,465 million), of which credit
+exposure of retail loans covered by collateral amounted to RMB3,027,428 million (31 December 2014: RMB2,577,534
+million).
+Corporate loans are mainly collateralised by properties or other assets. As at 31 December 2015, the carrying value
+of corporate loans and discounted bills covered by collateral amounted to RMB8,391,604 million (31 December 2014:
+RMB7,962,866 million), of which credit exposure of corporate loans covered by collateral amounted to RMB3,712,124
+million (31 December 2014: RMB3,666,694 million).
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Fair value of collateral is shown in note 25.
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Eliminations
+As soon as information that specifically identifies objective evidence of impairment on individual assets in a pool is available,
+those assets are excluded and individually assessed. Assets that are individually assessed for impairment and for which an
+impairment loss is or continues to be recognised are not included in a collective assessment for impairment.
+The current economic and credit environment and, whether these, in management's experience, indicate that the
+actual level of incurred but not yet identified losses is likely to be greater or less than that suggested by historical
+experience.
+•
+Historical loss experience in portfolios of similar risk characteristics; and
+•
+Individually assessed loans with no objective evidence of impairment are grouped together in portfolios of similar credit
+risk characteristics for the purpose of assessing a collective impairment loss. The collective impairment loss is assessed after
+taking into account:
+Individually assessed loans with no objective evidence of impairment
+(a) Credit risk (continued)
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+ICBC
+Although collateral can be an important mitigation of credit risk, the Group grants loans based on the assessment of the
+borrowers' ability to meet obligations out of their cash flow, instead of the value of collateral. The necessity of a collateral
+is dependent on the nature of the loan. In the event of default, the Group might sell the collateral for repayment. The fair
+value of collateral of past due but not impaired loans and impaired loans are disclosed in note 55(a)(iii).
+Annual Report 2015
+225
+Notes to Financial Statements
+2,909,988
+3,434,908
+2,974,407
+Balances with central banks
+2014
+2015
+2014
+2015
+224
+Bank
+As at the end of the reporting period, the maximum credit risk exposure of the Group and of the Bank without taking
+account of any collateral and other credit enhancements is set out below:
+Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+(i)
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+(a) Credit risk (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Group
+•
+For homogeneous groups of loans, the Group uses a collective assessment approach for impairment losses. The approach
+analyses historical trends of probability of default and the amount of the consequential loss, as well as evaluates current
+economic conditions that may have a consequential impact on inherent losses in the portfolio.
+National or local economic conditions that correlate with defaults on assets in the portfolio of loans.
+Notes to Financial Statements
+223
+Annual Report 2015
+All corporate loans and discounted bills are individually reviewed for objective evidence of impairment and classified based
+on a five-tier classification system. Corporate loans and discounted bills that are classified as substandard, doubtful or loss
+are assessed individually for impairment.
+Individually assessed loans
+The main considerations for the loan impairment assessment include whether any payments of principal or interest are
+overdue or whether there are any liquidity problems of counterparties, credit rating downgrades, or infringement of the
+original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed impairment
+and collectively assessed impairment.
+Impairment assessment
+Credit risk is often greater when counterparties are concentrated in one single industry or geographical location or have
+comparable economic characteristics.
+Risk concentration
+The Group will normally sign an International Swaps and Derivatives Association ("ISDA") Master Agreement, a China
+Interbank Market Financial Derivatives Master Agreement ("NAFMII master agreement") with its counterparties for
+documenting over-the-counter derivative activities. Each of these master agreements provides the contractual framework
+within which derivative dealing activities are conducted. Under each of these master agreements, close-out netting shall be
+applied across all outstanding transactions covered by the agreement if either party defaults.
+In addition to the credit risk exposures on credit-related assets and amounts due from or lending to banks and other
+financial institutions, credit risk also arises in other areas. For instance, credit risk exposure also arises from derivative
+financial instruments which is, however, limited to those with positive fair values, as recorded in the statement of financial
+position. In addition, the Group also makes available to its customers' guarantees which may require the Group to make
+payments on their behalf. Such payments are collected from customers based on the terms of the agreements signed. They
+expose the Group to similar risks as loans and these are mitigated by the same control processes and policies.
+To enhance the credit risk management practices, the Group also launches training programs periodically for credit officers
+at different levels.
+Information management systems designed to enable a real time risk monitoring.
+•
+Stringent qualification system for the loan approval officers; and
+•
+Risk management rules and procedures that focus on risk control throughout the entire credit business process,
+including customer investigation and credit rating, granting of credit limits, loan evaluation, loan review and approval,
+granting of loan and post-disbursement loan monitoring;
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+If there is objective evidence that an impairment loss on a loan or advance has incurred on an individual basis, the amount of
+the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash
+flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying
+amount. The impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual
+basis, the following factors are considered:
+•
+• Adverse changes in the payment status of borrowers in the group of loans; and
+Objective evidence of impairment losses on a collective basis consists of observable data indicating a measurable decrease in
+the estimated future cash flows from a portfolio of loans since the initial recognition of those loans, including:
+For the purpose of collective assessment, assets are grouped on the basis of similar credit risk characteristics that are
+indicative of the debtors' ability to pay all amounts due according to the contractual terms.
+All loans for which no impairment can be identified individually, either due to the absence of any loss events or due to
+an inability to measure reliably the impact of potential loss events on future cash flows.
+Homogeneous groups of loans, including all personal loans; and
+•
+•
+Homogenous groups of loans not considered individually significant
+Loans that are assessed for impairment losses on a collective basis include the following:
+It may not be possible to identify a single, discrete event that caused the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+The timing of the expected cash flows.
+The availability of other financial support and the realisable value of collateral; and
+Projected receipts and the expected payout should bankruptcy ensue;
+The borrower's ability to improve performance once a financial difficulty has arisen;
+•
+The sustainability of the counterparty's business plan;
+•
+Collectively assessed loans
+others
+46,239
+Overseas and
+36,254
+32,715
+102,591
+83,771
+114,660
+79,061
+114,886
+71,239
+Operating income
+8,839
+7,984
+(168)
+110
+(312)
+(8,272)
+(197)
+(2,221)
+(319)
+11,915
+634,858
+(21,206)
+(7,131)
+(7,574)
+(6,806)
+(11,495)
+(15,641)
+(3,727)
+Loans and advances to customers
+Impairment losses on:
+(218,674)
+319
+(13,844)
+(14,525)
+(38,735)
+(33,689)
+(36,334)
+(25,307)
+(35,353)
+Operating expenses
+Other income/(expense), net (i)
+132,497
+(319)
+48,166
+29,633
+47,949
+62,596
+189,569
+External net interest income
+Total
+others Eliminations
+China
+China
+China
+Rim
+River Delta
+River Delta
+Head Office
+Overseas and
+Northeastern
+75,409
+18,613
+21,587
+493,522
+6,150
+5,143
+19,403
+20,643
+22,364
+22,016
+32,565
+4,532
+(2,637)
+Net fee and commission income
+9,127
+7,669
+15,274
+70,935
+9,293
+21,946
+(134,777)
+Internal net interest (expense)/income
+533
+(1,256)
+(56,267)
+Others
+2,413
+Capital expenditure
+2,211
+174
+66
+385
+263
+137
+125
+202
+859
+Amortisation
+16,094
+2,219
+1,083
+2,806
+2,440
+4,795
+1,376
+3,033
+(i)
+Northeastern
+Western
+China
+Central
+China
+Rim
+River Delta
+Bohai
+Pearl
+Yangtze
+River Delta
+2,016
+Head Office
+As at 31 December 2014
+(i)
+35,917
+1,317
+4,007
+3,246
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+56,104
+Mainland China (HO and domestic branches)
+China
+1,469
+1,809
+15,542
+56,728
+42,456
+71,495
+42,266
+63,843
+46,239
+Operating profit
+(462)
+(268)
+(11)
+3
+(52)
+(25)
+7
+(49)
+(67)
+20,886
+359,455
+Share of profits of associates and
+joint ventures
+Depreciation
+Other segment information:
+276,286
+(85,326)
+361,612
+23,043
+15,542
+56,728
+2,252
+42,456
+42,266
+63,843
+3,387,634
+2,157
+2,157
+Profit for the year
+Income tax expense
+Profit before taxation
+71,495
+Due from banks and other financial
+2,220,619
+683,793
+China
+China
+Rim
+Delta
+River Delta
+Overseas
+eastern
+Western
+Central
+Bohai
+River
+Yangtze
+Head
+Office
+North
+Pearl
+31 December 2014
+The compositions of each geographical distribution above are set out in note 54(b).
+China
+23,952,537
+and others
+Balances with central banks
+1,917
+1,513
+47,527
+2,479
+5,506
+408,339
+other financial institutions
+Due from banks and
+3,434,908
+70,888
+8,599
+32,200
+20,387
+179,692
+49,194
+67,318
+3,006,630
+Total
+2,321,257
+748,360
+2,431,921
+8,335,564
+272,777
+57,630
+3,177
+13,253
+11,813
+20,274
+10,966
+19,021
+136,643
+1,430,266
+186,545
+2,642
+20,394
+19,189
+237,336
+34,253
+2,427,092
+1,655,254
+2,559,122
+1,701,458
+1,851,355
+2,975,095
+2,297,884
+263,163
+54,608
+207,604
+149,897
+415,973
+1,221
+250,410
+1,905,664
+8,893,748
+Total maximum credit risk exposure
+558,184
+Credit commitments
+21,654,653
+2,058,094
+693,752
+2,224,317
+398,045
+2,825,137
+314,274
+782,776
+Financial assets held for trading
+695,131
+-Available-for-sale financial assets
+2,566,390
+36,717
+4,140
+18,931
+51,699
+2,454,903
+-Held-to-maturity investments
+331,731
+12,623
+240
+1,218
+5,960
+5,948
+510
+1,140
+62,585
+37,264
+228,694
+15,006
+1,537,317
+8,026,334 2,347,364
+469,704
+8,496,038
+Total maximum credit risk exposure
+Credit commitments
+198,482
+35,468
+2,823
+11,572
+304,092
+11,312
+10,303
+16,278
+93,801
+Others
+1,176,606
+117,410
+3,422
+17,094
+16,925
+54,154
+- Receivables
+10,768,750
+58
+55
+255
+848
+5,519
+1,371
+9,377
+Derivative financial assets
+7,675
+126
+172
+301,231
+through profit or loss
+Financial assets designated at fair value
+33,990
+1,125
+32,865
+79
+322
+910
+220
+921,904
+608,799
+1,940,872
+1,462,435
+1,816,719
+1,412,991
+2,141,295
+463,735
+Financial investments
+Loans and advances to customers
+209,249
+2,983
+256,230
+Reverse repurchase agreements
+24,048
+5,446
+312,455
+3,094
+468,462
+875,753
+- Available-for-sale financial assets
+Others
+2,870,353
+226
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+(ii) Risk concentrations
+21,275,355
+22,815,655
+Western
+2,289,444
+19,054,736
+20,526,211
+20,098,598
+2,342,123
+22,440,721
+23,952,537
+Total maximum credit risk exposure
+2,297,884
+Credit commitments
+21,654,653
+164,875
+219,948
+ICBC
+(a)
+Credit risk (continued)
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Delta
+Delta
+Office
+Overseas
+eastern
+Western
+Central
+Bohai
+198,482
+River
+Head
+North
+Pearl
+Yangtze
+31 December 2015
+Group
+The following tables set out the breakdown of the Group's and the Bank's maximum credit risk exposure without taking
+account of any collateral and other credit enhancements, as categorised by geographical distribution:
+By geographical distribution
+River
+Rim
+272,777
+1,087,419
+Reverse repurchase agreements
+78,870
+Derivative financial assets
+310,398
+206,282
+312,455
+210,434
+through profit or loss
+Financial assets designated at fair value
+32,865
+115,950
+33,990
+132,465
+Financial assets held for trading
+737,740
+772,568
+782,776
+Loans and advances to customers
+996,333
+11,652,812
+24,048
+468,462
+10,768,750
+1,296,903
+1,176,606
+1,430,266
+- Available-for-sale financial assets
+319,108
+2,548,977
+2,813,091
+338,839
+331,731
+2,566,390
+Others
+2,870,353
+352,143
+Receivables
+Financial investments
+10,184,215
+259,213
+792,876
+11,026,476
+22,292
+33,290
+Held-to-maturity investments
+institutions
+China
+China
+654,867
+2,129,451
+1,636,115
+1,970,272
+1,513,330
+2,237,047
+472,341
+Loans and advances to customers
+996,333
+207,953
+788,380
+Reverse repurchase agreements
+78,870
+54,006
+843
+206
+238
+1,039,389
+11,652,812
+Financial investments
+- Receivables
+99,122
+9,607
+28,973
+11,844
+13,469
+21,454
+42,541
+2,643,343
+1,726
+-Held-to-maturity investments
+13,304
+240
+302
+4,260
+5,508
+484
+635
+327,410
+352,143
+China
+1,347
+17,758
+21,413
+592
+4,210
+411,713
+other financial institutions
+Due from banks and
+2,974,407
+Total
+and others
+135,801
+22,002
+30,432
+16,509
+84,112
+72,786
+66,674
+2,546,091
+Balances with central banks
+1,471
+1,256
+362
+242,776
+Derivative financial assets
+210,434
+5,053
+12
+50
+19
+204,917
+42
+2,746
+64
+through profit or loss
+Financial assets designated at fair value
+132,465
+16,515
+95
+115,855
+Financial assets held for trading
+683,793
+277
+Central
+Property and equipment
+Pearl
+95
+115,950
+Financial assets designated at fair value
+through profit or loss
+277
+64
+42
+204,917
+19
+50
+12
+901
+206,282
+Derivative financial assets
+18,916
+2,746
+1,347
+115,855
+1,726
+Financial assets held for trading
+212,041
+66,674
+72,786
+84,112
+16,509
+30,432
+22,002
+71,382
+2,909,988
+Due from banks and
+other financial institutions
+526,428
+4,265
+5,133
+21,434
+1,763
+949
+555
+772,568
+238
+206
+843
+302
+240
+338,839
+-Held-to-maturity investments
+2,647,078
+42,541
+21,454
+13,469
+11,844
+28,973
+9,607
+38,125
+2,813,091
+- Available-for-sale financial assets
+875,753
+54,154
+34,253
+4,260
+5,508
+484
+635
+7,268
+33,290
+Reverse repurchase agreements
+792,876
+792,876
+Loans and advances to customers
+472,341
+2,237,047
+2,546,091
+1,513,330
+1,636,115
+2,130,405
+654,867
+405,176
+11,026,476
+Financial investments
+- Receivables
+327,410
+1,977,195
+Balances with central banks
+Total
+and others
+51,208
+80,714
+Net fee and commission income
+493,522
+181,855
+(95,211)
+168,038
+(72,827)
+Internal net interest (expense)/income
+17,206
+294,461
+External net interest income
+Total
+Others
+Treasury
+operations
+banking
+banking
+Personal
+575
+132,497
+Other income/(expense), net (i)
+6,303
+Loans and advances to customers
+Impairment losses on:
+(218,674)
+(6,175)
+(18,969)
+(93,892)
+(99,638)
+Operating expenses
+Corporate
+634,858
+84,476
+237,070
+308,651
+Operating income
+8,839
+4,661
+(2,743)
+618
+4,661
+237,336
+Year ended 31 December 2014
+2,311,151
+419,494
+2,730,645
+Pearl
+North
+Head
+River
+River
+Bohai
+Central
+Western
+eastern
+Overseas
+Office
+Delta
+Delta
+Rim
+China
+China
+China
+Yangtze
+31 December 2015
+Bank
+(a) Credit risk (continued)
+1,516,926
+2,005,274
+626,034
+1,728,198
+20,098,598
+129,088
+158,055
+1,646,014
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2,163,329
+348,904
+2,077,102
+2,342,123
+22,440,721
+The compositions of each geographical distribution above are set out in note 54(b).
+Annual Report 2015
+227
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+58,811
+684,845
+19,189
+20,394
+2,642
+330,642
+10,184,215
+Financial investments
+-Receivables
+304,092
+1,140
+510
+5,948
+5,960
+1,218
+240
+319,108
+-Held-to-maturity investments
+2,454,903
+51,699
+18,931
+4,140
+608,799
+1,940,872
+1,462,435
+1,823,446
+Derivative financial assets
+10,479
+1,371
+5,519
+848
+255
+322
+910
+19,304
+2,588
+Reverse repurchase agreements
+256,230
+2,983
+259,213
+Loans and advances to customers
+463,735
+2,141,295
+1,412,991
+22,292
+310,398
+2,548,977
+695,131
+2,347,374
+453,676
+2,801,050
+1,537,513
+327,181
+1,864,694
+2,317,911
+430,897
+2,748,808
+1,516,969
+136,142
+1,653,111
+2,005,425
+626,045
+560,085
+19,054,736
+169,578
+63,188
+169,028 2,220,619
+2,175,003
+689,233
+729,113 21,275,355
+The compositions of each geographical distribution above are set out in note 54(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+228
+ICBC
+470,929
+8,614,343
+Total maximum credit risk exposure
+Credit commitments
+8,143,414
+62,585
+37,264
+228,694
+15,006
+17,094
+3,422
+28,223
+1,087,419
+- Available-for-sale financial assets
+Others
+16,278
+10,303
+16,925
+11,312
+11,572
+2,823
+1,861
+164,875
+93,801
+(40,176)
+1,037
+20
+792,851
+20,526,211
+57,204
+751,149
+192,852
+985,703 22,815,655
+2,289,444
+The compositions of each geographical distribution above are set out in note 54(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+31 December 2014
+Yangtze
+Pearl
+North
+Head
+River
+River
+Bohai
+Central
+Western
+693,945
+2,224,964
+1,701,750
+155,694 211,347
+1,857,444 2,436,311
+2,566,066
+432,707
+2,998,773
+53,182
+1,296,903
+Others
+136,668
+19,021
+10,966
+20,274
+11,813
+eastern
+13,253
+4,776
+219,948
+8,459,693
+Credit commitments
+Total maximum credit risk exposure
+558,584
+9,018,277
+2,427,147
+412,366
+2,839,513
+1,659,795
+268,690
+1,928,485
+3,177
+20
+Overseas
+Delta
+47,560
+1,556
+2,068
+1,232
+152,816
+737,740
+Financial assets held for trading
+32,865
+32,865
+Financial assets designated at fair value
+through profit or loss
+301,231
+172
+126
+7,675
+58
+79
+2,675
+5,516
+524,317
+other financial institutions
+Delta
+Rim
+China
+China
+China
+and others
+Total
+Balances with central banks
+Office
+3,006,630
+49,194
+179,692
+20,387
+32,200
+8,599
+23,614
+3,387,634
+Due from banks and
+67,318
+Bohai
+(16,091)
+Others
+2,968
+2,528
+2,131
+1,435
+2,178
+1,823
+Depreciation
+Other segment information:
+277,720
+(85,515)
+363,235
+27,214
+14,533
+53,771
+40,815
+82,649
+35,314
+1,117
+57,305
+380
+Amortisation
+1,137
+3,649
+2,727
+1,906
+1,081
+6,026
+2,488
+Capital expenditure
+2,295
+300
+68
+372
+261
+144
+104
+267
+779
+14,560
+51,634
+2,330
+2,330
+(113)
+(185)
+Others
+(86,022)
+(1,616)
+(1,769)
+(10,984)
+(9,080)
+(11,034)
+(20,546)
+(24,946)
+(6,047)
+Loans and advances to customers
+Impairment losses on:
+(220,835)
+90
+106
+(176)
+(24)
+(7)
+(21)
+Profit for the year
+Income tax expense
+Profit before taxation
+joint ventures
+Share of profits of associates and
+360,905
+24,884
+14,533
+38,487
+53,771
+82,649
+35,314
+57,305
+51,634
+Operating profit
+(971)
+(443)
+(2)
+40,815
+57,501
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+Unallocated liabilities
+20,345,000
+(7,372,469)
+810,582
+1,024,661
+2,732,706
+3,497,543 4,799,262 2,289,592
+4,995,033
+7,568,090
+Liabilities by geographical areas
+22,209,780
+Total assets
+21,066
+Unallocated assets
+41,780
+3,970
+1,318
+64,261
+Total liabilities
+20,409,261
+Other segment information:
+Yangtze
+Mainland China (HO and domestic branches)
+Year ended 31 December 2014
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+ICBC
+220
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+7,209
+2,297,884
+54,608
+207,604
+149,897
+415,973
+250,410
+398,045
+558,184
+Credit commitments
+263,163
+(15,362)
+5,610
+3,086
+Western
+China
+2,819,807
+2,216,719
+3,633,597
+3,366,173
+4,862,465
+9,142,237
+Central
+China
+Rim
+Bohai
+Pearl
+River Delta
+Yangtze
+River Delta
+Head Office
+Mainland China (HO and domestic branches)
+As at 31 December 2015
+Including: Investments in associates and
+Assets by geographical areas
+(i)
+Northeastern
+Overseas and
+China
+1,069,622
+5,839
+10,717
+Other non-current assets (i)
+224,426
+95,089
+10,771
+24,329
+19,906
+4,031
+18,844
+29,480
+14,164
+24,185
+24,185
+joint ventures
+22,188,714
+Total
+others Eliminations
+2,450,563 (7,372,469)
+11,843
+(14,593)
+(39,482)
+(34,545)
+30,286
+60,209
+7,060
+7,405,054
+8,733,769
+Segment liabilities
+16,914
+Other non-current assets (ii)
+81,543
+Property and equipment
+28,919
+28,919
+Including: Investments in associates and joint ventures
+20,609,953
+118,896
+9,402,275
+3,110,238
+7,978,544
+Segment assets
+27,242
+199,280
+4,629
+10,378
+Head Office ("HO"): the HO business division (including institutions directly controlled by the HO and their offices);
+Yangtze River Delta: including Shanghai, Jiangsu, Zhejiang and Ningbo;
+Mainland China (Head Office and domestic branches):
+The distribution of the geographical areas is as follows:
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane,
+Lima, Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh and Istanbul).
+(b) Geographical information
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(ii)
+As at 31 December 2014
+(i)
+474,684
+1,867,439
+Credit commitments
+Other segment information:
+19,072,649
+68,614
+2,865,212
+38,981
+2,342,123
+Pearl River Delta: including Guangdong, Shenzhen, Fujian and Xiamen;
+56,104
+9,770
+65,363
+127,086
+168,515
+Profit before taxation
+2,157
+2,157
+Share of profits of associates and joint ventures
+359,455
+(1,509)
+65,363
+127,086
+Operating profit/(loss)
+(462)
+5
+(144)
+(1)
+(322)
+648
+361,612
+Income tax expense
+(85,326)
+19,322
+26,235
+Capital expenditure
+2,211
+21
+414
+663
+1,113
+777
+16,094
+2,483
+4,931
+8,482
+276,286
+Amortisation
+Depreciation
+Other segment information:
+Profit for the year
+198
+(56,267)
+Bohai Rim: including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+Western China: including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+1,082
+(649)
+(2,146)
+Other (expense)/income, net (i)
+143,391
+(106)
+8,167
+5,751
+20,588
+21,179
+24,685
+22,685
+35,803
+4,639
+Net fee and commission income
+(1,440)
+8,185
+6,209
+227
+1,811
+(131)
+(37,297)
+(25,271)
+(35,297)
+(19,094)
+Operating expenses
+668,733
+(106)
+42,305
+3,182
+30,897
+84,447
+131,004
+81,307
+117,661
+76,960
+Operating income
+17,475
+11,072
+104,258
+Central China: including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+13,620
+10,207
+Head Office
+Overseas and
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Mainland China (HO and domestic branches)
+Year ended 31 December 2015
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+219
+Annual Report 2015
+branches located outside Mainland China, domestic and overseas subsidiaries, and investments in
+associates and joint ventures.
+Overseas and others:
+Northeastern China: including Liaoning, Heilongjiang, Jilin and Dalian
+River Delta
+River Delta
+Rim
+China
+26,121
+(135,954)
+Internal net interest (expense)/income
+507,867
+24,506
+17,092
+78,677
+49,421
+76,079
+24,031
+56,386
+210,421
+External net interest income
+Total
+Eliminations
+others
+China
+China
+47,333
+168,515
+319,851
+1,857,168
+438,216
+2,785,580
+(a) Credit risk (continued)
+11,189
+4,606
+Debt securities issued
+15,556,601
+37,292
+3,361,635 1,958,020
+176,248
+443
+21,738
+66,727
+33,936
+53,404
+999,881 1,291,090
+7,908,683
+Due to customers
+Certificates of deposit
+1,920,196
+31,858
+15,779
+191,326
+264,540
+494,320
+13,091
+922,373
+46,806
+279,590
+Includes reverse repurchase agreements.
+(*)
+1,537,304
+3,372,950
+19,072,649
+285,888
+2,101,575
+3,843,817
+(782,933) (479,125) 3,082,273 4,628,344
+(325,851)
+(7,958,354)
+Net liquidity gap
+525,807
+11,398
+49,964
+141,568
+72,135
+1,963,316
+63,224
+1,806,212
+9,071,841
+Total liabilities
+187,518
+Others
+203,898
+Due to banks and other financial institutions (**)
+24,191
+999
+3,364,692
+1,180,383
+1,480,361
+1,113,487
+Total assets
+58,129
+18,882
+24,360
+174,503
+Others
+199,280
+199,280
+Property and equipment
+28,919
+28,919
+Investments in associates and joint ventures
+4,086,409
+14,412
+1,171,357
+2,311,141
+416,039
+27,051
+5,183,848
+37,089
+40,845
+380,859
+2,731
+10,612
+5,639
+4,210
+Derivative financial liabilities
+589,385
+6,351
+58,708
+265,024
+206,035
+(**) Includes repurchase agreements.
+53,267
+Financial liabilities designated at fair value
+631
+186
+150
+295
+Due to central banks
+Liabilities:
+20,609,953
+3,372,950
+4,914,232
+through profit or loss
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2015
+235
+Financial investments
+11,026,476
+146,342
+3,973,504
+2,616,127
+2,785,871
+708,366
+731,234
+65,032
+Loans and advances to customers
+33,290
+752
+1,897
+18,098
+5,689
+6,854
+Derivative financial assets
+206,282
+4,437
+13,665
+170,851
+84,014
+8,994
+197,508
+2,245,551
+1,886,322
+844,074
+Total assets
+391,910
+27,437
+32,679
+22,751
+51,224
+7,730
+38,449
+211,640
+Others
+129,669
+129,669
+Property and equipment
+135,308
+135,308
+Investments in subsidiaries and associates
+4,450,998
+2,227
+1,176,355
+745,343
+134,162
+6,750
+534
+Undated
+More than
+five years
+five years
+one year
+months
+month
+on demand
+One to
+months to
+three
+than one
+repayable
+Three
+One to
+Less
+Overdue/
+31 December 2015
+Bank
+(b) Liquidity risk (continued)
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+(***)
+1,051
+Total
+Cash and balances with central banks
+through profit or loss
+Financial assets designated at fair value
+115,950
+796
+1,844
+77,365
+23,854
+12,091
+Financial assets held for trading
+1,565,444
+2,118
+20,299
+222,886
+179,239
+1,012,629
+128,273
+other financial institutions (*)
+2,991,619
+2,553,024
+438,595
+Due from banks and
+Assets:
+1,129,136
+39,298
+10,768,750
+17,267
+22,124
+122,790
+81,382
+59,151
+through profit or loss
+Financial liabilities designated at fair value
+210
+160
+30
+20
+Due to central banks
+Liabilities:
+22,209,780
+479,765
+39,157
+3,044,624
+33,018
+5,387,465
+23,629
+5,485,073
+53,048
+4,099,861
+9,188
+1,153,259
+2,021,133
+1,213
+1,018,365
+303,927
+512
+77,938
+53,158
+1,241,541
+891,898
+8,515,746
+Due to customers
+35,579
+Certificates of deposit
+2,603,051
+37,128
+45,149
+210,401
+178,260
+590,578
+1,541,535
+Due to banks and other financial institutions (**)
+76,826
+6,232
+17,170
+28,555
+12,890
+11,467
+Derivative financial liabilities
+16,234
+Total assets
+270,430
+4,340
+18,134
+31,758
+12,841
+11,116
+681
+Derivative financial assets
+210,434
+4,437
+13,665
+174,786
+9,211
+6,750
+1,051
+534
+through profit or loss
+Financial assets designated at fair value
+132,838
+373
+2,318
+11,660
+78,870
+51,295
+Loans and advances to customers
+755,892
+Others
+224,426
+224,426
+Property and equipment
+24,185
+24,185
+Investments in associates and joint ventures
+4,666,691
+14,069
+1,194,931
+2,344,194
+808,375
+207,490
+97,632
+Financial investments
+11,652,812
+149,950
+4,139,152
+2,881,766
+2,918,622
+739,152
+68,278
+443
+183,352
+3,574,017
+34,373
+383
+686
+2,007
+27,449
+3,693
+155
+Financial assets held for trading
+1,251,238
+30,310
+99,055
+113,831
+645,635
+362,407
+other financial institutions (*)
+Due from banks and
+3,523,622
+2,985,445
+538,177
+Cash and balances with central banks
+Assets:
+Financial assets designated at fair value
+Total
+through profit or loss
+19,025
+99,506
+3,690,574
+2,697,265
+2,631,307
+865,101
+747,392
+37,605
+Loans and advances to customers
+24,048
+1,020
+2,524
+10,483
+5,525
+4,496
+Derivative financial assets
+312,455
+4,160
+13,506
+113,550
+122,230
+39,189
+795
+(***)
+Undated
+More than
+five years
+2,288,046
+3,197,027
+653,334
+6,896
+64,250
+306,622
+195,745
+72,154
+17,054
+143,495
+4,073,614
+26,247
+11,789
+73,697
+1,694,145
+(540,886)
+1,698,538
+322,595
+(9,385,821)
+Net liquidity gap
+77,754
+287,242
+10,404,186
+Total liabilities
+Others
+9,880
+Debt securities issued
+16,281,939
+3,075
+2,055,662
+250,732
+20,409,261
+5,136,733
+3,044,624
+One to
+five years
+one year
+months
+month
+on demand
+Three
+months to
+three
+than one
+repayable
+One to
+Financial investments
+Less
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+31 December 2014
+(b) Liquidity risk (continued)
+ICBC
+234
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+1,800,519
+Overdue/
+3,909,781
+5,079,320
+5,199,869
+83,231
+24,225
+12,729
+Financial assets held for trading
+1,692,809
+50
+34,250
+202,647
+155,711
+1,093,314
+206,837
+Due from banks and other financial institutions (*)
+3,063,113
+2,588,027
+3,480
+471,606
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+13,790
+Undated
+4,916
+139,264
+222,918
+Others
+835,939
+212,512
+98,461
+Financial investments
+5,903,532
+4,481,120
+3,407,083
+878,558
+815,009
+69,484
+Loans and advances to customers (**)
+13,689
+174,944
+9,776
+6,802
+1,065
+534
+through profit or loss
+Financial assets designated at fair value
+373
+33,767
+More than
+five years
+one year
+18,040,854
+232,888
+4,537,039
+469,189
+7,426
+243,690
+189,801
+37,504
+2,251
+7,469
+6,665
+49,115
+68,472 135,334
+44,936
+1,458,104 1,797,623 3,644,445 2,052,325
+(137,021) (727,981) (472,922) 2,880,151
+163,906
+8,855,469
+(7,887,371)
+Net liquidity gap
+Total liabilities
+Others
+Debt securities issued
+15,024,101
+34,420
+1,936,382
+3,260,494
+1,187,301
+836,581
+7,768,923
+Due to customers
+3,320,966
+five years
+1,512,861
+Includes reverse repurchase agreements.
+months
+one month
+on demand
+One to
+months to
+three
+Less than
+Three
+One to
+Overdue/
+repayable
+31 December 2015
+Group
+(b) Liquidity risk (continued)
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+237
+Annual Report 2015
+The tables below summarise the maturity profile of the Group's and of the Bank's financial instruments based on the
+contractual undiscounted cash flows. The balances of some items in the tables below are different from the balances on
+the statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group
+and the Bank's expected cash flows on these instruments may vary significantly from the following analysis. For example,
+demand deposits from customers are expected to maintain a stable or increasing balance although they have been classified
+as repayable on demand in the following tables.
+(ii) Maturity analysis of contractual undiscounted cash flows
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+(*)
+137,109
+5,282
+2,414,570
+5,815
+Derivative cash flows:
+20,229,097
+276,855
+30,908
+323,782
+405,868
+250,514
+25,980 106,603
+3,387 34,126
+3,978,219 2,353,304
+186,841
+16,438,661
+3,457
+2,128,421
+3,632,057
+522
+17,207
+79,441
+35,766 53,905
+893,282 1,264,680
+9,987 12,784
+9,825 2,497
+1,622,796 1,637,363
+196,112
+10,313,633
+Others
+Debt securities issued
+8,516,764
+Due to customers
+Certificates of deposit
+Derivative financial instruments settled on net basis
+2,613,633
+557
+(37)
+ICBC
+238
+Includes repurchase agreements.
+(*)
+3,632
+(1,141)
+(3,934,091)
+3,937,723
+35,759
+(36,900)
+1,592,386 267,045
+(1,587,293) (264,255)
+2,790
+5,093
+(992) (2,241)
+123
+1,234,460 752,515
+(1,235,452) (754,756)
+(55,435)
+- Cash outflow
+55,558
+Derivative financial instruments settled on gross basis:
+- Cash inflow
+519
+37
+67
+(105)
+7,374
+37,141
+214,820
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2015
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+25,975,994
+2,844,939
+7,148,222
+7,124,489
+4,546,050
+1,286,570
+2,054,345
+971,379
+277,906
+2,242
+508
+4,437 211,247
+235,756 15,790,542
+14,104 4,801,113
+1,225,527
+One to
+three
+months
+47,487
+Three
+months to
+one year
+five years
+307,028
+1,240
+19,300
+22,503
+123,294
+81,491
+592,445 180,183
+1,541,557
+Due to banks and other financial institutions (*)
+59,200
+through profit or loss
+Financial liabilities designated at fair value
+211
+160
+31
+20
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+One to
+443
+20,301
+47,779
+(b) Liquidity risk (continued)
+ICBC
+236
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+19,285,200
+2,998,444 1,761,746
+548,562
+57,009
+6,689
+2,179,640 195,141
+2,899,680 5,004,728
+139,405
+3,891,083
+18,698
+(379,893)
+523,880
+(9,303,791)
+Net liquidity gap
+1,509,029
+1,362,442
+10,147,865
+Total liabilities
+69,291
+57,126
+31 December 2014
+219,042
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Less
+other financial institutions (*)
+Due from banks and
+3,473,327
+2,950,038
+523,289
+Cash and balances with central banks
+Assets:
+Total
+Undated
+(***)
+More than
+five years
+One to
+five years
+one year
+months
+month
+on demand
+months to
+three
+than one
+repayable
+Three
+One to
+Overdue
+244,088
+Others
+184,016
+1,500,867
+other financial institutions (**)
+Due to banks and
+33,144
+931
+2,004
+14,665
+7,140
+8,404
+Derivative financial liabilities
+297,414
+15,840
+21,682
+122,646
+81,380
+55,866
+through profit or loss
+Financial liabilities designated at fair value
+Liabilities:
+21,046,946
+2,998,444
+424,289
+240,175
+125,601
+23,136
+38,850
+8,872
+7,197
+1,240
+Debt securities issued
+15,781,673
+3,062
+2,027,537
+3,476,619
+1,136,934
+765,431
+8,372,090
+Due to customers
+150,113
+443
+15,264
+69,614
+40,220
+24,572
+Certificates of deposit
+2,234,119
+160,226
+536,533
+82,043
+106,694
+Financial liabilities designated at fair value
+226
+226
+Due to central banks
+Liabilities:
+19,553,715
+3,320,966
+4,769,927
+4,932,476
+333,935
+25,471
+34,066
+24,779
+48,807
+3,171,523
+1,069,642
+1,321,083
+968,098
+Total assets
+9,429
+22,751
+168,632
+through profit or loss
+Others
+53,223
+265,024
+39,966
+28,620
+Certificates of deposit
+1,554,998
+4,835
+125,181
+223,864
+331,701
+869,417
+other financial institutions (**)
+Due to banks and
+22,324
+798
+2,140
+10,284
+5,301
+3,801
+Derivative financial liabilities
+589,217
+6,227
+58,708
+206,035
+126,868
+126,868
+Property and equipment
+Derivative financial assets
+310,398
+4,160
+13,506
+112,696
+121,089
+39,127
+19,025
+795
+through profit or loss
+Financial assets designated at fair value
+32,865
+651
+1,580
+26,820
+3,664
+150
+Financial assets held for trading
+996,953
+2,023
+25,572
+4,249
+5,331
+10,297
+1,838
+114,661
+114,661
+Investments in subsidiaries and associates
+3,958,201
+2,727
+1,157,691
+2,247,973
+385,644
+128,776
+35,390
+81,757
+Financial investments
+97,041
+3,561,413
+2,518,038
+2,472,172
+801,272
+702,985
+31,294
+Loans and advances to customers
+22,292
+577
+10,184,215
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+17,726
+116,546
+2014
+2015
+2014
+Renegotiated loans and advances to
+customers
+4,557
+4,579
+4,441
+3,882
+- Impaired loans and advances to
+customers included in above
+1,942
+2,061
+1,905
+2,004
+Collateral repossessed
+During the year, the Group took possession of collateral held as security with a carrying amount of RMB3,690 million (2014:
+RMB2,030 million). Such collateral mainly comprises land and buildings, equipment and others.
+Annual Report 2015
+231
+Notes to Financial Statements
+2015
+Bank
+Group
+The carrying amount of renegotiated loans and advances to customers is as follows:
+7,756
+18,655
+113,177
+32,298
+145,475
+52,889
+28,206
+81,095
+Fair value of collateral held
+Financial Statements for the year ended 31 December 2015
+314,159
+179,870
+54,934
+53,438
+108,372
+Impaired
+Impaired loans and advances are defined as those loans and advances having objective evidence of impairment as a result of
+one or more events that occured after initial recognition and that event has an impact on the estimated future cash flows
+of loans and advances that can be reliably estimated. These loans and advances include corporate loans and personal loans
+which are graded as "Substandard", "Doubtful" or "Loss".
+The fair values of collateral that the Group and the Bank hold relating to loans individually determined to be impaired as
+at 31 December 2015 amounted to RMB43,771 million (31 December 2014: RMB28,925 million) and RMB42,196 million
+(31 December 2014: RMB28,058 million), respectively. The collateral mainly consists of land and buildings, equipment and
+others.
+Renegotiated loans and advances to customers
+The Group has formulated a set of loan restructuring policies to renegotiate the contractual terms with customers, to
+maximise the collectability of loans and to manage customer relationships.
+63,324
+10,899
+(In RMB millions, unless otherwise stated)
+(iv) Debt securities
+1,878,919
+Policy banks
+15,090
+1,159,165
+327,141
+1,726
+9,970
+1,513,092
+Public sector entities
+1,500
+93,269
+4,272
+907
+117,674
+Banks and other financial institutions
+171,997
+52,573
+360,194
+82,320
+5,512
+179,759
+1,608,648
+85,000
+The credit risk of debt securities mainly arises from the risk that the issuer might default on a payment or go into liquidation.
+Debt securities by different types of issuers are generally subject to different degrees of credit risk.
+The following tables present an analysis of the Group's total credit risk exposures of debt securities by types of issuers and
+investments:
+Group
+31 December 2015
+Financial
+Available-
+Held-to-
+for-sale
+Receivables
+(a) Credit risk (continued)
+maturity
+investments
+Financial
+assets held
+assets
+designated
+at fair value
+through
+assets
+for trading
+profit or loss
+Total
+Neither past due nor impaired
+Governments and central banks
+financial
+1,139
+38,315
+28,699
+84,839
+33,068
+14,004
+47,072
+One to two months
+22,052
+7,870
+29,922
+14,428
+6,891
+21,319
+Two to three months
+30,099
+9,642
+39,741
+10,977
+7,769
+18,746
+121,077
+15,913
+68,926
+Less than one month
+Past due for:
+2,943,626
+1,339,027
+4,502,333
+1,319,691
+10,000,938
+103,629
+25,220 1,344,911
+4,605,962
+232,588
+10,233,526
+Past due but not impaired
+The following tables present the ageing analysis of each type of loans and advances to customers of the Group and the Bank
+that are subject to credit risk which are past due but not impaired as at the end of the reporting period:
+33,425
+Group
+2014
+Corporate
+loans and
+Personal
+advances
+loans
+Total
+Corporate
+loans and
+advances
+Personal
+loans
+Total
+2015
+9,616
+154,502
+28,664
+advances
+loans
+Total
+Past due for:
+Less than one month
+62,514
+15,138
+77,652
+28,232
+13,609
+41,841
+One to two months
+21,964
+7,544
+29,508
+13,758
+6,841
+20,599
+Two to three months
+Total
+loans
+advances
+Personal
+87,137
+Fair value of collateral held
+118,814
+65,453
+184,267
+57,332
+54,452
+111,784
+ICBC
+58,473
+230
+Bank
+2015
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2014
+Corporate
+Corporate
+loans and
+Personal
+loans and
+(a) Credit risk (continued)
+668,223
+Corporate entities
+40,572
+318,918
+2,566,390
+75
+1,172,934
+128
+33,990
+101,560
+4,193,792
+(*)
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Group considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Group as security of the impaired debt securities.
+232
+ICBC
+(a) Credit risk (continued)
+Bank
+31 December 2015
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Available-
+Financial
+assets
+designated
+Total
+53
+Subtotal
+(142)
+551,198
+Subtotal
+318,918
+2,566,337
+1,172,859
+33,990
+101,560
+4,193,664
+Impaired (*)
+Held-to-
+Banks and other financial institutions
+Corporate entities
+78
+117
+75
+192
+195
+75
+270
+Less: impairment losses
+(142)
+78
+57,854
+for-sale
+financial
+1,500
+16,671
+90,748
+4,272
+907
+114,098
+Banks and other financial institutions
+171,997
+59,349
+324,828
+76,100
+1,104
+633,378
+Corporate entities
+40,572
+11,818
+404,528
+33,127
+10,028
+Public sector entities
+1,499,086
+9,970
+1,609
+Financial
+assets held
+at fair value
+through
+Receivables
+investments
+assets
+for trading
+profit or loss
+Total
+maturity
+Neither past due nor impaired
+85,000
+1,576,164
+153,413
+842
+1,815,419
+Policy banks
+15,090
+1,149,092
+323,325
+Governments and central banks
+19,557
+404,755
+21,468
+Banks and other financial institutions
+Corporate entities
+| |
+92
+92
+434
+434
+92
+434
+526
+Less: Individual allowance for
+impairment losses
+Subtotal
+Total
+(92)
+(293)
+(385)
+141
+141
+Impaired (*)
+4,741,733
+22,224
+132,465
+32,244
+442,169
+38,635
+10,208
+563,828
+Subtotal
+314,159
+2,870,356
+1,402,532
+314,159
+132,465
+4,741,736
+Less: Collective allowance for
+impairment losses
+(3)
+(3)
+Subtotal
+314,159
+2,870,353
+1,402,532
+22,224
+2,870,353
+1,402,673
+132,465
+367,455
+789
+29,120
+1,687,791
+Public sector entities
+1,500
+21,125
+93,488
+192
+1,275,337
+3,021
+Banks and other financial institutions
+167,278
+16,666
+170,885
+10,816
+11,565
+377,210
+Corporate entities
+47,564
+119,326
+Total
+15,090
+1,458,139
+22,224
+4,741,874
+31 December 2014
+Financial
+assets
+Held-to-
+maturity
+Available-
+for-sale
+financial
+Financial
+assets held
+Receivables
+Policy banks
+investments
+for trading
+designated
+at fair value
+through
+profit or loss
+Total
+Neither past due nor impaired
+Governments and central banks
+87,486
+1,231,741
+136,276
+2,636
+assets
+2014
+Special
+mention
+39,852
+63,887
+1,275,140
+2,903,774
+Neither past due nor impaired
+Past due but not impaired
+Impaired
+11,599,446
+154,502
+179,518
+11,933,466
+Less: Allowance for impairment losses
+(280,654)
+11,652,812
+10,814,697
+87,137
+124,497
+11,026,331
+(257,581)
+10,768,750
+10,979,700
+145,475
+173,857
+11,299,032
+(272,556)
+10,233,526
+81,095
+120,756
+10,435,377
+(251,162)
+11,026,476
+10,184,215
+2014
+Annual Report 2015
+2015
+2015
+662,217
+Subtotal for personal loans
+3,541,862
+3,063,465
+3,471,539
+3,007,959
+Discounted bills
+Total for loans and advances to customers
+522,052
+11,933,466
+350,274
+11,026,331
+511,707
+11,299,032
+344,099
+10,435,377
+(iii) Loans and advances to customers
+The total credit risk exposures of loans and advances to customers are summarised as follows:
+Group
+Bank
+2014
+712,843
+229
+Financial Statements for the year ended 31 December 2015
+24,030
+12,700
+Financial assets held for trading
+1,680,126
+41
+30,904
+197,090
+153,808
+1,091,447
+206,836
+other financial institutions (*)
+Due from banks and
+3,059,633
+2,588,027
+471,606
+Cash and balances with central banks
+Assets:
+500,073
+Notes to Financial Statements
+11,220,411
+Pledged loans
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+Neither past due nor impaired
+The balance of loans and advances to customers of the Group and the Bank that are neither past due nor impaired analysed
+by five-tier classification and by collateral are as follows:
+Group
+2015
+Special
+Pass
+mention
+Total
+Pass
+Unsecured loans
+3,209,224
+Guaranteed loans
+1,425,870
+Loans secured by mortgages
+5,131,186
+1,454,131
+Total
+676,134
+Others
+821,903
+878,113
+Production and supply of electricity,
+heating, gas and water
+835,616
+751,728
+799,646
+708,326
+Leasing and commercial services
+724,246
+624,046
+696,444
+600,812
+Real estate
+Water, environment and
+public utility management
+Mining
+923,005
+562,917
+866,779
+1,352,250
+By industry distribution
+The credit risk exposures of the Group mainly comprise loans and advances to customers and investments in securities.
+Details of the composition of the Group's investments in debt securities are set out in note 55(a)(iv) to the financial
+statements. The composition of the Group's and of the Bank's gross loans and advances to customers by industry is analysed
+as follows:
+Group
+Bank
+2015
+2014
+2015
+2014
+Manufacturing
+1,603,631
+1,642,460
+1,527,906
+1,565,314
+Transportation, storage and postal services
+1,551,248
+1,439,285
+1,458,156
+Wholesale and retail
+730,574
+530,103
+454,883
+128,682
+115,238
+Others
+383,437
+354,450
+337,874
+284,839
+Subtotal for corporate loans
+7,869,552
+7,612,592
+7,315,786
+7,083,319
+Personal mortgage and business loans
+2,811,288
+2,387,331
+2,758,696
+2,345,742
+123,207
+453,665
+137,497
+161,846
+472,791
+477,193
+463,172
+470,172
+280,556
+301,261
+261,988
+281,433
+Construction
+226,619
+220,860
+213,570
+210,093
+Lodging and catering
+224,215
+224,994
+152,780
+Science, education, culture and sanitation
+Undated
+(***)
+Subtotal
+One to five
+years
+through
+profit or loss
+for trading
+assets
+investments
+Receivables
+at fair value
+Financial
+assets held
+designated
+Financial
+assets
+Available-
+for-sale
+financial
+Total
+maturity
+4,562,112
+22,009
+115,950
+1,296,903
+2,813,091
+314,159
+61
+61
+(70)
+(46)
+Held-to-
+(24)
+Neither past due nor impaired
+87,486
+146,000
+22,608
+167,278
+Banks and other financial institutions
+115,487
+3,021
+192
+90,664
+20,110
+1,500
+Governments and central banks
+Public sector entities
+29,120
+789
+359,775
+1,273,622
+15,090
+Policy banks
+1,428,808
+1,538
+117,090
+1,222,694
+1,678,396
+131
+107
+24
+115,950
+1,296,842
+2,813,094
+38,155 3,247,379 3,082,321
+119,735 1,545,605 1,394,854
+189,839 5,321,025 4,740,077
+31,306 1,485,437 1,359,527
+379,035 11,599,446 10,576,779
+2014
+Special
+mention
+41,084 3,123,405
+64,417 1,459,271
+106,667 4,846,744
+Total
+25,750 1,385,277
+237,918 10,814,697
+Bank
+2015
+Pass
+22,009
+Special
+mention
+Pass
+Unsecured loans
+3,135,856
+Guaranteed loans
+1,352,375
+Loans secured by mortgages
+4,701,956
+Pledged loans
+1,419,713
+10,609,900
+36,398 3,172,254
+118,830 1,471,205
+184,160 4,886,116
+30,412 1,450,125
+369,800 10,979,700
+Total
+4,562,054
+Less: Collective allowance for
+impairment losses
+107
+107
+-
+24
+31 December 2014
+Total
+Subtotal
+impairment losses
+Less: Individual allowance for
+Corporate entities
+24
+institutions
+Banks and other financial
+Impaired (*)
+4,562,051
+22,009
+115,950
+1,296,842
+2,813,091
+314,159
+Subtotal
+(3)
+(3)
+10,789
+More than
+five years
+11,565
+Corporate entities
+30
+4,089,570
+Impaired debt securities above are all determined based on individual assessments. In determining whether a debt security is
+impaired, the Bank considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral was
+held by the Bank as security of the impaired debt securities.
+Annual Report 2015
+233
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+one year
+Three
+months to
+One to
+three
+months
+Less than
+one month
+on demand
+(24)
+repayable
+31 December 2015
+Group
+358,240
+The Group and the Bank's expected remaining maturity of its financial instruments may vary significantly from the following
+analysis. For example, demand deposits from customers are expected to maintain a stable or increasing balance although
+they have been classified as repayable on demand in the following tables.
+(i) Analysis of the remaining maturity of the assets and liabilities
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+projecting cash flows and evaluating the level of current assets; and
+maintaining the stability of the deposit base;
+optimising the structure of assets and liabilities;
+•
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Liquidity risk is the risk that capital will not be sufficient or funds will not be raised at a reasonable cost in a timely manner
+to meet the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or
+maturity mismatches of assets and liabilities.
+(b) Liquidity risk
+Overdue/
+54
+(*)
+101,391
+47,564
+9,943
+373,860
+19,557
+57,685
+508,609
+Subtotal
+318,918
+2,548,977
+1,087,389
+54
+101,391
+4,089,540
+Impaired (*)
+32,865
+Less: impairment losses
+32,865
+1,087,419
+Banks and other financial institutions
+Corporate entities
+2,548,977
+30
+30
+(24)
+30
+24
+318,918
+Total
+Subtotal
+24
+N/A
+237,890
+1,016,868
+N/A
+1,161,974
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+248
+(*)
+(1,083,560)
+3,260,487
+18,040,854
+4,835
+7,175
+1,554,998
+46,014
+5,701
+443
+137,109
+Due to customers
+9,414,307
+1,936,382
+34,420
+378,505
+15,024,101
+Interest rate mismatch
+Debt securities issued
+16,150
+21,403
+189,801
+243,690
+Others
+469,189
+469,189
+Total liabilities
+11,405,435
+3,505,791
+1,974,548
+224,664
+930,416
+16,336
+ICBC
+111,002
+23,960
+4,160 325,671
+151,851 15,568,828
+14,412 4,857,696
+8,259
+3,164,510 25,810,947
+7,071,583
+7,496,216
+4,019,801
+1,375,179
+1,596,495
+1,087,163
+62
+150
+3,964
+183,699
+4,564
+146,900
+Others
+1,398,445
+2,696,242
+539,907
+160,080
+48,610
+Financial investments
+5,658,407
+4,643,923
+19,800
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+206,447
+53,267
+through profit or loss
+Financial liabilities designated at fair value
+652
+203
+153
+296
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2014
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+terms.
+3,217,940
+265,981
+1,039,168
+38,313
+538,177
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+Undated
+One to More than
+five years
+five years
+Three
+months to
+one year
+4,030
+months
+on demand
+three
+Less than
+repayable
+One to
+Overdue/
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+31 December 2014
+(b) Liquidity risk (continued)
+one month
+2,985,445
+3,527,652
+Due from banks and other financial institutions (*)
+Loans and advances to customers (**)
+13,910
+121,307
+124,895
+41,228
+19,376
+795
+through profit or loss
+Financial assets designated at fair value
+36,448
+383
+759
+2,291
+29,015
+3,836
+164
+Financial assets held for trading
+1,310,953
+32,303
+104,080
+122,273
+689,319
+362,978
+819,226
+124,432
+59,683
+592,370
+on demand
+Three
+One to
+Overdue/
+repayable
+31 December 2015
+Bank
+(b) Liquidity risk (continued)
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+239
+Less than
+one month
+Annual Report 2015
+(*)
+2,329,769
+(2,327,611)
+2,158
+2
+477
+(4,454)
+4,456
+94,650
+(94,173)
+882,747
+(884,026)
+(1,279)
+(486)
+3,444
+Includes repurchase agreements.
+three
+months
+months to
+one year
+12,102
+Financial assets held for trading
+1,576,747
+2,500
+22,038
+228,150
+181,145
+1,014,641
+128,273
+Due from banks and other financial institutions (*)
+2,995,051
+2,553,024
+3,432
+438,595
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+Undated
+More than
+five years
+five years
+One to
+660,772
+(661,258)
+6,992
+(683,700)
+687,144
+15,801,819
+46,026
+2,085,875
+1,307,264 3,450,308
+1,002,203
+7,910,143
+Due to customers
+179,095
+536
+22,453
+Debt securities issued
+68,015
+34,189
+Certificates of deposit
+1,933,499
+33,683
+18,295
+196,947
+266,186
+495,736
+922,652
+Due to banks and other financial institutions (*)
+53,902
+Others
+67,980
+8,954,042
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+23
+43
+(42)
+11
+5
+6
+19,074,916
+5,815
+347,270
+191,225
+5,815
+6,991
+17,277
+376,256
+260,034
+79,094
+20,991
+11,510
+27,609 37,415
+1,932,748 3,833,512 2,230,189
+4,627
+28,138
+1,771,340
+- Cash outflow
+72,544
+1,418,556
+84,951
+institutions (**)
+653,334
+20,409,261
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2015
+245
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+31 December 2014
+648,573
+1,148,451
+N/A
+Less than
+three
+months
+Non-
+One to
+More than
+interest-
+five years
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+3,097,706
+425,916
+Three
+months to
+one year
+3,523,622
+204,625
+1,119,599
+1,588,520
+107,758
+66,575
+8,576
+443
+183,352
+Due to customers
+10,316,969
+3,563,821
+2,052,611
+3,075
+345,463
+16,281,939
+399,606
+Debt securities issued
+33,046
+3,371
+16,674
+150
+63,223
+617
+193,679
+623
+306,622
+Total liabilities
+Interest rate mismatch
+12,998,022
+3,903,910
+2,154,253
+(1,481,484)
+Others
+Certificates of deposit
+Due from banks and
+1,117,192
+336,616
+534,238
+2,074,855
+1,129,018
+11,682
+4,086,409
+Investments in associates and
+joint ventures
+28,919
+28,919
+Property and equipment
+199,280
+Financial investments
+199,280
+2,518
+Total assets
+10,953,605
+9,153
+4,847,836
+369,188
+380,859
+2,375,759
+1,290,053
+1,142,700
+20,609,953
+Liabilities:
+Due to central banks
+Others
+other financial institutions (*)
+10,768,750
+146,863
+101,192
+27,269
+5,585
+1,251,238
+Financial assets held for trading
+4,327
+27,444
+1,553
+666
+383
+34,373
+Financial assets designated at
+72,744
+fair value through profit or loss
+122,379
+112,527
+13,506
+4,955
+312,455
+Derivative financial assets
+24,048
+24,048
+Loans and advances to customers
+6,336,158
+4,053,430
+159,555
+59,088
+2,603,051
+15,457
+6,805
+interest-
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,672,292
+387,341
+3,059,633
+Due from banks and
+other financial institutions (*)
+1,438,201
+197,465
+More than
+five years
+27,608
+16,811
+1,680,126
+Financial assets held for trading
+41,451
+82,154
+6,619
+2,241
+373
+132,838
+Financial assets designated at
+fair value through profit or loss
+9,405
+41
+9,339
+One to
+five years
+Three
+months to
+one year
+Effect on net interest income
+2015
+(5,926)
+5,926
+2014
+(1,635)
+1,635
+Effect on equity
+2015
+(38,609)
+41,729
+2014
+(30,483)
+32,354
+Change in basis points
++100 basis points
+-100 basis points
+Effect on net interest income
+2015
+(6,348)
+6,348
+Non-
+Effect on equity
+2015
+(34,323)
+36,791
+2014
+(28,604)
+30,306
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's and the Bank's current interest rate risk profile. This effect, however, does not incorporate
+actions that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+244
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+31 December 2015
+Less than
+three
+months
+2014
+(1,891)
+1,891
+173,054
+13,665
+4,971
+479,765
+2,553,859
+1,324,224
+1,322,729
+22,209,780
+Liabilities:
+Due to central banks
+20
+30
+160
+210
+Financial liabilities designated at
+469,495
+fair value through profit or loss
+21,682
+15,953
+62,132
+303,927
+Derivative financial liabilities
+76,826
+76,826
+Due to banks and
+other financial institutions (**)
+2,332,698
+234,978
+13,113
+204,160
+225
+5,492,430
+11,516,538
+Total assets
+210,434
+Derivative financial assets
+78,870
+78,870
+Loans and advances to customers
+6,897,524
+4,333,873
+188,200
+130,887
+102,328
+11,652,812
+Financial investments
+447,620
+869,374
+2,158,378
+1,177,390
+13,929
+4,666,691
+Investments in associates and
+joint ventures
+24,185
+24,185
+Property and equipment
+224,426
+224,426
+Others
+10,045
+295
+150
+186
+631
+58,563
+8,074
+443
+150,113
+Due to customers
+10,051,225
+3,463,631
+2,027,361
+3,061
+236,395
+15,781,673
+Debt securities issued
+83,033
+17,189
+30,098
+184,016
+240,175
+Others
+548,562
+548,562
+Total liabilities
+12,385,030
+3,731,860
+Interest rate mismatch
+(1,542,015)
+1,600,877
+8,872
+2,083,267
+298,586
+Certificates of deposit
+23,556
+Others
+391,910
+391,910
+Total assets
+10,843,015
+5,332,737
+2,381,853
+1,298,457
+1,190,884
+21,046,946
+Liabilities:
+Financial liabilities designated at
+2,234,119
+fair value through profit or loss
+21,682
+15,840
+55,866
+297,414
+Derivative financial liabilities
+33,144
+33,144
+Due to banks and other financial
+institutions (**)
+2,029,557
+179,112
+1,894
+204,026
+187,520
+897,523
+19,285,200
+106,694
+25,572
+2,023
+9,732
+996,953
+Financial assets held for trading
+4,241
+26,820
+1,153
+651
+32,865
+Financial assets designated at
+852,932
+fair value through profit or loss
+121,238
+111,674
+13,506
+4,955
+310,398
+Derivative financial assets
+22,292
+22,292
+Loans and advances to customers
+6,033,430
+3,907,837
+59,402
+59,025
+institutions (*)
+Due from banks and other financial
+3,473,327
+1,110,937
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2015
+247
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+31 December 2014
+Less than
+three
+months
+Three
+Non-
+months to
+one year
+One to
+More than
+interest-
+five years
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+3,050,431
+422,896
+129,669
+Bank
+129,669
+135,308
+15,556,601
+Debt securities issued
+23,343
+21,977
+32,344
+201,926
+279,590
+Others
+Total liabilities
+12,001,044
+3,699,928
+2,014,083
+480,865
+267,276
+525,807
+19,072,649
+Interest rate mismatch
+(1,047,439)
+1,147,908
+361,676
+1,022,777
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+525,807
+1,090,318
+246
+34,420
+3,360,963
+Financial liabilities designated at
+fair value through profit or loss
+471,059
+58,708
+6,351
+53,267
+589,385
+Derivative financial liabilities
+24,191
+24,191
+Due to banks and
+other financial institutions (**)
+1,953,002
+1,675,165
+15,158
+30,487
+6,188
+1,920,196
+Certificates of deposit
+103,831
+64,932
+7,042
+443
+176,248
+Due to customers
+9,727,351
+193,198
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+9,405
+9,122
+169,119
+13,665
+4,971
+206,282
+Derivative financial assets
+33,290
+33,290
+Loans and advances to customers
+6,457,483
+4,218,448
+fair value through profit or loss
+130,127
+99,711
+11,026,476
+Financial investments
+420,217
+806,570
+2,060,875
+1,161,171
+2,165
+4,450,998
+Investments in subsidiaries and
+associates
+135,308
+120,707
+Financial assets designated at
+115,950
+796
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Bank's assets and
+liabilities:
+31 December 2015
+Less than
+three
+months
+Three
+months to
+one year
+Non-
+One to
+five years
+More than
+five years
+interest-
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,607,873
+383,746
+2,991,619
+Due from banks and other financial
+institutions (*)
+1,311,681
+221,232
+20,299
+2,118
+10,114
+1,565,444
+Financial assets held for trading
+36,356
+77,365
+1,433
+Property and equipment
+-100 basis points
++100 basis points
+Change in basis points
+2,458,099
+(2,457,845)
+(56)
+254
+(*)
+Includes repurchase agreements.
+240
+ICBC
+(b) Liquidity risk (continued)
+31 December 2014
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Overdue/
+(1,488)
+One to
+Less than
+on demand
+one month
+three
+months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+(***)
+Total
+Non-derivative cash flows:
+Financial assets:
+repayable
+Cash and balances with central banks
+1,432
+- Cash outflow
+Others
+175,509
+10,105,152
+1,242
+2,377
+1,301,993 1,459,130
+7,894
+100
+16,240
+727
+67,818
+229,869
+323,063
+748
+3,952
+183,413
+707,203 458,376 1,212,795 78,293
+(709,123) (460,906) (1,208,811) (77,517)
+(1,920) (2,530) 3,984
+776
+3,808,847
+237,784
+19,140,525
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+256
+(127)
+(87)
+(19)
+(68)
+(45)
+Derivative financial instruments settled on gross basis:
+- Cash inflow
+2,227,619
+523,289
+3,983
+2,950,038
+963,972
+44,237 154,016
+202
+1,250,880 3,793,806
+3,025,846
+505,382
+102
+120,507
+4,366,518
+2,621,735
+46
+13,910
+323,698
+5,454,756 149,360 14,763,191
+1,375,927 2,727 4,704,024
+5
+4,160
+7,137,001
+6,847,681
+1,240
+3,107,525 24,462,929
+154,565
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+1,385,608
+terms.
+31 December 2014
+Non-derivative cash flows:
+Overdue/
+repayable
+Less than
+on demand
+one month
+One to
+three
+months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+940,428
+12,648
+140,322
+3,477,310
+Due from banks and other financial institutions (*)
+244,088
+538,385
+83,742
+110,344
+26,378
+2,375
+1,005,312
+Financial assets held for trading
+158
+3,801
+28,345
+1,817
+708
+34,829
+Financial assets designated at fair value
+through profit or loss
+795
+19,375
+41,164
+123,787
+Loans and advances to customers (**)
+31,934
+770,805
+Financial investments
+Others
+Debt securities issued
+Total
+153,249
+15,936,042
+2,099,811
+114,661
+114,661
+associates
+Investments in subsidiaries and
+3,958,201
+2,697
+1,114,350
+2,014,637
+505,118
+321,399
+Financial investments
+78,395
+Property and equipment
+2,396
+117,655
+Financial assets designated at fair value
+through profit or loss
+534
+1,065
+6,802
+9,404
+171,009
+13,689
+4,437
+206,940
+Loans and advances to customers (**)
+802
+66,217
+126,868
+Others
+Due to banks and other financial
+22,324
+22,324
+Derivative financial liabilities
+589,217
+53,223
+6,227
+58,708
+471,059
+fair value through profit or loss
+Financial liabilities designated at
+226
+126,868
+226
+Liabilities:
+19,553,715
+1,110,105
+1,241,532
+2,212,438
+4,667,765
+10,321,875
+Total assets
+333,935
+333,460
+58
+417
+Due to central banks
+787,695
+840,412
+3,248,159
+More than
+five years
+Undated
+Total
+Non-derivative cash flows:
+Financial liabilities:
+Financial liabilities designated at fair value
+through profit or loss
+55,866
+Due to banks and other financial institutions (*)
+1,500,891
+81,489
+425,997
+123,150
+One to
+five years
+22,046
+300,380
+127,520
+164,771
+25,199
+2,244,378
+Certificates of deposit
+Due to customers
+8,372,886
+24,723 40,857
+766,165 1,159,609 3,534,130
+70,933
+16,214
+522
+17,829
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+Financial investments
+Others
+181,205
+814,824
+84,740 202,449
+24,743
+255
+1,924,986 1,258,455 4,337,552
+772,957
+487
+4,125,373
+2,312,027
+5,669,778 228,326
+1,206,316
+14,965,960
+2,227
+4,580,716
+5
+5
+1,192
+207,892
+6,632,848
+6,893,090
+2,789,206 24,650,961
+(*)
+Includes reverse repurchase agreements.
+(**)
+The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+31 December 2015
+Overdue/
+repayable
+on demand
+3,441
+Certificates of deposit
+Financial liabilities:
+227
+(c) Market risk
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between the
+repricing dates of interest-generating assets and interest-bearing liabilities.
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+242
+ICBC
+10,184,215
+(c) Market risk (continued)
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios as immaterial.
+Sensitivity analysis, interest rate repricing gap analysis and currency risk concentration analysis are the major market risk
+management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Bank adopts VaR analysis as the major tool for calculating and monitoring the market risk of trading
+portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the parent company
+and a sensitivity analysis based on the Group's interest rate risk exposure and currency risk exposure (both trading and non-
+trading portfolios).
+(i) VaR
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+2,220,619
+2015
+Average
+Highest
+Lowest
+Interest rate risk
+55
+46
+72
+Currency risk
+Commodity risk
+Total portfolio VaR
+63
+64
+31 December 2015
+141
+195,584
+534,912
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Total
+712,885
+142,472
+249,381
+490,244
+557,562
+380,889
+136,900
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Total
+688,108
+157,827
+263,299
+2,289,444
+23
+21
+34
+90
+24
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there was a
+diversification effect due to the correlation amongst the risk factors, the individual VaR did not add up to the total portfolio
+VaR.
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+(1) VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(3)
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Annual Report 2015
+243
+Notes to Financial Statements
+17
+6
+Financial Statements for the year ended 31 December 2015
+(c) Market risk (continued)
+(ii) Interest rate risk
+The Group's interest rate risk mainly arises from the mismatches between the repricing dates of interest-generating assets
+and interest-bearing liabilities. The Group's interest-generating assets and interest-bearing liabilities are mainly denominated
+in RMB.
+The Group manages its interest rate risk by:
+•
+regularly monitoring the macroeconomic factors that may have impact on the PBOC benchmark interest rates;
+optimising the differences in timing between contractual repricing (maturities) of interest-generating assets and
+interest-bearing liabilities; and
+managing the deviation of the pricing of interest-generating assets and interest-bearing liabilities from the PBOC
+benchmark interest rates.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+revenue.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held
+constant, of the Group's and the Bank's net interest income and equity.
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming year,
+including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates on
+other comprehensive income, calculated by revaluing fixed rate available-for-sale financial assets held at year end, including
+the effect of any associated hedges.
+Group
+(In RMB millions, unless otherwise stated)
+20
+8
+60
+13
+17
+41
+4
+81
+90
+156
+60
+Interest rate risk
+Currency risk
+Commodity risk
+Total portfolio VaR
+2014
+31 December 2014
+Average
+Highest
+Lowest
+252
+32
+24
+55
+39
+65
+9
+12
+72
+46
+8 69 8
+Credit commitments
+Borrowing from central banks
+31 December 2014
+31 December 2015
+8,757,632
+2,253 7,679
+20,609 21,383
+1,429,120 1,762,783
+14,021
+31,024
+3,629,240 2,162,662
+66,212
+239,007
+329,172
+263
+4,673
+128
+143,263
+287,154
+128
+65,183
+18,028,719
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis:
+- Cash inflow
+- Cash outflow
+4
+5
+8
+(65)
+(218)
+(266)
+590,574
+(590,643)
+Derivative cash flows:
+573,384 784,818
+(573,508) (785,033)
+Others
+15,263,357
+227
+Financial liabilities designated at fair value
+through profit or loss
+53,223
+206,447
+265,981
+59,683
+6,868
+592,202
+Due to banks and other financial institutions (*)
+869,426
+332,974
+Debt securities issued
+224,893
+5,022
+1,560,660
+Certificates of deposit
+Due to customers
+7,769,800
+28,872 40,449
+837,965 1,202,171 3,347,164
+49,003
+20,978
+536
+139,838
+2,063,319
+42,938
+128,345
+58,039
+(58,146)
+3,550
+(3,536)
+More than
+five years
+Total
+719,327
+151,167
+249,287
+480,940
+554,572
+142,591
+2,297,884
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+five years
+Three
+months to
+One to
+five years
+More than
+five years
+Total
+Credit commitments
+692,629
+156,397
+257,582
+610,824
+429,940
+194,751
+2,342,123
+Bank
+one year
+one year
+three months
+one month
+2,010,365
+(2,010,866)
+(69)
+(124)
+(215)
+(107)
+14
+(501)
+(*)
+Includes repurchase agreements.
+Annual Report 2015
+241
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+(iii) Analysis of credit commitments by contractual expiry date
+Management expects that not all of the commitments will be drawn before the expiry of the commitments.
+Group
+31 December 2015
+Credit commitments
+31 December 2014
+Three
+Repayable
+on demand
+Less than
+One to
+months to
+One to
+Credit commitments
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+19,645,366
+to RMB)
+3,366
+55
+9,665
+6,363
+67,993
+2,470
+76,826
+8,454
+367,618
+4,681
+380,753
+Annual Report 2015
+257
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value (continued)
+31 December 2014
+Level 1
+Level 2
+Level 3
+Total
+Financial assets which are measured at
+fair value on a recurring basis:
+Financial assets held for trading
+Equity investments
+Debt securities
+6,244
+Commodity derivatives and others
+28,236
+2,181
+27,521
+27,521
+Financial liabilities related to
+precious metals
+55,871
+55,871
+Other debt securities issued
+1,947
+6,549
+8,496
+Others
+144
+4,153
+383
+2,211
+2,091
+299,625
+2,211
+303,927
+Derivative financial liabilities
+Exchange rate contracts
+116
+38,575
+234
+38,925
+Interest rate contracts
+3
+26,052
+6,508
+33,990
+34,373
+383
+2,287
+32
+2,405
+86
+22,020
+1,942
+24,048
+Available-for-sale financial assets
+Equity investments
+Debt securities
+Other debt instruments
+Financial liabilities which are measured at
+fair value on a recurring basis:
+86
+Financial liabilities designated at fair value
+through profit or loss
+Structured deposits
+Financial liabilities related to
+precious metals
+Other debt securities issued
+Others
+9,875
+710
+304
+80,841
+1,078,241
+13,852
+10,889
+1,172,934
+90,716
+Wealth management products
+Structured deposits
+Commodity derivatives and others
+770
+102
+33,888
+485
+33,888
+Financial assets designated at fair value
+through profit or loss
+Debt securities
+377
+101,183
+101,560
+Other debt instruments
+71,096
+71,096
+2,410
+Others
+139,004
+139,799
+377
+173,074
+139,004
+312,455
+Derivative financial assets
+Exchange rate contracts
+18,093
+1,140
+19,233
+Interest rate contracts
+1,640
+795
+205,531
+205,531
+Wealth management products
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the
+framework of fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter
+solutions. Operating procedures specify measurement operating procedures, valuation date, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for
+daily transactions management. Financial Accounting Department plays a lead role of developing accounting policies of fair
+value measurement, valuation methodologies and system implementation. Risk Management Department is responsible for
+verifying trade details and valuation models.
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial investments
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+Derivatives
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc..
+Structured products are mainly valued using dealer's quotations.
+Other liabilities designated at fair value through profit or loss
+For unquoted other liabilities designated at fair value through profit or loss, discounted cash flow model is used based on
+current yield curve appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and
+Heston model is applied based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which
+is calibrated by active market quotes of standard European options with the same underlying.
+256
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value
+techniques which use inputs which have a significant effect on the recorded fair value that are not based on
+observable market data.
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+31 December 2015
+Financial assets which are measured at
+fair value on a recurring basis:
+Level 1
+Level 2
+Level 3
+Total
+Financial assets held for trading
+Equity investments
+Debt securities
+373
+14,808
+--
+15,181
+Group
+117,657
+117,657
+techniques for which all inputs which have a significant effect on the recorded fair value are observable, either
+directly or indirectly; and
+Level 3:
+13,600
+15,800
+Net capital base
+2,012,103
+1,812,137
+Risk-weighted assets (i)
+13,216,687
+12,475,939
+Core tier 1 capital adequacy ratio
+12.87%
+11.92%
+Tier 1 capital adequacy ratio
+13.48%
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+12.19%
+15.22%
+14.53%
+(i)
+Refers to risk-weighted assets after capital floor and adjustments.
+Annual Report 2015
+255
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+56. FAIR VALUE OF FINANCIAL INSTRUMENTS
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+Level 1:
+Level 2:
+Capital adequacy ratio
+91,664
+373
+132,465
+Financial assets designated at fair value
+8,789
+69,037
+1,044
+78,870
+Available-for-sale financial assets
+Equity investments
+12,331
+134
+626
+13,091
+Debt securities
+130,441
+1,266,712
+15,274
+5,520
+Other debt instruments
+27,593
+27,593
+142,772
+167,566
+1,294,439
+1,509,367
+6,146
+1,443,357
+188,566
+1,865,499
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+1,402,673
+132,838
+101
+8,662
+through profit or loss
+Debt securities
+Other debt instruments
+824
+21,400
+22,224
+6,300
+6,300
+Others
+534
+181,376
+181,910
+824
+6,511
+28,234
+210,434
+Derivative financial assets
+Exchange rate contracts
+102
+36,277
+228
+36,607
+Interest rate contracts
+25
+26,249
+715
+26,989
+Commodity derivatives and others
+181,376
+financial institutions that are not subject to consolidation
+3,672
+1,082,623
+1,311,605
+14,156
+155,102
+209,444
+though profit or loss
+Financial assets designated at fair value
+132,838
+4,953
+139
+11,654
+116,092
+Financial assets held for trading
+1,680,126
+65,014
+14,612
+373,998
+1,226,502
+Due from banks and other financial institutions (*)
+3,059,633
+74,877
+19,253
+72,522
+2,892,981
+Cash and balances with central banks
+Assets:
+Total
+Others
+(equivalent
+to RMB)
+(equivalent
+to RMB)
+to RMB)
+RMB
+252
+166
+572
+210,434
+688
+83,631
+138,760
+Property and equipment
+24,185
+22,094
+1,508
+352
+231
+Investments in associates and joint ventures
+4,666,691
+60,377
+16,668
+(equivalent
+165,656
+Financial investments
+11,652,812
+137,421
+171,499
+714,769
+10,629,123
+Loans and advances to customers
+78,870
+8,015
+6,736
+37,476
+26,643
+Derivative financial assets
+4,423,990
+HKD
+USD
+31 December 2015
+402
+-1%
+HKD
+(184)
+(280)
+(42)
+75
+-1%
+USD
+2014
+Effect on equity
+2015
+2014
+2015
+572
+Effect on profit
+before taxation
+Currency
+Group
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant, on profit before taxation and
+equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity, while a positive
+amount reflects a potential net increase. This effect, however, is based on the assumption that the Group's foreign exchange
+exposures as at the year end are kept unchanged and, therefore, have not incorporated actions that would be taken by the
+Group to mitigate the adverse impact of this currency risk.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+(iii) Currency risk
+(c) Market risk (continued)
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+2,079
+613,576
+258
+ICBC
+Change in
+currency rate
+1,347
+(795)
+Bank
+Group
+A breakdown of the assets and liabilities analysed by currency is as follows:
+(c) Market risk (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+249
+Annual Report 2015
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+(12)
+(14)
+127
+152
+(585)
+(16)
+(3)
+49
+-1%
+-1%
+2014
+2015
+2014
+Effect on equity
+before taxation
+2015
+Change in
+currency rate
+Effect on profit
+HKD
+USD
+Currency
+(22)
+224,426
+Others
+274,586
+25
+611,472
+to RMB)
+RMB
+Others
+(equivalent
+HKD
+(equivalent
+(equivalent
+USD
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Assets:
+31 December 2014
+(c) Market risk (continued)
+ICBC
+24,191
+250
+Includes reverse repurchase agreements.
+(*)
+2,297,884
+76,223
+25,449
+355,858
+1,840,354
+Credit commitments
+1,800,519
+98,864
+(7,552)
+98,444
+1,610,763
+(**) Includes repurchase agreements.
+Net position
+2,079
+25
+1,187,495
+1,558,371
+| | ||
+312,336
+217,431
+312,336
+217,431
+53,227
+53,227
+6,227
+164
+589,385
+6,227
+164
+22,087
+589,385
+Exchange rate contracts
+19,102
+1,319
+20,421
+Interest rate contracts
+1,661
+726
+2,387
+Commodity derivatives and others
+25
+1,324
+34
+1,383
+Derivative financial liabilities
+3,672
+20,409,261
+247,850
+Due to banks and other financial institutions (**)
+76,826
+7,962
+7,610
+34,905
+26,349
+Derivative financial liabilities
+303,927
+59,509
+11,249
+233,169
+through profit or loss
+Financial liabilities designated at fair value
+1,829,716
+210
+50
+Due to central banks
+Liabilities:
+22,209,780
+474,852
+240,298
+1,556,278
+19,938,352
+Total assets
+479,765
+100,182
+9,029
+95,968
+160
+375,988
+624,804
+125,640
+1,457,834
+18,327,589
+653,334
+10,083
+5,548
+73,183
+564,520
+Total liabilities
+Others
+306,622
+17,743
+2,485
+89,408
+22,891
+196,986
+16,281,939
+128,333
+202,105
+515,515
+15,435,986
+Due to customers
+183,352
+26,558
+7,211
+108,770
+40,813
+Certificates of deposit
+2,603,051
+Debt securities issued
+Significant minority investments in tier 2 capital instruments issued by
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+13,600
+42,911
+52,254
+1,565,444
+Financial assets held for trading
+115,950
+115,950
+Financial assets designated at fair value
+though profit or loss
+205,509
+210
+563
+206,282
+Derivative financial assets
+223,412
+26,269
+1,888
+33,290
+Loans and advances to customers
+10,440,810
+514,733
+5,614
+65,319
+11,026,476
+Financial investments
+4,325,530
+87,616
+657
+37,195
+5,133
+4,450,998
+1,246,867
+2,991,619
+87,527
+53,552
+2,342,123
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2015
+251
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+Bank
+31 December 2015
+Due from banks and other financial institutions (*)
+USD
+(equivalent
+RMB
+to RMB)
+(equivalent
+to RMB)
+Others
+(equivalent
+to RMB)
+Total
+Assets:
+Cash and balances with central banks
+2,884,990
+61,956
+1,698
+42,975
+HKD
+427,876
+Investments in subsidiaries and associates
+10,012
+Due to banks and other financial institutions (**)
+1,732,680
+348,135
+47,131
+106,173
+2,234,119
+Certificates of deposit
+36,340
+86,173
+1,974
+25,626
+150,113
+Due to customers
+33,144
+15,361,944
+12,466
+46,650
+15,781,673
+Debt securities issued
+180,693
+50,227
+1,898
+7,357
+240,175
+Others
+Total liabilities
+506,821
+34,326
+360,613
+17,352
+297,414
+5,255
+44,820
+63,124
+135,308
+Property and equipment
+129,195
+255
+9
+210
+129,669
+Others
+252,894
+35,499
+5,174
+55,866
+2,687
+98,343
+Total assets
+to RMB)
+938,826
+100,883
+361,871
+21,046,946
+Liabilities:
+Financial liabilities designated at fair value
+through profit or loss
+15,800
+8,496
+Derivative financial liabilities
+25,202
+391,910
+2,677
+1,773,168
+1,537,304
+780,538
+148,227
+96,913
+10,768,750
+Financial investments
+3,936,518
+98,502
+13,181
+38,208
+4,086,409
+Investments in associates and joint ventures
+170
+870
+9,743,072
+1,424
+28,919
+Property and equipment
+152,346
+44,757
+612
+1,565
+199,280
+Others
+236,247
+36,628
+2,483
+105,501
+380,859
+26,455
+Total assets
+Loans and advances to customers
+1,644
+Cash and balances with central banks
+3,437,427
+37,638
+22,551
+26,006
+3,523,622
+Due from banks and other financial institutions (*)
+773,517
+407,649
+22,996
+47,076
+1,251,238
+Financial assets held for trading
+24,048
+33,048
+200
+679
+34,373
+Financial assets designated at fair value
+though profit or loss
+312,078
+232
+145
+312,455
+Derivative financial assets
+6,730
+12,517
+3,157
+446
+Credit commitments
+18,631,153
+214,831
+14,798,876
+403,863
+231,560
+122,302
+15,556,601
+Debt securities issued
+221,052
+39,353
+3,891
+15,294
+279,590
+Others
+Total liabilities
+Due to customers
+474,466
+5,993
+12,465
+525,807
+17,356,492
+1,120,050
+265,119
+330,988
+19,072,649
+Net position
+1,274,661
+299,727
+(50,288)
+13,204
+32,883
+1,419,777
+176,248
+9,793
+344,192
+20,609,953
+Liabilities:
+Due to central banks
+219
+412
+631
+Financial liabilities designated at fair value
+through profit or loss
+529,931
+6,227
+53,227
+589,385
+18,925
+Derivative financial liabilities
+14,609
+3,477
+2,157
+24,191
+Due to banks and other financial institutions (**)
+1,270,960
+532,625
+10,405
+106,206
+1,920,196
+Certificates of deposit
+57,040
+90,490
+3,948
+4,738
+233,052
+18,076,732
+Annual Report 2015
+253
+Notes to Financial Statements
+548,562
+(d) Capital management
+The Group's objectives on capital management are:
+•
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution
+policy, issue or repurchase own shares, qualifying other tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBRC. The
+required information is respectively filed with the CBRC by the Group and the Bank semi-annually and quarterly.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations promulgated by the CBRC. In April 2014,
+CBRC officially approved the Bank to adopt advanced capital management approaches. Within the scope of the approval,
+the foundation internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit
+risk, the internal model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory
+requirements.
+The CBRC requires commercial banks to meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For systemically important banks, CBRC requires
+minimum core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, CBRC requires corresponding minimum ratios of 7.50%, 8.50%
+and 10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and
+the requirements of capital adequacy ratios differ by countries.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements promulgated
+by the CBRC. The requirements pursuant to these regulations may have certain differences comparing to those applicable in
+Hong Kong and other jurisdictions.
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+254
+ICBC
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(d) Capital management (continued)
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+31 December 2015
+31 December 2014
+Core tier 1 capital
+Paid-in capital
+Valid portion of capital reserve
+Surplus reserve
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,220,619
+218,713
+14,523
+2,913
+7,541
+243,690
+Others
+Total liabilities
+438,194
+21,040
+3,006
+6,949
+469,189
+17,106,821
+1,713,160
+661,365
+221,180
+18,040,854
+Net position
+1,231,462
+220,867
+17,429
+43,103
+1,512,861
+Credit commitments
+1,764,368
+347,315
+55,594
+53,342
+51,488
+1,498,403
+356,407
+353,495
+Net core tier 1 capital
+1,701,495
+1,486,733
+Additional tier 1 capital
+79,567
+34,500
+Additional tier 1 capital instruments and related premium
+79,375
+34,428
+Valid portion of minority interests
+192
+72
+Net tier 1 capital
+5,700
+1,781,062
+Tier 2 capital
+244,641
+306,704
+Valid portion of tier 2 capital instruments and related premium
+180,242
+187,829
+Surplus provision for loan impairment
+63,398
+118,633
+Valid portion of minority interests
+1,001
+242
+Tier 2 capital deductions
+1,521,233
+Debt securities issued
+5,700
+(3,796)
+151,963
+144,874
+178,040
+150,752
+General reserve
+246,356
+221,622
+Retained profits
+781,853
+650,308
+Valid portion of minority interests
+Others
+Core tier 1 capital deductions
+Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+4,340
+(5,799)
+(24,839)
+11,665
+11,670
+Goodwill
+8,478
+8,487
+Other intangible assets other than land use rights
+1,356
+1,279
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+(3,869)
+2,191
+15,024,101
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+24,386
+3,429,507
+29,572
+2,391
+11,857
+3,473,327
+Due from banks and other financial institutions (*)
+747,415
+184,773
+20,728
+44,037
+996,953
+Financial assets held for trading
+32,801
+Cash and balances with central banks
+64
+Financial assets designated at fair value
+though profit or loss
+310,190
+63
+145
+310,398
+Derivative financial assets
+6,819
+13,946
+1,527
+22,292
+Loans and advances to customers
+9,575,989
+32,865
+568,158
+Total
+(equivalent
+to RMB)
+893,225
+66,146
+249,097
+19,285,200
+Net position
+1,568,634
+45,601
+34,737
+112,774
+1,761,746
+Credit commitments
+1,824,981
+377,739
+Others
+(equivalent
+to RMB)
+10,982
+2,289,444
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+252
+ICBC
+(c) Market risk (continued)
+31 December 2014
+Assets:
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+34,382
+USD
+(equivalent
+to RMB)
+HKD
+75,742
+9,773
+RMB
+10,184,215
+226
+226
+Financial liabilities designated at fair value
+through profit or loss
+529,768
+6,227
+53,222
+589,217
+Derivative financial liabilities
+4,121
+16,183
+2,020
+22,324
+Due to banks and other financial institutions (**)
+1,173,756
+269,703
+13,365
+98,174
+1,554,998
+Certificates of deposit
+46,156
+64,469
+7,818
+18,666
+137,109
+Due to customers
+14,696,113
+269,220
+30,295
+Due to central banks
+Liabilities:
+Total
+264,283
+19,553,715
+Financial investments
+3,876,423
+58,041
+1,350
+22,387
+3,958,201
+Investments in subsidiaries and associates
+3,836
+34,331
+59,574
+114,661
+Property and equipment
+126,552
+16,920
+7
+68,917
+214
+18,338,283
+Total assets
+333,935
+94,366
+882,232
+23,565
+215,667
+Others
+126,868
+95
+337
+1,433
+3,711
+33,290
+775
+32,515
+1,433
+27,903
+3,674
+1,676
+530
+1,146
+27,695
+208
+71,517
+37
+1,224,821
+Financial liabilities designated at fair value
+1,296,903
+27,521
+Structured deposits
+205,531
+Wealth management products
+206,282
+fair value on a recurring basis:
+Financial liabilities which are measured at
+565
+through profit or loss
+178,779
+1,401,356
+73,723
+1,298,336
+565
+1,224,821
+72,950
+1,653,858
+177,439
+Equity investments
+773
+through profit or loss
+Financial assets designated at fair value
+Debt securities
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 1
+31 December 2015
+Bank
+(a) Financial instruments recorded at fair value (continued)
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+Financial liabilities related to
+Debt securities
+Other debt instruments
+Others
+Derivative financial assets
+177,973
+177,439
+534
+6,300
+6,300
+22,009
+21,236
+28,070
+773
+115,950
+115,950
+Debt securities
+Available-for-sale financial assets
+Commodity derivatives and others
+Interest rate contracts
+Exchange rate contracts
+115,950
+115,950
+Level 2
+268
+530
+Commodity derivatives and others
+(236)
+(552)
+Interest rate contracts
+(1,096)
+(650)
+Exchange rate contracts
+Derivative financial liabilities
+Financial liabilities:
+155,102
+(51)
+(2,665)
+(52)
+(52,456)
+136
+7,966
+144,819
+304
+304
+13,852
+(2,295)
+(244)
+13,256
+139,004
+(52,212)
+43,793
+57,353
+1,942
+18
+(1,314)
+Transfers to
+Level 2 from
+in other
+comprehensive
+income
+gains/(losses)
+recorded in
+profit or loss
+2015
+1 January
+As at
+Total gains
+recorded
+Total
+Derivative financial assets
+Financial assets:
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Bank
+(In RMB millions, unless otherwise stated)
+(1,254)
+Financial Statements for the year ended 31 December 2015
+261
+Annual Report 2015
+(2,079)
+8
+481
+(34)
+(726)
+3
+59
+(1,319)
+5
+422
+Notes to Financial Statements
+(51)
+(370)
+32
+Settlements
+Disposals
+Additions
+As at
+Transfers to
+Level 2 from
+in other
+comprehensive
+income
+profit or loss
+2014
+Total gains
+recorded
+Total
+gains/(losses)
+recorded in
+1 January
+As at
+Level 3
+Financial assets:
+Derivative financial assets
+107
+1,355
+(3,721)
+(343)
+(2,079)
+(55)
+-
+329
+(378)
+28
+(34)
+Commodity derivatives and others
+(4,681)
+31 December
+2014
+Exchange rate contracts
+508
+(1)
+770
+'G
+(51)
+(52)
+1,140
+(317)
+Equity investments
+56
+136
+(142)
+3,141
+Debt securities
+Available-for-sale financial assets
+6,857
+140,566
+through profit or loss
+Financial assets designated at fair value
+1,251
+1,112
+(19)
+52
+Commodity derivatives and others
+321
+552
+Interest rate contracts
+949
+As at
+31 December
+Additions
+Disposals
+Exchange rate contracts
+2014
+Level 3
+Settlements
+Disposals
+Additions
+31 December
+As at
+Transfers to
+Level 2 from
+comprehensive
+income
+Total gains
+recorded
+in other
+Total
+gains/(losses)
+recorded in
+profit or loss
+497
+2014
+As at
+Financial assets:
+Derivative financial assets
+(754)
+104
+977
+(530)
+4
+11
+(208)
+100
+961
+183
+1 January
+959
+Interest rate contracts
+552
+112
+(90)
+2,472
+137,116
+(52,212)
+41,905
+1,951
+(51)
+(359)
+32
+770
+(51)
+(52)
+1,149
+(307)
+Debt securities
+Available-for-sale financial Assets
+6,857
+140,566
+through profit or loss
+Financial assets designated at fair value
+1,261
+1,100
+(19)
+51
+Commodity derivatives and others
+321
+(2,018)
+(2,181)
+15
+(34)
+through profit or loss
+Financial assets designated at fair value
+775
+(140)
+(873)
+(163)
+1,951
+37
+(3)
+8
+32
+Commodity derivatives and others
+137,116
+(57)
+(177)
+770
+Interest rate contracts
+208
+(83)
+(864)
+6
+1,149
+Exchange rate contracts
+2015
+Level 3
+Settlements
+(6)
+8,075
+81,340
+(49,092)
+Commodity derivatives and others
+176
+(721)
+Interest rate contracts
+(6)
+(1,263)
+Exchange rate contracts
+Derivative financial liabilities
+Financial liabilities:
+178,779
+(140)
+(5,861)
+(49,310)
+81,540
+16
+7,850
+144,684
+565
+(4,988)
+(218)
+200
+16
+(62)
+5,617
+Debt securities
+Available-for-sale financial assets
+177,439
+13
+2
+2
+14
+32
+2,346
+1,791
+770
+1,021
+18,123
+1,149
+16,974
+| | ||
+Debt securities
+Equity investments
+Available-for-sale financial assets
+2,378
+Commodity derivatives and others
+Exchange rate contracts
+Derivative financial assets
+310,398
+137,116
+173,074
+208
+137,911
+137,116
+795
+Others
+71,096
+71,096
+Interest rate contracts
+20,341
+1,951
+22,292
+260
+Commodity derivatives and others
+Interest rate contracts
+Exchange rate contracts
+Derivative financial liabilities
+Debt securities issued
+precious metals
+Financial liabilities related to
+Structured deposits
+Wealth management products
+Financial liabilities designated at fair value
+through profit or loss
+fair value on a recurring basis:
+Financial liabilities which are measured at
+1,454,939
+144,684
+1,266,521
+43,734
+1,089,384
+5,617
+1,040,305
+43,462
+1,087,419
+5,617
+1,040,305
+41,497
+1,965
+1,965
+Other debt instruments
+ICBC
+101,391
+208
+1,002
+16
+986
+1,860
+530
+1,330
+30,282
+208
+30,074
+| | |
+297,414
+8,496
+32,390
+55,866
+205,531
+Commodity derivatives and others
+Interest rate contracts
+Exchange rate contracts
+Derivative financial liabilities
+295,467
+1,947
+6,549
+1,947
+Debt securities issued
+55,866
+precious metals
+27,521
+754
+33,144
+1,947
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+32,801
+64
+32,801
+64
+32,865
+32,865
+Debt securities
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+31 December 2014
+(a) Financial instruments recorded at fair value (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+259
+Annual Report 2015
+330,558
+754
+327,857
+101,183
+5,418
+| | | |
+312,336
+(12,668)
+(218)
+4,172
+48
+334
+13,852
+Debt securities
+Available-for-sale financial assets
+181,376
+(49,092)
+83,053
+8,411
+5,520
+139,004
+Financial assets designated at fair value
+1,044
+(110)
+(864)
+304
+(228)
+1,942
+101
+'
+(3)
+34
+38
+through profit or loss
+Equity investments
+304
+322
+(725)
+(746)
+(726)
+Interest rate contracts
+(234)
+105
+1,012
+(205)
+173
+(1,319)
+Exchange rate contracts
+Derivative financial liabilities
+(2,211)
+(2,413)
+202
+through profit or loss
+Financial liabilities designated at fair value
+Financial liabilities:
+188,566
+(110)
+(13,532)
+(49,310)
+87,529
+370
+8,517
+155,102
+626
+32
+312,336
+Commodity derivatives and others
+(57)
+(b) Movement in level 3 financial instruments measured at fair value
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+611,541
+2,018
+609,523
+22,324
+2,018
+20,306
+1,357
+34
+1,323
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and liabilities which
+are recorded at fair value and the movement during the year:
+2,058
+1,337
+18,909
+1,263
+17,646
+589,217
+589,217
+6,227
+6,227
+53,223
+53,223
+217,431
+217,431
+721
+Group
+Financial assets:
+Derivative financial assets
+(6)
+121
+(113)
+770
+Interest rate contracts
+228
+(53)
+(855)
+149
+(153)
+1,140
+Exchange rate contracts
+2015
+31 December
+As at
+Transfers to
+Level 2 from
+Level 3
+Settlements
+Disposals
+Additions
+comprehensive
+income
+profit or loss
+2015
+in other
+Total gains
+recorded
+Total
+(losses)/gains
+recorded in
+1 January
+As at
+715
+(2,295)
+(16)
+144,138
+35
+226
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+Income tax payable
+Due to customers
+Certificates of deposit
+Repurchase agreements
+Due to banks and other financial institutions
+Derivative financial liabilities
+32 mm m
+Financial liabilities designated at fair value through profit or loss
+LIABILITIES
+19,553,715
+21,046,946
+TOTAL ASSETS
+310,036
+371,556
+32
+Other assets
+23,899
+20,354
+31
+126,868
+Due to central banks
+33
+24
+34
+Other equity instrument
+353,495
+356,407
+40
+40
+Share capital
+18,040,854
+19,285,200
+409,618
+486,426
+39
+243,690
+240,175
+38
+59,571
+62,136
+15,024,101
+15,781,673
+37
+137,109
+161,718
+130,830
+150,113
+36
+1,393,280
+22,324
+589,217
+297,414
+33,144
+2,103,289
+129,669
+79,375
+30
+34,242
+Financial assets held for trading
+737,740
+772,568
+21
+Due from banks and other financial institutions
+3,473,327
+2,991,619
+20
+Cash and balances with central banks
+ASSETS
+2014
+31 December
+22
+31 December
+2015
+58. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+265
+Annual Report 2015
+On 2 April 2013, the Bank, SinoPac Financial Holdings Co., Ltd. ("SinoPac Holdings") and Bank SinoPac Co., Ltd. ("Bank
+SinoPac") entered into a share subscription agreement by the Bank of 20% shares of SinoPac Holdings or Bank SinoPac.
+On 27 February 2014 and 1 April 2015, the Bank, SinoPac Holdings and Bank SinoPac entered into two supplemental
+agreements to extend the transaction waiting period to 1 October 2015. As at the end of the transaction waiting period,
+as the Cross-Strait Service Trade Agreement was still not passed by Taiwan, the limit of percentage of outstanding voting
+shares or capital held by a commercial bank from Mainland China in a Taiwan financial institution was not relaxed to 20%.
+The Bank, SinoPac Holdings and Bank SinoPac, upon consultation, unanimously agreed not to further extend the transaction
+waiting period. Termination of the acquisition of SinoPac Holdings or Bank SinoPac will not have a significant impact on the
+future operation of the Bank.
+Termination of the acquisition of 20% shares in Bank SinoPac
+57. OTHER IMPORTANT MATTERS
+Due to customers
+Other financial liabilities
+Due to banks and other financial institutions
+Repurchase agreements
+Liabilities
+Notes
+115,950
+32,865
+Financial assets designated at fair value through profit or loss
+29
+80,419
+101,066
+28
+3,958,201
+4,450,998
+27
+5,617
+Property and equipment
+Investments in associates
+Investments in subsidiaries
+Financial investments
+10,184,215
+11,026,476
+26
+Loans and advances to customers
+259,213
+792,876
+25
+Reverse repurchase agreements
+22,292
+33,290
+24
+Derivative financial assets
+310,398
+206,282
+23
+34,242
+34,428
+Including: Preference shares
+41
+83,812
+23,441
+2,196
+58,175
+Net structural position
+69,622
+(3,464)
+(200)
+24,373
+21,629
+23,620
+Net long position
+58
+31 December 2014
+(3,322)
+(1,878,649)
+(579,439)
+(21,979)
+(1,277,231)
+Forward sales
+(2,055,864)
+1,845,791
+528,589
+53,298
+1,263,904
+Forward purchases
+2,161,808
+Total
+Net option position
+USD
+HKD
+Spot assets
+56,938
+28,020
+1,570
+27,348
+Net structural position
+69,103
+(1,431)
+40,703
+29,831
+Net long/(short) position
+1,364
+1,364
+Net option position
+(1,496,619)
+1,358,653
+Total
+1,903,117
+(1,697,412)
+Others
+316,172
+(330,988)
+375,242
+(361,857)
+(34,123)
+(1,100,639)
+Forward sales
+126,684
+856,727
+(264,653)
+212,795
+1,374,150
+(1,101,771)
+Forward purchases
+Spot liabilities
+Others
+451,411
+(375,988)
+(247,850)
+HKD
+238,102
+1,472,295
+(1,432,026)
+The financial statements were approved and authorised for issue by the board of directors on 30 March 2016.
+61. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+60. COMPARATIVE AMOUNTS
+A final dividend of RMB0.2333 per share after the appropriation of statutory surplus reserve and general reserve, was
+approved at the board of directors' meeting held on 30 March 2016, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2015, the final dividend amounted to approximately RMB83,150 million. The dividend payable was not recognised as a
+liability as at 31 December 2015.
+59. AFTER THE REPORTING PERIOD EVENT
+The profit distribution plan
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+266
+19,553,715
+21,046,946
+TOTAL EQUITY AND LIABILITIES
+1,512,861
+610,647
+729,783
+1,761,746
+TOTAL EQUITY
+42
+Retained profits
+513,903
+596,181
+42
+Reserves
+388
+38
+Equity component of convertible bonds
+34,428
+79,375
+Annual Report 2015
+Other financial assets
+267
+For the year ended 31 December 2015
+Spot liabilities
+Spot assets
+USD
+31 December 2015
+(c) Foreign currency concentrations
+The Group prepares the liquidity ratios on a semi-annual basis and the disclosed average liquidity ratio is the arithmetic mean
+of two consecutive liquidity ratios as at 30 June and 31 December.
+The above liquidity ratios are calculated in accordance with the formula promulgated by the CBRC and based on the
+financial information prepared in accordance with PRC GAAP.
+86.14%
+33.37%
+2014
+Average for
+the year
+ended
+31 December
+91.10%
+103.42%
+98.12%
+2014
+33.19%
+31 December
+As at
+Average for
+the year
+ended
+31 December
+2015
+35.58%
+2015
+35.50%
+31 December
+As at
+Foreign currency current assets to foreign
+currency current liabilities
+RMB current assets to RMB current liabilities
+(b) Liquidity ratios
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and
+IFRSS for the year ended 31 December 2015 (2014: no differences). There are no differences between the equity attributable
+to equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2015 (31 December 2014: no
+differences).
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Loans and advances to customers
+Deferred income tax assets
+Due from banks and other financial institutions
+Level 3
+Level 2
+Level 1
+Fair value
+Carrying
+amount
+2015
+Group
+The following table summarises the carrying amounts, the fair value and the analysis by level of the fair value hierarchy of
+held-to-maturity investments, receivables, subordinated bonds and convertible bonds:
+(e) Fair value of financial assets and liabilities not carried at fair value
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2015
+Notes to Financial Statements
+Financial assets
+263
+As at 31 December 2015, the carrying amount of financial instrument valued with significant unobservable inputs
+were immaterial, and the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were also immaterial.
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+(d) Valuation of financial instruments with significant unobservable inputs
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+Reverse repurchase agreements
+(ii) Transfers between level 2 and level 3
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy on
+the balance sheet date.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy on the balance sheet date.
+(i) Transfers between level 1 and level 2
+(c) Transfers between levels
+6,764
+Annual Report 2015
+1,044
+Held-to-maturity investments
+2,944,661
+amount
+Carrying
+2014
+215,581
+215,581
+195,553
+Subtotal
+215,581
+215,581
+195,553
+Subordinated bonds
+Financial liabilities
+2,870,353
+477,125
+56,841
+3,297,884
+3,222,496
+Subtotal
+244,218
+109,005
+353,223
+352,143
+Receivables
+232,907
+2,654,913
+56,841
+2,763,918
+Total
+Bank
+Unrealised
+Realised
+5,720
+344
+།ཐཱ
+57
+287
+ICBC
+262
+(1,264)
+(1,106)
+18
+(52)
+Commodity derivatives and others
+(233)
+53
+(548)
+(1,049)
+(506)
+Exchange rate contracts
+Derivative financial liabilities
+Financial liabilities:
+144,684
+(51)
+(2,654)
+(52,212)
+47,323
+112
+8,028
+Interest rate contracts
+(1,263)
+(721)
+-
+6,652
+984
+Total
+Group
+Unrealised
+Realised
+5,668
+Total gains for the year
+2014
+8,033
+1,550
+6,483
+8,174
+1,420
+6,754
+Total gains for the year
+Total
+Bank
+Unrealised
+Realised
+Total
+Group
+Unrealised
+Realised
+2015
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Gains or losses on level 3 financial instruments included in the statement of profit or loss for the year comprise:
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Notes to Financial Statements
+(2,018)
+8
+(34)
+Fair value
+Level 1
+On the balance sheet date, certain financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+Level 3
+240,600
+2,304,662
+74,635
+318,959
+319,108
+Receivables
+5,464
+2,550,726
+2,548,977
+Held-to-maturity investments
+Financial assets
+Level 3
+Level 2
+244,324
+Level 1
+amount
+Carrying
+2014
+Notes to Financial Statements
+Financial Statements for the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+ICBC
+264
+192,431
+192,431
+192,431
+181,092
+Subtotal
+192,431
+Fair value
+Subtotal
+2,868,085
+2,869,685
+Balances with central banks
+Assets
+Those financial instruments for which their carrying amounts are the reasonable approximations of their fair values because,
+for example, they are short term in nature or repriced at current market rates frequently, are as follows:
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of
+the Group and the Bank's assets and liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+(iii) Available-for-sale equity investments measured at cost were all non-listed shares. The fair values are estimated on th
+basis of pricing models or discounted cash flows. The fair value was approximately the same with its book value and
+classified in fair value hierarchy level 3.
+The fair values of held-to-maturity investments, subordinated bonds and convertible bonds are determined with
+reference to the available market values. If quoted market prices are not available, then fair values are estimated on
+the basis of pricing models or discounted cash flows.
+The receivables are not quoted in an active market. The fair values of those receivables relating to the restructuring
+of the Bank are estimated on the basis of the stated interest rates and the consideration of the relevant special
+clauses of the instruments evaluated in the absence of any other relevant observable market data, and the fair values
+approximate to their carrying amounts. The fair values of receivables other than those relating to the restructuring of
+the Bank are estimated on the basis of pricing models or discounted cash flows.
+(ii)
+Level 2
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described below
+are adopted to determine the fair values of these assets and liabilities:
+187,711
+14,264
+201,975
+196,509
+Subtotal
+14,264
+14,264
+9,485
+Convertible bonds
+187,711
+187,711
+187,024
+Subordinated bonds
+Financial liabilities
+484,924
+2,379,297
+5,464
+181,092
+Subordinated bonds
+(i)
+448,613
+14,264
+9,485
+Convertible bonds
+197,702
+197,702
+196,662
+Subordinated bonds
+Financial liabilities
+488,989
+2,384,597
+26,454
+2,900,040
+14,264
+2,898,121
+256,947
+74,635
+331,582
+331,731
+Receivables
+232,042
+26,454
+2,568,458
+2,566,390
+Held-to-maturity investments
+Financial assets
+Financial liabilities
+Subtotal
+Subtotal
+2,309,962
+211,966
+206,147
+19,943
+3,227,754
+218,613
+2,759,198
+339,918
+338,839
+3,151,930
+Subtotal
+Receivables
+230,000
+2,637,893
+19,943
+2,887,836
+121,305
+2015
+2,813,091
+197,702
+Bank
+Carrying
+amount
+Fair value
+14,264
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+Level 1
+Loans and
+assessed
+be impaired
+Collectively
+Individually
+Allowance for impairment losses
+assessed to
+individually
+assessed
+advances
+loans and
+advances
+11,537
+54,124
+Manufacturing
+1,603,631
+644,478
+94,341
+21,447
+25,390
+46,837
+Transportation, storage and postal services
+1,551,248
+437,972
+Total
+Overdue
+269
+to customers
+91,568
+33,234
+North and South America
+4,262
+48,573
+7,846
+181,221
+323,869
+98,380
+891,850
+65,180
+1,379,279
+Annual Report 2015
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+(e) Loans and advances to customers
+(i)
+Analysis by industry sector
+31 December 2015
+*
+Gross loans
+and advances
+to customers
+Loans and
+advances
+covered by
+collateral
+1,817
+562,917
+27,166
+17,653
+6,434
+2,722
+9,119
+11,841
+Water, environment and public utility management
+472,791
+249,396
+1,685
+286
+139
+7,742
+7,881
+Mining
+280,556
+43,415
+9,313
+4,008
+1,235
+4,532
+5,767
+Construction
+297,275
+398,193
+25,349
+Real estate
+11,782
+Wholesale and retail
+866,779
+433,413
+83,422
+48,829
+16,747
+13,403
+30,150
+Production and supply of electricity, heating
+gas and water
+835,616
+161,857
+2,726
+2,341
+1,462
+13,654
+15,116
+Leasing and commercial services
+724,246
+425,061
+9,762
+5,229
+1,995
+13,777
+42,310
+Due to banks and other financial institutions
+18,565
+General reserve
+150,752
+150,752
+178,040
+178,040
+Surplus reserve
+(24,839)
+(24,548)
+(5,799)
+(4,655)
+Other comprehensive income
+144,874
+144,874
+151,963
+151,963
+Capital reserve
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+property and equipment, net of depreciation charges;
+•
+capital and statutory reserves of overseas branches; and
+.
+246,356
+investments in overseas subsidiaries, associates and joint ventures.
+246,356
+221,622
+226,619
+ICBC
+278
+Prepared in accordance with PRC GAAP.
+(i)
+1,533,438
+2,798
+6,445
+1,537,304
+1,530,640
+1,530,859
+1,788,195
+6,647
+1,794,842
+1,800,519
+Total equity
+11,045
+Minority interests
+1,789,474
+parent company
+Equity attributable to equity holders of the
+650,308
+650,236
+781,853
+781,988
+Retained profits
+221,622
+(d) International claims
+International claims refer to the sum of cross-border claims in all currencies and local claims in foreign currencies, including
+loans and advances to customers, balances with central banks, amounts due from banks and other financial institutions and
+debt investments.
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head
+Office is located in another country.
+344,654
+185,864
+971,996
+73,426
+1,575,940
+31 December 2014
+Banks and
+other
+financial
+Non-bank
+Official
+private
+institutions
+sector
+sector
+Others
+Total
+Asia Pacific
+232,301
+65,146
+843,277
+57,334
+1,198,058
+of which attributed to Hong Kong
+22,078
+229,929
+7,706
+79,366
+64,007
+31 December 2015
+Banks and
+other
+financial
+Official
+Non-bank
+private
+institutions
+sector
+sector
+Others
+Total
+Asia Pacific
+214,322
+265,804
+892,630
+65,720
+1,346,011
+―of which attributed to Hong Kong
+20,074
+18,258
+257,330
+55,769
+351,431
+North and South America
+78,850
+121,857
+1,788,267
+96,557
+3,304
+Deductible amount of significant minority investment
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+by financial institutions that are not subject to
+consolidation
+investment in core tier 1 capital instruments issued
+Directly or indirectly holding in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+banks or between banks and other financial institutions
+Deductible amount of non-significant minority
+Defined-benefit pension fund net assets (net of related
+deferred tax liabilities)
+19
+Deductible amount in deferred tax assets arising from
+temporary differences
+19:
+17
+16
+15
+| | |
+Unrealized gains and losses due to changes in own credit
+risk on fair valued liabilities
+14
+18
+22
+20
+21
+31 December
+31 December
+investments in core tier 1 capital
+Including: Deductible amount of significant minority
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+23
+Item
+N/A
+N/A
+ICBC
+274
+1 capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier
+22
+Gain on sale related to asset securitization
+2015
+13
+12
+2,191
+4,340
+Core tier 1 capital before regulatory adjustments
+Prudential valuation adjustments
+Core tier 1 capital: Regulatory adjustments
+Valid portion of minority interests
+X25
+56
+period (only applicable to non-joint stock companies.
+Valid portion to core tier 1 capital during the transition
+4
+X24
+(24,839)
+(5,799)
+Fill in 0 for joint stock banks)
+1,713,160
+1,498,403
+7
+X20
+(3,796)
+(3,869)
+Deferred tax assets that rely on future profitability
+excluding those arising from temporary differences
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+11
+10
+X16
+X14-X15
+1,279
+1,356
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+9
+8,487
+8,478
+Goodwill (net of deferred tax liabilities)
+8
+Shortfall of provision for loan impairment
+Others
+2014
+24
+adjustments
+34,500
+79,567
+Additional tier 1 capital before regulatory
+36
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+Additional tier 1 capital: Regulatory adjustments
+35
+72
+192
+Valid portion of minority interests
+34
+transition period
+Invalid instruments to additional tier 1 capital after the
+X26
+37
+38
+Directly or indirectly holding additional tier 1 capital of
+the Bank
+Annual Report 2015
+--
+Others that should be deducted from additional tier 1
+capital
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Investment in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+capital instruments issued by financial institutions that
+are not subject to consolidation
+41c
+41b
+41a
+Significant minority investments in additional tier 1
+40
+40
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+39 Deductible amount of non-significant minority
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+33
+Index
+Including: Portion classified as liabilities
+X28
+26c
+subject to consolidation
+financial institutions that are under control but not
+Shortfall in core tier 1 capital instruments issued by
+26b
+X11
+27
+5,700
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+26a
+N/A
+N/A
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+25
+5,700
+Others that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+additional tier 1 capital and tier 2 capital
+28
+34,428
+79,375
+Including: Portion classified as equity
+31
+34,428
+79,375
+Additional tier 1 capital instruments and related premium
+30
+Additional tier 1 capital:
+11,670
+1,486,733
+1,701,495
+Core tier 1 capital
+29
+11,665
+Total regulatory adjustments to core tier 1 capital
+32
+3b
+X19
+144,874
+31 December 2015
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+(v) Renegotiated loans and advances to customers
+ICBC
+272
+31 December 2014
+216,336
+92,348
+39,976
+88,480
+210,578
+Total
+5,201
+41,245
+% of total
+loans and
+advances
+% of total
+loans and
+2,987
+for less than three months
+Renegotiated loans and advances overdue
+(0.02%)
+(1,926)
+(0.01%)
+(1,570)
+overdue for more than three months
+Less: Renegotiated loans and advances
+0.04%
+4,579
+0.04%
+4,557
+Renegotiated loans and advances
+advances
+2,231
+0.03%
+3,607
+3,009
+7,116
+13,702
+28,334
+Central China
+41,301
+6,761
+14,094
+16,908
+16,269
+37,171
+Western China
+30,710
+9,572
+19,747
+6,628
+7,143
+31,331
+Bohai Rim
+10,923
+Overseas and others
+13,060
+3,598
+5,465
+3,533
+5,251
+9,511
+Northeastern China
+38,037
+6,993
+17,391
+6,893
+17,046
+28,260
+1,423
+2,653
+0.02%
+(f) Overdue placements with banks and other financial institutions
+1,022,682
+1,206,249
+2a Surplus reserve
+Retained earnings
+222m
+3
+178,040
+2c
+353,495
+356,407
+Paid-in capital
+2
+1
+Index
+X18
+150,752
+X21
+2b
+151,963
+Capital reserve
+За
+public reserves)
+120,035
+146,164
+Accumulated other comprehensive income (and other
+X23
+650,308
+781,853
+Retained profits
+X22
+221,622
+246,356
+General reserve
+2014
+31 December
+31 December
+2015
+Core tier 1 capital:
+2015
+0.01%
+0.01%
+16
+16
+2014
+2015
+Individually assessed allowance for impairment losses
+Off-balance sheet exposure
+On-balance sheet exposure
+(g) Exposures to Mainland China non-bank entities
+Over 12 months
+financial institutions:
+As a percentage of total gross placements with banks and other
+The Group's gross placements with banks and other financial institutions which
+have been overdue with respect to either principal or interest for a period of:
+Over 12 months
+2014
+275
+14,033,030
+13,133,159
+2,319,179
+Item
+Capital composition
+(i)
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on CBRC Notice on issuing regulatory documents on capital regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(h) Correspondence between balance sheet in published financial statements and capital
+composition
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2015
+Unaudited Supplementary Financial Information
+273
+Annual Report 2015
+In addition to those disclosed above, exposures to other non-bank counterparties outside Mainland China to which credit is
+granted for use in Mainland China are considered insignificant to the Group.
+41,571
+51,127
+15,452,338
+16,303,053
+2,270,023
+9,494
+Unaudited Supplementary Financial Information
+(In RMB millions, unless otherwise stated)
+114,619
+114,619
+Precious metals
+298,128
+304,273
+204,607
+95,950
+211,559
+3,523,622
+3,523,622
+3,059,633
+3,059,633
+Due from banks and other financial
+Cash and balances with central banks
+institutions
+95,950
+Placements with banks and
+other financial institutions
+24,048
+24,048
+78,870
+78,870
+Derivative financial assets
+346,765
+346,828
+343,246
+343,272
+or loss
+Financial assets at fair value through profit
+478,503
+478,503
+472,234
+472,234
+Assets
+Reverse repurchase agreements
+Under
+regulatory
+scope of
+consolidation (i)
+31 December 2015 31 December 2015 31 December 2014 31 December 2014
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for the current
+period due to phase-out arrangements
+80
+X04
+108,949
+58,017
+Valid cap of provision for loan impairment to tier 2
+capital under the internal ratings-based approach
+81
+79
+242,040
+262,825
+Provision for loan impairment under the internal ratings-
+based approach
+78
+X02
+9,684
+X03
+Excluded from core tier 1 capital due to cap
+82
+Valid cap to additional tier 1 capital instruments for the
+consolidation (i)
+Under
+regulatory
+scope of
+financial
+statements (i)
+as in published
+Balance sheet
+(ii) Consolidated financial statements
+17,932
+15,311
+164,752
+144,158
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period due to
+сар
+85
+84
+83
+current period due to phase-out arrangements
+Balance sheet
+as in published
+financial
+statements (i)
+5,381
+996,333
+468,462
+Prepared in accordance with PRC GAAP.
+(i)
+20,576,732
+20,609,953
+256,829
+263,193
+Annual Report 2015
+337,210
+22,148,637
+Total assets
+347,004
+Other assets
+24,758
+24,758
+21,066
+22,209,780
+277
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2015
+210
+Due to central banks
+Liabilities
+consolidation (i)
+statements (i)
+scope of
+Under
+regulatory
+Balance sheet
+as in published
+financial
+consolidation (i)
+scope of
+financial
+statements (i)
+Under
+regulatory
+Balance sheet
+as in published
+31 December 2015 31 December 2015 31 December 2014 31 December 2014
+(In RMB millions, unless otherwise stated)
+21,066
+996,333
+Deferred income tax assets
+24,804
+2,566,390
+2,869,642
+2,870,353
+Held-to-maturity investments
+1,176,369
+10,767,798
+2,565,606
+10,768,750
+1,188,288
+1,444,195
+Available-for-sale financial assets
+11,652,264
+11,652,812
+Loans and advances to customers
+468,452
+1,421,231
+Receivables
+352,143
+326,339
+26,101
+26,101
+Construction in progress
+171,393
+171,434
+195,357
+195,401
+Fixed assets
+34,619
+28,919
+29,885
+24,185
+Long term equity investments
+319,108
+331,731
+24,784
+Valid cap of provision for loan impairment to tier 2
+capital under the weighted approach
+77
+X01
+Investment in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+56a
+Directly or indirectly holding tier 2 capital of the Bank
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+55
+54
+53
+56b
+52
+X02+X04
+118,633
+306,704
+63,398
+244,641
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+51
+50
+Tier 2 capital: Regulatory adjustments
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+13,600
+15,800
+Requirements for capital adequacy ratio and reserve capital
+15,800
+290,904
+1,812,137
+12,475,939
+13,216,687
+Total risk-weighted assets
+60
+13,600
+231,041
+2,012,103
+Total capital (tier 1 capital + tier 2 capital)
+59
+Tier 2 capital
+58
+Total regulatory adjustments to tier 2 capital
+57
+Others that should be deducted from tier 2 capital
+56c
+X10
+transition period
+61
+Including: Invalid portion to tier 2 capital after the
+X27
+79,567
+Additional tier 1 capital
+44
+capital
+Total regulatory adjustments to additional tier 1
+43
+45
+from tier 2 capital
+42
+Index
+2014
+31 December
+31 December
+2015
+Item
+Undeducted shortfall that should be deducted
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+1,781,062
+34,500
+1,521,233
+242
+1,001
+Valid portion of minority interests
+战
+48
+transition period
+X17
+187,829
+164,752
+144,158
+Invalid instruments to tier 2 capital after the
+47
+180,242
+Tier 2 capital instruments and related premium
+46
+Tier 2 capital:
+49
+Core tier 1 capital adequacy ratio
+12.87%
+11.92%
+Valid caps of surplus provision for loan impairment to
+tier 2 capital
+Undeducted amount of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted amount of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Mortgage servicing rights (net of deferred tax liabilities)
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+75
+74
+73
+72
+31 December
+Amounts below the thresholds for deduction
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+8%
+8%
+6%
+6%
+Item
+31 December
+2015
+2014
+15,541
+17,829
+Provision for loan impairment under the weighted
+approach
+76
+24,569
+20,313
+N/A
+N/A
+X07+X13
+26,658
+21,669
+X05+X06+
+X08+X09+X12
+33,067
+48,007
+Index
+5%
+5%
+ICBC
+276
+2.5%
+Including: Capital conservation buffer requirement
+65
+3.5%
+3.5%
+Institution specific buffer requirement
+64
+14.53%
+15.22%
+Capital adequacy ratio
+63
+12.19%
+13.48%
+Tier 1 capital adequacy ratio
+62
+2.5%
+For the year ended 31 December 2015
+66
+67
+Capital adequacy ratio
+71
+Tier 1 capital adequacy ratio
+70
+69
+Core tier 1 capital adequacy ratio
+Domestic minima for regulatory capital
+weighted assets
+6.92%
+7.87%
+Percentage of core tier 1 capital meeting buffers to risk-
+68
+1%
+1%
+Including: G-SIB buffer requirement
+Including: Countercyclical buffer requirement
+10,064
+18,951
+44,967
+31,470
+28,148
+27,982
+Taxes payable
+75,234
+75,201
+31,717
+72,278
+Debt securities issued
+306,622
+306,622
+279,590
+279,590
+Deferred income tax liabilities
+72,207
+Employee benefits payable
+15,559,727
+15,556,601
+76,826
+24,191
+24,191
+337,191
+329,896
+380,957
+377,037
+Certificates of deposit
+183,352
+183,352
+176,248
+176,248
+Due to customers
+16,281,939
+16,283,105
+995
+76,826
+754
+189
+34,428
+Including: Preference shares
+79,375
+79,375
+34,428
+220,860
+34,428
+Construction
+5,165
+984
+1,708
+3,034
+44,742
+301,261
+6,149
+79,375
+79,375
+Other equity instruments
+Other liabilities
+545,388
+496,583
+424,930
+Total liabilities
+20,409,261
+20,353,795
+19,072,649
+396,907
+19,043,294
+Shareholders' equity
+Share capital
+356,407
+356,407
+353,495
+353,495
+451
+Mining
+589,346
+303,916
+170,856
+129,662
+41,194
+92,277
+149,018
+3,316,420
+Personal mortgage and business loans
+7,612,592
+6,881
+6,078
+803
+1,903
+3,408
+108,849
+Subtotal of corporate loans
+2,387,331
+2,295,752
+39,954
+Discounted bills
+80,418
+80,418
+61,261
+2,577,534
+3,063,465
+Subtotal of personal loans
+17,749
+17,749
+21,307
+281,782
+676,134
+Others
+62,669
+62,669
+354,450
+589,385
+Others
+2,116
+103,291
+631
+1,106,776
+631
+1,106,776
+Placements from banks and other financial
+institutions
+477,593
+2,901
+477,593
+432,463
+Financial liabilities at fair value through
+profit or loss
+Derivative financial liabilities
+Repurchase agreements
+303,927
+432,463
+1,312
+556
+3,785
+335
+480
+668
+38,137
+123,207
+Science, education, culture and sanitation
+4,648
+3,850
+798
+1,715
+3,217
+157,739
+224,994
+Lodging and catering
+4,341
+2,451
+11,465
+10,720
+745
+77,602
+3,027,428
+3,541,862
+Subtotal of personal loans
+19,217
+19,217
+93,167
+34,428
+730,574
+Others
+73,950
+73,950
+48,487
+2,745,301
+282,127
+93,167
+Discounted bills
+Total loans and advances to customers
+300,497
+the covered portion of overdue loans and advances *
+Current market value of collateral held against
+280,654
+229,155
+51,499
+9,518
+9,254
+264
+524
+135,780
+332,698
+6,739,552
+717
+522,052
+522,052
+11,933,466
+2,811,288
+Covered portion of overdue loans and advances *
+Personal mortgage and business loans
+126,734
+44,063
+137,497
+Science, education, culture and sanitation
+4,610
+3,615
+995
+1,024
+3,599
+147,758
+224,215
+Lodging and catering
+5,129
+3,659
+1,470
+7,964
+576
+197
+2,244
+51,235
+135,256
+254,379
+3,190,072
+7,869,552
+Subtotal of corporate loans
+7,254
+6,245
+1,009
+2,264
+4,888
+107,909
+383,437
+Others
+2,441
+177,969
+146,208
+186,490
+Uncovered portion of overdue loans and advances *
+530,103
+Real estate
+14,035
+12,933
+1,102
+1,634
+406,577
+2,792
+751,728
+gas and water
+Production and supply of electricity, heating
+30,048
+15,294
+14,754
+147,319
+6,213
+4,198
+2,157
+2,319
+5,093
+404,920
+624,046
+Leasing and commercial services
+8,267
+8,226
+41
+101
+1,098
+251,171
+477,193
+Water, environment and public utility management
+11,224
+9,067
+35,935
+56,773
+515,576
+923,005
+assessed
+be impaired
+to customers
+Collectively
+Individually
+Allowance for impairment losses
+Loans and
+advances
+individually
+assessed to
+Overdue
+loans and
+advances
+Loans and
+advances
+covered by
+collateral
+to customers
+and advances
+Gross loans
+*
+31 December 2014
+Please see section (e) (iii) for the definition of overdue loans and advances to customers.
+assessed
+Total loans and advances to customers
+Total
+1,642,460
+Wholesale and retail
+26,850
+24,733
+2,117
+4,788
+6,666
+425,696
+1,439,285
+Transportation, storage and postal services
+44,497
+27,695
+16,802
+36,184
+57,155
+712,403
+Manufacturing
+38,947
+350,274
+11,026,331
+299
+20,288
+Head Office
+losses
+losses
+be impaired
+losses
+600
+be impaired
+impairment
+impairment
+assessed
+allowance for
+Collectively
+Individually
+assessed
+allowance for
+Individually
+assessed to
+Gross amount
+476
+598
+476
+32,952
+8,870
+25,265
+8,783
+24,800
+63,411
+Western China
+36,233
+10,111
+28,627
+9,980
+27,867
+67,431
+Yangtze River Delta
+68,270
+impairment
+Bohai Rim
+Individually
+assessed
+allowance for
+Impaired loans
+and advances to customers
+50,034
+77,988
+Over 12 months
+31,204
+53,631
+Between 6 and 12 months
+162,796
+33,930
+Between 3 and 6 months
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+2014
+2015
+(iii) Overdue loans and advances to customers
+(In RMB millions, unless otherwise stated)
+31,177
+115,168
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+and advances to customers
+Overdue loans
+(iv) Overdue and impaired loans and advances to customers by geographical distribution
+31 December 2015
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+The definition of overdue loans and advances to customers is set out as follows:
+1.04%
+1.36%
+0.45%
+0.65%
+0.28%
+0.45%
+Over 12 months
+Between 6 and 12 months
+0.31%
+0.26%
+Individually
+assessed to
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2015
+Pearl River Delta
+25,973
+Collectively
+allowance for
+Individually
+assessed
+and advances to customers
+Individually
+assessed to
+be impaired
+Individually
+assessed
+allowance for
+impairment
+losses
+assessed
+be impaired
+Individually
+assessed to
+and advances to customers
+Impaired loans
+Overdue loans
+31 December 2014
+229,155
+Gross amount
+allowance for
+impairment
+impairment
+4,926
+15,113
+4,868
+14,229
+47,637
+11,729
+21
+23
+21
+23
+9,795
+Pearl River Delta
+Head Office
+Yangtze River Delta
+losses
+losses
+51,499
+58,973
+135,780
+133,732
+Total
+Overseas and others
+Northeastern China
+Central China
+22,883
+9,187
+39,890
+24,610
+24,372
+51,568
+28,325
+8,431
+26,305
+8,304
+9,113
+18,294
+7,335
+18,673
+332,698
+5,422
+3,768
+5,664
+3,090
+5,829
+16,028
+210
+1,788,267
+3,304
+6,038
+3,215
+5,997
+15,109
+24,669
+7,352
+50,296
+271
+Annual Report 2015
+11,026,311
+gas and water
+Production and supply of electricity, heating,
+14,438
+25,687
+22,265
+37,653
+20,114
+Wholesale and retail
+23,953
+1,148
+24,724
+Transportation, storage and postal services
+15,120
+33,480
+1,129
+163
+16,142
+26
+1,011
+17
+132
+management
+Water, environment and public utility
+454
+878
+377
+2,619
+Real estate
+439
+24,184
+844
+21,818
+Leasing and commercial services
+22,354
+42
+38,239
+loans
+Uncovered portion of overdue loans and advances *
+Covered portion of overdue loans and advances *
+the covered portion of overdue loans and advances *
+Current market value of collateral held against
+257,581
+216,336
+Please see section (e) (iii) for the definition of overdue loans and advances to customers.
+41,245
+210,578
+6,244,228
+6,307
+6,256
+51
+71
+92,348
+270
+ICBC
+189,729
+loss
+Write-offs
+of impaired
+impairment
+impairment of impaired
+loans
+loss
+New
+Write-offs
+New
+2014
+2015
+The amount of new impairment loss charged to the consolidated statement of profit or loss and the amount of impaired
+loans and advances written off during the year are set out below:
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+115,169
+95,409
+Manufacturing
+Mining
+1,737
+572
+Mainland China
+(ii) Analysis by location of the counterparties
+38,364
+193,927
+60,296
+226,140
+Asia Pacific (excluding Mainland China)
+Total for loans and advances to customers
+10,299
+Discounted bills
+4,489
+38,254
+9,931
+54,569
+8,945
+―of which attributed to Hong Kong
+Europe
+Africa
+11,933,466
+64,161
+97,556
+30,967
+37,533
+44,142
+81,203
+315,328
+363,267
+431,093
+10,455,948
+11,207,140
+510,034
+2014
+2015
+North and South America
+Subtotal for personal loans
+2,528
+18,309
+2,775
+187
+2,924
+Science, education, culture and sanitation
+896
+4,152
+833
+1,861
+Lodging and catering
+566
+5,757
+960
+3,396
+Construction
+187
+3,498
+2,834
+350,274
+85
+6,055
+28,358
+Others
+1,961
+19,945
+7,156
+26,211
+Personal mortgage and business loans
+33,875
+146,728
+50,365
+161,272
+Subtotal for corporate loans
+493
+5,152
+645
+Others
+10,401
+29,115
+N/A
+N/A
+N/A
+Including: Coupon rate and
+dividend/coupon
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Floating
+Floating
+Including: Fixed or floating
+Coupons/dividends
+any related index
+Preference
+shares (Domestic)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Ordinary shares
+(H share)
+(A share)
+capital instrument
+Ordinary shares
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2015
+Unaudited Supplementary Financial Information
+282
+281
+Preference
+shares (Offshore)
+Including: Existence of a
+N/A
+N/A
+Non-cumulative
+No
+Non-cumulative
+No
+Including: If convertible,
+Convertible or non-convertible
+or cumulative
+Including: Non-cumulative
+incentive mechanism
+Including: Redemption
+coupons/dividends
+partially discretionary or
+mandatory cancellation of
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+discretionary
+discretionary
+Fully
+Fully
+Including: Fully discretionary,
+dividend stopper
+Yes
+4.50% (dividend
+rate) before 18
+November 2020
+6% (dividend
+rate) before 10
+December 2019
+Yes
+6% (dividend
+rate) before 10
+December 2021
+Yes
+6% (dividend
+rate) before 10
+December 2019
+Yes
+Annual Report 2015
+No
+all the Domestic
+Preference Shares
+partial amount
+Commences on the
+First Redemption
+Date (18 November
+2020) and ends
+on the completion
+date of redemption
+10 December 2014
+Perpetual
+10 December 2014
+Perpetual
+No maturity date
+Yes
+No
+No
+No maturity date
+No maturity date
+Perpetual
+19 October 2006
+RMB45,000
+Other equity
+RMB12,000
+Other equity
+EUR600
+Other equity
+USD2,940
+Other equity
+10 December 2014
+Perpetual
+RMB86,795
+Share capital,
+Capital reserve
+RMB269,612
+4,542
+RMB44,947
+Additional tier 1
+capital instrument
+RMB11,958
+RMB equivalent
+Additional tier 1
+capital instrument
+Group
+Group
+Group
+Additional tier 1
+capital instrument
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+17,928
+RMB169,200
+Share capital,
+Capital reserve
+18 November 2015
+Perpetual
+No maturity date
+Yes
+No maturity date
+2020, in full or
+is 18 November
+The First
+Redemption Date
+Date
+partial amount
+10 December in
+each year after the
+First Redemption
+is 10 December
+2019, in full or
+The First
+Redemption Date
+Date
+partial amount
+10 December in
+each year after the
+First Redemption
+is 10 December
+2021, in full or
+The First
+Redemption Date
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+is 10 December
+The First
+Redemption Date
+N/A
+MA
+N/A
+if applicable
+Including: Subsequent call dates,
+N/A
+N/A
+MA
+Perpetual
+19 October 2006
+Yes
+Yes
+No maturity date
+or conversion of
+RMB339,120
+No
+Non-cumulative
+(The 1st place on the sub-list of commercial banks)
+Ranking in terms of operating income
+Millward Brown
+The 22nd place among the Top 100 Most Valuable Global Brands
+(The 2nd place among the brands of financial institutions)
+Ranking in terms of brand value
+China Enterprise Confederation
+The 4th place among the Top 500 Enterprises of China
+Ranking in terms of operating income
+2015 Awards
+OVERSEAS AWARDS
+Euromoney
+Best Emerging Markets Bank
+Award for Outstanding Contribution to Global Financial
+Services-Chairman Jiang Jianqing
+Best Bank in China
+Best Precious Metal Trading Bank in China
+The 18th place among the Global 500
+The Banker
+Global Finance
+Best Corporate Bank in China
+Best Consumer Bank in China
+Best Treasury & Cash Management Bank
+Best Private Bank in China
+Best Foreign Exchange Provider
+Best Bank for Commercial Paper/MTNs
+Best Subcustodian Bank in China
+Asiamoney
+Best Domestic Bank
+Financial Times
+Best Private Bank in China
+The Asset
+Bank of the Year in China
+Fortune
+The 1st place among the Top 1000 World Banks
+Ranking in terms of tier 1 capital of the bank
+The Banker
+Other cash inflow
+41,914
+30,924
+20
+Total expected cash inflow
+2,334,016
+1,355,395
+Adjusted
+value
+Qualified liquid assets
+21
+22
+Net cash outflow
+23
+Liquidity coverage ratio (%) (i)
+(i)
+The Liquidity Coverage Ratio is the monthly arithmetic mean of the latest quarter.
+4,621,436
+3,091,213
+149.51%
+Annual Report 2015
+287
+2015 Ranking and Awards
+2015 Ranking
+Forbes
+The 1st place among the Global 2000
+Ranking in terms of combination of sales, profit,
+assets, and market value
+The Asset Corporate Award - Platinum Award
+Non-cumulative
+Best Private Bank, China
+Best Commodity Derivatives Trading Bank in China
+Yazhou Zhoukan (YZZK)
+House of the Year, China
+Asia Risk
+Best CEO (Investor Relations) Yi Huiman
+Best CSR
+Best IR Company (China)
+Corporate Governance Asia
+Most International Asian Cash Management Bank in Asia Pacific
+Technology Implementation Awards-Best CRM Project
+Best Counterparty Bank in China
+Best Internet Banking in China
+Additional Tier 1
+Capital Trigger
+Additional Tier 1
+Capital
+Trigger Event or
+Tier 2
+Top 1000 Global Chinese Merchants
+conversion trigger(s)
+N/A
+Yes
+Yes
+Yes
+Yes
+No
+No
+za
+Non-cumulative
+Non-cumulative
+No
+No
+N/A
+- Award for the Largest Financial Enterprise
+Top 1000 Global Chinese Merchants
+― Award for the Highest Net Profit
+FinanceAsia
+Best Bank
+Best FX Bank
+Best Private Bank, China
+Best M&A Deal
+The Asian Banker
+ICBC
+288
+Visa Best Payment Innovation Award
+Visa Best Parter
+Visa Inc.
+Global Competitiveness TOP Brands From China
+International Data Group
+Recognition of Performance Excellence 8th APCCAL Awards
+Asia Pacific Contact Centre Association Leaders
+The Chamber of Hong Kong Listed Companies
+Hong Kong Corporate Governance Excellence Award
+The Hong Kong Management Association
+Citation for Corporate Governance Disclosure
+The Institute of Management Accountants
+IMA Award for Special Contribution to
+Management Accounting
+Trade & Forfaiting Review
+ECA Deals of the Year
+Deal of the Year
+Trade Finance
+Leasing Deal of the Year
+Marine Money
+Best Bank in China for Payments & Collections
+Treasury Management International
+Best Corporate Governance: Listed Companies
+Ta Kung Pao
+Hong Kong Stock Market Ranking of Chinese Mainland
+Enterprises Award for the Largest Market Value
+Best Bond House-Domestic
+19
+Core tier 1
+capital instrument
+Group
+Intangible assets
+Interest receivable
+Other assets
+Item
+scope of
+Under
+regulatory
+31 December 2015
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2015
+Unaudited Supplementary Financial Information
+279
+Annual Report 2015
+Including: land use rights
+X13
+X12
+95
+X11
+5,700
+29,885
+X10
+13,600
+Including: Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+issued by financial institutions that are under control
+but not subject to consolidation
+Including: Investment in core tier1 capital instruments
+Long term equity investments
+21,619
+Other receivables
+Goodwill
+consolidation
+Including: Preference shares
+79,375
+Other equity instruments
+X18
+356,407
+Share capital
+X17
+180,242
+Including: Valid portion of tier 2 capital instruments and their premium
+306,622
+Debt securities issued
+32,102
+Others
+6,772
+Repossessed assets
+4,891
+Long-term deferred and prepaid expenses
+X16
+8,478
+155,565
+X15
+19,846
+X14
+21,202
+108,200
+337,210
+Index
+Including: Significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+79,375
+X09
+Including: Non-significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+tier 2 capital under the Internal Ratings-Based Approach
+Including: Valid cap of provision for loan impairment to
+X03
+262,825
+Ratings-Based Approach
+Less:Provision for loan impairment under the Internal
+X02
+5,381
+X01
+17,829
+11,932,918
+11,652,264
+58,017
+Index
+tier 2 capital under the weighted approach
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of provision for loan impairment to
+Total loans and advances to customers
+Loans and advances to customers
+Item
+scope of
+Under
+regulatory
+31 December 2015
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2015
+Unaudited Supplementary Financial Information
+(iii) Description of related items
+consolidation
+X04
+Available-for-sale financial assets
+1,421,231
+326,339
+Receivables
+X08
+2,420
+that are not subject to consolidation
+instruments issued by financial institutions
+2,869,642
+X07
+50
+Held-to-maturity investments
+X06
+750
+6,112
+160,022
+X05
+6,102
+Including: Non-significant minority investments in tier 2 capital
+Including: Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+that are not subject to consolidation
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+Equity investment
+Other debt instrument investment measured at fair value
+that are not subject to consolidation
+instruments issued by financial institutions
+Including: Non-significant minority investments in tier 2 capital
+1,255,097
+Bond investment measured at fair value
+38,640
+capital instrument
+X28
+151,963
+Including: Post-transition
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Core tier 1 capital
+Core tier 1 capital
+Regulatory treatment
+Including: Transition arrangement
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Guidance on
+Preference Shares,
+N/A
+Measures on
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+People's Republic
+Company Law of the
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+obligations) attached
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+The creation and
+issue of the Offshore
+accordance with,
+PRC law
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+ICBC
+360011
+Preference
+shares (Domestic)
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Core tier 1 capital
+arrangement of Regulation
+Additional tier
+1 capital
+Group
+Core tier 1
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+redemption amount
+contingent call dates and
+Including: Optional call date,
+supervisory approval)
+Issuer call (subject to prior
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+latest reporting date)
+capital (in millions, as at the
+Amount recognized in regulatory
+Instrument type
+Including: Eligible to the parent
+company/group level
+Governing Capital of Commercial
+Banks (Provisional)
+1 capital
+Additional tier
+Additional tier
+1 capital
+Additional tier
+1 capital
+84602
+Capital reserve
+ICBC
+Hong Kong
+/Hong Kong, China
+Minority interests
+X23
+781,853
+Retained profits
+X22
+246,356
+General reserve
+X21
+178,040
+Surplus reserve
+(31,105)
+Foreign currency translation reserve
+6,647
+421
+X20
+(3,869)
+items that are not fair valued on the balance sheet
+Including: Cash flow hedge reserves that relate to the hedging of
+(3,926)
+Reserve for cash flow hedging
+28,811
+Reserve for changes in fair value of available-for-sale financial assets
+X24
+(5,799)
+Other comprehensive income
+X19
+Changes in share of other owners' equity of associates and joint ventures
+Including: Valid portion to core tier 1 capital
+4,340
+X25
+4604
+4603
+1398
+Securities and Futures
+Ordinance of
+ICBC
+ICBC
+ICBC
+ICBC
+601398
+Securities Law of the
+People's Republic
+of China/China
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+(iv) Main features of eligible capital instruments
+ICBC
+280
+X27
+1,001
+Including: Valid portion to tier 2 capital
+X26
+192
+Including: Valid portion to additional tier 1 capital
+Preference
+shares (Offshore)
+873,360
+Core tier 1 capital
+Fully functional performance payment of cash inflow
+No
+4.875%
+Fixed
+Fixed
+5.80%
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Including: If convertible,
+fully or partially
+N/A
+N/A
+No
+Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+N/A
+Fixed
+4.50%
+in full amount
+N/A
+N/A
+N/A
+5 August 2019,
+N/A
+No
+Yes
+21 September 2025
+Debt securities issued
+21 September 2015
+Dated
+USD2,000
+Including: If convertible,
+conversion rate
+No
+Fully discretionary
+Mandatory
+Tier 2 capital bonds
+Tier 2 capital bonds
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2015
+Unaudited Supplementary Financial Information
+write-down trigger(s)
+Including: If write-down,
+Write-down feature
+instrument it converts into
+Including: If convertible, specify issuer of
+type convertible into
+Including: If convertible, specify instrument
+optional conversion
+Including: If convertible, mandatory or
+Including: If convertible, conversion rate
+Including: If convertible, conversion trigger (s)
+Including: If convertible, fully or partially
+Convertible or non-convertible
+Main features of regulatory
+capital instrument
+ICBC
+284
+Cumulative
+No
+Cumulative
+No
+Cumulative
+No
+Mandatory
+5 August 2024
+Tier 2 capital bonds
+Debt securities issued
+4 August 2014
+Dated
+10 October 2023
+Yes
+Regulatory treatment
+to subordination shall be
+governed by, and construed in
+accordance with, PRC law
+The Notes and the Fiscal
+Agency Agreement shall be
+governed by, and shall be
+construed in accordance with,
+New York law, except that the
+provisions of the Notes relating
+Regulation S ISIN:
+USY39656AC06
+Rule 144A ISIN:
+US455881AD47
+Securities Law of the People's
+Republic of China/China
+The Notes and any non-
+contractual obligations arising
+out of or in connection with
+the Notes will be governed
+by, and shall be construed in
+accordance with English law,
+except that the provision of the
+Notes relating to Subordination
+shall be governed by, and
+construed in accordance with,
+the laws of Hong Kong
+Tier 2 capital bonds
+Tier 2 capital bonds
+ICBC
+1428009
+ISIN: XS0976879279
+BBGID:BBG005CMF4N6
+Tier 2 capital bonds
+ICBC (Asia)
+ICBC
+Including: Transition arrangement of
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+Including: Post-transition arrangement of
+Governing law(s) of the instrument
+Issuer
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2015
+Unaudited Supplementary Financial Information
+283
+Annual Report 2015
+N/A
+N/A
+N/A
+N/A
+Unique identifier
+Regulation Governing Capital of
+Tier 2 capital
+Tier 2 capital
+Debt securities issued
+10 October 2013
+Dated
+USD500
+Tier 2 capital instrument
+RMB equivalent 3,247
+RMB20,000
+Parent company
+/Group
+Tier 2 capital instrument
+RMB equivalent 12,842
+Parent company
+/Group
+Tier 2 capital instrument
+RMB19,995
+Group
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially
+discretionary or mandatory cancellation of
+coupons/dividends
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Including: Original maturity date
+1,299,797
+691,845
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognized in regulatory capital
+Instrument type
+the parent company/group level
+Including: Eligible to
+Commercial Banks (Provisional)
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+10 October 2018,
+in full amount
+N/A
+3 3 3 3 3 3 3
+No
+31 December
+S/N Item
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On-and Off-balance Sheet Assets and Related
+Information
+23,813,992
+(11,665)
+1,602,642
+38,855
+35,523
+(61,143)
+22,209,780
+2015
+31 December
+2015
+Balance of adjusted on-and off-balance sheet assets
+Other adjustments
+7
+Adjustment for off-balance sheet items
+6
+Adjustment for securities financing transactions
+5
+Adjustments for derivative financial instruments
+Adjustments for fiduciary assets
+Consolidated adjustments for accounting purposes but outside the scope of regulatory
+consolidation
+3 4
+2
+Total consolidated assets as per published financial statements
+8
+1
+On-balance sheet items (excluding derivatives and SFTs, but including collateral)
+2
+Gross SFT assets (with no recognition of netting), after adjusting for sale accounting
+transactions
+12
+114,393
+Total derivative exposures
+11
+(20,409)
+Less: Adjusted effective notional deductions for written credit derivatives
+10
+56,396
+Effective notional amount of written credit derivatives
+9
+(10,325)
+Less: Exempted CCP leg of client-cleared trade exposures
+8
+Less: Deductions of receivables assets for cash variation margin provided in derivatives
+transactions
+7
+39,582
+49,149
+21,366,257
+(11,665)
+21,377,922
+Gross-up for derivatives collateral provided where deducted from the balance sheet assets
+pursuant to the operative accounting framework
+Add-on amounts for PFE associated with all derivatives transactions
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (ie net of eligible cash variation
+margin)
+56
+4
+3
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+1
+=
+S/N Item
+The following information is disclosed in accordance with the CBRC Administrative Measures for Leverage Ratio of
+Commercial Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+Yes
+of the Bank
+Non-viability
+Non-viability of
+ICBC (Asia) or the Bank
+Yes
+Yes
+N/A
+§
+N/A
+N/A
+N/A
+N/A
+The occurrence of the earlier
+of either: (i) the CBRC having
+decided that a write-off is
+necessary, without which the
+Issuer would become non-
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+N/A
+viable; or (ii) any relevant
+authority having decided that
+a public sector injection of
+capital or equivalent support is
+necessary, without which the
+Issuer would become non-viable
+Full write-down
+Permanent write-down
+Including: If write-down, full or partial
+(i) Disclosure of Leverage Ratio
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2015
+Unaudited Supplementary Financial Information
+285
+Annual Report 2015
+N/A
+debts
+No
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+N/A
+debts
+No
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+No
+debts
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+N/A
+Full write-down
+Permanent write-down
+Full write-down
+Permanent write-down
+Including: If yes,specify non-compliant features
+Non-compliant transitioned features
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+Including: If temporary write-down,
+permanent or temporary
+Including: If write-down,
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+MA
+13
+No
+occurs
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Fully or partially
+convertiblewhen
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+occurs
+The initial
+conversion price
+is equal to the
+average trading
+price of the A
+Shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Including: If convertible,
+mandatory or optional
+conversion
+N/A
+Including: If convertible,
+N/A
+specify instrument
+type convertible into
+a Tier 2 Capital
+Trigger Event
+issuance plan
+Mandatory
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+is equal to the
+average trading
+price of the H
+shares of the
+Leverage ratio
+22
+23,813,992
+1,781,062
+Balance of adjusted on-and off-balance sheet assets
+21
+Net tier 1 capital
+20
+(1,425,102)
+1,602,642
+3,027,744
+730,700
+38,855
+Balance of adjusted off-balance sheet assets
+19
+Less: Adjustments for conversion to credit equivalent amounts
+18
+Off-balance sheet exposure at gross notional amount
+17
+Total securities financing transaction exposures
+16
+Agent transaction exposures
+15
+CCR exposure for SFT assets
+14
+Less: Netted amounts of cash payables and cash receivables of gross SFT assets
+occurs
+The initial
+conversion price
+Including: If convertible,
+7.48%
+specify issuer of
+ICBC
+No
+Including: If write-down,
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+write-down trigger(s)
+Including: If write-down,
+full or partial
+N/A
+No
+N/A
+N/A
+N/A
+Including: If write-down,
+N/A
+N/A
+permanent or temporary
+Including: If temporary write-down,
+N/A
+N/A
+No
+mechanism
+description of write-up
+N/A
+No
+No
+No
+름름
+N/A
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+N/A
+N/A
+ICBC
+ICBC
+ICBC
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Ordinary shares
+(A share)
+Ordinary shares
+Preference
+(H share)
+shares (Offshore)
+Preference
+shares (Offshore)
+Preference
+Preference
+shares (Offshore)
+shares (Domestic)
+Write-down feature
+instrument it converts into
+286
+No
+Unaudited Supplementary Financial Information
+N/A
+N/A
+non-compliant features
+Including: If yes, specify
+Non-compliant transitioned
+features
+instrument)
+immediately senior to
+(specify instrument type
+general creditor,
+general creditor,
+hierarchy in liquidation
+After depositor,
+N/A
+After depositor,
+18
+and borrowed securities included)
+451,111
+992,305
+Collateralized borrowing and lending (Reverse repurchase
+17
+Cash inflow
+4,446,608
+Total expected cash outflow
+16
+18,138
+804,157
+Position in subordination
+름름
+N/A
+N/A
+No
+ICBC
+No
+N/A
+No
+No
+2
+with the holders of
+Parity Obligations
+in the same
+liquidation order
+or guaranteed
+by the Bank
+ranking senior
+to the Domestic
+Preference Shares,
+After all liabilities
+of the Bank and
+instruments issued
+with the holders of
+Parity Obligations
+in the same
+liquidation order
+or guaranteed
+by the Bank
+ranking senior
+to the Offshore
+Preference Shares,
+After all liabilities
+of the Bank and
+instruments issued
+with the holders of
+Parity Obligations
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+ranking senior
+to the Offshore
+Preference Shares,
+with the holders of
+Parity Obligations
+ranking senior
+to the Offshore
+Preference Shares,
+in the same
+liquidation order
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+creditor of the
+subordinated
+debts, and
+preference
+shareholders
+creditor of the
+subordinated
+debts, and
+preference
+shareholders
+N/A
+N/A
+N/A
+름름름
+N/A
+Contingent financing obligations
+15
+in the same
+liquidation order
+37,985
+3,379,022
+9,854,773
+Non-collateralized wholesale financing, wherein:
+835,608
+8,356,078
+Less stable deposits
+5,734
+125,144
+Stable deposit
+345
+841,342
+8,481,222
+Retail deposits, small enterprise customer deposits, wherein:
+2
+Cash outflow
+4,621,436
+Qualified liquid assets
+Qualified liquid assets
+Discounted
+Value After
+Discounted
+Value Before
+37,985
+S/N Item
+Fourth-quarter 2015
+(j) Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced Approaches
+For the year ended 31 December 2015
+(In RMB millions, unless otherwise stated)
+6
+Business related deposit (agency business excluded)
+1
+5,772,357
+Credit and liquidity facilities
+124,564
+14
+13
+Mortgage debt instruments related cash outflow
+1,543,251
+5,410
+5,410
+Other contractual financing obligations
+Derivatives and other collateral requirements related cash outflows
+11
+129,974
+1,548,661
+Other items, wherein:
+12
+7
+40,147
+Collateralized financing
+9
+149,255
+149,255
+Non-collateralized financing
+8
+1,813,110
+3,933,161
+Non-business related deposit (all counterparties)
+1,416,657
+10
+37,684
+35,133
+Interest expense on debt securities issued was RMB16, 101 million, RMB1,486 million or 10.2% higher than that of last year,
+mainly attributable to the increase in the issuance of corporate bonds and bills by overseas institutions. Please refer to "Note
+38. to the Financial Statements: Debt Securities Issued".
+7.3
+Personal wealth management and
+Bank card business
+2,551
+private banking services
+2015
+Growth rate
+Increase/
+(decrease)
+2014
+Item
+In RMB millions, except for percentages
+NET FEE AND COMMISSION INCOME
+The Bank actively optimized income structure. In 2015, the Bank realized non-interest income of RMB160,866 million,
+RMB19,530 million or 13.8% higher than that of the previous year. The non-interest income took up 24.1% of the
+operating income, up 1.8 percentage points. Specifically, net fee and commission income grew by 8.2% to RMB143,391
+million, and other non-interest income increased by 97.7% to RMB 17,475 million.
+Non-interest Income
+(%)
+35,910
+26,791
+15,234
+5,923
+♦ Interest Expense on Debt Securities Issued
+5,544
+Asset custody business
+22.6
+3,376
+14,929
+18,305
+Corporate wealth management services
+(12.1)
+(3,683)
+30,474
+(379)
+Investment banking business
+(8.0)
+(2,436)
+30,422
+27,986
+cash management
+Settlement, clearing business and
+73.7
+20,676
+Interest expense on due to banks and other financial institutions was RMB49,801 million, RMB7,000 million or 16.4% higher
+than the previous year, principally attributable to an increase of RMB924,795 million in the average balance driven by the
+fast growth of third-party custody service.
+0.35
+Discussion and Analysis
+10,326
+2,951,896
+0.33
+10,439
+3,131,445
+Demand deposits
+3.38
+132,379
+3,911,781
+3.26
+132,964
+4,074,196
+Time deposits
+Personal deposits
+2.02
+146,728
+7,251,982
+(6.4)
+1.87
+Subtotal
+♦ Interest Expense on Due to Banks and Other Financial Institutions
+7,205,641
+1.99
+ICBC
+20
+Note: (1) Includes outward remittance and remittance payables.
+2.04
+298,941
+14,627,258
+1.91
+298,010
+15,579,271
+Total deposits
+1.86
+511,599
+1.50
+9,071
+604,019
+Overseas business
+2.08
+142,705
+6,863,677
+143,403
+Guarantee and commitment business
+14,281
+4,614
+OPERATING EXPENSES
+Other non-interest related gain was RMB17,475 million, RMB8,636 million or 97.7% higher than that of the previous year.
+Specifically, net trading income increased by RMB2,482 million, mainly driven by more earnings from investment in held-
+for-trading interbank CDs. Net loss on financial assets and liabilities designated at fair value through profit or loss declined
+by RMB4,071 million mainly because of a decrease in expenses from structural deposits and principal-guaranteed wealth
+management products paid to customers. Besides, a higher return from investment in available-for-sale financial instruments
+raised the net gain on financial investments by RMB3, 117 million.
+97.7
+8,636
+8,839
+17,475
+Total
+(6.8)
+(1,034)
+15,315
+Other operating income, net
+172.9
+3,117
+1,803
+4,920
+Net gain on financial investments
+(40.6)
+4,071
+(10,024)
+OPERATING EXPENSES
+Item
+2015
+2014
+145,536
+Others
+Amortisation
+2.3
+969
+41,351
+42,320
+Business tax and surcharges
+(2.7)
+(5,953)
+(784)
+28,114
+Premises and equipment expenses
+1.9
+2,151
+112,022
+114,173
+Staff costs
+(%)
+In RMB millions, except for percentages
+Increase/ Growth rate
+(decrease)
+28,898
+4,687
+Net loss on financial assets and liabilities
+designated at fair value through profit or
+loss
+2,482
+Net fee and commission income
+Less: Fee and commission expense
+10.2
+14,992
+146,678
+161,670
+Fee and commission income
+11.9
+296
+2,488
+2,784
+Others
+(2.0)
+(40)
+2,019
+1,979
+Trust and agency services
+1.6
+73
+18,279
+143,391
+14,181
+4,098
+28.9
+1,745
+4,227
+Net trading income
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2014
+2015
+Item
+142.2
+OTHER NON-INTEREST RELATED GAIN
+Discussion and Analysis
+21
+Annual Report 2015
+Income from investment banking, settlement, clearing business, cash management and asset custody services was lowered
+because of a series of factors, including external economic environment, execution of the new version of service price list,
+as well as voluntary lowering or exemption of certain business fees in order to reduce fees and share profits to the real
+economy and consumers.
+Income from corporate wealth management services rose by RMB3,376 million or 22.6% to RMB18,305 million, mainly
+benefitting from the fact that larger sales volume of corporate wealth management products fueled sales commissions and
+investment management fees increased.
+Centered on customer requirements, the Bank promoted innovation in products, services and channels, propelled
+transformation and development of fee-based businesses, promoted the application of technological progress of financial
+services to benefit a wider group of customers and also improved the financial service level. In 2015, the Bank realized fee
+and commission income of RMB161,670 million, RMB14,992 million or 10.2% higher than that of the previous year.
+Income from bank card business increased by RMB2,551 million or 7.3% to RMB37,684 million, mainly due to the increase
+in income from relevant business driven by the increase in the number of bank cards issued and consumption volume.
+Income from personal wealth management and private banking services amounted to RMB35,910 million, increasing by
+RMB15,234 million or 73.7%, of which, income from private banking business added by RMB7,114 million or 201.6% to
+RMB10,642 million, while income from personal wealth management, personal fund agency business and personal insurance
+agency services also grew rapidly.
+8.2
+10,894
+132,497
+Fee and commission expense increased by RMB4,098 million or 28.9% to RMB18,279 million mainly as a result of the rise in
+bank card business related fees and business communication expense of ICBC Messenger.
+7,769,611
+Average yield
+0.79
+balance
+Item
+Average
+In RMB millions, except for percentages
+2014
+2015
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Interest income on loans and advances to customers was RMB616,541 million, RMB1,053 million or 0.2% higher than that
+of the previous year. PBC cut benchmark interest rates on RMB loans five times in 2015 and the average yield of loans and
+advances to customers decreased by 50 basis points.
+♦ Interest Income on Loans and Advances to Customers
+Interest Income
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+14,345
+7,555
+(28,722)
+(32,841)
+47,186
+Impact on net interest income
+36,277
+Changes in interest expenses
+1,486
+119
+Interest
+income
+2,295
+Average
+(%)
+advances to customers
+Total loans and
+6.22
+430,311
+6,914,703
+5.75
+440,293
+7,662,872
+loans
+1,367
+Medium to long-term
+(%)
+Average yield
+Interest
+income
+185,177
+3,684,391
+4.47
+176,248
+3,944,455
+Short-term loans
+balance
+5.03
+11,607,327
+Debt securities issued
+(9,826)
+13,092
+Investment in bonds not related to restructuring
+11,571
+(763)
+12,334
+Investment
+1,053
+(52,995)
+54,048
+Loans and advances to customers
+Net increase/
+(decrease)
+Interest rate
+Volume
+Comparison between 2015 and 2014
+Increase/(decrease) due to
+In RMB millions
+Discussion and Analysis
+Assets
+Item
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+(763)
+12,329
+Investment in bonds related to restructuring
+(758)
+16,826
+Due to banks and other financial institutions
+(931)
+(19,015)
+18,084
+Deposits
+Liabilities
+21,900
+(61,563)
+7,000
+83,463
+9,793
+(5,952)
+15,745
+Due from banks and other financial institutions
+(517)
+(1,853)
+1,336
+Due from central banks
+(758)
+Changes in interest income
+616,541
+5.31
+10,599,094
+2014
+2015
+In RMB millions, except for percentages
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+Interest expense on deposits amounted to RMB298,010 million, RMB931 million or 0.3% lower than that of last year, and
+accounted for 81.9% of total interest expense. The decrease was principally due to PBC lowering the RMB benchmark
+deposit interest rates five times in 2015, resulting in a decrease of 13 basis points in the average cost.
+♦ Interest Expense on Deposits
+Interest Expense
+Interest income on due from banks and other financial institutions was RMB36,538 million, RMB9,793 million or 36.6%
+higher than that of last year, mainly because the Bank moderately increased the lending scale, resulting in an increase of
+RMB621,783 million in the average balance.
+♦ Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from central banks was RMB47,867 million, RMB517 million or 1.1% lower than that of the previous
+year. As PBC cut deposit reserve ratio many times in 2015, surplus reserves with central banks with a low yield increased in
+the total deposit reserves.
+♦ Interest Income on Due from Central Banks
+Interest income on financial investment related to restructuring arrived at RMB4,434 million, down RMB758 million or
+14.6% from the previous year, mainly because advance repayment of part of the Huarong bonds in December 2014 resulted
+in a decrease in the average balance during the reporting period.
+Interest income on investment was RMB170,833 million, RMB11,571 million or 7.3% higher than that of the previous year.
+Specifically, interest income on investment in bonds not related to restructuring was RMB166,399 million, representing an
+increase of RMB12,329 million or 8.0%, mainly because the Bank increased bond investment during the reporting period,
+resulting in a rise of RMB318,942 million in the average balance of investment in bonds not related to restructuring. In 2015,
+the bond market showed an overall descending yield curve. However, thanks to the optimization of portfolio structure, the
+average yield of investment in bonds not related to restructuring edged down 2 basis points only.
+♦ Interest Income on Investment
+Discussion and Analysis
+19
+Annual Report 2015
+5.81
+615,488
+Item
+Average
+balance
+Interest
+expense
+Average cost
+30,297
+3,853,902
+0.73
+30,170
+4,114,568
+Demand deposits (¹)
+3.43
+116,431
+3,398,080
+10,599,094
+3.16
+3,655,043
+Time deposits
+Corporate deposits
+(%)
+Average cost
+Interest
+expense
+balance
+(%)
+Average
+115,366
+5.31
+616,541
+advances to customers 11,607,327
+6,750,524
+5.58
+(%)
+income
+balance
+(%)
+Interest Average yield
+Average
+Average yield
+413,751
+Interest
+income
+394,299
+Corporate loans
+balance
+Item
+Average
+2015
+In RMB millions, except for percentages
+2014
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+5.81
+615,488
+7,060,495
+Subtotal
+6.13
+432,191
+Total loans and
+3.53
+26,645
+754,158
+3.47
+30,755
+886,517
+Overseas business
+5.65
+Discounted bills
+162,346
+5.32
+171,894
+3,228,124
+Personal loans
+5.76
+12,746
+221,383
+4.53
+19,593
+2,873,029
+2,211
+Corporate banking
+3.8
+1,687,791
+33.3
+1,513,092
+8.7
+346,154
+7.2
+325,245
+25.7
+1,026,985
+32.3
+1,468,674
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+100.0
+Investment in bonds not related to restructuring amounted to RMB4,548,687 million, RMB552,023 million or 13.8%
+higher than that at the end of last year. Investment in bonds related to restructuring was RMB193,187 million, reducing by
+RMB3,941 million, mainly due to advance repayment of part of the Huarong bonds in December 2015. For details on the
+investment in bonds related to restructuring, please refer to "Note 27.(a) to the Financial Statements: Receivables".
+26
+ICBC
+Discussion and Analysis
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY ISSUERS
+42.2
+In RMB millions, except for percentages
+At 31 December 2014
+Government bonds
+Central bank bills
+Policy bank bonds
+Other bonds
+Total
+At 31 December 2015
+Item
+1,241,676
+27.2
+935,734
+141
+0.0
+126
+0.0
+Less than 3 months
+330,174
+Undated(1)
+7.3
+4.7
+3 to 12 months
+873,122
+19.2
+454,692
+11.4
+188,807
+4,433,237
+(%)
+(%)
+23.4
+4,548,687
+100.0
+3,996,664
+100.0
+In terms of distribution by issuers, government bonds increased by RMB441,689 million or 43.0%; central bank bills
+decreased by RMB20,909 million or 6.0%; policy bank bonds went down RMB174,699 million or 10.4%; and other bonds
+rose by RMB305,942 million or 32.7%. Due to the changes in supply structure on the bond market, the Bank rationally
+stepped up the investment in local government bonds, interbank CDs and ultra-short-term financing bonds during the
+reporting period.
+Amount
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY REMAINING MATURITY
+At 31 December 2014
+At 31 December 2015
+Percentage
+Percentage
+Remaining maturity
+Amount
+In RMB millions, except for percentages
+1 to 5 years
+100.0
+Total
+Investment
+Please see "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and their quality.
+Personal loans rose by RMB478,397 million or 15.6%, of which, residential mortgages grew by RMB445,831 million or
+21.5%, mainly because the Bank actively supported the citizens' rational borrowing requirement for owner-occupied houses
+in line with the adjustment of governmental property policy. Personal business loans declined by RMB21,874 million or
+6.9%, mainly dragged down by the decreasing demand of some small and micro business owners for effective financing as
+affected by the heavier pressure of macro-economic downturn. Credit card overdrafts grew by RMB53,254 million or 14.5%,
+primarily attributable to the continuously healthy development of credit card installment business as well as a stable growth
+in the number of credit cards issued and their consumption volume.
+100.0
+3,063,465
+100.0
+3,541,862
+Total
+12.0
+366,245
+11.8
+419,499
+Credit card overdrafts
+10.3
+316,965
+8.3
+295,091
+(%)
+Amount
+Percentage
+(%)
+Residential mortgages
+2,516,197
+71.1
+In 2015, the Bank flexibly adjusted its investment schedule and focus, optimized the investment portfolio structure in
+strict adherence to the trends in financial markets, suitably scaled up investment and endeavored to improve the return
+on investment portfolios on the basis of guaranteeing liquidity and risk under control. As at the end of 2015, investment
+amounted to RMB5,009,963 million, RMB576,726 million or 13.0% higher compared with the end of the previous year.
+2,070,366
+Personal consumption loans
+311,075
+8.8
+309,889
+10.1
+Personal business loans
+67.6
+INVESTMENT
+In RMB millions, except for percentages
+At 31 December 2014
+Item
+193,187
+3.9
+197,128
+4.4
+Other debt instruments
+33,893
+Investment in bonds related to restructuring
+0.6
+1.7
+Equity instruments and others
+234,196
+4.7
+164,677
+3.7
+74,768
+5,009,963
+90.2
+90.8
+Debt instruments
+Amount
+4,775,767
+At 31 December 2015
+Percentage
+(%)
+Amount
+3,996,664
+95.3
+Percentage
+(%)
+96.3
+Investment in bonds not related to
+restructuring
+4,548,687
+4,268,560
+2,243,337
+49.3
+2,370,831
+4.49%
+13,990
+Policy bank bonds 2011
+11 March 2018
+4.95%
+16,480
+Policy bank bonds 2008
+29 November 2017
+5.07%
+17,900
+Policy bank bonds 2007
+Maturity date
+Annual
+interest rate
+value
+Debt securities
+Nominal
+In RMB millions, except for percentages
+57.9
+Receivables(2)
+352,143
+7.0
+331,731
+7.5
+25 August 2018
+Total
+100.0
+4,433,237
+100.0
+Notes: (1) Include financial assets held for trading and financial assets designated at fair value through profit or loss.
+(2) Please refer to "Note 27. to the Financial Statements: Financial Investment".
+As at the end of 2015, the Group held RMB2,073,128 million of financial bonds', including RMB1,513,092 million of policy
+bank bonds and RMB560,036 million of bonds issued by banks and non-bank financial institutions, accounting for 73.0%
+and 27.0% of financial bonds, respectively.
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+5,009,963
+Policy bank bonds 2011
+11,395
+4.25%
+10,490
+3.94%
+Benchmark
+21 August 2019
+Policy bank bonds 2010
+10,450
+interest rate + 0.59%
+Policy bank bonds 2012
+25 February 2020
+loss
+Note: Benchmark interest rate refers to the interest rate on lump-sum deposit with 1-year maturity that is published by PBC on the first day
+of bond issuance and the value day of other years.
+1
+28
+Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bills.
+ICBC
+Impairment
+2,566,390
+22 February 2021
+10,505
+24 March 2018
+Policy bank bonds 2012
+11,300
+4.04%
+25 June 2022
+Policy bank bonds 2010
+4.62%
+11,050
+27 July 2020
+Policy bank bonds 2011
+10,740
+4.68%
+26 September 2016
+Policy bank bonds 2011
+3.51%
+57.3
+2,870,353
+Held-to-maturity investments(2)
+Percentage
+Item
+Amount
+(%)
+RMB-denominated bonds
+4,290,104
+Percentage
+94.3
+(%)
+96.3
+USD-denominated bonds
+176,607
+3.9
+98,593
+Amount
+3,847,713
+2.5
+At 31 December 2015
+In RMB millions, except for percentages
+59.3
+Over 5 years
+1,101,913
+24.2
+982,208
+24.6
+At 31 December 2014
+Total
+100.0
+3,996,664
+100.0
+Note: (1) Refers to impaired bonds.
+In terms of remaining maturity structure, bonds not related to restructuring within 1-year maturity increased by RMB559,797
+million from the end of the previous year and their percentage increased by 10.4 percentage points; and bonds not related
+to restructuring within 1 to 5-year maturity decreased by RMB127,494 million or 10.0 percentage points, mainly because the
+Bank moderately increased the investment in interbank CDs and ultra-short-term commercial paper within 1-year maturity
+and enhanced the liquidity of bonds in line with the market situation.
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY CURRENCY
+4,548,687
+Amount
+Other foreign currency bonds
+1.8
+Amount
+Percentage
+(%)
+Financial assets at fair value through
+profit or loss (1)
+343,272
+At 31 December 2014
+6.9
+7.8
+Available-for-sale financial assets (2)
+1,444,195
+28.8
+1,188,288
+26.8
+346,828
+81,976
+In RMB millions, except for percentages
+Amount
+50,358
+1.2
+Total
+4,548,687
+100.0
+3,996,664
+Percentage
+(%)
+100.0
+27
+Discussion and Analysis
+In terms of currency structure, RMB-denominated bonds rose by RMB442,391 million or 11.5%; USD-denominated bonds
+increased by an equivalent of RMB78,014 million or 79.1%, and other foreign currency bonds grew by an equivalent of
+RMB31,618 million or 62.8%. The Bank invested more in foreign currency bonds with relatively higher yield and successfully
+raised the earnings of investment portfolio during the reporting period.
+DISTRIBUTION OF INVESTMENT BY HOLDING PURPOSE
+Item
+At 31 December 2015
+Annual Report 2015
+Item
+Percentage
+At 31 December 2015
+36,254
+6.3
+42,305
+Overseas and others
+5.2
+32,715
+4.6
+30,897
+Northeastern China
+16.2
+102,591
+15.6
+104,258
+Western China
+13.2
+83,771
+12.6
+114,886
+18.1
+Pearl River Delta
+81,307
+12.2
+79,061
+5.6
+12.5
+131,004
+19.6
+114,660
+18.1
+Central China
+84,447
+Bohai Rim
+Total operating income
+668,733
+100.0
+At 31 December 2014
+Percentage
+(%)
+Amount
+11,026,331
+Percentage
+(%)
+280,654
+257,581
+In RMB millions, except for percentages
+Loans and advances to customers, net
+52.5
+10,768,750
+52.2
+Investment
+5,009,963
+22.5
+11,652,812
+17.6
+11,933,466
+At 31 December 2015
+634,858
+100.0
+Note: Please see "Note 54. to the Financial Statements: Segment Information" for the Bank's classification of geographic regions.
+Balance Sheet Analysis
+In 2015, the Bank timely adjusted its business strategy based on changes in external macroeconomic environment, improved
+the asset and liability structure, maintained coordinated development of deposit and loan business, strengthened liquidity
+management and interest rate pricing management and strived to enhance the efficiency of resource allocation for assets
+and liabilities. Taking development needs of the real economy into account, the Bank optimized the credit structure and
+balanced the loan growth in a steady manner. Closely monitoring the trends of the domestic and international financial
+markets, the Bank appropriately expanded its investment scale and optimized the structure of investment portfolios. It
+followed the fund position and the trend of price changes to expand lending on the premise of risk control. Furthermore,
+the Bank actively adopted measures to promote steady growth in due to customers, and managed to expand the low-cost
+liability business, thereby ensuring a stable and sustainable growth of funding sources.
+Annual Report 2015
+Amount
+23
+ASSETS DEPLOYMENT
+As at the end of 2015, total assets of the Bank amounted to RMB22,209,780 million, RMB1,599,827 million or 7.8% higher
+than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as "total
+loans") increased by RMB907,135 million or 8.2%, investment increased by RMB576,726 million or 13.0%, and cash and
+balances with central banks decreased by RMB463,989 million or 13.2%. In terms of structure, net loans and advances to
+customers accounted for 52.5% of total assets; investment accounted for 22.5%; and cash and balances with central banks
+accounted for 13.8%.
+ASSETS DEPLOYMENT
+Item
+Total loans and advances to customers
+Less: Allowance for impairment losses on
+loans
+Discussion and Analysis
+117,661
+Yangtze River Delta
+11.1
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+SUMMARY OPERATING SEGMENT INFORMATION
+Item
+Personal banking
+Treasury operations
+Others
+Segment Information
+Total operating income
+2015
+2014
+Percentage
+Percentage
+Amount
+(%)
+In RMB millions, except for percentages
+Amount
+Discussion and Analysis
+22
+33,933
+34,192
+(259)
+(0.8)
+Total
+220,835
+ICBC
+218,674
+1.0
+The Bank duly exercised strict cost management and continued to boost its operating efficiency. Operating expenses
+recorded at RMB220,835 million, RMB2, 161 million or 1.0% higher than that in 2014. Cost-to-income ratio declined by 1.24
+percentage points to 26.69%.
+Impairment Losses
+The Bank continued to strengthen credit risk prevention and control and maintained its capability in risk offsetting. It set
+aside allowance for impairment losses of RMB86,993 million, an increase of RMB30,264 million or 53.3% as compared
+to the previous year. Specifically, allowance for impairment losses on loans was RMB86,022 million, indicating a rise of
+RMB29,755 million or 52.9%. Please refer to "Note 26. to the Financial Statements: Loans and Advances to Customers"
+and "Note 15. to the Financial Statements: Impairment Losses on Assets Other than Loans and Advances to Customers" for
+details.
+Income Tax Expense
+Income tax expense was RMB85,515 million, RMB189 million or 0.2% higher than that of the previous year. The effective
+tax rate stood at 23.54%. Please see "Note 16. to the Financial Statements: Income Tax Expense" for the reconciliation of
+income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective income tax rate.
+2,161
+4,433,237
+(%)
+48.7
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+In RMB millions, except for percentages
+2015
+2014
+Percentage
+Item
+Please refer to the section headed "Discussion and Analysis - Business Overview" for the details on the development of
+each of these operating segments.
+Amount
+Amount
+Percentage
+(%)
+Head Office
+76,854
+11.5
+70,920
+(%)
+325,914
+100.0
+100.0
+308,651
+48.6
+244,969
+36.6
+237,070
+37.4
+634,858
+92,612
+84,476
+13.3
+5,238
+668,733
+0.9
+4,661
+0.7
+13.8
+84
+21.5
+13.8
+Item
+Percentage
+Percentage
+At 31 December 2014
+In RMB millions, except for percentages
+At 31 December 2015
+DISTRIBUTION OF CORPORATE LOANS BY PRODUCT LINE
+100.0
+7,612,592
+100.0
+7,869,552
+60.8
+4,630,167
+63.3
+4,983,604
+Medium to long-term corporate loans
+Total
+39.2
+In RMB millions, except for percentages
+At 31 December 2015
+At 31 December 2014
+Percentage
+Percentage
+Item
+Amount
+Amount
+Amount
+(%)
+Short-term corporate loans
+2,885,948
+36.7
+2,982,425
+(%)
+(%)
+Amount
+(%)
+6.1
+489,813
+6.4
+100.0
+7,612,592
+100.0
+478,804
+7,869,552
+Corporate loans rose by RMB256,960 million or 3.4% from the end of last year. In terms of maturity structure, short-term
+corporate loans reported at RMB2,885,948 million, representing 36.7% of all the corporate loans, while the figures for
+medium to long-term corporate loans were RMB4,983,604 million and 63.3%. In terms of product type, working capital
+loans were RMB43,667 million or 1.3% higher, with general working capital loans exclusive of trade finance increasing
+by RMB355,726 million or 14.6%, mainly because the Bank actively optimized the credit orientations and stepped up its
+support to superior enterprises for their working capital loan needs; project loans increased by RMB224,302 million or 6.0%,
+mainly due to the continuous support to national key programs and significant projects; and property loans declined by
+RMB11,009 million or 2.2%.
+Annual Report 2015
+25
+Discussion and Analysis
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+In RMB millions, except for percentages
+At 31 December 2014
+Discounted bills rose by RMB171,778 million or 49.0% compared with the end of last year, principally because the Bank
+moderately increased its supply of discounted bills to satisfy management needs of asset-liability portfolios.
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+Total
+48.8
+Working capital loans
+3,454,731
+43.9
+3,411,064
+44.8
+Including: Trade finance
+Property loans
+670,325
+982,384
+12.9
+Project loans
+3,936,017
+50.0
+3,711,715
+8.5
+100.0
+27.8
+3,063,465
+11,026,331
+20,609,953
+100.0
+Loan
+Composition of Loan
+Unit: RMB100 millions
+35,419
+100.0
+30,635
+5,221
+3,503
+1,483
+78,696
+76,126
+70,465
+27,276
+In 2015, the Bank attached importance to coordinating the use of
+incremental credit and existing credit, credit and non-credit financing
+services, to lend overriding support to the improvement of the quality and
+efficiency of the real economy, echoing the changes in macroeconomic
+environment and financial regulatory requirements. The Bank continued
+to bolster the government's construction of key programs and significant
+construction projects, and actively aligned with the national development
+strategies on the "four regions" (western regions, northeastern regions,
+eastern regions and central regions) and the "three supporting belts"
+(the "One Belt and One Road" initiative, the coordinated development
+of the Beijing-Tianjin-Hebei region and the development of the Yangtze
+River Economic Zone). In addition, it actively sought for innovation in the
+SME financial service model bundling offline specialized operation and
+online standardized operation, made greater effort to support the "Going
+Global" drive of Chinese-funded enterprises and took initiatives to back up
+the citizens' reasonable credit requirement and consumption upgrading.
+The Bank also took a two-pronged approach of adjusting credit structure
+and preventing and controlling risks. The loan growth was steady and balanced, while the structure of loan orientations was
+reasonable. As at the end of 2015, total loans amounted to RMB11,933,466 million, RMB907,135 million or 8.2% higher
+compared with the end of the previous year, of which, RMB-denominated loans of domestic branches were RMB10,598,036
+million, RMB880,812 million or 9.1% higher than that at the end of 2014.
+3.1
+3.6
+3,523,622
+17.1
+Reverse repurchase agreements
+Others
+Total assets
+683,793
+633,106
+3.1
+3.8
+996,333
+4.5
+468,462
+2.3
+807,246
+22,209,780
+782,776
+Cash and balances with central banks
+Due from banks and other financial
+institutions
+2013
+2015
+Personal loans
+Amount
+(%)
+7,869,552
+65.9
+7,612,592
+69.0
+(%)
+522,052
+350,274
+3.2
+3,541,862
+29.7
+11,933,466
+100.0
+4.4
+2014
+Corporate loans
+Amount
+Percentage
+Discounted bills
+24
+24
+ICBC
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Item
+Percentage
+Corporate loans
+Personal loans
+Total
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2014
+At 31 December 2015
+Discounted bills
+3,059,633
+9,508
+Postcode: 550003
+Email: bxgw@br.icbc.com.cn
+Tel: +5511-2395-6600
+Fax: +5511-2395-6600
+SWIFT: ICBKBRSP
+ICBC PERU BANK
+Address: Av.Juan de Arona 151,
+Oficina 202, San Isidro,
+Lima27, Perú
+Email: gongwen@pe.icbc.com.cn
+Tel: +51-16316801
+Fax: +51-16316803
+SWIFT: ICBKPEPL
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Address: 47 Price Drive, Constantia,
+Cape Town, South Africa,
+7806
+Email: icbc.africa@gmail.com
+Tel: +27-212008006
++27-0761837882
+Fax: +27-212008012
+296
+ICBC
+呂
+ICBC
+No.55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+中國北京市西城區復興門內大街55號
+wwww.icbc.com.cn, wwww.icbc-ltd.com
+郵編:100140
+Post Code: 100140
+Fax: 0771-5316617/2806043
+Tel: 0771-5316617
+Postcode: 530022
+Lima, 3477-Block B-6
+andar-SAO PAULO/SP-
+Brasil
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+Address: Av. Brigadeiro Faria
+SWIFT: ICBKARBA
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario, M5H
+2R2, Canada
+Email: info@icbk.ca
+Tel: +1416-366-5588
+Fax: +1416-607-2000
+SWIFT: ICBKCAT2
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma
+250, Piso 18, Col.
+Juarez, C.P.06600, Del.
+Cuauhtemoc, Mexico D.F.
+Email: info@icbc.com.mx
+Tel: +52-55-41253388
+SWIFT: ICBKMXMM
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Address: Blvd. Cecilia Grierson
+355, (C1107 CPG) Buenos
+Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-11-4820-9022
+Fax: +54-11-4820-1901
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Fax: 020-81308789
+Tel: 020-81308130/81308123
+Fax: 010-66410579
+Tel: 010-66410579
+Postcode: 100031
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+BEIJING MUNICIPAL BRANCH
+Tel: 0551-62869178/62868101
+Fax: 0551-62868077
+Postcode: 230001
+Hefei City, Anhui Province,
+China
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road,
+Domestic Institutions
+List of Domestic and Overseas Branches and Offices
+291
+Annual Report 2015
+2015 Ranking and Awards
+Top 10 Best Banking Employers for University Students
+Top 50 Best Employers for University Students
+ChinaHR
+eStar Best E-commerce Platform Award (ICBC Mall)
+eStar Best Mobile Banking Award
+Analysys
+Best Credit Card of the Year
+CHONGQING MUNICIPAL
+BRANCH
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+Postcode: 400060
+Tel: 023-62918002
+Postcode: 510120
+China
+Guangdong Province,
+Guangzhou City,
+Address: No. 123 Yanjiangxi Road,
+BRANCH
+GUANGDONG PROVINCIAL
+Fax: 0931-8435166
+Tel: 0931-8434172
+Postcode: 730030
+Fax: +1-212-993-7349
+SWIFT: ICBKUS33FIN
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+88087000
+Tel: 0591-88087810/88087819/
+Postcode: 350005
+Fuzhou City, Fujian
+Province, China
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Tel: 0411-82378888/82378000
+Fax: 0411-82808377
+Postcode: 116001
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+DALIAN BRANCH
+Fax: 023-62918059
+Fax: 0591-83353905/83347074
+Tel: +1-212-993-7300
+Email: info@icbkus.com
+Floor, New York, NY,
+10019, USA
+SWIFT: ICBKGB3L
+ICBC, New York Branch
+Address: 725 Fifth Avenue,
+20th Floor, New York,
+NY 10022, USA
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-212-8387799
+Fax: +1-212-8386688
+SWIFT: ICBKUS33
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong
+Email: enquiry@icbcasia.com
+Tel: +852 3510 8888
+Fax: +852 2805 1166
+SWIFT: UBHKHKHH
+ICBC International Holdings
+Limited
+Address: 37/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong
+Email: info@icbci.com.hk
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICBHHKHH
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau
+Email: icbc@mc.icbc.com.cn
+Fax: +44 20 7397 8890
+Email: admin@icbclondon.com
+Tel: +44 20 7397 8888
+Address: 81 King William Street,
+London EC4N 7BG, UK
+ICBC, London Branch
+(Al-Tijaria Tower),
+Floor 7, Al-Soor Street,
+Al-Morqab, Block3,
+Kuwait City, Kuwait
+Tel: 00965-22281777
+Fax: 00965-22281799
+SWIFT: ICBKKWKW
+ICBC, Sydney Branch
+Address: Level 1, 220 George
+Street, Sydney NSW 2000,
+Australia
+Email: info@icbc.com.au
+Tel: +612-94755588
+Fax: +612-92333982
+SWIFT: ICBKAU2S
+294
+Tel: +853-28555222
+ICBC
+ICBC, Luxembourg Branch
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-26866621
+Fax: +352-26866666
+SWIFT: ICBKLULL
+ICBC, Frankfurt Branch
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Email:icbc@icbc-ffm.de
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+List of Domestic and Overseas Branches and Offices
+Sina.com
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Centre, 50088 Kuala
+Lumpur, Malaysia
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email:
+londonmarketing@icbcstandard.com
+Tel: +44 203 145 5000
+Fax: +44 203 189 5000
+SWIFT: SBLLGB2L
+ICBC Turkey Bank Anonim Şirketi
+Address: Maslak Mah. Dereboyu,
+2 Caddesi No:13 34398
+Sariyer, ISTANBUL
+Email: gongwen@tr.icbc.com.cn
+Tel: +90 212 335 5162
+SWIFT: ICBKTRISXXX
+Annual Report 2015
+295
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 202 Canal Street,
+New York, NY 10013, USA
+Email: info@us.icbc.com.cn
+Tel: +1-212-238-8208
+Fax: +1-212-619-0315
+SWIFT: ICBKUS3N
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway, 28th
+Email: info@ms.icbc.com.cn
+Tel: +7-495 2873099
+Fax: +7-495 2873098
+SWIFT: ICBKRUMM
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Bank ICBC (joint stock company)
+Address: Building 29,
+Email: office@eu.icbc.com.cn
+Tel: +352-26866621
+Fax: +352-26866666
+SWIFT: ICBKLULU
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYK
+PT. Bank ICBC Indonesia
+Address: 32nd TCT ICBC Tower,
+JI. MH. Thamrin No.81,
+Jakarta Pusat 10310,
+Indonesia
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996010
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Address: 622 Emporium Tower
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan.050046
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 35, Menara Maxis,
+Kuala Lumpur City
+Email: office@kz.icbc.com.cn
+Tel: +7727-2377085
+Fax: +7727-2377070
+SWIFT: ICBKKZKX
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ2A
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11,188 Quay Street,
+Auckland 1010,
+Internet (Connections)
+E-banking Innovation Award: Best Practices in Financial
+China Internet Banking Union
+Award for Excellent Legal Risk Management in
+Chinese Banking Industry
+Outstanding Contribution Award in "The Month of Bank Card
+Internet Payment Security"
+China Foreign Exchange Trade System
+Best Agent of Foreign Institutions
+Best Market Maker
+Best Market Making Award
+Best Spot Market Making Award
+Best Forward Market Maker Award
+Best Trading Award
+Best Spot Trading Award
+Best Forward Trading Award
+Best Non-USD Trading Award
+Best Foreign Currency Pair Trading Award
+Most Popular Spot Market Maker
+Most Popular Forward Market Maker
+Excellent Market Maker Award of RUB Direct Trading
+Excellent Market Maker Award of MYR Direct Trading
+Excellent Market Maker Award of GBP Direct Trading
+Best Market Maker Award in Back-office Support
+Best Member Award
+Shanghai Clearing House
+Excellent Clearing Member
+Excellent Settlement Member
+Excellent Foreign Exchange Clearing Award
+Standard Services of the Chinese Banking Sector
+Best Effect Award for "Popularizing Financial Knowledge"
+Series in Chinese Banking Industry
+Outstanding Contribution Award in Civilized and
+Best Performance Award for Pension Service
+Best Growth Award for Pension Service
+Pension Sector Leader Award
+Best Transaction Award for Syndicated Loans
+Best Private Bank in China in Customer Experience
+21st Century Business Herald
+2015 Ranking and Awards
+MasterCard Worldwide
+Best Travelling Credit Card Issuer
+Award for Risk Monitoring Optimization
+Best Partner for Cross-border Transaction Business
+American Express
+Best Acquirer Service Partner
+Best High-end Product Service Award
+Excellent Bonds Net Clearing Award
+Best Business Card Product Partner
+Award for Most Influential Company
+Diners Club International
+Franchise Bank of the Year in Asia-Pacific
+DOMESTIC AWARDS
+PBC
+Second Award for Bank Technological Development
+China Banking Association
+Best Social Responsibility Financial Institution Award
+Best Green Finance Award in Social Responsibility of the Year
+Excellent Charity Project Award
+Best Performance Award for Syndicated Loans
+JCB
+Best Wealth Management Banking Brand
+Best Custodian Bank of China
+Most Cooperative Institution Award
+China Committee of Corporate Citizenship of China Association
+of Social Workers
+Excellent Corporate Citizen of China
+China Next Generation Education Foundation
+Excellent Fund Project Award
+China Counties and Towns Economic Exchange Organizing
+Committee of China Rural Bank Development Forum
+Asia-Pacific Finance Academy
+Internet-based Finance Product Innovation Award
+Award for Risk Control and Safety of Internet-based Finance
+Award for Excellent Internet-based Finance Platform
+CRM Committee of China Federation of Information
+Technology Promotion
+Best Customer Contact Center in China
+Chinese Foundation for Lifeline Express
+Bright Merit Award
+Financial Work Committee of Central Youth League Committee
+The National Financial Youth Union
+China Banking Association
+China Youth Development Foundation
+Best Social Responsibility Financial Institution Award
+China Financial Industry Call Center Development League
+Operation and Management Icon Team Award
+Calling-out Business Icon Team Award
+Annual Report 2015
+289
+2015 Ranking and Awards
+CCM World Group
+"Gold Headset" The Best Customer Center Selection and Award
+Top 500 Chinese Enterprises in Performing Social Responsibilities
+China Enterprise Evaluation Association
+Model of Transparency to the Public
+Social Responsibility Committee of The Chinese Institute of
+Business Administration
+National Interbank Funding Center
+The Most Influential Institution
+The Best Market Maker in Interbank Bond Market
+Shanghai Gold Exchange
+Excellent Financial Institution Member
+Award for Outstanding Contribution to Market
+Award for Outstanding Contribution to Enquiry Business
+Outstanding Commercial Bank in Leasing
+Shanghai Money Exposition
+Gold Award for Influential Brand of the Year
+Bankrate.com.cn
+China UnionPay
+Consumer Satisfaction Awards: Personal Loans Business
+Special Award for Merger and Acquisition
+Payment & Clearing Association of China
+Outstanding Organization Award in "The Month of Bank Card
+Internet Payment Security"
+China Call-Centre & CRM Association
+Best Call Center
+China International Financial Exhibition
+"Golden Tripod Award" Most Reputed Financial Brand of
+the Year: ICBC E-commerce Platform - ICBC Mall
+China Council for Brand Development
+Most Valuable Brand in China
+China Mergers & Acquisitions Association
+ICBC, Kuwait Branch
+Address: Building 2A
+China WTO Tribune
+China Comment
+Golden Bull Most Profitable Company
+China Securities Journal
+Most Responsible Enterprise
+China Newsweek
+Most Influential Enterprise Leader
+China Entrepreneur
+Brand Building Bank with Excellent Competitiveness
+State-owned Commercial Bank with Excellent
+Competitiveness Investment Banking with Excellent
+Competitiveness
+China Business Journal
+Innovative Product and Application Award
+China Electronics News
+Best Overseas Image Award among Chinese Banks in the "One
+Belt and One Road" countries
+China Report
+Best Cross-border Financing Bank
+Best Universal Bank in Investment Banking
+Securities Times
+China Securities Market "Excellent Contribution Dragon
+Tripod Award"
+Securities Daily
+Top Ten Innovative Internet-based Finance Products
+(Corporate Agency Trading Internet Banking)
+Top Ten Financial Product (Corporate Banking)
+(RMB Settlement Commodity Transaction)
+Top Ten Innovative Financial Products
+Top Ten Innovative Internet-based Finance Products
+(Connections)
+Golden Bull Best Board Secretary
+Wisemoney
+Bank Card Service Innovation Team
+21th Century Education Research Institute Financial Studies
+Center
+Lead the Chinese Advance-Best Mobile Banking Brand Award
+PBC School of Finance at Tsinghua University
+JRJ.com
+Outstanding Credit Card Brand
+Outstanding Chinese-funded Bank
+JRJ.com
+Excellent Internet-based Finance Brands in China
+Internet Finance Work Committee
+Excellence Award for Internet Banking of the Year
+Award for Internet Banking User Experience of the Year
+Excellence Award for Mobile Banking of the Year
+Hexun
+Top Ten Innovative Financial Products (Retail)
+Top Ten Influential New Media Accounts of Chinese
+Enterprises
+Best Payment Product
+Best Internet-based Finance Bank
+Best Comprehensive Bank
+Eastmoney.com
+ICBC
+290
+Award for Most Safe Mobile Banking in China
+Best E-banking in China
+China Financial Certification Authority
+Best Commercial Bank in Asia
+News Center of State-owned Assets Supervision and
+Administration Commission The Central Enterprise Media
+Alliance
+Golden Bee-Excellent Corporate Social Responsibility Report-
+Leader Enterprise
+Best Financial Brand Innovation Award
+The Chinese Banker
+Gold Financial Product in terms of Innovation-ICBC
+ICBC Mobile
+Best Mobile Bank of the Year
+of the Year-E Money Link
+of the Year-Treasury Bond Futures Arbitrage Product
+Gold Financial Product in terms of Liquidity
+Gold Financial Product in terms of Market Growth Potential
+Gold Credit Card Bank of the Year
+Gold Asset Management Bank of the Year
+Gold Private Bank of the Year
+Financial Money
+Innovative Bank in Internet-based finance
+China Times
+Golden Round Table Most Innovative Board Secretary
+Golden Round Table Award: Best Board
+Directors & Boards
+Internet-based Finance Innovation of the Year (ICBC Mall)
+Internationalized Bank of the Year
+CBN Corporate Social Responsibility Ranking in China:
+Excellent Enterprise Award
+CBN Financial Value Ranking 2015
+Most Innovative Enterprise
+China Business Network
+Most Reliable Banking Institution
+Cloud Quick Payment Credit Card
+Gold Financial Product in terms of Market Influence - ICBC
+Global Travel Credit Card
+Gold Financial Product in terms of Market Innovation
+of the Year — Paper Crude Oil
+Gold Financial Product in terms of Market Influence of the
+Year Foreign Exchange Trading of Currencies of the
+"One Belt and One Road” Countries and Emerging Markets
+Innovative Corporate Wealth Management
+Corporate Finance
+Best Global Cash Management Cases in the past decade
+CFO WORLD
+"Golden Interconnect" Award — Outstanding Application
+Platform Award
+Best Wealth Management Banking Product
+Best Asset Management Brand Award
+Shanghai Securities News
+First Place in the List of Chinese State-owned Listed Companies
+on Corporate Social Responsibilities
+Southern Weekly
+Best Financial Innovation Award
+Inclusive Finance List of China "Excellent Contribution Award"
+National Business Daily
+Best Innovative Cash Management Product Bank of the Year
+Trade Finance
+Best Bank of Social Contribution of the Year
+Most Respectable Enterprise in China
+The Economic Observer
+Top Ten Innovative Institution in Internet-based Finance
+Best Commercial Bank
+Institute of Finance and Banking, Chinese Academy of Social
+Sciences
+Financial News
+Best Private Bank in China
+Global Compact Network China
+Best Practice Award for Caring for Climate Change and
+Environment Protection
+Email: icbcseoul@kr.icbc.com.cn
+Tel: 023-85297704
+Fax: 023-85297709
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No.258 Chengnan West
+Road, Pinghu, Zhejiang Province
+Postcode: 314200
+Tel: 0573-85139616
+Fax: 0573-85139626
+Annual Report 2015
+293
+List of Domestic and Overseas Branches and Offices
+Overseas Institutions
+ICBC, Hong Kong Branch
+Address: 33/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong
+Email: icbchk@icbcasia.com
+Tel: +852 2588 1188
+Postcode: 402760
+Fax: +852 2878 7784
+SWIFT: ICBKHKHH
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+ICBC, Tokyo Branch
+Address: 2-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-0005,Japan
+Email: icbctokyo@icbc.co.jp
+Tel: +813-52232088
+Fax: +813-52198502
+SWIFT: ICBKJPJT
+ICBC, Seoul Branch
+Address: 16th Floor, Taepyeongno
+ICBC, Singapore Branch
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Address: No.1 Aokang Avenue,
+Bishan District, Chongqing
+Tel: 021-5879-2288
+China
+Postcode: 830002
+Tel: 0991-5981888
+Fax: 0991-2337527
+TIBET AUTONOMOUS REGION
+BRANCH
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+Postcode: 850000
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 650021
+Tel: 0871-63136172/63178888
+Fax: 0871-63134637
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Zhejiang Province, China
+Tel: 0571-87803888
+Fax: 0571-87808207
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 100033
+Tel: 010-66583333
+Fax: 010-66583158
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai
+Postcode: 200120
+Postcode: 310009
+Tel: +822-37886670
+Fax: +822-7553748
+SWIFT: ICBKKRSE
+Building 1, Dubai
+International Financial
+Center, Dubai, United
+Arab Emirates
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+ICBC, Karachi Branch
+Address: 15th & 16th Floor, Ocean
+Tower, G-3, Block-9,
+Scheme # 5, Main Clifton
+Road, Karachi, Pakistan.
+P.C:75600
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKAXXX
+ICBC, Mumbai Branch
+Address: Level 1, East Wing,
+Wockhardt Tower, C-2,
+G Block, Bandra Kurla
+Complex, Bandra (E),
+Mumbai-400 051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2233155999
+ICBC, Dubai (DIFC) Branch
+Address: Floor 5&6, Gate Village
+Fax: +91-2233155900
+ICBC, Yangon Branch
+Address: 459 Pyay Road, Kamayut
+Township, Yangon,
+Myanmar
+Tel: +95-12306306-8810,
+8830, 8821
+Fax: +95-12306305-8805, 8806
+SWIFT: ICBKMMMY
+ICBC, Riyadh Branch
+Address: T08A, Level 8, Al Faisaliah
+Tower, Riyadh 12212,
+Kingdom of Saudi Arabia
+P.O. Box 95
+Email: service@sa.icbc.com.cn
+Tel: +966-11-2899-800
+Fax: +966-11-2899-879
+SWIFT: ICBKSARI
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua North
+Road, Guiyang City,
+Guizhou Province, China
+SWIFT: ICBKINBBXXX
+Fax: +971-2-4998622
+SWIFT: ICBKAEAA
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-2-4998600
+United Arab Emirates
+ICBC, Busan Branch
+Address: 1st Floor, Samsung Fire &
+Marine Insurance Bldg.,
+#184, Jungang-daero,
+Dong-gu, Busan 601-728,
+Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +8251-4638868
+Fax: +8251-4636880
+SWIFT: ICBKKRSE
+ICBC, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Email: admin@vn.icbc.com.cn
+Tel: +84-462698888
+Fax: +84-462699800
+SWIFT: ICBKVNVN
+ICBC, Vientiane Branch
+Address: Asean Road, Home
+No.358, Unit12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+Email: icbcvte@la.icbc.com.cn
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+ICBC, Phnom Penh Branch
+Address: No. 15, Preah Norodom
+Boulevard, Phsar Thmey I,
+Duan Penh, Phnom Penh,
+Cambodia
+Email: icbckh@kh.icbc.com.cn
+Tel: +855-23955880
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+ICBC, Doha Branch
+Address: Level 20, Doha Tower,
+Al Corniche Street, West
+Bay, Doha, Qatar PO
+BOX11217
+Email: zhaowei@doh.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQAXXX
+ICBC, Abu Dhabi Branch
+Address: 9th floor & Mezzanine floor
+AKAR properties, Al
+Bateen Tower C6 Bainuna
+Street, Al Bateen Area,
+Abu Dhabi,
+Tianshan District,
+Urumuqi, Xinjiang
+Autonomous Region,
+Address: No. 231 Remin Road,
+Fax: 021-5879-2299
+Fax: 0592-5054663
+XINJIANG AUTONOMOUS
+REGION BRANCH
+Postcode: 210006
+Tel: 025-52858000
+Fax: 025-52858111
+JIANGXI PROVINCIAL BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Province, China
+Postcode: 330008
+Tel: 0791-6695117/6695018
+Fax: 0791-6695230
+LIAONING PROVINCIAL BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+Postcode: 110001
+Tel: 024-23491600
+Fax: 024-23491609
+INNER MONGOLIA
+AUTONOMOUS REGION BRANCH
+Address: No. 105 Xilin North Road,
+Huhehot City, Inner Mongolia
+Autonomous Region, China
+Postcode: 010050
+Tel: 0471-6940297
+Fax: 0471-6940096
+292
+ICBC
+List of Domestic and Overseas Branches and Offices
+NINGBO BRANCH
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+Postcode: 315010
+Tel: 0574-87361162
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+Fax: 0574-87361190
+Fax: 0431-88923808
+Postcode: 130022
+Tel: 0851-88620018/88620000
+Fax: 0851-85963911/8620017
+HAINAN PROVINCIAL BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Postcode: 570203
+Tel: 0898-65303138/65342829
+Fax: 0898-65303138
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Postcode: 050051
+Tel: 0311-66001999/66000001
+Fax: 0311-66001889/66000002
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Postcode: 450011
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+HEILONGJIANG PROVINCIAL
+BRANCH
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+China
+Postcode: 150010
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District,
+Wuhan City, Hubei
+Province, China
+Postcode: 430071
+Tel: 027-69908676/69908658
+Fax: 010-69908040
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Postcode: 410011
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+JILIN PROVINCIAL BRANCH
+Address: No. 9559 Renmin Avenue,
+Changchun City,
+Jilin Province, China
+Tel: 0431-89569073/89569712
+NINGXIA AUTONOMOUS
+South Road, Nanjing City,
+Jiangsu Province, China
+REGION BRANCH
+Pudong New District,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58885888
+Fax: 021-58886888
+SHENZHEN BRANCH
+Address: North Block Financial
+Center, No. 5055
+Shennan East Road,
+Luohu District, Shenzhen
+City, Guangdong Province,
+China
+Postcode: 518015
+Tel: 0755-82246400
+SHANGHAI MUNICIPAL BRANCH
+Address: No. 9 Pudong Avenue,
+Fax: 0755-82062761
+Sichuan Province, China
+Postcode: 610016
+Tel: 028-82866000
+Fax: 028-82866025
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Postcode: 300074
+Tel: 022-28400648
+Fax: 022-28400123/022-28400647
+XIAMEN BRANCH
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Postcode: 361012
+SICHUAN PROVINCIAL BRANCH
+Address: No. 35 Zongfu Road,
+Jinjiang District,
+Chengdu City,
+Fax: 029-87602999
+Tel: 0592-5292000
+Tel: 0532-85809988-621031
+Address: No. 901 Huanghe East
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region,
+China
+Postcode: 750002
+Tel: 0951-5029200
+Fax: 0951-5042348
+QINGDAO BRANCH
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+Postcode: 266071
+Tel: 029-87602608/87602630
+Fax: 0532-85814711
+QINGHAI PROVINCIAL BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Postcode: 810001
+Fax: 0971-6152326
+SHANDONG PROVINCIAL
+Tel: 0971-6169722/6146733
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+Postcode: 710004
+Xi'an City, Shaanxi
+Province, China
+Address: No. 395 Dongxin Street,
+SHAANXI PROVINCIAL BRANCH
+BRANCH
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Fax: 0531-87941749
+Tel: 0531-66681622
+Postcode: 250001
+Postcode: 030001
+◆ Debit Card Business
++
++
++
+In 2015, the Bank outperformed its peers in terms of number of credit cards issued, purchase volume and overdraft
+balance.
+Asset Custody Services
+Consumer Credit Finance Center was set up as an initiative to develop a new model of standardized, fully online and
+credit-based financial operation that seeks for collaboration between credit card and consumer credit loan, and to
+grant credit line on a dynamic and customized basis and monitor risks in a real-time fashion.
+Credit card installment business for vehicles and digital products were developed proactively. The Bank rolled out
+a slew of new businesses, including aggregated installment, customized installment and cash installment. The new
+aggregated installment enables cardholders to turn their purchases in the last statement wholly or partly to installment
+at one time.
+Greater efforts were made in promoting Chimelong Co-brand Credit Card, Global Travel Credit Card, airline travel
+card products and corporate card products. ICBC HCE Cloud Quick Pay Credit Card was released, making ICBC the
+first bank to issue cloud-based contactless products with Visa in Asia and with UnionPay in the world.
++
++
+The Bank was presented with the "Best Credit Card of the Year" prize by sina.com, the "Best Partner in 2015" and
+the "Best Payment Innovation Award in 2015" by Visa and the "Best High-end Product Service Award" by American
+Express.
+The Bank further ameliorated the debit card usage environment, improved the payment security and actively promoted
+the issuing of single chip debit cards and native cipher algorithm-based debit cards in synchronization with the
+enhancement of online and offline card use security.
+At the end of 2015, the Bank's stock wealth management products increased by 32.0% compared with the previous
+year end to RMB2,616,598 million, remaining the largest in the industry.
+The Bank built an inclusive commercial district for debit cards and launched a promotional event of debit cards called
+"Hui Ju MoneyLink Cards" across the country.
+36
+ICBC
+Discussion and Analysis
+Financial Asset Services
+Seizing the opportunities arising from customers' wealth increase and capital market growth, the Bank made efforts to
+establish a mega asset management business system across the whole value chain and enhance its specialized operating
+capabilities on the strength of the Group's asset management, custody, pension and precious metal businesses, and the
+functions of its comprehensive subsidiaries specialized in fund, insurance, leasing and investment banking. Thus, the Bank
+rendered diversified and integrated financial asset services for its customers.
+Wealth Management Services
++
++
+Wealth management products were further transformed to net-worth products with more reasonable maturity, the
+yields of which could better reflect the market status. With more efforts on product innovation, the Bank released
+"e-MoneyLink", "T-bond Futures", "CSI Medium Term Note", "Enjoy Credit Enhancement" and "Bo Gu Tong Li".
+The cross-border asset management allocation plans were tailor-made for customers, with a system mixing different
+cross-border asset management products (e.g. QDII, RQDII, QFII, RQFII and QFLP) incepted. In overseas and offshore
+markets, the Bank expanded the services for cross-border wealth management products in free trade zones, European
+UCITS fund and asset management of foreign central banks in order to enhance the global allocation and asset
+management capabilities.
+The Bank gave full play to the advantages of internet-based finance to provide wealth management service in
+innovative ways, e.g. selling wealth management products on ICBC Mobile and ICBC Mall, promoting wealth
+management product information on ICBC Link and WeChat. The year 2015 saw that the wealth management
+products sold through the Internet channels were valued at more than RMB2 trillion.
++
+The Bank rolled out many products featured innovative payment means of debit cards such as using E-cash. Such
+products consists of Small-value Payment Free of Password Debit Cards, 360eID Chip Card Pasting and Payment and
+Debit Cards' HCE Cloud Payment.
+4
+65,146
+◆ Credit Card Business
+63,684
+56,232
+13.3
+Credit cards
+10,891
+10,056
+8.3
+2015
+2014
+Growth rate (%)
+Purchase volume (in RMB100 millions)
+88,416
+74,915
+18.0
+Debit cards
+56,229
+15.9
+Credit cards
+23,270
+18,686
+24.5
+Average purchase volume per card (1)
+(in RMB yuan)
+12,578
+12,056
+4.3
+Note: (1) Average purchase volume per card = Purchase volume during the reporting period/Average monthly cards issued during the
+reporting period.
++
+4
+1,539,239
++
+(%)
+Amount
+15,556,601
+79.8
+16,281,939
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2014
+In RMB millions, except for percentages
+At 31 December 2015
+Total liabilities
+Others
+Debt securities issued
+Repurchase agreements
+Due to banks and other financial institutions
+Due to customers
+Item
+LIABILITIES
+As at the end of 2015, total liabilities of the Bank amounted to RMB20,409,261 million, RMB1,336,612 million or 7.0%
+higher than that at the end of the previous year.
+Liabilities
+Reverse repurchase agreements rose by RMB527,871 million or 112.7% compared with the end of last year to RMB996,333
+million, mainly because the Bank had relatively adequate RMB funds and rationally granted more lending on the premise of
+risk control in order to enhance the fund operating efficiency during the reporting period.
+Reverse Repurchase Agreements
+Cash and balances with central banks declined by RMB463,989 million or 13.2% compared with the end of last year to
+RMB3,059,633 million, mainly because PBC cut deposit reserve ratio for deposits of financial institutions.
+Cash and Balances with Central Banks
+Discussion and Analysis
+Debit cards
+81.6
++
+11.1
+38
+The Bank developed a sound asset custody product and service system and remained a market leader in respect
+of major custody products, e.g. securities investment funds, insurance, banking wealth management, enterprise
+annuities, special fund accounts and global asset custody.
+The Bank actively developed a global custody service network. ICBC (Asia), ICBC (USA), ICBC (Europe) and Singapore
+Branch, among other overseas institutions, provided cross-border custody services in the sectors of QDII, RQDII, QFII,
+RQFII and sovereign wealth funds of foreign governments for more than 150 domestic and overseas investment
+institutions.
+The Bank was recognized as the "Best Subcustodian Bank in China" by Global Finance.
+At the end of 2015, total net value of assets under the Bank's custody increased by 97.4% from the previous year end
+to RMB11.5 trillion.
+Pension Services
++
++
+The Bank actively exploited in such sectors as enterprise annuities, occupational annuities and welfare plans for
+enterprises and public institutions in tandem with the progress of China's old-age security system reform. With
+enhanced capabilities in trusteeship, the performance in the investment under the Bank's custody became better
+steadily. Besides, the Bank raised the operating efficiency of account management business to satisfy customers'
+personalized service requirements. The Bank's pension services won the "Best Performance Award for Pension Service"
+and the "Best Growth Award for Pension Service" from China Banking Association.
+At the end of 2015, the pension funds under the Bank's trusteeship amounted to RMB82.7 billion; the Bank managed
+15.23 million individual pension accounts, and the pension funds under the Bank's custody totaled RMB439.7 billion.
+The Bank led other banks in terms of the scale of enterprise annuity funds under the Bank's trusteeship, number of
+individual enterprise annuity accounts and enterprise annuity funds under the Bank's custody.
+Annual Report 2015
+37
+Discussion and Analysis
+Precious Metal Business
+To echo the changes in market demands, the Bank developed a variety of new brands on assorted themes and
+introduced a slew of products, e.g. Chinese Zodiac Coins and Panda Gold and Silver Coins, under agent sales. The
+Bank expanded the online channels, through which the flagship store "ICBC Gold Manager" witnessed substantial
+growth of sales, and it also piloted the direct distribution of logistics suiting to the characteristics of e-commerce.
+The Bank completed the construction of the warehouses for deliveries on the International Board of the Shanghai Gold
+Exchange in the China (Shanghai) Pilot Free Trade Zone and launched the clearing business of cross-border deliveries
+of precious metals. The Bank also strengthened cooperation with overseas institutions and enhanced the Bank's cross-
+border trading and service capabilities.
+The Bank became the winner of the "Best Precious Metal Trading Bank in China" from the Euromoney for the fourth
+time in a row.
+In 2015, the sum of precious metal business transactions was RMB1.25 trillion. The Bank cleared RMB388.4 billion on
+behalf of the Shanghai Gold Exchange, ranking No. 1.
+Franchise Treasury Business
++
+4
+The Bank expanded the coverage of foreign exchange settlement and sales outlets and enriched the convertible
+currencies. Foreign exchange transaction business in respect of the currencies of 80 emerging countries was launched
+for corporate clients. The Bank actively provided foreign currency interest/exchange rate hedging plans and products
+to key customers and innovatively developed the Non Delivery Forward (NDF) of currencies of emerging markets in
+Southeast Asia and South America. The volume of foreign exchange settlement and sales together with franchise
+foreign exchange trading stood at USD726,500 million. The Bank was named the "Best Foreign Exchange Provider" by
+Global Finance and the "Best FX Bank" by the FinanceAsia.
+The Bank continued to enrich the paper trading products and shaped a product system comprised of paper precious
+metals, foreign exchange, energy, base metals and agricultural products. "ICBC e-Investment" mobile terminal went
+alive, which expanded the online transaction channels. The above paper trading sized up 70.0% compared with the
+previous year to RMB324 billion. The corporate commodity trading offerings were further developed and coco trading
+were added.
+The Bank continued the issuance of counter-based innovative bonds and issued seven of this kind in 2015. It was the
+first bank to offer 24-hour trading of counter-based book-entry bonds. On behalf of offshore institutional customers,
+the Bank innovatively dealt with interbank CD investment and interbank CD and bond repurchase in free trade zones.
+Asset Securitization Business
++
+Z
+The Bank issued two tranches of credit assets backed securities on 10 February 2015 and 17 September 2015,
+respectively. Corporate loans were the underlying assets of this project in which the Bank served as originator and
+lending services provider.
+Besides, subsidiaries of the Bank, ICBC Leasing, ICBC (Argentina), and Chinese Merchantile Bank under ICBC (Asia),
+originated asset securitization products.
+ICBC
+12.5
+4
+74,575
+Total
+Over 5 years
+1 to 5 years
+3 to 12 months
+Less than 3 months
+Demand deposits(1)
+Remaining maturity
+DISTRIBUTION OF DUE TO CUSTOMERS BY REMAINING MATURITY
+Note: (1) Includes time deposits payable on demand.
+100.0
+100.0
+16,281,939
+Total
+3.7
+573,450
+3.5
+564,993
+Overseas and others
+15,556,601
+30
+ICBC
+In RMB millions, except for percentages
+3,361,635
+22.0
+3,574,017
+14.7
+2,290,971
+13.1
+2,133,439
+50.8
+7,908,683
+52.3
+8,515,746
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2015
+At 31 December 2014
+5.8
+901,068
+5.8
+938,199
+3,185,840
+Yangtze River Delta
+0.5
+76,972
+0.5
+74,081
+Head Office
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2014
+At 31 December 2015
+In RMB millions, except for percentages
+At 31 December 2015
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+19.5
+21.6
+3,078,463
+Pearl River Delta
+Northeastern China
+16.5
+2,572,310
+16.7
+2,717,941
+Western China
+14.1
+2,189,392
+14.6
+2,374,052
+Central China
+26.8
+26.6
+4,339,841
+Bohai Rim
+12.8
+2,001,180
+12.8
+2,086,992
+19.8
+Note: (1) Includes outward remittance and remittance payables.
+2,055,662
+1,958,020
++
+The Bank increased the number of micro and small enterprise banking centers to 154, thus boosting the growth and
+structural optimization of micro and small enterprise loans and also raising the business processing efficiency. The
+micro and small enterprise banking business was enlarged through supply chains, commercial districts and e-commerce
+platforms, etc.
+Proactively utilizing Internet and big data technologies, the Bank promoted online financing products for micro and
+small enterprises including "Online Revolving Loan", "Corporate Easy Loan", "eLoan", which enabled the financing
+for micro and small enterprises to be smaller in value but simple in procedures.
+At the end of December 2015, the balance of loans to micro and small enterprises stood at RMB1,883,208 million,
+representing an increase of 9.4% over the end of last year. The growth rate was faster than the average growth rate
+of domestic loans.
+The Bank was honored with the "Excellent SME Financial Service Team" by CBRC.
+LOANS TO DOMESTIC (MICRO), SMALL AND MEDIUM-SIZED ENTERPRISES
+3.0%
+Construction
++
+3.6%
+6.2%
+Real estate
+6.7%
+Water, environment and public
+utility management
+9.5%
+Leasing and commercial services
+10.7%
+Wholesale and retail
+Mining
++
+Small and Medium-Sized Enterprise Business
+Discussion and Analysis
+66,288
+Lodging and catering industry
+2.1%
+Science, education, culture
+1.8%
+and sanitation
+39,023
+H
+2013
+40,389
+Demand deposits
+2014
+41,348
+2015
+Time deposits
+39,294
+45,077
+Others
+2.8%
+34,646
+electricity, heat, gas and water
+11.3%
+Production and supply of
+Net cash outflows from investing activities amounted to RMB666,961 million, mainly due to the changes in bond investment.
+Specifically, cash inflows increased by RMB365,936 million to RMB1,382,654 million; and cash outflows increased by
+RMB886,156 million to RMB2,049,615 million.
+Net cash inflows from operating activities amounted to RMB1,131,764 million, mainly due to the decrease in cash and
+balances with central banks and the increase in cash inflows as a result of more deposits from banks and other financial
+institutions as compared to the previous year. Specifically, net cash outflows of operating assets fell by RMB419,598 million
+compared with last year and net cash inflows of operating liabilities rose by RMB491,710 million.
+Analysis on Statement of Cash Flows
+For details on off-balance sheet items, please refer to "Note 49. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 50. to the Financial Statements: Designated Funds and Loans".
+As at the end of 2015, shareholders' equity amounted to RMB1,800,519 million in aggregate, RMB263,215 million or
+17.1% higher than that at the end of the previous year. Equity attributable to equity holders of the parent company
+recorded an increase of RMB258,615 million or 16.9% to RMB1,789,474 million, which was mainly due to net profit
+realized and the non-public offering of domestic preference shares. Please refer to the "Financial Statements: Consolidated
+Statement of Changes in Equity" for details.
+Shareholders' Equity
+Due to banks and other financial institutions scored RMB2,265,860 million, up RMB726,621 million or 47.2% compared
+with the end of the previous year, mainly because of the third-party custody service expansion.
+Due to Banks and Other Financial Institutions
+In terms of the currency structure, the balance of RMB deposits amounted to RMB15,435,986 million, which accounted for
+94.8% of the total balance of due to customers, RMB637,110 million or 4.3% higher than that at the end of the previous
+year. The balance of foreign currency deposits was equivalent to RMB845,953 million, an increase of RMB88,228 million or
+11.6%.
+Discussion and Analysis
+100.0
+15,556,601
+100.0
+16,281,939
+0.3
+37,292
+0.0
+3,075
+12.6
+Net cash outflows from financing activities amounted to RMB36,732 million, of which, cash inflows were RMB161,537
+million, mainly due to the issuance of debt securities; and cash outflows were RMB 198,269 million, primarily resulting from
+the repayment of debt securities and the distribution of dividends.
+12.6
+Annual Report 2015
+Discussion and Analysis
+20.7%
+Transportation, storage and
+postal services
+21.6%
+Manufacturing
+Unit: RMB100 millions
+Growth of Corporate Deposits
+ICBC
+32
+Note: Domestic operations data.
+Breakdown of Corporate Loans by Industry
+At the end of 2015, the balance of corporate loans reached RMB7,869,552 million, representing an increase of
+RMB256,960 million or 3.4% over the end of the previous year. The balance of corporate deposits hit RMB8,437,014
+million, representing an increase of RMB399,881 million or 5.0%.
+The Bank strengthened financial services to the real economy for the development of key industries and key sectors.
+The Bank also continuously followed up on the national strategy of "four regions" and "three supporting belts”.
+Besides, it prioritized the support to the construction of major engineering projects, the infrastructure construction in
+key cities, the Made in China 2025 project, the modern services industry, the modern agriculture and the new-typed
+consumption.
+In line with the new changes in customer requirements and deposit business, the Bank exerted its advantages in
+providing diversified financial services such as corporate wealth management, cash management, E-banking, asset
+custody and cross-border RMB settlement, thereby scoring a stable growth of deposits.
++
+Corporate Deposits and Loans
+At the end of 2015, the Bank's corporate customers increased by 227 thousand over the end of the previous year to 5,321
+thousand. According to statistics from PBC, the Bank had the largest balance of both corporate loans and corporate deposits
+in the banking industry.
+The Bank actively responded to the complicated and changing economic and financial environment at home and abroad
+and took initiatives to be aligned with the overall requirements of China's economic structural restructuring, transformation
+and upgrading. Seizing the new opportunities arising from economic development under the new normal, it coordinated
+the use of incremental credit and existing credit, credit and non-credit financing, and thus timely and effectively supported
+enterprises' requirements for financing and diversified financial services. Actively adapting to the fast developing trend of
+direct financing, the Bank vigorously effected the transformation of corporate banking business and sped up the growth of
+bond underwriting, asset trading, syndicated loan, equity financing, entrusted loan and other businesses, aimed at bolstering
+the real economy's financing requirements through a variety of channels. To meet the diversified and individualized financial
+needs of customers, the Bank endeavored to provide tailor-made services and expand the base of small and medium-sized
+enterprise customers while at the same time lifting the marketing level and service capability for key customers. Leveraging
+on the global service network and the integrated platform at home and abroad, the Bank provided robust support to the
+"Going Global" projects of Chinese-funded enterprises and also enhanced its global service capabilities. The Bank was
+awarded the title of the "Best Corporate Bank in China" by Global Finance for six years in a row.
+Corporate Banking
+BUSINESS OVERVIEW
+31
+100.0
+4,163,766
+100.0
+The Bank improved people's livelihood related financial services and actively blazed new trails into interbank
+cooperation. The Bank kept on leading the market in the number of third-party custody customers and the amount of
+funds under custody for six straight years. The Bank ranked the first in the banking industry in terms of the amount
+of central finance and government business cards under agency service, the amount of payments from pooled social
+security funds, as well as the number of local government bonds for which it was the lead underwriter.
+The Bank was designated as one of the first banks to provide stock option settlement service and to work on the
+customs-treasury networking project. It was the first to launch the bond and foreign exchange agency clearing
+business system and the trans-regional traffic violation fines payment system, and also the first to try the national tax
+funds monitoring system and cover the entire operating process on a pilot basis.
+Settlement and Cash Management
+The Bank offered comprehensive cash management solutions to enterprises across account and information
+management, liquidity management, collection and payment management, short-term investment and financing and
+risk management. It innovatively launched new products such as "ICBC e Bill Payment" and cross-border cash pooling.
+The global cash management business was extended to over 70 countries and regions, and boasted more than 20
+products including global account management, collection and payment management and liquidity management. The
+Bank was able to purvey global cash management services relating to the centralized operation of cross-border RMB/
+foreign exchange fund, free trade zones and cross-border e-commerce.
+Annual Report 2015
+33
+Discussion and Analysis
+15,556,601
+At the end of 2015, the Bank maintained 6,397 thousand corporate settlement accounts, representing an increase of
+4.4% over the end of the previous year, and the volume of settlements reached RMB2,264 trillion, up 19.3% over the
+previous year. The Bank maintained its leading position in the business size. The Bank's cash management customers
+grew by 12.9% to 1,270 thousand and global cash management customers stood at 4,915, representing an increase
+of 12.4%.
+International Settlement and Trade Finance
++
++
+The Bank further sharpened the edges in cross-border remittance products by further optimizing the "ICBC Quick
+Remittance" product functions, and unveiled USD-denominated remittances under it.
+The global documents management system went alive in all of the overseas institutions, further enhancing the
+centralized and specialized processing level of documents and trade finance business.
+In 2015, domestic branches disbursed an aggregate of USD104 billion in international trade finance. International
+settlements registered USD2.6 trillion, of which USD950 billion were handled by overseas institutions.
+Investment Banking
++
++
+4
++
++
+Institutional Banking
+"Percentage" refers to the proportion against domestic branch loans.
+Amount
+(%)
+Loans to (micro), small and medium-sized enterprises
+4,738,830
+43.5
+Amount
+4,525,444
+(%)
+44.8
+Medium-sized enterprises
+2,855,622
+26.2
+2,803,904
+27.7
+Small and micro enterprises
+1,883,208
+17.3
+1,721,540
+17.1
+Notes: (1)
+(2) Small and micro enterprises loans include loans granted to small and micro enterprises, loans to privately or individually-owned
+businesses and loans to small and micro enterprise owners.
+Item
+Funds portfolio, industry fund and Public-Private-Partnership project capital fund, among other innovative equity
+financing products, were made debut officially, which enriched and improved the capital fund financing product system.
+The Bank also tried to enter into new sectors such as investments in the New Third Board, mergers and acquisitions of
+listed companies and market-linked fund and actively expanded the equity financing services in the capital market.
+With more efforts in transformation and upgrading of basic investment banking businesses, the Bank continuously
+enriched the service content and improved the service quality and expertise.
+2013
+2014
+2015
+At the end of 2015, the balance of the Bank's personal loans
+amounted to RMB3,541,862 million, representing an increase of
+RMB478,397 million or 15.6% from the end of the previous year.
+According to the PBC data, the Bank remained an industry leader in terms of personal loan balance.
+Private Banking
+2,265,860
+The Bank took an extra step to exploit the market potentials in key regions and of important branches, enhanced the
+professional service capabilities and rolled out the ICBC Family Wealth Management business.
+ICBC Private Banking Center (Middle East) commenced business, making the Bank the first Chinese-funded bank
+offering private banking business in the Middle East. Private banking service network was formed across 22 countries
+and regions and capable of offering individualized cross-border advisory and consultancy service for customers.
+Besides, the Bank issued the global wealth management fund of private banking in Singapore for the first time.
+The Bank was awarded the Best Private Bank in China by Global Finance, FinanceAsia, Asset and National Business
+Daily.
+At the end of 2015, the Bank managed RMB1.06 trillion assets for 62.4 thousand private banking customers. The
+managed assets increased by RMB325.9 billion or 44.3% compared with the previous year end and the customer size
+expanded by 19.3 thousand or 44.8%.
+Annual Report 2015
+35
+Discussion and Analysis
+Bank Card Business
+At the end of 2015, the Bank issued 750 million cards, representing an increment of 82.87 million from the end of the
+previous year. In 2015, bank card purchase volume increased by 18.0% compared with last year to RMB8,841.6 billion. Bank
+card business income rose by 7.3% to RMB37,684 million.
+Item
+At 31 December 2015 At 31 December 2014
+Growth rate (%)
+Issued bank cards (in 10 thousands)
+35,419
+The Bank actively promoted the cross-border buyout fund business and successfully participated in establishing the
+Overseas Buyout Industry Fund of China Oil and Food Import and Export Corporation, thereby further enriching the
+buyout product line. According to the Global M&A League Table: Thomson Reuters, the Bank ranked in the first place
+in terms of M&A deals per financial advisor in the Asia Pacific and China.
+27,276
+Unit: RMB100 millions
+The Bank actively expanded bond underwriting business and underwrote various debt financing instruments worth
+RMB1,152 billion as a lead manager throughout 2015. Besides, as the sole Chinese-funded bank appointed to be a
+global coordinator, the Bank assisted PBC in issuing central bank bills worth RMB5 billion in London for the first time.
+The Bank was awarded the "Best Bond House - Domestic" by The Asset and the "Best Bank for Commercial Paper/
+MTNS" by Global Finance.
+In 2015, the investment banking income reported RMB26,791 million.
+Personal Banking
+The mega retail strategy was advanced on a full scale. The Bank targeted at important customer groups, constantly
+expanded the base of basic customers and optimized the customer structure. In view of customer requirements, the
+Bank launched integrated innovation of all products including payment, deposit, financing, bank card, trading, insurance,
+investment and wealth management to enhance the customer viscidity. On the strength of the internet-based finance
+platform, the Bank strengthened the application and promotion of retail products and services and rolled out mobile
+financial products such as ICBC e Campus. It used the big data technology to excavate customer information, explored on
+establishment of a personal customer remote operation and maintenance team and pressed ahead with the transformation
+of precision marketing-centered marketing models. The Bank promoted the information integration and process optimization
+of personal customers in an in-depth way, accelerated the improvement of online and offline integrated service capabilities
+and continued to provide customers with better service experience. With premier comprehensive service capabilities and
+market competitiveness in the sector of retail banking, the Bank was awarded the "Best Consumer Bank in China" by Global
+Finance.
+34
+ICBC
+Discussion and Analysis
+At the end of 2015, personal financial assets totaled to RMB11.59 trillion, representing an increase of RMB1.09 trillion
+compared with the end of last year and making the Bank remain the largest holder of personal financial assets. Meanwhile,
+the Bank had 496 million personal customers, including 10.44 million personal loan customers, representing an increase of
+31.51 million and 0.80 million from the end of the previous year respectively.
+Personal Deposits
++
+The Bank targeted important customer groups and offered innovative personal deposit products. "Jie Jie Gao" was
+devised for individuals with average daily deposits above RMB10,000, "Salary Premium" was offered to customers
+under payroll payment agency and "Custody Express" was tailor-made for individual recipients of the third-party
+custody service. The Bank took the lead in the financial industry to market CDs for personal customers.
+At the end of 2015, the balance of the Bank's personal deposits amounted to RMB7,601,114 million, representing an
+increase of RMB412,507 million or 5.7% from the end of the previous year, of which, personal demand deposits and
+personal time deposits added by 7.5% and 4.4% respectively.
+Personal Loans
++
++
++
+The Bank made efforts to support the citizens' requirements of
+funding for owner-occupied houses. Capturing the favorable market
+opportunity that the property market rallied, it actively developed
+the residential mortgage business and optimized the pricing
+mechanism and business process. Therefore, residential mortgages
+went upwards at a fast speed.
+Availing of the opportunity from the upgrading of citizens'
+consumption structure, the Bank improved the product policy,
+strengthened innovation in Internet financing products and
+progressed the growth of new businesses such as comprehensive
+consumption loan mortgaged with personal house, self-service loan
+pledged with personal financial asset and personal online mortgage
+loan.
+Growth of Personal Loans
+30,635
+Percentage
+The Bank was awarded the "Most International Asian Cash Management Bank in Asia Pacific" and the "Best
+Counterparty Bank in China" by The Asian Banker, the "Best Treasury & Cash Management Bank in China" by Global
+Finance and the "Best Bank in China for Payments and Collections" by Treasury Management International.
+In RMB millions, except for percentages
+At 31 December 2014
+51.7
+8,037,133
+51.8
+8,437,014
+Subtotal
+26.6
+4,134,828
+27.7
+Personal deposits
+4,507,661
+25.1
+3,902,305
+24.1
+3,929,353
+Time deposits
+Corporate deposits
+(%)
+Percentage
+Demand deposits
+Time deposits
+Demand deposits
+Subtotal
+16,281,939
+2.1
+330,861
+1.5
+243,811
+46.2
+7,188,607
+46.7
+7,601,114
+20.3
+3,153,817
+Percentage
+3,390,514
+25.9
+4,034,790
+25.9
+4,210,600
+Total
+Other deposits (1)
+Amount
+At 31 December 2014
+20.8
+(%)
+Composition of Due to Customers
+Due to customers is the Bank's main source of funds. As at the end of
+2015, the balance of due to customers was RMB16,281,939 million,
+RMB725,338 million or 4.7% higher than that at the end of the previous
+year. In terms of customer structure, the balance of corporate deposits
+grew by RMB399,881 million or 5.0%; and the balance of personal
+deposits increased by RMB412,507 million or 5.7%. In terms of maturity
+structure, the balance of time deposits grew by RMB202,858 million or
+2.6%, while the balance of demand deposits increased by RMB609,530
+million or 8.4%.
+Due to Customers
+100.0
+19,072,649
+100.0
+6.9
+1,316,262
+5.9
+1,217,649
+20,409,261
+1.4
+279,590
+306,622
+2.0
+380,957
+1.7
+337,191
+8.1
+In RMB millions, except for percentages
+Unit: RMB100 millions
+2,438
+1.5
+2,215
+Amount
+Percentage
+3,309
+At 31 December 2015
+Item
+Discussion and Analysis
+29
+Annual Report 2015
+Other deposits
+Corporate deposits Personal deposits
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+2014
+2013
+75,035
+76,011
+80,371
+84,370
+2015
+71,886
+68,958
+Discussion and Analysis
+1
+(Hong Kong, China).
+2
+ICBC International
+Sydney Branch (Australia).
+ICBC (New Zealand)
+10
+(Hong Kong, China) -
+(New Zealand)-
+ICBC (Macau) (Macau, China) -- 23
+Europe
+ICBC (Almaty) (Kazakhstan)
+E
+3
+Hong Kong Branch
+Number of
+ICBC (Thai) (Thailand)
+23
+ICBC (Indonesia) (Indonesia) -
+5
+ICBC (Malaysia) (Malaysia)-
+institutions
+1
+Mumbai Branch (India) -
+ICBC (Asia) (Hong Kong, China) 72
+Hong Kong and Macau
+Number of
+institutions
+(South Africa)---
+Controlled Subsidiaries and Major Equity Participating Company
+(South Africa)
+22
+♦ Overseas Subsidiaries
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC (Asia) is a wholly owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD36,379
+million. It provides comprehensive commercial banking services and the major businesses include commercial credit, trade
+finance, investment service, retail banking, E-banking, custody, credit card, receiving bank services for IPOs and dividend
+distribution. At the end of 2015, ICBC (Asia) recorded total assets of USD94,679 million and net assets of USD9, 129 million
+respectively. It generated a net profit of USD875 million during the year.
+Investments in Standard Bank
+ICBC
+48
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD158.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) is the RMB clearing bank in North
+America and provides various corporate and retail banking services such as deposit, loan, settlement, remittance, trade
+finance, foreign exchange trading, funds clearing, cross-border RMB settlement, RMB currency notes, cash management,
+E-banking, bank card and investment and financing information consulting service. At the end of 2015, ICBC (Canada)
+recorded total assets of USD1,107 million and net assets of USD149 million. It generated a net profit of USD9.67 million
+during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers banking services including securities clearing,
+settlement and financing, accounting and transaction statement in European and American markets for institutional
+customers. At the end of 2015, ICBCFS recorded total assets of USD31,820 million and net assets of USD114.76 million. It
+generated a net profit of USD16.85 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD309 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2015, ICBC (USA) recorded total assets of USD1,714 million and net assets of USD314 million. It generated a net
+profit of USD3.48 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB2,310
+million. It mainly provides a full spectrum of corporate banking services including loan, settlement, trade finance, deposit,
+foreign currency exchange, franchise treasury business, global cash management, corporate financial consulting and
+financing arrangement in bond market, opening accounts in various currencies for financial institutions and handling inter-
+bank clearing, as well as remittance for natural persons without account. Bank ICBC (JSC) is RUB clearing bank for RMB
+trading against RUB on China Foreign Exchange Trade System, important market maker and RMB clearing bank for RMB
+trading against RUB on MICEX-RTS. At the end of 2015, Bank ICBC (JSC) recorded total assets of USD945 million and net
+assets of USD59.68 million. It generated a net profit of USD16.80 million during the year.
+BANK ICBC (JOINT STOCK COMPANY)
+ICBC (Europe), a wholly-owned subsidiary of the Bank, was incorporated in Luxembourg with a paid-up capital of EUR437
+million. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and Warsaw Branch are structured
+under ICBC (Europe), which mainly offers corporate and retail banking services such as deposit, withdrawal, remittance,
+settlement, loan, trade finance, capital, investment banking, custody, franchise wealth management. At the end of 2015,
+ICBC (Europe) recorded total assets of USD8,210 million and net assets of USD619 million. It generated a net profit of
+USD34.53 million during the year.
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital
+of USD200 million. It provides a full spectrum of banking services such as exchange and remittance, loan, trade finance,
+international settlement, funds clearing, agency and custody, etc. At the end of 2015, ICBC (London) recorded total assets of
+USD3,213 million and net assets of USD358 million. It generated a net profit of USD34.44 million during the year.
+ICBC (LONDON) PLC
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD60,377.7
+thousand. ICBC (New Zealand) provides corporate and personal banking services such as account management, transfer and
+remittance, international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the
+end of 2015, ICBC (New Zealand) recorded total assets of USD508 million and net assets of USD37 million.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+Discussion and Analysis
+ICBC INTERNATIONAL HOLDINGS LIMITED
+ICBC International, a wholly-owned subsidiary of the Bank as well as a full-licensed investment bank in Hong Kong, has a
+paid-up capital of HKD4,882 million. It mainly renders a variety of investment banking services, including listing sponsor
+and underwriting, equity financing, bond financing, securities brokerage and fund management. At the end of 2015, ICBC
+International recorded total assets of USD2,087 million and net assets of USD901 million respectively. It generated a net
+profit of USD99 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2015, ICBC (Macau) recorded total assets of USD24,039 million
+and net assets of USD2,120 million respectively. It generated a net profit of USD264 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR331 million,
+it is able to provide a full range of commercial banking services. At the end of 2015, ICBC (Malaysia) recorded total assets of
+USD949 million and net assets of USD96 million. It generated a net profit of USD6.60 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+PT. BANK ICBC INDONESIA
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a
+97.86% stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade
+finance, remittance, settlement, leasing and consulting. At the end of 2015, ICBC (Thai) recorded total assets of USD5,071
+million and net assets of USD682 million. It generated a net profit of USD37.09 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of KZT8,933
+million. It principally engages in commercial banking services such as deposit, loan, international settlement and trade
+finance, foreign currency exchange, guarantee, account management, Internet banking and bank card service, etc. At the
+end of 2015, ICBC (Almaty) recorded total assets of USD314 million, net assets of USD43.23 million and a net profit of
+USD5.88 million during the year.
+Annual Report 2015
+47
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR2.69 trillion, in which ICBC holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loan and trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the
+end of 2015, ICBC (Indonesia) recorded total assets of USD3,217 million and net assets of USD288 million. It generated a net
+profit of USD41.28 million during the year.
+(country/region)
+Luxembourg Branch
+African Representative Office
+ICBC
+44
+Leveraging on the growth of such investment and financing product lines as global financing, investment banking
+and financial leasing, the Bank supported the "Going Global" drive of Chinese-funded enterprises in the aspects of
+serving the "One Belt and One Road" initiative, the cooperation in international production capacity and the export
+of advantageous production capacity. A slew of global key product lines involving foreign exchange business, trade
+finance, financial markets, investment banking, asset management, private banking and cash management were
+developed in depth and breadth in a bid to sharpen competitive edges and influence on the international market. The
+cross-border e-commerce business was promoted on ICBC Mall. As a result, eight overseas pavilions were opened, and
+this platform saw a swift expansion in both the base and business scale of overseas E-banking customers.
+Comprehensive subsidiaries played a stronger role in terms of contributing to the Group's profit-making and exerting
+strategic synergistic effects. Capturing the good opportunity of the multi-level capital market improving, ICBC Credit
+Suisse Asset Management leveraged on its advantage as an all-around asset management platform and remarkably
+increased the assets under management, operating income and net profit by 62.2%, 95.2% and 155.3% respectively.
+ICBC Leasing carved out a niche in the international and Chinese markets as well as key industries and sectors, with
+total assets and net profit growing by 26.8% and 17.4% respectively, while asset size, operating income and gross
+profit maintaining the first place among peers. ICBC-AXA actively advanced the transformation of regular business
+resulting in its premium income increasing by 52.8% compared with the same period of last year while the business
+size and market position continued to ascend. As a licensed investment bank, ICBC International enhanced its
+profitability with net profit soaring by 136.7% through underwriting of offshore bonds issued by Chinese-funded
+enterprises and engaging in cross-border asset management.
+As at the end of 2015, the Bank established 404 institutions in 42 countries and regions and indirectly covered
+20 African countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking
+relationships with 1,611 overseas banking institutions in 147 countries and regions, making its service network
+covering six continents and important international financial centers around the world. In particular, the Bank
+maintained 123 institutions in 18 countries and regions along the "One Belt and One Road".
+Global network layout paralleled channel building in a steady way. Riyadh Branch, Yangon Branch and ICBC
+(Mexico) were established. The Bank acquired 60% shares of Standard Bank PLC, thus officially stepping into global
+commodities and money market trading business. In addition, the Bank also acquired 92.8169% shares of Tekstilbank,
+thereby becoming the first Chinese-funded bank that has established an operating institution in Turkey.
++
++
+The Bank steadily advanced internationalized and diversified operation and development, and stepped up its financial
+support to "Going Global" Chinese-funded enterprises, the "One Belt and One Road" construction and RMB
+internationalization.
+Internationalized and Diversified Operation
+Discussion and Analysis
+43
+Annual Report 2015
+The Bank attached importance to consumer protection during corporate culture construction and continued to raise all
+the employees' awareness and competence in this respect through well-targeted tiered and classified trainings.
+The Bank organized and launched a series of centralized financial knowledge promotions including "Popularising
+Financial Knowledge", "National Financial Education Campaign" and "Financial Literacy Education Month", and
+themed educational activities such as "3.15 Financial Consumer Publicity and Education Courses" and "Preventing and
+Countering Illegal Fundraisings". New media channels, e.g. official microblog, WeChat and wireless network platform
+of outlets, were employed to inform consumers of financial consumption knowledge and risk prevention tips.
+The customer complaints management mechanism was improved, thus the Bank could handle complained matters
+accepted through all the channels timely and properly, which enhanced the customers' satisfaction ratio of compliant
+handling. The Bank voluntarily recognized customer complaints as a precious resource for service enhancement.
+It actively searched for and solved own weaknesses through enhancing IT application to customer complaint
+management and its leanness.
+Discussion and Analysis
+The Bank embedded the principle of consumer protection into the corporate governance and business development
+strategies and also improved the consumer protection work mechanism. In strict accordance with the regulatory
+requirements on service charges, the Bank constantly normalized the product and service charge policy.
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+(in USD millions)
+of 2014
+of 2015
+2014
+2015
+of 2014
+118,110
+135,988
+Hong Kong and Macau
+of 2015
+Item
+At the end
+At the end
+At the end
+At the end
+Number of institutions
+(in USD millions)
+Assets
++
++
++
+90.2
+2013
+80.2
+2012
+75.1
+%
+Proportion of E-banking Business
+The Bank deepened the hierarchical marketing service mechanism
+The Bank also energetically promoted the open and intelligent
+reconstruction of personal online banking system. For example,
+wealth management products were distributed on a pilot basis
+through the B2C mall of ICBC Mall, the e-commerce sales mode was
+tentatively applied to provide internal and external customers of the
+Bank with one-stop transaction services, and the big data technology
+was utilized to recommend financial products and services suitable to
+customers' needs online.
+It drove ahead the development of mobile channels vigorously,
+with the launching of ICBC Mobile application and comprehensive
+upgrade of mobile banking. The Lean Six Sigma management project
+for mobile banking was carried out, and the services including
+service enabling, login assistance and after-sale service were enabled
+under mobile banking, to improve the customer experience.
++
++
++
++
+◆ The Bank accelerated the strategic layout of online channels and
+functional improvement.
+86.0
+2014
+2015
+Note: The proportion of E-banking business refers to the number of
+E-banking transactions against the total number of transactions
+of the Bank.
+Consumer Protection
+The outlet services were made more initiative and friendly. Personnel allocation to the post of lobby managers and
+marketing service management were strengthened, while the active identification of and guidance to customers were
+reinforced. The Bank raised the initiatives of frontline personnel and improved the customers' field service experience
+through supervision upon service standardization and guidance on service assessment.
+The service models were innovated to better customer experience. Referring to the internet-based finance thinking,
+the Bank continued to seek innovations in the service models and business processes of traditional outlets, made
+WIFI available in all the outlets and launched intelligence transformation of more than 3,000 outlets based on the
+combination of new-typed intelligent devices and outlets. The service efficiency and customer satisfaction degree of
+intelligent outlets were substantively enhanced, thus enabling the customers to enjoy good service experience.
+Deficiencies causing bad customer experience were corrected at the root of the problem. The Bank strengthened
+the service work committee mechanism and carried out big data analysis concerning customers' comments and
+feedback and satisfaction survey findings to identify such deficiencies. Then, their causes were analyzed case by case
+and improvement measures were taken through inter-departmental coordination. The Bank made greater efforts to
+simplify and optimize the service processes. For example, it streamlined all the ID related business processes one by
+one for minimization.
+4
+Under the theme of the "Service Experience Building Year", the Bank continued to deepen service improvement and
+enhance service level with a focus on ameliorating the customers' field service experience, multi-channel service experience
+and service request solving experience.
+Service Enhancement
+The Internet start-up mode was utilized to accelerate the pilot of channel two-dimensional code marketing
+project, and the LBS (location-based services) project was successfully implemented, to boost the integration and
+interconnectivity of outlets and online channels as well as real-time and collaborative marketing.
+1,543
+It built and enriched new channel entrances and realized full coverage of WIFI services in domestic outlets, so that the
+customers of the Bank and other banks can access to the Bank's financial products at these outlets.
+◆ The Bank advanced the development of a service system with integrated online and offline channels.
+Discussion and Analysis
+42
+ICBC
+The Bank won the "Best Internet Bank in China" from The Asian Banker.
+The E-banking transaction amount hit RMB592 trillion, an increase of 30% over the previous year; the number of
+E-banking transactions accounted for 90.2% of total transactions of the Bank, rising by 4.2 percentage points from
+the last year. At the end of 2015, personal and corporate E-banking users grew by 11.6% and 12.5% respectively.
+for E-banking customers, raised the coverage of bank-enterprise interlink services for Chinese enterprises among the
+Fortune 500 to 86%, and upgraded the electronic services for micro and small-sized businesses.
++
+1,374
+107
+106
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+Discussion and Analysis
+(ES)
+ICBC
+46
+45
+Annual Report 2015
+The Bank successfully nourished a product system comprised of cross-border RMB settlement and clearing, agency
+bond investment and foreign exchange trading, bond underwriting, RMB exchange/interest rate trading, offshore RMB
+loans, RQFII, asset management, asset custody and Shanghai-Hong Kong Stock Connect, among others. The cross-
+border use of RMB was exploited in depth in the branches of free trade zones and financial innovation pilot sites and
+overseas RMB clearing banks, alongside quicker innovation in cross-border RMB investment and financing business.
+In 2015, the cross-border RMB business volume reached RMB4.41 trillion, increasing by 20.6% over the previous year.
+The Bank made efforts to accelerate the cross-border RMB business. ICBC (Thai) and ICBC (Argentina) were
+successively authorized as the RMB clearing bank, thus increasing the number of the Bank's overseas RMB clearing
+banks with authorization from PBC to six. The Bank became the first Chinese-funded bank that is able to offer around-
+the-clock RMB clearing services in Asia, Europe, and the Americas.
+◆ Cross-border RMB Business
+As at the end of 2015, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD279,830 million, an increase of USD43,834 million or 18.6% from the
+end of the previous year, and they accounted for 8.2% of the Group's total assets, representing an increase of 1.1
+percentage points. Total loans amounted to USD144,060 million, rising by USD13,077 million or 10.0%, and total
+deposits were USD86,758 million, falling by USD5,691 million or 6.2%. Profit before tax during the reporting period
+was USD3,166 million, increasing by 4.7% compared with the previous year.
++
+The assets represent the balance of the Bank's investment in Standard Bank and the profit before tax represents the Bank's gain
+on investment recognized by the Bank during the reporting period.
+Note: (1)
+338
+-
+America
+Institution
+Number of
+1
+ICBC (Peru) (Peru)-
+Number of
+1
+ICBC (Brazil) (Brazil)
+ICBC (Argentina) (Argentina) --106
+10
+404
+ICBC (Canada) (Canada).
+ICBCFS (USA)
+13
+1
+institutions
+New York Branch (USA).
+(country/region)
+ICBC (USA) (USA)-
+1
+At the end of 2015, the Bank had 16,732 physical outlets, less than the end of last year; it maintained 29,043 self-
+service banking facilities, up 12.3% from the end of last year; the number of ATMs was 99,789, an increase of 8.1%,
+and the transaction volume reached RMB12,666.8 billion, expanding by 16.7%.
+3,023
+235,996
+78
+238
+58
+22,592
+56,089
+Europe
+82
+84
+689
+783
+62,457
+67,323
+Macau)
+(except Hong Kong and
+Asia-Pacific region
+16
+America
+55,853
+52,370
+279,830
+Total
+(23,838)
+(38,718)
+Eliminations
+1
+1
+3,166
+331
+4,305
+3,295
+Africa (1)
+133
+134
+391
+436
+346
+Institution
+The Bank continuously strengthened the development of self-service channels and reinforced the functional
+complementation and coordinated development of physical outlets.
+The reform on standardization of outlet operation was accomplished based on the concepts of standardized operation
+and lean management, and an all-around outlet operation and management system which can provide standards,
+criteria and bases for resource allocation, post setting and efficiency evaluation is to be built.
+ICBC Standard (UK)----
+10
+ICBC (Europe) (Luxembourg)-
+- 1
+Paris Branch (France) ---
+1
+Warsaw Branch (Poland).
+Madrid Branch (Spain)-
+Milan Branch (Italy)--
+1
+2
+2
+Amsterdam Branch
+(the Netherlands)-
+1
+Brussels Branch (Belgium).
+1
+1
+ICBC (London) (UK)--
+London Branch (UK)
+1
+Money Market Activities
+In 2015, the Bank flexibly arranged for the investment progress and focus, timely adjusted investment and trading strategies,
+and took different measures to increase the profitability of treasury operations in tandem with the financial market trends.
+Treasury Operations
+Widening the electronic distribution channels such as self-service terminals and Internet banking, the Bank saw a sharp
+rise in distributed property/life insurance products, and agency insurance business covered more medium and high-end
+customers. In 2015, the Bank sold RMB166.8 billion worth of insurance products on an agency basis, increasing by
+62.4%.
+By attracting new customers, enhancing refined management level, creating innovative fund marketing models,
+expanding electronic channels and fund product lines, the Bank increased the funds under agency sales to
+RMB1,037.9 billion.
+Agency Sales
+Discussion and Analysis
+institutions
+ICBC (Mexico) (Mexico)
+1
+Institution
+Number of
+(country/region)
+institutions
+(Luxembourg)
+Frankfurt Branch (Germany) -----5
+-2
+Bank ICBC (USC) (Russia)-
+ICBC Turkey (Turkey)-
+1
+Abu Dhabi Branch (UAE).
+1
+Riyadh Branch (Saudi Arabia)-
+1
+Dubai (DIFC) Branch (UAE)-
+1
+E
+Kuwait Branch (Kuwait)-
+1
+Karachi Branch (Pakistan)
+3
+Africa
+Institution
+(country/region)
+Doha Branch (Qatar)-------
+1
+Yangon Branch (Myanmar) -
+Phnom Penh Branch (Cambodia). -- 1
+48
+H
+Institution
+(country/region)
+Asia-Pacific Region (except
+Hong Kong and Macau)
+Singapore Branch (Singapore)-------- 9
+Tokyo Branch (Japan)-
++
+3
+3
+Busan Branch (South Korea)
+1
+Hanoi Branch (Vietnam) -
+1
+Vientiane Branch (Lao PDR).
+1
+Seoul Branch (South Korea):
+The Bank's liquidity remained appropriately ample overall. Based on the market situation and own capital position,
+the Bank appropriately increased RMB lending and rationally controlled borrowings. On the premise of risk control, it
+actively met the liquidity requirements of various institutions in the market and enhanced the fund use efficiency.
+The Bank made greater efforts to attract good-quality non-banking peers such as finance companies of large-sized
+enterprise groups and financial leasing companies to engage in interbank foreign-currency borrowing/lending.
+In 2015, domestic trading amount in the interbank market was RMB52.26 trillion, of which lending amounted to
+RMB50.36 trillion. The transaction volume in foreign exchange money markets recorded USD156.6 billion.
+Investment
+In respect of standardized small loan service with
+symmetrical information, the Bank utilized Internet
+and big data to establish the risk control models,
+improve the product and process, and realize
+self-service online operation, automatic business
+processing and accurate risk monitoring, which
+enhanced the customer experience.
+The Bank made innovation in the credit operating
+models, set up the Internet Financing Center and
+carried out the standardized operation of credit
+business.
+•
+•
+Financing Product Line
+of mobile banking, and led China's mobile financial
+market.
+market share,
+user viscosity and
+user base
+in terms of the
+topped the industry
+According to the public assessment results released by
+such Chinese authoritative data analysis agencies and
+media as Analysys, Talking Data and China Times, the
+Bank
+190 million.
+In 2015, users of ICBC Mobile application numbered to
+The customer experience was improved by the
+following means: launching of ICBC Mobile
+application, enabling the platform, customers
+and businesses to open, authorizing non-
+ICBC customers to register for ICBC Mobile,
+permitting customers to view all the businesses
+without login and providing "Intelligent
+Service" and "Life Benefits" functions.
+Product iterative R&D and product-use testings
+were organized, while market promotions, e.g.
+marketing toward fan groups, were carried out
+toimprove the brand image.
+•
+The Bank went all out to promote the construction
+of ICBC Mobile's open-ended network banking, by
+highlighting the open, intelligent and individualized
+concepts and comprehensively upgrading its brand,
+functions and services.
+At the end of 2015, online financing balance
+exceeded RMB500 billion. Easy Loan, an
+unsecured loan product based on the online &
+offline direct consumption of customers, had
+4.5 million customers and a balance of more
+than RMB210 billion.
+The online revolving loan product designed to address
+the short-term, frequent and urgent financing needs
+of micro and small-sized enterprises, has cumulatively
+provided loans of RMB340 billion in 2015.
+The Bank promoted the personal self-service
+pledge loan which accumulated to RMB 133.5
+billion in 2015, and established the Consumer
+Credit Finance Center to provide purely unsecured
+and entirely online personal consumption credit
+business without mortgage or guarantee.
+Payment Product Line
+•
+The Bank optimized the functions of its payment
+products, enriched the application scenarios and
+reinforced marketing toward important quality
+merchants. "ICBC e-Payment" featuring small
+amount and convenience saw its customers
+doubled compared with a year ago and the
+full-year transaction amount surpassed RMB
+210 billion.
+It optimized the internal functions of outlets to improve the overall utilization efficiency of service facilities and
+resources in the outlets. To explore and propel the construction of asset-light outlets including wealth management
+convenience stores, 1,082 asset-light outlets were reconstructed in 2015.
+It vigorously optimized the layout of physical outlets and relocated some outlets in old urban areas to emerging market
+areas such as development zones, high-tech zones, large new communities and urban complexes.
++
+4
+4
+4
+◆ The Bank energetically promoted structural adjustment of offline channels and transformation of business models.
+ICBC Mobile
+Channel Development
+Discussion and Analysis
+41
+Annual Report 2015
+The mobile terminal of "ICBC e Investment"
+went alive as an investment and trading platform
+for individual investors, and it dealt with many
+product lines such as paper precious metals
+and paper crude oil with a transaction amount
+exceeding RMB330 billion in 2015.
+Investment and Wealth
+Management Product Line
+The online POS cashier product had more than 10
+thousand merchants with a transaction amount
+above RMB 100 billion.
+The Bank further diversified the service items under
+"ICBC e Bill Payment" and developed remarkable
+leading advantages in a variety of sectors such as water,
+electricity and gas charges, communication expense,
+property management and heat supply fees, traffic fines
+and educational fee payment.
+Channel Development and Service Enhancement
+For the purpose of popularizing intelligent service mode of outlets, 3,121 outlets accumulatively completed
+intellectualized reconstruction in the year, in which, Shenzhen Branch was the first one to intellectualize all the outlets
+under its jurisdiction. The intelligent service mode has achieved remarkable results in the release of human resources,
+improvement of service efficiency and enhancement of customer experience.
+H
+Discussion and Analysis
+Finance
+Internet-based The Bank went all out to promote the upgrading and development of internet-based
+Discussion and Analysis
+39
+Annual Report 2015
+For details on the Bank's issuing of preference shares and tier-2 capital instruments, please refer to "Details of
+Changes in Share Capital and Shareholding of Substantial Shareholders - Details of Securities Issuance and Listing".
+For details on the Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements: 36. CDs;
+38. Debt Securities Issued".
+The Bank made innovations in the liability models. A variety of liability approaches, e.g. issuing CDs, were taken to
+boost the support of diversified liabilities to the growth of asset business.
++
+Financing
+In 2015, the transaction volume of RMB bonds and foreign currency bonds in trading book scored RMB588.9 billion
+and USD10.1 billion respectively.
+The Bank actively optimized the structure of foreign currency bond portfolio and increased the return on investment
+in foreign currency bonds. It steadily expanded the investment scale, mainly in the countries and regions with lower
+country risk exposures and raised the proportion of offshore USD-denominated bonds of premier Chinese institutions.
+In addition, it properly controlled the investment duration, hedged against the USD interest increase risk and
+strengthened bank operations to earn the spread income.
+In 2015, the yield on RMB bonds descended in general. Following the market trends, the Bank appropriately increased
+investment in RMB bonds in the first half year when the interest level was relatively high, increased the weight of
+premier credit bonds on the premise of risk control and steadily replaced existing low-yield bonds in order to enhance
+the return on investment in bonds.
++
++
+e-ICBC
+finance e-ICBC. An overall structure governing internet-based finance covering and linking
+through financial services, e-commerce and social life, which is underpinned by the
+e-commerce platform ICBC Mall, the instant communication platform ICBC Link, the open-
+ended online banking platform ICBC Mobile and Internet Financing Center, was established
+on the basis of finance, guided by innovation and using Internet. Thus, the Bank created
+new power to fuel the real economy's quality & efficiency enhancement and also new
+engine for propelling self-operation transformation with new business format and new
+ecology of a big bank. Riding on the three platforms and the new mechanism of internet-
+based finance marketing services, financing, payment, investment and wealth management
+product lines all grew quickly in 2015.
+ICBC Mall
+The e-commerce platform "ICBC Mall" helps the Bank
+to gather together customers and merchants, connect
+trading and financing, innovate in the new-typed customer
+relationships featuring the integration of finance and
+commerce, and improve the customer viscosity and activeness.
+In 2015, the Bank actively facilitated ICBC
+Link's function improvement, application
+and organization setup, as well as internal
+promotion and socialized marketing.
+•
+ICBC Link aims at becoming an interactive
+platform for instant information exchange,
+business consultancy, communication and
+sharing between the Bank and its customers,
+inside the Bank and among the customers,
+and developing a new financial service model
+featuring socialized finance and interactive
+marketing.
+ICBC Link
+ICBC
+40
+RMB 22 billion.
+53
+ICBC Mall joined hands with a
+lot of famous Chinese property
+developers in building the
+business pattern of "selecting
+houses online, applying for
+mortgages online and making
+payment online" and recorded
+a sales amount of over
+30 million
+and had more than
+RMB 800 billion
+an accumulative transaction
+amount of over
+In 2015, ICBC Mall achieved
+ICBC Mall probed into the new e-commerce model on the
+basis of bank-government cooperation by proceeding from
+tourism and agricultural products.
+The business coverage of ICBC Mall included B2C, B2B and
+B2G (enterprise and government procurement e-commerce
+platform), the goods and services available on it covered
+daily consumer goods, financial products, as well as property,
+tourism, auto, education and centralized procurement sectors.
+ICBC Mall launched eight overseas pavilions including Spain
+Pavilion and Canada Pavilion for the provision of cross-border
+e-commerce service.
+registered customers.
+Profit before tax
+48,522
+58
+1.72
+7,612,592
+69.0
+92,277
+1.21
+Discounted bills
+522,052
+4.4
+524
+0.10
+350,274
+3.2
+71
+0.02
+135,256
+Personal loans
+29.7
+43,738
+1.23
+3,063,465
+27.8
+32,149
+1.05
+Total
+11,933,466
+100.0
+179,518
+1.50
+11,026,331
+100.0
+3,541,862
+124,497
+65.9
+Corporate loans
+60,512
+0.51
+49,359
+0.45
+14,201
+0.12
+8,329
+0.08
+11,933,466
+100.00
+11,026,331
+100.00
+Loan quality remained stable overall. As at the end of 2015, according to the five-category classification, pass loans
+amounted to RMB11,233,456 million, representing an increase of RMB651,406 million from the end of the previous year
+and accounting for 94.14% of total loans. Special mention loans amounted to RMB520,492 million, representing an
+increase of RMB200,708 million and accounted for 4.36% of the total. NPLs amounted to RMB179,518 million, increased
+by RMB55,021 million, and NPL ratio was 1.50%. Under the new normal where economic growth slows down, structural
+adjustment deepens and industrial transformation accelerates, some industries and enterprises faced persistent challenges
+and enterprises suffered from capital chain tension, which led to worsening solvency of some enterprises. Hence, the Bank
+faced mounting pressure in controlling and preventing credit asset quality.
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+7,869,552
+At 31 December 2015
+At 31 December 2014
+Percentage
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+In RMB millions except for percentages
+1.13
+Non-performing corporate loans stood at RMB135,256 million, increasing by RMB42,979 million from the end of the
+previous year, and NPL ratio was 1.72%, which was mainly due to loan default by some enterprises as a result of operating
+difficulties in the face of greater macroeconomic downward pressure, economic structural adjustment and industry
+transformation and upgrading. Non-performing personal loans stood at RMB43,738 million, increased by RMB11,589
+million, and NPL ratio was 1.23%, which was mainly due to the increase in NPL amount of personal loans as a result of
+decrease of operating income or salaries of some borrowers.
+56
+1.42
+Machinery
+235,873
+3.4
+7,996
+3.39
+238,857
+3.5
+6,288
+2.63
+Metal processing
+171,065
+2.5
+7,138
+3,637
+4.17
+2.6
+4,819
+2.75
+Textiles and apparels
+140,369
+2.0
+6,644
+4.73
+139,117
+2.1
+4,181
+3.01
+Iron and steel
+113,841
+175,163
+3.8
+256,186
+3.37
+ICBC
+Discussion and Analysis
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+At 31 December 2015
+In RMB millions except for percentages
+At 31 December 2014
+Percentage
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+8,566
+3.7
+254,497
+Chemical industry
+2.33
+35,681
+0.60
+22.7
+3.43
+51,353
+21.6
+1,496,241
+Manufacturing
+(%)
+1,532,947
+66,809
+0.87
+104,805
+Human Resources Management
+In line with the strategic needs of bank-wide information-based, internationalized and diversified development, the Bank
+carried forward innovation in concepts, methodology, system and mechanism of the Group's human resources, reinforced
+compensation incentive and restraint, carried out the human resource deepening program in a comprehensive manner and
+expanded the career growth platform for employees. The Bank completed the organizational structure reform of branches
+and improved their establishment management system. What's more, it promoted the innovation and application of new
+organizational models characterized by flexibility and market-orientation, e.g. teams and project groups, dug out potentials
+inside the Group and further enhanced the human resource use efficiency. In alignment with the internet-based finance
+strategy, internet-based marketing center, Consumer Credit Finance Center, Internet Financing Center and ICBC Link Center
+were established at the Head Office, while internet-based finance marketing teams were organized at the branches, in a bid
+to ameliorate the whole bank's internet-based finance management framework.
+To address the bank-wide needs for quality and efficiency improvement, transformation and upgrading, the Bank deepened
+the development of its education and training system and quickened the building of ICBC College which is all-inclusive and
+multi-tiered with multiple channels. Besides, the Bank improved the employee training system by practicing the credit-based
+management of all-employee learning and establishing courses, credit standards and training and practice mechanism for all
+kinds of employees. In order to have a better qualification system, the Bank rolled out quality certification in the credit sector
+on a pilot basis, i.e. targeted business training and qualification for front, middle and back-office credit officers. The Bank
+stepped up training of professionals and solidly promoted key projects such as training at Party School, internationalized
+talents and capability enhancement of outlet heads. In 2015, the Bank organized 52 thousand sessions of training for 4.15
+million persons, averaged to approximately 11.4 days of training per person.
+The Bank continued to deepen corporate culture building. It released the incorruptible cultural concepts of "open and
+transparent, scrupulous in separating public from private interests, self-disciplined and disciplining others, equal importance
+to honesty and diligence" to guide the development of incorruptible culture. It strengthened praises and publicity in order
+to set typical examples and recommend persons with outstanding performance. It carried forward the spirit of Lei Feng
+in the new era, strictly and tangibly launched the selection of civilized units and promoted the cultivation and practice of
+socialist core values. Through a survey on the employees' ideological trends, the Bank performed a scientific assessment of
+their thoughts under the new normal. It also successfully staged the fourth "Touching ICBC" selection activity and deeply
+launched the education activity themed "Service Experience Building Year" to encourage the employees to play their
+dominant role and change the service concepts.
+Annual Report 2015
+51
+Discussion and Analysis
+RISK MANAGEMENT
+Enterprise Risk Management System
+Enterprise risk management is a process where the Board of Directors, the Senior Management and other employees of the
+Bank perform their respective duties and responsibilities to take effective control of all the risks at various business levels
+in order to provide reasonable guarantee to the achievement of objectives of the Bank. The principles of risk management
+include matching return with risk, internal check and balance with consideration as to efficiency, risk diversification,
+combination of quantitative and qualitative analysis, dynamic adaptability adjustments and gradual improvement, etc.
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Senior Management and its special committees, the Risk Management Department, the Internal Audit Department, etc. The
+risk management organizational structure is illustrated below:
+Senior Executive
+Vice Presidents
+Board of Directors
+In 2015, the Bank obtained 47 patents from the State Intellectual Property Office, and the total number of patents owned by
+the Bank increased to 404.
+President
+Credit Risk
+Internal Control &
+Compliance Department
+Risk Management Committee
+of the Board of Directors
+Risk Management
+Committee
+Asset & Liability
+Management Committee
+Chief Risk Officer
+Operational Risk
+Risk Management
+Department
+Market Risk
+Asset & Liability
+Management Department
+Liquidity Risk
+Management of Branches
+At the level of branches
+At the level of Head Office
+Credit and Investment
+Management Department
+The Bank continued to improve the continuous operating capability of information system services and the development
+level of infrastructure, in addition to strengthened construction of the information safety prevention system. Based on
+the architecture of "three centers in two places", operations were put under integrated management, enabling them to
+be mutually taken over. The information safety protection system covering the Group-wide hardware and software was
+improved, which was capable of taking centralized management concerning real-time monitoring, treatment and safety
+analysis of various outside attacks. The Bank was the first Chinese bank to use the quantum communication technology,
+and it also completed the change of native cipher algorithm in financial IC card and mobile payment system, electronic
+authentication system and personal Internet banking system.
+The Bank created new ways of doing business on all fronts. It built a product R&D and market promotion mechanism
+meeting the characteristics of internet-based finance and established a unified, efficient system application platform. Under
+the Internet Financing Center, the Bank developed an online financing product system and made debut the self-service
+pledge loan for individuals, among other innovative products. Besides, the optimization and transformation of operational
+procedures for outlets' composite services at counter were continued. More efforts were made in R&D of anti-fraud
+functions concerning such specialized transactions as credit card and E-banking. The Bank improved the financial services
+in people's livelihood sectors, for instance, it expanded the functions of bank-hospital cooperative business. Furthermore,
+the Bank advanced the system building in respect of international and diversified operations with FOVA smoothly rolled out
+in ICBC (USA), the overall switch from FOVA's host system to the platform-based core system in Bank ICBC (JSC) and the
+development of new-generation core insurance business system for individuals in ICBC-AXA.
+Discussion and Analysis
+Discussion and Analysis
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Argentina), a controlled subsidiary of the Bank in Argentina, has a share capital of ARS1,345 million, in which the
+Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) specializes in deposit, loan,
+settlement and remittance, trade finance, foreign exchange trading, capital settlement, financial market, offshore finance,
+cash management, investment banking, cross-border loan, E-banking, credit card, retail banking and small and medium-
+sized enterprise business, etc. At the end of 2015, ICBC (Argentina) recorded total assets of USD4,475 million and net assets
+of USD534 million respectively. It generated a net profit of USD168 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+ICBC (Brasil), a subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million, in which the Bank holds a 99.99%
+stake. ICBC (Brasil) offers commercial banking and investment banking services such as deposit, loan, trade finance,
+international settlement, fund transaction, franchise wealth management and financial advisory. At the end of 2015, ICBC
+(Brasil) recorded total assets of USD241 million and net assets of USD52.96 million. It generated a net profit of USD2.42
+million during the year.
+ICBC PERU BANK
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD50.00 million. Holding a full-
+functional commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement,
+trade finance, foreign exchange trading, offshore finance, E-banking and other services. At the end of 2015, ICBC (Peru)
+recorded total assets of USD146 million and net assets of 29.56 million.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN664 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) is a member of Asociacion de bancos de Mexico and is now going
+through the pre-opening inspections by Mexican regulators. In the initial stage of operation, it intends to provide corporate
+deposit, loan, international settlement, trade finance and foreign exchange trading services. At the end of 2015, ICBC
+(Mexico) recorded total assets of USD36.93 million and net assets of USD36.42 million.
+ICBC TURKEY BANK Anonim Şirketi
+ICBC (Turkey), the first Chinese commercial bank in Turkey, holds commercial banking, investment banking and asset
+management licenses, with a share capital of TRY420 million. The Bank holds 92.8169% of its total stake. It provides
+corporate customers with a basket of local and foreign currency-denominated financial services including RMB deposit, RMB
+loan, project lending, syndicated loan, trade finance, small and medium-sized enterprise loan, investment and financing
+advisory, and renders personal customers with versatile local and foreign currency-denominated financial services such as
+RMB deposit, remittance, personal consumption loan, residential mortgages and credit card business. At the end of 2015,
+ICBC (Turkey) recorded total assets of USD2,274 million and net assets of USD205 million.
+ICBC STANDARD BANK PLC
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million, in
+which the Bank holds an 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses
+covering base metals, precious metals, bulk commodities and energy and global financial markets services such as foreign
+exchange, interest rate, unsecured products and equities. With its headquarters in London as the major business entity, ICBC
+Standard Bank has ICBC Standard Resources (China) Ltd., ICBC Standard NY Holdings Inc., ICBC Standard Securities Inc. and
+ICBC Standard Resources (America) Inc, as well as four branches in Singapore, Tokyo, Hong Kong and Dubai, and Shanghai
+Representative Office under it. At the end of 2015, ICBC Standard Bank recorded total assets of USD20,121 million and net
+assets of USD1,093 million.
+Annual Report 2015
+49
+Discussion and Analysis
+◆ Major Domestic Subsidiaries
+ICBC
+50
+The Bank carried forward the transformation of IT architecture. Fully capitalizing on such new technologies as cloud
+computing and big data processing, the Bank established a new information technology framework that meets future
+business growth requirement, and also set up a slew of technical architectures including API open platform, streaming data
+processing platform and infrastructure cloud platform.
+The Bank deepened and expanded the application of big data technology, promoted the unified management and
+application service of data warehouse and the Group's database, continued to diversify the basis of data warehouse for
+structural data and database for non-structural data, which improved the data standards and quality. It strengthened the
+capability of value-added data application, established an analyst platform and reinforced data mining and analysis in some
+crucial business fields, e.g. customer service, precision marketing and risk prevention and control.
+IT-based Banking Development
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.08% ordinary shares of Standard Bank. In 2015, ICBC
+and Standard Bank entered into a Five-year Action Framework for Promoting the Comprehensive Strategic Partnership,
+thereby ushering the bilateral strategic cooperation into a new stage. At the end of 2015, Standard Bank recorded total
+assets of ZAR1,979,349 million and net assets of ZAR178,908 million. It generated a net profit of ZAR23,754 million during
+the year.
+Risk Management
+Departments of Branches
+STANDARD BANK GROUP LIMITED
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB8,705 million, in which the Bank holds a 60% stake. It
+engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and re-insurance
+of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the State, and other
+businesses approved by CIRC. At the end of 2015, ICBC-AXA recorded total assets of RMB66,568 million and net assets of
+RMB10,176 million respectively. It generated a net profit of RMB450 million during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB11.0 billion. It mainly engages in financial
+leasing of large-scale equipment in key fields such as aviation, shipping, energy and power, rail transit and equipment
+manufacturing and provides a variety of financial and industrial services including rental assignment, investment funds,
+securitization of investment assets, assets transactions and management. It has become a financial leasing company with the
+strongest comprehensive strength in China. At the end of 2015, ICBC Leasing recorded total assets of RMB298.7 billion and
+net assets of RMB22.5 billion respectively. It generated a net profit of RMB3,304 million during the year.
+ICBC FINANCIAL LEASING CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the Bank
+holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other businesses
+as approved by the CSRC, and owns many business qualifications including public fund, QDII, enterprise annuity, specific
+asset management, domestic and overseas investment manager of social security fund, RQFII, insurance asset management
+and special asset management. It is one of the fund companies with "full-qualification" in the industry. ICBC Credit
+Suisse Asset Management (International) and ICBC Credit Suisse Investment are structured under ICBC Credit Suisse Asset
+Management. At the end of 2015, ICBC Credit Suisse Asset Management managed a total of 74 public funds and over 170
+enterprise annuities and special account portfolios, and the size of the assets under management amounted to over RMB950
+billion, recorded total assets of RMB3,942 million and net assets of RMB2,839 million. It generated a net profit of RMB1,290
+million during the year.
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+◆ Majority Equity Participation Company
+1.6
+Primary reporting line
+Secondary reporting line
+In 2015, the Bank further improved the enterprise risk management system, pushed ahead with the implementation of
+regulatory requirements on systemically important banks, and continuously improved risk management technologies and
+methods. The level of its enterprise risk management was further enhanced. It reinforced consolidated risk management at
+the Group level, with the focus on risk management of non-banking subsidiaries, reinforced country risk management and
+strengthened country risk monitoring and limit management of key countries and regions. It also enhanced the market risk
+management through proactively classifying the market risk management of overseas institutions, carrying out standard
+product control and bolstering market risk management of asset management business. Additionally, it propelled the
+implementation of advanced capital management approaches, improved the measurement system concerning credit risk,
+market risk and operational risk and continued to promote monitoring, validation and management application of the risk
+measurement system.
+Discussion and Analysis
+Credit Risk Analysis
+By the end of 2015, the Bank's maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements was RMB23,952,537 million, up by RMB1,511,816 million from the end of the previous year. Please refer to
+"Note 55.(a)(i) Details of the Bank's Maximum Exposure to Credit Risk Without Taking Account of Any Collateral and Other
+Credit Enhancements". For mitigated risk exposures of credit risk asset portfolio of the Bank, please refer to "Credit Risk" of
+the 2015 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited.
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Item
+Pass
+Special mention
+NPLs
+Substandard
+Doubtful
+Loss
+Total
+In RMB millions except for percentages
+At 31 December 2014
+55
+At 31 December 2015
+Percentage
+(%)
+11,233,456
+94.14
+Amount
+10,582,050
+Percentage
+(%)
+95.97
+520,492
+4.36
+319,784
+2.90
+179,518
+1.50
+124,497
+1.13
+Amount
+Annual Report 2015
+In 2015, the Bank upgraded and improved its financial asset service policies and rules and kept enhancing the risk
+management level of financial asset service business. In particular, it formulated the measures for the management of the
+agency investment business with the focus on operation monitoring, duration management and other links of the non-
+standardized agency investment business, and strengthened process management of innovative businesses including industry
+funds and mergers and acquisitions investments. It also continued to manage partner institutions of the agency investment
+business and exercised strict access conditions and limit requirements for the partner institutions. In addition, the system
+construction for the financial asset service business was progressed in an orderly manner and the system-based full-flow
+management of the agency investment business was reinforced.
+The Bank's financial asset service business is exposed to risks mainly as a result of credit risk of financing customers,
+management risk of partner institutions and market risk of price fluctuation of underlying assets. The Bank took various
+risk management measures in the financial asset service business. The Bank implemented measures to manage access of
+capital according to different business nature of financial asset business and risk management requirements, performed
+access approval process in terms of investment customers, financing customers, partner institutions, new business types, new
+products and domestic and overseas affiliates of financial asset service business according to applicable access standards,
+included business authorization into unified authorization management of the Bank, and established risk limit management
+system.
+52
+ICBC
+he level of
+Credit Risk
+Discussion and Analysis
+Credit Risk Management
+The Bank is primarily exposed to credit risk. Credit risk is the risk that loss is caused to banking business when the borrower
+or counterparty fails to meet its contractual obligations. The Bank's credit risks mainly originate from loans, treasury
+operations (including due from banks, placements with banks, reverse repurchase agreements, corporate bonds and financial
+bonds investment), receivables and off-balance sheet credit business (including guarantees, commitments and financial
+derivatives trading).
+The Bank strictly adheres to the guidance from CBRC regarding credit risk management and other regulatory requirements,
+diligently fulfills established strategies and objectives under the leadership of the Board of Directors and the Senior
+Management, and implements an independent, centralized and vertical credit risk management mode. The Board of
+Directors assumes the ultimate responsibility for the effectiveness of the implementation and monitoring of credit risk
+management. The Senior Management is responsible for executing the strategies, overall policy and system regarding credit
+risk management approved by the Board of Directors. The Credit Risk Management Committee of the Senior Management
+is the reviewing and decision-making organ of the Bank in respect of credit risk management, is responsible for reviewing
+material and important affairs of credit risk management, and performs its duty in accordance with the Working Regulations
+for the Credit Risk Management Committee. The credit risk management departments at different levels undertake the
+responsibility of coordinating credit risk management at respective levels, and the business departments play their roles in
+implementing credit risk management policies and standards in respective business areas.
+The Bank's credit risk management has the following characteristics: (1) standardized credit management processes are
+implemented throughout the Bank; (2) the principles and processes of risk management focus on the entire process of credit
+business, covering customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and post-
+lending monitoring; (3) special organization is set up to supervise the entire process of credit business; (4) the qualification
+of the employees who are responsible for credit review and approval is strictly reviewed; and (5) a series of information
+management systems are designed to reinforce monitoring on the risks.
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months for which the lender is in default, anticipated loss
+rate, credit rating, collaterals and other quantitative and qualitative factors.
+In 2015, based on the macroeconomic changes and industrial development trend, the Bank concentrated its efforts in credit
+risk prevention and control while providing financial support to enhance quality and effectiveness of the real economy. The
+credit management procedures, business qualifications and responsibility mechanism were optimized in an all-round manner,
+with the objective of adapting to the new normal. The big data credit risk monitoring system was improved and more efforts
+were devoted to screening, consultation, reinforcement and mitigation of potential risks. The credit management philosophy
+and mode were innovated to accelerate the building of a sound internet-based credit business management system
+centering on the e-ICBC development strategy. Management of credit asset quality was strengthened, and special disposal
+team was established, leading to effective NPL collection and disposal. As a result, credit asset quality on the whole remained
+stable.
+◆ Credit Risk Management of Corporate Loans
+The Bank continued to strengthen the formation of the credit rule framework and improve credit system. The Bank
+established a globally uniform credit management system at the Group's level by integrating domestic and overseas rating
+and credit systems. It revised the measures regarding the collateral management for corporate credit business and improved
+the collateral management mechanism. It formulated the measures for evaluating project loans and established norms for
+the management of medium and long-term project loan evaluation at the Group's level.
+Annual Report 2015
+53
+Discussion and Analysis
+ICBC
+♦ Risk Management of Financial Asset Service Business
+The Bank's treasury operations are exposed to credit risk mainly as a result of bonds investment and trading, interbank
+offering, bills with reverse repurchase agreements and RMB bonds borrowing. The RMB bonds investment portfolio
+mainly included bonds issued by the Chinese government and other domestic issuers. The foreign currency debt securities
+investment portfolio mainly included investment-rated bonds. Most of the counterparties of RMB bonds borrowing business
+were financial peers with good asset quality. Credit risk management measures adopted by the Bank in relation to treasury
+operations mainly comprised defining customers' entry criteria, controlling credit limit, controlling investment limit (scale),
+strict margin management, rating management and controlling authorization limit for single transactions. The Bank set
+financing limits for each interbank offering and adopted the principle of management for both credit and authorization.
+In 2015, the Bank continued to strengthen credit risk management of treasury operations. It further improved the risk
+monitoring and analysis mechanism for treasury operations, proactively optimized the structure of bonds investment
+portfolios based on international and domestic financial market trends, and maintained investments in high-quality credit
+bonds, thus effectively reducing credit risk of bonds investment portfolios.
+◆ Credit Risk Management of Treasury Operations
+The Bank improved credit-granting system to promote accurate credit-granting for card members and built a standardized
+personal loan credit-granting system. It formed the system for dynamic credit line management of credit cards and
+established rules regarding the follow-up of credit use and repayment behaviors of large-amount credit customers to strictly
+prevent credit risk of large-amount credit customers. To enhance disposal efforts of risk assets of credit cards, it boosted
+post-lending management of credit cards, initiated special recovery inspections over key products and customers, and
+adjusted recovery strategies for overdue loans. It accelerated the application of the visible monitoring platform of big data of
+credit cards and the building of the real-time risk monitoring system featuring around-the-clock automatic monitoring and
+intervention and covering all businesses, processes and risks. It strengthened trainings for credit risk monitoring personnel in
+risk events handling and continued to enhance risk prevention and control of the Bank.
+◆ Credit Risk Management of Credit Card Business
+Discussion and Analysis
+Note: Substantial risks including country risk and reputational risk have been incorporated into the enterprise risk management framework.
+ICBC
+The Bank improved its credit risk management system for personal loans. It revised the administrative measures regarding
+the collateral management for personal credit business, and standardized collateral evaluation process to achieve strict
+collateral management and enhance collateral management quality and efficiency. The Bank adjusted the business
+procedures of personal loans by stressing the importance of credit approval responsibility for risk prevention and streamlining
+the approval procedure. The Bank has perfected its personal credit risk monitoring models and improved the effectiveness
+of its risk warning system. In terms of residential mortgages, loans based on forged evidentiary materials and loans from
+several financial institutions were strictly administered, and stringent customer entry conditions and limits were set for better
+risk monitoring of the automatic approval business; differentiated pricing mechanism for regions, projects and customers of
+personal residential mortgages was implemented and risk pricing capability of personal residential mortgage business was
+enhanced. Internet-based personal financing services were upgraded. Risk control and business management of personal
+financial assets-pledged loans was strengthened.
+◆ Credit Risk Management of Personal Loans
+The Bank strengthened credit risk management of small enterprise loans. The Bank improved its term management policy for
+small enterprise loans and innovated in credit business modes to small and micro enterprises. It strengthened full-flow risk
+management, conducted regular and special risk monitoring, and stepped up efforts in risk prevention and control of key
+regions, industries and groups. It built off-site monitoring platform, optimized the system cross default control function, and
+uplifted the level of information-based risk management of small enterprises loans.
+The Bank strengthened risk management in relation to trade finance. The Bank improved domestic trade finance key product
+rules to fortify risk management policy base for trade finance business and revised domestic and overseas trade finance
+credit policies to further standardize access and guarantee requirements regarding trade finance products. It also screened
+risks with the help of big data models and enhanced refined management of trade finance business with the focus on anti-
+counterfeit product efforts.
+The Bank strengthened risk management of the real estate industry. The Bank closely monitored the risk changes in the
+real estate market and exercised differentiated customer and project eligibility criteria. Preference was given to ordinary
+commercial housing projects with high quality developed by large real estate enterprises. It also improved the regional
+structure of real estate loans, enhanced the monitoring and analysis of outstanding real estate loans and vigorously
+strengthened risk prevention and control of real estate loans.
+The Bank strengthened risk management of loans to LGFVs. The Bank earnestly implemented the relevant policies and
+regulatory requirements of the State Council and CBRC on loans to LGFVs. It strengthened the control over total financing
+amount and monitoring and analysis of loans to LGFVs, boosted differentiated management and further optimized the
+loan structure. The Bank also coordinated with local governments during liquidation and screening of debts as well as the
+replacement of loans to LGFVs with bonds.
+54
+1,043
+The Bank continuously adjusted and improved industrial credit policy to provide financing support to the real economy in
+accordance with the macroeconomic policy, the prevailing trends of industry policy and the characteristics of the operation
+of the industry as well as the important strategic initiatives of the country. The Bank realized full coverage of industries of
+loan customers in its industry policy system of "18 industry segment policies + 60 key sub-industries", it also proactively
+supported the national "four regions" and "three supporting belts" strategies, provided support to key large projects and
+other infrastructure construction projects, and proactively supported the transformation and upgrading of manufacturing
+enterprises of quality products and leading enterprises of traditional industries. The Bank supported energy saving and
+environmental protection enterprises and "Going Global" of prominent product facilities. With a view to promoting the
+adjustment of its credit structure, the Bank also divided quality markets in more detailed manner, explored and cultivated the
+credit market for industries with growth prospect including strategic emerging industries, modern service industry, advanced
+manufacturing industry, cultural industry and industries closely related to the people's livelihood and consumption.
+111,892
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+In RMB millions except for percentages
+At 31 December 2014
+At 31 December 2015
+Percentage
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+(%)
+NPLs
+(%)
+Loan
+NPLs of the manufacturing industry and the wholesale and retail industry increased by a large margin. Increase in NPLs of the
+manufacturing industry was largely attributable to loan default of some manufacturing enterprises triggered by deteriorating
+operation status and funds shortage, which is caused by increasing macroeconomic downward pressure, falling market
+demand, declining ex-factory price of products and excess of low-end capacity. Increase in NPLs of the wholesale and retail
+industry was largely attributable to loan default of some wholesale enterprises triggered by operating difficulties, which is
+caused by increasing macroeconomic downward pressure and falling price of bulk commodity.
+(%)
+(%)
+Head Office
+541,087
+4.5
+9,053
+1.67
+475,485
+4.3
+5,139
+1.08
+Yangtze River Delta
+2,283,391
+19.1
+39,297
+NPLs
+Discussion and Analysis
+57
+Annual Report 2015
+2.38
+159,469
+2.4
+1,312
+0.82
+Science, education,
+culture and sanitation
+124,542
+1.8
+575
+0.46
+114,012
+1.7
+429
+0.38
+Others
+Total
+In 2015, the Bank navigated credit and credit structure adjustment in a scientific manner, proactively adapted to the
+national development strategies of "four regions" and "three supporting belts", and continued to support the national key
+projects and major engineering constructions as well as the transformation and upgrading of quality product manufacturing
+enterprises and leading enterprises of traditional industries. Loans granted to the transportation, storage and postal
+services industry increased by RMB94,570 million or 7.1%, which was mainly used to support high-quality transportation
+infrastructure construction projects. Loans granted to the production and supply of electricity, heat, gas and water industry
+rose by RMB80,721 million or 11.5%, mainly meeting the loan demand of the clean energy sector. The increment of loans to
+the leasing and commercial service industry was RMB77,487 million, up 13.5%, which was mainly attributable to the rapid
+growth of loans to investment and asset management, corporate headquarters management and other commercial services
+and lease of machinery equipment.
+1.31
+88,670
+100.0
+0.75
+1,306
+1.72
+2.4
+129,595
+100.0
+1.03
+1,967
+2.8
+191,430
+6,901,088
+172,986
+1.88 6,743,899
+3,453
+2,191,188
+26,208
+1.04
+Northeastern China
+668,572
+5.6
+8,518
+1.27
+625,457
+5.7
+6,932
+1.11
+Overseas and others
+1,048,579
+8.8
+5,920
+20,701
+0.56
+8.4
+3,854
+0.41
+Total
+11,933,466
+100.0
+179,518
+1.50 11,026,331
+100.0
+124,497
+1.13
+The Bank continuously optimized the geographic credit mix and promoted a balanced allocation of credit resources for
+different geographic areas. The Bank actively supported the regional development of Central China, Western China and
+Northeastern China, and granted RMB349,566 million loans to Central China and Western China, accounting for 38.5%
+of the total new loans. Overseas and other loans increased by RMB119,243 million or 12.8%, accounting for 13.1% of
+the total new loans, which was mainly due to the stable growth of cross-border lending via cooperation with domestic
+institutions, large syndicated loans and other credit businesses, resulting from their stronger support to the "One Belt and
+One Road" initiative and their active participation in cross-border financial services for "Going Global" of Chinese-funded
+enterprises.
+The Yangtze River Delta, the Western China and the Bohai Rim witnessed relatively large increases in NPLs. NPL increase in
+the Yangtze River Delta and the Bohai Rim was mainly caused by loan default growth resulting from operating difficulties
+of some enterprises in the manufacturing industry and the wholesale and retail industry against the backdrop of greater
+macroeconomic downward pressure, economic structural adjustment and industry transformation and upgrading. NPL rise
+in the Western China primarily resulted from loan default due to profitability decrease of resource-based enterprises in the
+face of falling prices of coal and other products in addition to the impact brought by the manufacturing industry and the
+wholesale and retail industry.
+0.92
+929,336
+18.0
+1,988,934
+1.50
+1.20
+Pearl River Delta
+1,545,400
+13.0
+29,946
+1.94
+1,453,273
+13.2
+23,858
+1.64
+Bohai Rim
+2,007,028
+16.8
+30,605
+1.52
+1,861,749
+16.9
+32,472
+18.2
+2,171,273
+Western China
+1.15
+17,194
+19.9
+13.6
+1.42
+14.0
+1,668,136
+Central China
+1.11
+20,611
+1,500,909
+2.1
+23,707
+catering
+coking and
+nuclear fuel
+52,127
+0.8
+240
+0.46
+51,951
+0.8
+Others
+268,917
+3.9
+12,196
+4.54
+270,089
+Petroleum processing,
+3.9
+204
+0.39
+9,189
+3.40
+Transportation, storage
+and postal services
+1,429,697
+20.7
+3,985
+0.28
+1,335,127
+19.8
+4,226
+0.32
+68
+2.82
+1,980
+1.0
+1.7
+145,175
+908
+0.81
+Computer,
+telecommunications
+equipment, and
+other electronic
+equipment
+97,733
+1.4
+1,064
+1.09
+121,013
+1.8
+906
+0.75
+70,236
+2.51
+1,756
+1.0
+69,875
+Non-metallic mineral
+Production and supply of
+3.63
+98,443
+5.12
+4,710
+1.3
+91,944
+Transport equipment
+3,569
+electricity, heat,
+1.5
+780,370
+7.0
+56
+0.01
+Real estate
+427,306
+6.2
+6,293
+1.47
+443,471
+6.6
+3,713
+0.84
+Mining
+246,541
+3.6
+3,722
+1.51
+Accommodation and
+0.60
+gas and water
+1,242
+3.1
+205,881
+470,014
+1.45
+3.0
+210,294
+Construction
+0.60
+1,576
+262,338
+3,047
+0.06
+3.9
+6.7
+1,494
+0.19
+278
+11.3
+699,649
+10.4
+1,353
+0.19
+Wholesale and retail
+10.7
+6.60
+772,536
+11.5
+35,612
+4.61
+734,994
+commercial service
+Leasing and
+Water, environment
+0.38
+2,164
+8.5
+and public utility
+management
+575,469
+0.75
+4,906
+9.5
+652,956
+461,542
+Liquidity Risk Management Mode
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+◆ Stress Test
+Formulated taking into account the liquidity risk appetite, the liquidity risk management strategy, policy and procedure cover
+all businesses on and off the balance sheet, all domestic and overseas business departments and branches that are likely to
+deliver a material impact on the liquidity risk, and contain the liquidity risk management under normal and stress scenarios.
+The liquidity risk management strategy specifies the overall objective and management mode of liquidity risk management
+and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk management are
+formulated in accordance with external and macro operating environments and business development of the Bank, with a
+view to striking an effective balance among security, liquidity and profitability.
+Objective of liquidity risk management: By establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity
+risk at the Group level, the Bank, the branches and the business lines, and ensuring the liquidity demand is satisfied at a
+reasonable cost in time under the normal business scenario and the stress scenario.
+Objective, Strategy and Important Policy of Liquidity Risk Management
+Discussion and Analysis
+63
+In 2015, according to the macroeconomic environment and changes of financial regulatory policies, the Bank strengthened
+the development of its liquidity risk management mechanism and managed liquidity on and off balance sheet and of
+domestic and overseas institutions in a coordinated way, which further raised funds operation and liquidity risk prevention
+and control capability of the Group. Real-time funds monitoring and warning mechanism was improved to ensure smooth
+and orderly operation of the RMB payment system (CIPS) and promote refined liquidity management across the Bank. City-
+wide fund clearing management and system building were implemented, effectively enhancing funds operation and liquidity
+risk centralized management. Overseas funds were managed in a more centralized manner, and the overall planning and
+coordination mechanism for the Group's liquidity risk was improved. Overseas institutions were guided to further optimize
+the structure of assets and liabilities and expand sources of liabilities and to continuously boost their liquidity risk prevention
+capability. Development of systems for identification, monitoring, measurement and control procedures for liquidity risk was
+steadily progressed, in a bid to further improve the automatic level of liquidity risk management.
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department; and the execution system comprising the Asset and Liability
+Management Department, leading management departments of on and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs corresponding decision making, supervision and execution functions according to division of
+responsibilities.
+The Bank's liquidity risk management system conforms to the overall development strategy and the entire risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control procedures for liquidity risk and a complete management information system.
+Liquidity Risk Management System and Governance Structure
+Liquidity Risk Management
+20,316
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress test on
+liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress tests on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress tests at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+Please refer to "Note 55. (c)(iii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, perform other payment obligations and satisfy other funding demands of normal business development.
+Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of loans by
+customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization, operating
+losses, derivatives trading risk and risk associated with its affiliates.
+Liquidity Risk
+Annual Report 2015
+Liquidity Risk Analysis
+on
+In respect of foreign currencies, the Bank closely observed the changes in external markets and funds, adjusted foreign
+currency liquidity management strategy and internal and external fund prices in a flexible manner and maintained the
+coordinated development of foreign currency assets and liabilities business while ensuring a safe liquidity level.
+322,595
+1 to 3
+months
+(540,886)
+126,041
+1 to 5
+(7,958,354)
+At 31 December 2014
+(9,385,821)
+At 31 December 2015
+Less than
+1 month
+demand
+3 months
+repayable
+In RMB millions
+Overdue/
+LIQUIDITY EXPOSURE ANALYSIS
+The Bank also assessed the liquidity risk status by using liquidity exposure analysis. As at the end of 2015, the liquidity
+exposure for the less than 1 month category turned positive from negative, which was mainly due to the increase of due
+from and placements with banks and other financial institutions with corresponding term and the decrease of financial
+liabilities at fair value through profit or loss; the negative liquidity exposure for the 1 to 3 months category fell following
+the decrease of financial liabilities at fair value through profit or loss with corresponding term; the liquidity exposure for the
+3 months to 1 year category turned positive from negative and the positive liquidity exposure for the over 5 years category
+edged up, which was mainly due to loans and bond investment with corresponding term increased. Deposits of the Bank
+maintained steady growth with a high deposition rate, and at the same time the Bank made major investment in central
+bank bills, treasury bonds and other high-liquidity assets, and possessed sufficient liquidity reserves. Therefore, the overall
+liquidity of the Bank maintained at a safe level. The liquidity exposure analysis of the Bank as at the end of 2015 is shown in
+the table below:
+Discussion and Analysis
+ICBC
+64
+For the quantitative information for liquidity coverage ratio based on the Administrative Measures for Liquidity Coverage
+Ratio of Commercial Banks promulgated by CBRC, please refer to "Unaudited Supplementary Financial Information".
+The deposit and loan businesses of the Bank maintained coordinated development, and liquidity risk management ability
+was further strengthened. RMB liquidity ratio, foreign currency liquidity ratio and liquidity coverage ratio of the Bank were
+35.5%, 98.1% and 145.1%, respectively, meeting the regulatory requirements. Loan-to-deposit ratio was 71.4%. Please
+refer to "Discussion and Analysis - Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+The Bank paid close attention to the macro-control policy and the trend of market funds, dynamically adjusted its RMB
+funds operation strategy in accordance with the Bank's assets and liabilities business development and funds management
+characteristics in different periods, and took various measures to ensure a safe and stable liquidity level. In order to further
+consolidate the deposit business, it promoted the steady and balanced growth of each type of deposits, and applied
+comprehensive means including price and scale measures to optimize deposit structure, which effectively enhanced the
+stability of liabilities. It also intensified the efforts in treasury business term structure management, taking funds security,
+liquidity and profitability into consideration.
+23,629
+(1,481,484)
+(1,047,439)
+(136,602)
+In 2015, Renminbi depreciated slightly against US dollar with obvious characteristics of two-way fluctuations, exchange
+rate elasticity was significantly enhanced, and Renminbi maintained generally stable against the basket of currencies. The
+central parity of Renminbi against US dollar depreciated 5.77% compared to the end of 2014. The Bank closely watched
+the changes in external market and exchange rate, actively took a combination of measures such as price leverage to adjust
+and optimize the aggregate amount and structure of foreign exchange assets and liabilities, and strengthened assets and
+liabilities currency structure management and capital fund preservation management of overseas institutions. The currency
+risk of the Bank was under control.
+◆ Currency Risk Analysis
+For interest rate sensitivity analysis of the Bank, please refer to "Note 55.(c)(ii) to the Financial Statements: Interest Rate
+Risk".
+Note: Please refer to "Note 55.(c)(ii) to the Financial Statements: Interest Rate Risk".
+At 31 December 2014
+At 31 December 2015
+1,022,777
+1,119,599
+Over 5 years
+62
+1 to 5 years
+399,606
+361,676
+3 months
+Less than
+In RMB millions
+INTEREST RATE RISK EXPOSURE
+As at the end of 2015, the Bank had a cumulative interest rate sensitivity positive exposure within one year of RMB107,036
+million, representing an increase of RMB6,567 million, mainly because of the increase of loans, bond investment and due
+from banks and other financial institutions repriced and matured within one year. Cumulative interest rate sensitivity positive
+exposure over one year stood at RMB1,519,205 million, an increase of RMB134,752 million from the end of the previous
+year, mainly due to rise of available-for-sale financial assets and financial assets at fair value through profit or loss matured
+over one year. The structure of the Bank's interest rate risk exposure according to the contractual repricing date or maturity
+date (whichever is earlier) is shown in the following table:
+In 2015, the domestic interest rate liberalization reform achieved critical progress and interest rate control was basically
+lifted. The Bank attached more importance to the scenario analysis and the stress test on interest rate risk and studied over
+and formulated the differentiated pricing strategy. It strengthened monitoring of the interest rate implementation as well as
+comparisons with the peers to reasonably control the floating range of interest rates and optimize the interest rate structure.
+It reinforced loan pricing management by promoting the market-based loan pricing mechanism, improved differentiated
+pricing management, and established the management mechanism for deposit interest rate upward floating to foster
+coordinated growth of deposit scale and price.
+1 year
+26,247
+♦ Interest Rate Risk Analysis
+Market Risk Analysis
+3 months to
+1 year
+1,588,520
+1,147,908
+(22,018)
+ICBC
+Discussion and Analysis
+(5,593)
+(36,322)
+153,434
+Total foreign exchange exposure, net
+exchange items, net
+Exposure of off-balance sheet foreign
+42,334
+262,643
+29,222
+189,756
+FOREIGN EXCHANGE EXPOSURE
+exchange items, net
+Item
+USD
+equivalent
+RMB
+equivalent
+RMB
+USD
+At 31 December 2014
+At 31 December 2015
+In RMB (USD) millions
+Exposure of on-balance sheet foreign
+(325,851)
+CAPITAL MANAGEMENT
+(479,125)
+In 2015, in response to the complicated international political and economic situation, the Bank continued to strengthen
+country risk management according to regulatory requirements and business development. It closely monitored country risk
+exposure, kept tracking, monitoring and reporting country risk and promptly updated and adjusted the rating and limits of
+country risk. It also further improved the country risk early warning mechanism, actively conducted stress tests on country
+risk and effectively controlled country risk while pushing ahead the internationalization strategy.
+Annual Report 2015
+67
+Discussion and Analysis
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly consolidating and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channel, raising capital quality and optimizing capital structure. The Bank's capital management covers
+various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management and capital financing management.
+In 2015, the Bank further improved its capital management mechanism and effectively communicated regulatory
+requirements; strived to promote the optimization of bank-wide capital utilization, intensified the rigid constraint of
+economic capital on risk-weighted assets across the Bank and continued to elevate the capital use efficiency and return
+on capital. On the basis of supplementing capital with retained profits, the Bank continued to issue preference shares and
+eligible tier 2 capital instruments to replenish capital, further consolidating the bank-wide capital base and reinforcing its
+capacity in supporting the real economy development. Moreover, the Bank coordinated, allocated and utilized various capital
+resources to satisfy capital supplement requirements of subsidiaries. At the end of 2015, the Bank's capital management
+indicators performed soundly, of which capital adequacy ratio was kept at an ideal level, fully representing its reputation of
+strong capital base and stable and sustainable operation.
+Capital Adequacy Ratio and Leverage Ratio
+The Bank calculated its capital adequacy ratios in accordance with the Capital Regulation. In accordance with the applicable
+scope of advanced capital management approaches approved by CBRC, the foundation internal ratings-based (IRB) approach
+was adopted for corporate credit risk, the IRB approach for retail credit risk, the internal model approach (IMA) for market
+risk, and the standardized approach for operational risk meeting regulatory requirements. Weighted approach was adopted
+for credit risk not covered by IRB approach and standardized approach for market risk not covered by IMA.
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+In RMB millions, except for percentages
+At 31 December 2014
+Item
+Group
+At 31 December 2015
+Parent
+Company
+Group
+Parent
+Company
+Calculated in accordance with the Capital Regulation:
+Net core tier 1 capital
+1,701,495
+The Bank strictly observes the Guidelines on the Management of Country Risk by Banking Financial Institutions and other
+regulatory requirements of CBRC, implemented a management model where responsibilities of each department or business
+line are clearly defined under the leadership of the Board of Directors and the Senior Management. The Board of Directors
+assumes the ultimate responsibility for the effectiveness of country risk management. The Senior Management is responsible
+for executing the country risk management policies approved by the Board of Directors. The Risk Management Committee
+of the Head Office is responsible for reviewing matters regarding country risk management. The Bank manages and controls
+country risk through a series of management tools, including country risk assessment and rating, country risk limits for the
+entire group and continuous statistics, analysis and monitoring of country risk exposure, as well as country risk assessment
+using stress tests. The Bank reviews the country risk rating and limits at least once every year.
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+Country Risk
+In 2015, the Bank comprehensively strengthened reputational risk management, proactively prevented reputational risk and
+enhanced the reputational risk management level and prevention ability across the Bank. According to the latest regulatory
+requirements and external situation changes, the Bank improved reputational risk management working mechanism, carried
+out identification, evaluation, monitoring, control, mitigation and assessment of reputational risk in an in-depth manner and
+strengthened consolidated management of reputational risk. It conducted reputational risk assessment on new businesses
+and products, made comprehensive inspections on reputational risk and created the reputational risk management ledger
+level by level. It organized emergency response drill on reputational risk and reinforced prevention control and mitigation of
+reputational risk. It made active response to concerns from the society and effectively communicated with the stakeholders
+and the public.
+Annual Report 2015
+Discussion and Analysis
+65
+Discussion and Analysis
+functions of internal and external frauds control departments, established better case prevention mechanisms and systems,
+and promoted the application of the external fraud risk information system in all business areas and overseas institutions.
+It bolstered in-process operational risk control and pre-trading risk control and persistently enhanced credit business
+compliance supervision. It proactively implemented the establishment of the information security integrated mechanism and
+terminal security management, in order to increase the resilience of the information technology system against external
+attacks. It reinforced operational risk limit management and compliance management, raised the flexibility of limit indicators,
+standardized compliance review processing flow, and focused on compliance management of overseas institutions. It
+intensified operational risk data quality control of the Group, laying a solid foundation for the implementation of the
+advanced measurement approach (AMA) for operational risk. During the reporting period, the operational risk management
+system of the Bank operated smoothly and the operational risk was controllable on the whole.
+Legal Risk
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arise out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions and requirements of other relevant rules in the operational management of
+the Bank; the unfavorable legal defects that exist in products, services or information provided, transactions engaged in,
+and contracts, agreements or other documents executed by the Bank; legal disputes (legal or arbitration proceedings)
+between the Bank and its customers, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally and
+externally.
+Based on the objective to ensure legal and compliant operation, the Bank always attaches importance to establishing a
+sound legal risk management system and forming a full-process legal risk prevention and control mechanism to support and
+secure business innovation and market competition, and prevent and eliminate various potential or practical legal risks. The
+Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk management,
+and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for executing
+the legal risk management strategy and policy, formulating relevant systems and measures, and examining and approving
+relevant important affairs. The Legal Affairs Department of the Head Office is the functional department in charge of legal
+risk management across the Bank, with relevant business departments providing related support and assistance on the
+work regarding legal risk prevention and control, and the affiliates and domestic and overseas branches undertaking the
+responsibility of legal risk management of their respective institutions.
+In 2015, the Bank continued to strengthen legal risk management and control and provided stronger legal support to
+business transformation and innovative development with a view to ensuring the legal and compliant operation and
+healthy business development of the Group. The Bank advanced IT-based legal risk prevention and control and upgraded
+the working mechanism and process for consolidated legal risk management. The Bank collected NPLs by legal means
+and improved the effectiveness of legal collection. Besides, the Bank strengthened the risk control and management of
+lawsuits where the Bank was the defendant, to continuously enhance litigation management. Additionally, it assisted the
+online enforcement investigation and control system and increased the efficiency of assistance to enforcement. Last but
+not least, the Bank further standardized contract management and reinforced authorization management, related parties
+management, trademark management and intellectual property protection.
+1,571,403
+Anti-Money Laundering
+In 2015, the Bank continued to deepen centralized processing and comprehensive pilot reform in anti-money laundering,
+with its suspicious report quality and centralized judgment mode highly recognized by PBC. Money laundering risk
+assessment policies for institutions, customers and products were formulated and improved, money laundering self
+assessment was carried out steadfastly, customer risk levels were reassessed, and regular analysis report on money
+laundering types was improved. Special inspection and selective quality inspection of sensitive transactions were conducted,
+and special campaign against customer information was implemented in an in-depth manner, and money laundering risk
+and counter-terrorist financing risk control in major business areas was reinforced. The overseas anti-money laundering
+monitoring system was improved, and the reform of sensitive information compliance review mechanism was promoted in
+an orderly manner. Audit of overseas institutions with respect to anti-money laundering was reinforced, and anti-money
+laundering personnel allocation and performance appraisal and supervision of overseas institutions were strengthened.
+The Bank proactively prevented and controlled anti-money laundering compliance risk facing the Group in process of
+66
+ICBC
+Discussion and Analysis
+internationalization. Publicity activities and trainings on anti-money laundering were launched, anti-money laundering
+qualification authentication was promoted, and the building of anti-money laundering expert team was intensified, so as to
+improve the compliance awareness, professionalism and duty performance ability of anti-money laundering professionals.
+Reputational Risk
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the objective and planning for reputational risk management, including
+the establishment and improvement of the reputational risk management system through the identification, assessment,
+monitoring and handling of reputational risk factors and reputational events. The Bank adheres to the prevention oriented
+principle and incorporates reputational risk management into each aspect of operational management of the Bank and
+every customer service process, with a view to controlling and mitigating reputational risk at its source and minimizing the
+possibility of occurrence of and influence from reputational events.
+As the highest decision-making body of the Bank's reputational risk management, the Board of Directors is responsible for
+formulating strategies and policies concerning reputational risk management that are in line with the strategic objective of
+the Bank. The Senior Management is responsible for implementing such strategies and policies established by the Board
+of Directors and leading reputational risk management of the Bank. The Bank has established a special reputational risk
+management team to take charge of the daily management of reputational risk.
+In strict compliance with applicable laws and regulations concerning anti-money laundering, the Bank actively implemented
+the "risk-based" regulatory requirements in respect of anti-money laundering, earnestly fulfilled the social duties and legal
+obligations concerning anti-money laundering, and kept enhancing the Group's risk management level regarding anti-money
+laundering and anti-terrorist financing.
+1,486,733
+1,393,120
+Net tier 1 capital
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related
+regulations:
+Core capital adequacy ratio
+Capital adequacy ratio
+68
+ICBC
+11.83%
+12.09%
+11.49%
+14.70%
+11.82%
+14.67%
+14.29%
+14.35%
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution and delivery and process management constitute major sources of
+operational risk losses of the Bank.
+Operational Risk Management
+Operational Risk
+Note: Please refer to "Note 55. (b) to the Financial Statements: Liquidity Risk".
+Undated
+Total
+3,044,624 1,800,519
+3,372,950 1,537,304
+Over
+years
+5 years
+3,197,027 5,136,733
+3,082,273 4,628,344
+14.75%
+(782,933)
+14.53%
+15.22%
+1,781,062
+1,650,778
+1,521,233
+1,427,548
+Net capital base
+2,012,103
+1,869,237
+1,812,137
+1,699,357
+15.32%
+Core tier 1 capital adequacy ratio
+12.88%
+11.92%
+12.05%
+Tier 1 capital adequacy ratio
+13.48%
+13.53%
+12.19%
+12.35%
+Capital adequacy ratio
+12.87%
+61
+5,499,003
+The Bank continued to improve risk measurement and product control of the trading book by adopting multiple methods
+including Value at Risk (VAR), sensitivity analysis and exposure analysis to measure and manage products in the trading book.
+The Bank also optimized the market risk limit management system based on trading portfolios, established and improved
+the three-tier limit approval mechanism consisting of the Board of Directors, the Market Risk Management Committee
+and business departments. In addition, it optimized limit setting in a scientific manner and realized fast and flexible limit
+monitoring and dynamic adjustment relying on the Global Market Risk Management (GMRM) system. For value at risk (VaR)
+of the trading book of the Bank, please refer to "Note 55. (c)(i) to the Financial Statements: Value at Risk (VAR)".
+Including: Discounted bills
+12.5
+1,372,605
+12.6
+1,505,144
+Pledged loans
+18.8
+2,070,366
+21.1
+2,516,196
+Including: Residential mortgages
+45.0
+4,964,791
+46.1
+Loans secured by mortgages
+(%)
+Amount
+(%)
+Amount
+522,052
+4.4
+350,274
+3.2
+91 days to 1 year
+1 to 90 days
+Overdue periods
+OVERDUE LOANS
+Loans secured by mortgages stood at RMB5,499,003 million, representing an increase of RMB534,212 million or 10.8%
+from the end of the previous year. Pledged loans amounted to RMB1,505,144 million, representing an increase of
+RMB132,539 million or 9.7% from the end of the previous year. Guaranteed loans amounted to RMB1,642,370 million,
+representing an increase of RMB108,358 million or 7.1% from the end of the previous year. Unsecured loans amounted to
+RMB3,286,949 million, representing an increase of RMB132,026 million or 4.2% from the end of the previous year.
+100.0
+11,026,331
+100.0
+11,933,466
+Item
+Total
+3,154,923
+27.5
+3,286,949
+Unsecured loans
+13.9
+1,534,012
+13.8
+1,642,370
+Guaranteed loans
+28.6
+Percentage
+Percentage
+At 31 December 2014
+226,140
+134,262
+91,878
+Including: Impairment allowances charged
+86,022
+22,294
+63,728
+Charge for the year
+257,581
+Impairment allowances transferred
+216,336
+Balance at the beginning of the year
+Total
+assessed
+Collectively
+Individually
+assessed
+In RMB millions
+Discussion and Analysis
+CHANGES IN ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+The Bank strictly followed the requirements of the Guidance to the Operational Risk Management of Commercial Banks
+issued by CBRC. Under the leadership of the Board of Directors and the Senior Management, the Bank adopted the
+operational risk control mode of "integrated management, classified control". The Board of Directors assumes relevant
+responsibility for the effectiveness of the operational risk management according to the Articles of Association, and the
+Senior Management is responsible for implementing the strategy, overall policy and system for operational risk management
+approved by the Board of Directors. The Operational Risk Management Committee under the Senior Management, as
+the organizer and coordinator of operational risk management of the Bank, is responsible for reviewing and approving
+significant matters related to operational risk management according to the Working Regulations for the Operational Risk
+Management Committee. Marketing and product departments at all levels form the first line of defense of operational risk
+management, which assume direct responsibility for operational risk management in each business line. Internal control and
+compliance departments at various levels are comprehensive management departments for operational risk in institutions
+at various levels and assume the duty of operating the second line of defense of operational risk management, which
+are responsible for the overall management of operational risks of institutions at various levels and for the arrangement
+and organization for the establishment and implementation of operational risk management system at each level;
+discipline enforcement, security, human resources, IT, finance and accounting, legal affairs, operation management, credit
+management and risk management departments at all levels are classification control departments for operational risk in
+institutions at various levels, which are responsible for management and control on specific types of operational risk. These
+departments, together with comprehensive management departments, form the second line of defense of operational risk
+management. The internal audit departments at all levels are responsible for auditing and evaluating the operation of the
+operational risk management system, and form the third line of defense.
+41,245
+1 to 3 years
+902
+Reversal of impairment allowances
+At 31 December 2015
+In RMB millions except for percentages
+DISTRIBUTION OF LOANS BY COLLATERAL
+As at the end of 2015, the allowance for impairment losses on loans stood at RMB280,654 million, a year-on-year increase
+of RMB23,073 million. Allowance to NPL was 156.34%; allowance to total loans was 2.35%.
+280,654
+1,089
+368
+229,155
+414
+(60,296)
+(9,931)
+(902)
+88
+(4,156)
+326
+(50,365)
+721
+51,499
+Balance at the end of the year
+Recoveries of loans and advances previously written off
+Write-offs
+Acquisition of subsidiaries
+Accrued interest on impaired loans
+(140,118)
+(111,066)
+(29,052)
+(4,156)
+Annual Report 2015
+Over 3 years
+In RMB millions except for percentages
+16,288
+0.1
+16,368
+0.1
+16,585
+0.2
+18,211
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Borrower F
+Borrower G
+Borrower H
+Borrower I
+Borrower J
+Total
+0.2
+19,072
+0.2
+21,600
+Information transmission, software and information technology services
+Transportation, storage and postal services
+Borrower E
+Borrower D
+0.2
+28,148
+Transportation, storage and postal services
+0.1
+15,832
+0.1
+267,878
+Market Risk Management of the Trading Book
+The Bank's objective of currency risk management is to control the impact of exchange rate fluctuations on the Bank's
+financial position and shareholders' equity within a tolerable extent. The Bank mitigates such risk principally by limit
+management and hedging of risks. The Bank carries out sensitivity analysis and stress test of currency risk on a quarterly
+basis, and submits currency risk reports to the Senior Management and the Market Risk Management Committee.
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities.
+◆ Currency Risk Management
+In 2015, in light of policy trends and market changes, the Bank made comprehensive analysis on the impact brought by
+interest rate liberalization and actively researched and worked out solutions. It improved differentiated deposit pricing
+management, and established the total amount management mechanism for deposit interest rate upward floating. It
+developed interest rate-sensitive liability classified management system, strengthening its efforts in classified management
+and quantitative analysis of active liabilities and passive liabilities. Therefore, the interest rate risk management of the Bank
+was enhanced.
+The Bank's interest rate risk management is aimed at maximizing the risk-adjusted net interest income within the tolerable
+level of interest rate risk under its risk management and risk appetite. The Bank adheres to the prudence principle in interest
+rate risk management of the banking book. The department in charge of interest rate risk management of the banking
+book and business departments jointly monitor and forecast interest rate trends and manage the interest rate risk based on
+monitoring results, so as to maximize the risk-adjusted income.
+Interest rate risk is defined as the risk of loss in the overall gain and economic value of the banking book arising from
+adverse movements in interest rate and term structure, etc. Interest rate risks mainly include repricing risk, yield curve risk,
+benchmark rate risk and option risk, of which, repricing risk and benchmark rate risk are the Bank's primary interest rate
+risks.
+♦ Interest Rate Risk Management
+Market Risk Management of the Banking Book
+0.3
+In order to take more effective market risk management measures and accurately measure regulatory capital arising from
+market risk, the Bank categorized all on- and off-balance sheet assets and liabilities into its trading book and banking book
+according to the nature and characteristics of different books. The trading book includes tradable financial instruments and
+commodity positions held by the Bank for the purposes of trading or hedging the risks of other items in the trading book,
+whereas all other positions are included in the banking book.
+In 2015, the Bank continued to strengthen consolidated management of market risk and persistently enhanced the
+management and measurement of market risk at the Group's level. It improved market risk management rules and
+regulations including the measures for market risk consolidated management, implemented institution classified
+management and delicacy management of overseas institutions. It accelerated overseas expansion of the Global Market
+Risk Management (GMRM) system, covering more institutions. It also actively optimized the measurement models and IMA
+verification, enhanced independent research and development capacity of market risk internal models, and deepened the
+core application of the IMA in limit management, risk reporting, stress test and capital measurement.
+Discussion and Analysis
+ICBC
+60
+The Bank strictly complies with the Guidelines on Market Risk Management of Commercial Banks issued by CBRC and other
+related regulatory requirements, implemented an independent, centralized and coordinated market risk management model
+under the leadership of the Board of Directors and the Senior Management, and formed a management organizational
+structure featuring the segregation of the front office, the middle office and the back office in the financial market
+business. The Board of Directors assumes the ultimate responsibility for the implementation and monitoring of market risk
+management. The Senior Management is responsible for executing the strategies, overall policy and system regarding market
+risk management approved by the Board of Directors. The Market Risk Management Committee of the Senior Management
+is the reviewing and decision-making organ of the Bank in respect of market risk management, and is responsible for
+reviewing important matters of market risk management, and performs its duty in accordance with the Working Regulations
+for the Market Risk Management Committee. The market risk management departments at different levels are responsible
+for coordinating the market risk management at respective levels, and the business departments play their roles in
+implementing market risk management policies and standards in respective business areas.
+The Bank's market risk management is the process of identifying, measuring, monitoring, controlling and reporting market
+risk for the purposes of setting up and enhancing the market risk management system, specifying responsibilities and
+process, determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, and stock price and commodity prices). The Bank is primarily exposed
+to interest rate risk and currency risk (including gold).
+Market Risk
+2.2
+Banking Book and Trading Book
+30,925
+Transportation, storage and postal services
+0.7
+0.13
+15,205
+0.32
+35,152
+0.53
+62,783
+0.59
+65,134
+0.71
+14,882
+84,808
+95,410
+1.42
+169,902
+% of total
+loans
+Amount
+% of total
+loans
+Amount
+At 31 December 2014
+At 31 December 2015
+0.87
+Total
+0.13
+2.79
+84,849
+Transportation, storage and postal services
+loans
+Amount
+Industry
+Borrower C
+Borrower
+Borrower A
+Borrower B
+% of total
+In RMB millions except for percentages
+332,698
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted for
+4.2% and 13.3% of the Bank's net capital respectively. The total amount of loans granted to the top ten single customers
+was RMB267,878 million, accounting for 2.2% of total loans. The table below shows the details of the loans granted to the
+top ten single borrowers of the Bank as at the end of 2015.
+Renegotiated loans and advances amounted to RMB4,557 million, representing a decrease of RMB22 million as compared
+to the end of the previous year. Renegotiated loans and advances overdue for over three months amounted to RMB1,570
+million, representing a decrease of RMB356 million.
+RENEGOTIATED LOANS
+Overdue loans stood at RMB332,698 million, representing an increase of RMB122,120 million from the end of the previous
+year. Among which, loans overdue for over 90 days amounted to RMB162,796 million, representing an increase of
+RMB47,628 million.
+Discussion and Analysis
+59
+Annual Report 2015
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+1.91
+210,578
+BORROWER CONCENTRATION
+In 2015, in accordance with latest regulatory requirements concerning operational risk and the trends of operational risk, the
+Bank continuously strengthened the refined management of operational risks in key fields and core links, further promoted
+operational risk management in overseas institutions, and improved the operational risk management of the Group. It
+continuously improved the operational risk control system of each business line, strenuously effected the risk management
+to
+31 December 2015
+currency
+71.4
+68.4
+66.6
+Liquidity coverage ratio (%)
+RMB and foreign
+currency
+>=100.0(3)
+145.1
+142.4
+Percentage of loans to single largest
+customer (%)
+Percentage of loans to top 10
+customers (%)
+Loan migration ratio (%)
+Pass
+Special mention
+Substandard
+Doubtful
+<=10.0
+4.2
+4.8
+4.2
+14.9
+16.2
+4.4
+2.7
+1.7
+RMB and foreign
+Loan-to-deposit ratio (%) (2)
+61.0
+91.1
+Discussion and Analysis
+In 2016, global economy will experience a mild recovery. Though faced with big downward pressure in the critical period of
+growth slowdown and structural adjustment, Chinese economy will be able to maintain medium-to-high growth rate as it
+has great potential, resilience and maneuvering room.
+The Bank will embrace the following opportunities. First, supply-side structural reform will optimize the supply-demand
+structure of the economic system, improve production factor allocation efficiency and play a stronger leveraging role
+in economic development, thus providing the Bank with favorable conditions for innovative transformation. Second,
+the implementation of key strategies including "mass entrepreneurship and innovation", "Internet plus" and "made in
+China 2025" will guide positive industrial and corporate transformation and offer vaster space for the Bank's business
+development. Third, with all-round and thorough implementation of major regional initiatives such as the "One Belt and
+One Road", coordinated development of Beijing-Tianjin-Hebei region, and Yangtze River Economic Zone, the Bank will have
+the opportunity to explore regional growth potential and foster new profit growth drivers. Fourth, China's new round of
+opening up and profound financial reform will expand the Bank's channels for international and diversified development and
+enhance its cross-border, cross-market service ability and international competitiveness.
+The Bank will also face the following major challenges. First, evolution of traditional risks interwoven with new risk factors
+in the course of economic adjustment will further test the Bank's risk management and quality control capacity. Second,
+interest rate liberalization will narrow interest rate spread during a certain period of time, requiring the Bank to further
+optimize and adjust its business structure and step up creating a new profit growth model underpinned by multiple factors.
+Third, the in-depth integration of Internet and finance will continuously change the financial business format, which
+requires the Bank to profoundly transform its operation management model and rebuild customer relations and innovative
+service pattern from new perspectives and with new methods. Fourth, imbalanced global economy recovery and constant
+fluctuations of international financial market will add to difficulty in the Bank's cross-border operation and global asset and
+liability management.
+In 2015, the Bank launched a new round of ten-year outline and three-year planning, firmly implemented development
+strategies of the new era, overcame numerous difficulties and successfully achieved goals for the year. 2016 is the starting
+year of the new round of "13th Five-Year Plan" and also a critical year for the Bank's transformation and development. The
+Bank will, persistently guided by strategies of the new era, focus on quality stability, structure adjustment, innovation and
+reform, to ensure development with higher quality and efficiency.
+Strengthen asset quality management and keep risks under control. Towards enhancing prudential operation
+culture and implementing substantial risk control, the Bank will reform its credit framework and procedures,
+coordinate credit increment and existing credit management, accelerate application of big data and information
+technology in credit management and establish a whole-process lifecycle credit management system. In addition,
+the Bank will explore such innovative methods as investment banking, asset securitization and Internet platforms to
+improve the efficiency and professionalism of non-performing asset disposal. Furthermore, the Bank will make an
+overall arrangement for prevention of credit and non-credit, on- and off-balance sheet and domestic and overseas risks
+and keep improving the risk management system at the Group and corporate level, so as to effectively control cross-
+sector, cross-border and cross-market risks on the whole.
+Deepen business transformation and further improve its ability to serve real economy. By seizing major
+new opportunities in supply-side structural reform and implementation of China's key regional initiatives, the Bank
+will strengthen credit support to environment-friendly sector, strategic emerging sector, modern service sector and
+Internet-based sector, thus optimizing credit allocation structure. Taking opportunities arising from increase of
+wealth management clients, steady growth of consumption demand and in-depth transformation of consumption
+model under the new normal, the Bank will comprehensively enhance its abilities in innovative retail banking
+growth, integrated services, value creation and continuous competition and build up a mega retail landscape
+featuring customer need satisfaction, information resource sharing, marketing service synergy and business and
+product integration. Rising to the occasion of direct financing market development, the Bank will build a mega retail
+management system across the value chain, improve specialized operation of mega asset management business and
+establish an integrated risk management system of mega asset management.
+Accelerate innovation reform and foster new advantages in competitive development. The Bank will further
+propel development of the internet-based finance business, and continue to improve its ICBC Mall, ICBC Mobile and
+ICBC Link and reinforce three major product lines, namely internet-based payment, financing and wealth management
+and investment, so as to consolidate its leading position among peers in terms of internet-based finance. It will also
+fully leverage the internet to implement customer-centric reform on business procedures and management mode,
+striving to build new-type customer relations. Besides, the Bank will promote the application of big data in operation
+and management and build a highly aggregated information system focusing on customers, to improve the accuracy
+of risk management and marketing services in an all-round manner. The Bank will vigorously promote standard and
+intelligent outlet transformation and keep expanding the access of connecting online and offline channels, making full
+efforts to shape a new channel network featuring online and offline integration.
+Annual Report 2015
+71
+Discussion and Analysis
+OTHER INFORMATION DISCLOSED PURSUANT TO
+REGULATORY REQUIREMENTS
+Major Regulatory Indicators
+29.6
+Regulatory
+Liquidity ratio (%)
+criteria
+2015
+2014
+2013
+RMB
+>=25.0
+35.5
+33.2
+30.2
+Foreign currency
+>=25.0
+98.1
+Item
+17.2
+9.7
+38.9
+1,937,790
+Payments settled via payment systems or correspondent banks
+345,214,765
+287,748,223
+Assets under custody
+11,507,109
+5,828,863
+Underwritten transactions in debt and equity markets
+1,192,434
+512,679
+Notional amount of over-the-counter (OTC) derivatives
+4,049,645
+2,529,568
+2,338,163
+Trading and available-for-sale securities
+Cross-jurisdictional claims
+Cross-jurisdictional liabilities
+475,562
+625,941
+188,566
+155,102
+1,222,353
+915,598
+1,260,948
+1,155,853
+Annual Report 2015
+73
+Social Responsibility
+Level 3 assets
+OUTLOOK
+Securities and other financing instruments issued
+2,368,335
+37.4
+43.9
+10.5
+5.2
+9.5
+Notes: (1) The regulatory indicators of the current period in the table are calculated in accordance with related regulatory requirements,
+definitions and accounting standards applicable to the current period. The comparative figures are not adjusted and restated.
+CBRC adjusted the loan-to-deposit ratio from a regulatory indicator to a monitoring indicator in 2015.
+(2)
+(3)
+Pursuant to the Administrative Measures for Liquidity Risk Management of Commercial Banks (Provisional), the liquidity coverage
+ratio of commercial banks shall reach 100% by the end of 2018. During the transitional period, such ratio shall reach 60%, 70%,
+80% and 90% by the end of 2014, 2015, 2016 and 2017, respectively.
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and those under IFRSS
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2015 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+Corporate Bonds
+The Bank did not issue any corporate bonds which shall be disclosed according to the No. 38 Standards on the Content and
+Format of Information Disclosure of Companies with Public Offerings - Content and Format of Annual Report of Corporate
+Bonds.
+1,630,141
+72
+Discussion and Analysis
+GLOBAL SYSTEMICALLY IMPORTANCE ASSESSMENT INDICATORS OF COMMERCIAL
+BANKS
+In RMB millions
+Indicator
+2015
+2014
+Balance of adjusted on- and off-balance sheet assets
+23,813,992
+23,409,777
+Intra-financial system assets
+1,453,661
+2,191,729
+Intra-financial system liabilities
+ICBC
+Taking "Providing outstanding financial services serving the customers, providing return to shareholders, realizing
+employee potential, contributing to society" as the objective of the Bank's social responsibility, the Bank is dedicated to
+realizing sustainable development of economy, environment and society and maximization of comprehensive value based
+on the general appeal of all stakeholders in social development. The Bank gained extensive social recognition by its good
+performance in social responsibility fulfillment, and won various awards, including "Best Social Responsibility Financial
+Institution Award", "Most Respectable Enterprise in China" and "Best Practice Award for Caring for Climate Change and
+Environment Protection".
+ICBC
+In 2015, the Bank further strengthened its economic capital management, improved the policies on economic capital
+measurement and quota management and continued to intensify the capital constraint mechanism, in order to enhance
+the capital management efficiency and vigorously promote operational management and business front-line application of
+economic capital.
+(24,839)
+11,665
+11,670
+Goodwill
+8,478
+8,487
+Other intangible assets other than land use rights
+1,356
+1,279
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+(3,869)
+(3,796)
+Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+5,700
+5,700
+Net core tier 1 capital
+1,701,495
+1,486,733
+Additional tier 1 capital
+Additional tier 1 capital instruments and related premium
+79,567
+79,375
+34,500
+34,428
+Valid portion of minority interests
+192
+(5,799)
+2,191
+4,340
+650,308
+Discussion and Analysis
+As at the end of 2015, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 12.87%, 13.48% and 15.22%, respectively,
+complying with regulatory requirements. In 2015, the Bank's profits maintained continuous growth and effectively
+replenished the core tier 1 capital. The Bank proactively carried out external capital replenishments and effectively
+replenished the additional tier 1 capital and tier 2 capital. Meanwhile, the Bank further reinforced its capital constraint
+mechanism so that the growth rate of risk-weighted assets was controlled effectively and that the capital adequacy ratio
+remained at a moderate level.
+CAPITAL ADEQUACY RATIO
+In RMB millions, except for percentages
+At
+Others
+Item
+Core tier 1 capital
+Paid-in capital
+Valid portion of capital reserve
+Surplus reserve
+General reserve
+Retained profits
+72
+Valid portion of minority interests
+31 December 2015
+At
+31 December 2014
+1,713,160
+1,498,403
+356,407
+353,495
+151,963
+144,874
+178,040
+150,752
+246,356
+221,622
+781,853
+Core tier 1 capital deductions
+Net tier 1 capital
+1,781,062
+1,521,233
+14.53%
+Capital adequacy ratio
+Notes: (1) Please refer to "Note 55. (d) to the Financial Statements: Capital management".
+(2) Refers to risk-weighted assets after capital floor and adjustments.
+Annual Report 2015
+69
+Discussion and Analysis
+Please refer to the 2015 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement of the Bank.
+LEVERAGE RATIO
+Item
+Net tier 1 capital
+Balance of adjusted on- and off-balance sheet assets
+Leverage ratio
+In RMB millions, except for percentages
+15.22%
+At
+31 December 2014
+1,521,233
+1,781,062
+23,813,992
+7.48%
+23,409,777
+6.50%
+Note: Data at the end of 2015 are calculated based on relevant provisions in the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) promulgated by CBRC in 2015. Please refer to "Unaudited Supplementary Financial Information" for details on
+disclosed leverage ratio information. Data at the end of 2014 are calculated based on relevant provisions in the Administrative
+Measures for Leverage Ratio of Commercial Banks promulgated by CBRC in 2011.
+Capital Financing Management
+The Bank proactively carried out external capital replenishment and constantly promoted the issuance of new capital
+instruments on the basis of achieving capital replenishment by retained profits. Pursuant to the issuance plans on eligible
+tier 2 capital instruments and preference shares as reviewed and approved by the Board of Directors of the Bank, the Bank
+issued tier 2 capital bonds worth of USD2 billion at a fixed price in the overseas markets in September 2015 to replenish its
+tier 2 capital. In November 2015, the Bank privately offered 450 million domestic preference shares, raising a total of RMB45
+billion. All of these funds (net of costs of issuance) were used to replenish additional tier 1 capital. As a result of the issuance
+of preference shares and tier 2 capital instruments, the Bank further strengthened its capital strength and ability to support
+the real economy, optimized its capital structure and raised its risk resistance capability. For details on the issuance of tier 2
+capital bonds and domestic preference shares, please refer to the announcements published by the Bank on the websites of
+SSE and SEHK.
+For details on relevant fundraising activities, please refer to "Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders Details of Securities Issuance and Listing".
+―
+Allocation and Management of Economic Capital
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc. The Bank intensified the adjustment of the aggregate amount
+and structure of risk-weighted assets through its economic capital management, further raising the level of resource
+allocation efficiency and maintaining a satisfactory return on capital.
+At
+70
+12.19%
+11.92%
+Tier 2 capital
+244,641
+306,704
+Valid portion of tier 2 capital instruments and related premium
+180,242
+187,829
+Surplus provision for loan impairment
+63,398
+118,633
+Valid portion of minority interests
+1,001
+242
+Tier 2 capital deductions
+13.48%
+13,600
+Significant minority investments in tier 2 capital instruments issued
+by financial institutions that are not subject to consolidation
+Net capital base
+Risk-weighted assets (2)
+Core tier 1 capital adequacy ratio
+Tier 1 capital adequacy ratio
+13,600
+15,800
+2,012,103
+1,812,137
+13,216,687
+12,475,939
+12.87%
+15,800
+Value Creator
+13.3
+Serving the Real Economy and Improve Livelihood
+317,038,827
+None
+GIC PRIVATE LIMITED
+Foreign legal
+person
+A share
+0.07
+264,466,161
+None
+209,964,262
+Particulars of shareholding of H shareholders were based on the number of shares set out in the Bank's register of shareholders
+maintained at the H share registrar.
+Notes: (1)
+(2)
+The Bank had no shares subject to restrictions on sales.
+(3) Hong Kong Securities Clearing Company Limited held 308,324,177 A shares and HKSCC Nominees Limited held 86,059,557,613
+H shares.
+(4) Central Huijin Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware
+of any connected relations or concert party action among the afore-mentioned shareholders.
+Particulars of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Annual Report 2015
+77
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+◆ Controlling shareholders
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing, its organizational code is 71093296-1, and its legal representative is Ding Xuedong. Huijin is a wholly-
+owned subsidiary of China Investment Corporation. It, in accordance with authorization by the State Council, makes equity
+investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the
+rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the
+goal of preserving and enhancing the value of state-owned financial assets. Huijin does not conduct any other business or
+commercial activity. It does not intervene in the day-to-day business operations of the firms in which it invests.
+As at 31 December 2015, Huijin held approximately 34.71% shares of the Bank. It held shares in the institutions listed
+below:
+No.
+1
+2
+Company name
+0.09
+A share
+Other
+entities
+005L - CT001 Hu
+-180,943,273
+A share
+0.40
+1,420,781,042
+None
+1,420,781,042
+Central Huijin Asset Management State-owned
+Co., Ltd. (4)
+legal person
+A share
+0.28
+1,013,921,700
+None
+1,013,921,700
+China Development Bank Corporation
+Anbang Life Insurance Co., Ltd.
+Other
+portfolio
+entities
+A share
+0.11
+390,487,231
+None
+390,487,231
+China Life Insurance Company
+Limited
+Traditional
+- Ordinary insurance
+products
+- Conservative investment
+Industrial and Commercial Bank of China Limited (A; H)
+Huijin's shareholding
+percentage (%)
+34.68
+Shenwan Hongyuan Group Co., Ltd. (A)
+25.03
+14
+China International Capital Corporation Limited (H)
+28.45
+15
+China Securities Co., Ltd.
+40.00
+16
+China Investment Securities Co., Ltd.
+100.00
+17
+Jiantou CITIC Asset Management Co., Ltd.
+13
+70.00
+Guotai Junan Investment Management Co., Ltd.
+14.54
+19
+Central Huijin Asset Management Co., Ltd.
+100.00
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+The second single largest shareholder of the Bank is MOF, which held approximately 34.60% shares of the Bank as at 31
+December 2015. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the financial and taxation policies, and supervising State finance at a macro level.
+◆ Particulars of other Corporate Shareholders Holding 10% Shares or More (excluding HKSCC Nominees
+Limited)
+None.
+◆ Particulars of the De Facto Controller
+None.
+78
+ICBC
+18
+None
+78.57
+12
+34.71
+3
+Agricultural Bank of China Limited (A; H)
+40.03
+-
+Bank of China Limited (A; H)
+64.02
+5
+China Construction Bank Corporation (A; H)
+57.11
+6
+China Everbright Group Ltd.
+55.67
+China Galaxy Financial Holdings Company Limited
+7
+21.96
+8
+China Export & Credit Insurance Corporation
+73.63
+9
+China Reinsurance (Group) Corporation
+71.56
+10
+New China Life Insurance Company Limited (A; H)
+31.34
+11
+China Jianyin Investment Limited
+100.00
+China Everbright Bank Company Limited (A; H)
+4,322,828,137
+4
+A share
+Percentage
+(%)
+I. Shares subject to
+II.
+restrictions on sales
+Shares not subject to
+restrictions on sales
+353,494,213,820
+100.00
+2,912,043,269
+356,406,257,089
+100.00
+1. RMB-denominated
+266,700,169,270
+75.45
+2,912,043,269
+Number of shares
+269,612,212,539
+ordinary shares
+2. Foreign shares
+86,794,044,550
+24.55
+86,794,044,550
+24.35
+listed overseas
+III. Total number of shares
+353,494,213,820
+100.00
+2,912,043,269
+356,406,257,089
+100.00
+75.65
+-
+Conversion of
+convertible bonds
+Increase/decrease
+during the
+reporting period
+1.21
+The Bank is dedicated to meeting the essential requirement that finance shall serve the real economy. It constantly improved
+the efficiency of financial services, reasonably controlled the direction and pace of lending, strictly controlled credit risks and
+accelerated financial innovations to support the healthy development of the real economy. It helped to advance economic
+structural transition and upgrade, and focused on supporting energy saving and environmental protection, new energy,
+high-end equipment manufacturing, advanced manufacturing and other strategic emerging sectors and cultural industries,
+and promoted balanced development between regions. It increased support for small and micro-enterprises, "Sannong"
+(agriculture, farmers and rural areas) and consumer finance, made active efforts to satisfy the financial service demand in
+people's livelihood, and was dedicated to developing inclusive finance, thus demonstrating responsibilities and values of a
+large bank.
+Brand Builder
+-
+Striving for Service Innovation to Build a Global Brand
+The Bank carried out activities themed the "Service Experience Building Year" to comprehensively improve service quality by
+enhancing customer experience with onsite service, multi-channel service and satisfaction of customer needs. In response
+to the market demand of the internet era, it grasped the essence of value creation and risk prevention and control of the
+financial services, embedded the internet thinking in product innovation and promotion, upgraded the e-ICBC system,
+and constantly improved service delivery. Besides, the Bank actively improved its overseas strategic layout to support the
+internationalization of RMB and the implementation of the "One Belt and One Road" initiative, and provided full financial
+support for Chinese-funded enterprises in "Going Global" and international capacity cooperation by strengthening its global
+service capacity and competitiveness.
+Green Bank
+Advocating Green Finance to Advance Ecological Progress
+The Bank upheld the green and low-carbon concept throughout the process of service delivery, improved the green credit
+system, strengthened process management and risk management and control of green credit, and improved the levels of
+execution, IT-based management and values of green credit. It upgraded green services in an all-round way by promoting
+the intelligent service mode at outlets and accelerating the construction of and innovation in channels like mobile banking,
+telephone banking and internet banking. It constantly strengthened the green and environmental protection awareness of
+employees, combined the low-carbon and healthy concept with outdoor activities, and took practical actions in green public
+welfare. It continued to promote IT application in office work and adopted innovative energy saving and emission reduction
+modes to advance green operations.
+74
+ICBC
+Social Responsibility
+Creditworthy Bank - Strengthening Internal Control and Compliance to Build
+Creditworthy Finance
+At 31 December 2015
+The Bank included customer rights protection into its corporate governance and business development strategy, constantly
+improved the customer rights protection mechanism, refined product and service charging policies, handled customer
+complaints in a timely and proper manner, and conducted financial knowledge publicity. It adhered to the guideline of
+compliance culture, strengthened the compliance management mechanism, advanced the construction of the internal
+control system, supervised employees in terms of integrity and self-discipline, and built up its image as a creditworthy,
+compliant and clean enterprise. It deepened the building of the safest bank, reinforced centralized procurement
+management, earnestly fulfilled the social duties and legal obligations concerning anti-money laundering, and played a
+leading role in fostering a trustworthy financial consumption environment.
+Harmonious Bank - Protecting Employee Rights and Interests to Create
+Harmonious Finance
+Adhering to the "people-oriented" concept, the Bank constantly improved labor and employment systems and fulfilled all
+obligations stipulated in relevant national policies. It gave full play to the role of the employees' congress and trade union in
+protecting the rights and interests of employees, and made its operations as transparent as possible. It attached importance
+to the growth of employees, provided them with diverse career development paths, implemented the whole-process
+performance management system, improved employee training and certification, and promoted integration of employees.
+It gave high attention to employee health and safety, improved the relief mechanism for employees in need, and cared for
+female employees and retirees, so as to build a harmonious bank where employees and the bank grow together.
+Charity Bank - Engaging in Public Undertakings and Foster Community Concept
+Committed to the balance between economic benefits and social benefits, the Bank carried out activities such as recognizing
+outstanding rural teachers, subsidizing financially challenged university students and engaging in green poverty alleviation
+and poverty reduction through financial services to boost the economic and social development of poverty-stricken areas. It
+showed care for the vulnerable groups and conducted social support activities such as the Bright Program and the disaster
+relief efforts after the explosion in Tianjin. It held the Banking Product Innovative Design Competition for college students
+and granted loans to university students from poor families. It also encouraged employees at home and abroad to take part
+in voluntary services, launched the online charity store, and was committed to building a brand that is known for its caring
+about society.
+For more details on the Bank's social responsibilities, please refer to the 2015 Social Responsibility Report of Industrial and
+Commercial Bank of China Limited published on its official website.
+Annual Report 2015
+75
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+Changes in Ordinary Shares
+DETAILS OF CHANGES IN SHARE CAPITAL
+At 31 December 2014
+Number of shares
+Percentage
+(%)
+-
+Note: "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the Content
+and Format of Information Disclosure of Companies with Public Offerings Content and Format of the Report of Change in
+Corporate Shareholding" (Revision 2007) of CSRC.
+Unit: Share
+The Bank did not conduct any rights issue or issued any convertible bonds during the reporting period.
+123,316,451,864
+None
+Hong Kong Securities Clearing
+A share
+0.09
+Company Limited/
+Foreign legal
+308,324,177
+None
+-316,704,584
+HKSCC Nominees Limited (3)
+person
+H share
+34.60
+86,059,557,613
+38,517,695
+China Securities Finance Co., Ltd. State-owned
+Ping An Life Insurance Company
+of China, Ltd. Traditional
+-Ordinary insurance products
+legal person
+A share
+1.23
+4,374,260,086
+None
+4,170,647,177
+Sycamore Investment Platform
+Co., Ltd.
+Details of Securities Issuance and Listing
+Other
+entities
+State-owned
+legal person
+Unknown
+A share
+24.15
+MOF
+For details on the issuance of preference shares of the Bank, please refer to "Details of Changes in Share Capital and
+Shareholding of Substantial Shareholders - Particulars of Preference Shares".
+The Bank issued tier 2 capital bonds worth of USD2.0 billion offshore on 15 September 2015. Such tier 2 capital bonds were
+10-year bonds at a fixed coupon rate of 4.875%. For information on the tier 2 capital bonds and other bonds issued by the
+Bank and its subsidiaries, please refer to "Note 38. to the Financial Statements: Debt Securities Issued" for details.
+State-owned
+The Bank did not have any employee shares.
+Number of Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had a total number of 624,193 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 134,869 holders of H shares and 489,324 holders of A shares. As
+at the end of the month immediate before the release day of the Annual Report (29 February 2016), the Bank had a total
+number of 634,877 ordinary shareholders and no holders of preference shares with voting rights restored.
+76
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Unit: Share
+Increase/
+decrease of
+share during
+Name of shareholder
+Nature of
+shareholder
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK (The following data are
+based on the register of shareholders as at 31 December 2015)
+shares held
+123,717,852,951
+Class of
+shares
+Shareholding
+percentage
+(%)
+Number of
+Total number of
+Huijin
+-438,000,000
+State-owned A share
+34.71
+None
+pledged or
+locked-up shares
+the reporting
+period
+Female
+Zheng Fuqing
+Ge Rongrong
+47
+January 2012-January 2018
+Non-executive Director
+Male
+58
+Fu Zhongjun
+Non-executive Director
+Male
+Non-executive Director
+December 2013-December 2016
+51
+January 2012-January 2018
+Female
+Male
+Wang Xiaoya
+June 2015-June 2018
+52
+Zhang Hongli
+53
+Executive Director,
+50
+Non-executive Director
+June 2015-June 2018
+Wang Xiquan
+Executive Director,
+Male
+55
+June 2015-June 2018
+Senior Executive Vice President
+Senior Executive Vice President
+February 2015-February 2018
+Male
+Non-executive Director
+December 2009-March 2016
+Or Ching Fai
+Independent Non-executive Director
+Male
+66
+May 2012-June 2018
+58
+Hong Yongmiao
+51
+August 2012-December 2018
+Yi Xiqun
+Male
+Male
+Independent Non-executive Director
+Independent Non-executive Director
+Fei Zhoulin
+Male
+Kenneth Patrick Chung
+Male
+57
+March 2015-March 2018
+Cheng Fengchao
+Non-executive Director
+Male
+Independent Non-executive Director
+56
+Malcolm Christopher
+Independent Non-executive Director
+Male
+71
+December 2009-March 2016
+McCarthy
+March 2015-March 2018
+Chairman of the Board of Supervisors
+Domestic
+preference shares
+July 2013-July 2016
+Company of China Ltd.
+owned legal person preference shares
+10,000,000
+10,000,000
+2.2
+None
+Domestic
+Notes: (1) Particulars of shareholding of preference shareholders were based on the number of shares set out in the Bank's register of
+preference shareholders maintained.
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares held by preference shareholders in total
+number of domestic preference shares.
+◆ Dividend Distribution of Preference Shares
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the first dividend
+distribution plan in respect of the Bank's offshore preference shares at the meeting of its Board of Directors on 30 October
+2015. Dividends on the Bank's offshore preference shares are paid annually in cash, and calculated based on the aggregate
+value of the offshore preference shares. The dividends of the Bank's offshore preference shares will be non-cumulative. The
+Bank's offshore preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled to any
+82
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are
+both wholly-owned subsidiaries of China National Tobacco Corporation. Save as disclosed above, the Bank is not aware of
+any connected relations or concert party action among the afore-mentioned preference shareholders and among the afore-
+mentioned preference shares and top 10 ordinary shareholders.
+distribution of residual assets of the Bank together with the ordinary shares. According to the dividend distribution plan in
+the offshore preference share issuance proposal, the Bank will distribute a dividend of USD196,000,000, EUR40,000,000
+and RMB800,000,000 on the offshore preference shares (pre-tax), aggregating to approximately RMB2,331 million.
+According to relevant laws, when the Bank distributes dividends for offshore preference shares, the enterprise income tax
+shall be withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the offshore
+preference shares, the Bank will pay the relevant taxes, in addition to the dividends for offshore preference shares.
+Domestic non-state-
+SSF
+Other entities
+68
+preference shares
+10,000,000
+10,000,000
+2.2
+Casualty Insurance
+None
+Other entities
+10,000,000
+10,000,000
+2.2
+None
+Ping An Property &
+China National Tobacco
+Corporation
+Heilongjiang Branch
+For particulars of the Bank's distribution of dividends on offshore preference shares, please refer to the announcements of
+the Bank on the websites of SSE, SEHK and the Bank. The afore-said dividends have been fully paid in cash on 10 December
+2015.
+During the reporting period, the Bank did not distribute any dividend on domestic preference shares.
+In 2015, distribution of dividends on preference shares by the Bank is shown as follows:
+Basic Information on Directors, Supervisors and Senior Management
+Tenure
+Name
+Jiang Jianqing
+Position
+Gender
+Age
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+Chairman of the Board of Directors,
+Executive Director
+62
+October 2005-January 2018
+Yi Huiman
+Vice Chairman, Executive Director,
+President
+Male
+51
+Male
+83
+Annual Report 2015
+According to the Rules for Distinguishing Financial Liabilities and Equity Instruments and Relevant Accounting Treatment (Cai
+Kuai [2014] No. 13) promulgated by MOF as well as other accounting standards and main issuance clauses of the Bank's
+preference shares, issued and existing preference shares of the Bank excluded contractual obligations of cash on delivery
+or other financial assets and contractual obligations of settlement by delivering variable equity instruments, and shall be
+calculated as other equity instruments
+Type of preference share
+Offshore preference shares
+Domestic preference shares
+♦ Redemption or Conversion of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+2015
+Dividend
+distributed
+Dividend
+(pre-tax,
+in RMB
+rate
+6%
+millions)
+2,331
+4.5%
+◆ Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not restore any voting right of preference share.
+◆ Accounting Policy Adopted for Preference Shares and Grounds
+Qian Wenhui
+December 2013-December 2016
+Capacity
+Beneficial owner
+Independent Non-executive Director
+84
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Notes: (1)
+(2)
+Please refer to the section headed "Directors, Supervisors, Senior Management, Employees and Institutions - Appointment and
+Removal".
+November 2010-June 2015
+The current terms of Mr. Jiang Jianqing, Mr. Yi Huiman, Mr. Zhang Hongli and Mr. Wang Xiquan as Directors of the Bank are
+set out in the above table and their terms as Senior Management members of the Bank are specified in the section headed
+"Directors, Supervisors, Senior Management, Employees and Institutions — Biographies of Directors, Supervisors and Senior
+Management". Mr. Hu Hao was appointed Senior Executive Vice President of the Bank as of November 2015 and Board Secretary
+of the Bank as of December 2010.
+(4) According to the latest regulation of CSRC, the day of first appointment of a re-elected director, supervisor and senior
+management member shall be the commencement date of his/her tenure as indicated in the above table.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the directors, supervisors and Senior
+Management members of the Bank, whether they are incumbent or have left office during the reporting period; except Mr.
+Zhang Hongli who held 2,000 H shares of the Bank, held shares or share options or were granted restricted shares of the Bank,
+and there was no change during the reporting period.
+Biographies of Directors, Supervisors and Senior Management
+Jiang Jianqing, Chairman, Executive Director
+Mr. Jiang has served as Chairman of the Board of Directors and Executive Director of Industrial and Commercial Bank
+of China Limited since October 2005. He joined ICBC in 1984, and was appointed as President in February 2000. Mr.
+Jiang previously served in several positions including Deputy Head of ICBC Shanghai Branch, President of Shanghai Urban
+Cooperation Commercial Bank (now known as Bank of Shanghai), Head of ICBC Shanghai Branch and Senior Executive Vice
+President of ICBC. At present, he is concurrently Vice Chairman of China Society for Finance and Banking, and a tutor to
+PhD students of Shanghai Jiao Tong University. Mr. Jiang graduated from Shanghai University of Finance and Economics and
+Shanghai Jiao Tong University, and received a Master's degree in Engineering and a Doctorate degree in Management from
+Shanghai Jiao Tong University.
+ICBC
+(3) According to the Articles of Association, before the newly elected directors/supervisors take office, the current directors/
+supervisors shall continue to act as directors/supervisors.
+88
+50
+Chief Information Officer
+Male
+60
+May 2009-December 2015
+Li Mingtian
+Employee Supervisor
+Male
+Male
+59
+Zheng Wanchun
+Senior Executive Vice President
+Male
+51
+October 2013-October 2015
+Lin Xiaoxuan
+July 2012-September 2015
+External Supervisor
+Mr. Or has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since May
+2012. Mr. Or previously served as General Manager and a Director of The Hongkong and Shanghai Banking Corporation
+Limited, Chairman of HSBC Insurance Limited, Chief Executive and Vice Chairman of Hang Seng Bank Limited, Chairman
+of Hang Seng Insurance Company Limited and Hang Seng Bank (China) Limited, Director of Cathay Pacific Airways Limited,
+and a Director of Hutchison Whampoa Limited. He was Chairman of the Hong Kong Association of Banks, Vice President
+and a Council Member of the Hong Kong Institute of Bankers, Chairman of the Financial Services Advisory Committee and a
+member of the Services Promotion Programme Committee of the Hong Kong Trade Development Council, a member of the
+Risk Management Committee of the Hong Kong Exchanges and Clearing Limited, a member of the Aviation Development
+Advisory Committee, Chairman of Executive and Campaign Committee of the Community Chest of Hong Kong, Acting
+Chairman of the Council of City University of Hong Kong, a Council Member of The University of Hong Kong, and an
+Adviser of the Employers' Federation of Hong Kong. Mr. Or currently acts as Chairman, CEO and Executive Director of China
+Strategic Holdings Limited, Chairman and Independent Non-executive Director of Esprit Holdings Limited, Vice Chairman
+and Independent Non-executive Director of G-Resources Group Limited, Independent Non-executive Director of Chow Tai
+Fook Jewellery Group Limited, Television Broadcasts Limited and Regina Miracle International Ltd., and Vice Patron of the
+Board of the Community Chest of Hong Kong. Mr. Or graduated from The University of Hong Kong with a Bachelor's degree
+in Economics and Psychology. He is an Honorary Doctorate of Social Science of City University of Hong Kong. Mr. Or was
+awarded a Silver Bauhinia Star from the Hong Kong Special Administrative Region and Honorary University Fellowships from
+The University of Hong Kong in 2009. He is a Justice of the Peace.
+Mr. Chung has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited
+since December 2009. He joined Deloitte Haskins and Sells London Office in 1980. He became a partner of
+PricewaterhouseCoopers in 1992, and was a financial service specialist of PricewaterhouseCoopers (Hong Kong and China)
+since 1996. Previously, he was the human resources partner of PricewaterhouseCoopers (Hong Kong), the responsible
+partner of the audit department of PricewaterhouseCoopers (Hong Kong and China), the global lead partner of the audit
+engagement team for Bank of China Limited, the honorary treasurer of The Community Chest of Hong Kong and was a
+member of the Ethics Committee, Limitation of Professional Liability Committee, Communications Committee, and the
+Investigation Panel of the Hong Kong Society of Accountants. Mr. Chung has also served as the audit partner for the
+restructurings and initial public offerings of Bank of China Limited, Bank of China (Hong Kong) Limited and BOCOM and
+Chairman of the Audit Committee of the Harvest Real Estate Investments (Cayman) Limited. Currently, Mr. Chung serves as
+Vice Chairman of International Social Service Hong Kong Branch. He is a member of the Institute of Chartered Accountants
+in England and Wales, a member of the Hong Kong Institute of Certified Public Accountants and a member of the Macau
+Society of Certified Practising Accountants. Mr. Chung received a bachelor's degree in economics from the University of
+Durham.
+Ms. Ge has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012.
+She has worked at Huijin since 2005 as Deputy Officer and Officer of CCB Share Management Division of the Banking
+Department and an Employee Supervisor. Ms. Ge previously served as Lecturer at the Economics Management College of
+Beijing University of Industry in 1994, and subsequently served as Assistant Researcher at China Eagle Securities Company
+and staff member of the Department of Public Offering and Supervision at China Securities Regulatory Commission. Ms.
+Ge graduated from China University of Technology and received a Doctorate degree in Management. Ms. Ge also received
+a Bachelor's degree in Engineering from Zhejiang University and a Master's degree in Economics from Beijing Normal
+University. She is a senior economist.
+Ge Rongrong, Non-executive Director
+Ms. Wang has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012. She
+has joined Central Huijin Investment Ltd. since 2012. She joined the Research Bureau of the People's Bank of China in 1997
+where she served as Deputy Chief of division, Chief of division and Deputy Director and served as Deputy Mayor of Tongliao
+City in Inner Mongolia Autonomous Region at the same time. Ms. Wang was a researcher and a Member of the Post
+Doctoral Academic Committee and a Post-Doctoral Co-mentor at the People's Bank of China Research Institute of Finance.
+She previously taught at Central China Normal University where she served as Assistant Lecturer and Lecturer. Ms. Wang
+graduated from the Graduate School of Chinese Academy of Social Sciences and received a Doctorate degree in Economics.
+Wang Xiaoya, Non-executive Director
+Mr. Wang has served as Executive Director of Industrial and Commercial Bank of China Limited since June 2015, and Senior
+Executive Vice President since September 2012. He joined ICBC in 1985 and has served as a member of Senior Management
+of Industrial and Commercial Bank of China Limited since April 2010. He previously served in several positions at ICBC,
+including Head of Yangquan Branch in Shanxi Province, Deputy Head of Hebei Branch, General Manager of the Asset Risk
+Management Department, Director-General of the Internal Audit Bureau and General Manager of the Human Resources
+Department of the Head Office. He graduated from Nanjing University, and received a Doctorate degree in Management.
+Wang Xiquan, Executive Director, Senior Executive Vice President
+86
+Mr. Zhang has served as Executive Director of Industrial and Commercial Bank of China Limited since June 2015, and Senior
+Executive Vice President since May 2010. He worked as Financial Manager at the headquarters of Hewlett-Packard, Director
+and Head of the China operations of Schroders PLC, Executive Director of Goldman Sachs Asia and Chief Representative of
+Goldman Sachs (China) LLC Beijing Representative Office, and Head of Deutsche Bank Investment Banking Greater China,
+Vice Chairman of Deutsche Bank Asia and Chairman of Deutsche Bank China, member of the Global Banking Management
+Committee and Head of Asia-Pacific of Deutsche Bank Global Banking and Chairman of Deutsche Bank (China) Co., Ltd.
+He was concurrently Chairman of ICBC International Holdings Limited and Chairman of Industrial and Commercial Bank of
+China (Brasil) S.A., and once served as Vice Chairman of Standard Bank Group Limited (SBG) and Chairman of Industrial
+and Commercial Bank of China (USA) NA. Mr. Zhang received a Bachelor's degree from Heilongjiang Bayi Agricultural
+University and a Master's degree in Genetics from the University of Alberta, Canada, as well as a Master's degree in Business
+Administration (MBA) from the Santa Clara University in California, USA, and a Doctorate degree in Management Science
+and Engineering from the Chinese Academy of Social Sciences.
+Directors, Supervisors, Senior Management, Employees and Institutions
+85
+Annual Report 2015
+Mr. Qian has served as Chairman of the Board of Supervisors of Industrial and Commercial Bank of China Limited since
+June 2015. He was appointed as Executive Vice President of Bank of Communications Co., Ltd. (BOCOM) in October 2004
+and became Executive Director and Executive Vice President of BOCOM as of August 2007. During his tenure at China
+Construction Bank (CCB), he served as Deputy General Manager of Shanghai Branch, General Manager of the Asset and
+Liability Management Department and Director of the Restructuring and Reform Office. Besides, Mr. Qian has served in
+several other positions, e.g. Senior Vice President of BOCOM and concurrently General Manager of BOCOM Shanghai
+Branch, Chairman of BOCOM Life Insurance Company and Chairman of BOCOM Schroder Fund Management Co., Ltd. He
+graduated from Shanghai University of Finance and Economics with an MBA degree. He is a senior economist.
+Qian Wenhui, Chairman of the Board of Directors
+Domestic
+Zhang Hongli, Executive Director, Senior Executive Vice President
+Or Ching Fai, Independent Non-executive Director
+ICBC
+Fu Zhongjun, Non-executive Director
+Kenneth Patrick Chung, Independent Non-executive Director
+Sir M.C. McCarthy has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited
+since December 2009. He worked first as an economist for ICI before joining the UK Department of Trade and Industry
+where he held various posts from economic adviser to undersecretary. He subsequently worked as a senior executive of
+Barclays Bank first in Japan and then North America. He served as Chairman and Chief Executive of Office of Gas and
+Electricity Markets (Ofgem), Chairman of the Financial Services Authority (FSA), Non-executive Director of HM Treasury,
+Chairman of the board of directors of J.C. Flowers & Co. UK Ltd, and Non-executive Director of NIBC Holding N.V., NIBC
+Bank N.V., OneSavings Bank plc and Castle Trust Capital plc. Currently, Sir M.C. McCarthy serves as Non-executive Director
+of Intercontinental Exchange, Trustee of the Said Business School of Oxford University and IFRS Foundation, and Chairman in
+the United Kingdom of Promontory Financial Group. He is an Honorary Fellow of Merton College, an Honorary Doctorate of
+the University of Stirling and the Cass Business School, and a Freeman of the City of London. He has a MA History at Merton
+College of Oxford University, PhD Economics of Stirling University, and MS at Graduate School of Business of Stanford
+University.
+Malcolm Christopher McCarthy, Independent Non-executive Director
+Directors, Supervisors, Senior Management, Employees and Institutions
+87
+88
+Directors, Supervisors, Senior Management, Employees and Institutions
+Annual Report 2015
+Cheng Fengchao, Non-executive Director
+Mr. Fei has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015. He
+joined MOF in 1995 as Deputy Head of General Section and Head of Business Section II of Shaanxi Finance Ombudsman
+Office, Assistant Ombudsman and Vice Ombudsman of Shaanxi Finance Ombudsman Office, and Ombudsman of Ningxia
+Finance Ombudsman Office. Mr. Fei graduated from the Correspondence Institute of the Party School of the Central
+Committee of C.P.C. in economic management.
+Fei Zhoulin, Non-executive Director
+Mr. Zheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since February 2015.
+He joined MOF in 1989 as Deputy Head and Head of Shanxi Finance Ombudsman Office, and Assistant Ombudsman
+and Associate Counsel of Shanxi Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central
+Committee of C.P.C. majoring in law theory. He is an economist.
+Zheng Fuqing, Non-executive Director
+Mr. Fu has served as Non-executive Director of Industrial and Commercial Bank of China Limited since December 2013. He
+joined MOF in 1983, and once served as Secretary of Organizational Communist Youth League of MOF, Deputy Chief and
+Chief of the Business and Finance Department, Finance Supervision Department and Inspection and Supervision Department
+of MOF, Vice Ombudsman of Shanghai Finance Ombudsman Office of MOF, Vice Ombudsman (person-in-charge) of Anhui
+Finance Ombudsman Office of MOF, Associate Counsel and Counsel of Beijing Finance Ombudsman Office of MOF. He
+served as the Non-executive Director of Industrial and Commercial Bank of China Limited and China Everbright Industry
+Group Limited. Mr. Fu graduated from Sichuan University and obtained a Bachelor's degree in Philosophy.
+Mr. Cheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015.
+He joined Huijin in 2009, and served as Deputy Director of Finance Bureau of Pingquan County in Hebei Province, Deputy
+Director of Finance Office of Hebei Province, Head of Hebei Certified Public Accountants, Vice Chairman and Secretary
+of Hebei Institute of Certified Public Accountants, Deputy General Manager of Shijiazhuang Office, General Manager of
+Evaluation Management Department, General Manager of Tianjin Office and General Manager of Development Research
+Department of China Great Wall Asset Management Corporation, and Non-executive Director of Agricultural Bank of China
+Limited. Currently, he also acts as guest professor of Peking University HSBC Business School, tutor to PhD students of
+Hunan University, graduate supervisor for Graduate School of Chinese Academy of Social Sciences, Central University of
+Finance and Economics and Capital University of Economics and Business, and member of the Expert Advisory Committee
+for Mergers, Acquisitions and Restructurings of CSRC. He obtained Doctorate degree in management from Hunan University.
+Now, he is a senior accountant, PRC Certified Public Accountant and China's Certified Public Valuer.
+June 2008-June 2015
+61
+Male
+Zhang Wei
+Employee Supervisor
+Male
+53
+August 2006-September 2018
+Hui Ping
+December 2015-December 2018
+Employee Supervisor
+55
+September 2015-September 2018
+Gu Shu
+Senior Executive Vice President
+Male
+48
+Male
+October 2013-
+49
+External Supervisor
+Male
+69
+April 2015-April 2018
+Wang Chixi
+Shareholder Supervisor
+Female
+Male
+60
+Dong Juan
+External Supervisor
+Female
+63
+May 2009-May 2015
+Qu Qiang
+October 2005-January 2018
+Wang Jingdong
+Senior Executive Vice President
+Male
+Li Jun
+Non-executive Director
+Male
+56
+December 2008-March 2015
+Wong Kwong Shing,
+Directors, Supervisors and Senior Management Leaving Office
+Independent Non-executive Director
+67
+January 2009-April 2015
+Frank
+Zhao Lin
+Meng Yan
+Chairman of the Board of Supervisors
+Male
+August 2006-
+60
+Male
+53
+December 2013-
+Wang Lin
+Secretary of Party Discipline Committee
+Male
+50
+July 2015-
+Hu Hao
+Senior Executive Vice President,
+Male
+53
+November 2015-
+Board Secretary
+Wei Guoxiong
+Chief Risk Officer
+Anthony Francis Neoh
+Corporation Shandong
+Branch
+Long
+position
+9
+Long
+position
+5.98
+1.46
+9,616,000
+Short
+position
+0.01
+5,189,411,277
+0.00
+79
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Conversion and Redemption of Convertible Bonds
+As at 12 February 2015, a total amount of RMB24,985,764,000 ICBC Convertible Bonds were converted into A shares of
+the Bank, and the remaining RMB14,236,000 ICBC Convertible Bonds were fully redeemed by the Bank. The redemption
+payment date was 26 February 2015 and the delisting date of ICBC Convertible Bonds was 26 February 2015. For the
+redemption results, payment and delisting details, please refer to the Announcement on Results of Redemption and Delisting
+of ICBC Convertible Bonds issued by the Bank on 16 February 2015.
+Preference Shares
+◆ Issuance and Listing of Preference Shares in Latest Three Years
+Annual Report 2015
+Upon approval by CBRC pursuant to Yin Jian Fu [2014] No. 801 and by CSRC pursuant to Zheng Jian Xu Ke [2014] No.
+1229, the Bank privately offered non-cumulative, non-participating and perpetual offshore preference shares in U.S. dollar,
+Euro and Renminbi on 10 December 2014 (please see the table below for details). The offshore preference shares issued by
+the Bank were listed on SEHK on 11 December 2014. Each offshore preference share had a nominal value of RMB100. The
+USD offshore preference shares, EUR offshore preference shares and RMB offshore preference shares were fully paid and
+issued in U.S. dollar, Euro and Renminbi. The offshore preference shares had no maturity. They had no less than six qualified
+placees. They were offered to professional investors only rather than retail investors and transferred privately in the OTC
+market only.
+Interest of
+controlled
+corporations
+position
+1.05
+approved
+available
+lending agent
+for
+lending
+BlackRock, Inc.
+Total
+Beneficial owner
+5.99
+1.46
+214,762,754
+Short
+0.25
+0.06
+5,195,998,386
+4.30
+In accordance with the reference price of RMB exchange rate on 10 December 2014 published by the China Foreign
+Exchange Trade System, total proceeds from the issuance of offshore preference shares amounted to approximately
+RMB34.55 billion. After deduction of commissions and offering expenses, net proceeds from the issuance amounted to
+around RMB34.43 billion. All proceeds, after deduction of the expenses relating to the issuance will be used to replenish
+additional tier 1 capital and increase capital adequacy ratio.
+Dividend
+40,000,000
+RMB preference
+shares
+84602
+6%
+RMB12,000,000,000
+EUR15
+RMB100
+The Bank privately issued 450 million preference shares in domestic market on 18 November 2015 upon the approval by
+CBRC pursuant to Yin Jian Fu [2015] No. 189 and by CSRC pursuant to Zheng Jian Xu Ke [2015] No. 1023. Each domestic
+preference share had a nominal value of RMB100 and were issued at nominal value. The coupon rate, as determined by
+benchmark rate plus a fixed spread, shall remain unchanged for the first 5 years commencing from the issuance date.
+Subsequently, the benchmark rate shall be readjusted once every 5 years during which the coupon rate shall remain
+unchanged. The coupon rate for the Domestic Preference Shares is determined at 4.50% through price discovery. The
+dividends of the domestic preference shares will be non-cumulative. Holders of domestic preference shares are only entitled
+to dividends at the prescribed coupon rate, and are not entitled to any distribution of residual assets of the Bank together
+with the holders of ordinary shares. Upon approval by SSE pursuant to Shang Zheng Han [2015] No. 2391, the domestic
+preference shares were listed on the integrated trading platform of SSE for transfer as of 11 December 2015 (stock name:
+ICBC Preference Share 1, stock code: 360011). Total proceeds from the issuance amounted to RMB45.0 billion, net proceeds
+from the issuance amounted to around RMB44.95 billion. All proceeds after deduction of the expenses relating to the
+issuance will be used to replenish additional tier 1 capital.
+For particulars of the Bank's issue of domestic and offshore preference shares, please refer to the announcements of the
+Bank on the websites of SSE, SEHK and the Bank.
+80
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Changes in Preference Shares
+120,000,000
+Type of offshore
+preference share
+EUR600,000,000
+4604
+Full amount of
+proceeds per
+Stock code
+rate
+Total amount
+share
+Number of
+issued shares
+6%
+USD preference
+4603
+6%
+USD2,940,000,000
+USD20
+147,000,000
+EUR preference
+shares
+shares
+As at the end of the reporting period, the Bank had 28 preference shareholders (or proxies), including two offshore
+preference shareholders (or proxies) and 26 domestic preference shareholders. As at the end of the month immediate before
+the release day of the Annual Report (29 February 2016), the Bank had 28 preference shareholders (or proxies), including
+two offshore preference shareholders (or proxies) and 26 domestic preference shareholders.
+Shares
+Custodian/
+Percentage of A
+shares (%)
+Nature of
+interests
+Number of A
+shares held
+(share)
+Capacity
+shareholder
+Name of substantial
+Percentage of
+total ordinary
+shares (%)
+HOLDERS OF A SHARES
+As at 31 December 2015, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's shares and relevant shares, which were recorded in the register pursuant to Section 336 of the Securities and
+Futures Ordinance of Hong Kong as follows:
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong
+Kong
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+(share)
+Nature of
+interests
+Percentage of
+H shares (%)
+Interests or short positions of ordinary shares of the Bank:
+Percentage of
+total ordinary
+MOF(1)
+118,006,174,032
+shareholder
+Number of
+H shares held
+Name of substantial
+HOLDERS OF H SHARES
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2015, MOF held 123,316,451,864 shares in the Bank.
+(2) According to the register of shareholders of the Bank as at 31 December 2015, Huijin held 123,717,852,951 shares in the Bank.
+35.00
+Beneficial owner
+46.26
+124,731,774,651
+Beneficial owner
+Huijin (2)
+33.11
+43.77
+Long
+position
+Long
+position
+3,734,395,964
+8,663,703,234
+9.98
+Investment
+504,502,036
+Long
+0.58
+0.14
+manager
+position
+position
+90,880
+Long
+0.00
+0.00
+bare trustee)
+position
+Trustee (excluding
+Mr. Yi has served as Vice Chairman and Executive Director of Industrial and Commercial Bank of China Limited since
+July 2013, and President since May 2013. He joined ICBC in 1985 and has served as a member of Senior Management
+of Industrial and Commercial Bank of China Limited since October 2005. He had previously served in several positions
+including Deputy Head of ICBC Zhejiang Branch, Head of ICBC Jiangsu Branch and ICBC Beijing Branch and Senior Executive
+Vice President of ICBC. He obtained a Master's degree in Executive Business Administration from Guanghua School of
+Management of Peking University.
+0.27
+Long
+shares (%)
+2.43
+Temasek Holdings
+(Private) Limited
+Interest of
+8,682,954,081
+Long
+1.10
+10.00
+controlled
+position
+corporations
+JPMorgan Chase & Co.
+Beneficial owner
+957,009,506
+2.44
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+BANK (The following data are based on the register of offshore preference shareholders as at 31 December 2015)
+Increase/
+decrease
+during the
+Unit: Share
+Company of China, Ltd.
+CCB Trust Co., Ltd.
+State-owned
+legal person
+Domestic non-state-
+owned legal person
+Domestic
+preference shares
+35,000,000
+35,000,000
+5
+7.8
+Domestic
+preference shares
+30,000,000
+30,000,000
+6.7
+None
+None
+6
+Ping An Life Insurance
+Company Limited
+200,000,000
+44.4
+None
+2
+China National Tobacco
+Corporation
+4
+Other entities
+50,000,000
+50,000,000
+11.1
+None
+3
+China Life Insurance
+Domestic
+preference shares
+200,000,000
+BOCOM Schroders Asset
+State-owned
+legal person
+Domestic non-state-
+owned legal person
+15,000,000
+15,000,000
+3.3
+None
+8
+BOC International (China) Domestic non-state-
+preference shares
+Domestic
+owned legal person
+preference shares
+15,000,000
+15,000,000
+3.3
+None
+Limited
+Management Co., Ltd.
+Domestic
+SZITIC Trust Co., Ltd.
+Domestic
+preference shares
+15,000,000
+15,000,000
+3.3
+None
+State-owned
+legal person
+Domestic
+15,000,000
+15,000,000
+3.3
+None
+7
+China Resources
+preference shares
+Domestic
+preference shares
+Other entities
+Corporation
+shares
+1
+Cede & Co.
+Foreign
+USD offshore
+legal person
+on sales
+preference shares
+47.9
+Unknown
+2
+The Bank of New York
+Depository (Nominees)
+Limited
+RMB offshore
+Foreign
+legal person
+147,000,000
+preference shares
+(%)
+restrictions
+Number
+of shares
+Number of
+Shares held
+No.
+Name of
+shareholder
+locked-up
+Nature of
+shareholder
+Type of shares
+period
+at the end of
+the period
+Shareholding
+percentage
+subject to
+pledged or
+reporting
+120,000,000
+39.1
+Unknown
+Class of shares
+Increase/
+decrease
+during the
+reporting
+period
+Number
+Shares held
+at the end of
+the period
+Shareholding
+percentage
+of shares
+subject to
+Nature of
+shareholder
+Number of
+pledged or
+(%)
+on sales
+locked-up
+shares
+1
+China Mobile
+Communications
+restrictions
+shareholder
+No.
+Name of
+EUR offshore
+preference shares
+40,000,000
+13.0
+Unknown
+Notes: (1) Particulars of shareholding of preference shareholders were based on the number of shares set out in the Bank's register of
+preference shareholders maintained.
+(2)
+As the issuance was private offering, the register of preference shareholders presented the information on proxies of placees.
+(3)
+The Bank is not aware of any connected relations or concert party action among the afore-mentioned preference shareholders
+and among the afore-mentioned preference shares and top 10 ordinary shareholders.
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+Annual Report 2015
+81
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF THE BANK (The
+following data are based on the register of domestic preference shareholders as at 31 December 2015)
+Unit: Share
+China National Tobacco
+Yi Huiman, Vice Chairman, Executive Director, President
+1,701,495
+Quarterly Financial Data
+20,609,953
+11,026,331
+22,209,780
+11,933,466
+13,056,846
+Total loans and advances to customers
+24,137,265
+Total assets
+As at the end of reporting period
+(in RMB millions)
+533,508
+(1,947)
+201,457
+1,131,764
+239,221
+Net cash flows from operating activities
+238,532
+262,649
+275,811
+277,131
+278,249
+of the parent company
+Net profit attributable to equity holders
+238,691
+262,965
+276,286
+277,720
+279,106
+Net profit
+308,687
+338,537
+361,612
+18,917,752
+9,922,374
+17,542,217
+8,803,692
+Allowance for impairment losses
+on loans
+1,486,805
+1,269,255
+1,539,239
+2,265,860
+2,016,799
+institutions
+Due to banks and other financial
+13,642,910
+14,620,825
+15,556,601
+16,281,939
+17,825,302
+Due to customers
+16,413,758
+363,235
+17,639,289
+20,409,261
+22,156,102
+Total liabilities
+4,083,887
+4,322,244
+4,433,237
+5,009,963
+5,481,174
+Investment
+220,403
+240,959
+257,581
+280,654
+289,512
+19,072,649
+Equity attributable to equity holders
+363,279
+306,035
+Net interest income
+Annual operating results (in RMB millions)
+2012
+2013
+2014
+2015
+2016
+Financial Data
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Highlights
+ICBC
+4
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong
+KPMG
+International auditors:
+CPAs (Practicing): Song Chenyang and He Qi
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue, Dongcheng
+District, Beijing, PRC
+KPMG Huazhen LLP
+Domestic auditors:
+Name and office address of auditors
+11 December 2015 to 31 December 2016
+618 Shangcheng Road, China (Shanghai) Pilot Free Trade Zone
+Sponsor representatives: Zhang Jianhua and Wu Guomei
+Continuous inspection and supervision period:
+Guotai Junan Investment Management Co., Ltd.
+Sponsor of domestic preference shares:
+Stock code: 360011
+Stock name: I
+Shanghai Stock Exchange
+Domestic Preference Share:
+Stock code: 84602
+471,846
+507,867
+493,522
+443,335
+336,440
+359,455
+360,905
+360,675
+Operating profit
+33,745
+38,321
+56,729
+86,993
+87,894
+189,940
+204,140
+218,674
+220,835
+Profit before taxation
+193,112
+Operating expenses
+529,720
+578,901
+634,858
+668,733
+641,681
+Operating income
+106,064
+122,326
+132,497
+143,391
+144,973
+Net fee and commission income
+417,828
+Impairment losses
+of the parent company
+1,969,751
+1,789,474
+2.66
+2.47
+2.16
+Net interest margin (4)
+2.49
+2.40
+2.46
+2.30
+2.02
+Net interest spread (3)
+23.02
+21.92
+19.96
+17.10
+15.24
+Return on weighted average equity(2)
+1.45
+1.44
+1.40
+1.30
+1.20
+Return on average total assets(1)
+Profitability (%)
+2012
+2013
+2014
+2015
+2016
+Financial Indicators
+2.57
+2.66
+Return on risk-weighted assets (5)
+2.01
+295.55
+257.19
+206.90
+156.34
+136.69
+Allowance to NPL (8)
+0.85
+0.94
+1.13
+1.50
+1.62
+Non-performing loans ("NPL") ratio (7)
+Asset quality (%)
+29.24
+Financial Highlights
+28.80
+26.69
+27.40
+20.02
+21.13
+20.87
+21.44
+22.59
+Cost-to-income ratio (6)
+income to operating income
+Ratio of net fee and commission
+2.66
+2.45
+2.26
+2.16
+27.93
+5
+Annual Report 2016
+The rating results are in the form of "long-term foreign currency deposits rating".
+Per share data (in RMB yuan)
+9,511,205
+11,982,187
+12,475,939
+13,216,687
+14,564,617
+Risk-weighted assets (1)
+1,299,014
+1,572,265
+1,812,137
+2,012,103
+2,127,462
+Net capital base(1)
+1,266,859
+Net asset value per share(2)
+1,521,233
+1,954,770
+Net tier 1 capital(1)
+349,620
+351,390
+1,266,841
+353,495
+1,486,733
+2.35
+1,874,976
+Net core tier 1 capital (1)
+356,407
+356,407
+Share capital
+1,124,997
+1,274,134
+1,530,859
+1,781,062
+Stock name: ICBC CNHPREF1-R
+5.29
+4.23
+(3)
+(2) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments
+at the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+Notes: (1) Data for period since 2013 were calculated in accordance with the Capital Regulation and those for 2012 were calculated in
+accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related regulations promulgated by CBRC.
+A1
+A
+A1
+A
+A1
+A
+A1
+A
+A1
+A
+Moody's(3)
+4.80
+S&P(3)
+0.67
+0.74
+0.78
+0.77
+0.77
+Diluted earnings per share
+0.68
+0.75
+0.78
+0.77
+0.77
+Basic earnings per share
+3.22
+3.63
+Credit rating
+Stock code: 4604
+Stock name: ICBC EURPREF1
+Stock code: 4603
+118
+Significant Events
+115
+Report of the Board of Supervisors
+111
+Report of the Board of Directors
+93
+Corporate Governance Report
+82
+Employees and Institutions
+Directors, Supervisors, Senior Management,
+74
+Shareholding of Substantial Shareholders
+Details of Changes in Share Capital and
+71
+Social Responsibility
+70
+Regulatory Requirements
+© Other Information Disclosed Pursuant to
+68
+Outlook
+65
+– Capital Management
+49
+Risk Management
+30
+Business Overview
+15
+Financial Statement Analysis
+Organizational Chart
+121
+Auditor's Report and Financial Statements
+122
+ICBC (Peru)
+ICBC (New Zealand)
+ICBC (Mexico)
+ICBC (Malaysia)
+ICBC (Macau)
+ICBC (London)
+ICBC (Indonesia)
+ICBC (Europe)
+ICBC (Canada)
+ICBC (Brasil)
+ICBC (Asia)
+ICBC (Argentina)
+ICBC (Almaty)
+Huijin
+14
+Hong Kong Listing Rules
+CSRC
+Company Law
+CBRC
+Capital Regulation
+Bank ICBC (JSC)
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+KIX
+296
+Overseas Branches and Offices
+List of Domestic and
+292
+2016 Ranking and Awards
+Global Systemically Important Banks
+Regulatory Environments
+Economic, Financial and
+Discussion and Analysis
+Capital adequacy ratio (10)
+14.61
+15.22
+14.53
+13.12
+13.66
+Total equity to total assets ratio
+8.21
+8.11
+7.46
+6.76
+6.43
+Risk-weighted assets to total assets
+ratio
+10.57
+60.34
+60.53
+63.34
+54.22
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2)
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(6)
+Calculated by dividing operating expense (less taxes and surcharges) by operating income.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Data for period since 2013 were calculated in accordance with the Capital Regulation and those for 2012 were calculated in
+accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related regulations promulgated by
+CBRC.
+59.51
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+12.19
+13.42
+2345701
+President's Statement
+Chairman's Statement
+Corporate Information
+Financial Highlights
+Important Notice
+Definitions
+CONTENTS
+The Bank consciously unified the social responsibilities
+to its development strategy and operation and
+management activities, gaining wide social recognition
+in the aspects of supporting targeted poverty relief,
+protecting environment and resources, participating in
+social and public welfare undertakings and promoting
+inclusive finance. The Bank was ranked the 1st place
+among the Top 1000 World Banks by The Banker,
+ranked 1st place in the Global 2000 listed by Forbes,
+topped the sub-list of commercial banks of the Global
+500 in Fortune for the fourth consecutive year, and
+took the 1st place among the Top 500 Banking Brands
+of Brand Finance.
+Taking the provision of service to the real economy
+as the starting point and the ultimate goal, the Bank
+remains steadfast in new finance and new service
+under the guidance of new concept, has supported
+the supply-side structural reform and the economic
+transformation and upgrading and has realized healthy
+and sustainable development. Through deepening
+of reform, innovation and operation transformation,
+retail banking, asset management and financial market
+business emerged as the important growth engines of
+profit. The pattern of internationalized and diversified
+operation was further improved, covering 42 countries
+and regions, contributing more to the Bank's profit-
+making.
+Through its continuous endeavor and stable
+development, the Bank has developed into the leading
+bank in the world, possessing an excellent customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek further
+development and has made efforts to build a "bank
+to the satisfaction of customers" while providing a
+wide range of financial products and services to 5,784
+thousand corporate customers and 530 million personal
+customers.
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Company Profile
+Annual Report 2016
+EUR Preference Shares Stock Code: 4604
+RMB Preference Shares Stock Code: 84602
+13.48
+USD Preference Shares Stock Code: 4603
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+H
+ICBC (E
+2.34
+2.43
+2.50
+Capital adequacy (%)
+Core tier 1 capital adequacy ratio (10)
+12.87
+12.87
+11.92
+10.57
+Tier 1 capital adequacy ratio (10)
+Stock Code: 1398
+6
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by
+CBRC in June 2012
+Company Law of the People's Republic of China
+the annual report in respect of H shares
+The "HKExnews" website of SEHK for publication of
+www.sse.com.cn
+the annual report in respect of A shares
+Website designated by CSRC for publication of
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+Selected newspapers for information disclosure
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Telephone: 86-10-66108608
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Guan Xueqing
+Board Secretary and Company Secretary
+Gu Shu and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and compliant hotline: 86-95588
+Telephone: 86-10-66106114
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Registered address and office address
+Yi Huiman
+Legal representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+中國工商銀行股份有限公司(“中國工商銀行”)
+Legal name in Chinese
+Corporate Information
+Legal advisors
+Mainland China:
+King & Wood Mallesons
+40/F, Office Tower A, Beijing Fortune Plaza, 7 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, PRC
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC USDPREF1
+Offshore Preference Share:
+Stock code: 1398
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC
+H Share:
+Stock code: 601398
+Stock name: 工商銀行
+Shanghai Stock Exchange
+A Share:
+Place where shares are listed, and their names and
+codes
+Location where copies of this annual report are kept
+Office of the Board of Directors of the Bank
+Facsimile: 852-28650990
+Telephone: 852-28628555
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong
+3
+Computershare Hong Kong Investor Services Limited
+Telephone: 86-4008058058
+Pudong New Area, Shanghai, PRC
+3/F China Insurance Building, No. 166 Lujiazui Dong Road,
+Shanghai Branch
+China Securities Depository and Clearing Corporation Limited,
+A Share:
+Share Registrars
+10/F, Alexandra House, Chater Road, Central, Hong Kong
+Linklaters
+9/F, Three Exchange Square, Central, Hong Kong
+Allen & Overy
+Hong Kong, China
+20/F, China Resources Building, 8 Jianguomen North Street,
+Dongcheng District, Beijing, PRC
+Jun He Law Offices
+H Share:
+Annual Report 2016
+This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.
+The report contains forward-looking statements on the Bank's financial positions, business performance and
+development. The statements are made based on existing plans, estimates and forecasts, and bear upon future external
+events or the Group's future finance, business or performance in other aspects, and may involve future plans which do
+not constitute substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the
+risks and understand the difference between plans, estimates and commitments.
+Industrial and Commercial Bank of China (Malaysia) Berhad
+the Bank/the Group
+State Council
+Standard Bank
+SSE
+SEHK
+Hong Kong
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+MOF
+IFRSS
+ICBCFS
+ICBC-AXA
+Industrial and Commercial Bank of China Mexico S.A.
+ICBC Standard Bank
+ICBC International
+ICBC Credit Suisse Asset Management
+ICBC (USA)
+ICBC (Turkey)
+ICBC (Thai)
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Asia) Limited
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Central Huijin Investment Ltd.
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
+Limited
+Banks undertaking key functions with global features in the financial markets as
+released by the Financial Stability Board
+China Securities Regulatory Commission
+ICBC Leasing
+China Banking Regulatory Commission
+Industrial and Commercial Bank of China (New Zealand) Limited
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+During the reporting period, the Bank did not identify any material risks that exerted negative impact on the Bank's
+development strategy and business objectives in the future. The Bank has actively adopted measures to effectively manage
+various types of risks. Please refer to the section headed "Discussion and Analysis Risk Management" for detailed
+information.
+Notes on Material Risks
+Mr. Yi Huiman, Legal Representative of the Bank, Mr. Gu Shu, President in charge of finance of the Bank, and Mr. Zhang
+Wenwu, General Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that the
+financial statements contained in the Annual Report are authentic, accurate and complete.
+30 March 2017
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.343 (pre-tax) for each
+ten shares for 2016. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2016.
+The Bank did not convert capital reserve to share capital.
+The 2016 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+The 2016 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 30 March 2017. All directors of the Bank attended the meeting.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+ICBC
+2
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial
+Bank of China Limited and its subsidiaries
+The State Council of the People's Republic of China
+ICBC PERU BANK
+Standard Bank Group Limited
+The Stock Exchange of Hong Kong Limited
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Accounting Standards for Business Enterprises promulgated by the Ministry of
+Finance
+The People's Bank of China
+Ministry of Finance of the People's Republic of China
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting
+Standards
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Financial Leasing Co., Ltd.
+ICBC International Holdings Limited
+ICBC Credit Suisse Asset Management Co., Ltd.
+Industrial and Commercial Bank of China (USA) NA
+ICBC Turkey Bank Anonim Şirketi
+Shanghai Stock Exchange
+www.hkexnews.hk
+2.22
+Operating income
+72,575
+55,457 74,324
+74,697 72,740 55,370
+199,614 98,018
+(13,829) (44,582) 518,295 565,554 (331,219) 379,134
+ICBC
+Chairman's Statement
+Chairman Yi Huiman
+74,764 75,453
+Annual Report 2016
+In 2016, the recovery of world economy remained weak while economic complexity, instability and uncertainty became more
+conspicuous. Domestic economy operated steadily in general but was facing downward pressure and many difficulties. In
+face of the severe challenges such as overlapping conflicts and intertwined risks and hidden hazards at home and abroad,
+the Bank managed to make progress while maintaining stability, steered towards the right direction by keeping our eyes on
+the broader picture, implemented reform and innovation, and overcame difficulties in a responsible manner. By carrying on
+our good traditions and developing innovations, we attained performance results which exceeded the expectation of many
+and which comprised many highlights in the past year.
+Stability is the priority in our performance results. Stability is the cornerstone and is important in serving the overall
+interest. Focused on stabilizing benefits, quality and risks, the Bank implemented targeted measures and maintained
+generally stable operation and development. We maintained stable profits. In face of three main factors of rising expenditure
+and reduced income, namely the increased credit cost, narrowing interest margin and fee cuts to the real economy, the
+Bank actively tapped into potential, improved efficiency, expanded sources of income and cut back on expenses. In 2016,
+we realized a net profit of RMB279.1 billion, up 0.5% from the previous year and continuing to hold the largest net profit
+base in the global banking industry. We maintained stable asset quality. In face of the downward pressure on asset quality,
+the Bank strengthened credit foundation management and credit quality management under the new normal, and adopted
+multi-pronged approaches to tackle both symptoms and root causes, focusing on the control of new loans, management
+and control of existing loans and disposal of non-performing loans. As at the end of 2016, the Bank's NPL ratio was
+controlled at 1.62%, asset quality remained stable with positive changes, the ratio of loan deterioration decreased, NPL
+balance and ratio increased at a rate lower than the same period of last year, and allowance to NPL increased over the
+previous quarter in the fourth quarter. We steadily controlled risks. In face of spreading primary, crossover and imported
+risks, the Bank intensified enterprise risk management and improved risk management measures in the aspects of strategy,
+system, instrument and mechanism, striving to cement the dam against risks and fully exert the role of a market stabilizer
+and risk reducing valve as a leading bank.
+Progress is the main theme of our performance results. While maintaining stability, the Bank made active efforts and
+explorations for progress.
+We gained new ground in serving the real economy. The real economy is the ultimate driver of growth of finance. The
+Bank followed the economic laws and trends, and improved the operating quality by seizing the opportunities presented
+by the supply-side structural reform and revitalization of the real economy. We improved the full-process and integrated
+management of incremental and existing credits as well as credit financing and non-credit financing. New loans actually
+granted by domestic branches in 2016 totaled RMB3 trillion, including RMB844.6 billion of new RMB and foreign-currency
+loans and RMB2.16 trillion loans that were recovered and relent. New non-credit financing and new investment in local
+government debts amounted to RMB989.8 billion, exceeding the loan increment and becoming an important source of
+capital for supporting the real economy. In terms of direction and structure, we dovetailed with a string of strategies such
+as "the 13th Five-Year Plan", the "four regions", "three supporting belts" and "Made in China 2025", and stepped up
+support to key projects. We steadfastly developed small and micro enterprise financial businesses and provided innovative
+services in that area that combined professional offline operation with standardized online operation, and became the first
+commercial bank in the country with a small and micro enterprise loan balance of more than RMB2 trillion. Adapting to the
+trend of expanded and upgraded personal consumption, the Bank saw steady rise in the proportion of residential mortgages
+and consumption loans in total loans. Our services for enterprises' "Going Global" drive became deeper and broader. The
+Bank took the lead in establishing Sino-CEE Financial Holding Corporation and Fund to participate in infrastructure and
+capacity cooperation under the "Belt and Road" initiative in the form of a multilateral financial company. We also gave
+stronger support to the merger and restructuring of enterprises, and pushed for market-based debt-for-equity swaps and
+asset securitization in an orderly manner, not only providing more flexible and diverse financial service options for enterprises
+to lower the cost and deleverage, but also helping ourselves to prevent and control risks and boost the real economy at the
+same time.
+We made new progress in operational transformation and structural adjustment. Taking active steps to adapt to
+new changes during the economic transformation and upgrade, the Bank followed and studied new trends in the strategic
+development of international banking industry, well balanced current operation with long-term development, guided
+operational transformation, and boosted the strengthening of new drives of growth and rejuvenation of traditional ones.
+We implemented in depth strategy of mega retail, mega asset management and mega investment banking, proactively built
+the asset-liability management system that suited interest rate liberalization, and promoted international and diversified
+development. As a result, a new landscape of profit growth featuring multiple drivers and pillars has taken shape, which
+ICBC
+(In RMB millions)
+Allowance to total loans ratio (9)
+Chairman's Statement
+164,900
+7
+165,808
+holders of the parent
+Net profit attributable to equity
+170,929 167,096
+company
+Net cash flows from operating
+activities
+2015
+Q1
+Q2
+2016
+168,992
+159,989
+Q3
+155,034
+Q4
+Q1
+Q2
+157,666
+Q3
+Q4
+22.3
+94,908
+20.6
+1,068,632
+10.0
+4.4
+1,710
+3,837
+Northeastern China
+11.7
+2,275,456
+Western China
+20.3
+93,805
+21.1
+3,633
+9.4
+Central China
+15.7
+72,712
+51,136
+2,827,331
+11.1
+92
+3,129,868
+Primary reporting line
+Shareholders'
+General Meeting
+Board of
+Directors
+Corporate Governance Framework
+Corporate Governance Report
+ICBC
+16.2
+Note: (1) Overseas and other assets include investments in associates and joint ventures.
+100.0
+461,749
+100.0
+Overseas and others
+17,200
+24,137,265
+Total
+(22.5)
+(5,450,863)
+undistributed assets
+Eliminated and
+4.4
+20,222
+3.0
+520
+13.0
+100.0
+2,790
+0.2
+3,626,559
+Item
+Assets Percentage
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES (As at the end of December 2016)
+Directors, Supervisors, Senior Management, Employees and Institutions
+91
+Annual Report 2016
+Does not include labor dispatched for services totaling 301 persons, of whom 39 were dispatched to major subsidiaries.
+1
+At the end of 2016, the Bank had a total of 17,200 institutions, representing a decrease of 298 as compared with the end
+of the previous year. Among them, there were 16,788 domestic institutions and 412 overseas ones. Domestic institutions
+include the Head Office, 31 tier-one branches, five branches directly controlled by the Head Office, 27 banking offices of
+tier-one branches, 413 tier-two branches, 3,076 tier-one sub-branches, 13,098 outlets, 29 Head Office-level profitability
+units along with their directly controlled institutions and branches, and 108 major subsidiaries and their branches.
+1.3%
+15.2%
+Non-banking business
+Others
+(in RMB millions)
+2.8%
+Doctorate
+5.5%
+0.1%
+3.2%
+IT
+Master
+Technology
+5.7%
+Risk and compliance
+13.3%
+Below associate
+6.7%
+Other financial businesses
+15.0
+Number of Percentage
+(%) institutions
+(%)
+Bohai Rim
+11.0
+50,759
+12.2
+2,097
+12.8
+3,096,641
+Pearl River Delta
+13.5
+62,541
+15.0
+Percentage
+2,583
+5,194,868
+Yangtze River Delta
+3.4
+15,666
+Secondary reporting line
+30
+34.7
+8,368,773
+Head Office
+(%)
+Employees
+21.5
+Board of
+Supervisors
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting of the Bank during the reporting period.
+Risk Management
+Committee
+Annual Report 2016
+93
+Corporate Governance Report
+Responsibilities of the Board of Directors
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report to, the
+Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the Shareholders'
+General Meeting; implementing resolutions of the Shareholders' General Meeting; deciding on business plans, investment
+plans and development strategies of the Bank; formulating annual financial budgets and final accounts of the Bank;
+formulating profit distribution plans and loss recovery plans; formulating proposals on the increase or decrease of registered
+capital of the Bank; formulating fundamental management rules on risk management and internal control, and supervising
+the implementation of these rules; appointing or removing the President and the Board Secretary, and based on the
+President's nomination, appointing or removing Senior Executive Vice Presidents and other Senior Management members
+(except the Board Secretary), and deciding on their remuneration, rewards and sanctions; deciding or authorizing the
+President to set up relevant head office departments of the Bank; regularly evaluating and improving corporate governance
+of the Bank; managing information disclosure matters of the Bank; and supervising and ensuring effective performance of
+management responsibilities of the President and other Senior Management members.
+Responsibilities of the Board of Supervisors
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report to, the Shareholders'
+General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance and due diligence
+of Directors and Senior Management members; supervising the performance of duties of the Board of Directors and
+the Senior Management; conducting audits on retiring or resigning Directors and Senior Management members where
+appropriate; examining and supervising the Bank's financial activities; examining financial information such as financial
+report, business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of
+Directors; examining and supervising business decisions, risk management and internal control of the Bank, and providing
+guidance for the internal audit departments of the Bank; formulating performance assessment measures for supervisors,
+assessing the performance and conduct of supervisors, and reporting to the Shareholders' General Meeting for approval;
+presenting proposals to the Shareholders' General Meeting; proposing to convene extraordinary general meetings,
+and convening and presiding over such meetings in case the Board of Directors fails to perform its duty of convening
+Shareholders' General Meeting; proposing to convene interim meetings of the Board of Directors.
+Responsibilities of the Senior Management
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, carrying out operational management of the Bank; organizing the
+implementation of business plan and investment plan approved by the Board of Directors; formulating detailed regulations
+and rules for operational management; formulating proposals on remuneration distribution and performance assessment for
+heads of internal departments and branches of the Bank; reporting operating results to the Board of Directors and the Board
+of Supervisors; preparing the annual financial budget, final accounts, profit distribution plans and loss recovery plans, and
+proposals on the increase or decrease of registered capital, issuance or listing of bonds, and making recommendations to the
+Board of Directors.
+Overview of Corporate Governance
+During the reporting period, the Bank highlighted the improvement of corporate governance as a key move in responding to
+the challenges and opportunities under the new normal in economic development. The Bank accommodated to regulatory
+requirements on Global Systemically Important Banks, and constantly improved the structure, mechanism and culture of
+corporate governance. It enhanced the enterprise risk management of the Group, and the interaction between the parent
+bank and subsidiaries as well as the collaboration between the domestic and overseas institutions, and strove to deliver
+better services and sharpen core competitiveness, boosting the healthy and sustainable development of all businesses. There
+is neither any material divergence between actual corporate governance of the Bank and applicable regulatory documents
+regarding corporate governance issued by CSRC, nor any problem identified by regulatory authorities but remain unresolved
+in respect of corporate governance. During the reporting period, the Bank received various important domestic and overseas
+corporate governance awards, including the "Hong Kong Corporate Governance Excellence Award" by The Chamber of
+94
+ICBC
+Corporate Governance Report
+Hong Kong Listed Companies, "The Asset Corporate Award Platinum Award" by The Asset, the "Best Listed Company"
+by Hong Kong Ta Kung Wen Wei Media Group, the "Best Board of Directors" by the magazine Board and Directors, the
+"2016 Outstanding Board of Directors of Strategic Chinese Listed Companies" by the 21st Century Business Herald.
+Construction of the Organizational Framework of Corporate Governance
+During the reporting period, the Bank appointed and renewed the appointments of some directors and changed the
+chairman and members of some special committees of the Board of Directors to ensure the Bank operated in compliance
+with laws and regulations. The Bank continued to improve the structure of the Board of Directors and further gave play
+to the decision-making supporting role of the special committees of the Board of Directors. Besides, the Bank stepped
+up efforts in the Group's corporate governance, and established and refined the group management and control and
+collaboration mechanism as well as the corporate governance framework, institutional system and working mechanism of its
+subsidiaries.
+Construction of the Corporate Governance Mechanism
+The Bank put the strategic decision-making role and corporate governance leading role of the Board of Directors into
+good use. Upholding scientific development and the acceleration of change in the mode of development, the Board of
+Directors focused on the reform of important fields and key links, stepped up the operational transformation and structural
+adjustment of the Bank and constantly followed up the implementation of strategies, plans and decisions, ensuring the
+stable operation and sound development of the Group. In addition, the Board of Directors kept improving corporate
+governance, consolidated enterprise risk management and internal control, stepped up information disclosure and managed
+investor relations in a more professional manner, and strengthened the building of a mechanism to support its duty
+performance, ensuring it discharge its duties in a legal, compliant and efficient manner.
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors continuously
+improved its working mechanism in accordance with the priorities of the Bank, specified the details and methods of its
+supervision over performance of the Board of Directors and the Senior Management and earnestly conducted the annual
+performance assessment. Financial supervision and supervision over risk management and internal control of the Bank
+were enhanced. The role of the Board of Supervisors which is key to corporate governance was effectively exerted, and this
+promoted the legal and compliant operation and healthy and stable development of the Bank.
+The Bank improved its enterprise risk management system comprehensively and amended and refined the rules on
+consolidated management to enhance the consolidated management of the Group. Risk management of non-banking
+subsidiaries was strengthened, the risk assessment indicator system was revised, and prevention and control of credit risk
+during the economic downward cycle were highly valued. Moreover, the Bank continuously improved internal control
+and compliance management mechanism and raised its whole-process management capacity in regard to compliance risk
+and operational risk of the Group. As for audit work, the Bank thoroughly implemented risk-oriented audit activities and
+constantly promoted professional update. As for human resource management improvement, the Bank accelerated the
+human resource structure adjustment, enhanced human resource allocation efficiency and focused more on training and
+development of talents in key fields. As for social responsibility management reinforcement, the Bank explored work patterns
+to fulfill its social responsibilities given its own characteristics.
+The Bank continuously increased the level of transparency. By adhering to the principle of "authenticity, accuracy,
+completeness, timeliness and fairness", the Bank disclosed information in a legal and compliant manner. It further refined
+its information disclosure rules, continued to improve management mechanisms and procedures and constantly pushed
+ahead the team building of professional talents. This led to increasingly better management of the Group over information
+disclosure.
+Annual Report 2016
+As the authority organ of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders'
+General Meeting is responsible for, among others, deciding on business policies and material investment plans of the Bank;
+considering and approving the proposals on the annual financial budget, final accounts, profit distribution plans and loss
+recovery plans, electing and changing directors, shareholder supervisors and external supervisors; considering and approving
+the work report of the Board of Directors and the work report of the Board of Supervisors; adopting resolutions on merger,
+division, dissolution, liquidation, change of corporate form, increase or decrease of registered capital, issuance and listing
+of corporate bonds or other negotiable securities and repurchase of stocks; and amending the Articles of Association of the
+Bank.
+Responsibilities of the Shareholders' General Meeting
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Note: The above is the corporate governance framework chart as of the end of 2016.
+Technology
+Approval
+Committee
+Management
+Committee
+Business & Product
+Innovation
+Management
+Committee
+Asset & Liability
+Management
+Committee
+Risk
+Management
+Committee
+Credit
+Approval
+Committee
+Credit Risk
+Management
+Committee
+Market Risk
+Management
+Committee
+95
+Operational Risk
+Internal Audit
+Bureau
+Internal Audit
+Sub-bureau
+Marketing
+Management
+Departments
+Risk
+Management
+Departments
+Supervision
+Committee
+Comprehensive
+Administration
+Departments
+Supporting
+Departments
+Profitability
+Units
+Directly
+Controlled
+Institutions
+Domestic
+Institutions
+Overseas
+Institutions
+Management
+Committee
+Strategy
+Committee
+Corporate Governance Report
+During the reporting period, pursuant to the domestic and overseas regulatory requirements as well as its internal corporate
+governance, the Bank amended the Working Regulations for the Risk Management Committee of the Board of Directors
+and the Working Regulations for the Audit Committee of the Board of Directors. The Risk Management Committee of the
+Board of Directors concurrently serves the duty of risk committee for institutions in USA in accordance with the amended
+Working Regulations for the Risk Management Committee of the Board of Directors. In addition, the Bank formulated
+the Administrative Measures for Suspension and Exemption of Information Disclosure, pursuant to the relevant regulatory
+requirements, to further regulate the suspension and exemption of information disclosure.
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the Shareholders' General Meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform of
+SSE, investor relations website, investor hotline and investor email and hotline, fax and email of the Shareholders' General
+Meetings of the Bank as well. For contact details, please refer to the section headed "Corporate Governance Report
+Investor Relations".
+If an ordinary shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share
+certificates and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the
+Bank. For contact details, please refer to "Corporate Information".
+Shareholders' General Meeting
+During the reporting period, the Bank convened the 2015 Annual General Meeting on 24 June 2016 and the First
+Extraordinary General Meeting of 2016 on 29 November 2016. The aforementioned Shareholders' General Meetings were
+convened and held in strict compliance with relevant laws and regulations and the Articles of Association of the Bank. The
+Bank made announcements on the resolutions and disclosed legal opinions in a timely manner in accordance with regulatory
+requirements. For details of the above meetings, please refer to the announcements of the Bank dated 24 June 2016 and 29
+November 2016 respectively on the websites of SSE and SEHK, or the website of the Bank.
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+Management
+Board of Directors and Special Committees
+Composition of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing directors. With diversified backgrounds, the
+Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed diversified perspectives and views, which ensured scientific decision-making of the Board of Directors. As
+at the disclosure date of this annual report, the Board of Directors of the Bank consisted of 14 directors, including four
+Executive Directors: Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong; five Non-executive Directors:
+Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao; and five Independent
+Non-executive Directors: Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun and Ms.
+Sheila Colleen Bair. Mr. Yi Huiman was Chairman and Mr. Gu Shu was Vice Chairman of the Board of Directors. All Executive
+Directors have worked in the areas of banking and management for a long time, possess extensive professional expertise
+and experience in those areas and are familiar with operation and management of the Bank. Most Non-executive Directors
+specialize in economic management and have rich management experience and good understanding of relevant policies
+and theories. Most of the Independent Non-executive Directors are prestigious experts in the areas of economy, finance
+and audit and law respectively, and most of them once worked at international institutions and are familiar with corporate
+finance and management. The number of Independent Non-executive Directors of the Bank accounted for more than one
+third of the total members of the Board of Directors, complying with relevant regulatory requirements.
+Meetings of the Board of Directors
+During the reporting period, the Board of Directors of the Bank held eight meetings, considered 65 proposals including the
+proposals on the 2015 Work Report of the Board of Directors, election of Chairman and Vice Chairman of the Board of
+Directors, nomination of candidates for directors, and distribution of dividends on preference shares and ordinary shares,
+and heard 22 reports including the reports on the 2016 Work Plan of the Board of Directors, the directors' performance
+98
+ICBC
+Information
+Committee
+Approval
+Financial
+Management
+Senior
+Audit Committee
+Related Party
+Transactions Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Contacts
+Corporate Governance Report
+97
+Annual Report 2016
+Compliance with the Corporate Governance Code ("the Code")
+Regarding Code Provision A.2.1 of the Corporate Governance Code (the "Code") under Appendix 14 of the Hong Kong
+Listing Rules, on 31 May 2016, the Board of Directors of the Bank elected Mr. Yi Huiman as Chairman. Meanwhile, Mr. Yi
+Huiman resigned from the position as President of the Bank. Pursuant to the relevant provisions, Mr. Yi Huiman will perform
+his duties as President until the new President is elected and the approval from CBRC is obtained. On 27 September 2016,
+the Board of Directors of the Bank elected Mr. Gu Shu as President and his qualification was approved by CBRC in October
+2016. The Bank has since complied with the requirements of the above Code Provision.
+Regarding Code Provision A.5.1 of the Code, on 31 October 2016, the former Independent Non-executive Director Sir
+Malcolm Christopher McCarthy left office as his tenure expired. On 13 January 2017, the Board of Directors of the Bank
+approved the appointment of Independent Non-executive Director Mr. Yang Siu Shun as member of the Nomination
+Committee. The Bank has since complied with the requirements of the above Code Provision.
+Save as disclosed above, during the reporting period, the Bank fully complied with the principles, code provisions and the
+recommended best practices stipulated in the Code.
+Shareholders' Rights
+Proposing the convening of an extraordinary general meeting
+An extraordinary general meeting should be convened within 2 months from the date when shareholders holding more than
+10% of the voting shares of the Bank, either individually or jointly, request to convene in writing. Proposing shareholders
+shall have the right to request the board of directors in writing to convene an extraordinary general meeting of shareholders.
+The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting within 10
+days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles of Association of
+the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by themselves due to the
+failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted from the payment to
+those negligent directors.
+Submitting interim proposals for the Shareholders' General Meeting
+Shareholders who hold more than 3% of shares of the Bank, either individually or jointly, may prepare an interim proposal
+and submit it in writing to the Board of Directors 10 days before the Shareholders' General Meeting is convened. The Board
+of Directors shall issue a supplementary notice for the Shareholders' General Meeting within 2 days upon receipt of the
+proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Putting forward suggestions or inquiries
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, share capital documents and minutes of Shareholders' General Meetings, etc.
+Development of Corporate Governance Regulations
+96
+Corporate Governance Report
+Special provisions on rights of preference shareholders
+In the following circumstances, preference shareholders of the Bank have the right to attend the Shareholders' General
+Meeting and exercise voting rights: (1) amendment of contents of the Articles of Association relating to preference
+shares; (2) decrease of the registered capital of the Bank by more than 10% once or cumulatively; (3) merger, division and
+dissolution of the Bank or change of the Bank's corporate form; (4) issuance of preference shares; or (5) other circumstances
+of changing or abolishing rights of preference shareholders as specified by the Articles of Association. If any of the above
+circumstances occurs, the Bank shall notify preference shareholders of the convening of the Shareholders' General Meeting,
+and observe the procedure specified by the Articles of Association for notifying ordinary shareholders.
+In the following circumstances, preference shareholders have the right to attend the Shareholders' General Meeting and
+jointly vote with ordinary shareholders as of the date following the date on which the Shareholders' General Meeting
+approves the profit distribution plan for the given year not in accordance with the previous agreement: the Bank fails to pay
+dividends on preference shares for three accounting years accumulatively or two consecutive accounting years contrary to
+previous agreement. Where the dividend of the preference shares cannot be accumulated, the voting rights of preference
+shareholders of the Bank shall be recovered until the Bank pays the dividend in full amount for the given year.
+Other rights
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis
+of the number of shares held by them; preference shareholders of the Bank enjoy precedence over ordinary shareholders in
+dividend distribution. Shareholders have other rights conferred by laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+Effective Communication with Shareholders
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+Upholding the principle of "authenticity, accuracy, completeness, timeliness and fairness", the Bank proactively reinforced
+the Group's information disclosure management. In order to meet the needs of investors and other stakeholders, the Bank
+continuously enhanced the Group's voluntary information disclosure and improved the Bank's level of transparency, thereby
+effectively guaranteeing the right of all stakeholders including shareholders and customers to information.
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results and domestic and overseas road shows and attending famous investment forums at home and abroad during
+the reporting period. The Bank gave full play to the communication platforms including investor interactive platform of
+SSE, investor relations website, investor hotline and investor email of the Bank, to understand investors' needs and provide
+sufficient information feedback in a timely manner.
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+shareholders' general meetings of the Bank strictly complied with the relevant provisions of the Company Law and the
+Articles of Association of the Bank, ensuring that shareholders could exercise their right of participation in the Shareholders'
+General Meetings smoothly. Since it was listed, in order to treat A and H minority shareholders fairly, the Bank has held
+the Annual General Meeting in Beijing and Hong Kong concurrently by satellite and set up registration offices of A and
+H shareholders both in Beijing and Hong Kong to facilitate the voting of shareholders. The number of shareholders who
+participated in voting at the Annual General Meeting for the Year 2015 amounted to 3,223.
+ICBC
+31.2%
+management
+10.8%
+Yes
+45.50
+45.50
+Yes
+47.00
+47.00
+Sheila Colleen Bair
+Yang Siu Shun
+Anthony Francis Neoh
+Hong Yongmiao
+Yes
+47.00
+47.00
+Or Ching Fai
+29.25
+Yes
+Yes
+Cheng Fengchao
+Fei Zhoulin
+Zheng Fuqing
+Yes
+Yes
+No
+54.26
+No
+54.26
+No
+59.10
+No
+55.47
+Yes
+No
+29.25
+No
+No
+54.26
+10.66
+43.60
+Hu Hao
+No
+54.26
+10.66
+43.60
+Wang Lin
+No
+Shen Bingxi
+No
+28.00
+Yes
+28.00
+No
+2.50
+2.50
+Huang Li
+No
+5.00
+5.00
+Hui Ping
+No
+54.92
+2.50
+13.05
+39.37
+Zhang Wei
+Qu Qiang
+59.10
+(5)=(1)+(2)+(3)+(4)
+not
+and
+annuities,
+entities
+shareholder
+from
+Obtain
+remuneration
+Unit: RMB10,000
+allowance,
+housing
+insurance,
+to social
+employer
+by the
+Contribution
+Remuneration
+Remuneration from the Bank
+Directors, Supervisors, Senior Management, Employees and Institutions
+89
+Annual Report 2016
+On 31 May 2016, the Board of Directors of the Bank appointed Mr. Guan Xueqing as Board Secretary of the Bank, and his
+qualification was approved by CBRC in July 2016. In July 2016, Mr. Hu Hao ceased to hold the position as Board Secretary of
+the Bank due to work reasons. Mr. Wang Bairong started to act as Chief Risk Officer of the Bank in July 2016. On 30 August
+2016, the Board of Directors of the Bank appointed Mr. Li Yunze as Senior Executive Vice President of the Bank, and his
+qualification was approved by CBRC in October 2016. On 28 October 2016, the Board of Directors of the Bank engaged Mr.
+Tan Jiong as Senior Executive Vice President of the Bank, and his qualification was approved by CBRC in January 2017.
+In July 2016, Mr. Wang Xiquan ceased to act as Senior Executive Vice President of the Bank due to work change and Mr.
+Wei Guoxiong ceased to act as Chief Risk Officer of the Bank for the reason of his age.
+On 31 May 2016, the Board of Directors of the Bank appointed Mr. Yi Huiman as Chairman of the Board of Directors of the
+Bank. Meanwhile, Mr. Yi Huiman resigned from the position of President of the Bank. According to relevant regulations, Mr.
+Yi Huiman shall act as President until the new President is elected with his qualification approved by CBRC. On 27 September
+2016, the Board of Directors of the Bank engaged Mr. Gu Shu as President of the Bank, and his qualification was approved
+by CBRC in October 2016.
+◆ Senior Management
+On 23 June 2016, Ms. Wang Chixi resigned from the position of Shareholder Supervisor of the Bank citing her age, and Mr.
+Zhang Wei ceased to act as Employee Supervisor of the Bank due to change of job. On 24 June 2016, Ms. Dong Juan ceased
+to act as External Supervisor of the Bank due to expiration of the term of office.
+On 23 June 2016, the Bank appointed Mr. Huang Li as Employee Supervisor of the Bank at the Interim Employees' Congress,
+and his term of office took effect from the date of review and approval by the Employees' Congress. The Bank appointed
+Mr. Zhang Wei and Mr. Shen Bingxi as Shareholder Supervisor and External Supervisor of the Bank respectively at the 2015
+Annual General Meeting on 24 June 2016, and their terms of office took effect from the date of review and approval by the
+meeting.
+Supervisors
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun as Independent
+Non-executive Director due to work reasons, which became effective upon approval by CBRC of the qualification of the new
+Independent Non-executive Director in April 2016. In May 2016, Mr. Jiang Jianqing resigned from the positions of Chairman
+of the Board of Directors and Executive Director citing his age. In July 2016, Mr. Wang Xiquan resigned from the positions of
+Executive Director and Senior Executive Vice President of the Bank due to change of job. In October 2016, due to expiration
+of the term of office, Sir Malcolm Christopher McCarthy ceased to act as Independent Non-executive Director of the Bank.
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank. In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent Non-
+executive Director of the Bank.
+At the Second Extraordinary General Meeting of 2015 held on 21 December 2015, Mr. Yang Siu Shun was appointed as
+Independent Non-executive Director of the Bank, and his qualification was approved by CBRC in April 2016. On 31 May
+2016, the Board of Directors of the Bank appointed Mr. Yi Huiman as Chairman of the Board of Directors of the Bank,
+and his qualification was approved by CBRC in June 2016. At the Annual General Meeting for the Year 2015 of the Bank
+held on 24 June 2016, Mr. Yi Huiman was appointed as Executive Director of the Bank, and Mr. Shen Si was appointed
+as Independent Non-executive Director of the Bank. The new term of office of Mr. Yi Huiman took effect from the date
+of review and approval by the meeting. The qualification of Mr. Shen Si remains to be approved by CBRC. At the First
+Extraordinary General Meeting of 2016 held on 29 November 2016, Mr. Gu Shu and Mr. Wang Jingdong were appointed
+as Executive Directors of the Bank, and Ms. Sheila Colleen Bair was appointed as Independent Non-executive Director
+of the Bank. The qualifications of Mr. Gu Shu and Mr. Wang Jingdong were approved by CBRC in December 2016. The
+qualification of Ms. Sheila Colleen Bair was approved by CBRC in March 2017.
+◆ Directors
+Appointment and Removal
+Directors, Supervisors, Senior Management, Employees and Institutions
+Annual Remuneration
+additional
+Other
+paid
+persons or
+or other
+connected
+remuneration
+before tax
+Total
+Ge Rongrong
+Wang Xiaoya
+10.66
+43.60
+Wang Jingdong
+10.66
+43.60
+Zhang Hongli
+10.66
+48.44
+Qian Wenhui
+10.66
+44.81
+Name
+(before tax)
+medical
+insurances
+monetary
+Fee
+income
+Li Yunze
+(1)
+(3)
+(4)
+Yi Huiman
+Gu Shu
+48.44
+10.66
+(2)
+14.53
+3.68
+18.21
+7.18
+36.43
+Yes
+11.75
+11.75
+Yes
+44.00
+44.00
+Yes
+35.83
+35.83
+Wang Chixi
+Yi Xiqun
+43.61
+Kenneth Patrick Chung
+Malcolm Christopher
+Yes
+No
+zzz
+Fu Zhongjun
+31.49
+No
+24.48
+6.06
+25.43
+Wang Xiquan
+4.30
+20.18
+McCarthy
+No
+Dong Juan
+Wei Guoxiong
+Corporate banking
+49.9%
+Bachelor
+management
+operations and operational
+14.7%
+Finance, accounting, treasury
+39.6%
+Personal banking
+Academic Achievements
+Employee Specialization
+SPECIALIZATIONS AND ACADEMIC ACHIEVEMENTS OF DOMESTIC EMPLOYEES
+As at the end of 2016, the Bank had a total of 461,749 employees', representing a decrease of 4,597 as compared to the
+end of the previous year, of whom 5,560 were employees in domestic subsidiaries and 14,662 were local employees in
+overseas institutions.
+Basic Information on Employees and Institutions
+(6) For the change of the Bank's directors, supervisors and senior management, please refer to the section headed "Directors,
+Supervisors, Senior Management, Employees and Institutions - Appointment and Removal".
+(5) As the Bank's Independent Non-executive Directors served as directors or senior management of other legal persons or
+organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations became
+connected persons of the Bank. During the reporting period, the Bank's Independent Non-executive Directors obtained
+remuneration from such connected persons. Except to the extent of the aforementioned circumstances, none of the Bank's
+directors, supervisors and senior management were paid by the Bank's connected persons during the reporting period.
+(4) Fee of Mr. Zhang Wei is his allowance obtained as Employee Supervisor of the Bank; Fees of Mr. Hui Ping and Mr. Huang Li are
+their allowances obtained as Employee Supervisors of the Bank, excluding their remuneration with the Bank in accordance with
+the employee remuneration system.
+(3) During the reporting period, Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin, Mr. Cheng Fengchao and
+Mr. Fu Zhongjun were paid by Huijin for their performance of responsibilities as the Bank's Non-executive Directors.
+(2) According to the requirements of relevant government authorities, the total final remuneration payable to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors, Shareholder Supervisors and
+other Senior Management members is still subject to final confirmation by relevant government authorities. Additional details of
+remuneration will be disclosed when they have been determined.
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+90
+22
+No
+54.10
+No
+10.91
+43.19
+Jiang Jianqing
+Associate
+Information
+Directors, Supervisors and Senior Management Leaving Office
+No
+46.89
+12.25
+34.64
+No
+45.61
+10.97
+Guan Xueqing
+Wang Bairong
+No
+9.11
+1.84
+7.27
+Tan Jiong
+No
+34.64
+The internal monitoring has remained effective. The Bank actively launched retrospective checks aiming at strengthening
+internal control and external supervision and preventing illegal operation and unlawful activities. Efforts were also made
+to conduct supervision and inspection of activities, strengthen the mechanism for ensuring accountability, deepen the
+verification of risky events in business operation and the application of findings, define the case prevention responsibility and
+assess risk on a case by case basis and irregular behavior of employees.
+The internal control environment has been optimized continuously. The Bank issued the new Basic Regulations on Internal
+Control, identifying the overall structure of the Group's internal control system in the new era. It also announced the Bank's
+compliance culture, i.e. "compliance is the fundamental of responsibility of the entire staff to keep risks under control and
+ensure efficient operation". Based on the operation transformation needs, the Bank completed the structural adjustment
+of the Head Office, branches and sub-branches as well as staffing, and refined the performance assessment and business
+evaluation system.
+Annual Report 2016
+107
+Corporate Governance Report
+The enterprise risk management framework has been improved. The Bank continued to monitor, analyze and control the
+new and existing loans, and assessed overdue loans and NPLs separately. The liquidity risk measurement and treasury
+management system has been improved. The Bank pushed forward economic capital allocation and limit management,
+further increasing capital use efficiency and return on capital.
+The control activities became more effective. The Bank pressed ahead with credit operation system reform and the
+preparation of supporting rules, improved credit calculation model and set reasonable approval procedures. Adhering to the
+e-ICBC upgrading strategy, the Bank built a system for prevention and control of Internet-based financial risk based on big
+data. It refined the management rules and promoted the application of the management system at all levels of the Bank.
+Information communication has been further streamlined. Adhering to the principle of being "true, accurate, complete,
+timely and fair", the Bank actively disclosed information and strictly carried out various information disclosure management
+policies to ensure that the information disclosure complied with laws and regulations. Focussed on customer marketing,
+risk prevention and control and other priorities, the Bank strengthened its mining and analysis of big data and that relevant
+application. It promoted the platform for monitoring security and handling information securely, and strengtened the Bank's
+capacity to monitor and handle information security issues.
+Internal Control Evaluation Report and Internal Control Audit
+Training of Board Secretary
+For details of the internal control assessment report of the Bank, please refer to the 2016 Internal Control Assessment Report
+of Industrial and Commercial Bank of China Limited published on the websites of SSE, SEHK and the Bank.
+Internal Control Evaluation and Defects
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines,
+the Guidelines for Internal Control of Listed Companies issued by SSE and relevant regulatory requirements of CBRC. No
+material or significant deficiencies were detected in the Bank's internal control system during the assessment. Risks that may
+arise from ordinary deficiencies are controllable and corrective actions have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives of the Bank. The Bank had maintained effective internal control in all
+material aspects in accordance with the standard system for enterprise internal control and relevant rules.
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+108
+ICBC
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee, the Risk Management Committee and the Related Party
+Transactions Control Committee of the Board of Directors perform the responsibilities of internal control management
+and review the effectiveness of internal control. The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-
+bureau, which adopt a hierarchical management system and are responsible to and report to the Board of Directors. The
+Head Office and branches have internal control and compliance departments which are responsible for the bank-wide
+organization, promotion and coordination of internal control and the assessment of domestic branches.
+While disclosing the annual report, the Bank also disclosed the 2016 Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2016 (benchmark date). The Bank engaged
+KPMG Huazhen LLP to audit and issue standardized audit report on internal control of the Bank.
+Internal Control
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued
+to strengthen inside information confidentiality management, timely organized the completion of insider lists and regularly
+conducted insider transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be
+involved in dealings in shares of the Bank who have taken advantage of inside information during the reporting period.
+Inside Information Management
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting period,
+please refer to the Work Report of Independent Non-executive Directors for 2016 issued by the Bank on 30 March 2017.
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of the
+Board of Directors and special committees of the Board of Directors.
+governance, risk management, internal control management and capital management of the Bank. During the adjournment,
+Independent Non-executive Directors of the Bank conducted on-site investigations in terms of operation and development
+of domestic and overseas institutions, the impacts of changes in international conditions on the operation of overseas
+institutions and the implementation of regulatory standards. Additionally, they also proactively exchanged opinions with the
+Management during special-topic discussions. During the reporting period, the Bank's Independent Non-executive Directors
+put forward comments and suggestions in respect of operation and management and the implementation of the strategies
+of the Bank, such as integrating resources for international operation, improving the service structure based on the customer
+structure and demands and conducting well management over asset & liability and risk considering the macro economic
+conditions. The Bank paid close attention to the comments and suggestions, and organized the implementation thereof
+according to the actual conditions.
+Corporate Governance Report
+105
+Annual Report 2016
+Board of Supervisors and Special Committee
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the Bank
+or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent Non-executive Directors and considered that they were independent.
+During the reporting period, the Bank's Independent Non-executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, gave independent opinions during consideration of issues, and provided
+recommendations on areas such as strategic management, business transformation, innovative development, corporate
+•
+Introduction to Corporate Governance and Operation of the Board of Directors
+•
+Independence and Performance of Duties of Independent Non-executive Directors
+•
+Introduction to External Regulatory Requirements and Matters to Note during Tenure of Office
+Introduction trainings for newly-appointed directors of the Bank:
+Composition of the Board of Supervisors
+As at the end of the reporting period, the Board of Supervisors of the Bank consisted of six members, including two
+Shareholder Supervisors, namely Mr. Qian Wenhui and Mr. Zhang Wei, two Employee Supervisors, namely Mr. Hui Ping and
+Mr. Huang Li, and two External Supervisors, namely Mr. Qu Qiang and Mr. Shen Bingxi.
+Operation of the Board of Supervisors
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Powers and Functions of the Senior Management
+Mr. Gu Shu is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+Mr. Yi Huiman is the Chairman and legal representative of the Bank, who is responsible for leading the Board of Directors
+in considering and formulating business development strategies, risk management, internal control and other significant
+matters of the Bank.
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be separated, and the Chairman shall not
+concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+Chairman and President
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries with all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the aforesaid codes of conduct during the
+year ended 31 December 2016.
+Securities Transactions of Directors and Supervisors
+Corporate Governance Report
+ICBC
+106
+As the special committee of the Board of Supervisors established pursuant to the Articles of Association of the Bank, the
+Supervision Committee operates in accordance with the authorization of the Board of Supervisors and is accountable to
+the Board of Supervisors. The Supervision Committee is mainly responsible for formulating plans for the inspection and
+supervision of financial activities of the Bank; formulating plans for the audits on retiring or resigning Directors, President
+and other Senior Management members; formulating plans for the audits on business policies, risk management and internal
+control of the Bank when necessary; providing comments after review of the financial report of the Bank and reporting to
+the Board of Supervisors; reviewing the investigation report on significant events in the annual operation and financial status
+of the Bank submitted by the Supervisory Board Office, and reporting to the Board of Supervisors; giving comments on the
+performance assessment of directors and Senior Management members, and reporting to the Board of Supervisors; giving
+opinions on the assessment of the development and implementation of risk management and internal control system, and
+reporting to the Board of Supervisors; and other functions and duties as may be authorized by the Board of Supervisors.
+The Supervision Committee consists of six Supervisors, including Mr. Qian Wenhui, Mr. Zhang Wei, Mr. Hui Ping, Mr. Huang
+Li, Mr. Qu Qiang and Mr. Shen Bingxi. Mr. Qian Wenhui serves as the head member of the Supervision Committee. Daily
+operations of the Supervision Committee are conducted by the Supervisory Board Office.
+Supervision Committee
+As the day-to-day administrative organ of the Board of Supervisors, the Supervisory Board Office, as entrusted by the Board
+of Supervisors, is responsible for supervising and scrutinizing matters such as corporate governance, financial activities,
+risk management and internal control of the Bank, and organizing meetings of the Board of Supervisors and its special
+committee, preparing meeting documents, and taking minutes of the meetings.
+The Board of Supervisors discusses official matters at the meeting of the Board of Supervisors, which includes regular
+meetings and special meetings. Regular meetings shall be held at least four times a year and such meetings shall, in
+principle, be held before the disclosure of periodical reports.
+During the reporting period, the Board Secretary of the Bank attended relevant specialized trainings by SSE and the
+Hong Kong Institute of Chartered Secretaries, with the training hours over 15 hours, which meets relevant regulatory
+requirements.
+Special Training on Businesses of the Bank
+ICBC
+6/8
+Anthony Francis Neoh
+3/3
+6/6
+6/6
+5/5
+3/3
+8/8
+2/2
+Hong Yongmiao
+2/3
+2/2
+2/3
+4/5
+3/3
+8/8
+2/2
+Or Ching Fai
+Directors
+Non-executive
+Independent
+6/6
+5/5
+6/6
+8/8
+5/5
+6/6
+McCarthy
+Malcolm Christopher
+3/3
+1/2
+3/3
+2/2
+Fu Zhongjun
+2/4
+1/1
+Wang Xiquan
+3/3
+4/4
+Jiang Jianqing
+Resigned Directors
+Sheila Colleen Bair
+2/2
+2/2
+3/3
+6/6
+2/2
+Yang Siu Shun
+3/3
+6/6
+8/8
+2/2
+Cheng Fengchao
+6/6
+4/6
+3/3
+8/8
+2/2
+Yi Huiman
+Executive Directors
+Committee
+Control
+Audit Management
+Nomination Compensation
+Committee Committee Committee Committee
+Strategy
+Committee
+Directors
+Meeting
+Directors
+Board of
+General
+Transactions
+Risk
+Shareholders'
+Related Party
+Attendances in person/Number of meetings requiring attendance
+Special Committees of the Board of Directors:
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+assessment by the Board of Directors for 2015, risk management of the Bank and internal and external audits. For major
+proposals reviewed by the Board of Directors, please refer to the announcements of the Bank on the websites of SSE and
+SEHK or the website of the Bank. In addition, the Board of Directors held a Strategic Seminar. At the Seminar, Directors
+assessed the implementation of the strategic development plan for 2015-2017, analyzed the competitive advantages and
+shortcomings of the Bank, refined the Bank strategic guidelines and focused on the implementation of the 2017 strategic
+development plan by adhering to the theme of "inheritance" and "innovation".
+Corporate Governance Report
+2/3
+1/1
+Gu Shu
+2/2
+6/6
+5/5
+8/8
+2/2
+Fei Zhoulin
+6/6
+3/3
+8/8
+2/2
+Zheng Fuqing
+5/6
+6/6
+7/8
+2/2
+Ge Rongrong
+3/3
+3/3
+8/8
+2/2
+Wang Xiaoya
+Non-executive Directors
+Wang Jingdong
+4/6
+Zhang Hongli
+4/7
+8/8
+5/6
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+During the reporting period, the Bank developed the training plan for the Board of Directors, increased training resources,
+and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors in continuing
+to improve their comprehensive quality and ability to perform their duties. During the reporting period, the Directors of the
+Bank complied with relevant regulatory requirements, and attended relevant trainings according to work needs. Besides,
+the Directors of the Bank enhanced their professional level by attending forums and seminars as well as conducting on-site
+investigations in some domestic and overseas peers and affiliates of the Bank.
+Investigation and Training of Directors
+Corporate Governance Report
+ICBC
+104
+The Bank has strictly complied with the exchanges on which the Bank is listed and the Articles of Association of the Bank
+that Directors are elected by the Shareholders' General Meeting with a term of three years, and the appointment shall take
+effect from the date of approval by CBRC. Directors may be re-appointed through re-election at the Shareholders' General
+Meeting after expiry of their term. The term for re-appointment is from the date of approval by the Shareholders' General
+Meeting.
+Term of Directors
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2015 Annual Report,
+the First Quarterly Report, the Interim Report and the Third Quarterly Report of 2016 as scheduled.
+Responsibilities of Directors in Respect of Financial Statements
+◆ Important Comments and Suggestions Put Forward by Special Committees of the Board of Directors
+During the reporting period, the Strategy Committee put forward comments or suggestions on matters including the
+strategic development planning, strategic capital allocation, annual final accounts and IT development planning of the
+Bank. The Audit Committee put forward comments or suggestions on matters including the preparation of regular reports,
+the arrangements of internal and external audit and improvement of internal control mechanism. The Risk Management
+Committee put forward comments or suggestions on matters including the risk management strategy, the Group's AML
+work, the risk management of institutions in USA and the risk of outsourcing business. The Nomination Committee
+put forward comments or suggestions on matters including the recommendation and nomination of candidates for
+directors, the assessment of the composition of the Board of Directors and the candidates for chairmen and members of
+special committees of the Board of Directors. The Compensation Committee put forward comments or suggestions on
+matters including the revisions to and improvement of the rules and plan on the assessment of performance of duties of
+directors by the Board of Directors and the remuneration assessment plan for Senior Management members. The Related
+Party Transaction Control Committee put forward comments or suggestions on matters including the improvement of
+management of related party transactions and inside transactions of the Bank.
+Performance of the Related Party Transactions Control Committee During the reporting period, the Related Party
+Transactions Control Committee held three meetings, considered two proposals including the proposal on identification of
+related parties of the Bank, and heard two reports on the related party transactions in 2015 and the identification of related
+parties of the Bank in 2015. The Related Party Transaction Control Committee put forward comments or suggestions on
+matters including the improvement of management of related party transactions and inside transactions of the Bank.
+The Related Party Transactions Control Committee is mainly responsible for identifying the Bank's related parties, examining
+major related party transactions, and receiving related party transaction statistics and reporting information of general
+related party transactions. As at the disclosure date of this annual report, the Related Party Transactions Control Committee
+consisted of four directors, including Executive Director Mr. Wang Jingdong, Independent Non-executive Directors Mr.
+Yang Siu Shun, Mr. Or Ching Fai and Mr. Hong Yongmiao. Independent Non-executive Director Mr. Yang Siu Shun was the
+chairman of the committee.
+◆Related Party Transactions Control Committee
+Corporate Governance Report
+103
+Annual Report 2016
+The Compensation Committee organized the performance assessment of directors, and put forth proposal on remuneration
+distribution for directors and submitted the same to the Shareholders' General Meeting after the approval of the Board
+of Directors. It also formulated and reviewed the assessment measures and compensation plans for Senior Management
+members of the Bank and evaluated the performance and behaviors of Senior Management members, results of which
+were submitted to the Board of Directors or the Shareholders' General Meeting, if falling into the responsibilities of the
+Shareholders' General Meeting, for approval. According to applicable regulations including the Measures on the Assessment
+of Performance of Duties of Directors in Commercial Banks (Trial) issued by CBRC, the Articles of Association and the Rules
+on the Assessment of Performance of Duties of Directors by the Board of Directors (Trial) of the Bank, the Compensation
+Committee organized the performance assessment of directors by the Board of Directors for 2015.
+2/3
+The Compensation Committee is mainly responsible for formulating assessment measures on the performance of duties
+for directors, organizing the assessment on the performance of duties of Directors, putting forth proposal on remuneration
+distribution for Directors, putting forth proposal on remuneration distribution for Supervisors based on the performance
+assessment on Supervisors carried out by the Board of Supervisors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the performance and behaviors of Senior
+Management members. As at the disclosure date of this annual report, the Compensation Committee consisted of five
+directors, including Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Anthony Francis Neoh, Mr. Or
+Ching Fai and Mr. Yang Siu Shun; and Non-executive Director Ms. Wang Xiaoya. Independent Non-executive Director Mr.
+Anthony Francis Neoh was the chairman of the committee.
+Compensation Committee
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held six
+meetings, considered 13 proposals including the proposals on the nomination of Mr. Yi Huiman, Mr. Gu Shu and Mr. Wang
+Jingdong as candidates for Executive Directors, the nomination of Mr. Shen Si and Ms. Sheila Colleen Bair as candidates
+for Independent Non-executive Directors, the appointment of Mr. Li Yunze and Mr. Tan Jiong as Senior Executive Vice
+Presidents, the appointment of Mr. Wang Bairong as Chief Risk Officer and the appointment of Mr. Guan Xueqing as Board
+Secretary, and heard the report on the composition of the Board of Directors in 2015. The Nomination Committee put
+forward comments or suggestions on matters including the recommendation and nomination of candidates for directors,
+the assessment of the composition of the Board of Directors and the candidates for chairmen and members of special
+committees of the Board of Directors.
+Committee shall pay attention to the complementarity in terms of expertise, professional competence and experience,
+cultural and educational background, gender, etc. of the candidates, to ensure the directors are well equipped, experienced
+and have diversified perspectives and views. In order to implement the requirement, the Nomination Committee assesses
+the improvement of diversified composition of the Board of Directors in addition to framework, number of directors and
+formation on a yearly basis, and discusses and designs measurable goals according to actual conditions. As at the disclosure
+date of this annual report, there were five Independent Non-executive Directors, accounting for more than one third of
+the total members of the Board of Directors; and there were three female Directors. The Bank attached importance on
+diversified sources and backgrounds of directors and continued the efforts to build a professional board, thus underpinning
+the effective operation and scientific decision-making of the Board of the Directors.
+Trainings held by the regulatory institutions:
+Corporate Governance Report
+•
+•
+International Banking
+IT Development
+•
+Risk Management and Asset and Liability Management
+•
+Operation Management
+Retail Banking
+•
+Special Financing
+•
+Corporate Governance
+•
+Special business trainings of the Bank:
+The Hong Kong Institute of Chartered Secretaries Annual Financial Audit and Performance Report
+Beijing-Tianjin-Hebei Integration and Development of Listed Companies in Beijing
+•
+M&A and Reorganization of Enterprises in the SOE reform
+Beijing Office of CSRC
+•
+Beijing Office of CSRC
+•
+New Business in the Mobile Internet and Big Data Era
+Beijing Office of CSRC
+SSE Training on Qualifications of Independent Directors
+ICBC
+Performance of the Compensation Committee During the reporting period, the Compensation Committee held three
+meetings, considered four proposals including the proposals on the revisions to the rules on the assessment of performance
+of duties of directors by the Board of Directors, the payment of remuneration to directors, supervisors and Senior
+Management members for 2015 and the Senior Management performance evaluation plan for 2016, and heard two reports
+on the directors' performance assessment by the Board of Directors for 2015 and the plan for the directors' performance
+assessment by the Board of Directors for 2016. The Compensation Committee put forward comments or suggestions on
+matters including the revisions to and improvement of the rules and plan on the assessment of performance of duties of
+directors by the Board of Directors and the remuneration assessment plan for Senior Management members.
+The Articles of Association of the Bank specifies methods and procedures to nominate directors. Please refer to Article
+115 of the Articles of Association. During the reporting period, the Bank appointed and renewed the appointments of
+directors of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews
+the qualifications of candidates for directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+Corporate Governance Report
+99
+Annual Report 2016
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+102
+Notes: (1) "Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+0/1
+0/1
+0/1
+0/2
+0/2
+0/2
+Yi Xiqun
+3/3
+3/3
+6/6
+5/5
+8/8
+2/2
+Kenneth Patrick Chung
+3/3
+3/6
+Special Committees of the Board of Directors
+The Board of Directors of the Bank has established six special committees, namely, the Strategy Committee, the Audit
+Committee, the Risk Management Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee. Except the Strategy Committee, chairmen of all the other committees were
+assumed by Independent Non-executive Directors. More than half of the members of the Audit Committee, the Nomination
+Committee, the Compensation Committee and the Related Party Transactions Control Committee were Independent Non-
+executive Directors. During the reporting period, the performance of duties by the special committees of the Board of
+Directors of the Bank is set out below:
+(2)
+The Strategy Committee is mainly responsible for considering the Bank's strategic development plan, business and
+institutional development plan, major investment and financing plan and other major matters critical to the Bank's
+development, making recommendations to the Board, and examining and assessing the soundness of the corporate
+governance framework to ensure financial reporting, risk management and internal control are compliant with corporate
+governance criteria of the Bank. As at the disclosure date of this annual report, the Strategy Committee consisted of seven
+directors, including Executive Directors Mr. Yi Huiman and Mr. Gu Shu; Independent Non-executive Directors Mr. Or Ching
+Fai, Mr. Hong Yongmiao and Ms. Sheila Colleen Bair; Non-executive Directors Ms. Wang Xiaoya and Mr. Zheng Fuqing.
+Chairman of the Board of Directors Mr. Yi Huiman was the chairman of the committee.
+The Nomination Committee is mainly responsible for making recommendations to the Board of Directors on candidates for
+directors and Senior Management members, nominating candidates for chairmen and members of special committees of
+the Board of Directors, and formulating the standards and procedures for selection and appointment of directors and Senior
+Management members as well as the training and development plans for Senior Management members and key reserved
+talents. The Nomination Committee is also responsible for assessing the structure, size and composition of the Board of
+Directors on a yearly basis and making recommendations to the Board of Directors based on the Bank's development
+strategy. As at the disclosure date of this annual report, the Nomination Committee consisted of seven directors, including
+Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Hong Yongmiao, Mr. Or Ching Fai, Mr. Anthony
+Francis Neoh and Mr. Yang Siu Shun; Non-executive Directors Ms. Ge Rongrong and Mr. Fei Zhoulin. Independent Non-
+executive Director Mr. Hong Yongmiao was the chairman of the committee.
+◆ Nomination Committee
+-
+The Risk Management Committee is responsible for constantly monitoring and examining the risk management system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. Under the enterprise risk management
+system structure of the Bank, the Risk Management Committee performed its function of examining the Bank's risk
+management system through reviewing and revising the risk strategy, risk management policy, risk appetite and the
+enterprise risk management structure, monitoring and evaluating the setup, mode of organization, work procedures and
+results of risk management departments, regularly assessing the risk appetite and the enterprise risk management status,
+supervising and assessing control activities conducted by the Senior Management members in terms of credit risk, market
+risk, operational risk and other risks. The Board of Directors and the Risk Management Committee heard the report made by
+the Management on the Group's risk management every half year and examined the Bank's risk management and internal
+control system. For details of the risk management, please refer to the section headed "Discussion and Analysis Risk
+Management".
+Strategy Committee
+Performance of the Risk Management Committee During the reporting period, the Risk Management Committee
+held six meetings, reviewed 12 proposals including the liquidity risk management strategy for 2016, the country risk
+concentration limit for 2016-2017, revisions to the Administrative Regulations on Market Risks (2016 Edition) and
+functioning of the Risk Management Committee of the Board as the risk committee for institutions in the US. The
+Committee also heard 15 reports including the reports on the risk management and the Group's AML work for 2015 and
+the first half of 2016 and the business development and risk management of institutions in USA. The Risk Management
+Committee put forward comments or suggestions on matters including the risk management strategy, the Group's AML
+work and the risk management of institutions in USA.
+The Risk Management Committee is primarily responsible for reviewing and revising the strategy, policy and procedures
+of risk management and internal control process of the Bank, and supervising and evaluating the performance of Senior
+Management members and risk management department in respect of risk management. It concurrently serves as the
+US risk commitee in accordance with the relevant requirements in the Enhanced Prudential Standards on Bank Holding
+Companies and Foreign Banking Organisation established by the Federal Reserve Board. As at the disclosure date of this
+annual report, the Risk Management Committee consisted of eight directors, including Executive Director Mr. Zhang Hongli;
+Independent Non-executive Directors Mr. Anthony Francis Neoh, Mr. Hong Yongmiao and Ms. Sheila Colleen Bair; Non-
+executive Directors Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao. Independent Non-
+executive Director Mr. Anthony Francis Neoh was the chairman of the committee.
+◆Risk Management Committee
+Corporate Governance Report
+101
+Annual Report 2016
+Examining the risk management system
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of the Bank,
+and examining the effectiveness of the system at least on an annual basis. The Audit Committee performed its function
+of examining the Bank's internal control system through reviewing the administrative rules and regulations and their
+implementation, and examined and assessed the compliance and effectiveness of major operating activities of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing internal control
+and truthfully disclosing internal control assessment reports according to the standard system for enterprise internal control.
+The objective of the internal control of the Bank is to reasonably assure the compliance of its operation and management
+with relevant laws, safety of its assets, as well as the authenticity and completeness of its financial reports and relevant
+information, in order to enhance operation efficiency and results, and to facilitate the realization of its development strategy.
+Due to inherent limitation of internal control, only reasonable assurance can be provided for the aforementioned objectives.
+The Board of Directors and the Audit Committee have reviewed and approved the 2016 Internal Control Assessment Report
+of the Bank. For details of the Bank's internal control, please refer to "Corporate Governance Report - Internal Control".
+Effectiveness of the internal audit function
+The Bank has established a vertical and independent internal audit management system responsible and reporting to
+the Board of Directors. The Board of Directors regularly reviews the internal audit plan and hears internal audit reports
+on internal audit activities, audit supporting measures, internal audit team building, etc., thus effectively performing the
+function of risk management. The Audit Committee examines, monitors and assesses the internal audit work of the Bank,
+supervises the internal audit rules and their implementation, and makes assessment of audit procedures and results of the
+internal audit department. It is also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department and external auditors. The internal
+audit department is accountable to and reports to the Board of Directors, is guided by the Board of Supervisors and is under
+the examination, supervision and assessment of the Audit Committee. For details of the internal control, please refer to
+"Corporate Governance Report - Internal Control".
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of the Board of Directors
+held three meetings, considered seven proposals including the proposals on the Regulations Governing Capital Management
+(2016) and the plan for IT development in the 13th Five-Year Plan Period, and heard two reports on topics including capital
+replenishment of the domestic and overseas institutions in 2016, merger and acquisition and equity investment and capital
+injection plan for institutions to be established. The Strategy Committee put forward comments or suggestions on matters
+including the strategic development planning, strategic capital allocation and annual final accounts of the Bank.
+◆ Audit Committee
+100
+Corporate Governance Report
+The Audit Committee is mainly responsible for supervising, inspecting and evaluating internal control, financial information
+and internal audit of the Bank and assessing mechanisms for the Bank's staff to report misconducts in financial statements,
+internal control, etc. and for the Bank to make independent and fair investigations and take appropriate actions. As at the
+disclosure date of this annual report, the Audit Committee consisted of six directors, including Independent Non-executive
+Directors Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh and Mr. Yang Siu Shun; Non-executive Directors
+Mr. Fei Zhoulin and Mr. Cheng Fengchao. Independent Non-executive Director Mr. Or Ching Fai was the chairman of the
+committee.
+• Reviewing periodical reports
+The Audit Committee reviewed financial statements of the Bank on a regular basis, and had reviewed and submitted to
+the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also organized and
+conducted the internal control assessment for 2015 of the Group and engaged external auditors to audit the assessment
+report and procedures of the Bank with respect to the relevant regulatory requirements. Additionally, it enhanced
+communication with external auditors, attached importance to the supervision of external auditors and heard several reports
+of external auditors concerning audit plan, audit results, and management proposals.
+During the preparation and audit of the 2016 financial statements, the Audit Committee set out related matters such as
+audit schedule and arrangement through negotiation with external auditors, followed the status of external audit and
+conducted supervision over relevant work at appropriate time by means of hearing reports and holding informal discussions,
+and reviewed the unaudited and preliminarily audited annual financial statements respectively. The Audit Committee held a
+meeting on 28 March 2017, and considered that the annual financial statements truly and completely reflected the financial
+position of the Bank. The Audit Committee reviewed the summary of audit work performed by external auditors during the
+year and made an overall and objective assessment on its performance and quality of practice. It also approved the renewal
+of the engagement of KPMG Huazhen LLP and KPMG as the external auditors of the Bank for 2017 and the engagement
+of KPMG Huazhen LLP as the internal control auditors of the Bank for 2017, and presented the proposals to the Board of
+Directors for consideration.
+Examining internal control system
+Performance of the Audit Committee During the reporting period, the Audit Committee held five meetings, considered
+eight proposals including the proposals on the 2016 internal audit plan, the 2015 annual report and revisions to the
+Basic Regulations on Internal Control and heard 11 reports including the reports on the 2015 internal audit report and
+management suggestions. The Audit Committee put forward comments or suggestions on matters including the preparation
+of regular reports, the arrangement of internal and external audit and improvement of internal control mechanism.
+Wuhan
+Office
+Beijing
+Office
+Shanghai
+Office
+Nanjing
+Office
+Tianjin
+Office
+Shenyang
+Office
+Board of Supervisors
+Internal Audit
+Senior Management
+Audit Committee
+Board of Directors
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Corporate Governance Report
+Xi'an
+Office
+Internal Audit Bureau
+Guangzhou Kunming
+Office
+Office
+Meetings of the Board of Supervisors and its Special Committee
+Primary reporting line
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Bank or
+any other body corporate.
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Bank.
+Directors' and Supervisors' Interests in Transactions, Agreements or Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+Administration Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Equity-linked Agreement There is neither any agreement to which the Bank is a party, any options to subscribe
+shares, nor any securities convertible to shares of the Bank that requires the Bank to issue shares. In addition, there is no
+securities offering holders the right to subscribe shares of the Bank. The employee participation plan and share option plan,
+etc. meet the disclosure requirements of the Hong Kong Listing Rules.
+For details on the use of funds raised from the issue of preference shares of the Bank, please refer to "Details of Changes in
+Share Capital and Shareholding of Substantial Shareholders Preference Shares".
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and
+Supervisors As at 31 December 2016, Mr. Zhang Hongli, Executive Director and Senior Executive Vice President of
+the Bank, held 2,000 H shares of the Bank, and the spouse of Mr. Or Ching Fai, Independent Non-executive Director of
+the Bank, held 1,316,040 H shares of the Bank. Save as above, as at 31 December 2016, none of the Directors of the Bank
+had any interests or short positions in the shares, underlying shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and Futures Ordinance of Hong Kong) which have to be notified to the
+Bank and SEHK under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance of Hong Kong (including interests
+or short positions therein that they shall be deemed to have pursuant to such provisions of the Securities and Futures
+Ordinance of Hong Kong), or any interests or short positions which have to be recorded in the register under Section 352 of
+the Securities and Futures Ordinance of Hong Kong, or any interests or short positions which have to be notified to the Bank
+and SEHK pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to
+the Hong Kong Listing Rules.
+Report of the Board of Directors
+112
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing growth of the Bank.
+Use of Proceeds from Fundraising Activities
+Major Customers In 2016, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank during the year.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining approval
+of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public offering,
+issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods as
+allowed by applicable laws and administrative regulations or approved by relevant authorities.
+ICBC
+Connected Transactions
+In 2016, the Bank carried out standardized management of the Group's connected transactions in strict accordance with
+the regulations of CBRC and CSRC as well as listing rules in Shanghai and Hong Kong, and further boosted the Group's
+refined management of connected transactions by launching special inspections on connected transactions, optimizing
+the information management system for connected transactions and strengthening the risk management and control of
+connected transactions.
+During the reporting period, the Bank's connected transactions were conducted in accordance with ordinary commercial
+terms under conditions that were not more favorable than the similar transactions between non-related parties. The
+terms and conditions of the relevant transactions were reasonable and complied with the overall interests of the Bank
+By Order of the Board of Directors
+ICBC
+114
+Non-executive Directors: Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao;
+Independent Non-executive Directors: Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun
+and Ms. Sheila Colleen Bair.
+Executive Directors: Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong;
+Members of the Board of Directors
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved performance assessment system and incentive & restriction mechanism. From the perspectives of economic benefit,
+risk cost control and social responsibilities, the Bank adopted a system composed of balanced scorecard-based indicators
+for management and duties allocation based indicators for individuals. The remuneration to the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors and other executives of the Bank has followed the
+State's policies relating to the remuneration reform on executives of central enterprises, which consists of basic annual
+remuneration, performance-based remuneration and incentive income linked to term appraisal. The remuneration to other
+Senior Management members and Shareholder Supervisors consist of basic annual remuneration and performance-based
+remuneration, and part of performance-based remuneration is paid in a deferred manner. The Bank has contributed to
+statutory retirement programs organized by Chinese governmental organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the employees of the Bank. Upon obtaining all applicable approvals, the
+Bank will implement a long-term incentive program. As at 31 December 2016, the Bank did not grant any share appreciation
+rights to any Director, Supervisor, Senior Management member, or other core business personnel designated by the Board of
+Directors.
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank did not relate to one another with respect to finance, business, family, or other material
+relations required to be disclosed.
+Pursuant to the Articles of Association of the Bank, where conditions permit, the Bank may establish the professional liability
+insurance system of Directors, Supervisors and Senior Management members upon approval of the Shareholders' General
+Meeting. The Bank will use its own assets to compensate each Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the maximum extent permitted by laws and administrative regulations
+or within the scope not prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior
+Management members are otherwise proved to have failed to act honestly or in good faith during their duty performance.
+During the reporting period, the Bank renewed liability insurance for Directors, Supervisors and Senior Management
+members.
+Liability Insurance of Directors, Supervisors and Senior Management
+Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for particulars of the related party
+transactions defined under the laws, regulations and accounting standards of China.
+and shareholders. Furthermore, the Bank had no connected transaction to be submitted to the Board of Directors or the
+Shareholders' General Meeting for review, and all connected transactions occurred complied with the Listing Rules of the
+Shanghai Stock Exchange and the Hong Kong Listing Rules on disclosure exemptions.
+Report of the Board of Directors
+113
+Annual Report 2016
+Purchase, Sale or Redemption of Securities During the reporting period, neither the Bank nor any of its
+subsidiaries purchased, sold or redeemed any listed securities of the Bank.
+Yi Huiman
+Chairman
+As at the latest practicable date before the publication of this annual report, the Bank has maintained the minimum public
+float of 23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the
+Bank.
+Share Capital and Public Float
+2.333
+2014
+2015
+2016
+2.343
+Percentage of cash dividends (1) (%)
+Cash dividends (pre-tax, in RMB millions)
+2.554
+Dividend per ten shares (pre-tax, in RMB yuan)
+The Bank had no plan for converting capital reserve to share capital in the recent three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the recent three years:
+-
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.343 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2016, totaling about RMB83,506 million. The distribution plan will be submitted to
+the Annual General Meeting for the Year 2016 for approval. Once approved, the above-mentioned dividends will be paid
+to the holders of A shares and H shares whose names appeared on the share register of the Bank after the close of market
+on 10 July 2017. The Bank will suspend the registration procedures of H share ownership transfer on 5 July 2017 (inclusive)
+through 10 July 2017 (inclusive). The holders of H shares of the Bank that desire to receive the proposed cash dividends
+but have not registered the ownership transfer documents are requested to hand over their ownership transfer documents
+together with the H shares to the Bank's H share registrar Computershare Hong Kong Investor Services Limited that is
+located at Room 1712-1716, 17 Floor, Hopewell Center, 183 Queen's Road East, Wanchai, Hong Kong at or before 4:30
+p.m. of 4 July 2017. Pursuant to relevant regulatory requirements and operational rules, dividends on A shares and H shares
+will be paid on 11 July 2017 and 2 August 2017, respectively.
+Upon approval at the Annual General Meeting for the Year 2015 held on 24 June 2016, the Bank has distributed cash
+dividends of about RMB83,150 million, or RMB2.333 per ten shares (pre-tax), for the period from 1 January 2015 to 31
+December 2015 to the ordinary shareholders whose names appeared on the share register after the close of market on 7
+July 2016.
+The profit and financial status of the Bank during the reporting period are presented in the Independent Auditor's Report
+and Financial Statements of the Annual Report.
+Profits and Dividends Distribution
+Item
+83,506
+83,150
+91,026
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2016 are set out in the sections headed
+"Discussion and Analysis Business Overview Internationalized and Diversified Operation" and "Note 28. to the
+Financial Statements: Investments in Subsidiaries" in this annual report.
+Donations During the reporting period, the Group made external donations of RMB65,295.8 thousand equivalent.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2016 is set
+out in the section headed "Financial Highlights" of this annual report.
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2016 are set out in
+"Note 42. to the Financial Statements: Reserves" of this annual report.
+The formulation and implementation of the Bank's cash dividend policy, which has been reviewed and approved by
+the Independent Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the
+requirements provided in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and
+proportion are clear and explicit, and the decision-making procedure and mechanism are complete. Minority shareholders
+can fully express their opinions and appeals, to completely safeguard their legitimate rights.
+Report of the Board of Directors
+111
+Annual Report 2016
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile take account of the long-term interests of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be argued and proved in detail to form a written
+argumentative report for Independent Non-executive Directors to issue their opinions, and then the report will be submitted
+to the Shareholders' General Meeting for approval as a special resolution.
+Formulation and Implementation of Cash Dividend Policy
+For details on the distribution of dividends on preference shares of the Bank, please refer to "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders - Preference Shares".
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+33.0
+30.3
+30.5
+Changes in the share capital of the Bank for the year ended 31 December 2016 are set out in "Note 40. to the Financial
+Statements: Share Capital".
+Report of the Board of Supervisors
+Meetings of the Board of Supervisors
+During the reporting period, the Board of Supervisors held seven meetings, reviewed and approved 19 proposals including
+the 2016 Annual Work Plan of the Board of Supervisors, the 2015 Work Report of the Board of Supervisors, the 2015
+Supervision Report of the Board of Supervisors, the 2015 Annual Report and its Abstract, and nomination of candidates
+for shareholder supervisor and external supervisor, and heard 40 reports including the reports on supervision, operating
+results, internal audit for 2015 and internal audit plan for 2016, internal control and compliance, and implementation of the
+strategic plan in 2015.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any act that infringed upon the interests of the Bank. The approval,
+voting, disclosure and implementation of connected transactions complied with applicable laws and regulations and the
+Articles of Association of the Bank.
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+act that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's purchase
+or sale of assets.
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+Preparation of Annual Report Preparation and review procedures of this annual report were in compliance with laws,
+administrative regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly,
+accurately and completely.
+Compliant Operation During the reporting period, the Bank continued to operate in compliance with applicable laws
+and regulations and improve its internal control system, and the decision-making procedures complied with applicable laws
+and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the Senior Management
+earnestly performed their duties. The Board of Supervisors did not find any violation of laws and regulations, or any act that
+contravened the interests of the Bank in the performance of duties during the reporting period.
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Implementation of Resolutions Passed at the Shareholders' General Meetings During the reporting period, the
+Board of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders'
+General Meetings for consideration. The Board of Directors earnestly implemented the resolutions approved at the
+Shareholders' General Meetings.
+researches, participated in relevant training programs, strengthened communication with other banks and made continuous
+efforts to improve the duty performance capability. The members of the Board of Supervisors played a constructive role
+in strengthening corporate governance, implementing development strategy, propelling business transformation and
+promoting reform and development of the Bank. During the reporting period, all external supervisors worked for the Bank
+for more than 15 working days.
+ICBC
+116
+Strengthening of self-building. The Board of Supervisors completed the re-election of supervisors in a serious manner and
+in accordance with the regulatory requirements and corporate governance procedures, and organized the annual assessment
+on the supervisors for their performance of duties. The members of the Board of Supervisors could perform their duties
+in a diligent and faithful manner, performed all supervision work by utilizing their respective strengths and safeguard the
+interests of the Bank, shareholders, employees and other stakeholders. The Supervisors actively attended meetings, earnestly
+reviewed proposals, gave opinions on an independent and objective basis, went to relevant institutions for surveys and
+Supervision on internal control. The Board of Supervisors strengthened the supervision on internal control of major risk
+points of new institutions, new businesses and new products, and surveyed the interface management of third parties. It
+paid ongoing attention to the corporate governance, compliance management and anti-money laundering management
+of overseas institutions and carried out a survey on operational management of some overseas institutions. The Board of
+Supervisors enhanced supervision on the case prevention work, including highlighting the management of behavioral risk
+and prompting the case prevention risk of key posts, major business and important institutions. It strengthened supervision
+on the implementation of rectification, studied and acted in accordance with the supervisory opinions with due care, and
+carried out a special survey on the implementation of rectification based on internal and external inspection findings. The
+Board of Supervisors fortified guidance on internal audit, internal control and compliance efforts, promoted the integration
+of supervision resources and demonstrated the advantage of collaborated supervision.
+Financial supervision. The Board of Supervisors reviewed regular reports in an earnest manner, heard reports on operation
+information and audit results, and verified the authenticity of financial information. While monitoring and studying financial
+data changes of the Bank, the Board of Supervisors also analyzed such financial issues as credit cost and replacement of
+business tax with VAT and promoted the lifting of operational management and profit level. It also strengthened financial
+examination and surveys, regularly supervised the making and implementation of important financial decisions, organized
+inspections of financial affairs of selected branches, carried out surveys on the fixed operating expenses and the collection
+and disposal of NPLs, and procured the Bank to further improve financial management and the effectiveness of financial
+resource allocation. The Board of Supervisors was highly concerned with the quality of the work done by external auditors,
+reminded them the areas of focus of the audit and oversaw the independence and effectiveness of audit work.
+Supervision on risk management. The Board of Supervisors heightened the supervision on the Group's enterprise risk
+management, capital management and consolidated management, regularly reviewed the risk management reports, and
+made a survey on the uniformity of the Group's risk management mechanism and organizational framework. Highlighting
+the Bank's credit risk management, members of the Board of Supervisors conducted surveys and supervision on business
+operation and credit asset quality in multiple branches at home and abroad, and also launched a special research into the
+optimization of credit risk governance mechanism. The Board of Supervisors improved the supervision on the management
+and control of market risk and liquidity risk and made a special survey on the Group's bond business management. In
+addition, it strengthened the supervision on risk prevention and control of innovative business, and conducted a research
+into the impact of payment business by non-bank payment institutions on the Bank so as to guarantee the healthy and well-
+regulated development of innovative business.
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations of the State, regulatory
+requirements and the Articles of Association of the Bank, focused on the key tasks of the Bank, carried out supervision tasks
+in depth, did a large number of work and played an important role in promoting the Bank to continuously improve the
+corporate governance, implementing the transformation and upgrading and achieving sound and sustainable development.
+Supervision on the performance of duties. The Board of Supervisors strengthened supervision on the implementation of
+the government's macro-economic policies, regulatory requirements and overall strategies, as well as providing support to
+the real economy and service to the supply-side structural reform by the Board of Directors and the Senior Management. It
+focused on the adoption of working measures by the Board of Directors and the Senior Management aimed at strengthening
+and improving the operational management and promoting the transformation, reform and innovation of operation. The
+Board of Supervisors paid ongoing attention to the exercise of functions and powers by the Board of Directors and the
+Senior Mnagement in accordance with the law, their performance of duties and faithful obligations, and issues concerning
+honesty and self-discipline. It organized and launched the duty performance assessment, conducted individual interviews
+with members of the Board of Directors and the Senior Management, and the persons in charge of the related Head Office
+departments and profitability units, reviewed the performance assessment report of the Board of Directors and the persons,
+and seriously assessed the annual performance of duty of the Board of Directors, the Senior Management and their members
+on an objective and impartial basis.
+Report of the Board of Supervisors
+Internal Control Assessment Report of the Board of Directors The Board of Supervisors reviewed the 2016 Internal
+Control Assessment Report of the Board of Directors and had no objection to the report.
+Implementation of Information Disclosure Management Rules During the reporting period, the Bank performed its
+duty of information disclosure in strict compliance with the regulatory requirement, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed during the
+reporting period was authentic, accurate and complete.
+Chengdu
+Office
+ICBC
+118
+Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+During the reporting period, the Bank did not enter into any material related party transactions.
+Material Related Party Transactions
+Key Audit Issues Key audit issues have been reviewed by the Audit Committee, so it is unnecessary to make a
+supplementary explanation.
+Performance of the Poverty Relief Social Responsibility Please refer to the section headed "Social
+Responsibility" for the details of the Bank's poverty-relief social responsibility performance during the reporting period.
+Employee Stock Ownership Plan During the reporting period, the Bank did not implement any employee stock
+ownership plan.
+Implementation of Share Incentive Plan The Fourth Extraordinary General Meeting of 2006 of the Bank held
+on 31 July 2006 approved the share appreciation rights plan. As at the end of the reporting period, the Bank did not grant
+any share appreciation right. Please refer to "Note 47. to the Financial Statements: Share Appreciation Rights Plan" for
+details.
+Credit Standing During the reporting period, there has not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor has there been any outstanding debt of significant amount.
+Material Assets Acquisition, Sale and Merger During the reporting period, the Bank had no material assets
+acquisition, sale and merger.
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank for recovering non-performing
+loans. In addition, some legal proceedings arose from customer disputes. As at 31 December 2016, the amount of pending
+proceedings in which the Bank and/or its subsidiaries acted as defendants totaled RMB5,515 million. The Bank does not
+expect any material adverse effect from the above-mentioned pending legal proceedings on the Bank's business, financial
+position or operating results.
+Significant Events
+117
+Annual Report 2016
+Work of the Board of Supervisors
+Report of the Board of Supervisors
+115
+Annual Report 2016
+Supervision Committee
+Attendances in person/Number of meetings that should be attended
+Board of Supervisors
+Dong Juan
+Wang Chixi
+Resigned supervisor
+Shen Bingxi
+Qu Qiang
+Huang Li
+Hui Ping
+Zhang Wei
+Qian Wenhui
+Supervisor
+The table below sets out the attendance of Supervisors in meetings of the Board of Supervisors and the meetings of the
+Supervision Committee in 2016:
+During the reporting period, the Supervision Committee held five meetings, reviewed and approved 10 proposals including
+the 2016 Annual Work Plan of the Supervision Committee of the Board of Supervisors and the Implementation Plan on
+Supervision and Inspection of the Board of Supervisors for 2016, and heard 18 reports on supervision, special inspections
+and surveys, etc.
+◆ Meetings of the Supervision Committee
+7/7
+The principal business of the Bank and its subsidiaries is the provision of banking and related financial services. Please refer
+to the section headed "Discussion and Analysis" for the business review of the Bank.
+5/5
+5/5
+For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+(2)
+Notes: (1) During the reporting period, supervisors who could not attend the meetings of the Board of Supervisors and the Supervision
+Committee in person have appointed other supervisors to attend the meetings and exercise the voting right on their behalf.
+3/3
+3/3
+4/4
+3/4
+2/2
+3/3
+5/5
+7/7
+2/2
+3/3
+5/5
+6/7
+7/7
+Principal Business
+Save as disclosed above, the Board of Supervisors had no objection to other supervision matters during the reporting period.
+ICBC
+Secondary reporting line
+During the reporting period, the Bank implemented risk-oriented audit activities according to the development strategy
+and central tasks of the Bank, and fully accomplished the annual audit plan. The audit activities covered main aspects
+of operation and management, such as credit business, financial benefit, financial asset services, Internet-based finance,
+information system security, capital management, overseas institutions, Group's consolidated management, consumer
+protection and duty performance of Senior Management members in their tenure of office. The audit activities paid
+close attention to credit risk, market risk, regional risk and financial innovation risk under the complicated operating
+circumstances as well as systematic and strategic risks in the process of diversified and internationalized development. The
+audit activities supervised and assessed the effectiveness of the compliance with regulatory requirements, implementation
+of major strategies, risk management and internal control by some institutions and in main business areas of the Group.
+The audit findings were sufficiently valued and used, and played its due role in pushing the Bank in preventing risk and
+improving management. Additionally, the Bank improved project operation process and the distribution of project resources,
+promoted IT application in audit, upgraded the audit information system platform, and strengthened the efforts in vocational
+qualification education and project training to build a more professional audit team. As a result, the service capacities and
+specialized level was constantly enhanced.
+Engagement of Auditors
+KPMG Huazhen LLP was the domestic auditors of the Bank for the financial statements audit in 2016, and KPMG was the
+international auditors of the Bank for the financial statements audit in 2016. KPMG Huazhen LLP was also the auditors of
+internal control of the Bank in 2016.
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for four consecutive years (2013, 2014,
+2015 and 2016).
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB180 million for the audit
+of financial statements (including the audit of financial statements of subsidiaries and overseas branches), of which, RMB136
+million (including fee for internal control audit of RMB11.50 million) was paid by the Bank.
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as tax
+advisory services and the professional services for the bonds issuance, and received RMB10.00 million for such professional
+non-audit services.
+Annual Report 2016
+109
+Corporate Governance Report
+Investor Relations
+Overview of Investor Relations Activities in 2016
+In 2016, the Bank strove to improve the quality of investor relations services and generate stable return to shareholders
+following the principle of serving investors in a proactive, detailed, efficient and interactive manner.
+In 2017, the Bank will further and proactively deepen the communication and exchange with investors to enhance the
+investors' understanding and acceptance of the Bank and protect legitimate interests of the investors, and at the same time
+expect to arouse more support from, and attention of, the investors.
+Report of the Board of Directors
+The Bank made constant and extensive communication with institutional investors and minority investors through press
+conference in relation to periodic results, non-transactional road shows, press conferences with large institutions, investor
+hotline, investor relations mailbox, investor relations website and the online platform of sseinfo.com, which enhanced
+investors' confidence in economic development of China and the operational transformation of the Bank and helped bring
+the market value in line with the long-term intrinsic value of the Bank. The Bank improved investor relations information
+collection and market information feedback transmission mechanism, strengthened dynamic monitoring of share price
+valuation, analyst reports and media public opinions, followed and analyzed spotlight issues of the capital market, and
+effectively enhanced the quality of communication with the investors. The Bank actively understood and solicited the
+comments and suggestions of the capital market on the Bank, facilitated the timely reaction of the Management with the
+help of many operation and communication strategies, and minimized the influence of emergencies on the share price, so as
+to continuously strengthen the level of corporate governance and core values of the Bank.
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+E-mail: ir@icbc.com.cn
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+Postal code: 100140
+110
+Investor Enquiries
+Facsimile: 86-10-66107571
+5. Impact of Issued But Not Yet Effective
+39. Other Liabilities
+203
+38. Debt Securities Issued
+40. Share Capital
+203
+6.
+Net Interest Income
+160
+Estimates
+200
+37. Due to Customers
+200
+International Financial Reporting Standards 161
+166
+Profit or Loss
+8.
+208
+Reserves
+42.
+166
+Net Fee and Commission Income
+7.
+204
+41. Other Equity Instruments
+165
+9.
+Significant Accounting Judgements and
+Net Loss on Financial Assets and Liabilities
+43. Components of Other Comprehensive Income 210
+44. Involvement With Unconsolidated Structured
+Entities
+211
+Designated at Fair Value through
+Net Trading Income
+4.
+3.
+36. Certificates of Deposit
+135
+Statement of Changes in Equity
+194
+Deferred Income Tax Assets and Liabilities
+31.
+134
+Statement of Financial Position
+193
+Property and Equipment
+30.
+32.
+133
+191
+29. Investments in Associates and
+Joint Ventures
+132
+Statement of Profit or Loss
+Statement of Profit or Loss and
+189
+28. Investments in Subsidiaries
+186
+27. Financial Investments
+183
+26. Loans and Advances to Customers
+Other Comprehensive Income
+Other Assets
+197
+Cash Flow Statement
+143
+Summary of Significant Accounting Policies
+45. Notes to the Consolidated Cash Flow
+199
+35. Repurchase Agreements
+140
+Basis of Preparation
+2.
+199
+Institutions
+140
+Corporate Information
+1.
+34. Due to Banks and Other Financial
+NOTES TO THE FINANCIAL STATEMENTS
+198
+Fair Value through Profit or Loss
+139
+Statement of Financial Position
+Financial Liabilities Designated at
+Company:
+33.
+137
+199
+166
+166
+213
+To the shareholders of Industrial and Commercial Bank of China Limited
+KPMG
+Independent Auditor's Report
+123
+Annual Report 2016
+182
+272
+INFORMATION
+25. Reverse Repurchase Agreements
+177
+(Incorporated in the People's Republic of China with limited liability)
+24. Derivative Financial Instruments
+177
+271
+Financial Statements
+60. Approval of the Consolidated
+23. Financial Assets Designated at Fair Value
+through Profit or Loss
+271
+59. Comparative Amounts
+177
+22. Financial Assets Held for Trading
+271
+UNAUDITED SUPPLEMENTARY FINANCIAL
+Opinion
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank") and
+its subsidiaries (the "Group") set out on pages 132 to 271, which comprise the consolidated and the Bank's statements of
+financial position as at 31 December 2016, the consolidated statement of profit or loss, the consolidated statement of profit
+or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow
+statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Bank and of
+the Group as at 31 December 2016 and of the Group's financial performance and cash flows for the year then ended in
+accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+historical loss parameters used.
+the overdue statistical data for the personal
+loan portfolios; and
+the accuracy of the loan grading migration
+data for the corporate loan portfolios;
+economic factors used in the models;
+input parameters involving management
+judgement;
+evaluating the validity of the models used and
+assumptions adopted in the Group's calculation of
+the collective impairment allowances by critically
+assessing:
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+approval, recording, monitoring and restructuring
+of loans and advances to customers, the credit
+grading process and the measurement of impairment
+allowances for individually assessed loans and
+advances to customers. In particular, we assessed the
+design, implementation and operating effectiveness
+of the key internal controls over the classification of
+loans by credit quality across all grades;
+Our audit procedures to assess impairment of loans and
+advances to customers included the following:
+How the matter was addressed in our audit
+The determination of the collective impairment allowances
+is heavily dependent on the external macro environment
+and internal credit risk management models. The Group's
+collective impairment allowances for corporate loans and
+advances are derived from estimates including the Group's
+historical losses, the historical emergence period for
+corporate loans and advances (i.e. the time lapse between
+the occurrence of the event causing eventual default to the
+actual recording of a loss) and other adjustment factors.
+The Group's collective impairment allowances for personal
+loans are derived from estimates, including the Group's
+historical overdue data, historical loss experience for
+personal loans and other adjustment factors.
+From the Group's perspective, the portfolios which gave
+rise to the greatest uncertainty in determining impairment
+allowances for loans and advances to customers were
+those where impairments were derived from models and
+individual cash flow assessments, where the loans and
+advances to customers were unsecured or where the
+loans and advances to customers were subject to potential
+collateral shortfalls.
+Impairment of loans and advances to customers is a
+subjective area due to the level of judgement applied by
+management in determining impairment allowances.
+The key audit matter
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 26. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers
+Key audit matters (continued)
+Independent Auditor's Report
+ICBC
+124
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+Key audit matters
+We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code") together with any ethical requirements that are
+relevant to our audit of the consolidated financial statements in the People's Republic of China, and we have fulfilled our
+other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis for our opinion.
+Basis for opinion
+58. After the Reporting Period Event
+176
+Financial Institutions
+21. Due From Banks and Other
+Loans and Advances to Customers
+216
+50. Assets Pledged as Security
+15. Impairment Losses on Assets Other Than
+216
+49. Designated Funds and Loans
+172
+14. Five Highest Paid Individuals
+214
+48. Commitments and Contingent Liabilities
+168
+13. Directors' and Supervisors' Emoluments
+214
+47. Share Appreciation Rights Plan
+167
+12. Operating Expenses
+213
+Transferred Financial Assets
+46.
+167
+11. Other Operating Income, Net
+124
+10. Net Gain on Financial Investments
+173
+Statement
+51. Fiduciary Activities
+16. Income Tax Expense
+270
+Financial Position
+57. Company-Level Statement of
+175
+20. Cash and Balances With Central Banks
+269
+56. Other Important Matters
+174
+19. Earnings Per Share
+174
+260
+18. Dividends
+55. Fair Value of Financial Instruments
+225
+54. Financial Instruments Risk Management
+174
+of the Parent Company
+220
+53. Segment Information
+17. Profit Attributable to Equity Holders
+216
+52. Related Party Disclosures
+173
+216
+Consolidated:
+Overseas Subsidiaries
+and their Institutions
+(366)
+INDEPENDENT AUDITOR'S REPORT
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders and other related parties of the Bank occupied any fund of the Bank. The
+auditors have issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related
+Parties of Industrial and Commercial Bank of China Limited in 2016.
+Market Risk Management
+Committee
+Entrusted Cash Asset Management During the reporting period, the Bank has not entrusted any other parties to
+manage cash assets.
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Or Ching Fai, Hong Yongmiao, Anthony Francis Neoh,
+Yang Siu Shun and Sheila Colleen Bair
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies (Zheng Jian Fa [2003] No. 56) issued by CSRC
+and relevant provisions of SSE, we, in the capacity of Independent Non-executive Directors of the Bank, reviewed
+external guarantees of the Bank on the principles of fairness, impartiality and objectivity, and hereby give our specific
+explanation and opinions as follows: upon review, external guarantees provided by the Bank mainly focus on issuance
+of letters of guarantee, which is part of the ordinary banking services within the business scope of the Bank as
+approved by PBC and CBRC. As at 31 December 2016, the balance of letters of guarantee issued by the Bank totaled
+RMB432,547 million.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needs to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and CBRC.
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material sub-contract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's assets, which were subject to disclosure.
+Annual Report 2016
+Material Contracts and Performance of Obligations thereunder
+125
+Independent Auditor's Report
+Key audit matters (continued)
+Impairment of loans and advances to customers
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 26. to the Financial Statements:
+Loans and Advances to Customers".
+The key audit matter
+Individual impairment allowances are assessed by
+management once objective evidence of impairment
+becomes apparent in a corporate loan. Management
+exercises judgement in determining the quantum of
+loss based on a range of factors. These include available
+remedies for recovery, the financial situation of the
+borrower, collateral valuation, the seniority of the claim
+and the existence and cooperativeness of other creditors.
+Whilst the Group appoints external valuers for the
+valuation of certain property and other illiquid collateral,
+enforceability, timing and means of realisation also affect
+the ultimate collectability and thereby the amount of
+impairment allowances as at the reporting date.
+We identified assessing impairment of loans and advances
+to customers as a key audit matter because of the inherent
+uncertainty and management judgement involved and
+because of its significance to the financial results and
+capital of the Group.
+How the matter was addressed in our audit
+Significant Events
+119
+Significant Events
+Commitments
+Investigations, Administrative Penalties by CSRC; Public Reprimand by Stock Exchanges;
+and Sanctions Imposed by Other Regulatory and Judicial Authorities During the Reporting
+Period
+and did not
+do anything in
+violation of the
+commitment.
+Fulfillment of
+commitment
+As at 31
+December 2016,
+Huijin strictly
+fulfilled the above
+commitment
+Save as disclosed above, neither the Bank nor any of its other related parties made any commitments.
+the laws or listing rules of China or
+the listing place of the Bank, Huijin
+will not engage in or participate in any
+competitive commercial banking business
+including but not limited to granting
+loans, attracting deposits and providing
+settlement, fund custody, bank card
+and money exchange services. However,
+Huijin can engage in or participate in
+some competitive businesses by investing
+in other commercial banks. In this regard,
+Huijin has committed that it will (1) fairly
+treat the investments in commercial
+banks and will not make any decision or
+judgment that will have adverse impact
+on the Bank or be beneficial to other
+commercial banks by taking advantage
+of the status of being a shareholder of
+the Bank or information obtained by
+taking advantage of the status of being a
+shareholder of the Bank; and (2) perform
+the shareholders' rights for the maximum
+interests of the Bank.
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+Commitment
+Prospectus
+on A Share
+Rights Issue of
+Industrial and
+Commercial
+Bank of China
+Limited
+Legal document
+under which
+the commitment
+is made
+Prospectus of
+Industrial and
+Commercial
+Bank of China
+Limited on
+Initial Public
+Offering
+(A Share)
+term
+November 2010/
+No specific
+term
+October 2006/
+No specific
+competition
+of non-
+Commitment
+commitment
+Time and term of
+commitment
+Type of
+Shareholder
+Huijin
+As at 31 December 2016, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+•
+During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior Management members and
+controlling shareholders was subject to any investigation by competent authorities, coercive measures taken by judicial
+authorities or disciplinary inspection departments, transferred to judicial authorities or charged for criminal responsibility,
+case filing investigation or administrative penalty by CSRC, restricted access to market, identification as unqualified, major
+penalty by other administrative authorities of environmental protection, taxation, safety supervision, etc. or public reprimand
+by the stock exchanges.
+assessing the impairment allowances for individually
+impaired corporate loans and advances by selecting
+a risk-based sample for credit review. We analysed
+the loan portfolio by industry sector to select
+samples in industries vulnerable to the current
+economic slowdown. We also focused on loans with
+perceived higher risk and selected samples from non-
+performing loans, overdue but performing loans and
+borrowers with negative warning signs or adverse
+press coverage;
+evaluating the experience, independence,
+competence and integrity of the external valuers
+engaged by the Group to value certain property
+and illiquid collateral. Where possible, we compared
+the valuations with externally derived data such as
+commodity prices and real estate valuations;
+Independent Auditor's Report
+Key audit matters (continued)
+Fair value of financial instruments
+Refer to the accounting policies on "Note 3. (5) to the Financial Statements: Financial Instruments", "Note 4. to the
+Financial Statements: Significant Accounting Judgments and Estimates" and "Note 55. to the Financial Statements: Fair
+Value of Financial Instruments".
+The key audit matter
+Financial instruments carried at fair value account for a
+significant part of the Group's assets. The effect of fair
+value adjustments may impact either the profit or loss or
+other comprehensive income.
+The valuation of the Group's financial instruments, held
+at fair value, is based on a combination of market data
+and valuation models which often require a considerable
+number of inputs. Many of these inputs are obtained
+from readily available data, in particular for level 1 and
+level 2 financial instruments in the fair value hierarchy, the
+valuation techniques for which use quoted market prices
+and observable inputs, respectively. Where such observable
+data is not readily available, as in the case of level 3
+financial instruments, then estimates need to be developed
+which can involve significant management judgement.
+The Group has developed its own models to value certain
+level 2 and level 3 financial instruments, which also involve
+significant management judgement.
+We identified assessing the fair value of financial
+instruments as a key audit matter because of the degree of
+complexity involved in valuing certain financial instruments
+and because of the degree of judgement exercised by
+management in determining the inputs used in the
+valuation models.
+127
+Pension Business
+Our audit procedures to assess the fair value of financial
+instruments included the following:
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+valuation, independent price verification, front office
+and back office reconciliations and model approval
+for financial instruments;
+assessing the level 1 fair values, on a sample basis, by
+comparing the fair values applied by the Group with
+publicly available market data;
+engaging our internal valuation specialists to assist us
+in performing independent valuations, on a sample
+basis, of level 2 and level 3 financial instruments
+and comparing our valuations with the Group's
+valuations. Our procedures included developing
+parallel models, obtaining inputs independently and
+verifying the inputs;
+engaging our internal valuation specialists to conduct
+model validation, on a sample basis, for the valuation
+of complex financial instruments;
+assessing the appropriate application of Funding
+Value, Credit Value and Debit Value Adjustments
+("FVA/CVA/DVA") that form an integral part of fair
+values, inquiring of management about any changes
+in the FVA/CVA/DVA methodology and assessing the
+appropriateness of the inputs applied; and
+assessing whether the disclosures in the consolidated
+financial statements, including fair value hierarchy
+information and sensitivity to key inputs,
+appropriately reflected the Group's exposure to
+financial instrument valuation risk with reference
+to the requirements of the prevailing accounting
+standards.
+128
+ICBC
+How the matter was addressed in our audit
+Annual Report 2016
+evaluating the disclosures in the consolidated
+financial statements in relation to the recognition of
+interests in and consolidation of structured entities
+with reference to the requirements of the prevailing
+accounting standards.
+assessing management's judgement over
+whether the structured entity should be
+consolidated or not;
+re-calculating the amount of collective impairment
+allowances to assess the application of the Group's
+methodology;
+assessing the disclosures in the consolidated financial
+statements in relation to impairment of loans
+and advances to customers with reference to the
+requirements of the prevailing accounting standards.
+126
+ICBC
+Independent Auditor's Report
+Key audit matters (continued)
+Recognition of interests in and consolidation of structured entities
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 44. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+The key audit matter
+Structured entities are generally created to achieve a
+narrow and well defined objective with restrictions around
+their ongoing activities which include providing investment
+services and products to customers and managing the
+Group's assets and liabilities.
+The Group may acquire or retain an ownership interest in,
+or act as a sponsor to, a structured entity, through issuing
+a wealth management product, an investment fund, an
+asset management plan, a trust plan, a structured lease
+or an asset-backed security. The Group may also retain
+partial interests in derecognised assets due to guarantees
+or securitisation structures.
+In determining whether the Group should retain any partial
+interests in a structured entity or should consolidate a
+structured entity, management is required to consider the
+risks and rewards retained, the power the Group is able
+to exercise over the activities of the entity and its ability
+to influence the Group's own returns from the entity.
+These factors are not purely quantitative and need to
+be considered collectively in the overall substance of the
+transactions.
+We identified the recognition of interests in and
+consolidation of structured entities as a key audit matter
+because of the complex nature of certain of these
+structured entities and because of the judgement exercised
+by management in the qualitative assessment of the terms
+and nature of each entity.
+How the matter was addressed in our audit
+Our audit procedures to assess the recognition of interests
+in and consolidation of structured entities included the
+following:
+•
+making enquiries of management and inspecting
+documents relating to the judgement process over
+whether a structured entity is consolidated or not
+to assess whether the Group has a robust process in
+this regard;
+selecting significant structured entities of each
+key product type and performing the following
+procedures for each structured entity selected:
+inspecting the related contracts, internal
+establishment documents and information
+disclosed to the investors to understand the
+purpose of the establishment of the structured
+entity and the involvement the Group has
+with the structured entity and to assess
+management's judgement over whether the
+Group has the ability to exercise power over
+the structured entity;
+inspecting the risk and reward structure of
+the structured entity, including any capital or
+return guarantee, provision of liquidity support,
+commission paid and distribution of the returns,
+to assess management's judgement as to the
+exposure, or rights, to variable returns from the
+Group's involvement in such an entity;
+evaluating management's analysis of the
+structured entity, including qualitative
+analysis and the calculation of the magnitude
+and variability associated with the Group's
+economic interests in the structured entity,
+to assess management's judgement over the
+Group's ability to influence its own returns
+from the structured entity;
+performing credit assessments for the selected
+individually impaired corporate loans and advances
+by assessing the forecast of recoverable cash flows
+through inquiry, applying judgement and our own
+research. We evaluated the timing and means
+of realisation of collateral and considered other
+sources of repayment asserted by management. We
+also evaluated the consistency of management's
+application of key assumptions and compared them
+with our own data sources. Where available, we
+made use of post reporting date information to
+evaluate credit quality with hindsight;
+120
+ICBC
+Annual Report 2016
+Precious Metal
+Business Department
+Discipline
+Enforcement
+Department
+Department
+Urban Finance
+Research Institute
+Channel
+Management
+Department
+International
+Banking
+Private Banking
+Department
+Culture
+Department
+Corporate
+ICBC Bills Discounting
+Department
+Security Department
+Asset Custody
+Department
+Tier-one Sub-branches
+(3,076)
+Asset Management
+Department
+Operation
+Management
+Department
+Domestic Branches
+(27)
+Tier-two Branches
+(413)
+Banking Departments of
+Tier-one Branches
+Global Market
+Department
+IT Department
+Product Innovation
+Management
+Department
+Information
+Management
+Department
+Investment Banking
+Department
+Outlets
+(13,098)
+Domestic Subsidiaries
+Pages
+Pages
+CONTENTS
+Financial Statements
+Auditor's Report and
+Secondary reporting line
+Primary reporting line
+Organizational Chart
+Overseas Center
+(1)
+Overseas Branches
+and their Institutions
+(45)
+Overseas Institutions
+Department
+Special Financing
+Department
+Committee
+Staff Union Working
+Management
+Department
+Retired Staff
+(3)
+Rural Banks
+and their Branches
+Subsidiaries with Diversified
+Operation and their Branches
+(105)
+Branches Directly Controlled
+by the Head Office
+(5)
+Tier-one
+Branches
+(31)
+Profitability
+Units
+Supporting
+Departments
+Management
+Committee
+Asset & Liability
+Financial Approval
+Committee
+Supervision
+Committee
+Supervisory Board Office
+Board of Supervisors
+Head Office Departments, Profitability Units and
+Directly Controlled Institutions of the Head Office
+Internal Audit Bureau
+Internal Audit
+Sub-bureau
+Senior Management
+Related Party
+Transactions Control
+Committee
+Audit Committee
+Compensation
+Committee
+Strategy
+Committee
+Nomination
+Committee
+Risk
+Management
+Committee
+General Meeting
+Shareholders'
+Board of Directors
+Board of Directors' Office
+121
+Business and
+Product Innovation
+Management
+Committee
+AUDITED FINANCIAL STATEMENTS
+Information
+Technology
+Credit Approval
+Committee
+Corporate Strategy and
+Investor Relations
+Department
+Asset & Liability
+Management
+Department
+Human Resources
+Department
+Department
+Finance & Accounting
+Executive Office
+Administration
+Departments
+Comprehensive
+JOB
+Department
+E-banking
+Bank Card
+Department
+(ICBC Peony Card
+Center, Consumer
+Credit Finance Center)
+Settlement & Cash
+Management
+Department
+Institutional Banking
+Department
+Personal Banking
+Department
+Marketing
+Management
+Departments
+Corporate
+Banking
+Department
+Domestic Institutions
+Operational Risk
+Management Committee
+Credit Risk Management
+Committee
+Information Technology
+Approval Committee
+Risk Management
+Committee
+Management
+Committee
+(Banking Department)
+Annual Report 2016
+considering, as part of the procedures above, the
+nature of and reasons for any revisions to the key
+assumptions and input parameters in the models,
+the consistency of judgement applied in the use of
+economic factors, the loss emergence period and the
+observation period for historical losses and assessing
+key internal controls over the input of underlying
+data into the models. We compared the economic
+factors used in the models to market information
+to assess whether they were aligned with market
+and economic development. We also assessed
+the emergence period by tracing the lifecycle of
+overdue accounts from the specific credit event to
+downgrading the account to a non-performing loan;
+Independent Auditor's Report
+8
+8
+8
+6,676
+6,676
+1
+(4,993)
+4,993
+4,993
+1
+(26,981)
+26,981
+26,981
+in subsidiaries
+Change in share holding
+6,676
+equity holders
+Capital injection by other
+reserve (ii)
+Appropriation to general
+reserve (i)
+Appropriation to surplus
+(4,450)
+(4,450) (4,450)
+(83,150)
+(83,150) (83,150)
+13
+Dividends preference shares
+(note 18)
+21
+Dividends to non-controlling
+Year ended 31 December 2016
+Consolidated Statement of Changes in Equity
+(i)
+135
+Annual Report 2016
+The notes on pages 140 to 271 form part of these financial statements.
+Includes the appropriation made by subsidiaries in the amount of RMB 194 million.
+(ii)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB84 million and RMB669 million,
+respectively.
+1,981,163
+11,412
+(221) 586,630 940,663 1,969,751
+1,133 (18,050) (4,645)
+205,021 251,349
+86,051 152,043
+356,407
+31 December 2016
+Balance as at
+27
+27
+(71)
+(71)
+27
+18
+9
+Others
+shareholders
+(i)
+2015 final (note 18)
+Dividends ordinary shares
+261,591
+Subtotal
+reserves
+reserve
+reserve
+Total
+controlling
+Retained
+Other
+hedging
+General revaluation translation
+reserve reserve
+reserve
+Surplus
+profits
+share equity Capital
+capital instrument reserve
+356,407 79,375 152,026
+Non-
+Cash flow
+Investment currency
+Other
+Issued
+Foreign
+Reserves
+Attributable to equity holders of the parent company
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Consolidated Statement of Changes in Equity
+ICBC
+Balance as at 1 January 2016
+Total interests
+equity
+178,040
+425
+278,249 261,166
+(923) (17,083)
+(719)
+(28,823) 13,382
+Total comprehensive income
+(17,515)
+(432)
+(17,083)
+(17,083)
+(923)
+(719)
+13,382
+(28,823)
+(note 43)
+Other comprehensive income
+279,106
+857
+1,800,519
+1,789,474 11,045
+781,988
+278,249 278,249
+Profit for the year
+571,704
+684
+(3,926)
+(31,432)
+246,356 29,956
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Equity
+Issued
+44,947
+(24,734)
+24,734
+24,734
+(27,288)
+27,288
+(2,331)
+(2,331)
+(2,331)
+(91,026)
+(91,026)
+(91,026)
+44,947
+27,288
+7,761
+(388)
+356,407 79,375
+31 December 2015
+Balance as at
+Others
+of convertible bonds
+of equity component
+Conversion and redemption
+shareholders
+Dividends to non-controlling
+Capital injection by non-
+controlling shareholders
+(159)
+7,761
+10,673
+10,673
+The notes on pages 140 to 271 form part of these financial statements.
+Includes the appropriation made by subsidiaries in the amount of RMB1,303 million.
+(ii)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB71 million and RMB890 million,
+respectively.
+11,045 1,800,519
+684 571,704 781,988 1,789,474
+(31,432) (3,926)
+29,956
+152,026 178,040 246,356
+(40)
+85
+(125)
+(125)
+(125)
+(388)
+(388)
+(8)
+.
+323
+323
+(498)
+867
+(339)
+(159)
+(159)
+3,438
+3,438
+in subsidiaries
+Change in share holding
+Acquisition of subsidiaries
+2,912
+(note 43)
+Other comprehensive income
+equity
+6,445 1,537,304
+589 277,720
+9
+Total
+controlling
+reserves Subtotal profits Total interests
+661 492,312 650,236 1,530,859
+277,131 277,131
+Profit for the year
+(3,853)
+reserve
+Retained
+Other
+hedging
+General revaluation translation
+reserve reserve reserve
+4,809 (26,103)
+150,752 221,622
+144,424
+reserve
+reserve
+Surplus
+Capital
+share equity convertible
+capital instrument bonds
+353,495 34,428
+388
+Balance as at 1 January 2015
+Non-
+Cash flow
+Investment currency
+Foreign
+component
+of
+Other
+25,147
+134
+(5,329)
+Total comprehensive income
+Conversion of convertible
+bonds
+44,947
+equity holders
+Capital injection by other
+reserve (ii)
+Appropriation to general
+reserve (i)
+Appropriation to surplus
+(note 18)
+Dividends preference shares
+2014 final (note 18)
+Dividends ordinary shares
+298,125
+1,101
+297,024
+277,131
+19,893
+148
+20,405
+512
+19,893
+19,893
+148
+33
+(73)
+(5,329)
+25,147
+(73)
+and Accounting Department
+General Manager of Finance
+Zhang Wenwu
+668,733
+12
+(193,112)
+(220,835)
+Impairment losses on:
+Loans and advances to customers
+Others
+OPERATING PROFIT
+Share of profits of associates and joint ventures
+PROFIT BEFORE TAXATION
+Income tax expense
+PROFIT FOR THE YEAR
+641,681
+Attributable to:
+Non-controlling interests
+PROFIT FOR THE YEAR
+26
+585
+15
+(86,138)
+(1,756)
+(86,022)
+(971)
+360,675
+360,905
+2,604
+2,330
+Equity holders of the parent company
+Operating expenses
+OPERATING INCOME
+14,281
+20
+220
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+31 December 2016 31 December 2015
+Notes
+(In RMB millions, unless otherwise stated)
+31 December 2016
+Consolidated Statement of Financial Position
+133
+Annual Report 2016
+The notes on pages 140 to 271 form part of these financial statements.
+298,125
+261,591
+1,101
+297,024
+261,166
+425
+(104)
+(5,953)
+Net gain on financial investments
+10
+4,545
+4,920
+Other operating income, net
+11
+13,964
+363,279
+3,350,788
+363,235
+(84,173)
+Items that will not be reclassified to profit or loss:
+Share of the other comprehensive income of investees
+accounted for using equity method which will not be
+reclassified to profit or loss
+Others
+15
+(3)
+(8)
+Items that may be reclassified subsequently to profit or loss:
+Net (losses)/gains from change in fair value of available-for-sale
+financial assets
+(29,449)
+25,745
+Effective hedging portion of gains or losses arising from
+cash flow hedging instruments
+(751)
+(88)
+43
+Share of the other comprehensive income of investees
+accounted for using equity method which may be
+(860)
+156
+13,608
+(5,400)
+Others
+(75)
+Subtotal of other comprehensive income for the year
+(17,515)
+20,405
+Total comprehensive income for the year
+261,591
+298,125
+reclassified subsequently to profit or loss
+Foreign currency translation differences
+2015
+277,720
+2016
+279,106
+Notes
+(85,515)
+Key audit matters (continued)
+279,106
+277,720
+278,249
+277,131
+857
+279,106
+589
+277,720
+EARNINGS PER SHARE
+Basic (RMB yuan)
+Diluted (RMB yuan)
+19
+0.77
+0.77
+19
+0.77
+0.77
+Details of the dividends declared and paid or proposed are disclosed in note 18 to the financial statements.
+The notes on pages 140 to 271 form part of these financial statements.
+132
+ICBC
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+Year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Profit for the year
+Other comprehensive income (after tax, net):
+16
+3,059,633
+21
+797,473
+Other equity instruments
+Share capital
+Equity attributable to equity holders of the parent company
+EQUITY
+20,409,261
+22,156,102
+TOTAL LIABILITIES
+589,073
+637,830
+39
+Other liabilities
+306,622
+Including: Preference shares
+63,266
+995
+38
+Debt securities issued
+31
+Deferred income tax liabilities
+Income tax payable
+16,281,939
+17,825,302
+37
+Due to customers
+183,352
+218,427
+36
+52,640
+604
+357,937
+Perpetual bond
+Reserves
+Retained profits
+The notes on pages 140 to 271 form part of these financial statements.
+Vice Chairman and President
+Gu Shu
+Chairman
+Yi Huiman
+22,209,780
+11,045
+1,800,519
+1,981,163
+24,137,265
+1,789,474
+1,969,751
+11,412
+781,988
+940,663
+571,704
+586,630
+42
+6,676
+79,375
+79,375
+79,375
+86,051
+41
+356,407
+356,407
+40
+Total comprehensive income attributable to:
+TOTAL EQUITY
+Non-controlling interests
+Certificates of deposit
+337,191
+589,306
+35
+29
+Investments in associates and joint ventures
+4,666,691
+5,006,699
+27
+Financial investments
+11,652,812
+12,767,334
+26
+Loans and advances to customers
+996,333
+755,627
+25
+Reverse repurchase agreements
+78,870
+94,452
+24
+Derivative financial assets
+210,434
+285,144
+23
+Financial assets designated at fair value through profit or loss
+132,838
+189,331
+22
+Financial assets held for trading
+683,793
+30,077
+136
+Property and equipment
+246,209
+Repurchase agreements
+2,265,860
+2,016,799
+34
+Due to banks and other financial institutions
+210
+303,927
+76,826
+89,960
+24
+Derivative financial liabilities
+366,752
+33
+Financial liabilities designated at fair value through profit or loss
+545
+Due to central banks
+LIABILITIES
+22,209,780
+24,137,265
+TOTAL ASSETS
+458,699
+585,733
+32
+Other assets
+21,066
+24,185
+224,426
+28,398
+31
+Deferred income tax assets
+30
+ICBC
+TOTAL EQUITY AND LIABILITIES
+Year ended 31 December 2016
+NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
+(280,497)
+428,071
+Cash and cash equivalents at beginning of the year
+1,441,298
+994,264
+Effect of exchange rate changes on cash and cash equivalents
+28,567
+18,963
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+45
+1,189,368
+1,441,298
+Interest paid
+810,718
+864,899
+(317,533)
+(18,279)
+NET FEE AND COMMISSION INCOME
+7
+144,973
+143,391
+Net trading income
+(36,732)
+8
+4,227
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+ICBC
+138
+The notes on pages 140 to 271 form part of these financial statements.
+(338,014)
+6,457
+(19,741)
+(50,786)
+(8)
+(1,373)
+(158)
+Proceeds from disposal of associates and joint ventures
+Dividends received
+Net cash flows from investing activities
+CASH FLOWS FROM FINANCING ACTIVITIES
+Proceeds from issue of other equity instruments
+Capital injection by non-controlling shareholders
+Proceeds from issuance of debt securities
+Interest paid on debt securities
+Repayment of debt securities
+Acquisition of non-controlling interests
+487
+1,356
+(468,932)
+1,094
+(666,961)
+6,691
+45,000
+1,520
+323
+896,665
+(71)
+Dividends paid to non-controlling shareholders
+(2,331)
+(4,450)
+Dividends paid on preference shares
+(91,026)
+Net cash flows from financing activities
+(83,150)
+(374)
+(94,205)
+(854,012)
+(10,325)
+(13,979)
+116,214
+Dividends paid on ordinary shares
+161,670
+164,714
+507,867
+130
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This
+report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report.
+Auditor's responsibilities for the audit of the consolidated financial statements
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+Responsibilities of the directors for the consolidated financial statements
+Independent Auditor's Report
+129
+Annual Report 2016
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+Consolidated Cash Flow Statement
+IT systems and controls over financial reporting
+The key audit matter
+The Group operates one of the largest and most complex
+IT systems used by a bank globally.
+Automated accounting procedures and IT environment
+controls, which include IT governance, controls over
+program development and changes, access to programs
+and data and IT operations, are required to be designed
+and to operate effectively to ensure accurate financial
+reporting.
+Of particular importance are system calculations,
+logic regarding significant accounts, including interest
+calculations, interfaces between business management
+systems and accounting systems and data migration from
+certain legacy systems to new systems.
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are
+fundamentally reliant on complex IT systems and control
+processes which are driven by significant transaction
+volumes caused by the size of the customer base both in
+the corporate and the retail banking businesses in China
+and globally.
+ICBC
+How the matter was addressed in our audit
+assessing the design, implementation and
+operating effectiveness of key internal controls
+over the continued integrity of all major IT systems
+fundamental to dealing with the financial data,
+particularly financial reporting;
+examining the framework of governance over
+the Group's IT organisation and the controls over
+program development and changes, access to
+programs and data and IT operations, including
+compensating controls where required;
+evaluating the design, implementation and operating
+effectiveness of the significant accounts-related
+IT process controls by assessing the operating
+effectiveness of IT Application Controls, assessing
+the operating effectiveness of certain automated
+controls and system calculations which are relevant
+to the Group's compliance activities and assessing
+the consistency of data transmission and data
+migration;
+assessing the availability and stability of key
+operating systems, taking into consideration
+the rapid development of businesses types and
+transactions volumes as well as IT projects that have
+a significant impact on business continuity.
+Information other than the consolidated financial statements and auditor's report thereon
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+We used our internal IT specialists to perform audit
+procedures to assess IT systems and controls over financial
+reporting, which included:
+Independent Auditor's Report
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Interest income
+Interest expense
+NET INTEREST INCOME
+Fee and commission income
+Fee and commission expense
+66
+Notes
+6 7 7
+2016
+2015
+871,779
+(319,634)
+(363,912)
+471,846
+791,480
+(2,007,160)
+1,378,079
+(In RMB millions, unless otherwise stated)
+Consolidated Statement of Profit or Loss
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, related safeguards.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Simon John Edward Gleave.
+Year ended 31 December 2016
+KPMG
+8th Floor, Prince's Building
+10 Chater Road
+Central, Hong Kong
+30 March 2017
+Annual Report 2016
+131
+Certified Public Accountants
+2,059,722
+Equity holders of the parent company
+Non-controlling interests
+2,850
+(2,492,693)
+14,237
+13,349
+Accreted interest on impaired loans
+Gain on disposal of available-for-sale financial assets, net
+10
+Net trading gain on equity investments
+8
+60%
+(5,135)
+(4,156)
+(4,202)
+(4,765)
+(345)
+(33)
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+9
+Due from central banks
+Net (increase)/decrease in operating assets:
+468,671
+463,087
+(155)
+(343)
+Interest expense on debt securities issued
+10
+(848)
+(181)
+other assets (other than repossessed assets)
+Net gain on disposal and overage of property and equipment and
+5,953
+104
+Dividend income
+(273,546)
+(7,494)
+Gain on unrealised foreign exchange
+3,481
+(In RMB millions, unless otherwise stated)
+Notes
+2016
+2015
+Profit before taxation
+363,279
+363,235
+Adjustments for:
+Share of profits of associates and joint ventures
+(2,604)
+(2,330)
+Depreciation
+19,761
+18,049
+Amortisation
+12
+971
+1,756
+15
+to customers
+Impairment losses on assets other than loans and advances
+86,022
+(9,282)
+86,138
+Impairment losses on loans and advances to customers
+(1,422)
+(2,155)
+Amortisation of financial investments
+2,295
+2,059
+26
+442,973
+CASH FLOWS FROM OPERATING ACTIVITIES
+(136,134)
+Other liabilities
+136,604
+896,426
+1,664,704
+1,960,343
+Net cash flows from operating activities before tax
+332,539
+1,218,547
+Income tax paid
+Net cash flows from operating activities
+(93,318)
+239,221
+(86,783)
+1,131,764
+The notes on pages 140 to 271 form part of these financial statements.
+Annual Report 2016
+137
+Consolidated Cash Flow Statement
+(42,297)
+Due from banks and other financial institutions
+(39,281)
+Investments in associates and joint ventures
+Purchases of financial investments
+(other than repossessed assets)
+688,632
+Proceeds from disposal of property and equipment and other assets
+CASH FLOWS FROM INVESTING ACTIVITIES
+2015
+2016
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Purchases of property and equipment and other assets
+1,477,846
+Proceeds from sale and redemption of financial investments
+1,136
+(54,153)
+(91,173)
+Due to customers
+Financial assets designated at fair value through profit or loss
+(72,653)
+103,856
+Reverse repurchase agreements
+(6,395)
+130,224
+Loans and advances to customers
+(1,119,674)
+(924,231)
+Other assets
+(132,697)
+(774,096)
+(98,020)
+(1,210,467)
+23,938
+Certificates of deposit
+(43,766)
+(1,795,252)
+252,115
+Repurchase agreements
+703,298
+Financial assets held for trading
+Due to banks and other financial institutions
+(421)
+Due to central banks
+(284,962)
+Financial liabilities designated at fair value through profit or loss
+63,898
+335
+(290,032)
+Net increase/decrease) in operating liabilities:
+Notes to the Financial Statements
+141
+Annual Report 2016
+using the equity method as described in IAS 28.
+•
+in accordance with IFRS 9 (or IAS 39); or
+•
+at cost;
+•
+Amendments to IAS 27, Separate financial statements "Equity method in separate financial statements"
+The amendments allow an entity to apply the equity method to account for its investments in subsidiaries, joint ventures and
+associates in its separate financial statements. As a result of the amendments, the entity can choose to account for these
+investments either:
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+The 2012-2014 cycle of annual improvement contains amendments to four standards with consequential amendments
+to other standards and interpretations including IFRS 5 Non-current assets held for sale and discounted operations, IFRS 7
+Financial instruments: disclosures, IAS 19 Employee benefits, IAS 34 Interim financial reporting.
+order of notes;
+•
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+assessment of materiality versus minimum disclosure requirements of a standard;
+•
+The amendments clarify various presentation issues relating to:
+Annual Improvements to IFRSS 2012-2014 Cycle
+Amendments to IAS 1, Presentation of financial statements "Disclosure initiative"
+An investment entity measuring all of its subsidiaries at fair value is still required to provide the disclosures relating to
+investment entities required by IFRS 12, even though it is not preparing consolidated financial statements.
+When applying the equity method, a non-investment entity investor is allowed, but not required, to retain the fair
+value measurement applied by its investment entity associate or joint venture for their subsidiaries, i.e. the investor can
+make a policy choice.
+A subsidiary that is itself an investment entity should not be consolidated even if it provides services related to the
+parent's investment activities.
+•
+•
+Amendments to IFRS 10, IFRS 12 and IAS 28, Investment entities: Applying the consolidation exception
+The amendments clarify the following areas of the accounting requirements of investment entities:
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+Exemption from preparing consolidated financial statements under IFRS 10.4(a) is available to a parent entity that is a
+subsidiary of an investment entity, even if the investment entity measures all of its subsidiaries, including that parent
+entity, at fair value.
+IFRS 14
+Amendments to IFRS 11, Joint Arrangements "Accounting for acquisitions of interests in joint operations"
+The amendments provide new guidance on how to account for the acquisition of an interest in a joint operation that
+constitutes a business. Specifically, the amendments require business combination accounting to be applied in this situation.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+Due from banks and other financial institutions
+disaggregation and aggregation;
+2,991,619
+3,290,270
+20
+Cash and balances with central banks
+TOTAL ASSETS
+Other assets
+Deferred income tax assets
+Property and equipment
+31 December 2016 31 December 2015
+Notes
+ASSETS
+(In RMB millions, unless otherwise stated)
+31 December 2016
+Statement of Financial Position
+(3) Change in accounting policies
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS")) and
+amendments to standards that are effective in 2016 and relevant to the Group's operation.
+Amendments to IFRS 11
+Amendments to IAS 16 and IAS 38
+Amendments to IAS 27
+Annual Improvements to IFRSS 2012-2014 Cycle
+Amendments to IFRS 10, IFRS 12 and IAS 28
+Amendments to IAS 1
+Regulatory deferral accounts
+Joint Arrangements "Accounting for acquisitions of interests in joint
+operations"
+Clarification of acceptable methods of depreciation and amortisation
+Separate financial statements "Equity method in separate financial
+statements"
+Investment entities: Applying the consolidation exception
+Presentation of financial statements "Disclosure initiative"
+The principal effects of adopting these new and amended IFRSS are as follows:
+IFRS 14, Regulatory deferral accounts
+This interim standard permits first-time adopters of IFRS to continue to use previous GAAP to account for regulatory deferral
+account balances while the IASB completes its comprehensive project in this area.
+As an existing IFRS adopter, the new standard is not applicable to the Group.
+Amendments to IAS 16 and IAS 38, Clarification of acceptable methods of depreciation and amortisation
+The amendments introduce a rebuttable presumption to IAS 38 that the use of revenue-based amortisation methods for
+intangible assets is inappropriate. This presumption can be overcome only when revenue and the consumption of the
+economic benefits of the intangible asset are 'highly correlated', or when the intangible asset is expressed as a measure of
+revenue. The amendments also prohibit the use of revenue-based depreciation methods for property, plant and equipment
+under IAS 16.
+• presentation of sub-totals; and
+(5) Financial instruments
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+At initial recognition, financial liabilities are classified into two categories: financial liabilities at fair value through profit or
+loss and other financial liabilities.
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities at
+fair value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other
+categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their
+initial costs.
+144
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Measurement of fair value
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Financial assets or financial liabilities at fair value through profit or loss
+Financial assets or financial liabilities at fair value through profit or loss include financial assets or financial liabilities held for
+trading and financial assets or financial liabilities designated at fair value through profit or loss.
+Financial assets or financial liabilities held for trading
+A financial asset or financial liability is classified as held for trading if:
+At initial recognition, financial assets are classified into four categories: financial assets at fair value through profit or loss,
+held-to-maturity financial investments, loans and receivables and available-for-sale financial assets.
+(i)
+(ii)
+(iii)
+on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for
+which there is evidence of a recent actual pattern of short term profit-taking; or
+it is a derivative that is not designated as an effective hedging instrument.
+Financial assets or financial liabilities held for trading are measured at fair value after initial recognition. Realised or
+unrealised income or expenses are recognised in profit or loss.
+Financial assets or financial liabilities designated at fair value through profit or loss
+A financial instrument may be designated as a financial asset or financial liability at fair value through profit or loss upon
+initial recognition, if it meets any of the criteria set out below:
+(i)
+(ii)
+(iii)
+It eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from
+measuring the financial asset or financial liability or from recognising the gains and losses on them on different bases;
+It applies to a group of financial assets, financial liabilities or both which is managed and its performance evaluated on
+a fair value basis, in accordance with a documented risk management or investment strategy, and where information
+about that group of financial instruments is provided internally on that basis to key management personnel; or
+21
+it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
+Initial recognition of financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretation and
+amendments.
+ICBC
+142
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Subsidiaries
+Subsidiaries are entities controlled by the Group. The Group controls an entity if it is exposed, or has rights, to, variable
+returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
+The Group reassesses whether it has control if there are changes to one or more of the elements of control. This includes
+circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead
+to the Group having power over an entity.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses (see note
+3(21)).
+(2) Non-controlling interests
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Group.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+(3) Associates and Joint ventures
+An associate is an entity in which the Group or Bank has significant influence.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see note 3(21)).
+Annual Report 2016
+143
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(4) Foreign currency translation
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken to other comprehensive income. On disposal of a foreign operation, the
+cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in
+profit or loss.
+presentation of other comprehensive income items arising from equity-accounted associates and joint ventures.
+927,705
+Income tax payable
+Financial assets held for trading
+79,375
+79,375
+79,375
+79,375
+41
+356,407
+356,407
+40
+19,285,200
+20,878,151
+486,426
+481,236
+39
+240,175
+279,446
+38
+62,136
+51,051
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+Retained profits
+Reserves
+Including: Preference shares
+Other equity instruments
+Share capital
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+22
+The financial instrument contains one or more embedded derivatives, unless the embedded derivative(s) does not
+significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
+42
+596,181
+ICBC
+140
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4.
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial
+instruments, financial assets and liabilities held for trading, financial assets and liabilities designated at fair value through
+profit or loss and available-for-sale financial assets (unless the fair value cannot be reliably measured) that have been
+measured at fair value, as further explained in the respective accounting policies below.
+(2) Basis of preparation
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+(1) Statement of compliance
+2. BASIS OF PREPARATION
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+The Bank's A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong
+Limited and the stock codes are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on the
+Stock Exchange of Hong Kong Limited and the stock codes are 4603, 4604 and 84602, respectively. The Bank's domestic
+preference shares are listed on the Shanghai Stock Exchange and the stock code is 360011.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking Regulatory Commission (the "CBRC")
+of the PRC. The Bank obtained its business license with unified social credit code 91100000100003962T from the State
+Administration for Industry and Commerce of the PRC. The legal representative is Yi Huiman and the registered office is
+located at No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring.
+1. CORPORATE INFORMATION
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+139
+Annual Report 2016
+General Manager of Finance
+and Accounting Department
+Zhang Wenwu
+The notes on pages 140 to 271 form part of these financial statements.
+Vice Chairman and President
+Gu Shu
+Chairman
+Yi Huiman
+21,046,946
+1,761,746
+1,909,929
+22,788,080
+729,783
+872,290
+601,857
+15,781,673
+17,235,587
+37
+29
+101,066
+102,288
+28
+4,450,998
+4,748,376
+27
+Investments in associates
+Investments in subsidiaries
+Financial investments
+11,026,476
+12,033,200
+26
+Loans and advances to customers
+792,876
+502,296
+25
+Reverse repurchase agreements
+33,290
+62,892
+24
+Derivative financial assets
+206,282
+272,118
+23
+Financial assets designated at fair value through profit or loss
+115,950
+184,074
+22
+34,242
+34,242
+30
+124,089
+Due to customers
+150,113
+194,503
+36
+Certificates of deposit
+130,830
+304,987
+35
+Repurchase agreements
+297,414
+33,144
+2,103,289
+1,920,782
+34
+Due to banks and other financial institutions
+58,179
+772,568
+24
+379
+352,001
+33
+Financial liabilities designated at fair value through profit or loss
+Due to central banks
+LIABILITIES
+21,046,946
+22,788,080
+371,556
+479,196
+32
+20,354
+27,334
+31
+129,669
+Derivative financial liabilities
+In the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be
+reliably measured, it cannot be designated as a financial asset at fair value through profit or loss.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Annual Report 2016
+If there is objective evidence that the financial asset is impaired, the cumulative loss, measured as the difference between the
+acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss on that
+financial asset previously recognised in profit or loss, is removed from other comprehensive income and recognised in profit
+or loss.
+In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged
+decline in the fair value of the investment below its cost. The Group considers the time period and continuity of the
+magnitude of the decline to evaluate whether the decline in fair value is prolonged. More significantly the fair value declines
+relative to the cost, the less the volatility moves, and the longer the decline lasts or the more obvious the continuity of the
+magnitude of the decline is, the more likely the equity investment impairs. In general, the Group considers the situation
+when fair value is less than 40% of the cost as significant decline and that when fair value falls below the cost in a period
+over 12 months as prolonged decline.
+Annual Report 2016
+147
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+If, after an impairment loss has been recognised on an available-for-sale debt instrument, the fair value of the debt
+instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the
+impairment loss was recognised the impairment loss is reversed through profit or loss. An impairment loss recognised for an
+investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. The impairment loss
+on an investment in unquoted equity instrument whose fair value cannot be reliably measured is not reversed.
+(7) Renegotiated loans
+Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending
+the payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is
+no longer considered past due. Management continuously reviews renegotiated loans to ensure that all criteria are met and
+that future payments are likely to occur. The loans continue to be subject to individual or collective impairment assessment,
+and the provision is calculated using the loan's original effective interest rate.
+(8) Derecognition of financial assets and liabilities
+Available-for-sale financial assets
+Financial assets
+The rights to receive cash flows from the asset have expired; or
+The Group has transferred its rights to receive cash flows from the asset; or has retained its rights to receive cash
+flows from the asset but has assumed an obligation to pay them in full without material delay to a third party under a
+"pass-through" arrangement; and either the Group has transferred substantially all the risks and rewards of ownership
+of the financial asset; or the Group has neither transferred nor retained substantially all the risks and rewards of
+ownership of the financial asset, but has transferred control of the asset.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash flows
+from the asset but has entered into a pass-through arrangement, and has neither transferred nor retained substantially all
+the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's
+continuing involvement in the asset.
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Securitisation
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets are
+set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets are not
+derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation of financial
+assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent of its continuing
+involvement, derecognise the remaining. The book value of the transferred assets is apportioned between the derecognised
+portion and the retained portion based on their respective relative fair values, and the difference between the book value of the
+derecognised portion and the total consideration paid for the derecognised portion is recorded in profit or loss.
+Sales of assets on condition of repurchase
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+ICBC
+Notes to the Financial Statements
+Financial assets and liabilities designated at fair value through profit or loss are measured at fair value after initial
+recognition. Realised and unrealised income or expenses are recognised in profit or loss.
+A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised
+when:
+If there is objective evidence that an impairment loss has been incurred on the financial asset, the amount of impairment
+loss, measured as the difference between the carrying amount of that financial asset and the present value of estimated
+future cash flows discounted at the current market rate of return for a similar financial asset, is recognised in profit or loss. In
+the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be reliably
+measured, the amount of impairment loss is recognised in profit or loss. Impairment losses on these assets are not reversed.
+148
+When an item of loans and receivables is uncollectible, it is written off against the related allowance for impairment losses.
+Such loans and receivables are written off after all the necessary procedures have been completed and the amount of the
+loss has been determined. Subsequent recoveries of the amounts previously written off decrease the amount of the provision
+for loan impairment in profit or loss.
+Notes to the Financial Statements
+Financial assets carried at cost
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Held-to-maturity financial investments
+Held-to-maturity financial investments are non-derivative financial assets with fixed or determinable payments and a fixed
+maturity and which the Group has the positive intention and ability to hold to maturity. After initial measurement, held-to-
+maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less
+any impairment loss. Gains and losses are recognised in profit or loss when the held-to-maturity financial investments are
+derecognised or impaired, as well as through the amortisation process.
+If, as a result of a change in intention or ability, it is no longer appropriate to classify an investment as held-to-maturity, it
+shall be reclassified as available-for-sale and remeasured at fair value.
+Loans and receivables
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
+an active market and the Group has no intention of trading the assets immediately or in the near term. After initial
+measurement, such assets are subsequently carried at amortised cost using the effective interest rate method, less any
+allowance for impairment losses. Gains and losses are recognised in profit or loss when such assets are derecognised or
+impaired, as well as through the amortisation process.
+Discounted bills are granted by the Group to its customers based on the bank acceptance held which has not matured.
+Discounted bills are carried at face value less unrealised interest income and the interest income of the discounted bills is
+recognised using the effective interest rate method.
+Available-for-sale financial assets
+Available-for-sale financial assets are non-derivative financial assets which are designated as such or are not classified
+in any of the three preceding categories. After initial recognition, available-for-sale financial assets are subsequently
+measured at fair value. Premiums and discounts on available-for-sale financial assets are amortised using the effective
+interest rate method and are taken to the statement of profit or loss as interest income. Changes in fair value of available-
+for-sale financial assets are recognised as a separate component of other comprehensive income until the financial asset
+is derecognised or determined to be impaired at which time the cumulative gains or losses previously recorded in other
+comprehensive income are transferred to profit or loss. Dividend and interest income on available-for-sale financial assets are
+recorded in profit or loss.
+In the case of an equity investment classified as available for sale, if neither a quoted market price in an active market exists
+nor its fair value can be reliably measured, it will be measured at cost less any impairment loss.
+145
+Other financial liabilities are carried at amortised cost using the effective interest rate method after initial recognition.
+(6) Impairment of the financial assets
+An assessment on carrying amount of financial assets is made at the end of each reporting period. Impairment is recognised
+if there is objective evidence of impairment of financial assets, i.e., one or more events that occur after the initial recognition
+of those assets and have an impact on the estimated future cash flows of the financial assets or group of financial assets
+that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers
+is experiencing significant financial difficulty, default or delinquency in interest or principal payments, they would probably
+enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable
+decrease in the estimated future cash flows.
+146
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Financial assets carried at amortised cost
+If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments has been
+incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value
+of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's
+original effective interest rate and shall include the value of any relevant collateral. The original effective interest rate is the
+rate used to determine the values of financial assets at initial recognition. With respect to floating-rate loans, receivables and
+held-to-maturity investments, the discount rate could be the current effective interest rate determined under the contract.
+The carrying amount of the asset is reduced through the use of an impairment provision account and the amount of the loss
+is recognised in profit or loss.
+The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
+significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no
+objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is
+included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively
+assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or
+continues to be recognised are not included in a collective assessment of impairment.
+If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be attributed objectively to an
+event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent
+reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the assets does not
+exceed its amortised cost at the reversal date.
+Future cash flows of a group of financial assets that are collectively evaluated for impairment are estimated on the basis of
+historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is
+adjusted on the basis of current observable data to reflect the impact of current conditions that did not affect the period on
+which the historical loss experience is based and to eliminate the impact of historical conditions that do not exist currently.
+The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group.
+Other financial liabilities
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+(24) Fiduciary activities
+Annual Report 2016
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when it is incurred.
+155
+(25) Insurance contracts
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. The contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+(i)
+(ii)
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Insurance income recognition
+Insurance premium income is recognised when:
+(i) The insurance contract is issued, and related insurance risk is undertaken by the Group;
+(ii)
+The related economic benefits are likely to flow to the Group;
+Early retirement benefits
+Insurance contract liabilities
+Insurance contracts classification
+(iii) Related income can be reliably measured.
+154
+When the Group can no longer withdraw an offer of those benefits;
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(21) Asset impairment
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+(22) Cash and cash equivalents
+Cash and cash equivalents refer to short term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+(23) Employee benefits
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Post-employment benefits-defined contribution plans
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organizations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Termination benefits
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+Short-term employee benefits
+(26) Revenue recognition
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Interest income
+Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+Annual Report 2016
+157
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(ii)
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+(i)
+(ii)
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly. Future taxable profits are determined based on business plans for individual subsidiaries in the Group.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+(28) Leases
+Leases which transfer substantially all the risks and rewards of ownership of the assets to the lessees are classified as
+finance leases. Leases where substantially all the rewards and risks of the assets remain with the lessor are accounted for as
+operating leases.
+Finance leases
+When the Group is a lessor under finance leases, an amount representing the minimum lease payment receivables and initial
+direct costs is included in the statement of financial position as loans and advances to customers. Any unguaranteed residual
+value is also recognised at the inception of the lease. The difference between the sum of the minimum lease payment
+receivables, initial direct costs, the unguaranteed residual value and their present value is recognised as unearned finance
+income. Unearned finance income is recognised over the period of the lease using the effective interest rate method.
+Operating leases
+Rental payments applicable to operating leases are charged to profit or loss on the straight-line basis over the lease terms.
+When the Group is the lessor under operating leases, the assets subject to operating leases are accounted for as the Group's
+assets. Rental income is recognised as "other operating income, net” in the statement of profit or loss on the straight-line
+basis over the lease term.
+158
+ICBC
+(i)
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+Deferred income tax
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as available-
+for-sale financial assets, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where
+appropriate, to the net carrying amount of the financial asset. The calculation takes into account all contractual terms of
+the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly
+attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. The carrying
+amount of the financial asset is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying
+amount is calculated based on the original effective interest rate and the change in carrying amount is recorded in profit or
+loss.
+156
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest
+income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the
+impairment loss.
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be
+divided into the following two categories:
+(i)
+(ii)
+Fee income on transactions conducted or from services provided over a period of time
+These fees mainly include fee income on settlement and clearing business, commission income and fee income on
+asset management, custody and other management advisory services. Fee income is recognised on the basis of when
+the transaction is completed or on an accrual basis when the service is provided over a period of time.
+Fee income from providing transaction services
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the
+arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognised on
+completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are
+recognised after fulfilling the corresponding criteria.
+The fair value of the award credits granted to the bank card holders is deferred and recognised as fee and commission
+income when the award credits are redeemed or expire.
+Dividend income
+Dividend income is recognised when the Group's right to receive payment is established.
+Net trading income
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+(27) Income tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+Current tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Notes to the Financial Statements
+153
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that is
+attributable to a particular risk and could affect the profit or loss. For fair value hedges, the carrying amount of the hedged
+item is adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the
+gains and losses from both are taken to profit or loss.
+Fair value hedges
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
+the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
+The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk
+being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting the exposure to changes in
+the hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective
+in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they have
+actually been highly effective throughout the financial reporting periods for which they were designated.
+Hedge accounting
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+149
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised,
+the hedge no longer meets the criteria for hedge accounting or the Group revokes the designation. If the hedged items are
+derecognised, the unamortised fair value is recorded in profit or loss.
+Annual Report 2016
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+Certain derivatives embedded in other financial instruments are treated as separate derivatives when their economic
+characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair
+value through profit or loss. These embedded derivatives are measured at fair value with the changes in fair value recognised
+in profit or loss.
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+(11) Derivatives and hedge accounting
+Derivatives
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instruments' duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redemption price is charged to equity.
+Preference shares and perpetual bonds issued containing both equity and liability components are accounted for using the
+accounting policy for convertible instruments containing an equity component. Preference shares and perpetual bonds issued
+not containing an equity component are accounted for using the accounting policy for other convertible instruments not
+containing an equity component.
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after
+considering the definition of financial assets, financial liabilities and equity instruments.
+(10) Preference shares and perpetual bonds
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at fair value through profit or loss. The equity component is not re-measured.
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Cash flow hedges
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss. For
+designated and qualifying cash flow hedges, the effective portion of the gain or loss on the hedging instrument is initially
+recognised directly in other comprehensive income. The ineffective portion of the gain or loss on the hedging instrument is
+recognised immediately in profit or loss.
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+a hedging instrument expires, or is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge
+accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive
+income until the hedged forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur,
+the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+(15) Precious metals
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+•
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+(16) Property and equipment
+•
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+150
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(12) Trade date accounting
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
+instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the gain or loss
+relating to the ineffective portion is recognised immediately in the income statement. Gains and losses accumulated in equity are
+included in the income statement when the foreign operation is disposed of as part of the gain or loss on the disposal.
+Net investment hedge is a hedge of a net investment in a foreign operation.
+Net investment hedges
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Annual Report 2016
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
+(17) Land use rights
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+(18) Repossessed assets
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+(19) Business combination and goodwill
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+152
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUS) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+(20) Provisions
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels. The
+residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from 15 to
+25 years.
+Financial liabilities
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Annual Report 2016
+151
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Estimated
+useful life
+Properties and buildings
+5-50 years
+Estimated
+residual
+value rate
+0%-3%
+Annual
+depreciation rate
+1.94%-20%
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+2-7 years
+14.29%-50%
+Over the shorter of the economic useful lives
+and remaining lease terms
+(9) Convertible instruments
+(13) Presentation of financial instruments
+(2)
+168
+3,808
+Repairs and maintenance charges
+7,349
+7,479
+Lease payments under operating leases in respect of land and buildings
+14,560
+14,660
+Depreciation
+Premises and equipment expenses:
+114,173
+113,354
+3,515
+13,889
+27,563
+25,434
+72,721
+73,348
+Post-employment benefits -defined contribution plans (i)
+Staff benefits
+Salaries and bonuses
+Staff costs:
+2015
+2016
+12. OPERATING EXPENSES
+14,572
+14,281
+Utility expenses
+2,690
+13. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+167
+Annual Report 2016
+(ii) Principal auditor's remuneration of RMB190 million for the year (2015: RMB175 million) is included in other
+administrative expenses.
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+(i)
+220,835
+193,112
+2,467
+12,714
+Others
+42,320
+17,319
+21,219
+20,388
+Taxes and surcharges
+Other administrative expenses (ii)
+2,295
+2,059
+Amortisation
+28,114
+11,578
+13,964
+4,124
+3,149
+4,545
+4,765
+4,202
+Gain on disposal of available-for-sale financial assets, net
+155
+343
+Dividend income
+30
+173
+Dividend income from listed investments
+125
+4,920
+170
+2015
+2016
+10. NET GAIN ON FINANCIAL INVESTMENTS
+The above amounts represent gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities designated at fair value through profit or loss upon initial
+recognition.
+(5,953)
+(104)
+(20,273)
+(10,096)
+14,320
+9,992
+2015
+Dividend income from unlisted investments
+166
+ICBC
+11. OTHER OPERATING INCOME, NET
+Others
+487
+Gain on acquisition of subsidiary
+212
+270
+Sundry bank charge income
+1,664
+1,710
+Net gain on disposal of property and equipment, repossessed assets and others
+5,866
+5,998
+Leasing income
+1,894
+3,204
+Gain from foreign exchange and foreign exchange products, net
+(20,599)
+(28,808)
+20,633
+28,441
+Operating cost of insurance business
+Net premium income
+2015
+2016
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+ICBC
+Name
+YI Huiman(i)
+Former Executive Director, Vice President
+314
+245
+280
+25
+50
+549
+292
+455
+470
+470
+Former Non-executive Director
+22522228
+470
+470
+60
+254
+43
+202
+130
+| | | |
+394
+543
+543
+455
+591
+Former Independent Non-executive Director
+358
+of the Bank held on 24 June 2016, Mr. Yi Huiman was appointed as Executive Director of the Bank. The new term of
+office of Mr. Yi Huiman took effect from the date of review and approval by the meeting.
+On 31 May 2016, the Board of Directors of the Bank appointed Mr. Yi Huiman as Chairman of the Board of Directors of
+the Bank, and his qualification was approved by CBRC in June 2016. At the Annual General Meeting for the Year 2015
+(i)
+Fees of Mr. Zhang Wei, Mr. Hui Ping and Mr. Huang Li are their allowances obtained as Employee Representative Supervisors
+of the Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's and the Bank's 2016 financial statements. The total compensation packages will be further
+disclosed when determined by the relevant authorities.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+7,325
+2,983
+840
+3,502
+436
+358
+72
+118
+118
+Former Independent Non-executive Director
+Former Shareholder Representative Supervisor
+Former External Supervisor
+Total
+DONG Juan(xiv)
+WANG Chixi(xiii)
+YI Xiqun(xii)
+440
+440
+Former Independent Non-executive Director
+Kenneth Patrick CHUNG(xi)
+364
+107
+436
+107
+WANG Xiquan(viii)
+FU Zhongjun (ix)
+M.C.McCarthy(x)
+QU Qiang
+SHEN Bingxi(v)
+JIANG Jianqing(vii)
+HUANG Li(vi)
+Anthony Francis Neoh
+YANG Siu Shun(iii)
+Sheila Colleen Bair(iv)
+ZHANG Wei(v)
+HUI Ping
+HONG Yongmiao
+Independent Non-executive Director
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Non-executive Director
+CHENG Fengchao
+Or Ching Fai
+Independent Non-executive Director
+FEI Zhoulin
+GE Rongrong
+Non-executive Director
+Executive Director, Vice President
+Executive Director, Vice President
+Chairman of the Board of Supervisors
+Vice Chairman of the Board of Directors,
+Executive Director, President
+Chairman of the Board of Directors,
+Executive Director
+WANG Xiaoya
+ZHANG Hongli
+WANG Jingdong(ii)
+QIAN Wenhui
+GU Shu(ii)
+ZHENG Fuqing
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+Employee Representative Supervisor
+External Supervisor
+External Supervisor
+Former Chairman of the Board of
+Directors, Executive Director
+436
+107
+484
+555
+1
+107
+448
+591
+107
+484
+emoluments
+before tax
+RMB'000
+(4)=(1)+(2)+(3)
+(3)
+(1)
+RMB'000
+RMB'000
+RMB'000
+Fees
+schemes
+(before tax)
+contribution
+paid
+Total
+to defined
+Remuneration
+Year ended 31 December 2016
+Contributions
+Position
+28,414
+2016
+IFRS 2 Amendments
+Effective for annual periods beginning on or after 1 January 2018 for IFRS 1, 1 January 2018 with early adoption permission
+for IAS 28, and 1 January 2017 for IFRS 12.
+Effective for annual periods beginning on or after 1 January 2018 for deferral approach, effective for annual periods
+beginning upon initial adoption of IFRS 9 for overlay approach.
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted.
+5
+6
+Effective for annual periods is to be determined, early adoption is permitted.
+4
+Annual Report 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Further information about those changes that are expected to affect the Group is as follows:
+Amendments to IAS 12, Income taxes "Recognition of deferred tax assets for unrealised
+losses"
+The amendments stemmed from a request to clarify the requirements on recognition of deferred tax assets for unrealized
+losses on debt instruments measured at fair value. However, the amendments address a broader area of accounting for
+deferred tax assets in general.
+161
+The amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the
+carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future
+changes in the carrying amount or expected manner of recovery of the asset.
+3
+2
+Income taxes'
+Statement of cash flows'
+Revenue from contracts with customers
+Financial instruments
+Share-based payment
+Investment Property
+Effective for annual periods beginning on or after 1 January 2018, early adoption is permitted.
+Annual Improvements to IFRSS 2014-2016 Cycle³
+IFRS 16
+IFRS 10 and IAS 28 Amendments
+Insurance contracts
+Leases
+Sale or contribution of assets between an investor and its associate or joint venture
+1
+Effective for annual periods beginning on or after 1 January 2017, early adoption is permitted.
+IFRS 4 Amendments
+The amendments also provide guidance on how an entity should determine future taxable profits to support the recognition
+of a deferred tax asset arising from a deductible temporary difference.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+The amendments require entities to provide disclosures that enable users of financial statements to evaluate changes
+in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. The
+amendments do not prescribe a specific method to fulfil the new disclosure requirements. However, the amendments
+indicate that one way is to provide a reconciliation between the opening and closing balances for liabilities arising from
+financing activities.
+IFRS 9 does not fundamentally change the requirements relating to measuring and recognising ineffectiveness under IAS 39.
+However, greater flexibility has been introduced to the types of transactions eligible for hedge accounting.
+The actual impact of adopting IFRS 9 on the Group's consolidated financial statements in 2018 is not known and cannot be
+reliably estimated because it will be dependent on the financial instruments that the Group holds and economic conditions
+at that time as well as accounting elections and judgements that it will make in the future.
+The Group has established a work stream which involves finance, risk, operations, credit and IT functions. The key
+responsibilities of the work steam include analysing IFRS 9 methodology and accounting policy, developing the expected
+credit losses model, identifying data and system requirements, and establishing an appropriate operating model and
+governance framework. The work stream manages the project governance structure, assures the involvement of the
+pertinent responsible teams, and monitors the progress of the implementation work across the Group.
+Amendments to IFRS 2, Share-based payment "Classification and measurement of share-
+based payment transactions"
+The amendments clarify the accounting for the following classification and measurement issues under IFRS 2:
+Measurement of cash-settled share-based payments
+•
+Hedge accounting
+The amendments clarify that the fair value of liabilities for cash-settled share-based payments should be measured
+using the same approach as for equity-settled share-based payments - i.e. using the modified grant date method.
+Classification of share-based payments settled net of tax withholdings
+Accounting for a modification of a share-based payment from cash-settled to equity-settled
+The amendments clarify that on such a modification the liability for the original cash-settled share-based payment is
+derecognised and the equity-settled share-based payment is measured at its fair value and recognised to the extent
+that the goods or services have been received up to that date.
+Any difference between the carrying amount of the liability derecognised and the amount recognised in equity at the
+modification date is recognised in profit or loss immediately.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Annual Report 2016
+163
+The amendments introduce an exception so that a share-based payment transaction with net settlement feature
+for withholding an amount to cover the employee's tax obligations is classified as equity-settled in its entirety when
+certain conditions are met, even though the entity is then required to transfer cash (or other assets) to the tax
+authority to settle the employee's tax obligation.
+The new impairment model in IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit loss" model.
+Under the expected credit loss model, it will no longer be necessary for a loss event to occur before an impairment loss is
+recognised. Instead, an entity is required to recognise and measure expected credit losses as either 12-month expected credit
+losses or lifetime expected credit losses, depending on the asset and the facts and circumstances.
+Impairment
+For equity securities, the classification is FVTPL regardless of the entity's business model. The only exception is if the
+equity security is not held for trading and the entity irrevocably elects to designate that security as FVTOCI. If an equity
+security is designated as FVTOCI then only dividend income on that security will be recognised in profit or loss. Gains
+and losses on that security will be recognised in other comprehensive income without recycling.
+The Group will modify the disclosure of cash flows according to these amendments. The amendments are expected to have
+no impact on the financial position and the financial result.
+IFRS 15 "Revenue from contracts with customers"
+The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue:
+at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether,
+how much and when revenue is recognised.
+IFRS 15 also introduces extensive qualitative and quantitative disclosure requirements which aim to enable users of the
+financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from
+contracts with customers. Some of these apply to interim financial reports prepared under IAS 34 as well as to annual
+financial statements. An entity may adopt IFRS 15 on a full retrospective basis. Alternatively, it may choose to adopt it from
+the date of initial application by adjusting opening balances at that date. Transitional disclosures are different depending on
+the approach adopted by the entity.
+The Group is currently assessing the impact of the standard on its financial position and performance.
+IFRS 9 "Financial instruments"
+IFRS 9 will replace the current standard on accounting for financial instruments, IAS 39, Financial instruments: Recognition
+and measurement. IFRS 9 introduces new requirements for classification and measurement of financial assets, calculation of
+impairment of financial assets and hedge accounting. On the other hand, IFRS 9 incorporates without substantive changes
+the requirements of IAS 39 for recognition and derecognition of financial instruments and the classification of financial
+liabilities.
+162
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Classification and measurement
+IFRS 9 contains three principal classification categories for financial assets: measured at (1) amortised cost, (2) fair value
+through profit or loss (FVTPL) and (3) fair value through other comprehensive income (FVTOCI) as follows:
+•
+The classification for debt instruments is determined based on the entity's business model for managing the financial
+assets and the contractual cash flow characteristics of the asset. If a debt instrument is classified as FVTOCI then
+effective interest, impairments and gains/losses on disposal will be recognised in profit or loss.
+IAS 40 Amendments
+Notes to the Financial Statements
+IFRS 9
+IAS 7 Amendments
+(iii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+the entity and the Group are joint ventures of the same third party;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v)
+(vi)
+(ii)
+(vii)
+the entity is controlled or jointly controlled by a person identified in (a);
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+(30) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities
+are measured at the higher of the initial fair value less cumulative amortisation and the best estimate of expenditure being
+required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability relating to a
+financial guarantee is taken to the statement of profit or loss.
+(31) Contingent liabilities
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+the entity and the Group are members of the same group;
+the party is an entity where any of the following conditions applies:
+(29) Related parties
+A party is considered to be related to the Group if:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a)
+the party is a person or a close member of that person's family and that person:
+(i)
+(i)
+(ii)
+has significant influence over the Group; or
+or
+(b)
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+has control or joint control over the Group;
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+Annual Report 2016
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Determination of control over investees
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls a securitisation vehicle, an investment fund, a non-principal guaranteed wealth management product, a segregated
+asset management plan, trust plans or asset-backed financings.
+Securitisation vehicles
+160
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+The Group acts as manager to a number of investment funds, non-principal guaranteed wealth management products,
+segregated asset management plans, trust plans and assets-backed financings. Determining whether the Group controls
+such a structured entity usually focuses on the assessment of the aggregate economic interests of the Group in the entity
+(comprising any carried interests and expected management fees) and the decision-making authority of the entity. For all
+these structured entities managed by the Group, the Group's aggregate economic interest is in each case not significant
+and the decision makers establish, market and manage them according to restricted parameters as set out in the investment
+agreements as required by laws and regulations. As a result, the Group has concluded that it acts as agent as opposed to
+principal for the investors in all cases, and therefore has not consolidated these structured entities.
+For further disclosure in respect of unconsolidated investment funds, non-principal guaranteed wealth management
+products, segregated asset management plans, trust plans and assets-backed financings in which the Group has an interest
+or for which it is a sponsor, see Note 44.
+5.
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IAS 12 Amendments
+Investment funds, non-principal guaranteed wealth management products, segregated asset
+management plans, trust plans and asset-backed financings
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+Fair value of financial instruments
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+159
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+4.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that
+have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
+financial period are described below.
+Designation of held-to-maturity investments
+Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
+investments when the Group has the positive intention and ability to hold the investments to maturity. Accordingly, in
+evaluating whether a financial asset shall be classified as a held-to-maturity investment, significant management judgement
+is required. If the Group fails correctly to assess its intention and ability to hold the investments to maturity and the Group
+sells or reclassifies more than an insignificant amount of held-to-maturity investments before maturity, the Group would
+reclassify the whole held-to-maturity investment portfolio as available for sale.
+Impairment losses of loans and advances and amounts due from banks and other financial institutions
+The Group determines periodically whether there is any objective evidence that impairment losses have occurred on loans
+and advances and amounts due from banks and other financial institutions. If any such evidence exists, the Group assesses
+the amount of impairment losses. The amount of impairment losses is measured as the difference between the carrying
+amount and the present value of estimated future cash flows. Assessing the amount of impairment losses requires significant
+judgement on whether the objective evidence for impairment exists and also significant estimates when determining the
+present value of the expected future cash flows.
+Impairment losses of available-for-sale and held-to-maturity investments
+In determining whether there is any objective evidence that impairment losses have occurred on available-for-sale and held-
+to-maturity investments, the Group assesses periodically whether there has been a significant or prolonged decline in the fair
+value below its cost or carrying amount, or whether other objective evidence of impairment exists based on the investee's
+financial conditions and business prospects, including industry environment, change of technology as well as operating and
+financing cash flows. This requires a significant level of judgement, which would affect the amount of impairment losses.
+Impairment of goodwill
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUS to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+Income tax
+IFRS 15
+Financial Statements for the year ended 31 December 2016
+Amendments to IAS 7, Statement of cash flows
+Amendments to IAS 40, Investment property
+35,910
+Settlement, clearing business and cash management
+26,108
+27,986
+Investment banking business
+25,024
+37,625
+26,791
+20,440
+18,305
+Asset custody business (i)
+Guarantee and commitment business
+Trust and agency services (i)
+Others
+Corporate wealth management services (i)
+Personal wealth management and private banking services (i)
+37,684
+37,670
+The above interest income and expense were related to financial instruments which are not at fair value through profit or
+loss.
+(i)
+Included in interest income on loans and advances to customers for the year is an amount of RMB5,135 million (2015:
+RMB4, 156 million) with respect to the accreted interest on impaired loans.
+(ii)
+Included in interest income on financial investments for the year is an amount of RMB15 million (2015: RMB28 million)
+with respect to interest income on impaired debt securities.
+Annual Report 2016
+165
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+7.
+NET FEE AND COMMISSION INCOME
+(i)
+2016
+2015
+Bank card business
+(In RMB millions, unless otherwise stated)
+Net interest income
+6,893
+5,950
+2016
+2015
+4,450
+4,444
+345
+33
+Derivatives
+1,662
+6,457
+4,227
+The above amounts include gains and losses arising from the buying and selling of, interest income and expense on, and
+changes in the fair value of financial assets and liabilities held for trading.
+9. NET LOSS ON FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE
+THROUGH PROFIT OR LOSS
+Financial assets
+Financial liabilities
+(250)
+Equity investments
+Debt securities
+NET TRADING INCOME
+4,687
+1,907
+1,979
+3,097
+2,784
+164,714
+161,670
+Fee and commission expense
+(19,741)
+(18,279)
+144,973
+143,391
+Net fee and commission income
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB21,639 million (2015: RMB 18,659 million)
+with respect to trust and other fiduciary activities.
+8.
+5,544
+507,867
+Fee and commission income
+471,846
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+IFRS 16, "Leases"
+In January 2016, the IASB issued IFRS 16, "Leases", which replaces the current guidance in IAS 17. The new standard
+requires the companies to bring leases on-balance sheet for lessees. The new standard also makes changes in accounting
+over the life of the lease, and introduces a stark dividing line between leases and service contracts.
+Under IFRS 16 there is no longer a distinction between finance leases and operating leases so far as lessees are concerned.
+Instead, subject to practical expedients, a lessee recognises all leases on-balance sheet by recognising a right-of-use (ROU)
+asset and lease liability.
+Lessor accounting is substantially unchanged
+i.e. lessors continue to classify leases as finance and operating leases.
+ICBC
+However, there are a number of changes in the details of lessor accounting. For example, lessors apply the new definition of
+a lease, sale-and-leaseback guidance, sub-lease guidance and disclosure requirements.
+Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between an investor and
+its associate or joint venture
+The amendments introduce new requirements on loss of control over assets in a transaction with an associate or joint
+venture. These requirements require the full gain to be recognised when the assets transferred meet the definition of a
+"business" under IFRS 3, Business combination.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+6. NET INTEREST INCOME
+Interest income on:
+2016
+The Group is currently assessing the impact of the standard on its financial position and performance.
+2015
+164
+All companies that issue insurance contracts may choose to recognise in other comprehensive income, rather than
+profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is
+issued.
+The IASB has amended the requirements in IAS 40 Investment property to clarify that a property asset is transferred to, or
+from, investment property when and only when there is an actual change in use. A change in management intention alone
+does not support a transfer.
+A company has a choice on transition to apply:
+The prospective approach, and also reassess the classification of property assets held at the date of initial application;
+or
+The retrospective approach, but only if it does not involve the use of hindsight.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Annual Improvements to IFRSS 2014-2016 Cycle
+The Group is currently assessing the impact of the annual improvements on its financial position and performance.
+Amendments to IFRS 4, Insurance contracts "Applying IFRS 9 Financial instruments with IFRS
+4 Insurance contracts"
+The amendments address concerns arising from the different effective dates of IFRS 9 and the forthcoming insurance
+contracts standard. The amendments introduce the following two approaches:
+Deferral approach - Temporary exemption from IFRS 9
+Companies whose activities are predominantly connected with insurance may choose to defer the application of IFRS 9
+until 2021.
+Overlay approach
+The 2014-2016 cycle of annual improvements contains amendments to three standards including IFRS 1 First-time adoption
+of International Financial Reporting Standards, IFRS 12 Disclosure of interests in other entities and IAS 28 Investments in
+associates and joint ventures.
+Loans and advances to customers (i)
+Notes to the Financial Statements
+(363,912)
+36,538
+791,480
+871,779
+Interest expense on:
+Due to banks and other financial institutions
+Debt securities issued
+31,285
+(257,850)
+(44,314)
+(49,801)
+(17,470)
+(16,101)
+(319,634)
+- Corporate loans and advances
+(298,010)
+Due from banks and other financial institutions
+Due to customers
+Discounted bills
+Personal loans
+47,867
+538,219
+616,541
+355,313
+160,106
+174,503
+421,877
+20,161
+Financial investments (ii)
+177,298
+170,833
+Due from central banks
+44,678
+22,800
+9,920
+271,272
+274,993
+3,250
+206,974
+615
+563
+205,509
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+210,434
+272,118
+206,282
+24. DERIVATIVE FINANCIAL INSTRUMENTS
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+210
+285,144
+231
+6,300
+231
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+markets participates at measured date.
+25,706
+6,300
+218,565
+181,910
+205,811
+177,973
+285,144
+210,434
+272,118
+206,282
+Analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+210
+Annual Report 2016
+125
+Notes to the Financial Statements
+Exchange rate contracts:
+Forward and swap contracts
+1,577,351
+1,433,229
+115,797
+4,383
+3,130,760
+56,972
+(58,600)
+Option contracts purchased
+33,722
+69,728
+3,444
+107,019
+25,706
+Liabilities
+177
+Assets
+five years
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which meet
+the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2016, derivative assets
+and derivative liabilities which meet the criteria for offsetting were RMB49,379 million and RMB51,628 million respectively,
+and the net derivative assets and net derivative liabilities were RMB30,074 million and RMB32,323 million respectively.
+At the end of the reporting period, the Group and the Bank had derivative financial instruments as follows:
+Group
+2016
+Notional amounts with remaining life of
+Over three
+Fair values
+Within
+three
+months
+months
+but within
+Over
+one year
+but within
+Over
+one year
+five years
+Total
+Banks and other financial institutions
+Others
+2015
+RMB'000
+2015
+22,009
+362
+(3)
+82
+79
+326
+115
+33
+441
+Group
+Bank
+2016
+2015
+2016
+Debt securities
+22. FINANCIAL ASSETS HELD FOR TRADING
+329
+105
+7
+1,306
+At 31 December 2015 and 1 January 2016
+(Reversal)/charge for the year
+At 31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Due from
+Placements with
+banks and other
+financial institutions
+banks and other
+financial institutions
+Total
+231
+26
+257
+98
+183,315
+132,465
+135,774
+2015
+115,950
+133,957
+115,950
+183,315
+132,465
+135,774
+115,950
+23. FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Group
+Bank
+2016
+2015
+Debt securities
+40,873
+22,224
+2016
+40,601
+116,930
+Other debt instruments:
+174,469
+14,848
+Equity investments
+6,016
+373
+48,300
+189,331
+132,838
+184,074
+115,950
+Debt securities analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+1,248
+687
+7,598
+387
+1,430
+Option contracts written
+(76,826)
+45,126
+1,302,262
+1,428,182
+140,121
+4,290
+2,874,855
+36,607
+(1,203)
+(38,925)
+Swap contracts
+209,289
+373,438
+647,015
+161,450
+Forward contracts
+Interest rate contracts:
+(37,722)
+35,533
+1,074
+106,099
+104,389
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+1,211,545
+1,309,472
+139,060
+4,290
+2,664,367
+Option contracts purchased
+Option contracts written
+39,851
+50,866
+65,470
+778
+53,240
+283
+69,289
+193,918
+322,529
+1,391,192
+585,736
+7,383
+984,986
+44,352
+1,169,459
+16
+12,785
+(46)
+161,466
+1,460
+167,216
+2,003,186
+26,989
+(28,236)
+1,003,663
+5,881,704
+15,274
+(9,665)
+78,870
+Charge for the year
+178
+ICBC
+2,262,389
+Assets
+2,282,640
+691,028
+26,769
+(28,079)
+119
+(111)
+Option contracts purchased
+5,386
+28
+8,059
+13,473
+101
+Option contracts written
+5,386
+289,350
+567,384
+Commodity derivatives and others
+266,823
+37,213
+Total
+five years
+Forward contracts
+116,445
+138,559
+161,887
+416,891
+44
+(20,196)
+(212)
+1,390
+1,157
+6,626
+167
+9,340
+109
+Option contracts purchased
+20,456
+1,338,950
+180,059
+3,061
+85,400
+(1,617)
+1,648,286
+1,548,083
+122,302
+4,508
+3,323,179
+58,278
+(60,217)
+Interest rate contracts:
+Swap contracts
+195,268
+279,975
+683,648
+Option contracts written
+1,390
+1,046
+12,216
+(9,273)
+94,452
+(89,960)
+2015
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+months
+but within
+but within
+one year
+15,565
+Over
+five years
+959,290
+6,062,319
+50,171
+1,036,850
+17
+14,669
+(62)
+314,493
+420,737
+864,377
+180,243
+1,779,850
+20,609
+(20,470)
+Commodity derivatives and others
+632,245
+273,591
+2,595,024
+2,242,411
+3,283
+188,034
+Salaries and allowances
+At 1 January 2015
+445
+Actual
+amount of
+remuneration
+Fees
+RMB'000
+paid
+bonuses
+allowance, etc.
+before tax
+deferred
+payment
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+paid (pre-tax)
+(1)
+Of which:
+plans, housing
+On 23 June 2016, Ms. Wang Chixi resigned from the position of Shareholder Representative Supervisor of the Bank
+citing her age.
+(xiv) On 24 June 2016, Ms. Dong Juan ceased to act as External Supervisor of the Bank due to expiration of the term of
+office.
+Annual Report 2016
+169
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Total
+emoluments
+Name
+Year ended 31 December 2015
+Contribution by
+the employer
+to social
+insurance
+and welfare
+Remuneration
+Discretionary
+Position
+(2)
+(3)
+(4)
+Executive Director, Vice President
+277
+376
+16
+208
+861
+WANG Xiquan(iii)
+861
+313
+175
+719
+719
+249
+338
+231
+ZHANG Hongli(ii)
+QIAN Wenhui(i)
+Executive Director, Vice President
+(5)=(1)+(2)+(3)+(4)
+(6)
+(7)=(5)-(6)
+277
+376
+208
+861
+861
+JIANG Jianqing
+YI Huiman
+Chairman of the Board of Directors,
+Executive Director
+Vice Chairman of the Board of Directors,
+Executive Director, President
+Chairman of the Board of Supervisors
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun as
+Independent Non-executive Director due to work reasons, which became effective upon approval by CBRC of the
+qualification of the new Independent Non-executive Director in April 2016.
+In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent Non-
+executive Director of the Bank.
+In October 2016, due to expiration of the term of office, Sir Malcolm Christopher McCarthy ceased to act as
+Independent Non-executive Director of the Bank.
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank.
+5
+1
+15
+1
+1
+1
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2015: Nil).
+1
+1
+1
+1
+1
+RMB12,000,001 Yuan to RMB12,500,000 Yuan
+RMB12,500,001 Yuan to RMB13,000,000 Yuan
+RMB13,000,001 Yuan to RMB13,500,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB15,000,001 Yuan to RMB15,500,000 Yuan
+RMB17,000,001 Yuan to RMB17,500,000 Yuan
+RMB19,500,001 Yuan to RMB20,000,000 Yuan
+RMB21,500,001 Yuan to RMB22,000,000 Yuan
+2015
+1
+172
+ICBC
+Notes to the Financial Statements
+27(d)
+27(c)(i),(d)
+Other
+Available-for-sale financial assets
+Held-to-maturity investments
+Financial investments:
+111
+77
+21
+Due from banks and other financial institutions
+Charge/(reversal) of impairment losses on:
+2015
+2016
+Notes
+15. IMPAIRMENT LOSSES ON ASSETS OTHER THAN LOANS AND ADVANCES TO
+CUSTOMERS
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Number of employees
+2016
+178
+The number of these individuals whose emoluments fell within the following bands is set out below.
+74,832
+(vi)
+(vii)
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Mr. Gu Shu and Mr. Wang Jingdong
+were appointed as Executive Directors of the Bank. The qualifications of Mr. Gu Shu and Mr. Wang Jingdong were
+approved by CBRC in December 2016.
+At the Second Extraordinary General Meeting of 2015 held on 21 December 2015, Mr. Yang Siu Shun was appointed
+as Independent Non-executive Director of the Bank, and his qualification was approved by CBRC in April 2016.
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Ms. Sheila Colleen Bair was appointed
+as Independent Non-executive Director of the Bank, and her qualification was approved by CBRC in March 2017.
+The Bank appointed Mr. Zhang Wei and Mr. Shen Bingxi as Shareholder Representative Supervisor and External
+Supervisor of the Bank respectively at the 2015 Annual General Meeting on 24 June 2016, and their terms of office
+took effect from the date of review and approval by the meeting. On 23 June 2016, Mr. Zhang Wei ceased to act as
+Employee Representative Supervisor of the Bank due to change of job.
+(v)
+On 23 June 2016, the Bank appointed Mr. Huang Li as Employee Representative Supervisor of the Bank at the Interim
+Employees' Congress, and his term of office took effect from the date of review and approval by the Employees'
+Congress.
+(viii) In July 2016, Mr. Wang Xiquan resigned from the position of Executive Director of the Bank due to change of job.
+(ix)
+(x)
+(xi)
+(xii)
+(xiii)
+In May 2016, Mr. Jiang Jianqing resigned from the positions of Chairman of the Board of Directors and Executive
+Director citing his age.
+(iv)
+(iii)
+(ii)
+2,789
+441
+2,458
+394
+937
+61,608
+58,592
+13,770
+14,862
+Others
+Compensation for terminating contract
+Contributions to defined contribution plans
+Discretionary bonuses
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+81,019
+6
+765
+249
+38
+38
+3,102
+1,888
+2,816
+1,345
+38
+9,151
+8,795
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+The remuneration before tax payable to Directors and Supervisors for 2015 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2015 Annual
+Report.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+Fees of Employee Representative Supervisors Mr. Zhang Wei, Mr. Hui Ping, and Mr. Li Mingtian are their allowances obtained
+as Employee Representative Supervisors of the Bank, excluding their remuneration with the Bank in accordance with the
+employee remuneration system.
+(i)
+356
+The Bank appointed Mr. Qian Wenhui as Shareholder Representative Supervisor of the Bank at the 2014 Annual
+General Meeting on 19 June 2015, and his term of office took effect from the date of review and approval by the
+meeting. The Bank appointed Mr. Qian Wenhui as Chairman of the Board of Supervisors of the Bank at a meeting of
+the Board of Supervisors.
+Former Employee Representative Supervisor
+272
+Former Independent Non-executive Director
+118
+118
+118
+ZHAO Lin(xi)
+MENG Yan(xii)
+LI Mingtian (xiii)
+Former Chairman of the Board of Supervisors
+Former External Supervisor
+188
+102
+428
+428
+272
+272
+138
+170
+ICBC
+Notes to the Financial Statements
+On 21 December 2015, Mr. Meng Yan ceased to act as External Supervisor of the Bank due to expiration of the term of
+office.
+(xiii) On 23 July 2015, the term of office of Employee Representative Supervisor Mr. Li Mingtian expired, and he continued
+to perform the Supervisor's responsibilities up to 25 September 2015 according to the Articles of Association of the
+Bank.
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+During the year, there was no arrangement under which a Director or a Supervisor waived or agreed to waive any
+remuneration (2015: Nil).
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2015: Nil).
+Annual Report 2016
+On 19 June 2015, Mr. Zhao Lin resigned from the posts of Supervisor and Chairman of the Board of Supervisors due to
+his age.
+171
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+14. FIVE HIGHEST PAID INDIVIDUALS
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 13 and 52(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+Group
+2016
+RMB'000
+Notes to the Financial Statements
+In March 2015, due to expiration of the term of office, Mr. Li Jun ceased to act as Non-executive Director of the Bank.
+In April 2015, due to expiration of the term of office, Mr. Wong Kwong Shing, Frank ceased to act as Independent
+Non-executive Director of the Bank.
+(xii)
+(xi)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(ii)
+(iii)
+(iv)
+(v)
+(vi)
+(vii)
+At the First Extraordinary General Meeting of 2014 held on 15 April 2014, Mr. Zhang Hongli was appointed as
+Executive Director of the Bank, and his qualification has been approved by CBRC in June 2015.
+At the Annual General Meeting for the Year of 2014 held on 19 June 2015, Mr. Wang Xiquan was appointed as
+Executive Director of the Bank, and his qualification has been approved by CBRC in June 2015.
+At the First Extraordinary General Meeting of 2015 held on 23 January 2015, Mr. Zheng Fuqing was appointed as Non-
+executive Director of the Bank and his qualification was approved by CBRC in February 2015. Mr. Fei Zhoulin and Mr.
+Cheng Fengchao were appointed as Non-executive Directors of the Bank, and their qualifications were approved by
+CBRC in March 2015.
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun from
+Independent Non-executive Director due to work reasons, which will become effective upon approval of new
+independent non-executive director's qualification by CBRC.
+At the First Extraordinary General Meeting of 2015 held on 23 January 2015, Mr. Anthony Francis Neoh was appointed
+as Independent Non-executive Director of the Bank, and his qualification has been approved by CBRC in April 2015.
+On 21 December 2015, the Bank appointed Mr. Qu Qiang as External Supervisor of the Bank at the Second
+Extraordinary General Meeting of 2015, and his term of office took effect from the date of review and approval by the
+meeting.
+(viii) On 25 September 2015, the Bank appointed Mr. Hui Ping as Employee Representative Supervisor of the Bank at the
+Interim Employees' Congress, and his term of office took effect from the date of review and approval by the Employees'
+Congress.
+(ix)
+(x)
+WONG Kwong Shing, Frank(x)
+Former Non-executive Director
+LI Jun(ix)
+13
+430
+Kenneth Patrick CHUNG
+Independent Non-executive Director
+440
+440
+Or Ching Fai
+430
+Independent Non-executive Director
+470
+HONG Yongmiao
+Independent Non-executive Director
+470
+470
+YI Xiqun(v)
+470
+Independent Non-executive Director
+M-C-McCarthy
+Non-executive Director
+338
+178
+765
+765
+WANG Xiaoya
+GE Rongrong
+Non-executive Director
+Non-executive Director
+FU Zhongjun
+Non-executive Director
+ZHENG Fuqing(iv)
+Non-executive Director
+FEI Zhoulin(iv)
+Non-executive Director
+CHENG Fengchao(iv)
+Independent Non-executive Director
+765
+463
+Anthony Francis Neoh (vi)
+ZHANG Wei
+HUI Ping(viii)
+External Supervisor
+External Supervisor
+8
+Employee Representative Supervisor
+DONG Juan
+QU Qiang(vii)
+50
+13
+8
+50
+13
+8
+50
+Employee Representative Supervisor
+1,294
+356
+1,650
+Independent Non-executive Director
+330
+330
+༄༄ཤྩ ༔,་་་་ཚུུརྦྷཡཿབྷུཥྞ
+430
+440
+470
+470
+463
+330
+WANG Chixi
+Shareholder Representative Supervisor
+467
+887
+296
+463
+Bank
+(25)
+(4)
+2016
+2015
+2016
+Bank
+Group
+21. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+2015
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+175
+Annual Report 2016
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks
+and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits
+mainly consist of deposits placed with the PBOC. As at 31 December 2016, the mandatory deposit reserve ratios of
+the domestic branches of the Bank in respect of customer deposits denominated in RMB and foreign currencies were
+consistent with the requirement of the PBOC. The amounts of mandatory reserve deposits placed with the central
+banks of those countries or regions outside Mainland China are determined by local jurisdictions.
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+(ii)
+Financial Statements for the year ended 31 December 2016
+Due from banks and other financial
+institutions:
+Banks operating in Mainland China
+86,828
+45,502
+88,702
+45,430
+Banks and other financial institutions
+operating outside Mainland China
+1,358
+944
+1,441
+1,071
+Mainland China
+Other financial institutions operating in
+102,413
+194,364
+121,745
+223,884
+(i)
+270,385
+2,991,619
+3,059,633
+Fiscal deposits with the PBOC
+2,782,756
+2,539,660
+2,793,933
+Mandatory reserves with the PBOC (ii)
+Restricted balances with central banks:
+238,604
+64,915
+147,058
+180,069
+197,678
+91,346
+91,897
+105,981
+overseas countries or regions
+174,968
+291,537
+238,604
+2,535,503
+291,537
+3,350,788
+2,844,561
+3,115,302
+2,879,564
+3,153,110
+6,467
+16,372
+37,313
+43,003
+overseas countries or regions (ii)
+11,054
+77,570
+11,054
+77,570
+Other restricted balances with the PBOC (ii)
+Mandatory reserves with central banks of
+3,290,270
+Unrestricted balances with central banks of
+211,888
+190,599
+176
+At 31 December 2016
+At 31 December 2015 and 1 January 2016
+(Reversal)/charge for the year
+Charge for the year
+At 1 January 2015
+Group
+ICBC
+As at 31 December 2016, the amount of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group is RMB94,914 million (31 December 2015: RMB123,397 million). During the
+year of 2016, the maximum exposure of the placements from the Group with non-principal guaranteed wealth management
+products sponsored by the Group is RMB163,062 million (2015: RMB199,316 million). The transactions were conducted in
+the ordinary course of business under normal terms and conditions and at market rates.
+Movements of the allowance for impairment losses during the year are as follows:
+927,705
+683,793
+797,473
+582,298
+687,221
+472,234
+772,568
+Due from
+banks and other
+financial institutions
+Placements with
+banks and other
+financial institutions
+118
+327
+77
+79
+(2)
+368
+39
+329
+111
+13
+98
+257
+26
+231
+Total
+527,415
+240,810
+(33)
+(39)
+55,375
+105,798
+Banks operating in Mainland China
+institutions:
+Placements with banks and other financial
+190,270
+102,844
+240,484
+270,058
+(329)
+(326)
+(329)
+(327)
+Less: Allowance for impairment losses
+211,559
+46,270
+Other financial institutions operating in
+Mainland China
+(118)
+Less: Allowance for impairment losses
+582,331
+687,336
+472,273
+527,533
+228,299
+266,373
+132,563
+119,959
+Banks and other financial institutions
+operating outside Mainland China
+307,762
+318,119
+284,335
+301,776
+(115)
+581
+81,631
+512
+2,946
+(1,232)
+(3,052)
+Adjustment in respect of income tax of prior years
+(582)
+(651)
+Profits attributable to associates and joint ventures
+Others
+(10,256)
+Non-taxable income (ii)
+5,774
+10,513
+(511)
+(773)
+Effects of different applicable rates of tax prevailing in other countries/regions
+Non-deductible expenses (i)
+(15,783)
+90,809
+3,099
+Income tax expense
+18. DIVIDENDS
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2016 includes
+a profit of RMB261,218 million (2015: RMB262,322 million) which has been dealt with in the financial statements of the
+Bank (Note 42).
+17. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+1,513
+173
+The non-taxable income mainly represents interest income arising from the PRC government bonds, which is exempted
+from income tax.
+(ii)
+The non-deductible expenses mainly represent non-deductible impairment provision and write-offs.
+(i)
+85,515
+84,173
+Annual Report 2016
+90,820
+Tax at the PRC statutory income tax rate
+2015
+363,235
+2015
+2016
+Deferred income tax expense
+Adjustments in respect of income tax of prior years
+Overseas
+Hong Kong and Macau
+80,794
+Mainland China
+(a) Income tax
+16. INCOME TAX EXPENSE
+971
+1,756
+889
+1,092
+Current income tax expense:
+86,541
+1,952
+1,837
+363,279
+Profit before taxation
+2016
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+(b) Reconciliation between income tax and accounting profit
+85,515
+84,173
+(3,869)
+1,479
+(1,232)
+(3,052)
+90,616
+85,746
+2,238
+3,000
+2016
+80,548
+3,074
+2015
+Final ordinary shares dividends for 2015: RMBO.2333 per share
+(2014: RMBO.2554 per share)
+174
+0.77
+0.77
+356,027
+356,407
+Weighted average number of ordinary shares outstanding (in million shares)
+Diluted earnings per share (RMB yuan)
+ICBC
+274,813
+Profit used to determine diluted earnings per share
+13
+274,800
+273,799
+(2,331)
+(4,450)
+273,799
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+7,125
+Surplus reserves with the PBOC (i)
+85,226
+84,572
+Cash on hand
+central banks:
+Cash and unrestricted balances with
+2015
+2016
+2015
+2016
+Bank
+Group
+20. CASH AND BALANCES WITH CENTRAL BANKS
+Diluted earnings per share was computed from dividing the profit attributable to ordinary equity holders of the parent
+company (after adjusting for interest expense on the convertible bonds) by the weighted average number of ordinary shares
+outstanding. As of the end of the financial reporting period, the balance of outstanding convertible bonds of the Bank is nil.
+277,131
+Dividends on ordinary shares declared and paid:
+278,249
+2015
+The calculation of basic earnings per share is based on the following:
+19. EARNINGS PER SHARE
+83,150
+83,506
+Final ordinary shares dividends for 2016: RMBO.2343 per share
+(2015: RMB0.2333 per share)
+(not recognised as at 31 December):
+2016
+Dividends on ordinary shares proposed for approval
+2016
+2,331
+4,450
+Dividends on preference shares declared and paid: Dividends
+91,026
+83,150
+2015
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity holders of the parent company
+Profit for the year attributable to ordinary equity holders of the parent company
+Add: Interest expense on convertible bonds (net of tax)
+2015
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity holders of the parent company
+Profit for the year attributable to ordinary equity holders of the parent company
+Shares:
+2016
+Earnings:
+The calculation of diluted earnings per ordinary share is based on the following:
+Basic earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the parent
+company divided by the weighted average number of ordinary shares in issue.
+0.77
+356,027
+Earnings:
+0.77
+Weighted average number of ordinary shares in issue (in million shares)
+Basic earnings per share (RMB yuan)
+274,800
+273,799
+(2,331)
+(4,450)
+277,131
+278,249
+356,407
+Shares:
+188
+ICBC
+Notes to the Financial Statements
+73,050
+Impairment loss:
+280,654
+93,167
+187,487
+At 31 December 2015 and 1 January 2016
+13,088
+1,089
+721
+Recoveries of loans and advances previously written off
+(60,296)
+(9,931)
+(50,365)
+Write-offs
+368
+414
+86,138
+192,057
+(8,145)
+773
+1,226
+Recoveries of loans and advances previously written off
+(65,999)
+Write-offs
+(5,135)
+- impairment allowances charged
+(5,135)
+(176,431)
+(57,424)
+(119,007)
+reversal of impairment allowances
+262,569
+70,512
+Accreted interest on impaired loans (note 6)
+(74,144)
+42
+Acquisition of subsidiaries
+At 1 January 2015
+Total
+Personal loans
+loans and
+advances and
+discounted bills
+Corporate
+Group
+Impairment loss:
+Movements of allowance for impairment losses during the year analysed into those attributable to corporate loans and
+advances and discounted bills and personal loans are as follows:
+218,152
+1,928
+706
+1,222
+61,458
+(5,111)
+(73,734)
+(8,035)
+279,610
+372
+- impairment allowances charged
+177,163
+(4,156)
+(4,156)
+Accreted interest on impaired loans (note 6)
+(140,118)
+(32,299)
+(107,819)
+reversal of impairment allowances
+226,140
+171,571
+86,022
+22,270
+63,752
+257,581
+80,418
+54,569
+1,999
+At 31 December 2016
+190,629
+reversal of impairment allowances
+259,554
+70,133
+189,421
+― impairment allowances charged
+83,971
+(118,285)
+12,835
+Impairment loss:
+272,556
+92,368
+180,188
+At 31 December 2015 and 1 January 2016
+1,080
+71,136
+359
+(57,298)
+Accreted interest on impaired loans
+Group
+279,610
+97,874
+181,736
+At 31 December 2016
+1,928
+(175,583)
+(73,734)
+1,222
+Recoveries of loans and advances previously written off
+(65,699)
+Write-offs
+(5,111)
+(5,111)
+(8,035)
+706
+721
+Recoveries of loans and advances previously written off
+(60,028)
+- impairment allowances charged
+Impairment loss:
+At 1 January 2015
+Total
+Personal loans
+loans and
+advances and
+discounted bills
+171,439
+Corporate
+Notes to the Financial Statements
+Bank
+ICBC
+184
+289,512
+98,883
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+79,723
+251,162
+62,333
+(9,867)
+(50,161)
+Write-offs
+(4,144)
+(4,144)
+Accreted interest on impaired loans
+(139,423)
+(32,269)
+(107,154)
+- reversal of impairment allowances
+223,909
+54,422
+169,487
+84,486
+22,153
+(5,111)
+(65,699)
+Bank
+At 31 December 2016
+Write-offs
+(140,118)
+(902)
+(111,066)
+902
+(29,052)
+(4,156)
+326
+Write-offs
+Acquisition of subsidiaries
+226,140
+(4,156)
+134,262
+86,022
+22,294
+63,728
+257,581
+216,336
+41,245
+91,878
+Accreted interest on impaired loans (note 6)
+88
+(50,365)
+reversal of impairment allowances
+86,138
+2,172
+83,966
+― impairment allowances charged
+-impairment allowances transferred
+Impairment loss:
+414
+280,654
+51,499
+At 31 December 2015 and 1 January 2016
+(60,296)
+1,089
+(9,931)
+368
+721
+Recoveries of loans and advances previously written off
+229,155
+110,992
+865
+(27,891)
+reversal of impairment allowances
+Impairment loss:
+12,312,810
+11,933,466
+13,056,846
+511,707
+708,339
+522,052
+11,299,032
+719,993
+7,315,786
+7,496,031
+4,108,440
+7,869,552
+3,541,862
+4,196,169
+8,140,684
+Discounted bills
+3,471,539
+- impairment allowances charged
+-impairment allowances transferred
+Less: Allowance for impairment losses
+(280,654)
+At 1 January 2015
+Total
+assessed
+assessed
+Collectively
+Individually
+(289,512)
+Group
+11,026,476
+12,033,200
+11,652,812
+12,767,334
+(272,556)
+(279,610)
+Movements of allowance for impairment losses during the year are as follows:
+151,577
+262,569
+(865)
+(148,540)
+(4,144)
+(60,028)
+(9,867)
+359
+721
+Recoveries of loans and advances previously written off
+(50,161)
+Write-offs
+1,080
+(4,144)
+(139,423)
+(110,879)
+(28,544)
+(890)
+890
+223,909
+Accreted interest on impaired loans
+133,877
+At 31 December 2015 and 1 January 2016
+224,682
+(175,583)
+(861)
+(147,943)
+(27,640)
+861
+83,971
+259,554
+149,603
+47,874
+109,951
+reversal of impairment allowances
+― impairment allowances charged
+-impairment allowances transferred
+799
+83,172
+Impairment loss:
+272,556
+Accreted interest on impaired loans
+90,032
+84,486
+22,108
+223,955
+65,557
+At 31 December 2016
+773
+1,226
+Recoveries of loans and advances previously written off
+1,999
+289,512
+(74,144)
+(65,999)
+Write-offs
+(5,135)
+(5,135)
+Accreted interest on impaired loans (note 6)
+(176,431)
+(8,145)
+Annual Report 2016
+183
+Notes to the Financial Statements
+62,378
+251,162
+212,082
+39,080
+reversal of impairment allowances
+― impairment allowances charged
+-impairment allowances transferred
+Impairment loss:
+At 1 January 2015
+Total
+assessed
+assessed
+Collectively
+Individually
+Bank
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Recoveries of loans and advances previously written off
+Personal loans
+2016
+2016
+2015
+2016
+Bank
+Group
+Available-for-sale financial assets comprise the following:
+(c) Available-for-sale financial assets
+2016
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+187
+Annual Report 2016
+For the year ended 31 December 2016, the total carrying amount of held-to-maturity investments the Group disposed prior
+to their maturity with remaining maturity more than three months was RMB19,446 million (31 December 2015: RMB14,019
+million), which accounted for 0.65% (31 December 2015: 0.49%) of the total amount of the Group's held-to-maturity
+investments.
+14,868
+Market value of listed debt securities
+61,790
+Notes to the Financial Statements
+2,813,091
+2015
+1,720,630
+1,401
+At cost (ii)
+1,433
+75,874
+13,091
+11,452
+Debt securities, at fair value (i)
+At fair value (i)
+27,593
+8,804
+Other debt instruments, at fair value
+1,296,903
+1,532,327
+1,402,673
+Equity investments:
+838
+2,876,081
+2,973,042
+111,326
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Analysed into:
+2,813,091
+2,876,081
+Group
+2,870,353
+(27)
+2,813,118
+2,876,120
+(39)
+2,870,448
+(95)
+(107)
+Less: Allowance for impairment losses
+2,973,042
+2,870,353
+57,116
+Bank
+2015
+2,798,223
+2,814,291
+2,813,237
+2,861,716
+11,038
+55,102
+2016
+35,798
+3,830
+6,688
+21,318
+24,732
+2015
+2016
+86,594
+638
+732
+Debt for equity swaps
+13,929
+12,853
+75,750
+6,691
+9,725
+762
+76,512
+6,730
+508
+677
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Equity investments analysed into:
+2,451
+1,296,903
+1,433
+732
+2,165
+Debt securities
+Bank
+Certain available-for-sale unlisted equity investments which do not have any quoted market prices and whose fair
+values cannot be measured reliably are stated at cost less any impairment losses. There is no active market for these
+investments and it is the Group's intention to dispose of them as opportunities arise. During the year, the Group did
+not dispose of these equity investments (2015: RMB Nil).
+When impairment of an available-for-sale investment measured at fair value occurs, any impairment loss recognised is
+recorded in the carrying amount directly. As at 31 December 2016, the available-for-sale financial assets measured at
+fair value include impaired debt securities whose carrying amount was RMB70 million (31 December 2015: RMB141
+million), and impaired equity investments whose carrying amount was RMB65 million (31 December 2015: RMB264
+million), with the accrual of impairment loss recognised in profit or loss for the year of RMB419 million (2015:
+reversal of impairment loss of RMB37 million) on available-for-sale debt securities; and the accrual of impairment
+loss recognised in profit or loss for the year of RMB162 million (2015: RMB33 million) on available-for-sale equity
+investments.
+(ii)
+(i)
+140,098
+Market value of listed securities:
+1,433
+138,665
+124,884
+213,542
+7,238
+220,780
+3,128
+235,477
+Equity investments
+232,349
+762
+125,646
+1,532,327
+1,402,673
+1,720,630
+(606)
+(606)
+(673)
+(678)
+Less: Allowance for impairment losses of
+equity investments, at cost
+277
+1,742,287
+277
+1,106
+Others
+1,061
+967
+1,063
+973
+448
+1,444,195
+1,608,839
+1,299,068
+116,895
+1,158,238
+1,407,443
+1,189,131
+1,488,281
+97,517
+169,180
+169,339
+21,770
+27,367
+44,362
+63,010
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Debt securities analysed into:
+2,973,149
+2015
+Debt securities
+2016
+Notes to the Financial Statements
+185
+Annual Report 2016
+1.54%
+1.67%
+173,857
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+205,133
+211,801
+1.62%
+Percentage of impaired loans and advances
+Identified impaired loans and advances
+11,026,476
+82,501
+10,943,975
+92,727
+11,940,473
+12,033,200
+179,518
+1.50%
+11,652,812
+27. FINANCIAL INVESTMENTS
+Bank
+2,813,091
+2,876,081
+2,870,353
+2,973,042
+Held-to-maturity investments
+338,839
+Group
+263,456
+291,370
+Receivables
+2015
+2016
+2015
+2016
+352,143
+Available-for-sale financial assets
+12,767,334
+12,672,422
+Individually assessed
+Less: Allowance for impairment losses:
+11,299,032
+130,375
+11,168,657
+154,185
+12,158,625
+12,312,810
+135,780
+11,797,686
+11,933,466
+(65,557)
+13,056,846
+Collectively assessed
+160,469
+Individually assessed
+impairment losses are:
+Loans and advances for which allowance for
+2015
+12,896,377
+84,281
+11,568,531
+(51,499)
+(47,874)
+Collectively assessed
+94,912
+Individually assessed
+allowance for impairment losses are:
+Net loans and advances for which
+(272,556)
+(61,458)
+(279,610)
+(289,512)
+(224,682)
+(218,152)
+(229,155)
+(223,955)
+Collectively assessed
+(280,654)
+(c)
+1,742,287
+1,444,195
+291,370
+283,939
+232,174
+297,243
+257,589
+54,900
+352,143
+31,282
+33,781
+2015
+2016
+2015
+2016
+Bank
+54,900
+Group
+263,456
+(i)
+2015
+2016
+Bank
+Group
+Held-to-maturity investments are stated at amortised cost and comprise the following:
+(b) Held-to-maturity investments
+338,839
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+ICBC
+186
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the MOF to the Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+Others include financial and corporate bonds, debt investment plans, asset backed securities, asset management plans
+and wealth management products with fixed or determined payments. They will mature from January 2017 to July
+2027 and bear interest rates ranging from 3.00% to 9.50% per annum. During the reporting period, the amounts
+which have been matured have been repaid without overdue history.
+The Huarong bonds are a series of long term bonds issued China Huarong Asset Management Co., Ltd ("Huarong")
+in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the
+issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are non-negotiable, with a
+tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank received a notice from the
+Ministry of Finance of the People's Republic of China (the "MOF") that the maturity dates of the Huarong bonds were
+extended for another ten years and the interest rate remains unchanged. Additionally, the MOF will continue providing
+funding in support of the repayment of the principal and interest of the bonds. As at 31 December 2016, the Bank
+received early repayments amounting to RMB218,747 million accumulated.
+(iii)
+(ii)
+Notes to the Financial Statements
+Listed outside Hong Kong
+Unlisted
+Analysed into:
+338,839
+2015
+2016
+2015
+2016
+Bank
+Group
+Huarong bonds
+The receivables are stated at amortised cost and comprise the following:
+4,450,998
+4,748,376
+4,666,691
+5,006,699
+1,299,068
+1,608,839
+(a) Receivables
+94,249
+108,187
+94,249
+263,456
+352,143
+291,370
+145,652
+84,207
+158,956
+112,121
+(iii)
+Others
+85,000
+85,000
+85,000
+85,000
+Special government bond
+108,187
+2015
+Corporate loans and advances
+2016
+2016
+35,304
+211
+Currency swap contracts
+(20)
+245
+15,736
+748
+2,108
+4,213
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+five years
+9,415
+five years
+36,263
+(2,257)
+10,207
+39,574
+275
+(5)
+14
+161
+10
+44
+64
+Equity derivative
+2
+4
+4
+Currency forward contracts
+53
+2,108
+one year
+Over
+179
+Annual Report 2016
+(33,144)
+33,290
+21,123
+174,649
+Notes to the Financial Statements
+1,357,589
+(1,002)
+3,711
+93,620
+299
+439
+54,475
+1,079,702
+months
+Financial Statements for the year ended 31 December 2016
+Cash flow hedges
+but within
+but within
+three
+one year
+months
+Within
+(In RMB millions, unless otherwise stated)
+Over
+Fair values
+Notional amounts with remaining life of
+2016
+Group
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out
+below.
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, currency forward contracts
+and equity derivatives that are used to protect against exposures to variability of future cash flows.
+Over three
+52,164
+271
+(2,282)
+2016
+Currency forward
+Currency swap contracts
+Interest rate swap contracts
+Bank
+(122)
+Notional amounts with remaining life of
+221
+2,192
+11,300
+1,605
+2,689
+(60)
+265
+17,786
+104
+Fair values
+Over
+202
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+Over three
+one year
+549
+but within
+but within
+three
+one year
+months
+Within
+months
+84
+77
+Equity derivative
+one year
+months
+Over
+but within
+but within
+three
+five years
+one year
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2015
+months
+five years
+Total
+Assets
+(30)
+20
+4,155
+790
+(32)
+201
+13,366
+2,192
+10,406
+503
+1,018
+2,347
+Currency swap contracts
+265
+Interest rate swap contracts
+Liabilities
+38,407
+232
+Commodity derivatives and others
+1,676
+Interest rate contracts:
+(55,076)
+53,335
+3,163,645
+3,743
+71,400
+Swap contracts
+1,486,088
+(1,205)
+63,356
+1,976
+38,146
+23,234
+Option contracts written
+1,602,414
+918
+87,480
+119,323
+75,301
+Commodity derivatives and others
+(1,396)
+1,479
+338,233
+21,294
+110,136
+119,323
+87,480
+Forward contracts
+(1,396)
+1,479
+338,233
+21,294
+110,136
+110,358
+84,761
+61,999
+Over
+but within
+but within
+three
+one year
+months
+months
+Within
+Over three
+Fair values
+Notional amounts with remaining life of
+2016
+2015
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Over
+2,069
+one year
+five years
+20,693
+Option contracts purchased
+(53,871)
+52,417
+3,015,528
+3,743
+five years
+67,355
+1,558,487
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+1,385,943
+33
+185,692
+8,078
+27,903
+2,233,563
+2,470
+78,484
+1,165,921
+986,688
+(30,282)
+(623)
+238
+29,184
+22,495
+Option contracts written
+(29,659)
+27,457
+446
+51,917
+55,898
+Interest rate contracts:
+Forward contracts
+305,880
+18,354
+95,726
+137,193
+54,607
+2,286
+Swap contracts
+2,286
+1,676
+303,594
+18,354
+95,726
+134,907
+54,607
+(1,860)
+26
+42,911
+12,961
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2015
+months
+(58,179)
+3,687,570
+25,037
+190,756
+1,706,582
+1,765,195
+(1,707)
+62,892
+one year
+three
+months
+but within
+Option contracts purchased
+2,125,748
+2,470
+78,220
+1,093,826
+951,232
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+one year
+but within
+(1,860)
+983
+2,633,063
+34,670
+17,616
+24,625
+24,281
+32,381
+Currency derivatives
+26,194
+Interest rate derivatives
+38,569
+61,333
+risk-weighted assets
+Counterparty credit default
+2015
+2016
+2015
+45,372
+Bank
+6,149
+1,699
+9,990
+11,935
+risk-weighted assets
+Netting settled credit default
+5,541
+9,408
+3,819
+7,207
+Commodity derivatives and others
+2
+75
+25
+Credit derivatives
+769
+10,843
+Group
+The credit risk-weighted assets in respect of the above derivatives of the Group and the Bank as at the end of the reporting
+date are as follows:
+For the year ended 31 December 2016, a net loss from the hedging instrument of RMB75 million was recognised in "Other
+comprehensive income" on net investment hedges (2015: Nil), and there was no ineffectiveness in profit or loss that arises
+from the net investment hedges for the current year (2015:Nil).
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+one year
+2015
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+181
+Annual Report 2016
+Liabilities
+(127)
+Assets
+176
+Interest rate swap contracts
+three
+but within
+but within
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+only in limited circumstances. Hedging is undertaken using deposits taken in the same currencies as the functional currencies
+of related branches and subsidiaries which are accounted for as hedges of certain net investment in foreign operations.
+Net investment hedges
+Liabilities
+(99)
+73
+18,360
+2,626
+Assets
+Total
+five years
+five years
+15,290
+282
+162
+one year
+months
+Over
+2,835
+Total
+33,176
+2,268
+31,541
+197,031
+304,488
+189,026
+Bills
+483,892
+305,265
+308,984
+638,863
+Securities
+Reverse repurchases analysed by collateral:
+792,876
+502,296
+943,351
+700,280
+511,254
+230,922
+700,280
+502,296
+2015
+2016
+Bank
+Group
+26. LOANS AND ADVANCES TO CUSTOMERS
+As at 31 December 2016, the amount of the placements through reverse repurchase agreements from the Group with
+non-principal guaranteed wealth management products sponsored by the Group is RMB126,706 million (31 December
+2015: RMB18,760 million). During the year of 2016, the maximum exposure of the placements through reverse
+repurchase agreements from the Group with non-principal guaranteed wealth management products sponsored by
+the Group is RMB126,706 million (2015: RMB33,184 million). The transactions were conducted in the ordinary course
+of business under normal terms and conditions and at market rates.
+943,351
+In accordance with master repurchase agreements and related supplementary agreements, the Group offsets
+reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and
+presents net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the
+financial statement. As at 31 December 2016, reverse repurchase agreements and repurchase agreements which
+meet the criteria for offsetting were RMB633,828 million and RMB659,969 million respectively (31 December
+2015: RMB572,560 million and RMB597,258 million respectively), and the net reverse repurchase agreements and
+net repurchase agreements were RMB177,649 million and RMB203,790 million, respectively (31 December 2015:
+RMB137,066 million and RMB161,764 million, respectively).
+(i)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+10
+ICBC
+182
+792,876
+(ii)
+168,886
+373,419
+361,483
+2016
+Bank
+Group
+Reverse repurchase agreements comprise reverse repurchases of securities, bills and cash advanced as collateral on securities
+borrowing.
+25. REVERSE REPURCHASE AGREEMENTS
+The credit risk-weighted assets represent the counterparty credit risk associated with derivative transactions and are
+calculated with reference to Regulation Governing Capital of Commercial Banks (Provisional) promulgated by the
+CBRC, which includes counterparty credit default risk-weighted assets and credit value adjustment.
+Reverse repurchases (i)
+(i)
+57,757
+65,704
+92,874
+16,075
+19,188
+20,332
+42,269
+700,280
+2015
+943,351
+2016
+502,296
+Other financial institutions
+561,954
+333,410
+569,932
+338,797
+Banks
+counterparty:
+Reverse repurchases analysed by
+792,876
+502,296
+52,982
+996,333
+755,627
+55,347
+Cash advanced as collateral on securities
+borrowing
+2015
+792,876
+Credit value adjustment
+five years
+4,222
+Notes to the Financial Statements
+14,696
+Hedging instruments
+Gain/(loss) arising from fair value hedges, net:
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates. Interest rate swaps are used as hedging instruments to hedge the interest risk of
+financial assets and financial liabilities.
+Fair value hedges
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Hedged items attributable to the hedged risk
+Notes to the Financial Statements
+180
+There is no ineffectiveness recognised in profit or loss that arises from the cash flow hedge for the current year (2015: Nil).
+24
+4
+20
+2,301
+3,059
+245
+ICBC
+513
+Group
+2015
+three
+Within
+Over
+Fair values
+Notional amounts with remaining life of
+Over three
+2016
+2016
+Group
+18
+6
+(73)
+(446)
+91
+452
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+220
+220
+2,081
+2,081
+2015
+(2,108)
+22
+36,405
+232
+950
+Notional amounts with remaining life of
+35,223
+4
+(2,108)
+10
+35,418
+748
+five years
+12,956
+4
+Fair values
+Over three
+Over
+Currency swap contracts
+758
+Liabilities
+Assets
+Total
+Over
+five years
+245
+five years
+513
+Interest rate swap contracts
+one year
+months
+one year
+but within
+but within
+three
+months
+Within
+months
+but within
+one year
+2
+Over
+2,896
+18,828
+339
+279
+(133)
+Liabilities
+22,342
+Assets
+311
+2,896
+18,828
+339
+279
+Interest rate swap contracts
+Total
+22,342
+five years
+311
+Bank
+1,302
+Interest rate swap contracts
+but within
+one year
+Over
+one year
+but within
+(133)
+months
+but within
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2016
+three
+five years
+months
+months
+(147)
+Liabilities
+Assets
+777
+54,438
+6,620
+months
+1,302
+31,715
+1,302
+Interest rate swap contracts
+Total
+five years
+one year
+one year
+14,801
+14,801
+five years
+6,620
+one year
+but within
+Over
+31,715
+three
+months
+Within
+Over
+but within
+Fair values
+54,438
+Notional amounts with remaining life of
+2015
+777
+(147)
+Over three
+(63,469)
+(44,278)
+Impact on net interest income
+40,182
+(36,021)
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+Interest Income
+♦ Interest Income on Loans and Advances to Customers
+19,191
+Interest income on loans and advances to customers was RMB538,219 million, RMB78,322 million or 12.7% lower than
+those of the previous year. The interest rates of new loans and repriced existing loans during the reporting period were
+largely lower than those of last year, as affected by the fact that PBC cut benchmark interest rates on RMB loans five times
+in 2015. The policy of "replacement of business tax with VAT" launched on 1 May 2016 also resulted in the decrease of
+interest income on loans and advances to customers as the VAT of interest income is detached from the selling price.
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+In RMB millions, except for percentages
+(76,203)
+Changes in interest expenses
+(2,743)
+(1,524)
+2,893
+Debt securities issued
+(5,487)
+(2,744)
+Due to banks and other financial institutions
+(40,160)
+(59,201)
+19,041
+Deposits
+Liabilities
+(80,299)
+2016
+59,373
+1,369
+(139,672)
+Average yield
+Average
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+5.31
+Changes in interest income
+616,541
+4.25 11,607,327
+538,219
+12,658,686
+advances to customers
+Total loans and
+5.75
+440,293
+7,662,872
+4.57
+393,870
+8,614,976
+loans
+Medium to long-term
+Item
+balance
+Short-term loans
+4,043,710
+Interest
+income
+144,349
+Average yield
+2015
+Average
+balance
+3.57
+3,944,455
+Interest
+income
+176,248
+(%)
+4.47
+(%)
+(5,253)
+16
+(908)
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+represent the average of the balances at the beginning of the year and that at the end of the year.
+2.47
+2.16
+Net interest margin
+2.30
+2.02
+Net interest spread
+507,867
+471,846
+Net interest income
+1,383,096
+20,142,166
+1,363,841
+21,360,043
+Total Liabilities
+Non-interest-bearing liabilities
+1.94
+363,912
+18,759,070
+1.60
+319,634
+19,996,202
+Total interest-bearing liabilities
+3.70
+16,101
+435,460
+3.35
+17,470
+521,697
+In RMB millions, except for percentages
+Debt securities issued
+(2) Investment in bonds related to restructuring includes Huarong bonds and special government bond. Please see "Note 27. (a) to
+the Financial Statements: Receivables" for details.
+(3) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(4)
+Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+Due from banks and other financial institutions
+(3,189)
+632
+(3,821)
+Due from central banks
+(242)
+(99)
+(143)
+Investment in bonds related to restructuring
+6,707
+(12,822)
+19,529
+Investment in bonds not related to restructuring
+6,465
+(4,345)
+(12,921)
+Investment
+(78,322)
+(123,038)
+Loans and advances to customers
+Net increase/
+(decrease)
+Interest rate
+Volume
+Comparison between 2016 and 2015
+Increase/(decrease) due to
+In RMB millions
+Discussion and Analysis
+Assets
+Item
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+ICBC
+19,386
+2016
+Interest
+expense
+Average
+4,074,196
+2.69
+114,513
+4,263,288
+Time deposits
+Personal deposits
+1.87
+145,536
+7,769,611
+1.45
+123,008
+8,481,624
+Subtotal
+0.73
+132,964
+30,170
+0.66
+31,855
+4,807,607
+Demand deposits (¹)
+3.16
+115,366
+3,655,043
+2.48
+91,153
+3,674,017
+Time deposits
+Corporate deposits
+(%)
+Average cost
+4,114,568
+balance
+3.26
+3,440,581
+1.81
+ICBC
+18
+Note: (1) Includes outward remittance and remittance payables.
+1.91
+298,010
+15,579,271
+1.53
+257,850
+16,878,531
+Total deposits
+1.50
+9,071
+604,019
+Demand deposits
+1.40
+693,038
+Overseas business
+1.99
+143,403
+7,205,641
+1.62
+125,110
+7,703,869
+Subtotal
+0.33
+10,439
+3,131,445
+0.31
+10,597
+9,732
+2015
+(%)
+Average cost
+5.32
+171,894
+3,228,124
+4.14
+156,658
+3,786,442
+Personal loans
+4.53
+19,593
+432,191
+3.26
+22,107
+678,019
+Discounted bills
+Overseas business
+5.58
+Average yield
+Interest
+income
+394,299
+7,060,495
+4.58
+323,952
+7,077,009
+Corporate loans
+balance
+(%)
+Average
+Average yield
+Interest
+income
+balance
+Item
+(%)
+Average
+1,117,216
+3.18
+Interest
+expense
+Average
+balance
+Item
+2015
+2016
+In RMB millions, except for percentages
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+Interest expense on deposits amounted to RMB257,850 million, representing a decrease of RMB40,160 million or 13.5% as
+compared to that of last year, principally due to PBC lowering the RMB benchmark deposit interest rates five times in 2015,
+resulting in a decrease of 38 basis points in the average cost.
+♦ Interest Expense on Deposits
+Interest Expense
+Interest income on due from banks and other financial institutions was RMB31,285 million, representing a decrease of
+RMB5,253 million or 14.4% as compared to that of last year, principally due to the drop of 30 basis points in the average
+yield of due from banks and other financial institutions as affected by the fall of interest rates during the reporting period.
+♦ Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from central banks was RMB44,678 million, RMB3,189 million or 6.7% lower than that of the
+previous year, mainly because PBC cut deposit reserve ratio many times in 2015 and the daily average balance of due from
+central banks reduced by RMB246,557 million.
+♦ Interest Income on Due from Central Banks
+35,502
+Interest income on investment in bonds related to restructuring arrived at RMB4,192 million, down RMB242 million or 5.5%
+from the previous year, mainly because advance repayment of part of the Huarong bonds resulted in a decrease in the
+average balance during the reporting period.
+♦ Interest Income on Investment
+Discussion and Analysis
+17
+Annual Report 2016
+5.31
+616,541
+11,607,327
+4.25
+538,219
+advances to customers 12,658,686
+Total loans and
+3.47
+30,755
+886,517
+Interest income on investment was RMB177,298 million, RMB6,465 million or 3.8% higher than that of the previous year.
+Specifically, interest income on investment in bonds not related to restructuring was RMB173,106 million, representing an
+increase of RMB6,707 million or 4.0%, mainly because the Bank increased bond investment during the reporting period,
+resulting in a rise of RMB528,627 million in the average balance of investment in bonds not related to restructuring. In 2016
+the market interest rate declined, and the average yield of investment in bonds not related to restructuring dropped by 31
+basis points.
+49,801
+44,716
+1.71
+(27,723)
+220,835
+193,112
+Less: Operating expenses
+(4.0)
+(27,052)
+668,733
+641,681
+5.6
+8,969
+160,866
+169,835
+(7.1)
+(36,021)
+507,867
+471,846
+(%)
+Growth rate
+Increase/
+(decrease)
+2015
+2016
+Operating income
+Non-interest income
+(12.6)
+Net interest income
+Less: Impairment losses
+86,993
+(1.6)
+(1,342)
+85,515
+84,173
+Less: Income tax expense
+0.0
+44
+363,235
+363,279
+Profit before taxation
+11.8
+274
+2,330
+2,604
+joint ventures
+Shares of profits of associates and
+(0.1)
+(230)
+360,905
+360,675
+Operating profit
+1.0
+901
+87,894
+Profit for the year
+Item
+CHANGES OF KEY INCOME STATEMENT ITEMS
+11
+Annual Report 2016
+We were more responsive to changes in market and customer needs through faster business transformation. In
+a new and changing situation, sustainable banking cannot go without keeping pace with the market and customers and
+making demand-oriented moves. Riding on the trend of cross-market integrated development in the context of financial
+disintermediation and the trend of growing diversity of customer needs, we made full use of the Group's licenses and
+synergies to continuously improve the full-value-chain service and create greater market room for transformation of the
+conventional driving forces and growth of the new ones. In the mega retail field, financial assets of individual customers
+broke the mark of RMB12 trillion, maintaining a leading position in the market; 120 million credit cards were also issued. In
+the fields of mega asset management and mega investment banking, balance of wealth management products was RMB2.7
+We were better positioned to proactively cater for the new normal in economic development and made
+continuous improvement on the quality of financing development. The Bank upholds the fundamental logic of
+adaptation, seizing the opportunity, and steering the new normal in economic development throughout our business
+development and the Bank focused our efforts on supporting economic transformation and upgrading the supply-side
+structural reform. We endeavored to transform the credit expansion mode by relying more on re-allocation of existing
+credit assets and increasing the turnover of assets to seize structural opportunities and prevent and control structural risks.
+Domestic branches granted RMB3 trillion of loans in 2016, of which new loans amounted to RMB844.6 billion and relending
+of recovered loans reached RMB2.16 trillion. In terms of lending structure, RMB946.6 billion of project loans were granted
+accumulatively, representing an increase of RMB129.8 billion year-on-year. This was mainly applied to key fields such as
+transportation, public facilities, functional upgrading of key cities, high-quality government-purchased services and advanced
+manufacturing. Retail loans, which are less capital intensive, grew faster. Domestic residential mortgages have increased by
+RMB717.0 billion, representing an increase of 28.8%. Loans to small and micro enterprises have also increased by RMB150.8
+billion, growing faster than all other types of loans in the same period. In terms of geographical mix, large and medium-
+sized cities had a faster growth in loans, with first-tier cities and provincial capital cities contributing 69% of total new
+loans. USD23.5 billion of loans were granted to countries or regions along the "Belt and Road", showing an increase of
+35.8%. Non-credit financing continued to expand. As at the end of the year, the balance of enterprise bond investment,
+equity financing, wealth management investment and entrusted loans amounted to RMB2.5 trillion. The increase in non-
+credit financing and new local government bond investment together were 1.17 times total new loans. Signed framework
+agreements on cooperation in debt-for-equity swap amounted to RMB55.0 billion. The integrated credit and non-credit
+financing services have improved our structure and quality of financing and met the diverse needs for funding caused by
+development of the real economy.
+Last year, we encountered grave challenges as evidenced by the number of problems and interwoven risks that were
+involved in operating the business, coupled with interest rate liberalization, financial disintermediation and cross-sector
+competition. Pursuant to the strategic objectives and tasks set by the Board of Directors and adhering to the general
+principle of making progress while stablising performance, the Management transformed the development model on the
+one hand and guarded against risk on the other hand in a bid to enhance the steadiness, coordinateness and sustainability
+of development.
+First, the decline in net interest margin (NIM) was well contained. The Group's NIM was 2.16%, showing a decrease of 21
+bps from last year if the replacement of business tax with VAT is not factored into the same. The decrease is basically the
+same as that of last year. That result is attributable mainly to our proactive efforts to improve the asset and liability structure,
+to enhance pricing management and to increase the efficiency of fund operation, which suppressed the decreasing trend in
+net interest income to a certain degree and ensured profit stability. Second, income structure was improved continuously.
+Net fee and commission income was RMB145.0 billion, showing an increase of 4.7% if the replacement of business tax with
+VAT is not factored into the same, accounting for 22.6% of operating income, an increase of 1.15 percentage points. Third,
+new driving forces became stronger. Domestic mega retail sector contributed RMB196.1 billion to the operating income,
+occupying 39.66% of the domestic institutions' revenue, which is an increase of 0.67 percentage points. Mega asset
+management and mega investment banking saw their driving forces becoming stronger, with income growth rate of asset
+custody, asset management and pension business exceeding or coming close to 10%. Overseas institutions and domestic
+comprehensive subsidiaries generated RMB21.13 billion of net profit, accounting for 7.6% of the Group's net profit, an
+increase of 0.7 percentage points. This gives a steady and strong impetus to profit growth of the Group.
+In 2016, ICBC focused on its principal businesses, defended the bottom line and maintained a solid and steady development
+in spite of complicated changes in both internal and external environments. Our net profit for the year reached RMB279.1
+billion, showing an increase of 0.5% as compared with the previous year. Return on weighted average equity, basic earnings
+per share and cost-to-income ratio met the targets set by the Board of Directors in its operation plan. Those results did not
+come easily. In particular, there are three encouraging developments.
+President's Statement
+ICBC
+10
+President Gu Shu
+President's Statement
+9
+Annual Report 2016
+30 March 2017
+Chairman: Yi Huiman
+Only those who try will know how hard things can be; only those who travel will know how dangerous the path is. Standing
+at a new historical starting point, we are fully aware that the way ahead will not be easy. Compared with our joint-stock
+reform and listing in the past, the reform and development today is equally pioneering, arduous and complicated albeit
+significant changes in the environment, conditions and tasks. Only the persistent innovators and practical achievers will
+embrace a bright future. We will observe the laws governing the operation of commercial banks, adhere to our strategy,
+fulfill our responsibilities and progress with a view to overcoming different challenges ahead. With new visions, new
+measures and new agendas, we will take our transformation and development efforts into a new realm and write a proud
+and glorious chapter in the new year.
+2016 was also a year that oversaw substantial changes in the composition of the Bank's Board of Directors and the Senior
+Management. Several board members and senior management members joined the Bank in 2016 and the transitional
+progress was smooth, maintaining a scientific and efficient level of operation within the corporate governance structure of
+the Bank.
+2016 was a tough year after our joint-stock reform and listing. Despite the complex situations, the Bank maintained a
+stable performance with good momentum for high-quality growth, which responded to concerns expressed by others and
+stabilized market expectations. The Bank was ranked the 1st place among the Top 1000 World Banks by The Banker and
+the Global 2000 listed by Forbes, and topped the sub-list of commercial banks of the Global 500 in Fortune for the fourth
+consecutive year, indicating a big advancement on our international competitiveness and market image.
+We achieved new breakthroughs in reform and innovation. The Bank deliberated and implemented reform and
+innovation measures in such areas as governance structure, management system, operating mechanism and information
+technology. We fully realized that FinTech innovation is reshaping the operating and developing model of banks and
+their competition landscape. Spearheading industrial revolution with technological innovation has been the traditional
+advantage of the Bank and the key to our successful transformation. We set up "seven innovation labs" covering internet-
+based finance, big data and artificial intelligence, cloud computing, block chain and biological identification, established
+the corporate-level data application system across the board, and optimized the IT architecture from a high starting point,
+striving to build more open, flexible and powerful technological systems. We accelerated the combination of technology
+and business, strongly promoted the e-ICBC internet-based finance strategy, and ramped up efforts on building the three
+platforms of ICBC Mobile, ICBC Mall and ICBC Link, the online financing center and the payment product line. We renovated
+our outlets to be more intelligent and lighter at a faster speed, formed an online-offline integrated service system, and raised
+our service capability through technological and service model innovations. We launched a series of reform measures in a
+coordinated way, including the institutional and mechanism reform of credit operation and management, bills and interbank
+business reform, optimization of personnel structure, and the "last mile" of performance assessment. With these efforts,
+we established a new structure and new mechanism which are conducive to enhancing our competitiveness and developing
+capability, strengthening enterprise risk management, raising resource allocation efficiency, and motivating innovation and
+creativity.
+enhanced our competitiveness, developing capability, and sustainable profit growth. We earnestly carried out the "two
+focus" strategy to guide and support branches in key cities to become better and stronger and focus on winning key
+markets of competition. We perfected the operating and management system at profitability units, consolidated their
+capability of professional operation, value creation and profit contribution, and fully invigorated transformation and
+development at all levels and in all fields.
+Chairman's Statement
+2,744,339
+President's Statement
+In RMB millions, except for percentages
+trillion and income from asset custody was RMB6.89 billion, representing an increase of 24.3%. Both products were leading
+in their respective market segments. Investment banking business income was RMB25.0 billion, with the M&A financial
+advisory service having a leading position in the Asia Pacific region. Meanwhile, we maintained our leading position in
+strategic and fundamental businesses. As always, we have treated deposits as our fundamental resources for development
+transformation and domestic new RMB deposits was RMB1,280.2 billion, representing a year-on-year increase of RMB610.2
+billion, hence achieving the highest of the last three years.
+We pressed further ahead with comprehensive risk management to ensure all risks are under control. Risk
+management is the largest variable affecting our profit growth, and places the biggest pressure on business development.
+Challenged by the ongoing pressure on asset quality and interwoven risks, we put substantive emphasis on the core of risk
+management, governed loans with an iron hand, strengthened credit risk prevention and control, and strictly controlled
+the floodgate for new loans. We strengthened efforts to monitor outstanding loans and resolve non-performing loans
+(NPLs) and created a mechanism for NPL recovery and disposal to ensure stability of asset quality. As at the end of 2016,
+the Group's NPL ratio was 1.62%, representing an increase of 0.12 percentage points from the end of last year and a
+year-on-year decrease of 0.25 percentage points. The divergence between overdue loans and NPLs fell by RMB18.9 billion,
+representing a year-on-year decrease of RMB86.0 billion. Credit risk management showed signs of positive changes. We
+strengthened global market research, developed early risk prevention strategy and mitigation plan and focused on enhancing
+the management of off-balance-sheet risk, liquidity risk and foreign exchange risk. Risk preventions were better targeted
+and more effective. We strengthened internal control and compliance management, improved risk management in key
+areas and, in particular, intensified the compliance and anti-money laundering management of overseas institutions. We
+also established an information technology-assisted, automatic and smart risk management platform with the big data
+technology that identified and blocked 63,400 telecom frauds and protected customer funds worth of RMB930 million
+from risk. Thanks to these efforts, we have not only safeguarded customer funds and our own reputation, but we have also
+fulfilled the responsibility for fostering a sound financial ecosystem as a large bank.
+In 2016, in response to a severe external business environment, with a focus on serving the real economy and meeting
+the financial requirements of consumers, the Bank committed to seeking progress while ensuring stability, adhered to
+inheritance while striving for innovation, worked to increase income while cutting expenditure, implemented strict risk
+prevention and control and achieved a stable performance in making profit. In 2016, the Bank realized a net profit of
+RMB279,106 million, representing an increase of RMB1,386 million or 0.5% as compared to the previous year. Return on
+average total assets stood at 1.20%, and return on weighted average equity was 15.24%. Operating income amounted
+to RMB641,681 million, representing a decrease of 4.0%. This was mainly due to the decrease of net interest income by
+7.1% to RMB471,846 million as affected by the fall of interest margin. Non-interest income reached RMB169,835 million,
+representing an increase of 5.6%. Operating expenses amounted to RMB193,112 million, representing a decrease of 12.6%,
+and the cost-to-income ratio was 27.40%. Allowance for impairment losses was RMB87,894 million, representing an
+increase of 1.0%. Income tax expense reduced by 1.6% to RMB84,173 million.
+Income Statement Analysis
+FINANCIAL STATEMENT ANALYSIS
+Discussion and Analysis
+ICBC
+14
+Looking ahead to 2017, the world economy will grow at a slow pace at large, with greater uncertainty. The improving
+US economy is likely to keep leading developed markets, while the European and Japanese economies will subject to
+higher downward pressure. Emerging markets should guard against the impacts of capital flight and trade protectionism.
+International financial markets will remain turbulent as a result of brewing political risks in developed countries and a
+persistently weak recovery of the world economy. 2017 is a critical year for the implementation of China's "13th Five-Year
+Plan", as well as for deepening of the supply-side structural reform. The Chinese central bank will maintain a prudent and
+neutral monetary policy, ensure fundamentally steady liquidity by employing various types of monetary policy instruments,
+implement the monetary policy in optimizing credit structure, and guide financial institutions to provide further support to
+key sectors and weak areas. In the meantime, it will continue to conduct the supply-side structural reform of the financial
+services sector, offer greater support to the government's major strategies including the initiative to cut overcapacity,
+promoting "mass entrepreneurship and innovation" and strategic emerging industries, and adhere to differentiated housing
+credit policies. It will practically prevent and eliminate financial risks and stay clear of systemic risks.
+Asset scale of the banking industry grew steadily, with the quality of credit assets remaining stable overall. At the end
+of 2016, the total assets of banking financial institutions (corporate) in China were RMB232.25 trillion, representing an
+increase of 15.8%. The balance of NPLs of commercial banks reached RMB1,512.3 billion; NPL ratio was 1.74%; allowance
+to NPL was 176.40%; core tier 1 capital adequacy ratio (CAR), tier 1 CAR and CAR were 10.75%, 11.25% and 13.28%
+respectively.
+Money supply maintained stable growth in 2016. At the end of December, the M2 balance was RMB155.01 trillion,
+representing an increase of 11.3%. The outstanding RMB loans reached RMB106.6 trillion, representing an increase of
+13.5%. The balance of RMB deposits registered RMB150.59 trillion, up 11.0%. The social financing scale was RMB17.8
+trillion in 2016, RMB2.4 trillion more than the previous year. Stock indexes swung up and down at the beginning of the
+year, then steadied in general and declined at the end of the year, with a decline of 12.3% and 19.6% in the Shanghai
+Composite Index and the Shenzhen Component Index respectively. The capitalization of the free float stocks on the
+Shanghai and Shenzhen stock markets decreased by 5.9%. The accumulative issuance amount of bonds in the bond market
+reached RMB35.6 trillion, up 55.5%. The central parity of RMB against the US dollar was RMB6.9370, representing a
+depreciation of 6.39% from the end of the previous year.
+PBC continued to follow a prudent monetary policy while keeping the policy moderate and flexible, creating an appropriate
+monetary and financial climate for the task of stabilizing growth and supply-side structural reform. First, it further enhanced
+the purposefulness and effectiveness of prudent monetary policy through applying open market operations to keep liquidity
+moderate. Second, it effectively facilitated the innovation, opening up and standardization of financial markets by improving
+the bond market maker management regulations and issuing administrative measures for bill transactions. Third, it pressed
+ahead with the risk prevention of cross-border capital flows and trade and investment facilitation.
+In 2016, the Chinese economy registered a slower but stable performance with good momentum for growth. China's gross
+domestic product (GDP), consumer price index (CPI), retail sales of consumer goods, fixed asset investment and industrial
+added value of above-scale enterprises rose by 6.7%, 2.0%, 10.4%, 8.1% and 6.0% respectively, while total imports and
+exports fell by 0.9%.
+The world economy maintained a grueling recovery in 2016, despite the impacts of a series of events, including Britain's
+severance from the EU, the US presidential election and Italy's constitutional referendum. The US realized a steady economic
+growth, the European economy recovered moderately and emerging market economies stabilized and improved, with Japan
+still mired in economic recession. International financial markets convulsed violently, with the dollar remaining strong, global
+stock markets collectively rising, commodity prices picking up generally, and bond markets falling in choppy trading.
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Discussion and Analysis
+13
+Annual Report 2016
+Chairman of the Board of Supervisors Qian Wenhui
+30 March 2017
+President: Gu Shu
+// ind
+谷
+ist
+ICBC
+12
+We broadened innovative service with greater farsightedness in the trends of financial technology development.
+We continued to deepen the big data and informatization strategy, consolidated technological innovation resources and
+launched nearly one thousand application innovation projects to accelerate integrated innovation in technology and
+business. In particular, e-ICBC Internet-based finance was advanced in such dimensions as products, scenarios and channels.
+As at the end of 2016, the open online banking platform ICBC Mobile had 253 million customers, including 66.05 million
+active mobile terminal users, representing an increase of 64.2%. The e-commerce platform ICBC Mall reached an annual
+transaction volume of RMB1.27 trillion. The instant messaging platform ICBC Link had 66.49 million customers, 12.4 times
+that at the beginning of the year. Internet financing increased by RMB105.7 billion to RMB629.3 billion, making us the
+largest internet financing bank. In addition, we combined our strengths in technological innovation with our strengths in
+offline outlet services, improved our efforts to optimize the network of smarter and smaller outlets and established a system
+of integrated online and office services in an effort to enhance service capabilities and create greater value for customers at
+lower costs.
+279,106
+With growing grasses, one can tell spring is not far away. Faced with the increasingly complex economic situation and
+business environment at home and abroad, the Management will stay true to the development strategy set by the Board
+of Directors and keep to the ultimate mission of serving the real economy with diligence. By expanding our market share
+via transformation and innovation, and deriving value from risk management, we will spare no efforts to pursue healthy,
+sustainable development of ICBC while delivering better services to our customers and creating greater return to our
+shareholders and the society.
+1,386
+Total interest-generating assets
+2.52
+36,538
+1,448,398
+2.22
+31,285
+1,412,253
+institutions (4)
+Due from banks and other financial
+1.51
+47,867
+3,161,562
+1.53
+44,678
+2,915,005
+Due from central banks(3)
+2.25
+4,434
+197,117
+2.20
+4,192
+190,871
+restructuring (2)
+21,841,527
+Investment in bonds related to
+791,480
+20,550,489
+44,314
+277,720
+2,595,974
+institutions (4)
+Due to banks and other financial
+1.91
+298,010
+15,579,271
+1.53
+257,850
+16,878,531
+Deposits
+Liabilities
+21,792,776
+23,259,118
+(273,612)
+(290,892)
+Allowance for impairment losses
+1,515,899
+1,708,483
+Non-interest-generating assets
+4.24
+871,779
+3.62
+4.02
+Total assets
+4,136,085
+Item
+Assets
+Interest
+Interest
+2015
+2016
+In RMB millions, except for percentages
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In 2016, net interest income was RMB471,846 million, RMB36,021 million or 7.1% lower than that of last year, accounting
+for 73.5% of the Bank's operating income. Interest income dropped by RMB80,299 million or 9.2% to RMB791,480 million
+and interest expenses decreased by RMB44,278 million or 12.2% to RMB319,634 million. Net interest spread and interest
+margin came at 2.02% and 2.16%, 28 basis points and 31 basis points lower than those of the previous year, respectively.
+During the reporting period, net interest income dropped, due to multiple factors such as the emerging influence of the five
+interest rate cuts and the removal of deposit interest caps by PBC in 2015, the fall of interest rates and the complete launch
+of the pilot programme in the financial sector with regard to the policy of "replacement of business tax with VAT" by MOF
+on 1 May 2016.
+Net Interest Income
+Discussion and Analysis
+15
+Average
+balance
+Annual Report 2016
+268
+589
+Non-controlling interests
+0.4
+1,118
+277,131
+278,249
+company
+166,399
+0.5
+Attributable to: Equity holders of the parent
+45.5
+income/ Average yield/
+857
+170,833
+restructuring
+Investment in bonds not related to
+3.94
+4,664,712
+4,333,202
+3.65
+177,298
+4,855,583
+3.71
+616,541
+11,607,327
+5.31
+173,106
+income/ Average yield/
+expense
+4.25
+balance
+expense
+cost (%)
+Loans and advances to customers
+Investment
+12,658,686
+538,219
+cost (%)
+Average
+64,508
+Group's effective interest
+20.08%
+20.08%
+Group's share of net assets of the associate
+Other comprehensive income
+12,954
+Goodwill
+10,726
+8,788
+Carrying amount of the Group's interest in Standard Bank
+in the consolidated financial statements
+78,814
+26,551
+21,742
+15,825
+Gross amounts of net assets of the associate attribute to the parent company
+10,808
+4,950
+993,396
+(!!)
+827,561
+902,225
+753,045
+91,171
+74,516
+48,603
+42,950
+11,197
+(5,512)
+826
+Total comprehensive income
+5,296
+12,023
+Dividends received from the associate
+5,579
+Reconciled to the Group's interests in the associate
+The following tables illustrate the summarised financial information of the associates that are not individually material
+to the Group:
+Interest in associates in the consolidated financial statements
+2015
+(348)
+27,443
+22,095
+All of the above associates are accounted for using the equity method in the consolidated financial statements.
+(b) Interest in joint ventures
+The Group has interests in a number of individually immaterially joint ventures. The following tables illustrate the
+summarised financial information of the joint ventures that are not individually material to the Group:
+2016
+(348)
+2015
+in the consolidated financial statements
+Aggregate amounts of the Group's share of those joint ventures:
+Profit from continuing operations
+Other comprehensive income
+2,634
+Profit from continuing operations
+2,090
+Aggregate carrying amount of individually immaterial joint ventures
+Less: Allowance for impairment losses
+701
+1,240
+Aggregate amounts of the Group's share of those associates:
+Profit from continuing operations
+Other comprehensive income
+Total comprehensive income
+29
+22
+306
+335
+22
+Reconciliation of carrying amounts to the Group's total interests in the associates:
+2016
+2015
+Carrying amount of material associates
+Standard Bank
+26,551
+21,742
+Carrying amount of individually immaterial associates
+2016
+Revenue
+Goodwill
+Liabilities
+2,090
+30,077
+24,185
+Group
+2016
+2015
+Share of net assets
+2,634
+19,663
+10,762
+8,824
+30,425
+24,533
+Less: Allowance for impairment losses
+(348)
+(348)
+15,709
+(b)
+22,095
+27,443
+405
+Banking
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+190
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Investment in associates and joint ventures comprise the following:
+Interest in associates
+Interest in joint ventures
+Group
+2016
+2015
+(a)
+30,077
+Net assets
+24,185
+(a) Interest in associates
+Johannesburg, Commercial banking
+Republic of
+South Africa
+(i)
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the
+Group to widen its customer base in Africa.
+The market value of the Group's investment in Standard Bank amounts to RMB25,067 million as at 31 December 2016 (31
+December 2015: RMB15,362 million).
+Annual Report 2016
+20.08
+191
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts using equity method in the Group's consolidated financial statements.
+Gross amounts of the associate
+2016
+2015
+Assets
+Notes to the Financial Statements
+20.08
+Principal
+activities
+registration
+(i)
+Particulars of the Group's only material associate is as follows:
+Name
+Standard Bank Group Limited
+("Standard Bank") (i)
+Percentage of
+equity interest %
+31 December 31 December
+2016
+20.08
+Bank
+2016
+34,242
+2015
+34,242
+Voting
+rights %
+Place of
+31 December
+incorporation/
+2015
+2016
+Shares listed outside Hong Kong, at cost
+59
+Disposals
+Total comprehensive income
+286
+London,
+United Kingdom
+(281)
+(108)
+(2,231)
+(658)
+(3,278)
+97
+At 31 December 2015 and 1 January 2016
+6,585
+50,103
+7,022
+109,418
+Depreciation charge for the year
+5,646
+1,067
+45,667
+7,947
+189
+324
+Accumulated depreciation and impairment:
+At 1 January 2015
+40,197
+41
+5,620
+44,312
+3,867
+Acquisition of subsidiaries
+94,037
+5,562
+1,073
+7,925
+3,489
+18,049
+Impairment charge for the year
+324
+Depreciation charge for the year
+5,101
+19,761
+Impairment charge for the year
+85,763
+224,426
+At 31 December 2016
+89,024
+22,968
+2,590
+20,396
+21,072
+111,231
+Bank
+Office
+equipment
+Properties and
+buildings
+Construction
+in progress
+Leasehold
+improvements
+and motor
+vehicles
+246,209
+2,924
+26,101
+88,566
+492
+492
+Disposals
+(499)
+(169)
+(2,453)
+(1,339)
+(4,460)
+At 31 December 2016
+50,814
+41
+7,483
+55,597
+11,276
+125,211
+Net carrying amount:
+At 31 December 2015
+371,420
+122,507
+75,993
+10,073
+127,413
+24,845
+8,662
+65,573
+66,824
+293,317
+1,909
+Additions
+12,305
+7,530
+31,782
+54,527
+CIP transfer in/(out)
+5,920
+(10,658)
+188
+1,001
+At 1 January 2015
+Cost:
+Total
+426
+59
+All of the above joint ventures are accounted for using the equity method in the consolidated financial statements.
+192
+ICBC
+30. PROPERTY AND EQUIPMENT
+Group
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Properties and
+buildings
+Construction
+Leasehold
+Office
+equipment
+and motor
+in progress
+improvements
+vehicles
+Aircraft and
+vessels
+4,550
+21
+Acquisition of subsidiaries
+160
+53,850
+CIP transfer in/out)
+5,359
+(9,741)
+404
+3,978
+Disposals
+38,252
+(830)
+(198)
+(2,497)
+(12,508)
+(16,274)
+At 31 December 2016
+139,838
+23,009
+(241)
+6,911
+762
+6,849
+479
+Disposals
+(1,328)
+(350)
+(154)
+(2,276)
+(10,371)
+(14,479)
+At 31 December 2015 and 1 January 2016
+134,233
+26,142
+9,509
+71,175
+92,785
+333,844
+Additions
+1,076
+319
+USD680 million
+80
+60
+100
+100
+00
+100
+HKD4,882 million
+HKD4,882 million
+Hong Kong, the PRC
+ICBC International Holdings Limited
+Investment
+banking
+Industrial and Commercial Bank of China
+100
+00
+100
+00
+100
+("ICBC International")
+KZT8,933 million
+banking
+Commercial
+Name
+2016
+2015
+2016
+2016
+Industrial and Commercial Bank of China
+100
+(Asia) Limited ("ICBC Asia")
+100
+HKD36,379 million
+invested
+by the Bank
+HKD46,930 million
+registration
+Principal
+and operations
+activities
+Hong Kong, the PRC
+100
+KZT8,933 million
+Almaty, Kazakhstan
+(Almaty) Joint Stock Company
+Industrial and Commercial Bank of China
+(Europe) S.A.
+100
+100
+10
+100
+EUR437 million
+EUR437 million
+management
+Luxembourg
+banking
+PT. Bank ICBC Indonesia (" ICBC Indonesia")
+98.61
+98.61
+98.61
+IDR2,692.2 billion
+USD286 million
+Commercial
+Co., Ltd. *
+Fund
+banking
+ICBC (London) PLC ("ICBC London")
+100
+00
+100
+00
+100
+USD200 million
+USD200 million
+ICBC Credit Suisse Asset Management
+80
+80
+80
+80
+RMB200 million
+RMB433 million
+London,
+United Kingdom
+Beijing, the PRC
+Commercial
+banking
+Commercial
+Amount
+issued share/
+paid-in capital
+Percentage of equity interest % Voting rights %
+Nominal value of
+Charge for the year
+Reversals
+(25)
+(25)
+Disposals
+(30)
+(30)
+630
+Others
+3
+11
+| | 3
+3
+At 31 December 2015
+and 1 January 2016
+95
+8
+606
+24
+812
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(d) Movements of allowance for impairment losses of held-to-maturity investments and
+available-for-sale equity investments measured at cost during the year are as follows:
+At 1 January 2015
+Group
+Available-
+Held-to-
+for-sale
+maturity
+investments
+equity
+investments
+Total
+Held-to-
+maturity
+investments
+Bank
+Available-
+for-sale
+equity
+investments
+Total
+142
+670
+Charge for the year
+Bank ICBC (Joint stock company)
+13
+Disposals
+606
+645
+28. INVESTMENTS IN SUBSIDIARIES
+Unlisted investments, at cost
+Bank
+2016
+2015
+39
+102,288
+Annual Report 2016
+189
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Place of
+incorporation/
+101,066
+785
+678
+107
+Others
+125
+S36
+673
+768
+27
+606
+633
+13
+13
+13
+(2)
+(2)
+At 31 December 2016
+11
+1
+1
+Reversals
+100
+00
+100
+80
+ARS1,345 million
+ARS3,505 million
+New York,
+United States
+Buenos Aires,
+Insurance
+Commercial
+banking
+Commercial
+(Argentina) S.A.("ICBC Argentina")
+ICBC PERU BANK
+100
+80
+100
+100
+USD50 million
+USD50 million
+Argentina
+Lima, Peru
+banking
+Commercial
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+100
+10
+80
+Industrial and Commercial Bank of China
+(USA) NA
+100
+USD50 million
+USD50.25 million
+0
+ICBC-AXA Assurance Co., Ltd. *
+60
+Industrial and Commercial Bank of China
+80
+68
+60
+60
+80
+80
+RMB8,705 million
+USD309 million
+RMB5,700 million
+USD258 million
+Delaware and
+New York
+United States
+Shanghai, the PRC
+Broker dealer
+80
+100
+100
+100
+Mexico City, Mexico
+Commercial
+Mexico S.A.
+ICBC Turkey Bank Anonim Şirketi
+92.8169
+92.8169
+92.8169
+MXN664 million
+TRY420 million
+Istanbul, Turkey
+banking
+Commercial
+("ICBC Turkey")
+banking
+ICBC Standard Bank PLC ("ICBC Standard")
+60
+60
+USD309 million
+MXN664 million
+100
+100
+Real202 million
+Real202 million
+Sao Paulo, Brazil
+banking
+Commercial
+and investment
+Industrial and Commercial Bank of China
+100
+100
+10
+100
+NZD145 million
+NZD145 million
+(New Zealand) Limited
+Auckland,
+New Zealand
+banking
+Commercial
+banking
+("ICBC New Zealand")
+Industrial and Commercial Bank of China
+100
+100
+USD1,083 million
+100
+("ICBC Thai")
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd.
+Chongqing Bishan ICBC Rural Bank
+Co., Ltd. *
+Industrial and Commercial Bank of China
+(Canada)
+89.33
+89.33
+89.33
+MOP589 million
+Industrial and Commercial Bank of China
+MOP12,064 million
+Commercial
+*
+60
+60
+60
+60
+60
+Macau, the PRC
+("ICBC Leasing")
+(Macau) Limited ("ICBC Macau")
+Leasing
+10
+100
+RUB2,310 million
+RUB2,310 million
+Jakarta,
+Indonesia
+Moscow, Russia
+Commercial
+banking
+Commercial
+banking
+ICBC Financial Leasing Co., Ltd. *
+100
+100
+10
+100
+RMB11,000 million
+RMB11,000 million
+Tianjin, the PRC
+RMB200 million
+Industrial and Commercial Bank of China
+Financial Services LLC
+RMB120 million
+80
+Commercial
+banking
+100
+00
+100
+MYR833 million
+MYR833 million
+Toronto, Canada
+Industrial and Commercial Bank of China
+97.86
+97.86 THB20,132 million
+THB23,711 million
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+Commercial
+banking
+Commercial
+(Thai) Public Company Limited
+banking
+97.86
+CAD178.66 million
+CAD158 million
+80
+100
+00
+100
+RMB100 million
+RMB100 million
+Zhejiang, the PRC
+Chongqing, the PRC
+banking
+Commercial
+banking
+Commercial
+banking
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+100
+80
+10
+Total
+50
+80
+100
+Cost:
+Group
+125,479
+604
+Total
+At
+1 January
+2015
+Deferred income tax liabilities:
+2015
+(475)
+(gains)/losses
+recorded in
+profit or loss
+At
+31 December
+equity
+2015
+Allowance for impairment losses
+(68)
+(228)
+Total
+losses
+recorded in
+(296)
+84
+849
+2016
+profit or loss
+equity
+2016
+Allowance for impairment losses
+(296)
+(69)
+995
+(365)
+financial assets
+595
+(475)
+120
+Others
+696
+153
+Change in fair value of available-for-sale
+Change in fair value of available-for-sale
+financial assets
+70
+2016
+gains/(losses)
+recorded in
+profit or loss
+gains/(losses)
+recorded in
+equity
+At
+31 December
+2016
+Allowance for impairment losses
+1 January
+28,054
+28,066
+Change in fair value of available-for-sale
+financial assets
+(9,343)
+8,663
+(680)
+Change in fair value of financial instruments
+12
+At
+Total
+Total
+525
+595
+Others
+449
+247
+696
+451
+19
+525
+995
+196
+ICBC
+Bank
+2016
+Deferred income tax assets:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Deferred income tax liabilities:
+2016
+31 December
+recorded in
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Total
+gains/
+Total
+(losses)/
+At
+(losses)
+195
+1 January
+gains
+recorded
+Acquisition
+At
+of
+31 December
+2015
+Deferred income tax assets:
+recorded in
+Annual Report 2016
+28,398
+8,727
+(973)
+Change in fair value of financial instruments
+at fair value through profit or loss
+(790)
+(1,595)
+(2,385)
+Accrued staff costs
+7,174
+(148)
+7,026
+Others
+(4,091)
+175
+30
+(3,886)
+21,066
+(1,395)
+2015
+at fair value through profit or loss
+Accrued staff costs
+profit or loss
+subsidiaries
+695
+733
+35
+(4,091)
+24,758
+3,869
+(7,596)
+(5,554)
+35
+Total
+Total
+At
+1 January
+gains/(losses)
+recorded in
+(gains)
+At
+21,066
+Others
+7,174
+726
+2015
+Allowance for impairment losses
+25,807
+2,636
+28,443
+Change in fair value of available-for-sale
+financial assets
+(1,341)
+(8,329)
+(9,670)
+Change in fair value of financial instruments
+at fair value through profit or loss
+(602)
+(188)
+(790)
+Accrued staff costs
+6,448
+in equity
+(798)
+(1,590)
+(2,388)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(i)
+198
+There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value
+of the financial liabilities that were attributable to changes in credit risk were considered not significant during the year of
+2016 and 2015 cumulatively. The changes in fair value of the financial liabilities were mainly attributable to changes in other
+market factors.
+The debt securities including notes issued by Singapore Branch in 2012 and 2014 at fixed rates, notes issued by London
+Branch in 2015 at fixed rate and in 2016 at floating rate, 3 notes at floating rates and 8 notes at fixed rates issued
+by Sydney Branch in 2016 and equity-linked note issued by ICBC Asia in 2016 were classified as financial liabilities
+designated at fair value through profit or loss. The fair value of the debt securities is lower than the amount that the
+Group would be contractually required to pay to the holders of these debt securities upon maturity as at 31 December
+2016 by RMB555 million (31 December 2015: RMB383 million lower).
+As at 31 December 2016, the fair value of the financial liabilities related to precious metals was approximately the same
+as the amount that the Group would be contractually required to pay to the holders (31 December 2015: approximately
+the same).
+Notes to the Financial Statements
+As at 31 December 2016, the fair value of structured deposits was approximately the same as the amount that the
+Group would be contractually required to pay to the holders of these structured deposits upon maturity (31 December
+2015: RMB159 million higher).
+(b)
+(a)
+Structured deposits, certain financial liabilities related to precious metals and debt securities have been matched with
+derivatives or precious metals as part of a documented risk management strategy of the group to mitigate market risk,
+such as interest rate risk. An accounting mismatch would arise if these financial liabilities were accounted for at amortised
+cost, whereas the related derivatives or precious metals were measured at fair value with movements in the fair value taken
+through profit or loss. By designating these financial liabilities at fair value through profit or loss, the movement in their fair
+values is recorded in the statement of profit or loss.
+The principal guaranteed wealth management products issued by the Group and the financial assets invested in by the
+aforementioned products form part of a group of financial instruments that are together managed on a fair value basis,
+and are classified as financial liabilities and financial assets designated at fair value through profit or loss, respectively. The
+fair value of the wealth management products was RMB510 million higher than the amount that the Group would be
+contractually required to pay to the holders of the wealth management products upon maturity as at 31 December 2016 (31
+December 2015: RMB1,496 million higher).
+(2)
+(1)
+297,414
+(c)
+197
+Annual Report 2016
+371,556
+428
+141,516
+Goodwill (i)
+9,480
+8,956
+Repossessed assets
+8,273
+6,808
+8,099
+6,624
+Others
+23,529
+15,102
+8,713
+6,726
+585,733
+458,699
+479,196
+352,001
+148,610
+303,927
+Total
+Structured deposits
+205,531
+2015
+2016
+270,831
+205,531
+270,831
+(1)
+(2)(a)
+Wealth management products
+2016
+Bank
+Group
+33. FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+As indicated by the impairment tests, goodwill arising from business combinations is not impaired and thus, no
+impairment loss was recognised.
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash
+flow projections are based on financial forecasts approved by management of the subsidiaries. The average growth
+rates are projected based on the similar rates which do not exceed the long term average growth rate for the business
+in which the CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+2015
+17,797
+27,521
+8,674
+6,508
+5,555
+Other
+8,496
+13,311
+8,496
+13,377
+(2)(c)
+Debt securities
+55,866
+59,185
+55,871
+59,192
+(2)(b)
+precious metals
+Financial liabilities related to
+27,521
+366,752
+8,697
+173,241
+Settlement accounts
+recorded in
+31 December
+equity
+2015
+Allowance for impairment losses
+25,022
+3,032
+At
+28,054
+financial assets
+(1,110)
+(8,233)
+(9,343)
+Change in fair value of financial instruments
+at fair value through profit or loss
+(601)
+Change in fair value of available-for-sale
+(losses)/gains
+gains/(losses)
+recorded in
+profit or loss
+2015
+7,174
+(148)
+7,026
+Others
+(4,733)
+45
+(4,690)
+20,354
+(1,681)
+8,661
+27,334
+2015
+Deferred income tax assets:
+Total
+Total
+At
+1 January
+(197)
+182,118
+ICBC
+6,448
+2015
+103,613
+Precious metals
+220,091
+114,619
+189,722
+92,967
+2016
+104,463
+Land use rights
+19,756
+19,198
+19,682
+Advance payments
+10,680
+11,310
+391
+19,264
+108,907
+112,298
+Interest receivable
+726
+7,174
+Others
+(5,860)
+378
+749
+(4,733)
+23,899
+3,939
+(7,484)
+20,354
+The Group and the Bank did not have significant unrecognised deferred income tax assets or liabilities at the end of the
+reporting period.
+32. OTHER ASSETS
+Group
+Bank
+2016
+2015
+Accrued staff costs
+At 1 January 2015
+(9,670)
+Change in fair value of available-for-sale
+(In RMB millions, unless otherwise stated)
+The carrying value of the Group's and the Bank's properties and buildings is analysed based on the remaining terms of the
+land leases as follows:
+Long term leases (over 50 years):
+Bank
+2016
+2015
+2016
+Financial Statements for the year ended 31 December 2016
+2015
+13,119
+13,044
+13,115
+13,044
+644
+615
+295
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+293
+Notes to the Financial Statements
+Annual Report 2016
+7,096
+54,408
+111,640
+Net carrying amount:
+At 31 December 2015
+At 31 December 2016
+86,838
+193
+19,690
+20,575
+129,669
+87,188
+16,675
+2,199
+18,027
+124,089
+2,566
+Held overseas
+741
+600
+8
+71,424
+71,366
+70,523
+70,405
+Short term leases (less than 10 years):
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+3,034
+37
+2,822
+2,822
+36
+34
+36
+34
+Held overseas
+26
+3,034
+602
+640
+Held overseas
+176
+172
+14,504
+14,259
+13,586
+13,509
+Medium term leases (10 to 50 years):
+Held in the PRC (other than Hong Kong)
+70,468
+70,459
+70,334
+70,331
+Held in Hong Kong
+316
+305
+152
+66
+41
+50,095
+At 31 December 2016
+(2,991)
+8,743
+69,718
+230,006
+Additions
+936
+2,900
+634
+19,731
+4,800
+CIP transfer in/out)
+5,318
+(5,722)
+404
+Disposals
+(785)
+(193)
+9,270
+131,814
+At 31 December 2015 and 1 January 2016
+(3,765)
+17,792
+7,953
+64,235
+Additions
+1,655
+8,353
+880
+CIP transfer in/(out)
+5,918
+(6,105)
+7,424
+187
+215,459
+18,312
+Disposals
+(1,238)
+(309)
+(90)
+(2,128)
+(82)
+85
+(2,487)
+At 31 December 2016
+(2,473)
+At 31 December 2015 and 1 January 2016
+44,976
+41
+6,177
+49,143
+100,337
+(2,108)
+Depreciation charge for the year
+987
+7,713
+14,294
+Disposals
+(475)
+(68)
+(2,448)
+5,594
+(89)
+(276)
+Disposals
+137,283
+16,716
+9,295
+72,435
+235,729
+Accumulated depreciation and impairment:
+At 1 January 2015
+39,810
+41
+5,272
+43,468
+88,591
+Depreciation charge for the year
+5,442
+994
+7,783
+14,219
+(3,547)
+9
+68
+3,096
+89,024
+differences
+(liabilities)
+temporary
+differences
+tax assets/
+(liabilities)
+Deferred income tax assets:
+Allowance for impairment losses
+112,098
+Deferred
+income
+28,066
+28,054
+Change in fair value of available-for-sale
+financial assets
+(2,816)
+(680)
+(37,275)
+(9,343)
+112,204
+Deductible/
+(taxable)
+Deferred
+income
+tax assets/
+temporary
+120
+2,848
+595
+Others
+3,368
+849
+2,304
+696
+2,471
+604
+4,009
+995
+Bank
+2016
+2015
+Deductible/
+(taxable)
+Change in fair value of financial instruments
+563
+at fair value through profit or loss
+(2,388)
+At
+gains/
+(losses)
+Total
+1 January
+recorded in
+gains
+recorded
+At
+Total
+31 December
+profit or loss
+in equity
+2016
+Allowance for impairment losses
+28,443
+173
+28,616
+2016
+Deferred income tax assets:
+2016
+Group
+(3,191)
+(798)
+Accrued staff costs
+28,104
+7,026
+28,696
+7,174
+Others
+(18,813)
+(4,690)
+(18,900)
+(4,733)
+109,021
+27,334
+81,534
+20,354
+(b) Movements of deferred income tax
+(9,552)
+financial assets
+financial assets
+(296)
+Allowance for impairment losses
+114,765
+28,616
+113,845
+28,443
+Change in fair value of available-for-sale
+financial assets
+tax assets/
+(liabilities)
+(4,005)
+(38,283)
+(9,670)
+Change in fair value of financial instruments
+at fair value through profit or loss
+(9,544)
+(2,385)
+(3,166)
+(973)
+Deferred
+income
+Deductible/
+(taxable)
+temporary
+differences
+Deferred
+income
+tax assets/
+(liabilities)
+2,941
+3,079
+2,924
+88,566
+87,188
+86,838
+As at 31 December 2016, the process of obtaining the title for the Group's properties and buildings with an aggregate net
+carrying value of RMB13,342 million (31 December 2015: RMB11,852 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+As at 31 December 2016, the net carrying value of aircraft and vessels leased out by the Group under operating leases was
+RMB111,231 million (31 December 2015: RMB85,763 million).
+As at 31 December 2016, the net carrying value of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB34,174 million (31 December 2015: RMB22,850 million).
+31. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+Group
+Deferred income tax assets:
+2016
+2015
+Deductible/
+(taxable)
+temporary
+differences
+(790)
+Change in fair value of available-for-sale
+Accrued staff costs
+7,026
+2015
+Deferred
+Taxable/
+income tax
+(deductible)
+liabilities/
+temporary
+differences
+(assets)
+Deferred
+income tax
+liabilities/
+(assets)
+Deferred income tax liabilities:
+Allowance for impairment losses
+(1,460)
+(365)
+(1,143)
+differences
+temporary
+(deductible)
+Taxable/
+28,696
+7,174
+Others
+(15,847)
+(3,886)
+(16,886)
+(4,091)
+113,473
+28,398
+84,206
+21,066
+194
+ICBC
+Group
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+2016
+28,104
+(798)
+(million
+(iv)
+20/08/2009
+20/07/2024
+20/07/2009
+4.00%
+24,000
+24,000
+100 Yuan
+16/07/2009
+09 ICBC 02 Bond
+(million)
+(million)
+Circulation date Notes
+Maturity date
+Value date
+rate
+(In RMB)
+(In RMB)
+(i)
+10 ICBC 02 Bond
+10/09/2010
+100 Yuan
+11 ICBC 02 Bond
+(iii)
+30/08/2011
+30/06/2031
+30/06/2011
+5.56%
+38,000
+38,000
+(In RMB)
+100 Yuan
+11 ICBC 01 Bond
+(ii)
+03/11/2010
+14/09/2025
+14/09/2010
+4.10%
+16,200
+16,200
+29/06/2011
+Issue date
+Name
+Coupon
+The Bank
+Other debt securities issued by
+181,092
+181,999
+195,553
+194,811
+14,461
+12,812
+97,447
+Subsidiaries
+181,999
+181,092
+181,999
+The Bank
+(1)
+Capital Notes issued by
+Subordinated bonds and Tier 2
+2015
+181,092
+29/12/2011
+59,083
+59,083
+Ending
+balance
+Amount
+Issue Price
+As approved by the PBOC and the CBRC, the Bank issued callable subordinated bonds through open market bidding in
+2009, 2010, 2011, 2012 and 2014. Approved by the PBOC, these subordinated bonds were traded in the bond market
+among banks. The relevant information on these subordinated bonds is set out below:
+The Bank:
+(1) Subordinated bonds and Tier 2 Capital Notes
+As at 31 December 2016, the amount of debt securities issued due within one year was RMB28,277 million (31 December
+2015: RMB38,723 million).
+240,175
+97,447
+279,446
+357,937
+59,083
+97,447
+111,069
+163,126
+51,986
+65,679
+Subsidiaries
+306,622
+2016
+100 Yuan
+50,000
+21/09/2025
+21/09/2015
+13,896 4.875%
+2,000
+99.189
+USD
+15/09/2015
+Tier 2 Capital Notes
+15 USD
+(million)
+Circulation date Notes
+Maturity date
+Value date
+Coupon
+rate
+(In RMB)
+Currency)
+(million)
+Issue Price
+22/09/2015 (vii)
+(vii)
+On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal amount
+with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds during
+the period (2015: Nil).
+(iv)
+(iii)
+(ii)
+(i)
+The Bank:
+As at 31 December 2016, the Group's other debt securities issued mainly include:
+(2) Other debt securities issued
+(In RMB millions, unless otherwise stated)
+Issue date Currency
+Financial Statements for the year ended 31 December 2016
+201
+Annual Report 2016
+The above subordinated bonds and notes are separately listed on the Singapore Exchange Securities Trading Limited, the
+Stock Exchange of Hong Kong Limited and the London Stock Exchange Plc. ICBC Asia, ICBC Macau and ICBC Standard have
+not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and notes during the
+period (2015: Nil).
+On 2 December 2009, ICBC Standard issued a subordinated bond with an amount of USD500 million, bearing a fixed
+interest rate of 8.125% per annum and with maturity due on 2 December 2019.
+On 10 September 2014, ICBC Macau issued a subordinated bond with an aggregate nominal amount of USD320 million,
+bearing a floating interest rate. The bond was issued at the price fixed at 99.298% of the nominal amount with maturity due
+on 10 September 2024.
+On 10 October 2013, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million, bearing
+a fixed interest rate of 4.50% per annum. The bond was issued at the price fixed at 99.463% of the nominal amount with
+maturity due on 10 October 2023.
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal
+amount with maturity due on 30 November 2020.
+Subsidiaries:
+Notes to the Financial Statements
+Name
+(Original
+Ending
+balance
+20,000
+100 Yuan
+04/08/2014
+(v)
+13/07/2012
+13/06/2027
+13/06/2012
+4.99%
+20,000
+20,000
+100 Yuan
+11/06/2012
+12 ICBC 01 Bond
+14 ICBC 01 Bond
+(iv)
+17/01/2012
+30/12/2026
+30/12/2011
+5.50%
+20,000
+50,000
+5.80%
+05/08/2024
+Amount
+In 2015, the Bank issued Tier 2 Capital Notes denominated in USD. Approved by the Stock Exchange of Hong Kong Limited
+for listing and dealing, the Notes are listed on the Stock Exchange of Hong Kong Limited. The relevant information is set out
+below:
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 5 August 2019 upon the approval of the relevant regulatory
+authorities
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all or part of the bonds at face value on 20 July 2019. If the Bank does not exercise this
+option, the annual coupon rate will increase by 300 basis points thereafter.
+(vi)
+(v)
+05/08/2014
+(iv)
+(ii)
+(i)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+200
+(vi)
+24/09/2014
+(iii)
+(v)
+2015
+Bank
+134,736
+Banks and other financial institutions
+operating in Mainland China
+Banks and other financial institutions
+operating outside Mainland China
+Money market takings:
+68,198
+1,721,749
+40,214
+1,471,539
+115,088
+1,788,267
+1,516,692
+79,230
+1,653,551
+1,431,325
+1,673,179
+1,437,462
+Banks and other financial institutions
+operating in Mainland China
+Banks and other financial institutions
+operating outside Mainland China
+Deposits:
+2015
+2016
+2015
+185,789
+30,145
+74,950
+365,371
+Repurchases (note 25(i))
+2015
+2016
+Bank
+Group
+Repurchase agreements comprise repurchases of securities, bills and cash received as collateral on securities lending.
+35. REPURCHASE AGREEMENTS
+2,103,289
+2016
+1,920,782
+2,016,799
+381,540
+449,243
+477,593
+500,107
+306,590
+419,098
+291,804
+2,265,860
+Bank
+Group
+34. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+1,883,700
+79,375
+86,051
+11,045
+11,412
+(1) Equity attribute to non-controlling interests of ordinary shares
+11,045
+11,412
+1,710,099
+(2) Equity attribute to non-controlling interests of other equity instruments
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(b) Surplus reserves
+(i) Statutory surplus reserve
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2017, the total surplus reserve of the Bank
+was RMB26,312 million (2015: RMB26,398 million), among which an appropriation of 10% of the profit of the Bank for the
+year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to the statutory surplus reserve,
+in the amount of RMB26,228 million (2015: RMB26,327 million) was approved and the total surplus reserve made by some
+overseas branches was RMB84 million (2015: RMB71 million) pursuant to the requirements of local authorities.
+208
+42. RESERVES
+561,031
+1,969,751
+Total equity attribute to equity holders of the parent company
+(1) Equity attribute to ordinary equity holders of the parent company
+(2) Equity attribute to other equity holders of the parent company
+Total equity attribute to non-controlling interests
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+1
+1,000
+6,691
+Total
+1,000
+6,691
+1,789,474
+1
+6,691
+(3) Interests attribute to equity instruments' holders
+Equity instrument
+1 January
+2016
+31 December
+2016
+1
+2.
+1,000
+2016
+313,306
+2015
+130,830
+3,344,216
+3,655,850
+3,390,514
+3,720,374
+Personal customers
+4,413,305
+5,156,745
+4,507,661
+5,271,686
+Corporate customers
+Demand deposits:
+2015
+2016
+2015
+2016
+Bank
+Group
+Time deposits:
+Personal customers
+Corporate customers
+4,176,834
+Group
+38. DEBT SECURITIES ISSUED
+15,781,673
+17,235,587
+16,281,939
+17,825,302
+243,721
+236,366
+37. DUE TO CUSTOMERS
+243,811
+Others
+4,134,525
+4,321,056
+4,210,600
+4,419,907
+3,645,906
+3,865,570
+3,929,353
+236,501
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+199
+400
+132,625
+194,647
+Other financial institutions
+121,420
+304,587
+180,681
+366,384
+9,410
+Banks
+130,830
+304,987
+337,191
+589,306
+23,885
+28,275
+securities lending
+Cash received as collateral on
+Repurchases analysed by counterparty:
+2016
+304,987
+561,031
+304,987
+Annual Report 2016
+Certificates of deposit issued by Hong Kong Branch, Tokyo Branch, Singapore Branch, Luxembourg Branch, Seoul Branch,
+Doha Branch, New York Branch, Sydney Branch, London Branch, Dubai (DIFC) Branch, ICBC Asia, ICBC Macau, ICBC New
+Zealand and ICBC Standard were recognised at amortised cost.
+36. CERTIFICATES OF DEPOSIT
+130,830
+304,987
+313,306
+561,031
+9,465
+313,306
+7,753
+297,234
+303,841
+9,465
+7,753
+Bills
+553,278
+Securities
+Repurchases analysed by collateral:
+130,830
+121,365
+(vi)
+Sydney Branch issued debt securities amounting to RMB12,211 million denominated in AUD, CHF, RMB, EUR, HKD
+and USD with maturities between 2017 and 2024 at fixed or floating interest rates. Of which, in 2016, Sydney Branch
+issued debt securities amounting to RMB4,486 million denominated in AUD at floating interest rates and in RMB at
+fixed interest rates with maturity in 2018 and 2019.
+Singapore Branch issued notes amounting to RMB15,889 million denominated in RMB and USD with maturities
+between 2018 and 2021 at fixed interest rates. Of which, in 2016, Singapore Branch issued notes amounting to
+RMB10,618 million denominated USD and RMB with maturity in 2018 and 2019 at fixed rates.
+Dividend setting mechanism
+g.
+Five years after the first redemption date of issuance (18 November 2015) under the premise of obtaining the approval of
+the CBRC and meets regulatory requirements, the Group has right to redeem all or some of domestic preference shares. The
+redemption period of preference shares ranges the start date from the date of redemption to conversion of all (redemption
+price is equal to book value plus accrued dividend in current period).
+Redemption
+f.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-
+viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were converted to
+A shares, they may not be converted to Preference Shares again.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to A
+shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+e.
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated debt, holders of
+convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will be
+senior to the ordinary shareholders.
+Order of distribution and liquidation method
+d.
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Dividend stopper
+C.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+Conditions to distribution of dividends
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+206
+ICBC
+757
+450
+120
+Total
+Domestic
+RMB
+RMB
+EUR
+40
+147
+b.
+Amount(million shares)
+USD
+Financial instrument outstanding
+Preference shares
+Overseas
+(c) Changes in preference shares outstanding
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+1 January 2016
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+Notes to the Financial Statements
+ICBC
+204
+The USD, EUR and RMB Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for
+payment. The Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated
+debt, holders of convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the
+Group, but will be senior to the ordinary shareholders.
+Order of distribution and liquidation method
+d.
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Dividend stopper
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+C.
+Conditions to distribution of dividends
+b.
+Dividends will be paid annually.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Fixed rate for a certain period (5 years for USD and RMB tranche and 7 years for EUR tranche) after issuance.
+Dividend
+a.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The
+Group may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+and
+e.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to H
+shares, they may not be converted to Preference Shares again.
+205
+Annual Report 2016
+Dividends will be paid annually.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Fixed rate for a certain period (5 years) after issuance.
+Dividend
+a.
+Mandatory conversion trigger events
+(2) Domestic preference shares
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+Dividend setting mechanism
+g.
+USD Preference Shares: the First Redemption Date is five years after issuance
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+RMB Preference Shares: the First Redemption Date is five years after issuance
+Under the premise of obtaining the approval of the CBRC and condition of redemption, the Group has right to redeem
+all or some of overseas preference shares in first call date and subsequent any dividend payment date. The first call date
+after issuance and subsequent any dividend payment date (redemption price is equal to issue price plus accrued dividend in
+current period).
+Redemption
+f.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-
+viable), the Group shall have the right to convert all Preference Shares into H shares. If Preference Shares were converted to
+H shares, they may not be converted to Preference Shares again.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(1) Overseas preference shares
+31 December 2016
+2,940
+instrument
+Financial
+1 January 2016
+(c) Changes in perpetual bond outstanding
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+207
+Annual Report 2016
+the amendment of the maturity, distribution payment date and/or the distribution amount of the perpetual bond.
+ICBC Asia has a call option to redeem all the outstanding perpetual bond from 21 July 2021 or any subsequent distribution
+payment date thereafter.
+the conversion of all or a part of the principal and/or distribution of the perpetual bond into shares of ICBC Asia or
+another person; and/or
+reduction or cancellation of all or a part of the principal and/or distribution of the perpetual bond;
+(3)
+(2)
+(1)
+The perpetual bond will be written off up to the amount as directed by the Hong Kong Monetary Authority (hereinafter
+referred to as "HKMA") if the HKMA notifies ICBC Asia that in the opinion of the HKMA or a relevant government body,
+ICBC Asia would become non-viable if there is no written off of the principal. The perpetual bond also contain Hong Kong
+Bail-in Power. Each holder of the perpetual bond shall be subject to the exercise by the Hong Kong Resolution Authority to
+any or a combination of the following:
+The distribution shall be payable semi-annually, with the first distribution payment date being 21 January 2017. ICBC
+Asia has the right to cancel distribution payment (subject to the requirement as set out in the terms and conditions of the
+perpetual bond) and the distribution cancelled shall not be cumulative.
+On 21 July 2016, ICBC Asia issued Basel III-compliant Non-Cumulative Subordinated Additional Tier 1 Capital Securities
+(hereinafter referred to as "Perpetual Bond") in the aggregate amount of US$1 billion (equivalent to approximately
+RMB6,676 million net of related issuance costs). Fixed rate for the first 5 years after issuance of the bond is 4.25%. If
+perpetual bonds are not called, distribution will be reset based on the then prevailing 5-year USA national bonds yield plus a
+fixed initial spread (3.135 percent. Per annum) every 5 years.
+Amount
+outstanding
+(million pieces)
+In original
+currency
+(million)
+USD Perpetual bond
+(million)
+(million)
+(million pieces)
+(million)
+(million)
+(million pieces)
+(million)
+(b) Main Clauses
+In RMB
+Amount
+In RMB
+currency
+Amount
+In RMB
+In original
+31 December 2016
+Increase during the year
+In original
+currency
+Note: USD perpetual bond was issued by ICBC Asia, a subsidiary of the Bank.
+6,676
+Book value
+outstanding
+In RMB
+currency
+Accounting
+Financial instrument
+In original
+Amount
+(a) Perpetual bond outstanding at the end of the year
+Issue date
+(2) Perpetual Bond
+45,000
+12,000
+4,558
+17,991
+N/A
+45,000
+12,000
+600
+79,549
+In original currency(million)
+In RMB (million)
+USD Perpetual bond
+classification
+Equity
+15
+Less: Issue fees
+6,691
+1
+Total
+No
+None
+None
+2016-07-21
+6,691
+Conversion
+Conversion
+condition
+(million) Maturity
+(million)
+pieces)
+Issue price
+1,000USD/Piece
+4.25%
+Interest rate
+1,000
+(b) Main Clauses
+79,375
+Book value
+10,552
+11,968
+10,916
+Sundry tax payables
+4,716
+2,739
+4,716
+2,739
+Early retirement benefits
+22,085
+22,923
+23,748
+24,924
+subsidies payables (i)
+Salaries, bonuses, allowances and
+158,757
+169,899
+11,455
+Promissory notes
+2,438
+5,052
+A shares of RMB1 Yuan each
+H shares of RMB1 Yuan each
+Issued and fully paid:
+40. SHARE CAPITAL
+As at 31 December 2016, the amount of other liabilities due within one year was RMB514,673 million (31 December 2015:
+RMB518,166 million).
+There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2016 (31
+December 2015: Nil).
+(ii)
+486,426
+196,320
+481,236
+637,830
+34,145
+36,496
+92,327
+132,850
+Others
+4,843
+1,258
+589,073
+220,899
+Settlement accounts
+250,425
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+202
+ICBCIL Finance Co., Ltd., which is controlled by the Group, issued medium-term debt securities and short-term notes
+amounting to RMB42,473 million denominated in RMB and USD, with maturities between 2017 and 2026 at fixed or
+floating interest rates. Of which, in 2016, ICBCIL Finance Co., Ltd. issued medium-term debt securities amounting to
+RMB20,284 million denominated in USD, with maturities between 2018 and 2026 at fixed interest rates. By satisfying
+certain conditions, ICBCIL Finance Co., Ltd. has the option to redeem all of the debt securities at any time. Above debt
+securities were guaranteed by ICBC Financial Leasing Co., Ltd. and listed on the Irish Stock Exchange and the Stock
+Exchange of Hong Kong Limited respectively. In 2016, ICBCIL Finance Co., Ltd. issued short-term notes amounting to
+RMB3,926 million denominated in USD with maturity in 2017.
+ICBC Financial Leasing issued debt securities and notes amounting to RMB47,979 million denominated in RMB and
+USD with maturities between 2017 and 2026 at fixed or floating interest rates. Of which, Skysea International Capital
+Management Limited ("Skysea International"), which is controlled by the Group, issued guaranteed notes of USD750
+million with a fixed interest rate of 4.875% in 2011. As at 31 December 2016, Skysea International has redeemed
+USD139 million and the carrying amount of the Notes were RMB4,231 million. The Notes were guaranteed by
+Hong Kong Branch and were issued at the price fixed at 97.708% of the nominal amount with maturities due on 7
+December 2021. By satisfying certain conditions, Skysea International has the option to redeem all of the notes at any
+time. The Notes were listed on the Stock Exchange of Hong Kong Limited.
+ICBC Asia issued notes amounting to RMB852 million denominated in HKD and RMB with maturities between 2017
+and 2020 at fixed interest rates. Of which, in 2016 ICBC Asia issued interbank deposits amounting to RMB1,236
+million denominated in RMB with maturities in 2017 at fixed interest rates.
+(ii)
+(iii)
+(i)
+The Head Office issued debt securities in London amounting to RMB698 million denominated in RMB with maturities
+in 2018 at fixed interest rates.
+(ix)
+(viii) The Head Office issued debt securities in Hong Kong amounting to RMB501 million denominated in RMB with maturity
+in 2019 at fixed interest rates.
+(vii) In 2016, Hong Kong Branch issued debt securities amounting to RMB3,459 million denominated in USD with maturity
+in 2019 at floating interest rate.
+Dubai (DIFC) Branch issued debt securities amounting to RMB7,851 million denominated in USD with maturities
+between 2019 and 2021 at fixed or floating interest rates. Of which, in 2016, Dubai (DIFC) Branch issued debt
+securities amounting to RMB4,391 million denominated in USD with maturities in 2019 and 2021 at fixed or floating
+interest rates.
+Luxembourg Branch issued notes amounting to RMB17,858 million denominated in USD with maturities between
+2017 and 2019 at fixed or floating interest rates. Of which, in 2016, Luxembourg Branch issued notes amounting to
+RMB13,689 million denominated in USD with maturities in 2017 and 2019 at fixed or floating interest rates.
+New York Branch issued notes amounting to RMB36,953 million denominated in USD with maturities between
+2017 and 2021 at fixed or floating interest rates. Of which, in 2016, New York Branch issued notes amounting to
+RMB14,548 million denominated in USD with maturities in 2017 and 2021 at fixed interest rates.
+In 2016, Tokyo Branch issued notes amounting to RMB1,921 million denominated in JPY and RMB with maturities in
+2017 and 2019 at fixed interest rates.
+Subsidiaries:
+2016
+6,691
+(vi)
+237,369
+254,942
+243,064
+Interest payable
+2015
+2016
+2015
+2016
+(v)
+Bank
+(i)
+39. OTHER LIABILITIES
+(vii) ICBC Argentina issued a medium-term note amounting to RMB89 million denominated in ARS with maturities in 2017
+at a floating interest rate.
+ICBC Indonesia issued a medium-term note amounting to RMB119 million denominated in IDR with maturity in 2017
+at a fixed interest rate.
+ICBC New Zealand issued medium-term bonds and notes amounting to RMB502 million denominated in AUD, NZD
+and USD with maturities between 2017 and 2020 at fixed or floating interest rates. Of which, in 2016, ICBC New
+Zealand issued medium-term bonds amounting to RMB41 million denominated in NZD with maturity in 2020 at fixed
+interest rates and in AUD with maturity in 2020 at a floating interest rate.
+ICBC International issued medium-term bonds amounting to RMB9,339 million denominated in USD with maturity in
+2017 and 2019 at a fixed interest rate. Of which, in 2016, ICBC International issued medium-term bonds amounting
+to RMB4,825 million denominated in USD with maturity in 2019 at fixed interest rates.
+ICBC Thai issued debt securities amounting to RMB5,669 million denominated in THB with maturities between 2017
+and 2026 at fixed interest rates. Of which, in 2016, ICBC Thai issued debt securities of RMB1,629 million denominated
+in THB with maturities between 2017 and 2026 at fixed interest rates.
+Hai Jiao 1400 limited, which is controlled by the Group, issued a private placement bond amounting to RMB1,275
+million denominated in USD with maturity in 2025 at a fixed interest rate. The bond was guaranteed by The Export-
+Import Bank of Korea.
+Group
+2015
+Number
+of shares
+(millions)
+120
+6.00% 100RMB/Share
+Mandatory
+4,558 None
+600
+40
+Mandatory
+None
+12,000
+17,991
+བ༦
+15EUR/Share
+6.00%
+147
+6.00% 20USD/Share
+2014-12-10 Equity
+2014-12-10 Equity
+Equity
+2014-12-10
+RMB
+2,940
+EUR
+12,000
+Mandatory
+174
+Less: Issue fees
+79,549
+757
+Total
+Mandatory No
+None
+45,000
+None
+45,000
+4.50% 100RMB/Share
+Equity
+2015-11-18
+RMB
+Shares in:
+Domestic Preference
+No
+2 2 2
+450
+ICBC
+USD
+Overseas Preference
+Annual Report 2016
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends.
+356,407
+356,407
+356,407
+356,407
+269,612
+269,612
+203
+269,612
+86,795
+86,795
+86,795
+86,795
+Nominal
+value
+(millions)
+Number
+of shares
+Nominal
+value
+269,612
+Shares in:
+Notes to the Financial Statements
+41. OTHER EQUITY INSTRUMENTS
+condition Conversion
+(million) Maturity
+(million)
+shares)
+Issue price
+rate
+Conversion
+In RMB
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+currency
+Dividend
+Accounting
+classification
+Issue date
+Financial instrument
+outstanding
+In original
+Amount
+(a) Preference shares outstanding at the end of the year
+(1) Preference shares
+(million
+1
+1,000
+3.16 to 4.20
+0.01 to 2.99
+9,034
+10,030
+Over five years
+2,266
+2,369
+2,044
+2,094
+17,620
+18,978
+16,000
+17,089
+Operating lease commitments — Lessor
+11,093
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+Over one year but within five years
+Over five years
+214
+ICBC
+Group
+2016
+2015
+10,046
+10,198
+39,092
+39,463
+37,331
+Within one year
+39,344
+9,899
+4,965
+Authorised, but not contracted for
+535
+Contracted, but not provided for
+27,833
+719
+22,081
+495
+701
+3,602
+3,261
+28,368
+22,800
+4,097
+Over one year but within five years
+3,962
+Operating lease commitments — Lessee
+At the end of the reporting period, the Group and the Bank leased certain office properties under operating lease
+arrangements, and the total future minimum lease payments in respect of non-cancellable operating leases were as follows:
+Group
+Bank
+2016
+2015
+2016
+2015
+Within one year
+5,455
+5,516
+4,922
+(b) Operating lease commitments
+86,469
+89,005
+Notes to the Financial Statements
+143,393
+219,199
+135,910
+210,786
+Loan commitments:
+With an original maturity of under one year
+With an original maturity of one year or over
+Undrawn credit card limit
+173,392
+102,375
+159,962
+91,546
+1,064,189
+727,316
+Usance letters of credit and other commitments
+1,011,280
+647,448
+538,709
+620,680
+527,533
+2,778,412
+2,297,884
+2,713,875
+2,289,444
+Credit risk-weighted assets of
+credit commitments(i)
+Group
+Bank
+691,737
+25,588
+42,966
+27,148
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Credit commitments
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+Group
+Bank
+2016
+Bank acceptances
+271,691
+2015
+339,494
+2016
+265,625
+2015
+336,461
+Guarantees issued:
+Financing letters of guarantees
+137,076
+61,839
+175,554
+110,738
+Non-financing letters of guarantees
+295,471
+281,804
+301,898
+295,055
+Sight letters of credit
+45,752
+2015
+2016
+2016
+2016
+3,657
+306
+306
+6,480
+39,752
+306
+90
+181,682
+38,075
+The maximum exposures to loss in the above investment funds, wealth management products, segregated asset
+management plans, trust plans and asset-backed securities are the amortised cost or fair value of the assets held by the
+Group at the reporting date in accordance with the line items of these assets recognised in the statement of financial
+positions.
+(2) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2016, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+As at 31 December 2016, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,423,950 million (31 December 2015:
+RMB2,385,200 million) and RMB1,127,964 million (31 December 2015: RMB936,220 million) respectively.
+(3) Unconsolidated structured entities sponsored by the Group during the year which the
+Group does not have an interest in 31 December 2016
+34,128
+During the year of 2016, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB2, 169 million (2015: RMB6,076 million).
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2016 but matured before 31 December 2016 was RMB252,931 million (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2015 but matured
+before 31 December 2015 was RMB821,477 million).
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2016 but matured
+before 31 December 2016 was RMB5,244 million (The aggregated amount of the investment funds sponsored and issued by
+the Group after 1 January 2015 but matured before 31 December 2015 was RMB57,936 million).
+212
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+45. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+Analysis of balances of cash and cash equivalents
+Note
+2016
+2015
+Cash on hand
+Balances with central banks other than restricted deposits
+During the year of 2016, the amount of income received from such category of investment funds was RMB1 million. (2015:
+RMB57 million).
+20
+181,376
+5,679
+27,593
+179
+25,241
+208,582
+48,253
+Annual Report 2016
+211
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Investment funds
+Wealth management products
+Segregated asset management plans
+Trust plans
+200
+Asset-backed securities
+31 December 2015
+Financial
+assets
+designated
+Available-
+Held-to
+maturity
+investments
+for-sale
+financial
+at fair value
+assets
+through
+profit or loss
+Receivables
+Group
+20
+84,572
+85,226
+25,160
+assets
+7,191
+liabilities
+7,107
+75,081
+63,834
+100,309
+25,160
+71,025
+7,107
+Securitisation transactions
+The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to
+structured entities which issue asset-backed securities to investors.
+25,228
+As the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and it
+has retained control of them, those financial assets are recognised on the statement of financial position to the extent of
+the Group's continuing involvement. The extent of the Group's continuing involvement is the extent to which the Group is
+exposed to changes in the value of the transferred assets. As at 31 December 2016, loans with an original carrying amount
+of RMB45,290 million (31 December 2015: RMB29,527 million) had been securitised by the Group under arrangements in
+which the Group retains a continuing involvement in such assets in the form of subordinated tranches. As at 31 December
+2016, the carrying amount of assets that the Group continues to recognise was RMB2,107 million (31 December 2015:
+RMB1,310 million).
+213
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability. As at 31 December 2016,
+the Group does not have carrying amount of transferred assets that did not qualify for derecognition and carrying amount of
+their associated liabilities (31 December 2015: RMB122 million and RMB17 million respectively).
+47. SHARE APPRECIATION RIGHTS PLAN
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+48. COMMITMENTS AND CONTINGENT LIABILITIES
+(a) Capital commitments
+At the end of the reporting period, the Group and the Bank had capital commitments as follows:
+Group
+Bank
+Annual Report 2016
+liabilities
+assets
+associated
+20
+113,106
+94,843
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+86,312
+122,082
+Placements with banks and other financial institutions with
+original maturity of three months or less
+249,296
+235,904
+Reverse repurchase agreements with original maturity of
+three months or less
+656,082
+903,243
+1,189,368
+1,441,298
+46. TRANSFERRED FINANCIAL ASSETS
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+Repurchase transactions and securities lending transactions
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities sold under repurchase agreements in the absence of
+default by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase
+or decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral in
+certain circumstance. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+The following table analyses the carrying amount of the above mentioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+Repurchase agreements
+Securities lending agreements
+31 December 2016
+Carrying
+amount of
+transferred
+Carrying
+amount of
+associated
+31 December 2015
+Carrying
+amount of
+transferred
+Carrying
+amount of
+2015
+1,049
+2015
+2015
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Reverse repurchase agreements
+Repurchase agreements
+Financial investments
+Credit commitments
+2016
+2015
+25,971
+Debt securities purchased
+19,827
+362,556
+15,442
+31,906
+8,757
+3,169
+435,283
+385,187
+3,643
+1,893
+18,456
+4,496
+21,328
+427,149
+11,689
+Balances at end of the year:
+The interest rates disclosed above vary across product groups and transactions depending on the maturity date, credit risk
+of counterparty and currency. In particular, given local market conditions, the spread of certain significant or long dated
+transactions can vary across the market.
+2,533
+13,530
+814
+158,662
+833
+14,945
+Annual Report 2016
+217
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+(b) Subsidiaries
+Due from banks and other financial institutions
+2016
+2015
+28,746
+32,756
+130
+263
+31
+1,051
+%
+16
+1,666
+%
+0.12 to 6.80
+0 to 15.00
+1.33 to 6.50
+0 to 6.95
+0.50 to 6.50
+0 to 6.20
+0.70 to 3.80
+0 to 5.45
+Due to banks and other financial institutions
+Loans and advances to customers
+3,599
+12,500
+103,473
+(c)
+Associates and affiliates
+Balances at end of the year:
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Due to customers
+Derivative financial liabilities
+Credit commitments
+218
+ICBC
+The material balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+2016
+1,714
+1,062
+1,802
+329
+1,151
+2,242
+8,588
+11,957
+7
+941
+43
+66
+2,003
+305
+2015
+0.73 to 4.50
+0 to 8.00
+0.05 to 6.46
+0.01 to 9.00
+0 to 20.00
+0.72 to 4.50
+-0.12 to 60.00
+0.70 to 6.61
+109,424
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Net trading expense
+Net fee and commission income
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Due to banks and other financial institutions
+2016
+2015
+135
+55
+955
+779
+314
+91
+917
+616
+350
+106
+1,285
+881
+%
+%
+140,601
+2016
+2,329
+76,449
+Financial assets of the Group including securities, bills and loans have been pledged as collateral for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2016, the carrying value of the
+financial assets of the Group pledged as collateral amounted to approximately RMB341,593 million (31 December 2015:
+RMB144,813 million).
+51. FIDUCIARY ACTIVITIES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+52. RELATED PARTY DISCLOSURES
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+(a) Shareholders with significant influence
+(i)
+The MOF
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2016, the MOF directly owned approximately 34.60% (31 December
+2015: approximately 34.60%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, including the subscription and redemption of government bonds issued by the MOF.
+Details of the material transactions are as follows:
+Balances at end of the year:
+The PRC government bonds and the special government bond
+Transactions during the year:
+50. ASSETS PLEDGED AS SECURITY
+Subscription of the PRC government bonds
+2015
+847,923
+834,549
+2016
+2015
+225,366
+48,340
+127,314
+89,719
+31,006
+29,169
+%
+2016
+%
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+1,012,587
+1,231,376
+1,071,193
+1,194,507
+1,042,388
+(i) Internal Ratings-Based approach was adopted to calculate the credit risk-weighted assets according to the scope
+approved by the CBRC, and others were calculated by weighted approach.
+(d) Legal proceedings
+As at 31 December 2016, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB5,515 million (31 December 2015: RMB4,715 million).
+In the opinion of management, the Group and the Bank have made adequate allowance for any probable losses based on
+the current facts and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the
+financial position or operations of the Group and the Bank.
+(e) Redemption commitments of government bonds
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2016, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB97,646 million (31 December 2015: RMB97,477 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+(f) Underwriting obligations
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+As at 31 December 2016, the Group and the Bank had no unexpired securities underwriting obligations (31 December 2015:
+Nil).
+215
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+49. DESIGNATED FUNDS AND LOANS
+Designated funds
+Designated loans
+Group
+2016
+1,170,264
+1,169,979
+2015
+1,013,303
+Annual Report 2016
+Redemption of the PRC government bonds
+Interest income on the PRC government bonds
+Interest rate ranges during the year are as follows:
+Bond investments
+2.10 to 6.15
+5,000
+2016
+2015
+621
+722
+569
+662
+146
+515
+%
+%
+3.16 to 4.20
+0.01 to 2.00
+21
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group.
+Significant transactions during the year conducted with these banks and financial institutions, and the corresponding
+balances as at 31 December 2016 are as follows:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Credit commitments
+2016
+2015
+781,753
+870,280
+59,283
+702
+Balances at end of the year:
+59
+200
+22,765
+18,322
+216
+ICBC
+2.16 to 6.34
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+As at 31 December 2016, the Group holds a series of long term bonds issued by Huarong, which is under the control of
+the MOF, with an aggregate amount of RMB94,249 million (31 December 2015: RMB108,187 million). The details of the
+Huarong bonds are included in note 27.
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 52(g) "transactions with state-owned entities in the PRC".
+(ii) Huijin
+As at 31 December 2016, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71% (31 December
+2015: approximately 34.71%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in the key state-owned financial institutions, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not engage in other business activities, and does not intervene in the day-to-day business operations of the key
+state-owned financial institutions it controls.
+As at 31 December 2016, the Huijin Bonds held by the Bank are of an aggregate face value of RMB16.91 billion (31
+December 2015: RMB16.91 billion), with terms ranging from 3 to 30 years and coupon rates ranging from 3.16% to 4.20%
+per annum. The Huijin Bonds are government-backed and the Bank's subscription of the Huijin Bonds was conducted in the
+ordinary course of business, in compliance with relevant regulatory requirements and the corporate governance of the Bank.
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the material transactions are as follows:
+Balances at end of the year:
+Interest receivable
+Debt securities purchased
+Due to customers
+Interest payable
+Financial liabilities designated at fair value through profit or loss
+Transactions during the year:
+Interest expense on due to customers
+Interest income on debt securities purchased
+Net loss on financial liabilities designated at fair value through profit or loss
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+Due to customers
+2016
+2015
+16,786
+200
+16,897
+2,366
+619
+179
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+Profit for the year
+and 1 January 2016
+Balance as at 31 December 2015
+(3)
+(3)
+(3)
+(23,431)
+23,431
+23,431
+Others
+Appropriation to general reserve
+(26,398)
+26,398
+Other comprehensive income
+26,398
+Appropriation to surplus reserve (i)
+Dividends preference shares (note 18)
+(91,026)
+(91,026)
+2014 final (note 18)
+Dividends - ordinary shares
+7,761
+7,761
+88
+(388)
+2,912
+Convertible bonds
+44,947
+(2,331) (2,331)
+44,947
+Total comprehensive income
+356,407
+(4,450)
+(83,150) (83,150)
+Appropriation to surplus reserve (i)
+Dividends-preference shares (note 18)
+2015 final (note 18)
+235,774
+261,218
+(25,444)
+(81)
+(672)
+1,364
+(26,055)
+(25,444)
+Dividends - ordinary shares
+(25,444)
+(672)
+(26,055) 1,364
+261,218 261,218
+1,761,746
+729,783
+596,181
+(4,079)
+(1,601)
+28,489
+241,509
+175,668
+156,195
+79,375
+(81)
+(4,450)
+Capital injection by other equity holders
+262,322
+Other
+Reserves
+The statement of changes in equity of the Bank during the year are set out below.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+209
+Annual Report 2016
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+(h) Distributable profits
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+(g) Other reserves
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+Equity
+component
+of
+(f) Cash flow hedge reserve
+The investment revaluation reserve records the fair value changes of available-for-sale financial assets.
+(d) Investment revaluation reserve
+The general reserve balance of the Bank as at 31 December 2016 amounted to RMB246,308 million (2015: RMB241,509
+million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+(c) General reserve
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(iii) Other surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(ii) Discretionary surplus reserve
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+9,367
+(e) Foreign currency translation reserve
+287,013
+Foreign
+Issued
+share equity convertible Capital Surplus General revaluation translation
+capital instrument bonds reserve reserve reserve
+353,495 34,428
+388 148,437 149,270 218,078
+24,691
+(43)
+97
+24,637
+Total comprehensive income
+24,691
+24,691
+(43)
+97
+24,637
+Other comprehensive income
+262,322
+262,322
+Balance as at 1 January 2015
+-
+513,903 610,647 1,512,861
+(4,036)
+(1,698)
+3,852
+Retained Total
+Subtotal profits equity
+reserves
+reserve
+reserve
+reserve
+Other
+hedging
+Cash flow
+Investment currency
+Profit for the year
+26,312
+10,285
+(26,312)
+Asset-backed securities
+3,657
+3,657
+12,560
+12,560
+215,504
+215,504
+243,722
+243,722
+Segregated asset management plans
+Trust plans
+27,793
+27,793
+6,189
+11,214
+6,189
+5,679
+5,679
+8,570
+8,570
+Investment funds
+exposure
+amount
+exposure
+amount
+31 December 2015
+Carrying
+Maximum
+Maximum
+31 December 2016
+Carrying
+Group
+Wealth management products
+11,214
+7,182
+7,182
+12,560
+31,080
+207,963
+4,679
+2,064
+4,125
+1,500
+7,070
+26,312
+through
+profit or loss
+assets
+investments
+for-sale
+financial
+Held-to
+maturity
+assets
+designated
+at fair value
+Available-
+Financial
+31 December 2016
+Group
+Asset-backed securities
+Trust plans
+Segregated asset management plans
+Wealth management products
+Investment funds
+The following table sets out an analysis of the line items in the statement of financial position as at 31 December 2016 in
+which assets were recognised relating to the Group's interests in structured entities sponsored by third parties:
+259,815
+259,815
+282,255
+282,255
+The following table sets out an analysis of the carrying amounts of interests held by the Group as at 31 December 2016 in
+the structured entities sponsored by third party institutions:
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+notes issued by these structured entities. Such structured entities include investment funds, wealth management products,
+segregated asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of notes to investors.
+Receivables
+44. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+Net (losses)/gains from change in fair value of available-for-sale financial assets
+Items that may be reclassified subsequently to profit or loss:
+(3)
+15
+Share of the other comprehensive income of the investees accounted for
+using equity method which will not be reclassified to profit or loss
+Others
+2015
+2016
+Items that will not be reclassified to profit or loss:
+43. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+Includes the appropriation made by overseas branches in the amount of RMB84 million (2015: RMB71 million).
+(i)
+1,909,929
+(81) 601,857 872,290
+(37,375)
+(4,751)
+2,434
+156,204 201,980 246,308
+79,375
+356,407
+9
+9
+9
+(4,799)
+4,799
+Balance as at 31 December 2016
+Others
+Appropriation to general reserve
+(1) Structured entities sponsored by third party institutions in which the Group held an
+interest
+(237)
+36,956
+4,799
+(1,246)
+Less: Transfer to profit or loss arising from disposal/impairment
+Income tax effect
+Notes to the Financial Statements
+210
+ICBC
+(17,515)
+(75)
+Others
+(5,400)
+13,608
+156
+(860)
+using equity method which may be reclassified subsequently to profit or loss
+Foreign currency translation differences
+Share of the other comprehensive income of investees accounted for
+20,405
+(751)
+(2,357)
+9,172
+(88)
+(8,854)
+(29,449)
+25,745
+Effective hedging portion of gains or losses arising from cash flow
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Loss during the year
+hedging instruments:
+Less: Income tax effect
+(781)
+30
+(88)
+13,020
+8,368,773
+Overseas and
+others
+China
+Western
+China
+5,194,868
+Central
+China
+Bohai
+Rim
+Pearl
+River Delta
+Yangtze
+River Delta
+Northeastern
+3,096,641
+2,827,331
+3,626,559
+2,275,456
+1,068,632
+3,129,868
+Total
+24,108,867
+joint ventures
+30,077
+30,077
+Head Office
+Property and equipment
+28,803
+Eliminations
+(5,479,261)
+4,747
+As at 31 December 2016
+Amortisation
+14,660
+11,072
+597
+235
+187
+93
+263
+389
+77
+218
+2,059
+Capital expenditure
+3,772
+3,458
+5,339
+7,328
+8,948
+4,236
+17,556
+55,384
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+Assets by geographical areas
+Including: Investments in associates and
+Mainland China (HO and domestic branches)
+17,791
+53,243
+23,418
+Other segment information:
+Credit commitments
+(i)
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+2,778,412
+662,510
+441,169
+314,846
+485,726
+158,583
+249,912
+67,703
+397,963
+Annual Report 2016
+223
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2015
+Mainland China (HO and domestic branches)
+Yangtze
+Pearl
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+Central
+Western
+398
+22,156,102
+19,263
+Total liabilities
+22,102,859
+10,391
+122,451
+246,209
+Other non-current assets (i)
+10,561
+5,811
+3,557
+3,985
+5,691
+7,563
+1,358
+4,417
+42,943
+Unallocated assets
+28,398
+Total assets
+24,137,265
+Liabilities by geographical areas
+6,820,411
+5,453,036
+3,318,068
+5,242,654 2,384,189 2,771,987
+1,074,621
+517,154
+(5,479,261)
+Unallocated liabilities
+1,161
+Share of profits of associates and joint ventures
+2,566
+611
+1,534
+209
+13,163
+24,862
+Operating income
+70,287
+113,430
+79,974
+123,491
+79,703
+97,032
+28,451
+49,335
+(22)
+641,681
+Operating expenses
+(16,026)
+(30,480)
+(21,877)
+(31,807)
+(29,630)
+(33,374)
+(12,744)
+(17,196)
+6,342
+22
+1,294
+786
+Northeastern
+14,378
+30,708
+471,846
+Internal net interest (expense)/income
+(142,386)
+29,542
+13,398
+70,362
+15,497
+7,927
+7,796
+(2,136)
+Net fee and commission income
+4,357
+38,348
+23,417
+24,919
+19,993
+20,293
+6,068
+7,600
+(22)
+144,973
+Other income, net (i)
+923
+3,010
+(193,112)
+Loans and advances to customers
+Share of profits of associates and
+joint ventures
+Profit before taxation
+Income tax expense
+Profit for the year
+2,604
+2,604
+46,345
+67,388
+45,486
+73,386
+39,510
+47,199
+13,144
+30,821
+363,279
+(84,173)
+279,106
+Other segment
+information:
+Depreciation
+1,841
+2,074
+1,412
+2,198
+360,675
+Impairment (losses)/reversal on:
+28,217
+47,199
+(7,940)
+(15,477)
+(12,278)
+(18,194)
+(10,489)
+(16,384)
+(2,549)
+(2,827)
+(86,138)
+Others
+24
+(85)
+(333)
+(104)
+(74)
+(75)
+(14)
+(1,095)
+(1,756)
+Operating profit
+46,345
+67,388
+45,486
+73,386
+39,510
+13,144
+Overseas and
+2,968
+River Delta
+3,649
+1,137
+38,487
+57,501
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(i)
+As at 31 December 2015
+Mainland China (HO and domestic branches)
+Head Office
+Yangtze
+River Delta
+Pearl
+River Delta
+Bohai
+Rim
+Central
+China
+Western
+China
+Northeastern
+China
+Overseas and
+others
+Eliminations
+Total
+Assets by geographical areas
+9,142,237
+4,862,465
+3,366,173
+3,633,597
+2,727
+2,216,719
+1,906
+6,026
+(85,515)
+277,720
+Other segment information:
+Depreciation
+1,823
+2,178
+1,435
+2,131
+2,528
+67,278
+1,117
+380
+14,560
+Amortisation
+779
+267
+104
+144
+261
+372
+68
+300
+2,295
+Capital expenditure
+2,488
+1,081
+363,235
+2,819,807
+2,450,563
+22,209,780
+Liabilities by geographical areas
+7,568,090
+4,995,033
+3,497,543
+4,799,262
+2,289,592
+2,732,706
+1,024,661
+810,582
+(7,372,469)
+20,345,000
+Unallocated liabilities
+64,261
+20,409,261
+Total liabilities
+Other segment information:
+Credit commitments
+558,184
+398,045
+250,410
+415,973
+149,897
+207,604
+54,608
+Total assets
+1,069,622
+21,066
+41,780
+(7,372,469)
+22,188,714
+Including: Investments in associates and
+joint ventures
+24,185
+24,185
+Property and equipment
+14,164
+29,480
+11,843
+18,844
+19,906
+24,329
+10,771
+95,089
+224,426
+Other non-current assets (i)
+10,717
+5,839
+3,086
+4,031
+5,610
+7,209
+1,318
+3,970
+Unallocated assets
+Head Office
+27,214
+53,771
+22,685
+24,685
+21,179
+20,588
+5,751
+8,167
+(106)
+143,391
+Other (expense)/income, net (i)
+(2,146)
+(649)
+1,082
+6,209
+227
+1,811
+(131)
+11,072
+17,475
+Operating income
+76,960
+117,661
+81,307
+131,004
+84,447
+104,258
+35,803
+30,897
+4,639
+(1,440)
+River Delta
+Rim
+China
+China
+China
+others Eliminations
+Total
+External net interest income
+210,421
+56,386
+47,333
+24,031
+49,421
+78,677
+17,092
+24,506
+507,867
+Internal net interest (expense)/income
+(135,954)
+26,121
+10,207
+76,079
+13,620
+3,182
+8,185
+Net fee and commission income
+14,533
+42,305
+668,733
+(2)
+(443)
+(971)
+Operating profit
+51,634
+57,305
+35,314
+82,649
+40,815
+53,771
+14,533
+24,884
+360,905
+Share of profits of associates and
+joint ventures
+Profit before taxation
+Income tax expense
+Profit for the year
+2,330
+2,330
+51,634
+57,305
+35,314
+82,649
+40,815
+(21)
+(106)
+(7)
+(176)
+Operating expenses
+(19,094)
+(35,297)
+(25,271)
+(37,297)
+(34,545)
+(39,482)
+(14,593)
+(15,362)
+106
+(220,835)
+Impairment losses on:
+Loans and advances to customers
+(6,047)
+(24,946)
+(20,546)
+(11,034)
+(9,080)
+(10,984)
+(1,769)
+(1,616)
+(86,022)
+Others
+(185)
+(113)
+(24)
+43,602
+(17,966)
+41,865
+RMB'000
+2015
+RMB'000
+2,693
+Loans
+There were no other material transactions and balances with key management personnel on an individual basis for the
+year ended 31 December 2016. The Group enters into banking transactions with key management personnel in the normal
+course of business.
+The aggregated balance of loans and credit card overdraft to the person which are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB28.58 million as at 31 December 2016 (31 December 2015:
+RMB6.86 million).
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(f) Annuity Fund
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund does not hold any share or bond
+issued by the Group as at 31 December 2016 (31 December 2015: Nil).
+(g) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organizations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+2016
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of business,
+and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and those state-
+owned entities are ultimately controlled or owned by the Government. The Group has also established pricing policies for
+products and services and such pricing policies do not depend on whether or not the customers are state-owned entities.
+(a) Operating segments
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+Treasury operations
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers, etc.
+220
+ICBC
+Notes to the Financial Statements
+53. SEGMENT INFORMATION
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the Group.
+The transactions between the Group and the aforementioned parties for the year are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+16
+2016
+2015
+Transactions during the year:
+Interest expense on due to customers
+Interest rate ranges during the year are as follows:
+Due to customers
+2
+%
+0 to 1.30
+%
+0.35 to 1.15
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(e) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+The aggregate compensation for the year, other than those for the personnel disclosed in note 13 above, is as follows:
+Short term employment benefits
+Post-employment benefits
+2016
+RMB'000
+2,665
+159
+2015
+RMB'000
+6,699
+245
+2,824
+6,944
+Note: The above remuneration before tax payable to key management personnel for 2015 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2015 Annual Report.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2016 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's and the Bank's 2016 financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+Annual Report 2016
+219
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Others
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+Operating income
+314,398
+238,133
+84,488
+4,662
+641,681
+Operating expenses
+(76,432)
+(93,718)
+(16,628)
+(6,334)
+(193,112)
+Impairment losses on:
+Loans and advances to customers
+(73,050)
+(13,088)
+(86,138)
+Others
+(83)
+(1,004)
+(669)
+(1,756)
+Operating profit/(loss)
+164,833
+131,327
+24,862
+227
+4,662
+(403)
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expenses arising on internal fund transfer are referred to
+as "internal net interest income/expense". Net interest income and expenses relating to third parties are referred to as
+"external net interest income/expense".
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Year ended 31 December 2016
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Others
+External net interest income
+242,432
+30,433
+198,981
+Total
+471,846
+Internal net interest (expense)/income
+(13,456)
+142,221
+(128,765)
+Net fee and commission income
+79,012
+65,882
+79
+144,973
+Other income/(expense), net (i)
+6,410
+14,193
+2015
+2016
+Due to customers
+•
+Objective evidence of impairment losses on a collective basis consists of observable data indicating a measurable decrease in
+the estimated future cash flows from a portfolio of loans since the initial recognition of those loans, including:
+For the purpose of collective assessment, assets are grouped on the basis of similar credit risk characteristics that are
+indicative of the debtors' ability to pay all amounts due according to the contractual terms.
+All loans for which no impairment can be identified individually, either due to the absence of any loss events or due to
+an inability to measure reliably the impact of potential loss events on future cash flows.
+.
+•
+Loans that are assessed for impairment losses on a collective basis include the following:
+Homogeneous groups of loans, including all personal loans; and
+Collectively assessed loans
+It may not be possible to identify a single, discrete event that caused the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+The timing of the expected cash flows.
+•
+The availability of other financial support and the realisable value of collateral; and
+•
+Projected receipts and the expected payout should bankruptcy ensue;
+•
+The borrower's ability to improve performance once a financial difficulty has arisen;
+.
+The sustainability of the counterparty's business plan;
+•
+If there is objective evidence that an impairment loss on a loan or advance has incurred on an individual basis, the amount of
+the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash
+flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying
+amount. The impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual
+basis, the following factors are considered:
+(a) Credit risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+226
+Adverse changes in the payment status of borrowers in the group of loans; and
+All corporate loans and discounted bills are individually reviewed for objective evidence of impairment and classified based
+on a five-tier classification system. Corporate loans and discounted bills that are classified as substandard, doubtful or loss
+are assessed individually for impairment.
+.
+Homogenous groups of loans not considered individually significant
+ICBC
+228
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+Although collateral can be an important mitigation of credit risk, the Group grants loans based on the assessment of the
+borrowers' ability to meet obligations out of their cash flow, instead of the value of collateral. The necessity of a collateral
+is dependent on the nature of the loan. In the event of default, the Group might sell the collateral for repayment. The fair
+value of collateral of past due but not impaired loans and impaired loans are disclosed in note 54(a)(iii).
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Retail loans are mainly collateralised by residential properties. As at 31 December 2016, the carrying value of retail loans
+covered by collateral amounted to RMB4, 196,169 million (31 December 2015: RMB3,541,862 million), of which credit
+exposure of retail loans covered by collateral amounted to RMB3,666,608 million (31 December 2015: RMB3,027,428
+million).
+Corporate loans are mainly collateralised by properties or other assets. As at 31 December 2016, the carrying value
+of corporate loans and discounted bills covered by collateral amounted to RMB8,860,677 million (31 December 2015:
+RMB8,391,604 million), of which credit exposure of corporate loans covered by collateral amounted to RMB3,771,915
+million (31 December 2015: RMB3,712,124 million).
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Fair value of collateral is shown in note 25.
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Collateral
+As soon as information that specifically identifies objective evidence of impairment on individual assets in a pool is available,
+those assets are excluded and individually assessed. Assets that are individually assessed for impairment and for which an
+impairment loss is or continues to be recognised are not included in a collective assessment for impairment.
+The current economic and credit environment and, whether these, in management's experience, indicate that the
+actual level of incurred but not yet identified losses is likely to be greater or less than that suggested by historical
+experience.
+•
+Historical loss experience in portfolios of similar risk characteristics; and
+•
+Individually assessed loans with no objective evidence of impairment are grouped together in portfolios of similar credit
+risk characteristics for the purpose of assessing a collective impairment loss. The collective impairment loss is assessed after
+taking into account:
+Individually assessed loans with no objective evidence of impairment
+(a) Credit risk (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+227
+Annual Report 2016
+For homogeneous groups of loans, the Group uses a collective assessment approach for impairment losses. The approach
+analyses historical trends of probability of default and the amount of the consequential loss, as well as evaluates current
+economic conditions that may have a consequential impact on inherent losses in the portfolio.
+National or local economic conditions that correlate with defaults on assets in the portfolio of loans.
+66,856
+Individually assessed loans
+Impairment assessment
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+2016
+2015
+Transactions during the year:
+360,675
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Interest rate ranges during the year are as follows:
+Due from banks and other financial institutions
+Loans and advances to customers
+Due to banks and other financial institutions
+Due to customers
+57
+163
+104
+552
+65
+%
+0 to 9.81
+1.77 to 2.11
+0 to 4.92
+0 to 0.30
+129
+%
+0 to 8.99
+1.61 to 2.69
+0 to 4.51
+0 to 0.45
+The major transactions between the Group and the associates and their affiliates mainly comprised due from banks and
+other financial institutions, loans and advances to customers and due to banks and other financial institutions and the
+corresponding interest income and interest expense. In the opinion of management, the transactions between the Group
+and the associates and their affiliates were conducted under normal commercial terms and conditions.
+(d) Joint ventures and affiliates
+Balances at end of the year:
+224
+The main considerations for the loan impairment assessment include whether any payments of principal or interest are
+overdue or whether there are any liquidity problems of counterparties, credit rating downgrades, or infringement of the
+original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed impairment
+and collectively assessed impairment.
+ICBC
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Credit risk is often greater when counterparties are concentrated in one single industry or geographical location or have
+comparable economic characteristics.
+Risk concentration
+The Group will normally sign an International Swaps and Derivatives Association ("ISDA") Master Agreement, a China
+Interbank Market Financial Derivatives Master Agreement ("NAFMII master agreement") with its counterparties for
+documenting over-the-counter derivative activities. Each of these master agreements provides the contractual framework
+within which derivative dealing activities are conducted. Under each of these master agreements, close-out netting shall be
+applied across all outstanding transactions covered by the agreement if either party defaults.
+In addition to the credit risk exposures on credit-related assets and amounts due from or lending to banks and other
+financial institutions, credit risk also arises in other areas. For instance, credit risk exposure also arises from derivative
+financial instruments which is, however, limited to those with positive fair values, as recorded in the statement of financial
+position. In addition, the Group also makes available to its customers' guarantees which may require the Group to make
+payments on their behalf. Such payments are collected from customers based on the terms of the agreements signed. They
+expose the Group to similar risks as loans and these are mitigated by the same control processes and policies.
+To enhance the credit risk management practices, the Group also launches training programs periodically for credit officers
+at different levels.
+Information management systems designed to enable a real time risk monitoring.
+Stringent qualification system for the loan approval officers; and
+•
+Risk management rules and procedures that focus on risk control throughout the entire credit business process,
+including customer investigation and credit rating, granting of credit limits, loan evaluation, loan review and approval,
+granting of loan and post-disbursement loan monitoring;
+Centralised credit management policies and procedures;
+.
+The principal features of the Group's credit risk management function include:
+Credit risk is the risk of loss arising from a borrower's or counterparty's inability to meet its obligations. Credit risk can also
+arise from operational failures that result in an unauthorised or inappropriate guarantee, commitment or investment of
+funds. The Group is exposed to credit risk primarily due to loans, guarantees and other credit related commitments.
+(a) Credit risk
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+225
+Annual Report 2016
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to both the corresponding risk management departments at the
+Head Office and management of the relevant branches.
+The Group has also assigned departments monitoring financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+A description and an analysis of the major risks faced by the Group are as follows:
+54. FINANCIAL INSTRUMENTS RISK MANAGEMENT
+Notes to the Financial Statements
+2,604
+2,604
+Profit before taxation
+64
+2,295
+Capital expenditure
+25,873
+20,045
+10,394
+1,189
+57,501
+As at 31 December 2015
+Segment assets
+8,427,930
+3,587,372
+10,075,355
+119,123
+22,209,780
+Including: Investments in associates and joint ventures
+Property and equipment
+24,185
+24,185
+89,197
+Other non-current assets (ii)
+18,472
+Segment liabilities
+9,073,983
+69,444
+7,148
+7,843,009
+35,629
+474
+30,156
+704
+14,560
+166,165
+121,212
+74,444
+(916)
+360,905
+Share of profits of associates and joint ventures
+2,330
+2,330
+Profit before taxation
+166,165
+121,212
+74,444
+1,414
+363,235
+Income tax expense
+(85,515)
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+277,720
+6,534
+5,109
+2,625
+292
+1,053
+Operating profit/(loss)
+224,426
+11,083
+ICBC
+222
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Mainland China (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+Central
+Western
+Northeastern
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+Overseas and
+others
+Eliminations
+Total
+External net interest income
+207,530
+44,617
+branches located outside Mainland China, domestic and overseas subsidiaries, and investments in
+associates and joint ventures.
+5,077
+including Liaoning, Heilongjiang, Jilin and Dalian.
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+41,780
+3,379,557
+112,712
+20,409,261
+Other segment information:
+Credit commitments
+1,759,175
+538,709
+2,297,884
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(ii) Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+(b) Geographical information
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane,
+Lima, Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh and Istanbul, etc.).
+The distribution of the geographical areas is as follows:
+Mainland China (Head Office and domestic branches):
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+Bohai Rim:
+Central China:
+Western China:
+Northeastern China:
+Overseas and others:
+the HO business division (including institutions directly controlled by the HO and their offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+21,868
+(971)
+(202)
+Segment assets
+8,914,597
+4,245,097
+10,840,773
+136,798
+24,137,265
+Including: Investments in associates and joint ventures
+30,077
+30,077
+Property and equipment
+Other non-current assets (ii)
+99,810
+19,817
+Segment liabilities
+10,088,166
+79,878
+7,189
+8,376,975
+39,045
+27,476
+246,209
+4,547
+11,390
+42,943
+3,536,514
+154,447
+22,156,102
+Other segment information:
+As at 31 December 2016
+Credit commitments
+55,384
+9,716
+164,833
+131,327
+66,856
+263
+363,279
+Income tax expense
+(84,173)
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+279,106
+6,535
+5,254
+2,578
+293
+14,660
+948
+657
+397
+57
+2,059
+Capital expenditure
+24,779
+19,758
+1,131
+(568)
+2,130,964
+2,778,412
+143,391
+Other income, net (i)
+6,179
+15
+5,519
+5,762
+17,475
+Operating income
+325,914
+244,445
+92,612
+5,762
+668,733
+Operating expenses
+(95,797)
+(100,962)
+(6,110)
+(220,835)
+Impairment losses on:
+Loans and advances to customers
+(63,752)
+(22,270)
+(86,022)
+Others
+(200)
+471
+647,448
+64,709
+Net fee and commission income
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(ii)
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+Annual Report 2016
+221
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2015
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Others
+Total
+External net interest income
+287,137
+26,963
+193,767
+507,867
+Internal net interest (expense)/income
+(45,613)
+152,758
+(107,145)
+78,211
+(2,341)
+Bohai
+2,297,884
+263,163
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+19
+50
+12
+901
+206,282
+Derivative financial assets
+18,916
+2,746
+1,347
+1,726
+204,917
+238
+843
+7,268
+33,290
+Reverse repurchase agreements
+792,876
+792,876
+Loans and advances to customers
+472,341
+2,237,047
+1,513,330
+206
+42
+64
+277
+16,509
+30,432
+22,002
+and others
+71,382
+Total
+2,909,988
+Due from banks and
+other financial institutions
+526,428
+4,265
+5,133
+21,434
+1,763
+949
+555
+212,041
+772,568
+Financial assets held for trading
+115,855
+95
+115,950
+Financial assets designated at fair value
+through profit or loss
+1,977,195
+84,112
+1,636,115
+654,867
+19,189
+20,394
+2,642
+53,182
+1,296,903
+Others
+136,668
+19,021
+10,966
+20,274
+237,336
+11,813
+3,177
+4,776
+219,948
+Credit commitments
+Total maximum credit risk exposure
+8,459,693
+558,584
+9,018,277
+2,427,147
+412,366
+2,839,513
+1,659,795
+268,690
+1,928,485
+2,566,066
+432,707
+2,998,773
+1,701,750
+155,694
+1,857,444
+13,253
+34,253
+54,154
+875,753
+405,176
+11,026,476
+Financial investments
+- Receivables
+327,410
+635
+484
+5,508
+4,260
+302
+240
+338,839
+-Held-to-maturity investments
+2,647,078
+42,541
+21,454
+13,469
+11,844
+28,973
+9,607
+38,125
+2,813,091
+-Available-for-sale financial assets
+2,130,405
+2,224,964
+China
+China
+Financial investments
+- Receivables
+255,701
+153
+494
+2,756
+3,800
+312
+240
+263,456
+12,033,200
+-Held-to-maturity investments
+35,640
+17,402
+16,551
+27,706
+39,190
+9,607
+44,072
+2,876,081
+-Available-for-sale financial assets
+1,084,057
+2,685,913
+572,980
+691,375
+2,264,366
+46
+917
+272,118
+Derivative financial assets
+47,920
+3,107
+2,255
+1,634
+178
+640
+416
+6,742
+62,892
+Reverse repurchase agreements
+501,776
+520
+502,296
+Loans and advances to customers
+534,225
+2,362,003
+1,704,380
+2,120,405
+1,783,466
+51,435
+China
+29,902
+20,845
+497,717
+3,240,626
+168,277
+253,367
+69,844
+2,042,613
+2,629,746
+786,600
+31 December 2015
+Yangtze
+North
+22,068,516
+Head
+River Pearl River
+Delta
+Central
+Western
+eastern
+Overseas
+Balances with central banks
+2,546,091
+66,674
+Delta
+72,786
+Bohai Rim
+Office
+716,756
+2,376,379
+1,874,336
+26,833
+2,408
+89,157
+1,532,327
+Others
+170,667
+15,449
+13,374
+18,327
+13,000
+14,371
+3,130
+4,626
+252,944
+Credit commitments
+Total maximum credit risk exposure
+8,922,323
+664,711
+9,587,034
+2,525,882
+454,359
+2,980,241
+1,823,977
+329,705
+2,153,682
+1,085,954
+275,895 2,713,875
+1,361,849 24,782,391
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+2,742,909
+227,690
+693,945
+792,851
+20,526,211
+232
+ICBC
+(a) Credit risk (continued)
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Neither past due nor impaired
+The balance of loans and advances to customers of the Group and the Bank that are neither past due nor impaired analysed
+by five-tier classification and by collateral are as follows:
+Group
+2016
+Pass
+11,026,476
+Special
+mention
+Pass
+2015
+Special
+mention
+Total
+Unsecured loans
+3,445,069
+Guaranteed loans
+1,676,309
+Loans secured by mortgages
+5,561,633
+Pledged loans
+Total
+(272,556)
+11,299,032
+173,857
+522,052
+11,933,466
+708,339
+12,312,810
+511,707
+11,299,032
+(iii) Loans and advances to customers
+The total credit risk exposures of loans and advances to customers are summarised as follows:
+Group
+Bank
+2016
+2015
+2016
+2015
+Neither past due nor impaired
+Past due but not impaired
+Impaired
+12,706,016
+139,029
+211,801
+13,056,846
+Less: Allowance for impairment losses
+(289,512)
+12,767,334
+11,599,446
+154,502
+179,518
+11,933,466
+(280,654)
+11,652,812
+11,980,647
+127,030
+205,133
+12,312,810
+(279,610)
+12,033,200
+10,979,700
+145,475
+1,570,704
+719,993
+13,056,846
+12,253,715
+3,209,224
+loans
+Total
+Corporate
+loans and
+advances
+Personal
+loans
+Total
+Past due for:
+Less than one month
+57,540
+17,324
+74,864
+advances
+68,926
+84,839
+One to two months
+13,414
+7,437
+20,851
+22,052
+7,870
+29,922
+Two to three months
+33,458
+15,913
+Personal
+Corporate
+loans and
+2015
+38,155 3,247,379
+119,735 1,545,605
+189,839 5,321,025
+31,306 1,485,437
+379,035 11,599,446
+Bank
+2016
+Pass
+Special
+mention
+Total
+Pass
+2015
+Special
+mention
+Total
+Unsecured loans
+3,376,134
+Guaranteed loans
+1,554,106
+Loans secured by mortgages
+5,092,031
+Pledged loans
+1,521,499
+11,543,770
+58,996 3,435,130 3,135,856
+136,101 1,690,207 1,352,375
+215,490 5,307,521 4,701,956
+26,290 1,547,789 1,419,713
+436,877 11,980,647 10,609,900
+36,398 3,172,254
+118,830 1,471,205
+184,160 4,886,116
+30,412 1,450,125
+369,800 10,979,700
+Past due but not impaired
+The following tables present the ageing analysis of each type of loans and advances to customers of the Group and the Bank
+that are subject to credit risk which are past due but not impaired as at the end of the reporting period:
+Group
+2016
+60,195 3,505,264
+137,312 1,813,621 1,425,870
+227,619 5,789,252 5,131,186
+27,175 1,597,879 1,454,131
+452,301 12,706,016 11,220,411
+Total for loans and advances to customers
+Discounted bills
+3,471,539
+Manufacturing
+1,550,544
+1,603,631
+1,487,718
+1,527,906
+Production and supply of electricity,
+heating, gas and water
+891,870
+835,616
+860,182
+1,458,156
+799,646
+Wholesale and retail
+Real estate
+828,686
+724,246
+792,786
+696,444
+776,739
+866,779
+723,799
+821,903
+Leasing and commercial services
+1,553,297
+1,551,248
+1,640,498
+211,347
+57,204
+192,852
+2,289,444
+2,436,311
+751,149
+985,703 22,815,655
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+Annual Report 2016
+231
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+By industry distribution
+The credit risk exposures of the Group mainly comprise loans and advances to customers and investments in securities.
+Details of the composition of the Group's investments in debt securities are set out in note 54(a)(iv) to the financial
+statements. The composition of the Group's and of the Bank's gross loans and advances to customers by industry is analysed
+as follows:
+Group
+Bank
+2016
+2015
+2016
+2015
+Transportation, storage and postal services
+642,423
+562,917
+495,609
+453,665
+397,951
+409,583
+320,923
+326,232
+Subtotal for corporate loans
+8,140,684
+7,869,552
+7,496,031
+7,315,786
+Personal mortgage and business loans
+3,497,110
+2,811,288
+3,435,078
+2,758,696
+Others
+699,059
+730,574
+673,362
+712,843
+Subtotal for personal loans
+4,196,169
+3,541,862
+4,108,440
+Others
+205
+128,682
+137,497
+Water, environment and
+public utility management
+536,718
+472,791
+520,598
+463,172
+Mining
+274,273
+280,556
+244,543
+261,988
+Finance
+251,733
+198,069
+173,701
+164,422
+Construction
+212,450
+226,619
+195,771
+213,570
+Science, education, culture and sanitation
+136,799
+127,104
+193
+270,197
+9,856
+182
+270,197
+193
+Derivative financial assets
+40,803
+3,107
+2,255
+1,634
+178
+2015
+259
+205
+13,943
+285,144
+640
+416
+45,419
+94,452
+Reverse repurchase agreements
+483,320
+272,307
+755,627
+46
+119
+through profit or loss
+Financial assets designated at fair value
+44,528
+50,706
+84,806
+23,158
+29,242
+9,372
+164,213
+3,266,216
+Due from banks and
+other financial institutions
+529,573
+11,524
+1,347
+449
+1,970
+1,089
+162
+251,359
+797,473
+Financial assets held for trading
+135,775
+47,540
+183,315
+Loans and advances to customers
+2,860,191
+534,225
+1,704,380
+- Available-for-sale financial assets
+1,083,560
+51,435
+29,902
+227,690
+20,845
+26,833
+2,408
+286,761
+1,729,434
+2,973,042
+Others
+15,449
+13,374
+18,327
+13,000
+14,371
+3,130
+67,478
+315,725
+8,752,705
+2,523,398
+170,596
+148,504
+9,607
+39,190
+2,112,523
+1,783,466
+2,264,366
+691,375
+1,315,696
+12,767,334
+Financial investments
+- Receivables
+236,101
+153
+494
+2,756
+3,800
+312
+240
+47,514
+291,370
+-Held-to-maturity investments
+2,678,442
+35,640
+17,402
+16,551
+27,706
+2,361,303
+Balances with central banks
+Total
+and others
+285,144
+210,434
+272,118
+206,282
+Derivative financial assets
+94,452
+78,870
+62,892
+33,290
+Reverse repurchase agreements
+through profit or loss
+Loans and advances to customers
+12,767,334
+996,333
+11,652,812
+502,296
+792,876
+12,033,200
+11,026,476
+Financial investments
+Receivables
+291,370
+352,143
+755,627
+Financial assets designated at fair value
+115,950
+135,775
+(a) Credit risk (continued)
+(i) Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+As at the end of the reporting period, the maximum credit risk exposure of the Group and of the Bank without taking
+account of any collateral and other credit enhancements is set out below:
+Group
+Bank
+2016
+2015
+2016
+2015
+Balances with central banks
+3,266,216
+2,974,407
+3,209,722
+2,909,988
+Due from banks and other financial
+institutions
+797,473
+683,793
+927,705
+772,568
+Financial assets held for trading
+183,315
+132,465
+263,456
+Held-to-maturity investments
+2,973,042
+2,870,353
+229
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+By geographical distribution
+The following tables set out the breakdown of the Group's and the Bank's maximum credit risk exposure without taking
+account of any collateral and other credit enhancements, as categorised by geographical distribution:
+Group
+31 December 2016
+Yangtze
+North
+Head
+Office
+River Pearl River
+Delta
+Central
+Western
+eastern
+Overseas
+Delta
+Bohai Rim
+China
+China
+China
+Annual Report 2016
+1,820,042
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+22,815,655
+2,876,081
+338,839
+2,813,091
+― Available-for-sale financial assets
+Others
+1,729,434
+1,430,266
+1,532,327
+1,296,903
+315,725
+272,777
+252,944
+219,948
+23,459,132
+21,654,653
+22,068,516
+20,526,211
+Credit commitments
+Total maximum credit risk exposure
+2,778,412
+26,237,544
+2,297,884
+2,713,875
+2,289,444
+23,952,537
+24,782,391
+(ii) Risk concentrations
+Notes to the Financial Statements
+2,734,933
+2,376,248
+272,777
+8,335,564
+2,427,092
+Credit commitments
+Total maximum credit risk exposure
+558,184
+8,893,748
+398,045
+2,825,137
+1,655,254
+250,410
+1,905,664
+2,559,122
+415,973
+2,975,095
+1,701,458
+57,630
+2,224,317
+2,058,094 21,654,653
+149,897
+207,604
+1,851,355
+2,431,921
+54,608
+748,360
+263,163
+2,321,257 23,952,537
+2,297,884
+The compositions of each geographical distribution above are set out in note 53(b).
+230
+693,752
+3,177
+13,253
+11,813
+42,541
+21,454
+13,469
+11,844
+28,973
+9,607
+99,122
+2,870,353
+- Available-for-sale financial assets
+875,753
+54,154
+34,253
+237,336
+19,189
+20,394
+2,642
+186,545
+1,430,266
+Others
+136,643
+19,021
+10,966
+20,274
+ICBC
+2,643,343
+(a)
+Bank
+29,242
+9,372
+107,719
+3,209,722
+Due from banks and
+other financial institutions
+645,979
+13,308
+5,282
+543
+23,158
+1,990
+162
+259,221
+927,705
+Financial assets held for trading
+135,775
+135,775
+Financial assets designated at fair value
+through profit or loss
+119
+259
+1,220
+84,806
+50,706
+44,528
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Yangtze
+North
+Head
+River
+Pearl River
+Central
+Western
+eastern
+Overseas
+Office
+Delta
+Delta
+Bohai Rim
+China
+China
+China
+and others
+Total
+Balances with central banks
+2,860,191
+Credit risk (continued)
+-Held-to-maturity investments
+352,143
+13,304
+Central
+Western
+eastern
+Delta
+Bohai Rim
+China
+China
+China
+Overseas
+and others
+72,786
+Pearl River
+84,112
+30,432
+22,002
+135,801
+Total
+2,974,407
+Due from banks and
+other financial institutions
+411,713
+4,210
+592
+21,413
+16,509
+Yangtze
+River Delta
+66,674
+2,546,091
+Balances with central banks
+716,756
+2,660,734
+23,459,132
+Credit commitments
+Total maximum credit risk exposure
+662,510
+9,415,215
+441,169
+2,964,567
+314,846
+2,134,888
+485,726
+3,220,659
+158,583
+249,912
+67,703
+397,963
+2,778,412
+2,032,899
+2,626,160
+784,459
+3,058,697
+26,237,544
+The compositions of each geographical distribution above are set out in note 53(b).
+31 December 2015
+North
+Head
+Office
+1,471
+1,256
+362
+242,776
+Reverse repurchase agreements
+788,380
+207,953
+996,333
+Loans and advances to customers
+472,341
+2,237,047
+1,513,330
+1,970,272
+1,636,115
+2,129,451
+654,867
+1,039,389
+11,652,812
+Financial investments
+- Receivables
+327,410
+635
+484
+5,508
+4,260
+302
+240
+78,870
+1,874,316
+54,006
+206
+683,793
+Financial assets held for trading
+115,855
+95
+16,515
+132,465
+Financial assets designated at fair value
+through profit or loss
+277
+64
+42
+204,917
+19
+50
+12
+5,053
+210,434
+Derivative financial assets
+17,758
+2,746
+1,347
+1,726
+238
+843
+182
+ICBC
+9,642
+1,593,183
+12,853
+5,006,699
+Investments in associates and joint ventures
+30,077
+30,077
+Property and equipment
+246,209
+246,209
+Others
+2,534,397
+377,080
+28,506
+Total assets
+1,035,584
+1,911,679
+1,311,953
+53,039
+3,903,389
+33,428
+5,829,888
+35,983
+6,810,136
+41,900
+614,131
+44,195
+610,237
+185,303
+70,726
+36,078
+205,253
+23,791
+4,108
+285,144
+Derivative financial assets
+254
+14,989
+20,320
+39,732
+14,489
+4,668
+94,452
+Loans and advances to customers
+62,087
+874,345
+774,633
+2,785,447
+2,970,082
+5,144,336
+156,404
+12,767,334
+Financial investments
+3,334,636
+14,260
+24,137,265
+Due to central banks
+2,606,105
+Certificates of deposit
+29,968
+67,031
+103,774
+17,201
+453
+218,427
+Due to customers
+9,783,195
+51,580
+859,223
+3,705,472
+2,185,850
+5,362
+17,825,302
+Debt securities issued
+6,006
+8,318
+13,953
+136,514
+193,146
+1,286,200
+24,320
+239,314
+191,175
+118
+427
+545
+Financial liabilities designated at fair value
+through profit or loss
+59,279
+75,000
+168,142
+46,949
+15,144
+2,238
+366,752
+Derivative financial liabilities
+409
+10,099
+21,143
+36,924
+15,687
+5,698
+89,960
+Due to banks and other financial institutions (**)
+1,283,492
+816,224
+Liabilities:
+206
+1,448
+through profit or loss
+Less: Individual allowance for
+impairment losses
+Subtotal
+Total
+(*)
+107
+107
+24
+107
+131
+Corporate entities
+(24)
+(70)
+61
+61
+314,159
+2,813,091
+1,296,903
+115,950
+22,009
+4,562,112
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Bank considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Bank as security of the impaired debt securities.
+(46)
+24
+24
+Banks and other financial institutions
+404,528
+33,127
+10,028
+500,073
+Subtotal
+314,159
+2,813,094
+1,296,842
+115,950
+22,009
+4,562,054
+Less: Collective allowance for
+impairment losses
+(3)
+(3)
+Subtotal
+314,159
+2,813,091
+1,296,842
+115,950
+22,009
+4,562,051
+Impaired (*)
+236
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+11,639
+18,517
+47,281
+2,837,069
+3,350,788
+Due from banks and
+other financial institutions (*)
+158,433
+849,479
+244,926
+228,917
+71,304
+41
+1,553,100
+Financial assets held for trading
+46,100
+25,488
+102,658
+935
+8,134
+6,016
+189,331
+Financial assets designated at fair value
+436,282
+357,937
+Cash and balances with central banks
+Total
+(b) Liquidity risk
+Liquidity risk is the risk that funds will not be sufficient or will not be raised at a reasonable cost in a timely manner to meet
+the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+•
+•
+•
+optimising the structure of assets and liabilities;
+maintaining the stability of the deposit base;
+projecting cash flows and evaluating the level of current assets; and
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+(i) Analysis of the remaining maturity of the assets and liabilities
+The Group and the Bank's expected remaining maturity of its financial instruments may vary significantly from the following
+analysis. For example, demand deposits from customers are expected to maintain a stable or increasing balance although
+they have been classified as repayable on demand in the following tables.
+Group
+31 December 2016
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+One to five
+years
+More than
+five years
+Undated
+(***)
+Assets:
+11,818
+Others
+300,535
+59,151
+81,382
+122,790
+22,124
+17,267
+1,213
+303,927
+Derivative financial liabilities
+512
+11,467
+through profit or loss
+12,890
+17,170
+6,232
+76,826
+Due to banks and other financial institutions (**)
+1,541,535
+590,578
+178,260
+210,401
+45,149
+37,128
+28,555
+Financial liabilities designated at fair value
+210
+160
+224,426
+Others
+270,430
+51,295
+9,188
+53,048
+23,629
+33,018
+39,157
+479,765
+Total assets
+1,018,365
+2,021,133
+1,153,259
+4,099,861
+5,485,073
+5,387,465
+3,044,624
+22,209,780
+Liabilities:
+Due to central banks
+20
+30
+2,603,051
+224,426
+Certificates of deposit
+53,158
+653,334
+10,404,186
+1,698,538
+1,694,145
+4,073,614
+2,288,046
+250,732
+20,409,261
+Net liquidity gap
+(9,385,821)
+6,896
+322,595
+26,247
+3,197,027
+5,136,733
+3,044,624
+1,800,519
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+238
+(540,886)
+64,250
+143,495
+73,697
+77,938
+16,234
+443
+183,352
+Due to customers
+8,515,746
+891,898
+1,241,541
+3,574,017
+2,055,662
+3,075
+16,281,939
+Debt securities issued
+9,880
+11,789
+17,054
+72,154
+195,745
+306,622
+Others
+Total liabilities
+287,242
+77,754
+35,579
+Property and equipment
+24,185
+24,185
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+31 December 2015
+Assets:
+Cash and balances with central banks
+Due from banks and
+Overdue/
+repayable
+One to
+Three
+Less than
+Notes to the Financial Statements
+three
+One to
+on demand
+one month
+months
+one year
+five years
+More than
+five years
+Undated
+(***)
+Total
+months to
+237
+Annual Report 2016
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+72,155
+60,357
+11,426,910
+1,868,675
+1,802,366
+Net liquidity gap
+(10,391,326)
+43,004
+(490,413)
+135,012
+4,281,516
+(378,127)
+70,885
+52,130
+691,074
+2,466,028
+310,607
+22,156,102
+3,363,860
+6,499,529
+3,334,636
+1,981,163
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+471,606
+2,588,027
+3,059,633
+other financial institutions (*)
+12,841
+31,758
+18,134
+4,340
+78,870
+Loans and advances to customers
+68,278
+755,892
+739,152
+2,918,622
+2,881,766
+4,139,152
+149,950
+11,652,812
+Financial investments
+97,632
+207,490
+808,375
+2,344,194
+1,194,931
+14,069
+4,666,691
+Investments in associates and joint ventures
+11,116
+Total liabilities
+681
+210,434
+Financial assets held for trading
+206,836
+1,091,447
+197,090
+30,904
+41
+1,680,126
+12,700
+24,030
+81,757
+11,660
+2,318
+373
+132,838
+Financial assets designated at fair value
+through profit or loss
+534
+1,051
+6,750
+9,211
+174,786
+13,665
+4,437
+Derivative financial assets
+30,099
+40,572
+602,198
+141,405
+10,938
+2,212
+178,991
+Banks and other financial institutions
+134,579
+47,724
+369,938
+107,963
+21,277
+22,236
+681,481
+22,386
+35,329
+329,358
+45,678
+6,808
+439,559
+Subtotal
+244,165
+2,973,055
+1,720,560
+Corporate entities
+2,200
+Public sector entities
+1,319,450
+Receivables
+Held-to-
+maturity
+investments
+Available-
+for-sale
+financial
+Financial
+assets held
+Financial
+assets
+designated
+at fair value
+through
+assets
+for trading
+profit or loss
+Total
+Neither past due nor impaired
+Governments and central banks
+85,000
+1,897,917
+545,382
+14,188
+2,542,487
+Policy banks
+969,849
+334,477
+4,548
+10,576
+183,315
+31 December 2016
+40,873
+Less: Collective allowance for
+(451)
+70
+70
+244,165
+2,973,042
+1,720,630
+183,315
+40,873
+5,162,025
+31 December 2015
+(357)
+Financial
+assets
+designated
+Held-to-
+maturity
+Receivables investments
+for-sale
+financial
+assets
+Financial
+assets held
+for trading
+at fair value
+through
+profit or loss
+Total
+Neither past due nor impaired
+Governments and central banks
+Policy banks
+Available-
+(94)
+Total
+Subtotal
+impairment losses
+(13)
+(13)
+Subtotal
+244,165
+2,973,042
+1,720,560
+183,315
+40,873
+5,161,955
+Impaired (*)
+Banks and other financial institutions
+Corporate entities
+Less: Individual allowance for
+8$
+68
+68
+26
+427
+453
+427
+521
+impairment losses
+5,161,968
+Group
+The following tables present an analysis of the Group's total credit risk exposures of debt securities by types of issuers and
+investments:
+The credit risk of debt securities mainly arises from the risk that the issuer might default on a payment or go into liquidation.
+Debt securities by different types of issuers are generally subject to different degrees of credit risk.
+loans and
+Personal
+advances
+loans
+Total
+advances
+loans
+Total
+Past due for:
+Less than one month
+Personal
+48,816
+63,778
+62,514
+15,138
+77,652
+One to two months
+12,988
+7,237
+20,225
+21,964
+7,544
+14,962
+loans and
+Corporate
+Corporate
+39,741
+Total
+104,412
+34,617
+139,029
+121,077
+33,425
+154,502
+Fair value of collateral held
+103,327
+67,707
+171,034
+118,814
+65,453
+184,267
+Annual Report 2016
+233
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+Bank
+2016
+2015
+29,508
+Two to three months
+33,267
+9,760
+2015
+2016
+2015
+Renegotiated loans and advances to
+customers
+5,541
+4,557
+5,052
+4,441
+Including: Impaired loans and advances to
+customers included in above
+2,085
+1,942
+1,652
+1,905
+Collateral repossessed
+During the year, the Group took possession of collateral held as security with a carrying amount of RMB2, 106 million (2015:
+RMB3,690 million). Such collateral mainly comprises land and buildings, equipment and others.
+234
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+(iv) Debt securities
+2016
+85,000
+15,090
+Bank
+The carrying amount of renegotiated loans and advances to customers is as follows:
+43,027
+28,699
+9,616
+38,315
+Total
+95,071
+31,959
+127,030
+113,177
+32,298
+145,475
+Fair value of collateral held
+99,153
+65,137
+164,290
+116,546
+63,324
+179,870
+Impaired
+Impaired loans and advances are defined as those loans and advances having objective evidence of impairment as a result of
+one or more events that occured after initial recognition and that event has an impact on the estimated future cash flows
+of loans and advances that can be reliably estimated. These loans and advances include corporate loans and personal loans
+which are graded as "Substandard", "Doubtful" or "Loss".
+The fair values of collateral that the Group and the Bank hold relating to loans individually determined to be impaired as
+at 31 December 2016 amounted to RMB42,046 million (31 December 2015: RMB43,771 million) and RMB40,477 million
+(31 December 2015: RMB42,196 million), respectively. The collateral mainly consists of land and buildings, equipment and
+others.
+Renegotiated loans and advances to customers
+The Group has formulated a set of loan restructuring policies to renegotiate the contractual terms with customers, to
+maximise the collectability of loans and to manage customer relationships.
+Group
+Corporate entities
+1,639,828
+5,512
+(13)
+Subtotal
+246,766
+2,876,081
+1,532,257
+135,774
+40,601
+4,831,479
+Impaired (*)
+Corporate entities
+(13)
+26
+221
+26
+195
+221
+Less: Individual allowance for
+impairment losses
+(26)
+(125)
+(151)
+Subtotal
+195
+impairment losses
+Less: Collective allowance for
+4,831,492
+1,207
+2,212
+163,105
+Banks and other financial institutions
+137,180
+45,435
+314,156
+103,133
+21,277
+621,181
+Corporate entities
+22,386
+7,525
+297,021
+22,521
+6,536
+355,989
+Subtotal
+246,766
+2,876,094
+1,532,257
+135,774
+40,601
+Total
+137,463
+70
+246,766
+842
+1,846,599
+Policy banks
+15,090
+1,149,092
+323,325
+1,609
+9,970
+1,499,086
+Public sector entities
+153,413
+1,500
+90,748
+4,272
+907
+114,098
+Banks and other financial institutions
+171,997
+28,169
+324,828
+76,100
+1,104
+16,671
+1,607,344
+85,000
+Governments and central banks
+2,876,081
+1,532,327
+135,774
+40,601
+4,831,549
+31 December 2015
+Financial
+Available-
+Held-to-
+for-sale
+Receivables
+maturity
+investments
+financial
+Financial
+assets held
+assets
+designated
+at fair value
+through
+assets
+for trading
+profit or loss
+Total
+Neither past due nor impaired
+70
+20,023
+2,200
+Public sector entities
+314,159
+2,870,356
+1,402,532
+132,465
+22,224
+4,741,736
+Less: Collective allowance for
+impairment losses
+(3)
+Subtotal
+Subtotal
+314,159
+1,402,532
+132,465
+22,224
+4,741,733
+Impaired (*)
+Banks and other financial institutions
+92
+92
+Corporate entities
+Less: Individual allowance for
+2,870,353
+563,828
+10,208
+38,635
+1,910,099
+1,159,165
+327,141
+1,726
+9,970
+1,513,092
+Public sector entities
+1,500
+17,726
+93,269
+4,272
+907
+117,674
+Banks and other financial institutions
+Corporate entities
+171,997
+21,393
+360,194
+82,320
+1,139
+637,043
+40,572
+32,244
+442,169
+impairment losses
+Subtotal
+Total
+(*)
+for-sale
+maturity
+financial
+Financial
+assets held
+through
+Receivables investments
+assets
+for trading
+profit or loss
+Total
+Neither past due nor impaired
+Governments and central banks
+85,000
+1,859,025
+508,190
+7,818
+2,460,033
+Policy banks
+944,086
+275,427
+1,095
+10,576
+1,231,184
+Held-to-
+179,759
+designated
+at fair value
+Available-
+434
+434
+92
+434
+526
+(92)
+(293)
+(385)
+314,159
+2,870,353
+141
+1,402,673
+141
+132,465
+22,224
+4,741,874
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Group considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Group as security of the impaired debt securities.
+Annual Report 2016
+235
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+Bank
+31 December 2016
+Financial
+assets
+43,314
+153,808
+74,923
+Effect on
+Effect on
+net interest
+Effect on
+Decreased by 100 basis points
+Increased by 100 basis points
+Effect on
+net interest
+2015
+Total
+Others
+HKD
+USD
+RMB
+Currency
+2016
+Bank
+(c) Market risk (continued)
+income
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+equity
+equity
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+436,282
+11,639
+22,347
+47,281
+2,837,069
+3,354,618
+Due from banks and other financial institutions (*)
+158,439
+851,293
+247,894
+(8,909)
+income
+Undated
+(***)
+Notes to the Financial Statements
+Annual Report 2016
+467
+Others
+8
+(139)
+(8)
+139
+HKD
+4,453
+178
+(4,450)
+(178)
+USD
+50,242
+8,885
+(46,604)
+(635)
+247
+(467)
+Total
+41,729
+Effect on
+equity
+income
+5,926
+Decreased by 100 basis points
+Effect on
+net interest
+Effect on
+equity
+(38,609)
+(5,926)
+income
+Effect on
+net interest
+Increased by 100 basis points
+Total
+2015
+55,338
+8,457
+(51,697)
+(8,457)
+635
+More than
+five years
+five years
+One to
+150,113
+Due to customers
+8,372,090
+765,431
+1,136,934
+3,476,619
+2,027,537
+3,062
+15,781,673
+Debt securities issued
+1,240
+Others
+219,042
+57,126
+Total liabilities
+443
+10,147,865
+15,264
+40,220
+8,404
+7,140
+14,665
+2,004
+931
+33,144
+Due to banks and other financial institutions (**)
+1,500,867
+424,289
+125,601
+160,226
+23,136
+2,234,119
+Certificates of deposit
+24,572
+69,614
+1,362,442
+Net liquidity gap
+(9,303,791)
+ICBC
+(b) Liquidity risk (continued)
+Group
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Overdue/
+repayable
+One to
+Three
+Less than
+three
+on demand
+one month
+months
+months to
+one year
+240
+The tables below summarise the maturity profile of the Group's and of the Bank's financial instruments based on the
+contractual undiscounted cash flows. The balances of some items in the tables below are different from the balances on
+the statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group
+and the Bank's expected cash flows on these instruments may vary significantly from the following analysis. For example,
+demand deposits from customers are expected to maintain a stable or increasing balance although they have been classified
+as repayable on demand in the following tables.
+Maturity analysis of contractual undiscounted cash flows
+(ii)
+523,880
+7,197
+69,291
+1,509,029
+(379,893)
+8,872
+139,405
+57,009
+3,891,083 2,179,640
+18,698 2,899,680
+38,850
+184,016
+240,175
+6,689
+equity
+548,562
+19,285,200
+2,998,444
+1,761,746
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+195,141
+5,004,728
+Derivative financial liabilities
+income
+Decreased by 100 basis points
+Effect on
+net interest
+557,562
+490,244
+249,381
+142,472
+712,885
+Total
+More than
+five years
+One to
+five years
+one year
+Three
+months to
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+2,713,875
+300,301
+136,900
+727,543
+2,289,444
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+Highest
+Average
+31 December 2016
+2016
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(i) VaR
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios as immaterial.
+Sensitivity analysis, interest rate repricing gap analysis and currency risk concentration analysis are the major market risk
+management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Bank adopts VaR analysis as the major tool for calculating and monitoring the market risk of trading
+portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the parent company
+and a sensitivity analysis based on the Group's interest rate risk exposure and currency risk exposure (both trading and non-
+trading portfolios).
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+245
+Annual Report 2016
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between the
+repricing dates of interest-generating assets and interest-bearing liabilities.
+(c) Market risk
+Lowest
+620,022
+91,832
+151,167
+719,327
+Credit commitments
+Total
+More than
+five years
+five years
+one year
+One to
+Three
+months to
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+2,778,412
+313,218
+760,743
+249,287
+225,685
+480,940
+142,591
+748,492
+Total
+More than
+five years
+One to
+five years
+one year
+Three
+months to
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+Credit commitments
+31 December 2015
+Credit commitments
+31 December 2016
+Bank
+2,297,884
+554,572
+Interest rate risk
+66
+58
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+246
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(3)
+(2)
+(1)
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+VaR.
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaR does not add up to the total portfolio
+60
+156
+(c) Market risk (continued)
+90
+(ii) Interest rate risk
+The Group manages its interest rate risk by:
+Effect on
+equity
+income
+(8,885)
+RMB
+Currency
+Increased by 100 basis points
+Effect on
+net interest
+Group
+2016
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming year,
+including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates on
+other comprehensive income, calculated by revaluing fixed rate available-for-sale financial assets held at year end, including
+the effect of any associated hedges.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held
+constant, of the Group's and the Bank's net interest income and equity.
+revenue.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+managing the deviation of the pricing of interest-generating assets and interest-bearing liabilities from the PBOC
+benchmark interest rates.
+optimising the differences in timing between contractual repricing (maturities) of interest-generating assets and
+interest-bearing liabilities; and
+•
+regularly monitoring the macroeconomic factors that may have impact on the PBOC benchmark interest rates;
+•
+The Group's interest rate risk mainly arises from the mismatches between the repricing dates of interest-generating assets
+and interest-bearing liabilities. The Group's interest-generating assets and interest-bearing liabilities are mainly denominated
+in RMB.
+81
+4
+41
+204
+258
+4
+54
+18
+12
+65
+325
+189
+240
+Total portfolio VaR
+Commodity risk
+Currency risk
+38
+76
+328
+76
+Interest rate risk
+Currency risk
+Commodity risk
+17
+13
+34
+141
+64
+63
+21
+Effect on
+72
+55
+Lowest
+Highest
+Average
+31 December 2015
+2015
+Total portfolio VaR
+46
+297,414
+15,840
+21,682
+1,749
+787
+62,892
+Loans and advances to customers
+49,222
+840,779
+725,987
+2,675,726
+2,682,913
+4,904,653
+153,920
+12,033,200
+Financial investments
+61,974
+168,848
+30,743
+580,312
+16,639
+Derivative financial assets
+77,676
+1,783
+838
+48,300
+184,074
+Financial assets designated at fair value
+through profit or loss
+1,297
+206
+14,260
+30,745
+201,682
+19,820
+4,108
+272,118
+12,974
+12,889
+2,334,396
+76,512
+506,530
+6,490,902
+3,372,603
+22,788,080
+Liabilities:
+Due to central banks
+379
+379
+Financial liabilities designated at fair value
+through profit or loss
+59,185
+74,912
+168,127
+36,092
+13,685
+29,883
+1,526,334
+34,468
+3,741,091
+4,748,376
+Investments in subsidiaries and associates
+136,530
+136,530
+Property and equipment
+124,089
+124,089
+Others
+319,652
+38,678
+8,739
+49,645
+Total assets
+850,439
+1,770,045 1,258,322
+25,465
+5,304,678
+42,588
+Financial assets held for trading
+1,430,001
+(44,804)
+347
+(185)
+(347)
+185
+(8,660)
+8
+186
+(8)
+(186)
+1,727
+(250)
+(1,726)
+250
+45,581
+8,909
+8,660
+(42,723)
+47,663
+Decreased by 100 basis points
+235,908
+248
+ICBC
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's and the Bank's current interest rate risk profile. This effect, however, does not incorporate
+actions that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+36,791
+equity
+6,348
+income
+Effect on
+equity
+(34,323)
+(6,348)
+income
+Total
+Effect on
+Effect on
+net interest
+Effect on
+net interest
+Increased by 100 basis points
+(b) Liquidity risk (continued)
+Bank
+31 December 2016
+One to
+five years
+More than
+five years
+Undated
+(***)
+Total
+2,799,261
+3,290,270
+other financial institutions (*)
+66,696
+761,207
+292,443
+248,963
+56,690
+4,002
+months to
+one year
+months
+month
+on demand
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Assets:
+Cash and balances with central banks
+Due from banks and
+413,572
+11,639
+352,001
+18,517
+Overdue/
+Less
+One to
+Three
+repayable
+than one
+three
+47,281
+Derivative financial liabilities
+8,762
+18,411
+13,665
+4,437
+206,282
+Derivative financial assets
+6,854
+5,689
+18,098
+1,897
+752
+33,290
+Loans and advances to customers
+65,032
+731,234
+708,366
+2,785,871 2,616,127
+170,851
+3,973,504
+8,994
+1,051
+five years
+More than
+five years
+Undated
+(***)
+Total
+2,553,024
+1,565,444
+115,950
+20,299
+2,118
+1,844
+796
+Financial assets designated at fair value
+through profit or loss
+534
+6,750
+146,342
+11,026,476
+Financial investments
+1,129,136
+51,224
+3,909,781
+22,751
+5,079,320
+32,679
+27,437
+391,910
+5,199,869
+2,998,444
+21,046,946
+Liabilities:
+Financial liabilities designated at fair value
+through profit or loss
+55,866
+81,380
+122,646
+1,886,322
+844,074
+Total assets
+7,730
+84,014
+197,508
+745,343
+2,245,551
+1,176,355
+2,227
+4,450,998
+one year
+Investments in subsidiaries and associates
+135,308
+Property and equipment
+129,669
+129,669
+Others
+211,640
+38,449
+135,308
+611,356
+months
+on demand
+9,603,296
+724,528
+1,154,911
+3,591,901
+2,155,589
+5,362
+17,235,587
+Debt securities issued
+Others
+Total liabilities
+Net liquidity gap
+(10,284,864)
+3,308
+1,042
+226,524
+59,374
+53,285
+11,135,303 1,542,494 1,593,317
+227,551 (334,995)
+10,832
+128,418
+58,133
+4,078,089 2,331,863 197,085
+(336,998) 2,972,815 6,293,817
+80,530
+Due to customers
+183,734
+194,503
+16,936
+27,813
+2,210
+983
+58,179
+Due to banks and other financial institutions (**)
+1,246,298
+644,608
+141,150
+189,312
+4,401
+2,225,769
+Certificates of deposit
+27,002
+56,391
+93,721
+453
+279,446
+6,553
+532,287
+179,239
+222,886
+Financial assets held for trading
+12,091
+23,854
+77,365
+Overdue/
+Less
+One to
+Three
+repayable
+than one
+three
+months to
+One to
+1,012,629
+128,273
+other financial institutions (*)
+438,595
+20,878,151
+3,372,603
+1,909,929
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+month
+Annual Report 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+31 December 2015
+Assets:
+Cash and balances with central banks
+Due from banks and
+239
+230,641
+2,991,619
+756,778
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2015
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+2,242 277,906
+2,844,939 25,975,994
+7,148,222
+508
+235,756 15,790,542
+14,104 4,801,113
+5,903,532
+1,225,527
+211,247
+Three
+months to
+one year
+4,437
+One to
+More than
+five years
+22,503
+123,294
+81,491
+59,200
+through profit or loss
+Financial liabilities designated at fair value
+211
+160
+31
+20
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+five years
+19,300
+13,689
+9,776
+3,407,083 4,481,120
+2,414,570
+5,815
+7,124,489
+4,916
+13,790
+83,231
+24,225
+12,729
+Financial assets held for trading
+1,692,809
+50
+34,250
+202,647
+155,711
+1,093,314
+206,837
+Due from banks and other financial institutions (*)
+3,063,113
+373
+174,944
+139,264
+through profit or loss
+212,512 835,939
+5,282
+7,374
+1,286,570 4,546,050
+2,054,345
+971,379
+33,767
+222,918
+Others
+98,461
+Financial investments
+878,558
+815,009
+69,484
+Loans and advances to customers (**)
+6,802
+1,065
+534
+Financial assets designated at fair value
+1,240
+307,028
+Due to banks and other financial institutions (*)
+37
+67
+(37)
+(105)
+557
+ICBC
+242
+Includes repurchase agreements.
+(*)
+- Cash outflow
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+20,229,097
+519
+323,782
+55,558 1,234,460
+(55,435) (1,235,452)
+(992)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+31 December 2016
+Bank
+(b) Liquidity risk (continued)
+3,632
+(1,141)
+2,790
+5,093
+(3,934,091)
+3,937,723
+35,759
+(36,900)
+267,045
+(264,255)
+1,592,386
+(1,587,293)
+752,515
+(754,756)
+(2,241)
+123
+2,353,304
+1,637,363 3,978,219
+10,313,633 1,622,796
+Due to customers
+186,841
+522
+17,207
+79,441
+53,905
+35,766
+Certificates of deposit
+2,613,633
+37,141
+47,487
+214,820
+180,183
+592,445
+1,541,557
+8,516,764
+893,282
+1,264,680 3,632,057
+2,128,421
+276,855
+30,908
+34,126
+3,387
+2,497
+405,868
+250,514
+2,588,027
+106,603
+12,784
+9,987
+9,825
+196,112
+Others
+Debt securities issued
+16,438,661
+3,457
+25,980
+3,480
+471,606
+Cash and balances with central banks
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+3,249 421,631
+3,127,194 28,893,629
+9,240,148
+7,738,564
+4,377,470
+1,430,599
+1,947,363
+1,032,291
+12,853 5,172,520
+1,642,179
+416
+6,614
+6,061
+31 December 2016
+4,295
+Overdue/
+repayable
+Less than
+one month
+59,943
+through profit or loss
+Financial liabilities designated at fair value
+546
+427
+119
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+One to
+three
+months
+on demand
+27,824
+373,172
+Others
+219
+1,448
+through profit or loss
+Financial assets designated at fair value
+199,626
+6,016
+13,085
+3,398
+105,143
+25,796
+46,188
+Financial assets held for trading
+1,568,507
+105,676
+50
+14,536
+36,907
+206,982
+24,149
+2,621,704
+632,463
+191,060
+72,261
+Financial investments
+17,888,378
+263,899
+Due to banks and other financial institutions (*)
+7,560,269
+3,313,707
+924,671
+937,939
+62,950
+Loans and advances to customers (**)
+288,349
+4,108
+4,824,943
+Overdue/
+repayable
+on demand
+1,283,844
+169,503
+Notes to the Financial Statements
+241
+Annual Report 2016
+Includes repurchase agreements.
+(*)
+(73)
+182
+115
+(181)
+(137)
+(52)
+4,046,269
+(4,022,871)
+171,304 17,675
+(166,880) (17,001)
+4,424
+674
+3,399
+1,009,201 1,107,223 1,724,950
+(1,005,076) (1,103,824) (1,714,270)
+10,680
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+4,125
+(b) Liquidity risk (continued)
+Overdue/
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+Undated
+One to More than
+five years
+five years
+months to
+one year
+months
+one month
+three
+Less than
+repayable
+on demand
+Three
+One to
+31 December 2015
+96
+15,916
+(15,820)
+- Cash outflow
+293,113
+11,428,173
+Others
+6,035
+Debt securities issued
+9,791,273
+Due to customers
+Certificates of deposit
+2,631,028
+68,179
+27,095
+192,176 242,106
+371,326
+2,277
+16,141
+48,348
+28,511
+8,894 4,237 5,340
+1,799,704 1,759,288 4,207,082
+30,075 67,511
+861,958 1,316,461 3,777,425
+9,400
+105,233
+17,590
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+22,094,768
+335,867
+10,383
+332,546
+75,114
+817,628
+13,900
+2,567,975
+245,210
+186,995
+18,058,961
+6,017
+2,305,827
+220,889
+480
+476,151
+One to
+23,398
+Less than
+one month
+31 December 2015
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+2,789,206 24,650,961
+6,893,090
+6,632,848
+1,192 207,892
+2,227 4,580,716
+1,206,316
+5
+5
+2,312,027
+206,940
+14,965,960
+4,437
+228,326
+Overdue/
+repayable
+5,669,778
+on demand
+One to
+three
+months
+123,150
+81,489
+425,997 127,520
+1,500,891
+Due to banks and other financial institutions (*)
+55,866
+through profit or loss
+Financial liabilities designated at fair value
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+Less than
+one month
+4,125,373
+3,248,159
+772,957
+487
+84,740 202,449
+24,743
+255
+1,924,986 1,258,455 4,337,552
+12,102
+Financial assets held for trading
+1,576,747
+2,500
+22,038
+228,150
+1,014,641 181,145
+128,273
+Due from banks and other financial institutions (*)
+2,995,051
+2,553,024
+3,432
+438,595
+Cash and balances with central banks
+Financial assets:
+23,960
+78,395
+2,396
+802
+814,824
+181,205
+Others
+Financial investments
+787,695 840,412
+66,217
+Loans and advances to customers (**)
+22,046
+13,689
+9,404
+6,802
+1,065
+534
+through profit or loss
+Financial assets designated at fair value
+117,655
+171,009
+Non-derivative cash flows:
+17,829
+25,199
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+244
+Includes repurchase agreements.
+(*)
+254
+(56)
+776
+3,984
+2,458,099
+(2,457,845)
+(1,488)
+(77,517)
+1,432
+78,293
+(b) Liquidity risk (continued)
+707,203 458,376 1,212,795
+(709,123) (460,906) (1,208,811)
+(1,920) (2,530)
+(iii) Analysis of credit commitments by contractual expiry date
+Group
+Total
+More than
+five years
+Three
+five years
+One to
+months to
+one year
+three months
+one month
+One to
+Less than
+Repayable
+on demand
+Three
+31 December 2015
+Credit commitments
+31 December 2016
+Management expects that not all of the commitments will be drawn before the expiry of the commitments.
+- Cash outflow
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+1,242
+2,377
+1,301,993 1,459,130
+175,509
+10,105,152
+Others
+15,936,042
+3,441
+2,099,811
+153,249
+522
+16,214
+70,933
+24,723 40,857
+766,165 1,159,609 3,534,130
+8,372,886
+Due to customers
+Certificates of deposit
+300,380
+2,244,378
+7,894
+100
+16,240
+727
+67,818
+229,869
+(45)
+(68)
+(19)
+(87)
+(127)
+256
+Derivative financial instruments settled on net basis
+164,771
+Derivative cash flows:
+237,784
+2,227,619
+3,808,847
+183,413
+3,952
+748
+323,063
+19,140,525
+Total
+Debt securities issued
+Undated
+20,178
+7,210,629 257,043 16,885,364
+1,569,467 76,512 4,898,235
+1,425 336,781
+3,186,649 27,319,425
+8,805,983
+7,102,874
+842,940 1,805,746 1,387,549 4,187,684
+203,245
+4,425,087
+2,413,765
+59
+600,938
+242
+174,177
+119
+23,554
+311,382
+Others
+63,376
+Financial investments
+3,173,863
+901,221 867,533
+49,988
+4,108 275,157
+Loans and advances to customers (**)
+(*)
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2016
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+Includes reverse repurchase agreements.
+31,574
+14,536
+219
+47,281
+22,296
+11,639
+413,572
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+More than Undated
+five years
+five years
+three
+months
+(***)
+One to
+months to
+one year
+2,799,261
+3,294,049
+Due from banks and other financial institutions (*)
+66,701
+1,297
+through profit or loss
+186,203
+48,300
+895
+2,189
+79,141
+379
+13,020
+Financial assets held for trading
+1,443,636
+4,814
+58,529
+254,645
+295,868
+763,079
+42,658
+379
+Financial assets designated at fair value
+through profit or loss
+(*)
+8,582
+(3,473,190)
+3,481,772
+1,644
+(1,804)
+(160)
+808,559 999,032 1,605,798 66,739
+(807,068) (997,897) (1,599,245) (67,176)
+1,491 1,135
+6,553
+(437)
+- Cash outflow
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+(137)
+(39)
+102
+(214)
+(99)
+113
+Includes repurchase agreements.
+243
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+five years
+one year
+More than
+five years
+Financial liabilities designated at fair value
+months
+one month
+One to
+Derivative financial instruments settled on net basis
+months to
+Less than
+repayable
+on demand
+Three
+One to
+Overdue/
+31 December 2015
+(b) Liquidity risk (continued)
+three
+Derivative cash flows:
+Annual Report 2016
+247,108
+356,476
+15,752
+36,934
+75,114 169,491
+645,735 141,531 191,340
+27,104 56,790
+95,079
+725,189 1,178,132 3,651,288
+1,686 21,491
+557
+184,801
+Others
+3,311
+Debt securities issued
+9,604,216
+Due to customers
+59,185
+20,752,996
+Certificates of deposit
+1,246,649
+Due to banks and other financial institutions (*)
+4,436
+2,229,691
+1,042
+164
+1,547,794 3,996,689
+1,403
+17,359
+1,477,495
+386,052
+237,300
+191,278
+11,094,851
+2,389,059
+17,392,308
+6,017
+2,227,466
+196,812
+480
+122,264
+3,311
+83,033
+other financial institutions (**)
+2,029,557
+179,112
+1,894
+23,556
+Certificates of deposit
+3,061
+8,074
+443
+15,781,673
+2,234,119
+150,113
+Due to customers
+10,051,225
+236,395
+3,463,631
+Due to banks and
+2,027,361
+58,563
+33,144
+5,332,737
+55,866
+33,144
+129,669
+Others
+Debt securities issued
+129,669
+Property and equipment
+391,910
+391,910
+Total assets
+10,843,015
+297,414
+2,381,853
+1,190,884
+21,046,946
+Liabilities:
+Financial liabilities designated at
+fair value through profit or loss
+204,026
+21,682
+15,840
+Derivative financial liabilities
+1,298,457
+17,189
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant, on profit before taxation and
+equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity, while a positive
+amount reflects a potential net increase. This effect, however, is based on the assumption that the Group's foreign exchange
+exposures as at the year end are kept unchanged and, therefore, have not incorporated actions that would be taken by the
+Group to mitigate the adverse impact of this currency risk.
+30,098
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+(iii) Currency risk
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+Group
+Currency
+Change in
+currency rate
+Effect on profit
+before taxation
+Effect on equity
+2016
+2015
+2016
+-1%
+135,308
+2015
+USD
+ICBC
+252
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+184,016
+240,175
+Others
+548,562
+Total liabilities
+12,385,030
+3,731,860
+2,083,267
+187,520
+8,872
+897,523
+19,285,200
+Interest rate mismatch
+(1,542,015)
+1,600,877
+298,586
+1,110,937
+N/A
+N/A
+(*)
+548,562
+135,308
+1,239,065
+Investments in subsidiaries and
+20,878,151
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2016
+251
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+31 December 2015
+Less than
+three
+months
+Three
+Non-
+months to
+one year
+One to
+More than
+interest-
+890,401
+189,549
+1,425,503
+2,237,087
+336,467
+(1,663,762)
+3,591,913
+11,251,659
+66
+2,154,995
+5,362
+231,658
+17,235,587
+Debt securities issued
+21,953
+five years
+10,827
+183,734
+279,446
+Others
+532,287
+532,287
+Total liabilities
+13,654,701
+3,906,413
+Interest rate mismatch
+62,932
+five years
+bearing
+Total
+13,665
+4,971
+206,282
+Derivative financial assets
+33,290
+33,290
+Loans and advances to customers
+6,457,483
+4,218,448
+169,119
+130,127
+99,711
+11,026,476
+Financial investments
+420,217
+806,570
+2,060,875
+1,161,171
+2,165
+4,450,998
+120,707
+associates
+9,122
+fair value through profit or loss
+Assets:
+Cash and balances with central banks
+2,607,873
+383,746
+2,991,619
+Due from banks and
+other financial institutions (*)
+1,311,681
+221,232
+9,405
+20,299
+10,114
+1,565,444
+Financial assets held for trading
+36,356
+77,365
+1,433
+796
+115,950
+Financial assets designated at
+2,118
+75
+21,643
+(280)
+366,752
+Derivative financial liabilities
+19,889
+46,150
+13,210
+10,711
+89,960
+Due to banks and other financial institutions (**)
+1,729,007
+723,289
+35,485
+118,324
+2,606,105
+Certificates of deposit
+30,154
+137,310
+13,330
+37,633
+218,427
+63,565
+13,949
+289,238
+through profit or loss
+1,444
+246,209
+Others
+293,855
+125,161
+4,261
+190,854
+614,131
+Total assets
+Due to customers
+21,190,044
+281,146
+595,981
+24,137,265
+Liabilities:
+Due to central banks
+30
+515
+545
+Financial liabilities designated at fair value
+2,070,094
+758
+16,722,751
+235,360
+1,981,163
+Credit commitments
+2,120,542
+500,612
+30,896
+126,362
+2,778,412
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+254
+ICBC
+(c) Market risk (continued)
+31 December 2015
+Assets:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Due to customers
+USD
+164,069
+(23,300)
+203,535
+1,636,859
+167,648
+17,825,302
+Debt securities issued
+182,367
+153,201
+726
+357,937
+Others
+Total liabilities
+699,543
+579,749
+6,335
+11,873
+691,074
+19,553,185
+1,866,559
+304,446
+431,912
+22,156,102
+Net position
+93,117
+(313)
+112,653
+Property and equipment
+253
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+A breakdown of the assets and liabilities analysed by currency is as follows:
+Group
+31 December 2016
+Assets:
+USD
+HKD
+(equivalent
+(equivalent
+RMB
+to RMB)
+to RMB)
+Others
+(equivalent
+to RMB)
+Total
+Cash and balances with central banks
+Annual Report 2016
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+(14)
+(19)
+HKD
+-1%
+275
+402
+(929)
+(795)
+Bank
+Currency
+USD
+3,081,709
+HKD
+Effect on profit
+before taxation
+2016
+2015
+Effect on equity
+2016
+2015
+-1%
+-1%
+78
+188
+49
+152
+(27)
+(22)
+Change in
+currency rate
+131,354
+195,520
+56,117
+94,452
+Loans and advances to customers
+11,490,448
+863,960
+220,280
+192,646
+12,767,334
+Financial investments
+4,674,842
+240,949
+20,374
+70,534
+5,006,699
+Investments in associates and joint ventures
+660
+875
+1,627
+26,915
+30,077
+12,379
+8,575
+32,020
+41,478
+3,350,788
+Due from banks and other financial institutions (*)
+1,023,286
+483,688
+7,557
+38,569
+1,553,100
+Financial assets held for trading
+180,632
+17,442
+5,732
+189,331
+Financial assets designated at fair value
+though profit or loss
+271,780
+9,536
+272
+3,556
+285,144
+Derivative financial assets
+2,967
+194,503
+614,131
+6,331
+Interest rate mismatch
+(1,577,446)
+1,156,751
+487,380
+190,934
+1,584
+208,533
+1,531,435
+357,937
+678,275
+1,146,532
+N/A
+691,074
+22,156,102
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2016
+249
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+31 December 2015
+2,264
+2,315,505
+4,130,911
+14,354,621
+Total liabilities
+26,301
+2,606,105
+Certificates of deposit
+118,407
+93,236
+6,331
+453
+218,427
+Due to customers
+Less than
+three
+months
+11,660,480
+2,166,979
+5,362
+287,415
+17,825,302
+Debt securities issued
+Others
+34,242
+8,569
+16,039
+382
+116,722
+3,705,066
+10,200
+Three
+months to
+one year
+2,241
+373
+132,838
+Financial assets designated at
+fair value through profit or loss
+9,405
+9,339
+173,054
+13,665
+4,971
+210,434
+Derivative financial assets
+78,870
+78,870
+Loans and advances to customers
+6,897,524
+4,333,873
+188,200
+130,887
+6,619
+82,154
+41,451
+Financial assets held for trading
+One to
+More than
+interest-
+five years
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+Non-
+2,672,292
+3,059,633
+Due from banks and
+other financial institutions (*)
+1,438,201
+197,465
+27,608
+41
+16,811
+1,680,126
+387,341
+12,912
+270,853
+2,285,839
+41
+30,457
+1,553,100
+Financial assets held for trading
+73,827
+102,259
+4,126
+3,103
+6,016
+189,331
+Financial assets designated at
+fair value through profit or loss
+16,157
+40,807
+203,561
+19,063
+5,556
+285,144
+Derivative financial assets
+65,244
+175,706
+1,281,652
+other financial institutions (*)
+(equivalent
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+31 December 2016
+Less than
+three
+months
+Three
+months to
+one year
+Non-
+94,452
+One to
+five years
+interest-
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,950,175
+400,613
+3,350,788
+Due from banks and
+More than
+five years
+94,452
+Loans and advances to customers
+8,042,786
+2,802,885
+1,739,968
+1,529,575
+24,137,265
+Liabilities:
+Due to central banks
+118
+427
+545
+604,628
+Financial liabilities designated at
+247,084
+45,217
+9,870
+Derivative financial liabilities
+64,581
+89,960
+366,752
+89,960
+Due to banks and
+other financial institutions (**)
+fair value through profit or loss
+102,328
+209
+5,287,662
+Total assets
+4,331,521
+154,613
+139,700
+98,714
+12,767,334
+Financial investments
+403,284
+637,160
+2,375,341
+9,294
+12,777,175
+1,578,061
+5,006,699
+Investments in associates and
+joint ventures
+30,077
+30,077
+Property and equipment
+246,209
+246,209
+Others
+12,853
+453
+11,652,812
+447,620
+Financial assets designated at
+fair value through profit or loss
+16,157
+31,502
+199,990
+19,063
+5,406
+272,118
+Derivative financial assets
+62,892
+62,892
+Loans and advances to customers
+7,506,073
+4,240,147
+106,364
+86,977
+93,639
+12,033,200
+Financial investments
+184,074
+48,300
+307
+1,706
+One to
+five years
+More than
+five years
+interest-
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,893,681
+396,589
+351,472
+3,290,270
+other financial institutions (*)
+1,166,598
+196,166
+54,667
+12,570
+1,430,001
+Financial assets held for trading
+56,958
+76,803
+Due from banks and
+Non-
+600,860
+1,508,705
+fair value through profit or loss
+247,029
+36,092
+9,695
+59,185
+352,001
+Derivative financial liabilities
+58,179
+58,179
+Due to banks and
+other financial institutions (**)
+2,029,768
+184,154
+2,755
+9,092
+2,225,769
+Certificates of deposit
+104,292
+83,427
+Financial liabilities designated at
+379
+379
+Due to central banks
+76,512
+4,748,376
+Investments in subsidiaries and
+associates
+136,530
+136,530
+Property and equipment
+124,089
+124,089
+2,210,827
+Others
+506,530
+Total assets
+11,990,939
+5,145,478
+2,573,554
+1,615,052
+1,463,057
+22,788,080
+Liabilities:
+506,530
+Three
+months to
+one year
+Less than
+three
+months
+31 December 2016
+20
+30
+160
+210
+Financial liabilities designated at
+fair value through profit or loss
+204,160
+21,682
+15,953
+62,132
+303,927
+Derivative financial liabilities
+76,826
+76,826
+Due to banks and
+other financial institutions (**)
+2,332,698
+234,978
+13,113
+Due to central banks
+Liabilities:
+22,209,780
+1,322,729
+869,374
+2,158,378
+1,177,390
+13,929
+4,666,691
+Investments in associates and
+joint ventures
+24,185
+24,185
+6,805
+Property and equipment
+224,426
+Others
+Total assets
+10,045
+11,516,538
+225
+5,492,430
+469,495
+479,765
+2,553,859
+1,324,224
+224,426
+15,457
+2,603,051
+Certificates of deposit
+623
+204,625
+648,573
+1,148,451
+653,334
+20,409,261
+Interest rate mismatch
+(1,481,484)
+1,588,520
+399,606
+1,119,599
+2,154,253
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+250
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Bank's assets and
+liabilities:
+N/A
+Financial investments
+3,903,910
+Total liabilities
+107,758
+66,575
+8,576
+443
+183,352
+Due to customers
+10,316,969
+3,563,821
+2,052,611
+12,998,022
+3,075
+16,281,939
+Debt securities issued
+Others
+33,046
+3,371
+16,674
+150
+63,223
+193,679
+306,622
+617
+345,463
+HKD
+(equivalent
+18,623
+RMB
+61,956
+2,884,990
+Cash and balances with central banks
+Total
+Others
+(equivalent
+to RMB)
+(equivalent
+to RMB)
+HKD
+USD
+(equivalent
+to RMB)
+RMB
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Assets:
+31 December 2015
+(c) Market risk (continued)
+ICBC
+256
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,713,875
+97,777
+4,868
+514,280
+1,698
+42,975
+2,991,619
+Due from banks and other financial institutions (*)
+65,319
+5,614
+514,733
+10,440,810
+Loans and advances to customers
+33,290
+1,888
+5,133
+26,269
+Derivative financial assets
+206,282
+2,096,950
+563
+205,509
+though profit or loss
+Financial assets designated at fair value
+115,950
+115,950
+Financial assets held for trading
+1,565,444
+52,254
+42,911
+223,412
+1,246,867
+210
+Credit commitments
+1,909,929
+180,234
+194,503
+35,183
+10,691
+122,962
+25,667
+Certificates of deposit
+2,225,769
+103,898
+97,087
+401,106
+1,623,678
+Due to customers
+Due to banks and other financial institutions (**)
+6,147
+2
+31,911
+20,119
+Derivative financial liabilities
+352,001
+59,985
+12,512
+279,504
+through profit or loss
+Financial liabilities designated at fair value
+58,179
+11,026,476
+16,640,183
+12,709
+27,632
+110,388
+1,591,675
+Net position
+20,878,151
+298,804
+122,007
+1,218,422
+19,238,918
+532,287
+7,095
+502,777
+795
+471,796
+Total liabilities
+Others
+279,446
+6,199
+723
+94,553
+177,971
+Debt securities issued
+17,235,587
+79,918
+52,601
+Financial investments
+4,325,530
+87,616
+1,761,746
+112,774
+34,737
+45,601
+1,568,634
+Net position
+19,285,200
+249,097
+66,146
+893,225
+18,076,732
+Credit commitments
+548,562
+2,677
+34,326
+506,821
+Total liabilities
+Others
+240,175
+7,357
+1,898
+50,227
+180,693
+Debt securities issued
+4,738
+15,781,673
+1,824,981
+10,982
+Others
+(equivalent
+ICBC
+258
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements promulgated
+by the CBRC. The requirements pursuant to these regulations may have certain differences comparing to those applicable in
+Hong Kong and other jurisdictions.
+The CBRC requires commercial banks to meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For systemically important banks, CBRC requires
+minimum core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, CBRC requires corresponding minimum ratios of 7.50%, 8.50%
+and 10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and
+the requirements of capital adequacy ratios differ by countries.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations promulgated by the CBRC. In April 2014,
+CBRC officially approved the Bank to adopt advanced capital management approaches. Within the scope of the approval,
+the foundation internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit
+risk, the internal model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory
+requirements.
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBRC. The
+required information is respectively filed with the CBRC by the Group and the Bank semi-annually and quarterly.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution
+policy, issue or repurchase own shares, qualifying other tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+377,739
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+The Group's objectives on capital management are:
+(d) Capital management
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+257
+Annual Report 2016
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,289,444
+75,742
+•
+379
+46,650
+360,613
+938,826
+19,645,366
+Total assets
+391,910
+98,343
+5,174
+35,499
+252,894
+Others
+129,669
+210
+100,883
+9
+129,195
+Property and equipment
+135,308
+63,124
+44,820
+10,012
+17,352
+Investments in subsidiaries and associates
+4,450,998
+37,195
+657
+255
+12,466
+361,871
+Liabilities:
+15,361,944
+Due to customers
+150,113
+25,626
+1,974
+86,173
+36,340
+Certificates of deposit
+2,234,119
+106,173
+47,131
+21,046,946
+348,135
+Due to banks and other financial institutions (**)
+33,144
+2,687
+5,255
+25,202
+Derivative financial liabilities
+297,414
+55,866
+233,052
+through profit or loss
+Financial liabilities designated at fair value
+1,732,680
+379
+8,496
+Liabilities:
+233,169
+through profit or loss
+Financial liabilities designated at fair value
+210
+160
+50
+Due to central banks
+Liabilities:
+22,209,780
+474,852
+240,298
+1,556,278
+19,938,352
+Total assets
+479,765
+100,182
+9,029
+95,968
+274,586
+Others
+224,426
+1,347
+688
+11,249
+59,509
+303,927
+Derivative financial liabilities
+Debt securities issued
+16,281,939
+128,333
+202,105
+515,515
+15,435,986
+Due to customers
+183,352
+26,558
+7,211
+108,770
+83,631
+40,813
+2,603,051
+125,640
+22,891
+624,804
+1,829,716
+Due to banks and other financial institutions (**)
+76,826
+7,962
+7,610
+34,905
+26,349
+Certificates of deposit
+138,760
+Property and equipment
+24,185
+Financial assets designated at fair value
+132,838
+4,953
+139
+11,654
+116,092
+Financial assets held for trading
+1,680,126
+65,014
+14,612
+373,998
+though profit or loss
+1,226,502
+3,059,633
+74,877
+19,253
+72,522
+2,892,981
+Cash and balances with central banks
+Total
+to RMB)
+to RMB)
+Due to central banks
+to RMB)
+Due from banks and other financial institutions (*)
+196,986
+209,444
+166
+22,094
+1,508
+352
+231
+Investments in associates and joint ventures
+4,666,691
+60,377
+16,668
+165,656
+4,423,990
+Financial investments
+252
+11,652,812
+714,769
+10,629,123
+Loans and advances to customers
+78,870
+8,015
+6,736
+37,476
+26,643
+Derivative financial assets
+210,434
+572
+171,499
+89,408
+137,421
+17,743
+Financial investments
+12,033,200
+96,131
+9,155
+643,173
+11,284,741
+Loans and advances to customers
+62,892
+3,942
+2
+40,325
+4,554,549
+Derivative financial assets
+106
+231
+271,781
+though profit or loss
+Financial assets designated at fair value
+184,074
+250
+1,543
+182,281
+Financial assets held for trading
+1,430,001
+272,118
+44,306
+132,229
+46,841
+479,038
+2,485
+149,639
+1,328,810
+20,830,593
+Total assets
+506,530
+188,146
+504
+51,642
+266,238
+14,757
+Others
+218
+9
+249
+123,613
+Property and equipment
+136,530
+64,346
+44,820
+17,353
+Investments in subsidiaries and associates
+4,748,376
+124,089
+73,128
+10,011
+1,020,638
+76,223
+25,449
+355,858
+1,840,354
+Credit commitments
+1,800,519
+98,864
+(7,552)
+98,444
+1,610,763
+Net position
+20,409,261
+375,988
+247,850
+1,457,834
+18,327,589
+653,334
+10,083
+5,548
+73,183
+564,520
+Total liabilities
+291,929
+Others
+306,622
+2,297,884
+(*)
+22,788,080
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+3,290,270
+34,752
+7,264
+179,180
+3,069,074
+Cash and balances with central banks
+Assets:
+Total
+Others
+(equivalent
+to RMB)
+(equivalent
+to RMB)
+to RMB)
+RMB
+Due from banks and other financial institutions (*)
+(equivalent
+HKD
+USD
+31 December 2016
+Bank
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+255
+Notes to the Financial Statements
+Annual Report 2016
+1,044
+(110)
+(864)
+101
+(3)
+228
+(57)
+(6)
+(53)
+(855)
+304
+(228)
+715
+Financial assets designated at fair value
+83,053
+139,004
+304
+322
+5,520
+(12,668)
+(218)
+4,172
+34
+334
+13,852
+Debt securities
+Available-for-sale financial assets
+181,376
+(49,092)
+Equity investments
+8,411
+through profit or loss
+48
+Interest rate contracts
+38
+2015
+Total gains
+recorded
+Total
+(losses)/gains
+recorded in
+As at
+(3,892)
+(87)
+profit or loss
+27
+(133)
+(173)
+1
+48
+6
+626
+242
+in other
+comprehensive
+income
+Additions
+Disposals
+32
+121
+(113)
+770
+149
+(153)
+ཤྲུཎྜབྷྲ
+1,942
+Commodity derivatives and others
+1,140
+Exchange rate contracts
+Financial assets:
+Derivative financial assets
+As at 31
+December 2015
+Transfer out of
+Level 3
+Settlements
+བྷངཿཝཱ
+1 January
+2016
+8,517
+profit or loss
+Total gains
+recorded
+in other
+comprehensive
+Total
+gains/(losses)
+recorded in
+1 January
+As at
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Bank
+income
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+265
+Annual Report 2016
+(4,681)
+107
+1,355
+Financial Statements for the year ended 31 December 2016
+(3,721)
+Additions
+Settlements
+37
+(134)
+Commodity derivatives and others
+(181)
+530
+Interest rate contracts
+Disposals
+(44)
+Exchange rate contracts
+Derivative financial assets
+Financial assets:
+As at 31
+December 2016
+Level 3
+Transfer out of
+208
+(343)
+(2,079)
+(55)
+Exchange rate contracts
+Derivative financial liabilities
+(2,211)
+(2,413)
+202
+through profit or loss
+(1,319)
+Financial liabilities designated at fair value
+188,566
+(110)
+(13,532)
+(49,310)
+87,529
+370
+Financial liabilities:
+173
+(205)
+1,012
+-
+329
+(378)
+28
+(34)
+Commodity derivatives and others
+(2,181)
+(234)
+152
+14
+(725)
+(746)
+(726)
+Interest rate contracts
+105
+155,102
+(1,308)
+Total gains
+recorded
+26
+72
+228
+Exchange rate contracts
+As at 31
+December 2016
+Transfer out of
+Level 3
+Settlements
+Interest rate contracts
+Disposals
+comprehensive
+income
+profit or loss
+2016
+in other
+gains/(losses)
+recorded in
+1 January
+Additions
+As at
+715
+Commodity derivatives and others
+412
+34
+(179)
+(139)
+320
+35
+(21)
+(27)
+15
+5235
+38
+1,044
+(13)
+101
+(3)
+Total
+Derivative financial assets
+Financial assets:
+208
+30,074
+297,414
+8,496
+55,866
+27,521
+30,282
+205,531
+264
+Commodity derivatives and others
+Interest rate contracts
+Exchange rate contracts
+Derivative financial liabilities
+(37)
+ICBC
+1,330
+530
+1,860
+Group
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and liabilities which
+are recorded at fair value and the movement during the year:
+(b) Movement in level 3 financial instruments measured at fair value
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+330,558
+754
+327,857
+1,947
+33,144
+754
+32,390
+1,002
+16
+986
+33
+(8)
+(46)
+67
+Interest rate contracts
+(24)
+(234)
+Exchange rate contracts
+Derivative financial liabilities
+1
+(2,181)
+67
+through profit or loss
+Financial liabilities designated at fair value
+Financial liabilities:
+159,550
+(29,745)
+(4,129)
+(2,211)
+736
+Commodity derivatives and others
+(55)
+147
+(2)
+(310)
+(76)
+36
+(3)
+(9)
+(2,101)
+22
+(83)
+92
+12
+740
+(4,681)
+(39)
+(14,951)
+(34)
+12,445
+7,402
+181,376
+through profit or loss
+Financial assets designated at fair value
+191
+(310)
+(92)
+7,258
+497
+Financial assets held for trading
+799
+69
+(252)
+(150)
+50
+96
+11,659
+(13,493)
+(29,504)
+188,566
+(310)
+(316)
+626
+Equity investments
+1,264
+(3,567)
+(900)
+239
+(38)
+10
+5,520
+Debt securities
+Available-for-sale financial assets
+157,296
+(38)
+775
+202,034
+| | ||
+Level 2
+Level 1
+Fair value
+Carrying
+amount
+2016
+Group
+Level 3
+The following table summarises the carrying amounts, the fair value and the analysis by level of the fair value hierarchy of
+held-to-maturity investments, receivables, subordinated bonds and tier 2 capital notes:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+267
+Annual Report 2016
+As at 31 December 2016, the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were immaterial.
+(e) Fair value of financial assets and liabilities not carried at fair value
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+Held-to-maturity investments
+2,996,641
+Financial liabilities
+235,246
+3,049,532
+3,440
+3,288,218
+3,264,412
+2,973,042
+Subtotal
+422
+2,992,779
+56,753
+291,577
+291,370
+Receivables
+3,440
+234,824
+(d) Valuation of financial instruments with significant unobservable inputs
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+On the balance sheet date, certain financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+Total
+7,162
+2,101
+5,061
+8,142
+2,840
+5,302
+2015
+Total gains for the year
+Realised
+Total
+Group
+Unrealised
+Realised
+2016
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Gains or losses on level 3 financial instruments included in the statement of profit or loss for the year comprise:
+Bank
+Unrealised
+Total gains for the year
+Realised
+6,754
+Group
+Unrealised
+(ii) Transfers between level 2 and level 3
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy on
+the balance sheet date.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy on the balance sheet date.
+(i) Transfers between level 1 and level 2
+(c) Transfers between levels
+8,033
+1,550
+6,483
+8,174
+1,420
+Total
+Bank
+Unrealised
+Realised
+Total
+Subordinated bonds and Tier 2 Capital Notes
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+194,811
+202,034
+181,999
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+Subtotal
+Receivables
+Held-to-maturity investments
+188,693
+Financial assets
+Level 2
+Level 1
+Fair value
+Carrying
+amount
+2016
+Bank
+Level 3
+215,581
+Subtotal
+188,693
+268
+188,693
+188,693
+188,509
+188,509
+2,897,067
+75,189
+2,972,256
+181,999
+2,388
+3,139,537
+263,698
+263,456
+2,388
+2,899,455
+2,876,081
+3,163,153
+215,581
+215,581
+195,553
+2,944,661
+2,870,353
+Held-to-maturity investments
+Financial assets
+Level 3
+Level 2
+56,841
+Level 1
+Carrying
+amount
+2015
+202,034
+202,034
+194,811
+Subtotal
+Fair value
+2,654,913
+232,907
+Receivables
+Subtotal
+215,581
+195,553
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+477,125
+2,763,918
+56,841
+3,297,884
+3,222,496
+Subtotal
+244,218
+109,005
+353,223
+352,143
+295,467
+Notes to the Financial Statements
+| | |
+| | | |
+(166)
+| | ||
+| | | |
+| | ||
+(6)
+241
+(351)
+(754)
+| | |
+16
+(16)
+Commodity derivatives and others
+181
+(530)
+(2)
+Interest rate contracts
+(519)
+1 January
+1,149
+Exchange rate contracts
+Financial assets:
+Derivative financial assets
+As at 31
+December 2015
+Level 3
+Settlements
+As at
+Disposals
+income
+Transfer out of
+comprehensive
+Total gains
+recorded
+in other
+Total
+gains/(losses)
+recorded in
+profit or loss
+2015
+Additions
+44
+(208)
+Exchange rate contracts
+(12,796)
+11,481
+7,172
+177,439
+through profit or loss
+Financial assets designated at fair value
+(29,504)
+2
+519
+351
+| | ||
+| | |
+6
+2
+-2---1 166
+..
+153,792
+Available-for-sale financial assets
+Debt securities
+Derivative financial liabilities
+Financial liabilities:
+154,512
+(29,504)
+(13,154)
+11,487
+(17)
+-- 201
+(358)
+(17)
+ΞΕ
+6,921
+178,779
+11
+565
+6
+Interest rate contracts
+770
+(177)
+176
+(721)
+Interest rate contracts
+(6)
+(1,263)
+Exchange rate contracts
+Commodity derivatives and others
+Derivative financial liabilities
+178,779
+(140)
+(5,861)
+(49,310)
+81,540
+16
+Financial liabilities:
+(34)
+13
+(2,018)
+| | ||
+---961
+(754)
+104
+977
+(16)
+5
+(530)
+4
+11
+(208)
+100
+ICBC
+266
+183
+7,850
+(262)
+144,684
+(4,988)
+(3)
+530
+(57)
+---(6)
+208
+(83)
+37
+(864)
+| | ||
+(163)
+1,951
+8
+32
+Commodity derivatives and others
+| | |
+(873)
+(140)
+775
+(218)
+200
+16
+(62)
+5,617
+Debt securities
+Available-for-sale financial assets
+177,439
+(49,092)
+81,340
+8,075
+137,116
+through profit or loss
+Financial assets designated at fair value
+|
+565
+1,947
+116
+1,947
+1,720,630
+8,804
+1,740,886
+1,264
+8,804
+1,644,635
+2,039,321
+94,987
+110,942
+Other debt instruments
+1,264
+159,550
+1,635,493
+Debt securities
+11,452
+338
+11,114
+Equity investments
+Available-for-sale financial assets
+83,873
+94,452
+2,309,813
+fair value on a recurring basis:
+12,512
+Other debt securities issued
+59,192
+59,192
+precious metals
+Financial liabilities related to
+Financial liabilities which are measured at
+17,797
+Structured deposits
+270,831
+270,831
+Wealth management products
+through profit or loss
+Financial liabilities designated at fair value
+17,797
+799
+87,773
+5,880
+919
+218,565
+157,296
+61,269
+Others
+25,706
+126,929
+25,706
+40,873
+39,954
+919
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+Other debt instruments
+157,296
+285,144
+Derivative financial asset
+15,565
+67
+9,836
+5,662
+Commodity derivatives and others
+20,609
+412
+20,167
+30
+Interest rate contracts
+58,278
+320
+57,770
+188
+Exchange rate contracts
+865
+189,331
+13,377
+365
+117,657
+15,181
+117,657
+373
+14,808
+Debt securities
+Equity investments
+Financial assets designated at fair value
+Financial assets held for trading
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+31 December 2015
+fair value on a recurring basis:
+(a) Financial instruments recorded at fair value (continued)
+through profit or loss
+Other debt instruments
+28,234
+824
+181,910
+181,376
+534
+Others
+Debt securities
+6,300
+22,224
+21,400
+824
+132,838
+132,465
+373
+6,300
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+Interest rate contracts
+60,217
+310
+59,581
+326
+Exchange rate contracts
+1
+Derivative financial liabilities
+2,101
+351,774
+12,877
+5,555
+2,101
+3,089
+366,752
+19,161
+1,308
+20,470
+261
+Annual Report 2016
+456,712
+3,892
+434,377
+18,443
+89,960
+1,791
+82,603
+5,566
+9,273
+173
+3,861
+5,239
+Commodity derivatives and others
+Others
+191
+179,984
+9,156
+79,794
+Additional tier 1 capital
+1,701,495
+1,874,976
+Net core tier 1 capital
+5,700
+79,567
+5,700
+(3,869)
+(4,618)
+that are not fair valued on the balance sheet
+Cash flow hedge reserves that relate to the hedging of items
+1,356
+1,477
+Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+Other intangible assets other than land use rights
+Additional tier 1 capital instruments and related premium
+79,375
+19,195
+Surplus provision for loan impairment
+180,242
+154,861
+Valid portion of tier 2 capital instruments and related premium
+244,641
+79,375
+178,292
+1,781,062
+1,954,770
+Net tier 1 capital
+192
+419
+Valid portion of minority interests
+Tier 2 capital
+8,478
+9,001
+Goodwill
+151,998
+Valid portion of capital reserve
+356,407
+356,407
+1,713,160
+1,886,536
+151,963
+Paid-in capital
+31 December 2015
+31 December 2016
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+(d) Capital management (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Core tier 1 capital
+Surplus reserve
+205,021
+178,040
+11,665
+11,560
+(5,799)
+(21,640)
+4,340
+3,164
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+781,853
+940,237
+Retained profits
+246,356
+251,349
+General reserve
+63,398
+Valid portion of minority interests
+4,236
+1,001
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+260
+For unquoted other liabilities designated at fair value through profit or loss, the discounted cash flow model is used based
+on current yield curve appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and
+Heston model is applied based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which
+is calibrated by active market quotes of standard European options with the same underlying.
+Other liabilities designated at fair value through profit or loss
+(a) Financial instruments recorded at fair value
+Structured products are mainly valued using dealer's quotations.
+Derivatives
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+Financial investments
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the
+framework of fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter
+solutions. Operating procedures specify measurement operating procedures, valuation date, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for
+daily transactions management. Financial Accounting Department plays a lead role of developing accounting policies of fair
+value measurement, valuation methodologies and system implementation. Risk Management Department is responsible for
+verifying trade details and valuation models.
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc.. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc..
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+Group
+31 December 2016
+183,315
+191
+179,984
+3,140
+6,016
+6,016
+Debt securities
+Equity investments
+Financial assets held for trading
+fair value on a recurring basis:
+Total
+Level 3
+Level 2
+Level 1
+Financial assets which are measured at
+valuation techniques which use inputs which have a significant effect on the recorded fair value that are not
+based on observable market data.
+181,376
+valuation techniques for which all inputs which have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+Level 3:
+Core tier 1 capital adequacy ratio
+13,216,687
+14,564,617
+Risk-weighted assets (i)
+2,012,103
+2,127,462
+12.87%
+Net capital base
+5,600
+financial institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital instruments issued by
+13,600
+5,600
+Tier 2 capital deductions
+13,600
+12.87%
+Tier 1 capital adequacy ratio
+13.42%
+Level 2:
+Level 1:
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+55. FAIR VALUE OF FINANCIAL INSTRUMENTS
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+259
+Annual Report 2016
+Refers to risk-weighted assets after capital floor and adjustments.
+(i)
+15.22%
+14.61%
+Capital adequacy ratio
+13.48%
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+6,549
+210,434
+Exchange rate contracts
+1,705
+Commodity derivatives and others
+1,396
+351
+1,045
+Interest rate contracts
+2
+55,076
+54,586
+324
+Exchange rate contracts
+Derivative financial liabilities
+352,001
+59,185
+13,311
+166
+270,674
+1,707
+57,336
+Level 1
+31 December 2015
+(a) Financial instruments recorded at fair value (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+324
+263
+410,180
+519
+396,825
+12,836
+58,179
+519
+Annual Report 2016
+270,831
+| |
+339,489
+201
+1,540,869
+67,131
+1,532,327
+201
+1,465,826
+1,608,201
+66,300
+75,043
+831
+Debt securities
+Equity investments
+Available-for-sale financial assets
+62,892
+75,874
+68,186
+1,904,587
+154,512
+12,512
+799
+12,512
+Debt securities issued
+59,185
+precious metals
+Financial liabilities related to
+270,831
+8,674
+Structured deposits
+Wealth management products
+through profit or loss
+Financial liabilities designated at fair value
+fair value on a recurring basis:
+Financial liabilities which are measured at
+2,127,285
+Level 2
+519
+Level 3
+Financial assets which are measured at
+1,296,903
+565
+1,224,821
+71,517
+1,433
+1,433
+72,950
+33,290
+32,515
+3,711
+37
+3,674
+1,676
+530
+775
+1,146
+1,224,821
+1,298,336
+Debt securities issued
+55,866
+precious metals
+Financial liabilities related to
+27,521
+Structured deposits
+565
+205,531
+through profit or loss
+Financial liabilities designated at fair value
+1,653,858
+178,779
+1,401,356
+73,723
+Wealth management products
+27,903
+208
+27,695
+Equity investments
+Available-for-sale financial assets
+Commodity derivatives and others
+Interest rate contracts
+Exchange rate contracts
+Derivative financial assets
+Debt securities
+Others
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+Debt securities
+Financial assets held for trading
+fair value on a recurring basis:
+Other debt instruments
+Financial liabilities which are measured at
+fair value on a recurring basis:
+115,950
+| | ||
+206,282
+177,439
+28,070
+773
+177,973
+177,439
+534
+6,300
+6,300
+22,009
+21,236
+773
+115,950
+115,950
+115,950
+Total
+62,237
+136
+8,078
+27,521
+27,521
+Structured deposits
+205,531
+205,531
+Wealth management products
+Financial liabilities related to
+Financial liabilities designated at fair value
+Financial liabilities which are measured at
+through profit or loss
+1,865,499
+188,566
+1,509,367
+167,566
+fair value on a recurring basis:
+1,443,357
+precious metals
+55,871
+Derivative financial liabilities
+303,927
+2,211
+299,625
+2,091
+6,508
+55,871
+2,211
+144
+Others
+8,496
+6,549
+1,947
+Other debt securities issued
+4,153
+6,146
+1,294,439
+142,772
+15,274
+101
+6,511
+8,662
+Commodity derivatives and others
+26,989
+8,789
+715
+25
+Interest rate contracts
+36,607
+228
+36,277
+102
+26,249
+69,037
+1,044
+78,870
+27,593
+27,593
+1,402,673
+5,520
+13,091
+626
+134
+-
+Other debt instruments
+1,266,712
+130,441
+Debt securities
+12,331
+Equity investments
+Available-for-sale financial assets
+Exchange rate contracts
+38,575
+234
+38,925
+52,019
+Others
+25,706
+25,706
+40,601
+39,682
+153,792
+919
+Debt securities
+through profit or loss
+184,074
+135,774
+48,300
+184,074
+Other debt instruments
+205,811
+919
+117,407
+2
+8,076
+Commodity derivatives and others
+1,479
+351
+1,128
+Interest rate contracts
+53,335
+166
+53,033
+136
+Exchange rate contracts
+Derivative financial assets
+272,118
+153,792
+135,774
+Derivative financial assets
+48,300
+Debt securities
+76,826
+2,470
+67,993
+6,363
+9,665
+55
+8,454
+3,366
+Commodity derivatives and others
+28,236
+2,181
+26,052
+3
+Interest rate contracts
+6,244
+367,618
+4,681
+380,753
+Equity investments
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+31 December 2016
+Bank
+(a) Financial instruments recorded at fair value (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+262
+Financial assets designated at fair value
+ICBC
+Financial assets
+346,127
+332,698
+135,780
+51,499
+229,155
+280,654
+Current market value of collateral held against
+6,739,552
+the covered portion of overdue loans and advances *
+Covered portion of overdue loans and advances *
+146,208
+Uncovered portion of overdue loans and advances *
+Please see section (e) (iii) for the definition of overdue loans and advances to customers.
+186,490
+274
+300,497
+ICBC
+9,518
+264
+19,217
+19,217
+Subtotal of personal loans
+3,541,862
+3,027,428
+77,602
+9,254
+93,167
+Discounted bills
+Total loans and advances to customers
+522,052
+11,933,466
+522,052
+717
+524
+93,167
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+The amount of new impairment loss charged to the consolidated statement of profit or loss and the amount of impaired
+loans and advances written off during the year are set out below:
+30,920
+38,239
+22,354
+Production and supply of electricity, heating,
+gas and water
+6,422
+73,061
+803
+163
+Leasing and commercial services
+11,037
+1,073
+21,818
+844
+20,114
+Manufacturing
+1,148
+24,724
+2016
+2015
+New
+Write-offs
+New
+Write-offs
+impairment
+loss
+of impaired
+loans
+impairment
+loss
+of impaired
+loans
+Transportation, storage and postal services
+10,232
+1,395
+29,115
+282,127
+730,574
+Others
+9,313
+4,008
+1,235
+4,532
+5,767
+Construction
+43,415
+226,619
+10,064
+3,304
+1,470
+3,659
+5,129
+Lodging and catering
+96,557
+280,556
+Mining
+7,881
+Real estate
+562,917
+398,193
+17,653
+6,434
+2,722
+9,119
+11,841
+Water, environment and public utility management
+472,791
+249,396
+1,685
+286
+139
+7,742
+224,215
+Wholesale and retail
+147,758
+3,599
+Subtotal of corporate loans
+7,869,552
+3,190,072
+254,379
+135,256
+51,235
+7,254
+126,734
+Personal mortgage and business loans
+2,811,288
+2,745,301
+48,487
+73,950
+73,950
+177,969
+6,245
+1,009
+2,264
+995
+3,615
+4,610
+Science, education, culture and sanitation
+137,497
+44,063
+1,024
+576
+197
+2,244
+2,441
+Others
+383,437
+107,909
+4,888
+7,964
+51,328
+23,754
+37,653
+2015
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+Between 3 and 6 months
+24,128
+31,177
+Between 6 and 12 months
+2016
+51,422
+Over 12 months
+119,462
+77,988
+195,012
+162,796
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+53,631
+(iii) Overdue loans and advances to customers
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+12,053,041
+11,207,140
+622,803
+510,034
+449,217
+363,267
+112,985
+81,203
+115,371
+37,533
+152,646
+97,556
+13,056,846
+Annual Report 2016
+275
+0.18%
+2015
+0.26%
+0.39%
+impairment
+Gross amount
+be impaired
+losses
+be impaired
+losses
+impairment
+losses
+Bohai Rim
+19,725
+1,205
+518
+1,205
+518
+Head Office
+allowance for
+assessed
+Collectively
+0.45%
+0.91%
+0.65%
+1.48%
+1.36%
+The definition of overdue loans and advances to customers is set out as follows:
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+(iv) Overdue and impaired loans and advances to customers by geographical distribution
+31 December 2016
+Overdue loans
+and advances to customers
+Impaired loans
+and advances to customers
+Individually
+assessed to
+Individually
+assessed
+allowance for
+impairment
+Individually
+assessed to
+Individually
+assessed
+allowance for
+Between 6 and 12 months
+Over 12 months
+13,777
+2016
+Africa
+2
+209
+30
+Construction
+6,559
+1,528
+1,393
+3,396
+Science, education, culture and sanitation
+1,776
+74
+2,924
+187
+Others
+960
+Finance
+572
+1,737
+22,265
+Real estate
+10,168
+1,955
+2,619
+377
+Water, environment and public utility
+management
+5,764
+430
+132
+17
+Mining
+6,375
+1,492
+7,873
+North and South America
+2,573
+1,448
+9,931
+Discounted bills
+69
+10,299
+Total for loans and advances to customers
+262,569
+54,569
+74,144
+60,296
+(ii) Analysis by location of the counterparties
+Mainland China
+Asia Pacific (excluding Mainland China)
+of which attributed to Hong Kong
+Europe
+226,140
+8,145
+70,512
+Subtotal for personal loans
+Subtotal for corporate loans
+191,988
+65,999
+161,272
+50,365
+Personal mortgage and business loans
+27,336
+3,531
+26,211
+7,156
+Others
+43,176
+4,614
+28,358
+2,775
+7,707
+46,341
+11,782
+5,229
+402,876
+11,629
+3,588
+1,499
+24,707
+26,206
+1,640,498
+Manufacturing
+596,535
+100,133
+63,253
+24,641
+27,168
+51,809
+1,550,544
+Production and supply of electricity, heating
+Transportation, storage and postal services
+assessed
+Gross loans
+and advances
+to customers
+to customers
+Loans and
+advances
+covered by
+collateral
+Overdue
+loans and
+advances
+Total
+Loans and
+individually
+assessed to
+Allowance for impairment losses
+Individually
+Collectively
+be impaired
+assessed
+advances
+gas and water
+891,870
+166,134
+12,875
+37,540
+Real estate
+642,423
+423,175
+22,288
+24,665
+9,556
+9,155
+13,238
+Water, environment and public utility management
+536,718
+228,496
+2,068
+4,083
+59,057
+80,928
+349,761
+1,518
+511
+241
+12,983
+13,224
+Leasing and commercial services
+828,686
+432,921
+9,836
+5,103
+2,250
+12,146
+14,396
+Wholesale and retail
+776,739
+31 December 2016
+Analysis by industry sector
+(i)
+(e) Loans and advances to customers
+262,675
+69,083
+370,270
+50,526
+100,621
+124,562
+16,904
+9,332
+285,041
+401,338
+281,452
+1,053,262
+83,266
+1,819,318
+156,345
+21,608
+of which attributed to Hong Kong
+North and South America
+1,534,277
+International claims refer to the sum of cross-border claims in all currencies and local claims in foreign currencies, including
+loans and advances to customers, balances with central banks, amounts due from banks and other financial institutions and
+debt investments.
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head
+Office is located in another country.
+31 December 2016
+Banks and
+other
+financial
+institutions
+Official
+Non-bank
+private
+sector
+sector
+Others
+Total
+Asia Pacific
+350,812
+180,831
+928,700
+73,934
+31 December 2015
+1,302
+Banks and
+other
+financial
+Non-bank
+private
+64,007
+79,366
+7,706
+229,929
+344,654
+185,864
+78,850
+971,996
+1,575,940
+Annual Report 2016
+273
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+73,426
+North and South America
+351,431
+55,769
+institutions
+sector
+sector
+Others
+Total
+Asia Pacific
+265,804
+121,857
+892,630
+65,720
+1,346,011
+of which attributed to Hong Kong
+20,074
+18,258
+257,330
+Official
+243
+7,820
+8,063
+Gross loans
+and advances
+to customers
+Loans and
+advances
+covered by
+collateral
+Overdue
+loans and
+advances
+advances
+individually
+assessed to
+Loans and
+Allowance for impairment losses
+Collectively
+to customers
+be impaired
+assessed
+assessed
+Total
+Individually
+*
+31 December 2015
+Please see section (e) (iii) for the definition of overdue loans and advances to customers.
+346,127
+160,469
+300
+65,557
+44
+344
+223,955
+289,512
+Current market value of collateral held against
+the covered portion of overdue loans and advances *
+302,018
+Covered portion of overdue loans and advances *
+140,692
+205,435
+*
+Uncovered portion of overdue loans and advances *
+Manufacturing
+7,438,523
+1,603,631
+94,341
+30,150
+Production and supply of electricity, heating
+gas and water
+835,616
+161,857
+2,726
+13,403
+2,341
+13,654
+15,116
+Leasing and commercial services
+724,246
+425,061
+9,762
+1,462
+16,747
+48,829
+83,422
+54,124
+21,447
+25,390
+46,837
+Transportation, storage and postal services
+1,551,248
+437,972
+11,537
+4,262
+1,817
+25,349
+27,166
+Wholesale and retail
+866,779
+433,413
+644,478
+1,995
+598
+719,993
+6,434
+4,396
+1,970
+3,394
+5,364
+Science, education, culture and sanitation
+80,341
+136,799
+927
+687
+270
+1,987
+2,257
+Others
+42,783
+212,450
+Construction
+1,010
+Mining
+274,273
+43,017
+9,613
+6,819
+3,672
+5,249
+8,921
+Finance
+251,733
+78,695
+879
+50
+34
+976
+397,951
+1,728
+207,188
+5,549
+699,059
+207,874
+32,727
+16,473
+16,473
+Subtotal of personal loans
+Others
+4,196,169
+85,749
+98,883
+98,883
+Discounted bills
+Total loans and advances to customers
+719,993
+13,056,846
+3,666,608
+82,410
+82,410
+53,022
+1,689
+6,568
+8,257
+Subtotal of corporate loans
+8,140,684
+3,051,922
+258,650
+159,871
+65,257
+125,028
+190,285
+Personal mortgage and business loans
+3,497,110
+3,458,734
+Notes to the Financial Statements
+12,397
+77,630
+11,933,466
+12,043
+31 December
+As at
+Foreign currency current assets to foreign
+currency current liabilities
+RMB current assets to RMB current liabilities
+(b) Liquidity ratios
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and
+IFRSS for the year ended 31 December 2016 (2015: no differences). There are no differences between the equity attributable
+to equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2016 (31 December 2015: no
+differences).
+2016
+35.72%
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+For the year ended 31 December 2016
+Unaudited Supplementary Financial Information
+271
+Annual Report 2016
+The financial statements were approved and authorised for issue by the board of directors on 30 March 2017.
+60. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+(In RMB millions, unless otherwise stated)
+Average for
+the year
+ended
+31 December
+2016
+35.81%
+As at
+31 December
+31 December 2016
+HKD
+278,761
+1,956,566
+Spot assets
+USD
+(c) Foreign currency concentrations
+The Group prepares the liquidity ratios on a semi-annual basis and the disclosed average liquidity ratio is the arithmetic mean
+of two consecutive liquidity ratios as at 30 June and 31 December.
+The above liquidity ratios are calculated in accordance with the formula promulgated by the CBRC and based on the
+financial information prepared in accordance with PRC GAAP.
+103.42%
+35.58%
+2015
+Average for
+the year
+ended
+31 December
+98.12%
+94.37%
+82.28%
+2015
+35.50%
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+Spot liabilities
+59. COMPARATIVE AMOUNTS
+58. AFTER THE REPORTING PERIOD EVENT
+The profit distribution plan
+79,375
+Including: Preference shares
+79,375
+79,375
+41
+Other equity instruments
+79,375
+356,407
+40
+486,426
+19,285,200
+20,878,151
+481,236
+39
+240,175
+356,407
+Reserves
+22
+42
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+270
+21,046,946
+22,788,080
+TOTAL EQUITY AND LIABILITIES
+1,761,746
+1,909,929
+TOTAL EQUITY
+729,783
+872,290
+Retained profits
+596,181
+601,857
+A final dividend of RMB0.2343 per share after the appropriation of statutory surplus reserve and general reserve, was
+approved at the board of directors' meeting held on 30 March 2017, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2016, the final dividend amounted to approximately RMB83,506 million. The dividend payable was not recognised as a
+liability as at 31 December 2016.
+279,446
+(1,836,172)
+Others
+567,622
+(431,912)
+Net long position
+58
+(3,322)
+Net option position
+(1,878,649)
+1,845,791
+Net structural position
+Total
+2,161,808
+(2,055,864)
+(21,979)
+(1,277,231)
+Forward sales
+53,298
+1,263,904
+Forward purchases
+Others
+451,411
+(375,988)
+528,589
+(579,439)
+23,620
+21,629
+(200)
+24,373
+.
+capital and statutory reserves of overseas branches; and
+•
+property and equipment, net of depreciation charges;
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+ICBC
+272
+83,812
+23,441
+2,196
+58,175
+69,622
+(3,464)
+(247,850)
+(303,924)
+(1,432,026)
+238,102
+Net option position
+35,970
+(1,122,168)
+(104,903)
+(2,887,047)
+Forward sales
+(43,266)
+3,979,528
+173,932
+2,797,668
+Forward purchases
+(2,572,008)
+2,802,949
+Total
+1,007,928
+543
+(102)
+(42,825)
+1,472,295
+Spot assets
+HKD
+USD
+31 December 2015
+113,363
+28,359
+1,863
+83,141
+Net structural position
+53,526
+21,368
+44,409
+(12,251)
+Net (short)/long position
+Spot liabilities
+investments in overseas subsidiaries, associates and joint ventures.
+38
+51,051
+On 23 March 2016, the MOF issued "Notice of Overall Implementation of Pilot Program for Value Added Tax Replacing
+Business Tax" (Cai Shui [2016] No. 36). Pursuant to the Notice, value added tax replacing the existing business tax has been
+levied for certain pilot industries, including financial industry, since 1 May 2016 on a national-wide basis, the applicable tax
+rate for the Bank is 6%. Value added tax and related underlying value of the invoice for value added taxable income and
+expenses shall be stated and accounted for separately. Such changes had impacts on both the Group's consolidated financial
+statements and related financial indicators.
+The impact of value added tax replacing business tax
+56. OTHER IMPORTANT MATTERS
+Due to customers
+Other financial liabilities
+Due to banks and other financial institutions
+Repurchase agreements
+Liabilities
+Annual Report 2016
+Other financial assets
+Reverse repurchase agreements
+Due from banks and other financial institutions
+Balances with central banks
+Assets
+Those financial instruments for which their carrying amounts are the reasonable approximations of their fair values because,
+for example, they are short term in nature or repriced at current market rates frequently, are as follows:
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of
+the Group and the Bank's assets and liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+Loans and advances to customers
+269
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+25
+Reverse repurchase agreements
+Derivative financial assets
+Financial assets designated at fair value through profit or loss
+Financial assets held for trading
+21
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+2015
+31 December
+31 December
+2016
+Notes
+57. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+(In RMB millions, unless otherwise stated)
+(iii) Available-for-sale equity investments measured at cost were all non-listed shares. The fair values are estimated on the
+basis of pricing models or discounted cash flows. The fair value was approximately the same with its book value and
+classified in fair value hierarchy level 3.
+Loans and advances to customers
+The fair values of held-to-maturity investments, subordinated bonds and tier 2 capital notes are determined with
+reference to the available market values. If quoted market prices are not available, then fair values are estimated on
+the basis of pricing models or discounted cash flows.
+(i)
+Receivables
+19,943
+2,887,836
+2,813,091
+Held-to-maturity investments
+Financial assets
+338,839
+Level 3
+Level 1
+Fair value
+amount
+Carrying
+2015
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Level 2
+339,918
+2,637,893
+121,305
+230,000
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described below
+are adopted to determine the fair values of these assets and liabilities:
+192,431
+192,431
+192,431
+192,431
+181,092
+181,092
+Subordinated bonds and Tier 2 Capital Notes
+Subtotal
+Financial liabilities
+448,613
+2,759,198
+19,943
+3,227,754
+3,151,930
+Subtotal
+218,613
+The receivables are not quoted in an active market. The fair values of those receivables relating to the restructuring
+of the Bank are estimated on the basis of the stated interest rates and the consideration of the relevant special
+clauses of the instruments evaluated in the absence of any other relevant observable market data, and the fair values
+approximate to their carrying amounts. The fair values of receivables other than those relating to the restructuring of
+the Bank are estimated on the basis of pricing models or discounted cash flows.
+62,136
+Financial investments
+Investments in associates
+Other liabilities
+Debt securities issued
+Income tax payable
+Due to customers
+Certificates of deposit
+Repurchase agreements
+TOTAL LIABILITIES
+Due to banks and other financial institutions
+Financial liabilities designated at fair value through profit or loss
+Due to central banks
+LIABILITIES
+21,046,946
+22,788,080
+TOTAL ASSETS
+Derivative financial liabilities
+EQUITY
+Share capital
+33
+15,781,673
+17,235,587
+37
+150,113
+194,503
+36
+130,830
+2,103,289
+33,144
+297,414
+379
+352,001
+58,179
+1,920,782
+304,987
+35
+32 mm 3 m
+34
+24
+371,556
+Investments in subsidiaries
+479,196
+20,354
+24
+206,282
+272,118
+115,950
+184,074
+772,568
+62,892
+927,705
+3,290,270
+22222222023 ≈≈
+Other assets
+Deferred income tax assets
+Property and equipment
+29
+2,991,619
+33,290
+502,296
+792,876
+27,334
+31
+129,669
+124,089
+34,242
+34,242
+101,066
+102,288
+28
+4,450,998
+4,748,376
+27
+11,026,476
+12,033,200
+26
+32
+(d) International claims
+(4,114,118)
+160,469
+1,886,536
+X25
+4,340
+3,164
+Core tier 1 capital before regulatory adjustments
+Valid portion of minority interests
+1,713,160
+56
+period (only applicable to non-joint stock companies.
+Valid portion to core tier 1 capital during the transition
+4
+X24
+(5,799)
+(21,640)
+Fill in 0 for joint stock banks)
+Others
+9
+7
+(3,869)
+(4,618)
+Deferred tax assets that rely on future profitability
+excluding those arising from temporary differences
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+11
+10
+X16
+X14-X15
+Core tier 1 capital: Regulatory adjustments
+1,356
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+8,478
+9,001
+63,446
+Prudential valuation adjustments
+184
+1,477
+3b
+X19
+151,963
+178,040
+205,021
+Surplus reserve
+2a
+1,206,249
+1,396,607
+X21
+Retained earnings
+X18
+356,407
+356,407
+Index
+2015
+31 December
+2
+2b
+General reserve
+251,349
+151,998
+Capital reserve
+За
+public reserves)
+146,164
+130,358
+Accumulated other comprehensive income (and other
+3
+X23
+781,853
+940,237
+Retained profits
+2c
+X22
+246,356
+X20
+12
+Shortfall of provision for loan impairment
+13
+29,414
+13,571
+29,901
+13,798
+25,394
+Central China
+47,815
+46,969
+7,398
+21,427
+7,628
+28,049
+Northeastern China
+16,716
+20,570
+Pearl River Delta
+37,747
+10,675
+36,058
+12,073
+31,426
+Western China
+64,688
+26,498
+12,241
+28,178
+12,668
+36,473
+Yangtze River Delta
+52,983
+27,327
+10,551
+27,693
+8,363
+31 December
+2016
+3,665
+3,711
+19
+investment in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+--
+Deductible amount of non-significant minority
+18
+banks or between banks and other financial institutions
+20
+Directly or indirectly holding in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+16
+Defined-benefit pension fund net assets (net of related
+deferred tax liabilities)
+15
+Unrealized gains and losses due to changes in own credit
+risk on fair valued liabilities
+14
+Gain on sale related to asset securitization
+17
+21
+22
+278
+11,386
+Overseas and others
+19,601
+6,998
+3,459
+7,555
+4,486
+7,139
+Total
+N/A N/A
+ICBC
+1 capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier
+Deductible amount in deferred tax assets arising from
+temporary differences
+Deductible amount of significant minority investment
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+8,452
+Paid-in capital
+Goodwill (net of deferred tax liabilities)
+Item
+9,113
+24,372
+51,568
+Pearl River Delta
+28,325
+8,431
+24,610
+26,305
+25,973
+58,973
+Bohai Rim
+32,952
+8,870
+25,265
+8,304
+9,187
+22,883
+Central China
+16,028
+Overseas and others
+10,401
+3,304
+6,038
+3,215
+5,997
+15,109
+Northeastern China
+24,669
+7,352
+18,673
+7,335
+18,294
+39,890
+8,783
+5,829
+24,800
+Western China
+Collectively
+assessed
+Core tier 1 capital:
+Individually
+assessed to
+Individually
+assessed
+allowance for
+impairment
+losses
+be impaired
+Gross amount
+allowance for
+Individually
+assessed to
+Impaired loans
+and advances to customers
+Overdue loans
+31 December 2015
+223,955
+65,557
+and advances to customers
+impairment
+impairment
+be impaired
+36,233
+10,111
+28,627
+9,980
+27,867
+67,431
+68,270
+476
+598
+476
+600
+20,288
+Head Office
+Yangtze River Delta
+losses
+losses
+63,411
+3,090
+Individually
+assessed
+allowance for
+3,768
+Individually assessed allowance for impairment losses
+Off-balance sheet exposure
+On-balance sheet exposure
+(g) Exposures to Mainland China non-bank entities
+0.01%
+0.00%
+2016
+Over 12 months
+16
+16
+The Group's gross placements with banks and other financial institutions which
+have been overdue with respect to either principal or interest for a period of:
+Over 12 months
+2015
+2016
+(f) Overdue placements with banks and other financial institutions
+As a percentage of total gross placements with banks and other
+financial institutions:
+2015
+15,090,659
+2,764,365
+5,664
+1
+(i) Capital composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on CBRC Notice on issuing regulatory documents on capital regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(h) Correspondence between balance sheet in published financial statements and capital
+composition
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+277
+Annual Report 2016
+In addition to those disclosed above, exposures to other non-bank counterparties outside Mainland China to which credit is
+granted for use in Mainland China are considered insignificant to the Group.
+51,127
+64,183
+16,303,053
+17,855,024
+14,033,030
+2,270,023
+0.03%
+2,987
+Unaudited Supplementary Financial Information
+4,143
+31 December 2015
+31 December 2016
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(v) Renegotiated loans and advances to customers
+ICBC
+276
+% of total
+229,155
+135,780
+133,732
+332,698
+Total
+0.03%
+5,422
+51,499
+% of total
+50,296
+loans and
+loans and
+(0.01%)
+(1,570)
+(1,398)
+overdue for more than three months
+for less than three months
+0.04%
+(0.01%)
+0.04%
+advances
+4,557
+advances
+Renegotiated loans and advances
+Renegotiated loans and advances overdue
+Less: Renegotiated loans and advances
+5,541
+(In RMB millions, unless otherwise stated)
+31 December
+2016
+For the year ended 31 December 2016
+279
+Annual Report 2016
+Others that should be deducted from additional tier 1
+capital
+41c
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+41b
+--
+Investment in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Unaudited Supplementary Financial Information
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+--
+Significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+40
+40
+Deductible amount of non-significant minority
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+Directly or indirectly holding additional tier 1 capital of
+the Bank
+39
+38
+37
+Additional tier 1 capital: Regulatory adjustments
+31 December
+adjustments
+79,567
+41a
+2015
+154,861
+Item
+X27
+79,794
+1,001
+4,236
+Valid portion of minority interests
+48
+transition period
+144,158
+121,710
+Invalid instruments to tier 2 capital after the
+47
+X17
+180,242
+Tier 2 capital instruments and related premium
+46
+Tier 2 capital:
+79,567
+1,781,062
+1,954,770
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+45
+79,794
+Additional tier 1 capital
+44
+Total regulatory adjustments to additional tier 1
+capital
+43
+Undeducted shortfall that should be deducted from tier 2
+capital
+42
+Index
+Additional tier 1 capital before regulatory
+financial institutions that are under control but not
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+26c
+subject to consolidation
+Shortfall in core tier 1 capital instruments issued by
+26b
+X11
+5,700
+5,700
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+26a
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+25
+N/A
+N/A
+Index
+2015
+31 December
+31 December
+2016
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+investments in core tier 1 capital
+Including: Deductible amount of significant minority
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+24
+24
+23
+Item
+49
+27
+36
+Others that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+28
+35
+X26
+192
+419
+Valid portion of minority interests
+34
+transition period
+Invalid instruments to additional tier 1 capital after the
+33
+Including: Portion classified as liabilities
+32
+X28
+79,375
+79,375
+Including: Portion classified as equity
+31
+79,375
+79,375
+Additional tier 1 capital instruments and related premium
+30
+Additional tier 1 capital:
+11,665
+1,701,495
+1,874,976
+Core tier 1 capital
+29
+11,560
+Total regulatory adjustments to core tier 1 capital
+additional tier 1 capital and tier 2 capital
+Including: Invalid portion to tier 2 capital after the
+financial
+statements (i)
+50
+is 10 December
+2021, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+The First
+Redemption Date
+is 10 December
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+The First
+Redemption Date
+is 18 November
+2020, in full or
+partial amount
+Commences on the
+First Redemption
+Date (18 November
+2020) and ends
+on the completion
+date of redemption
+or conversion of
+all the Domestic
+Preference Shares
+Annual Report 2016
+285
+286
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+Ordinary shares
+capital instrument
+(A share)
+Ordinary shares
+(H share)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Preference
+shares (Domestic)
+Coupons/dividends
+The First
+Redemption Date
+Including: Fixed or floating
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+is 10 December
+shares(A share)
+No
+RMB86,795
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+No maturity date
+Ordinary
+shares(H share)
+No
+N/A
+N/A
+USD2,940
+Other equity
+10 December 2014
+Perpetual
+No maturity date
+Preference
+shares(Offshore)
+Yes
+10 December 2014
+Perpetual
+No maturity date
+Preference
+shares(Offshore)
+Yes
+Perpetual
+No maturity date
+Preference
+shares(Offshore)
+Yes
+RMB45,000
+Other equity
+18 November 2015
+Perpetual
+No maturity date
+Preference
+shares(Domestic)
+Yes
+Including: Subsequent call dates,
+if applicable
+N/A
+MA
+The First
+Redemption Date
+N/A
+Floating
+Floating
+Fixed to floating
+or cumulative
+Convertible or non-convertible
+Including: If convertible,
+conversion trigger(s)
+No
+Non-cumulative
+No
+Non-cumulative
+No
+No
+Non-cumulative
+Non-cumulative
+No
+No
+Non-cumulative
+Non-cumulative
+No
+No
+Yes
+Yes
+Yes
+Yes
+N/A
+N/A
+Additional Tier 1
+Capital Trigger
+Additional Tier 1
+Capital Trigger
+Including: Non-cumulative
+incentive mechanism
+Including: Redemption
+coupons/dividends
+Fixed to floating
+Fixed to floating
+Fixed to floating
+dividend/coupon
+Including: Coupon rate and
+N/A
+N/A
+any related index
+Including: Existence of a
+N/A
+N/A
+6% (dividend
+rate) before 10
+December 2019
+Yes
+6% (dividend
+rate) before 10
+December 2021
+Yes
+No maturity date
+Ordinary
+6% (dividend
+rate) before 10
+December 2019
+Yes
+Yes
+dividend stopper
+Including: Fully discretionary,
+Fully
+Fully
+discretionary
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+partially discretionary or
+mandatory cancellation of
+4.50% (dividend
+rate) before 18
+November 2020
+19 October 2006
+Perpetual
+RMB269,612
+Share capital,
+Capital reserve
+10 December 2014
+Ordinary shares
+(A share)
+Ordinary shares
+(H share)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+ICBC
+601398
+Securities Law of the
+People's Republic
+of China/China
+ICBC
+ICBC
+ICBC
+1398
+Securities and Futures
+Ordinance of
+4603
+4604
+Hong Kong
+/Hong Kong, China
+Preference
+shares (Offshore)
+ICBC
+84602
+Preference
+shares (Domestic)
+ICBC
+360011
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+(4,618)
+X20
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+(322)
+(17,825)
+Surplus reserve
+205,021
+X21
+General reserve
+251,349
+X22
+Retained profits
+940,237
+Company Law of the
+X23
+7,372
+Including: Valid portion to core tier 1 capital
+3,164
+X25
+Including: Valid portion to additional tier 1 capital
+419
+X26
+Including: Valid portion to tier 2 capital
+4,236
+X27
+284
+ICBC
+(iv) Main features of eligible capital instruments
+Minority interests
+Event or Tier 2
+People's Republic
+Guidance on
+supervisory approval)
+Including: Optional call date,
+contingent call dates and
+redemption amount
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+Group
+Group
+Core tier 1
+capital instrument
+Core tier 1
+capital instrument
+RMB339,126
+RMB169,202
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+17,928
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+Group
+Group
+Additional tier 1
+capital instrument
+RMB11,958
+Additional tier 1
+capital instrument
+RMB44,947
+4,542
+EUR 600
+Other equity
+RMB12,000
+Other equity
+Issuer call (subject to prior
+capital instrument
+Main features of regulatory
+Including: Original maturity date
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Regulatory treatment
+Including: Transition arrangement
+Core tier 1 capital
+Core tier 1 capital
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Including: Post-transition
+Core tier 1 capital
+Core tier 1 capital
+arrangement of Regulation
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Measures on
+Preference Shares,
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Governing Capital of Commercial
+Banks (Provisional)
+Including: Eligible to the parent
+company/group level
+Instrument type
+Amount recognized in regulatory
+capital (in millions, as at the
+latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Additional tier
+1 capital
+Event
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Including: If yes, specify
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+non-compliant features
+Annual Report 2016
+287
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+ICBC
+Tier 2 capital bonds
+ICBC (Asia)
+ISIN: XS0976879279
+BBGID:BBG005CMF4N6
+Tier 2 capital bonds
+ICBC
+1428009
+Tier 2 capital bonds
+The Notes and any non-
+contractual obligations arising
+out of or in connection with
+the Notes will be governed
+by, and shall be construed in
+accordance with English law,
+except that the provision of the
+Notes relating to Subordination
+shall be governed by, and
+construed in accordance with,
+the laws of Hong Kong
+Securities Law of the People's
+Republic of China/China
+Rule 144A ISIN:
+US455881AD47
+features
+No
+No
+No
+N/A
+N/A
+N/A
+N/A
+름름름
+N/A
+N/A
+N/A
+creditor of the
+subordinated
+debts, and
+preference
+shareholders
+creditor of the
+subordinated
+debts, and
+preference
+shareholders
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+ranking senior
+to the Offshore
+Preference Shares,
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+ranking senior
+to the Offshore
+Preference Shares,
+Regulation S ISIN:
+After all liabilities
+of the Bank and
+instruments issued
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+ranking senior
+to the Domestic
+Preference Shares,
+in the same
+liquidation order
+in the same
+liquidation order
+with the holders of
+Parity Obligations
+in the same
+liquidation order
+with the holders of
+Parity Obligations
+in the same
+liquidation order
+with the holders of
+Parity Obligations
+with the holders of
+Parity Obligations
+Non-compliant transitioned
+No
+No
+No
+or guaranteed
+by the Bank
+ranking senior
+to the Offshore
+Preference Shares,
+N/A
+USY39656AC06
+Regulatory treatment
+21 September 2025
+Yes
+No
+N/A
+Debt securities issued
+10 October 2023
+Yes
+10 October 2018,
+in full amount
+N/A
+Fixed
+4.50%
+No
+Mandatory
+No
+Cumulative
+5 August 2019,
+in full amount
+N/A
+Fixed
+5.80%
+No
+Fully discretionary
+No
+Cumulative
+N/A
+Fixed
+4.875%
+No
+Mandatory
+No
+Cumulative
+288
+ICBC
+Debt securities issued
+21 September 2015
+Dated
+USD2,000
+Parent company
+/Group
+Tier 2 capital instrument
+RMB equivalent 13,753
+Debt securities issued
+4 August 2014
+Dated
+5 August 2024
+Including: Transition arrangement of
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+Including: Post-transition arrangement of
+Regulation Governing Capital of
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Commercial Banks (Provisional)
+Including: Eligible to
+the parent company/group level
+Instrument type
+Amount recognized in regulatory capital
+The Notes and the Fiscal
+Agency Agreement shall be
+governed by, and shall be
+construed in accordance with,
+New York law, except that the
+provisions of the Notes relating
+to subordination shall be
+governed by, and construed in
+accordance with, PRC law
+(in millions, as at the latest reporting date)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially
+discretionary or mandatory cancellation of
+coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Tier 2 capital instrument
+RMB equivalent 1,834
+USD500
+Group
+Parent company
+/Group
+Tier 2 capital instrument
+RMB20,005
+RMB20,000
+10 October 2013
+Dated
+Par value of instrument (in millions)
+Including: Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+N/A
+instrument)
+occurs
+Preference
+shares(Offshore)
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+Preference
+shares(Domestic)
+The initial
+conversion price
+is equal to the
+average trading
+price of the A
+Shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Including: If convertible,
+mandatory or optional
+conversion
+N/A
+Including: If convertible,
+N/A
+specify instrument
+type convertible into
+Including: If convertible,
+specify issuer of
+instrument it converts into
+ICBC
+름름
+N/A
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+issuance plan
+Mandatory
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+20 trading days
+preceding 25 July
+Including: If convertible,
+N/A
+NAG
+N/A
+fully or partially
+Main features of regulatory
+Ordinary
+capital instrument
+Including: If convertible,
+shares(A share)
+N/A
+Ordinary
+shares(H share)
+N/A
+conversion rate
+Core tier 1 capital
+N/A
+occurs
+Preference
+shares(Offshore)
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Capital Trigger
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+Preference
+shares(Offshore)
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+Event or Tier 2
+Capital Trigger
+Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+름름
+Core tier 1 capital
+Core tier 1 capital
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Including: If write-down,
+N/A
+N/A
+permanent or temporary
+Including: If temporary write-down,
+N/A
+N/A
+description of write-up
+mechanism
+Position in subordination
+After depositor,
+After depositor,
+hierarchy in liquidation
+general creditor,
+general creditor,
+(specify instrument type
+immediately senior to
+N/A
+Including: If write-down,
+No
+No
+N/A
+N/A
+ICBC
+ICBC
+ICBC
+ICBC
+write-down trigger(s)
+Including: If write-down,
+full or partial
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Core tier 1 capital
+Ordinary shares
+(A share)
+Preference
+(H share)
+shares (Offshore)
+Preference
+shares (Offshore)
+Preference
+Preference
+shares (Offshore)
+shares (Domestic)
+Write-down feature
+No
+No
+No
+No
+Ordinary shares
+transition period
+(4,645)
+1,152
+3,059,633
+270,058
+262,582
+211,559
+204,607
+Precious metals
+220,091
+220,091
+114,619
+114,619
+Placements with banks and
+other financial institutions
+527,415
+527,415
+472,234
+472,234
+Financial assets at fair value through profit
+or loss
+474,475
+474,450
+343,272
+343,246
+Derivative financial assets
+94,452
+Reverse repurchase agreements
+755,627
+Loans and advances to customers
+3,059,633
+12,767,334
+3,350,788
+institutions
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for the current
+period due to phase-out arrangements
+81
+Excluded from core tier 1 capital due to cap
+82
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+83
+Excluded from additional tier 1 capital due to cap
+84
+85
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period due to
+cap
+121,710
+144,158
+26,547
+15,311
+(ii)
+Consolidated financial statements
+Balance sheet
+as in published
+Under
+regulatory
+scope of
+consolidation (i)
+31 December 2016 31 December 2016 31 December 2015 31 December 2015
+Balance sheet
+as in published
+financial
+statements (i)
+Under
+regulatory
+scope of
+consolidation (i)
+Assets
+Cash and balances with central banks
+Due from banks and other financial
+3,350,788
+Available-for-sale financial assets
+1,742,287
+94,452
+755,557
+12,766,888
+1,708,102
+26,101
+Deferred income tax assets
+28,398
+28,398
+21,066
+21,066
+Other assets
+368,232
+Total assets
+24,137,265
+353,794
+24,039,536
+347,004
+337,210
+22,209,780
+22,148,637
+(i)
+Prepared in accordance with PRC GAAP.
+Annual Report 2016
+281
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+31 December 2016 31 December 2016 31 December 2015 31 December 2015
+Balance sheet
+as in published
+financial
+statements (i)
+Under
+regulatory
+scope of
+consolidation (i)
+Balance sheet
+as in published
+financial
+statements (i)
+Under
+regulatory
+scope of
+26,101
+22,968
+22,968
+Construction in progress
+78,870
+78,870
+996,333
+996,333
+11,652,812
+11,652,264
+1,444,195
+1,421,231
+Held-to-maturity investments
+2,973,042
+2,972,444
+2,870,353
+2,869,642
+80
+Receivables
+245,221
+352,143
+326,339
+Long term equity investments
+30,077
+35,777
+24,185
+29,885
+Fixed assets
+220,651
+220,609
+195,401
+195,357
+291,370
+X04
+58,017
+13,498
+13,600
+231,041
+2,012,103
+13,216,687
+Requirements for capital adequacy ratio and reserve capital
+61
+Core tier 1 capital adequacy ratio
+12.87%
+12.87%
+62
+Tier 1 capital adequacy ratio
+13.42%
+13.48%
+63
+Capital adequacy ratio
+14.61%
+15.22%
+64
+Institution specific buffer requirement
+3.5%
+3.5%
+65
+Including: Capital conservation buffer requirement
+2.5%
+2.5%
+66
+Including: Countercyclical buffer requirement
+67
+Including: G-SIB buffer requirement
+1%
+14,564,617
+Total risk-weighted assets
+60
+2,127,462
+51
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+19,195
+178,292
+63,398
+244,641
+X02+X04
+Tier 2 capital: Regulatory adjustments
+52
+53
+54
+55
+56a
+Directly or indirectly holding tier 2 capital of the Bank
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+1%
+Investment in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+5,600
+13,600
+X10
+56c
+Others that should be deducted from tier 2 capital
+57
+Total regulatory adjustments to tier 2 capital
+58
+Tier 2 capital
+5,600
+172,692
+59
+Total capital (tier 1 capital tier 2 capital)
+56b
+consolidation (i)
+68
+7.87%
+37,049
+48,007
+X05+X06+
+X08+X09+X12
+26,859
+21,669
+X07+X13
+N/A
+28,072
+N/A
+20,313
+tier 2 capital
+76
+Provision for loan impairment under the weighted
+approach
+22,504
+17,829
+X01
+77
+Valid cap of provision for loan impairment to tier 2
+capital under the weighted approach
+5,697
+5,381
+X02
+78
+Provision for loan impairment under the internal ratings-
+based approach
+267,008
+262,825
+X03
+79
+Valid cap of provision for loan impairment to tier 2
+capital under the internal ratings-based approach
+Index
+2015
+2016
+31 December
+7.87%
+weighted assets
+Domestic minima for regulatory capital
+69
+70
+Tier 1 capital adequacy ratio
+71
+Core tier 1 capital adequacy ratio
+Capital adequacy ratio
+5%
+5%
+6%
+6%
+Percentage of core tier 1 capital meeting buffers to risk-
+8%
+280
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Item
+Amounts below the thresholds for deduction
+72
+73
+Undeducted amount of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted amount of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Mortgage servicing rights (net of deferred tax liabilities)
+74
+75
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+Valid caps of surplus provision for loan impairment to
+31 December
+8%
+Liabilities
+Due to central banks
+545
+Equity investment
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Including: Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+5,947
+X05
+91,337
+4,086
+610
+X06
+Held-to-maturity investments
+90
+X07
+2,972,444
+Including: Non-significant minority investments in tier 2 capital
+instruments issued by financial institutions
+that are not subject to consolidation
+2,100
+X08
+Receivables
+245,221
+Including: Non-significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+28,292
+X09
+Including: Significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+Long term equity investments
+Including: Investment in core tier1 capital instruments
+issued by financial institutions that are under control
+but not subject to consolidation
+Other debt instrument investment measured at fair value
+that are not subject to consolidation
+instruments issued by financial institutions
+Including: Non-significant minority investments in tier 2 capital
+31 December 2016
+Under
+regulatory
+scope of
+Item
+Loans and advances to customers
+consolidation
+Index
+12,766,888
+Total loans and advances to customers
+13,056,400
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of provision for loan impairment to
+tier 2 capital under the weighted approach
+22,504
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+X01
+X02
+Less: Provision for loan impairment under the Internal
+Ratings-Based Approach
+267,008
+X03
+Including: Valid cap of provision for loan impairment to
+tier 2 capital under the Internal Ratings-Based Approach
+13,498
+X04
+Available-for-sale financial assets
+1,708,102
+Bond investment measured at fair value
+1,612,679
+5,697
+(In RMB millions, unless otherwise stated)
+Including: Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+X10
+X16
+Long-term deferred and prepaid expenses
+4,370
+Repossessed assets
+8,274
+Others
+10,023
+Debt securities issued
+357,937
+Including: Valid portion of tier 2 capital instruments and their premium
+154,861
+X17
+Share capital
+356,407
+X18
+Other equity instruments
+86,051
+Including: Preference shares
+79,375
+X28
+Capital reserve
+151,998
+X19
+Other comprehensive income
+(21,640)
+X24
+Reserve for changes in fair value of available-for-sale financial assets
+9,001
+190,083
+X15
+19,265
+35,777
+5,700
+X11
+100
+X12
+26,769
+X13
+Annual Report 2016
+283
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+31 December 2016
+5,600
+Under
+regulatory
+Item
+Other assets
+Interest receivable
+Intangible assets
+Including: land use rights
+Other receivables
+Goodwill
+consolidation
+Index
+353,794
+111,301
+20,742
+X14
+scope of
+Reserve for cash flow hedging
+For the year ended 31 December 2016
+(iii) Description of related items
+Due to customers
+17,825,302
+17,828,084
+16,281,939
+16,283,105
+Employee benefits payable
+32,864
+32,536
+31,717
+31,470
+Taxes payable
+63,557
+63,500
+75,234
+75,201
+Debt securities issued
+357,937
+357,937
+306,622
+306,622
+Deferred income tax liabilities
+604
+327
+995
+Other liabilities
+594,049
+508,235
+183,352
+183,352
+218,427
+218,427
+Due to banks and other financial institutions
+1,516,692
+545
+1,516,692
+210
+1,788,267
+210
+1,788,267
+Placements from banks and other financial
+institutions
+500,107
+500,107
+477,593
+477,593
+Financial liabilities at fair value through
+profit or loss
+Total liabilities
+Derivative financial liabilities
+366,752
+366,740
+303,927
+303,916
+89,960
+89,960
+76,826
+76,826
+589,306
+579,651
+337,191
+329,896
+Certificates of deposit
+Repurchase agreements
+Unaudited Supplementary Financial Information
+22,156,102
+545,388
+20,409,261
+205,021
+178,040
+178,040
+General reserve
+251,349
+251,349
+246,356
+246,356
+Retained profits
+940,663
+940,237
+781,988
+781,853
+Equity attributable to equity holders of the
+parent company
+1,969,751
+Non-controlling interests
+11,412
+Total equity
+1,981,163
+1,969,423
+7,372
+1,976,795
+1,789,474
+11,045
+1,800,519
+1,788,195
+6,647
+1,794,842
+(i)
+Prepared in accordance with PRC GAAP.
+282
+ICBC
+205,021
+Surplus reserve
+(5,799)
+(4,655)
+754
+496,583
+20,353,795
+Equity
+Share capital
+356,407
+356,407
+356,407
+356,407
+Other equity instruments
+86,051
+86,051
+79,375
+79,375
+Including: Preference shares
+22,062,741
+79,375
+79,375
+79,375
+Perpetual bond
+6,676
+6,676
+Capital reserve
+151,998
+151,998
+151,963
+151,963
+Other comprehensive income
+(21,738)
+(21,640)
+79,375
+42,305
+Amount
+♦ Interest Expense on Due to Banks and Other Financial Institutions
+Other foreign currency bonds
+95,380
+1.9
+81,976
+1.8
+Total
+4,982,776
+100.0
+4,548,687
+100.0
+Annual Report 2016
+25
+Discussion and Analysis
+In terms of currency structure, RMB-denominated bonds rose by RMB351,017 million or 8.2%; USD-denominated bonds
+increased by the equivalent of RMB69,668 million or 39.4%; and other foreign currency bonds increased by an equivalent of
+RMB13,404 million or 16.4%. During the reporting period, the Bank adjusted the currency structure of its foreign currency
+bond portfolios, increased the percentage of USD-denominated bonds and enhanced the liquidity.
+DISTRIBUTION OF INVESTMENT BY HOLDING PURPOSE
+Item
+At 31 December 2016
+Amount
+Percentage
+(%)
+In RMB millions, except for percentages
+At 31 December 2015
+Amount
+Percentage
+(%)
+Financial assets at fair value through
+3.9
+profit or loss (1)
+176,607
+246,275
+1,101,913
+24.2
+4,982,776
+100.0
+4,548,687
+100.0
+Total
+Note: (1) Refers to impaired bonds.
+In terms of remaining maturity structure, bonds not related to restructuring within 1-year maturity decreased by
+RMB145,264 million from the end of the previous year and their percentage decreased by 5.2 percentage points; and bonds
+not related to restructuring beyond 5-year maturity increased by RMB407,258 million or 6.1 percentage points. This is mainly
+due to the increase of medium and long term bonds resulted from the relatively longer maturity of new investment in local
+government bonds.
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY CURRENCY
+In RMB millions, except for percentages
+At 31 December 2016
+At 31 December 2015
+Percentage
+Percentage
+Item
+Amount
+(%)
+RMB-denominated bonds
+4,641,121
+93.1
+Amount
+4,290,104
+(%)
+94.3
+USD-denominated bonds
+5.0
+30.3
+474,475
+343,272
+Maturity
+Policy bank bonds 2007
+17,300
+5.07%
+29 November 2017
+Policy bank bonds 2008
+16,228
+4.95%
+Policy bank bonds 2011
+14,018
+4.49%
+11 March 2018
+25 August 2018
+Policy bank bonds 2011
+11,430
+4.25%
+24 March 2018
+Policy bank bonds 2012
+11,420
+3.94%
+21 August 2019
+Policy bank bonds 2012
+11,300
+4.04%
+Policy bank bonds 2010
+11,050
+Annual
+interest rate
+8.7
+value
+Nominal
+6.9
+Available-for-sale financial assets (2)
+1,742,287
+31.8
+1,444,195
+28.8
+Held-to-maturity investments(2)
+2,973,042
+54.2
+2,870,353
+57.3
+Receivables(2)
+291,370
+5.3
+352,143
+7.0
+Total
+5,481,174
+100.0
+5,009,963
+100.0
+Notes: (1) Includes finanical assets held for trading and financial assets designated at fair value through profit or loss.
+(2) Please see "Note 27. to the Financial Statements: Financial Investments" for details.
+As at the end of 2016, the Group held RMB2,000,925 million of financial bonds', including RMB1,319,450 million of policy
+bank bonds and RMB681,475 million of bonds issued by banks and non-bank financial institutions, accounting for 65.9%
+and 34.1% of financial bonds, respectively.
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+In RMB millions, except for percentages
+Debt securities
+3.51%
+1,509,171
+2,243,337
+0.6
+33,893
+0.6
+Equity instruments and others
+284,639
+5.2
+234,196
+4.7
+Total
+5,481,174
+100.0
+5,009,963
+100.0
+Investment in bonds not related to restructuring amounted to RMB4,982,776 million, representing an increase of
+RMB434,089 million or 9.5% as compared to the end of last year. Investment in bonds related to restructuring amounted
+to RMB179,249 million, representing a decrease of RMB13,938 million, mainly due to advance repayment of part of the
+Huarong bonds. For details of the investment in bonds related to restructuring, please refer to "Note 27.(a) to the Financial
+Statements: Receivables".
+24
+ICBC
+Discussion and Analysis
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY ISSUERS
+In RMB millions, except for percentages
+At 31 December 2015
+Item
+Government bonds
+Central bank bills
+Policy bank bonds
+Other bonds
+Total
+34,510
+At 31 December 2016
+Other debt instruments
+193,187
+INVESTMENT
+In RMB millions, except for percentages
+At 31 December 2015
+Item
+Debt instruments
+Amount
+5,196,535
+At 31 December 2016
+Percentage
+(%)
+Amount
+94.8
+4,775,767
+Percentage
+(%)
+95.3
+Investment in bonds not related to
+restructuring
+4,982,776
+90.9
+4,548,687
+90.8
+Investment in bonds related to restructuring
+179,249
+3.3
+3.9
+49.3
+Percentage
+Amount
+Less than 3 months
+3 to 12 months
+1 to 5 years
+Over 5 years
+At 31 December 2016
+Percentage
+Percentage
+Amount
+(%)
+Amount
+(%)
+150
+0.0
+141
+0.0
+328,648
+6.6
+330,174
+7.3
+729,375
+14.6
+873,122
+19.2
+2,415,432
+48.5
+Undated (1)
+Percentage
+Remaining maturity
+In RMB millions, except for percentages
+(%)
+Amount
+(%)
+2,399,463
+48.1
+1,468,674
+32.3
+58,024
+1.2
+356,425
+7.8
+1,319,450
+26.5
+1,513,092
+33.3
+1,205,839
+24.2
+1,210,496
+26.6
+4,982,776
+100.0
+4,548,687
+100.0
+In terms of distribution by issuers, government bonds increased by RMB930,789 million or 63.4%; central bank bills
+decreased by RMB298,401 million or 83.7%; policy bank bonds went down by RMB193,642 million or 12.8%; and other
+bonds dropped by RMB4,657 million or 0.4%. The Bank stepped up the investment in local government bonds and treasury
+bonds in order to support the development of real economy under the influence of changes in normal maturity of bonds
+and supply structure of the bond market, the balances of central bank bills, policy bank bonds and other bonds declined by
+different extent during the reporting period.
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY REMAINING MATURITY
+At 31 December 2015
+Policy bank bonds 2012
+10,993
+3.76%
+0.5
+Yangtze River Delta
+3,456,697
+19.4
+3,185,840
+19.5
+Pearl River Delta
+2,397,059
+13.4
+2,086,992
+12.8
+Bohai Rim
+4,795,528
+26.9
+4,339,841
+26.6
+Central China
+2,561,772
+14.4
+2,374,052
+14.6
+Western China
+2,881,274
+16.2
+2,717,941
+74,081
+16.7
+0.4
+Head Office
+20.8
+8,140,281
+45.7
+7,601,114
+46.7
+236,501
+1.3
+243,811
+1.5
+17,825,302
+100.0
+16,281,939
+100.0
+Note: (1) Includes outward remittance and remittance payables.
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+At 31 December 2016
+In RMB millions, except for percentages
+At 31 December 2015
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+69,210
+3,390,514
+Northeastern China
+5.5
+(%)
+Amount
+(%)
+9,783,195
+54.9
+8,515,746
+52.3
+2,145,423
+12.0
+2,133,439
+13.1
+3,705,472
+20.8
+3,574,017
+22.0
+2,185,850
+12.3
+2,055,662
+12.6
+5,362
+0.0
+3,075
+0.0
+17,825,302
+100.0
+Amount
+986,703
+Percentage
+At 31 December 2016
+938,199
+5.8
+Overseas and others
+677,059
+3.8
+564,993
+3.5
+Total
+17,825,302
+100.0
+16,281,939
+100.0
+DISTRIBUTION OF DUE TO CUSTOMERS BY REMAINING MATURITY
+Remaining maturity
+Demand deposits(1)
+Less than 3 months
+3 to 12 months
+1 to 5 years
+Over 5 years
+Total
+Note: (1) Includes time deposits payable on demand.
+28
+ICBC
+In RMB millions, except for percentages
+At 31 December 2015
+Percentage
+20.9
+3,720,374
+25.9
+Amount
+16,281,939
+(%)
+79.8
+Due to banks and other financial institutions
+2,016,799
+9.1
+2,265,860
+11.1
+Repurchase agreements
+589,306
+2.7
+337,191
+1.7
+Debt securities issued
+357,937
+1.6
+306,622
+1.5
+Others
+Total liabilities
+1,366,758
+22,156,102
+6.1
+1,217,649
+5.9
+100.0
+80.5
+20,409,261
+17,825,302
+(%)
+25 June 2022
+27 July 2020
+13 July 2019
+Policy bank bonds 2011
+10,505
+4.62%
+22 February 2021
+Policy bank bonds 2014
+10,410
+5.75%
+14 January 2019
+Impairment
+loss
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bills.
+26
+ICBC
+Discussion and Analysis
+Liabilities
+As at the end of 2016, total liabilities of the Bank amounted to RMB22,156,102 million, RMB1,746,841 million or 8.6%
+higher than that at the end of the previous year.
+LIABILITIES
+At December 31, 2016
+In RMB millions, except for percentages
+At December 31, 2015
+Percentage
+Percentage
+Item
+Amount
+Due to customers
+100.0
+Due to Customers
+Due to customers is the Bank's main source of funds. As at the end of
+2016, due to customers was RMB17,825,302 million, RMB1,543,363
+million or 9.5% higher than that at the end of the previous year. In terms
+of customer structure, the balance of corporate deposits increased by
+RMB1,011,506 million or 12.0%; and the balance of personal deposits
+increased by RMB539,167 million or 7.1%. In terms of maturity structure,
+the balance of time deposits increased by RMB456,788 million or 5.6%,
+while the balance of demand deposits increased by RMB1,093,885 million
+or 13.8%.
+Corporate deposits
+Time deposits
+4,176,834
+23.4
+3,929,353
+24.1
+Demand deposits
+5,271,686
+29.6
+4,507,661
+27.7
+Subtotal
+9,448,520
+53.0
+8,437,014
+51.8
+Personal deposits
+Time deposits
+Demand deposits
+Subtotal
+Other deposits (1)
+Total
+4,419,907
+24.8
+4,210,600
+(%)
+Percentage
+Amount
+(%)
+Composition of Due to Customers
+Unit: RMB100 millions
+2,365
+2,438
+3,309
+81,403
+76,011
+71,886
+94,485
+84,370
+80,371
+2014
+In 2016, the Bank continued to improve the bond portfolio investment structure, strongly supported the development of real
+economy, and appropriately expanded its investment scale on the basis of guaranteeing liquidity and controllable risk. As at
+the end of 2016, investment amounted to RMB5,481,174 million, RMB471,211 million or 9.4% higher compared with the
+end of the previous year.
+2015
+Corporate deposits Personal deposits
+Other deposits
+Annual Report 2016
+27
+Discussion and Analysis
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+Item
+In RMB millions, except for percentages
+At 31 December 2015
+At 31 December 2016
+Percentage
+Amount
+2016
+Investment
+Please see "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and their quality.
+Personal loans increased by RMB654,307 million or 18.5% than that at the end of last year. Specifically, residential
+mortgages grew by RMB724,641 million or 28.8%, mainly because the Bank actively supported the citizens' borrowing
+need for owner-occupied houses in line with the adjustment of governmental property policy. Personal consumption
+loans dropped by RMB64,055 million or 20.6%, principally because the Bank strengthened management on the purposes
+of personal consumption loans and personal consumption financing demand declined as Internet-based finance was
+becoming more competitive. Personal business loans declined by RMB38,819 million or 13.2%, mainly dragged down
+by the decreasing demand of some small and micro business owners for effective financing. Credit card overdrafts grew
+by RMB32,540 million or 7.8%, primarily attributable to a stable growth in the number of credit cards issued and their
+consumption volume as well as the development of credit card installment business.
+(5.8)
+Total
+193,112
+220,835
+(27,723)
+(12.6)
+The Bank continued to exercise strict cost control and management. Operating expenses recorded at RMB193,112 million,
+RMB27,723 million or 12.6% lower than that of the previous year. Specifically, taxes and surcharges dropped by RMB25,001
+million, principally because the Bank replaced the business tax with VAT since 1 May 2016, resulting in the decrease of
+business tax expense. Staff costs decreased by 0.7% to RMB113,354 million. Other operating expenses decreased by 5.8%
+to RMB31,966 million, mainly because the tax originally included in the operating expenses was adjusted to taxes and
+surcharges and expenses on electricity, printing, purchase of low-value consumables and other items dropped relatively
+significantly.
+Impairment Losses
+In 2016, the Bank set aside an allowance for impairment losses of RMB87,894 million, an increase of RMB901 million or
+1.0% as compared to that of last year. Specifically, the allowance for impairment losses on loans was RMB86,138 million,
+indicating an increase of RMB116 million or 0.1%. Please refer to "Note 26. to the Financial Statements: Loans and
+Advances to Customers" and "Note 15. to the Financial Statements: Impairment Losses on Assets Other than Loans and
+Advances to Customers" for details.
+Income Tax Expense
+Income tax expense was RMB84,173 million, RMB1,342 million or 1.6% lower than that of the previous year. The effective
+tax rate stood at 23.17%. Please see "Note 16. to the Financial Statements: Income Tax Expense" for the reconciliation of
+income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective income tax rate.
+20
+ICBC
+Discussion and Analysis
+Segment Information
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+SUMMARY OPERATING SEGMENT INFORMATION
+Item
+Corporate banking
+Personal banking
+Treasury operations
+Others
+Total operating income
+In RMB millions, except for percentages
+2016
+(1,967)
+2015
+33,933
+(10.3)
+2016
+2015
+In RMB millions, except for percentages
+Increase/
+(decrease)
+Growth rate
+(%)
+Staff costs
+113,354
+114,173
+(819)
+(0.7)
+Premises and equipment expenses
+28,414
+28,114
+300
+1.1
+Taxes and surcharges
+17,319
+42,320
+(25,001)
+(59.1)
+Amortisation
+Others
+2,059
+2,295
+(236)
+31,966
+Item
+Percentage
+Amount
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+Head Office
+70,265
+11.0
+76,854
+11.5
+Yangtze River Delta
+113,430
+17.7
+117,661
+17.6
+Pearl River Delta
+79,974
+12.5
+81,307
+12.2
+Bohai Rim
+123,491
+19.2
+2015
+Percentage
+2016
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+(%)
+Amount
+(%)
+314,398
+49.0
+325,914
+48.7
+238,133
+37.1
+244,445
+36.6
+84,488
+13.2
+92,612
+13.8
+4,662
+0.7
+5,762
+0.9
+641,681
+100.0
+668,733
+100.0
+Please refer to the section headed "Discussion and Analysis
+each of these operating segments.
+Business Overview" for the details on the development of
+In RMB millions, except for percentages
+OPERATING EXPENSES
+Operating Expenses
+Other non-interest related gain was RMB24,862 million, RMB7,387 million or 42.3% higher than that of the previous year.
+Specifically, net loss on financial assets and liabilities designated at fair value through profit or loss declined by RMB5,849
+million, mainly because of a decrease in the Bank's expenses in payment to customers related to structural deposits due to
+the changes of wealth management product structure. Net trading income increased by RMB2,230 million, mainly driven by
+the increasing income from derivative valuation.
+Investment banking business
+25,024
+26,791
+(1,767)
+(6.6)
+Corporate wealth management services
+20,440
+18,305
+2,135
+11.7
+Asset custody business
+6,893
+5,544
+1,349
+24.3
+Guarantee and commitment business
+5,950
+4,687
+1,263
+26.9
+Trust and agency services
+1,907
+1,979
+(72)
+(3.6)
+(6.7)
+Others
+(1,878)
+26,108
+Interest expense on due to banks and other financial institutions was RMB44,314 million, RMB5,487 million or 11.0% lower
+than the previous year, principally attributable to a decrease of RMB148,365 million in average balance of due to banks and
+other financial institutions.
+♦ Interest Expense on Debt Securities Issued
+Interest expense on debt securities issued was RMB17,470 million, RMB1,369 million or 8.5% higher than that of last year,
+mainly attributable to the increase in the issuance of corporate bonds and bills by overseas institutions. Please refer to "Note
+38. to the Financial Statements: Debt Securities Issued" for the debt securities issued by the Bank.
+Non-interest Income
+The Bank actively optimized income structure. In 2016, the Bank realized non-interest income of RMB169,835 million,
+RMB8,969 million or 5.6% higher than that of the previous year. The non-interest income took up 26.5% of the operating
+income, up 2.4 percentage points. Specifically, net fee and commission income grew by 1.1% to RMB144,973 million, and
+other non-interest income grew by 42.3% to RMB24,862 million.
+NET FEE AND COMMISSION INCOME
+Item
+2016
+2015
+In RMB millions, except for percentages
+Increase/
+(decrease)
+Growth rate
+(%)
+Bank card business
+37,670
+37,684
+(14)
+0.0
+Personal wealth management and
+private banking services
+37,625
+35,910
+1,715
+4.8
+Settlement, clearing business and
+cash management
+27,986
+3,097
+2,784
+313
+6,457
+4,227
+2,230
+52.8
+Net loss on financial assets and liabilities
+designated at fair value through profit or
+loss
+(104)
+(5,953)
+5,849
+N/A
+Net gain on financial investments
+4,545
+4,920
+(375)
+(7.6)
+Other operating income, net
+13,964
+14,281
+(317)
+(2.2)
+Total
+24,862
+17,475
+7,387
+42.3
+Net trading income
+(%)
+Growth rate
+Increase/
+(decrease)
+11.2
+Fee and commission income
+164,714
+161,670
+3,044
+1.9
+Less: Fee and commission expense
+19,741
+18,279
+1,462
+8.0
+Net fee and commission income
+131,004
+144,973
+1,582
+1.1
+Continuously centered on customer demands, the Bank promoted innovation in products, services and channels, offered
+greater discounts for settlement business, and propelled strategic transformation and development of retail, asset
+management, investment banking and other businesses. In 2016, the Bank realized fee and commission income of
+RMB164,714 million, RMB3,044 million or 1.9% higher than that of the previous year. Specifically, income from personal
+wealth management and private banking services increased by RMB1,715 million, mainly due to the increase of income
+from personal insurance brokerage business. Income from corporate wealth management services rose by RMB2,135
+million, mainly due to the increase in investment management fee of corporate wealth management products, income from
+corporate foreign exchange business and income from agency bond issuance and underwriting. Income from asset custody
+business increased by RMB1,349 million, mainly because of the increase of custody assets. Income from guarantee and
+commitment business recorded an increase of RMB1,263 million, mainly due to the growth of income from commitment
+business.
+Income from settlement, clearing business and cash management services and investment banking business was lowered
+compared to the previous year because of a series of factors, including voluntary lowering or exemption of certain business
+fees in order to reduce fees and share profits with the real economy and consumers, greater discounts for settlement
+business, lowered income from personal RMB settlement business, as well as decreased income from international
+settlement business and investment banking advisory services due to external economic environment.
+Annual Report 2016
+19
+Discussion and Analysis
+OTHER NON-INTEREST RELATED GAIN
+In RMB millions, except for percentages
+Item
+2016
+2015
+143,391
+Discussion and Analysis
+19.6
+79,703
+4,983,604
+63.3
+Total
+8,140,684
+100.0
+7,869,552
+100.0
+DISTRIBUTION OF CORPORATE LOANS BY PRODUCT LINE
+In RMB millions, except for percentages
+At 31 December 2015
+At 31 December 2016
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+Working capital loans
+3,420,387
+42.0
+3,454,731
+43.9
+Including: Trade finance
+601,526
+66.5
+7.4
+5,410,811
+36.7
+719,993
+5.5
+522,052
+4.4
+4,196,169
+13,056,846
+32.1
+100.0
+3,541,862
+11,933,466
+29.7
+100.0
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+In RMB millions, except for percentages
+At 31 December 2016
+At 31 December 2015
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+Short-term corporate loans
+2,729,873
+33.5
+2,885,948
+Medium to long-term corporate loans
+65.9
+670,325
+Project loans
+Residential mortgages
+3,240,838
+77.2
+2,516,197
+71.1
+Personal consumption loans
+247,020
+5.9
+311,075
+8.8
+Personal business loans
+256,272
+6.1
+295,091
+8.3
+Credit card overdrafts
+452,039
+10.8
+419,499
+11.8
+Total
+4,196,169
+100.0
+3,541,862
+100.0
+(%)
+8.5
+(%)
+Item
+4,209,340
+51.7
+3,936,017
+50.0
+Property loans
+510,957
+6.3
+478,804
+6.1
+Total
+8,140,684
+100.0
+7,869,552
+100.0
+Corporate loans rose by RMB271,132 million or 3.4% from the end of last year. In terms of product type, working capital
+loans reduced by RMB34,344 million, mainly because of the decrease in enterprises' credit demands for working capital
+as affected by economic structural adjustment and industry transformation and upgrading and decrease in import and
+export values. Project loans increased by RMB273,323 million or 6.9%, mainly due to the continuous support for national
+key programs and significant projects and the strengthened support for development of real economy and industry
+transformation and upgrading.
+Discounted bills rose by RMB197,941 million or 37.9% compared with the end of last year, principally because the Bank
+moderately increased its asset allocation to discounted bills to satisfy the management requirements of asset-liability
+portfolios.
+Annual Report 2016
+23
+Discussion and Analysis
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+In RMB millions, except for percentages
+At 31 December 2015
+At 31 December 2016
+Percentage
+Percentage
+Amount
+7,869,552
+62.4
+8,140,684
+As at the end of 2016, total assets of the Bank amounted to RMB24,137,265 million, RMB1,927,485 million or 8.7% higher
+than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as "total
+loans") increased by RMB1,123,380 million or 9.4%, investment increased by RMB471,211 million or 9.4%, and cash and
+balances with central banks increased by RMB291,155 million or 9.5%. In terms of structure, net loans and advances to
+customers accounted for 52.9% of total assets; investment accounted for 22.7%; and cash and balances with central banks
+accounted for 13.9%.
+ASSETS DEPLOYMENT
+At 31 December 2016
+In RMB millions, except for percentages
+At 31 December 2015
+Item
+Total loans and advances to customers
+Amount
+13,056,846
+Percentage
+(%)
+Amount
+11,933,466
+Percentage
+(%)
+Less: Allowance for impairment losses on
+loans
+289,512
+280,654
+Loans and advances to customers, net
+12,767,334
+52.9
+11,652,812
+52.5
+Investment
+5,481,174
+22.7
+5,009,963
+22.5
+Assets Deployment
+Cash and balances with central banks
+Due from banks and other financial
+institutions
+Discussion and Analysis
+Annual Report 2016
+12.4
+84,447
+12.6
+Western China
+97,032
+15.1
+104,258
+15.6
+Northeastern China
+28,451
+4.4
+30,897
+4.6
+Overseas and others
+49,335
+7.7
+6.3
+Total operating income
+641,681
+100.0
+668,733
+100.0
+Note: Please see "Note 53. to the Financial Statements: Segment Information" for the Bank's classification of geographic regions.
+Balance Sheet Analysis
+In 2016, the Bank timely adjusted its business strategy based on the external macroeconomic environment, improved the
+asset and liability structure, maintained coordinated development of deposit and loan business, and enhanced the efficiency
+of resource allocation for assets and liabilities. Taking development needs of the real economy into account, the Bank
+reasonably controlled the aggregate amount, direction and pace of lending. Closely monitoring the trends of the domestic
+and international financial markets, the Bank appropriately expanded its investment scale and optimized the structure of
+investment portfolios. Furthermore, the Bank actively adopted measures to promote steady growth in due to customers, and
+refined the liability period structure, thereby ensuring a stable and sustainable growth of funding sources.
+21
+3,350,788
+13.9
+3,059,633
+81,407
+78,696
+2014
+2015
+Corporate loans
+2016
+Discounted bills
+Personal loans
+22
+ICBC
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Item
+Corporate loans
+Discounted bills
+Personal loans
+Total
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2015
+At 31 December 2016
+Percentage
+Percentage
+Amount
+(%)
+Amount
+(%)
+76,126
+3,503
+5,221
+7,200
+13.8
+797,473
+3.3
+683,793
+3.1
+Reverse repurchase agreements
+Others
+Total assets
+755,627
+3.1
+996,333
+4.5
+Central China
+984,869
+24,137,265
+807,246
+3.6
+100.0
+22,209,780
+100.0
+Loan
+In 2016, in response to the changes in macroeconomic environment and
+financial regulatory requirements, the Bank actively implemented national
+policies, further supported the supply-side structural reform, continued
+to improve the credit structure and worked hard to enhance its quality
+and efficiency in serving the real economy. The Bank continued to bolster
+the government's key programs and significant construction projects, and
+proactively aligned with the national development strategies on the "four
+regions" (western regions, northeastern regions, eastern regions and
+central regions) and the "three supporting belts" (the "Belt and Road"
+initiative, the coordinated development of the Beijing-Tianjin-Hebei region
+and the development of the Yangtze River Economic Zone). In addition,
+it strove to promote the innovative small and micro enterprises financial
+service model and took initiatives to back up the citizens' reasonable credit
+requirement and consumption upgrading. As at the end of 2016, total
+loans amounted to RMB13,056,846 million, RMB1,123,380 million or
+9.4% higher compared with the end of the previous year, of which, RMB-
+denominated loans of domestic branches were RMB11,442,941 million,
+RMB844,905 million or 8.0% higher than that at the end of 2015.
+Composition of Loan
+Unit: RMB100 millions
+41,962
+35,419
+30,635
+4.1
+16,281,939
+100.0
+Best Corporate Digital Bank in China
+Best Market Risk Management in China
+The Best Cash Management Bank in China
+The Best Asian International Cash Management Bank in Asia Pacific
+Custodian Bank of the Year in China
+The Asian Banker
+Best Bank in China
+FinanceAsia
+Best Private Bank for Global Investment Exposure
+Best Private Bank in China
+Best Domestic Bank in China
+Asiamoney
+Best Precious Metal Trading Bank in China
+The Asset
+Best Cash Manager in China
+Best Consumer Digital Bank in China
+Best Precious Metals Broker in China
+Best Consumer Credit Card Program in China
+Best Corporate Bank in China
+Best Bank in China
+World's Best Emerging Markets Bank
+Global Finance
+OVERSEAS AWARDS
+2016 Awards
+The 4th place among the Top 500 Enterprises of China
+Ranking in terms of operating income
+China Enterprise Confederation
+The 27th place among the Top 100 Most Valuable Global Brands
+(The 2nd place among the brands of financial institutions)
+Ranking in terms of brand value
+Euromoney
+Millward Brown
+The Asset Corporate Award
+Best Private Bank in China
+Best Domestic Bond House in China
+Platinum Award
+PBC Technological Development Award
+PBC
+DOMESTIC AWARDS
+Award for Best Foreign Card Merchant Development
+Most Popular Product Award
+JCB
+Best Product Design Award - ICBC-Shangri-La Co-brand Card
+Award for Best Fraud Risk Control
+MasterCard Worldwide
+Visa High-end Merchant Co-brand Card
+Visa Best Payment Innovation Award
+Visa Risk Control
+Visa Best Partner
+_
+Visa Cross-border Promotion
+Recognition of Performance Excellence 9th APCCAL Awards
+Asia Pacific Contact Centre Association Leaders
+Chairman Yi Huiman:
+Listed Companies
+Best Listed Company
+Most Influential Leader
+Ta Kung Wen Wei Media Group
+Hong Kong Corporate Governance Excellence Award
+The Chamber of Hong Kong Listed Companies
+Precious Metal Trading Bank in China
+Financial Times
+Golden Award for Best RMB Internationalization Service
+(Greater China)
+Institutional Investor
+Visa Inc.
+CBRC
+The 1st place among the Top 500 Banking Brands rankings
+Ranking in terms of brand value of a bank
+(The 1st place on the sub-list of commercial banks)
+Ranking in terms of operating income
+19
+929,214
+1,427,088
+Inflows from fully performing exposures
+18
+403,992
+1,131,364
+Secured lending (including reverse repos and securities borrowing)
+17
+Cash inflows
+5,805,623
+Total cash outflows
+Other cash inflows
+16
+750,628
+Other contingent funding obligations
+15
+42,207
+42,344
+Other contractual funding obligations
+14
+174,767
+2,099,231
+Credit and liquidity facilities
+13
+Outflows related to loss of funding on debt products
+17,328
+Brand Finance
+1,037,439
+20
+The 15th place among the Global 500
+Fortune
+The 1st place among the Top 1000 World Banks
+Ranking in terms of tier 1 capital of a bank
+The Banker
+Ranking in terms of combination of sales, profit,
+assets and market value
+The 1st place among the Global 2000
+Forbes
+2016 Ranking
+2016 Ranking and Awards
+291
+Annual Report 2016
+139.75%
+1,032,815
+Data of the above table are all the simple arithmetic means of the month-end figures of the recent quarter.
+3,439,602
+4,803,766
+23
+Total net cash outflows
+22
+Total HQLA
+21
+value
+Total adjusted
+2,366,021
+3,595,891
+Total cash inflows
+Liquidity coverage ratio (%)
+Award for Excellent Performance in the "Popularizing Financial
+Knowledge" Service Promotion Month
+Ministry of Industry and Information Technology, China
+Electronics Chamber of Commerce
+Best Call Center of the Year
+Excellent Board of Directors of China's Strategic Listed
+Companies
+Banker of the Year Chairman Yi Huiman
+Best Commercial Bank in Asia
+21st Century Business Herald
+Top Ten Innovative Institutions in Internet-based Finance
+of the Year
+Best Commercial Bank of the Year
+Financial News, Institute of Finance and Banking, Chinese
+Academy of Social Sciences
+Excellent Banker of the Year Chairman Yi Huiman
+Most Respectable Enterprise
+The Economic Observer
+Excellent Private Bank of the Year
+Organizing Committee of the 21st Century Asian Finance
+Annual Conference
+Most Responsible Enterprise
+Best Asset Management Bank in China
+China News Service
+Creative Communication Management Research Centre of
+Peking University
+Pioneer Enterprises for Achieving SDGs
+Global Compact Network China
+Most Influential Financial Brand (ICBC Mobile)
+Chinese Financial Brand Bauhinia Award Best 10 Social
+Marketing Cases of the Chinese Banking Industry
+(Selection of ICBC Smart Girls)
+_
+Best Mobile Financial Social Platform (ICBC Link)
+Chinese Financial Brand Bauhinia Award
+Chinese Financial Brand Bauhinia Award
+Sina Finance, Chinese Financial Research Center of Tsinghua
+SEM, Center for Internet Development and Governance of
+Tsinghua SEM, Internet Finance Institute
+2016 Ranking and Awards
+293
+Annual Report 2016
+Recognition of Performance Excellence 9th APCCAL Awards
+Best Brand for Spirit of Innovation in Mobile Marketing of
+the Year (ICBC Link)
+Asia Pacific Call Center Association Leaders
+China Business Journal
+China Fund Newspaper
+Financial Computerizing
+-Gold E-banking of the Year
+"Golden Pixiu" Awards Gold Innovative Financial Product
+of the Year (Open-end Internet-based Banking)
+Gold Credit Card Bank of the Year
+Gold Wealth Management Bank of the Year
+Gold Asset Management Bank of the Year
+Gold Custodian Bank of the Year
+"Golden Pixiu" Awards
+Financial Money
+Best Cash Management Bank
+Trade Finance
+Best Internet-based Credit Card Bank of the Year
+Leading Credit Card Bank of the Year
+Investor Journal Weekly
+Best Customer Service Center of the Year
+Information Times
+Best Risk Management Bank
+Best FinTech Bank
+Best Financial Innovation Award
+Internet-based Finance Bank with Excellent Competitiveness
+SME Business Bank with Excellent Competitiveness
+Top 10 Innovative Financial Products (Account-based FX)
+Top 10 Innovative Wealth Management
+ICBC Mobile
+Top 10 Internet-based Finance Innovation Award —
+The 1st place in the Ranking of National Commercial Banks in
+Core Competitiveness
+The Chinese Banker
+Excellent Credit Card Brand
+Excellent Mobile Banking
+National Business Daily
+The 1st place in the List of Chinese State-owned Listed
+Companies on Corporate Social Responsibilities
+Southern Weekly
+Best Internet Innovation Bank in China (ICBC Mobile)
+Best Private Banking Brand in China
+Securities Times
+Best Selling Bank of PE Funds
+Top 10 Financial Products (Corporate Banking)
+Excellent Inclusive Finance Provider of the Year
+China Electronic Finance Industry Alliance, Internet Finance
+Work Committee of Internet Society of China, Organizing
+Committee of China Inclusive Finance Conference
+China Advertising Great Wall Award: Advertiser
+Shanghai Gold Exchange
+The Best Market Maker in Interbank Bond Market
+Outstanding Contribution Award in Interbank CDs
+Award for Innovation in the Money Market
+Award for Development of Bond Borrowing Business
+National Interbank Funding Center
+Best Clearing Agent of Foreign Institutions
+The Most Influential Institution
+Best Market Maker Award of RUB Direct Trading
+Best Market Maker Award in Back-office Support
+Best Non-USD Trading Member Award
+Best Non-USD Trading Award
+Best Spot Trading Award
+Deal of the Year
+Best Spot Market Making Award
+Best Market Maker
+China Foreign Exchange Trade System
+China Central Depository & Clearing Co., Ltd.
+Excellent Proprietary Trading Institution Award
+Comprehensive Model Award for Excellent Customer Service
+Center in the Chinese Banking Sector
+First Award for Excellent Financial Institution Members
+Award for Outstanding Contribution to Enquiry Business
+First Award for Outstanding Commercial Banks in Leasing
+Excellent Innovation Award for Excellent Customer Service
+Center in the Chinese Banking Sector
+Best Effect Award for “Popularizing Financial Knowledge"
+Series in Chinese Banking Industry
+Award for Excellent Legal Risk Management
+Best Growth Award for Pension Service
+The 1st place in terms of social contribution
+The 1st place in terms of comprehensive wealth management
+capability
+Top 50 Financial Products for Serving Micro and Small-sized
+Enterprises
+Best Social Responsibility Special Contribution Outlet Award
+Best Performance Award for Syndicated Loans
+Best Management Award for Syndicated Loans
+Best Project Award for Syndicated Loans
+Excellent Service Award
+Best Social Responsibility Financial Institution Award
+Best CSR Management Award
+China Banking Association
+2016 Ranking and Awards
+292
+ICBC
+Advanced Group in Online Competition of the Chinese Banking
+Sector about Consumer Protection Knowledge
+Outstanding Contribution Award in Civilized and Standard
+Services of the Chinese Banking Sector
+China Gold Association
+Outstanding Contribution Award for CSR in China's Gold Sector
+Award for Honest Operation in China's Gold Sector
+Special Contribution Award of the China Gold Congress
+China UnionPay
+China Advertising Association
+Best Market Expansion Award
+Organizing Committee of China Gold Congress
+Most Reputed Financial Service of the Year
+Organizing Committee of China International Financial
+Exhibition
+ICBC Mobile
+Internet-based Finance Innovation Award in China -
+Internet Society of China, China Electronic Finance Industry
+Alliance, Internet Finance Work Committee of Internet Society
+of China
+Best Social Marketing Platform of the Chinese Banking Industry
+― WeChat Public Account of ICBC Mobile
+Best 10 Social Marketing Cases of the Chinese Banking
+Industry Call for Smart Heroes of ICBC Mobile
+Best E-banks in China - Best Personal Internet Banking
+Best E-banks in China - Best Internet Banking
+China Financial Certification Authority
+China Financial Industry Call Center Development League
+Operation and Management Elite Team Award
+China Council for Brand Development
+The 1st place in Best Chinese Brands
+Model of Transparency to the Public
+Social Responsibility Committee of The Chinese Institute of
+Business Administration, Beijing Rongzhi Corporate Social
+Responsibility Institute
+Top 20 Boards of Supervisors of Listed Companies -
+Best Practice
+Chinese Association for Public Companies, Shanghai Stock
+Exchange, Shenzhen Stock Exchange
+Most Responsible Enterprise
+China Committee of Corporate Citizenship of China Association
+of Social Workers
+Award for Excellent Performance in Acquiring Cooperation of
+Mobile Internet Business
+Outstanding Contribution Award in UnionPay Card Cross-bank
+Transaction Quality
+Award for Excellent Cooperation in and Promotion of UnionPay
+Card Product
+Online Acquiring Business
+Outstanding Contribution Award in Expansion of UnionPay
+Award for Excellent Risk Cooperation
+Excellent Award for Implementation of UnionPay Card
+Technical Standards
+Excellent Award for Co-improvement of UnionPay Card
+Accepting Environment
+Outstanding Contribution Award in UnionPay Card Promotion
+Outstanding Contribution Award in UnionPay Card Cross-bank
+Transaction
+12
+1,024,266
+1,024,266
+Outflows related to derivative exposures and other collateral requirements
+2
+Total consolidated assets as per published financial statements
+1
+Item
+S/N
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+The following information is disclosed in accordance with the CBRC Administrative Measures for Leverage Ratio of
+Commercial Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+(i) Disclosure of Leverage Ratio
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+Unaudited Supplementary Financial Information
+289
+31 December
+2016
+Annual Report 2016
+No
+debts
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+N/A
+debts
+No
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+No
+debts
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+N/A
+N/A
+31 December
+24,137,265
+23,813,992
+(11,665)
+(11,560)
+25,904,533
+1,602,642
+1,725,526
+38,855
+57,298
+35,523
+93,733
+Balance of adjusted on-and off-balance sheet assets
+8
+Other adjustments
+2015
+7
+6
+Adjustment for securities financing transactions
+5
+Adjustments for derivative financial instruments
+4
+Adjustments for fiduciary assets
+3
+(61,143)
+(97,729)
+regulatory consolidation
+Consolidated adjustments for accounting purposes but outside the scope of
+22,209,780
+Adjustment for off-balance sheet items
+Full write-down
+Permanent write-down
+Full write-down
+Permanent write-down
+Including: If yes, specify non-compliant features
+N/A
+N/A
+N/A
+No
+No
+=
+3 3 3 3 3 3 3
+Tier 2 capital bonds
+Tier 2 capital bonds
+Tier 2 capital bonds
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+N/A
+Unaudited Supplementary Financial Information
+Including: If write-down,
+Write-down feature
+instrument it converts into
+Including: If convertible, specify issuer of
+type convertible into
+Including: If convertible, specify instrument
+optional conversion
+Including: If convertible, mandatory or
+Including: If convertible, conversion rate
+Including: If convertible, conversion trigger (s)
+Including: If convertible, fully or partially
+Convertible or non-convertible
+Main features of regulatory
+capital instrument
+write-down trigger(s)
+N/A
+N/A
+N/A
+Non-compliant transitioned features
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+Including: If temporary write-down,
+permanent or temporary
+Including: If write-down,
+Including: If write-down, full or partial
+necessary, without which the
+Issuer would become non-viable
+Full write-down
+Permanent write-down
+viable; or (ii) any relevant
+authority having decided that
+a public sector injection of
+capital or equivalent support is
+The occurrence of the earlier
+of either: (i) the CBRC having
+decided that a write-off is
+necessary, without which the
+Issuer would become non-
+Yes
+of the Bank
+Non-viability
+Non-viability of
+ICBC (Asia) or the Bank
+Yes
+Yes
+N/A
+§
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On-and Off-balance Sheet Assets and Related
+Information
+Award for Outstanding Contribution to Financial Product
+Innovation ICBC Mobile
+S/N Item
+2 3 4
+Retail deposits and deposits form small business customers, of which:
+23 456
+Cash outflows
+4,803,766
+Total high-quality liquid assets (HQLA)
+1
+Total
+weighted
+value
+value
+un-weighted
+Fourth-quarter 2016
+Total
+High-quality liquid assets
+S/N Item
+9,016,067
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced Approaches
+Unaudited Supplementary Financial Information
+(j)
+ICBC
+290
+7.48%
+7.55%
+Leverage ratio
+22
+23,813,992
+25,904,533
+Balance of adjusted on-and off-balance sheet assets
+21
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+1,781,062
+890,879
+167,106
+11
+1,199,033
+3,123,497
+Additional requirements, of which:
+10
+44,955
+Secured funding
+9
+160,794
+160,794
+Unsecured debt
+8
+Stable deposits
+1,954,076
+Non-operational deposits (all counterparties)
+7
+1,496,351
+6,164,123
+Operational deposits (excluding those generated from correspondent
+banking activities)
+3,611,221
+10,631,454
+Unsecured wholesale funding, of which:
+884,896
+8,848,961
+Less stable deposits
+5,983
+4,306,537
+1,954,770
+Net tier 1 capital
+20
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+11
+10
+56,396
+58,813
+Effective notional amount of written credit derivatives
+9
+(10,325)
+(14,896)
+Less: Exempted CCP leg of client-cleared trade exposures
+8
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+(27,517)
+7
+58,116
+39,582
+113,669
+21,377,922
+(11,665)
+21,366,257
+(11,560)
+23,422,339
+23,433,899
+31 December
+2015
+2016
+31 December
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (ie net of
+eligible cash variation margin)
+On-balance sheet items (excluding derivatives and SFTs, but including
+collateral)
+56
+49,149
+(20,409)
+188,185
+114,393
+1,602,642
+1,725,526
+Balance of adjusted off-balance sheet assets
+19
+(1,425,102)
+(1,709,572)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+730,700
+3,027,744
+3,435,098
+Off-balance sheet exposure at gross notional amount
+17
+568,483
+Total securities financing transaction exposures
+16
+Agent transaction exposures
+15
+38,855
+57,298
+CCR exposure for SFT assets
+14
+Less: Netted amounts of cash payables and cash receivables of gross SFT
+assets
+13
+691,845
+511,185
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+12
+1
+Award for Outstanding Contribution to Technological
+Innovation in the Financial Industry ― Contribution to
+Operation and Maintenance Innovation
+Best Mega Private Bank in China
+Best Local Private Bank in China
+TIBET AUTONOMOUS REGION
+BRANCH
+Tel: 0991-5981888
+Fax: 0991-2337527
+Postcode: 830002
+Address: No. 231 Remin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+REGION BRANCH
+XINJIANG AUTONOMOUS
+Fax: 0592-5054663
+Tel: 0592-5292000
+Postcode: 361012
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+XIAMEN BRANCH
+Fax: 022-28400123/28400647
+Tel: 022-28400648
+Postcode: 300074
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+Postcode: 850000
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Tel: 021-58792288
+Fax: 021-58792299
+Postcode: 200120
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+Postcode: 300457
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin
+Fax: 010-66583158
+Fax: 028-82866025
+Tel: 010-66583333
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Fax: 0571-87808207
+Tel: 0571-87803888
+Postcode: 310009
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Zhejiang Province, China
+Tel: 0871-65536325/65536313
+Fax: 0871-63134637
+Postcode: 650021
+Postcode: 100033
+Tel: 028-82866000
+Postcode: 610016
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Postcode: 030001
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Fax: 0531-87941749
+Tel: 0531-66681622
+Postcode: 250001
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+SHANDONG PROVINCIAL
+BRANCH
+Tel: 0351-6248888/6248011
+Fax: 0971-6152326
+Postcode: 810001
+QINGHAI PROVINCIAL BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Tel: 0532-85809988-621031
+Fax: 0532-85814711
+Postcode: 266071
+City, Shandong Province,
+China
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+QINGDAO BRANCH
+Tel: 0971-6169722/6152326
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Fax: 0351-6248004
+Address: No. 395 Dongxin Street,
+SICHUAN PROVINCIAL BRANCH
+Address: No. 35 Zongfu Road,
+Tel: 0755-82246400
+Fax: 0755-82062761
+Postcode: 518015
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+Address: North Block Financial
+Center, No. 5055
+SHENZHEN BRANCH
+Fax: 021-58886888
+SHAANXI PROVINCIAL BRANCH
+Tel: 021-58885888
+Pudong New District,
+Shanghai, China
+SHANGHAI MUNICIPAL BRANCH
+Address: No. 9 Pudong Avenue,
+Fax: 029-87602999
+Tel: 029-87602608/87602630
+Postcode: 710004
+Province, China
+Xi'an City, Shaanxi
+Postcode: 200120
+Fax: 0951-5042348
+Address: No.1 Aokang Avenue,
+Bishan District, Chongqing
+Tel: 023-85297704
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Email: wangxq@doh.icbc.com.cn
+Tel: +974-44072761
+Fax: +974-44072751
+SWIFT: ICBKQAQAXXX
+Address: Level 20, Burj Doha Tower,
+Al Corniche Street, West
+Bay, Doha, Qatar P.O.
+BOX: 11217
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Tel: +855-23955880
+Email: icbckh@kh.icbc.com.cn
+Boulevard, Phsar Thmey I,
+Duan Penh, Phnom Penh,
+Cambodia
+Address: No. 15, Preah Norodom
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Address: Asean Road, Home
+No.358, Unit12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+Email: icbcvte@la.icbc.com.cn
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Fax: +84-462699800
+SWIFT: ICBKVNVN
+Tel: +84-462698888
+Email: admin@vn.icbc.com.cn
+Bainuna Street, Al Bateen
+Area, Abu Dhabi, United
+Arab Emirates
+Email: dboffice@dxb.icbc.com.cn,
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Address: Floor 5&6, Gate Village
+Hurun Report
+ICBC
+298
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBBXXX
+Email: icbcmumbai@india.icbc.com.cn
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+One BKC, C-66, G
+Kim Ma Str., Ba Dinh Dist.,
+Hanoi, Vietnam
+Address: 801, 8th Floor, A Wing,
+Industrial and Commercial
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKAXXX
+Scheme #5, Main Clifton
+Road, Karachi, Pakistan.
+P.C:75600
+Industrial and Commercial Bank
+of China Limited Karachi Branch
+Address: 15th & 16th Floor, Ocean
+Tower, G-3, Block-9,
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+International Financial
+Center, Dubai, United
+Arab Emirates P.O.Box:
+506856
+Building 1, Dubai
+Bank of China Limited, Mumbai
+Branch
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360,
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Tel: +82-514638868
+Tel: +852-25881188
+Email: icbchk@icbcasia.com
+Garden Road, Central,
+Hong Kong
+Address: 33/F, ICBC Tower, 3
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Overseas Institutions
+List of Domestic and Overseas Branches and Offices
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+297
+Tel: 0573-85139616
+Fax: 0573-85139626
+Postcode: 314200
+Province
+Address: No.258 Chengnan West
+Road, Pinghu, Zhejiang
+Bank Co., Ltd.
+Zhejiang Pinghu ICBC Rural
+Fax: 023-85297709
+Annual Report 2016
+Postcode: 402760
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Email: icbcsg@sg.icbc.com.cn
+Email: busanadmin@kr.icbc.com.cn
+#184, Jungang-daero,
+Dong-gu, Busan 601-728,
+Korea
+Marine Insurance Bldg.,
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, Samsung Fire &
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Tel: +82-237886670
+Email: icbcseoul@kr.icbc.com.cn
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Fax: +813-52198502
+Tel: +813-52232088
+Email: icbctokyo@icbc.co.jp
+0005, Japan
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 2-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo, 100-
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+Tel: +65-65381066
+SWIFT: ICBKJPJT
+Tel: 0951-5029200
+Address: 9th floor & Mezzanine floor
+AKAR properties, Al Bateen
+Tower C6
+Best Cash Management Bank
+List of Domestic and Overseas Branches and Offices
+295
+Annual Report 2016
+2016 Ranking and Awards
+Best Employer in China — Employer Mostly Concerned by
+Women
+Best Employer in China
+Zhaopin.com
+Best Employers for University Students - Best Employer in
+Financial Industry
+Best Employers for University Students
+ChinaHR
+Best Employer in China (Comprehensive Award in Financial
+Industry)
+Taihe Consulting
+E-banking Innovation Award of the Year: Best Practices in
+Financial Internet
+China Internet Banking Union
+eStar Best E-commerce Platform Award (ICBC Mall)
+Domestic Institutions
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui Province,
+China
+Postcode: 230001
+Tel: 0411-82378888/82378000
+Fax: 0411-82808377
+Postcode: 116001
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+DALIAN BRANCH
+Fax: 023-62918059
+Tel: 023-62918002
+Postcode: 400060
+eStar Best Mobile Banking Award
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+Fax: 010-66410579
+Tel: 010-66410579
+Postcode: 100031
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+BEIJING MUNICIPAL BRANCH
+Fax: 0551-62868077
+Tel: 0551-62869178/62868101
+CHONGQING MUNICIPAL
+BRANCH
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+Analysys
+Bankrate.com.cn
+People.cn
+Platinum Credit Card Most Popular among Frequent Travelers
+CAAC Inflight Magazine, Civil Aviation Management
+10 Most Popular Investment Products
+Best Private Bank in China - Best Asset Management Award
+Best Private Bank in China
+Wealth Plus
+Best Global Cash Management Bank
+Best Treasury Innovation Product
+Treasury China
+Risk Control Bank of the Year
+Best Banker Group
+China Business Network
+Best Board
+Directors & Boards
+Postcode: 750002
+10th Anniversary Leading Enterprise Award in CSR of
+the People's Daily
+Most Reputable Banking Innovation Award
+Poverty Alleviation Award of the Year
+294
+ICBC
+Most Innovative Underwriter of Medium and Long-term Bond
+Underwriter of Innovative Bond Product with the Largest
+Market Influence
+Caishiv.com
+Top 100 Hong Kong Stocks
+Tencent, Finet Group Limited
+Excellent Green Financial Institution
+Most Popular Mobile Finance Product
+Consumer Satisfaction Awards: Internet Banking Service
+Financial Institution with the Best Global Vision of the Year
+Outstanding Mobile Banking Brand
+Outstanding Custodian Bank
+Outstanding Chinese-funded Bank
+Outstanding Retail Bank
+JRJ.com
+Best Mobile Banking
+Best State-owned Commercial Bank
+Best Credit Card of the Year
+Sina.com
+Hexun
+Postcode: 350005
+E-banking Innovation Award of the Year: Best Innovation in
+Marketing Service
+88087000
+Tel: 0791-86695682/86695018
+Postcode: 330008
+Province, China
+JIANGXI PROVINCIAL BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Tel: 025-52858000
+Fax: 025-52858111
+Postcode: 210006
+South Road, Nanjing City,
+Jiangsu Province, China
+Fax: 0791-86695230
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+Tel: 0431-89569073/89569712
+Postcode: 130022
+Address: No. 9559 Renmin Avenue,
+Changchun City, Jilin
+Province, China
+JILIN PROVINCIAL BRANCH
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+Postcode: 410011
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Fax: 0431-88923808
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+LIAONING PROVINCIAL BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Postcode: 110001
+Tel: 024-23491600
+Fax: 024-23491609
+Address: No. 901 Huanghe East
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region,
+China
+NINGXIA AUTONOMOUS
+REGION BRANCH
+Fax: 0574-87361190
+Tel: 0574-87361162
+Postcode: 315010
+Tel: 0591-88087810/88087819/
+NINGBO BRANCH
+Shenyang City, Liaoning
+Province, China
+Fax: 0471-6940096
+Postcode: 010060
+Address: No. 10 East 2nd Ring
+Road, Hohhot City, Inner
+Mongolia Autonomous
+Region, China
+AUTONOMOUS REGION
+BRANCH
+INNER MONGOLIA
+List of Domestic and Overseas Branches and Offices
+ICBC
+296
+Tel: 0471-6940297
+Postcode: 430071
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+Postcode: 530022
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Fax: 020-81308789
+Tel: 020-81308130/81308123
+Postcode: 510120
+China
+Tel: 0771-5316617
+Road, Guangzhou City,
+Guangdong Province,
+BRANCH
+GUANGDONG PROVINCIAL
+Tel: 0931-8434172
+Postcode: 730030
+Fax: 0591-83353905/83347074
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province,
+China
+Address: No. 123 Yanjiangxi
+Fax: 0771-5316617/2806043
+Fax: 0931-8435166
+Postcode: 550001
+China
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua North
+Road, Guiyang City,
+Guizhou Province, China
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+Postcode: 150010
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Postcode: 450011
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Tel: 0311-66001999/66000001
+Fax: 0311-66001889/66000002
+HEILONGJIANG PROVINCIAL
+BRANCH
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+Tel: 0898-65303138/65342829
+Fax: 0898-65303138
+Postcode: 570203
+HAINAN PROVINCIAL BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Postcode: 050051
+Tel: 0851-88620004/88620018
+Fax: 0851-85963911
+Address: 725 Fifth Avenue, 20th
+Floor, New York, NY
+10022, USA
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+SWIFT: ICBKLULL
+Fax: +352-26866666
+Tel: +352-2686661
+Email: office@eu.icbc.com.cn
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: icbc@icbc-ffm.de
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-2128387799
+Fax: +1-2128386688
+SWIFT: ICBKUS33
+ICBC International Holdings
+Limited
+of China (Asia) Limited
+Address: 33/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong
+SWIFT: ICBKMOMX
+Fax: +853-28338064
+SWIFT: ICBKAU2S
+Tel: +853-28555222
+Email: icbc@mc.icbc.com.cn
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau
+Industrial and Commercial Bank
+SWIFT: ICBHHKHH
+Address: 37/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 35, Menara Maxis,
+SWIFT: UBHKHKHH
+Fax: +852-28051166
+Tel: +852-35108888
+Email: enquiry@icbcasia.com
+Email: info@icbci.com.hk
+Tel: +852-26833888
+Fax: +852-26833900
+Fax: +612-92333982
+Building No: 7277-King
+Fahad Road Al Olaya, Zip
+Code: 12212, Additional
+No.: 3333,
+Email: info@icbc.com.au
+List of Domestic and Overseas Branches and Offices
+wwww.icbc.com.cn, www.icbc-ltd.com
+No.55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+中國北京市西城區復興門內大街55號
+Post Code: 100140
+郵編:100140
+ICBC
+ICBC
+300
+Fax: +27-212008012
+761837882
+Tel: +27-212008006, +27-
+Email: icbc.africa@gmail.com
+Address: 47 Price Drive, Constantia,
+Cape Town, South Africa,
+7806
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Industrial and Commercial
+Bank of China Limited, Yangon
+Branch
+Tel: +612-94755588
+Address: 459 Pyay Road, Kamayut
+Township, Yangon,
+Myanmar
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: T07&08, Level 7&8,
+Street, Sydney NSW 2000,
+Australia
+Address: Level 1, 220 George
+Bank of China Limited, Sydney
+Branch
+Industrial and Commercial
+SWIFT: ICBKKWKW
+Fax: +965-22281799
+Tel: +965-22281777
+Tower), Floor 7, Al-Soor
+Street, Al-Morqab, Block3,
+Kuwait City, Kuwait
+Address: Building 2A (Al-Tijaria
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+SWIFT: ICBKSARI
+Fax: +966-112899879
+Tel: +966-112899800
+Email: service@sa.icbc.com.cn
+Unit No.:95, Kingdom of Saudi Arabia
+Tel: +95-12306306-8810, 8830, 8821
+Fax: +95-12306305-8805, 8806
+SWIFT: ICBKMMMY
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Email: gongwen@pe.icbc.com.cn
+Tel: +51-16316801
+Email: cs@ina.icbc.com.cn
+SWIFT: ICBKUS33FIN, ICBKUS3F
+Fax: +1-2129937349
+Tel: +1-2129937300
+Email: info@icbkus.com
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway, 28th
+Floor, New York, NY,
+10019, USA
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+Fax: +1-2126190315
+SWIFT: ICBKUS3N
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma
+250, Piso 18, Col.
+Juarez, C.P.06600, Del.
+Cuauhtemoc, Ciudad de
+Mexico
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 202 Canal Street, New
+York, NY 10013, USA
+2 Caddesi No: 13 34398
+Sariyer, İSTANBUL
+ICBC Turkey Bank Anonim Şirketi
+Address: Maslak Mah. Dereboyu,
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+londonmarketing@icbcstandard.com
+Email:
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355162
+SWIFT: ICBKTRISXXX
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Industrial and Commercial Bank
+of China (Canada)
+Address: Av.Juan de Arona 151,
+Oficina 202, San Isidro,
+Lima27, Perú
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+ICBC PERU BANK
+Tel: +55-1123956600
+Fax: +55-1123956600
+SWIFT: ICBKBRSP
+Email: bxgw@br.icbc.com.cn
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148209022
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+355, (C1107 CPG) Buenos
+Aires, Argentina
+Address: Blvd. Cecilia Grierson
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Toronto, Ontario, M5H
+2R2, Canada
+Centre, 333 Bay Street,
+Address: Unit 3710, Bay Adelaide
+SWIFT: ICBKRUMM
+PT. Bank ICBC Indonesia
+Address: 32nd TCT ICBC Tower,
+JI. MH. Thamrin No.81,
+Jakarta Pusat 10310,
+Indonesia
+Fax: +7-4952873098
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010, New
+Zealand
+Fax: +7-7272377070
+SWIFT: ICBKKZKX
+Tel: +7-7272377085
+Email: office@kz.icbc.com.cn
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Email: info@nz.icbc.com.cn
+List of Domestic and Overseas Branches and Offices
+Annual Report 2016
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Address: 622 Emporium Tower
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Tel: +62-2123556000
+Fax: +62-2131996010
+SWIFT: ICBKIDJA
+299
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ2A
+Address: Building 29,
+Bank ICBC (joint stock
+company)
+SWIFT: ICBKLULU
+Fax: +352-26866666
+Tel: +352-2686661
+Email: office@eu.icbc.com.cn
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg
+Industrial and Commercial Bank
+SWIFT: ICBKGB2L
+Fax: +44-2073978899
+Tel: +44-2073978888
+Email: admin@icbclondon.com
+London EC4N 7BG, UK
+Address: 81 King William Street,
+ICBC (London) PLC
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Fax: +51-16316803
+SWIFT: ICBKPEPL
+ICBC
+The Bank promoted its equity financing businesses in funds portfolio, government investment funds, mixed ownership
+reform, public-private-partnership (PPP) projects, industry funds and market-based funds, successfully operated
+influential fund businesses including China Government-Enterprise Cooperation Fund, China Internet Investment Fund,
+Guizhou Poverty Alleviation Fund and SDIC Advanced Manufacturing Investment Fund, and offered equity financing
+advisory service for almost 100 companies.
+Money Market Activities
+In 2016, the Bank duly adjusted its investment and trading strategies, reasonably arranged the investment products and
+structures and took multi-pronged measures in alignment with the trends in financial markets and the needs of liquidity
+management so as to make treasury operations more profitable.
+Treasury Operations
+Discussion and Analysis
+ICBC
+36
+The Bank further pushed the transformation and development of installment-based insurance under agency
+arrangement, achieving structural improvement and size enlargement. It further sharpened its edge in E-banking after
+adopting product segmentation and differentiated marketing approaches. The amount of insurance under agency
+sales registered RMB336 billion, representing an increase of 101.4%.
+Considering the characteristics of treasury bond products' yields, the Bank made efforts to attract customers preferring
+low risk levels. Sales of treasury bonds under agency arrangement amounted to RMB73.8 billion.
+4
++ Following the changes in demands of customers and markets, the Bank actively tracked and adjusted the product
+structure and sales strategies of investment and wealth management businesses. Sales of funds under agency
+arrangement totaled RMB488.9 billion in 2016.
+Agency Sales
+In 2016, in order to diversify the asset and capital management approaches and expand the NPA disposal channels,
+the Bank, as the issuer and facility provider, issued four tranches of asset securitization programs totaling RMB15,763
+million, three of which are NPA-backed securities, one residential mortgage-backed securities.
++
++
+Asset Securitization Business
+The Bank innovatively launched paper natural gas and paper precious metal index products, further diversifying the
+paper trading products, and rolled out paper crude oil successive trading products, which met customers' long-term
+investment demands for crude oil. The size of the paper trading increased by 56.0% compared with the previous year
+to RMB505.6 billion.
+The foreign exchange-related products were more diversified. The Bank initiated the foreign currency trading business
+among the currencies of 80 emerging countries along the "Belt and Road". This move made foreign exchange
+business cover all the countries along the "Belt and Road". The volume of franchise foreign exchange trading stood at
+USD227.6 billion, up 72.0% over last year.
+The Bank continuously improved its ability to serve personal customers in foreign exchange trading and increased its
+coverage, reinforced the improvement of electronic channels and marketing initiatives. It kept enriching convertible
+currencies, developed RMB foreign exchange option business and RMB foreign exchange currency swap business. The
+volume of franchise foreign exchange trading hit USD390 billion in 2016.
+Franchise Treasury Business
+Discussion and Analysis
+35
+Annual Report 2016
+In 2016, the sum of precious metal business transactions was RMB1.69 trillion, up 35.2% from the end of last year.
+The Bank cleared RMB406.6 billion on behalf of the Shanghai Gold Exchange, ranking No. 1.
+The Bank was awarded the "Best Precious Metal Trading Bank in China" by Euromoney for five consecutive years and
+the "Best Precious Metals Broker in China" by Global Finance for the first time.
+The Bank integrated into the international mainstream commodity markets at a faster pace. It became a participant
+of the electronic auction process which sets the gold benchmark price at the London Intercontinental Exchange, and
+gradually accumulated market making experience in the main international gold markets. In the meanwhile, the Bank
+was among the first group of price setters of "Shanghai Gold", a gold pricing product denominated in RMB, at the
+Shanghai Gold Exchange, and actively engaged in the market making business.
+The Bank actively carried out financing pledged with precious metals, satisfying enterprises' financial and hedging
+demands and effectively supporting the transformation and upgrade of industries.
++
++
+The Bank practiced inclusive finance. It issued innovative OTC bond products on a regular basis, and completed the
+issuance of 58 OTC treasury bonds and six OTC bonds of China Development Bank.
+The Bank stepped up market research and customer marketing, provided a good mix of products with reasonable
+maturity according to the market situation and its own capital position to increase the efficiency of fund operation. It
+dynamically adjusted the trading volume and direction of short-term financing products to ensure its liquidity.
+The Bank increasingly attracted non-bank financial institution customers. While prudently engaging in local and
+foreign currency interbank borrowing and lending business with non-bank financial institutions, it innovatively
+launched the foreign-currency interbank lending business, thereby further expanding the channels for its operations in
+foreign currency.
+In 2016, domestic trading amount in the interbank market was RMB37.29 trillion, of which lending amounted to
+RMB34.66 trillion. The transaction volume in foreign exchange money markets recorded USD285.2 billion.
+38
+In 2016, the number of ICBC Link customers exceeded 60 million.
+The Bank completed the shift from ICBC Messenger and identified targeted customers by data mining to conduct
+precision marketing.
+The Bank developed China's first free anti-telecom fraud inquiry software, "ICBC e-Security Public Welfare Version"
+which enabled the public to check the safety of related accounts before any transfer and remittance to protect the
+safety of their properties. In 2016, it accumulatively identified and blocked over 60 thousand telecom frauds, involving
+more than RMB900 million.
+The Bank explored new application areas, created featured service accounts, and seamlessly connected ICBC Link with
+financial services, campus finance, daily life and other application scenarios.
+4
++
++ ICBC Link aims at becoming an interactive platform for instant information exchange, business consultancy,
+communication and sharing between the Bank and its customers, customer managers and customers and among the
+customers, and developing a new financial service model featuring socialized finance and interactive marketing.
+ICBC Link
+In 2016, ICBC Mall achieved an accumulative transaction amount of over RMB1 trillion.
+The Bank accelerated the development of mobile end of ICBC Mall with the transactions concluded on the mobile end
+accounting for half of all the transactions. It pushed forward with applications in various sectors by making Shanghai
+Disney Resort tickets and air tickets of major airlines available on ICBC Mall.
+Capitalizing on its credit financing, bonus point consumption and other advantageous banking services, the Bank
+focused on attracting merchants from the real estate and automobile industries that were closely connected to
+finance. The Bank also introduced fast moving consumer goods and local specialties that customers are more loyal to
+and are suited to bonus point consumption.
+The e-commerce platform "ICBC Mall" helps the Bank gather together customers and merchants, connect trading and
+financing, innovate in the new-typed customer relationships featuring the integration of finance and commerce, and
+improve the customer viscosity and activeness.
+4
++
+ICBC Mall
+The Bank advanced its internet-based finance development strategies on all fronts, played a guiding role in leading
+innovation, upgraded and improved the overall architecture of internet-based finance with the e-commerce platform ICBC
+Mall, the instant communication platform ICBC Link and the open-ended online banking platform ICBC Mobile as the main
+pillars and covering financial services, e-commerce, payment and social life. In line with its customer-centric concept, the
+Bank improved its risk prevention and control system to inject new vigor into the business transformation of the Bank.
+Internet-based Finance
+Discussion and Analysis
+37
+Annual Report 2016
+For details on the Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements: 36.
+Certificates of Deposit; 38. Debt Securities Issued".
+In line with its fund operation and liquidity management needs, the Bank rationally arranged the scale and structure
+of its active liabilities including interbank borrowing from the interbank market, short-term time deposits with other
+banks, interbank CDs and large-value CDs in order to enhance the supporting capacity of diverse liabilities to asset
+business growth.
++
+Financing
+In 2016, the transaction volume of RMB bonds and foreign currency bonds in the trading book scored RMB1,010.5
+billion and USD9.8 billion respectively.
+The Bank strengthened active management of foreign currency bond portfolios and their duration and invested more
+in bonds with floating rates to guard against the interest rate risk. The Bank became more capable of seizing market
+opportunities and earned higher spread income.
+The Bank strengthened research on the trend of market interest rate, effectively balancing the relationship between
+increasing portfolio return and preventing the risk of middle and long-term interest rate rebound. It continued to
+refine the system for tracking and assessing credit risk, comprehensively sorted out the credit debt portfolio to lower
+the overall credit risk of investment portfolios. It actively invested in local government bonds, corporate bonds and
+green bonds, effectively bolstering the development of the real economy.
+Investment
+Precious Metal Business
++
+At the end of 2016, the pension funds under the Bank's trusteeship amounted to RMB96.2 billion; the Bank managed
+16.67 million individual pension accounts, and the pension funds under the Bank's custody totaled RMB446.7 billion.
+The Bank led other banks in terms of the scale of enterprise annuity funds under the Bank's trusteeship, number of
+individual enterprise annuity accounts and enterprise annuity funds under the Bank's custody.
++
+Private Banking
+2016
+2015
+2014
+41,962
+35,419
+30,635
+Unit: RMB100 millions
+Growth of Personal Loans
+At the end of 2016, personal financial assets totaled RMB12.20
+trillion, representing an increase of RMB0.61 trillion compared with
+the end of last year and making the Bank remain the largest holder
+of personal financial assets. Meanwhile, the Bank had 530 million
+personal customers, including 11.33 million personal loan customers,
+representing an increase of 33.02 million and 0.89 million from the
+end of the previous year respectively. The personal loans stood at
+RMB4,196,169 million, representing an increase of RMB654,307
+million or 18.5%. The personal deposits arrived at RMB8,140,281
+million, representing an increase of RMB539,167 million or 7.1%.
+Grasping the opportunities arising from personal consumption
+upgrade, the Bank further promoted self-service loans pledged with
+personal financial assets under the guidance of internet thinking.
+It accelerated the system integration and innovation of mortgage
+loans for consumption and released the integrated consumption loan
+mortgaged with personal properties.
+The Bank actively backed the citizens' reasonable demand of funding for owner-occupied houses and better houses,
+propelled the optimization of the business management mechanism for residential mortgages, ameliorated policies
+and procedures, and rolled out innovative products such as loans for discharging mortgages and subsidized loans for
+change of housing provident fund loans to commercial loans. The customer experience became increasingly better.
+The Bank optimized the functions of Salary Premium No. 1, Jie Jie Gao No. 2 and CDs for personal customers by
+releasing the paper-based CDs and Jie Jie Gao deposit and adding the real-time limit inquiry function of CDs to drive
+the swift growth of innovative deposit products.
++
+The Bank took the lead in offering and promoting a variety of innovative retail banking products including the
+introduction of Type II and III accounts, information verification and multiple ways of transfer and remittance. It also
+established the bank-wide uniform personal customer labeling, researched, developed and released the customer
+profile marketing system for personal customers and created the multi-dimensional personel customer profiles with
+their characteristics so as to develop tailored and integrated recommendation of products and services for individual
+customers and automatically assess the investment behaviors and risk appetites of customers.
++
+4
++
++
+With the mega retail strategy in mind, the Bank actively explored the integration of the internet, big data, artificial
+intelligence and other new technologies with the traditional banking services, focused on creating value with information,
+and advanced the transformation of marketing models and innovation of customer services and products.
+Personal Banking
+Discussion and Analysis
+ICBC
+32
+In 2016, fee income from investment banking was RMB25,024 million.
+The Bank actively expanded its bond underwriting business and underwrote various debt financing instruments with
+a total value of RMB1,522.4 billion as the lead underwriter throughout 2016. Implementing the concept of "green
+finance", the Bank supported financing of projects via bond underwriting and other direct financing products in areas
+such as energy conservation and environment protection, pollution prevention and control, resource conservation and
+recycling. The volume of the green bonds it underwrote amounted to RMB38.3 billion, making the Bank the largest
+green bond underwriter in China.
+The Bank developed a new business line of investment banking debt advisory service, with focus on infrastructure
+and emerging industries and other important industries, and engaged in a number of structured financing projects
+with Yunnan Provincial Railway Investment Corporation, Transport Department of Shanxi Province, China Reform
+Investment, Jiangsu Tianpu Hongxin Scientific Park and Chengdu Financing Holding Group, etc.
+The Bank actively expanded its merger and acquisition (M&A) advisory business. It engaged in various domestic and
+overseas M&A projects including Sunac China's acquisition of Raycom's equities, Yunnan City Investment's acquisition
+of Chengdu New International Convention and Exhibition Center, Joyson Electronics' acquisition of KSS, the fourth
+largest global producer of automotive security systems, Biostime's acquisition of Swisse, a leading health care brand in
+Australia and Midea Group's acquisition of German KUKA Roboter GmbH.
+The Bank was the first in the banking industry to debut the "ICBC Cloud Manager" special service which provides
+online financial services covering information access, product promotion, inquiry and online reservation via ICBC Link,
+telephone, SMS and other means. Besides, an internet bank-hospital service platform was also established.
++
+The Bank proactively adjusted the strategies on product offering and investment. It increased the offering of wealth
+management products for privileged private banking customers and modified the fundamental off-the-shelf products
+on a value only basis. Besides, it accelerated the expansion of innovative businesses, conducted agency investment
+services on a pilot basis for pledged financial assets, FOF equity funds, etc. It also promoted and implemented its pilot
+family wealth management business.
+The Bank promoted its speedy development of overseas private banking centers. The Bank built a Hong Kong Private
+Banking and Wealth Management Product Center, enhanced the building of its global wealth management funds and
+sales network, and successfully issued the second sub-fund of the global wealth management fund.
+Pension Services
+At the end of 2016, total net value of assets under the Bank's custody increased by 22.6% from the previous year end
+to RMB14.1 trillion.
+The Bank was awarded the "Custodian Bank of the Year in China" by The Asian Banker.
+The Bank successfully obtained the custody qualification for national basic pension insurance and Korean Securities
+Depository (KSD).
+The Bank developed a sound asset custody product and service system and remained a market leader in respect of
+custody products, e.g. securities investment funds, insurance, banking wealth management, enterprise annuities,
+special fund accounts and global assets.
+Asset Custody Services
+Discussion and Analysis
+ICBC
+34
+At the end of 2016, the balance of stock wealth management products increased by 3.3% compared with the
+previous year end to RMB2,702,944 million, remaining the largest in the industry.
+By leveraging the big data techniques, the Bank created multi-dimensional customer profiles for wealth management
+customers. The Bank also conducted precise marketing strategies and appropriately allocated asset based on the
+preferences of different customer segments regarding their habits of consumption, investment, purchase channels and
+product choices, thereby effectively enlarging the size of wealth management customers and lifting the sales of wealth
+management products.
+By upgrading product forms, re-arranging maturities and developing net worth-based transformation of products, the
+Bank has been continuously innovating in wealth management products and marketing models to meet the diverse
+demand of customers and further consolidate the customer base.
+Wealth Management Services
+Seizing the opportunities arising from customers' wealth increase and capital market growth, the Bank made efforts to
+establish a mega asset management business system across the whole value chain and enhance its specialized operating
+capabilities on the strength of the Group's asset management, custody, pension and precious metal businesses, and the
+functions of its comprehensive subsidiaries specialized in fund, insurance, leasing and investment banking. Thus, the Bank
+rendered diversified and integrated financial asset services for its customers.
+Financial Asset Services
+At the end of 2016, the Bank issued 830 million bank cards, representing an increase of 81.45 million cards from the
+end of the previous year. Bank card business generated a fee income of RMB37,670 million.
+The Bank was awarded the "Best Consumer Credit Card in China" by Global Finance, the "Best Credit Card of the
+Year" by Sina.com, the "Excellent Credit Card Brand" by National Business Daily and the "Gold Credit Card Bank of
+the Year" by Financial Money.
+The Bank comprehensively improved the bank card security management, actively implemented classified management
+of accounts, and issued the first physical Type II debit card in China. It further adjusted the product structure, and
+promoted the issuing of native cipher algorithm-based cards and single chip cards. The chip debit cards issued
+accounted for 59.5% of all the debit cards.
+The Bank kept enriching the mobile payment products and service system and covered all the online, offline and 020
+payment scenarios.
+The Bank was the first bank in China to establish a merchant development center for full-scale implementation of
+the merchant development strategies which are integrated online and offline, organization and facilitation of the
+marketing and promotion among all the merchants of the Bank and establishment and improvement of a payment
+acceptance environment.
++
++
+Bank Card Business
+At the end of 2016, the Bank maintained 70,100 private banking customers, representing an increase of 7,700 or
+12.3% from the end of the previous year. Assets under management amounted to RMB1.21 trillion, growing by
+RMB146.8 billion or 14.2% from the end of the previous year.
+The Bank was awarded the "Best Private Bank in China" by The Asset again, the "Best Private Bank in China" and
+the "Best Private Bank for Global Investment Exposure" by Asiamoney, and the "Best Private Bank Brand in China" by
+Securities Times.
++
+Discussion and Analysis
+33
+Annual Report 2016
+Pension services witnessed a steady growth in scale and continuously higher comprehensive benefits. The Bank actively
+launched innovative products, continued to enrich the service contents, promoted automatic and self-services and
+made the customer service quality better.
+In view of the hot spots in the market, the Bank improved the physical goods sales models. Seizing the opportunities
+arising from the opening of the first Disney Resort in China, the Bank sold more than 1 million sets of Disney themed
+products in the off season. As the first bank to attempt brand cooperation, the Bank obtained support from third-party
+enterprises to develop "Good Luck Year" products for the traditional hot season.
+Discussion and Analysis
+Unit: RMB100 millions
+41,768
+39,294
+Production and supply of
+11.9%
+electricity, heat, gas and water
+39,023
+Wholesale and retail
+9.0%
+Leasing and commercial services
+10.7%
+Water, environment and public
+7.5%
+utility management
+Real estate
+6.2%
+52,717
+41,348
+Mining
+3.3%
+Construction
+2.7%
+Lodging and catering industry
+1.8%
+2014
+2015
+2016
+Science, education, culture
+1.8%
+and sanitation
+postal services
+Demand deposits
+21.8%
+20.4%
+Discussion and Analysis
+In terms of the currency structure, the balance of RMB deposits amounted to RMB16,722,751 million, which accounted for
+93.8% of the total balance of due to customers, RMB1,286,765 million or 8.3% higher than that at the end of the previous
+year. The balance of foreign currency deposits was equivalent to RMB1,102,551 million, an increase of RMB256,598 million
+or 30.3%.
+Repurchase Agreements
+Repurchase agreements were RMB589,306 million, representing an increase of RMB252,115 million or 74.8% from the
+end of the previous year, mainly because the Bank appropriately increased funds raised from the public market based on its
+internal and external liquidity status.
+Shareholders' Equity
+As at the end of 2016, shareholders' equity amounted to RMB1,981,163 million in aggregate, RMB180,644 million or
+10.0% higher than that at the end of the previous year. Equity attributable to equity holders of the parent company
+recorded an increase of RMB180,277 million or 10.1% to RMB1,969,751 million. Please refer to the "Financial Statements:
+Consolidated Statement of Changes in Equity" for details.
+For details on off-balance sheet items, please refer to "Note 48. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 49. to the Financial Statements: Designated Funds and Loans".
+Analysis on Statement of Cash Flows
+Net cash inflows from operating activities amounted to RMB239,221 million, representing a decrease of RMB892,543 million
+as compared to the previous year, mainly due to the cash outflows as a result of lower deposits from banks and other
+financial institutions instead of cash inflows in the previous year and cash outflows caused by increased cash and balances
+with central banks instead of cash inflows in the previous year. Specifically, net cash outflows of operating assets increased
+by RMB584,785 million and net cash inflows of operating liabilities dropped by RMB295,639 million.
+Net cash outflows from investing activities amounted to RMB468,932 million. Specifically, cash inflows were RMB2,064,415
+million, representing an increase of RMB681,761 million, mainly due to the increased proceeds from the recovery of
+investment assets; and cash outflows were RMB2,533,347 million, representing a growth of RMB483,732 million from the
+previous year, mainly due to the increase in cash payment generated from bond investment.
+Net cash outflows from financing activities amounted to RMB50,786 million, of which, cash inflows were RMB904,876
+million, mainly due to the issuance of debt securities by overseas institutions; and cash outflows were RMB955,662 million,
+mainly due to the repayment of debt securities.
+Annual Report 2016
+29
+Discussion and Analysis
+BUSINESS OVERVIEW
+Corporate Banking
+Facing the new normal of economic development, the Bank strove to develop its corporate banking business by continuing
+to support the growth of the real economy and facilitate the supply-side structural reform. Through innovation, the Bank
+tapped into new markets.
++
++
++
+In line with the national strategies such as the "three supporting belts" and the "four regions", the Bank supported
+national key construction projects as a priority and also actively supported vital industries including infrastructure
+construction, transportation and logistics, modern services and energy, thereby facilitating the economic restructuring
+and upgrade.
+In response to the tendency of financial disintermediation, the Bank attached great importance to restructuring
+and reasonably deployed overall financing. With moderate growth in financing aggregate, it optimized the tenure
+arrangement and the investment strategies in terms of regions, industries, in- and off-balance sheet businesses and
+other products.
+For global development, the Bank pooled efforts from all dimensions and served cross-border customers with
+global syndicated loans and cross-border project pool. Capitalizing on the opportunities in overseas bond issuing, it
+successfully underwrote bonds in USD and EUR for a number of major customers via its marketing initiatives.
+To tackle with the impact from the internet, the Bank sped up the expansion of internet financing. It rolled out two
+types of products, "Quick Loan" and "Micro Loan" and launched such innovative products as internet unsecured loan
+for corporate customers, financing pledged with the assets in the online bill pool of corporate customers and online
+issuing of acceptance drafts under E-banking.
+The Bank was awarded the title of the "Best Corporate Bank in China" by Global Finance for seven years in a row. It
+was ranked first in the Asia Pacific region in terms of the aggregated amount of syndicated loans as lead arranger by
+Thomson Reuters.
+At the end of 2016, the number of the Bank's corporate customers increased by 463 thousand over the end of the
+previous year to 5,784 thousand. The balance of corporate loans reached RMB8,140,684 million, representing an
+increase of RMB271,132 million or 3.4% over the end of the previous year. The balance of corporate deposits hit
+RMB9,448,520 million, representing an increase of RMB1,011,506 million or 12.0%.
+Breakdown of Corporate Loans by Industry
+Growth of Corporate Deposits
+Manufacturing
+Transportation, storage and
+Time deposits
+45,077
+2.9%
+2,034,043
+17.3
+1,883,208
+17.3
+Notes: (1)
+"Percentage" refers to the proportion against domestic branch loans.
+(2) Small and micro enterprises loans include loans granted to small and micro enterprises, loans to privately or individually-owned
+business and loans to small and micro enterprise owners.
+Institutional Banking
++
+The Bank gave impetus to innovation via cooperation with other financial institutions. The Bank kept leading the
+market in the amount of funds under custody for seven consecutive years.
+The Bank ranked first in the banking industry in terms of the amount of central finance and the number of
+government business cards issued under agency service, the amount of payments from pooled social security funds, as
+well as the number and investment volume of local government bonds for which it was the underwriter.
+The Bank stepped up efforts to promote the electronic systems for payment of cross-province traffic fines and
+centralized payment of local national treasury, with the business volume and transaction amount at the top of its
+peers. Moreover, it launched the electronic collection and payment of local non-tax revenue, making it the only pilot
+bank which launched all the payment channels at one go.
+Settlement and Cash Management
++
+Exploring internet-based finance, the Bank actively rolled out new products and services. It expanded the customer size
+and cemented customer base via five platforms, namely, Industrial and Commercial Enterprise Link, Small and Micro
+Enterprise Platform, ICBC e-Trade, ICBC e-Payment and Large-amount Fund Monitoring.
+The Bank innovated global cash management services in an effort to help Chinese enterprises go global. It actively
+marketed comprehensive financial solutions for cash management. In line with the policy on centralized operation of
+cross-border RMB and foreign exchange of multinational companies and the policy on financial reform pilot zones,
+the Bank provided customers with a full package of financial solutions covering six business lines, namely, account
+information, collection and payment, liquidity management, investment and financing and risk management.
+Others
+31
+Discussion and Analysis
+At the end of 2016, the Bank maintained 6,960 thousand corporate settlement accounts, representing an increase
+of 8.8% over the end of the previous year, and the volume of settlements reached RMB2,430 trillion, up 7.3% over
+the previous year. The Bank maintained its leading position in the business size. The number of cash management
+customers grew by 12.7% to 1,431 thousand, including 5,764 global cash management customers, representing an
+increase by 17.3% from last year.
+International Settlement and Trade Finance
++ Against the backdrop of ongoing sluggish foreign trade and more volatile RMB exchange rate, the Bank expanded its
+export business through product innovation, credit policies, approval procedures, green channels and other methods.
+The Bank kept enlarging the pilot coverage of the Bolero electronic document presentation business and signed
+a headquarter-level cooperation agreement with ESS DOCS. It also further diversified its cross-border remittance
+products.
+In 2016, domestic branches disbursed an aggregate of USD70.2 billion in international trade finance. International
+settlements registered USD2.5 trillion, of which USD897.3 billion were handled by overseas institutions.
+Investment Banking
++
+Small and micro enterprises
+26.2
+Annual Report 2016
+23.7
+2,855,622
+Note: Domestic operations data.
+30
+ICBC
+Small and Medium-Sized Enterprise Business
+The Bank promoted its specialized business model of micro and small enterprise banking centers, and established 198
+such centers. The centers boasted higher efficiency and better service quality with their batch-based, standardized and
+one-stop services.
+The Bank constantly innovated new products. It launched the petty secured loan to micro customers, the fixed asset
+procurement and construction loan to small and micro enterprises, the unsecured loan for tax payment of small and
+micro enterprises and the start-up secured loan, among other new products. Besides, it put more efforts to market
+the Government Subsidies loan, petty unsecured loan to small and micro enterprises, business property loan, standard
+plant mortgage loan and other key products.
+The Bank was honored with the "SME Business Bank with Excellent Competitiveness" by China Business Journal. The
+"ICBC Small and Micro Enterprise Banking" brand won the "Excellent Banking Service Award of the Year" in the
+China International Financial Exhibition.
+LOANS TO DOMESTIC SMALL (MICRO) AND MEDIUM-SIZED ENTERPRISES
+At 31 December 2016
+In RMB millions, except for percentages
+At 31 December 2015
+Percentage
+Percentage
++
+Item
+Medium-sized enterprises
+43.5
+Amount
+4,738,830
+41.0
+(%)
+4,803,727
+Loans to small (micro) and medium-sized enterprises
+(%)
+Amount
+2,769,684
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of KZT8,933
+million. It principally engages in commercial banking services such as deposit, loan, international settlement and trade
+finance, foreign currency exchange, guarantee, account management, internet banking and bank card service. At the end
+of 2016, ICBC (Almaty) recorded total assets of USD155 million and net assets of USD51 million. It generated a net profit of
+USD7.25 million during the year.
+ICBC (LONDON) PLC
+44
+ICBC
+Discussion and Analysis
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD145.46 million.
+ICBC (New Zealand) provides corporate and personal banking services such as account management, transfer and
+remittance, international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the
+end of 2016, ICBC (New Zealand) recorded total assets of USD628 million and net assets of USD98 million. It generated a
+net profit of USD830 thousand during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB2,310
+million. Saint Petersburg Branch, a tier-2 branch, is structured under it. It mainly provides a full spectrum of corporate
+banking services including corporate and project loan, trade finance, deposit, settlement, securities brokerage, custody,
+franchise treasury business and securities trading, foreign currency exchange, global cash management, investment banking
+and corporate financial consulting, as well as personal banking services. Bank ICBC (JSC) is a RMB clearing bank in Russia
+designated by PBC, a RUB clearing bank for RMB trading against RUB on China Foreign Exchange Trade System, important
+market maker and RMB clearing bank for RMB trading against RUB on MICEX-RTS. At the end of 2016, Bank ICBC (JSC)
+recorded total assets of USD821 million and net assets of USD95 million. It generated a net profit of USD22.52 million
+during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC (Europe), a wholly-owned subsidiary of the Bank, was incorporated in Luxembourg with a paid-up capital of EUR437
+million. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and Warsaw Branch are structured
+under ICBC (Europe), which mainly offers corporate and retail banking services such as remittance, settlement, loan, trade
+finance, treasury, investment banking, custody, franchise wealth management. At the end of 2016, ICBC (Europe) recorded
+total assets of USD7,760 million and net assets of USD630 million. It generated a net profit of USD34.41 million during the
+year.
+BANK ICBC (JOINT STOCK COMPANY)
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD309 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2016, ICBC (USA) recorded total assets of USD2,229 million and net assets of USD321 million. It generated a net
+profit of USD7.03 million during the year.
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a
+97.86% stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade
+finance, remittance, settlement, leasing and consulting. At the end of 2016, ICBC (Thai) recorded total assets of USD5, 196
+million and net assets of USD735 million. It generated a net profit of USD41.05 million during the year.
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers securities brokerage services including securities
+clearing and financing for institutional customers. At the end of 2016, ICBCFS recorded total assets of USD36,260 million
+and net assets of USD139 million. It generated a net profit of USD24.75 million during the year.
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital of
+USD200 million, It provides banking services such as deposit and exchange, loan, trade finance, international settlement,
+funds clearing, agency, foreign exchange trading and retail business. At the end of 2016, ICBC (London) recorded total
+assets of USD2,723 million and net assets of USD378 million. It generated a net profit of USD20.59 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+1
+PT. BANK ICBC INDONESIA
+♦ Overseas Subsidiaries
+Annual Report 2016
+Discussion and Analysis
+43
+Annual Report 2016
+Europe
+ICBC (Macau) (Macau, China) -- 24
+1
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR2.69 trillion, in which ICBC holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loan, trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the end
+of 2016, ICBC (Indonesia) recorded total assets of USD3,535 million and net assets of USD333 million. It generated a net
+profit of USD41.44 million during the year.
+(New Zealand)--
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+ICBC (Asia) is a wholly owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD36,379
+million. It provides comprehensive commercial banking services and the major businesses include commercial credit, trade
+finance, investment service, retail banking, E-banking, custody, credit card, receiving bank services for IPOs and dividend
+distribution. At the end of 2016, ICBC (Asia) recorded total assets of USD103,087 million and net assets of USD10,818
+million. It generated a net profit of USD954 million during the year respectively.
+ICBC INTERNATIONAL HOLDINGS LIMITED
+ICBC International, a licensed investment bank in Hong Kong that is wholly owned by the Bank, has a paid-up capital of
+HKD4,882 million. It mainly renders a variety of investment banking services, including investment banking, investment
+management, sales transaction and asset management. At the end of 2016, ICBC International recorded total assets of
+USD4,672 million and net assets of USD966 million. It generated a net profit of USD79 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2016, ICBC (Macau) recorded total assets of USD26,200 million
+and net assets of USD2,339 million. It generated a net profit of USD282 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR833 million,
+it is able to provide a full range of commercial banking services. At the end of 2016, ICBC (Malaysia) recorded total assets of
+USD906 million and net assets of USD212 million. It generated a net profit of USD7.5 million during the year.
+.9
+45
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+Human Resources Management
+In 2016, the Bank obtained 52 patents from the State Intellectual Property Office, and the total number of patents owned
+by the Bank increased to 456. The Bank had eight scientific and technological achievements that won the Technological
+Development Award of PBC, of which, the "three centers in two cities" project won the outstanding award as the only
+project to be so honored in the 2016 Technological Development Award. The Bank became the only commercial bank rated
+2A by the information technology supervision of CBRC for three consecutive years.
+The Bank continued to perfect the customer information security protection system and stepped up its efforts to popularize
+network security awareness. Services such as one Type I account for each customer, delayed crediting of transfer via ATM
+and control over the amount and sum of transfers were launched successfully. The Bank launched diversified financial
+services for Type II & III accounts through mobile banking and established a long-effective mechanism to prevent telecom
+frauds. The Bank released Rong'an e Messenger the first risk information service product in the banking sector. The Bank
+also established a security monitoring and handling platform to enhance the sensitivity to internal and external threats.
+The Bank actively pushed forward innovative services that cover all customers, all channels and all products. It participated in
+the establishment of the bill trading platform, supported the Bill Exchange to open for business, and improved the efficiency
+of bill trading. The Bank successfully completed the "replacement of business tax with VAT". A series of fresh products
+such as loan for discharging mortgages, online unsecured loan of corporate customers, paper natural gas and paper crude
+oil were made debut. The Bank continued to push forward the development of systems for internationalized and diversified
+operations and successfully launched such systems in ICBC (Mexico), Zurich Branch and Prague Branch. The Bank improved
+ICBC Quick Remittance and realized cross-border direct remittance with Standard Bank of South Africa. It also continued to
+optimize the new-generation core insurance business system for individuals and the insurance asset management system of
+ICBC-AXA.
+The Bank continued to enhance the production and operation service system. Under the new architecture of "three
+centers in two cities" which was already in normal operation, the Bank launched an 84-day local operation takeover,
+completed local switch at peak hours during the day for the first time and kept the impact of switch and switchback on
+business operations within one minute, promoted the intelligent monitoring platform to improve business operation level
+and continued to enhance disaster recovery technologies and business continuity management system, thus remarkably
+enhancing the information systems' continued operation capacity.
+IT-based Banking Development
+Discussion and Analysis
+47
+◆ Major Domestic Subsidiaries
+Annual Report 2016
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.08% ordinary shares of Standard Bank, and the two
+banks engage in cooperative and communication activities frequently. In 2016, in line with the spirit of cooperation for
+mutual beneficial and win-win outcomes, the Bank and Standard Bank continued their positive cooperation in a slew of
+areas including corporate banking, investment banking, financial market business, international clearing and settlement
+and information technology. The two sides also concluded the Main Framework Agreement on Cooperation in Respect of
+the Staff Exchange Program, giving a new boost to the bilateral strategic cooperation. At the end of 2016, Standard Bank
+recorded total assets of ZAR1,954,290 million and net assets of ZAR179,359 million. It generated a net profit of ZAR22,206
+million during the year.
+STANDARD BANK GROUP LIMITED
+Majority Equity Participation Company
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB8,705 million, in which the Bank holds a 60% stake. It
+engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and re-insurance
+of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the State, and other
+businesses approved by CIRC. At the end of 2016, ICBC-AXA recorded total assets of RMB104.85 billion and net assets of
+RMB8,926 million. It generated a net profit of RMB503 million during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB11.0 billion. It mainly engages in financial
+leasing of large-scale equipment in key fields such as aviation, shipping, energy and power, rail transit and equipment
+manufacturing and provides a variety of financial and industrial services including retail assignment, investment funds,
+securitization of investment assets, assets transactions and management. It has become a financial leasing company with the
+strongest comprehensive strength in China. At the end of 2016, ICBC Leasing recorded total assets of RMB300.6 billion and
+net assets of RMB26.2 billion. It generated a net profit of RMB3.42 billion during the year.
+ICBC FINANCIAL LEASING CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the Bank
+holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other businesses
+as approved by CSRC, and owns many business qualifications including public fund, QDII, enterprise annuity, specific asset
+management, domestic and overseas investment manager of social security fund, RQFII, insurance asset management,
+special asset management, occupational annuity, manager of basic pension insurance investment. It is one of the fund
+companies with "full-qualification" in the industry. ICBC Credit Suisse Asset Management (International) and ICBC Credit
+Suisse Investment are structured under ICBC Credit Suisse Asset Management. At the end of 2016, ICBC Credit Suisse Asset
+Management managed a total of 99 public funds and nearly 600 enterprise annuity accounts and special accounts as well as
+special portfolios, with the assets under management amounting to RMB1.13 trillion, and recorded total assets of RMB5,754
+million and net assets of RMB4,471 million. It generated a net profit of RMB1,641 million during the year.
+In line with the strategic needs of bank-wide information-based, internationalized and diversified development, the Bank
+carried forward innovation in concepts, methodology, system and mechanism of the Group's human resources management.
+It continued to strengthen the talent team building, broadened the career growth of employees, optimized staffing,
+improved management over organizations and institutions, pressed forward with innovation in organizational models and
+reinforced the incentives and restrictive roles of remuneration. The increasingly higher efficiency and effectiveness of human
+resources management offered solid organizational guarantee and talent support for the reform and development of the
+Bank.
+In line with the reform and development strategy and the new requirements on transformation and upgrading, the Bank
+advanced the establishment of the six systems for "ICBC College", conduced innovative training in all respects and ushered
+into new areas of education and training. By combining training with practice, the Bank realized coordinated planning and
+systemic advancement in training professionals. It reinforced the Party school training and highlighted the advantages of
+research-based learning. Besides, the Bank sharpened its ability in cross-cultural management, cross-border operation and
+local operation of overseas personnel, and set up a training system for overseas employees. It created a pragmatic and
+efficient mobile learning system, and intensified the timely transmission of business strategies and products. It implemented
+the optimization project of professional qualification certification and linked the certification with the business authorization
+and appointment of employees on all fronts. In 2016, the Bank organized 51 thousand sessions of training for 5.09 million
+employees, averaged to approximately 9.63 days of training per employee.
+The Bank continually promoted its corporate culture building. It carried out in-depth culture building activities, including the
+Ten Advanced Units Selection of "ICBC Cohesion" Corporate Culture Building, and the showcase of "Further Prospering
+ICBC through Five Years' Cultural Building and Pooling Our Force in Accomplishing Ten Events". The Bank also intensified
+the sub-culture building by publishing the compliance culture concepts of "Compliance principle, All accountable, Risk
+controllable, Efficiency sustainable" and the "Customer-centric, Satisfactorily served, Employee-based and Consistently
+honest" service cultural concepts and carrying forward the transmission and instilling of integrity culture. What's more, the
+Bank established a diversified and three-dimensional cultural transmission system by opening WeChat official account, ICBC
+Link service account, and capitalizing on external platforms, in an effort to enhance cultural communication with external
+parties and cultural display.
+48
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD158.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) is the RMB clearing bank in North
+America and provides various corporate and retail banking services such as deposit, loan, settlement, remittance, trade
+finance, foreign exchange trading, funds clearing, cross-border RMB settlement, RMB currency notes, cash management,
+E-banking, bank card and investment and financing information consulting service. At the end of 2016, ICBC (Canada)
+recorded total assets of USD1,249 million and net assets of USD166 million. It generated a net profit of USD12.57 million
+during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Argentina), a controlled subsidiary of the Bank in Argentina, has a share capital of ARS1,345 million, in which the
+Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) provides a full range of
+commercial banking services including deposit, loan and settlement. Its major businesses include working capital loan,
+syndicated loan, structured financing, trade finance, personal loan, auto loan, spot/forward foreign exchange trading,
+financial markets, cash management, investment banking, bond underwriting, asset custody, leasing, international
+settlement, E-banking, credit card and asset management. At the end of 2016, ICBC (Argentina) recorded total assets of
+USD4,876 million and net assets of USD596 million. It generated a net profit of USD183 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+ICBC (Brasil), a wholly-owned subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million. ICBC (Brasil) offers
+commercial banking and investment banking services such as deposit, loan, trade finance, international settlement, fund
+transaction, franchise wealth management and financial advisory. At the end of 2016, ICBC (Brasil) recorded total assets of
+USD215 million and net assets of USD66 million. It generated a net profit of USD1.63 million during the year.
+ICBC PERU BANK
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD50.00 million. Holding a full-
+functional commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement,
+trade finance, foreign exchange trading, offshore finance, E-banking and other services. At the end of 2016, ICBC (Peru)
+recorded total assets of USD122 million and net assets of USD28 million.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+Discussion and Analysis
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN664 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) offers corporate deposit, loan, international settlement, trade finance,
+foreign exchange trading and other services. At the end of 2016, ICBC (Mexico) recorded total assets of USD46 million and
+net assets of USD26 million.
+ICBC (Turkey), the first Chinese commercial bank in Turkey, has a share capital of TRY420 million in which the Bank holds a
+92.8169% stake. It holds commercial banking, investment banking and asset management licenses, and provides corporate
+customers with a basket of local and foreign currency-denominated financial services including RMB deposit, project loan,
+syndicated loan, trade finance, small and medium-sized enterprise loan, investment and financing advisory, securities
+brokerage and asset management, and renders personal customers with versatile local and foreign currency-denominated
+financial services such as RMB deposit, remittance, personal consumption loan, residential mortgages, credit card and
+E-banking. At the end of 2016, ICBC (Turkey) recorded total assets of USD2,344 million and net assets of USD172 million. It
+generated a net profit of USD5.48 million during the year.
+46
+ICBC
+Discussion and Analysis
+ICBC STANDARD BANK PLC
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million,
+in which the Bank holds a 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses
+covering base metals, precious metals, bulk commodities and energy and global financial markets services such as exchange
+rate, interest rate, unsecured products and equities. With its headquarters in London as the major business entity, ICBC
+Standard Bank has ICBC Standard Resources (China) Ltd., ICBC Standard NY Holdings Inc., ICBC Standard Securities Inc. and
+ICBC Standard Resources (America) Inc., as well as four branches in Singapore, Tokyo, Hong Kong and Dubai, and Shanghai
+Representative Office under it. At the end of 2016, ICBC Standard Bank recorded total assets of USD20,187 million and net
+assets of USD957 million.
+(Hong Kong, China).
+ICBC
+ICBC TURKEY BANK ANONIM ŞIRKETI
+African Representative Office
+(South Africa)-
+Controlled Subsidiaries and Major Equity Participating Company
+ICBC International
+Europe
+84
+87
+783
+567
+67,323
+69,935
+Macau)
+(except Hong Kong and
+Asia-Pacific Region
+107
+of 2015
+108
+of 2016
+58,317
+1,543
+135,988
+159,445
+Hong Kong and Macau
+2015
+2016
+of 2015
+of 2016
+Item
+At the end At the end
+Number of institutions
+At the end At the end
+(in USD millions)
+(in USD millions)
+Profit before tax
+1,646
++
+56,089
+58
+412
+3,166
+346
+312
+3,247
+3,295
+279,830
+3,771
+306,450
+Total
+Investment in Standard
+Bank(1)
+404
+412
+2,820
+2,935
+276,535
+302,679
+140
+Subtotal
+(49,741)
+Eliminations
+1
+1
+African Representative Office
+134
+136
+436
+582
+55,853
+64,723
+America
+78
+80
+(38,718)
+404
+In respect of standardized small loan service with symmetrical information, the Bank utilized the internet and big data
+for risk control modeling, improved the products and processes, and realized self-service online operation, automatic
+business processing and accurate risk monitoring, which enhanced the customer experience.
+The campaign of "the daily interest of each RMB 10,000 loan is just RMB1" earned the Bank a good reputation for its
+high limit, favorable price and quick disbursement.
+2016
+Service Enhancement
++
+The Bank optimized outlet service experience. It solicited comments
+Note: The proportion of E-banking business refers to the number of
+E-banking transactions against the total number of transactions
+of the Bank.
+and suggestions from customers across multiple channels and launched special campaigns to enhance the services.
+Customer experience indices covering multiple areas such as calibration, satisfaction and standardization were
+developed to precisely assess the service quality.
+The service culture system was put in place. The Bank managed to shorten the customers' waiting time, diversify the
+products and improve the services and employees' attitude. The Bank created a brand with the unique features of
+ICBC's service culture becoming an important part of the corporate culture.
+The Bank integrated the competitive edge of payment, loan and other key product lines and set up an efficient team
+based on the integration of technology and business. It utilized participation of user experience staff over the internet
+and set up the UI design team to enhance user experience.
+ICBC
+40
+Discussion and Analysis
+Consumer Protection
+The Bank enhanced the consumer protection policy framework, refined the working mechanisms and established
+supporting regulations, enabling the consumer protection work to be more systemized, standardized and
+institutionalized. The Bank attached importance to the integrated management of a full-process consumer protection,
+constantly strengthened consumer protection, enhanced financial products and services from the perspective of
+consumer protection, and promoted coordinated development of business operation and consumer protection and
+created a more harmonious market environment for financial consumers.
+The Bank fulfilled its duty for handling of consumer complaints, efficiently and properly solved consumer
+appeals, enhanced consumer experience by management and prevention in early stage and constantly improved
+standardization of service charge management. The Bank further expanded promotion channels to consumers,
+launched targeted financial knowledge propagandas in a routine and centralized manner for constantly enhancing the
+consumers' awareness of financial risks and ability to identify frauds.
+2015
+Internationalized and Diversified Operation
+♦ Internationalized Operation
++
++
+4
+The network of tier-2 institutions was expanded in the Netherlands, Belgium, Russia and Australia, and the regional
+service capability was remarkably enhanced.
+Bank ICBC (JSC) in Moscow was authorized by PBC as the RMB clearing bank, which is the seventh overseas RMB
+clearing bank of the Bank in the global market. This further improved the around-the-clock RMB clearing network of
+the Bank and further expanded the service coverage.
+The Bank provided a full range of cross-border financial services for RMB asset allocation by overseas sovereign
+institution customers, and has gradually become the first choice for overseas sovereign institutions to access the
+Chinese market. It has aslo launched "ICBC Integrated Financial Solutions for Cross-border E-commerce", building a
+distinctive cross-border e-commerce brand. In 2016, the Bank's cross-border RMB business volume reached RMB3.89
+trillion.
+As at the end of 2016, the Bank established 412 institutions in 42 countries and regions and indirectly covered
+20 African countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking
+relationships with 1,507 overseas banking institutions in 143 countries and regions, making its service network
+covering six continents and important international financial centers around the world. The Bank maintained 127
+institutions in 18 countries and regions along the "Belt and Road".
+Annual Report 2016
+41
+Discussion and Analysis
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+Assets
+ICBC (New Zealand)
+The Bank steadily advanced global network layout channel building, and extended the presence network of overseas
+institutions. Overseas institutions further improved their capabilities for localized operation and sustainable development. A
+slew of global key product lines involving investment banking, cash management, financial markets, asset management and
+asset custody were developed in depth and breadth in a bid to sharpen competitive edges and influence on the international
+market. Leveraging on the investment and financing product lines such as global financing, investment banking and
+financial leasing, the Bank served the "Belt and Road" initiative and the cooperation in international production capacity
+and supported the "Going Global" drive of Chinese-funded enterprises. Comprehensive subsidiaries delivered stronger profit
+contributions and strategic synergies to the Group.
+To facilitate the business handling of corporate customers, the Bank premiered a number of services including online
+unsecured loans for corporate customers, financing pledged with the assets in the online bill pool and online issuing of
+acceptance drafts under E-banking.
+90.2
+2014
+Payment
+The Bank improved the functions of its payment products, enriched application scenarios, made debut QR payment
+and promoted one-key payment. Thanks to these efforts, the number of "ICBC e-Payment" customers went beyond
+100 million.
+The Bank diversified the service items under "ICBC e-Bill Payment" for the convenience of the public such as water,
+electricity and gas bills and also other characteristic items such as traffic fines, ETC top-up. The Bank supported bill
+payment of non-ICBC customers at the mobile end, and handed out red pockets online to attract new users.
+The Bank was the first bank to conduct Apple Pay online business, and released the mobile payment products such as
+Samsung Pay, Huawei Pay and Mi Pay.
+Investment and Wealth Management
++
+The Bank improved the investment and trading system for individual investors. ICBC e-Investment covers a variety of
+products such as paper precious metals, paper crude oil and Gold Accumulation. Paper natural gas, paper base metals
+and paper agricultural products were added into it. The investment and wealth management product line registered a
+transaction amount of more than RMB500 billion in 2016.
+39
+Discussion and Analysis
+Channel Development and Service Enhancement
+Channel Development
+◆ The Bank promoted layout optimization of offline channels and transformation of business models.
++
++
+92.0
+The Bank controlled the total number of physical outlets, optimized outlet layout, and used light outlets as an effective
+way of making presence in emerging and blank areas. It established and enhanced outlet renovation standards,
+strengthened the internal layout planning of outlets and further improved the operation efficiency and marketing
+service capacity of outlets.
+The Bank promoted the intelligent outlet services and enhanced the functions of intelligent services. It launched
+services such as application for credit card, change of mobile phone number and exemption of annual fee.
+The Bank analyzed the operation of self-service channels and customer data, enhanced the operation efficiency of
+self-service channels and strengthened the functional complementation and coordinated development with physical
+outlets.
+At the end of 2016, the Bank had 16,429 physical outlets and 29,385 self-service banks. The number of ATMs was
+100,083 and their transaction volume reached RMB13,265.7 billion.
+◆ The Bank accelerated the strategic layout and functional
+improvement of online channels.
++
+The open-ended personal internet banking was rolled out with
+optimized pages and transaction procedures so that even non-
+ICBC customers can also have access to the Bank's financial services
+online.
+The intelligent robot "ICBC Intellectual" was made available via SMS,
+WeChat, online customer service and ICBC Link to realize intelligent
+interaction with customers and offer intelligent suggestions.
+The E-banking transaction amount hit RMB599 trillion; the number
+of E-banking transactions accounted for 92.0% of total transactions
+of the Bank, rising by 1.8 percentage points from the last year.
+Proportion of E-banking Business
+%
+80.2
+2013
+86.0
+The Bank merged the public processing procedures of multiple transactions, realized information sharing and solved
+the problems that the customers had to complete multiple forms, sign their names many times and enter passwords
+again and again.
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before tax represents the Bank's gain
+on investment recognized by the Bank during the reporting period.
+Annual Report 2016
+As at the end of 2016, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD306,450 million, an increase of USD26,620 million or 9.5% from the end of
+the previous year, and they accounted for 8.8% of the Group's total assets. Total loans amounted to USD175,871
+million, rising by USD31,811 million or 22.1%, and total deposits were USD97,223 million, increasing by USD10,465
+million or 12.1%. Profit before tax during the reporting period was USD3,247 million, increasing by 2.6% compared
+with the previous year and representing 6.2% of the Group's profit before tax.
+1
+Abu Dhabi Branch (UAE).
+1
+Doha Branch (Qatar)---------
+1
+Yangon Branch (Myanmar) -
+Phnom Penh Branch (Cambodia) ---- 1
+1
+1
+E
+1
+3
+Seoul Branch (South Korea):
+Busan Branch (South Korea)
+Hanoi Branch (Vietnam)----
+Vientiane Branch (Lao PDR)-
+3
+Riyadh Branch (Saudi Arabia)-
+institutions
+ICBC (Mexico) (Mexico)
+Number of
+ICBC (Peru) (Peru)--
+1
+ICBC (Brazil) (Brazil)
+ICBC (Argentina) (Argentina) --107
+Tokyo Branch (Japan)-
+Singapore Branch (Singapore)-------11
+Hong Kong and Macau)
+Asia-Pacific Region (except
+ICBC Mobile
++
++
++
+1
+The brand, functions and services of ICBC Mobile were wholly upgraded to make it more open, intelligent and
+individualized.
+1
+1
+(South Africa)
+4
+4
+Sydney Branch (Australia) --
+2
+(Hong Kong, China).
+Investments in Standard Bank
+1
+ICBC (Almaty) (Kazakhstan)
+Hong Kong Branch
+Discussion and Analysis
+22
+ICBC (Thai) (Thailand).
+ICBC (Asia) (Hong Kong, China) 73
+Dubai (DIFC) Branch (UAE)-
+Number of
+institutions
+Institution
+23
+5
+ICBC (Malaysia) (Malaysia) -
+ICBC (Indonesia) (Indonesia)
+institutions
+Number of
+E
+1
+3
+Karachi Branch (Pakistan).
+Mumbai Branch (India)
+(country/region)
+Hong Kong and Macau
+Institution
+Africa
+1
+(country/region)
+The Bank pressed forward with product innovation, conducted R&D of products to improve user experience, and rolled
+out new functions such as withdrawing money by scanning QR code, registering for hospital for friends and relatives
+and remitting money to foreign banks.
+Kuwait Branch (Kuwait)
+In 2016, the number of ICBC Mobile customers surpassed 250 million.
+Madrid Branch (Spain)-
+1
+Warsaw Branch (Poland).
+1
+Paris Branch (France)·
+ICBC (Europe) (Luxembourg)-----1
+10
+ICBC Standard (UK)----
+1
+London Branch (UK)
+-----5
+Frankfurt Branch (Germany) -
+1
+(Luxembourg)
+institutions
+(country/region)
+Number of
+◆ Diversified Operation
++
+The Bank actively carried out various socialized marketing campaigns by utilizing live broadcasting video and other new
+platforms.
+4
+ICBC Credit Suisse Asset Management seized the opportunities from the policies and the market, further improved
+its functions as an all-round asset management platform, and kept enriching its products. The assets under its
+management exceeded RMB1 trillion.
+ICBC Leasing worked faster to secure professional, differentiated, featured and international development, and strove
+to shift from growth in size to that in quality and benefits.
+2
+ICBC-AXA made more efforts to realize installment-based payment transformation. Its high-speed growth in premium
+income fueled the increase of investment assets and the investment income was improved significantly.
+ICBC
+42
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+呂®
+Discussion and Analysis
+Institution
+ICBC International, a licensed investment bank of the Group, accelerated its transformation and development, put
+equal emphasis on traditional investment banking business, asset management and investment business, thereby
+steadily enhancing its sustainability.
+Milan Branch (Italy)--
+Luxembourg Branch
+Amsterdam Branch
++
++
+2
+(country/region)
+Institution
+E
+**
+10
+1
+ICBCFS (USA)
+14
+ICBC (USA) (USA)-
+(2)
+1
+New York Branch (USA)-
+ICBC (Canada) (Canada)
+institutions
+(the Netherlands)-
+2
+Brussels Branch (Belgium) -----2
+ICBC (London) (UK)-----
+1
+Bank ICBC (JSC) (Russia)-
+3
+Internet Financing
+ICBC Turkey (Turkey)-
+48
+America
+Institution
+(country/region)
+Number of
+9,635
+2.2
+154,493
+Metal processing
+3.39
+7,996
+3.4
+8,308
+3.91
+8,566
+254,497
+3.1
+212,649
+3.7
+3.37
+235,873
+Machinery
+6,644
+171,065
+equipment, and
+4.88
+other electronic
+telecommunications
+Computer,
+4.73
+2.0
+6.24
+140,369
+7,201
+1.8
+124,729
+Textiles and apparels
+4.17
+7,138
+2.5
+5.77
+11,796
+NPLratio
+241,712
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Transportation, storage
+Loan
+Percentage
+NPLratio
+Percentage
+At 31 December 2015
+At 31 December 2016
+equipment
+In RMB millions, except for percentages
+Item
+3.5
+and postal services
+21.8
+Chemical industry
+3.43
+51,353
+21.6
+1,496,241
+4.29
+60,639
+1,516,089
+20.4
+Manufacturing
+0.28
+3,985
+20.7
+1,429,697
+0.20
+3,022
+1,414,408
+118,588
+commercial service
+1,718
+820,692
+gas and water
+electricity, heat,
+Production and supply of
+4.54
+12,196
+3.9
+11.9
+268,917
+13,641
+3.5
+242,354
+Others
+0.46
+240
+0.8
+5.63
+52,127
+501
+780,370
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+9.0
+625,488
+Wholesale and retail
+0.75
+4,906
+9.5
+0.06
+652,956
+4,938
+10.7
+736,921
+Leasing and
+0.19
+1,494
+11.3
+0.67
+1.7
+2.41
+0.8
+equipment
+Transportation
+0.92
+1,043
+1.6
+113,841
+0.47
+92,572
+509
+108,554
+Iron and steel
+1.09
+1,064
+1.4
+97,733
+1.45
+1.6
+1,296
+1.3
+91,944
+53,706
+nuclear fuel
+coking and
+Petroleum processing,
+2.51
+1,756
+1.0
+4.41
+69,875
+2,455
+0.9
+65,051
+Non-metallic mineral
+5.12
+4,710
+1.3
+3.77
+Discussion and Analysis
+Note: Substantial risks including country risk and reputational risk have been incorporated into the enterprise risk management system.
+52
+Discussion and Analysis
+51
+Annual Report 2016
+In 2016, the Bank continued to strengthen credit risk management of treasury operations. It further improved credit risk
+monitoring and analysis mechanism for treasury operations, proactively upgraded the structure of bond investment portfolio
+in line with current trends on domestic and international financial markets, continued to maintain investment in government
+bonds and high-quality unsecured bonds, shorten the term of unsecured bonds and other investment as appropriate,
+increase the R&D and investment in innovative products, and strive to mitigate the credit risk of bond investment portfolio.
+The Bank's treasury operations are exposed to credit risk mainly as a result of bonds investment and trading, interbank
+offering, bills with reverse repurchase agreements and RMB bonds borrowing. Credit risk management measures adopted
+by the Bank in relation to treasury operations mainly comprised defining customers' entry criteria, controlling credit limit,
+controlling investment limit (scale), strict margin management, rating management and controlling authorization limit for
+single transactions. The Bank has set financing limits for each interbank offering and adopted the principle of management
+for both credit and authorization.
+◆ Credit Risk Management of Treasury Operations
+The Bank improved credit-extension system for credit card. It utilized the way of thinking and data of the Internet into
+building a multi-dimensional customer evaluation system, with special attention paid to precise credit extension of credit
+card customers, and strictly implemented the differentiating dynamic management of credit-extension. The Bank conducted
+active screening and investigation of potential risk customers, and reinforced the application of internal rating and scoring
+approach in potential risk identification. It continuously improved centralized approval control functions of the personal
+credit approval system, upgraded the functions of post-lending management system and improved the collection system.
+Efforts were made to strengthen the asset quality monitoring and notification of credit card loans, so as to timely identify
+potential risks and take differentiated control measures. Besides, the Bank actively carried out securitization of non-
+performance assets relating to credit card, and further expanded disposal channels of non-performing assets.
+Credit Risk Analysis
+◆ Credit Risk Management of Credit Card Business
+◆ Credit Risk Management of Personal Loans
+The Bank strengthened credit risk management of small enterprises. It continued to improve the development model of
+financial business for small and micro enterprises, increased the number of small and micro enterprise banking centers and
+enabled the small and micro enterprise banking to be more intensive and professional. It also established independent rating
+and credit systems regarding small enterprises, strengthened associated credit line approval and access management of new
+small enterprises. Moreover, the Bank reinforced the tracking of risk trend, enhanced risk screening on existing loans and
+drew up risk mitigation and disposal plan for customers with potential risk. On the basis of effective risk control, the Bank
+actively used the existing policy to solve the credit need of small and micro enterprise customers with normal operation, and
+increased support to small and micro enterprises in real economy.
+The Bank strengthened risk management in relation to trade finance. It refined the trade finance product management rules,
+adjusted the structure of trade finance credit products and promoted the integration of trade finance and working capital
+loans. It also strengthened risk screening over key products and key regions and fortified the risk management of off line
+supply chain finance.
+The Bank strengthened risk management of the real estate industry. It adjusted and refined the city-specific management
+of real estate loans, and prudently granted new housing development loans to tier-3 and tier-4 cities with long de-stocking
+period and high risks, strictly controlled loans to commercial housing development, and steadily advanced loan granting for
+shantytown renovation as a part of the government's service procurement.
+Discussion and Analysis
+ICBC
+50
+The Bank improved its credit risk management system for personal loans, optimized review and approval process of personal
+loan, strengthened specialized management of partner institutions which granted personal loans, and strictly prevent the
+spreading of risk. It also strengthened the differentiated management of percentage area concerning personal residential
+mortgages with an eye to changes in the real estate market. A differentiated interest rate pricing mechanism for regions,
+projects and customers of personal residential mortgages was implemented and risk pricing capability of personal residential
+mortgage business was enhanced. The Bank strengthened the access management of real estate enterprises, mortgage
+projects, partner institutions and borrowers and stringently reviewed the authenticity of the down payment to prevent all
+forms of false mortgage, zero down payment and false trading fraud risk. Moreover, the Bank strictly selected cooperative
+projects of personal commercial housing loans, raised the down payment ratio of such loans, and strengthened phased
+guarantee management.
+The Bank focused on serving the real economy and the supply-side structural reform, constantly adjusted and improved
+industrial credit policy in accordance with the macroeconomic policy, the prevailing trends of industrial policy and the
+characteristics of the operation of the industry as well as the important strategic initiatives of the country. Conforming
+to the industrial policy system of "18 segments + key sub-industries", the Bank strengthened the industrial investment
+layout, highlighted strategies of key areas and quality customers. While supporting leading industrial enterprises and their
+transformation and upgrading demands, it continuously improved and adjusted industrial credit structure, further stressed
+the strategic functions of credit policy, and promoted the guidance, practicality and operability of industrial credit policy.
+According to the national regional development strategic plan and the Bank's credit strategy orientation, the Bank supported
+the three "supporting belts" development strategy the Beijing-Tianjin-Hebei integration initiative, the Yangtze Economic
+Belt initiative, and the "Belt and Road" initiative, and backed the development strategies for such regions as the Pearl River
+Delta and the Northeastern China. It improved differentiating regional credit policies for business authorization, product
+policy and access standards, intensified differentiating instructions for regional credit markets and prioritized the support to
+key municipal branches to accelerate the expansion of urban functions and improve the field-leading credit markets.
+At the end of 2016, the Bank's maximum exposure to credit risk, without taking into account any collateral and other credit
+enhancements, was RMB26,237,544 million, showing an increase of RMB2,285,007 million when compared with the end
+of the previous year. Please refer to "Note 54. (a)(i) to the Financial Statements: Details of the Bank's Maximum Exposure
+to Credit Risk Without Taking Account of Any Collateral and Other Credit Enhancements". For mitigated risk exposures of
+credit risk asset portfolio of the Bank, please refer to "Credit Risk" of the 2016 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited.
+Item
+93.91
+12,261,034
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2015
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+In RMB millions, except for percentages
+Total
+Loss
+Doubtful
+Substandard
+NPLs
+Special mention
+Pass
+At 31 December 2016
+Amount
+11,233,456
+The Bank continued to strengthen the formation of the credit rule framework and improve credit system. The Bank
+intensified the implementation of uniform credit extension and standardized cross-regional credit business management. It
+further standardized collateral management rules, reinforced guarantee and collateral management and elevated the access
+requirements for eligible guarantee. It also clarified the key areas of review, strengthened the capability of substantial risk
+mitigation of collateral, and put more efforts on preventing credit risk in guarantee services.
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months for which the lender is in default, anticipated loss
+rate, credit rating, collaterals and other quantitative and qualitative factors.
+Operational Risk
+Chief Risk Officer
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Risk Management Committee
+of the Board of Directors
+Internal Control &
+Compliance Department
+Credit Risk
+Risk Management
+Department
+Credit and Investment
+Management Department
+Board of Directors
+Senior Executive
+Vice Presidents
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Senior Management and its special committees, the Risk Management Department, the Internal Audit Department, etc. The
+risk management organizational structure is illustrated below:
+Enterprise risk management is a process where the Board of Directors, the Senior Management and other employees of the
+Bank perform their respective duties and responsibilities to take effective control of all the risks at various business levels
+in order to provide reasonable guarantee to the achievement of objectives of the Bank. The principles of risk management
+include matching return with risk, internal check and balance with consideration as to efficiency, risk diversification,
+combination of quantitative and qualitative analysis, dynamic adaptability adjustments and gradual improvement, etc.
+Enterprise Risk Management System
+Discussion and Analysis
+RISK MANAGEMENT
+President
+◆ Credit Risk Management of Corporate Loans
+Market Risk
+Liquidity Risk
+The Bank's credit risk management has the following characteristics: (1) standardized credit management processes are
+implemented throughout the Bank; (2) the principles and processes of risk management focus on the entire process of credit
+business, covering customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and post-
+lending monitoring; (3) special organization is set up to supervise the entire process of credit business; (4) the qualification
+of the employees who are responsible for credit review and approval is strictly reviewed; and (5) a series of information
+management systems are designed to reinforce monitoring on the risks.
+The Bank strictly adheres to the guidance from CBRC regarding credit risk management and other regulatory requirements,
+diligently fulfills established strategies and objectives under the leadership of the Board of Directors and the Senior
+Management, and implements an independent, centralized and vertical credit risk management mode. The Board of
+Directors assumes the ultimate responsibility for the effectiveness of the implementation and monitoring of credit risk
+management. The Senior Management is responsible for executing the strategies, overall policy and system regarding credit
+risk management approved by the Board of Directors. The Credit Risk Management Committee of the Senior Management
+is the reviewing and decision-making organ of the Bank in respect of credit risk management, is responsible for reviewing
+material and important affairs of credit risk management, and performs its duty in accordance with the Working Regulations
+for the Credit Risk Management Committee. The credit risk management departments at different levels undertake the
+responsibility of coordinating credit risk management at respective levels, and the business departments play their roles in
+implementing credit risk management policies and standards in respective business areas.
+The Bank is primarily exposed to credit risk. Credit risk is the risk that loss is caused to banking business when the borrower
+or counterparty fails to meet its contractual obligations. The Bank's credit risks mainly originate from loans, treasury
+operations (including due from banks, placements with banks, reverse repurchase agreements, corporate bonds and financial
+bonds investment), receivables and off-balance sheet credit business (including guarantees, commitments and financial
+derivatives trading).
+Credit Risk Management
+Credit Risk
+Discussion and Analysis
+At the level of Board
+of Directors
+Asset & Liability
+Management Department
+At the level of Head Office
+Annual Report 2016
+In 2016, the Bank further improved the enterprise risk management system, continuously upgraded risk management
+technologies and methods, enhanced the capacity of risk pre-judgment and dynamic control, so as to push the enterprise
+risk management to a new level. It also promoted the implementation of the latest international and domestic regulatory
+requirements, improved the basic policies for enterprise risk management and better managed related work of G-SIB. In
+addition, the Bank strengthened consolidated risk management in the Group, intensified the management of risk limits for
+non-banking subsidiaries, and organized the risk assessment of the subsidiaries. It advanced country risk management by
+strengthened monitoring analysis, reporting and limit management, and enhanced sovereign risk control capability. The Bank
+reinforced the management of the Group's market risk, strengthened the market risk management of overseas institutions
+and continued perfecting its product control. It further implemented the advanced capital management approaches, and
+continued to refine the measurement system concerning credit risk, market risk and operational risk and strengthen the
+monitoring, improvement, validation and management application of the risk measurement system.
+At the level of branches
+58,029
+Primary reporting line
+Secondary reporting line.
+Risk Management
+Departments of Branches
+Management of Branches
+49
+ICBC
+(%)
+584,011
+524
+4.4
+522,052
+0.08
+598
+5.5
+719,993
+0.10
+Discounted bills
+135,256
+65.9
+7,869,552
+1.96
+159,871
+62.4
+8,140,684
+1.72
+Corporate loans
+Personal loans
+32.1
+Non-performing corporate loans stood at RMB159,871 million, increasing by RMB24,615 million from the end of the
+previous year, and the NPL ratio was 1.96%. This was mainly due to default of loan as some enterprises suffered from
+the lack of funding, and trade enterprises and SMEs in traditional industries encountered operating difficulties in the face
+of economic structural adjustment and industry transformation and upgrading. Non-performing personal loans stood at
+RMB51,332 million, increasing by RMB7,594 million, and the NPL ratio was 1.22%, which was mainly due to the increase in
+NPL amount of personal loans as a result of the decrease of operating income or the decrease of salaries of some borrowers.
+1.50
+179,518
+100.0
+11,933,466
+1.62
+211,801
+4,196,169
+100.0
+Total
+1.23
+43,738
+29.7
+3,541,862
+1.22
+51,332
+13,056,846
+94.14
+(%)
+NPL ratio
+19,862
+0.51
+60,512
+0.63
+82,505
+0.87
+104,805
+0.15
+0.84
+1.50
+179,518
+1.62
+211,801
+4.36
+520,492
+4.47
+109,434
+NPLs
+14,201
+13,056,846
+Percentage
+(%)
+Loan
+(%)
+NPLs
+NPL ratio
+Percentage
+(%)
+Loan
+0.12
+Item
+At 31 December 2016
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+Loan quality remained stable overall. As at the end of 2016, according to the five-category classification, pass loans
+amounted to RMB12,261,034 million, representing an increase of RMB1,027,578 million when compared with the end
+of the previous year and accounting for 93.91% of total loans. Special mention loans amounted to RMB584,011 million,
+representing an increase of RMB63,519 million and accounted for 4.47% of the total. NPLs amounted to RMB211,801
+million, showing an increase of RMB32,283 million, and the NPL ratio was 1.62%. Under the new normal where economic
+growth slows down, structural adjustment deepens and industrial transformation accelerates, some industries and
+enterprises suffered capital chain tension which led to worsening solvency of some enterprises. Hence, the Bank faced
+mounting pressure in controlling the credit asset quality.
+100.00
+11,933,466
+100.00
+At 31 December 2015
+9.28
+4,080
+10.7
+Total
+Over 3 years
+1 to 3 years
+3 months to 1 year
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+Loans secured by mortgages stood at RMB5,986,629 million, representing an increase of RMB487,626 million or 8.9% from
+the end of the previous year. Pledged loans amounted to RMB1,610,680 million, representing an increase of RMB105,536
+million or 7.0% from the end of the previous year. Guaranteed loans amounted to RMB1,867,424 million, representing an
+increase of RMB225,054 million or 13.7% from the end of the previous year. Unsecured loans amounted to RMB3,592,113
+million, representing an increase of RMB305,164 million or 9.3% from the end of the previous year.
+100.0
+At 31 December 2016
+11,933,466
+13,056,846
+Total
+27.5
+3,286,949
+27.5
+3,592,113
+Unsecured loans
+13.8
+1,642,370
+100.0
+14.3
+In RMB millions, except for percentages
+% of total
+346,127
+0.13
+15,205
+0.13
+17,546
+0.53
+62,783
+0.78
+101,916
+At 31 December 2015
+0.71
+0.58
+75,550
+% of total
+loans
+1.42
+169,902
+1.16
+151,115
+Amount
+loans
+Amount
+84,808
+1,867,424
+Guaranteed loans
+4.4
+In RMB millions, except for percentages
+At 31 December 2015
+At 31 December 2016
+DISTRIBUTION OF LOANS BY COLLATERAL
+As at the end of 2016, the allowance for impairment losses on loans stood at RMB289,512 million, a year-on-year increase
+of RMB8,858 million. Allowance to NPL was 136.69%; allowance to total loans was 2.22%.
+Discussion and Analysis
+ICBC
+54
+1,999
+289,512
+223,955
+Percentage
+65,557
+(5,135)
+(74,144)
+(8,145)
+773
+1,226
+Recoveries of loans and advances previously written off
+(65,999)
+Write-offs
+(5,135)
+Accrued interest on impaired loans
+(176,431)
+Balance at the end of the year
+Percentage
+Item
+Amount
+522,052
+5.5
+719,993
+Including: Discounted bills
+12.6
+1,505,144
+12.3
+1,610,680
+Pledged loans
+21.1
+2,516,196
+24.8
+3,237,427
+Including: Residential mortgages
+46.1
+(%)
+Amount
+5,499,003
+45.9
+5,986,629
+Loans secured by mortgages
+(%)
+2.65
+(865)
+(148,540)
+332,698
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+The Bank's objective of currency risk management is to control the impact of exchange rate fluctuations on the Bank's
+financial position and shareholders' equity within a tolerable extent. The Bank mitigates such risk principally by limit
+management and hedging of risks. The Bank carries out sensitivity analysis and stress test of currency risk on a quarterly
+basis, and submits currency risk reports to the Senior Management and the Market Risk Management Committee.
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities.
+◆ Currency Risk Management
+Discussion and Analysis
+57
+Annual Report 2016
+In 2016, the Bank focused on adopting steady and prudent interest rate risk appetite. It comprehensively utilized
+interest rate limit system management, term structure management, internal and external pricing management, hedging
+management and other instruments to effectively control the Group's interest rate risk, taking interest rate risk management
+strategies and the business development conditions into consideration.
+734,994
+Interest rate risk is defined as the risk of loss in the overall gain and economic value of the banking book arising from
+adverse movements in interest rate and term structure, etc. Interest rate risks mainly include repricing risk, yield curve risk,
+benchmark rate risk and option risk, of which, repricing risk and benchmark rate risk are the Bank's primary interest rate
+risks.
+Market Risk Management of the Trading Book
+♦ Interest Rate Risk Management
+In order to take more effective market risk management measures and accurately measure regulatory capital arising from
+market risk, the Bank categorized all on- and off-balance sheet assets and liabilities into its trading book and banking book
+according to the nature and characteristics of different books. The trading book includes tradable financial instruments and
+commodity positions held by the Bank for the purposes of trading or hedging the risks of other items in the trading book,
+whereas all other positions are included in the banking book.
+Banking Book and Trading Book
+In 2016, the Bank continued to strengthen consolidated management of market risk and persistently enhanced the
+management and measurement of market risk at the Group's level. It further improved the Group's market risk management
+rules and regulations, and implemented institution classified management and delicacy management of institutions. It
+strengthened management of the Group's market risk limit, optimized limit management plan and strengthened limit
+monitoring and analysis. It pushed forward the overseas expansion of the Global Market Risk Management (GMRM) system
+and pressed ahead with the core application of the system in risk measurement, limit monitoring and stress testing.
+The Bank strictly complies with the Guidelines on Market Risk Management of Commercial Banks issued by CBRC and
+other related regulatory requirements, implemented an independent, centralized and coordinated market risk management
+model, and formed a management organizational structure featuring the segregation of the front office, the middle office
+and the back office in the financial market business. The Board of Directors assumes the ultimate responsibility for the
+implementation and monitoring of market risk management. The Senior Management is responsible for executing the
+strategies, overall policy and system regarding market risk management approved by the Board of Directors. The Market
+Risk Management Committee of the Senior Management is the reviewing and decision-making organ of the Bank in
+respect of market risk management, and is responsible for reviewing important matters of market risk management, and
+performs its duty in accordance with the Working Regulations for the Market Risk Management Committee. The market
+risk management departments at different levels are responsible for coordinating the market risk management at respective
+levels, and the business departments play their roles in implementing market risk management policies and standards in
+respective business areas.
+Market risk management is the process of identifying, measuring, monitoring, controlling and reporting market risk for
+the purposes of setting up and enhancing the market risk management system, specifying responsibilities and process,
+determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+Discussion and Analysis
+ICBC
+56
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, and stock price and commodity prices). The Bank is primarily exposed
+to interest rate risk and currency risk (including gold).
+Market Risk Management of the Banking Book
+Market Risk
+The Bank continued to improve risk measurement and product control of the trading book by adopting multiple methods
+including Value at Risk (VAR), sensitivity analysis and exposure analysis to measure and manage products in the trading
+book. The Bank also optimized the market risk limit management system based on trading portfolios, improved the three-
+tier limit approval mechanism consisting of the Board of Directors, the Market Risk Management Committee and business
+departments. In addition, it optimized limit setting in a scientific manner and realized fast and flexible limit monitoring and
+dynamic adjustment relying on the Global Market Risk Management (GMRM) system. For VaR of the trading book of the
+Bank, please refer to "Note 54. (c)(i) to the Financial Statements: Value at Risk (VaR)".
+♦ Interest Rate Risk Analysis
+ICBC
+58
+In 2016, the Bank closely watched the changes in external market and internal funds, actively took a combination of
+management measures such as price leverage to adjust and optimize the aggregate amount and structure of foreign
+exchange assets and liabilities, and strengthened assets and liabilities currency structure management and capital fund
+preservation management of overseas institutions. The currency risk of the Bank was under control.
+◆ Currency Risk Analysis
+For interest rate sensitivity analysis, please refer to "Note 54. (c)(ii) to the Financial Statements: Interest Rate Risk”.
+Note: Please refer to "Note 54.(c)(ii) to the Financial Statements: Interest Rate Risk".
+1,119,599
+1,531,435
+Over 5 years
+Market Risk Analysis
+1 to 5 years
+487,380
+399,606
+(1,577,446)
+(1,481,484)
+3 months
+Less than
+In RMB millions
+At 31 December 2015
+At 31 December 2016
+INTEREST RATE RISK EXPOSURE
+As at the end of 2016, the Bank had a negative cumulative interest rate sensitivity exposure within one year of RMB420,695
+million, representing a decrease of RMB527,731 million from the end of the previous year, mainly caused by the decrease of
+bond investment and due from banks and other financial institutions repriced or matured within one year and the increase
+of due to customers. Cumulative interest rate sensitivity positive exposure over one year stood at RMB2,018,815 million,
+representing an increase of RMB499,610 million, mainly due to the increase in bond investment matured over one year.
+In 2016, by proactively responding to interest rate liberalization, the Bank reasonably examined and studied the trend of
+macroeconomics and market interest rate trends, and moderately guided the term structure of assets and liabilities. Properly
+grasping the term structure of interest rates, it effectively controlled the duration gap of assets and liabilities and interest
+rate sensitivity gap to ensure the realization of interest rate risk management objectives.
+3 months to
+1 year
+1,156,751
+1,588,520
+In 2016, the Bank continued to reinforce the risk management of financial asset service business. It continuously improved
+the basic management system for financial asset service business and optimize the management system regarding innovative
+products, upgraded the differentiating risk management system of agency investment and took the initiative to strengthen
+the credit risk management of non-standardized creditor's rights business, expanded the scope of investment products and
+built a differentiated management system in line with characteristics of market risk focusing on factors such as growth of
+underlying value for investment, bettered functions of the financial asset service business management system, enhanced the
+coverage and data quality of the non-standardized business system and elevated system management level.
+The sources of the Bank's risks in financial asset service business are mainly the credit risk of financing customers,
+management risk of partner institutions and market risk of price fluctuation of underlying assets. The Bank, as the service
+supplier, is entrusted by investors to manage their wealth and does not bear investment risk of investors. The Bank took
+more active risk management measures to provide better and more efficient financial asset services, including managing
+access according to different business natures and risk management requirements of financial asset services, and performing
+access approval process in terms of investment customers, financing customers, partner institutions, new businesses, new
+products and domestic and overseas affiliates of financial asset service businesses according to applicable access standards,
+incorporating business authorization into unified authorization management of the Bank, and establishing a risk limit
+management system.
+Risk Management of Financial Asset Service Business
+Transportation, storage and postal services
+0.3
+32,453
+0.8
+96,995
+loans
+Amount
+Transportation, storage and postal services
+Transportation, storage and postal services
+Industry
+32,301
+Borrower
+Borrower A
+Borrower B
+Borrower C
+In RMB millions, except for percentages
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted for
+4.5% and 13.3% of the Bank's net capital respectively. The total amount of loans granted to the top ten single customers
+was RMB283,629 million, accounting for 2.2% of total loans. The table below shows the details of the loans granted to the
+top ten single borrowers of the Bank as at the end of 2016.
+BORROWER CONCENTRATION
+Discussion and Analysis
+55
+Annual Report 2016
+Renegotiated loans and advances amounted to RMB5,541 million, representing an increase of RMB984 million as compared
+to the end of the previous year. Renegotiated loans and advances overdue for over three months amounted to RMB1,398
+million, representing a decrease of RMB172 million.
+RENEGOTIATED LOANS
+Overdue loans stood at RMB346,127 million, representing an increase of RMB13,429 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB 195,012 million, representing an increase of
+RMB32,216 million.
+% of total
+0.3
+Borrower D
+Transportation, storage and postal services
+2.2
+283,629
+0.1
+16,300
+0.1
+16,329
+0.1
+16,470
+0.1
+16,811
+0.1
+17,650
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Borrower G
+Borrower H
+Borrower I
+Borrower J
+Total
+Borrower F
+0.1
+18,600
+Information transmission, software and information technology services
+Borrower E
+0.2
+19,720
+2.79
+(27,891)
+The Bank's interest rate risk management is aimed at maximizing the risk-adjusted net interest income within the tolerable
+level of interest rate risk under its risk management and risk appetite. The Bank adheres to the prudence principle in interest
+rate risk management of the banking book. The department in charge of interest rate risk management of the banking
+book and business departments jointly monitor and forecast interest rate trends and manage the interest rate risk based on
+monitoring results, so as to maximize the risk-adjusted income.
+86,138
+262,569
+Total
+1.03
+1,967
+2.8
+191,430
+1.25
+2,456
+2.9
+197,119
+6,912,537
+Others
+3,453
+2.1
+145,175
+2.25
+2,742
+1.8
+122,117
+Lodging and catering
+0.46
+2.38
+575
+100.0
+2.20
+(%)
+NPLs
+(%)
+Loan
+Item
+NPL ratio
+At 31 December 2015
+Percentage
+NPL ratio
+Percentage
+152,318
+At 31 December 2016
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+In 2016, the Bank actively followed major national development strategies, and strove to satisfy the loan demand of
+investment projects in national key areas. The Bank prioritized the service to the sub-industries in traditional sector which
+satisfied the state policies and showed good prospect, and showed support to the leading industrial enterprises and their
+transformation and upgrading, so as to continuously adjust the industrial credit structure. Loans to the transportation,
+storage and postal services showed an increase of RMB86,392 million, which is an increase of 6.0%, and this was
+mainly used to support high-quality national transportation infrastructure construction projects. Loans to the leasing and
+commercial services also showed an increase of RMB83,965 million, which is an increase of 12.9%, and this was mainly due
+to the rapid growth of loans to investment and asset management and other commercial services. As a result of support
+for construction projects for infrastructure facilities, loans to water, environment and public utility management showed
+an increase of RMB56,000 million, which is an increase of 12.1%. Loans to the production and supply of electricity, heat,
+gas and water industry rose by RMB40,322 million, which is an increase of 5.2%, and this was mainly due the support to
+meeting the demand of loan in urban infrastructure construction, public utilities construction and the clean energy sector.
+The balance of NPLs of the wholesale and retail industry and the manufacturing industry had a relatively higher increase. The
+increase of NPLs in wholesale and retail was mainly caused by growing loan default of some wholesale and retail enterprises
+as a result of non-substantial improvement seen in the supply and demand structure of the trade market, the continued
+downward trend of goods circulation, import and export trades, year-by-year decrease of the total retail sales of consumer
+goods, and the impact of E-commerce platforms on the traditional retail industry. Increase in NPLs of the manufacturing
+industry was largely attributable to loan default of some manufacturing enterprises encountering difficulties in operation and
+lack of funding caused by over-supply in the industry and the lack of efficient market demand.
+Discussion and Analysis
+53
+Annual Report 2016
+1.88
+129,595
+100.0
+6,901,088
+In RMB millions, except for percentages
+1.8
+124,542
+0.55
+6.2
+427,306
+2.19
+9,367
+426,999
+Real estate
+0.06
+278
+6.7
+6,293
+461,542
+1,302
+7.5
+517,542
+management
+and public utility
+Water, environment
+6.60
+48,522
+Reversal of impairment allowances
+0.25
+1.47
+Mining
+225,505
+675
+1.8
+122,294
+culture and sanitation
+Science, education,
+1.45
+3,047
+3.0
+210,294
+2.25
+4,222
+2.7
+187,363
+Construction
+1.51
+3,722
+3.6
+246,541
+1.96
+4,425
+3.3
+Loan
+(%)
+6.2
+(%)
+0.60
+7,939
+10.2
+1,327,321
+Overseas and others
+Total
+1.27
+8,518
+5.6
+668,572
+1,048,579
+1.64
+5.4
+706,472
+Northeastern China
+1.50
+32,472
+18.2
+2,171,273
+1.63
+37,623
+11,571
+8.8
+5,920
+0.56
+151,577
+NPLs
+2,172
+Total
+280,654
+229,155
+assessed
+Collectively
+Individually
+assessed
+51,499
+83,966
+110,992
+865
+Impairment allowances transferred
+Including: Impairment allowances charged
+Balance at the beginning of the year
+In RMB millions
+CHANGES IN ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+1.50
+179,518
+100.0
+11,933,466
+1.62
+211,801
+100.0
+13,056,846
+17.7
+2,313,507
+Charge for the year
+1.42
+1,743,572
+Pearl River Delta
+1.72
+39,297
+19.1
+2,283,391
+1.47
+35,325
+18.4
+13.4
+2,409,725
+1.67
+9,053
+541,087
+2.37
+13,758
+4.5
+Head Office
+Western China
+581,084
+Yangtze River Delta
+35,913
+4.5
+1,545,400
+1,668,136
+2.06
+1.57
+28,575
+1,819,143
+23,707
+Central China
+1.52
+30,605
+16.8
+13.9
+1.91
+13.0
+29,946
+2,007,028
+1.94
+Bohai Rim
+14.0
+16.5
+2,156,022
+41,097
+1,356
+1,477
+Other intangible assets other than land use rights
+8,478
+9,001
+Goodwill
+11,665
+251,349
+11,560
+(21,640)
+3,164
+781,853
+940,237
+246,356
+178,040
+(5,799)
+4,340
+1,874,976
+that are not fair valued on the balance sheet
+Net tier 1 capital
+192
+419
+205,021
+Valid portion of minority interests
+79,375
+79,567
+79,794
+79,375
+Additional tier 1 capital instruments and related premium
+Additional tier 1 capital
+1,701,495
+Net core tier 1 capital
+5,700
+5,700
+Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+(3,869)
+(4,618)
+Cash flow hedge reserves that relate to the hedging of items
+151,963
+Discussion and Analysis
+356,407
+14.75%
+14.26%
+14.29%
+Capital adequacy ratio
+12.09%
+11.83%
+11.96%
+14.67%
+11.71%
+regulations:
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related
+15.32%
+15.22%
+14.61%
+1,954,770
+14.67%
+Core capital adequacy ratio
+Annual Report 2016
+65
+As at the end of 2016, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 12.87%, 13.42% and 14.61%, respectively,
+complying with regulatory requirements.
+356,407
+1,713,160
+1,886,536
+In RMB millions, except for percentages
+At 31 December
+2015
+2016
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+Valid portion of capital reserve
+Paid-in capital
+Core tier 1 capital
+Item
+At 31 December
+CAPITAL ADEQUACY RATIO
+151,998
+1,781,062
+2016
+178,292
+1,919,729
+31 December
+2015
+31 March
+2016
+2016
+2016
+30 June
+30 September
+1,847,634
+At
+At
+At
+In RMB millions, except for percentages
+1,954,770
+31 December
+At
+Item
+At
+1,854,320
+1,781,062
+Net tier 1 capital
+For details on relevant fundraising activities, please refer to "Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders - Details of Securities Issuance and Listing".
+Capital adequacy ratio
+The Bank proactively carried out external capital replenishment and constantly promoted the issuance of new capital
+instruments on the basis of achieving capital replenishment by retained profits. The Board of Directors of the Bank convened
+a meeting in March 2016 to review and approve the proposal on the new issuance of write-down eligible tier 2 capital
+instruments up to RMB88.0 billion equivalent by the end of 2017. The same resolution was proposed and passed in the
+Shareholders' General Meeting in June 2016. Please refer to the announcements published by the Bank on the websites of
+SEHK and SSE.
+Capital Financing Management
+Note: Please refer to "Unaudited Supplementary Financial Information" for details on disclosed leverage ratio information.
+7.48%
+7.54%
+23,813,992
+24,599,374
+25,309,554
+7.30%
+7.57%
+7.55%
+Leverage ratio
+25,357,448
+25,904,533
+off-balance sheet assets
+Balance of adjusted on- and
+LEVERAGE RATIO
+Tier 2 capital
+At the end of 2016, the leverage ratio which was calculated according to the Administrative Measures for Leverage Ratio of
+Commercial Banks (Revised) promulgated by CBRC in 2015 was 7.55%, a slight increase of 0.07 percentage point from the
+end of the previous year, meeting the regulatory requirement.
+Discussion and Analysis
+5,600
+by financial institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital instruments issued
+13,600
+5,600
+Tier 2 capital deductions
+1,001
+13,600
+4,236
+63,398
+19,195
+Surplus provision for loan impairment
+180,242
+154,861
+Valid portion of tier 2 capital instruments and related premium
+244,641
+Valid portion of minority interests
+Net capital base
+2,127,462
+2,012,103
+ICBC
+66
+Refers to risk-weighted assets after capital floor and adjustments.
+(2)
+Notes: (1) Please refer to "Note 54.(d) to the Financial Statements: Capital management".
+15.22%
+14.61%
+13.48%
+13.42%
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+12.87%
+12.87%
+Core tier 1 capital adequacy ratio
+13,216,687
+14,564,617
+Risk-weighted assets (2)
+Please refer to the 2016 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+13.53%
+Liquidity coverage ratio at the end of each month in the fourth quarter of 2016 attained an average of 139.75%, 6.61
+percentage points higher than the previous quarter. This was because high-quality liquid assets (HQLA) maintained rapid
+growth, medium-term and short-term asset reserves were moderately increased and fund inflow due less than one month
+also climbed up. HQLA cover cash, available central bank reserve under stress and primary and secondary bond assets
+that can be included in the liquidity coverage ratio under the regulatory requirements. For the quantitative information
+for liquidity coverage ratio based on the Administrative Measures for Liquidity Coverage Ratio of Commercial Banks
+promulgated by CBRC, please refer to "Unaudited Supplementary Financial Information".
+13.49%
+◆ Stress Test
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+Liquidity Risk Management Mode
+Formulated taking into account the liquidity risk appetite, the liquidity risk management strategy, policy and procedure cover
+all businesses on and off the balance sheet, all domestic and overseas business departments and branches that are likely to
+deliver a material impact on the liquidity risk, and contain the liquidity risk management under normal and stress scenarios.
+The liquidity risk management strategy specifies the overall objective and management mode of liquidity risk management
+and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk management are
+formulated in accordance with external and macro operating environments and business development of the Bank, with a
+view to striking an effective balance among security, liquidity and profitability.
+Objective of liquidity risk management: By establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity
+risk at the Group level, the Bank, the branches and the business lines, and ensuring the liquidity demand is satisfied at a
+reasonable cost in time under the normal business scenario and the stress scenario.
+Objective, Strategy and Important Policy of Liquidity Risk Management
+Discussion and Analysis
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress test on
+liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress tests on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress tests at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+59
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department; and the execution system comprising the Asset and Liability
+Management Department, leading management departments of on and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs corresponding decision making, supervision and execution functions according to division of
+responsibilities.
+The Bank's liquidity risk management system conforms to the overall development strategy and the entire risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control procedures for liquidity risk and a complete management information system.
+Liquidity Risk Management System and Governance Structure
+In 2016, the Bank constantly improved its liquidity risk management system following changes in the macroeconomic
+environment and financial regulatory requirements, and upgraded liquidity risk management mechanism, thus effectively
+enhancing the liquidity risk management quality of the Group. The Bank continued to implement steady and prudent
+liquidity management, kept a close eye on impact arising from internal and external factors on the Bank's liquidity, and
+better and timely arranged the Group's consolidated management strategy in line with liquidity risk characteristics of items
+on and off balance sheet, in both domestic and overseas institutions, and in local and foreign currencies. The Bank furthered
+the overall management of the Group's assets and liabilities, highlighting market liberalization, and optimized the limit
+management plan of overseas institutions. It strengthened the management of overseas debt capital market instruments
+and improved financing capacity. The Bank actively implemented relevant regulatory requirements concerning the degree of
+dependence on the Group's debts and strengthened the management of fund transactions within the Group.
+Liquidity Risk Management
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, perform other payment obligations and satisfy other funding demands of normal business development.
+Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of loans by
+customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization, operating
+losses, derivatives trading risk and risk associated with its affiliates.
+Liquidity Risk
+Annual Report 2016
+Please refer to "Note 54. (c)(iii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+Liquidity Risk Analysis
+In respect of foreign currencies, the Bank closely observed the changes in external markets and funds, adjusted foreign
+currency liquidity management strategy and internal and external fund prices in a flexible manner and maintained the
+coordinated development of foreign currency assets and liabilities business while ensuring a safe liquidity level.
+(9,385,821)
+At 31 December 2015
+At 31 December 2016 (10,391,326)
+1 to 3 3 months to
+months
+1 year
+Less than
+1 month
+demand
+on
+In 2016, the Bank paid close attention to changes in the macroeconomic and monetary policy, dynamically adjusted its
+RMB fund operation strategy in accordance with the Bank's assets and liabilities development and fund management
+characteristics in different periods, and took various measures to ensure a safe and stable liquidity level. The Bank further
+consolidated the deposit business, optimized deposit structure, and promoted the steady and balanced growth of each
+type of deposits, which effectively enhanced the stability of liabilities. It also intensified the efforts in treasury business
+term structure management, taking funds liquidity, security and profitability into consideration. In addition, the Bank
+strengthened the development of its liquidity risk management mechanism and managed liquidity on and off balance sheet
+and of domestic and overseas institutions in a coordinated way, which further raised funds operation and liquidity risk
+prevention and control capability of the Group.
+Overdue/
+repayable
+LIQUIDITY EXPOSURE ANALYSIS
+The Bank also assessed the liquidity risk status by using liquidity exposure analysis. As at the end of 2016, the positive
+liquidity exposure for the less than 1 month category decreased, which was mainly due to the decrease of due from and
+placements with banks and other financial institutions and the increase of due to and placements from banks and other
+financial institutions with corresponding term. The liquidity exposure for the 3 months to 1 year category turned from
+positive to negative, mainly due to the decrease in investments in bonds with corresponding term, and loans and advances
+to customers as well as the increase in customer deposits. The positive liquidity exposure for the 1 to 5 years and over 5
+years categories edged, which was mainly due to increase in investments in bonds with corresponding term and loans and
+advances to customers. Deposits maintained steady growth with a high deposition rate, and at the same time the Bank
+made major investment in central bank bills, treasury bonds and other high-liquidity assets, and possessed sufficient liquidity
+reserves. Therefore, the overall liquidity of the Bank maintained at a safe level.
+Discussion and Analysis
+ICBC
+60
+_
+The deposit and loan businesses of the Bank maintained coordinating development, and liquidity risk management ability
+was further strengthened. As at the end of 2016, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were
+35.7% and 82.3%, respectively, meeting the regulatory requirements. Loan-to-deposit ratio was 70.9%. Please refer to
+"Discussion and Analysis - Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+In RMB millions
+23,629
+153,434
+24,019
+In RMB (USD) millions
+Discussion and Analysis
+FOREIGN EXCHANGE EXPOSURE
+_
+ICBC
+68
++ Focus on the origin of real economy and enhance the quality and level of financial services. In connection
+with the "13th Five-Year Plan", the Bank will actively support the implementation of major national strategies such as
+the "four regions" and the "three supporting belts" and key construction projects, and enhance the cooperation with
+green industries, strategic emerging industries, modern service industry and the internet sector, with the optimization
+of asset allocation structure; by focusing on major arrangements including the five tasks of "cutting overcapacity,
+destocking, deleveraging, reducing costs and identifying growth areas" and the mixed ownership reform. The Bank
+will rely on the cross-market and integrated operating platforms to provide enterprises with more flexible and diverse
+financial service options. Besides, it will exert the advantages in global integrated services and the linkage function at
+home and aboard, serve the "Going Global" drive of enterprises by closely following the construction of "Belt and
+Road" initiative, and expand the cooperation on international production capacity and equipment manufacturing.
+At 31 December 2016
+2017 is a critical year for China's implementation of the "13th Five-Year Plan" and the final year of the Bank's fourth
+Three-Year Plan. The Bank will, based on the changes in external environment, adhere to strategic heritage, transformation
+and innovation, and focus on stabilization of quality, adjustment of structure and pursuit of innovation, to ensure that
+enhancement of quality and efficiency can be achieved in a sustainable manner.
+In 2017, global economy will maintain the overall trend of downturn, weakness, differentiation and turbulence. China's
+economy will improve steadily at a slower pace. Driven by economic restructuring and upgrading as well as replacement of
+old drivers of growth with new ones, the quality and efficiency of economic development is expected to improve steadily.
+The Bank will embrace the following opportunities. First, the supply-side structural reform will stimulate the endogenous
+driving force for China's economic growth, unleash market vitality and innovative power, and play a stronger role in
+boosting economic development, thus creating a healthier, more efficient and more sustainable operating environment
+for the banking sector. Second, the new urbanization, made in China 2025, consumption upgrade, "Internet plus" and
+other major strategic projects will be deployed and implemented in an all-around manner, which will generate a huge
+demand for financial services in different areas such as people's livelihood, new energy, new technology, Internet of things,
+energy saving and environmental protection, culture and tourism, hence providing certain room for banks' credit layout
+and business transformation. Third, the implementation of the government's cross-regional systematic projects including
+the "Belt and Road" initiative, coordinated development of Beijing-Tianjin-Hebei region and Yangtze River Economic
+Zone will produce a large number of high-quality investment opportunities, and create sizable demands for cross-regional
+interconnected financial services, which will provide favorable business development opportunities for the banking sector.
+Fourth, the new wave of technological revolution in the economic and financial fields has offered an opportunity for banks
+to build online business channels, innovate the internet-based financial services and establish new business relationships with
+customers, thus the consequent individualization and diversification of customer demand will bring enormous potentials for
+financial innovation.
+OUTLOOK
+Discussion and Analysis
+67
+Annual Report 2016
+In 2016, the Bank further improved its economic capital management in terms of measurement, allocation and assessment,
+intensified the capital constraint mechanism, and strictly implemented the measures for quota management to enhance the
+capital management efficiency and vigorously pushed forward operational management and business front-line application
+of economic capital. The Bank constantly carried out the optimization of economic capital, collated and analyzed the
+high occupation of capital, inefficient utilization of capital and waste of capital in all products, prepared the schemes for
+optimization and enhancement, promoted and explored the capital-intensive development mode. The Bank further improved
+its economic capital measurement policy and optimized its economic capital measurement standards and system. Moreover,
+the Bank upgraded the economic capital measurement and appraisal policy of credit business and proactively facilitated the
+adjustment of its credit structure.
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc.
+The Bank will also face the following major challenges: First, potential financial risks will increase, with frequent occurrence
+and intertwined evolution of primary, imported and cross-cutting risks, thus further testing banks' capabilities in risk
+prevention and control and quality management. Second, the tightening capital constraints will not only impose pressure
+on business development cost of banks, but also put forward higher requirements for building a capital intensive business
+model. Third, the reform of interest rate liberalization will enter into a deepening period with the establishment of a market-
+oriented interest rate formation and control mechanism, narrowing banks' interest spread. In response, banks must further
+promote the optimization and adjustment of business structure, and speed up the construction of a new profit growth
+pattern with a variety of supporting points and different sources of driving forces. Fourth, the development of FinTech will
+change the traditional competitive landscape of banks, and promote banks to optimize operational quality and pattern and
+rebuild their service models.
+At 31 December 2015
+USD
+Item
+(5,593)
+(36,322)
+(25,535)
+(177,415)
+166,889
+Total foreign exchange exposure, net
+exchange items, net
+Exposure of off-balance sheet foreign
+29,222
+189,756
+49,554
+344,304
+exchange items, net
+Exposure of on-balance sheet foreign
+USD
+equivalent
+RMB
+equivalent
+RMB
+43,004
+322,595
+(490,413)
+(378,127)
+1 to 5
+years
+3,363,860
+Net core tier 1 capital
+Calculated in accordance with the Capital Regulation:
+Parent
+Company
+Group
+Parent
+Company
+At 31 December 2016
+Group
+1,874,976
+Item
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+The Bank calculated its capital adequacy ratios in accordance with the Capital Regulation. According to the scope of
+implementing the advanced capital management approaches as approved by CBRC, the foundation internal ratings-based
+(IRB) approach was adopted for corporate credit risk, the IRB approach for retail credit risk, the internal model approach
+(IMA) for market risk, and the standardized approach for operational risk meeting regulatory requirements. The weighted
+approach was adopted for credit risk uncovered by the IRB approach and the standardized approach for market risk
+uncovered by the IMA approach.
+Capital Adequacy Ratio and Leverage Ratio
+In 2016, the Bank reformed and improved capital management by further streamlining the capital management system
+and mechanism. It strove to promote the optimization of bank-wide capital utilization, intensified the rigid constraint of
+economic capital on risk-weighted assets across the Bank and continued to elevate the capital use efficiency and return on
+capital. The Bank attached importance to the supplementation of endogenous capital and further consolidated the bank-
+wide capital base to reinforce its capacity in supporting the real economy development. Moreover, the Bank coordinated,
+allocated and utilized various capital resources to satisfy capital supplement requirements of subsidiaries. In 2016, all capital
+indicators performed well, of which capital adequacy ratio was kept at a sound level, fully showing its good reputation of
+strong capital base and prudent and sustainable operation.
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly consolidating and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channels, raising capital quality and optimizing capital structure. The Bank's capital management
+covers various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management, capital investment and financing management.
+Discussion and Analysis
+CAPITAL MANAGEMENT
+In RMB millions, except for percentages
+At 31 December 2015
+1,723,839
+1,701,495
+1,571,403
+13.42%
+Tier 1 capital adequacy ratio
+12.88%
+12.87%
+12.90%
+12.87%
+Core tier 1 capital adequacy ratio
+1,869,237
+2,012,103
+1,960,840
+2,127,462
+Net capital base
+1,650,778
+1,781,062
+1,803,214
+1,954,770
+Net tier 1 capital
+ICBC
+13.48%
+64
+The Bank strictly observes the Guidelines on the Management of Country Risk by Banking Financial Institutions and other
+regulatory requirements of CBRC. The Board of Directors assumes the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible for executing the country risk management policies approved by
+the Board of Directors. The Risk Management Committee of the Head Office is responsible for reviewing matters regarding
+country risk management. The Bank manages and controls country risk through a series of management tools, including
+country risk assessment and rating, country risk limits for the entire group and continuous statistics, analysis and monitoring
+of country risk exposure, as well as country risk assessment using stress tests. The Bank reviews the country risk rating and
+limits at least once every year.
+The Bank strictly followed the requirements of the Guidance to the Operational Risk Management of Commercial Banks
+issued by CBRC. The Bank adopted the operational risk control mode of "integrated management, classified control". The
+Board of Directors assumes relevant responsibility for the effectiveness of the operational risk management according to the
+Articles of Association, and the Senior Management is responsible for implementing the strategy, overall policy and system
+for operational risk management approved by the Board of Directors. The Operational Risk Management Committee under
+the Senior Management, as the organizer and coordinator of operational risk management of the Bank, is responsible for
+reviewing and approving significant matters related to operational risk management according to the Working Regulations
+for the Operational Risk Management Committee. Marketing and product departments at all levels form the first line of
+defense of operational risk management, which assume direct responsibility for operational risk management in each
+business line. Internal control and compliance departments at various levels are comprehensive management departments for
+operational risk in institutions at various levels and assume the duty of operating the second line of defense of operational
+risk management, which are responsible for the overall management of operational risks of institutions at various levels
+and for the arrangement and organization for the establishment and implementation of operational risk management
+system at each level; discipline enforcement, security, human resources, IT, finance and accounting, legal affairs, operation
+management, credit management and risk management departments at all levels are classification control departments
+for operational risk in institutions at various levels, which are responsible for management and control on specific types
+of operational risk. These departments, together with comprehensive management departments, form the second line
+of defense of operational risk management. The internal audit departments at all levels are responsible for auditing and
+evaluating the operation of the operational risk management system, and form the third line of defense.
+Discussion and Analysis
+61
+Annual Report 2016
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution and delivery and process management constitute major sources of
+operational risk losses of the Bank.
+Operational Risk Management
+Operational Risk
+In 2016, in accordance with latest regulatory requirements for banks concerning operational risk and the trends of
+operational risk, the Bank effectively conducted the refined and scientific management of operational risk, and further
+enhanced the operational risk management of the Group. The Bank rolled out the special risk governance campaign
+regarding ten key areas and links orderly starting from institution, process, system, mechanism, and employee management.
+It strengthened the IT risk control and external fraud risk management, launched the Group's anti-fraud platform to
+have full-process control covering ex-ante warning, in-process intervention and post-event monitoring, and enhanced
+the capability to withstand external risk. The Bank also took the initiative to focus on and effectively reveal business risk,
+strengthening risk control in credit, bills, interbank business and other areas. Annual case-based risk investigation was
+carried out to improve the case prevention mechanism. The Bank improved the regulations on managing the use of labor
+and abnormal employee behaviors, and optimized the management procedure for business outsourcing. It upgraded the
+operational risk loss event management system, and continued to enhance the application of operational risk management
+instruments and control over data quality. It applied the operational risk limit management, monitored key operational
+risk indicators, and completed the self-assessment of operational risk and control. In addition, the Bank strengthened the
+management and control over operational risk of overseas institutions and subsidiaries, and pushed forward the function
+extension and application of the operational risk measurement system. During the reporting period, the operational risk
+management system of the Bank operated smoothly and the operational risk was controllable on the whole.
+Note: Please refer to "Note 54. (b) to the Financial Statements: Liquidity Risk".
+Total
+1,981,163
+Undated
+3,334,636
+3,044,624
+years
+6,499,529
+5,136,733
+3,197,027
+26,247
+(540,886)
+Over 5
+1,800,519
+Legal Risk
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arises out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions and requirements of other relevant rules during the Bank's operation; the
+unfavorable legal defects that exist in products, services or information provided to clients, transactions engaged in, and
+contracts, agreements or other documents executed by the Bank; legal disputes (litigation or arbitration proceedings)
+between the Bank and its clients, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally and
+externally.
+62
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+Country Risk
+In 2016, the Bank continued to strengthen reputational risk management, proactively prevented reputational risk and
+enhanced the reputational risk management level and prevention ability across the Bank. According to the latest regulatory
+requirements, changes in external situation and the Bank's management practices, the Bank amended the measures
+for reputational risk management, improved the reputational risk management working mechanism, and launched the
+reputational risk management system. The Bank also carried out the identification, evaluation, monitoring, control,
+mitigation and assessment of reputational risk in an in-depth manner and strengthened the consolidated management of
+reputational risk. It conducted reputational risk assessment on new businesses and products, and investigated all potential
+reputational risk. It organized stress tests and emergency response drill on reputational risk and reinforced the prevention
+control and mitigation of reputational risk. It made active response to concerns from society and effectively communicated
+with the stakeholders and the public. During the reporting period, the Bank's reputational risk was controllable with no
+material reputational risk event occurred.
+As the highest decision-making body of the Bank's reputational risk management, the Board of Directors is responsible for
+formulating strategies and policies concerning reputational risk management that are in line with the strategic objective of
+the Bank. The Senior Management is responsible for implementing such strategies and policies established by the Board
+of Directors and leading reputational risk management of the Bank. The Bank has established a special reputational risk
+management team to take charge of the daily management of reputational risk.
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the objective and planning for reputational risk management, including
+the establishment and improvement of the reputational risk management system through the identification, assessment,
+monitoring and handling of reputational risk factors and reputational events. The Bank adheres to the prevention oriented
+principle and incorporates reputational risk management into each aspect of operational management of the Bank and
+every customer service process, with a view to controlling and mitigating reputational risk at its source and minimizing the
+possibility of occurrence of and influence from reputational events.
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+Reputational Risk
+Discussion and Analysis
+63
+Annual Report 2016
+Adhering to the anti-money laundering management model of "centralized, specialized and systematic management", the
+Bank constantly pushed forward anti-money laundering processing to be more intensive and professional. It deepened the
+construction of an Anti-money Laundering Center at the Head Office level, adjusted the anti-money laundering management
+organization structure and enhanced the allocation of anti-money laundering resources. Special attention was given to
+strengthening the anti-money laundering management of overseas institutions, optimizing their anti-money laundering
+information system, and simultaneously enriching the reserves of anti-money laundering personnel in overseas institutions,
+hence comprehensively enhancing the IT application, specialization and delicacy management of the Group's anti-money
+laundering work. The Bank focused on conducting customer identification and due diligence, and continued to improve
+the quality and efficiency of suspicious transaction reporting. It stepped up efforts in assessing money-laundering risk of
+products and customers, strengthened money laundering risk prevention and control concerning key business areas. Taking
+the opportunity of the tenth anniversary of the implementation of the Anti-Money Laundering Law of the People's Republic
+of China, the Bank launched extensive anti-money laundering publicity, strengthened the cultivation and qualification
+certification of anti-money laundering talents, and improved the compliance awareness, professional competence and
+performance capability of anti-money laundering personnel. The Bank was ranked top in the 2016 comprehensive evaluation
+of anti-money laundering conducted by PBC.
+In strict compliance with applicable laws and regulations concerning anti-money laundering, the Bank sincerely implemented
+the "risk-based" regulatory requirements in respect of anti-money laundering, steadily fulfilled the legal obligations and
+social duties concerning anti-money laundering, and kept enhancing the Group's management level regarding anti-money
+laundering and anti-terrorist financing.
+Anti-Money Laundering
+In 2016, the Bank continued to strengthen legal risk management, by improving the risk prevention and control capacity
+in legal risk management, ensuring the legal and compliant operation, healthy business development and overall business
+stability of the Group. The Bank improved both the vertical linkage and horizontal coordination mechanism between the
+Head Office and branches. By embedding legal risk prevention and control into business negotiations, product design,
+contract signing and other links, the Bank prevented legal risk in advance and made the legal risk prevention and control
+more prospective, initiative and targeted. The Bank further improved the cross-border coordination and management
+for legal work and strengthened the legal risk management of overseas institutions, actively responding to cross-border
+legal issues emerging in the development of international operations. It applied multiple legal means to improve debt
+efficiency. Moreover, the Bank pragmatically strengthened the risk management and control of lawsuit-related risks, thereby
+preventing and mitigating lawsuit-related risks and losses. It assisted with the online judicial inquiry and enforcement, which
+highly improved the efficiency of inquiries and enforcements. The Bank further standardized contract text management
+and reinforced authorization management, related party management, trademark management and intellectual property
+protection.
+Based on the objective to ensure legal and compliant operation, the Bank always attaches great importance to establishing
+a sound legal risk management system, forming a full-process legal risk prevention and control mechanism to support
+and secure business innovation and market competition, and to prevent and eliminate various potential or practical legal
+risks. The Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk
+management, and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for
+executing the strategy and policy relating to legal risk management, examining and approving relevant important affairs. The
+Legal Affairs Department of the Head Office is in charge of legal risk management across the Group, with relevant business
+departments providing related support and assistance on legal risk prevention and control. The affiliates, domestic and
+overseas branches undertakes the responsibility of legal risk management of their respective institutions.
+Discussion and Analysis
+ICBC
+In 2016, the Bank strictly abode by regulatory requirements and, with consideration of its business development needs,
+continued to strengthen country risk management. The Bank continuously improved country risk management policies, and
+optimized the management process, closely observed changes in country risk exposures, constantly tracked, monitored and
+reported country risk, and timely updated and adjusted the country risk rating and limits. It further strengthened forward-
+looking early warning mechanism for country risk, proactively conducted stress testing on country risk and effectively
+controlled country risk while pushing ahead with the internationalization strategy.
+Allocation and Management of Economic Capital
+A share
+Discussion and Analysis
+33.11
+35.00
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2016, MOF held 123,316,451,864 shares in the Bank.
+(2) According to the register of shareholders of the Bank as at 31 December 2016, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+HOLDERS OF H SHARES
+Number of
+Name of substantial
+shareholder
+Temasek Holdings
+(Private) Limited
+Capacity
+H shares held
+(share)
+Nature of
+interests
+Percentage of
+H shares (%)
+Percentage of
+total ordinary
+shares (%)
+Percentage of
+total ordinary
+shares (%)
+8,682,954,081
+National Council for
+Social Security Fund
+BlackRock, Inc.
+controlled
+corporations
+Beneficial owner
+Long
+position
+10.00
+2.44
+8,663,703,234
+Long
+position
+9.98
+2.43
+Interest of
+controlled
+5,152,636,652
+Interest of
+46.26
+Long
+position
+124,731,774,651
+On 4 November 2016, Huijin and CICC entered into a share transfer agreement. According to the agreement, CICC would carry
+out a rights issue to Huijin in order to purchase all the shares of China Investment Securities. As at the end of 2016, relevant
+procedures were being handled. After the completion of the above-mentioned transaction, Huijin will hold a 58.58% stake
+directly in CICC and China Investment Securities will be wholly owned by CICC.
+(3) China Securities exercised an over-allotment option on 30 December 2016 and the share transfer was wrapped up on 5 January
+2017. Afterwards, the direct holding of Huijin in China Securities was changed to 32.93%.
+(4) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+The second single largest shareholder of the Bank is MOF, which held approximately 34.60% shares of the Bank as at 31
+December 2016. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the financial and taxation policies, and supervising State finance at a macro level.
+76
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+◆ Particulars of Other Corporate Shareholders Holding 10% Shares or More (Excluding HKSCC Nominees
+Limited)
+None.
+◆ Particulars of the De Facto Controller
+None.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong
+Kong
+As at 31 December 2016, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's shares and underlying shares, which were recorded in the register pursuant to Section 336 of the Securities
+and Futures Ordinance of Hong Kong as follows:
+Interests or short positions of ordinary shares of the Bank:
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+MOF(1)
+China Securities Finance Co., Ltd.
+Number of A
+shares held
+(share)
+Nature of
+interests
+Percentage of A
+shares (%)
+118,006,174,032
+State-owned
+legal person
+Long
+position
+43.77
+Huijin (2)
+Beneficial owner
+Long
+position
+5.94
+1.45
+corporations
+84602
+6%
+RMB12,000,000,000
+RMB100
+120,000,000
+The Bank privately issued 450 million preference shares in domestic market on 18 November 2015 upon the approval by
+CBRC pursuant to Yin Jian Fu [2015] No. 189 and by CSRC pursuant to Zheng Jian Xu Ke [2015] No. 1023. Each domestic
+preference share had a nominal value of RMB100 and was issued at nominal value. The coupon rate, as determined by
+benchmark rate plus a fixed spread, shall remain unchanged for the first 5 years commencing from the issuance date.
+Subsequently, the benchmark rate shall be readjusted once every 5 years during which the coupon rate shall remain
+unchanged. The coupon rate for the Domestic Preference Shares is determined at 4.50% through price discovery. Upon
+approval by SSE pursuant to Shang Zheng Han [2015] No. 2391, the domestic preference shares were listed on the
+integrated trading platform of SSE for transfer as of 11 December 2015 (stock name: ICBC Preference Share 1, stock code:
+360011). Total proceeds from the issuance amounted to RMB45.0 billion, net proceeds from the issuance amounted to
+around RMB44.95 billion. All proceeds after deduction of the expenses relating to the issuance will be used to replenish
+additional tier 1 capital.
+For particulars of the Bank's issue of domestic and offshore preference shares, please refer to the announcements of the
+Bank on the websites of SSE, SEHK and the Bank.
+Changes in Preference Shares
+As at the end of the reporting period, the Bank had 28 preference shareholders (or proxies), including two offshore
+preference shareholders (or proxies) and 26 domestic preference shareholders. As at the end of the month immediate before
+the release day of the Annual Report (28 February 2017), the Bank had 28 preference shareholders (or proxies), including
+two offshore preference shareholders (or proxies) and 26 domestic preference shareholders.
+78
+ICBC
+156,136,404
+None
+464,460,581
+0.13
+A share
+-7,832,417
+Unknown
+86,051,725,196
+Foreign legal
+person
+24.14
+H share
+HKSCC Nominees Limited/
+Hong Kong Securities
+Clearing Company Limited (3)
+None
+123,316,451,864
+34.60
+State-owned A share
+shares
+(2)
+RMB preference
+EUR15
+Annual Report 2016
+77
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Preference Shares
+◆ Issuance and Listing of Preference Shares in Latest Three Years
+Upon approval by CBRC pursuant to Yin Jian Fu [2014] No. 801 and by CSRC pursuant to Zheng Jian Xu Ke [2014] No.
+1229, the Bank privately offered non-cumulative, non-participating and perpetual offshore preference shares in U.S. dollar,
+Euro and Renminbi on 10 December 2014 (please see the table below for details). The offshore preference shares issued by
+the Bank were listed on SEHK on 11 December 2014. Each offshore preference share had a nominal value of RMB100. The
+USD offshore preference shares, EUR offshore preference shares and RMB offshore preference shares were fully paid and
+issued in U.S. dollar, Euro and Renminbi. The offshore preference shares had no maturity. They had no less than six qualified
+placees. They were offered to professional investors only rather than retail investors and transferred privately in the OTC
+market only.
+In accordance with the reference price of RMB exchange rate on 10 December 2014 published by the China Foreign
+Exchange Trade System, total proceeds from the issuance of offshore preference shares amounted to approximately
+RMB34.55 billion. After deduction of commissions and offering expenses, net proceeds from the issuance amounted to
+around RMB34.43 billion. All proceeds, after deduction of the expenses relating to the issuance will be used to replenish
+additional tier 1 capital and increase capital adequacy ratio.
+Type of offshore
+preference share
+Dividend
+Full amount of
+proceeds per
+Stock code
+rate
+Total amount
+share
+Number of
+issued shares
+USD preference
+shares
+4603
+6%
+USD2,940,000,000
+USD20
+147,000,000
+EUR preference
+shares
+4604
+6%
+EUR600,000,000
+40,000,000
+MOF
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+Guotai Junan Investment Management Co., Ltd.
+Limited
+Traditional
+- Ordinary insurance
+products
+005L-CT001 Hu Other entities A share
+0.09
+317,038,927
+None
+100
+Guotai Junan
+Investment Management
+State-owned
+China Life Insurance Company
+Co., Ltd.
+A share
+0.07
+247,694,769
+None
+-2,091,100
+Notes: (1)
+Particulars of shareholding of H shareholders were based on the number of shares set out in the Bank's register of shareholders
+maintained at the H share registrar.
+(2)
+The Bank had no shares subject to restrictions on sales.
+(3) HKSCC Nominees Limited held 86,051,725,196 H shares and Hong Kong Securities Clearing Company Limited held 464,460,581
+A shares.
+(4) Central Huijin Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware
+of any connected relations or concert party action among the afore-mentioned shareholders.
+Particulars of Substantial Shareholders
+legal person
+None
+390,487,231
+0.11
+1.28
+4,562,235,995
+None
+187,975,909
+Ping An Life Insurance Company
+of China, Ltd. Traditional
+-Ordinary insurance products Other entities A share
+Sycamore Investment Platform
+1.21
+4,322,828,137
+None
+State-owned
+Co., Ltd.
+legal person
+A share
+0.40
+1,420,781,042
+None
+Central Huijin Asset Management State-owned
+Co., Ltd. (4)
+legal person
+A share
+0.28
+1,013,921,700
+None
+Anbang Life Insurance Co., Ltd.
+- Conservative investment
+portfolio
+Other entities A share
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Annual Report 2016
+75
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+China Reinsurance (Group) Corporation (H)
+71.56
+10
+New China Life Insurance Company Limited (A; H)
+31.34
+11
+China Jianyin Investment Limited
+100.00
+12
+China Galaxy Financial Holdings Company Limited
+78.57
+13
+Shenwan Hongyuan Group Co., Ltd. (A)
+25.03
+14
+China International Capital Corporation Limited (H)
+28.45
+15
+China Securities Co., Ltd. (H)
+33.29
+16
+China Investment Securities Co., Ltd.
+100.00
+17
+Jiantou CITIC Asset Management Co., Ltd.
+70.00
+18
+9
+14.54
+73.63
+8
+◆ Controlling shareholders
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing, its unified social credit code is 911000007109329615, and its legal representative is Ding Xuedong. Huijin
+is a wholly-owned subsidiary of China Investment Corporation. It, in accordance with authorization by the State Council,
+makes equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution,
+exercise the rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to
+achieve the goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other
+business activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions
+it controls.
+As at 31 December 2016, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+No.
+1
+2
+Company name
+China Development Bank Corporation
+Industrial and Commercial Bank of China Limited (A; H)
+Huijin's shareholding
+percentage (%)
+34.68
+34.71
+3
+Agricultural Bank of China Limited (A; H)
+40.03
+4
+Bank of China Limited (A; H)
+64.02
+5
+China Construction Bank Corporation (A; H)
+57.11
+6
+China Everbright Group Ltd.
+55.67
+7
+China Everbright Bank Company Limited (A; H)
+21.96
+China Export & Credit Insurance Corporation
+None
+Capacity
+Beneficial owner
+the reporting
+1,192,434
+1,649,713
+Underwritten transactions in debt and equity markets
+11,507,109
+14,061,641
+345,214,765
+374,432,043
+Payments settled via payment systems or correspondent banks
+Assets under custody
+2,338,163
+2,719,376
+Securities and other financing instruments issued
+2,368,335
+2,131,194
+Intra-financial system liabilities
+1,453,661
+1,602,223
+Intra-financial system assets
+25,904,533
+Balance of adjusted on- and off-balance sheet assets
+2016
+Indicator
+23,813,992
+2015
+In RMB millions
+Global Systemically Importance Assessment Indicators of Commercial Banks
+The Bank did not issue any corporate bonds that were offered at the stock exchanges.
+Corporate Bonds
+Notional amount of over-the-counter (OTC) derivatives
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2016 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+4,970,872
+Trading and available-for-sale securities
+Social Responsibility
+71
+Annual Report 2016
+Through educating the public about financial knowledge, managing the pricing of services, and protecting customers'
+rights, the Bank actively built a long-standing and stable mechanism for consumer protection. It complied with laws and
+regulations, enhanced self-discipline in the Bank, proactively participated in the building and refinement of a society of
+integrity and punishment against dishonesty. The Bank increased public's awareness of AML-related crimes, and practically
+safeguarded financial security.
+Building up an Honorable Bank with Internal and External Safeguard
+The Bank stayed committed to green finance. Upholding the principle of controllable risk and business sustainability, it
+proactively promoted green, recycling and low-carbon development, made green finance a key topic of B20 summit and
+promoted green finance development. Besides, it continued to launch new products and services on internet banking,
+mobile banking and telephone banking at a faster pace and advance information-based construction to innovate emission
+reduction and beautify the homeland environment with concrete acts.
+Being Environment-friendly, Building up a Green Bank
+The Bank accelerated to promote the building of a "bank of customer satisfaction", innovated in services. It focused
+on improvements in the customer experience regarding onsite service, multi-channel service and the meeting of service
+demands to comprehensively lift service quality and innovate the forms and contents of financial services. It actively
+implemented the "Belt and Road" initiative, refined the strategic layout of overseas business, and sharpened its ability and
+competitiveness in delivering global financial services.
+Making Contributions to the Society, Building up a Brand Bank
+To meet the diversified needs for financial services amid the supply-side structural reform and the shift of impetus for
+economic growth, the Bank channeled credit to where it was needed, strictly controlled asset quality, accelerated financial
+innovation and improved service efficiency. It supported the development of the real economy, pushed ahead with industry
+restructuring and facilitated a more balanced regional structure. It stepped up efforts to support small and micro enterprises
+and agriculture, rural areas and farmers, contributed to improving people's livelihood, and endeavored to realize inclusive
+finance.
+Serving the Real Economy, Becoming Value Creator
+Taking the social responsibility objective of "Excellence for You Excellent services to clients, Maximum returns to
+shareholders, Real success for our people, Great contribution to society", the Bank is committed to serving the common
+interests of various stakeholders in economic and social development and promoting sustainable economic development and
+social progress. Thanks to these efforts, the Bank won wide recognition from various social sectors and such awards as the
+"Best Social Responsibility Financial Institution Award", the "Annual Poverty Alleviation Award", and "The 1st place in the
+List of Chinese State-owned Listed Companies on Corporate Social Responsibilities" and the "Most Responsible Enterprise".
+Social Responsibility
+ICBC
+70
+1,260,948
+1,577,428
+1,222,353
+1,489,643
+188,566
+period
+159,550
+Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+Level 3 assets
+475,562
+442,830
+4,049,645
+Managing with Love, Building a Harmonious Bank
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and those under IFRSS
+CBRC adjusted the loan-to-deposit ratio from a regulatory indicator to a monitoring indicator in 2015.
+currency
+RMB and foreign
+Loan-to-deposit ratio (%) (2)
+91.1
+98.1
+82.3
+>=25.0
+Poverty relief through education
+Foreign currency
+33.2
+35.5
+35.7
+>=25.0
+RMB
+Liquidity ratio (%)
+2014
+2015
+2016
+criteria
+Item
+Regulatory
+Major Regulatory Indicators
+OTHER INFORMATION DISCLOSED PURSUANT TO
+REGULATORY REQUIREMENTS
+Discussion and Analysis
+69
+Annual Report 2016
+Accelerate innovation and reform and build new advantages in competitive development. The Bank will
+actively promote a series of reforms such as the strategies of mega retail, mega asset management, big data and
+information technology as well as credit system, enhancement of competitiveness of key city branches and adjustment
+of personnel structure, and build a business operation system that will be conducive to the elevation of development
+quality and efficiency, improvement of resource allocation efficiency and stimulation of innovative vitality. With a focus
+on the integration of finance and technology, the Bank will deepen the development of internet-based finance and
+keep strengthening the Bank's three major platforms (i.e. ICBC Mall, ICBC Mobile and ICBC Link) and three product
+lines (i.e. internet payment, financing and investment & wealth management) to consolidate the Bank's leading
+position among its peers in the sector of internet-based finance. Besides, it will actively promote the application of
+FinTech in the business management, develop highly-integrated and customer-oriented information systems, and
+build a new service marketing model which integrates online and offline channels to push forward the business model
+reform and service upgrading on all fronts.
+70.9
+(3) Please refer to the section headed "Discussion and Analysis ― Risk Management" for liquidity coverage ratio indicator
+information.
+71.4
+Percentage of loans to single largest
+(2)
+Notes: (1) The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and
+accounting standards applicable to the current period. The comparative figures are not adjusted and restated.
+5.2
+10.5
+7.4
+37.4
+38.9
+36.8
+17.2
+29.6
+23.5
+2.7
+4.4
+3.4
+14.9
+13.3
+13.3
+4.8
+4.2
+4.5
+<=10.0
+Special mention
+Substandard
+Doubtful
+Pass
+Loan migration ratio (%)
+customers (%)
+Percentage of loans to top 10
+customer (%)
+68.4
+Enhance risk prevention and mitigation capability and consolidate the development foundation. The
+Bank will improve its risk monitoring and early warning system by relying on the big data technology, speed up the
+reduction of overdue and at-risk loans based on strict quality control for newly granted loans, intensify the collection
+and disposal of non-performing loans, and strengthen the risk control for agency investment, bond underwriting
+and bond investment, to reduce credit risk and prevent loan quality from deteriorating. It will also coordinate the
+management of operational risk, liquidity risk, cross-sector and cross-market risk and overseas compliance risk, to
+prevent cross-infection and superimposed resonance of various risks. In addition, the Bank will always keep a close
+eye on case prevention by fortifying the rectification in key areas and processes, strengthening internal control and
+building firm lines of defense.
+Committed to a "People-oriented" concept, the Bank strove to protect employee's legitimate rights and interests, improved
+career development paths for employees. It called on a committed performance culture with employees highly involved,
+deeply explored the building of "ICBC University", facilitated the common growth of employees and the Bank, and
+promoted the integration of diversified cultures. Besides, the Bank valued employee's health and safety. It offered health
+checks to employees on a regular basis, organized various recreational and sport activities, and promoted healthy lifestyles.
+The Bank strikes the balance between economic benefits and social benefits. In addition to creating value for shareholders,
+customers and employees, the Bank made continuous efforts to create a corporate culture that attaches great importance to
+public welfare and develop ICBC into a brand known for its humanitarian efforts. It led its staff to participate in charitable
+activities tailored to local needs, and take actions and perform social duties across the world.
+269,612,212,539
+100.00
+356,406,257,089
+Percentage
+(%)
+Number of shares
+At 31 December 2016
+Unit: Share
+Increase/decrease
+during the
+reporting period
+100.00
+356,406,257,089
+III. Total number of shares
+overseas
+75.65
+24.35
+2. Foreign shares listed
+ordinary shares
+75.65
+269,612,212,539
+RMB-denominated
+1.
+restrictions on sales
+100.00
+356,406,257,089
+Shares not subject to
+II.
+restrictions on sales
+86,794,044,550
+86,794,044,550
+24.35
+356,406,257,089
+pledged or
+locked-up shares
+shares held
+123,717,852,951
+34.71
+State-owned A share
+Huijin
+Total number of
+decrease of
+shares during
+Number of
+Shareholding
+percentage
+(%)
+Class of
+shares
+Nature of
+shareholder
+Name of shareholder
+Increase/
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK (The following data are
+based on the register of shareholders as at 31 December 2016)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+74
+As at the end of the reporting period, the Bank had a total number of 573,596 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 133,081 holders of H shares and 440,515 holders of A shares. As
+at the end of the month immediate before the release day of the Annual Report (28 February 2017), the Bank had a total
+number of 553,187 ordinary shareholders and no holders of preference shares with voting rights restored.
+Number of Shareholders and Particulars of Shareholding
+The Bank did not have any employee shares.
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 38. to the Financial
+Statements: Debt Securities Issued; Note 41. To the Financial Statements: Other Equity Instruments" for details.
+For details on the issuance of preference shares of the Bank, please refer to "Details of Changes in Share Capital and
+Shareholding of Substantial Shareholders- -Particulars of Preference Shares".
+The Bank did not conduct any rights issue or issue any convertible bonds during the reporting period.
+Details of Securities Issuance and Listing
+Note: "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the Content
+and Format of Information Disclosure of Companies with Public Offerings Content and Format of the Report of Change in
+Corporate Shareholding" (Revision 2007) of CSRC.
+100.00
+I. Shares subject to
+Advocating Public Undertakings, Building a Charitable Brand
+Percentage
+(%)
+At 31 December 2015
+Amount of donations
+The Group poverty relief donations apart from targeted poverty relief
+Including: Number of registered poor people
+Number of beneficiaries of targeted poverty relief
+Poverty relief through healthcare
+Poverty relief through industry development
+Amount of targeted poverty relief input
+Rural water conservancy facilities
+Rural education loan
+Upgrading of rural power network
+Including: Rural transport facilities
+Including: Loan of industry targeted poverty relief
+Loan of project targeted poverty relief
+Balance of loans
+Projects
+Finance-backed targeted poverty relief
+Social Responsibility
+ICBC
+◆ Poverty relief through healthcare. The Bank improved the medical services for local people and public
+hygence and reduced the cases of local residents falling below the poverty line or returning to poverty due to illnesses,
+by offering free medical assistance and providing medical and health facilities.
+◆ Poverty relief through education. The Bank enhanced local education levels and the self-development
+capability of local people by means of charitable donations, rewards to teachers, financial assistance to students and
+paired-up assistance.
+◆ Poverty relief through green industries. By supporting local governments and the public to explore ways
+of developing green and cyclic economy, the Bank led to the development of characteristic industries including green
+planting and breeding, forestry, traditional handicraft industry and village tourism, and combined ecological protection
+with increasing the income of local people.
+◆ Poverty relief through finance. The Bank supported local enterprises and infrastructure construction through
+credit funds, concessional loans, and agriculture-oriented credit products, and by improving the payment service and
+the credit system. It also developed inclusive finance and improved financial services to precisely meet the diverse
+financing needs of poor areas.
+◆ Mechanism for poverty relief. The Bank established a working group for poverty relief headed by Chairman
+Yi Huiman with several bank officials as deputy heads and 14 business departments as members. The group is
+responsible for coordinating and improving poverty alleviation work mechanism. The Bank also stipulated guideline
+documents for poverty alleviation, such as the Opinion on Comprehensively Advancing Finance-backed Poverty
+Alleviation Work and the Targeted Poverty Alleviation Work Plan of ICBC, to urge the efforts in this respect.
+Summary of targeted poverty relief in 2016
+◆ Poverty relief planning and objective. The Bank will increase credit support to poor areas, carry out
+targeted poverty alleviation programs to integrate resources at poor areas, and assist the poor in improving production
+and living conditions by means of education, healthcare, industry and disaster relief, supporting them to achieve
+poverty reduction goals on time.
+Targeted Poverty Relief Planning
+The Bank continues to be dedicated to poverty relief and has improved its working mechanism and supporting
+policies. Based on the principle of business sustainability, it has fully utilized its characteristic advantages as a
+commercial bank, and actively performed its social responsibilities of a large state-owned bank.
+Targeted Poverty Relief
+72
+Targeted Poverty Relief Achievements
+Number of shares
+In RMB10,000
+1,601,312.28
+DETAILS OF CHANGES IN SHARE CAPITAL
+Changes in Ordinary Shares
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+73
+Annual Report 2016
+For more details on the Bank's social responsibilities, please refer to the ICBC Corporate Social Responsibility Report 2016
+(Environment, Society and Governance) published on its official website.
+In terms of credit support, the Bank will further increase credit resources for poverty relief and prioritize the financing
+need for poverty reduction through the loan program management. In terms of financing policies, the Bank will
+balance the commercial needs against the social needs and focus on meeting the financing demand of the registered
+poor households, and enterprises or key projects which could assist with or serve the registered poor households. In
+terms of product innovation, the Bank will support local institutions to innovate financing products based on local
+conditions so as to meet the specific need of poverty reduction finance. In terms of service channel, the Bank will
+optimize outlet layout in poor areas, increase the number of self-service facilities, promote system interconnection
+with financial institutions in those areas, and extend financial service networks and payment and settlement services to
+them.
+Subsequent targeted poverty relief plan
+Note: The "targeted poverty relief" refers to the poverty alleviation efforts in Tongjiang County, Nanjiang County, Jinyang County
+and Wanyuan City in Sichuan Province.
+"Annual Poverty Alleviation Award" of the 11th People
+Enterprise Social Responsibility of people.com.cn
+253,036
+34,752
+Awards
+Including: Number of registered poor people
+Number of beneficiaries
+Including poverty relief village infrastructure construction
+and conducting planting & breeding and poor households
+aiding programs
+2,626.75
+4,975
+23,217
+160.00
+570.50
+1,269.50
+2,000.00
+148,003.00
+529,256.83
+162,007.38
+3,689,888.85
+6,099,917.36
+9,300,978.68
++
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+Nature of
+shareholder
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+person
+preference shares
+15,000,000
+3.3
+None
+BOCOM Schroders Asset
+Management Co., Ltd.
+China Resources
+Domestic
+Domestic non-state-
+owned legal person
+preference shares
+15,000,000
+3.3
+None
+State-owned legal
+Domestic
+State-owned legal
+CCB Trust Co., Ltd.
+None
+State-owned legal
+Domestic
+person
+preference shares
+35,000,000
+7.8
+None
+Ping An Life Insurance
+Domestic non-state-
+Domestic
+Company of China, Ltd.
+owned legal person
+preference shares
+30,000,000
+6.7
+Domestic
+SZITIC Trust Co., Ltd.
+BOC International (China)
+Limited
+person
+preference shares
+Other entities
+Domestic
+preference shares
+10,000,000
+2.2
+None
+Company of China Ltd.
+Domestic non-state-
+owned legal person
+Domestic
+preference shares
+10,000,000
+2.2
+None
+Notes: (1) Particulars of shareholding of preference shareholders were based on the number of shares set out in the Bank's register of
+preference shareholders maintained.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. Save as disclosed above, the Bank is not aware of any
+connected relations or concert party action among the afore-mentioned preference shareholders and among the aforementioned
+preference shareholders and top 10 ordinary shareholders.
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares held by preference shareholders in total
+number of domestic preference shares.
+None
+China Life Insurance
+Company Limited
+2.2
+preference shares
+15,000,000
+3.3
+None
+Domestic non-state-
+Domestic
+owned legal person
+preference shares
+15,000,000
+3.3
+None
+China National Tobacco
+Corporation
+Shandong Branch
+China National Tobacco
+Corporation
+Heilongjiang Branch
+Ping An Property &
+Casualty Insurance
+Domestic
+Other entities
+10,000,000
+None
+11.1
+50,000,000
+Cede & Co.
+Foreign legal person
+USD offshore
+preference shares
+147,000,000
+47.9
+Unknown
+The Bank of New York
+Depository (Nominees) Limited
+RMB offshore
+preference shares
+120,000,000
+39.1
+Unknown
+Foreign legal person-
+EUR offshore
+preference shares
+40,000,000
+locked-up
+shares
+13.0
+on sales
+the period
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+BANK (The following data are based on the register of offshore preference shareholders as at 31 December 2016)
+Unit: Share
+Name of shareholder
+Nature of
+shareholder
+Increase/
+decrease
+during the
+reporting
+Number
+of shares
+Number of
+Shares held
+at the end of
+Shareholding
+percentage
+subject to
+pledged or
+restrictions
+Class of shares
+period
+(%)
+80
+Unknown
+(2)
+percentage
+restrictions
+(%)
+on sales
+locked-up
+shares
+China Mobile Communications
+Corporation
+Other entities
+Domestic
+preference shares
+200,000,000
+44.4
+None
+China National Tobacco
+Corporation
+Other entities
+Domestic
+preference shares
+at the end of
+the period
+Notes: (1) Particulars of shareholding of preference shareholders were based on the number of shares set out in the Bank's register of
+preference shareholders maintained.
+period
+pledged or
+As the issuance was private offering, the register of preference shareholders presented the information on proxies of placees.
+(3) The Bank is not aware of any connected relations or concert party action among the aforementioned preference shareholders
+and among the afore-mentioned preference shareholders and top 10 ordinary shareholders.
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+Annual Report 2016
+79
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF THE BANK (The
+following data are based on the register of domestic preference shareholders as at 31 December 2016)
+Unit: Share
+Name of shareholder
+Dividends on the Bank's domestic preference shares are paid annually in cash, and calculated based on the aggregate
+value of the issued domestic preference shares. Dividends on the Bank's domestic preference shares are non-cumulative.
+Holders of domestic preference shares are only entitled to dividends at the prescribed coupon rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the domestic preference share issuance proposal, the Bank distributed a dividend of RMB2,025,000,000
+on the domestic preference shares (tax-inclusive) at the coupon rate of 4.5%
+Increase/
+decrease
+during the
+reporting
+Number
+of shares
+Number of
+Shares held
+Shareholding
+subject to
+Class of shares
+Dividends on the Bank's offshore preference shares are paid annually in cash, and calculated based on the aggregate
+value of the offshore preference shares. Dividends on the Bank's offshore preference shares are non-cumulative. Holders
+of offshore preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled to any
+distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore preference share issuance proposal, the Bank distributed a dividend of USD196,000,000,
+EUR40,000,000 and RMB800,000,000 on the offshore preference shares (tax-inclusive), aggregating to RMB2,425 million
+at the rate on dividend declared date. In practice, the dividend was distributed in the currency of the preference share.
+According to relevant laws, when the Bank distributes dividends for offshore preference shares, the enterprise income tax
+shall be withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the offshore
+preference shares, the Bank will pay the relevant taxes, in addition to the dividends for offshore preference shares.
+December 2016-December 2019
+Recent distribution of dividends on preference shares by the Bank is shown as follows:
+61
+Female
+Shareholder Supervisor
+Wang Chixi
+December 2013-April 2016
+69
+October 2005-June 2016
+Male
+Yi Xiqun
+December 2009-March 2017
+59
+Male
+Independent Non-executive Director
+Kenneth Patrick Chung
+Independent Non-executive Director
+Dong Juan
+External Supervisor
+Wei Guoxiong
+(5) According to the regulations of CSRC, the day of first appointment of a re-elected director shall be the commencement date of
+his/her tenure as indicated in the above table.
+(4) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+Mr. Hu Hao ceased to act as Board Secretary of the Bank concurrently from July 2016; Mr. Zhang Wei ceased to act as Employee
+Supervisor of the Bank from June 2016.
+(3)
+(2) The current terms of Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong as Executive Directors of the Bank
+are set out in the above table and their terms as Senior Management members of the Bank are specified in the section headed
+"Directors, Supervisors, Senior Management, Employees and Institutions Biographies of Directors, Supervisors and Senior
+Management". Mr. Yi Huiman has served as Chairman of the Board of Directors of the Bank since June 2016.
+Notes: (1) Please refer to the section headed "Directors, Supervisors, Senior Management, Employees and Institutions - Appointment and
+Removal".
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+82
+August 2006-July 2016
+61
+May 2009-June 2016
+64
+Female
+Male
+Chief Risk Officer
+McCarthy
+December 2009-October 2016
+72
+Male
+July 2016-
+53
+Male
+Board Secretary
+Guan Xueqing
+July 2016-
+54
+Male
+Chief Risk Officer
+Wang Bairong
+January 2017-
+50
+Male
+Senior Executive Vice President
+October 2016-
+Directors, Supervisors and Senior Management Leaving Office
+(6) During the reporting period, the Bank did not implement any share incentives. None of the existing directors of the Bank or those
+who left office during the reporting period, except Mr. Zhang Hongli who held 2,000 H shares of the Bank, held shares or share
+options or were granted restricted shares of the Bank, and there was no change during the reporting period.
+Jiang Jianqing
+Male
+Independent Non-executive Director
+Malcolm Christopher
+December 2013-January 2017
+59
+Male
+Non-executive Director
+Fu Zhongjun
+Senior Executive Vice President
+June 2015-July 2016
+56
+Male
+Executive Director,
+Wang Xiquan
+Executive Director
+October 2005-May 2016
+Chairman of the Board of Directors,
+46
+Biographies of Directors, Supervisors and Senior Management
+Mr. Yi has served as Chairman of the Board of Directors and Executive Director of Industrial and Commercial Bank of China
+Limited since June 2016. He joined ICBC in 1985, and had previously served in several positions including Deputy Head of
+ICBC Zhejiang Branch, and Head of ICBC Jiangsu Branch and ICBC Beijing Branch. Mr. Yi has served as a member of Senior
+Management, Senior Executive Vice President, President, Vice Chairman and Executive Director of Industrial and Commercial
+Bank of China Limited since October 2005. He obtained a Master's degree in Executive Business Administration from
+Guanghua School of Management of Peking University.
+Wang Lin, Secretary of Party Discipline Committee
+Mr. Shen has served as External Supervisor of Industrial and Commercial Bank of China Limited since June 2016. He
+previously served as the Vice Chief of the Financial Market Division of the Financial System Reform Department, Chief of
+the System Reform Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China. Mr.
+Shen is currently guest professor of Tsinghua University and Zhejiang University. Mr. Shen graduated from Renmin University
+of China, and received a Doctorate degree in Economics. He is a research fellow.
+Shen Bingxi, External Supervisor
+Mr. Qu has served as External Supervisor of Industrial and Commercial Bank of China Limited since December 2015.
+Currently, he is a professor and tutor for PhD students of Renmin University of China, Director of China Fiscal and Financial
+Policy Research Center (a key research center of humanities and social sciences of the Ministry of Education), Deputy Director
+of Financial and Securities Institute of Renmin University of China, a council member of China Finance Society, a member of
+China Finance 40 Forum and External Expert of China Development Bank. He was Head of the Applied Finance Department
+of the School of Finance, Renmin University of China. Currently, he is also External Supervisor of Bank of Beijing. Mr. Qu
+graduated from Renmin University of China, and received a Doctorate degree in Economics.
+Qu Qiang, External Supervisor
+Mr. Huang has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since June 2016. He
+joined ICBC in 1994 and is currently the General Manager of Internal Audit Bureau of ICBC. He served as Deputy General
+Manager and General Manager of the Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC
+from December 1998 to June 2015. Mr. Huang graduated from The University of Hong Kong with an MBA degree. He is a
+senior economist.
+Mr. Wang has served as Secretary of Party Discipline Committee of Industrial and Commercial Bank of China Limited since
+July 2015. He began his career in 1987. Prior to joining ICBC, he once served as Director of Fund Supervision Department
+and Director of Securities and Fund Institution Supervision Department of CSRC. Mr. Wang graduated from Tsinghua
+University, and received a Doctorate degree in Management.
+Huang Li, Employee Supervisor
+Hui Ping, Employee Supervisor
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of Industrial
+and Commercial Bank of China Limited since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor
+of the Board of Supervisors, General Manager of the Legal Affairs Department and Chief of Consumer Protection Office of
+ICBC. He graduated from Peking University with a Doctorate degree in Law and is a research fellow.
+Zhang Wei, Shareholder Supervisor
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+86
+Mr. Hui has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since September 2015. He
+joined ICBC in 1984 and has served as Deputy Secretary of the Party Discipline Committee and concurrently as Director of
+the Discipline Enforcement Department since 2015. He was Deputy Head and Head of Shaanxi Branch and General Manager
+of the Internal Control and Compliance Department of ICBC. Mr. Hui graduated from Xiamen University and received a
+Doctorate degree in Finance. He is a senior economist.
+Annual Report 2016
+87
+Directors, Supervisors, Senior Management, Employees and Institutions
+◆ Dividend Distribution of Preference Shares
+ICBC
+88
+None of the directors, supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao were recommended by
+Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+Mr. Guan has served as Board Secretary of Industrial and Commercial Bank of China Limited since July 2016. He joined
+ICBC in 1984 and served as Head of Suining Branch in Sichuan, Representative of Frankfurt Representative Office and
+Deputy General Manager of Frankfurt Branch, Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General
+Manager of Banking Department of Sichuan Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan
+was also General Manager of Corporate Strategy and Investor Relations Department of Industrial and Commercial Bank of
+China Limited. He graduated from the Southwestern University of Finance and Economics and obtained a Doctorate degree
+in Economics. He is a senior economist.
+Guan Xueqing, Board Secretary
+Mr. Wang has served as Chief Risk Officer of Industrial and Commercial Bank of China Limited since July 2016. He began
+his career in 1986. He joined ICBC in 1991 and previously served as Assistant to Head of Zhejiang Branch and Head of
+Shaoxing Branch, Deputy Head of Zhejiang Branch and General Manager of the Banking Department of Zhejiang Branch,
+and Deputy Head (person in charge) and Head of Chongqing Branch. Mr. Wang graduated from the Party School of the
+Central Committee of C.P.C. and obtained a Master's degree in Economics. He is a senior economist.
+Wang Bairong, Chief Risk Officer
+Mr. Tan has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since January
+2017. He joined Bank of China (BOC) in June 1988. He previously served as Deputy General Manager (person in charge) and
+General Manager of Tibet Branch, and General Manager of Yunnan Branch of BOC, Chairman of Bank of China Investment
+Management Co., Ltd. and General Manager of Guangdong Branch of BOC. Mr. Tan graduated from Wuhan University and
+obtained a Doctorate degree in Economics. He is a senior economist.
+Tan Jiong, Senior Executive Vice President
+Mr. Li has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since October
+2016. He joined China Construction Bank in 1993 and held several positions including Deputy General Manager of Tianjin
+Branch, Deputy General Manager of Planning and Finance Department and General Manager of Strategic Planning &
+Equity Investment Department of the Head Office, and General Manager of Chongqing Branch. Mr. Li graduated from
+Tianjin University. He obtained a Master's degree in Executive Business Administration from Peking University. He is a senior
+economist.
+Li Yunze, Senior Executive Vice President
+Mr. Hu has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since November
+2015. Mr. Hu joined ICBC in 1984, serving successively as Deputy General Manager of the Industrial and Commercial
+Credit Department, Deputy General Manager of the Credit Management Department, General Manager of the Institutional
+Banking Department, General Manager of the International Banking Department, President of Chinese Mercantile Bank and
+Chairman of Industrial and Commercial Bank of China Luxembourg S.A. Besides, he once served as Deputy Director-General
+of Construction and Administration Bureau of South-to-North Water Diversion Middle Route Project, a Director of Taiping
+General Insurance Company Limited, Taiping Life Insurance Co., Ltd. and Xiamen International Bank, General Manager of
+Corporate Strategy and Investor Relations Department and Board Secretary of Industrial and Commercial Bank of China
+Limited. Mr. Hu graduated from Hunan University, and received a Doctorate degree in Economics from the Graduate School
+of the Chinese Academy of Social Sciences. He is a senior economist.
+Hu Hao, Senior Executive Vice President
+Ms. Bair has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since March
+2017. Previously, she served as the Research Director, Deputy Counsel and Counsel to Robert Dole. She was a Commissioner
+of the Commodity Futures Trading Commission, later served as a senior vice president for government relations at the New
+York Stock Exchange, and then as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. She
+was the Dean's Professor of Financial Regulatory Policy at the University of Massachusetts-Amherst, Chair of the Federal
+Deposit Insurance Corporation, Senior Advisor to The Pew Charitable Trusts, and Director of Paros Trust Company. She
+is the current President of Washington College and Chair Emeritus of the Systemic Risk Council. She is a founding board
+member of The Volcker Alliance, a non-profit organization. She is a director of Thomson Reuters Corp., Host Hotels & Resort
+Inc. and Avant Inc. She also serves on the International Advisory Council to China Banking Regulatory Commission and the
+International Advisory Board for Santander. She received a Bachelor's Degree in philosophy from the University of Kansas,
+and a juris doctorate from the University of Kansas School of Law. She holds honorary doctorates from Amherst College,
+Drexel University, the University of Kansas, and the University of Massachusetts.
+Sheila Colleen Bair, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since April
+2016. He previously served as Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman
+and Principal Partner of PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group
+of global leadership committee of PricewaterhouseCoopers and Chairman of PricewaterhouseCoopers Asia-Pacific region.
+Mr. Yang currently serves as a member of the 12th National Committee of the Chinese People's Political Consultative
+Conference, a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority, a member of the
+board of directors of the Hong Kong Jockey Club, Vice Chairman of the Council of the Open University of Hong Kong,
+director and chairman of Audit Committee of Hang Seng Management College, and an independent non-executive director
+of the Tencent Holdings Limited. Mr. Yang graduated from the London School of Economics and Political Science. He holds
+the qualification of the Association of Chartered Certified Accountants, and is a senior member of the Institute of Chartered
+Accountants in England and Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of
+Management Accountants.
+Yang Siu Shun, Independent Non-executive Director
+Ms. Ge has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012. She
+has worked at Huijin since 2005 and is now Deputy Officer of Banking Institutions Department I of Huijin. Previously she
+served as Deputy Officer and Officer of CCB Share Management Division of the Banking Department and an Employee
+Supervisor of Huijin. Ms. Ge previously served as Lecturer at the Economics Management College of Beijing University of
+Industry in 1994, and subsequently served as Assistant Researcher at China Eagle Securities Company and staff member
+of the Department of Public Offering and Supervision at China Securities Regulatory Commission. Ms. Ge graduated from
+China University of Technology and received a Doctorate degree in Management. Ms. Ge also received a Bachelor's degree
+in Engineering from Zhejiang University and a Master's degree in Economics from Beijing Normal University. She is a senior
+economist.
+Ge Rongrong, Non-executive Director
+Ms. Wang has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012.
+She has joined Central Huijin Investment Ltd. since 2012. She joined the Research Bureau of the People's Bank of China
+in 1997 where she served as Deputy Chief of division, Chief of division and Deputy Director and served as Deputy Mayor
+of Tongliao City in Inner Mongolia Autonomous Region at the same time. Ms. Wang was a researcher and a Member of
+the Post Doctoral Academic Committee and a Post-Doctoral Co-mentor at the People's Bank of China Research Institute of
+Finance. Currently, she is a member of the Academic Committee of the China Institute for Rural Studies, Tsinghua University,
+a mentor at the Tsinghua PBC School of Finance and an invited professor at the Graduate School of Chinese Academy of
+Social Sciences. Ms. Wang graduated from the Graduate School of Chinese Academy of Social Sciences and received a
+Doctorate degree in Economics.
+Wang Xiaoya, Non-executive Director
+Mr. Wang has served as Executive Director of Industrial and Commercial Bank of China Limited since December 2016, and
+Senior Executive Vice President since December 2013. He joined China Development Bank in 1994 and served as Deputy
+Head of Heilongjiang Branch, Deputy Director of the Human Resources Department of the Head Office, Head of Project
+Appraisal Department III of the Head Office, Head of Beijing Branch and Head of Human Resources Department of the Head
+Office. Mr. Wang graduated from Huazhong Agricultural University with a Bachelor's degree in Agronomy. He is a senior
+engineer.
+Wang Jingdong, Executive Director, Senior Executive Vice President
+Mr. Zhang has served as Executive Director of Industrial and Commercial Bank of China Limited since June 2015, and Senior
+Executive Vice President since May 2010. He worked as Financial Manager at the headquarters of Hewlett-Packard, Director
+and Head of the China operations of Schroders PLC, Executive Director of Goldman Sachs Asia and Chief Representative of
+Goldman Sachs (China) LLC Beijing Representative Office, and Head of Deutsche Bank Investment Banking Greater China,
+Vice Chairman of Deutsche Bank Asia and Chairman of Deutsche Bank China, member of the Global Banking Management
+Committee and Head of Asia - Pacific of Deutsche Bank Global Banking and Chairman of Deutsche Bank (China) Co.,
+Ltd. He was concurrently Chairman of ICBC International Holdings Limited and Chairman of Industrial and Commercial
+Bank of China (Brasil) S.A., and once served as Vice Chairman of Standard Bank Group Limited and Chairman of Industrial
+and Commercial Bank of China (USA) NA. Mr. Zhang received a Bachelor's degree from Heilongjiang Bayi Agricultural
+University and a Master's degree in Genetics from the University of Alberta, Canada, as well as a Master's degree in Business
+Administration (MBA) from the Santa Clara University in California, USA, and a Doctorate degree in Management Science
+and Engineering from the Chinese Academy of Social Sciences.
+Zhang Hongli, Executive Director, Senior Executive Vice President
+Directors, Supervisors, Senior Management, Employees and Institutions
+83
+Annual Report 2016
+Mr. Qian has served as Chairman of the Board of Supervisors of Industrial and Commercial Bank of China Limited since
+June 2015. He was appointed as Executive Vice President of Bank of Communications Co., Ltd. (BOCOM) in October 2004
+and became Executive Director and Executive Vice President of BOCOM as of August 2007. During his tenure at China
+Construction Bank, he served as Deputy Head of Shanghai Branch, General Manager of the Asset and Liability Management
+Department and Director of the Restructuring and Reform Office. Besides, Mr. Qian has served in several other positions, e.g.
+Senior Vice President of BOCOM and concurrently Head of BOCOM Shanghai Branch, Chairman of BOCOM Life Insurance
+Company and Chairman of BOCOM Schroder Fund Management Co., Ltd. He graduated from Shanghai University of
+Finance and Economics with an MBA degree. He is a senior economist.
+Qian Wenhui, Chairman of the Board of Supervisors
+Mr. Gu has served as Vice Chairman and Executive Director of Industrial and Commercial Bank of China Limited since
+December 2016, and President since October 2016. He joined ICBC in 1998, where he served as Deputy General Manager
+of Accounting and Settlement Department, Deputy General Manager of the Planning and Finance Department, and General
+Manager of Finance and Accounting Department. Since July 2008, he had served as Board Secretary and General Manager
+of Corporate Strategy and Investor Relations Department, Head of Shandong Branch and Senior Executive Vice President of
+Industrial and Commercial Bank of China Limited. He is now concurrently Vice Chairman of Standard Bank Group Limited,
+Chairman of ICBC (London) PLC and Chairman of Industrial and Commercial Bank of China (Argentina) S.A. Mr. Gu obtained
+a Doctorate degree in Economics from Shanghai University of Finance and Economics, Master's degree in Economics from
+Dongbei University of Finance and Economics and Bachelor's degree in Engineering from Shanghai Jiao Tong University. He is
+a senior accountant.
+Gu Shu, Vice Chairman, Executive Director, President
+Zheng Fuqing, Non-executive Director
+Yi Huiman, Chairman, Executive Director
+Mr. Zheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since February 2015. He
+joined MOF in 1989, and served as Deputy Head and Head of Shanxi Finance Ombudsman Office, and Assistant Ombudsman
+and Associate Counsel of Shanxi Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central
+Committee of C.P.C. majoring in law theory. He is an economist.
+ICBC
+Mr. Neoh has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since April
+2015. He previously served as Chief Advisor to CSRC, a member of the International Consultation Committee of CSRC,
+a member of the Basic Law Committee of the Hong Kong Special Administrative Region under the Standing Committee
+of the National People's Congress of People's Republic of China, and Chairman of the Hong Kong Securities and Futures
+Commission. He was Chairman of the Technical Committee of the International Organization of Securities Commissions, a
+Non-executive Director of Global Digital Creations Holdings Limited. He was an Independent Non-executive Director of Link
+Management Limited, which is the Manager of Link Real Estate Investment Trust. He was also an Independent Non-executive
+Director of China Shenhua Energy Company Limited, Bank of China Limited and China Life Insurance Company Limited. Mr.
+Neoh currently serves as an Independent Non-executive Director of CITIC Limited and New China Life Insurance Company
+Limited. He graduated from the University of London with a Bachelor's degree in Law. He is Honorary Doctorate of Law of
+Chinese University of Hong Kong and Open University of Hong Kong and Honorary Doctorate of Social Sciences of Lingnan
+University. He was elected Honorary Fellow of the Hong Kong Securities Institute and Academician of the International Euro-
+Asian Academy of Sciences. Mr. Neoh was appointed as Senior Counsel in Hong Kong. He is a barrister of England and
+Wales. He was admitted to the State Bar of California.
+Anthony Francis Neoh, Independent Non-executive Director
+launched by the Ministry of Education, an honorary professor of the School of Economics and Management at University of
+Chinese Academy of Sciences and a senior editor in economics for the Journal of Management Science and Engineering, an
+English magazine published by the National Natural Science Foundation of China. He is also an editorial board member of
+Economic Research Journal of the Chinese Academy of Social Sciences and an academic board member of China Economic
+Quarterly published by Peking University. He acts as Independent Non-Executive Director of Xiamen Bank Co., Ltd. as well.
+Mr. Hong graduated from Xiamen University with a Bachelor of Science degree and a Master's degree in Economics, and
+obtained his Doctorate degree in Economics from the University of California San Diego.
+Directors, Supervisors, Senior Management, Employees and Institutions
+85
+Annual Report 2016
+Mr. Hong has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+August 2012. Mr. Hong was previously in charge of the National Science Fund for Distinguished Overseas Young Scholars
+supported by the National Natural Science Foundation of China, and acted as President of the Chinese Economists Society
+in North America. He is currently an academician of the Academy of Sciences for the Developing World and a professor
+of Economics and International Studies at Cornell University in the United States. He has been enrolled as one of the first
+participants of the "Thousand Talents Plan" and serves as Vice Chairman of the Steering Committee of Economics Teaching
+at Institutions of Higher Learning under the Ministry of Education and Director of the Wang Yanan Institute for Studies
+in Economics and the School of Economics at Xiamen University. He is a lecture professor of the "Changjiang Scholars"
+Hong Yongmiao, Independent Non-executive Director
+Mr. Or has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since May
+2012. Mr. Or previously served as General Manager and Director of The Hongkong and Shanghai Banking Corporation
+Limited, Chairman of HSBC Insurance Limited, Chief Executive and Vice Chairman of Hang Seng Bank Limited, Chairman
+of Hang Seng Insurance Company Limited and Hang Seng Bank (China) Limited, Director of Cathay Pacific Airways Limited,
+and Director of Hutchison Whampoa Limited. He was Chairman of the Hong Kong Association of Banks, Vice President and
+a Council Member of the Hong Kong Institute of Bankers, Chairman of the Financial Services Advisory Committee and a
+member of the Services Promotion Program Committee of the Hong Kong Trade Development Council, a member of the
+Risk Management Committee of the Hong Kong Exchanges and Clearing Limited, a member of the Aviation Development
+Advisory Committee, Chairman of Executive and Campaign Committee of the Community Chest of Hong Kong, Acting
+Chairman of the Council of City University of Hong Kong, a Council Member of The University of Hong Kong, and an
+Adviser of the Employers' Federation of Hong Kong. Mr. Or currently acts as Chairman, CEO and Executive Director of China
+Strategic Holdings Limited, Chairman and Independent Non-executive Director of Esprit Holdings Limited, Vice Chairman
+and Independent Non-executive Director of G-Resources Group Limited, Vice Chairman and Non-executive Director of Aquis
+Entertainment Limited, Independent Non-executive Director of Chow Tai Fook Jewellery Group Limited, Television Broadcasts
+Limited and Regina Miracle International Ltd., and Vice Patron of the Board of the Community Chest of Hong Kong. Mr.
+Or graduated from The University of Hong Kong with a Bachelor's degree in Economics and Psychology. He is an Honorary
+Doctorate of Social Science of City University of Hong Kong. Mr. Or was awarded a Silver Bauhinia Star from the Hong Kong
+Special Administrative Region and Honorary University Fellowships from The University of Hong Kong in 2009. He is a Justice
+of the Peace.
+Or Ching Fai, Independent Non-executive Director
+Mr. Cheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015.
+He joined Huijin in 2009, and served as Deputy Director of Finance Bureau of Pingquan County in Hebei Province, Deputy
+Director of Finance Office of Hebei Province, Head of Hebei Certified Public Accountants, Vice Chairman and Secretary
+of Hebei Institute of Certified Public Accountants, Deputy General Manager of Shijiazhuang Office, General Manager of
+Evaluation Management Department, General Manager of Tianjin Office and General Manager of Development Research
+Department of China Great Wall Asset Management Corporation, and Non-executive Director of Agricultural Bank of China
+Limited. Currently, he acts as guest professor of Peking University HSBC Business School, tutor to PhD students of Hunan
+University, graduate supervisor for Graduate School of Chinese Academy of Social Sciences, Central University of Finance and
+Economics and Capital University of Economics and Business, and member of the Expert Advisory Committee for Mergers,
+Acquisitions and Restructurings of CSRC. He obtained Doctorate degree in management from Hunan University. Currently,
+he is a researcher in financial science, senior accountant, PRC Certified Public Accountant and China's Certified Public
+Valuer.
+Cheng Fengchao, Non-executive Director
+Mr. Fei has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015. He
+joined MOF in 1995, and served as Deputy Head of General Division and Head of Business Division II of Shaanxi Finance
+Ombudsman Office, Assistant Ombudsman and Vice Ombudsman of Shaanxi Finance Ombudsman Office, and Ombudsman
+of Ningxia Finance Ombudsman Office. Mr. Fei graduated from the Correspondence Institute of the Party School of the
+Central Committee of C.P.C. in economic management.
+Fei Zhoulin, Non-executive Director
+Directors, Supervisors, Senior Management, Employees and Institutions
+84
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the websites of SSE, SEHK
+and the Bank.
+Male
+November 2015-
+June 2015-June 2018
+54
+Male
+Chairman of the Board of Supervisors
+Qian Wenhui
+49
+Zhang Hongli
+Wang Jingdong
+Male
+Gu Shu
+52 July 2013-June 2019
+Male
+Chairman of the Board of Directors,
+Executive Director
+Yi Huiman
+Tenure
+Vice Chairman, Executive Director,
+President
+Executive Director,
+Male
+51
+Female
+Non-executive Director
+Ge Rongrong
+January 2012-January 2018
+52
+Female
+Non-executive Director
+Wang Xiaoya
+Senior Executive Vice President
+December 2016–December 2019
+54
+Male
+Executive Director,
+Senior Executive Vice President
+June 2015-June 2018
+Age
+Gender
+Position
+Name
+4.5%
+Domestic preference shares
+millions)
+rate
+in RMB
+Dividend
+(pre-tax,
+(pre-tax,
+in RMB
+millions)
+rate
+Type of preference shares
+Dividend
+Dividend
+distributed
+Dividend
+distributed
+2015
+2016
+2,025
+48
+4.5%
+6.0%
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+81
+Annual Report 2016
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 Presentation of Financial Instruments and the
+Rules for Distinguishing Financial Liabilities and Equity Instruments and Relevant Accounting Treatment (Cai Kuai [2014]
+No. 13) promulgated by MOF as well as the International Accounting Standard 39 - Financial Instruments: Recognition
+and Measurement and the International Accounting Standard 32 - Financial Instruments: Presentation promulgated
+by International Accounting Standards Board and other accounting standards and main issuance clauses of the Bank's
+preference shares, issued and existing preference shares of the Bank excluded contractual obligations of cash on delivery
+or other financial assets and contractual obligations of settlement by delivering variable equity instruments, and shall be
+calculated as other equity instruments.
+_
+-
+◆ Accounting Policy Adopted for Preference Shares and Rationale
+During the reporting period, the Bank did not restore any voting right of preference share.
+◆ Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+◆ Redemption or Conversion of Preference Shares
+2,331
+6.0%
+2,425
+Offshore preference shares
+Senior Executive Vice President
+January 2012-January 2018
+Non-executive Director
+External Supervisor
+June 2016-June 2019
+52
+Male
+Employee Supervisor
+September 2015-September 2018
+Male
+56
+Employee Supervisor
+June 2016-June 2019
+54
+Male
+Shareholder Supervisor
+Hui Ping
+Huang Li
+Qu Qiang
+Male
+50
+December 2015-December 2018
+Shen Bingxi
+54
+Male
+Senior Executive Vice President
+Tan Jiong
+Li Yunze
+Hu Hao
+July 2015-
+51
+Male
+Secretary of Party Discipline Committee
+Wang Lin
+June 2016-June 2019
+64
+Male
+External Supervisor
+Zhang Wei
+March 2017–March 2020
+62
+Female
+Male
+Independent Non-executive Director
+Or Ching Fai
+March 2015-March 2018
+57
+Male
+Non-executive Director
+Cheng Fengchao
+March 2015-March 2018
+58
+Male
+Non-executive Director
+February 2015-February 2018
+53
+Male
+67
+Zheng Fuqing
+Fei Zhoulin
+May 2012-June 2018
+Independent Non-executive Director
+Independent Non-executive Director
+Sheila Colleen Bair
+April 2016-April 2019
+61
+Male
+Independent Non-executive Director
+Yang Siu Shun
+April 2015-April 2018
+70
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+August 2012-December 2018
+52
+Male
+Hong Yongmiao
+63
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for Preference Shares at the meeting of its Board of Directors on 28 October 2016, permitting the
+Bank to distribute the dividends on the Bank's domestic preference shares for the first time on 23 November 2016 and on
+the offshore preference shares on 12 December 2016.
+Annual Report 2017
+0.79
+share
+Basic earnings per
+77
+H
+ICBC (E
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+USD Preference Shares Stock Code: 4603
+EUR Preference Shares Stock Code: 4604
+RMB Preference Shares Stock Code: 84602
+Company Profile
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Through its continuous endeavor and stable
+development, the Bank has developed into the leading
+bank in the world, possessing an excellent customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek further
+development and has made efforts to build a "bank
+of the first choice of customers" while providing
+a comprehensive range of financial products and
+services to 6,271 thousand corporate customers and
+567 million personal customers. The Bank has been
+consciously integrating the social responsibilities with its
+development strategy and operation and management
+activities, and gaining wide recognition in the aspects
+of promoting inclusive finance, supporting targeted
+poverty relief, protecting environment and resources
+and participating in public welfare undertakings.
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it regards controlling and
+resolving risks as its iron law. Besides, the Bank remains
+steadfast in understanding and following the business
+rules of commercial banks to strive to be a century-old
+bank. It also stays committed to seeking progress with
+innovation while maintaining stability, continuously
+enhances the strategy of mega retail, mega asset
+management, mega investment banking as well as
+international and comprehensive development, and
+actively embraces the internet. The Bank unswervingly
+delivers specialized services, and pioneered a specialized
+business model, thus making it "a craftsman in large
+banking".
+The Bank was ranked the 1st place among the Top 1000
+World Banks by The Banker, ranked 1st place in the
+Global 2000 listed by Forbes and topped the sub-list of
+commercial banks of the Global 500 in Fortune for the
+fifth consecutive year, and took the 1st place among
+the Top 500 Banking Brands of Brand Finance for the
+second consecutive year.
+CONTENTS
+Financial Statement Analysis
+13
+Regulatory Environments
+Economic, Financial and
+13
+Discussion and Analysis
+0.77
+10
+7
+President's Statement
+Chairman's Statement
+Corporate Information
+Financial Highlights
+Important Notice
+Definitions
+2 3 4 5203
+0.77
+0.78
+0.75
+A1
+Notes: (1) Calculated in accordance with the Capital Regulation.
+(2) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments at
+the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(3)
+The rating results are in the form of "long-term foreign currency deposits rating".
+Annual Report 2017
+A1
+5
+Financial Indicators
+2017
+2016
+2015
+2014
+2013
+Financial Highlights
+14
+A1
+A1
+Diluted earnings per share
+0.79
+0.77
+0.77
+0.78
+0.74
+A1
+Credit rating
+A
+A
+A
+A
+A
+Moody's(3)
+S&P(3)
+Profitability (%)
+Business Overview
+Risk Management
+Capital Regulation
+CBRC
+CIC
+Company Law
+CSRC
+Global Systemically Important Banks
+Hong Kong Listing Rules
+Huijin
+ICBC (Almaty)
+ICBC (Argentina)
+ICBC (Asia)
+ICBC (Brasil)
+ICBC (Canada)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (London)
+ICBC (Macau)
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Banks undertaking key functions with global features in the financial markets as
+released by the Financial Stability Board
+China Securities Regulatory Commission
+Company Law of the People's Republic of China
+Bank ICBC (JSC)
+China Investment Corporation
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by
+CBRC in June 2012
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+ICBC (Peru)
+ICBC (New Zealand)
+ICBC (Mexico)
+ICBC (Malaysia)
+China Banking Regulatory Commission
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+Employees and Institutions
+Directors, Supervisors, Senior Management,
+72
+Shareholding of Substantial Shareholders
+Details of Changes in Share Capital and
+68
+80
+Social Responsibility
+Regulatory Requirements
+Other Information Disclosed Pursuant to
+65
+- Outlook
+62
+- Capital Management
+66
+28
+Corporate Governance Report
+Report of the Board of Directors
+296
+Overseas Branches and Offices
+List of Domestic and
+293
+2017 Ranking and Awards
+120
+90
+Auditor's Report and Financial Statements
+Organizational Chart
+114
+Significant Events
+111
+Report of the Board of Supervisors
+107
+118
+Industrial and Commercial Bank of China (Asia) Limited
+Return on average total assets(1)
+1.20
+2017
+Quarterly Financial Data
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(6) Calculated by dividing operating expense (less taxes and surcharges) by operating income.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2)
+ratio
+63.34
+60.53
+59.51
+60.34
+60.96
+10.57
+Capital adequacy ratio (10)
+15.14
+14.61
+15.22
+14.53
+2016
+13.12
+8.21
+8.21
+8.11
+7.46
+6.76
+Risk-weighted assets to total assets
+Total equity to total assets ratio
+(In RMB millions)
+Operating income
+Q1
+168,186
+6
+ICBC
+Chairman's Statement
+Chairman Yi Huiman
+Annual Report 2017
+7
+98,018 (13,829) (44,582)
+Chairman's Statement
+Time is weightless. However, the past year weighed heavy as we fought with all-
+out efforts.
+In the past year, we fulfilled our responsibility as a big bank in serving the real economy. Under the principle of
+co-existence and common prosperity with the real economy, we integrated the Bank's operation with the national strategy,
+and provided financial services in the bigger picture of supporting the real economy and the supply-side structural reform.
+The Bank strengthened support for key projects and programs in the "four regions" and the "three supporting belts". We
+established the Inclusive Finance Department and took active steps to support small and micro businesses, "agriculture,
+rural areas, and rural residents", "mass entrepreneurship and innovation" and poverty relief. We focused on "cutting
+overcapacity, reducing excess inventory and deleveraging" to reduce financial resources tied up by inefficient industries and
+enterprises. The annual increase in credits and non-credit financing (including local government bond investments) both
+exceeded RMB1 trillion, achieving better support of the real economy with financial resources.
+In the past year, we, as a big bank, demonstrated our strong dedication to preventing and controlling financial
+risk. Adopting the holistic approach to national security, we focused on both "on-balance sheet and off-balance sheet"
+dimensions of businesses, strengthened control at the root and took more targeted actions, playing a fundamental role
+in safeguarding the economic and financial security as a big bank. We took tough steps and managed loans by experts,
+thus seeing quarter-over-quarter improvements in all the core indicators of asset quality. NPL ratio fell by 0.07 percentage
+points from last year to 1.55%, while allowance to NPL rose by 17.38 percentage points to 154.07%. We attached great
+importance to preventing and controlling cross risks, adhered to the principles of simplicity, transparency and controllability
+and never overstepped the redline in cross-market innovation and the bottom line of compliance.
+In the past year, we behaved in such a way as a big bank is expected to do in innovation and transformation. We
+actively explored and practiced the rules underlying commercial banking, pursued reform, innovation and transformation in
+the light of prevailing trends, created value from services and survived through competitiveness. We made sustained efforts
+in mega retail, mega asset management and mega investment banking strategies, progressing steadily in internationalized
+and diversified development with multiple growth engines. We made coordinated efforts on reforms such as market-
+based interest rate setting, competitiveness enhancement in major cities, optimized layout of channels and staff structure
+adjustment and sped up FinTech development. These reforms reinvigorated business vitality and value creativity. The Group
+achieved RMB287.5 billion in net profit for the year, the best in the global banking industry. The Bank saw its market
+capitalization going up by over 40% in 2017, distributing the largest amount of cash dividends among A-share listed
+companies for ten consecutive years and boasting the highest brand value in the global financial industry.
+2017 marked the Bank's successful completion of its three-year plan and an end of its first arduous long march that
+witnessed our hard work in the past more than 30 years, in particular, our innovative practices in the past over ten years
+after listing. The Bank made "five historic strides" forward, from small to big, from local to global, from the verge of
+technical insolvency to the center of global finance, from a pursuer in the global market to a parallel runner or even a
+pacemaker in some fields, and from a learner in business development and corporate governance to a creator and leader.
+As the world's largest bank, the Bank is vigorously marching into a new era.
+ICBC
+Time is the most faithful recorder. In the past year of 2017, the 19th National Congress of the Communist Party of China
+erected a new milestone, Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era creates a mighty
+force that changes China, and the new era unlocks a new journey. For ICBC, 2017 was unusual, challenging and tough,
+marking the first full year since the new leadership of the Bank took office. Confronted by the cumulative effects of
+deepening interest rates liberalization, frequent breakout of various risk events, accelerated financial disintermediation and
+intensified inter-bank and cross-sector competition, we kept in mind the big picture, defended the bottom line and scored
+achievements with innovation-guided methodologies, better management and painstaking efforts, thus delivering a brilliant
+"answer sheet of ICBC".
+12.19
+54,068 199,614
+company
+Q2
+Q3
+Q4
+Q1
+Q2
+Q3
+Net cash flows from operating 109,306 237,236 370,254
+activities
+Q4
+169,526
+Net profit attributable to equity 75,786 77,209 75,004
+holders of the parent
+169,389
+58,050
+168,992
+74,764
+159,989 155,034
+75,453 72,575 55,457
+157,666
+168,553
+1.14
+13.48
+13.27
+21.44
+22.59
+20.67
+Ratio of net fee and commission
+2.45
+2.26
+2.16
+2.01
+1.89
+Return on risk-weighted assets (5)
+2.57
+2.66
+2.47
+2.16
+2.22
+Net interest margin (4)
+2.40
+1.30
+1.40
+1.44
+Return on weighted average equity(2)
+14.35
+15.24
+20.87
+17.10
+21.92
+Net interest spread (3)
+2.10
+2.02
+2.30
+2.46
+19.96
+21.13
+income to operating income
+Cost-to-income ratio (6)
+Allowance to total loans ratio (9)
+2.39
+2.22
+2.35
+2.34
+2.43
+257.19
+Capital adequacy (%)
+12.77
+12.87
+12.87
+11.92
+10.57
+Tier 1 capital adequacy ratio (10)
+Core tier 1 capital adequacy ratio (10)
+13.42
+206.90
+136.69
+26.45
+27.40
+26.69
+27.93
+28.80
+Asset quality (%)
+156.34
+Non-performing loans ("NPL") ratio (7)
+1.62
+1.50
+1.13
+0.94
+Allowance to NPL (8)
+154.07
+1.55
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+47
+ICBC (Thai)
+336,440
+Profit before taxation
+364,641
+363,279
+363,235
+361,612
+338,537
+Net profit
+287,451
+279,106
+277,720
+276,286
+262,965
+Net profit attributable to equity holders
+286,049
+278,249
+277,131
+Industrial and Commercial Bank of China (Macau) Limited
+24,137,265
+26,087,043
+Total assets
+As at the end of reporting period (in RMB millions)
+(1,947)
+359,455
+201,457
+239,221
+770,864
+Net cash flows from operating activities
+of the parent company
+262,649
+275,811
+1,131,764
+360,905
+360,675
+361,691
+Operating income
+122,326
+132,497
+143,391
+144,973
+139,625
+675,654
+Net fee and commission income
+493,522
+507,867
+471,846
+522,078
+Net interest income
+Annual operating results (in RMB millions)
+443,335
+Allowance for impairment losses
+641,681
+634,858
+Operating profit
+38,321
+56,729
+86,993
+87,894
+127,769
+668,733
+204,140
+220,835
+193,112
+186,194
+Impairment losses
+Operating expenses
+578,901
+218,674
+2013
+14,233,448
+340,482
+22,209,780
+11,933,466
+280,654
+356,407
+353,495
+351,390
+Net core tier 1 capital(¹)
+2,030,108
+1,874,976
+1,701,495
+1,486,733
+1,266,841
+Net tier 1 capital(1)
+2,110,060
+1,954,770
+1,781,062
+1,521,233
+1,266,859
+Net capital base (1)
+2,406,920
+3.63
+4.23
+4.80
+5.29
+5.73
+Net asset value per share(2)
+356,407
+Per share data (in RMB yuan)
+1,572,265
+1,812,137
+2,012,103
+13,216,687 12,475,939
+2,127,462
+14,564,617
+15,902,801
+Risk-weighted assets (1)
+11,982,187
+356,407
+Share capital
+of the parent company
+4,322,244
+4,433,237
+5,009,963
+5,756,704 5,481,174
+23,945,987 22,156,102
+19,226,349 17,825,302
+Due to customers
+Total liabilities
+20,409,261
+Investment
+240,959
+257,581
+9,922,374
+11,026,331
+18,917,752
+20,609,953
+on loans
+13,056,846
+289,512
+19,072,649
+16,281,939
+1,274,134
+1,530,859
+1,789,474
+1,969,751
+2,127,491
+Equity attributable to equity holders
+17,639,289
+1,269,255
+2,265,860
+2,016,799
+1,706,549
+Due to banks and other financial
+institutions
+14,620,825
+15,556,601
+1,539,239
+2014
+Total loans and advances to customers
+2016
+Accounting Standards for Business Enterprises promulgated by the Ministry of Finance
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+The Stock Exchange of Hong Kong Limited
+Shanghai Stock Exchange
+Standard Bank Group Limited
+The State Council of the People's Republic of China
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial
+Bank of China Limited and its subsidiaries
+2
+ICBC
+Important Notice
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+The 2017 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the
+Board of Directors of the Bank held on 27 March 2018. There were 16 directors eligible for attending the meeting, of
+whom 15 directors attended the meeting in person and 1 director by proxy, namely, Mr. Cheng Fengchao appointed
+Mr. Fei Zhoulin to attend the meeting and exercise the voting right on his behalf.
+The 2017 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.408 (pre-tax) for each
+ten shares for 2017. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2017.
+The Bank did not convert capital reserve to share capital.
+The Board of Directors of Industrial and Commercial Bank of China Limited
+27 March 2018
+Mr. Yi Huiman, Legal Representative of the Bank, Mr. Gu Shu, President in charge of finance of the Bank, and Mr. Zhang Wenwu,
+General Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that the financial
+statements contained in the Annual Report are authentic, accurate and complete.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are made based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+Telephone: 86-10-66106114
+No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Registered address and office address
+Yi Huiman
+Legal Representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Ministry of Finance of the People's Republic of China
+The People's Bank of China
+Legal name in English
+Legal name in Chinese
+Corporate Information
+3
+Annual Report 2017
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+The Bank is primarily exposed to credit risk, market risk, liquidity risk, operational risk, reputational risk and country risk.
+The Bank has actively adopted measures to effectively manage various types of risks. Please refer to the section headed
+"Discussion and Analysis — Risk Management" for detailed information.
+中國工商銀行股份有限公司(“中國工商銀行”)
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting
+Standards
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+MOF
+IFRSS
+ICBCFS
+Hong Kong
+ICBC-AXA
+ICBC Leasing
+ICBC Investment
+ICBC International
+ICBC Credit Suisse Asset Management
+ICBC (USA)
+2015
+ICBC Standard Bank
+Business enquiry and complaint hotline: 86-95588
+Website: www.icbc.com.cn, www.icbc-ltd.com
+SEHK
+Standard Bank
+ICBC Standard Bank PLC
+ICBC Financial Leasing Co., Ltd.
+ICBC Financial Asset Investment Co., Limited
+ICBC International Holdings Limited
+ICBC Credit Suisse Asset Management Co., Ltd.
+Industrial and Commercial Bank of China (USA) NA
+SSE
+ICBC Turkey Bank Anonim Şirketi
+ICBC PERU BANK
+Industrial and Commercial Bank of China (New Zealand) Limited
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (Malaysia) Berhad
+The Bank/The Group
+State Council
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+Principal place of business in Hong Kong
+ICBC (Turkey)
+Authorized representatives
+Stock name: ICBC EURPREF1
+Stock code: 4604
+Stock code: 4603
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC USDPREF1
+Offshore Preference Share
+Stock code: 1398
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC
+Stock name: ICBC CNHPREF1-R
+H Share
+Stock name: 工商銀行
+Shanghai Stock Exchange
+A Share
+Place where shares are listed, and their names and
+codes
+Location where copies of this annual report are kept
+Board of Directors' Office of the Bank
+Facsimile: 852-28650990
+Stock code: 601398
+Telephone: 852-28628555
+Stock code: 84602
+Shanghai Stock Exchange
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong
+Financial Data
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Highlights
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong
+KPMG
+Domestic Preference Share
+International auditors:
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue, Dongcheng
+District, Beijing, China
+KPMG Huazhen LLP
+Domestic auditors:
+Name and office address of auditors
+Stock code: 360011
+Stock name: I1
+CPAs (Practicing): Song Chenyang and He Qi
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong
+2017
+H Share
+Computershare Hong Kong Investor Services Limited
+Gu Shu and Guan Xueqing
+Board Secretary and Company Secretary
+Guan Xueqing
+Address: No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Selected media for information disclosure
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+the annual report in respect of A shares
+www.sse.com.cn
+The "HKEXnews" website of SEHK for publication of
+the annual report in respect of H shares
+www.hkexnews.hk
+Legal advisors
+Mainland China
+Website designated by CSRC for publication of
+40/F, Office Tower A, Beijing Fortune Plaza, 7 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+King & Wood Mallesons
+4
+Telephone: 86-4008058058
+3/F China Insurance Building, No. 166 Lujiazui Dong Road,
+Pudong New Area, Shanghai, China
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+Share Registrars
+10/F, Alexandra House, Chater Road, Central, Hong Kong
+A Share
+ICBC
+9/F, Three Exchange Square, Central, Hong Kong
+Allen & Overy
+Hong Kong, China
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Haiwen & Partners
+Linklaters
+2/2
+1/1
+Ye Donghai
+☐ ☐
+1/1
+3/3
+4/4
+Dong Shi
+2/2
+3/3
+1/1
+Mei Yingchun
+3/3
+1/1
+1/1
+4/4
+Or Ching Fai
+Yi Huiman
+5/5
+5/5
+5/5
+9/9
+2/2
+Independent Non-executive Directors
+Hong Yongmiao
+3/3
+4/4
+5/5
+5/5
+9/9
+2/2
+3/3
+5/5
+Non-executive Directors
+-
+4/5
+7/9
+2/2
+Zhang Hongli
+2/3
+3/4
+Wang Jingdong
+3/5
+2/2
+Gu Shu
+4/5
+9/9
+2/2
+3/3
+6/9
+5/5
+2/2
+3/3
+9/9
+2/2
+Fei Zhoulin
+5/5
+5/5
+45
+9/9
+9/9
+Zheng Fuqing
+4/5
+3/5
+9/9
+2/2
+Cheng Fengchao
+2/2
+Anthony Francis Neoh
+4/4
+9/9
+1/3
+2/3
+1/1
+Notes: (1) "Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+(2) Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+96
+ICBC
+Corporate Governance Report
+Special Committees of the Board of Directors
+The Board of Directors of the Bank has established six special committees, namely, the Strategy Committee, the Audit
+Committee, the Risk Management Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee. Except the Strategy Committee, chairmen of all the other committees were
+assumed by Independent Non-executive Directors. More than half of the members of the Audit Committee, the Nomination
+Committee, the Compensation Committee and the Related Party Transactions Control Committee were Independent Non-
+executive Directors. During the reporting period, the performance of duties by the special committees of the Board of
+Directors is set out below:
+Strategy Committee
+The Strategy Committee is mainly responsible for considering the Bank's strategic development plan, risk events that bear
+material influence on the overall situation, business and institutional development plan, major investment and financing
+plan, green credit strategy, consumer protection strategy, fulfillment of social responsibilities in terms of environment,
+community and governance and other aspects, and other major matters critical to the Bank's development, making
+recommendations to the Board of Directors, and examining and assessing the soundness of the corporate governance
+framework to ensure financial reporting, risk management and internal control are compliant with corporate governance
+criteria of the Bank. As at the disclosure date of the results, the Strategy Committee consisted of eight directors,
+including: Executive Directors Mr. Yi Huiman and Mr. Gu Shu; Independent Non-executive Directors Mr. Or Ching Fai,
+Mr. Hong Yongmiao and Ms. Sheila Colleen Bair; and Non-executive Directors Mr. Zheng Fuqing, Ms. Mei Yingchun, and
+Mr. Dong Shi. Chairman of the Board of Directors Mr. Yi Huiman was the chairman of the committee.
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of the Board of Directors
+held five meetings, considered six proposals including the proposals on the 2017 Business Plan and the Strategic Risk
+Management Measures (Trial), and heard three reports on topics including the capital replenishment of the domestic and
+overseas institutions in 2017, merger and acquisition and equity investment and capital injection plan for institutions to be
+established. The Strategy Committee put forward comments or suggestions on matters including strategic risk management,
+capital management, annual final accounts and development of inclusive finance.
+◆ Audit Committee
+The Audit Committee is mainly responsible for constantly overseeing the Bank's internal control system, and supervising,
+inspecting and evaluating financial information and internal audit of the Bank and assessing mechanisms for the Bank's
+staff to report misconducts in financial statements, internal control, etc., and assessing the mechanism for the Bank to
+conduct independent and fair investigations and take appropriate actions in relation to the reported matters. As at the
+disclosure date of the results, the Audit Committee consisted of eight directors, including: Independent Non-executive
+Directors Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun and Mr. Shen Si; and
+Non-executive Directors Mr. Cheng Fengchao, Mr. Fei Zhoulin and Mr. Ye Donghai. Independent Non-executive Director
+Mr. Or Ching Fai was the chairman of the committee.
+Performance of the Audit Committee During the reporting period, the Audit Committee held five meetings, considered
+ten proposals including the Bank's regular report and the Plan for Internal Audit Projects in 2017, and heard 12 reports
+including the 2016 Internal Audit Report and the report on internal control audit results. The Audit Committee put forward
+comments or suggestions on matters including the arrangement of internal and external audits, implementation of new
+accounting standards, and improvement of internal control mechanism. In addition, the Audit Committee also convened a
+seminar on the matters regarding the comprehensiveness, farsightedness and effectiveness of ICAAP. At the meeting, the
+attendees exchanged views on CAR management, effective utilization of capital and other topics.
+Executive Directors
+ICBC
+98
+The Risk Management Committee is primarily responsible for constantly overseeing the Bank's risk management system,
+reviewing and revising the strategy, policy and procedures of risk management and internal control process of the Bank, and
+supervising and evaluating the performance of Senior Management members and risk management departments in respect
+of risk management. It concurrently serves as the US risk committee in accordance with the relevant requirements in the
+Enhanced Prudential Standards on Bank Holding Companies and Foreign Banking Organisation established by the Federal
+Reserve Board. As at the disclosure date of the results, the Risk Management Committee consisted of nine directors, including:
+Executive Director Mr. Zhang Hongli; Independent Non-executive Directors Mr. Anthony Francis Neoh, Mr. Hong Yongmiao,
+Ms. Sheila Colleen Bair and Mr. Shen Si; and Non-executive Directors Mr. Cheng Fengchao, Mr. Zheng Fuqing, Mr. Fei Zhoulin
+and Mr. Dong Shi. Independent Non-executive Director Mr. Anthony Francis Neoh was the chairman of the committee.
+◆Risk Management Committee
+The Bank has established a vertical and independent internal audit management system responsible and reporting to
+the Board of Directors. The Board of Directors regularly reviews the internal audit plan and hears internal audit reports
+on internal audit activities, audit supporting measures, internal audit team building, etc., thus effectively performing the
+function of risk management. The Audit Committee examines, monitors and assesses the internal audit work of the Bank,
+supervises the internal audit rules and their implementation, and makes assessment of audit procedures and results of the
+internal audit department. It is also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department and external auditors. The internal
+audit department is accountable to and reports to the Board of Directors, is guided by the Board of Supervisors and is under
+the examination, supervision and assessment of the Audit Committee. For details of the internal control, please refer to
+"Corporate Governance Report - Internal Control".
+2/2
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of the Bank,
+and examining the effectiveness of the system at least on an annual basis. The Audit Committee performed its function
+of examining the Bank's internal control system through reviewing the administrative rules and regulations and their
+implementation, and examined and assessed the compliance and effectiveness of major operating activities of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing internal control
+and truthfully disclosing internal control assessment reports according to the standard system for enterprise internal control.
+The objective of the internal control of the Bank is to reasonably assure the compliance of its operation and management
+with relevant laws, safety of its assets, as well as the authenticity and completeness of its financial reports and relevant
+information, in order to enhance operation efficiency and results, and to facilitate the realization of its development strategy.
+Due to inherent limitation of internal control, only reasonable assurance can be provided for the afore-mentioned objectives.
+The Board of Directors and the Audit Committee have reviewed and approved the 2017 Internal Control Assessment Report
+of the Bank. For details of the Bank's internal control, please refer to "Corporate Governance Report - Internal Control".
+Effectiveness of the internal audit function
+During the preparation and audit of the 2017 financial statements, the Audit Committee set out related matters such as audit
+schedule and arrangement through negotiation with external auditors, followed the status of external audit and conducted
+supervision over relevant work at appropriate time by means of hearing reports and holding informal discussions, and reviewed the
+unaudited and preliminarily audited annual financial statements respectively. The Audit Committee held a meeting on 26 March
+2018, and considered that the annual financial statements truly, accurately and completely reflected the financial position of the
+Bank. The Audit Committee reviewed the summary of audit work performed by external auditors during the year and made an
+overall and objective assessment on its performance and quality of practice. It also approved the renewal of the engagement of
+KPMG Huazhen LLP and KPMG as the external auditors of the Bank for 2018 and the engagement of KPMG Huazhen LLP as the
+internal control auditors of the Bank for 2018, and presented the proposals to the Board of Directors for consideration.
+The Audit Committee reviewed financial statements of the Bank on a regular basis, and had reviewed and submitted to
+the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also organized and
+conducted the internal control assessment for 2016 of the Group and engaged external auditors to audit the assessment
+report and procedures of the Bank with respect to the relevant regulatory requirements. Additionally, it enhanced
+communication with external auditors, attached importance to the supervision of external auditors and heard several reports
+of external auditors concerning audit plan, audit results, and management proposals.
+Reviewing periodical reports
+Corporate Governance Report
+97
+Annual Report 2017
+Examining internal control system
+1/1
+1/1
+1/1
+8/8
+2/2
+Sheila Colleen Bair
+3/3
+3/3
+3/3
+4/4
+5/5
+2/2
+Yang Siu Shun
+3/3
+4/4
+5/5
+4/5
+9/9
+2/2
+4/4
+2/2
+1/1
+3/3
+4/4
+Kenneth Patrick Chung
+Fu Zhongjun
+Ge Rongrong
+Shen Si
+Wang Xiaoya
+72
+1/2
+2/3
+2/3
+I
+6/7
+Directors Leaving Office
+Control
+Committee
+1/1
+Transactions
+21.1
+91,188
+20.1
+Western China
+3,113,759
+11.9
+10.9
+22.3
+92,678
+20.5
+Northeastern China
+3,557
+1,078,047
+Nomination Compensation
+Committee Committee Committee Committee
+1,654
+9.8
+Promotion
+Committee
+Retail Banking
+Promotion
+Committee
+Internet Finance
+Innovation
+Management
+Committee
+Business & Product
+Committee
+Promotion
+4.1
+Finance
+Asset & Liability
+Management
+Committee
+Banking
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report its work to, the
+Shareholders' General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance and
+due diligence of Directors and Senior Management members; supervising the performance of duties by the Board of Directors
+and the Senior Management; conducting exit audits on Directors and Senior Management members when necessary;
+inspecting and supervising financial activities of the Bank; examining financial information such as financial report, business
+report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of Directors; inspecting
+and supervising the business decision-making, risk management and internal control of the Bank and guiding the internal
+audit department of the Bank; supervising the engagement, dismissal, reengagement and audit of the external auditor as
+well as the audit work progress of the Bank; formulating the remuneration plans and performance evaluation measures of
+supervisors, conducting the performance evaluation on supervisors, and reporting to the Shareholders' General Meeting
+for approval; presenting proposals to the Shareholders' General Meeting; proposing to convene an extraordinary general
+meeting, and convening and presiding over the extraordinary general meeting in case the Board of Directors fails to perform
+its duty of convening Shareholders' General Meeting; proposing to convene an interim meeting of the Board of Directors.
+Responsibilities of the Board of Supervisors
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report its
+work to, the Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the
+Shareholders' General Meeting; implementing the resolutions of the Shareholders' General Meeting; deciding on the
+business plans, investment proposals and development strategies of the Bank; formulating annual financial budget and
+final accounts of the Bank; formulating plans for profit distribution and loss recovery of the Bank; formulating plans for
+the increase or decrease of the Bank's registered capital, capital replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such as risk management system and internal control system, and
+supervising the implementation of such systems; appointing or removing President and the Board Secretary, and appointing
+or removing Senior Executive Vice Presidents and other senior management members (except the Board Secretary) who
+shall be appointed or removed by the Board of Directors under relevant laws according to the nomination of the President
+and deciding on their compensation, bonus and penalty matters; deciding on or authorizing the President to decide on
+the establishment of relevant departments of the Head Office; regularly evaluating and improving corporate governance
+of the Bank; managing information disclosure of the Bank; and supervising and ensuring the President and other Senior
+Management members to perform their management duties effectively.
+Responsibilities of the Board of Directors
+Corporate Governance Report
+ICBC
+90
+As the organ of power of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders' General
+Meeting is responsible for, among others, deciding on business policies and significant investment plans of the Bank;
+examining and approving the Bank's annual financial budget, final account proposals, plans for profit distribution and
+loss make-up; electing and replacing directors, supervisors appointed from the shareholder representatives and external
+supervisors; examining and approving work report of the Board of Directors and work report of the Board of Supervisors;
+adopting resolutions on merger, division, dissolution, liquidation, change of corporate form, increase or decrease of the
+Bank's registered capital, issuance of corporate bonds or other securities and public listing, repurchase of the shares and
+issuance of preference shares; and amending the Articles of Association of the Bank.
+Responsibilities of the Shareholders' General Meeting
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Note: The above is the corporate governance framework chart as of the end of 2017.
+Institutional
+Overseas
+Institutions
+Directly
+Controlled
+Institutions
+Departments
+Supporting
+Departments
+Administration
+Comprehensive
+Internal Audit
+Sub-bureau
+Internal Audit
+Bureau
+Risk
+Management
+Department
+Profitability
+Units
+Committee
+Promotion
+Domestic
+Institutions
+Responsibilities of the Senior Management
+Inclusive
+Promotion
+Committee
+Shareholders'
+Corporate Governance Framework
+Corporate Governance Report
+89
+Annual Report 2017
+Note: Overseas and other assets include investments in associates and joint ventures.
+100.0
+453,048
+100.0
+16,888
+100.0
+General Meeting
+26,087,043
+undistributed assets
+(21.1)
+(5,511,666)
+Eliminated and
+4.6
+21,026
+3.2
+535
+13.0
+3,382,006
+Overseas and others
+Total
+Information
+Technology
+Management
+Committee
+Board of
+Directors
+Risk Management
+Banking
+Investment
+Committee
+Promotion
+Banking
+Corporate
+Management
+Committee
+Financial
+Assets Service
+Committee
+Management
+Management
+Strategy
+Committee
+Senior
+Audit Committee
+Related Party
+Transactions Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Board of
+Supervisors
+Secondary reporting line
+Primary reporting line
+Departments
+Management
+Marketing
+Committee
+Risk
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, the operation and management of the Bank; organizing the implementation
+of operation and investment plans approved by the Board of Directors; formulating specific rules and regulations of the
+Bank; determining plans for compensation distribution and performances evaluation of persons in charge of internal
+departments and branches of the Bank (except the internal audit department); truthfully reporting to the Board of Directors
+or the Board of Supervisors on the business performance; drafting the annual financial budget plan, final account plan, profit
+distribution plan and loss make-up plan, plans for increase or reduction of the registered capital, the issuance of bonds or
+other securities and listing, and making suggestions in that respect to the Board of Directors.
+3,776
+During the reporting period, the Bank took improving corporate governance as a primary measure to enhance its core
+competitiveness in the new period, continued to optimize its modern corporate governance framework, mechanism and
+culture, and brought the corporate governance and risk management capacities of the Group to a higher level. There is
+neither any material divergence between actual corporate governance of the Bank and applicable regulatory documents
+regarding corporate governance issued by CSRC, nor any problem identified by regulatory authorities but remain unresolved
+in respect of corporate governance. During the reporting period, by virtue of its excellent performance in corporate
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES (As at the end of December 2017)
+Assets Percentage
+Item
+(in RMB millions)
+(%)
+Number of Percentage
+institutions
+Percentage
+(%)
+Employees
+(%)
+Head Office
+9,101,260
+34.9
+30
+0.2
+16,235
+3.6
+11.0
+49,755
+12.2
+2,064
+12.9
+3,356,039
+As at the end of 2017, the Bank had a total of 16,888 institutions, representing a decrease of 312 as compared with the
+end of the previous year. Among them, there were 16,469 domestic institutions and 419 overseas institutions. Domestic
+institutions include the Head Office, 36 tier-one branches and branches directly controlled by the Head Office, 441 banking
+offices of tier-one branches and tier-two branches, 15,846 outlets, 29 Head Office-level profitability units along with their
+directly controlled institutions and branches, and 116 major subsidiaries and their branches.
+Pearl River Delta
+61,724
+15.0
+2,539
+20.4
+5,327,071
+Yangtze River Delta
+13.6
+Overview of Corporate Governance
+Directors, Supervisors, Senior Management, Employees and Institutions
+Effective Communication with Shareholders
+Audit Management
+Risk
+Strategy
+Committee
+Board of
+Directors
+General
+Meeting
+Directors
+Shareholders'
+Related Party
+Attendances in person/Number of meetings that should be attended
+Special Committees of the Board of Directors:
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Corporate Governance Report
+95
+Annual Report 2017
+During the reporting period, the Board of Directors of the Bank held nine meetings, considered 64 proposals including
+the proposals on the 2016 Work Report of the Board of Directors, amendment of the Articles of Association of the Bank,
+nomination of candidates for Directors, and distribution of dividends on preference shares and ordinary shares, and heard 26
+reports including the reports on the 2017 Work Plan of the Board of Directors, the Directors' performance assessment by the
+Board of Directors for 2016, the details on internal audits, and the summary of external audits. For major proposals reviewed
+by the Board of Directors, please refer to the announcements of the Bank on the websites of SSE and SEHK or the website of
+the Bank. In addition, the Board of Directors held a Strategic Seminar. At the Seminar, Directors judged the macroeconomic
+situation at home and abroad, analyzed the potential opportunities and challenges facing the Bank in the next three years,
+and discussed how to devise the strategic development plan for 2018-2020.
+Meetings of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing Directors. With diversified backgrounds,
+the Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed professional and diversified perspectives and views, which ensured scientific decision-making of the Board of
+Directors. As at the disclosure date of the results, the Board of Directors of the Bank consisted of 16 directors, including four
+Executive Directors: Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong; six Non-executive Directors:
+Mr. Cheng Fengchao, Mr. Zheng Fuqing, Mr. Fei Zhoulin, Ms. Mei Yingchun, Mr. Dong Shi and Mr. Ye Donghai; and six
+Independent Non-executive Directors: Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu
+Shun, Ms. Sheila Colleen Bair and Mr. Shen Si. Mr. Yi Huiman was Chairman and Mr. Gu Shu was Vice Chairman of the
+Board of Directors. All Executive Directors have worked in the areas of banking and management for a long time, possess
+extensive professional expertise and experience in those areas and are familiar with operation and management of the
+Bank. Most Non-executive Directors come from economic and financial management authorities and have rich management
+experience and relatively high level of understanding of policies and theories. All of the Independent Non-executive Directors
+are prestigious experts in the areas of economy, finance, audit and law respectively, and most of them have international
+background and are familiar with corporate governance, finance and management. The number of Independent Non-
+executive Directors of the Bank accounted for more than one third of the total members of the Board of Directors,
+complying with relevant regulatory requirements.
+Composition of the Board of Directors
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+The Bank actively strengthened the information disclosure management, continued to improve the group-wide information
+transmission mechanism, encouraged the cooperation in information disclosure between the parent company and
+subsidiaries, and fulfilled the information disclosure obligations in compliance with the applicable laws and regulations. On
+the basis, in order to meet the information needs of investors and other stakeholders, the Bank continuously promoted the
+voluntary information disclosure and improved the Bank's level of transparency, thereby effectively safeguarding the right to
+information of all shareholders, customers and other stakeholders.
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results, domestic and overseas road shows and reverse road shows, and attending famous investment forums at
+home and abroad during the reporting period. The Bank took full advantage of the communication platforms including the
+investor interactive platform of SSE, investor relations column on the website of the Group, investor hotline and investor
+email of the Bank, to understand investors' needs and provide sufficient information feedback in a timely manner.
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+shareholders' general meetings of the Bank strictly complied with the relevant provisions of the Company Law and the
+Articles of Association of the Bank, ensuring that shareholders could exercise their right of participation in the Shareholders'
+General Meetings smoothly. Since it was listed, in order to treat A and H minority shareholders fairly, the Bank has held
+the Annual General Meeting in Beijing and Hong Kong concurrently by satellite and set up registration offices of A and H
+shareholders both in Beijing and Hong Kong to facilitate the voting of shareholders. The number of shareholders who
+participated in voting at the Annual General Meeting for the Year 2016 amounted to 4,576.
+Contacts
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the Shareholders' General Meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform
+of SSE, investor relations column on the website of the Group, investor hotline and investor email and hotline, fax and
+email of the Shareholders' General Meetings of the Bank as well. For contact details, please refer to the section headed
+"Corporate Governance Report ― Investor Relations".
+If an ordinary shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share
+certificates and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the
+Bank. For contact details, please refer to "Corporate Information".
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis of
+the number of shares held by them; preference shareholders shall be entitled to rights to dividends in priority to payment of
+dividends to ordinary shareholders. Shareholders have other rights conferred by laws, administrative regulations, rules and
+the Articles of Association of the Bank.
+94
+Corporate Governance Report
+Shareholders' General Meeting
+During the reporting period, the Bank convened the 2016 Annual General Meeting on 27 June 2017 and the First
+Extraordinary General Meeting of 2017 on 29 November 2017. The afore-mentioned Shareholders' General Meetings were
+convened and held in strict compliance with relevant laws and regulations and the Articles of Association of the Bank. The
+Bank made announcements on the resolutions and disclosed legal opinions in a timely manner in accordance with regulatory
+requirements. For details of the above meetings, please refer to the announcements of the Bank dated 27 June 2017 and
+29 November 2017 respectively on the websites of SSE and SEHK, or the website of the Bank.
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting during the reporting period.
+Board of Directors and Special Committees
+ICBC
+Bohai Rim
+49,159
+Special provisions on rights of preference shareholders
+Shareholders who hold more than three percent (3%) of shares of the Bank, either individually or jointly, may prepare an
+interim proposal and submit it in writing to the Board of Directors ten (10) days before the Shareholders' General Meeting
+is convened. The Board of Directors shall issue a supplementary notice for the Shareholders' General Meeting within
+two (2) days upon receipt of the proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Putting forward suggestions and reviewing documents
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, documents on status of share capital and minutes of Shareholders' General Meetings, etc.
+In the following circumstances, preference shareholders of the Bank have the right to attend the Shareholders' General
+Meeting and exercise voting rights: (1) amendments to the Articles of Association which relate to preference shares; (2) the
+reduction of the registered capital of the Bank by more than 10% (either separately or in aggregate); (3) merger, division
+and dissolution or change of corporate form of the Bank; (4) issuance of preference shares; and (5) other events specified
+in the Articles of Association that will change or abrogate the rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders' General Meeting shall be given to preference shareholders in accordance
+with the notification procedures applicable to ordinary shareholders as specified in the Articles of Association.
+In the event that the Bank failed to pay the agreed dividend to preference shareholders for three years in aggregate or for
+two consecutive years, from the next day following the date of approval of the proposal not paying the agreed dividend
+for the current year by the Shareholders' General Meeting, preference shareholders shall be entitled to attend and vote
+(together with ordinary shareholders) at the Shareholders' General Meeting. For preference shares the dividend of which is
+non-cumulative, the voting rights shall be temporarily restored until the full payment of the agreed dividend for the current
+year by the Bank.
+Annual Report 2017
+93
+Corporate Governance Report
+Other rights
+2,529,871
+Central China
+15.7
+71,283
+16.2
+2,733
+14.2
+3,710,656
+An extraordinary general meeting should be convened within 2 months from the date when shareholders holding more than
+10% of the voting shares of the Bank, either individually or jointly, request to convene in writing. Proposing shareholders
+shall have the right to request the Board of Directors in writing to convene an extraordinary general meeting. The Board
+of Directors shall make a written response as to whether or not it agrees to convene such a meeting within ten (10) days
+upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles of Association of the
+Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by themselves due to the failure
+of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted from the payment to those
+negligent directors.
+Proposing the convening of an extraordinary general meeting
+Submitting interim proposals for the Shareholders' General Meeting
+During the reporting period, the Bank fully complied with the principles, code provisions and recommended best practices
+stipulated in the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules).
+Annual Report 2017
+91
+Corporate Governance Report
+governance and its leading position across the industry, the Bank received various important domestic and overseas
+corporate governance awards, including the "Asset Corporate Award Platinum Award" by The Asset and the "Best
+Corporate Governance Award" by the 21st Century Business Herald.
+9.7
+Construction of the Organizational Framework of Corporate Governance
+During the reporting period, the Bank appointed and re-appointed some directors and changed the chairman and members
+of some special committees of the Board of Directors to ensure the Bank operated in compliance with laws and regulations.
+The Bank continued to improve the structure of the Board of Directors and further promoted the role of the special
+committees of the Board of Directors in supporting decision-making. Besides, the Bank stepped up efforts in the Group's
+corporate governance, and kept refining the management and control and collaboration mechanism of the Group as well as
+the corporate governance framework, institutional system and working mechanism of its subsidiaries.
+Construction of the Corporate Governance Mechanism
+Shareholders' Rights
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors continuously
+improved its working mechanism in accordance with the priorities of the Bank, deepened the contents and methods of its
+supervision over performance of the Board of Directors and the Senior Management and earnestly conducted the annual
+performance assessment. Financial supervision and supervision over risk management and internal control of the Bank were
+enhanced. The Board of Supervisors effectively fulfilled its important role to corporate governance and promoted the legal
+and compliant operation and sustainable and stable development of the Bank.
+The Bank put into good use the key role of the Board of Directors in strategic decision-making and corporate governance.
+Centering on the objectives of driving sustainable growth in corporate value and creating value for customers and
+shareholders, the Board of Directors forged ahead as guided by strategies, sought progress without compromising stability
+and inherited and innovated in development philosophy, strengthened the enterprise risk management and internal control,
+actively promoted the operational transformation and structural adjustment, kept track of how the strategies, plans and
+decisions were implemented continuously, and made sure the robust operation and healthy development of the Group.
+Supporting rules and regulations for performance standards of the Board of Directors were established and improved to
+ensure the Board of Directors fulfill its duties in accordance with relevant laws and regulations.
+The Bank continuously increased the level of transparency across the Group. It disclosed information in a legal and compliant
+manner, and conducted voluntary information disclosure in an orderly manner. Besides, it also kept introducing more
+information disclosure systems, further improved the group-wide information transmission mechanism, and pushed ahead
+in building teams of professional talents constantly. All of these efforts led to increasingly better management of the Group
+over information disclosure.
+Development of Corporate Governance Regulations
+During the reporting period, pursuant to the applicable laws and regulations including the Company Law and the Guidance
+on Corporate Governance of Commercial Banks issued by CBRC as well as the overall requirement of including the Party
+building work into the articles of association, the Bank amended the Articles of Association, which was approved by CBRC
+after verification. The Bank also amended some governance rules including the Rules of Procedures for the Shareholders'
+General Meeting, the Rules of Procedures for the Board of Directors, the Rules of Procedures for the Board of Supervisors,
+the Working Regulations for the Strategy Committee, the Working Regulations for the Risk Management Committee, the
+Working Regulations for the Compensation Committee, and the Working Regulations for the Related Party Transactions
+Control Committee, as a means to further refine its corporate governance policies.
+92
+ICBC
+Compliance with the Corporate Governance Code
+Corporate Governance Report
+The Bank strengthened enterprise risk management and capital management, and intensified internal control, audit and
+supervision. It continued to improve the enterprise risk management policies, and took multiple measures to enhance
+the Group's risk management capacity; stepped up the capital management, liquidity management and interest rate
+management, with the capital adequacy ratio (CAR) remained stabilized overall; and reinforced the group-wide compliance
+management, kept optimizing the internal control environment, and continued enhancing the auditing service capacity and
+the related supervision and inspection standards.
+Internal Audit
+Senior Management
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Board of Directors
+Audit Committee
+Internal Audit Bureau
+103
+Beijing
+Office
+Shenyang
+Office
+Tianjin
+Office
+Nanjing
+Office
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+Board of Supervisors
+Corporate Governance Report
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines
+issued by five ministries and commissions including MOF, the Guidelines for Internal Control of Listed Companies issued
+by SSE and relevant regulatory requirements of CBRC. No material or significant deficiencies were detected in the Bank's
+internal control system during the assessment. Risks that may arise from ordinary deficiencies are controllable and corrective
+actions have been or are being taken, which have no material impact on the fulfillment of internal control objectives of the
+Bank. The Bank had maintained effective internal control in all material aspects in accordance with the standard system for
+enterprise internal control and relevant rules.
+General Partnership) has audited the effectiveness of the Bank's internal control over financial reporting as at 31 December
+2017 and issued the standardized audit report on internal control. For details, please refer to the websites of SSE and SEHK.
+2/3
+2/2
+8/8
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued
+to strengthen inside information confidentiality management, timely organized the completion of insider lists and regularly
+conducted insider transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be
+involved in dealings in shares of the Bank who have taken advantage of inside information during the reporting period.
+2/2
+8/8
+3/3
+2/2
+8/8
+3/3
+Notes: (1) Supervisors who did not attend the meetings of the Board of Supervisors and the Supervision Committee in person appointed
+other supervisors to attend the meetings and exercise the voting right on their behalf.
+6/8
+(2)
+As approved at the meeting of the Board of Supervisors, the Supervision Committee of the Board of Supervisors was
+canceled on 30 October 2017.
+Securities Transactions of Directors and Supervisors
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries to all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the aforesaid codes of conduct during the
+year ended 31 December 2017.
+Inside Information Management
+Chairman and President
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be separated, and the Chairman shall not
+concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+Mr. Yi Huiman is the Chairman and legal representative of the Bank, who is responsible for leading the Board of Directors
+in considering and formulating business development strategies, risk management, internal control and other significant
+matters of the Bank.
+Mr. Gu Shu is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+Powers and Functions of the Senior Management
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Annual Report 2017
+For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+2/2
+1/3
+5/8
+Corporate Governance Report
+ICBC
+104
+While disclosing the annual report, the Bank also disclosed the 2017 Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2017 (benchmark date). KPMG Huazhen (Special
+Internal Control Evaluation Report and Internal Control Audit
+The internal monitoring and evaluation has remained effective. The Bank created the full-process monitoring system for
+credit assets and emphasized the "one line of defense" duty performance. Besides, it also promoted the development of
+"three lines of defense", strengthened risk governance over the ten major areas, and consolidated the foundation of case
+prevention and control. While reinforcing accountability for non-compliance and remediation of problems, the Bank also
+established the management mechanism for identification of liabilities covering credit and non-credit asset losses.
+The Bank improved the risk management standard remarkably. It continuously promoted the group-level enterprise risk
+management, and reinforced risk control over the overseas institutions, controlled subsidiaries, off-balance sheet businesses
+and major risk-prone areas. A limit management system that covered credit risk, market risk and operational risk was
+established at an accelerated pace, so as to strengthen the Group's control over the consolidated and country risks.
+The control activities became more effective. The Bank steadily advanced the reform on corporate customer credit system
+and mechanism and overhauled the way the loan applications of small and micro enterprises and personal customers
+were reviewed and approved. At the same time, the bank-wide seal reform was introduced, the project of streamlining
+business flows overall kicked off, and the outlets devised innovative mode of service and operation. A sound three-pronged
+approach to regulating staff conduct was improved, which featured "regulations for positive conduct, prohibitions against
+negative conduct and penalties for violations". Besides, the Bank refined its mechanism of putting its policies under lifecycle
+management, and advanced the streamlining of the policies governing its domestic and overseas institutions.
+Information communication has been further streamlined. The Bank put in place sound confidentiality policies, further
+strengthened information security and confidentiality management, and refined the bank-wide information security
+management framework, technical architecture and security protection system. In the meantime, it also worked hard to
+build the enterprise-class data application system and advanced the project engaged in uniform customer labeling and
+customer data governance.
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee and the Related Party Transactions Control Committee under the
+Board of Directors perform the responsibilities of internal control management and review the effectiveness of internal control.
+The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-bureau, which adopt a hierarchical management
+system and are responsible to and report to the Board of Directors. The Head Office and branches have internal control and
+compliance departments which are responsible for the bank-wide organization, promotion and coordination of internal control.
+The internal control environment has been optimized continuously. The Board of Directors, the Board of Supervisors and
+the Senior Management made the most of their functions to strengthen the corporate governance development by the
+standards of the Group. The "Internal Control and Compliance Awareness Year" activity was organized with a view to
+promoting the compliance culture that "compliance is the fundamental of responsibility of the entire staff to keep risks
+under control and ensure efficient operation" and making sure the priority tasks with respect to internal control and
+compliance were conducted and the related mechanisms were put in place.
+Internal Control
+Hui Ping
+Huang Li
+Qu Qiang
+Shen Bingxi
+Supervisor leaving office:
+Qian Wenhui
+Attendances in person/Number of meetings that should be attended
+Supervision
+Committee of
+Shareholders'
+General
+Meeting
+Board of
+Supervisors
+Board of
+Supervisors
+2/2
+8/8
+3/3
+2/2
+Internal Control Evaluation and Defects
+3/3
+SSE Training on Qualifications of Independent Directors
+Supervisor
+ICBC
+Corporate Governance Report
+identification of related parties of the Bank, and heard two reports including the report on related party transactions in 2016
+and the identification of related parties of the Bank in 2016. The Related Party Transaction Control Committee put forward
+comments or suggestions on matters including the improvement of management of related party transactions and inside
+transactions of the Bank.
+Responsibilities of Directors in Respect of Financial Statements
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2016 Annual Report,
+the First Quarterly Report, the Interim Report and the Third Quarterly Report of 2017 as scheduled.
+Term of Directors
+The Bank has strictly complied with the requirements of the exchanges on which the Bank is listed and the Articles of
+Association of the Bank that Directors are elected by the Shareholders' General Meeting with a term of three years, and the
+appointment shall take effect from the date of approval by CBRC. Directors may be re-appointed through re-election at the
+Shareholders' General Meeting after expiry of their term.
+Investigation and Training of Directors
+During the reporting period, the Bank developed the training plan for the Board of Directors, increased training resources,
+and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors in continuing
+to improve their comprehensive quality and ability to perform their duties. During the reporting period, the Directors of the
+Bank complied with relevant regulatory requirements, and attended relevant trainings according to work needs. Besides,
+the Directors of the Bank enhanced their professional level by attending forums and seminars as well as conducting on-site
+investigations in some domestic and overseas peers and affiliates of the Bank.
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+Trainings held by the regulatory institutions:
+•
+Shanghai
+Office
+•
+Beijing Office of CSRC Supervision of Listed Companies in Beijing, Corporate Internal Control Evaluation System
+and Information Technology Development
+100
+Special business trainings of the Bank:
+Performance of the Related Party Transactions Control Committee During the reporting period, the Related
+Party Transactions Control Committee held three meetings, considered two proposals in respect of, among others, the
+Related Party Transactions Control Committee
+Corporate Governance Report
+Performance of the Risk Management Committee During the reporting period, the Risk Management Committee held
+five meetings, considered 17 proposals including the liquidity risk management strategy for 2017, the country risk concentration
+limit for 2017-2018, the Regulations for Enterprise Risk Management, and the liquidity risk appetite of US-based institutions,
+and heard 14 reports on the topics including the Group's AML work for 2016 and the IT risk management for 2016. The Risk
+Management Committee put forward comments or suggestions on matters including institutionalizing of the risk management
+policy mechanism, the Group's AML work and the risk management of institutions in USA. The Risk Management Committee
+held a seminar on IT security. At the meeting, the attendees exchanged opinions on top-level design of information security
+and role of three lines of defense in information security management. At the same time, Chairman of the Risk Management
+Committee visited the US for understanding the progress ICBC institutions operating there had made in implementing the
+EPS and the regulatory opinions issued by the local regulatory authorities for the Bank; the members of the Risk Management
+Committee went to the UK where they learnt about the regulatory compliance of ICBC institutions based in London.
+Examining the risk management system
+The Risk Management Committee is responsible for constantly monitoring and examining the risk management system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. Under the enterprise risk management
+system structure of the Bank, the Risk Management Committee performed its function of examining the Bank's risk
+management system through reviewing and revising the risk strategy, risk management policy, risk appetite and the
+enterprise risk management structure, monitoring and evaluating the setup, mode of organization, work procedures and
+results of risk management departments, regularly assessing the risk policy, risk appetite and enterprise risk management
+status, supervising and assessing risk control activities conducted by the Senior Management members in terms of credit
+risk, market risk, operational risk, liquidity risk, compliance risk, reputational risk and other risks. In accordance with the
+relevant requirements in the Enhanced Prudential Standards on Bank Holding Companies and Foreign Banking Organisation
+established by the Federal Reserve Board, the Risk Management Committee supervised the implementation of the
+US business-related risk management framework and relevant policies. The Board of Directors and the Risk Management
+Committee heard the report made by the Management on the Group's risk management every half year and examined the
+Bank's risk management and internal control system. For details of the risk management, please refer to the section headed
+"Discussion and Analysis Risk Management".
+◆ Nomination Committee
+The Nomination Committee is mainly responsible for making recommendations to the Board of Directors on candidates for
+Directors and Senior Management members, nominating candidates for chairmen and members of special committees of
+the Board of Directors, and formulating the standards and procedures for selection and appointment of Directors and Senior
+Management members as well as the training and development plans for Senior Management members and key reserved
+talents. The Nomination Committee is also responsible for assessing the structure, size and composition of the Board of
+Directors on a yearly basis and making recommendations to the Board of Directors based on the Bank's development
+strategy. As at the disclosure date of the results the Nomination Committee consisted of seven directors, including: Executive
+Director Mr. Gu Shu; Independent Non-executive Directors Mr. Hong Yongmiao, Mr. Or Ching Fai, Mr. Anthony Francis
+Neoh and Mr. Yang Siu Shun; and Non-executive Directors Mr. Fei Zhoulin and Mr. Ye Donghai. Independent Non-executive
+Director Mr. Hong Yongmiao was the chairman of the committee.
+The Articles of Association of the Bank specifies methods and procedures to nominate Directors. Please refer to Article 118
+of the Articles of Association. During the reporting period, the Bank appointed and renewed the appointments of Directors
+of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews the
+qualifications of candidates for Directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+Committee shall pay attention to the complementarity of the candidates in terms of expertise, professional competence
+and experience, cultural and educational background, gender, etc., to ensure the members of the Board of Directors are
+well equipped, experienced and have diversified perspectives and views. In order to implement the diversity policy, the
+Nomination Committee assesses the improvement of diversified composition of the Board of Directors during the course of
+its yearly assessment on the framework, number of Directors and composition of the Board of the Directors, and discusses
+and designs measurable goals according to actual conditions. As at the disclosure date of the results, there were six
+Independent Non-executive Directors, accounting for more than one third of the total members of the Board of Directors;
+Annual Report 2017
+99
+Corporate Governance Report
+and there were two female Directors. The Bank attached importance on diversified sources and backgrounds of Directors
+and continued the efforts to enhance the professionalism of the Board of Directors, thus laying the foundation for the
+effective operation and scientific decision-making of the Board of the Directors.
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held four
+meetings, considered six proposals including the proposals on the nomination of Ms. Mei Yingchun, Mr. Dong Shi,
+Mr. Ye Donghai and Mr. Anthony Francis Neoh as candidates for Directors and heard the report on the framework of the
+Board of Directors in 2016. The Nomination Committee put forward comments or suggestions on matters including the
+recommendation and nomination of candidates for Directors, the assessment of the framework of the Board of Directors and
+the candidates for chairmen and members of special committees under the Board of Directors.
+◆ Compensation Committee
+The Compensation Committee is mainly responsible for formulating assessment measures on the performance of duties
+and compensation plans for Directors, organizing the assessment on the performance of duties of Directors, putting forth
+proposal on remuneration distribution for Directors, formulating and reviewing the assessment measures and compensation
+plans for Senior Management members of the Bank and evaluating the performance and behaviors of Senior Management
+members. As at the disclosure date of the results, the Compensation Committee consisted of seven directors, including:
+Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Shen Si, Mr. Or Ching Fai, Mr. Anthony Francis
+Neoh and Mr. Yang Siu Shun; and Non-executive Directors Ms. Mei Yingchun and Mr. Dong Shi. Independent Non-executive
+Director Mr. Shen Si was the chairman of the committee.
+Performance of the Compensation Committee During the reporting period, the Compensation Committee held three
+meetings, considered three proposals on the payment of remuneration to Directors, Supervisors and Senior Management
+members for 2016 and the 2017 performance evaluation plan for Senior Management members, etc., and heard the 2016
+assessment report on the performance of duties of the Directors by the Board of Directors. The Compensation Committee
+put forward comments or suggestions on matters including improvement of the compensation incentive mechanism.
+The Compensation Committee organized the performance assessment of Directors, and put forth proposal on remuneration
+distribution for Directors and submitted the same to the Shareholders' General Meeting after the approval of the Board
+of Directors. It also formulated and reviewed the assessment measures and compensation plans for Senior Management
+members of the Bank and evaluated the performance and behaviors of Senior Management members, results of which
+were submitted to the Board of Directors or the Shareholders' General Meeting, if falling into the responsibilities of the
+Shareholders' General Meeting, for approval. According to applicable regulations including the Measures on the Assessment
+of Performance of Duties of Directors in Commercial Banks (Trial) issued by CBRC, the Articles of Association and the Rules
+on the Assessment of Performance of Duties of Directors by the Board of Directors (Revision in 2016) of the Bank, the
+Compensation Committee organized the performance assessment of Directors by the Board of Directors for 2016.
+The Related Party Transactions Control Committee is mainly responsible for developing the basic policies governing the
+management of related party transactions, identifying the Bank's related parties, approving related party transactions and
+other related matters within the authority granted by the Board, receiving related party transaction statistics for filing purpose,
+reviewing the related party transactions that are subject to the approval of the Board of Directors or the Shareholders' General
+Meeting, and reporting to the Board of Directors on the implementation of the related party transaction management policies
+as well as the conditions on these transactions. As at the disclosure date of the results, the Related Party Transactions Control
+Committee consisted of four directors, including: Executive Director Mr. Wang Jingdong, and Independent Non-executive
+Directors Mr. Yang Siu Shun, Mr. Or Ching Fai and Mr. Hong Yongmiao. Independent Non-executive Director Mr. Yang Siu
+Shun was the chairman of the committee.
+•
+Corporate Governance
+• Asset Management
+During the reporting period, the Board Secretary of the Bank attended the relevant specialized trainings, with the training
+hours over 15 hours, which meets relevant regulatory requirements.
+Independence and Performance of Duties of Independent Non-executive Directors
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the
+Bank or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the
+annual confirmation on independence from all Independent Non-executive Directors and considered that they were
+independent.
+During the reporting period, the Bank's Independent Non-executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, gave independent opinions during consideration of issues, and provided
+recommendations on areas such as strategic management, business transformation, innovative development, corporate
+governance, risk management, internal control management and capital management of the Bank. During the adjournment,
+Independent Non-executive Directors of the Bank conducted on-site investigations in terms of the implementation of
+international strategy of the Bank, the impacts of changes in international conditions on the operation of overseas
+institutions, the implementation of regulatory standards and the compliance management conditions. Additionally, they
+also proactively exchanged opinions with the Management during special-topic discussions. During the reporting period,
+the Bank's Independent Non-executive Directors put forward comments and suggestions in respect of corporate governance
+and strategy implementation. Their suggestions were about how to manage new-type risks efficiently, balance the relations
+between capital adequacy and capital utilization properly, and promote the development of financial technologies. The Bank
+paid close attention to the relevant comments and suggestions, and organized the implementation thereof according to the
+actual conditions.
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of the
+Board of Directors and special committees of the Board of Directors.
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting period,
+please refer to the Work Report of Independent Non-executive Directors for 2017 issued by the Bank on 27 March 2018.
+Board of Supervisors
+Composition of the Board of Supervisors
+As at the disclosure date of the results, the Board of Supervisors of the Bank consisted of five members, including one
+Shareholder Supervisor, namely Mr. Zhang Wei, two Employee Supervisors, namely Mr. Hui Ping and Mr. Huang Li, and two
+External Supervisors, namely Mr. Qu Qiang and Mr. Shen Bingxi.
+Meetings of the Board of Supervisors
+During the reporting period, the Board of Supervisors held eight meetings, reviewed 20 proposals including the 2016
+audited accounts, annual report and its abstract, the reports on performance assessment, supervision of the Board of
+Supervisors, development strategy assessment, internal control assessment, 2017 quarterly reports and interim report, the
+amendments to the Articles of Association and Rules of Procedures for the Board of Supervisors, heard 24 reports on the
+strategic plan implementation, remuneration management, AML work conditions, supervision by the Supervisory Board
+Office, and reviewed 11 documents including documents on 2016 related party transactions, internal audit, internal control
+and compliance and group consolidation management. The Supervision Committee of the Board of Supervisors held three
+meetings which reviewed five proposals and listened to nine reports.
+102
+ICBC
+Corporate Governance Report
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+Training of Board Secretary
+Corporate Governance Report
+101
+Annual Report 2017
+⋅
+Retail Banking
+•
+Corporate Banking and Investment Banking
+•
+Risk Management
+•
+Current supervisors:
+Zhang Wei
+IT Risk
+Capital Management
+Introduction trainings for newly-appointed directors of the Bank:
+Introduction to Corporate Governance and Operation of the Board of Directors
+•
+Special Training on Businesses of the Bank
+•
+Introduction to External Regulatory Requirements and Matters to Note during Tenure of Office
+•
+Wuhan
+Office
+105
+Guangzhou Kunming
+Office
+Office
+For details on the distribution of dividends on preference shares of the Bank, please refer to "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders - Preference Shares".
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+30.3
+30.5
+30.5
+Cash dividends (pre-tax, in RMB millions)
+83,150
+83,506
+85,823
+2.333
+2.343
+2.408
+2015
+2016
+2017
+ICBC
+Percentage of cash dividends (1) (%)
+108
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing business growth of the Bank.
+Annual Report 2017
+107
+Report of the Board of Directors
+The formulation and implementation of the Bank's cash dividend policy, which has been reviewed and approved by
+the Independent Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the
+requirements provided in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and
+proportion are clear and explicit, and the decision-making procedure and mechanism are complete. Minority shareholders
+can fully express their opinions and appeals, to completely safeguard their legitimate rights.
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2017 are set out in
+"Note 42. to the Financial Statements: Reserves" of this Annual Report.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2017 is set
+out in the section headed "Financial Highlights" of this annual report.
+Donations During the reporting period, the Group made external donations of RMB77,919,500 equivalent.
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2017 are set out in the sections headed
+"Discussion and Analysis - Business Overview" and "Note 28. to the Financial Statements: Investments in Subsidiaries" in
+this annual report.
+Share Capital and Public Float
+Changes in the share capital of the Bank for the year ended 31 December 2017 are set out in "Note 40. to the Financial
+Statements: Share Capital".
+As at the latest practicable date before the publication of this annual report, the Bank has maintained the minimum public float of
+23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the Bank.
+Purchase, Sale or Redemption of Securities During the reporting period, neither the Bank nor any of its
+subsidiaries purchased, sold or redeemed any listed securities of the Bank.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining approval
+of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public offering,
+issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods as
+allowed by applicable laws and administrative regulations or approved by relevant authorities.
+Major Customers In 2017, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank during the year.
+Use of Proceeds from Fundraising Activities
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile take account of the long-term interests of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be substantiated and proved in detail and presented
+in a written substantiating report for Independent Non-executive Directors to issue their opinions, and then the report will be
+submitted to the Shareholders' General Meeting for approval as a special resolution.
+Xi'an
+Office
+Facsimile: 86-10-66107571
+The Bank made constant and extensive communication with institutional investors and minority investors through press
+conference in relation to periodic results, non-transactional road shows at home and abroad, reverse road shows, press
+conferences with large institutions, investor hotline, investor relations mailbox, investor relations column on the website
+of the Group and the online platform of sseinfo.com, which enhanced investors' confidence in economic development
+of China and the operational transformation of the Bank and helped to bring the market value in line with the long-
+term intrinsic value of the Bank. The Bank improved investor relations information collection and market information
+feedback transmission mechanism, strengthened dynamic monitoring of share price valuation, analyst reports and media
+public opinions, followed and analyzed spotlight issues of the capital market, and effectively enhanced the quality of
+communication with the investors. The Bank actively understood and solicited the comments and suggestions of the
+capital market on the Bank and encouraged the Management to provide timely responses using various operation and
+communication strategies, so as to continuously strengthen the level of corporate governance and core values of the Bank.
+In 2018, the Bank will further and proactively deepen the communication and exchange with investors to enhance investors'
+understanding and recognition of the Bank and protect legitimate interests of the investors, and at the same time hope to
+receive more support from, and attention of, the investors.
+In 2017, the Bank strove to improve the quality of investor relations services and generate stable return to shareholders
+following the principle of serving investors in a proactive, accurate, coordinated and efficient manner.
+Overview of Investor Relations Activities in 2017
+Investor Relations
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as tax advisory
+services and the professional services for the bonds issuance, and received RMB8 million for such professional non-audit services.
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB197 million for the
+audit of financial statements (including the audit of financial statements of subsidiaries and overseas branches), of which,
+RMB136 million (including fee for internal control audit of RMB11.50 million) was paid by the Bank.
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for five consecutive years (2013, 2014,
+2015, 2016 and 2017).
+Investor Enquiries
+KPMG Huazhen LLP was the domestic auditors of the Bank for the financial statements audit in 2017, and KPMG was the
+international auditors of the Bank for the financial statements audit in 2017. KPMG Huazhen LLP was also the auditors of
+internal control of the Bank in 2017.
+During the reporting period, internal audit of the Bank actively adapted to the changes in the risk management conditions,
+pushed forward the functional optimization and professional innovation, refined the group-wide audit management
+framework, improved the audit methods and procedures, diversified the mix of audit products, optimized the allocation
+of audit resources, advanced the preparations for IT-based audit process, intensified efforts in organizing professional
+qualification programs and project-specific trainings, deepened the professional development of teams, and constantly
+enhanced the audit service capacity and professionalism.
+Corporate Governance Report
+Annual Report 2017
+During the reporting period, the Bank acted on the regulatory requirements of the industry, implemented risk-oriented audit
+activities and fully accomplished the annual audit plan according to the development strategy and central tasks of the Bank.
+The audit activities covered main aspects of operation and management, such as credit business, financial benefit, customer
+services, mega retail strategy, mega asset management strategy, informatisation strategy, overseas institutions, capital
+management and duty performance of Senior Management members in their tenure of office. The audit activities paid close
+attention to credit risk, market risk, liquidity risk, regional risk and financial innovation risk under the complicated operating
+circumstances as well as systematic and strategic risks in the process of diversified and internationalized development. The
+audit activities supervised and assessed the quality and effect of the compliance with regulatory requirements, implementation
+of major strategies, management of major risks and intensified internal control by some institutions and in main business
+areas of the Group, putting forward the audit suggestions of strengthening risk controls and improving business operations.
+The audit results were sufficiently valued and used, and played their due role in pushing the Bank to improve its management
+mechanisms in all fields, advance its reform and development, and put various risks under efficient control.
+Secondary reporting line
+Primary reporting line
+Chengdu
+Office
+Engagement of Auditors
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Formulation and Implementation of Cash Dividend Policy
+As approved at the Annual General Meeting for the Year 2016 held on 27 June 2017, the Bank has distributed cash
+dividends of about RMB83,506 million, or RMB2.343 per ten shares (pre-tax), for the period from 1 January 2016 to
+31 December 2016 to the ordinary shareholders whose names appeared on the share register after the close of market on
+10 July 2017.
+is located at Room 1712-1716, 17 Floor, Hopewell Center, 183 Queen's Road East, Wanchai, Hong Kong at or before
+4:30 p.m. of 6 July 2018. Pursuant to relevant regulatory requirements and operational rules, dividends on A shares and
+H shares will be paid on 13 July 2018 and 6 August 2018, respectively.
+-
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.408 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2017, totaling about RMB85,823 million. The distribution plan will be submitted for
+approval to the Annual General Meeting for the Year 2017. Once approved, the above-mentioned dividends will be paid
+to the holders of A shares and H shares whose names appeared on the share register of the Bank after the close of market
+on 12 July 2018. The Bank will suspend the registration procedures of H share ownership transfer on 7 July 2018 (inclusive)
+through 12 July 2018 (inclusive). The holders of H shares of the Bank that desire to receive the proposed cash dividends
+but have not registered the ownership transfer documents are requested to hand over their ownership transfer documents
+together with the H shares to the Bank's H share registrar Computershare Hong Kong Investor Services Limited that
+E-mail: ir@icbc.com.cn
+The profit and financial status of the Bank during the reporting period are presented in the Independent Auditor's Report
+and Financial Statements of the Annual Report.
+The Bank had no plan for converting capital reserve to share capital in the recent three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the recent three years:
+Profits and Dividends Distribution
+Principal Business The principal business of the Bank and its subsidiaries is the provision of banking and related
+financial services. Please refer to the section headed "Discussion and Analysis" for the business review of the Bank.
+Report of the Board of Directors
+ICBC
+106
+Postal code: 100140
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+113
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank for recovering non-performing
+loans. In addition, some legal proceedings arose from customer disputes. As at 31 December 2017, the amount of pending
+proceedings in which the Bank and/or its subsidiaries acted as defendants totaled RMB4,496 million. The Bank does not
+expect any material adverse effect from the above-mentioned pending legal proceedings on the Bank's business, financial
+position or operating results.
+Material Assets Acquisition, Sale and Merger During the reporting period, the Bank had no material assets
+acquisition, sale and merger.
+Save as disclosed above, the Board of Supervisors had no objection to other supervision matters during the reporting period.
+Annual Report 2017
+Significant Events
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+act that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's purchase
+or sale of assets.
+Review of the Internal Control Assessment Report The Board of Supervisors reviewed the 2017 Internal Control
+Assessment Report of the Board of Directors and had no objection to the report.
+Report of the Board of Supervisors
+Work of the Board of Supervisors
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations, regulatory requirements
+and the Articles of Association, focused on the central tasks of the Bank on reform and development, performed supervision
+duties earnestly, carried out supervision on an in-depth manner in duty performance and due diligence, financial activities,
+risk management and internal control, etc., promoted the improvement in corporate governance and the legal, compliant
+and prudent development.
+Financial supervision. The Board of Supervisors paid close attention to financial activities and decisions on material
+financial issues and their implementation. It carefully reviewed periodic reports, regularly heard reports on business
+conditions and review results, conducted spot checks on major accounting issues, verified the authenticity of financial
+information, and issued independent opinions in an objective and fair manner. It strengthened financial supervision and
+inspection, regularly analyzed the changes in financial data, organized and carried out financial inspection on relevant
+branches, urged them to carry out rectification, promoted the enhancement of financial management, and regulated
+financial behavior. It conducted research on the allocation of financial resources, paid close attention to the formulation
+of business plans, transmission of assessment targets and the link between assessment results and financial resources
+to improve the effectiveness of financial resources allocation mechanisms. It strengthened supervision on centralized
+procurement, conducted spot checks on centralized procurement of some branches, further regulated procurement
+practices, and conducted research on the building, development and application of the e-commerce procurement platform
+"ICBC Mall" to promote the improvement of operation mechanism of centralized procurement for the e-commerce
+platform.
+Supervision on risk management. The Board of Supervisors paid close attention to the effectiveness of the Group's
+risk management mechanism and the soundness of the management structure, and promoted the improvement of
+the risk management. It strengthened supervision on enterprise risk management, and continued to pay attention
+to the establishment and improvement of enterprise risk management system and mechanism, risk management
+of consolidated institutions, management of cross and transmissional risks, adjustment of regulatory policies and
+rules, and impact on the Bank's business. It strengthened the supervision on main material risks, carried out research
+on concurrent management of re-extension of repaid existing loans and incremental loans, management of non-
+performing assets, management and disposal of entrusted assets, and continuously monitored credit risk, market risk
+and liquidity risk management. It paid close attention to key business risk management, analyzed the risk management
+of key businesses such as inter-bank business, private banking, wealth management and inclusive finance, and
+conducted research on small and micro financial businesses to promote further improvement of top-level design and
+risk management models for small and micro businesses. It strengthened the supervision on capital management,
+paid attention to the trends of international capital supervision reforms, conducted research on risk-weighted asset
+management, and promoted the improvement of capital management.
+Annual Report 2017
+111
+Report of the Board of Supervisors
+Supervision on internal control. The Board of Supervisors paid close attention to the internal control management
+system and mechanism, strengthened the supervision on internal control of key institutions and important business areas,
+and promoted legal and compliant operation and management. It strengthened the supervision on internal control system,
+and continued to pay attention to the establishment and improvement of internal control system, the sorting-out and
+improvement of business rules and management rules, duty performance of the "three defense lines", and the building
+and improvement of compliance management systems for overseas institutions. It strengthened the internal control and
+supervision of important businesses, paid close attention to the internal control of key areas such as rules and processes of
+new business and new products and internal control of key links, conducted research on the management of bill business,
+and paid attention to the management mode and process control of bill business. It strengthened supervision of problem
+rectification, conducted research on the implementation for rectification of inspection findings, understood the management
+mechanism, control processes, information communication and implementation of findings rectification, etc., and promoted
+the improvement of rectification mechanism. It reviewed the internal control assessment report, paid attention to the
+implementation and quality control of the internal control assessment, emphasised on supervising the identification,
+reporting, correction and accountability of internal control deficiencies, and issued review opinions.
+Implementation of Information Disclosure Management Rules During the reporting period, the Bank performed its
+duty of information disclosure in strict compliance with the regulatory requirements, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed during the
+reporting period was authentic, accurate and complete.
+Strengthening of self-building. The Board of Supervisors organized the annual assessment on the supervisors for
+their performance of duties strictly in accordance with the regulatory requirements and corporate governance rules. The
+members of the Board of Supervisors diligently and faithfully fulfilled their duties, attended the meetings of the Board of
+Supervisors on schedule, earnestly studied and reviewed the proposals and special reports, issued opinions in an objective
+and fair manner, appropriately exercised voting rights, attended meetings of the Board of Directors and meetings of special
+committees as non-voting attendees, attended relevant meetings of Senior Management, invested sufficient time and
+energy, and actively participated in relevant supervision, inspection and research activities. It attached great importance to
+strengthening theoretical learning and summary of experience from practice. It held discussions and exchanges with the
+boards of supervisors of several financial institutions, learned from the relevant experiences of its peers, and participated
+in the training organized by securities regulatory authority in accordance with regulatory requirement, and continuously
+improved its performance capability. External supervisors of the Bank worked for more than 15 working days in the Bank.
+Compliant Operation During the reporting period, the Bank continued to operate in compliance with applicable laws
+and regulations and improve its internal control system, and the decision-making procedures complied with applicable laws
+and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the Senior Management
+earnestly performed their duties, and the Board of Supervisors did not find any violation of laws and regulations, or any act
+that contravened the interests of the Bank in their performance of duties during the reporting period.
+Preparation of Annual Report Preparation and review procedures of this annual report were in compliance with laws,
+administrative regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly,
+accurately and completely.
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+Credit Standing During the reporting period, there has not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor has there been any outstanding debt of significant amount.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any act that infringed upon the interests of the Bank. The approval,
+voting, disclosure and implementation of connected transactions complied with applicable laws and regulations and the
+Articles of Association of the Bank.
+Implementation of Resolutions Passed at the Shareholders' General Meeting During the reporting period, the Board
+of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders' General
+Meeting for consideration. The Board of Directors earnestly implemented the resolutions approved at the Shareholders'
+General Meetings.
+112
+ICBC
+Report of the Board of Supervisors
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Implementation of Share Incentive Plan and Employee Stock Ownership Plan during the
+Reporting Period During the reporting period, the Bank did not implement any share incentive plan or employee
+stock ownership plan.
+Annual Report 2017
+Environmental Information Please refer to the section headed "Social Responsibility" for the details of the Bank's
+environmental information during the reporting period.
+term
+No specific
+November 2010/
+Shareholders'
+Head Office Departments, Profitability Units and
+Directly Controlled Institutions of the Head Office
+Internal Audit Bureau
+Internal Audit
+Sub-bureau
+Related Party
+Transactions Control
+Committee
+Compensation
+Committee
+Committee
+Nomination
+Audit Committee
+Strategy
+Committee
+Risk
+Management
+Committee
+Legal document
+under which
+the commitment
+is made
+Prospectus of
+Industrial and
+Commercial
+Bank of China
+Limited on
+Initial Public
+Offering
+(A Share)
+Board of Directors' Office
+Organizational Chart
+117
+Annual Report 2017
+On 30 August 2017, the Board of Directors of the Bank approved the establishment of ICBC Aviation Leasing Company
+Limited (the company name subject to final registration) in Hong Kong by ICBC Financial Leasing Co., Ltd., a wholly-owned
+subsidiary of the Bank. ICBC Aviation Leasing Company Limited would be wholly-owned by ICBC Leasing. CBRC approved
+the establishment of ICBC Aviation Leasing Company Limited in Hong Kong in March 2018.
+ICBC Aviation Leasing Company Limited
+On 14 September 2017, the CBRC approved the opening of ICBC Investment, a wholly-owned subsidiary of the Bank, and
+granted a financial license to it. According to the reply of the CBRC, ICBC Investment, with the place of incorporation in
+Nanjing, had a registered capital of RMB12.0 billion, and mainly engaged in debt-for-equity swap and supporting business.
+On 26 September 2017, ICBC Investment completed the industrial and commercial registration, and commenced operation
+officially.
+ICBC Financial Asset Investment Co., Limited
+Significant Events
+Updates on Significant Events
+ICBC
+116
+During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior Management members and
+controlling shareholders was subject to any investigation by competent authorities, coercive measures taken by judicial
+authorities or disciplinary inspection departments, transferred to judicial authorities or charged for criminal responsibility,
+case filing investigation or administrative penalty by CSRC, restricted access to market, identification as unqualified, major
+penalty by other administrative authorities of environmental protection, safety supervision, taxation, etc. or public reprimand
+by the stock exchanges.
+Penalties
+and did not
+do anything in
+violation of the
+commitment.
+Board of Directors
+Prospectus
+on A Share
+Rights Issue of
+Industrial and
+Commercial
+Bank of China
+Limited
+Commitment
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or
+the listing place of the Bank, Huijin
+will not engage in or participate in any
+competitive commercial banking business
+including but not limited to granting
+loans, attracting deposits and providing
+settlement, fund custody, bank card
+and money exchange services. However,
+Huijin can engage in or participate in
+some competitive businesses by investing
+in other commercial banks. In this regard,
+Huijin has committed that it will (1) fairly
+treat the investments in commercial
+banks and will not make any decision or
+judgment that will have adverse impact
+on the Bank or be beneficial to other
+commercial banks by taking advantage
+of the status of being a shareholder of
+the Bank or information obtained by
+taking advantage of the status of being a
+shareholder of the Bank; and (2) perform
+the shareholders' rights for the maximum
+interests of the Bank.
+Key Audit Issues The Audit Committee has reviewed the key audit issues in the audit report and concluded it is
+unnecessary to provide a supplementary explanation.
+Material Related Party Transactions
+During the reporting period, the Bank did not enter into any material related party transactions.
+Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+114
+ICBC
+Significant Events
+Material Contracts and Performance of Obligations thereunder
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material sub-contract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's assets, which were subject to disclosure.
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needs to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and CBRC.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies (Zheng Jian Fa [2003] No. 56) issued by CSRC
+and relevant provisions of SSE, we, in the capacity of Independent Non-executive Directors of the Bank, reviewed
+external guarantees of the Bank on the principles of fairness, impartiality and objectivity, and hereby give our specific
+explanation and opinions as follows: upon review, external guarantees provided by the Bank mainly focus on issuance
+of letters of guarantee, which is part of the ordinary banking services within the business scope of the Bank as
+approved by PBC and CBRC. As at 31 December 2017, the balance of letters of guarantee issued by the Bank totaled
+RMB498,877 million.
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Or Ching Fai, Hong Yongmiao, Anthony Francis Neoh, Yang Siu Shun,
+Sheila Colleen Bair and Shen Si
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders and other related parties of the Bank occupied any fund of the Bank. The
+auditors have issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related
+Parties of Industrial and Commercial Bank of China Limited in 2017.
+Yi Huiman
+Chairman
+115
+Save as disclosed above, neither the Bank nor any of its other related parties made any commitments.
+Fulfillment of
+commitment
+As at 31
+December 2017,
+Huijin strictly
+fulfilled the above
+commitment
+term
+October 2006/
+No specific
+competition
+of non-
+Performance of the Poverty Relief Social Responsibility Please refer to the section headed "Social
+Responsibility" for the details of the Bank's poverty-relief social responsibility performance during the reporting period.
+Commitment
+Time and term of
+commitment
+Type of
+Shareholder
+Huijin
+As at 31 December 2017, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Commitments
+Significant Events
+commitment
+By Order of the Board of Directors
+Supervision on the performance of duties. The Board of Supervisors supervised duty performance constantly. It
+supervised the Board of Directors, Senior Management and their members on their compliance with the laws and
+regulations, the Articles of Association and rules of the Bank, and the implementation of the resolutions of the Shareholders'
+General Meeting and the Board of Directors and the regulatory opinions. It paid close attention to the duty performance
+and due diligence of the Board of Directors and the Senior Management in corporate governance, development strategy
+and operation and management. It carried out duty performance assessment, conducted individual interviews with members
+of the Board of Directors and the Senior Management, general managers of the related Head Office departments and
+profitability units, and then formulated its assessment opinions on the duty performance of the Board of Directors, the
+Senior Management and their members in combination with their day-to-day duty performance supervision. It improved the
+application of assessment results, provided the duty performance assessment opinions to Directors and Senior Management
+members in a timely manner, and facilitated their legal and compliant duty performance and due diligence. It performed
+strategic assessment, assessed how scientific, reasonable and effective the Bank's development strategies were, and
+conducted research on the progress of achieving the targets and tasks of development strategies as well as the problems in
+implementing the strategies so as to put forward comments and suggestions and further strengthen its ability to manage
+strategies.
+110
+Channel
+Management
+Department*
+Department
+Corporate Strategy and
+Investor Relations
+Asset & Liability
+Management
+Department
+Human Resources
+Department
+Finance & Accounting
+Department
+Pension Business
+Department
+Special Financing
+Department
+(Banking Department)
+ICBC
+Precious Metal
+Business Department
+Legal Affairs
+Department (Consumer
+Protection Office)
+Private Banking
+Department
+Internal Control &
+Compliance
+Department
+International
+Banking
+Department*
+Credit Approval
+Department
+Management
+Department
+ICBC Bills Discounting
+Department
+Asset Custody
+Department
+Investment Banking
+Department
+Department*
+118
+Data Center
+(Shanghai)
+Product Innovation
+Management
+Department*
+Information
+Management
+Department
+Corporate
+Culture
+Department
+Directly Controlled
+Party Committee
+Notes: 1. Internet Finance Department includes Innovation Research & Development Center, User Development
+Center and Operation Support Center.
+ICBC
+2. Channel Management Department includes Remote Banking Center.
+3. International Banking Department includes International Settlement Documentation Center.
+Software
+Development Center
+4. Production Innovation Management Department includes Production Research & Development Center.
+Discipline
+Enforcement
+Department
+Security Department
+Retired Staff
+Management
+Department
+Staff Union Working
+Committee
+Directly
+Controlled
+Institutions
+Changchun Institute
+of Financial Managers
+Hangzhou Institute
+of Financial Managers
+Data Center (Beijing)
+Urban Finance
+Research Institute
+Internet Finance
+Risk Management
+Department
+Settlement & Cash
+Management
+Department
+Equity-linked Agreement There is neither any agreement to which the Bank is a party, any options to subscribe
+shares, nor any securities convertible to shares of the Bank that requires the Bank to issue shares. In addition, there is no
+securities offering holders the right to subscribe shares of the Bank, the employee participation plan or share option plan,
+etc. as required by the disclosure requirements of the Hong Kong Listing Rules.
+Management Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Directors' and Supervisors' Interests in Transactions, Agreements or Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Bank.
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors and Supervisors to acquire benefits by means of the acquisition of shares in or
+debentures of the Bank or any other body corporate.
+and
+Interests in Shares, Underlying Shares, and Debentures Held by Directors
+Supervisors As at 31 December 2017, Mr. Zhang Hongli, Executive Director of the Bank, held 2,000 H shares of the
+Bank, and the spouse of Mr. Or Ching Fai, Independent Non-executive Director of the Bank, held 1,316,040 H shares of the
+Bank. Save as above, as at 31 December 2017, none of the Directors or Supervisors of the Bank had any interests or short
+positions in the shares, underlying shares or debentures of the Bank or any of its associated corporations (as defined in Part
+XV of the Securities and Futures Ordinance of Hong Kong) which have to be notified to the Bank and SEHK under Divisions 7
+and 8 of Part XV of the Securities and Futures Ordinance of Hong Kong (including interests or short positions therein
+that they shall be deemed to have pursuant to such provisions of the Securities and Futures Ordinance of Hong Kong), or
+any interests or short positions which have to be recorded in the register under Section 352 of the Securities and Futures
+Ordinance of Hong Kong, or any interests or short positions which have to be notified to the Bank and SEHK pursuant
+to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong
+Listing Rules.
+Connected Transactions
+In 2017, the Bank carried out standardized management of the Group's connected transactions in strict accordance with the
+regulations of CBRC and CSRC as well as listing rules in Shanghai and Hong Kong.
+During the reporting period, the Bank had no connected transaction to be submitted to the Board of Directors or the
+Shareholders' General Meeting for review, and all connected transactions occurred complied with the Listing Rules of the
+Shanghai Stock Exchange and the Hong Kong Listing Rules on disclosure exemptions.
+Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+Annual Report 2017
+109
+Report of the Board of Directors
+Liability Insurance of Directors, Supervisors and Senior Management Pursuant to the Articles
+of Association of the Bank, where conditions permit, the Bank may establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members upon approval of the Shareholders' General Meeting. The Bank will
+use its own assets to compensate each Director, Supervisor and Senior Management member for any liability arising during
+their performance period to the maximum extent permitted by laws and administrative regulations or within the scope not
+prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior Management members are
+otherwise proved to have failed to act honestly or in good faith during their duty performance. During the reporting period,
+the Bank renewed liability insurance for Directors, Supervisors and Senior Management members.
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank do not relate to one another with respect to finance, business, family, or other material
+relations required to be disclosed.
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved performance assessment system and incentive restriction mechanism. From the perspectives of economic benefit,
+risk cost control and social responsibilities, the Bank adopted a system composed of balanced scorecard-based indicators
+for management and duties allocation based indicators for individuals. The remuneration to the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors and other executives of the Bank has followed the
+State's policies relating to the remuneration reform on executives of central enterprises, which consists of basic annual
+remuneration, performance-based remuneration and incentive income linked to term appraisal. The remuneration to other
+Senior Management members and Shareholder Supervisors consist of basic annual remuneration and performance-based
+remuneration, and part of performance-based remuneration is paid in a deferred manner. The Bank has contributed to
+statutory retirement programs organized by Chinese governmental organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the employees of the Bank. Upon obtaining all applicable approvals, the
+Bank will implement a long-term incentive program. As at 31 December 2017, the Bank did not grant any share appreciation
+rights to any Director, Supervisor, Senior Management member, or other core business personnel designated by the Board of
+Directors.
+Members of the Board of Directors
+Executive Directors: Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong;
+Non-executive Directors: Mr. Cheng Fengchao, Mr. Zheng Fuqing, Mr. Fei Zhoulin, Ms. Mei Yingchun, Mr. Dong Shi and
+Mr. Ye Donghai;
+Independent Non-executive Directors: Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun,
+Ms. Sheila Colleen Bair and Mr. Shen Si.
+For details on the use of funds raised from the issue of preference shares of the Bank, please refer to "Details of Changes in
+Share Capital and Shareholding of Substantial Shareholders Preference Shares".
+Bank Card
+Department
+(ICBC Peony Card
+Center, Consumer
+Credit Finance Center)
+Operation
+Management
+Department
+Profitability
+Units
+Risk
+Management
+Departments
+Corporate
+Marketing
+Management
+Departments
+Senior Management
+General Meeting
+Report of the Board of Directors
+Global Market
+Department
+Credit and Investment
+Executive Office
+IT Department
+Banking
+Department
+Personal Banking
+Department
+Asset Management
+Department
+Institutional Banking
+Department
+Inclusive Finance
+Department
+Comprehensive
+Administration
+Departments
+Supporting
+Departments
+Asset & Liability
+Management Committee
+Board of Supervisors
+Supervisory Board Office
+Institutional Banking
+Promotion Committee
+Investment Banking
+Promotion Committee
+Management Committee Management Committee Management Committee
+Information Technology Financial Assets Service
+Domestic Branches
+Inclusive Finance
+Risk Management
+Committee
+Internet Finance
+Promotion Committee Promotion Committee
+Business and
+Product Innovation
+182
+Overseas Institutions
+185
+27. Financial Investments
+AUDITED FINANCIAL STATEMENTS
+Organizational Chart
+26. Loans and Advances to Customers
+122
+INDEPENDENT AUDITOR'S REPORT
+Pages
+Pages
+CONTENTS
+Financial Statements
+Auditor's Report and
+119
+Annual Report 2017
+Secondary reporting line
+Primary reporting line
+Overseas Center
+(1)
+Tier-one Branches
+(including Directly Controlled Branches)
+(36)
+Banking Departments of Tier-one Branches and
+Tier-two Branches (441)
+Grassroots Branches
+(15,846)
+Domestic Institutions
+Overseas Branches
+and their Institutions
+(48)
+ICBC Leasing
+Domestic Subsidiaries
+and their Branches
+ICBC Credit Suisse
+Asset Management
+ICBC-AXA
+ICBC Investment
+Rural Banks
+Overseas Subsidiaries
+and their Institutions
+(370)
+Retail Banking
+Promotion Committee Promotion Committee
+Annual Report 2017
+Consolidated:
+Our audit procedures to assess the recognition of interests
+in and consolidation of structured entities included the
+following:
+How the matter was addressed in our audit
+We identified the recognition of interests in and
+consolidation of structured entities as a key audit matter
+because of the complex nature of certain of these
+structured entities and because of the judgement exercised
+by management in the qualitative assessment of the terms
+and nature of each entity.
+In determining whether the Group should retain any partial
+interests in a structured entity or should consolidate a
+structured entity, management is required to consider the
+risks and rewards retained, the power the Group is able
+to exercise over the activities of the entity and its ability
+to influence the Group's own returns from the entity.
+These factors are not purely quantitative and need to
+be considered collectively in the overall substance of the
+transactions.
+The Group may acquire or retain an ownership interest in,
+or act as a sponsor to, a structured entity, through issuing
+a wealth management product, an investment fund, an
+asset management plan, a trust plan, a structured lease
+or an asset-backed security. The Group may also retain
+partial interests in derecognised assets due to guarantees
+or securitisation structures.
+Structured entities are generally created to achieve a
+narrow and well defined objective with restrictions around
+their ongoing activities which include providing investment
+services and products to customers and managing the
+Group's assets and liabilities.
+The key audit matter
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 44. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+Recognition of interests in and consolidation of structured entities
+•
+Key audit matters (continued)
+ICBC
+124
+assessing the disclosures in the consolidated financial
+statements in relation to impairment of loans
+and advances to customers with reference to the
+requirements of the prevailing accounting standards.
+assessing the appropriateness of the Group's
+methodology of collective impairment allowances
+and testing the model calculations;
+evaluating the experience, independence,
+competence and integrity of the external valuers
+engaged by the Group to value certain property
+and illiquid collateral. Where possible, we compared
+the valuations with externally derived data such as
+commodity prices and real estate valuations;
+performing credit assessments for the selected
+individually impaired corporate loans and advances
+by assessing the forecast of recoverable cash flows
+through inquiry, applying judgement and our own
+research. We evaluated the timing and means
+of realisation of collateral and considered other
+sources of repayment asserted by management. We
+also evaluated the consistency of management's
+application of key assumptions and compared them
+with our own data sources. Where available, we
+made use of post reporting date information to
+evaluate credit quality with hindsight;
+assessing the impairment allowances for individually
+impaired corporate loans and advances by selecting
+a risk-based sample for credit review. We analysed
+the loan portfolio by industry sector to select
+samples in industries vulnerable to the current
+economic slowdown. We also focused on loans with
+perceived higher risk and selected samples from non-
+performing loans, overdue but performing loans and
+borrowers with negative warning signs or adverse
+press coverage;
+•
+How the matter was addressed in our audit
+Independent Auditor's Report
+making enquiries of management and inspecting
+documents relating to the judgement process over
+whether a structured entity is consolidated or not
+to assess whether the Group has a robust process in
+this regard;
+selecting significant structured entities of each
+key product type and performing the following
+procedures for each structured entity selected:
+inspecting the related contracts, internal
+establishment documents and information
+disclosed to the investors to understand the
+purpose of the establishment of the structured
+entity and the involvement the Group has
+with the structured entity and to assess
+management's judgement over whether the
+Group has the ability to exercise power over
+the structured entity;
+We identified assessing impairment of loans and advances
+to customers as a key audit matter because of the inherent
+uncertainty and management judgement involved and
+because of its significance to the financial results and
+capital of the Group.
+Individual impairment allowances are assessed by
+management once objective evidence of impairment
+becomes apparent in a corporate loan. Management
+exercises judgement in determining the quantum of
+loss based on a range of factors. These include available
+remedies for recovery, the financial situation of the
+borrower, collateral valuation, the seniority of the claim
+and the existence and cooperativeness of other creditors.
+Whilst the Group appoints external valuers for the
+valuation of certain property and other illiquid collateral,
+enforceability, timing and means of realisation also affect
+the ultimate collectability and thereby the amount of
+impairment allowances as at the reporting date.
+The key audit matter
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 26. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers (continued)
+Key audit matters (continued)
+Independent Auditor's Report
+123
+Annual Report 2017
+considering, as part of the procedures above, the
+nature of and reasons for any revisions to the key
+assumptions and input parameters in the models,
+the consistency of judgement applied in the use of
+economic factors, the loss emergence period and the
+observation period for historical losses and assessing
+key internal controls over the input of underlying
+data into the models. We compared the economic
+factors used in the models to market information
+to assess whether they were aligned with market
+and economic development. We also assessed
+the emergence period by tracing the lifecycle of
+overdue accounts from the specific credit event to
+downgrading the account to a non-performing loan;
+historical loss parameters used.
+the overdue statistical data for the personal
+loan portfolios; and
+Refer to the accounting policies on "Note 3. (5) to the Financial Statements: Financial Instruments", "Note 4. to the
+Financial Statements: Significant Accounting Judgments and Estimates" and "Note 55. to the Financial Statements: Fair
+Value of Financial Instruments".
+Fair value of financial instruments
+Key audit matters (continued)
+Independent Auditor's Report
+125
+evaluating the disclosures in the consolidated
+financial statements in relation to the recognition of
+interests in and consolidation of structured entities
+with reference to the requirements of the prevailing
+accounting standards.
+assessing management's judgement over
+whether the structured entity should be
+consolidated or not;
+evaluating management's analysis of the
+structured entity, including qualitative
+analysis and the calculation of the magnitude
+and variability associated with the Group's
+economic interests in the structured entity,
+to assess management's judgement over the
+Group's ability to influence its own returns
+from the structured entity;
+inspecting the risk and reward structure of
+the structured entity, including any capital or
+return guarantee, provision of liquidity support,
+commission paid and distribution of the returns,
+to assess management's judgement as to the
+exposure, or rights, to variable returns from the
+Group's involvement in such an entity;
+Corporate Banking
+28. Investments in Subsidiaries
+To the shareholders of Industrial and Commercial Bank of China Limited
+Statement of Profit or Loss
+22. Financial Assets Held for Trading
+272
+58. Comparative Amounts
+175
+Financial Institutions
+272
+57. After the Reporting Period Event
+21. Due From Banks and Other
+174
+20. Cash and Balances With Central Banks
+271
+Financial Position
+56. Company-Level Statement of
+173
+19. Earnings Per Share
+173
+261
+55. Fair Value of Financial Instruments
+18. Dividends
+176
+226
+59. Approval of the Consolidated
+Financial Statements
+Key audit matters
+We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code") together with any ethical requirements that are
+relevant to our audit of the consolidated financial statements in the People's Republic of China, and we have fulfilled our
+other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis for our opinion.
+Basis for opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Bank and of
+the Group as at 31 December 2017 and of the Group's financial performance and cash flows for the year then ended in
+accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank") and
+its subsidiaries (the "Group") set out on pages 130 to 272, which comprise the consolidated and the Bank's statements of
+financial position as at 31 December 2017, the consolidated statement of profit or loss, the consolidated statement of profit
+or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow
+statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
+Opinion
+(Incorporated in the People's Republic of China with limited liability)
+KPMG
+Independent Auditor's Report
+121
+Annual Report 2017
+182
+25. Reverse Repurchase Agreements
+176
+24. Derivative Financial Instruments
+273
+176
+UNAUDITED SUPPLEMENTARY FINANCIAL
+272
+23. Financial Assets Designated at Fair Value
+through Profit or Loss
+54. Financial Instruments Risk Management
+172
+of the Parent Company
+213
+166
+12. Operating Expenses
+166
+47. Share Appreciation Rights Plan
+214
+13. Directors' and Supervisors' Emoluments
+167
+48. Commitments and Contingent Liabilities
+214
+14. Five Highest Paid Individuals
+171
+49. Designated Funds and Loans
+216
+15. Impairment Losses on Assets Other Than
+50. Assets Pledged as Security
+216
+Loans and Advances to Customers
+171
+46. Transferred Financial Assets
+11. Other Operating Income, Net
+165
+10. Net Gain on Financial Investments
+221
+53. Segment Information
+17. Profit Attributable to Equity Holders
+217
+52. Related Party Disclosures
+172
+16. Income Tax Expense
+217
+51. Fiduciary Activities
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+The key audit matter
+43. Components of Other Comprehensive Income 210
+44. Involvement With Unconsolidated Structured
+Entities
+211
+Designated at Fair Value through
+Profit or Loss
+45. Notes to the Consolidated Cash Flow
+165
+Statement
+213
+Net Loss on Financial Assets and Liabilities
+122
+ICBC
+Independent Auditor's Report
+Statement of Financial Position
+137
+Fair Value through Profit or Loss
+197
+NOTES TO THE FINANCIAL STATEMENTS
+34. Due to Banks and Other Financial
+1.
+Corporate Information
+138
+Institutions
+198
+2.
+Basis of Preparation
+138
+35. Repurchase Agreements
+198
+3.
+Summary of Significant Accounting Policies
+140
+Financial Liabilities Designated at
+Company:
+33.
+135
+130
+Statement of Profit or Loss and
+29. Investments in Associates and
+Joint Ventures
+190
+Other Comprehensive Income
+131
+30.
+Property and Equipment
+192
+36. Certificates of Deposit
+Statement of Financial Position
+31.
+Deferred Income Tax Assets and Liabilities
+193
+Statement of Changes in Equity
+133
+32.
+Other Assets
+196
+Cash Flow Statement
+132
+188
+198
+Significant Accounting Judgements and
+8.
+Net Trading Income
+165
+9.
+the accuracy of the loan grading migration
+data for the corporate loan portfolios;
+economic factors used in the models;
+management
+input parameters involving
+judgement;
+evaluating the validity of the models used and
+assumptions adopted in the Group's calculation of
+the collective impairment allowances by critically
+assessing:
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+approval, recording, monitoring and restructuring
+of loans and advances to customers, the credit
+grading process and the measurement of impairment
+allowances for individually assessed loans and
+advances to customers. In particular, we assessed the
+design, implementation and operating effectiveness
+of the key internal controls over the classification of
+loans by credit quality across all grades;
+Our audit procedures to assess impairment of loans and
+advances to customers included the following:
+How the matter was addressed in our audit
+The determination of the collective impairment allowances
+is dependent on the external macro environment and
+internal credit risk management models. The Group's
+collective impairment allowances for corporate loans and
+advances are derived from estimates including the Group's
+historical losses, the historical emergence period for
+corporate loans and advances (i.e. the time lapse between
+the occurrence of the event causing eventual default to the
+actual recording of a loss) and other adjustment factors.
+The Group's collective impairment allowances for personal
+loans are derived from estimates, including the Group's
+historical overdue data, historical loss experience for
+personal loans and other adjustment factors.
+From the Group's perspective, the portfolios which gave
+rise to the greatest uncertainty in determining impairment
+allowances for loans and advances to customers were
+those where impairments were derived from models
+approximating the impact of external environment and
+credit conditions on large portfolios of loans and advances
+to customers, and assessment of recoverable cash flows.
+relating to individual loans and advances to customers,
+where loans and advances to customers were unsecured or
+were subject to potential collateral shortfalls.
+Impairment of loans and advances to customers is a
+subjective area due to the degree of judgement applied by
+management in determining impairment allowances.
+The key audit matter
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 26. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers
+Key audit matters (continued)
+208
+Reserves
+42.
+165
+37. Due to Customers
+199
+Estimates
+157
+38. Debt Securities Issued
+199
+5. Impact of Issued But Not Yet Effective
+39. Other Liabilities
+203
+4.
+International Financial Reporting Standards
+40. Share Capital
+203
+6.
+Net Interest Income
+164
+41. Other Equity Instruments
+204
+7.
+Net Fee and Commission Income
+159
+Financial instruments carried at fair value account for a
+significant part of the Group's assets. The effect of fair
+value adjustments may impact either the profit or loss or
+other comprehensive income.
+INFORMATION
+The Group has developed its own models to value certain
+level 2 and level 3 financial instruments, which also involve
+significant management judgement.
+Other information
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+Annual Report 2017
+127
+Independent Auditor's Report
+Responsibilities of the directors for the consolidated financial statements
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+Auditor's responsibilities for the audit of the consolidated financial statements
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This
+report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+ICBC
+The valuation of the Group's financial instruments, held
+at fair value, is based on a combination of market data
+and valuation models which often require a considerable
+number of inputs. Many of these inputs are obtained
+from readily available data, in particular for level 1 and
+level 2 financial instruments in the fair value hierarchy, the
+valuation techniques for which use quoted market prices
+and observable inputs, respectively. Where such observable
+data is not readily available, as in the case of level 3
+financial instruments, then estimates need to be developed
+which can involve significant management judgement.
+performing architectural analysis, security
+configuration review and other tests on certain
+aspects of the cyber security on network security
+management mechanism, operational security
+of key information infrastructure, data and
+client information management, monitoring and
+emergency management.
+evaluating the design, implementation and operating
+effectiveness of the significant accounts-related
+IT automated controls which are relevant to the
+accuracy of system calculation, and the consistency
+of data transmission, covering business in corporate
+loans, financial asset service, interbank business,
+bills, retail business and others, as well as key
+accounting procedures.
+128
+and
+assessing the design, implementation
+operating effectiveness of key internal controls
+over the continued integrity of all major IT systems
+fundamental to dealing with the financial data,
+particularly financial reporting.
+Our audit procedures to assess the fair value of financial
+instruments included the following:
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+valuation, independent price verification, front office
+and back office reconciliations and model approval
+for financial instruments;
+assessing the level 1 fair values, on a sample basis, by
+comparing the fair values applied by the Group with
+publicly available market data;
+engaging our internal valuation specialists to assist us
+in performing independent valuations, on a sample
+basis, of level 2 and level 3 financial instruments
+and comparing our valuations with the Group's
+valuations. Our procedures included developing
+parallel models, obtaining inputs independently and
+verifying the inputs;
+engaging our internal valuation specialists to conduct
+model validation, on a sample basis, for the valuation
+of complex financial instruments;
+assessing the appropriate application of Funding
+Value, Credit Value and Debit Value Adjustments
+("FVA/CVA/DVA") that form an integral part of fair
+values, inquiring of management about any changes
+in the FVA/CVA/DVA methodology and assessing the
+appropriateness of the inputs applied; and
+assessing whether the disclosures in the consolidated
+financial statements, including fair value hierarchy
+information and sensitivity to key inputs,
+appropriately reflected the Group's exposure to
+financial instrument valuation risk with reference
+to the requirements of the prevailing accounting
+standards.
+126
+ICBC
+How the matter was addressed in our audit
+Key audit matters (continued)
+We used our internal IT specialists to perform audit
+procedures to assess IT systems and controls over financial
+reporting, which included the following:
+Independent Auditor's Report
+How the matter was addressed in our audit
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are
+fundamentally reliant on complex IT systems and control
+processes which are driven by significant transaction
+volumes caused by the size of the customer base both in
+the corporate and the retail banking businesses in China
+and globally.
+We identified assessing the fair value of financial
+instruments as a key audit matter because of the degree of
+complexity involved in valuing certain financial instruments
+and because of the degree of judgement exercised by
+management in determining the inputs used in the
+valuation models.
+Of particular importance are system calculations and data
+logic regarding significant accounts, including interest
+calculations, as well as interfaces between business
+management systems and accounting systems.
+Automated accounting procedures and IT environment
+controls, which include IT governance, controls over
+program development and changes, access to programs
+and data and IT operations, are required to be designed
+and to operate effectively to ensure accurate financial
+reporting.
+As one of the largest banking groups in the world, the
+Group's IT systems are necessarily large and complex.
+IT systems and controls over financial reporting
+The key audit matter
+Due to the rapid growth of on-line transaction volumes
+and the increasing challenge to protect the integrity of the
+Group's systems and data, cyber security has become more
+significant.
+(In RMB millions, unless otherwise stated)
+(i)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Issued
+Other
+Investment currency
+equity
+Capital
+Surplus
+reserve
+reserve
+General revaluation translation
+reserve reserve
+Cash flow
+hedging
+Non-
+Year ended 31 December 2017
+Other
+share
+capital instruments
+31 December 2017
+133
+Retained
+(194)
+(194)
+(309)
+(309)
+Others
+Balance as at
+(46)
+(46)
+(46)
+(46)
+356,407 86,051 152,043 232,703 264,892 (31,752) (26,302) (3,761) (334) 587,489 1,097,544 2,127,491
+13,565 2,141,056
+(i)
+(ii)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB 107 million and RMB516 million,
+respectively.
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB20 million and RMB477 million,
+respectively.
+The notes on pages 138 to 272 form part of these financial statements.
+Annual Report 2017
+Consolidated Statement of Changes in Equity
+controlling
+(note 43)
+reserve
+(719)
+(923)
+(17,083)
+(17,083)
+(432) (17,515)
+Total comprehensive income
+Dividends-ordinary shares
+2015 final (note 18)
+13,382
+Dividends - preference shares
+(28,823)
+13,382
+(719)
+(923)
+(17,083)
+278,249 261,166
+425
+261,591
+(note 18)
+(28,823)
+shareholders
+Other comprehensive income
+reserve reserves
+Subtotal profits
+Total interests
+equity
+Balance as at 1 January 2016
+356,407 79,375
+152,026
+178,040 246,356 29,956
+(31,432)
+(3,926)
+684
+571,704
+781,988
+1,789,474 11,045
+1,800,519
+Profit for the year
+278,249
+278,249
+857 279,106
+Total
+Dividends to non-controlling
+Dividends-preference shares
+Change in share holding
+Reserves
+Foreign
+Issued
+Other
+Investment currency
+Cash flow
+share equity Capital
+capital instruments
+Surplus
+Attributable to equity holders of the parent company
+Balance as at 1 January 2017
+86,051
+reserve
+152,043
+reserve
+General revaluation translation
+reserve reserve
+hedging
+Retained
+reserve
+reserve
+356,407
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2017
+Consolidated Statement of Changes in Equity
+2,127,491
+1,969,751
+Non-controlling interests
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+13,565
+2,141,056
+26,087,043
+11,412
+1,981,163
+24,137,265
+Yi Huiman
+Chairman
+Gu Shu
+Vice Chairman and President
+The notes on pages 138 to 272 form part of these financial statements.
+132
+ICBC
+Zhang Wenwu
+General Manager of Finance
+and Accounting Department
+205,021 251,349
+1,133
+(18,050)
+(4,645)
+(83,506)
+(83,506)
+(83,506)
+(4,437)
+(4,437)
+(4,437)
+reserve (i)
+Appropriation to general
+27,682
+27,682
+(27,682)
+13,543
+13,543
+(13,543)
+reserve (ii)
+Capital injection by
+non-controlling shareholders
+2,312
+2,312
+Appropriation to surplus
+in subsidiaries
+(note 18)
+2016 final (note 18)
+Profit for the year
+Non-
+Other
+controlling Total
+reserves Subtotal profits Total interests equity
+(221) 586,630 940,663 1,969,751 11,412 1,981,163
+286,049 286,049 1,402 287,451
+Other comprehensive income
+(note 43)
+(32,885)
+(8,252)
+884
+788
+(67)
+(40,320)
+(40,320) (1,058) (41,378)
+Total comprehensive income
+(32,885)
+(8,252)
+884
+(67)
+(40,320) 286,049 245,729
+344 246,073
+Dividends ordinary shares
+(83,150)
+(83,150)
+487
+(4,450)
+Profit before taxation
+Adjustments for:
+Share of profits of associates and joint ventures
+Depreciation
+Amortisation
+364,641
+363,279
+(2,950)
+CASH FLOWS FROM OPERATING ACTIVITIES
+(2,604)
+19,761
+12
+2,114
+2,059
+Amortisation of financial investments
+5,194
+(2,155)
+Impairment losses on loans and advances to customers
+17,958
+2016
+2017
+Notes
+(71)
+(71)
+27
+27
+356,407 86,051 152,043 205,021 251,349
+1,133 (18,050)
+(4,645)
+(221) 586,630 940,663 1,969,751
+11,412
+1,981,163
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB84 million and RMB669 million,
+respectively.
+(ii)
+Includes the appropriation made by subsidiaries in the amount of RMB194 million.
+The notes on pages 138 to 272 form part of these financial statements.
+134
+ICBC
+Consolidated Cash Flow Statement
+Year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+26
+124,096
+86,138
+Impairment losses on assets other than loans and advances
+to customers
+TOTAL ASSETS
+Cash and balances with central banks
+20
+3,548,996
+3,290,270
+Due from banks and other financial institutions
+21
+930,593
+927,705
+Financial assets held for trading
+22
+60,072
+184,074
+Financial assets designated at fair value through profit or loss
+23
+338,257
+272,118
+Derivative financial assets
+24
+Other assets
+27
+Deferred income tax assets
+(345)
+15
+3,673
+1,756
+Unrealised loss/(gain) on foreign exchange
+10,288
+(9,282)
+Interest expense on debt securities issued
+16,219
+14,237
+Accreted interest on impaired loans
+Gain on disposal of available-for-sale financial assets, net
+10
+Net trading gain on equity investments
+608
+(3,189)
+(5,135)
+(2,313)
+(4,202)
+(757)
+Net loss on financial assets and liabilities designated at fair value
+18
+9
+21
+(489,258)
+1,356
+(468,932)
+6,691
+792
+1,520
+943,954
+896,665
+(15,370)
+(13,979)
+(759,095)
+(854,012)
+(194)
+(83,506)
+(83,150)
+(4,437)
+(4,450)
+(309)
+(71)
+81,835
+(50,786)
+1,731
+NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
+940,663
+633
+(4,450)
+(4,450)
+Appropriation to surplus
+reserve (i)
+Appropriation to general
+reserve (ii)
+Capital injection by other
+Repayment of debt securities
+Acquisition of non-controlling interests
+Dividends paid on ordinary shares
+Dividends paid on preference shares
+Net cash flows from financing activities
+(13,096)
+(39,281)
+3,195
+(2,633,240)
+2,850
+2,153,124
+(2,492,693)
+2,059,722
+(1,605)
+(1,373)
+(83,150)
+363,441
+Cash and cash equivalents at beginning of the year
+equity holders
+6,676
+Change in share holding
+in subsidiaries
+Dividends to non-controlling
+shareholders
+Others
+Balance as at
+31 December 2016
+26,981
+26,981
+(26,981)
+4,993
+4,993
+(4,993)
+6,676
+6,676
+8
+13
+Property and equipment
+(280,497)
+31 December 2017 31 December 2016
+ASSETS
+1,189,368
+1,441,298
+Effect of exchange rate changes on cash and cash equivalents
+(32,479)
+28,567
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+Interest paid
+45
+1,520,330
+1,189,368
+891,366
+810,718
+(324,813)
+(317,533)
+The notes on pages 138 to 272 form part of these financial statements.
+136
+ICBC
+Statement of Financial Position
+31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes
+1,097,544
+38
+586,630
+12
+(186,194)
+(193,112)
+Impairment losses on:
+Loans and advances to customers
+Others
+OPERATING PROFIT
+Share of profits of associates and joint ventures
+641,681
+PROFIT BEFORE TAXATION
+PROFIT FOR THE YEAR
+Attributable to:
+Equity holders of the parent company
+Non-controlling interests
+PROFIT FOR THE YEAR
+26
+585
+(124,096)
+Income tax expense
+675,654
+Operating expenses
+OPERATING INCOME
+7
+139,625
+144,973
+Net trading income
+8
+5,753
+6,457
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+9
+(476)
+(104)
+Net gain on financial investments
+10
+2,641
+4,545
+Other operating income, net
+11
+6,033
+13,964
+(86,138)
+15
+(3,673)
+(1,756)
+Details of the dividends declared and paid or proposed are disclosed in note 18 to the financial statements.
+The notes on pages 138 to 272 form part of these financial statements.
+130
+ICBC
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+Year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Profit for the year
+Other comprehensive income (after tax, net):
+Items that will not be reclassified to profit or loss:
+Share of the other comprehensive income of investees
+accounted for using equity method which will not be
+reclassified to profit or loss
+Others
+Items that may be reclassified subsequently to profit or loss:
+Notes
+2017
+287,451
+2016
+279,106
+43
+(29)
+3
+0.77
+NET FEE AND COMMISSION INCOME
+0.79
+0.77
+361,691
+360,675
+2,950
+2,604
+364,641
+363,279
+16
+(77,190)
+(84,173)
+287,451
+279,106
+286,049
+1,402
+287,451
+278,249
+857
+279,106
+EARNINGS PER SHARE
+Basic (RMB yuan)
+Diluted (RMB yuan)
+19
+0.79
+19
+15
+(19,741)
+164,714
+(6,395)
+(106,555)
+Reverse repurchase agreements
+(72,653)
+(69,385)
+Financial assets designated at fair value through profit or loss
+(54,153)
+109,053
+Loans and advances to customers
+Financial assets held for trading
+102,201
+Due from banks and other financial institutions
+(273,546)
+1,477,322
+(208,191)
+Due from central banks
+Net (increase)/decrease in operating assets:
+463,087
+(136,134)
+(1,333,103)
+(1,119,674)
+Other assets
+53,856
+Due to customers
+23,938
+55,903
+Certificates of deposit
+252,115
+457,032
+Repurchase agreements
+63,898
+335
+(290,032)
+(268,057)
+Due to banks and other financial institutions
+58,881
+(89)
+Due to central banks
+Financial liabilities designated at fair value through profit or loss
+Net increase/decrease) in operating liabilities:
+(1,795,252)
+(1,501,830)
+(132,697)
+4,150
+533,745
+(343)
+(328)
+10
+129
+Consolidated Statement of Profit or Loss
+Year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes
+Interest income
+Interest expense
+NET INTEREST INCOME
+Fee and commission income
+Fee and commission expense
+66
+6 7 7
+2017
+861,594
+2016
+791,480
+(339,516)
+(319,634)
+522,078
+471,846
+158,666
+Annual Report 2017
+(19,041)
+27 March 2018
+10 Chater Road
+Dividend income
+(181)
+(1,377)
+other assets (other than repossessed assets)
+Net gain on disposal and overage of property and equipment and
+104
+476
+Independent Auditor's Report
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, related safeguards.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Simon John Edward Gleave.
+KPMG
+Certified Public Accountants
+8th Floor, Prince's Building
+Central, Hong Kong
+Retained profits
+53
+Net loss from change in fair value of available-for-sale
+financial assets
+246,209
+Deferred income tax assets
+31
+48,392
+28,398
+Other assets
+32
+571,669
+247,744
+585,733
+26,087,043
+24,137,265
+LIABILITIES
+Due to central banks
+Financial liabilities designated at fair value through profit or loss
+33
+456
+425,948
+Derivative financial liabilities
+TOTAL ASSETS
+Interest paid on debt securities
+Proceeds from issuance of debt securities
+Capital injection by non-controlling shareholders
+Annual Report 2017
+135
+Consolidated Cash Flow Statement
+Year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes
+2017
+2016
+CASH FLOWS FROM INVESTING ACTIVITIES
+Purchases of property and equipment and other assets
+Proceeds from disposal of property and equipment and
+other assets (other than repossessed assets)
+Purchases of financial investments
+Dividends paid to non-controlling shareholders
+Proceeds from sale and redemption of financial investments
+Investments in associates and joint ventures
+Proceeds from disposal of associates and joint ventures
+Dividends received
+Net cash flows from investing activities
+Proceeds from issuance of other equity instruments
+CASH FLOWS FROM FINANCING ACTIVITIES
+24
+78,556
+545
+366,752
+89,960
+Due to banks and other financial institutions
+39
+603,500
+357,937
+637,830
+TOTAL LIABILITIES
+23,945,987
+22,156,102
+EQUITY
+Equity attributable to equity holders of the parent company
+Share capital
+40
+356,407
+356,407
+Other equity instruments
+41
+86,051
+86,051
+Reserves
+42
+587,489
+Other liabilities
+The notes on pages 138 to 272 form part of these financial statements.
+526,940
+52,640
+604
+34
+1,706,549
+2,016,799
+Repurchase agreements
+35
+1,046,338
+589,306
+Certificates of deposit
+36
+260,274
+218,427
+Due to customers
+37
+19,226,349
+17,825,302
+Income tax payable
+Deferred income tax liabilities
+31
+70,644
+433
+Debt securities issued
+(3)
+239,221
+Net cash flows from operating activities
+261,166
+425
+246,073
+261,591
+The notes on pages 138 to 272 form part of these financial statements.
+Annual Report 2017
+131
+Consolidated Statement of Financial Position
+245,729
+344
+31 December 2017
+Notes
+31 December 2017 31 December 2016
+ASSETS
+Cash and balances with central banks
+Due from banks and other financial institutions
+220
+20
+3,613,872
+(In RMB millions, unless otherwise stated)
+Equity holders of the parent company
+Non-controlling interests
+Total comprehensive income attributable to:
+261,591
+Effective hedging portion of gains or losses arising from
+cash flow hedging instruments
+(33,494)
+(29,449)
+939
+(751)
+Share of the other comprehensive income of investees
+accounted for using equity method which may be
+reclassified subsequently to profit or loss
+(757)
+(860)
+Foreign currency translation differences
+(8,752)
+13,608
+Others
+712
+(75)
+Subtotal of other comprehensive income for the year
+(41,378)
+(17,515)
+Total comprehensive income for the year
+246,073
+3,350,788
+21
+847,611
+797,473
+5,006,699
+Investments in associates and joint ventures
+29
+32,441
+30,077
+Property and equipment
+30
+1,477,846
+Other liabilities
+26,456
+136,604
+1,807,448
+1,664,704
+Net cash flows from operating activities before tax
+839,363
+332,539
+Income tax paid
+(68,499)
+(93,318)
+5,315,766
+770,864
+27
+12,767,334
+Financial assets held for trading
+22
+87,337
+189,331
+Financial assets designated at fair value through profit or loss
+23
+353,601
+285,144
+Derivative financial assets
+24
+89,013
+94,452
+Reverse repurchase agreements
+25
+986,631
+755,627
+Loans and advances to customers
+26
+13,892,966
+Financial investments
+62,892
+9
+25
+Due to customers
+37
+18,560,533
+Income tax payable
+Debt securities issued
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+Share capital
+69,344
+51,051
+38
+194,503
+436,275
+39
+436,376
+481,236
+22,585,711
+20,878,151
+Other equity instruments
+Reserves
+Retained profits
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+40
+356,407
+279,446
+356,407
+221,489
+Certificates of deposit
+47,250
+27,334
+32
+483,090
+479,196
+24,645,112
+22,788,080
+LIABILITIES
+Due to central banks
+404
+Financial liabilities designated at fair value through profit or loss
+33
+36
+407,766
+Derivative financial liabilities
+24
+46,682
+58,179
+Due to banks and other financial institutions
+34
+1,596,232
+1,920,782
+Repurchase agreements
+35
+810,610
+304,987
+379
+352,001
+41
+17,235,587
+79,375
+138
+ICBC
+Reverse repurchase agreements
+through profit or loss
+31
+124,089
+122,387
+30
+34,242
+34,242
+29
+102,288
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4.
+120,301
+4,748,376
+5,029,904
+27
+Investments in associates
+Investments in subsidiaries
+Financial investments
+12,033,200
+13,125,401
+79,375
+Loans and advances to customers
+502,296
+750,763
+28
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial
+instruments, financial assets and liabilities held for trading, financial assets and liabilities designated at fair value through
+profit or loss and available-for-sale financial assets (unless the fair value cannot be reliably measured) that have been
+measured at fair value, as further explained in the respective accounting policies below.
+26
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+(2) Basis of preparation
+42
+601,857
+1,013,320
+872,290
+2,059,401
+1,909,929
+24,645,112
+22,788,080
+Yi Huiman
+Chairman
+Gu Shu
+Vice Chairman and President
+The notes on pages 138 to 272 form part of these financial statements.
+610,299
+General Manager of Finance
+and Accounting Department
+Zhang Wenwu
+2. BASIS OF PREPARATION
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+The Bank's A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong
+Limited and the stock codes are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on the
+Stock Exchange of Hong Kong Limited and the stock codes are 4603, 4604 and 84602, respectively. The Bank's domestic
+preference shares are listed on the Shanghai Stock Exchange and the stock code is 360011.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking Regulatory Commission (the "CBRC")
+of the PRC. The Bank obtained its business license with unified social credit code 91100000100003962T from the State
+Administration for Industry and Commerce of the PRC. The legal representative is Yi Huiman and the registered office is
+located at No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC.
+(1) Statement of compliance
+1. CORPORATE INFORMATION
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+137
+Annual Report 2017
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+(2) Non-controlling interests
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+Subsidiaries are entities controlled by the Group. The Group controls an entity if it is exposed, or has rights, to, variable
+returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
+The Group reassesses whether it has control if there are changes to one or more of the elements of control. This includes
+circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead
+to the Group having power over an entity.
+(1) Subsidiaries
+(3) Associates and Joint ventures
+(In RMB millions, unless otherwise stated)
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses (see
+note 3(21)).
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+140
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see note 3(21)).
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(4) Foreign currency translation
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+Financial Statements for the year ended 31 December 2017
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+An associate is an entity in which the Group or Bank has significant influence.
+Notes to the Financial Statements
+The Group has modified the disclosure of cash flows according to these amendments. The adoption does not have any
+material impact on financial position and financial performance of the Group.
+Annual Report 2017
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(3) Change in accounting policies
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS")) that are
+effective in 2017 and relevant to the Group's operation.
+Amendments to IAS 7
+Amendments to IAS 12
+Statement of cash flows "Disclosure initiative"
+Income taxes "Recognition of deferred tax assets for unrealised
+losses"
+Annual Improvements to IFRSS 2014-2016 Cycle - Amendments to IFRS 12, Disclosure of interests in other entities
+The principal effects of adopting these amended IFRSS are as follows:
+The amendments require entities to provide disclosures that enable users of financial statements to evaluate changes
+in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. The
+amendments do not prescribe a specific method to fulfil the new disclosure requirements. However, the amendments
+indicate that one way is to provide a reconciliation between the opening and closing balances for liabilities arising from
+financing activities.
+Amendments to IAS 12, Income taxes "Recognition of deferred tax assets for unrealised losses"
+The amendments stemmed from a request to clarify the requirements on recognition of deferred tax assets for unrealised
+losses on debt instruments measured at fair value. However, the amendments address a broader area of accounting for
+deferred tax assets in general.
+The amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the
+carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future
+changes in the carrying amount or expected manner of recovery of the asset.
+The amendments also provide guidance on how an entity should determine future taxable profits to support the recognition
+of a deferred tax asset arising from a deductible temporary difference.
+The adoption does not have any material impact on financial position and financial performance of the Group.
+Annual Improvements to IFRSS 2014-2016 Cycle
+other entities
+_
+Amendments to IFRS 12, Disclosure of interests in
+The amendments to IFRS 12 clarify that the disclosure requirements of IFRS 12, other than the requirements to disclose
+summarised financial information, also apply to an entity's interests in other entities classified as held for sale or discontinued
+operations in accordance with IFRS 5.
+The adoption does not have any material impact on financial position and financial performance of the Group.
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretation and
+amendments.
+139
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken to other comprehensive income. On disposal of a foreign operation, the
+cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in
+profit or loss.
+Amendments to IAS 7, Statement of cash flows "Disclosure initiative"
+(5) Financial instruments
+A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
+(9) Convertible instruments
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at fair value through profit or loss. The equity component is not re-measured.
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+Financial liabilities
+(10) Preference shares and perpetual bonds
+Preference shares and perpetual bonds issued containing both equity and liability components are accounted for using the
+accounting policy for convertible instruments containing an equity component. Preference shares and perpetual bonds issued
+not containing an equity component are accounted for using the accounting policy for other convertible instruments not
+containing an equity component.
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instruments' duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redemption price is charged to equity.
+(11) Derivatives and hedge accounting
+Derivatives
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+Certain derivatives embedded in other financial instruments are treated as separate derivatives when their economic
+characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair
+value through profit or loss. These embedded derivatives are measured at fair value with the changes in fair value recognised
+in profit or loss.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after
+considering the definition of financial assets, financial liabilities and equity instruments.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+(8) Derecognition of financial assets and liabilities
+Financial assets
+A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised
+when:
+•
+The rights to receive cash flows from the asset have expired; or
+•
+The Group has transferred its rights to receive cash flows from the asset; or has retained its rights to receive cash
+flows from the asset but has assumed an obligation to pay them in full without material delay to a third party under a
+"pass-through" arrangement; and either the Group has transferred substantially all the risks and rewards of ownership
+of the financial asset; or the Group has neither transferred nor retained substantially all the risks and rewards of
+ownership of the financial asset, but has transferred control of the asset.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash flows
+from the asset but has entered into a pass-through arrangement, and has neither transferred nor retained substantially all
+the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's
+continuing involvement in the asset.
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Securitisation
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets are
+set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets are not
+derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation of financial
+assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent of its continuing
+involvement, derecognise the remaining. The book value of the transferred assets is apportioned between the derecognised
+portion and the retained portion based on their respective relative fair values, and the difference between the book value of the
+derecognised portion and the total consideration paid for the derecognised portion is recorded in profit or loss.
+Sales of assets on condition of repurchase
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+Annual Report 2017
+145
+146
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(12) Trade date accounting
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(13) Presentation of financial instruments
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+•
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+•
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+148
+ICBC
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income;
+the gain or loss relating to the ineffective portion is recognised immediately in the income statement. Gains and losses
+accumulated in equity are included in the income statement when the foreign operation is disposed of as part of the gain or
+loss on the disposal.
+Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending
+the payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is
+no longer considered past due. Management continuously reviews rescheduled loans to ensure that all criteria are met and
+that future payments are likely to occur. The loans continue to be subject to individual or collective impairment assessment,
+and the provision is calculated using the loan's original effective interest rate.
+Net investment hedge is a hedge of a net investment in a foreign operation.
+(In RMB millions, unless otherwise stated)
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Hedge accounting
+At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
+the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
+The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk
+being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting the exposure to changes in
+the hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective
+in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they have
+actually been highly effective throughout the financial reporting periods for which they were designated.
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+Fair value hedges
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that is
+attributable to a particular risk and could affect the profit or loss. For fair value hedges, the carrying amount of the hedged
+item is adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the
+gains and losses from both are taken to profit or loss.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised,
+the hedge no longer meets the criteria for hedge accounting or the Group revokes the designation. If the hedged items are
+derecognised, the unamortised fair value is recorded in profit or loss.
+Cash flow hedges
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss. For
+designated and qualifying cash flow hedges, the effective portion of the gain or loss on the hedging instrument is initially
+recognised directly in other comprehensive income. The ineffective portion of the gain or loss on the hedging instrument is
+recognised immediately in profit or loss.
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+a hedging instrument expires, or is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge
+accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive
+income until the hedged forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur,
+the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+Annual Report 2017
+147
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+Financial Statements for the year ended 31 December 2017
+Net investment hedges
+(7) Rescheduled loans
+Notes to the Financial Statements
+(In RMB millions, unless otherwise stated)
+(ii)
+(iii)
+on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for
+which there is evidence of a recent actual pattern of short term profit-taking; or
+it is a derivative that is not designated as an effective hedging instrument.
+Financial assets or financial liabilities held for trading are measured at fair value after initial recognition. Realised or
+unrealised income or expenses are recognised in profit or loss.
+Financial assets or financial liabilities designated at fair value through profit or loss
+it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
+A financial instrument may be designated as a financial asset or financial liability at fair value through profit or loss upon
+initial recognition, if it meets any of the criteria set out below:
+(ii)
+It eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from
+measuring the financial asset or financial liability or from recognising the gains and losses on them on different bases;
+It applies to a group of financial assets, financial liabilities or both which is managed and its performance evaluated on
+a fair value basis, in accordance with a documented risk management or investment strategy, and where information
+about that group of financial instruments is provided internally on that basis to key management personnel; or
+(iii) The financial instrument contains one or more embedded derivatives, unless the embedded derivative(s) does not
+significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
+In the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be
+reliably measured, it cannot be designated as a financial asset at fair value through profit or loss.
+Financial assets and liabilities designated at fair value through profit or loss are measured at fair value after initial
+recognition. Realised and unrealised income or expenses are recognised in profit or loss.
+(i)
+(i)
+A financial asset or financial liability is classified as held for trading if:
+Financial assets or financial liabilities held for trading
+Initial recognition of financial instruments
+If, after an impairment loss has been recognised on an available-for-sale debt instrument, the fair value of the debt
+instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the
+impairment loss was recognised the impairment loss is reversed through profit or loss. An impairment loss recognised for an
+investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. The impairment loss
+on an investment in unquoted equity instrument whose fair value cannot be reliably measured is not reversed.
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+At initial recognition, financial assets are classified into four categories: financial assets at fair value through profit or loss,
+held-to-maturity financial investments, loans and receivables and available-for-sale financial assets.
+At initial recognition, financial liabilities are classified into two categories: financial liabilities at fair value through profit or
+loss and other financial liabilities.
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities at
+fair value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other
+categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their
+initial costs.
+Annual Report 2017
+141
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Financial assets or financial liabilities at fair value through profit or loss
+Financial assets or financial liabilities at fair value through profit or loss include financial assets or financial liabilities held for
+trading and financial assets or financial liabilities designated at fair value through profit or loss.
+ICBC
+142
+Measurement of fair value
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Financial assets carried at amortised cost
+If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments has been
+incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value
+of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's
+original effective interest rate and shall include the value of any relevant collateral. The original effective interest rate is the
+rate used to determine the values of financial assets at initial recognition. With respect to floating-rate loans, receivables and
+held-to-maturity investments, the discount rate could be the current effective interest rate determined under the contract.
+The carrying amount of the asset is reduced through the use of an impairment provision account and the amount of the loss
+is recognised in profit or loss.
+The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
+significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no
+objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is
+included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively
+assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or
+continues to be recognised are not included in a collective assessment of impairment.
+Future cash flows of a group of financial assets that are collectively evaluated for impairment are estimated on the basis of
+historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is
+adjusted on the basis of current observable data to reflect the impact of current conditions that did not affect the period on
+which the historical loss experience is based and to eliminate the impact of historical conditions that do not exist currently.
+The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group.
+If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be attributed objectively to an
+event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent
+reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the assets does not
+exceed its amortised cost at the reversal date.
+When an item of loans and receivables is uncollectible, it is written off against the related allowance for impairment losses.
+Such loans and receivables are written off after all the necessary procedures have been completed and the amount of the
+loss has been determined. Subsequent recoveries of the amounts previously written off decrease the amount of the provision
+for loan impairment in profit or loss.
+Financial assets carried at cost
+If there is objective evidence that an impairment loss has been incurred on the financial asset, the amount of impairment
+loss, measured as the difference between the carrying amount of that financial asset and the present value of estimated
+future cash flows discounted at the current market rate of return for a similar financial asset, is recognised in profit or loss. In
+the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be reliably
+measured, the amount of impairment loss is recognised in profit or loss. Impairment losses on these assets are not reversed.
+Financial Statements for the year ended 31 December 2017
+If there is objective evidence that the financial asset is impaired, the cumulative loss, measured as the difference between the
+acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss on that
+financial asset previously recognised in profit or loss, is removed from other comprehensive income and recognised in profit
+or loss.
+In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged
+decline in the fair value of the investment below its cost. The Group considers the time period and continuity of the
+magnitude of the decline to evaluate whether the decline in fair value is prolonged. More significantly the fair value declines
+relative to the cost, the less the volatility moves, and the longer the decline lasts or the more obvious the continuity of the
+magnitude of the decline is, the more likely the equity investment impairs. In general, the Group considers the situation
+when fair value is less than 40% of the cost as significant decline and that when fair value falls below the cost in a period
+over 12 months as prolonged decline.
+144
+ICBC
+Notes to the Financial Statements
+Notes to the Financial Statements
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Available-for-sale financial assets
+143
+Notes to the Financial Statements
+If, as a result of a change in intention or ability, it is no longer appropriate to classify an investment as held-to-maturity, it
+shall be reclassified as available-for-sale and remeasured at fair value.
+Loans and receivables
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
+an active market and the Group has no intention of trading the assets immediately or in the near term. After initial
+measurement, such assets are subsequently carried at amortised cost using the effective interest rate method, less any
+allowance for impairment losses. Gains and losses are recognised in profit or loss when such assets are derecognised or
+impaired, as well as through the amortisation process.
+Discounted bills are granted by the Group to its customers based on the bank acceptance held which has not matured.
+Discounted bills are carried at face value less unrealised interest income and the interest income of the discounted bills is
+recognised using the effective interest rate method.
+Held-to-maturity financial investments
+Available-for-sale financial assets are non-derivative financial assets which are designated as such or are not classified
+in any of the three preceding categories. After initial recognition, available-for-sale financial assets are subsequently
+measured at fair value. Premiums and discounts on available-for-sale financial assets are amortised using the effective
+interest rate method and are taken to the statement of profit or loss as interest income. Changes in fair value of available-
+for-sale financial assets are recognised as a separate component of other comprehensive income until the financial asset
+is derecognised or determined to be impaired at which time the cumulative gains or losses previously recorded in other
+comprehensive income are transferred to profit or loss. Dividend and interest income on available-for-sale financial assets are
+recorded in profit or loss.
+Available-for-sale financial assets
+Other financial liabilities
+Held-to-maturity financial investments are non-derivative financial assets with fixed or determinable payments and a fixed
+maturity and which the Group has the positive intention and ability to hold to maturity. After initial measurement, held-to-
+maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less
+any impairment loss. Gains and losses are recognised in profit or loss when the held-to-maturity financial investments are
+derecognised or impaired, as well as through the amortisation process.
+Other financial liabilities are carried at amortised cost using the effective interest rate method after initial recognition.
+(6) Impairment of the financial assets
+An assessment on carrying amount of financial assets is made at the end of each reporting period. Impairment is recognised
+if there is objective evidence of impairment of financial assets, i.e., one or more events that occur after the initial recognition
+of those assets and have an impact on the estimated future cash flows of the financial assets or group of financial assets
+that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers
+is experiencing significant financial difficulty, default or delinquency in interest or principal payments, they would probably
+enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable
+decrease in the estimated future cash flows.
+Annual Report 2017
+In the case of an equity investment classified as available-for-sale, if neither a quoted market price in an active market exists
+nor its fair value can be reliably measured, it will be measured at cost less any impairment loss.
+155
+Annual Report 2017
+Leases which transfer substantially all the risks and rewards of ownership of the assets to the lessees are classified as
+finance leases. Leases where substantially all the rewards and risks of the assets remain with the lessor are accounted for as
+operating leases.
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly. Future taxable profits are determined based on business plans for individual subsidiaries in the Group.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Notes to the Financial Statements
+(i)
+(28) Leases
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(29) Related parties
+When the Group is a lessor under finance leases, an amount representing the minimum lease payment receivables and initial
+direct costs is included in the statement of financial position as loans and advances to customers. Any unguaranteed residual
+value is also recognised at the inception of the lease. The difference between the sum of the minimum lease payment
+receivables, initial direct costs, the unguaranteed residual value and their present value is recognised as unearned finance
+income. Unearned finance income is recognised over the period of the lease using the effective interest rate method.
+Operating leases
+Rental payments applicable to operating leases are charged to profit or loss on the straight-line basis over the lease terms.
+When the Group is the lessor under operating leases, the assets subject to operating leases are accounted for as the Group's
+assets. Rental income is recognised as "other operating income, net" in the statement of profit or loss on the straight-line
+basis over the lease term.
+A party is considered to be related to the Group if:
+(a)
+the party is a person or a close member of that person's family and that person:
+(i)
+has control or joint control over the Group;
+(ii)
+or
+has significant influence over the Group; or
+Finance leases
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+(ii)
+(i)
+(iii)
+(ii)
+Fee income on transactions conducted or from services provided over a period of time
+These fees mainly include fee income on settlement and clearing business, commission income and fee income on
+asset management, custody and other management advisory services. Fee income is recognised on the basis of when
+the transaction is completed or on an accrual basis when the service is provided over a period of time.
+Fee income from providing transaction services
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the
+arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognised on
+completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are
+recognised after fulfilling the corresponding criteria.
+The fair value of the award credits granted to the bank card holders is deferred and recognised as fee and commission
+income when the award credits are redeemed or expire.
+Dividend income
+Dividend income is recognised when the Group's right to receive payment is established.
+Net trading income
+(27) Income tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+154
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Current tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Deferred income tax
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+(i) Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+is a member of the key management personnel of the Group or of a parent of the Group;
+In determining whether there is any objective evidence that impairment losses have occurred on available-for-sale and held-
+to-maturity investments, the Group assesses periodically whether there has been a significant or prolonged decline in the fair
+value below its cost or carrying amount, or whether other objective evidence of impairment exists based on the investee's
+financial conditions and business prospects, including industry environment, change of technology as well as operating and
+financing cash flows. This requires a significant level of judgement, which would affect the amount of impairment losses.
+the party is an entity where any of the following conditions applies:
+Impairment losses of loans and advances and amounts due from banks and other financial
+institutions
+The Group determines periodically whether there is any objective evidence that impairment losses have occurred on loans
+and advances and amounts due from banks and other financial institutions. If any such evidence exists, the Group assesses
+the amount of impairment losses. The amount of impairment losses is measured as the difference between the carrying
+amount and the present value of estimated future cash flows. Assessing the amount of impairment losses requires significant
+judgement on whether the objective evidence for impairment exists and also significant estimates when determining the
+present value of the expected future cash flows.
+Impairment losses of available-for-sale and held-to-maturity investments
+Annual Report 2017
+157
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Impairment of goodwill
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUs to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUs and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+Income tax
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+Fair value of financial instruments
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique. Valuation
+techniques include using recent arm's length market transactions between knowledgeable and willing parties, if available,
+reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and
+option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs. However, where
+market inputs are not available, management needs to make estimates on such unobservable market inputs.
+Determination of control over investees
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls securitisation vehicles, investment funds, wealth management products, asset management plans, trust plans or
+asset-backed securities.
+Securitisation vehicles
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+Investment funds, wealth management products, asset management plans, trust plans and asset-backed
+securities
+The Group acts as manager to a number of investment funds, wealth management products, asset management plans,
+trust plans and assets-backed securities. Determining whether the Group controls such a structured entity usually focuses
+on the assessment of the aggregate economic interests of the Group in the entity (comprising any carried interests and
+expected management fees) and the decision-making authority of the entity. For all these structured entities managed by
+the Group, the Group's aggregate economic interest is in each case not significant and the decision makers establish, market
+and manage them according to restricted parameters as set out in the investment agreements as required by laws and
+regulations. As a result, the Group has concluded that it acts as agent as opposed to principal for the investors in all cases,
+and therefore has not consolidated these structured entities.
+For further disclosure in respect of unconsolidated investment funds, wealth management products, asset management
+plans, trust plans and assets-backed securities in which the Group has an interest or for which it is a sponsor, see Note 44.
+158
+ICBC
+The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be
+divided into the following two categories:
+Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
+investments when the Group has the positive intention and ability to hold the investments to maturity. Accordingly, in
+evaluating whether a financial asset shall be classified as a held-to-maturity investment, significant management judgement
+is required. If the Group fails correctly to assess its intention and ability to hold the investments to maturity and the Group
+sells or reclassifies more than an insignificant amount of held-to-maturity investments before maturity, the Group would
+reclassify the whole held-to-maturity investment portfolio as available-for-sale.
+Designation of held-to-maturity investments
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that
+have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
+financial period are described below.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+(i)
+the entity and the Group are members of the same group;
+(ii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(iii)
+the entity and the Group are joint ventures of the same third party;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(vi)
+the entity is controlled or jointly controlled by a person identified in (a);
+(b)
+(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+(30) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities
+are measured at the higher of the initial fair value less cumulative amortisation and the best estimate of expenditure being
+required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability relating to a
+financial guarantee is taken to the statement of profit or loss.
+156
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(31) Contingent liabilities
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+4.
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+Fee and commission income
+2-7 years
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as available-
+for-sale financial assets, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where
+appropriate, to the net carrying amount of the financial asset. The calculation takes into account all contractual terms of
+the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly
+attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. The carrying
+amount of the financial asset is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying
+amount is calculated based on the original effective interest rate and the change in carrying amount is recorded in profit or
+loss.
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+(18) Repossessed assets
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+(19) Business combination and goodwill
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUS) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+Where goodwill forms part of a CGU (group of CGUS) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+150
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(20) Provisions
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+(21) Asset impairment
+(17) Land use rights
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+149
+Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest
+income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the
+impairment loss.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(15) Precious metals
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(16) Property and equipment
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+Properties and buildings
+Estimated
+useful life
+5-50 years
+Estimated residual
+value rate
+0%-3%
+Annual
+depreciation rate
+1.94%-20%
+14.29%-50%
+Over the shorter of the economic useful
+lives and remaining lease terms
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels. The
+residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from 15 to
+25 years.
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+Annual Report 2017
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+(22) Cash and cash equivalents
+Insurance contracts classification
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. The contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+(i)
+(ii)
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Insurance income recognition
+Insurance premium income is recognised when:
+(i)
+The insurance contract is issued, and related insurance risk is undertaken by the Group;
+The related economic benefits are likely to flow to the Group;
+(iii) Related income can be reliably measured.
+Insurance contract liabilities
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+Annual Report 2017
+153
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(26) Revenue recognition
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+Interest income
+(25) Insurance contracts
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+(ii)
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+Cash and cash equivalents refer to short term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+Annual Report 2017
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+151
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(23) Employee benefits
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Short-term employee benefits
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+Post-employment benefits-defined contribution plans
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organisations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+Termination benefits
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+When the Group can no longer withdraw an offer of those benefits;
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+(24) Fiduciary activities
+Early retirement benefits
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when they are incurred.
+152
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+HONG Yongmiao
+Anthony Francis Neoh
+YANG Siu Shun
+Sheila Colleen Bair(iii)
+SHEN Si(iv)
+ZHANG Wei
+YE Donghai(ii)
+Or Ching Fai
+Non-executive Director
+DONG Shi(i)
+Non-executive Director
+FEI Zhoulin
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Vice Chairman of the Board of Directors,
+Executive Director, President
+Executive Director, Vice President
+Executive Director, Vice President
+Non-executive Director
+MEI Yingchun(i)
+Independent Non-executive Director
+Independent Non-executive Director
+115
+HUANG Li
+QU Qiang
+SHEN Bingxi
+QIAN Wenhui(v)
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+ཁྐྲ ལྦིཥྛཿ་་|,,,,,,।।
+519
+115
+15
+634
+467
+582
+467
+Executive Director
+115
+582
+HUI Ping
+Chairman of the Board of Directors,
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+ZHANG Hongli
+WANG Jingdong
+CHENG Fengchao
+854
+administrative expenses.
+166
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+13. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+Name
+Position
+Year ended 31 December 2017
+Contributions
+Remuneration
+to defined
+Total
+paid
+ZHENG Fuqing
+contribution
+schemes
+Fees
+emoluments
+before tax
+RMB'000
+RMB'000
+(1)
+(2)
+RMB'000
+(3)
+RMB'000
+(4)=(1)+(2)+(3)
+519
+115
+634
+YI Huiman
+GU Shu
+(before tax)
+268
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Ms. Sheila Colleen Bair was appointed
+as Independent Non-executive Director of the Bank, and her qualification was approved by CBRC in March 2017.
+External Supervisor
+110
+110
+2,915
+7,103
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's and the Bank's 2017 financial statements. The total compensation packages will be further
+disclosed when determined by the relevant authorities.
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+(i)
+At the Annual General Meeting for the Year 2016 held on 27 June 2017, Ms. Mei Yingchun and Mr. Dong Shi were
+appointed as Non-executive Director of the Bank, and their qualifications were approved by CBRC in August 2017.
+(ii)
+At the Annual General Meeting for the Year 2016 held on 27 June 2017, Mr. Ye Donghai was appointed as
+Non-executive Director of the Bank, and his qualification was approved by CBRC in October 2017.
+Annual Report 2017
+167
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(iii)
+(iv)
+(v)
+(vi)
+(vii)
+At the Annual General Meeting for the Year 2015 held on 24 June 2016, Mr. Shen Si was appointed as Independent
+Non-executive Director of the Bank, and his qualification was approved by CBRC in March 2017.
+On 5 January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of
+Supervisors of the Bank due to change of job.
+In June 2017, Ms. Wang Xiaoya and Ms. Ge Rongrong ceased to act as Non-executive Directors of the Bank due to
+work adjustment.
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank.
+(viii) In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent
+Non-executive Director of the Bank.
+168
+ICBC
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+(ii) The principal auditor's remuneration of RMB205 million for the year (2016: RMB190 million) is included in other
+843
+3,345
+Total
+Former Independent Non-executive Director
+པgg, ཙྪ8ཡེདྡྷིཊྚེ⪜
+470
+470
+470
+470
+445
+445
+437
+437
+300
+300
+308
+308
+1,122
+Employee Representative Supervisor
+50
+275
+275
+External Supervisor
+Former Chairman of the Board of Supervisors
+519
+115
+634
+WANG Xiaoya(vi)
+Former Non-executive Director
+GE Rongrong(vi)
+Former Non-executive Director
+FU Zhongjun(vii)
+Former Non-executive Director
+Kenneth Patrick CHUNG(viii)
+50
+(i)
+471,846
+186,194
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+IFRS 16, "Leases"
+In January 2016, the IASB issued IFRS 16, "Leases", which replaces the current guidance in IAS 17. The new standard
+requires the companies to bring leases on-balance sheet for lessees. The new standard also makes changes in accounting
+over the life of the lease, and introduces a stark dividing line between leases and service contracts.
+Under IFRS 16 there is no longer a distinction between finance leases and operating leases so far as lessees are concerned.
+Instead, subject to practical expedients, a lessee recognises all leases on-balance sheet by recognising a right-of-use (ROU)
+asset and lease liability.
+Lessor accounting is substantially unchanged
+i.e. lessors continue to classify leases as finance and operating leases.
+However, there are a number of changes in the details of lessor accounting. For example, lessors apply the new definition of
+a lease, sale-and-leaseback guidance, sub-lease guidance and disclosure requirements.
+The Group is currently assessing the impact of the standard on its financial position and financial performance.
+IFRIC 23, "Uncertainty over income tax treatments"
+This Interpretation provides guidance on how to apply IAS 12, Income taxes when there is uncertainty over whether a tax
+treatment will be accepted by the tax authority.
+Under the Interpretation, the key test is whether it is probable that the tax authority will accept the entity's tax treatment.
+•
+If it is probable, then the entity should measure current and deferred tax consistently with the tax treatment in its tax
+return.
+If it is not probable, then the entity should reflect the effect of uncertainty in its accounting for income tax by using
+the "expected value" approach or the "the most likely amount" approach whichever better predicts the resolution
+of the uncertainty and in that case the tax amounts in the financial statements will not be the same as the amounts in
+the tax return.
+The Group is currently assessing the impact of the interpretation on its financial position and financial performance.
+Amendments to IFRS 9, Financial instruments "Prepayment features with negative
+compensation and modifications of financial liabilities"
+The IASB has changed IFRS 9's requirements in two areas of financial instruments accounting.
+Notes to the Financial Statements
+ICBC
+162
+The amendments are expected to have no material impact on financial position and financial performance.
+The amendments also re-characterise the list of evidence provided in the standard as a non-exhaustive list of examples i.e.
+other forms of evidence may support a transfer.
+The amendments are expected to have no material impact on financial position and financial performance.
+IFRIC 22, "Foreign currency transactions and advance consideration"
+The Interpretation provides guidance on how to determine "the date of the transaction" when applying IAS 21, The effects
+of changes in foreign exchange rates to situations where an entity receives or pays advance consideration in a foreign
+currency and recognises a non-monetary asset or liability.
+The Interpretation clarifies that "the date of the transaction" for the purpose of determining the exchange rate to use on
+initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the
+non-monetary asset or liability arising from the payment or receipt of advance consideration. If there are multiple payments
+or receipts in advance of recognising the related item, the entity should determine the date of the transaction for each
+payment or receipt.
+The interpretation is expected to have no material impact on financial position and financial performance.
+Annual Improvements to IFRSS 2014-2016 Cycle - Amendments to IFRS 1, First-time
+adoption of International Financial Reporting Standards and Amendments to IAS 28,
+Investments in associates and joint ventures
+The amendments to IFRS 1 delete the short-term exemptions for first-time adopters that are already out-of-date.
+The amendments to IAS 28 clarify that:
+•
+•
+a non-investment entity investor may elect to retain the fair value accounting applied by its investment entity associate
+or joint venture and this election can be made separately for each investment entity associate or joint venture.
+The annual improvements are expected to have no material impact on financial position and financial performance.
+Amendments to IFRS 4, Insurance contracts "Applying IFRS 9 Financial instruments with
+IFRS 4 Insurance contracts"
+The amendments address concerns arising from the different effective dates of IFRS 9 and the new insurance contracts
+standard, IFRS 17. The amendments introduce the following two approaches:
+Deferral approach - Temporary exemption from IFRS 9
+Companies whose activities are predominantly connected with insurance may choose to defer the application of IFRS 9
+until 2021 (the effective date of IFRS 17).
+Overlay approach
+All companies that issue insurance contracts may choose to recognise in other comprehensive income, rather than
+profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is
+applied.
+a venture capital organisation, or other qualifying entity, may elect to measure its investments in an associate or joint
+ventures at fair value through profit or loss on an investment-by-investment basis; and
+•
+Financial assets containing prepayment features with negative compensation can now be measured at amortised cost
+or at fair value through other comprehensive income (FVOCI) if they meet the other relevant requirements of IFRS 9.
+For the companies that have modified or exchanged fixed rate financial liabilities that do not result in derecognition,
+they were required to recalculate the amortised cost of the modified financial liability by discounting the modified
+contractual cash flows using the original EIR; and recognise any adjustment in profit or loss.
+Interest income on:
+Loans and advances to customers (i)
+572,688
+538,219
+- Corporate loans and advances
+369,740
+355,313
+- Personal loans
+2016
+186,089
+- Discounted bills
+16,859
+22,800
+Financial investments (ii)
+185,181
+177,298
+Due from banks and other financial institutions
+55,390
+160,106
+The amendments provide guidance on deciding when there is a change in use to transfer a property to or from investment
+property. The amendments clarify that a change in use occurs when the property meets or ceases to meet the definition of
+investment property and there is evidence of the change in use.
+2017
+6.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+Amendments to IAS 28, Investment in associates and joint ventures "Long-term interests in
+associates and joint ventures"
+The IASB has clarified that IFRS 9 applies to long-term interests that, in substance, form part of the entity's net investment in
+an associate or joint venture. In applying IFRS 9, the entity does not take account of any adjustments to the carrying amount
+of long-term interests that arise from applying IAS 28.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+Annual Report 2017
+163
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+NET INTEREST INCOME
+(In RMB millions, unless otherwise stated)
+The 2015-2017 cycle of annual improvements contain amendments to four standards including IFRS 3 Business
+combinations, IFRS 11 Joint arrangements, IAS 12 Income taxes and IAS 23 Borrowing costs.
+The Group is currently assessing the impact of the annual improvements on its financial position and financial performance.
+IFRS 17, "Insurance contracts"
+IFRS 17 is issued to resolve the comparison problems created by IFRS 4 by setting out a single principle-based standard for
+the recognition, measurement, presentation and disclosure of insurance contracts in the financial statements of the issuers
+of those contracts.
+The Group is currently assessing the impact of the standard on its financial position and financial performance.
+Amendments to IFRS 10 and IAS 28, "Sale or contribution of assets between an investor and
+its associate or joint venture"
+The amendments introduce new requirements on loss of control over assets in a transaction with an associate or joint
+venture. These requirements require the full gain to be recognised when the assets transferred meet the definition of a
+"business" under IFRS 3, Business combination.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+Annual Improvements to IFRS Standards 2015-2017 Cycle
+Amendments to IAS 40, Investment property "Transfers of investment property"
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Uncertainty over income tax treatments
+Prepayment features with negative compensation and modifications of financial liabilities
+Long-term interests in associates and joint ventures
+Annual Improvements to IFRSS 2015-2017 Cycle
+IFRS 17
+IFRS 10 and IAS 28 Amendments
+Insurance contracts
+Sale or contribution of assets between an investor and its associate or joint venture'
+1
+Effective for annual periods beginning on or after 1 January 2018, early adoption is permitted.
+Leases
+2
+4
+Effective for annual periods beginning on or after 1 January 2018 for IFRS 1 and 1 January 2018 with early adoption
+permission for IAS 28.
+Effective for annual periods beginning on or after 1 January 2018 for deferral approach, effective for annual periods
+beginning upon initial adoption of IFRS 9 for overlay approach.
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted only for companies that also
+apply IFRS 15.
+5
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted.
+Effective for annual periods beginning on or after 1 January 2021, early adoption is permitted only for companies that also
+apply IFRS 9 and IFRS 15.
+7
+3
+Effective for annual periods is to be determined, early adoption is permitted.
+Insurance contracts³
+IFRS 9 Amendments
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+5. IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IFRS 15
+IFRS 9
+IFRS 2 Amendments
+IAS 40 Amendments
+IAS 28 Amendments
+IFRIC 22
+Financial instruments'
+Share-based payment'
+Investment property'
+Foreign currency transactions and advance consideration'
+Annual Improvements to IFRSS 2014-2016 Cycle²
+IFRS 4 Amendments
+IFRS 16
+IFRIC 23
+Revenue from contracts with customers'
+31,285
+Annual Report 2017
+Notes to the Financial Statements
+IFRS 9 does not fundamentally change the requirements relating to measuring and recognising ineffectiveness under IAS 39.
+However, greater flexibility has been introduced to the types of transactions eligible for hedge accounting. The group has
+assessed that its current hedge relationships will qualify as continuing hedges upon the adoption of IFRS 9 and therefore it
+expects that the accounting for its hedging relationships will not be significantly impacted.
+Disclosure
+IFRS 9 will require extensive new disclosures, in particular about hedge accounting, credit risk and expected credit loss. The
+Group has updated the system and controls that it believes will be necessary to disclose the required data.
+Transition
+The Group is required to adopt IFRS 9 from 1 January 2018. The Group will change its accounting policies from the
+beginning of 2018 and disclose its financial statements in accordance with IFRS 9 since the first quarterly report of 2018. The
+Group will use the exemption from restating comparative information and will recognise any transition adjustments against
+the opening balance of net assets at 1 January 2018.
+Based on a preliminary assessment, if the group were to adopt IFRS 9 at 31 December 2017, the Group's net assets would
+decrease by less than 1.7% arising from the new requirements on classification and measurement, impairment and hedge
+accounting as compared with that recognised under IAS 39.
+Amendments to IFRS 2, Share-based payment "Classification and measurement of
+share-based payment transactions"
+The amendments clarify the accounting for the following classification and measurement issues under IFRS 2:
+Measurement of cash-settled share-based payments
+Hedge accounting
+•
+The amendments introduce an exception so that a share-based payment transaction with net settlement feature
+for withholding an amount to cover the employee's tax obligations is classified as equity-settled in its entirety when
+certain conditions are met, even though the entity is then required to transfer cash (or other assets) to the tax
+authority to settle the employee's tax obligation.
+Accounting for a modification of a share-based payment from cash-settled to equity-settled
+The amendments clarify that on such a modification the liability for the original cash-settled share-based payment is
+derecognised and the equity-settled share-based payment is measured at its fair value and recognised to the extent
+that the goods or services have been received up to that date.
+Any difference between the carrying amount of the liability derecognised and the amount recognised in equity at the
+modification date is recognised in profit or loss immediately.
+The amendments are expected to have no material impact on financial position and financial performance.
+Annual Report 2017
+161
+Notes to the Financial Statements
+The amendments clarify that the fair value of liabilities for cash-settled share-based payments should be measured
+using the same approach as for equity-settled share-based payments – i.e. using the modified grant date method.
+Classification of share-based payments settled net of tax withholdings
+159
+The new impairment model in IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit loss" model.
+Under the expected credit loss model, it will no longer be necessary for a loss event to occur before an impairment loss
+is recognised. Instead, an entity is required to recognise and measure either a 12-month expected credit loss or lifetime
+expected credit loss, depending on the asset and the facts and circumstances, which will result in earlier recognition of credit
+losses. Based on a preliminary assessment, if the group were to adopt the new impairment requirements at 31 December
+2017, accumulated impairment loss would increase primarily attributed to an increase in accumulated impairment losses of
+loans and advances to customers and credit commitments, and the Group's net assets would decrease as compared with
+that recognised under IAS 39.
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Further information about those changes that are expected to affect the Group is as follows:
+IFRS 15 "Revenue from contracts with customers”
+The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue:
+at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether,
+how much and when revenue is recognised.
+IFRS 15 also introduces extensive qualitative and quantitative disclosure requirements which aim to enable users of the
+financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from
+contracts with customers. An entity may adopt IFRS 15 on a full retrospective basis. Alternatively, it may choose to adopt
+it from the date of initial application by adjusting opening balances at that date. Transitional disclosures are different
+depending on the approach adopted by the entity.
+The standard is expected to have no material impact on financial position and financial performance.
+IFRS 9 "Financial instruments"
+Impairment
+IFRS 9 will replace the current standard on accounting for financial instruments, IAS 39, Financial instruments: Recognition
+and measurement. IFRS 9 introduces new requirements for classification and measurement of financial assets, including
+the measurement of impairment for financial assets and hedge accounting. On the other hand, IFRS 9 incorporates
+without substantive changes the requirements of IAS 39 for recognition and derecognition of financial instruments and the
+classification and measurement of financial liabilities.
+Classification and measurement
+IFRS 9 contains three principal classification categories for financial assets: measured at (1) amortised cost, (2) fair value
+through profit or loss (FVTPL) and (3) fair value through other comprehensive income (FVOCI):
+The classification for debt instruments is determined based on the entity's business model for managing the financial
+assets and the contractual cash flow characteristics of the asset. On initial recognition the Group may irrevocably
+designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at
+FVTPL. If a debt instrument is classified as FVOCI then interest revenue, impairment, foreign exchange gains/losses and
+gains/losses on disposal will be recognised in profit or loss.
+For equity securities, the classification is FVTPL regardless of the entity's business model. The only exception is if the
+equity security is not held for trading and the entity irrevocably elects to designate that security as FVOCI. If an equity
+security is designated as FVOCI then only dividend income on that security will be recognised in profit or loss. Gains
+and losses on that security will be recognised in other comprehensive income without recycling.
+Based on a preliminary assessment, if the group were to adopt the new classification and measurement requirements on
+financial assets at 31 December 2017, the Group's net assets would increase as compared with that recognised under IAS 39.
+The classification and measurement requirements for financial liabilities under IFRS 9 are largely unchanged from IAS 39,
+except that IFRS 9 requires the fair value change of a financial liability designated at FVTPL that is attributable to changes
+of that financial liability's credit risk to be recognised in other comprehensive income (without reclassification to profit or
+loss). Based on its assessment, the Group does not believe that the requirements will have a material impact on its financial
+liabilities.
+160
+ICBC
+Notes to the Financial Statements
+IFRS 9 is effective for annual periods beginning on or after 1 January 2018 on a retrospective basis and includes an exception
+from the requirement to restate comparative information. The group plans to use the exemption from restating comparative
+information and will recognise any impact on accumulated profit or loss and reserves against the opening balance of
+retained profits and reserves at 1 January 2018.
+193,112
+Due from central banks
+44,678
+165
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+11. OTHER OPERATING INCOME, NET
+2017
+2016
+Net premium income
+38,093
+28,441
+Operating cost of insurance business
+(38,525)
+(28,808)
+Net gain on disposal of property and equipment, repossessed assets and others
+1,484
+1,710
+Others
+4,981
+Annual Report 2017
+4,545
+2,641
+4,202
+9,992
+(10,096)
+(476)
+(104)
+The above amounts represent gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities designated at fair value through profit or loss upon initial
+recognition.
+10. NET GAIN ON FINANCIAL INVESTMENTS
+Dividend income from unlisted investments
+Dividend income from listed investments
+Dividend income
+12,621
+Gain on available-for-sale financial assets, net
+2016
+166
+170
+162
+173
+328
+343
+2,313
+2017
+6,033
+13,964
+12. OPERATING EXPENSES
+3,808
+Utility expenses
+2,305
+2,467
+27,562
+28,414
+Amortisation
+2,114
+4,000
+2,059
+Taxes and surcharges
+21,661
+20,388
+7,465
+17,319
+Others
+12,438
+11,578
+Other administrative expenses (ii)
+(11,578)
+7,479
+Lease payments under operating leases in respect of land and buildings
+Repairs and maintenance charges
+Staff costs:
+2017
+2016
+Salaries and bonuses
+Staff benefits
+Post-employment benefits-defined contribution plans (i)
+74,919
+73,348
+7,384
+25,642
+14,393
+14,572
+114,954
+113,354
+Premises and equipment expenses:
+Depreciation
+13,873
+14,660
+25,434
+48,335
+2016
+Financial assets
+Financial liabilities
+ICBC
+7.
+NET FEE AND COMMISSION INCOME
+(i)
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+2017
+2016
+164
+Bank card business
+37,670
+Personal wealth management and private banking services (i)
+32,846
+37,625
+Settlement, clearing business and cash management
+26,820
+26,108
+Investment banking business
+38,692
+23,189
+Included in interest income on financial investments for the year is an amount of RMB8 million (2016: RMB15 million)
+with respect to interest income on impaired debt securities.
+Included in interest income on loans and advances to customers for the year is an amount of RMB3, 189 million (2016:
+RMB5,135 million) with respect to the accreted interest on impaired loans.
+861,594
+791,480
+Interest expense on:
+Due to customers
+Due to banks and other financial institutions
+Debt securities issued
+(260,956)
+(257,850)
+(ii)
+(58,418)
+(20,142)
+(17,470)
+(339,516)
+(319,634)
+522,078
+Net interest income
+The above interest income and expense are related to financial instruments which are not at fair value through profit or loss.
+(i)
+(44,314)
+2017
+11,102
+25,024
+18,984
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB19,937 million (2016: RMB21,639 million)
+with respect to trust and other fiduciary activities.
+8.
+NET TRADING INCOME
+Debt securities
+Equity investments
+Derivatives
+2017
+2016
+Net fee and commission income
+3,758
+757
+345
+1,238
+1,662
+5,753
+6,457
+The above amounts include gains and losses arising from the buying and selling of, interest income and expense on, and
+changes in the fair value of financial assets and liabilities held for trading.
+9. NET LOSS ON FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE
+THROUGH PROFIT OR LOSS
+4,450
+144,973
+139,625
+(19,741)
+20,440
+Guarantee and commitment business
+Asset custody business (i)
+Trust and agency services (i)
+Others
+Fee and commission income
+6,818
+5,950
+Corporate wealth management services (i)
+6,731
+1,805
+1,907
+2,781
+3,097
+158,666
+164,714
+Fee and commission expense
+(19,041)
+6,893
+6
+14,540
+82
+On 23 June 2016, the Bank appointed Mr. Huang Li as Employee Representative Supervisor of the Bank at the Interim
+Employees' Congress, and his term of office took effect from the date of review and approval by the Employees'
+Congress.
+At 31 December 2016 and 1 January 2017
+Charge for the year
+At 31 December 2017
+Due from
+banks and other
+financial institutions
+Placements with
+banks and other
+financial institutions
+Total
+329
+39
+368
+(2)
+79
+77
+(Reversal)/charge for the year
+327
+445
+53
+85
+138
+380
+203
+583
+Annual Report 2017
+175
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Bank
+At 1 January 2016
+118
+(Reversal)/charge for the year
+At 1 January 2016
+As at 31 December 2017, the amount of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group was RMB21,000 million (31 December 2016: RMB94,914 million). During
+the year of 2017, the maximum exposure of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group was RMB130,125 million (2016: RMB163,062 million). The transactions were
+conducted in the ordinary course of business under normal terms and conditions and at market rates.
+Movements of the allowance for impairment losses during the year are as follows:
+Other financial institutions operating in
+Mainland China
+234,122
+301,776
+234,076
+318,119
+Banks and other financial institutions
+operating outside Mainland China
+125,407
+119,959
+219,106
+266,373
+477,740
+527,533
+Group
+572,294
+Less: Allowance for impairment losses
+(203)
+(118)
+(199)
+(115)
+477,537
+527,415
+572,095
+687,221
+847,611
+797,473
+930,593
+927,705
+687,336
+At 31 December 2016 and 1 January 2017
+Charge for the year
+At 31 December 2017
+8,795
+6,016
+48,300
+87,337
+189,331
+60,072
+184,074
+Debt securities analysed into:
+Listed in Hong Kong
+2,005
+1,248
+1,530
+Listed outside Hong Kong
+Equity investments
+9,544
+514
+387
+1,430
+Unlisted
+66,993
+174,469
+58,028
+133,957
+78,542
+183,315
+60,072
+135,774
+Equity investments analysed into:
+Listed in Hong Kong
+7,598
+135,774
+60,072
+183,315
+Due from
+Placements with
+banks and other
+financial institutions
+banks and other
+financial institutions
+Total
+329
+33
+362
+(3)
+82
+79
+326
+115
+441
+34
+84
+118
+360
+199
+559
+22. FINANCIAL ASSETS HELD FOR TRADING
+Group
+Bank
+2017
+2016
+2017
+2016
+Debt securities
+78,542
+102,844
+119,112
+105,798
+118,211
+80,548
+Surplus reserves with the PBOC (i)
+26,507
+7,125
+23,082
+3,074
+Unrestricted balances with central banks of
+overseas countries or regions
+150,850
+105,981
+114,413
+91,346
+252,571
+71,168
+197,678
+174,968
+Restricted balances with central banks:
+Mandatory reserves with the PBOC (ii)
+3,015,150
+2,793,933
+3,007,651
+2,782,756
+Fiscal deposits with the PBOC
+276,936
+238,604
+276,936
+238,604
+Other restricted balances with the PBOC (ii)
+Mandatory reserves with central banks of
+208,663
+84,572
+75,214
+Cash on hand
+Profit for the year attributable to equity holders of the parent company
+286,049
+278,249
+Less: Profit for the year attributable to other equity holders of the parent company
+Profit for the year attributable to ordinary equity holders of the parent company
+(4,437)
+(4,450)
+281,612
+273,799
+Shares:
+Weighted average number of ordinary shares in issue (in million shares)
+Basic and diluted earnings per share (RMB yuan)
+356,407
+356,407
+0.79
+0.77
+Basic and diluted earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the
+parent company divided by the weighted average number of ordinary shares in issue.
+Annual Report 2017
+173
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+20. CASH AND BALANCES WITH CENTRAL BANKS
+Group
+Bank
+2017
+2016
+2017
+2016
+Cash and unrestricted balances with
+central banks:
+36,961
+3,615
+77,570
+77,570
+194,364
+Other financial institutions operating in
+Mainland China
+5,116
+1,071
+4,992
+944
+Banks and other financial institutions
+operating outside Mainland China
+51,635
+45,430
+40,755
+45,502
+370,454
+313,111
+270,385
+240,810
+Less: Allowance for impairment losses
+(380)
+(327)
+(360)
+(326)
+370,074
+270,058
+358,498
+240,484
+Placements with banks and other financial
+institutions:
+Banks operating in Mainland China
+358,858
+223,884
+Banks operating in Mainland China
+institutions:
+overseas countries or regions (ii)
+32,254
+43,003
+18,785
+16,372
+3,361,301
+3,153,110
+3,340,333
+3,115,302
+3,613,872
+3,350,788
+3,548,996
+3,290,270
+(i)
+(ii)
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks
+and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits
+mainly consist of deposits placed with the PBOC. As at 31 December 2017, the mandatory deposit reserve ratios of
+the domestic branches of the Bank in respect of customer deposits denominated in RMB and foreign currencies were
+consistent with the requirement of the PBOC. The amounts of mandatory reserve deposits placed with the central
+banks of those countries or regions outside Mainland China are determined by local jurisdictions.
+174
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+21. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+Group
+Bank
+2017
+2016
+2017
+2016
+Due from banks and other financial
+36,961
+Earnings:
+2,814
+2,967
+35,182
+155,293
+1,451
+(1,114)
+Commodity derivatives and others
+66,703
+158,836
+82
+225,621
+5,169
+(836)
+1,869,474
+1,979,210
+80,853
+158,710
+4,046,100
+53,856
+(46,682)
+2016
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+months
+but within
+38,706
+but within
+30,746
+(1,114)
+1,067
+Option contracts purchased
+35,898
+50,274
+230
+86,402
+2,292
+Option contracts written
+18,366
+32,173
+153
+50,692
+(362)
+8,512
+1,794,259
+77,775
+3,524
+3,665,186
+47,236
+(44,732)
+Interest rate contracts:
+Swap contracts
+8,512
+30,746
+80,853
+35,182
+155,293
+1,451
+1,789,628
+one year
+five years
+Over
+five years
+110,136
+119,323
+21,294
+338,233
+1,479
+(1,396)
+87,480
+110,136
+119,323
+21,294
+338,233
+1,479
+(1,396)
+87,480
+Commodity derivatives and others
+1,765,195
+110,358
+1,706,582
+33
+185,692
+8,078
+(1,707)
+190,756
+25,037
+3,687,570
+62,892
+(58,179)
+178
+ICBC
+75,301
+Swap contracts
+Interest rate contracts:
+(55,076)
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+1,558,487
+1,385,943
+67,355
+3,743
+Option contracts purchased
+20,693
+61,999
+2,069
+3,015,528
+84,761
+52,417
+(53,871)
+918
+Option contracts written
+23,234
+38,146
+1,976
+63,356
+(1,205)
+1,602,414
+1,486,088
+71,400
+3,743
+3,163,645
+53,335
+2,417
+7,468
+3,588
+Option contracts purchased
+353,601
+285,144
+338,257
+272,118
+Analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+2,125
+231
+663
+231
+3,316
+205,811
+348,160
+1,388
+336,206
+615
+271,272
+353,601
+285,144
+338,257
+272,118
+24. DERIVATIVE FINANCIAL INSTRUMENTS
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+176
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+9,920
+274,993
+240,397
+218,565
+241,916
+1,536
+Unlisted
+2,213
+1,666
+8,795
+6,016
+48,300
+48,300
+23. FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Group
+Bank
+2017
+2016
+59,777
+40,873
+2017
+47,414
+2016
+40,601
+Debt securities
+Other debt instruments:
+Banks and other financial institutions
+32,062
+25,706
+30,600
+25,706
+Corporate entities
+19,846
+19,846
+Others
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+markets participates at measured date.
+Listed outside Hong Kong
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which meet
+the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2017, derivative assets
+and derivative liabilities which meet the criteria for offsetting were RMB51,266 million and RMB52,649 million respectively,
+and the net derivative assets and net derivative liabilities were RMB26,949 million and RMB28,332 million respectively.
+At the end of the reporting period, the Group and the Bank had derivative financial instruments as follows:
+2017
+29,612
+41,938
+351
+71,901
+(625)
+2,027,755
+1,942,291
+101,701
+34,410
+4,106,157
+52,304
+(50,194)
+Interest rate contracts:
+Option contracts written
+Swap contracts
+224,343
+558,629
+193,588
+1,072,116
+16,042
+(14,671)
+Forward contracts
+102,731
+33,737
+24,739
+161,207
+31
+(215)
+95,556
+2,498
+118,173
+117
+Notional amounts with remaining life of
+Over three
+Fair values
+Over
+Within
+three
+months
+but within
+one year
+but within
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+1,951,140
+1,833,069
+97,581
+34,293
+3,916,083
+49,806
+(49,569)
+Option contracts purchased
+47,003
+67,284
+3,769
+Group
+2016
+313,703
+83,506
+Total
+emoluments
+Of which:
+Actual
+amount of
+deferred
+remuneration
+Fees
+paid
+bonuses
+allowance, etc.
+before tax
+payment
+paid (pre-tax)
+RMB'000
+plans, housing
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+(1)
+(2)
+(3)
+(4)
+(5)=(1)+(2)+(3)+(4)
+(6)
+(7)=(5)-(6)
+297
+405
+RMB'000
+501
+Discretionary
+and welfare
+but within
+but within
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+1,739,995
+2017
+1,707,181
+3,524
+3,528,092
+44,944
+(44,370)
+Name
+Position
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Contribution by
+the employer
+to social
+insurance
+77,392
+164
+866
+866
+Executive Director, Vice President
+Non-executive Director
+272
+GE Rongrong
+Non-executive Director
+ZHENG Fuqing
+Non-executive Director
+FEI Zhoulin
+Non-executive Director
+CHENG Fengchao
+Non-executive Director
+Or Ching Fai
+Independent Non-executive Director
+470
+Chairman of the Board of Supervisors
+Executive Director, Vice President
+HONG Yongmiao
+470
+Anthony Francis Neoh
+Independent Non-executive Director
+455
+YANG Siu Shun(iii)
+Independent Non-executive Director
+293
+Sheila Colleen Bair(iv)
+ZHANG Wei(v)
+HUI Ping
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+HUANG Li(vi)
+Independent Non-executive Director
+Executive Director, President
+Vice Chairman of the Board of Directors,
+Chairman of the Board of Directors,
+372
+161
+2
+1161
+95
+805
+805
+297
+405
+163
+865
+865
+267
+363
+160
+790
+790
+267
+362
+160
+789
+789
+YI Huiman(i)
+Executive Director
+GU Shu(ii)
+QIAN Wenhui
+ZHANG Hongli
+WANG Jingdong (ii)
+WANG Xiaoya
+three
+one year
+months
+Within
+months
+but within
+one year
+one year
+but within
+five years
+Over
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+1,577,351
+1,433,229
+115,797
+three
+months
+4,383
+56,972
+(58,600)
+Option contracts purchased
+Option contracts written
+33,722
+37,213
+69,728
+3,444
+125
+107,019
+1,306
+45,126
+3,061
+85,400
+3,130,760
+Within
+Over
+Over three
+Option contracts written
+528
+8,770
+8,653
+397
+18,348
+(69)
+202,403
+274,318
+594,438
+195,052
+1,266,211
+16,155
+(14,955)
+Commodity derivatives and others
+784,044
+265,794
+3,014,202
+2,482,403
+34,722
+730,861
+5,625
+235,087
+1,090,185
+6,462,553
+20,554
+(13,407)
+89,013
+(78,556)
+2016
+Notional amounts with remaining life of
+Fair values
+(1,617)
+Employee Representative Supervisor
+1,648,286
+122,302
+(62)
+314,493
+420,737
+864,377
+Commodity derivatives and others
+632,245
+273,591
+2,595,024
+2,242,411
+50,171
+1,036,850
+180,243
+3,283
+188,034
+1,779,850
+20,609
+14,669
+(20,470)
+15,565
+94,452
+(9,273)
+(89,960)
+Annual Report 2017
+177
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Bank
+2017
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+959,290
+6,062,319
+17
+12,216
+1,046
+4,508
+3,323,179
+58,278
+(60,217)
+Interest rate contracts:
+Swap contracts
+195,268
+279,975
+683,648
+180,059
+1,338,950
+20,456
+(20,196)
+Forward contracts
+116,445
+138,559
+161,887
+416,891
+44
+(212)
+Option contracts purchased
+1,390
+1,157
+6,626
+167
+9,340
+109
+Option contracts written
+1,390
+1,548,083
+QU Qiang
+Remuneration
+SHEN Bingxi(v)
+84,173
+77,190
+Income tax expense
+3,099
+2,373
+Others
+(651)
+(737)
+Profits attributable to associates and joint ventures
+(15,783)
+(23,673)
+Non-taxable income (ii)
+7,461
+(i)
+8,956
+(773)
+External Supervisor
+(889)
+Effects of different applicable rates of tax prevailing in other countries/regions
+90,820
+91,160
+Tax at the PRC statutory income tax rate
+363,279
+364,641
+Profit before taxation
+2016
+2017
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+Non-deductible expenses (i)
+84,173
+(ii)
+17. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+441
+74,832
+21
+85,823
+2016
+2017
+The calculation of basic and diluted earnings per share of the Group is based on the following:
+19. EARNINGS PER SHARE
+(2016: RMB0.2343 per share)
+Final ordinary shares dividends for 2017: RMB0.2408 per share
+(not recognised as at 31 December):
+Dividends on ordinary shares proposed for approval
+4,450
+The non-deductible expenses mainly represent non-deductible impairment provision, write-offs and others.
+The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal
+debts, which is exempted from income tax.
+4,437
+83,150
+83,506
+share
+Final ordinary shares dividends for 2016: RMBO.2343 per
+(2015: RMBO.2333 per share)
+Dividends on ordinary shares declared and paid:
+2016
+2017
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+18. DIVIDENDS
+ICBC
+172
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2017 includes
+a profit of RMB269,205 million (2016: RMB261,218 million) which has been dealt with in the financial statements of the
+Bank (Note 42).
+Dividends on preference shares declared and paid: Dividends
+77,190
+1,479
+(9,312)
+Available-for-sale financial assets
+Held-to-maturity investments
+Financial investments:
+77
+The number of these individuals whose emoluments fell within the following bands is set out below.
+Number of employees
+2017
+2016
+RMB13,000,001 Yuan to RMB13,500,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB15,000,001 Yuan to RMB15,500,000 Yuan
+RMB17,000,001 Yuan to RMB17,500,000 Yuan
+RMB23,000,001 Yuan to RMB23,500,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+1
+1
+1
+1
+Others
+2
+-
+1
+1
+1
+5
+5
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2016: Nil).
+15. IMPAIRMENT LOSSES ON ASSETS OTHER THAN LOANS AND ADVANCES TO
+CUSTOMERS
+Notes
+2017
+2016
+Charge of impairment losses on:
+Due from banks and other financial institutions
+1
+27(d)
+66
+6
+82,694
+86,502
+3,000
+3,397
+1,952
+2,123
+77,742
+80,982
+2016
+2017
+(b) Reconciliation between income tax and accounting profit
+Deferred income tax expense
+Overseas
+Hong Kong and Macau
+Mainland China
+Current income tax expense:
+(a) Income tax expense
+16. INCOME TAX EXPENSE
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+171
+Annual Report 2017
+1,756
+3,673
+1,092
+3,363
+581
+106
+27(c)(i),(d)
+69
+92,541
+937
+138
+58,592
+118
+440
+440
+358
+358
+460
+460
+92
+118
+212
+250
+Former Shareholder Representative Supervisor
+Former External Supervisor
+DONG Juan(xiv)
+118
+Former Independent Non-executive Director
+440
+Former Independent Non-executive Director
+Kenneth Patrick CHUNG(xi)
+YI Xiqun(xii)
+WANG Chixi(xiii)
+ཙི , ,, , ཚ
+358
+539
+902
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+169
+Annual Report 2017
+Fees of Mr. Zhang Wei are his allowances obtained as Employee Representative Supervisors of the Bank; Mr. Hui Ping and
+Mr. Huang Li are their allowances obtained as Employee Representative Supervisors of the Bank, excluding their remuneration
+with the Bank in accordance with the employee remuneration system.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+The remuneration before tax payable to Directors and Supervisors for 2016 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2016 Annual
+Report.
+113
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+432
+9,766
+1,261
+3,366
+2,180
+2,959
+686
+216
+9,334
+(i)
+Former Independent Non-executive Director
+Former Non-executive Director
+455
+470
+293
+455
+470
+470
+470
+360
+293
+8ཊྚཉྫུ་་་''གླ་ཎྜཋབསླུ་'ཤྰ
+25
+50
+50
+250
+,,,,,, ''ཊྛབྷུg''ཋམཚ༷་་
+Former Chairman of the Board of Directors,
+Executive Director
+External Supervisor
+JIANG Jianqing(vii)
+280
+M-C-McCarthy(x)
+539
+970
+FU Zhongjun (ix)
+156
+Former Executive Director, Vice President
+WANG Xiquan(viii)
+60
+360
+67
+169
+181
+124
+280
+280
+25
+25
+50
+50
+754
+216
+24
+1,473
+(ii)
+(iv)
+During the year, there was no arrangement under which a Director or a Supervisor waived or agreed to waive any
+remuneration (2016: Nil).
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2016: Nil).
+170
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+14. FIVE HIGHEST PAID INDIVIDUALS
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 13 and 52(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+2017
+RMB'000
+2016
+RMB'000
+Salaries and allowances
+Discretionary bonuses
+75,134
+14,862
+15,865
+(iii)
+Contributions to defined contribution plans
+Others
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+(xiv) On 24 June 2016, Ms. Dong Juan ceased to act as External Supervisor of the Bank due to expiration of the term of
+office.
+Group
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun as
+Independent Non-executive Director due to work reasons, which became effective upon approval by CBRC of the
+qualification of the new Independent Non-executive Director in April 2016.
+(vi)
+(xiii) On 23 June 2016, Ms. Wang Chixi resigned from the position of Shareholder Representative Supervisor of the Bank
+citing her age.
+(vii)
+On 31 May 2016, the Board of Directors of the Bank appointed Mr. Yi Huiman as Chairman of the Board of Directors of
+the Bank, and his qualification was approved by CBRC in June 2016. At the Annual General Meeting for the Year 2015
+of the Bank held on 24 June 2016, Mr. Yi Huiman was appointed as Executive Director of the Bank. The new term of
+office of Mr. Yi Huiman took effect from the date of review and approval by the meeting.
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Mr. Gu Shu and Mr. Wang Jingdong
+were appointed as Executive Directors of the Bank. The qualifications of Mr. Gu Shu and Mr. Wang Jingdong were
+approved by CBRC in December 2016.
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Ms. Sheila Colleen Bair was appointed
+as Independent Non-executive Director of the Bank, and her qualification was approved by CBRC in March 2017.
+The Bank appointed Mr. Zhang Wei and Mr. Shen Bingxi as Shareholder Representative Supervisor and External
+Supervisor of the Bank respectively at the 2015 Annual General Meeting on 24 June 2016, and their terms of office
+took effect from the date of review and approval by the meeting. On 23 June 2016, Mr. Zhang Wei ceased to act as
+Employee Representative Supervisor of the Bank due to change of job.
+In May 2016, Mr. Jiang Jianqing resigned from the positions of Chairman of the Board of Directors and Executive
+Director citing his age.
+At the Second Extraordinary General Meeting of 2015 held on 21 December 2015, Mr. Yang Siu Shun was appointed
+as Independent Non-executive Director of the Bank, and his qualification was approved by CBRC in April 2016.
+(viii) In July 2016, Mr. Wang Xiquan resigned from the position of Executive Director of the Bank due to change of job.
+(ix)
+(x)
+(xi)
+(xii)
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank.
+(v)
+In October 2016, due to expiration of the term of office, Sir Malcolm Christopher McCarthy ceased to act as
+Independent Non-executive Director of the Bank.
+In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent
+Non-executive Director of the Bank.
+Market value of listed debt securities
+111,326
+2,876,081
+3,542,184
+120,395
+2,973,042
+2,814,291
+53,554
+3,439,471
+61,790
+Group
+186
+ICBC
+(c) Available-for-sale financial assets
+Available-for-sale financial assets comprise the following:
+(i)
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Bank
+2017
+6,688
+For the year ended 31 December 2017, the total carrying amount of held-to-maturity investments that the Group disposed
+prior to their maturity with remaining maturity more than three months was RMB11,661 million (31 December 2016:
+RMB19,446 million), which accounted for 0.33% (31 December 2016: 0.65%) of the total amount of the Group's held-to-
+maturity investments.
+4,793
+48,435
+3,386,243
+2,876,081
+2,861,716
+2016
+Debt securities
+3,542,351
+Less: Allowance for impairment losses
+(167)
+3,542,184
+2,973,149
+(107)
+2,973,042
+3,439,576
+(105)
+3,439,471
+2,876,120
+(39)
+Analysed into:
+Listed in Hong Kong
+2016
+Listed outside Hong Kong
+Group
+Bank
+2017
+2016
+2017
+2016
+27,532
+24,732
+92,886
+86,594
+3,421,766
+Unlisted
+55,102
+Special government bond
+2016
+1.67%
+1.60%
+1.62%
+1.55%
+Percentage of impaired loans and advances
+205,133
+27. FINANCIAL INVESTMENTS
+214,646
+220,988
+Identified impaired loans and advances
+12,033,200
+13,125,401
+12,767,334
+13,892,966
+211,801
+Group
+Bank
+2017
+Available-for-sale financial assets
+2,876,081
+3,439,471
+2,973,042
+3,542,184
+(b)
+Held-to-maturity investments
+263,456
+231,631
+291,370
+277,129
+Receivables
+2016
+2017
+2016
+92,727
+11,940,473
+(c)
+58,786
+13,066,615
+13,832,284
+Less: Allowance for impairment losses:
+154,185
+12,158,625
+12,312,810
+170,500
+13,284,917
+13,455,417
+160,469
+12,896,377
+13,056,846
+14,233,448
+14,057,020
+Individually assessed
+Collectively assessed
+Individually assessed
+impairment losses are:
+2017
+2016
+2017
+Bank
+176,428
+Collectively assessed
+(115,746)
+(65,557)
+Collectively assessed
+60,682
+Individually assessed
+allowance for impairment losses are:
+Net loans and advances for which
+(279,610)
+(330,016)
+(289,512)
+(340,482)
+(218,152)
+(218,302)
+(223,955)
+(224,736)
+(61,458)
+(111,714)
+94,912
+12,672,422
+2017
+1,496,453
+1,358,802
+277,129
+31,282
+232,174
+209,627
+257,589
+255,125
+Unlisted
+291,370
+22,004
+22,004
+Listed outside Hong Kong
+Analysed into:
+2016
+2017
+2016
+33,781
+231,631
+263,456
+Annual Report 2017
+2017
+Bank
+Group
+Held-to-maturity investments are stated at amortised cost and comprise the following:
+(b) Held-to-maturity investments
+Others include financial and corporate bonds, debt investment plans, asset backed securities, asset management
+plans, wealth management products and trust plans. They will mature from January 2018 to November 2032 and bear
+interest rates ranging from 2.00% to 7.50% per annum. During the reporting period, the amounts which have been
+matured have been repaid without overdue history.
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the MOF to the Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+The Huarong bonds are a series of long-term bonds issued by China Huarong Asset Management Co., Ltd.
+("Huarong") in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The
+proceeds from the issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are
+non-negotiable, with a tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank
+received a notice from the Ministry of Finance of the People's Republic of China (the "MOF") that the maturity dates
+of the Huarong bonds were extended for another ten years and the interest rate remains unchanged. Additionally,
+the MOF will continue providing funding in support of the repayment of the principal and interest of the bonds. As at
+31 December 2017, the Bank received accumulated early repayments amounting to RMB222,687 million.
+(iii)
+(ii)
+(i)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+185
+2017
+1,742,287
+Bank
+263,456
+Huarong bonds
+2016
+2017
+2016
+2017
+Bank
+(i)
+Group
+(a) Receivables
+4,748,376
+5,029,904
+5,006,699
+5,315,766
+1,608,839
+The receivables are stated at amortised cost and comprise the following:
+90,309
+94,249
+90,309
+231,631
+291,370
+277,129
+84,207
+56,322
+112,121
+101,820
+(iii)
+Others
+85,000
+85,000
+85,000
+85,000
+(ii)
+94,249
+Group
+2017
+2016
+2017
+Impairment loss:
+At 1 January 2016
+assessed
+assessed
+Collectively
+Individually
+Group
+Movements of allowance for impairment losses during the year are as follows:
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+182
+ICBC
+12,033,200
+(279,610)
+708,339
+12,312,810
+4,108,440
+7,496,031
+8,263,344
+4,843,049
+349,024
+13,455,417
+(330,016)
+13,125,401
+8,140,684
+4,196,169
+719,993
+13,056,846
+(289,512)
+12,767,334
+13,892,966
+(340,482)
+Less: Allowance for impairment losses
+14,233,448
+351,126
+4,945,458
+8,936,864
+Discounted bills
+Personal loans
+Corporate loans and advances
+― impairment allowances charged
+-impairment allowances transferred
+-reversal of impairment allowances
+51,499
+229,155
+15,113
+108,983
+Impairment loss:
+289,512
+223,955
+65,557
+At 31 December 2016 and 1 January 2017
+(74,144)
+(8,145)
+(65,999)
+Write-offs and others
+1,999
+773
+1,226
+2016
+Recoveries of loans and advances previously written off
+(5,135)
+Accreted interest on impaired loans (note 6)
+(176,431)
+(148,540)
+(27,891)
+(865)
+865
+262,569
+151,577
+110,992
+86,138
+2,172
+83,966
+Total
+280,654
+(5,135)
+2017
+2016
+2017
+368,466
+338,797
+396,263
+Banks
+counterparty:
+Reverse repurchases analysed by
+502,296
+750,763
+755,627
+986,631
+55,347
+58,045
+borrowing
+Cash advanced as collateral on securities
+333,410
+2016
+502,296
+2016
+700,280
+928,586
+Reverse repurchases (i)
+2017
+Bank
+Group
+Reverse repurchase agreements comprise reverse repurchases of securities, bills and cash advanced as collateral on securities
+borrowing.
+25. REVERSE REPURCHASE AGREEMENTS
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+181
+Annual Report 2017
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional) promulgated by the CBRC. The credit risk-weighted assets of the Group's
+derivative financial instruments include counterparty credit default risk-weighted assets, credit valuation adjustment
+risk-weighted assets and central counterparties credit risk-weighted assets.
+43
+57,800
+2017
+750,763
+124,096
+Other financial institutions
+361,483
+Bank
+Group
+26. LOANS AND ADVANCES TO CUSTOMERS
+As part of the reverse repurchase agreements, the Group has received securities that is allowed to sell or repledge in
+the absence of default by their owners. As at 31 December 2017, the Group had received securities with a fair value of
+approximately RMB157,222 million on such terms (31 December 2016: RMB183,262 million). Of these, securities with
+a fair value of approximately RMB136,694 million have been repledged under repurchase agreements (31 December
+2016: RMB181,959 million). The Group has an obligation to return the securities to its counterparties. If the collateral
+received declines in value, the Group may, in certain circumstances, require additional collateral.
+As at 31 December 2017, the amount of the placements through reverse repurchase agreements from the Group
+with non-principal guaranteed wealth management products sponsored by the Group was RMB329,559 million
+(31 December 2016: RMB126,706 million). During the year of 2017, the maximum exposure of the placements
+through reverse repurchase agreements from the Group with non-principal guaranteed wealth management products
+sponsored by the Group was RMB329,559 million (2016: RMB126,706 million). The transactions were conducted in
+the ordinary course of business under normal terms and conditions and at market rates.
+In accordance with master repurchase agreements and related supplementary agreements, the Group offsets
+reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and
+presents net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the
+financial statement. As at 31 December 2017, reverse repurchase agreements and repurchase agreements which
+meet the criteria for offsetting were RMB542,062 million and RMB560,138 million respectively (31 December
+2016: RMB633,828 million and RMB659,969 million respectively), and the net reverse repurchase agreements and
+net repurchase agreements were RMB137,155 million and RMB155,231 million, respectively (31 December 2016:
+RMB177,649 million and RMB203,790 million, respectively).
+(iii)
+(ii)
+(i)
+502,296
+750,763
+700,280
+928,586
+197,031
+532,323
+208,641
+207,123
+Bills
+305,265
+542,122
+511,254
+721,463
+Securities
+Reverse repurchases analysed by collateral:
+502,296
+750,763
+700,280
+928,586
+168,886
+382,297
+189,026
+― impairment allowances charged
+-impairment allowances transferred
+- reversal of impairment allowances
+645
+606
+བྱེ༔ གླ8
+(200)
+(194)
+(6)
+Disposals
+(4)
+(4)
+Reversals
+67
+70
+70
+Charge for the year
+67
+39
+678
+107
+and 1 January 2017
+At 31 December 2016
+1
+1
+11
+(2)
+(2)
+(7)
+G I
+5
+6
+(7)
+785
+13
+(194)
+Others
+2017
+2016
+104
+452
+(110)
+(446)
+(6)
+6
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+Group
+2017
+Notional amounts with remaining life of
+Over three
+Fair values
+Over
+(195)
+2016
+102,288
+2017
+120,301
+ICBC
+188
+Unlisted investments, at cost
+28. INVESTMENTS IN SUBSIDIARIES
+517
+412
+105
+646
+479
+167
+At 31 December 2017
+(5)
+(5)
+Bank
+45,993
+13
+13
+assessed
+47,874
+reversal of impairment allowances
+― impairment allowances charged
+-impairment allowances transferred
+Impairment loss:
+At 1 January 2016
+Collectively
+Individually
+Bank
+340,482
+224,736
+115,746
+At 31 December 2017
+2,264
+(72,201)
+(15,170)
+assessed
+(57,031)
+838
+1,426
+Recoveries of loans and advances previously written off
+(3,189)
+(3,189)
+Accreted interest on impaired loans (note 6)
+(169,935)
+(119,167)
+(50,768)
+(1,399)
+1,399
+294,031
+135,679
+158,352
+Write-offs and others
+13
+224,682
+83,172
+633
+606
+27
+768
+673
+95
+Total
+investments
+equity
+for-sale
+Held-to-
+maturity
+investments
+Total
+investments
+investments
+Total
+272,556
+equity
+for-sale
+Held-to-
+Bank
+Available-
+Others
+Reversals
+Charge for the year
+At 1 January 2016
+(861)
+861
+259,554
+149,603
+109,951
+83,971
+799
+maturity
+95,352
+78,922
+1,111
+Certain available-for-sale unlisted equity investments which do not have any quoted market prices and whose
+fair values cannot be measured reliably are stated at cost less any impairment. There is no active market for these
+investments and it is the Group's intention to dispose of them as opportunities arise. During the year, the carrying
+amount of these equity investments decreased by RMB71 million (2016: Nil). The gain on disposal of these equity
+investments is RMB743 million during the year (2016: Nil).
+When impairment of an available-for-sale investment measured at fair value occurs, any impairment recognised is
+recorded in the carrying amount directly. As at 31 December 2017, the available-for-sale financial assets measured
+at fair value include impaired debt securities whose carrying amount was RMB85 million (31 December 2016:
+RMB70 million), and impaired equity investments whose impairment provision has been fully charged
+(31 December 2016: impaired equity investments whose carrying amount was RMB65 million), with the accrual of
+impairment recognised in profit or loss for the year of RMB22 million (2016: accrual of impairment of RMB419 million)
+on available-for-sale debt securities; and the accrual of impairment recognised in profit or loss for the year of RMB84
+million (2016: accrual of impairment of RMB162 million) on available-for-sale equity investments.
+125,646
+762
+1,433
+174,364
+124,884
+172,931
+232,349
+3,128
+235,477
+4,663
+284,885
+Equity investments
+280,222
+Debt securities
+Market value of listed securities:
+76,512
+Annual Report 2017
+33,985
+23,294
+75,750
+32,552
+9,725
+18,631
+762
+1,430
+2,451
+3,262
+3
+677
+1,401
+Unlisted
+Listed outside Hong Kong
+12,853
+Listed in Hong Kong
+187
+Financial Statements for the year ended 31 December 2017
+months
+Over
+one year
+but within
+but within
+three
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2016
+(219)
+(219)
+Notes to the Financial Statements
+Liabilities
+49,811
+13,084
+34,715
+2,012
+49,811
+13,084
+34,715
+2,012
+Interest rate swap contracts
+Total
+five years
+five years
+(d) Movements of allowance for impairment losses of held-to-maturity investments and
+available-for-sale equity investments measured at cost during the year are as follows:
+(In RMB millions, unless otherwise stated)
+Assets
+830
+830
+Interest rate swap contracts
+Equity investments analysed into:
+1,324,817
+720
+973
+1,292
+Debt for equity swaps
+638
+568
+1,401
+3,002
+At cost (ii)
+75,874
+33,417
+11,452
+20,292
+At fair value (i)
+967
+Equity investments:
+6,164
+Other debt instruments, at fair value
+1,532,327
+2016
+1,324,817
+1,720,630
+1,466,995
+Debt securities, at fair value (i)
+Within
+three
+months
+but within
+one year
+but within
+Over
+8,804
+1,532,327
+Others
+1,106
+1,720,630
+1,466,995
+1,407,443
+1,151,886
+1,488,281
+1,186,773
+97,517
+126,430
+169,339
+187,684
+27,367
+46,501
+63,010
+92,538
+2,189
+Unlisted
+Listed in Hong Kong
+Debt securities analysed into:
+1,608,839
+1,358,802
+1,742,287
+1,496,453
+(606)
+(412)
+(678)
+(479)
+equity investments, at cost
+Less: Allowance for impairment losses of
+277
+260
+Listed outside Hong Kong
+Group
+1,302
+five years
+Currency derivatives
+38,569
+29,909
+61,333
+55,843
+risk-weighted assets
+Counterparty credit default
+2016
+Group
+Available-
+2016
+2017
+Bank
+Group
+The credit risk-weighted assets in respect of the above derivatives of the Group and the Bank as at the end of the reporting
+date are as follows:
+20,809
+Counterparty credit risk-weighted assets of derivative financial instruments
+Net investment hedges
+(127)
+176
+33,176
+4,222
+12,956
+14,696
+1,302
+Liabilities
+(127)
+Assets
+176
+33,176
+4,222
+12,956
+14,696
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+only in limited circumstances. Hedging is undertaken using deposits taken in the same currencies as the functional currencies
+of related branches and subsidiaries which are accounted for as hedges of certain net investment in foreign operations.
+As at 31 December 2017, a net accumulated gain from the hedging instrument of RMB708 million was recognised in "Other
+comprehensive income" on net investment hedges (as at 31 December 2016 net accumulated loss: RMB75 million), and
+there was no ineffectiveness in profit or loss that arises from the net investment hedges for the current year (2016: Nil).
+1,302
+32,381
+24,625
+2,478
+4,267
+risk-weighted assets
+Central counterparties credit
+19,188
+14,973
+31,541
+18,812
+risk-weighted assets
+Credit value adjustment
+2,835
+3,374
+11,935
+15,567
+13,535
+risk-weighted assets
+9,408
+12,231
+10,843
+16,393
+Commodity derivatives and others
+2
+25
+29
+Credit derivatives
+1,699
+769
+6,149
+3,045
+Interest rate derivatives
+Netting settled credit default
+one year
+14,801
+Interest rate swap contracts
+five years
+five years
+five years
+one year
+Over
+but within
+but within
+three
+months
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+Total
+2017
+(147)
+777
+54,438
+6,620
+31,715
+14,801
+1,302
+Liabilities
+(147)
+Assets
+777
+54,438
+6,620
+31,715
+Total
+five years
+Bank
+Total
+Interest rate swap contracts
+16,276
+five years
+one year
+months
+Over
+but within
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2,012
+2016
+Notes to the Financial Statements
+ICBC
+180
+(104)
+213
+19,994
+1,706
+16,276
+2,012
+(104)
+Liabilities
+Assets
+213
+19,994
+1,706
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Hedged items attributable to the hedged risk
+Hedging instruments
+(Loss)/gain arising from fair value hedges, net:
+86,138
+13,088
+73,050
+280,654
+93,167
+187,487
+― impairment allowances charged
+Impairment loss:
+192,057
+At 1 January 2016
+Personal loans
+loans and
+advances and
+discounted bills
+Corporate
+Group
+Movements of allowance for impairment losses during the year analysed into those attributable to corporate loans and
+advances and discounted bills and personal loans are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+Total
+70,512
+262,569
+― reversal of impairment allowances
+108,172
+Impairment loss:
+289,512
+98,883
+190,629
+At 31 December 2016 and 1 January 2017
+1,999
+(74,144)
+(8,145)
+(65,999)
+Write-offs and others
+773
+1,226
+Recoveries of loans and advances previously written off
+(5,135)
+(5,135)
+Accreted interest on impaired loans (note 6)
+(176,431)
+(57,424)
+(119,007)
+183
+Annual Report 2017
+330,016
+218,302
+months
+one year
+three
+but within
+but within
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Interest rate swap contracts
+1,953
+2,383
+6,441
+2,081
+12,858
+Within
+15,924
+Over
+Fair values
+111,714
+At 31 December 2017
+2,219
+(71,118)
+836
+(14,645)
+(56,473)
+Write-offs and others
+1,383
+Recoveries of loans and advances previously written off
+(3,166)
+(3,166)
+months
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, currency forward contracts
+and equity derivatives that are used to protect against exposures to variability of future cash flows.
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out
+below.
+Group
+2017
+Notional amounts with remaining life of
+Over three
+124,096
+— impairment allowances charged
+235,734
+290,880
+57,963
+232,917
+― impairment allowances charged
+122,471
+15,625
+106,846
+Impairment loss:
+279,610
+97,874
+181,736
+At 31 December 2016 and 1 January 2017
+1,928
+(73,734)
+(8,035)
+(65,699)
+Write-offs and others
+706
+1,222
+Recoveries of loans and advances previously written off
+reversal of impairment allowances
+(5,111)
+(126,071)
+(168,409)
+Group
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Loans and advances for which allowance for
+ICBC
+184
+330,016
+100,019
+229,997
+At 31 December 2017
+2,219
+(71,118)
+836
+(14,316)
+(56,802)
+Write-offs and others
+1,383
+Recoveries of loans and advances previously written off
+(3,166)
+(3,166)
+Accreted interest on impaired loans
+(42,338)
+152
+(5,111)
+(175,583)
+101,097
+239,385
+At 31 December 2017
+2,264
+(72,201)
+(14,548)
+(57,653)
+Write-offs and others
+838
+1,426
+Recoveries of loans and advances previously written off
+(3,189)
+(3,189)
+Accreted interest on impaired loans (note 6)
+(169,935)
+(42,373)
+(127,562)
+reversal of impairment allowances
+294,031
+58,297
+340,482
+Accreted interest on impaired loans
+Bank
+loans and
+(57,298)
+(118,285)
+― reversal of impairment allowances
+259,554
+70,133
+189,421
+83,971
+12,835
+71,136
+272,556
+92,368
+180,188
+- impairment allowances charged
+Impairment loss:
+At 1 January 2016
+Total
+Personal loans
+discounted bills
+advances and
+Corporate
+(22)
+one year
+1,617
+Total
+Assets
+Liabilities
+Interest rate swap contracts
+1,953
+190
+323
+2,466
+8
+(11)
+Currency swap contracts
+1,479
+730
+five years
+Currency swap contracts
+(45)
+1,479
+1,953
+920
+323
+4,675
+23
+(56)
+Interest rate swap contracts
+Currency swap contracts
+Currency forward
+2016
+Notional amounts with remaining life of
+15
+five years
+one year
+months
+4
+2
+Equity derivative
+64
+53
+44
+161
+14
+(5)
+275
+39,574
+10,207
+2,108
+52,164
+271
+(2,282)
+Bank
+2017
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+but within
+but within
+Over
+Fair values
+Over three
+Over
+Within
+three
+months
+156,823
+― impairment allowances charged
+122,471
+13,959
+108,512
+Impairment loss:
+279,610
+218,152
+61,458
+At 31 December 2016 and 1 January 2017
+(5,111)
+1,928
+(73,734)
+(8,035)
+(65,699)
+Write-offs and others
+706
+1,222
+Recoveries of loans and advances previously written off
+(5,111)
+Accreted interest on impaired loans
+(175,583)
+(147,943)
+(27,640)
+179
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Fair value hedges
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates. Interest rate swaps are used as hedging instruments to hedge the interest risk of
+financial assets and financial liabilities.
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+134,057
+4
+290,880
+reversal of impairment allowances
+months
+but within
+one year
+549
+34,670
+4
+35,223
+one year
+but within
+Over
+five years
+202
+five years
+232
+Total
+Assets
+Liabilities
+748
+983
+35,418
+10
+10
+(2,108)
+4
+2
+950
+232
+36,405
+22
+(2,108)
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedge for the current year (2016: Nil).
+Annual Report 2017
+Accreted interest on impaired loans
+(168,409)
+(118,696)
+(49,713)
+(1,402)
+1,402
+― impairment allowances transferred
+Currency forward contracts
+2,209
+10
+Over
+but within
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2016
+(67)
+229
+months
+15,723
+7,217
+2,808
+3,617
+41
+101
+46
+8
+47
+Equity derivative
+(45)
+36
+2,764
+730
+417
+(20)
+(2,257)
+one year
+2,081
+five years
+five years
+Total
+Assets
+Liabilities
+Interest rate swap contracts
+4,213
+9,415
+15,736
+245
+Currency swap contracts
+211
+2,108
+748
+36,263
+35,304
+4,052,540
+Time deposits
+Corporate deposits
+(%)
+Average cost
+Interest
+expense
+2017
+Item
+balance
+Average
+balance
+Interest
+expense
+Average cost
+Average
+90,893
+(%)
+In RMB millions, except for percentages
+2016
+2.24
+260,956
+91,153
+123,008
+8,481,624
+1.34
+127,882
+9,547,107
+Subtotal
+0.66
+31,855
+4,807,607
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+0.67
+36,989
+5,494,567
+Demand deposits(1)
+2.48
+3,674,017
+1.45
+Interest expense on deposits amounted to RMB260,956 million, representing an increase of RMB3,106 million or 1.2% as
+compared to that of last year, principally due to the expansion in the size of due to customers. The average cost of due
+to customers dropped by 11 basis points as a result of the repricing of deposits and changes in the maturity structure of
+deposits.
+Interest Expense
+182,589
+4,230,587
+Personal loans
+3.26
+22,107
+678,019
+3.94
+16,503
+418,935
+Discounted bills
+4.32
+4.58
+7,077,009
+4.36
+331,081
+7,589,729
+Corporate loans
+(%)
+Average yield
+Interest
+income
+balance
+(%)
+323,952
+3,786,442
+156,658
+4.14
+Interest income on due from banks and other financial institutions was RMB55,390 million, representing an increase of
+RMB24,105 million or 77.0% as compared to that of last year, principally due to the increase of 113 basis points in the
+average yield of due from banks and other financial institutions as affected by the rise of interest rates during the reporting
+period.
+♦ Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from central banks was RMB48,335 million, RMB3,657 million or 8.2% higher than that of the
+previous year, mainly because the increase in due to customers led to an increase in mandatory reserves.
+♦ Interest Income on Due from Central Banks
+Interest income on investment was RMB185,181 million, RMB7,883 million or 4.4% higher than that of the previous year,
+mainly because of the increase of the size of investment. Average yield of investment dropped by 4 basis points over the
+previous year.
+♦ Interest Income on Investment
+Discussion and Analysis
+ICBC
+16
+advances to customers
+4.25
+538,219
+3.18
+35,502
+1,117,216
+12,658,686
+4.23
+572,688
+13,535,464
+Total loans and
+3.28
+42,515
+1,296,213
+Overseas business
+♦ Interest Expense on Deposits
+Personal deposits
+Demand deposits
+4,448,649
+(%)
+Bank card business
+38,692
+37,670
+1,022
+2.7
+Personal wealth management and
+32,846
+Growth rate
+37,625
+(12.7)
+private banking services
+Settlement, clearing business and
+26,820
+26,108
+712
+2.7
+cash management
+(4,779)
+Increase/
+(decrease)
+2016
+2017
+1.42
+693,038
+16,878,531
+9,732
+1.40
+257,850
+1.53
+Total deposits
+Annual Report 2017
+17
+Discussion and Analysis
+♦ Interest Expense on Due to Banks and Other Financial Institutions
+Interest expense on due to banks and other financial institutions was RMB58,418 million, RMB14,104 million or 31.8%
+higher than the previous year, principally attributable to the rise of interest rates during the reporting period which then
+resulted in the increase of 48 basis points in the average cost of due to banks and other financial institutions.
+♦ Interest Expense on Debt Securities Issued
+Interest expense on debt securities issued was RMB20,142 million, RMB2,672 million or 15.3% higher than that of last year,
+mainly due to the issuance of financial bonds and bills by overseas institutions during the reporting period. Please refer to
+"Note 38. to the Financial Statements: Debt Securities Issued" for the debt securities issued by the Bank.
+Non-interest Income
+In 2017, non-interest income was RMB153,576 million, RMB16,259 million or 9.6% lower than that of last year, accounting
+for 22.7% of the Bank's operating income. Specifically, net fee and commission income dropped by 3.7% to RMB139,625
+million, and other non-interest income decreased by 43.9% to RMB13,951 million.
+NET FEE AND COMMISSION INCOME
+In RMB millions, except for percentages
+Item
+Investment banking business
+Time deposits
+23,189
+(1,835)
+125,110
+7,703,869
+1.52
+122,557
+8,068,894
+Subtotal
+0.31
+10,597
+1.62
+3,440,581
+14,115
+3,620,245
+18,335,825
+2.69
+114,513
+4,263,288
+2.44
+108,442
+0.39
+Overseas business
+719,824
+10,517
+(7.3)
+Corporate wealth management services
+18,984
+20,440
+(1,456)
+Interest
+income
+balance
+Item
+Average
+In RMB millions, except for percentages
+2016
+2017
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+4.25
+538,219
+12,658,686
+4.23
+572,688
+13,535,464
+1.46
+25,024
+Note: (1) Includes outward remittance and remittance payables.
+Net interest income
+2,672
+Non-interest-generating assets
+3.62
+791,480
+21,841,527
+3.67
+861,594
+23,464,831
+Total interest-generating assets
+2.22
+31,285
+1,412,253
+3.35
+55,390
+1,651,391
+Due from banks and other financial
+institutions(3)
+1,788,680
+1,708,483
+Allowance for impairment losses
+(322,769)
+2.19
+58,418
+2,668,436
+Due to banks and other financial
+1.53
+257,850
+16,878,531
+1.53
+1.42
+18,335,825
+Deposits
+Liabilities
+23,259,118
+24,930,742
+Total assets
+(290,892)
+260,956
+2,595,974
+44,678
+1.54
+cost (%)
+expense
+balance
+income/ Average yield/
+Average
+income/ Average yield/
+Average
+Interest
+Interest
+2016
+2017
+In RMB millions, except for percentages
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In 2017, net interest income was RMB522,078 million, RMB50,232 million or 10.6% higher than that of last year,
+accounting for 77.3% of the Bank's operating income. Interest income grew by RMB70,114 million or 8.9% to RMB861,594
+million and interest expenses increased by RMB19,882 million or 6.2% to RMB339,516 million. Net interest spread and
+interest margin came at 2.10% and 2.22%, 8 basis points and 6 basis points higher than those of the previous year,
+respectively.
+Net Interest Income
+balance
+expense
+cost (%)
+Item
+Assets
+48,335
+3,142,370
+Due from central banks(2)
+3.65
+177,298
+4,855,583
+3.61
+2,915,005
+185,181
+4.25
+538,219
+12,658,686
+4.23
+572,688
+13,535,464
+Loans and advances to customers
+Investment
+5,135,606
+44,314
+1.71
+institutions(3)
+3,657
+292
+3,365
+Due from central banks
+7,883
+(2,370)
+10,253
+Investment
+34,469
+(2,532)
+37,001
+Loans and advances to customers
+Assets
+Net increase/
+(decrease)
+Interest rate
+Due from banks and other financial institutions
+8,147
+15,958
+24,105
+14,104
+12,461
+1,643
+3,106
+(18,566)
+21,672
+Changes in net interest income
+Volume
+Changes in interest expenses
+Due to banks and other financial institutions
+Deposits
+Liabilities
+70,114
+11,348
+58,766
+Changes in interest income
+Debt securities issued
+Comparison between 2017 and 2016
+Increase/(decrease) due to
+In RMB millions
+Item
+Total Liabilities
+Non-interest-bearing liabilities
+1.60
+319,634
+19,996,202
+1.57
+339,516
+1,461,336
+23,079,401
+21,618,065
+3.35
+17,470
+521,697
+3.28
+20,142
+613,804
+Debt securities issued
+Total interest-bearing liabilities
+Discussion and Analysis
+1,363,841
+21,360,043
+522,078
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Discussion and Analysis
+15
+Annual Report 2017
+Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks
+and other financial institutions includes the amount of repurchase agreements.
+(3)
+(2)
+Net interest income
+Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+2.16
+2.22
+Net interest margin
+2.02
+2.10
+Net interest spread
+471,846
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+represent the average of the balances at the beginning of the year and that at the end of the year.
+ICBC
+14
+63.6
+13
+Discussion and Analysis
+FINANCIAL STATEMENT ANALYSIS
+Income Statement Analysis
+In 2017, with a focus on serving the real economy, the Bank deepened the operational transformation to enhance vitality
+and strictly controlled risks. While achieving positive interaction in terms of total amount, structure and quality, the Bank
+steadily increased the scale of assets and liabilities, stabilized and picked up the spread and enhanced the capacity of risk
+offsetting. In 2017, the Bank realized a net profit of RMB287,451 million, representing an increase of RMB8,345 million or
+3.0% as compared to the previous year. Return on average total assets stood at 1.14%, and return on weighted average
+equity was 14.35%. Operating income amounted to RMB675,654 million, representing an increase of 5.3%, of which net
+interest income stood at RMB522,078 million, representing a growth of 10.6%; non-interest income reported RMB153,576
+million, down by 9.6%. Operating expenses amounted to RMB186,194 million, representing a decrease of 3.6%, and the
+cost-to-income ratio was 26.45%. Allowance for impairment losses was RMB127,769 million, representing an increase of
+45.4%. Income tax expense reduced by 8.3% to RMB77,190 million.
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In RMB millions, except for percentages
+84,173
+77,190
+Less: Income tax expense
+0.4
+1,362
+363,279
+364,641
+Profit before taxation
+Annual Report 2017
+Asset scale of the banking industry grew steadily, with the quality of credit assets remaining stable overall. At the end of
+2017, the total assets of banking financial institutions (corporate) in China were RMB252.40 trillion, representing an increase
+of 8.68%. The balance of NPLs of commercial banks reached RMB1.71 trillion; NPL ratio was 1.74%; allowance to NPL was
+181.42%; core tier 1 capital adequacy ratio (CAR), tier 1 CAR and CAR were 10.75%, 11.35% and 13.65% respectively.
+Looking ahead to 2018, US economy growth is likely to keep leading the developed markets, the European economy will possibly
+grow stably, the Japanese economy will be subject to certain downward pressure, and the emerging markets will remain on a
+faster growth track. Along with the acceleration of shift from old to new growth drivers, the Chinese economy will become more
+resilient. The macro policies will focus on securing the victory in the "three tough battles" against material risks, poverty and
+pollution, and promoting high-quality development of economy. The monetary policy will remain prudent and neutral, regulate
+the "head gate" of money supply properly, and maintain reasonable growth of monetary credit and social financing. Besides,
+China will comprehensively employ a variety of instruments, strengthen pre-adjustments and fine-tuning, stabilize fluctuations
+in the market, and create a stable and slightly tight liquidity environment. China will remain steadfast to the active fiscal policy
+while adjusting and optimizing the fiscal expenditure structure and ensuring there are sufficient supports for key fields and
+projects such as the battle against poverty and pollution prevention and control. The structural reform on the supply side will
+deepen further with an emphasis on eliminating ineffective supplies, cultivating new growth momentum, and reducing cost.
+Both monetary credit and social financing expanded on a steady footing in general. At the end of 2017, the M2 balance was
+RMB167.68 trillion, representing an increase of 8.2%. The outstanding RMB loans reached RMB120.13 trillion, representing
+an increase of 12.7%. The balance of RMB deposits registered RMB164.10 trillion, representing an increase of 9.0%. Social
+financing increased by RMB19.44 trillion in 2017. Major stock indexes rose in volatile trading, with an increase of 6.6%
+and 8.5% in the Shanghai Composite Index and the Shenzhen Component Index respectively. The capitalization of the free
+float stocks on the Shanghai and Shenzhen stock markets increased by 14.2%. The total issuance amount of various bonds
+in the bond market reached RMB40.8 trillion, representing an increase of 12.2%. The bond trading price saw increased
+fluctuations, and the yield curve of T-bonds shifted upwards on a whole. The central parity of RMB against the US dollar was
+RMB6.5342 at the end of 2017, representing an accumulative appreciation of 6.16% for RMB.
+PBC implemented a prudent and neutral monetary policy, and cultivated a monetary and financial environment suitable
+for maintaining stable growth, making structural adjustments, promoting reform, improving living standards, deleveraging,
+curbing bubbles, and guarding against risks. It utilized multiple instruments to keep liquidity in basic stability, cut reserve
+requirement ratios of targeted financial institutions for the purpose of encouraging inclusive finance, channeled financial
+resources into the key fields and weak links of the economic and social development, and improved the twin-pillar
+control framework consisting of the monetary policy and the macro-prudential policy. The market-based RMB exchange
+rate formation mechanism was further improved. Efforts were made to further promote the financial institution reform,
+fully implement the reform package of development and policy financial institutions, and deepen the foreign exchange
+administration mechanism reform. Efforts were also made to promote the facilitation of trade and investment, instruct on
+how capital and financial projects could use foreign exchanges reasonably and compliantly, and strengthen foreign exchange
+monitoring, analysis and risk prevention.
+11
+President's Statement
+Third, the Bank focused on strengthening the growth momentum through business transformation. The Bank
+insisted on both transforming and upgrading the traditional momentum for growth and cultivating and expanding new
+growth momentum, and consolidated the profit growth framework of multi-source power and multi-point support.
+Benefiting from the solid customer base and active service improvement strategy, domestic RMB deposits increased by
+RMB1.35 trillion despite increasingly tightened social liquidity, which created the best comparable record over the past ten
+years among the banking sector. The mega retail strategy continued to grow with the net increase of individual customers
+amounting to 38.00 million, which was the highest in recent years. Among them, the number of credit card customers
+increased to 88.59 million, making the Bank the largest domestic credit card issuing bank. The businesses of mega asset
+management and mega investment banking were in line with regulatory requirements and changes in the environment,
+maintaining sound and stable development. Among them, income of asset management business continued to increase,
+nearly 1,500 branded investment banking projects were completed, and the Bank ranked first by number of merger
+and acquisition deals in the Asia-Pacific region for four consecutive years. The Bank steadily promoted internationalized
+operations and diversified development, and the overseas service network extended to 419 institutions in 45 countries and
+regions.
+Fourth, the Bank focused on stimulating business dynamism through reform and innovation. The reform presented
+comprehensive development force, in-depth advancement and multi-point breakthrough. Especially in implementing
+reforms in areas such as liberalization of interest rates, solving difficulties of troubled banks, improving competitiveness in
+key cities, personnel structure adjustment and optimization of outlet layout, as well as deepening innovation in terms of
+resource allocation, business authorization, evaluation and assessment, risk management and control and system processes,
+we further enhanced the vitality and creativity at all levels and in all fields. The Bank combined the development pattern
+of internet technology with the nature of financial services, and focused on building the "Intelligent Banking". The Bank
+accelerated the innovation in FinTech, established the Internet Finance Department, implemented the e-ICBC 3.0 strategic
+upgrading and established the "Seven Innovative Laboratories", which embodied the new image of the development of
+internet finance.
+In 2017, the Bank maintained its globally leading position in various core indicators, and ranked the 1st place among the Top
+1000 World Banks by The Banker, ranked 1st place in the Global 2000 listed by Forbes and topped the sub-list of commercial
+banks of the Global 500 in Fortune for the fifth consecutive year, and took the 1st place among the Top 500 Banking Brands
+of Brand Finance for the second consecutive year.
+Looking ahead to the future, 2018 is the year of challenge, as well as inspiration and hope. ICBC shall forever maintain
+the original commitment and craftsmanship to continuously lead the industry against the ever-changing trends. ICBC shall
+generate new ideas, set up new goals and secure new arrangement. Upholding the "fighter + doer" spirit, ICBC shall follow
+the New Long March in the New Era, consolidate and develop stable and promising operating status and continue to create
+value for investors and customers!
+12
+joint ventures
+ICBC
+.澍
+President: Gu Shu
+27 March 2018
+Discussion and Analysis
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+In 2017, the global economy recovered at a faster speed, with the developed economies including the US, Europe and
+Japan accelerated growth synchronously, China and India grew faster than the other emerging economies, Brazil and Russia
+crawled out of recession, the developed economies, typically the US, tightened their monetary policies, and a majority of
+the emerging markets maintained stable yet slightly loose monetary policies. International financial markets experienced
+significant volatility, with global stock markets rising continuously and collectively, commodity prices picking up generally,
+and bond markets falling in choppy trading.
+In 2017, the Chinese economy registered a stable but better-than-expected performance with good momentum for growth.
+China's gross domestic product (GDP), consumer price index (CPI), retail sales of consumer goods, fixed asset investment
+and industrial added value of above-scale enterprises rose by 6.9%, 1.6%, 10.2%, 7.2% and 6.6% respectively, while total
+imports and exports rose by 14.2%.
+谷
+13.3
+346
+2,604
+675,654
+(9.6)
+(16,259)
+169,835
+153,576
+10.6
+50,232
+641,681
+471,846
+(%)
+Growth rate
+Increase/
+(decrease)
+2016
+2017
+Operating income
+Non-interest income
+522,078
+Annual Report 2017
+33,973
+Less: Operating expenses
+2,950
+Shares of profits of associates and
+0.3
+1,016
+360,675
+361,691
+Operating profit
+5.3
+45.4
+87,894
+127,769
+Less: Impairment losses
+(3.6)
+(6,918)
+193,112
+186,194
+39,875
+3,037
+Second, the Bank strictly guarded the risk bottom line and the security line. The Bank has always regarded risk
+prevention and control as a must-win battle. Adhering to bank governance with strict discipline and governance by experts,
+the Bank coordinated risk management and control of credit risks and cross risks, on-balance sheet and off-balance sheet
+risks, domestic and overseas risks, and incremental volume and existing volume, and strengthened and consolidated
+the risk management in the "high-risk period" and "deep-water area". The overall quality of credit assets improved.
+"Scissors difference" between overdue and non-performing loans fell by more than 50%, and the overdue rate dropped
+0.64 percentage points while the allowance to NPL soared to 154.07%. The Bank improved the full-chain, full-type and
+full-coverage risk management system, strictly controlled the gatekeeping of cross risks, and defined and implemented new
+management requirements. It solidly carried out comprehensive remediation on various types of risks, strengthened the risk
+elimination and remediation accountability, and essentially achieved the regulatory target of "reduction of total number of
+incidents year-on-year and absence of major vicious incidents or risk events".
+Despite being faced with complicated contradictions and increasing risks and challenges, the Bank was able to achieve
+the operation results better than planned, better than the same period of previous year and better than expected, and
+maintained a stable and steady development trend, benefitting from always being able to maintain clear minds and strategic
+composure, observe the overall trend, implement practical work, and coordinate efforts to carry out initiatives such as
+strengthening entities, controlling risk and promoting reform.
+5,950
+868
+14.6
+Asset custody business
+6,731
+6,893
+(162)
+(2.4)
+Trust and agency services
+Others
+Fee and commission income
+1,805
+1,907
+(102)
+(5.3)
+6,818
+Guarantee and commitment business
+(7.1)
+(6,983)
+545
+857
+1,402
+Non-controlling interests
+company
+2.8
+7,800
+2,781
+278,249
+Attributable to: Equity holders of the parent
+3.0
+8,345
+279,106
+287,451
+Net profit
+(8.3)
+286,049
+3,097
+(316)
+(10.2)
+Standing in the new historical position and time coordinates, we will repack our luggage for a new journey. Guided by
+the new three-year plan, we will take enhancing the ability to create value as the overarching principle, take the five major
+strategic projects as the focus, namely, serving the real economy, serving the broadest customer base, transforming
+and upgrading, leading in innovation and risk control enhancement, and progress along the long march of the new
+era.
+The soul would have no rainbow had the eyes no tears. Great achievements belong to doers, not those who wait and see.
+The centenary foundation and mid-term vision will never come on its own as the four seasons do. We must carry forward
+the spiritual heritage and make sustained efforts to break new ground while upholding the "fighter + doer" culture with the
+makings of "reformer + innovator". It is the best salute to the Bank's history of over 30 extraordinary years, and the best
+commemoration of China's 40th anniversary of reform and opening up, and the best answer sheet we can deliver to this
+great era, and to all of our investors.
+The future has come. Let us define it with hard work.
+龄
+Chairman: Yi Huiman
+27 March 2018
+Standing in the new historical position and time coordinates, we have summarized a ten-point philosophy and
+strategy of bank governance to steer our course to the new era. Namely, we uphold Party building and scientific governance
+as the overarching principles, remain guided by strategies, follow the rules underlying commercial banking, remain
+customer-centric, adhere to reform-driven development, and unify tradition and innovation. We also combine uniform and
+category-based guidance, adhere to recreation of the Bank through IT revolution, carry on up-to-date risk management and
+strict bank governance, and integrate the "people-oriented" principle throughout business development and team building.
+Standing in the new historical position and time coordinates, we are striving for a critical leap development from
+a traditional large bank to a modernized strong bank, aiming to build a world-class and modern financial enterprise with
+global competitiveness by adhering to the principles of "delivering excellence, adhering to our founding mission,
+customers' favourite, leading in innovation, security and prudence, and people-oriented”. That is our vision for
+the new era. On that basis, we also envisage a higher goal to build a sustainable century-old bank. That is, ICBC will
+survive the tests of market changes, technological revolutions and economic cycles, standing tall and firm and winning an
+ever-lasting reputation internationally in a respectable manner.
+Annual Report 2017
+President's Statement
+President Gu Shu
+10
+ICBC
+President's Statement
+Spring brings a fresh look to everything. We are delighted to report to you on the Bank's operating results for the previous
+year. In 2017, the Bank achieved a net profit of RMB287.5 billion, representing an increase of 3.0% compared with last
+year, and 2.5 percentage points higher than the growth rate of last year. The total net profit remained the best in the global
+banking industry. The profit before provision reflecting the growth of the business reached RMB492.4 billion, representing
+an increase of 9.1%.
+Profitability is the final result and comprehensive reflection of operation and management, and its improvement mainly
+comes from three aspects. First, the effect of transformational innovation. The rapid emergence of new growth
+momentum has become the main driving force for profit growth. For example, the contribution of operating income from
+mega retail and the financial markets businesses continued to increase; the net profit of overseas and controlled institutions
+increased by 12.6%. Second, the effect of quality improvement. The NPL ratio dropped by 0.07 percentage points from
+the end of the previous year to 1.55%, which was the first time to achieve the "single drop" since the "double increase"
+of non-performing ratio and non-performing loans in 2013. Third, the effect of cost control. Net interest margin (NIM)
+increased by 6 basis points to 2.22% from the previous year, and the improvement of the deposit structure effectively
+reduced interest payment costs. The cost-to-income ratio was 26.45%, remaining at a good level among our peers.
+9
+First, the Bank improved the quality and efficiency of serving the real economy. It closely centered on development
+of the real economy and the supply-side structural reform, improved the investment and financing integration service
+mechanism and business layout, enhanced the level of financial service provision, promoted the growth of real economy in
+terms of "volume", "size" and "quality", and promoted the virtuous cycle of the real economy and business development.
+During the year, RMB2.8 trillion loans were extended, of which RMB1.87 trillion was recovered and re-extended; the
+incremental volume of non-credit financing also exceeded RMB1 trillion. The Bank served the "13th Five-Year Plan",
+"four regions", "three supporting belts" and construction of Xiong'an New Area, and stepped up its support for
+key projects and programs. RMB1.14 trillion of domestic project loans were extended accumulatively, increased by
+RMB 193 billion compared with the same period last year. It recently supported 123 "Going Global" projects with total loan
+amount of USD33.9 billion. The Bank successfully issued the Belt and Road green bonds and led the establishment of the
+Belt and Road Inter-bank Regular Cooperation Mechanism. It set up the Inclusive Finance Department, and demonstrated
+the assumption of responsibility as a big bank in areas such as supporting small and micro businesses, "agriculture, rural
+areas, and rural residents", "business startups and innovation" and poverty relief. Small and micro loans increased by 9%,
+completing the "three not-less-than" regulatory target, and the outstanding loans for targeted poverty relief exceeded
+RMB100 billion. Overcapacity was reduced steadily and orderly; excessive inventory was reduced in line with the policies of
+different cities; deleveraging was supported with various measures so as to better serve the fundamental task of supply-side
+structural reform.
+Time has no color. However, the age of striving for a new era becomes colorful as
+we are drawing a new blueprint of development before the new starting line.
+Average
+158,666
+164,714
+(6,048)
+(3.7)
+Less: Fee and commission expense
+Net fee and commission income
+19,041
+139,625
+Chairman's Statement
+19,741
+(3.5)
+144,973
+(5,348)
+(3.7)
+With a focus on satisfying the financial needs of consumers, the Bank continued to increase its offering of settlement
+business with favourable terms, actively promoted the implementation of inclusive finance, and continued to reduce fees
+and provide concessions to the real economy and consumers. In 2017, the Bank realized net fee and commission income of
+RMB139,625 million, RMB5,348 million or 3.7% lower than that of the previous year, as a result of multiple factors such as
+fluctuations in bonds and capital markets, regulatory oversight of insurance products and implementation of replacement of
+business tax with VAT during the reporting period, the yields from agency funds and insurance, private banking, investment
+and financing advisory, bond issuance and underwriting, corporate wealth management and other businesses witnessed a
+decline, while the Bank took the initiative to reduce fees and provide concessions.
+18
+ICBC
+(700)
+(365)
+Average yield
+26,352
+(%)
+Short-term loans
+3,632,235
+137,050
+3.77
+4,043,710
+144,349
+3.57
+Medium to long-term
+9,903,229
+435,638
+4.40
+8,614,976
+Item
+4.57
+loans
+Total loans and
+advances to customers
+Average yield
+Interest
+income
+393,870
+(%)
+balance
+(6,470)
+32,414
+17,818
+50,232
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+Interest Income
+♦ Interest Income on Loans and Advances to Customers
+Interest income on loans and advances to customers was RMB572,688 million, RMB34,469 million or 6.4% higher than
+those of the previous year, as affected by the increase in loans and advances to customers. Average yield of loans and
+advances to customers dropped by 2 basis points over the previous year.
+19,882
+In RMB millions, except for percentages
+2016
+2017
+Average
+Item
+balance
+Interest
+income
+Average yield
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Average
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+197
+Annual Report 2017
+There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value of
+the financial liabilities that were attributable to changes in credit risk were considered insignificant during the year of 2017
+and 2016 cumulatively. The changes in fair value of the financial liabilities were mainly attributable to changes in other
+market factors.
+(c)
+As at 31 December 2017, the fair value of the financial liabilities related to precious metals was higher than the
+amount that the Group would be contractually required to pay to the holders by RMB156 million (31 December 2016:
+approximately the same).
+As at 31 December 2017, the fair value of structured deposits was approximately the same as the amount that the
+Group would be contractually required to pay to the holders of these structured deposits upon maturity (31 December
+2016: approximately the same).
+(b)
+(a)
+Structured deposits, certain financial liabilities related to debt securities and precious metals have been matched with
+derivatives or precious metals as part of a documented risk management strategy of the group to mitigate market risk, such as
+interest rate risk. An accounting mismatch would arise if these financial liabilities were accounted at amortised cost, whereas
+the related derivatives or precious metals were measured at fair value with movements in the fair value taken through
+profit or loss. By designating these financial liabilities at fair value through profit or loss, the movement in their fair values is
+recorded in the statement of profit or loss.
+34. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+The debt securities including one note issued by Sydney Branch at floating rates as well as five notes at fixed rates
+in 2016 and 2017, one note issued by London Branch in 2015 at a fixed rate and five equity-linked notes issued by
+ICBC Asia in 2016 and 2017 were classified as financial liabilities designated at fair value through profit or loss. The
+fair value of the debt securities is lowered than the amount that the group would be contractually required to pay to
+the holder of these debt securities upon maturity as at 31 December 2017 by RMB364 million (31 December 2016:
+RMB555 million lower).
+Group
+1,096,021
+2017
+2016
+2017
+2016
+Deposits:
+Banks and other financial institutions
+operating in Mainland China
+1,106,888
+1,437,462
+1,431,325
+Banks and other financial institutions
+operating outside Mainland China
+107,713
+1,214,601
+79,230
+1,516,692
+55,018
+1,151,039
+Bank
+The principal guaranteed wealth management products issued by the Group and the financial assets invested by the
+aforementioned products form part of a group of financial instruments that are together managed on a fair value basis,
+and are classified as financial liabilities and financial assets designated at fair value through profit or loss, respectively. The
+fair value of the wealth management products was RMB1,043 million higher than the amount that the Group would be
+contractually required to pay to the holders of the wealth management products upon maturity as at 31 December 2017
+(31 December 2016: RMB510 million higher).
+60,183
+(1)
+337,142
+270,831
+334,469
+270,831
+Structured deposits
+(2)(a)
+10,203
+17,797
+10,203
+8,674
+Financial liabilities related to
+precious metals
+(2)(b)
+40,214
+1,471,539
+(2)
+59,192
+59,185
+Debt securities
+(2)(c)
+8,192
+13,377
+2,919
+13,311
+Other
+10,228
+5,555
+425,948
+366,752
+407,766
+352,001
+60,175
+Money market takings:
+998,466
+operating in Mainland China
+304,987
+810,610
+589,306
+1,046,338
+28,275
+37,246
+securities lending
+Cash received as collateral on
+2016
+304,987
+2017
+810,610
+561,031
+1,009,092
+Repurchases (note 25(i))
+2016
+2017
+Bank
+Group
+350,893
+365,371
+388,171
+419,098
+491,948
+500,107
+Repurchases analysed by counterparty:
+445,193
+1,706,549
+2,016,799
+1,596,232
+1,920,782
+35. REPURCHASE AGREEMENTS
+Repurchase agreements comprise repurchases of securities, bills and cash received as collateral on securities lending.
+449,243
+Banks and other financial institutions
+Banks
+366,384
+141,055
+134,736
+57,022
+ICBC
+198
+Certificates of deposit issued by Hong Kong Branch, Tokyo Branch, Luxembourg Branch, Seoul Branch, Doha Branch, New
+York Branch, Sydney Branch, Abu Dhabi Branch, Mumbai Branch, London Branch, Dubai (DIFC) Branch, ICBC Asia, ICBC
+London, ICBC Macau, ICBC New Zealand and ICBC Standard were recognised at amortised cost.
+36. CERTIFICATES OF DEPOSIT
+304,987
+810,610
+561,031
+1,009,092
+7,753
+10,603
+297,234
+800,007
+553,278
+7,753
+10,626
+809,823
+304,587
+Other financial institutions
+143,742
+194,647
+787
+865,350
+400
+561,031
+810,610
+304,987
+Repurchases analysed by collateral:
+Securities
+Bills
+(1)
+1,009,092
+Wealth management products
+8,273
+23,529
+2017
+(4,690)
+598
+(34)
+(4,126)
+27,334
+9,154
+10,762
+47,250
+2016
+Deferred income tax assets:
+At
+At
+1 January
+2016
+Others
+Recognised in
+profit or loss
+equity
+31 December
+2016
+Allowance for impairment losses
+28,054
+12
+28,066
+Change in fair value of available-for-sale
+financial assets
+(9,343)
+8,663
+(680)
+Change in fair value of financial instruments
+at fair value through profit or loss
+Accrued staff costs
+(798)
+Recognised in
+6,910
+(116)
+(475)
+195
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Bank
+At
+At
+1 January
+Recognised in
+2017
+Deferred income tax assets:
+2017
+profit or loss
+Recognised in
+equity
+31 December
+2017
+Allowance for impairment losses
+28,066
+7,026
+Accrued staff costs
+(2,369)
+19
+(2,388)
+at fair value through profit or loss
+(1,590)
+Change in fair value of financial instruments
+10,796
+(680)
+financial assets
+Change in fair value of available-for-sale
+36,719
+8,653
+10,116
+2016
+(2,388)
+(148)
+Settlement accounts
+137,022
+182,118
+115,585
+391
+148,610
+Goodwill (i)
+8,956
+9,480
+Repossessed assets
+8,634
+Others
+25,330
+30,145
+571,669
+460
+585,733
+8,099
+8,713
+479,196
+196
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(i)
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash
+flow projections are based on financial forecasts approved by management of the subsidiaries. The average growth
+rates are projected based on the similar rates which do not exceed the long term average growth rate for the business
+in which the CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+As indicated by the impairment tests, goodwill arising from business combinations is not impaired and thus, no
+impairment loss was recognised.
+33. FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Group
+Bank
+2017
+2016
+8,415
+9,357
+483,090
+10,680
+8,217
+Advance payments
+7,026
+Others
+(4,733)
+20,354
+45
+(1,681)
+(4,690)
+8,661
+27,334
+The Group and the Bank did not have significant unrecognised deferred income tax assets or liabilities at the end of the
+reporting period.
+32. OTHER ASSETS
+Group
+Bank
+2017
+2016
+2017
+2016
+Interest receivable
+19,198
+18,138
+19,264
+18,190
+Land use rights
+189,722
+7,174
+212,491
+238,714
+Precious metals
+104,463
+118,644
+112,298
+126,606
+220,091
+Banks and other financial institutions
+operating outside Mainland China
+(New Zealand) Limited
+995
+100,307
+901,048
+970,202
+992,219
+1,070,509
+Other comprehensive income
+Profit from continuing operations
+Revenue
+Net assets
+Liabilities
+Assets
+Gross amounts of the associate
+2016
+2017
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts using the equity method in the Group's consolidated financial statements is as follows:
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+190
+The market value of the Group's investment in Standard Bank amounts to RMB33,564 million as at 31 December 2017
+(31 December 2016: RMB25,067 million).
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the
+Group to widen its customer base in Africa.
+(i)
+Republic of
+South Africa
+Johannesburg, Commercial banking
+20.07
+20.08
+20.07
+91,171
+54,624
+48,603
+13,891
+The following tables illustrate the summarised financial information of the associates that are not individually material
+to the Group:
+(ii)
+26,551
+28,248
+in the consolidated financial statements
+Carrying amount of the Group's interest in Standard Bank
+10,726
+11,139
+Goodwill
+15,825
+17,109
+Group's share of net assets of the associate
+20.08%
+Principal
+activities
+20.07%
+78,814
+85,254
+Gross amounts of net assets of the associate attribute to the parent company
+Reconciled to the Group's interests in the associate
+5,579
+7,176
+Dividends received from the associate
+5,296
+11,391
+Total comprehensive income
+(5,512)
+(2,500)
+10,808
+Group's effective interest
+registration
+2017
+2016
+2016
+2017
+Group
+30,077
+32,441
+2,634
+3,855
+(b)
+27,443
+28,586
+흐흐
+2016
+2017
+Share of net assets
+Group
+Interest in associates
+Investment in associates and joint ventures comprise the following:
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+189
+Annual Report 2017
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+*
+Financial asset
+investment
+Interest in joint ventures
+2017
+Goodwill
+19,663
+2017
+incorporation/
+31 December
+31 December 31 December
+Place of
+Voting
+rights %
+2016
+34,242
+34,242
+2017
+Bank
+("Standard Bank") (i)
+Standard Bank Group Limited
+Name
+21,614
+equity interest %
+Particulars of the Group's only material associate are as follows:
+(i)
+(a) Interest in associates
+Shares listed outside Hong Kong, at cost
+30,077
+32,441
+(348)
+(348)
+Less: Allowance for impairment losses
+30,425
+32,789
+10,762
+11,175
+Percentage of
+Banking
+2016
+Profit from continuing operations
+371,420
+122,507
+75,993
+10,073
+23,009
+139,838
+At 31 December 2016 and 1 January 2017
+(16,274)
+(12,508)
+(2,497)
+(198)
+(241)
+(830)
+Disposals
+3,978
+404
+(9,741)
+5,359
+CIP transfer in/(out)
+53,850
+38,252
+6,911
+762
+6,849
+1,076
+Additions
+333,844
+Additions
+922
+11,993
+438
+50,103
+6,585
+41
+45,667
+At 1 January 2016
+Accumulated depreciation and impairment:
+382,663
+127,762
+72,437
+10,375
+29,572
+142,517
+At 31 December 2017
+92,785
+(22,977)
+(8,345)
+(136)
+(97)
+(1,347)
+Disposals
+2,162
+67
+(5,333)
+3,104
+CIP transfer in/(out)
+34,220
+16,145
+4,722
+(13,052)
+71,175
+9,509
+26,142
+Aggregate amounts of the Group's share of those joint ventures:
+in the consolidated financial statements
+Aggregate carrying amount of individually immaterial joint ventures
+The Group has interests in a number of individually immaterial joint ventures. The following tables illustrate the summarised
+financial information of the joint ventures that are not individually material to the Group:
+(b) Interest in joint ventures
+All of the above associates are accounted for using the equity method in the consolidated financial statements.
+27,443
+28,586
+Interest in associates in the consolidated financial statements
+(348)
+(348)
+Less: Allowance for impairment losses
+1,240
+Profit from continuing operations
+686
+2016
+26,551
+28,248
+Carrying amount of material associates — Standard Bank
+2017
+(iii) Reconciliation of carrying amounts to the Group's total interests in the associates:
+335
+(245)
+Total comprehensive income
+306
+(285)
+Other comprehensive income
+29
+40
+Carrying amount of individually immaterial associates
+Aggregate amounts of the Group's share of those associates:
+Other comprehensive income
+2017
+134,233
+At 1 January 2016
+Cost:
+Total
+vessels
+vehicles
+Aircraft and
+and motor
+Leasehold
+improvements
+Construction
+in progress
+Properties and
+buildings
+Office
+equipment
+Group
+Total comprehensive income
+30. PROPERTY AND EQUIPMENT
+Notes to the Financial Statements
+191
+Annual Report 2017
+All of the above joint ventures are accounted for using the equity method in the consolidated financial statements.
+426
+118
+21
+(20)
+405
+138
+2,634
+3,855
+2016
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+7,022
+London,
+United Kingdom
+Nanjing, the PRC
+RMB12,000 million
+RUB10,810 million
+100
+100
+100
+Bank ICBC (Joint stock company)
+banking
+Commercial
+Jakarta, Indonesia
+USD361 million
+IDR3,692 billion
+98.61
+98.61
+98.61
+PT. Bank ICBC Indonesia ("ICBC Indonesia")
+banking
+management
+Commercial
+Luxembourg
+EUR437 million
+EUR437 million
+100
+10
+100
+100
+Industrial and Commercial Bank of China
+(Europe) S.A.
+Co., Ltd. *
+Fund
+Beijing, the PRC
+RUB10,810 million
+Moscow, Russia
+Commercial
+banking
+Co., Ltd. *
+Commercial
+Zhejiang, the PRC
+RMB120 million
+RMB200 million
+60
+60
+60
+Zhejiang Pinghu ICBC Rural Bank
+banking
+(Macau) Limited ("ICBC Macau")
+Commercial
+Macau, the PRC
+RMB433 million
+MOP12,064 million
+89.33
+89.33
+89.33
+Industrial and Commercial Bank of China
+("ICBC Leasing")
+Leasing
+Tianjin, the PRC
+RMB11,000 million
+RMB11,000 million
+100
+100
+100
+ICBC Financial Leasing Co., Ltd. *
+MOP589 million
+RMB200 million
+80
+80
+ICBC International Holdings Limited
+banking
+(Asia) Limited ("ICBC Asia")
+Commercial
+Hong Kong, the PRC
+activities
+and operations
+by the Bank
+HKD46,930 million
+HKD36,379 million
+100
+100
+100
+Industrial and Commercial Bank of China
+100
+2017
+2016
+2017
+Name
+Principal
+registration
+Amount
+invested
+issued share/
+paid-in capital
+Percentage of equity interest % Voting rights %
+Nominal value of
+Place of
+incorporation/
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+2017
+banking
+100
+0
+80
+ICBC Credit Suisse Asset Management
+banking
+United Kingdom
+banking
+Commercial
+London,
+USD200 million
+USD200 million
+100
+Commercial
+Almaty, Kazakhstan
+KZT8,933 million
+KZT8,933 million
+100
+100
+00
+100
+100
+ICBC (London) PLC ("ICBC London")
+(Almaty) Joint Stock Company
+100
+100
+Industrial and Commercial Bank of China
+banking
+("ICBC International")
+Investment
+HKD4,882 million Hong Kong, the PRC
+HKD4,882 million
+10
+RMB12,000 million
+Chongqing Bishan ICBC Rural Bank Co., Ltd. *
+80
+Auckland,
+New Zealand
+Annual Report 2017
+NZD145 million
+NZD145 million
+100
+100
+100
+Industrial and Commercial Bank of China
+banking
+Commercial
+Sao Paulo, Brazil
+Real202 million
+Real202 million
+10
+100
+10
+100
+00
+100
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+Commercial
+banking
+banking
+Commercial
+Insurance
+Commercial
+New York,
+United States
+Buenos Aires,
+Argentina
+Lima, Peru
+USD50 million
+USD50 million
+100
+and investment
+banking
+Commercial
+banking
+("ICBC New Zealand")
+Industrial and Commercial Bank of China
+100
+100
+ICBC Financial Asset Investment Co., Limited*
+("ICBC Standard")
+USD839 million
+USD1,083 million
+60
+60
+60
+ICBC Standard Bank PLC
+banking
+("ICBC Turkey")
+banking
+Commercial
+100
+Istanbul, Turkey
+TRY860 million
+92.84
+92.8169
+92.84
+ICBC Turkey Bank Anonim Şirketi
+Mexico S.A.
+Commercial
+Mexico City, Mexico
+MXN1,597 million
+MXN1,597 million
+100
+100
+100
+USD425 million
+100
+10
+ICBC PERU BANK
+THB23,711 million
+97.86 THB20,132 million
+97.86
+97.86
+Industrial and Commercial Bank of China
+MYR833 million
+MYR833 million
+100
+00
+100
+00
+100
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+banking
+banking
+Commercial
+Commercial
+Chongqing,
+the PRC
+Toronto, Canada
+CAD178.66 million
+CAD158 million
+80
+80
+80
+Industrial and Commercial Bank of China
+RMB100 million
+RMB100 million
+100
+100
+(Canada)
+100
+Commercial
+(Thai) Public Company Limited
+(Argentina) S.A.("ICBC Argentina")
+ARS3,505 million
+ARS1,345 million
+80
+80
+80
+Industrial and Commercial Bank of China
+Broker dealer
+Delaware and
+New York,
+United States
+Shanghai, the PRC
+RMB7,980 million
+USD258 million
+RMB12,505 million
+USD309 million
+80
+80
+banking
+Commercial
+80
+60
+60
+60
+ICBC-AXA Assurance Co., Ltd. *
+USD50.25 million
+USD50 million
+100
+100
+100
+100
+Industrial and Commercial Bank of China
+Financial Services LLC
+("ICBC Thai")
+banking
+Industrial and Commercial Bank of China
+(USA) NA
+109,418
+Depreciation charge for the year
+5,646
+Change in fair value of available-for-sale
+28,066
+112,098
+36,719
+146,986
+Allowance for impairment losses
+tax assets/
+(liabilities)
+Deferred
+income
+Deductible/
+(taxable)
+temporary
+differences
+(liabilities)
+differences
+Deferred
+income
+tax assets/
+temporary
+(taxable)
+Deductible/
+2016
+2017
+Deferred income tax assets:
+Bank
+604
+2,471
+433
+1,674
+849
+3,368
+973
+4,053
+financial assets
+40,057
+10,116
+(2,816)
+financial assets
+Change in fair value of available-for-sale
+Allowance for impairment losses
+Deferred income tax assets:
+2017
+Group
+(b) Movements of deferred income tax
+27,334
+109,021
+47,250
+188,604
+(4,690)
+(18,813)
+Others
+(4,126)
+Others
+7,026
+28,104
+6,910
+27,640
+Accrued staff costs
+(2,388)
+(9,552)
+(2,369)
+(9,495)
+at fair value through profit or loss
+Change in fair value of financial instruments
+(680)
+(16,584)
+120
+563
+(38)
+113,473
+48,392
+193,552
+(3,886)
+(15,847)
+(3,373)
+(13,561)
+Others
+7,026
+28,104
+6,910
+27,640
+Accrued staff costs
+28,398
+(2,385)
+(2,368)
+(9,491)
+at fair value through profit or loss
+Change in fair value of financial instruments
+(973)
+(4,005)
+9,748
+38,471
+financial assets
+Change in fair value of available-for-sale
+28,616
+114,765
+37,475
+(9,544)
+Change in fair value of financial instruments
+Annual Report 2017
+Notes to the Financial Statements
+(367)
+financial assets
+Change in fair value of available-for-sale
+(365)
+(1,460)
+(502)
+(2,012)
+Allowance for impairment losses
+Deferred income tax liabilities:
+liabilities/
+(assets)
+income tax
+Deferred
+differences
+193
+(assets)
+liabilities/
+(deductible)
+income tax
+Taxable/
+Deferred
+2016
+2017
+differences
+temporary
+(deductible)
+Taxable/
+Group
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+temporary
+150,493
+at fair value through profit or loss
+Others
+Others
+7,026
+(148)
+7,174
+Accrued staff costs
+(2,385)
+(1,595)
+(790)
+at fair value through profit or loss
+Change in fair value of financial instruments
+(973)
+8,697
+(9,670)
+financial assets
+Change in fair value of available-for-sale
+28,616
+173
+28,443
+Allowance for impairment losses
+2016
+equity
+profit or loss
+2016
+31 December
+Recognised in
+Recognised in
+1 January
+(4,091)
+175
+30
+(3,886)
+849
+153
+696
+Others
+120
+(475)
+595
+financial assets
+Change in fair value of available-for-sale
+(365)
+(69)
+(296)
+Allowance for impairment losses
+At
+2016
+Recognised in
+equity
+profit or loss
+2016
+Deferred income tax liabilities:
+2016
+Recognised in
+1 January
+At
+At
+28,398
+8,727
+(1,395)
+21,066
+31 December
+At
+Deferred income tax assets:
+2016
+10,695
+9,299
+28,398
+6,910
+(3,373)
+(26)
+539
+(3,886)
+(116)
+7,026
+(2,368)
+17
+(2,385)
+9,748
+48,392
+10,721
+37,475
+8,859
+28,616
+31 December
+2017
+equity
+Recognised in
+Recognised in
+profit or loss
+2017
+1 January
+At
+At
+ICBC
+194
+(973)
+Accrued staff costs
+Group
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+433
+(158)
+(13)
+604
+973
+124
+849
+Others
+(38)
+(158)
+120
+financial assets
+Change in fair value of available-for-sale
+Notes to the Financial Statements
+(502)
+(365)
+Allowance for impairment losses
+Deferred income tax liabilities:
+2017
+31 December
+Recognised in
+equity
+profit or loss
+2017
+2017
+Recognised in
+1 January
+At
+At
+(137)
+Allowance for impairment losses
+Deferred
+income
+tax assets/
+(liabilities)
+Deductible/
+(taxable)
+temporary
+differences
+16,716
+137,283
+At 31 December 2016 and 1 January 2017
+(3,547)
+(2,487)
+(82)
+(193)
+(785)
+Disposals
+404
+(5,722)
+5,318
+CIP transfer in/(out)
+9,270
+4,800
+634
+2,900
+936
+Additions
+230,006
+69,718
+8,743
+19,731
+131,814
+At 1 January 2016
+Cost:
+Total
+9,295
+72,435
+235,729
+Additions
+100,337
+49,143
+6,177
+41
+44,976
+At 1 January 2016
+Accumulated depreciation and impairment:
+240,681
+70,684
+9,570
+20,214
+140,213
+At 31 December 2017
+vehicles
+(7,453)
+(103)
+(90)
+(995)
+Disposals
+60
+(3,132)
+3,072
+CIP transfer in/(out)
+12,405
+4,454
+378
+6,720
+853
+(6,265)
+and motor
+Leasehold
+improvements
+Construction
+in progress
+558
+Impairment charge for the year
+17,958
+4,085
+7,283
+936
+5,654
+Depreciation charge for the year
+125,211
+11,276
+55,597
+7,483
+41
+558
+50,814
+(4,460)
+(1,339)
+(2,453)
+(169)
+(499)
+Disposals
+492
+492
+Impairment charge for the year
+19,761
+5,101
+7,947
+1,067
+At 31 December 2016 and 1 January 2017
+Depreciation charge for the year
+Disposals
+(101)
+Properties and
+buildings
+Office
+equipment
+Bank
+247,744
+113,323
+15,962
+2,057
+29,531
+86,871
+At 31 December 2017
+246,209
+111,231
+20,396
+(822)
+2,590
+89,024
+At 31 December 2016
+Net carrying amount:
+134,919
+14,439
+56,475
+8,318
+41
+55,646
+At 31 December 2017
+(8,808)
+(1,480)
+(6,405)
+22,968
+5,594
+987
+7,713
+70,523
+65,600
+71,424
+66,086
+37
+33
+640
+458
+Held overseas
+152
+163
+316
+212
+Short-term leases (less than 10 years):
+Held in Hong Kong
+65,404
+70,468
+65,416
+Held in the PRC (other than Hong Kong)
+Medium-term leases (10 to 50 years):
+13,586
+17,885
+14,504
+19,132
+176
+53
+741
+633
+70,334
+Held overseas
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+3,034
+Deferred
+income
+tax assets/
+(liabilities)
+differences
+temporary
+Deductible/
+(taxable)
+2016
+2017
+Deferred income tax assets:
+Group
+31. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+As at 31 December 2017, the net carrying value of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB68,355 million (31 December 2016: RMB34,174 million).
+As at 31 December 2017, the net carrying value of aircraft and vessels leased out by the Group under operating leases was
+RMB113,323 million (31 December 2016: RMB111,231 million).
+As at 31 December 2017, the process of obtaining the title for the Group's properties and buildings with an aggregate net
+carrying value of RMB12,850 million (31 December 2016: RMB13,342 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+87,188
+1,618
+85,113
+3,079
+1,628
+3,096
+1,653
+86,871
+9
+10
+26
+35
+Held overseas
+36
+36
+3,034
+1,618
+89,024
+84
+295
+644
+118,294
+55,290
+7,863
+41
+55,100
+At 31 December 2017
+(6,887)
+(6,205)
+(98)
+(584)
+Disposals
+13,541
+7,087
+Net carrying amount:
+865
+Depreciation charge for the year
+111,640
+54,408
+7,096
+41
+50,095
+At 31 December 2016 and 1 January 2017
+(2,991)
+(2,448)
+(68)
+(475)
+Disposals
+14,294
+5,589
+202
+At 31 December 2016
+87,188
+843
+Held in Hong Kong
+13,115
+17,630
+13,119
+17,656
+Held in the PRC (other than Hong Kong)
+Long-term leases (over 50 years):
+2016
+2017
+2016
+2017
+Bank
+At 31 December 2017
+Group
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+192
+122,387
+15,394
+1,707
+20,173
+85,113
+124,089
+18,027
+2,199
+16,675
+The carrying value of the Group's and the Bank's properties and buildings is analysed based on the remaining terms of the
+land leases as follows:
+604
+234,991
+2,940
+17,991
+USD
+15/09/2015
+Tier 2 Capital Notes
+15 USD
+Note
+Circulation date
+Maturity date
+Value date
+Coupon
+rate
+(In RMB)
+(million)
+Ending
+balance
+Amount
+(Original
+Currency)
+(million)
+Issue Price
+Currency
+Issue date
+99.189
+2,000
+13,023 4.875%
+21/09/2015
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+200
+The above subordinated bonds and notes are separately listed on the London Stock Exchange Plc and the Stock Exchange of
+Hong Kong Limited. ICBC Standard, ICBC Asia and ICBC Macau have not had any defaults of principal or interest or other
+breaches with respect to the subordinated bonds and notes during the period (2016: Nil).
+On 10 September 2014, ICBC Macau issued a subordinated bond with an aggregate nominal amount of USD320 million,
+bearing a floating interest rate. The bond was issued at the price fixed at 99.298% of the nominal amount with maturity due
+on 10 September 2024.
+On 10 October 2013, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million, bearing
+a fixed interest rate of 4.50% per annum. The bond was issued at the price fixed at 99.463% of the nominal amount with
+maturity due on 10 October 2023.
+Name
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal
+amount with maturity due on 30 November 2020.
+Subsidiaries:
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and Tier
+2 Capital Notes during the current year (2016: Nil).
+On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal amount
+with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+(ix)
+(ix)
+22/09/2015
+21/09/2025
+On 2 December 2009, ICBC Standard issued a subordinated bond with an amount of USD500 million, bearing a fixed
+interest rate of 8.125% per annum and with maturity due on 2 December 2019.
+(2) Other debt securities issued
+In 2015, the Bank issued Tier 2 Capital Notes denominated in USD. Approved by the Stock Exchange of Hong Kong Limited
+for listing and dealing, the Notes are listed on the Stock Exchange of Hong Kong Limited. The relevant information is set out
+below:
+The Bank has the option to redeem all of the bonds on 8 November 2022 upon the approval of the relevant regulatory
+authorities.
+22/11/2017
+4.45%
+44,000
+44,000
+100 Yuan
+20/11/2017
+17 ICBC 02 Bond
+08/11/2017
+4.45%
+44,000
+44,000
+100 Yuan
+06/11/2017
+17 ICBC 01 Bond
+(vi)
+08/11/2027
+22/11/2027
+10/11/2017
+(vii)
+23/11/2017
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 5 August 2019 upon the approval of the relevant regulatory
+authorities.
+(vii)
+(vi)
+(v)
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+(iv) The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all or part of the bonds at face value on 20 July 2019. If the Bank does not exercise this
+option, the annual coupon rate will increase by 300 basis points thereafter.
+(viii) The Bank has the option to redeem all of the bonds on 22 November 2022 upon the approval of the relevant regulatory
+authorities.
+(iii)
+(i)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+199
+Annual Report 2017
+(viii)
+(!!)
+24/09/2014
+As at 31 December 2017, the Group's other debt securities issued mainly include:
+(i)
+24,924
+26,716
+subsidies payables (i)
+Salaries, bonuses, allowances and
+169,899
+113,252
+220,899
+158,083
+Settlement accounts
+2016
+237,369
+243,064
+242,399
+Interest payable
+2017
+2016
+23,557
+22,923
+Early retirement benefits
+1,361
+132,850
+161,595
+Others
+1,258
+825
+2,438
+1,440
+2017
+Promissory notes
+11,298
+10,916
+11,906
+Sundry tax payables
+2,739
+1,361
+2,739
+10,552
+The Bank:
+Bank
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Annual Report 2017
+The Head Office issued debt securities in London amounting to RMB699 million denominated in RMB with maturity in
+2018 at fixed interest rates.
+The Head Office issued debt securities in Hong Kong amounting to RMB500 million denominated in RMB with maturity
+in 2019 at fixed interest rates.
+(x)
+(ix)
+(viii) London Branch issued notes amounting to RMB9, 116 million denominated in USD with maturities between 2019
+and 2022 at floating interest rates. Of which, in 2017, London Branch issued notes amounting to RMB5,860 million
+denominated in USD with maturities in 2020 and 2022 at floating interest rates.
+(vii) Hong Kong Branch issued notes amounting to RMB22,084 million denominated in USD with maturities between 2019
+and 2022 at fixed interest rates. Of which, in 2017, Hong Kong Branch issued notes amounting to RMB18,846 million
+denominated in USD with maturities between 2019 and 2022 at fixed interest rates.
+rates.
+Dubai (DIFC) Branch issued notes amounting to RMB16,850 million denominated in USD and EUR with maturities
+between 2019 and 2022 at fixed or floating interest rates. Of which, in 2017, Dubai (DIFC) Branch issued notes
+amounting to RMB9,476 million denominated in USD and EUR with maturities in 2019 and 2022 at floating interest
+(vi)
+(v)
+(iv)
+(iii) Tokyo Branch issued notes amounting to RMB1,888 million denominated in JPY and RMB with maturities in 2018 and
+2019 at fixed interest rates. Of which, in 2017, Tokyo Branch issued notes amounting to RMB520 million denominated
+in JPY with maturities in 2018 at fixed interest rates.
+Sydney Branch issued notes amounting to RMB13,963 million denominated in AUD, CHF, RMB, HKD and USD with
+maturities between 2018 and 2024 at fixed or floating interest rates. Of which, in 2017, Sydney Branch issued notes
+amounting to RMB2,541 million denominated in AUD at floating interest rates with maturities in 2018 and 2020.
+Singapore Branch issued notes amounting to RMB28,142 million denominated in RMB and USD with maturities
+between 2018 and 2022 at fixed or floating interest rates. Of which, in 2017, Singapore Branch issued notes
+amounting to RMB12,996 million denominated USD with maturities in 2022 at floating interest rates.
+(ii)
+201
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+39. OTHER LIABILITIES
+ICBC
+202
+ICBC New Zealand issued medium and long term bonds and notes amounting to RMB1,442 million denominated in
+AUD, NZD and USD with maturities between 2018 and 2022 at fixed or floating interest rates. Of which, in 2017,
+ICBC New Zealand issued medium and long term bonds and notes amounting to RMB1,310 million denominated in
+NZD and AUD with maturities between 2020 and 2022 at fixed or floating interest rates.
+ICBC International issued medium and long term bonds amounting to RMB8,740 million denominated in USD with
+maturities in 2019 and 2020 at fixed interest rates. Of which, in 2017, ICBC International issued medium and long
+term bonds amounting to RMB4,208 million denominated in USD with maturities in 2020 at fixed interest rates.
+ICBC Thai issued debt securities amounting to RMB5,239 million denominated in THB with maturities between 2018
+and 2026 at fixed interest rates. Of which, in 2017, ICBC Thai issued debt securities of RMB2,328 million denominated
+in THB with maturities between 2018 and 2021 at fixed interest rates.
+Group
+Hai Jiao 1400 limited, which is controlled by the Group, issued a private placement bond amounting to RMB1,061
+million denominated in USD with maturity in 2025 at a fixed interest rate. The bond was guaranteed by The Export-
+Import Bank of Korea.
+ICBC Financial Leasing issued medium and long term debt securities and notes amounting to RMB61,391 million
+denominated in RMB and USD with maturities between 2018 and 2027 at fixed or floating interest rates.
+ICBC Asia issued notes and interbank deposit amounting to RMB1,986 million denominated in RMB, USD, EUR and
+HKD with maturities in 2018 and 2020 at fixed or floating interest rates. Of which, in 2017, ICBC Asia issued notes
+amounting to RMB605 million denominated in RMB, USD, EUR and HKD with maturities in 2018 and 2020 at fixed or
+floating interest rates and issued interbank deposit amounting to RMB495 million denominated in RMB with maturities
+in 2018.
+(v)
+(iv)
+(ii)
+(i)
+Subsidiaries:
+Of which, Skysea International Capital Management Limited ("Skysea International"), which is controlled by the Group,
+issued guaranteed notes of USD750 million with a fixed interest rate of 4.875% in 2011. As at 31 December 2017,
+Skysea International has redeemed USD153 million and the carrying amount of the Notes were RMB3,840 million. The
+Notes were guaranteed by Hong Kong Branch and were issued at the price fixed at 97.708% of the nominal amount
+with maturity due on 7 December 2021. By satisfying certain conditions, Skysea International has the option to redeem
+all of the notes at any time. The Notes were listed on the Stock Exchange of Hong Kong Limited.
+ICBCIL Finance Co., Ltd., which is controlled by the Group, issued medium and long term notes amounting to
+RMB56,490 million denominated in RMB and USD, with maturities between 2018 and 2027 at fixed or floating
+interest rates. Of which, in 2017, ICBCIL Finance Co., Ltd. issued medium and long term notes amounting to
+RMB19,521 million denominated in USD, with maturities between 2020 and 2027 at fixed interest rates. By satisfying
+certain conditions, ICBCIL Finance Co., Ltd. has the option to redeem all of the notes at any time. Above notes were
+guaranteed by ICBC Financial Leasing Co., Ltd. and listed on the Irish Stock Exchange and the Stock Exchange of Hong
+Kong Limited respectively.
+05/08/2024
+05/08/2014
+5.80%
+181,999
+269,143
+The Bank
+(1)
+Tier 2 Capital Notes issued by
+Subordinated bonds and
+2016
+2017
+2016
+2017
+Bank
+Group
+38. DEBT SECURITIES ISSUED
+17,235,587
+18,560,533
+269,143
+181,999
+Subsidiaries
+11,965
+245,832
+65,679
+78,700
+Subsidiaries
+97,447
+167,132
+97,447
+17,825,302
+167,132
+(2)
+Other debt securities issued by
+181,999
+269,143
+194,811
+281,108
+12,812
+The Bank
+163,126
+19,226,349
+288,279
+5,939,577
+5,271,686
+6,069,804
+Corporate customers
+Demand deposits:
+2016
+2017
+2016
+2017
+Bank
+Group
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+37. DUE TO CUSTOMERS
+600
+5,156,745
+Personal customers
+3,820,392
+3,720,374
+236,501
+288,554
+Others
+4,321,056
+4,455,063
+4,419,907
+4,559,714
+236,366
+Personal customers
+4,124,225
+4,176,834
+4,487,885
+Corporate customers
+Time deposits:
+3,655,850
+3,753,389
+3,865,570
+167,132
+97,447
+526,940
+50,000
+50,000
+100 Yuan
+29/12/2011
+11 ICBC 02 Bond
+(!!!)
+30/08/2011
+(ii)
+(i)
+20/08/2009
+03/11/2010
+20/07/2024
+14/09/2025
+30/06/2031
+30/06/2011
+5.56%
+38,000
+38,000
+5.50%
+30/12/2011
+30/12/2026
+17/01/2012
+20,000
+20,000
+100 Yuan
+04/08/2014
+14 ICBC 01 Bond
+(v)
+13/07/2012
+100 Yuan
+13/06/2027
+4.99%
+20,000
+20,000
+100 Yuan
+11/06/2012
+12 ICBC 01 Bond
+(iv)
+13/06/2012
+29/06/2011
+11 ICBC 01 Bond
+14/09/2010
+(In RMB)
+(In RMB)
+(In RMB)
+Issue date
+Name
+Coupon
+Ending
+balance
+rate
+Amount
+As approved by the PBOC and the CBRC, the Bank issued callable subordinated bonds through open market bidding in
+2009, 2010, 2011, 2012, 2014 and 2017. Approved by the PBOC, these subordinated bonds were traded in the bond
+market among banks. The relevant information on these subordinated bonds is set out below:
+The Bank:
+(1) Subordinated bonds and Tier 2 Capital Notes
+As at 31 December 2017, the amount of debt securities issued due within one year was RMB41,820 million
+(31 December 2016: RMB28,277 million).
+279,446
+436,275
+357,937
+Issue Price
+51,092
+Value date
+Circulation date
+4.10%
+16,200
+16,200
+100 Yuan
+10/09/2010
+10 ICBC 02 Bond
+20/07/2009
+Maturity date
+4.00%
+24,000
+100 Yuan
+16/07/2009
+09 ICBC 02 Bond
+(million)
+(million)
+Notes
+24,000
+36,496
+New York Branch issued notes amounting to RMB43,948 million denominated in USD with maturities between
+2018 and 2027 at fixed or floating interest rates. Of which, in 2017, New York Branch issued notes amounting to
+RMB20,702 million denominated in USD with maturities between 2018 and 2027 at fixed or floating interest rates.
+Luxembourg Branch issued notes amounting to RMB29,844 million denominated in USD and EUR with maturities
+between 2018 and 2022 at fixed or floating interest rates. Of which, in 2017, Luxembourg Branch issued notes
+amounting to RMB14,887 million denominated in USD and EUR with maturities between 2018 and 2022 at fixed or
+floating interest rates.
+637,830
+Equity instrument
+1 January
+2017
+31 December
+2017
+1.
+2.
+Total equity attribute to equity holders of the parent company
+(1) Equity attribute to ordinary equity holders of the parent company
+(2) Equity attribute to other equity holders of the parent company
+Total equity attribute to non-controlling interests
+1,969,751
+2,127,491
+1,883,700
+2,041,440
+86,051
+86,051
+11,412
+13,565
+(1) Equity attribute to non-controlling interests of ordinary shares
+(3) Interests attribute to equity instruments' holders
+Note: The RMB amount of perpetual bond on 31 December 2017 is translated at the spot exchange rate on issuance date.
+6,691
+1,000
+In RMB
+(million pieces)
+(million)
+(million)
+USD Perpetual bond
+603,500
+1,000
+11,412
+6,691
+1,000
+6,691
+Total
+1
+1,000
+6,691
+1
+1
+currency
+13,565
+42. RESERVES
+1 January 2017
+and
+Financial instrument outstanding
+(c) Changes in preference shares outstanding
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+ICBC
+206
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+Dividend setting mechanism
+g.
+After five years have elapsed since the date of issuance (18 November 2015) under the premise of obtaining the approval of
+the CBRC and compliance with regulatory requirements, the Group has right to redeem all or some of domestic preference
+shares. The redemption period of preference shares ranges from the start date of redemption to the date of full redemption
+or conversion. Redemption price is equal to book value plus accrued dividend in current period.
+Redemption
+Amount (million shares)
+In original currency (million)
+31 December 2017
+In RMB (million)
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(b) Surplus reserves
+(i) Statutory surplus reserve
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 27 March 2018, the total appropriation to surplus
+reserve of the Bank was RMB27,166 million (2016: RMB26,312 million), among which an appropriation of 10% of the
+profit of the Bank for the year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to
+the statutory surplus reserve, in the amount of RMB27,059 million (2016: RMB26,228 million) was approved and the total
+surplus reserve made by some overseas branches was RMB107 million (2016: RMB84 million) pursuant to the requirements
+of local authorities.
+208
+(2) Equity attribute to non-controlling interests of other equity instruments
+ICBC
+RMB
+RMB
+EUR
+40
+147
+USD
+Domestic
+Preference shares
+Overseas
+Total
+Amount
+In RMB
+(million)
+currency
+(million)
+(million
+currency
+In RMB
+Interest rate
+4.25%
+Issue price
+1,000USD/Piece
+pieces)
+(million)
+(million)
+Maturity
+Conversion
+condition
+Conversion
+1
+1,000
+6,691 None
+Accounting
+classification
+Equity
+2016-07-21
+USD Perpetual bond
+Issue date
+120
+12,000
+450
+757
+45,000
+N/A
+4,558
+12,000
+None
+79,549
+Note: The RMB amounts of offshore preference shares in U.S. dollar and Euro on 31 December 2017 are translated at the spot
+exchange rate on issuance date.
+(2) Perpetual Bond
+(a) Perpetual bond outstanding at the end of the year
+Amount
+In original
+Financial instrument
+outstanding
+45,000
+No
+Total
+6,691
+1 January 2017
+Financial
+In original
+Movement during the year
+In original
+31 December 2017
+In original
+instrument
+(c) Changes in perpetual bond outstanding
+Amount
+In RMB
+Amount
+outstanding
+(million pieces)
+(million)
+(million)
+(million pieces)
+currency
+f.
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+207
+Less: Issue fees
+15
+Book value
+6,676
+Note: USD perpetual bond was issued by ICBC Asia, a subsidiary of the Bank.
+(b) Main Clauses
+On 21 July 2016, ICBC Asia issued Basel III-compliant Non-Cumulative Subordinated Additional Tier 1 Capital Securities
+(hereinafter referred to as "Perpetual Bond") in the aggregate amount of US$1 billion (equivalent to approximately
+RMB6,676 million net of related issuance costs). Fixed rate for the first 5 years after issuance of the bond is 4.25%. If
+perpetual bonds are not called, distribution will be reset based on the then prevailing 5-year USA national bonds yield plus a
+fixed initial spread (3.135 per cent. per annum) every 5 years.
+Notes to the Financial Statements
+The distribution shall be payable semi-annually, with the first distribution payment date being 21 January 2017. ICBC
+Asia has the right to cancel distribution payment (subject to the requirement as set out in the terms and conditions of the
+perpetual bond) and the distribution cancelled shall not be cumulative.
+(1)
+(2)
+(3)
+reduction or cancellation of all or a part of the principal and/or distribution of the perpetual bond;
+the conversion of all or a part of the principal and/or distribution of the perpetual bond into shares of ICBC Asia or
+another person; and/or
+the amendment of the maturity, distribution payment date and/or the distribution amount of the perpetual bond.
+ICBC Asia has a call option to redeem all the outstanding perpetual bond from 21 July 2021 or any subsequent distribution
+payment date thereafter.
+Annual Report 2017
+The perpetual bond will be written off up to the amount as directed by the Hong Kong Monetary Authority (hereinafter
+referred to as "HKMA") if the HKMA notifies ICBC Asia that in the opinion of the HKMA or a relevant government body,
+ICBC Asia would become non-viable if there is no written off of the principal. The perpetual bond also contain Hong Kong
+Bail-in Power. Each holder of the perpetual bond shall be subject to the exercise by the Hong Kong Resolution Authority to
+any or a combination of the following:
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-
+viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were converted to
+A shares, they may not be converted to Preference Shares again.
+1
+Mandatory conversion trigger events
+condition Conversion
+(million) Maturity
+(million)
+shares)
+Issue price
+rate
+Conversion
+In RMB
+currency
+(million
+Dividend
+Accounting
+classification
+Issue date
+Financial instrument
+outstanding
+In original
+Overseas Preference
+Shares in:
+USD
+2014-12-10
+Equity
+2014-12-10
+RMB
+600
+40
+6.00% 15EUR/Share
+Equity
+Amount
+2014-12-10
+Mandatory No
+None
+17,991
+2,940
+147
+6.00% 20USD/Share
+Equity
+EUR
+6.00% 100RMB/Share
+(a) Preference shares outstanding at the end of the year
+41. OTHER EQUITY INSTRUMENTS
+Nominal
+value
+(millions)
+Number
+of shares
+2016
+2017
+A shares of RMB1 Yuan each
+H shares of RMB1 Yuan each
+Issued and fully paid:
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to A
+shares, they may not be converted to Preference Shares again.
+As at 31 December 2017, the amount of other liabilities due within one year was RMB550,736 million (31 December 2016:
+RMB514,673 million).
+There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2017
+(31 December 2016: Nil).
+(ii)
+(i)
+481,236
+436,376
+Number
+of shares
+(millions)
+Nominal
+value
+86,795
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+203
+Annual Report 2017
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends.
+356,407
+356,407
+(1) Preference shares
+356,407
+269,612
+269,612
+269,612
+269,612
+86,795
+86,795
+86,795
+356,407
+120
+40. SHARE CAPITAL
+4,558 None
+12,000 None
+a.
+(2) Domestic preference shares
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+g. Dividend setting mechanism
+USD Preference Shares: the First Redemption Date is five years after issuance
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+RMB Preference Shares: the First Redemption Date is five years after issuance
+Under the premise of obtaining the approval of the CBRC and condition of redemption, the Group has right to redeem all or
+some of overseas preference shares in first call date and subsequent any dividend payment date. Redemption price is equal
+to issue price plus accrued dividend in current period.
+Dividend
+Redemption
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-
+viable), the Group shall have the right to convert all Preference Shares into H shares. If Preference Shares were converted to
+H shares, they may not be converted to Preference Shares again.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to H
+shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+e.
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+f.
+204
+Fixed rate for a certain period (5 years) after issuance.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+12,000
+e.
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated debt, holders of
+convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will be
+senior to the ordinary shareholders.
+Order of distribution and liquidation method
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Dividend stopper
+C.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+b.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+205
+Annual Report 2017
+Dividends will be paid annually.
+Conditions to distribution of dividends
+The USD, EUR and RMB Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for
+payment. The Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated
+debt, holders of convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the
+Group, but will be senior to the ordinary shareholders.
+d.
+d.
+Mandatory
+None
+45,000
+45,000
+450
+55
+Total
+4.50% 100RMB/Share
+Equity
+2015-11-18
+RMB
+Shares in:
+Mandatory No
+Mandatory
+Order of distribution and liquidation method
+No
+No
+757
+Domestic Preference
+Less: Issue fees
+79,549
+Dividend stopper
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The
+Group may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+Conditions to distribution of dividends
+b.
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Dividends will be paid annually.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+C.
+Fixed rate for a certain period (5 years for USD and RMB tranche and 7 years for EUR tranche) after issuance.
+a. Dividend
+(1) Overseas preference shares
+(b) Main Clauses
+79,375
+Book value
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+174
+Bonds was conducted in the ordinary course of business, in compliance with relevant regulatory requirements and the
+corporate governance of the Bank.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+217
+Annual Report 2017
+(ii) Huijin
+As at 31 December 2017, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71%
+(31 December 2016: approximately 34.71%) of the issued share capital of the Bank. Huijin is a state-owned investment
+company established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in
+capital of RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with
+the authorisation by the State, Huijin makes equity investments in the key state-owned financial institutions, and shall, to
+the extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not engage in other business activities, and does not intervene in the day-to-day business operations of the key
+state-owned financial institutions it controls.
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 52(g) "transactions with state-owned entities in the PRC".
+As at 31 December 2017, the Group holds a series of long-term bonds issued by Huarong, which is under the control of the
+MOF, with an aggregate amount of RMB90,309 million (31 December 2016: RMB94,249 million). The details of the Huarong
+bonds are included in note 27.
+2.10 to 6.15
+2.10 to 5.41
+%
+As at 31 December 2017, the Huijin Bonds held by the Bank are of an aggregate face value of RMB22.75 billion
+(31 December 2016: RMB16.91 billion), with terms ranging from 3 to 30 years and coupon rates ranging from 3.16% to
+4.98% per annum. The Huijin Bonds are government-backed and medium-term notes. The Bank's subscription of the Huijin
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the major transactions are as follows:
+Transactions during the year:
+Debt securities purchased
+21,934
+317
+2017
+Due to customers
+Loans and advances to customers
+Debt securities purchased
+Interest rate ranges during the year:
+Net loss on financial liabilities designated at fair value through profit or loss
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+Interest income on debt securities purchased
+Financial liabilities designated at fair value through profit or loss
+Interest payable
+Due to customers
+Loans and advances to customers
+Interest receivable
+Balances at end of the year:
+31,006
+The PRC government bonds and the special government bond
+225,366
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+52. RELATED PARTY DISCLOSURES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+51. FIDUCIARY ACTIVITIES
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+(a) Shareholders with significant influence
+ICBC
+Financial assets of the Group including securities, bills and loans have been pledged as collateral for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2017, the carrying value of the
+financial assets of the Group pledged as collateral amounted to approximately RMB878,823 million (31 December 2016:
+RMB341,593 million).
+50. ASSETS PLEDGED AS SECURITY
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+2016
+1,170,264
+1,169,979
+216
+127,314
+(i)
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2017, the MOF directly owned approximately 34.60% (31 December
+2016: approximately 34.60%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, including the subscription and redemption of government bonds issued by the MOF.
+Details of the major transactions are as follows:
+351,138
+Bond investments
+Interest rate ranges during the year:
+Interest income on the PRC government bonds
+Redemption of the PRC government bonds
+Subscription of the PRC government bonds
+The MOF
+Transactions during the year:
+2017
+847,923
+927,432
+2016
+2017
+Balances at end of the year:
+2016
+16,786
+200
+157,412
+5,606
+130
+418
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+28,746
+23,758
+Interest income on debt securities purchased
+8
+Transactions during the year:
+2017
+13,530
+15,954
+18,317
+10,758
+2,533
+2016
+6,023
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+284
+1,327,990
+1,327,433
+ICBC
+218
+0.12 to 6.80
+0 to 15.00
+1.33 to 6.50
+0 to 6.95
+0.01 to 2.00
+0 to 10.00
+2.31 to 4.13
+0 to 9.07
+0 to 7.20
+0.13 to 7.67
+911
+Due to banks and other financial institutions
+Due to customers
+Due from banks and other financial institutions
+Debt securities purchased
+Interest rate ranges during the year:
+%
+%
+31
+1,051
+519
+Loans and advances to customers
+140,601
+2,329
+702
+%
+146
+26
+50
+202
+603
+%
+621
+2016
+2017
+2,800
+2
+1
+5
+672
+3.16 to 4.98
+3.92 to 4.75
+0.30 to 1.76
+3.16 to 4.20
+0.30 to 1.76
+781,753
+59,283
+128,185
+691
+6,431
+650,186
+2016
+2017
+Credit commitments
+Due to customers
+Derivative financial liabilities
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Debt securities purchased
+Balances at end of the year:
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group. Details
+of major transactions during the year conducted with these banks and financial institutions are as follows:
+27,000
+2016
+184,792
+31,366
+%
+Group
+11,214
+24,400
+24,400
+Asset-backed securities
+12,560
+12,560
+24,200
+11,214
+24,200
+243,722
+243,722
+267,379
+267,379
+Asset management plans
+6,189
+6,189
+Trust plans
+200
+327,098
+282,255
+assets
+7,976
+investments
+at fair value
+Financial
+assets held
+for trading or
+designated
+for-sale
+financial
+Held-to
+maturity
+Available-
+327,098
+31 December 2017
+Trust plans
+Asset management plans
+Wealth management products
+Investment funds
+2017
+The following table sets out an analysis of the line items in the statement of financial position in which assets were
+recognised relating to the Group's interests in structured entities sponsored by third parties:
+282,255
+Asset-backed securities
+through
+profit or loss
+200
+8,570
+(41,378)
+712
+Others
+13,608
+(8,752)
+(860)
+(757)
+(75)
+(17,515)
+using equity method which may be reclassified subsequently to profit or loss
+Foreign currency translation differences
+(751)
+939
+30
+(26)
+(781)
+965
+Less: Income tax effect
+Share of the other comprehensive income of investees accounted for
+Wealth management products
+210
+Notes to the Financial Statements
+8,570
+10,919
+10,919
+Investment funds
+exposure
+amount
+exposure
+ICBC
+31 December 2016
+Carrying
+Maximum
+31 December 2017
+Carrying
+amount
+Group
+The following table sets out an analysis of the carrying amounts of interests held by the Group in the structured entities
+sponsored by third party institutions:
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+products issued by these structured entities. Such structured entities include investment funds, wealth management
+products, asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of investment products to investors.
+(a) Structured entities sponsored by third party institutions in which the Group held an
+interest
+44. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Maximum
+Receivables
+1,443
+-
+(c) Unconsolidated structured entities sponsored by the Group during the year in which
+the Group does not have an interest at 31 December 2017
+As at 31 December 2017, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,665,795 million (31 December 2016:
+RMB2,423,950 million) and RMB1,296,300 million (31 December 2016: RMB1,127,964 million) respectively.
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2017, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+(b) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest
+The maximum exposures to loss in the above investment funds, wealth management products, asset management plans,
+trust plans and asset-backed securities are the amortised cost or fair value of the assets held by the Group at the reporting
+date in accordance with the line items of these assets recognised in the statement of financial positions.
+48,253
+208,582
+During the year of 2017, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB4,107 million (2016: RMB2, 169 million).
+25,241
+1,049
+619
+9,367
+179
+12,560
+31,080
+207,963
+179
+4,679
+During the year of 2017, the amount of income received from such category of investment funds was RMB1,914 million.
+(2016: RMB1 million).
+The aggregate amount of the investment funds sponsored and issued by the Group after 1 January 2017 but matured before
+31 December 2017 was RMB42,400 million (The aggregate amount of the investment funds sponsored and issued by the
+Group after 1 January 2016 but matured before 31 December 2016 was RMB5,244 million).
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+2016
+84,572
+113,106
+177,357
+20
+75,214
+20
+20
+The aggregate amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2017 but matured before 31 December 2017 was RMB1,439,371 million (The aggregate amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2016 but matured
+before 31 December 2016 was RMB252,931 million).
+Balances with central banks other than restricted deposits
+2017
+Note
+45. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+(a) Analysis of balances of cash and cash equivalents
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+212
+Cash on hand
+2,064
+4,125
+1,500
+Annual Report 2017
+51,894
+242,461
+32,689
+54
+999
+4,798
+211
+18,549
+16,043
+8,157
+33,152
+228,063
+6,164
+200
+1,500
+54
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Investment funds
+7,070
+Receivables
+profit or loss
+assets
+through
+at fair value
+for-sale
+financial
+Held-to
+maturity
+investments
+designated
+Available-
+Financial
+assets held
+for trading or
+31 December 2016
+Group
+Asset-backed securities
+Trust plans
+Asset management plans
+Wealth management products
+Gains/(losses) during the year
+Effective hedging portion of gains or losses arising from cash flow
+hedging instruments:
+(29,449)
+(33,494)
+261,218 261,218
+Profit for the year
+1,761,746
+596,181 729,783
+(1,601) (4,079)
+28,489
+241,509
+Other comprehensive income
+175,668
+79,375
+Subtotal profits equity
+reserves
+reserve
+reserve
+reserve
+reserve
+156,195
+reserve
+(26,055)
+(672)
+(4,450) (4,450)
+(83,150) (83,150)
+Appropriation to surplus reserve (i)
+Dividends - preference shares (note 18)
+2015 final (note 18)
+Dividends - ordinary shares
+235,774
+1,364
+(25,444) 261,218
+(672)
+1,364
+(26,055)
+Total comprehensive income
+(25,444)
+(25,444)
+(81)
+(81)
+reserve
+Total
+Retained
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(f) Cash flow hedge reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+(e) Foreign currency translation reserve
+The investment revaluation reserve records the fair value changes of available-for-sale financial assets.
+(d) Investment revaluation reserve
+The general reserve balance of the Bank as at 31 December 2017 amounted to RMB 259,374 million (2016: RMB246,308
+million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+(g) Other reserves
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+(c) General reserve
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(iii) Other surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(ii) Discretionary surplus reserve
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+(h) Distributable profits
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+Other
+hedging
+Cash flow
+Foreign
+currency
+translation
+Investment
+General revaluation
+Surplus
+Capital
+Other
+Issued
+share equity
+capital instruments
+356,407
+Balance as at 1 January 2016
+Reserves
+The statement of changes in equity of the Bank during the year are set out below.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+209
+Annual Report 2017
+26,312
+292,694
+4,799
+(26,312)
+71
+(3,965)
+(1,205)
+(29,326)
+259,374
+79,375 156,204 229,146
+356,407
+610,299 1,013,320 2,059,401
+Balance as at 31 December 2017
+13,066
+(27,166)
+27,166
+27,166
+Appropriation to general reserve (ii)
+Appropriation to surplus reserve (i)
+(4,437) (4,437)
+13,066 (13,066)
+(83,506)
+(i)
+43. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+9,172
+10,879
+(1,246)
+(631)
+(37,375)
+(43,742)
+Net loss from change in fair value of available-for-sale financial assets
+Less: Transfer to profit or loss arising from disposal/impairment
+Income tax effect
+Includes the appropriation made by overseas branches in the amount of RMB107 million (2016: RMB84 million).
+(ii) Includes the appropriation made by overseas branches in the amount of RMB20 million (2016: Nil).
+(3)
+15
+(29)
+3
+Items that may be reclassified subsequently to profit or loss:
+Share of the other comprehensive income of investees accounted for
+using equity method which will not be reclassified to profit or loss
+Others
+Items that will not be reclassified to profit or loss:
+2016
+2017
+53
+(83,506)
+237,415
+269,205
+(81)
+(4,751)
+(237)
+2,434
+246,308
+201,980
+156,204
+601,857
+79,375
+and 1 January 2017
+Balance as at 31 December 2016
+Others
+Appropriation to general reserve (ii)
+9
+(4,799)
+4,799
+9
+356,407
+872,290 1,909,929
+Profit for the year
+'
+(31,790)
+152
+786
+(968)
+(31,760)
+Dividends preference shares (note 18)
+2016 final (note 18)
+Dividends - ordinary shares
+Total comprehensive income
+(31,790)
+(31,790)
+152
+786
+(968)
+(31,760)
+Other comprehensive income
+269,205 269,205
+26,312
+86,312
+Group
+195,393
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+Lessor
+Operating lease commitments
+16,000
+14,049
+17,620
+Within one year
+15,628
+808
+2,266
+1,011
+9,034
+8,280
+9,899
+2,044
+9,166
+Over one year but within five years
+Over five years
+2017
+Group
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+(c) Credit commitments
+86,469
+Group
+88,612
+35,255
+39,092
+42,806
+10,046
+10,551
+2016
+37,331
+Bank
+Over one year but within five years
+Over five years
+4,961
+23,024
+3,602
+2,314
+27,833
+22,380
+Contracted, but not provided for
+28,368
+495
+535
+644
+Authorised, but not contracted for
+2016
+2017
+2016
+607
+4,922
+2,921
+214
+5,455
+5,451
+Within one year
+2016
+2017
+2016
+4,097
+2017
+Group
+At the end of the reporting period, the Group and the Bank leased certain office properties under operating lease
+arrangements, and the total future minimum lease payments in respect of non-cancellable operating leases were as follows:
+(b) Operating lease commitments
+Operating lease commitments - Lessee
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+Bank
+2017
+Bank acceptances
+2016
+271,691
+2017
+Bank
+Group
+(i)
+credit commitments(i)
+Credit risk-weighted assets of
+2016
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+215
+Annual Report 2017
+620,680
+2,713,875
+871,289
+3,476,117
+1,011,280
+1,383,145
+Notes to the Financial Statements
+1,064,189
+647,448
+2,778,412
+2017
+1,552,070
+Designated funds
+Designated loans
+49. DESIGNATED FUNDS AND LOANS
+As at 31 December 2017, the Group and the Bank had no unexpired securities underwriting obligations (31 December 2016:
+Nil).
+(f) Underwriting obligations
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2017, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB87,981 million (31 December 2016: RMB97,646 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+2016
+(e) Redemption commitments of government bonds
+As at 31 December 2017, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB4,496 million (31 December 2016: RMB5,515 million).
+(d) Legal proceedings
+Internal Ratings-Based approach was adopted to calculate the credit risk-weighted assets according to the scope
+approved by the CBRC, and others were calculated by weighted approach.
+1,194,507
+1,526,140
+1,231,376
+In the opinion of management, the Group and the Bank have made adequate allowance for any probable losses based on
+the current facts and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the
+financial position or operations of the Group and the Bank.
+2017
+245,542
+3,510,936
+Undrawn credit card limit
+362,367
+295,471
+337,930
+guarantees
+Non-financing letters of
+175,554
+301,898
+215,556
+160,947
+Financing letters of guarantees
+Placements with banks and other financial institutions with original
+maturity of three months or less
+265,625
+2016
+2017
+240,052
+137,076
+902,217
+Sight letters of credit
+45,752
+1,439,090
+159,962
+221,628
+173,392
+234,675
+With an original maturity of under one year
+With an original maturity of one year or over
+37,353
+Loan commitments:
+147,524
+143,393
+153,182
+Usance letters of credit and other commitments
+42,966
+34,556
+135,910
+Bank
+Guarantees issued:
+(309)
+Balance as at 31 December 2017
+Total equity-related other changes
+187
+187
+187
+187
+Total liability-related other changes
+Amortisation of debt securities
+(16,043)
+(16,043)
+The effect of changes in foreign exchange rates
+81,835
+289
+(4,437)
+(4,437)
+(104,162)
+849
+526,940
+184,859
+4,619
+1,864
+13,565
+transferred
+31 December 2017
+Carrying
+amount of
+The following table analyses the carrying amount of the above mentioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+or decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral in
+certain circumstance. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+(In RMB millions, unless otherwise stated)
+Interest
+payable on
+securities
+Notes to the Financial Statements
+213
+Annual Report 2017
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities sold under repurchase agreements in the absence of
+default by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase
+Repurchase transactions and securities lending transactions
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+46. TRANSFERRED FINANCIAL ASSETS
+1,642,668
+262,907
+261,043
+1,097,544
+Net cash flows from financing activities
+Dividends paid on preference shares
+(83,506)
+1,189,368
+(b) Reconciliation of movements of liabilities to cash flows arising from financing activities
+Group
+Liabilites
+Equity
+Debt
+securities
+shareholders
+Balance as at 1 January 2017
+Cash flows from financing activities
+Capital injection by non-controlling
+Total
+1,313,782
+controlling
+interests
+11,412
+Retained
+profits
+940,663
+3,770
+357,937
+Non-
+656,082
+779,672
+1,520,330
+Reverse repurchase agreements with original maturity of three
+months or less
+249,296
+(83,506)
+Dividends paid on ordinary shares
+(309)
+Dividends paid to non-controlling shareholders
+(759,095)
+(194)
+(194)
+associated
+(15,370)
+849
+792
+943,954
+(759,095) --
+943,954
+ОЛЗ ОБЛ - 792
+Acquisition of non-controlling interests
+Repayment of debt securities
+Proceeds from issuance of debt securities
+Interest paid on debt securities
+(16,219)
+Carrying
+amount of
+Financial Statements for the year ended 31 December 2017
+transferred
+31 December 2016
+Carrying
+amount of
+Group
+At the end of the reporting period, the Group and the Bank had capital commitments as follows:
+(a) Capital commitments
+48. COMMITMENTS AND CONTINGENT LIABILITIES
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+47. SHARE APPRECIATION RIGHTS PLAN
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability. As at 31 December 2017,
+the Group does not have carrying amount of transferred assets that did not qualify for derecognition and carrying amount of
+their associated liabilities (31 December 2016: Nil).
+As the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial assets and it
+has retained control of them, those financial assets are recognised on the statement of financial position to the extent of
+the Group's continuing involvement. The Group recognises the assets on the statement of financial position in accordance
+with the Group's continuing involvement and the rest is derecognised. The extent of the Group's continuing involvement is
+the extent to which the Group is exposed to changes in the value of the transferred assets. As at 31 December 2017, loans
+with an original carrying amount of RMB91,855 million (31 December 2016: RMB45,290 million) had been securitised by the
+Group under arrangements in which the Group retains a continuing involvement in such assets in the form of subordinated
+tranches. As at 31 December 2017, the carrying amount of assets that the Group continues to recognise was RMB5,466
+million (31 December 2016: RMB2,107 million).
+The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to
+structured entities which issue asset-backed securities to investors.
+Securitisation transactions
+25,160
+100,309
+44,433
+issued
+75,081
+321,627
+Carrying
+amount of
+associated
+assets
+liabilities
+liabilities
+assets
+44,458
+44,433
+25,228
+25,160
+Securities lending agreements
+277,169
+Repurchase agreements
+(86,138)
+Loans and advances to customers
+(73,050)
+(13,088)
+Segment assets
+657
+Capital expenditure
+2,059
+57
+397
+As at 31 December 2016
+Impairment losses on:
+Operating expenses
+(6,334)
+(16,628)
+(93,718)
+(76,432)
+948
+641,681
+4,662
+84,488
+238,133
+314,398
+Operating income
+24,862
+4,662
+(193,112)
+14,660
+(669)
+2,578
+Amortisation
+Depreciation
+Other segment information:
+Profit for the year
+(84,173)
+Income tax expense
+363,279
+263
+66,856
+131,327
+164,833
+Profit before taxation
+2,604
+279,106
+2,604
+360,675
+(2,341)
+66,856
+131,327
+164,833
+Operating profit/(loss)
+(1,756)
+(1,004)
+(83)
+Others
+6,535
+5,254
+293
+Share of profits of associates and joint ventures
+72,713
+19,758
+including Liaoning, Heilongjiang, Jilin and Dalian.
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+Overseas and others:
+the HO business division (including institutions directly controlled by the HO and their offices);
+Western China:
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+Bohai Rim:
+Central China:
+Mainland China (Head Office and domestic branches):
+The distribution of the geographical areas is as follows:
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane,
+Lima, Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh, Istanbul, Prague and Zurich, etc.).
+(b) Geographical information
+Northeastern China:
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+branches located outside Mainland China, domestic and overseas subsidiaries, and investments in
+associates and joint ventures.
+223
+River Delta
+River Delta
+Head Office
+Overseas and
+Northeastern
+Western
+Annual Report 2017
+Central
+Pearl
+Yangtze
+Mainland China (HO and domestic branches)
+Year ended 31 December 2017
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Bohai
+24,779
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+2,778,412
+Segment liabilities
+Other non-current assets (ii)
+Property and equipment
+30,077
+30,077
+Including: Investments in associates and joint ventures
+Other segment information:
+24,137,265
+10,840,773
+4,245,097
+8,914,597
+55,384
+1,131
+9,716
+136,798
+(ii)
+Credit commitments
+99,810
+19,817
+647,448
+2,130,964
+22,156,102
+154,447
+3,536,514
+42,943
+(i)
+11,390
+246,209
+14,193
+27,476
+39,045
+79,878
+7,189
+8,376,975
+10,088,166
+4,547
+(403)
+Including: Investments in associates and joint ventures
+Other income/(expense), net (i)
+728
+35,671
+152,873
+Operating profit/(loss)
+(3,673)
+(297)
+(2,029)
+(217)
+(1,130)
+Others
+(124,096)
+(15,924)
+(108,172)
+Loans and advances to customers
+Impairment losses on:
+(186,194)
+(6,313)
+(15,857)
+(93,935)
+(70,089)
+Operating expenses
+675,654
+4,872
+90,599
+247,919
+332,264
+Operating income
+13,951
+4,872
+6,185
+6,620
+12,964
+Capital expenditure
+(1,738)
+361,691
+Share of profits of associates and joint ventures
+2,950
+2,950
+Profit before taxation
+152,873
+137,843
+72,713
+1,212
+364,641
+Income tax expense
+(77,190)
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+287,451
+6,122
+5,070
+2,404
+277
+13,873
+967
+76,923
+682
+406
+59
+2,114
+15,794
+(474)
+2,933
+Other income/(expense), net (i)
+(i)
+(!!)
+222
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Others
+Total
+External net interest income
+242,432
+30,433
+Internal net interest (expense)/income
+(13,456)
+142,221
+198,981
+(128,765)
+471,846
+Net fee and commission income
+79,012
+65,882
+79
+144,973
+3,510,936
+902,217
+2,608,719
+Credit commitments
+139,625
+377
+62,325
+As at 31 December 2017
+Segment assets
+9,309,390
+4,992,999
+11,629,855
+154,799
+26,087,043
+137,843
+32,441
+32,441
+Property and equipment
+6,410
+96,515
+20,975
+Segment liabilities
+11,294,092
+79,646
+7,076
+8,627,592
+37,649
+33,934
+247,744
+4,435
+11,124
+43,610
+3,854,496
+169,807
+23,945,987
+Other segment information:
+Other non-current assets (ii)
+13,144
+Others
+(128,992)
+13,163
+24,862
+Operating income
+70,287
+113,430
+79,974
+123,491
+79,703
+97,032
+28,451
+49,335
+(22)
+641,681
+Operating expenses
+(16,026)
+(30,480)
+(21,877)
+(31,807)
+(29,630)
+209
+1,534
+611
+6,342
+70,362
+15,497
+7,927
+7,796
+(2,136)
+Net fee and commission income
+4,357
+38,348
+23,417
+(33,374)
+24,919
+20,293
+6,068
+7,600
+(22)
+144,973
+Other income, net (i)
+786
+923
+1,294
+19,993
+(12,744)
+(17,196)
+22
+67,388
+45,486
+73,386
+39,510
+47,199
+13,144
+28,217
+360,675
+Share of profits of associates and
+46,345
+joint ventures
+Income tax expense
+Profit for the year
+2,604
+2,604
+46,345
+67,388
+45,486
+73,386
+ICBC
+Profit before taxation
+13,398
+Operating profit
+(1,095)
+(193,112)
+Impairment (losses)/reversal on:
+Loans and advances to customers
+(7,940)
+(15,477)
+(12,278)
+(18,194)
+(10,489)
+(16,384)
+(1,756)
+(2,549)
+(86,138)
+Others
+24
+(85)
+(333)
+(104)
+(74)
+(75)
+(14)
+(2,827)
+228
+29,542
+Internal net interest (expense)/income
+7,603
+1,430
+4,273
+43,610
+Unallocated assets
+48,392
+Total assets
+26,087,043
+Liabilities by geographical areas
+7,179,622
+5,564,511
+3,692,171
+5,568,370 2,624,956
+3,164,294
+1,069,369
+571,676
+(5,560,058)
+23,874,911
+Unallocated liabilities
+5,371
+3,974
+4,172
+5,762
+China
+1,078,047
+others Eliminations
+3,382,006 (5,560,058)
+Total
+26,038,651
+Including: Investments in associates and
+joint ventures
+32,441
+32,441
+Property and equipment
+71,076
+12,166
+10,955
+17,080
+18,588
+23,054
+9,900
+125,642
+247,744
+Other non-current assets (i)
+11,025
+30,359
+Total liabilities
+23,945,987
+Other segment information:
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+Overseas and
+others
+Eliminations
+Northeastern
+Total
+207,530
+44,617
+41,865
+21,868
+43,602
+67,278
+14,378
+30,708
+471,846
+External net interest income
+(142,386)
+Western
+Bohai
+Credit commitments
+946,311
+657,602
+466,598
+558,078
+254,474
+433,536
+89,923
+690,097
+Central
+(585,683)
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+224
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Mainland China (HO and domestic branches)
+Yangtze
+Pearl
+3,510,936
+For homogeneous groups of loans, the Group uses a collective assessment approach for impairment losses. The approach
+analyses historical trends of probability of default and the amount of the consequential loss, as well as evaluates current
+economic conditions that may have a consequential impact on inherent losses in the portfolio.
+Homogenous groups of loans not considered individually significant
+National or local economic conditions that correlate with defaults on assets in the portfolio of loans.
+Property and equipment
+30,077
+30,077
+joint ventures
+24,108,867
+Total
+Eliminations
+(5,479,261)
+3,129,868
+1,068,632
+2,827,331
+2,275,456
+3,626,559
+3,096,641
+5,194,868
+8,368,773
+Overseas and
+others
+China
+Northeastern
+Western
+China
+13,020
+28,803
+11,072
+17,791
+Liabilities by geographical areas
+24,137,265
+Total assets
+28,398
+Unallocated assets
+42,943
+4,417
+1,358
+7,563
+Central
+China
+5,691
+3,557
+5,811
+10,561
+Other non-current assets (i)
+246,209
+122,451
+10,391
+23,418
+19,263
+3,985
+Bohai
+Rim
+Pearl
+River Delta
+Yangtze
+River Delta
+187
+235
+597
+Amortisation
+14,660
+398
+1,161
+3,010
+2,566
+93
+2,198
+2,074
+1,841
+Depreciation
+information:
+Other segment
+279,106
+(84,173)
+363,279
+30,821
+1,412
+6,820,411
+263
+77
+Head Office
+Mainland China (HO and domestic branches)
+As at 31 December 2016
+Including: Investments in associates and
+Assets by geographical areas
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(i)
+55,384
+389
+17,556
+8,948
+7,328
+5,339
+3,458
+4,747
+3,772
+Capital expenditure
+2,059
+218
+4,236
+5,453,036
+3,318,068
+5,242,654
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+227
+Annual Report 2017
+Loss: Principal and interest of loans cannot be recovered or only a small portion of them can be recovered after taking
+all possible measures or resorting to all necessary legal procedures.
+Doubtful: Borrowers cannot repay principal and interest in full and significant losses will need to be recognized even
+when collateral or guarantees are invoked.
+Substandard: Borrowers' abilities to service their loans are apparently in question and they cannot rely entirely on
+normal business revenues to repay principal and interest. Certain losses may ensue even when collateral or guarantees
+are invoked.
+Special mention: Borrowers are able to service their loans currently, although repayment may be adversely affected by
+specific factors.
+(a) Credit risk (continued)
+Normal: Borrowers can honor the terms of their loans. There is no reason to doubt their ability to repay principal and
+interest in full on a timely basis.
+•
+•
+•
+The core definitions of the five categories of loans and advances are set out below:
+The Group adopts a loan risk classification approach to manage the loan portfolio risk. Loans are generally classified as
+normal, special mention, substandard, doubtful and loss according to their level of risk. Substandard, doubtful and loss loans
+are considered as impaired loans.
+Credit risk classification
+Credit risk is often greater when counterparties are concentrated in one single industry or geographical location or have
+comparable economic characteristics.
+Risk concentration
+The Group will normally sign an International Swaps and Derivatives Association ("ISDA") Master Agreement, a China
+Interbank Market Financial Derivatives Master Agreement ("NAFMII master agreement") with its counterparties for
+documenting over-the-counter derivative activities. Each of these master agreements provides the contractual framework
+within which derivative dealing activities are conducted. Under each of these master agreements, close-out netting shall be
+applied across all outstanding transactions covered by the agreement if either party defaults.
+•
+In addition to the credit risk exposures on credit-related assets and amounts due from or lending to banks and other
+financial institutions, credit risk also arises in other areas. For instance, credit risk exposure also arises from derivative
+financial instruments which is, however, limited to those with positive fair values, as recorded in the statement of financial
+position. In addition, the Group also makes available to its customers' guarantees which may require the Group to make
+payments on their behalf. Such payments are collected from customers based on the terms of the agreements signed. They
+expose the Group to similar risks as loans and these are mitigated by the same control processes and policies.
+Impairment assessment
+Individually assessed loans
+Adverse changes in the payment status of borrowers in the group of loans; and
+.
+Objective evidence of impairment losses on a collective basis consists of observable data indicating a measurable decrease in
+the estimated future cash flows from a portfolio of loans since the initial recognition of those loans, including:
+For the purpose of collective assessment, assets are grouped on the basis of similar credit risk characteristics that are
+indicative of the debtors' ability to pay all amounts due according to the contractual terms.
+All loans for which no impairment can be identified individually, either due to the absence of any loss events or due to
+an inability to measure reliably the impact of potential loss events on future cash flows.
+Homogeneous groups of loans, including all personal loans; and
+•
+•
+Loans that are assessed for impairment losses on a collective basis include the following:
+The main considerations for the loan impairment assessment include whether any payments of principal or interest are
+overdue or whether there are any liquidity problems of counterparties, credit rating downgrades, or infringement of the
+original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed impairment
+and collectively assessed impairment.
+Collectively assessed loans
+The timing of the expected cash flows.
+The availability of other financial support and the realisable value of collateral; and
+Projected receipts and the expected payout should bankruptcy ensue;
+The borrower's ability to improve performance once a financial difficulty has arisen;
+The sustainability of the counterparty's business plan;
+•
+•
+If there is objective evidence that an impairment loss on a loan or advance has incurred on an individual basis, the amount of
+the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash
+flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying
+amount. The impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual
+basis, the following factors are considered:
+All corporate loans and discounted bills are individually reviewed for objective evidence of impairment and classified based
+on a five-tier classification system. Corporate loans and discounted bills that are classified as substandard, doubtful or loss
+are assessed individually for impairment.
+It may not be possible to identify a single, discrete event that caused the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+Overseas and
+To enhance the credit risk management practices, the Group also launches training programs periodically for credit officers
+at different levels.
+•
+2,778,412
+397,963
+67,703
+249,912
+158,583
+485,726
+314,846
+441,169
+662,510
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+Credit commitments
+22,156,102
+Total liabilities
+53,243
+Unallocated liabilities
+22,102,859
+(5,479,261)
+517,154
+1,074,621
+2,384,189 2,771,987
+Other segment information:
+Information management systems designed to enable a real time risk monitoring.
+Annual Report 2017
+Notes to the Financial Statements
+Stringent qualification system for the loan approval officers; and
+•
+Risk management rules and procedures that focus on risk control throughout the entire credit business process,
+including customer investigation and credit rating, granting of credit limits, loan evaluation, loan review and approval,
+granting of loan and post-disbursement loan monitoring;
+Centralised credit management policies and procedures;
+•
+The principal features of the Group's credit risk management function include:
+Credit risk is the risk of loss arising from a borrower's or counterparty's inability to meet its obligations. Credit risk can also
+arise from operational failures that result in an unauthorised or inappropriate guarantee, commitment or investment of
+funds. The Group is exposed to credit risk primarily due to loans, guarantees and other credit related commitments.
+(a) Credit risk
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+225
+Notes to the Financial Statements
+226
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to both the corresponding risk management departments at the
+Head Office and management of the relevant branches.
+The Group has also assigned departments monitoring financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+A description and an analysis of the major risks faced by the Group are as follows:
+54. FINANCIAL INSTRUMENTS RISK MANAGEMENT
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+ICBC
+Net fee and commission income
+Northeastern
+Central
+China
+2,529,871
+2016
+2017
+43
+65
+941
+1,178
+7
+121
+8,588
+17,535
+1,151
+1,238
+1,802
+1,667
+1,714
+3,075
+2016
+2017
+Credit commitments
+Transactions during the year:
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+16
+57
+0 to 4.92
+0 to 8.54
+0 to 2.30
+1.77 to 2.11
+0.50 to 14.00
+0 to 9.81
+0 to 2.50
+Due from banks and other financial institutions
+%
+%
+Derivative financial liabilities
+Due to banks and other financial institutions
+Due to customers
+Interest rate ranges during the year:
+0
+2
+Interest expense on amounts due to customers
+104
+133
+Interest expense on amounts due to banks and other financial institutions
+163
+55
+Loans and advances to customers
+Due to customers
+Due to banks and other financial institutions
+Derivative financial assets
+265
+955
+1,186
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+135
+147
+Interest income on debt securities purchased
+Transactions during the year:
+2016
+314
+2017
+144,810
+3,599
+4,415
+21,328
+5,913
+18,456
+1,235
+3,643
+4,353
+103,473
+0 to 0.30
+Interest expense on amounts due to banks and other financial institutions
+917
+Loans and advances to customers
+Due from banks and other financial institutions
+Balances at end of the year:
+(c) Associates and affiliates
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+0 to 20.00
+0.72 to 4.50
+-0.12 to 60.00
+0.70 to 6.61
+0.25 to 6.15
+-0.36 to 105.00
+-0.42 to 105.00
+1,262
+Due to banks and other financial institutions
+Due from banks and other financial institutions
+0.50 to 4.00
+%
+%
+1,635
+1,566
+Debt securities purchased
+Interest rate ranges during the year:
+Fee and commission income
+Loans and advances to customers
+435,283
+Annual Report 2017
+Notes to the Financial Statements
+Notes to the Financial Statements
+221
+Annual Report 2017
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers, etc.
+Treasury operations
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+Personal banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Corporate banking
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+(a) Operating segments
+53. SEGMENT INFORMATION
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of
+business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and
+those state-owned entities are ultimately controlled or owned by the Government. The Group has also established pricing
+policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned
+entities.
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+(g) Transactions with state-owned entities in the PRC
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund holds A shares of the Bank with an
+amount of RMB21.58 million as at 31 December 2017 (31 December 2016: Nil).
+(f) Annuity Fund
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+The aggregate balance of loans and credit card overdraft to the person which are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB36.52 million as at 31 December 2017 (31 December 2016:
+RMB28.58 million).
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Others
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+127,684
+1,308
+Internal net interest income/(expense)
+522,078
+212,594
+58,384
+251,100
+External net interest income
+Total
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Others
+banking
+banking
+Treasury
+Personal
+Corporate
+Year ended 31 December 2017
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as
+"internal net interest income/expense". Net interest income and expense relating to third parties are referred to as "external
+net interest income/expense".
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+operations
+Notes to the Financial Statements
+ICBC
+220
+%
+%
+2
+1
+Due to customers
+Interest rate ranges during the year:
+Interest expense on amounts due to customers
+Transactions during the year:
+2016
+0.01 to 1.30
+2017
+145
+2016
+2017
+Due to customers
+Balances at end of the year:
+(d) Joint ventures and affiliates
+The major transactions between the Group and the associates and their affiliates mainly comprised due from banks and
+other financial institutions, loans and advances to customers and due to banks and other financial institutions and the
+corresponding interest income and interest expense. In the opinion of management, the transactions between the Group
+and the associates and their affiliates were conducted under normal commercial terms and conditions.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+227
+219
+0 to 1.30
+(e) Key management personnel
+There were no other material transactions and balances with key management personnel on an individual basis for the
+year ended 31 December 2017. The Group enters into banking transactions with key management personnel in the normal
+course of business.
+2,693
+2,603
+2016
+RMB'000
+2017
+RMB'000
+Loans
+The transactions between the Group and the aforementioned parties for the year are as follows:
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the
+Group.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2017 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's and the Bank's 2017 financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+Note: The above remuneration before tax payable to key management personnel for 2016 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2016 Annual Report.
+4,700
+4,716
+151
+4,396
+304
+2016
+RMB'000
+RMB'000
+2017
+Short-term employment benefits
+Post-employment benefits
+The aggregate compensation for the year, other than those for the personnel disclosed in note 13 above, is as follows:
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+4,867
+383,376
+8,757
+757
+10,812
+37,323
+361,691
+Share of profits of associates and
+joint ventures
+Profit before taxation
+Income tax expense
+Profit for the year
+2,950
+2,950
+47,191
+71,633
+47,561
+66,818
+32,659
+47,694
+10,812
+40,273
+364,641
+47,694
+32,659
+66,818
+47,561
+(19,265)
+(28,478)
+(20,189)
+(19,878)
+(5,656)
+(3,023)
+(124,096)
+China
+(276)
+(77,190)
+(40)
+(57)
+(998)
+(1,044)
+6
+(957)
+(3,673)
+Operating profit
+47,191
+71,633
+(307)
+287,451
+Other segment information:
+Depreciation
+2,011
+2,830
+787
+22,050
+35,671
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(i)
+As at 31 December 2017
+1,539
+Mainland China (HO and domestic branches)
+Assets by geographical areas
+9,101,260
+Yangtze
+River Delta
+5,327,071
+Pearl
+Bohai
+River Delta
+Rim
+3,356,039
+3,710,656
+Head Office
+(16,972)
+1,303
+1,512
+1,704
+1,918
+1,323
+2,079
+2,452
+2,856
+1,155
+386
+13,873
+3,639
+Amortisation
+240
+181
+169
+285
+352
+88
+172
+2,114
+Capital expenditure
+627
+(10,635)
+Loans and advances to customers
+Impairment (losses)/reversal on:
+China
+China
+others
+Eliminations
+Total
+External net interest income
+212,369
+50,808
+47,429
+Notes to the Financial Statements
+28,671
+71,964
+15,441
+45,376
+522,078
+Internal net interest (expense)/income
+(142,941)
+28,970
+15,958
+73,129
+50,020
+13,526
+Financial Statements for the year ended 31 December 2017
+The interest rates disclosed above vary across product groups and transactions depending on the maturity date, credit
+risk of counterparty and currency. In particular, given local market conditions, the spread of certain major or long dated
+transactions can vary across the market.
+15,442
+37,385
+427,149
+387,233
+25,971
+10,063
+2016
+2017
+Credit commitments
+(In RMB millions, unless otherwise stated)
+Financial investments
+Reverse repurchase agreements
+Derivative financial liabilities
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Debt securities purchased
+Balances at end of the year:
+(b) Subsidiaries
+Repurchase agreements
+Western
+China
+3,113,759
+8,597
+(5,115)
+117,132
+88,516
+126,006
+81,341
+100,795
+28,632
+59,445
+(54)
+675,654
+73,841
+Operating expenses
+(28,487)
+(21,383)
+(30,653)
+(27,495)
+(32,179)
+(12,170)
+(18,142)
+54
+(186,194)
+(15,739)
+7,876
+Operating income
+(39)
+Net fee and commission income
+6,063
+36,449
+24,415
+23,282
+17,548
+19,383
+4,596
+7,904
+13,951
+(15)
+Other (expense)/income, net (i)
+(1,650)
+905
+714
+924
+247
+851
+719
+11,280
+139,625
+Rim
+39,510
+47,199
+78,542
+ICBC
+234
+171,034
+67,707
+103,327
+105,021
+56,652
+48,369
+Fair value of collateral held
+139,029
+34,617
+104,412
+79,483
+30,279
+49,204
+Total
+43,314
+9,856
+33,458
+8,554
+7,064
+1,490
+Two to three months
+20,851
+7,437
+(a) Credit risk (continued)
+Bank
+2017
+Notes to the Financial Statements
+13,290
+5,862
+7,428
+One to two months
+63,778
+14,962
+48,816
+46,649
+15,424
+31,225
+Less than one month
+Past due for:
+13,414
+Total
+advances
+Total
+loans
+advances
+Personal
+loans and
+Personal
+loans and
+Corporate
+Corporate
+2016
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+loans
+13,625
+6,112
+7,513
+5,567,618
+Loans secured by mortgages
+3,376,134
+1,554,106
+1,939,956
+151,788
+1,788,168
+Guaranteed loans
+4,221,694
+81,433
+4,140,261
+Unsecured loans
+Total
+Pledged loans
+mention
+Total
+2016
+Special
+Special
+mention
+Pass
+2017
+Bank
+2016
+Special
+mention
+Total
+60,195 3,505,264
+137,312 1,813,621
+227,619 5,789,252
+27,175 1,597,879
+452,301 12,706,016
+82,058 4,298,184 3,445,069
+153,003 2,041,971 1,676,309
+231,869 6,344,712 5,561,633
+24,062 1,248,110 1,570,704
+490,992 13,932,977 12,253,715
+1,224,048
+13,441,985
+Pledged loans
+6,112,843
+Loans secured by mortgages
+Pass
+12,988
+1,197,735
+12,693,782
+5,092,031
+One to two months
+74,864
+17,324
+57,540
+57,304
+17,103
+40,201
+Less than one month
+Past due for:
+Total
+Personal
+loans
+Corporate
+loans and
+advances
+221,800 5,789,418
+23,655 1,221,390
+478,676 13,172,458
+Total
+advances
+Corporate
+loans and
+2016
+2017
+Group
+The following tables present the ageing analysis of each type of loans and advances to customers of the Group and the Bank
+that are subject to credit risk which are past due but not impaired as at the end of the reporting period:
+Past due but not impaired
+11,980,647
+436,877
+26,290 1,547,789
+1,521,499
+11,543,770
+58,996 3,435,130
+136,101 1,690,207
+215,490 5,307,521
+Personal
+loans
+7,237
+20,225
+Two to three months
+15,779
+100
+Public sector entities
+996,669
+30,729
+2,228
+206,621
+757,091
+Policy banks
+3,305,697
+10,590
+24,468
+196,793
+514,604
+85,000
+Governments and central banks
+Neither past due nor impaired
+Total
+profit or loss
+for trading
+assets
+assets
+designated
+at fair value
+through
+Financial
+assets held
+financial
+maturity
+investments
+Receivables
+2,671,035
+Available-
+for-sale
+4,670
+220,295
+(149)
+(84)
+3,542,184
+226,235
+Subtotal
+impairment losses
+Less: Collective allowance for
+5,373,886
+59,777
+78,542
+1,467,059
+3,542,268
+226,240
+2,953
+332,315
+38,724
+241,795
+25,359
+17,898
+Corporate entities
+518,910
+6,966
+8,452
+307,246
+73,004
+123,242
+Banks and other financial institutions
+8,539
+1,888,968
+Held-to-
+31 December 2017
+The carrying amount of rescheduled loans and advances to customers is as follows:
+The Group has formulated a set of loan restructuring policies to renegotiate the contractual terms with customers, to
+maximise the collectability of loans and to manage customer relationships.
+Rescheduled loans and advances to customers
+The fair values of collateral that the Group and the Bank hold relating to loans individually determined to be impaired as at
+31 December 2017 amounted to RMB30,873 million (31 December 2016: RMB42,046 million) and RMB29,251 million (31
+December 2016: RMB40,477 million), respectively. The collateral mainly consists of buildings and land and equipment.
+Impaired loans and advances are defined as those loans and advances having objective evidence of impairment as a result of
+one or more events that occured after initial recognition and that event has an impact on the estimated future cash flows
+of loans and advances that can be reliably estimated. These loans and advances include corporate loans and personal loans
+which are graded as "Substandard", "Doubtful" or "Loss".
+Impaired
+164,290
+65,137
+99,153
+95,828
+54,716
+41,112
+Group
+Fair value of collateral held
+31,959
+95,071
+68,313
+28,230
+40,083
+Total
+43,027
+9,760
+33,267
+8,374
+6,944
+1,430
+127,030
+Financial
+Bank
+2016
+Group
+The following tables present an analysis of the Group's total credit risk exposures of debt securities by types of issuers and
+investments:
+The credit risk of debt securities mainly arises from the risk that the issuer might default on a payment or go into liquidation.
+Debt securities by different types of issuers are generally subject to different degrees of credit risk.
+(iv) Debt securities
+(a) Credit risk (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+235
+Annual Report 2017
+During the year, the Group took possession of collateral held as security with a carrying amount of RMB2,099 million
+(2016: RMB2, 106 million). Such collateral mainly comprises buildings and land and equipment.
+Collateral repossessed
+2017
+1,652
+2,085
+1,989
+customers included in above
+Impaired loans and advances to
+5,052
+2,590
+5,541
+5,158
+customers
+Rescheduled loans and advances to
+2016
+2017
+1,618
+Guaranteed loans
+4,216,126
+Unsecured loans
+Total maximum credit risk exposure
+Credit commitments
+252,944
+4,626
+3,130
+14,371
+13,000
+18,327
+13,374
+15,449
+170,667
+1,532,327
+9,174,306 2,525,882
+664,711 454,359
+9,839,017 2,980,241
+89,157
+26,833
+20,845
+227,690
+29,902
+51,435
+1,084,057
+- Available-for-sale financial assets
+Others
+2,876,081
+44,072
+9,607
+39,190
+27,706
+2,408
+16,551
+1,823,977
+329,705
+2,153,682
+2,376,379
+1,766,388
+1,640,498
+1,868,700
+Transportation, storage and postal services
+2016
+2017
+2016
+2017
+Bank
+Group
+The credit risk exposures of the Group mainly comprise loans and advances to customers and investments in securities.
+Details of the composition of the Group's investments in debt securities are set out in note 54(a)(iv) to the financial
+statements. The composition of the Group's and of the Bank's gross loans and advances to customers by industry is analysed
+as follows:
+By industry distribution
+2,490,926 1,874,336
+497,717
+168,277
+2,988,643 2,042,613
+(a) Credit risk (continued)
+Notes to the Financial Statements
+ICBC
+232
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+1,361,849 24,782,391
+786,600
+2,629,746
+22,068,516
+1,085,954
+275,895 2,713,875
+69,844
+253,367
+716,756
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+1,553,297
+17,402
+2,685,913
+445
+416
+640
+178
+1,634
+2,255
+3,107
+47,920
+Derivative financial assets
+205
+193
+18,214
+46
+182
+252,102
+through profit or loss
+Financial assets designated at fair value
+135,775
+135,775
+Financial assets held for trading
+927,705
+259,221
+162
+1,220
+1,990
+543
+259
+35,640
+917
+6,742
+-Held-to-maturity investments
+263,456
+240
+312
+3,800
+2,756
+494
+153
+255,701
+- Receivables
+Financial investments
+12,033,200
+272,118
+572,980
+2,264,366
+1,783,466
+2,120,405
+1,704,380
+2,362,003
+534,225
+Loans and advances to customers
+502,296
+520
+501,776
+Reverse repurchase agreements
+62,892
+691,375
+(238)
+Manufacturing
+1,550,544
+2016
+2017
+2016
+2017
+Bank
+Group
+The total credit risk exposures of loans and advances to customers are summarised as follows:
+(iii) Loans and advances to customers
+708,339
+12,312,810
+673,362
+4,108,440
+349,024
+13,455,417
+719,993
+13,056,846
+Neither past due nor impaired
+351,126
+14,233,448
+Discounted bills
+4,843,049
+4,196,169
+4,945,458
+Subtotal for personal loans
+754,295
+699,059
+790,559
+Others
+3,435,078
+4,088,754
+3,497,110
+Total for loans and advances to customers
+4,154,899
+Past due but not impaired
+13,932,977
+79,483
+220,988
+Pass
+Total
+Special
+mention
+Pass
+2017
+Group
+The balance of loans and advances to customers of the Group and the Bank that are neither past due nor impaired analysed
+by five-tier classification and by collateral are as follows:
+Neither past due nor impaired
+(a) Credit risk (continued)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+233
+Impaired
+Annual Report 2017
+13,125,401
+(279,610)
+12,312,810
+205,133
+127,030
+11,980,647
+13,172,458
+68,313
+214,646
+13,455,417
+(330,016)
+12,706,016
+139,029
+211,801
+13,056,846
+(289,512)
+12,767,334
+13,892,966
+(340,482)
+Less: Allowance for impairment losses
+14,233,448
+12,033,200
+1,622,263
+Personal mortgage and business loans
+8,263,344
+676,573
+public utility management
+Water, environment and
+723,799
+658,745
+776,739
+702,151
+495,609
+597,547
+642,423
+739,783
+860,182
+536,718
+947,100
+971,938
+Wholesale and retail
+Real estate
+heating, gas and water
+Production and supply of electricity,
+792,786
+961,509
+828,686
+1,017,887
+Leasing and commercial services
+1,487,718
+1,572,794
+891,870
+7,496,031
+656,895
+Finance
+8,140,684
+8,936,864
+Subtotal for corporate loans
+320,923
+304,901
+397,951
+384,070
+Others
+127,104
+130,874
+136,799
+146,074
+520,598
+Science, education, culture and sanitation
+231,493
+212,450
+249,244
+Construction
+244,543
+230,195
+274,273
+262,262
+Mining
+173,701
+251,733
+295,919
+195,771
+1,466,910
+78,542
+59,777
+Cash and balances with central banks
+Assets:
+Total
+Undated
+(***)
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+529,507
+31 December 2017
+The Group and the Bank's expected remaining maturity of its financial instruments may vary significantly from the following
+analysis. For example, demand deposits from customers are expected to maintain a stable or increasing balance although
+they have been classified as repayable on demand in the following tables.
+(i) Analysis of the remaining maturity of the assets and liabilities
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+projecting cash flows and evaluating the level of current assets; and
+maintaining the stability of the deposit base;
+optimising the structure of assets and liabilities;
+•
+.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Liquidity risk is the risk that funds will not be sufficient or will not be raised at a reasonable cost in a timely manner to meet
+the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+(b) Liquidity risk
+(In RMB millions, unless otherwise stated)
+Group
+Financial Statements for the year ended 31 December 2017
+7,598
+14,650
+151,689
+157,414
+1,715
+1,630
+4,786
+through profit or loss
+Financial assets designated at fair value
+87,337
+8,795
+6,799
+7,089
+50,873
+14,578
+6,099
+Financial assets held for trading
+1,834,242
+301
+60,936
+299,346
+213,862
+900,047
+359,750
+other financial institutions (*)
+Due from banks and
+3,613,872
+3,047,539
+7,682
+30,285
+Notes to the Financial Statements
+Annual Report 2017
+246,766
+Subtotal
+(13)
+(13)
+impairment losses
+Less: Collective allowance for
+4,831,492
+40,601
+135,774
+1,532,257
+2,876,094
+246,766
+2,876,081
+355,989
+22,521
+297,021
+7,525
+22,386
+Corporate entities
+621,181
+21,277
+103,133
+314,156
+45,435
+137,180
+Banks and other financial institutions
+6,536
+237
+1,532,257
+40,601
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Bank considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Bank as security of the impaired debt securities.
+(*)
+4,831,549
+40,601
+135,774
+1,532,327
+2,876,081
+246,766
+Total
+70
+70
+Subtotal
+135,774
+(151)
+(26)
+impairment losses
+Less: Individual allowance for
+221
+195
+26
+221
+195
+26
+Corporate entities
+Impaired (*)
+4,831,479
+(125)
+163,105
+6,082
+Derivative financial assets
+7,330
+Debt securities issued
+946,831
+10,701,914
+Due to customers
+260,274
+296
+12,049
+102,316
+95,928
+2,752,887
+45,908
+Others
+22,698
+254,170
+1,043,392
+49,685
+Certificates of deposit
+985,193
+Due to banks and other financial institutions (**)
+78,556
+5,659
+8,628
+27,290
+18,013
+18,752
+214
+401,526
+Derivative financial liabilities
+Total liabilities
+77,587
+ICBC
+238
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,141,056
+3,488,301
+7,619,544
+23,945,987
+374,070
+674,577
+319,177
+22,589
+526,940
+284,294
+200,826
+19,226,349
+13,514
+2,549,444
+3,764,140
+22,870
+132,359
+4,593,394 2,868,270
+(829,587) 3,452,159
+1,250,506
+11,620
+61,384
+1,830,609
+(595,509)
+(200,327)
+2,212,710
+12,066,934
+(10,793,525)
+Net liquidity gap
+61,481
+353,601
+425,948
+12,740
+32,441
+Investments in associates and joint ventures
+5,315,766
+23,294
+1,709,619
+2,803,426
+505,890
+173,033
+100,504
+Financial investments
+13,892,966
+82,301
+32,441
+6,195,484
+2,643,941
+780,058
+906,587
+40,414
+Loans and advances to customers
+89,013
+5,424
+12,171
+34,609
+21,188
+15,459
+162
+3,244,181
+1,810
+Property and equipment
+247,744
+142,873
+138,978
+69,111
+60,436
+through profit or loss
+Financial liabilities designated at fair value
+456
+404
+20
+10
+22
+Due to central banks
+247,744
+Liabilities:
+620,061
+40,105
+3,488,301
+45,702
+7,993,614
+40,937
+6,320,429
+57,084
+3,763,807
+24,567
+1,235,100
+2,012,383
+1,273,409
+Total assets
+72,876
+338,790
+Others
+26,087,043
+5,282
+2,212
+137,463
+Impaired (*)
+(13)
+5,161,955
+40,873
+183,315
+1,720,560
+(13)
+2,973,042
+244,165
+Subtotal
+impairment losses
+Less: Collective allowance for
+5,161,968
+40,873
+Banks and other financial institutions
+183,315
+2,973,055
+244,165
+439,559
+6,808
+45,678
+329,358
+35,329
+22,386
+Corporate entities
+681,481
+21,277
+107,963
+1,720,560
+369,938
+68
+Corporate entities
+(a) Credit risk (continued)
+ICBC
+236
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Group considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Group as security of the impaired debt securities.
+5,162,025
+40,873
+183,315
+1,720,630
+2,973,042
+244,165
+70
+70
+68
+(451)
+(94)
+521
+427
+94
+453
+427
+26
+(*)
+Total
+Subtotal
+impairment losses
+Less: Individual allowance for
+(357)
+Bank
+47,724
+Banks and other financial institutions
+31 December 2016
+5,373,733
+59,777
+1,466,995
+3,542,184
+226,235
+85
+85
+(279)
+(196)
+(83)
+Total
+Financial
+Subtotal
+364
+281
+83
+305
+281
+24
+59
+59
+Less: Individual allowance for
+Banks and other financial institutions
+Corporate entities
+Impaired (*)
+5,373,648
+impairment losses
+134,579
+Receivables
+Available-
+for-sale
+financial
+178,991
+2,212
+10,938
+141,405
+22,236
+2,200
+Public sector entities
+1,319,450
+10,576
+4,548
+334,477
+969,849
+Held-to-
+maturity
+investments
+Policy banks
+14,188
+545,382
+1,897,917
+85,000
+Governments and central banks
+Neither past due nor impaired
+Total
+at fair value
+through
+profit or loss
+Financial
+assets held
+for trading
+assets
+designated
+assets
+2,542,487
+1,207
+31 December 2017
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+5,101,425
+47,414
+60,072
+1,324,817
+3,439,471
+229,651
+Total
+Subtotal
+(24)
+(24)
+24
+24
+31 December 2016
+24
+impairment losses
+Less: Individual allowance for
+Corporate entities
+Impaired (*)
+5,101,425
+47,414
+60,072
+1,324,817
+(225)
+(139)
+(81)
+3,439,471
+229,651
+24
+Subtotal
+Financial
+Held-to-
+maturity
+investments
+20,023
+2,200
+Public sector entities
+1,231,184
+10,576
+1,095
+275,427
+944,086
+Policy banks
+2,460,033
+7,818
+508,190
+Receivables
+1,859,025
+Governments and central banks
+Neither past due nor impaired
+Total
+profit or loss
+for trading
+assets
+through
+at fair value
+Financial
+assets held
+designated
+assets
+Available-
+for-sale
+financial
+85,000
+Notes to the Financial Statements
+(5)
+Less: Collective allowance for
+189,069
+728,060
+Policy banks
+3,189,069
+7,371
+487,922
+2,608,776
+85,000
+Governments and central banks
+Neither past due nor impaired
+Total
+profit or loss
+2,199
+for trading
+investments
+Receivables
+through
+assets held
+financial
+maturity
+assets
+designated
+at fair value
+Financial
+Financial
+for-sale
+Held-to-
+Available-
+assets
+impairment losses
+30,729
+Public sector entities
+5,101,650
+47,414
+60,072
+1,324,956
+3,439,552
+229,656
+265,496
+6,766
+37,927
+198,422
+4,483
+17,898
+950,057
+Corporate entities
+6,966
+7,957
+259,678
+90,549
+126,658
+Banks and other financial institutions
+205,220
+2,953
+4,618
+189,865
+7,684
+100
+491,808
+13,308
+204,903
+institutions
+China
+China
+China and others
+315,725
+288,090
+1,532,327
+1,324,817
+1,729,434
+1,473,159
+― Available-for-sale financial assets
+Others
+263,456
+2,876,081
+3,439,471
+2,973,042
+3,542,184
+Held-to-maturity investments
+231,631
+291,370
+53,856
+62,892
+Reverse repurchase agreements
+986,631
+755,627
+750,763
+Bohai Rim
+502,296
+13,892,966
+12,767,334
+13,125,401
+12,033,200
+Receivables
+277,129
+Loans and advances to customers
+Financial investments
+Overseas
+North
+eastern
+Western
+220,802
+517,276
+414,893
+2,355,123
+3,291,613
+579,997
+911,612
+10,741,567
+371,775
+Total maximum credit risk exposure
+740,449
+2,594,612
+2,067,777
+2,633,747
+1,940,230
+2,711,616
+Credit commitments
+94,452
+84,106
+2,288,579
+Central
+Pearl River
+Delta
+Yangtze
+River Delta
+44,528
+2,860,191
+Balances with central banks
+Head
+Office
+3,151,023
+31 December 2016
+28,878,520
+3,510,936
+25,367,584
+2,849,198
+410,475
+3,259,673
+824,555
+2,966,387
+The compositions of each geographical distribution above are set out in note 53(b).
+89,013
+Derivative financial assets
+272,118
+Individually assessed loans with no objective evidence of impairment
+Individually assessed loans with no objective evidence of impairment are grouped together in portfolios of similar credit
+risk characteristics for the purpose of assessing a collective impairment loss. The collective impairment loss is assessed after
+taking into account:
+•
+Historical loss experience in portfolios of similar risk characteristics; and
+•
+The current economic and credit environment and, whether these, in management's experience, indicate that the
+actual level of incurred but not yet identified losses is likely to be greater or less than that suggested by historical
+experience.
+(a) Credit risk (continued)
+As soon as information that specifically identifies objective evidence of impairment on individual assets in a pool is available,
+those assets are excluded and individually assessed. Assets that are individually assessed for impairment and for which an
+impairment loss is or continues to be recognised are not included in a collective assessment for impairment.
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Fair value of collateral is shown in note 25.
+Corporate loans are mainly collateralised by properties or other assets. As at 31 December 2017, the carrying value of
+corporate loans and discounted bills amounted to RMB9,287,990 million (31 December 2016: RMB8,860,677 million), of
+which credit exposure of corporate loans covered by collateral amounted to RMB3,335,404 million (31 December 2016:
+RMB3,771,915 million).
+Retail loans are mainly collateralised by residential properties. As at 31 December 2017, the carrying value of retail loans
+amounted to RMB4,945,458 million (31 December 2016: RMB4,196,169 million), of which credit exposure of retail loans
+covered by collateral amounted to RMB4,313,125 million (31 December 2016: RMB3,666,608 million).
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Although collateral can be an important mitigation of credit risk, the Group grants loans based on the assessment of the
+borrowers' ability to meet obligations out of their cash flow, instead of the value of collateral. The necessity of a collateral
+is dependent on the nature of the loan. In the event of default, the Group might sell the collateral for repayment. The fair
+value of collateral of past due but not impaired loans and impaired loans are disclosed in note 54(a)(iii).
+Collateral
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+252,944
+49
+449
+1,347
+11,524
+529,573
+institutions
+Notes to the Financial Statements
+Due from banks and other financial
+164,213
+9,372
+29,242
+23,158
+84,806
+50,706
+Total
+3,266,216
+9,829,955
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+229
+financial institutions
+Financial assets held for trading
+847,611
+797,473
+930,593
+927,705
+78,542
+3,209,722
+183,315
+135,775
+Financial assets designated at
+fair value through profit or loss
+353,601
+285,144
+338,257
+60,072
+Annual Report 2017
+3,477,828
+3,538,658
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+(i) Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+As at the end of the reporting period, the maximum credit risk exposure of the Group and of the Bank without taking
+account of any collateral and other credit enhancements is set out below:
+3,266,216
+645,979
+Bank
+2017
+2016
+2017
+2016
+Balances with central banks
+Due from banks and other
+Group
+1,970
+288,090
+3,773
+Bohai Rim
+China
+China
+China
+and others
+Total
+Balances with central banks
+3,065,933
+59,322
+34,559
+115,233
+26,569
+33,744
+9,270
+194,028
+3,538,658
+Due from banks and other financial
+78,542
+18,470
+60,072
+Financial assets held for trading
+847,611
+258,793
+Overseas
+123
+210
+634
+1,128
+2,854
+582,618
+institutions
+1,251
+eastern
+Western
+Central
+(ii) Risk concentrations
+24,782,391
+27,447,539
+2,713,875
+3,476,117
+2,778,412
+26,237,544
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+28,878,520
+3,510,936
+Credit commitments
+22,068,516
+23,971,422
+23,459,132
+25,367,584
+Total maximum credit risk exposure
+Financial assets designated at fair value
+230
+(a)
+Pearl River
+Delta
+Delta
+Office
+River
+Head
+North
+ICBC
+Yangtze
+Group
+The following tables set out the breakdown of the Group's and the Bank's maximum credit risk exposure without taking
+account of any collateral and other credit enhancements, as categorised by geographical distribution:
+By geographical distribution
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Credit risk (continued)
+31 December 2017
+through profit or loss
+333,921
+557
+12,677
+68,913
+44,699
+24,344
+22,004
+28,576
+216,380
+3,124,591
+277,129
+49,913
+120
+270
+3,540
+1,736
+-Held-to-maturity investments
+284
+3,542,184
+933,376
+14,593
+20,255
+18,148
+13,558
+32,024
+128,867
+- Available-for-sale financial assets
+Others
+1,473,159
+1,279
+22,933
+17,417
+193,388
+24,088
+45,079
+235,599
+56,872
+24
+- Receivables
+1,467
+306
+2,228
+1,889
+647
+34,410
+194
+Derivative financial assets
+17,473
+91
+370
+253
+563
+373
+353,601
+221,242
+47,872
+Reverse repurchase agreements
+Financial investments
+13,892,966
+1,505,600
+712,922
+2,451,071
+1,954,528
+89,013
+2,277,473
+2,542,533
+606,492
+Loans and advances to customers
+986,631
+248,198
+738,433
+1,842,347
+1,089
+238,733
+662
+eastern
+Western
+Central
+Pearl River
+River
+Head
+North
+Yangtze
+31 December 2017
+Bank
+(a) Credit risk (continued)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+231
+Annual Report 2017
+The compositions of each geographical distribution above are set out in note 53(b).
+26,237,544
+Total maximum credit risk exposure
+662,510
+9,667,198
+441,169
+2,964,567
+1,820,042
+314,846
+2,134,888
+2,482,950
+485,726
+2,968,676
+Overseas
+1,874,316
+158,583
+249,912
+2,032,899 2,626,160
+716,756
+67,703
+784,459
+2,660,734
+397,963
+23,459,132
+2,778,412
+3,058,697
+2,376,248
+Office
+Delta
+Delta
+728,091
+2,884
+8,179
+634
+210
+210
+institutions
+1,264
+189,208
+930,593
+Financial assets held for trading
+60,072
+60,072
+Financial assets designated at fair value
+46
+Credit commitments
+Due from banks and other financial
+133,198
+Bohai Rim
+China
+China
+China
+and others
+Total
+3,477,828
+Balances with central banks
+59,322
+34,559
+115,233
+26,569
+33,744
+9,270
+3,065,933
+through profit or loss
+2,523,398
+315,725
+153
+236,101
+- Receivables
+Financial investments
+12,767,334
+1,315,696
+691,375
+2,264,366
+1,783,466
+2,112,523
+1,704,380
+2,361,303
+534,225
+Loans and advances to customers
+755,627
+272,307
+483,320
+162
+13,943
+285,144
+Derivative financial assets
+40,803
+3,107
+494
+2,255
+178
+640
+416
+45,419
+94,452
+Reverse repurchase agreements
+1,634
+2,756
+3,800
+312
+20,845
+26,833
+2,408
+286,761
+1,729,434
+Others
+227,690
+170,596
+13,374
+18,327
+13,000
+14,371
+3,130
+67,478
+15,449
+9,004,688
+29,902
+1,083,560
+240
+47,514
+291,370
+-Held-to-maturity investments
+2,678,442
+35,640
+51,435
+17,402
+27,706
+39,190
+9,607
+148,504
+2,973,042
+-Available-for-sale financial assets
+16,551
+333,921
+123
+373
+23,971,422
+3,476,117
+2,295,332
+2,974,708
+830,932
+1,543,069 27,447,539
+1,251,987
+291,082
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+Yangtze
+North
+Head
+River
+Office
+Delta
+31 December 2016
+Pearl River
+Delta
+84,279
+227,552
+2,711,690
+1,947,288
+2,650,540
+2,067,780
+2,594,630
+557
+380,078
+Credit commitments
+937,147
+596,587
+10,938,001
+3,308,277
+429,153
+2,376,441
+530,239
+3,180,779
+Total maximum credit risk exposure
+10,000,854
+Central
+eastern
+205
+193
+18,214
+182
+259
+252,102
+Due from banks and other financial
+through profit or loss
+183,315
+47,540
+135,775
+Financial assets held for trading
+797,473
+251,359
+Financial assets designated at fair value
+Western
+3,209,722
+9,372
+Overseas
+Bohai Rim
+China
+China
+China
+and others
+107,719
+Total
+2,860,191
+44,528
+50,706
+84,806
+23,158
+29,242
+Balances with central banks
+238,733
+746,653
+3,773
+Financial investments
+707,746
+719,126
+2,451,071
+1,954,528
+7,242
+2,294,258
+1,842,347
+2,542,533
+613,792
+Loans and advances to customers
+750,763
+10,813
+739,950
+Reverse repurchase agreements
+53,856
+10,687
+563
+253
+370
+91
+2,129
+338,257
+- Receivables
+Derivative financial assets
+647
+1,889
+2,228
+306
+1,467
+194
+36,438
+225,657
+13,125,401
+284
+24
+193,388
+17,417
+22,933
+1,279
+84,295
+45,079
+1,324,817
+129,073
+32,068
+13,565
+18,156
+20,258
+14,598
+Others
+936,338
+24,088
+3,439,471
+1,736
+3,540
+270
+120
+-Available-for-sale financial assets
+-Held-to-maturity investments
+3,131,589
+231,631
+22,004
+24,344
+44,699
+68,913
+12,677
+106,669
+28,576
+2,275
+Derivative financial instruments settled on net basis
+28
+287
+1,018
+336
+606
+Derivative cash flows:
+221,489
+357,297
+142,322
+2,903
+1,414
+2,836,157
+4,304,685
+580,556
+338,744
+Derivative financial instruments settled on gross basis:
+22,529,056
+- Cash inflow
+631
+1,028,853 827,776 1,877,540
+(1,029,218) (822,752) (1,867,131)
+(365) 5,024
+10,409
+49,222
+840,779
+725,987
+2,675,726
+2,682,913
+4,904,653
+Loans and advances to customers
+153,920
+Financial investments
+61,974
+168,848
+580,312
+2,334,396
+1,526,334
+12,033,200
+76,512
+62,892
+1,749
+Financial assets designated at fair value
+through profit or loss
+1,297
+206
+14,260
+30,745
+787
+201,682
+4,108
+272,118
+Derivative financial assets
+12,974
+16,639
+30,743
+19,820
+184,074
+4,748,376
+136,530
+5,304,678
+6,490,902
+3,372,603
+22,788,080
+Liabilities:
+Due to central banks
+3,741,091
+379
+Financial liabilities designated at fair value
+through profit or loss
+74,912
+168,127
+36,092
+13,685
+379
+Investments in subsidiaries and associates
+1,258,322
+850,439
+136,530
+Property and equipment
+124,089
+124,089
+Others
+319,652
+1,770,045
+38,678
+49,645
+25,465
+34,468
+29,883
+506,530
+Total assets
+8,739
+352,001
+48,300
+1,783
+505,720
+22,585,711
+3,453,042 2,059,401
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+6,076
+240
+(b) Liquidity risk (continued)
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Overdue/
+Less
+ICBC
+One to
+436,275
+132,587
+Due to customers
+10,505,305
+774,200
+1,123,942
+2,527,700
+Debt securities issued
+273,922
+Others
+Net liquidity gap
+191,349
+11,695,483
+(10,586,995)
+6,733
+8,191
+68,903 59,266
+1,858,150 1,633,787
+(23,340) (438,181)
+3,616,071
+14,842
+127,169 52,957
+4,359,674 2,743,799 294,818
+(793,840) 3,101,967 7,346,748
+13,315
+18,560,533
+Total liabilities
+838
+Three
+than one
+2,799,261
+3,290,270
+other financial institutions (*)
+66,696
+761,207
+292,443
+47,281
+248,963
+4,002
+1,430,001
+Financial assets held for trading
+42,588
+12,889
+77,676
+56,690
+repayable
+18,517
+413,572
+three
+on demand
+month
+months
+months to
+one year
+One to
+11,639
+five years
+Undated
+(***)
+Total
+Assets:
+Cash and balances with central banks
+Due from banks and
+More than
+five years
+- Cash outflow
+Derivative financial liabilities
+18,411
+1,855,093
+Financial assets held for trading
+7,880
+6,284
+52,330
+12,003
+308
+12,429
+99,639
+Financial assets designated at fair value
+through profit or loss
+4,955
+1,741
+2,007
+8,713
+137,453
+64,958
+217,389
+(***)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+529,507
+308,631
+7,598
+14,650
+3,047,539
+3,617,986
+Due from banks and other financial institutions (*)
+360,594
+903,213
+18,692
+Undated
+157,443
+4,996
+31 December 2016
+(b) Liquidity risk (continued)
+ICBC
+244
+Includes repurchase agreements.
+(*)
+235,552
+15,625
+(3,798,059)
+(1,551)
+(77,407)
+3,813,684
+1,477
+78,038
+(74)
+31,276
+9,294,094
+2,012,391
+631,417
+4,665
+4,378,003
+339,871
+Loans and advances to customers (**)
+40,970
+974,577
+943,429
+3,228,857 5,408,201
+3,319,794
+6,271
+Financial investments
+109,323
+Others
+328,444
+1,264,894
+28,573
+2,032,905 1,414,157
+197,328
+29,028
+424
+8,762
+More than
+five years
+one year
+194,503
+Due to customers
+9,603,296
+724,528
+1,154,911
+3,591,901
+453
+2,155,589
+17,235,587
+Debt securities issued
+3,308
+Others
+226,524
+Total liabilities
+5,362
+Net liquidity gap
+16,936
+56,391
+27,813
+2,210
+983
+58,179
+Due to banks and other financial
+institutions (**)
+93,721
+1,246,298
+141,150
+189,312
+4,401
+2,225,769
+Certificates of deposit
+27,002
+644,608
+five years
+59,374
+11,135,303 1,542,494
+(10,284,864) 227,551
+10,832
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+Group
+31 December 2017
+Overdue/
+repayable
+241
+One to
+on demand
+Less than
+one month
+three
+months to
+One to
+months
+Three
+1,042
+53,285 128,418
+1,593,317 4,078,089
+(334,995) (336,998)
+Annual Report 2017
+(ii) Maturity analysis of contractual undiscounted cash flows
+80,530
+183,734
+279,446
+58,133
+6,553
+532,287
+The tables below summarise the maturity profile of the Group's and of the Bank's financial instruments based on the
+contractual undiscounted cash flows. The balances of some items in the tables below are different from the balances on
+the statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group
+and the Bank's expected cash flows on these instruments may vary significantly from the following analysis. For example,
+demand deposits from customers are expected to maintain a stable or increasing balance although they have been classified
+as repayable on demand in the following tables.
+2,331,863
+2,972,815
+20,878,151
+1,909,929
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+197,085
+6,293,817 3,372,603
+59,185
+2,646,377
+303
+One to
+Overdue/
+repayable
+31 December 2017
+Bank
+(b) Liquidity risk (continued)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+243
+Annual Report 2017
+Three
+Includes repurchase agreements.
+23,398
+674
+4,046,269
+(4,022,871)
+17,675
+(17,001)
+15,916 1,009,201 1,107,223 1,724,950 171,304
+(15,820) (1,005,076) (1,103,824) (1,714,270) (166,880)
+96
+4,125
+3,399 10,680
+4,424
+- Cash outflow
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+(73)
+(*)
+Less than
+three
+months to
+301,494
+Due from banks and other financial institutions (*)
+3,553,082
+20,125,680
+14,650
+18,664
+7,598
+485,599
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+Undated
+More than
+five years
+five years
+one year
+months
+one month
+on demand
+One to
+182
+786,537
+115
+(137)
+67,511
+1,316,461 3,777,425
+30,075
+861,958
+6,035
+Debt securities issued
+9,791,273
+Due to customers
+Certificates of deposit
+2,631,028
+68,179
+27,095
+105,233
+242,106
+817,628
+1,283,844
+Due to banks and other financial institutions (*)
+371,326
+2,277
+16,141
+48,348
+169,503
+75,114
+192,176
+17,590
+480
+220,889
+(52)
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+22,094,768
+332,546
+335,867
+10,383
+13,900
+5,340
+4,207,082 2,567,975
+476,151
+245,210
+186,995
+28,511
+9,400
+4,237
+1,759,288
+1,799,704
+8,894
+293,113
+11,428,173
+Others
+18,058,961
+6,017
+2,305,827
+(181)
+59,943
+234,601
+68,413
+Certificates of deposit
+939,006
+Due to banks and other financial institutions (*)
+60,175
+through profit or loss
+Financial liabilities designated at fair value
+404
+404
+Due to central banks
+Due to customers
+Financial liabilities:
+Total
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+Non-derivative cash flows:
+10,506,313
+Debt securities issued
+6,891
+296
+18,729,253
+14,858
+2,607,710
+3,677,134
+30,482
+788
+224,000
+323
+12,176
+93,918
+2,422,443
+469
+9,084
+363,811
+430,078
+9,955
+138,552
+73,108 148,288
+885,647 224,426
+44,459 73,124
+775,307 1,147,931
+9,025
+427
+3,977
+1,789,389 1,603,221
+11,638,307
+132,813
+Others
+31 December 2017
+305,769
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the rescheduled loans' contractual undiscounted cash flows is determined according to the negotiated
+Loans and advances to customers (**)
+322,730
+3,633
+28,455
+154,500
+127,719
+2,007
+1,741
+4,675
+36,817
+through profit or loss
+62,051
+575
+4,557
+45,691
+5,996
+5,232
+Financial assets held for trading
+1,701,318
+4,504
+Financial assets designated at fair value
+944,690
+896,919
+3,088,065
+Includes reverse repurchase agreements.
+(*)
+30,969,820
+10,839,160 3,294,697
+8,348,705
+1,856,902 1,369,037 4,148,631
+1,112,688
+331,203
+19,047,183
+5,952,253
+8,886,493 229,954
+1,919,091 34,239
+300
+42
+3,156,686
+304
+566,079
+658
+22,566 23,444
+283,889
+Others
+187,406
+88,538
+214
+Financial investments
+4,964,245
+terms.
+through profit or loss
+Financial liabilities designated at fair value
+546
+437,334
+296,126
+5,732
+12,017
+2,984,750
+685,548
+351,122
+272,959
+40,985
+2,671
+4,544,940
+7,536 12,946
+13,301 1,996
+2,142,434 1,800,838
+23,930,902
+260,409
+12,020,606
+Debt securities issued
+19,445,665
+15,087
+3,840,195
+950,574 1,282,166
+10,711,266
+Due to customers
+263,005
+323
+Others
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+779
+242
+ICBC
+Includes repurchase agreements.
+(*)
+31,241
+1,655
+2,435
+4,494,233
+(4,462,992)
+48,177
+(46,522)
+151,844
+(149,409)
+1,337,254 913,371 2,032,741
+(1,330,028) (906,872) (2,019,388)
+7,226 6,499 13,353
+73
+10,846
+(10,773)
+- Cash outflow
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+8,047
+249
+3,098
+3,780
+141
+12,395
+(b) Liquidity risk (continued)
+103,895
+Certificates of deposit
+Undated
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+Total
+31 December 2017
+The maturity profile of the rescheduled loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+(**)
+Includes reverse repurchase agreements.
+(*)
+32,731,036
+3,320,981
+11,351,426
+8,968,670
+398,212
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+2,790,769
+62,692
+26,343
+411,610
+449,332
+2,378
+14,255
+145,563
+149,257
+74,504
+1,046,611 257,957
+985,556
+Due to banks and other financial institutions (*)
+63,375
+through profit or loss
+Financial liabilities designated at fair value
+457
+tok
+404
+21
+10
+22
+49,886 96,506
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+1,947,363
+1,032,291
+421,631
+3,249
+416
+5,172,520
+12,853
+17,888,378
+263,899
+1,430,599
+7,560,269
+1,642,179
+4,108
+24,149
+206,982
+36,907
+3,313,707 4,824,943
+632,463 2,621,704
+6,061
+6,614
+191,060
+4,295
+27,824
+373,172
+Others
+72,261
+288,349
+4,377,470
+7,738,564
+9,240,148
+427
+119
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+One to
+five years
+195,414
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2016
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) The maturity profile of the rescheduled loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+3,127,194 28,893,629
+Financial investments
+924,671
+937,939
+62,950
+22,347
+11,639
+436,282
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+Total
+(***)
+five years
+five years
+Undated
+One to More than
+Three
+months to
+one year
+months
+one month
+on demand
+three
+Less than
+repayable
+One to
+Overdue/
+47,281
+928
+2,837,069
+Due from banks and other financial institutions (*)
+Loans and advances to customers (**)
+14,536
+219
+1,448
+through profit or loss
+Financial assets designated at fair value
+199,626
+6,016
+13,085
+3,398
+105,143
+25,796
+46,188
+Financial assets held for trading
+1,568,507
+50
+74,923
+235,908
+247,894
+851,293
+158,439
+3,354,618
+11,830
+3,026,571
+72,616
+245
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+(iii) Analysis of credit commitments by contractual expiry date
+Management expects that not all of the commitments will be drawn before the expiry of the commitments.
+Group
+31 December 2017
+Credit commitments
+31 December 2016
+Three
+Repayable
+on demand
+Less than
+one month
+One to
+months to
+One to
+Annual Report 2017
+8,582
+(160)
+(3,473,190)
+20,752,996
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis:
+- Cash inflow
+- Cash outflow
+(*)
+Includes repurchase agreements.
+three months
+113
+(214)
+102
+(39)
+(137)
+808,559 999,032 1,605,798 66,739
+(807,068) (997,897) (1,599,245) (67,176)
+1,491 1,135
+6,553
+(437)
+1,644
+3,481,772
+(1,804)
+(99)
+one year
+five years
+More than
+five years
+313,218
+2,778,412
+Bank
+31 December 2017
+Credit commitments
+31 December 2016
+Credit commitments
+Repayable
+on demand
+760,743
+Less than
+one month
+Three
+months to
+One to
+one year
+five years
+More than
+five years
+Total
+1,038,989
+97,993
+One to
+three months
+247,108
+611,356
+105,676
+Total
+1,043,584
+123,905
+281,759
+649,759
+1,040,917
+371,012
+3,510,936
+230,641
+Repayable
+on demand
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Total
+Credit commitments
+756,778
+Less than
+one month
+2,389,059
+3,996,689
+191,278
+275,157
+257,043 16,885,364
+76,512 4,898,235
+1,425 336,781
+8,805,983 3,186,649 27,319,425
+4,108
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the rescheduled loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+31 December 2016
+7,102,874
+Overdue/
+repayable
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+Total
+on demand
+Non-derivative cash flows:
+4,187,684
+4,425,087
+2,413,765
+59
+through profit or loss
+1,297
+219
+14,536
+31,574
+203,245
+20,178
+Loans and advances to customers (**)
+7,210,629
+1,569,467
+49,988
+867,533
+3,173,863
+Financial investments
+Others
+311,382
+842,940
+63,376 174,177
+23,554
+119
+1,805,746 1,387,549
+600,938
+242
+901,221
+283,876
+Financial liabilities:
+379
+3,651,288
+2,227,466
+6,017
+17,392,308
+Debt securities issued
+3,311
+Others
+184,801
+196,812
+11,094,851
+1,686
+164
+21,491
+122,264
+237,300
+386,052
+557
+1,403
+3,311
+1,042
+1,477,495 1,547,794
+Due to central banks
+480
+95,079
+379
+Financial liabilities designated at fair value
+through profit or loss
+59,185
+Due to banks and other financial institutions (*)
+1,246,649
+75,114
+645,735 141,531
+169,491
+17,359
+36,934
+356,476
+191,340
+4,436
+2,229,691
+Certificates of deposit
+Due to customers
+9,604,216
+27,104 56,790
+725,189 1,178,132
+15,752
+657,496
+1,027,429
+370,334
+Decreased by 100 basis points
+Effect on
+net interest
+net interest
+income
+Effect on
+equity
+Effect on
+income
+equity
+(2,945)
+Increased by 100 basis points
+Effect on
+(35,901)
+38,284
+(1,911)
+(5,574)
+1,911
+5,578
+495
+(495)
+90
+2,945
+(825)
+2016
+Others
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+(ii) Interest rate risk
+The Group's interest rate risk mainly arises from the mismatches between the repricing dates of interest-generating assets
+and interest-bearing liabilities. The Group's interest-generating assets and interest-bearing liabilities are mainly denominated
+in RMB.
+The Group manages its interest rate risk by:
+•
+regularly monitoring the macroeconomic factors that may have impact on the PBOC benchmark interest rates;
+Total
+optimising the differences in timing between contractual repricing (maturities) of interest-generating assets and
+interest-bearing liabilities; and
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+revenue.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held
+constant, of the Group's and the Bank's net interest income and equity.
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming year,
+including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates on
+other comprehensive income, calculated by revaluing fixed rate available-for-sale financial assets held at year end, including
+the effect of any associated hedges.
+Group
+2017
+Currency
+RMB
+USD
+HKD
+managing the deviation of the pricing of interest-generating assets and interest-bearing liabilities from the PBOC
+benchmark interest rates.
+Notes to the Financial Statements
+(90)
+(4,271)
+178
+4,453
+139
+(8)
+(139)
+8
+Others
+Total
+(4,450)
+467
+(467)
+635
+(8,457)
+(51,697)
+8,457
+55,338
+248
+ICBC
+(635)
+826
+50,242
+(46,604)
+(42,300)
+4,271
+44,688
+Increased by 100 basis points
+Decreased by 100 basis points
+Effect on
+net interest
+Currency
+8,885
+income
+Effect on
+net interest
+Effect on
+income
+equity
+RMB
+USD
+HKD
+(8,885)
+(178)
+Effect on
+equity
+Financial assets designated at fair value
+247
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios as immaterial.
+Sensitivity analysis, interest rate repricing gap analysis and currency risk concentration analysis are the major market risk
+management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Bank adopts VaR analysis as the major tool for calculating and monitoring the market risk of trading
+portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the parent company
+and a sensitivity analysis based on the Group's interest rate risk exposure and currency risk exposure (both trading and non-
+trading portfolios).
+(i) VaR
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+2017
+ICBC
+31 December 2017
+Highest
+Lowest
+Interest rate risk
+25
+54
+120
+17
+Currency risk
+Average
+Commodity risk
+246
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between the
+repricing dates of interest-generating assets and interest-bearing liabilities.
+3,476,117
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+Total
+91,832
+225,685
+620,022
+727,543
+300,301
+2,713,875
+(c) Market risk
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+748,492
+Annual Report 2017
+Total portfolio VaR
+111
+240
+189
+325
+65
+12
+18
+54
+4
+38
+258
+328
+76
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaR does not add up to the total portfolio
+VaR.
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+(1) VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(3)
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+204
+54
+76
+66
+314
+49
+15
+23
+46
+4
+62
+136
+58
+360
+Interest rate risk
+Currency risk
+Commodity risk
+Total portfolio VaR
+2016
+31 December 2016
+Average
+Highest
+Lowest
+62
+92,464
+186,203
+895
+Total
+(***)
+Undated
+More than
+five years
+five years
+one year
+months
+month
+on demand
+One to
+months to
+three
+than one
+repayable
+Three
+One to
+Less
+Assets:
+Cash and balances with central banks
+Due from banks and
+485,599
+4,170
+44,397
+5,871
+5,124
+Financial assets held for trading
+1,681,356
+3,745
+64,657
+Overdue/
+296,497
+784,273
+301,230
+other financial institutions (*)
+3,548,996
+3,026,571
+14,650
+14,578
+7,598
+230,954
+31 December 2017
+Bank
+(b) Liquidity risk (continued)
+43,004
+(10,391,326)
+Net liquidity gap
+72,155
+1,868,675
+300,535
+11,426,910
+Total liabilities
+Others
+6,006
+8,318
+60,357
+1,802,366
+(490,413)
+Debt securities issued
+5,362
+2,185,850
+3,705,472
+1,286,200
+859,223
+9,783,195
+Due to customers
+218,427
+17,825,302
+510
+13,953
+193,146
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+239
+Annual Report 2017
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+136,514
+1,981,163
+6,499,529
+22,156,102
+310,607
+691,074
+52,130
+70,885
+135,012
+4,281,516 2,466,028
+(378,127) 3,363,860
+357,937
+3,334,636
+60,072
+Financial assets designated at fair value
+through profit or loss
+60,175
+through profit or loss
+Financial liabilities designated at fair value
+404
+404
+Due to central banks
+Liabilities:
+24,645,112
+67,687
+3,453,042
+5,845,766
+3,565,834
+1,834,810 1,195,606
+1,108,488
+Total assets
+530,340
+29,894
+44,295
+7,641,566
+36,283
+137,171
+8,058
+44,283
+Certificates of deposit
+2,406,842
+391
+8,862
+355,043
+221,053
+882,839
+134,675
+938,654
+46,682
+818
+1,401
+19,410
+11,548
+13,505
+Derivative financial liabilities
+407,766
+Due to banks and other financial institutions (**)
+453
+54,465
+65,707
+879,979
+36,293
+Loans and advances to customers
+53,856
+781
+1,983
+25,104
+15,916
+742,641
+10,072
+338,257
+4,621
+28,554
+149,146
+147,805
+1,715
+1,630
+4,786
+Derivative financial assets
+19,116
+2,536,478
+5,922,029
+280,580
+Others
+122,387
+122,387
+Property and equipment
+154,543
+154,543
+Investments in subsidiaries and associates
+2,926,940
+5,029,904
+1,641,652
+2,662,587
+446,438
+164,815
+80,427
+Financial investments
+13,125,401
+81,041
+33,985
+17,201
+103,774
+67,031
+11,639
+436,282
+Due from banks and
+Cash and balances with central banks
+Assets:
+Total
+(***)
+Undated
+18,517
+More than
+five years
+months to
+one year
+months
+one month
+three
+Less than
+Three
+One to
+Overdue/
+repayable
+on demand
+One to
+five years
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+47,281
+3,350,788
+through profit or loss
+Financial assets designated at fair value
+189,331
+6,016
+8,134
+935
+102,658
+25,488
+2,837,069
+46,100
+1,553,100
+41
+71,304
+228,917
+244,926
+849,479
+158,433
+other financial institutions (*)
+Financial assets held for trading
+1,448
+Notes to the Financial Statements
+(b) Liquidity risk (continued)
+11,639
+22,296
+47,281
+2,799,261
+3,294,049
+Due from banks and other financial institutions (*)
+66,701
+763,079
+413,572
+295,868
+58,529
+4,814
+1,443,636
+Financial assets held for trading
+42,658
+13,020
+79,141
+2,189
+254,645
+31 December 2016
+Cash and balances with central banks
+Non-derivative cash flows:
+6,294,555
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Overdue/
+One to
+repayable
+Less than
+three
+Financial assets:
+on demand
+months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+(***)
+Total
+one month
+48,300
+206
+36,078
+168,142
+75,000
+59,279
+through profit or loss
+Financial liabilities designated at fair value
+545
+427
+118
+46,949
+Due to central banks
+24,137,265
+3,334,636
+6,810,136
+614,131
+41,900
+35,983
+33,428
+5,829,888
+3,903,389
+Liabilities:
+1,311,953
+15,144
+366,752
+29,968
+Certificates of deposit
+2,606,105
+51,580
+24,320
+239,314
+191,175
+816,224
+2,238
+1,283,492
+89,960
+5,698
+15,687
+36,924
+21,143
+10,099
+409
+Derivative financial liabilities
+Due to banks and other financial institutions (**)
+14,260
+1,911,679
+Total assets
+2,970,082
+2,785,447
+774,633
+874,345
+62,087
+Loans and advances to customers
+94,452
+4,668
+5,144,336
+14,489
+20,320
+14,989
+254
+Derivative financial assets
+285,144
+4,108
+23,791
+205,253
+39,732
+1,035,584
+156,404
+Financial investments
+53,039
+28,506
+44,195
+377,080
+Others
+246,209
+246,209
+Property and equipment
+12,767,334
+30,077
+Investments in associates and joint ventures
+5,006,699
+12,853
+1,593,183
+2,534,397
+610,237
+185,303
+70,726
+30,077
+23,878
+4,331,521
+3,942
+38,569
+7,557
+483,688
+1,023,286
+Due from banks and other financial institutions (*)
+3,350,788
+56,117
+1,553,100
+17,442
+3,081,709
+Cash and balances with central banks
+Total
+to RMB)
+to RMB)
+to RMB)
+RMB
+195,520
+Others
+(equivalent
+Financial assets held for trading
+5,732
+Loans and advances to customers
+94,452
+12,379
+8,575
+32,020
+41,478
+Derivative financial assets
+180,632
+285,144
+272
+9,536
+271,780
+though profit or loss
+Financial assets designated at fair value
+189,331
+2,967
+3,556
+11,490,448
+HKD
+(equivalent
+USD
+1,769,181
+Net position
+23,945,987
+500,347
+317,893
+1,949,100
+21,178,647
+101,705
+674,577
+10,120
+65,228
+584,016
+Total liabilities
+Others
+526,940
+31,440
+15,213
+(equivalent
+17,501
+2,141,056
+Assets:
+31 December 2016
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+255
+Annual Report 2017
+252,669
+(**) Includes repurchase agreements.
+(*)
+3,510,936
+144,248
+43,071
+505,943
+2,817,674
+Credit commitments
+Includes reverse repurchase agreements.
+669
+863,960
+192,646
+30,154
+Certificates of deposit
+2,606,105
+118,324
+35,485
+723,289
+1,729,007
+137,310
+Due to banks and other financial institutions (**)
+10,711
+13,210
+46,150
+19,889
+Derivative financial liabilities
+366,752
+63,565
+89,960
+13,949
+13,330
+218,427
+93,117
+579,749
+Total liabilities
+Others
+357,937
+21,643
+726
+37,633
+153,201
+Debt securities issued
+17,825,302
+167,648
+235,360
+699,543
+16,722,751
+Due to customers
+182,367
+220,280
+289,238
+Financial liabilities designated at fair value
+112,653
+131,354
+Property and equipment
+30,077
+26,915
+1,627
+875
+758
+660
+5,006,699
+70,534
+20,374
+240,949
+4,674,842
+Financial investments
+12,767,334
+Investments in associates and joint ventures
+through profit or loss
+1,444
+Others
+545
+515
+30
+Due to central banks
+Liabilities:
+24,137,265
+595,981
+246,209
+281,146
+21,190,044
+Total assets
+614,131
+190,854
+4,261
+125,161
+293,855
+2,070,094
+6,335
+227,961
+Debt securities issued
+Cash and balances with central banks
+Total
+Others
+(equivalent
+to RMB)
+to RMB)
+to RMB)
+RMB
+HKD
+(equivalent
+3,354,447
+(equivalent
+Assets:
+31 December 2017
+Group
+A breakdown of the assets and liabilities analysed by currency is as follows:
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+USD
+ICBC
+161,857
+78,734
+12,302
+338,276
+though profit or loss
+Financial assets designated at fair value
+87,337
+16,052
+4,355
+18,834
+66,930
+1,834,242
+44,327
+12,961
+474,008
+1,302,946
+Due from banks and other financial institutions (*)
+3,613,872
+Financial assets held for trading
+1,403
+254
+(19)
+-1%
+HKD
+(297)
+66
+23
+-1%
+USD
+307
+2016
+2016
+2017
+Effect on equity
+Effect on profit
+before taxation
+Change in
+currency rate
+Currency
+Group
+2017
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+275
+(313)
+(929)
+(25)
+(27)
+(37)
+78
+188
+82
+22
+-1%
+-1%
+(1,026)
+2016
+2016
+Effect on profit
+before taxation
+2017
+Change in
+currency rate
+HKD
+USD
+Currency
+Bank
+Effect on equity
+2017
+266,870
+1,620
+Derivative financial assets
+3,964
+27,047
+39,863
+Derivative financial liabilities
+425,948
+61,152
+7,314
+7,682
+357,482
+Financial liabilities designated at fair value
+456
+436
+20
+Due to central banks
+Liabilities:
+26,087,043
+through profit or loss
+753,016
+78,556
+1,869,144
+19,226,349
+199,672
+262,791
+722,852
+18,041,034
+Due to customers
+260,274
+Due to banks and other financial institutions (**)
+64,230
+164,308
+20,218
+Certificates of deposit
+2,752,887
+120,522
+28,831
+734,390
+11,518
+353,601
+335,394
+22,947,828
+87,613
+26,117
+280,390
+4,921,646
+Financial investments
+13,892,966
+274,669
+5,315,766
+263,423
+12,460,372
+Loans and advances to customers
+89,013
+5,888
+6,828
+38,278
+38,019
+894,502
+2,050,805
+Investments in associates and joint ventures
+907
+Total assets
+620,061
+214,354
+3,594
+73,018
+329,095
+Others
+1,651
+247,744
+736
+111,188
+134,446
+Property and equipment
+32,441
+28,385
+1,498
+1,374
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant, on profit before taxation and
+equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity, while a positive
+amount reflects a potential net increase. This effect, however, is based on the assumption that the Group's and the Bank's
+foreign exchange exposures as at the year end are kept unchanged and, therefore, have not incorporated actions that would
+be taken by the Group and the Bank to mitigate the adverse impact of this currency risk.
+11,873
+19,553,185
+40,325
+18,623
+2
+154,613
+62,892
+Loans and advances to customers
+11,284,741
+Derivative financial assets
+643,173
+96,131
+12,033,200
+Financial investments
+4,554,549
+132,229
+14,757
+46,841
+9,155
+4,748,376
+272,118
+231
+34,752
+3,290,270
+Due from banks and other financial institutions (*)
+1,020,638
+291,929
+73,128
+44,306
+106
+1,430,001
+182,281
+1,543
+250
+184,074
+Financial assets designated at fair value
+though profit or loss
+271,781
+Financial assets held for trading
+7,264
+Investments in subsidiaries and associates
+10,011
+22,788,080
+Liabilities:
+Due to central banks
+379
+379
+Financial liabilities designated at fair value
+through profit or loss
+479,038
+279,504
+59,985
+352,001
+Derivative financial liabilities
+20,119
+31,911
+2
+6,147
+12,512
+17,353
+149,639
+20,830,593
+44,820
+64,346
+136,530
+Property and equipment
+123,613
+249
+9
+1,328,810
+218
+Others
+266,238
+51,642
+504
+188,146
+506,530
+Total assets
+124,089
+58,179
+179,180
+Cash and balances with central banks
+Due to customers
+17,956,954
+512,443
+13,431
+77,705
+18,560,533
+Debt securities issued
+221,489
+265,489
+667
+21,087
+436,275
+Others
+Total liabilities
+461,882
+30,756
+149,032
+4,863
+61,822
+133,840
+61,145
+407,766
+Derivative financial liabilities
+39,717
+5,583
+36
+1,346
+6,854
+46,682
+1,808,300
+466,803
+43,260
+88,479
+2,406,842
+Certificates of deposit
+18,973
+Due to banks and other financial institutions (**)
+3,069,074
+8,219
+20,895,986
+257
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+31 December 2016
+Assets:
+USD
+Annual Report 2017
+HKD
+(equivalent
+Others
+(equivalent
+RMB
+to RMB)
+to RMB)
+to RMB)
+Total
+(equivalent
+505,720
+(**) Includes repurchase agreements.
+(*)
+1,300,407
+69,111
+320,207
+22,585,711
+Net position
+1,742,879
+26,290
+Includes reverse repurchase agreements.
+27,793
+2,059,401
+Credit commitments
+2,793,605
+552,981
+11,090
+118,441
+3,476,117
+262,439
+691,074
+Due to banks and other financial institutions (**)
+401,106
+336,128
+though profit or loss
+Financial assets designated at fair value
+60,072
+214
+1,817
+58,041
+523
+Financial assets held for trading
+37,577
+18,396
+308,257
+1,317,126
+Due from banks and other financial institutions (*)
+3,548,996
+48,040
+1,681,356
+1,751
+1,606
+Derivative financial assets
+57,988
+12,983
+185,927
+4,773,006
+Financial investments
+13,125,401
+154,703
+338,257
+18,492
+12,309,925
+Loans and advances to customers
+53,856
+5,216
+2
+8,700
+39,938
+642,281
+5,029,904
+153,088
+Cash and balances with central banks
+2,778,412
+126,362
+30,896
+500,612
+2,120,542
+Credit commitments
+1,981,163
+(*)
+164,069
+203,535
+1,636,859
+Net position
+22,156,102
+431,912
+304,446
+1,866,559
+(23,300)
+3,346,117
+Includes reverse repurchase agreements.
+256
+Assets:
+Total
+Others
+(equivalent
+to RMB)
+to RMB)
+to RMB)
+RMB
+(equivalent
+(**) Includes repurchase agreements.
+(equivalent
+USD
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+31 December 2017
+Bank
+(c) Market risk (continued)
+ICBC
+HKD
+1,623,678
+Investments in subsidiaries and associates
+11,897
+279,446
+Others
+Total liabilities
+471,796
+52,601
+795
+7,095
+6,199
+532,287
+1,218,422
+122,007
+298,804
+20,878,151
+Net position
+1,591,675
+110,388
+19,238,918
+27,632
+723
+177,971
+97,087
+103,898
+2,225,769
+Certificates of deposit
+25,667
+122,962
+10,691
+94,553
+35,183
+Due to customers
+16,640,183
+502,777
+12,709
+79,918
+17,235,587
+Debt securities issued
+194,503
+31,633
+180,234
+Credit commitments
+1,326,697
+22,638,865
+Total assets
+450
+13,991
+304,979
+Others
+96,904
+122,387
+10
+216
+121,972
+Property and equipment
+154,543
+66,193
+44,820
+189
+1,909,929
+210,920
+582,646
+24,645,112
+2,096,950
+514,280
+4,868
+97,777
+2,713,875
+(*)
+Includes reverse repurchase agreements.
+530,340
+(**) Includes repurchase agreements.
+ICBC
+through profit or loss
+Financial liabilities designated at fair value
+404
+404
+Due to central banks
+Liabilities:
+258
+1,950
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+Effect on
+income
+equity
+income
+equity
+(8,909)
+(42,723)
+Effect on
+net interest
+8,909
+250
+(1,726)
+(250)
+1,727
+(186)
+(8)
+186
+45,581
+8
+Effect on
+Decreased by 100 basis points
+36,109
+(860)
+(2,841)
+860
+2,842
+(97)
+97
+Effect on
+net interest
+117
+(117)
+457
+(3,636)
+(37,319)
+3,636
+39,408
+Increased by 100 basis points
+(457)
+2,796
+185
+(8,660)
+(185)
+Total
+Assets:
+Cash and balances with central banks
+3,224,896
+388,976
+3,613,872
+Due from banks and
+bearing
+other financial institutions (*)
+300,248
+56,177
+291
+31,426
+1,834,242
+Financial assets held for trading
+14,834
+1,446,100
+(347)
+interest-
+One to
+five years
+347
+(44,804)
+8,660
+47,663
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's and the Bank's current interest rate risk profile. This effect, however, does not incorporate
+actions that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+Annual Report 2017
+249
+More than
+five years
+Notes to the Financial Statements
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+31 December 2017
+Less than
+three
+months
+Three
+months to
+one year
+Non-
+Financial Statements for the year ended 31 December 2017
+51,087
+(34,021)
+equity
+1,529,575
+1,739,968
+2,802,885
+5,287,662
+12,777,175
+Total assets
+614,131
+24,137,265
+604,628
+9,294
+Others
+246,209
+246,209
+Property and equipment
+30,077
+30,077
+209
+joint ventures
+Liabilities:
+118
+270,853
+2,285,839
+other financial institutions (**)
+Due to banks and
+89,960
+89,960
+Derivative financial liabilities
+Due to central banks
+366,752
+9,870
+45,217
+247,084
+fair value through profit or loss
+Financial liabilities designated at
+545
+427
+64,581
+(2,796)
+Investments in associates and
+12,853
+USD
+HKD
+Others
+Total
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Increased by 100 basis points
+RMB
+Decreased by 100 basis points
+net interest
+Effect on
+Effect on
+net interest
+Effect on
+income
+equity
+income
+Effect on
+5,006,699
+Currency
+Total
+1,578,061
+2,375,341
+637,160
+403,284
+Financial investments
+12,767,334
+98,714
+2016
+139,700
+Bank
+2017
+Currency
+RMB
+USD
+HKD
+Others
+(c) Market risk (continued)
+12,912
+6,008
+8,795
+674,577
+23,945,987
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+250
+671,444
+1,197,413
+N/A
+ICBC
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Less than
+three
+months
+Three
+Non-
+months to
+one year
+(c) Market risk (continued)
+One to
+299,237
+1,593,362
+744,754
+Others
+84,631
+2,218
+20,919
+99
+142,430
+406
+13,514
+278,960
+351,633
+447,734
+19,226,349
+410
+Total liabilities
+15,280,385
+4,451,161
+2,717,791
+Interest rate mismatch
+(951,368)
+526,940
+Debt securities issued
+More than
+five years
+3,103
+6,016
+189,331
+Financial assets designated at
+fair value through profit or loss
+16,157
+40,807
+4,126
+203,561
+5,556
+285,144
+Derivative financial assets
+94,452
+94,452
+Loans and advances to customers
+8,042,786
+19,063
+interest-
+102,259
+Financial assets held for trading
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,950,175
+400,613
+73,827
+3,350,788
+other financial institutions (*)
+1,281,652
+175,706
+65,244
+41
+30,457
+1,553,100
+Due from banks and
+6,613
+2,547,178
+12,552,586
+384,969
+524,266
+2,688,511
+1,694,726
+23,294
+5,315,766
+Investments in associates and
+Financial investments
+joint ventures
+32,441
+Property and equipment
+247,744
+247,744
+Others
+6,277
+141
+32,441
+613,643
+13,892,966
+163,052
+87,337
+Financial assets designated at
+fair value through profit or loss
+8,572
+156,503
+149,682
+27,917
+57,728
+10,927
+Derivative financial assets
+89,013
+89,013
+Loans and advances to customers
+9,243,369
+4,163,670
+265,147
+353,601
+3,761,438
+620,061
+14,329,017
+78,556
+Due to banks and
+other financial institutions (**)
+2,283,966
+433,980
+13,719
+6,057
+78,556
+15,165
+Certificates of deposit
+159,465
+97,204
+3,309
+296
+260,274
+Due to customers
+2,752,887
+Total assets
+Derivative financial liabilities
+80,615
+5,195,915
+3,165,525
+1,892,599
+1,503,987
+26,087,043
+Liabilities:
+Due to central banks
+425,948
+32
+404
+456
+Financial liabilities designated at
+fair value through profit or loss
+197,487
+137,501
+10,345
+20
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+10,200
+2,606,105
+19,063
+199,990
+31,502
+16,157
+fair value through profit or loss
+Financial assets designated at
+184,074
+5,406
+48,300
+1,706
+76,803
+56,958
+Financial assets held for trading
+1,430,001
+12,570
+54,667
+307
+196,166
+272,118
+62,892
+associates
+Investments in subsidiaries and
+4,748,376
+76,512
+1,508,705
+2,210,827
+12,033,200
+Derivative financial assets
+93,639
+106,364
+4,240,147
+600,860
+351,472
+Financial investments
+7,506,073
+Loans and advances to customers
+62,892
+86,977
+136,530
+1,166,598
+Due from banks and
+ICBC
+252
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+N/A
+N/A
+(c) Market risk (continued)
+1,425,587
+22,585,711
+921,341
+287,533
+2,615,441
+4,202,962
+838,040
+(927,035)
+Interest rate mismatch
+298,143
+other financial institutions (*)
+31 December 2016
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+3,290,270
+396,589
+2,893,681
+Cash and balances with central banks
+Assets:
+Total
+bearing
+Notes to the Financial Statements
+five years
+interest-
+More than
+One to
+months to
+one year
+Non-
+Three
+Less than
+three
+months
+five years
+14,558,434
+136,530
+124,089
+3,906,413
+13,654,701
+Total liabilities
+532,287
+532,287
+Others
+279,446
+Interest rate mismatch
+183,734
+10,827
+21,953
+Debt securities issued
+194,503
+17,235,587
+231,658
+5,362
+2,154,995
+62,932
+3,591,913
+(1,663,762)
+2,237,087
+336,467
+(iii) Currency risk
+(c) Market risk (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+253
+Annual Report 2017
+1,239,065
+(**) Includes repurchase agreements.
+(*)
+N/A
+N/A
+1,425,503
+20,878,151
+890,401
+189,549
+Includes reverse repurchase agreements.
+Property and equipment
+11,251,659
+453
+Financial liabilities designated at
+379
+379
+Due to central banks
+Liabilities:
+22,788,080
+1,463,057
+fair value through profit or loss
+1,615,052
+5,145,478
+11,990,939
+Total assets
+506,530
+506,530
+Others
+124,089
+2,573,554
+Due to customers
+247,029
+9,695
+6,331
+83,427
+104,292
+Certificates of deposit
+2,225,769
+9,092
+2,755
+36,092
+184,154
+other financial institutions (**)
+Due to banks and
+58,179
+58,179
+Derivative financial liabilities
+352,001
+59,185
+2,029,768
+26,301
+Total liabilities
+505,720
+Assets:
+Total
+Non-
+interest-
+bearing
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+Less than
+three
+months
+Cash and balances with central banks
+31 December 2017
+(c) Market risk (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+251
+Annual Report 2017
+(**) Includes repurchase agreements.
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Bank's assets and
+liabilities:
+Includes reverse repurchase agreements.
+3,164,066
+3,548,996
+7,110
+fair value through profit or loss
+Financial assets designated at
+60,072
+358
+3,639
+44,397
+384,930
+11,678
+1,681,356
+5,681
+36,427
+296,231
+1,343,017
+other financial institutions (*)
+Due from banks and
+Financial assets held for trading
+147,805
+(*)
+N/A
+34,242
+8,569
+Others
+Debt securities issued
+17,825,302
+287,415
+5,362
+2,166,979
+16,039
+3,705,066
+Due to customers
+218,427
+453
+6,331
+93,236
+118,407
+Certificates of deposit
+11,660,480
+N/A
+116,722
+357,937
+1,531,435
+487,380
+1,156,751
+(1,577,446)
+Interest rate mismatch
+22,156,102
+691,074
+190,934
+678,275
+1,146,532
+2,315,505
+4,130,911
+14,354,621
+Total liabilities
+1,584
+2,264
+382
+208,533
+505,720
+147,140
+9,406
+2,406,842
+8,126
+3,936
+355,697
+2,039,083
+other financial institutions (**)
+Due to banks and
+Certificates of deposit
+46,682
+Derivative financial liabilities
+407,766
+70,377
+7,643
+133,431
+196,315
+fair value through profit or loss
+46,682
+Financial liabilities designated at
+130,750
+3,092
+Others
+436,275
+273,922
+75,120
+11,682
+75,551
+Debt securities issued
+87,351
+18,560,533
+13,315
+2,525,246
+3,614,801
+12,116,735
+Due to customers
+221,489
+296
+290,436
+26,796
+404
+Due to central banks
+1,627,327
+2,560,880
+460,613
+347,099
+Financial investments
+13,125,401
+50,879
+33,985
+58,639
+4,091,956
+8,758,429
+Loans and advances to customers
+53,856
+53,856
+Derivative financial assets
+338,257
+165,498
+404
+5,029,904
+associates
+Liabilities:
+24,645,112
+1,346,007
+1,713,120
+2,913,584
+5,041,002
+13,631,399
+Investments in subsidiaries and
+Total assets
+530,340
+Others
+122,387
+122,387
+Property and equipment
+154,543
+154,543
+530,340
+344,671
+(2,211)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+1,201,565
+4,421
+1,324,817
+120,333
+1,233,480
+4,421
+1,358,234
+127,084
+1,522,779
+160,556
+1,810,419
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+Wealth management products
+Structured deposits
+Financial liabilities related to
+precious metals
+Debt securities issued
+334,469
+10,203
+60,175
+1,950
+969
+1,950
+405,816
+334,469
+10,203
+118,831
+60,175
+33,417
+10
+(133)
+48
+6
+(134)
+(39)
+26
+147
+(2)
+36
+(3)
+(9)
+(24)
+བྲཱུ8ཟླ
+740
+(4,681)
+(55)
+Commodity derivatives and others
+736
+(2,181)
+Interest rate contracts
+(234)
+Exchange rate contracts
+Derivative financial liabilities
+(2,101)
+22
+(83)
+92
+22
+12
+67
+2,919
+407,766
+Derivative financial liabilities
+Debt securities
+Financial assets designated at fair value
+48,300
+135,774
+184,074
+48,300
+135,774
+184,074
+through profit or loss
+Debt securities
+Other debt instruments
+919
+39,682
+40,601
+25,706
+25,706
+Others
+52,019
+153,792
+205,811
+919
+117,407
+153,792
+272,118
+Derivative financial assets
+Exchange rate contracts
+136
+53,033
+166
+Equity investments
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Exchange rate contracts
+460
+44,079
+193
+44,732
+Interest rate contracts
+97
+863
+154
+1,114
+Commodity derivatives and others
+836
+836
+557
+242
+45,778
+46,682
+2,507
+451,594
+347
+454,448
+264
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value (continued)
+31 December 2016
+Level 1
+Level 2
+Level 3
+Total
+347
+53,335
+27
+(76)
+530
+Interest rate contracts
+(44)
+208
+Exchange rate contracts
+As at 31
+December 2016
+Transfer out of
+Level 3
+Settlements
+Disposals
+Additions
+in other
+comprehensive
+income
+profit or loss
+2016
+recorded
+Total
+gains/(losses)
+recorded in
+1 January
+As at
+Total losses
+Financial assets:
+Derivative financial assets
+(347)
+65
+(23)
+2
+(154)
+63
+(193)
+(23)
+ཙེཎྜ ' 8
+130
+(181)
+(519)
+Commodity derivatives and others
+(37)
+Financial liabilities:
+154,512
+(29,504)
+(13,154)
+11,487
+(17)
+6,921
+178,779
+201
+(358)
+(17)
+11
+565
+153,792
+(29,504)
+(12,796)
+11,481
+2
+351
+166
+2
+2
+2
+Debt securities
+Available-for-sale financial assets
+7,172
+177,439
+through profit or loss
+Financial assets designated at fair value
+37
+(2)
+Commodity derivatives and others
+134
+4
+166
+Commodity derivatives and others
+Interest rate contracts
+Exchange rate contracts
+As at 31
+December 2017
+Transfer out of
+Level 3
+Settlements
+Disposals
+Additions
+Total losses
+recorded
+in other
+comprehensive
+income
+Total
+gains/(losses)
+recorded in
+profit or loss
+2017
+1 January
+As at
+Derivative financial assets
+Financial assets:
+Bank
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+266
+(3,892)
+(87)
+(173)
+(1,308)
+(34)
+(310)
+351
+(134)
+2
+Financial assets designated at fair value
+(351)
+Interest rate contracts
+(166)
+Exchange rate contracts
+Derivative financial liabilities
+Financial liabilities:
+160,556
+(65)
+(60,137)
+58,976
+(1,919)
+9,189
+154,512
+4,421
+gg-ཆི
+6,139
+201
+155,788
+(60,137)
+52,814
+(2)
+154
+(63)
+193
+23
+Debt securities
+Available-for-sale financial assets
+9,319
+153,792
+through profit or loss
+(1,919)
+Interest rate contracts
+1,128
+351
+451
+(1)
+Commodity derivatives and others
+(173)
+(534)
+948
+9
+125
+81
+513
+(5)
+(271)
+(728)
+(3)
+(663)
+(3,892)
+(115)
+(503)
+21
+1,485
+(7)
+(3,011)
+Total losses
+As at
+1 January
+2016
+Total
+gains/(losses)
+recorded in
+profit or loss
+recorded
+in other
+comprehensive
+income
+Additions
+(1,308)
+Disposals
+Interest rate contracts
+49
+(35)
+(1,918)
+6,336
+(10)
+(197)
+5,440
+Equity investments
+148
+5,287
+5,435
+159,550
+10,016
+(1,770)
+66,526
+(60,366)
+(1,598)
+(2,443)
+169,915
+Financial liabilities:
+Financial liabilities designated at fair value
+through profit or loss
+(2,101)
+(81)
+(437)
+1,270
+(1,349)
+Derivative financial liabilities
+Exchange rate contracts
+(310)
+(23)
+Settlements
+Transfer out of
+Level 3
+As at 31
+December 2016
+7,258
+11,659
+(13,493)
+(29,504)
+157,296
+Available-for-sale financial assets
+Debt securities
+5,520
+10
+(38)
+239
+(900)
+(3,567)
+1,264
+Equity investments
+626
+(316)
+(310)
+188,566
+7,402
+(38)
+12,445
+(14,951)
+(4,129)
+(29,745)
+159,550
+Financial liabilities:
+Financial liabilities designated at fair value
+through profit or loss
+181,376
+through profit or loss
+Financial assets designated at fair value
+191
+Financial assets:
+Derivative financial assets
+Exchange rate contracts
+Interest rate contracts
+22
+228
+72
+715
+(21)
+Commodity derivatives and others
+101
+(13)
+Financial assets held for trading
+96
+497
+1,264
+5230
+(3)
+(27)
+35
+320
+(139)
+(179)
+34
+412
+33
+(8)
+(46)
+67
+(92)
+(310)
+15
+Debt securities
+Available-for-sale financial assets
+157,299
+8,674
+| |
+270,831
+8,674
+Financial liabilities related to
+precious metals
+59,185
+59,185
+Debt securities issued
+12,512
+799
+12,512
+339,489
+13,311
+352,001
+Derivative financial liabilities
+Exchange rate contracts
+324
+54,586
+166
+55,076
+Interest rate contracts
+1,045
+351
+1,396
+Commodity derivatives and others
+1,705
+2
+1,707
+324
+Structured deposits
+270,831
+Wealth management products
+through profit or loss
+1,479
+Commodity derivatives and others
+8,076
+2
+8,078
+136
+62,237
+519
+62,892
+Available-for-sale financial assets
+Equity investments
+Debt securities
+Financial liabilities which are measured at
+831
+57,336
+75,043
+66,300
+1,465,826
+201
+1,532,327
+67,131
+1,540,869
+201
+1,608,201
+68,186
+1,904,587
+154,512
+2,127,285
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+75,874
+Derivative financial liabilities
+519
+12,836
+412
+(100)
+1
+(4)
+(81)
+Commodity derivatives and others
+67
+510
+(8)
+(39)
+Financial assets held for trading
+191
+39
+167
+497
+(86)
+2031
+329
+238
+533
+641
+Financial assets designated at fair value
+through profit or loss
+157,296
+9,574
+54,382
+(60,335)
+(1,184)
+(2,434)
+Interest rate contracts
+(22)
+(11)
+(9)
+396,825
+519
+410,180
+Annual Report 2017
+265
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(b) Movement in level 3 financial instruments measured at fair value
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and liabilities which
+are recorded at fair value and the movement during the year:
+Group
+Financial assets:
+Derivative financial assets
+Total gains/
+(losses)
+recorded
+58,179
+As at
+Total
+gains/(losses)
+recorded in
+in other
+2017
+profit or loss
+comprehensive
+income
+Additions
+Disposals
+Settlements
+Transfer out of
+Level 3
+As at 31
+December 2017
+Exchange rate contracts
+320
+28
+23
+1 January
+Notes to the Financial Statements
+Exchange rate contracts
+44
+3,862
+54,476
+1,439
+59,777
+Other debt instruments
+1,462
+30,600
+19,846
+51,908
+Others
+105,902
+136,014
+241,916
+5,324
+190,978
+157,299
+353,601
+Derivative financial asset
+Exchange rate contracts
+640
+51,335
+329
+52,304
+Interest rate contracts
+493
+15,424
+238
+16,155
+Commodity derivatives and others
+Debt securities
+6,841
+through profit or loss
+87,337
+For unquoted other liabilities designated at fair value through profit or loss, the discounted cash flow model is used based
+on current yield curve appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and
+Heston model is applied based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which
+is calibrated by active market quotes of standard European options with the same underlying.
+Annual Report 2017
+261
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+Group
+31 December 2017
+Level 1
+Level 2
+Level 3
+Total
+Financial assets which are measured at
+fair value on a recurring basis:
+Financial assets held for trading
+Equity investments
+Debt securities
+6,582
+2,213
+8,795
+3,033
+74,868
+641
+78,542
+9,615
+77,081
+641
+Financial assets designated at fair value
+13,180
+533
+20,554
+Financial liabilities related to
+precious metals
+60,183
+60,183
+Other debt securities issued
+1,950
+6,242
+8,192
+Others
+563
+8,316
+1,349
+10,228
+2,513
+422,086
+1,349
+425,948
+Derivative financial liabilities
+Exchange rate contracts
+494
+49,429
+271
+50,194
+Interest rate contracts
+91
+14,136
+728
+14,955
+Commodity derivatives and others
+10,203
+10,203
+Structured deposits
+337,142
+7,974
+79,939
+1,100
+89,013
+Available-for-sale financial assets
+Equity investments
+14,456
+401
+5,435
+20,292
+Debt securities
+219,749
+1,241,806
+5,440
+Other liabilities designated at fair value through profit or loss
+1,466,995
+234,205
+6,164
+1,248,371
+6,164
+10,875
+257,118
+1,596,369
+169,915
+1,493,451
+2,023,402
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+Wealth management products
+337,142
+Other debt instruments
+Structured products are mainly valued using dealer's quotations.
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc.
+Derivatives
+151,952
+151,998
+232,660
+205,021
+264,850
+251,349
+1,096,868
+940,237
+2,716
+3,164
+(61,063)
+(21,640)
+14,282
+11,560
+Goodwill
+8,478
+9,001
+Other intangible assets other than land use rights
+1,532
+1,477
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+(3,708)
+(4,618)
+Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+7,980
+5,700
+Net core tier 1 capital
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+Retained profits
+(d) Capital management
+The Group's objectives on capital management are:
+•
+•
+•
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution
+policy, issue or repurchase own shares, qualifying other tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBRC. The
+required information is respectively filed with the CBRC by the Group and the Bank semi-annually and quarterly.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations promulgated by the CBRC. In April 2014,
+CBRC officially approved the Bank to adopt advanced capital management approaches. Within the scope of the approval,
+the foundation internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit
+risk, the internal model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory
+requirements.
+The CBRC requires commercial banks to meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For systemically important banks, CBRC requires
+minimum core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, CBRC requires corresponding minimum ratios of 7.50%, 8.50%
+and 10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and
+the requirements of capital adequacy ratios differ by countries.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements promulgated
+by the CBRC. The requirements pursuant to these regulations may have certain differences comparing to those applicable in
+Hong Kong and other jurisdictions.
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+2,030,108
+Annual Report 2017
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(d) Capital management (continued)
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+Core tier 1 capital
+31 December 2017
+2,044,390
+31 December 2016
+1,886,536
+Paid-in capital
+356,407
+356,407
+Valid portion of capital reserve
+Surplus reserve
+General reserve
+259
+8,169
+1,874,976
+79,952
+500
+5,600
+2,406,920
+2,127,462
+15,902,801
+14,564,617
+12.77%
+12.87%
+13.27%
+13.42%
+15.14%
+14.61%
+260
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+55. FAIR VALUE OF FINANCIAL INSTRUMENTS
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+Level 1:
+Level 2:
+Level 3:
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+valuation techniques for which all inputs which have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+valuation techniques which use inputs which have a significant effect on the recorded fair value that are not
+based on observable market data.
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the
+framework of fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter
+solutions. Operating procedures specify measurement operating procedures, valuation date, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for
+daily transactions management. Financial Accounting Department plays a lead role of developing accounting policies of fair
+value measurement, valuation methodologies and system implementation. Risk Management Department is responsible for
+verifying trade details and valuation models.
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial investments
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+Refers to risk-weighted assets after capital floor and adjustments.
+(i)
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+79,794
+Additional tier 1 capital instruments and related premium
+79,375
+79,375
+Valid portion of minority interests
+577
+419
+Net tier 1 capital
+2,110,060
+1,954,770
+Tier 2 capital
+297,360
+178,292
+Valid portion of tier 2 capital instruments and related premium
+Additional tier 1 capital
+222,321
+Surplus provision for loan impairment
+71,736
+19,195
+Valid portion of minority interests
+3,303
+4,236
+Tier 2 capital deductions
+500
+5,600
+Significant minority investments in tier 2 capital instruments issued by
+financial institutions that are not subject to consolidation
+Net capital base
+Risk-weighted assets (i)
+Core tier 1 capital adequacy ratio
+154,861
+(208)
+4,575
+13,407
+Others
+104,455
+135,942
+240,397
+1,934
+180,535
+155,788
+338,257
+Derivative financial assets
+Exchange rate contracts
+2,296
+44,747
+193
+47,236
+Interest rate contracts
+490
+807
+154
+1,451
+Commodity derivatives and others
+5,169
+5,169
+2,786
+50,723
+347
+53,856
+Available-for-sale financial assets
+Equity investments
+Debt securities
+50,446
+1,502
+19,846
+Other debt instruments
+456,712
+Annual Report 2017
+263
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value (continued)
+Bank
+31 December 2017
+Level 1
+Level 2
+Level 3
+Total
+Financial assets which are measured at
+fair value on a recurring basis:
+Financial assets held for trading
+Debt securities
+60,072
+60,072
+2,031
+58,041
+2,031
+58,041
+Financial assets designated at fair value
+through profit or loss
+Debt securities
+1,934
+45,480
+47,414
+30,600
+31,915
+ICBC
+268
+Total
+Unrealised
+Realised
+Group
+2017
+Gains or losses on level 3 financial instruments included in the statement of net profit or loss for the year comprise:
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2017
+Notes to the Financial Statements
+267
+Annual Report 2017
+(519)
+(2)
+(351)
+(166)
+(6)
+(2)
+(2)
+ญญ
+(2)
+241
+(754)
+16
+(16)
+Commodity derivatives and others
+181
+(530)
+Interest rate contracts
+Realised
+Bank
+Unrealised
+Total
+Net gains/(losses) for the year
+As at 31 December 2017, the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were immaterial.
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+(d) Valuation of financial instruments with significant unobservable inputs
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+On the balance sheet date, certain financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+(ii) Transfers between level 2 and level 3
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy on
+the balance sheet date.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy on the balance sheet date.
+Transfers between level 1 and level 2
+(i)
+(c) Transfers between levels
+7,162
+2,101
+3,892
+Total
+Realised
+5,061
+8,142
+2,840
+Total
+Group
+Unrealised
+Realised
+5,302
+Net gains for the year
+2016
+9,319
+(320)
+9,639
+9,901
+(185)
+10,086
+Bank
+Unrealised
+663
+434,377
+89,960
+Other debt instruments
+Others
+919
+39,954
+40,873
+25,706
+25,706
+61,269
+157,296
+218,565
+919
+126,929
+157,296
+285,144
+Derivative financial asset
+Exchange rate contracts
+188
+57,770
+320
+58,278
+Interest rate contracts
+30
+20,167
+412
+20,609
+Commodity derivatives and others
+5,662
+9,836
+67
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+189,331
+8,754
+68,140
+1,662
+78,556
+11,267
+490,226
+3,011
+504,504
+262
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value (continued)
+31 December 2016
+Level 1
+15,565
+Level 2
+Total
+Financial assets which are measured at
+fair value on a recurring basis:
+Financial assets held for trading
+Equity investments
+Debt securities
+6,016
+3,140
+179,984
+191
+6,016
+183,315
+9,156
+179,984
+191
+Level 3
+5,880
+87,773
+799
+865
+13,377
+Others
+365
+3,089
+2,101
+5,555
+12,877
+351,774
+2,101
+366,752
+Derivative financial liabilities
+Exchange rate contracts
+326
+12,512
+59,581
+60,217
+Interest rate contracts
+1
+19,161
+1,308
+20,470
+Commodity derivatives and others
+5,239
+3,861
+173
+9,273
+5,566
+82,603
+1,791
+310
+18,443
+Other debt securities issued
+59,192
+94,452
+Available-for-sale financial assets
+Equity investments
+11,114
+338
+11,452
+Debt securities
+83,873
+1,635,493
+1,264
+Other debt instruments
+94,987
+110,942
+8,804
+1,644,635
+2,039,321
+59,192
+1,264
+1,720,630
+8,804
+1,740,886
+2,309,813
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+Wealth management products
+270,831
+270,831
+Structured deposits
+17,797
+17,797
+Financial liabilities related to
+precious metals
+159,550
+(42)
+Non-bank
+private
+Official
+518
+231,631
+231,129
+Total
+3,671,102
+3,582,567
+17,716
+3,333,620
+49,169
+3,382,789
+102
+181,960
+182,062
+Financial liabilities
+Subordinated bonds and Tier 2 Capital Notes
+269,143
+261,922
+261,922
+Total
+269,143
+261,922
+261,922
+Annual Report 2017
+269
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(e) Fair value of financial assets and liabilities not carried at fair value (continued)
+Receivables
+17,716
+3,351,438
+3,439,471
+Total
+3,264,412
+3,288,218
+3,440
+2,992,779
+56,753
+3,049,532
+422
+234,824
+235,246
+Financial liabilities
+Subordinated bonds and Tier 2 Capital Notes
+194,811
+202,034
+Financial assets
+Total
+202,034
+202,034
+202,034
+Bank
+2017
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+194,811
+291,577
+2016
+Fair value
+Available-for-sale equity investments measured at cost were all non-listed shares. The fair values are estimated on the
+basis of pricing models or discounted cash flows. The fair value was approximately the same with its book value and
+classified in fair value hierarchy level 3.
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of
+the Group and the Bank's assets and liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+Those financial instruments for which their carrying amounts are the reasonable approximations of their fair values because,
+for example, they are short-term in nature or repriced at current market rates frequently, are as follows:
+Assets
+Balances with central banks
+Due from banks and other financial institutions
+Reverse repurchase agreements
+Loans and advances to customers
+Other financial assets
+Liabilities
+Due to banks and other financial institutions
+Repurchase agreements
+Due to customers
+Other financial liabilities
+270
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+56. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+Notes
+31 December
+2017
+31 December
+2016
+ASSETS
+Cash and balances with central banks
+20
+3,548,996
+The fair values of held-to-maturity investments, subordinated bonds and tier 2 capital notes are determined with
+reference to the available market values. If quoted market prices are not available, then fair values are estimated on
+the basis of pricing models or discounted cash flows.
+The receivables are not quoted in an active market. The fair values of those receivables relating to the restructuring
+of the Bank are estimated on the basis of the stated interest rates and the consideration of the relevant special
+clauses of the instruments evaluated in the absence of any other relevant observable market data, and the fair values
+approximate to their carrying amounts. The fair values of receivables other than those relating to the restructuring of
+the Bank are estimated on the basis of pricing models or discounted cash flows.
+(ii)
+(i)
+Level 1
+Level 2
+Level 3
+Held-to-maturity investments
+Receivables
+2,876,081
+2,899,455
+2,388
+263,456
+263,698
+Total
+3,139,537
+Carrying
+amount
+3,163,153
+2,897,067
+75,189
+2,972,256
+188,509
+188,509
+Financial liabilities
+Subordinated bonds and Tier 2 Capital Notes
+181,999
+Total
+181,999
+188,693
+188,693
+188,693
+188,693
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described below
+are adopted to determine the fair values of these assets and liabilities:
+2,388
+3,290,270
+291,370
+3,440
+Asia Pacific
+Total
+Others
+sector
+sector
+institutions
+Non-bank
+private
+Banks and
+other
+financial
+31 December 2016
+2,058,262
+98,153
+1,146,058
+312,653
+501,398
+307,277
+12,511
+130,222
+112,257
+52,287
+419,617
+79,305
+283,624
+16,143
+40,545
+of which attributed to Hong Kong
+North and South America
+350,812
+180,831
+928,700
+73,934
+2016
+2017
+The amount of new impairment loss charged to the consolidated statement of profit or loss and the
+amount of impaired loans and advances written off during the year are set out below:
+(i)
+(e) Loans and advances to customers
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+ICBC
+274
+1,819,318
+83,266
+1,053,262
+1,750,985
+281,452
+285,041
+9,332
+124,562
+100,621
+50,526
+370,270
+69,083
+262,675
+16,904
+21,608
+of which attributed to Hong Kong
+North and South America
+1,534,277
+401,338
+Receivables
+85,642
+200,396
+3,819,313
+3,729,706
+52,723
+3,444,932
+232,051
+Financial liabilities
+Subordinated bonds and Tier 2 Capital Notes
+281,108
+274,307
+274,307
+Total
+281,108
+274,307
+274,307
+2016
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+2,973,042
+2,996,641
+Total
+230,674
+45,877
+276,551
+449,111
+Asia Pacific
+Total
+Others
+sector
+sector
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(e) Fair value of financial assets and liabilities not carried at fair value
+The following table summarises the carrying amounts, the fair value and the analysis by level of the fair value hierarchy of
+held-to-maturity investments, receivables, subordinated bonds and tier 2 capital notes which are not carried at fair value:
+Group
+2017
+1,015,836
+Carrying
+amount
+Level 1
+Level 2
+Level 3
+Financial assets
+Held-to-maturity investments
+3,542,184
+3,453,155
+52,723
+3,399,055
+1,377
+Receivables
+277,129
+Fair value
+Due from banks and other financial institutions
+21
+930,593
+The above liquidity ratios are calculated in accordance with the formula promulgated by the CBRC and based on the
+financial information prepared in accordance with PRC GAAP.
+The Group prepares the liquidity ratios on a semi-annual basis and the disclosed average liquidity ratio is the arithmetic mean
+of two consecutive liquidity ratios as at 30 June and 31 December.
+(c) Foreign currency concentrations
+31 December 2017
+USD
+Spot assets
+1,938,710
+HKD
+333,160
+Spot liabilities
+(1,915,913)
+(317,406)
+Others
+723,257
+(500,347)
+Total
+2,995,127
+(2,733,666)
+Forward purchases
+2,303,473
+208,462
+450,962
+2,962,897
+Forward sales
+(2,317,162)
+(160,053)
+(653,429)
+(3,130,644)
+94.37%
+82.28%
+84.23%
+86.18%
+58. COMPARATIVE AMOUNTS
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+59. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+The financial statements were approved and authorised for issue by the board of directors on 27 March 2018.
+272
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and IFRSS
+for the year ended 31 December 2017 (2016: no differences). There are no differences between the equity attributable to
+equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2017 (As at 31 December 2016: no
+differences).
+(b) Liquidity ratios
+Net option position
+RMB current assets to RMB current liabilities
+currency current liabilities
+As at
+31 December
+2017
+Average for
+the year
+ended
+31 December
+2017
+As at
+31 December
+41.74%
+38.73%
+2016
+35.72%
+Average for
+the year
+ended
+31 December
+2016
+35.81%
+Foreign currency current assets to foreign
+A final dividend of RMB0.2408 per share after the appropriation of statutory surplus reserve and general reserve, was
+approved at the board of directors' meeting held on 27 March 2018, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2017, the final dividend amounted to approximately RMB85,823 million. The dividend payable was not recognised as a
+liability as at 31 December 2017.
+(40,225)
+(31,117)
+Net (short)/long position
+(12,251)
+Net structural position
+83,141
+543
+44,409
+1,863
+(102)
+(42,825)
+21,368
+53,526
+28,359
+113,363
+Annual Report 2017
+273
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+property and equipment, net of depreciation charges;
+capital and statutory reserves of overseas branches; and
+investments in overseas subsidiaries, associates and joint ventures.
+(d) International claims
+International claims refer to the sum of cross-border claims in all currencies and local claims in foreign currencies, including
+loans and advances to customers, balances with central banks, amounts due from banks and other financial institutions and
+debt investments.
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head
+Office is located in another country.
+31 December 2017
+Banks and
+other
+financial
+institutions
+(43,266)
+Net option position
+(4,114,118)
+(1,122,168)
+Net structural position
+78,908
+998
+65,161
+1,747
+214
+20,657
+29,759
+(39,013)
+54,701
+110,414
+31 December 2016
+USD
+HKD
+Spot assets
+Spot liabilities
+Net (short)/long position
+Forward purchases
+278,761
+(303,924)
+Others
+567,622
+(431,912)
+Total
+2,802,949
+(2,572,008)
+2,797,668
+173,932
+1,007,928
+3,979,528
+Forward sales
+(2,887,047)
+(104,903)
+1,956,566
+(1,836,172)
+The profit distribution plan
+57. AFTER THE REPORTING PERIOD EVENT
+Financial Statements for the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+28
+120,301
+102,288
+34,242
+34,242
+30
+122,387
+124,089
+47,250
+27,334
+32
+483,090
+479,196
+24,645,112
+22,788,080
+Property and equipment
+Deferred income tax assets
+Other assets
+TOTAL ASSETS
+LIABILITIES
+Due to central banks
+404
+379
+Financial liabilities designated at fair value through profit or loss
+Derivative financial liabilities
+4,748,376
+5,029,904
+27
+2223 m
+927,705
+Financial assets held for trading
+22
+60,072
+184,074
+Financial assets designated at fair value through profit or loss
+23
+338,257
+272,118
+Derivative financial assets
+24
+53,856
+Due to banks and other financial institutions
+62,892
+25
+750,763
+502,296
+Loans and advances to customers
+26
+13,125,401
+12,033,200
+Financial investments
+Investments in subsidiaries
+Investments in associates
+29
+31
+Reverse repurchase agreements
+Repurchase agreements
+Certificates of deposit
+3ZIO
+436,275
+279,446
+39
+436,376
+481,236
+22,585,711
+20,878,151
+40
+356,407
+356,407
+41
+79,375
+38
+79,375
+610,299
+601,857
+1,013,320
+872,290
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+2,059,401
+24,645,112
+1,909,929
+22,788,080
+Annual Report 2017
+271
+Notes to the Financial Statements
+42
+New
+51,051
+Retained profits
+33
+407,766
+352,001
+24
+34
+46,682
+1,596,232
+58,179
+1,920,782
+35
+810,610
+304,987
+36
+69,344
+221,489
+Due to customers
+37
+18,560,533
+17,235,587
+Income tax payable
+Debt securities issued
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+Share capital
+Other equity instruments
+Reserves
+194,503
+impairment
+Official
+Write-offs
+of impaired
+loans
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Rescheduled loans and advances overdue
+for less than three months
+overdue for more than three months
+Less: Rescheduled loans and advances
+Rescheduled loans and advances
+(v) Rescheduled loans and advances to customers
+ICBC
+276
+223,955
+65,557
+160,469
+63,446
+156,345
+346,127
+Total
+7,139
+4,486
+7,555
+3,459
+6,998
+19,601
+Overseas and others
+11,386
+3,711
+31 December 2017
+31 December 2016
+% of total
+loans and
+advances
+On-balance sheet exposure
+(g) Exposures to Mainland China non-bank entities
+0.00%
+0.00%
+Over 12 months
+As a percentage of total gross placements with banks and other
+financial institutions:
+16
+16
+The Group's gross placements with banks and other financial institutions which
+have been overdue with respect to either principal or interest for a period of:
+Over 12 months
+2016
+2017
+(f) Overdue placements with banks and other financial institutions
+8,452
+0.03%
+0.03%
+3,784
+(0.01%)
+(1,398)
+(0.01%)
+(1,374)
+0.04%
+5,541
+0.04%
+5,158
+advances
+% of total
+loans and
+4,143
+Off-balance sheet exposure
+3,665
+16,716
+12,073
+36,058
+12,043
+35,970
+77,630
+Bohai Rim
+46,341
+1,205
+518
+1,205
+19,725
+Head Office
+losses
+losses
+impairment
+impairment
+allowance for
+Collectively
+assessed
+Individually
+assessed
+allowance for
+Individually
+assessed to
+be impaired
+Individually
+assessed
+allowance for
+impairment
+losses
+be impaired
+Gross amount
+Individually
+assessed to
+and advances to customers
+31,426
+Western China
+64,688
+26,498
+Northeastern China
+28,049
+7,628
+21,427
+7,398
+20,570
+46,969
+Central China
+25,394
+13,798
+29,901
+13,571
+8,363
+29,414
+Pearl River Delta
+37,747
+10,675
+loss
+10,551
+27,327
+52,983
+Yangtze River Delta
+36,473
+12,668
+28,178
+12,241
+47,815
+Impaired loans
+Individually assessed allowance for impairment losses
+2016
+11
+Deferred tax assets that rely on future profitability
+excluding those arising from temporary differences (net
+of related tax liabilities)
+10
+X14-X15
+1,477
+1,532
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+X16
+9,001
+8,478
+Goodwill (net of deferred tax liabilities)
+Prudential valuation adjustments
+Core tier 1 capital: Regulatory adjustments
+X25
+3,164
+1,886,536
+2,044,390
+2,716
+Core tier 1 capital before regulatory adjustments
+Valid portion of minority interests
+569789
+Fill in 0 for joint stock banks)
+period (only applicable to non-joint stock companies.
+Valid portion to core tier 1 capital during the transition
+X24
+(21,640)
+12
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+Shortfall of provision for loan impairment
+(3,708)
+(4,618)
+ICBC
+278
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of related tax
+liabilities)
+21
+N/A
+N/A
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+20
+--
+Deductible amount of significant minority investment
+19
+investment in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+(61,063)
+--
+18
+banks or between banks and other financial institutions
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+17
+16
+Defined-benefit pension fund net assets (net of related
+deferred tax liabilities)
+15
+Unrealised gains and losses due to changes in own credit
+risk on fair valued liabilities
+14
+Gain on sale related to asset securitization
+13
+X20
+Deductible amount of non-significant minority
+2017
+Others
+X19
+1
+X18
+Reference
+2016
+31 December
+2017
+31 December
+Core tier 1 capital:
+Item
+(i) Capital composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on CBRC Notice on issuing regulatory documents on capital regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(h) Correspondence between balance sheet in published financial statements and capital
+composition
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2017
+Unaudited Supplementary Financial Information
+277
+Annual Report 2017
+In addition to those disclosed above, exposures to other non-bank counterparties outside Mainland China to which credit is
+granted for use in Mainland China are considered insignificant to the Group.
+64,183
+81,707
+17,855,024
+20,327,955
+15,090,659
+2,764,365
+3,220,988
+17,106,967
+Paid-in capital
+356,407
+356,407
+2
+151,998
+151,952
+Capital reserve
+За
+public reserves)
+130,358
+90,889
+Accumulated other comprehensive income (and other
+X23
+940,237
+1,096,868
+Retained profits
+3b
+2c
+251,349
+264,850
+2b General reserve
+X21
+205,021
+232,660
+Surplus reserve
+2a
+22~3 3 m
+1,396,607
+1,594,378
+Retained earnings
+X22
+and advances to customers
+27,693
+31 December 2016
+Subtotal for personal loans
+4,614
+43,176
+8,559
+41,961
+Others
+3,531
+27,336
+Overdue loans
+16,336
+Personal mortgage and business loans
+65,999
+191,988
+56,481
+235,688
+Subtotal for corporate loans
+2,573
+7,873
+2,978
+12,426
+Others
+74
+1,776
+168
+2,659
+58,297
+14,463
+70,512
+8,145
+143,907
+152,646
+180,746
+449,217
+467,601
+622,803
+673,839
+12,053,041
+13,139,958
+2016
+2017
+Africa
+Science, education, culture and sanitation
+Europe
+of which attributed to Hong Kong
+Asia Pacific (excluding Mainland China)
+Mainland China
+(ii) Analysis by location of the counterparties
+74,144
+262,569
+70,944
+294,031
+Total for loans and advances to customers
+69
+46
+Discounted bills
+North and South America
+112,985
+1,528
+2,046
+31
+5,842
+gas and water
+Production and supply of electricity, heating,
+1,073
+11,037
+1,242
+13,415
+Leasing and commercial services
+30,920
+73,061
+27,547
+92,526
+Manufacturing
+1,395
+10,232
+744
+13,746
+Transportation, storage and postal services
+loans
+loss
+of impaired
+impairment
+Write-offs
+New
+6,422
+803
+Real estate
+12,455
+7,441
+Construction
+1,492
+6,375
+1,018
+4,508
+Mining
+2
+1,393
+2
+1,314
+Finance
+6,559
+430
+272
+6,038
+management
+Water, environment and public utility
+23,754
+51,328
+19,677
+63,318
+Wholesale and retail
+1,955
+10,168
+756
+5,764
+94,998
+5,904
+14,233,448
+28,500
+23,140
+27,631
+38,161
+Pearl River Delta
+32,612
+16,062
+26,697
+14,574
+23,828
+39,839
+Central China
+41,197
+20,035
+29,974
+19,029
+27,434
+49,380
+36,569
+25,495
+42,915
+24,623
+39,559
+56,270
+21,862
+23,457
+30,259
+Yangtze River Delta
+33,658
+224,736
+115,746
+176,428
+109,677
+163,150
+286,075
+Total
+8,786
+4,710
+7,001
+2,999
+5,077
+1,379
+16,662
+12,209
+9,212
+16,840
+115,371
+16,750
+23,596
+Northeastern China
+41,242
+15,396
+22,652
+14,978
+21,508
+Overseas and others
+1,849
+9,171
+1,363
+0.31%
+Between 6 and 12 months
+Over 12 months
+0.18%
+0.17%
+Between 3 and 6 months
+As a percentage of the total gross loans and advances to customers:
+195,012
+178,857
+119,462
+110,648
+Over 12 months
+51,422
+0.39%
+44,087
+24,128
+24,122
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+2016
+2017
+(iii) Overdue loans and advances to customers
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+275
+Annual Report 2017
+13,056,846
+1,163
+Between 6 and 12 months
+0.78%
+Between 3 and 6 months
+1.26%
+28,509
+0.91%
+Western China
+Bohai Rim
+Head Office
+losses
+be impaired
+losses
+be impaired
+Gross amount
+impairment
+impairment
+assessed
+allowance for
+losses
+Individually
+assessed
+allowance for
+Collectively
+1.48%
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+(iv) Overdue and impaired loans and advances to customers by geographical distribution
+31 December 2017
+The definition of overdue loans and advances to customers is set out as follows:
+Impaired loans
+and advances to customers
+Overdue loans
+and advances to customers
+Individually
+assessed to
+Individually
+assessed
+allowance for
+impairment
+Individually
+assessed to
+Tier 2 capital
+Regulation Governing
+Tier 2 capital
+Capital of Commercial
+Banks (Provisional)
+Tier 2 capital
+Including: Eligible to
+(in millions, as at the latest
+Instrument type
+Amount recognised in
+regulatory capital
+reporting date)
+Par value of instrument
+Tier 2 capital
+Accounting treatment
+(in millions)
+the parent
+company/group level
+Tier 2 capital
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Tier 2 capital
+Securities Law of the
+People's Republic of
+China/China
+Original date of issuance
+The Bank
+Rule 144A ISIN:
+US455881AD47
+Regulation S ISIN:
+USY39656AC06
+The Notes and
+the Fiscal Agency
+Agreement shall be
+governed by, and
+shall be construed
+in accordance with,
+New York law, except
+that the provisions
+of the Notes relating
+to subordination
+shall be governed
+by, and construed in
+accordance with,
+PRC law
+The Bank
+1728021
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+The Bank
+1728022
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+Regulatory treatment
+Including: Transition
+arrangement of
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+Including: Post-transition
+arrangement of
+Perpetual or dated
+Yes
+maturity date
+08 November 2027
+RMB 44,000
+Debt securities issued
+06 November 2017
+Dated
+RMB 44,000
+Debt securities issued
+20 November 2017
+Dated
+22 November 2027
+Yes
+No
+Yes
+Yes
+10 October 2018,
+in full amount
+5 August 2019,
+in full amount
+N/A
+08 November 2022,
+in full amount
+22 November 2022,
+in full amount
+ICBC
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+The Bank
+1428009
+21 September 2025
+Including: Original
+Debt securities issued
+21 September 2015
+Dated
+10 October 2023
+Issuer call (subject to prior
+supervisory approval)
+Including: Optional call date,
+contingent call dates
+and redemption amount
+288
+Group
+Parent company
+/Group
+Parent company
+/Group
+Parent company
+/Group
+Parent company
+/Group
+Tier 2 capital
+instrument
+RMB equivalent
+1,384
+Tier 2 capital
+instrument
+RMB19,995
+Tier 2 capital
+instrument
+RMB equivalent
+12,901
+Tier 2 capital
+instrument
+RMB 44,000
+Tier 2 capital
+instrument
+RMB 44,000
+USD500
+RMB20,000
+USD2,000
+Debt securities issued
+10 October 2013
+Dated
+Debt securities issued
+4 August 2014
+Dated
+5 August 2024
+shall be governed
+by, and construed in
+accordance with, the
+laws of Hong Kong
+Unaudited Supplementary Financial Information
+The Notes and any
+non-contractual
+obligations arising out
+of or in connection
+with the Notes will
+be governed by, and
+shall be construed in
+accordance with English
+89,960
+1,046,338
+1,044,481
+589,306
+579,651
+Certificates of deposit
+89,960
+260,274
+218,427
+218,427
+Due to customers
+19,226,349
+19,228,358
+17,825,302
+260,274
+78,556
+78,556
+366,740
+545
+1,516,692
+Placements from banks and other financial
+institutions
+491,948
+491,948
+500,107
+500,107
+Financial liabilities at fair value through
+profit or loss
+Derivative financial liabilities
+Repurchase agreements
+425,948
+425,946
+366,752
+17,828,084
+545
+1,516,692
+Employee benefits payable
+32,820
+456,349
+Total liabilities
+23,945,987
+23,843,464
+594,049
+22,156,102
+508,235
+558,452
+22,062,741
+Share capital
+356,407
+356,407
+356,407
+356,407
+Other equity instruments
+Equity
+Other liabilities
+327
+604
+32,864
+32,536
+Taxes payable
+82,550
+82,502
+63,557
+63,500
+Debt securities issued
+526,940
+526,940
+357,937
+357,937
+Deferred income tax liabilities
+433
+233
+33,142
+1,214,601
+1,214,601
+Due to banks and other financial institutions
+245,221
+Long term equity investments
+32,441
+40,421
+30,077
+35,777
+291,370
+Fixed assets
+216,088
+220,651
+220,609
+Construction in progress
+29,531
+29,531
+216,156
+227,216
+277,129
+Receivables
+755,557
+Loans and advances to customers
+13,892,966
+13,892,372
+Available-for-sale financial assets
+1,496,453
+1,465,021
+12,767,334
+1,742,287
+12,766,888
+1,708,102
+Held-to-maturity investments
+3,542,184
+3,536,757
+2,973,042
+2,972,444
+22,968
+22,968
+Deferred income tax assets
+48,392
+31 December 2017 31 December 2017 31 December 2016 31 December 2016
+Consolidated
+Balance sheet
+as in published
+financial
+Balance sheet
+Under
+regulatory
+statements (i)
+scope of
+consolidation (i)
+Consolidated
+Balance sheet
+as in published
+financial
+statements (i)
+Balance sheet
+Under
+regulatory
+scope of
+consolidation (i)
+Liabilities
+Due to central banks
+456
+456
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+86,051
+Unaudited Supplementary Financial Information
+Annual Report 2017
+48,392
+28,398
+28,398
+Other assets
+335,012
+318,891
+368,232
+353,794
+Total assets
+26,087,043
+25,979,568
+24,137,265
+24,039,536
+(i)
+Prepared in accordance with PRC GAAP.
+281
+86,051
+86,051
+86,051
+227,216
+22,793
+X09
+Including: Significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+500
+X10
+X08
+Long term equity investments
+7,980
+X11
+Including: Investment in core tier1 capital instruments issued by
+financial institutions that are under control but not subject to
+consolidation
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that are
+not subject to consolidation
+274
+40,421
+3,536,757
+X07
+210
+issued by financial institutions that are not subject to
+consolidation
+Other debt instrument investment measured at fair value
+Equity investment
+1,540
+13,233
+979
+X06
+Including: Undeducted portion of non-significant minority investments in capital
+instruments issued by financial institutions that are not
+subject to consolidation
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that are
+not subject to consolidation
+Held-to-maturity investments
+Including: Non-significant minority investments in tier 2 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+Receivables
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject
+to consolidation
+X12
+28,143
+X13
+Annual Report 2017
+X15
+146,389
+Goodwill
+8,478
+X16
+Long term deferred expenses
+3,656
+Repossessed assets
+8,637
+Others
+6,398
+Debt securities issued
+526,940
+Including: Valid portion of tier 2 capital instruments and their premium
+222,321
+18,190
+X05
+X14
+125,611
+283
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+31 December 2017
+Balance sheet
+under regulatory
+scope of
+consolidation
+Item
+Other assets
+Interest receivable
+Intangible assets
+Including: land use rights
+Other receivables
+Reference
+318,891
+19,722
+755,627
+5,858
+1,450,248
+251,349
+Retained profits
+1,097,544
+1,096,868
+940,663
+940,237
+251,349
+Equity attributable to equity holders of the
+2,127,491
+2,127,725
+1,969,751
+1,969,423
+Minority interests
+13,565
+parent company
+264,850
+264,892
+General reserve
+Capital reserve
+151,952
+151,952
+151,998
+151,998
+Other comprehensive income
+(62,058)
+(61,063)
+(21,738)
+(21,640)
+Surplus reserve
+232,703
+232,660
+205,021
+205,021
+Total equity
+2,141,056
+8,379
+2,136,104
+11,412
+1,981,163
+Total loans and advances to customers
+13,892,372
+14,232,854
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+17,943
+X01
+9,937
+X02
+Less: Provision for loan impairment under the Internal Ratings-Based Approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the Internal Ratings-Based Approach
+322,539
+X03
+61,799
+X04
+Available-for-sale financial assets
+1,465,021
+Bond investment measured at fair value
+X29
+Including: Non-significant minority investments in tier 2 capital instruments
+5,155
+440,912
+7,372
+1,976,795
+(i) Prepared in accordance with PRC GAAP.
+282
+ICBC
+(iii) Description of related items
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Item
+Financial assets at fair value through profit or loss
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions that
+are not subject to consolidation
+Loans and advances to customers
+31 December 2017
+Balance sheet
+under regulatory
+scope of
+consolidation
+Reference
+94,452
+94,452
+89,013
+981,553
+Tier 2 capital:
+46
+Tier 2 capital instruments and related premium
+222,321
+154,861
+X17
+79,794
+1,954,770
+47
+101,425
+121,710
+48
+Valid portion of minority interests
+3,303
+4,236
+Invalid instruments to tier 2 capital after the transition
+period
+2,110,060
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+45
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+31 December
+2017
+31 December
+2016
+Reference
+Item
+42
+Undeducted shortfall that should be deducted from tier 2
+capital
+43
+Total regulatory adjustments to additional tier 1
+capital
+44
+Additional tier 1 capital
+79,952
+X27
+49
+Including: Invalid portion to tier 2 capital after the
+transition period
+1,051
+Others that should be deducted from tier 2 capital
+57 Total regulatory adjustments to tier 2 capital
+500
+5,600
+X10
+500
+58
+Tier 2 capital
+296,860
+59
+Total capital (tier 1 capital+ tier 2 capital)
+2,406,920
+60
+Total risk-weighted assets
+15,902,801
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+279
+56c
+Investment in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+50
+51
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+71,736
+297,360
+19,195
+178,292
+X02+X04
+Tier 2 capital: Regulatory adjustments
+52
+53
+54
+55
+56a
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+56b
+5,600
+172,692
+2,127,462
+14,564,617
+Annual Report 2017
+41c
+subject to consolidation
+26c
+27
+Others that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+additional tier 1 capital and tier 2 capital
+28
+financial institutions that are under control but not
+Total regulatory adjustments to core tier 1 capital
+29
+Core tier 1 capital
+2,030,108
+11,560
+1,874,976
+Additional tier 1 capital:
+30
+14,282
+Shortfall in core tier 1 capital instruments issued by
+26b
+X11
+law, except that the
+provision of the Notes
+relating to Subordination
+23
+24
+25
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier 1
+capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences (net of related tax liabilities)
+Including: Deductible amount of significant minority
+investments in core tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+31 December
+2017
+31 December
+2016
+Reference
+N/A
+N/A
+26a
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+7,980
+5,700
+Additional tier 1 capital instruments and related premium
+79,375
+79,375
+31
+Additional tier 1 capital: Regulatory adjustments
+37
+Direct or indirect investments in own additional tier 1
+instruments
+38
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+39
+Deductible amount of non-significant minority
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+40
+Significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+41a
+Investment in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+--
+41b
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+36 Additional tier 1 capital before regulatory
+adjustments
+Others that should be deducted from additional tier 1 capital
+79,794
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+Including: Portion classified as equity
+79,375
+79,375
+X28
+32
+Including: Portion classified as liabilities
+33
+Invalid instruments to additional tier 1 capital after the
+transition period
+34
+Valid portion of minority interests
+577
+419
+X26
+35
+79,952
+X17
+Requirements for capital adequacy ratio and reserve capital
+Core tier 1 capital adequacy ratio
+101,425
+121,710
+46,822
+26,547
+financial
+statements (i)
+scope of
+(ii) Consolidated financial statements
+consolidation (i)
+Consolidated
+Balance sheet
+as in published
+Balance sheet
+Under
+regulatory
+31 December 2017 31 December 2017 31 December 2016 31 December 2016
+Excluded from tier 2 capital for the current period due to
+cap
+85
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+X02
+78
+Surplus provision for loan impairment under the internal
+ratings-based approach
+322,539
+267,008
+X03
+61,799
+13,498
+X04
+80
+81
+82
+Valid cap of surplus provision for loan impairment in tier
+2 capital under the internal ratings-based approach
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for the current
+period due to phase-out arrangements
+Excluded from core tier 1 capital due to cap
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+83
+84
+Consolidated
+Balance sheet
+as in published
+financial
+statements (i)
+Balance sheet
+Under
+regulatory
+scope of
+other financial institutions
+477,537
+477,537
+527,415
+527,415
+Financial assets at fair value through profit
+or loss
+440,938
+440,912
+474,475
+474,450
+Derivative financial assets
+89,013
+Reverse repurchase agreements
+986,631
+Placements with banks and
+5,697
+220,091
+238,714
+consolidation (i)
+Assets
+Cash and balances with central banks
+Due from banks and other financial
+3,613,872
+3,613,872
+3,350,788
+3,350,788
+institutions
+370,074
+363,278
+270,058
+262,582
+Precious metals
+238,714
+220,091
+61
+9,937
+22,504
+Including: Countercyclical buffer requirement
+67
+Including: G-SIB buffer requirement
+1%
+1%
+68
+66
+Percentage of core tier 1 capital meeting buffers to risk-
+7.87%
+weighted assets
+Domestic minima for regulatory capital
+69
+70
+Tier 1 capital adequacy ratio
+7.77%
+2.5%
+2.5%
+Including: Capital conservation buffer requirement
+12.77%
+12.87%
+62
+Tier 1 capital adequacy ratio
+13.27%
+13.42%
+63
+Capital adequacy ratio
+15.14%
+14.61%
+64
+Institution specific buffer requirement
+3.5%
+3.5%
+65
+71
+Core tier 1 capital adequacy ratio
+Capital adequacy ratio
+5%
+35,059
+31 December
+2016
+Reference
+37,049 X05+X06+X08+
+X09+X12+X29
+28,353
+26,859
+X07+X13
+N/A
+N/A
+48,158
+28,072
+76
+77
+Provision for loan impairment under the weighted approach
+Valid cap of surplus provision for loan impairment in tier
+2 capital under the weighted approach
+17,943
+2017
+X01
+31 December
+Mortgage servicing rights (net of deferred tax liabilities)
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+5%
+6%
+6%
+8%
+8%
+280
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Item
+Amounts below the thresholds for deduction
+72
+73
+Undeducted amount of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted amount of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+74
+75
+Valid caps of surplus provision for loan impairment in
+tier 2 capital
+Share capital
+79
+X18
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Yes
+issuance plan
+Mandatory
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+20 trading days
+preceding 25 July
+average trading
+price of the H
+shares of the
+Bank for the
+is equal to the
+The initial
+conversion price
+occurs
+convertible when
+a Tier 2 Capital
+Trigger Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+is equal to the
+average trading
+price of the H
+shares of the
+The initial
+conversion price
+occurs
+a Tier 2 Capital
+Trigger Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+Capital Trigger
+Event
+issuance plan
+Mandatory
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+occurs
+The initial
+conversion price
+issuance plan
+Mandatory
+a Tier 2 Capital
+Trigger Event
+occurs
+The initial
+conversion price
+The Bank
+N/A
+N/A
+Including: If convertible,
+type convertible into
+specify instrument
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+N/A
+N/A
+Including: If convertible,
+conversion
+mandatory or optional
+N/A
+N/A
+Including: If convertible,
+issuance plan
+Mandatory
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+Bank for the
+average trading
+price of the A
+Shares of the
+is equal to the
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+The Bank
+convertible when
+N/A
+No
+No
+Non-cumulative
+Non-cumulative
+No
+No
+Including: If convertible,
+fully or partially
+conversion trigger(s)
+Including: If convertible,
+Convertible or non-convertible
+No
+or cumulative
+incentive mechanism
+Including: Redemption
+coupons/dividends
+mandatory cancellation of
+partially discretionary or
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+discretionary
+Including: Non-cumulative
+No
+Non-cumulative
+Non-cumulative
+N/A
+Including: If convertible,
+conversion rate
+N/A
+MA
+N/A
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Event
+Capital Trigger
+Event or Tier 2
+Event or Tier 2
+Additional Tier 1
+Capital Trigger
+Capital Trigger
+Additional Tier 1
+N/A
+N/A
+Yes
+Yes
+Yes
+No
+No
+z
+Non-cumulative
+Non-cumulative
+Fully or partially
+The Bank
+The Bank
+specify issuer of
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+senior to the
+Domestic Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+No
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+senior to the
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+No
+No
+Parity Obligations
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+and instruments
+issued or guaranteed
+by the Bank ranking
+No
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+Subordinated to all
+liabilities of the Bank
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+debts, and preference
+shareholders
+N/A
+N/A
+N/A
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+debts, and preference
+shareholders
+hierarchy in liquidation
+(specify instrument type
+immediately senior to
+instrument)
+Position in subordination
+mechanism
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+Non-compliant transitioned
+features
+No
+No
+356,407
+ISIN: XS0976879279
+ICBC (Asia)
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+instrument
+Governing law(s) of the
+Issuer
+Unique identifier
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2017
+Unaudited Supplementary Financial Information
+287
+Annual Report 2017
+N/A
+N/A
+N/A
+N/A
+non-compliant features
+N/A
+N/A
+Including: If yes, specify
+N/A
+MA
+N/A
+N/A
+BBGID:BBG005CMF4N6
+No
+No
+No
+No
+No
+Write-down feature
+shares (Domestic)
+shares (Offshore)
+Preference
+Preference
+Preference
+shares (Offshore)
+shares (Offshore)
+(H share)
+Preference
+Ordinary shares
+Ordinary shares
+(A share)
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+286
+instrument it converts into
+Item
+22
+discretionary
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Including: If temporary write-down,
+description of write-up
+permanent or temporary
+Including: If write-down,
+full or partial
+Including: If write-down,
+write-down trigger(s)
+N/A
+N/A
+N/A
+N/A
+N/A
+Including: If write-down,
+Fully
+ICBC
+Including: Fully discretionary,
+Core tier 1 capital
+Including: Transition arrangement
+Regulatory treatment
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Guidance on
+Measures on
+Preference Shares,
+People's Republic
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Company Law of the
+The Bank
+360011
+Preference
+shares (Domestic)
+Core tier 1 capital
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+Preference
+shares (Offshore)
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+The Bank
+4604
+Preference
+shares (Offshore)
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+China
+The Bank
+4603
+Preference
+shares (Offshore)
+(H share)
+The Bank
+1398
+Securities and Futures
+Ordinance of Hong
+Kong / Hong Kong,
+Ordinary shares
+The Bank
+84602
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Additional tier
+1 capital
+Additional tier
+1 capital
+Group
+Group
+Group
+Parent company/
+Parent company/
+Parent company/
+capital instrument
+Parent company/
+Parent company/
+Including: Eligible to the parent
+company/group level
+Banks (Provisional)
+Governing Capital of Commercial
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+arrangement of Regulation
+Core tier 1 capital
+Core tier 1 capital
+Including: Post-transition
+Additional tier
+1 capital
+Additional tier
+1 capital
+Other equity instruments
+Ordinary shares
+(A share)
+The Bank
+601398
+Securities Law of the
+People's Republic of
+China/China
+Instrument type
+Governing law(s) of the instrument
+86,051
+X22
+Retained profits
+1,096,868
+X23
+Minority interests
+8,379
+Including: Valid portion to core tier 1 capital
+2,716
+X25
+Fully
+264,850
+Including: Valid portion to additional tier 1 capital
+X26
+Including: Valid portion to tier 2 capital
+3,303
+X27
+284
+ICBC
+(iv) Main features of eligible capital instruments
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+577
+General reserve
+X21
+232,660
+Including Preference shares
+79,375
+X28
+Capital reserve
+151,952
+X19
+Other comprehensive income
+(61,063)
+X24
+Reserve for changes in fair value of available-for-sale financial assets
+(30,757)
+Reserve for cash flow hedging
+(3,761)
+Including: Cash flow hedge reserves that relate to the hedging of
+(3,708)
+X20
+items that are not fair valued on the balance sheet
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+(1,284)
+(25,902)
+Others
+641
+Surplus reserve
+Unique identifier
+Core tier 1
+Parent company/
+Core tier 1
+capital instrument
+capital instrument
+Ordinary shares
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2017
+Unaudited Supplementary Financial Information
+285
+Annual Report 2017
+all the Domestic
+Preference Shares
+or conversion of
+2020, in full or
+partial amount
+Commences on the
+First Redemption
+Date (18 November
+2020) and ends
+on the completion
+date of redemption
+is 18 November
+The First
+Redemption Date
+Date
+is 10 December
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+The First
+Redemption Date
+Date
+is 10 December
+2021, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+The First
+Redemption Date
+is 10 December
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+The First
+Redemption Date
+if applicable
+N/A
+N/A
+Including: Subsequent call dates,
+redemption amount
+contingent call dates and
+(A share)
+Ordinary shares
+(H share)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+dividend stopper
+Yes
+rate) before 18
+November 2020
+4.5% (dividend
+6% (dividend
+rate) before 10
+December 2019
+Yes
+rate) before 10
+December 2021
+Yes
+December 2019
+Yes
+N/A
+N/A
+Including: Existence of a
+rate) before 10
+any related index
+6% (dividend
+Yes
+6% (dividend
+N/A
+Including: Coupon rate and
+dividend/coupon
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Floating
+Floating
+Including: Fixed or floating
+Coupons/dividends
+Preference
+shares (Domestic)
+Preference
+shares (Offshore)
+N/A
+18 November 2015
+Perpetual
+No maturity date
+Yes
+10 December 2014
+Perpetual
+No maturity date
+Additional tier 1
+capital instrument
+Group
+Group
+Additional tier 1
+capital instrument
+Additional tier 1
+capital instrument
+RMB equivalent
+17,928
+RMB169,202
+RMB339,126
+N/A
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+RMB86,795
+N/A
+RMB equivalent
+RMB269,612
+Share capital,
+Capital reserve
+supervisory approval)
+Issuer call (subject to prior
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+latest reporting date)
+capital (in millions, as at the
+Amount recognized in regulatory
+Including: Optional call date,
+capital instrument
+Issuer
+10 December 2014
+Perpetual
+USD2,940
+Other equity
+capital instrument
+EUR 600
+Other equity
+RMB12,000
+Other equity
+Group
+Additional tier 1
+RMB45,000
+Other equity
+19 October 2006
+Perpetual
+4,542
+RMB44,947
+No maturity date
+No
+RMB11,958
+No
+No maturity date
+Yes
+10 December 2014
+Perpetual
+No maturity date
+Yes
+No maturity date
+989,259
+847,611
+22.7
+Due from banks and other financial
+institutions
+3.2
+797,473
+3.3
+Reverse repurchase agreements
+Total assets
+986,631
+5,481,174
+3.8
+3.1
+13.9
+3,350,788
+13.9
+3,613,872
+Cash and balances with central banks
+755,627
+Others
+10,812
+5,756,704
+20
+Note: Please see "Note 53. to the Financial Statements: Segment Information" for details.
+8.5
+30,821
+11.1
+40,273
+Overseas and others
+3.6
+13,144
+3.0
+3.8
+Northeastern China
+13.0
+47,199
+13.1
+47,694
+Western China
+10.9
+39,510
+9.0
+32,659
+ICBC
+22.1
+Discussion and Analysis
+In 2017, the Bank timely adjusted its business strategy based on the external macroeconomic environment, improved the
+asset and liability structure, maintained coordinated development of deposit and loan business, and enhanced the efficiency
+of resource allocation for assets and liabilities. Taking development needs of the real economy into account, the Bank
+reasonably controlled the aggregate amount, direction and pace of lending. Closely monitoring the trends of the domestic
+and international financial markets, the Bank appropriately expanded its investment scale and optimized the structure of
+investment portfolios. Furthermore, the Bank actively adopted measures to promote steady growth in due to customers, and
+refined the liability maturity structure, thereby ensuring a stable and sustainable growth of funding sources.
+52.9
+12,767,334
+53.2
+13,892,966
+Net loans and advances to customers
+Investment
+Percentage
+(%)
+289,512
+Amount
+13,056,846
+(%)
+340,482
+14,233,448
+Amount
+Percentage
+At 31 December 2017
+At 31 December 2016
+In RMB millions, except for percentages
+Total loans and advances to customers
+Less: Allowance for impairment losses on
+loans
+Item
+ASSETS DEPLOYMENT
+As at the end of 2017, total assets of the Bank amounted to RMB26,087,043 million, RMB1,949,778 million or 8.1% higher
+than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as "total
+loans") increased by RMB1,176,602 million or 9.0%, investment increased by RMB275,530 million or 5.0%, and cash and
+balances with central banks increased by RMB263,084 million or 7.9%.
+Assets Deployment
+Balance Sheet Analysis
+984,869
+Percentage
+26,087,043
+3,240,838
+77.2
+Personal consumption loans
+255,783
+5.2
+247,020
+5.9
+Personal business loans
+216,210
+4.4
+256,272
+6.1
+Credit card overdrafts
+534,776
+10.8
+79.6
+452,039
+3,938,689
+(%)
+100.0
+8,140,684
+100.0
+Corporate loans rose by RMB796,180 million or 9.8% from the end of last year. Specifically, short-term corporate loans
+increased by RMB72,669 million or 2.7%; medium to long-term corporate loans increased by RMB723,511 million or 13.4%.
+With the continuous promotion of supply-side structural reform, the real economy was more dynamic and resilient, and
+showed more signs of recovery. Against such a backdrop, the demand for short-term and medium to long-term financing of
+enterprises both increased.
+Discounted bills dropped by RMB368,867 million compared with the end of last year, mainly to meet the needs of asset-
+liability portfolios management and balance credit extension.
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+In RMB millions, except for percentages
+At 31 December 2016
+At 31 December 2017
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+Residential mortgages
+8,936,864
+10.8
+4,945,458
+Percentage
+Percentage
+Amount
+(%)
+5,431,805
+94.4
+Amount
+5,196,535
+(%)
+94.8
+5,373,733
+93.4
+5,162,025
+94.2
+58,072
+Central China
+In RMB millions, except for percentages
+At 31 December 2016
+Total
+At 31 December 2017
+Equity instruments and others
+100.0
+4,196,169
+100.0
+Personal loans increased by RMB749,289 million or 17.9% than that at the end of last year. Specifically, residential
+mortgages grew by RMB697,851 million or 21.5%, mainly because the Bank actively supported the residents' borrowing
+need for owner-occupied houses and improved housing in line with the national policy on property regulation. Personal
+consumption loans grew by RMB8,763 million or 3.5%, principally because the Bank grasped the opportunities brought
+by the development of internet-based finance. ICBC Easy Loan realized high-quality and rapid development. Credit card
+overdrafts increased by RMB82,737 million or 18.3%, primarily attributable to the continuous development of credit card
+installment business and a stable growth in the consumption volume of credit cards.
+Please see "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and their quality.
+22
+ICBC
+Discussion and Analysis
+Investment
+In 2017, in line with the development trend of financial markets, the Bank adjusted its investment strategy in a timely
+manner, actively supported the development of real economy and improved the efficiency and effectiveness of capital
+utilization. As at the end of 2017, investment amounted to RMB5,756,704 million, RMB275,530 million or 5.0% higher
+compared with the end of the previous year.
+INVESTMENT
+Item
+Debt instruments
+Bonds
+Other debt instruments
+Total
+66.5
+5,410,811
+68.6
+2017
+Discounted bills
+Personal loans
+Annual Report 2017
+21
+Discussion and Analysis
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Item
+Corporate loans
+Discounted bills
+Personal loans
+Total
+In RMB millions, except for percentages
+At 31 December 2016
+At 31 December 2017
+2016
+Corporate loans
+Percentage
+2015
+81,407
+100.0
+24,137,265
+100.0
+Loan
+In 2017, centered on serving the real economy and the supply-side
+structural reform, the Bank effectively integrated its own operations into
+the national strategy, and laid emphasis on improving the effectiveness
+and relevance of financial support economic development. The Bank also
+increased support for major national projects and major programs, and
+shouldered the responsibility as a big bank in areas such as supporting
+small and micro enterprises, "agriculture, rural areas, and rural residents",
+'mass entrepreneurship and innovation" and poverty relief. Furthermore,
+the Bank actively supported the residents' rational demands for housing
+financing. As at the end of 2017, total loans amounted to RMB14,233,448
+million, RMB1,176,602 million or 9.0% higher compared with the end of
+the previous year, of which RMB denominated loans of domestic branches
+were RMB12,431,326 million, RMB988,385 million or 8.6% higher than
+that at the end of 2016.
+"
+Loan
+Unit: RMB100 millions
+49,455
+41,962
+35,419
+3,511
+7,200
+5,221
+89,369
+78,696
+Percentage
+Amount
+(%)
+Medium to long-term corporate loans
+Total
+In RMB millions, except for percentages
+At 31 December 2017
+At 31 December 2016
+Percentage
+Amount
+(%)
+Amount
+(%)
+2,802,542
+31.4
+2,729,873
+33.5
+6,134,322
+Short-term corporate loans
+Item
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+100.0
+Amount
+(%)
+8,936,864
+62.8
+8,140,684
+62.4
+351,126
+4.1
+2.5
+5.5
+4,945,458
+34.7
+14,233,448
+100.0
+4,196,169
+13,056,846
+32.1
+719,993
+20.2
+Amount
+18.3
+19
+Annual Report 2017
+Income tax expense was RMB77,190 million, RMB6,983 million or 8.3% lower than that of the previous year. The effective
+tax rate stood at 21.17%. Please see "Note 16. to the Financial Statements: Income Tax Expense" for the reconciliation of
+income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective income tax rate.
+Income Tax Expense
+In 2017, the Bank set aside an allowance for impairment losses of RMB127,769 million, an increase of RMB39,875 million
+or 45.4% as compared to that of last year. Specifically, the allowance for impairment losses on loans was RMB124,096
+million, indicating an increase of RMB37,958 million or 44.1%. Please refer to "Note 26. to the Financial Statements: Loans
+and Advances to Customers" and "Note 15. to the Financial Statements: Impairment Losses on Assets Other than Loans and
+Advances to Customers" for details.
+Impairment Losses
+The Bank continued to strengthen cost control and management and improve the structure of expenses. Operating expenses
+amounted to RMB186,194 million, a decrease of RMB6,918 million or 3.6% over the previous year.
+(3.6)
+(6,918)
+193,112
+186,194
+Discussion and Analysis
+6.7
+31,966
+34,099
+Total
+Others
+2.7
+55
+2,059
+2,114
+Amortisation
+(56.9)
+(9,854)
+2,133
+Segment Information
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+SUMMARY OPERATING SEGMENT INFORMATION
+37.1
+238,133
+36.7
+247,919
+Personal banking
+49.0
+314,398
+49.2
+332,264
+Corporate banking
+100.0
+641,681
+100.0
+675,654
+Operating income
+(%)
+1.0
+(%)
+Amount
+Item
+Percentage
+Percentage
+2016
+2017
+In RMB millions, except for percentages
+17,319
+Treasury operations
+7,465
+(3.0)
+(1,904)
+4,545
+2,641
+Net gain on financial investments
+through profit or loss
+liabilities designated at fair value
+N/A
+(372)
+(104)
+(476)
+Net loss on financial assets and
+(41.9)
+(10.9)
+6,457
+5,753
+Net trading income
+(%)
+(decrease)
+2016
+2017
+Item
+Increase/
+Growth rate
+In RMB millions, except for percentages
+(704)
+Other operating income, net
+6,033
+13,964
+(852)
+28,414
+27,562
+Premises and equipment expenses
+1.4
+1,600
+113,354
+114,954
+Staff costs
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2016
+2017
+Item
+OPERATING EXPENSES
+Operating Expenses
+Other non-interest related gain was RMB13,951 million, RMB10,911 million or 43.9% lower than that of the previous
+year. Specifically, the decrease in net gain on financial investments was mainly due to the decrease in spread income from
+available-for-sale bonds, and the decrease in other net operating income was mainly attributable to the decrease in net gain
+on exchange and exchange rate products and other factors.
+(43.9)
+(10,911)
+24,862
+13,951
+Total
+(56.8)
+(7,931)
+Taxes and surcharges
+73,386
+90,599
+84,488
+4.2
+28,632
+Northeastern China
+15.1
+97,032
+14.9
+100,795
+Western China
+12.4
+79,703
+12.0
+28,451
+81,341
+19.2
+123,491
+18.8
+126,006
+Bohai Rim
+12.5
+79,974
+13.1
+88,516
+Pearl River Delta
+17.7
+Central China
+4.4
+Overseas and others
+59,445
+66,818
+Bohai Rim
+12.5
+45,486
+13.0
+47,561
+Pearl River Delta
+18.5
+67,388
+19.6
+71,633
+Yangtze River Delta
+12.8
+46,345
+12.9
+47,191
+Head Office
+100.0
+363,279
+100.0
+364,641
+Profit before taxation
+7.7
+49,335
+8.8
+113,430
+13.4
+17.3
+Yangtze River Delta
+19.9
+72,713
+Treasury operations
+36.1
+131,327
+37.9
+137,843
+Personal banking
+45.4
+164,833
+41.9
+66,856
+152,873
+100.0
+363,279
+100.0
+364,641
+Profit before taxation
+0.7
+4,662
+0.7
+4,872
+Others
+13.2
+Corporate banking
+18.4
+Others
+1,212
+11.0
+70,265
+10.9
+73,787
+Head Office
+100.0
+641,681
+100.0
+675,654
+Operating income
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+2016
+2017
+In RMB millions, except for percentages
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+Note: Please see "Note 53. to the Financial Statements: Segment Information" for details.
+Please refer to the section headed "Discussion and Analysis - Business Overview" for the details on the development of
+each of these operating segments.
+0.1
+263
+0.3
+117,132
+34,510
+Liabilities
+324,899
+Manufacturing
+18.6%
+41,768
+Leasing and commercial services
+12.1%
+39,294
+Production and supply of
+electricity, heat, gas and water
+12.0%
+Water, environment and public
+8.7%
+44,879
+utility management
+7.6%
+Real estate
+6.7%
+60,698
+52,717
+45,077
+Construction
+3.0%
+Mining
+2.8%
+Science, education, culture
+Wholesale and retail
+1.7%
+postal services
+Transportation, storage and
+As at the end of 2017, shareholders' equity amounted to RMB2,141,056 million in aggregate, RMB159,893 million or 8.1%
+higher than that at the end of the previous year. Equity attributable to equity holders of the parent company recorded an
+increase of RMB157,740 million or 8.0% to RMB2,127,491 million. Please refer to the "Financial Statements: Consolidated
+Statement of Changes in Equity" for details.
+For details on off-balance sheet items, please refer to "Note 48. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 49. to the Financial Statements: Designated Funds and Loans".
+Analysis on Statement of Cash Flows
+Net cash inflows from operating activities amounted to RMB770,864 million, representing an increase of RMB531,643
+million as compared to the previous year, mainly due to the increase of cash inflows from the increased repurchase
+agreements and cash inflows resulted from a decline of financial assets held for trading which resulted in cash outflows in
+the last year. Specifically, net cash outflows of operating assets dropped by RMB293,422 million and net cash inflows of
+operating liabilities grew by RMB142,744 million.
+Net cash outflows from investing activities amounted to RMB489,258 million. Specifically, cash inflows were RMB2,158,683
+million, representing an increase of RMB94,268 million, mainly due to the increased proceeds from the recovery of
+investment assets; and cash outflows were RMB2,647,941 million, representing a growth of RMB114,594 million, mainly
+due to the increase in cash payment generated from bond investment.
+Net cash inflows from financing activities amounted to RMB81,835 million, of which, cash inflows were RMB944,746
+million, mainly due to the issuance of RMB88 billion of tier-2 capital bonds by the Bank and the issuance of debt securities
+by some domestic and overseas institutions during the reporting period; and cash outflows were RMB862,911 million, mainly
+due to the repayment of debt securities.
+Annual Report 2017
+27
+Discussion and Analysis
+BUSINESS OVERVIEW
+Corporate Banking
+22.8%
+The Bank actively supported the development of real economy, served the supply-side structural reform, and further
+promoted the full-spectrum corporate banking development strategy of "whole-market deployment, universal financing
+services, all-product coordination, omni-channel management, entire-team building, and strong linked marketing" on the
+basis of satisfying corporate customers' needs, advancing both the quantity and quality of corporate banking business
+development.
+4
+The optimization of corporate credit layout highlighted the financial services for the national strategies and the key
+fields and weak links of the real economy. The Bank actively strengthened the management of loans to industries
+with excess capacity, carried forward the cut of excess capacity steadily and orderly, and supported the sectors and
+enterprises with excess capacity in restructuring existing capacity, optimizing incremental capacity, and changing
+growth drivers.
+The corporate customer management and expansion was intensified in the four aspects, i.e. the "customer
+management mechanism, customer acquisition channel, customer loyalty enhancement, and customer experience
+improvement". The Bank kept advancing the development of the corporate banking big data platform, and increased
+the supporting role of data for refining and intelligentizing customer expansion.
+The Bank optimized the building of the global marketing network, and constructed a basic working layer across
+the corporate line of all the domestic and overseas institutions and a flexible cross-border team for providing
+globally coordinated marketing services, composed of key business talents and experts of certain important overseas
+institutions to provide rapid responses to global financial services demands of customers.
+The Bank was awarded the title of the "Best Corporate Bank in China" by Global Finance for eight years in a row, and
+won the title of the "Best Bank for Renewable Energy" by Global Finance for the first time.
+At the end of 2017, the number of the Bank's corporate customers increased by 487 thousand over the end of the
+previous year to 6,271 thousand. The balance of corporate loans reached RMB8,936,864 million, representing an
+increase of RMB796,180 million or 9.8% over the end of the previous year. The balance of corporate deposits hit
+RMB10,557,689 million, representing an increase of RMB1,109,169 million or 11.7%.
+Domestic Corporate Loans by Industry
+28
+ICBC
+Corporate Deposits
+Unit: RMB100 millions
+4
+and sanitation
+2.5%
+Others
+Due to Customers
+100.0
+22,156,102
+100.0
+23,945,987
+6.1
+1,366,758
+6.0
+1,439,811
+Total liabilities
+Others
+Due to customers is the Bank's main source of funds. As at the end of
+2017, due to customers was RMB19,226,349 million, RMB1,401,047
+million or 7.9% higher than that at the end of the previous year. In terms
+of customer structure, the balance of corporate deposits increased by
+RMB1,109,169 million or 11.7%; and the balance of personal deposits
+increased by RMB239,825 million or 2.9%. In terms of maturity structure,
+the balance of time deposits increased by RMB450,858 million or 5.2%,
+while the balance of demand deposits increased by RMB898,136 million or
+10.0%.
+1.6
+2.2
+526,940
+Debt securities issued
+2.7
+589,306
+4.4
+1,046,338
+Repurchase agreements
+9.1
+2,016,799
+7.1
+357,937
+Due to Customers
+Unit: RMB100 millions
+2015
+2017
+Time deposits
+Demand deposits
+1.5%
+Lodging and catering industry
+Percentage
+(%)
+Amount
+At 31 December 2017
+Item
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+Discussion and Analysis
+25
+Annual Report 2017
+Other deposits
+Corporate deposits Personal deposits
+2017
+2016
+84,370
+94,485
+105,577
+76,011
+81,403
+83,801
+2,438
+2,365
+2,885
+Shareholders' Equity
+Debt securities issued amounted to RMB526,940 million, RMB169,003 million or 47.2% higher than that of last year,
+mainly due to the issuance of RMB88 billion of tier-2 capital bonds by the Bank and the issuance of debt securities by some
+domestic and overseas institutions during the reporting period. For details on the Bank's debt securities issued, please refer
+to "Note 38. to the Financial Statements: Debt Securities Issued".
+Debt Securities Issued
+Discussion and Analysis
+19.9
+3,720,374
+20.9
+Subtotal
+8,380,106
+43.6
+8,140,281
+45.7
+Other deposits(1)
+In RMB millions, except for percentages
+288,554
+3,820,392
+1.5
+1.3
+Total
+19,226,349
+100.0
+17,825,302
+100.0
+Note: (1) Includes outward remittance and remittance payables.
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+At 31 December 2017
+In RMB millions, except for percentages
+At 31 December 2016
+236,501
+Demand deposits
+24.8
+4,419,907
+At 31 December 2016
+Amount
+Percentage
+(%)
+Corporate deposits
+Time deposits
+4,487,885
+23.3
+4,176,834
+23.4
+Demand deposits
+6,069,804
+31.6
+5,271,686
+29.6
+Subtotal
+10,557,689
+54.9
+9,448,520
+53.0
+Personal deposits
+Discussion and Analysis
+Time deposits
+4,559,714
+23.7
+Percentage
+1,706,549
+Percentage
+Amount
+3,169,147
+16.5
+2,881,274
+16.2
+Northeastern China
+1,021,205
+5.3
+986,703
+5.5
+Overseas and others
+786,071
+Western China
+4.1
+3.8
+Total
+19,226,349
+100.0
+17,825,302
+100.0
+In terms of currency structure, RMB deposits stood at RMB18,041,034 million, an increase of RMB1,318,283 million or 7.9%
+over the end of the previous year. The balance of foreign currency deposits was equivalent to RMB1,185,315 million, an
+increase of RMB82,764 million or 7.5%.
+Repurchase Agreements
+Repurchase agreements were RMB1,046,338 million, representing an increase of RMB457,032 million or 77.6% from the
+end of the previous year, mainly because the Bank appropriately adjusted the size of funds raised from the public market
+based on its internal and external liquidity status.
+26
+ICBC
+677,059
+14.4
+2,561,772
+14.2
+(%)
+Amount
+(%)
+Head Office
+60,261
+0.3
+69,210
+0.4
+Yangtze River Delta
+3,647,025
+19.0
+3,456,697
+19.4
+Pearl River Delta
+2,687,969
+14.0
+2,397,059
+13.4
+Bohai Rim
+5,119,148
+26.6
+4,795,528
+26.9
+Central China
+2,735,523
+Item
+0.6
+Due to banks and other financial institutions
+(%)
+Total
+30.9
+1,594,171
+31.8
+1,710,548
+Over 5 years
+48.6
+2,509,681
+52.5
+2,819,961
+1 to 5 years
+5,373,733
+14.1
+10.5
+561,566
+6.4
+328,648
+5.2
+281,658
+0.0
+150
+-
+3 to 12 months
+Less than 3 months
+729,375
+Undated(1)
+100.0
+100.0
+5.5
+295,590
+93.4
+4,820,370
+92.0
+4,945,340
+Percentage
+(%)
+Amount
+(%)
+Amount
+Percentage
+5,162,025
+At 31 December 2017
+In RMB millions, except for percentages
+Total
+Other foreign currency bonds
+USD-denominated bonds
+RMB-denominated bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+Discussion and Analysis
+23
+Annual Report 2017
+Note: (1) Refers to overdue and impaired bonds.
+At 31 December 2016
+(%)
+Amount
+Percentage
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2016
+At 31 December 2017
+In RMB millions, except for percentages
+Total
+Other bonds
+3,286,729
+Policy bank bonds
+Government bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+Debt instruments amounted to RMB5,431,805 million, an increase of RMB235,270 million or 4.5% over the end of previous
+year, of which bonds increased by RMB211,708 million or 4.1%.
+100.0
+5,481,174
+100.0
+5,756,704
+5.2
+284,639
+5.6
+Central bank bills
+61.2
+2,484,463
+48.1
+(%)
+Percentage
+Amount
+Remaining maturity
+At 31 December 2016
+In RMB millions, except for percentages
+At 31 December 2017
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+In terms of distribution by issuers, government bonds increased by RMB802,266 million or 32.3%; central bank bills
+decreased by RMB39,122 million or 67.4%; policy bank bonds went down by RMB322,781 million or 24.5%; and other
+bonds dropped by RMB228,655 million or 17.6%. The Bank stepped up the investment in local government bonds and
+treasury bonds in order to support the development of real economy, while under the influence of normal maturity of bonds
+and changes in the supply-demand structure of the bond market, the balances of central bank bills, policy bank bonds and
+other bonds declined by different extent during the reporting period.
+100.0
+5,162,025
+100.0
+5,373,733
+25.2
+1,300,088
+19.9
+1,071,433
+25.6
+1,319,450
+18.5
+996,669
+1.1
+58,024
+0.4
+18,902
+246,275
+4.8
+132,803
+2.5
+Policy bank bonds 2012
+14 January 2019
+5.75%
+10,410
+Policy bank bonds 2014
+21 August 2019
+22 February 2021
+4.62%
+10,505
+Policy bank bonds 2011
+3.94%
+10,580
+10,140
+Policy bank bonds 2012
+3.51%
+11,050
+Policy bank bonds 2010
+25 June 2022
+24 March 2018
+4.25%
+11,375
+Policy bank bonds 2011 (1)
+4.04%
+11,400
+Policy bank bonds 2012
+25 August 2018
+27 July 2020
+3.76%
+Policy bank bonds 2012
+9,770
+Amount
+17,825,302
+80.3
+19,226,349
+Due to customers
+(%)
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2017
+At 31 December 2016
+In RMB millions, except for percentages
+LIABILITIES
+As at the end of 2017, total liabilities reached RMB23,945,987 million, an increase of RMB1,789,885 million or 8.1%
+compared with the end of last year.
+The reverse repurchase agreements stood at RMB986,631 million, up RMB231,004 million or 30.6% from the end of last
+year. The increase was mainly attributed to lending to the market at proper scale on the prerequisite of ensuring the liquidity
+safety of the Bank itself at the end of the reporting period.
+Reverse Repurchase Agreements
+Discussion and Analysis
+ICBC
+24
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bills.
+loss
+Impairment
+Note: (1) The bonds had been repaid on the maturity date.
+13 July 2019
+23 April 2019
+4.32%
+4.49%
+80.5
+14,001
+11 March 2018
+1,496,453
+Available-for-sale financial assets
+8.7
+(%)
+Percentage
+474,475
+7.7
+Amount
+Percentage
+(%)
+At 31 December 2017
+440,938
+26.0
+Financial assets at fair value through
+profit or loss
+Item
+At 31 December 2016
+In RMB millions, except for percentages
+DISTRIBUTION OF INVESTMENT BY HOLDING PURPOSE
+In terms of currency structure, RMB-denominated bonds rose by RMB124,970 million or 2.6%; USD-denominated bonds
+increased by the equivalent of RMB49,315 million or 20.0%; and other foreign currency bonds increased by an equivalent of
+RMB37,423 million or 39.2%. During the reporting period, the Bank balanced the risk and returns of foreign currency bond
+investment portfolios and timely increased the investment in foreign currency bonds.
+100.0
+5,162,025
+100.0
+5,373,733
+1.8
+95,380
+Amount
+1,742,287
+31.8
+Held-to-maturity investments
+4.95%
+15,350
+Policy bank bonds 2008 (1)
+Maturity
+Annual
+interest rate
+value
+Debt securities
+Nominal
+In RMB millions, except for percentages
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+As at the end of 2017, the Group held RMB1,425,105 million of financial bonds', including RMB996,669 million of policy
+bank bonds and RMB428,436 million of bonds issued by banks and non-bank financial institutions, accounting for 69.9%
+and 30.1% of financial bonds, respectively.
+100.0
+5,481,174
+100.0
+5,756,704
+Total
+5.3
+291,370
+4.8
+277,129
+Receivables
+54.2
+2,973,042
+61.5
+3,542,184
+Policy bank bonds 2011
+OTHER NON-INTEREST RELATED GAIN
+2015
+2016
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+20
+2,000,174
+Balance of adjusted off-balance sheet assets
+19
+(1,709,572)
+(2,211,697)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+3,435,098
+4,211,871
+Off-balance sheet exposure at gross notional amount
+17
+568,483
+774,077
+Total securities financing transaction exposures
+16
+Agent transaction exposures
+15
+57,298
+57,693
+CCR exposure for SFT assets
+14
+SFT assets
+Net tier 1 capital
+2,110,060
+1,954,770
+21
+Cash outflows
+4,809,778
+Total high-quality liquid assets (HQLA)
+1
+High-quality liquid assets
+S/N Item
+Total
+weighted
+value
+value
+un-weighted
+Fourth-quarter 2017
+Total
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced Approaches
+Less: Netted amounts of cash payables and cash receivables of gross
+(j)
+For the year ended 31 December 2017
+Unaudited Supplementary Financial Information
+291
+Annual Report 2017
+7.55%
+7.51%
+Leverage ratio
+22
+25,904,533
+28,084,967
+Balance of adjusted on- and off-balance sheet assets
+(In RMB millions, unless otherwise stated)
+13
+511,185
+716,384
+3
+2
+23,433,899
+25,174,171
+On-balance sheet items (excluding derivatives and SFTs, but
+including collateral)
+1
+31 December
+2016
+2017
+Item
+S/N
+31 December
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets and Related
+Information
+25,904,533
+(11,560)
+(14,282)
+28,084,967
+1,725,526
+57,298
+93,733
+61,814
+57,693
+2,000,174
+Balance of adjusted on- and off-balance sheet assets
+8
+Other adjustments
+7
+4
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+(14,282)
+25,159,889
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+12
+188,185
+150,827
+(27,517)
+(27,001)
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+11
+10
+58,813
+46,496
+23 456
+(14,896)
+Less: Exempted CCP leg of client-cleared trade exposures
+Effective notional amount of written credit derivatives
+9
+8
+58,116
+63,145
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided
+in derivatives transactions
+7
+56
+113,669
+93,955
+(11,560)
+23,422,339
+(25,768)
+Retail deposits and deposits form small business customers, of which:
+9,293,000
+926,296
+ICBC
+292
+129.02%
+Data of the above table are all the simple arithmetic means of the 92 natural days' figures of the recent quarter.
+Liquidity coverage ratio (%)
+3,720,837
+4,809,778
+23
+Total net cash outflows
+22
+Total HQLA
+21
+value
+Total adjusted
+2,571,865
+3,419,763
+Total cash inflows
+20
+1,175,321
+1,186,092
+Other cash inflows
+19
+1,065,288
+2017 Ranking and Awards
+2017 Ranking
+Forbes
+The 1st place among the Global 2000
+Best Consumer Digital Banks in China
+Best Corporate/Institutional Digital Banks in China
+Best Bank for Renewable Energy
+Best Private Bank for Millennials
+Best Asset Manager
+Best Corporate Bank in China
+Best Bank in China
+Best Bank in Asia-Pacific
+World's Best Emerging Markets Bank
+Global Finance
+OVERSEAS AWARDS
+1,504,511
+2017 Awards
+China Enterprise Confederation
+The 28th place among the Top 100 Most Valuable Global Brands
+(The 2nd place among the brands of financial institutions)
+Ranking in terms of brand value
+Millward Brown
+The 1st place among the Top 500 Banking Brands rankings
+Ranking in terms of brand value of a bank
+Brand Finance
+(The 1st place on the sub-list of commercial banks)
+Ranking in terms of operating income
+The 22nd place among the Global 500
+Fortune
+The 1st place among the Top 1000 World Banks
+Ranking in terms of tier 1 capital of a bank
+The Banker
+Ranking in terms of combination of sales, profit,
+assets and market value
+The 4th place among the Top 500 Enterprises of China
+Ranking in terms of operating income
+Inflows from fully performing exposures
+18
+331,256
+10
+31,316
+SICHUAN PROVINCIAL BRANCH
+Address: No. 35 Zongfu Road,
+9
+68,624
+68,624
+Unsecured debt
+8
+2,237,598
+4,877,452
+Non-operational deposits (all counterparties)
+Additional requirements, of which:
+7
+6,471,339
+Operational deposits (excluding those generated from correspondent
+banking activities)
+3,876,930
+11,417,415
+Unsecured wholesale funding, of which:
+924,572
+9,245,725
+Less stable deposits
+1,724
+47,275
+Stable deposits
+1,570,708
+Adjustment for off-balance sheet items
+3,826,603
+11
+729,160
+Secured lending (including reverse repos and securities borrowing)
+17
+Cash inflows
+6,292,702
+Total cash outflows
+16
+26,570
+1,138,517
+Other contingent funding obligations
+15
+1,378,596
+52,994
+Other contractual funding obligations
+14
+217,944
+2,665,948
+Credit and liquidity facilities
+13
+Outflows related to loss of funding on debt products
+12
+1,160,652
+1,160,655
+Outflows related to derivative exposures and other collateral requirements
+53,291
+6
+Adjustment for securities financing transactions
+Adjustments for derivative financial instruments
+No
+No
+Cumulative
+Cumulative
+No
+N/A
+N/A
+N/A
+N/A
+름름름름증
+Cumulative
+No
+No
+write-down trigger(s)
+Including: If write-down,
+Write-down feature
+instrument it converts into
+specify issuer of
+Including: If convertible,
+type convertible into
+specify instrument
+Including: If convertible,
+optional conversion
+N/A
+N/A
+N/A
+MA
+N/A
+N/A
+No
+33 33 33 g
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+름름름름증
+mandatory or
+N/A
+Cumulative
+No
+No
+N/A
+N/A
+MA
+MA
+N/A
+N/A
+름름름름금
+N/A
+N/A
+N/A
+Including: If convertible,
+Including: If convertible,
+4.875%
+5.80%
+4.50%
+Including: Coupon rate and
+dividend/coupon
+Fixed
+Fixed
+Fixed
+Fixed
+Fixed
+Including: Fixed or floating
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+N/A
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Including: Subsequent call
+dates, if applicable
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+4.45%
+4.45%
+any related index
+Including: Existence of a
+fully or partially
+Including: If convertible,
+conversion trigger(s)
+Including: If convertible,
+Convertible or non-convertible
+cumulative
+Cumulative
+Including: Non-cumulative or
+incentive mechanism
+Including: Redemption
+coupons/dividends
+conversion rate
+partially discretionary or
+mandatory cancellation of
+Mandatory
+No
+Mandatory
+Mandatory
+Fully discretionary
+Mandatory
+Including: Fully discretionary,
+dividend stopper
+No
+No
+No
+No
+N/A
+N/A
+N/A
+present bonds
+No
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+capital instruments
+and hybrid capital
+but senior to equity
+capital, other tier 1
+depositor and
+general creditor,
+Subordinated to
+No
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+present bonds
+Subordinated to
+depositor and
+general creditor,
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+No
+No
+passu with other
+subordinated debts
+Subordinated to
+depositor and
+general creditor, pari
+passu with other
+subordinated debts
+2
+debts
+Subordinated to
+depositor and
+general creditor, pari
+Subordinated to
+depositor and general
+creditor, pari passu with
+other subordinated
+Including: If yes, specify
+non-compliant features
+Non-compliant transitioned
+features
+hierarchy in liquidation
+(specify instrument type
+immediately senior to
+instrument)
+Position in subordination
+290
+ICBC
+N/A
+N/A
+Adjustments for fiduciary assets
+regulatory consolidation
+Consolidated adjustments for accounting purposes but outside the scope of
+345
+24,137,265
+(97,729)
+(107,475)
+26,087,043
+2016
+2017
+2
+Total consolidated assets as per published financial statements
+mechanism
+1
+S/N
+31 December
+31 December
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+The following information is disclosed in accordance with the CBRC Administrative Measures for Leverage Ratio of
+Commercial Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+(i) Disclosure of Leverage Ratio
+For the year ended 31 December 2017
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+N/A
+N/A
+N/A
+Item
+description of write-up
+write-down,
+Including: If temporary
+non-viable; or (ii) any
+a write-down is
+necessary, without
+which the Issuer
+would become
+earlier: (i) CBRC
+having decided that
+is necessary, without
+which the Issuer
+would become
+non-viable Full
+write-down
+having decided
+that a public sector
+injection of capital or
+equivalent support
+relevant authority
+Whichever occurs
+earlier: (i) CBRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+Whichever occurs
+Yes
+Yes
+is necessary, without
+which the Issuer
+would become
+non-viable Full
+write-down
+relevant authority
+having decided
+non-viable; or (ii) any
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+Yes
+N/A
+N/A
+Non-viability
+of the Bank
+ICBC(Asia) or the Bank
+Non-viability of
+Yes
+Yes
+NA
+N/A
+N/A
+Whichever occurs
+earlier: (i) CBRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+Euromoney
+that a public sector
+injection of capital or
+equivalent support
+is necessary, without
+which the Issuer
+would become
+non-viable Full
+write-down
+289
+Permanent
+write-down
+N/A
+N/A
+Permanent
+write-down
+write-down
+N/A
+write-down
+N/A
+N/A
+write-down
+Permanent
+Permanent
+Permanent
+Full write-down
+Annual Report 2017
+Full write-down
+Full write-down
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Full write-down
+permanent or temporary
+Including: If write-down,
+or partial
+Including: If write-down, full
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2017
+Unaudited Supplementary Financial Information
+Full write-down
+Best Bank in China
+Secured funding
+Asiamoney
+BOX: 11217
+Email: wangxq@doh.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQAXXX
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Address: C903, Al Bateen Tower,
+C6, Bainuna Street, P.O.
+Box 62108, Abu Dhabi,
+United Arab Emirates
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+298
+ICBC
+Tel: 0755-82246400
+Fax: 0755-82062761
+Postcode: 518015
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+Center, No. 5055
+Address: North Block Financial
+SHENZHEN BRANCH
+Fax: 021-58886888
+Tel: 021-58885888
+Postcode: 200120
+Shanghai, China
+Pudong New District,
+Address: No. 9 Pudong Avenue,
+SHANGHAI MUNICIPAL BRANCH
+Address: Level 20, Burj Doha Tower,
+Al Corniche Street, West
+Bay, Doha, Qatar P.O.
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+SWIFT: ICBKINBBXXX
+Fax: +91-2271110353
+Address: 17th Floor, Exchange
+Square, No. 19-20,
+Street 106, Phnom Penh,
+Cambodia
+Email: icbckh@kh.icbc.com.cn
+Tel: +855-23955880
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Industrial and Commercial
+Bank of China Limited, Yangon
+Branch
+Address: 459 Pyay Road, Kamayut
+Township, Yangon,
+Myanmar
+Tel: +95-12306306-8810, 8830, 8821
+Fax: +95-12306305-8805, 8806
+SWIFT: ICBKMMMY
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: 029-87602999
+Fax: +65-65381370
+Industrial and Commercial Bank
+of China Limited Karachi Branch
+Address: 15th & 16th Floor, Ocean
+Tower, G-3, Block-9,
+Scheme # 5, Main Clifton
+Road, Karachi, Pakistan.
+P.C:75600
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKAXXX
+Industrial and Commercial
+Bank of China Limited, Mumbai
+Branch
+Address: 801, 8th Floor, A
+Best Precious Metal Trading Bank in China
+G Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+SWIFT: ICBKSGSG
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Tel: 029-87602608/87602630
+SHAANXI PROVINCIAL BRANCH
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Tel: 0574-87361162
+Fax: 0574-87361190
+Postcode: 315010
+West Road, Ningbo City,
+Zhejiang Province, China
+Address: No. 218 Zhongshan
+NINGBO BRANCH
+Tel: 0471-6940297
+Fax: 0471-6940096
+Postcode: 010060
+Road, Hohhot City, Inner
+Mongolia Autonomous
+Region, China
+Address: No. 10 East 2nd Ring
+AUTONOMOUS REGION
+BRANCH
+INNER MONGOLIA
+Fax: 024-23491609
+Tel: 024-23491600
+Postcode: 110001
+LIAONING PROVINCIAL BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+Tel: 0791-86695682/86695018
+Fax: 0791-86695230
+Postcode: 330008
+JIANGXI PROVINCIAL BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Province, China
+Fax: 025-52858111
+Tel: 025-52858000
+Postcode: 210006
+South Road, Nanjing City,
+Jiangsu Province, China
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+296
+ICBC
+List of Domestic and Overseas Branches and Offices
+NINGXIA AUTONOMOUS
+REGION BRANCH
+Fax: 0351-6248004
+Tel: 0351-6248888/6248011
+Postcode: 030001
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Fax: 0531-87941749
+Tel: 0531-66681622
+Postcode: 250001
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+BRANCH
+SHANDONG PROVINCIAL
+Fax: 0971-6152326
+Postcode: 710004
+Tel: 0971-6169722/6152326
+QINGHAI PROVINCIAL BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Fax: 0532-85814711
+Tel: 0532-85809988-621031
+Postcode: 266071
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+QINGDAO BRANCH
+Fax: 0951-5042348
+Tel: 0951-5029200
+Postcode: 750002
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region,
+China
+Address: No. 901 Huanghe East
+Postcode: 810001
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Tel: +856-21258888
+Email: icbcvte@la.icbc.com.cn
+Postcode: 310009
+Tel: 0571-87803888
+Fax: 0571-87808207
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 100033
+Tel: 010-66583333
+Fax: 010-66583158
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai
+Postcode: 200120
+Tel: 021-5879-2288
+Fax: 021-5879-2299
+ICBC Financial Asset Investment
+Co., Limited
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin Road,
+Nanjing City, Jiangsu
+Province, China
+Postcode: 211800
+Tel: 025-58172219
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Address: No.1 Aokang Avenue,
+Bishan District, Chongqing
+Postcode: 402760
+Tel: 023-85297704
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Zhejiang Province, China
+Tel: 0871-65536312
+Fax: 0871-63134637
+Postcode: 650021
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 610016
+Tel: 028-82866000
+Fax: 028-82866025
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Postcode: 300074
+Tel: 022-28400648
+Fax: 022-28400123/022-28400647
+XIAMEN BRANCH
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Postcode: 361012
+Fax: 023-85297709
+Tel: 0592-5292000
+XINJIANG AUTONOMOUS
+REGION BRANCH
+Address: No. 231 Remin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Postcode: 830002
+Tel: 0991-5981888
+Fax: 0991-2337527
+TIBET AUTONOMOUS REGION
+BRANCH
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+Postcode: 850000
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Fax: 0592-5054663
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No.258 Chengnan West
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau
+Email: icbc@mc.icbc.com.cn
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+ASIA-PACIFIC
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 2-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo, 100-
+0005, Japan
+Email: icbctokyo@icbc.co.jp
+Tel: +813-52232088
+Fax: +813-52198502
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Industrial and Commercial Bank
+of China (Macau) Limited
+Tel: +82-237886670
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, Samsung Fire &
+Marine Insurance Bldg.,
+#184, Jungang-daero,
+Dong-gu, Busan 601-728,
+Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Email: admin@vn.icbc.com.cn
+Tel: +84-462698888
+Fax: +84-462699800
+SWIFT: ICBKVNVN
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Address: Asean Road, Home
+No.358, Unit12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+Fax: +82-27553748
+Tel: 0431-89569073/89569712
+Fax: 0431-88923808
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICBHHKHH
+3 Garden Road, Central,
+Hong Kong
+Road, Pinghu, Zhejiang
+Province
+Postcode: 314200
+Tel: 0573-85139616
+Fax: 0573-85139626
+Annual Report 2017
+297
+List of Domestic and Overseas Branches and Offices
+Overseas Institutions
+HONG KONG AND MACAU
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Address: 33/F, ICBC Tower,
+Email: info@icbci.com.hk
+3 Garden Road, Central,
+Hong Kong
+Tel: +852-25881188
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Fax: +852-28051166
+SWIFT: UBHKHKHH
+ICBC International Holdings
+Limited
+Address: 37/F, ICBC Tower,
+Email: icbchk@icbcasia.com
+Postcode: 130022
+Wing, One BKC, C-66,
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+FinTech Entrepreneurship Innovation Program
+Best Call Center in China
+China Electronics Chamber of Commerce
+China Advertising Great Wall Award: Advertiser
+China Advertising Association
+Demonstration Case of Internet-driven New Activity in China
+(ICBC Mobile)
+Internet Society of China
+Best Customer Contact Center in China
+China Federation of IT Promotion Customer Relationship
+Management Committee
+First Award for Excellent Financial Institution Members
+Outstanding Contribution Award for Auction Market
+Great Contribution Award for OTC Market
+Contribution Award for Leasing Business
+Shanghai Gold Exchange
+Excellent Award for Proprietary Foreign Exchange Clearing
+Excellent Custodian Bank
+Excellent Underwriter
+Excellent Settlement Participant
+Excellent Clearing Participant
+Excellent Bond Trader
+Interbank Local Currency Market
+Outstanding Contribution Award for Opening up
+National Interbank Funding Center
+Most Popular Forward and Swap Market Making Institution Award
+Best Foreign Currency Pairs Trading Award
+Best Non-USD Trading Award
+China FinTech Product Innovation Award - Open Online Banking
+Global Asset Allocation 100
+Investment Bank Award for Cross-border M&A
+China Financial Certification Authority
+Pioneering Private Bank
+Pioneering Bank for Underwriting Medium-term Note
+ABS Pioneering Bank
+Pioneering Bank for Underwriting Super Short-term
+Commercial Paper
+Bond Underwriting Pioneering Bank
+International Financial News
+Excellent Mobile Banking Award of the Year
+China Times
+Most Respected Chairman Award
+Most Influential Commercial Bank
+Best Corporate Governance Award
+21st Century Business Herald
+Jun Ding Award for China's Private Banking Brand
+Jun Ding Award for Comprehensive Investment Bank
+Jun Ding Award for Financial Advisory Bank
+Jun Ding Award for Cross-border Financing Bank
+China Banking Innovation Pioneer (ICBC Mobile)
+Best Spot Trading Award
+Securities Times
+Best Chinese State-owned Listed Companies on
+Corporate Social Responsibilities
+Southern Weekly
+SME Service Bank with Excellent Competitiveness
+China Business Journal
+"Gold Headphone" Best Customer Center in China
+"Gold Headphone" Best Team Culture Customer Center
+of the Year
+CCMWorld Group
+FinTech Innovation Alliance Internet Financial Work Committee
+China Inclusive Finance Conference Excellent Brand Award
+for Inclusive Finance (ICBC Mobile)
+Elite Team Award for Comprehensive Business Support
+Elite Team Award for Technical Support
+China Financial Industry Call Center Development League
+Excellent Team Award for Operation Management
+Operation and Management Elite Team Award
+Best Personal Online Banking Award
+China Financial Brand "Gold Chestnut" Award - Social
+Marketing Pioneer TOP10 (Dare to Dream, Wisdom Goddess)
+Best Mobile Banking Award
+Annual Meeting of Chinese Enterprises on Social
+Responsibility - Best Responsibility Report
+Best Forward and Swap Market Making Award
+Best Spot Market Making Award
+Best Market Maker
+World Bank
+House of the Year in China
+JILIN PROVINCIAL BRANCH
+Address: No. 9559 Renmin Avenue,
+Changchun City, Jilin
+Province, China
+Middle East and North Africa Power Deal of the Year
+Project Finance International
+Asset Corporate Award - Platinum Award
+Best Bond Advisor in China
+Best Commodities Derivatives House in China
+Best Wealth Manager in China
+Best Private Bank in China
+Best Bank in China
+First Mulan Bond — Lead Bookrunner
+The Asset
+Institutional Investor
+Best (Mega) Cash Management Bank in China
+Achievement in Market Risk Management Award in China
+Best (Mega) Transaction Bank in China
+Best (Mega) Private Bank in China
+Custodian Bank of the Year
+The Asian Banker
+Best DCM House
+Best Bank in China
+Finance Asia
+Best Chinese bank in Central & Eastern Europe for BRI
+Best Bank For Advising Chinese Institutions on BRI
+Best Chinese bank in Southeast Asia for BRI
+Diamond Award for Best RMB Internationalization
+Cash Management/Settlement
+International Pioneering Investment Bank Award
+Cross-border Financing Pioneering Bank
+The Berne Union
+MasterCard Worldwide
+Best Technology Market Making Award
+Best Market Maker Award in Back-office Support
+China Foreign Exchange Trading System
+Excellent Comprehensive Market Making Institution
+Excellent Interest Rate Bond Market Maker
+Excellent Unsecured Bond Market Maker
+National Association of Financial Market Institutional Investors
+Excellent Trading Agency
+Excellent Proprietary Trading Institution Award
+Outstanding Asset Custody Institution Award
+Outstanding Green Bond Underwriting Institution
+Excellent Financial Bond Issuer
+Excellent ABS Sponsor
+China Central Depository & Clearing Co., Ltd.
+Outstanding Underwriter Award
+2017 Ranking and Awards
+293
+Annual Report 2017
+Deal of the Year
+Best Transformation Award
+Best Risk Control Award
+Best Yield Award
+Best Overall Wealth Management Ability Award
+Best Project Award
+Best Internet Trade Finance Bank
+1st Place in the Comprehensive Ranking of the Commercial
+Bank Robust Development Ability Evaluation System
+Outstanding Organization Award of the Commercial Bank
+Steady Development Ability Evaluation System
+Leading Institution of the Best Specialized Committee
+Best Private Banking Institution
+Best Social Responsibility Institution Award
+Best Social Contribution Award
+China Banking Association
+Banking Technological Development Award
+PBC
+DOMESTIC AWARDS
+Award for Best Risk Monitoring and Control in Asia-Pacific
+Best Compliance Award
+The Chinese Banker
+Asia Risk
+Top Ten Innovative Institutions in Internet-based Finance
+Best FinTech Bank of the Year
+Tel: 020-81308130
+Postcode: 510120
+Address: No. 123 Yanjiangxi
+Road, Guangzhou City,
+Guangdong Province,
+China
+GUANGDONG PROVINCIAL
+BRANCH
+Fax: 0931-8435166
+Tel: 0931-8434172
+Postcode: 730030
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Fax: 0591-83353905/83347074
+88087819/88087000
+Tel: 0591-88087810/
+Fax: 020-81308789
+Postcode: 350005
+Tel: 0411-82378888/82378000
+Fax: 0411-82808377
+Postcode: 116001
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+DALIAN BRANCH
+Fax: 023-62918059
+Tel: 023-62918002
+Postcode: 400060
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+CHONGQING MUNICIPAL
+BRANCH
+Fax: 010-66410579
+Tel: 010-66410579
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+Postcode: 100031
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+Tel: 0771-5316617
+The 1st place in the Ranking of National Commercial
+Banks in Core Competitiveness
+Postcode: 410011
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong Middle
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+Postcode: 430071
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province,
+China
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+Postcode: 150010
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+China
+HEILONGJIANG PROVINCIAL
+BRANCH
+Postcode: 530022
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Tel: 0311-66001999/66000001
+Fax: 0311-66001889/66000002
+Postcode: 050051
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Tel: 0898-65303138/65342829
+Fax: 0898-65303138
+Postcode: 570203
+HAINAN PROVINCIAL BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Tel: 0851-88620004/88620018
+Fax: 0851-85963911
+Postcode: 550001
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua North
+Road, Guiyang City,
+Guizhou Province, China
+Fax: 0771-5316617/2806043
+Postcode: 450011
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+1,725,526
+Fax: 0551-62868077
+Xinhua.com
+Top Ten listed Company of the Year
+CCTV Finance
+"Jin Zhen Award" for Best Private Bank in China
+Wealth Plus
+Best Bond Underwriting Bank
+Best State-owned Commercial Bank
+Caijing.com
+Best Global Cash Management Bank
+Best Cash Management Bank
+Best Treasury Innovation Product
+China Top 100 Brand
+Treasury China
+"Gold Round Table" Best Board of Directors
+Directors & Boards
+Technological Innovation in Financial Industry
+Outstanding Contribution Award for Scientific and
+Financial Computerizing
+Bank of the Year
+"Golden Pixiu" Awards Gold Asset Management
+Financial Money
+294
+BEIJING MUNICIPAL BRANCH
+ICBC
+"Gold Round Table" Most Innovative Board Secretary
+"Gold Innovation Award" Most Active Mobile Banking
+Excellent Contribution Award for Gold Asset Custody Bank
+Best Internet Financing Bank of the Year
+Postcode: 230001
+Ifeng.com
+Tel: 0551-62869178/62868101
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road, Hefei
+City, Anhui Province,
+China
+Domestic Institutions
+295
+Annual Report 2017
+2017 Ranking and Awards
+Best Employer in China
+Zhaopin.com
+in Financial Industry
+Best Employers for University Students - Best Employer
+List of Domestic and Overseas Branches and Offices
+Best Employer in China (Comprehensive Award in
+Financial Industry)
+Sina Finance.com
+China HR
+Most Popular Mobile Banking
+Analysys Think Tank
+Best State-owned Commercial Bank
+Best App of the Year (ICBC Mobile)
+China Internet Banking Union
+E-Banking Innovation Award - Best Marketing Service
+Innovation Award (Dare to Dream, Wisdom Goddess)
+Taihe Consulting
+Caijing.com
+User's Favorite Brand Best Internet Finance Bank of the Year
+Industrial and Commercial Bank
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+Fax: +352-26866666
+SWIFT: ICBKLULL
+Tel: +352-2686661
+Email: office@eu.icbc.com.cn
+Luxembourg
+B.P.278 L-2012
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-88298887, +976-
+88368887
+EUROPE
+Fax: +976-77108866
+floor, Central Tower,
+Sukhbaatar Square,
+Khoroo 8, Sukhbaatar
+district, Ulaanbaatar,
+Mongolia
+Address: Suite 910 and 911, 9th
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+SWIFT: ICBKNZ2A
+of China Limited, Frankfurt
+Branch
+Fax: +64-93747287
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+of China (Europe) S.A. Paris
+Industrial and Commercial Bank
+SWIFT: ICBKLULU
+Fax: +352-26866666
+Tel: +352-2686661
+Email: office@eu.icbc.com.cn
+Luxembourg
+B.P.278 L-2012
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+Tel: +420-237762888
+Fax: +420-237762899
+SWIFT: ICBKCZPP
+Email: info@cz.icbc.com.cn
+4- Nusle, Czech Republic
+Address: 12F City Empiria, Na Strži
+1702/65, 14000 Prague
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Bank of China Limited, London
+Branch
+Industrial and Commercial
+Email: icbc@icbc-ffm.de
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010, New
+Zealand
+Email: service@sa.icbc.com.cn
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Branch
+Tower Building No: 7277-
+King Fahad Road Al
+Olaya, Zip Code: 12212,
+Additional No.: 3333,
+Unit No.:95, Kingdom of
+Saudi Arabia
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: Level 7&8, A1 Faisaliah
+Fax: +965-22281799
+SWIFT: ICBKKWKW
+Tel: +965-22281777
+Tower), Floor 7, Al-Soor
+Street, Al-Morqab, Block 3,
+Kuwait City, Kuwait
+Address: Building 2A (Al-Tijaria
+Bank of China Limited, Kuwait
+Branch
+Tel: +966-112899800
+Industrial and Commercial
+Fax: +971-47031199
+Tel: +971-47031111
+Email: dboffice@dxb.icbc.com.cn
+Arab Emirates P.O. Box:
+506856
+International Financial
+Center, Dubai, United
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+List of Domestic and Overseas Branches and Offices
+SWIFT: ICBKAEAD
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Fax: +966-112899879
+Industrial and Commercial
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996010
+SWIFT: ICBKIDJA
+PT. Bank ICBC Indonesia
+Address: The City Tower 32nd
+Floor, JI. M.H.Thamrin No.
+81, Jakarta Pusat 10310,
+Indonesia
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Address: 622 Emporium Tower
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+SWIFT: ICBKKZKX
+SWIFT: ICBKSARI
+Fax: +7-7272377070
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Email: office@kz.icbc.com.cn
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Fax: +612-92333982
+SWIFT: ICBKAU2S
+Tel: +612-94755588
+Email: info@icbc.com.au
+Street, Sydney NSW 2000,
+Australia
+Address: Level 1, 220 George
+Bank of China Limited, Sydney
+Branch
+Tel: +7-7272377085
+Address: 73 boulevard haussmann,
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Email: administration@fr.icbc.com.cn
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Juarez, C.P.06600, Del.
+Cuauhtemoc, Ciudad de
+Mexico
+250, Piso 18, Col.
+Address: Paseo de la Reforma
+of China Mexico S.A.
+Industrial and Commercial Bank
+SWIFT: ICBKUS33FIN, ICBKUS3F
+FAX: +1-2129937349
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Tel: +1-2129937300
+28th Floor, New York, NY,
+10019, USA
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 1633 Broadway, 28th Floor,
+New York, NY 10019
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+Fax: +1-2122193211
+SWIFT: ICBKUS3N
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario, M5H
+2R2, Canada
+Industrial and Commercial Bank
+of China (Canada)
+SWIFT: ICBKUS33
+Fax: +1-2128386688
+Tel: +1-2128387799
+Email: info@icbkus.com
+Email: info-nyb@us.icbc.com.cn
+Address: Blvd. Cecilia Grierson
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148209022
+中國北京市西城區復興門內大街55號 郵編:100140
+No.55 Fuxingmennei Avenue, Xicheng District, Beijing, China Post Code: 100140
+wwww.icbc.com.cn, wwww.icbc-ltd.com
+ICBC
+田
+ICBC
+300
+Fax: +27-(21)2008012
+Email: hantao.wang@icbcafrica.com
+Tel: +27-(11)7217227
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Address: 47 Price Drive, Constantia,
+Cape Town, South Africa,
+7806
+355, (C1107 CPG) Buenos
+Aires, Argentina
+AFRICA
+Email: perugw@pe.icbc.com.cn
+Lima27, Perú
+Address: Av.Juan de Arona 151,
+Oficina 202, San Isidro,
+ICBC PERU BANK
+Email: bxgw@br.icbc.com.cn
+Tel: +55-1123956600
+SWIFT: ICBKBRSP
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+Tel: +51-16316801
+Fax: +51-16316803
+SWIFT: ICBKPEPL
+75008, Paris
+20th Floor, New York,
+NY 10022, USA
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+Email: hradmin@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMMXXX
+Address: Via Tommaso Grossi 2,
+Milano, Italy
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+SWIFT: ICBKBEBB
+Fax: +32-2-5398870
+Tel: +32-2-5398888
+Email: info@be.icbc.com.cn
+Address: 81, Avenue Louise, 1050
+Brussels, Belgium
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Email: icbcamsterdam@nl.icbc.com.cn
+Tel: +31-205706666
+Address: Johannes Vermeerstraat
+7-9,1071 DK, Amsterdam,
+the Netherlands
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+List of Domestic and Overseas Branches and Offices
+299
+Annual Report 2017
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Tel: +33-140065858
+Fax: +31-206702774
+SWIFT: ICBKNL2AXXX
+Address: 725 Fifth Avenue,
+Address: Paseo de recoletos, 12,
+28001, Madrid, España
+Fax: +34-912168866
+SWIFT: ICBKESMMXXX
+AMERICAS
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+londonmarketing@icbcstandard.com
+Email:
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+SWIFT: ICBKTRISXXX
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355162
+Email: icbcspain@es.icbc.com.cn
+Tel: +34-902195588
+Address: Maslak Mah. Dereboyu,
+2 Caddesi No: 13 34398
+Sariyer, İSTANBUL
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Address: Building 29,
+Bank ICBC (joint stock
+company)
+SWIFT:ICBKPLPW
+Fax: +48-222788090
+Address: Plac Trzech Krzyży 18, 00-
+499, Warszawa, Poland
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+ICBC Turkey Bank Anonim
+Şirketi
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway,
+Discussion and Analysis
+Inclusive Finance
++
+ICBC
+Discussion and Analysis
+Internet-based Finance
+The Bank advanced its e-ICBC 3.0 internet-based finance development strategies on all fronts, played a guiding role in
+leading innovation, upgraded and improved the overall architecture of internet-based finance with the information platform,
+open platform and service platform ICBC Link, online intelligent financial transaction service platform ICBC Mobile and
+integrated e-commerce and financial platform ICBC Mall as the main pillars and covering financial services, e-commerce,
+payment and social life. The Bank continued to render better customer experience, improved its risk prevention and control
+system to inject new vigor into the business transformation of the Bank.
+ICBC Mall
++
++
+The Bank delivered better customer experience on the mobile clients of ICBC Mall, and developed the functions
+exclusive to the mobile client, including red packets sharing, fingerprint login, new mobile-client air ticket channel and
+sharing to social platforms.
+The Bank rolled out asset transaction platform, commodity matchmaking platform, travel mall, refueling and top-up,
+auto mall, wealth management product mall and other special platforms.
+The Bank created special business financing scenarios, and achieved new breakthroughs in public welfare and poverty
+relief, green and health, intelligent life, commodities, etc.
+The Bank signed contracts with 943 quality green food enterprises, a move enabling ICBC Mall to cover nearly all the
+green food enterprises with e-commerce operation and service capacity in China. Thus ICBC Mall became one of the
+most authoritative e-commerce platforms with the most comprehensive ranges of green food.
+In 2017, ICBC Mall achieved an accumulative transaction amount of RMB1.03 trillion.
+ICBC Link
++
++
+The Bank rolled out "I'm right here at ICBC" annual statement big data portrait product, to leverage the big data's
+advantages to offer value-added information services.
+The Bank established an integrated service platform, and went live group messaging tool, all-channel service
+assessment, private banking statement, paper precious metal transfer and other important functions to assist customer
+managers in giving better services.
+The Bank rolled out service public accounts covering 2,550 scenarios, and provided various convenient services such
+as UCAR, ofo bike sharing, umbrella sharing, payment of traffic fines, ETC travel fee-deduction notice, social security
+payment, campus card top-up and payment by scanning QR on VEM.
+At the end of 2017, ICBC Link had 114 million registered users.
+Annual Report 2017
+35
+Discussion and Analysis
+ICBC Mobile
++
+4
++
+34
+In 2017, the sum of precious metal business transactions was RMB1.60 trillion. The Bank cleared RMB466.6 billion on
+behalf of the Shanghai Gold Exchange, up 14.8% from last year.
+The Bank sped up the internationalized development of precious metal business, set the gold benchmark price at the
+London Intercontinental Exchange (ICE), and engaged in the ICE price setting for over 500 times, thus accumulating its
+experience as market maker in the main international gold market and improving its influence internationally.
+The Bank conducted the financing for goods with gold prudently, which met demands of customers from the precious
+metal industry chain and actively supported the transformation, upgrade and development of the industry.
+On the foreign-currency money market, the Bank endeavoured to generate more returns from fund operations, and
+increased the proportion of domestic inter-bank lending and borrowing whose returns are relatively higher; it further
+diversified its business products system, and engaged in the lending of highly-liquid USD-denominated bonds; it also
+actively tapped the non-banking inter-bank customers with controllable risk and relatively high returns.
+In 2017, domestic trading amount in the inter-bank market was RMB26.23 trillion, of which lending amounted to
+RMB18.58 trillion. The transaction volume in foreign-currency money markets recorded USD780.2 billion.
+Investment
++
++
+With respect to investment in RMB bonds, the Bank, following the trend of market interest rate, scientifically
+formulated investment strategies, made unified arrangement for investment progress and pace, and improved the
+structure of underlying assets in investment; it also enlarged investment in government bonds and treasury bonds
+which occupy less economic capital, and actively supported the real economic development.
+With respect to investment in foreign currency bonds, against the higher cost of foreign currency funds and the
+narrower net interest margin of bond portfolio as a result of interest rate hikes by the U.S. Federal Reserve, the Bank
+stepped up active management of foreign currency bond portfolio, increased frequency of band operations and added
+spread earnings; it achieved significant development in the market making of foreign currency bonds, and served
+44 Chinese inter-bank institutions, markedly enhancing the Bank's influence in inter-bank foreign currency bond market.
+Financing
+In line with its fund operation and liquidity management needs, the Bank rationally arranged the scale and structure
+of its active liabilities including inter-bank borrowing from the inter-bank market, short-term time deposits with other
+banks and large-value CDs in order to enhance the supporting capacity of diverse liabilities to asset business growth.
+For details on the Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements:
+36. Certificates of Deposit; 38. Debt Securities Issued".
+Annual Report 2017
+33
+Discussion and Analysis
+Franchise Treasury Business
+The Bank launched the fingerprint and face scanning login and payment functions, and one-key transfer, QR code
+scanning login on internet banking, inquiry without login and other products and services.
++
++
+The Bank's franchise foreign exchange settlement and sales business focused on serving the real economy, especially
+helping exporters handle the foreign settlement and sales in goods trading. The volume of franchise foreign exchange
+settlement and sales hit USD422.8 billion in 2017.
+The Bank achieved steady development in foreign exchange trading business, and further consolidated its leading
+advantages in the money business in the Belt and Road and emerging markets. The volume of franchise foreign
+exchange trading stood at USD203.4 billion in 2017.
+The Bank was among the first in the banks to roll out the paper base metals and paper agricultural products non-stop
+trading products. It realized non-stop trading of all the paper products, and satisfied customers' demands in investing
+in paper products for a long term, thus cementing the Bank's market advantages in the Bank's paper trading products.
+The paper trading amounted to RMB411.0 billion in 2017.
+The Bank provided customers with financial services on the basis of foreign exchange rate and interest rate risk
+management. In 2017, the volume of franchise foreign-currency derivatives transactions reached USD30.3 billion,
+increased by 77.9% compared with last year. The Bank was awarded the 2017 "House of the Year in China" by Asia
+Risk thanks to its eminent role in RMB internationalisation and promoting the building of derivative market in China.
+The Bank made great efforts in expanding the overseas institutional customers in franchise trading business, and
+established franchise trading cooperative relationships with 127 institutional customers from 36 countries and
+regions in the world; it also made steady progress in innovating the counter-based bond business by distributing the
+first-tranche of special bonds for remote relocation for poverty relief and the first green bonds for "Yangtze River
+watershed management" to investors in counter market, to give a hand in implementing the national strategies for
+poverty relief and green development.
+Asset Securitization Business
++
+The Bank reinforced the asset securitization based on the actual conditions of business development. In 2017, the
+Bank issued seven tranches of securitization programs totaling RMB46,565 million. Among them, two tranches were
+non-performing credit card loans programs and two non-performing personal loans programs, and these programs
+helped the Bank with its NPL disposal and the improvement and adjustment of its credit structure; the Bank issued
+three tranches of residential mortgage securitization programs, thereby effectively supporting the new demands for
+residential loans.
+Precious Metal Business
++
++
+The Bank made active efforts in adapting to market changes, accelerated the innovation in physical products,
+launched physical products crafted with new techniques and with affordable luxury theme, and sped up the building
+of supporting logistics system to satisfy the customer's consumption demands for physical products with diversified
+themes, timely delivery and convenient services and enhance their consumption experience.
+The Bank promoted the integrated development of online and offline sale of physical products. The sales volume of
+physical products in "ICBC Precious Metal Flagship Store" under ICBC Mall increased over 100% from last year; it
+opened "ICBC Precious Metal Flagship Store" on JD. com, bringing precious metal physical products on sale on other
+e-commerce platform for the first time.
+4
+On the RMB money market, while making active efforts in protecting its liquidity safety, the Bank reasonably arranged
+the lending scale to banking and non-banking financial institutions to enhance the fund use efficiency; it also
+vigorously developed bond lending business and put existing bonds to good use, thereby realising increase in both
+scale and returns.
+With professional security as the goal, the Bank rolled out the Mobile Banking Security Center, featuring online
+security check, account security lock and other functions. Thus active, intelligent, scenario-based and visible security
+service experience can be provided.
+At the end of 2017, the number of ICBC Mobile customers reached 282 million.
+2015
+2016
+2017
+Note: The proportion of internet financial transactions refers to the
+number of internet financial transactions against the total
+number transactions of the bank.
+Service Enhancement
+Focusing on the overarching objective of "bank to the satisfaction of customers", the Bank improved the customers'
+satisfaction and experience by taking specific measures such as refining mechanisms, strengthening management and
+optimizing experience. As a result, the Bank steadily improved its service efficiency and services, and enjoyed better
+reputation among customers.
++
+The Bank refined mechanisms, and cemented the foundation of service management. It established a general
+framework for customer services to further improve the customer service management system. The Bank was the
+first in the banking industry to build and release the service culture system and make public the service philosophies
+"Customer-centric, Satisfactorily served, Employee-based and Consistently honest". It organized and carried out
+three 100-day activities themed as enhancing services with Party-building in order to deliver better services with Party
+building and test the outcome of Party building with improvement in services.
+1
+The data sources of internet financial transaction amount and the number of internet financial transactions are the same as those of
+the E-banking transaction amount and the number of internet financial transactions disclosed in the previous annual reports.
+Annual Report 2017
+37
+Discussion and Analysis
++
+The Bank reinforced management and improved service management. It established a mechanism to monitor and
+assess customer comments under internal and external cooperation and from different dimensions in an effort to
+grasp the current situation and identify problems. It improved rules on service assessment, implemented the indicators
+for customer service evaluation in the whole retail business line, refined the service evaluation system across the
+professions in the mega retail segment, further specified the responsible bodies and reinforced targets and tasks. It
+formulated rules and regulations to regulate the management over the outsourced monitoring of outlets service quality.
+The Bank reformed the procedure, and provided one-stop services. It made available the parallel processing mechanism
+for multiple businesses which solved a thorny issue troubling the whole banking industry, i.e. at counter, customers
+had to complete multiple forms, sign their names many times and enter passwords again and again. In this way,
+customers could enjoy one-stop services which are convenient and fast.
+The Bank offered better experience, and customers were more satisfied with it. It built 150 five-star outlets and
+500 four-star outlets in terms of services to erect the model and flagship shops for customers. Thanks to these efforts,
+the services were improved greatly. It enhanced routine supervision and guidance, and became more systemic and
+professional in service supervision and guidance.
+Consumer Protection
++
+The Bank regarded consumer protection as the core philosophy and code of conduct in its operation and
+management, and embedded it into all links of operation and management. It paid close attention to the actual
+demands of consumers, and improved products and services from the perspective of consumers, thereby achieving
+the harmony of economic benefits and social value. It focused on serving customers and the real economy, and kept
+standardizing the service charge management so as to ensure efficient and high-quality financial products and services
+with reasonable price.
+The Bank attached great importance to customers' comments and feedbacks, optimized customers' experience in
+resolving their appeals, provided smooth channels for accepting complaints, streamlined the procedures for handling
+complaints, enhanced internal supervision management, and solved problems of consumers in a timely manner. It
+refined its multi-dimensional consumer publicity system, and launched comprehensive financial knowledge publicity
+activities from different angles for consumers both in a routine and centralized manner using new media and
+traditional forms.
+Internationalized and Diversified Operation
+Internationalized Operation
++
++
+The Bank improved its global RMB business service network. By serving as the RMB clearing bank in seven countries
+including Singapore, Luxembourg, Qatar, Thailand, Canada, Argentina, and Russia, ICBC's service capability
+continued to improve, and its cross-border RMB clearing network expanded to 88 countries and regions in the world.
+In 2017, the Bank's cross-border RMB business volume reached RMB3.90 trillion.
+As at the end of 2017, the Bank has accumulatively supported 358 projects under the Belt and Road Initiative
+with credit facilities totaling USD94.5 billion. In 2017, ICBC extended credit to 123 projects additionally, totaling
+USD33.9 billion of loans extended.
+As at the end of 2017, the Bank established 419 institutions in 45 countries and regions and indirectly covered
+20 African countries as a shareholder of Standard Bank. The Bank also established correspondent banking relationships
+with 1,545 overseas banking institutions in 143 countries and regions, making its service network covering
+six continents and important international financial centers around the world. Among which, the Bank maintained
+129 institutions in 20 countries and regions along the Belt and Road.
+38
+ICBC
+The Bank's global service network is maturing with Prague Branch and Mongolia Representative Office opening for
+business officially and Zurich Branch in Switzerland granted the license. Saint Petersburg Branch of Bank ICBC (JSC)
+and the Houston-based institution affiliated to ICBC (USA) started business successively, further enhancing the layout
+of local service network overseas. The Bank also unveiled ICBC Asset Management (Global) Company Limited in
+Hong Kong, creating a unified global asset management platform for the Group.
+90.2
+92.0
+94.9
+%
+Internet Financing
++
++
+The Bank adopted the whole-industry-chain financing model, extended the financing services to the end of industries,
+and met the financing demands of suppliers, dealers and the end individual customers.
+The Bank innovatively launched the financing product pledged with the assets in the online bill pool, further expanded
+the types of pledge for online pledge by corporate customers, and improved the functions in the internet financing
+system.
+At the end of 2017, internet financing balance exceeded RMB840 billion.
+Payment
++
++
+The Bank rolled out the first QR code payment product in the banking industry, covering catering, shopping, express
+delivery and other small-amount payment scenarios. It also cooperated with Beijing and Wuhan subway groups on
+mobile payment, making it the first commercial bank in China that supports paying for subway ride by scanning
+QR code on mobile phone.
+The payment scenarios of "ICBC e-Payment" further expanded, covering scenarios such as payment of water,
+electricity, gas and heating bills and social security, thus making customers' lives more convenient.
+The Bank is the first in the banking industry to launch a 7x24-trading wealth management product for corporate
+customers, "Corporate e-Moneylink", on which corporate customers can conduct wealth management and investment
+on internet platforms.
+Investment and Wealth Management
+The new version of corporate internet banking achieved the comprehensive upgrade in transaction procedure
+streamlining, convenient operation and friendly interaction by launching customized frequently-used functions,
+simplified menu, intelligent search and other functions.
+The Bank innovatively launched the intelligent investment consultation product Al Investment in wealth management,
+which applied Al and big data technologies and quantitative investment models, and rendered customers with fund
+portfolio recommendation and dynamic position adjustment and other services.
+36
+ICBC
+Discussion and Analysis
+Channel Development and Service Enhancement
+Channel Development
++
+4
+4
++
+The geographic distribution of outlets was constantly improved. The Bank continued to focus on "adjusting structure,
+improving business forms and efficiency", and highlighted key branches, cities and outlets. It formulated the Plan
+for Improving Outlet Distribution for 2018-2020, constantly increased the match between outlet resources and
+customer demands, financial resources, and enhanced the capacity of service supply to key regions and main customer
+segments. It sped up the formulation of outlets community-based management system, and built bigger, better
+and stronger core outlets while scaling-down, refining and activating small-sized outlets to realize the synergy and
+complementation of the outlets in terms of business forms and functions.
+Intelligent service model was popularized at outlets comprehensively. The Bank made smooth progress in building
+intelligent outlets, continued to improve intelligent service processes and functions and drove the transformation of
+marketing services at outlets. It added the menu fuzzy inquiry, account opening for enterprises, face-recognition-
+assisted card issuance, security medium management and other intelligent service functions. It researched, developed
+and rolled out ATM for passbooks, portable intelligent terminal,
+upgraded intelligent receiving machine and other new equipment,
+which effectively improved customer experience in
+intelligent services.
+The outlets' transformation towards integrated online and offline
+development was pushed ahead. The Bank continued to diversify
+and improve the entrances of new channels and related tools such
+as channel-based QR code, outlet WiFi, outlet mini programs,
+launched joint promotional activities for new products, and set
+up a fresh three-dimensional marketing model characterized by
+promotions on multiple interfaces such as staff, outlet, self-service
+equipment and mobile applications, and interconnections both
+online and offline.
+Proportion of Internet Financial Transaction
+The Bank continued to improve the internet banking channel, added functions such as foreign exchange trading
+quotation, interest rate swaps, etc., and further increased the types of agency commodities trading for corporate
+customers. It had completed the building of a leading agency trading system for corporate customers in China which
+has multiple channels, a complete range of product lines, multiple models and whole-process management.
++
+At the end of 2017, the Bank had 16,092 outlets, 27,196
+self-service banks and 95,043 ATMs whose trading volume
+amounted to RMB11,861.1 billion. In 2017, the internet financial
+transaction amount' hit RMB646 trillion; the number of internet
+financial transactions accounted for 94.86% of total transactions
+of the Bank, rising by 2.86 percentage points from last year.
+Money Market Activities
+Notes: (1)
+"Percentage" refers to the proportion against domestic branch loans.
+(2) Small and micro enterprises loans include loans granted to small and micro enterprises, loans to privately or individually-owned
+business and loans to small and micro enterprise owners.
+Institutional Banking
++
++
+The Bank secured the opening of provincial accounts in 26 or 68% of the 38 central governments as well as provinces
+(autonomous regions or municipalities) which have commenced the pension insurance reform of governmental
+agencies and administrative institutions, ranked the first in the banking industry in terms of the new accounts opening
+for receipts and payments accounts, the special fiscal accounts and the occupational annuity fund pooling account.
+The Bank was in the first place in the banking industry in terms of the fiscal revenue and expenditure agency business,
+boasted the most extensive coverage and the largest volume of cross-province traffic fine payments, and was the
+largest investor in the local debt investment market by value.
+The Bank actively promoted interbank business and maintained its position as the No. 1 in the market of banking
+institutions by the financial bonds it underwrote. It had seven new domestic correspondent banks and 13 cooperative
+banks on the bank-to-bank platform, and signed the cooperative agreements on entrusted sales of wealth
+management products with 14 banking institutions. The Bank became qualified for custody of crude futures and many
+other businesses abroad.
+Settlement and Cash Management
++
+The Bank actively explored the new methods of combining corporate sector with internet-based finance, actively promoted
+product and service innovation in a user-centric way, accelerated the development of intelligent corporate customer
+services, and released the "intelligent account opening" service for corporate customers. The Bank expanded the customer
+scale, improved customer quality and cemented customer base via such platforms as Industrial and Commercial Enterprise
+Link, Small and Micro Enterprise Platform, ICBC e-Payment and Large-amount Fund Flow Monitoring.
+Annual Report 2017
+29
+Discussion and Analysis
++
+The innovation of global cash management services enabled the business to grow fully at home and abroad. The
+Bank proactively provided customers with a full package of financial solutions covering six product lines, namely,
+account information, collection and payment, liquidity management, investment and financing and risk management,
+constructed a three-level services structure covering the "Head Office, regional centers, domestic and overseas
+institutions", enhanced the efficiency of customer marketing and service response in all regions, developed the
+integrated, professional RMB and foreign-currency financial services system in which the customer demand after
+accessing at any point abroad can be responded to all over the globe immediately, and strongly supported the global
+operation and development of enterprises.
+At the end of 2017, the Bank maintained 7,489 thousand corporate settlement accounts, representing an increase
+of 7.6% over the end of the previous year, and the volume of settlements reached RMB2,563 trillion, up 5.5% over
+the previous year. The Bank maintained its leading position in the business size. There were 1,381 thousand cash
+management customers and 6,388 global cash management customers. The latter represented an increase by 10.8%
+from last year.
+International Settlement and Trade Finance
++
+The Bank promoted the expansion of international business customers, and launched the special marketing campaign
+of "customer expansion and quality improvement" over the enterprises in the customs system. The marketing over
+foreign sovereign customers was strengthened so that lots of such customers selected the Bank to do their bond
+settlement agency, foreign exchange trading agency, asset management and asset custody business.
+Efforts were made to accelerate the online transformation and innovation, and promote the deep integration of
+international business with internet. The Bank sped up its development in the international business e-system, and
+promoted the development and rollout of the cross-border remittance project of corporate internet banking. The
+Bank launched the non-local presentation of documents in the Bank-Enterprise Interlink System and the SWIFT direct
+connection, among other functions, for key customers, which enhanced the intensive business processing efficiency
+and the personalized customer services capability.
+In 2017, domestic branches disbursed an aggregate of USD66,730 million in international trade finance. International
+settlements registered USD2.8 trillion, of which USD1.1 trillion were handled by overseas institutions.
+Investment Banking
++
+4
++
+The Bank expanded its merger and acquisition advisory business by successfully carrying out domestic and foreign
+merger and acquisition projects such as Vanke's acquisition of the asset package of Guangdong International Trust
+and Investment Co., Ltd., and Anhui Zhongding Group's acquisition of the Germany-based Tristone Flowtech.
+17.3
+2,034,043
+17.4
+2,219,583
+4
++
++
++
+With a multi-tiered, extensively-covered institutional system of inclusive finance in place, the Bank designated the
+Strategy Committee under the Board of Directors to take on the functions of the Inclusive Finance Development
+Committee, set up the Inclusive Finance Promotion Committee at the senior management and established the inclusive
+finance department at the branches.
+The Bank promoted the specialized business model of small and micro enterprise banking centers in an all-around
+way, and established 234 such centers, adopting batch-based, standardized and one-stop services mode to improve
+efficiency and capability.
+The Bank strengthened product innovation in reliance of internet, enriched scenario-based risk control and credit
+approval models, achieved online and intelligent credit review and approval, researched and developed online
+mortgages and online petty loan products.
+The Bank received the title of the "2017 SME Service Bank with Excellent Competitiveness" from China Business Journal.
+LOANS TO DOMESTIC SMALL (MICRO) AND MEDIUM-SIZED ENTERPRISES
+At 31 December 2017
+In RMB millions, except for percentages
+At 31 December 2016
+Percentage
+Percentage
+The Bank developed the new business models of debt financing consultation by achieving a success in various
+structured financing and liquidity debt financing projects, e.g. rail transport construction in Guiyang and shantytown
+reconstruction in Urumqi.
+Item
+(%)
+Amount
+Loans to small (micro) and medium-sized enterprises
+5,166,632
+40.6
+4,803,727
+41.0
+Medium-sized enterprises
+2,947,049
+23.2
+2,769,684
+23.7
+Small and micro enterprises
+Amount
+The Bank conducted the equity financing advisory business, improved the operational efficiency of state-owned assets,
+and successfully completed a batch of equity financing projects which were significantly influential in the market for
+China Internet Investment Fund, CASC Guochuang Fund, Lu'an Group and Zhongyundian.
+(%)
+30
+The Bank earnestly implemented the account classification requirement, accelerated the transformation of mobile
+payment products, expanded the benefits of cards, and further enhanced payment security. The debit card business
+development was sound and good.
+The Bank successively released a series of new credit card products such as Tuniu Card, Constellation Card, Fighting
+Card, Car Lover Plus Card, Minions Card, Military Spirit Card and Teacher Card, which featured with precise
+positioning and diversified benefits.
+The Bank introduced "ICBC Easy Loan", a purely credit-based online personal consumption loan product, which
+disbursed loans of RMB98,315 million accumulatively in 2017. The "ICBC Easy Loan" won the "Top 10 Internet
+Financial Products: Innovation Award" granted by The Chinese Banker.
+At the end of 2017, the Bank issued 908 million bank cards, representing an increase of 80.96 million cards compared
+with the end of the previous year. Among which, 765 million debit cards and 143 million credit cards were issued.
+Overdraft balance of credit cards rose by RMB82,737 million or 18.3% from the end of previous year to RMB534,776
+million. In 2017, bank cards registered a consumption volume of RMB6.7 trillion, including RMB4.3 trillion of spending
+with debit cards and RMB2.4 trillion of spending with credit cards.
+Asset Management Services
+Seizing the opportunities arising from customers' wealth increase and capital market growth, the Bank made efforts to establish
+a mega asset management business system across the whole value chain and leveraged its strength of the Group's asset
+management, custody, pension businesses, and the functions of its comprehensive subsidiaries specialized in fund, insurance,
+leasing and investment banking. Thus, the Bank rendered diversified and integrated professional services for its customers.
+Wealth Management Services
++
++
+The Bank kept expanding the product lines of personal wealth management, innovatively rolled out "An Xiang Chang
+Ying", "Xin An Li De", "Cai Xin Tong", etc. wealth management products, to give more choices to customers to
+satisfy their differentiated needs in investment cycle.
+The Bank developed wealth management services for corporate customers to serve the real economy and prevent and
+control financial risks. It launched "e-Moneylink" and "Free e" wealth management products for cash management
+targeted at medium, small and micro enterprises, improved the transaction interface on the internet banking, mobile
+banking and the financial service platform for small and micro enterprises to render better customer experience in
+wealth management services and to increase transaction efficiency. It also enhanced its capacity in preventing and
+controlling business risks with new technologies, and rolled out online verification services for product authenticity in
+an effort to safeguard customers' funds security.
+ICBC Asset Management (Global) officially opened, which becomes the center in investment research, products, sales
+and risk control for ICBC's global asset management business development.
+At the end of 2017, the balance of stock wealth management products increased by 11.4% compared with last year
+to RMB3,012,084 million, remaining the largest in the industry.
+Bank Card Business
+Asset Custody Services
+32
+The Bank had developed a sound asset custody product and service system, and remained a market leader in respect
+of custody products, e.g. securities investment funds, insurance, banking wealth management, enterprise annuities,
+special fund accounts and global asset custody.
+The Bank successfully became the custodian of the first public FOF fund in the market, obtained the custody
+qualification for the first domestic occupational annuity fund pooling account and the entrustment of custodianship
+from International Monetary Fund QFII, INVESCO and Fidelity's domestic WFOE privately offered funds.
+ICBC
+Discussion and Analysis
+Pension Services
++
++
+Relying on its advantages in diversified operation, the Bank constantly improved its pension services system which
+covered enterprise annuity, occupational annuity, social security fund, comprehensive pension security fund of
+enterprises and public institutions, individual pension and other fields.
+The Bank won the bid for the first national occupational annuity contract and 181 bids for enterprise annuity
+contracts, and renewed enterprise annuity contracts with a number of key customers.
+At the end of 2017, the pension funds under the Bank's trusteeship amounted to RMB107.9 billion; the Bank
+managed 17.30 million individual pension accounts, and the pension funds under the Bank's custody totaled
+RMB501.6 billion. The Bank led other banks in terms of the scale of enterprise annuity funds under the Bank's
+trusteeship, number of individual enterprise annuity accounts and enterprise annuity funds under the Bank's custody.
+The Bank actively developed its bond underwriting business and underwrote 1,497 domestic and overseas debt
+financing instruments with a total value of RMB1,293,778 million as the lead underwriter throughout 2017. The bonds
+which the Bank underwrote as the lead underwriter in the domestic market account for 13.26% of the market share,
+preserving its No. 1 position in the market.
+Financial Market Business
++
+Discussion and Analysis
+At the end of 2017, total net value of assets under the Bank's custody amounted to RMB15.5 trillion.
+Annual Report 2017
+Discussion and Analysis
+ICBC
+31
+Personal Banking
+In 2017, the Bank continued to push forward the mega retail strategy, and spared no effort to promote the transformation
+and upgrade of retail strategy intelligently by capturing the opportunity of residents' consumption structure upgrade and
+increasing demand, actively using the internet thinking, and exploring how to achieve deep integration of new technologies
+such as big data and artificial intelligence with traditional banking business.
++ The Bank further deepened the application of big data analytical technology, continued to improve and promote the
+customer profile function in an all-around manner, and formed an online and offline integrated system of precise
+marketing with multiple contact points.
+4
+4
++
+The Bank optimized and promoted the "ICBC Cloud Manager" services, and rendered a variety of specialized financial
+services, e.g. information consultation, product recommendation and inquiries, to customers remotely through ways
+such as ICBC Link, telephone and SMS.
+The Bank continued to deepen the innovation of "ICBC Salary Manager"'s function, a payroll payment agency
+product, and improved the level of customer services, it released some innovative personal deposit products, e.g. "Tian
+Tian Hui" "Salary Premium No. 3".
+The Bank earnestly implemented the city-specific and differentiated residential mortgages policy, developed personal
+loan business stably, in order to meet the residents' demand of funding for owner-occupied houses; it innovatively
+developed the personal consumption loan business by releasing successively personal consumption loan for home
+improvement, personal cultural consumption loan, personal loan for overseas study, and comprehensive personal
+home mortgage consumption loan, etc.
+The Bank strengthened fund agency products and business
+innovation, and co-published the market's first-ever bank-customized
+fund index with China Securities Index Co., Ltd., which made the
+Bank's fund agency business brand more influential; it found target
+customers with low risk appetite in view of the yield characteristics
+of treasury bond products; it stepped up cooperation with insurance
+companies, and promoted the transformation of insurance agency
+business. Sales of funds, treasury bonds and personal insurance
+products under agency arrangement totaled RMB923.2 billion,
+RMB65.3 billion and RMB136.4 billion respectively in 2017.
+At the end of 2017, personal financial assets totaled RMB13.0
+trillion, representing an increase of RMB781.7 billion compared
+with the end of last year. Meanwhile, the Bank had 567 million
+personal customers, including 12.26 million personal loan customers,
+representing an increase of 37.58 million and 0.93 million
+respectively. The personal loans stood at RMB4,945,458 million,
+representing an increase of RMB749,289 million or 17.9%.
+The personal deposits arrived at RMB8,380,106 million, representing
+an increase of RMB239,825 million or 2.9%.
+Personal Loans
++
+35,419
+At the end of 2017, the Bank maintained 75,500 private banking customers, representing an increase of 5,431 or
+7.7% from the end of the previous year. Assets under management amounted to RMB1.34 trillion, growing
+by RMB126.6 billion or 10.7% from the end of the previous year.
+Unit: RMB100 millions
+Accelerated innovation in wealth management products independently developed by the private banking segment,
+released product as Lucky Bag series and Absolute Win series.
++
+Private banking business of overseas institutions experienced sustained growth, and were able to provide green
+account opening, asset allocation, credit facility and value-added services for customers in 21 overseas countries and
+regions. ICBC (Asia) and ICBC (Macau) increased their private banking customers to more than 1,000 successively.
+Private Banking
++
+2016
+2015
+49,455
+41,962
+2017
+Zurich Branch (Switzerland) ------ 1
+47
+America
+ICBC (USA) (USA)--
+Asia-Pacific Region (except
+Hong Kong and Macau)
+Institution
+(country/region)
+ICBC Turkey (Turkey)-
+Number of
+Institution
+Singapore Branch (Singapore)------- 11
+ICBC (Peru) (Peru)------
+ICBC (Mexico) (Mexico)
+Number of
+(country/region)
+institutions
+3
+New York Branch (USA)-
+1
+institutions
+Bank ICBC (JSC) (Russia)-
+1
+2
+1
+Frankfurt Branch (Germany) -----5
+16
+London Branch (UK).
+Prague Branch
+(Czech Republic)-
+ICBC Standard (UK)-----
+10
+ICBC (Europe) (Luxembourg)-----1
+ICBC (London) (UK)-
+Paris Branch (France)------
+1
+Madrid Branch (Spain)-
+2
+Milan Branch (Italy)-
+2
+Amsterdam Branch
+(the Netherlands)-
+2
+Brussels Branch (Belgium).
+Warsaw Branch (Poland)-
+ICBCFS (USA) ------
+®
+ICBC (Canada) (Canada)
+E
+Riyadh Branch (Saudi Arabia)-
+1
+Africa
+Hong Kong and Macau
+Institution
+Number of
+(country/region)
+institutions
+Dubai (DIFC) Branch (UAE)--
+Kuwait Branch (Kuwait).
+Karachi Branch (Pakistan)-
+Mumbai Branch (India)
+1
+1
+3
+1
+ICBC (Malaysia) (Malaysia).
+(Luxembourg)
+6
+1
+Abu Dhabi Branch (UAE).
+1
+1
+8
+ICBC (Argentina) (Argentina) --113
+ICBC (Brazil) (Brazil) -------
+1
+1
+1
+Tokyo Branch (Japan)------
+3
+Seoul Branch (South Korea):
+1
+3
+1
+(ES)
+Hanoi Branch (Vietnam)-
+1
+Vientiane Branch (Lao PDR)
+1
+Phnom Penh Branch (Cambodia)
+1
+Yangon Branch (Myanmar) -
+Doha Branch (Qatar)-
+Busan Branch (South Korea)
+Luxembourg Branch
+(except Hong Kong and
+(country/region)
+Asia-Pacific Region
+84,346
+69,935
+783
+567
+89
+87
+Macau)
+Europe
+69,933
+58,317
+273
+140
+81
+80
+America
+66,745
+64,723
+586
+108
+106
+1,646
+1,850
+ICBC (Indonesia) (Indonesia) ·
+Discussion and Analysis
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+Assets
+Profit before tax
+(in USD millions)
+(in USD millions)
+At the end At the end
+Number of institutions
+582
+At the end At the end
+of 2017
+of 2016
+2017
+2016
+of 2017
+of 2016
+Hong Kong and Macau
+178,045
+159,445
+Item
+institutions
+142
+Africa Representative Office
+412
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before tax represents the Bank's gain
+on investment recognized by the Bank during the reporting period.
++
+As at the end of 2017, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD358,597 million, an increase of USD52,147 million or 17.0% from the end of
+the previous year, and they accounted for 9.0% of the Group's total assets, increased by 0.2 percentage points. Profit
+before tax during the reporting period was USD3,918 million, increasing by USD671 million or 20.7% compared with
+the end of the previous year and representing 7.0% of the Group's profit before tax, increased by 0.8 percentage
+points. Total loans amounted to USD216,360 million, rising by USD40,489 million or 23.0%, and due to customers
+totaled USD120,424 million, increasing by USD23,201 million or 23.9%.
+Diversified Operation
++
+On the basis of fully implementing regulatory requirements and strictly controlling risks, ICBC Credit Suisse Asset
+Management enhanced the strategic synergy of the Group, continuously strengthened its core competitiveness in
+research and investment, kept expanding the product line and improving customer service level, and maintained a
+steady growth in asset management scale.
+By striving to accelerate transformation and development and effectively enhancing its internal management, ICBC
+Leasing achieved a steady growth in businesses, maintained stable asset quality, and continued to improve its business
+performance.
+By actively promoting the development of health and protection insurance services, ICBC-AXA achieved a stable
+growth in premium income and ensured continuous improvement of its business structure. It also adhered to the
+customer-centric concept, creating a sound customer service system. Furthermore, by building a data platform and
+optimizing business systems, ICBC-AXA worked hard to realize refined management and scientific decision-making.
+ICBC International's four major businesses, i.e. investment banking, sales and transaction, investment management
+and asset management developed in line with the business development strategies of the Group. Its business
+performance grew rapidly and its brand image and market influence enhanced significantly.
+ICBC Investment opened for business on September 26 in Nanjing, Jiangsu Province. As one of the first commercial
+banks in China to conduct debt-for-equity swap, it gave full play to the advantage of integrated financial services and
+effectively promoted the implementation of the market-oriented debt-for-equity swap project.
+Annual Report 2017
+39
+40
+ICBC
+Discussion and Analysis
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+E
+Institution
+Number of
+419
+3,247
+3,918
+306,450
+1
+1
+Eliminations
+(44,757)
+(49,741)
+Subtotal
+354,312
+302,679
+3,492
+136
+2,935
+412
+Investment in Standard
+4,285
+3,771
+426
+312
+Bank(1)
+Total
+358,597
+419
+21
+Corporate Banking
+Department
+Number of
+Business departments
+Personal Banking
+Department
+Institutional Banking
+Department
+Bank Card
+Department
+Department
+Global Market
+Department
+Chief Risk Officer
+Board of Directors
+President
+Board of Supervisors
+Risk Management Committee
+Audit Committee of
+of the Board of Directors
+Risk committee for
+institutions in the US
+the Board of Directors
+Enterprise risk, market risk,
+country risk
+Credit risk
+Senior Executive
+Vice Presidents
+Liquidity risk, interest rate risk
+of the banking book
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+Enterprise Risk Management System
++
++
+The whole group's safe production and operation was better managed. Therefore, despite the business volume has
+increased a lot, the Bank still reported the historically best and safest operation of information systems, and achieved
+normal local operation of data centers across years for the first time. The Bank carried forward the arrangements for
+the business system monitoring and intelligent operation and maintenance platform, popularized a series of tools on
+automatic operation and maintenance of changes, e.g. automatic deployment of system environment, and deployed
+the automatic switch tools in case of emergencies, e.g. database switch. The analysis and mining of production,
+operation and maintenance data was launched together with the realization of operation and maintenance service
+value in an effort to achieve progress in business and technological management. The Bank implemented the China
+Cyber Safety Act, set up the ICBC network and information safety notification mechanism, continued development
+of the information safety monitoring and response platform (SOC), establishment of the ICBC attack prevention drill
+system, and all-around enhancement of overall safety protection ability.
+The Bank accelerated the research and application of new technologies and the transformation of IT architecture. It set
+up seven innovation labs, made overall layout across each frontier of FinTech, actively explored application scenarios
+such as blockchain, artificial intelligence, Internet of Things and cloud computing, put in place the blockchain platform
+of Guizhou Anti-poverty Fund, applied the blockchain technology in promoting the transparent management of the
+funds for construction of Xiong'an New Area, rolled out "Al Investment", an intelligent investment adviser, and built
+the "ICBC Internet of Things Services Platform". While continuously promoting the transformation of IT architecture,
+the Bank became the first one in the banking industry to develop and use the platform cloud, and combined with
+the infrastructure cloud and the software-defined network to realize the dynamic management of basic computing
+resources and application resources. What's more, the Bank carried out the optimization and improvement of the
+host's application architecture, increased distributed application, developed own big data and cloud computing, and
+deepened the planning and design of IT blueprint, laying a foundation for the development of the new-generation
+smart banking information system (ECOS).
+The Bank pushed forward innovative services that cover all customers, all channels and all products. It propelled
+the upgrade of the internet-based financial strategy from e-ICBC 2.0 to the smart banking e-ICBC 3.0, successfully
+popularized the new-generation corporate internet banking, unified the "ICBC e Payment" brand, and made debut
+the "ICBC Easy Loan" product. It quickened the development of the internet-based financial ecosphere, released
+a new version of ICBC e Life, completed the development of a unified "Cloud Quick Pay" APP, and launched
+an innovative digital banking called "ICBC Xiao Bai". The development of systems for internationalization and
+diversification was advanced; BRAINS, the new overseas anti-money laundering system, was rolled out at 23 overseas
+institutions; Bank ICBC (JSC) became the first RMB clearing bank of ICBC using an overseas platform's core system;
+and ICBC Leasing released the new-generation core system for leasing business.
+2017 marked the fourth consecutive year for the Bank to rank the first in the banking industry in the information
+technology supervisory rating of CBRC. The Bank had four research findings that won the 2017 IT Risk Management
+Research Project Award of CBRC, and eight scientific and technological achievements that won the Banking
+Technological Development Award of PBC. The Bank obtained 50 patents from the State Intellectual Property Office,
+and the total number of patents owned by the Bank increased to 506.
+Institution
+45
+Discussion and Analysis
+Human Resources Management
+4
+The Bank continued the innovation in the philosophy, methodology, system and mechanism of the Group's human
+resources management towards the goal of stimulating operating vitality, enhancing market competitiveness and
+strengthening risk control. Efforts were made to deepen the official system reform, improve the organizational
+structure management, promote the organizational model innovation, optimize the personnel structure, reinforce
+the remuneration-based incentives and constraints, strengthen the building of talents teams, and expand the career
+growth platforms of employees for the purpose of providing a strong organizational guarantee and talents support for
+the whole bank's reform and development.
+The Bank closely followed the strategic deployment of the CPC Central Committee in actively establishing Xiong'an
+Branch. Responding to the call of the government for encouraging medium and large-sized commercial banks to set
+up inclusive finance department, such department was built at the Head Office and across branches. The E-finance
+Department was set up to promote the implementation of the smart banking strategy throughout the Bank. The
+Remote Banking Center was also set up to further improve the level of customer services.
+In accordance with the communication and implementation of group strategies, the Bank made an overall
+arrangement for domestic and overseas trainings, all-staff training and cultivation of professionals. Specifically,
+it advanced the diversified combination and the integrated operation of overseas trainings, and incorporated the
+training of overseas employees into the Group's unified management framework. In line with new ideas and new
+requirements, it extended the reach of Party school training to the grassroots operations. The Bank also strengthened
+the development of mobile learning resources, and optimized the professional qualification examination and
+certification system. In 2017, the Bank organized 49 thousand sessions of training for 5.67 million employees,
+averaged to approximately 9.9 days of training per employee.
+The Bank put up the corporate cultural system on all fronts under the guidance of the core socialist values. It strongly
+advocated and acted according to the "craftsmanship", launched a series of activities in the theme of Integrity,
+Compliance and Service cultures, and laid down the cultural foundation for preventing risks, improving services
+and promoting development. It rebuilt the Credit culture in a bid to break new ground for credit operation and
+development under the new normal of economy. It improved the long-effective mechanism of characteristic culture
+cultivation at outlets and injected new cultural vigor into the whole bank's transformation and development. In
+addition, the Bank carried out the cultural promotion month of "ONE ICBC, ONE FAMILY" among the overseas
+institutions, and rolled out the project of "That's China That's ICBC" worldwide in order to assist the internationalized
+strategy through cultural integration, thereby creating a new model for Chinese enterprises to actively assume social
+responsibilities and for the Chinese culture to "Go Global".
+46
+ICBC
+RISK MANAGEMENT
+Discussion and Analysis
+Enterprise risk management is a process to effectively identify, assess, measure, monitor, control or mitigate and report risks
+in order to ensure the realization of the Group's operating and strategic objectives by setting up effective and balanced
+risk governance structure, fostering robust and prudent risk culture, formulating unified risk management strategies and
+risk appetite, and implementing the risk limit and risk management policies. The principles of enterprise risk management of
+the Bank include full coverage, matching, independence, perspectiveness and effectiveness etc.
+4
+Risk Management
+Department
+Asset & Liability
+Management Department
+At the level of Head Office
+First line of defense
+Second line of defense.
+Primary reporting line
+Secondary reporting line
+Third line of defense-
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+In 2017, the Bank continued to push for development of the enterprise risk management system, upgraded risk
+management technologies and methods and enhanced the capacity of risk pre-judgment and dynamic adjustment
+capabilities, so as to make enterprise risk management more forward-looking and effective. The Bank improved the
+enterprise risk management system, strengthened development of the three lines of defense for risk management,
+intensified the management of risk appetite and risk limits and researched and monitored cross-financial risks in accordance
+with the latest regulatory requirements. The Group's consolidated risk management was properly carried out to boost
+the risk management capability of non-banking subsidiaries and advance unified management of tier-two subsidiaries.
+The credit risk measurement system was improved continuously for higher accuracy and stability, with internal ratings
+applied more broadly. The Group's market risk management was boosted to a higher level, with focus on strengthening
+market risk management of overseas institutions, fully implementing product control requirements, deepening risk
+management of the wealth management business and intensifying investment management of wealth management and
+market risk limit management. Country risk management was continuously deepened to strengthen country risk monitoring
+and analysis and limit management, enhance the capability of sovereign risk management and provide strong supports for
+implementing the Bank's internationalization strategy.
+Annual Report 2017
+47
+Discussion and Analysis
+Credit Risk
+Credit Risk Management
+Credit risk is the risk that loss is caused to banking business when the borrower or counterparty fails to meet its contractual
+obligations. The Bank's credit risks mainly originate from loans, treasury operations (including due from banks, placements
+with banks, reverse repurchase agreements, corporate bonds and financial bonds investment), receivables and off-balance
+sheet credit business (including guarantees, commitments and financial derivatives trading).
+The Bank strictly adheres to the guidance from CBRC regarding credit risk management and other regulatory requirements,
+diligently fulfills established strategies and objectives under the leadership of the Board of Directors and the Senior
+Management, and implements an independent, centralized and vertical credit risk management mode. The Board of
+Directors assumes the ultimate responsibility for the effectiveness of credit risk management. The Senior Management is
+responsible for executing the strategies, overall policy and system regarding credit risk management approved by the Board
+of Directors. The Credit Risk Management Committee of the Senior Management is the reviewing and decision-making
+organ of the Bank in respect of credit risk management, is responsible for reviewing material and important affairs of credit
+risk management, and performs its duty in accordance with the Working Regulations for the Credit Risk Management
+Committee. The credit and investment management departments at different levels undertake the responsibility of
+coordinating credit risk management at respective levels, and the business departments implement credit risk management
+policies and standards for their respective business areas in accordance with their functions.
+The Bank's credit risk management has the following characteristics: (1) Unified risk appetite. Unified credit risk appetite is
+implemented for the Bank's credit risk exposures. (2) Entire-process management. The credit risk management covers the
+entire process including customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and
+post-lending monitoring; (3) System management. It continues to enhance the building of credit information system, and
+improve the tools to manage and control credit risk; (4) Strict management over credits. Strict qualifications management is
+enforced on the business institutions and the credit practitioners; and (5) The special institution is set up to conduct unified
+risk monitoring over credit risk businesses.
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months for which the borrower is in default, anticipated
+loss rate, credit rating, collaterals and other quantitative and qualitative factors.
+◆ Credit Risk Management of Corporate Loans
+The Bank continued to strengthen the formation of the credit rule system. Global unified credit line management was
+continuously improved to strictly control the total risk in customer financing. The rules and measures for credit products
+were revised according to market changes and new risk characteristics. The Bank further strengthened the risk control over
+merger and acquisition investment and financing, loans to projects in operating period and fixed asset-backed financing.
+Guarantee and collateral management was strengthened by further refining the collateral management system, optimizing
+the operating procedures for collateralization and pledge, and enhancing the ability to mitigate essential collateral risks.
+Closely aligned with the implementation of major national strategic plans, the system of credit policies was continuously
+improved in line with macro-economic policies, industry policy orientations and characteristics of industry operation. Guided by
+the philosophy of green credit, the Bank strengthened the guiding role of credit policy in credit layout and credit restructuring.
+The Bank actively supported credit extension to key fields, key cities and high-quality customers and effectively controlled financing
+risk in major areas of cutting overcapacities. Overseas institutions were guided to seize opportunities in implementing the Belt and
+Road Initiative and the "Going Global" strategy, thereby fully exerting their strengths and characteristics, optimizing the allocation
+of credit resources and promoting the transformation and upgrading of overseas credit business.
+48
+ICBC
+At the level of branches
+Credit and Investment
+Management Department
+Internal Audit Sub-bureau
+Operational Risk
+Management Committee
+Internal Control &
+Operational risk, compliance risk Compliance Department
+Executive Office
+Reputational risk
+Strategic risk
+Office of Steering Group
+for Deepening Reform
+Legal risk
+Legal Affairs Department
+Board of directors of subsidiaries
+Management of Branches
+Senior management of subsidiaries
+Business departments of
+branches and subsidiaries
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+|
+Credit Risk
+Management Committee
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Market Risk
+Management Committee
+Internal Audit Bureau
+IT-based Banking Development
+Annual Report 2017
+STANDARD BANK GROUP LIMITED
+Controlled Subsidiaries and Major Equity Participating Company
+♦ Overseas Subsidiaries
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+ICBC (Asia) is a wholly-owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD36,379 million.
+It provides comprehensive commercial banking services and the major businesses include commercial credit, trade finance,
+investment service, retail banking, E-banking, custody, credit card, receiving bank services for IPOs and dividend distribution.
+At the end of 2017, ICBC (Asia) recorded total assets of USD115,026 million and net assets of USD11,734 million. It
+generated a net profit of USD994 million during the year.
+ICBC INTERNATIONAL HOLDINGS LIMITED
+ICBC International, a licensed platform providing comprehensive financial services in Hong Kong that is wholly-owned by the
+Bank, has a paid-up capital of HKD4,882 million. It mainly renders a variety of financial services, including investment banking,
+investment management, sales and transaction, asset management, etc. At the end of 2017, ICBC International recorded total
+assets of USD6,852 million and net assets of USD1,027 million. It generated a net profit of USD177 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2017, ICBC (Macau) recorded total assets of USD28,801 million
+and net assets of USD2,571 million. It generated a net profit of USD288 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR833 million,
+it is able to provide a full range of commercial banking services. At the end of 2017, ICBC (Malaysia) recorded total assets of
+USD1,202 million and net assets of USD253 million. It generated a net profit of USD18.74 million during the year.
+PT. BANK ICBC INDONESIA
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR3.69 trillion, in which ICBC holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loan, trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the end
+of 2017, ICBC (Indonesia) recorded total assets of USD4,028 million and net assets of USD425 million. It generated a net
+profit of USD20.41 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.07% ordinary shares of Standard Bank. Based on mutual
+benefit and win-win cooperation, the two sides further enhanced their mutual trust and understanding through personnel
+exchange and communication, and continued to maintain good cooperation in corporate and investment banking business,
+financial markets, international clearing and settlement, information technology and other fields. At the end of 2017,
+Standard Bank recorded total assets of ZAR2,027,928 million and net assets of ZAR190,017 million. It generated a net profit
+of ZAR26,235 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of
+KZT8,933 million. It principally engages in commercial banking services such as deposit, loan, international settlement and
+trade finance, foreign currency exchange, guarantee, account management, internet banking and bank card service. At the
+end of 2017, ICBC (Almaty) recorded total assets of USD317 million and net assets of USD57 million. It generated a net
+profit of USD7.81 million during the year.
+Annual Report 2017
+41
+Discussion and Analysis
+Discussion and Analysis
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+Europe
+1
+ICBC (Asia) (Hong Kong, China) 71
+(country/region)
+institutions
+Hong Kong Branch
+Investments in Standard Bank
+(Hong Kong, China).
+2
+(South Africa)
+(South Africa)-
+ICBC International
+ICBC (Thai) (Thailand) ----
+ICBC (Almaty) (Kazakhstan) ·
+Sydney Branch (Australia)-
+ICBC (New Zealand)
+24
+1
+4
+African Representative Office
+(Hong Kong, China).
+9
+ICBC (Macau) (Macau, China) -- 24
+(New Zealand)-----
+Mongolia Representative
+Office (Mongolia)-
+1
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD145.46 million.
+ICBC (New Zealand) provides corporate and personal banking services such as account management, transfer and
+remittance, international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the
+end of 2017, ICBC (New Zealand) recorded total assets of USD1,193 million and net assets of USD104 million. It generated a
+net profit of USD4.22 million during the year.
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a 97.86%
+stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade finance,
+remittance, settlement, leasing and consulting. At the end of 2017, ICBC (Thai) recorded total assets of USD6,324 million and
+net assets of USD860 million. It generated a net profit of USD51.76 million during the year.
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital of
+USD200 million, It provides banking services such as deposit and exchange, loan, trade finance, international settlement,
+funds clearing, agency, foreign exchange trading and retail business. At the end of 2017, ICBC (London) recorded total
+assets of USD2,432 million and net assets of USD398 million. It generated a net profit of USD21.80 million during the year.
+Annual Report 2017
+43
+Discussion and Analysis
+ICBC STANDARD BANK PLC
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million, in
+which the Bank holds a 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses such
+as base metals, precious metals, commodities and energy as well as global financial markets businesses such as exchange
+rate, interest rate, credit and equity. At the end of 2017, ICBC Standard Bank recorded total assets of USD23,800 million
+and net assets of USD1,282 million. It generated a net profit of USD29.71 million during the year.
+ICBC (LONDON) PLC
+Major Domestic Subsidiaries
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the Bank
+holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other businesses
+as approved by CSRC, and owns many business qualifications including mutual fund, QDII, enterprise annuity, specific asset
+management, domestic and overseas investment manager of social security fund, RQFII, insurance asset management,
+non-listed asset management, occupational annuity, manager of basic pension insurance investment. It is one of the fund
+companies with the most comprehensive qualifications in the industry. ICBC Credit Suisse Asset Management (International)
+and ICBC Credit Suisse Investment Management are structured under ICBC Credit Suisse Asset Management. As of the end
+of 2017, ICBC Credit Suisse Asset Management managed a total of 113 mutual funds and more than 570 enterprise annuity
+accounts and segregated management accounts as well as non-listed assets portfolios, with the assets under management
+amounting to almost RMB1.3 trillion, and recorded total assets of RMB7,735 million and net assets of RMB6,299 million. It
+generated a net profit of RMB1,839 million during the year.
+ICBC FINANCIAL LEASING CO., LTD.
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB11.0 billion. It mainly engages in financial
+leasing of large-scale equipment in key fields such as aviation, shipping, energy and power, rail transit and equipment
+manufacturing and provides a variety of financial and industrial services including retail assignment, investment funds,
+securitization of investment assets, assets transactions and management. At the end of 2017, ICBC Leasing recorded total assets
+of RMB314,894 million and net assets of RMB29,447 million. It generated a net profit of RMB3,568 million during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB12,505 million, in which the Bank holds a 60% stake.
+It engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and re-insurance
+of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the State, and other
+businesses approved by China Insurance Regulatory Commission. At the end of 2017, ICBC-AXA recorded total assets of
+RMB116,187 million and net assets of RMB11,854 million. It generated a net profit of RMB624 million during the year.
+ICBC FINANCIAL ASSET INVESTMENT CO., LIMITED
+With a paid-in capital of RMB12.0 billion and commencing operation in Nanjing, Jiangsu Province on 26 September 2017,
+ICBC Investment is a wholly-owned subsidiary of the Bank and one of the first pilot banks in China to conduct debt-for-
+equity swap authorized by the State Council. It holds the franchise license of non-bank financial institution and is mainly
+engaged in debt-for-equity swap and the supporting business. At the end of 2017, ICBC Investment recorded total assets of
+RMB12,227 million and net assets of RMB12,193 million. It generated a net profit of RMB85.70 million during the year.
+44
+ICBC
+Discussion and Analysis
+Majority Equity Participation Company
+ICBC (Turkey), a subsidiary of the Bank in Turkey, has a share capital of TRY860 million, in which the Bank holds a 92.84%
+stake. It holds commercial banking, investment banking and asset management licenses, and provides corporate customers
+with comprehensive financial services including deposit, project loan, syndicated loan, trade finance, small and medium-
+sized enterprise loan, investment and financing advisory, securities brokerage and asset management, and renders personal
+customers with financial services such as deposit, consumption loan, residential mortgages, credit card and E-banking. At the
+end of 2017, ICBC (Turkey) recorded total assets of USD3,503 million and net assets of USD295 million. It generated a net
+profit of USD12.65 million during the year.
+ICBC TURKEY BANK ANONIM ŞIRKETI
+.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN1,597 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) offers corporate deposit, loan, international settlement, trade finance, foreign
+exchange trading and other services. ICBC (Mexico) recorded total assets of USD253 million and net assets of USD71 million at the
+end of 2017.
+BANK ICBC (JOINT STOCK COMPANY)
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB10,810 million.
+It mainly provides a full spectrum of corporate banking services including corporate and project loan, trade finance, deposit,
+settlement, securities brokerage, custody, franchise treasury business and securities trading, foreign currency exchange, global
+cash management, investment banking and corporate financial consulting, as well as personal banking services. At the end of
+2017, Bank ICBC (JSC) recorded total assets of USD843 million and net assets of USD240 million. It generated a net profit of
+USD19.01 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD309 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services.
+At the end of 2017, ICBC (USA) recorded total assets of USD2,349 million and net assets of USD333 million. It generated a
+net profit of USD12.16 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers securities brokerage services including securities
+clearing and financing for institutional customers. At the end of 2017, ICBCFS recorded total assets of USD31,924 million
+and net assets of USD157 million. It generated a net profit of USD17.74 million during the year.
+ICBC
+42
+ICBC (Europe), a wholly-owned subsidiary bank of the Bank, was incorporated in Luxembourg with a paid-up capital of
+EUR437 million. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and Warsaw Branch are
+structured under ICBC (Europe), which mainly offers financial services including loan, trade finance, settlement, treasury,
+investment banking, custody, franchise wealth management, etc. At the end of 2017, ICBC (Europe) recorded total assets of
+USD8,152 million and net assets of USD721 million. It generated a net profit of USD4.14 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+Discussion and Analysis
+ICBC PERU BANK
+ICBC (Brasil), a wholly-owned subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million. ICBC (Brasil) offers
+commercial banking and investment banking services such as deposit, loan, trade finance, international settlement, fund
+transaction, franchise wealth management and financial advisory. At the end of 2017, ICBC (Brasil) recorded total assets of
+USD325 million and net assets of USD65 million. It generated a net profit of USD0.30 million during the year.
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD50.00 million. Holding a full-
+functional commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement,
+trade finance, foreign exchange trading, E-banking and other services. At the end of 2017, ICBC (Peru) recorded total assets
+of USD209 million and net assets of USD31 million. It generated a net profit of USD1.44 million during the year.
+ICBC (Argentina), a controlled subsidiary of the Bank in Argentina, has a share capital of ARS1,345 million, in which the
+Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) provides a full range of
+commercial banking services including working capital loan, syndicated loan, structured financing, trade finance, personal
+loan, auto loan, spot/forward foreign exchange trading, financial markets, cash management, investment banking, bond
+underwriting, asset custody, leasing, international settlement, E-banking, credit card, asset management, etc. At the end of
+2017, ICBC (Argentina) recorded total assets of USD5,630 million and net assets of USD642 million. It generated a net profit
+of USD149 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD158.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) provides corporate and retail banking
+services such as deposit, loan, settlement and remittance, trade finance, foreign exchange trading, funds clearing, cross-
+border RMB settlement, RMB currency notes, cash management, E-banking, bank card and investment and financing
+information consulting service. At the end of 2017, ICBC (Canada) recorded total assets of USD1,419 million and net assets
+of USD197 million. It generated a net profit of USD17.89 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+NPL ratio
+Percentage
+NPLs
+Percentage
+Loan
+NPL ratio
+NPLs
+Loan
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+At 31 December 2017
+In RMB millions, except for percentages
+Discussion and Analysis
+The increase of NPLs in the manufacturing was principally driven by macroeconomic fluctuations and weakened domestic
+and overseas demands, which led to a rise in defaults on loans by some light-industry manufacturers as well as enterprises
+in highly cyclical industries and some industries with overcapacities. The increase of NPLs in the transportation, storage and
+postal services was mainly caused by emergencies as well as other factors, and some enterprises defaulted on loans due to
+operating difficulties and financial stress.
+Annual Report 2017
+51
+Item
+At 31 December 2016
+(%)
+340,482
+(%)
+Market Risk
+The Bank continued to strengthen risk management of the asset management business of the Group. Internal rules and
+regulations were implemented and revised timely in line with regulatory policies. Administrative measures were formulated
+for agency portfolio funds, debt-for-equity swap, wealth management and investment of unsecured bonds. Measures for risk
+management of non-standard agency debt and equity investment were revised to create a comprehensive and differentiated
+management framework for agency investment. The annual risk authorization plan was improved for non-standard agency
+investment. The asset management business management system functions were optimized to enhance rigid system control
+of risk management.
+Risk Management of Asset Management Business
+Discussion and Analysis
+53
+Annual Report 2017
+2.4
+341,322
+0.1
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, and stock price and commodity prices). The Bank is primarily exposed
+to interest rate risk and currency risk (including gold).
+17,881
+0.1
+18,257
+Transportation, storage and postal services
+Borrower I
+Borrower J
+Total
+0.1
+18,372
+Transportation, storage and postal services
+Borrower H
+0.1
+Transportation, storage and postal services
+18,798
+Market risk management is the process of identifying, measuring, monitoring, controlling and reporting market risk for
+the purposes of setting up and enhancing the market risk management system, specifying responsibilities and process,
+determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+In 2017, the Bank continued to strengthen consolidated management of market risk and persistently enhanced the
+management and measurement of market risk at the Group's level. The Group's market risk management system was
+further improved, with the administrative measures for market risk stress testing, among others, revised to deepen classified
+management and sophisticated management of institutions. Market risk limit management of the Group was strengthened
+through improved measures for determining limits for new products and services as well as limit monitoring and analysis.
+The Bank pushed forward the overseas expansion of the Global Market Risk Management (GMRM) system and strengthened
+the core application of the system among overseas institutions.
+55
+Annual Report 2017
+As at the end of 2017, the Bank had a negative cumulative interest rate sensitivity exposure within one year of RMB206,614
+million, representing a decrease of RMB214,081 million from the end of the previous year, mainly caused by the increase in
+repriced or matured loans and advances to customers within one year. Cumulative interest rate sensitivity positive exposure
+over one year stood at RMB2,041,096 million, representing an increase of RMB22,281 million.
+♦ Interest Rate Risk Analysis
+Market Risk Analysis
+The Bank continued to strengthen and improve trading-book market risk management and product control. Risk
+measurement of trading-book products were managed with value at risk (VaR), stress testing, sensitivity analysis, exposure
+analysis, profit/loss analysis and price monitoring. The transaction portfolio-based market risk limit management system
+was continuously improved. The three-tier limit approval mechanism composed of the Board of Directors, the Market Risk
+Management Committee of the Head Office and business departments were improved. Quick and flexible limit monitoring
+and dynamic adjustments were realized based on the global market risk management system. For VaR of the trading book of
+the Bank, please refer to "Note 54. (c)(i) to the Financial Statements: Value at Risk (VAR)".
+Market Risk Management of the Trading Book
+The Bank's objective of currency risk management is to control the impact of exchange rate fluctuations on the Bank's
+financial position and shareholders' equity within a tolerable extent. The Bank mitigates such risk principally by limit
+management and hedging of risks. The Bank carries out sensitivity analysis and stress testing of currency risk on a quarterly
+basis, and submits currency risk reports to the Senior Management and the Market Risk Management Committee.
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities.
+The Bank strictly complies with the Guidelines on Market Risk Management of Commercial Banks issued by CBRC and
+other related regulatory requirements, implemented an independent, centralized and coordinated market risk management
+model, and formed a management organizational structure featuring the segregation of the front, the middle and the back
+offices in the financial market business. The Board of Directors assumes the ultimate responsibility for the implementation
+and monitoring of market risk management. The Senior Management is responsible for executing the strategies, overall
+policy and system regarding market risk management approved by the Board of Directors. The Market Risk Management
+Committee of the Senior Management is the reviewing and decision-making organ of the Bank in respect of market risk
+management, and is responsible for reviewing important matters of market risk management, and performs its duty in
+accordance with the Working Regulations for the Market Risk Management Committee. The market risk management
+departments at different levels are responsible for coordinating the market risk management at respective levels, and
+the business departments play their roles in implementing market risk management policies and standards in respective
+business areas.
+Currency Risk Management
+The Bank's interest rate risk management is aimed at maximizing the risk-adjusted net interest income within the tolerable
+level of interest rate risk under its risk management and risk appetite. The Bank adheres to the prudence principle in interest
+rate risk management of the banking book. The department in charge of interest rate risk management of the banking
+book and business departments jointly monitor and forecast interest rate trends and manage the interest rate risk based on
+monitoring results, so as to maximize the risk-adjusted income.
+Interest rate risk is defined as the risk of loss in the overall gain and economic value of the banking book arising from
+adverse movements in interest rate and maturity structure, etc. Interest rate risks mainly include repricing risk, yield curve
+risk, benchmark rate risk and option risk, of which, repricing risk and benchmark rate risk are the Bank's primary interest rate
+risks.
+♦ Interest Rate Risk Management
+Market Risk Management of the Banking Book
+Discussion and Analysis
+ICBC
+54
+In order to take more effective market risk management measures and accurately measure regulatory capital arising from
+market risk, the Bank categorized all on- and off-balance sheet assets and liabilities into its trading book and banking book
+according to the nature and characteristics of different books. The trading book includes tradable financial instruments and
+commodity positions held by the Bank for the purposes of trading or hedging the risks of other items in the trading book,
+whereas all other positions are included in the banking book.
+Banking Book and Trading Book
+In 2017, the Bank adhered to a steady and prudent interest risk appetite and made reasonable judgment on
+macro-economic and market interest rate trends. A wide array of tools including interest rate limit system management,
+maturity structure management, internal and external pricing management and hedging management were utilized to
+appropriately guide and improve the maturity structure of assets and liabilities, reasonably manage changes in the maturity
+structure of interest rates, effectively control the duration of assets and liabilities and interest rate sensitivity gap and ensure
+the achievement of interest rate risk management objectives.
+Production and supply of electricity, heat, gas and water industry
+Borrower G
+0.2
+Industry
+Borrower
+In RMB millions, except for percentages
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted
+for 4.9% and 14.2% of the Bank's net capital base respectively. The total amount of loans granted to the top ten single
+customers was RMB341,322 million, accounting for 2.4% of total loans. The table below shows the details of the loans
+granted to the top ten single borrowers of the Bank as at the end of 2017.
+BORROWER CONCENTRATION
+Rescheduled loans and advances amounted to RMB5, 158 million, representing a decrease of RMB383 million as compared to
+the end of the previous year. Rescheduled loans and advances overdue for over 3 months amounted to RMB1,374 million,
+representing a decrease of RMB24 million.
+RESCHEDULED LOANS
+Overdue loans stood at RMB286,075 million, representing a decrease of RMB60,052 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB178,857 million, representing a decrease of
+RMB16,155 million.
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Amount
+2.65
+2.01
+286,075
+0.13
+17,546
+0.21
+29,729
+0.78
+101,916
+0.57
+346,127
+% of total
+loans
+Borrower A
+Transportation, storage and postal services
+21,446
+Transportation, storage and postal services
+Borrower F
+0.2
+27,000
+Finance
+Borrower E
+0.2
+28,839
+Manufacturing
+Borrower D
+0.2
+35,235
+Transportation, storage and postal services
+Borrower C
+0.3
+35,635
+Transportation, storage and postal services
+Borrower B
+0.9
+119,859
+Discussion and Analysis
+INTEREST RATE RISK EXPOSURE
+At 31 December 2017
+At 31 December 2016
+on
+Overdue/
+repayable
+In RMB millions
+LIQUIDITY EXPOSURE ANALYSIS
+The Bank also assessed the liquidity risk status by using liquidity exposure analysis. As at the end of 2017, the liquidity
+exposure for the less than 1 month category turned from positive to negative, which was mainly due to the increase of due
+to and placements from banks and other financial institutions with corresponding term. The negative liquidity exposure for
+the 3 months to 1 year category increased, mainly due to the increase of repurchase agreements and the decrease in loans
+and advances to customers as well as the investments in bonds with corresponding term. The positive liquidity exposure
+for the category of over 5 years expanded, which was mainly due to increase in loans and advances to customers with
+corresponding term. Deposits maintained steady growth with a high deposition rate, and at the same time the Bank made
+major investment in highly liquid bond assets, and possessed sufficient liquidity reserves. Therefore, the overall liquidity of
+the Bank maintained at a safe level.
+The deposit and loan businesses of the Bank maintained coordinating development, and liquidity risk management ability
+was continuously strengthened. As at the end of 2017, RMB liquidity ratio and foreign currency liquidity ratio of the Bank
+were 41.7% and 86.2%, respectively, meeting the regulatory requirements. Loan-to-deposit ratio was 71.1%. Please refer
+to "Discussion and Analysis - Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+The daily average liquidity coverage ratio for the fourth quarter of 2017 was 129.02%, 4.56 percentage points higher than
+the previous quarter, mainly due to the increase in high-quality liquid assets (HQLA). HQLA cover cash, available central bank
+reserve under stress and primary and secondary bond assets that can be included in the liquidity coverage ratio under the
+regulatory requirements. For the quantitative information for liquidity coverage ratio based on the Administrative Measures
+for the Information Disclosure of Liquidity Coverage Ratio of Commercial Banks promulgated by CBRC, please refer to
+"Unaudited Supplementary Financial Information".
+In 2017, the Bank kept a close eye on factors affecting liquidity risk management, took proper measures to manage funds
+and liquidity risk and endeavored to increase the flexibility and perspectiveness of liquidity risk management. According
+to the Bank's asset and liability business development and funds management characteristics in different periods, the
+Bank managed the total size and structure of fund sources and utilizations through bank-wide planning and coordination,
+continued to strengthen liability stability management, improved the maturity structure of liabilities and took various steps to
+ensure liquidity stability and safety across the Group.
+Liquidity Risk Analysis
+Discussion and Analysis
+Less than
+57
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress testing
+on liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress testing on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress testing at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+◆ Stress Testing
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+Liquidity Risk Management Mode
+The Bank's liquidity risk management strategy and policy are formulated in accordance with the liquidity risk appetite, and
+they cover all businesses on- and off-balance sheet, all domestic and overseas business departments and branches that are
+likely to have a material impact on the liquidity risk, and contain the liquidity risk management under normal and stressed
+scenarios. The liquidity risk management strategy specifies the overall objective and mode of liquidity risk management
+and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk management are
+formulated in accordance with external and macro operating environments and business development of the Bank, with a
+view to striking an effective balance among security, liquidity and profitability.
+Objective of liquidity risk management: by establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity risk
+at the Group level, the Bank, the affiliates, the branches and the business lines, and ensuring the liquidity demand is satisfied
+at a reasonable cost in time under the normal business scenario and the stress scenario.
+• Objective, Strategy and Important Policy of Liquidity Risk Management
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department; and the execution system comprising the Asset and Liability
+Management Department, leading management departments of on- and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs the corresponding functions of decision making, supervision and execution functions
+according to division of responsibilities.
+The Bank's liquidity risk management system conforms to the overall development strategy and the overall risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control for liquidity risk and a complete management information system.
+Annual Report 2017
+At 31 December 2017
+demand
+(10,793,525)
+1 months
+ICBC
+58
+Note: Please refer to "Note 54. (b) to the Financial Statements: Liquidity Risk".
+1,981,163
+Total
+2,141,056
+Undated
+3,488,301
+7,619,544
+6,499,529 3,334,636
+3,363,860
+(378,127)
+(490,413)
+43,004
+(10,391,326)
+At 31 December 2016
+years
+years
+3,452,159
+1 year
+(829,587)
+(595,509)
+(200,327)
+Over 5
+1 to 5
+1 to 3 3 months to
+months
+Liquidity Risk Management System and Governance Structure
+80,919
+Discussion and Analysis
+56
+At 31 December 2016
+At 31 December 2017
+In RMB (USD) millions
+FOREIGN EXCHANGE EXPOSURE
+In 2017, the Bank closely watched the changes in external market and internal funds, actively took a combination of
+portfolio management measures such as price leverage to adjust and optimize the aggregate amount and structure of
+foreign exchange assets and liabilities, and strengthened assets and liabilities currency structure management and capital
+fund preservation management of overseas institutions. The currency risk of the Bank was under control.
+◆ Currency Risk Analysis
+For interest rate sensitivity analysis, please refer to "Note 54. (c)(ii) to the Financial Statements: Interest Rate Risk".
+Note: Please refer to "Note 54.(c)(ii) to the Financial Statements: Interest Rate Risk".
+1,531,435
+RMB
+1,593,362
+1,156,751
+744,754
+Over 5 years
+1 to 5 years
+1 year
+3 months
+(951,368)
+(1,577,446)
+3 months to
+Less than
+In RMB millions
+447,734
+487,380
+USD
+equivalent
+57,111
+RMB
+USD
+In 2017, the Bank constantly improved its liquidity risk management system following changes in the macroeconomic
+environment and financial regulatory policies, and upgraded liquidity risk management mechanism, thus effectively
+enhancing the liquidity risk management quality. The Bank continued to implement the steady and prudent liquidity
+management strategy, carried out Group-wide consolidated liquidity risk management and strengthened liquidity risk
+monitoring and management of items on- and off- balance sheet, in both domestic and overseas institutions, and in local
+and foreign currencies. The liquidity risk management system underwent continuous improvements in the capability of
+liquidity risk prevention and control.
+Liquidity Risk Management
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of
+loans by customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization,
+operating losses, derivatives trading risk and risk associated with its affiliates.
+Liquidity Risk
+Please refer to "Note 54. (c)(iii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+Total foreign exchange exposure, net
+exchange items, net
+Exposure of off-balance sheet foreign
+371,875
+Exposure of on-balance sheet foreign
+exchange items, net
+Item
+24,019
+166,889
+25,358
+165,115
+(25,535)
+(177,415)
+(31,753)
+(206,760)
+equivalent
+49,554
+344,304
+ICBC
+(%)
+0.58
+0.48
+0.49
+7,415
+10.7
+1,519,096
+Overseas and others
+Total
+1.64
+11,571
+5.4
+706,472
+1,327,321
+2.67
+5.2
+734,343
+Northeastern China
+1.63
+37,623
+17.7
+2,313,507
+1.54
+38,628
+19,596
+17.7
+10.2
+0.60
+289,512
+223,955
+65,557
+Charge for the year
+Balance at the beginning of the year
+Total
+assessed
+assessed
+Collectively
+7,939
+Individually
+CHANGES IN ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+1.62
+211,801
+100.0
+13,056,846
+1.55
+220,988
+100.0
+14,233,448
+In RMB millions
+2,512,303
+Western China
+1.57
+Pearl River Delta
+1.47
+35,325
+18.4
+2,409,725
+1.08
+27,955
+18.2
+2,599,171
+1,896,063
+Yangtze River Delta
+13,758
+4.5
+581,084
+2.33
+14,702
+4.4
+629,733
+Head Office
+(%)
+2.37
+13.3
+32,878
+1.73
+28,575
+13.9
+1,819,143
+1.64
+32,911
+14.1
+2,003,202
+Central China
+1.91
+41,097
+16.5
+2,156,022
+2.00
+46,903
+16.4
+2,339,537
+Bohai Rim
+2.06
+35,913
+13.4
+1,743,572
+108,983
+15,113
+124,096
+Including: Impairment allowances charged
+100.0
+14,233,448
+31.1
+4,427,035
+Total
+Unsecured loans
+14.3
+1,867,424
+14.5
+3,592,113
+13,056,846
+2,059,779
+5.5
+719,993
+2.5
+351,126
+Including: Discounted bills.
+12.3
+1,610,680
+8.9
+1,265,834
+Guaranteed loans
+27.5
+100.0
+52
+ICBC
+68,209
+1.16
+151,115
+0.75
+107,218
+loans
+Amount
+loans
+Amount
+% of total
+% of total
+At 31 December 2016
+In RMB millions, except for percentages
+Discussion and Analysis
+At 31 December 2017
+Total
+1 to 3 years
+Over 3 years
+3 months to 1 year
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+Pledged loans
+75,550
+24.8
+27.8
+(15,170)
+(57,031)
+Write-offs and others
+2,264
+838
+1,426
+Recoveries of loans and advances previously written off
+(3,189)
+(3,189)
+(72,201)
+Accrued interest on impaired loans
+(119,167)
+(50,768)
+Reversal of impairment allowances
+(1,399)
+1,399
+Impairment allowances transferred
+294,031
+135,679
+158,352
+(169,935)
+Balance at the end of the year
+115,746
+224,736
+3,960,495
+Including: Residential mortgages
+45.9
+5,986,629
+45.5
+6,480,800
+Loans secured by mortgages
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2017
+At 31 December 2016
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS BY COLLATERAL
+As at the end of 2017, the allowance for impairment losses on loans stood at RMB340,482 million, a year-on-year increase
+of RMB50,970 million. Allowance to NPL was 154.07%, showing an increase of 17.38 percentage points; allowance to total
+loans ratio was 2.39%, showing an increase of 0.17 percentage points.
+In 2017, the Bank aligned credit extension with national major strategic plans, correctly channeled credit resources to
+high-quality, high-efficiency fields and improved the credit portfolio and structure in a bid to serve the real economy more
+effectively. Loans to transportation, storage and postal services increased by RMB199,473 million, representing a growth
+rate of 13.2%, mainly due to stronger supports for China's planned "Ten Vertical and Ten Horizontal" transport network
+and other major national projects. Loans to leasing and commercial service increased by RMB173,751 million, representing
+a growth rate of 23.6%, mainly due to fast growth in lending to commercial services including investment and asset
+management. Loans to water, environment and public utility management increased by RMB137,991 million, representing a
+growth rate of 26.7%. Loans to production and supply of electricity, heat, gas and water increased by RMB79,792 million,
+representing a growth rate of 9.7%, and they were mainly for supporting the financing needs of urban infrastructure and
+public utility developments.
+108,854
+3,237,427
+2.20
+0.76
+100.0
+0.67
+commercial service
+Production and supply
+900,484
+12.0
+1,407
+0.16
+820,692
+11.9
+501
+0.06
+of electricity, heat,
+gas and water
+Water, environment
+655,533
+8.7
+975
+0.15
+517,542
+7.5
+1,302
+0.25
+and public utility
+management
+Wholesale and retail
+568,011
+7.6
+4,938
+10.7
+736,921
+0.69
+NPL ratio
+Item
+(%)
+(%)
+(%)
+(%)
+Transportation, storage
+1,715,562
+22.8
+9,568
+0.56
+1,516,089
+21.8
+55,366
+3,022
+and postal services
+Manufacturing
+1,409,206
+18.6
+67,604
+4.80
+1,414,408
+20.4
+60,639
+Leasing and
+910,672
+12.1
+6,250
+0.20
+9.75
+625,488
+9.0
+850
+0.67
+122,294
+1.8
+675
+0.55
+culture and sanitation
+Lodging and catering
+111,047
+1.5
+3,256
+2.93
+122,117
+1.7
+1.8
+2.25
+Others
+191,651
+2.5
+4,142
+2.16
+197,119
+2.9
+2,456
+1.25
+Total
+7,523,000
+100.0
+2,742
+NPLs
+126,906
+1.96
+58,029
+9.28
+Real estate
+501,769
+6.7
+13,631
+2.72
+426,999
+6.2
+9,367
+2.19
+Construction
+223,484
+Science, education,
+3.0
+1.28
+187,363
+2.7
+4,222
+2.25
+Mining
+208,675
+2.8
+2,998
+1.44
+225,505
+3.3
+4,425
+2,856
+Percentage
+4.29
+NPL ratio
+Pass
+Item
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Loan
+Credit Risk Analysis
+Discussion and Analysis
+49
+Annual Report 2017
+The Bank continued to strictly implement bank-wide, unified credit risk management policy requirements, strengthened
+pre-investment analysis of bonds and collected information through various channels to analyze changes in credit risk of
+bond issuers. A regular risk screening mechanism was created for the existing unsecured bond portfolios to strengthen risk
+management of outstanding bond investments. The access management mechanism for money market transaction was
+strictly implemented to strengthen sophisticated management of counterparties and strictly control risks from the root.
+◆ Credit Risk Management of Treasury Operations
+The Bank optimized the personal credit extension policy, created a customer grouping-based credit extension system,
+optimized the allocation of credit limit resources, granted credit limit in a differentiated and targeted manner based
+on multi-dimensional customer information and effectively improved the precision of credit management. The big data
+technology was used to strengthen early monitoring and warning of high-risk customer groups, take targeted risk control
+measures and strictly control the credit risk exposure. The application of internal ratings was strengthened and the rigid
+control criteria for internal ratings was improved based on quantitative risk indicators, so as to control essential risks more
+meticulously and automatically. Effective ongoing efforts were made on non-performing assets ("NPAS") recovery and
+disposal, including stronger recovery of overdue credit card loans and mitigation of NPAs through various channels.
+◆ Credit Risk Management of Credit Card Business
+The Bank improved the system of rules and regulations on credit risk management system for personal loans, streamlined
+the basic framework for post-lending management of personal loans, developed administrative measures for post-lending
+management of personal credit business and further regulated lifecycle management of personal loans. The personal credit
+business was inspected bank-wide, focused on risks in partner management, loan due diligence and collateral management.
+The Bank further broadened and deepened the cooperation with large high-quality real estate enterprises while effectively
+preventing and controlling risks to achieve coordinated development of personal housing loans in terms of quality, quantity
+and price. The Bank enhanced management and control of the quality of personal loans by accelerating recovery and
+disposal of personal NPLs at key branches, and promoting securitization of personal NPLs, thus mitigating credit risk in
+personal loans through market-based measures.
+Special mention
+◆ Credit Risk Management of Personal Loans
+The Bank strengthened risk management of the real estate industry. It implemented real estate loan reallocation
+management, optimized city-specific management requirements of real estate loans, actively supported the financing
+demands in key regions, large high-quality customers, shantytown renovation with government-purchased services,
+prudently controlled the financing for new housing developments in third-tier and fourth-tier cities with a relatively long
+de-stocking period, strictly controlled the financing for commercial property development, and further improved the real
+estate loan portfolio structurally.
+Discussion and Analysis
+82,505
+152,318
+0.63
+30,925
+0.22
+19,862
+0.15
+14,233,448
+168,903
+100.00
+13,056,846
+The Bank strengthened credit risk management of small enterprises. It advanced specialization and strengthened operating
+management of the small and micro finance center. The Bank established and improved the system of small and micro credit
+products, supported and promoted regional product innovation and boosted dynamic management of the implementation
+and risk profile of innovative products. Risk loan management was enhanced by analyzing geographic distribution, customer
+group characteristics and risk characteristics of risky loans to small businesses, developing risk control measures specific to
+geographic areas, conducting onsite examination of key branches, supervising risk prevention and control and improving the
+bank-wide awareness and capability of risk management. Credit risk of loans to small and micro customers was periodically
+monitored and analyzed to detect and verify risk factors and take targeted management measures timely.
+100.00
+NPLs
+Doubtful
+6,912,537
+2.25
+0.84
+109,434
+0.57
+81,209
+1.62
+211,801
+1.55
+220,988
+4.47
+584,011
+3.95
+Substandard
+561,974
+(%)
+Amount
+12,261,034
+94.50
+13,450,486
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2017
+At 31 December 2016
+In RMB millions, except for percentages
+Total
+Loss
+93.91
+The overall loan quality was stable, with key indicators showing steady improvements. As at the end of 2017, according to
+the five-category classification, pass loans amounted to RMB13,450,486 million, representing an increase of RMB1,189,452
+million when compared with the end of the previous year and accounting for 94.50% of total loans. Special mention loans
+stood at RMB561,974 million, representing a decrease of RMB22,037 million, and accounted for 3.95% of the total, with a
+drop of 0.52 percentage points. NPLs amounted to RMB220,988 million, showing an increase of RMB9, 187 million, and NPL
+ratio was 1.55%, with a drop of 0.07 percentage points.
+At the end of 2017, the Bank's maximum exposure to credit risk, without taking into account any collateral and other credit
+enhancements, was RMB28,878,520 million, showing an increase of RMB2,640,976 million when compared with the end
+of the previous year. Please refer to "Note 54. (a)(i) to the Financial Statements: Details of the Bank's Maximum Exposure
+to Credit Risk Without Taking Account of Any Collateral and Other Credit Enhancements". For mitigated risk exposures of
+credit risk asset portfolio of the Bank, please refer to "Credit Risk" of the 2017 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited.
+At 31 December 2017
+4,945,458
+34.7
+44,560
+0.90
+4,196,169
+32.1
+51,332
+1.22
+Total
+14,233,448
+100.0
+220,988
+1.55
+Personal loans
+13,056,846
+211,801
+1.62
+Corporate NPLs were RMB175,903 million, showing an increase of RMB16,032 million when compared with the end of the
+previous year, and representing a NPL ratio of 1.97%. Personal NPLs amounted to RMB44,560 million, showing a decrease
+of RMB6,772 million, and represented a NPL ratio of 0.90%, with a drop of 0.32 percentage points.
+50
+ICBC
+Discussion and Analysis
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+In RMB millions, except for percentages
+At 31 December 2017
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+Loan
+Percentage
+NPLs
+100.0
+0.08
+At 31 December 2016
+5.5
+598
+In RMB millions, except for percentages
+At 31 December 2016
+NPL ratio
+Item
+Corporate loans
+Loan
+(%)
+NPLs
+(%)
+Loan
+Percentage
+(%)
+NPL ratio
+NPLs
+(%)
+Percentage
+62.8
+8,936,864
+0.15
+2.5
+351,126
+Discounted bills
+525
+159,871
+175,903
+1.96
+1.97
+719,993
+8,140,684
+62.4
+Group
+61
+CAPITAL MANAGEMENT
+In 2017, the Bank further deepened the capital management reform, strengthened capital saving and optimization,
+intensified the constraint of economic capital on risk-weighted assets and continued to elevate the capital use efficiency and
+return on capital. On the basis of stabilizing the supplementation of endogenous capital such as retained profits, the Bank
+proactively carried out external capital replenishment to continuously consolidate the bank-wide capital base to reinforce its
+capacity in supporting the real economy. Actively responding to the various national policies and guidance, the Bank focused
+more on and increased support to areas such as green finance and inclusive finance. Moreover, the Bank coordinated,
+allocated and utilized various capital resources to satisfy capital supplement requirements of subsidiaries. In 2017, all capital
+indicators performed well, of which capital adequacy ratio was kept at a sound and appropriate level, fully showing its good
+reputation of strong capital base and prudent and sustainable operation.
+Capital Adequacy Ratio and Leverage Ratio
+The Bank calculated its capital adequacy ratios in accordance with the Capital Regulation. According to the scope of
+implementing the advanced capital management approaches as approved by CBRC, in respect of risks meeting regulatory
+requirements, the foundation internal ratings-based (IRB) approach was adopted for corporate credit risk, the IRB approach
+was adopted for retail credit risk, the internal model approach (IMA) was adopted for market risk, and the standardized
+approach was adopted for operational risk. The weighted approach was adopted for credit risk uncovered by the IRB
+approach and the standardized approach for market risk uncovered by the IMA approach.
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+In RMB millions, except for percentages
+At 31 December 2016
+At 31 December 2017
+Discussion and Analysis
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly strengthened and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channels, raising capital quality and optimizing capital structure. The Bank's capital management
+covers various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management, capital investment and financing management.
+2,030,108
+Parent
+Company
+Group
+Parent
+Company
+Calculated in accordance with the Capital Regulation:
+Net core tier 1 capital
+1,856,054
+1,874,976
+1,723,839
+Net tier 1 capital
+2,110,060
+Annual Report 2017
+1,935,429
+Item
+In 2017, the Bank strictly abode by regulatory requirements and, with consideration of its business development needs,
+continued to strengthen country risk management. The Bank closely observed changes in country risk exposures, constantly
+tracked, monitored and reported country risk, and timely updated and adjusted the country risk rating and limits. It further
+strengthened early warning mechanism for country risk, proactively conducted stress testing on country risk and reasonably
+and effectively controlled country risk while pushing ahead with the internationalization strategy.
+In 2017, the Bank continued to strengthen legal risk management, by improving the risk prevention and control capacity
+in legal risk management, ensuring the legal and compliant operation, healthy business development and overall business
+stability of the Group. The Bank improved both the vertical linkage and horizontal coordination mechanism between the
+Head Office and branches. By embedding legal risk prevention and control into business negotiations, product design,
+contract signing and other links, the Bank prevented legal risk in advance and made the legal risk prevention and control
+more prospective, proactive and targeted. The Bank further improved the cross-border coordination and management for
+legal work and strengthened the legal risk management of overseas institutions, actively responding to cross-border legal
+issues emerging in the development of international operations. It applied multiple legal means to improve debt collection
+efficiency. Moreover, the Bank pragmatically strengthened the risk management and control of lawsuit-related risks, thereby
+preventing and mitigating lawsuit-related risks and losses. It assisted with the online judicial inquiry and enforcement,
+and improved the efficiency of providing enforcement assistance. The Bank further standardized contract management
+and reinforced authorization management, related party management, trademark management and intellectual property
+protection.
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+1,954,770
+Operational Risk
+Discussion and Analysis
+Operational Risk Management
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution and delivery and process management constitute major sources of
+operational risk losses of the Bank.
+The Bank strictly followed the requirements of the Guidance to the Operational Risk Management of Commercial Banks
+issued by CBRC. The Bank adopted the operational risk control mode of "integrated management, classified control". The
+Board of Directors assumes relevant responsibility for the effectiveness of the operational risk management according to the
+Articles of Association, and the Senior Management is responsible for implementing the strategy, overall policy and system
+for operational risk management approved by the Board of Directors. The Operational Risk Management Committee under
+the Senior Management, as the organizer and coordinator of operational risk management of the Bank, is responsible for
+reviewing and approving significant matters related to operational risk management according to the Working Regulations
+for the Operational Risk Management Committee. Marketing and product departments at all levels form the first line of
+defense of operational risk management, which assume direct responsibility for operational risk management in each
+business line. Internal control and compliance departments at various levels are comprehensive management departments
+for operational risk in institutions at various levels and assume the duty of operating the second line of defense of
+operational risk management, which are responsible for the arrangement and organization for the establishment and
+implementation of operational risk management system at each level; discipline enforcement, security, human resources,
+IT, finance and accounting, legal affairs, operation management, credit management and risk management departments
+at all levels are classification control departments for operational risk in institutions at various levels, which are responsible
+for management and control on specific types of operational risk. These departments, together with comprehensive
+management departments, form the second line of defense of operational risk management. The internal audit departments
+at all levels are responsible for auditing and evaluating the operation of the operational risk management system, and form
+the third line of defense.
+In 2017, the Bank strengthened operational risk management and continued to push the Group's operational risk
+management to a higher level in line with the requirements of the National Financial Work Conference, regulatory focus
+areas and operational risk trends. A comprehensive crackdown campaign was launched to improve risk governance in
+ten key fields and links and improve or update policies, procedures, systems and mechanisms. IT risk control and external
+fraud risk management were strengthened and the credit risk database of ICBC e-Security was continuously expanded
+to provide strong support for business risk warnings, effectively protect the safety of customers' funds and enhance the
+ability to prevent and control external risks. Risk control was reinforced in asset management, notes, interbank and credit
+businesses to enhance risk warning and alert. Operational risk limit management was strengthened to ensure adequate
+monitoring and reporting of limit indicators. The Bank also optimized the operational risk measurement system, intensified
+large-value operational risk event control, improved the system of key operational risk indicators and continuously strengthened
+the application of operational risk management tools and management of data quality. During the reporting period, the
+operational risk management system of the Bank operated smoothly and the operational risk was controllable on the whole.
+Legal Risk
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arises out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions or requirements of other relevant rules during the Bank's operation; the
+unfavorable legal defects that exist in products, services or information provided to clients, transactions engaged in, and
+contracts, agreements or other documents executed by the Bank; legal disputes (litigation or arbitration proceedings)
+between the Bank and its clients, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally
+and externally.
+Annual Report 2017
+59
+Discussion and Analysis
+Based on the objective to ensure legal and compliant operation, the Bank always attaches great importance to establishing
+a sound legal risk management system, forming a full-process legal risk prevention and control mechanism to support
+and secure business innovation and market competition, and to prevent and eliminate various potential or practical legal
+risks. The Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk
+management, and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for
+executing the strategy and policy relating to legal risk management, examining and approving relevant important affairs.
+The Legal Affairs Department of the Head Office is in charge of legal risk management across the Group, with relevant
+business departments providing related support and assistance on legal risk prevention and control. The affiliates, domestic
+and overseas branches undertake the responsibility of legal risk management of their respective institutions.
+Anti-Money Laundering
+In strict compliance with applicable laws and regulations concerning anti-money laundering ("AML"), the Bank sincerely
+implemented the "risk-based" regulatory requirements in respect of AML, steadily fulfilled the legal obligations and social
+responsibilities concerning AML, and kept enhancing the Group's management level regarding AML and counter-terrorist
+financing ("CTF").
+Adhering to the AML management model of "centralized, specialized and systematic management", the Bank pushed
+forward the development of AML mechanisms, policies, systems and teams and strengthened money laundering risk
+management in key businesses, core fields and critical links to boost the Group's AML management capability. The Bank
+set up an Anti-money Laundering Center at the Head Office level, optimized the anti-money laundering management
+organization structure and further stepped up the Group headquarters' supports and risk management of AML work of
+domestic and overseas institutions. Money laundering risk assessment of products and customers was strengthened, with
+stronger efforts made to prevent and control money laundering risks in major business fields. Targeted AML publicity and
+training events were carried out to accelerate the enhancement in the competence of AML teams. Domestic institutions
+continued to deepen the centralized AML processing reform to fortify the foundation for AML work, strengthened suspicious
+activity reporting, analysis and judgment and quality spot-check and cooperated with regulators and competent authorities
+in AML investigation. Overseas institutions completed the centralized compliance review mechanism reform for suspicious
+and sensitive businesses to boost the quality of centralized money laundering identification and handling. AML supervision,
+inspection and assessment of overseas institutions were strengthened to enhance the Group's ability to manage AML
+compliance risk.
+60
+ICBC
+Discussion and Analysis
+Reputational Risk
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the reputational risk management objective and planning, through
+the establishment and improvement of the reputational risk management system and through daily reputational risk
+management and proper handling of reputational events. Good reputation is central to the operation and management of a
+commercial bank. The Bank highly values its reputation and has incorporated reputational risk management in the corporate
+governance and enterprise risk management system to prevent reputational risk.
+The Board of Directors is responsible for reviewing and finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and effectiveness of reputational risk management across the Bank and
+assuming the ultimate responsibility for reputational risk management. The Senior Management is responsible for leading
+reputational risk management of the Bank, implementing the strategies and policies established by the Board of Directors,
+reviewing and finalizing the rules, measures and operating procedures for reputational risk management and the plans to
+handle extraordinarily major reputational events and ensuring the proper and effective operation of the reputational risk
+management system. The Bank has established a special reputational risk management team to take charge of the daily
+management of reputational risk.
+In 2017, the Bank continued to strengthen reputational risk management, proactively prevented reputational risk and
+enhanced the reputational risk management level and prevention ability across the Bank. According to the latest regulatory
+requirements, changes in external circumstances and the Bank's management practices, the Bank amended the measures
+for reputational risk management, further improved the reputational risk management working mechanism, and optimized
+the reputational risk management system application. The Bank also carried out the identification, evaluation, monitoring,
+control, mitigation and assessment of reputational risk in an in-depth manner and strengthened the consolidated
+management of reputational risk. It conducted reputational risk assessment on new businesses and products, investigated
+all potential reputational risk and established reputational risk management registers at all levels. It organized stress testing
+and emergency response drills on reputational risk and reinforced the preventative control and mitigation of reputational
+risk. It responded actively to public concerns and effectively communicated with the stakeholders and the public. During the
+reporting period, the Bank's reputational risk was controllable with no material reputational risk event occurred.
+Country Risk
+The Bank strictly observes the Guidelines on the Management of Country Risk by Banking Financial Institutions and other
+regulatory requirements of CBRC. The Board of Directors assumes the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible for executing the country risk management policies approved
+by the Board of Directors. The Risk Management Committee of the Head Office is responsible for reviewing matters
+regarding country risk management. The Bank manages and controls country risk with a series of tools, including country
+risk assessment and rating, country risk limit, country risk exposure calculation and monitoring and stress testing. The Bank
+reviews the country risk rating and limits at least once every year.
+1,803,214
+In RMB millions
+2,406,920
+Foreign currency
+35.5
+35.7
+41.7
+>=25.0
+RMB
+criteria
+2015
+2016
+2017
+Regulatory
+Loan migration ratio (%)
+68
+customers (%)
+Percentage of loans to top 10
+>=25.0
+customer (%)
+86.2
+98.1
+2.7
+13.3
+13.3
+14.2
+Special mention
+Substandard
+Doubtful
+Pass
+4.2
+4.5
+4.9
+<=10.0
+currency
+71.4
+70.9
+71.1
+RMB and foreign
+82.3
+3.4
+Percentage of loans to single largest
+Liquidity ratio (%)
+The Bank proactively carried out external capital replenishment and constantly promoted the issuance of new capital
+instruments on the basis of achieving capital replenishment by retained profits. According to its capital planning and capital
+replenishment plan, the Bank issued two tranches of tier 2 capital bonds worth RMB44.0 billion each in China's national
+interbank bond market in November 2017, with the total size of issuance standing at RMB88.0 billion. All funds raised are
+used to replenish the tier 2 capital of the Bank as per applicable laws and the approval of the regulator. Please refer to the
+announcements published by the Bank on the websites of SEHK and SSE.
+Capital Financing Management
+Note: Please refer to "Unaudited Supplementary Financial Information" for details on disclosed leverage ratio information.
+7.55%
+7.54%
+7.29%
+7.49%
+7.51%
+Leverage ratio
+off-balance sheet assets
+1,954,770
+25,904,533
+2,017,717
+26,753,069
+2,003,429
+27,467,633
+2,074,109
+27,689,701
+2,110,060
+28,084,967
+For details on relevant fundraising activities, please refer to "Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders — Details of Securities Issuance and Listing".
+Loan-to-deposit ratio (%) (2)
+Allocation and Management of Economic Capital
+In 2017, the Bank further strengthened its economic capital management in terms of measurement, allocation and
+assessment, improved its economic capital measurement policy and optimized its economic capital measurement standards
+and system. The Bank strictly implemented the measures for quota management, continuously boosted the refined
+management of economic capital, and reinforced the capital constraint on domestic branches, profitability units, overseas
+institutions and subsidiaries. Moreover, the Bank upgraded the economic capital measurement and appraisal policy of credit
+business and proactively facilitated the adjustment of its credit structure. It strengthened trainings on economic capital
+management for institutions at all levels, and vigorously pushed forward operational management and business front-line
+application of economic capital.
+Item
+Major Regulatory Indicators
+REQUIREMENTS
+OTHER INFORMATION DISCLOSED PURSUANT TO REGULATORY
+Discussion and Analysis
+65
+Annual Report 2017
+Focus on our founding mission, and act as the leader in serving the real economy. The Bank will improve the
+integrated management of existing and incremental loans, give full support to the real economy and enhance the ability
+to solve the problems of imbalance and insufficiency with financial support. It will actively shore up the construction
+of "four regions", "three supportive belts" and Xiong'an New Area, and strengthen the support for the fields such as
+advanced manufacturing, energy conservation and environmental protection, and consumption upgrade. The inclusive
+finance system will be optimized by focusing on groups related to small and micro enterprises, "agriculture, rural areas and
+farmers", "mass entrepreneurship and innovation" and poverty relief. In addition, the Bank will focus its efforts on "cutting
+overcapacity and excess inventory, deleveraging and reducing costs" to lower the inefficient use of financial resources. It
+will also promote integrated and international operations in an in-depth manner, in order to achieve "one-click access,
+whole-group response and globalized services", and enhance the pattern and level of services for the real economy.
+Never overstep the bottom line and create a financial security stabilizer. The Bank will adhere to the
+operational and managerial concept of ongoing risk prevention and control, and stick to the principles of strict
+loan control and rigid bank management, so as to achieve the classified management of on-balance sheet and
+off-balance sheet businesses. Besides, the Bank will pay close attention to comprehensive management and professional
+governance, intensify risk mitigation, rectification and accountability, and manage loans by experts and professionals, to
+consolidate the foundation of credit management. By holding fast to the innovative boundary and compliance bottom
+line for cross-market businesses, the Bank will improve its cross-risk underlying data platform as well as the monitoring
+and control system. It will strengthen the compliance culture building and promote the integration of prudent and
+compliant business philosophy and culture within the Bank, to form a powerful deterrent force and binding effect.
+Embrace changes, and strive to be the pioneer of reform and innovation. The Bank will closely follow the
+changes of customers and behavioural patterns in the internet era, reconstruct its customer development strategy and
+create a new customer base with an open, tolerant and inclusive attitude and new ideas, perspectives and measures.
+It will speed up the building of smart banking system, build a new-generation business, IT and data architecture, and
+create a "data-based, intelligent and smart" operation and management and financial service system. Besides, the
+Bank will optimize organizational management efficiency, business operation mode, performance assessment system
+and human resources structure to improve the transmission of strategies, and deepen the competitiveness of key cities
+with the enhancement of relevant strategies, to reinforce its operational capabilities in major markets.
++
+The Bank faces the following opportunities. First, the supply-side structural reform will stimulate the inherent driving force for
+economic growth and provide impetus for the integration and interaction between the banking sector and the real economy.
+Second, the rapid development of FinTech will provide sounder technical support for banks to build a smart financial service
+model. Third, the strategy for regional coordinated development will be further promoted, and major strategic arrangements
+for Xiong'an New Area, Guangdong, Hong Kong and Macau Greater Bay Area will be fully implemented, providing
+guidelines for banks to optimize their operational layout. Fourth, the framework of all-around opening up will take shape,
+and the Belt and Road Initiative will be further propelled, creating a historic opportunity for the internationalization of banks.
+The Bank will also face the following major challenges: First, financial risks will still occur easily and frequently, imposing
+higher requirements for banks to further enhance their enterprise risk management and control capabilities. Second,
+financial regulatory environment, competitive environment and technological environment will undergo significant
+changes, pushing forward the reconstruction of financial ecology. Banks will be required to clarify the market and strategic
+positioning, form their operating characteristics and build core strengths. Third, due to the individualized, integrated and
+scene-oriented trend of customers' financial demand and more frequent flow and conversion between financial assets, banks
+will be required to further improve their service accuracy and professionalism based on the experience on customers.
+2018 is a crucial year for China to securing a decisive victory in building a moderately prosperous society in all respects and
+also the starting year for the Bank to implement the new three-year planning and embark on the new journey as a big bank.
+Based on the vision on building a world-class and modern financial enterprise with global competitiveness by adhering to the
+principles of delivering excellence, sticking to our founding mission, customer favourite, leading in innovation, security and
+prudence, and people-oriented, the Bank will achieve sustainable and healthy development during the process of providing
+services for the real economy and the supply-side structural reform.
+In 2018, global economic growth prospects are expected to improve, and reforms of global governance system and
+international order are accelerating. China's economy will shift from rapid growth to high-quality development. New
+economy, new business forms and new momentum will develop and evolve, which will significantly enhance economic
+innovation and competitiveness.
+Discussion and Analysis
+OUTLOOK
+ICBC
+64
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc.
+4.4
+23.2
+23.5
+5,600,701
+4,970,872
+Trading and available-for-sale securities
+Level 3 assets
+Cross-jurisdictional claims
+Cross-jurisdictional liabilities
+498,644
+442,830
+169,915
+159,550
+1,631,867
+1,489,643
+1,729,020
+Annual Report 2017
+67
+Notional amount of over-the-counter (OTC) derivatives
+Social Responsibility
+1,649,713
+Underwritten transactions in debt and equity markets
+1,928,002
+Net capital base
+1,602,223
+Intra-financial system liabilities
+1,924,926
+2,131,194
+Securities and other financing instruments issued
+3,948,878
+2,719,376
+Payments settled via payment systems or correspondent banks
+361,485,854
+374,432,043
+Assets under custody
+15,557,326
+14,061,641
+1,198,482
+Taking the social responsibility objective of "Excellence for You Excellent services to clients, Maximum returns to
+shareholders, Real success for our people, Great contribution to society", the Bank is committed to serving the common
+interests in economic and social development and promoting sustainable economic development and social progress. Thanks
+to these efforts, the Bank won wide recognition from various social sectors and such awards as the "Excellence in Corporate
+Social Responsibility", the "Best Social Responsibility Financial Institution Award of the Year", and the "Annual Bank with
+Excellent Social Contribution of the Year".
+Delivering Excellence
+Leveraging a sound corporate governance framework, the Bank promoted the transformation of operation, offered
+innovative products and services, strove to enhance profitability and risk control level, promoted the reasonable distribution
+of social resources and supported the sustainable development of the real economy via optimal allocation of financial
+resources, and created superior value for all the stakeholders including shareholders, customers and employees as well as the
+society.
+-
+The Bank did not issue any corporate bonds that need to be disclosed as per the "No. 2 Standards on the Content and
+Format of Information Disclosure of Companies with Public Offerings Content and Format of the Annual Report"
+Corporate Bonds
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2017 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and those under IFRSS
+Risk Management" for liquidity coverage ratio indicator
+(2) CBRC adjusted the loan-to-deposit ratio from a regulatory indicator to a monitoring indicator in 2015.
+(3) Please refer to the section headed "Discussion and Analysis
+information.
+Notes: (1) The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and
+accounting standards applicable to the current period. The comparative figures are not adjusted or restated.
+10.5
+7.4
+10.6
+38.9
+36.8
+71.1
+29.6
+(Revision 2017) or "No. 38 Standards on the Content and Format of Information Disclosure of Companies with Public
+Offerings Content and Format of the Annual Report of Corporate Bonds".
+66
+ICBC
+Discussion and Analysis
+Sticking to Our Founding Mission
+Staying true to our founding mission, the Bank was determined to be rooted in the real economy, actively adapted to the
+requirements of the structural reform on the supply side, supported the "overcapacity and excess inventory cut, deleverage,
+cost reduction, and strengthening of points of weakness", and backed the optimization of industrial structure. What's more,
+the Bank aligned itself with the national strategies to promote regional coordination, ensure and improve living standards, aid
+in high-end manufacturing and practice green finance by taking the lead in the industry to launch the "ICBC ESG Green Index",
+in order to support the high-quality growth of economy and self-upgrade and development in a deeply integrated way.
+Intra-financial system assets
+Customers' Favourite
+The Bank upheld and fulfilled the "customer-oriented" operating philosophy, released the service culture of "Customer First,
+Satisfactory Service, Valuing Employees, Persistent Integrity" and took persistent efforts to build an efficient, reputed bank
+providing good customer experience. Committed to offering excellent financial services, the Bank endeavored to provide
+more efficient, safer and more convenient financial services of better quality and become a trusted, reliable, user-friendly and
+first-choice bank enabling "one-point access, group-wide response and global service".
+Leading in Innovation
+The Bank vigorously fostered innovation culture. In pursuit of all-round innovation driven by innovation in system and
+technology, the Bank made continuous efforts to improve online and offline smart service systems and moved steadily
+forward with smart outlet upgrades and self-service banking development. Moreover, the Bank earnestly innovated products
+and services and continuously strengthened innovation in management in a bid to become a leader and driver of the smart
+finance ecosystem.
+Balance of adjusted on- and
+Security and Prudence
+28,084,967
+Balance of adjusted on- and off-balance sheet assets
+2017
+Indicator
+25,904,533
+2016
+Global Systemically Importance Assessment Indicators of Commercial Banks
+The Bank upheld the corporate culture that "Integrity Leads to Prosperity", responded actively to the latest changes in
+financial regulatory requirements and market conditions, attached great importance to defending the bottom line of risks
+and fortifying the lines of defense for compliance and pursued safe operation and sound development based on well-
+established policies and risk control and prevention. The Bank practically protected the rights and interests of consumers,
+and took an actively part in developing a social integrity system in a bid to create value for customers, shareholders and
+other stakeholders as well as the larger society.
+Net tier 1 capital
+1,577,428
+31 March
+2017
+356,407
+1,886,536
+2,044,390
+In RMB millions, except for percentages
+At 31 December
+2016
+2017
+At 31 December
+Other intangible assets other than land use rights
+Goodwill
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+Valid portion of capital reserve
+ICBC
+Paid-in capital
+356,407
+151,998
+1,532
+9,001
+8,478
+11,560
+14,282
+(21,640)
+(61,063)
+3,164
+2,716
+940,237
+1,096,868
+251,349
+264,850
+205,021
+232,660
+151,952
+1,477
+Core tier 1 capital
+CAPITAL ADEQUACY RATIO
+Capital adequacy ratio
+13.49%
+13.42%
+13.44%
+13.27%
+Tier 1 capital adequacy ratio
+12.90%
+12.87%
+12.88%
+12.77%
+Core tier 1 capital adequacy ratio
+1,960,840
+31 December
+2016
+2,216,707
+2,127,462
+15.14%
+Item
+15.39%
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related
+As at the end of 2017, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 12.77%, 13.27% and 15.14%, respectively,
+complying with regulatory requirements.
+Discussion and Analysis
+ICBC
+62
+14.26%
+14.29%
+14.67%
+14.56%
+Capital adequacy ratio
+11.96%
+11.71%
+11.96%
+11.65%
+Core capital adequacy ratio
+regulations:
+14.61%
+(3,708)
+14.67%
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+15.14%
+13.42%
+13.27%
+12.87%
+12.77%
+14,564,617
+15,902,801
+2,127,462
+2,406,920
+Refers to risk-weighted assets after capital floor and adjustments.
+(2)
+Notes: (1) Please refer to "Note 54. (d) to the Financial Statements: Capital Management".
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+Core tier 1 capital adequacy ratio
+14.61%
+Annual Report 2017
+2017
+63
+2017
+2017
+(4,618)
+Item
+30 June
+30 September
+31 December
+Risk-weighted assets (2)
+At
+At
+At
+In RMB millions, except for percentages
+LEVERAGE RATIO
+At the end of 2017, the leverage ratio which was calculated according to the Administrative Measures for Leverage Ratio of
+Commercial Banks (Revised) promulgated by CBRC in 2015 was 7.51%, meeting the regulatory requirement.
+Please refer to the 2017 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+Discussion and Analysis
+At
+Net capital base
+At
+5,600
+2,110,060
+Net tier 1 capital
+419
+577
+Valid portion of minority interests
+79,794
+79,375
+79,952
+79,375
+Additional tier 1 capital instruments and related premium
+Additional tier 1 capital
+2,030,108
+Net core tier 1 capital
+institutions that are under control but not subject to consolidation
+Investments in core tier 1 capital instruments issued by financial
+financial institutions that are not subject to consolidation
+5,700
+1,954,770
+Tier 2 capital
+1,874,976
+178,292
+500
+Significant minority investments in tier 2 capital instruments issued by
+5,600
+297,360
+500
+Tier 2 capital deductions
+4,236
+3,303
+7,980
+Valid portion of minority interests
+19,195
+71,736
+Valid portion of tier 2 capital instruments and related premium
+154,861
+222,321
+Surplus provision for loan impairment
+5.02
+As at the end of the reporting period, the Bank had 28 preference shareholders (or proxies), including two offshore
+preference shareholders (or proxies) and 26 domestic preference shareholders. As at the end of the month immediately
+before the release day of the Annual Report (28 February 2018), the Bank had 28 preference shareholders (or proxies),
+including two offshore preference shareholders (or proxies) and 26 domestic preference shareholders.
+76
+ICBC
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+BANK
+Unit: Share
+Name of shareholder
+Nature of
+shareholder
+Increase/
+decrease
+during the
+reporting
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Changes in Preference Shares
+The Bank privately issued 450 million preference shares in domestic market on 18 November 2015 upon the approval by
+CBRC pursuant to Yin Jian Fu [2015] No. 189 and by CSRC pursuant to Zheng Jian Xu Ke [2015] No. 1023. Each domestic
+preference share had a nominal value of RMB100 and was issued at nominal value. The coupon rate, as determined by
+benchmark rate plus a fixed spread, shall remain unchanged for the first 5 years commencing from the issuance date.
+Subsequently, the benchmark rate shall be readjusted once every 5 years during which the coupon rate shall remain
+unchanged. The coupon rate for the Domestic Preference Shares during the first 5 years is determined at 4.5% through price
+discovery. Upon approval by SSE pursuant to Shang Zheng Han [2015] No. 2391, the domestic preference shares were listed
+on the integrated trading platform of SSE for transfer as of 11 December 2015 (stock name: ICBC Preference Share 1, stock
+code 360011). Total proceeds from the issuance amounted to RMB45.0 billion, net proceeds from the issuance amounted
+to around RMB44.95 billion. All proceeds after deduction of the expenses relating to the issuance will be used to replenish
+additional tier 1 capital.
+For particulars of the Bank's issue of domestic preference shares, please refer to the announcements of the Bank on the
+websites of SSE, SEHK and the Bank.
+◆ Issuance and Listing of Preference Shares in Latest Three Years
+Preference Shares
+Note: (1) As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on behalf
+of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as investment
+manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by Ping An Asset
+Management Co., Ltd. for the period ended 31 December 2017 (the date of relevant event being 28 November 2017). Both
+Ping An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping An Insurance
+(Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the voting rights in
+respect of such shares on behalf of customers and independently exercise the rights of investment and business management
+in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company of China, Ltd.,
+Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as a holding
+company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities and Futures
+Ordinance of Hong Kong.
+0.00
+0.00
+Short
+534,000
+1.22
+Interest of
+controlled
+corporations
+Number
+of shares
+Long
+position
+.
+position
+shares
+Shares held
+Depository (Nominees) Limited
+preference shares
+4,357,784,110
+Unknown
+39.1
+120,000,000
+RMB offshore
+The Bank of New York
+Unknown
+47.9
+147,000,000
+USD offshore
+preference shares
+Number of
+Foreign legal person
+on sales
+(%)
+the period
+period
+Class of shares
+locked-up
+restrictions
+percentage
+at the end of
+pledged or
+subject to
+Shareholding
+Cede & Co.
+BlackRock, Inc.
+HOLDERS OF H SHARES
+1.72
+Number of
+H shares held
+Name of substantial
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+75
+Annual Report 2017
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2017, MOF held 123,316,451,864 shares in the Bank.
+(2) According to the register of shareholders of the Bank as at 31 December 2017, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+35.00
+Percentage of
+total ordinary
+shares (%)
+33.11
+46.26
+Long
+position
+124,731,774,651
+Beneficial owner
+43.77
+Long
+position
+118,006,174,032
+Percentage of
+A shares (%)
+Nature of
+interests
+Number of
+A shares held
+(share)
+Beneficial owner
+Capacity
+Huijin(2)
+MOF(1)
+shareholder
+Name of substantial
+Foreign legal person
+HOLDERS OF A SHARES
+As at 31 December 2017, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+shareholder
+Ltd.(1)
+Capacity
+Nature of
+interests
+7.05
+Long
+position
+manager
+Management Co.,
+6,115,905,000
+Investment
+Ping An Asset
+corporations
+2.05
+8.43
+Long
+position
+controlled
+(Private) Limited
+7,317,475,731
+Interest of
+Temasek Holdings
+2.43
+9.98
+Long
+position
+Social Security Fund
+8,663,703,234
+Beneficial owner
+National Council for
+shares (%)
+H shares (%)
+Percentage of
+total ordinary
+Percentage of
+(share)
+EUR offshore
+preference shares
+None
+13.0
+owned legal person
+None
+3.3
+15,000,000
+Domestic
+Domestic non-state-
+BOC International (China)
+Limited
+preference shares
+person
+None
+3.3
+15,000,000
+preference shares
+Domestic
+China Resources SZITIC Trust
+Co., Ltd.
+preference shares
+owned legal person
+3.3
+15,000,000
+Domestic
+Domestic non-state-
+BOCOM Schroders Asset
+Management Co., Ltd.
+preference shares
+person
+None
+3.3
+State-owned legal
+China National Tobacco
+Other entities
+Domestic
+Social Responsibility
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of
+Hong Kong
+ICBC
+78
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for Preference Shares at the meeting of its Board of Directors on 30 October 2017, permitting
+the Bank to distribute the dividends on the Bank's domestic preference shares on 23 November 2017 and on the offshore
+preference shares on 11 December 2017.
+◆ Dividend Distribution of Preference Shares
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares held by preference shareholders in total
+number of domestic preference shares.
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders as at 31 December 2017.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. The "China Life Insurance Company Limited Traditional ―
+Ordinary insurance products 005L CT001 Hu" is managed by China Life Insurance Company Limited. The "Ping An Life
+Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by Ping An Life Insurance Company
+of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China
+Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected relations or concert party action
+among the afore-mentioned preference shareholders and among the afore-mentioned preference shareholders and top 10
+ordinary shareholders.
+None
+2.2
+10,000,000
+Domestic
+preference shares
+Domestic non-state-
+owned legal person
+Ping An Property & Casualty
+Insurance Company of
+China Ltd.
+preference shares
+Corporation Heilongjiang
+Branch
+None
+2.2
+10,000,000
+Domestic
+Other entities
+China National Tobacco
+preference shares
+Corporation Shandong Branch
+None
+2.2
+10,000,000
+15,000,000
+Domestic
+State-owned legal
+CCB Trust Co., Ltd.
+locked-up
+restrictions
+Shareholding
+percentage (%)
+the period
+at the end of
+pledged or
+subject to
+Shares held
+Number of
+Number
+of shares
+Increase/
+decrease
+during the
+reporting
+period
+Class of shares
+Nature of
+shareholder
+Name of shareholder
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF THE BANK
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+77
+Annual Report 2017
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+The Bank is not aware of any connected relations or concert party action among the afore-mentioned preference shareholders
+and among the afore-mentioned preference shareholders and top 10 ordinary shareholders.
+As the issuance was private offering, the register of preference shareholders presented the information on proxies of placees.
+(3)
+(2)
+The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2017.
+Notes: (1)
+Unknown
+on sales
+40,000,000
+shares
+Other entities
+preference shares
+owned legal person
+None
+6.7
+30,000,000
+Domestic
+Domestic non-state-
+Ping An Life Insurance Company
+of China, Ltd.
+preference shares
+person
+None
+7.8
+35,000,000
+Domestic
+State-owned legal
+China Life Insurance Company
+Limited
+preference shares
+None
+11.1
+50,000,000
+Domestic
+Other entities
+China National Tobacco
+Corporation
+None
+44.4
+200,000,000
+Domestic
+preference shares
+China Mobile Communications
+Corporation
+None.
+None
+None.
+24.35
+overseas
+III. Total number of shares
+356,406,257,089
+100.00
+356,406,257,089
+86,794,044,550
+100.00
+75.65
+86,794,044,550
+24.35
+356,406,257,089
+100.00
+Note: "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the Content
+and Format of Information Disclosure of Companies with Public Offerings - Content and Format of the Report of Change in
+Corporate Shareholding" (Revision 2007) of CSRC.
+269,612,212,539
+Details of Securities Issuance and Listing
+2. Foreign shares listed
+75.65
+Percentage
+(%)
+Increase/decrease
+during the
+reporting period
+Number of shares
+Unit: Share
+At 31 December 2017
+Percentage
+(%)
+ordinary shares
+I. Shares subject to
+II.
+Shares not subject to
+restrictions on sales
+356,406,257,089
+100.00
+1. RMB-denominated
+269,612,212,539
+restrictions on sales
+Number of shares
+The Bank did not conduct any rights issue or issue any convertible bonds during the reporting period.
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 38. to the Financial
+Statements: Debt Securities Issued; Note 41. to the Financial Statements: Other Equity Instruments" for details.
+Huijin
+MOF
+State-owned
+State-owned A Share
+A Share
+34.71
+123,717,852,951
+None
+period
+34.60
+None
+HKSCC Nominees Limited/
+Hong Kong Securities
+Clearing Company Limited (3)
+China Securities Finance Co., Ltd.
+Ping An Life Insurance Company
+of China, Ltd. Traditional
+-Ordinary insurance products
+Sycamore Investment
+123,316,451,864
+For details on the issuance of preference shares of the Bank, please refer to "Details of Changes in Share Capital and
+Shareholding of Substantial Shareholders - Preference Shares".
+the reporting
+Number of
+pledged or
+locked-up shares
+The Bank did not have any employee shares.
+Number of Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had a total number of 503,430 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 128,442 holders of H shares and 374,988 holders of A shares. As
+at the end of the month immediately before the release day of the Annual Report (28 February 2018), the Bank had a total
+number of 524,352 ordinary shareholders and no holders of preference shares with voting rights restored.
+72
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+decrease of
+shares during
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Increase/
+Name of shareholder
+Nature of
+shareholder
+Class of
+shares
+Shareholding
+percentage
+(%)
+Total number of
+shares held
+Unit: Share
+At 31 December 2016
+DETAILS OF CHANGES IN SHARE CAPITAL
+Changes in Ordinary Shares
+70
+In RMB10,000
+12,702,854.38
+2,290,487.86
+Loan of project targeted poverty relief
+Including: Rural transport facilities
+Including: Loan of industry targeted poverty relief
+Upgrading of rural power network
+Rural education loan
+8,452,849.58
+4,444,337.67
+150,883.60
+Amount of targeted poverty relief input
+Poverty relief through industry development
+Rural water conservancy facilities
+Poverty relief through education
+Balance of loans
+Targeted Poverty Relief Achievements
+The Bank upheld the leading role of the Party Committee, earnestly safeguarded the employees' legal rights and interests,
+cared for their growth, and created a harmonious "home" where all employees and leaders of the Bank pulled together
+their wisdom and efforts to promote common development. In the meantime, the Bank actively supported charity work,
+encouraged the employees to participate in volunteer activities, and gave back to the society and fulfilled its responsibility
+across the globe as a big bank in multiple ways, such as helping the poor, the elderly and the disabled, providing financial
+support for education, and providing community services.
+People-oriented
+Targeted Poverty Relief
+The Bank took poverty relief as an important part of fulfilling its social responsibilities, insisted on the basic principle
+of targeted poverty relief and elimination, took targeted measures to meet the demands in poor regions, sought
+solutions and took effective measures in mechanism, funds, information, talents, methods, etc., and continuously
+stepped up the financial support and targeted assistance, playing its due role in the tough battle against poverty and
+assuming its responsibility as a big bank.
+Targeted Poverty Relief Planning
+◆ Poverty relief planning and objective. The Bank endeavours to provide financial services to poor regions,
+leveraging the role of finance in promoting poverty reduction and sustainable economic development in the regions.
+It dedicates its efforts in targeted poverty relief, assisting resource integration at poor areas, improving of production
+and living conditions of the underprivileged by means of finance, industry, education, medical care for poverty relief,
+supporting them to achieve poverty reduction goals on time.
+Finance-backed targeted poverty relief
+◆ Mechanism for poverty relief. The Bank established the working group for poverty relief to enhance leadership
+and coordination for poverty relief. It stipulated guideline documents for poverty relief, such as the Opinion on
+Comprehensively Advancing Finance-backed Poverty Alleviation Work and the Financial Targeted Poverty Alleviation
+Work Plan and the Key Points in Targeted Poverty Alleviation, which specified the Bank's guiding ideas, basic
+principles, priorities and measures for poverty relief.
+◆ Poverty relief through finance. The Bank sought breakthroughs mainly in credit granting, product innovation
+and service provision, etc., and deeply pushed forward anti-poverty work to cater for the financial demand of poverty-
+stricken areas. The hard efforts paid off in the way of finance leveraging and promoting finance-supported targeted
+poverty relief in the new era.
+◆ Poverty relief through healthcare. The Bank improved the local medical services and public hygiene and reduced
+the cases of local residents falling below the poverty line or returning to poverty due to illnesses, by offering free
+medical assistance and providing medical and health facilities, enabling more poor people to access basic medical
+services.
+◆ Poverty relief through industries. The Bank actively explored the model that combines the ICBC, the
+government, the village's Party committee and autonomous committee, enterprises and the poor households together,
+integrated poverty relief resource input and local efforts with better effects, and realized efficient capital use. It not
+only fostered a group of characteristic industrial projects with growing vitality and demonstration effects, effectively
+increasing the poor households' income and stimulating their initiative to overcome poverty.
+Annual Report 2017
+69
+Social Responsibility
+Summary of Targeted Poverty Relief in 2017
+Poverty relief through healthcare
+Poverty relief through infrastructure
+Poverty relief through cultural development
+Including infrastructure construction, industrial development,
+education, medical care and visit to poor households
+347,635
+42,078
+Subsequent Targeted Poverty Relief Plan
+The Bank will provide precise financing support in view of the development plan of the targeted regions, give priority
+to the scale of credit and capital for those regions, and create new financial products and services for poverty relief
+according to local conditions. It will implement the poverty relief model that features the combination of education,
+finance, industry and healthcare, and push the poverty relief efforts from being driven by external forces to being
+driven by internal forces and from individual cases to collective relief. The Bank will optimize the outlet construction
+and layout in poor regions, and increase the supply of financial services there to make them more convenient
+and accessible. The Bank will focus on poverty relief in the extremely poor regions, make overall arrangements
+of resources, and prioritize support to those areas with the greatest difficulties, poorest groups and most urgent
+problems.
+ICBC
+Note: The "targeted poverty relief" refers to the poverty relief efforts in Tongjiang County, Nanjiang County, Jinyang County and
+Wanyuan City in Sichuan Province.
+Social Responsibility
+The Bank actively acted in line with the government's five development concepts of "innovation, coordination,
+green, opening up and sharing" and the requirements of "promoting balanced economic, political, cultural, social,
+and ecological progress". Regarding green credit strengthening as a key strategy for long-term pursuit, the Bank
+comprehensively carried out green credit from the aspects of credit policy, management process, business innovation
+and its own performance. It released the revised industrial (green) credit policy annually, comprehensively implemented
+the "Green Credit One-Veto System", intensified green credit assessment and resource allocation, and improved the
+IT-based green credit management to actively back the development of green industries and reinforce the prevention
+and control of environmental and social risks.
+The Bank continuously promoted low-carbon operation, advocated green office and strove to increase the working
+and management efficiency through IT means. It improved the functions of the office system, continued to promote
+paperless office work, reformed the car use system, and established a diversified official car use system focused on
+self-owned cars and complemented by the commercial car service such as online car hailing. The Bank called on the
+employees to proactively protect the natural eco-environment and participated in voluntary tree planting, sharpened
+the employees' environmental awareness, and intensified their sense of responsibility for the environment. All these
+efforts synchronously improved economic, social and ecological benefits.
+For more details on the Bank's social responsibilities, please refer to the ICBC Corporate Social Responsibility Report 2017
+(Environment, Society and Governance) published on its official website.
+Annual Report 2017
+71
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+Green and Environment Protection
+Including: Number of registered poor people
+Number of beneficiaries
+Projects
+696,903.61
+83,185.00
+2,200.00
+1,285.00
+685.00
+60.00
+Number of beneficiaries of targeted poverty relief
+Including: Number of registered poor people
+140.00
+30.00
+64,422
+22,969
+The Group poverty relief donations apart from targeted poverty relief
+Amount of donations
+2,658.87
+H Share
+24.16
+86,099,850,428
+Unknown
+6
+China Everbright Group Ltd.
+55.67
+7
+China Everbright Bank Company Limited (A; H)
+19.53
+57.11
+8
+73.63
+9
+China Reinsurance (Group) Corporation (H)
+71.56
+10
+New China Life Insurance Company Limited (A; H)
+China Export & Credit Insurance Corporation
+31.34
+China Construction Bank Corporation (A; H)
+64.02
+No.
+1
+2
+Company name
+China Development Bank Corporation
+Industrial and Commercial Bank of China Limited (A; H)
+5
+Huijin's shareholding
+percentage (%)
+34.71
+3
+Agricultural Bank of China Limited (A; H)
+40.03
+4
+Bank of China Limited (A; H)
+34.68
+11
+China Jianyin Investment Limited
+100.00
+A represents A share listed company, while H represents H share listed company.
+(2)
+(3)
+(4)
+In February 2018, the procedures for integration of China Galaxy Financial Holdings Company Limited ("CGFH") and China
+Galaxy Investment Management Co., Ltd. were completed. Afterwards, the direct holding of Huijin in CGFH was changed to
+69.07%.
+On 12 December 2017, CSRC approved the non-public issuance of new shares up to RMB2.5 billion by Shenwan Hongyuan
+Group Co., Ltd. ("SHG"). On 30 January 2018, the new shares mentioned above went listed on Shenzhen Stock Exchange.
+Afterwards, the direct holding of Huijin in SHG was changed to 22.28%.
+Notes: (1)
+On 20 September 2017, China International Capital Corporation Limited ("CICC") and Tencent Mobility Limited ("Tencent")
+signed share subscription agreement through which CICC privately offered about 4.95% of all its H shares (after the offering) to
+Tencent. As of the end of 2017, the relevant procedures were being handled.
+1 Ding Xuedong was transferred to serve as Deputy Secretary General of the State Council (Minister Level). He authorized Tu Guangshao to
+function in the capacity of Legal Representative of CIC, Chairman and Legal Representative of Huijin. The authorization came into force on
+2 March 2017, and ceased to be effective upon new appointment by the State Council. Tu Guangshao currently serves as Vice Chairman
+and General Manager of CIC.
+74
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 34.60% shares of the Bank as at
+31 December 2017. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal
+revenue and expenditure, formulating the financial and taxation policies, and supervising State finance at a macro level.
+◆ Particulars of Other Corporate Shareholders Holding 10% Shares or More (Excluding HKSCC Nominees
+Limited)
+(5) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+14.54
+Guotai Junan Investment Management Co., Ltd.
+17
+12
+China Galaxy Financial Holdings Company Limited
+78.57
+13
+Shenwan Hongyuan Group Co., Ltd. (A)
+25.03
+14
+China International Capital Corporation Limited (H)
+58.58
+15
+China Securities Co., Ltd. (H)
+32.93
+16
+Jiantou CITIC Asset Management Co., Ltd.
+70.00
+As at 31 December 2017, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+◆ Particulars of the De Facto Controller
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing, its unified social credit code is 911000007109329615, and its legal representative is Ding Xuedong'. Huijin
+is a wholly-owned subsidiary of CIC. It, in accordance with authorization by the State Council, makes equity investments in
+major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the rights and perform
+the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the goal of preserving
+and enhancing the value of state-owned financial assets. Huijin does not engage in any other business activities, and does
+not intervene in the day-to-day business operations of the key state-owned financial institutions it controls.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+-591,497,461
+State-owned
+A Share
+0.40
+1,420,781,042
+None
+3,731,330,676
+Platform Co., Ltd.
+Central Huijin Asset
+State-owned
+A Share
+0.28
+1,013,921,700
+None
+legal person
+Management Co., Ltd.(4)
+1.05
+Other
+entities
+48,125,232
+Foreign legal
+person
+A Share
+0.13
+469,850,468
+A Share
+None
+State-owned
+legal person
+A Share
+1.12
+3,976,079,886
+None
+-586,156,109
+5,389,887
+legal person
+China Life Insurance Company
+Other
+A Share
+0.05
+167,467,520
+None
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2017.
+(2)
+State-owned
+legal person
+The Bank had no shares subject to restrictions on sales.
+HKSCC Nominees Limited held 86,099,850,428 H shares and Hong Kong Securities Clearing Company Limited held 469,850,468
+A shares.
+(4) Central Huijin Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware
+of any connected relations or concert party action among the afore-mentioned shareholders.
+Particulars of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Annual Report 2017
+73
+(3)
+Airport Co., Ltd.
+- Traditional products
+entities
+A Share
+0.10
+362,707,827
+None
+45,668,900
+Limited Traditional
+entities
+- Ordinary insurance products
+―005L CT001 Hu
+Anbang Property & Casualty
+Other
+A Share
+0.06
+207,691,297
+None
+Insurance Co., Ltd.
+◆ Controlling Shareholders
+◆ Poverty relief through education. "Prioritizing education for poverty relief", the Bank supported job creation,
+sponsored poor students, provided training for village teachers, and financed the building of school dorms, thus
+raising the level of poverty relief through education across the board.
+Beijing Capital International
+Non-executive Director
+2,425
+6.0%
+2,025
+millions)
+4.5%
+2,025
+2,412
+6.0%
+4.5%
+rate
+in RMB
+Dividend
+(pre-tax,
+Offshore preference share
+Dividend
+distributed
+rate
+Dividend
+2016
+2017
+Type of preference shares
+Domestic preference share
+Recent distribution of dividends on preference shares by the Bank is shown as follows:
+Dividends on the Bank's offshore preference shares are paid annually in cash, and calculated based on the aggregate value
+of the offshore preference shares. Dividends on the offshore preference shares are non-cumulative. Holders of offshore
+preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled to any distribution of
+residual profits of the Bank together with the holders of ordinary shares. According to the dividend distribution plan in the
+offshore preference share issuance proposal, the Bank distributed a dividend of USD196 million, EUR40 million and RMB800
+million on the offshore preference shares (pre-tax), aggregating to RMB2,412 million at the rate on dividend declared date.
+In practice, the dividend was distributed in the currency of the preference share. According to relevant laws, when the Bank
+distributes dividends for offshore preference shares, the enterprise income tax shall be withheld by the Bank at a rate of
+10%. According to the requirements of the terms and conditions of the offshore preference shares, the Bank will pay the
+relevant taxes, in addition to the dividends for offshore preference shares.
+Dividends on the Bank's domestic preference shares are paid annually in cash, and calculated based on the aggregate
+value of the issued domestic preference shares. Dividends on the domestic preference shares are non-cumulative. Holders
+of domestic preference shares are only entitled to dividends at the prescribed coupon rate, but are not entitled to any
+distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the domestic preference share issuance proposal, the Bank distributed a dividend of RMB2,025 million on
+the domestic preference shares (pre-tax) at the coupon rate of 4.5%.
+Directors and Supervisors Leaving Office
+Qian Wenhui
+Chairman of the Board of Supervisors
+Male
+Dividend
+distributed
+(pre-tax,
+in RMB
+millions)
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the websites of SSE, SEHK
+and the Bank.
+Redemption or Conversion of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+Executive Director,
+Zhang Hongli
+December 2016–December 2019
+50
+Male
+Vice Chairman, Executive Director,
+President
+Gu Shu
+July 2013-June 2019
+53
+Male
+Chairman of the Board of Directors,
+Executive Director
+Tenure
+Age
+Gender
+Position
+Yi Huiman
+Name
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+79
+Annual Report 2017
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 Presentation of Financial Instruments and the
+Rules for Distinguishing Financial Liabilities and Equity Instruments and Relevant Accounting Treatment (Cai Kuai [2014]
+No. 13) promulgated by MOF as well as the International Accounting Standard 39 - Financial Instruments: Recognition
+and Measurement and the International Accounting Standard 32 - Financial Instruments: Presentation promulgated
+by International Accounting Standards Board and other accounting standards and main issuance clauses of the Bank's
+preference shares, issued and existing preference shares of the Bank excluded contractual obligations of cash on delivery
+or other financial assets and contractual obligations of settlement by delivering variable equity instruments, and shall be
+calculated as other equity instruments.
+_
+-
+◆ Accounting Policy Adopted for Preference Shares and Rationale
+During the reporting period, the Bank did not restore any voting right of preference share.
+◆ Restoration of Voting Rights of Preference Shares
+55
+Male
+June 2015-January 2018
+Non-executive Director
+Wang Jingdong, Executive Director, Senior Executive Vice President
+Mr. Wang has served as Executive Director of the Bank since December 2016, and Senior Executive Vice President of the
+Bank since December 2013. He joined China Development Bank in 1994 and served as Deputy Head of Heilongjiang Branch,
+Deputy Director of the Human Resources Department of the Head Office, Head of Project Appraisal Department III of the
+Head Office, Head of Beijing Branch and Head of Human Resources Department of the Head Office. Mr. Wang graduated
+from Huazhong Agricultural University with a Bachelor's degree in Agronomy. He is a senior engineer.
+Annual Report 2017
+81
+Directors, Supervisors, Senior Management, Employees and Institutions
+Cheng Fengchao, Non-executive Director
+Mr. Cheng has served as Non-executive Director of the Bank since March 2015. He joined Huijin in 2009, and served as
+Deputy Director of Finance Bureau of Pingquan County in Hebei Province, Deputy Director of Finance Office of Hebei
+Province, Head of Hebei Certified Public Accountants, Vice Chairman and Secretary of Hebei Institute of Certified Public
+Accountants, Deputy General Manager of Shijiazhuang Office, General Manager of Evaluation Management Department,
+General Manager of Tianjin Office and General Manager of Development Research Department of China Great Wall Asset
+Management Corporation, and Non-executive Director of Agricultural Bank of China Limited. He acts as tutor to PhD
+students of Hunan University, graduate supervisor for Graduate School of Chinese Academy of Social Sciences, member of
+the Expert Advisory Committee for Mergers, Acquisitions and Restructurings of CSRC and Supervisor of China Everbright
+Group Limited. He obtained a Doctorate degree in management from Hunan University. Currently, he is a researcher in
+financial science, senior accountant, PRC Certified Public Accountant and China's Certified Public Valuer.
+Zheng Fuqing, Non-executive Director
+Mr. Zheng has served as Non-executive Director of the Bank since February 2015. He joined MOF in 1989, and served as
+Deputy Head and Head of Shanxi Finance Ombudsman Office, and Assistant Ombudsman and Associate Counsel of Shanxi
+Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central Committee of C.P.C. majoring in law
+theory. He is an economist.
+Fei Zhoulin, Non-executive Director
+Mr. Fei has served as Non-executive Director of the Bank since March 2015. He joined MOF in 1995, and served as Deputy Head
+of General Division and Head of Business Division II of Shaanxi Finance Ombudsman Office, Assistant Ombudsman and Vice
+Ombudsman of Shaanxi Finance Ombudsman Office, and Ombudsman of Ningxia Finance Ombudsman Office. Mr. Fei graduated
+from the Correspondence Institute of the Party School of the Central Committee of C.P.C. in economic management.
+Mei Yingchun, Non-executive Director
+Mr. Zhang has served as Executive Director of the Bank since June 2015, and Senior Executive Vice President of the Bank
+since May 2010. He worked as Financial Manager at the headquarters of Hewlett-Packard, Director and Head of the
+China operations of Schroders PLC, Executive Director of Goldman Sachs Asia and Chief Representative of Goldman Sachs
+(China) LLC Beijing Representative Office, and Head of Deutsche Bank Investment Banking Greater China, Vice Chairman
+of Deutsche Bank Asia and Chairman of Deutsche Bank China, member of the Global Banking Management Committee
+and Head of Asia ― Pacific of Deutsche Bank Global Banking and Chairman of Deutsche Bank (China) Co., Ltd. He served
+concurrently as Chairman of ICBC International Holdings Limited and Chairman of Industrial and Commercial Bank of China
+(Brasil) S.A., Vice Chairman of Standard Bank Group Limited and Chairman of Industrial and Commercial Bank of China
+(USA) NA. Mr. Zhang received a Bachelor's degree from Heilongjiang Bayi Agricultural University and a Master's degree in
+Genetics from the University of Alberta, Canada, as well as a Master's degree in Business Administration (MBA) from the
+Santa Clara University in California, USA, and a Doctorate degree in Management Science and Engineering from the Chinese
+Academy of Social Sciences.
+Ms. Mei has served as Non-executive Director of the Bank since August 2017. She joined MOF in 1992, and consecutively
+served in the World Bank Department, the Treasury Department and the Tariff Policy Department. Previously, she served as
+Assistant Consultant of the Budget Implementation Division of the Treasury Department of MOF, Assistant Consultant of the
+Audit & Supervision Division of the Treasury Payment Centre of MOF, Deputy Director of the Audit & Supervision Division of
+the Treasury Payment Center of MOF, Director of the Audit & Supervision Division of the Treasury Payment Center of MOF,
+Deputy Director-General of the Tariff Policy Department (Tariff Policy Research Centre) of MOF, and was seconded to World
+Bank Group as Senior Advisor and worked in the Development Partner Relationship Department of the Development Finance
+Unit of the International Development Association and the Vice-President Front Office of East Asia and Pacific Region of the
+International Bank for Reconstruction and Development. Ms. Mei obtained a Master's degree in International Affairs from
+School of International and Public Affairs of Columbia University, and a PhD in Economics from Chinese Academy of Fiscal
+Science (formerly known as the Institute of Fiscal Science, MOF).
+Mr. Dong has served as Non-executive Director of the Bank since August 2017. He joined Huijin in 2008, and served as Deputy
+Division Chief of the Audit and Supervision Bureau of PBC, Assistant Special Inspector of the State Council, Division Chief
+of the Supervisory Committee of the Working Commission of Central Level State-Owned Enterprises, and Deputy Director-
+General of the Foreign Affairs Bureau of the State-Owned Assets Supervision and Administration Commission, Director of China
+Reinsurance (Group) Corporation and Director of China Reinsurance Asset Management Co., Ltd. and Non-executive Director
+of China Construction Bank Corporation. He currently serves as Non-executive Director of China Securities Co., Ltd. He made a
+study visit to the US Federal Reserve and Royal Melbourne Institute of Technology. Mr. Dong graduated from Renmin University
+of China and obtained a Master's degree in Economic Law. He is a senior economist and an accountant.
+Ye Donghai, Non-executive Director
+Mr. Ye has served as Non-executive Director of the Bank since October 2017. He joined Huijin in 2017. Previously, he served
+as Section Chief and Deputy Director General of the Finance Division of Beijing Normal University, Assistant General Manager
+82
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+(Deputy General Manager level) of the Planning and Finance Department of China Everbright Bank, Deputy General Manager
+of the Finance and Accounting Department of China Everbright Bank (in charge of the department's work), Vice President
+and member of the CPC Committee of China Everbright Bank Tianjin Branch, Deputy General Manager of the Audit
+Department of China Everbright Bank (in charge of the department's work) and General Manager of the Audit Department
+of China Everbright Bank. He served concurrently as Employee Supervisor of the Board of Supervisors of China Everbright
+Bank. Mr. Ye Donghai graduated from Renmin University of China, and obtained a Master's degree in Economics. He is a
+senior accountant.
+Or Ching Fai, Independent Non-executive Director
+Mr. Or has served as Independent Non-executive Director of the Bank since May 2012. Mr. Or previously served as General
+Manager and Director of The Hongkong and Shanghai Banking Corporation Limited, Chairman of HSBC Insurance Limited,
+Chief Executive and Vice Chairman of Hang Seng Bank Limited, Chairman of Hang Seng Insurance Company Limited and
+Hang Seng Bank (China) Limited, Director of Cathay Pacific Airways Limited, Director of Hutchison Whampoa Limited, Vice
+Chairman and Independent Non-executive Director of G-Resources Group Limited, and Vice Chairman and Non-executive
+Director of Aquis Entertainment Limited. He was Chairman of the Hong Kong Association of Banks, Vice President and
+a Council Member of the Hong Kong Institute of Bankers, Chairman of the Financial Services Advisory Committee and a
+member of the Services Promotion Program Committee of the Hong Kong Trade Development Council, a member of the
+Risk Management Committee of the Hong Kong Exchanges and Clearing Limited, a member of the Aviation Development
+Advisory Committee, Chairman of Executive and Campaign Committee of the Community Chest of Hong Kong, Acting
+Chairman of the Council of City University of Hong Kong, a Council Member of The University of Hong Kong, and an Adviser
+of the Employers' Federation of Hong Kong. Mr. Or currently acts as Chairman and Executive Director of China Strategic
+Holdings Limited, Chairman and Independent Non-executive Director of Esprit Holdings Limited, Independent Non-executive
+Director of Chow Tai Fook Jewellery Group Limited, Television Broadcasts Limited and Regina Miracle International Ltd.,
+and Vice Patron of the Board of the Community Chest of Hong Kong. Mr. Or graduated from The University of Hong Kong
+with a Bachelor's degree in Economics and Psychology. He is an Honorary Doctorate of Social Science of City University of
+Hong Kong. Mr. Or was awarded a Silver Bauhinia Star from the Hong Kong Special Administrative Region in 2009. He is an
+Honorary University Fellowships from The University of Hong Kong, an Honorary Fellowship from Hang Seng Management
+College, and a Justice of the Peace.
+Hong Yongmiao, Independent Non-executive Director
+Mr. Hong has served as Independent Non-executive Director of the Bank since August 2012. Mr. Hong was previously
+in charge of the National Science Fund for Distinguished Overseas Young Scholars supported by the National Science
+Foundation of China, and acted as President of the Chinese Economists Society in North America. He is currently an
+academician of the Academy of Sciences for the Developing World and a professor of Economics and International Studies at
+Cornell University in the United States. He has been enrolled as one of the first participants of the "Thousand Talents Plan"
+and serves as Vice Chairman of the Steering Committee of Economics Teaching at Institutions of Higher Learning under
+the Ministry of Education and Director of the Wang Yanan Institute for Studies in Economics and the School of Economics
+at Xiamen University. He is a lecture professor of the "Changjiang Scholars" launched by the Ministry of Education, an
+honorary professor of the School of Economics and Management at University of Chinese Academy of Sciences and a senior
+editor in economics for the Journal of Management Science and Engineering, an English magazine published by the National
+Natural Science Foundation of China. He is also an editorial board member of Economic Research Journal of the Chinese
+Academy of Social Sciences and an academic board member of China Economic Quarterly published by Peking University. He
+acts as Independent Non-Executive Director of Xiamen Bank Co., Ltd. as well. Mr. Hong graduated from Xiamen University
+with a Bachelor of Science degree and a Master's degree in Economics, and obtained his Doctorate degree in Economics
+from the University of California San Diego.
+Anthony Francis Neoh, Independent Non-executive Director
+Dong Shi, Non-executive Director
+Zhang Hongli, Executive Director, Senior Executive Vice President
+Mr. Gu has served as Vice Chairman and Executive Director of the Bank since December 2016, and President since October
+2016. He joined ICBC in 1998, where he served as Deputy General Manager of Accounting and Settlement Department,
+Deputy General Manager of the Planning and Finance Department, and General Manager of Finance and Accounting
+Department. Since July 2008, he had served as Board Secretary and General Manager of Corporate Strategy and Investor
+Relations Department of the Bank, Head of Shandong Branch and Senior Executive Vice President of the Bank. He served
+concurrently as Vice Chairman of Standard Bank Group Limited, Chairman of ICBC (London) PLC and Chairman of Industrial
+and Commercial Bank of China (Argentina) S.A. Mr. Gu obtained a Doctorate degree in Economics from Shanghai University
+of Finance and Economics, Master's degree in Economics from Dongbei University of Finance and Economics and Bachelor's
+degree in Engineering from Shanghai Jiao Tong University. He is a senior accountant.
+Gu Shu, Vice Chairman, Executive Director, President
+Ge Rongrong
+Non-executive Director
+Fu Zhongjun
+Non-executive Director
+Female
+Female
+Male
+53
+January 2012-June 2017
+49
+January 2012-June 2017
+60
+December 2013-January 2017
+Kenneth Patrick Chung
+Independent Non-executive Director
+Male
+60
+December 2009-March 2017
+Notes: (1) Please refer to the section headed "Directors, Supervisors, Senior Management, Employees and Institutions — Appointment and
+Removal".
+(2) The current terms of Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong as Executive Directors of the Bank
+are set out in the above table and their terms as Senior Management members of the Bank are specified in the section headed
+Biographies of Directors, Supervisors and Senior Management. Mr. Yi Huiman has served as Chairman of the Board of Directors
+of the Bank since June 2016.
+80
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+(3) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+(4) According to the regulations of CSRC, the commencement date of a re-elected director's tenure as indicated in the above table
+shall be the day of his/her first appointment.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period, except Mr. Zhang Hongli who
+held 2,000 H shares of the Bank, held shares or share options or were granted restricted shares of the Bank, and there was no
+change during the reporting period.
+Biographies of Directors, Supervisors and Senior Management
+Yi Huiman, Chairman, Executive Director
+Mr. Yi has served as Chairman of the Board of Directors and Executive Director of the Bank since June 2016. He joined
+ICBC in 1985, and had previously served in several positions including Deputy Head of ICBC Zhejiang Branch, and Head of
+ICBC Jiangsu Branch and ICBC Beijing Branch. Mr. Yi has served as a member of Senior Management, Senior Executive Vice
+President, President, Vice Chairman and Executive Director of the Bank since October 2005. He obtained a Master's degree
+in Executive Business Administration from Guanghua School of Management of Peking University. He is a researcher.
+Wang Xiaoya
+52
+June 2015-June 2018
+Senior Executive Vice President
+65
+Male
+External Supervisor
+Shen Bingxi
+December 2015-December 2018
+51
+Male
+External Supervisor
+June 2016-June 2019
+53
+Male
+Employee Supervisor
+June 2016-June 2019
+September 2015-September 2018
+Male
+Employee Supervisor
+June 2016-June 2019
+55
+Male
+Shareholder Supervisor
+Qu Qiang
+Hui Ping
+Huang Li
+Zhang Wei
+March 2017–March 2020
+64
+Male
+57
+Wang Lin
+Secretary of Party Discipline Committee
+Male
+Male
+54
+July 2016-
+Board Secretary
+Guan Xueqing
+July 2016-
+55
+Male
+Chief Risk Officer
+Wang Bairong
+January 2017-
+51
+Male
+Senior Executive Vice President
+October 2016-
+47
+Male
+Senior Executive Vice President
+November 2015-
+55
+Male
+Senior Executive Vice President
+Tan Jiong
+Li Yunze
+Hu Hao
+July 2015-
+52
+Independent Non-executive Director
+Shen Si
+March 2017–March 2020
+63
+Non-executive Director
+Dong Shi
+August 2017-August 2020
+46
+Female
+Non-executive Director
+Mei Yingchun
+March 2015-March 2018
+59
+Male
+Non-executive Director
+Fei Zhoulin
+February 2015-February 2018
+54
+Male
+Zheng Fuqing
+March 2015-March 2018
+58
+Male
+Non-executive Director
+Cheng Fengchao
+Senior Executive Vice President
+December 2016–December 2019
+55
+Male
+Executive Director,
+Wang Jingdong
+Male
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee of
+the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of People's
+Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the Technical
+Committee of the International Organization of Securities Commissions, a Non-executive Director of Global Digital Creations
+Holdings Limited. He was an Independent Non-executive Director of Link Management Limited, which is the Manager of Link
+Real Estate Investment Trust. He was also an Independent Non-executive Director of China Shenhua Energy Company Limited,
+52
+Ye Donghai
+Female
+Independent Non-executive Director
+Sheila Colleen Bair
+April 2016-April 2019
+62
+Male
+Independent Non-executive Director
+Yang Siu Shun
+April 2015-April 2021
+71
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+August 2012-December 2018
+53
+Male
+Independent Non-executive Director
+Hong Yongmiao
+May 2012-June 2018
+68
+Male
+Independent Non-executive Director
+October 2017-October 2020
+54
+Male
+Non-executive Director
+Or Ching Fai
+August 2017-August 2020
+Annual Report 2017
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Directors, Supervisors, Senior Management, Employees and Institutions
+58.24
+No
+Li Yunze
+Tan Jiong
+46.72
+11.52
+58.24
+46.72
+11.52
+58.24
+Wang Bairong
+89.23
+11.52
+27.85
+Guan Xueqing
+89.23
+30.66
+119.89
+2222
+No
+No
+No
+No
+Directors and Supervisors Leaving Office
+Qian Wenhui
+51.91
+117.08
+46.72
+Hu Hao
+No
+30.00
+Yes
+30.75
+30.75
+Yes
+85.40
+26.72
+112.12
+No
+Hui Ping
+5.00
+5.00
+No
+Huang Li
+5.00
+5.00
+No
+Qu Qiang
+27.50
+27.50
+No
+Shen Bingxi
+No
+Wang Lin
+46.72
+11.52
+58.24
+11.52
+Wang Xiaoya
+Ge Rongrong
+Fu Zhongjun
+Corporate banking
+Management
+Bachelor
+52.5%
+11.2%
+Associate
+30.1%
+6.4%
+Below associate
+11.4%
+Risk and compliance
+5.8%
+Master
+5.9%
+management
+3.3%
+Doctorate
+0.1%
+IT
+Other financial businesses
+3.1%
+Non-banking business
+1.1%
+Others
+14.8%
+Does not include labor dispatched for services totaling 141 persons, of whom 34 were dispatched to major domestic subsidiaries.
+ICBC
+management
+30.00
+Educational Background of Employees
+14.8%
+Kenneth Patrick Chung
+11.00
+83
+63.43
+No
+Yes
+Yes
+Yes
+Yes
+Annual Report 2017
+87
+Directors, Supervisors, Senior Management, Employees and Institutions
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2) According to the requirements of relevant government authorities, the total final remuneration payable to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors, Shareholder Supervisors and
+other Senior Management members is still subject to final confirmation by relevant government authorities. Additional details of
+remuneration will be disclosed when they have been determined.
+(3) During the reporting period, Mr. Cheng Fengchao, Mr. Zheng Fuqing, Mr. Fei Zhoulin, Ms. Mei Yingchun, Mr. Dong Shi,
+Ms. Wang Xiaoya, Ms. Ge Rongrong and Mr. Fu Zhongjun were paid by Huijin.
+(4) Fees of Mr. Hui Ping and Mr. Huang Li are their allowances obtained as Employee Supervisors of the Bank, excluding their
+remuneration with the Bank in accordance with the employee remuneration system.
+(5) As the Bank's Independent Non-executive Directors served as directors or senior management of other legal persons or
+organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations became related
+parties of the Bank. During the reporting period, the Bank's Independent Non-executive Directors obtained remuneration from
+such related parties. Except to the extent of the afore-mentioned circumstances, none of the Bank's Directors, Supervisors and
+Senior Management were paid by the Bank's related parties during the reporting period.
+(6)
+For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+Basic Information on Employees and Institutions
+As at the end of 2017, the Bank had a total of 453,048¹ employees, representing a decrease of 8,701 as compared to the
+end of the previous year, of whom 6,014 were employees in domestic subsidiaries and 15,012 were local employees in
+overseas institutions.
+1
+88
+Employee Specialization
+Personal banking
+39.5%
+Finance, accounting, treasury
+operations and operational
+Yes
+11.00
+43.67
+Wang Bairong, Chief Risk Officer
+Mr. Wang has served as Chief Risk Officer of the Bank since July 2016. He began his career in 1986. He joined ICBC in
+1991 and previously served as Assistant to Head of Zhejiang Branch and Head of Shaoxing Branch, Deputy Head of Zhejiang
+Branch and General Manager of the Banking Department of Zhejiang Branch, and Deputy Head (person in charge) and
+Head of Chongqing Branch. Mr. Wang graduated from the Party School of the Central Committee of C.P.C. and obtained a
+Master's degree in Economics. He is a senior economist.
+Guan Xueqing, Board Secretary
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as Head of Suining
+Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of Frankfurt Branch,
+Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General Manager of Banking Department of Sichuan
+Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan was also General Manager of Corporate
+Strategy and Investor Relations Department of the Bank. He graduated from the Southwestern University of Finance and
+Economics and obtained a Doctorate degree in Economics. He is a senior economist.
+Mr. Cheng Fengchao, Mr. Zheng Fuqing, Mr. Fei Zhoulin, Ms. Mei Yingchun, Mr. Dong Shi and Mr. Ye Donghai were
+recommended by Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please
+refer to the section headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders — Interests
+and Short Positions Held by Substantial Shareholders and Other Persons" for further details.
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Appointment and Removal
+◆ Directors
+At the Annual General Meeting for the Year 2015 held on 24 June 2016, Mr. Shen Si was appointed as Independent Non-
+executive Director of the Bank, and his qualification was approved by CBRC in March 2017. At the First Extraordinary
+General Meeting of 2016 held on 29 November 2016, Ms. Sheila Colleen Bair was appointed as Independent Non-executive
+Director of the Bank, and her qualification was approved by CBRC in March 2017. At the Annual General Meeting for the
+Year 2016 held on 27 June 2017, Ms. Mei Yingchun, Mr. Dong Shi and Mr. Ye Donghai were appointed as Non-executive
+Directors of the Bank. The qualifications of Ms. Mei Yingchun and Mr. Dong Shi were approved by CBRC in August 2017,
+and the qualification of Mr. Ye Donghai was approved by CBRC in October 2017.
+86
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank. In March 2017, due to expiration of his term of office, Mr. Kenneth Patrick Chung ceased to act as Independent
+Non-executive Director of the Bank. In June 2017, Ms. Wang Xiaoya and Ms. Ge Rongrong ceased to act as Non-executive
+Directors of the Bank due to change of job assignments.
+Supervisor
+On 5 January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors of
+the Bank due to change of job assignments.
+Annual Remuneration
+Remuneration from the Bank
+Contribution by the
+Unit: RMB10,000
+employer to social
+insurance, housing
+allowance,
+Remuneration
+paid
+annuities, and
+additional medical
+Other
+monetary
+Name
+Mr. Tan has served as Senior Executive Vice President of the Bank since January 2017. He joined Bank of China (BOC) in
+June 1988. He previously served as Deputy General Manager (person in charge) and General Manager of Tibet Branch, and
+General Manager of Yunnan Branch of BOC, Chairman of Bank of China Investment Management Co., Ltd. and General
+Manager of Guangdong Branch of BOC. Mr. Tan graduated from Wuhan University and obtained a Doctorate degree in
+Economics. He is a senior economist.
+(before tax)
+Tan Jiong, Senior Executive Vice President
+Directors, Supervisors, Senior Management, Employees and Institutions
+Bank of China Limited and China Life Insurance Company Limited. Mr. Neoh currently serves as an Independent Non-executive
+Director of CITIC Limited and New China Life Insurance Company Limited. He graduated from the University of London with a
+Bachelor's degree in Law. He is Honorary Doctorate of Law of Chinese University of Hong Kong and Open University of Hong
+Kong and Honorary Doctorate of Social Sciences of Lingnan University. He was elected Honorary Fellow of the Hong Kong
+Securities Institute and Academician of the International Euro-Asian Academy of Sciences. Mr. Neoh was appointed as Senior
+Counsel in Hong Kong. He is a barrister of England and Wales. He was admitted to the State Bar of California.
+Yang Siu Shun, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers and Chairman of PricewaterhouseCoopers Asia-Pacific region. Mr. Yang currently
+serves as a member of the 13th National Committee of the Chinese People's Political Consultative Conference, a member
+of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority, a member of the board of directors of the
+Hong Kong Jockey Club, Vice Chairman of the Council of the Open University of Hong Kong, director and chairman of Audit
+Committee of Hang Seng Management College, and an independent non-executive director of the Tencent Holdings Limited.
+Mr. Yang graduated from the London School of Economics and Political Science. He holds the qualification of the Association
+of Chartered Certified Accountants, and is a senior member of the Institute of Chartered Accountants in England and Wales,
+the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of Management Accountants.
+43.67
+Sheila Colleen Bair, Independent Non-executive Director
+Ms. Bair has served as Independent Non-executive Director of the Bank since March 2017. Previously, she served as the
+Research Director, Deputy Counsel and Counsel to Robert Dole. She was a Commissioner of the Commodity Futures Trading
+Commission, later served as a senior vice president for government relations at the New York Stock Exchange, and then
+as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. She was President of Washington
+College, the Dean's Professor of Financial Regulatory Policy at the University of Massachusetts-Amherst, Chair of the
+Federal Deposit Insurance Corporation and Senior Advisor to The Pew Charitable Trusts. She is the current Chair Emeritus
+of the Systemic Risk Council. She is a founding board member of The Volcker Alliance, a non-profit organization. She is
+Independent Non-Executive Director of Thomson Reuters Corp., Host Hotels & Resort Inc., Avant Inc., Paxos Trust Company,
+LLC and its holding company Kabompo Holdings, Ltd. She also serves on the International Advisory Council to China Banking
+Regulatory Commission and the International Advisory Board for Santander. She received a Bachelor's Degree in philosophy
+from the University of Kansas, and a juris doctorate from the University of Kansas School of Law. She holds honorary
+doctorates from Amherst College, Drexel University, the University of Kansas, and the University of Massachusetts.
+Shen Si, Independent Non-executive Director
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development Bank,
+Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of Shanghai
+Pudong Development Bank. He had participated in important events in Shanghai Pudong Development Bank such as its initial
+public offering, four issues of new shares, acquisition of credit cooperative and its formation of strategic partnership with
+Citibank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA degree. He is a senior economist.
+Zhang Wei, Shareholder Supervisor
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of the Bank
+since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor of the Board of Supervisors, General
+Manager of the Legal Affairs Department and Chief of Consumer Protection Office of the Bank. He graduated from Peking
+University with a Doctorate degree in Law and is a research fellow.
+84
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Hui Ping, Employee Supervisor
+Mr. Hui has served as Employee Supervisor of the Bank since September 2015. He joined ICBC in 1984 and has served as
+Deputy Secretary of the Party Discipline Committee and concurrently as Director of the Discipline Enforcement Department
+of the Bank since 2015. He was Deputy Head and Head of Shaanxi Branch and General Manager of the Internal Control and
+Compliance Department of the Bank. Mr. Hui graduated from Xiamen University and received a Doctorate degree in Finance.
+He is a senior economist.
+Huang Li, Employee Supervisor
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently the
+General Manager of Internal Audit Bureau of the Bank. He served as Deputy General Manager and General Manager of the
+Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC from December 1998 to June 2015. Mr.
+Huang graduated from The University of Hong Kong with an MBA degree. He is a senior economist.
+Qu Qiang, External Supervisor
+Mr. Qu has served as External Supervisor of the Bank since December 2015. Currently, he is a professor and tutor for PhD
+students of Renmin University of China, Director of China Fiscal and Financial Policy Research Center (a key research center
+of humanities and social sciences of the Ministry of Education), Deputy Director of Financial and Securities Institute of
+Renmin University of China, a council member of China Finance Society, a member of China Finance 40 Forum and External
+Expert of China Development Bank. He was Head of the Applied Finance Department of the School of Finance, Renmin
+University of China. Currently, he is also External Supervisor of Bank of Beijing. Mr. Qu graduated from Renmin University of
+China, and received a Doctorate degree in Economics.
+Shen Bingxi, External Supervisor
+Mr. Shen has served as External Supervisor of the Bank since June 2016. He previously served as the Vice Chief of the
+Financial Market Division of the Financial System Reform Department, Chief of the System Reform Division of the Policy
+Study Office, and Chief of the Monetary Policy Research Division of the Research Bureau of the PBC, Chief Representative of
+the PBC Representative Office in Tokyo, Deputy Director-general and Director-level Inspector of Financial Market Department
+of the PBC, and Non-executive Director of Agricultural Bank of China. Mr. Shen is currently guest professor of Tsinghua
+University, Zhejiang University and Nankai University. Mr. Shen graduated from Renmin University of China, and received a
+Doctorate degree in Economics. He is a research fellow.
+Wang Lin, Secretary of Party Discipline Committee
+Mr. Wang has served as Secretary of Party Discipline Committee of the Bank since July 2015. He began his career in 1987.
+Prior to joining ICBC, he once served as Director of Fund Supervision Department and Director of Securities and Fund
+Institution Supervision Department of CSRC. Mr. Wang graduated from Tsinghua University, and received a Doctorate
+degree in Management.
+Hu Hao, Senior Executive Vice President
+Mr. Hu has served as Senior Executive Vice President of the Bank since November 2015. Mr. Hu joined ICBC in 1984, serving
+successively as Deputy General Manager of the Industrial and Commercial Credit Department, Deputy General Manager of
+the Credit Management Department, General Manager of the Institutional Banking Department, General Manager of the
+International Banking Department, President of Chinese Mercantile Bank and Chairman of Industrial and Commercial Bank
+of China Luxembourg S.A. Besides, he once served as Deputy Director-General of Construction and Administration Bureau
+of South-to-North Water Diversion Middle Route Project, a Director of Taiping General Insurance Company Limited, Taiping
+Life Insurance Co., Ltd. and Xiamen International Bank, General Manager of Corporate Strategy and Investor Relations
+Department and Board Secretary of the Bank. He concurrently serves as Vice Chairman of Standard Bank Group Limited and
+Chairman of ICBC (London) PLC. Mr. Hu graduated from Hunan University, and received a Doctorate degree in Economics
+from the Graduate School of the Chinese Academy of Social Sciences. He is a researcher.
+Annual Report 2017
+85
+Li Yunze, Senior Executive Vice President
+insurances
+Mr. Li has served as Senior Executive Vice President of the Bank since October 2016. He joined China Construction Bank in
+1993 and held several positions including Deputy General Manager of Tianjin Branch, Deputy General Manager of Planning
+and Finance Department and General Manager of Strategic Planning & Equity Investment Department of the Head Office,
+and General Manager of Chongqing Branch. Mr. Li graduated from Tianjin University. He obtained a Master's degree in
+Executive Business Administration from Peking University. He is a senior economist.
+income
+58.24
+No
+Yes
+Yes
+Yes
+Mei Yingchun
+Dong Shi
+Ye Donghai
+Or Ching Fai
+Yes
+Yes
+47.00
+47.00
+Yes
+Hong Yongmiao
+Anthony Francis Neoh
+Yang Siu Shun
+Sheila Colleen Bair
+Shen Si
+Zhang Wei
+47.00
+47.00
+Fees
+Yes
+Yes
+44.50
+44.50
+No
+58.24
+No
+11.52
+(1)
+(4)
+No
+Yi Huiman
+51.91
+11.52
+Gu Shu
+51.91
+(2)
+Zhang Hongli
+46.72
+11.52
+Wang Jingdong
+(3)
+or other related
+63.43
+11.52
+Cheng Fengchao
+Zheng Fuqing
+Fei Zhoulin
+Total
+remuneration
+before tax
+Obtain
+remuneration from
+shareholder entities
+No
+parties or not
+(5)=(1)+(2)+(3)+(4)
+63.43
+46.72
+Report of the Board of Supervisors
+70
+Shareholding of Substantial Shareholders
+Details of Changes in Share Capital and
+74
+91
+Employees and Institutions
+82
+Corporate Governance Report
+Report of the Board of Directors
+108
+Directors, Supervisors, Senior Management,
+Economic, Financial and
+Business Overview
+68
+112
+Regulatory Environments
+11
+― Financial Statements Analysis
+12
+27
+Social Responsibility
+11
+47
+― Capital Management
+64
+Outlook
+67
+· Other Information Disclosed Pursuant to
+Regulatory Requirements
+Offshore Preference Share
+Significant Events
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+Organizational Chart
+Global Systemically Important Banks
+Hong Kong Listing Rules
+Huijin
+ICBC (Almaty)
+ICBC (Argentina)
+ICBC (Asia)
+Former CBRC
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by
+the former CBRC in June 2012
+China Investment Corporation
+Company Law of the People's Republic of China
+China Securities Regulatory Commission
+Banks undertaking key functions with global features in the financial markets as
+released by the Financial Stability Board
+Discussion and Analysis
+Former China Banking Regulatory Commission
+China Banking and Insurance Regulatory Commission
+115
+CSRC
+CIC
+118
+Auditor's Report and Financial Statements
+120
+2018 Ranking and Awards
+319
+List of Domestic and
+Company Law
+Overseas Branches and Offices
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Articles of Association
+Bank ICBC (JSC)
+Capital Regulation
+CBIRC
+323
+President's Statement
+144,973
+8
+5
+Financial Highlights
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Data
+2018
+2017
+2016
+2015
+2014
+Annual operating results (in RMB millions)
+Net interest income
+572,518
+522,078
+471,846
+Annual Report 2018
+507,867
+Net fee and commission income
+145,301
+139,625
+143,391
+132,497
+Operating income
+725,121
+675,654
+641,681
+668,733
+634,858
+Operating expenses
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Impairment losses
+493,522
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong
+KPMG
+International auditors
+Corporate Information
+Financial Highlights
+Important Notice
+Definitions
+CONTENTS
+The Bank was ranked the 1st place among the Top 1000
+World Banks by The Banker, ranked 1st place in the
+Global 2000 listed by Forbes and topped the sub-list of
+commercial banks of the Global 500 in Fortune for the
+sixth consecutive year, and took the 1st place among
+the Top 500 Banking Brands of Brand Finance for the
+third consecutive year.
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its
+capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and
+following the business rules of commercial banks to
+strive to be a century-old bank. It also stays committed
+to seeking progress with innovation while maintaining
+stability, continuously enhances the strategy of mega
+retail, mega asset management, mega investment
+banking as well as international and comprehensive
+development, and actively embraces the internet. The
+Bank unswervingly delivers specialized services, and
+pioneers a specialized business model, thus making it
+"a craftsman in large banking".
+Through its continuous endeavor and stable
+development, the Bank has developed into the leading
+bank in the world, possessing an excellent customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek further
+development and adheres to creating value through
+services while providing a comprehensive range of
+financial products and services to 7,033 thousand
+corporate customers and 607 million personal
+customers. The Bank has been consciously integrating
+the social responsibilities with its development strategy
+and operation and management activities, and gaining
+wide recognition in the aspects of promoting inclusive
+finance, supporting targeted poverty relief, protecting
+environment and resources and participating in public
+welfare undertakings.
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Company Profile
+Annual Report 2018
+EUR Preference Shares Stock Code: 4604
+RMB Preference Shares Stock Code: 84602
+USD Preference Shares Stock Code: 4603
+Stock Code: 1398
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+H
+ICBC (E
+CPAs (Practicing): Li Li and He Qi
+District, Beijing, China
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue, Dongcheng
+KPMG Huazhen LLP
+Domestic auditors
+Name and office address of auditors
+245600 =
+Stock code: 360011
+Domestic Preference Share
+Stock code: 84602
+Stock name: ICBC CNHPREF1-R
+Stock name: ICBC EURPREF1
+Stock code: 4604
+Stock code: 4603
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC USDPREF1
+Shanghai Stock Exchange
+Stock name: I
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Risk Management
+Industrial and Commercial Bank of China (Asia) Limited
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+Selected media for information disclosure
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Telephone: 86-10-66108608
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Guan Xueqing
+Board Secretary and Company Secretary
+Gu Shu and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and complaint hotline: 86-95588
+Telephone: 86-10-66106114
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Registered address and office address
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.506 (pre-tax) for each
+ten shares for 2018. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2018.
+The Bank did not convert capital reserve to share capital.
+The Board of Directors of Industrial and Commercial Bank of China Limited
+28 March 2019
+Mr. Gu Shu, Vice Chairman, President and President in charge of finance of the Bank, and Mr. Zhang Wenwu, General
+Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that the financial
+statements contained in the Annual Report are authentic, accurate and complete.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis - Risk Management" for detailed information.
+Website designated by CSRC for publication of
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+4
+Corporate Information
+Legal name in Chinese
+中國工商銀行股份有限公司(“中國工商銀行")
+Legal name in English
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+ICBC
+The 2018 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+the annual report in respect of A shares
+The "HKEXnews" website of SEHK for publication of
+the annual report in respect of H shares
+www.hkexnews.hk
+194,203
+H Share
+Stock code: 601398
+Stock name: 工商銀行
+Shanghai Stock Exchange
+A Share
+Place where shares are listed, and their names and
+codes
+Board of Directors' Office of the Bank
+Location where copies of this annual report are kept
+Facsimile: 852-28650990
+Telephone: 852-28628555
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong
+Computershare Hong Kong Investor Services Limited
+H Share
+Telephone: 86-4008058058
+Pudong New Area, Shanghai, China
+3/F China Insurance Building, 166 Lujiazui Dong Road,
+Legal advisors
+Mainland China
+King & Wood Mallesons
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+Haiwen & Partners
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+www.sse.com.cn
+Hong Kong, China
+9/F, Three Exchange Square, Central, Hong Kong
+Linklaters
+10/F, Alexandra House, Chater Road, Central, Hong Kong
+Share Registrars
+A Share
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+Allen & Overy
+The 2018 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 28 March 2019. All directors of the Bank attended the meeting.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (Malaysia) Berhad
+ICBC
+2
+New Financial Instrument Standards
+MOF
+IFRSS
+ICBCFS
+ICBC-AXA
+ICBC Standard Bank
+ICBC Leasing
+ICBC Investment
+ICBC International
+ICBC Credit Suisse Asset Management
+ICBC (USA)
+ICBC (Turkey)
+ICBC (Thai)
+ICBC (Austria)
+ICBC (Brasil)
+ICBC (Canada)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (London)
+ICBC (Macau)
+Industrial and Commercial Bank of China (New Zealand) Limited
+ICBC (Malaysia)
+ICBC (New Zealand)
+ICBC (Peru)
+ICBC Austria Bank GmbH
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Macau) Limited
+ICBC (Mexico)
+ICBC PERU BANK
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC Turkey Bank Anonim Şirketi
+Standard Bank
+State Council
+The Bank/The Group
+The Guiding Opinions on Regulating the Asset Management Business of Financial
+Institutions jointly promulgated by PBC, CBIRC, CSRC and State Administration
+of Foreign Exchange in 2018 and relevant rules
+The People's Bank of China
+Accounting Standards for Business Enterprises promulgated by MOF
+SSE
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Shanghai Stock Exchange
+Standard Bank Group Limited
+The State Council of the People's Republic of China
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial
+Bank of China Limited and its subsidiaries
+Annual Report 2018
+3
+The Stock Exchange of Hong Kong Limited
+Industrial and Commercial Bank of China (Argentina) S.A.
+SEHK
+PRC GAAP
+Industrial and Commercial Bank of China (USA) NA
+ICBC Credit Suisse Asset Management Co., Ltd.
+ICBC International Holdings Limited
+ICBC Financial Asset Investment Co., Limited
+ICBC Financial Leasing Co., Ltd.
+ICBC Standard Bank PLC
+Securities and Futures Ordinance of
+Hong Kong
+ICBC-AXA Assurance Co., Ltd.
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting
+Standards
+Ministry of Finance of the People's Republic of China
+International Financial Reporting Standard 9 Financial Instruments that was
+promulgated by International Accounting Standards Board and became
+effective on 1 January 2018 as well as Accounting Standard for Business
+Enterprises No. 22 Recognition and Measurement of Financial Instruments,
+Accounting Standard for Business Enterprises No. 23 Transfer of Financial
+Assets, Accounting Standard for Business Enterprises No. 24 - Hedging and
+Accounting Standard for Business Enterprises No. 37 — Presentation of Financial
+Instruments that were promulgated by MOF and became effective on
+1 January 2018
+Definitions
+New Rules on Asset Management
+PBC
+Industrial and Commercial Bank of China Financial Services LLC
+186,194
+ratio
+220,835
+2.26
+Ratio of net fee and commission income
+20.04
+20.67
+22.59
+21.44
+20.87
+to operating income
+Cost-to-income ratio (6)
+25.71
+26.45
+27.40
+26.69
+27.93
+Asset quality (%)
+Non-performing loans ("NPLs") ratio (7)
+1.52
+2.22
+2.39
+2.68
+Allowance to total loans ratio (9)
+206.90
+156.34
+2.16
+136.69
+175.76
+Allowance to NPLs (8)
+1.13
+1.50
+1.62
+1.55
+154.07
+2.35
+2.01
+1.81
+2018
+2017
+2016
+2015
+2014
+Profitability (%)
+Return on average total assets(1)
+1.11
+1.14
+1.20
+1.30
+1.40
+Return on weighted average equity(2)
+13.79
+14.35
+15.24
+17.10
+Return on risk-weighted assets (5)
+2.66
+2.47
+2.16
+2.22
+2.30
+1.89
+Net interest margin (4)
+2.30
+2.02
+2.10
+2.16
+Net interest spread(3)
+19.96
+2.46
+Financial Highlights
+2.34
+Core tier 1 capital adequacy ratio (10)
+(6) Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+Quarterly Financial Data
+(In RMB millions)
+Operating income
+2018
+2017
+Q1
+183,185
+Q2
+Q3
+Q4
+Q1
+Q2
+Q3
+Q4
+ICBC
+President Gu Shu
+President's Statement
+7
+Annual Report 2018
+124,372 696,370 (158,769) 109,306 237,236 370,254 54,068
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+62,160
+company
+Net profit attributable to equity 78,802 81,640 79,185 58,049
+holders of the parent
+168,553 169,526 169,389
+75,786 77,209 75,004 58,050
+168,186
+178,578 185,241
+178,117
+Net cash flows from operating
+activities
+Capital adequacy (%)
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+12.98
+12.77
+12.87
+12.87
+11.92
+Tier 1 capital adequacy ratio (10)
+13.45
+13.27
+13.42
+13.48
+12.19
+Capital adequacy ratio (10)
+15.39
+15.14
+14.61
+15.22
+14.53
+Notes: (1)
+(2)
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC
+60.53
+59.51
+60.34
+60.96
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+62.06
+7.46
+8.11
+8.21
+8.21
+8.47
+Total equity to total assets ratio
+Risk-weighted assets to total assets
+Financial Indicators
+ICBC
+(4) The rating results are in the form of "long-term foreign currency deposits rating".
+1,131,764
+201,457
+As at the end of reporting period (in RMB millions)
+Total assets
+27,699,540
+Total loans and advances to customers
+Allowance for impairment losses
+15,419,905
+413,177
+26,087,043
+14,233,448
+340,482
+24,137,265
+13,056,846
+289,512
+22,209,780 20,609,953
+11,933,466
+11,026,331
+280,654
+257,581
+on loans (1)
+Investment
+Total liabilities
+2,330,001
+Equity attributable to equity holders
+1,539,239
+2,265,860
+2,016,799
+16,086,368
+239,221
+16,514,992
+20,409,261
+4,433,237
+5,009,963
+6,754,692 5,756,704 5,481,174
+25,354,657 23,945,987 22,156,102
+21,408,934 19,562,936 18,113,931
+1,814,495 1,706,549
+Due to banks and other financial
+institutions
+Due to customers
+19,072,649
+2,127,491
+770,864
+Net cash flows from operating activities
+218,674
+161,594
+127,769
+87,894
+86,993
+56,729
+Operating profit
+369,324
+361,691
+360,675
+360,905
+359,455
+Profit before taxation
+372,413
+364,641
+363,279
+363,235
+of the parent company
+275,811
+277,131
+278,249
+286,049
+297,676
+724,133
+Net profit attributable to equity holders
+277,720
+279,106
+287,451
+298,723
+Net profit
+361,612
+276,286
+1,969,751
+1,789,474
+1,530,859
+4.80
+4.23
+Basic earnings per share
+0.82
+0.79
+0.77
+0.77
+0.78
+Diluted earnings per share
+0.82
+0.79
+0.77
+0.77
+0.78
+Credit rating
+S&P(4)
+Moody's (4)
+(3) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments at
+the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(2)
+6
+Notes: (1) Calculated by adding impairment losses of loans and advances to customers measured at amortised cost with impairment losses of
+loans and advances to customers measured at fair value through other comprehensive income.
+Calculated in accordance with the Capital Regulation.
+A1
+A
+5.29
+A1
+A
+A
+A1
+A
+A1
+A
+A1
+5.73
+6.30
+Net asset value per share(3)
+Net tier 1 capital (2)
+1,486,733
+1,701,495
+1,874,976
+2,030,108
+2,232,033
+2,312,143
+Net core tier 1 capital (2)
+356,407
+356,407
+356,407
+356,407
+Share capital
+of the parent company
+353,495
+193,112
+2,110,060
+1,781,062
+Per share data (in RMB yuan)
+12,475,939
+13,216,687
+14,564,617
+15,902,801
+17,190,992
+1,954,770
+Risk-weighted assets (2)
+2,012,103
+2,127,462
+2,406,920
+2,644,885
+Net capital base(2)
+1,521,233
+1,812,137
+Stock code: 1398
+1/1
+ICBC
+Management
+6.1%
+Below associate
+10.2%
+Risk and compliance
+5.7%
+Master
+management
+IT
+3.4%
+Doctorate
+7.1%
+0.2%
+Other financial businesses
+3.4%
+Non-banking business
+Others
+1.1%
+12.5%
+As at the end of 2018, the Bank had a total of 16,820 institutions, representing a decrease of 68 as compared with the
+end of the previous year. Among them, there were 16,394 domestic institutions and 426 overseas institutions. Domestic
+institutions included the Head Office, 36 tier-one branches and branches directly managed by the Head Office, 446 branches
+in capital cities and tier-two branches, 15,752 outlets, 29 Head Office-level profitability units along with their directly
+managed institutions and branches, and 130 subsidiaries and their branches.
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES
+Assets
+Item
+(in RMB millions)
+Number of
+(%) institutions
+Percentage
+(%)
+Number of
+employees
+Percentage
+27.9%
+Associate
+11.5%
+Corporate banking
+No
+41.10
+No
+Yes
+39.17
+Yes
+46.28
+No
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2) According to the requirements of relevant government authorities, the total final remuneration payable to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors, Shareholder Supervisors and
+other Senior Management members is still subject to final confirmation by relevant government authorities. Additional details of
+remuneration will be disclosed when they have been determined.
+(3) Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Dong Shi, Mr. Ye Donghai and Mr. Fei Zhoulin were
+recommended by Huijin to serve as Non-executive Directors of the Bank and were paid by Huijin during the reporting period.
+(4) Fees of Mr. Hui Ping and Mr. Huang Li are their allowances obtained as Employee Supervisors of the Bank, excluding their
+remuneration with the Bank in accordance with the employee remuneration system.
+(5) As the Bank's Independent Non-executive Directors served as directors or senior management of other legal persons or
+organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations became related
+parties of the Bank. During the reporting period, the Bank's Independent Non-executive Directors obtained remuneration from
+such related parties. Except to the extent of the afore-mentioned circumstances, none of the Bank's Directors, Supervisors and
+Senior Management was paid by the Bank's related parties during the reporting period.
+(%)
+(6) For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+89
+Directors, Supervisors, Senior Management, Employees and Institutions
+Basic Information on Employees and Institutions
+As at the end of 2018, the Bank had a total of 449,296 employees, representing a decrease of 3,752 as compared with
+the end of the previous year. Among them, 6,660 were employees in domestic subsidiaries and 15,687 were employees in
+overseas institutions.
+Employee Specialization
+Educational Background of Employees
+Personal banking
+Finance, accounting, treasury
+41.5%
+14.8%
+operations and operational
+management
+Bachelor
+54.6%
+Annual Report 2018
+30.73
+Head Office
+35.4
+Western China
+3,530,531
+12.7
+3,758
+22.3
+91,609
+20.4
+Northeastern China
+1,120,364
+4.0
+1,663
+9.9
+46,898
+10.4
+Overseas and others
+3,695,699
+13.3
+556
+3.3
+22,347
+5.0
+Eliminated and
+(6,856,032)
+(24.8)
+undistributed assets
+Total
+27,699,540
+19.9
+89,233
+21.0
+3,530
+30
+0.2
+17,047
+3.8
+Yangtze River Delta
+5,860,977
+21.2
+2,519
+15.0
+61,834
+13.8
+Pearl River Delta
+Bohai Rim
+9,803,222
+3,700,969
+2,037
+12.1
+49,548
+11.0
+4,085,516
+14.8
+2,727
+16.2
+70,780
+15.7
+Central China
+2,758,294
+10.0
+13.4
+No
+5.77
+No
+Zheng Fuqing
+Yes
+Mei Yingchun
+Yes
+Dong Shi
+Ye Donghai
+Hong Yongmiao
+Anthony Francis Neoh
+Yang Siu Shun
+Sheila Colleen Bair
+Yes
+Yes
+47.00
+47.00
+Yes
+44.00
+44.00
+Yes
+44.00
+44.00
+Yes
+36.50
+36.50
+Yes
+Shen Si
+Nout Wellink
+41.33
+Yes
+Cheng Fengchao
+Gu Shu
+No
+Directors, Supervisors, Senior Management, Employees and Institutions
+Annual Remuneration
+Name
+Remuneration
+paid
+(before tax)
+(1)
+54.60
+Remuneration from the Bank
+Contribution by the
+employer to social
+Unit: RMB10,000
+insurance, housing
+allowance,
+annuities, and
+additional medical
+41.33
+Obtain
+insurances
+Fees
+income
+Total
+remuneration
+before tax
+remuneration from
+shareholder entities
+or other related
+parties or not
+(2)
+(3)
+(4)
+(5)=(1)+(2)+(3)+(4)
+12.69
+67.29
+Other
+monetary
+Yes
+2.50
+2.50
+61.83
+113.56
+114.84
+22222
+No
+No
+No
+No
+No
+Directors, Supervisors and Senior Management Leaving Office
+Yi Huiman
+54.60
+12.69
+Qian Wenhui
+61.83
+4.55
+Zhang Hongli
+24.57
+6.16
+Wang Jingdong
+32.76
+8.34
+Fei Zhoulin
+Or Ching Fai
+Li Yunze
+36.86
+39.17
+9.42
+67.29
+1.22
+100.0
+-
+25.00
+No
+Zhang Wei
+87.99
+20.35
+108.34
+No
+Hui Ping
+Huang Li
+Qu Qiang
+Shen Bingxi
+Hu Hao
+49.14
+12.69
+Tan Jiong
+No
+49.14
+Wang Bairong
+92.19
+21.37
+Guan Xueqing
+92.19
+22.65
+5.00
+5.00
+No
+5.00
+5.00
+No
+25.00
+12.69
+16,820
+Percentage
+449,296
+2/2
+9/10
+5/6
+ཚ་།།
+7/8
+5/6
+3/3
+Independent Non-executive Directors
+Hong Yongmiao
+2/2
+10/10
+7/7
+6/6
+8/8
+6/6
+3/3
+Anthony Francis Neoh
+2/2
+10/10
+5/6
+8/8
+5/6
+2/3
+Yang Siu Shun
+2/2
+10/10
+5/6
+Ye Donghai
+7/7
+10/10
+2/2
+General
+Meeting
+Board of
+Directors
+Strategy
+Committee
+Audit Management
+Committee Committee
+Nomination Compensation
+Committee Committee
+Control
+Committee
+Executive Directors
+Gu Shu
+2/2
+10/10 717 - 6/6 3/3 -
+Non-executive Directors
+Cheng Fengchao
+5/6
+2/2
+-
+6/6
+8/8
+Zheng Fuqing
+2/2
+10/10
+7/7
+8/8
+Mei Yingchun
+2/2
+9/10
+717 -- -2/3 -
+Dong Shi
+9/10
+Directors
+2/3
+Sheila Colleen Bair
+8/8
+7/7
+6/6
+5/5
+3/3
+3/3
+Notes: (1)
+"Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+(2)
+(3)
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+(4) Mr. Nout Wellink was appointed as Independent Non-executive Director of the Bank in December 2018.
+Special Committees of the Board of Directors
+The Board of Directors of the Bank has established six special committees, namely, the Strategy Committee, the Audit
+Committee, the Risk Management Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee. Except the Strategy Committee, chairmen of all the other committees were
+assumed by Independent Non-executive Directors. More than half of the members of the Audit Committee, the Nomination
+Committee, the Compensation Committee and the Related Party Transactions Control Committee were Independent
+Non-executive Directors. During the reporting period, the performance of duties by the special committees of the Board of
+Directors is set out below:
+Annual Report 2018
+97
+Corporate Governance Report
+◆ Strategy Committee
+The Strategy Committee is mainly responsible for considering the Bank's strategic development plan, risk events that bear
+material influence on the overall situation, business and institutional development plan, major investment and financing
+plan, green credit strategy, consumer protection strategy, fulfillment of social responsibilities in terms of environment,
+community and governance and other aspects, and other major matters critical to the Bank's development, making
+recommendations to the Board of Directors, and examining and assessing the soundness of the corporate governance
+framework to ensure financial reporting, risk management and internal control are compliant with corporate governance
+criteria of the Bank. As at the disclosure date of the results, the Strategy Committee consisted of nine directors, including
+Executive Director Mr. Gu Shu; Independent Non-executive Directors Ms. Sheila Colleen Bair, Mr. Hong Yongmiao,
+Mr. Anthony Francis Neoh and Mr. Nout Wellink; Non-executive Directors Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr.
+Dong Shi and Mr. Ye Donghai. Independent Non-executive Director Ms. Sheila Colleen Bair was Vice Chairman of the
+Committee.
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of the Board of Directors
+held seven meetings, considered 19 proposals including the proposals on the 2018-2020 Strategic Development Plan
+and the 2018-2020 Capital Plan, and heard reports on topics including the capital replenishment of the domestic and
+overseas institutions in 2018, merger and acquisition and equity investment and capital injection plan for institutions to be
+established. The Strategy Committee put forward comments or suggestions on matters including Strategic Development
+Plan, capital management, annual final accounts, assessment plan of the Inclusive Finance Department and consumer
+protection policy.
+◆ Audit Committee
+The Audit Committee is mainly responsible for constantly overseeing the Bank's internal control system, and supervising,
+inspecting and evaluating financial information and internal audit of the Bank and assessing mechanisms for the Bank's
+staff to report misconducts in financial statements, internal control, etc., and assessing the mechanism for the Bank to
+conduct independent and fair investigations and take appropriate actions in relation to the reported matters. As at the
+disclosure date of the results, the Audit Committee consisted of seven directors, including Independent Non-executive
+Directors Mr. Shen Si, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun and Mr. Nout Wellink;
+Non-executive Directors Mr. Cheng Fengchao and Mr. Ye Donghai. Independent Non-executive Director Mr. Shen Si was
+Chairman of the Committee.
+Performance of the Audit Committee During the reporting period, the Audit Committee held six meetings,
+considered 11 proposals including the proposals on the Bank's periodic reports and the Plan for Internal Audit Projects in
+2018, and heard 14 reports including the 2017 Internal Audit Report and the report on internal control audit results. The
+Audit Committee put forward comments or suggestions on matters including the arrangement of internal and external
+audits and development plan, impact of the implementation of new accounting standards, and construction of internal audit
+system and mechanism.
+Reviewing periodic reports
+The Audit Committee periodically reviewed the financial reports of the Bank. It had reviewed and submitted to the Board
+of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also organized and conducted
+an internal control assessment of the Group for 2017 and engaged external auditors to audit the assessment report and
+procedures of the Bank in accordance with the relevant regulatory requirements. Additionally, it enhanced communication
+with external auditors, attached importance to the supervision of external auditors and heard several reports of external
+auditors concerning audit plan, audit results, and management proposals. The Audit Committee also concerned with the
+compliant development of overseas institutions and heard related branches' reports on internal audit work. It strengthened
+field surveys by investigating credit asset quality, credit mechanism and cultural development at branches.
+98
+1/1
+Or Ching Fai
+5/5
+7/7
+2/2
+9/10
+7/7
+7/8
+Shen Si
+2/2
+10/10
+100.0
+8/8
+3/3
+Nout Wellink
+0/1
+Directors Leaving Office
+2/3
+Yi Huiman
+10/10
+5/7
+Zhang Hongli
+1/1
+4/5
+5 --3/5 -
+Wang Jingdong
+6/7
+2/2
+Fei Zhoulin
+1/1
+7/7
+5/5
+2/2
+Related Party
+Transactions
+6/6
+Shareholders'
+Banking
+Promotion
+Committee
+Financial
+Assets Service
+Management
+Committee
+Asset & Liability
+Management
+Committee
+Risk
+Management
+Committee
+Internet Finance
+Promotion
+Committee
+Financial
+Technology
+Development
+Committee
+Inclusive
+Finance
+Promotion
+Committee
+Profitability
+Units
+Risk
+Management
+Department
+Internal Audit
+Bureau
+Internal Audit
+Sub-bureau
+Comprehensive
+Administration
+Departments
+Supporting
+Departments
+Directly
+Controlled
+Institutions
+Domestic
+Institutions
+Overseas
+Institutions
+Note: The above is the corporate governance framework chart as of the end of 2018.
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Responsibilities of the Shareholders' General Meeting
+As the organ of power of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders' General
+Meeting is responsible for, among others, deciding on business policies and significant investment plans of the Bank;
+examining and approving the Bank's annual financial budget, final account proposals, plans for profit distribution and
+loss make-up; electing and replacing directors, supervisors appointed from the shareholder representatives and external
+supervisors; examining and approving work report of the Board of Directors and work report of the Board of Supervisors;
+adopting resolutions on merger, division, dissolution, liquidation, change of corporate form, increase or decrease of the
+Bank's registered capital, issuance of corporate bonds or other securities and public listing, repurchase of the shares and
+issuance of preference shares; and amending the Articles of Association of the Bank.
+Annual Report 2018
+91
+Corporate Governance Report
+Investment
+Promotion
+Committee
+Banking
+Institutional
+Risk
+100.0
+Note: Overseas and other assets include investments in associates and joint ventures.
+90
+ICBC
+Corporate Governance Report
+Corporate Governance Framework
+Shareholders'
+General Meeting
+Board of
+Directors
+Strategy
+Committee
+Risk Management
+Committee
+Marketing
+Management
+Responsibilities of the Board of Directors
+Departments
+Primary reporting line
+Secondary reporting line
+Board of
+Supervisors
+Nomination
+Committee
+Compensation
+Committee
+Related Party
+Transactions Control
+Committee
+Audit Committee
+Management
+Corporate
+Banking
+Promotion
+Committee
+Retail Banking
+Senior
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report its
+work to, the Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the
+Shareholders' General Meeting; implementing the resolutions of the Shareholders' General Meeting; deciding on the
+business plans, investment proposals and development strategies of the Bank; formulating annual financial budget and
+final accounts of the Bank; formulating plans for profit distribution and loss recovery of the Bank; formulating plans for
+the increase or decrease of the Bank's registered capital, capital replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such as risk management system and internal control system, and
+supervising the implementation of such systems; appointing or removing President and the Board Secretary, and appointing
+or removing Senior Executive Vice Presidents and other senior management members (except the Board Secretary) who
+shall be appointed or removed by the Board of Directors under relevant laws according to the nomination of the President
+and deciding on their compensation, bonus and penalty matters; deciding on or authorizing the President to decide on
+the establishment of relevant offices of the Bank; regularly evaluating and improving corporate governance of the Bank;
+managing information disclosure of the Bank; and supervising and ensuring the President and other Senior Management
+members to perform their management duties effectively.
+Promotion
+Committee
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report its work to, the
+Shareholders' General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance
+and due diligence of Directors and Senior Management members; supervising the performance of duties by the Board
+of Directors and the Senior Management; conducting exit audits on Directors and Senior Management members when
+necessary; inspecting and supervising financial activities of the Bank; examining financial information such as financial report,
+business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of Directors;
+inspecting and supervising the business decision-making, risk management and internal control of the Bank and guiding
+the internal audit department of the Bank; supervising the engagement, dismissal, reengagement and audit of the external
+auditor as well as the audit work progress of the Bank; formulating the remuneration plans and performance evaluation
+measures of supervisors, conducting the performance evaluation on supervisors, and reporting to the Shareholders' General
+Meeting for approval; presenting proposals to the Shareholders' General Meeting; proposing to convene an extraordinary
+general meeting, and convening and presiding over the extraordinary general meeting in case the Board of Directors fails
+to perform its duty of convening Shareholders' General Meeting; proposing to convene an interim meeting of the Board of
+Directors.
+ICBC
+Corporate Governance Report
+In the event that the Bank failed to pay the agreed dividend to preference shareholders for three years in aggregate or for
+two consecutive years, from the next day following the date of approval of the proposal not paying the agreed dividend
+for the current year by the Shareholders' General Meeting, preference shareholders shall be entitled to attend and vote
+(together with ordinary shareholders) at the Shareholders' General Meeting. For preference shares the dividend of which is
+non-cumulative, the voting rights shall be temporarily restored until the full payment of the agreed dividend for the current
+year by the Bank.
+Other rights
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis of
+the number of shares held by them; preference shareholders shall be entitled to rights to dividends in priority to payment of
+dividends to ordinary shareholders. Shareholders have other rights conferred by laws, administrative regulations, rules and
+the Articles of Association of the Bank.
+Effective Communication with Shareholders
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+The Bank actively strengthened the information disclosure management, continued to improve the group-wide information
+transmission mechanism, and fulfilled the information disclosure obligations in compliance with the applicable laws and
+regulations. On the basis, in order to meet the information needs of investors and other stakeholders, the Bank steadily
+promoted the voluntary information disclosure, continued to expand the width and depth of information disclosure,
+improved the Bank's level of transparency, thereby effectively safeguarding the right to information of the stakeholders.
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results, domestic and overseas road shows and reverse road shows, and attending famous investment forums at
+home and abroad during the reporting period. The Bank took full advantage of the communication platforms including the
+investor interactive platform of SSE, investor relations column on the website of the Group, investor hotline and investor
+email of the Bank, to understand investors' needs and provide sufficient information feedback in a timely manner.
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+Shareholders' General Meetings of the Bank strictly complied with the relevant provisions of the Company Law and the
+Articles of Association of the Bank, ensuring that shareholders could exercise their right of participation in the Shareholders'
+General Meetings smoothly. Since it was listed, in order to treat A and H minority shareholders fairly, the Bank has held
+the Annual General Meeting in Beijing and Hong Kong concurrently by satellite and set up registration offices of A and
+H shareholders both in Beijing and Hong Kong to facilitate the voting of shareholders. The number of shareholders who
+participated in voting at the Annual General Meeting for the Year 2017 amounted to 3,462.
+Contacts
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the Shareholders' General Meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform of
+SSE, investor relations column on the website of the Group, investor hotline and investor email and hotline, fax and email of
+the Shareholders' General Meetings of the Bank as well. For contact details, please refer to the section headed "Corporate
+Governance Report - Investor Relations".
+If an ordinary shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share
+certificates and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the
+Bank. For contact details, please refer to the section headed "Corporate Information".
+Annual Report 2018
+Corporate Governance Report
+94
+Shareholders' General Meeting
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting during the reporting period.
+Board of Directors and Special Committees
+Composition of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing Directors. With diversified backgrounds,
+the Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed professional and diversified perspectives and views, which ensured scientific decision-making of the Board of
+Directors. As at the disclosure date of the results, the Board of Directors of the Bank consisted of 12 directors, including one
+Executive Director: Mr. Gu Shu; five Non-executive Directors: Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun,
+Mr. Dong Shi and Mr. Ye Donghai; and six Independent Non-executive Directors: Mr. Hong Yongmiao, Mr. Anthony Francis
+Neoh, Mr. Yang Siu Shun, Ms. Sheila Colleen Bair, Mr. Shen Si and Mr. Nout Wellink. Mr. Gu Shu was Vice Chairman of the
+Board of Directors. The Executive Director has worked in the areas of banking and management for a long time, possesses
+extensive professional expertise and experience in those areas and is familiar with operation and management of the
+Bank. Non-executive Directors have worked in the fiscal, economic and financial sectors for many years, and they have rich
+practical experience and relatively high level of understanding of policies and theories. All of the Independent Non-executive
+Directors are prestigious Chinese or foreign experts in their respective areas, e.g. economy, finance, audit and law, and they
+are familiar with Chinese and foreign regulatory rules and have a good knowledge of corporate governance, finance and
+bank management. The number of Independent Non-executive Directors of the Bank accounted for more than one third of
+the total members of the Board of Directors, complying with relevant regulatory requirements.
+Meetings of the Board of Directors
+During the reporting period, the Board of Directors of the Bank held ten meetings, considered 79 proposals including the
+proposals on the 2017 Work Report of the Board of Directors, amendment of the Plan on Authorization of the Shareholders'
+General Meeting to the Board of Directors and the Plan on Authorization of the Board of Directors to the President,
+nomination of candidates for Directors, and issuance of domestic and offshore preference shares, and heard 34 reports
+including the reports on the 2018 Work Plan of the Board of Directors, the Directors' performance assessment by the Board
+of Directors for 2017, the details on internal audits, and the summary of external audits. For major proposals reviewed by
+the Board of Directors, please refer to the announcements of the Bank on the websites of SSE and SEHK or the website of
+the Bank. In addition, the Board of Directors held an Analytical Meeting on Implementing the Strategic Development Plan for
+2018-2020. At the meeting, Directors studied and discussed the implementation of the Plan in 2018 and deliberated on the
+next-step measures for optimization.
+96
+ICBC
+Corporate Governance Report
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Responsibilities of the Board of Supervisors
+Attendances in person/Number of meetings that should be attended
+Special Committees of the Board of Directors:
+During the reporting period, the Bank convened the 2017 Annual General Meeting on 26 June 2018 and the First
+Extraordinary General Meeting of 2018 on 21 November 2018. The afore-mentioned Shareholders' General Meetings were
+convened and held in strict compliance with relevant laws and regulations and the Articles of Association of the Bank. The
+Bank made announcements on the resolutions and disclosed legal opinions in a timely manner in accordance with regulatory
+requirements. For details of the above meetings, please refer to the announcements of the Bank dated 26 June 2018 and
+21 November 2018 respectively on the websites of SSE and SEHK, or the website of the Bank.
+In the following circumstances, preference shareholders of the Bank have the right to attend the Shareholders' General
+Meeting and exercise voting rights: (1) amendments to the Articles of Association which relate to preference shares; (2) the
+reduction of the registered capital of the Bank by more than 10% (either separately or in aggregate); (3) merger, division
+and dissolution or change of corporate form of the Bank; (4) issuance of preference shares; and (5) other events specified
+in the Articles of Association that will change or abrogate the rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders' General Meeting shall be given to preference shareholders in accordance
+with the notification procedures applicable to ordinary shareholders as specified in the Articles of Association.
+95
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, documents on status of share capital and minutes of Shareholders' General Meetings, etc.
+Responsibilities of the Senior Management
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, the operation and management of the Bank; organizing the implementation
+of operation and investment plans approved by the Board of Directors; formulating specific rules and regulations of the
+Bank; determining plans for compensation distribution and performances evaluation of persons in charge of internal
+departments and branches of the Bank (except the internal audit department); truthfully reporting to the Board of Directors
+or the Board of Supervisors on the business performance; drafting the annual financial budget plan, final account plan, profit
+distribution plan and loss make-up plan, plans for increase or reduction of the registered capital, the issuance of bonds or
+other securities and listing, and making suggestions in that respect to the Board of Directors.
+Special provisions on rights of preference shareholders
+92
+ICBC
+Corporate Governance Report
+Overview of Corporate Governance
+During the reporting period, the Bank took improving corporate governance as a primary measure to enhance its core
+competitiveness, continued to optimize its modern corporate governance framework, mechanism and culture, and brought
+the corporate governance and risk management capacities of the Group to a higher level. There is neither any material
+divergence between actual corporate governance of the Bank and applicable regulatory documents regarding corporate
+governance issued by CSRC, nor any problem identified by regulatory authorities but remain unresolved in respect of
+corporate governance. During the reporting period, the Bank actively took part in the corporate governance award selection
+activities at home and abroad, and received a series of corporate governance awards from many Chinese and foreign
+authoritative institutions and news media, including the "2018 CCTV China's Top 10 Listed Companies Award" from the
+2018 CCTV Financial Forum & Chinese Listed Companies Summit, the "Golden Round Table Awards Enterprise Excellent
+in Corporate Governance" from the magazine Directors & Boards and the "Corporate Award - Platinum Award" from the
+Hong Kong magazine The Asset.
+Construction of the Organizational Framework of Corporate Governance
+Construction of the Corporate Governance Mechanism
+The Bank put into good use the key role of the Board of Directors in strategic decision-making and corporate governance.
+Centering on the objectives of driving sustainable growth in corporate value and creating value for customers and
+shareholders, the Board of Directors forged ahead as guided by strategies, sought progress without compromising stability
+and inherited and innovated in development philosophy, strengthened the enterprise risk management and internal control,
+actively promoted the operational transformation and structural adjustment, kept track of how the strategies, plans and
+decisions were implemented continuously, and made sure the robust operation and healthy development of the Group.
+Supporting rules and regulations for performance standards of the Board of Directors were established and improved to
+ensure the Board of Directors fulfill its duties in accordance with relevant laws and regulations.
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors continuously
+improved its working mechanism in accordance with the priorities of the Bank, deepened the contents and methods of its
+supervision over performance of the Board of Directors and the Senior Management and earnestly conducted the annual
+performance assessment. Financial supervision and supervision over risk management and internal control of the Bank were
+enhanced. The Board of Supervisors effectively fulfilled its important role to corporate governance and promoted the legal
+and compliant operation and sustainable and stable development of the Bank.
+The Bank strengthened enterprise risk management and capital management, and intensified internal control, audit and
+supervision. It continued to improve the enterprise risk management policies, and took multiple measures to enhance
+the Group's risk management capacity; stepped up the capital management, liquidity management and interest rate
+management, with the capital adequacy ratio (CAR) remained stabilized overall; and reinforced the group-wide compliance
+management, kept optimizing the internal control environment, and continued enhancing the auditing service capacity and
+the related supervision and inspection standards.
+The Bank continuously increased the level of transparency across the Group. It disclosed information in a legal and compliant
+manner, and conducted voluntary information disclosure in an orderly manner. Besides, it earnestly protected the right to
+information of investors and other stakeholders. It also actively improved the group-wide significant information transmission
+mechanism, and strengthened the building of teams of professional talents constantly. All of these efforts led to increasingly
+better management of the Group over information disclosure.
+Annual Report 2018
+During the reporting period, the Bank appointed and re-appointed some directors and changed the chairman and members
+of some special committees of the Board of Directors to ensure the Bank operated in compliance with laws and regulations.
+The Bank continued to improve the structure of the Board of Directors and further promoted the role of the special
+committees of the Board of Directors in supporting decision-making. Besides, the Bank stepped up efforts in the Group's
+corporate governance, and kept refining the management and control and collaboration mechanism of the Group as well as
+the corporate governance framework, institutional system and working mechanism of its subsidiaries.
+93
+Shareholders who hold more than three percent (3%) of shares of the Bank, either individually or jointly, may prepare
+an interim proposal and submit it in writing to the Board of Directors ten (10) days before the Shareholders' General
+Meetings convened. The Board of Directors shall issue a supplementary notice for the Shareholders' General Meeting within
+two (2) days upon receipt of the proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Submitting interim proposals for the Shareholders' General Meeting
+An extraordinary general meeting should be convened within two (2) months from the date when shareholders holding
+more than ten percent (10%) of the voting shares of the Bank, either individually or jointly, request to convene in writing.
+Proposing shareholders shall have the right to request the Board of Directors in writing to convene an extraordinary general
+meeting. The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting
+within ten (10) days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles
+of Association of the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by
+themselves due to the failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted
+from the payment to those negligent directors.
+Proposing the convening of an extraordinary general meeting
+Putting forward suggestions and reviewing documents
+Shareholders' Rights
+Compliance with the Corporate Governance Code
+During the reporting period, the Bank revised the Plan on Authorization of the Shareholders' General Meeting to the
+Board of Directors of ICBC and the Plan on Authorization of the Board of Directors to the President of ICBC, providing an
+institutional guarantee for strengthening asset quality, gaining efficiency in asset write-off and disposal, and increasing
+donations for fighting against poverty.
+Development of Corporate Governance Regulations
+Corporate Governance Report
+During the reporting period, the Bank fully complied with the principles, code provisions and recommended best practices
+stipulated in the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules).
+Powers and Functions of the Senior Management
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be separated, and the Chairman shall not
+concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Mr. Gu Shu is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+The Chairman of the Bank is the legal representative of the Bank, and is responsible for leading the Board of Directors
+in considering and formulating business development strategies, risk management, internal control and other significant
+matters of the Bank.
+Chairman and President
+0/0
+7/7
+Securities Transactions of Directors and Supervisors
+Note: For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Qian Wenhui
+Supervisor leaving office:
+0/0
+Inside Information Management
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries to all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the aforesaid codes of conduct during the
+year ended 31 December 2018.
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued
+While disclosing the annual report, the Bank also disclosed the 2018 Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2018 (benchmark date). KPMG Huazhen (Special
+General Partnership) has audited the effectiveness of the Bank's internal control over financial reporting as at 31 December
+2018 and issued the standardized audit report on internal control. For details, please refer to the websites of SSE and SEHK.
+ICBC
+105
+Corporate Governance Report
+2/2
+Internal Control Evaluation and Defects
+Annual Report 2018
+Internal Control Evaluation Report and Internal Control Audit
+The internal monitoring and evaluation has remained effective. The Bank hardened the whole-process control over supervision
+and inspection, standardized the processes of supervision and inspection, and built a three-dimensional, well-linked and multi-
+channel supervision and inspection mechanism. Consistent with the regulatory requirements, the Bank adopted a "four-
+driver" system (assessment governance - - inspection - rectification) to improve the quality of correction. It carried forward
+inspection and audit projects in a focused manner. It raised more stringent requirements, adhered to "dual-line remediation",
+supervised and assessed the effects of remediation, and strengthened the implementation of remediation accountability
+measures and the improvement of remediation effects. The Bank constantly improved the internal control assessment work,
+and facilitated the evolution of internal control assessment to one featuring "big data monitoring and regular assessment".
+―
+Information communication has been further streamlined. The Bank issued a new version of data quality assessment measures,
+updated domestic and overseas data quality management system and established a comprehensive and accurate data quality
+evaluation system. It strengthened the intelligent monitoring, analysis and mining of customers and treasury transactions,
+performed mining labeling of behavior classification and relationship network and put the analytical results into wider
+applications in business scenarios. The Bank advanced the construction of Information Security Operation Center, perfected the
+rapid emergency response mechanism in face of attacks and realized the automatic ban on high-risk alarms.
+Control activities have become more effective. The Bank developed the Internal Control Manual to perfect the all-staff and
+whole-process internal control system building. The review and approval function of financing for general legal person
+customers and small and micro enterprises and residential mortgages were caused to delegate to tier-2 branches, while the
+business scope, targets and authorities of credit sub-authorization business were determined on a reasonable and prudential
+basis. The Bank installed a uniform management platform of internal account accounting and pushed forward the collation and
+amelioration of relevant business processes to step up the whole-process e-management of internal accounts.
+The technological level of risk management has risen evidently. The Bank completed the hierarchical risk appetite indicators
+system with capital constraint at the core, and built a risk limit management system by the Group, the Bank, geographical
+location, industry, customer, product and mitigant. The Bank encouraged the initiation of the cross-financial risk statistics &
+monitoring platform system project and the phased development of the system in a bid to become more capable of identifying,
+assessing, monitoring, counting, warning and reporting cross-financial risks.
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee and the Related Party Transactions Control Committee of the Board
+of Directors perform the responsibilities of internal control management and review the effectiveness of internal control.
+The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-bureau, which adopt a hierarchical management
+system and are responsible to and report to the Board of Directors. The Head Office and branches have internal control and
+compliance departments which are responsible for the bank-wide organization, promotion and coordination of internal control.
+The internal control environment has been optimized continuously. The Bank put the Planning for Internal Control System
+Building for 2018-2020 into implementation and set the objective of the Group's internal control system building in the new
+era. While launching the "Year of Internal Control and Compliance" campaign, the Bank promoted the core philosophy of
+compliance culture that "compliance is the fundamental of responsibility of the entire staff to keep risks under control and
+ensure efficient operation". Based on the operation transformation needs, the Bank completed the structural adjustment of the
+Head Office, branches and sub-branches as well as staffing, and refined the performance assessment and business evaluation
+system.
+Internal Control
+to strengthen inside information confidentiality management, timely organized the completion of insider lists and regularly
+conducted insider transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be
+involved in dealings in shares of the Bank who have taken advantage of inside information during the reporting period.
+Corporate Governance Report
+104
+7/7
+During the reporting period, the Bank's Independent Non-executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, gave independent opinions during consideration of issues, and provided
+recommendations on areas such as strategic management, business transformation, innovative development, corporate
+governance, risk management, compliance management, FinTech and inclusive financial business of the Bank. During
+the adjournment, Independent Non-executive Directors of the Bank conducted on-site investigations in terms of the
+Bank's support for private economy, the provision of financial services to fight against poverty, the credit asset quality
+and credit cultural improvement and the impacts of changes in international conditions on the operation of overseas
+institutions; they also proactively exchanged opinions with the Management during special-topic discussions. During the
+reporting period, the Bank's Independent Non-executive Directors put forward comments and suggestions in respect
+of business management and strategy implementation. Their suggestions were about providing appropriate services for
+private economy, accelerating FinTech innovation, strengthening information security management, advancing channel
+transformation and intelligent bank construction and reinforcing risk control and compliant development. The Bank paid
+close attention to the relevant comments and suggestions, and organized the implementation thereof according to the
+actual conditions.
+7/7
+During the reporting period, the Board of Supervisors held seven meetings, reviewed 19 proposals including the proposals
+on the 2017 Work Report of the Board of Supervisors and the Report on Development Strategy Assessment Opinions, heard
+13 reports on the business operation, internal control and risk management, and reviewed 26 documents including the
+documents on the supervision in each quarter of 2018 and the rectification progress of issues indicated in the survey reports
+of the Board of Supervisors.
+Meetings of the Board of Supervisors
+As at the disclosure date of the results, the Board of Supervisors of the Bank consisted of five members, including one
+Shareholder Supervisor, namely Mr. Zhang Wei; two Employee Supervisors, namely Mr. Hui Ping and Mr. Huang Li; and two
+External Supervisors, namely Mr. Qu Qiang and Mr. Shen Bingxi.
+Composition of the Board of Supervisors
+Board of Supervisors
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting
+period, please refer to the Work Report of Independent Non-executive Directors for 2018 issued by the Bank on
+28 March 2019.
+Annual Report 2018
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of
+the Board of Directors and special committees of the Board of Directors.
+Independence and Performance of Duties of Independent Non-executive Directors
+During the reporting period, the Board Secretary of the Bank attended the relevant specialized trainings, with the training
+hours over 15 hours, which meets relevant regulatory requirements.
+Training of Board Secretary
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines
+issued by five ministries and commissions including MOF, the Guidelines for Internal Control of Listed Companies issued
+by SSE and relevant regulatory requirements of CBIRC. No material or significant deficiencies were detected in the Bank's
+internal control system during the assessment. Risks that may arise from ordinary deficiencies are controllable and corrective
+actions have been or are being taken, which have no material impact on the fulfillment of internal control objectives of the
+Bank. The Bank had maintained effective internal control in all material aspects in accordance with the standard system for
+enterprise internal control and relevant rules.
+Corporate Governance Report
+ICBC
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the
+Bank or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the
+annual confirmation on independence from all Independent Non-executive Directors and considered that they were
+independent.
+103
+Corporate Governance Report
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+2/2
+7/7
+2/2
+7/7
+2/2
+Board of
+Supervisors
+Shareholders'
+General
+Meeting
+Attendances in person/Number of meetings that should be attended
+Shen Bingxi
+Qu Qiang
+Huang Li
+Hui Ping
+Zhang Wei
+Current supervisors:
+Supervisor
+2/2
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+83,506
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Cash dividends (pre-tax, in RMB millions)
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+The Bank had no plan for converting capital reserve to share capital in the last three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the last three years:
+For dividend-related tax and tax reduction, please refer to the announcements on dividend distribution of the Bank.
+-
+2018
+2.506
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.506 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2018, totaling about RMB89,315 million. The distribution plan will be submitted for
+approval to the Annual General Meeting for the Year 2018. Once approved, the above-mentioned dividends will be paid to
+the holders of A shares and H shares whose names appeared on the share register of the Bank after the close of market on
+2 July 2019. The Bank will suspend the registration procedures of H share ownership transfer on 27 June 2019 (inclusive)
+through 2 July 2019 (inclusive). The holders of H shares of the Bank that desire to receive the proposed cash dividends
+but have not registered the ownership transfer documents are requested to hand over their ownership transfer documents
+together with the H shares to the Bank's H share registrar- Computershare Hong Kong Investor Services Limited that is
+located at Room 1712-1716, 17 Floor, Hopewell Center, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30
+p.m. of 26 June 2019. Pursuant to relevant regulatory requirements and operational rules, dividends on A shares and H
+shares will be paid on 3 July 2019 and 23 July 2019, respectively.
+The profit and financial status of the Bank during the reporting period are presented in the Auditor's Report and Financial
+Statements of the Annual Report.
+Profits and Dividends Distribution
+Principal Business The principal business of the Bank and its subsidiaries is the provision of banking and related
+financial services. Please refer to the section headed "Discussion and Analysis" for the business review of the Bank.
+Report of the Board of Directors
+107
+Annual Report 2018
+As approved at the Annual General Meeting for the Year 2017 held on 26 June 2018, the Bank has distributed cash
+dividends of about RMB85,823 million, or RMB2.408 per ten shares (pre-tax) for the period from 1 January 2017 to
+31 December 2017 to the ordinary shareholders whose names appeared on the share register after the close of market on
+12 July 2018.
+2017
+2016
+2.408
+102
+Anti-money Laundering and Regulatory Compliance
+ICBC
+108
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile have regard to the long-term interest of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be substantiated and proved in detail and presented
+in a written substantiating report for Independent Non-executive Directors to issue their opinions, and then the report will be
+submitted to the Shareholders' General Meeting for approval as a special resolution.
+Formulation and Implementation of Cash Dividend Policy
+For details on the distribution of dividends on preference shares of the Bank, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial Shareholders - Preference Shares".
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+Percentage of cash dividends (1) (%)
+30.5
+30.5
+30.5
+85,823
+89,315
+2.343
+Postal code: 100140
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Chengdu
+Office
+Guangzhou Kunming
+Office
+Office
+Xi'an
+Office
+Wuhan
+Office
+Shanghai
+Office
+Nanjing
+Office
+Office
+Tianjin
+Shenyang
+Office
+Beijing
+Office
+Board of Supervisors
+Internal Audit Bureau
+Senior Management
+Audit Committee
+Board of Directors
+Primary reporting line
+Internal Audit
+Secondary reporting line
+During the reporting period, internal audit of the Bank actively adapted to the changes in the risk management conditions,
+refined the audit management mechanism, improved the audit quality and efficiency, continuously advanced the digital
+transformation of internal audit, intensified efforts in organizing professional qualification programs and project-specific
+trainings, expanded the professional development space of teams, and constantly enhanced the audit service capacity and
+professionalism.
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Investor Enquiries
+In 2019, the Bank will further and proactively deepen the communication and exchange with investors to enhance investors'
+understanding and recognition of the Bank and continue to protect legitimate interests of the investors, and at the same
+time hope to receive more support from, and attention of the investors.
+The Bank made constant and extensive communication with institutional investors and minority investors through press
+conferences in relation to periodic results announcements, non-deal road shows, reverse road shows, conferences with large
+institutions, investor hotline, investor relations mailbox, investor relations website and the online platform of sseinfo.com,
+which enhanced investors' confidence in economic development of China and the operational transformation of the Bank
+and helped bring the market value in line with the long-term intrinsic value of the Bank. The Bank improved investor
+relations information collection and market information feedback mechanism, strengthened dynamic monitoring of share
+price valuation, analyst reports and media and public opinions, followed and analyzed spotlight issues of the capital market,
+and effectively enhanced the quality of communication with the investors. The Bank actively understood and solicited the
+comments and suggestions of the capital market on the Bank, and made timely reaction with the help of many operation
+and communication strategies, so as to continuously strengthen the level of corporate governance and core values of the
+Bank.
+In 2018, the Bank strove to improve the quality of investor relations services and generate stable return to shareholders
+following the principle of serving investors in a proactive, precise, coordinated and efficient manner.
+Overview of Investor Relations Activities in 2018
+Investor Relations
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as tax advisory
+services and the professional services for the bonds issuance, and received RMB6 million for such professional non-audit services.
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB210 million for the
+audit of financial statements (including the audit of financial statements of subsidiaries and overseas branches). Of which,
+RMB136 million (including fee for internal control audit of RMB11.50 million) was paid by the Bank.
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for six consecutive years (2013-2018).
+KPMG Huazhen LLP was the domestic auditors of the Bank for the financial statements audit in 2018, and KPMG was the
+international auditors of the Bank for the financial statements audit in 2018. KPMG Huazhen LLP was also the auditors of
+internal control of the Bank in 2018.
+Engagement of Auditors
+Corporate Governance Report
+ICBC
+106
+During the reporting period, the Bank acted on the regulatory requirements of the industry, implemented risk-oriented audit
+activities and fully accomplished the annual audit plan according to the development strategy and central tasks of the Bank.
+The audit activities covered main aspects of operation and management, such as credit business, financial benefit, internal
+control, capital management, overseas institutions, asset management, internet-based finance, customer services and duty
+performance of Senior Management members in their tenure of office. The audit activities paid close attention to credit risk,
+market risk, liquidity risk and operational risk under the complicated operating circumstances, and underscored the coverage
+of cross-business, cross-market and cross-regulator complicated risks and their control effects. The audit activities supervised
+and assessed the quality and effect of the compliance with regulatory requirements, implementation of major strategies,
+management of major risks and intensified internal control by some institutions and in main business areas of the Group. The
+Bank also paid close heed to audit findings and made full use of relevant audit recommendations, with the aim of enhancing
+risk management, internal control and corporate governance level.
+Introduction to Corporate Governance and Operation of the Board of Directors
+•
+Introduction trainings for newly-appointed directors of the Bank:
+The Compensation Committee organized the performance assessment of directors, and put forth proposal on remuneration
+distribution for directors and submitted the same to the Shareholders' General Meeting after the approval of the Board
+of Directors. It also formulated and reviewed the assessment measures and compensation plans for Senior Management
+members of the Bank and evaluated the performance and behaviors of Senior Management members, results of which
+were submitted to the Board of Directors or the Shareholders' General Meeting, if falling into the responsibilities of
+the Shareholders' General Meeting, for approval. According to applicable regulations including the Measures on the
+Assessment of Performance of Duties of Directors in Commercial Banks (Trial), the Articles of Association and the Rules
+on the Assessment of Performance of Duties of Directors by the Board of Directors (Revision in 2016) of the Bank, the
+Compensation Committee organized the performance assessment of Directors by the Board of Directors for 2017.
+◆Related Party Transactions Control Committee
+The Related Party Transactions Control Committee is mainly responsible for developing the basic policies governing the
+management of related party transactions, identifying the Bank's related parties, approving related party transactions and
+other related matters within the authority granted by the Board, receiving related party transaction statistics for filing purpose,
+reviewing the related party transactions that are subject to the approval of the Board of Directors or the Shareholders'
+General Meeting, and reporting to the Board of Directors on the implementation of the related party transaction management
+policies as well as the conditions on these transactions. As at the disclosure date of the results, the Related Party Transactions
+Control Committee consisted of four directors, including Independent Non-executive Directors Mr. Yang Siu Shun,
+Mr. Hong Yongmiao, Mr. Shen Si and Mr. Nout Wellink. Independent Non-executive Director Mr. Yang Siu Shun was Chairman
+of the Committee.
+Annual Report 2018
+101
+Corporate Governance Report
+Performance of the Related Party Transactions Control Committee During the reporting period, the Related
+Party Transactions Control Committee held three meetings, considered two proposals in respect of, among others, the
+identification of related parties of the Bank, and heard two reports including the report on related party transactions in 2017
+and the identification of related parties of the Bank in 2017. The Related Party Transaction Control Committee put forward
+comments or suggestions on matters including the improvement of management of related party transactions and inside
+transactions of the Bank.
+Responsibilities of Directors in Respect of Financial Statements
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2017 Annual Report,
+the First Quarterly Report, the Interim Report and the Third Quarterly Report of 2018 as scheduled.
+Term of Directors
+The Bank has strictly complied with the requirements of the exchanges on which the Bank is listed and the Articles of
+Association of the Bank that Directors are elected by the Shareholders' General Meeting with a term of three years, and the
+appointment shall take effect from the date of approval by CBIRC or upon completion of relevant procedures according to
+the requirements of CBIRC. Directors may be re-appointed through re-election at the Shareholders' General Meeting after
+expiry of their term.
+Investigation and Training of Directors
+During the reporting period, the Bank developed the training plan for the Board of Directors, increased training resources,
+and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors in continuing
+to improve their ability to perform their duties. During the reporting period, Directors of the Bank attended relevant trainings
+according to work needs. Besides, the Directors of the Bank enhanced their duty performance capabilities by attending
+seminars as well as conducting on-site investigations in some domestic and overseas peers and affiliates of the Bank.
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+Trainings held by the regulatory authorities:
+Beijing Office of CSRC
+Regulated Operation, Investment and Financing, Information Disclosure, Newly-appointed
+Directors and Supervisors
+Special business trainings of the Bank:
+•
+Corporate Governance
+• Influence of the US Tax Cuts & Jobs Act on Banks
+•
+FinTech and Network Security
+New Banking Regulations and Their Influence
+Improvement of the Board of Directors and Duty Performance of Directors
+•
+•
+Performance of the Compensation Committee During the reporting period, the Compensation Committee held three
+meetings, considered three proposals including the proposals on the payment of remuneration to Directors and Senior
+Management members for 2017 and the Senior Management performance evaluation plan for 2018, and heard the 2017
+assessment report on the performance of duties of Directors by the Board of Directors. The Compensation Committee put
+forward comments or suggestions on matters including improvement of the compensation incentive mechanism.
+The Compensation Committee is mainly responsible for formulating assessment measures on the performance of duties
+and compensation plans for Directors, organizing the assessment on the performance of duties of Directors, putting forth
+proposal on remuneration distribution for Directors, formulating and reviewing the assessment measures and compensation
+plans for Senior Management members of the Bank and evaluating the performance and behaviors of Senior Management
+members. As at the disclosure date of the results, the Compensation Committee consisted of seven directors, including
+Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Nout Wellink, Mr. Anthony Francis Neoh,
+Ms. Sheila Colleen Bair and Mr. Shen Si; Non-executive Directors Ms. Mei Yingchun and Mr. Dong Shi. Independent
+Non-executive Director Mr. Nout Wellink was Chairman of the Committee.
+•
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held six meetings,
+considered eight proposals including the proposals on the nomination of Mr. Cheng Fengchao, Mr. Zheng Fuqing,
+Mr. Nout Wellink, Mr. Fred Zuliu Hu, Mr. Hu Hao and Mr. Tan Jiong as candidates for Directors of the Bank, and heard
+the report on the framework of the Board of Directors in 2017. The Nomination Committee put forward comments or
+suggestions on matters including the recommendation and nomination of candidates for Directors, the assessment of the
+framework of the Board of Directors and the candidates for chairmen and members of special committees under the Board
+of Directors.
+Corporate Governance Report
+◆ Compensation Committee
+During the preparation and audit of the 2018 financial statements, the Audit Committee discussed and agreed with the
+external auditors matters such as audit schedule and progress arrangement, followed the status of external audit and
+conducted supervision over relevant work at appropriate time by means of hearing reports and holding informal discussions,
+and reviewed the unaudited and preliminarily audited annual financial statements respectively. The Audit Committee held a
+meeting on 27 March 2019, and considered that the annual financial statements truly, accurately and completely reflected
+the financial position of the Bank. The Audit Committee reviewed the summary of audit work performed by external auditors
+during the year and made an overall and objective assessment on its performance and quality of practice. It also approved
+the renewal of the engagement of KPMG Huazhen LLP and KPMG as the external auditors of the Bank for 2019 and the
+engagement of KPMG Huazhen LLP as the internal control auditors of the Bank for 2019, and presented the proposals to the
+Board of Directors for consideration.
+Examining internal control system
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of the Bank,
+and examining the effectiveness of the system at least on an annual basis. The Audit Committee performed its function
+of examining the Bank's internal control system through reviewing the administrative rules and regulations and their
+implementation, and examined and assessed the compliance and effectiveness of major operating activities of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing internal control
+and truthfully disclosing internal control assessment reports according to the standard system for enterprise internal control.
+The objective of the internal control of the Bank is to reasonably assure the compliance of its operation and management
+with relevant laws, safety of its assets, as well as the authenticity and completeness of its financial reports and relevant
+information, in order to enhance operation efficiency and results, and to facilitate the realization of its development strategy.
+Due to inherent limitation of internal control, only reasonable assurance can be provided for the afore-mentioned objectives.
+The Board of Directors and the Audit Committee have reviewed and approved the 2018 Internal Control Assessment Report
+of the Bank. For details of the Bank's internal control, please refer to the section headed "Corporate Governance Report -
+Internal Control".
+Effectiveness of the internal audit function
+The Bank has established a vertical and independent internal audit management system responsible and reporting to
+the Board of Directors. The Board of Directors regularly reviews the internal audit plan and hears internal audit reports
+on internal audit activities, audit supporting measures, internal audit team building, etc., thus effectively performing the
+function of risk management. The Audit Committee examines, monitors and assesses the internal audit work of the Bank,
+supervises the internal audit rules and their implementation, and makes assessment of audit procedures and results of the
+internal audit department. It is also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department and external auditors. The internal
+audit department is accountable to and reports to the Board of Directors, is guided by the Board of Supervisors and is under
+the examination, supervision and assessment of the Audit Committee. For details of the internal audit, please refer to the
+section headed "Corporate Governance Report - Internal Audit".
+◆Risk Management Committee
+•
+Compliance of Overseas Institutions
+•
+Information Security and Compliance Management
+The Risk Management Committee is primarily responsible for constantly overseeing the Bank's risk management system,
+reviewing and revising the strategy, policy and procedures of risk management and internal control process of the Bank,
+and supervising and evaluating the performance of Senior Management members and risk management departments in
+respect of risk management. It concurrently serves as the US risk committee in accordance with the relevant requirements
+in the Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organizations ("EPS") established
+by the Federal Reserve Board. As at the disclosure date of the results, the Risk Management Committee consisted of eight
+directors, including Independent Non-executive Directors Mr. Anthony Francis Neoh, Mr. Hong Yongmiao, Mr. Yang Siu Shun,
+Ms. Sheila Colleen Bair and Mr. Shen Si; Non-executive Directors Mr. Cheng Fengchao, Mr. Zheng Fuqing and Mr. Dong Shi.
+Independent Non-executive Director Mr. Anthony Francis Neoh was Chairman of the Committee.
+Effective Risk Data Aggregation
+The Articles of Association of the Bank specifies methods and procedures to nominate Directors. Please refer to Article 118
+of the Articles of Association. During the reporting period, the Bank appointed and renewed the appointments of Directors
+of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews the
+qualifications of candidates for Directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+Committee shall pay attention to the complementarity of the candidates in terms of expertise, professional competence
+and experience, cultural and educational background, gender, etc., to ensure the members of the Board of Directors are
+well equipped, experienced and have diversified perspectives and views. In order to implement the diversity policy, the
+99
+Corporate Governance Report
+Performance of the Risk Management Committee During the reporting period, the Risk Management Committee
+held eight meetings, considered 17 proposals including the proposals on the liquidity risk management strategy for 2018,
+the country risk concentration limit for 2018-2019, the risk appetite management measures, and the liquidity risk appetite
+of US-based institutions, and heard 17 reports on the topics including the Group's AML work for 2017 and the IT risk
+management for 2017. The Risk Management Committee put forward comments or suggestions on matters including
+institutionalizing of the risk management policy mechanism, the Group's AML work and the risk management of US-based
+institutions.
+The Risk Management Committee held a seminar in May and December 2018, respectively. At the seminars, the committee
+heard the implementation of EPS by the Bank's US-based institutions and their compliance with EPS and launched a relevant
+discussion; learned about the development of the Bank's anti-money laundering systems-BRAINS and COMPASS and the
+operation of the anti-money laundering monitoring system at domestic institutions and launched a relevant discussion; heard
+the report on the Bank's information security rules and regulations, information security challenges and countermeasures
+and discussed the design of the Bank's information security system architecture and policy; heard the influence of the EU
+General Data Protection Regulation (GDPR) on the Bank and countermeasures and discussed how to link GDPR compliance
+with anti-money laundering compliance.
+Examining the risk management system
+Nomination Committee assesses the improvement of diversified composition of the Board of Directors during the course
+of its yearly assessment on the framework, number of Directors and composition of the Board of the Directors, and
+discusses and designs measurable goals according to actual conditions. As at the disclosure date of the results, there were
+six Independent Non-executive Directors, accounting for more than one third of the total members of the Board of Directors;
+and there were two female Directors. The Bank attached importance to diversified sources and backgrounds of Directors and
+continued the efforts to enhance the professionalism of the Board of Directors, thus laying the foundation for the effective
+operation and scientific decision-making of the Board of the Directors.
+The Risk Management Committee is responsible for constantly monitoring and examining the risk management system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. Under the enterprise risk management
+system structure of the Bank, the Risk Management Committee performed its function of examining the Bank's risk
+management system through reviewing and revising the risk strategy, risk management policy, risk appetite and the
+enterprise risk management structure, monitoring and evaluating the setup, mode of organization, work procedures and
+results of risk management departments, regularly assessing the risk policy, risk appetite and enterprise risk management
+status, supervising and assessing risk control activities conducted by the Senior Management members in terms of credit
+risk, market risk, operational risk, liquidity risk, compliance risk, reputational risk and other risks. In accordance with the
+relevant requirements in the Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organisation
+established by the Federal Reserve Board, the Risk Management Committee supervised the implementation of the
+US business-related risk management framework and relevant policies. The Board of Directors and the Risk Management
+Committee heard the report made by the Management on the Group's risk management every half year and examined the
+Bank's risk management and internal control system. For details of the risk management, please refer to the section headed
+"Discussion and Analysis Risk Management".
+◆ Nomination Committee
+The Nomination Committee is mainly responsible for making recommendations to the Board of Directors on candidates
+for Directors and Senior Management members, nominating candidates for chairmen and members of special committees
+of the Board of Directors, and formulating the standards and procedures for selection and appointment of Directors
+and Senior Management members as well as the training and development plans for Senior Management members and
+key reserved talents. The Nomination Committee is also responsible for assessing the structure, size and composition of
+the Board of Directors on a yearly basis and making recommendations to the Board of Directors based on the Bank's
+development strategy. As at the disclosure date of the results, the Nomination Committee consisted of six directors,
+including Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Hong Yongmiao, Mr. Anthony Francis
+Neoh, Mr. Yang Siu Shun and Ms. Sheila Colleen Bair; Non-executive Director Mr. Ye Donghai. Independent Non-executive
+Director Mr. Hong Yongmiao was Chairman of the Committee.
+100
+ICBC
+Annual Report 2018
+Corporate Governance Report
+Supervision on risk management. The Board of Supervisors supervised the effectiveness and soundness of
+the Group's risk management system and mechanism. It paid close attention to the enterprise risk management,
+consolidated management, capital management, compliance of major regulatory indicators and adjustments of
+regulatory policies. It strengthened the supervision on main material risks, and highlighted credit system and
+mechanism reform, asset quality management, non-performing asset disposal, credit management of overseas
+institutions, exchange rate risk management, liquidity risk management, operational risk management, reputational risk
+management, country risk management and management of cross and transmissional risks, as well as the management
+of risk exposures of major geographical locations, institutions and products. It launched special surveys on the
+management of supply chain financing business and retail banking development of branches in key cities, analyzed and
+researched into the management mechanism of supply chain financing business, risk control system, competitiveness of
+retail banking of branches in key cities and scenario development, and put forth related recommendations to promote
+the healthy development of supply chain financing business and retail banking of branches in key cities.
+112
+Non-executive Directors: Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Dong Shi and Mr. Ye Donghai;
+Independent Non-executive Directors: Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun, Ms. Sheila
+Colleen Bair, Mr. Shen Si and Mr. Nout Wellink.
+Financial supervision. The Board of Supervisors supervised the Bank's financial activities and implementation of decisions
+on material financial issues. It paid close attention to the changes in key financial figures, material financial approval matters
+and accounting, changes in accounting standards and financial policies and their impacts. It carefully reviewed periodic
+reports, final accounts and profit distribution plan, regularly heard reports on business conditions and review results,
+conducted spot checks on major accounting issues, verified the authenticity of financial information, and issued independent
+opinions in an objective and fair manner. It launched special surveys on the management of deposit interest rate pricing and
+the running of the business operation system, analyzed and researched into the soundness of deposit interest rate pricing
+management mechanism, policy transmission and implementation, improvement of business operation system and operating
+risk management, and gave related recommendations to promote the management of deposit interest rate pricing and the
+perfection of business operation system. It oversaw the independence and effectiveness of audit work, reminded auditors of
+the areas of focus in audit and evaluated the duty performance of external auditors.
+Report of the Board of Supervisors
+ICBC
+Supervision on the performance of duties. The Board of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance with the laws and regulations, the Articles of Association of the
+Bank, and the implementation of the resolutions of the Shareholders' General Meeting and the Board of Directors and the
+regulatory opinions. It paid close attention to the duty performance and due diligence of the Board of Directors and the
+Senior Management in corporate governance, development strategy and operation and management. It carried out duty
+performance assessment, talked with members of the Board of Directors and the Senior Management, general managers
+of the related Head Office departments and some branches for comments and suggestions, and then formulated its
+assessment opinions on the duty performance of the Board of Directors, the Senior Management and their members in
+combination with their day-to-day duty performance supervision to promote the legitimate and compliant duty performance.
+It performed strategic assessment, assessed how scientific, reasonable and effective the Bank's development strategies
+were and the implementation of those development strategies, and put forward comments and suggestions to strengthen
+strategy management. It launched a special survey on strengthening the capital base of institutions, analyzed and researched
+into the mechanism of managing the capital increase of institutions, the implementation of capital increase plans and the
+post-increase management, and put forth related recommendations to help improve the management level of institutions'
+capital increase.
+Annual Report 2018
+Work of the Board of Supervisors
+Report of the Board of Supervisors
+111
+Industrial and Commercial Bank of China Limited
+Board of Directors
+Supervision on internal control. The Board of Supervisors supervised the effectiveness of the internal control system,
+the performance of internal control duties and the business compliance with laws and regulations. It paid close attention
+to the internal control system construction, handling of cases and risk events, compliance of important internal control
+indicators, operation of IT systems and production safety, supervision and inspection, and implementation of remediation,
+and reinforced the supervision of key areas such as anti-money laundering and information disclosure. It earnestly reviewed
+the internal control assessment report, paid attention to the implementation and quality control of the internal control
+assessment, as well as the identification, reporting, correction and accountability of internal control deficiencies, and issued
+review opinions. It launched special surveys on IT risk management and credit card installment business management,
+analyzed and researched into IT risk management mechanism, security control of main application systems, credit approval
+of installment business, partner management and system development, and put forth related recommendations for the
+purpose of further improving the IT risk management system and mechanism and promoting the healthy development of
+credit card installment business.
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations, regulatory requirements
+and the Articles of Association, performed supervision duties earnestly, carried out supervision of duty performance and
+due diligence, financial activities, risk management and internal control, etc. in a down-to-earth way, and promoted the
+improvement in corporate governance and the legal, compliant and prudent development.
+Strengthening of self-building. To align with the new changes in the Bank's corporate governance, the Board of
+Supervisors amended the former two supervision measures and merged them into the Measures of the Board of Supervisors
+for Supervision Work, making clear the principles of supervision, highlighting the priorities of supervision and offering
+an institutional framework for doing well in the supervision work. On the basis of summarizing the duty performance
+assessment work experience in the past few years, the Board of Supervisors revised the Rules on Assessment of Duty
+Performance of the Board of Directors and the Senior Management and Their Members by the Board of Supervisors and the
+Rules on Assessment of Duty Performance of Supervisors by the Board of Supervisors for the purpose of further ameliorating
+the ways and methods of work and improving the quality and effectiveness of duty performance assessment.
+Save as disclosed above, the Board of Supervisors had no objection to any other matters during the reporting period.
+Independent Opinions of the Board of Supervisors on Relevant Issues
+As at the disclosure date of the results, the composition of the Board of Directors of the Bank is as follows:
+Executive Director: Mr. Gu Shu;
+ICBC
+114
+Implementation of Information Disclosure Rules During the reporting period, the Bank performed its duty
+of information disclosure in compliance with the regulatory requirements, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed was authentic,
+accurate and complete.
+Review of the Internal Control Assessment Report The Board of Supervisors reviewed the 2018 Internal Control
+Assessment Report of the Bank and had no objection to the report.
+Implementation of Resolutions Passed at the Shareholders' General Meeting During the reporting period, the Board
+of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders' General
+Meeting for consideration. The Board of Directors earnestly implemented the resolutions approved at the Shareholders'
+General Meetings.
+Performance of duties by members of the Board of Supervisors. The Board of Supervisors organized the annual
+assessment on the supervisors for their performance of duties in accordance with the regulatory requirements and corporate
+governance rules. The members of the Board of Supervisors diligently and faithfully fulfilled their duties, attended the
+meetings of the Board of Supervisors on schedule, earnestly studied and reviewed the proposals and special reports, issued
+opinions in an objective and fair manner, appropriately exercised voting rights, attended meetings of the Board of Directors
+and meetings of special committees as non-voting attendees, attended relevant meetings of Senior Management, and
+devoted sufficient time and energy to relevant supervision, inspection and research activities. It attached great importance
+to strengthening theoretical learning and summary of experience from practice. It held discussions and exchanges with the
+boards of supervisors of several financial institutions, learned from the relevant experiences of its peers, and participated
+in the training organized by securities regulatory authority, and further improved its performance capability. External
+supervisors of the Bank worked for more than 15 working days in the Bank, complying with the relevant requirement.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any circumstance that infringed upon the interests of the Bank. The
+approval, voting, disclosure and implementation of connected transactions complied with applicable laws and regulations
+and the Articles of Association of the Bank.
+113
+Annual Report 2018
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+circumstance that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's
+purchase or sale of assets.
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+Preparation of Annual Report Preparation and review procedures of the Bank's Annual Report were in compliance with
+laws, regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly, accurately
+and completely.
+Compliant Operation During the reporting period, the Board of Directors and the Senior Management of the Bank
+continued to operate in compliance with applicable laws and regulations, and the decision-making procedures complied
+with applicable laws and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the
+Senior Management diligently and faithfully performed their duties, and the Board of Supervisors did not find any violation
+of laws and regulations, or any circumstance that contravened the interests of the Bank in their performance of duties
+during the reporting period.
+Report of the Board of Supervisors
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved its performance assessment system and incentive and restriction mechanism. From the perspectives of economic
+benefit, risk cost control and social responsibilities, the Bank adopted a system composed of balanced scorecard-based
+indicators for management and duties allocation based indicators for individuals. The remuneration to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors and other executives of the Bank has followed
+the State's policies relating to the remuneration reform on executives of central enterprises, which consists of basic annual
+remuneration, performance-based remuneration and incentive income linked to term appraisal. The remuneration to other
+Senior Management members and Shareholder Supervisors consists of basic annual remuneration and performance-based
+remuneration, and part of performance-based remuneration is paid in a deferred manner. The Bank has contributed to
+statutory retirement programs organized by Chinese governmental organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the employees of the Bank. Upon obtaining all applicable approvals,
+the Bank will implement a long-term incentive program. As at 31 December 2018, the Bank had not granted any share
+appreciation rights to any Director, Supervisor, Senior Management member, or other core business personnel designated by
+the Board of Directors.
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2018 are set out in the sections headed
+"Discussion and Analysis Business Overview" and "Note 25. to the Financial Statements: Investments in Subsidiaries" in
+this annual report.
+Liability Insurance of Directors, Supervisors and Senior Management Pursuant to the Articles
+of Association of the Bank, where conditions permit, the Bank may establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members upon approval of the Shareholders' General Meeting. The Bank will
+use its own assets to compensate each Director, Supervisor and Senior Management member for any liability arising during
+their performance period to the maximum extent permitted by laws and administrative regulations or within the scope not
+prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior Management members are
+otherwise proved to have failed to act honestly or in good faith during their duty performance. During the reporting period,
+the Bank renewed liability insurance for Directors, Supervisors and Senior Management members.
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing business growth of the Bank.
+Use of Proceeds from Fundraising Activities
+Major Customers In 2018, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank for the year.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining approval
+of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public offering,
+issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods as
+allowed by applicable laws and administrative regulations or approved by relevant authorities.
+Purchase, Sale or Redemption of Securities During the reporting period, neither the Bank nor any of its
+subsidiaries purchased, sold or redeemed any listed securities of the Bank.
+As at the latest practicable date before the publication of this annual report, the Bank has maintained the minimum public float of
+23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the Bank.
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+Changes in the share capital of the Bank for the year ended 31 December 2018 are set out in "Note 37. to the Financial
+Statements: Share Capital".
+Significant Events
+Donations During the reporting period, the Group made external donations of RMB104,251.8 thousand equivalent.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2018 is set
+out in the section headed "Financial Highlights" of this annual report.
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2018 are set out in
+"Note 39. to the Financial Statements: Reserves" of this annual report.
+The formulation and implementation of the Bank's cash dividend policy, which has been reviewed and approved by
+the Independent Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the
+requirements provided in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and
+proportion are clear and explicit, and the decision-making procedure and mechanism are complete. Minority shareholders
+can fully express their opinions and appeals, to completely safeguard their legitimate rights.
+Report of the Board of Directors
+Share Capital and Public Float
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank are not related to one another with respect to finance, business, family, or other
+material relationships which are required to be disclosed.
+Annual Report 2018
+Report of the Board of Directors
+Report of the Board of Directors
+ICBC
+110
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+During the reporting period, the Bank had no connected transaction to be submitted to the Board of Directors or the
+Shareholders' General Meeting for review, and all connected transactions occurred complied with the disclosure exemptions
+under the Listing Rules of the Shanghai Stock Exchange and the Hong Kong Listing Rules on disclosure exemptions.
+In 2018, the Bank carried out standardized management of the Group's connected transactions in strict accordance with the
+regulations of CBIRC and CSRC as well as listing rules in Shanghai and Hong Kong.
+109
+Connected Transactions
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and Supervisors
+Mr. Zhang Hongli ceased to act as Director of the Bank from 2 July 2018. As at 1 July 2018, Mr. Zhang Hongli held 2,000 H
+shares of the Bank. Mr. Or Ching Fai ceased to act as Director of the Bank from 31 October 2018. As at 30 October 2018,
+the spouse of Mr. Or Ching Fai held 1,316,040 H shares of the Bank.
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors and Supervisors to acquire benefits by means of the acquisition of shares in or
+debentures of the Bank or any other body corporate.
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Bank.
+Directors' and Supervisors' Interests in Transactions, Agreements or Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+Management Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Equity-linked Agreement There is neither any agreement to which the Bank is a party, any options to subscribe
+shares, nor any securities convertible to shares of the Bank that requires the Bank to issue shares. In addition, there is no
+securities offering holders the right to subscribe shares of the Bank, the employee participation plan or share option plan,
+etc. as required by the disclosure requirements of the Hong Kong Listing Rules.
+Save as above, as at 31 December 2018, none of the Directors or Supervisors of the Bank had any interests or short positions
+in the shares, underlying shares or debentures of the Bank or any of its associated corporations (as defined in Part XV of the
+Securities and Futures Ordinance of Hong Kong) which have to be notified to the Bank and SEHK under Divisions 7 and 8 of
+Part XV of the Securities and Futures Ordinance of Hong Kong (including interests or short positions therein that they shall
+be deemed to have pursuant to such provisions of the Securities and Futures Ordinance of Hong Kong), or any interests or
+short positions which have to be recorded in the register under Section 352 of the Securities and Futures Ordinance of Hong
+Kong, or any interests or short positions which have to be notified to the Bank and SEHK pursuant to the Model Code for
+Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong Listing Rules.
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank to recover non-performing loans.
+The rest are mainly related to disputes with clients. As at 31 December 2018, the amount of pending proceedings in which
+the Bank and/or its subsidiaries acted as defendants totaled RMB4,154 million. The Bank does not expect any material
+adverse effect from the above-mentioned pending legal proceedings on the Bank's business, financial position or operating
+results.
+Members of the Board of Directors
+Credit Standing During the reporting period, there had not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor were there any outstanding debt of significant amount.
+Personal Banking
+Department
+Banking
+Department
+Management
+Department
+Changchun Institute
+of Financial Managers
+Hangzhou Institute
+of Financial Managers
+Business Research &
+Development Center
+Data Center
+(Shanghai)
+Banking
+Department*
+Affairs
+Department
+Urban Finance
+Research Institute
+Discipline
+Enforcement
+Department
+Security Department
+Software
+Development Center
+Notes: 1. Internet Finance Department includes Innovation Research & Development Center, User Development
+Center and Operation Support Center.
+2. Channel Management Department includes Remote Banking Center.
+3. International Banking Department includes International Settlement Documentation Center.
+Retired Staff
+Management
+Department
+Material Assets Acquisition, Sale and Merger During the reporting period, the Bank had no material assets
+acquisition, sale and merger.
+Staff Union Working
+Committee
+118
+ICBC
+Party-related
+Global Market
+Department
+Credit and Investment
+Corporate
+Risk
+Management
+Departments
+Profitability
+Units
+Institutional Banking
+Department
+Marketing
+Management
+Departments
+Inclusive Finance
+Department
+Bank Card
+Department
+(ICBC Peony Card
+Center)
+Corporate
+Culture
+Department
+Information
+Management
+Department
+Operation
+Management
+Department
+Financial Technology
+Department
+Supporting
+Departments
+International
+Department*
+Management
+Channel
+Department
+Corporate Strategy and
+Investor Relations
+Asset & Liability
+Management
+Department
+Human Resources
+Department
+Legal Affairs
+Department (Consumer
+Protection Office)
+Internal Control &
+Compliance
+Department
+Risk Management
+Department
+Finance & Accounting
+Department
+Credit Approval
+Department
+Executive Office
+Comprehensive
+Administration
+Departments
+Pension Business
+Department
+Special Financing
+Department
+(Banking Department)
+Precious Metal
+Business Department
+Investment Banking
+Department
+Private Banking
+Department
+ICBC Bills Discounting
+Department
+Asset Custody
+Department
+Asset Management
+Department
+Internet Finance
+Department*
+Settlement & Cash
+Management
+Department
+Head Office Departments, Profitability Units and
+Directly Managed Institutions of the Head Office
+Directly
+Managed
+Institutions
+Internal Audit
+Sub-bureau
+Commitments
+As at 31 December 2018, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Shareholder
+Huijin
+commitment
+Commitment
+Type of
+Time and term of
+commitment
+of non-
+Significant Events
+October 2006/
+No specific
+term
+November 2010/
+No specific
+term
+Legal document
+under which the
+commitment
+is made
+Prospectus of
+Industrial and
+Commercial
+Bank of China
+Limited on
+Initial Public
+Offering
+(A Share)
+Prospectus
+on A Share
+Rights Issue of
+Industrial and
+Commercial
+Bank of China
+Limited
+Commitment
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or the
+listing place of the Bank, Huijin will not
+engage in or participate in any competitive
+commercial banking business including but
+not limited to granting loans, attracting
+deposits and providing settlement, fund
+custody, bank card and money exchange
+services. However, Huijin can engage in or
+participate in some competitive businesses
+by investing in other commercial banks.
+In this regard, Huijin has committed that
+it will: (1) fairly treat the investments in
+commercial banks and will not make
+any decision or judgment that will
+have adverse impact on the Bank or be
+beneficial to other commercial banks by
+taking advantage of the status of being
+a shareholder of the Bank or information
+obtained by taking advantage of the status
+of being a shareholder of the Bank; and
+(2) perform the shareholders' rights for the
+maximum interests of the Bank.
+competition
+Fulfillment of
+commitment
+ICBC
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders and other related parties of the Bank occupied any fund of the Bank. The
+auditors have issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related
+Parties of Industrial and Commercial Bank of China Limited in 2018.
+Implementation of Share Incentive Plan and Employee Stock Ownership Plan during the
+Reporting Period During the reporting period, the Bank did not implement any share incentive plan or any employee
+stock ownership plan.
+Performance of the Poverty Relief Social Responsibility Please refer to the section headed "Social
+Responsibility" for details of the Bank's poverty relief social responsibility performance during the reporting period.
+Environmental Information Please refer to the section headed "Social Responsibility" for the details of the Bank's
+environmental information during the reporting period.
+Key Audit Matters The Audit Committee has reviewed the key audit matters in the audit report and concluded that
+it is unnecessary to provide a supplementary explanation.
+Material Related Party Transactions
+During the reporting period, the Bank did not enter into any material related party transactions.
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws and regulations of China and the relevant accounting standards.
+Annual Report 2018
+116
+115
+Material Contracts and Performance of Obligations thereunder
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material sub-contract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's assets, which were subject to disclosure.
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needs to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and the CBIRC.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies issued by CSRC and the State-owned Assets
+Supervision and Administration Commission of the State Council and relevant provisions of SSE, we, in the capacity
+of Independent Non-executive Directors of the Bank, reviewed external guarantees of the Bank on the principles of
+fairness, impartiality and objectivity, and hereby give our specific explanation and opinions as follows: upon review,
+external guarantees provided by the Bank mainly focus on issuance of letters of guarantee, which is part of the
+ordinary banking services within the business scope of the Bank as approved by relevant regulatory authorities. As at
+31 December 2018, the balance of letters of guarantee issued by the Bank totaled RMB509,301 million.
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Hong Yongmiao, Anthony Francis Neoh, Yang Siu Shun, Sheila Colleen Bair, Shen Si and Nout Wellink
+Significant Events
+Internal Audit Bureau
+As at
+31 December
+2018, Huijin
+strictly fulfilled
+the above
+commitment
+and did not
+do anything in
+violation of the
+commitment.
+Disciplinary Actions During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior
+Management members and controlling shareholders was subject to any investigation by competent authorities, coercive measures
+taken by judicial authorities or disciplinary inspection departments, transferred to judicial authorities or charged for criminal
+responsibility, case filing investigation or administrative penalty by CSRC, restricted access to market, identification as unqualified,
+major penalty by other administrative authorities of environmental protection, safety supervision, taxation, etc. or public
+reprimand by the stock exchanges.
+Shareholders'
+Save as disclosed above, neither the Bank nor any of its other related parties made any commitments in performing.
+General Meeting
+Audit Committee
+Related Party
+Transactions Control
+Compensation
+Committee
+Committee
+Nomination
+Committee
+Senior Management
+Risk
+Management
+Committee
+Board of Directors' Office
+Board of Directors
+Organizational Chart
+117
+Strategy
+Committee
+Establishment of Wealth Management Subsidiary The Board of Directors of the Bank reviewed and
+approved the Proposal on the Establishment of ICBC Wealth Management Co., Ltd. at the meeting of the Board of Directors
+convened on 26 November 2018. The proposal is to establish a wholly-owned subsidiary ICBC Wealth Management Co.,
+Ltd. by contributing no more than RMB16.0 billion of the Bank's proprietary funds. On 15 February 2019, CBIRC officially
+approved the Bank's establishment of ICBC Wealth Management Co., Ltd.
+Annual Report 2018
+36. Other Liabilities
+142
+NOTES TO THE FINANCIAL STATEMENTS
+221
+35. Debt Securities Issued
+221
+225
+1.
+2.
+Summary of Significant Accounting Policies
+142
+37. Share Capital
+225
+3.
+154
+38. Other Equity Instruments
+226
+4.
+Significant Accounting Judgements and
+39. Reserves
+230
+Estimates
+172
+34. Due to Customers
+Basis of Preparation
+Corporate Information
+Net Trading Income
+40. Components of Other Comprehensive Income 233
+41. Involvement With Unconsolidated Structured
+11. Operating Expenses
+178
+46. Designated Funds and Loans
+240
+12. Directors' and Supervisors' Emoluments
+179
+47. Assets Pledged as Security
+240
+13. Five Highest Paid Individuals
+183
+48. Fiduciary Activities
+241
+14. Impairment Losses on Assets
+183
+49. Related Party Disclosures
+241
+15. Income Tax Expense
+184
+141
+238
+45. Commitments and Contingent Liabilities
+178
+10. Other Operating Income, Net
+Entities
+234
+6.
+International Financial Reporting Standards 174
+Net Interest Income
+177
+42. Notes to the Consolidated Cash Flow
+Statement
+236
+7.
+5. Impact of Issued But Not Yet Effective
+Net Fee and Commission Income
+43. Transferred Financial Assets
+237
+8.
+177
+9.
+Net Gain on Financial Investments
+178
+44. Share Appreciation Rights Plan
+238
+177
+Statement of Financial Position
+Board of Supervisors
+220
+(36)
+Banking Departments of Tier-one Branches and
+Tier-two Branches (446)
+Grassroots Branches
+(15,752)
+Overseas Branches
+and their Institutions
+(50)
+Overseas Subsidiaries
+and their Institutions
+(376)
+ICBC Leasing
+Domestic Subsidiaries
+and their Branches
+ICBC Credit Suisse
+Asset Management
+ICBC-AXA
+ICBC Investment
+Rural Banks
+Primary reporting line
+Secondary reporting line
+Annual Report 2018
+(including Directly Managed Branches)
+119
+Tier-one Branches
+Domestic Institutions
+Corporate Banking
+Promotion Committee
+50. Segment Information
+Organizational Chart
+Supervisory Board Office
+Retail Banking
+Promotion Committee
+Institutional Banking
+Promotion Committee
+Investment Banking
+Promotion Committee
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Domestic Branches
+Internet Finance
+Financial Technology
+Financial Assets Service
+Management Committee
+Inclusive Finance
+Promotion Committee Development Committee Promotion Committee
+Overseas Institutions
+Company:
+Auditor's Report and
+CONTENTS
+219
+Other Comprehensive Income
+134
+31. Due to Banks and Other Financial
+Statement of Financial Position
+135
+Institutions
+220
+Statement of Changes in Equity
+137
+32. Repurchase Agreements
+220
+Cash Flow Statement
+139
+33. Certificates of Deposit
+Fair Value through Profit or Loss
+Financial Statements
+Statement of Profit or Loss and
+30.
+Pages
+Pages
+INDEPENDENT AUDITOR'S REPORT
+Consolidated:
+122
+27. Property and Equipment
+212
+AUDITED FINANCIAL STATEMENTS
+28. Deferred Income Tax Assets and Liabilities
+215
+29.
+Other Assets
+218
+Statement of Profit or Loss
+133
+Financial Liabilities Designated as at
+245
+The Group classifies financial instruments into three stages
+and recognises an impairment allowance based on the
+expected credit loss for the next 12 months or the entire
+lifetime of the financial asset, depending on whether credit
+risk on that financial instrument has increased significantly
+since initial recognition and whether an asset is considered
+to be credit-impaired respectively.
+51. Financial Instruments Risk Management
+evaluating the experience,
+competence and integrity of the external appraiser
+engaged by the Group to value certain property and
+illiquid collateral, including comparing the valuations
+with externally derived data such as commodity
+prices and real estate valuations; and
+evaluating whether the disclosures relating to
+loss allowance for expected credit losses met the
+disclosure requirements of the prevailing accounting
+standards.
+Annual Report 2018
+125
+Independent Auditor's Report
+Key audit matters (continued)
+independence,
+Recognition of interests in and consolidation of structured entities
+The key audit matter
+Structured entities are generally created to achieve a
+narrow and well defined objective with restrictions around
+their ongoing activities which include providing investment
+services and products to customers and managing the
+Group's assets and liabilities.
+The Group may acquire or retain an ownership interest in,
+or act as a sponsor to, a structured entity, through issuing
+a wealth management product, an investment fund, an
+asset management plan, a trust plan, a structured lease
+or an asset-backed security. The Group may also retain
+partial interests in derecognised assets due to guarantees
+or securitisation structures.
+How the matter was addressed in our audit
+Our audit procedures to assess the recognition of interests
+in and consolidation of structured entities included the
+following:
+making enquiries of management and inspecting
+documents relating to the judgment process over
+whether a structured entity is consolidated or not
+to assess whether the Group has a robust process in
+this regard.
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+sources.
+performing credit assessments for the selected credit
+impaired corporate loans and advances by assessing
+the forecast of recoverable cash flows through
+inquiry, applying judgment and our own research.
+We evaluated the timing and means of realisation of
+collateral and considered other sources of repayment
+asserted by management. We also evaluated the
+consistency of management's application of key
+assumptions and compared them with our own data
+selecting samples to assess the reasonableness of
+management judgments on whether the credit risk
+has increased significantly since initial recognition
+and whether credit impairment has occurred. We
+analysed the loan portfolio by industry sector to
+select samples in industries vulnerable to the current
+economic situation and regulation measures. We
+also focused on loans with perceived higher risk
+and selected samples from non-performing loans,
+overdue but performing loans and borrowers with
+negative warning signs or adverse press coverage.
+•
+assessing key parameters involving judgments
+by seeking evidence from external sources and
+comparing it with internal records including historical
+loss experience and type of collaterals. As part
+of these procedures, we inquired management
+for the reasons of modifications of estimates and
+model parameters, considered the consistency of
+management judgments, and assessed key internal
+controls over the input of underlying data into the
+models.
+comparing the economic factors used in the models
+with market information to assess whether they were
+aligned with market and economic development.
+performing back-testing, which included the
+assessment of the model's predictions using
+quantitative methods to measure the outputs against
+the actual realised observations, including how they
+change over time.
+124
+ICBC
+Independent Auditor's Report
+Key audit matters (continued)
+Impairment of loans and advances to customers (continued)
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+The key audit matter
+Loss allowances for the credit-impaired corporate loans
+and advances are measured using the discounted cash
+flow method. Management exercises judgment in
+determining recoverable cash flow based on a range
+of factors. These factors include available remedies for
+recovery, the financial situation of the borrowers, collateral
+valuation, the seniority of the claim and the existence
+and cooperativeness of other creditors. Whilst the Group
+appoints an external appraiser for the valuation of certain
+property and other illiquid collateral, enforceability,
+timing and means of realisation also affect the ultimate
+collectability and thereby the amount of expected credit
+loss allowances at the end of the reporting period.
+We identified the loss allowance for expected credit losses
+as a key audit matter because of the inherent uncertainty
+and management judgments involved, and because the
+loss allowance is significant to the financial results and
+capital of the Group.
+How the matter was addressed in our audit
+.
+selecting significant structured entities of each
+key product type and performing the following
+procedures for each structured entity selected:
+inspecting the related contracts, internal
+establishment documents and information
+I disclosed to the investors to understand the
+purpose of the establishment of the structured
+entity and the involvement the Group has
+with the structured entity and to assess
+management's judgment over whether the
+Group has the ability to exercise power over
+the structured entity;
+126
+ICBC
+Financial instruments carried at fair value account for a
+significant part of the Group's assets and liabilities. The
+effect of fair value adjustments of financial instruments
+may impact either the profit or loss or other comprehensive
+income.
+The valuation of the Group's financial instruments, held
+at fair value, is based on a combination of market data
+and valuation models which often require a considerable
+number of inputs. Many of these inputs are obtained
+from readily available data, in particular for level 1 and
+level 2 financial instruments in the fair value hierarchy,
+the valuation techniques for which use quoted market
+prices and observable inputs, respectively. Where one or
+more significant inputs are unobservable in the valuation
+techniques, as in the case of level 3 financial instruments,
+then estimates need to be developed which can involve
+significant management judgment.
+The Group has developed its own models to value certain
+level 2 and level 3 financial instruments, which also involve
+significant management judgment.
+We identified assessing the fair value of financial
+instruments as a key audit matter because of the degree of
+complexity involved in valuing certain financial instruments
+and because of the degree of judgment exercised by
+management in determining the inputs used in the
+valuation models.
+How the matter was addressed in our audit
+Our audit procedures to assess the fair value of financial
+instruments included the following:
+•
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+valuation, independent price verification, front office
+and back office reconciliations and model approval
+for financial instruments.
+assessing the level 1 fair values, on a sample basis, by
+comparing the fair values applied by the Group with
+publicly available market data.
+involving our internal valuation specialists to assist us
+in performing independent valuations, on a sample
+basis, of level 2 and level 3 financial instruments
+and comparing our valuations with the Group's
+valuations. Our procedures included developing
+parallel models, obtaining inputs independently and
+verifying the inputs.
+engaging our internal valuation specialists to conduct
+model validation, on a sample basis, for the valuation
+of complex financial instruments.
+assessing the appropriate application of fair value
+adjustment that form an integral part of fair values,
+inquiring of management about any changes in the
+fair value adjustment methodologies and assessing
+the appropriateness of the inputs applied; and
+assessing whether the disclosures in the consolidated
+financial statements, including fair value hierarchy
+information and sensitivity to key inputs,
+appropriately reflected the Group's exposure to
+financial instrument valuation risk with reference
+to the requirements of the prevailing accounting
+standards.
+128
+ICBC
+The key audit matter
+How the matter was addressed in our audit
+Refer to the accounting policies on "Note 3. (5) to the Financial Statements: Financial Instruments", "Note 4. to the
+Financial Statements: Significant Accounting Judgments and Estimates" and "Note 52. to the Financial Statements: Fair
+Value of Financial Instruments".
+Key audit matters (continued)
+Independent Auditor's Report
+Key audit matters (continued)
+Recognition of interests in and consolidation of structured entities (continued)
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+The key audit matter
+In determining whether the Group should retain any partial
+interests in a structured entity or should consolidate a
+structured entity, management is required to consider the
+risks and rewards retained, the power the Group is able
+to exercise over the activities of the entity and its ability
+to influence the Group's own returns from the entity.
+These factors are not purely quantitative and need to
+be considered collectively in the overall substance of the
+transactions.
+We identified the recognition of interests in and
+consolidation of structured entities as a key audit matter
+because of the complex nature of certain of these
+structured entities and because of the judgment exercised
+by management in the qualitative assessment of the terms
+and the nature of each entity.
+How the matter was addressed in our audit
+inspecting the risk and reward structure of
+the structured entity, including any capital
+or return guarantee, provision of liquidity
+support, commission paid and distribution of
+the returns, to assess management's judgment
+as to the exposure, or rights, to variable
+returns from the Group's involvement in such
+an entity;
+evaluating management's analysis of the
+structured entity, including qualitative analysis
+and the calculation of the magnitude and
+variability associated with the Group's economic
+interests in the structured entity, to assess
+management's judgment over the Group's
+ability to influence its own returns from the
+structured entity;
+assessing management's judgment over
+whether the structured entity should be
+consolidated or not; and
+16. Profit Attributable to Equity Holders
+Annual Report 2018
+127
+Independent Auditor's Report
+Fair value of financial instruments
+The loss allowance for loans and advances to customers,
+other than those corporate loans and advances which are
+credit-impaired, is measured using the risk parameters
+method. The key parameters include probability of default
+(PD), loss given default (LGD) and exposure at default
+(EAD), which are derived from considerations including the
+historical overdue data, historical loss ratio, internal credit
+grading and other adjustment factors.
+evaluating the disclosures in the financial statements
+in relation to the recognition of interests in and
+consolidation of structured entities with reference
+to the requirements of the prevailing accounting
+standards.
+297
+Financial Institutions
+187
+56. Approval of the Consolidated
+Financial Statements
+298
+21. Derivative Financial Instruments
+22. Reverse Repurchase Agreements
+UNAUDITED SUPPLEMENTARY FINANCIAL
+195
+INFORMATION
+299
+23. Loans and Advances to Customers
+196
+24. Financial Investments
+200
+25. Investments in Subsidiaries
+298
+208
+55. Comparative Amounts
+298
+The key audit matter
+250
+of the Parent Company
+52. Fair Value of Financial Instruments
+286
+184
+17. Dividends
+185
+53. Company-Level Statement of
+18. Earnings Per Share
+185
+Financial Position
+19. Cash and Balances With Central Banks
+186
+54. After the Reporting Period Event
+20. Due From Banks and Other
+26. Investments in Associates and
+188
+210
+The key audit matter
+The Group has adopted International Financial Reporting
+Standard 9 Financial instruments ("IFRS 9") since 1 January
+2018. IFRS 9 uses the expected credit loss ("ECL") model
+to calculate the loss allowance.
+Impairment of loans and advances to customers is a
+subjective area due to the degree of judgment applied
+by management in determining impairment allowances.
+From the Group's perspective, the determination of the
+loss allowances for loans and advances to customers is
+heavily dependent on the external macro environment and
+the Group's internal credit risk management strategy, and
+the judgments in determining the loss given default or the
+assessment of recoverable cash flows relating to individual
+loans and advances to customers, where loans and
+advances to customers were unsecured or were subject to
+potential collateral shortfalls.
+How the matter was addressed in our audit
+Our audit procedures to assess loss allowance for expected
+credit losses included the following:
+evaluating the effectiveness of internal control
+operations related to provision for expected credit
+losses:
+assessing the key design and operational
+effectiveness of internal controls of the
+financial reporting process, including credit
+approval, recording, monitoring, re-evaluation
+of periodic credit grading, and the accrual
+of loss allowance; In particular, we assessed
+the design, implementation and operating
+effectiveness of the key internal controls over
+the classification of loans by credit quality
+across all stages;
+assessing the information system controls,
+including general information technology
+control, completeness of key internal historical
+data, data transmission between systems,
+mapping of parameters of expected credit
+loss model, and system calculation of loss
+allowance for expected credit loss.
+Joint Ventures
+Annual Report 2018
+123
+Independent Auditor's Report
+Key audit matters (continued)
+Impairment of loans and advances to customers (continued)
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers
+assessing the reliability of expected credit loss
+models and parameters used, including evaluating
+probability of default, loss given default, exposure at
+default, discount rate, forward-looking adjustment
+and other adjustment factors, and evaluating the
+reasonableness of key management judgments
+involved.
+Independent Auditor's Report
+Annual Report 2018
+Key audit matters (continued)
+121
+Independent Auditor's Report
+KPMG
+(Incorporated in the People's Republic of China with limited liability)
+Opinion
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank") and
+its subsidiaries (the "Group") set out on pages 133 to 298, which comprise the consolidated and the Bank's statements of
+financial position as at 31 December 2018, the consolidated statement of profit or loss, the consolidated statement of profit
+or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow
+statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
+To the shareholders of Industrial and Commercial Bank of China Limited
+Basis for opinion
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code") together with any ethical requirements that are
+relevant to our audit of the consolidated financial statements in the People's Republic of China, and we have fulfilled our
+other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis for our opinion.
+ICBC
+Key audit matters
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Bank and of
+the Group as at 31 December 2018 and of the Group's financial performance and cash flows for the year then ended in
+accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+122
+reserve
+reserve
+reserve
+reserve
+reserve
+capital instruments
+Other
+reserves Subtotal
+Retained
+reserve
+Balance as at 1 January 2017
+586,630
+356,407 86,051 152,043
+205,021 251,349
+1,133
+(18,050)
+(4,645)
+(221)
+Other comprehensive income (note 40)
+(32,885)
+(8,252)
+hedging
+884
+Profit for the year
+General revaluation translation
+356,407
+Capital
+(67)
+86,051 152,043 261,720 279,064 15,495 (22,894) (3,804)
+(747)
+680,877 1,206,666 2,330,001
+14,882 2,344,883
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB103 million and RMB596 million,
+respectively.
+Includes the reversal made by overseas branches in the amounts of RMB9 million and appropriation made by subsidiaries in
+the amounts of RMB2,345 million, respectively.
+The notes on pages 142 to 298 form part of these financial statements.
+Annual Report 2018
+137
+Consolidated Statement of Changes in Equity
+Year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(i)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Issued
+Other
+Investment currency
+Cash flow
+share
+equity
+Surplus
+(40,320)
+(194)
+Total comprehensive income
+Others
+Balance as at
+31 December 2017
+2,312
+2,312
+.
+(194)
+(309)
+(309)
+(46)
+shareholders
+(46)
+(46)
+356,407 86,051 152,043 232,703
+264,892 (31,752) (26,302) (3,761) (334)
+587,489 1,097,544 2,127,491
+13,565 2,141,056
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB107 million and
+RMB516 million, respectively.
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB20 million and RMB477 million,
+respectively.
+The notes on pages 142 to 298 form part of these financial statements.
+138
+ICBC
+(46)
+Dividends to non-controlling
+subsidiaries
+Change in share holding in
+2016 final (note 17)
+Dividends preference shares (note 17)
+Appropriation to surplus reserve (1)
+(32,885) (8,252)
+884
+(67)
+(40,320)
+286,049
+Non-
+controlling Total
+profits Total interests equity
+940,663 1,969,751 11,412 1,981,163
+286,049 286,049 1,402 287,451
+(40,320) (1,058) (41,378)
+245,729
+344
+246,073
+(83,506) (83,506)
+(83,506)
+(4,437) (4,437)
+(4,437)
+Appropriation to general reserve (ii)
+27,682
+13,543
+27,682
+(27,682)
+13,543
+(13,543)
+Capital injection by non-controlling
+shareholders
+Dividends ordinary shares
+16
+14,172
+(327)
+Diluted (RMB yuan)
+18
+0.82
+0.79
+18
+0.82
+0.79
+Details of the dividends declared and paid or proposed are disclosed in Note 17 to the financial statements.
+The notes on pages 142 to 298 form part of these financial statements.
+Annual Report 2018
+133
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+(327)
+(In RMB millions, unless otherwise stated)
+Profit for the year
+Other comprehensive income (after tax, net):
+Items that will not be reclassified to profit or loss:
+Notes
+2018
+2017
+298,723
+287,451
+40
+Changes in fair value of equity instruments designated as at
+fair value through other comprehensive income
+Other comprehensive income recognised under equity method
+Others
+Basic (RMB yuan)
+1,605
+1,402
+287,451
+1,047
+PROFIT FOR THE YEAR
+Attributable to:
+Equity holders of the parent company
+Non-controlling interests
+PROFIT FOR THE YEAR
+EARNINGS PER SHARE
+11
+(194,203)
+(186,194)
+14
+(161,594)
+(127,769)
+369,324
+361,691
+3,089
+2,950
+372,413
+364,641
+15
+(73,690)
+(77,190)
+298,723
+287,451
+297,676
+286,049
+298,723
+(5)
+(29)
+3
+Items that may be reclassified subsequently to profit or loss:
+Changes in fair value of debt instruments measured at
+245,729
+1,551
+326,532
+344
+246,073
+Consolidated Statement of Financial Position
+31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes
+31 December 2018 31 December 2017
+ASSETS
+Cash and balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+21
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+222222
+19
+20
+3,372,576
+962,449
+3,613,872
+847,611
+71,335
+89,013
+324,981
+ICBC
+134
+The notes on pages 142 to 298 form part of these financial statements.
+fair value through other comprehensive income
+24,599
+Credit losses of debt instruments measured at fair value through
+other comprehensive income
+(1,238)
+Net loss from change in fair value of available-for-sale
+financial assets
+(33,494)
+Reserve from cash flow hedging instruments
+(53)
+939
+Other comprehensive income recognised under equity method
+488
+(757)
+Income tax expense
+Foreign currency translation differences
+(8,752)
+Others
+(903)
+712
+Subtotal of other comprehensive income for the year
+27,809
+(41,378)
+Total comprehensive income for the year
+326,532
+246,073
+Total comprehensive income attributable to:
+Equity holders of the parent company
+Non-controlling interests
+3,325
+PROFIT BEFORE TAXATION
+Share of profits of associates and joint ventures
+OPERATING PROFIT
+assessing whether the relevant disclosures in relation
+to transition to IFRS 9 at 1 January 2018 were in
+compliance with the prevailing accounting standards.
+130
+ICBC
+Independent Auditor's Report
+Other information
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+Responsibilities of the directors for the consolidated financial statements
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue as
+a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
+unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+Auditor's responsibilities for the audit of the consolidated financial statements
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This
+report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+•
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+Annual Report 2018
+131
+Independent Auditor's Report
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+obtaining journal entries relating to adjustments
+made on transition to the IFRS 9 and comparing it
+Iwith the list of classification, valuation, expected
+credit loss of financial instruments as at 1 January
+2018, to assess the completeness and accuracy
+of adjustment journals, and compliance with the
+prevailing accounting standards; and
+obtaining a list of hedge accounting items as at
+1 January 2018 and selecting samples and checking
+relevant hedging documents to determine whether
+they meet the requirements of the IFRS 9.
+with the assistance of our internal valuation
+specialists, assessing the design and methodology of
+the expected credit loss model, and evaluating the
+key parameters including probability of default, loss
+given default, exposure at default, discount rate,
+forward-looking adjustment and other adjustment
+factors, and evaluating the reasonableness of key
+management judgments involved.
+involving our internal valuation specialists in
+evaluating the valuation method of financial assets
+and the key parameters used for financial assets
+that are measured at fair value due to changes
+in classification and measurement, and selecting
+samples to independently verify their fair value.
+Independent Auditor's Report
+Key audit matters (continued)
+IT systems and controls over financial reporting
+The key audit matter
+As one of the largest banking groups in the world, the
+Group's IT systems are necessarily large and complex.
+Automated accounting procedures and IT environment
+controls, which include IT governance, controls over
+program development and changes, access to programs
+and data and IT operations, are required to be designed
+and to operate effectively to ensure accurate financial
+reporting.
+Of particular importance are system calculations and data
+logic regarding significant accounts, including interest
+calculations, as well as interfaces between business
+management systems and accounting systems.
+The volume of on-line transactions of the Group
+increased rapidly over the past year. With the continuous
+development of new technologies, the Group is facing new
+challenges on cyber security and data protection.
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are
+fundamentally reliant on complex IT systems and control
+processes which are driven by significant transaction
+volumes caused by the size of the customer base both in
+the corporate and the retail banking businesses in China
+and globally.
+How the matter was addressed in our audit
+We involved our internal IT specialists in our assessment of
+the IT systems and controls over financial reporting, which
+included carrying out the following audit procedures:
+assessing the design, implementation and
+operating effectiveness of key internal controls
+over the continued integrity of all major IT systems
+fundamental to dealing with the financial data,
+particularly financial reporting.
+evaluating the design, implementation and operating
+effectiveness of the significant accounts-related
+IT automated controls which are relevant to the
+accuracy of system calculation, and the consistency
+of data transmission, covering business in corporate
+loans, financial asset service, interbank business,
+bills, retail business and others, as well as key
+accounting procedures; and
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+evaluating the design, implementation and
+operating effectiveness of the cybersecurity
+management mechanism, the operational security
+of key information infrastructure, data and client
+information management, and monitoring and
+emergency management.
+129
+Independent Auditor's Report
+Key audit matters (continued)
+Adjustments and disclosures in relation to transition to the International Financial Reporting Standard 9
+Financial instruments
+Refer to "Note 2. (3) to the Financial Statements: Change in accounting policies".
+The key audit matter
+The Group has applied International Financial Reporting
+Standard 9 Financial Instruments ("IFRS 9") since 1 January
+2018.
+IFRS 9 revised the requirements for the classification and
+measurement of financial instruments previously adopted,
+and requires the loss allowance of expected credit losses
+to be recognised for relevant financial assets and credit
+commitments. In addition, it also provides greater flexibility
+of transaction types in applying hedging accounting. The
+Group is required to make retrospective adjustments on
+the classification and measurement, the loss allowance,
+and hedge accounting of financial instruments in
+accordance with the requirements of the IFRS 9.
+We identified the adjustments and disclosures in relation
+to the transition to IFRS 9 as a key audit matter, because
+of the complexity of the transition process which involved
+changes in internal controls of the financial reporting
+process, accounting treatments, and application of new
+system data; also, management judgment was applied.
+How the matter was addressed in our audit
+Our audit procedures relating to the transition to IFRS 9
+included the following:
+assessing the key internal controls of the financial
+reporting process related to the transition to IFRS
+9, including internal control processes related to
+the selection and approval of accounting policy
+and expected credit loss model methodology, and
+information system related controls.
+assessing the accuracy of the classification of
+financial instruments, including obtaining a list of
+financial instruments classified by management as
+at 1 January 2018, selecting samples to check the
+contractual cash flow terms, and understanding
+and evaluating the business model of the relevant
+financial instrument portfolio.
+Annual Report 2018
+23
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+162,347
+158,666
+(17,046)
+(19,041)
+NET FEE AND COMMISSION INCOME
+7
+145,301
+139,625
+Net trading income
+8
+2,846
+5,753
+Net gain on financial investments
+9
+1,345
+2,165
+Other operating income, net
+OPERATING INCOME
+10
+3,111
+6,033
+725,121
+675,654
+Operating expenses
+Impairment losses on assets
+522,078
+572,518
+(339,516)
+(375,576)
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, related safeguards.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Wong Yuen Shan.
+KPMG
+Certified Public Accountants
+8th Floor, Prince's Building
+10 Chater Road
+Central, Hong Kong
+28 March 2019
+132
+ICBC
+Consolidated Statement of Profit or Loss
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+Year ended 31 December 2018
+Notes
+2018
+Interest income
+Interest expense
+NET INTEREST INCOME
+Fee and commission income
+Fee and commission expense
+66
+60
+77
+948,094
+2017
+861,594
+(In RMB millions, unless otherwise stated)
+734,049
+15,046,132
+Year ended 31 December 2018
+24
+Impact of adopting IFRS 9
+22,877
+587,489 1,097,544 2,127,491 13,565 2,141,056
+22,877 (55,035) (32,158) (32) (32,190)
+Balance as at 1 January 2018
+356,407
+86,051
+152,043
+232,703 264,892
+(8,875) (26,302)
+(3,761)
+(334)
+Retained
+controlling Total
+Subtotal profits Total interests equity
+610,366 1,042,509
+13,533 2,108,866
+Profit for the year
+297,676
+297,676
+1,047 298,723
+Other comprehensive income
+(note 40)
+24,369
+3,408
+(43)
+(429)
+2,095,333
+27,305
+Other
+reserve reserves
+(3,761) (334)
+86,051 152,043 232,703 264,892
+Vice Chairman and President
+General Manager of Finance
+and Accounting Department
+The notes on pages 142 to 298 form part of these financial statements.
+136
+ICBC
+Consolidated Statement of Changes in Equity
+Year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(i)
+Attributable to equity holders of the parent company
+(31,752) (26,302)
+Reserves
+Other
+share equity
+capital instruments
+Capital
+Surplus
+reserve
+reserve
+Foreign
+Investment currency
+General revaluation translation
+reserve reserve reserve
+Cash flow
+hedging
+Non-
+Balance as at 31 December 2017
+986,631
+Issued
+Zhang Wenwu
+27,305
+27,809
+(29,017)
+14,172
+(14,172)
+1
+1
+76
+76
+subsidiaries
+Dividends to non-controlling
+shareholders
+Other comprehensive income
+29,017
+transferred to retained earnings
+Balance as at
+31 December 2018
+(ii)
+1
+(1)
+16
+16
+16
+49
+40
+49
+Others
+504
+29,017
+(4,506)
+Total comprehensive income
+24,369
+3,408
+(43)
+(429)
+27,305
+297,676
+324,981
+1,551 326,532
+reserve (i)
+Dividends ordinary shares
+(4,506)
+2017 final (note 17)
+(note 17)
+Appropriation to surplus
+Appropriation to general
+reserve (ii)
+Capital injection by non-controlling
+shareholders
+Change in share holding in
+(85,823)
+(85,823)
+(85,823)
+(4,506)
+Dividends preference shares
+Gu Shu
+356,407
+27,699,540
+260,274
+19,562,936
+Income tax payable
+Deferred income tax liabilities
+28
+84,741
+1,217
+70,644
+433
+Debt securities issued
+35
+617,842
+526,940
+Other liabilities
+36
+409,819
+603,500
+TOTAL LIABILITIES
+23,945,987
+EQUITY
+Equity attributable to equity holders of the parent company
+Share capital
+37
+356,407
+356,407
+Other equity instruments
+38
+86,051
+86,051
+Reserves
+39
+21,408,934
+34
+Due to customers
+341,354
+26,087,043
+87,400
+30
+Financial liabilities designated as at fair value through profit or loss
+481
+Due to central banks
+31 December 2018 31 December 2017
+Notes
+LIABILITIES
+(In RMB millions, unless otherwise stated)
+31 December 2018
+Consolidated Statement of Financial Position
+135
+Annual Report 2018
+680,877
+The notes on pages 142 to 298 form part of these financial statements.
+Derivative financial liabilities
+21
+73,573
+78,556
+Due to banks and other financial institutions
+31
+1,814,495
+1,706,549
+Repurchase agreements
+32
+514,801
+1,046,338
+Certificates of deposit
+33
+456
+89,361
+587,489
+25,354,657
+26,087,043
+1,430,163
+other comprehensive income
+Financial investments measured at fair value through
+440,938
+805,347
+Financial investments measured at fair value through
+profit or loss
+13,892,966
+5,756,704
+6,754,692
+1,206,666
+1,097,544
+2,330,001
+2,127,491
+Retained profits
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+14,882
+13,565
+2,344,883
+2,141,056
+Financial investments measured at amortised cost
+4,519,182
+Non-controlling interests
+Held-to-maturity investments
+27,699,540
+TOTAL ASSETS
+571,669
+48,392
+Available-for-sale financial assets
+247,744
+32,441
+29,124
+290,404
+58,375
+380,404
+27
+2282
+26
+1,496,453
+3,542,184
+Receivables
+277,129
+Other assets
+Investments in associates and joint ventures
+Property and equipment
+Deferred income tax assets
+29
+(3) Change in accounting policies
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS"), and
+International Financial Reporting Interpretations Committee ("IFRICS")) that are effective in 2018 and relevant to the Group's
+operation.
+1. CORPORATE INFORMATION
+IFRS 9
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Amendments to IFRS 2
+Amendments to IAS 40
+IFRIC 22
+IFRS 15
+Notes to the Financial Statements
+141
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+ICBC
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4. The
+consolidated financial statements should be read in conjunction with the Group's annual consolidated financial statements
+for the year ended 31 December 2017, which have been audited.
+Annual Improvements to IFRSS 2014-2016 Cycle
+Reporting Standards and Amendments to IAS 28,
+Amendments to IFRS 4
+Notes to the Financial Statements
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative
+financial instruments, financial assets and financial liabilities measured at fair value through profit or loss and financial
+assets measured at fair value through other comprehensive income, as further explained in the respective accounting
+policies below.
+(2) Basis of preparation
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+(1) Statement of compliance
+2. BASIS OF PREPARATION
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+The Bank's A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong
+Limited and the stock codes are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on the
+Stock Exchange of Hong Kong Limited and the stock codes are 4603, 4604 and 84602, respectively. The Bank's domestic
+preference shares are listed on the Shanghai Stock Exchange and the stock code is 360011.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking and Insurance Regulatory Commission
+(the "CBIRC") of the PRC. The Bank obtained its business license with unified social credit code 91100000100003962T from
+the State Administration for Industry and Commerce of the PRC. The registered office is located at No. 55 Fuxingmennei
+Avenue, Xicheng District, Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring.
+142
+Revenue from contracts with customers
+allowance under IAS 39
+Share-based payment "Classification and measurement of share-based
+Annual Report 2018
+785,263
+(548)
+255,860
+529,951
+351,802
+148,518
+(720)
+724
+(1,799)
+E
+353,601
+ICBC
+C, H
+148
+Financial assets measured at FVTPL
+Balance under IFRS 9
+Less: to amortised cost (IFRS 9)
+Balance under IAS 39
+Financial investments - designated as at FVTPL
+Balance under IFRS 9
+Remeasurement: fair value remeasurement
+31,563
+Investment property "Transfers of investment property"
+payment transactions"
+Financial instruments
+The notes on pages 142 to 298 form part of these financial statements.
+Retained profits
+Vice Chairman and President
+34,242
+27
+124,548
+122,387
+56,220
+47,250
+29
+269,769
+483,090
+26,072,160
+24,645,112
+LIABILITIES
+Due to central banks
+410
+404
+Financial liabilities designated as at fair value through
+profit or loss
+30
+78,737
+73,852
+Derivative financial liabilities
+34,242
+26
+120,301
+122,110
+Investments in subsidiaries
+Receivables
+- Held-to-maturity investments
+- Available-for-sale financial assets
+398,329
+5,428,233
+750,763
+13,125,401
+53,856
+930,593
+3,548,996
+21
+Investments in associates
+Deferred income tax assets
+Other assets
+TOTAL ASSETS
+1,245,837
+4,362,174
+1,358,802
+3,439,471
+231,631
+22282
+25
+Property and equipment
+42,120
+46,682
+Due to banks and other financial institutions
+35
+36
+55
+499,291
+247,348
+436,275
+436,376
+23,824,295
+22,585,711
+37
+38
+69,344
+39
+356,407
+356,407
+79,375
+700,637
+1,111,446
+79,375
+610,299
+1,013,320
+2,247,865
+26,072,160
+2,059,401
+24,645,112
+Gu Shu
+Zhang Wenwu
+1809
+General Manager of Finance
+and Accounting Department
+82,946
+20,646,928
+31
+1,644,147
+1,596,232
+Repurchase agreements
+32
+300,988
+810,610
+Certificates of deposit
+33
+281,380
+18,894,447
+221,489
+Income tax payable
+Debt securities issued
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+Share capital
+Reserves
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+34
+Due to customers
+86
+Other equity instruments
+8,115
+Amortised cost
+fair value through profit or loss
+Financial liabilities designated as at
+Financial liabilities:
+Debt securities issued
+450,166
+receivables)
+449,233
+Amortised cost
+Amortised cost (loans and
+Other assets
+353,601
+FVTPL (designated)
+87,337
+FVTPL (designated)
+FVTPL (held for trading)
+351,802
+FVTPL (designated)
+FVOCI (available for sale)
+148,518
+FVTPL (mandatory)
+3,542,184
+maturity)
+1,443,785
+FVOCI
+3,835,107
+Amortised cost
+277,129
+Amortised cost (receivables)
+Amortised cost (held to
+1,496,453
+Financial investments
+526,940
+89,361
+527,928
+Balance under IAS 39
+Reverse repurchase agreements
+847,341
+(270)
+Balance under IFRS 9
+Remeasurement: provision for expected credit losses
+847,611
+Balance under IAS 39
+Due from banks and other financial institutions
+3,613,872
+3,613,872
+Balance under IAS 39 and balance under IFRS 9
+Carrying amount
+under IFRS 9 as at
+1 January 2018
+Amortised cost
+Reclassification Remeasurement
+Carrying amount
+under IAS 39 as at
+Cash and balances with central banks
+Financial assets measured at amortised cost
+Financial assets
+The following table reconciles the carrying amounts of financial assets and financial liabilities under IAS 39 to the carrying
+amounts under IFRS 9.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+145
+Annual Report 2018
+Note: As at 1 January 2018, the financial liabilities issued by the Group had not been reclassified or re-measured except for the
+financial liabilities listed above.
+88,391
+FVTPL (designated)
+Note 31 December 2017
+410
+FVTPL (mandatory)
+100,975
+Carrying
+amount
+IAS 39
+The following table illustrates the original classification and measurement of financial instruments under IAS 39 and the new
+classification and measurement of financial instruments under IFRS 9 as at 1 January 2018.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+144
+The Group is required to adopt IFRS 9 from 1 January 2018. The Group adjusted the classification and measurement
+of financial instruments that were not derecognised on 1 January 2018 on a retrospective basis in accordance with the
+reconciliations requirements under IFRS 9. The Group did not adjust the comparative figures of consolidated financial
+statements and recognised any transition adjustments against the opening balance of retained earnings or other
+comprehensive income.
+Transition
+IFRS 9 requires extensive new disclosures, in particular about hedge accounting, credit risk and expected credit losses.
+Disclosure
+IFRS 9 does not fundamentally change the requirements relating to measuring and recognising ineffectiveness under IAS 39.
+However, greater flexibility has been introduced to the types of transactions eligible for hedge accounting.
+Hedge accounting
+Classification
+The new impairment model in IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit losses ("ECL")"
+model. Under the expected credit loss model, it is no longer necessary for a loss event to occur before an impairment loss
+is recognised. Instead, an entity is required to recognise and measure either a 12-month expected credit loss or lifetime
+expected credit loss, depending on the asset and the facts and circumstances, which results in an early recognition of credit
+losses.
+The classification and measurement requirements for financial liabilities under IFRS 9 are largely unchanged from IAS 39,
+except that IFRS 9 requires the fair value change of a financial liability designated as at FVTPL that is attributable to changes of
+that financial liability's credit risk to be recognised in other comprehensive income (without reclassification to profit or loss).
+The classification for debt instruments is determined based on the entity's business model for managing the financial
+instruments and the contractual cash flow characteristics of the assets. On initial recognition, the Group may
+irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or
+at FVOCI as at FVTPL. If a debt instrument is classified as financial assets measured at FVOCI, then interest income,
+impairment loss, foreign exchange gains or losses and gains or losses on disposal will be recognised in profit or loss.
+For equity securities, the classification is FVTPL regardless of the entity's business model, except for the equity security
+is not held for trading and the entity irrevocably elects to designate that security as at FVOCI. If an equity security is
+designated as at FVOCI then only dividend income on that security will be recognised in profit or loss. Gains and losses
+on that security will be recognised in other comprehensive income without reclassification to profit or loss.
+IFRS 9 contains three principal classification categories for financial assets: measured at (1) amortised cost, (2) fair value
+through profit or loss ("FVTPL") and (3) fair value through other comprehensive income ("FVOCI"):
+Classification and measurement
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+143
+Annual Report 2018
+IFRS 9 Financial Instruments ("IFRS 9") introduces new requirements for classification and measurement of financial
+instruments, measurement of impairment for financial assets and hedge accounting. IFRS 9 is effective on 1 January 2018.
+The Group adjusted the classification and measurement of financial instruments that were not derecognised on 1 January
+2018 on a retrospective basis in accordance with the reconciliations requirements under IFRS 9. The Group did not adjust
+the comparative figures of consolidated financial statements and recognised any transition adjustments against the opening
+balance of retained earnings or other comprehensive income. Refer to Note 3 summary of significant accounting policies
+for the accounting policies under IFRS 9, and refer to Note 3 summary of significant accounting policies of the Group's
+Financial Statements for the year ended 31 December 2017 for the accounting policies under IAS 39 Financial Instruments:
+Recognition and Measurement ("IAS 39").
+IFRS 9 "Financial instruments"
+The adoption has no material impact on the financial position and the financial result of the Group.
+740,645
+Impairment
+IFRS 9
+Carrying
+amount
+FVOCI
+13,892,966
+13,759,417
+Amortised cost
+Amortised cost (loans and
+receivables)
+195,520
+FVTPL (mandatory)
+986,631
+791,065
+Amortised cost
+Amortised cost (loans and
+receivables)
+89,013
+FVTPL (mandatory)
+847,611
+89,013
+FVTPL
+Loans and advances to customers
+Derivative financial assets
+Reverse repurchase agreements
+847,341
+Amortised cost
+Amortised cost (loans and
+receivables)
+Due from banks and other financial
+institutions
+3,613,872
+3,613,872
+Amortised cost
+Amortised cost (loans and
+receivables)
+Cash and balances with central banks
+Financial assets:
+Classification
+Financial instruments
+986,631
+Less: to FVTPL mandatory (IFRS 9)
+A
+(195,520)
+Balance under IAS 39
+Reverse repurchase agreements
+Balance under IAS 39 and balance under IFRS 9
+Derivative financial assets
+Financial assets measured at FVTPL
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+147
+Annual Report 2018
+449,233
+23,296,035
+(17,763)
+(296,761)
+23,610,559
+Carrying amount
+under IAS 39 as at
+(933)
+17,550
+(97)
+450,166
+(3,286,309)
+(247,760)
+(8,115)
+3,542,184
+Financial assets measured at amortised cost
+Balance under IFRS 9
+Remeasurement: provision for expected credit losses
+Balance under IAS 39
+Other assets
+Balance under IFRS 9
+DB U
+C
+3,835,107
+Note 31 December 2017
+89,013
+Carrying amount
+under IFRS 9 as at
+C
+Add: from held-to-maturity investments (IAS 39)
+Remeasurement: from amortised cost to fair value
+Add: from available-for-sale financial assets (IAS 39)
+Remeasurement: reversal of impairment
+(465)
+Remeasurement: from amortised cost to fair value
+22,050
+C
+Add: from receivables (IAS 39)
+87,337
+Balance under IAS 39
+Financial investments - FVTPL (mandatory)
+Balance under IFRS 9
+Remeasurement: from amortised cost to fair value
+411
+411
+C
+Add: from amortised cost (IAS 39)
+Balance under IAS 39
+Loans and advances to customers
+Balance under IFRS 9
+195,520
+A
+Add: from amortised cost (IAS 39)
+410
+(1)
+195,520
+89,013
+1 January 2018
+Remeasurement
+Reclassification
+mandatory (IFRS 9)
+(86)
+Less: to FVTPL
+Less: to amortised cost (IFRS 9)
+Carrying amount
+under IFRS 9 as at
+1 January 2018
+Remeasurement
+Reclassification
+31 December 2017
+Note
+under IAS 39 as at
+Carrying amount
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+146
+13,759,417
+Balance under IFRS 9
+Financial investments - amortised cost
+(33,193)
+(411)
+C
+(99,945)
+B
+Less: to FVTPL― mandatory (IFRS 9)
+Less: to FVOCI (IFRS 9)
+13,892,966
+Balance under IAS 39
+Loans and advances to customers
+791,065
+Balance under IFRS 9
+(46)
+Remeasurement: provision for expected credit losses
+Remeasurement: provision for expected credit losses
+Balance under IAS 39
+Remeasurement: provision for expected credit losses
+mandatory (IFRS 9)
+Financial investments - held-to-maturity investments
+Balance under IAS 39
+Remeasurement: provision for expected credit losses
+Remeasurement: from fair value to amortised cost
+Balance under IFRS 9
+277,841
+F
+Add: from available-for-sale financial assets (IAS 39)
+(2)
+Remeasurement: provision for expected credit losses
+1,799
+E
+as at FVTPL (IAS 39)
+Add: from financial assets designated
+99
+66
+during previous reclassifications
+value adjustments recognised
+Remeasurement: reversal of the fair
+(843)
+3,286,309
+(22,050)
+(2,600)
+5
+277,129
+Remeasurement: provision for expected credit losses
+D
+Add: from held-to-maturity investments (IAS 39)
+C
+Less: to FVTPL
+B
+Less: to FVOCI (IFRS 9)
+Less: to FVOCI (IFRS 9)
+6,348,656
+3,195
+(2,633,240)
+Purchases of financial investments
+Year ended 31 December 2018
+Consolidated Cash Flow Statement
+139
+Annual Report 2018
+The notes on pages 142 to 298 form part of these financial statements.
+770,864
+724,133
+(In RMB millions, unless otherwise stated)
+(68,499)
+839,363
+791,914
+Net cash flows from operating activities
+Income tax paid
+Net cash flows from operating activities before tax
+1,807,448
+1,136,393
+(67,781)
+26,456
+Notes
+2017
+Dividends paid on ordinary shares
+Acquisition of non-controlling interests
+Repayment of debt securities
+Interest paid on debt securities
+Proceeds from issuance of debt securities
+Capital injection by non-controlling shareholders
+CASH FLOWS FROM FINANCING ACTIVITIES
+2018
+Net cash flows from investing activities
+Proceeds from disposal of associates and joint ventures
+Investments in associates and joint ventures
+Proceeds from sale and redemption of financial investments
+(other than repossessed assets)
+Proceeds from disposal of property and equipment and other assets
+Purchases of property and equipment and other assets
+CASH FLOWS FROM INVESTING ACTIVITIES
+Dividends received
+521,393
+14,211,777
+(237,261)
+Other liabilities
+(1,333,103)
+(1,258,665)
+Loans and advances to customers
+(106,555)
+158,257
+Reverse repurchase agreements
+39,668
+Other assets
+(201,848)
+102,201
+(88,016)
+Due from banks and other financial institutions
+(208,191)
+297,030
+Due from central banks
+Net decrease/(increase) in operating assets:
+Financial investments measured at fair value through profit or loss
+1,525,280
+150,444
+(942,798)
+Due to customers
+55,903
+66,036
+Certificates of deposit
+457,032
+(531,619)
+Repurchase agreements
+4,150
+(89)
+(268,057)
+Due to banks and other financial institutions
+10,923
+(12,329)
+32
+Due to central banks
+Financial liabilities designated as at fair value through profit or loss
+Net (decrease)/increase in operating liabilities:
+(1,501,830)
+70,966
+533,745
+38,295
+3,313,748
+1,045,746
+943,954
+(22,917)
+(15,370)
+(968,222)
+(759,095)
+(194)
+792
+(85,823)
+(4,506)
+(4,437)
+(327)
+(309)
+(35,924)
+81,835
+(43,536)
+(83,506)
+363,441
+125
+(731,745)
+Dividends paid on preference shares
+Dividends paid to non-controlling shareholders
+Net cash flows from financing activities
+NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
+Cash and cash equivalents at beginning of the year
+(60,496)
+(13,096)
+(489,258)
+2,855
+(2,171,838)
+2,153,124
+(799)
+(1,605)
+1,168
+633
+1,732
+1,731
+1,495,633
+1,031,402
+1,520,330
+Effect of exchange rate changes on cash and cash equivalents
+ASSETS
+Cash and balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+21
+Reverse repurchase agreements
+Loans and advances to customers
+31 December 2018 31 December 2017
+Financial investments
+19
+20
+24
+Financial investments measured at fair value through
+profit or loss
+Financial investments measured at fair value through
+other comprehensive income
+Financial investments measured at amortised cost
+222232
+1,189,368
+Notes
+31 December 2018
+32,729
+(32,479)
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+42
+1,509,523
+1,520,330
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+(In RMB millions, unless otherwise stated)
+Interest paid
+891,366
+(351,828)
+(324,813)
+The notes on pages 142 to 298 form part of these financial statements.
+140
+ICBC
+Statement of Financial Position
+973,512
+598,319
+1,780,568
+(229)
+Net trading loss/(gain) on equity investments
+Net gain on disposal of financial investments
+Accreted interest on impaired loans
+Interest expense on debt securities issued
+Unrealised loss on foreign exchange
+Impairment losses on assets
+Amortisation of financial investments
+Amortisation
+Depreciation
+Share of profits of associates and joint ventures
+Adjustments for:
+364,641
+372,413
+Net loss on changes at fair value
+Profit before taxation
+2017
+2018
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2018
+Consolidated Cash Flow Statement
+Foreign currency transactions and advance consideration
+Amendments to IFRS 1, First-time adoption of International Financial
+Investments in associates and joint ventures
+Insurance contracts "Applying IFRS 9 Financial instruments with IFRS 4
+Insurance contracts"
+The principal effects of adopting these amended IFRSS are as follows:
+IFRS 15 "Revenue from contracts with customers"
+Under IFRS 15, revenue is recognised based on a single model that applies to contracts with customers. The model features
+the replacement of the previous "transfer of risk-reward" by the "transfer of control" as the criteria for revenue recognition.
+The standard contains a contract-based five-step analysis of transactions to determine whether, how much and when
+(at a point in time or over time) revenue is recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and
+related interpretations, under which revenue is recognised in accordance with transactions distinguished from sales of
+goods, rendering of services and construction contracts.
+(328)
+CASH FLOWS FROM OPERATING ACTIVITIES
+Net gain on disposal and overage of property and equipment and
+IFRS 15 also introduces extensive qualitative and quantitative disclosure requirements which aim to enable users of the
+financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from
+contracts with customers.
+Dividend income
+11
+2,339
+2,114
+283
+5,194
+14
+161,594
+127,769
+20,009
+10,288
+16,219
+17,958
+(2,659)
+(1,116)
+(2,313)
+8
+151
+(757)
+6,920
+476
+(1,787)
+(1,377)
+9
+other assets (other than repossessed assets)
+(3,189)
+20,315
+23,175
+(3,089)
+(2,950)
+23
+(2) Non-controlling interests
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+154
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses
+(see Note 3(21)).
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding
+who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are
+directed by means of contractual arrangements.
+Financial assets measured at
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to, variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Subsidiaries
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretations and
+amendments.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+All companies that issue insurance contracts may choose to recognise in other comprehensive income, rather than
+profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is
+applied.
+Overlay approach
+Companies whose activities are predominantly connected with insurance may choose to defer the application of IFRS 9
+until 2021 (the effective date of IFRS 17).
+Deferral approach - Temporary exemption from IFRS 9
+Available-for-sale financial assets (IAS 39)/
+1,010
+843
+167
+Financial investments
+23
+The adoption has no material impact on the financial position and the financial result of the Group.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+Measurement of fair value
+An associate is an entity in which the Group or Bank has significant influence.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+(3) Associates and Joint ventures
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see Note 3(21)).
+(4) Foreign currency translation
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+Annual Report 2018
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+155
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken to other comprehensive income. On disposal of a foreign operation, the
+cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in
+profit or loss.
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+(5) Financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(i) Initial recognition of financial instruments
+At initial recognition, financial assets are classified into three categories: financial assets measured at amortised cost,
+financial assets measured at FVOCI and financial assets measured at FVTPL.
+At initial recognition, financial liabilities are classified into two categories: financial liabilities measured at FVTPL and other
+financial liabilities.
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities measured
+at FVTPL, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial
+assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs.
+2
+2
+Loans and advances to customers
+Financial assets measured at
+853
+270
+583
+Due from banks and other financial institutions
+1 January 2018
+IFRS 9 as at
+Impairment
+allowance under
+Remeasurement
+Reclassification
+31 December 2017
+IAS 39/IAS
+37 (i) as at
+Reverse repurchase agreements
+allowance under
+Cash and balances with central banks
+measured at amortised cost (IFRS 9)
+Loans and receivables (IAS 39)/Financial assets
+The following table reconciles the closing impairment allowance under IAS 39 to opening allowance determined in
+accordance with IFRS 9 on the initial application date:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+151
+Annual Report 2018
+Under IAS 39, certain debt securities issued were designated as at FVTPL when the Group held related derivative
+financial instruments. As at 1 January 2018, the Group revoked the previous designation due to the criteria of
+designating for eliminating or significantly reducing an accounting mismatch are no longer met.
+The reclassified and re-measured financial assets amounted to RMB21,519 million are equity investments, which the
+Group did not designate as at FVOCI at the date of initial application.
+Impairment
+46
+(ii) Classification and subsequent measurement of financial assets
+Loans and advances to customers
+Held-to-maturity investments (IAS 39)/
+Financial investments
+Financial assets measured at FVOCI (IFRS 9)
+Held-to-maturity investments (IAS 39)/
+Financial investments
+amortised cost (IFRS 9)
+(IAS 39)/Financial assets measured at
+Financial assets designated as at FVTPL
+471
+(606)
+1,077
+measured at FVOCI (IFRS 9)
+Loans and receivables (IAS 39)/Financial assets
+3,921
+933
+2,988
+Other assets
+147
+(5)
+152
+Financial investments
+46
+372,598
+33,193
+(1,077)
+340,482
+amortised cost (IFRS 9)
+Classification of financial assets
+Equity instruments measured at FVOCI
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+ECLS are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
+shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows
+that the Group expects to receive).
+Measurement of ECLS
+Financial assets measured at fair value, including debt investments or equity securities measured at FVTPL, equity securities
+designated as at FVOCI and derivative financial assets, are not subject to the ECL assessment.
+Loan commitments and financial guarantee contracts.
+Debt instruments measured at FVOCI; and
+Financial assets measured at amortised cost;
+The Group recognises loss allowances for ECL on:
+(6) Impairment of the financial assets
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+Other financial liabilities
+For the financial liabilities designated as at FVTPL, the gains and losses arose are accounted for in accordance with the
+following requirements: (i) the amount of changes in the fair value of the financial liability arising from changes in the
+Group's own credit risk should be included in other comprehensive income; (ii) other changes in fair value of the financial
+liabilities are recognised in current profit or loss. If the treatment of the impact of changes in the financial liabilities' own
+credit risk will create or enlarge the accounting mismatch in profit or loss in accordance with (i), the Group shall recognise
+the entire gain or loss of the financial liabilities (including the amount of the impact of changes in its own credit risk) in profit
+and loss. When these liabilities are derecognised, the cumulative gain or loss previously recognised in other comprehensive
+income is reclassified from equity to retained earnings.
+The Group's method of measuring expected credit losses of financial instruments reflects the following elements: (i) unbiased
+weighted average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money;
+(iii) reasonable and evidence-based information about past events, current conditions, and future economic forecasts that
+are available at no additional cost or effort at the end of the reporting period.
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+The amendments clarify that the fair value of liabilities for cash-settled share-based payments should be measured
+using the same approach as for equity-settled share-based payments ―i.e. using the modified grant date method.
+Classification of share-based payments settled net of tax withholdings
+Measurement of cash-settled share-based payments
+•
+The amendments clarify the accounting for the following classification and measurement issues under IFRS 2:
+Amendments to IFRS 2, Share-based payment "Classification and measurement of share-based payment
+transactions"
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+152
+IAS 37 stands for International Accounting Standard 37 "Provisions, Contingent Liabilities and Contingent Assets".
+(i)
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial liability)
+or it is designated as such on initial recognition.
+158
+ICBC
+The reclassified and re-measured financial assets are equity investments designated irrevocably by the Group as
+financial assets measured at FVOCI at the date of initial application.
+a non-investment entity investor may elect to retain the fair value accounting applied by its investment entity associate
+or joint venture and this election can be made separately for each investment entity associate or joint venture.
+The adoption has no material impact on the financial position and the financial result of the Group.
+a venture capital organisation, or other qualifying entity, may elect to measure its investments in an associate or joint
+ventures at fair value through profit or loss on an investment-by-investment basis; and
+•
+The amendments to IAS 28 clarify that:
+The amendments to IFRS 1 delete the short-term exemptions for first-time adopters that are already out-of-date.
+Amendments to IFRS 1, First-time adoption of
+International Financial Reporting Standards and Amendments to IAS 28, Investments in associates and
+joint ventures
+Annual Improvements to IFRSS 2014-2016 Cycle
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+153
+Annual Report 2018
+The adoption has no material impact on the financial position and the financial result of the Group.
+The Interpretation clarifies that "the date of the transaction" for the purpose of determining the exchange rate to use on
+initial application of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the
+non-monetary asset or liability arising from the payment or receipt of advance consideration. If there are multiple payments
+or receipts in advance of recognising the related item, the entity should determine the date of the transaction for each
+payment or receipt.
+The Interpretation provides guidance on how to determine "the date of the transaction" when applying IAS 21. The effects
+of changes in foreign exchange rates to situations where an entity receives or pays advance consideration in a foreign
+currency and recognises a non-monetary asset or liability.
+IFRIC 22, "Foreign currency transactions and advance consideration"
+The adoption has no material impact on the financial position and the financial result of the Group.
+The amendments also re-characterise the list of evidence provided in the standard as a non-exhaustive list of examples i.e.
+other forms of evidence may support a transfer.
+The amendments provide guidance on deciding when there is a change in use to transfer a property to or from investment
+property. The amendments clarify that a change in use occurs when the property meets or ceases to meet the definition of
+investment property and there is evidence of the change in use.
+Amendments to IAS 40, Investment property "Transfers of investment property"
+The adoption has no material impact on the financial position and the financial result of the Group.
+Any difference between the carrying amount of the liability derecognised and the amount recognised in equity at the
+modification date is recognised in profit or loss immediately.
+The amendments clarify that on such a modification the liability for the original cash-settled share-based payment is
+derecognised and the equity-settled share-based payment is measured at its fair value and recognised to the extent
+that the goods or services have been received up to that date.
+Accounting for a modification of a share-based payment from cash-settled to equity-settled
+The amendments introduce an exception so that a share-based payment transaction with net settlement feature
+for withholding an amount to cover the employee's tax obligations is classified as equity-settled in its entirety when
+certain conditions are met, even though the entity is then required to transfer cash (or other assets) to the tax
+authority to settle the employee's tax obligation.
+30,907
+413,175
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+FVOCI, or at FVTPL.
+68,554
+345,824
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised
+in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are
+reclassified to profit or loss.
+Debt instruments measured at FVOCI
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, through the amortisation process or in order to recognise impairment gains or losses.
+Financial assets measured at amortised cost
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Financial assets measured at FVTPL
+amortised cost (IFRS 9)
+Subsequent measurement of financial assets
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets or both. The Group determines the business model for managing the financial assets according to the facts and based
+on the specific business objective for managing the financial assets determined by the Group's key management personnel.
+In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
+contractual terms of the instrument. For the purposes of this assessment, 'principal' is defined as the fair value of the
+financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk
+associated with the principal amount outstanding during a particular period of time and for other basic lending risks and
+costs, as well as a profit margin. The Group also assesses whether the financial asset contains a contractual term that could
+change the timing or amount of contractual cash flows such that it would not meet this condition.
+All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis.
+Annual Report 2018
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+-
+-
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+ICBC
+156
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+157
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Total
+30,807
+100
+Credit commitments
+financial guarantee contracts
+Loan commitments and
+(724)
+724
+Financial investments
+Financial assets measured at FVTPL (IFRS 9)
+Available-for-sale financial assets (IAS 39)/
+3,100
+2,951
+(479)
+628
+Financial investments
+Financial assets measured at FVOCI (IFRS 9)
+Available-for-sale financial assets (IAS 39)/
+97
+97
+Financial investments
+Financial liabilities measured at FVTPL
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+(iii) Classification and subsequent measurement of financial liabilities
+These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net
+gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other
+comprehensive income are reclassified to retained earnings.
+(1,203)
+Certain debt instruments originally classified as available-for-sale financial assets were held within a business model
+whose objective at the date of initial application was to collect contractual cash flows. In addition, their contractual
+cash flows were identified as solely payments of principal and interest on the principal outstanding. Therefore, these
+assets were classified as financial assets measured at amortised cost under IFRS 9. The fair value of these instruments
+as at 31 December 2018 was RMB293,092 million. Assuming that these financial assets were not reclassified upon
+transition to IFRS 9, the gain arising from changes in their fair value during the year that would have been recognised
+in other comprehensive income was RMB13,004 million.
+Amendments to IFRS 4, Insurance contracts "Applying IFRS 9 Financial instruments with IFRS 4 Insurance
+contracts"
+A.
+1,438,094
+Financial investments - FVOCI (equity instruments)
+Balance under IAS 39
+Add: from available-for-sale financial assets
+(IAS 39)
+designated
+Remeasurement: reversal of impairment
+allowance under IAS 39
+Remeasurement: fair value remeasurement
+Balance under IFRS 9
+Financial investments - available-for-sale
+financial assets (IAS 39)
+Balance under IAS 39
+Less: to amortised cost (IFRS 9)
+Less: to FVOCI (IFRS 9) - debt instruments
+Less: to FVOCI (IFRS 9) - equity instruments
+Less: to FVTPL mandatory (IFRS 9)
+Balance under IFRS 9
+Financial assets measured at FVOCI
+G
+1,774
+FDGF
+C, H
+1,496,453
+(277,841)
+(1,185,275)
+(1,774)
+(31,563)
+479
+3,438
+5,691
+Balance under IFRS 9
+1,496,453
+(19)
+2,600
+Carrying amount
+Loans and advances to customers
+Balance under IAS 39
+Add: from amortised cost (IAS 39)
+Remeasurement: reversal of impairment
+allowance under IAS 39
+Remeasurement: from amortised cost to fair value
+Balance under IFRS 9
+under IAS 39 as at
+Note 31 December 2017
+B
+Reclassification
+Remeasurement
+Carrying amount
+under IFRS 9 as at
+1 January 2018
+99,945
+1,077
+(47)
+100,975
+Financial investments - FVOCI (debt instruments)
+Balance under IAS 39
+Add: from held-to-maturity investments (IAS 39)
+B
+247,760
+Remeasurement: from amortised cost to fair value
+2,329
+Add: from available-for-sale financial assets (IAS 39)
+Remeasurement: reversal of impairment
+D
+1,185,275
+allowance under IAS 39
+149
+Add: from receivables (IAS 39)
+B
+Remeasurement: from amortised cost to fair value
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+40,901
+1,544,760
+89,361
+Less: to amortised cost (IFRS 9)
+(970)
+Balance under IFRS 9
+Financial liabilities measured at FVTPL
+89,361
+(970)
+88,391
+88,391
+Note: As at 1 January 2018, the financial liabilities issued by the Group had not been reclassified or re-measured except for the
+financial liabilities listed above.
+The application of IFRS 9 resulted in the reclassifications set out in the table above and explained below.
+B.
+C.
+D.
+Certain reverse repurchase agreements held by the Group were held within a business model whose objective at the
+date of initial application was neither collecting contractual cash flows, nor both collecting contractual cash flows and
+selling financial assets. Therefore, these assets were classified as financial assets measured at FVTPL under IFRS 9.
+Certain loans and advances to customers held by the Group, and certain debt instruments originally classified as
+receivables or held-to-maturity investments were held within a business model in which objective at the date of initial
+application was both collecting contractual cash flows and selling financial assets. In addition, their contractual cash
+flows were identified as solely payments of principal and interest on the principal amount outstanding. Therefore,
+these assets were classified as financial assets measured at FVOCI under IFRS 9.
+Certain loans and advances to customers held by the Group, and certain debt instruments originally classified as
+receivables, held-to-maturity investments or available-for-sale financial assets, their contractual cash flows were not
+identified as solely payments of principal and interest on the principal outstanding. Therefore, these assets were
+classified as financial assets measured at FVTPL under IFRS 9.
+In addition to the above, the following debt instruments have been reclassified to new categories under IFRS 9, as their
+previous categories were no longer used, with no changes to their measurement basis:
+(i)
+Those previously classified as available-for-sale financial assets and now classified as measured at FVOCI; and
+(ii) Those previously classified as held-to-maturity investments and now classified as measured at amortised cost.
+150
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+E.
+F.
+G.
+H.
+I.
+Under IAS 39, certain debt instruments held by the Group were designated as at FVTPL, which no longer met the
+criteria under IFRS 9 for designation as at FVTPL. Therefore, the Group revoked its previous designation of these
+financial assets, reassessed their business model and contractual cash flows and classified them as measured at
+amortised cost. The effective interest rate of these debt instruments was 0.75% to 4.38%, and interest income
+recognised during the year amounted to RMB33 million. The fair value of these debt instruments as at 31 December
+2018 was RMB1,805 million. Assuming that these debt instruments were not reclassified upon transition to IFRS 9, the
+gain arising from changes in their fair value during the year that would have been recognised in the profit or loss was
+RMB6 million.
+Balance under IAS 39
+7,406
+Financial liabilities designated as at FVTPL
+527,928
+Annual Report 2018
+149
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Financial liabilities
+Financial liabilities measured
+at amortised cost
+Debt securities issued
+Balance under IAS 39
+Add: from financial liabilities designated as
+at FVTPL (IAS 39)
+Remeasurement: from fair value to
+amortised cost
+Balance under IFRS 9
+Financial liabilities measured
+Carrying amount
+under IAS 39 as at
+Carrying amount
+under IFRS 9 as at
+Note 31 December 2017
+Reclassification
+Remeasurement
+1 January 2018
+526,940
+970
+18
+527,928
+at amortised cost
+526,940
+970
+18
+Financial liabilities measured at FVTPL
+Notes to the Financial Statements
+Financial assets measured at FVOCI
+The amendments address concerns arising from the different effective dates of IFRS 9 and the new insurance contracts
+standard, IFRS 17. The amendments introduce the following two approaches:
+165
+160
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+(9) Convertible instruments
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+Financial liabilities
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+Sales of assets on condition of repurchase
+ICBC
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets
+are set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets
+are not derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation
+of financial assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent
+of its continuing involvement, derecognise the remaining. The carrying amount of the transferred assets is apportioned
+between the derecognised portion and the retained portion based on their respective relative fair values, and the difference
+between the carrying amount of the derecognised portion and the total consideration paid for the derecognised portion is
+recorded in profit or loss.
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset.
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+the Group's contractual rights to the cash flows from the financial asset expire;
+-
+Financial asset is derecognised when one of the following conditions is met:
+(8) Derecognition of financial assets and liabilities
+Financial assets
+Securitisation
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+At the inception of a hedge relationship, the Group formally designates the hedge instruments and the hedged items,
+and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash flows
+and are assessed on an ongoing basis to analyse the sources of hedge ineffectiveness which are expected to affect the hedge
+relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness requirement
+relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains the same,
+the Group would rebalance the hedging relationship.
+Hedge accounting
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+161
+Annual Report 2018
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+(11) Derivatives and hedge accounting
+Derivatives
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instruments' duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redemption price is charged to equity.
+Preference shares and perpetual bonds issued containing both equity and liability components are accounted for using the
+accounting policy for convertible instruments containing an equity component. Preference shares and perpetual bonds issued
+not containing an equity component are accounted for using the accounting policy for other convertible instruments not
+containing an equity component.
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after
+considering the definition of financial assets, financial liabilities and equity instruments.
+(10) Preference shares and perpetual bonds
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at FVTPL. The equity component is not re-measured.
+If the main contract included in the hybrid contract is an asset within the scope of a new financial instrument standard, the
+embedded derivative is no longer split from the main contract of the financial asset, but the hybrid financial instrument as
+a whole is related to the classification of the financial asset provision. If the main contract included in the hybrid contract is
+not an asset within the scope of the new financial instrument standard, when their economic characteristics and risks are not
+closely related to those of the hybrid contract, those separate instruments with the same terms as the embedded derivative
+would meet the definition of a derivative, and the hybrid instrument is not carried at FVTPL, certain derivatives embedded
+in other financial instruments should be split from the hybrid contract and treated as separate derivatives. These embedded
+derivatives are measured at fair value with the changes in fair value recognised in profit or loss.
+Fair value hedges
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+Post-employment benefits-defined contribution plans
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organisations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Termination benefits
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+When the Group can no longer withdraw an offer of those benefits;
+Short-term employee benefits
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when they are incurred.
+Annual Report 2018
+167
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(24) Fiduciary activities
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+Early retirement benefits
+ICBC
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+159
+Annual Report 2018
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the terms
+are substantially different, the Group derecognises the original financial asset and recognises a 'new' asset under the revised
+terms. If the renegotiation or modification does not result in derecognition, but lead to changes in contractual cash flows, the
+Group assesses whether a significant increase in credit risk has occurred, based on comparing the risk of a default occurring
+under the revised terms as at the end of the reporting period with that as at the date of initial recognition under original terms.
+(7) Modification of loan contracts
+Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss
+in the period in which the recovery occurs.
+The book value of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect
+of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines that the
+debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to
+the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply
+with the Group's procedures for recovery of amounts due.
+Write-off
+ECLs are remeasured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises an impairment gain or loss for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through a loss allowance account; for debt instruments that are measured at FVOCI, the loss
+allowance is recognised in other comprehensive income. The Group recognises loss allowances for loan commitments and
+financial guarantee contracts through other liabilities (allowance for impairment losses on credit commitments).
+(23) Employee benefits
+Presentation of allowance for ECL
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount equal to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a)
+credit risk for the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 1: A financial instrument of which the credit risk has not significantly increase since initial recognition. The amount
+equal to 12-month expected credit losses is recognised as loss allowance.
+The Group classifies financial instruments into three stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+The three risk stages are defined as follows:
+Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
+12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the end
+of the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+The maximum period considered when estimating ECLs is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Notes to the Financial Statements
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount equal
+to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a) credit risk for the definition of credit-
+impaired financial assets.
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVOCI. For fair value hedges, the carrying amount of the hedged item is
+adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the gains
+and losses from both are taken to profit or loss or other comprehensive income.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria after
+taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has been
+sold, terminated or exercised. If the hedged items are derecognised, the unamortised fair value is recorded in profit or loss.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+(19) Business combination and goodwill
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+(18) Repossessed assets
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+(17) Land use rights
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+ICBC
+164
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels.
+The residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from
+15 to 25 years.
+Over the shorter of the economic useful
+lives and remaining lease terms
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(20) Provisions
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+14.29%-50%
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+(22) Cash and cash equivalents
+Cash and cash equivalents refer to short-term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+166
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUs) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+(21) Asset impairment
+2-7 years
+1.94%-20%
+depreciation rate
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+(13) Presentation of financial instruments
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+According to the policy of classification of financial assets (refer to Note 3(5)), the reverse repurchase agreements held by
+the Group were divided into different classification according to the entity's business model for managing the financial
+instruments and the contractual cash flow characteristics of the assets: financial assets measured at amortised cost and
+financial assets measured at FVTPL.
+(12) Trade date accounting
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Net investment hedges
+ICBC
+162
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gain or
+loss existing in other comprehensive income at that time remains in other comprehensive income until the hedged forecast
+transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
+was reported in other comprehensive income is immediately transferred to profit or loss.
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+Cash flow hedges
+Net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gain or
+loss on the disposal.
+Annual Report 2018
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Annual Report 2018
+value rate
+0%-3%
+Annual
+Estimated residual
+Estimated
+useful life
+5-50 years
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+Properties and buildings
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+(16) Property and equipment
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+(15) Precious metals
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+163
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+Notes to the Financial Statements
+Insurance contracts classification
+(25) Insurance contracts
+ICBC
+168
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+(iii) Related income can be reliably measured.
+The related economic benefits are likely to flow to the Group;
+(ii)
+The insurance contract is issued, and related insurance risk is undertaken by the Group;
+Insurance contract liabilities
+Insurance premium income is recognised when:
+Insurance income recognition
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+(ii)
+(i)
+(i)
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. The contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+162
+Dividend income from listed investments
+166
+1
+228
+held at the year end
+derecognised during the year
+Gain/(loss) on financial assets measured at FVTPL, net
+Dividend income from unlisted investments
+292
+Gain on available-for-sale financial assets, net
+Including:
+Loss on financial assets and liabilities designated as at FVTPL
+(1,824)
+(476)
+Gain on disposal of financial assets measured at FVOCI, net
+635
+Dividend income from equity investments designated as at FVOCI, including:
+2,313
+Others
+189
+(476)
+2017
+5,753
+9. NET GAIN ON FINANCIAL INVESTMENTS
+NET TRADING INCOME
+Debt securities
+Equity investments
+Derivatives and others
+2018
+2017
+4,087
+3,758
+(151)
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+757
+(1,090)
+1,238
+2,846
+1,345
+The above amounts mainly include gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities held for trading.
+Annual Report 2018
+177
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+2018
+2,165
+171
+2018
+has significant influence over the Group; or
+(ii)
+has control or joint control over the Group;
+(i)
+the party is a person or a close member of that person's family and that person:
+(a)
+A party is considered to be related to the Group if:
+(29) Related parties
+Rental payments applicable to operating leases are charged to profit or loss on the straight-line basis over the lease terms.
+When the Group is the lessor under operating leases, the assets subject to operating leases are accounted for as the Group's
+assets. Rental income is recognised as "other operating income, net" in the statement of profit or loss on the straight-line
+basis over the lease term.
+Operating leases
+When the Group is a lessor under finance leases, an amount representing the minimum lease payment receivables and initial
+direct costs is included in the statement of financial position as loans and advances to customers. Any unguaranteed residual
+value is also recognised at the inception of the lease. The difference between the sum of the minimum lease payment
+receivables, initial direct costs, the unguaranteed residual value and their present value is recognised as unearned finance
+income. Unearned finance income is recognised over the period of the lease using the effective interest rate method.
+Finance leases
+Leases which transfer substantially all the risks and rewards of ownership of the assets to the lessees are classified as
+finance leases. Leases where substantially all the rewards and risks of the assets remain with the lessor are accounted for as
+operating leases.
+(28) Leases
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+170
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+or
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+(b)
+2017
+Net premium income
+33,420
+38,093
+Notes to the Financial Statements
+8.
+Annual Report 2018
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+(vii)
+10. OTHER OPERATING INCOME, NET
+the entity is controlled or jointly controlled by a person identified in (a);
+(v)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+the entity and the Group are joint ventures of the same third party;
+(iii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(ii)
+the entity and the Group are members of the same group;
+(i)
+the party is an entity where any of the following conditions applies:
+(vi)
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB15,835 million (2017: RMB19,937 million)
+with respect to trust and other fiduciary activities.
+162,347
+145,301
+The Group acts as manager to a number of investment funds, wealth management products, asset management plans, trust
+plans and assets-backed securities. When assessing whether controls such a structured entity, the Group would determine
+whether it exercises the decision-making rights as a principal or an agent and usually focuses on the assessment of the
+aggregate economic interests of the Group in the entity (comprising any carried interests and expected management fees)
+and the decision-making authority of the entity. The Group would also determine whether another entity with decision-
+making rights is acting as an agent for it.
+For further disclosure in respect of unconsolidated investment funds, wealth management products, asset management
+plans, trust plans and assets-backed securities in which the Group has an interest or for which it is a sponsor, see Note 41.
+Annual Report 2018
+173
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+5.
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING
+STANDARDS
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IFRS 16
+IFRIC 23
+IFRS 9 Amendments
+IAS 28 Amendments
+(30) Financial guarantee contracts
+Leases'
+Uncertainty over income tax treatments?
+Prepayment features with negative compensation and modifications of financial liabilities
+Long-term interests in associates and joint ventures²
+Annual Improvements to IFRSS 2015-2017 Cycle²
+IAS 19 Amendments
+IFRS 3 Amendments
+Investment funds, wealth management products, asset management plans, trust plans and asset-backed
+securities
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+Securitisation vehicles
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls securitisation vehicles, investment funds, wealth management products, asset management plans, trust plans or
+asset-backed securities.
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments (refer to Note 3(6)) and the amount initially recognised less the cumulative amount of income. Any increase in
+the liability relating to a financial guarantee is taken to the statement of profit or loss.
+(31) Contingent liabilities
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+4.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period
+that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
+next financial period are described below. Refer to Note 4 significant accounting judgements and estimates of the Group's
+Financial Statements for the year ended 31 December 2017 for the significant accounting judgements and estimates under
+IAS 39.
+Measurement of the expected credit loss allowance
+IAS 1 and IAS 8 Amendments
+The measurement of the expected credit loss allowance for financial assets measured at amortised cost and FVOCI and with
+exposure arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex
+models and significant assumptions about future economic conditions and credit behavior (the likelihood of customers
+defaulting and the resulting losses). Refer to Note 51(a) credit risk for the explanation of the inputs, assumptions and
+estimation techniques used in measuring ECL.
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUs to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+172
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Income tax
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+Fair value of financial instruments
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+Determination of control over investees
+Impairment of goodwill
+139,625
+IFRS 17
+1
+14,582
+18,984
+Guarantee and commitment business
+8,861
+6,818
+Asset custody business (i)
+Trust and agency services (i)
+Others
+Fee and commission income
+7,045
+6,731
+1,959
+1,805
+2,798
+2,781
+158,666
+Fee and commission expense
+Net fee and commission income
+(i)
+(17,046)
+(19,041)
+Corporate wealth management services (i)
+23,189
+24,002
+Investment banking business
+Plan Amendment, Curtailment or Settlement
+Clarifying what is a business³
+Definition of Material³
+Insurance contracts
+Sale or contribution of assets between an investor and its associate or joint venture
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted only for companies that also
+apply IFRS 15.
+2
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted.
+3
+Effective for annual periods beginning on or after 1 January 2020, early adoption is permitted.
+7.
+IFRS 10 and IAS 28 Amendments
+NET FEE AND COMMISSION INCOME
+2017
+Bank card business
+43,719
+38,692
+Settlement, clearing business and cash management
+31,785
+26,820
+Personal wealth management and private banking services (i)
+27,596
+32,846
+2018
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+Amendments to IFRS 9, Financial instruments "Prepayment features with negative
+compensation and modifications of financial liabilities"
+(i)
+217,860
+369,740
+407,779
+572,688
+640,031
+Personal loans
+Corporate loans and advances
+Loans and advances to customers
+Interest income on:
+2017
+2018
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+6. NET INTEREST INCOME
+176
+ICBC
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+The amendments introduce new requirements on loss of control over assets in a transaction with an associate or joint
+venture. These requirements require the full gain to be recognised when the assets transferred meet the definition of a
+"business" under IFRS 3, Business combination.
+Amendments to IFRS 10, Consolidated Financial Statements, and IAS 28, Investment in
+associates and joint ventures, "Sale or contribution of assets between an investor and its
+associate or joint venture"
+The Group is currently assessing the impact of the standard on its financial position and financial performance.
+IFRS 17 is issued to resolve the comparison problems created by IFRS 4 by setting out a single principle-based standard for
+the recognition, measurement, presentation and disclosure of insurance contracts in the financial statements of the issuers
+of those contracts.
+IFRS 17, "Insurance contracts"
+186,089
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+Discounted bills
+16,859
+12,438
+194,203
+186,194
+(i)
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+(ii) The principal auditor's remuneration of RMB216 million for the year (2017: RMB205 million) is included in other
+administrative expenses.
+178
+ICBC
+Due to customers
+Interest expense on:
+861,594
+948,094
+48,335
+49,246
+Due from central banks
+55,390
+58,660
+Due from banks and other financial institutions
+185,181
+200,157
+Financial investments
+14,392
+The amendments clarify the definition of material and how it should be applied by including in the definition guidance that
+until now has featured elsewhere in IFRS Standards. In addition, the explanations accompanying the definition have been
+improved and the amendments ensure that the definition of material is consistent across all IFRS Standards.
+Amendments to IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies,
+Changes in Accounting Estimates and Errors, "Definition of Material"
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+5
+Effective for annual periods is to be determined, early adoption is permitted.
+174
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Further information about those changes that are expected to affect the Group is as follows:
+IFRS 16, "Leases"
+In January 2016, the IASB issued IFRS 16, "Leases", which replaces the current guidance in IAS 17. The new standard
+requires the companies to bring leases on-balance sheet for lessees. The new standard also makes changes in accounting
+over the life of the lease, and introduces a stark dividing line between leases and service contracts.
+Under IFRS 16 there is no longer a distinction between finance leases and operating leases so far as lessees are concerned.
+Instead, subject to practical expedients, a lessee recognises all leases on-balance sheet by recognising a right-of-use (ROU)
+asset and lease liability.
+Lessor accounting is substantially unchanged - i.e. lessors continue to classify leases as finance and operating leases.
+However, there are a number of changes in the details of lessor accounting. For example, lessors apply the new definition of
+a lease, sale-and-leaseback guidance, sub-lease guidance and disclosure requirements.
+The Group plans to apply IFRS 16 initially on 1 January 2019, using the modified retrospective approach. Therefore, the
+cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of retained earnings at
+1 January 2019, with no restatement of comparative information. The standard is expected to have no material impact on
+financial position and financial performance.
+IFRIC 23, "Uncertainty over income tax treatments"
+This Interpretation provides guidance on how to apply IAS 12, Income taxes when there is uncertainty over whether a tax
+treatment will be accepted by the tax authority.
+Under the Interpretation, the key test is whether it is probable that the tax authority will accept the entity's tax treatment.
+•
+If it is probable, then the entity should measure current and deferred tax consistently with the tax treatment in its tax
+return.
+If it is not probable, then the entity should reflect the effect of uncertainty in its accounting for income tax by using
+the "expected value" approach or the "the most likely amount" approach whichever better predicts the resolution
+-
+of the uncertainty and in that case the tax amounts in the financial statements will not be the same as the amounts in
+the tax return.
+The interpretation is expected to have no material impact on financial position and financial performance.
+Effective for annual periods beginning on or after 1 January 2021, early adoption is permitted only for companies that also
+apply IFRS 9 and IFRS 15.
+4
+•
+•
+The IASB has issued amendments to IFRS 3 that seek to clarify the definition of business. The amendments include an
+election to use a concentration test. If a preparer chooses not to apply the concentration test, or the test is failed, then the
+assessment focuses on the existence of a substantive process. The effect of these changes is that the new definition of a
+business is narrower, which could result in fewer business combinations being recognised. The amendments may require a
+complex assessment to decide whether a transaction is a business combination or an asset acquisition.
+Amendments to IFRS 3, Business Combinations "Clarifying what is a business"
+The amendments are expected to have no material impact on the financial position and the financial result of the Group.
+the effect of the asset ceiling cost is disregarded when calculating the gain or loss on any settlement of the plan and is
+dealt with separately in other comprehensive income.
+on amendment, curtailment or settlement of a defined benefit plan, a company should use updated actuarial
+assumptions to determine its current service cost and net interest for the period; and
+•
+The amendments to IAS 19 clarify that:
+Amendments to IAS 19, Employee Benefits "Plan Amendment, Curtailment or Settlement"
+The annual improvements are expected to have no material impact on financial position and financial performance.
+The 2015-2017 cycle of annual improvements contain amendments to four standards including IFRS 3 Business
+combinations, IFRS 11 Joint arrangements, IAS 12 Income taxes and IAS 23 Borrowing costs.
+12,627
+Annual Improvements to IFRS Standards 2015-2017 Cycle
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+175
+Annual Report 2018
+The amendments are expected to have no material impact on financial position and financial performance.
+The IASB has clarified that IFRS 9 applies to long-term interests that, in substance, form part of the entity's net investment in
+an associate or joint venture. In applying IFRS 9, the entity does not take account of any adjustments to the carrying amount
+of long-term interests that arise from applying IAS 28.
+Amendments to IAS 28, Investment in associates and joint ventures "Long-term interests in
+associates and joint ventures"
+The amendments are expected to have no material impact on financial position and financial performance.
+For the companies that have modified or exchanged fixed rate financial liabilities that do not result in derecognition,
+they were required to recalculate the amortised cost of the modified financial liability by discounting the modified
+contractual cash flows using the original EIR; and recognise any adjustment in profit or loss.
+Financial assets containing prepayment features with negative compensation can now be measured at amortised cost
+or at fair value through other comprehensive income (FVOCI) if they meet the other relevant requirements of IFRS 9.
+(In RMB millions, unless otherwise stated)
+(ii)
+Others
+7,781
+(i) The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled
+in exchange for transferring promised services to customers, and income is recognised when its performance obligation in
+contracts is satisfied.
+Fee and commission income
+Financial assets that are not purchased or originated credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets improve their qualities so that they are
+no longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after
+the application of the above-mentioned rules, then the interest income is calculated by applying the effective interest
+rate to their book value.
+For purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial
+recognition, by applying the credit adjusted effective interest rate to their amortised cost; and
+(i)
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument, where appropriate, to the
+book value of the financial asset, or the amortised cost of financial liability. The calculation takes into account all contractual
+terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are
+directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit losses.
+Interest income is calculated by applying the effective interest rate to the book value of financial assets and is included in
+interest income, except for:
+Interest income
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+(26) Revenue recognition
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+The above interest income and expense are related to financial instruments which are not measured at FVTPL.
+Net interest income
+522,078
+572,518
+(339,516)
+(375,576)
+(20,142)
+The IASB has changed IFRS 9's requirements in two areas of financial instruments accounting.
+(30,373)
+(ii)
+-
+The customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+The customer controls the service provided by the Group in the course of performance; or
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+(ii)
+(i) Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred income tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Current tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+(58,418)
+(27) Income tax
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+169
+Annual Report 2018
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+Net trading income
+Dividend income is recognised when the Group's right to receive payment is established.
+Dividend income
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+The Group does not provide service with an alternative use to the Group, and the Group has an enforceable
+right to payment for performance completed to date.
+(In RMB millions, unless otherwise stated)
+(64,991)
+(260,956)
+(280,212)
+Premises and equipment expenses:
+Depreciation
+13,407
+13,873
+Lease payments under operating leases in respect of land and buildings
+Repairs and maintenance charges
+7,543
+7,384
+3,903
+4,000
+Utility expenses
+2,235
+2,305
+27,088
+27,562
+Amortisation
+2,339
+2,114
+Other administrative expenses (ii)
+Taxes and surcharges
+23,294
+21,661
+114,954
+7,465
+121,074
+16,952
+Debt securities issued
+Due to banks and other financial institutions
+(38,525)
+Net gain on disposal of property and equipment, repossessed assets and others
+Others
+1,936
+1,484
+(473)
+4,981
+3,111
+6,033
+14,393
+(31,772)
+Staff costs:
+2018
+2017
+Salaries and bonuses
+Staff benefits
+Post-employment benefits defined contribution plans (i)
+76,985
+74,919
+27,137
+25,642
+11. OPERATING EXPENSES
+Operating cost of insurance business
+At 31 December 2018
+Due from
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+50
+1,582
+458
+2,040
+371
+1,142
+527
+50
+308
+437
+445
+470
+470
+812
+812
+146
+300
+275
+-
+རྒྱུུསྐྱ་་་་''ཊྛབྦཀྑུཥྞ༈༙ ཨྰཿ ༞ ༞ པུཾ 'ཆ
+Former Non-executive Director
+Wang Xiaoya (vi)
+891
+149
+430
+312
+Former Chairman of the Board of Supervisors
+Qian Wenhui (v)
+275
+50
+50
+308
+300
+437
+445
+470
+470
+385
+Ge Rongrong (vi)
+281
+811
+Shen Si (iv)
+Sheila Colleen Bair (iii)
+Yang Siu Shun
+445
+Independent Non-executive Director
+Anthony Francis Neoh
+470
+Zhang Wei
+Independent Non-executive Director
+470
+Independent Non-executive Director
+Or Ching Fai
+Non-executive Director
+Ye Donghai (ii)
+Non-executive Director
+Dong Shi (i)
+Hong Yongmiao
+Hui Ping
+Huang Li
+Qu Qiang
+146
+384
+281
+891
+891
+149
+430
+312
+300
+30
+སྦྲུgg, ཙྪ༔ཝིངྒིབྦེབྦེ,,,,,,,,
+437
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+External Supervisor
+External Supervisor
+Employee Representative Supervisor
+Shen Bingxi
+811
+Former Non-executive Director
+Fu Zhongjun (vii)
+Former Non-executive Director
+1,473
+75,134
+67,333
+611
+15,865
+26,350
+2017
+RMB'000
+2018
+RMB'000
+69
+Others
+Discretionary bonuses
+Salaries and allowances
+Group
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 12 and 49(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+13. FIVE HIGHEST PAID INDIVIDUALS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Defined contribution plans
+94,294
+92,541
+The number of these individuals whose emoluments fell within the following bands is set out below:
+Loans and advances to customers
+14. IMPAIRMENT LOSSES ON ASSETS
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2017: Nil).
+5
+1
+5
+1
+1
+1
+1
+2
+1
+1
+1
+RMB12,000,001 Yuan to RMB12,500,000 Yuan
+RMB13,500,001 Yuan to RMB14,000,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB15,000,001 Yuan to RMB15,500,000 Yuan
+RMB15,500,001 Yuan to RMB16,000,000 Yuan
+RMB23,000,001 Yuan to RMB23,500,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+RMB25,500,001 Yuan to RMB26,000,000 Yuan
+RMB26,500,001 Yuan to RMB27,000,000 Yuan
+2017
+2018
+Number of employees
+ICBC
+182
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2017: Nil).
+During the year, there was no arrangement under which a Director or a Supervisor waived or agreed to waive any
+remuneration (2017: Nil).
+(i)
+As at the approval date of 2017 financial statements, changes of directors and supervisors of the Bank are as follows:
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+The remuneration before tax payable to Directors and Supervisors for 2017 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2017 Annual Report.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+8,793
+458
+9,251
+1,110
+3,201
+2,025
+2,915
+110
+110
+110
+Former Independent Non-executive Director
+Kenneth Patrick Chung (viii)
+(ii)
+Non-executive Director
+At the Annual General Meeting for the Year 2016 held on 27 June 2017, Ms. Mei Yingchun and Mr. Dong Shi were
+appointed as Non-executive Director of the Bank, and their qualifications were approved by the former China Banking
+Regulatory Commission (the "former CBRC") in August 2017.
+Annual Report 2018
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+(viii) In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent
+Non-executive Director of the Bank.
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank.
+In June 2017, Ms. Wang Xiaoya and Ms. Ge Rongrong ceased to act as Non-executive Directors of the Bank due to
+work adjustment.
+In January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+At the Annual General Meeting for the Year 2015 held on 24 June 2016, Mr. Shen Si was appointed as Independent
+Non-executive Director of the Bank, and his qualification was approved by the former CBRC in March 2017.
+March 2017.
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Ms. Sheila Colleen Bair was appointed
+as Independent Non-executive Director of the Bank, and her qualification was approved by the former CBRC in
+(vii)
+(vi)
+(v)
+(iv)
+(iii)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+181
+At the Annual General Meeting for the Year 2016 held on 27 June 2017, Mr. Ye Donghai was appointed as
+Non-executive Director of the Bank, and his qualification was approved by the former CBRC in October 2017.
+Mei Yingchun (i)
+Non-executive Director
+Fei Zhoulin
+61
+246
+Former Executive Director, Vice President
+Zhang Hongli (viii)
+12
+46
+Former Chairman of the Board of Supervisors
+Wang Jingdong (ix)
+Qian Wenhui (vii)
+546
+Executive Director
+Former Chairman of the Board of Directors,
+Yi Huiman (vi)
+External Supervisor
+Shen Bingxi
+250
+127
+Fei Zhoulin (x)
+Or Ching Fai (xi)
+Former Executive Director, Vice President
+Former Non-executive Director
+328
+Annual Report 2018
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's and the Bank's 2018 financial statements. The total compensation packages will be further
+disclosed when determined by the relevant authorities.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+6,100
+2,895
+392
+392
+613
+2,592
+Total
+Former Independent Non-executive Director
+411
+307
+58
+673
+83
+250
+External Supervisor
+Qu Qiang (v)
+50
+470
+470
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Non-executive Director
+Sheila Colleen Bair
+Shen Si
+Anthony Francis Neoh
+Yang Siu Shun
+Hong Yongmiao
+Ye Donghai
+Dong Shi
+673
+| | |
+27
+127
+546
+RMB'000
+(4)=(1)+(2)+(3)
+440
+179
+440
+440
+50
+Employee Representative Supervisor
+Huang Li
+50
+50
+1,083
+203
+880
+25
+25
+413
+413
+365
+365
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+Hui Ping (iv)
+Nout Wellink (iii)
+Zhang Wei
+440
+Others
+Notes to the Financial Statements
+(In RMB millions, unless otherwise stated)
+(4)
+(3)
+(2)
+(1)
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+(5)=(1)+(2)+(3)+(4)
+RMB'000
+payment
+before tax
+allowance, etc.
+bonuses
+paid
+Fees
+remuneration
+paid before tax
+RMB'000
+RMB'000
+(6)
+Non-executive Director
+Zheng Fuqing
+Non-executive Director
+Executive Director, Vice President
+Executive Director, Vice President
+Executive Director, President
+Vice Chairman of the Board of Directors,
+Cheng Fengchao
+Wang Jingdong
+Zhang Hongli
+Gu Shu
+891
+891
+149
+430
+312
+(7)=(5)-(6)
+Actual
+amount of
+Of which:
+deferred
+Total
+emoluments
+plans, housing
+In September 2018, Mr. Wang Jingdong ceased to act as Executive Director and Vice President of the Bank due to
+change of job assignments.
+(ix)
+(viii) In July 2018, Mr. Zhang Hongli ceased to act as Executive Director of the Bank due to expiration of the term of office,
+and resigned from the position of Vice President of the Bank due to family reasons.
+In January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+In January 2019, Mr. Yi Huiman ceased to act as Chairman of the Board of Directors and Executive Director of the Bank
+due to change of job assignments.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Qu Qiang was re-elected as
+External Supervisor of the Bank, and his new term of office took effect from 20 December 2018.
+On 21 September 2018, the Bank re-elected Mr. Hui Ping as Employee Supervisor of the Bank at the Interim Employees'
+Congress, and his new term of office took effect from the date of review and approval by the Employees' Congress.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Zheng Fuqing was re-elected as Non-
+executive Director of the Bank, and his new term of office took effect from the date of review and approval by the meeting.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Nout Wellink was appointed as
+Independent Non-executive Director of the Bank, and his term of office took effect from 3 December 2018.
+At the 2017 Annual General Meeting held on 26 June 2018, Mr. Cheng Fengchao was re-elected as Non-executive
+Director of the Bank, and his new term of office took effect from the date of review and approval by the meeting.
+(vii)
+(vi)
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+As at the approval date of these financial statements, changes of directors and supervisors of the Bank are as follows:
+(x)
+Financial Statements for the year ended 31 December 2018
+In October 2018, Mr. Fei Zhoulin ceased to act as Non-executive Director of the Bank citing his age.
+In October 2018, due to expiration of the term of office, Mr. Or Ching Fai ceased to act as Independent Non-executive
+Director of the Bank.
+Discretionary
+Remuneration
+and welfare
+insurance
+to social
+the employer
+Contribution by
+Year ended 31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Executive Director
+Chairman of the Board of Directors,
+Yi Huiman
+Position
+Name
+ICBC
+180
+(xi)
+Notes
+23
+2018
+147,347
+Other financial institutions operating in
+119,112
+147,940
+118,211
+147,805
+Banks operating in Mainland China
+institutions:
+Mainland China
+Placements with banks and other financial
+359,472
+370,074
+384,646
+(360)
+(393)
+(380)
+(401)
+358,498
+193,191
+234,122
+233,281
+577,803
+(614)
+Less: Allowance for impairment losses
+572,294
+672,468
+477,740
+578,417
+5,893
+6,781
+Accrued interest
+219,106
+285,354
+125,407
+230,640
+operating outside Mainland China
+Banks and other financial institutions
+234,076
+Less: Allowance for impairment losses
+358,858
+359,865
+370,454
+institutions:
+Due from banks and other financial
+2017
+2018
+2017
+2018
+Bank
+Group
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+186
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks
+and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits
+mainly consist of deposits placed with the PBOC. As at 31 December 2018, the mandatory deposit reserve ratios of
+the domestic branches of the Bank in respect of customer deposits denominated in RMB and foreign currencies were
+consistent with the requirement of the PBOC. The amounts of mandatory reserve deposits placed with the central
+banks of those countries or regions outside Mainland China are determined by local jurisdictions.
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+(ii)
+3,548,996
+Banks operating in Mainland China
+(203)
+477,537
+307,588
+276,859
+385,047
+2,387
+2,624
+Accrued interest
+40,755
+76,709
+51,635
+70,141
+operating outside Mainland China
+Banks and other financial institutions
+4,992
+3,910
+5,116
+4,694
+Mainland China
+Other financial institutions operating in
+313,111
+313,703
+3,313,748
+(538)
+671,930
+572,095
+154
+393
+538
+931
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+127
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+markets participates at measured date.
+188
+ICBC
+Charge for the year
+At 1 January 2018
+Impact of adopting IFRS 9
+At 31 December 2017
+Charge for the year
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which
+meet the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2018, derivative
+assets and derivative liabilities which meet the criteria for offsetting were RMB44,552 million (31 December 2017:
+RMB51,266 million) and RMB45,254 million (31 December 2017: RMB52,649 million) respectively, and the net derivative
+assets and net derivative liabilities were RMB25,906 million (31 December 2017: RMB26,949 million) and RMB26,608
+million (31 December 2017: RMB28,332 million) respectively.
+27
+777
+411
+Placements with
+banks and other
+financial institutions
+banks and other
+financial institutions
+Total
+326
+115
+441
+34
+84
+118
+360
+199
+559
+6
+212
+218
+366
+At 1 January 2017
+Bank
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+118
+327
+Total
+Placements with
+banks and other
+financial institutions
+Due from
+banks and other
+financial institutions
+At 31 December 2018
+Charge for the year
+At 1 January 2018
+At 31 December 2017
+Impact of adopting IFRS 9
+Charge for the year
+At 1 January 2017
+Group
+Movements of the allowance for impairment losses during the year are as follows:
+930,593
+1,031,402
+847,611
+962,449
+445
+(199)
+53
+138
+187
+Annual Report 2018
+1,015
+614
+401
+162
+139
+23
+853
+475
+378
+270
+272
+(2)
+583
+203
+380
+85
+(3)
+3,613,872
+1,668
+3,372,576
+The non-deductible expenses mainly represent non-deductible impairment provision, write-offs and others.
+The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal
+debts, which is exempted from income tax.
+(ii)
+(i)
+77,190
+73,690
+Income tax expense
+2,373
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+334
+(737)
+(772)
+Effects of profits attributable to associates and joint ventures
+(23,673)
+(28,969)
+Effects of non-taxable income (ii)
+8,956
+Notes to the Financial Statements
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2018 includes
+a profit of RMB282,044 million (2017: RMB269,205 million) which has been dealt with in the financial statements of the
+Bank (Note 39).
+184
+ICBC
+18. EARNINGS PER SHARE
+(2017: RMBO.2408 per share)
+Final ordinary shares dividends for 2018: RMB0.2506 per share
+(not recognised as at 31 December):
+Dividends on ordinary shares proposed for approval
+4,437
+4,506
+Dividends on preference shares declared and paid: Dividends
+83,506
+85,823
+Final ordinary shares dividends for 2017: RMBO.2408 per share
+(2016: RMB0.2343 per share)
+Dividends on ordinary shares declared and paid:
+2017
+2018
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+17. DIVIDENDS
+11,171
+(889)
+(1,177)
+Effects of different applicable rates of tax prevailing in other countries/regions
+Effects of non-deductible expenses (i)
+2018
+(b) Reconciliation between income tax and accounting profit
+Deferred income tax expense
+Overseas
+Hong Kong and Macau
+Mainland China
+Current income tax expense:
+(a) Income tax expense
+15. INCOME TAX EXPENSE
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+183
+Annual Report 2018
+127,769
+3,673
+14,247
+161,594
+2017
+124,096
+2017
+The calculation of basic and diluted earnings per share of the Group is based on the following:
+76,088
+2,510
+91,160
+93,103
+Tax at the PRC statutory income tax rate
+2017
+364,641
+372,413
+Profit before taxation
+2018
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+77,190
+73,690
+(9,312)
+(8,188)
+86,502
+81,878
+3,397
+3,280
+2,123
+80,982
+1,668
+2018
+89,315
+Mandatory reserves with the PBOC (ii)
+Restricted balances with central banks:
+208,663
+277,850
+252,571
+308,333
+114,413
+2,756,781
+99,527
+123,500
+overseas countries or regions
+Unrestricted balances with central banks of
+23,082
+113,996
+26,507
+114,786
+150,850
+Fiscal deposits with the PBOC
+254,171
+Other restricted balances with the PBOC (ii)
+central banks
+Accrued interest on balances with
+3,340,333
+18,785
+23,246
+3,034,230
+32,254
+3,361,301
+3,062,575
+42,885
+overseas countries or regions (ii)
+Mandatory reserves with central banks of
+36,961
+7,641
+276,936
+3,007,651
+2,749,172
+254,171
+3,015,150
+276,936
+36,961
+8,738
+Surplus reserves with the PBOC (i)
+71,168
+64,327
+75,214
+356,407
+Basic and diluted earnings per share (RMB yuan)
+Weighted average number of ordinary shares in issue (in million shares)
+281,612
+293,170
+Profit for the year attributable to ordinary equity holders of the parent company
+Shares:
+(4,437)
+(4,506)
+holders of the parent company
+Less: Profit for the year attributable to other equity instruments
+286,049
+297,676
+Profit for the year attributable to equity holders of the parent company
+Earnings:
+2017
+2018
+85,823
+356,407
+2017
+0.82
+Basic and diluted earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the
+parent company divided by the weighted average number of ordinary shares in issue.
+70,047
+Cash on hand
+central banks:
+Cash and unrestricted balances with
+2017
+Bank
+2018
+2017
+2018
+Group
+(i)
+19. CASH AND BALANCES WITH CENTRAL BANKS
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+185
+Annual Report 2018
+0.79
+(2)
+Effects of others
+paid
+before tax
+RMB'000
+before tax
+Fees
+Total
+emoluments
+Defined
+contribution
+plans
+RMB'000
+RMB'000
+(1)
+Remuneration
+Year ended 31 December 2018
+Non-executive Director
+Mei Yingchun
+Non-executive Director
+Zheng Fuqing (ii)
+Non-executive Director
+Cheng Fengchao (i)
+Executive Director, President
+Vice Chairman of the Board of Directors,
+Position
+Gu Shu
+Name
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+12. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+Non-executive Director
+2.24
+2.30
+4,052,540
+90,893
+Demand deposits
+Corporate loans
+42,012
+0.70
+5,494,567
+36,989
+98,625
+5,983,490
+4,286,839
+2017
+Corporate deposits
+(%)
+Average cost
+Interest
+expense
+Average
+balance
+(%)
+Average cost
+Interest
+expense
+Average
+balance
+Item
+0.67
+Time deposits
+Subtotal
+4,448,649
+140,637
+122,557
+8,068,894
+1.50
+122,977
+8,207,406
+Subtotal
+0.39
+14,115
+3,620,245
+0.38
+14,105
+3,719,278
+Demand deposits
+2.44
+108,442
+2018
+2.43
+108,872
+4,488,128
+Time deposits
+Personal deposits
+1.34
+127,882
+9,547,107
+1.37
+10,270,329
+In RMB millions, except for percentages
+ICBC
+Interest expense on deposits amounted to RMB280,212 million, representing an increase of RMB19,256 million or 7.4% over
+the previous year, principally due to the expansion in the size of due to customers and the increase in the average cost of
+deposits by 3 basis points.
+4.38
+214,317
+4,891,776
+Personal loans
+3.94
+16,503
+418,935
+4.64
+14,493
+312,438
+Discounted bills
+4.36
+331,081
+7,589,729
+4.44
+(%)
+Average yield
+Interest
+income
+balance
+(%)
+Average
+Average yield
+Interest
+income
+356,176
+8,019,984
+balance
+4,230,587
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+182,589
+Overseas business
+♦ Interest Expense on Deposits
+Interest Expense
+Interest income on due from banks and other financial institutions was RMB58,660 million, representing an increase of
+RMB3,270 million or 5.9% as compared to that of last year, principally due to the increase of 25 basis points in the average
+yield of due from banks and other financial institutions as affected by the product structure adjustment by the Bank in due
+time based on the trend of interest rates in the market.
+♦ Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from central banks was RMB49,246 million, recording an increase of RMB911 million or 1.9% as
+compared to that of last year.
+♦ Interest Income on Due from Central Banks
+Interest income on investment amounted to RMB200,157 million, representing an increase of RMB14,976 million or 8.1%
+as compared to that of last year, mainly due to the Bank's moderate increase in investment and the increase in the average
+yield of investment by 4 basis points.
+♦ Interest Income on Investment
+Discussion and Analysis
+1.52
+14
+advances to customers
+4.23
+572,688
+13,535,464
+4.38
+640,031
+14,600,596
+Total loans and
+3.28
+42,515
+1,296,213
+4.00
+55,045
+1,376,398
+4.32
+Overseas business
+260,956
+16,598
+17,046
+145,301
+Net fee and commission income
+Less: Fee and commission expense
+2.3
+3,681
+158,666
+162,347
+0.6
+17
+2,781
+2,798
+19,041
+8.5
+1,805
+1,959
+Fee and commission income
+Others
+Trust and agency services
+4.7
+314
+6,731
+7,045
+Asset custody business
+30.0
+154
+(1,995)
+(10.5)
+139,625
+(820)
+2,165
+1,345
+(50.5)
+(2,907)
+5,753
+2,846
+(%)
+(decrease)
+2017
+2018
+Growth rate
+Increase/
+In RMB millions, except for percentages
+Discussion and Analysis
+Total
+Other operating income, net
+Net gain on financial investments
+Net trading income
+Item
+ICBC
+16
+The Bank proactively responded to the New Rules on Asset Management and other regulatory requirements, focused
+on serving the real economy and satisfying the financial needs of consumers, and made continuous efforts to promote
+the transformation and innovation of intermediary services. In 2018, the Bank realized a net fee and commission income
+of RMB145,301 million, representing an increase of RMB5,676 million or 4.1% over last year. The bank card business
+income recorded an increase of RMB5,027 million, as benefited by the fast increase in credit card installment service fee
+and consumption return commission income; income on settlement, clearing business and cash management increased
+by RMB4,965 million, mainly driven by the rapid growth of third party payment; income on guarantee and commitment
+business registered an increase of RMB2,043 million, primarily attributable to the fast development of commitment business.
+The Bank proactively promoted the product transformation based on the New Rules on Asset Management, and meanwhile,
+as affected by the implementation of VAT for asset management products which started in 2018, income on personal wealth
+management and corporate wealth management services declined.
+4.1
+5,676
+2,043
+6,818
+8,861
+Guarantee and commitment business
+2017
+2018
+Item
+In RMB millions, except for percentages
+NET FEE AND COMMISSION INCOME
+In 2018, non-interest income was RMB152,603 million, RMB973 million or 0.6% lower than that of last year, accounting
+for 21.0% of the Bank's operating income. Specifically, net fee and commission income increased by 4.1% to RMB145,301
+million, and other non-interest income dropped by 47.7% to RMB7,302 million.
+Non-interest Income
+Interest expense on debt securities issued was RMB30,373 million, indicating an increase of RMB10,231 million or 50.8%
+over last year, mainly attributable to the increase in the size and average cost of the financial bonds, bills and CDs issued by
+overseas institutions during the reporting period and the issuance of RMB88.0 billion of tier 2 capital bonds by the Bank in
+the second half of 2017. Please refer to "Note 35. to the Financial Statements: Debt Securities Issued" for the debt securities
+issued by the Bank.
+♦ Interest Expense on Debt Securities Issued
+Discussion and Analysis
+15
+Annual Report 2018
+Interest expense on due to banks and other financial institutions was RMB64,991 million, RMB6,573 million or 11.3%
+higher over last year, principally attributable to the rise of interest rates in the USD markets during the reporting period and
+relatively high funds rate in the RMB market in the first half year of 2018, which resulted in the increase of 25 basis points in
+the average cost of due to banks and other financial institutions.
+♦ Interest Expense on Due to Banks and Other Financial Institutions
+1.42
+Item
+18,335,825
+1.45
+280,212
+19,317,269
+Total deposits
+1.46
+10,517
+719,824
+1.98
+Increase/
+(decrease)
+839,534
+Growth rate
+Bank card business
+3.5
+(23.2)
+(4,402)
+18,984
+14,582
+Corporate wealth management services
+813
+23,189
+24,002
+Investment banking business
+private banking services
+(16.0)
+(5,250)
+32,846
+27,596
+Personal wealth management and
+cash management
+18.5
+4,965
+26,820
+31,785
+Settlement, clearing business and
+13.0
+5,027
+38,692
+43,719
+(%)
+Average
+4.40
+In RMB millions, except for percentages
+2017
+FINANCIAL STATEMENTS ANALYSIS
+Income Statement Analysis
+In 2018, the Bank continued to enhance its service capability for the real economy, consolidated the foundation of operation
+and management, optimized its profitability structure and intensified its risk precaution and control ability, achieving stability
+in both benefits and quality. In 2018, the Bank realized a net profit of RMB298,723 million, representing an increase of
+RMB11,272 million or 3.9% as compared to the previous year. Return on average total assets stood at 1.11%, and return
+on weighted average equity was 13.79%. Operating income amounted to RMB725,121 million, representing an increase
+of 7.3%, of which, due to the increase in interest-generating assets and net interest margin, net interest income grew by
+9.7% to RMB572,518 million; non-interest income was RMB152,603 million, down by 0.6%. Operating expenses amounted
+to RMB194,203 million, representing an increase of 4.3%, and the cost-to-income ratio was 25.71%. Allowance for
+impairment losses was RMB161,594 million, representing an increase of 26.5%. Income tax expense reduced by 4.5% to
+RMB73,690 million.
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In RMB millions, except for percentages
+Growth rate
+Item
+Net interest income
+Non-interest income
+Operating income
+2018
+2017
+Discussion and Analysis
+Increase/
+(decrease)
+572,518
+522,078
+50,440
+9.7
+152,603
+153,576
+(973)
+(0.6)
+725,121
+675,654
+49,467
+(%)
+11
+Annual Report 2018
+Looking forward to 2019, the global economy will be exposed to more downside risks, and the international financial
+market is likely to show an aggravated fluctuation. Under the influence of countercyclical adjustment of macroeconomic
+policy and other factors, China's economic performance will remain within a reasonable range. A proactive fiscal policy
+would increase effectiveness, and a larger scale of tax cut and fee reductions would be implemented. The fiscal expenditure
+structure would be further adjusted and optimized. A moderately sound monetary policy, while maintaining a reasonable
+and sufficient liquidity, would facilitate structural optimization and better serve the real economy. Supply-side structural
+reform would adopt more market-oriented and rule-of-law means to continuously optimize economic structure, and hence
+the employment situation would be further improved.
+22,830,845
+Total interest-bearing liabilities
+3.28
+20,142
+613,804
+3.59
+30,373
+845,347
+Debt securities issued
+institutions(3)
+2.19
+58,418
+2,668,436
+2.44
+64,991
+2,668,229
+Due to banks and other financial
+1.42
+260,956
+18,335,825
+In 2018, affected by tightened global monetary policy, intensified trade friction, Brexit and geopolitical risks, the momentum
+for global economic recovery faded, and the internal recovery of developed and emerging market economies diverged.
+The US economic growth rate approached a staged high, and the growth of the Eurozone and Japan slowed down. The
+international financial market continued to fluctuate, with the slight appreciation of USD and YEN, and the decline of EUR,
+emerging market currencies, global stock markets, and the prices of crude oil and gold to varying degrees.
+In 2018, China's economic performance remained within a reasonable range. China's gross domestic product (GDP),
+consumer price index, retail sales of consumer goods, fixed asset investment, industrial added value of above-scale
+enterprises, and total imports and exports rose by 6.6%, 2.1%, 9.0%, 5.9%, 6.2% and 9.7% respectively.
+The PBC implemented a prudent monetary policy. Through targeted reduction of required reserve ratio and increased
+re-lending and rediscounting quotas, more support was given to the real economy. Credit financing support policies for
+private enterprises and small and micro enterprises were introduced, and bond-financing-backed instruments were launched
+for private enterprises. The New Rules on Asset Management and guidelines for regulation of systemically important financial
+institutions were released. Moreover, innovative capital replenishment instruments such as undated additional tier 1 capital
+bonds were introduced, to promote the standardized and innovative development of financial market.
+Both monetary credit and social financing maintained a stable growth. At the end of 2018, the balance of M2 was
+RMB182.67 trillion, up 8.1% year-on-year. The outstanding RMB loans reached RMB136.30 trillion, increasing by 13.5%
+year-on-year. The balance of RMB deposits amounted to RMB177.52 trillion, up 8.2% from the previous year. The existing
+social financing scale size stood at RMB200.75 trillion, a year-on-year increase of 9.8%. Major stock indexes declined in
+volatile trading, with a decrease of 24.6% and 34.4% in the Shanghai Composite Index and the Shenzhen Component
+Index respectively. The total issuance amount of various bonds in the bond market came in at RMB43.1 trillion, up 7.5%.
+The issuance rate of bond market dropped significantly, and the bond yield curve presented an overall downward trend. At
+the end of 2018, the central parity of RMB against the US dollar was RMB6.8632, a depreciation of 4.8% from the end of
+last year.
+The asset scale of the Chinese banking sector grew steadily, with the quality of credit assets remaining stable overall. At
+the end of 2018, the total assets of financial institutions in China's banking sector were RMB268.24 trillion, up 6.27%.
+The balance of NPLs of commercial banks reached RMB2.03 trillion, with a NPL ratio of 1.83% and allowance to NPLs of
+186.31%. Besides, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were
+11.03%, 11.58% and 14.20% respectively.
+7.3
+Less: Operating expenses
+194,203
+186,194
+298,723
+287,451
+11,272
+3.9
+Attributable to: Equity holders of the parent
+297,676
+286,049
+11,627
+4.1
+company
+Non-controlling interests
+1,047
+1,402
+(355)
+(25.3)
+12
+ICBC
+Discussion and Analysis
+Net Interest Income
+In 2018, net interest income was RMB572,518 million, RMB50,440 million or 9.7% higher than that of last year, accounting
+for 79.0% of the Bank's operating income. Interest income grew by RMB86,500 million or 10.0% to RMB948,094 million
+and interest expenses increased by RMB36,060 million or 10.6% to RMB375,576 million. Net interest spread and net interest
+margin came at 2.16% and 2.30%, 6 basis points and 8 basis points higher than those of the previous year, respectively.
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In RMB millions, except for percentages
+2018
+2017
+Interest
+Interest
+Net profit
+375,576
+(4.5)
+77,190
+8,009
+4.3
+Less: Impairment losses
+161,594
+127,769
+33,825
+26.5
+Operating profit
+369,324
+361,691
+7,633
+2.1
+Shares of profits of associates and
+3,089
+2,950
+139
+4.7
+joint ventures
+Profit before taxation
+372,413
+364,641
+7,772
+2.1
+Less: Income tax expense
+73,690
+(3,500)
+1.65
+21,618,065
+339,516
+Average yield
+Interest
+income
+balance
+Item
+Average
+2018
+In RMB millions, except for percentages
+2017
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Interest income on loans and advances to customers was RMB640,031 million, RMB67,343 million or 11.8% higher as
+compared to that of last year, as affected by the increase in the size of loans and advances to customers and the increase in
+the average yield of loans and advances to customers by 15 basis points.
+♦ Interest Income on Loans and Advances to Customers
+Interest Income
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+50,440
+13,038
+37,402
+36,060
+14,075
+21,985
+10,231
+1,903
+8,328
+6,573
+6,671
+(98)
+19,256
+Average
+5,501
+(%)
+Interest
+income
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+4.23
+572,688
+13,535,464
+4.38
+640,031
+14,600,596
+Total loans and
+advances to customers
+loans
+(37.9)
+435,638
+9,903,229
+4.47
+504,083
+11,266,588
+Medium to long-term
+3.77
+137,050
+3,632,235
+4.08
+135,948
+3,334,008
+Short-term loans
+(%)
+Average yield
+balance
+2018
+13,755
+Changes in interest expenses
+In RMB millions
+Assets
+Item
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Discussion and Analysis
+13
+Annual Report 2018
+(3) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(2)
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+represent the average of the balances at the beginning of the year and at the end of the year.
+2.22
+2.30
+Net interest margin
+2.10
+2.16
+Net interest spread
+522,078
+572,518
+Net Interest Income
+1,461,336
+23,079,401
+1,729,863
+24,560,708
+Total liabilities
+Non-interest-bearing liabilities
+1.57
+Comparison between 2018 and 2017
+Increase/(decrease) due to
+Changes in net interest income
+Volume
+Net increase/
+(decrease)
+Debt securities issued
+Due to banks and other financial institutions
+Deposits
+Liabilities
+86,500
+27,113
+59,387
+1.45
+Changes in interest income
+3,270
+4,128
+(858)
+Due from banks and other financial institutions
+911
+628
+283
+Due from central banks
+14,976
+2,054
+12,922
+Investment
+67,343
+20,303
+47,040
+Loans and advances to customers
+Interest rate
+3,111
+OTHER NON-INTEREST RELATED GAINS
+(2,922)
+13.0
+94,375
+Pearl River Delta
+17.3
+117,132
+17.4
+126,151
+Yangtze River Delta
+10.9
+73,787
+11.9
+86,107
+Head Office
+100.0
+675,654
+88,516
+100.0
+13.1
+136,799
+27,958
+Northeastern China
+14.9
+100,795
+15.0
+108,518
+Western China
+12.0
+81,341
+12.2
+88,192
+Central China
+18.8
+126,006
+18.7
+Bohai Rim
+725,121
+Operating income
+(%)
+Treasury operations
+37.9
+137,843
+38.7
+144,284
+Personal banking
+41.9
+152,873
+40.7
+151,714
+Corporate banking
+100.0
+364,641
+100.0
+372,413
+75,828
+20.4
+72,713
+19.9
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+2017
+3.9
+2018
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+Please refer to the section headed "Discussion and Analysis - Business Overview" for details on the development of each of
+these operating segments.
+0.3
+1,212
+0.2
+587
+Others
+In RMB millions, except for percentages
+Profit before taxation
+28,632
+Overseas and others
+Discussion and Analysis
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+ICBC
+18
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+11.1
+40,273
+8.9
+33,239
+Overseas and others
+3.0
+10,812
+1.5
+5,562
+Northeastern China
+28 March 2019
+13.1
+President: Gu Shu
+瓜澍
+President's Statement
+The year 2018 marked the 40th anniversary of China's reform and opening-up. In retrospect from this significant juncture
+in history, we feel honored to have taken part in and witnessed the great reform practice. In 2018, ICBC stayed focused,
+stimulated vitality and pooled efforts to deliver its annual results marked with high-quality development and steady progress
+in its new journey towards being a world-class and modern financial enterprise with global competitiveness.
+Our overall operation and fundamentals were "stable", especially our profitability, quality and risk control
+constituted a "multi-stable" prospect. In terms of profitability, the Group recorded RMB298.7 billion in net profit,
+representing an increase of 3.9% from the previous year. Profit before provision was RMB534.0 billion, representing an
+increase of 8.4%. Net interest margin (NIM) rose by 8 basis points to 2.30% from the previous year, a major contributing
+factor to profit growth. In terms of quality, the Bank continued to enhance asset quality through the implementation of the
+"Consolidate the Foundation" program. Our balance sheet has become cleaner, and our ability to serve the real economy
+has become more sustainable. The Bank recovered and disposed of RMB226.5 billion of non-performing loans (NPLs), an
+increase of RMB33.8 billion from the previous year. The NPL ratio dropped 0.03 percentage points to 1.52% from the end
+of the previous year, falling for 8 consecutive quarters. The "scissors difference" between overdue loans and NPLs fell for
+three consecutive years and it dropped by 46% in 2018. Allowance to NPLs rose to over 175%. In terms of risk control, we
+have acquired a deeper understanding of the characteristics and nature of risks as they evolve. With the goal of "clear vision,
+thorough understanding and good management", we have built a risk control system that allows for lifecycle management
+of a full spectrum of risks across the entire market, which in turn ensures that each type of risks overall is within a
+manageable level and forges a healthier operation structure.
+We stepped "forward" by further improving and enhancing our financial services for the real economy. We
+established a new mechanism for the integrated development of investment and financing, coordinated increment and
+stock, credit and non-credit as well as financing and intelligence, which led to the activation of the vitality and efficiency
+of all key financial elements. In 2018, aggregate new financing reached nearly RMB4 trillion, including new RMB loans of
+RMB1.16 trillion, re-lending after collections of RMB1.96 trillion, and new bond investment and other non-credit financing
+of RMB840.0 billion. We provided targeted support to private enterprises and small and micro enterprises as breakthrough
+points for promoting the spread of the monetary policy and implementing the principle of "Six Stabilities". We upheld the
+development philosophy of "ICBC has no future without serving small and micro enterprises" and the principle of equal
+credit. We reinforced our policy on "dare to lend, willing to lend, able to lend and good at lending", and extended our
+credit to private enterprises and small and macro enterprises at fair prices and terms, so that hard-working entrepreneurs
+may experience a real sense of fulfillment. New loans to private enterprises reached RMB113.7 billion, and inclusive
+finance loans grew more than twice as fast as the average of all loans, demonstrating the Bank's leading role in providing
+enterprises with accessible and affordable financing. In addition, in alignment with the requirements of high-quality
+economic development, the Bank continued to improve on the allocations of financial resources and nourished the real
+economy through "targeted irrigation" by focusing on areas such as major national infrastructure, development of advanced
+manufacturing, a shift to new growth drivers, enhancement of domestic consumption and cooperation under the Belt and
+Road Initiative.
+We could "maintain stability while making progress", as we insisted on reform and innovation as well as
+transformation and development. Based on the new-era concept of "serving the broadest customer base", we
+endeavored to build a more open and more inclusive customer base. Following the addition of 40.00 million new
+personal customers in the year, which represented the strongest growth in recent years, the Bank's total number of
+personal customers exceeds 0.6 billion. The total number of users on our online platforms exceeds 0.4 billion. Owing to
+the continuous expansion of our customer base and the ongoing improvement of the services we provide, the Bank's
+general deposits increased by RMB1.45 trillion, the best level in nearly a decade. Our strategy on mega retail began to
+reap rewards, as shown by the stronger revenue contribution and an increase in the market competitiveness in the sector.
+Asset management and investment banking transformed steadily amid the implementation of the New Rules on Asset
+Management. As the key battle of last year's innovation, we upheld an ICBC outlook on FinTech development, reformed
+the technology system, launched the IT architecture upgrading project and pursued smart banking across the board. From
+setting sail to bravely forging ahead, we have become a "main force" in the FinTech arena. We pursued coordinated reforms
+in areas such as credit system and mechanism, enhancing city branches' competitiveness, integrated marketing service
+system, differentiated performance assessment, network mapping and improvements of human resources, so as to enhance
+connectivity and unleash dividend and vitality across the Bank.
+Annual Report 2018
+9
+President's Statement
+In the past year, we acquired a deeper understanding of and further applied the Bank's governance philosophies and
+methodologies as we forged ahead against all odds. That is, we must remain guided by our strategy. The larger the
+vessel, the greater the winds and waves it will experience, and the more it will have to give full play to the role of strategy
+as the "bellwether", enshrine our new vision to guide us in the pursuit of our common values across the Bank, and unify our
+operation activities with the new strategy, in order to get through the "last mile" to fulfill our strategy and reach our goal
+without distractions.
+We must abide by the rules of commercial banking. Banking requires a high level of professionalism. It is our cardinal
+principle to stand in awe of, respect and comply with its rules. We continuously refresh our knowledge and further our
+understanding of the nature and laws of finance. In managing the relationships between assets and liabilities, scale and
+price, size and structure, market and risk, centralization and decentralization, inheritance and innovation, strategy and
+tactics, and others, we have struck a balance. We have made changes while following the rules, sought development
+without rash advance, forestalled systemic risks without being too conservative, and sailed through the trends without being
+led by them.
+We must stay on the track of reform and innovation. The best celebration of the 40th anniversary of China's reform
+and opening-up is to address our own challenges by learning from past experience, to seek truth from facts while freeing
+our minds and to keep moving forward non-stop with reform and innovation. To make steady, prudent yet innovative
+reform will be the indispensable pillars of ICBC. We look downwards and inwards. We combine top-level design with grass-
+roots exploration, specially targeted breakthroughs with overall advancement, individual strike with concerted action, and
+temporary fixes with permanent solutions. The reform and innovation we have undertaken enable us to develop on all
+fronts.
+We must adhere to the principle of "people-orientation". The Bank's two most gratifying changes are the quality of
+management and the team morale. We are committed to choosing and using the right people and managing them well. We
+have upheld the "fighter + doer" culture, fostered a healthy atmosphere of integrity and forged ahead boldly to ensure that
+ICBC rises to the forefront.
+In January 2019, Mr. Yi Huiman resigned from the positions of Chairman of the Board of Directors and Executive Director
+due to a change in job assignments. Mr. Yi Huiman has outstanding strategic and dialectic mindset. With keen financial
+insights, diligence and dedication, he has led and steered the Bank amid significant changes in the market to a steady
+growth of quality, and exemplified how a leading bank should act at home and abroad. On behalf of the Board of Directors
+of the Bank, I would like to express my sincere gratitude to Mr. Yi Huiman for his outstanding contribution during his term
+of office. There were other significant changes to the Board of Directors, the Board of Supervisors and other members of the
+Bank's senior management last year. Their hard work and contributions during their terms of office are greatly appreciated.
+In 2019, banks will see a more complex operating environment and a higher level of uncertainties, and may face another
+period of challenges since the new economic normal. ICBC is now sailing against stronger currents in the middle reaches,
+where it becomes increasingly difficult to advance, and where we have no choice but to advance. Banks are born to deal
+with risks. We will maintain strategic resolve, take bold steps in a clear direction, strive to identify opportunities for growth in
+adversities, find certainty among uncertainties, and create opportunities in addressing risks and challenges.
+10
+ICBC
+谷
+47,694
+14.6
+54,409
+Yangtze River Delta
+12.9
+47,191
+10.3
+38,506
+Head Office
+100.0
+364,641
+100.0
+372,413
+Profit before taxation
+8.8
+59,445
+7.9
+57,021
+77,056
+20.7
+71,633
+19.6
+Western China
+9.0
+32,659
+6,033
+36,027
+Central China
+18.3
+4.2
+66,818
+75,483
+Bohai Rim
+13.0
+47,561
+14.0
+52,131
+Pearl River Delta
+20.3
+0.7
+9.7
+0.7
+Segment Information
+Discussion and Analysis
+17
+Annual Report 2018
+Income tax expense decreased by RMB3,500 million or 4.5% to RMB73,690 million as compared to the previous year.
+The effective tax rate stood at 19.79%. Please see "Note 15. to the Financial Statements: Income Tax Expense" for the
+reconciliation of income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective
+income tax rate.
+In 2018, the Bank set aside an allowance for impairment losses of RMB161,594 million, an increase of RMB33,825 million or
+26.5% as compared to that of last year. Specifically, the allowance for impairment losses on loans was RMB147,347 million,
+indicating an increase of RMB23,251 million or 18.7%. Please refer to "Note 23. to the Financial Statements: Loans and
+Advances to Customers; Note 14. to the Financial Statements: Impairment Losses" for details.
+Impairment Losses
+The Bank continued to strengthen cost control and management. Operating expenses amounted to RMB194,203 million, an
+increase of RMB8,009 million or 4.3% over last year.
+4.3
+8,009
+186,194
+194,203
+Total
+5.3
+1,822
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+34,099
+SUMMARY OPERATING SEGMENT INFORMATION
+2018
+(322,769)
+Total assets
+26,691,916
+24,930,742
+Liabilities
+Deposits
+19,317,269
+280,212
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+2017
+In RMB millions, except for percentages
+35,921
+10.6
+225
+Growth rate
+Increase/
+(decrease)
+2017
+2018
+Item
+In RMB millions, except for percentages
+OPERATING EXPENSES
+Operating Expenses
+Other non-interest related gains amounted to RMB7,302 million, RMB6,649 million or 47.7% lower than that of the
+previous year. Specifically, the decrease in net trading income was mainly attributable to the increase in losses from
+derivative contracts; the fall of net gain on financial investments was primarily due to the increase in expected payments to
+customers resulted from the growth of structured deposits; and the decrease in other net operating income was principally
+derived from the increase in net loss on exchange and exchange rate products.
+(47.7)
+(6,649)
+13,951
+7,302
+(48.4)
+4,872
+(%)
+Staff costs
+121,074
+114,954
+2,114
+2,339
+Others
+Amortisation
+4.2
+316
+7,465
+(387,490)
+7,781
+(1.7)
+(474)
+27,562
+27,088
+Premises and equipment expenses
+5.3
+6,120
+Taxes and surcharges
+Allowance for impairment losses
+Income Tax Expense
+49.2
+100.0
+725,121
+Operating income
+(%)
+Average
+income/ Average yield/
+income/ Average yield/
+balance
+expense
+cost (%)
+balance
+expense
+cost (%)
+Item
+Assets
+675,654
+Loans and advances to customers
+100.0
+353,859
+5,288
+Others
+13.4
+90,599
+12.8
+92,484
+Treasury operations
+36.7
+247,919
+37.7
+273,490
+Personal banking
+1,788,680
+332,264
+48.8
+Corporate banking
+14,600,596
+Average
+4.38
+1,628,820
+58,660
+3.60
+1,651,391
+55,390
+3.35
+financial institutions(3)
+Due from banks and other
+Total interest-generating assets
+948,094
+3.81
+23,464,831
+861,594
+3.67
+Non-interest-generating assets
+2,211,163
+640,031
+1.54
+24,868,243
+3,142,370
+13,535,464
+48,335
+572,688
+4.23
+Investment
+200,157
+3.65
+5,135,606
+5,483,420
+3.61
+1.56
+Due from central banks (2)
+3,155,407
+49,246
+185,181
+Notional amounts with remaining life of
+Fair values
+Over three
+Within
+months
+but within
+2018
+three
+months
+one year
+Over
+Group
+(14,671)
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+193,588
+1,072,116
+16,042
+Forward contracts
+102,731
+33,737
+but within
+161,207
+24,739
+At the end of the reporting period, the Group and the Bank had derivative financial instruments as follows:
+Over
+2,986,033
+five years
+31
+(863)
+110,560
+1,474
+60,266
+48,820
+Option contracts written
+(41,330)
+41,230
+912
+5,559,756
+99,776
+124
+3,163
+52,688
+43,801
+Option contracts purchased
+21,756
+101,765
+2,542,823
+2,893,412
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+five years
+one year
+(215)
+five years
+3,588
+89,013
+(78,556)
+Annual Report 2018
+189
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Bank
+2018
+Notional amounts with remaining life of
+Fair values
+Over three
+(13,407)
+Over
+months
+one year
+three
+but within
+but within
+Over
+months
+one year
+five years
+2,655,777
+Total
+Within
+20,554
+1,090,185
+6,462,553
+5,625
+235,087
+7,468
+2,417
+1,067
+14,540
+82
+Option contracts written
+528
+8,770
+8,653
+397
+18,348
+(69)
+202,403
+274,318
+594,438
+195,052
+1,266,211
+16,155
+(14,955)
+Commodity derivatives and others
+784,044
+265,794
+3,014,202
+2,482,403
+34,722
+730,861
+Option contracts purchased
+106,402
+Assets
+5,770,092
+49,806
+3,916,083
+34,293
+97,581
+1,833,069
+1,951,140
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Total
+years
+(49,569)
+five
+one year
+months
+Over
+but within
+one year
+months
+but within
+three
+Within
+Over
+Over three
+Fair values
+five years
+Notional amounts with remaining life of
+Option contracts purchased
+67,284
+34,715
+Assets
+558,629
+224,343
+95,556
+Swap contracts
+Interest rate contracts:
+(50,194)
+52,304
+4,106,157
+34,410
+47,003
+101,701
+2,027,755
+(625)
+71,901
+351
+41,938
+29,612
+Option contracts written
+2,498
+118,173
+117
+3,769
+1,942,291
+2017
+(73,573)
+71,335
+1,660
+2,869
+3,393
+7,544
+Option contracts purchased
+(202)
+2
+143,793
+321
+29,431
+42,965
+15,466
+71,076
+(16,277)
+16,179
+1,786,262
+240,521
+852,201
+400,038
+293,502
+Swap contracts
+Interest rate contracts:
+(42,193)
+42,142
+Forward contracts
+41
+Option contracts written
+5,998
+8,857,313
+276,042
+1,040,653
+3,365,354
+4,175,264
+(14,859)
+12,971
+1,130,402
+10,519
+47,982
+260,790
+811,111
+Commodity derivatives and others
+(16,521)
+16,222
+1,956,819
+243,643
+886,269
+448,787
+378,120
+(42)
+11,298
+1,141
+1,768
+2,391
+21,880
+Liabilities
+13,084
+Forward and swap contracts
+13,125,401
+14,211,777
+924
+13,892,966
+1,368
+15,046,132
+Corporate loans and advances
+Measured at FVTPL:
+343,827
+360,483
+10
+As at 31 December 2018, the Group's and the Bank's allowance for impairment losses on loans and advances to customers
+measured at FVOCI were RMB446 million and RMB432 million respectively, see Note 23(b) (31 December 2017: Not applicable).
+Accrued interest
+354,228
+Discounted bills
+6,245
+Corporate loans and advances
+Measured at FVOCI:
+13,125,401
+(330,016)
+(400,474)
+13,867,026
+13,892,966
+14,684,281
+343,827
+196
+ICBC
+Notes to the Financial Statements
+5,493
+(4,901)
+(1,417)
+(17,976)
+19,393
+Total
+372,598
+152,770
+111,867
+107,961
+Write-offs and transfer out
+Charge
+― to stage 3
+to stage 2
+to stage 1
+Balance at 1 January 2018
+Transfer:
+Stage 3
+31 December 2018
+Stage 2
+Stage 1
+Group
+(a) Movements of allowance for impairment losses of loans and advances to customers
+measured at amortised cost are as follows:
+During the year, movements of the allowance for impairment losses on loans and advances to customers are as follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(340,482)
+(412,731)
+measured at amortised cost
+(note 23(a))
+of loans and advances to customers
+Bank
+Group
+23. LOANS AND ADVANCES TO CUSTOMERS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+195
+Annual Report 2018
+As part of the reverse repurchase agreements, the Group has received securities that is allowed to sell or repledge
+in the absence of default by their owners. As at 31 December 2018, the Group had received securities with a fair
+value of approximately RMB227,372 million on such terms (31 December 2017: RMB157,222 million). Of these,
+securities with a fair value of approximately RMB202,508 million have been repledged under repurchase agreements
+(31 December 2017: RMB136,694 million). The Group has an obligation to return the securities to its counterparties.
+If the collateral received declines in value, the Group may, in certain circumstances, require additional collateral.
+In accordance with master repurchase agreements and related supplementary agreements, the Group offsets
+reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and
+presents net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the
+financial statement. As at 31 December 2018, reverse repurchase agreements and repurchase agreements which
+meet the criteria for offsetting were RMB467,516 million and RMB476,199 million respectively (31 December 2017:
+RMB542,062 million and RMB560,138 million respectively), and the net reverse repurchase agreements and net
+repurchase agreements were RMB145,648 million and RMB154,331 million, respectively (31 December 2017:
+RMB137,155 million and RMB155,231 million, respectively).
+(ii)
+(i)
+750,763
+521,393
+986,631
+174,794
+734,049
+29,822
+securities borrowing
+Cash advanced as collateral on
+144,972
+142,502
+Other financial institutions
+2,470
+Banks
+2018
+(592)
+2017
+2017
+Less: Allowance for impairment losses
+13,455,417
+14,267,500
+14,233,448
+15,097,012
+34,345
+38,948
+Accrued interest
+349,024
+9,450
+351,126
+10,209
+Discounted bills
+4,843,049
+5,515,538
+8,263,344
+8,708,167
+8,936,864
+4,945,458
+5,636,574
+Personal loans
+9,411,281
+Corporate loans and advances
+Measured at amortised cost:
+2018
+(2,869)
+(40,413)
+43,282
+― to stage 2
+― to stage 1
+Transfer:
+Balance at 1 January 2018
+Group
+(b) Movements of the allowance for impairment losses on loans and advances to
+customers measured at FVOCI are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+197
+Annual Report 2018
+400,474
+169,073
+78,524
+152,877
+Balance at 31 December 2018
+(506)
+(1,770)
+636
+628
+Other movements
+2,134
+2,134
+-
+previously written off
+to stage 3
+Charge/(reverse)
+Balance at 31 December 2018
+Charge/(reverse)
+― to stage 3
+― to stage 2
+to stage 1
+Stage 1
+23
+Balance at 1 January 2018
+Transfer:
+446
+248
+0
+198
+2
+2
+(27)
+(200)
+173
+| | |
+Total
+471
+Stage 3
+448
+23
+Stage 2
+Stage 1
+31 December 2018
+Bank
+Other movements
+Reverse repurchase agreements-securities:
+Recoveries of loans and advances
+(104,424)
+Balance at 1 January 2018
+Bank
+412,731
+173,241
+81,406
+158,084
+Balance at 31 December 2018
+(604)
+(1,871)
+646
+621
+Other movements
+2,141
+2,141
+previously written off
+Recoveries of loans and advances
+147,374
+(108,778)
+(106,146)
+(2,294)
+(338)
+85,074
+24,083
+38,217
+Stage 1
+102,873
+144,967
+(107,056)
+31 December 2018
+Stage 2
+Stage 3
+148,379
+(2,294)
+(338)
+Write-offs and transfer out
+83,481
+23,409
+38,077
+Exchange rate contracts:
+Charge
+43,282
+(40,413)
+(2,869)
+― to stage 3
+(592)
+5,475
+(4,883)
+― to stage 2
+(1,417)
+(17,972)
+19,389
+― to stage 1
+Transfer:
+360,935
+Total
+109,683
+Other movements
+Measured at FVTPL:
+521,393
+of hedged items
+Accumulated adjustments to the fair value
+Carrying amount of
+hedged items
+31 December 2018
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+(104)
+213
+19,994
+1,706
+16,276
+Assets
+2,012
+Assets
+213
+19,994
+1,706
+Total
+five years
+five years
+16,276
+2,012
+Interest rate swap contracts
+one year
+Over
+Liabilities
+(104)
+Bonds
+24,796
+Liabilities
+(3,500)
+193
+Annual Report 2018
+/Due to customers
+Reverse repurchase agreements
+/Certificates of deposit
+customers
+Debt securities issued
+Loans and advances to
+measured at FVOCI/
+Line items in the statement
+of financial position
+Financial investments
+measured at FVTPL/
+Financial investments
+(37)
+(606)
+(7,443)
+39,617
+11
+(379)
+(3,943)
+13,405
+Others
+(185)
+1,416
+Loans
+Liabilities
+(48)
+(42)
+Assets
+but within
+but within
+three
+months
+one year
+months
+Over
+but within
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2018
+Bank
+(219)
+830
+49,811
+13,084
+34,715
+2,012
+(219)
+830
+49,811
+one year
+Notes to the Financial Statements
+five years
+Total
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2017
+(100)
+124
+16,482
+1,401
+11,493
+1,875
+1,713
+(100)
+Liabilities
+Assets
+124
+16,482
+1,401
+11,493
+1,875
+1,713
+Interest rate swap contracts
+five years
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Net investment hedges
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+only in limited circumstances. Hedging is undertaken using deposits taken in the same currencies as the functional currencies
+of related branches and subsidiaries which are accounted for as hedges of certain net investment in foreign operations.
+As at 31 December 2018, an accumulated net loss from the hedging instrument of RMB333 million was recognised in
+"Other comprehensive income" on net investment hedges (as at 31 December 2017 net accumulated gain: RMB708 million).
+As at 31 December 2018, there was no ineffectiveness in profit or loss that arises from the net investment hedges
+(31 December 2017: Nil).
+207,123
+161,467
+208,641
+164,130
+207,123
+161,467
+Banks
+Reverse repurchase agreements-bills:
+Measured at amortised cost:
+2017
+2018
+2017
+2018
+Bank
+Group
+Reverse repurchase agreements comprise reverse repurchases of bills, securities and cash advanced as collateral on securities
+borrowing.
+22. REVERSE REPURCHASE AGREEMENTS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+194
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional). The credit risk-weighted assets of the Group's derivative financial instruments
+include counterparty credit default risk-weighted assets, credit value adjustment risk-weighted assets and central
+counterparties credit risk-weighted assets.
+45,993
+164,130
+40,062
+208,641
+Banks
+986,631
+559,255
+88
+(37)
+(40)
+Less: Allowance for impairment losses
+202
+Accrued interest
+58,045
+securities borrowing
+Cash advanced as collateral on
+542,122
+357,212
+721,463
+397,626
+382,297
+328,594
+532,323
+344,993
+Other financial institutions
+159,825
+28,618
+189,140
+52,633
+Reverse repurchase agreements-securities:
+750,763
+78,922
+1,111
+952
+3,045
+4,119
+Interest rate derivatives
+13,535
+11,126
+20,809
+16,456
+Currency derivatives
+29,909
+21,817
+55,843
+45,656
+risk-weighted assets
+2017
+2018
+2017
+2018
+Bank
+Group
+Counterparty credit default
+The credit risk-weighted assets in respect of the above derivatives of the Group and the Bank as at the end of the reporting
+date are as follows:
+Counterparty credit risk-weighted assets of derivative financial instruments
+769
+71,738
+Credit derivatives
+29
+1,942
+4,267
+3,639
+risk-weighted assets
+Central counterparties credit
+14,973
+16,303
+18,812
+22,443
+risk-weighted assets
+Credit value adjustment
+3,374
+1,883
+15,567
+15,374
+risk-weighted assets
+Netting settled credit default
+12,231
+7,855
+16,393
+9,706
+Commodity derivatives and others
+1
+1
+31 December 2018
+Stage 2
+| | |OI
+Stage 3
+448
+Over three
+Fair values
+Notional amounts with remaining life of
+2018
+Bank
+(67)
+229
+15,723
+2,081
+7,217
+Over
+2,808
+41
+101
+46
+8
+47
+Equity derivative
+(45)
+36
+2,764
+730
+3,617
+Within
+months
+one year
+675
+79,455
+824
+1,541
+56,262
+20,828
+(603)
+675
+79,455
+1,541
+56,262
+20,828
+Currency swap contracts
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+one year
+months
+but within
+but within
+three
+(22)
+152
+12,858
+2,081
+12,074
+49,823
+709
+(283)
+192
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+2017
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+but within
+but within
+Over
+months
+one year
+five years
+30,670
+(603)
+5,366
+(283)
+6,441
+2,383
+417
+1,617
+Currency swap contracts
+1,953
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+months
+but within
+one year
+one year
+but within
+Over
+five years
+five years
+Total
+Interest rate swap contracts
+1,713
+5,366
+30,670
+12,074
+49,823
+Assets
+709
+Liabilities
+1,713
+2017
+months
+Notional amounts with remaining life of
+Placements from banks and
+other financial institutions
+/Certificates of deposit
+(3,794)
+(42)
+(70,988)
+27,376
+(3,866)
+80
+(65,120)
+Others
+Debt securities issued
+Loans and advances to
+customers
+37
+25
+7,966
+Loans
+measured at amortised cost/
+Financial investments
+measured at FVOCI/
+Financial investments
+Line items in the statement
+of financial position
+19,410
+Bonds
+Assets
+Carrying amount of
+hedged items
+/Due to customers
+35
+/Other liabilities
+Fair value hedges
+IIIOI
+three
+Within
+Over
+Fair values
+Notional amounts with remaining life of
+Over three
+2018
+Group
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+(6)
+(8)
+(110)
+63
+104
+(71)
+2017
+2018
+Group
+Hedged items attributable to the hedged risk
+Hedging instruments
+(Loss)/gain arising from fair value hedges, net:
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates. Interest rate swaps are used as hedging instruments to hedge the interest risk of
+financial assets and financial liabilities, respectively.
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges for the current year (2017: Nil).
+five years
+(147)
+other comprehensive
+8
+2,466
+323
+190
+1,953
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+five years
+five years
+one year
+months
+Over
+but within
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Fair values
+(11)
+income
+Currency swap contracts
+730
+of hedging
+instruments on
+on other
+comprehensive
+income during
+the year
+Liabilities
+(5,868)
+Accumulated effect
+31 December 2018
+instruments
+Effect of hedging
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equities are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+191
+Annual Report 2018
+(56)
+23
+4,675
+323
+920
+1,953
+1,479
+(45)
+15
+2,209
+1,479
+Total
+824
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+one year
+but within
+but within
+three
+months
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2017
+(42,120)
+38,295
+6,063,613
+36,655
+526,300
+(4,956)
+1,044
+Liabilities
+231,462
+Exchange rate contracts:
+1,739,995
+Assets
+3,524
+77,775
+1,789,628
+1,794,259
+(362)
+50,692
+153
+32,173
+18,366
+Option contracts written
+2,292
+86,402
+230
+50,274
+35,898
+Option contracts purchased
+(44,370)
+44,944
+3,528,092
+3,524
+77,392
+1,707,181
+Forward and swap contracts
+47,236
+165
+2,673,530
+2,388
+93,249
+2,513,416
+2,509,995
+(652)
+67,091
+1,346
+38,133
+27,612
+Option contracts written
+(35,101)
+34,860
+732
+64,040
+1,366
+36,489
+26,185
+Option contracts purchased
+4,987,917
+2,388
+90,537
+2,438,794
+2,456,198
+Total
+5,119,048
+162,337
+2,827,128
+35,592
+Interest rate contracts:
+68,960
+Commodity derivatives and others
+(1,411)
+1,659
+713,103
+34,267
+432,886
+151,375
+94,575
+(3)
+3
+510
+295
+215
+(1,408)
+1,656
+712,593
+33,972
+432,671
+151,375
+94,575
+Forward contracts
+Swap contracts
+(35,753)
+(44,732)
+3,665,186
+21,142
+Within
+three
+months
+but within
+one year
+but within
+Over
+months
+one year
+five years
+Over
+five years
+Assets
+Liabilities
+Interest rate swap contracts
+1,374
+344
+15,216
+1,855
+18,789
+91
+Total
+Over three
+Fair values
+Notional amounts with remaining life of
+35,182
+155,293
+1,451
+(1,114)
+82
+225,621
+5,169
+(836)
+158,710
+38,706
+4,046,100
+53,856
+(46,682)
+190
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts and equity derivatives that are
+used to protect against exposures to variability of future cash flows.
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out below.
+Group
+2018
+(30)
+Currency swap contracts
+58,117
+1,541
+three
+but within
+but within
+Over
+months
+one year
+five years
+five years
+471
+161
+0
+(200)
+(39)
+Balance at 31 December 2018
+184
+0
+248
+432
+198
+ICBC
+2,012
+one year
+80,853
+months
+Over
+824
+81,624
+692
+(613)
+Equity derivative
+51
+43
+94
+16
+(9)
+22,567
+58,461
+16,800
+2,679
+100,507
+799
+(652)
+2017
+Notional amounts with remaining life of
+Fair values
+Over three
+Within
+1,869,474
+30,746
+158,836
+1,979,210
+Commodity derivatives and others
+8,512
+Swap contracts
+Interest rate swap contracts
+Interest rate contracts:
+66,703
+Equity investments (i)
+to stage 2
+3,123
+190
+Total
+Stage 3
+Stage 2
+Stage 1
+2,933
+to stage 1
+Group
+Balance at 1 January 2018
+During the year, movements of the allowance for impairment losses on financial investments measured at FVOCI are as
+follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+202
+The Group designates part of non-trading equity investments as financial investments measured at FVOCI. As at
+31 December 2018, the fair value of such equity investments was RMB29,919 million. During the year, dividend
+income recognised for such equity investments was RMB229 million (including the dividend income of RMB1 million
+for the termination of such equity investments during the year). The value of the Group disposal of such equity
+investments was RMB25 million and the cumulative loss of transferring into retained earnings from other
+comprehensive income after disposal was RMB1 million during the year.
+(i)
+1,245,837
+Transfer:
+― to stage 3
+1
+(1)
+Transfer:
+2,891
+190
+2,701
+Balance at 1 January 2018
+Total
+Stage 3
+Stage 2
+Stage 1
+Bank
+1,910
+196
+92
+1,622
+Balance at 31 December 2018
+(1,385)
+172
+||||6
+166
+Other movements
+91
+(1,476)
+Charge/(Reverse)
+1,430,163
+Other investments
+307
+302,685
+195,339
+201,183
+202,787
+223,877
+380,287
+413,941
+Bank
+Group
+242,056
+2018
+Other investments:
+Unlisted
+Listed outside Hong Kong
+Equity investments:
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Analysed into:
+Debt securities:
+Unlisted
+235,641
+176,687
+22,610
+28,075
+29,919
+327
+27,748
+29,231
+688
+1,217,762
+1,399,937
+1,018,828
+1,060,108
+140,571
+216,471
+58,363
+123,358
+1,245,837
+1,430,163
+307
+28,075
+29,919
+1,217,762
+1,399,937
+20,606
+307
+Accrued interest
+122,110
+Banks and other financial institutions
+(200)
+(194)
+(6)
+Dispose
+(4)
+Reverse
+67
+67
+70
+€
+70
+645
+606
+39
+785
+678
+107
+At 1 January 2017
+Total
+investments
+Charge
+(194)
+(195)
+Other movements
+117,589
+119,398
+2,712
+2,712
+2017
+2018
+Bank
+ICBC
+208
+Unlisted investments, at cost
+Listed investments, at cost
+25. INVESTMENTS IN SUBSIDIARIES
+517
+412
+105
+646
+479
+167
+At 31 December 2017
+(5)
+(5)
+equity
+for-sale
+Held-to-
+maturity
+investments
+Total
+Group
+2017
+231,631
+277,129
+56,322
+101,820
+85,000
+85,000
+90,309
+90,309
+Bank
+Group
+2017
+Listed outside Hong Kong
+Unlisted
+Analysed into:
+Others (ii)
+Special government bond
+Huarong bonds (i)
+to stage 1
+120,301
+Public sector entities
+Bank
+Corporate entities
+22,004
+255,125
+investments
+investments
+equity
+maturity
+for-sale
+Held-to-
+Bank
+Available-
+Group
+Available-
+(g) Movements of allowance for impairment losses of held-to-maturity investments and
+available-for-sale equity investments measured at cost are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+207
+Annual Report 2018
+Others include financial and corporate bonds, debt investment plans, asset backed securities, asset management plans,
+wealth management products and trust plans with fixed or determinable payments. They will mature from January
+2018 to November 2032 and bear interest rates ranging from 2.00% to 7.50% per annum. During the year of 2017,
+the amounts which have been matured have been repaid without overdue history.
+As at 31 December 2017, the Bank received accumulated early repayments on the Huarong bonds amounting to
+RMB222,687 million.
+(ii)
+(i)
+231,631
+277,129
+209,627
+22,004
+- to stage 2
+Corporate entities
+Charge/(Reverse)
+2018
+Bank
+Group
+24. FINANCIAL INVESTMENTS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+199
+Annual Report 2018
+330,016
+218,302
+111,714
+At 31 December 2017
+2,219
+(71,118)
+(14,645)
+(56,473)
+Write-offs and other movements
+836
+48,435
+3,421,766
+3,386,243
+3,542,184
+120,395
+3,439,471
+Market value of listed debt securities
+2017
+53,554
+(f) Receivables
+The receivables are stated at amortised cost and comprise the following:
+(3,166)
+(3,166)
+Recoveries of loans and advances previously written off
+1,383
+As at 31 December 2017, the total carrying amount of held-to-maturity investments that the Group disposed prior to their
+maturity with remaining maturity more than three months was RMB11,661 million, which accounted for 0.33% of the total
+amount of the Group's held-to-maturity investments.
+92,886
+2018
+Financial investments measured
+5,428,233
+6,348,656
+5,756,704
+6,754,692
+231,631
+277,129
+(f)
+Receivables
+3,439,471
+3,542,184
+Held-to-maturity investments
+1,358,802
+1,496,453
+(d)
+Available-for-sale financial assets
+4,362,174
+4,519,182
+at FVTPL
+(a)
+805,347
+440,938
+740,645
+398,329
+2017
+Financial investments measured
+(b)
+1,430,163
+1,245,837
+Financial investments measured
+at amortised cost
+(c)
+at FVOCI
+(a) Financial investments measured at FVTPL
+4,793
+Bank
+Collectively
+Individually
+Bank
+340,482
+224,736
+115,746
+At 31 December 2017
+2,264
+(72,201)
+(15,170)
+(57,031)
+Write-offs and other movements
+838
+1,426
+Recoveries of loans and advances previously written off
+(3,189)
+(3,189)
+(169,935)
+Accreted interest on impaired loans
+65,557
+223,955
+289,512
+108,983
+15,113
+assessed
+124,096
+135,679
+294,031
+1,399
+(1,399)
+(50,768)
+(119,167)
+158,352
+27,532
+assessed
+At 1 January 2017
+Impairment loss:
+Group
+2017
+3,439,471
+3,542,184
+3,439,576
+(105)
+Bank
+Group
+3,542,351
+(167)
+2017
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Analysed into:
+Less: Allowance for impairment losses
+Debt securities
+Accreted interest on impaired loans
+(168,409)
+(118,696)
+― impairment allowances charged
+-impairment allowances transferred
+reversal of impairment allowances
+61,458
+218,152
+279,610
+108,512
+Total
+13,959
+156,823
+134,057
+290,880
+1,402
+(1,402)
+(49,713)
+122,471
+reversal of impairment allowances
+Group
+2018
+8
+10,086
+10,086
+Corporate entities
+Banks and other financial institutions
+Public sector entities
+Policy banks
+2017
+2018
+2017
+2018
+Bank
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Debt securities (analysed by type of issuers):
+FVTPL (mandatory)
+83,254
+47,414
+Other investments
+493,230
+293,824
+490,250
+69,785
+290,843
+353,601
+573,504
+338,257
+200
+ICBC
+Financial investments measured at
+585,736
+59,777
+69,785
+709
+103,391
+215,027
+122,791
+231,343
+Unlisted
+1,902
+1,428
+12,860
+8,135
+Listed outside Hong Kong
+2,193
+2,557
+2,668
+4,271
+Listed in Hong Kong
+Debt securities:
+Analysed into:
+83,931
+80,580
+Equity investments
+22,506
+1,292
+Funds and other investments
+4,052
+40,378
+146,815
+111,963
+805,347
+440,938
+740,645
+398,329
+30,091
+Bank
+92,506
+5,479
+67,312
+37,927
+8,015
+38,724
+8,830
+Corporate entities
+7,957
+14,708
+8,452
+16,984
+Banks and other financial institutions
+4,618
+7,175
+4,670
+7,229
+Public sector entities
+2,199
+2017
+2018
+2017
+Financial investments held for trading
+Debt securities (analysed by type of issuers):
+Governments and central banks
+78,542
+33,141
+24,153
+7,371
+Policy banks
+1,128
+2,228
+1,127
+24,468
+6,766
+55,178
+Equity investments
+8,539
+5,576
+Corporate entities
+6,966
+39,651
+6,966
+39,651
+Banks and other financial institutions
+2,953
+47
+2,953
+47
+Public sector entities
+30,729
+38,077
+30,729
+38,077
+5,484
+7,331
+Funds investments
+1,464
+72,796
+87,337
+60,072
+55,178
+Financial investments designated as at
+FVTPL
+Debt securities (analysed by type of issuers):
+Governments and central banks
+9,155
+10,590
+Policy banks
+60,072
+- impairment allowances charged
+-impairment allowances transferred
+Impairment loss:
+At 1 January 2017
+11
+(11)
+to stage 2
+to stage 1
+Transfer:
+1,256
+Total
+Stage 3
+83
+2
+Stage 2
+Stage 1
+1,171
+Balance at 1 January 2018
+Group
+During the year, movements of the allowance for impairment losses on financial investments measured at amortised cost are
+as follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+4,298,625
+4,489,622
+4,360,004
+Unlisted
+29,560
+2,170
+to stage 3
+29,560
+4,519,182
+4,362,174
+Market value of listed securities
+123,618
+61,497
+204
+2,170
+4,366,471
+(2)
+Charge
+2
+830
+Balance at 31 December 2018
+Other movements
+Charge
+to stage 3
+- to stage 2
+to stage 1
+Transfer:
+1,076
+24
+1,052
+Balance at 1 January 2018
+Total
+Stage 3
+Stage 2
+Stage 1
+325
+841
+38
+1,204
+Other movements
+21
+2
+2
+Balance at 31 December 2018
+1,504
+854
+125
+2,483
+Bank
+23
+336
+46,603
+36,855
+86,296
+3,557,040
+3,618,546
+Accrued interest
+Including: Huarong bonds (ii)
+Banks and other financial institutions
+Public sector entities
+Policy banks
+Including: Special government bond (i)
+Governments and central banks
+Debt securities (analysed by type of issuers):
+Bank
+Group
+2018
+(c) Financial investments measured at amortised cost
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+Other movements
+Balance at 31 December 2018
+(1)
+(1,487)
+89
+194
+1,407
+85,000
+90
+196
+(1,398)
+200
+1,693
+Allowance for impairment losses on financial investments measured at FVOCI is recognised in other comprehensive income
+without decreasing the carrying amount of financial investments presented in the statement of financial position, and any
+impairment loss or gain is recognised in the profit or loss. As at 31 December 2018, the financial investments measured at
+FVOCI included credit-impaired financial investments whose impairment provision have been fully charged.
+Annual Report 2018
+203
+||||6
+14,776
+85,000
+484,521
+Other investments:
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Debt securities:
+Analysed into:
+4,362,174
+4,519,182
+(2,288)
+(2,483)
+Less: Allowance for impairment losses
+4,364,462
+4,521,665
+3,000
+30,460
+3,000
+30,331
+129
+8,560
+4,003
+264,929
+236,600
+90,309
+90,309
+501,634
+35,914
+61,622
+60,698
+4,491,205
+4,361,462
+Other investments (iii)
+Accrued interest
+18,600
+830
+38
+1,204
+274
+749
+20,497
+Unlisted
+1,013
+2,967
+3,688
+Listed outside Hong Kong
+5
+3,615
+3,805
+Listed in Hong Kong
+Equity investments:
+107,486
+219,012
+138,319
+243,749
+280,222
+172,931
+4,663
+1,433
+284,885
+174,364
+7,331
+When impairment of an available-for-sale investment measured at fair value occurs, any impairment recognised is
+recorded in the carrying amount directly. As at 31 December 2017, the available-for-sale financial assets measured at
+fair value include impaired debt securities whose carrying amount was RMB85 million, and impaired equity investments
+whose impairment provision has been fully charged, with the accrual of impairment recognised in profit or loss of
+RMB22 million on available-for-sale debt securities; and the accrual of impairment recognised in profit or loss of
+RMB84 million on available-for-sale equity investments.
+206
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(e) Held-to-maturity investments
+Held-to-maturity investments are stated at amortised cost and comprise the following:
+Certain available-for-sale unlisted equity investments which do not have any quoted market prices and whose
+fair values cannot be measured reliably are stated at cost less any impairment. There is no active market for these
+investments and it is the Group's intention to dispose of them as opportunities arise. During the year of 2017, the
+carrying amount of these equity investments decreased by RMB71 million. The gain on disposal of these equity
+investments was RMB743 million.
+33,985
+1,292
+Listed in Hong Kong
+Total
+assessed
+Collectively
+Individually
+assessed
+Group
+During the year of 2017, movements of the allowance for impairment losses on loans and advances to customers are as
+follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Debt securities (analysed by type of issuers):
+(b) Financial investments measured at FVOCI
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+201
+Annual Report 2018
+398,329
+740,645
+1,462
+Listed outside Hong Kong
+1,104
+Unlisted
+532,504
+293,826
+Funds and other investments:
+520,341
+533,608
+295,288
+520,341
+290,843
+805,347
+440,938
+290,843
+23,294
+32,552
+18,631
+Equity investments analysed into:
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Debt securities analysed into:
+Less: Allowance for impairment losses of equity investments, at cost
+Others
+Debt for equity swaps
+At cost (ii)
+At fair value (i)
+Equity investments:
+Other debt instruments, at fair value
+Debt securities, at fair value (i)
+(i)
+Available-for-sale financial assets comprise the following:
+(d) Available-for-sale financial assets
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+6
+1,392
+2
+8
+66
+2,288
+(i)
+Listed in Hong Kong
+(ii)
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the Ministry of Finance of the People's Republic of China (the "MOF") to the Bank in 1998. The bond will mature in
+2028 and bears interest at a fixed rate of 2.25% per annum.
+The Huarong bonds are a series of long-term bonds issued by China Huarong Asset Management Co., Ltd.
+("Huarong") in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The
+proceeds from the issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are
+non-negotiable, with a tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank
+received a notice from the MOF that the maturity dates of the Huarong bonds were extended for another ten years
+and the interest rate remains unchanged. Additionally, the MOF will continue providing funding in support of the
+repayment of the principal and interest of the bonds. As at 31 December 2018, the Bank received accumulated early
+repayments amounting to RMB222,687 million.
+Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from January 2019 to November 2032 and bear interest rates ranging from 2.00% to
+7.50% per annum. During the year, the amounts which have been matured have been repaid without overdue history.
+Annual Report 2018
+205
+Notes to the Financial Statements
+(iii)
+Listed outside Hong Kong
+Unlisted
+(!!)
+(412)
+1,496,453
+1,358,802
+92,538
+187,684
+46,501
+126,430
+(479)
+1,186,773
+1,466,995
+1,324,817
+1,401
+3
+3,262
+1,430
+1,151,886
+to stage 3
+260
+720
+Market value of listed securities:
+Debt securities
+Equity investments
+2017
+Group
+Bank
+2,189
+1,466,995
+6,164
+20,292
+33,417
+3,002
+568
+1,292
+1,324,817
+27,990
+Governments and central banks
+Policy banks
+218
+122,507
+371,420
+Additions
+922
+11,993
+438
+4,722
+16,145
+34,220
+CIP transfer in/(out)
+3,104
+(5,333)
+67
+2,162
+75,993
+10,073
+23,009
+139,838
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+27. PROPERTY AND EQUIPMENT
+Group
+Cost:
+Office
+equipment
+Properties and
+buildings
+Disposals
+Construction
+Leasehold
+improvements
+and motor
+Aircraft and
+vehicles
+vessels
+Total
+At 1 January 2017
+in progress
+(1,347)
+(97)
+(136)
+114
+5,340
+Disposals
+(921)
+(471)
+(101)
+(4,200)
+(4,178)
+(9,871)
+At 31 December 2018
+151,145
+35,122
+10,954
+74,860
+171,072
+(9,553)
+4,099
+CIP transfer in/(out)
+70,361
+(8,345)
+(13,052)
+(22,977)
+At 31 December 2017 and 1 January 2018
+142,517
+29,572
+10,375
+211
+72,437
+382,663
+Additions
+5,450
+15,574
+680
+6,509
+42,148
+127,762
+Annual Report 2018
+118
+150
+16,308
+17,109
+Goodwill
+10,051
+11,139
+Carrying amount of the Group's interest in Standard Bank
+in the consolidated financial statements
+26,359
+28,248
+(ii)
+The following tables illustrate the summarised financial information of the associates that are not individually material
+to the Group:
+2018
+2017
+Aggregate amounts of the Group's share of those associates:
+Profit from continuing operations
+Group's share of net assets of the associate
+20.07%
+20.08%
+Group's effective interest
+51,265
+54,379
+13,362
+13,891
+2,153
+(2,500)
+Total comprehensive income
+Other comprehensive income
+15,515
+Dividends received from the associate
+7,356
+7,176
+Reconciled to the Group's interests in the associate
+Gross amounts of net assets of the associate attribute to the parent company
+81,215
+85,254
+11,391
+443,153
+Total comprehensive income
+40
+2018
+2017
+Aggregate carrying amount of individually immaterial joint ventures
+in the consolidated financial statements
+Aggregate amounts of the Group's share of those joint ventures:
+2,025
+3,855
+Profit from continuing operations
+Other comprehensive income
+Total comprehensive income
+All of the above joint ventures are accounted for using the equity method in the consolidated financial statements.
+150
+138
+0
+(20)
+The Group has interests in a number of individually immaterial joint ventures. The following tables illustrate the summarised
+financial information of the joint ventures that are not individually material to the Group:
+(b) Interest in joint ventures
+All of the above associates are accounted for using the equity method in the consolidated financial statements.
+28,586
+(285)
+287
+(245)
+(iii) Reconciliation of carrying amounts to the Group's total interests in the associates:
+2018
+2017
+Carrying amount of material associates-Standard Bank
+287
+26,359
+Carrying amount of individually immaterial associates
+Less: Allowance for impairment losses
+1,088
+(348)
+686
+(348)
+Interest in associates in the consolidated financial statements
+27,099
+28,248
+Accumulated depreciation and impairment:
+At 1 January 2017
+50,814
+(103)
+(6,265)
+(7,453)
+At 31 December 2017 and 1 January 2018
+140,213
+20,214
+9,570
+70,684
+240,681
+Additions
+1,421
+7,535
+578
+6,130
+15,664
+(90)
+(995)
+Disposals
+60
+Cost:
+At 1 January 2017
+137,283
+16,716
+9,295
+72,435
+235,729
+CIP transfer in/out)
+Additions
+6,720
+378
+4,454
+12,405
+CIP transfer in/out)
+3,072
+(3,132)
+853
+Total
+4,099
+114
+Industrial and Commercial Bank of China
+2018
+2018
+2017
+2018
+Name
+Principal
+registration
+Place of
+incorporation/
+Amount
+invested
+issued share/
+paid-in capital
+Percentage of equity interest % Voting rights %
+Nominal value of
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+100
+100
+100
+HKD36,379 million
+Disposals
+100
+100
+Industrial and Commercial Bank of China
+("ICBC International")
+100
+00
+(4,213)
+100
+banking
+(Asia) Limited ("ICBC Asia")
+Commercial
+Hong Kong, the PRC
+activities
+and operations
+by the Bank
+HKD46,930 million
+ICBC International Holdings Limited
+00
+vehicles
+Leasehold
+improvements
+At 31 December 2017 and 1 January 2018
+55,646
+41
+8,318
+56,475
+14,439
+134,919
+Depreciation charge for the year
+5,671
+868
+6,868
+6,908
+20,315
+Impairment charge for the year
+3,088
+(8,808)
+(1,480)
+(6,405)
+(101)
+41
+7,483
+55,597
+11,276
+125,211
+Depreciation charge for the year
+5,654
+3,088
+936
+4,085
+17,958
+Impairment charge for the year
+558
+558
+Disposals
+(822)
+7,283
+and motor
+Disposals
+(30)
+35,081
+1,798
+15,500
+147,581
+290,404
+212
+ICBC
+Bank
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Office
+equipment
+Properties and
+buildings
+Construction
+in progress
+90,444
+At 31 December 2018
+247,744
+113,323
+(3,983)
+(944)
+(5,573)
+At 31 December 2018
+60,701
+41
+9,156
+(616)
+59,360
+152,749
+Carrying amount:
+At 31 December 2017
+86,871
+29,531
+2,057
+15,962
+23,491
+10
+100
+100,307
+Chongqing,
+the PRC
+Toronto, Canada
+Commercial
+banking
+Commercial
+(Canada)
+Industrial and Commercial Bank of China
+100
+100
+100
+MYR833 million
+MYR833 million
+(Malaysia) Berhad
+Industrial and Commercial Bank of China
+97.86
+97.86
+97.86
+CAD178.66 million
+CAD158 million
+80
+80
+60
+RMB200 million
+RMB120 million
+Zhejiang, the PRC
+Commercial
+banking
+Chongqing Bishan ICBC Rural Bank Co., Ltd. *
+THB20,132 million
+100
+100
+100
+RMB100 million
+RMB100 million
+Industrial and Commercial Bank of China
+80
+80
+00
+60
+THB23,711 million
+banking
+Commercial
+Delaware and
+New York,
+United States
+Shanghai, the PRC
+Broker dealer
+(USA) NA
+Industrial and Commercial Bank of China
+80
+80
+80
+ARS1,345 million
+ARS3,505 million
+New York,
+United States
+Buenos Aires,
+Insurance
+Commercial
+(Argentina) S.A.("ICBC Argentina")
+ICBC PERU BANK
+100
+100
+RMB7,980 million
+USD306 million
+RMB12,505 million
+USD369 million
+80
+80
+(Thai) Public Company Limited
+banking
+Commercial
+banking
+("ICBC Thai")
+Industrial and Commercial Bank of China
+Financial Services LLC
+100
+100
+100
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+USD50 million
+0
+ICBC-AXA Assurance Co., Ltd. *
+60
+60
+60
+Industrial and Commercial Bank of China
+80
+USD50.25 million
+0
+60
+banking
+80
+80
+80
+RMB200 million
+RMB433 million
+Beijing, the PRC
+Fund
+Co., Ltd. *
+Industrial and Commercial Bank of China
+100
+100
+100
+EUR437 million
+EUR437 million
+Luxembourg
+50
+ICBC Credit Suisse Asset Management
+banking
+United Kingdom
+Investment
+banking
+100
+KZT8,933 million
+KZT8,933 million
+Almaty, Kazakhstan
+Commercial
+management
+Commercial
+(Almaty) Joint Stock Company
+100
+100
+100
+USD200 million
+USD200 million
+London,
+banking
+Commercial
+ICBC (London) PLC ("ICBC London")
+60
+(Europe) S.A.
+PT. Bank ICBC Indonesia ("ICBC Indonesia")
+100
+RMB18,000 million
+RMB11,000 million
+Tianjin, the PRC
+Leasing
+("ICBC Leasing")
+Industrial and Commercial Bank of China
+89.33
+89.33
+89.33
+MOP589 million
+MOP12,064 million
+Macau, the PRC
+Commercial
+(Macau) Limited ("ICBC Macau")
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd. *
+100
+100
+ICBC Financial Leasing Co., Ltd. *
+banking
+98.61
+98.61
+98.61
+IDR3,692 billion
+USD361 million
+Jakarta, Indonesia
+Commercial
+banking
+banking
+100
+100
+100
+RUB10,810 million
+RUB10,810 million
+Moscow, Russia
+Commercial
+Bank ICBC (Joint stock company)
+80
+100
+USD100 million
+Less: Allowance for impairment losses
+(348)
+(348)
+29,124
+32,441
+Shares listed outside Hong Kong, at cost
+(a) Interest in associates
+(i)
+Particulars of the Group's only material associate are as follows:
+Name
+Standard Bank Group Limited
+("Standard Bank") (i)
+Bank
+2018
+34,242
+32,789
+29,472
+11,175
+10,087
+2017
+흐흐
+27,099
+28,586
+(b)
+2,025
+3,855
+2017
+34,242
+29,124
+Group
+2018
+2017
+Share of net assets
+Goodwill
+19,385
+21,614
+32,441
+2018
+Percentage of
+Voting
+rights %
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts using the equity method in the Group's consolidated financial statements is as follows:
+2018
+2017
+Gross amounts of the associate
+Assets
+Liabilities
+Net assets
+Revenue
+Profit from continuing operations
+Other comprehensive income
+1,013,117
+1,070,509
+918,299
+970,202
+94,818
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+210
+Place of
+31 December 31 December
+31 December
+incorporation/
+2018
+20.08
+2017
+2018
+equity interest %
+registration
+20.07
+20.08
+Johannesburg, Commercial banking
+Republic of
+South Africa
+(i)
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the
+Group to widen its customer base in Africa.
+The market value of the Group's investment in Standard Bank amounts to RMB27,677 million as at 31 December 2018
+(31 December 2017: RMB33,564 million).
+Principal
+activities
+Group
+Interest in joint ventures
+Interest in associates
+Auckland,
+New Zealand
+and investment
+banking
+Commercial
+banking
+("ICBC New Zealand")
+Industrial and Commercial Bank of China
+100
+100
+100
+MXN1,597 million
+MXN1,597 million
+Mexico S.A.
+ICBC Turkey Bank Anonim
+92.84
+92.84
+92.84
+(New Zealand) Limited
+NZD234 million
+NZD234 million
+100
+USD100 million
+Argentina
+Lima, Peru
+banking
+Commercial
+banking
+Commercial
+Industrial and Commercial Bank of China
+(Brazil) S.A.
+100
+100
+TRY860 million
+10
+Real202 million
+Real202 million
+Sao Paulo, Brazil
+banking
+Commercial
+Industrial and Commercial Bank of China
+100
+100
+100
+USD425 million
+Mexico City,
+Mexico
+Istanbul, Turkey
+Commercial
+banking
+Commercial
+100
+EUR100 million
+EUR100 million
+Vienna, Austria
+Commercial
+banking
+*
+100
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+Annual Report 2018
+209
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Investments in associates and joint ventures comprise the following:
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+Notes to the Financial Statements
+ICBC Austria Bank GmbH
+Financial asset
+Sirketi ("ICBC Turkey")
+banking
+ICBC Standard Bank PLC ("ICBC Standard")
+60
+60
+60
+USD1,083 million
+investment
+USD839 million
+100
+100
+10
+100 RMB12,000 million
+RMB12,000 million
+London,
+United Kingdom
+Nanjing, the PRC
+Banking
+ICBC Financial Asset Investment Co., Limited*
+HKD4,882 million Hong Kong, the PRC
+HKD4,882 million
+As at
+31 December
+(401)
+(944)
+Allowance for impairment losses
+Deferred income tax liabilities:
+(assets)
+tax liabilities/
+(2,012)
+temporary
+differences
+differences
+temporary
+Deferred
+income
+(deductible)
+As at 31 December 2017
+Taxable/
+Deferred
+income tax
+liabilities/
+(assets)
+(502)
+Change in fair value of financial instruments
+measured at FVTPL
+973
+4,053
+575
+2,272
+(38)
+(367)
+Others
+financial assets
+Change in fair value of available-for-sale
+900
+3,592
+measured at FVOCI
+Change in fair value of financial instruments
+143
+572
+(deductible)
+As at 31 December 2018
+Taxable/
+48,392
+193,552
+Change in fair value of financial instruments
+(2,368)
+(9,491)
+147
+705
+measured at FVTPL
+Change in fair value of financial instruments
+37,475
+150,493
+52,438
+210,624
+Allowance for impairment losses
+Deferred income tax assets:
+tax assets/
+(liabilities)
+temporary
+differences
+measured at FVOCI
+5,492
+(14,248)
+Change in fair value of available-for-sale
+58,375
+234,902
+(3,373)
+(13,561)
+3,101
+11,788
+Others
+6,910
+27,640
+6,508
+26,033
+Accrued staff costs
+9,748
+38,471
+financial assets
+(3,819)
+tax assets/
+(liabilities)
+1,217
+433
+47,250
+188,604
+56,220
+224,629
+(4,126)
+(16,584)
+(b) Movements of deferred income tax
+2,622
+Others
+6,910
+27,640
+6,508
+26,033
+Accrued staff costs
+10,036
+Group
+Deferred income tax assets:
+As at
+financial instruments
+Change in fair value of
+52,438
+44,729
+7,254
+37,475
+losses
+Allowance for impairment
+2018
+Recognised in
+equity
+Recognised in
+profit or loss
+As at
+1 January
+2018
+Impact of
+adopting
+IFRS 9
+2017
+31 December
+10,116
+40,057
+financial assets
+Change in fair value of available-for-sale
+differences
+temporary
+income
+Deferred
+(taxable)
+income
+(taxable)
+Deductible/
+As at 31 December 2017
+As at 31 December 2018
+Deductible/
+Deferred
+Bank
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+215
+Annual Report 2018
+tax assets/
+(liabilities)
+1,674
+temporary
+differences
+Deferred income tax assets:
+(3,923)
+(15,664)
+measured at FVOCI
+Change in fair value of financial instruments
+(2,369)
+(9,495)
+103
+442
+measured at FVTPL
+Change in fair value of financial instruments
+36,719
+146,986
+50,910
+203,782
+Allowance for impairment losses
+tax assets/
+(liabilities)
+differences
+temporary
+income
+At 31 December 2017
+Carrying amount:
+126,830
+58,081
+8,616
+41
+85,113
+60,092
+(4,520)
+(3,878)
+(30)
+(612)
+Disposals
+13,056
+At 31 December 2018
+20,173
+1,707
+15,394
+Bank
+Group
+The carrying value of the Group's and the Bank's properties and buildings is analysed based on the remaining terms of the
+land leases as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+213
+Annual Report 2018
+124,548
+14,949
+1,484
+23,346
+84,769
+At 31 December 2018
+122,387
+6,669
+783
+5,604
+Depreciation charge for the year
+41
+50,095
+At 1 January 2017
+Accumulated depreciation and impairment:
+251,378
+73,030
+10,100
+23,387
+144,861
+At 31 December 2018
+(4,967)
+(3,898)
+(48)
+(149)
+(872)
+7,096
+2018
+54,408
+Depreciation charge for the year
+118,294
+55,290
+7,863
+41
+55,100
+At 31 December 2017 and 1 January 2018
+(6,887)
+(6,205)
+(98)
+(584)
+Disposals
+13,541
+7,087
+865
+5,589
+111,640
+2017
+2018
+2017
+1,628
+2,029
+1,653
+86,871
+2,054
+90,444
+10
+2
+35
+27
+1,618
+2,027
+1,618
+2,027
+Held in the PRC (other than Hong Kong)
+Held overseas
+Short-term leases (less than 10 years):
+65,600
+84,769
+64,378
+85,113
+As at 31 December 2018, the net carrying value of aircraft and vessels leased out by the Group under operating leases was
+RMB147,581 million (31 December 2017: RMB113,323 million).
+Deferred
+(taxable)
+Deductible/
+Deferred
+income
+(taxable)
+As at 31 December 2017
+As at 31 December 2018
+Deductible/
+Group
+(a) Analysed by nature
+28. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+214
+As at 31 December 2018, the net carrying value of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB90,887 million (31 December 2017: RMB68,355 million).
+As at 31 December 2018, the process of obtaining the title for the Group's properties and buildings with an aggregate net
+carrying value of RMB10,539 million (31 December 2017: RMB12,850 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+measured at FVTPL
+66,086
+33
+202
+53
+57
+633
+745
+Held overseas
+184
+843
+869
+Held in Hong Kong
+17,630
+18,121
+17,656
+18,148
+Held in the PRC (other than Hong Kong)
+Long-term leases (over 50 years):
+19,762
+68,628
+19,132
+17,885
+30
+458
+257
+Held overseas
+163
+73
+212
+124
+Held in Hong Kong
+65,404
+64,275
+65,416
+68,247
+Held in the PRC (other than Hong Kong)
+Medium-term leases (10 to 50 years):
+18,362
+(2,368)
+7,709
+(1,791)
+57,077
+9,827
+47,250
+2,622
+(15)
+(771)
+7,640
+3,408
+(4,126)
+Others
+6,508
+(402)
+6,910
+6,910
+7,534
+(8,497)
+56,220
+Deferred income tax assets:
+2017
+31 December
+Recognised
+in equity
+Recognised in
+profit or loss
+2017
+1 January
+As at
+As at
+Others
+Accrued staff costs
+financial assets
+Change in fair value of available-for-sale
+measured at FVTPL
+Change in fair value of financial instruments
+Allowance for impairment losses
+Accrued staff costs
+(10,116)
+10,116
+financial assets
+7,307
+36,719
+Allowance for impairment losses
+Deferred income tax assets:
+2018
+31 December
+As at
+Recognised
+in equity
+Recognised in
+profit or loss
+2018
+IFRS 9
+2017
+As at
+1 January
+577
+31 December
+44,026
+28,066
+6,884
+Change in fair value of financial
+available-for-sale
+Change in fair value of
+(3,923)
+(8,482)
+4,559
+4,559
+measured at FVOCI
+financial instruments
+Change in fair value of
+103
+1,929
+(1,826)
+543
+(2,369)
+instruments measured at FVTPL
+50,910
+8,653
+36,719
+(2,388)
+Interest receivable
+8,956
+9,299
+Goodwill (i)
+460
+844
+8,217
+10,555
+Advance payments
+9,973
+10,584
+10,274
+10,884
+Repossessed assets
+18,228
+2,624
+17,437
+126,606
+Others
+ICBC
+483,090
+(4,502)
+118,644
+9,767
+487,592
+273,602
+(3,833)
+269,769
+571,669
+380,404
+(4,836)
+(4,120)
+Less: Allowance for impairment losses
+576,505
+384,524
+10,289
+25,749
+28,989
+1,836
+As at
+18,280
+Land use rights
+10,762
+9,154
+27,334
+(4,126)
+(34)
+598
+(4,690)
+6,910
+(116)
+7,026
+10,116
+10,796
+(680)
+(2,369)
+19
+47,250
+17,464
+The Group and the Bank did not have significant unrecognised deferred income tax assets or liabilities at the end of the
+reporting period.
+Group
+116,820
+98,332
+138,501
+122,318
+Settlement accounts
+213,700
+134,280
+239,922
+182,391
+Precious metals
+2017
+2018
+2017
+2018
+Bank
+29. OTHER ASSETS
+Bank
+Impact of
+adopting
+Notes to the Financial Statements
+As at
+As at
+1 January
+Impact of
+adopting
+31 December
+As at
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Recognised in
+Notes to the Financial Statements
+financial assets
+available-for-sale
+Change in fair value of
+measured at FVOCI
+financial instruments
+Change in fair value of
+Others
+2017
+IFRS 9
+2018
+financial assets
+Change in fair value of available-for-sale
+Allowance for impairment losses
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Others
+Accrued staff costs
+financial assets
+Change in fair value of available-for-sale
+measured at FVTPL
+Change in fair value of financial instruments
+Allowance for impairment losses
+Deferred income tax assets:
+2018
+Recognised in 31 December
+equity
+profit or loss
+measured at FVTPL
+financial instruments
+Change in fair value of
+losses
+Accrued staff costs
+(9,748)
+9,748
+financial assets
+available-for-sale
+Change in fair value of
+(3,819)
+(8,252)
+4,433
+4,433
+measured at FVOCI
+financial instruments
+Change in fair value of
+147
+1,938
+6,910
+Others
+6,910
+Others
+Allowance for impairment
+Deferred income tax liabilities:
+ICBC
+216
+58,375
+(8,263)
+6,508
+3,101
+(11)
+(1,217)
+8,028
+58,610
+10,218
+48,392
+4,329
+7,702
+(3,373)
+(402)
+(502)
+Deferred income tax liabilities:
+(496)
+Recognised in
+profit or loss
+2017
+1 January
+As at
+As at
+48,392
+Recognised in
+10,695
+28,398
+(3,373)
+(26)
+6
+(3,886)
+6,910
+9,299
+31 December
+equity
+2017
+217
+Annual Report 2018
+433
+(158)
+(13)
+604
+973
+124
+849
+(38)
+(158)
+120
+(502)
+(137)
+(365)
+(116)
+7,026
+539
+10,721
+6
+433
+(398)
+9,748
+-
+38
+(38)
+973
+900
+938
+143
+(401)
+143
+(38)
+(38)
+95
+439
+(160)
+973
+575
+1,217
+(973)
+(2,368)
+17
+938
+37,475
+8,859
+28,616
+2017
+(2,385)
+Recognised in
+equity
+Recognised in
+profit or loss
+2017
+1 January
+As at
+As at
+31 December
+ICBC
+products
+(1)
+11,480
+10,758
+precious metals
+10,758
+Financial liabilities related to
+2017
+11,480
+2018
+60,183
+2018
+Bank
+Group
+Interbank wealth management
+30. FINANCIAL LIABILITIES DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash
+flow projections are based on financial forecasts approved by management of the subsidiaries. The average growth
+rates are projected based on the similar rates which do not exceed the long-term average growth rate for the business
+in which the CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+As indicated by the impairment tests, goodwill arising from business combinations is not impaired and thus, no
+impairment loss was recognised.
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+(i)
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+228
+2017
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+Dividend setting mechanism
+167,132
+225,992
+245,832
+335,383
+917
+1,404
+Accrued interest
+78,700
+108,904
+Subsidiaries
+167,132
+225,075
+167,132
+225,075
+The Bank
+617,842
+526,940
+499,291
+436,275
+(In RMB)
+Issue date
+Name
+Coupon
+Ending
+balance
+Amount
+Issue Price
+Other debt securities issued by
+As approved by the PBOC and the former CBRC, the Bank issued callable subordinated bonds through open market
+bidding in 2009, 2010, 2011, 2012, 2014 and 2017. Approved by the PBOC, these subordinated bonds were traded in the
+bond market among banks. The relevant information on these subordinated bonds is set out below:
+(1) Subordinated bonds and Tier 2 Capital Notes
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+221
+Annual Report 2018
+As at 31 December 2018, the amount of debt securities issued due within one year was RMB92,045
+million (31 December 2017: RMB41,820 million).
+The Bank:
+(In RMB)
+269,143
+281,108
+35. DEBT SECURITIES ISSUED
+18,894,447
+20,646,928
+19,562,936
+21,408,934
+216,740
+222,461
+288,279
+268,855
+288,554
+268,914
+Accrued interest
+Others
+8,913,202
+10,009,296
+Group
+Bank
+2018
+2017
+282,459
+3,435
+3,473
+Accrued interest
+11,965
+269,143
+269,864
+273,299
+269,143
+Subsidiaries
+The Bank
+(1)
+Tier 2 Capital Notes issued by
+Subordinated bonds and
+2017
+2018
+269,864
+9,122
+9,384,186
+(In RMB)
+Value date
+(v)
+13/07/2012
+13/06/2027
+13/06/2012
+4.99%
+20,000
+20,000
+100 Yuan
+11/06/2012
+12 ICBC 01 Bond
+(iv)
+17/01/2012
+30/12/2026
+30/12/2011
+5.50%
+14 ICBC 01 Bond
+04/08/2014
+100 Yuan
+20,000
+(vii)
+10/11/2017
+08/11/2027
+08/11/2017
+4.45%
+44,000
+44,000
+50,000
+100 Yuan
+17 ICBC 01 Bond
+(vi)
+24/09/2014
+05/08/2024
+05/08/2014
+5.80%
+20,000
+06/11/2017
+rate
+50,000
+29/12/2011
+10 ICBC 02 Bond
+(i)
+20/08/2009
+20/07/2024
+20/07/2009
+4.00%
+24,000
+24,000
+100 Yuan
+16/07/2009
+09 ICBC 02 Bond
+(million)
+(million)
+Circulation date Notes
+Maturity date
+10/09/2010
+100 Yuan
+16,200
+16,200
+11 ICBC 02 Bond
+(!!!)
+30/08/2011
+30/06/2031
+30/06/2011
+5.56%
+38,000
+100 Yuan
+38,000
+29/06/2011
+11 ICBC 01 Bond
+(ii)
+03/11/2010
+14/09/2025
+14/09/2010
+4.10%
+100 Yuan
+10,581,241
+4,643,818
+5,361,695
+Banks and other financial institutions
+Money market takings:
+1,151,039
+1,255,514
+1,214,601
+1,328,246
+55,018
+58,760
+1,654
+2,258
+107,713
+123,317
+operating outside Mainland China
+Accrued interest
+Banks and other financial institutions
+1,096,021
+1,195,100
+operating in Mainland China
+128,015
+141,055
+20,440
+1,596,232
+1,644,147
+1,706,549
+445,193
+388,633
+491,948
+486,249
+1,814,495
+1,106,888
+9,554
+388,171
+358,639
+350,893
+346,186
+operating outside Mainland China
+Accrued interest
+Banks and other financial institutions
+57,022
+12,048
+32. REPURCHASE AGREEMENTS
+1,202,671
+Deposits:
+(1)
+73,852
+78,737
+89,361
+87,400
+10,228
+6,369
+Other
+2,919
+8,192
+2,285
+(2)(b)
+Debt securities
+60,175
+67,257
+(2)
+The principal-guaranteed interbank wealth management products issued by the Group and the financial assets in which
+the aforesaid products form parts of a group of financial instruments that are managed together on a fair value basis, and
+are classified as financial liabilities and financial assets designated as at FVTPL, respectively. As at 31 December 2018, the
+fair value of the interbank wealth management products was approximately the same as the amount that the Group would
+be contractually required to pay to the holders of the wealth management products upon maturity (31 December 2017:
+approximately the same).
+Financial liabilities related to precious metals and issued debt securities have been matched with precious metals and
+derivative as part of a documented risk management strategy to mitigate market risk, such as interest rate risk. An accounting
+mismatch would arise if these financial liabilities were accounted at amortised cost, whereas the related precious metals and
+derivative were measured at fair value with movements in the fair value taken through the statement of profit or loss. By
+designating these financial liabilities at FVTPL, the movement in their fair values is recorded in the statement of profit or loss.
+(a)
+2017
+2018
+2017
+2018
+Bank
+Group
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Banks and other financial institutions
+operating in Mainland China
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+219
+Annual Report 2018
+There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value of
+the financial liabilities arising from changes in credit risk were not considered significant during the year of 2018 and the
+year of 2017. The changes in fair value of the financial liabilities were mainly attributable to changes in other market factors.
+The debt securities including 5 equity-linked notes issued by ICBC Asia in 2016 and 2017 were classified as financial
+liabilities designated as at FVTPL. As at 31 December 2018, the fair value of the debt securities is lower than the
+amount that the Group would be contractually required to pay to the holder of these debt securities upon maturity by
+RMB720 million (31 December 2017: RMB364 million lower).
+As at 31 December 2018, the fair value of the financial liabilities related to precious metals was higher than the
+amount that the Group would be contractually required to pay to the holders by RMB266 million (31 December 2017:
+RMB156 million higher).
+(b)
+Financial Statements for the year ended 31 December 2018
+Repurchase agreements comprise repurchases of bills, securities and cash received as collateral on securities lending.
+Repurchase agreements-bills:
+Banks
+6,069,804
+6,405,136
+Corporate customers
+Demand deposits:
+2017
+2018
+2017
+2018
+Bank
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+34. DUE TO CUSTOMERS
+ICBC
+220
+6,287,825
+5,939,577
+Personal customers
+3,931,182
+4,748,525
+5,505,236
+Personal customers
+4,269,384
+4,647,601
+4,635,661
+5,076,005
+Certificates of deposit issued by Hong Kong Branch, Singapore Branch, Tokyo Branch, Seoul Branch, Luxembourg Branch,
+Doha Branch, Sydney Branch, New York Branch, Abu Dhabi Branch, Dubai (DIFC) Branch, London Branch, ICBC London,
+ICBC Asia, ICBC Macau and ICBC New Zealand were recognised at amortised cost.
+Corporate customers
+9,692,966
+10,152,037
+9,890,196
+10,336,318
+3,753,389
+3,864,212
+3,820,392
+Time deposits:
+810,610
+300,988
+1,046,338
+Banks
+Repurchase agreements-securities:
+10,603
+18,489
+10,626
+18,709
+10,603
+331,691
+18,489
+18,709
+2017
+2018
+Bank
+2017
+2018
+Group
+10,626
+17 ICBC 02 Bond
+854,724
+Other financial institutions
+16
+363
+514,801
+37,246
+15,375
+33. CERTIFICATES OF DEPOSIT
+Accrued interest
+on securities lending
+280,525
+Cash received as collateral
+282,483
+998,466
+480,354
+799,220
+787
+1,958
+143,742
+148,663
+800,007
+20/11/2017
+100 Yuan
+(2)(a)
+2014-12-10
+EUR
+Mandatory
+None
+17,991
+2,940
+147
+6.00% 20USD/Share
+Equity
+2014-12-10
+USD
+Shares in:
+Overseas Preference
+Conversion
+condition
+Equity
+6.00% 15EUR/Share
+40
+600
+Domestic Preference
+No
+No
+2 2 2
+Mandatory
+None
+12,000
+(million) Maturity
+12,000
+6.00% 100RMB/Share
+Equity
+2014-12-10
+RMB
+Mandatory
+None
+4,558
+120
+Shares in:
+(million)
+rate Issue price
+356,407
+356,407
+269,612
+269,612
+269,612
+269,612
+86,795
+86,795
+86,795
+86,795
+Nominal
+value
+(millions)
+value
+Number
+of shares
+Nominal
+356,407
+356,407
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+Annual Report 2018
+Conversion
+In RMB
+currency
+(million
+Dividend
+Accounting
+classification
+Issue date
+shares)
+Financial instrument
+outstanding
+Amount
+(a) Preference shares outstanding at the end of the year
+(1) Preference shares
+38. OTHER EQUITY INSTRUMENTS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+225
+In original
+RMB
+Total
+Less: Issue fees
+227
+Annual Report 2018
+Dividends will be paid annually.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Fixed rate for a certain period (5 years) after issuance.
+Dividend
+a.
+(ii) Domestic preference shares
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+g. Dividend setting mechanism
+USD Preference Shares: the First Redemption Date is five years after issuance
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+RMB Preference Shares: the First Redemption Date is five years after issuance
+Under the premise of obtaining the approval of the CBIRC and condition of redemption, the Group has right to redeem all or
+some of overseas preference shares in first call date and subsequent any dividend payment date. Redemption price is equal
+to issue price plus accrued dividend in current period.
+f.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+b.
+g.
+After five years have elapsed since the date of issuance (18 November 2015) under the premise of obtaining the approval of
+the CBIRC and compliance with regulatory requirements, the Group has right to redeem all or some of domestic preference
+shares. The redemption period of preference shares ranges from the start date of redemption to the date of full redemption
+or conversion. Redemption price is equal to book value plus accrued dividend in current period.
+Redemption
+f.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were
+converted to A shares, they may not be converted to Preference Shares again.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to
+A shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into H shares. If Preference Shares were
+converted to H shares, they may not be converted to Preference Shares again.
+e.
+Order of distribution and liquidation method
+d.
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Dividend stopper
+C.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+Conditions to distribution of dividends
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated debt, holders of
+convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will be
+senior to the ordinary shareholders.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to
+H shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+e.
+(i)
+Main Clauses
+(b)
+79,375
+174
+79,549
+757
+Overseas preference shares
+Mandatory No
+45,000
+45,000
+450
+4.50% 100RMB/Share
+Equity
+2015-11-18
+Book value
+None
+2017
+a.
+Fixed rate for a certain period (5 years for USD and RMB tranche and 7 years for EUR tranche) after issuance.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+226
+The USD, EUR and RMB Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for
+payment. The Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated
+debt, holders of convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the
+Group, but will be senior to the ordinary shareholders.
+Order of distribution and liquidation method
+d.
+Dividend
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+C.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The
+Group may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+Conditions to distribution of dividends
+b.
+Dividends will be paid annually.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Dividend stopper
+67,266
+2018
+Number
+of shares
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal
+amount with maturity due on 30 November 2020.
+On 2 December 2009, ICBC Standard issued a subordinated bond with an amount of USD500 million, bearing a fixed
+interest rate of 8.125% per annum and with maturity due on 2 December 2019.
+Subsidiaries:
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and
+Tier 2 Capital Notes during the current year (2017: Nil).
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+222
+On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal amount
+with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+(ix)
+(ix)
+22/09/2015
+21/09/2025
+21/09/2015
+13,741 4.875%
+On 10 September 2014, ICBC Macau issued a subordinated bond with an aggregate nominal amount of USD320 million,
+bearing a floating interest rate. The bond was issued at the price fixed at 99.298% of the nominal amount with maturity due
+on 10 September 2024.
+The above subordinated bonds and notes are separately listed on the London Stock Exchange Plc and the Stock Exchange of
+Hong Kong Limited. ICBC Standard, ICBC Asia and ICBC Macau have not had any defaults of principal or interest or other
+breaches with respect to the subordinated bonds and notes during the period (2017: Nil).
+(2) Other debt securities issued
+As at 31 December 2018, the Group's other debt securities issued mainly include:
+Annual Report 2018
+(viii) London Branch issued notes amounting to RMB29,316 million denominated in USD and EUR with maturities
+between 2019 and 2023 at floating interest rates. Of which, in 2018, London Branch issued notes amounting to
+RMB19,699 million denominated in USD and EUR with maturities in 2021 and 2023 at floating interest rates.
+(vii) Hong Kong Branch issued notes amounting to RMB27,739 million denominated in USD and HKD with maturities
+between 2019 and 2022 at fixed or floating interest rates. Of which, in 2018, Hong Kong Branch issued notes
+amounting to RMB4,408 million denominated in USD and HKD with maturities in 2020 and 2021 at fixed or floating
+interest rates.
+rates.
+Dubai (DIFC) Branch issued notes amounting to RMB30,877 million denominated in USD and EUR with maturities
+between 2019 and 2023 at fixed or floating interest rates. Of which, in 2018, Dubai (DIFC) Branch issued notes
+amounting to RMB13,270 million denominated in USD with maturities between 2020 and 2023 at floating interest
+Luxembourg Branch issued notes amounting to RMB26,905 million denominated in USD and EUR with maturities
+between 2019 and 2022 at fixed or floating interest rates. Of which, in 2018, Luxembourg Branch issued notes
+amounting to RMB755 million denominated in USD with maturities in 2019 at fixed or floating interest rates.
+New York Branch issued notes amounting to RMB56,095 million denominated in USD with maturities between
+2019 and 2027 at fixed or floating interest rates. Of which, in 2018, New York Branch issued notes amounting to
+RMB23,372 million denominated in USD with maturities in 2019 at fixed interest rates.
+2,000
+(vi)
+(iv)
+(iii) Tokyo Branch issued notes amounting to RMB3,332 million denominated in JPY and RMB with maturities in 2019 at
+fixed interest rates. Of which, in 2018, Tokyo Branch issued notes amounting to RMB1,898 million denominated in JPY
+with maturities in 2019 at fixed interest rates.
+Singapore Branch issued notes amounting to RMB36,513 million denominated in RMB and USD with maturities
+between 2019 and 2023 at fixed or floating interest rates. Of which, in 2018, Singapore Branch issued notes
+amounting to RMB11,871 million denominated in RMB and USD with maturities in 2021 and 2023 at fixed or floating
+interest rates.
+Sydney Branch issued notes and interbank deposit amounting to RMB13,641 million denominated in AUD, CHF,
+RMB, HKD, USD and GBP with maturities between 2019 and 2024 at fixed or floating interest rates. Of which, in
+2018, Sydney Branch issued notes amounting to RMB4,612 million denominated in AUD, USD and RMB at fixed or
+floating interest rates with maturities between 2019 and 2023 and issued interbank deposit amounting to RMB477
+million denominated in GBP with maturities in 2019.
+(ii)
+(i)
+The Bank:
+(v)
+223
+99.189
+15/09/2015
+The Bank has the option to redeem all or part of the bonds at face value on 20 July 2019. If the Bank does not exercise this
+option, the annual coupon rate will increase by 300 basis points thereafter.
+(viii)
+(vii)
+(vi)
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+(viii)
+23/11/2017
+22/11/2027
+22/11/2017
+4.45%
+44,000
+The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 5 August 2019 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 8 November 2022 upon the approval of the relevant regulatory
+authorities.
+Tier 2 Capital Notes
+15 USD
+Circulation date Note
+Maturity date
+Value date
+rate
+(In RMB)
+(million)
+USD
+Coupon
+Amount
+(Original
+Currency)
+(million)
+Issue Price
+Currency
+Issue date
+Name
+In 2015, the Bank issued Tier 2 Capital Notes denominated in USD. Approved by the Stock Exchange of Hong Kong Limited
+for listing and dealing, the Notes are listed on the Stock Exchange of Hong Kong Limited. The relevant information is set out
+below:
+The Bank has the option to redeem all of the bonds on 22 November 2022 upon the approval of the relevant regulatory
+authorities.
+Ending
+balance
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+1,361
+686
+Early retirement benefits
+825
+660
+1,440
+1,260
+Promissory notes
+11,298
+10,394
+11,906
+10,937
+Sundry tax payables
+23,557
+22,318
+686
+1,361
+Interest payable
+242,399
+A shares of RMB1 Yuan each
+H shares of RMB1 Yuan each
+Issued and fully paid:
+37. SHARE CAPITAL
+As at 31 December 2018, the amount of other liabilities due within one year was RMB376,731 million (31 December 2017:
+RMB550,736 million).
+(ii)
+(i) There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2018
+(31 December 2017: Nil).
+26,716
+436,376
+51,092
+52,647
+161,495
+603,500
+409,819
+169,898
+Others
+234,991
+247,348
+25,308
+subsidies payables (i)
+Salaries, bonuses, allowances and
+ICBC New Zealand issued medium and long-term debt securities and notes amounting to RMB2, 128
+million denominated in AUD and NZD with maturities between 2020 and 2023 at fixed or floating interest rates.
+Of which, in 2018, ICBC New Zealand issued medium and long-term bonds and notes amounting to RMB788
+million denominated in NZD with maturities between 2021 and 2023 at fixed or floating interest rates.
+ICBC International issued medium and long-term debt securities amounting to RMB14,043 million denominated in
+USD with maturities in 2019 and 2021 at fixed or floating interest rates. Of which, in 2018, ICBC International issued
+medium and long-term debt securities amounting to RMB4,787 million denominated in USD with maturities in 2021 at
+floating interest rates.
+(vi)
+(v)
+(iv)
+(iii) ICBC Thai issued debt securities amounting to RMB6,762 million denominated in THB with maturities between 2019
+and 2028 at fixed interest rates. Of which, in 2018, ICBC Thai issued debt securities of RMB3,319 million denominated
+in THB with maturities between 2019 and 2028 at fixed interest rates.
+Within China, in 2018, ICBCIL issued medium and long-term debt securities amounting to RMB3, 192
+million denominated in RMB with maturities in 2021 at fixed interest rates.
+In 2018, ICBC Argentina issued medium and long-term debt securities amounting to RMB240 million denominated in
+ARS with maturities in 2020 at floating interest rates.
+Hai Jiao 1400 limited, which is controlled by the Group, issued a private placement bond amounting to
+RMB971 million denominated in USD with maturity in 2025 at a fixed interest rate. The bond was guaranteed by The
+Export-Import Bank of Korea.
+Of which, Skysea International Capital Management Limited ("Skysea International"), which is controlled by
+the Group, issued guaranteed notes of USD750 million with a fixed interest rate of 4.875% in 2011. As at
+31 December 2018, Skysea International has redeemed USD153 million and the carrying amount of the Notes were
+RMB4,080 million. The Notes were guaranteed by Hong Kong Branch and were issued at the price fixed at 97.708%
+of the nominal amount with maturity due on 7 December 2021. By satisfying certain conditions, Skysea International
+has the option to redeem all of the notes at any time. The Notes were listed on the Stock Exchange of Hong Kong
+Limited.
+ICBC Financial Leasing issued medium and long-term debt securities and notes amounting to RMB68,074
+million denominated in RMB and USD with maturities between 2019 and 2027 at fixed or floating interest rates.
+ICBC Asia issued notes amounting to RMB17,814 million denominated in RMB, USD, EUR and HKD with maturities
+between 2020 and 2023 at fixed or floating interest rates. Of which, in 2018, ICBC Asia issued notes amounting to
+RMB16,434 million denominated in RMB, USD and HKD with maturities between 2020 and 2023 at fixed or floating
+interest rates.
+(i)
+Subsidiaries:
+The Head Office issued debt securities in Hong Kong amounting to RMB500 million denominated in RMB with
+maturity in 2019 at fixed interest rates.
+(ix)
+ICBCIL Finance Co., Ltd., which is controlled by the Group, issued medium and long-term notes amounting to
+RMB59,831 million denominated in RMB and USD, with maturities between 2019 and 2027 at fixed or floating
+interest rates. Of which, in 2018, ICBCIL Finance Co., Ltd. issued medium and long-term notes amounting to
+RMB10,252 million denominated in USD, with maturities between 2021 and 2023 at floating interest rates.
+By satisfying certain conditions, ICBCIL Finance Co., Ltd. has the option to redeem all of the notes at any time. Above
+notes were guaranteed by ICBC Financial Leasing Co., Ltd. and listed on the Irish Stock Exchange and the Stock
+Exchange of Hong Kong Limited respectively.
+(millions)
+224
+36. OTHER LIABILITIES
+34,088
+100
+34,715
+on credit commitments
+Allowance for impairment losses
+2017
+113,252
+126,555
+ICBC
+2018
+167,015
+Settlement accounts
+2018
+Bank
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+2017
+158,083
+44,000
+Redemption
+Contracted, but not provided for
+269,205
+786
+(968)
+(31,760)
+Total comprehensive income
+(31,790)
+(31,790)
+152
+786
+(968)
+(31,760)
+Other comprehensive income
+269,205 269,205
+Profit for the year
+(81) 601,857 872,290 1,909,929
+Subtotal profits equity
+(4,751)
+237,415
+(237)
+Dividends ordinary shares
+Dividends preference shares (note 17)
+259,374
+229,146
+156,204
+79,375
+356,407
+Balance as at 31 December 2017
+(13,066)
+13,066
+13,066
+Appropriation to general reserve (ii)
+(27,166)
+27,166
+27,166
+Appropriation to surplus reserve (i)
+(4,437) (4,437)
+(83,506)
+(83,506)
+2016 final (note 17)
+2,434
+156,204 201,980 246,308
+79,375
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+231
+Annual Report 2018
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+(h) Distributable profits
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+(g) Other reserves
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(f) Cash flow hedge reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+(e) Foreign currency translation reserve
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVOCI.
+(d) Investment revaluation reserve
+The general reserve balance of the Bank as at 31 December 2018 amounted to RMB271,201 million (31 December 2017:
+RMB259,374 million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+The statement of changes in equity of the Bank during the year are set out below.
+Reserves
+Foreign
+Issued
+reserves
+reserve
+reserve
+reserve
+Total
+Retained
+Other
+hedging
+(29,326)
+translation
+reserve
+reserve
+Capital Surplus
+share equity
+capital instruments
+356,407
+Balance as at 1 January 2017
+Cash flow
+Investment currency
+Other
+General revaluation
+reserve
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+(1,205)
+71
+Changes in fair value of equity instruments designated as at FVOCI
+Items that will not be reclassified to profit or loss:
+40. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+232
+Includes the appropriation made by overseas branches in the amount of RMB103 million (2017: RMB107 million).
+(ii) Includes the reversal made by overseas branches in the amount of RMB9 million (2017: appropriation in the amount of
+RMB20 million).
+(i)
+(54) 700,637 1,111,446 2,247,865
+(3,913)
+(294)
+19,926
+79,375 156,204 257,567 271,201
+356,407
+(11,827)
+(28,421)
+Less: Income tax effect
+28,421
+11,827
+Other comprehensive income recognised under equity method
+Others
+2017
+(43,742)
+Net loss from change in fair value of available-for-sale financial assets
+Less: Amount transferred to profit or loss from other comprehensive income
+Income tax effect
+(1,238)
+(211)
+Less: Amount transferred to profit or loss from other comprehensive income
+24,599
+(1,027)
+Credit losses of debt instruments measured at FVOCI
+(8,709)
+337
+Less: Amount transferred to profit or loss from other comprehensive income
+Income tax effect
+32,971
+Changes in fair value of debt instruments measured at FVOCI
+Items that may be reclassified subsequently to profit or loss:
+(29)
+3
+1,605
+(481)
+2,086
+2018
+11,827
+28,421
+(4,506) (4,506)
+632,964
+71
+(3,965)
+(1,205)
+(6,661)
+259,374
+229,146
+156,204
+79,375
+356,407
+Other comprehensive income
+Profit for the year
+Balance as at 1 January 2018
+22,665 (53,341) (30,676)
+22,665
+Impact of adopting IFRS 9
+610,299 1,013,320 2,059,401
+959,979 2,028,725
+282,044 282,044
+26,587
+911
+(85,823) (85,823)
+Balance as at 31 December 2018
+Appropriation to general reserve (ii)
+Appropriation to surplus reserve (i)
+Dividends-preference shares (note 17)
+2017 final (note 17)
+Dividends ordinary shares
+Total comprehensive income
+(3,965)
+27,425
+309,469
+27,425
+(125)
+52
+911
+26,587
+27,425
+(125)
+52
+282,044
+(631)
+(c) General reserve
+(iii) Other surplus reserve
+Interest rate
+4.25%
+Equity
+2016-07-21
+USD Perpetual bond
+classification
+Issue date
+outstanding
+In RMB
+currency
+(million
+Accounting
+Financial instrument
+In original
+Amount
+(a) Perpetual bond outstanding at the end of the year
+(2) Perpetual Bond
+Note: The RMB amounts of offshore preference shares in U.S. dollar and Euro on 31 December 2018 are translated at the spot
+exchange rate on issuance date.
+Issue price
+1,000USD/Piece
+79,549
+pieces)
+(million) Maturity
+(1)
+The perpetual bond will be written off up to the amount as directed by the Hong Kong Monetary Authority (hereinafter
+referred to as "HKMA") if the HKMA notifies ICBC Asia that in the opinion of the HKMA or a relevant government body,
+ICBC Asia would become non-viable if there is no written off of the principal. The perpetual bond also contain Hong Kong
+Bail-in Power. Each holder of the perpetual bond shall be subject to the exercise by the Hong Kong Resolution Authority to
+any or a combination of the following:
+The distribution shall be payable semi-annually, with the first distribution payment date being 21 January 2017. ICBC
+Asia has the right to cancel distribution payment (subject to the requirement as set out in the terms and conditions of the
+perpetual bond) and the distribution cancelled shall not be cumulative.
+On 21 July 2016, ICBC Asia issued Basel III-compliant Non-Cumulative Subordinated Additional Tier 1 Capital Securities
+(hereinafter referred to as "Perpetual Bond") in the aggregate amount of US$1 billion (equivalent to approximately
+RMB6,676 million net of related issuance costs). Fixed rate for the first 5 years after issuance of the bond is 4.25%. If
+perpetual bonds are not called, distribution will be reset based on the then prevailing 5-year USA national bonds yield plus a
+fixed initial spread (3.135 per cent. per annum) every 5 years.
+(b) Main Clauses
+Note: USD perpetual bond was issued by ICBC Asia, a subsidiary of the Bank.
+6,676
+Book value
+15
+Less: Issue fees
+6,691
+Total
+No
+Conversion
+Conversion
+condition
+None
+6,691 None
+1,000
+(million)
+45,000
+12,000
+4,558
+Financial instrument outstanding
+(c) Changes in preference shares outstanding
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+33,042
+22,380
+1,469
+2,314
+33,386
+23,024
+1,796
+2,921
+238
+ICBC
+607
+1 January 2018
+Amount (million shares)
+and
+In original currency (million)
+N/A
+45,000
+12,000
+600
+2,940
+17,991
+757
+450
+120
+(2)
+Total
+RMB
+EUR
+40
+147
+USD
+Domestic
+Preference Shares
+Overseas
+In RMB (million)
+31 December 2018
+RMB
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(3)
+the conversion of all or a part of the principal and/or distribution of the perpetual bond into shares of ICBC Asia or
+another person; and/or
+2,330,001
+2,095,333
+31 December
+2018
+1 January
+2018
+(2) Equity attribute to non-controlling interests of other equity instruments
+(1) Equity attribute to non-controlling interests of ordinary shares
+Total equity attribute to non-controlling interests
+2.
+(2) Equity attribute to other equity instruments holders of the parent company
+(1) Equity attribute to ordinary equity holders of the parent company
+Total equity attribute to equity holders of the parent company
+1.
+Equity instrument
+(3) Interests attribute to equity instruments' holders
+Note: The RMB amount of perpetual bond on 31 December 2018 is translated at the spot exchange rate on issuance date.
+6,691
+1,000
+2,009,282
+1
+2,243,950
+86,051
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(ii) Discretionary surplus reserve
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+230
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 28 March 2019, the total appropriation to surplus
+reserve of the Bank was RMB28,421 million (2017: RMB27,166 million), among which an appropriation of 10% of the
+profit of the Bank for the year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to
+the statutory surplus reserve, in the amount of RMB28,318 million (2017: RMB27,059 million) was approved and the total
+surplus reserve made by some overseas branches was RMB103 million (2017: RMB107 million) pursuant to the requirements
+of local authorities.
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+(i) Statutory surplus reserve
+(b) Surplus reserves
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(a) Capital reserve
+39. RESERVES
+14,882
+13,533
+14,882
+13,533
+86,051
+6,691
+1,000
+1
+Amount
+In RMB
+currency
+Amount
+instrument
+In original
+31 December 2018
+Movement during the year
+In original
+In original
+Financial
+1 January 2018
+(c) Changes in perpetual bond outstanding
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+229
+Annual Report 2018
+the amendment of the maturity, distribution payment date and/or the distribution amount of the perpetual bond.
+ICBC Asia has a call option to redeem all the outstanding perpetual bond from 21 July 2021 or any subsequent distribution
+payment date thereafter.
+outstanding
+(million pieces)
+(million)
+(million)
+Total
+6,691
+1,000
+1
+6,691
+1,000
+1
+USD Perpetual bond
+reduction or cancellation of all or a part of the principal and/or distribution of the perpetual bond;
+(million)
+(million pieces)
+(million)
+In RMB
+currency
+Amount
+In RMB
+currency
+(million)
+(million pieces)
+(million)
+10,879
+152 (31,790)
+Reserve from cash flow hedging instruments
+issued
+controlling
+Retained
+payable on
+securities
+Non-
+Interest
+Debt
+Equity
+Liabilities
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+236
+1,839,390
+279,212
+securities
+1,551
+14,882
+profits
+357,937
+(15,370)
+(16,219)
+849
+Interest paid on debt securities
+943,954
+943,954
+Proceeds from issuance of debt securities
+792
+-- - 792
+shareholders
+Capital injection by non-controlling
+Cash flows from financing activities
+1,313,782
+Total
+interests
+11,412
+940,663
+3,770
+Balance as at 1 January 2017
+617,842 1,206,666
+Balance as at 31 December 2018
+277,661
+(327)
+Dividends paid to non-controlling shareholders
+(968,222)
+(968,222)
+Repayment of debt securities
+125
+1,045,746
+(22,917)
+(23,175)
+258
+Interest paid on debt securities
+1,045,746
+Proceeds from issuance of debt securities
+125
+shareholders
+Capital injection by non-controlling
+Cash flows from financing activities
+Balance as at 1 January 2018
+Total
+1,587,601
+(327)
+Dividends paid on ordinary shares
+(85,823)
+(85,823)
+Total equity-related other changes
+(3,079)
+(3,079)
+Total liability-related other changes
+(3,079)
+(3,079)
+Amortisation of debt securities
+11,580
+Acquisition of non-controlling interests
+11,580
+(35,924)
+(202)
+(113,504)
+77,782
+Net cash flows from financing activities
+(4,506)
+(4,506)
+Dividends paid on preference shares
+The effect of changes in foreign exchange rates
+(194)
+(194)
+Repayment of debt securities
+Annual Report 2018
+44,433
+277,169
+321,627
+45,780
+306,846
+273,685
+Securities lending agreements
+44,433
+44,458
+45,780
+33,161
+Repurchase agreements
+liabilities
+assets
+Carrying
+amount of
+associated
+transferred
+associated
+237
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Securitisation transactions
+327
+644
+344
+Authorised, but not contracted for
+2017
+2018
+2017
+2018
+Carrying
+amount of
+Bank
+At the end of the reporting period, the Group and the Bank had capital commitments as follows:
+(a) Capital commitments
+45. COMMITMENTS AND CONTINGENT LIABILITIES
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+44. SHARE APPRECIATION RIGHTS PLAN
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability. As at 31 December 2018,
+the Group does not have carrying amount of transferred assets that did not qualify for derecognition and carrying amount of
+their associated liabilities (31 December 2017: Nil).
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the statement of financial position
+in accordance with the Group's continuing involvement and the rest is derecognised. The extent of the Group's continuing
+involvement is the extent of the risks and rewards undertaken by the Group with value changes of the transferred financial
+assets. The amount at the time of transfer of the original credit assets, which the Group determined that it has continuing
+involvement through acquiring some tranches, was RMB256,346 million as at 31 December 2018 (31 December 2017:
+RMB59,051 million) and the carrying amount of assets that the Group continues to recognise on the statement of financial
+position was RMB37,239 million as at 31 December 2018 (31 December 2017: RMB3,679 million).
+The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to
+structured entities which issue asset-backed securities to investors. The Group may acquire some asset-backed securities and
+fund shares at the subordinated tranche level and accordingly, may retain parts of the risks and rewards of the transferred
+credit assets. The Group would determine whether or not to derecognise the associated credit assets by evaluating the
+extent to which it retains the risks and rewards of the assets.
+Group
+Retained controlling
+interests
+13,533
+liabilities
+31 December 2017
+Carrying
+amount of
+transferred
+The effect of changes in foreign exchange rates
+81,835
+289
+(4,437)
+(4,437)
+(104,162)
+849
+184,859
+Net cash flows from financing activities
+Dividends paid on preference shares
+(83,506)
+(83,506)
+Dividends paid on ordinary shares
+(309)
+(309)
+Dividends paid to non-controlling shareholders
+(759,095)
+(759,095) --..
+(16,043)
+Amortisation of debt securities
+187
+(16,043)
+187
+31 December 2018
+Carrying
+amount of
+The following table analyses the carrying amount of the above mentioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities sold under repurchase agreements in the absence of
+default by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase
+or decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral in
+certain circumstance. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+Repurchase transactions and securities lending transactions
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+43. TRANSFERRED FINANCIAL ASSETS
+1,642,668
+13,565
+assets
+262,907
+261,043
+1,097,544
+4,619
+526,940
+Balance as at 31 December 2017
+Total equity-related other changes
+187
+(33,494)
+Total liability-related other changes
+1,864
+profits
+1,042,509
+187
+securities
+24,400
+24,400
+80,202
+80,202
+Asset-backed securities
+24,200
+24,200
+39,966
+39,966
+Trust plans
+267,379
+267,379
+324,773
+324,773
+Asset management plans
+200
+200
+468,132
+Wealth management products
+468,132
+327,098
+28,197
+17,792
+306,981
+23,191
+Financial
+investments
+measured at
+amortised cost
+31 December 2018
+Financial
+investments
+measured at
+FVOCI
+FVTPL
+Financial
+investments
+measured at
+ICBC
+234
+Asset-backed securities
+Trust plans
+Asset management plans
+Investment funds
+Group
+The following table sets out an analysis of the line items in the statement of financial position in which assets were
+recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+The maximum exposures to loss in the above investment funds, wealth management products, asset management
+plans, trust plans and asset-backed securities are the amortised cost or fair value of the assets held by the Group at the
+reporting date.
+327,098
+10,919
+10,919
+23,191
+(903)
+Others
+(8,752)
+3,325
+Foreign currency translation differences
+(757)
+488
+Other comprehensive income recognised under equity method
+939
+(53)
+(26)
+(11)
+965
+(42)
+Less: Income tax effect
+(Losses)/gains during the year
+issued
+531,559
+712
+27,809
+(41,378)
+Annual Report 2018
+23,191
+Investment funds
+exposure
+amount
+exposure
+amount
+Maximum
+31 December 2017
+Carrying
+11,769
+Maximum
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in
+the products issued by these structured entities. Such structured entities include investment funds, wealth management
+products, asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of investment products to investors.
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+41. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+233
+Group
+60,284
+31 December 2018
+Carrying
+14,001
+Cash on hand
+2017
+2018
+Note
+42. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+(a) Analysis of balances of cash and cash equivalents
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+235
+Annual Report 2018
+During the year of 2018, the amount of income received from such category of investment funds was RMBO.19 million.
+(2017: RMB12 million).
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2018 but matured
+before 31 December 2018 was RMB66 million (The aggregated amount of the investment funds sponsored and issued by
+the Group after 1 January 2017 but matured before 31 December 2017 was RMB42,400 million).
+During the year of 2018, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB1,387 million (2017: RMB4,107 million).
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2018 but matured before 31 December 2018 was RMB708,588 million (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2017 but matured
+before 31 December 2017 was RMB1,439,371 million).
+(c) Unconsolidated structured entities sponsored by the Group during the year in which
+the Group does not have an interest at 31 December 2018
+During the year of 2018, the amount of the average exposure of financing transactions through placements and reverse
+repurchase agreements from the Group with non-principal guaranteed wealth management products sponsored by the
+Group was RMB73,105 million (2017: RMB92,791 million). The transactions were conducted in the ordinary course of
+business under normal terms and conditions and at market rates.
+As at 31 December 2018, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,575,857 million (31 December 2017:
+RMB2,665,795 million) and RMB 1,308,500 million (31 December 2017: RMB1,296,300 million) respectively.
+19
+70,047
+75,214
+Balances with central banks other than restricted deposits
+Non-
+Group
+Equity
+5,917
+Liabilities
+Debt
+(b) Reconciliation of movements of liabilities to cash flows arising from financing activities
+1,520,330
+1,509,523
+779,672
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2018, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+686,237
+195,393
+290,067
+Placements with banks and other financial institutions with original
+maturity of three months or less
+292,694
+224,886
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+177,357
+19
+Reverse repurchase agreements with original maturity of three
+months or less
+(b) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest
+238,286
+242,461
+financial
+investments
+maturity
+Held-to-
+Financial
+assets held
+for trading or
+for-sale
+Available-
+31 December 2017
+5,917
+Notes to the Financial Statements
+Asset-backed securities
+Trust plans
+Asset management plans
+Wealth management products
+Investment funds
+51,894
+43,562
+designated
+assets
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Receivables
+32,689
+999
+as at FVTPL
+4,798
+18,549
+16,043
+8,157
+33,152
+228,063
+6,164
+418,653
+200
+1,500
+1,443
+7,976
+| | | | $ན
+54
+54
+927,432
+1,097,055
+2017
+2018
+Notes to the Financial Statements
+Balances at end of the year:
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2018, the MOF directly owned approximately 34.60% (31 December
+2017: approximately 34.60%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, including the subscription and redemption of government bonds issued by the MOF.
+Details of the major transactions are as follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(b) Operating lease commitments
+Operating lease commitments - Lessee
+The PRC government bonds and the special government bond
+2018
+Subscription of the PRC government bonds
+Transactions during the year:
+2.10 to 5.41
+Redemption of the PRC government bonds
+Interest income on the PRC government bonds
+2.13 to 5.41
+Interest rate ranges during the year:
+Bond investments
+682,923
+%
+322,489
+37,795
+%
+184,792
+31,366
+2017
+351,138
+8,280
+Group
+13,077
+14,049
+As at 31 December 2018, the Group holds a series of long-term bonds issued by Huarong, which is under the control of the
+MOF, with an aggregate amount of RMB90,309 million (31 December 2017: RMB90,309 million). The details of the Huarong
+bonds are included in note 24.
+15,628
+21,683
+808
+714
+1,011
+2,331
+Over five years
+7,486
+At the end of the reporting period, the Group and the Bank leased certain office properties under operating lease
+arrangements, and the total future minimum lease payments in respect of non-cancellable operating leases were as follows:
+9,166
+Over one year but within five years
+4,961
+4,877
+5,451
+6,546
+Within one year
+2017
+2018
+2017
+2018
+Bank
+12,806
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 49(g) "transactions with state-owned entities in the PRC".
+%
+As at 31 December 2018, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71% (31 December
+2017: approximately 34.71%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in the key state-owned financial institutions, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not engage in other business activities, and does not intervene in the day-to-day business operations of the key
+state-owned financial institutions it controls.
+Loans and advances to customers
+Due to customers
+1,211
+672
+1,207
+603
+192
+202
+26
+%
+3.12 to 5.15
+3.16 to 4.98
+Debt securities purchased
+3.92 to 4.75
+0.30 to 2.18
+0.30 to 1.76
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group. Details
+of major transactions during the year conducted with these banks and financial institutions are as follows:
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Operating lease commitments - Lessor
+Derivative financial liabilities
+3.92 to 4.75
+(ii) Huijin
+Interest rate ranges during the year:
+Interest expense on amounts due to customers
+As at 31 December 2018, the Huijin Bonds held by the Bank are of an aggregate face value of RMB38.77 billion
+(31 December 2017: RMB22.75 billion), with terms ranging from 1 to 30 years and coupon rates ranging from 3.12% to
+5.15% per annum. The Huijin Bonds are government-backed, short-term financing bills and medium-term notes. The Bank's
+subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance with relevant regulatory
+requirements and the corporate governance of the Bank.
+Annual Report 2018
+241
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the major transactions are as follows:
+Balances at end of the year:
+Debt securities purchased
+Loans and advances to customers
+Due to customers
+Net loss on financial liabilities designated as at FVTPL
+2018
+39,563
+22,215
+27,007
+27,036
+11,499
+5,607
+2018
+2017
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on loans and advances to customers
+2017
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2018, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB85,845 million (31 December 2017: RMB87,981 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+Over one year but within five years
+Over five years
+As at 31 December 2018, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB4,154 million (31 December 2017: RMB4,496 million).
+(d) Legal proceedings
+Internal ratings-based approach was adopted to calculate the credit risk-weighted assets according to the scope approved by
+the former CBRC, and others were calculated by weighted approach.
+1,526,140
+1,363,246
+1,552,070
+1,402,715
+2017
+2018
+2017
+2018
+Bank
+Group
+(i)
+credit commitments(i)
+Credit risk-weighted assets of
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+239
+Annual Report 2018
+871,289
+3,476,117
+1,383,145
+987,856
+1,005,493
+3,195,270
+In the opinion of management, the Group and the Bank have made adequate allowance for any probable losses based on
+the current facts and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the
+financial position or operations of the Group and the Bank.
+(e) Redemption commitments of government bonds
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+As at 31 December 2018, the unexpired securities underwriting obligations of the Group and the Bank amounted to
+RMB100 million (31 December 2017: Nil).
+Due to customers
+11,294,092
+The MOF
+(i)
+(a) Shareholders with significant influence
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+49. RELATED PARTY DISCLOSURES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+48. FIDUCIARY ACTIVITIES
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+221,628
+ICBC
+Financial assets of the Group including securities, bills and loans have been pledged as collateral for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2018, the carrying value of the
+financial assets of the Group pledged as collateral amounted to approximately RMB490,913 million (31 December 2017:
+RMB878,823 million).
+47. ASSETS PLEDGED AS SECURITY
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+920,829
+920,476
+1,327,990
+1,327,433
+2017
+2018
+Group
+Designated funds
+Designated loans
+46. DESIGNATED FUNDS AND LOANS
+240
+141,488
+234,675
+1,439,090
+902,217
+3,510,936
+3,229,512
+259,392
+2017
+2018
+2017
+245,542
+263,038
+Bank acceptances
+2018
+Bank
+Group
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+240,052
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+88,612
+167,048
+35,255
+88,258
+42,806
+62,722
+10,551
+16,068
+2017
+2018
+Group
+(c) Credit commitments
+Within one year
+Guarantees issued:
+- Non-financing letters of guarantees
+1,037,861
+Undrawn credit card limit
+1,061,666
+With an original maturity of one year or over
+151,927
+With an original maturity of under one year
+147,524
+159,470
+153,182
+162,801
+34,556
+- Financing letters of guarantees
+37,657
+42,918
+362,367
+431,974
+337,930
+405,155
+215,556
+171,940
+160,947
+104,146
+Usance letters of credit and other commitments
+Loan commitments:
+Sight letters of credit
+37,353
+Credit commitments
+8,627,592
+2017
+2,237
+5,011
+5,621
+298,723
+Amortisation
+Depreciation
+Other segment information:
+538
+Profit for the year
+Income tax expense
+372,413
+587
+75,828
+144,284
+151,714
+Profit before taxation
+(73,690)
+3,089
+13,407
+747
+27,699,540
+186,114
+12,095,016
+5,711,799
+9,706,611
+Segment assets
+As at 31 December 2018
+996
+72,555
+12,083
+26,969
+30,471
+Capital expenditure
+2,339
+164
+432
+3,032
+Including: Investments in associates and joint ventures
+3,089
+369,324
+273,490
+353,859
+Operating income
+7,302
+5,288
+(2,143)
+1,606
+92,484
+2,551
+145,301
+648
+62,969
+81,684
+Net fee and commission income
+(119,314)
+122,772
+Other income/(expense), net (i)
+Share of profits of associates and joint ventures
+5,288
+Operating expenses
+(2,502)
+75,828
+144,284
+151,714
+Operating profit/(loss)
+(161,594)
+(113)
+725,121
+793
+(131,348)
+Impairment losses on assets
+(194,203)
+(7,677)
+(17,449)
+(98,280)
+(70,797)
+(30,926)
+29,124
+29,124
+Property and equipment
+Operating income
+13,951
+4,872
+6,620
+(474)
+2,933
+Other income/(expense), net (i)
+332,264
+139,625
+62,325
+76,923
+Net fee and commission income
+(128,992)
+127,684
+1,308
+Internal net interest income/(expense)
+377
+522,078
+247,919
+4,872
+137,843
+152,873
+Operating profit/(loss)
+(127,769)
+(297)
+(2,029)
+(16,141)
+90,599
+(109,302)
+(186,194)
+(6,313)
+(15,857)
+(93,935)
+(70,089)
+Operating expenses
+675,654
+Impairment losses on assets
+212,594
+58,384
+251,100
+Other segment information:
+25,354,657
+218,575
+3,179,501
+47,846
+15,863
+4,241
+Credit commitments
+290,404
+42,370
+95,256
+6,982
+9,664,481
+12,292,100
+Segment liabilities
+20,760
+Other non-current assets (ii)
+107,201
+45,577
+2,222,156
+1,007,356
+3,229,512
+External net interest income
+Total
+Others
+operations
+banking
+banking
+Treasury
+Personal
+Corporate
+Year ended 31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+246
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+(!!)
+(i) Including net trading income, net gain on financial investments and other operating income (net).
+(3,458)
+72,713
+Internal net interest (expense)/income
+213,293
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+55
+120
+16
+53
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Transactions during the year:
+323
+2017
+65
+1,178
+433
+121
+166
+17,535
+15,887
+2018
+1,238
+133
+2
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+243
+Annual Report 2018
+0 to 2.30
+0 to 8.54
+0.50 to 4.28
+1
+0 to 14.00
+Due from banks and other financial institutions
+%
+%
+Due to customers
+Due to banks and other financial institutions
+Loans and advances to customers
+Interest rate ranges during the year:
+0 to 14.00
+1.20 to 4.37
+0 to 2.67
+0 to 0.72
+(In RMB millions, unless otherwise stated)
+1,558
+3,399
+Interest rate ranges during the year:
+Fee and commission income
+%
+%
+1,566
+2,432
+1,262
+Financial investments
+2,643
+265
+1,033
+Interest income on loans and advances to customers
+147
+1,186
+1,802
+Interest income on amounts due from banks and other financial institutions
+155
+Interest expense on amounts due to banks and other financial institutions
+1,667
+Due from banks and other financial institutions
+Due to banks and other financial institutions
+3,075
+135
+2017
+2018
+Credit commitments
+Derivative financial liabilities
+Due to customers
+Loans and advances to customers
+Due to banks and other financial institutions
+Loans and advances to customers
+Due from banks and other financial institutions
+Balances at end of the year:
+(c) Associates and affiliates
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+0.50 to 4.00
+-0.42 to 105.00
+0.25 to 6.15
+-0.36 to 105.00
+0 to 4.00
+0.01 to 4.50
+0.20 to 6.15
+-0.20 to 5.50
+Derivative financial assets
+The major transactions between the Group and the associates and their affiliates comprised due from banks and
+other financial institutions, loans and advances to customers and due to banks and other financial institutions and the
+corresponding interest income and interest expense. In the opinion of management, the transactions between the Group
+and the associates and their affiliates were conducted under normal commercial terms and conditions.
+(d) Joint ventures and affiliates
+Balances at end of the year:
+Annual Report 2018
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers, etc.
+Treasury operations
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+Personal banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Corporate banking
+245
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+50. SEGMENT INFORMATION
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of
+business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and
+those state-owned entities are ultimately controlled or owned by the Government. The Group has also established pricing
+policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned
+entities.
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+(g) Transactions with state-owned entities in the PRC
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund holds A shares of the Bank with an
+amount of RMB4.41 million as at 31 December 2018 (31 December 2017: RMB21.58 million).
+(f) Annuity Fund
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(a) Operating segments
+The aggregate balance of loans and credit card overdraft to the person which are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB93.45 million as at 31 December 2018 (31 December 2017:
+RMB36.52 million).
+2018
+Financial Statements for the year ended 31 December 2018
+86,143
+273,082
+External net interest income
+Total
+Others
+Treasury
+operations
+banking
+Notes to the Financial Statements
+banking
+Corporate
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as
+"internal net interest income/expense". Net interest income and expense relating to third parties are referred to as "external
+net interest income/expense".
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+Others
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2018
+Personal
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+0.01 to 1.30
+%
+%
+0.01 to 0.30
+1
+1
+Due to customers
+Interest rate ranges during the year:
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+Interest expense on amounts due to customers
+2017
+2018
+145
+71
+2017
+2018
+Due to customers
+Transactions during the year:
+(e) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+The aggregate compensation for the year, other than those for the personnel disclosed in note 12 above, is as follows:
+244
+There were no other material transactions and balances with key management personnel on an individual basis during the
+year. The Group enters into banking transactions with key management personnel in the normal course of business.
+2,603
+2,513
+2017
+RMB'000
+RMB'000
+2018
+Loans
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the Group.
+The transactions between the Group and the aforementioned parties for the year are as follows:
+The total compensation packages for senior management of the Bank for the year ended 31 December 2018 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's and the Bank's 2018 financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+Note: The above remuneration before tax payable to key management personnel for 2017 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2017 Annual Report.
+7,823
+3,983
+7,519
+304
+2017
+RMB'000
+2018
+RMB'000
+3,721
+262
+Short-term employment benefits
+Post-employment benefits
+572,518
+Interest income on financial investments
+(1,738)
+Share of profits of associates and joint ventures
+725,121
+Operating expenses
+(18,802)
+(29,196)
+(21,976)
+(31,779)
+(28,482)
+(288)
+(33,104)
+(19,192)
+288
+(194,203)
+Impairment losses on assets
+(29,087)
+(19,899)
+(20,268)
+(11,960)
+(29,537)
+57,021
+108,518
+(5,114)
+(605)
+(495)
+(654)
+(148)
+20
+(442)
+27,958
+15,028
+7,302
+Operating income
+86,395
+126,151
+94,375
+136,799
+88,192
+(288)
+Other (expense)/income, net (i)
+(23,683)
+(10,436)
+36,027
+54,409
+5,562
+33,239
+372,413
+Income tax expense
+(73,690)
+75,483
+Profit for the year
+Other segment information:
+Depreciation
+1,825
+1,786
+1,231
+2,006
+2,352
+298,723
+(21,005)
+52,131
+38,506
+(7,679)
+(161,594)
+Operating profit
+38,506
+77,056
+52,131
+75,483
+77,056
+36,027
+5,562
+30,150
+369,324
+Share of profits of associates and joint ventures
+3,089
+3,089
+Profit before taxation
+54,409
+145,301
+8,850
+4,644
+the HO business division (including institutions directly managed by the HO and their offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+including Liaoning, Heilongjiang, Jilin and Dalian.
+Overseas and others:
+branches located outside Mainland China, domestic and overseas subsidiaries, and investments in
+associates and joint ventures.
+247
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2018
+Mainland China (HO and domestic branches)
+Yangtze
+Pearl
+Annual Report 2018
+Bohai
+Northeastern China:
+Bohai Rim:
+Central China:
+3,854,496
+169,807
+23,945,987
+Other segment information:
+Credit commitments
+2,608,719
+902,217
+Western China:
+3,510,936
+Including net trading income, net gain on financial investments and other operating income (net).
+(ii)
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+(b) Geographical information
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane, Lima,
+Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh, Istanbul, Prague, Zurich, Manila and Vienna, etc.).
+The distribution of the geographical areas is as follows:
+Mainland China (Head Office and domestic branches):
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+(i)
+Central
+Western
+Northeastern
+Internal net interest (expense)/income
+(141,316)
+27,338
+11,824
+83,075
+11,846
+6,811
+572,518
+5,554
+Net fee and commission income
+3,907
+38,284
+27,704
+23,785
+17,258
+20,869
+(5,132)
+38,275
+18,202
+80,818
+Overseas and
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+others
+Eliminations
+Total
+External net interest income
+228,918
+61,134
+55,342
+30,593
+59,236
+2,690
+361,691
+1,113
+13,407
+ICBC
+248
+Segment liabilities
+43,610
+11,124
+4,435
+7,076
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+20,975
+247,744
+33,934
+37,649
+79,646
+96,515
+Property and equipment
+32,441
+Other non-current assets (ii)
+32,441
+(i)
+(926,942)
+(6,914,407)
+25,268,698
+Unallocated liabilities
+85,959
+Total liabilities
+25,354,657
+Other segment information:
+3,229,512
+Credit commitments
+652,201
+372,549
+544,264
+231,154
+412,271
+82,387
+720,824
+1,140,804
+879,687
+Including: Investments in associates and joint ventures
+154,799
+6,122
+287,451
+Amortisation
+Depreciation
+Other segment information:
+Profit for the year
+(77,190)
+5,070
+Income tax expense
+1,212
+72,713
+137,843
+152,873
+Profit before taxation
+2,950
+2,950
+364,641
+26,087,043
+2,404
+13,873
+11,629,855
+4,992,999
+9,309,390
+Segment assets
+As at 31 December 2017
+Capital expenditure
+35,671
+277
+728
+12,964
+15,794
+2,114
+59
+406
+682
+967
+6,185
+1,134,009
+2,733,284 3,378,285
+6,639,630
+(i)
+Including net trading income, net gain on financial investments and other operating income (net).
+As at 31 December 2018
+Mainland China (HO and domestic branches)
+Assets by geographical areas
+Head Office
+9,803,222
+Yangtze
+River Delta
+5,860,977
+72,555
+Pearl
+River Delta
+Central
+Western
+Northeastern
+Overseas and
+Rim
+China
+China
+Bohai
+China
+54,976
+2,801
+Amortisation
+809
+233
+198
+196
+280
+335
+975
+86
+2,339
+Capital expenditure
+2,655
+3,133
+1,767
+3,838
+2,410
+202
+3,700,969
+4,085,516
+2,758,294
+5,839
+3,458
+3,926
+6,750
+10,449
+1,581
+4,237
+11,606
+47,846
+58,375
+Total assets
+27,699,540
+Liabilities by geographical areas
+7,532,137
+6,166,615
+3,719,458
+Unallocated assets
+Other non-current assets (i)
+290,404
+166,205
+3,530,531
+1,120,364
+others
+3,695,699
+Eliminations
+(6,914,407)
+Total
+27,641,165
+Including: Investments in associates and
+joint ventures
+29,124
+29,124
+Property and equipment
+12,038
+31,408
+11,332
+18,605
+18,359
+22,807
+9,650
+404
+Transactions during the year:
+(f) Underwriting obligations
+0 to 7.00
+Loans and advances to customers
+387,233
+428,902
+Due from banks and other financial institutions
+14,478
+27,638
+Financial investments
+Balances at end of the year:
+2017
+2018
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+523,519
+135,694
+211
+6,335
+650,186
+128,185
+49,532
+691
+6,431
+37,385
+2,059
+2018
+144,810
+5,913
+27,349
+151,512
+1,235
+4,479
+4,353
+985
+Credit commitments
+Reverse repurchase agreements
+Repurchase agreements
+Derivative financial liabilities
+383,376
+420,539
+Due to banks and other financial institutions
+757
+Derivative financial assets
+123,288
+157,412
+6,988
+933
+13,974
+Debt securities purchased
+Interest rate ranges during the year:
+Due from banks and other financial institutions
+%
+%
+(b) Subsidiaries
+0.13 to 7.67
+Loans and advances to customers
+Due to banks and other financial institutions
+Due to customers
+0 to 3.90
+0 to 10.00
+2.31 to 4.13
+0 to 9.07
+0 to 7.20
+The interest rates disclosed above vary across product groups and transactions depending on the maturity date, credit
+risk of counterparty and currency. In particular, given local market conditions, the spread of certain major or long dated
+transactions can vary across the market.
+0 to 7.50
+4.13 to 6.18
+0 to 8.17
+10
+12
+Interest expense on amounts due to customers
+911
+6,023
+580
+15,954
+2018
+2017
+Transactions during the year:
+Interest income on debt securities purchased
+2017
+19,866
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+538
+418
+26
+8
+Interest expense on amounts due to banks and other financial institutions
+1,517
+23,758
+242
+ICBC
+21,665
+Head
+Office
+North
+31 December 2017
+The compositions of each geographical distribution above are set out in note 50(b).
+30,182,752
+3,229,512
+Yangtze
+River Delta
+26,953,240
+832,459
+3,067,257
+2,406,498
+3,160,069
+2,494,007
+3,473,846
+3,050,831
+422,991
+3,473,822
+Pearl River
+Central
+Western
+26,569
+115,233
+34,559
+59,322
+3,065,933
+Balances with central banks
+Total
+and others
+China
+China
+China
+Bohai Rim
+Delta
+Overseas
+eastern
+11,274,794
+756,918
+75,541
+250,303
+160,755
+27,297
+18,130
+Others
+4,519,182
+284,409
+13,720
+90,710
+59,701
+22,827
+25,637
+24,694
+3,997,484
+at amortised cost
+-Financial investments measured
+1,400,244
+61,931
+33,744
+3,383
+2,038
+417,287
+332,232
+522,667
+1,047,736
+Total maximum credit risk exposure
+Credit commitments
+2,816,954
+2,245,743
+2,742,782
+2,161,775
+2,951,179
+10,227,058
+166,363
+50,796
+395
+2,393
+9,270
+194,028
+3,538,658
+China
+China
+Rim
+River Delta
+River Delta
+Head Office
+Overseas and
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Mainland China (HO and domestic branches)
+Year ended 31 December 2017
+China
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+others Eliminations
+External net interest income
+13,526
+73,129
+15,958
+28,970
+(142,941)
+Internal net interest (expense)/income
+522,078
+45,376
+15,441
+71,964
+50,020
+28,671
+47,429
+50,808
+212,369
+Total
+276,374
+Notes to the Financial Statements
+89,013
+78,542
+18,470
+60,072
+Financial assets held for trading
+847,611
+258,793
+123
+1,251
+210
+634
+1,128
+2,854
+582,618
+institutions
+Due from banks and other financial
+Financial assets designated as at FVTPL
+Reverse repurchase agreements
+333,921
+373
+47,872
+194
+1,467
+306
+2,228
+1,889
+647
+34,410
+Derivative financial assets
+353,601
+17,473
+91
+370
+253
+563
+557
+8,597
+432
+16,997
+Credit commitments
+Total maximum credit risk exposure
+1,107,011
+11,015,897
+2,952,700
+537,087
+3,489,787
+2,162,168
+9,908,886
+3,319,220
+2,818,584
+335,207
+2,497,375
+430,005
+166,341
+255,240
+765,336
+75,828
+2,245,746
+116,771
+4,362,174
+117,916
+886
+25,637
+22,827
+59,701
+90,710
+13,720
+Others
+18,371
+27,354
+61,938
+1,078,047
+3,387
+2,396
+2,042
+12,166
+397
+1,285,617
+288,551
+25,458,257
+3,195,270
+3,749,225
+China
+China
+Balances with central banks
+3,065,933
+59,322
+34,559
+115,233
+3,382,006
+(5,560,058)
+26,038,651
+Including: Investments in associates and
+joint ventures
+32,441
+32,441
+Property and equipment
+China
+24,694
+Bohai Rim
+Delta
+2,412,087
+3,073,824
+841,164
+1,574,168 28,653,527
+The compositions of each geographical distribution above are set out in note 50(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+31 December 2017
+Yangtze
+North
+Head
+River Pearl River
+Central
+Western
+eastern
+Overseas
+Office
+Delta
+4,006,969
+at amortised cost
+- Financial investments measured
+2,668,607
+2,148,413
+2,454,608
+2,020,113
+2,763,624
+687,466
+Loans and advances to customers
+734,049
+228,449
+505,600
+Reverse repurchase agreements
+71,335
+37,812
+109
+241
+731,538
+130
+1,571,763
+Financial investments
+174,673
+18,218
+34,529
+857,356
+-Financial investments measured at FVOCI
+750,957
+42,206
+174
+685
+520
+6,016
+914
+1,219
+699,223
+-Financial investments measured at FVTPL
+15,046,132
+21,665
+358
+2,095
+32,256
+82,669
+2,870,736
+Balances with central banks
+Total
+and others
+China
+China
+China
+Bohai Rim
+Delta
+Delta
+Office
+Overseas
+1,217,762
+80,490
+849
+17,367
+10,447
+29,741
+Derivative financial assets
+962,449
+382,867
+103
+599
+222
+427
+1,857
+15,052
+561,322
+institutions
+Due from banks and other financial
+3,302,529
+176,155
+32,409
+7,876
+(5,115)
+Net fee and commission income
+25,367,584
+2,849,198
+740,449
+2,594,612
+2,067,777
+2,633,747
+517,276
+3,151,023
+220,802
+1,940,230
+414,893
+2,355,123
+2,711,616
+579,997
+3,291,613
+9,829,955
+911,612
+10,741,567
+Total maximum credit risk exposure
+Credit commitments
+288,090
+56,872
+eastern
+371,775
+2,288,579
+2,966,387
+River
+Head
+North
+Yangtze
+31 December 2018
+Bank
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+255
+Annual Report 2018
+The compositions of each geographical distribution above are set out in note 50(b).
+28,878,520
+3,510,936
+410,475
+3,259,673
+84,106
+824,555
+3,773
+14,593
+20,255
+18,148
+24,344
+22,004
+28,576
+3,124,591
+-Held-to-maturity investments
+277,129
+49,913
+120
+270
+3,540
+1,736
+284
+24
+221,242
+- Receivables
+44,699
+Pearl River
+68,913
+216,380
+13,558
+32,024
+128,867
+Others
+1,473,159
+235,599
+1,279
+22,933
+17,417
+193,388
+24,088
+45,079
+933,376
+- Available-for-sale financial assets
+3,542,184
+12,677
+Central
+Western
+eastern
+739,954
+2,670,233
+2,148,413
+2,468,536
+2,020,113
+2,763,624
+694,766
+Loans and advances to customers
+521,393
+13,129
+508,264
+Reverse repurchase agreements
+38,295
+4,160
+109
+706,138
+241
+14,211,777
+-Financial investments measured at FVTPL
+16,997
+174,673
+18,218
+34,529
+857,356
+-Financial investments measured at FVOCI
+709,262
+512
+174
+685
+520
+568,522
+914
+1,219
+136,716
+Financial investments
+Financial investments
+130
+849
+80,490
+32,256
+82,669
+2,870,736
+Balances with central banks
+Total
+and others
+China
+China
+China
+Bohai Rim
+Delta
+Delta
+Office
+Overseas
+17,367
+358
+32,409
+123,047
+2,182
+30,266
+Derivative financial assets
+1,031,402
+225,937
+103
+599
+222
+427
+2,243
+16,429
+785,442
+institutions
+Due from banks and other financial
+3,249,421
+10,447
+13,892,966
+1,505,600
+712,922
+(127,769)
+(3,980)
+(5,650)
+(20,922)
+(21,187)
+(28,535)
+(19,572)
+(17,012)
+(10,911)
+Impairment losses on assets
+(186,194)
+54
+(18,142)
+(12,170)
+(32,179)
+Operating profit
+(27,495)
+47,191
+47,561
+47,191
+2,950
+2,950
+Profit for the year
+Income tax expense
+Profit before taxation
+joint ventures
+Share of profits of associates and
+361,691
+1
+37,323
+10,812
+47,694
+32,659
+66,818
+71,633
+71,633
+93,892
+(28,487)
+924
+714
+905
+(1,650)
+Other (expense)/income, net (i)
+139,625
+(15)
+7,904
+4,596
+19,383
+17,548
+23,282
+24,415
+36,449
+6,063
+247
+(21,383)
+851
+11,280
+(15,739)
+Operating expenses
+675,654
+(54)
+59,445
+28,632
+100,795
+81,341
+126,006
+88,516
+117,132
+73,841
+Operating income
+13,951
+(39)
+719
+432
+47,561
+32,659
+Overseas and
+others
+China
+Northeastern
+Western
+China
+Central
+China
+Rim
+Bohai
+Pearl
+River Delta
+Yangtze
+River Delta
+Head Office
+Mainland China (HO and domestic branches)
+As at 31 December 2017
+(i)
+Including net trading income, net gain on financial investments and other operating income (net).
+(i)
+Eliminations
+35,671
+Total
+9,101,260
+2,451,071
+1,954,528
+2,277,473
+1,842,347
+2,542,533
+606,492
+Loans and advances to customers
+986,631
+248,198
+738,433
+3,113,759
+2,529,871
+3,710,656
+3,356,039
+5,327,071
+Assets by geographical areas
+66,818
+22,050
+2,830
+2,856
+2,452
+2,079
+1,323
+1,918
+1,704
+Depreciation
+Other segment information:
+287,451
+(77,190)
+364,641
+40,273
+10,812
+5,083
+47,694
+1,155
+787
+386
+Amortisation
+2,011
+1,539
+1,303
+3,639
+1,512
+Capital expenditure
+2,114
+172
+88
+352
+285
+169
+181
+240
+627
+13,873
+(30,653)
+2,590
+ICBC
+51. FINANCIAL INSTRUMENTS RISK MANAGEMENT
+A description and an analysis of the major risks faced by the Group are as follows:
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The Group has also assigned departments monitoring financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to both the corresponding risk management departments at the
+Head Office and management of the relevant branches.
+(a) Credit risk
+Definition and scope
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also give
+rise to credit risk. The Group's credit risk is mainly attributable to its loans, due from banks and other financial institutions
+and financial investments.
+The Group is also exposed to credit risk in other areas in addition to the credit risk arising from the Group's loans, due
+from banks and other financial institutions and financial investments. The credit risk arising from derivative financial
+instruments is limited to derivative financial assets recorded in the statement of financial position. In addition, the Group
+provides guarantees for customers and may therefore be required to make payments on their behalf. These payments will be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk similar
+to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Credit risk assessment method
+Stage of financial instruments
+The Group classifies financial instruments into three risk stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+Refer to Note 3(6) Impairment of the financial assets for the definition of the three risk stages.
+250
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+249
+Total liabilities
+23,945,987
+Other segment information:
+Credit commitments
+946,311
+657,602
+466,598
+ICBC
+558,078
+433,536
+89,923
+690,097
+(585,683)
+3,510,936
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+Annual Report 2018
+254,474
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Significant increase in credit risk
+The borrower is probable to be insolvent or carry out other financial restructurings;
+•
+Due to serious financial difficulties, the financial asset cannot continue to be traded in an active market;
+•
+There are other objective evidences that the financial asset is impaired.
+Description of parameters, assumptions, and estimation techniques
+Expected credit losses ("ECL") for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL
+depending on whether a significant increase in credit risk on that financial instrument has occurred since initial recognition
+or whether an asset is considered to be credit-impaired. The loss allowance for loans and advances to customers, other than
+those corporate loans and advance to customers which are credit-impaired, is measured using the risk parameters method.
+The key parameters include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"),
+considering the time value of money. Related definitions are as follows:
+•
+Annual Report 2018
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the Internal Rating-Based Approach under the New Basel
+Capital Accord, taking the forward-looking information into account and deducting the prudential adjustment to reflect the
+debtor's point-in-time (PIT) PD under the current macroeconomic environment;
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. The LGD is depending
+on the type of counterparty, the method and priority of the recourse, and the type of collaterals, with taking the
+forward-looking information into account;
+EAD refers to the total amount of on-and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+251
+71,076
+In light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+It has been overdue for more than 90 days;
+The assessment of significant increase since initial recognition in the credit risk is performed at least on a quarterly basis for
+financial instruments held by the Group. The Group takes into consideration all reasonable and supportable information
+(including forward-looking information) that reflects significantly change in credit risk for the purposes of classifying financial
+instruments. The main considerations are regulatory and operating environment, internal and external credit risk gradings,
+debt-servicing capacity, operating capabilities, contractual terms, and repayment records. The Group compares the risk of
+default of a single financial instrument or a portfolio of financial instruments with similar credit risk characteristics as at the
+end of the reporting period and its risk of default at the date of initial application to determine changes in the risk of default
+during the lifetime of a financial instrument or a portfolio of financial instruments. In determining whether credit risk of a
+financial instrument has increased significantly since initial recognition, the Group considers factors indicating whether the
+probability of default has risen sharply, whether the financial instrument has been past due for more than 30 days, whether
+the market price has been falling to assess deterioration.
+Definition of default
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria at the timing
+of recognition:
+(i)
+(ii)
+The principal or interest of loan is past due more than 90 days to the Group;
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral;
+•
+(iii) The corporate borrower has the above matters in other financial institutions refers to (i), (ii)
+(i)
+(ii)
+The principal or interest of loan is past due more than 90 days to the Group;
+Write-offs;
+(iii) The Group considers the borrower is unlikely to pay its credit obligations to the Group in full.
+Impairment assessment
+Generally, a financial asset is considered to be credit-impaired if:
+•
+The Group defines a retail business borrower as in default when single credit assets of borrowers meets one or more of the
+following criteria:
+Unallocated liabilities
+23,874,911
+(5,560,058)
+1,736
+284
+24
+225,657
+- Receivables
+Financial investments
+13,125,401
+3,540
+707,746
+2,451,071
+1,954,528
+2,294,258
+1,842,347
+2,542,533
+613,792
+Loans and advances to customers
+719,126
+750,763
+270
+231,631
+22,933
+17,417
+193,388
+24,088
+45,079
+936,338
+-Available-for-sale financial assets
+120
+3,439,471
+68,913
+44,699
+24,344
+22,004
+28,576
+3,131,589
+-Held-to-maturity investments
+12,677
+There have been no significant changes in estimation techniques or significant assumptions made during the year.
+10,813
+Reverse repurchase agreements
+1,430
+4,273
+43,610
+Unallocated assets
+48,392
+Total assets
+26,087,043
+7,603
+Liabilities by geographical areas
+5,564,511
+3,692,171
+5,568,370
+2,624,956
+3,164,294
+1,069,369
+571,676
+7,179,622
+739,950
+5,371
+4,172
+53,856
+10,687
+194
+1,467
+306
+30,359
+10,955
+3,974
+17,080
+23,054
+9,900
+125,642
+247,744
+Other non-current assets (i)
+11,025
+5,762
+18,588
+The impairment loss on credit-impaired corporate loans and advance to customers applied cash flow discount method, if
+there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the loss is measured as
+the difference between the asset's gross carrying amount and the present value of estimated future cash flows discounted
+at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying amount. The
+impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual basis, the
+following factors are considered:
+•
+The sustainability of the borrower's business plan;
+4,362,174
+4,519,182
+at amortised cost
+398,329
+709,262
+1,217,762
+1,400,244
+- Financial investments measured at FVOCI
+Financial investments measured
+- Available-for-sale financial assets
+432,143
+Financial investments measured at FVTPL
+Financial investments
+750,763
+13,125,401
+53,856
+38,295
+521,393
+14,211,777
+930,593
+1,031,402
+750,957
+847,611
+89,013
+986,631
+13,892,966
+– Held-to-maturity investments
+1,324,817
+3,195,270
+23,971,422
+25,458,257
+25,367,584
+3,510,936
+28,878,520
+26,953,240
+3,229,512
+30,182,752
+Total maximum credit risk exposure
+Credit commitments
+1,473,159
+3,542,184
+238,733
+288,090
+166,363
+Others
+231,631
+277,129
+― Receivables
+3,439,471
+116,771
+3,476,117
+15,046,132
+962,449
+71,335
+734,049
+Notes to the Financial Statements
+253
+Annual Report 2018
+During the reporting period, the Group took possession of collateral held as security with a carrying amount of
+RMB1,774 million (31 December 2017: RMB2,099 million).
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Financial Statements for the year ended 31 December 2018
+Retail loans are mainly collateralised by residential properties. As at 31 December 2018, the gross carrying amount of retail
+loans amounted to RMB5,636,574 million (31 December 2017: RMB4,945,458 million), of which credit exposure covered by
+collateral amounted to RMB4,913,432 million (31 December 2017: RMB4,313,125 million).
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Collaterals and other credit enhancements
+1,618
+2,903
+1,989
+3,112
+included in above
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2018, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB9,783,331 million (31 December 2017:
+RMB9,287,990 million), of which credit exposure covered by collateral amounted to RMB3,208,571 million (31 December
+2017: RMB3,335,404 million).
+Loans and advances to customers
+(In RMB millions, unless otherwise stated)
+Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+Reverse repurchase agreements
+Derivative financial assets
+financial institutions
+Due from banks and other
+3,477,828
+3,249,421
+3,538,658
+(i)
+3,302,529
+2017
+2018
+2017
+2018
+Bank
+Group
+As at the end of the reporting period, the maximum credit risk exposure of the Group and of the Bank without taking
+account of any collateral and other credit enhancements is set out below:
+Balances with central banks
+1,279
+28,653,527
+(ii) Risk concentrations
+2017
+2018
+2017
+Rescheduled loans and advances to customers
+Impaired loans and advances to customers
+7,211
+5,158
+2,228
+2018
+1,889
+36,438
+Derivative financial assets
+338,257
+2,129
+91
+370
+253
+647
+563
+Bank
+The following table includes carrying amount of rescheduled loans and advance to customers:
+The borrower's ability to improve performance once a financial difficulty has arisen;
+The estimated recoverable cash flows from projects and liquidation;
+The availability of other financial support and the realisable value of collateral; and
+The timing of the expected cash flows.
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+Forward-looking information contained in ECL
+The calculation of ECL incorporates forward-looking information. The Group has performed historical analysis and identified
+the key economic variables, including Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"), Purchasing Managers'
+Index ("PMI"), M2, Industrial Added Value and Real Estate Climate Index, impacting ECL for each portfolio. The impact of
+these economic variables on the PD and LGD has been determined by performing statistical regression analysis to understand
+the correlations among the historical changes of the economic variables, PD and LGD. Forecasts of these economic variables
+are provided quarterly by the Group at least and provide the best estimate view of the economy over the next year.
+When calculating the weighted average ECL, the optimism, neutral and pessimism scenarios and its weightings determined
+by a combination of macro-statistical analysis and expert judgment are taken into account by the Group.
+Group
+Write-off policy
+252
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Contractual modification of financial assets
+The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed
+loans, with a view to maximising recovery.
+Such rescheduling activities include extended payment term arrangements, payment holidays and payment forgiveness.
+Rescheduling policies and practices are based on indicators or criteria which, in the judgment of management, indicate that
+payment will most likely continue. These policies are kept under continuous review. This is only the case for assets which
+have performed in accordance with the new terms for six consecutive months or more.
+The Group writes off financial assets when it has exhausted practical recovery efforts and has concluded there is no
+reasonable expectation of recovery.
+27,447,539
+373
+333,921
+26,569
+Western
+Central
+Pearl River
+North
+Yangtze
+River
+Head
+33,744
+31 December 2018
+The following tables set out the breakdown of the Group's and the Bank's maximum credit risk exposure without taking
+account of any collateral and other credit enhancements, as categorised by geographical distribution:
+By geographical distribution
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+254
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+Group
+557
+9,270
+Total
+Financial assets designated as at FVTPL
+60,072
+60,072
+Financial assets held for trading
+930,593
+189,208
+123
+and others
+133,198
+1,264
+634
+8,179
+2,884
+728,091
+institutions
+Due from banks and other financial
+3,477,828
+210
+84,295
+106,669
+Others
+38,724
+Corporate entities
+518,745
+123,237
+72,985
+307,105
+6,966
+8,539
+8,452
+Banks and other
+220,295
+100
+15,779
+196,793
+2,953
+4,670
+financial institutions
+Public sector entities
+241,879
+17,898
+measured at
+measured at
+investments
+investments
+Financial
+Financial
+Financial
+investments
+25,353
+31 December 2018
+5,373,733
+226,235
+3,542,184
+1,466,995
+59,777
+78,542
+332,393
+Bank
+measured at
+996,669
+206,621
+assets
+assets
+31 December 2017
+Available-
+Financial
+Financial
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+held for
+257
+6,049,076
+4,428,000
+1,377,327
+243,749
+289,870
+35,771
+235,641
+1,324,817
+757,091
+designated
+Held-to-
+30,729
+2,228
+Policy banks
+3,305,631
+85,000
+2,670,976
+514,597
+for-sale
+financial
+10,590
+Governments and central banks
+Total
+Receivables
+assets investments
+as at FVTPL
+trading
+maturity
+24,468
+18,458
+FVTPL
+amortised cost
+189,865
+2,953
+4,618
+Public sector entities
+950,057
+Total
+3,189,003
+85,000
+7,684
+2,608,717
+728,060
+30,729
+2,199
+Policy banks
+487,915
+7,371
+Governments and central banks
+Receivables
+189,069
+assets investments
+100
+Banks and other
+258
+5,101,425
+265,490
+491,655
+126,653
+17,898
+229,651
+90,532
+4,478
+3,439,471
+198,421
+1,324,817
+205,220
+47,414
+6,766
+37,927
+Corporate entities
+259,547
+6,966
+7,957
+financial institutions
+60,072
+FVOCI
+as at FVTPL
+Held-to-
+maturity
+206,560
+3,999
+195,339
+7,222
+Public sector entities
+736,533
+484,456
+Banks and other financial institutions
+202,787
+Policy banks
+3,960,420
+3,555,980
+380,287
+24,153
+Governments and central banks
+Total
+49,290
+trading
+124,144
+236,395
+financial
+for-sale
+assets
+designated
+Available-
+31 December 2017
+Financial
+Financial
+assets
+held for
+242,056
+5,715,475
+18,477
+4,299,307
+1,197,156
+219,012
+176,687
+14,203
+Corporate entities
+602,595
+209,367
+693,750
+Annual Report 2018
+302,685
+gas and water
+Production and supply of electricity, heating,
+961,509
+1,094,756
+1,017,887
+1,145,342
+Leasing and commercial services
+1,572,794
+1,518,030
+1,622,263
+1,569,387
+Manufacturing
+1,766,388
+1,957,627
+1,868,700
+1,004,744
+971,938
+976,464
+947,100
+658,745
+583,254
+702,151
+626,059
+Wholesale and retail
+656,895
+771,973
+2,070,542
+264,645
+public utility management
+Water, environment and
+597,547
+677,177
+739,783
+850,038
+Real estate
+786,803
+Transportation, storage and postal services
+2017
+2018
+2,650,540
+530,239
+3,180,779
+1,947,288
+429,153
+2,376,441
+2,711,690
+596,587
+3,308,277
+937,147
+10,938,001
+Total maximum credit risk exposure
+Credit commitments
+10,000,854
+2,067,780
+227,552
+2,295,332
+238,733
+3,773
+14,598
+20,258
+18,156
+13,565
+32,068
+129,073
+7,242
+Finance
+2,594,630
+380,078
+2017
+2018
+Bank
+Group
+The composition of the Group's and of the Bank's gross loans and advances to customers (excluding accrued interest) by
+industry is analysed as follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+746,653
+By industry and issuers distribution
+256
+The compositions of each geographical distribution above are set out in note 50(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+23,971,422
+1,251,987
+291,082 3,476,117
+1,543,069 27,447,539
+830,932
+2,974,708
+84,279
+ICBC
+295,271
+676,573
+207,383
+FVTPL
+measured at
+investments
+Financial
+31 December 2018
+Financial
+investments
+measured at
+measured at
+Financial
+investments
+FVOCI
+295,919
+349,024
+13,455,417
+353,277
+14,577,906
+351,126
+14,233,448
+364,437
+15,419,905
+Total for loans and advances to customers
+Discounted bills
+4,843,049
+The following tables present an analysis of debt securities (excluding accrued interest) by types of issuers and investments:
+5,515,538
+amortised cost
+Governments and central banks
+126,420
+Banks and other financial institutions
+Corporate entities
+217,022
+8,555
+201,183
+7,284
+Public sector entities
+Total
+774,732
+223,877
+49,291
+Policy banks
+4,073,702
+3,617,465
+413,941
+42,296
+501,564
+4,945,458
+Group
+Subtotal for personal loans
+130,874
+174,180
+196,046
+Science, education, culture and sanitation
+230,195
+207,360
+262,262
+Others
+5,636,574
+Mining
+231,493
+247,209
+249,244
+265,149
+Construction
+204,903
+234,976
+374,537
+146,074
+293,678
+754,295
+789,810
+790,559
+830,630
+384,070
+4,088,754
+4,725,728
+4,154,899
+Others
+Personal mortgage and business loans
+8,263,344
+8,709,091
+8,936,864
+9,418,894
+Subtotal for corporate loans
+4,805,944
+304,901
+9,778
+28,094
+15,570
+Derivative financial liabilities
+415
+87,400
+5,635
+14,081
+73,573
+1,777
+1,129,334
+510,830
+302,505
+310,489
+31,569
+44,569
+2,329,296
+Certificates of deposit
+60,071
+Due to banks and other financial institutions (**)
+11,334
+(169,073)
+382
+15,097,012
+234,777
+552,086
+14,310,149
+to customers
+Loans and advances
+(40)
+(40)
+559,295
+559,295
+agreements
+Reverse repurchase
+(1,015)
+(22)
+(993)
+963,464
+9,051
+(158,084)
+(81,406) (173,241)
+(412,731)
+Including: Corporate
+Discounted bills
+(92,500)
+(36,722)
+(7,108)
+(48,670)
+5,650,554
+40,120
+24,795
+954,413
+5,585,639
+(320,196)
+(74,298) (136,499)
+(109,399)
+9,436,249
+194,637
+527,291
+8,714,321
+loans and advances
+Personal loans
+institutions
+and other financial
+Due from banks
+42,039
+63,159
+32,634
+2,605,145
+2,358,448
+265,490
+10,380
+9,806
+5,101,425
+12,916
+20,160
+Corporate entities
+491,655
+26,031
+34,894
+14,331
+233,129
+183,270
+212,228
+10,189
+260
+Notes to the Financial Statements
+3,372,576
+3,372,576
+with central banks
+Cash and balances
+Total
+Provision for expected credit losses
+Stage 2
+Stage 3
+Stage 1
+Total
+ICBC
+Stage 3
+Stage 1
+31 December 2018
+at amortised cost
+Financial assets measured
+Group
+As at 31 December 2018, the Group's and the Bank's credit risk stages of financial instruments are as follows:
+(iii) Analysis on the credit quality of financial instruments
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Book value
+Stage 2
+20
+10,209
+(15)
+(196)
+(92)
+(1,622)
+1,400,244
+1,801
+1,398,443
+Financial investments
+(433)
+(1,910)
+(248)
+354,228
+248
+1
+353,979
+(13)
+(13)
+6,255
+6,255
+(185)
+loans and advances
+Discounted bills
+Total
+1,802
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+261
+Annual Report 2018
+(562) (34,715)
+(5,342)
+(28,811)
+3,229,512
+1,758,677
+754
+3,175,598
+Credit commitments
+(2,356)
+(444)
+(92)
+(1,820)
+1,760,727
+248
+53,160
+financial institutions
+Including: Corporate
+(248)
+(530)
+(161,151) (82,508)
+329 104,189
+235,267 24,618,201
+566,680
+750
+103,110
+23,816,254
+Total
+Precious metal leasing
+(2,483)
+(226)
+(125)
+(1,504)
+4,521,665
+161
+4,793
+4,516,711
+Financial investments
+(35)
+(20)
+(854)
+(446)
+(202)
+(173,568)
+(198)
+360,483
+248
+1
+360,234
+to customers
+Loans and advances
+FVOCI
+(958)
+Total
+Total
+Stage 3
+Carrying amount
+Stage 2
+Stage 1
+31 December 2018
+Financial assets measured at
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost,
+three-stage model is not applicable.
+(417,227)
+Provision for expected credit losses
+Stage 1
+Stage 2
+Stage 3
+Bank
+Banks and other
+20
+981,501
+110
+Policy banks
+6,502
+2,014,051
+1,260,334
+Governments and central banks
+of issuers):
+Debt securities (analysed by type
+Total
+Below A
+A
+31 December 2017
+AA
+AAA
+Unrated
+6,049,076
+111,495
+156,862
+2,949
+1,589
+9,878
+10,524
+14,866
+34,051
+Corporate entities
+518,745
+43,583
+55,336
+17,072
+246,955
+155,799
+289,870
+financial institutions
+220,295
+20
+15,786
+118
+204,261
+996,669
+106
+3,305,631
+Banks and other
+36,579
+44,650
+9,030
+32,940
+758,698
+130
+Public sector entities
+15,840
+5,217
+2,557,514
+1,479,735
+Governments and central banks
+Policy banks
+Total
+2,289
+Below A
+31 December 2018
+AA
+AAA
+Unrated
+Debt securities (analysed by type
+of issuers):
+Group
+Distribution of debt securities investments (excluding accrued interest) analysed by rating
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies where the issuers of debt securities are located. The carrying
+amounts of debt securities investments analysed by rating as at the end of the reporting period are as follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+A
+220,870
+965
+15,396
+886
+146,240
+3,223,493
+2,524,286
+53,371
+Corporate entities
+693,750
+58,634
+72,531
+17,605
+11,894
+312,628
+financial institutions
+Banks and other
+217,022
+11,947
+123
+204,822
+774,732
+4,073,702
+232,352
+14,462
+36,350
+26,660
+A
+31 December 2017
+AA
+AAA
+Unrated
+5,715,475
+54,270
+77,059
+25,537
+Below A
+3,150,933
+209,367
+14,292
+13,411
+7,982
+139,692
+33,990
+Corporate entities
+602,595
+2,407,676
+32,457
+Total
+of issuers):
+9,969
+118
+195,003
+950,057
+77
+6,437
+1,589
+2,919
+Debt securities (analysed by type
+939,035
+110
+Policy banks
+3,189,003
+5,531
+2,053
+3,680
+1,961,866
+1,215,873
+Governments and central banks
+Public sector entities
+205,220
+42,796
+293,355
+Debt securities (analysed by type
+Total
+Below A
+A
+31 December 2018
+AA
+AAA
+Unrated
+Bank
+of issuers):
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+259
+Annual Report 2018
+85,235 5,373,733
+127,874
+39,743
+2,689,086
+2,431,795
+332,393
+Notes to the Financial Statements
+12,190
+Governments and central banks
+2,519,288
+221,797
+financial institutions
+Banks and other
+206,560
+7,839
+123
+198,598
+Public sector entities
+1,422,978
+736,533
+6,575
+965
+728,911
+Policy banks
+3,960,420
+7,439
+6,438
+4,277
+82
+Financial assets measured
+at amortised cost
+31 December 2018
+optimising the structure of assets and liabilities;
+•
+•
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Liquidity risk is the risk that funds will not be sufficient or will not be raised at a reasonable cost in a timely manner to meet
+the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+(b) Liquidity risk
+47,414
+60,072
+1,324,817
+47,414
+60,072
+1,324,956
+(139)
+(105)
+3,439,471
+3,439,576
+229,656
+(5)
+229,651
+13,125,401
+(330,016)
+maintaining the stability of the deposit base;
+projecting cash flows and evaluating the level of current assets; and
+•
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+three
+months
+Less than
+one month
+on demand
+One to
+Overdue/
+repayable
+Less: Allowance for impairment losses
+31 December 2018
+The Group's and the Bank's expected the remaining maturity of its financial instruments may vary significantly from the
+following analysis. For example, demand deposits from customers are expected to maintain a stable or increasing balance
+although they have been classified as repayable on demand in the following tables.
+Analysis of the remaining maturity of the assets and liabilities is set out below:
+(i)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+263
+Annual Report 2018
+Group
+13,455,417
+24
+68,313
+214,646
+Available-
+for-sale
+Held-to-
+Loans and
+Debt securities
+31 December 2017
+Bank
+59,777
+78,542
+Financial
+1,466,995
+59,777
+78,542
+1,467,340
+3,542,351
+(167)
+3,542,184
+226,235
+13,892,966
+226,240
+(5)
+(340,482)
+(345)
+Undated
+Financial
+assets
+Impaired
+Past due but not impaired
+47,414
+60,072
+1,324,956
+3,439,552
+as at FVTPL
+trading
+assets
+assets
+held for
+financial
+maturity
+investments
+Receivables
+229,656
+13,172,458
+Neither past due nor impaired
+customers
+advances to
+designated
+(***)
+Total
+Assets:
+19,372
+49,564
+257,916
+290,404
+290,404
+29,124
+29,124
+4,519,182
+15,912
+1,459,953
+415,725
+130,695
+39,686
+Investments in associates and joint ventures
+amortised cost
+1,430,163
+28,952
+272,032
+2,473,116
+775,046
+1,004,170
+1,147,417
+478
+67,859
+Financial liabilities designated as at FVTPL
+481
+71
+Due to central banks
+Liabilities:
+Total assets
+2,010,666
+Others
+27,699,540
+3,322,986
+9,159,036
+438,779
+39,599
+38,240
+18,176
+7,320,956
+3,734,309
+Property and equipment
+Less: Allowance for impairment losses
+244,232
+52,098
+24,278
+15,369
+13,448
+61
+Derivative financial assets
+1,696,498
+577
+69,856
+11,645
+316,762
+897,537
+153,907
+Due from banks and other financial institutions (*)
+3,372,576
+2,801,101
+7,303
+564,172
+Cash and balances with central banks
+257,859
+57,803
+6,534
+Loans and advances to customers
+805,347
+62,918
+131,963
+405,552
+109,843
+44,671
+44,236
+6,164
+71,335
+-Financial investments measured at FVTPL
+- Financial investments measured at FVOCI
+-Financial investments measured at
+15,046,132
+70,888
+7,249,737
+3,567,565
+2,600,254
+621,648
+914,097
+21,943
+Financial investments
+14,233,448
+281
+83
+(1,392)
+4,364,462
+101
+3,000
+4,361,361
+Financial investments
+(35)
+(20)
+(830)
+(15)
+20
+9,430
+Discounted bills
+(91,388)
+(36,369)
+(6,889)
+(48,130)
+5,528,838
+9,450
+39,675
+(66)
+Precious metal leasing
+Provision for expected credit losses
+Carrying amount
+Stage 2
+Stage 1
+31 December 2018
+Financial assets measured at
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost, three-
+stage model is not applicable.
+(79,580) (169,341) (404,688)
+(155,767)
+(2,288)
+(958)
+(226)
+(530)
+104,189
+23,603,662
+329
+228,255
+496,723
+750
+103,110
+22,878,684
+Total
+(202)
+Stage 3
+23,632
+Personal loans
+(931)
+1,032,333
+1,032,333
+institutions
+and other financial
+Due from banks
+3,313,748
+3,313,748
+(931)
+with central banks
+Total
+Stage 3
+Provision for expected credit losses
+Stage 2
+Stage 1
+Total
+Stage 3
+Book value
+Stage 2
+Stage 1
+Cash and balances
+5,465,531
+Reverse repurchase
+521,430
+(309,051)
+(132,684)
+8,729,212 (104,732) (71,635)
+188,130
+469,341
+8,071,741
+loans and advances
+Including: Corporate
+agreements
+(400,474)
+227,825
+492,973
+13,546,702
+to customers
+Loans and advances
+(37)
+(37)
+521,430
+14,267,500 (152,877) (78,524)
+5,570
+Total
+Stage 2
+assets
+for-sale
+Held-to-
+Loans and
+advances to
+Financial
+Available-
+Debt securities
+31 December 2017
+maturity
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+262
+(34,088)
+(562)
+(5,337)
+(28,189)
+As at 31 December 2017, the analysis of the overdue situation of loans and advances to customers and bond investments of
+the Group and the Bank is as follows:
+3,195,270
+financial
+Financial
+220,988
+Impaired
+79,483
+Past due but not impaired
+59,777
+78,542
+1,467,059
+3,542,268
+held for
+226,240
+Neither past due nor impaired
+as at FVTPL
+trading
+assets
+investments
+Receivables
+customers
+assets
+designated
+13,932,977
+Stage 1
+952
+3,131,523
+343,827
+248
+1
+343,578
+Including: Discounted bills
+(432)
+(248)
+(0)
+(184)
+(184)
+248
+1
+343,578
+to customers
+Loans and advances
+FVOCI
+Total
+Stage 3
+343,827
+62,795
+(0)
+(432)
+Credit commitments
+(2,125)
+(444)
+(90)
+(1,591)
+1,561,589
+248
+1,021
+(248)
+1,560,320
+(1,693)
+(196)
+(90)
+(1,407)
+1,217,762
+1,020
+1,216,742
+Financial investments
+Total
+Public sector entities
+410
+140,227
+Derivative financial liabilities
+8,349
+10,065
+21,309
+1,348
+1,049
+42,120
+Due to banks and other financial institutions (**)
+78,737
+1,102,850
+264,097
+243,200
+21,103
+1,945,135
+Certificates of deposit
+50,770
+98,307
+117,404
+313,885
+14,450
+7,117
+67,257
+47,757
+7,746
+Total assets
+865,486
+1,836,455 1,020,089
+10,465
+3,565,985
+15,253
+6,818,253
+30,352
+4,363
+28,241
+8,752,588
+3,213,304
+26,072,160
+Liabilities:
+Due to central banks
+410
+410
+Financial liabilities designated as at FVTPL
+325,989
+186,175
+449
+Due to customers
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+266
+ICBC
+31 December 2017
+Notes to the Financial Statements
+2,247,865
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Less
+One to
+Three
+repayable
+than one
+three
+months to
+One to More than
+Overdue/
+281,380
+23,824,295
+3,731
+11,400,958
+694,147
+1,189,630
+4,793,308
+2,557,518
+11,367
+20,646,928
+Debt securities issued
+330,294
+Others
+Net liquidity gap
+19,536
+8,320
+156,604
+45,960
+31,854
+12,727,669 1,132,647 1,602,273
+(11,862,183) 703,808 (582,184)
+44,808
+149,606
+277,021
+499,291
+8,591
+83,554
+5,307,946 2,760,143 293,617
+(1,741,961) 4,058,110 8,458,971 3,213,304
+Total liabilities
+Others
+124,548
+124,548
+Total
+Assets:
+Cash and balances with central banks
+533,689
+7,303
+2,772,756
+3,313,748
+Due from banks and other
+(***)
+financial institutions (*)
+760,246
+229,712
+332,108
+99,673
+4,298
+1,552,795
+Derivative financial assets
+7,709
+126,758
+10,080
+Undated
+five years
+3,781
+318,728
+801,611 3,301,244
+988,987
+22,507
+Loans and advances to customers (**)
+902,607
+154,798
+Less
+One to
+More than
+five years
+Three
+than one
+three
+months to
+One to
+on demand
+month
+months
+one year
+repayable
+18,176
+1,249
+1,081
+50,630
+224,701
+675,993
+220,650
+28,075
+1,245,837
+-Financial investments measured
+at amortised cost
+45,788
+7
+104,760
+379,595
+2,408,462 1,439,558
+4,362,174
+Investments in subsidiaries and associates
+156,352
+156,352
+Property and equipment
+29,792
+-Financial investments measured at FVOCI
+740,645
+36,303
+126,157
+38,295
+Loans and advances to customers
+12,777
+903,927
+573,073
+2,496,675
+3,225,042
+6,933,254
+67,029
+14,211,777
+Financial investments
+-Financial investments measured at FVTPL
+6,080
+41,236
+44,088
+96,962
+392,581
+123,395
+Undated
+7,303
+on demand
+months
+2,406,842
+Certificates of deposit
+44,283
+72,616
+92,464
+11,830
+296
+221,489
+391
+Due to customers
+841,168
+1,261,067
+3,745,921
+2,527,671
+13,315
+18,894,447
+Debt securities issued
+Others
+10,505,305
+Total liabilities
+8,862
+221,053
+404
+Financial liabilities designated as at FVTPL
+60,175
+719
+46
+4,825
+8,087
+73,852
+355,043
+Derivative financial liabilities
+11,548
+19,410
+1,401
+818
+46,682
+Due to banks and other financial institutions (**)
+938,654
+882,839
+13,505
+404
+Net liquidity gap
+6,733
+8,191
+68,903
+59,266
+1,858,150 1,633,787
+(23,340) (438,181)
+Cash and balances with central banks
+Overdue/
+One to
+Three
+repayable
+Less than
+three
+months to
+Financial assets:
+One to
+one month
+months
+one year
+five years
+More than
+five years
+Undated
+(***)
+Total
+on demand
+191,349
+11,695,483
+(10,586,995)
+Non-derivative cash flows:
+Group
+132,587
+14,842
+127,169
+52,957
+4,359,674 2,743,799 294,818
+(793,840) 3,101,967 7,346,748 3,453,042
+273,922
+436,275
+6,076
+505,720
+22,585,711
+2,059,401
+31 December 2018
+(*)
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for
+more than one month.
+(ii) Maturity analysis of contractual undiscounted cash flows
+The tables below summarise the maturity profile of the Group's and of the Bank's financial instruments based on the
+contractual undiscounted cash flows. The balances of some items in the tables below are different from the balances on the
+statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's
+and the Bank's expected cash flows on these instruments may vary significantly from the following analysis. For example,
+demand deposits from customers are expected to maintain a stable or increasing balance although they have been classified
+as repayable on demand in the following tables.
+Annual Report 2018
+267
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Includes reverse repurchase agreements.
+Due to central banks
+Liabilities:
+24,645,112
+Financial assets held for trading
+5,124
+5,871
+44,397
+4,170
+510
+60,072
+Financial assets designated as at FVTPL
+1,681,356
+4,786
+1,715
+147,805
+149,146
+28,554
+4,621
+338,257
+Derivative financial assets
+10,072
+1,630
+15,916
+3,745
+296,497
+one year
+five years
+five years
+(***)
+Total
+Assets:
+Cash and balances with central banks
+485,599
+64,657
+7,598
+14,650
+3,026,571
+3,548,996
+Due from banks and other
+financial institutions (*)
+301,230
+784,273
+230,954
+14,578
+25,104
+1,983
+781
+122,387
+Others
+280,580
+65,707
+19,116
+54,465
+36,283
+44,295
+122,387
+29,894
+Total assets
+1,108,488
+1,834,810
+1,195,606
+3,565,834
+5,845,766
+7,641,566
+3,453,042
+530,340
+Property and equipment
+154,543
+154,543
+53,856
+Loans and advances to customers
+36,293
+879,979
+742,641
+2,536,478
+2,926,940
+5,922,029
+81,041
+13,125,401
+Financial investments
+80,427
+164,815
+446,438
+2,662,587
+1,641,652
+33,985
+5,029,904
+Investments in subsidiaries and associates
+month
+564,172
+Due from banks and other financial institutions (*)
+Certificates of deposit
+1,709,619
+23,294
+5,315,766
+Investments in associates and joint ventures
+32,441
+32,441
+Property and equipment
+247,744
+2,803,426
+247,744
+338,790
+72,876
+24,567
+57,084
+40,937
+45,702
+40,105
+620,061
+Others
+Total assets
+505,890
+100,504
+Derivative financial assets
+162
+15,459
+21,188
+34,609
+12,171
+5,424
+89,013
+173,033
+Loans and advances to customers
+906,587
+780,058
+2,643,941
+3,244,181
+6,195,484
+82,301
+13,892,966
+Financial investments
+40,414
+353,601
+1,273,409
+1,235,100
+18,752
+18,013
+27,290
+8,628
+5,659
+78,556
+Due to banks and other financial institutions (**)
+985,193
+214
+1,043,392
+401,526
+22,698
+45,908
+2,752,887
+2,801,101 3,376,357
+49,685
+95,928
+102,316
+254,170
+2,012,383
+Derivative financial liabilities
+1,810
+3,763,807
+6,320,429
+7,993,614
+3,488,301
+26,087,043
+Liabilities:
+Due to central banks
+22
+89,361
+10
+404
+456
+Financial liabilities designated as at FVTPL
+60,436
+1,027
+1,796
+11,523
+12,769
+20
+6,082
+30,285
+151,689
+(674,702)
+5,619,108
+(1,884,799)
+2,908,840
+365,101
+25,354,657
+4,412,116
+8,793,935
+3,322,986
+432,760
+2,344,883
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+264
+ICBC
+31 December 2017
+Notes to the Financial Statements
+(*)
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+1,822,119
+13,061,583
+(12,057,413)
+21,408,934
+Debt securities issued
+19,689
+7,021
+65,335
+238,450
+287,347
+617,842
+1,577,906
+Others
+53,041
+33,234
+90,604
+20,299
+13,266
+495,777
+Total liabilities
+Net liquidity gap
+285,333
+Overdue/
+repayable
+One to
+Three
+213,862
+299,346
+60,936
+301
+1,834,242
+Financial assets held for trading
+7,682
+6,099
+900,047
+50,873
+6,799
+8,795
+87,337
+Financial assets designated as at FVTPL
+4,786
+1,630
+1,715
+157,414
+7,089
+359,750
+Due from banks and other financial institutions (*)
+3,613,872
+Less than
+three
+on demand
+one month
+months
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+(***)
+Total
+Assets:
+Cash and balances with central banks
+529,507
+7,598
+14,578
+14,650
+3,047,539
+12,049
+12,058
+296
+Due to customers
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+Undated
+31 December 2018
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the
+negotiated terms.
+Includes reverse repurchase agreements.
+(*)
+1,016 343,014
+3,127,293 35,861,878
+13,332,476
+4,549,264 10,380,218
+1,379,098
+2,048,051
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for
+more than one month.
+1,045,478
+Total
+Financial liabilities:
+310,656
+90,633
+1,848
+13,173
+5,674
+389
+484
+514,886
+60,697
+937,070
+11,595,139
+Non-derivative cash flows:
+Due to customers
+1,129,795
+Due to banks and other financial institutions (*)
+69,065
+Financial liabilities designated as at FVTPL
+481
+410
+71
+Due to central banks
+Certificates of deposit
+321,458
+688
+5,497
+46,378
+44,867
+5,844
+-Financial investments measured at FVTPL
+Financial investments
+1,820,021
+22,605,796
+238,194
+710
+118,910
+101,025
+6,077,004 11,176,249
+1,337,250
+919,716
+11,578,642
+Due to customers
+342,153
+341,354
+449
+14,450
+4,978,718
+6,639
+417,216
+-Financial investments measured at FVOCI
+12,285
+19,034
+297,855
+Others
+5,266,440
+63,225 848,615
+23,757 1,601,635
+321,176
+1,681,478
+2,904,342
+152,175
+504,023
+40,020
+106
+-Financial investments measured at amortised cost
+873,992
+270,134
+59,844
+52,536
+196
+136,471
+36,610
+61,249
+127,262
+61,384
+1,830,609
+(595,509)
+132,359
+4,593,394 2,868,270
+(829,587) 3,452,159
+61,481
+22,589
+674,577
+374,070
+23,945,987
+7,619,544
+(200,327)
+3,488,301
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+Annual Report 2018
+265
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+2,141,056
+Bank
+(10,793,525)
+2,212,710
+10,701,914
+1,014,915
+1,387,688
+3,895,490
+2,549,415
+13,514
+19,562,936
+Debt securities issued
+Net liquidity gap
+7,330
+22,870
+200,826
+284,294
+526,940
+Others
+Total liabilities
+319,177
+12,066,934
+77,587
+11,620
+31 December 2018
+Overdue/
+ICBC
+6,453
+15,164
+3,082,911
+925,569
+490,724
+317,424
+10,896 86,316
+11,949
+1,719
+2,418
+1,545,295 1,830,287 5,635,911
+270,385
+13,064,384
+Others
+308,088
+20,209
+2,374,654
+347,741
+21,685,879
+13,414
+2,685,178
+5,075,713
+1,379,365
+569
+14,952
+144,261
+Debt securities issued
+574,257
+25,733,045
+Derivative cash flows:
+268
+Includes repurchase agreements.
+(*)
+99,088
+649
+20,704
+(5,740,714)
+5,839,802
+38,339
+(37,690)
+182,370
+(161,666)
+23,964 1,825,500 1,206,634 2,562,995
+(18,965) (1,786,499) (1,188,652) (2,547,242)
+4,999 39,001 17,982 15,753
+Cash outflow
+(283)
+1,270
+3
+65
+54
+(1,675)
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+260,274
+2,582,550
+64,328
+27,699,540
+Due to central banks
+2
+479
+Financial liabilities designated as at FVTPL
+11,698
+11,374
+719,877
+481
+438,779
+2,287,754
+Property and equipment
+139,113
+149,249
+754
+1,288
+290,404
+Others
+Total assets
+Liabilities:
+186,738
+110,120
+6,360
+135,561
+87,400
+24,272,486
+419,423
+Derivative financial liabilities
+31,440
+31,708
+Investments in subsidiaries and associates
+4,362,174
+40,716
+6,044
+64,633
+4,250,781
+- Financial investments measured at amortised cost
+1,245,837
+30,179
+152,074
+1,063,584
+- Financial investments measured at FVOCI
+740,645
+142
+2,787
+737,716
+-Financial investments measured at FVTPL
+Financial investments
+14,211,777
+31,633
+12,526
+44,821
+67,372
+Liabilities:
+26,072,160
+570,814
+100,859
+1,453,534
+23,946,953
+325,989
+131,310
+1,729
+156,867
+20,025
+Total assets
+Others
+124,548
+260
+9
+208
+124,071
+Property and equipment
+156,352
+172,925
+25,184
+645,532
+13,384,194
+RMB
+(equivalent
+USD
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+31 December 2018
+Bank
+ICBC
+276
+to RMB)
+(**) Includes repurchase agreements.
+(*)
+3,510,936
+144,248
+43,071
+505,943
+2,817,674
+Credit commitments
+2,141,056
+252,669
+Includes reverse repurchase agreements.
+Due to central banks
+HKD
+(equivalent
+to RMB)
+Total
+(equivalent
+to RMB)
+Loans and advances to customers
+38,295
+3,218
+16
+4,743
+30,318
+Derivative financial assets
+1,552,795
+87,957
+Others
+(equivalent
+to RMB)
+21,196
+1,003,670
+Due from banks and other financial institutions (*)
+3,313,748
+52,793
+1,860
+111,034
+3,148,061
+Cash and balances with central banks
+Assets:
+439,972
+2
+408
+410
+USD
+31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+277
+Annual Report 2018
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+RMB
+3,195,270
+15,850
+581,922
+2,456,418
+Credit commitments
+2,247,865
+188,923
+34,674
+44,938
+1,979,330
+141,080
+Net position
+(equivalent
+to RMB)
+(equivalent
+Financial assets held for trading
+1,681,356
+37,577
+18,396
+308,257
+1,317,126
+Due from banks and other financial institutions (*)
+3,548,996
+48,040
+HKD
+(equivalent
+1,751
+3,346,117
+Cash and balances with central banks
+Assets:
+to RMB)
+to RMB)
+to RMB)
+(equivalent
+Total
+Others
+153,088
+17,501
+23,824,295
+66,185
+188,586
+26,178
+Certificates of deposit
+1,945,135
+127,347
+41,883
+383,985
+1,391,920
+Due to banks and other financial institutions (**)
+9,026
+42,120
+15
+6,388
+33,109
+Derivative financial liabilities
+78,737
+58,673
+8,582
+11,482
+Financial liabilities designated as at FVTPL
+2,608
+381,891
+57,590
+Due to customers
+1,408,596
+21,967,623
+330,294
+9,881
+820
+51,007
+268,586
+Total liabilities
+Others
+281,380
+499,291
+1,013
+206,751
+264,230
+Debt securities issued
+20,646,928
+98,087
+13,428
+563,297
+19,972,116
+27,297
+101,705
+1,769,181
+Net position
+to RMB)
+RMB
+Total
+(equivalent
+(equivalent
+Others
+HKD
+(equivalent
+(equivalent
+USD
+Assets:
+to RMB)
+31 December 2017
+Notes to the Financial Statements
+275
+Annual Report 2018
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+3,229,512
+135,933
+65,563
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+551,927
+to RMB)
+Cash and balances with central banks
+1,403
+12,302
+338,276
+Financial assets designated as at FVTPL
+87,337
+16,052
+4,355
+66,930
+Financial assets held for trading
+to RMB)
+1,834,242
+12,961
+474,008
+1,302,946
+Due from banks and other financial institutions (*)
+3,613,872
+78,734
+18,834
+161,857
+3,354,447
+44,327
+1,620
+2,476,089
+2,344,883
+212,825
+313,342
+823,474
+20,059,293
+Due to customers
+341,354
+58,567
+13,115
+242,586
+21,408,934
+27,086
+2,329,296
+149,725
+27,341
+677,109
+1,475,121
+Due to banks and other financial institutions (**)
+73,573
+7,701
+1,752
+Certificates of deposit
+Credit commitments
+Debt securities issued
+301,010
+169,020
+49,605
+109,292
+2,016,966
+Net position
+25,354,657
+550,857
+369,818
+2,178,462
+273,881
+22,255,520
+18,406
+10,143
+91,201
+376,027
+Total liabilities
+Others
+617,842
+38,826
+4,125
+495,777
+32,412
+353,601
+38,019
+260,274
+64,230
+11,518
+164,308
+20,218
+Certificates of deposit
+2,752,887
+120,522
+28,831
+Due to customers
+734,390
+Due to banks and other financial institutions (**)
+78,556
+7,682
+3,964
+27,047
+39,863
+Derivative financial liabilities
+89,361
+61,152
+1,869,144
+7,314
+18,377,621
+262,791
+23,945,987
+500,347
+317,893
+1,949,100
+21,178,647
+674,577
+15,213
+10,120
+65,228
+722,852
+584,016
+Others
+526,940
+29,124
+669
+227,961
+266,870
+Debt securities issued
+19,562,936
+199,672
+Total liabilities
+Derivative financial assets
+20,895
+456
+1,498
+907
+1,651
+Investments in associates and joint ventures
+5,315,766
+87,613
+26,117
+280,390
+4,921,646
+28,385
+Financial investments
+274,669
+263,423
+894,502
+12,460,372
+Loans and advances to customers
+89,013
+5,888
+6,828
+38,278
+13,892,966
+Financial liabilities designated as at FVTPL
+32,441
+134,446
+436
+20
+Due to central banks
+Liabilities:
+26,087,043
+753,016
+335,394
+2,050,805
+22,947,828
+Property and equipment
+Total assets
+214,354
+3,594
+73,018
+329,095
+Others
+247,744
+1,374
+736
+111,188
+620,061
+26,610
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between
+the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk in the
+banking book is disclosed in note 51(d).
+827
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2018
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the
+negotiated terms.
+(*) Includes reverse repurchase agreements.
+33,824,242
+3,066,959
+12,736,320
+9,698,497
+907,662 1,859,197 1,242,061 4,313,546
+246,663
+923
+69
+5,084,835
+1,648,977
+2,831,131
+46
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+99,198
+1,967,173
+22,990
+252,250
+271,059
+317,618
+51,316
+Certificates of deposit
+1,103,256
+Due to banks and other financial institutions (*)
+177
+80,499
+4,404
+67,257
+Financial liabilities designated as at FVTPL
+410
+410
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+8,838
+3,713
+13,354
+228,381
+Financial investments
+21,343,585
+234,253
+10,684,505
+5,577,768
+3,131,617
+736,487
+965,693
+13,262
+-Financial investments measured at FVTPL
+Loans and advances to customers (**)
+5,919
+131,115
+357,687
+290,240
+762,308
+126,903
+Due from banks and other financial institutions (*)
+3,317,491
+2,772,756
+1,674,172
+121,031
+5,194
+45,646
+Others
+464,803
+109,817
+30,070
+37
+-Financial investments measured at amortised cost
+1,383,999
+23,125
+256,583
+41,755
+758,610
+52,415
+46,017
+196
+-Financial investments measured at FVOCI
+773,497
+35,902
+140,267
+399,827
+104,906
+247,053
+14,952
+569
+287,066
+Financial assets:
+Non-derivative cash flows:
+Total
+Undated
+(***)
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+months
+Cash and balances with central banks
+on demand one month
+Less than
+repayable
+One to
+Overdue/
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+31 December 2017
+ICBC
+270
+three
+Includes repurchase agreements.
+485,599
+18,664
+4,675
+Financial assets designated as at FVTPL
+62,051
+575
+4,557
+45,691
+5,996
+5,232
+Financial assets held for trading
+7,598
+1,701,318
+68,413
+305,769
+234,601
+786,537
+301,494
+Due from banks and other financial institutions (*)
+3,553,082
+3,026,571
+14,650
+4,504
+7,303
+(*)
+(131)
+1,084,375
+12,719,592
+634,852
+329,271
+213,718
+62,251
+540
+9,548
+215
+479
+147,054
+1,599,494
+Others
+Debt securities issued
+20,860,523
+12,650
+2,656,523
+4,874,953
+1,219,474
+694,898
+11,402,025
+Due to customers
+20,064
+17,825
+5,315,429
+2,308
+7,242
+(4,927,716)
+(1,764)
+4,945,541
+1,633
+1,389,661 1,058,088 2,407,099
+89,060
+(1,387,210) (1,055,535) (2,401,389) (81,818)
+2,553
+5,710
+2,451
+Cash outflow
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+1,870
+2,919,301
+(188)
+6
+62
+16
+(425)
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+23,982,989
+344,798
+152,466
+153
+3,743
+533,689
+Total
+328,444
+Others
+3,319,794
+631,417
+197,328
+109,323
+424
+Financial investments
+20,125,680
+28,573
+235,552
+5,408,201
+3,228,857
+943,429
+974,577
+40,970
+Loans and advances to customers (**)
+339,871
+4,996
+31,276
+9,294,094
+157,443
+29,028
+6,271
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2017
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for
+more than one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the
+negotiated terms.
+Includes reverse repurchase agreements.
+(*)
+4,665
+32,731,036
+11,351,426
+4,378,003 8,968,670
+1,414,157
+2,032,905
+1,264,894
+398,212
+303
+23,878 6,294,555
+2,012,391
+928
+3,320,981
+Three
+months to
+one year
+137,453
+1,741
+Cash and balances with central banks
+Financial assets:
+Total
+(***)
+Undated
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+529,507
+months
+three
+Less than
+repayable
+One to
+Overdue/
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Non-derivative cash flows:
+31 December 2017
+on demand one month
+2,007
+7,598
+14,650
+4,955
+Financial assets designated as at FVTPL
+99,639
+8,713
+12,429
+12,003
+52,330
+6,284
+7,880
+18,692
+Financial assets held for trading
+308
+64,958
+308,631
+217,389
+903,213
+360,594
+Due from banks and other financial institutions (*)
+3,617,986
+3,047,539
+1,855,093
+1,741
+five years
+Undated
+(*)
+31,241
+4,494,233
+(4,462,992)
+48,177
+(46,522)
+1,655
+913,371 2,032,741 151,844
+(906,872) (2,019,388) (149,409)
+13,353
+2,435
+6,499
+10,846 1,337,254
+(10,773) (1,330,028)
+7,226
+73
+- Cash outflow
+Includes repurchase agreements.
+- Cash inflow
+8,047
+249
+3,098
+3,780
+141
+779
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+23,930,902
+Derivative financial instruments settled on gross basis
+437,334
+Annual Report 2018
+Notes to the Financial Statements
+(***)
+Undated
+More than
+five years
+five years
+one year
+months
+one month
+on demand
+One to
+269
+Three
+months to
+Less than
+One to
+Overdue/
+repayable
+Cash and balances with central banks
+Financial assets:
+Non-derivative cash flows:
+31 December 2018
+Bank
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+three
+One to More than
+five years
+296,126
+12,017
+2,984,750
+411,610
+257,957
+1,046,611
+2,378
+14,291
+10,462
+965
+1,000
+63,375
+985,556
+26,343
+Due to banks and other financial institutions (*)
+457
+404
+21
+10
+22
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Financial liabilities designated as at FVTPL
+5,732
+62,692
+Certificates of deposit
+685,548
+351,122
+272,959
+40,985
+12,946
+1,996
+2,671
+1,800,838 4,544,940
+263,005
+19,802,526
+15,087
+2,646,341
+3,975,296
+92,471
+2,790,769
+1,430,458
+12,395
+103,895
+96,506
+49,886
+1,024,078
+7,536
+13,301
+2,142,434
+260,409
+12,020,606
+Others
+Debt securities issued
+10,711,266
+Due to customers
+323
+2,007
+127,719
+154,500
+46
+23
+15
+49
+314
+111
+54
+17
+120
+4
+54
+Lowest
+Highest
+Average
+31 December 2017
+2017
+Total portfolio VaR
+Commodity risk
+Interest rate risk
+Currency risk
+52
+25
+113
+62
+360
+Currency
+Group
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant, on profit before taxation and
+equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity, while a positive
+amount reflects a potential net increase. This effect, however, is based on the assumption that the Group's and the Bank's
+foreign exchange exposures as at the year end are kept unchanged and, therefore, have not incorporated actions that would
+be taken by the Group and the Bank to mitigate the adverse impact of this currency risk.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+(ii) Currency risk
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+136
+Notes to the Financial Statements
+Annual Report 2018
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+(3)
+(2)
+(1) VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaR does not add up to the total
+portfolio VaR.
+62
+273
+Change in
+currency rate
+74
+7
+The Group considers the market risk arising from stock prices fluctuations in respect of its investment portfolios as
+immaterial.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+272
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+58,041
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+(c) Market risk
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major market
+risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Value-at-risk ("VaR") analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the
+parent company and a sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both
+trading and non-trading portfolios).
+3,476,117
+1,027,429
+657,496
+283,876
+97,993
+1,038,989
+Credit commitments
+Total
+five years
+five years
+370,334
+88
+(i) VaR
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+39
+23
+7
+43
+115
+64
+66
+Total portfolio VaR
+Commodity risk
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+Currency risk
+42
+28
+32
+Interest rate risk
+Lowest
+Highest
+Average
+31 December 2018
+2018
+15
+one year
+Effect on profit
+before taxation
+2018
+13,537,076
+Loans and advances to customers
+71,335
+8,410
+4,817
+28,169
+29,939
+Derivative financial assets
+1,696,498
+882,110
+57,606
+621,782
+990,549
+Due from banks and other financial institutions (*)
+3,372,576
+85,044
+8,121
+121,780
+3,157,631
+Cash and balances with central banks
+26,561
+to RMB)
+341,564
+15,046,132
+Investments in associates and joint ventures
+4,519,182
+50,673
+24,594
+89,283
+4,354,632
+- Financial investments measured at amortised cost
+1,430,163
+59,771
+285,382
+4,011
+1,112,791
+- Financial investments measured at FVOCI
+805,347
+9,532
+2,641
+29,984
+763,190
+― Financial investments measured at FVTPL
+Financial investments
+253,590
+Effect on equity
+Total
+(equivalent
+to RMB)
+2017
+Effect on profit
+before taxation
+2018
+Change in
+currency rate
+HKD
+Currency
+USD
+Bank
+(297)
+(1,026)
+(1,298)
+307
+Effect on equity
+2018
+366
+HKD
+(332)
+23
+44
+-1%
+USD
+2017
+2018
+2017
+-1%
+Others
+(equivalent
+to RMB)
+2017
+66
+to RMB)
+RMB
+HKD
+(equivalent
+(equivalent
+USD
+Assets:
+31 December 2018
+Group
+A breakdown of the assets and liabilities analysed by currency is as follows:
+56
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+ICBC
+274
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+-1%
+-1%
+(25)
+(35)
+(37)
+(44)
+22
+82
+Notes to the Financial Statements
+1,687
+More than
+Three
+months to
+73,124
+2,422,443
+469
+9,084
+363,811
+224,426
+75,887
+9,991
+4,948
+93,918
+51
+10,506,313
+Due to customers
+Certificates of deposit
+60,175
+939,006
+Due to banks and other financial institutions (*)
+Financial liabilities designated as at FVTPL
+404
+404
+Due to central banks
+722
+885,647
+44,459
+847,693
+Financial liabilities:
+12,176
+224,000
+11,638,307
+142,322
+2,903
+1,414
+788
+580,556
+338,744
+195,414
+30,482
+323
+9,025
+427
+132,813
+Others
+6,891
+Debt securities issued
+19,083,444
+14,858
+2,607,674
+3,810,738
+1,296,168
+3,977
+1,789,389 1,603,221
+Non-derivative cash flows:
+Undated
+322,730
+3,633
+28,455
+8,886,493 229,954
+1,919,091 34,239
+42
+300
+3,156,686
+304
+658
+23,444
+22,566
+283,889
+Others
+19,047,183
+566,079
+88,538
+214
+Financial investments
+4,964,245
+3,088,065
+896,919
+944,690
+36,817
+Loans and advances to customers (**)
+187,406
+Total
+5,952,253
+1,112,688
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2017
+331,203
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+Includes reverse repurchase agreements.
+(*)
+30,969,820
+3,294,697
+10,839,160
+8,348,705
+4,148,631
+1,369,037
+1,856,902
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+One to
+4,304,685 2,836,157
+22,529,056
+649,759
+281,759
+123,905
+1,043,584
+Credit commitments
+Total
+More than
+five years
+five years
+one year
+1,040,917
+One to
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+Three
+3,229,512
+194,676
+873,022
+614,062
+236,602
+months to
+143,694
+371,012
+Bank
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+Total
+3,195,270
+199,415
+895,156
+604,926
+233,170
+115,672
+3,510,936
+More than
+five years
+one year
+One to
+Three
+months to
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+1,146,931
+31 December 2017
+Credit commitments
+31 December 2018
+five years
+357,297
+1,167,456
+More than
+five years
+(3,798,059)
+(1,551)
+(77,407)
+3,813,684
+1,477
+78,038
+827,776 1,877,540
+(822,752) (1,867,131)
+5,024
+10,409
+(365)
+1,028,853
+(1,029,218)
+631
+- Cash outflow
+Derivative financial instruments settled on gross basis
+2,275
+28
+287
+1,018
+336
+606
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+- Cash inflow
+Total
+(74)
+(*)
+five years
+one year
+three months
+One to
+months to
+One to
+Less than
+one month
+Repayable
+on demand
+Three
+15,625
+31 December 2017
+31 December 2018
+Management does not expect all of the commitments will be drawn before the expiry of the commitments.
+Group
+(iii) Analysis of credit commitments by contractual expiry date
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+271
+Annual Report 2018
+Includes repurchase agreements.
+Credit commitments
+1,817
+Derivative financial liabilities
+60,072
+21,087
+667
+149,032
+265,489
+Debt securities issued
+18,894,447
+77,705
+13,431
+512,443
+18,290,868
+Due to customers
+221,489
+61,822
+6,854
+133,840
+18,973
+Certificates of deposit
+2,406,842
+88,479
+43,260
+466,803
+1,808,300
+Due to banks and other financial institutions (**)
+46,682
+1,346
+436,275
+Others
+Total liabilities
+461,882
+ICBC
+278
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+3,476,117
+118,441
+11,090
+552,981
+2,793,605
+Credit commitments
+2,059,401
+36
+262,439
+26,290
+1,742,879
+Net position
+22,585,711
+320,207
+69,111
+1,300,407
+20,895,986
+505,720
+8,219
+4,863
+30,756
+27,793
+5,583
+214
+73,852
+31,633
+Investments in subsidiaries and associates
+5,029,904
+57,988
+12,983
+185,927
+4,773,006
+Financial investments
+13,125,401
+154,703
+18,492
+642,281
+12,309,925
+Loans and advances to customers
+53,856
+5,216
+2
+39,938
+Derivative financial assets
+338,257
+1,606
+523
+336,128
+Financial assets designated as at FVTPL
+39,717
+11,897
+44,820
+8,700
+154,543
+61,145
+66,193
+1,950
+10,757
+Financial liabilities designated as at FVTPL
+404
+Due to central banks
+Liabilities:
+24,645,112
+582,646
+96,904
+1,326,697
+22,638,865
+404
+530,340
+Total assets
+Property and equipment
+216
+121,972
+189
+122,387
+10
+304,979
+13,991
+450
+210,920
+Others
+Financial liabilities related to
+precious metals
+Wealth management products
+Financial liabilities designated as at FVTPL
+Due to customers
+fair value on a recurring basis:
+Financial liabilities which are measured at
+1,430,163
+2,843,490
+Other investments
+307
+19,939
+227,690
+1,128,949
+2,287,783
+281,275
+328,017
+1,399,937
+143
+19,489
+9,727
+Other debt securities issued
+703
+29,919
+307
+Others
+130
+851,647
+Equity investments
+41,713
+235
+Exchange rate contracts
+Derivative financial liabilities
+87,400
+1,372
+85,898
+851,647
+6,369
+4,867
+130
+2,285
+2,285
+67,266
+67,266
+11,480
+11,480
+1,372
+1,119,222
+measured at FVOCI
+Debt securities
+349,460
+11,023
+245
+Loans and advances to customers
+1,368
+444
+924
+measured at FVTPL
+Loans and advances to customers
+174,794
+174,794
+measured at FVTPL
+Reverse repurchase
+71,335
+960
+65,356
+5,019
+360,483
+Financial investments measured at FVTPL
+Debt securities
+3,802
+Financial investments measured at FVOCI
+805,347
+206,347
+568,300
+30,700
+533,608
+151,513
+362,672
+280,572
+19,423
+27,990
+20,107
+408
+7,475
+Equity investments
+243,749
+34,727
+205,220
+Funds and other investments
+42,193
+12,748,893
+86
+1,892,599
+1,503,987
+26,087,043
+Liabilities:
+Due to central banks
+Financial liabilities designated as
+at FVTPL
+32
+20
+404
+1,180
+7,395
+10,374
+456
+70,412
+89,361
+Derivative financial liabilities
+3,165,525
+5,195,915
+14,329,017
+Total assets
+384,969
+524,266
+2,688,511
+1,694,726
+23,294
+5,315,766
+Investments in associates and
+joint ventures
+78,556
+32,441
+Property and equipment
+247,744
+247,744
+Others
+6,277
+141
+613,643
+620,061
+32,441
+78,556
+Due to banks and
+other financial institutions (**)
+20,919
+ICBC
+1,012,620
+3,546
+1,004,958
+4,116
+73,573
+2,174
+84,631
+2,218
+67,413
+14,859
+1,199
+9,995
+3,665
+Commodity derivatives and others
+16,521
+730
+15,705
+3,986
+Interest rate contracts
+Others
+19,562,936
+2,283,966
+433,980
+13,719
+6,057
+15,165
+2,752,887
+Certificates of deposit
+159,465
+Debt securities issued
+97,204
+296
+260,274
+Due to customers
+12,971
+3,891,544
+2,547,149
+13,514
+361,836
+3,309
+584
+15,280,385
+3,918
+15,902,801
+17,190,992
+2,406,920
+2,644,885
+500
+Refers to risk-weighted assets after capital floor and adjustments.
+(i)
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+Core tier 1 capital adequacy ratio
+Risk-weighted assets (i)
+Net capital base
+financial institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital instruments issued by
+500
+Tier 2 capital deductions
+3,303
+12.98%
+12.77%
+13.45%
+13.27%
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+Financial investments
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the framework of
+fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair value measurement
+policies specify valuation techniques, parameter selection and relevant concepts, models and parameter solutions. Operating
+procedures specify measurement operating procedures, valuation date, market parameter selection and corresponding allocation
+of responsibilities. In the process of fair value measurement, front office is responsible for daily transactions management. Financial
+Accounting Department plays a lead role of developing accounting policies of fair value measurement, valuation methodologies
+and system implementation. Risk Management Department is responsible for verifying trade details and valuation models.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+286
+1,991
+valuation techniques which use inputs which have a significant effect on the recorded fair value that are not
+based on observable market data.
+valuation techniques for which all inputs which have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+Level 2:
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 1:
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+52. FAIR VALUE OF FINANCIAL INSTRUMENTS
+15.14%
+15.39%
+Level 3:
+Valid portion of minority interests
+71,736
+127,990
+7,980
+7,980
+Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+(3,708)
+(3,739)
+that are not fair valued on the balance sheet
+Cash flow hedge reserves that relate to the hedging of items
+1,532
+Net core tier 1 capital
+1,927
+8,478
+8,820
+Goodwill
+14,282
+14,988
+(61,063)
+(11,646)
+2,716
+Other intangible assets other than land use rights
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+2,232,033
+Additional tier 1 capital
+Surplus provision for loan impairment
+222,321
+202,761
+Valid portion of tier 2 capital instruments and related premium
+297,360
+332,742
+Tier 2 capital
+2,110,060
+2,030,108
+2,312,143
+577
+735
+Valid portion of minority interests
+79,375
+79,375
+Additional tier 1 capital instruments and related premium
+79,952
+80,110
+Net tier 1 capital
+8,469
+Derivatives
+Structured products are mainly valued using dealer's quotations.
+671,444
+674,577
+Total liabilities
+Financial investments
+4,451,161
+2,717,791
+299,237
+1,197,413
+23,945,987
+Interest rate mismatch
+(951,368)
+744,754
+447,734
+1,593,362
+N/A
+N/A
+(*)
+410
+406
+99
+526,940
+Commodity derivatives and others
+16,222
+88
+15,623
+511
+Interest rate contracts
+42,142
+288
+Includes reverse repurchase agreements.
+41,264
+Exchange rate contracts
+Derivative financial asset
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+142,430
+278,960
+590
+(**) Includes repurchase agreements.
+The above table lists the data including the trading book.
+282
+91,203
+485
+21,066
+Level 2
+Level 1
+31 December 2018
+Group
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+331,360
+(a) Financial instruments recorded at fair value
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+287
+Annual Report 2018
+For unquoted other liabilities designated as at FVTPL, the discounted cash flow model is used based on current yield curve
+appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied
+based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which is calibrated by active
+market quotes of standard European options with the same underlying.
+Other liabilities designated as at fair value through profit or loss
+The loans and advances to customers valued by the valuation technology are mainly the bill business and the discounted
+cash flow model is used. For the bank acceptance bill, based on the different credit risk of the acceptor, the interest rate
+curve is set up with the actual transaction data in the market as the sample; for the commercial bill, based on the interbank
+offered rate, the interest rate curve is constructed according to the credit risk and liquidity point difference adjustment.
+Loans and advances to customers
+(In RMB millions, unless otherwise stated)
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc.
+1,108,681
+Due from banks and
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Bank's assets and
+liabilities:
+31 December 2018
+Less than
+three
+months
+Three
+months to
+one year
+other financial institutions (*)
+Non-
+More than
+five years
+interest-
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,987,947
+325,801
+3,313,748
+One to
+five years
+13,892,966
+300,248
+163,052
+2,502
+HKD
+(175)
+175
+Others
+624
+(383)
+(624)
+383
+Total
+(3,293)
+(31,058)
+3,293
+33,259
+2017
+Increased by 100 basis points
+Effect on
+500
+(2,501)
+(500)
+USD
+4,271
+44,688
+Bank
+2018
+Increased by 100 basis points
+Effect on
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Effect on
+Currency
+equity
+net interest income
+equity
+RMB
+(3,242)
+(28,174)
+3,242
+30,374
+net interest income
+Decreased by 100 basis points
+Effect on
+Effect on
+Currency
+Total
+(3,636)
+(37,319)
+3,636
+39,408
+280
+ICBC
+Notes to the Financial Statements
+457
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+31 December 2018
+Less than
+three
+months
+Three
+months to
+one year
+Non-
+One to
+five years
+More than
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's and the Bank's current interest rate risk profile. This effect, however, does not incorporate
+actions that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+(42,300)
+(117)
+117
+net interest income
+equity
+net interest income
+equity
+RMB
+(2,796)
+(34,021)
+2,796
+(457)
+36,109
+(860)
+(2,841)
+860
+2,842
+HKD
+(97)
+97
+Others
+USD
+five years
+(4,271)
+(90)
+2018
+Increased by 100 basis points
+Effect on
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Currency
+net interest income
+equity
+net interest income
+equity
+RMB
+(3,281)
+(30,513)
+3,281
+33,093
+USD
+HKD
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+279
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(d) Interest rate risk in the banking book
+Interest rate risk in the banking book is defined as the risk of loss in the overall gain and economic value of the banking
+book arising from adverse movements in interest rate and term structure, etc. This risk may occur in the following situations:
+when the interest rate fluctuates, because the repricing period of different financial instruments is different, the debt interest
+rate repricing date is earlier than the asset interest rate when interest rate rising and vice versa. The bank will face to the risk
+of reduced or even negative spreads over certain period of time; when the pricing benchmark interest rates are different, the
+changes in the benchmark interest rates are inconsistent; when there are embedded option terms or implied options in the
+business of holding options derivatives or banking book's on and off balance sheet business; and due to changes in expected
+default levels or market liquidity, the market's assessment of the credit quality of financial instruments changes, leading to
+changes in credit spreads.
+The Group manages the interest rate risk of banking book through the Asset and the Liability Management Department,
+following methods have been adopted:
+.
+•
+•
+Others
+Interest rate prediction: analysing the macroeconomic factors that may impact on the PBOC benchmark interest rates
+and market interest rates;
+Pricing management: managing the deviation of the pricing of interest-generating assets and the benchmark interest
+rates or market interest rates;
+Quota management: optimising the positions of interest-generating assets and interest-bearing liabilities and control
+the impact on profit and loss and equity; and
+Derivative trading: using interest rate derivatives for hedging management in a timely manner.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+revenue.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables
+held constant, of the Group's and the Bank's net interest income and equity. The following table lists the data including the
+trading book.
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming year,
+including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates on
+other comprehensive income, calculated by revaluing fixed rate available-for-sale financial assets held at year end, including
+the effect of any associated hedges.
+Annual Report 2018
+Duration management: optimising the differences in timing between contractual repricing (maturities) of interest-
+generating assets and interest-bearing liabilities;
+Total
+(1,645)
+(5,679)
+equity
+RMB
+(2,945)
+(35,901)
+2,945
+38,284
+USD
+HKD
+net interest income
+Others
+(1,911)
+(5,574)
+1,911
+5,578
+495
+(495)
+90
+(825)
+Total
+826
+equity
+Currency
+1,645
+5,683
+936
+(936)
+(59)
+(690)
+59
+691
+net interest income
+(4,049)
+4,049
+39,467
+2017
+Increased by 100 basis points
+Effect on
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+(36,882)
+57,728
+interest-
+bearing
+Assets:
+(133,897)
+(391,953)
+1,058,350
+1,467
+340,564
+1,684,757
+484,569
+1,237,538
+N/A
+495,777
+3,752
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+The above table lists the data including the trading book.
+Annual Report 2018
+281
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+31 December 2017
+Interest rate mismatch
+2,716,540
+5,205,901
+617,842
+132,971
+873
+449
+341,354
+Due to customers
+13,519,006
+4,709,018
+2,577,977
+Less than
+three
+months
+11,468
+21,408,934
+Debt securities issued
+Others
+Total liabilities
+176,592
+7,935
+15,854,114
+52,694
+354
+105,509
+1,452
+283,047
+591,465
+Three
+months to
+one year
+Non-
+One to
+6,613
+8,795
+87,337
+Financial assets designated as
+at FVTPL
+8,572
+156,503
+149,682
+6,008
+27,917
+353,601
+Derivative financial assets
+89,013
+89,013
+Loans and advances to customers
+9,243,369
+4,163,670
+265,147
+10,927
+207,061
+51,087
+Financial assets held for trading
+More than
+interest-
+five years
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+14,834
+3,224,896
+3,613,872
+Due from banks and
+other financial institutions (*)
+1,446,100
+56,177
+291
+31,426
+1,834,242
+388,976
+Total
+Certificates of deposit
+14,297
+Financial investments
+-Financial investments measured
+at FVTPL
+115,666
+109,835
+382,531
+127,288
+70,027
+805,347
+― Financial investments measured
+at FVOCI
+179,158
+245,075
+715,623
+261,355
+28,952
+1,430,163
+- Financial investments measured
+at amortised cost
+15,046,132
+57,058
+181,472
+207,848
+Cash and balances with central banks
+3,041,055
+331,521
+3,372,576
+Due from banks and
+other financial institutions (*)
+1,259,592
+313,451
+239,828
+66,142
+56,740
+1,696,498
+Derivative financial assets
+71,335
+71,335
+Loans and advances to customers
+10,876,334
+3,723,420
+573
+421,975
+2,402,746
+1,454,633
+Financial liabilities designated as
+71
+410
+481
+at FVTPL
+4,443
+9,323
+73,634
+Due to central banks
+87,400
+73,573
+73,573
+Due to banks and
+other financial institutions (**)
+1,943,520
+306,350
+20,996
+44,133
+Derivative financial liabilities
+2,329,296
+Liabilities:
+1,365,164
+4,519,182
+Investments in associates and joint
+ventures
+29,124
+29,124
+Property and equipment
+290,404
+290,404
+27,699,540
+Others
+192
+430,003
+438,779
+Total assets
+15,720,217
+4,813,948
+3,774,890
+2,025,321
+8,584
+25,354,657
+288
+N/A
+Due to banks and
+46,682
+46,682
+Derivative financial liabilities
+73,852
+60,174
+other financial institutions (**)
+4,826
+at FVTPL
+404
+404
+Financial liabilities designated as
+Due to central banks
+Liabilities:
+1,180
+24,645,112
+2,039,083
+3,936
+300,639
+13,315
+2,525,217
+3,743,406
+12,311,870
+Due to customers
+355,697
+221,489
+3,092
+87,351
+130,750
+Certificates of deposit
+2,406,842
+8,126
+296
+18,894,447
+1,346,007
+2,913,584
+50,879
+58,639
+165,498
+4,091,956
+460,613
+347,099
+Financial investments
+13,125,401
+8,758,429
+53,856
+53,856
+Derivative financial assets
+338,257
+9,406
+26,796
+Loans and advances to customers
+1,713,120
+2,560,880
+33,985
+5,041,002
+13,631,399
+Total assets
+530,340
+530,340
+Others
+1,627,327
+122,387
+Property and equipment
+154,543
+154,543
+associates
+Investments in subsidiaries and
+5,029,904
+122,387
+Debt securities issued
+75,551
+11,682
+2,044,390
+2,247,021
+Core tier 1 capital
+31 December 2017
+31 December 2018
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+Paid-in capital
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+285
+Annual Report 2018
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy
+ratio in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements. The
+requirements pursuant to these regulations may have certain differences comparing to those applicable in Hong Kong and
+other jurisdictions.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the former CBRC officially
+approved the Bank to adopt advanced capital management approaches. Within the scope of the approval, the foundation
+internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit risk, the internal
+model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory requirements.
+Domestic commercial banks should meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For domestic systemically important banks, minimum
+core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio should reach 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, corresponding minimum ratios should reach 7.50%, 8.50% and
+10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and the
+requirements of capital adequacy ratios differ by countries.
+Financial Statements for the year ended 31 December 2018
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBIRC. The
+required information is respectively filed with the CBIRC by the Group and the Bank semi-annually and quarterly.
+356,407
+Valid portion of capital reserve
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+1,096,868
+1,205,924
+Retained profits
+356,407
+264,850
+General reserve
+232,660
+261,636
+Surplus reserve
+151,952
+151,968
+278,980
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution
+policy, issue or repurchase own shares, qualifying other tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Interest rate mismatch
+22,585,711
+921,341
+287,533
+2,615,441
+4,202,962
+(927,035)
+14,558,434
+505,720
+505,720
+Others
+436,275
+273,922
+75,120
+Total liabilities
+838,040
+298,143
+1,425,587
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+•
+•
+•
+The Group's objectives on capital management are:
+(e) Capital management
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+284
+The above table lists the data including the trading book.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+N/A
+147,140
+147,805
+7,672
+at FVTPL
+26,072,160
+1,114,813
+1,813,557
+3,571,092
+4,666,430
+14,906,268
+Due to central banks
+Liabilities:
+325,989
+325,989
+Others
+124,548
+124,548
+Property and equipment
+Total assets
+156,352
+Financial liabilities designated as
+410
+240,926
+110,252
+169,806
+Certificates of deposit
+1,684,536
+other financial institutions (**)
+Due to banks and
+at FVTPL
+42,120
+Derivative financial liabilities
+78,737
+67,257
+7,117
+4,363
+410
+42,120
+156,352
+associates
+Investments in subsidiaries and
+111,281
+― Financial investments measured
+at FVTPL
+Financial investments
+14,211,777
+52,336
+47,558
+97,766
+130,998
+10,354,973
+Loans and advances to customers
+38,295
+38,295
+Derivative financial assets
+1,552,795
+3,625,912
+370,450
+118,797
+42,351
+4,362,174
+1,433,558
+2,344,397
+386,087
+198,132
+- Financial investments measured
+at amortised cost
+7,110
+28,075
+213,159
+634,044
+225,305
+145,254
+at FVOCI
+- Financial investments measured
+740,645
+14,235
+5,438
+1,245,837
+Due to customers
+Total
+bearing
+five years
+five years
+interest-
+More than
+Assets:
+One to
+Three
+months to
+one year
+Less than
+three
+months
+31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+283
+Non-
+Cash and balances with central banks
+3,164,066
+384,930
+1,945,135
+Financial assets designated as
+60,072
+358
+3,639
+44,397
+11,678
+Financial assets held for trading
+1,681,356
+5,681
+36,427
+296,231
+1,343,017
+other financial institutions (*)
+3,548,996
+Annual Report 2018
+The above table lists the data including the trading book.
+Due from banks and
+Includes reverse repurchase agreements.
+Others
+499,291
+277,021
+38,944
+32,153
+151,173
+20,646,928
+538,927
+10,777
+281,380
+449
+873
+2,552,657
+4,523,686
+(**) Includes repurchase agreements.
+13,020,881
+330,294
+330,294
+Debt securities issued
+15,026,396
+N/A
+Total liabilities
+N/A
+1,525,310
+956,856
+(244,950)
+(*)
+Interest rate mismatch
+(120,128)
+23,824,295
+984,036
+288,247
+2,614,236
+4,911,380
+26.6
+2,504,493
+31.4
+6,914,401
+(%)
+73.4
+6,134,322
+2,802,542
+68.6
+20
+100.0
+8,936,864
+100.0
+Corporate loans rose by RMB482,030 million or 5.4% from the end of last year, mainly because the Bank continuously
+reinforced the financing support for enterprises in the high-end manufacturing sector, and supported the investment and
+financing demands of key projects, livelihood projects and projects under construction in fields such as interconnection
+among transportation infrastructure, urban infrastructure and public services, centering on major strategic planning such as
+three supporting belts, Xiongan New Area and Guangdong-Hong Kong-Macau Greater Bay Area.
+20
+ICBC
+In RMB millions, except for percentages
+Amount
+Discussion and Analysis
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+9,418,894
+(%)
+15,419,905
+Percentage
+2.4
+364,437
+At 31 December 2017
+351,126
+2.5
+5,636,574
+36.6
+100.0
+4,945,458
+14,233,448
+Amount
+34.7
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+Item
+Short-term corporate loans
+Medium to long-term corporate loans
+Total
+In RMB millions, except for percentages
+At 31 December 2017
+At 31 December 2018
+Percentage
+100.0
+At 31 December 2018
+In 2018, the Bank augmented its efforts in supporting the real economy, moderately expanded investment scale
+and enhanced capital usage efficiency. As at the end of 2018, investment (excluding accrued interest) amounted to
+RMB6,670,331 million, RMB913,627 million or 15.9% higher compared with the end of the previous year.
+Item
+Total
+5,636,574
+100.0
+4,945,458
+100.0
+Personal loans increased by RMB691,116 million or 14.0% from the end of last year. Specifically, residential mortgages grew
+by RMB651,272 million or 16.5%, mainly because the Bank supported the residents' financing needs for owner-occupied
+houses; credit card overdrafts increased by RMB91,692 million or 17.1%, primarily due to the continuous development of
+credit card installment business and steady growth in the consumption trading volume of credit cards.
+Please see the section headed "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and
+their quality.
+Investment
+INVESTMENT
+10.8
+Item
+Equity instruments
+Funds and others (1)
+Accrued interest (2)
+Total
+In RMB millions, except for percentages
+At 31 December 2017
+At 31 December 2018
+Percentage
+62.8
+Percentage
+Bonds
+Percentage
+534,776
+626,468
+Residential mortgages
+Amount
+(%)
+Amount
+Percentage
+(%)
+4,589,961
+81.5
+3,938,689
+79.6
+11.1
+Personal consumption loans
+3.6
+255,783
+5.2
+Personal business loans
+215,983
+3.8
+216,210
+4.4
+Credit card overdrafts
+204,162
+8,936,864
+Benchmark interest
+(%)
+54.3
+13,892,966
+53.2
+6,754,692
+24.4
+5,756,704
+22.1
+Cash and balances with central banks
+3,372,576
+15,046,132
+12.2
+13.9
+Due from banks and other financial
+962,449
+3.5
+847,611
+3.2
+institutions
+Reverse repurchase agreements
+Others
+3,613,872
+Total assets
+Net loans and advances to customers (1)
+Investment
+Percentage
+Amount
+Discussion and Analysis
+Balance Sheet Analysis
+In 2018, in response to the complicated development trends externally, the Bank adhered to the prudent and steady
+business strategy based on the macroeconomic policies, sources of funds, performance of the real economy and state of risk
+control, and promoted the moderate growth and continuous structure optimization of total assets and liabilities. In addition,
+the Bank made active efforts to support the development of the real economy, appropriately expanded the scale of loan
+issuance and bond investment, and cemented the foundation for deposit business development, thereby ensuring a stable
+and sustainable growth of funding sources.
+Assets Deployment
+As at the end of 2018, total assets of the Bank amounted to RMB27,699,540 million, RMB1,612,497 million or 6.2% higher
+than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as
+"total loans") increased by RMB1,186,457 million or 8.3% to RMB15,419,905 million, investment increased by RMB997,988
+million or 17.3% to RMB6,754,692 million, and cash and balances with central banks decreased by RMB241,296 million or
+6.7% to RMB3,372,576 million.
+ASSETS DEPLOYMENT
+Item
+Total loans and advances to customers
+(%)
+Add: Accrued interest
+At 31 December 2018
+Percentage
+(%)
+Amount
+15,419,905
+38,958
+412,731
+In RMB millions, except for percentages
+At 31 December 2017
+Amount
+14,233,448
+340,482
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+734,049
+2.6
+986,631
+81,407
+2016
+2017
+Corporate loans
+2018
+Discounted bills
+Personal loans
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Item
+Corporate loans
+89,369
+Discounted bills
+Total
+At 31 December 2018
+In RMB millions, except for percentages
+At 31 December 2017
+Percentage
+Percentage
+Amount
+9,418,894
+(%)
+Amount
+Personal loans
+94,189
+7,200
+3,511
+3.8
+829,642
+3.0
+989,259
+3.8
+27,699,540
+100.0
+26,087,043
+100.0
+Note: (1) Please see "Note 23. to the Financial Statements: Loans and Advances to Customers".
+Annual Report 2018
+19
+Discussion and Analysis
+Loan
+In 2018, the Bank proactively integrated into the social reform and
+development, and evidently supported the major areas and key links
+of the real economy focusing on the supply-side structural reform and
+replacement of old growth drivers with new ones. As a result, the Bank
+achieved balanced and orderly credit granting for the whole year and
+further optimized its credit structure. Moreover, benchmarking to the
+requirements of high-quality economic development, the Bank further
+upgraded its financial services for private enterprises and small and micro
+enterprises, mainly backed the funding demands of the major national
+infrastructure and supported the rational financing demands of resident
+households for owner-occupied houses. As at the end of 2018, total
+loans amounted to RMB15,419,905 million, RMB1,186,457 million or
+8.3% higher compared with the end of the previous year, of which RMB
+denominated loans of domestic branches were RMB13,591,421 million,
+RMB1,160,095 million or 9.3% higher than that at the end of 2017.
+Total Loans
+Unit: RMB100 millions
+41,962
+56,366
+49,455
+3,644
+61.0
+9,450
+(%)
+89.6
+19.0
+Pearl River Delta
+2,726,705
+12.7
+2,736,614
+14.0
+Bohai Rim
+5,922,781
+27.7
+5,203,857
+26.6
+Central China
+3,722,756
+3,064,753
+2,780,882
+14.2
+Western China
+3,591,835
+16.8
+3,236,441
+16.6
+Northeastern China
+1,105,344
+5.2
+1,033,381
+5.3
+14.3
+Overseas and others
+18.8
+Yangtze River Delta
+222,461
+1.0
+Total
+21,408,934
+100.0
+19,562,936
+100.0
+Notes: (1)
+(2)
+Please see "Note 34. to the Financial Statements: Due to Customers".
+Includes outward remittance and remittance payables.
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+In RMB millions, except for percentages
+4,032,866
+At 31 December 2018
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+Head Office
+56,304
+0.3
+60,261
+0.3
+At 31 December 2017
+Accrued interest
+908,346
+788,744
+Domestic Corporate Loans by Industry
+Corporate Deposits
+Unit: RMB100 millions
+Transportation, storage and
+23.8%
+postal services
+50,760
+Manufacturing
+17.4%
+46,357
+Leasing and commercial services
+13.2%
+At the end of 2018, the number of corporate customers increased by 762 thousand over the end of the previous
+year to 7,033 thousand. The balance of corporate loans reached RMB9,418,894 million, representing an increase of
+RMB482,030 million or 5.4%. The balance of corporate deposits hit RMB11,481,141 million, representing an increase
+of RMB775,676 million or 7.2%.
+43,028
+electricity, heat, gas and water
+11.5%
+Water, environment and public
+9.7%
+utility management
+Real estate
+7.4%
+Wholesale and retail
+6.1%
+64,051
+60,698
+52,717
+Production and supply of
+4.2
+The Bank continued to grow corporate deposits consistently. All-round efforts, e.g. tapping the source, setting deposit
+rates flexibly, offering innovative products and strengthening management, secured a sound growth momentum in
+corporate deposits. The whole Bank launched co-marketing campaigns with the utilization of information systems and
+big data sharing technology, targeting at high-quality listed company customers and industrial funds, as well as key
+funding sources, e.g. bond underwriting & offering, M&A and restructuring and QR code payment.
+The Bank steadily progressed in credit restructuring. It retained a good balance in the relationships between direction
+and amount of lending, frequency and structure, return and risk. The "One plus Three" credit layout, with One
+referring to the basic industrial sectors, and Three referring to a triple of sectors, i.e. happiness industries, advanced
+manufacturing and connectivity of the internet of things, made notable progress. All four sectors recorded fast
+growth. Under a more reasonable regional layout, the Bank actively enlarged the share in the credit markets of
+Xiongan New Area, Hainan Free Trade Zone, Guangdong-Hong Kong-Macau Greater Bay Area and Yangtze River
+Delta. Besides, the construction of financial service centers for science and technology innovation enterprises in
+Shenzhen and Shanghai were underway in a bid to support the new economy and enter new markets with fresh
+mechanisms and models.
+4.0
+Total
+21,408,934
+100.0
+19,562,936
+100.0
+Repurchase Agreements
+Repurchase agreements were RMB514,801 million, a decrease of RMB531,537 million or 50.8% from the end of last year,
+mainly because the Bank appropriately adjusted the size of funds raised based on its internal and external liquidity status.
+Annual Report 2018
+25
+Discussion and Analysis
+Shareholders' Equity
+The Bank vigorously supported the development of private economy. It headed the Chinese banking industry in
+efficiently completing the "Head Office & Headquarters" agreement-signing with key private enterprises. It established
+relationship with distinctive private enterprises and developed a white list of high-quality and backbone private
+enterprises. It completed the creation of and investment in the first state-owned large banks' private enterprise bond
+financing support tools and promoted the debt-for-equity swap of private enterprises in a steady way.
+As at the end of 2018, shareholders' equity amounted to RMB2,344,883 million in aggregate, RMB203,827 million or 9.5%
+higher than that at the end of the previous year. Equity attributable to equity holders of the parent company recorded an
+increase of RMB202,510 million or 9.5% to RMB2,330,001 million. Please refer to the "Financial Statements: Consolidated
+Statement of Changes in Equity" for details.
+Analysis on Statement of Cash Flows
+Net cash inflows from operating activities amounted to RMB724,133 million, representing a decrease of RMB46,731 million
+as compared to last year, mainly attributable to cash outflows resulted from the drop of repurchase agreements which
+resulted in cash inflows in the previous year. Specifically, cash outflows of operating assets dropped by RMB559,032 million
+and cash inflows of operating liabilities dropped by RMB671,055 million.
+Net cash outflows from investing activities amounted to RMB731,745 million. Specifically, cash inflows were RMB1,501,388
+million, representing a decrease of RMB657,295 million, mainly due to the decreased cash received from the recovery of
+bond investment; and cash outflows were RMB2,233,133 million, representing a decrease of RMB414,808 million, mainly
+due to the decrease in cash payment for bond investment.
+Net cash outflows from financing activities amounted to RMB35,924 million, of which, cash inflows were RMB1,045,871
+million, mainly due to the issuance of debt securities by overseas institutions; and cash outflows were RMB 1,081,795 million,
+mainly due to the repayment of debt securities.
+26
+ICBC
+BUSINESS OVERVIEW
+Discussion and Analysis
+Corporate Banking
+To address the customer demand, the Bank made further headway in promoting the "full-spectrum corporate" banking
+strategy, picked up pace in product innovation and marketing service system transformation by adopting FinTech, supported
+the development of small and micro enterprises, prioritized the provision of financial services for "agriculture, rural areas and
+farmers" and enhanced the quality and efficiency of serving the real economy to a new high.
+Z
++
+For details on off-balance sheet items, please refer to "Note 45. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 46. to the Financial Statements: Designated Funds and Loans".
+Construction
+1.5
+1.3
+1,706,549
+7.1
+Repurchase agreements
+514,801
+2.0
+1,046,338
+4.4
+Debt securities issued
+617,842
+2.4
+526,940
+2.2
+7.2
+Others
+998,585
+25,354,657
+4.0
+1,103,224
+4.6
+100.0
+23,945,987
+100.0
+2,225
+2,689
+2,885
+2,365
+Due to Customers
+Due to customers is the Bank's main source of funds. As at the
+end of 2018, due to customers (excluding accrued interest) was
+RMB21,186,473 million, RMB1,623,537 million or 8.3% higher than
+that at the end of the previous year. In terms of customer structure,
+corporate deposits increased by RMB775,676 million or 7.2%; and
+personal deposits increased by RMB867,501 million or 10.1%. In terms
+of maturity structure, time deposits increased by RMB1,197,055 million
+or 12.8%, while demand deposits increased by RMB446,122 million
+or 4.5%. In terms of currency structure, RMB deposits stood at
+RMB19,841,403 million, an increase of RMB1,463,782 million or
+8.0% over the end of the previous year. Foreign currency deposits
+were equivalent to RMB1,345,070 million, an increase of RMB159,755
+million or 13.5%.
+Total liabilities
+Due to Customers
+1,814,495
+81.7
+17 April 2020
+25 February 2020
+rate (3) plus 0.59%
+Notes: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the New Financial Instrument Standards.
+(2)
+(3)
+The bonds had been repaid on the maturity date.
+Benchmark interest rate refers to the interest rate of one-year time deposits applied by PBC on the each value date of each
+interest-bearing period.
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bills.
+Annual Report 2018
+23
+Discussion and Analysis
+Liabilities
+Due to banks and other financial institutions
+As at the end of 2018, total liabilities reached RMB25,354,657 million, an increase of RMB1,408,670 million or 5.9%
+compared with the end of last year.
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2017
+Item
+Amount
+Percentage
+(%)
+Percentage
+Due to customers
+21,408,934
+84.4
+Amount
+19,562,936
+(%)
+LIABILITIES
+288,554
+Unit: RMB100 millions
+95,745
+29.9
+6,069,804
+31.0
+Subtotal
+11,481,141
+53.6
+10,705,465
+54.7
+Personal deposits
+Time deposits
+5,505,236
+25.7
+6,405,136
+4,748,525
+Demand deposits
+3,931,182
+18.4
+3,820,392
+19.5
+Subtotal
+9,436,418
+44.1
+8,568,917
+43.8
+Other deposits(2)
+268,914
+24.3
+83,029
+Demand deposits
+4,635,661
+24
+ICBC
+94,364
+85,689
+114,811
+107,055
+2016
+2017
+2018
+Corporate deposits Personal deposits
+Other deposits
+Accrued interest
+23.7
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+Policy bank bonds 2010
+Amount
+Percentage
+(%)
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2017
+Amount
+Percentage
+(%)
+Corporate deposits
+Time deposits
+5,076,005
+23.7
+Item
+2.9%
+Mining
+2.3%
+10.5
+561,566
+10.9
+660,914
+5.2
+281,658
+4.2
+255,716
+0.0
+54
+(%)
+Percentage
+3,319,674
+Amount
+Amount
+Percentage
+At 31 December 2018
+At 31 December 2017
+In RMB millions, except for percentages
+Note: (1) Refers to overdue bonds.
+Total
+Over 5 years
+1 to 5 years
+3 to 12 months
+Less than 3 months
+Undated (1)
+(%)
+Remaining maturity
+54.9
+52.5
+4,945,340
+91.7
+5,547,079
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2018
+At 31 December 2017
+In RMB millions, except for percentages
+2,819,961
+Total
+USD-denominated bonds
+RMB-denominated bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+100.0
+5,373,733
+100.0
+6,049,076
+31.8
+1,710,548
+30.0
+1,812,718
+Other foreign currency bonds
+92.0
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+100.0
+Central bank bills
+Government bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+Discussion and Analysis
+21
+Annual Report 2018
+Bonds rose by RMB675,343 million or 12.6% from the end of the previous year to RMB6,049,076 million. Funds and others
+grew by RMB199,448 million or 54.8% to RMB563,346 million.
+Notes: (1) Includes assets invested by funds raised by the issuance of principal-guaranteed wealth management products by the Bank.
+(2) Please see "Note 24. to the Financial Statements: Financial Investments" for details.
+100.0
+5,756,704
+100.0
+Policy bank bonds
+6,754,692
+84,361
+6.3
+363,898
+8.3
+563,346
+0.3
+19,073
+0.9
+57,909
+93.4
+(%)
+Amount
+5,373,733
+1.2
+In terms of distribution by issuers, government bonds increased by RMB754,227 million or 22.9% over the end of last
+year; central bank bills increased by RMB13,844 million or 73.2%; policy bank bonds went down by RMB221,937 million
+or 22.3%; and other bonds increased by RMB129,209 million or 12.1%. In order to support the development of the real
+economy, the Bank stepped up the allocation to government bonds based on the bond market supply.
+Other bonds
+Total
+At 31 December 2017
+5,373,733
+100.0
+6,049,076
+19.9
+1,071,433
+19.8
+1,200,642
+18.5
+996,669
+12.8
+774,732
+0.4
+In RMB millions, except for percentages
+18,902
+32,746
+61.2
+3,286,729
+66.9
+4,040,956
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2018
+0.5
+356,034
+5.9
+295,590
+3.65%
+9,700
+Policy bank bonds 2010
+4.32%
+9,770
+Policy bank bonds 2012
+3.76%
+10,140
+Policy bank bonds 2012
+14 January 2019
+5.75%
+10,410
+13 July 2019
+Policy bank bonds 2014 (2)
+4.62%
+10,505
+Policy bank bonds 2011
+27 July 2020
+21 August 2019
+3.94%
+10,580
+Policy bank bonds 2012
+3.51%
+11,050
+Policy bank bonds 2010
+impairment
+losses (1)
+Maturity date
+25 June 2022
+22 February 2021
+4.04%
+23 April 2019
+26 March 2020
+9,500
+Science, education, culture
+and sanitation
+2.1%
+2016
+2017
+Lodging and catering
+1.2%
+Demand deposits
+2018
+Time deposits
+Others
+2.4%
+Annual Report 2018
+27
+Commercial bank bonds 2017
+Discussion and Analysis
++
+The Bank actively developed a service network which was integrated on- and off-line to increase the coverage and
+convenience of inclusive financial services. Online, the Bank improved the ICBC Small and Micro Finance Platform and
+the comprehensive inclusive financial service system consisting of Quick Lending for Operation, Online Revolving Loan
+and Online Supply Chain. Offline, the Bank actively pushed forward the construction of specialized inclusive financial
+institutions at all levels and strengthened the function of small and micro enterprise banking centers as the marketing
+organization center, business processing center, risk control center and 020 business service center. At the end of
+2018, there were 258 small and micro enterprise banking centers.
+The Bank strongly expanded the small and micro enterprise financial service market, and rolled out serial campaigns
+to bring inclusive financial services to small and micro enterprises. It visited and established in-depth cooperative
+relationships with thousands of offline specialized markets, E-commerce platforms and leading enterprises, and
+signed cooperation deepening agreements with many local governments, industry associations, industrial parks and
+specialized markets to further diversify inclusive financial services. As at the end of 2018, the loans to small and
+micro enterprises with the total loans of no more than RMB10 million for each enterprise was RMB321,685 million,
+representing an increase of RMB49,203 million or 18.1% over the beginning of the year. There were 308 thousand
+micro and small enterprise loan customers, up 91 thousand over the beginning of the year. The average interest rate
+of loans granted in 2018 decreased by 0.26 percentage points over the prior year to 4.95%.
+The Bank pushed forward financial services for agriculture, rural areas and farmers in an all-round manner, and set
+up inclusive finance promotion committees at the levels of the Head Office and tier-one branches to take on the
+responsibilities in relation to the implementation and overall management of agro-related credit policy in an effort
+to promote financial services for agriculture, rural areas and farmers across the board. At the end of 2018, farmer
+business loans and small and micro enterprise loans for agriculture, rural areas and farmers which belonged to the
+scope of inclusive loans combined to RMB89,134 million, representing an increase of RMB9,547 million or 12.0% over
+the beginning of the year. There were 55 thousand loan customers, up 21 thousand over the beginning of the year.
+The average interest rate of loans granted in 2018 decreased by 0.34 percentage points over the prior year to 5.03%.
+Institutional Banking
++
+The Bank made further progress in cooperation with the government. It actively marketed key reform departments
+to open accounts, having the largest market share for central government-affiliated customers. It earnestly provided
+financial services supporting pension insurance reform for governmental agencies and administrative institutions,
+maintaining the largest market share in basic pension insurance accounts. Aligning itself with the fiscal reform of
+China, the Bank supported the e-reform of income and expenditure of national treasury, enhanced the capabilities
+of serving fiscal departments and budgetary units at all levels, and still topped the banking industry in terms of the
+number of regions and customers for launching the fiscal e-payment agency service and e-collection of non-tax
+revenue agency service, as well as the relevant business volumes under agency. The Bank deepened the cooperation
+with veteran affairs departments in different places and continued to improve financial service capabilities for veterans.
+As governmental agencies and administrative institutions were key customers, the Bank researched, developed and
+promoted systems and applications such as "ICBC Campus Cloud", "Religion Cloud Platform" and "Cloud Platform
+for the Party, League and Labor Union" for the purpose of strengthening customer expansion, service upgrade and
+product penetration.
+The Bank carried forward the cooperation with other banks on a steady footing. It signed comprehensive cooperative
+agreements with Agricultural Development Bank of China, GF Securities Co. Ltd., China Life Insurance Company
+Limited and the People's Insurance Company of China, among other industry-leading customers.
+The Bank launched a fresh model of alleviating poverty with joined-up efforts from banks, insurers and futures
+companies, thus beefing up targeted poverty relief in a joint and effective way. Specifically, on the basis that insurers
+and futures companies provided farmers with risk management service, the Bank increased and underscored services
+such as credit facility, e-commerce sales, premium donation and linked wealth management product issuance to enrich
+and improve the financial anti-poverty product and service system.
+28
+ICBC
+4.20%
+Inclusive Finance
+11,400
+Policy bank bonds 2012
+Annual
+interest rate
+440,938
+11.9
+Amount
+(%)
+Percentage
+At 31 December 2018
+805,347
+Financial investments measured at fair value
+through profit or loss
+Amount
+Item
+At 31 December 2017
+In RMB millions, except for percentages
+Percentage
+Discussion and Analysis
+ICBC
+22
+In terms of currency structure, RMB-denominated bonds rose by RMB601,739 million or 12.2%. During the reporting period,
+the Bank balanced the risks and returns of foreign currency bond investment portfolios and increased the investment in
+USD-denominated bonds. USD-denominated bonds added by RMB60,444 million or 20.4%; other foreign currency bonds
+increased by an equivalent of RMB 13,160 million or 9.9%.
+100.0
+5,373,733
+100.0
+6,049,076
+2.5
+132,803
+2.4
+145,963
+5.5
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+(%)
+7.7
+Financial investments measured at fair value
+through other comprehensive income
+value
+Debt securities
+Nominal
+for
+Allowance
+In RMB millions, except for percentages
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+As at the end of 2018, the Group held RMB1,378,173 million of financial bonds', including RMB774,732 million of policy
+bank bonds and RMB603,441 million of bonds issued by banks and non-bank financial institutions, accounting for 56.2%
+and 43.8% of financial bonds, respectively.
+100.0
+5,756,704
+100.0
+6,754,692
+Total
+4.8
+277,129
+Receivables
+61.5
+3,542,184
+Held-to-maturity investments
+26.0
+1,496,453
+Available-for-sale financial assets
+66.9
+4,519,182
+Financial investments measured at amortised
+cost
+21.2
+1,430,163
+6,049,076
+At 31 December 2018
+290
+298
+Disposals
+Additions
+comprehensive
+income
+(losses)
+recorded
+in other
+Total
+gains/(losses)
+recorded in
+profit or loss
+2018
+1 January
+Total gains/
+Derivative financial assets
+Financial assets:
+Group
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and financial
+liabilities which are recorded at fair value and the movement during the year:
+(b) Movement in level 3 financial instruments measured at fair value
+(In RMB millions, unless otherwise stated)
+Settlements
+Financial Statements for the year ended 31 December 2018
+291
+Annual Report 2018
+454,448
+347
+451,594
+2,507
+46,682
+347
+45,778
+557
+836
+836
+Commodity derivatives and others
+1,114
+Notes to the Financial Statements
+154
+Transfer out of
+level 3
+2018
+1
+(10)
+10
+44
+410
+measured at FVTPL
+Loans and advances to customers
+584
+88
+(42)
+པེ'
+(26)
+226
+(149)
+31 December
+533
+(176)
+(77)
+34
+111
+238
+Interest rate contracts
+288
+(50)
+(47)
+(2)
+63
+(5)
+329
+Exchange rate contracts
+Commodity derivatives and others
+HHH
+863
+Interest rate contracts
+120,333
+1,502
+Equity investments
+4,421
+1,201,565
+118,831
+Debt securities
+Available-for-sale financial assets
+53,856
+347
+50,723
+2,786
+5,169
+5,169
+31,915
+1,233,480
+Commodity derivatives and others
+154
+807
+490
+Interest rate contracts
+47,236
+193
+44,747
+2,296
+Exchange rate contracts
+Derivative financial assets
+338,257
+155,788
+180,535
+1,934
+1,451
+97
+4,421
+127,084
+44,732
+193
+44,079
+460
+Exchange rate contracts
+Derivative financial liabilities
+7:
+73,852
+2,919
+60,175
+60,
+10,758
+333,914
+71,902
+1,950
+1,324,817
+33,417
+1,358,234
+969
+60,175
+10,758
+333,914
+Other debt securities issued
+precious metals
+Financial liabilities related to
+Wealth management products
+Financial liabilities designated as at FVTPL
+Due to customers
+fair value on a recurring basis:
+Financial liabilities which are measured at
+1,810,419
+160,556
+1,522,779
+1,950
+240,397
+444
+Debt securities
+Disposals
+Additions
+comprehensive
+income
+in other
+recorded
+Total gains/
+(losses)
+(3,546)
+246
+510
+80
+(1,336)
+(1,199)
+108
+1
+Settlements
+(1,032)
+83
+191
+77
+(51)
+(245)
+49
+20
+2
+(60)
+(1,372)
+6
+99
+299
+(193)
+(730)
+recorded in
+profit or loss
+Transfer out of
+level 3
+Exchange rate contracts
+157,296
+Financial assets designated as at FVTPL
+641
+(86)
+497
+39
+191
+Financial assets held for trading
+533
+3
+(39)
+(8)
+510
+67
+31 December
+2017
+Commodity derivatives and others
+10
+(81)
+(4)
+1
+(100)
+412
+Interest rate contracts
+329
+(22)
+(11)
+(9)
+23
+28
+320
+238
+Financial investments measured at FVTPL
+Total
+gains/(losses)
+1 January
+Equity investments
+143
+(971)
+(882)
+143
+1,853
+Debt securities
+Financial investments measured at FVOCI
+151,513
+(3,255)
+(8,759)
+(98,512)
+92,119
+(320)
+2,627
+170,240
+20,107
+'
+(157)
+14,445
+297
+5,522
+Equity investments
+34,727
+(3,575)
+(470)
+(551)
+31,422
+67
+7,834
+Funds and other investments
+2017
+649
+(19)
+Financial assets:
+Derivative financial assets
+(35)
+(3,011)
+387
+(663)
+Commodity derivatives and others
+(302)
+(728)
+Interest rate contracts
+15
+(271)
+Exchange rate contracts
+Derivative financial liabilities
+(135)
+16,232
+(1,349)
+Financial liabilities:
+227,690
+(7,893)
+(10,344)
+(99,344)
+155,023
+617
+45
+189,586
+307
+339
+(32)
+Other investments
+19,489
+Financial liabilities designated as at FVTPL
+135,942
+104,455
+Others
+34,565
+209
+35,592
+Interest rate contracts
+515
+1,139
+5
+1,659
+Commodity derivatives and others
+1,044
+-
+1,333
+36,748
+214
+818
+1,044
+Loans and advances to customers
+measured at FVTPL
+924
+924
+Loans and advances to customers
+measured at FVOCI
+343,827
+343,827
+Financial investments measured at FVTPL
+Debt securities
+2,822
+185,445
+30,745
+219,012
+38,295
+Equity investments
+Exchange rate contracts
+fair value on a recurring basis:
+50,194
+Interest rate contracts
+91
+14,136
+728
+14,955
+Commodity derivatives and others
+8,169
+4,575
+663
+13,407
+8,754
+68,140
+1,662
+Derivative financial asset
+78,556
+490,226
+3,011
+504,504
+Annual Report 2018
+289
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Bank
+31 December 2018
+Level 1
+Level 2
+Level 3
+Total
+Financial assets which are measured at
+11,267
+271
+1,018
+1,292
+11,480
+67,257
+78,737
+848,453
+11,480
+67,257
+78,737
+Derivative financial liabilities
+Exchange rate contracts
+732
+34,812
+209
+35,753
+Interest rate contracts
+848,453
+115
+5
+1,411
+Commodity derivatives and others
+4,956
+-
+4,956
+847
+41,059
+214
+42,120
+847
+968,249
+214
+969,310
+1,291
+274
+precious metals
+Wealth management products
+Funds and other investments
+73
+386,981
+133,287
+520,341
+3,913
+572,700
+164,032
+740,645
+Financial investments measured at FVOCI
+Debt securities
+139,361
+1,078,258
+Equity investments
+Financial liabilities related to
+327
+5,558
+1,083,816
+143
+22,190
+1,217,762
+28,075
+22,333
+1,245,837
+144,934
+2,038,015
+186,579
+2,369,528
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Due to customers
+Financial liabilities designated as at FVTPL
+139,688
+49,429
+494
+Exchange rate contracts
+Debt securities
+Equity investments
+3,033
+74,868
+641
+78,542
+6,582
+2,213
+8,795
+9,615
+77,081
+641
+87,337
+Financial assets designated as at FVTPL
+Financial assets held for trading
+Debt securities
+54,476
+1,439
+59,777
+Other debt instruments
+1,462
+30,600
+19,846
+51,908
+Others
+105,902
+136,014
+241,916
+5,324
+190,978
+3,862
+157,299
+Financial assets which are measured at
+fair value on a recurring basis:
+Level 3
+50,446
+19,846
+30,600
+Other debt instruments
+47,414
+45,480
+1,934
+Debt securities
+Financial assets designated as at FVTPL
+58,041
+2,031
+58,041
+2,031
+60,072
+Total
+60,072
+fair value on a recurring basis:
+Financial assets held for trading
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+31 December 2017
+31 December 2017
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Level 1
+Level 2
+Debt securities
+353,601
+Derivative financial asset
+Exchange rate contracts
+1,596,369
+10,875
+169,915
+1,493,451
+2,023,402
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Due to customers
+Financial liabilities designated as at FVTPL
+Wealth management products
+Financial liabilities related to
+precious metals
+Other debt securities issued
+Others
+336,587
+336,587
+257,118
+10,758
+60,183
+60,183
+1,950
+6,242
+8,192
+563
+8,316
+1,349
+10,228
+2,513
+85,499
+1,349
+89,361
+Derivative financial liabilities
+10,758
+1,248,371
+234,205
+6,164
+640
+51,335
+329
+52,304
+Interest rate contracts
+493
+15,424
+238
+16,155
+Commodity derivatives and others
+6,841
+13,180
+533
+20,554
+7,974
+79,939
+1,100
+6,164
+Other debt instruments
+20,292
+5,435
+401
+14,456
+9,574
+Equity investments
+5,440
+1,241,806
+219,749
+Debt securities
+Available-for-sale financial assets
+89,013
+1,466,995
+54,382
+(60,335)
+(1,184)
+231,631
+17,716
+3,351,438
+3,439,471
+Level 3
+Level 2
+Level 1
+Fair value
+amount
+Carrying
+2017
+Receivables
+Held-to-maturity investments
+Financial assets
+231,129
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+295
+Annual Report 2018
+276,512
+276,512
+276,512
+273,299
+276,512
+273,299
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+182,906
+4,180,333
+39,120
+4,402,359
+Notes to the Financial Statements
+4,362,174
+3,671,102
+17,716
+3,313,748
+19
+Cash and balances with central banks
+31 December
+2017
+31 December
+2018
+Notes
+ASSETS
+53. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+296
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of
+the Group and the Bank's assets and liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+The fair values of subordinated bonds and tier 2 capital notes are determined with reference to the available market
+values. If quoted market prices are not available, then fair values are estimated on the basis of pricing models or
+discounted cash flows.
+3,582,567
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, then fair values are estimated on the basis of pricing models or discounted cash flows.
+(i)
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and financial liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described
+below are adopted to determine the fair values of these financial assets and financial liabilities:
+261,922
+261,922
+261,922
+269,143
+261,922
+269,143
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+182,062
+181,960
+102
+3,333,620
+49,169
+3,382,789
+(ii)
+3,548,996
+182,906
+39,120
+Level 2
+Level 1
+Fair value
+Carrying
+amount
+285,834
+285,834
+2017
+Receivables
+Held-to-maturity investments
+Financial assets
+285,834
+282,459
+285,834
+282,459
+Level 3
+Subordinated bonds and Tier 2 Capital Notes
+213,101
+4,280,407
+67,225
+4,560,733
+4,519,182
+213,101
+4,280,407
+67,225
+4,560,733
+4,519,182
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+Level 2
+Financial liabilities
+4,180,333
+3,542,184
+52,723
+4,402,359
+4,362,174
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+Level 2
+Level 1
+Fair value
+amount
+Carrying
+274,307
+274,307
+2018
+Bank
+3,453,155
+274,307
+274,307
+281,108
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+232,051
+3,444,932
+52,723
+3,729,706
+3,819,313
+230,674
+1,377
+3,399,055
+45,877
+276,551
+277,129
+281,108
+Due from banks and other financial institutions
+20
+1,031,402
+23,824,295
+436,376
+247,348
+36
+436,275
+499,291
+35
+Retained profits
+Reserves
+Other equity instruments
+Share capital
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+22,585,711
+Debt securities issued
+82,946
+Income tax payable
+18,894,447
+20,646,928
+34
+Due to customers
+221,489
+281,380
+33
+Certificates of deposit
+810,610
+300,988
+32
+Repurchase agreements
+69,344
+1,596,232
+TOTAL EQUITY
+37
+The financial statements were approved and authorised for issue by the board of directors on 28 March 2019.
+56. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+55. COMPARATIVE AMOUNTS
+On 28 March 2019, the Board of Directors of the Bank reviewed and approved the Proposal on the Issuance of Undated
+Additional Tier 1 Capital Bonds. The Bank plans to issue write-down undated additional tier 1 capital bonds with the total
+amount up to RMB80.0 billion in China's national inter-bank bond market. All funds raised will be used to bolster the Bank's
+additional tier 1 capital. The undated additional tier 1 capital bonds issuance plan is still subject to the review and approval
+by the Shareholders' General Meeting of the Bank, after which it is further subject to the approval by the relevant regulatory
+authorities.
+Issuance of Undated Additional Tier 1 Capital Bonds
+According to the capital planning and capital replenishment planning, the Bank publicly issued the tier 2 capital bonds of
+RMB55.0 billion in March 2019 in China's national inter-bank bond market. The funds raised will be used to replenish the
+Bank's tier 2 capital in accordance with the applicable laws as approved by relevant regulators.
+Issuance of Tier 2 Capital Bonds
+The Board of Directors of the Bank reviewed and approved the Proposal on the Establishment of ICBC Wealth Management
+Co., Ltd. at the meeting of the Board of Directors convened on 26 November 2018. The proposal is to establish a
+wholly-owned subsidiary ICBC Wealth Management Co., Ltd. by contributing no more than RMB16.0 billion of the Bank's
+proprietary funds. On 15 February 2019, CBIRC officially approved the Bank's establishment of ICBC Wealth Management
+Co., Ltd.
+Establishment of Wealth Management Subsidiary
+A final dividend of RMBO.2506 per share after the appropriation of statutory surplus reserve and general reserve, was
+approved at the board of directors' meeting held on 28 March 2019, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2018, the final dividend amounted to approximately RMB89,315 million. The dividend payable was not recognised as a
+liability as at 31 December 2018.
+The profit distribution plan
+54. AFTER THE REPORTING PERIOD EVENT
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+TOTAL EQUITY AND LIABILITIES
+Notes to the Financial Statements
+Annual Report 2018
+24,645,112
+2,059,401
+2,247,865
+26,072,160
+1,013,320
+1,111,446
+610,299
+700,637
+39
+79,375
+79,375
+38
+356,407
+356,407
+297
+1,644,147
+31
+Due to banks and other financial institutions
+231,631
+3,439,471
+1,358,802
+4,362,174
+1,245,837
+398,329
+740,645
+Receivables
+Held-to-maturity investments
+- Available-for-sale financial assets
+― Financial investments measured at amortised cost
+Financial investments measured at FVOCI
+Financial investments measured at FVTPL
+5,428,233
+Investments in subsidiaries
+6,348,656
+13,125,401
+14,211,777
+23
+Financial investments
+Loans and advances to customers
+750,763
+521,393
+22
+Reverse repurchase agreements
+53,856
+38,295
+21
+Derivative financial assets
+930,593
+24
+Investments in associates
+Property and equipment
+Deferred income tax assets
+46,682
+42,120
+21
+Derivative financial liabilities
+73,852
+78,737
+30
+Financial liabilities designated as at FVTPL
+404
+410
+Due to central banks
+LIABILITIES
+24,645,112
+26,072,160
+483,090
+269,769
+29
+Other assets
+TOTAL ASSETS
+25
+122,110
+120,301
+26
+Level 1
+34,242
+27
+124,548
+ICBC
+28
+56,220
+47,250
+34,242
+ICBC
+Fair value
+Carrying
+5
+209
+(153)
+(20)
+55
+(1)
+154
+55
+(19)
+193
+155
+Interest rate contracts
+Exchange rate contracts
+31 December
+2018
+Financial investments measured at FVTPL
+Transfer out of
+Level 3
+Disposals
+Additions
+income
+profit or loss
+2018
+comprehensive
+recorded in
+1 January
+in other
+recorded
+gains/(losses)
+Total
+Total gains
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Settlements
+Notes to the Financial Statements
+Debt securities
+(76)
+(95,939)
+133,839
+1,085
+(1,106)
+164,126
+22,190
+21,108
+1,082
+Equity investments
+143
+(648)
+(270)
+143
+3
+7,073
+(3)
+Debt securities
+Financial investments measured at FVOCI
+133,287
+(3,255)
+(7,510)
+(95,412)
+84,683
+(1,007)
+155,788
+Funds and other investments
+30,745
+(3,570)
+(527)
+27,845
+918
+(7,953)
+Financial assets:
+Derivative financial assets
+ICBC
+1,270
+(437)
+18
+(81)
+(2,101)
+Financial liabilities designated as at FVTPL
+Financial liabilities:
+169,915
+(2,443)
+(1,598)
+(60,366)
+66,526
+(1,770)
+10,016
+(1,349)
+159,550
+5,287
+148
+Equity investments
+5,440
+(197)
+(10)
+6,336
+(1,918)
+(35)
+1,264
+Debt securities
+Available-for-sale financial assets
+157,299
+(2,434)
+5,435
+Bank
+Derivative financial liabilities
+(310)
+292
+(3,011)
+(7)
+(663)
+(3)
+(728)
+(271)
+(5)
+5135
+1,485
+21
+(503)
+(115)
+(3,892)
+Exchange rate contracts
+81
+(42)
+(534)
+(173)
+Commodity derivatives and others
+125
+4
+(1)
+451
+(1,308)
+Interest rate contracts
+9
+9
+(23)
+49
+8
+(7,473)
+186,579
+Financial liabilities:
+(3,018)
+1,932
+10
+(2,005)
+2,015
+Net gains/(losses) for the year
+Bank
+Unrealised
+Realised
+Total
+Group
+Unrealised
+Realised
+2018
+Gains or losses on level 3 financial instruments included in the statement of net profit or loss for the year comprise:
+(In RMB millions, unless otherwise stated)
+Total
+(1,086)
+Financial Statements for the year ended 31 December 2018
+293
+Annual Report 2018
+(347)
+65
+(23)
+130
+(519)
+2
+(2)
+Commodity derivatives and others
+(193)
+(154)
+63
+134
+(351)
+Notes to the Financial Statements
+Interest rate contracts
+2017
+Realised
+10,086
+2018
+Group
+No significant difference between the carrying amount and the fair value of the financial assets and financial liabilities not
+measured at fair value, except for the following items:
+(e) Fair value of financial assets and liabilities not carried at fair value
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+294
+As at 31 December 2018, the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were immaterial.
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+(d) Valuation of financial instruments with significant unobservable inputs
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+As at the end of the reporting period, certain financial instruments were transferred out from level 3 to level 2 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+(ii) Transfers between level 2 and level 3
+Net gains/(losses) for the year
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the reporting
+period.
+Transfers between level 1 and level 2
+(i)
+(c) Transfers between levels
+9,319
+(320)
+9,639
+9,901
+(185)
+Total
+Bank
+Unrealised
+Realised
+Total
+Group
+Unrealised
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+(23)
+(4)
+(166)
+Financial assets:
+Derivative financial assets
+31 December
+2017
+Transfer out of
+Level 3
+Settlements
+Disposals
+Additions
+comprehensive
+income
+recorded
+in other
+Total losses
+Total
+gains/(losses)
+recorded in
+profit or loss
+2017
+1 January
+(214)
+173
+Exchange rate contracts
+(60)
+(347)
+(5)
+153
+(5)
+1
+(154)
+Interest rate contracts
+(209)
+20
+(55)
+19
+(193)
+Exchange rate contracts
+Derivative financial liabilities
+20
+166
+4
+23
+Exchange rate contracts
+Derivative financial liabilities
+Financial liabilities:
+160,556
+(65)
+(60,137)
+58,976
+(1,919)
+9,189
+154,512
+4,421
+6,139
+(1,919)
+201
+Debt securities
+Available-for-sale financial assets
+155,788
+Interest rate contracts
+351
+(134)
+(63)
+193
+154
+amount
+Commodity derivatives and others
+(2)
+Financial assets designated as at FVTPL
+153,792
+9,319
+52,814
+(60,137)
+2
+122,387
+Tier 2 capital
+Share capital
+Deferred income tax liabilities
+526,940
+526,940
+617,842
+617,842
+Debt securities issued
+82,502
+82,550
+95,318
+95,678
+Taxes payable
+1,217
+32,820
+33,351
+33,636
+Employee benefits payable
+19,564,945
+19,562,936
+21,410,976
+21,408,934
+Due to customers
+260,274
+260,274
+341,354
+33,142
+341,354
+1,024
+233
+151,952
+151,952
+151,968
+151,968
+Capital reserve
+86,051
+86,051
+86,051
+86,051
+Other equity instruments
+356,407
+433
+356,407
+356,407
+Equity
+23,843,464
+456,349
+558,452
+23,945,987
+25,250,947
+25,354,657
+Total liabilities
+261,639
+365,246
+Other liabilities
+356,407
+Certificates of deposit
+1,044,481
+1,046,338
+Liabilities
+consolidation*
+scope of
+financial
+statements*
+under
+regulatory
+Balance sheet
+Balance sheet
+as in published
+Consolidated
+31 December 2017 31 December 2017
+scope of
+consolidation*
+under
+regulatory
+Due to central banks
+31 December 2018 31 December 2018
+Balance sheet
+Consolidated
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+Unaudited Supplementary Financial Information
+307
+Annual Report 2018
+Prepared in accordance with PRC GAAP.
+(*)
+25,979,568
+26,087,043
+27,589,328
+Balance sheet
+as in published
+financial
+statements*
+Due to banks and other financial institutions
+481
+481
+513,495
+514,801
+Repurchase agreements
+78,556
+78,556
+73,573
+73,573
+Derivative financial liabilities
+89,359
+89,361
+87,399
+87,400
+Financial liabilities measured at FVTPL
+491,948
+491,948
+486,249
+486,249
+institutions
+Placements from banks and other financial
+1,214,601
+1,214,601
+1,328,246
+1,328,246
+456
+456
+Other comprehensive income
+27,699,540
+(11,875)
+(62,058)
+45
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+2,312,143
+79,952
+2,110,060
+Tier 2 capital:
+46
+Tier 2 capital instruments and related premium
+202,761
+222,321
+X17
+47
+80,110
+Invalid instruments to tier 2 capital after the transition
+period
+101,425
+48
+Valid portion of minority interests
+1,991
+3,303
+X27
+49
+Including: Invalid portion to tier 2 capital after the
+transition period
+856
+1,051
+50
+81,140
+51
+Additional tier 1 capital
+Reference
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+39
+Deductible amount of non-significant minority
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+40
+Significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+304
+ICBC
+Item
+44
+Unaudited Supplementary Financial Information
+41a
+41b
+41c
+42
+43
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Others that should be deducted from additional tier 1 capital
+Undeducted shortfall that should be deducted from tier 2
+capital
+Total regulatory adjustments to additional tier 1
+capital
+31 December
+2018
+31 December
+2017
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+127,990
+332,742
+2,329,320
+9,061
+2,338,381
+2,344,883
+Total equity
+14,882
+Minority interests
+2,330,001
+parent company
+Equity attributable to equity holders of the
+1,096,868
+1,097,544
+1,205,924
+2,127,491
+1,206,666
+264,850
+264,892
+278,980
+279,064
+General reserve
+232,660
+232,703
+261,636
+261,720
+Surplus reserve
+(61,063)
+Retained profits
+2,127,725
+13,565
+2,141,056
+71,736
+297,360
+X02+X04
+Tier 2 capital: Regulatory adjustments
+52
+53
+54
+54
+55
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+56a
+Investments in tier 2 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+56b
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+500
+X31
+--
+56c
+Others that should be deducted from tier 2 capital
+57 Total regulatory adjustments to tier 2 capital
+29,531
+ICBC
+308
+(*) Prepared in accordance with PRC GAAP.
+8,379
+2,136,104
+(11,646)
+38
+Total assets
+335,012
+Balance sheet
+as in published
+financial
+statements*
+Balance sheet
+under
+regulatory
+scope of
+consolidation*
+Assets
+Cash and balances with central banks
+Due from banks and other financial
+institutions
+Precious metals
+Placements with banks and
+Consolidated
+other financial institutions
+3,372,576
+3,372,576
+3,613,872
+3,613,872
+384,646
+374,509
+370,074
+363,278
+181,292
+181,292
+238,714
+Derivative financial assets
+238,714
+scope of
+consolidation*
+Balance sheet
+61,799
+X04
+81
+the current period due to phase-out arrangements
+Excluded from core tier 1 capital due to cap
+82
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+83
+84
+85
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period
+81,140
+under
+regulatory
+101,425
+46,822
+due to cap
+306
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(ii) Consolidated financial statements
+31 December 2018 31 December 2018 31 December 2017 31 December 2017
+Consolidated
+Balance sheet
+as in published
+financial
+statements*
+67,102
+577,803
+577,803
+477,537
+Financial investments measured at
+amortised cost
+4,519,182
+4,481,665
+- Available-for-sale financial assets
+Held-to-maturity investments
+― Receivables
+Long-term equity investments
+Fixed assets
+Construction in progress
+1,496,453
+3,542,184
+1,465,021
+3,536,757
+1,408,749
+277,129
+29,124
+37,104
+32,441
+40,421
+253,525
+253,460
+216,156
+216,088
+35,081
+35,079
+29,531
+227,216
+1,430,163
+FVOCI
+Financial investments measured at
+477,537
+71,335
+71,335
+89,013
+89,013
+Reverse repurchase agreements
+734,049
+733,460
+986,631
+981,553
+Loans and advances to customers
+15,046,132
+15,045,239
+Financial investments
+6,754,692
+6,662,605
+13,892,966
+5,756,704
+13,892,372
+5,669,906
+_
+Financial investments measured at
+FVTPL
+805,347
+772,191
+440,938
+440,912
+120,224
+318,891
+Valid cap of surplus provision for loan impairment in
+tier 2 capital under the internal ratings-based approach
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for
+79
+Capital adequacy ratio
+15.39%
+15.14%
+64
+Institution specific buffer requirement
+4.0%
+3.5%
+569
+65
+Including: Capital conservation buffer requirement
+2.5%
+63
+2.5%
+Including: Countercyclical buffer requirement
+Annual Report 2018
+305
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Item
+67
+Including: G-SIB buffer requirement
+68
+Percentage of core tier 1 capital meeting buffers to
+66
+risk-weighted assets
+13.27%
+Tier 1 capital adequacy ratio
+186,769
+200,910
+Other assets
+48,392
+48,392
+58,097
+58,375
+332,742
+500
+296,860
+59
+13.45%
+Total capital (tier 1 capital + tier 2 capital)
+2,406,920
+60
+Total risk-weighted assets
+17,190,992
+15,902,801
+Requirements for capital adequacy ratio and reserve capital
+61
+Core tier 1 capital adequacy ratio
+12.98%
+12.77%
+62
+2,644,885
+Domestic minima for regulatory capital
+Core tier 1 capital adequacy ratio
+69
+Mortgage servicing rights (net of deferred tax liabilities)
+N/A
+N/A
+75
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+57,073
+48,158
+Valid caps of surplus provision for loan impairment in
+tier 2 capital
+76
+Provision for loan impairment under the weighted approach
+74
+19,049
+X01
+77
+Valid cap of surplus provision for loan impairment in
+7,766
+9,937
+X02
+78
+tier 2 capital under the weighted approach
+Surplus provision for loan impairment under the internal
+ratings-based approach
+393,682
+322,539
+X03
+17,943
+X06+X10+X13
+28,353
+32,215
+70
+Tier 1 capital adequacy ratio
+71 Capital adequacy ratio
+Amounts below the thresholds for deduction
+31 December
+31 December
+2018
+2017
+Reference
+1.5%
+1.0%
+7.98%
+7.77%
+5.0%
+5.0%
+6.0%
+6.0%
+8.0%
+8.0%
+72
+73
+Undeducted portion of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+64,004
+35,059
+X05+X07+X08+
+X09+X12+X29+X30
+80
+Direct or indirect investments in own additional tier 1
+instruments
+Deferred income tax assets
+Additional tier 1 capital: Regulatory adjustments
+56,270
+57,177
+28,509
+35,846
+2017
+2018
+Rescheduled loans and advances overdue
+for less than three months
+overdue for more than three months
+Less: Rescheduled loans and advances
+Rescheduled loans and advances
+(iv) Rescheduled loans and advances to customers
+39,165
+Overseas and others
+Yangtze River Delta
+Defined-benefit pension fund net assets (net of deferred
+3b
+Pearl River Delta
+Central China
+Western China
+Bohai Rim
+Head Office
+(iii) Overdue loans and advances to customers by geographical distribution
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+Northeastern China
+Unaudited Supplementary Financial Information
+49,380
+39,839
+(0.01%)
+(1,374)
+(0.01%)
+(1,143)
+0.04%
+5,158
+0.05%
+7,211
+advances
+advances
+% of total
+loans and
+39,223
+% of total
+loans and
+31 December 2018
+286,075
+269,932
+16,662
+13,916
+23,596
+26,474
+33,658
+24,994
+38,161
+33,137
+31 December 2017
+301
+Annual Report 2018
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+94,998
+75,751
+143,907
+152,352
+180,746
+149,910
+467,601
+428,442
+673,839
+629,955
+13,139,958
+15,419,905
+14,411,937
+2018
+(ii) Overdue loans and advances to customers
+Europe
+Africa
+North and South America
+of which attributed to Hong Kong
+Asia Pacific (excluding Mainland China)
+Mainland China
+(i) Analysis by location of the counterparties
+(d) Loans and advances to customers (excludes accrued interest)
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+2017
+14,233,448
+2018
+2017
+The definition of overdue loans and advances to customers is set out as follows:
+1.26%
+1.16%
+0.78%
+0.62%
+Over 12 months
+0.31%
+0.31%
+Between 6 and 12 months
+0.17%
+0.23%
+Between 3 and 6 months
+As a percentage of the total gross loans and advances to customers:
+178,857
+178,779
+110,648
+94,933
+Over 12 months
+44,087
+48,523
+Between 6 and 12 months
+24,122
+35,323
+Between 3 and 6 months
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+6,068
+ICBC
+0.04%
+0.03%
+12
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+Shortfall of provision for loan impairment
+(3,739)
+(3,708)
+X20
+13
+Gain on sale related to asset securitisation
+14
+Unrealised gains and losses due to changes in own credit
+risk on fair valued liabilities
+15
+11
+151,952
+За Capital reserve
+04
+public reserves)
+90,889
+140,322
+Accumulated other comprehensive income (and other
+3
+X23
+1,096,868
+1,205,924
+Retained profits
+151,968
+2c
+excluding those arising from temporary differences (net
+of deferred tax liabilities)
+10
+Others
+(11,646)
+(61,063)
+X24
+Valid portion to core tier 1 capital during the transition
+period (only applicable to non-joint stock companies.
+Fill in 0 for joint stock banks)
+56
+Valid portion of minority interests
+3,752
+2,716
+X25
+Core tier 1 capital before regulatory adjustments
+Deferred tax assets that rely on future profitability
+2,247,021
+7
+Core tier 1 capital: Regulatory adjustments
+Prudential valuation adjustments
+8
+Goodwill (net of deferred tax liabilities)
+8,820
+9
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+1,927
+8,478
+1,532
+X16
+X14-X15
+2,044,390
+X22
+264,850
+278,980
+In addition to those disclosed above, exposures to other non-bank counterparties outside Mainland China to which credit is
+granted for use in Mainland China are considered insignificant to the Group.
+81,707
+172,719
+Allowance for impairment losses of lifetime ECL credit-impaired financial assets
+Individually assessed allowance for impairment losses
+20,327,955
+21,848,573
+17,106,967
+3,220,988
+18,946,049
+2,902,524
+Off-balance sheet exposure
+On-balance sheet exposure
+2017
+302
+2018
+0.00%
+0.00%
+Over 12 months
+financial institutions:
+As a percentage of total gross placements with banks and other
+16
+16
+The Group's gross placements with banks and other financial institutions which
+have been overdue with respect to either principal or interest for a period of:
+Over 12 months
+2017
+2018
+(e) Overdue placements with banks and other financial institutions
+(f) Exposures to Mainland China non-bank entities
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+General reserve
+37
+2b
+X21
+232,660
+261,636
+Surplus reserve
+2a
+1,594,378
+X18
+356,407
+356,407
+1,746,540
+Retained earnings
+2
+Paid-in capital
+1
+Reference
+2017
+31 December
+31 December
+2018
+Core tier 1 capital:
+Item
+(i) Capital composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(g) Correspondence between balance sheet in published financial statements and capital
+composition
+3,784
+300
+X19
+98,153
+tax liabilities)
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and IFRSS
+for the year ended 31 December 2018 (2017: no differences). There are no differences between the equity attributable to
+equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2018 (As at 31 December 2017: no
+differences).
+(b) Foreign currency concentrations
+31 December 2018
+USD
+HKD
+Spot assets
+16
+Forward purchases
+418,669
+(2,133,678)
+(368,795)
+Others
+691,979
+(550,857)
+Total
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+3,247,466
+(3,053,330)
+3,357,899
+182,036
+756,539
+2,136,818
+4,296,474
+17
+18
+Reference
+2017
+31 December
+31 December
+2018
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier 1
+capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in core tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+25
+24
+23
+22
+21
+67
+Item
+For the year ended 31 December 2018
+Unaudited Supplementary Financial Information
+303
+Annual Report 2018
+N/A
+N/A
+Deductible amount of significant minority investment
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+20
+19
+--
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+banks or between banks and other financial institutions
+Deductible amount of non-significant minority
+investment in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+(In RMB millions, unless otherwise stated)
+Forward sales
+(3,472,904)
+(103,944)
+Others
+723,257
+(500,347)
+Total
+2,995,127
+(2,733,666)
+2,303,473
+208,462
+(2,317,162)
+(160,053)
+450,962
+(653,429)
+2,962,897
+(3,130,644)
+(40,225)
+998
+(317,406)
+214
+(31,117)
+65,161
+20,657
+54,701
+78,908
+1,747
+29,759
+Net (short)/long position
+Net structural position
+110,414
+2,058,262
+(39,013)
+(1,915,913)
+333,160
+1,938,710
+(866,993)
+(4,443,841)
+Net option position
+(11,568)
+1,705
+(417)
+(10,280)
+Net (short)/long position
+(123,433)
+129,671
+30,251
+36,489
+Net structural position
+106,152
+(269)
+27,898
+133,781
+Spot assets
+Spot liabilities
+Forward purchases
+Forward sales
+Net option position
+31 December 2017
+USD
+HKD
+N/A
+N/A
+Spot liabilities
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+398,186
+306,368
+2,033,807
+111,393
+54,698
+7,350
+136,851
+1,091,502
+316,384
+813,546
+111,012
+51,155
+251,239
+15,483
+76,766
+118,743
+― of which attributed to Hong Kong
+North and South America
+205,372
+762,391
+Asia Pacific
+Total
+Others
+sector
+sector
+Non-bank
+private
+Official
+Banks and
+other
+financial
+institutions
+31 December 2018
+954,651
+2,340,175
+31 December 2017
+Banks and
+other
+financial
+institutions
+1,146,058
+312,653
+501,398
+307,277
+12,511
+130,222
+419,617
+79,305
+283,624
+16,143
+112,257
+52,287
+40,545
+of which attributed to Hong Kong
+North and South America
+1,750,985
+26a
+1,015,836
+200,396
+449,111
+Asia Pacific
+Total
+Others
+sector
+sector
+Non-bank
+private
+Official
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head
+Office is located in another country.
+International claims refer to the sum of cross-border claims in all currencies and local claims in foreign currencies, including
+loans and advances to customers, balances with central banks, amounts due from banks and other financial institutions and
+debt investments.
+85,642
+(In RMB millions, unless otherwise stated)
+31
+79,375
+79,375
+Additional tier 1 capital instruments and related premium
+30
+Additional tier 1 capital:
+14,282
+2,030,108
+2,232,033
+Core tier 1 capital
+29
+14,988
+Including: Portion classified as equity
+Total regulatory adjustments to core tier 1 capital
+additional tier 1 capital and tier 2 capital
+Others that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+27
+26c
+58
+financial institutions that are under control but not
+Shortfall in core tier 1 capital instruments issued by
+26b
+X11
+(c) International claims
+7,980
+28
+79,375
+subject to consolidation
+X28
+For the year ended 31 December 2018
+Unaudited Supplementary Financial Information
+79,375
+299
+Annual Report 2018
+investments in overseas subsidiaries, associates and joint ventures.
+capital and statutory reserves of overseas branches; and
+•
+property and equipment, net of depreciation charges;
+•
+36 Additional tier 1 capital before regulatory
+adjustments
+79,952
+80,110
+7,980
+Invalid instruments to additional tier 1 capital after the
+35
+X26
+577
+32
+735
+Valid portion of minority interests
+34
+transition period
+33
+Including: Portion classified as liabilities
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+11
+1,446,607
+3456
+Additional requirements, of which:
+10
+25,354
+3,960,547
+Outflows related to derivative exposures and other collateral requirements
+12
+1,223,431
+Secured funding
+Outflows related to loss of funding on debt products
+13
+Credit and liquidity facilities
+2,737,116
+223,176
+14
+1,223,431
+9
+2,219,647
+75,301
+Other contractual funding obligations
+Stable deposits
+48,891
+1,793
+Less stable deposits
+10,010,133
+1,001,013
+Unsecured wholesale funding, of which:
+12,018,257
+Operational deposits (excluding those generated from correspondent
+banking activities)
+6,881,028
+1,669,869
+7
+Non-operational deposits (all counterparties)
+5,061,928
+8
+Unsecured debt
+75,301
+3,964,817
+2,739,371
+58,837
+3,638,321
+Total adjusted
+value
+4,921,335
+21
+Total HQLA
+22
+Total net cash outflows
+Total cash inflows
+23
+Data of the above table are all the simple arithmetic means of the 92 natural days' figures of the recent quarter.
+(j) Net Stable Funding Ratio (NSFR)
+3,886,173
+126.66%
+As at 31 December 2018, the NSFR of the Group was 126.62%, the available stable finding (ASF) was RMB18,647,495
+million and the required stable finding (RSF) was RMB14,726,640 million.
+318
+ICBC
+1,002,806
+Liquidity coverage ratio (%)
+59,213
+20
+1,222,330
+15
+Other contingent funding obligations
+3,183,889
+127,123
+16
+Total cash outflows
+6,625,544
+Cash inflows
+1,216,322
+17
+958,599
+488,036
+18
+Inflows from fully performing exposures
+1,457,392
+1,035,013
+19
+Other cash inflows
+Secured lending (including reverse repos and securities borrowing)
+10,059,024
+(2,211,697)
+2
+Permanent
+Full write-down
+Full write-down
+Full write-down
+passu with other
+subordinated debts
+general creditor, pari
+Subordinated to
+depositor and
+write-down
+N/A
+Permanent
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Full write-down
+hierarchy in liquidation
+(specify instrument type
+immediately senior to
+instrument)
+Position in subordination
+write-down
+N/A
+description of write-up
+mechanism
+permanent or temporary
+Including: If write-down,
+or partial
+Including: If write-down, full
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+Unaudited Supplementary Financial Information
+315
+Annual Report 2018
+equivalent support
+is necessary, without
+which the Issuer
+would become
+non-viable
+Including: If temporary
+write-down,
+that a public sector
+injection of capital or
+Permanent
+write-down
+N/A
+Subordinated to
+depositor and
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+(h) Disclosure of Leverage Ratio
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+N/A
+present bonds
+No
+N/A
+No
+ICBC
+316
+non-compliant features
+Permanent
+write-down
+N/A
+N/A
+No
+No
+Including: If yes, specify
+Non-compliant transitioned
+features
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+capital, other tier 1
+capital instruments
+and hybrid capital
+depositor and
+general creditor,
+but senior to equity
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+present bonds
+Subordinated to
+depositor and
+general creditor,
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+passu with other
+subordinated debts
+general creditor, pari
+N/A
+relevant authority
+having decided
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+earlier: (i) CBIRC
+having decided that
+름름
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+No
+름름증
+Cumulative
+No
+No
+N/A
+Cumulative
+No
+write-down trigger(s)
+Including: If write-down,
+Write-down feature
+instrument it converts into
+specify issuer of
+type convertible into
+Including: If convertible,
+optional conversion
+Including: If convertible,
+specify instrument
+mandatory or
+N/A
+N/A
+N/A
+Cumulative
+N/A
+름름증
+No
+is necessary, without
+which the Issuer
+would become
+non-viable
+having decided
+that a public sector
+injection of capital or
+equivalent support
+relevant authority
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+Whichever occurs
+Yes
+Yes
+is necessary, without
+which the Issuer
+would become
+non-viable
+non-viable; or (ii) any
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+Yes
+of the Bank
+Yes
+Non-viability
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+S/N
+Retail deposits and deposits form small business customers, of which:
+Item
+Total consolidated assets as per published financial statements
+Balance of adjusted off-balance sheet assets
+19
+(2,397,811)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+4,211,871
+4,400,110
+Off-balance sheet exposure at gross notional amount
+17
+774,077
+432,162
+Total securities financing transaction exposures
+2,002,299
+16
+15
+57,693
+35,125
+CCR exposure for SFT assets
+14
+SFT assets
+Less: Netted amounts of cash payables and cash receivables of gross
+13
+716,384
+397,037
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+12
+Agent transaction exposures
+150,827
+2,000,174
+Net tier 1 capital
+Cash outflows
+4,921,335
+Total high-quality liquid assets (HQLA)
+1
+Total
+weighted
+value
+value
+un-weighted
+Fourth-quarter 2018
+Total
+High-quality liquid assets
+S/N Item
+(i) Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Approaches
+(In RMB millions, unless otherwise stated)
+20
+For the year ended 31 December 2018
+317
+Annual Report 2018
+7.51%
+7.79%
+Leverage ratio
+22
+28,084,967
+29,679,878
+Balance of adjusted on- and off-balance sheet assets
+21
+2,110,060
+2,312,143
+Unaudited Supplementary Financial Information
+139,449
+(27,001)
+(25,408)
+31 December
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets and Related
+Information
+28,084,967
+(14,282)
+2,000,174
+57,693
+61,814
+68,114
+35,125
+2,002,299
+(14,988)
+29,679,878
+26,087,043
+(107,475)
+27,699,540
+(110,212)
+2017
+31 December
+S/N
+31 December
+2018
+8
+Other adjustments
+7
+Adjustment for off-balance sheet items
+6
+Adjustment for securities financing transactions
+Adjustments for derivative financial instruments
+Adjustments for fiduciary assets
+of regulatory consolidation
+Consolidated adjustments for accounting purposes but outside the scope
+345
+2
+Balance of adjusted on- and off-balance sheet assets
+Item
+2018
+31 December
+2017
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+11
+10
+(25,768)
+46,496
+(20,180)
+44,968
+Less: Exempted CCP leg of client-cleared trade exposures
+Effective notional amount of written credit derivatives
+9
+8
+63,145
+63,890
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided
+in derivatives transactions
+7
+56
+93,955
+76,179
+(14,282)
+25,159,889
+27,105,968
+(14,988)
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+4
+3
+2
+but including collateral)
+25,174,171
+27,120,956
+On-balance sheet items (excluding derivatives and SFTS,
+1
+1
+Subordinated to
+No
+N/A
+supervisory approval)
+Issuer call (subject to prior
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+Including: Optional call date,
+latest reporting date)
+Amount recognised in regulatory
+Group
+Group
+Core tier 1
+capital instrument
+Instrument type
+Parent company/
+Parent company/
+Parent company/
+capital (in millions, as at the
+contingent call dates and
+redemption amount
+RMB339,126
+RMB11,958
+Additional tier 1
+capital instrument
+Group
+Group
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+Parent company/
+Parent company/
+Parent company/
+USD2,940
+Other equity
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+17,928
+RMB169,202
+Core tier 1
+capital instrument
+N/A
+N/A
+RMB86,795
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+19 October 2006
+Perpetual
+RMB269,612
+Share capital,
+Capital reserve
+Including: Eligible to the parent
+company/group level
+Additional tier 1
+Banks (Provisional)
+Additional tier
+1 capital
+360011
+The Bank
+Preference
+shares (Domestic)
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+84602
+The Bank
+Preference
+shares (Offshore)
+Company Law of the
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+Preference
+shares (Offshore)
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+China
+The Bank
+4603
+Preference
+shares (Offshore)
+(H share)
+The Bank
+1398
+Securities and Futures
+Ordinance of Hong
+Kong/Hong Kong,
+The Bank
+601398
+Securities Law of the
+People's Republic of
+China/China
+The Bank
+4604
+People's Republic
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Measures on
+Preference Shares,
+Guidance on
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+arrangement of Regulation
+Core tier 1 capital
+Core tier 1 capital
+Including: Post-transition
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Core tier 1 capital
+Core tier 1 capital
+Including: Transition arrangement
+Regulatory treatment
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Governing Capital of Commercial
+Governing law(s) of the instrument
+capital instrument
+4,542
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Floating
+Floating
+Including: Fixed or floating
+Coupons/dividends
+Fixed to floating
+Preference
+shares (Domestic)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Ordinary shares
+(H share)
+(A share)
+capital instrument
+Ordinary shares
+Main features of regulatory
+Preference
+shares (Offshore)
+dividend/coupon
+Including: Coupon rate and
+N/A
+discretionary
+Fully
+Fully
+Including: Fully discretionary,
+dividend stopper
+Yes
+18 November 2020
+4.5% (dividend
+rate) before
+6% (dividend
+rate) before
+10 December 2019
+Yes
+6% (dividend
+rate) before
+10 December 2021
+Yes
+10 December 2019
+Yes
+N/A
+N/A
+Including: Existence of a
+6% (dividend
+rate) before
+any related index
+N/A
+(In RMB millions, unless otherwise stated)
+RMB44,947
+For the year ended 31 December 2018
+311
+Yes
+18 November 2015
+Perpetual
+No maturity date
+RMB45,000
+Other equity
+Yes
+Yes
+No maturity date
+10 December 2014
+Perpetual
+Including: Subsequent call dates,
+10 December 2014
+Perpetual
+No maturity date
+No
+No
+No maturity date
+No maturity date
+10 December 2014
+Perpetual
+RMB12,000
+Other equity
+EUR 600
+Other equity
+No maturity date
+Yes
+if applicable
+The First
+Redemption Date
+is 10 December
+2019, in full or
+Annual Report 2018
+all the Domestic
+Preference Shares
+or conversion of
+is 18 November
+2020, in full or
+partial amount
+Commences on the
+First Redemption
+Date (18 November
+2020) and ends
+on the completion
+date of redemption
+The First
+Redemption Date
+Date
+partial amount
+10 December in
+each year after the
+First Redemption
+is 10 December
+2019, in full or
+The First
+Redemption Date
+Date
+partial amount
+10 December in
+each year after the
+First Redemption
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+N/A
+N/A
+NA
+is 10 December
+2021, in full or
+The First
+Redemption Date
+Unaudited Supplementary Financial Information
+Unique identifier
+Issuer
+Ordinary shares
+Including: Significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+X30
+2,108
+4,481,665
+Financial investments measured at amortised cost
+Including: Non-significant minority investments in tier 2
+X29
+X31
+5,963
+3,883
+X09
+5,845
+1,408,749
+X08
+45,164
+X07
+X10
+capital instruments issued by financial institutions
+that are not subject to consolidation
+Long-term equity investments
+Including: Investment in core tier1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+scope of
+31 December 2018
+Balance sheet
+under regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+Unaudited Supplementary Financial Information
+309
+Annual Report 2018
+X13
+28,298
+X12
+98
+X11
+7,980
+37,104
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+are not subject to consolidation
+investments in capital instruments issued by
+financial institutions that are not subject to consolidation
+Including: Undeducted portion of non-significant minority
+4,737
+consolidation
+X06
+X05
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in core tier 1
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at FVTPL
+Financial investments
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+Including: Non-significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Total loans and advances to customers
+Item
+scope of
+Balance sheet
+under regulatory
+31 December 2018
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+(iii) Description of related items
+Loans and advances to customers
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at FVOCI
+89
+772,191
+X04
+120,224
+X03
+393,682
+X02
+7,766
+X01
+19,049
+Reference
+15,457,970
+15,045,239
+consolidation
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in tier 2
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+34
+Item
+Other assets
+Interest receivable
+Retained profits
+X22
+278,980
+General reserve
+X21
+261,636
+Surplus reserve
+1,205,924
+(262)
+(22,253)
+(1,150)
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+X20
+(3,739)
+Including: Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+(3,804)
+Others
+X23
+Minority interests
+9,061
+Ordinary shares
+(A share)
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+(iv) Main features of eligible capital instruments
+ICBC
+310
+X27
+1,991
+Including: Valid portion to tier 2 capital
+X26
+735
+Including: Valid portion to additional tier 1 capital
+X25
+3,752
+Including: Valid portion to core tier 1 capital
+15,823
+X24
+(11,646)
+X19
+X16
+8,820
+Others
+Repossessed assets
+Long-term deferred expenses
+Goodwill
+145,678
+X15
+17,374
+X14
+19,301
+2,624
+186,769
+Reference
+Other receivables
+Including: Land use rights
+Intangible assets
+3,484
+discretionary
+9,366
+Debt securities issued
+151,968
+X28
+79,375
+86,051
+X18
+356,407
+Reserve for cash flow hedging
+Reserve for changes in fair value of financial assets
+Other comprehensive income
+Capital reserve
+Including: Preference shares
+Other equity instruments
+Share capital
+X17
+202,761
+617,842
+Including: Valid portion of tier 2 capital instruments and their premium
+(2,504)
+름름증
+Partially
+discretionary
+Partially
+discretionary
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Banks (Provisional)
+Capital of Commercial
+Regulation Governing
+Including: Post-transition
+arrangement of
+arrangement of
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Regulatory treatment
+Including: Transition
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+The Bank
+1728022
+Tier 2 capital
+Regulation Governing
+Capital of Commercial
+Parent company/
+regulatory capital
+Amount recognised in
+Instrument type
+the parent
+company/group level
+Including: Eligible to
+Banks (Provisional)
+instrument
+RMB44,000
+Tier 2 capital
+Tier 2 capital
+instrument
+RMB44,000
+Tier 2 capital
+instrument
+RMB equivalent
+13,626
+instrument
+RMB19,994
+Tier 2 capital
+Parent company/
+Group
+Group
+Parent company/
+Parent company/
+Group
+Group
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+(in millions, as at the latest
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+The Notes and
+the Fiscal Agency
+Agreement shall be
+governed by, and
+shall be construed
+in accordance with,
+New York law, except
+that the provisions
+of the Notes relating
+to subordination
+shall be governed
+by, and construed in
+accordance with,
+PRC law
+N/A
+N/A
+N/A
+No
+No
+Domestic Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+senior to the
+N/A
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+and instruments
+issued or guaranteed
+by the Bank ranking
+Subordinated to all
+liabilities of the Bank
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+름증
+No
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+No
+N/A
+Annual Report 2018
+ISIN: USY39656AC06
+ISIN: US455881AD47
+Regulation S
+The Bank
+Rule 144A
+Securities Law of the
+People's Republic of
+China/China
+The Bank
+1428009
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Governing law(s) of the
+instrument
+Unique identifier
+Issuer
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+Unaudited Supplementary Financial Information
+N/A
+No
+313
+The Bank
+1728021
+No
+reporting date)
+Accounting treatment
+No
+Including: Existence of a
+any related index
+4.45%
+4.45%
+4.875%
+5.80%
+dividend stopper
+Including: Coupon rate and
+Fixed
+Fixed
+Fixed
+Fixed
+Including: Fixed or floating
+Coupons/dividends
+dates, if applicable
+dividend/coupon
+Mandatory
+No
+Mandatory
+No
+Cumulative
+No
+conversion trigger(s)
+Including: If convertible,
+Including: If convertible,
+Including: If convertible,
+fully or partially
+conversion trigger(s)
+Including: If convertible,
+Convertible or non-convertible
+Including: Non-cumulative or
+cumulative
+incentive mechanism
+coupons/dividends
+Including: Redemption
+partially discretionary or
+mandatory cancellation of
+Including: Fully discretionary,
+Mandatory
+Mandatory
+No
+N/A
+Par value of instrument
+(in millions)
+N/A
+N/A
+RMB44,000
+Debt securities issued
+6 November 2017
+Dated
+RMB44,000
+Debt securities issued
+21 September 2015
+Dated
+4 August 2014
+Dated
+5 August 2024
+USD2,000
+ICBC
+Debt securities issued
+20 November 2017
+Dated
+314
+Issuer call (subject to prior
+maturity date
+Including: Original
+Perpetual or dated
+Debt securities issued
+RMB20,000
+Original date of issuance
+supervisory approval)
+Including: Optional call date,
+contingent call dates
+and redemption amount
+21 September 2025
+8 November 2027
+22 November 2027
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Including: Subsequent call
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+in full amount
+in full amount
+in full amount
+22 November 2022,
+8 November 2022,
+N/A
+5 August 2019,
+Yes
+Yes
+No
+Yes
+N/A
+shareholders
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+debts, and preference debts, and preference
+shareholders
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+occurs
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+issuance plan
+Mandatory
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+occurs
+The initial
+conversion price
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+Fully or partially
+convertible when
+The initial
+conversion price
+Capital Trigger
+Event
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+The initial
+conversion price
+occurs
+Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+N/A
+N/A
+Including: If convertible,
+conversion trigger(s)
+issuance plan
+Mandatory
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+conversion
+mandatory or optional
+N/A
+N/A
+Including: If convertible,
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+20 trading days
+preceding 25 July
+Bank for the
+price of the A
+shares of the
+average trading
+is equal to the
+The initial
+conversion price
+occurs
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Yes
+issuance plan
+Mandatory
+N/A
+Including: If convertible,
+N/A
+Event
+No
+Non-cumulative
+No
+Non-cumulative
+No
+Non-cumulative
+No
+Non-cumulative
+Convertible or non-convertible
+Including: Non-cumulative
+incentive mechanism
+Including: Redemption
+coupons/dividends
+mandatory cancellation of
+partially discretionary or
+Partially
+discretionary
+or cumulative
+No
+Non-cumulative
+No
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Capital Trigger
+Event or Tier 2
+Event or Tier 2
+Additional Tier 1
+Capital Trigger
+Capital Trigger
+Additional Tier 1
+N/A
+N/A
+Yes
+Yes
+Yes
+No
+No
+conversion trigger(s)
+Including: If convertible,
+Non-cumulative
+Including: If convertible,
+fully or partially
+N/A
+N/A
+Core tier 1 capital
+Including: If yes, specify
+features
+Non-compliant transitioned
+(specify instrument type
+immediately senior to
+instrument)
+hierarchy in liquidation
+Position in subordination
+mechanism
+non-compliant features
+description of write-up
+permanent or temporary
+Including: If write-down,
+full or partial
+Including: If write-down,
+write-down trigger(s)
+N/A
+N/A
+Including: If temporary write-down,
+름름름
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+ICBC
+312
+instrument it converts into
+specify issuer of
+The Bank
+The Bank
+The Bank
+The Bank
+N/A
+N/A
+Including: If convertible,
+type convertible into
+specify instrument
+Core tier 1 capital
+Core tier 1 capital
+Main features of regulatory
+Partially
+discretionary
+capital instrument
+Ordinary shares
+Including: If write-down,
+No
+No
+No
+3
+No
+No
+Write-down feature
+shares (Domestic)
+shares (Offshore)
+shares (Offshore)
+shares (Offshore)
+(H share)
+Preference
+Preference
+Preference
+Preference
+Ordinary shares
+(A share)
+Core tier 1 capital
+Postcode: 570203
+2018 Ranking
+Email: icbctokyo@icbc.co.jp
+Tel: +813-52232088
+Fax: +813-52198502
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+#640 Jungang-daero,
+Busanjin-gu, Busan 47353,
+Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Address: Suite 910 and 911,
+9th floor, Central Tower,
+Sukhbaatar Square,
+Khoroo 8, Sukhbaatar
+district, Ulaanbaatar,
+Mongolia
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
++976-77106677
+Fax: +976-77108866
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+32nd Floor, Jl. M.H.
+Thamrin No. 81, Jakarta
+Pusat 10310, Indonesia
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 2-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-0005, Japan
+ASIA-PACIFIC
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Email: icbc@mc.icbc.com.cn
+ICBC
+List of Domestic and Overseas Branches and Offices
+Overseas Institutions
+HONG KONG AND MACAU
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong
+Email: icbchk@icbcasia.com
+Tel: +852-25881188
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Fax: +852-28051166
+SWIFT: UBHKHKHH
+ICBC International Holdings
+Limited
+Address: 37/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong
+Email: info@icbci.com.hk
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICBHHKHH
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau
+3 Garden Road, Central,
+Hong Kong
+324
+Industrial and Commercial
+Bank of China Limited,
+Manila Branch
+Address: 24F, The Curve,
+Email: info@ph.icbc.com.cn
+Tel: +63-22803300
+Fax: +63-24032023
+SWIFT: ICBKPHMM
+Tel: +855-23955880
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Industrial and Commercial
+Bank of China Limited,
+Yangon Branch
+Address: ICBC Center, Crystal
+Tower, Kyun Taw Road,
+Kamayut Township,
+Yangon, Myanmar
+Tel: +95-019339258
+Fax: +95-019339278
+SWIFT: ICBKMMMY
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Email: office@kz.icbc.com.cn
+Tel: +7-7272377085
+Fax: +7-7272377070
+SWIFT: ICBKKZKX
+Industrial and Commercial
+Bank of China Limited Karachi
+Branch
+Address: 15th & 16th Floor,
+Ocean Tower, G-3,
+Block-9, Scheme # 5,
+Main Clifton Road,
+Karachi,
+Pakistan.P.C:75600
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Email: icbckh@kh.icbc.com.cn
+Street 106, Phnom Penh,
+Cambodia
+Square, No. 19-20,
+Address: 17th Floor, Exchange
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Address: 622 Emporium Tower
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Email: admin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+building, 33 Le Duan
+Street, District 1,
+32nd Street Corner,
+3rd Ave, BGC, Taguig City,
+Manila 1634, Philippines
+Ho Chi Minh City, Vietnam
+Email: luugiabuu@vn.icbc.com.cn
+Tel: +84-2835208993
+325
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Address: Asean Road, Home
+No.358, Unit 12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital,
+Lao PDR
+Email: icbcvte@la.icbc.com.cn
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Annual Report 2018
+Fax: 0573-85139626
+Tel: 0573-85139616
+Postcode: 314200
+Fax: 029-87602999
+SHANGHAI MUNICIPAL BRANCH
+Address: No. 9 Pudong Avenue,
+Pudong New District,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58885888
+Fax: 021-58886888
+SHENZHEN BRANCH
+Address: North Block Financial
+Center, No. 5055
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+Postcode: 518015
+Tel: 0755-82246400
+Fax: 0755-82246247
+SICHUAN PROVINCIAL BRANCH
+Address: No. 35 Zongfu Road,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Postcode: 610000
+Tel: 028-82866000
+Fax: 028-82866025
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Postcode: 300074
+Tel: 029-87602608/87602630
+Postcode: 710004
+Province, China
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Tel: 0951-5029200
+Fax: 0951-5042348
+QINGDAO BRANCH
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+Postcode: 266071
+Tel: 0532-85809988-621031
+Fax: 0532-85814711
+QINGHAI PROVINCIAL BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Postcode: 810001
+Tel: 0971-6169722/6152326
+Tel: 022-28400648
+Fax: 0971-6152326
+BRANCH
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+Postcode: 250001
+Tel: 0531-66681622
+Fax: 0531-87941749
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Postcode: 030001
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHAANXI PROVINCIAL BRANCH
+SHANDONG PROVINCIAL
+Fax: 022-28400123/022-28400647
+XIAMEN BRANCH
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin, China
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Postcode: 200120
+Tel: 021-5879-2288
+Fax: 021-5879-2299
+ICBC Financial Asset Investment
+Co., Limited
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin Road,
+Nanjing City, Jiangsu
+Province, China
+Fax: 010-66583158
+Postcode: 211800
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Address: No.1 Aokang Avenue,
+Bishan District,
+Chongqing, China
+Postcode: 402760
+Tel: 023-85297704
+Fax: 023-85297709
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No.258 Chengnan West
+Road, Pinghu City,
+Zhejiang Province, China
+Tel: 025-58172219
+Industrial and Commercial
+Tel: 010-66583333
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 361012
+Tel: 0592-5292000
+Fax: 0592-5054663
+XINJIANG AUTONOMOUS
+REGION BRANCH
+Address: No. 231 Remin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Postcode: 830002
+Tel: 0991-5981888
+Fax: 0991-2337527
+TIBET AUTONOMOUS REGION
+BRANCH
+Address: No. 31 Jinzhu Mid-Rd.,
+Postcode: 100033
+Lhasa, Tibet Autonomous
+Region
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 650021
+Tel: 0871-65536313
+Fax: 0871-63134637
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Zhejiang Province, China
+Postcode: 310009
+Tel: 0571-87803888
+Fax: 0571-87808207
+Postcode: 850000
+Postcode: 750002
+Bank of China Limited, Mumbai
+Branch
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+Fax: +420-237762899
+SWIFT: ICBKCZPP
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 1633 Broadway,
+28th Floor, New York,
+NY 10019
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+Fax: +1-2122193211
+SWIFT: ICBKUS3N
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Email: bxgw@br.icbc.com.cn
+Tel: +55-1123956600
+SWIFT: ICBKBRSP
+Industrial and Commercial
+Bank of China Limited, Beijing,
+Zurich Branch
+Address: Nüschelerstrasse 1,
+CH-8001, Zurich,
+Switzerland
+Email: service@ch.icbc.com.cn
+Tel: +41-58-9095588
+Fax: +41-58-9095577
+Tel: +420-237762888
+Email: info@cz.icbc.com.cn
+Czech Republic
+14000 Prague 4 - Nusle,
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+Address: 73 boulevard haussmann,
+75008, Paris
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+Address: Plac Trzech Krzyży 18,
+00-499, Warszawa,
+Poland
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+SWIFT: ICBKCHZZ
+SWIFT: ICBKPLPW
+Address: Maslak Mah.
+Dereboyu, 2 Caddesi
+No:13 34398 Sariyer,
+İSTANBUL
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+Annual Report 2018
+327
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Address: 12F City Empiria,
+Na Strži 1702/65,
+ICBC Turkey Bank Anonim
+Şirketi
+Tel: +7-4952873099
+ICBC Austria Bank GmbH
+1090 Vienna,
+Austria
+20th Floor, New York,
+NY 10022,
+USA
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-2128387799
+Fax: +1-2128386688
+SWIFT: ICBKUS33
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma 250,
+Piso 18,
+Col. Juarez, C.P.06600,
+Del. Cuauhtemoc,
+Ciudad de Mexico
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Address 1: 47 Price Drive,
+Constantia, Cape Town,
+South Africa, 7806
+Address 2: T11, 2nd Floor East,
+30 Baker Street,
+Rosebank, Johannesburg,
+Gauteng, South Africa,
+2196
+Email: icbcafrica@afr.icbc.com.cn
+Tel: +27-117215950
+Fax: +27-212008012
+328
+ICBC
+2018 Ranking and Awards
+AFRICA
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Buenos Aires,
+Argentina
+Email: generaldept@at.icbc.com.cn
+Tel: +43-1-9395588
+SWIFT: ICBKATWW
+AMERICAS
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+Address: 725 Fifth Avenue,
+Industrial and Commercial Bank
+of China
+Financial Services LLC
+Address: 1633 Broadway,
+28th Floor, New York,
+NY, 10019,
+USA
+Address: Kolingasse 4,
+Email: info@icbkus.com
+Fax: +1-2129937349
+SWIFT: ICBKUS33FIN, ICBKUS3F
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710,
+Bay Adelaide Centre,
+333 Bay Street,
+Toronto, Ontario,
+M5H 2R2,
+Canada
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+ICBC PERU BANK
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+Email: perugw2@pe.icbc.com.cn
+Tel: +51-16316801
+Fax: +51-16316803
+SWIFT: ICBKPEPL
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Address: Blvd. Cecilia Grierson 355,
+(C1107 CPG)
+Tel: +1-2129937300
+Email: info@ms.icbc.com.cn
+Federation 109028
+Moscow, Russia
+Al-Soor Street, Al-Morqab,
+Block3, Kuwait City,
+Kuwait
+Email: info@kw.icbc.com.cn
+Tel: +965-22281777
+Fax: +965-22281799
+SWIFT: ICBKKWKW
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+Address: Level 42, Tower 1,
+International Towers,
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Email: info@icbc.com.au
+Tel: +612-94755588
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+326
+ICBC
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ2A
+Tower), Floor 7&8,
+Address: Building 2A(Al-Tijaria
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Email: service@sa.icbc.com.cn
+Tel: +966-112899800
+Fax: +966-112899879
+SWIFT: ICBKSARI
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+International Financial
+Center, Dubai, United
+Arab Emirates
+P.O.Box: 506856
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Address: Addax Tower Offices 5207,
+5208 and 5209, Al Reem
+Island, Abu Dhabi, United
+Arab Emirates
+P.O. Box 62108
+EUROPE
+Email: dboffice@dxb.icbc.com.cn,
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Address: Level 20, Burj Doha, Al
+Corniche Street, West Bay,
+Doha, Qatar
+P.O. BOX: 11217
+Email: ICBCDOHA@doh.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+Industrial and Commercial
+Bank of China Limited, Riyadh
+Branch
+Address: Level 4&8, A1 Faisaliah
+Tower Building No:
+7277-King Fahad Road Al
+Olaya, Zip Code: 12212,
+Additional No.: 3333,
+Unit No.:95, Kingdom of
+Saudi Arabia
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Email: icbc@icbc-ffm.de
+Email: info@be.icbc.com.cn
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Address: Via Tommaso Grossi 2,
+Milano, Italy
+Email: hradmin@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Address: Paseo de recoletos, 12,
+28001, Madrid, España
+Email: icbcspain@es.icbc.com.cn
+Tel: +34-902195588
+Fax: +34-912168866
+SWIFT: ICBKESMM
+ICBC (London) PLC
+Address: 81, Avenue Louise, 1050
+Brussels, Belgium
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: londonmarketing@
+icbcstandard.com
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Bank ICBC (joint stock
+company)
+Address: Building 29,
+Serebryanicheskaya
+embankment,
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Email: icbcamsterdam@nl.icbc.com.cn
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-26866666
+Tel: +31-205706666
+Fax: +31-206702774
+SWIFT: ICBKNL2A
+SWIFT: ICBKLULL
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-26866666
+SWIFT: ICBKLULU
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam,
+the Netherlands
+Industrial and Commercial Bank
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region, China
+PT. Bank ICBC Indonesia
+Address: The City Tower
+REGION BRANCH
+Excellent Underwriters of Local Government Bonds
+Shanghai Gold Exchange
+Special Award for Excellent Financial Institution Members
+Special Contribution Award in Bidding Market
+Excellent Market Makers in the Interbank Inquiry Market
+Special Contribution Award for International Business
+Special Contribution Award for Personal Agency Business
+Dalian Commodity Exchange
+Bank with Good Futures Settlement Business
+Best International Business Service Bank
+China UnionPay
+Contribution Award for UnionPay Technical Cooperation
+China Financial Certification Authority
+Golden List Award of China Electronic Banking Best
+Electronic Banking Award
+Golden List Award of China Electronic Banking
+Personal Mobile Banking Award
+China Securitization Forum
+― Best
+Outstanding Institutional Award for Asset Securitization
+of the Year
+Cutting-edge Award for Asset Securitization of the Year
+Organizing Committee of China International Financial
+Services Exhibition
+Outstanding Financial Products Award of the Year
+China Advertising Association
+Advertiser Award • Brand Shaping Case Award of the Year
+China Public Relations Association
+Gold Award in Enterprise Product Communication of the
+China Golden Awards for Excellence in Public Relations
+Bronze Award in Social Media Communication of the
+China Golden Awards for Excellence in Public Relations
+International E-Commerce Innovation Association
+Most Innovative Brand Award (ICBC Mobile) in the
+Business Innovation Industry List of ECI Award
+Shenzhen Stock Exchange
+China Electronics Chamber of Commerce
+Top 10 Contact Center of the Year
+Excellent Underwriters of Local Government Bonds
+Outstanding Collective Achievements in Anti-counterfeit
+Currency Work
+Excellent Custodian Bank
+Excellent Award for Proprietary Foreign Exchange Clearing
+China Foreign Exchange Trading System
+Best Market Maker
+Best Market Making Award
+Best Deal Award
+Best Spot Trading Award
+Best Forward Swap Transaction Award
+Best Non-US Trading Award
+Best Foreign Currency Pairs Market Making Award
+National Interbank Funding Center
+Excellent Market Trader of Bonds in the
+Interbank Local Currency Market
+Active Trader in the Interbank Local Currency Market
+Best Foreign Currency Borrowing Members in the Interbank
+Foreign Exchange Market
+Excellent Market Trader of Derivatives in the Interbank Local
+Currency Market
+Outstanding Contribution Award for Opening up
+Contribution Award for Opening up - - Excellent Settlement
+Agent
+National Foreign Exchange Market Self-discipline Mechanism
+Best Contribution Award
+Pioneer Award for Self-discipline
+Joint Meeting of the State Council on Anti-counterfeiting
+Money Work
+Shanghai Stock Exchange
+Best Customer Contact Center Award for Customer
+Reputation of the Year
+China Mergers & Acquisitions Association
+China M&A Service Awards Best M&A Transaction Award
+Responsible Enterprises of the Year
+21st Century Media
+Consumer Financial Innovation Technology Product
+Award of the Year
+Excellent Corporate Citizens of the Year
+21st Century Annual Finance Summit of Asia
+Best Commercial Bank in Asia
+Corporate Business Bank of the Year
+China Financial Publishing House
+Chinese Financial Brand of the Year
+Brand Communication Case Award of the Year
+Brand Marketing Case Award of the Year
+New Media Promotion Case Award of the Year
+China Securities Journal
+Golden Bull Investment Bank Award
+Securities Times
+"Jun Ding Award" for China's Private Banking Brand
+"Jun Ding Award" for Comprehensive Investment Bank in China
+"Jun Ding Award" for Financial Advisory Bank in China
+"Jun Ding Award" for China Credit Card Brand
+China Banking
+Best Production Award in the First China Banking
+Microvideo Competition
+Best Brand Publicity Award in the First China Banking
+Microvideo Competition
+Best Performance Award
+Industry Contribution Award
+Best Project Award
+Best Brand Publicity Award
+China News Service
+Top 20 Bank Digital Model List
+CFRI
+Best Marketing Practice Award of China Customer Contact Center
+Best Employee Management Award of China Customer
+Contact Center
+Asia-Pacific Contact Center Association
+Excellence Service Award for Asia-Pacific Contact
+Center Leadership Alliance
+China Committee of Corporate Citizenship of China Association
+of Social Workers
+Excellent Corporate Citizens in China
+320
+ICBC
+2018 Ranking and Awards
+China e-Finance Union
+Best Marketing Service Innovation Award of China e-Finance
+"My Million Dreams" Theme Marketing Activities
+Excellent Settlement Participant
+Union
+National Commercial Enterprise Management Modernization
+Innovation Achievement Award
+Financial Internet Branch of China Computer Users
+Association, China e-Finance Union
+Banking e-Finance Innovation Award - Excellent Award in
+e-Finance Retail Business
+Best Consumer Finance Risk Control Award of e-Finance Union
+Internet Marketing Committee of China
+Golden Web Awards
+Internet Society of China Internet Finance Committee, FinTech
+League, China Academy of Information and Communications
+Technology
+Excellent Examples of FinTech Innovation Application in China
+FinTech Innovation List — “Search by Heart"
+Customer Contact Center Standard
+Best Customer Contact Center in China
+Association of China Commercial Enterprise Management
+Excellent Clearing Participant
+Shanghai Clearing House
+Excellent Banking Underwriter Award
+Best (Mega) Private Bank in China
+Best (Mega) Transaction Bank in China
+Best (Mega) Cash Management Bank in China
+The Best Digital Brand Initiative, Application or
+Programme- - ICBC Xiaobai
+Best Cloud Based Initiative Application or Programme
+The Best Customer Centric Initiative,
+Application or Programme in China - Suijunxing
+The Best Productivity, Efficiency and Automation Initiative,
+Application or Programme in China - GYJ Financial
+Service Platform
+The Best Payments Initiative, Application or Programme
+in China ICBC e-Payment
+Finance Asia
+Best Bank in China
+Best Green Bond in China
+The Asset
+Corporate Award Platinum Award
+Best Private Bank in China
+Best Wealth Management Organization in China
+Best Bond Advisor Domestic China
+Best National Custodian, China
+Best Insurance Custodian, China
+Best Global Coordinator of Bank Capital
+Asiamoney
+Best Green Commercial Bank in China
+Regional Bank of the Year for BRI (Central and Eastern Europe
+& Central and West Asia)
+Regional Bank of the Year for BRI (South East Asia)
+Best Bank for Infrastructure/Project Finance in the Region
+The Custodian Bank of the Year in Asia-Pacific
+Bank Leadership Achievement of the Year in Asia-Pacific
+Best Bank in Asia-Pacific
+The Asian Banker
+Forbes
+The 1st place among the Global 2000
+Ranking in terms of combination of sales, profit,
+assets and market value
+The Banker
+The 1st place among the Top 1000 World Banks
+Ranking in terms of tier 1 capital of a bank
+Fortune
+The 26th place among the Global 500
+(The 1st place on the sub-list of commercial banks)
+Ranking in terms of operating income
+Brand Finance
+The 1st place among the Top 500 Banking Brands
+Ranking in terms of brand value of a bank
+(Middle East and Africa)
+Millward Brown
+China Enterprise Confederation
+The 4th place among the Top 500 Enterprises of China
+Ranking in terms of operating income
+2018 Awards
+OVERSEAS AWARDS
+Euromoney
+Best Bank in China
+The Banker
+Best Private Bank in China
+Global Finance
+Best Corporate Bank in China
+The 22nd place among the Top 100 Most Valuable Global Brands
+(The 2nd place among the brands of financial institutions)
+Ranking in terms of brand value
+China Business Journal
+Best Transaction Bank for Domestic Cash Management
+Best Transaction Bank for Bond Financing
+Best Bank in Asia-Pacific
+Advanced Unit of Legal Risk Management
+Outstanding Contribution Entity of Trade and Finance
+Professional Committee
+Outstanding Contribution Award for Civilized and Standardized
+Service of China Banking Industry
+Comprehensive Model Entity of China Banking Industry
+Customer Service Center
+Outstanding Award for Research Achievements of
+China Banking Industry Development
+Insurance Association of China
+Best Partner of Bank Insurance in China
+National Association of Financial Market Institutional Investors
+Excellent Comprehensive Market Making Institutions in the
+Interbank Bond Market
+Excellent Market Maker of Interest Rate Bonds in the
+Interbank Bond Market
+Excellent Market Maker of Credit Debts in the
+Interbank Bond Market
+Excellent Credit Default Swap Tentative Quotation
+Institution of the Year
+China Central Depository & Clearing Co., Ltd.
+Excellent Financial Bond Issuer
+Excellent ABS Sponsor
+Excellent Proprietary Trading Institution Award
+Excellent Underwriters Award for China Bond Green
+Index Component Securities
+Excellent Institution Award for Over-the-counter Debt Business
+Excellent Settlement Agent Award
+Excellent Custodian Agent Award of the Year
+in Popularizing Financial Knowledge
+Best Social Responsibility Financial Institution Award of the Year
+The Best Effectiveness Award of China's Banking Industry
+China Banking Association
+2018 Ranking and Awards
+Middle East&Africa Resource Deal of the Year
+Middle East&Africa Oil & Gas Deal of the Year
+Global Multilateral Deal of the Year
+International Card Manufacturers Association
+Élan Awards
+Hong Kong Call Centre Association
+Address: No. 901 Huanghe East
+VISA International
+Excellent Risk Monitoring and Control Award of the Year
+Best Business Growth Award
+MasterCard Worldwide
+Best Risk Monitoring and Control Award
+Most Innovative Partner
+Project Finance International
+Most Influential Acquiring Bank
+Best Innovative Acquiring Bank
+JCB Brand
+Outstanding Contribution Award for Foreign Card Acquiring
+DOMESTIC AWARDS
+PBC
+Banking Technological Development Award of PBC
+CBIRC
+Award for Information Technology Risk Management in
+Banking Industry
+Annual Report 2018
+319
+American Express
+State-owned Commercial Bank with Excellent Competitiveness
+Bronze Award for Best Offshore Customer Center
+Top 100 China's Own Brands during the Last 40 Years
+Postcode: 350005
+Tel: 0591-88087819/88087000
+Fax: 0591-83353905/83347074
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Postcode: 730030
+Tel: 0931-8434172
+Fax: 0931-8435166
+GUANGDONG PROVINCIAL
+BRANCH
+Address: No. 123 Yanjiangxi Road,
+Guangzhou City,
+Guangdong Province, China
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Fuzhou City, Fujian
+Province, China
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+Tel: 0771-5316617
+Fax: 0771-5316617/2806043
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+Postcode: 550001
+Tel: 0851-88620004/88620018
+Fax: 0851-85963911
+HAINAN PROVINCIAL BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Tel: 0898-65303138/65342829
+Fax: 0898-65303138
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Postcode: 050051
+Postcode: 530022
+Tel: 0311-66001999/66000001
+Fax: 0311-66001889/66000002
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Postcode: 116001
+Top 15 Best Employer in Financial Industry for
+Chinese College Students
+Zhaopin.com
+China Best Employer of the Year
+322
+ICBC
+List of Domestic and Overseas Branches and Offices
+Domestic Institutions
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui Province,
+China
+Postcode: 230001
+Tel: 0411-82378888/82378000
+Fax: 0411-82808377
+Tel: 0551-62869178/62868101
+Fax: 0551-62868077
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+Postcode: 100031
+Tel: 010-66410579
+Fax: 010-66410579
+CHONGQING MUNICIPAL
+BRANCH
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+Postcode: 400060
+Tel: 023-62918002
+Fax: 023-62918059
+DALIAN BRANCH
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+BEIJING MUNICIPAL BRANCH
+Top 50 Best Employer for Chinese College Students
+Top 10 Intelligent Employer of Best Employer for
+Chinese College Students
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Tel: 024-23491600
+Fax: 024-23491609
+INNER MONGOLIA
+AUTONOMOUS REGION
+BRANCH
+Address: No. 10 East 2nd Ring Road,
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region, China
+Postcode: 010060
+Postcode: 110001
+Tel: 0471-6940323/6940297
+Fax: 0471-6940048
+323
+List of Domestic and Overseas Branches and Offices
+NINGBO BRANCH
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+Postcode: 315010
+Tel: 0574-87361162
+Fax: 0574-87361190
+China Economic Weekly
+NINGXIA AUTONOMOUS
+Annual Report 2018
+Postcode: 450011
+Address: No. 88 Nanjing North Road,
+Heping District, Shenyang
+City, Liaoning Province,
+China
+Fax: 0791-86695230
+HEILONGJIANG PROVINCIAL
+BRANCH
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+China
+Postcode: 150010
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province, China
+Postcode: 430071
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Postcode: 410011
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+JILIN PROVINCIAL BRANCH
+Address: No. 9559 Renmin Avenue,
+Changchun City, Jilin
+Province, China
+LIAONING PROVINCIAL BRANCH
+Postcode: 130022
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+South Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 210006
+Fax: 025-52858111
+JIANGXI PROVINCIAL BRANCH
+Address: No. 233, Fuhe North
+Road, Nanchang City,
+Jiangxi Province, China
+Postcode: 330008
+Tel: 0791-86695682/86695018
+Tel: 0431-89569718/89569712
+Fax: 0431-88923808
+58 China HR
+Tel: 025-52858000
+ATA
+Best Poverty Alleviation Bank of the Year
+Financial Money
+"Golden Pixiu Award” —Excellent Contribution Award for Gold
+Retail Banks of the Year
+"Golden Pixiu Award" -Gold Innovative Financial Products
+Award of the Year
+"Golden Pixiu Award" - Gold Brand E-Banking of the Year
+"Golden Pixiu Award" - Excellent Contribution Award for Gold
+Custodian Banks of the Year
+Financial Computerizing
+Outstanding Contribution Award for Scientific and
+Technological Innovation in Financial Industry
+Directors & Boards
+Golden Round Table - Enterprise Excellent in Corporate
+Governance
+Gold Round Table - Most Innovative Board Secretary
+China Times
+"Golden Cicada Award" - Mobile Banking of the Year
+Social Responsibility Bank of the Year
+Annual Report 2018
+321
+2018 Ranking and Awards
+Wealth Plus
+Best Private Bank in China
+Trade Finance
+Best Deal Bank
+Financial News
+CCTV Finance
+China Excellent Finance Award "Excellent Social Contribution
+Bank of the Year"
+Best Digital Brand Building Products in Asia-Pacific
+Best Physical Channel Operation Award
+China Fund
+"Ying Hua Award" for China Fund Industry- Best Fund
+Sales Bank
+HR Selection Awards In Greater China
+China Report
+Outstanding Contribution Award for Overseas Image of
+Chinese Enterprises
+Top 20 Overseas Image of Chinese Enterprises
+Good News Spread Overseas Award in State-owned Enterprises
+The Chinese Banker
+Top 10 Financial Product Innovation Award (Corporate
+Business)
+Top 10 Financial Product Innovation Award (Personal Business)
+Top 10 FinTech Innovation Award
+Top 10 Banking Intelligent Network Innovation Award
+Investor Journal Weekly
+Trustworthy Corporate Banks
+Southern Weekly
+Best Chinese State-owned Listed Companies on Corporate
+Social Responsibilities
+Best Responsibility Report of the Year
+Nanfang Metropolis Daily
+"Golden Brick Award"
+The Most Characteristic Credit Card
+"Golden Censer Prize" - Excellent Private Bank of the Year
+Retail Banking
+The Economic Observer
+Top Ten listed Company of the Year
+National Business Daily
+Best State-owned Commercial Bank
+www.gsdata.cn
+New Media Communication Award for Listed Companies
+Meihua.info
+Mawards
+Global Compact Network China
+Enterprise Best Practices of the Year of Sustainable
+Development Goals
+Juwai.com
+Best Use Award of Big Data in Electronic Commerce
+Organizing Committee of ROI
+Return on Investment
+JRJ.com
+Outstanding Chinese-funded Bank Brand
+Outstanding Small and Micro Enterprise Financial
+Services Award
+Outstanding Smart Bank Award
+Outstanding Mobile Banking Award
+Outstanding Popular Credit Card Brand Award
+Outstanding Custodian Bank
+www.51Callcenter.com
+Golden Voice Prize "China Best Contact Center Award —
+Customer Service"
+Analysys Think Tank
+Sina Finance.com
+Most Popular Digital APP of the Year
+Best Digital Application of the Year of Analysys
+Star Mobile Bank
+Super IP Ecological Conference Super Finance IP Top 10
+Lemon Awards - Bronze Award for Super IP Business
+Applications Award
+www.cebnet.com.cn
+Outstanding Cash Management Bank Award
+100 LP Cases for the 10th Anniversary of 2008-2018
+Best Brand Image Bank
+Best M&A Service Award
+The Paper
+Inclusive Finance Award of the Year
+Best Domestic Bond Market Bank in China
+Caixin Media
+Caixin
+SGCX ESG50 Index Enterprise
+Eastmoney.com
+Best Custodian Bank
+Caixin Insight
+Best Mobile Banking
+www.caishiv.com
+Jiefu Award of ABS - Best Service Organization
+Jiefu Award of ABS Best Market-influential Housing
+China Limited Partners Association
+Mortgage Loan Asset Securitization Product
+Best Private Bank
+Jiefu Award of ABS - Best Scale Non-performing Loan Asset
+Securitization Product
+田
+ICBC
+中國北京市西城區復興門內大街55號 郵編:100140
+No.55 Fuxingmennei Avenue, Xicheng District, Beijing, China Post Code: 100140
+wwww.icbc.com.cn, wwww.icbc-ltd.com
+The Bank held an asset custody summit, and strengthened external publicity and customer marketing, further
+enhancing the reputation of "ICBC Custody" brand.
+The Bank was awarded the "Custodian Bank of the Year in Asia Pacific" by The Asian Banker, and the "Best National
+Custodian, China" and the "Best Insurance Custodian, China" by The Asset.
+At the end of 2018, the total net value of assets under the Bank's custody reported at RMB16.30 trillion.
+32
+Pension Services
+Discussion and Analysis
++
++
+The Bank steadily promoted the application for depository and custodian qualification of Chinese Depository Receipt
+("CDR") under the "Shanghai-London Stock Connect" programme, and fully put value-added custody of "Fund
+Connect" into service; it took custody of three strategic allocation funds of China Southern Asset Management,
+ChinaAMC and China Universal.
+The Bank's leading position was further cemented. It successfully obtained the trustee and the custodian business
+contracts of occupational annuities of central and all the local governmental agencies and administrative institutions
+that have completed bid invitations, with the bid-winning rate ranking first among banks.
++
++
+ICBC
+Assets under custody grew steadily, further consolidating the Bank's status as the largest custodian bank in China. In
+response to the changes in external regulatory environment, the Bank, leveraging its expertise and experience in the
+operation of net-worth products, upgraded the custody size of insurance assets, wealth management products and
+mutual funds. Grasping the opportunity of the pension insurance system reform, the Bank grabbed more share in the
+enterprise annuity, occupational annuity and pension insurance fund custody market.
++
++
++
+Celestial Constellation Credit Card won the "Élan Award" from the International Card Manufacturers Association.
+In actively serving the people's well-being, the Bank offered an all-dimensional and one-stop pension management
+service for all enterprises and public institutions, continuing to be the biggest pension service provider in China. It
+tailor-made the "Ruyi Pension Management" collective enterprise annuity plan products for over 7,000 small and
+medium enterprises and introduced innovation management means to reduce the management fees.
+Discussion and Analysis
+At the end of 2018, the Bank issued 991 million bank cards, representing an increase of 82.59 million cards from
+the end of the previous year. Specifically, 840 million debit cards and 151 million credit cards were issued. Overdraft
+balance of credit cards rose by RMB91,692 million or 17.1% from the end of previous year to RMB626,468 million. In
+2018, banks cards registered a consumption volume of RMB7.0 trillion, including RMB4.1 trillion of consumptions with
+debit cards and RMB2.9 trillion of consumptions with credit cards.
+Asset Management Services
+The Bank actively responded to the challenges and opportunities brought by the release of the New Rules on Asset
+Management, and carried forward the implementation of the mega asset management strategy as a whole. The Bank pushed
+forward the transformation of asset management business and products in a steady manner and comprehensively enhanced
+investment management and research capabilities. The Bank established a mega asset management business system allowing
+allocation of capital in all markets and value creation across the whole value chain by relying on the strength of the Group's
+asset management, custody and pension businesses, and the functions of its comprehensive subsidiaries specialized in fund,
+insurance, leasing and investment banking, and to provide diversified, integrated and specialized services for the clients.
+Wealth Management Services
++
+The Bank steadily pushed forward the net worth-based transformation of wealth management products, offering
+innovative wealth management products such as "Xin De Li", "Xin Wen Li", "Tian Li Bao" and "Bogu Tongli".
+The Bank deepened system and mechanism innovation and reform, and continued to enhance the overall
+management level of mega asset management in statistics, products, investment research, sales and risk control.
+The development of the overseas asset management platforms was steadily boosted. ICBC Asset Management (Global)
+Company Limited has established a relatively complete product system with global layout and customized solutions.
+At the end of 2018, the balance of non-principal-guaranteed wealth management products stood at RMB2,575,857 million.
+Asset Custody Services
++
++
++
++
+The Bank fully implemented the e-ICBC 3.0 strategy for internet-based financial development. It added intelligent content
+into traditional financial services, built an open, cooperative and win-win financial services ecosphere, and shifted towards
+a "bank by your side" of extending universal services, an "open bank" driven by innovation and an "intelligent bank" with
+powerful applications. In 2018, the Bank, aiming to serve customers and create value in internet-based finance, sped up the
+implementation of the e-ICBC 3.0 strategy.
+The Bank constantly enhanced the service experience and operational efficiency. It set up the strategic allocation
+teams at the Group level for pension services to further improve its asset allocation capacity. Higher quality trustee
+services were provided for customers locally. The Bank lifted its business automation and self-service capacity, carried
+forward account management and custody direct linking projects and continuously optimized the functions of "ICBC e
+Pension" to provide convenient and safe online annuity services for customers.
++
+Financial Market Business
+In the area of bond agent trading and settlement business, the Bank established agency trading relationships
+with nearly 200 institutional customers from 39 countries and regions. And the Bank has also won the "Excellent
+Settlement Agent Award" granted by China Central Depository & Clearing Co., Ltd. and "Contribution Award for
+Opening up: Excellent Settlement Agent" granted by National Interbank Funding Center. Meanwhile, the Bank
+continued to promote innovation in the over-the-counter ("OTC") bond business, and cooperated with China
+Development Bank in the distribution of two tranches of OTC poverty-alleviation bonds, based on which the Bank
+received the "Excellent Institution Award for Over-the-counter Debt Business" from China Central Depository &
+Clearing Co., Ltd.
+Asset Securitization Business
+The asset securitization business effectively supported the Bank's revitalization of stock assets and optimization of
+credit structure. In 2018, the Bank issued 26 tranches of credit asset securitization programs totaling RMB216.8 billion
+in the mainland. Specifically, there were 16 tranches of residential mortgage securitization programs worth
+RMB204.2 billion in aggregate, six tranches of non-performing personal loans securitization programs worth
+RMB5.9 billion, three tranches of non-performing credit card asset securitization programs worth RMB1.2 billion, and
+one tranche of corporate loan asset securitization program worth RMB5.5 billion.
+Precious Metal Business
++
++
++ In the aspect of franchise foreign exchange settlement and sales and foreign exchange trading, the Bank continued
+to diversify the currencies and business types in active response to the government's Belt and Road Initiative and with
+a focus on serving the real economy. At the end of 2018, the Bank offered 33 currencies for Sale and Purchase of
+Foreign Currencies Against RMB, and close to 90 currencies for foreign exchange trading and Non-Deliverable Forward
+("NDF"). The volume of franchise foreign exchange settlement and sales hit USD449.9 billion in 2018. The trading in
+currencies of countries along the Belt and Road and the emerging markets grew by 63.2% compared with last year.
+With respect to paper commodities trading, the Bank launched targeted marketing strategy to widen the customer
+base; it strengthened business innovation and function optimization and launched the mock-account trading function
+at all channels including internet banking, mobile banking and ICBC financial trading application to increase the
+activeness of paper commodities trading business and its reputation in the market. In 2018, paper commodities
+trading business registered a transaction value of RMB587.1 billion, increasing by 42.8% compared with last year.
+In regard to corporate commodities trading, the Bank kept diversifying the trading business products and further
+consolidated the competitive edges in corporate commodities trading; it constantly improved the functions of the
+corporate commodities trading system and endeavored to satisfy the demands of corporate customers from different
+dimensions, e.g. expertise, timeliness and convenience, thus further enhancing the customer service capabilities.
+Seizing the opportunity of launching strategic cooperation with the Palace Museum, the Bank offered a proprietary
+product- - "ICBC New Year Celebration Gold Lucky Year"; and in light of some hot current affairs, the Bank
+developed regionally-featured products, e.g. "Souvenir Badge for Xiongan New Area" and "Success Precious Metals".
+"Stamp & Coin Pavilion" went alive at ICBC Mall, making the Bank the first commercial bank to have an online
+primary market for trading in stamps and coins.
+The Bank cleared RMB345.5 billion on behalf of the Shanghai Gold Exchange, ranking No. 1.
+34
+ICBC
+31
+Discussion and Analysis
+Internet-based Finance
+The Bank became the first and exclusive market maker of Standard Gold Panda Coin Contracts at the Shanghai Gold
+Exchange and was among the first group of market makers of silver enquiry business at the Exchange.
+At the end of 2018, the pension funds under the Bank's trusteeship amounted to RMB115.5 billion; the Bank
+managed 17.87 million individual pension accounts, and the pension funds under the Bank's custody totaled
+RMB546.2 billion. The Bank continued to lead other banks in terms of the scale of enterprise annuity funds under the
+Bank's trusteeship, number of individual enterprise annuity accounts and enterprise annuity funds under the Bank's
+custody.
+Franchise Treasury Business
+In line with its fund operation and liquidity management needs, the Bank reasonably arranged the scale and structure
+of liabilities including interbank borrowing, structured deposits and large-denomination CDs in order to enhance the
+supporting capacity of diverse liabilities to asset business growth.
+Money Market Activities
++
+The Bank took the following actions in the RMB money market: strengthening fund operation and acting as an
+active lender to the market through reasonable arrangement of business type, maturity and customer structure, and
+enhancing the efficiency of fund operation; facilitating the innovation-driven development of business, participating
+in the first batch of interbank lending night deals in RMB, and expanding the nighttime financing channels of cross-
+border payment and settlement accounts; and actively taking part in the online transaction pilot of non-settlement
+interbank deposit of the National Interbank Funding Center to retain the advantage of firstly debuting the business.
+In relation to the foreign exchange money market: the Bank conducted an in-depth analysis into the market trends,
+scaled up the volume of foreign-currency interbank deposit at an appropriate time, and increased the yield from
+fund operation; engaged actively in deposit business of domestic non-banking institutions to increase the customer
+number and business volume; broadened the operation channels of foreign-currency funds, invested creatively in USD-
+denominated certificates of deposit, expanded the interbank deposit business in non-USD currencies, and continuously
+enhanced the market-making capacity in the domestic interbank deposit market.
+Investment
++
+4
+For details on the Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements: 33.
+Certificates of Deposit; 35. Debt Securities Issued".
+With respect to RMB bond investment, the Bank responded to the significant decline of yields in the bond market with
+a suite of actions to raise the return on investment; the Bank actively supported the development of the real economy
+and enterprises' financing needs, and enlarged the proportion of new investments in unsecured bonds of non-financial
+enterprises; the Bank also invested in the Credit Risk Mitigation Warrants which were supportive of private enterprise
+financing and the market's first special-purpose bond for easing financing difficulties of private enterprises.
+Annual Report 2018
+33
+Discussion and Analysis
+Financing
++
++
+In terms of foreign-currency bond investment, the Bank, in the face of the unfavorable situation that the US Federal
+Reserve's interest rate increase caused the foreign-currency capital cost to rise and the bond portfolio's net interest
+margin to narrow, managed the foreign-currency bond portfolio with greater efforts, strictly controlled the portfolio
+duration during the interest rate hike cycle, strengthened the investment in bond products with good credit quality
+and liquidity, and actively increased allocations at the phased high point of the yield to improve the overall rate of
+return of the investment portfolio.
+Annual Report 2018
++
+The branding of the installment business has been further developed. The Bank unified the brands of credit card
+installment business under a new brand named "Happy Installment", and offered an innovative product
+Installment while at the same time expanding traditional installment business in an orderly manner.
+While attaching importance to product innovation, the Bank actively expanded merger and acquisition advisory
+business, debt financing advisory business and equity financing advisory business. It offered the product mix of "M&A
+loan and M&A bond", marketed the asset-backed security ("ABS") business among corporate customers at a faster
+pace, and enhanced the capability of fund-raising for equity investment business and project operation. The liquidity
+debt financing business was given the 2018 "Top 10 Financial Product Innovation Award (Corporate Business)" by The
+Chinese Banker magazine.
+The Bank placed greater focus on leading the market with new value-oriented investment research model and worked
+harder to build the "ICBC Investment Banking Research" brand. The investment banking research team got the first
+place in the "Vision Cup" global market forecasts of the Securities Market Weekly in 2018.
+Annual Report 2018
+29
+Discussion and Analysis
+The Bank was ranked for the fifth year in a row as the No. 1 M&A financial advisor in China and Asia Pacific by
+number of deals advised according to the "List of Completed Deals with China's Participation" promulgated by
+REFINITIV; and the Bank remained as the global top financial advisor in terms of the number of deals completed for
+Chinese outbound acquisition transactions according to the ranking of "Advisors for Chinese Outbound Acquisition
+Transactions" promulgated by REFINITIV.
+4
+In 2018, the Bank acted as the lead underwriter for 1,600 Chinese and foreign bond projects with a total value of
+RMB1,324,818 million, preserving its No. 1 position in the market in terms of domestic leading underwriting scale.
+In 2018, capturing the development opportunities of residents' consumption structure upgrade and demand increase, as
+well as further popularization of FinTech, the Bank actively promoted the intelligent transformation of retail banking, and
+created novel models, services and channels which were more intelligent through the deep integration of retail banking and
+FinTech, achieving the all-round enhancement of core business competitiveness.
++
++
+The Bank introduced innovative models of online channel services and extended the service boundary, released ICBC
+e Wallet, co-worked with the third-party platforms in sectors such as the people's well-being, internet firms and new
+countryside construction, embedded financial services including e-account, fund management, payment & settlement,
+investment & wealth management and petty financing into the scenarios of partners, and rendered basic financial
+services for the users of partners' platforms. It improved the offline intelligent service level, innovated customer
+expansion services, and expanded the use of portable intelligent terminal.
+The Bank enhanced intelligent service capabilities and tailor-made financial services for different customers. It launched
+intelligent asset allocation business and shifted the wealth management business from single product sales to the
+combined, intelligent and expert-level prestigious wealth management service model; constructed an intelligent
+marketing service platform for personal customers and realized the online, automatic and intelligent precise marketing
+services.
+The Bank strengthened the safety of customer accounts and funds. The Bank upgraded the "ICBC Intelligent
+Defender" account security service which integrated account security detection, account security lock, transaction limit
+customization and other personalized functions, and built a complete "cloud plus application" intelligent prevention
+and control system on the basis of "Monitoring Cloud" to provide all-round and intelligent security protection for
+customers' account transactions and capital security.
+Personal Banking
+The Bank continued to strengthen the innovation of deposit products and developed a mix of personal deposit
+products including basic, inclusive, structured, exclusive and prestigious series. It offered a suite of innovative products
+"Merchant Benefit", "Happy Deposit" and "Freewill Deposit" for different customer groups to improve the customer
+experience, and launched deposit products exclusively for customers in county areas to resuscitate higher-quality
+financial services.
++
+In 2018, domestic branches disbursed an aggregate of USD53,045 million in international trade finance. International
+settlements amounted to USD2,908,418 million, of which USD1,161,942 million was handled by overseas institutions.
+Settlement and Cash Management
+Discussion and Analysis
+Advancement of Core Platforms
+4
++
+The Bank propelled the innovation and transformation of basic settlement services. It promoted the services of Industrial
+and Commercial Enterprise Link, ICBC e Payment and Large-amount Fund Flow Monitoring Platform, and saw a stable rise
+of the accounts. It sharpened the competitiveness of prestigious wealth management centers and wealth management
+centers in corporate banking which stimulated the corporate customer service capabilities of all the outlets. The customer
+service maintenance mechanism combining "outlet and remote service" and "intelligence and manual service" took initial
+shape.
+Investment Banking
+The Bank built up the advantages of the Corporate Payment Service Platform. It researched and developed the Global
+Cash Management Platform integrating financial services, IT and treasury management of enterprises. It actively promoted
+the application of the Small and Micro Enterprise Financial Service Platform and changed it to a comprehensive financial
+service platform allowing one-click access to shore up the practice in inclusive finance. By connecting the financial services
+of the "ICBC Pooling" Platform with the financial demands of customers, the Bank realized an effective customer on-
+boarding model via "transaction plus finance".
+International Settlement and Trade Finance
++
+4
+The customer base of international banking was further expanded. The Bank worked out the integrated and joint
+development mechanism of the Guangdong-Hong Kong-Macau Greater Bay Area to exert the region's synergy effect.
+It launched the special marketing campaign over the enterprises in the customs system for the purpose of stimulating
+customer expansion and quality improvement in a multi-pronged approach.
+The transformation and innovation in relation to putting business online was accelerated. The Bank launched the
+Phase | Project of Connection with the Customs System, and was among the first partner banks of single-window
+financial services, providing more convenient services for cross-border trade. After the roll-out of the Cross-border
+Remittance System under the New-generation Corporate Internet Banking, the Bank could better meet individualized
+demands on the basis of electronically processing all business documents. The Bank launched the non-local
+presentation of documents in the Bank-Enterprise Interlink System and the SWIFT direct connection, among other
+functions, for key customers, which enhanced the service response efficiency.
+The Bank actively provided financial services for the First China International Import Expo ("CIIE") and offered a service
+platform for matchmaking the transactions of exhibitors. Leveraging the Belt and Road Inter-bank Regular Cooperation
+Mechanism, the Bank hosted the Belt & Road Trade Finance Cooperation and Innovation Forum during the CIIE, as an
+opportunity for customer marketing and business expansion.
+At the end of 2018, the Bank maintained 8,319 thousand corporate settlement accounts, representing an increase of
+11.1% over the end of the previous year, and the volume of settlements reached RMB2,600 trillion, up 1.4%. There were
+1,375 thousand cash management customers, and 7,282 global cash management customers, representing an increase
+of 14.0%.
+e
+The Bank provided convenient and efficient personal financing services. It introduced a mortgage direct connection
+system and integrated residential mortgage application acceptance channels into business scenarios. It was the first
+in the banking industry to get connected with the systems of government agencies, allowing the exchange of data on
+house deals, mortgage registrations and loan applications, which improved the business efficiency and brought more
+convenience to customers.
+At the end of 2018, personal financial assets totaled RMB13.51 trillion. The personal deposits arrived at
+RMB9,436,418 million, representing an increase of RMB867,501 million or 10.1%. The personal loans stood at
+RMB5,636,574 million, representing an increase of RMB691,116 million or 14.0%. The Bank's personal customers
+increased by 39.67 million to 607 million, including 13.29 million personal loan customers, up 1.03 million.
+2018
+Private Banking
++
++
++
+The Bank leveraged on its overall advantages in retail, asset management, investment banking and technology, etc. to
+provide customers with a whole package of all-round, full-view, full-process, comprehensive and specialized services of
+private banking.
+2017
+In installing an intelligent platform, the Bank perfected the intelligent investment system of private banking, provided
+customers with intelligent asset allocation service and realized the intelligent transformation of customer services.
+The Bank organized an exhibition of financial culture themed "A Man of Honor Marches Forward with His Partners".
+It acted in cooperation with its business partners and also sponsored a charity project with them to make the private
+banking brand more influential.
+At the end of 2018, the Bank maintained 80,700 private banking customers, representing an increase of 5,200
+or 6.9% from the end of the previous year. The Bank had assets of RMB1.39 trillion under management, up
+RMB58.7 billion or 4.4%.
+Bank Card Business
++
++
+Debit card products saw further innovation. Customization of debit card face could meet the personalized demands of
+customers. The Bank introduced Kylin Debit Cards which combined traditional Chinese culture with financial payment
+instrument with special technology, with "Kylin Treasury Card" targeting at medium and high-end customers and
+"Kylin Birth Card" targeting at the teenagers and the youth. The Bank provided direct mailing service of debit cards
+after online application by customers, the first of its kind in the banking industry.
+The credit card product portfolio became increasingly diverse. There was a stream of new credit card products
+including ICBC Zodiac Card, "Like China" ICBC Endeavor Credit Card, WeChat Co-brand Card, Overseas Student
+Card, Global PLUS Card. The Bank allowed the opening of supplementary cards across the types of credit card
+products. It updated "I GO" promotional campaigns in order to increase the influence of credit card brands.
+The Bank was awarded the "Best Private Bank in China" by The Banker and "Best (Mega) Private Bank in China" by
+The Asian Banker.
+The Bank encouraged the transformation of agency sales. It updated the Al investment platform and introduced the
+Al Index, realizing the intelligent and professional services such as "One-click Investment" and "One-click Holdings
+Adjustment" of fund products. It debuted an online one-stop auto owner service platform "Intelligent Travel
+around the World", enabling auto owners to buy auto insurance across the bank channel online. In 2018, funds
+under agency sales amounted to RMB768.1 billion, sales of treasury bonds under agency arrangement were valued at
+RMB68.4 billion, and personal insurance products under agency sales reported at RMB100.9 billion.
+2016
+85,689
+30
+ICBC
+Personal Loans
+Unit: RMB100 millions
+41,962
+49,455
+83,029
+56,366
+2017
+2018
+Discussion and Analysis
+Personal Deposits
+Unit: RMB100 millions
+94,364
+2016
+ICBC Mobile
+84,346
++
+Asia-Pacific Region
+98,766
+1,025
+783
+91
+89
+106
+(except Hong Kong and
+Europe
+76,127
+69,933
+134
+273
+81
+Macau)
+81
+104
+2,017
+(in USD millions)
+Profit before taxation
+(in USD millions)
+Number of institutions
+At the end At the end
+Item
++ With a focus on the core functions of finance, the Bank tried to build ICBC Mobile to the main front of online
+financial services. It released Version 4.0 of mobile banking and updated eight functions including account inquiry,
+cloud storage and unsecured lending; it innovatively launched the industry-leading services such as "Inquiry as You
+Wish" and "One-Click Transfer" under Mobile Banking and provided convenient functions such as separation of self-
+registration and card-linking and login-free inquiry of account balance.
+1,850
+of 2017
+2017
+At the end
+of 2018
+At the end
+of 2017
+Hong Kong and Macau
+182,777
+178,045
+2018
+Assets
+America
+66,745
+3,492
+426
+426
+419
+Bank(1)
+Total
+384,304
+386
+358,597
+3,918
+426
+419
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the Bank's
+gain on investment recognized by the Bank during the reporting period.
+38
+ICBC
+4,115
+56,948
+4,285
+Investment in Standard
+553
+586
+149
+142
+Africa Representative Office
+1
+3,786
+1
+(34,100)
+(44,757)
+Subtotal
+380,518
+354,312
+3,729
+Eliminations
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+of 2018
+In 2018, the Bank's cross-border RMB business volume reached RMB4.60 trillion. The Bank extended credit to 83
+"Going Global" and Belt and Road projects additionally, totaling USD19.1 billion of loans extended.
+Discussion and Analysis
++
+In compliance with the requirements of new regulations on the third-party payment business, the Bank actively
+promoted the connection NetsUnion platform, the governance of payment channels and the control of P2P channel
+and perfected the centralized deposit of reserves for the purpose of further standardizing the third-party payment
+business development.
+Consumer Finance
+The Bank enriched the product features, cooperation models and scenario applications of ICBC e-Loan in a bid to
+enhance the customers' experience with internet-based financing. It continued to expand the application scenarios
+of "Credit Granting in Seconds" and "Payment in Seconds", and achieved online real-time credit granting and real-
+time lending by importing external credible data such as credit reference information, provident fund and personal tax
+information and adopting risk control methods such as face recognition.
+Digital Inclusive Finance
+35
++
+At the end of 2018, the Bank established 426 institutions in 47 countries and regions and indirectly covered
+20 African countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking
+relationships with 1,502 overseas banking institutions in 145 countries and regions, making its service network
+covering six continents and important international finance centers around the world. Among which, the Bank
+maintained 131 institutions in 21 countries and regions along the Belt and Road.
+Building of a Financial Ecosphere
++
+4
+4
+The Bank strengthened the innovation of basic platforms and infrastructure, and continued to enhance the strategic
+supporting capabilities needed for the development of internet-based finance. It focused on the users as the core, set
+up scenario guidance and built an ecosphere of financial services by relying on the "scenario-embedded and finance-
+exporting" API open platform, ICBC Finance Cloud platform featured with "green deployment and agile launching"
+and the "Ju Fu Tong" platform with a cluster of premium online financial products and functions.
+-
+While centering the development of scenarios in key sectors, the Bank made the scenarios cover public service,
+travel, education, medical care, business and life service. In the field of public services, the Bank launched social
+security, provident fund and taxation scenarios and improved the full-featured ecological chain covering identity
+authentication and personal information inquiry, message push and bill payment; in the field of transportation
+and travel, the Bank independently developed the "ICBC Car License Payment" product, and won the bids for the
+expressway toll contactless payment projects in Jilin, Sichuan, etc.; in the field of education, "ICBC Campus Connect"
+met the requirements of school staff on flexibly managing students' registration information and various types of
+education costs; in the field of medical care, the Bank actively promoted the development of the medical supply chain
+collaboration platform "Commercial & Medical Connect".
+Annual Report 2018
+The Bank further improved the aggregation payment function of e-Payment, applied the function in public
+transportation, education and medical care, and accelerated the construction of e-Payment scenarios such as
+"Intelligent Campus", "Intelligent Sightseeing Spot" and "Intelligent Traffic".
+At the end of 2018, the number of ICBC Mobile customers reached 313 million. ICBC Mobile further strengthened its
+industry-dominance in customer size, customer loyalty and activeness.
+ICBC Mall
++
++
+The Bank devoted itself to developing high-quality e-commerce and building a one-stop commercial & financial
+services platform with e-commerce as the core and finance as the foundation. Targeting the "famous merchants,
+commodities and stores", ICBC Mall highlighted characteristic development and covered more merchants and brands;
+and the Bank worked harder to promote ICBC e Procurement, ICBC e Travel, ICBC e Assets, ICBC e Cross-border and
+ICBC e Charity brand building.
+In 2018, ICBC Mall achieved an accumulative transaction amount of RMB1.11 trillion.
+The Bank newly launched "e-Business Dream Plan" to build a highly recognizable brand of comprehensive financial
+services for the merchants, and with e-Payment acquiring as the entry point, provided merchants with a full package
+of financial solutions, e.g. fund collection and payment, deposit and wealth management, credit and financing, private
+banking and precious metals. The function was applied in scenarios such as specialized markets and demonstration
+streets for the benefit of the people during the reporting period.
+ICBC Link
+At the end of 2018, ICBC Link had 150 million registered users.
+Development of Key Business Lines
+Payment
++
++
+The Bank continued to improve and update ICBC e Payment for better experience of fee collectors and payers. The
+Bank successively rolled out "ICBC Campus Connect", "Smart Property" and "Party Membership Fee Cloud" modules,
+which provided functions such as payee information management, bill import, accounting and report statistics to
+enterprises, public institutions and merchants with diversified fee charging and collection demands.
+The Bank positioned ICBC Link as the main bearer of scenarios and the main portal of users to create an online and
+offline user interaction services platform. It launched a comprehensive upgrade and revision of ICBC Link with a focus
+on improving functions such as customized message push, user expansion and service scenarios sharing.
+The Bank launched an innovative B2B2C service model based on the ICBC e Wallet products, providing customers
+with easy-to-access, scenario-triggered financial services. Customers were allowed to apply for e-accounts of the Bank
+through the online channels of partners, while financial products and services were seamlessly integrated into the
+scenarios in the people's well-being, internet platforms, consumer finance, compensation management, membership
+management and quasi-margin. The "ICBC Xiaobai" digital bank developed and operated in association with JD
+Finance was awarded the "Best Digital Brand Innovation Award" by The Asian Banker.
+The Bank worked harder to build "Quick Lending for Operation", "Online Revolving Loan" and "Online Supply
+Chain", and the "Small and Micro Enterprise e Loan" product system took initial shape. The Bank increased the efforts
+in R&D of the "Quick Lending for Operation" product, allowing it to provide the big data-based financing services
+in all kinds of production and operation scenarios of small and micro customers; improved the Online Revolving
+Loan business system and introduced the innovation product "e Mortgage Quick Loan" which made it possible to
+perform online assessment of property and intelligent approval of loan; continued to perfect the online supply chain
+financing product system, used blockchain technology to create "ICBC e Credit", a cross-level credit flow tool for
+core enterprises, covered the financing demands of whole-industry-chain customers, and actively expanded the online
+supply chain business for key sectors like modern agriculture, IT & communications, aviation & military, construction &
+installation.
+36
++
++
+With the launch of the "Ten Actions to Enhance Services", the Bank devoted itself to building a "bank to the
+satisfaction of customers". It solidified the foundation of service management, tried to root out the problems
+affecting customer experience, continued to build star outlets for good services, promoted the high-quality service
+experience and optimized the customer experience indicators. The Bank perfected an all-round service monitoring
+system featuring online and offline coordination, internal and external supplementation and combination of routine
+monitoring and special research. To enable customers to experience warm and valuable services, the five branches
+in Shanghai, Chengdu, Guangzhou, Beijing and Wuhan kicked off a "Warm Service throughout Hundreds of Cities"
+campaign at the same time with the theme of "bringing warm services to ICBC customers everywhere". In 2018,
+nearly 200 city branches and sub-branches were involved in the campaign to pass down warm services.
+By establishing a new post system at outlets with "compatible posts, universal use of personnel, diversification of
+services and safe operation", the Bank launched the duty integration of tellers and customer service managers, removed
+the barriers between tellers and non-teller staff, business handling and customer maintenance, raised the service
+marketing level and human resource utilization efficiency, and improved the service experience of customers. In further
+improving the online and offline operational processes, the Bank enabled medium and small enterprise customers
+to receive one-stop services including online application, offline account opening and basic payment and settlement
+products, which significantly reduced customers' bank visits, tellers' information entries and business handling time.
+Annual Report 2018
+With ICBC e Life as the core, the Bank built a consumer finance ecosphere covering all the scenarios, e.g. clothing,
+eating, housing, travel, entertainment, learning and medical care, that gathered bank, customers and merchants.
+And it launched Smart Credit, Online Installment and other financing products. The Bank improved the benefits for
+customers such as VIP lounge, account security lock, account security insurance and bonus point redemption, and
+offered services in more scenarios such as provident fund inquiry and hospital appointment & registration.
+Service Enhancement
+Discussion and Analysis
++
+The Bank implemented the laws, regulations and regulatory requirements on the consumer protection, and further
+standardized the charging of service fees so as to ensure efficient and high-quality financial products and services
+with reasonable price. With a focus on the deficiencies in key and specialized fields that were easily complained by
+customers, the Bank facilitated the root-out of such deficiencies. It paid close attention to improving products and
+services from the perspective of consumers, thereby achieving the harmony of economic benefits and social value.
+Taking initiatives to adapt itself to the diversification of consumer demands for financial literacy, the Bank launched
+targeted financial literacy publicity and education for consumers, kept enriching and perfecting the means and
+contents of publicity and education, and raised the anti-risk awareness and sense of responsibility of consumers.
+Internationalized and Diversified Operation
+Internationalized Operation
++
+The Bank continued to improve its global network. Zurich Branch, Manila Branch, Ho Chi Minh City Representative
+Office and ICBC Almaty Astana Representative Office officially opened, and ICBC (Austria) was granted a license.
+The Bank proactively advanced the cross-border RMB business. It worked harder to develop cross-border RMB trade
+financing, cut down financing costs of enterprises and increase the use of RMB in cross-border trade. The cross-
+border RMB financing for the Belt and Road projects and RMB pricing & settlement of oil trade were wrapped up.
+The Bank accelerated the innovation-driven development of FTZ business, established a separate accounting system
+in the Hainan FTZ, and launched massive campaigns at the issuance of "panda bonds" and foreign institutions'
+investment in China's inter-bank bond market in accordance with the financial opening policy. The Bank actively
+supported the steady development of RMB internationalization to promote the use of RMB in surrounding countries
+and Africa.
+Consumer Protection
+At the end of 2018, the Bank had 16,004 outlets, 26,786 self-service banks and 89,646 ATMs whose trading volume
+amounted to RMB10,452.2 billion. In 2018, the internet financial transaction amount hit RMB679.82 trillion; the
+proportion of internet financial transactions rose by 2.8 percentage points from the end of last year to 97.7%.
+37
+The Bank shifted the Cloud Banking towards the positioning as the
+"all-channel service center, sharing connection center and cloud
+marketing center". Depending on the scientific and technological
+strengths and professional services, the Bank focused on system integration and upgrade and intelligent customer
+service improvement, and extended the use of intelligent customer service in more than 20 service channels such as
+ICBC Mobile, ICBC Link and WeChat.
+The Bank diversified the applications of entrances of new channels. It further diversified the entrances of new channels
+and related tools such as QR code, outlet WiFi and WeChat, and expanded the service functions and application
+scenarios of such new channels.
+ICBC
+Discussion and Analysis
+Channel Development and Service Enhancement
+Channel Development
+Outlet improvement continued. Aimed mainly at adjusting the outlet
+structure, controlling the outlet number and enhancing the outlet
+efficiency, the Bank made the outlet number and business mix more
+reasonable, covered more core areas and high-quality customer
+groups, and gradually built a new outlet system featuring the
+"leading role of top-end business formats, support of middle-level
+business formats and firmness of basic business formats". Outlet
+renovation made further headway which effectively improved the
+customer experience and outlets' service capacity. The Bank
+continued to deepen outlet transformation and competitiveness
+enhancement, promoted the intelligent service models at outlets,
+enhanced the functions of intelligent services, streamlined business
+processes and raised processing efficiency on the basis of sound risk
+control. At the end of 2018, the Bank completed the intelligent
+transformation of 15,410 outlets, put in place 75,756 intelligent
+devices and covered 255 personal and corporate business items
+with intelligent services.
+Proportion of Internet Financial Transaction
+The Bank always put improvement of customer service experience in the first place. Orienting towards provision of
+convenient services, intelligent services and inclusive financial services, the Bank pursued scientific and technological
+innovation, made unremitting efforts to push forward channel transformation and development, and continued to deepen
+the integration of online and offline channels through perfecting the offering of "intelligent plus manual, online plus offline,
+cloud and near-field" services.
+92.0
+2016
+97.7
+94.9
+2017
+2018
+Note: The proportion of internet financial transactions refers to the
+number of internet financial transactions divided by the total
+number of transactions of the bank.
+%
+Credit risk is the risk where loss is caused to the banking business when the borrower or counterparty fails to meet its
+contractual obligations. The Bank's credit risks mainly originate from loans, treasury operations (including due from banks,
+placements with banks, reverse repurchase agreements, corporate bonds and financial bonds investment), receivables and
+off-balance sheet credit business (including guarantees, commitments and financial derivatives trading).
+47
+Discussion and Analysis
+prudent liquidity management strategy, the Bank continued to consolidate the foundation of liquidity risk management system. It better
+employed operational risk management tools, strengthened data quality management, made continuous efforts to manage risks in key
+areas and links, and deepened risk management of the wealth management business in line with the New Rules on Asset Management.
+Credit Risk
+Credit Risk Management
+The Bank strictly adheres to regulatory requirements regarding credit risk management, diligently fulfills established
+strategies and objectives under the leadership of the Board of Directors and the Senior Management, and implements
+an independent, centralized and vertical credit risk management mode. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of credit risk management. The Senior Management is responsible for executing the
+strategies, overall policy and system regarding credit risk management approved by the Board of Directors. The Credit Risk
+Management Committee of the Senior Management is the reviewing and decision-making organ of the Bank in respect of
+credit risk management, is responsible for reviewing material and important affairs of credit risk management, and performs
+its duty in accordance with the Working Regulations for the Credit Risk Management Committee. The credit and investment
+management departments at different levels undertake the responsibility of coordinating credit risk management at
+respective levels, and the business departments implement credit risk management policies and standards for their respective
+business areas in accordance with their functions.
+Annual Report 2018
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months in default, anticipated loss rate, credit rating,
+collateral and other quantitative and qualitative factors.
+◆ Credit Risk Management of Corporate Loans
+The Bank continued to strengthen the constitution of the credit policy system. It improved the customer-centered credit
+risk management system to push ahead with unified credit risk management of the Group. Further advances have also
+been made in regulating credit businesses pledged by high-quality financial assets, and those guaranteed by high-quality
+financial institutions and sovereign entities. The Bank improved credit risk management framework for financial institutions
+to strengthen credit risk management of financial institutions; intensified off-balance sheet business management to further
+regulate discounted commercial acceptances and better manage loan commitments of corporate customers; upgraded policies
+concerning the guarantee system, and fully implemented regulatory requirements on financing guarantee institutions to
+strengthen management of such institutions.
+The Bank emphasized the leading role of credit policy. Focusing on the coordinated regional development strategy, the
+Bank gave priority to the Guangdong-Hong Kong-Macau Greater Bay Area, Xiongan New Area, and three supporting
+belts, provided investment and financing support for major projects, projects for people's wellbeing and projects under
+construction in such key areas as transportation, infrastructure and public service. In a stage of working faster to build China
+into a manufacturer of quality, the Bank supported advanced manufacturing in picking up pace and traditional industries in
+upgrading themselves to foster new drivers of growth. It also kept a firm hold on the projects in healthcare, education, elderly
+care, tourism, culture and other modern service industries to keep up with people's needs for a better life.
+48
+ICBC
+The Bank's credit risk management has the following characteristics: (1) Unified risk appetite. Unified credit risk appetite is
+implemented for the Bank's credit risk exposures; (2) Entire-process management. The credit risk management covers the
+entire process including customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and
+post-lending monitoring; (3) System management. It continues to enhance the building of credit information system, and
+improve the tools to manage and control credit risk; (4) Strict management over credits. Strict qualification management is
+enforced on the business institutions and the credit practitioners; and (5) The special institution is set up to conduct unified
+risk monitoring over credit risk businesses.
+In 2018, the Bank continued to push for development of the enterprise risk management system, upgraded risk management
+technologies and methods and enhanced the capacity of risk pre-judgment and dynamic adjustment capabilities, so as to make
+enterprise risk management more forward-looking and effective. It improved the enterprise risk management system, established
+a hierarchy risk appetite management system, intensified risk limit management, and enhanced effective risk data aggregation and
+risk reporting on all fronts according to the latest regulatory requirements. The Group's investment and financing risk monitoring
+platform was put in place to better manage cross risks, and the consolidated risk management of the Group was improved to boost
+the risk management capability of non-banking subsidiaries and strengthen regional risk management of overseas institutions. The
+Bank continued to upgrade its risk measurement system for better application, actively advanced FinTech application such as big
+data, improved internal rating and anti-fraud models, and enhanced risk measurement for higher accuracy and stability. It promoted
+the application of internal rating in the credit risk management. The Group's capabilities for market risk management and forward-
+looking analysis were improved to strengthen monitoring over transactions. Advances were also made in the system and mechanism for
+interest rate risk management of the banking book, with further improved strategies, policies and procedures. Following a steady and
+45
+Third line of defense.
+1
+Singapore Branch (Singapore)-
+ICBC (Indonesia) (Indonesia)
+11
+20
+E
+ICBC (Malaysia) (Malaysia) -
+Office (Mongolia)
+6
+1
+ICBC (Thai) (Thailand).
+24
+Hanoi Branch (Vietnam).
+1
+Ho Chi Minh City Representative
+Office (Vietnam)-
+Manila Branch (Philippines)
+Mongolia Representative
+1
+Busan Branch (South Korea)
+Number of
+ICBC (Mexico) (Mexico).
+1
+(country/region)
+institutions
+ICBC (Brasil) (Brazil)
+1
+Tokyo Branch (Japan)--
+3
+ICBC (Peru) (Peru)-
+1
+Seoul Branch (South Korea).
+3
+ICBC (Argentina) (Argentina)
+----- 120
+1
+Institution
+Vientiane Branch (Lao PDR)-
+Phnom Penh Branch (Cambodia)
+Dubai (DIFC) Branch (UAE)-
+Abu Dhabi Branch (UAE).
+1
+1
+institutions
+(Hong Kong, China).
+1
+Hong Kong Branch
+Doha Branch (Qatar)---
+ICBC (Asia) (Hong Kong, China)-70
+Riyadh Branch (Saudi Arabia)-
+1
+ICBC International
+Kuwait Branch (Kuwait)-
+1
+1
+Number of
+institutions
+(country/region)
+1
+Yangon Branch (Myanmar)-
+1
+Hong Kong and Macau
+Institution
+Number of
+ICBC (Almaty) (Kazakhstan).
+Karachi Branch (Pakistan)-
+Mumbai Branch (India)
+2
+3
+1
+African Representative Office
+Africa
+Institution
+(country/region)
+Investments in Standard Bank
+(South Africa)
+(South Africa).
+1
+8
+ICBC (Canada) (Canada)
+1
+E
+Discussion and Analysis
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+Europe
+Institution
+(country/region)
+⑤
+Number of
+Frankfurt Branch (Germany) -------5
+America
+®
+Institution
+Number of
+(country/region)
+institutions
+E
+E
+ICBC
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+Discussion and Analysis
+As at the end of 2018, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD384,304 million, an increase of USD25,707 million or 7.2% from the end of
+the previous year, and they accounted for 9.5% of the Group's total assets, increasing by 0.5 percentage points. Profit
+before tax during the reporting period came in at USD4,115 million, representing an increase of USD197 million or
+5.0% as compared to last year and accounting for 7.6% of the Group's profit before tax, which was 0.6 percentage
+points higher. Total loans amounted to USD207,591 million, and total deposits were USD130,964 million, increasing
+by USD7,867 million or 6.4%.
+Diversified Operation
+4
++
++
+ICBC Credit Suisse Asset Management strictly enforced regulatory requirements, continuously strengthened investment
+research and risk control capabilities, aligned itself with policy guidance and customer needs, deepened coordination
+with the Group, seized new opportunities in pension business, and steadily promoted the development of mutual
+funds and other entrusted investment management businesses. In return, its operation remained stable on the whole.
+ICBC Leasing supported the real economy, promoting the steady development of aviation and shipping leasing
+business, and deepened coordination with the Group, stepping up the efforts to shift the equipment leasing business
+to high-end manufacturing, green energy, infrastructure construction, and other sectors. It laid a solid foundation for
+risk management and control, and meanwhile accelerated the conversion and disposal of risk assets. ICBC Leasing
+successfully increased its registered capital with the retained profit of RMB7.0 billion, and thus became a financial
+leasing company with the largest registered capital in China. On 28 March 2018, ICBC Aviation Leasing Company
+Limited, a wholly-owned subsidiary of ICBC Leasing, was officially established in Hong Kong, which brought the Bank's
+specialized operation in aviation leasing to a new stage.
+ICBC-AXA deepened its business structure transformation, and vigorously promoted the development of health
+insurance business; seized the opportunity of personal income tax-deferred endowment policy, and was successfully
+enlisted under the list of companies piloting the tax-deferred endowment products; and was permitted to establish
+ICBC-AXA Asset Management Co., Ltd., the first insurer-affiliated asset management joint venture approved to
+establish in China.
+ICBC International registered a stable performance and good growth momentum in operating efficiency, asset quality
+and risk management, and its four major businesses, i.e. investment banking, sales and transaction, investment
+management and asset management developed at a high quality. The IPO business underwriting amount was the third
+largest in the Hong Kong main board market; with steady progress in bond underwriting business, ICBC International
+ranked the first in underwriting of EUR bonds among Chinese peers; and it was an active player in the new economic
+equity investment project sector.
+ICBC Investment actively and steadily promoted the market-oriented debt-for-equity swap business, and led the
+industry in terms of the scale of annual new investment projects. To address the diversified demands of enterprises for
+deleveraging, ICBC Investment innovated business development models, and launched a suite of projects setting good
+examples in the aspects of industry, region and project model.
+The establishment of ICBC Wealth Management Co., Ltd. was approved by the CBIRC. Please refer to the section
+headed "Significant Events - Establishment of Wealth Management Subsidiary" for details.
+Annual Report 2018
+39
+40
+institutions
+Luxembourg Branch
+(Luxembourg)
+1
+3
+ICBC Turkey (Turkey)-
+47
+Prague Branch
+(Czech Republic)-
+Zurich Branch (Switzerland)-
+1
+New York Branch (USA)-
+1
+E
+Asia-Pacific Region (except
+Hong Kong and Macau)
+ICBC (USA) (USA)-
+16
+ICBCFS (USA)
+Bank ICBC (JSC) (Russia)-
+(Hong Kong, China).
+ICBC Standard Bank (UK).
+London Branch (UK)
+ICBC (Europe) (Luxembourg)-
+1
+Paris Branch (France)·
+1
+Amsterdam Branch
+(the Netherlands)-
+Brussels Branch (Belgium) -
+2
+Milan Branch (Italy)------
+2
+Madrid Branch (Spain)-
+Warsaw Branch (Poland)-
+1
+ICBC (London) (UK)---
+1
+1
+9
+ICBC (Austria) (Austria)
+4
+Chief Risk Officer
+Business departments
+Corporate Banking
+: Department
+Personal Banking
+Department
+Institutional Banking.
+Senior Executive
+Vice Presidents
+Department
+Global Market
+Department
+Board of Directors
+President
+Board of Supervisors
+Risk Management Committee
+Bank Card
+Department
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+Enterprise risk management is a process to effectively identify, assess, measure, monitor, control or mitigate and report risks
+in order to ensure the realization of the Group's operating and strategic objectives by setting up effective and balanced risk
+governance structure, fostering robust and prudent risk culture, formulating unified risk management strategies and risk
+appetite, and implementing the risk limit and risk management policies. The principles of enterprise risk management of the
+Bank include full coverage, matching, independence, perspectiveness and effectiveness, etc.
+Enterprise Risk Management System
+The Bank spurred innovative R&D in key business areas. It realized smart retail service functions of ICBC e-Loan
+including "Credit Granting in Seconds", "Loan Extension in Seconds" and "Payment in Seconds", and premiered
+online and flexible corporate banking services including "Quick Lending for Operation", "Online Revolving Loan" and
+"Online Supply Chain". The development of systems for internationalization and diversification was advanced. The
+Bank completed the roll-out of the core system of FOVA platform version at Manila Branch and ICBC Austria, launched
+the global version of personal mobile banking and other featured products, and improved the core personal insurance
+business system of ICBC-AXA and the investment banking project management system of ICBC International.
+Production and operation of the whole group were put under stronger management. The Bank put the new-
+generation dual-active architecture of the host into operation and completed its switch and verification, realizing zero
+loss of system-level data and providing more safeguards for the business continuity of the host system. Information
+systems of the whole bank ran smoothly. The Bank consolidated the information security system. It continued
+to improve the information security operation platform (SOC), built an IT big data platform, and provided data
+foundation for security monitoring. It promoted the new-generation document security protection system and was the
+first in the banking industry to achieve a dynamic defense mechanism based on multi-isomers, which improved the
+protection level of information security technology. The Bank continued to carry out information security inspections,
+perfected the anti-attack drill system, and strengthened the day-to-day management and guidance of domestic and
+overseas institutions in terms of information security. Authoritative third parties were engaged to conduct special
+inspections and safety assessments on relevant systems.
+In 2018, the Bank was granted 43 patents, and the total number of patents owned by the Bank increased to 549,
+including 270 patents for inventions granted by the state and 279 patents for utility model and product design patents
+granted by the state. 2018 marked the fifth consecutive year for the Bank to rank the first in the banking industry in
+the information technology supervisory rating of CBIRC. The Bank had six scientific and technological achievements
+that won the Banking Technological Development Award of PBC and four research findings that won the IT Risk
+Management Research Project Award of CBIRC. The "ICBC Smart and Future Bank" project received the highest
+honor SAIL award from the 2018 Artificial Intelligence World Innovations Competition.
+Annual Report 2018
+Discussion and Analysis
+Human Resources Management
++
+4
+The Bank enhanced the efficiency and effectiveness of human resources allocation and perfected the talent
+introduction & cultivation mechanism. The 2018-2020 Human Resources Plan of Industrial and Commercial Bank of
+China was developed to strengthen headcount control and staffing optimization. It worked on the building of serial
+brands, e.g. the "ICBC Star Sailor" summer internship program and the "ICBC Star" campus recruitment plan, and
+strengthened the social recruitment of locals for county-based institutions; it intensified the vertical and horizontal
+exchanges and training of management talent; it furthered the optimization of post setup and labor combination at
+outlets, and gained higher efficiency in human resources use of outlets; it constructed a cultivation & growth system
+with the characteristics of ICBC for new entrants; it reinforced the integrated management of foreign employees
+across the Group, and organized the selection and commendation of "Honorary Global Employees". The Bank
+perfected the compensation incentive and guarantee system, and made the use of human resources more effective.
+The organizational structure was constantly optimized. The Bank launched institutional reform of the IT line, merging
+IT Department and Product Innovation Management Department into FinTech Department and merging Data
+Center (Beijing) and Product R&D Center into Business R&D Center. It pushed ahead the human resources reform of
+profitability units, and accelerated the construction of inclusive financial departments at tier-two branches.
+The efficiency and effectiveness of training were improved in an innovative way. The 2018-2020 Education and
+Training Program of Industrial and Commercial Bank of China was developed. With a focus on building a bank in
+which people enjoy learning and centering around the Group's business transformation and growth and employees'
+needs, the Bank made an overall arrangement for and optimized the trainings of management personnel, professionals
+and frontline employees at the basic level, and brought the role of strategy transmission, discussion & exchange,
+problem-solving and learning & sharing platforms into better play. Mainly for the purpose of solving problems, the
+Bank explored the training for better performance and realized the deep integration of training and strategy. The
+Bank customized trainings for domestic and overseas branches, and deepened the reform of professional qualification
+certification. Throughout 2018, the Bank organized 45 thousand sessions of training for 5.24 million persons, with an
+average of 10.4 days per person.
+The leading role of corporate culture was brought into play. The Bank compiled and issued the Corporate Culture
+White Paper, enriched the core value concept of "Integrity Leads to Prosperity", released the core concept of
+"focusing on the source, changing with the times, pursuing innovation with collaboration and retaining permanent
+vitality" for innovation culture, and advocated the "fighter + doer" culture. With a focus on the theme of "ONE ICBC,
+ONE FAMILY", the Bank held a special exhibition on corporate cultures of overseas institutions, and rolled out the
+Phase II of "That's China •That's ICBC" project in a bid to increase cultural integration of overseas institutions. The
+Bank staged an exhibition of grassroots culture "That's ICBC That's we" to inform outlets and customers of the
+excellent cultural concept and showcase the hard-working glamor of employees.
+46
+ICBC
+RISK MANAGEMENT
+Discussion and Analysis
+Audit Committee of
+The Ecosystem development project kicked off. With the integration and development of major business architectures
+and the introduction of an open new account service system across all regions and all media, deposit products could
+be configured flexibly and quickly. In-depth IT architecture transformation was launched, completing the migration
+of e-Payment and other hot business functions from host to open platforms; service transformation of applications
+was carried out, with distributed transformation in applications such as Quick Payment. The Bank promoted the cloud
+platforms in an all-round way and effectively realized the rational layout of system resources. While optimizing the
+layout of applications at the Head Office and branches, the Bank completed centralized deployment of applications
+such as self-service terminals, centralized business processing and operation management of outlets. The Bank found
+wider applications of artificial intelligence technology in scenarios like transaction anti-fraud and product precision
+marketing and of face recognition technology in fields such as ATM money withdrawal, business payment and social
+security fund collection. It relied on the internet of things technology to create a smart vault management application
+model and on the blockchain technology to realize the transparent and efficient management of the "1000-year
+Afforestation" and relocation funds in Xiongan New Area.
+of the Board of Directors
+the Board of Directors
+Senior management of subsidiaries
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Credit Risk
+Management Committee
+Market Risk
+Management Committee
+Operational Risk
+Management Committee
+Internal Audit Bureau
+branches and subsidiaries
+Internal Audit Sub-bureau
+At the level of Head Office
+At the level of the Board of Directors
+First line of defense
+Second line of defense
+Sydney Branch (Australia)-
+Primary reporting line
+Secondary reporting line
+At the level of branches
+Business departments of
+Management of Branches
+Risk Management
+Committee
+Credit risk
+Liquidity risk, interest rate risk
+in the banking book
+Risk Management
+Department
+Credit and Investment
+Management Department
+Asset & Liability
+Management Department
+Internal Control &
+Operational risk, compliance risk Compliance Department
+Reputational risk
+Executive Office
+Strategic risk
+Office of Steering Group
+for Deepening Reform
+Legal risk
+Legal Affairs Department
+Board of directors of subsidiaries
+Asset & Liability
+Management Committee
+Risk committee for
+institutions in the US
+Information Technology
+Enterprise risk, market risk,
+country risk
+STANDARD BANK GROUP LIMITED
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of KZT8,933
+million. It principally engages in commercial banking services such as deposit, loan, international settlement and trade
+finance, foreign currency exchange, guarantee, account management, internet banking and bank card service. At the end
+of 2018, ICBC (Almaty) recorded total assets of USD429 million and net assets of USD61 million. It generated a net profit of
+USD11.39 million during the year.
+Annual Report 2018
+41
+Discussion and Analysis
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD234 million. ICBC
+(New Zealand) provides corporate and personal banking services such as account management, transfer and remittance,
+international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the end of 2018,
+ICBC (New Zealand) recorded total assets of USD1,432 million and net assets of USD157 million. It generated a net profit of
+USD1.7 thousand during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC (Europe), a wholly-owned subsidiary bank of the Bank, was incorporated in Luxembourg with a paid-up capital of
+EUR437 million. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and Warsaw Branch are
+structured under ICBC (Europe), which mainly offers financial services including loan, trade finance, settlement, treasury,
+investment banking, custody, franchise wealth management, etc. At the end of 2018, ICBC (Europe) recorded total assets of
+USD7,851 million and net assets of USD729 million. It generated a net profit of USD8.71 million during the year.
+ICBC (LONDON) PLC
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital of
+USD200 million, It provides banking services such as deposit and exchange, loan, trade finance, international settlement,
+funds clearing, agency, foreign exchange trading and retail business. At the end of 2018, ICBC (London) recorded total assets
+of USD2,378 million and net assets of USD423 million. It generated a net profit of USD25.42 million during the year.
+ICBC STANDARD BANK PLC
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million, in
+which the Bank holds a 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses such as
+base metals, precious metals, commodities and energy as well as global financial markets businesses such as exchange rate,
+interest rate, credit and equity. At the end of 2018, ICBC Standard Bank recorded total assets of USD24,575 million and net
+assets of USD1,258 million. It suffered a net loss of USD14.78 million during the year.
+BANK ICBC (JOINT STOCK COMPANY)
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB10,810
+million. It mainly provides a full spectrum of corporate banking services including corporate and project loan, trade finance,
+deposit, settlement, securities brokerage, custody, franchise treasury business and securities trading, foreign currency
+exchange, global cash management, investment banking and corporate financial consulting, as well as personal banking
+services. At the end of 2018, Bank ICBC (JSC) recorded total assets of USD929 million and net assets of USD175 million. It
+generated a net profit of USD11.00 million during the year.
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a 97.86%
+stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade finance,
+remittance, settlement, leasing and consulting. At the end of 2018, ICBC (Thai) recorded total assets of USD7,019 million and
+net assets of USD893 million. It generated a net profit of USD58.94 million during the year.
+ICBC TURKEY BANK ANONIM ŞIRKETI
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR833 million,
+it is able to provide a full range of commercial banking services. At the end of 2018, ICBC (Malaysia) recorded total assets of
+USD1,162 million and net assets of USD266 million. It generated a net profit of USD18.96 million during the year.
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR3.69 trillion, in which the Bank holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loan, trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the end
+of 2018, ICBC (Indonesia) recorded total assets of USD3,714 million and net assets of USD370 million. It generated a net
+profit of USD27.69 million during the year.
+ICBC (Macau) (Macau, China) ---- 24
+ICBC (New Zealand)
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.08% ordinary shares of Standard Bank. Based on mutual
+benefit and win-win cooperation, the two sides furthered their cooperation in equity cooperation, customer expansion,
+project financing, product innovation, risk management, IT and people-to-people exchange. At the end of 2018, Standard
+Bank recorded total assets of ZAR2,126,962 million and net assets of ZAR199,063 million. It generated a net profit of
+ZAR27,453 million during the year.
+(New Zealand)-
+1
+Discussion and Analysis
+Controlled Subsidiaries and Major Equity Participating Company
+♦ Overseas Subsidiaries
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+ICBC (Asia) is a wholly-owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD36,379 million.
+It provides comprehensive commercial banking services and the major businesses, including commercial credit, trade finance,
+investment service, retail banking, e-banking, custody, credit card, receiving bank services for IPOs and dividend distribution
+etc. At the end of 2018, ICBC (Asia) recorded total assets of USD114,258 million and net assets of USD14,982 million. It
+generated a net profit of USD1,057 million during the year.
+ICBC INTERNATIONAL HOLDINGS LIMITED
+ICBC International, a licensed integrated platform for financial services in Hong Kong that is wholly owned by the Bank, has
+a paid-up capital of HKD4,882 million. It mainly renders a variety of financial services, including corporate finance, investment
+management, sales and trading, and asset management. At the end of 2018, ICBC International recorded total assets of
+USD8,175 million and net assets of USD1,112 million. It generated a net profit of USD196 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2018, ICBC (Macau) recorded total assets of USD38,517 million
+and net assets of USD2,837 million. It generated a net profit of USD315 million during the year.
+PT. BANK ICBC INDONESIA
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Turkey), a subsidiary of the Bank in Turkey, has a share capital of TRY860 million, in which the Bank holds a 92.84%
+stake. It holds commercial banking, investment banking and asset management licenses, and provides corporate customers
+with comprehensive financial services including deposit, project loan, syndicated loan, trade finance, small and medium-
+sized enterprise loan, investment and financing advisory, securities brokerage and asset management, and renders personal
+customers with financial services such as deposit, consumption loan, residential mortgages, credit card and E-banking. At the
+end of 2018, ICBC (Turkey) recorded total assets of USD3,011 million and net assets of USD228 million. It generated a net
+profit of USD15.63 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+42
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Argentina), a controlled subsidiary of the Bank in Argentina, has a share capital of ARS1,345 million, in which the
+Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) provides a full range of
+commercial banking services including working capital loan, syndicated loan, structured financing, trade finance, personal
+loan, auto loan, spot/forward foreign exchange trading, financial markets, cash management, investment banking, bond
+underwriting, asset custody, leasing, international settlement, E-banking, credit card, asset management, etc. At the end of
+2018, ICBC (Argentina) recorded total assets of USD4,785 million and net assets of USD424 million. It generated a net profit
+of USD138 million during the year.
+Major Domestic Subsidiaries
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the Bank
+holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other businesses
+as approved by CSRC, and owns many business qualifications including mutual fund, QDII, enterprise annuity, specific asset
+management, domestic and overseas investment manager of social security fund, RQFII, insurance asset management,
+non-listed asset management, occupational annuity, manager of basic pension insurance investment. It is one of the fund
+companies with the most comprehensive qualifications in the industry. ICBC Credit Suisse Asset Management (International)
+and ICBC Credit Suisse Investment Management Co., Ltd. are structured under ICBC Credit Suisse Asset Management Co.,
+Ltd. As of the end of 2018, ICBC Credit Suisse Asset Management managed a total of 122 mutual funds and more than
+520 enterprise annuity accounts and segregated management accounts as well as non-listed assets portfolios, with the
+assets under management amounting to RMB1.31 trillion, and recorded total assets of RMB9, 103 million and net assets of
+RMB7,801 million. It generated a net profit of RMB1,496 million during the year.
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB18.0 billion. It mainly operates the
+financial leasing of large-scale equipment in critical fields such as aviation, shipping, energy and power, rail transit and
+equipment manufacturing. It also engages in various financial and industrial services including leased assets trading,
+securitization of investment assets, assets management and economic consulting. At the end of 2018, ICBC Leasing
+recorded total assets of RMB271,504 million and net assets of RMB32,572 million, and generated a net profit of RMB3,215
+million during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB12,505 million, in which the Bank holds a 60% stake.
+ICBC-AXA engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and
+re-insurance of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the
+State, and other businesses approved by the CBIRC. At the end of 2018, ICBC-AXA recorded total assets of RMB119,041
+million and net assets of RMB13,468 million. It generated a net profit of RMB94 million during the year.
+ICBC FINANCIAL ASSET INVESTMENT CO., LIMITED
+ICBC Investment, a wholly-owned subsidiary of the Bank, has a registered capital of RMB12.0 billion and is one of the
+first pilot banks in China to conduct debt-for-equity swap authorized by the State Council. It holds the franchise license of
+non-bank financial institution and is mainly engaged in debt-for-equity swap and the supporting business. In 2018, ICBC
+Investment became the first licensed private equity fund manager to carry out debt-for-equity swap, and it established a
+private equity fund management subsidiary - ICBC Capital Management Co., Ltd. At the end of 2018, ICBC Investment
+recorded total assets of RMB43,307 million and net assets of RMB13,065 million. It generated a net profit of RMB550 million
+during the year.
+44
+ICBC
+ICBC
+Discussion and Analysis
+Majority Equity Participation Company
+Discussion and Analysis
+43
+ICBC FINANCIAL LEASING CO., LTD.
+Annual Report 2018
+ICBC AUSTRIA BANK GmbH
+ICBC (Austria), a wholly-controlled subsidiary of the Bank in Austria, has a share capital of EUR100 million. It was licensed
+by the European Central Bank in August 2018 and got through local registration in November. ICBC (Austria) provides
+financial services such as corporate deposits, loans, trade finance, international settlement, cash management, cross-border
+RMB business, foreign exchange transactions, and financial advisory for cross-border investment and financing. At the end of
+2018, ICBC (Austria) recorded total assets of USD114 million and net assets of USD114 million.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD369 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2018, ICBC (USA) recorded total assets of USD2,893 million and net assets of USD418 million. It generated a net
+profit of USD25.15 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD158.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) provides corporate and retail banking
+services such as deposit, loan, settlement and remittance, trade finance, foreign exchange trading, funds clearing, cross-
+border RMB settlement, RMB currency notes, cash management, E-banking, bank card and investment and financing
+information consulting service. At the end of 2018, ICBC (Canada) recorded total assets of USD1,445 million and net assets
+of USD202 million. It generated a net profit of USD20.73 million during the year.
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers securities brokerage services including securities
+clearing and financing for institutional customers. At the end of 2018, ICBCFS recorded total assets of USD27,142 million
+and net assets of USD132 million. It suffered a net loss of USD21.68 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN1,597 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) offers corporate deposit, loan, international settlement, trade finance,
+foreign exchange trading and other services. At the end of 2018, ICBC (Mexico) recorded total assets of USD286 million and
+net assets of USD71 million. It generated a net profit of USD30 thousand during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+ICBC (Brasil), a wholly-owned subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million. ICBC (Brasil) offers
+commercial banking and investment banking services such as deposit, loan, trade finance, international settlement, fund
+transaction, franchise wealth management and financial advisory. At the end of 2018, ICBC (Brasil) recorded total assets of
+USD384 million and net assets of USD56 million. It generated a net profit of USD0.20 million during the year.
+ICBC PERU BANK
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD100 million. Holding a full-functional
+commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement, trade
+finance, foreign exchange trading, E-banking and other services. At the end of 2018, ICBC (Peru) recorded total assets of
+USD291 million and net assets of USD75 million. It suffered a net loss of USD1.09 million during the year.
+Discussion and Analysis
+5.18
+Lodging and catering
+4,951
+1.2
+95,530
+1.44
+culture and sanitation
+1,461
+850
+1.7
+126,906
+0.86
+Science, education,
+2.1
+170,315
+111,047
+0.67
+1.5
+186,416
+2.93
+168,903
+2,998
+2.25
+100.0
+7,523,000
+2.34
+100.0
+7,973,527
+3,256
+Total
+4,142
+2.5
+191,651
+2.60
+4,962
+2.4
+191,146
+Others
+2.16
+2.8
+and public utility
+2.14
+2.72
+13,631
+6.7
+501,769
+1.66
+9,823
+7.4
+592,031
+Real estate
+management
+0.15
+975
+8.7
+655,533
+0.22
+In 2018, following the keynote of serving the supply-side structural reform, the Bank adhered to the concept of high-quality
+development, focused on major areas and key links in serving the real economy, and continued to improve the industry's
+credit structure. Loans to transportation, storage and postal services increased by RMB178,863 million, representing a
+growth rate of 10.4%, mainly due to efforts in supporting major national strategies and plans, serving the coordinated
+development of the four regions, three supporting belts and the Guangdong-Hong Kong-Macau Greater Bay Area, and
+providing financing support for developing high-speed railways, expressways, urban rail transit, ports, and airports. Loans
+to leasing and commercial services increased by RMB137,876 million, representing a growth rate of 15.1%, mainly
+for supporting the financing needs of projects for people's wellbeing, projects for strengthening areas of weakness in
+infrastructure, and for infrastructure in such strategic planned areas as national new areas, free trade zones, and industrial
+clusters. Loans to water, environment and public utility management increased by RMB114,688 million, representing a
+growth rate of 17.5%, mainly driven by steady efforts in supporting the investment and financing needs of key projects and
+projects for people's wellbeing in new urbanization, environmental protection and public services.
+1,718
+Wholesale and retail
+488,031
+6.1
+52,588
+3,966
+2.3
+185,313
+Mining
+1.28
+2,856
+3.0
+223,484
+208,675
+1.61
+2.9
+232,736
+Construction
+9.75
+55,366
+7.6
+568,011
+10.78
+3,749
+The increase of NPLs in manufacturing was principally due to the decline in operating profits and increase in defaults on
+loans of some enterprises not meeting the high-quality development standards, as well as enterprises with overcapacities.
+The increase of NPLs in transportation, storage and postal services was mainly caused by defaults on loans by some ports,
+shipping enterprises and private-owned highways.
+38,628
+51
+2,003,202
+1.65
+36,401
+14.3
+2,202,221
+Central China
+2.00
+46,903
+16.4
+2,339,537
+2.16
+54,489
+16.4
+2,524,307
+Bohai Rim
+1.73
+32,878
+14.1
+32,911
+1.64
+Western China
+9.7
+Overseas and others
+Total
+2.67
+19,596
+5.2
+734,343
+3.32
+25,186
+13.3
+4.9
+Northeastern China
+1.54
+17.7
+2,512,303
+1.30
+35,572
+17.7
+2,735,901
+759,140
+Annual Report 2018
+1,896,063
+30,480
+NPLs
+(%)
+Loan
+ratio (%)
+NPLs
+(%)
+Loan
+Item
+NPL
+Percentage
+NPL
+Percentage
+At 31 December 2017
+In RMB millions, except for percentages
+At 31 December 2018
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+Discussion and Analysis
+ratio (%)
+Head Office
+723,302
+4.7
+13.4
+2,072,857
+Pearl River Delta
+1.08
+27,955
+18.2
+2,599,171
+0.86
+1.47
+24,195
+2,823,603
+Yangtze River Delta
+2.33
+14,702
+4.4
+629,733
+2.77
+20,036
+18.4
+770,221
+At 31 December 2017
+gas and water
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+The key indicators of loan quality were stable. As at the end of 2018, according to the five-category classification, pass
+loans amounted to RMB14,733,891 million, representing an increase of RMB1,283,405 million when compared with the
+end of the previous year and accounting for 95.56% of total loans. Special mention loans stood at RMB450,930 million,
+representing a decrease of RMB111,044 million, and accounting for 2.92% of the total, with a drop of 1.03 percentage
+points. NPLs amounted to RMB235,084 million, showing an increase of RMB14,096 million, and NPL ratio was 1.52%, with
+a drop of 0.03 percentage points.
+100.00
+0.22
+30,925
+14,233,448
+100.00
+15,419,905
+0.23
+35,880
+0.76
+108,854
+0.59
+90,383
+0.57
+81,209
+0.70
+At 31 December 2018
+At 31 December 2017
+Percentage
+NPL ratio
+1.97
+175,903
+62.8
+8,936,864
+2.07
+194,696
+61.0
+9,418,894
+108,821
+(%)
+NPL ratio
+Percentage
+(%)
+Loan
+(%)
+NPLs
+(%)
+Loan
+Item
+Corporate loans
+NPLs
+Discounted bills
+1.55
+1.52
+Special mention
+Pass
+Item
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+At the end of 2018, the Bank's maximum exposure to credit risk, without taking into account any collateral and other credit
+enhancements, was RMB30,182,752 million, an increase of RMB1,304,232 million compared with the end of the previous
+year. Please refer to "Note 51. (a)(i) to the Financial Statements: Maximum Exposure to Credit Risk Without Taking Account
+of Any Collateral and Other Credit Enhancements". For mitigated risk exposures of credit risk asset portfolio of the Bank,
+please refer to the section headed "Credit Risk" of the 2018 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited.
+Credit Risk Analysis
+Discussion and Analysis
+49
+Annual Report 2018
+Based on the strict implementation of bank-wide, unified credit risk management policy requirements, the Bank strengthened
+pre-investment analysis and post-lending management on credit risk exposed to investment business, and intensified the
+monitoring of existing business in key risk industries. It strictly implemented the regulatory requirements for currency market
+transactions, strengthened pre-access examination and dynamic risk monitor for counterparties, paid close attention to the
+change of counterparties' qualification and collateral value throughout the term of business, and took proactive measures
+to prevent risks. The Bank actively promoted the signing of ISDA, NAFMII and other legal agreements regarding derivatives,
+strictly controlled the counterparty credit line on derivatives through the financial market transaction platform, and
+strengthened dynamic management of margin in franchise transaction.
+◆ Credit Risk Management of Treasury Operations
+The Bank improved policies on credit card risk management and tightened credit financing limit to personal customers. It
+optimized the personal credit extension strategy and implemented dynamic credit limit adjustment. The big data decision-
+making engine was upgraded for faster and smarter approval and decision-making process, and to strengthen early
+monitoring and warning of high-risk customers in the lending process. The Bank strengthened fraud risk prevention, and
+developed a full-process fraud risk prevention and control system. It actively inspected risks with third-party internet platforms.
+Effective ongoing efforts were made on non-performing assets ("NPAS") recovery and disposal by applying more collection
+methods and mitigating NPAs through various channels.
+◆ Credit Risk Management of Credit Card Business
+The Bank continued to upgrade policies on personal loans, tightened access to residential mortgages, and developed
+differentiated regulations on loan access and institutions cooperated with the Bank in residential mortgages business. It
+devoted more energy to increasing the granularity of risk monitoring, made better arrangements for risk monitoring models,
+and closely monitored the entire process of residential mortgages business to stave off risks. There is an improvement in
+the personal loan management system, with a government-bank collaboration platform in place to ensure transaction
+authenticity through interconnection with relevant information system of government departments. The Bank achieved better
+management of cooperative institutions in the business systems, and developed differentiated access approval level for all
+types of developers. Further advances have been made in major post-lending event reporting and default loan collection
+system to improve the Bank's risk management and control capabilities.
+Credit Risk Management of Personal Loans
+.
+The Bank strengthened credit risk management of small enterprises. It established an inclusive financial risk prevention and
+control system covering the whole process including customer access, middle-office approval and post-lending management.
+It strictly controlled the quality of new loans, strengthened research in market segmentation and target customer base
+management, and implemented differentiated due diligence mode based on the characteristics of loans to small and micro
+enterprises. The administrative measures for granting lifetime loans to small and micro enterprises was revised to regulate the
+management mode of small and micro loans. Leveraging the big data platform, the Bank improved its data monitoring model
+and continued to strengthen monitoring on small and micro loan risks from multiple dimensions. It also regularly inspected
+risks in existing loans, and carried out classified risk prevention and mitigation in an effort to strengthen asset quality in all
+areas.
+NPLs
+Substandard
+Doubtful
+Loss
+235,084
+3.95
+561,974
+2.92
+450,930
+94.50
+(%)
+Amount
+13,450,486
+220,988
+95.56
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2018
+1,578,574
+15,419,905
+In RMB millions, except for percentages
+Total
+14,733,891
+364,437
+2.4
+268
+18.6
+1,409,206
+5.76
+79,790
+17.4
+1,385,463
+Manufacturing
+and postal services
+0.56
+9,568
+22.8
+1,715,562
+0.79
+15,016
+23.8
+1,894,425
+Transportation, storage
+67,604
+4.80
+Leasing and
+1,048,548
+of electricity, heat,
+0.16
+1,407
+12.0
+900,484
+0.23
+2,113
+11.5
+(%)
+919,768
+commercial services
+0.69
+6,250
+12.1
+910,672
+0.60
+6,279
+13.2
+Production and supply
+NPLs
+(%)
+Loan
+235,084
+100.0
+15,419,905
+Total
+0.90
+44,560
+34.7
+4,945,458
+1.52
+0.71
+36.6
+5,636,574
+Personal loans
+0.15
+525
+2.5
+351,126
+0.07
+40,120
+Water, environment
+14,233,448
+220,988
+(%)
+NPLs
+(%)
+Loan
+Item
+NPL ratio
+Percentage
+NPL ratio
+100.0
+Percentage
+At 31 December 2018
+In RMB millions, except for percentages
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+Discussion and Analysis
+ICBC
+50
+Corporate NPLs were RMB 194,696 million, showing an increase of RMB18,793 million when compared with the end of the
+previous year, and representing a NPL ratio of 2.07%. Personal NPLs amounted to RMB40, 120 million, showing a decrease
+of RMB4,440 million, and represented a NPL ratio of 0.71%, with a drop of 0.19 percentage points.
+1.55
+At 31 December 2017
+10.2
+80,919
+0.55
+USD
+At 31 December 2018
+At 31 December 2017
+In RMB (USD) millions
+FOREIGN EXCHANGE EXPOSURE
+Discussion and Analysis
+55
+Annual Report 2018
+In 2018, the Bank closely watched the changes in external environment and market conditions, actively took a combination
+of measures such as limit management and hedging of risks to adjust and optimize the aggregate amount and structure of
+foreign exchange assets and liabilities, and strengthened assets and liabilities currency structure management and capital
+fund preservation management of overseas institutions. The currency risk of the Bank was under control.
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities. The Bank's objective of currency
+risk management is to control the impact of exchange rate fluctuations on the Bank's financial position and shareholders'
+equity within a tolerable extent. The Bank mitigates such risk principally by limit management and hedging of risks. The Bank
+carries out sensitivity analysis and stress testing of currency risk on a quarterly basis, and submits currency risk reports to the
+Senior Management and the Market Risk Management Committee.
+Currency Risk Management
+The Bank continued to strengthen trading book market risk management and product control, adopted the value-at-risk
+(VAR), stress testing, sensitivity analysis, exposure analysis, profit/loss analysis, price monitoring and other means to measure
+and manage trading book products. It continued to improve the portfolio-based market risk limit management system,
+refined the limit indicator system and dynamic management mechanism to meet the requirements of new products and
+businesses for timeliness, and realized quick and flexible limit monitoring and dynamic adjustments based on the Global
+Market Risk Management (GMRM) system. For VaR of the trading book, please refer to "Note 51.(c)(i) to the Financial
+Statements: VaR".
+Management of Market Risk in the Trading Book
+The Bank strictly complies with regulatory requirements on market risk management, has implemented an independent,
+centralized and coordinated market risk management model, and formed a management organizational structure featuring
+the segregation of the front, the middle and the back offices in the financial market business. The Board of Directors
+assumes the ultimate responsibility for monitoring market risk management. The Senior Management is responsible for
+executing the strategies, overall policy and system concerning market risk management approved by the Board of Directors.
+The Market Risk Management Committee of the Senior Management is the reviewing and decision-making organ of the
+Bank in respect of market risk management, is responsible for reviewing material affairs of market risk management,
+and performs its duty in accordance with the Working Regulations for the Market Risk Management Committee. The
+risk management departments at different levels undertake the responsibility of coordinating market risk management
+at respective levels, and the business departments implement market risk management policies and standards for their
+respective business areas in accordance with their functions.
+Market risk management is the process of identifying, measuring, monitoring, controlling and reporting market risk for
+the purposes of setting up and enhancing the market risk management system, specifying responsibilities and process,
+determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, stock prices and commodity prices). The Bank is primarily exposed to
+interest rate risk and currency risk (including gold).
+Market Risk
+USD
+Item
+RMB
+equivalent
+Please refer to "Note 51. (c)(ii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+25,358
+165,115
+24,783
+170,270
+Total foreign exchange exposure, net
+exchange items, net
+(31,753)
+Discussion and Analysis
+(206,760)
+(157,647)
+Exposure of off-balance sheet foreign
+exchange items, net
+equivalent
+57,111
+RMB
+371,875
+47,729
+327,917
+Exposure of on-balance sheet foreign
+(22,946)
+Please refer to the section headed "Market Risk" of the 2018 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited issued by the Bank for further information on market risk capital measurement.
+ICBC
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2018 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+Borrower G
+0.2
+24,562
+Transportation, storage and postal services
+Borrower F
+0.2
+26,970
+Finance
+Borrower E
+0.2
+29,398
+0.2
+34,922
+Transportation, storage and postal services
+Manufacturing
+Borrower D
+Borrower C
+0.3
+Production and supply of electricity, heat, gas and water
+21,111
+0.1
+Borrower H
+The Bank improved the differentiated management framework for agency investment, developed and revised fundamental
+administrative measures for non-standard agency investment and cooperative institutions, and strengthened management
+of such key businesses as debt-for-equity swap, underwriting and investment of asset-backed securities and public
+entrusted loans. It strengthened entire-process risk management for asset management business, implemented strict pre-
+investment review, and improved bond rating rules and regulations. Compliance review for transaction process was further
+strengthened, with stricter selecting standards and unified quota management for cooperative institutions. Focusing on
+risk resolution, the Bank intensified post-investment management, placed greater focus on inspecting and supervising risk
+projects, and actively applied investment banking disposal methods to speed up work on collecting risk projects.
+The Bank actively implemented the requirements of New Rules on Asset Management, regarded the building of asset
+management risk control system as an important cornerstone of business transformation and development, and endeavored
+to build an enterprise risk management system for asset management business to cover the whole-process all-risk line
+coverage and match the risk and return.
+Risk Management for Asset Management
+The Bank actively established and improved the management structure and system for large exposures, formulated
+relevant regulations, and clarified requirements on management structure, related customer management, internal limit
+management, calculation method and statistical report related to large exposures management. Efforts were also made to
+promote the information system to effectively manage the Bank's large exposures.
+Large Exposures Management
+2.2
+340,765
+0.1
+54
+20,267
+Borrower J
+Total
+0.1
+20,598
+Transportation, storage and postal services
+Borrower I
+0.1
+20,945
+Transportation, storage and postal services
+Transportation, storage and postal services
+40,207
+Interest Rate Risk in the Banking Book
+Management of Interest Rate Risk in the Banking Book
+Less than
+In RMB millions
+At 31 December 2017
+At 31 December 2018
+INTEREST RATE RISK EXPOSURE
+As at the end of 2018, the Bank had a negative cumulative interest rate sensitivity exposure within one year of RMB525,850
+million, representing an increase of RMB319,236 million from the end of the previous year, mainly caused by the increase in
+repriced or matured due to customers within one year. It had a positive cumulative interest rate sensitivity exposure above
+one year of RMB2,743,107 million, representing an increase of RMB702,011 million, mainly due to the increase in repriced
+or matured bond investments above one year.
+♦ Interest Rate Exposure Analysis
+Discussion and Analysis
+57
+Annual Report 2018
+Note: Please refer to "Note 51.(d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+39,467
+4,049
+(36,882)
+(4,049)
+691
+59
+3 months to
+3 months
+(133,897)
+(951,368)
+1 year
+(391,953)
+The Bank's liquidity risk management system conforms to the overall development strategy and the overall risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control for liquidity risk and a complete management information system.
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department; and the execution system comprising the Asset and Liability
+Management Department, leading management departments of on- and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs the corresponding functions of decision making, supervision and execution functions
+according to division of responsibilities.
+58
+ICBC
+The Bank strengthened risk management in the real estate industry. It stepped up efforts to guarantee public wellbeing in real
+estate industry, continued to grant loans for selective shantytown renovation projects, and steadily carried out the business
+of loans for housing leasing. The Bank controlled the aggregate of loans for commercial real estate, and on this basis applied
+differentiated regional credit policies. Specifically, it mainly supported ordinary commercial housing projects in first-tier cities
+and second-tier cities with reasonable inventory digestion cycle and sufficient potential demand, prudently granted new loans
+for housing development in third and fourth-tier cities, and strictly controlled loans for commercial property development and
+shantytown renovation projects for commercial use.
+Liquidity Risk Management System and Governance Structure
+.
+In 2018, the Bank continued to uphold a steady and prudent liquidity risk management strategy, and kept a close eye on
+factors affecting liquidity risk management. It constantly improved its liquidity risk management system, revised relevant
+management measures and strengthened monitoring over key businesses, customers and funds to ensure sound liquidity risk
+management during payment peak times and critical times. The liquidity risk management system was improved, with more
+automatic supporting system for monitoring, measuring and managing liquidity risks, so as to boost refined management of
+liquidity risk. The Bank made coordinated efforts to manage liquidity risks in both domestic and overseas institutions, in local
+and foreign currencies, and on- and off-balance sheet, and took measures to see that the Group's liquidity is stable and safe.
+(690)
+Liquidity Risk Management
+Liquidity Risk
+447,734
+Note: Please refer to "Note 51.(d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+744,754
+1,684,757
+1,593,362
+1,058,350
+Over 5 years
+1 to 5 years
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of
+loans by customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization,
+operating losses, derivatives trading risk and risk associated with its affiliates.
+Interest rate risk in the banking book is defined as the risk of loss in the economic value and overall profit of the banking
+book arising from adverse movements in interest rate and maturity structure, etc.
+(59)
+936
+Currency
+Supposing that there is parallel shift of overall market interest rates, and taking no account of possible risk management
+actions taken by the management to mitigate the interest rate risk, the analysis on interest rate sensitivity of the Bank
+categorized by major currencies in 2018 is shown in the following table:
+♦ Interest Rate Sensitivity Analysis
+Analysis on Interest Rate Risk in the Banking Book
+In line with the principles of comprehensiveness, prudence and foresight, the Bank's stress testing on interest rate risk in
+the banking book adopted the interest rate risk exposure measurement approach and standardized duration approach
+to measure the effect of interest rate changes under different stress scenarios on the overall profit and economic value.
+Based on the domestic and overseas regulatory requirements, the bankwide asset and liability business structure, operation
+and management as well as risk appetite, the Bank set stress testing scenarios for interest rate risk in the banking book
+by taking into account the current interest rate level, historical changes and trends, total assets and liabilities and their
+term characteristics, business development strategies, customer behaviors and other factors, and conducted stress testing
+quarterly.
+◆ Stress Testing
+On the basis of management strategies and objectives, the Bank developed policies and made clear the modes and
+instruments for managing interest rate risk in the banking book. By developing and modifying such methods as on-balance
+sheet adjustment and off-balance sheet hedging to manage interest rate risk, adeptly using quantity, pricing and derivative
+instruments regarding assets and liabilities, and applying limit management system, business plan, performance assessment
+and capital evaluation in all areas for interest rate risk management and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the affiliates and the products and portfolios easily affected by interest
+rate risk.
+The Bank formulated strategies and clarified objectives and modes for managing interest rate risk in the banking book based
+on risk appetite, risk status, macroeconomic and market changes. Based on the pre-judging of the interest rate trend and
+measurement results of the changes in overall profit and economic value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated approach to using interest rate risk control tools to mitigate and manage
+risks, so as to ensure the Bank's actual interest rate risks conform to its bearing capability and willingness.
+The objective of management of interest rate risk in the banking book: the Bank aims at maximizing the risk-adjusted net
+interest income within the tolerable level of interest rate risk under its risk management and risk appetite.
+Objective, Strategy and Important Policy of Management of Interest Rate Risk in the Banking Book
+Discussion and Analysis
+ICBC
+56
+The Bank strictly complied with regulatory requirements for interest rate risk in the banking book, effectively managed
+interest rate risk in the banking book at the Bank and consolidated level, and developed a sound governance structure for
+interest rate risk in the banking book that is fully built and well-structured, with clearly defined rights and responsibilities.
+The Board of Directors and the Senior Management are vested with the ultimate and executive responsibilities, respectively,
+for managing interest rate risk in the banking book. The Asset & Liability Management Department of the Head Office
+takes the leading role in managing interest rate risk in the banking book, and other departments and institutions play their
+roles in implementing policies and standards concerning interest rate risk in the banking book. The Internal Audit Bureau
+and Internal Control & Compliance Department of the Head Office are responsible for reviewing and evaluating duties in
+respective of interest rate risk in the banking book.
+The Bank's management system for interest rate risk in the banking book conforms to the system importance, risk status
+and business complexity, and fits the Bank's overall development strategy and the enterprise risk management system. The
+system mainly consists of the following elements: an effective risk governance structure; sound risk management strategies,
+policies and procedures; effective risk identification, measurement, monitoring, control and mitigation that cover all areas; a
+complete internal control and review mechanism; a fully-built risk management system; and adequate information disclosure
+and reporting.
+◆ Management System and Governance Structure for Interest Rate Risk in the Banking Book
+In 2018, upholding a steady and prudent risk appetite, the Bank heightened the management system and mechanism of
+interest rate risk in the banking book, made positive headway in interest rate risk management strategies, policies and
+procedures, and better applied a combination of quantity, pricing and derivative instruments regarding assets and liabilities.
+Based on interest rate and business trends, the Bank intensified efforts to regulate and control the duration of assets and
+liabilities and interest rate sensitivity gap, so as to effectively control the interest rate risk in the banking book.
+RMB
+USD
+HKD
+Others
+5,683
+1,645
+(5,679)
+(1,645)
+33,093
+3,281
+(30,513)
+(3,281)
+(936)
+equity
+equity
+income
+Effect on
+Decreased by 100 basis points
+Effect on
+net interest
+Effect on
+Increased by 100 basis points
+Effect on
+net interest
+In RMB millions
+Total
+income
+8,725
+0.7
+Amount
+Recoveries of loans
+transfer out
+(108,778)
+(2,294) (106,146)
+(338)
+Write-offs and
+(27)
+(200)
+0
+173
+147,374
+85,074
+24,083
+38,217
+Charge/(reverse)
+43,282
+(40,413)
+2,141
+2,141
+and advances
+previously written off
+As at the end of 2018, the allowance for impairment losses on loans stood at RMB413,177 million, of which RMB412,731
+million at amortised cost, and RMB446 million at fair value through other comprehensive income. Allowance to NPLs was
+175.76%, showing an increase of 21.69 percentage points; allowance to total loans ratio was 2.68%, showing an increase
+of 0.29 percentage points.
+Note: Please see "Note 23. to the Financial Statements: Loans and Advances to Customers" for details.
+31 December 2018
+446
+248
+0
+198
+412,731
+(2,869)
+173,241
+2
+2
+(604)
+(1,871)
+646
+621
+158,084
+Balance at
+Other movements
+81,406
+52
+to stage 3
+5,493
+Stage 1
+Item
+Movements of allowance for impairment losses
+Movements of allowance for impairment losses
+on loans and advances to customers measured
+at amortised cost
+In RMB millions
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+1.55
+220,988
+100.0
+14,233,448
+1.52
+235,084
+100.0
+0.49
+7,415
+10.7
+1,519,096
+Stage 2
+Stage 3
+Total
+Stage 1
+(4,901)
+to stage 2
+(1,417)
+(17,976)
+19,393
+to stage 1
+Transfer:
+1 January 2018
+(592)
+471
+23
+372,598
+152,770
+111,867
+107,961
+Balance at
+Total
+on loans and advances to customers measured
+at FVOCI
+Stage 2 Stage 3
+448
+101,785
+ICBC
+Item
+0.57
+0.41
+63,010
+0.48
+68,209
+0.54
+83,846
+0.75
+107,218
+0.59
+91,153
+loans
+Amount
+loans
+Amount
+% of total
+% of total
+31,923
+0.21
+29,729
+0.21
+Transportation, storage and postal services
+Transportation, storage and postal services
+Industry
+Borrower B
+Borrower
+Borrower A
+In RMB millions, except for percentages
+% of total
+loans
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted
+for 3.8% and 12.9% of the Bank's net capital base respectively. The total amount of loans granted to the top ten single
+customers was RMB340,765 million, accounting for 2.2% of the total loans. The table below shows the details of the loans
+granted to the top ten single borrowers of the Bank as at the end of 2018.
+BORROWER CONCENTRATION
+Discussion and Analysis
+At 31 December 2017
+53
+Rescheduled loans and advances amounted to RMB7,211 million, representing an increase of RMB2,053 million as compared
+to the end of the previous year. Rescheduled loans and advances overdue for over 3 months amounted to RMB1,143 million,
+representing a decrease of RMB231 million.
+RESCHEDULED LOANS
+Overdue loans stood at RMB269,932 million, representing a decrease of RMB16,143 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB178,779 million, representing a decrease of RMB78
+million.
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+2.01
+286,075
+1.75
+269,932
+Annual Report 2018
+DISTRIBUTION OF LOANS BY COLLATERAL
+At 31 December 2018
+100.0
+Percentage
+Percentage
+At 31 December 2018
+At 31 December 2017
+In RMB millions, except for percentages
+Discussion and Analysis
+Total
+1 to 3 years
+Over 3 years
+3 months to 1 year
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+Total
+Unsecured loans
+Guaranteed loans
+Pledged loans
+Loans secured by mortgages
+Amount
+(%)
+Amount
+(%)
+14,233,448
+100.0
+31.1
+4,427,035
+32.1
+4,950,419
+15,419,905
+14.5
+2,059,779
+In RMB millions, except for percentages
+14.0
+8.9
+1,265,834
+8.1
+1,256,196
+45.5
+6,480,800
+45.8
+7,056,026
+2,157,264
+Discussion and Analysis
+In 2018, the Bank continued to improve rules and regulations on market risk at the Group's level, and regulated the entire
+market risk management process management of overseas institutions. The Bank improved the group-wide market risk
+appetite limit transmission mechanism, strengthened the forward-looking analysis on the Group's currency risk and interest
+rate risk, and reinforced the trading behavior monitoring. The Bank pushed forward the overseas expansion and promotion
+of the Global Market Risk Management (GMRM) system and strengthened application of the market risk management
+system and data.
+Retained profits
+Corporate Bonds
+The Bank did not issue any corporate bonds that need to be disclosed as per the "No. 2 Standards on the Content and
+Format of Information Disclosure of Companies with Public Offerings Content and Format of the Annual Report"
+(Revision 2017) or "No. 38 Standards on the Content and Format of Information Disclosure of Companies with Public
+Offerings · Content and Format of the Annual Report of Corporate Bonds".
+_
+68
+ICBC
+2,232,033
+Net core tier 1 capital
+institutions that are under control but not subject to consolidation
+Investments in core tier 1 capital instruments issued by financial
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+7,980
+7,980
+(3,708)
+(3,739)
+1,532
+1,927
+8,478
+8,820
+14,282
+14,988
+(61,063)
+(11,646)
+2,716
+3,752
+1,096,868
+1,205,924
+264,850
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2018 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+278,980
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and those under IFRSS
+7.4
+82.3
+RMB and foreign
+71.0
+71.1
+70.9
+currency
+<=10.0
+3.8
+4.9
+4.5
+Pass
+Special mention
+Substandard
+Doubtful
+12.9
+14.2
+13.3
+1.7
+2.7
+3.4
+25.3
+23.2
+23.5
+38.8
+71.1
+36.8
+25.2
+10.6
+Note: The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and accounting
+standards applicable to the current period. The comparative figures are not adjusted or restated.
+232,660
+261,636
+151,952
+Capital adequacy ratio
+Core capital adequacy ratio
+regulations:
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related
+15.39%
+15.14%
+15.68%
+15.39%
+Capital adequacy ratio
+13.44%
+13.27%
+13.63%
+13.45%
+Tier 1 capital adequacy ratio
+12.88%
+12.77%
+13.23%
+12.98%
+Core tier 1 capital adequacy ratio
+2,216,707
+2,406,920
+2,419,120
+2,644,885
+Net capital base
+1,935,429
+2,110,060
+2,102,348
+64
+ICBC
+11.54%
+11.89%
+151,968
+356,407
+356,407
+2,044,390
+2,247,021
+In RMB millions, except for percentages
+At 31 December
+2017
+2018
+At 31 December
+Other intangible assets other than land use rights
+Goodwill
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+86.2
+General reserve
+Valid portion of capital reserve
+Paid-in capital
+Core tier 1 capital
+Item
+CAPITAL ADEQUACY RATIO
+As at the end of 2018, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 12.98%, 13.45% and 15.39%, respectively,
+complying with regulatory requirements.
+Discussion and Analysis
+14.67%
+14.56%
+14.34%
+14.11%
+11.96%
+11.65%
+Surplus reserve
+2,312,143
+83.0
+Foreign currency
+Capital adequacy ratio
+Notes: (1) Please refer to "Note 51. (e) to the Financial Statements: Capital Management".
+(2) Refers to risk-weighted assets after capital floor and adjustments.
+2,644,885
+17,190,992
+2,406,920
+15,902,801
+12.98%
+12.77%
+13.45%
+13.27%
+15.39%
+15.14%
+Annual Report 2018
+65
+Discussion and Analysis
+Please refer to the 2018 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+LEVERAGE RATIO
+In RMB millions, except for percentages
+At
+At
+At
+At
+At
+Item
+31 December
+2018
+30 September
+30 June
+Tier 1 capital adequacy ratio
+Net tier 1 capital
+Core tier 1 capital adequacy ratio
+Net capital base
+Additional tier 1 capital instruments and related premium
+80,110
+79,375
+79,952
+79,375
+Valid portion of minority interests
+735
+577
+Net tier 1 capital
+2,312,143
+2,110,060
+Tier 2 capital
+332,742
+297,360
+Valid portion of tier 2 capital instruments and related premium
+202,761
+222,321
+Surplus provision for loan impairment
+127,990
+71,736
+Valid portion of minority interests
+1,991
+3,303
+Tier 2 capital deductions
+500
+Significant minority investments in tier 2 capital instruments issued by
+500
+financial institutions that are not subject to consolidation
+Risk-weighted assets (2)
+Balance of adjusted on- and
+2,312,143
+29,679,878
+2018
+2,249,959
+30,363,117
+The Bank will continue to serve the real economy more effectively. We will adhere to the integrated development
+strategy of investment and financing, coordinate stock and increment, credit and non-credit, on-balance sheet and off-
+balance sheet businesses as well as domestic and overseas operations, improve the efficiency of resource allocation, and
+utilize all key financial elements to activate energy and vitality. The Bank will properly manage its investment and financing,
+actively support the continuation of the supply-side structural reform under the principle of "Consolidation, Enhancement,
+Improvement and Smoothness" and facilitate the spread of monetary policy and the fulfillment of the "Six Stabilities". In
+particular, we will stay true to the principle of equal credit, continuously improve financial services for private enterprises
+and small and micro enterprises, and better utilize the financial resources to ensure that the real economy is nourished
+through "targeted irrigation".
+The Bank will continue to deepen its transformation, reform and innovation. We will continue to adopt a combined
+approach to consolidate our foundation and concurrently seek transformation and upgrading. We seek to serve the
+broadest customer base and enhance our competitiveness in terms of deposits through all channels, market-wide mapping,
+extension of value chain and coordination of all business segments. We will foster new growth drivers and "sustainability"
+in a number of strategic segments with large growth potential and strong driving forces, so that all segments will forge
+ahead together for an overall success. We will continue with in-depth and solid reform and innovation. While deepening
+existing reform projects, we will push forward a number of new reform measures in succession to improve development
+quality and innovation vitality. Leveraged on the nature of finance and our strengths in FinTech, we will press ahead with IT
+architecture transformation and smart banking development in every respect, create a new ecosphere of financial services
+and empower our development on all fronts.
+The Bank will continue to enhance its ability to forestall and defuse risks. We will strike a balance between stable
+growth and risk prevention, and fight against major risks in a proactive manner. We will improve our capability of credit
+risk lifecycle management, with a focus on controlling new "bleeding points", defusing existing risks and disposing of
+non-performing loans, in an effort to cement the momentum of asset quality improvement. Under the principle of "clear
+vision, thorough understanding and good management", we will establish a penetrative panoramic view of risks, a simple
+and transparent business development strategy and a unified risk control system that runs through the Group, strengthen
+comprehensive risk management and prevent interaction and contagion of risks to ensure all risks are under overall control.
+Annual Report 2018
+67
+Discussion and Analysis
+OTHER INFORMATION DISCLOSED PURSUANT TO REGULATORY
+REQUIREMENTS
+Major Regulatory Indicators
+Item
+Liquidity ratio (%)
+Loan-to-deposit ratio (%)
+Percentage of loans to single largest
+customer (%)
+Percentage of loans to top 10
+customers (%)
+Loan migration ratio (%)
+Regulatory
+criteria
+2018
+2017
+2016
+RMB
+>=25.0
+43.8
+41.7
+35.7
+2019 marks the 70th anniversary of the founding of the People's Republic of China, and is a crucial year for building a
+moderately prosperous society on all fronts. The Bank will adhere to the overarching principle of seeking progress while
+ensuring stability. In the course of promoting high-quality economic development, the Bank will realize its healthy and
+sustainable development and further enhance its ability to create value, serve customers, control risks and compete in
+the market.
+The Bank mainly faces the following challenges: First, trade protectionism and other adverse factors add to the downside
+risks to the global economy, which will weigh on the internationalization of banks. Second, there are concerns over
+increasing difficulties that may arise from changes amid the stable economic performance of China, as some of such changes
+may bring challenges. Such a situation will put pressure on banking, especially on the stability of asset quality. Third, the
+worsening turbulences in the global financial market and the higher resonance risk of the domestic capital markets and bond
+market will challenge a bank's capability of comprehensive risk control. Fourth, the New Rules on Asset Management have
+made transformation an urgent priority for banks.
+The Bank mainly faces the following opportunities: First, the development of China continues to be in an important period
+filled with strategic opportunities in which economic fundamentals imbued with huge potential and strong resilience for
+long-term growth remain unchanged. It will create a stable macro environment for us, provide a good foundation and
+reinforce our confidence to do a good job. Second, the ongoing supply-side structural reform, the accelerated economic
+structure upgrading, the further reform and opening-up, and the in-depth implementation of coordinated regional
+development strategy will create ample opportunities for business development and financial innovation. Third, the rapid
+development and wide application of FinTech will give us new momentum and strengths in developing the Bank into a smart
+bank and building a new ecosphere of financial services.
+It is generally expected that banks will face a more complex business environment with higher level of uncertainties and risks
+in 2019. The year is a period of both severe challenges and strategic opportunities.
+2018
+31 March
+2018
+31 December
+2017
+2,161,384
+29,421,922
+2,154,625
+28,551,949
+2,110,060
+28,084,967
+off-balance sheet assets
+Leverage ratio
+7.79%
+7.41%
+7.35%
+>=25.0
+7.55%
+Note: Please refer to "Unaudited Supplementary Financial Information" for details on disclosed leverage ratio information.
+Capital Financing Management
+On the basis of capital replenishment by retained profits, the Bank proactively expanded the channels for external capital
+replenishment and continuously promoted the issuance of new types of capital instruments.
+According to the capital planning and capital replenishment planning, the Bank publicly issued the tier 2 capital bonds
+of RMB55.0 billion in March 2019 in China's national inter-bank bond market. The funds raised will be used to replenish
+the Bank's tier 2 capital in accordance with the applicable laws as approved by relevant regulators. Please refer to the
+announcements published by the Bank on the websites of SEHK and SSE.
+On 28 March 2019, the Board of Directors of the Bank reviewed and approved the Proposal on the Issuance of Undated
+Additional Tier 1 Capital Bonds. The Bank plans to issue write-down undated additional tier 1 capital bonds with the total
+amount up to RMB80.0 billion in China's national inter-bank bond market. All funds raised will be used to bolster the Bank's
+additional tier 1 capital. The undated additional tier 1 capital bonds issuance plan is still subject to the review and approval
+by the Shareholders' General Meeting of the Bank, after which it is further subject to the approval by the relevant regulatory
+authorities. Please refer to the announcements published by the Bank on the websites of SEHK and SSE.
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares". For details on relevant fundraising activities,
+please refer to the section headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders —
+Details of Securities Issuance and Listing".
+Allocation and Management of Economic Capital
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc.
+The Bank further strengthened its economic capital management in terms of measurement, allocation and assessment,
+improved its economic capital measurement policy and optimized its economic capital measurement standards and system.
+The Bank strictly implemented the measures for quota management, continuously boosted the refined management of
+economic capital, and reinforced the capital constraint on domestic branches, profitability units, overseas institutions and
+subsidiaries. Moreover, the Bank upgraded the economic capital measurement and appraisal policy of credit business and
+proactively facilitated the adjustment of its credit structure. It strengthened trainings on economic capital management for
+institutions at all levels, and vigorously pushed forward the application of economic capital in operational management and
+business front-line.
+66
+ICBC
+OUTLOOK
+Discussion and Analysis
+7.51%
+Additional tier 1 capital
+Net tier 1 capital
+2,030,108
+1 month
+1 to 3 3 months to
+months
+1 year
+432,760
+(674,702)
+(1,884,799)
+At 31 December 2017
+(10,793,525)
+(200,327)
+demand
+(12,057,413)
+(595,509)
+1 to 5
+years
+years
+4,412,116 8,793,935
+3,452,159 7,619,544
+Over 5
+Undated
+3,322,986
+3,488,301
+Total
+2,344,883
+2,141,056
+Note: Please refer to "Note 51.(b) to the Financial Statements: Liquidity Risk".
+Operational Risk
+Operational Risk Management
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution and delivery and process management constitute major sources of
+operational risk losses of the Bank.
+(829,587)
+The Bank strictly followed regulatory requirements on operational risk management and adopted the operational risk
+control mode of "integrated management, classified control". The Board of Directors assumes relevant responsibility for
+the effectiveness of the operational risk management according to the Articles of Association, and the Senior Management
+is responsible for implementing the strategy, overall policy and system for operational risk management approved by the
+Board of Directors. The Operational Risk Management Committee under the Senior Management, as the organizer and
+coordinator of operational risk management of the Bank, is responsible for reviewing and approving significant matters
+related to operational risk management according to the Working Regulations for the Operational Risk Management
+Committee. Marketing and product departments at all levels form the first line of defense of operational risk management,
+which assume direct responsibility for operational risk management in each business line. Internal control and compliance
+departments at various levels are comprehensive management departments for operational risk in institutions at various
+levels and assume the duty of operating the second line of defense of operational risk management, which are responsible
+for the arrangement and organization for the establishment and implementation of operational risk management system
+at each level; discipline enforcement, security, human resources, IT, finance and accounting, legal affairs, operation
+management, credit management and risk management departments at all levels are classification control departments
+for operational risk in institutions at various levels, which are responsible for management and control on specific types
+of operational risk. These departments, together with comprehensive management departments, form the second line of
+defense of operational risk management. The internal audit departments are responsible for auditing and evaluating the
+operation of the operational risk management system, and form the third line of defense.
+At 31 December 2018
+on
+1,856,054
+Discussion and Analysis
+• Objective, Strategy and Important Policy of Liquidity Risk Management
+Objective of liquidity risk management: by establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity risk
+at the Group level, the Bank, the affiliates, the branches and the business lines, and ensuring the liquidity demand is satisfied
+at a reasonable cost in time under the normal business scenario and the stress scenario.
+The Bank's liquidity risk management strategy and policy are formulated in accordance with the liquidity risk appetite, and
+they cover all businesses on- and off-balance sheet, all domestic and overseas business departments and branches that are
+likely to have a material impact on the liquidity risk, and contain the liquidity risk management under normal and stressed
+scenarios. The liquidity risk management strategy specifies the overall objective and mode of liquidity risk management
+and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk management are
+formulated in accordance with external and macro operating environments and business development of the Bank, with a
+view to striking an effective balance among security, liquidity and profitability.
+Liquidity Risk Management Mode
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+◆ Stress Testing
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress testing
+on liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress testing on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress testing at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+Less than
+Liquidity Risk Analysis
+Net stable funding ratio aims to ensure commercial banks have sufficient stable sources of funding to meet the needs for
+stable funding of assets and off-balance sheet risk exposures. The net stable funding ratio is the ratio of the available stable
+funding to the required stable funding. The available stable funding refers to the sum of the product of the book value
+of capital and liability items of commercial banks and the corresponding available stable fund coefficient. The required
+stable funding refers to the sum of the product of the book value of asset items of commercial banks and the off-balance
+sheet exposure and the corresponding required stable funding coefficient. As at the end of 2018, the net stable funding
+ratio was 126.62%, the available stable funding was RMB18,647,495 million, and the required stable funding was
+RMB14,726,640 million.
+The daily average liquidity coverage ratio for the fourth quarter of 2018 was 126.66%, 6.30 percentage points higher than
+the previous quarter, mainly due to adequate available funding in the fourth quarter and the increase in cash inflow within
+30 days. High-quality liquid assets cover cash, available central bank reserve under stress and primary and secondary bond
+assets that can be included in the liquidity coverage ratio under the regulatory requirements. For the quantitative information
+for liquidity coverage ratio based on the Administrative Measures for the Information Disclosure of Liquidity Coverage Ratio
+of Commercial Banks promulgated by the former CBRC, please refer to "Unaudited Supplementary Financial Information".
+Annual Report 2018
+59
+Discussion and Analysis
+The Bank also assessed its liquidity risk profile by using liquidity exposure analysis. As at the end of 2018, the liquidity
+exposure for the less than 1 month category turned from negative to positive, which was mainly due to the decrease of
+repurchase agreements with corresponding term. The negative liquidity exposure for the 3 months to 1 year category
+increased, mainly caused by the increase of due to customers with corresponding term. The positive liquidity exposure
+for the 1 to 5 years category expanded, mainly due to the increase in investments in bonds and loans and advances to
+customers with corresponding term. The positive liquidity exposure for the category of over 5 years increased, which was
+mainly due to increase in loans and advances to customers with corresponding term. Deposits maintained steady growth
+with a high deposition rate, and at the same time the Bank made major investment in highly liquid bond assets, and
+possessed sufficient liquidity reserves. Therefore, the overall liquidity of the Bank maintained at a safe level.
+LIQUIDITY EXPOSURE ANALYSIS
+Overdue/
+repayable
+In RMB millions
+As at the end of 2018, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were 43.8% and 83.0%
+respectively, both meeting the regulatory requirements. Loan-to-deposit ratio was 71.0%. Please refer to the section headed
+"Discussion and Analysis - Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+60
+2,030,108
+Discussion and Analysis
+Annual Report 2018
+63
+Discussion and Analysis
+CAPITAL MANAGEMENT
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly strengthening and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channels, raising capital quality and optimizing capital structure. The Bank's capital management
+covers various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management, capital investment and financing management.
+In 2018, the Bank further deepened the capital management reform, strengthened capital saving and optimization,
+intensified the constraint of economic capital on risk-weighted assets and continued to elevate the capital use efficiency
+and return on capital. It steadily enhanced the supplementation capacity of endogenous capital, and further consolidated
+the bank-wide capital base to reinforce its capacity in supporting the real economy. In 2018, all capital indicators performed
+well, of which capital adequacy ratio was kept at a sound and appropriate level.
+Capital Adequacy Ratio and Leverage Ratio
+The Bank calculated its capital adequacy ratios at all levels in accordance with the Capital Regulation. According to the scope
+of implementing the advanced capital management approaches as approved by the former CBRC, the foundation internal
+ratings-based (IRB) approach was adopted for corporate credit risk, the IRB approach for retail credit risk, the internal model
+approach (IMA) for market risk, and the standardized approach for operational risk meeting regulatory requirements. The
+weighted approach was adopted for credit risk uncovered by the IRB approach and the standardized approach for market
+risk uncovered by the IMA.
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+In 2018, facing the increasingly complicated international political and economic environment, the Bank strictly abode by
+regulatory requirements and, with consideration of its business development needs, continued to strengthen country risk
+management. The Bank closely observed changes in country risk exposures, constantly tracked, monitored and reported
+country risk, and timely updated and adjusted the country risk rating and limits. It continued to strengthen early warning
+mechanism for country risk, proactively conducted stress testing on country risk and reasonably and effectively controlled
+country risk while pushing ahead with the internationalization strategy.
+In RMB millions, except for percentages
+At 31 December 2017
+Group
+At 31 December 2018
+Parent
+Company
+Group
+Calculated in accordance with the Capital Regulation:
+Net core tier 1 capital
+2,232,033
+ICBC
+2,040,396
+Item
+The Bank strictly observes regulatory requirements on country risk management. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of country risk management. The Senior Management is responsible for executing the
+country risk management policies approved by the Board of Directors. The Risk Management Committee of the Head Office
+is responsible for reviewing matters regarding country risk management. The Bank manages and controls country risk with
+a series of tools, including country risk assessment and rating, country risk limit, country risk exposure calculation and
+monitoring and stress testing. The Bank reviews the country risk rating and limits at least once every year.
+Parent
+Company
+Country Risk
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+In 2018, the Bank continued to push the Group's operational risk management to a higher level in line with the regulatory
+focus and operational risk trends. It conducted risk governance in key fields and links on an ongoing basis, and actively
+conducted in-depth crackdown campaign to improve or update policies, procedures, systems and mechanisms and the
+procedure-based hard control over key links. External fraud risk management was strengthened to effectively protect
+customer's funds. Operational risk limit management was reinforced to ensure adequate monitoring and reporting of limit
+indicators. The Bank also improved the operational risk measurement system, intensified large-value operational risk event
+control, and continuously strengthened the application of operational risk management tools and risk data quality. During
+the reporting period, the operational risk management system of the Bank operated smoothly and the operational risk was
+controllable on the whole.
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arises out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions or requirements of other relevant rules during the Bank's operation; the
+unfavorable legal defects that exist in products, services or information provided to clients, transactions engaged in, and
+contracts, agreements or other documents executed by the Bank; legal disputes (litigation or arbitration proceedings)
+between the Bank and its clients, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally and
+externally.
+Legal Risk
+In 2018, the Bank continued to strengthen legal risk management, by improving the risk prevention and control capacity
+in legal risk management, ensuring the legal and compliant operation, healthy business development and overall business
+stability of the Group. The Bank improved both the vertical linkage and horizontal coordination mechanism between the
+Head Office and branches. By embedding legal risk prevention and control into business negotiations, product design,
+contract signing and other links, the Bank prevented legal risk in advance and made the legal risk prevention and control
+more prospective, proactive and targeted. Legal risk prevention and control in key areas and links have made headway in
+line with new financial regulatory requirements. The Bank further improved the cross-border coordination and management
+for legal work and strengthened the legal risk management of overseas institutions, actively responding to cross-border legal
+issues emerging in the development of international operations. It applied multiple legal means to improve debt collection
+efficiency. Moreover, the Bank pragmatically strengthened the risk management and control of lawsuit-related risks, thereby
+preventing and mitigating lawsuit-related risks and losses. It assisted with the online judicial inquiry and enforcement,
+and improved the efficiency of providing enforcement assistance. The Bank made smooth progress in implementing
+the seal reform, put in place and improved a procedure-based mechanism for electronic signing system. It standardized
+contract management and reinforced authorization management, related party management, trademark management and
+intellectual property protection, and made continuous efforts to institutionalize risk management and control, and build a
+better-structured system.
+Annual Report 2018
+61
+Discussion and Analysis
+Anti-Money Laundering
+In strict compliance with anti-money laundering ("AML") laws and regulations of China and host countries (regions) of
+overseas institutions, the Bank sincerely implemented the "risk-based" regulatory requirements in respect of AML, steadily
+fulfilled the legal obligations and social responsibilities concerning AML, and kept enhancing the Group's management level
+regarding AML and counter-terrorist financing ("CTF").
+Based on the objective to ensure legal and compliant operation, the Bank always attaches great importance to establishing
+a sound legal risk management system, forming a full-process legal risk prevention and control mechanism to support
+and secure business innovation and market competition, and to prevent and eliminate various potential or practical legal
+risks. The Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk
+management, and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for
+executing the strategy and policy relating to legal risk management, examining and approving relevant important affairs. The
+Legal Affairs Department of the Head Office is in charge of legal risk management across the Group, with relevant business
+departments providing related support and assistance on legal risk prevention and control. The affiliates, domestic and
+overseas branches undertake the responsibility of legal risk management of their respective institutions.
+Please refer to the section headed "Operational Risk" of the 2018 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for further information on operational risk capital measurement.
+Confronted with complex and severe AML environment both in and outside China, the Bank upheld a "risk-based,
+problem-based, and foundation-oriented approach with a focus on regulatory requirements", and coordinated efforts to
+promote the development of AML policies, systems and teams to shore up the Group's AML management foundation.
+The Bank continued to improve the AML management structure at the Head Office level, intensified AML assessment and
+accountability, and actively cooperated with PBC to carry out FATF mutual evaluations. AML publicity and training activities
+were launched in all areas to strengthen AML responsibility of all staff. Domestic institutions continued to deepen the
+centralized AML processing reform to increase the intelligentization of AML system, strengthened the analysis ability of
+suspicious activity report and cooperated with regulators and competent authorities in AML investigation. Key overseas
+institutions redoubled efforts to strengthen AML management capability, with more energy devoted to prevent and control
+money laundering risks in key areas and critical links, and developed a long-term AML compliance management mechanism.
+ICBC
+62
+In 2018, the Bank constantly advanced the building of the reputational risk management policies and mechanism, and
+reinforced the prevention, control and management of the reputational risk sources. It stepped up efforts to apply
+information technology in reputational risk management to promote the IT-based reputational risk management. It
+performed reputational risk management and protection of consumer rights and interests by synchronized method, actively
+responded to the comments and suggestions of the public, and continued to increase the reputational risk awareness of
+all the employees. The Bank organized a series of featured reports with greater influence for publicity to enhance its brand
+image. During the reporting period, the Bank's reputational risk was controllable with no material reputational risk event
+occurred.
+Discussion and Analysis
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the reputational risk management objective and planning, through
+the establishment and improvement of the reputational risk management system and through daily reputational risk
+management and proper handling of reputational events. Good reputation is central to the operation and management of a
+commercial bank. The Bank highly values its reputation and has incorporated reputational risk management in the corporate
+governance and enterprise risk management system to prevent reputational risk.
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+Reputational Risk
+The Board of Directors is responsible for reviewing and finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and effectiveness of reputational risk management across the Bank and
+assuming the ultimate responsibility for reputational risk management. The Senior Management is responsible for leading
+reputational risk management of the Bank, implementing the strategies and policies established by the Board of Directors,
+reviewing and finalizing the rules, measures and operating procedures for reputational risk management and the plans to
+handle extraordinarily major reputational events and ensuring the proper and effective operation of the reputational risk
+management system. The Bank has established a special reputational risk management team to take charge of the daily
+management of reputational risk.
+Security and Prudence
+Sticking to Our Founding Mission
+Leading in Innovation
+The Bank upheld and fulfilled the "customer-oriented" operating philosophy and took persistent efforts to build an efficient,
+reputed bank that provides good customer experience. It was dedicated to structuring a service hierarchy that combines
+online and offline operations, manual work and artificial intelligence as well as notification and interaction. The Bank
+endeavoured to provide more efficient, safer and more convenient financial services of better quality and become a trusted,
+reliable, user friendly and first-choice bank.
+Customers' Favourite
+Staying true to our founding mission, the Bank was determined to be rooted in the real economy. It focused on advanced
+manufacturing, cultivated happiness industries, supported connectivity of the internet of things, and served coordinated
+regional development. Moreover, it further built the inclusive financial system to serve the small and micro enterprises and
+private economy. It upheld the fundamental policy of targeted poverty relief and elimination, innovatively pushed ahead with
+poverty relief and kept enhancing its capability in this field, so as to improve the people's livelihood with financial services.
+The Bank vigorously fostered innovation culture, adhered to indigenous innovation, and strengthened protection of
+intellectual property rights. It innovated products and services and continuously strengthened innovation in management in a
+bid to become a leader and driver of the smart finance ecosystem.
+Social Responsibility
+Delivering Excellence
+Taking the social responsibility objective of "Excellence for You Excellent services to clients, Maximum returns to
+shareholders, Real success for our people, Great contribution to society", the Bank is committed to serving the common
+interests of all the stakeholders in economic and social development, promoting sustainable economic development and
+social progress, and maximizing the comprehensive economic, environmental, and social value.
+69
+Annual Report 2018
+1,729,020
+2,010,668
+Leveraging a sound corporate governance framework, the Bank promoted the transformation of operation, offered
+innovative products and services, strove to enhance profitability and risk control level, promoted the reasonable distribution
+of social resources via optimal allocation of financial resources, further stepped up efforts to build a green financial system to
+improve economic, social and ecological benefits and created superior value for all the stakeholders including shareholders,
+customers and employees as well as the society.
+The Bank upheld the corporate culture that "Integrity Leads to Prosperity", responded actively to the latest changes in
+financial regulatory requirements and market conditions, defended the bottom line of risks, fortified the lines of defense
+for compliance, pursued safe operation and sound development based on well-established policies and risk control and
+prevention, effectively protected the rights and interests of consumers and safeguarded financial security and stability.
+Mechanism for poverty relief. The Head Office's Leading Group for Poverty Relief through Finance held a meeting
+to strengthen the leadership and coordination of poverty relief work. The ICBC Work Plan for Targeted Poverty
+Relief through Finance (Version 2018), the Opinions on Effective Work on Targeted Poverty Relief and the Work
+Plan for Supervision and Inspection of Targeted Poverty Relief were formulated, and the Measures for Assessment of
+Effectiveness of Targeted Poverty Relief through Finance was issued to provide a solid policy basis for poverty relief
+work.
+ICBC
+1,631,867
+Poverty relief through education. "Prioritizing education for poverty relief" and regarding people as the biggest
+asset, the Bank was well poised to extend support to teachers, students and graduates, supported job creation,
+sponsored poor students, provided training for village teachers, and raised funds for school buildings, thus raising the
+level of poverty relief through education across the board.
+72
+Social Responsibility
+71
+Annual Report 2018
+Poverty relief through industries. The Bank took the lead to found the Alliance of Targeted Poverty Relief for a
+Beautiful Life, and put in place an ecological chain of reducing poverty through industrial development that integrates
+large banks, central media, logistical channels, operations and direct selling. The Bank leveraged on its E-commerce
+platform "ICBC Mall" to consolidate logistics, fund flows and information flows and help agricultural enterprises
+and farmers in poor areas to sell agricultural supplies and agricultural products online. In targeted areas of poverty
+relief, the Bank adhered to the industry-based poverty relief model combining ICBC, the government, the village's
+Party committee and autonomous committee, enterprises and the poor households together, and fostered a group
+of characteristic industrial projects with growing vitality and demonstration effects in strict accordance with the
+principle of targeted poverty relief. The Bank organized training sessions of "three teams" including Party committee
+secretaries, pioneers in making wealth through setting up businesses and practical scientific and technological
+professionals of poverty-stricken villages to broaden their horizons of work and enhance their ability to generate
+wealth for themselves and others.
+70
+Poverty relief through finance. The Bank sought breakthroughs mainly in credit granting, product innovation and
+service provision, etc., and deeply pushed forward anti-poverty work to cater for the financial demand of poverty
+stricken areas. The hard efforts paid off in the way of finance leveraging and promoting finance-supported targeted
+poverty relief in the new era.
+Poverty relief planning and objective. The Bank fully leveraged financial services to lift people in poor areas
+out of poverty, increased credit support to poor areas and provided good financial services for poor areas in an all-
+round way. It concentrated efforts on supporting areas of extreme poverty, helped targeted areas of poverty relief
+to integrate resources and pooled resources from all sides to assist impoverished people in improving production
+and living conditions, supported local people to meet poverty relief objectives to schedule and contributed financial
+wisdom to poverty relief.
+Targeted Poverty Relief Planning
+The Bank took poverty relief as an important part of fulfilling its social responsibilities, insisted on the basic principle
+of targeted poverty relief and elimination, established the leading group for poverty relief, and improved the poverty
+relief mechanism. It took innovative measures to make progress in the fight against poverty, kept enhancing the
+financial support and poverty relief efforts well targeted at the needs of poverty-stricken areas and made endeavors to
+play its due role in anti-poverty.
+Targeted Poverty Relief
+Adhering to the people-oriented philosophy, the Bank took "equal, open, respectful and integrated" attitudes to proactively
+optimize the employment environment, substantially protect the legitimate rights and interests of employees and care about
+their growth. At the same time, the Bank actively supported charity work, encouraged the employees to participate in
+volunteer activities, gave back to the society and fulfilled its corporate social responsibilities in multiple ways, such as helping
+the poor, the elderly and people with disabilities, and providing financial support for education.
+People-oriented
+Social Responsibility
+Summary of Targeted Poverty Relief in 2018
+1,885,349
+3,947,251
+209,554
+Securities and other financing instruments issued
+1,924,926
+1,816,041
+Intra-financial system liabilities
+1,928,002
+1,717,824
+Intra-financial system assets
+Poverty relief through healthcare. The Bank improved the local medical services and public hygiene and reduced
+the cases of local residents falling below the poverty line or returning to poverty due to illnesses, by offering free
+medical assistance and providing medical and health facilities, enabling more poor people to access basic medical
+services. For the first time, the "Lifeline Express" hospital pulled into Bazhong in Sichuan Province, and a cataract
+treatment center was also built in Bazhong.
+28,084,967
+Balance of adjusted on- and off-balance sheet assets
+2018
+Indicator
+2017
+In RMB millions
+Global Systemically Importance Assessment Indicators of Commercial Banks
+Discussion and Analysis
+29,679,878
+169,915
+3,948,878
+413,391,380
+498,644
+432,604
+Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+Level 3 assets
+Trading and available-for-sale securities
+5,600,701
+Payments settled via payment systems or correspondent banks
+7,130,990
+1,198,482
+1,266,787
+Underwritten transactions in debt and equity markets
+15,557,326
+16,301,370
+Assets under custody
+361,485,854
+Notional amount of over-the-counter (OTC) derivatives
+Targeted Poverty Relief Achievements
+Consumption-based poverty relief
+Balance of loans
+Increase/decrease
+during the
+reporting period
+Percentage
+(%)
+Unit: Share
+Number of shares
+At 31 December 2017
+DETAILS OF CHANGES IN SHARE CAPITAL
+Changes in Ordinary Shares
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+73
+Annual Report 2018
+For more details on the Bank's social responsibilities, please refer to the ICBC Corporate Social Responsibility Report 2018
+(Environment, Society and Governance) published on its official website.
+The Bank advocated green office and continuously promoted low-carbon operation, by constantly enriching the
+functions of the office IT system, actively promoting the paperless office operation, and having meetings go paperless.
+In the meantime, it took a further step to tighten the car use system, and continued to develop the diversified official
+car use system focused on self-owned cars and complemented by the commercial car service such as online car
+hailing. The Bank promoted green travel, advocated water conservation, strengthened energy consumption control,
+and carried out the voluntary tree planting initiatives constantly. With these endeavors, it improved the ecological
+environment and raised the awareness of environmental protection among its employees.
+Green and Environment Protection
+Social Responsibility
+ICBC
+At 31 December 2018
+Number of shares
+Percentage
+(%)
+I. Shares subject to
+100.00
+356,406,257,089
+III. Total number of shares
+overseas
+24.35
+86,794,044,550
+2. Foreign shares listed
+In view of the development plan of the poor regions, the Bank will coordinate targeted poverty relief through
+finance with rural revitalization and create new financial products and services for poverty relief according to local
+conditions. It will implement the poverty relief model that features the combination of finance, industry, education
+and healthcare, and push the poverty relief efforts from being driven by external forces to being driven by internal
+forces and from individual cases to collective relief. The Bank will refine the financial service channels for poor
+regions, make full use of ICBC Mall, effectively carry out poverty relief through e-commerce, and increase the supply
+of financial services in poor regions to make them more convenient and accessible. It will focus on poverty relief in
+the extremely poor regions, make overall arrangements of resources, and prioritize support to those areas with the
+greatest difficulties, poorest groups and the most urgent problems.
+ordinary shares
+269,612,212,539
+1. RMB-denominated
+100.00
+356,406,257,089
+Shares not subject to
+restrictions on sales
+II.
+restrictions on sales
+75.65
+Subsequent Targeted Poverty Relief Plan
+Note: The "targeted poverty relief" refers to the poverty relief efforts in Tongjiang County, Nanjiang County, Jinyang County and
+Wanyuan City in Sichuan Province.
+58,202
+3,071.00
+Amount of targeted poverty relief input
+171,825.00
+Rural education loan
+707,104.44
+Rural water conservancy facilities
+190,432.19
+Poverty relief through industries
+Upgrading of rural power network
+Including: Rural transport facilities
+10,626,870.94
+Loan of project targeted poverty relief
+2,909,044.98
+Including: Loan of industry targeted poverty relief
+15,594,543.84
+In RMB10,000
+5,079,545.99
+Finance-backed targeted poverty relief
+Poverty relief through education
+Poverty relief through infrastructure
+Including: Number of registered poor people
+317,932
+Including infrastructure construction, industrial development,
+education, medical care and visit to poor households
+Number of beneficiaries
+Projects
+2,794.43
+Amount of donations
+Poverty relief through healthcare
+The Group poverty relief donations apart from targeted poverty relief
+10,800.00
+Purchase of agricultural products in poor areas
+30.00
+470.00
+681.00
+1,890.00
+Assistance in selling agricultural products in poor areas
+2,584.67
+Regarding green finance strengthening as a key strategy for long-term pursuit, the Bank comprehensively carried
+forward green finance, promoted the "green adjustment" of credit structure, actively backed the development of
+green industries, reinforced the prevention and control of environmental and social risks, and strictly enforced the
+whole-process management of green credit in all aspects, e.g. policy, management process, business innovation
+and own performance. As at the end of the reporting period, the balance of domestic green credit reached
+RMB1,237,758 million, increasing by RMB138,559 million or 12.61% over the end of 2017, higher than the
+same-period growth of domestic corporate loans by about 6.6 percentage points.
+366,214,700
+356,406,257,089
+33.11
+Huijin(2)
+Beneficial owner
+123,717,852,951
+Long
+None
+34.71
+position
+Interest of
+controlled
+1,013,921,700
+Long
+0.38
+0.28
+position
+corporations
+Total
+124,731,774,651
+43.77
+46.26
+Long
+position
+Beneficial owner
+◆ Particulars of Other Corporate Shareholders Holding 10% Shares or More (Excluding HKSCC Nominees
+Limited)
+None.
+◆ Particulars of the De Facto Controller
+None.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of
+Hong Kong
+As at 31 December 2018, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+Number of
+A shares held
+Capacity
+(share)
+Nature of
+interests
+Percentage of
+A shares (3) (%)
+Percentage of
+total ordinary
+shares (3) (%)
+MOF(1)
+118,006,174,032
+The second single largest shareholder of the Bank is MOF, which held approximately 34.60% shares of the Bank as at
+31 December 2018. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal
+revenue and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+35.00
+(3)
+Long
+position
+10.03
+2.44
+National Council for
+Beneficial owner
+8,663,703,234
+Social Security Fund
+Long
+position
+9.98
+2.43
+Temasek Holdings
+(Private) Limited
+Interest of
+7,317,475,731
+Long
+8.43
+2.05
+manager
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2018, MOF held 123,316,451,864 shares in the Bank.
+(2) According to the register of shareholders of the Bank as at 31 December 2018, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+8,707,776,000
+shares (%)
+Due to rounding, percentages presented herein are for reference only.
+Annual Report 2018
+77
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+HOLDERS OF H SHARES
+Name of substantial
+shareholder
+Ping An Asset
+Management
+Co., Ltd.(1)
+Number of
+H shares held
+Percentage of
+Capacity
+(share)
+Nature of
+interests
+Percentage of
+H shares (%)
+total ordinary
+Investment
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+76
+No.
+1
+2
+Company name
+China Development Bank Corporation
+Industrial and Commercial Bank of China Limited (A; H)
+Huijin's shareholding
+percentage (%)
+34.68
+34.71
+3
+Agricultural Bank of China Limited (A; H)
+40.03
+4
+Bank of China Limited (A; H)
+64.02
+5
+China Construction Bank Corporation (A; H)
+As at 31 December 2018, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+57.11
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Ding Xuedong'. Huijin
+is a wholly-owned subsidiary of CIC. It, in accordance with authorization by the State Council, makes equity investments in
+major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the rights and perform
+the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the goal of preserving
+and enhancing the value of state-owned financial assets. Huijin does not engage in any other business activities, and does
+not intervene in the day-to-day business operations of the key state-owned financial institutions it controls.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Investment Fund of ICBC Credit
+Suisse Asset Management
+Co., Ltd.
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2018.
+(2)
+The Bank had no shares subject to restrictions on sales.
+(3)
+Central Huijin Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Both "China Life Insurance Company
+Limited Dividends Distribution Dividends Distribution to Individuals
+_
+Company Limited Traditional - Ordinary insurance products ―005L
+005LFH002 Hu" and "China Life Insurance
+CT001 Hu" are managed by China Life Insurance
+Company Limited. Save as disclosed above, the Bank is not aware of any connected relations or concert party action among the
+afore-mentioned shareholders.
+(4) HKSCC Nominees Limited held 86,151,664,334 H shares and Hong Kong Securities Clearing Company Limited held 873,150,238
+A shares.
+Particulars of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Annual Report 2018
+75
+◆ Controlling Shareholders
+6
+China Everbright Group Ltd.
+55.67
+China International Capital Corporation Limited (H)
+55.68
+15
+China Securities Co., Ltd. (A; H)
+31.21
+16
+Jiantou CITIC Asset Management Co., Ltd.
+70.00
+17
+Guotai Junan Investment Management Co., Ltd.
+14.54
+Notes: (1)
+A represents A share listed company, while H represents H share listed company.
+(2)
+On 6 June 2018, upon going through the public listing procedures of Beijing Financial Assets Exchange, Huijin and Haier Group
+(Qingdao) Financial Holdings Ltd. signed the equity transfer agreement, to transfer 398.5 million A shares of China International
+Capital Corporation Limited ("CICC") to Haier Group (Qingdao) Financial Holdings Ltd. As at the end of 2018, the relevant
+procedures were being handled. After the transfer completed, the percentage of CICC's shares directly held by Huijin will change
+to about 46.2%.
+(3) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+1 Ding Xuedong was transferred to serve as Deputy Secretary General of the State Council (Minister Level). He authorized Tu Guangshao to
+function in the capacity of Legal Representative of CIC, Chairman and Legal Representative of Huijin. The authorization came into force
+on 2 March 2017, and shall cease to be effective upon new appointment by the State Council. Tu Guangshao currently serves as Vice
+Chairman and General Manager of CIC.
+14
+22.28
+Shenwan Hongyuan Group Co., Ltd. (A)
+13
+7
+China Everbright Bank Company Limited (A; H)
+19.53
+8
+China Export & Credit Insurance Corporation
+73.63
+9
+China Reinsurance (Group) Corporation (H)
+controlled
+71.56
+New China Life Insurance Company Limited (A; H)
+31.34
+11
+China Jianyin Investment Limited
+100.00
+12
+China Galaxy Financial Holdings Company Limited
+69.07
+10
+position
+45.89
+BlackRock, Inc.
+State-owned
+Central Huijin Asset
+legal person
+None
+1,420,781,042
+0.40
+A Share
+State-owned
+Wutongshu Investment
+Co., Ltd.
+legal person
+-1,559,948,322
+None
+2,416,131,564
+0.68
+A Share
+State-owned
+China Securities Finance Co., Ltd.
+- Ordinary insurance products
+-44,000,000
+None
+3,687,330,676
+1.03
+A Share
+Other
+entities
+―
+A Share
+Ping An Life Insurance Company
+of China, Ltd. Traditional
+0.28
+None
+SSE 50 Exchange Traded
+005L CT001 Hu
+-Ordinary insurance products
+383,007,330
+None
+745,715,157
+0.21
+A Share
+Other
+entities
+Limited Traditional
+China Life Insurance Company
+―005LFH002 Hu
+Distribution to Individuals
+Distribution Dividends
+entities
+Limited Dividends
+869,042,907
+None
+1,000,845,252
+0.28
+A Share
+Other
+China Life Insurance Company
+legal person
+Management Co., Ltd.
+1,013,921,700
+Open-End Index Securities
+403,299,770
+873,150,238
+Class of
+Nature of
+shareholder
+Name of shareholder
+Shareholding
+Increase/
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+74
+As at the end of the reporting period, the Bank had a total number of 579,040 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 123,028 holders of H shares and 456,012 holders of A shares. As at
+the end of the month immediately before the results announcement date (28 February 2019), the Bank had a total number
+of 562,820 ordinary shareholders and no holders of preference shares with voting rights restored.
+Number of Shareholders and Particulars of Shareholding
+The Bank did not have any employee shares.
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 35. to the Financial
+Statements: Debt Securities Issued; Note 38. to the Financial Statements: Other Equity Instruments" for details.
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares".
+The Bank did not conduct any share issue or issue any convertible bonds during the reporting period.
+Details of Securities Issuance and Listing
+Note: "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the Content
+and Format of Information Disclosure of Companies with Public Offerings - Content and Format of the Report of Change in
+Corporate Shareholding" (Revision 2007) of CSRC.
+100.00
+356,406,257,089
+24.35
+86,794,044,550
+75.65
+269,612,212,539
+100.00
+shares
+None
+corporations
+Number of
+pledged or
+locked-up shares
+0.24
+A Share
+person
+Hong Kong Securities
+Clearing Company Limited (4)
+Foreign legal
+51,813,906
+Unknown
+86,151,664,334
+24.17
+H Share
+HKSCC Nominees Limited/
+None
+123,316,451,864
+34.60
+State-owned A Share
+MOF
+None
+123,717,852,951
+34.71
+A Share
+State-owned
+Huijin
+period
+the reporting
+decrease of
+shares during
+Total number of
+shares held
+Other
+entities
+percentage
+(%)
+0.00
+256,781,554
+Interest of
+position
+guaranteed
+interests in shares
+0.00
+0.01
+Long
+5,757,000
+Citigroup Inc.
+position
+Long
+corporations
+1,679,000
+controlled
+position
+Interest of
+1.23
+5.07
+Long
+4,397,641,191
+Short
+A Share
+0.00
+0.30
+Person holding
+controlled
+0.10
+366,214,700
+0.07
+ICBC
+78
+As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on behalf
+of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as investment
+manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by Ping An Asset
+Management Co., Ltd. for the period ended 31 December 2018 (the date of relevant event being 7 September 2018). Both
+Ping An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping An Insurance
+(Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the voting rights in
+respect of such shares on behalf of customers and independently exercise the rights of investment and business management
+in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company of China, Ltd.,
+Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as a holding
+company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities and Futures
+Ordinance of Hong Kong.
+Note: (1)
+0.02
+Short
+position
+1.22
+5.03
+0.09
+Total
+Interest of
+controlled
+corporations
+position
+corporations
+4,372,394,742
+85,975,521
+4,109,856,188
+Long
+Approved
+1.15
+lending agent
+position
+4.73
+Type of preference shares
+Dividends on the Bank's offshore preference shares are paid annually in cash, and calculated based on the aggregate
+value of the offshore preference shares. Dividends on the Bank's offshore preference shares are non-cumulative. Holders
+of offshore preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled to any
+distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore preference share issuance proposal, the Bank distributed a dividend of USD196 million,
+EUR40 million and RMB800 million on the offshore preference shares (pre-tax), aggregating to RMB2,481 million at the rate
+prevailing on the date the dividend was declared. In practice, the dividend was distributed in the currency of the preference
+share. According to relevant laws, when the Bank distributes dividends for offshore preference shares, the enterprise income
+tax shall be withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the
+offshore preference shares, the Bank will pay the relevant taxes, in addition to the dividends for offshore preference shares.
+Distribution of dividends on preference shares by the Bank in latest three years is shown as follows:
+In RMB millions, except for percentages
+Dividends on the Bank's domestic preference shares are paid annually in cash, and calculated based on the aggregate
+value of the issued domestic preference shares. Dividends on the Bank's domestic preference shares are non-cumulative.
+Holders of domestic preference shares are only entitled to dividends at the prescribed coupon rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the domestic preference share issuance proposal, the Bank distributed a dividend of RMB2,025 million on
+the domestic preference shares (pre-tax) at the coupon rate of 4.5%.
+2018
+2017
+2016
+Dividend
+rate
+6.00%
+4.50%
+Dividend
+distributed
+2,025
+Dividend
+rate
+4.50%
+Dividend
+distributed
+2,025
+Dividend
+rate
+4.50%
+Dividend
+distributed
+2,025
+Offshore preference share
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Domestic preference share
+ICBC
+China Mobile Communications
+As per the resolution and authorization of the Shareholders' General Meeting, the Bank reviewed and approved the Proposal
+on Distribution of Dividends for Preference Shares at the meeting of its Board of Directors on 30 October 2018, permitting
+the Bank to distribute the dividends on the Bank's domestic preference shares on 23 November 2018 and on the offshore
+preference shares on 10 December 2018.
+owned legal person
+preference shares
+China National Tobacco
+Other entities
+Domestic
+10,000,000
+2.2
+None
+Corporation Shandong Branch
+preference shares
+China National Tobacco
+Domestic
+10,000,000
+80
+2.2
+Corporation Heilongjiang
+Branch
+preference shares
+Ping An Property & Casualty
+Insurance Company of
+China Ltd.
+Domestic non-state-
+owned legal person
+Domestic
+preference shares
+10,000,000
+2.2
+None
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders as at 31 December 2018.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. Both "China Life Insurance Company Limited - Dividends
+Distribution Dividends Distribution to Individuals 005LFH002 Hu" and "China Life Insurance Company Limited
+Traditional Ordinary insurance products ―005L - CT001 Hu" are managed by China Life Insurance Company Limited. The
+"Ping An Life Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by Ping An Life
+Insurance Company of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance
+Company of China Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected relations
+or concert party action among the afore-mentioned preference shareholders and among the afore-mentioned preference
+shareholders and top 10 ordinary shareholders.
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares held by preference shareholders in total
+number of domestic preference shares.
+Dividend Distribution of Preference Shares
+None
+Other entities
+Gu Shu
+6.00%
+Male
+55
+February 2015-November 2021
+Mei Yingchun
+Non-executive Director
+Female
+47
+August 2017-August 2020
+Dong Shi
+Non-executive Director
+Male
+53
+August 2017-August 2020
+Ye Donghai
+Non-executive Director
+Male
+55
+October 2017-October 2020
+Hong Yongmiao
+Independent Non-executive Director
+Male
+54
+August 2012-December 2018
+Anthony Francis Neoh
+Independent Non-executive Director
+Male
+72
+April 2015-April 2021
+Yang Siu Shun
+Non-executive Director
+Zheng Fuqing
+March 2015-June 2021
+59
+2,412
+6.00%
+2,425
+Note: Dividend distributed is tax included.
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the websites of SSE, SEHK
+and the Bank.
+Redemption or Conversion of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not restore any voting right of preference share.
+Accounting Policy Adopted for Preference Shares and Rationale
+_
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 Presentation of Financial Instruments and the
+Rules for Distinguishing Financial Liabilities and Equity Instruments and Relevant Accounting Treatment (Cai Kuai [2014]
+No. 13) promulgated by MOF as well as the International Financial Reporting Standard 9 - Financial Instruments and the
+International Accounting Standard 32 ― Financial Instruments: Presentation promulgated by International Accounting
+Standards Board and other accounting standards and the key terms of issuance of the Bank's preference shares, the issued
+and existing preference shares do not contain contractual obligations to deliver cash or other financial assets or contractual
+obligations to deliver variable equity instruments for settlement, and shall be accounted for as other equity instruments.
+Annual Report 2018
+81
+2,481
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+Name
+None
+Tenure
+Position
+Gender
+Age
+Vice Chairman, Executive Director,
+Male
+51
+December 2016-December 2019
+President
+Cheng Fengchao
+Non-executive Director
+Male
+Basic Information on Directors, Supervisors and Senior Management
+3.3
+State-owned
+legal person
+Domestic
+120,000,000
+RMB offshore
+The Bank of New York
+Depository (Nominees) Limited
+Unknown
+47.9
+147,000,000
+Independent Non-executive Director
+shares
+on sales
+(%)
+the period
+period
+39.1
+Class of shares
+USD offshore
+preference shares
+pledged or
+Number of
+Number
+of shares
+subject to
+restrictions
+Shareholding
+percentage
+Shares held
+at the end of
+Increase/
+decrease
+during the
+reporting
+Nature of
+shareholder
+Foreign legal person
+Cede & Co.
+Name of shareholder
+Unit: Share
+BANK
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+locked-up
+Unknown
+preference shares
+Foreign legal person
+shares
+on sales
+locked-up
+restrictions
+Shareholding
+percentage (%)
+at the end of
+the period
+pledged or
+subject to
+Shares held
+Number of
+Number
+of shares
+Increase/
+decrease
+during the
+reporting
+period
+Class of shares
+Nature of
+shareholder
+Name of shareholder
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF THE BANK
+79
+Annual Report 2018
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+(3) The Bank is not aware of any connected relations or concert party action among the afore-mentioned preference shareholders
+and among the afore-mentioned preference shareholders and top 10 ordinary shareholders.
+(2) As the issuance of the offshore preference shares above was private offering, the register of preference shareholders presented
+the information on proxies of placees.
+Notes: (1) The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2018.
+Unknown
+13.0
+40,000,000
+EUR offshore
+preference shares
+As at the end of the reporting period, the Bank had 28 preference shareholders (or proxies), including two offshore
+preference shareholders (or proxies) and 26 domestic preference shareholders. As at the end of the month immediately
+before the results announcement date (28 February 2019), the Bank had 28 preference shareholders (or proxies), including
+two offshore preference shareholders (or proxies) and 26 domestic preference shareholders.
+15,000,000
+Changes in Preference Shares
+Issuance of Preference Shares
+None
+owned legal person
+preference shares
+CCB Trust Co., Ltd.
+Domestic
+15,000,000
+3.3
+None
+preference shares
+BOCOM Schroders Asset
+Management Co., Ltd.
+Domestic non-state-
+Domestic
+6.7
+15,000,000
+None
+owned legal person
+preference shares
+China Resources SZITIC Trust
+Co., Ltd.
+State-owned
+legal person
+Domestic
+15,000,000
+3.3
+None
+preference shares
+BOC International (China)
+Limited
+Domestic non-state-
+3.3
+30,000,000
+Domestic
+Domestic non-state-
+The Bank did not issue any preference shares in the past three years.
+Issuance and Listing of Preference Shares in Latest Three Years
+Preference Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Other entities
+Group Co., Ltd.
+Domestic
+preference shares
+200,000,000
+44.4
+None
+China National Tobacco
+Corporation
+Other entities
+Domestic
+50,000,000
+11.1
+None
+preference shares
+China Life Insurance Company
+State-owned
+Domestic
+35,000,000
+7.8
+None
+Limited
+legal person
+preference shares
+Ping An Life Insurance Company
+of China, Ltd.
+On 30 August 2018 and 21 November 2018, the Board of Directors and the Shareholders' General Meeting of the Bank
+reviewed and approved the Proposal on the Domestic Preference Share Issuance Plan of Industrial and Commercial Bank
+of China Limited and the Proposal on the Offshore Preference Share Issuance Plan of Industrial and Commercial Bank of
+China Limited. The Bank plans to issue preference shares with a total amount up to an equivalent of RMB100.0 billion
+on the domestic and offshore markets. Among which, preference shares up to RMB100.0 billion will be issued in a single
+or multiple series in the domestic market and preference shares up to an equivalent of RMB44.0 billion will be issued in
+the offshore market. The specific issuance amount will be determined within the above-mentioned limits by the Board of
+Directors as authorized by the Shareholders' General Meeting (sub-authorization is available). All the funds raised from the
+domestic and offshore issuance of preference shares after deducting the issuance costs will be used to replenish additional
+tier 1 capital of the Bank. The preference share issuance plans are still subject to the approval by relevant regulatory
+authorities.
+Male
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+April 2016-April 2019
+ICBC
+84
+Mr. Hong has served as Independent Non-executive Director of the Bank since August 2012. Mr. Hong was previously in charge
+of the National Science Fund for Distinguished Overseas Young Scholars supported by the National Science Foundation of China,
+and acted as President of the Chinese Economists Society in North America. He is currently an academician of the Academy of
+Sciences for the Developing World and a professor of Economics and International Studies at Cornell University in the United
+States. He has been enrolled as one of the first participants of the "Thousand Talents Plan" and serves as Vice Chairman of the
+Steering Committee of Economics Teaching at Institutions of Higher Learning under the Ministry of Education and Director of
+the Wang Yanan Institute for Studies in Economics and the School of Economics at Xiamen University. He is a lecture professor
+of the "Changjiang Scholars" launched by the Ministry of Education, an honorary professor of the School of Economics and
+Management at University of Chinese Academy of Sciences and a senior editor in economics for the Journal of Management
+Science and Engineering, an English magazine published by the National Natural Science Foundation of China. He is also an
+editorial board member of Economic Research Journal of the Chinese Academy of Social Sciences and an academic board member
+of China Economic Quarterly published by Peking University. He acts as Independent Non-Executive Director of Xiamen Bank Co.,
+Ltd. as well. Mr. Hong graduated from Xiamen University with a Bachelor of Science degree and a Master's degree in Economics,
+and obtained his Doctorate degree in Economics from the University of California San Diego.
+Hong Yongmiao, Independent Non-executive Director
+Mr. Ye has served as Non-executive Director of the Bank since October 2017. He joined Huijin in 2017. Previously, he served
+as Section Chief and Deputy Director General of the Finance Division of Beijing Normal University, Assistant General Manager
+(Deputy General Manager level) of the Planning and Finance Department of China Everbright Bank, Deputy General Manager
+of the Finance and Accounting Department of China Everbright Bank (in charge of the department's work), Vice President
+and member of the CPC Committee of China Everbright Bank Tianjin Branch, Deputy General Manager of the Audit
+Department of China Everbright Bank (in charge of the department's work) and General Manager of the Audit Department
+of China Everbright Bank. He served concurrently as Employee Supervisor of the Board of Supervisors of China Everbright
+Bank. Mr. Ye Donghai graduated from Renmin University of China, and obtained a Master's degree in Economics. He is a
+senior accountant.
+Ye Donghai, Non-executive Director
+Mr. Dong has served as Non-executive Director of the Bank since August 2017. He joined Huijin in 2008, and served as
+Deputy Division Chief of the Audit and Supervision Bureau of PBC, Assistant Special Inspector of the State Council, Division
+Chief of the Supervisory Committee of the Working Commission of Central Level State-Owned Enterprises, and Deputy
+Director-General of the Foreign Affairs Bureau of the State-Owned Assets Supervision and Administration Commission,
+Director of China Reinsurance (Group) Corporation and Director of China Reinsurance Asset Management Co., Ltd. and
+Non-executive Director of China Construction Bank Corporation. He currently serves as Vice Chairman and Non-executive
+Director of China Securities Co., Ltd. He made a study visit to the US Federal Reserve and Royal Melbourne Institute of
+Technology. Mr. Dong graduated from Renmin University of China and obtained a Master's degree in Economic Law. He is a
+senior economist and an accountant.
+Dong Shi, Non-executive Director
+Bank Group as Senior Advisor and worked in the Development Partner Relationship Department of the Development Finance
+Unit of the International Development Association and the Vice-President Front Office of East Asia and Pacific Region of the
+International Bank for Reconstruction and Development. Ms. Mei obtained a Master's degree in International Affairs from
+School of International and Public Affairs of Columbia University, and a PhD in Economics from Chinese Academy of Fiscal
+Science (formerly known as the Institute of Fiscal Science, MOF).
+Directors, Supervisors, Senior Management, Employees and Institutions
+83
+Directors, Supervisors, Senior Management, Employees and Institutions
+Annual Report 2018
+Mei Yingchun, Non-executive Director
+Mr. Zheng has served as Non-executive Director of the Bank since February 2015. He joined MOF in 1989, and served as
+Deputy Head and Head of the Administrative Office of Shanxi Finance Ombudsman Office, and Assistant Ombudsman
+and Associate Counsel of Shanxi Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central
+Committee of C.P.C. majoring in law theory. He is an economist.
+Zheng Fuqing, Non-executive Director
+Mr. Cheng has served as Non-executive Director of the Bank since March 2015. He joined Huijin in 2009. He served as
+Deputy Director of Finance Bureau of Pingquan County in Hebei Province, Deputy Director of Finance Office of Hebei
+Province, Head of Hebei Certified Public Accountants, Vice Chairman and Secretary of Hebei Institute of Certified Public
+Accountants, Deputy General Manager of Shijiazhuang Office, General Manager of Evaluation Management Department,
+General Manager of Tianjin Office and General Manager of Development Research Department of China Great Wall Asset
+Management Corporation, and Non-executive Director of Agricultural Bank of China Limited. He acts as tutor to PhD
+students of Hunan University, graduate supervisor for Graduate School of Chinese Academy of Social Sciences, member of
+the Expert Advisory Committee for Mergers, Acquisitions and Restructurings of CSRC and Supervisor of China Everbright
+Group Limited. He obtained a Doctorate degree in management from Hunan University. Currently, he is a researcher in
+financial science, senior accountant, PRC Certified Public Accountant and China's Certified Public Valuer.
+Cheng Fengchao, Non-executive Director
+Mr. Gu has served as Vice Chairman and Executive Director of the Bank since December 2016, and President since October
+2016. He joined ICBC in 1998, where he served as Deputy General Manager of Accounting and Settlement Department,
+Deputy General Manager of Planning and Finance Department, and General Manager of Finance and Accounting
+Department. Since July 2008, he had served as Board Secretary and General Manager of Corporate Strategy and Investor
+Relations Department of the Bank, Head of Shandong Branch and Senior Executive Vice President of the Bank. He served
+concurrently as Vice Chairman of Standard Bank Group Limited, Chairman of ICBC (London) PLC and Chairman of Industrial
+and Commercial Bank of China (Argentina) S.A. Mr. Gu obtained a Doctorate degree in Economics from Shanghai University
+of Finance and Economics, Master's degree in Economics from Dongbei University of Finance and Economics and Bachelor's
+degree in Engineering from Shanghai Jiao Tong University. He is a senior accountant.
+Gu Shu, Vice Chairman, Executive Director, President
+Biographies of Directors, Supervisors and Senior Management
+(6) Mr. Hong Yongmiao () has a former Chinese name. The full name of Mr. Nout Wellink is Arnout Henricus Elisabeth
+Maria Wellink.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period, except Mr. Zhang Hongli who
+held 2,000 H shares of the Bank, held shares or share options or were granted restricted shares of the Bank, and there was no
+change during the reporting period.
+(4) According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in the
+above table shall be the day of his/her first appointment.
+Ms. Mei has served as Non-executive Director of the Bank since August 2017. She joined MOF in 1992, and consecutively
+served in the World Bank Department, the Treasury Department and the Tariff Policy Department. Previously, she served as
+Assistant Consultant of the Budget Implementation Division of the Treasury Department of MOF, Assistant Consultant of the
+Audit & Supervision Division of the Treasury Payment Centre of MOF, Deputy Director of the Audit & Supervision Division of
+the Treasury Payment Center of MOF, Director of the Audit & Supervision Division of the Treasury Payment Center of MOF,
+Deputy Director-General of the Tariff Policy Department (Tariff Policy Research Centre) of MOF, and was seconded to World
+(3) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+Anthony Francis Neoh, Independent Non-executive Director
+Yang Siu Shun, Independent Non-executive Director
+Mr. Hu has served as Senior Executive Vice President of the Bank since November 2015. Mr. Hu joined ICBC in 1984, serving
+successively as Deputy General Manager of the Industrial and Commercial Credit Department, Deputy General Manager of
+the Credit Management Department, General Manager of the Institutional Banking Department, General Manager of the
+International Banking Department, President of Chinese Mercantile Bank and Chairman of Industrial and Commercial Bank
+of China Luxembourg S.A. Besides, he once served as Deputy Director-General of Construction and Administration Bureau
+of South-to-North Water Diversion Middle Route Project, a Director of Taiping General Insurance Company Limited, Taiping
+Life Insurance Co., Ltd. and Xiamen International Bank, General Manager of Corporate Strategy and Investor Relations
+Department and Board Secretary of the Bank. He concurrently serves as Vice Chairman of Standard Bank Group Limited and
+Chairman of ICBC (London) PLC. Mr. Hu graduated from Hunan University, and received a Doctorate degree in Economics
+from the Graduate School of the Chinese Academy of Social Sciences. He is a researcher.
+Hu Hao, Senior Executive Vice President
+Mr. Shen has served as External Supervisor of the Bank since June 2016. He previously served as the Deputy Chief of the
+Financial Market Division of the Financial System Reform Department, Chief of the System Reform Division and Monetary
+Policy Research Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China.
+Mr. Shen is currently guest professor of Tsinghua University, Zhejiang University and Nankai University. Mr. Shen graduated
+from Renmin University of China, and received a Doctorate degree in Economics. He is a research fellow.
+Shen Bingxi, External Supervisor
+Mr. Qu has served as External Supervisor of the Bank since December 2015. Currently, he is a professor and tutor for PhD
+students of Renmin University of China, Director of China Fiscal and Financial Policy Research Center (a key research center
+of humanities and social sciences of the Ministry of Education), Deputy Director of Financial and Securities Institute of Renmin
+University of China, a council member of China Finance Society, a member of China Finance 40 Forum and External Expert of
+China Development Bank. He was Head of the Applied Finance Department of the School of Finance, Renmin University of
+China. Currently, he is also External Supervisor of Bank of Beijing. Mr. Qu graduated from Renmin University of China, and
+received a Doctorate degree in Economics.
+Qu Qiang, External Supervisor
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+86
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently the chief
+responsible officer of Internal Audit Bureau of the Bank. He served as Deputy General Manager and General Manager of
+the Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC from December 1998 to June 2015.
+Mr. Huang graduated from The University of Hong Kong with an MBA degree. He is a senior economist.
+Huang Li, Employee Supervisor
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee of
+the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of People's
+Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the Technical
+Committee of the International Organization of Securities Commissions, a Non-executive Director of Global Digital Creations
+Holdings Limited. He was an Independent Non-executive Director of Link Management Limited, which is the Manager of
+Link Real Estate Investment Trust. He was also an Independent Non-executive Director of China Shenhua Energy Company
+Limited, Bank of China Limited and China Life Insurance Company Limited. Mr. Neoh currently serves as an Independent
+Non-executive Director of CITIC Limited and New China Life Insurance Company Limited. He graduated from the University
+of London with a Bachelor's degree in Law. He is Honorary Doctorate of Law of Chinese University of Hong Kong and Open
+University of Hong Kong and Honorary Doctorate of Social Sciences of Lingnan University. He was elected Honorary Fellow
+of the Hong Kong Securities Institute and Academician of the International Euro-Asian Academy of Sciences. Mr. Neoh was
+appointed as Senior Counsel in Hong Kong. He is a barrister of England and Wales. He was admitted to the State Bar of
+California.
+Mr. Hui has served as Employee Supervisor of the Bank since September 2015. He joined ICBC in 1984 and has served as
+Deputy Secretary of the Party Discipline Committee and concurrently as Director of the Discipline Enforcement Department
+of the Bank since 2015. He was Deputy Head and Head of Shaanxi Branch and General Manager of the Internal Control and
+Compliance Department of the Bank. Mr. Hui graduated from Xiamen University and received a Doctorate degree in Finance.
+He is a senior economist.
+Zhang Wei, Shareholder Supervisor
+Mr. Wellink has served as Independent Non-executive Director of the Bank since December 2018. Previously, he served
+as the Treasurer General in the Dutch Ministry of Finance, member of the Executive Board and the President of the Dutch
+Central Bank, member of the Governing Council of the European Central Bank, member of the Group of Ten Central Bank
+Governors and Governor of the International Monetary Fund, member and Chairman of the Board of Directors of the Bank
+for International Settlements, Chairman of the Basel Committee on Banking Supervision, Independent Non-executive Director
+of Bank of China Limited, Vice Chairman of Supervisory Board of PricewaterhouseCoopers Accountants N.V. and an Emeritus
+Professor at the Free University in Amsterdam. Mr. Wellink also served as member of the supervisory board of a bank, a re-
+insurance company and other enterprises on behalf of the Dutch authorities, Chairman of the Board of Supervisors of the
+Netherlands Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and the Westeinde Hospital in
+The Hague. He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of
+Orange-Nassau since 2011. He received a Master's degree in Law from Leiden University, a Doctorate degree in Economics
+from Erasmus University Rotterdam and an Honorary Doctorate from Tilburg University.
+Nout Wellink, Independent Non-executive Director
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary
+of Shanghai Pudong Development Bank. He had participated in important events in Shanghai Pudong Development Bank
+such as its initial public offering, four issues of new shares, acquisition of credit cooperative and its formation of strategic
+partnership with Citibank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA degree. He is
+a senior economist.
+Shen Si, Independent Non-executive Director
+Directors, Supervisors, Senior Management, Employees and Institutions
+85
+Annual Report 2018
+Ms. Bair has served as Independent Non-executive Director of the Bank since March 2017. Previously, she served as the
+Research Director, Deputy Counsel and Counsel to Robert Dole. She was a Commissioner of the Commodity Futures Trading
+Commission, later served as a senior vice president for government relations at the New York Stock Exchange, and then
+as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. She was President of Washington
+College, the Dean's Professor of Financial Regulatory Policy at the University of Massachusetts-Amherst, Chair of the
+Federal Deposit Insurance Corporation and Senior Advisor to The Pew Charitable Trusts. She is the current Chair Emeritus
+of the Systemic Risk Council. She is a founding board member of The Volcker Alliance, a non-profit organization. She
+is Independent Non-executive Director of Thomson Reuters Corp., Host Hotels & Resort Inc., Paxos Trust Company, LLC
+and its holding company Kabompo Holdings, Ltd. She also serves on the International Advisory Council to CBIRC and the
+International Advisory Board for Santander. She received a Bachelor's Degree in philosophy from the University of Kansas,
+and a juris doctorate from the University of Kansas School of Law. She holds honorary doctorates from Amherst College,
+Drexel University, the University of Kansas, and the University of Massachusetts.
+Sheila Colleen Bair, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region and Director and Chairman of
+Audit Committee of Hang Seng Management College. Mr. Yang currently serves as a member of the 13th National Committee
+of the Chinese People's Political Consultative Conference, a member of the Exchange Fund Advisory Committee of Hong
+Kong Monetary Authority, a member of the board of directors of the Hong Kong Jockey Club, Vice Chairman of the Council
+of the Open University of Hong Kong and an Independent Non-executive Director of the Tencent Holdings Limited. Mr. Yang
+graduated from the London School of Economics and Political Science. He is a Justice of the Peace in Hong Kong. Mr. Yang
+holds the qualification of Chartered Accountants, and is a senior member of the Institute of Chartered Accountants in England
+and Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of Management Accountants.
+Hui Ping, Employee Supervisor
+Tan Jiong, Senior Executive Vice President
+Directors, Supervisors, Senior Management, Employees and Institutions
+82
+June 2015-January 2018
+56
+Male
+Chairman of the Board of Supervisors
+Qian Wenhui
+Executive Director
+July 2013-January 2019
+54
+Male
+Chairman of the Board of Directors,
+Yi Huiman
+Zhang Hongli
+Directors, Supervisors and Senior Management Leaving Office
+55
+Male
+Board Secretary
+Guan Xueqing
+July 2016-
+56
+Male
+Chief Risk Officer
+Wang Bairong
+January 2017-
+52
+July 2016-
+ICBC
+Executive Director, Senior Executive
+53
+The terms of Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong as Executive Directors of the Bank are
+set out in the above table. Mr. Gu's term as a Senior Management member of the Bank is specified in the section headed
+"Biographies of Directors, Supervisors and Senior Management". Mr. Yi has served as a member of Senior Management,
+Senior Executive Vice President, President and Vice Chairman of the Bank since October 2005. He has served as Chairman of
+the Board of Directors of the Bank from June 2016 to January 2019. Mr. Zhang and Mr. Wang have served as Senior Executive
+Vice Presidents of the Bank since May 2010 and December 2013, respectively.
+(2)
+Notes: (1) Please refer to the section headed "Appointment and Removal".
+October 2016-September 2018
+48
+Male
+May 2012-October 2018
+69
+Male
+Independent Non-executive Director
+Senior Executive Vice President
+Li Yunze
+Male
+Or Ching Fai
+60
+Male
+Non-executive Director
+Fei Zhoulin
+December 2016-September 2018
+56
+Male
+Executive Director, Senior Executive
+Vice President
+Wang Jingdong
+Vice President
+June 2015-July 2018
+March 2015-October 2018
+Mr. Tan has served as Senior Executive Vice President of the Bank since January 2017. He joined Bank of China (BOC) in
+June 1988. He previously served as Deputy General Manager (person in charge) and General Manager of Tibet Branch, and
+General Manager of Yunnan Branch of BOC, Chairman of Bank of China Investment Management Co., Ltd. and General
+Manager of Guangdong Branch of BOC. Mr. Tan graduated from Wuhan University and obtained a Doctorate degree in
+Economics. He is a senior economist.
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of the Bank
+since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor of the Board of Supervisors, General
+Manager of the Legal Affairs Department and Chief of Consumer Protection Office of the Bank. He graduated from Peking
+University with a Doctorate degree in Law and is a research fellow.
+Mr. Wang has served as Chief Risk Officer of the Bank since July 2016. He began his career in 1986. He joined ICBC in
+1991 and previously served as Assistant to Head of Zhejiang Branch and Head of Shaoxing Branch, Deputy Head of Zhejiang
+Branch and General Manager of the Banking Department of Zhejiang Branch, and Deputy Head (person in charge) and
+Head of Chongqing Branch. Mr. Wang graduated from the Party School of the Central Committee of C.P.C. and obtained a
+Master's degree in Economics. He is a senior economist.
+Male
+54
+June 2016-June 2019
+Qu Qiang
+External Supervisor
+Male
+52
+December 2015-December 2021
+Shen Bingxi
+Employee Supervisor
+External Supervisor
+66
+June 2016-June 2019
+Hu Hao
+Senior Executive Vice President
+Wang Bairong, Chief Risk Officer
+56
+November 2015-
+Tan Jiong
+Senior Executive Vice President
+Male
+Male
+September 2015-September 2021
+Male
+Sheila Colleen Bair
+Shen Si
+Nout Wellink
+Independent Non-executive Director
+Female
+64
+March 2017–March 2020
+Independent Non-executive Director
+Male
+65
+March 2017–March 2020
+58
+Independent Non-executive Director
+75
+December 2018-December 2021
+Zhang Wei
+Hui Ping
+Huang Li
+Shareholder Supervisor
+Male
+56
+June 2016-June 2019
+Employee Supervisor
+Male
+63
+Male
+On 5 January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors of
+the Bank due to change of job assignments.
+88
+87
+Directors, Supervisors, Senior Management, Employees and Institutions
+Guan Xueqing, Board Secretary
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as Head of Suining
+Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of Frankfurt Branch,
+Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General Manager of Banking Department of Sichuan
+Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan was also General Manager of Corporate
+Strategy and Investor Relations Department of the Bank. He graduated from the Southwestern University of Finance and
+Economics and obtained a Doctorate degree in Economics. He is a senior economist.
+Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Dong Shi and Mr. Ye Donghai were recommended by
+Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders - Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Appointment and Removal
+◆ Directors
+At the Annual General Meeting for the Year 2017 held on 26 June 2018, Mr. Cheng Fengchao was elected as Non-
+executive Director of the Bank, and his new term of office as Non-executive Director started from the day of approval by
+the Annual General Meeting. At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Zheng
+Fuqing was appointed as Non-executive Director of the Bank, and Mr. Nout Wellink and Mr. Fred Zuliu Hu were appointed as
+Independent Non-executive Directors of the Bank. The term of office of Mr. Zheng Fuqing started from the day of approval
+at the Extraordinary General Meeting, the term of office of Mr. Nout Wellink started from 3 December 2018, while the
+qualification of Mr. Fred Zuliu Hu is to be approved by CBIRC.
+In July 2018, Mr. Zhang Hongli ceased to act as Executive Director of the Bank due to expiration of the term of office. In
+September 2018, Mr. Wang Jingdong ceased to act as Executive Director of the Bank due to change of job assignments. In
+October 2018, Mr. Fei Zhoulin ceased to act as Non-executive Director of the Bank citing his age. In October 2018, Mr. Or
+Ching Fai ceased to act as Independent Non-executive Director of the Bank due to expiration of the term of office. In January
+2019, Mr. Yi Huiman ceased to act as Chairman and Executive Director of the Bank due to change of job assignments.
+ICBC
+88
+On 2 July 2018, Mr. Zhang Hongli resigned from the position of Senior Executive Vice President of the Bank due to family
+reasons. On 5 September 2018, Mr. Wang Jingdong resigned from the position of Senior Executive Vice President of the
+Bank due to change of job assignments. On 6 September 2018, Mr. Li Yunze resigned from the position of Senior Executive
+Vice President of the Bank due to change of job assignments.
+◆ Senior Management Members
+Annual Report 2018
+◆ Supervisors
+At the First Employees' Congress of the Bank held on 21 September 2018, Mr. Hui Ping was appointed as Employee
+Supervisor of the Bank, and his new term of office started from the day of approval by the Employees' Congress. At the First
+Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Qu Qiang was appointed as External Supervisor of
+the Bank, and his new term of office started from 20 December 2018.
+13,414
+2019
+Unit RMB Yuan
+301,094
+276,995
+260,870
+2017
+2018
+2019
+Increment of loan to customers
+Unit: RMB100 millions
+0.86
+0.82
+Unit: RMB100 millions
+0.79
+2018
+2019
+1.43
+1.52
+1.55
+%
+Non-performing loans ratio
+2019
+Increment of personal deposits
+2017
+11,865
+11,766
+2017
+2018
+SEHK
+SSE
+State Council
+Standard Bank
+SSF
+ICBC Investments Argentina
+ICBC Leasing
+ICBC Standard Bank
+ICBC Technology
+ICBC Wealth Management
+The Bank/The Group
+ICBC-AXA
+IFRSS
+Inversora Diagonal
+MOF
+New Rules on Asset Management
+PBC
+PRC GAAP
+Securities and Futures Ordinance of
+Hong Kong
+ICBCFS
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated in June 2012
+China Banking and Insurance Regulatory Commission
+Company Law of the People's Republic of China
+2,660
+10,413
+8,675
+2017
+2018
+2019
+Capital adequacy ratio
+%
+16.77
+15.14
+15.39
+2017
+2018
+2019
+2017
+2018
+2019
+ICBC
+China Securities Regulatory Commission
+2018
+2017
+KPMG Huazhen LLP
+1,396
+香港上市公司
+The Hong Kong Corporate Governance
+Excellence Awards
+China Banking Association
+CHINA BANKING ASSOCIATION
+中国银行业协会
+for Precision Poverty Alleviation
+Best Contribution Award
+Winning the "Three Critical Battles"
+Effectiveness Award for Practicing the Belt
+and Road Initiative
+Effectiveness Award for Supporting China's
+China Council for Brand Development
+CHKLC
+Brand Finance
+Ranking the
+1st place
+BRAND-FINANCE®
+Among the Top 500 Banking
+Brands for the fourth
+consecutive year
+Ranking the
+1st place
+Fortune
+FORTUNE
+In the sub-list of commercial
+banks of the Global 500 for the
+seventh consecutive year
+Ranking the
+1st place
+Forbes
+Forbes
+Among the "Corporate Brand
+Value List" for the fourth
+consecutive year
+Global 2000 for the seventh
+consecutive year
+THE CHAMBER OF HONG KONG LISTED COMPANIES
+Best Bank in China
+27 March 2020
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.628 (pre-tax) for each
+ten shares for 2019. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2019.
+The Bank did not convert capital reserve to share capital.
+The 2019 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+The 2019 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 27 March 2020. All directors of the Bank attended the meeting.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+5
+Annual Report 2019
+*
+The Chamber of Hong Kong Listed Companies
+The Asset
+Best Asset Manager in China
+Best Bond Advisor in China
+The Asian Banker
+THE ASIAN BANKER
+亚洲银行家
+Best Mega Custodian Bank in China
+Best Mega Private Bank in China
+Best Mega Retail Bank in China
+Global Finance
+GLOBAL
+FINANCE
+Star of Precious Metals in China
+Best Corporate Bank in China
+THE Asset #
+Mr. Chen Siqing, Legal Representative of the Bank, Mr. Gu Shu, President in charge of finance of the Bank, and
+Mr. Zhang Wenwu, General Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant
+that the financial statements contained in the Annual Report are authentic, accurate and complete.
+In the
+The Banker
+ICBC Standard Bank PLC
+ICBC Financial Leasing Co., Ltd.
+ICBC Investments Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión
+ICBC Financial Asset Investment Co., Ltd.
+ICBC International Holdings Limited
+ICBC Credit Suisse Asset Management Co., Ltd.
+Industrial and Commercial Bank of China (USA) NA
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC PERU BANK
+ICBC Information and Technology Co., Ltd.
+Industrial and Commercial Bank of China (New Zealand) Limited
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Industrial and Commercial Bank of China (Macau) Limited
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC Austria Bank GmbH
+Industrial and Commercial Bank of China (Asia) Limited
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Hong Kong Exchanges and Clearing Limited
+Industrial and Commercial Bank of China Mexico S.A.
+Ranking the
+1st place
+ICBC Wealth Management Co., Ltd.
+Industrial and Commercial Bank of China Financial Services LLC
+The Banker
+consecutive year
+Banks for the seventh
+Among the Top 1000 World
+Ranking the
+1st place
+Ranking and Rewards
+ICBC
+4
+or Industrial and Commercial
+Industrial and Commercial Bank of China Limited;
+Bank of China Limited and its subsidiaries
+ICBC-AXA Assurance Co., Ltd.
+The State Council of the People's Republic of China
+National Council for Social Security Fund
+Shanghai Stock Exchange
+The Stock Exchange of Hong Kong Limited
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Accounting Standards for Business Enterprises promulgated by MOF
+The People's Bank of China
+The Guiding Opinions on Regulating the Asset Management Business of Financial
+Institutions jointly promulgated by PBC, CBIRC, CSRC and State Administration
+of Foreign Exchange in 2018 and relevant rules
+Ministry of Finance of the People's Republic of China
+Inversora Diagonal S.A.
+The International Financial Reporting Standards promulgated by the International Accounting
+Standards Board, which comprise the International Accounting Standards
+Standard Bank Group Limited
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis - Risk Management" for detailed information.
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+CITIC Securities Mansion, North Tower, Time Square Excellence II,
+8 Zhongxinsan Road, Futian District, Shenzhen City,
+Guangdong Province, China
+CITIC Securities Co., Ltd.
+31 December 2020
+618 Shangcheng Road, China (Shanghai) Pilot Free Trade Zone
+Signatory Sponsor Representatives: Jin Licheng and Zhang Yi
+Continuous Supervision Period: 16 October 2019 to
+Joint sponsor agencies for domestic preference share "I12"
+Guotai Junan Securities Co., Ltd.
+Stock code: 4604
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC EURPREF1
+Offshore Preference Share
+Stock name: I12
+Stock code: 360036
+1
+Signatory Sponsor Representatives: Sun Yi and Cheng Yue
+Continuous Supervision Period: 16 October 2019 to
+Stock code: 360011
+Shanghai Stock Exchange
+Domestic Preference Share
+Stock code: 1398
+Stock name: ICBC
+The Stock Exchange of Hong Kong Limited
+H Share
+Stock code: 601398
+Stock name: 工商銀行
+Shanghai Stock Exchange
+Place where shares are listed, and their names and codes
+A Share
+Stock name:
+Board of Directors' Office of the Bank
+31 December 2020
+Domestic Auditors
+1,556
+Unit: RMB100 millions
+Total assets
+2019
+2018
+2017
+2,875
+2,987
+3,134
+Unit: RMB100 millions
+Name and office address of Auditors
+Net fee and commission income
+Net profit
+Financial Highlights
+7
+Annual Report 2019
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong, China
+KPMG
+International Auditors
+CPAs (Practicing): Li Li and He Qi
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue,
+Dongcheng District, Beijing, China
+ICBC Investment
+Unit: RMB100 millions
+Location where copies of this annual report are kept
+Facsimile: 852-28650990
+Telephone: 852-28628555
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Guan Xueqing
+Board Secretary and Company Secretary
+Gu Shu and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong, China
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and complaint hotline: 86-95588
+Telephone: 86-10-66106114
+Facsimile: 86-10-66107571
+Postal code: 100140
+Registered address and office address
+Chen Siqing
+Legal Representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+中國工商銀行股份有限公司(“中國工商銀行")
+Legal name in Chinese
+Corporate Information
+ICBC
+6
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+E-mail: ir@icbc.com.cn
+Selected media for information disclosure
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong, China
+Computershare Hong Kong Investor Services Limited
+H Share
+Telephone: 86-4008058058
+3/F China Insurance Building, 166 Lujiazui Dong Road,
+Pudong New Area, Shanghai, China
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+A Share
+Share Registrars
+11/F, Alexandra House, Chater Road, Central, Hong Kong, China
+Linklaters
+9/F, Three Exchange Square, Central, Hong Kong, China
+Allen & Overy
+Hong Kong, China
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Haiwen & Partners
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+King & Wood Mallesons
+Mainland China
+Legal Advisors
+www.hkexnews.hk
+The "HKEXnews" website of HKEX for publication of
+the annual report in respect of H shares
+www.sse.com.cn
+Website designated by CSRC for publication of the annual
+report in respect of A shares
+1,453
+ICBC International
+Basic earnings per share
+ICBC (USA)
+.82
+Other Information Disclosed Pursuant to Regulatory Requirements
+.81
+Outlook.
+.77
+– Capital Management
+.59
+-
+Risk Management
+Business Overview
+19
+Financial Statements Analysis.
+18
+- Economic, Financial and Regulatory Environments..
+18
+Discussion and Analysis
+33
+Hot Topics in the Capital Market
+.84
+Details of Changes in Share Capital and
+List of Domestic and Overseas Branches and Offices
+144
+Auditor's Report and Financial Statements
+142
+Organizational Chart
+135
+Significant Events.
+.132
+Report of the Board of Supervisors.
+. .128
+Report of the Board of Directors..
+108
+Corporate Governance Report .
+...97
+Directors, Supervisors, Senior Management, Employees and Institutions
+.87
+Shareholding of Substantial Shareholders
+14
+.315
+President's Statement.
+Chairman's Statement
+Adherence to the technology driven and value creation: ICBC empowers operation and
+management by FinTech and creates superior value for the real economy, shareholders,
+customers, employees and society.
+Adherence to the customer first and serving the real economy: ICBC sticks to the source
+of the real economy, commits itself to meeting people's new expectations and demands for
+financial services, and makes every effort to build the No.1 Personal Bank.
+Adherence to the guidance of Party building and strict governance: ICBC adheres to and
+strengthens the Party's leadership over financial work, deepens the building of governance
+system and capacity, and improves the scientific decision-making and effectiveness of
+governance.
+Strategic Significance:
+Strategic Objective: Guided by Xi Jinping Thought on Socialism with
+Chinese Characteristics for a New Era, ICBC will adhere to the general principle
+of pursuing progress while ensuring stability, apply the new development
+philosophy, modernize its governance system and capacity, and turn ICBC into
+a world-class and modern financial enterprise with global competitiveness.
+The Bank was ranked the 1st place among the Top 1000 World Banks by The Banker, ranked 1st place in the
+Global 2000 listed by Forbes and topped the sub-list of commercial banks of the Global 500 in Fortune for the
+seventh consecutive year, and took the 1st place among the Top 500 Banking Brands of Brand Finance for the
+fourth consecutive year.
+Through its continuous endeavor and stable development, the Bank has developed into the leading bank in the
+world, possessing an excellent customer base, a diversified business structure, strong innovation capabilities
+and market competitiveness. The Bank regards service as the very foundation to seek further development
+and adheres to creating value through services while providing a comprehensive range of financial products
+and services to 8,098 thousand corporate customers and 650 million personal customers. The Bank has been
+consciously integrating the social responsibilities with its development strategy and operation and management
+activities, and gaining wide recognition in the aspects of promoting inclusive finance, supporting precision
+poverty alleviation, protecting environment and resources and participating in public welfare undertakings.
+The Bank always keeps in mind its underlying mission of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and following the business rules of commercial banks to strive to
+be a century-old bank. It also stays committed to seeking progress with innovation while maintaining stability,
+continuously enhances the development strategy of personal and corporate banking business as well as
+international and comprehensive strategy, and actively embraces the internet. The Bank advances the intelligent
+bank building in depth, unswervingly delivers specialized services, and pioneers a specialized business model,
+thus making it "a craftsman in large banking".
+Adherence to the international vision and global operation: ICBC actively utilizes domestic
+and overseas markets and resources, improves the layout and content of international
+development, and integrates it into China's new pattern of high-level opening-up.
+Industrial and Commercial Bank of China was established on 1 January 1984. On 28 October 2005, the Bank
+was wholly restructured to a joint-stock limited company. On 27 October 2006, the Bank was successfully listed
+on both Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.
+Annual Report
+2019
+EUR Preference Shares Stock Code: 4604
+Stock Code: 1398
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Œ
+ICBC
+Company Profile
+Adherence to the pragmatic transformation and reform: ICBC advances reform in key areas
+and key links in keeping pace with the times, and seeks more room for transformation and
+more vitality for reform.
+Adherence to the solid foundation by risk control and talent-oriented development: ICBC
+strengthens the bottom-line thinking, combines prevention and control, and holds onto the
+lifeline of asset quality. ICBC strengthens humanistic care and corporate culture building,
+and enhances staff cohesion.
+00
+.8
+.7
+.5
+.4
+Corporate Information
+Important Notice
+Ranking and Rewards.
+Definitions
+CONTENTS
+Integrity Leads to Prosperity
+Integrity, Humanity, Prudence,
+Innovation and Excellence
+Value
+Excellent services to clients,
+Maximum returns to shareholders
+Real success for our people, Great
+contribution to society
+Excellence for You
+Mission
+people-oriented"
+Building a world-class and modern financial
+enterprise with global competitiveness
+by adhering to the principles of
+"delivering excellence, sticking to our
+founding mission, customers'
+favorite, leading in innovation,
+security and prudence, and
+Vision
+11
+For details on the Bank's fulfillment of corporate social responsibilities, please refer to
+the 2019 Corporate Social Responsibility Report of Industrial and Commercial Bank of
+China Limited issued by the Bank on the website of SSE, the "HKEXnews" website of
+HKEX and the website of the Bank.
+Financial Highlights
+ICBC (Europe)
+ICBC (Almaty)
+ICBC (Argentina)
+ICBC (Asia)
+ICBC (Austria)
+ICBC (Brasil)
+ICBC (Canada)
+CSRC
+ICBC (Indonesia)
+ICBC (London)
+ICBC (Macau)
+ICBC (Malaysia)
+ICBC (Mexico)
+ICBC (New Zealand)
+ICBC (Peru)
+ICBC (Thai)
+ICBC (Turkey)
+Company Law
+ICBC Credit Suisse Asset Management
+Hong Kong Listing Rules
+Huijin
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+HKEX
+Bank ICBC (USC)
+Capital Regulation
+CBIRC
+Articles of Association
+legal person
+State-owned
+China Mobile Communications
+shares
+on sales
+locked-up
+Group Co., Ltd.
+Domestic
+ICBC
+Domestic
+preference shares
+200,000,000
+44.4
+None
+China National Tobacco
+Corporation
+Other entities
+Domestic
+50,000,000
+11.1
+None
+preference shares
+China Life Insurance Company
+State-owned
+restrictions
+Shareholding
+percentage (%)
+at the end
+of the period
+pledged or
+Shareholding
+percentage
+Shares held
+at the end of
+the period
+40,000,000
+EUR offshore
+preference shares
+Foreign
+legal person
+(Nominees) Limited
+The Bank of New York Depository
+Increase/
+decrease
+during the
+reporting
+period
+Class of shares
+Nature of
+shareholder
+Name of shareholder
+Unit: Share
+BANK
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+As at the end of the reporting period, the Bank had one offshore preference shareholder (or proxy) of "ICBC EURPREF1",
+26 domestic preference shareholders of "If1" and 32 domestic preference shareholders of "I12". As at the end
+of the month immediately before the annual results announcement date (29 February 2020), the Bank had one offshore
+preference shareholder (or proxy) of "ICBC EURPREF1", 26 domestic preference shareholders of "I1" and 32 domestic
+preference shareholders of "I₹2″.
+Numbers of Preference Shareholders and Particulars of Shareholdings
+The First Extraordinary General Meeting of 2018 of the Bank reviewed and approved relevant proposals on issuance of
+domestic and offshore preference shares. In March 2020, the Bank received an approval from CBIRC, consenting to the Bank's
+offshore issuance of preference shares of no more than RMB30.0 billion in equivalent USD, which will be counted as the
+additional tier 1 capital of the Bank in accordance with relevant regulatory requirements. Please refer to the announcements
+published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Issuance progress of offshore preference shares
+For issuance of domestic preference shares of the Bank, please refer to the announcements published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2019] No. 444 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2019] No. 1048, the Bank made a non-public issuance of 700 million domestic preference shares on 19
+September 2019 at a par value of RMB100 per share. The dividend rate is the benchmark interest rate plus a fixed spread,
+remaining unchanged in the first five years. Subsequently the benchmark interest rate will be reset every five years, with
+the dividend rate kept unchanged in each reset period and the fixed spread remaining constant through the duration of
+the domestic preference shares. The initial dividend rate of the afore-mentioned domestic preference shares is set at 4.2%
+through market inquiry for the first five years. With the consent of SSE by its letter Shang Zheng Han [2019] No. 1752, the
+afore-mentioned domestic preference shares issued were listed for transfer on the Comprehensive Business Platform of SSE
+on 16 October 2019 with the stock name "2" and stock code 360036. Proceeds of the afore-mentioned domestic
+preference shares totaled RMB70.0 billion, all of which was replenished to the additional tier 1 capital of the Bank after
+deduction of issuance expenses.
+Issuance of "I¼ 2″
+Issuance and Listing of Preference Shares in Latest Three Years
+Number
+of shares
+subject to
+restrictions
+Number of
+pledged or
+(%)
+subject to
+Shares held
+Number of
+Number
+of shares
+Increase/
+decrease
+during the
+reporting
+period
+Class of shares
+shareholder
+Name of shareholder
+Nature of
+Unit: Share
+Domestic
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I1″
+ICBC
+92
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+(3) The Bank is not aware of any connected relations or concert party action between the afore-mentioned preference shareholder
+and top 10 ordinary shareholders.
+(2) As the issuance of the offshore preference shares above was private offering, the register of preference shareholders presented
+the information on proxies of placees.
+Notes: (1) The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2019.
+locked-up
+shares
+Unknown
+on sales
+100.0
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+35,000,000
+CCB Trust Co., Ltd.
+None
+None
+owned legal person
+preference shares
+China National Tobacco
+Other entities
+Domestic
+10,000,000
+2.2
+None
+Corporation Shandong Branch
+preference shares
+China National Tobacco
+Corporation Heilongjiang
+Branch
+Other entities
+Domestic
+I
+10,000,000
+3.3
+Domestic
+preference shares
+None
+3.3
+3.3
+None
+owned legal person
+preference shares
+China Resources SZITIC Trust
+Co., Ltd.
+BOC International (China)
+Co., Ltd.
+State-owned
+legal person
+Domestic non-state-
+Domestic
+15,000,000
+3.3
+None
+preference shares
+15,000,000
+2.2
+None
+preference shares
+Domestic
+State-owned
+legal person
+Domestic non-state-
+BOCOM Schroders Asset
+Management Co., Ltd.
+15,000,000
+preference shares
+owned legal person
+None
+6.7
+30,000,000
+Domestic
+Domestic non-state-
+Ping An Life Insurance Company
+of China, Ltd.
+preference shares
+legal person
+Limited
+of shares
+Number
+Increase/
+decrease
+during the
+Unit: Share
+Ping An Property & Casualty
+Insurance Company of
+China Ltd.
+Domestic non-state-
+owned legal person
+Domestic
+preference shares
+10,000,000
+2.2
+None
+7.8
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "I" as at 31 December 2019.
+(2)
+China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance Company Limited - Traditional —
+Ordinary insurance products ―005LCT001 Hu" is managed by China Life Insurance Company Limited. The "Ping An Life
+Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by Ping An Life Insurance Company
+of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China
+Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected relations or concert party action
+among the afore-mentioned preference shareholders and among the afore-mentioned preference shareholders and top 10
+ordinary shareholders.
+15,000,000
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "1" held by preference shareholders
+in total number (450 million shares) of domestic preference shares of "11".
+Annual Report 2019
+93
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I"
+Preference Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+2.43
+Annual Report 2019
+Beneficial owner
+Huijin(2)
+33.11
+43.77
+Long
+position
+118,006,174,032
+Percentage of
+total ordinary
+shares (3) (%)
+Percentage of
+A shares (3) (%)
+Nature of
+interests
+(share)
+Capacity
+Beneficial owner
+MOF(1)
+shareholder
+Number of
+A shares held
+Name of substantial
+123,717,852,951
+Interest of
+controlled
+1,013,921,700
+Long
+position
+Long
+position
+HOLDERS OF H SHARES
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+90
+(3) Due to rounding, percentages presented herein are for reference only.
+(2) According to the register of shareholders of the Bank as at 31 December 2019, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2019, MOF held 110,984,806,678 shares in the Bank.
+HOLDERS OF A SHARES
+35.00
+124,731,774,651
+Total
+corporations
+0.28
+0.38
+34.71
+45.89
+46.26
+Name of substantial
+As at 31 December 2019, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+None.
+China International Capital Corporation Limited (H)
+15
+Securities
+31.34%
+New China Life Insurance Company Limited (A; H)
+14
+71.56%
+China Reinsurance (Group) Corporation (H)
+13
+73.63%
+China Export & Credit Insurance Corporation
+12
+Insurance
+20.05%
+Shenwan Hongyuan Group Co., Ltd. (A; H)
+44.32%
+16
+China Securities Co., Ltd. (A; H)
+31.21%
+Particulars of the De Facto Controller
+SSF. SSF owned 5.72% of the shares of the Bank as at 31 December 2019. Founded in August 2000, SSF is a public service
+institution administered by MOF, having its address at South Tower, building 11, Fenghuiyuan Fenghui Times Building,
+Xicheng District, Beijing, China, and its legal representative being Liu Wei. With the approval of the State Council and
+pursuant to regulations of MOF and the Ministry of Human Resources and Social Security, SSF has been entrusted to manage
+the following funds: the National Social Security Fund, the subsidy from central government to enterprise employee's
+basic pension individual accounts, part of the surplus of the enterprise employee's basic pension insurance, basic pension
+insurance fund and the partial state-owned capital transferred.
+Particulars of Other Substantial Shareholders (Excluding HKSCC Nominees Limited)
+The second single largest shareholder of the Bank is MOF, which held approximately 31.14% shares of the Bank as at 31
+December 2019. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+89
+Annual Report 2019
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of
+Hong Kong
+(2) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+14.54%
+Guotai Junan Investment Management Co., Ltd.
+18
+70.00%
+Jiantou CITIC Asset Management Co., Ltd.
+17
+Others
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+91
+shareholder
+Management
+5.00
+Long
+4,339,733,586
+Approved lending
+corporations
+position
+controlled
+0.05
+0.22
+Long
+188,009,339
+Interest of
+position
+guaranteed
+interests in shares
+0.00
+1.22
+agent
+position
+Total
+Due to rounding, percentages presented herein are for reference only.
+(3)
+(2) According to the Simplified Report of Changes in Equity provided by SSF to the Bank on 9 January 2020, SSF held 8,037,177,174
+H shares of the Bank.
+As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on behalf
+of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as investment
+manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by Ping An Asset
+Management Co., Ltd. for the period ended 31 December 2019 (the date of relevant event being 12 June 2019). Both Ping
+An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping An Insurance
+(Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the voting rights in
+respect of such shares on behalf of customers and independently exercise the rights of investment and business management
+in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company of China, Ltd.,
+Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as a holding
+company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities and Futures
+Ordinance of Hong Kong.
+Notes: (1)
+corporations
+position
+0.00
+controlled
+0.05
+Short
+39,542,670
+Interest of
+1.27
+5.22
+4,530,282,653
+0.01
+Ping An Asset
+Long
+Person holding
+14.02
+Long
+position
+manager
+12,168,809,000
+Investment
+shares (3) (%)
+H shares (3) (%)
+total ordinary
+Percentage of
+Nature of
+interests
+(share)
+Capacity
+H shares held
+Percentage of
+Number of
+3.41
+Co., Ltd.(1)
+SSF(2)
+Beneficial owner
+corporations
+Citigroup Inc.
+position
+controlled
+(Private) Limited
+2.05
+8.43
+2,539,728
+Long
+Interest of
+Temasek Holdings
+position
+Number of
+9.98
+Long
+8,663,703,234
+7,317,475,731
+Shares held
+None
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+1966
+Male
+Executive Director, Senior Executive
+Cheng Fengchao
+Tan Jiong
+Vice President
+June 2019-February 2020
+1962
+Male
+Executive Director, Senior Executive
+Hu Hao
+1964 July 2013-January 2019
+Male
+Chairman of the Board of Directors,
+Executive Director
+Yi Huiman
+June 2019-September 2019
+Directors and Senior Management Leaving Office
+Vice President
+Male
+Male
+Independent Non-executive Director
+Hong Yongmiao
+August 2017-February 2020
+1965
+Male
+Non-executive Director
+Dong Shi
+October 2017-March 2020
+1963
+Male
+Non-executive Director
+Ye Donghai
+March 2015-April 2019
+1959
+Non-executive Director
+July 2016-
+1963
+Male
+External Supervisor
+Shen Bingxi
+December 2015-December 2021
+1966
+Male
+External Supervisor
+June 2016-June 2022
+1964
+Male
+Employee Supervisor
+September 2015-September 2021
+1960
+Male
+Employee Supervisor
+June 2016-June 2022
+Male
+1952
+June 2016-June 2022
+Liao Lin
+Board Secretary
+Guan Xueqing
+July 2016-
+1962
+Male
+Chief Risk Officer
+Wang Bairong
+1964
+March 2020-
+Male
+Senior Management member
+Wang Jingwu
+November 2019-
+1966
+Male
+Senior Executive Vice President
+1966
+August 2012-April 2019
+Annual Report 2019
+97
+4.50%
+Dividend
+distributed
+Dividend
+rate
+Dividend
+distributed
+2,025
+Dividend
+rate
+4.50%
+Dividend
+distributed
+2,025
+4.50%
+Domestic preference share
+rate
+Type of preference shares
+Dividend
+2017
+2018
+2019
+In RMB millions, except for percentages
+2,025
+“工行優1”
+Offshore preference share
+6.00%
+Accounting Policy Adopted for Preference Shares and Rationale
+During the reporting period, the Bank did not restore any voting right of preference share.
+Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not convert any preference share.
+In 2014, the Bank issued USD2.94 billion USD Preference Shares and RMB12.0 billion RMB Preference Shares in the offshore
+market. On 29 August 2019, the Board of Directors of the Bank considered and approved the Proposal on Exercising the
+Redemption Right of the Offshore Preference Shares. The Bank proposes to exercise the redemption right of all of the
+afore-mentioned offshore preference shares on 10 December 2019, under the condition that the approval from CBIRC is
+obtained. In October 2019, the Bank received a reply letter from CBIRC, pursuant to which, no objections were raised to
+the Bank's redeeming USD2.94 billion USD Preference Shares and RMB12.0 billion RMB Preference Shares. Pursuant to the
+terms and conditions of the Offshore Preference Shares and the reply letter from CBIRC, the Bank redeemed the afore-
+mentioned USD Preference Shares and the RMB Preference Shares in whole on 10 December 2019 (the "Redemption Date")
+at the respective redemption price of each USD Preference Share and each RMB Preference Share (being the aggregate of
+an amount equal to the liquidation preference of each Offshore Preference Share plus any dividends accrued but unpaid
+in respect of the period from (and including) the immediately preceding dividend payment date to (but excluding) the
+Redemption Date. Subsequent to the redemption and cancellation of the afore-mentioned USD Preference Shares and RMB
+Preference Shares on the Redemption Date, there are no USD Preference Shares or RMB Preference Shares issued in the
+offshore market. For further details, please refer to the announcements published by the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+Redemption or Conversion of Preference Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+DIVIDEND DISTRIBUTION OF PREFERENCE SHARES IN LATEST THREE YEARS
+95
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+Note: Dividend distributed is tax included.
+2,412
+6.00%
+2,481
+6.00%
+2,500
+Annual Report 2019
+1962
+Dividends on the Bank's offshore preference shares are paid annually in cash, and calculated based on the aggregate
+value of the offshore preference shares. Dividends on the Bank's offshore preference shares are non-cumulative. Holders
+of offshore preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled to any
+distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore preference share issuance proposal, the Bank distributed a dividend of USD196 million,
+EURO.04 billion and RMBO.8 billion on the offshore preference shares (pre-tax), aggregating to RMB2,500 million at the rate
+prevailing on the date the dividend was declared. In practice, the dividend was distributed in the currency of the preference
+share. According to relevant laws, when the Bank distributes dividends for offshore preference shares, the enterprise income
+tax shall be withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the
+offshore preference shares, the Bank will pay the relevant taxes, in addition to the dividends for offshore preference shares.
+During the reporting period, the Bank did not distribute any dividend on domestic preference shares "I₹2″.
+As per the resolution and authorization of the Shareholders' General Meeting, the Bank reviewed and approved the Proposal
+on Distribution of Dividends for Preference Shares at the meeting of its Board of Directors on 25 October 2019, permitting
+the Bank to distribute the dividends on the Bank's domestic preference shares "1" on 25 November 2019 and on the
+offshore preference shares on 10 December 2019.
+11
+ICBC
+98
+Mr. Gu has served as Vice Chairman and Executive Director of the Bank since December 2016, and President since October
+2016. He joined ICBC in 1998, where he served as Deputy General Manager of Accounting and Settlement Department,
+Deputy General Manager of Planning and Finance Department, and General Manager of Finance and Accounting
+Department. Since July 2008, he had served as Board Secretary and General Manager of Corporate Strategy and Investor
+Relations Department of the Bank, Head of Shandong Branch and Senior Executive Vice President of the Bank. He served
+concurrently as Vice Chairman of Standard Bank Group Limited, Chairman of ICBC (London) PLC and Chairman of Industrial
+and Commercial Bank of China (Argentina) S.A. Mr. Gu obtained a Doctorate degree in Economics from Shanghai University
+of Finance and Economics, Master's degree in Economics from Dongbei University of Finance and Economics and Bachelor's
+degree in Engineering from Shanghai Jiao Tong University. He is a senior accountant.
+Gu Shu, Vice Chairman, Executive Director, President
+Mr. Chen has served as Chairman and Executive Director of the Bank since May 2019. He joined Bank of China in 1990. Mr.
+Chen Siqing previously worked in the Hunan Branch of Bank of China before he was dispatched to the Hong Kong Branch
+of China and South Sea Bank Ltd. as Assistant General Manager. Mr. Chen held various positions in Bank of China, including
+Assistant General Manager and Vice General Manager of the Fujian Branch, General Manager of the Risk Management
+Department of the Head Office, General Manager of the Guangdong Branch, Executive Vice President, President, Vice
+Chairman and Chairman of Bank of China. Mr. Chen served concurrently as Chairman of the Board of Directors of BOC
+Aviation Limited, Non-executive Director, Vice Chairman and Chairman of the Board of Directors of BOC Hong Kong
+(Holdings) Limited. Mr. Chen graduated from Hubei Institute of Finance and Economics, and obtained a Master's degree in
+Business Administration (MBA) from Murdoch University, Australia later. He is a Certified Public Accountant and a senior
+economist.
+Chen Siqing, Chairman, Executive Director
+Biographies of Directors, Supervisors and Senior Management
+(6) The full name of Mr. Nout Wellink is Arnout Henricus Elisabeth Maria Wellink. Mr. Hong Yongmiao () has a former
+Chinese name 洪永妙.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period held shares or share options or
+were granted restricted shares of the Bank, and there was no change during the reporting period.
+(4) According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in the
+above table shall be the day of his/her first appointment.
+(3) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+(2) The term of Mr. Gu Shu as Executive Director of the Bank is set out in the above table. Please refer to the section headed
+"Biographies of Directors, Supervisors and Senior Management" for the starting time of his term as a Senior Management
+member of the Bank. Mr. Yi Huiman served as a member of Senior Management, Senior Executive Vice President, President,
+Executive Director, Vice Chairman and Chairman of the Bank from October 2005 to January 2019. Mr. Hu Hao served as Board
+Secretary, Senior Executive Vice President and Executive Director from December 2010 to February 2020. Mr. Tan Jiong served as
+Senior Executive Vice President and Executive Director of the Bank from January 2017 to September 2019.
+Notes: (1) Please refer to the section headed "Appointment and Removal".
+Directors, Supervisors, Senior Management, Employees and Institutions
+20,000,000
+2.9
+None
+preference shares
+Dividend Distribution of Preference Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+94
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "2" held by preference shareholders
+in total number (700 million shares) of domestic preference shares of "12".
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "I12" as at 31 December 2019.
+(2) Shanghai Tobacco Group Co., Ltd., China National Tobacco Corporation Shandong Branch and China National Tobacco
+Corporation Heilongjiang Branch are all wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance
+Company Limited - Traditional - Ordinary insurance products 005L CT001 Hu" is managed by China Life Insurance
+Company Limited. The "Ping An Life Insurance Company of China, Ltd. - Traditional — Ordinary insurance products" is
+managed by Ping An Life Insurance Company of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An
+Property & Casualty Insurance Company of China Ltd. have connected relations. Save as disclosed above, the Bank is not aware
+of any connected relations or concert party action among the afore-mentioned preference shareholders and among the afore-
+mentioned preference shareholders and top 10 ordinary shareholders.
+None
+Dividends on the Bank's domestic preference shares "1" are paid annually in cash, and calculated based on the
+aggregate value of the issued domestic preference shares. Dividends on the Bank's domestic preference shares are non-
+cumulative. Holders of domestic preference shares are only entitled to dividends at the prescribed dividend rate, but are not
+entitled to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the
+dividend distribution plan in the domestic preference share issuance proposal, the Bank distributed a dividend of RMB2,025
+million on the domestic preference shares (pre-tax) at the dividend rate of 4.5%.
+2.1
+15,000,000
+preference shares
+Domestic
+preference shares
+None
+2.1
+15,000,000
+15,000,000
+Domestic
+15,000,000
+Male
+Shareholder Supervisor
+Qu Qiang
+China National Tobacco
+Corporation
+Shanghai Tobacco Group
+Co., Ltd.
+preference shares
+10.0
+70,000,000
+70,000,000
+Domestic
+State-owned
+legal person
+CCB Trust Co., Ltd.
+None
+10.0
+70,000,000
+70,000,000
+Domestic
+preference shares
+owned legal person
+Domestic non-state-
+Other entities
+Domestic
+50,000,000
+50,000,000
+Basic Information on Directors, Supervisors and Senior Management
+20,000,000
+Domestic
+Domestic non-state-
+owned legal person
+Domestic non-state-
+owned legal person
+Domestic non-state-
+owned legal person
+BOCOM Schroders Asset
+Management Co., Ltd.
+Ping An Property & Casualty
+Insurance Company of
+China Ltd.
+Bank of Beijing Co., Ltd.
+preference shares
+BOC International (China)
+Co., Ltd.
+None
+30,000,000
+30,000,000
+Domestic
+Other entities
+preference shares
+None
+7.1
+4.3
+Birth
+preference shares
+14.3
+Co., Limited
+Bosera Asset Management
+shares
+on sales
+locked-up
+restrictions
+Shareholding
+percentage (%)
+at the end
+of the period
+period
+Class of shares
+shareholder
+Name of shareholder
+reporting
+Nature of
+pledged or
+State-owned
+legal person
+Domestic
+preference shares
+150,000,000
+150,000,000
+100,000,000
+100,000,000
+Domestic
+State-owned
+legal person
+China Mobile Communications
+Group Co., Ltd.
+preference shares
+legal person
+None
+None
+120,000,000
+120,000,000
+Domestic
+State-owned
+China Life Insurance Company
+Limited
+None
+21.4
+17.1
+subject to
+Name
+Gender
+Independent Non-executive Director
+Sheila Colleen Bair
+April 2016-June 2022
+1955
+Male
+Independent Non-executive Director
+Yang Siu Shun
+April 2015-April 2021
+1946
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+January 2020-January 2023
+1971
+Female
+Female
+1954
+March 2017–March 2020
+Shen Si
+Hui Ping
+Huang Li
+Zhang Wei
+April 2019-April 2022
+1963
+Male
+Independent Non-executive Director
+Fred Zuliu Hu
+Non-executive Director
+December 2018-December 2021
+Male
+Independent Non-executive Director
+Nout Wellink
+March 2017–March 2020
+1953
+Male
+Independent Non-executive Director
+1943
+Position
+Cao Liqun
+1964
+Male
+Chairman of the Board of Supervisors
+Yang Guozhong
+President
+December 2016-November 2022
+1967
+Male
+Vice Chairman, Executive Director,
+May 2019-May 2022
+1960
+Male
+Chairman, Executive Director
+Chen Siqing
+Gu Shu
+Tenure
+year
+1963
+January 2020-January 2023
+Zheng Fuqing
+Non-executive Director
+Male
+Non-executive Director
+August 2019-August 2022
+1967
+Male
+Non-executive Director
+Feng Weidong
+January 2020-January 2023
+Lu Yongzhen
+1971
+Female
+Non-executive Director
+Mei Yingchun
+February 2015-November 2021
+1963
+Male
+August 2017–August 2020
+69.07%
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments promulgated
+by MOF as well as the International Financial Reporting Standard 9 ― Financial Instruments and the International Accounting
+Standard 32 Financial Instruments: Presentation promulgated by International Accounting Standards Board and other
+accounting standards and the key terms of issuance of the Bank's preference shares, the issued and existing preference
+shares do not contain contractual obligations to deliver cash or other financial assets or contractual obligations to deliver
+variable equity instruments for settlement, and shall be accounted for as other equity instruments.
+10
+34.71%
+Industrial and Commercial Bank of China (A; H)
+2
+34.68%
+China Development Bank Corporation
+1
+Company name
+No.
+3
+Type of company
+Banks
+As at 31 December 2019, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Peng Chun. Huijin is a
+wholly-owned subsidiary of China Investment Corporation. It, in accordance with authorization by the State Council, makes
+equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the
+rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the
+goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other business
+activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions it
+controls.
+96
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Particulars of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Controlling Shareholders
+China Galaxy Financial Holdings Company Limited
+Huijin's shareholding
+Agricultural Bank of China Limited (A; H)
+percentage
+4
+9
+China Everbright Group Ltd.
+China Jianyin Investment Limited
+100.00%
+40.03%
+8
+institutions
+53.95%
+Hengfeng Bank Co., Ltd.
+Comprehensive
+19.53%
+China Everbright Bank Company Limited (A; H)
+6
+57.11%
+China Construction Bank Corporation (A; H)
+5
+64.02%
+Bank of China Limited (A; H)
+7
+55.67%
+Northeastern China
+20.3
+90,278
+22.2
+Senior Management Members
+On 22 November 2019, the Board of Directors appointed Mr. Liao Lin as Senior Executive Vice President of the Bank. On
+18 February 2020, the Board of Directors appointed Ms. Xiong Yan and Mr. Song Jianhua as Chief Business Officers of the
+Bank, and their qualifications are to be approved by CBIRC. On 27 March 2020, the Board of Directors appointed Mr. Wang
+Jingwu as Senior Executive Vice President of the Bank, and his qualification is to be approved by CBIRC.
+employer to social
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Annual Remuneration
+Remuneration from the Bank
+Contribution by the
+Unit: RMB10,000
+Name
+Remuneration
+paid
+1,140,631
+104
+3.8
+Total
+9.8
+100.0
+16,605
+100.0
+30,109,436
+(before tax)
+undistributed assets
+(24.2)
+(7,268,303)
+1,631
+Eliminated and
+22,723
+3.4
+560
+13.2
+3,971,298
+Overseas and others
+10.2
+45,282
+5.1
+(1)
+8.39
+allowance,
+Yang Guozhong
+Zheng Fuqing
+Mei Yingchun
+46.99
+No
+70.72
+No
+No
+12.82
+Yes
+Lu Yongzhen
+Feng Weidong
+Cao Liqun
+Anthony Francis Neoh
+Yang Siu Shun
+Sheila Colleen Bair
+Yes
+Yes
+Yes
+insurance, housing
+57.90
+445,106
+annuities, and
+additional medical
+Obtain
+remuneration from
+Other
+monetary
+Total
+insurances
+Fees
+Gu Shu
+income
+shareholder entities
+or other related
+parties or not
+(2)
+(3)
+(4)
+(5)=(1)+(2)+(3)+(4)
+Chen Siqing
+38.60
+remuneration
+before tax
+100.0
+Audit Committee
+Annual Report 2019
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently the
+Director of the Inspection Office of the Party Committee of the Bank. He served as Deputy General Manager and General
+Manager of the Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC. Mr. Huang graduated
+from The University of Hong Kong with an MBA degree. He is a senior economist.
+Qu Qiang, External Supervisor
+Mr. Qu has served as External Supervisor of the Bank since December 2015. Currently, he is a professor and tutor for PhD
+students of Renmin University of China, Director of China Fiscal and Financial Policy Research Center (a key research center
+of humanities and social sciences of the Ministry of Education), Deputy Director of Financial and Securities Institute of
+Renmin University of China, a council member of China Finance Society, a member of China Finance 40 Forum and External
+Expert of China Development Bank. He was Head of the Applied Finance Department of the School of Finance, Renmin
+University of China. Currently, he is also External Supervisor of Bank of Beijing. Mr. Qu graduated from Renmin University of
+China, and received a Doctorate degree in Economics.
+102
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Shen Bingxi, External Supervisor
+Mr. Shen has served as External Supervisor of the Bank since June 2016. He previously served as the Deputy Chief of the
+Financial Market Division of the Financial System Reform Department, Chief of the System Reform Division and Monetary
+Policy Research Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China. Mr.
+Shen is currently guest professor of Tsinghua University, Zhejiang University and Nankai University. Mr. Shen graduated from
+Renmin University of China, and received a Doctorate degree in Economics. He is a research fellow.
+Huang Li, Employee Supervisor
+Liao Lin, Senior Executive Vice President
+Wang Jingwu, Senior Management Member
+Mr. Wang has served as a Senior Management member of the Bank since March 2020. He joined PBC in August 1985, and
+has successively served as Supervision Commissioner (Deputy Director level) of PBC Shijiazhuang Central Sub-branch, Head
+of PBC Shijiazhuang Central Sub-branch and concurrently Director of State Administration of Foreign Exchange (SAFE) Hebei
+Branch, Head of PBC Hohhot Central Sub-branch and concurrently Director of SAFE Inner Mongolia Branch, Head of PBC
+Guangzhou Branch and concurrently Director of SAFE Guangdong Branch, and Director-General of PBC Financial Stability
+Bureau since January 2002. Mr. Wang graduated from the Hebei Banking School, and afterwards he received a doctorate
+degree in economics from Xi'an Jiaotong University. He is a research fellow.
+Wang Bairong, Chief Risk Officer
+Mr. Wang has served as Chief Risk Officer of the Bank since July 2016. He began his career in 1986. He joined ICBC in
+1991 and previously served as Assistant to Head of Zhejiang Branch and Head of Shaoxing Branch, Deputy Head of Zhejiang
+Branch and General Manager of the Banking Department of Zhejiang Branch, and Deputy Head (person in charge) and
+Head of Chongqing Branch. Mr. Wang graduated from the Party School of the Central Committee of C.P.C. and obtained a
+Master's degree in Economics. He is a senior economist.
+Guan Xueqing, Board Secretary
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as Head of Suining
+Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of Frankfurt Branch,
+Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General Manager of Banking Department of Sichuan
+Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan was also General Manager of Corporate
+Strategy and Investor Relations Department of the Bank. He graduated from the Southwestern University of Finance and
+Economics and obtained a Doctorate degree in Economics. He is a senior economist.
+Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Lu Yongzhen, Mr. Feng Weidong and Ms. Cao Liqun were recommended by
+Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders — - Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+Annual Report 2019
+Mr. Liao has served as Senior Executive Vice President of the Bank since November 2019. Mr. Liao joined China Construction
+Bank in July 1989, and was appointed as deputy general manager of Guangxi Branch of China Construction Bank in
+November 2003. Mr. Liao served consecutively as general manager of Ningxia Branch, Hubei Branch and Beijing Branch
+of China Construction Bank since April 2011. Mr. Liao was appointed as Chief Risk Officer of China Construction Bank
+in March 2017, and served as Executive Vice President of China Construction Bank from September 2018 to November
+2019 (concurrently served as Chief Risk Officer of China Construction Bank from September 2018 to May 2019). Mr. Liao
+graduated from Guangxi Agricultural University. He obtained a Doctorate degree in management science from Southwest
+Jiaotong University. Mr. Liao is a senior economist.
+103
+Mr. Hui has served as Employee Supervisor of the Bank since September 2015. He joined ICBC in 1984 and has served as
+deputy head of the discipline inspection and supervision group dispatched to ICBC by the CPC Central Commission for
+Disciplinary Inspection and the State Committee of Supervisory since 2019. He was Deputy Head and Head of Shaanxi
+Branch and General Manager of the Internal Control and Compliance Department of the Bank, Deputy Secretary of the Party
+Discipline Committee and Director of the Discipline Enforcement Department of the Bank. Mr. Hui graduated from Xiamen
+University and received a Doctorate degree in Finance. He is a senior economist.
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of the Bank
+since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor of the Board of Supervisors, General
+Manager of the Legal Affairs Department and Chief of Consumer Protection Office of the Bank. He graduated from Peking
+University with a Doctorate degree in Law and is a research fellow.
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee of
+the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of People's
+Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the Technical
+Committee of the International Organization of Securities Commissions, a Non-executive Director of Global Digital Creations
+Holdings Limited. He was an Independent Non-executive Director of Link Management Limited, which is the Manager of
+Link Real Estate Investment Trust. He was also an Independent Non-executive Director of China Shenhua Energy Company
+Limited, Bank of China Limited, China Life Insurance Company Limited and New China Life Insurance Company Ltd. Mr.
+Neoh currently serves as an Independent Non-executive Director of CITIC Limited and Chairman of Hong Kong Independent
+Police Complaints Council. He graduated from the University of London with a Bachelor's degree in Law. He is Honorary
+Doctorate of Law of Chinese University of Hong Kong and Open University of Hong Kong and Honorary Doctorate of Social
+Sciences of Lingnan University. He was elected Honorary Fellow of the Hong Kong Securities Institute and Academician
+of the International Euro-Asian Academy of Sciences. Mr. Neoh was appointed as Senior Counsel in Hong Kong. He is a
+barrister of England and Wales. He was admitted to the State Bar of California.
+100
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Yang Siu Shun, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region, Director and Chairman
+of Audit Committee of Hang Seng Management College and Vice Chairman of the Council of the Open University of Hong
+Kong. Mr. Yang currently serves as a member of the 13th National Committee of the Chinese People's Political Consultative
+Conference, a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority, a member of the board
+of directors of the Hong Kong Jockey Club and an Independent Non-executive Director of the Tencent Holdings Limited.
+Mr. Yang graduated from the London School of Economics and Political Science. He was awarded the degree of Honorary
+Doctor of Social Sciences by The Open University of Hong Kong. He is a Justice of the Peace in Hong Kong. Mr. Yang holds
+the qualification of Chartered Accountants, and is a senior member of the Institute of Chartered Accountants in England and
+Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of Management Accountants.
+Sheila Colleen Bair, Independent Non-executive Director
+Ms. Bair has served as Independent Non-executive Director of the Bank since March 2017. Previously, she served as the
+Research Director, Deputy Counsel and Counsel to Robert Dole. She was a Commissioner of the Commodity Futures Trading
+Commission, later served as a senior vice president for government relations at the New York Stock Exchange, and then as
+Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. She was President of Washington College,
+the Dean's Professor of Financial Regulatory Policy at the University of Massachusetts-Amherst, Chair of the Federal Deposit
+Insurance Corporation and Senior Advisor to The Pew Charitable Trusts. She is the current Chair Emeritus of the Systemic Risk
+Council. She is a founding board member of The Volcker Alliance, a non-profit organization. She is Independent Non-executive
+Director of Thomson Reuters Corp., Host Hotels & Resort Inc., Federal National Mortgage Association, Bunge Limited, Paxos
+Trust Company, LLC and its holding company Kabompo Holdings, Ltd. She also serves on the International Advisory Council to
+CBIRC and the International Advisory Board for Santander. She received a Bachelor's Degree in philosophy from the University
+of Kansas, and a juris doctorate from the University of Kansas School of Law. She holds honorary doctorates from Amherst
+College, Drexel University, the University of Kansas, and the University of Massachusetts.
+Hui Ping, Employee Supervisor
+Shen Si, Independent Non-executive Director
+Nout Wellink, Independent Non-executive Director
+Mr. Wellink has served as Independent Non-executive Director of the Bank since December 2018. Previously, he served
+as the Treasurer General in the Dutch Ministry of Finance, member of the Executive Board and the President of the Dutch
+Central Bank, member of the Governing Council of the European Central Bank, member of the Group of Ten Central Bank
+Governors and Governor of the International Monetary Fund, member and Chairman of the Board of Directors of the Bank
+for International Settlements, Chairman of the Basel Committee on Banking Supervision, Independent Director of Bank of
+China Limited, Vice Chairman of Supervisory Board of PricewaterhouseCoopers Accountants N.V. and an Emeritus Professor
+at the Free University in Amsterdam. Mr. Wellink also served as member of the supervisory board of a bank, a reinsurance
+company and other enterprises on behalf of the Dutch authorities, Chairman of the Board of Supervisors of the Netherlands
+Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and the Westeinde Hospital in The Hague.
+He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of Orange-
+Nassau since 2011. He received a Master's degree in Law from Leiden University, a Doctorate degree in Economics from
+Erasmus University Rotterdam and an Honorary Doctorate from Tilburg University.
+Annual Report 2019
+101
+Directors, Supervisors, Senior Management, Employees and Institutions
+Fred Zuliu Hu, Independent Non-executive Director
+Mr. Hu has served as Independent Non-executive Director of the Bank since April 2019. He previously served as a senior
+economist at the International Monetary Fund, Head of Research at the World Economic Forum, the chairman for Greater
+China and a partner at Goldman Sachs Group, Inc., an independent non-executive director of Great Wall Pan Asia Holdings
+Limited (formerly known as SCMP Group Limited), an independent non-executive director of Hang Seng Bank Limited,
+the non-executive director of China Asset Management Co., Ltd., an independent director of Dalian Wanda Commercial
+Management Group Co., Ltd. and an independent director of Shanghai Pudong Development Bank etc. Mr. Hu currently
+serves in various positions such as the chairman of Primavera Capital Group, the non-executive chairman of Yum China
+Holdings, Inc, the independent non-executive director of Hong Kong Exchanges and Clearing Limited, the director of UBS
+Group AG, the co-chair of The Nature Conservancy's Asia Pacific Council and the director of the China Medical Board.
+Mr. Hu is also a member of the Global Board of Advisors for the Council on Foreign Relations, the 21st Century Council
+of the Berggruen Institute, the Harvard Global Advisory Council, the Harvard Kennedy School Mossavar-Rahmani Center
+for Business and Government, the Stanford Center for International Development, and the Jerome A. Chazen Institute
+of International Business at Columbia University etc. He concurrently serves as the co-director of the National Center for
+Economic Research and a professor at Tsinghua University, and he is also an adjunct professor at the Chinese University of
+Hong Kong and Peking University. Mr. Hu obtained a master's degree in engineering science from Tsinghua University, and a
+master's degree and a PhD in economics from Harvard University.
+Zhang Wei, Shareholder Supervisor
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of
+Shanghai Pudong Development Bank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA
+degree. He is a senior economist.
+Note: Overseas and other assets include investments in associates and joint ventures.
+Directors, Supervisors, Senior Management, Employees and Institutions
+Appointment and Removal
+US Risk
+Committee
+Related Party
+Transactions Control
+Compensation
+Committee
+Nomination
+Committee
+Board of
+Supervisors
+Senior
+Committee
+Committee
+No
+Responsibility and Risk Management
+Consumer Protection
+Board of
+Directors
+Strategy
+Committee
+Secondary reporting line
+Primary reporting line
+Shareholders'
+General Meeting
+Corporate Governance Framework
+Corporate Governance Report
+107
+Corporate Social
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Committee
+Corporate
+Directors
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Fred Zuliu Hu was elected as
+Independent Non-executive Director of the Bank, and his qualification was approved by CBIRC in April 2019. On 29 April
+2019, the Board of Directors nominated Mr. Chen Siqing as the candidate for Executive Director of the Bank and elected him
+as Chairman of the Board of Directors of the Bank, and his term of office as Chairman commenced upon the consideration
+and approval of his appointment as Executive Director at the Shareholders' General Meeting of the Bank. At the First
+Extraordinary General Meeting of 2019 held on 20 May 2019, Mr. Chen Siqing was elected as Executive Director of the
+Bank, and in accordance with the relevant regulations, his term of office as Executive Director of the Bank commenced
+on the day when his appointment was approved at the Shareholders' General Meeting, and his appointment as Chairman
+of the Board of Directors took effect simultaneously; Mr. Hu Hao and Mr. Tan Jiong were elected as Executive Directors
+of the Bank, and their qualifications were approved by CBIRC in June 2019 respectively. At the Annual General Meeting
+for the Year 2018 held on 20 June 2019, Mr. Yang Siu Shun was re-elected as Independent Non-executive Director of the
+Bank, and his new term of office started from the day of approval at the Annual General Meeting; Mr. Lu Yongzhen was
+elected as Non-executive Director of the Bank, and his qualification was approved by CBIRC in August 2019. At the Second
+Extraordinary General Meeting of 2019 held on 22 November 2019, Mr. Gu Shu was re-elected as Executive Director of the
+Bank, and his new term of office commenced on the day when his appointment was approved at the Shareholders' General
+Meeting. Mr. Feng Weidong and Ms. Cao Liqun were elected as Non-executive Director of the Bank, and their qualifications
+were approved by CBIRC respectively in January 2020.
+In January 2019, Mr. Yi Huiman ceased to act as Chairman and Executive Director of the Bank due to change of job
+assignments. In April 2019, Mr. Cheng Fengchao ceased to act as Non-executive Director of the Bank due to his age. In April
+2019, Mr. Hong Yongmiao ceased to act as Independent Non-executive Director of the Bank due to expiration of his term of
+office. In September 2019, Mr. Tan Jiong ceased to act as Executive Director and Senior Executive Vice President of the Bank
+due to change of job assignments. In February 2020, Mr. Hu Hao ceased to act as Executive Director and Senior Executive
+Vice President of the Bank due to change of job assignments. In February 2020, Mr. Dong Shi ceased to act as Non-executive
+Director of the Bank due to change of job assignments. In March 2020, Mr. Ye Donghai ceased to act as Non-executive
+Director of the Bank due to change of job assignments.
+Supervisors
+At the Annual General Meeting for the Year 2018 held on 20 June 2019, Mr. Zhang Wei was elected as Shareholder
+Supervisor of the Bank, and his new term of office started from the day of the expiration of his last term of office as
+Shareholder Supervisor; Mr. Shen Bingxi was elected as External Supervisor of the Bank, and his new term of office started
+from the day of the expiration of his last term of office as External Supervisor. At the special meeting of the first session of
+employee representative assembly of the Bank held on 21 June 2019, Mr. Huang Li was elected as Employee Supervisor of
+the Bank, and his new term of office started from the day of approval by the employee representative assembly. At the First
+Extraordinary General Meeting of 2020 held on 8 January 2020, Mr. Yang Guozhong was elected as Shareholder Supervisor
+of the Bank, and his new term of office started from the day of approval by the Shareholders' General Meeting, and his term
+of officer as Chairman of the Board of Supervisors of the Bank took effect simultaneously.
+Committee
+Management
+Assets Service
+Management
+Financial
+Investment
+Committee
+Promotion
+Banking
+Institutional
+Promotion
+Committee
+Retail Banking
+Banking
+Promotion
+Committee
+Banking
+Promotion
+Committee
+47.54
+30.75
+Yes
+FinTech Institutions
+3.7%
+Doctorate
+0.2%
+Other financial businesses
+3.4%
+Non-banking business
+1.0%
+8.0%
+Others
+106
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+As at the end of 2019, the Bank had a total of 16,605 institutions, representing a decrease of 215 as compared with the
+end of the previous year. Among them, there were 16,177 domestic institutions and 428 overseas institutions. Domestic
+institutions included the Head Office, 36 tier-one branches and branches directly managed by the Head Office, 451 branches
+in capital cities and tier-two branches, 15,529 outlets, 28 Head Office-level profitability units along with their directly
+managed institutions and branches, and 132 subsidiaries and their branches.
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES
+Assets
+Percentage
+Item
+11.9%
+Master
+management
+5.7%
+Employee Specialization
+Educational Background of Employees
+Personal banking
+41.9%
+Finance, accounting, treasury
+14.4%
+operations and operational
+management
+Bachelor
+56.6%
+Corporate banking
+12.1%
+Associate
+26.0%
+Management
+5.9%
+Below associate
+9.2%
+Risk and compliance
+(in RMB millions)
+Number of
+(%) institutions
+Percentage
+(%)
+49,145
+11.0
+4,256,707
+14.1
+2,699
+16.2
+70,037
+15.7
+Central China
+2,973,119
+9.9
+3,484
+21.0
+87,195
+19.6
+Western China
+3,841,497
+12.8
+3,683
+12.1
+As at the end of 2019, the Bank had a total of 445,106 employees, representing a decrease of 4,190 as compared with
+the end of the previous year. Among them, 6,710 were employees in domestic subsidiaries and 16,013 were employees in
+overseas institutions.
+2,003
+4,126,087
+Number of
+employees
+Percentage
+(%)
+Head Office
+10,687,512
+35.5
+29
+0.2
+18,363
+4.1
+Yangtze River Delta
+6,380,888
+21.2
+2,516
+15.1
+62,083
+14.0
+Pearl River Delta
+Bohai Rim
+13.7
+47.54
+Basic Information on Employees and Institutions
+(6)
+Hui Ping
+Huang Li
+Qu Qiang
+5.00
+5.00
+No
+5.00
+5.00
+No
+No
+25.00
+No
+Shen Bingxi
+No
+Liao Lin
+4.34
+1.06
+5.40
+No
+25.00
+107.89
+12.82
+95.07
+44.63
+44.63
+Yes
+42.96
+42.96
+Yes
+Shen Si
+44.46
+44.46
+Yes
+Nout Wellink
+42.29
+42.29
+No
+Fred Zuliu Hu
+30.75
+Anthony Francis Neoh, Independent Non-executive Director
+Yes
+Zhang Wei
+Wang Jingwu
+No
+Wang Bairong
+98.14
+No
+Cheng Fengchao
+Yes
+Ye Donghai
+Yes
+Dong Shi
+Yes
+Hong Yongmiao
+12.47
+12.47
+Yes
+Annual Report 2019
+105
+Directors, Supervisors, Senior Management, Employees and Institutions
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2) During the reporting period, the total remuneration amount paid to Directors, Supervisors and Senior Management members was
+RMB8,785.6 thousand. According to the requirements of relevant government authorities, the total final remuneration payable to
+the Chairman of the Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors, Shareholder
+Supervisors and other Senior Management members is still subject to final confirmation by relevant government authorities.
+Additional details of remuneration will be disclosed when they have been determined.
+(3) During the reporting period, Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Lu Yongzhen, Mr. Cheng Fengchao, Mr. Ye Donghai and
+Mr. Dong Shi obtained remuneration from Huijin, and Mr. Feng Weidong obtained remuneration from MOF.
+(4) Fees of Mr. Hui Ping and Mr. Huang Li are their allowances obtained as Employee Supervisors of the Bank, excluding their
+remuneration with the Bank in accordance with the employee remuneration system.
+(5) As the Bank's Independent Non-executive Directors and some Non-executive Directors served as directors or senior management
+of other legal persons or organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or
+organizations became related parties of the Bank. During the reporting period, some of the above-mentioned Directors obtained
+remuneration from such related parties. Except to the extent of the afore-mentioned circumstances, none of the Bank's Directors,
+Supervisors and Senior Management was paid by the Bank's related parties during the reporting period.
+48.75
+For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+9.66
+Tan Jiong
+12.82
+110.96
+No
+Guan Xueqing
+98.14
+12.82
+110.96
+No
+Directors and Senior Management Leaving Office
+Yi Huiman
+9.65
+2.21
+11.86
+No
+Hu Hao
+52.11
+12.82
+64.93
+No
+39.09
+Ms. Cao has served as Non-executive Director of the Bank since January 2020. She joined Huijin in 2020. Ms. Cao previously
+served as Deputy Director of Regulations Division, General Affairs Department, Director of Regulations Division, General
+Affairs Department, Director of Non-Financial Institutions Inspection Division, Supervision and Inspection Department,
+Director of General Affairs Division, Supervision and Inspection Department, Deputy Director-General of Supervision and
+Inspection Department, Inspector of General Affairs Department (Policy and Regulation Department), Level-Two Inspector of
+General Affairs Department (Policy and Regulation Department) of State Administration of Foreign Exchange, and acted as
+Deputy Director of Administrative Committee of Beijing's Zhongguancun Science Park. Ms. Cao obtained a Bachelor's degree
+in Law from China University of Political Science and Law, a Master's degree in Finance from Renmin University of China, and
+a Master's degree in Public Administration from Peking University. Ms. Cao is an economist.
+Management
+Mr. Feng has served as Non-executive Director of the Bank since January 2020. He joined MOF in August 1986 and
+consecutively worked in Accounting Department, National Accountant Certification Examination Leading Group Office
+and National Accountant Assessment & Certification Centre. He previously served as Deputy Director of Academic Affairs
+Division of Chinese Accounting Correspondence School of Accounting Department of MOF (deputy division chief level),
+Person in charge of Teaching Material Department of Office of National Accountant Certification Examination of Accounting
+Department, Director of Accounting Personnel Management Division of Accounting Department, Director of Institutional
+System Division I; during which, he had practical training at the Association of Chartered Certified Accountants (ACCA)
+of the United Kingdom. Since April 2008, Mr. Feng has subsequently served as Deputy Director of National Accountant
+Assessment & Certification Centre of MOF (deputy director-general level), Deputy Director (person in charge), Director
+(director-general level), Secretary of the Party Committee and Director. Mr. Feng obtained a Bachelor's degree in Economics
+from Dongbei University of Finance & Economics and Doctorate degree from Beijing Jiaotong University. Mr. Feng Weidong
+is a senior accountant, researcher, certified public accountant and is a recipient of the Special Government Allowance by the
+State Council of China.
+Promotion
+Committee
+Marketing
+Management
+Departments
+Profitability
+Units
+Risk
+Management
+Department
+Internal Audit
+Bureau
+Internal Audit
+Sub-bureau
+Comprehensive
+Administration
+Departments
+Finance
+Supporting
+Departments
+Domestic
+Institutions
+Overseas
+Institutions
+Note: The above is the corporate governance framework chart as of the end of 2019.
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Responsibilities of the Shareholders' General Meeting
+As the organ of power of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders' General
+Meeting is responsible for, among others, deciding on business policies and significant investment plans of the Bank;
+examining and approving the Bank's annual financial budget, final account proposals, plans for profit distribution and
+loss make-up; electing and replacing directors, supervisors appointed from the shareholder representatives and external
+supervisors; examining and approving work report of the Board of Directors and work report of the Board of Supervisors;
+adopting resolutions on merger, division, dissolution, liquidation, change of corporate form, increase or decrease of the
+Bank's registered capital, issuance of corporate bonds or other securities and public listing, repurchase of the shares and
+issuance of preference shares; and amending the Articles of Association of the Bank.
+ICBC
+Cao Liqun, Non-executive Director
+Directly
+Controlled
+Institutions
+Inclusive
+108
+Financial
+Technology
+Development
+Committee
+99
+Annual Report 2019
+Mr. Lu has served as Non-executive Director of the Bank since August 2019. He joined Huijin in 2019. Mr. Lu previously
+served as Deputy Director of the Administrative Office of the Economic Research Consultation Centre of the State Economic
+and Trade Commission, Director of the Specific Research Department of the Economic Research Centre of the State
+Economic and Trade Commission, Director of the Capital Markets Research Department of the Research Centre of the State-
+owned Assets Supervision and Administration Commission of the State Council, and Director Assistant of the Research
+Centre of the State-owned Assets Supervision and Administration Commission of the State Council with the concurrent post
+as the Director of the Capital Markets Research Department, and Deputy Director of the Research Centre of the State-owned
+Assets Supervision and Administration Commission of the State Council. Mr. Lu obtained a Bachelor's degree and a Master's
+degree in History from Peking University, and a Doctorate degree in Economics from Southwestern University of Finance and
+Economics. He is a researcher.
+Lu Yongzhen, Non-executive Director
+Ms. Mei has served as Non-executive Director of the Bank since August 2017. She joined MOF in 1992, and consecutively
+served in the World Bank Department, the Treasury Department and the Tariff Policy Department. Previously, she served as
+Assistant Consultant of the Budget Implementation Division of the Treasury Department of MOF, Assistant Consultant of the
+Audit & Supervision Division of the Treasury Payment Centre of MOF, Deputy Director of the Audit & Supervision Division of
+the Treasury Payment Center of MOF, Director of the Audit & Supervision Division of the Treasury Payment Center of MOF,
+Deputy Director-General of the Tariff Policy Department (Tariff Policy Research Centre) of MOF, and was seconded to World
+Bank Group as Senior Advisor and worked in the Development Partner Relationship Department of the Development Finance
+Unit of the International Development Association and the Vice-President Front Office of East Asia and Pacific Region of the
+International Bank for Reconstruction and Development. Ms. Mei obtained a Master's degree in International Affairs from
+School of International and Public Affairs of Columbia University, and a PhD in Economics from Chinese Academy of Fiscal
+Science (formerly known as the Institute of Fiscal Science, MOF).
+Mei Yingchun, Non-executive Director
+Mr. Zheng has served as Non-executive Director of the Bank since February 2015. He joined MOF in 1989, and served as
+Deputy Head and Head of the Administrative Office of Shanxi Finance Ombudsman Office, and Assistant Ombudsman
+and Associate Counsel of Shanxi Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central
+Committee of C.P.C. majoring in law theory. He is an economist.
+Directors, Supervisors, Senior Management, Employees and Institutions
+Mr. Yang has served as Chairman of the Board of Supervisors of the Bank since January 2020. He previously served as
+Deputy President of Chongqing Branch of PBC and concurrently served as Deputy President of Chongqing Branch of State
+Administration of Foreign Exchange (SAFE); as President of Chongqing Operation Office of PBC and concurrently as President
+of Chongqing Administrative Office of SAFE; as President of Operation Office (Beijing) of PBC and concurrently as President
+of Beijing Administrative Office of SAFE; as Head of the Discipline Inspection Group of the CPC Leading Group of SAFE; as
+Deputy Administrator of SAFE; and as Chairman of the Board of Supervisors of China Investment Corporation. He graduated
+from Zhongnan University of Finance and Economics and obtained a Master's degree in Economics. Mr. Yang is a senior
+economist.
+Promotion
+Committee
+Zheng Fuqing, Non-executive Director
+Internet Finance
+Risk
+Management
+Committee
+Feng Weidong, Non-executive Director
+Asset & Liability
+Directors, Supervisors, Senior Management, Employees and Institutions
+Yang Guozhong, Chairman of the Board of Supervisors
+Committee
+3/3
+Dong Shi
+8/8
+5/5
+3/3
+13/13
+3/3
+Ye Donghai
+2/2
+Cheng Fengchao
+2/2
+2/2
+1/1
+11/13
+2/2
+2/2
+3/3
+2/2
+4/6
+Tan Jiong
+115
+Annual Report 2019
+(5) The Corporate Social Responsibility and Consumer Protection Committee of the Board of Directors and the US Risk Committee
+of the Board of Directors were established on 25 October 2019 and did not hold any meeting during the reporting period. Prior
+to the establishment of the US Risk Committee of the Board of Directors, the Risk Management Committee of the Board of
+Directors concurrently took responsibilities of the US Risk Committee stipulated in the Enhanced Prudential Standards for Bank
+Holding Companies and Foreign Banking Organizations ("EPS") established by the Federal Reserve Board.
+(4) Mr. Feng Weidong and Ms. Cao Liqun were appointed as Non-executive Directors of the Bank in January 2020.
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+4/4
+"Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+Notes: (1)
+1/2
+1/2
+2/2
+3/3
+Hong Yongmiao
+2/3
+(2)
+1/2
+3/3
+1/1
+6/6
+5/5
+13/13
+3/3
+Shen Si
+-
+3/3
+3/3
+5/6
+4/4
+11/13
+3/3
+Sheila Colleen Bair
+2/3
+8/8
+4/5
+6/6
+5/6
+Corporate Governance Report
+3/3
+Hu Hao
+1/1
+1/1
+Yi Huiman
+Directors Leaving Office
+5/6
+1/3
+Nout Wellink
+2/2
+3/3
+Fred Zuliu Hu
+3/3
+3/3
+4/4
+3/3
+12/13
+8/10
+Special Committees of the Board of Directors
+Nomination Compensation
+Committee
+As at the disclosure date of the results, the composition of special committees of the Board of Directors of the Bank is as
+follows:
+Strategy Committee
+During the reporting period, the performance of duties by the special committees of the Board of Directors is set out below:
+Chairman
+Committee Member
+Committee Member
+Chairman
+Chairman Committee Member
+Committee Member
+Committee Member Committee Member Committee Member
+Chairman Committee Member
+Committee Member Committee Member Committee Member
+Committee Member
+Fred Zuliu Hu
+Primary Responsibilities of the Strategy Committee The Strategy Committee is mainly responsible for
+considering the Bank's strategic development plan, risk events that bear material influence on the overall situation, business
+and institutional development plan, major investment and financing plan, annual social responsibility report and other major
+matters critical to the Bank's development, making recommendations to the Board of Directors, and examining and assessing
+the soundness of the corporate governance framework to ensure financial reporting, risk management and internal control
+are compliant with corporate governance criteria of the Bank.
+Chairman Committee Member Committee Member
+Committee Member Committee Member Committee Member
+Committee Member Committee Member Committee Member
+Chairman Committee Member
+Vice Chairman
+Sheila Colleen Bair
+Yang Siu Shun
+Committee Member
+Anthony Francis Neoh Committee Member
+Committee Member
+Committee Member Committee Member Committee Member
+Committee Member Committee Member Committee Member
+Shen Si
+Nout Wellink
+Cao Liqun
+116
+Corporate Governance Report
+Effectiveness of the internal audit function
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of the Bank,
+and examining the effectiveness of the system at least on an annual basis. The Audit Committee performed its function
+of examining the Bank's internal control system through reviewing the administrative rules and regulations and their
+implementation, and examined and assessed the compliance and effectiveness of major operating activities of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing internal control,
+assessing its effectiveness and truthfully disclosing internal control assessment reports according to the standard system
+for enterprise internal control. The objective of the internal control of the Bank is to reasonably assure the compliance
+of its operation and management with relevant laws, safety of its assets, as well as the authenticity and completeness of
+its financial reports and relevant information, in order to enhance operation efficiency and results, and to facilitate the
+realization of its development strategy. Due to inherent limitation of internal control, only reasonable assurance can be
+provided for the afore-mentioned objectives. The Board of Directors and the Audit Committee have reviewed and approved
+the 2019 Internal Control Assessment Report of the Bank. For details of the Bank's internal control, please refer to the
+section headed "Corporate Governance Report ― Internal Control".
+Examining internal control system
+During the preparation and audit of the 2019 financial statements, the Audit Committee discussed and agreed with the
+external auditors on matters such as audit schedule and progress arrangement, followed the status of external audit and
+conducted supervision over relevant work at appropriate time by means of hearing reports and holding informal discussions,
+and reviewed the unaudited and preliminarily audited annual financial statements respectively. The Audit Committee held a
+meeting on 26 March 2020, and considered that the 2019 financial statements truly, accurately and completely reflected the
+financial position of the Bank. The Audit Committee reviewed the summary of audit work performed by external auditors
+in 2019 and made an overall and objective assessment on its performance and quality of practice in 2019. It also approved
+the renewal of the engagement of KPMG Huazhen LLP and KPMG as the external auditors of the Bank for 2020 and the
+engagement of KPMG Huazhen LLP as the internal control auditors of the Bank for 2020, and presented the proposals to the
+Board of Directors for consideration.
+The Audit Committee periodically reviewed the financial reports of the Bank. It had reviewed and submitted to the Board
+of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also organized and conducted
+an internal control assessment of the Group for 2018 and engaged external auditors to audit the assessment report and
+procedures of the Bank in accordance with the relevant regulatory requirements. Additionally, it enhanced communication
+with external auditors, attached importance to the supervision of external auditors and heard several reports of external
+auditors concerning audit plan, audit results, and management proposals. The Audit Committee also concerned with the
+compliant development of overseas institutions and heard related branches' reports on internal audit work.
+Reviewing periodic reports
+Corporate Governance Report
+ICBC
+117
+Performance of the Audit Committee During the reporting period, the Audit Committee held five meetings, considered
+and approved nine proposals, and heard 12 reports. The Audit Committee continued to oversee the Bank's internal control
+system, reviewed and approved the Bank's annual internal control assessment report, and heard reports on internal control
+audit results to improve the Group's compliant operation. It supervised the implementation of internal and external audits,
+considered and approved proposals on the internal audit plan and the engagement of external auditors, heard reports on the
+implementation of internal audits and performance appraisal for external auditors to promote the formation of an effective
+communication mechanism between internal and external audits.
+Primary Responsibilities of the Audit Committee The Audit Committee is mainly responsible for constantly overseeing
+the Bank's internal control system, and supervising, inspecting and evaluating financial information and internal audit of
+the Bank and assessing mechanisms for the Bank's staff to report misconducts in financial statements, internal control, etc.,
+and assessing the mechanism for the Bank to conduct independent and fair investigations and take appropriate actions in
+relation to the reported matters.
+Audit Committee
+Performance of the Corporate Social Responsibility and Consumer Protection Committee The Corporate Social
+Responsibility and Consumer Protection Committee was established on 25 October 2019 and did not hold a meeting during
+the reporting period.
+Primary Responsibilities of the Corporate Social Responsibility and Consumer Protection Committee The
+Corporate Social Responsibility and Consumer Protection Committee is mainly responsible for considering the Bank's
+fulfillment of social responsibilities with respect to environment, society, corporate governance, precision poverty alleviation,
+and corporate culture, the strategy, policy and target of consumer protection, green finance strategy, the development plan,
+basic policy, annual operating plan and assessment method of inclusive finance, and making recommendations to the Board
+of Directors.
+Corporate Social Responsibility and Consumer Protection Committee
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of the Board of Directors
+held four meetings, considered and approved eight proposals, and heard one report. Focusing on strategic planning and
+FinTech, the Strategy Committee considered and approved the FinTech development plan for 2019-2023 to assist the Board
+of Directors in guiding and promoting the Bank's reform and innovation, and to provide strategic guidance for planning the
+Bank's FinTech development in a forward-looking, comprehensive and systematic manner. The Strategy Committee also paid
+close attention to major matters such as strategic capital allocation, and reviewed and approved several proposals including
+the proposals on issuing perpetual capital bonds, the general mandate for shares issued by the Bank, and the 2018 capital
+adequacy ratio management report, providing a driving force for the Bank to promote sustainable development, enhance
+capital strength, and strengthen risk resistance capacity on all fronts.
+Annual Report 2019
+The Board of Directors of the Bank has established eight special committees, namely, the Strategy Committee, the Corporate
+Social Responsibility and Consumer Protection Committee, the Audit Committee, the Risk Management Committee,
+the Nomination Committee, the Compensation Committee, the Related Party Transactions Control Committee and the
+US Risk Committee. Except the Strategy Committee and the Corporate Social Responsibility and Consumer Protection
+Committee, chairmen of all the other committees were assumed by Independent Non-executive Directors. More than half
+of the members of the Audit Committee, the Nomination Committee, the Compensation Committee and the Related Party
+Transactions Control Committee were Independent Non-executive Directors.
+Feng Weidong
+Committee Member
+Committee
+Committee
+Committee
+of Directors
+Management
+Audit
+Protection
+Committee
+Strategy
+Risk
+and Consumer
+Committees
+Related Party
+Responsibility
+Directors/Special
+Corporate
+Social
+of the Board
+Committee Member
+4/5
+Transactions
+Control
+Committee
+Committee Member
+Committee Member
+Committee Member Committee Member
+Committee Member
+Lu Yongzhen
+Mei Yingchun
+Committee Member
+Committee Member
+Committee
+Committee Member Committee Member
+Zheng Fuqing
+Chairman
+Committee Member
+Gu Shu
+Chairman
+Chen Siqing
+US Risk
+Committee
+Committee Member
+12/13
+Mei Yingchun
+Yang Siu Shun
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+During the reporting period, the Bank convened the First Extraordinary General Meeting of 2019 on 20 May 2019, the
+Annual General Meeting for the Year 2018 on 20 June 2019, and the Second Extraordinary General Meeting of 2019 on
+22 November 2019. The afore-mentioned Shareholders' General Meetings were convened and held in strict compliance
+with relevant laws and regulations and the Articles of Association of the Bank. The Bank made announcements on the
+resolutions and disclosed legal opinions in a timely manner in accordance with regulatory requirements. For details of the
+above meetings, please refer to the announcements of the Bank dated 20 May 2019, 20 June 2019 and 22 November 2019
+respectively on the websites of SSE, the "HKEXnews" of HKEX and the Bank.
+Shareholders' General Meeting
+If an ordinary shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share
+certificates and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the
+Bank. For contact details, please refer to the section headed "Corporate Information".
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the Shareholders' General Meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform of
+SSE, investor relations column on the website of the Group, investor hotline and investor email and hotline, fax and email of
+the Shareholders' General Meetings of the Bank as well. For contact details, please refer to the section headed "Corporate
+Governance Report Investor Relations".
+Contacts
+Corporate Governance Report
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting during the reporting period.
+ICBC
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results, domestic and overseas road shows and reverse road shows, and attending famous investment forums at
+home and abroad during the reporting period. The Bank took full advantage of the communication platforms including the
+investor interactive platform of SSE, investor relations column on the website of the Group, investor hotline and investor
+email of the Bank, to understand investors' needs and provide sufficient information feedback in a timely manner.
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+shareholders' general meetings of the Bank strictly complied with relevant laws and regulations such as the Company Law,
+ensuring that shareholders could exercise their right of participation in the Shareholders' General Meetings smoothly. Since
+it was listed, in order to treat A and H minority shareholders fairly, the Bank has held the Annual General Meeting in Beijing
+and Hong Kong concurrently by satellite and set up registration offices of A and H shareholders both in Beijing and Hong
+Kong to facilitate the voting of shareholders.
+The Bank was widely praised for its constant improvement in information disclosure and corporate transparency, and rated
+as A (Excellent) for successive years in the annual information disclosure evaluation of listed companies on SSE.
+The Bank has developed comprehensive and complete information disclosure system, which specifies the scope, standard,
+division of responsibility and process of information disclosure, management of inside information and insiders, etc.
+During the reporting period, the Bank continued to strengthen the implementation of rules and regulations of information
+disclosure. It continued to enhance the compliance awareness of the Bank's responsible party for information disclosure
+to improve the initiative and effectiveness of the Group's information disclosure management, by increasing compliance
+publicity and education and conducting regular self-inspection.
+During the reporting period, the Bank strictly complied with domestic and overseas information disclosure regulations,
+continued to improve the group-wide information transmission mechanism, and actively fulfilled the information disclosure
+obligations, in order to protect the legitimate rights and interests of investors and other stakeholders. On such basis,
+the Bank continued to promote the voluntary information disclosure, and expand the width and depth of information
+disclosure. The Bank took the initiative in fully disclosing major concerns of domestic and overseas investors and capital
+markets, including the implementation of corporate strategy, risk management, FinTech development, internationalized
+and integrated operation, channel development and green credit, in an effort to provide timely, diversified and effective
+information for investors and other stakeholders and keep them informed of and help them understand the Bank's strategy,
+governance and operation.
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+Effective Communication with Shareholders
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis of
+the number of shares held by them; preference shareholders shall be entitled to rights to dividends in priority to payment of
+dividends to ordinary shareholders. Shareholders have other rights conferred by laws, administrative regulations, rules and
+the Articles of Association of the Bank.
+112
+Other rights
+Board of Directors and Special Committees
+The Bank formulated relatively complete procedures for nominating and electing Directors. With diversified backgrounds,
+the Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed professional and diversified perspectives and views, which ensured scientific decision-making of the Board of
+Directors. As at the disclosure date of the results, the Board of Directors of the Bank consisted of 13 directors, including two
+Executive Directors: Mr. Chen Siqing and Mr. Gu Shu; five Non-executive Directors: Mr. Zheng Fuqing, Ms. Mei Yingchun,
+Mr. Lu Yongzhen, Mr. Feng Weidong and Ms. Cao Liqun; and six Independent Non-executive Directors: Mr. Anthony
+Francis Neoh, Mr. Yang Siu Shun, Ms. Sheila Colleen Bair, Mr. Shen Si, Mr. Nout Wellink and Mr. Fred Zuliu Hu. Mr. Chen
+Siqing was Chairman of the Board of Directors. Mr. Gu Shu was Vice Chairman of the Board of Directors. The Executive
+Directors have worked in the areas of banking and management for a long time, possesses extensive professional expertise
+and experience in those areas and are familiar with operation and management of the Bank. Non-executive Directors have
+worked in the fiscal, economic, financial and governing sectors for many years, and they have rich practical experience and
+relatively high level of understanding of policies and theories. All of the Independent Non-executive Directors are prestigious
+Chinese or foreign experts in their respective areas, e.g. economy, financial supervision, finance, audit and law, and they are
+familiar with Chinese and foreign regulatory rules and have a good knowledge of corporate governance, finance and bank
+management. The number of Independent Non-executive Directors of the Bank accounted for more than one third of the
+total members of the Board of Directors, complying with relevant regulatory requirements.
+Europe and America
+Hong Kong, China
+Chinese Mainland
+Origin of director
+6
+Independent
+Non-executive Director
+5
+Composition of the Board of Directors
+Non-executive
+Director
+2
+Executive Director
+Type of director
+Unit: Person
+Corporate Governance Report
+113
+Annual Report 2019
+The Bank has established a vertical and independent internal audit management system responsible and reporting to
+the Board of Directors. The Board of Directors regularly reviews the internal audit plan and hears internal audit reports
+on internal audit activities, audit supporting measures, internal audit team building, etc., thus effectively performing the
+function of risk management. The Audit Committee examines, monitors and assesses the internal audit work of the Bank,
+supervises the internal audit rules and their implementation, and makes assessment of audit procedures and results of the
+internal audit department. It is also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department and external auditors. The internal
+audit department is accountable to and reports to the Board of Directors, is guided by the Board of Supervisors and is under
+the examination, supervision and assessment of the Audit Committee. For details of the internal audit, please refer to the
+section headed "Corporate Governance Report ― Internal Audit".
+Gender of director
+Corporate Governance Report
+Annual Report 2019
+Construction of the Corporate Governance Mechanism
+During the reporting period, the Bank continued to improve the framework of the Board of Directors, and established the
+new Corporate Social Responsibility and Consumer Protection Committee and the US Risk Committee under the Board of
+Directors. The Bank appointed and re-appointed some directors and changed the chairman and members of some special
+committees of the Board of Directors to further promote the role of the special committees of the Board of Directors in
+supporting decision-making. Besides, the Bank stepped up efforts in the Group's corporate governance, and kept refining
+the management and control and collaboration mechanism of the Group as well as the corporate governance framework,
+institutional system and working mechanism of its subsidiaries.
+Construction of the Organizational Framework of Corporate Governance
+During the reporting period, the Bank continued to improve its corporate governance level and capacity, and received a
+series of corporate governance awards from many Chinese and foreign authoritative institutions and media, including the
+"Hong Kong Corporate Governance Excellence Awards 2019" from the Chamber of Hong Kong Listed Companies, the
+"Golden Round Table Awards Board of Directors Corporate Governance Medal" from the magazine Directors & Boards,
+the "Best Listed Company Award" from the magazine New Fortune and the "China's Top 100 Companies Award" from the
+Forum of China Business Top 100.
+Corporate Governance Report
+109
+Annual Report 2019
+The Bank put into good use the key role of the Board of Directors in strategic decision-making and corporate governance.
+Centering on the objectives of driving sustainable growth in corporate value and creating value for customers and
+shareholders, the Board of Directors forged ahead as guided by the strategies, sought progress without compromising
+stability, inherited and innovated in development philosophy, strengthened the enterprise risk management and internal
+control, actively promoted the operational transformation and structural adjustment, kept track of how the strategies, plans
+and decisions were implemented continuously, and made sure the robust operation and healthy development of the Group.
+Supporting rules and regulations for performance standards of the Board of Directors were established and improved to
+ensure the Board of Directors fulfill its duties in accordance with relevant laws and regulations.
+During the reporting period, the Bank took improving corporate governance as a primary measure to enhance its core
+competitiveness, continued to develop its modern corporate governance framework, mechanism and culture, and brought
+the corporate governance and risk management capacities of the Group to a higher level. There is neither any material
+divergence between actual corporate governance of the Bank and applicable regulatory documents regarding corporate
+governance issued by CSRC, nor any problem identified by regulatory authorities but remain unresolved in respect of
+corporate governance.
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, the operation and management of the Bank; organizing the implementation
+of operation and investment plans approved by the Board of Directors; formulating specific rules and regulations of the
+Bank; determining plans for compensation distribution and performances evaluation of persons in charge of internal
+departments and branches of the Bank (except the internal audit department); truthfully reporting to the Board of Directors
+or the Board of Supervisors on the business performance; drafting the annual financial budget plan, final account plan, profit
+distribution plan and loss make-up plan, plans for increase or reduction of the registered capital, the issuance of bonds or
+other securities and listing, and making suggestions in that respect to the Board of Directors.
+Responsibilities of the Senior Management
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report its work to, the
+Shareholders' General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance
+and due diligence of Directors and Senior Management members; supervising the performance of duties by the Board
+of Directors and the Senior Management; conducting exit audits on Directors and Senior Management members when
+necessary; inspecting and supervising financial activities of the Bank; examining financial information such as financial report,
+business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of Directors;
+inspecting and supervising the business decision-making, risk management and internal control of the Bank and guiding
+the internal audit department of the Bank; supervising the engagement, dismissal, reengagement and audit of the external
+auditor as well as the audit work progress of the Bank; formulating the remuneration plans and performance evaluation
+measures of supervisors, conducting the performance evaluation on supervisors, and reporting to the Shareholders' General
+Meeting for approval; presenting proposals to the Shareholders' General Meeting; proposing to convene an extraordinary
+general meeting, and convening and presiding over the extraordinary general meeting in case the Board of Directors fails
+to perform its duty of convening Shareholders' General Meeting; proposing to convene an interim meeting of the Board of
+Directors.
+Responsibilities of the Board of Supervisors
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report its
+work to, the Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the
+Shareholders' General Meeting; implementing the resolutions of the Shareholders' General Meeting; deciding on the
+business plans, investment proposals and development strategies of the Bank; formulating annual financial budget and
+final accounts of the Bank; formulating plans for profit distribution and loss recovery of the Bank; formulating plans for
+the increase or decrease of the Bank's registered capital, capital replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such as risk management system and internal control system, and
+supervising the implementation of such systems; appointing or removing President and the Board Secretary, and appointing
+or removing Senior Executive Vice Presidents and other senior management members (except the Board Secretary) who
+shall be appointed or removed by the Board of Directors under relevant laws according to the nomination of the President
+and deciding on their compensation, bonus and penalty matters; deciding on or authorizing the President to decide on
+the establishment of relevant offices of the Bank; regularly evaluating and improving corporate governance of the Bank;
+managing information disclosure of the Bank; and supervising and ensuring the President and other Senior Management
+members to perform their management duties effectively.
+Responsibilities of the Board of Directors
+Corporate Governance Report
+Overview of Corporate Governance
+111
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors continuously
+improved its working mechanism in accordance with the priorities of the Bank, deepened the contents and methods of
+its supervision over performance of the Board of Directors and the Senior Management. It focused on the implementation
+of national economic and financial policies as well as regulatory requirements by the Board of Directors and the Senior
+Management, and their efforts in supporting the real economy and serving the supply-side structural reform, assessed the
+scientificity, rationality and effectiveness of the Bank's development strategy, monitored and assessed the implementation
+of the strategy. The Board of Supervisors earnestly conducted the annual performance assessment. Financial supervision
+and supervision over risk management and internal control of the Bank were enhanced. The Board of Supervisors effectively
+fulfilled its important role to corporate governance and promoted the legal and compliant operation and sustainable and
+stable development of the Bank.
+Development of Corporate Governance Regulations
+In the event that the Bank failed to pay the agreed dividend to preference shareholders for three years in aggregate or for
+two consecutive years, from the next day following the date of approval of the proposal not paying the agreed dividend
+for the current year by the Shareholders' General Meeting, preference shareholders shall be entitled to attend and vote
+(together with ordinary shareholders) at the Shareholders' General Meeting. For preference shares the dividend of which is
+non-cumulative, the voting rights shall be temporarily restored until the full payment of the agreed dividend for the current
+year by the Bank.
+In the following circumstances, preference shareholders of the Bank have the right to attend the Shareholders' General
+Meeting and exercise voting rights: (1) amendments to the Articles of Association which relate to preference shares; (2)
+the reduction of the registered capital of the Bank by more than 10% (either separately or in aggregate); (3) merger,
+division and dissolution or change of corporate form of the Bank; (4) issuance of preference shares; and (5) other events
+specified in the Articles of Association that will change or abrogate the rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders' General Meeting shall be given to preference shareholders in accordance
+with the notification procedures applicable to ordinary shareholders as specified in the Articles of Association.
+Special provisions on rights of preference shareholders
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, documents on status of share capital and minutes of Shareholders' General Meetings, etc.
+Putting forward suggestions and reviewing documents
+Shareholders who hold more than three percent (3%) of shares of the Bank, either individually or jointly, may prepare an
+interim proposal and submit it in writing to the Board of Directors ten (10) days before the Shareholders' General Meetings
+convened. The Board of Directors shall issue a supplementary notice for the Shareholders' General Meeting within two (2)
+days upon receipt of the proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Submitting interim proposals for the Shareholders' General Meeting
+The Bank strengthened enterprise risk management and capital management, and intensified internal control, audit and
+supervision. It continued to improve the enterprise risk management policies, and paid equal attention to risks on and off the
+balance sheet and risks at home and abroad to ensure that each risk is identifiable, controllable and well managed; stepped
+up the capital management, liquidity management and interest rate management, with the capital adequacy ratio (CAR)
+remained stabilized overall; and reinforced the group-wide compliance management, kept optimizing the internal control
+environment, and continued enhancing the auditing service capacity and the related supervision and inspection standards.
+An extraordinary general meeting should be convened within two (2) months from the date when shareholders holding
+more than ten percent (10%) of the voting shares of the Bank, either individually or jointly, request to convene in writing.
+Proposing shareholders shall have the right to request the Board of Directors in writing to convene an extraordinary general
+meeting. The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting
+within ten (10) days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles
+of Association of the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by
+themselves due to the failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted
+from the payment to those negligent directors.
+Shareholders' Rights
+During the reporting period, the Bank fully complied with the principles, code provisions and recommended best practices
+stipulated in the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules).
+Corporate Governance Report
+Compliance with the Corporate Governance Code
+ICBC
+110
+During the reporting period, the Bank formulated the Working Regulations for the Corporate Social Responsibility and
+Consumer Protection Committee of the Board of Directors and the Working Regulations for the US Risk Committee of the
+Board of Directors, revised the Working Regulations for the Strategy Committee of the Board of Directors and the Working
+Regulations for the Risk Management Committee of the Board of Directors, providing an institutional guarantee for further
+performing social responsibilities, enhancing the protection of consumers' rights and interests, and strengthening the
+supervision and guidance for risk management of institutions in the US across the board.
+Proposing the convening of an extraordinary general meeting
+3/3
+113
+2
+13/13
+3/3
+Zheng Fuqing
+Non-executive Directors
+3/3
+1/1 -------
+7/8
+4/4
+4/4
+12/13
+Gu Shu
+6/8
+2/2
+Chen Siging
+Executive Directors
+Committee
+Committee Committee Committee Committee Committee
+3/3
+US Risk
+6/6
+13/13
+3/3
+8/8
+6/6
+4/5
+3/3
+12/13
+3/3
+3/3
+Anthony Francis Neoh
+Cao Liqun
+Feng Weidong
+5/5
+1/1
+Lu Yongzhen
+3/3
+4/4
+Independent Non-executive Directors
+3
+Control
+Audit Management
+114
+For major proposals reviewed by the Board of Directors, please refer to the announcements of the Bank on the website of
+SSE, the "HKEXnews" website of HKEX or the website of the Bank.
+The Board of Directors highly valued the fulfillment of social responsibility and endeavored to maximize the comprehensive
+value of economy, environment and society. It reviewed and approved proposals on the Corporate Social Responsibility
+Report 2018, the Application for Temporary Authorization Limit for External Donations, etc., heard Report on Consumer
+Protection in 2018, and established the Corporate Social Responsibility and Consumer Protection Committee of the Board of
+Directors to assume the corresponding responsibilities.
+The Board of Directors improved asset management and continued to meet the capital needs of supporting the real
+economy and the regulatory requirements on capital management. It reviewed and approved proposals on the 2018 Risk
+and Capital Adequacy Assessment Report, the 2018 Capital Adequacy Ratio Report, issuing undated additional tier 1 capital
+bonds, capital increase to ICBC (Asia), and the exercise of redemption of offshore preference shares, etc.
+The Board of Directors attached great importance to the enterprise risk management, continuously improved risk
+management system and mechanism, and prevented the systemic risk with all strength. It issued the Measures for the
+Administration of the Large Exposures of ICBC, revised the Administrative Measures for Interest Rate Risk in the Banking
+Book, reviewed and approved proposals including the 2018 and 2019 Interim Risk Management Reports, the Liquidity Risk
+Management Strategy for 2019, the Management Strategy of Interest Rate Risk in the Banking Book for 2019, and heard
+reports such as Report on Technology Risk Management in 2018.
+The Board of Directors made scientific decisions on, and reviewed and approved such proposals as annual operation plan,
+fixed asset investment budget, consolidated management of the Group and work plans in accordance with economic and
+financial policies and major objectives, including serving the real economy, preventing and controlling financial risks and
+deepening financial reform.
+During the reporting period, the Board of Directors of the Bank held 13 meetings, considered 74 proposals, and heard 27
+reports.
+ICBC
+Meetings of the Board of Directors
+5
+Below three years
+Over three years
+Term of tenure
+10
+Male
+Female
+8
+Nomination Compensation
+Corporate Governance Report
+Attendances in person/Number of meetings that should be attended
+Protection
+Committee
+Strategy
+Committee
+of Directors
+Meeting
+Directors
+Board
+General
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Transactions
+and Consumer
+Shareholders'
+Related Party
+Responsibility
+Social
+Corporate
+Special Committees of the Board of Directors:
+Risk
+-
+ICBC
+118
+Performance of the Related Party Transactions Control Committee During the reporting period, the Related Party
+Transactions Control Committee held three meetings, considered two proposals including the proposal on identification
+of related parties of the Bank, and heard two reports including the report on related party transactions in 2018 and the
+identification of related parties of the Bank in 2018. The Related Party Transactions Control Committee focused on reviewing
+the fairness and objectivity of related party transactions, urged the Bank to strengthen the management of related party
+transactions and inside transactions, held a seminar on related party transactions, inside information and stakeholders, and
+assisted the Board of Directors in ensuring the Bank's related party transactions are carried out in compliance with laws and
+regulations.
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as tax
+advisory services and the professional services for the bonds issuance, and received RMB12 million for such professional non-
+audit services.
+Investor Relations
+Overview of Investor Relations Activities in 2019
+In 2019, the Bank strove to improve the quality of investor relations services and generate stable return to shareholders
+following the principle of serving investors in a comprehensive, proactive, coordinated, precise and efficient manner.
+The Bank made constant and extensive communication with institutional investors and minority investors through press
+conferences in relation to periodic results announcements, reverse road shows, domestic and overseas non-deal road shows,
+conferences with large institutions, investor hotline, investor relations mailbox, investor relations website and the online
+platform of sseinfo.com, which enhanced investors' confidence in economic development of China and the operational
+transformation of the Bank and helped bring the market value in line with the long-term intrinsic value of the Bank. The
+Bank improved investor relations information collection and market information feedback mechanism, strengthened dynamic
+monitoring of share price valuation, analyst reports and media and public opinions, followed and analyzed spotlight issues of
+the capital market, and effectively enhanced the quality of communication with the investors. The Bank actively understood
+and solicited the comments and suggestions of the capital market on the Bank, and assisted the Management in making
+timely reaction with the help of many operation and communication strategies, so as to continuously strengthen the level of
+corporate governance and core values of the Bank.
+In 2020, the Bank will further and proactively deepen the communication and exchange with investors to enhance investors'
+understanding and recognition of the Bank and continue to protect legitimate interests of the investors, and at the same
+time hope to receive more support from, and attention of the investors.
+Investor Enquiries
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+1 KPMG Huazhen LLP is a Recognized Public Interest Equity Auditor under Hong Kong's Financial Reporting Council Ordinance.
+2 KPMG is a Registered Public Interest Equity Auditor under Hong Kong's Financial Reporting Council Ordinance.
+Annual Report 2019
+127
+Report of the Board of Directors
+Principal Business The principal business of the Bank and its subsidiaries is the provision of banking and related
+financial services. Please refer to the section headed "Discussion and Analysis" for the business review of the Bank.
+Profits and Dividends Distribution
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for seven consecutive years (2013-2019).
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB210 million for the audit
+of financial statements (including the audit of financial statements of subsidiaries and overseas branches). Of which, RMB130
+million (including fee for internal control audit of RMB11 million) was paid by the Bank.
+KPMG Huazhen LLP¹ was the domestic auditors of the Bank for the financial statements audit in 2019, and KPMG² was the
+international auditors of the Bank for the financial statements audit in 2019. KPMG Huazhen LLP was also the auditors of
+internal control of the Bank in 2019.
+Engagement of Auditors
+Corporate Governance Report
+Audit Committee
+Senior Management
+Internal Audit Bureau
+Board of Supervisors
+Beijing
+Office
+Shenyang
+Office
+Tianjin
+Office
+Nanjing
+Office
+Shanghai
+Office
+The profit and financial status of the Bank during the reporting period are presented in the Auditor's Report and Financial
+Statements of the Annual Report.
+Wuhan
+Office
+Guangzhou Kunming
+Office
+Office
+Chengdu
+Office
+Primary reporting line
+Secondary reporting line
+During the reporting period, the Bank acted on the regulatory requirements, implemented risk-oriented audit activities and
+fully accomplished the annual audit plan according to the development strategy and central tasks of the Bank. The audit
+activities covered major domestic and overseas institutions of the Group, main business areas, operating procedures, key
+links and economic responsibilities of Senior Management members, with a focus on the credit risk, market risk, cross-
+financial risk and anti-money laundering compliance management under the complicated operating circumstances. The audit
+activities mainly covered such business areas as financial benefit, credit business, emerging business, information technology,
+operation management and capital management as well as the implementation of relevant strategies. The Bank also paid
+close heed to and made full use of audit findings and recommendations, with the aim of continuously enhancing risk
+management, internal control and corporate governance level.
+During the reporting period, internal audit of the Bank actively adapted to the changes in the risk management conditions,
+continuously refined the audit management mechanism, improved the digital transformation of internal audit, intensified
+efforts in organizing professional trainings, and constantly enhanced the audit service capacity and professionalism.
+126
+ICBC
+Xi'an
+Office
+As approved at the Annual General Meeting for the Year 2018 held on 20 June 2019, the Bank has distributed cash
+dividends of about RMB89,315 million, or RMB2.506 per ten shares (pre-tax) for the period from 1 January 2018 to
+31 December 2018 to the ordinary shareholders whose names appeared on the share register after the close of market on
+2 July 2019.
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.628 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2019, totaling about RMB93,664 million. The distribution plan will be submitted for
+approval to the Annual General Meeting for the Year 2019. Once approved, the above-mentioned dividends will be paid to
+the holders of A shares and H shares whose names appeared on the share register of the Bank after the close of market on
+29 June 2020. The Bank will suspend the registration procedures of H share ownership transfer on 24 June 2020 (inclusive)
+through 29 June 2020 (inclusive). The holders of H shares of the Bank that desire to receive the proposed cash dividends
+but have not registered the ownership transfer documents are requested to hand over their ownership transfer documents
+together with the H shares to the Bank's H share registrar Computershare Hong Kong Investor Services Limited that is
+located at Room 1712-1716, 17 Floor, Hopewell Center, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30
+p.m. of 23 June 2020. Pursuant to relevant regulatory requirements and operational rules, dividends on A shares and H
+shares will be paid on 30 June 2020 and 21 July 2020, respectively.
+-
+120
+Performance of the Compensation Committee During the reporting period, the Compensation Committee held three
+meetings, considered and approved three proposals including the proposals on the payment of remuneration to Directors
+and Senior Management members for 2018 and the Senior Management performance evaluation plan for 2019, and
+heard the 2018 assessment report on the performance of duties of Directors by the Board of Directors. The Compensation
+Committee, in accordance with regulatory requirements, improved the performance evaluation indicators and the incentive
+and constraint mechanism for Senior Management members.
+Primary Responsibilities of the Compensation Committee The Compensation Committee is mainly responsible for
+formulating assessment measures on the performance of duties and compensation plans for Directors, organizing the
+assessment on the performance of duties of Directors, putting forth proposal on remuneration distribution for Directors,
+formulating and reviewing the assessment measures and compensation plans for Senior Management members of the Bank
+and evaluating the performance and behaviors of Senior Management members.
+Compensation Committee
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held eight
+meetings, considered and approved 11 proposals including the proposals on the nomination of Mr. Chen Siqing, Mr. Gu
+Shu, Mr. Yang Siu Shun, Mr. Lu Yongzhen, Mr. Feng Weidong and Ms. Cao Liqun as candidates for Directors of the Bank,
+and heard the report on the framework of the Board of Directors in 2018. The Nomination Committee prudently assessed
+the organizational structure of the Bank's Board of Directors and its special committees, promoted the change of directors in
+an orderly manner and continuously improved and adjusted the composition of special committees of the Board of Directors.
+The Articles of Association of the Bank specifies methods and procedures to nominate Directors. Please refer to Article
+118 of the Articles of Association. During the reporting period, the Bank appointed and renewed the appointments of
+Directors of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews
+the qualifications of candidates for Directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+Committee shall pay attention to the complementarity of the candidates in terms of expertise, professional competence
+and experience, cultural and educational background, gender, etc., to ensure the members of the Board of Directors are
+well equipped, experienced and have diversified perspectives and views. In order to implement the diversity policy, the
+Nomination Committee assesses the improvement of diversified composition of the Board of Directors during the course of
+its yearly assessment on the framework, number of Directors and composition of the Board of the Directors, and discusses
+and designs measurable goals according to actual conditions. As at the disclosure date of the results, there were six
+Independent Non-executive Directors, accounting for more than one third of the total members of the Board of Directors;
+and there were three female Directors. The Bank attached importance to diversified sources and backgrounds of Directors
+and continued the efforts to enhance the professionalism of the Board of Directors, thus laying the foundation for the
+effective operation and scientific decision-making of the Board of the Directors.
+Corporate Governance Report
+119
+Annual Report 2019
+Primary Responsibilities of the Nomination Committee The Nomination Committee is mainly responsible for making
+recommendations to the Board of Directors on candidates for Directors and Senior Management members, nominating
+candidates for chairmen and members of special committees of the Board of Directors, and formulating the standards
+and procedures for selection and appointment of Directors and Senior Management members as well as the training
+and development plans for Senior Management members and key reserved talents. The Nomination Committee is also
+responsible for assessing the structure, size and composition of the Board of Directors on a yearly basis and making
+recommendations to the Board of Directors based on the Bank's development strategy.
+Nomination Committee
+The Risk Management Committee is responsible for constantly monitoring and examining the risk management system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. Under the enterprise risk management
+system structure of the Bank, the Risk Management Committee performed its function of examining the Bank's risk
+management system through reviewing and revising the risk strategy, risk management policy, risk appetite and the
+enterprise risk management structure, monitoring and evaluating the setup, mode of organization, work procedures and
+results of risk management departments, regularly assessing the risk policy, risk appetite and enterprise risk management
+status, supervising and assessing risk control activities conducted by the Senior Management members in terms of credit risk,
+market risk, operational risk, liquidity risk, compliance risk, reputational risk and interest rate risk in the banking book. For
+details of the risk management, please refer to the section headed "Discussion and Analysis - Risk Management".
+Examining the risk management system
+In addition, the Risk Management Committee paid close attention to and enhanced compliance management of overseas
+institutions. It revised the Bank's US-region risk management framework and risk appetite, considered several proposals
+such as the proposal on the Bank's liquidity risk management in the US region in 2018, and heard reports on the Bank's
+development strategy in the US region for 2019-2021, risk management and liquidity risk stress testing. It also held a
+seminar on overseas compliance management and AML to assist the Board of Directors in supervising and urging the
+Management to focus on compliance and anti-money laundering risks in the process of internationalized and diversified
+development.
+Performance of the Risk Management Committee During the reporting period, the Risk Management Committee held
+six meetings, considered and approved 17 proposals, and heard 17 reports. The Risk Management Committee attached
+great importance to risk prevention and control in key areas of the Bank. It considered and approved proposals on the 2018
+and 2019 Interim Risk Management Report, the 2018 Report on Management of Interest Rate Risk in the Banking Book, the
+2018 Report on the Risk Appetite Implementation and Assessment, the 2018 Compliance Risk Management Report of the
+Group and the 2019 Case Prevention Report and heard reports on technology risk management and the Group's anti-money
+laundering in 2018. It has become more foresighted in preventing and controlling financial risks and enhancing the risk
+management mechanism, in a bid to assist the Board of Directors in improving its risk management, prevention and control
+capabilities.
+Primary Responsibilities of the Risk Management Committee The Risk Management Committee is primarily
+responsible for constantly overseeing the Bank's risk management system, reviewing and revising the strategy, policy and
+procedures of risk management and internal control process of the Bank, and supervising and evaluating the performance of
+Senior Management members and risk management departments in respect of risk management.
+Risk Management Committee
+Corporate Governance Report
+US Risk Committee
+ICBC
+Corporate Governance Report
+Related Party Transactions Control Committee
+Primary Responsibilities of the Related Party Transactions Control Committee The Related Party Transactions
+Control Committee is mainly responsible for developing the basic policies governing the management of related party
+transactions, identifying the Bank's related parties, approving related party transactions and other related matters within
+the authority granted by the Board, receiving related party transaction statistics for filing purpose, reviewing the related
+party transactions that are subject to the approval of the Board of Directors or the Shareholders' General Meeting, and
+reporting to the Board of Directors on the implementation of the related party transaction management policies as well as
+the conditions on these transactions.
+For dividend-related tax and tax reduction, please refer to the announcements on dividend distribution of the Bank.
+The Bank had no plan for converting capital reserve to share capital in the last three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the last three years:
+Item
+2019
+Dividend per ten shares (pre-tax, in RMB yuan)
+2.628
+2018
+2.506
+2017
+2.408
+Board of Directors
+Cash dividends (pre-tax, in RMB millions)
+Percentage of cash dividends (1) (%)
+30.4
+89,315
+30.5
+85,823
+30.5
+Note: (1)
+Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+For details on the distribution of dividends on preference shares of the Bank, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial Shareholders — Preference Shares".
+128
+93,664
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+ICBC
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+Anti-Money Laundering
+Green Finance
+Training of Board Secretary
+During the reporting period, the Board Secretary of the Bank attended the relevant specialized trainings, with the training
+hours over 15 hours, which meets relevant regulatory requirements.
+Independence and Performance of Duties of Independent Non-executive Directors
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the Bank
+or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent Non-executive Directors and considered that they were independent.
+122
+ICBC
+Corporate Governance Report
+During the reporting period, Chairman Chen Siqing held discussions with the Bank's Independent Non-executive Directors,
+who provided suggestions with respect to the Bank's development strategies, business transformation and corporate
+governance. The Bank's Independent Non-executive Directors earnestly attended the meetings of the Board of Directors and
+special committees, gave independent opinions during consideration of issues, and participated in investigations of the Bank
+to support FinTech innovation and application. They paid great attention to the impact of changes in regulatory policies
+on the operation of overseas institutions and actively paid visits to and communicated with overseas regulators. They also
+held discussions with the Management to exchange opinions. The Bank's Independent Non-executive Directors put forward
+comments and suggestions in respect of business management and strategy implementation. Their suggestions were about
+strengthening research on international regulatory trends, improving internationalized development, pushing ahead with
+FinTech innovation, accelerating financial ecological development, focusing on risk management and control as well as
+compliant development and strengthening information security management. The Bank paid close attention to the relevant
+comments and suggestions, and organized the implementation thereof according to the actual conditions.
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of the
+Board of Directors and special committees of the Board of Directors.
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting period,
+please refer to the Work Report of Independent Directors for 2019 issued by the Bank on 27 March, 2020.
+Board of Supervisors
+Composition of the Board of Supervisors
+As at the disclosure date of the results, the Board of Supervisors of the Bank consisted of six members, including two
+Shareholder Supervisors, namely Mr. Yang Guozhong and Mr. Zhang Wei; two Employee Supervisors, namely Mr. Hui Ping
+and Mr. Huang Li; and two External Supervisors, namely Mr. Qu Qiang and Mr. Shen Bingxi.
+Meetings of the Board of Supervisors
+During the reporting period, the Board of Supervisors held five meetings, reviewed 20 proposals including the proposals on
+the Corporate Social Responsibility Report and the Report on Development Strategy Assessment Opinions, heard 11 reports
+on the business operation, internal control and risk management, and reviewed 23 documents including the documents on
+the supervision in each quarter of 2019 and the remediation progress of issues indicated in the survey reports of the Board
+of Supervisors.
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+Supervisor
+Zhang Wei
+Introduction to External Regulatory Requirements and Notes to Duty Performance of Directors
+Banking Services
+Introduction to Corporate Governance and Operation of the Board of Directors
+Introduction trainings for newly-appointed directors of the Bank:
+Internal Audit
+Primary Responsibilities of the US Risk Committee In accordance with the relevant requirements in the Enhanced
+Prudential Standards for Bank Holding Companies and Foreign Banking Organizations established by the Federal Reserve
+Board, the US Risk Committee supervised the implementation of the US business-related risk management framework and
+relevant policies.
+Performance of the US Risk Committee The US Risk Committee was established on 25 October 2019, and did not hold
+a meeting during the reporting period.
+Responsibilities of Directors in Respect of Financial Statements
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2018 Annual Report,
+the First Quarterly Report of 2019, the 2019 Interim Report and the Third Quarterly Report of 2019 as scheduled.
+Term of Directors
+The Bank has strictly complied with the requirements of the exchanges on which the Bank is listed and the Articles of
+Association of the Bank that Directors are elected by the Shareholders' General Meeting with a term of three years, and the
+appointment shall take effect from the date of approval by CBIRC or upon completion of relevant procedures according to
+the requirements of CBIRC. Directors may be re-appointed through re-election at the Shareholders' General Meeting after
+expiry of their term.
+Annual Report 2019
+121
+Hui Ping
+Corporate Governance Report
+During the reporting period, Directors of the Bank proactively conducted surveys on departments of the Bank, directly
+managed institutions, and domestic and overseas branches and subsidiaries concerning such topics as compliance
+management of overseas institutions, business development and risk control of integrated subsidiaries, as well as financial
+services in support of regional development, private enterprises and small and micro enterprises, and manufacturing
+development. In the form of survey reports and briefs, such investigations provide the Bank with development ideas and help
+it promote the implementation of the work.
+During the reporting period, the Bank developed an overall training plan for the Board of Directors, increased training
+resources, and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors
+in continuing to improve their ability to perform their duties. During the reporting period, Directors of the Bank attended
+relevant trainings according to work needs.
+Trainings held by the regulatory authorities:
+SSE: Independent Directors Qualifications, Information Disclosure Compliance
+Beijing Office of CSRC: Compliance Operation, Capital Operation
+CBIRC: Corporate Governance Training for Directors and Senior Management Members in Bancassurance
+Special business trainings of the Bank:
+FinTech Development
+Latest Trend of Overseas Financial Regulations and Their Influence
+Application and Evaluation Method of FinTech in the Banking Industry
+Analysis and Outlook of Macro-economic Environment
+Investigation and Training of Directors
+Huang Li
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+Attendances in person/Number of meetings that should be attended
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Inside Information Management
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued
+to strengthen inside information confidentiality management, timely organized the completion of insider lists and regularly
+conducted insider transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be
+involved in dealings in shares of the Bank who have taken advantage of inside information during the reporting period.
+Internal Control
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee and the Related Party Transactions Control Committee of the
+Board of Directors perform the responsibilities of internal control management and review the effectiveness of internal
+control. The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-bureau, which adopt a hierarchical
+management system and are responsible to and report to the Board of Directors. The Head Office and branches have internal
+control and compliance departments which are responsible for the bank-wide organization, promotion and coordination of
+internal control.
+The internal control environment has been optimized continuously. The Bank launched the "Responsibility Reinforcement
+Year" compliance culture event in 2019, put in place the Administrative Measures for Positive Compliance Incentives,
+strengthened the interconnection between evaluation of horizontal business lines and assessment, and upgraded the
+problem remediation mechanism. It improved the setting of departments in branches, and further increased business
+operation vitality and risk management ability. The Bank also improved rules for assessing leaders of branches and launched
+on-site assessment for them, with the aim to improving the closed-loop management of their performance assessment.
+124
+ICBC
+Corporate Governance Report
+Powers and Functions of the Senior Management
+The technological level of risk management has risen evidently. The Bank stepped up the development of a cross-risk
+monitoring and early-warning platform, with a view to monitoring and warning in advance risks arising from underlying
+assets, cooperative institutions and products. It upgraded the system of operational risk management tools, deepened
+sharing and transmission of risk data and information, and encouraged business departments to control risks and losses from
+the source. Efforts were made to enhance the development of the Group's capital management system and a panoramic
+view of unified liquidity risk and capital management. In addition, the Bank further regulated its internal rating system and
+improved the assessment scope, procedure, duty and mechanism of credit rating for corporate customers.
+Information communication has been further streamlined. The Bank put in place a regulation management system applicable
+to all overseas institutions (the version for overseas institutions), providing them with a unified regulation management and
+inquiry platform, thus ensuring rules and regulations of the Head Office better mesh with those of overseas institutions. It
+upgraded its information platform, and launched such functions as visual analysis of public opinions in the banking industry,
+wealth management product inquiry and penetrative inquiry of beneficial owners who are not natural persons, thereby
+improving IT-based operation and management.
+Internal Control Assessment Report and Internal Control Audit
+While disclosing the annual report, the Bank also disclosed the 2019 Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2019 (benchmark date). KPMG Huazhen LLP
+has audited the effectiveness of the Bank's internal control over financial reporting as at 31 December 2019 and issued the
+standardized audit report on internal control. For details, please refer to the announcements published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Internal Control Evaluation and Defects
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines
+issued by five ministries and commissions including MOF, the Guidelines for Internal Control of Listed Companies issued
+by SSE and relevant regulatory requirements of CBIRC. No significant or material deficiencies were detected in the Bank's
+internal control system during the assessment. Risks that may arise from ordinary deficiencies are controllable and corrective
+actions have been or are being taken, which have no material impact on the fulfillment of internal control objectives of the
+Bank. The Bank had maintained effective internal control in all material aspects in accordance with the standard system for
+enterprise internal control and relevant rules.
+Annual Report 2019
+Qu Qiang
+125
+Corporate Governance Report
+Control activities have become more effective. The Bank developed the Internal Control Manual to further perfect the
+Group's regulations and systems. In line with the best compliance management practices of international banks, the
+threshold for opening an overseas institution was improved. The Bank also put forward a multilevel framework and plan for
+implementing personalized authorization management. The review and approval functions were steadily delegated to tier-
+two branches, while the business scope, targets and authorities of credit sub-authorization business were determined on a
+reasonable and prudential basis. Centering on the ECOS project, the Bank made its business systems smarter in an all-round
+way. Relying on the cloud platforms, the Bank developed a better view of big data resource management, and achieved
+unified display and evaluation of various types of assets, such as data, standards, services, models, and products. The Bank
+improved the key post management system, so as to increase the efficiency of job rotation for key posts at the Head Office
+and branches. It upgraded internal accounting procedures of key items, established an account age management mechanism
+for write-offs and city ledgers in internal accounting details, and strengthened management and control of risks arising from
+internal accounts.
+Mr. Gu Shu is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+The internal monitoring and evaluation has remained effective. The Bank established a sound three-pronged approach for
+accountability management, developed relevant regulations, stepped up efforts to launch the accountability management
+system for non-standard business and built a unified view of the system. It deepened risk management in eight major
+businesses and other three businesses, i.e., payment and settlement business, cash business and customer information
+management, and continuously strengthened evaluation and inspection of risks in key areas and links, as well as risk
+management results.
+Chairman and President
+Board of
+Supervisors
+Meeting
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be held by two persons, and the Chairman
+shall not concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+Chairman Mr. Chen Siqing is the legal representative of the Bank, and is responsible for leading the Board of Directors
+in considering and formulating business development strategies, risk management, internal control and other significant
+matters of the Bank.
+Shareholders'
+General
+3/3
+5/5
+3/3
+3/3
+4/5
+3/3
+5/5
+4/5
+5/5
+Shen Bingxi
+Note: For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Annual Report 2019
+123
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries to all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the afore-said codes of conduct during
+the reporting period.
+3/3
+Corporate Governance Report
+Securities Transactions of Directors and Supervisors
+119,330.00
+Consumption-based poverty alleviation. The Bank gave full play to the advantages of its E-commerce platform to support
+online sales of targeted goods, implemented a rapid access mechanism of approval upon application for targeted merchants
+to ensure that those merchants can enter the platform within a short period of time. It also offered preferential policy of free
+transaction fees and margins, and invested marketing funds to actively organize special anti-poverty marketing activities. The
+Bank actively mobilized the Group's branches to give priority to poverty alleviation products in logistics, procurement and
+welfare for employees.
+It is widely recognized by the society. The Bank's achievements and innovations in precision poverty alleviation have been
+widely praised by governments at all levels and populations in poverty-stricken areas, and was awarded as the Best Brand
+of Poverty Alleviation through Finance by Sina Finance, listed on the Pioneer List of Financial Poverty Alleviation by People's
+Daily Online, and honored the "Best Poverty Alleviation Bank of the Year" by Financial News for two consecutive years.
+III. Precision Poverty Alleviation Achievements
+I. Finance-backed precision poverty alleviation
+In RMB10,000
+Including: Loan of industry precision poverty alleviation
+Loan of project precision poverty alleviation (3)
+17,036,035.99
+2,777,588.40
+Significant Events
+6,322,140.74
+Including: Rural transport facilities
+Balance of loans (2)
+ICBC
+135
+Poverty alleviation through education. The Bank made great efforts in brand sponsorship projects such as the "Candle
+Program" and the "Sailing Program" for training and commending excellent village teachers and extending financial support
+to outstanding poverty-stricken college students. At the same time, it strengthened poverty alleviation through education
+from two directions: one is to provide long-term accompany assistance to selected disadvantaged excellent students in
+compulsory education, and the other is to continue to recruit outstanding college students from poor households to realize
+that one employed person help extricate the whole family from poverty. It relied on distance education to make up for the
+shortage of education resources in poverty-stricken areas, and introduced Tsinghua University and NetEase Online Open
+Courses to provide high-quality education and training resources to the poverty-stricken areas through satellite television
+and Internet. The Bank raised funds from customers and the public through its "ICBC Mall" charity platform to fund
+disadvantaged students and improve educational facilities. It invested special funds to build Hope Primary School in Jinyang
+County to solve the problems in schooling and long distance to school for school-age children in areas of extreme poverty.
+Poverty alleviation through healthcare. The Bank upgraded clinics and trained doctors for areas of targeted poverty
+alleviation with the help of specialist agencies, and improved hardware facilities and healthcare in poverty-stricken areas. It
+provided sustainable finance for the "Brightness Journey of Lifeline Express" that provides free surgical operations to the
+helpless blind cataract patients. It also conducted vision screening for children in poverty-stricken areas and built electronic
+vision records together with professional hospitals and other institutions. The Bank's overseas entities supported the
+upgrading of medical institutions in poverty-stricken areas by means of cross-border financing. It donated ambulances to
+areas of targeted poverty alleviation to solve the problems of poor transportation and help patients there get timely medical
+treatment.
+Credit Standing During the reporting period, there had not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor had there been any outstanding debt of significant amount.
+Implementation of Share Incentive Plan and Employee Stock Ownership Plan during the
+Reporting Period During the reporting period, the Bank did not implement any share incentive plan or any employee
+stock ownership plan.
+Upgrading of rural power network
+Performance of the Poverty Alleviation Social Responsibility
+The Bank took poverty alleviation as an important part of fulfilling its social responsibilities, earnestly implemented
+requirements of the CPC Central Committee and the State Council to win the hard battle against poverty and resolutely
+implemented the decisions and policies of the Party Committee of the Head Office. It continuously improved the poverty
+alleviation system and mechanism, enriched means of process management and explored new approaches for the poverty
+alleviation. It accurately responded to the financial demands of poverty-stricken areas and impoverished people and made
+endeavors to play its due role in fighting against poverty and shoulder its responsibilities as a leading bank.
+I. Overall Precision Poverty Alleviation Planning
+Strengthening the leadership and coordination. The Bank paid close attention to the poverty alleviation, and adhered to
+making heads of institutions at all levels assume the overall responsibility for poverty alleviation and pushing forward the
+overall coordinated efforts across the Bank with precise focus and strength. It attached importance to the pooled efforts
+across the Bank and explored effective new model of poverty alleviation to contribute ICBC's wisdom to winning the hard
+battle against poverty.
+Improving the mechanism for poverty alleviation. In 2019, the Head Office's Leading Group for (Targeted) Poverty Alleviation
+through Finance held three meetings to continually strengthen the leadership and coordination of poverty alleviation work.
+The Bank formulated five guiding documents on precision poverty alleviation including the ICBC Work Plan for Precision
+Poverty Alleviation through Finance (Version 2019), the Opinions on Making Further Effort in Precision Poverty Alleviation
+through Finance, the Opinions on Effective Work on Targeted Poverty Alleviation in 2019, the Notice on the Acceleration
+of the Poverty Alleviation through ICBC Mall and the Working Regulations for the Leading Group for Poverty Alleviation
+through Finance to provide a solid policy basis for poverty alleviation work.
+Annual Report 2019
+Significant Events
+II.
+Summary of Precision Poverty Alleviation
+The Bank conducted solid work on all aspects of the poverty alleviation, and achieved the steady growth in precision
+poverty alleviation loans, sustained improvement in comprehensive financial services, remarkable achievements in new
+poverty alleviation model, steady income increase in counties and cities of targeted poverty alleviation, and expanding social
+influence in poverty alleviation.
+Increasing loan granting for poverty alleviation. By closely focusing on the financial needs of poverty-stricken areas and
+poor households, the Bank increased credit resources to them and continued to increase loan granting for precision poverty
+alleviation. It promoted the service model of "precision poverty alleviation and agriculture-related supply chain" to steadily
+lift poor households out of poverty and increase their incomes through loan of industry precision poverty alleviation.
+Improving comprehensive financial services. The Bank improved the financial services for poverty-stricken areas and poor
+households in various fields in a multi-pronged approach. It actively improved the geographical distribution of outlets and
+their functions, studied and implemented the overall planning of new outlets in poverty-stricken areas. It continued to adopt
+fee reduction of personal settlements, and set up tailor-made wealth management products and certificates of deposit in
+poverty-stricken areas. It generally upgraded "e-Business Dream Plan" to increase financial service support for poverty-
+stricken areas through online products. It carried out solid special study on the overall planning for the development of the
+whole county-based market, including poverty-stricken areas.
+Poverty alleviation through industries. Pushing the poverty alleviation efforts being driven by internal forces, the Bank
+continued to carry out the industry-based poverty alleviation model combining ICBC, the government, the village's Party
+committee and autonomous committee, enterprises and the poor households together, supported local characteristic
+projects such as meat rabbit and Apis cerana breeding and green prickleyash farming, inspired the endogenous potentials
+of poor households and enhanced the self-development ability in poverty-stricken areas. The Bank launched a fresh model
+of alleviating poverty with joined-up efforts from banks, insurers and futures companies, thus beefing up targeted poverty
+alleviation in a joint and effective way and risk management products such as feed cost index insurance and climate index
+insurance according to local conditions to help enterprises and farmers reduce operational risks and maintain steady
+income. The Bank focused on the pain points of industrial development with higher transportation costs and lower product
+competitiveness, and provided subsidies for the sale, logistics and transportation of farm and pasture products to areas
+of extreme poverty to help high-quality agricultural products out of mountains. It put local investment needs on its own
+E-Intelligence think tank platform for free and introduced leading enterprises in the industry to bring capital and advanced
+technology to local governments and improve the industrial chain.
+136
+209,077.14
+984.00
+743,378.61
+568.00
+3,480.00
+1,800.00
+35,961.91
+10,418.69
+5,837.14
+4,534.00
+Including infrastructure
+construction, industrial
+development, education,
+healthcare and visit to
+poor households
+147,308
+Notes: (1) The "targeted poverty alleviation" refers to the poverty alleviation efforts in Tongjiang County, Nanjiang County, Jinyang County
+and Wanyuan City in Sichuan Province.
+(2) The data is disclosed in accordance with the statistical standard as stipulated by CBIRC.
+(3) According to relevant regulations of PBC, loans for building roads in areas above the county level are no longer included in loans
+for transport facilities.
+Material Assets Acquisition, Sale and Merger During the reporting period, the Bank had no material assets
+acquisition, sale and merger.
+Annual Report 2019
+420,299
+Rural water conservancy facilities
+Including: Number of registered poor people
+2. Projects
+Rural education loan
+231,295.00
+11,366.00
+II. Amount of targeted poverty alleviation input
+1. Poverty alleviation through industries
+2. Poverty alleviation through education
+3. Number of beneficiaries
+3. Poverty alleviation through healthcare
+5. Poverty alleviation through Party building
+III. Consumption-based poverty alleviation
+1. Assistance in selling agricultural products in poor areas
+2. Purchase of agricultural products in poor areas
+IV. The Group poverty alleviation donations apart from targeted poverty alleviation
+1. Amount of donations
+4. Poverty alleviation through jobs
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank to recover non-performing loans,
+while some were related to disputes with clients. As at 31 December 2019, the amount of pending proceedings in which the
+Bank and/or its subsidiaries acted as defendants totaled RMB4,233 million. The Bank does not expect any material adverse
+effect from the above-mentioned pending legal proceedings on the Bank's business, financial position or operating results.
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Bank.
+ICBC
+In 2019, the Bank carried out standardized management of the Group's connected transactions in strict accordance with the
+regulations of CBIRC and CSRC as well as listing rules in Shanghai and Hong Kong.
+Connected Transactions
+Report of the Board of Directors
+ICBC
+130
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and Supervisors As
+at 31 December 2019, none of the Directors or Supervisors of the Bank had any interests or short positions in the shares,
+underlying shares or debentures of the Bank or any of its associated corporations (as defined in Part XV of the Securities and
+Futures Ordinance of Hong Kong) which have to be notified to the Bank and SEHK under Divisions 7 and 8 of Part XV of the
+Securities and Futures Ordinance of Hong Kong (including interests or short positions therein that they shall be deemed to
+have pursuant to such provisions of the Securities and Futures Ordinance of Hong Kong), or any interests or short positions
+which have to be recorded in the register under Section 352 of the Securities and Futures Ordinance of Hong Kong, or
+any interests or short positions which have to be notified to the Bank and SEHK pursuant to the Model Code for Securities
+Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong Listing Rules.
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors and Supervisors to acquire benefits by means of the acquisition of shares in or
+debentures of the Bank or any other body corporate.
+Directors' and Supervisors' Interests in Transactions, Agreements or Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+Management Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Equity-linked Agreement There is neither any agreement to which the Bank is a party, any options to subscribe
+shares, nor any securities convertible to shares of the Bank that requires the Bank to issue shares. In addition, there is no
+securities offering holders the right to subscribe shares of the Bank, the employee participation plan or share option plan,
+etc. as required by the disclosure requirements of the Hong Kong Listing Rules.
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing business growth of the Bank.
+Use of Proceeds from Fundraising Activities
+Report of the Board of Directors
+129
+Annual Report 2019
+Major Customers In 2019, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank for the year.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining approval
+of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public offering,
+issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods as
+allowed by applicable laws and administrative regulations or approved by relevant authorities.
+137
+Report of the Board of Directors
+Formulation and Implementation of Cash Dividend Policy
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile have regard to the long-term interest of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be substantiated and proved in detail and presented
+in a written substantiating report for Independent Non-executive Directors to issue their opinions, and then the report will be
+submitted to the Shareholders' General Meeting for approval as a special resolution.
+The formulation and implementation of the Bank's cash dividend policy, which has been commented by the Independent
+Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the requirements provided
+in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and proportion are clear and
+explicit, and the decision-making procedure and mechanism are complete. Minority shareholders can fully express their
+opinions and appeals, to completely safeguard their legitimate rights.
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2019 are set out in
+"Note 39. to the Financial Statements: Reserves" of this annual report.
+During the reporting period, the Bank had no connected transaction to be submitted to the Board of Directors or the
+Shareholders' General Meeting for review, and all connected transactions occurred complied with the disclosure exemptions
+under the Listing Rules of the Shanghai Stock Exchange and the Hong Kong Listing Rules on disclosure exemptions.
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2019 is set
+out in the section headed "Financial Highlights" of this annual report.
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2019 are set out in the sections headed
+"Discussion and Analysis Business Overview" and "Note 25. to the Financial Statements: Investments in Subsidiaries" in
+this annual report.
+Share Capital and Public Float
+Changes in the share capital of the Bank for the year ended 31 December 2019 are set out in "Note 37. to the Financial
+Statements: Share Capital".
+As at the latest practicable date before the publication of this annual report, the Bank has maintained the minimum public
+float of 23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the
+Bank.
+Purchase, Sale and Redemption of Shares For details on the redemption of USD offshore preference shares
+and RMB offshore preference shares of the Bank, please refer to the section headed "Details of Changes in Share Capital
+and Shareholding of Substantial Shareholders - Preference Shares". Save as disclosed above, during the reporting period,
+neither the Bank nor any of its subsidiaries purchased, sold or redeemed any listed shares of the Bank.
+Donations During the reporting period, the Group made external donations of RMB206,220.5 thousand equivalent.
+Liability Insurance of Directors, Supervisors and Senior Management Pursuant to the Articles
+of Association of the Bank, where conditions permit, the Bank may establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members upon approval of the Shareholders' General Meeting. The Bank will
+use its own assets to compensate each Director, Supervisor and Senior Management member for any liability arising during
+their performance period to the maximum extent permitted by laws and administrative regulations or within the scope not
+prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior Management members are
+otherwise proved to have failed to act honestly or in good faith during their duty performance. During the reporting period,
+the Bank renewed liability insurance for Directors, Supervisors and Senior Management members.
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank are not related to one another with respect to finance, business, family, or other
+material relationships which are required to be disclosed.
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved its performance assessment system and incentive restriction mechanism. From the perspectives of economic
+benefit, prevention and control of financial risks and support for the real economy and social responsibilities, the Bank
+adopted a system composed of overall operation and management based indicators for the Management and duties
+allocation based indicators for individuals. The remuneration to the Chairman of the Board of Directors, the President, the
+Chairman of the Board of Supervisors and other executives of the Bank has followed the State's policies relating to the
+remuneration reform on executives of central enterprises, which consists of basic annual remuneration, performance-based
+remuneration and incentive income linked to term appraisal. The remuneration to other Senior Management members
+and Shareholder Supervisors consists of basic annual remuneration and performance-based remuneration, and part of
+performance-based remuneration is paid in a deferred manner. The Bank has contributed to statutory retirement programs
+organized by Chinese governmental organizations at different levels for Directors, Supervisors and Senior Management
+members concurrently as the employees of the Bank. Upon obtaining all applicable approvals, the Bank will implement
+a long-term incentive program. As at 31 December 2019, the Bank had not granted any share appreciation rights to any
+Director, Supervisor, Senior Management member, or other core business personnel designated by the Board of Directors.
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Compliant Operation During the reporting period, the Board of Directors and the Senior Management of the Bank
+continued to operate in compliance with applicable laws and regulations, and the decision-making procedures complied
+with applicable laws and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the
+Senior Management diligently and faithfully performed their duties, and the Board of Supervisors did not find any violation
+of laws and regulations, or any circumstance that contravened the interests of the Bank in their performance of duties
+during the reporting period.
+Preparation of Annual Report Preparation and review procedures of the Bank's Annual Report were in compliance with
+laws, regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly, accurately
+and completely.
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+circumstance that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's
+purchase or sale of assets.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any circumstance that infringed upon the interests of the Bank. The
+approval, voting, disclosure and implementation of connected transactions complied with applicable laws and regulations
+and the Articles of Association of the Bank.
+Supervision on internal control. The Board of Supervisors supervised the effectiveness of the internal control system, the
+performance of internal control duties and the business compliance with laws and regulations. It paid close attention to the
+internal control system operation, policy development, handling of cases and risk events, supervision and inspection issues
+and implementation of remediation. It reinforced the supervision of key areas such as anti-money laundering, information
+disclosure and case prevention management and monitored the operation of internal control indicators and information
+system. It paid attention to the implementation and quality of the internal control assessment, reviewed internal control
+assessment report, and issued review opinions. It launched supervision and inspection and special surveys on connected
+transactions management, integration of technologies and financial business, business parameter management and
+compliance management of foreign exchange business, analyzed and researched into connected transactions risk control,
+mechanism of technological resource allocation and product innovation, business parameter management mode and
+compliance management of foreign exchange business, and put forth related recommendations for the purpose of further
+promoting the connected transactions management, improving the business parameter management mechanism, facilitating
+the development of technologies and financial business integration and raising the compliance management of foreign
+exchange business.
+Annual Report 2019
+Report of the Board of Supervisors
+Implementation of Resolutions Passed at the Shareholders' General Meeting During the reporting period, the Board
+of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders' General
+Meeting for consideration. The Board of Directors earnestly implemented the resolutions approved at the Shareholders'
+General Meetings.
+Review of the Internal Control Assessment Report The Board of Supervisors reviewed the 2019 Internal Control
+Assessment Report of the Bank and had no objection to the report.
+Implementation of Information Disclosure Rules During the reporting period, the Bank performed its duty
+of information disclosure in compliance with the regulatory requirements, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed was authentic,
+accurate and complete.
+Save as disclosed above, the Board of Supervisors had no objection to any other matters during the reporting period.
+134
+133
+Significant Events
+Supervision on risk management. The Board of Supervisors supervised the effectiveness and soundness of the risk
+management system and mechanism. It paid close attention to the enterprise risk management, capital management,
+consolidated management, compliance of major regulatory indicators and adjustments of regulatory policies. It strengthened
+the supervision on main material risks, and focused on credit system and mechanism reform, asset quality management,
+non-performing asset disposal, credit management of overseas institutions, exchange rate risk management, liquidity risk
+management, operational risk management, reputational risk management, country risk management and management
+of cross and transmissional risks, as well as the management of risk exposures of major geographical locations, institutions
+and products. It launched special surveys on the management of real estate financing risks, the management of internet
+financing business risks and the development of inclusive financial business of the Bank, analyzed and researched into
+the management of real estate financing access, the management mechanism of internet financial transactions, as well
+as the mechanism development and product innovation of inclusive finance business risk control, and put forth related
+recommendations to promote the healthy development of real estate financing business, internet financial transactions and
+inclusive finance business.
+ICBC
+Members of the Board of Directors
+As at the disclosure date of the results, the composition of the Board of Directors of the Bank is as follows:
+Executive Directors: Mr. Chen Siqing and Mr. Gu Shu;
+Non-executive Directors: Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Lu Yongzhen, Mr. Feng Weidong and Ms. Cao Liqun;
+Independent Non-executive Directors: Mr. Anthony Francis Neoh, Mr. Yang Siu Shun, Ms. Sheila Colleen Bair, Mr. Shen Si,
+Mr. Nout Wellink and Mr. Fred Zuliu Hu.
+Industrial and Commercial Bank of China Limited
+Board of Directors
+Annual Report 2019
+Report of the Board of Supervisors
+131
+Work of the Board of Supervisors
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations, regulatory requirements
+and the Articles of Association, performed supervision duties earnestly, carried out supervision of duty performance and
+due diligence, financial activities, risk management and internal control, etc. in a down-to-earth way, and promoted the
+improvement in corporate governance and the legal, compliant and prudent development.
+Performance of the Board of Supervisors. In 2019, the Board of Supervisors held five meetings, considered 20 proposals
+including proposals on the Annual Report of the Bank and its abstract, the assessment reports on the performance of
+duties, and the Corporate Social Responsibility Report, heard 11 special reports on the topics including the operation,
+audit opinion on the financial statements and the internal control and compliance work, and reviewed 23 special reports
+including the reports on the supervision in each quarter of 2019, the Group's AML work and the annual risk management.
+It issued opinions in an objective and fair manner and appropriately exercised voting rights. The members of the Board
+of Supervisors diligently and faithfully fulfilled their duties, attended three Shareholders' General Meetings, attended six
+directors communication meetings, nine meetings of the Board of Directors and 27 meetings of special committees as non-
+voting attendees, and attended 12 relevant meetings of the Senior Management. It strengthened theoretical learning and
+summary of experience from practice, and held discussions and exchanges with the boards of supervisors of several peer
+financial institutions to learn from their experiences. External supervisors of the Bank worked for more than 15 working days
+in the Bank, complying with the relevant requirements.
+Supervision on the performance of duties. The Board of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance with the laws and regulations, the Articles of Association of the
+Bank, and the implementation of the resolutions of the Shareholders' General Meeting and the Board of Directors and
+the regulatory opinions. It paid close attention to the duty performance and due diligence of the Board of Directors and
+the Senior Management in corporate governance, development strategy and operation and management. It carried out
+duty performance assessment, talked with members of the Board of Directors and the Senior Management, and general
+managers of the related Head Office departments for comments and suggestions, and then formulated its assessment
+opinions on the duty performance of the Board of Directors, the Senior Management and their members in combination
+with their day-to-day duty performance supervision to promote the legitimate and compliant duty performance. It earnestly
+performed strategic assessment, assessed how scientific, reasonable and effective the Bank's development strategies were
+and the implementation of those strategies to strengthen strategy management. It launched a special supervision on
+authorization management of businesses exposed to credit risk, analyzed and researched into the problems that existed
+in the authorization management of businesses exposed to credit risk, and put forth related recommendations to further
+improve the authorization management of businesses exposed to credit risk.
+Financial supervision. The Board of Supervisors supervised the Bank's financial activities as well as decisions on and
+implementation of material financial issues. It paid close attention to the changes in key financial figures, material financial
+approval and accounting, changes in accounting standards and financial policies and their impacts. It carefully reviewed
+periodic reports, final accounts and profit distribution plan, regularly heard reports on business conditions and audit findings,
+conducted spot checks on major accounting issues, verified the authenticity of financial information, and issued independent
+opinions in an objective and fair manner. It oversaw the independence and effectiveness of external audit work, reminded
+auditors of the areas of focus in audit and evaluated the duty performance of external auditors. It carried out special
+surveys on fixed assets investment management and equity management, analyzed and researched into situations including
+the preparation and implementation of fixed assets investment plans, daily management and accounting of fixed assets,
+establishment and operation of equity management system, equity investment management and governance of subsidiaries,
+and put forward relevant suggestions to further strengthen the fixed assets investment management and improve the equity
+management system.
+132
+Report of the Board of Supervisors
+Significant Events
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+At the crunch time of decisive victory for the elimination of poverty, the Bank will resolutely implement the arrangements
+of the CPC Central Committee and the State Council in precision poverty alleviation and actively implement all regulatory
+requirements. It will focus on the financial needs of areas in deep poverty and provide more resources to them to shake off
+poverty by taking consideration of new needs and characteristics of poverty alleviation work and on the basis of constantly
+improving various existing work measures. It will make full use of the advantages of ICBC's platform and customer resources
+to explore a fresh model of poverty alleviation through cooperation between the western and eastern of China and domestic
+and foreign cooperation. In response to the requirements that the focus of financial poverty alleviation shifting to relative
+poverty and poverty reduction work becoming normalized after China accomplishes its poverty elimination tasks, the Bank
+will bring poverty alleviation into the overall development of rural vitalization strategies, and strive to establish a long-term
+development mechanism that provides financial services for rural vitalization and improves short links in issues relating
+to agriculture, rural areas and farmers from the perspectives of top-level design, key areas, personal financial services,
+and outlet improvement. The Bank will formulate assistance measures according to the poverty alleviation process and
+development needs for areas of targeted poverty alleviation, continue to increase investment in areas of extreme poverty,
+and concentrate efforts on helping localities achieve their poverty alleviation goals as scheduled. For counties and cities
+that have already been lifted out of poverty, the Bank will implement the principle of "shaking off poverty rather than
+responsibility, policies, assistance and supervision", and continue to keep the poverty alleviation policies on stable footing. It
+will bring finance in to better play, explore new comprehensive support plan integrating finance, intelligence and commerce
+to help local governments make overall planning and try to find measures for rural vitalization.
+Environmental Information
+The Bank actively implemented the national concept of green development and the sustainable development strategy,
+regarded green credit strengthening as a key strategy for long-term pursuit. It comprehensively carried out green finance
+from the aspects of credit policy, management process, business innovation and its own performance, gave full support
+to the development of green industries, reinforced the prevention and control of environmental and social risks, and
+continuously promoted low-carbon operation to improve economic, social and ecological benefit and set the example of a
+responsible state-owned leading bank.
+The Bank carried out the compliance revision of the industry (green) credit policy in a timely manner, implemented the
+differentiated credit policy, and effectively guided the "green adjustment" of the Bank's investment and financing structure.
+It improved the green credit classification management, and implemented dynamic classification and differentiated
+management by different types of customers and loans pursuant to the Equator Principles and IFC Performance
+Standards and Guidelines. It conducted special audit on green credit, improved the guarantee mechanism of green
+credit, comprehensively implemented the "one-vote veto system" of green credit, and strengthened the investment and
+financing environment and social risk management. As at the end of the reporting period, the balance of green credit
+for energy conservation and environment protection projects and services such as ecological protection, clean energy,
+energy conservation and environment protection and resources recycling use reached RMB1,350,838 million, increasing by
+RMB113,080 million or 9.1% over the end of 2018.
+The Bank actively advocated the concept of green and environment protection, focused on promoting green office,
+strengthened the resource-saving consciousness. It regarded "paperless" office as an important starting point for promoting
+green development and advocating green and low carbon, and actively promoted paperless meetings and training. It pushed
+on the transformation of energy-saving technologies, increased energy conservation and emission reduction, and took
+serious measures to energy management and control. It optimized the operation mode of important energy-consuming
+equipment by means of technology upgrade and equipment transformation. The Bank cultivated and implemented the
+concept of green development and persisted in green and environment protection activities to earnestly improve the
+ecological environment and fulfill its corporate social responsibilities.
+Key Audit Matters The Audit Committee has reviewed the key audit matters in the audit report and concluded that
+it is unnecessary to provide a supplementary explanation.
+138
+ICBC
+IV. Subsequent Precision Poverty Alleviation Plan
+Investment Banking
+Promotion Committee
+Institutional Banking
+Promotion Committee
+Promotion Committee
+Retail Banking
+Organizational Chart
+Supervisory Board Office
+Financial Assets Service
+Management Committee
+Board of Supervisors
+Corporate Banking
+Promotion Committee
+Asset & Liability
+Management Committee
+Financial Technology
+Domestic Branches
+Internet Finance
+ICBC
+Inclusive Finance
+Promotion Committee Development Committee Promotion Committee
+Domestic Institutions
+Overseas Institutions
+Tier-one Branches
+(including Directly Managed Branches)
+(36)
+Risk Management
+Committee
+142
+2. Channel Management Department includes Remote Banking Center.
+Retired Staff
+Management
+Department
+Department
+Information
+Management
+Department
+Corporate
+Culture
+Department
+Party-related
+Affairs
+Department
+Channel
+Management
+Department*
+Modern Finance
+Research Institute
+International
+Banking
+Department*
+Directly
+Managed
+Institutions
+Staff Union Working
+Committee
+Private Banking
+Department
+Hangzhou Institute
+of Financial Managers
+Business Research &
+Development Center
+Data Center
+Inspection Office of
+the Party Committee
+Software
+Development Center
+Security Department
+Notes: 1. Internet Finance Department includes Innovation Research & Development Center, User Development
+Center and Operation Support Center.
+Banking Departments of Tier-one Branches and
+Tier-two Branches (451)
+3. International Banking Department includes International Settlement Documentation Center.
+4. Operation Management Department includes Intensive Operation Center (Foshan) and Intensive
+Operation Center (Chengdu).
+Changchun Institute
+of Financial Managers
+Overseas Branches
+and their Institutions
+(52)
+ICBC Leasing
+Grassroots Branches
+14,254 532,480
+5,256 25 25 25,450
+stckoja 8,256 85 -2.4 334,650
+000010656 25 0.5 54,250
+stakona
+stekojat 00915
+ICBC
+148
+performing back-testing, which included the
+assessment of the model's predictions using
+quantitative methods to measure the outputs against
+the actual realised observations, including how they
+change over time.
+comparing the economic factors used in the models
+with market information to assess whether they were
+aligned with market and economic development.
+assessing key parameters involving judgments
+by seeking evidence from external sources and
+comparing it with internal records including historical
+loss experience and type of collaterals. As part
+of these procedures, we inquired management
+for the reasons of modifications of estimates and
+model parameters, considered the consistency of
+management judgments, and assessed key internal
+controls over the input of underlying data into the
+models.
+•
+How the matter was addressed in our audit
+The loss allowance for loans and advances to customers,
+other than those corporate loans and advances which are
+credit-impaired, is measured using the risk parameters
+method. The key parameters include probability of default
+(PD), loss given default (LGD) and exposure at default
+(EAD), which are derived from considerations including the
+historical overdue data, historical loss ratio, internal credit
+grading and other adjustment factors.
+The Group classifies financial instruments into three stages
+and recognises an impairment allowance based on the
+expected credit loss for the next 12 months or the entire
+lifetime of the financial asset, depending on whether credit
+risk on that financial instrument has increased significantly
+since initial recognition and whether an asset is considered
+to be credit-impaired respectively.
+The key audit matter
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers (continued)
+Key audit matters (continued)
+Independent Auditor's Report
+147
+Annual Report 2019
+g1
+adc
+StockkD1 12,256 25 25 25,480
+48 250
+52.2
+25
+(15,529)
+Corporate Strategy and
+Investor Relations
+Domestic Subsidiaries
+and their Branches
+ICBC Credit Suisse
+Asset Management
+ICBC-AXA
+ICBC Investment
+ICBC Technology
+ICBC Wealth Management
+Rural Banks
+Primary reporting line
+Overseas Subsidiaries
+and their Institutions
+(376)
+Secondary reporting line
+143
+Auditor's Report and
+Financial Statements
+0000000000
+000000
+00000
+000
+000
+12.00
+High 12,256 +223)/32,256.35
+Low 11.25072) 6,586.87
+STOCK INDEX 12,256
+940
+Annual Report 2019
+Asset & Liability
+Management
+Department
+Risk Management
+Department
+Legal Affairs
+Department (Consumer
+Protection Office)
+Time and term of
+commitment
+October 2006/
+No specific term
+November 2010/
+No specific term
+Taking effect from
+December 2019
+commitment
+is made
+Prospectus of
+Industrial and
+Commercial Bank
+of China Limited on
+Initial Public Offering
+(A Share)
+Prospectus on A
+Share Rights Issue
+of Industrial and
+Commercial Bank of
+China Limited
+Simplified Report of
+Changes in Equity of
+National Council for
+Social Security Fund
+Commitment
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or the
+listing place of the Bank, Huijin will not
+engage in or participate in any competitive
+commercial banking business including but
+not limited to granting loans, attracting
+deposits and providing settlement, fund
+custody, bank card and money exchange
+services. However, Huijin can engage in or
+participate in some competitive businesses
+by investing in other commercial banks.
+In this regard, Huijin has committed that
+it will: (1) fairly treat the investments in
+commercial banks and will not make
+any decision or judgment that will
+have adverse impact on the Bank or be
+beneficial to other commercial banks by
+taking advantage of the status of being
+a shareholder of the Bank or information
+obtained by taking advantage of the status
+of being a shareholder of the Bank; and
+(2) perform the shareholders' rights for the
+maximum interests of the Bank.
+According to the Notice of the State
+Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned
+Capital to Fortify Social Security Funds
+(Guo Fa [2017] No. 49), SSF shall perform
+the obligation of more than 3-year lock-
+up period as of the date of the receipt of
+transferred shares.
+Fulfillment of
+commitment
+As at 31
+December 2019,
+Huijin strictly
+fulfilled the above
+commitment
+Legal document
+under which the
+and did not
+do anything in
+violation of the
+commitment.
+and did not
+do anything in
+violation of the
+commitment.
+140
+ICBC
+Significant Events
+On 21 November 2018, the First Extraordinary General Meeting of 2018 reviewed and approved the Proposal on the Impact
+of Spot Return Diluted by Issuing Preference Shares and Corresponding Supplementary Measures of ICBC, and formulated
+supplementary measures for dilution of ordinary shareholders' spot return by issuing preference shares. In accordance with
+the relevant regulations of CSRC, the Directors and Senior Management members of the Bank have made a commitment
+that the measures to fill up the return can be effectively performed. For more details of the commitment, please refer to the
+announcements published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of ICBC.
+As at the end of the reporting period, the Bank has strictly implemented the return filling up measures, and there was no
+violation of the above-mentioned commitments by the Bank and its Directors and Senior Management members.
+Disciplinary Actions During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior
+Management members and controlling shareholders was subject to any investigation by competent authorities, coercive
+measures taken by judicial authorities or disciplinary inspection departments, transferred to judicial authorities or charged for
+criminal responsibility, case filing investigation or administrative penalty by CSRC, restricted access to market, identification
+as unqualified, major penalty by other administrative authorities of environmental protection, safety supervision, taxation,
+etc. or public reprimand by the stock exchanges.
+Annual Report 2019
+141
+As at 31
+December 2019,
+SSF strictly
+fulfilled the above
+commitment
+Organizational Chart
+for A shares
+obligation of
+Material Related Party Transactions
+Significant Events
+During the reporting period, the Bank did not enter into any material related party transactions.
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws and regulations of China and the relevant accounting standards.
+Material Contracts and Performance of Obligations thereunder
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material sub-contract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's assets, which were subject to disclosure.
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needs to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and the CBIRC.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies issued by CSRC and the State-owned Assets
+Supervision and Administration Commission of the State Council and relevant provisions of SSE, we, in the capacity
+of Independent Non-executive Directors of the Bank, reviewed external guarantees of the Bank on the principles of
+fairness, impartiality and objectivity, and hereby give our specific explanation and opinions as follows: upon review,
+external guarantees provided by the Bank mainly focus on issuance of letters of guarantee, which is part of the
+ordinary banking services within the business scope of the Bank as approved by relevant regulatory authorities. As at
+31 December 2019, the balance of letters of guarantee issued by the Bank totaled RMB483,879 million.
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+lock-up period
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Anthony Francis Neoh, Yang Siu Shun, Sheila Colleen Bair, Shen Si, Nout Wellink and Fred Zuliu Hu
+Annual Report 2019
+139
+Significant Events
+Commitments
+As at 31 December 2019, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Shareholder
+Huijin
+Type of
+commitment
+Commitment of
+non-competition
+SSF
+Commitment of
+performing the
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders and other related parties of the Bank occupied any fund of the Bank. The
+auditors have issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related
+Parties of Industrial and Commercial Bank of China Limited in 2019.
+Human Resources
+Department
+Board of Directors
+Strategy
+Committee
+Personal Banking
+Department
+Institutional Banking
+Department
+Inclusive Finance
+Department
+Settlement & Cash
+Management
+Department
+Bank Card
+Department
+(ICBC Peony Card
+Center)
+Internet Finance
+Department*
+Asset Management
+Department
+Asset Custody
+Department
+ICBC Bills Discounting
+Department
+Investment Banking
+Department
+Executive Office
+Precious Metal
+Business Department
+(Banking Department)
+Pension Business
+Department
+Supporting
+Departments
+Financial Technology
+Department
+Credit Approval
+Department
+Finance & Accounting
+Department
+Operation
+Management
+Department*
+assessing the reliability of expected credit loss
+models and parameters used, including evaluating
+probability of default, loss given default, exposure at
+default, discount rate, forward-looking adjustment
+and other adjustment factors, and evaluating the
+reasonableness of key management judgments
+involved.
+Internal Control &
+Compliance
+Department
+Special Financing
+Department
+Board of Directors' Office
+Management
+Department
+Credit and Investment
+Risk
+Management
+Committee
+Compensation
+Committee
+Corporate Social
+Responsibility and Consumer
+Protection Committee
+Nomination
+Committee
+Related Party
+Transactions Control
+Committee
+Audit Committee
+Global Market
+Department
+Internal Audit
+Sub-bureau
+US Risk Committee
+Head Office Departments, Profitability Units and
+Directly Managed Institutions of the Head Office
+Shareholders'
+General Meeting
+Senior Management
+Marketing
+Management
+Departments
+Profitability
+Units
+Risk
+Management
+Departments
+Comprehensive
+Administration
+Departments
+Corporate
+Banking
+Department
+Internal Audit Bureau
+assessing the information system controls,
+including general information technology
+control, completeness of key internal historical
+data, data transmission between systems,
+mapping of parameters of expected credit
+loss model, and system calculation of loss
+allowance for expected credit loss.
+The key audit matter
+evaluating the effectiveness of internal control
+operations related to provision for expected credit
+losses:
+29.
+Consolidated:
+220
+28. Deferred Income Tax Assets and Liabilities
+AUDITED FINANCIAL STATEMENTS
+218
+27. Property and Equipment
+146
+Other Assets
+INDEPENDENT AUDITOR'S REPORT
+Pages
+CONTENTS
+OSTOCK INDEX
+2,256
+0
++2565 28,433
+8.5 24,490
+266
+Pages
+0000
+222
+156
+Repurchase Agreements
+32.
+162
+Cash Flow Statement
+224
+Institutions
+160
+Statement of Changes in Equity
+Statement of Profit or Loss
+31. Due to Banks and Other Financial
+Statement of Financial Position
+223
+Fair Value through Profit or Loss
+157
+Other Comprehensive Income
+Financial Liabilities Designated as at
+Statement of Profit or Loss and
+30.
+158
+224
+High 005000
+197
+After the Reporting Period Event
+290
+21. Derivative Financial Instruments
+199
+55. Comparative Amounts
+290
+22. Reverse Repurchase Agreements
+205
+54.
+56. Approval of the Consolidated
+206
+Financial Statements
+24. Financial Investments
+209
+UNAUDITED SUPPLEMENTARY FINANCIAL
+25. Investments in Subsidiaries
+214
+INFORMATION
+23. Loans and Advances to Customers
+stck01a3
+199
+289
+50. Segment Information
+251
+17. Dividends
+197
+51.
+Financial Instrument Risk Management
+257
+18. Earnings Per Share
+Financial Institutions
+198
+Fair Value of Financial Instruments
+282
+19. Cash and Balances With Central Banks
+198
+53.
+Company-Level Statement of
+20. Due From Banks and Other
+Financial Position
+52.
+NOTES TO THE FINANCIAL STATEMENTS
+33.
+Certificates of Deposit
+44.
+191
+11. Operating Expenses
+241
+Transferred Financial Assets
+43.
+191
+10. Other Operating Income, Net
+Share Appreciation Rights Plan
+241
+190
+Net (Loss)/Gain on Financial Investments
+9.
+42. Notes to the Consolidated Cash Flow
+190
+Net Trading Income
+8.
+239
+Statement
+Entities
+242
+192
+of the Parent Company
+245
+49. Related Party Disclosures
+16. Profit Attributable to Equity Holders
+245
+48. Fiduciary Activities
+196
+15. Income Tax Expense
+12. Directors' and Supervisors' Emoluments
+245
+196
+14. Impairment Losses on Assets
+245
+46. Designated Funds and Loans
+195
+13. Five Highest Paid Individuals
+242
+45. Commitments and Contingent Liabilities
+47. Assets Pledged as Security
+190
+Net Fee and Commission Income
+7.
+4. Significant Accounting Judgements and
+229
+Other Liabilities
+36.
+168
+Summary of Significant Accounting Policies
+3.
+225
+37.
+35. Debt Securities Issued
+Basis of Preparation
+2.
+225
+34. Due to Customers
+164
+Corporate Information
+1.
+224
+164
+Share Capital
+229
+Estimates
+Involvement With Unconsolidated Structured
+41.
+189
+Net Interest Income
+6.
+238
+Components of Other Comprehensive Income
+40.
+188
+International Financial Reporting Standards
+235
+Reserves
+39.
+Impact of Issued But Not Yet Effective
+5.
+230
+Other Equity Instruments
+38.
+186
+291
+ ིི་རྨུ
+290
+26. Investments in Associates and
+Opinion
+assessing the key design and operational
+effectiveness of internal controls of the
+financial reporting process, including credit
+approval, recording, monitoring, re-evaluation
+of periodic credit grading, and the accrual
+of loss allowance; In particular, we assessed
+the design, implementation and operating
+effectiveness of the key internal controls over
+the classification of loans by credit quality
+across all stages;
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank") and
+its subsidiaries (the "Group") set out on pages 156 to 290, which comprise the consolidated statement of financial position
+as at 31 December 2019, the consolidated statement of profit or loss, the consolidated statement of profit or loss and other
+comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the
+year then ended, and a summary of significant accounting policies and other explanatory information.
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
+31 December 2019 and of its consolidated financial performance and its consolidated cash flows for the year then ended
+in accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+Basis for opinion
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code") together with any ethical requirements that are
+relevant to our audit of the consolidated financial statements in the People's Republic of China, and we have fulfilled our
+other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis for our opinion.
+Key audit matters
+146
+ICBC
+Independent Auditor's Report
+Key audit matters (continued)
+Impairment of loans and advances to customers
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+The Group uses the expected credit loss ("ECL") model
+to calculate the loss allowance in accordance with
+International Financial Reporting Standard 9 Financial
+instruments ("IFRS 9").
+Joint Ventures
+216
+Annual Report 2019
+145
+KPMG
+Independent Auditor's Report
+(Incorporated in the People's Republic of China with limited liability)
+Our audit procedures to assess loss allowance for expected
+credit losses included the following:
+How the matter was addressed in our audit
+Impairment of loans and advances to customers is a
+subjective area due to the degree of judgment applied
+by management in determining impairment allowances.
+From the Group's perspective, the determination of the
+loss allowances for loans and advances to customers is
+heavily dependent on the external macro environment and
+the Group's internal credit risk management strategy, and
+the judgments in determining the loss given default or the
+assessment of recoverable cash flows relating to individual
+loans and advances to customers, where loans and
+advances to customers were unsecured or were subject to
+potential collateral shortfalls.
+To the shareholders of Industrial and Commercial Bank of China Limited
+21
+Financial investments
+Reverse repurchase agreements
+Loans and advances to customers
+222222
+71,335
+20
+3,317,916
+1,042,368
+3,372,576
+962,449
+68,311
+23
+Derivative financial assets
+19
+Due from banks and other financial institutions
+1,551
+ASSETS
+31 December 2019 31 December 2018
+(In RMB millions, unless otherwise stated)
+31 December 2019
+Consolidated Statement of Financial Position
+157
+Annual Report 2019
+The notes on pages 164 to 290 form part of these financial statements.
+326,532
+324,069
+845,186
+16,326,552
+1,216
+324,981
+Cash and balances with central banks
+734,049
+4,519,182
+7,647,117
+158
+The notes on pages 164 to 290 form part of these financial statements.
+27,699,540
+380,404
+480,399
+30,109,436
+29
+TOTAL ASSETS
+Other assets
+58,375
+62,536
+28
+Deferred income tax assets
+290,404
+286,561
+27
+Property and equipment
+29,124
+15,046,132
+6,754,692
+Financial investments measured at fair value through
+profit or loss
+962,078
+805,347
+Financial investments measured at fair value through
+other comprehensive income
+24
+1,476,872
+Financial investments measured at amortised cost
+5,208,167
+322,853
+Investments in associates and joint ventures
+26
+32,490
+1,430,163
+326,532
+27,809
+Equity holders of the parent company
+Non-controlling interests
+312,224
+297,676
+1,137
+313,361
+1,047
+298,723
+18
+0.86
+0.82
+18
+0.86
+0.82
+Details of the dividends declared and paid or proposed are disclosed in Note 17 to the financial statements.
+The notes on pages 164 to 290 form part of these financial statements.
+156
+ICBC
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+Year ended 31 December 2019
+298,723
+(In RMB millions, unless otherwise stated)
+313,361
+(78,428)
+Profit for the year
+EARNINGS PER SHARE
+Basic (RMB yuan)
+Diluted (RMB yuan)
+11
+(207,776)
+(194,203)
+14
+(178,957)
+(161,594)
+389,269
+369,324
+2,520
+3,089
+391,789
+372,413
+15
+(73,690)
+Profit for the year
+Other comprehensive income (after tax, net):
+Items that will not be reclassified to profit or loss:
+(1,238)
+Reserve from cash flow hedging instruments
+(634)
+(53)
+Other comprehensive income recognised under equity method
+(530)
+488
+Foreign currency translation differences
+4,271
+3,325
+Others
+(329)
+(903)
+Subtotal of other comprehensive income for the year
+10,708
+Total comprehensive income for the year
+Total comprehensive income attributable to:
+(64)
+other comprehensive income
+Credit losses of debt instruments measured at fair value through
+24,599
+Changes in fair value of equity instruments designated as at
+fair value through other comprehensive income
+Other comprehensive income recognised under equity method
+Others
+Items that may be reclassified subsequently to profit or loss:
+Changes in fair value of debt instruments measured at
+Notes
+2019
+2018
+313,361
+298,723
+324,069
+40
+1,605
+11
+=5
+(9)
+(5)
+(5)
+fair value through other comprehensive income
+8,026
+(38)
+Notes
+(431,228)
+Equity holders of the parent company
+assessing the level 1 fair values, on a sample basis,
+by comparing the fair values applied by the Group
+with publicly available market data.
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+valuation, independent price verification, front office
+and back office reconciliations and model approval
+for financial instruments.
+•
+Our audit procedures to assess the fair value of financial
+instruments included the following:
+How the matter was addressed in our audit
+We identified assessing the fair value of financial
+instruments as a key audit matter because of the degree of
+complexity involved in valuing certain financial instruments
+and because of the degree of judgment exercised by
+management in determining the inputs used in the
+valuation models.
+The Group has developed its own models to value certain
+level 2 and level 3 financial instruments, which also involve
+significant management judgment.
+The valuation of the Group's financial instruments, held
+at fair value, is based on a combination of market data
+and valuation models which often require a considerable
+number of inputs. Many of these inputs are obtained
+from readily available data, in particular for level 1 and
+level 2 financial instruments in the fair value hierarchy,
+the valuation techniques for which use quoted market
+prices and observable inputs, respectively. Where one or
+more significant inputs are unobservable in the valuation
+techniques, as in the case of level 3 financial instruments,
+then estimates need to be developed which can involve
+significant management judgment.
+Financial instruments carried at fair value account for a
+significant part of the Group's assets and liabilities. The
+effect of fair value adjustments of financial instruments
+may impact either the profit or loss or other comprehensive
+income.
+The key audit matter
+Refer to the accounting policies on "Note 3. (5) to the Financial Statements: Financial Instruments", "Note 4. to the
+Financial Statements: Significant Accounting Judgments and Estimates" and "Note 52. to the Financial Statements: Fair
+Value of Financial Instruments".
+Fair value of financial instruments
+Key audit matters (continued)
+Independent Auditor's Report
+151
+Annual Report 2019
+evaluating the disclosures in the financial statements
+in relation to the recognition of interests in and
+consolidation of structured entities with reference
+to the requirements of the prevailing accounting
+standards.
+involving our internal valuation specialists to assist us
+in performing independent valuations, on a sample
+basis, of level 2 and level 3 financial instruments
+and comparing our valuations with the Group's
+valuations. Our procedures included developing
+parallel models, obtaining inputs independently and
+verifying the inputs.
+engaging our internal valuation specialists to conduct
+model validation, on a sample basis, for the valuation
+of complex financial instruments.
+assessing the appropriate application of fair value
+adjustment that form an integral part of fair values,
+inquiring of management about any changes in the
+fair value adjustment methodologies and assessing
+the appropriateness of the inputs applied; and
+assessing whether the disclosures in the consolidated
+financial statements, including fair value hierarchy
+information and sensitivity to key inputs,
+appropriately reflected the Group's exposure to
+financial instrument valuation risk with reference
+to the requirements of the prevailing accounting
+standards.
+Independent Auditor's Report
+153
+Annual Report 2019
+evaluating the design, implementation and
+operating effectiveness of the cybersecurity
+management mechanism, the operational security
+of key information infrastructure, data and client
+information management, and monitoring and
+emergency management.
+evaluating the design, implementation and operating
+effectiveness of the significant accounts-related
+IT automated controls which are relevant to the
+accuracy of system calculation, and the consistency
+of data transmission, covering business in corporate
+loans, financial asset service, interbank business,
+bills, retail business and others, as well as key
+accounting procedures; and
+assessing the design, implementation and
+operating effectiveness of key internal controls
+over the continued integrity of all major IT systems
+fundamental to dealing with the financial data,
+particularly financial reporting.
+We involved our internal IT specialists in our assessment of
+the IT systems and controls over financial reporting, which
+included carrying out the following audit procedures:
+How the matter was addressed in our audit
+assessing management's judgment over
+whether the structured entity should be
+consolidated or not; and
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are
+fundamentally reliant on complex IT systems and control
+processes which are driven by significant transaction
+volumes caused by the size of the customer base both in
+the corporate and the retail banking businesses in China
+and globally.
+Of particular importance are system calculations and data
+logic regarding significant accounts, including interest
+calculations, as well as interfaces between business
+management systems and accounting systems.
+Automated accounting procedures and IT environment
+controls, which include IT governance, controls over
+program development and changes, access to programs
+and data and IT operations, are required to be designed
+and to operate effectively to ensure accurate financial
+reporting.
+As one of the largest banking groups in the world, the
+Group's IT systems are necessarily large and complex.
+IT systems and controls over financial reporting
+The key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+ICBC
+152
+With the continuous and rapid increase of the volume
+of on-line transactions of the Group, as well as the
+continuous development and application of new
+technologies, the Group is facing increasing challenges on
+cyber security and data protection.
+evaluating management's analysis of the
+structured entity, including qualitative
+analysis and the calculation of the magnitude
+and variability associated with the Group's
+economic interests in the structured entity,
+to assess management's judgment over the
+Group's ability to influence its own returns
+from the structured entity;
+inspecting the risk and reward structure of
+the structured entity, including any capital
+or return guarantee, provision of liquidity
+support, commission paid and distribution of
+the returns, to assess management's judgment
+as to the exposure, or rights, to variable
+returns from the Group's involvement in such
+an entity;
+How the matter was addressed in our audit
+149
+Annual Report 2019
+evaluating whether the disclosures relating to
+loss allowance for expected credit losses met the
+disclosure requirements of the prevailing accounting
+standards.
+evaluating the experience,
+competence and integrity of the external appraiser
+engaged by the Group to value certain property and
+illiquid collateral, including comparing the valuations
+with externally derived data such as commodity
+prices and real estate valuations; and
+independence,
+sources.
+performing credit assessments for the selected credit
+impaired corporate loans and advances by assessing
+the forecast of recoverable cash flows through
+inquiry, applying judgment and our own research.
+We evaluated the timing and means of realisation of
+collateral and considered other sources of repayment
+asserted by management. We also evaluated the
+consistency of management's application of key
+assumptions and compared them with our own data
+selecting samples to assess the reasonableness of
+management judgments on whether the credit risk
+has increased significantly since initial recognition
+and whether credit impairment has occurred. We
+analysed the loan portfolio by industry sector to
+select samples in industries vulnerable to the current
+economic situation and regulation measures. We
+also focused on loans with perceived higher risk
+and selected samples from non-performing loans,
+overdue but performing loans and borrowers with
+negative warning signs or adverse press coverage.
+Independent Auditor's Report
+.
+We identified the loss allowance for expected credit losses
+as a key audit matter because of the inherent uncertainty
+and management judgments involved, and because the
+loss allowance is significant to the financial results and
+capital of the Group.
+Loss allowances for the credit-impaired corporate loans
+and advances are measured using the discounted cash
+flow method. Management exercises judgment in
+determining recoverable cash flow based on a range
+of factors. These factors include available remedies for
+recovery, the financial situation of the borrowers, collateral
+valuation, the seniority of the claim and the existence
+and cooperativeness of other creditors. Whilst the Group
+appoints an external appraiser for the valuation of certain
+property and other illiquid collateral, enforceability,
+timing and means of realisation also affect the ultimate
+collectability and thereby the amount of expected credit
+loss allowances at the end of the reporting period.
+The key audit matter
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers (continued)
+Key audit matters (continued)
+Independent Auditor's Report
+ICBC
+How the matter was addressed in our audit
+Other information
+Key audit matters (continued)
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+We identified the recognition of interests in and
+consolidation of structured entities as a key audit matter
+because of the complex nature of certain of these
+structured entities and because of the judgment exercised
+by management in the qualitative assessment of the terms
+and the nature of each entity.
+In accordance with the relevant regulatory requirements,
+the Group set up a new wholly-owned subsidiary this year
+to independently manage wealth management products
+issued by the Group to investors, and accordingly the
+manager of such structured entities has been changed
+from the Bank to the new subsidiary.
+In determining whether the Group should retain any partial
+interests in a structured entity or should consolidate a
+structured entity, management is required to consider the
+risks and rewards retained, the power the Group is able
+to exercise over the activities of the entity and its ability
+to influence the Group's own returns from the entity.
+These factors are not purely quantitative and need to
+be considered collectively in the overall substance of the
+transactions.
+The key audit matter
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+Recognition of interests in and consolidation of structured entities (continued)
+Key audit matters (continued)
+Independent Auditor's Report
+Recognition of interests in and consolidation of structured entities
+ICBC
+inspecting the related contracts, internal
+establishment documents and information
+disclosed to the investors to understand the
+purpose of the establishment of the structured
+entity and the involvement the Group has
+with the structured entity and to assess
+management's judgment over whether the
+Group has the ability to exercise power over
+the structured entity;
+selecting significant structured entities of each key
+product type including the wealth management
+products of which the manager has been changed
+from the Bank to a newly set-up subsidiary of the
+Group and performing the following procedures for
+each structured entity selected:
+making enquiries of management and inspecting
+documents relating to the judgment process over
+whether a structured entity is consolidated or not
+to assess whether the Group has a robust process in
+this regard.
+Our audit procedures to assess the recognition of interests
+in and consolidation of structured entities included the
+following:
+How the matter was addressed in our audit
+The Group may acquire an ownership interest in, or act
+as a sponsor to, a structured entity, through initiating,
+investing or retaining shares in a wealth management
+product, an investment fund, an asset management plan,
+a trust plan, a structured lease or an asset-backed security.
+The Group may also retain partial interests in derecognised
+assets due to guarantees or securitisation structures.
+Structured entities are generally created to achieve a
+narrow and well defined objective with restrictions around
+their ongoing activities which include providing investment
+services and products to customers and managing the
+Group's assets and liabilities.
+The key audit matter
+150
+Non-controlling interests
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+Net trading income
+145,301
+155,600
+7
+NET FEE AND COMMISSION INCOME
+(17,046)
+(16,041)
+7
+Fee and commission expense
+162,347
+171,641
+572,518
+606,926
+(375,576)
+948,094
+1,038,154
+69
+8
+8,447
+2,846
+Net (loss)/gain on financial investments
+Attributable to:
+PROFIT FOR THE YEAR
+Income tax expense
+PROFIT BEFORE TAXATION
+Share of profits of associates and joint ventures
+OPERATING PROFIT
+Impairment losses on assets
+Operating expenses
+166
+725,121
+3,111
+8,711
+10
+OPERATING INCOME
+Other operating income, net
+1,345
+(3,682)
+9
+776,002
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+Fee and commission income
+Interest expense
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+•
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Independent Auditor's Report
+ICBC
+154
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This
+report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report.
+Auditor's responsibilities for the audit of the consolidated financial statements
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue as
+a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
+unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+Responsibilities of the directors for the consolidated financial statements
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+NET INTEREST INCOME
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, related safeguards.
+Interest income
+2018
+2019
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2019
+Consolidated Statement of Profit or Loss
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+155
+27 March 2020
+Central, Hong Kong
+10 Chater Road
+8th Floor, Prince's Building
+Certified Public Accountants
+KPMG
+The engagement partner on the audit resulting in this independent auditor's report is Wong Yuen Shan.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+Annual Report 2019
+Profit before taxation
+ICBC
+CASH FLOWS FROM OPERATING ACTIVITIES
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see Note 3(21)).
+21,408,934
+Income tax payable
+96,192
+84,741
+Deferred income tax liabilities
+28
+1,873
+1,217
+Debt securities issued
+35
+22,977,655
+742,875
+Other liabilities
+36
+525,125
+409,819
+TOTAL LIABILITIES
+27,417,433
+25,354,657
+EQUITY
+Equity attributable to equity holders of the parent company
+Share capital
+617,842
+34
+Due to customers
+341,354
+31 December 2019 31 December 2018
+LIABILITIES
+Due to central banks
+Financial liabilities designated as at fair value through profit or loss
+30
+1,017
+102,242
+481
+87,400
+Derivative financial liabilities
+21
+85,180
+73,573
+Due to banks and other financial institutions
+31
+2,266,573
+1,814,495
+Repurchase agreements
+32
+263,273
+514,801
+Certificates of deposit
+33
+355,428
+Other equity instruments
+Notes
+Reserves
+37
+General Manager of Finance
+and Accounting Department
+Annual Report 2019
+159
+Consolidated Statement of Changes In Equity
+Year Ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Issued
+Zhang Wenwu
+Other
+Cash flow
+Balance as at 1 January 2019
+share equity
+capital instruments
+356,407 86,051 152,043
+Capital
+Surplus
+General revaluation translation
+hedging
+reserve
+reserve
+reserve
+Investment currency
+The notes on pages 164 to 290 form part of these financial statements.
+and President
+Gu Shu
+Vice Chairman
+356,407
+356,407
+38
+206,132
+86,051
+39
+745,111
+680,877
+Retained profits
+1,368,536
+1,206,666
+2,676,186
+2,330,001
+Non-controlling interests
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+15,817
+14,882
+2,692,003
+2,344,883
+30,109,436
+27,699,540
+Chen Siqing
+Chairman
+www
+reserve
+(In RMB millions, unless otherwise stated)
+Consolidated Statement of Financial Position
+Repurchase agreements
+Due to banks and other financial institutions
+Due to central banks
+Financial liabilities designated as at fair value through profit or loss
+Net increase/(decrease) in operating liabilities:
+(942,798)
+(1,777,326)
+150,444
+(124,746)
+Other assets
+Certificates of deposit
+(1,258,665)
+Loans and advances to customers
+158,257
+(190,149)
+Reverse repurchase agreements
+(201,848)
+(41,058)
+Financial investments measured at fair value through profit or loss
+(88,016)
+(139,844)
+Due from banks and other financial institutions
+(1,416,849)
+Due to customers
+Other liabilities
+Net cash flows from operating activities before tax
+724,133
+694,521
+(67,781)
+(72,839)
+791,914
+767,360
+1,136,393
+1,926,103
+(237,261)
+173,533
+1,780,568
+66,036
+32
+70,966
+(531,619)
+(251,349)
+9,762
+1,533,642
+447,878
+534
+(12,329)
+12,103
+ICBC
+162
+The notes on pages 164 to 290 form part of these financial statements.
+Net cash flows from operating activities
+Income tax paid
+297,030
+31 December 2019
+135,320
+Net decrease/(increase) in operating assets:
+8,574
+Unrealised loss on foreign exchange
+161,594
+178,957
+14
+Impairment losses on assets
+283
+(1,360)
+Amortisation of financial investments
+2,339
+20,009
+2,315
+Amortisation
+20,315
+26,229
+Depreciation
+(3,089)
+(2,520)
+Share of profits of associates and joint ventures
+Adjustments for:
+372,413
+391,789
+11
+Interest expense on debt securities issued
+28,116
+23,175
+598,319
+618,583
+(229)
+(978)
+9
+Dividend income
+(1,787)
+(1,215)
+other assets (other than repossessed assets)
+Net gain on disposal and overage of property and equipment and
+168
+(11,312)
+Net (gain)/ loss on changes at fair value
+151
+(2,316)
+8
+Net trading (gain)/ loss on equity investments
+(1,116)
+4,660
+Net loss/(gain) on disposal of financial investments
+(2,659)
+(2,356)
+Accreted interest on impaired loans
+Due from central banks
+CASH FLOWS FROM INVESTING ACTIVITIES
+reserve
+261,720 279,064
+1,047 298,723
+Other comprehensive income
+(note 40)
+24,369
+3,408
+(43)
+(429)
+27,305
+27,305
+reserve (i)
+297,676 297,676
+reserve (ii)
+Dividends - ordinary shares
+2017 final (note 17)
+Dividends preference shares
+(note 17)
+Appropriation to surplus
+Appropriation to general
+Capital injection by non-controlling
+shareholders
+Change in share holding in
+24,369
+Total comprehensive income
+Profit for the year
+(32) (32,190)
+13,533 2,108,866
+Total
+share equity
+capital instruments
+Balance as at 31 December 2017
+Capital Surplus
+reserve reserve
+356,407 86,051 152,043 232,703
+General revaluation translation
+reserve reserve reserve
+Cash flow
+hedging
+Non-
+reserve
+Other
+reserves
+Impact of adopting IFRS 9
+264,892 (31,752) (26,302)
+22,877
+(3,761)
+(334)
+Balance as at 1 January 2018
+356,407
+86,051
+152,043
+232,703 264,892
+(8,875) (26,302)
+(3,761)
+(334)
+587,489 1,097,544 2,127,491
+22,877 (55,035) (32,158)
+610,366 1,042,509 2,095,333
+Retained
+Subtotal profits Total interests equity
+13,565 2,141,056
+controlling
+3,408
+Investment currency
+(43)
+27,305
+16
+49
+49
+(327)
+(327)
+16
+356,407 86,051 152,043 261,720
+279,064 15,495 (22,894) (3,804)
+(747)
+680,877 1,206,666 2,330,001
+(1)
+14,882 2,344,883
+Includes the reversal made by overseas branches in the amounts of RMB9 million and appropriation made by subsidiaries in
+the amounts of RMB2,345 million, respectively.
+The notes on pages 164 to 290 form part of these financial statements.
+Annual Report 2019
+161
+Consolidated Cash Flow Statement
+Year Ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes
+2019
+2018
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB103 million and
+RMB596 million, respectively.
+1
+16
+16
+(ii)
+297,676 324,981
+504 27,809
+1,551 326,532
+(85,823) (85,823)
+(85,823)
+(4,506)
+(4,506)
+(4,506)
+29,017
+29,017
+(29,017)
+14,172
+14,172
+(14,172)
+76
+76
+subsidiaries
+Dividends to non-controlling
+shareholders
+Other comprehensive income
+transferred to retained earnings
+Others
+Balance as at
+31 December 2018
+(429)
+reserve
+Other
+Foreign
+312,224 322,853
+1,216
+79 10,708
+324,069
+(89,315) (89,315)
+(89,315)
+(4,525) (4,525)
+(4,525)
+reserve (i)
+Appropriation to general
+reserve (ii)
+(853) 10,629
+Capital injection by other equity
+149,967
+Capital deduction by other equity
+instruments holders
+(29,886)
+(2,901)
+Change in share holding in
+subsidiaries
+(3)
+30,571
+30,571
+instruments holders
+(649)
+4,326
+7,805
+15,495
+(22,894)
+(3,804)
+Profit for the year
+Other
+reserves Subtotal profits
+(747) 680,877 1,206,666 2,330,001
+312,224 312,224
+Retained
+Non-
+controlling Total
+Total interests equity
+14,882 2,344,883
+1,137
+313,361
+Other comprehensive income
+(note 40)
+7,805
+4,326
+(649)
+(853)
+10,629
+10,629
+Total comprehensive income
+Dividends ordinary shares
+2018 final (note 17)
+Dividends-preference shares
+(note 17)
+Appropriation to surplus
+(30,571)
+Issued
+25,955
+(25,955)
+12
+(8)
+8
+3
+3
+3
+3
+356,407 206,132 149,139 292,291 305,019 23,280 (18,568) (4,453)
+(1,597)
+745,111 1,368,536 2,676,186
+(20)
+15,817 2,692,003
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB2 million and RMB1,194 million,
+respectively.
+The notes on pages 164 to 290 form part of these financial statements.
+160
+ICBC
+(i)
+Consolidated Statement of Changes In Equity
+Year Ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB53 million and RMB785 million,
+respectively.
+(338)
+(338)
+57
+1
+149,967
+149,967
+(2,901)
+(32,787)
+(32,787)
+(3)
+(8)
+(11)
+Capital injection by non-controlling
+shareholders
+Dividends to non-controlling
+shareholders
+Other comprehensive income
+transferred to retained earnings
+Others
+Balance as at
+31 December 2019
+(i)
+(ii)
+(20)
+1
+57
+25,955
+Purchases of property and equipment and other assets
+6,920
+Consolidated Cash Flow Statement
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring. On 27 October 2006, the Bank was successfully listed on both Shanghai Stock Exchange and The Stock
+Exchange of Hong Kong Limited.
+CORPORATE INFORMATION
+1.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+163
+Annual Report 2019
+The notes on pages 164 to 290 form part of these financial statements.
+973,512
+(351,828)
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking and Insurance Regulatory Commission
+(the "CBIRC") of the PRC. The Bank obtained its business license with unified social credit code 91100000100003962T from
+the State Administration for Industry and Commerce of the PRC. The legal representative is Chen Siqing and the registered
+office is located at No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC.
+(393,469)
+Interest paid
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+1,509,523
+1,450,413
+42
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+32,729
+9,462
+Effect of exchange rate changes on cash and cash equivalents
+1,074,551
+The Bank's stock codes of A Shares and H Shares listed on the Shanghai Stock Exchange and the Stock Exchange of Hong
+Kong Limited are 601398 and 1398, respectively. The Bank's offshore preference share is listed on the Stock Exchange of
+Hong Kong Limited and the stock code is 4604. The Bank's domestic preference shares are listed on the Shanghai Stock
+Exchange and the stock codes are 360011 and 360036.
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+2. BASIS OF PREPARATION
+Employee Benefits "Plan Amendment, Curtailment or Settlement"
+Annual Improvements to IFRS Standards 2015-2017 Cycle
+Amendments to IAS 19
+Investment in associates and joint ventures "Long-term interests in
+associates and joint ventures"
+Financial instruments "Prepayment features with negative
+compensation and modifications of financial liabilities'
+Amendments to IAS 28
+Amendments to IFRS 9
+Uncertainty over income tax treatments
+Leases
+IFRIC 23
+IFRS 16
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS"), and
+International Financial Reporting Interpretations Committee ("IFRICS")) that are effective in 2019 and relevant to the Group's
+operation.
+(3) Change in accounting policies
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+164
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4.
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative
+financial instruments, financial assets and financial liabilities measured at fair value through profit or loss ("FVTPL") and
+financial assets measured at fair value through other comprehensive income ("FVOCI"), as further explained in the respective
+accounting policies below.
+(2) Basis of preparation
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+(1) Statement of compliance
+1,520,330
+1,509,523
+Cash and cash equivalents at beginning of the year
+(43,536)
+(24,989)
+Interest paid on debt securities
+1,140,674
+Proceeds from issuance of debt securities
+125
+57
+150,000
+Capital injection by non-controlling shareholders
+Proceeds from issuance of other equity instruments
+CASH FLOWS FROM FINANCING ACTIVITIES
+Net cash flows from investing activities
+1,613,475
+Proceeds from disposal of associates and joint ventures
+Dividends received
+Investments in associates and joint ventures
+Proceeds from sale and redemption of financial investments
+(731,745)
+(875,967)
+1,732
+3,839
+1,168
+752
+1,045,746
+(22,917)
+The principal effects of adopting these amended IFRSS are as follows:
+Repayment of debt securities
+(968,222)
+(68,572)
+(35,924)
+112,874
+NET DECREASE IN CASH AND CASH EQUIVALENTS
+Net cash flows from financing activities
+Proceeds from disposal of property and equipment and
+other assets (other than repossessed assets)
+Purchases of financial investments
+(4,950)
+Cash payment for other financing activities
+(327)
+(338)
+Dividends paid to non-controlling shareholders
+(4,506)
+(4,525)
+Dividends paid on preference shares
+(85,823)
+(89,315)
+Dividends paid on ordinary shares
+(11)
+Acquisition of non-controlling interests
+(32,787)
+Cash payment for redemption of other equity instruments
+(1,020,942)
+(799)
+IFRS 16, "Leases"
+IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has
+recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its
+obligation to make lease payments. Lessor accounting remains similar to previous accounting policies.
+•
+The amendments to IAS 19 clarify that:
+Amendments to IAS 19, Employee Benefits "Plan Amendment, Curtailment or Settlement"
+The adoption has no material impact on the financial position and the financial result of the Group.
+The 2015-2017 cycle of annual improvements contain amendments to four standards including IFRS 3 Business
+combinations, IFRS 11 Joint arrangements, IAS 12 Income taxes and IAS 23 Borrowing costs.
+Annual Improvements to IFRS Standards 2015-2017 Cycle
+The adoption has no material impact on the financial position and the financial result of the Group.
+The IASB has clarified that IFRS 9 applies to long-term interests that, in substance, form part of the entity's net investment in
+an associate or joint venture. In applying IFRS 9, the entity does not take account of any adjustments to the carrying amount
+of long-term interests that arise from applying IAS 28.
+Amendments to IAS 28, Investment in associates and joint ventures "Long-term interests in
+associates and joint ventures"
+.
+The adoption has no material impact on the financial position and the financial result of the Group.
+Financial assets containing prepayment features with negative compensation can now be measured at amortised cost
+or at fair value through other comprehensive income (FVOCI) if they meet the other relevant requirements of IFRS 9;
+•
+•
+The IASB has changed IFRS 9's requirements in two areas of financial instruments accounting.
+Amendments to IFRS 9, Financial instruments "Prepayment features with negative compensation
+and modifications of financial liabilities"
+The adoption has no material impact on the financial position and the financial result of the Group.
+If it is not probable, then the entity should reflect the effect of uncertainty in its accounting for income tax by using
+the "expected value" approach or the "the most likely amount" approach whichever better predicts the resolution
+of the uncertainty and in that case the tax amounts in the financial statements will not be the same as the amounts in
+the tax return.
+If it is probable, then the entity should measure current and deferred tax consistently with the tax treatment in its tax
+return;
+•
+For the companies that have modified or exchanged fixed rate financial liabilities that do not result in derecognition,
+they were required to recalculate the amortised cost of the modified financial liability by discounting the modified
+contractual cash flows using the original EIR; and recognise any adjustment in profit or loss.
+on amendment, curtailment or settlement of a defined benefit plan, a company should use updated actuarial
+assumptions to determine its current service cost and net interest for the period; and
+the effect of the asset ceiling cost is disregarded when calculating the gain or loss on any settlement of the plan and is
+dealt with separately in other comprehensive income.
+The adoption has no material impact on the financial position and the financial result of the Group.
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+An associate is an entity in which the Group or Bank has significant influence.
+(3) Associates and Joint ventures
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+(2) Non-controlling interests
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses
+(see Note 3(21)).
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding
+who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are
+directed by means of contractual arrangements.
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to, variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+(1) Subsidiaries
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+167
+Annual Report 2019
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretations and
+amendments.
+Under the interpretation, the key test is whether it is probable that the tax authority will accept the entity's tax treatment.
+This interpretation provides guidance on how to apply IAS 12, Income taxes when there is uncertainty over whether a tax
+treatment will be accepted by the tax authority.
+IFRIC 23, "Uncertainty over income tax treatments"
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Group
+When measuring lease liabilities for leases, the Group discounted lease payments using its incremental borrowing rate at
+1 January 2019. Each institution of the Group uses interest rate that a lessee would have to pay to borrow over a similar
+term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar
+economic environment as incremental borrowing rate.
+The Group has initially applied IFRS 16 using the modified retrospective approach. Under this approach, comparative
+information is not restated. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the
+amount of any prepaid or accrued lease payments. At the date of initial application, the Group initially recognised lease
+liabilities of RMB26,867 million and right-of-use assets of RMB30,296 million and no impacts on the beginning balance of
+retained earnings.
+Impacts on IFRS 16 transition
+The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include
+renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term,
+which significantly affects the amount of lease liabilities and right-of-use assets recognised.
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date, discounted using the Group's incremental borrowing rate. The lease liability is subsequently increased by the interest
+cost on the lease liability and decreased by lease payment made. It is remeasured when there is a change in future lease
+payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under
+a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is
+reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Group presents the
+lease liability in other liabilities.
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted
+for certain remeasurements of the lease liability. The Group applies IAS 36 Impairment of Assets to determine whether the
+right-of-use asset is impaired and to account for any impairment loss identified. The Group presents the right-of-use asset in
+other assets.
+Significant accounting policies
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+165
+Annual Report 2019
+However, the Group has elected not to recognise right-of-use assets and lease liabilities for some leases of low-value assets,
+and leases with less than 12 months of lease term. The Group recognises the lease payments associated with these leases as
+an expense on a straight-line basis over the lease term.
+The Group leases many assets, including properties, electronic equipments, transportation, and other office equipments.
+As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease
+transferred substantially all of the risks and rewards of ownership. Under IFRS 16, the Group includes all major leases in the
+balance sheet, and recognises right-of-use assets and lease liabilities.
+The Group acting as a lessee
+For a contract that contains a lease component, the Group has elected not to separate non-lease components and will
+instead account for the lease and non-lease components as a single lease component.
+On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which
+transactions are leases. It applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were
+not identified as leases under IAS 17 and IFRIC 4 were not reassessed. Therefore, the definition of a lease under IFRS 16 has
+been applied only to contracts entered into or changed on or after 1 January 2019.
+Previously, the Group determined at contract inception whether an arrangement was or contained a lease under IFRIC 4
+Determining Whether an Arrangement contains a Lease ("IFRIC 4"). The Group now assesses whether a contract is or
+contains a lease based on the new definition of a lease. Under IFRS 16, a contract is, or contains, a lease if the contract
+conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
+Definition of a lease
+The Group has applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial
+application is recognised in retained earnings at 1 January 2019. Accordingly, the comparative information presented for
+2018 has not been restated — i.e. it is presented, as previously reported, under IAS 17 and related interpretations. The
+details of the changes in accounting policies are disclosed below:
+Bank
+The Group has initially adopted IFRS 16 Leases ("IFRS 16") from 1 January 2019.
+Operating lease commitment at 31 December 2018
+- Recognition exemption of low-value assets and leases
+Notes to the Financial Statements
+ICBC
+166
+11,741
+26,867
+Lease liabilities recognised as at 1 January 2019
+7,392
+Finance lease liabilities recognised as at 31 December 2018
+11,741
+19,475
+Present value discounted using the incremental borrowing rate at 1 January 2019
+12,807
+Lease payments under IFRS 16 (without discounting)
+476
+1,013
+Extension options reasonably certain to be exercised
+(746)
+(948)
+with less than 12 months of lease term at transition
+13,077
+21,683
+as disclosed in the Group's consolidated financial statements
+(2,522)
+21,748
+Year Ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes
+2019
+2018
+(34,159)
+(60,496)
+9,587
+(2,466,939)
+2,855
+(2,171,838)
+1,495,633
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount equal to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a)
+credit risk for the description of how the Group determines when a significant increase in credit risk has occurred.
+(8) Derecognition of financial assets and liabilities
+Stage 1: A financial instrument of which the credit risk has not significantly increase since initial recognition. The amount
+equal to 12-month expected credit losses is recognised as loss allowance.
+Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
+12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the end
+of the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+The maximum period considered when estimating ECLs is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+The Group's method of measuring expected credit losses of financial instruments reflects the following elements: (i) unbiased
+weighted average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money;
+(iii) reasonable and evidence-based information about past events, current conditions, and future economic forecasts that
+are available at no additional cost or effort at the end of the reporting period.
+ECLS are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
+shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows
+that the Group expects to receive).
+Measurement of ECLs
+Financial assets measured at fair value, including debt investments or equity securities measured at FVTPL, equity securities
+designated as at FVOCI and derivative financial assets, are not subject to the ECL assessment.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+171
+Annual Report 2019
+The Group classifies financial instruments into three stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+The three risk stages are defined as follows:
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels. The
+residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from 15 to
+25 years.
+Over the shorter of the economic useful
+lives and remaining lease terms
+14.29%-50%
+2-7 years
+1.94%-20%
+Annual
+depreciation rate
+Estimated residual
+value rate
+0%-3%
+Estimated
+useful life
+5-50 years
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+Properties and buildings
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+(16) Property and equipment
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+(15) Precious metals
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+According to the policy of classification of financial assets (refer to Note 3(5)), the reverse repurchase agreements held by
+the Group were divided into different classification according to the entity's business model for managing the financial
+instruments and the contractual cash flow characteristics of the assets: financial assets measured at amortised cost and
+financial assets measured at FVTPL.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+176
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+Loan commitments and financial guarantee contracts.
+Debt instruments measured at FVOCI; and
+Financial assets measured at amortised cost;
+The Group recognises loss allowances for ECL on:
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+-
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+FVOCI, or at FVTPL.
+(ii) Classification and subsequent measurement of financial assets
+Classification of financial assets
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+169
+Annual Report 2019
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+Measurement of fair value
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities measured
+at FVTPL, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial
+assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs.
+At initial recognition, financial liabilities are classified into two categories: financial liabilities measured at FVTPL and other
+financial liabilities.
+At initial recognition, financial assets are classified into three categories: financial assets measured at amortised cost,
+financial assets measured at FVOCI and financial assets measured at FVTPL.
+(i) Initial recognition of financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(5) Financial instruments
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken to other comprehensive income. On disposal of a foreign operation, the
+cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in
+profit or loss.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
+Annual Report 2019
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis.
+(6) Impairment of the financial assets
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+Other financial liabilities
+For the financial liabilities designated as at FVTPL, the gains and losses arose are accounted for in accordance with the
+following requirements: (i) the amount of changes in the fair value of the financial liability arising from changes in the
+Group's own credit risk should be included in other comprehensive income; (ii) other changes in fair value of the financial
+liabilities are recognised in current profit or loss. If the treatment of the impact of changes in the financial liabilities' own
+credit risk will create or enlarge the accounting mismatch in profit or loss in accordance with (i), the Group shall recognise
+the entire gain or loss of the financial liabilities (including the amount of the impact of changes in its own credit risk) in profit
+and loss. When these liabilities are derecognised, the cumulative gain or loss previously recognised in other comprehensive
+income is reclassified from equity to retained earnings.
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial liability)
+or it is designated as such on initial recognition.
+Financial liabilities measured at FVTPL
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+(iii) Classification and subsequent measurement of financial liabilities
+These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net
+gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other
+comprehensive income are reclassified to retained earnings.
+Equity instruments measured at FVOCI
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised
+in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are
+reclassified to profit or loss.
+Debt instruments measured at FVOCI
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, through the amortisation process or in order to recognise impairment gains or losses.
+Financial assets measured at amortised cost
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+Notes to the Financial Statements
+170
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Financial assets measured at FVTPL
+Subsequent measurement of financial assets
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets or both. The Group determines the business model for managing the financial assets according to the facts and based
+on the specific business objective for managing the financial assets determined by the Group's key management personnel.
+In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
+contractual terms of the instrument. For the purposes of this assessment, 'principal' is defined as the fair value of the
+financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk
+associated with the principal amount outstanding during a particular period of time and for other basic lending risks and
+costs, as well as a profit margin. The Group also assesses whether the financial asset contains a contractual term that could
+change the timing or amount of contractual cash flows such that it would not meet this condition.
+All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+(4) Foreign currency translation
+177
+Financial Statements for the year ended 31 December 2019
+174
+ICBC
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+Derivatives
+(11) Derivatives and hedge accounting
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instruments' duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redemption price is charged to equity.
+Preference shares and perpetual bonds issued containing both equity and liability components are accounted for using the
+accounting policy for convertible instruments containing an equity component. Preference shares and perpetual bonds issued
+not containing an equity component are accounted for using the accounting policy for other convertible instruments not
+containing an equity component.
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after
+considering the definition of financial assets, financial liabilities and equity instruments.
+(10) Preference shares and perpetual bonds
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at FVTPL. The equity component is not re-measured.
+Notes to the Financial Statements
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+(9) Convertible instruments
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+Financial liabilities
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+173
+Annual Report 2019
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+Sales of assets on condition of repurchase
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets
+are set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets
+are not derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation
+of financial assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent
+of its continuing involvement, derecognise the remaining. The carrying amount of the transferred assets is apportioned
+between the derecognised portion and the retained portion based on their respective relative fair values, and the difference
+between the carrying amount of the derecognised portion and the total consideration paid for the derecognised portion is
+recorded in profit or loss.
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+If the main contract included in the hybrid contract is an asset within the scope of a new financial instrument standard, the
+embedded derivative is no longer split from the main contract of the financial asset, but the hybrid financial instrument as
+a whole is related to the classification of the financial asset provision. If the main contract included in the hybrid contract is
+not an asset within the scope of the new financial instrument standard, when their economic characteristics and risks are not
+closely related to those of the hybrid contract, those separate instruments with the same terms as the embedded derivative
+would meet the definition of a derivative, and the hybrid instrument is not carried at FVTPL, certain derivatives embedded
+in other financial instruments should be split from the hybrid contract and treated as separate derivatives. These embedded
+derivatives are measured at fair value with the changes in fair value recognised in profit or loss.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+(13) Presentation of financial instruments
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(12) Trade date accounting
+hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised directly in
+other comprehensive income; the gain or loss relating to the ineffective portion is recognised in profit or loss immediately.
+Gains and losses accumulated in other comprehensive income are included in profit or loss when the foreign operation is
+disposed of as part of the gain or loss on the disposal.
+Net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow
+Net investment hedges
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gain or
+loss existing in other comprehensive income at that time remains in other comprehensive income until the hedged forecast
+transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
+was reported in other comprehensive income is immediately transferred to profit or loss.
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+Cash flow hedges
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the terms
+are substantially different, the Group derecognises the original financial asset and recognises a 'new' asset under the revised
+terms. If the renegotiation or modification does not result in derecognition, but lead to changes in contractual cash flows, the
+Group assesses whether a significant increase in credit risk has occurred, based on comparing the risk of a default occurring
+under the revised terms as at the end of the reporting period with that as at the date of initial recognition under original terms.
+175
+Annual Report 2019
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria after
+taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has been
+sold, terminated or exercised. If the hedged items are derecognised, the unamortised fair value is recorded in profit or loss.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVOCI. For fair value hedges, the carrying amount of the hedged item is
+adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the gains
+and losses from both are taken to profit or loss or other comprehensive income.
+Fair value hedges
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+At the inception of a hedging relationship, the Group formally designates the hedge instruments and the hedged items,
+and documents the hedging relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash flows
+and are assessed on an ongoing basis to analyse the sources of hedge ineffectiveness which are expected to affect the hedging
+relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness requirement
+relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains the same,
+the Group would rebalance the hedging relationship.
+Hedge accounting
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Securitisation
+Notes to the Financial Statements
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+172
+Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss
+in the period in which the recovery occurs.
+The book value of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect
+of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines that the
+debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to
+the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply
+with the Group's procedures for recovery of amounts due.
+Write-off
+ECLs are remeasured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises an impairment gain or loss for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through a loss allowance account; for debt instruments that are measured at FVOCI, the loss
+allowance is recognised in other comprehensive income. The Group recognises loss allowances for loan commitments and
+financial guarantee contracts through other liabilities (allowance for impairment losses on credit commitments).
+Presentation of allowance for ECL
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount equal
+to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a) credit risk for the definition of credit-
+impaired financial assets.
+ICBC
+178
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUS, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+(19) Business combination and goodwill
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+(18) Repossessed assets
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+(17) Land use rights
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+(In RMB millions, unless otherwise stated)
+ICBC
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset.
+Notes to the Financial Statements
+(7) Modification of loan contracts
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+the Group's contractual rights to the cash flows from the financial asset expire;
+Financial asset is derecognised when one of the following conditions is met:
+Financial assets
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before
+the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to
+dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the
+condition required by the terms and conditions of the lease.
+The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified as
+a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset irrespective
+of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance lease.
+When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset
+arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the
+Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
+the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period
+of use;
+the lessee has the right to direct the use of the asset.
+For a contract that contains lease and non-lease components, the Group has elected not to separate non-lease components
+from lease components and account for the lease and non-lease components as a single lease component.
+(ii) As a lessor
+The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of
+12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases in
+profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+184
+When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset,
+or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
+the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly specified
+in a contract and should be physically distinct, or capacity portion or other portion of an asset that is not physically
+distinct but it represents substantially all of the capacity of the asset and thereby provides the customer with the
+right to obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive
+substitution right throughout the period of use, then the asset is not identified;
+(i)
+there is a change in future lease payments resulting from a change in an index or a rate used to determine those
+payments;
+there is a change in the amounts expected to be payable under a residual value guarantee;
+Under the following circumstances after the commencement date, the Group remeasures lease liabilities based on the
+present value of revised lease payments:
+A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with
+a corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments
+not included in the measurement of the lease liability is charged to profit or loss or included in the cost of assets where
+appropriate as incurred.
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date. Each institution of the Group uses interest rate that a lessee would have to pay to borrow over a similar term, and with
+a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
+environment as incremental borrowing rate.
+The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase
+option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying
+asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful
+life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in
+accordance with the accounting policy described in Note 3 (21).
+As a lessee
+there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option, or
+there is a change in the exercise of the extension or termination option.
+Insurance income recognition
+Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the
+finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease.
+The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value of
+the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the lease.
+The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return.
+The derecognition and impairment of the finance lease receivable are recognised in accordance with the accounting policy in
+Note 3(5) and 3(6). Variable lease payments not included in the measurement of net investment in the lease are recognised
+as income as they are earned.
+Insurance premium income is recognised when:
+(i) Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+(ii)
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+(i)
+(ii)
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+Annual Report 2019
+183
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(28) Leases
+A contract is lease if the lessor conveys the right to control the use of an identified asset to lessee for a period of time in
+exchange for consideration.
+At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
+the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
+To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
+-
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+Lease receipts from operating leases is recognised as income using the straight-line method over the lease term. The initial
+direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss over
+the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are recognised
+as income as they are earned.
+(ii)
+A party is considered to be related to the Group if:
+For purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial
+recognition, by applying the credit adjusted effective interest rate to their amortised cost; and
+(i)
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument, where appropriate, to the
+book value of the financial asset, or the amortised cost of financial liability. The calculation takes into account all contractual
+terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are
+directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit losses.
+Interest income is calculated by applying the effective interest rate to the book value of financial assets and is included in
+interest income, except for:
+Interest income
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+(26) Revenue recognition
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+(ii) Financial assets that are not purchased or originated credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets improve their qualities so that they are
+no longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after
+the application of the above-mentioned rules, then the interest income is calculated by applying the effective interest
+rate to their book value.
+181
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+Insurance contract liabilities
+(iii) Related income can be reliably measured.
+The related economic benefits are likely to flow to the Group;
+(ii)
+The insurance contract is issued, and related insurance risk is undertaken by the Group;
+(i)
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Annual Report 2019
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUS) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+Fee and commission income
+(i)
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred income tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Current tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+(27) Income tax
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+182
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled
+in exchange for transferring promised services to customers, and income is recognised when its performance obligation in
+contracts is satisfied.
+ICBC
+Net trading income
+Dividend income is recognised when the Group's right to receive payment is established.
+(29) Related parties
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+The Group does not provide service with an alternative use to the Group, and the Group has an enforceable
+right to payment for performance completed to date.
+The customer controls the service provided by the Group in the course of performance; or
+The customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+(ii)
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+ICBC
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+When the Group can no longer withdraw an offer of those benefits;
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+Early retirement benefits
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when they are incurred.
+180
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Termination benefits
+(24) Fiduciary activities
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+(25) Insurance contracts
+Insurance contracts classification
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. The contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+(i)
+(ii)
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+(20) Provisions
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Post-employment benefits-defined contribution plans
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+(21) Asset impairment
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+Annual Report 2019
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organisations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+179
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(22) Cash and cash equivalents
+Cash and cash equivalents refer to short-term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+(23) Employee benefits
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Short-term employee benefits
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+Notes to the Financial Statements
+188
+Dividend income
+The IASB issued the amendments to IFRS 9, IAS 39 and IFRS 7, which aims to address uncertainties related to the ongoing
+reform of interbank offered rates ("IBOR").
+185
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(30) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments (refer to Note 3(6)) and the amount initially recognised less the cumulative amount of income. Any increase in
+the liability relating to a financial guarantee is taken to the statement of profit or loss.
+The amendments provide targeted relief for financial instruments qualifying for hedge accounting in the lead up to IBOR
+reform. They are mandatory and apply to all hedging relationships directly affected by uncertainties related to IBOR reform.
+The amendments are expected to have no material impact on financial position and financial performance.
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+Annual Report 2019
+4.
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that
+have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
+financial period are described below.
+Measurement of the expected credit loss allowance
+The measurement of the expected credit loss allowance for financial assets measured at amortised cost and FVOCI and with
+exposure arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex
+models and significant assumptions about future economic conditions and credit behavior (the likelihood of customers
+defaulting and the resulting losses). Refer to Note 51(a) credit risk for the explanation of the inputs, assumptions and
+estimation techniques used in measuring ECL.
+Impairment of goodwill
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUS to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+186
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+Income tax
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+(vi) the entity is controlled or jointly controlled by a person identified in (a);
+(a)
+the party is a person or a close member of that person's family and that person:
+(i)
+has control or joint control over the Group;
+(ii)
+has significant influence over the Group; or
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+or
+(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+(b)
+(i)
+the entity and the Group are members of the same group;
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(iii)
+the entity and the Group are joint ventures of the same third party;
+(iv)
+one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+the party is an entity where any of the following conditions applies:
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+(31) Contingent liabilities
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+Interest Rate Benchmark Reform'
+Insurance contracts²
+Classification of Liabilities as Current or Non-current³
+Sale or contribution of assets between an investor and its associate or joint venture
+1
+Effective for annual periods beginning on or after 1 January 2020, early adoption is permitted.
+2
+Effective for annual periods beginning on or after 1 January 2021, early adoption is permitted only for companies that also
+apply IFRS 9 and IFRS 15.
+Applying retrospectively for annual periods beginning on or after 1 January 2022, early adoption is permitted.
+Definition of Material'
+3
+Effective for annual periods is to be determined, early adoption is permitted.
+Further information about those changes that are expected to affect the Group is as follows:
+Fair value of financial instruments
+The IASB has issued amendments to IFRS 3 that seek to clarify the definition of business. The amendments include an
+election to use a concentration test. If a preparer chooses not to apply the concentration test, or the test is failed, then the
+assessment focuses on the existence of a substantive process. The effect of these changes is that the new definition of a
+business is narrower, which could result in fewer business combinations being recognised. The amendments may require a
+complex assessment to decide whether a transaction is a business combination or an asset acquisition.
+The amendments are expected to have no material impact on financial position and financial performance.
+Amendments to IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies,
+Changes in Accounting Estimates and Errors, "Definition of Material"
+The amendments clarify the definition of material and how it should be applied by including in the definition guidance that
+until now has featured elsewhere in IFRS Standards. In addition, the explanations accompanying the definition have been
+improved and the amendments ensure that the definition of material is consistent across all IFRS Standards.
+The amendments are expected to have no material impact on financial position and financial performance.
+Amendments to IFRS 9, Financial Instruments, IAS 39, Financial Instruments: Recognition
+and Measurement, and IFRS 7, Financial instruments: Disclosures, "Interest Rate Benchmark
+Reform"
+4
+Clarifying what is a business'
+Amendments to IFRS 3, Business Combinations "Clarifying what is a business"
+IAS 1 Amendments
+IFRS 10 and IAS 28 Amendments
+Determination of control over investees
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls securitisation vehicles, investment funds, wealth management products, asset management plans, trust plans or
+asset-backed securities.
+Securitisation vehicles
+Investment funds, wealth management products, asset management plans, trust plans and
+asset-backed securities
+The Group acts as manager to a number of investment funds, wealth management products, asset management plans, trust
+plans and assets-backed securities. When assessing whether controls such a structured entity, the Group would determine
+whether it exercises the decision-making rights as a principal or an agent and usually focuses on the assessment of the
+aggregate economic interests of the Group in the entity (comprising any carried interests and expected management fees)
+and the decision-making authority of the entity. The Group would also determine whether another entity with decision-
+making rights is acting as an agent for it.
+For further disclosure in respect of unconsolidated investment funds, wealth management products, asset management
+plans, trust plans and assets-backed securities in which the Group has an interest or for which it is a sponsor, see Note 41.
+Annual Report 2019
+187
+Notes to the Financial Statements
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+IFRS 7 Amendments
+IFRS 17
+IAS 1 and IAS 8 Amendments
+IFRS 9, IAS 39 and
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING
+STANDARDS
+5.
+IFRS 3 Amendments
+15
+President's Statement
+Annual Report 2019
+Stability stems from accelerated transformation. The Bank fostered its sustainability and various development drivers
+in a number of areas with vast room for growth and strong radiating effects. It registered RMB155.6 billion net fee and
+commission income, an increase of 7.1% from last year. Following an addition of over 43.00 million new personal customers
+in the year, which represented the strongest growth in recent years, the Bank's total number of personal customers reached
+650 million. The number of ICBC credit card users exceeded 100 million, leading in the global banking industry; and
+42.03 million new ETC customers were registered in the year, the largest increment in the market. Based on a solid customer
+base and consistent service innovations, the Bank saw an increase of RMB1.90 trillion in domestic RMB deposits (including
+interbank deposits), leading the market both in aggregate and increment. Corporate and personal banking businesses were
+more interconnected to foster advantages throughout the G-B-C chain. Steady progress was made in the transformation
+of businesses such as asset management, private banking and investment banking. With ICBC Wealth Management, ICBC
+(Austria) and Greece Representative Office starting operation, the Bank has further improved its internationalized layout and
+reinforced the cross-border, cross-market service capability.
+Stability is attributed to strengthened risk management on all fronts. Determined to win the battle of preventing and
+resolving financial risks, the Bank prioritized its tasks, took the initiative to tackle the priorities, and played a "ballast stone"
+role in stabilizing the financial sector. The Group tightened overall credit risk control, perfected the risk control mechanism in
+key areas and for major customers, worked harder to dispose of non-performing assets by category, and improved the asset
+quality quarter by quarter. The NPL ratio fell for 12 consecutive quarters. The Group established platforms to monitor the
+cross risks and investment and financing risks, which could display different types of information uniformly and dynamically
+monitor diverse risks and issue alerts to prevent cross-risk transmission. Compliance management was intensified at home
+and abroad to implement relevant governance measures and fortify the compliance culture.
+In 2019, the Bank achieved stable development despite rising domestic and international risks and challenges in a
+complicated situation, once again withstanding the cyclical and practical test. The Group recorded RMB313.4 billion in net
+profit, representing an increase of 4.9% from the previous year. Profit before provision was RMB570.7 billion, representing
+an increase of 6.9%. The NPL ratio dropped 0.09 percentage points to 1.43% from the end of the previous year. Allowance
+to NPLs rose 23.56 percentage points to 199.32% from the end of the previous year. The capital adequacy ratio climbed
+1.38 percentage points to 16.77%. Cost-to-income ratio stood at 25.79%, staying in a satisfactory level in the industry.
+Stability is rooted in the sound interaction between finance and economy. Serving the real economy is the obligation
+of the financial sector and the principal law governing its development. By implementing the counter-cyclical policies and
+increasing financing support, the Bank registered new domestic RMB loans of RMB1.33 trillion, representing a year-on-
+year increase of RMB172.3 billion or 9.8%. In 2019, new RMB-denominated bond investment accumulatively reached
+RMB1.5 trillion at home, including RMB676.0 billion local government bond investment, ranking first in the market. In
+serving the real economy, the Bank gave priority to the high-quality development of manufacturing, launched the "Year
+of Financial Services for Manufacturing" program, and granted nearly RMB120.0 billion new manufacturing loans after
+the recovery of NPLs disposal, driving the balance to RMB1.45 trillion, which remained to be the largest in the market. In
+particular, the balance of mid-to-long term manufacturing loans and credit loans accounted for 33% and 37% respectively.
+The Bank enhanced the quality and efficiency of inclusive finance, and inclusive loans increased by more than 50% from the
+beginning of the year, five times of the average growth of total loans. The three guarantees for private enterprises, including
+special fund, special credit grant and special service team, were improved, and loans for them increased by RMB175.4 billion
+or 10% from the beginning of the year. The Bank gave full play to the three scientific innovation centers at the Head Office
+level and 20 special branches, launched a series of ICBC New Energy Funds on a pilot basis, and issued public funds at the
+SSE STAR Market among the first batch to provide more support for new economic drivers such as the happiness industries
+and loT.
+President's Statement
+President's Statement
+14
+President Gu Shu
+13
+Annual Report 2019
+Stability is born out of FinTech innovations. FinTech is a keyword of the Bank's innovative development in the past
+year. Promoting the in-depth integration of technology and finance on a full range of dimensions, including ecology,
+scenario, architecture, technology and institution, the Bank has created an all-round intelligent banking system without
+boundary. Integrating online and offline businesses and connecting diverse domains, the system boasts intelligent and
+inclusive customer service, open and interconnected financial ecology, shared and connected operations, and efficient and
+flexible product innovation. ICBC Information and Technology Co., Ltd. was set up in the Xiongan New Area to "serve the
+society, co-build ecology, lead innovation and attract talents". FinTech institute and 5G and blockchain labs were created to
+explore the R&D mode integrating "production, study, research and application" and upgrade the technological innovation
+capability across the Bank. The Bank launched the intelligent banking ecosystem ECOS 1.0 to demonstrate its achievements
+in FinTech innovation. In particular, the dual-core IT architecture comprised of the "host plus open platform" and the open
+financial ecosphere for win-win cooperation marked a new stage in the Bank's intelligent banking and digital banking
+development.
+27 March 2020
+ICBC
+In general, the world economy remains in a period of profound adjustments after the international financial crisis, with
+increasing hotspots of turmoil and risk around the globe. While the domestic economy has remained generally stable, it is
+facing mounting downward pressure, especially with the heavy blow from the sudden COVID-19 outbreak. However, we
+must keep in mind that the economic fundamentals for sustained growth have not changed, with strong resilience, great
+potential and ample leeway. In the past 36 years, ICBC has formed a sound foundation and unique advantages. We have the
+confidence and capability to keep up the solid operations throughout the economic cycle. We will assist in the nation's "Six
+Stabilities" campaign with our own stability, and continue to contribute to the high-quality economic development.
+In 2019, the developed economies showed subdued growth momentum, and emerging market economies also witnessed
+weakened growth. In the international financial market, it can be seen the continuous fluctuation of US dollar index,
+the general depreciation in the currencies of emerging markets, the continued upward trend in stock markets of major
+economies and the slight decrease in the interest rate of global monetary market generally.
+ICBC
+Chairman: Chen Siqing
+ICBC
+18
+The asset scale of the Chinese banking sector grew steadily, with the quality of credit assets remaining stable overall. At the
+end of 2019, the total assets of financial institutions in China's banking sector were RMB290.0 trillion, up 8.14% year on
+year. The balance of NPLs of commercial banks reached RMB2.4 trillion, with a NPL ratio of 1.86% and allowance to NPLs
+of 186.08%. Besides, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were
+10.92%, 11.95% and 14.64% respectively.
+The PBC persistently implemented a prudent monetary policy, lowered the reserve requirement ratio (RRR) three times, and
+flexibly conducted open market operation and medium-term lending facilities (MLF) to maintain a reasonable abundance of
+liquidity. It deepened the interest rate liberalization reform by reforming and improving the formation mechanism of Loan
+Prime Rate (LPR), and promoting the pricing benchmark conversion of existing loans. It established and improved the "three
+graded RRRS and two preferential RRRS" framework, and guided financial institutions to step up the credit support for small
+and micro enterprises, private enterprises and manufacturing by giving full play to the role of re-lending, rediscounting and
+other instruments. Furthermore, the PBC promoted the risk disposal of key financial institutions in a proper and orderly
+manner and established the "four lines of defense" to guard against the liquidity risk of medium- and small-sized banks.
+Both monetary credit and social financing maintained a stable growth. At the end of 2019, the balance of M2 was
+RMB198.6 trillion, up 8.7% year on year. The outstanding RMB loans reached RMB153.1 trillion, increasing by 12.3% year
+on year. The balance of RMB deposits amounted to RMB192.9 trillion, up 8.7% from the previous year. The existing social
+financing scale stood at RMB251.3 trillion, a year-on-year increase of 10.7%. The total issuance amount of various bonds in
+the bond market reached RMB45.3 trillion, up 3.1% year on year. At the end of 2019, the Shanghai Composite Index and
+the Shenzhen Component Index increased by 22.3% and 44.1% respectively over the end of last year. The central parity of
+RMB against the US dollar was RMB6.9762, a depreciation of 1.6% from the end of last year.
+China's economic performance kept stable on the whole with major economic indicators remaining in a reasonable range.
+In 2019, China's gross domestic product (GDP), consumer price index (CPI), retail sales of consumer goods, fixed asset
+investment (excluding rural households), industrial added value of above-scale enterprises, and total imports and exports rose
+by 6.1%, 2.9%, 8.0%, 5.4%, 5.7% and 3.4% respectively.
+16
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+17
+Annual Report 2019
+Chairman of the Board of Supervisors Yang Guozhong
+27 March 2020
+President: Gu Shu
+澍
+Discussion and Analysis
+情
+15.22
+26-1
+Equity attributable to equity holders
+2,676,186
+2,330,001
+2,127,491
+1,969,751
+1,789,474
+of the parent company
+institutions
+Share capital
+356,407
+356,407
+356,407
+356,407
+Net core tier 1 capital (2)
+2,457,274
+2,232,033
+356,407
+2,265,860
+2,016,799
+16,514,992
+289,512
+280,654
+on loans (1)
+Investment
+7,647,117
+Total liabilities
+27,417,433
+Due to customers
+22,977,655
+6,754,692
+25,354,657
+21,408,934
+Due to banks and other financial
+2,266,573
+1,814,495
+5,756,704 5,481,174
+23,945,987 22,156,102
+19,562,936
+1,706,549
+5,009,963
+20,409,261
+18,113,931
+2,030,108
+1,874,976
+1,701,495
+Net tier 1 capital (2)
+5.73
+5.29
+4.80
+Basic earnings per share
+0.86
+0.82
+0.79
+0.77
+0.77
+Diluted earnings per share
+の
+0.82
+0.79
+0.77
+0.77
+Credit rating
+S&P(4)
+6.30
+11,933,466
+6.93
+Per share data (in RMB yuan)
+2,657,523
+2,312,143
+2,110,060
+1,954,770
+1,781,062
+Net capital base (2)
+3,121,479
+2,644,885
+2,406,920
+2,127,462
+2,012,103
+Risk-weighted assets (2)
+18,616,886
+17,190,992
+15,902,801
+14,564,617
+13,216,687
+Net asset value per share(3)
+13,056,846
+22,209,780
+24,137,265
+Operating income
+776,002
+725,121
+675,654
+641,681
+668,733
+Operating expenses
+207,776
+194,203
+186,194
+193,112
+220,835
+Impairment losses on assets
+178,957
+161,594
+127,769
+87,894
+143,391
+86,993
+144,973
+145,301
+Financial Highlights
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Data
+2019
+2018
+2017
+2016
+2015
+Annual operating results (in RMB millions)
+Net interest income
+606,926
+572,518
+522,078
+471,846
+507,867
+Net fee and commission income
+155,600
+139,625
+Moody's
+Operating profit
+369,324
+of the parent company
+Net cash flows from operating activities
+694,521
+724,133
+770,864
+239,221
+1,131,764
+As at the end of reporting period (in RMB millions)
+Total assets
+30,109,436
+27,699,540
+Total loans and advances to customers
+16,761,319
+Allowance for impairment losses
+478,730
+15,419,905
+413,177
+26,087,043
+14,233,448
+340,482
+277,131
+389,269
+278,249
+297,676
+361,691
+360,675
+360,905
+Profit before taxation
+391,789
+372,413
+364,641
+363,279
+363,235
+Net profit
+313,361
+298,723
+287,451
+279,106
+277,720
+Net profit attributable to equity holders
+312,224
+286,049
+(4)
+0.86
+A1
+Capital adequacy ratio (10)
+16.77
+15.39
+15.14
+14.61
+Total equity to total assets ratio
+8.94
+8.47
+8.21
+8.21
+8.11
+Risk-weighted assets to total assets
+61.83
+62.06
+60.96
+60.34
+59.51
+ratio
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2) Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9
+Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+13.48
+_
+13.42
+13.45
+175.76
+154.07
+136.69
+156.34
+Allowance to total loans ratio (9)
+2.86
+2.68
+2.39
+2.22
+2.35
+Capital adequacy (%)
+Core tier 1 capital adequacy ratio(10)
+13.20
+12.98
+12.77
+12.87
+12.87
+Tier 1 capital adequacy ratio (10)
+14.27
+13.27
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+activities
+10
+ICBC
+(39,976) 370,409 (680,686) 62,160 124,372 696,370 (158,769)
+Chairman's Statement
+Chairman Chen Siqing
+Annual Report 2019
+11
+Chairman's Statement
+The year 2019 marked the 70th anniversary of the founding of the People's Republic of China, and also saw striving efforts
+and fruitful results in the reform and development of ICBC. Facing the complex and ever-changing external environment,
+the Bank continued to deliver steady progress, build legacy, drive innovation, stay ahead of trends, master the overall
+situation from the changing trend, seize opportunities amid uncertainties, and pursue high-quality development. The
+Bank accomplished considerable results in 2019, with total assets exceeding RMB30 trillion, savings deposits topping
+RMB10 trillion and net profit surpassing RMB300.0 billion, marking a significant achievement of ICBC. Our assets quality
+enhanced with improvement in NPL ratio, allowance to NPLs, and capital adequacy ratio. We continued to enjoy an
+excellent reputation in the industry. ICBC ranked first in the Top 500 Banking Brands for the fourth consecutive year and
+first in the Top 1000 World Banks for the seventh consecutive year and remained the most valuable company in China's
+financial sector by market capitalization.
+In the past year, we stepped up our corporate governance system. We regard corporate governance as a cornerstone
+of sustained growth and make continuous effort to improve our corporate governance structure, which is led by the Bank's
+Party Committee with the Board of Directors acting as the decision-making organ, the Board of Supervisors responsible
+for compliance supervision, and the Management in charge of operation. We have continuously optimized our governance
+mechanism to ensure scientific decision-making, effective supervision and steady operation. In 2019, our Board of Directors
+set up the Corporate Social Responsibility and Consumer Protection Committee and the US Risk Committee to support the
+Bank's efforts to better fulfill its corporate social responsibilities, expand business, and meet regulatory and compliance
+requirements.
+In the past year, we made new achievements in serving the real economy. We worked proactively to support
+high-quality economic development, deepen supply-side structural reform of the financial sector, and alleviate our
+adaptability to serve the real economy. In addition to reasonably increasing loan volume, we built a financial "over pass"
+by providing bonds, equity, agency and leasing services to meet the needs of the real economy. We actively supported
+major strategic national projects, and promoted regional economic layout featuring complementary advantages and high-
+quality development. We put in place an action plan to support high-quality development of manufacturing by increasing
+the volume of loans to manufacturers, especially mid-to-long-term loans and credit loans, and helping the manufacturing
+improve basic capabilities and modernize the industrial chains. We leveraged a combination of measures to improve inclusive
+finance in terms of its range, costs, quality and availability of financial services. We focused our efforts on promoting supply-
+side structural reforms and helping companies which were profitable but experiencing temporary difficulties to reorganize,
+cut costs and increase efficiency through debt restructuring, industry funds, debt-for-equity swaps and other methods. We
+successfully helped relevant companies lower their leverage level through implementing debt-for-equity swaps. We united
+our efforts to support targeted and precision poverty alleviation through finance. The Gazelle Farming Project launched by
+ICBC in Nanjiang County, Sichuan was selected as one of the world's best poverty alleviation cases. We also provided first-
+class services to a series of major events, including events celebrating the 70th anniversary of the founding of new China, the
+Second Belt and Road Forum for International Cooperation, and the Second China International Import Expo, and won wide
+praise.
+In the past year, we had new progress in preventing and mitigating financial risks. We strengthened "bottom-
+line thinking" and adhered to both curbing incremental risks and resolving existing risks, to fight against the financial
+risks. The asset quality was improved quarter by quarter by implementing the asset quality reinforcement project and
+doing a good job in keeping the three gates of access control, management and control over the existing assets and
+disposal of non-performing assets. We launched the "Responsibility Reinforcement Year" event in internal control and
+compliance, and deepened risk governance in eight key areas, including credit management and asset disposal. We took
+steps to benchmark against global best practices and enhance our overseas risk management, anti-money laundering and
+compliance management systems. We strengthened the prevention and control of cross-sector risks and thorough subsidiary
+management to make risks visible, tangible, and manageable. Furthermore, we actively helped small and medium-sized
+financial institutions resolve risks, boosted market confidence and expectations, and assumed a leadership role among the
+major banks in stabilizing the banking market.
+12
+ICBC
+Chairman's Statement
+In the past year, we made new breakthroughs in the implementation of key strategies. We insisted on creating
+value with services, energizing the sector through reforms, and driving development through innovation. We launched the
+strategy of "No.1 Personal Bank" and the increment of our personal customers and savings deposits reached the highest
+record in recent years. We took mobile banking as a key to our business transformation and success in competition with
+peers, and dedicated to building a leading online financial service platform. Our mobile banking customer base is among
+the largest, most loyal, and most active, leading all peers. We further advanced our outlet transformation project and
+improved our integrated online and offline system to increase customer satisfaction and become the bank of first choice for
+Chinese people. We focused our efforts on expanding our global footprint. So far, we have established 428 branches in 48
+countries and regions, and accelerated the localization, specialization and professionalization of our overseas institutions.
+We continued to adhere to a problem-oriented, goal-oriented and result-oriented approach, and advanced our key reform
+projects concerning competitiveness improving in major cities, interest rate pricing, and process optimization. These projects
+have effectively invigorated our business development. We also integrated and improved our research capabilities, set up the
+Modern Finance Research Institute, and built a high-end financial think tank, aiming to build "ICBC Research" into a well-
+known brand.
+In 2019, Mr. Yi Huiman resigned from the positions of Chairman of the Board of Directors and Executive Director of the
+Bank due to change of job assignments. During his tenure as Chairman of the Bank, Mr. Yi Huiman worked diligently and
+kept the Bank on track of reform and development with superb strategic thinking, planning and leadership skills. On behalf
+of the Board of Directors, I would like to express my sincere gratitude to Mr. Yi for his outstanding contributions to the Bank.
+On behalf of the Board of Directors, I would also like to welcome Mr. Yang Guozhong as our new Chairman of the Board of
+Supervisors, Mr. Liao Lin as the new Senior Executive Vice President, Mr. Wang Jingwu as the Senior Management member,
+Mr. Fred Zuliu Hu, Mr. Lu Yongzhen, Mr. Feng Weidong and Ms. Cao Liqun as new directors. Last but not least, I would also
+like to express my sincere gratitude to Mr. Hu Hao, Mr. Tan Jiong, Mr. Cheng Fengchao, Mr. Ye Donghai, Mr. Dong Shi and
+Mr. Hong Yongmiao who have ceased to serve as directors of the Bank for their contributions.
+2020 is off to a tough start with COVID-19 spreading across the globe. In response to the government's call on us to be
+confident, unite together, and adopt sound, effective measures, we are working in a proactive and orderly manner to
+support the fight against COVID-19. Overall, China's economic fundamentals will remain positive in the long run. We are
+confident that the country's annual economic and social development goals will be realized and that the Bank will sustain
+business growth. We will focus on supporting the country in building a well-off society in an all-round way and tackling
+poverty. We will continue to pursue sustainable growth, explore new development ideas, improve our corporate governance
+system and capabilities, serve the real economy in a better way, step up the control and prevention of financial risks, drive
+reform and innovation, strengthen team building, improve our ability to drive the high-quality development of China's
+economy, and strive to become a world-class and modern financial enterprise.
+Net cash flows from operating 1,044,774
+company
+192,385 190,481 191,318 183,185 178,117 178,578 185,241
+85,926 83,781 60,512 78,802 81,640 79,185 58,049
+82,005
+(6) Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(7)
+Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+Quarterly Financial Data
+2019
+2018
+(In RMB millions)
+199.32
+Q1
+Q3
+Q4
+Q1
+Q2
+Q3
+Q4
+Operating income
+201,818
+Net profit attributable to equity
+holders of the parent
+Q2
+A
+Allowance to NPLs (8)
+1.62
+2017
+2016
+2015
+Profitability (%)
+Return on average total assets (1)
+1.08
+1.11
+1.14
+1.20
+1.30
+Return on weighted average equity(2)
+1.50
+13.05
+13.79
+14.35
+2018
+15.24
+2019
+Financial Highlights
+A
+A1
+A
+A
+A1
+A
+A1
+Notes: (1) Calculated by adding allowance for impairment losses on loans and advances to customers measured at amortised cost with
+allowance for impairment losses on loans and advances to customers measured at fair value through other comprehensive
+income.
+(2)
+Calculated in accordance with the Capital Regulation.
+(3)
+Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments at
+the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(4) The rating results are in the form of "long-term foreign currency deposits rating".
+Annual Report 2019
+9
+Financial Indicators
+17.10
+A1
+2.08
+1.75
+1.81
+1.89
+2.01
+2.16
+Ratio of net fee and commission income
+20.05
+20.04
+20.67
+22.59
+21.44
+to operating income
+Cost-to-income ratio (6)
+25.79
+25.71
+26.45
+27.40
+26.69
+Asset quality (%)
+Non-performing loans ("NPLs") ratio (7)
+1.43
+1.52
+1.55
+Return on risk-weighted assets(5)
+2.47
+2.16
+2.22
+2.30
+2.24
+Net interest margin (4)
+2.16
+2.10
+2.02
+2.30
+Net interest spread(3)
+ICBC
+198
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+3,372,576
+1,734
+3,317,916
+Accrued interest
+(i)
+1,668
+262,909
+238,286
+2,799,666
+2,676,279
+322,892
+250,976
+31 December
+2018
+70,047
+2019
+66,035
+31 December
+Fiscal deposits and others
+(ii)
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks
+and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits
+mainly consist of deposits placed with the PBOC and central banks of overseas countries or regions. As at 31
+December 2019, the mandatory deposit reserve ratios of the domestic branches of the Bank in respect of customer
+deposits denominated in RMB and foreign currencies were consistent with the requirement of the PBOC. The amounts
+of mandatory reserve deposits placed with the central banks of those countries or regions outside Mainland China are
+determined by local jurisdictions.
+Mandatory reserves (i)
+(31,772)
+plans
+RMB'000
+RMB'000
+before tax
+Defined
+contribution
+paid
+Remuneration
+Year ended 31 December 2019
+Position
+Name
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+12. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+191
+Annual Report 2019
+The principal auditor's remuneration of RMB222 million for the year (2018: RMB216 million) is included in other
+administrative expenses.
+Fees
+RMB'000
+Total
+emoluments
+before tax
+RMB'000
+(1)
+707
+||||
+Non-executive Director
+Non-executive Director
+128
+579
+470
+84
+(!!)
+T
+Zheng Fuqing
+Vice Chairman of the Board of Directors,
+Executive Director, President
+Chairman of the Board of Supervisors
+Yang Guozhong (iii)
+Gu Shu (ii)
+Chairman of the Board of Directors,
+Executive Director
+Chen Siqing (i)
+(3) (4)=(1)+(2)+(3)
+(2)
+386
+Lu Yongzhen (iv)
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+194,203
+13,407
+13,290
+Repairs and maintenance charges
+Lease expenses in respect of land and buildings
+property and equipment assets
+Depreciation charge for
+Property and equipment expenses:
+121,074
+126,950
+16,952
+16,789
+-defined contribution plans (i)
+Post-employment benefits
+27,137
+29,404
+Staff benefits
+76,985
+8,190
+7,543
+4,151
+3,903
+207,776
+12,627
+13,813
+Others
+7,781
+7,677
+23,294
+29,308
+(i)
+Taxes and surcharges
+2,339
+2,315
+Amortisation
+27,088
+27,713
+2,235
+2,082
+Utility expenses
+Other administrative expenses (ii)
+80,757
+Non-executive Director
+Non-executive Director
+2,925
+Total
+Former Independent Non-executive Director
+Hong Yongmiao (xvii)
+Former Non-executive Director
+Dong Shi (xvi)
+Former Non-executive Director
+Ye Donghai (xv)
+Former Non-executive Director
+Cheng Fengchao (xiv)
+487
+649
+119
+96
+391
+Former Executive Director, Vice President
+128
+586
+125
+125
+3,002
+At the First Extraordinary General Meeting of 2020 held on 8 January 2020, Mr. Yang Guozhong was elected as
+shareholder supervisor and Chairman of the Board of Supervisors of the Bank, and his term of office took effect from
+the date of review and approval by the meeting.
+At the Second Extraordinary General Meeting of 2019 held on 22 November 2019, Mr. Gu Shu was re-elected as
+Executive Director of the Bank, and his new term of office took effect from the date of review and approval by the
+meeting.
+At the Board of Directors held on 29 April 2019, Mr. Chen Siqing was nominated as Executive Director and elected as
+Chairman of the Board of Directors of the Bank. At the First Extraordinary General Meeting of 2019 held on 20 May
+2019, Mr. Chen Siqing was elected as Executive Director and his term of Chairman of the Board of Directors of the
+Bank and Executive Director took effect from the date of approval by the meeting.
+As at the approval date of these financial statements, changes of directors and supervisors of the Bank are as follows:
+(vi)
+(v)
+(iv)
+(iii)
+521
+(i)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+ICBC
+192
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's 2019 financial statements. The total compensation packages will be further disclosed when
+determined by the relevant authorities.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+6,513
+(In RMB millions, unless otherwise stated)
+Feng Weidong (v)
+Cao Liqun (v)
+Anthony Francis Neoh
+Yang Siu Shun (vi)
+Former Executive Director, Vice President
+22
+423
+423
+445
+445
+Independent Non-executive Director
+Independent Non-executive Director
+Nout Wellink
+Shen Si
+430
+430
+Independent Non-executive Director
+Sheila Colleen Bair
+446
+446
+475
+475
+Independent Non-executive Director
+Independent Non-executive Director
+Non-executive Director
+Fred Zuliu Hu (vii)
+Zhang Wei (viii)
+Hui Ping
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+97
+Former Chairman of the Board of Directors,
+Executive Director
+Yi Huiman (x)
+External Supervisor
+Shen Bingxi (viii)
+5550
+250
+External Supervisor
+Hu Hao (xi)(xii)
+Tan Jiong (xi)(xiii)
+Qu Qiang
+Employee Representative Supervisor
+Huang Li (ix)
+50
+1,079
+128
+951
+308
+308
+50
+At the Annual Meeting of 2018 held on 20 June 2019, Mr. Lu Yongzhen was elected as Non-executive Director of the
+Bank, and his term of office took effect from the date of review and approval by the CBIRC.
+Salaries and bonuses
+2019
+572,518
+606,926
+(375,576)
+(431,228)
+(30,373)
+(36,866)
+(64,991)
+(63,296)
+(280,212)
+(331,066)
+Debt securities issued
+Due to banks and other financial institutions
+Due to customers
+Interest expense on:
+948,094
+1,038,154
+49,246
+Net interest income
+The above interest income and expense are related to financial instruments which are not measured at FVTPL.
+Annual Report 2019
+189
+23,860
+Investment banking business
+27,596
+27,337
+Personal wealth management and private banking services (i)
+31,785
+37,321
+Settlement, clearing business and cash management
+46,185
+43,719
+Bank card business
+2018
+2019
+(i)
+NET FEE AND COMMISSION INCOME
+7.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+47,054
+24,002
+Due from central banks
+63,385
+The amendments introduce new requirements on loss of control over assets in a transaction with an associate or joint
+venture. These requirements require the full gain to be recognised when the assets transferred meet the definition of a
+"business" under IFRS 3, Business combination.
+Amendments to IFRS 10, Consolidated Financial Statements, and IAS 28, Investment in
+associates and joint ventures, "Sale or contribution of assets between an investor and its
+associate or joint venture"
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+that the meaning of "settlement" is broad and includes "the transfer to the counterparty of cash, equity instruments,
+other assets or service".
+that the classification of liabilities as current or non-current is based on the rights existing at the end of the reporting
+period; and
+•
+The amendments mainly aim to clarify:
+current.
+The IASB issued narrow-scope amendments to IAS 1 to clarify how to classify debt and other liabilities as current or non-
+Amendments to IAS 1, Presentation of Financial Statements, "Classification of Liabilities as
+Current or Non-current"
+The Group is currently assessing the impact of the standard on its financial position and financial performance.
+IFRS 17 is issued to resolve the comparison problems created by IFRS 4 by setting out a single principle-based standard for
+the recognition, measurement, presentation and disclosure of insurance contracts in the financial statements of the issuers
+of those contracts.
+IFRS 17, "Insurance contracts"
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Surplus reserves (ii)
+Balances with central banks
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+6.
+NET INTEREST INCOME
+Interest income on:
+Due from banks and other financial institutions
+200,157
+221,184
+Financial investments
+14,392
+12,209
+Discounted bills
+217,860
+58,660
+257,982
+407,779
+437,209
+Corporate loans and advances
+640,031
+707,400
+Loans and advances to customers
+2018
+2019
+Personal loans
+2018
+Corporate wealth management services (i)
+14,582
+76
+635
+1,408
+(1,824)
+(19,538)
+292
+228
+978
+(6,144)
+1
+2018
+2019
+ICBC
+190
+Others
+measured at FVOCI, net
+Gain on disposal of financial instruments
+Loss on financial instruments designated as at FVTPL
+189
+(3,682)
+1,345
+10. OTHER OPERATING INCOME, NET
+Staff costs:
+11. OPERATING EXPENSES
+3,111
+8,711
+(473)
+8,344
+1,936
+1,264
+Including:
+Net gain on disposal of property and equipment, repossessed assets and others
+Others
+Operating cost of insurance business
+33,420
+53,857
+Net premium income
+2018
+2019
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+(54,754)
+14,024
+(Loss)/gain on financial instruments measured at FVTPL, net
+Dividend income from equity investments designated as at FVOCI, including:
+Derecognised during the year
+(16,041)
+Fee and commission expense
+162,347
+171,641
+2,798
+2,615
+1,959
+1,590
+7,045
+7,004
+Fee and commission income
+Others
+Trust and agency services (i)
+Asset custody business (i)
+8,861
+10,836
+Guarantee and commitment business
+(17,046)
+155,600
+145,301
+Net fee and commission income
+9. NET (LOSS)/GAIN ON FINANCIAL INVESTMENTS
+The above amounts mainly include gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities held for trading.
+2,846
+8,447
+(1,090)
+2,118
+(151)
+2,316
+Held at the year end
+4,087
+2018
+2019
+Derivatives and others
+Equity investments
+Debt securities
+NET TRADING INCOME
+8.
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB14,855 million (2018: RMB15,835 million)
+with respect to trust and other fiduciary activities.
+4,013
+At the Second Extraordinary General Meeting of 2019 held on 22 November 2019, Mr. Feng Weidong and Mrs. Cao
+Liqun were elected as Non-executive Director of the Bank, and their terms of office took effect from the date of review
+and approval by the CBIRC.
+Mei Yingchun
+(vii) At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Fred Zuliu Hu was elected as
+Independent Non-executive Director of the Bank, and his term of office took effect from the date of review and
+approval by the CBIRC.
+2019
+Notes
+(a) Income tax expense
+15. INCOME TAX EXPENSE
+Loans and advances to customers
+Others
+14. IMPAIRMENT LOSSES ON ASSETS
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2018: Nil).
+5
+1
+5
+1
+1
+1
+1
+1
+1
+1
+1
+2018
+23
+162,108
+147,347
+(8,188)
+(5,862)
+Deferred income tax expense
+81,878
+84,290
+3,280
+3,380
+2,510
+2018
+2,244
+78,666
+Hong Kong and Macau
+Overseas
+Current income tax expense:
+Mainland China
+2018
+2019
+161,594
+14,247
+16,849
+178,957
+76,088
+78,428
+Number of employees
+2019
+The number of these individuals whose emoluments fell within the following bands is set out below:
+During the year, there was no arrangement under which a Director or a Supervisor waived or agreed to waive any
+remuneration (2018: Nil).
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+In October 2018, due to expiration of the term of office, Mr. Or Ching Fai ceased to act as Independent Non-executive
+Director of the Bank.
+In October 2018, Mr. Fei Zhoulin ceased to act as Non-executive Director of the Bank citing his age.
+In September 2018, Mr. Wang Jingdong ceased to act as Executive Director and Vice President of the Bank due to
+change of job assignments.
+(xi)
+(x)
+(ix)
+(viii) In July 2018, Mr. Zhang Hongli ceased to act as Executive Director of the Bank due to expiration of the term of office,
+and resigned from the position of Vice President of the Bank due to family reasons.
+In January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+In January 2019, Mr. Yi Huiman ceased to act as Chairman of the Board of Directors and Executive Director of the Bank
+due to change of job assignments.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Qu Qiang was re-elected as
+External Supervisor of the Bank, and his new term of office took effect from 20 December 2018.
+On 21 September 2018, the Bank re-elected Mr. Hui Ping as Employee Supervisor of the Bank at the special meeting of
+the first session of employee representative assembly of the Bank, and his new term of office took effect from the date
+of review and approval by the Employees' Congress.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Nout Wellink was appointed as
+Independent Non-executive Director of the Bank, and his term of office took effect from 3 December 2018.
+(vii)
+(vi)
+(v)
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2018: Nil).
+13. FIVE HIGHEST PAID INDIVIDUALS
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 12 and 49(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+Salaries and allowances
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+195
+Annual Report 2019
+94,294
+103,067
+4,933
+RMB12,000,001 Yuan to RMB12,500,000 Yuan
+RMB13,500,001 Yuan to RMB14,000,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB15,500,001 Yuan to RMB16,000,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+RMB25,500,001 Yuan to RMB26,000,000 Yuan
+RMB26,500,001 Yuan to RMB27,000,000 Yuan
+RMB38,500,001 Yuan to RMB39,000,000 Yuan
+611
+26,350
+19,598
+67,192
+71
+11,273
+2018
+RMB'000
+2019
+RMB'000
+Others
+Compensation for terminating contract
+Defined contribution plans
+Discretionary bonuses
+67,333
+(iv)
+73,690
+ICBC
+2019
+The calculation of basic and diluted earnings per share of the Group is based on the following:
+18. EARNINGS PER SHARE
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+197
+Annual Report 2019
+89,315
+93,664
+Final ordinary shares dividends for 2019: RMBO.2628 per share
+(2018: RMBO.2506 per share)
+(not recognised as at 31 December):
+Dividends on ordinary shares proposed for approval
+2018
+2019
+4,506
+4,525
+2018
+Earnings:
+Profit for the year attributable to equity holders of the parent company
+312,224
+Cash on hand
+19. CASH AND BALANCES WITH CENTRAL BANKS
+Basic and diluted earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the
+parent company divided by the weighted average number of ordinary shares in issue.
+0.82
+0.86
+Basic and diluted earnings per share (RMB yuan)
+356,407
+356,407
+Dividends on preference shares declared and paid: Dividends
+Weighted average number of ordinary shares in issue (in million shares)
+293,170
+307,699
+Profit for the year attributable to ordinary equity holders of the parent company
+(4,506)
+(4,525)
+holders of the parent company
+Less: Profit for the year attributable to other equity instruments
+297,676
+Shares:
+196
+85,823
+Final ordinary shares dividends for 2018: RMBO.2506 per share
+(2017: RMBO.2408 per share)
+11,171
+16,585
+(1,177)
+(1,694)
+Effects of different applicable rates of tax prevailing in other countries/regions
+Effects of non-deductible expenses (i)
+93,103
+97,947
+Tax at the PRC statutory income tax rate
+372,413
+391,789
+Profit before taxation
+2018
+2019
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+(b) Reconciliation between income tax and accounting profit
+At the shareholders' general meeting of 2018 held on 20 June 2019, Mr. Yang Siu Shun has been re-elected as
+Independent Non-executive Director of the Bank, and his new term of office took effect from the date of review and
+approval by the meeting.
+Notes to the Financial Statements
+Effects of non-taxable income (ii)
+(34,180)
+(28,969)
+Effects of profits attributable to associates and joint ventures
+Dividends on ordinary shares declared and paid:
+2018
+2019
+17. DIVIDENDS
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2019 includes
+a profit of RMB296,338 million (2018: RMB282,044 million) which has been dealt with in the financial statements of the
+Bank (Note 39).
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal
+debts, which is exempted from income tax.
+(ii)
+89,315
+The non-deductible expenses mainly represent non-deductible impairment provision, write-offs and others.
+73,690
+78,428
+Income tax expense
+334
+400
+Effects of others
+(772)
+(630)
+(i)
+(iii)
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Zheng Fuqing (ii)
+Non-executive Director
+Cheng Fengchao (i)
+Executive Director, President
+940
+940
+163
+446
+331
+(7)=(5)-(6)
+(6)
+(5)=(1)+(2)+(3)+(4)
+(4)
+(3)
+(2)
+(1)
+RMB'000
+Non-executive Director
+Mei Yingchun
+Dong Shi
+Ye Donghai
+Nout Wellink (iii)
+413
+Independent Non-executive Director
+Shen Si
+365
+Independent Non-executive Director
+Sheila Colleen Bair
+440
+RMB'000
+Independent Non-executive Director
+470
+440
+Independent Non-executive Director
+Anthony Francis Neoh
+Independent Non-executive Director
+Hong Yongmiao
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Yang Siu Shun
+RMB'000
+RMB'000
+RMB'000
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+193
+Annual Report 2019
+term.
+(xvi) In February 2020, Mr. Dong Shi ceased to act as Non-executive Director of the Bank due to change of job assignments.
+(xvii) In April 2019, Mr. Hong Yongmiao ceased to act as Independent Non-executive Director due to the expiration of the
+(xv) In March 2020, Mr. Ye Donghai ceased to act as Non-executive Director of the Bank due to change of job
+assignments.
+(xiv) In April 2019, Mr. Cheng Fengchao ceased to act as Non-executive Director of the Bank citing his age.
+Name
+(xiii) In September 2019, Mr. Tan Jiong ceased to act as Executive Director and Vice President of the Bank due to change of
+job assignments.
+At the First Extraordinary General Meeting of 2019 held on 20 May 2019, Mr. Hu Hao and Mr. Tan Jiong were elected
+as Executive Director of the Bank, and their terms of office took effect from the date of review and approval by the
+CBIRC.
+In January 2019, Mr. Yi Huiman ceased to act as Chairman of the Board of Directors and Executive Director of the
+Bank due to change of job assignments.
+On 21 June 2019, Mr. Huang Li was elected as the employee supervisor of the bank at the special meeting of the
+first session of employee representative assembly of the Bank, and his new term of office took effect from the date of
+review and approval by the meeting.
+(xi)
+(x)
+(ix)
+(viii) At the shareholders' general meeting of 2018 held on 20 June 2019, Mr. Zhang Wei and Mr. Shen Bingxi have been
+elected as shareholder supervisor and external supervisor of the Bank respectively, their terms of office took effect
+from the expiry date of their current terms of office.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(xii) In February 2020, Mr. Hu Hao ceased to act as Executive Director and Vice President of the Bank due to change of job
+assignments.
+Zhang Wei
+Position
+Vice Chairman of the Board of Directors,
+paid before tax
+payment
+remuneration
+deferred
+Actual
+amount of
+Of which:
+Total
+emoluments
+before tax
+allowance, etc.
+Gu Shu
+bonuses
+Fees
+RMB'000
+plans, housing
+Discretionary
+Remuneration
+and welfare
+social insurance
+the employer to
+Year ended 31 December 2018
+Contribution by
+paid
+Independent Non-executive Director
+RMB'000
+25
+Or Ching Fai (xi)
+571
+571
+105
+267
+427
+78
+200
+80
+15
+37
+៩៦៩
+199
+149
+Former Executive Director, Vice President
+Former Non-executive Director
+Fei Zhoulin (x)
+Former Executive Director, Vice President
+Former Independent Non-executive Director
+392
+392
+8, ཤྲུཎྜg
+ICBC
+Shareholder Representative Supervisor
+194
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Zheng Fuqing was re-elected as
+Non-executive Director of the Bank, and his new term of office took effect from the date of review and approval by the
+meeting.
+At the 2017 Annual General Meeting held on 26 June 2018, Mr. Cheng Fengchao was re-elected as Non-executive
+Director of the Bank, and his new term of office took effect from the date of review and approval by the meeting.
+(ii)
+(i)
+As at the approval date of these financial statements, changes of directors and supervisors of the Bank are as follows:
+Zhang Hongli (viii)
+Wang Jingdong (ix)
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+7,503
+503
+8,006
+833
+2,651
+1,627
+2,895
+The remuneration before tax payable to Directors and Supervisors for 2018 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2018 Annual Report.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+163
+392
+External Supervisor
+413
+50
+50
+ཊྛ༈༙༈༙⌘བ'RRཤྩ ་་
+Former Chairman of the Board of Supervisors
+Former Chairman of the Board of Directors,
+Executive Director
+Qian Wenhui (vii)
+Yi Huiman (vi)
+Shen Bingxi
+250
+External Supervisor
+Qu Qiang (v)
+Employee Representative Supervisor
+Huang Li
+9t
+Employee Representative Supervisor
+Hui Ping (iv)
+25
+503
+ཐཱཡྻཐུནྣཏྠཱམཉྫཞཞཤྩ་༔
+Ë,,,,,,,
+446
+331
+2,153
+309
+1,255
+589
+--
+250
+50
+ཐཱཐཱཟུནྣམཤྩཋཞནྡ་ཛྙྰ
+50
+940
+413
+365
+440
+440
+470
+1,650
+24,779
+1,052
+52,734
+7
+(7)
+3
+124
+62,598
+(750)
+344
+Liabilities
+Assets
+121
+1,077
+112,444
+4,002
+51
+2
+64
+Equity derivative
+141,163
+28,595
+(284)
+1,201
+Interest rate swap contracts
+31 December 2018
+1,045
+1,374
+15,216
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+one year
+months
+but within
+one year
+months
+but within
+three
+Within
+Over
+Over three
+Notional amounts with remaining life of
+Fair values
+(1,041)
+20,726
+Interest rate contracts
+52,670
+7,887,725
+(14,859)
+12,971
+1,130,402
+(30,710)
+13,617
+818,186
+Commodity derivatives and others
+(16,521)
+16,222
+1,956,819
+(17,888)
+16,436
+2,125,339
+(42,193)
+42,142
+(36,582)
+1,855
+5,770,092
+68,311
+(85,180)
+8,857,313
+71,335
+Currency swap contracts
+Interest rate swap contracts
+Total
+Over
+five years
+five years
+one year
+months
+one year
+but within
+months
+but within
+6,824
+55,772
+three
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+31 December 2019
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out below.
+Total
+Cash flow hedges
+(73,573)
+Within
+18,789
+7,966
+(30)
+31 December 2018
+(4,491)
+(697)
+(111,876)
+32,321
+(4,505)
+(639)
+(104,846)
+6,050
+Others
+(17)
+(54)
+2,914
+Loans
+Due to customers/
+Other liabilities
+Due to banks and
+other financial institutions/
+Certificates of deposit/
+Other assets/
+other financial institutions/
+Due from banks and
+Carrying amount of
+hedged items
+customers
+Assets
+19,410
+of financial position
+38,258
+Line items in the statement
+(3,866)
+80
+(65,120)
+Others
+Loans
+37
+25
+income
+35
+other comprehensive
+of hedging
+instruments on
+Accumulated effect
+the year
+(147)
+instruments
+on other
+comprehensive
+income during
+Effect of hedging
+(5,868)
+Liabilities
+Bonds
+Debt securities issued
+Loans and advances to
+Financial investments
+measured at amortised cost/
+measured at FVOCI/
+100,507
+2,679
+16,800
+58,461
+22,567
+(9)
+16
+94
+43
+51
+Equity derivative
+(613)
+692
+81,624
+824
+1,541
+58,117
+21,142
+Currency swap contracts
+799
+(652)
+200
+ICBC
+Financial investments
+Line items in the statement
+of financial position
+Accumulated effect
+of hedging
+instruments on
+31
+(4)
+income
+other comprehensive
+on other
+comprehensive
+income during
+the year
+Liabilities
+(7,030)
+91
+23,357
+Assets
+hedged items
+instruments
+Effect of hedging
+31 December 2019
+Carrying amount of
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equities are as follows:
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Bonds
+4,944,200
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts and equity derivatives that are
+used to protect against exposures to variability of future cash flows.
+Liabilities
+(412,731)
+15,896,134
+14,684,281
+6,314
+417,668
+11
+6,245
+354,228
+10
+423,993
+360,483
+6,425
+16,326,552
+1,368
+15,046,132
+As at 31 December 2019, the Group's allowance for impairment losses on loans and advances to customers measured at
+FVOCI was RMB232 million, see Note 23(b) (31 December 2018: RMB446 million).
+206
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Movements of the allowance for impairment losses on loans and advances to customers are as follows:
+(a) Movements of allowance for impairment losses of loans and advances to customers
+measured at amortised cost are as follows:
+Stage 1
+(478,498)
+Stage 2
+15,097,012
+38,948
+107,961
+Accrued interest
+Measured at FVTPL:
+Corporate loans and advances
+― Loans
+31 December
+2019
+31 December
+2018
+9,943,082
+9,411,281
+9,788,069
+9,253,296
+155,013
+157,985
+6,383,624
+5,636,574
+4,206
+10,209
+43,720
+16,374,632
+Balance at 1 January 2019
+158,084
+81,406
+(97,653)
+Recoveries of loans and advances
+previously written off
+3,302
+3,302
+Other movements
+244
+132
+(2,580)
+(2,204)
+Balance at 31 December 2019
+215,316
+78,494
+184,688
+478,498
+Stage 1
+Stage 2
+Stage 3
+Financial investments
+(97,562)
+(91)
+Write-offs and transfer out
+162,322
+Stage 3
+173,241
+Total
+412,731
+Transfer:
+― to stage 1
+17,451
+(14,987)
+(2,464)
+to stage 2
+Notes to the Financial Statements
+(6,868)
+(5,907)
+to stage 3
+(959)
+(28,755)
+29,714
+Charge
+47,364
+28,014
+86,944
+12,775
+Exchange rate contracts
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Due from banks and other financial institutions:
+561
+230
+70
+160
+1,015
+614
+401
+162
+139
+23
+853
+475
+378
+Total
+Placements with
+banks and other
+financial institutions
+banks and other
+financial institutions
+At 31 December 2019
+Charge for the year
+At 31 December 2018 and 1 January 2019
+684
+Charge for the year
+1,245
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+Assets
+amounts
+Liabilities
+Fair values
+Notional
+Fair values
+Assets
+amounts
+Notional
+31 December 2018
+31 December 2019
+At the end of the reporting period, the Group had derivative financial instruments as follows:
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which
+meet the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2019, derivative
+assets and derivative liabilities which meet the criteria for offsetting were RMB36,547 million (31 December 2018:
+RMB44,552 million) and RMB40,614 million (31 December 2018: RMB45,254 million) respectively, and the net derivative
+assets and net derivative liabilities were RMB26,248 million (31 December 2018: RMB25,906 million) and RMB30,315 million
+(31 December 2018: RMB26,608 million) respectively.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+199
+Annual Report 2019
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+market participants at measured date.
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+At 1 January 2018
+Due from
+Movements of the allowance for impairment losses during the year are as follows:
+(561)
+Less: Allowance for impairment losses
+385,047
+475,886
+2,624
+3,914
+70,141
+86,655
+Banks and other financial institutions operating outside Mainland China
+Accrued interest
+4,694
+11,449
+Other financial institutions operating in Mainland China
+307,588
+373,868
+Banks operating in Mainland China
+2018
+2019
+31 December
+31 December
+(401)
+475,325
+384,646
+Placements with banks and other financial institutions:
+962,449
+1,042,368
+577,803
+567,043
+(614)
+(684)
+Less: Allowance for impairment losses
+578,417
+567,727
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+6,781
+230,640
+249,018
+Banks and other financial institutions operating outside Mainland China
+Accrued interest
+193,191
+218,315
+Other financial institutions operating in Mainland China
+147,805
+94,159
+Banks operating in Mainland China
+6,235
+measured at FVOCI/
+Balance at 1 January 2018
+measured at amortised cost/
+Notes to the Financial Statements
+205
+Annual Report 2019
+As part of the reverse repurchase agreements, the Group has received securities that is allowed to sell or repledge
+in the absence of default by their owners. As at 31 December 2019, the Group had received securities with a fair
+value of approximately RMB156,529 million on such terms (31 December 2018: RMB227,372 million). Of these,
+securities with a fair value of approximately RMB125,320 million have been repledged under repurchase agreements
+(31 December 2018: RMB202,508 million). The Group has an obligation to return the securities to its counterparties.
+If the collateral received declines in value, the Group may, in certain circumstances, require additional collateral.
+(ii)
+In accordance with master repurchase agreements and related supplementary agreements, the Group offsets
+reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and
+presents net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the
+financial statement. As at 31 December 2019, reverse repurchase agreements and repurchase agreements which
+meet the criteria for offsetting were RMB317,212 million and RMB345,191 million respectively (31 December 2018:
+RMB467,516 million and RMB476,199 million respectively), and the net reverse repurchase agreements and net
+repurchase agreements were RMB119,860 million and RMB147,839 million respectively (31 December 2018:
+RMB145,648 million and RMB154,331 million respectively).
+(i)
+734,049
+845,186
+174,794
+159,657
+29,822
+39,300
+144,972
+120,357
+142,502
+120,029
+2,470
+328
+Financial Statements for the year ended 31 December 2019
+securities borrowing
+(In RMB millions, unless otherwise stated)
+Measured at amortised cost:
+(1,417)
+(17,976)
+19,393
+to stage 1
+Transfer:
+372,598
+152,770
+111,867
+Discounted bills
+- Loans
+Corporate loans and advances
+Measured at FVOCI:
+Less: Allowance for impairment losses of loans and advances to customers
+measured at amortised cost (note 23(a))
+Accrued interest
+Discounted bills
+Personal loans
+- Finance lease
+- Loans
+Corporate loans and advances
+23. LOANS AND ADVANCES TO CUSTOMERS
+Cash advanced as collateral on
+Other financial institutions
+Reverse repurchase agreements-securities:
+Banks
+Banks
+Reverse repurchase agreements-bills:
+Measured at amortised cost:
+Reverse repurchase agreements comprise reverse repurchases of bills, securities and cash advanced as collateral on securities
+borrowing.
+22. REVERSE REPURCHASE AGREEMENTS
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+204
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional). The credit risk-weighted assets of the Group's derivative financial instruments
+include counterparty credit default risk-weighted assets, credit value adjustment risk-weighted assets and central
+counterparties credit risk-weighted assets.
+71,738
+168,963
+3,639
+3,068
+22,443
+34,676
+15,374
+65,927
+30,282
+31 December
+2019
+31 December
+2018
+309,249
+161,467
+Measured at FVTPL:
+559,255
+685,529
+(40)
+(94)
+Less: Allowance for impairment losses
+202
+137
+Accrued interest
+to stage 2
+397,626
+344,993
+274,761
+Other financial institutions
+52,633
+101,476
+Banks
+Reverse repurchase agreements-securities:
+161,467
+309,249
+376,237
+65,292
+(4,901)
+(592)
+158,084
+81,406
+173,241
+412,731
+Annual Report 2019
+207
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(b) Movements of the allowance for impairment losses on loans and advances to
+customers measured at FVOCI are as follows:
+Stage 1
+Stage 2
+198
+0
+Stage 3
+248
+Total
+446
+Balance at 1 January 2019
+Transfer:
+Balance at 31 December 2018
+to stage 1
+(604)
+646
+Financial investments
+(2,869)
+(40,413)
+43,282
+Charge
+38,217
+24,083
+Write-offs and transfer out
+(338)
+(2,294)
+85,074
+(106,146)
+147,374
+(108,778)
+Recoveries of loans and advances
+previously written off
+2,141
+2,141
+Other movements
+621
+(1,871)
+― to stage 2
+― to stage 3
+Charge/(reverse)
+― to stage 1
+to stage 3
+Charge/(reverse)
+Other movements
+173
+0
+(200)
+(27)
+2
+2
+Balance at 31 December 2018
+198
+0
+248
+446
+|||OI
+208
+ICBC
+to stage 3
+Transfer:
+471
+448
+23
+Other movements
+(5)
+34
+1550
+(5)
+5
+(0)
+(248)
+(214)
+5,493
+(0)
+Balance at 31 December 2019
+227
+5
+232
+Stage 1
+Stage 2
+Stage 3
+Total
+Balance at 1 January 2018
+(0)
+45,656
+― to stage 2
+2018
+31 December 2018
+(1,383)
+199
+64,293
+14,841
+47,346
+1,409
+697
+(1,383)
+199
+64,293
+14,841
+47,346
+1,409
+697
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+Fair values
+five years
+Notional amounts with remaining life of
+Over
+49,823
+12,074
+30,670
+5,366
+1,713
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+five years
+five years
+one year
+months
+Over
+one year
+but within
+but within
+three
+months
+Within
+Over three
+five years
+one year
+months
+Fair value hedges
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+201
+Annual Report 2019
+Nil).
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges for the current year (2018:
+(3,794)
+(42)
+(70,988)
+27,376
+Other liabilities
+Due to customers/
+Certificates of deposit/
+Due to banks and
+other financial institutions/
+131,219
+customers
+Debt securities issued
+Loans and advances to
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates. Interest rate swaps are used as hedging instruments to hedge the interest risk of
+financial assets and financial liabilities, respectively.
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+Gain/(loss) arising from fair value hedges, net:
+Hedging instruments
+Over
+but within
+but within
+three
+one year
+months
+Over
+Over three
+Fair values
+709
+Notional amounts with remaining life of
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+(8)
+14
+63
+(71)
+(204)
+218
+2018
+2019
+Hedged items attributable to the hedged risk
+31 December 2019
+(283)
+Within
+5,366
+Debt securities issued
+measured at amortised cost/
+Financial investments
+measured at FVOCI/
+Financial investments
+of financial position
+(37)
+(606)
+(7,443)
+39,617
+11
+(379)
+(3,943)
+13,405
+Others
+(185)
+1,416
+Loans
+Liabilities
+(48)
+Loans and advances to
+customers
+Reverse repurchase agreements/
+Due to banks and other
+financial institutions
+Line items in the statement
+of financial position
+Financial investments
+measured at FVTPL/
+Financial investments
+measured at FVOCI/
+31 December
+31 December
+2019
+1,713
+Credit value adjustment risk-weighted assets
+Central counterparties credit risk-weighted assets
+Netting settled credit default risk-weighted assets
+Including: Non-netting settled credit default risk-weighted assets
+Counterparty credit default risk-weighted assets
+The credit risk-weighted assets in respect of the above derivatives of the Group as at the end of the reporting date are as
+follows:
+(42)
+Counterparty credit risk-weighted assets of derivative financial instruments
+Net investment hedges
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+203
+Annual Report 2019
+Due to customers
+Reverse repurchase agreements/
+Certificates of deposit/
+customers
+Loans and advances to
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+only in limited circumstances. Hedging is undertaken using deposits taken in the same currencies as the functional currencies
+of related branches and subsidiaries which are accounted for as hedges of certain net investment in foreign operations.
+As at 31 December 2019, an accumulated net loss from the hedging instrument of RMB747 million was recognised in
+"Other comprehensive income" on net investment hedges (as at 31 December 2018 net accumulated loss: RMB333
+million). As at 31 December 2019, there was no ineffectiveness in profit or loss that arises from the net investment hedges
+(31 December 2018: Nil).
+(3,500)
+Debt securities issued
+Bonds
+Bonds
+Assets
+Liabilities
+Assets
+Line items in the statement
+of hedged items
+Accumulated adjustments to the fair value
+31 December 2019
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+202
+(283)
+24,796
+709
+49,823
+12,074
+30,670
+42,646
+(120)
+Carrying amount of
+hedged items
+Liabilities
+(11)
+hedged items
+943
+Assets
+Accumulated adjustments to the fair value
+Carrying amount of
+(11)
+965
+(3,601)
+Liabilities
+31 December 2018
+(10)
+Loans
+61,933
+5,325
+Assets
+of hedged items
+Others
+13,962
+(3,481)
+32
+19,385
+29,124
+10,087
+32,838
+22,345
+29,472
+(348)
+(348)
+32,490
+10,493
+2018
+Standard Bank Group Limited ("Standard Bank") (i)
+Others
+(i) Financial information of the Group's material associates and joint ventures:
+31 December
+31 December
+2019
+27,770
+26,011
+4,720
+3,113
+Name
+2018
+32,490
+29,124
+(a) Particulars of the Group's associates and joint ventures are as follows:
+2019
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+31 December
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+Percentage of
+equity interest %
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+Annual Report 2019
+215
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Investments in associates and joint ventures comprise the following:
+Interest in associates
+31 December
+Interest in joint ventures
+Goodwill
+Less: Allowance for impairment losses
+31 December
+2019
+30,603
+31 December
+2018
+27,099
+1,887
+32,490
+2,025
+29,124
+Share of net assets
+31 December 31 December
+20.06%
+2019
+20.06
+918,299
+Net assets
+103,809
+94,818
+Profit from continuing operations
+12,652
+13,362
+Reconciled to the Group's interests in the associate
+Gross amounts of net assets of the associate attribute to the parent company
+Group's effective interest
+88,041
+81,215
+20.08%
+Group's share of net assets of the associate
+17,661
+16,308
+Goodwill
+10,457
+10,051
+Carrying amount of the Group's interest in Standard Bank
+in the consolidated financial statements
+28,118
+26,359
+(b) Movements of associates and joint ventures investments of the Group are as follows:
+*
+Movements during the year
+1,023,850
+Associate directly held by the Bank
+Standard Bank*
+1,013,117
+Liabilities
+2018
+20.08
+Voting
+rights %
+31 December
+2019
+Place of
+registration
+Principal
+activities
+Issued
+capital
+20.06
+Johannesburg,
+Commercial
+ZAR162 million
+Republic of
+South Africa
+banking
+*
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the Group
+to widen its customer base in Africa.
+The market value of the Group's investment in Standard Bank amounts to RMB27,105 million as at 31 December 2019
+(31 December 2018: RMB27,677 million).
+216
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(ii) Particulars of the Group's only material associate are as follows:
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts using the equity method in the Group's consolidated financial statements is as follows:
+2019
+2018
+Gross amounts of the associate
+Assets
+1,127,659
+Management
+ARS3,505 million
+Beijing, the PRC
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+100
+100
+100
+88
+100
+USD120 million
+USD120 million
+New York,
+United States
+Buenos Aires,
+Argentina
+Lima, Peru
+Delaware and
+New York,
+United States
+Shanghai, the PRC
+00
+Insurance
+Commercial
+Broker dealer
+Commercial
+banking
+Commercial
+Real202 million
+Real202 million
+Sao Paulo, Brazil
+banking
+Commercial
+Industrial and Commercial Bank of China
+100
+10
+100
+banking
+100
+100
+ICBC PERU BANK
+Investment
+100
+0
+10
+100
+USD50 million
+USD50.25 million
+ICBC-AXA Assurance Co., Ltd. *
+60
+60
+60
+Industrial and Commercial Bank of China
+80
+80
+80
+RMB12,505 million
+USD369 million
+RMB7,980 million
+USD306 million
+(USA) NA
+Industrial and Commercial Bank of China
+80
+80
+80
+80
+ARS1,345 million
+(Argentina) S.A.("ICBC Argentina")
+80
+100
+NZD234 million
+NZD234 million
+ICBC Financial Asset Investment Co., Ltd.*
+100
+100
+100
+RMB12,000 million
+RMB12,000 million
+London,
+United Kingdom
+Nanjing, the PRC
+Banking
+Financial asset
+("ICBC Investment")
+investment
+ICBC Austria Bank GmbH
+100
+100
+100
+EUR100 million
+EUR100 million
+Vienna, Austria
+Commercial
+banking
+ICBC Wealth Management Co., Ltd.*
+100
+100
+RMB16,000 million
+RMB16,000 million
+USD839 million
+Wealth
+USD1,083 million
+60
+Auckland,
+(New Zealand) Limited
+New Zealand
+and investment
+banking
+Commercial
+banking
+("ICBC New Zealand")
+Industrial and Commercial Bank of China
+100
+100
+100 MXN1,597 million
+MXN1,597 million
+Mexico S.A.
+ICBC Turkey Bank Anonim Sirketi
+92.84
+92.84
+92.84
+TRY860 million
+USD425 million
+Mexico City, Mexico
+Istanbul, Turkey
+Commercial
+banking
+Commercial
+("ICBC Turkey")
+banking
+ICBC Standard Bank PLC ("ICBC Standard")
+60
+60
+Balance of
+provision for
+60,701
+Name of
+investee
+164,941
+454,878
+Accumulated depreciation and impairment:
+At 1 January 2018
+55,646
+41
+8,318
+56,475
+14,439
+134,919
+Depreciation charge for the year
+76,898
+5,671
+6,868
+6,908
+20,315
+Impairment charge for the year
+3,088
+3,088
+Disposals
+(616)
+(30)
+(3,983)
+(944)
+868
+11,928
+39,752
+161,359
+35,122
+10,954
+74,860
+160,821
+432,902
+Additions
+2,430
+14,997
+1,453
+6,155
+14,837
+39,872
+CIP transfer in/(out)
+8,962
+(9,918)
+116
+840
+Disposals
+(1,178)
+(449)
+(479)
+(4,233)
+(11,557)
+(17,896)
+At 31 December 2019
+(5,573)
+At 31 December 2018
+60,701
+41
+(6,886)
+At 31 December 2019
+65,704
+38
+9,983
+61,791
+30,801
+168,317
+Carrying amount:
+At 31 December 2018
+90,444
+35,081
+1,798
+15,500
+147,581
+290,404
+At 31 December 2019
+95,655
+39,714
+1,945
+15,107
+134,140
+286,561
+218
+ICBC
+(1,854)
+151,145
+(4,187)
+(3)
+9,156
+59,360
+23,491
+152,749
+Impact of adopting IFRS 16
+(588)
+(588)
+At 1 January 2019
+100
+41
+9,156
+59,360
+22,903
+152,161
+Depreciation charge for the year
+5,798
+874
+6,618
+6,368
+19,658
+Impairment charge for the year
+3,384
+3,384
+Disposals
+(795)
+(47)
+At 1 January 2019
+(10,251)
+(10,251)
+(52)
+2,833
+Associates
+Standard Bank
+26,359
+Others
+1,088
+2,512
+(703)
+703
+Subtotal
+27,447
+2,512
+(703)
+2,611
+519
+(519)
+(1,553)
+1,156
+30,951
+(348)
+Total
+29,472
+2,564
+(828)
+(2)
+2,520
+(10)
+28,118
+at the beginning
+Increase
+of the year
+in capital
+Decrease
+in capital
+income
+recognised
+under equity
+method
+Other
+comprehensive
+income
+Declared
+distribution of
+cash dividends
+or profits
+Others
+Balance
+at the end
+of the year
+impairment
+at the end
+of the year
+Joint ventures
+2,025
+52
+(125)
+(91)
+(168)
+194
+1,887
+2,621
+(519)
+(1,551)
+1,208
+(348)
+Balance
+(519)
+1,350
+15,574
+680
+6,509
+42,148
+70,361
+CIP transfer in/out)
+4,099
+(9,553)
+114
+5,340
+Disposals
+(921)
+(471)
+(101)
+(4,200)
+(4,178)
+(9,871)
+At 31 December 2018
+151,145
+35,122
+10,954
+74,860
+171,072
+443,153
+Impact of adopting IFRS 16
+5,450
+(1,721)
+Additions
+127,762
+32,838
+(348)
+Annual Report 2019
+217
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+27. PROPERTY AND EQUIPMENT
+Cost:
+Office
+equipment
+Properties and
+Construction
+Leasehold
+and motor
+Aircraft and
+buildings
+in progress
+improvements
+vehicles
+vessels
+Total
+At 1 January 2018
+142,517
+29,572
+10,375
+72,437
+382,663
+Industrial and Commercial Bank of China
+Financial Services LLC
+Industrial and Commercial Bank of China
+(Thai) Public Company Limited
+("ICBC Thai")
+Unlisted
+1,011,993
+1,060,108
+1,421,609
+1,399,937
+Equity investments:
+Listed outside Hong Kong
+Unlisted
+Other investments:
+Unlisted
+831
+688
+54,432
+29,231
+55,263
+29,919
+216,471
+1,476,872
+307
+1,430,163
+The Group designates part of non-trading equity investments as financial investments measured at FVOCI. As
+at 31 December 2019, the fair value of such equity investments was RMB55,263 million (31 December 2018:
+RMB29,919 million). During the year, dividend income recognised for such equity investments was RMB978 million (2018:
+RMB229 million) and there was no dividend income for the termination of such equity investments during the year (2018:
+RMB1 million). The value of the Group disposal of such equity investments was RMB112 million (2018: RMB25 million)
+and the cumulative gain of transferring into retained earnings from other comprehensive income after disposal was
+RMB20 million during the year (2018: the cumulative loss was RMB1 million).
+Annual Report 2019
+211
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Movements of the allowance for impairment losses on financial investments measured at FVOCI are as follows:
+Balance at 1 January 2019
+Transfer:
+to stage 1
+Stage 1
+1,622
+Stage 2
+92
+307
+Stage 3
+246,091
+123,358
+Banks and other financial institutions
+Corporate entities
+Accrued interest
+Equity investments (i)
+Other investments
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+31 December
+2019
+31 December
+2018
+421,919
+413,941
+198,839
+223,877
+Listed outside Hong Kong
+306,242
+474,271
+436,824
+20,338
+22,610
+1,421,609
+1,399,937
+55,263
+29,919
+307
+1,476,872
+1,430,163
+Analysed into:
+Debt securities:
+Listed in Hong Kong
+163,525
+302,685
+Policy banks
+196
+― to stage 3
+1,622
+92
+16
+196
+(1,385)
+172
+1,910
+Allowance for impairment losses on financial investments measured at FVOCI is recognised in other comprehensive income
+without decreasing the carrying amount of financial investments presented in the statement of financial position, and any
+impairment loss or gain is recognised in the profit or loss. As at 31 December 2019, the financial investments measured at
+FVOCI included credit-impaired financial investments whose impairment provision have been fully charged.
+212
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(c) Financial investments measured at amortised cost
+31 December
+2019
+31 December
+2018
+91
+Debt securities (analysed by type of issuers):
+Including: Special government bond (i)
+Policy banks
+Banks and other financial institutions
+Including: Huarong bonds (ii)
+Corporate entities
+Accrued interest
+4,308,456
+3,618,546
+85,000
+85,000
+412,287
+501,634
+340,708
+264,929
+Governments and central banks
+― to stage 2
+(1,476)
+166
+Other movements
+Charge/(reverse)
+(1)
+1
+151
+(13)
+Other movements
+6
+Balance at 31 December 2019
+1,778
+80
+198
+%N
+Total
+1,910
+Balance at 31 December 2018
+138
+2,056
+Balance at 1 January 2018
+Stage 1
+2,933
+Stage 2
+Stage 3
+Total
+190
+3,123
+Transfer:
+― to stage 1
+― to stage 2
+1
+to stage 3
+(Reverse)/charge
+8
+Governments and central banks
+Debt securities (analysed by type of issuers):
+(i)
+67,886
+16,059
+153,637
+67,312
+Equity investments
+10,121
+5,484
+163,758
+72,796
+Financial investments designated as at FVTPL
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Corporate entities
+8,493
+9,155
+29,267
+38,077
+34,585
+39,651
+4,152
+5,623
+76,497
+92,506
+463,035
+493,230
+539,532
+585,736
+Funds and other investments
+Annual Report 2019
+16,984
+Banks and other financial institutions
+24. FINANCIAL INVESTMENTS
+Financial investments measured at FVTPL
+Financial investments measured at FVOCI
+Financial investments measured at amortised cost
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+09
+31 December
+31 December
+2019
+2018
+962,078
+805,347
+1,476,872
+1,430,163
+28,578
+5,208,167
+7,647,117
+6,754,692
+(a) Financial investments measured at FVTPL
+31 December
+2019
+31 December
+2018
+Financial investments held for trading
+Debt securities (analysed by type of issuers):
+Governments and central banks
+52,016
+33,141
+Policy banks
+5,157
+1,128
+4,519,182
+209
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Unlisted
+341,497
+231,343
+358,257
+243,749
+Equity investments:
+Listed in Hong Kong
+6,577
+3,805
+Listed outside Hong Kong
+8,481
+3,688
+Unlisted
+65,561
+8,135
+20,497
+27,990
+Funds and other investments:
+Listed outside Hong Kong
+Unlisted
+472
+1,104
+522,730
+532,504
+523,202
+533,608
+962,078
+805,347
+210
+ICBC
+(b) Financial investments measured at FVOCI
+80,619
+12,373
+Listed outside Hong Kong
+4,271
+Financial investments measured at FVTPL (mandatory)
+Debt securities (analysed by type of issuers):
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Equity investments
+Funds and other investments
+Analysed into:
+31 December
+2019
+31 December
+2018
+7,020
+10,086
+115,943
+69,785
+5,160
+4,387
+Listed in Hong Kong
+Debt securities:
+805,347
+962,078
+146,815
+90,309
+258,788
+60,167
+22,506
+70,498
+83,931
+128,123
+4,060
+40,378
+90,309
+44,145
+44,474
+100
+USD200 million
+USD200 million
+London,
+banking
+Commercial
+United Kingdom
+banking
+80
+RMB200 million
+RMB433 million
+Beijing, the PRC
+Fund
+Industrial and Commercial Bank of China
+(Europe) S.A.
+100
+Commercial
+100
+EUR437 million
+EUR437 million
+Luxembourg
+management
+Commercial
+banking
+PT. Bank ICBC Indonesia ("ICBC Indonesia")
+98.61
+98.61
+98.61 IDR3,706,100 million
+USD361 million
+Jakarta, Indonesia
+Commercial
+Bank ICBC (Joint stock company)
+100
+100
+100
+Almaty, Kazakhstan
+KZT8,933 million
+Amount
+invested
+by the Bank
+HKD54,738 million
+Place of
+incorporation/
+registration
+and operations
+Principal
+activities
+Hong Kong, the PRC
+Commercial
+(Asia) Limited ("ICBC Asia")
+banking
+ICBC International Holdings Limited
+100
+("ICBC International")
+Industrial and Commercial Bank of China
+100
+KZT8,933 million
+88
+100
+(Almaty) Joint Stock Company
+ICBC (London) PLC ("ICBC London")
+100
+100
+ICBC Credit Suisse Asset Management
+80
+8888
+100
+HKD4,882 million
+HKD4,882 million Hong Kong, the PRC
+Investment
+banking
+100
+100
+100
+RUB10,810 million
+RUB10,810 million
+Commercial
+banking
+Commercial
+banking
+Industrial and Commercial Bank of China
+80
+80
+80
+CAD208 million
+CAD218.66 million
+0
+Toronto, Canada
+Commercial
+(Canada)
+Zhejiang, the PRC
+Chongqing, the PRC
+banking
+100
+00
+100
+100
+MYR833 million
+MYR833 million
+(Malaysia) Berhad
+Industrial and Commercial Bank of China
+97.86
+97.86
+97.98 THB20,132 million
+THB23,711 million
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+Commercial
+Industrial and Commercial Bank of China
+RMB100 million
+RMB100 million
+100
+Moscow, Russia
+banking
+Commercial
+ICBC Financial Leasing Co., Ltd. *
+100
+100
+100
+RMB18,000 million
+RMB11,000 million
+Tianjin, the PRC
+banking
+Leasing
+("ICBC Leasing")
+Industrial and Commercial Bank of China
+89.33
+89.33
+89.33
+MOP589 million
+MOP12,064 million
+80
+100
+100
+Chongqing Bishan ICBC Rural Bank Co., Ltd. *
+RMB120 million
+RMB200 million
+2019
+HKD44,188 million
+60
+60
+60
+banking
+(Macau) Limited ("ICBC Macau")
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd. *
+Commercial
+Macau, the PRC
+60
+banking
+Commercial
+banking
+100
+100
+4,519,182
+Market value of listed securities
+120,952
+123,618
+Annual Report 2019
+213
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Movements of the allowance for impairment losses on financial investments measured at amortised cost are as follows:
+Balance at 1 January 2019
+Stage 1
+1,504
+Stage 2
+854
+Stage 3
+125
+5,208,167
+Total
+Transfer:
+to stage 1
+1
+(1)
+― to stage 2
+― to stage 3
+Charge
+695
+486
+Other movements
+55
+NIII
+1,181
+2
+2,483
+57
+29,560
+29,560
+69,483
+61,622
+5,175,079
+4,491,205
+Other investments (iii)
+Accrued interest
+36,611
+198
+30,331
+129
+36,809
+30,460
+5,211,888
+Less: Allowance for impairment losses
+(3,721)
+35,362
+4,521,665
+(2,483)
+4,519,182
+Analysed into:
+Debt securities:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+41,955
+77,062
+5,053,788
+36,855
+86,296
+4,366,471
+5,172,805
+4,489,622
+Other investments:
+Unlisted
+35,362
+5,208,167
+Balance at 31 December 2019
+2,255
+1,339
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the Ministry of Finance of the People's Republic of China (the "MOF") to the Bank in 1998. The bond will mature in
+2028 and bears interest at a fixed rate of 2.25% per annum.
+The Huarong bonds are a series of long-term bonds issued by China Huarong Asset Management Co., Ltd.
+("Huarong") in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The
+proceeds from the issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are
+non-negotiable, with a tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank
+received a notice from the MOF that the maturity dates of the Huarong bonds were extended for another ten years
+and the interest rate remains unchanged. Additionally, the MOF will continue providing funding in support of the
+repayment of the principal and interest of the bonds. In 2020, the Bank received a further notice from the MOF
+to adjust the interest rate of the Huarong bonds, which will be determined on yearly basis with reference to the
+average level of five-year government bond yield in the previous year. As at 31 December 2019, the Bank received
+accumulated early repayments amounting to RMB222,687 million.
+(iii) Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from January 2020 to November 2032 and bear interest rates ranging from 2.00% to
+6.73% per annum.
+25. INVESTMENTS IN SUBSIDIARIES
+Listed investments, at cost
+Unlisted investments, at cost
+214
+ICBC
+Bank
+31 December
+31 December
+2019
+2018
+2,712
+2,712
+(ii)
+142,608
+145,320
+122,110
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Percentage of equity interest % Voting rights %
+Nominal value of
+issued share/
+paid-in capital
+31 December
+31 December
+31 December
+Name
+2019
+2018
+2019
+119,398
+(i)
+2,483
+125
+127
+3,721
+Stage 1
+Stage 2
+Stage 3
+Total
+Balance at 1 January 2018
+1,171
+2
+83
+1,256
+Transfer:
+― to stage 1
+― to stage 2
+to stage 3
+Charge
+Other movements
+1,504
+23
+2
+21
+1,204
+38
+100
+841
+2
+(2)
+11
+(11)
+854
+Balance at 31 December 2018
+325
+Co., Ltd. *
+228
+Notes to the Financial Statements
+514,801
+Certificates of deposit issued by Hong Kong Branch, Tokyo Branch, Seoul Branch, Luxembourg Branch, Doha Branch, Sydney
+Branch, New York Branch, Dubai (DIFC) Branch, London Branch, ICBC Asia, ICBC Macau and ICBC New Zealand were
+recognised at amortised cost.
+224
+ICBC
+34. DUE TO CUSTOMERS
+Demand deposits:
+Corporate customers
+Personal customers
+Time deposits:
+Corporate customers
+Personal customers
+Others
+Accrued interest
+35. DEBT SECURITIES ISSUED
+Subordinated bonds and
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+31 December
+2019
+31 December
+2018
+6,732,558
+6,405,136
+263,273
+363
+15,375
+8,980
+184
+ICBC
+Repurchase agreements-securities:
+Banks
+Other financial institutions
+Cash received as collateral
+on securities lending
+Accrued interest
+33. CERTIFICATES OF DEPOSIT
+31 December
+31 December
+4,328,090
+2019
+24,252
+18,709
+24,252
+18,709
+107,917
+331,691
+121,940
+148,663
+229,857
+480,354
+2018
+3,931,182
+11,060,648
+10,336,318
+282,459
+Other debt securities issued by
+The Bank
+Subsidiaries
+Accrued interest
+251,849
+225,075
+138,876
+108,904
+1,946
+350,204
+1,404
+335,383
+742,875
+617,842
+As at 31 December 2019, the amount of debt securities issued due within one year was RMB117,233 million (31 December
+2018: RMB92,045 million).
+Annual Report 2019
+225
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(1) Subordinated bonds and Tier 2 Capital Notes
+392,671
+Repurchase agreements-bills:
+3,473
+9,122
+5,295,704
+5,076,005
+6,149,654
+5,505,236
+11,445,358
+10,581,241
+234,852
+268,914
+236,797
+222,461
+6,059
+22,977,655
+31 December
+2019
+31 December
+2018
+Tier 2 Capital Notes issued by
+(1)
+The Bank
+Subsidiaries
+Accrued interest
+336,063
+8,082
+269,864
+21,408,934
+Repurchase agreements comprise repurchases of bills, securities and cash received as collateral on securities lending.
+32. REPURCHASE AGREEMENTS
+1,814,495
+173
+108
+94
+(5)
+197
+Carrying amount:
+At 1 January 2019
+16,827
+13,398
+71
+24
+30,296
+16,719
+15,218
+1,524
+33,461
+222
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+30. FINANCIAL LIABILITIES DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS
+Interbank wealth management products
+Financial liabilities related to precious metals
+At 31 December 2019
+Debt securities
+At 31 December 2019
+Disposals
+Disposals
+At 31 December 2019
+480
+480
+year
+5,775
+692
+104
+6,571
+(55)
+(5)
+(29)
+5,720
+1,143
+104
+6,967
+Impairment:
+At 1 January 2019
+108
+Impairment charge for the year
+24
+70
+(84)
+The Bank:
+Others
+31 December
+31 December
+2019
+31 December
+2018
+Banks and other financial institutions operating in Mainland China
+Banks and other financial institutions operating outside Mainland China
+Accrued interest
+1,640,846
+1,202,671
+132,600
+123,317
+2,874
+2,258
+Deposits:
+1,776,320
+Money market takings:
+Banks and other financial institutions operating in Mainland China
+Banks and other financial institutions operating outside Mainland China
+Accrued interest
+153,903
+128,015
+329,375
+346,186
+6,975
+12,048
+490,253
+2,266,573
+486,249
+1,328,246
+31 December
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Financial Statements for the year ended 31 December 2019
+2019
+2018
+(1)
+(2)
+19,580
+11,480
+60,454
+67,266
+(2)
+13,064
+2,285
+(In RMB millions, unless otherwise stated)
+9,144
+102,242
+87,400
+(1)
+(2)
+The principal-guaranteed interbank wealth management products issued by the Group and the financial assets in which
+the aforesaid products form parts of a group of financial instruments that are managed together on a fair value basis, and
+are classified as financial liabilities and financial assets designated as at FVTPL, respectively. As at 31 December 2019, the
+fair value of the interbank wealth management products was approximately the same as the amount that the Group would
+be contractually required to pay to the holders of the wealth management products upon maturity (31 December 2018:
+approximately the same).
+Financial liabilities related to precious metals and issued debt securities have been matched with precious metals and
+derivative as part of a documented risk management strategy to mitigate market risk, such as interest rate risk. An accounting
+mismatch would arise if these financial liabilities were accounted at amortised cost, whereas the related precious metals and
+derivative were measured at fair value with movements in the fair value taken through the statement of profit or loss. By
+designating these financial liabilities at FVTPL, the movement in their fair values is recorded in the statement of profit or loss.
+As at 31 December 2019, the difference between the fair value of the financial liabilities related to precious metals and issued
+debt securities and the amount that the Group would be contractually required to pay to the holders of the financial liabilities
+related to precious metals and issued debt securities upon maturity was not significant.
+There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value of
+the financial liabilities arising from changes in credit risk were not considered significant during the year of 2019 and the
+year of 2018. The changes in fair value of the financial liabilities were mainly attributable to changes in other market factors.
+Annual Report 2019
+223
+Notes to the Financial Statements
+6,369
+40,625
+As approved by the PBOC and the CBIRC, the Bank issued callable subordinated bonds and Tier 2 Capital Notes through open market
+bidding in 2010, 2011, 2012, 2017 and 2019. Approved by the PBOC, these subordinated bonds and Tier 2 Capital Notes were traded in the
+bond market among banks. The relevant information is set out below:
+Amount
+Currency
+Issue price
+Amount
+(original
+currency)
+(million)
+Ending
+balance
+(In RMB)
+Coupon
+rate
+Value date
+Maturity date
+Circulation date Note
+(million)
+15 USD
+Tier 2 Capital Notes
+15/09/2015
+USD
+99.189
+2,000
+13,926 4.875% 21/09/2015
+21/09/2025
+22/09/2015
+(xi)
+(xi)
+Issue date
+Name
+In 2015, the Bank issued Tier 2 Capital Notes denominated in USD. Approved by the Stock Exchange of Hong Kong Limited for
+listing and dealing, the Notes are listed on the Stock Exchange of Hong Kong Limited. The relevant information is set out below:
+The Bank has the option to redeem all of the bonds on 26 April 2024 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 26 April 2029 upon the approval of the relevant regulatory authorities.
+10,000
+10,000
+4.69%
+26/04/2019
+26/04/2034
+28/04/2019
+(x)
+(i)
+(ii)
+(iii)
+226
+(iv)
+(vi)
+(vii)
+The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 8 November 2022 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 22 November 2022 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 25 March 2024 upon the approval of the relevant regulatory
+authorities.
+(viii) The Bank has the option to redeem all of the bonds on 25 March 2029 upon the approval of the relevant regulatory
+authorities.
+(ix)
+(x)
+(v)
+On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal
+amount with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(viii) London Branch issued notes amounting to RMB28,010 million denominated in GBP, USD and EUR with maturities between
+2020 and 2023 at floating interest rates. Of which, in 2019, London Branch issued notes amounting to RMB1,847 million
+denominated in GBP with maturity in 2022 at floating interest rates.
+Subsidiaries:
+(i)
+(!!)
+(iii)
+(iv)
+(v)
+(vi)
+Notes to the Financial Statements
+(vii)
+ICBC Leasing issued medium-term debt securities and notes amounting to RMB77,830 million denominated in RMB and USD
+with maturities between 2020 and 2027 at fixed or floating interest rates.
+Of which, Skysea International Capital Management Limited ("Skysea International"), which is controlled by the Group,
+issued guaranteed notes of USD750 million with a fixed interest rate of 4.875% in 2011. As at 31 December 2019, Skysea
+International has redeemed USD153 million and the carrying amount of the Notes were RMB4,152 million. The Notes were
+guaranteed by Hong Kong Branch and were issued at the price fixed at 97.708% of the nominal amount with maturities due
+on 7 December 2021. By satisfying certain conditions, Skysea International has the option to redeem all of the notes at any
+time. The Notes were listed on the Stock Exchange of Hong Kong Limited.
+ICBCIL Finance Co. Ltd., which is controlled by the Group, issued medium-term notes amounting to RMB64,830 million
+denominated in USD with maturities between 2020 and 2027 at fixed or floating interest rates. Of which, in 2019, ICBCIL
+Finance Co. Ltd. issued medium-term notes amounting to RMB14,586 million denominated in USD with maturities in 2022
+and 2024 at fixed or floating interest rates. By satisfying certain conditions, ICBCIL Finance Co. Ltd. has the option to redeem
+all of the notes at any time. Above notes were guaranteed by ICBC Leasing and listed on the Irish Stock Exchange and the
+Stock Exchange of Hong Kong Limited respectively.
+Hai Jiao 1400 limited, which is controlled by the Group, issued a private placement bond amounting to RMB842 million
+denominated in USD with maturity in 2025 at a fixed interest rate. The bond was guaranteed by The Export-Import Bank of
+Korea.
+ICBC Financial Leasing issued medium-term debt securities and notes inside China amounting to RMB8,006 million
+denominated in RMB with maturities between 2021 and 2024 at fixed interest rates. Of which, in 2019, ICBC Financial
+Leasing issued medium-term debt securities and notes amounting to RMB5,250 million denominated in RMB with maturities
+in 2022 and 2024 at fixed interest rates.
+ICBC Thai issued debt securities amounting to RMB7,531 million denominated in THB with maturities between 2020 and
+2026 at fixed interest rates. Of which, in 2019, ICBC Thai issued debt securities amounting to RMB4,243 million denominated
+in THB with maturities between 2020 and 2022 at fixed interest rates.
+ICBC International issued medium-term debt securities and notes amounting to RMB14,266 million denominated in USD with
+maturity between 2020 and 2022 at a fixed or floating interest rate. Of which, in 2019, ICBC International issued medium-
+term debt securities and notes amounting to RMB4,869 million denominated in USD with maturities in 2022 at fixed interest
+rate.
+ICBC New Zealand issued medium-term debt securities and notes amounting to RMB3,097 million denominated in AUD and
+NZD with maturities between 2020 and 2024 at fixed or floating interest rates. Of which, in 2019, ICBC New Zealand issued
+medium-term debt securities and notes amounting to RMB935 million denominated in NZD with maturity in 2022 and 2024
+at fixed or floating interest rates.
+ICBC Argentina issued medium-term debt securities and notes amounting to RMB233 million denominated in ARS with
+maturities in 2020 at floating interest rates.
+In 2019, ICBC Financial Asset Investment issued medium-term debt securities and notes amounting to RMB18,000 million
+denominated in RMB with maturities in 2022 and 2024 at fixed interest rates.
+ICBC Asia issued medium-term debt securities and notes and interbank deposits amounting to RMB17,919 million
+denominated in RMB, USD, EUR and HKD with maturities between 2020 and 2023 at fixed or floating interest rates. Of
+which, in 2019, ICBC Asia issued medium-term debt securities and notes amounting to RMB5,600 million denominated in
+RMB with maturities in 2022 at fixed interest rates, and interbank deposits amounting to RMB247 million denominated in
+RMB with maturities in 2020 at fixed interest rates.
+100 Yuan
+227
+(vii) Hong Kong Branch issued notes amounting to RMB49,711 million denominated in RMB, USD and HKD with maturities
+between 2020 and 2024 at fixed or floating interest rates. Of which, in 2019, Hong Kong Branch issued notes amounting to
+RMB26,455 million denominated in RMB, USD and HKD maturity between 2020 and 2024 at fixed or floating interest rates.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and
+Tier 2 Capital Notes during the reporting period (2018: Nil).
+Subsidiaries:
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million, bearing a
+fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal amount with maturity
+due on 30 November 2020.
+On 23 March 2018, ICBC Thai issued a Tier 2 Capital Notes with an aggregate nominal amount of THB5,000 million, bearing a fixed
+interest rate of 3.5%. The bond was issued with maturity due on 23 September 2028.
+On 12 September 2019, ICBC Macau issued a Tier 2 Capital Notes with an aggregate nominal amount of USD500 million, bearing a
+fixed interest rate of 2.875% per annum. The bond was issued at the price fixed at 99.226% of the nominal amount with maturity
+due on 12 September 2029.
+The above subordinated bonds and Tier 2 Capital Notes are separately listed on the Stock Exchange of Hong Kong Limited and Thai
+bond market association. ICBC Asia, ICBC Thai and ICBC Macau have not had any defaults of principal or interest or other breaches
+with respect to the subordinated bonds and Tier 2 Capital Notes during the period (2018: Nil).
+(2) Other debt securities issued
+As at 31 December 2019, the Group's other debt securities issued mainly include:
+The Bank:
+Annual Report 2019
+(i)
+(iii)
+(iv)
+(v)
+(vi)
+Sydney Branch issued notes and interbank deposits amounting to RMB14,459 million denominated in AUD, CHF, RMB, HKD,
+USD, GBP and EUR with maturities between 2020 and 2024 at fixed or floating interest rates. Of which, in 2019, Sydney
+Branch issued notes amounting to RMB3,048 million denominated in AUD and USD with maturity between 2022 and 2024
+at fixed or floating interest rates; in 2019 Sydney Branch also issued interbank deposits amounting to RMB2,693 million
+denominated in CHF, RMB, GBP, EUR and USD with maturity in 2020.
+Singapore Branch issued notes amounting to RMB43,925 million denominated in RMB, USD and EUR with maturities
+between 2021 and 2024 at fixed or floating interest rates. Of which, in 2019, Singapore Branch issued notes amounting to
+RMB16,688 million denominated in RMB, USD and EUR with maturity between 2021 and 2024 at fixed or floating interest
+rates.
+In 2019, Tokyo Branch issued notes amounting to RMB898 million denominated in JPY with maturities in 2020 at fixed
+interest rates.
+New York Branch issued notes amounting to RMB51,108 million denominated in USD with maturities between 2020 and
+2027 at fixed or floating interest rates. Of which, in 2019, New York Branch issued notes amounted to RMB24,698 million
+denominated in USD with maturities in 2020 at fixed interest rates.
+Luxembourg Branch issued notes amounting to RMB28,301 million denominated in USD and EUR with maturities between
+2020 and 2024 at fixed or floating interest rates. Of which, in 2019, Luxembourg Branch issued notes amounting to
+RMB13,809 million denominated in USD and EUR with maturities between 2020 and 2024 at fixed or floating interest rates.
+Dubai (DIFC) Branch issued notes amounting to RMB35,437 million denominated in USD and EUR with maturities
+between 2020 and 2024 at fixed or floating interest rates. Of which, in 2019 Dubai (DIFC) issued notes amounting to
+RMB6,953 million denominated in USD with maturities in 2022 and 2024 at floating interest rates.
+(ii)
+24/04/2019
+19 ICBC 04 Bond
+(ix)
+30/06/2011
+30/06/2031
+03/11/2010
+30/08/2011
+(i)
+(ii)
+11 ICBC 02 Bond
+29/12/2011
+100 Yuan
+50,000
+50,000
+5.56%
+5.50%
+30/12/2026
+17/01/2012
+(iii)
+12 ICBC 01 Bond
+11/06/2012
+100 Yuan
+20,000
+20,000
+4.99%
+13/06/2012
+30/12/2011
+13/06/2027
+38,000
+100 Yuan
+Name
+Issue date
+(In RMB)
+(In RMB)
+Ending
+balance
+(In RMB)
+Coupon
+rate
+Value date
+Maturity date
+Circulation date Notes
+38,000
+(million)
+10 ICBC 02 Bond
+10/09/2010
+100 Yuan
+16,200
+16,200
+4.10%
+14/09/2010
+14/09/2025
+11 ICBC 01 Bond
+29/06/2011
+(million)
+Issue price
+13/07/2012
+17 ICBC 01 Bond
+25/03/2029
+26/03/2019
+(vii)
+19 ICBC 02 Bond
+21/03/2019
+100 Yuan
+10,000
+10,000
+4.51%
+25/03/2019
+25/03/2019
+25/03/2034
+(viii)
+19 ICBC 03 Bond
+24/04/2019
+100 Yuan
+45,000
+45,000
+4.40%
+26/04/2019
+26/04/2029
+28/04/2019
+26/03/2019
+(iv)
+4.26%
+45,000
+06/11/2017
+100 Yuan
+44,000
+44,000
+4.45%
+08/11/2017
+08/11/2027
+10/11/2017
+(v)
+17 ICBC 02 Bond
+45,000
+20/11/2017
+44,000
+44,000
+4.45%
+22/11/2017
+22/11/2027
+23/11/2017
+(vi)
+19 ICBC 01 Bond
+21/03/2019
+100 Yuan
+100 Yuan
+1,628
+Banks
+Deferred
+income tax
+Change in fair value of financial instruments
+measured at FVTPL
+147
+(998)
+(851)
+Change in fair value of financial instruments
+measured at FVOCI
+(3,819)
+(1,962)
+(5,781)
+Accrued staff costs
+6,508
+(218)
+6,290
+Others
+3,101
+(3,173)
+62
+(10)
+58,375
+6,061
+(1,900)
+62,536
+220
+ICBC
+2019
+62,888
+Deferred income tax liabilities:
+10,450
+31 December
+636
+572
+143
+Change in fair value of financial instruments
+measured at FVOCI
+5,560
+1,357
+3,592
+900
+Others
+1,652
+415
+2,272
+575
+8,486
+1,873
+5,492
+1,217
+(b) Movements of deferred income tax
+Deferred income tax assets:
+1 January
+Allowance for impairment losses
+2019
+52,438
+Recognised in
+profit or loss
+Recognised in
+equity
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+1 January
+Impact of
+adopting
+IFRS 9
+1 January
+2018
+Recognised in
+profit or loss
+Recognised in
+equity
+31 December
+2018
+Allowance for
+impairment losses
+37,475
+7,254
+44,729
+7,709
+52,438
+Change in fair value of
+financial instruments
+measured at FVTPL
+(2,368)
+577
+(1,791)
+1,938
+147
+Change in fair value of
+financial instruments
+measured at FVOCI
+2017
+31 December
+Deferred income tax assets:
+1,873
+Recognised in
+Recognised in 31 December
+2019
+profit or loss
+equity
+2019
+(401)
+(134)
+(535)
+Allowance for impairment losses
+Change in fair value of financial instruments
+measured at FVTPL
+2,544
+143
+Change in fair value of financial instruments
+measured at FVOCI
+900
+457
+1,357
+Others
+575
+(160)
+415
+1,217
+199
+457
+493
+measured at FVTPL
+Change in fair value of financial instruments
+Allowance for impairment losses
+Held in the PRC (other than Hong Kong)
+Held overseas
+1,193
+2,027
+34
+27
+1,227
+2,054
+95,655
+90,444
+As at 31 December 2019, the process of obtaining the legal titles for the Group's properties and buildings with an aggregate
+carrying amount of RMB12,316 million (31 December 2018: RMB10,539 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+As at 31 December 2019, the carrying amount of aircraft and vessels leased out by the Group under operating leases was
+RMB134,140 million (31 December 2018: RMB147,581 million).
+As at 31 December 2019, the carrying amount of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB76,007 million (31 December 2018: RMB90,887 million).
+Annual Report 2019
+219
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+28. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+Deferred income tax assets:
+31 December 2019
+Deductible/
+(taxable)
+Deferred
+income tax
+Deductible/
+Short-term leases (less than 10 years):
+68,628
+72,387
+257
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+The carrying value of the Group's properties and buildings is analysed based on the remaining terms of the land leases as
+follows:
+Long-term leases (over 50 years):
+31 December
+2019
+31 December
+2018
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+Held overseas
+21,280
+18,148
+231
+(taxable)
+869
+745
+22,041
+19,762
+Medium-term leases (10 to 50 years):
+Held in the PRC (other than Hong Kong)
+70,906
+68,247
+Held in Hong Kong
+458
+124
+Held overseas
+1,023
+530
+4,433
+temporary
+assets/
+(liabilities)
+11,788
+3,101
+250,949
+62,536
+234,902
+58,375
+Deferred income tax liabilities:
+31 December 2019
+Taxable/
+(deductible)
+Taxable/
+(deductible)
+31 December 2018
+Deferred
+income tax
+temporary
+liabilities/
+temporary
+liabilities/
+differences
+(assets)
+differences
+(assets)
+(1,270)
+(535)
+(944)
+(401)
+(10)
+(209)
+Others
+6,508
+temporary
+differences
+31 December 2018
+Deferred
+income tax
+assets/
+(liabilities)
+Allowance for impairment losses
+252,387
+62,888
+210,624
+52,438
+Change in fair value of financial instruments
+measured at FVTPL
+differences
+(3,437)
+705
+147
+Change in fair value of financial instruments
+measured at FVOCI
+(22,954)
+(5,781)
+(14,248)
+(3,819)
+Accrued staff costs
+25,162
+6,290
+26,033
+(851)
+4,433
+636
+(3,819)
+16,842
+33,658
+122,318
+136,788
+182,391
+239,209
+2018
+2019
+31 December
+31 December
+Depreciation charge for the
+At 1 January 2019
+Accumulated depreciation:
+At 31 December 2019
+Disposals
+Additions
+At 1 January 2019
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+29. OTHER ASSETS
+Precious metals
+Settlement accounts
+Right-of-use assets (i)
+17,464
+Land use rights
+Goodwill
+Advance payments
+Interest receivable
+Others
+Less: Allowance for impairment losses
+(i) Right-of-use assets
+Cost:
+Repossessed assets
+10,917
+10,884
+9,517
+13,986
+71
+30,884
+6,478
+3,289
+1,567
+16,827
+11,334
+(741)
+(10)
+(1,593)
+22,463
+16,534
+(8,252)
+(842)
+221
+Total
+and vessels
+9,299
+7,715
+10,555
+2,233
+2,624
+28,514
+Leased office
+equipment
+and motor
+vehicles
+28,989
+(4,994)
+(4,120)
+480,399
+380,404
+Leased
+properties
+and buildings
+Leased
+aircraft
+384,524
+Annual Report 2019
+485,393
+1,217
+measured at FVOCI
+financial instruments
+Change in fair value of
+financial instruments
+measured at FVTPL
+Change in fair value of
+impairment losses
+Allowance for
+Deferred income tax liabilities:
+58,375
+(8,263)
+8,028
+58,610
+10,218
+48,392
+3,101
+(11)
+(1,217)
+Change in fair value of
+The Group did not have significant unrecognised deferred income tax assets and liabilities at the end of the reporting period.
+available-for-sale
+financial assets
+9,748
+(9,748)
+Change in fair value of
+Accrued staff costs
+6,910
+(402)
+6,508
+Others
+(3,373)
+7,702
+6,910
+available-for-sale
+4,329
+Others
+(38)
+973
+38
+-
+433
+6
+575
+(38)
+- 143
+439
+(398)
+(160)
+938
+900
+financial assets
+938
+973
+(38)
+143
+95
+Impact of
+adopting
+31 December
+(401)
+1 January
+2017
+IFRS 9
+2018
+Recognised in
+profit or loss
+Recognised in
+equity
+31 December
+2018
+(502)
+6
+(496)
+800
+80,000
+1
+80,000
+Total
+80,000
+80,000
+N/A
+N/A
+800
+N/A
+80,000
+801
+86,691
+Note: The RMB amount of perpetual bond as at 31 December 2019 is translated at the spot exchange rate on issuance date.
+1.
+Equity instrument
+(3) Interests attribute to equity instruments' holders
+6,691
+800
+In RMB
+(million)
+6,691
+1,190
+N/A
+Total equity attribute to equity holders of the parent company
+40,009
+N/A
+(million)
+(million pieces)
+(million)
+Amount
+RMB Perpetual bond
+currency
+(million pieces)
+(million)
+(million)
+USD Perpetual bond
+1
+1,000
+6,691
+1
+1,000
+In RMB
+(1) Equity attribute to ordinary equity holders of the parent company
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+2.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserve
+(c) General reserve
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+The general reserve balance of the Bank as at 31 December 2019 amounted to RMB295,962 million (31 December 2018:
+RMB271,201 million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+(d) Investment revaluation reserve
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVOCI.
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+(f) Cash flow hedge reserve
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(g) Other reserves
+119,558
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+235
+Annual Report 2019
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 27 March 2020, the total appropriation to surplus
+reserve of the Bank was RMB29,786 million (2018: RMB28,421 million), among which an appropriation of 10% of the
+profit of the Bank for the year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to
+the statutory surplus reserve, in the amount of RMB29,733 million (2018: RMB28,318 million) was approved and the total
+surplus reserve made by some overseas branches was RMB53 million (2018: RMB103 million) pursuant to the requirements
+of local authorities.
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Total equity attribute to non-controlling interests
+(1) Equity attribute to non-controlling interests of ordinary shares
+(2) Equity attribute to non-controlling interests of other equity instruments
+1 January
+2019
+31 December
+2019
+2,330,001
+2,676,186
+2,243,950
+2,470,054
+(2) Equity attribute to other equity instruments holders of the parent company
+86,051
+14,882
+15,817
+14,882
+15,817
+39. RESERVES
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(b) Surplus reserves
+(i) Statutory surplus reserve
+206,132
+Note: (1) The RMB amounts of offshore preference shares in Euro on 31 December 2019 are translated at the spot exchange rate on
+issuance date.
+The Perpetual Bond is paid by non-cumulative interest. The Bank shall have the right to cancel, in whole or in part,
+distributions on the Perpetual Bond and any such cancellation shall not constitute an event of default. The Bank may, at its
+sole discretion, use the proceeds from the cancelled distributions to meet other obligations as they fall due. However, the
+Bank shall not distribute profits to ordinary shareholders until resumption of full interest payment.
+(2) Perpetual Bond
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Bank falling to
+5.125% or below), with the consent of the CBIRC and without the consent of the bondholders, the Bank has the right to
+write down all or part of the above Perpetual Bond issued and existing at that time in accordance with the total par value,
+in order to restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%. Upon the occurrence of a Non-
+Viability Trigger Event, the Bank has the right to write down all the above Perpetual Bond issued and existing at that time in
+accordance with the total par value without the consent of the bondholders.
+The claims in respect of the Perpetual Bond, in the event of a winding-up of the Bank, will be subordinated to claims of
+depositors, general creditors, and subordinated indebtedness that rank senior to the Perpetual Bond; will rank in priority to
+all classes of shares held by the Bank's shareholders and rank pari passu with the claims in respect of any other Additional
+Tier 1 Capital instruments of the Bank that rank pari passu with the perpetual bond.
+The duration of the Perpetual Bond is the same as the continuing operation of the Bank. 5 years after the issuance date of
+the Perpetual Bond, the Bank shall have the right to redeem the Perpetual Bond in whole or in part on each distribution
+payment date (including the fifth distribution payment date since the issuance). Upon the issuance of the Perpetual Bond,
+in the event that the Perpetual Bond is not classified as other tier-one capital bonds due to unpredictable changes in
+regulations, the Bank shall have the right to redeem the Perpetual Bond fully instead of partly.
+With the approvals by relevant regulatory authorities, the Bank issued RMB80.0 billion undated capital bonds (hereinafter
+referred to as "Perpetual Bond") in China's national inter-bank bond market on 26 July 2019. Each Perpetual Bond has a par
+value of RMB100, and the annual coupon rate of the Bonds for the first five years is 4.45%, resetting every 5 years. The rate
+is determined by a benchmark rate plus a fixed spread. The fixed spread is the difference between the distribution rate and
+the benchmark rate as determined at the time of issuance. The fixed spread will not be adjusted once determined during the
+duration period.
+(ii) RMB Perpetual Bond
+the amendment of the maturity, distribution payment date and/or the distribution amount of the perpetual bond.
+ICBC Asia has a call option to redeem all the outstanding perpetual bond from 21 July 2021 or any subsequent distribution
+payment date thereafter.
+the conversion of all or a part of the principal and/or distribution of the perpetual bond into shares of ICBC Asia or
+another person; and/or
+(3)
+(2)
+reduction or cancellation of all or a part of the principal and/or distribution of the perpetual bond;
+(1)
+The perpetual bond will be written off up to the amount as directed by the Hong Kong Monetary Authority (hereinafter
+referred to as "HKMA") if the HKMA notifies ICBC Asia that in the opinion of the HKMA or a relevant government body,
+ICBC Asia would become non-viable if there is no written off of the principal. The perpetual bond also contains Hong Kong
+Bail-in Power. Each holder of the perpetual bond shall be subject to the exercise by the Hong Kong Resolution Authority to
+any or a combination of the following:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+233
+Annual Report 2019
+The distribution shall be payable semi-annually, with the first distribution payment date being 21 January 2017. ICBC
+Asia has the right to cancel distribution payment (subject to the requirement as set out in the terms and conditions of the
+perpetual bond) and the distribution cancelled shall not be cumulative.
+On 21 July 2016, ICBC Asia issued Basel III-compliant Non-Cumulative Subordinated Additional Tier 1 Capital Securities
+(hereinafter referred to as "Perpetual Bond") in the aggregate amount of US$1 billion (equivalent to approximately
+RMB6,676 million net of related issuance costs). Fixed rate for the first years after issuance of the bond is 4.25%. If
+perpetual bonds are not called, distribution will be reset based on the then prevailing 5-year USA national bonds yield plus a
+fixed initial spread (3.135 per cent. per annum) every 5 years.
+The funds raised by the Bank from the above-mentioned Perpetual Bond will be approved by applicable laws and regulatory
+agencies to supplement other Tier 1 capital of the Bank.
+(i) USD Perpetual Bond
+234
+Notes to the Financial Statements
+(h) Distributable profits
+(million pieces)
+(million)
+outstanding
+currency
+Amount
+In RMB
+currency
+Amount
+instrument
+In original
+31 December 2019
+In original
+In original
+Financial
+Movement during the year
+1 January 2019
+(c) Changes in perpetual bond outstanding
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+ICBC
+(b) Main Clauses
+Note: USD perpetual bond was issued by ICBC Asia, a subsidiary of the Bank.
+86,663
+Conversion
+condition
+(million) Maturity
+(million)
+pieces)
+Interest rate Issue price
+4.25%
+Equity
+2016-07-21
+USD Perpetual bond
+classification
+Issue date
+outstanding
+In RMB
+In original
+currency
+(million
+Accounting
+instrument
+Amount
+Financial
+(a) Perpetual bond outstanding at the end of the year
+Conversion
+1,000USD/Piece
+1
+1,000
+Book value
+28
+Less: Issue fees
+86,691
+801
+Total
+No
+None
+None
+(2) Offshore USD preferred shares and RMB preferred shares have been redeemed on 10 December 2019.
+80,000
+800
+100RMB/Piece
+4.45%
+Equity
+2019-07-26
+RMB Perpetual bond
+No
+None
+6,691 None
+80,000
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+1,605
+ICBC
+773
+Less: Amount transferred to profit or loss from other comprehensive income
+Income tax effect
+32,971
+9,687
+Changes in fair value of debt instruments measured at FVOCI
+Items that may be reclassified subsequently to profit or loss:
+(5)
+(5)
+3,880
+3,880
+Total comprehensive income
+4,023
+218
+(326)
+(35)
+3,880
+296,338
+300,218
+Capital injection by other equity instruments holders
+337
+Capital deduction by other equity instruments holders
+(2,434)
+8,026
+Others
+3,325
+4,271
+488
+(530)
+Other comprehensive income recognised under equity method
+Foreign currency translation differences
+(53)
+(634)
+(11)
+62
+(42)
+(696)
+(1,238)
+(64)
+Less: Income tax effect
+Losses during the year
+Reserve from cash flow hedging instruments
+Credit losses of debt instruments measured at FVOCI
+24,599
+(8,709)
+149,967
+(29,886)
+149,967
+(2,901)
+(ii)
+Includes the appropriation made by overseas branches in the amount of RMB2 million (2018: reversal in the amount of
+RMB9 million).
+Annual Report 2019
+237
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+40. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+Items that will not be reclassified to profit or loss:
+2019
+2018
+Changes in fair value of equity instruments designated as at FVOCI
+Less: Income tax effect
+Other comprehensive income recognised under equity method
+Others
+(53)
+2,086
+15
+(481)
+(38)
+Includes the appropriation made by overseas branches in the amount of RMB53 million (2018: RMB103 million).
+(i)
+(24,761)
+24,761
+756,163 1,259,397 2,571,423
+(2,901)
+(32,787)
+Dividends ordinary shares
+2018 final (note 17)
+(89,315)
+(89,315)
+Dividends preference shares (note 17)
+(4,525) (4,525)
+Appropriation to surplus reserve (i)
+(329)
+29,786
+Appropriation to general reserve (ii)
+24,761
+Balance as at 31 December 2019
+356,407 199,456
+153,303 287,353 295,962
+23,949
+(76)
+(4,239)
+(89)
+29,786 (29,786)
+(903)
+10,708
+27,809
+Total
+capital instruments
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+reserves
+Subtotal profits
+356,407
+79,375
+156,204
+229,146 259,374
+(6,661)
+(1,205)
+(3,965)
+71
+632,964
+Retained
+Other
+hedging
+General revaluation translation
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+The statement of changes in equity of the Bank during the year are set out below.
+Balance as at 1 January 2018
+Profit for the year
+Other comprehensive income
+Total comprehensive income
+Dividends ordinary shares
+2017 final (note 17)
+equity
+959,979 2,028,725
+Dividends preference shares (note 17)
+Reserves
+Foreign
+Issued
+share
+Other
+Investment currency
+Cash flow
+equity
+Capital
+Surplus
+Appropriation to surplus reserve (i)
+236
+282,044 282,044
+911
+257,567
+271,201
+19,926
+(294)
+(3,913)
+(54)
+700,637 1,111,446 2,247,865
+Profit for the year
+296,338
+296,338
+Other comprehensive income
+4,023
+218
+(326)
+(35)
+11
+433
+ICBC
+238
+156,204
+79,375
+356,407
+1 January 2019
+52
+(125)
+27,425
+27,425
+26,587
+911
+52
+(125)
+27,425
+26,587
+282,044
+(85,823) (85,823)
+(4,506) (4,506)
+28,421
+Appropriation to general reserve (ii)
+11,827
+28,421
+11,827
+(28,421)
+(11,827)
+Balance as at 31 December 2018 and
+309,469
+79,549
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+757
+Conversion
+condition
+(million) Maturity
+(million)
+shares)
+rate Issue price
+Conversion
+In RMB
+currency
+(million
+Dividend
+Accounting
+classification
+Issue date
+Financial instrument
+outstanding
+Overseas Preference
+In original
+(a) Preference shares outstanding at the end of the year
+(1) Preference shares
+38. OTHER EQUITY INSTRUMENTS
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+229
+Annual Report 2019
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+356,407
+356,407
+356,407
+356,407
+269,612
+269,612
+Amount
+Shares in:
+EUR
+2014-12-10
+119,558
+1,190
+Total
+No
+Mandatory
+70,000 None
+70,000
+700
+4.20% 100RMB/Share
+Equity
+2019-09-19
+RMB2019
+No
+Mandatory
+45,000 None
+45,000
+450
+Equity
+6.00% 15EUR/Share
+40
+00
+600
+4,558 None
+269,612
+Mandatory
+Domestic Preference
+Shares in:
+RMB2015
+2015-11-18
+Equity
+4.50% 100RMB/Share
+No
+Less: Issue fees
+269,612
+86,795
+169,898
+202,993
+Others
+686
+530
+Early retirement benefits
+1,260
+1,044
+Promissory notes
+10,937
+13,409
+Sundry tax payables
+25,308
+24,036
+525,125
+34,715
+Allowance for impairment losses on credit commitments
+29,524
+167,015
+225,055
+Lease liabilities (i)
+Settlement accounts
+2018
+2019
+31 December
+31 December
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+36. OTHER LIABILITIES
+N/A
+28,534
+409,819
+(i)
+Maturity analysis of contractual undiscounted cash flows of lease liabilities
+86,795
+86,795
+Nominal
+value
+(millions)
+31 December 2018
+Number
+of shares
+Nominal
+value
+(millions)
+of shares
+31 December 2019
+Number
+A shares of RMB1 Yuan each
+H shares of RMB1 Yuan each
+Issued and fully paid:
+37. SHARE CAPITAL
+There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2019
+(31 December 2018: Nil).
+29,524
+32,373
+8,048
+Less than one year
+One to two years
+Two to three years
+(!!)
+Three to five years
+More than five years
+86,795
+Contractual undiscounted cash flows of lease liabilities as at 31 December 2019
+31 December
+2019
+7,402
+6,005
+4,705
+6,213
+Ending balance of lease liabilities as at 31 December 2019
+89
+Salaries, bonuses, allowances and subsidies payables (ii)
+119,469
+147
+USD
+Overseas
+(million)
+In RMB
+currency
+(million)
+(million shares)
+(million)
+(million)
+(million shares)
+(million)
+(million)
+(million shares)
+outstanding
+2,940
+Amount
+currency
+Amount
+In RMB
+currency
+Amount
+instrument
+In original
+In original
+In original
+Financial
+31 December 2019
+Movements during the year
+1 January 2019
+(c) Changes in preference shares outstanding
+In RMB
+17,991
+(147)
+(2,940)
+Total
+Book value
+70,000
+70,000
+700
+70,000
+70,000
+700
+RMB2019
+45,000
+450
+45,000
+45,000
+450
+RMB2015
+Domestic
+(12,000)
+(17,991)
+EUR
+40
+600
+4,558
+40
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+600
+RMB
+120
+12,000
+12,000
+(120)
+(12,000)
+4,558
+(In RMB millions, unless otherwise stated)
+45,000
+Notes to the Financial Statements
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+g. Dividend setting mechanism
+Under the premise of obtaining the approval of the CBIRC and condition of redemption, the Group has right to redeem all
+or some of EUR Preference Shareholders in first call date (seven years after issuance) and subsequent any dividend payment
+date. Redemption price is equal to issue price plus accrued dividend in current period.
+Redemption
+f.
+The initial mandatory conversion price of EUR Preference Shareholders is 0.4793 Euro. In case of stock dividends distribution
+of H shares of the Bank or other circumstances, the Bank will make cumulative adjustment to the compulsory conversion
+price in turn.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into H shares. If Preference Shares were
+converted to H shares, they may not be converted to Preference Shares again.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to
+H shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+e.
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+230
+The EUR Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors and holders of convertible bonds, holders
+of subordinated debt, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will
+be senior to the ordinary shareholders of the Group.
+Order of distribution and liquidation method
+d.
+(i) Overseas preference shares
+(b) Main Clauses
+Financial Statements for the year ended 31 December 2019
+a.
+Dividend
+Fixed rate for 7 years for EUR after issuance.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Group shall distribute dividends for the Preference Shares in cash, based on the liquidation preference of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+b.
+Conditions to distribution of dividends
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The
+Group may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+C.
+Dividend stopper
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Dividends will be paid annually.
+(ii) Domestic preference shares
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividend
+232
+a.
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+g. Dividend setting mechanism
+Redemption
+f.
+Among them, the initial mandatory conversion price of domestic preference shares in 2015 was RMB3.44 and the initial
+mandatory conversion price of domestic preference shares in 2019 was RMB5.43. In case of stock dividends distribution of
+A Shares of the bank or other circumstances, the bank will make cumulative adjustment to the compulsory conversion price
+in turn.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were
+converted to A shares, they may not be converted to Preference Shares again.
+ICBC
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to
+A shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+e.
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors and holders of convertible bonds, holders of
+subordinated debt, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will be
+senior to the ordinary shareholders of the Group.
+Order of distribution and liquidation method
+d.
+After five years having elapsed since the date of issuance/the date of issue termination under the premise of obtaining the
+approval of the CBIRC and compliance with regulatory requirements, the Group has right to redeem all or some of domestic
+preference shares. The redemption period of preference shares ranges from the start date of redemption to the date of full
+redemption or conversion. Redemption price is equal to book value plus accrued dividend in current period.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividends will be paid annually.
+Annual Report 2019
+Fixed rate for a certain period (5 years) after issuance.
+231
+Notes to the Financial Statements
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+(In RMB millions, unless otherwise stated)
+b.
+Conditions to distribution of dividends
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+C.
+Dividend stopper
+Financial Statements for the year ended 31 December 2019
+156,685
+162,801
+187,651
+151,927
+1,037,861
+1,061,666
+1,157,478
+2,963,071
+42,918
+625,146
+3,229,512
+- Financing letters of guarantees
+405,155
+414,245
+104,146
+69,634
+2018
+263,038
+- Non-financing letters of guarantees
+31 December
+31 December
+2019
+- With an original maturity of one year or over
+Undrawn credit card limit
+With an original maturity of under one year
+Usance letters of credit and other commitments
+Loan commitments:
+Balances at end of the year:
+Sight letters of credit
+40,932
+311,300
+523,519
+Due from banks and other financial institutions
+2019
+13,974
+7,172
+Bank acceptances
+Guarantees issued:
+933
+1,003
+6,988
+5,902
+123,288
+221,015
+6,335
+4,972
+211
+3,124
+135,694
+101,724
+530,740
+2018
+2019
+31 December
+31 December
+Credit commitments
+Due to customers
+Derivative financial liabilities
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Debt securities purchased
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+2018
+Financial Statements for the year ended 31 December 2019
+Within 1 year
+As at 31 December 2018, the total future minimum lease payments under non-cancellable operating leases were payable as
+follows:
+Operating lease commitments - Lessee
+(b) Operating lease commitments
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+33,042
+31 December
+2018
+2019
+31,915
+31 December
+ICBC
+242
+Contracted
+At the end of the reporting period, the Group had capital commitments as follows:
+(a) Capital commitments
+45. COMMITMENTS AND CONTINGENT LIABILITIES
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+44. SHARE APPRECIATION RIGHTS PLAN
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid are recorded as a financial liability. As at 31 December 2019, the Group does
+not have carrying amount of transferred assets that did not qualify for derecognition and carrying amount of their associated
+liabilities (31 December 2018: Nil).
+The Group transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may
+acquire some asset-backed securities and fund shares at the subordinated tranche level and accordingly, may retain parts
+of the risks and rewards of the transferred credit assets. The Group would determine whether or not to derecognise the
+associated credit assets by evaluating the extent to which it retains the risks and rewards of the assets.
+Securitisation transactions
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+241
+2018
+Annual Report 2019
+45,780
+Over 1 year but within 5 years
+Over 5 years
+(In RMB millions, unless otherwise stated)
+31 December
+12,806
+Notes to the Financial Statements
+243
+Annual Report 2019
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+167,048
+202,761
+88,258
+94,249
+62,722
+87,494
+16,068
+21,018
+2018
+2019
+31 December
+31 December
+(c) Credit commitments
+Over one year but within five years
+Over five years
+Within one year
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+Lessor
+—
+Operating lease commitments
+The group is the lessee in respect of a number of properties, electronic equipments, transport equipments and other office
+equipments held under leases which were previously classified as operating leases under IAS 17. The group has initially
+applied IFRS 16 using the modified retrospective approach as at 1 January 2019, and recognised the present value of
+outstanding lease payments as lease liabilities (Refer to note 2). From 1 January 2019 onwards after the adoption of IFRS
+16, the present value of outstanding lease payments is recognised as lease liabilities in accordance with the requirement of
+IFRS 16 (Refer to note 2 and note 36 (i)).
+21,683
+2,331
+6,546
+Transactions during the year:
+Derivative financial assets
+18,548
+Interest income on debt securities purchased
+2018
+2019
+433
+2,102
+166
+0
+15,887
+12,397
+1,558
+1,279
+3,399
+128
+2,680
+4,995
+8,548
+2018
+31 December
+2019
+31 December
+Transactions during the year:
+Derivative financial liabilities
+Due to customers
+Due to banks and other financial institutions
+Loans and advances to customers
+Due from banks and other financial institutions
+135
+Interest income on amounts due from banks and other financial institutions
+368
+53
+248
+306,846
+ICBC
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+1
+0
+2018
+2019
+71
+33
+31 December
+2018
+2019
+31 December
+Interest expense on amounts due to customers
+Transactions during the year:
+Due to customers
+Balances at end of the year:
+(d) Joint ventures and affiliates
+The major transactions between the Group and the associates and their affiliates comprised due from banks and
+other financial institutions, loans and advances to customers and due to banks and other financial institutions and the
+corresponding interest income and interest expense. In the opinion of management, the transactions between the Group
+and the associates and their affiliates were conducted under normal commercial terms and conditions.
+1
+0
+323
+254
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+120
+97
+Interest income on loans and advances to customers
+Debt securities purchased
+Balances at end of the year:
+(c) Associates and affiliates
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+428,902
+27,638
+31,174
+402,276
+31 December
+2018
+2019
+31 December
+Credit commitments
+Reverse repurchase agreements
+Derivative financial liabilities
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Financial investments
+Balances at end of the year:
+(b) Subsidiaries
+12
+10
+1,517
+1,562
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+26
+44
+538
+234
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+19,866
+30,150
+1,810
+Interest income on debt securities purchased
+49,532
+167,454
+Notes to the Financial Statements
+247
+Annual Report 2019
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+2,432
+3,089
+2,643
+1,807
+Interest expense on amounts due to banks and other financial institutions
+Fee and commission income
+1,033
+520
+Interest income on loans and advances to customers
+1,802
+884
+Interest income on amounts due from banks and other financial institutions
+155
+151
+Interest income on financial investments
+Transactions during the year:
+2018
+2019
+151,512
+113,755
+4,479
+985
+3,293
+7,872
+420,539
+2,059
+29,766
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the statement of financial position
+in accordance with the Group's continuing involvement and the rest is derecognised. The extent of the Group's continuing
+involvement is the extent of the risks and rewards undertaken by the Group with value changes of the transferred financial
+assets. The amount at the time of transfer of the original credit assets, which the Group determined that it has continuing
+involvement through acquiring some tranches, was RMB384,156 million as at 31 December 2019 (the amount at the time
+of transfer of the original credit assets was RMB256,346 million as at 31 December 2018) and the carrying amount of assets
+that the Group continues to recognise on the statement of financial position was RMB52,016 million as at 31 December
+2019 (31 December 2018: RMB37,239 million).
+273,685
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group. Details
+of major transactions during the year conducted with these banks and financial institutions are as follows:
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+41. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+products issued by these structured entities. Such structured entities include investment funds, asset management plans,
+trust plans and asset-backed securities and the Group does not consolidate these structured entities. The nature and purpose
+of these structured entities are to generate fees from managing assets on behalf of investors and are financed through the
+issue of investment products to investors.
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+Investment funds
+Asset management plans
+Trust plans
+Asset-backed securities
+31 December 2019
+Carrying
+Maximum
+31 December 2018
+Carrying
+Maximum
+amount
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+exposure
+Notes to the Financial Statements
+246
+27,007
+1,998
+11,499
+2019
+2018
+Transactions during the year:
+Interest income on debt securities purchased
+1,949
+1,211
+Interest income on loans and advances to customers
+717
+1,207
+Interest expense on amounts due to customers
+240
+192
+ICBC
+amount
+exposure
+27,225
+The following table sets out an analysis of the line items in the consolidated statement of financial position in which assets
+were recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+Investment funds
+Asset management plans
+Trust plans
+Asset-backed securities
+Financial
+investments
+measured at
+31 December 2019
+Financial
+investments
+measured at
+FVTPL
+FVOCI
+Financial
+investments
+measured at
+amortised cost
+27,225
+405,680
+17,032
+26,226
+18,330
+68,233
+The maximum exposures to loss in the above investment funds, asset management plans, trust plans and asset-backed
+securities are the amortised cost or fair value of the assets held by the Group at the reporting date.
+468,132
+468,132
+611,980
+27,225
+23,191
+23,191
+422,712
+422,712
+324,773
+324,773
+22,022
+44,556
+39,966
+39,966
+117,487
+117,487
+80,202
+80,202
+611,980
+44,556
+39,563
+57,436
+2018
+46. DESIGNATED FUNDS AND LOANS
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Designated funds
+Designated loans
+31 December
+31 December
+2019
+2018
+1,916,638
+1,916,362
+920,829
+920,476
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+ICBC
+244
+As at 31 December 2019, the unexpired securities underwriting obligations of the Group amounted to RMB1,000 million
+(31 December 2018: RMB100 million).
+(f) Underwriting obligations
+Notes to the Financial Statements
+31 December
+31 December
+(i)
+Credit risk-weighted assets of credit commitments(i)
+2019
+1,306,831
+47. ASSETS PLEDGED AS SECURITY
+2018
+Internal ratings-based approach was adopted to calculate the credit risk-weighted assets according to the scope approved by
+the former China Banking Regulatory Commission (the "former CBRC"), and others were calculated by weighted approach.
+(d) Legal proceedings
+As at 31 December 2019, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB4,233 million (31 December 2018: RMB4,154 million).
+In the opinion of management, the Group has made adequate allowance for any probable losses based on the current facts
+and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the financial position or
+operations of the Group.
+(e) Redemption commitments of government bonds
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2019, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB89,644 million (31 December 2018: RMB85,845 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+1,402,715
+20,844
+Financial assets of the Group including securities, bills and loans have been pledged as collateral for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2019, the carrying value of the
+financial assets of the Group pledged as collateral amounted to approximately RMB227,938 million (31 December 2018:
+RMB490,913 million).
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+As at 31 December 2019, the Group holds a series of long-term bonds issued by Huarong, which is under the control of the
+MOF, with an aggregate amount of RMB90,309 million (31 December 2018: RMB90,309 million). The details of the Huarong
+bonds are included in note 24.
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 49(g) "transactions with state-owned entities in the PRC".
+(ii) Huijin
+As at 31 December 2019, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71% (31 December
+2018: approximately 34.71%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in major state-owned financial enterprises, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not conduct any other business or commercial activity. It does not intervene in the day-to-day business
+operations of the firms in which it invests.
+As at 31 December 2019, the Huijin Bonds held by the Group are of an aggregate face value of RMB56.23 billion
+(31 December 2018: RMB38.77 billion), with terms ranging from 1 to 30 years and coupon rates ranging from 2.85%
+to 5.15% per annum. The Huijin Bonds are government-backed, short-term financing bills and medium-term notes. The
+Group's subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance with relevant
+regulatory requirements and the corporate governance of the Group.
+316,902
+Balances at end of the year:
+Debt securities purchased
+Loans and advances to customers
+Due to customers
+31 December
+2019
+31 December
+245
+Annual Report 2019
+37,795
+38,808
+49. RELATED PARTY DISCLOSURES
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+(a) Shareholders with significant influence
+(i)
+The MOF
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2019, the MOF directly owned approximately 31.14% (31 December
+2018: approximately 34.60%) of the issued share capital of the Bank. In 2019, the MOF has transferred 10% of the shares,
+which is 12,331,645,186 A shares it holds in the Bank one-off to the National Council for Social Security Fund as the holder.
+The Group enters into banking transactions with the MOF in its normal course of business, details of the major transactions
+are as follows:
+Balances at end of the year:
+48. FIDUCIARY ACTIVITIES
+The PRC government bonds and the special government bond
+Interest income on the PRC government bonds
+31 December
+2019
+31 December
+2018
+1,215,664
+1,097,055
+2019
+2018
+Transactions during the year:
+28,410
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the major transactions are as follows:
+5,917
+20,844
+63,772
+Annual Report 2019
+239
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+527,364
+Investment funds
+Trust plans
+Asset-backed securities
+Financial
+investments
+Financial
+investments
+31 December 2018
+Financial
+investments
+Asset management plans
+measured at
+238,286
+224,374
+Repurchase transactions and securities lending transactions
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+43. TRANSFERRED FINANCIAL ASSETS
+1,509,523
+1,450,413
+686,237
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+606,972
+Reverse repurchase agreements with original maturity of
+290,067
+230,140
+maturity of three months or less
+Placements with banks and other financial institutions with original
+224,886
+three months or less
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities sold under repurchase agreements in the absence of
+default by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase
+or decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral in
+certain circumstance. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+FVTPL
+measured at
+amortised cost
+During the year of 2019, the amount of income received from such category of investment funds was RMBO.72 million.
+(2018: RMBO.19 million).
+240
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+42. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+Analysis of balances of cash and cash equivalents
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2019 but matured
+before 31 December 2019 was RMB3,000 million (The aggregated amount of the investment funds sponsored and issued by
+the Group after 1 January 2018 but matured before 31 December 2018 was RMB66 million).
+Note
+31 December
+2018
+Cash on hand
+19
+66,035
+70,047
+31 December
+2019
+measured at
+FVOCI
+During the year of 2019, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB1,610 million (2018: RMB1,387 million).
+(c) Unconsolidated structured entities sponsored by the Group during the year in which
+the Group does not have an interest at 31 December 2019
+23,191
+306,981
+17,792
+28,197
+11,769
+60,284
+418,653
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2019 but matured before 31 December 2019 was RMB404,793 million (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2018 but matured
+before 31 December 2018 was RMB708,588 million).
+5,917
+322,892
+43,562
+(b) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2019, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+As at 31 December 2019, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,642,057 million (31 December 2018:
+RMB2,575,857 million) and RMB1,332,184 million (31 December 2018: RMB1,308,500 million) respectively.
+During the year of 2019, the amount of the average exposure of financing transactions through placements and reverse
+repurchase agreements from the Group with non-principal guaranteed wealth management products sponsored by the
+Group was RMB49,142 million (2018: RMB73,105 million). The transactions were conducted in the ordinary course of
+business under normal terms and conditions and at market rates.
+14,001
+Balances with central banks other than restricted deposits
+The following table analyses the carrying amount of the above mentioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+transferred
+31 December 2019
+Carrying
+amount of
+286,527
+Securities lending agreements
+45,780
+33,161
+29,766
+30,375
+Repurchase agreements
+19
+associated
+Carrying
+amount of
+assets
+31 December 2018
+Carrying
+amount of
+transferred
+liabilities
+assets
+liabilities
+Carrying
+amount of
+associated
+235
+Share of profits of associates and joint ventures
+2,520
+Profit before taxation
+70,099
+82,336
+61,250
+31,848
+42,270
+40,073
+2,743
+61,250
+42,270
+70,099
+58,635
+82,336
+40,073
+Operating profit
+(178,957)
+(9,292)
+(14,150)
+(21,127)
+(22,546)
+(40,049)
+58,635
+2,743
+389,269
+55
+215
+234
+808
+Amortisation
+19,069
+1,563
+1,312
+3,404
+3,002
+3,110
+2,108
+2,719
+1,851
+Depreciation
+Other segment information:
+313,361
+Profit for the year
+(78,428)
+391,789
+15
+2,520
+-
+15
+34,368
+Income tax expense
+Mainland China (HO and domestic branches)
+279
+62,536
+Unallocated assets
+83,230
+25,588
+2,093
+12,370
+8,488
+7,352
+5,975
+8,114
+13,250
+Other non-current assets (i)
+286,561
+159,434
+9,413
+23,009
+18,306
+20,252
+12,015
+Total assets
+32,168
+30,109,436
+8,135,659
+655,424
+464,593
+767,677
+1,266,960
+Credit commitments
+Other segment information:
+27,417,433
+Total liabilities
+98,064
+Unallocated liabilities
+27,319,369
+(7,330,853)
+724,638
+1,207,528
+3,675,924
+2,996,409
+7,051,203
+4,164,747
+6,694,114
+Liabilities by geographical areas
+(15,821)
+11,964
+32,490
+Assets by geographical areas
+Mainland China (HO and domestic branches)
+31 December 2019
+Including net trading income, net (loss)/gain on financial investments and other operating income (net).
+(i)
+54,739
+29,924
+1,255
+4,309
+3,374
+5,103
+3,092
+3,898
+3,784
+Capital expenditure
+2,421
+254
+87
+309
+Head Office
+10,687,512
+Property and equipment
+Yangtze
+River Delta
+Bohai
+32,490
+joint ventures
+Including: Investments in associates and
+30,046,900
+Total
+Eliminations
+(7,330,839)
+others
+3,971,298
+1,140,631
+China
+China
+3,841,497
+2,973,119
+4,256,707
+4,126,087
+6,380,888
+Overseas and
+Northeastern
+Western
+Central
+China
+Rim
+Pearl
+River Delta
+(15,572)
+Net fee and commission income
+Impairment losses on assets
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(b) Geographical information
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane,
+Lima, Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh, Istanbul, Prague, Zurich, Manila and
+Vienna, etc.).
+The distribution of the geographical areas is as follows:
+Mainland China (Head Office and domestic branches):
+Notes to the Financial Statements
+Head Office ("HO"):
+Pearl River Delta:
+Bohai Rim:
+Central China:
+Western China:
+Northeastern China:
+Overseas and others:
+the HO business division (including institutions directly managed by the HO and their offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+Yangtze River Delta:
+including Guangdong, Shenzhen, Fujian and Xiamen;
+253
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+4,241
+15,863
+47,846
+3,179,501
+218,575
+25,354,657
+Annual Report 2019
+Other segment information:
+2,222,156
+1,007,356
+3,229,512
+(i)
+Including net trading income, net gain on financial investments and other operating income (net).
+(ii)
+Credit commitments
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+China
+China
+China
+Rim
+River Delta
+River Delta
+others
+Head Office
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Overseas and
+Eliminations
+Total
+External net interest income
+including Liaoning, Heilongjiang, Jilin and Dalian.
+branches located outside Mainland China, domestic and overseas subsidiaries, and investments in
+associates and joint ventures.
+254
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+606,926
+36,231
+16,336
+85,531
+64,071
+24,537
+63,493
+63,970
+252,757
+290,404
+45,577
+42,370
+95,256
+6,982
+9,664,481
+128,672
+101,021
+Operating income
+13,476
+1,563
+15,768
+100,667
+(495)
+(1,910)
+(3,823)
+(576)
+(3,891)
+9,448
+Other income/(expense), net (i)
+(2,608)
+143,891
+94,915
+115,747
+(207,776)
+111
+(20,829)
+(12,323)
+(35,985)
+(30,099)
+(33,743)
+(23,596)
+(30,764)
+(20,548)
+Operating expenses
+776,002
+(96)
+61,969
+29,216
+155,600
+(40,400)
+(1,659)
+4,019
+9,706,611
+5,711,799
+12,095,016
+186,114
+27,699,540
+Including: Investments in associates and joint ventures
+Segment assets
+29,124
+Property and equipment
+107,201
+Other non-current assets (ii)
+20,760
+Segment liabilities
+12,292,100
+29,124
+31 December 2018
+252,299
+Internal net interest (expense)/income
+18,978
+14,705
+20,452
+23,040
+31,455
+33,437
+Year ended 31 December 2019
+(1,203)
+9,356
+13,846
+18,049
+102,725
+14,710
+37,138
+(194,621)
+11,173
+464,788
+Total liabilities
+725,581 (1,756,524)
+166,205
+9,650
+22,807
+18,359
+18,605
+11,332
+290,404
+31,408
+Property and equipment
+29,124
+29,124
+joint ventures
+Including: Investments in associates and
+27,641,165
+12,038
+Total
+Other non-current assets (i)
+5,839
+6,166,615
+7,532,137
+Liabilities by geographical areas
+27,699,540
+Total assets
+58,375
+11,606
+Unallocated assets
+4,237
+1,581
+10,449
+6,750
+3,926
+3,458
+47,846
+Eliminations
+(6,914,407)
+3,695,699
+1,120,364
+31 December 2018
+(i)
+Including net trading income, net gain on financial investments and other operating income (net).
+(i)
+72,555
+54,976
+Mainland China (HO and domestic branches)
+975
+2,410
+3,838
+1,767
+3,133
+2,655
+Capital expenditure
+2,801
+Head Office
+Yangtze
+River Delta
+Pearl
+River Delta
+3,530,531
+2,758,294
+4,085,516
+3,700,969
+5,860,977
+9,803,222
+and others
+China
+China
+Overseas
+Northeastern
+Western
+Central
+China
+Rim
+Bohai
+3,719,458
+6,639,630 2,733,284
+3,378,285
+1,134,009
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral;
+(iii)
+(ii)
+The principal or interest of loan is past due more than 90 days to the Group;
+(i)
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria at the timing of
+recognition:
+The corporate borrower has the above matters in other financial institutions refers to (i), (ii)
+Definition of default
+Significant increase in credit risk
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+257
+Annual Report 2019
+The assessment of significant increase since initial recognition in the credit risk is performed at least on a quarterly basis for
+financial instruments held by the Group. The Group takes into consideration all reasonable and supportable information
+(including forward-looking information) that reflects significantly change in credit risk for the purposes of classifying financial
+instruments. The main considerations are regulatory and operating environment, internal and external credit risk gradings,
+debt-servicing capacity, operating capabilities, contractual terms, and repayment records. The Group compares the risk of
+default of a single financial instrument or a portfolio of financial instruments with similar credit risk characteristics as at the
+end of the reporting period and its risk of default at the date of initial application to determine changes in the risk of default
+during the lifetime of a financial instrument or a portfolio of financial instruments. In determining whether credit risk of a
+financial instrument has increased significantly since initial recognition, the Group considers factors indicating whether the
+probability of default has risen sharply, whether the financial instrument has been past due for more than 30 days, whether
+the market price has been falling to assess deterioration.
+The Group defines a retail business borrower as in default when single credit assets of borrowers meets one or more of the
+following criteria:
+(i) The principal or interest of loan is past due more than 90 days to the Group;
+(ii)
+ICBC
+258
+Expected credit losses ("ECL") for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL
+depending on whether a significant increase in credit risk on that financial instrument has occurred since initial recognition
+or whether an asset is considered to be credit-impaired. The loss allowance for loans and advances to customers, other than
+those corporate loans and advance to customers which are credit-impaired, is measured using the risk parameters method.
+The key parameters include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"),
+considering the time value of money. Related definitions are as follows:
+Description of parameters, assumptions, and estimation techniques
+Due to serious financial difficulties, the financial asset cannot continue to be traded in an active market;
+There are other objective evidences that the financial asset is impaired.
+The borrower is probable to be insolvent or carry out other financial restructurings;
+In light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+•
+•
+It has been overdue for more than 90 days;
+•
+Generally, a financial asset is considered to be credit-impaired if:
+Impairment assessment
+(iii) The Group considers the borrower is unlikely to pay its credit obligations to the Group in full.
+Write-offs;
+The Group classifies financial instruments into three risk stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+Refer to Note 3(6) Impairment of the financial assets for the definition of the three stages.
+2,339
+Stage of financial instruments
+The Group is also exposed to credit risk in other areas in addition to the credit risk arising from the Group's loans, due
+from banks and other financial institutions and financial investments. The credit risk arising from derivative financial
+instruments is limited to derivative financial assets recorded in the statement of financial position. In addition, the Group
+provides guarantees for customers and may therefore be required to make payments on their behalf. These payments will be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk similar
+to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+231,154
+544,264
+372,549
+652,201
+1,140,804
+Credit commitments
+412,271
+Other segment information:
+72,555
+85,959
+Unallocated liabilities
+25,268,698
+(6,914,407)
+879,687
+25,354,657
+82,387
+720,824
+(926,942)
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also give
+rise to credit risk. The Group's credit risk is mainly attributable to its loans, due from banks and other financial institutions
+and financial investments.
+Definition and scope
+(a) Credit risk
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to risk management departments of both the Head Office and the
+management of the relevant branches.
+The Group has also assigned departments to monitor financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The board of directors (the "Board") has the ultimate responsibility for the risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+A description and an analysis of the major risks faced by the Group are as follows:
+51. FINANCIAL INSTRUMENT RISK MANAGEMENT
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+256
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+3,229,512
+Credit risk assessment method
+122,273
+202
+335
+17,258
+23,785
+27,704
+38,284
+3,907
+Net fee and commission income
+20,869
+(5,132)
+6,811
+11,846
+83,075
+11,824
+27,338
+(141,316)
+5,554
+Internal net interest (expense)/income
+4,644
+145,301
+126,151
+86,395
+Operating income
+7,302
+(288)
+15,028
+8,850
+(442)
+(148)
+(654)
+(495)
+(605)
+(5,114)
+Other (expense)/income, net (i)
+20
+572,518
+38,275
+18,202
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Mainland China (HO and domestic branches)
+Northeastern
+Year ended 31 December 2018
+Notes to the Financial Statements
+255
+Annual Report 2019
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-
+current assets.
+(i)
+2,963,071
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Overseas and
+Head Office
+River Delta
+80,818
+59,236
+30,593
+55,342
+61,134
+228,918
+External net interest income
+Total
+Eliminations
+others
+China
+China
+China
+Rim
+River Delta
+94,375
+136,799
+88,192
+108,518
+372,413
+33,239
+5,562
+54,409
+36,027
+75,483
+(73,690)
+52,131
+38,506
+3,089
+3,089
+Profit for the year
+Income tax expense
+Profit before taxation
+77,056
+298,723
+Other segment information:
+Depreciation
+280
+196
+198
+233
+809
+Amortisation
+13,407
+404
+1,113
+2,690
+2,352
+2,006
+1,231
+1,786
+1,825
+joint ventures
+86
+Share of profits of associates and
+30,150
+288
+(19,192)
+(11,960)
+(33,104)
+(28,482)
+(31,779)
+(194,203)
+(21,976)
+(18,802)
+Operating expenses
+725,121
+(288)
+57,021
+27,958
+(29,196)
+Impairment losses on assets
+(29,087)
+(19,899)
+5,562
+54,409
+36,027
+75,483
+52,131
+77,056
+38,506
+Operating profit
+(161,594)
+(7,679)
+(10,436)
+(21,005)
+(23,683)
+(29,537)
+(20,268)
+369,324
+3,032
+Assets by geographical areas
+26,969
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+Treasury operations
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers, etc.
+(a) Operating segments
+Others
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as
+"internal net interest income/expense". Net interest income and expense relating to third parties are referred to as "external
+net interest income/expense".
+Annual Report 2019
+251
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+50. SEGMENT INFORMATION
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+2019
+2018
+Balances
+Interest income
+60,893
+%
+5.87%
+Balances
+%
+60,816
+6.41%
+Interest expense
+2,066
+0.48%
+2,046
+0.54%
+250
+ICBC
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+0.43%
+Year ended 31 December 2019
+Personal
+2,727
+4,603
+13,476
+Operating income
+388,408
+286,569
+96,422
+(974)
+4,603
+Operating expenses
+(76,305)
+(109,170)
+(16,484)
+(5,817)
+(207,776)
+Impairment losses on assets
+776,002
+7,120
+Other income/(expense), net (i)
+155,600
+banking
+banking
+Treasury
+operations
+Others
+External net interest income
+284,211
+91,336
+231,379
+Total
+606,926
+Internal net interest income/(expense)
+8,114
+130,988
+(139,102)
+Net fee and commission income
+88,963
+65,219
+1,418
+Corporate
+(152,735)
+13,974
+7,172
+2018
+RMB'000
+2,513
+There were no other material transactions and balances with key management personnel on an individual basis during the
+year. The Group enters into banking transactions with key management personnel in the normal course of business.
+The aggregate balance of loans and credit card overdraft to the person which are considered as related parties according to
+the relevant rules of Shanghai Stock Exchange was RMB3.24 million as at 31 December 2019.
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+Annual Report 2019
+31 December
+249
+(In RMB millions, unless otherwise stated)
+(f) Annuity Fund
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund holds the market value of A shares
+of the Bank with an amount of RMB101.36 million as at 31 December 2019 (31 December 2018: RMB4.41 million), and
+holds bonds issued by the Bank of RMB20.28 million as at 31 December 2019 (31 December 2018: Nil).
+(g) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of
+business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and
+those state-owned entities are ultimately controlled or owned by the Government. The Group has also established pricing
+policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned
+entities.
+(h) Proportion of major related party transactions
+Financial Statements for the year ended 31 December 2019
+2,423
+2019
+RMB'000
+31 December
+12,083
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(e) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+The aggregate compensation for the year, other than those for the personnel disclosed in note 12 above, is as follows:
+Short-term employment benefits
+Post-employment benefits
+2019
+RMB'000
+2,169
+104
+2018
+RMB'000
+6,002
+262
+2,273
+6,264
+Note: The above remuneration before tax payable to key management personnel for 2018 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2018 Annual Report.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2019 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's 2019 financial statements. The total compensation packages will be
+further disclosed when determined by the relevant authorities.
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the Group.
+The transactions between the Group and the aforementioned parties for the year are as follows:
+Loans
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements. When
+calculating the proportion of related party transactions, transactions with the subsidiary are not involved.
+0.24%
+31 December 2019
+Balances
+31 December 2018
+Balances
+Due to banks and other financial institutions
+233,412
+10.30%
+139,175
+7.67%
+Derivative financial liabilities
+8,004
+11.06%
+9.40%
+10.09%
+Due to customers
+3,034
+0.01%
+12,669
+0.06%
+Credit commitments
+7,421
+7,893
+9.15%
+6,251
+%
+Financial investments
+1,803,840
+23.59%
+1,660,137
+24.58%
+Due from banks and other financial institutions
+106,719
+10.24%
+135,829
+14.11%
+Loans and advances to customers
+27,826
+0.17%
+30,620
+0.20%
+Derivative financial assets
+%
+(24,480)
+Notes to the Financial Statements
+5
+2,551
+1,606
+(2,143)
+5,288
+7,302
+Operating income
+353,859
+Other income/(expense), net (i)
+273,490
+5,288
+725,121
+Operating expenses
+(70,797)
+(98,280)
+(17,449)
+(7,677)
+92,484
+145,301
+648
+62,969
+Treasury
+banking
+banking
+operations
+Others
+Total
+External net interest income
+273,082
+86,143
+213,293
+572,518
+Internal net interest (expense)/income
+(3,458)
+122,772
+(119,314)
+Net fee and commission income
+81,684
+(194,203)
+Personal
+Impairment losses on assets
+(30,926)
+Profit for the year
+(73,690)
+Income tax expense
+372,413
+587
+75,828
+144,284
+Other segment information:
+151,714
+3,089
+3,089
+Share of profits of associates and joint ventures
+369,324
+(2,502)
+75,828
+144,284
+Profit before taxation
+Depreciation
+Amortisation
+298,723
+793
+(113)
+(161,594)
+151,714
+30,471
+(1,747)
+Capital expenditure
+2,339
+164
+432
+747
+996
+13,407
+538
+2,237
+5,011
+5,621
+(131,348)
+Corporate
+Operating profit/(loss)
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+152,919
+159,368
+Profit before taxation
+2,520
+2,520
+Share of profits of associates and joint ventures
+389,269
+78,191
+(1,209)
+152,919
+159,368
+Operating profit/(loss)
+(178,957)
+23,847
+20,693
+8,539
+78,191
+1,311
+391,789
+Capital expenditure
+146
+Year ended 31 December 2018
+2,421
+446
+803
+1,026
+19,069
+543
+2,946
+7,265
+8,315
+313,361
+Amortisation
+Depreciation
+Other segment information:
+Profit for the year
+(78,428)
+1,660
+54,739
+Income tax expense
+Segment assets
+Notes to the Financial Statements
+Segment liabilities
+12,854,095
+10,763,847
+3,540,594
+258,897
+27,417,433
+252
+83,230
+Credit commitments
+1,130,938
+2,963,071
+(i)
+Including net trading income, net (loss)/gain on financial investments and other operating income (net).
+(ii)
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-
+current assets.
+31 December 2019
+ICBC
+1,832,133
+17,329
+Other segment information:
+13,974
+6,496,604
+7,577
+13,176,154
+188,806
+30,109,436
+32,490
+10,247,872
+32,490
+Including: Investments in associates and joint ventures
+107,967
+93,771
+37,943
+46,880
+286,561
+44,350
+Property and equipment
+Other non-current assets (ii)
+AAA
+Unrated
+Debt securities (analysed by type
+176,585
+53,826
+31 December 2018
+AA
+3,841,467
+157,871 6,862,850
+A
+2,557,514
+2,289
+Total
+of issuers):
+Governments and central banks
+1,479,735
+Policy banks
+758,698
+5,217
+15,840
+11,894
+965
+Below A
+2,633,101
+22,650
+313
+58,862
+962,078
+133,184
+15,396
+886
+13,211
+633,828
+213
+2,617
+15,551
+4,789,276
+652,522
+Banks and other
+financial institutions
+281,128
+365,377
+18,672
+84,343
+76,046
+825,566
+Corporate entities
+104,386
+342,866
+25,892
+63,480
+595,486
+4,073,702
+774,732
+(In RMB millions, unless otherwise stated)
+financial institutions
+452,439
+15,682,629
+to customers
+Loans and advances
+(94)
+(94)
+685,623
+239,564
+685,623
+Reverse repurchase
+(1,245)
+(26)
+(1,219)
+1,043,613
+18,748
+1,024,865
+agreements
+16,374,632
+(78,494)
+(184,688) (478,498)
+(8,043)
+(53,134)
+6,400,416
+38,842
+25,899
+6,335,675
+Personal loans
+(381,960)
+(149,328)
+(70,451)
+(162,181)
+9,970,010
+200,722
+426,540
+9,342,748
+loans and advances
+Including: Corporate
+institutions
+and other financial
+Due from banks
+3,317,916
+111,495 6,049,076
+156,862
+32,940
+3,223,493
+2,524,286
+506,892
+36,579
+56,597
+9,153
+351,062
+693,750
+58,634
+72,531
+17,605
+312,628
+232,352
+53,501
+Corporate entities
+Annual Report 2019
+Banks and other
+265
+Financial Statements for the year ended 31 December 2019
+3,317,916
+with central banks
+Cash and balances
+Total
+Stage 3
+Stage 2
+Stage 1
+Total
+Stage 3
+Provision for expected credit losses
+Book value
+Stage 2
+Stage 1
+31 December 2019
+at amortised cost
+Financial assets measured
+The Group's credit risk stages of financial instruments are as follows:
+(iii) Analysis on the credit quality of financial instruments
+Notes to the Financial Statements
+(215,316)
+250,474
+87,534
+(***)
+Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+268
+ICBC
+6,645
+3,133,011
+1,613,759
+Governments and central banks
+Policy banks
+of issuers):
+Debt securities (analysed by type
+Total
+Below A
+A
+31 December 2019
+AA
+AAA
+Unrated
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies where the issuers of debt securities are located. The carrying
+amounts of debt securities investments (excluding accrued interest) analysed by rating as at the end of the reporting period
+are as follows:
+Includes repurchase agreements.
+By rating distribution
+(**)
+(*)
+742,875
+Others
+Total liabilities
+Net liquidity gap
+109,527
+14,256,342
+(13,148,663)
+148,125
+1,664,779
+372,311
+58,588
+2,047,681
+(701,406)
+214,862
+5,443,216 3,551,188
+(715,546) 3,498,846 10,069,296
+60,474
+31,614
+623,190
+454,227
+27,417,433
+3,317,165
+2,692,003
+Includes reverse repurchase agreements.
+349,560
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+ICBC
+3,617,465
+413,941
+42,296
+Governments and central banks
+Total
+amortised cost
+FVOCI
+FVTPL
+measured at
+measured at
+measured at
+Financial
+investments
+31 December 2018
+Financial
+investments
+Financial
+investments
+6,862,850
+5,103,322
+1,401,271
+4,073,702
+Notes to the Financial Statements
+Policy banks
+223,877
+264
+6,049,076
+4,428,000
+1,377,327
+243,749
+506,892
+44,326
+436,824
+25,742
+Corporate entities
+693,750
+264,645
+302,685
+126,420
+Banks and other financial institutions
+774,732
+501,564
+49,291
+276,082
+77,835
+24,999
+78,408
+41,887
+21,220
+27,945
+31,242
+74,119
+542,935
+Total assets
+1,107,679
+2,037,090
+1,346,275
+4,727,670
+7,050,034
+10,523,523
+3,317,165
+30,109,436
+Liabilities:
+268,114
+Due to central banks
+Others
+286,561
+242,037
+759,038
+289,932
+55,263
+1,476,872
+amortised cost
+66,799
+139,014
+708,768
+2,466,714
+1,824,696
+2,176
+5,208,167
+Investments in associates and joint ventures
+32,490
+32,490
+Property and equipment
+286,561
+141
+876
+1,017
+38,629
+2,529,846
+Certificates of deposit
+Due to customers
+12,461,763
+78,222
+1,063,032
+158,141
+110,912
+8,153
+355,428
+1,581,922
+4,725,038
+3,121,105
+24,795
+22,977,655
+Debt securities issued
+14,399
+46,856
+(35,360) (96,537)
+215,289
+354,801
+Financial liabilities designated as at FVTPL
+60,486
+760
+2,054
+21,629
+14,812
+2,501
+102,242
+43,068
+Derivative financial liabilities
+5,440
+6,547
+42,466
+22,830
+7,128
+85,180
+Due to banks and other financial institutions (**)
+1,623,797
+769
+Discounted bills
+(25,266)
+4,206
+Financial investments
+(433)
+(248)
+(185)
+354,228
+248
+1
+353,979
+(13)
+(13)
+6,255
+6,255
+loans and advances
+Discounted bills
+Including: Corporate
+(446)
+1,398,443
+(248)
+1,801
+(1,622)
+53,160
+3,175,598
+Credit commitments
+(2,356)
+(444)
+(92)
+(1,820)
+1,760,727
+248
+1,802
+1,758,677
+Total
+(1,910)
+(196)
+(92)
+1,400,244
+754
+(0)
+360,483
+(173,568)
+(161,151) (82,508)
+235,267 24,618,201
+566,680
+23,816,254
+Total
+(958)
+(202)
+(226)
+(530)
+104,189
+329
+750
+103,110
+Precious metal leasing
+(417,227)
+(198)
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost, three-stage
+model is not applicable.
+31 December 2018
+248
+1
+360,234
+to customers
+Loans and advances
+FVOCI
+Total
+Stage 3
+Provision for expected credit losses
+Stage 2
+Stage 1
+Total
+Stage 3
+Stage 2
+Stage 1
+Carrying amount
+Financial assets measured at
+(2,483)
+3,229,512
+(5,342)
+6,878
+5,045
+498
+Derivative financial assets
+1,887,554
+842
+55,302
+493,006
+310,639
+846,498
+181,267
+Due from banks and other financial institutions (*)
+3,317,916
+2,676,415
+20,743
+28,784
+3,850
+20,962
+68,311
+421,926
+43,762
+10,955
+10,661
+- Financial investments measured at FVTPL
+-Financial investments measured at FVOCI
+-Financial investments measured at
+Financial investments
+16,326,552
+56,957
+8,190,112
+3,559,038
+2,791,186
+712,711
+985,299
+31,249
+Loans and advances to customers
+6,144
+(28,811)
+1,018
+Cash and balances with central banks
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+267
+Annual Report 2019
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+projecting cash flows and evaluating the level of current assets; and
+maintaining the stability of the deposit base;
+•
+optimising the structure of assets and liabilities;
+•
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Liquidity risk is the risk that funds will not be sufficient or will not be raised at a reasonable cost in a timely manner to meet
+the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+(b) Liquidity risk
+(34,715)
+(562)
+(In RMB millions, unless otherwise stated)
+615,890
+(i)
+The tables below summarise the maturity profile of the Group's assets and liabilities. The Group's expected the remaining
+maturity of its financial instruments may vary significantly from the following analysis. For example, demand deposits from
+customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+Assets:
+Total
+(***)
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+months
+one month
+on demand
+three
+Less than
+One to
+Overdue/
+repayable
+31 December 2019
+Maturity analysis of the assets and liabilities
+4,206
+(125)
+(1,504)
+417,668
+623
+417,045
+(21)
+(21)
+6,325
+6,325
+loans and advances
+Discounted bills
+Including: Corporate
+(232)
+(227)
+423,993
+623
+423,370
+to customers
+(206)
+Loans and advances
+(5)
+Financial investments
+(203)
+(80)
+(2,005)
+1,845,602
+623
+4,074
+1,840,905
+Total
+(2,056)
+(198)
+(80)
+(1,778)
+1,421,609
+4,074
+1,417,535
+(211)
+(2,288)
+FVOCI
+Provision for expected credit losses
+Stage 2
+Stage 3
+546
+1,485
+153,710
+26,071,347
+Total
+Precious metal leasing
+(3,721)
+(127)
+(1,339)
+(2,255)
+5,211,888
+166
+5,118
+5,206,604
+Financial investments
+(1)
+155,741
+Total
+(524)
+(272)
+Stage 1
+Total
+Stage 3
+Stage 2
+Stage 1
+Carrying amount
+31 December 2019
+Financial assets measured at
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost, three-stage
+model is not applicable.
+(484,687)
+(185,087)
+(80,192)
+(219,408)
+477,790 240,276 26,789,413
+(1,129)
+(333)
+(854)
+Credit commitments
+49,051
+527,291
+24,795
+5,585,639
+Personal loans
+8,714,321
+loans and advances
+Including: Corporate
+(412,731)
+(173,241)
+234,777 15,097,012 (158,084) (81,406)
+552,086
+14,310,149
+to customers
+Loans and advances
+(40)
+(40)
+194,637
+40,120
+559,295
+9,436,249
+5,650,554
+(109,399) (74,298)
+(48,670) (7,108)
+4,521,665
+161
+4,793
+4,516,711
+Financial investments
+(35)
+(20)
+(15)
+10,209
+20
+10,189
+Discounted bills
+(92,500)
+(36,722)
+(136,499) (320,196)
+358,257
+2,913,139
+559,295
+Reverse repurchase
+Stage 1
+Book value
+31 December 2018
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Cash and balances
+at amortised cost
+Financial assets measured
+ICBC
+266
+(28,534)
+(196)
+(3,072)
+2,963,071
+881
+Stage 2
+agreements
+Stage 3
+Stage 1
+(1,015)
+(22)
+(993)
+963,464
+9,051
+954,413
+institutions
+and other financial
+Due from banks
+3,372,576
+3,372,576
+with central banks
+Total
+Provision for expected credit losses
+Stage 3
+Stage 2
+Total
+44,017
+180,555
+77,198
+261
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(1) Loans and advances to customers
+By geographical distribution
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by geographical
+distribution is analysed as follows:
+Annual Report 2019
+Head Office
+Pearl River Delta
+Bohai Rim
+Central China
+Western China
+Northeastern China
+Overseas and others
+Yangtze River Delta
+Total
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+30,182,752
+1,400,244
+Financial investments measured at amortised cost
+5,208,167
+4,519,182
+Others
+181,028
+(ii) Risk concentrations
+166,363
+26,953,240
+Credit commitments
+Total maximum credit risk exposure
+2,963,071
+3,229,512
+32,146,145
+29,183,074
+1,421,609
+31 December 2019
+Amount
+2,524,307
+16.37%
+2,445,215
+14.60%
+2,202,221
+17.84%
+16.34%
+14.28%
+17.74%
+4.77%
+759,140
+4.92%
+9.22%
+1,578,574
+10.24%
+798,691
+1,546,077
+Percentage
+2,739,585
+2,072,857
+774,578
+3,124,793
+4.62%
+31 December 2018
+Amount
+723,302
+13.44%
+100
+4.69%
+18.64%
+2,823,603
+18.32%
+2,341,370
+13.97%
+Percentage
+750,957
+837,972
+15,046,132
+Write-off policy
+The Group writes off financial assets when it has exhausted practical recovery efforts and has concluded there is no
+reasonable expectation of recovery.
+Annual Report 2019
+259
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+The calculation of ECL incorporates forward-looking information. The Group has performed historical analysis and identified
+the key economic variables, including Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"), Purchasing Managers'
+Index ("PMI"), M2, Industrial Added Value and Real Estate Climate Index, impacting ECL for each portfolio. The impact of
+these economic variables on the PD and LGD has been determined by performing statistical regression analysis to understand
+the correlations among the historical changes of the economic variables, PD and LGD. Forecasts of these economic variables
+are provided quarterly by the Group at least and provide the best estimate view of the economy over the next year.
+When calculating the weighted average ECL, the optimism, neutral and pessimism scenarios and its weightings determined
+by a combination of macro-statistical analysis and expert judgment are taken into account by the Group.
+Contractual modification of financial assets
+Such rescheduling activities include extended payment term arrangements, payment holidays and payment forgiveness.
+Rescheduling policies and practices are based on indicators or criteria which, in the judgment of management, indicate that
+payment will most likely continue. These policies are kept under continuous review. This is only the case for assets which
+have performed in accordance with the new terms for six consecutive months or more.
+The following table includes carrying amount of rescheduled loans and advance to customers:
+Rescheduled loans and advances to customers
+Impaired loans and advances to customers included in above
+31 December
+2019
+7,319
+The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed
+loans, with a view to maximising recovery.
+31 December
+2018
+Forward-looking information contained in ECL
+The timing of the expected cash flows.
+(In RMB millions, unless otherwise stated)
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the Internal Rating-Based Approach under the New Basel
+Capital Accord, taking the forward-looking information into account and deducting the prudential adjustment to reflect the
+debtor's point-in-time (PIT) PD under the current macroeconomic environment;
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. The LGD is depending
+on the type of counterparty, the method and priority of the recourse, and the type of collaterals, with taking the forward-
+looking information into account;
+EAD refers to the total amount of on-and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+There have been no significant changes in estimation techniques or significant assumptions made during the year.
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+The impairment loss on credit-impaired corporate loans and advance to customers applied cash flow discount method, if
+there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the loss is measured as
+the difference between the asset's gross carrying amount and the present value of estimated future cash flows discounted
+at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying amount. The
+impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual basis, the
+following factors are considered:
+•
+The borrower's ability to improve performance once a financial difficulty has arisen;
+The estimated recoverable cash flows from projects and liquidation;
+•
+The availability of other financial support and the realisable value of collateral; and
+•
+• The sustainability of the borrower's business plan;
+2,983
+3,112
+Collaterals and other credit enhancements
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+- Financial investments measured at FVTPL
+Financial investments measured at FVOCI
+3,251,881
+Due from banks and other financial institutions
+3,302,529
+962,449
+68,311
+71,335
+845,186
+734,049
+16,326,552
+1,042,368
+Balances with central banks
+2018
+2019
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2019, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB10,377,695 million (31 December 2018:
+RMB9,783,331 million), of which credit exposure covered by collateral amounted to RMB3,583,296 million (31 December
+2018: RMB3,208,571 million).
+Retail loans are mainly collateralised by residential properties. As at 31 December 2019, the gross carrying amount of retail
+loans amounted to RMB6,383,624 million (31 December 2018: RMB5,636,574 million), of which credit exposure covered by
+collateral amounted to RMB5,565,771 million (31 December 2018: RMB4,913,432 million).
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+During the reporting period, the Group took possession of collateral held as security with a carrying amount of
+RMB599 million (31 December 2018: RMB1,774 million).
+260
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(i) Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+As at the end of the reporting period, the maximum credit risk exposure of the Group without taking account of any
+collateral and other credit enhancements is set out below:
+31 December
+31 December
+16,761,319
+Financial Statements for the year ended 31 December 2019
+100.00%
+100.00%
+1 year
+3 years
+3 years
+Total
+Unsecured loans
+27,232
+90 days
+21,684
+5,474
+72,221
+Guaranteed loans
+17,046
+25,698
+21,799
+17,831
+9,876
+Overdue
+for over
+90 days to
+4,950,419
+2,078,921
+2,157,264
+7,884,774
+7,056,026
+1,427,911
+31 December 2019
+Overdue
+for 1 to
+1,256,196
+15,419,905
+Overdue loans and advances to customers
+The composition of the Group's gross overdue loans and advances to customers (excluding accrued interest) by collaterals is
+analysed as follows:
+Overdue
+Overdue for
+for 1 to
+16,761,319
+5,369,713
+74,419
+35,613
+for 1 to
+Overdue for
+90 days to
+Overdue
+for 1 to
+Overdue
+for over
+90 days
+1 year
+Overdue
+3 years
+Total
+Unsecured loans
+31,229
+30,227
+10,507
+474,271
+3 years
+Loans secured by mortgages
+31 December 2018
+28,659
+36,689
+25,003
+11,186
+108,491
+Pledged loans
+3,193
+268,216
+5,554
+2,123
+13,085
+Total
+83,084
+89,625
+66,848
+2,215
+31 December
+2018
+31 December
+2019
+Total
+Water, environment and public utility management
+926,499
+786,803
+Real estate
+908,254
+850,038
+1,004,744
+Wholesale and retail
+626,059
+Finance
+300,159
+295,271
+Construction
+284,949
+537,326
+265,149
+1,021,366
+1,145,342
+2,991,010
+2,735,901
+By industry distribution
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by industry is analysed as
+follows:
+31 December
+2019
+31 December
+2018
+Production and supply of electricity, heating, gas and water
+Transportation, storage and postal services
+2,070,542
+Manufacturing
+1,655,775
+1,569,387
+Leasing and commercial services
+1,252,193
+2,304,923
+Mining
+211,241
+234,976
+421,874
+364,437
+Total for loans and advances to customers
+16,761,319
+15,419,905
+262
+Discounted bills
+ICBC
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+By collaterals
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by collaterals is analysed
+as follows:
+Unsecured loans
+Guaranteed loans
+Loans secured by mortgages
+Pledged loans
+Notes to the Financial Statements
+5,636,574
+6,383,624
+Subtotal for personal loans
+Science, education, culture and sanitation
+231,260
+196,046
+Others
+321,876
+374,537
+Subtotal for corporate loans
+9,955,821
+9,418,894
+Personal mortgage and business loans
+5,512,175
+4,805,944
+Others
+871,449
+830,630
+15,419,905
+Notes to the Financial Statements
+7,211
+825,566
+595,486
+263
+Annual Report 2019
+269,932
+31,923
+63,010
+83,846
+91,153
+Total
+12,734
+3,607
+4,724
+2,339
+2,064
+Pledged loans
+106,101
+12,608
+24,095
+30,074
+39,324
+Loans secured by mortgages
+75,928
+12,502
+23,684
+Notes to the Financial Statements
+21,206
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+By issuers distribution
+652,522
+412,239
+340,218
+41,444
+198,839
+179,106
+4,306,848
+421,919
+60,509
+1111
+Total
+Financial
+investments
+measured at
+amortised cost
+FVOCI
+measured at
+investments
+161,035
+Financial
+31 December 2019
+FVTPL
+measured at
+Financial
+investments
+Banks and other financial institutions
+Corporate entities
+Governments and central banks
+Policy banks
+The following tables present an analysis of debt securities (excluding accrued interest) by types of issuers and investments:
+(2) Debt securities investments
+18,536
+Guaranteed loans
+75,169
+3,206
+306,242
+4,789,276
+143,694
+47
+71
+24
+Currency risk
+Commodity risk
+Total portfolio VaR
+88
+84
+112
+54
+15
+40
+77
+6
+91
+108
+140
+64
+Interest rate risk
+Currency risk
+Commodity risk
+35
+Interest rate risk
+Lowest
+Highest
+236,602
+614,062
+873,022
+194,676
+3,229,512
+(c) Market risk
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between
+the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk in the
+banking book is disclosed in note 51(d).
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+The Group considers the market risk arising from stock prices fluctuations in respect of its investment portfolios as
+immaterial.
+1,167,456
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major market
+risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Value-at-risk ("VaR") analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the
+parent company and a sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both
+trading and non-trading portfolios).
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(i) VaR
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+2019
+31 December 2019
+Total
+More than
+five years
+272
+Average
+Others
+ICBC
+277
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Currency
+RMB
+USD
+HKD
+Others
+Total
+31 December 2019
+Increased by 100 basis points
+Effect on
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+net interest income
+equity
+net interest income
+equity
+(6,951)
+(29,652)
+6,951
+Annual Report 2019
+32,313
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming
+year, including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates
+on other comprehensive income, calculated by revaluing fixed rate financial assets measured at FVOCI held at year end,
+including the effect of any associated hedges.
+revenue.
+135,933
+3,229,512
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+276
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(d) Interest rate risk in the banking book
+Interest rate risk in the banking book is defined as the risk of loss in the overall gain and economic value of the banking
+book arising from adverse movements in interest rate and term structure, etc. This risk may occur in the following situations:
+when the interest rate fluctuates, because the repricing period of different financial instruments is different, the debt interest
+rate repricing date is earlier than the asset interest rate when interest rate rising and vice versa. The bank will face to the risk
+of reduced or even negative spreads over certain period of time; when the pricing benchmark interest rates are different,
+the changes in the benchmark interest rates are inconsistent; when there are embedded option terms or implied options in
+the business of holding options derivatives or banking book's on- and off-balance sheet business; and due to changes in
+expected default levels or market liquidity, the market's assessment of the credit quality of financial instruments changes,
+leading to changes in credit spreads.
+The Group manages the interest rate risk of banking book through the Asset and the Liability Management Department,
+following methods have been adopted:
+.
+•
+•
+Interest rate prediction: analysing the macroeconomic factors that may impact on the PBOC benchmark interest rates
+and market interest rates;
+Duration management: optimising the differences in timing between contractual repricing (maturities) of interest-
+generating assets and interest-bearing liabilities;
+Pricing management: managing the deviation of the pricing of interest-generating assets and the benchmark interest
+rates or market interest rates;
+Quota management: optimising the positions of interest-generating assets and interest-bearing liabilities and control
+the impact on profit and loss and equity; and
+Derivative trading: using interest rate derivatives for hedging management in a timely manner.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held
+constant, of the Group's net interest income and equity. The data set out in the following tables includes trading book's
+data.
+(979)
+(6,416)
+979
+33,093
+USD
+HKD
+Others
+Total
+(1,645)
+(5,679)
+1,645
+5,683
+936
+(936)
+(59)
+(690)
+59
+691
+(4,049)
+(36,882)
+4,049
+39,467
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's current interest rate risk profile. This effect, however, does not incorporate actions that
+would be taken by management to mitigate the impact of interest rate risk. The projections above also assume that interest
+rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net interest income
+and equity in the case where some rates change while others remain unchanged.
+278
+3,281
+(30,513)
+(3,281)
+RMB
+6,420
+(3,630)
+(43)
+3,630
+43
+1,553
+(1,144)
+(1,553)
+1,147
+(10,007)
+Total portfolio VaR
+(37,255)
+39,923
+31 December 2018
+Increased by 100 basis points
+Effect on
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Currency
+net interest income
+equity
+net interest income
+equity
+10,007
+2018
+31 December 2018
+Average
+198,897
+542,935
+26,496,471
+2,250,806
+469,500
+892,659
+30,109,436
+Due to central banks
+141
+876
+5,550
+1,017
+Financial liabilities designated as at FVTPL
+20,845
+14,433
+22
+66,942
+102,242
+Derivative financial liabilities
+45,060
+23,546
+6,157
+65,563
+10,417
+103,146
+Liabilities:
+78,405
+1,476,872
+― Financial investments measured at amortised cost
+5,030,922
+102,767
+13,345
+61,133
+5,208,167
+Investments in associates and joint ventures
+2,981
+235,342
+930
+28,427
+32,490
+Property and equipment
+186,232
+97,883
+751
+1,695
+286,561
+Others
+Total assets
+152
+36,698
+85,180
+1,713,312
+135,978
+78,134
+499,355
+2,249,604
+Credit commitments
+2,692,003
+299,724
+18,278
+54,185
+2,319,816
+2,963,071
+Net position
+592,935
+451,222
+2,196,621
+24,176,655
+623,190
+3,414
+19,481
+110,278
+490,017
+Total liabilities
+27,417,433
+Due to banks and other financial institutions (**)
+(*)
+(**)
+658,857
+27,766
+129,911
+2,529,846
+Certificates of deposit
+28,202
+231,440
+16,247
+79,539
+355,428
+Includes reverse repurchase agreements.
+Due to customers
+837,901
+369,830
+260,769
+22,977,655
+Debt securities issued
+370,064
+320,025
+11,719
+41,067
+Includes repurchase agreements.
+21,509,155
+742,875
+320,611
+― Financial investments measured at FVOCI
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Annual Report 2019
+273
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(ii) Currency risk
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on and off the balance sheet on its monetary assets and liabilities and its forecasted cash flows. The analysis
+calculates the effect of a reasonably possible movement in the currency rates against RMB, with all other variables held
+constant, on profit before taxation and equity. A negative amount in the table reflects a potential net reduction in profit
+before taxation or equity, while a positive amount reflects a potential net increase. This effect, however, is based on the
+assumption that the Group's foreign exchange exposures as at the year end are kept unchanged and, therefore, have not
+incorporated actions that would be taken by the Group to mitigate the adverse impact of this currency risk.
+HKD
+Change in
+currency rate
+Effect on profit
+before taxation
+2019
+2018
+Effect on equity
+2019
+2018
+-1%
+-1%
+(146)
+44
+Currency
+USD
+(379)
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(2)
+Highest
+Lowest
+32
+28
+42
+15
+66
+64
+115
+43
+(3)
+7
+39
+7
+88
+74
+113
+52
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaR does not add up to the total portfolio.
+VaR.
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+(1)
+23
+1,041,158
+(332)
+366
+37,690
+72,944
+1,887,554
+Derivative financial assets
+30,693
+19,773
+7,341
+10,504
+68,311
+Loans and advances to customers
+562,308
+14,809,532
+351,007
+296,663
+16,326,552
+Financial investments
+- Financial investments measured at FVTPL
+909,353
+32,450
+6,076
+14,199
+962,078
+869,350
+260
+1,214,612
+3,317,916
+(1,492)
+(1,298)
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+274
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+A breakdown of the assets and liabilities analysed by currency is as follows:
+Assets:
+31 December 2019
+Due from banks and other financial institutions (*)
+USD
+RMB
+to RMB)
+HKD
+(equivalent
+to RMB)
+Others
+(equivalent
+to RMB)
+Total
+(equivalent
+to RMB)
+Cash and balances with central banks
+3,035,646
+141,588
+10,890
+129,792
+(equivalent
+551,927
+313,342
+Credit commitments
+52,646
+52,003
+2,558,002
+111,849
+10,886
+360,762
+5,012,827
+255,480
+3,704,857
+23,959,489
+98,866
+3,290
+7,539 31,018
+2,098,686 5,509,974 4,178,079
+362,680
+567,317
+1,073,629
+18,327
+428,832
+Annual Report 2019
+666,108
+104,401
+15,116
+on demand
+Less than
+one month
+One to
+three
+months
+31 December 2019
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+2,501
+Total
+876
+1,017
+60,547
+1,624,350
+12,463,090
+762
+356,090 217,433
+78,593 159,434
+1,066,170 1,686,585
+15,025 29,741
+360,741
+7,917
+14,508,728 1,524,557
+2,062
+23,413
+141
+28,486,132
+28
+(208)
+repayable
+Less than
+three
+Three
+months to
+on demand
+one month
+months
+One to
+one year
+More than
+five years
+Undated
+(***)
+Total
+Financial assets:
+Cash and balances with central banks
+564,172
+One to
+five years
+Overdue/
+31 December 2018
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+85
+(923)
+240
+(778)
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+Cash outflow
+49,846 619,031 400,059 2,696,186 1,616,510
+(52,452) (605,109) (401,263) (2,717,224) (1,612,491)
+(2,606) 13,922 (1,204) (21,038) 4,019
+34,653
+(34,825)
+5,416,285
+(5,423,364)
+(172)
+(7,079)
+(*)
+Includes repurchase agreements.
+270
+ICBC
+Non-derivative cash flows:
+Notes to the Financial Statements
+Overdue/
+repayable
+3,781
+Derivative cash flows:
+Debt securities issued
+Loans and advances to customers (**)
+34,735 1,060,503
+911,870
+502,881
+3,516,705
+59,472
+6,309,480 12,914,107
+1,691
+1,908,790
+314,046
+239,473
+Financial investments
+-Financial investments measured at FVTPL
+10,371
+10,634
+44,638
+- Financial investments measured at FVOCI
+-Financial investments measured at amortised cost
+Others
+43,294
+24,986,873
+67,422
+849,397
+Due from banks and other financial institutions (*)
+three
+months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+(***)
+Total
+181,303
+Non-derivative cash flows:
+Cash and balances with central banks
+615,890
+1,018
+7,463
+20,743
+2,676,415
+3,321,529
+Financial assets:
+369,736
+21,787
+145,481
+12,345
+15,614,659
+3,101,731
+39,373,175
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+(***)
+10,342,203
+terms.
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+Financial liabilities designated as at FVTPL
+Due to banks and other financial institutions (*)
+Certificates of deposit
+Due to customers
+Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+5,522,935
+2,054,055 1,525,557
+1,212,035
+399,486
+89,714 266,634
+810,717
+181,783
+202,154
+131,736
+980,802
+843,800
+349,679
+50,326
+1,643,447
+5,769
+2,941,781
+5,887
+2,146,968
+3,097
+6,115,466
+60
+684
+416,268
+Others
+7,303
+2,801,101 3,376,357
+Due from banks and other financial institutions (*)
+317,424
+490,724
+925,569
+15,164
+3,082,911
+6,453
+308,088
+574,257
+86,316
+2,418
+5,635,911
+25,733,045
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+(1,675)
+54
+65
+3
+1,270
+Derivative cash flows:
+(283)
+90,633
+2,374,654
+347,741
+21,685,879
+2,685,178
+Due to customers
+11,595,139
+Debt securities issued
+Others
+20,209
+270,385 11,949
+13,064,384 1,545,295 1,830,287
+484
+514,886 310,656
+60,697 127,262
+937,070 1,379,365 5,075,713
+10,896
+1,719
+389
+13,414
+5,674
+1,848
+321,458
+36,610
+61,249
+144,261
+14,952
+569
+13,173
+Cash outflow
+23,964 1,825,500 1,206,634 2,562,995
+(18,965) (1,786,499) (1,188,652)
+4,999 39,001
+17,982
+182,370 38,339
+(2,547,242) (161,666) (37,690)
+15,753 20,704
+649
+Credit commitments
+1,309,180
+114,410
+197,065
+469,933
+747,810
+124,673
+Total
+2,963,071
+31 December 2018
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+Credit commitments
+More than
+five years
+One to
+five years
+one year
+5,839,802
+(5,740,714)
+99,088
+(*)
+Includes repurchase agreements.
+Annual Report 2019
+271
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(iii) Analysis of credit commitments by contractual expiry date
+Management does not expect all of the commitments will be drawn before the expiry of the commitments.
+31 December 2019
+Repayable
+on demand
+Less than
+one month
+One to
+Three
+months to
+three months
+Certificates of deposit
+69,065
+1,129,795
+Due to banks and other financial institutions (*)
+Financial liabilities designated as at FVTPL
+152,175
+63,225
+848,615
+-Financial investments measured at FVOCI
+196
+52,536
+59,844
+417,216
+270,134
+321,176
+23,757
+1,601,635
+-Financial investments measured at
+amortised cost
+106
+40,020
+873,992
+118,910
+46,378
+44,867
+154,798
+902,607
+318,728
+342,153
+101,025
+1,820,021
+Loans and advances to customers (**)
+22,507
+988,987
+801,611
+3,301,244
+6,077,004 11,176,249
+238,194
+22,605,796
+Financial investments
+-Financial investments measured at FVTPL
+5,844
+136,471
+one month
+504,023
+1,681,478
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+One to
+five years
+31 December 2018
+More than
+five years
+Total
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+71
+410
+481
+Undated
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+terms.
+The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+5,266,440
+Others
+297,855
+19,034
+12,285
+5,497
+6,639
+688
+1,045,478
+2,048,051 1,379,098 4,549,264
+10,380,218
+13,332,476
+1,016
+3,127,293 35,861,878
+343,014
+(*)
+Includes reverse repurchase agreements.
+(**)
+2,904,342
+2,476,089
+on demand
+One to
+341,564
+882,110
+13,537,076
+Loans and advances to customers
+71,335
+8,410
+4,817
+285,382
+28,169
+Derivative financial assets
+1,696,498
+57,606
+26,561
+621,782
+990,549
+Due from banks and other financial institutions (*)
+29,939
+3,372,576
+15,046,132
+― Financial investments measured at FVTPL
+50,673
+24,594
+89,283
+4,354,632
+― Financial investments measured at amortised cost
+1,430,163
+59,771
+Financial investments
+4,011
+1,112,791
+-Financial investments measured at FVOCI
+805,347
+9,532
+2,641
+29,984
+763,190
+253,590
+85,044
+8,121
+121,780
+Less than
+three
+Three
+months to
+One to
+on demand
+one month
+months
+repayable
+one year
+More than
+five years
+Undated
+(***)
+Total
+Assets:
+Cash and balances with central banks
+564,172
+five years
+One to
+Overdue/
+31 December 2018
+3,157,631
+Cash and balances with central banks
+Assets:
+to RMB)
+Total
+(equivalent
+Others
+(equivalent
+to RMB)
+HKD
+(equivalent
+to RMB)
+to RMB)
+RMB
+(equivalent
+USD
+31 December 2018
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+275
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+4,519,182
+7,303
+Investments in associates and joint ventures
+1,687
+4,125
+301,010
+273,881
+Debt securities issued
+21,408,934
+212,825
+823,474
+38,826
+20,059,293
+341,354
+58,567
+13,115
+242,586
+27,086
+Certificates of deposit
+2,329,296
+Due to customers
+149,725
+617,842
+Total liabilities
+2,344,883
+169,020
+49,605
+109,292
+2,016,966
+Net position
+25,354,657
+Others
+550,857
+2,178,462
+22,255,520
+495,777
+18,406
+10,143
+91,201
+376,027
+369,818
+27,341
+677,109
+1,475,121
+438,779
+135,561
+6,360
+110,120
+186,738
+Liabilities:
+Total assets
+24,272,486
+Others
+1,288
+754
+149,249
+139,113
+Property and equipment
+29,124
+26,610
+290,404
+2,287,754
+419,423
+719,877
+Due to banks and other financial institutions (**)
+73,573
+7,701
+1,752
+31,708
+32,412
+Derivative financial liabilities
+87,400
+64,328
+11,374
+11,698
+Financial liabilities designated as at FVTPL
+481
+479
+2
+Due to central banks
+27,699,540
+827
+2,801,101
+3,372,576
+Due from banks and other financial institutions (*)
+Certificates of deposit
+60,071
+126,157
+140,227
+14,450
+449
+341,354
+2,329,296
+Due to customers
+919,716
+1,337,250
+4,978,718
+2,582,550
+12,058
+21,408,934
+Debt securities issued
+11,578,642
+19,689
+44,569
+310,489
+5,570
+11,334
+1,777
+87,400
+Derivative financial liabilities
+415
+14,081
+31,569
+15,570
+9,778
+5,635
+73,573
+Due to banks and other financial institutions (**)
+1,129,334
+510,830
+302,505
+28,094
+7,021
+65,335
+238,450
+2,344,883
+(*)
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+Annual Report 2019
+3,322,986
+269
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(ii)
+Maturity analysis of contractual undiscounted cash flows
+The tables below summarise the maturity profile of the Group's financial instruments based on the contractual undiscounted
+cash flows. The balances of some items in the tables below are different from the balances on the consolidated statement of
+financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's expected cash
+flows on these instruments may vary significantly from the following analysis. For example, demand deposits from customers
+are expected to maintain a stable or increasing balance although they have been classified as repayable on demand in the
+following tables.
+31 December 2019
+Overdue/
+repayable
+Notes to the Financial Statements
+8,793,935
+4,412,116
+25,354,657
+287,347
+617,842
+Others
+Total liabilities
+Net liquidity gap
+285,333
+13,061,583
+(12,057,413)
+53,041
+1,577,906
+33,234
+90,604
+20,299
+13,266
+495,777
+1,822,119
+432,760
+5,619,108
+(674,702) (1,884,799)
+2,908,840
+365,101
+382
+478
+67,859
+Financial liabilities designated as at FVTPL
+7,249,737
+70,888
+15,046,132
+Financial investments
+-Financial investments measured at FVTPL
+6,164
+44,236
+3,567,565
+44,671
+405,552
+131,963
+62,918
+805,347
+- Financial investments measured at FVOCI
+52,098
+57,803
+109,843
+2,600,254
+621,648
+914,097
+153,907
+897,537
+257,859
+316,762
+69,856
+577
+1,696,498
+Derivative financial assets
+61
+13,448
+15,369
+24,278
+11,645
+6,534
+71,335
+Loans and advances to customers
+21,943
+244,232
+Less than
+775,046
+28,952
+Total assets
+1,004,170
+2,010,666
+1,147,417
+3,734,309
+18,176
+7,320,956
+38,240
+9,159,036
+15,912
+39,599
+3,322,986
+27,699,540
+Liabilities:
+Due to central banks
+71
+410
+481
+438,779
+19,372
+49,564
+257,916
+1,430,163
+-Financial investments measured at
+amortised cost
+7
+39,686
+130,695
+415,725
+2,473,116
+1,459,953
+4,519,182
+Investments in associates and joint ventures
+29,124
+29,124
+Property and equipment
+290,404
+290,404
+Others
+272,032
+710
+25,960
+Property and equipment
+Annual Report 2019
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy
+ratio in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements. The
+requirements pursuant to these regulations may have certain differences comparing to those applicable in Hong Kong and
+other jurisdictions.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the former CBRC officially
+approved the Bank to adopt advanced capital management approaches. Within the scope of the approval, the foundation
+internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit risk, the internal
+model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory requirements.
+Domestic commercial banks should meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For domestic systemically important banks, minimum
+core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio should reach 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, corresponding minimum ratios should reach 7.50%, 8.50% and
+10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and the
+requirements of capital adequacy ratios differ by countries.
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBIRC. The
+required information is respectively filed with the CBIRC by the Group semi-annually and quarterly.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution policy,
+issue or repurchase own shares, qualifying additional tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+•
+•
+281
+•
+(e) Capital management
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+280
+The data set out in the above table includes trading book's data.
+Includes repurchase agreements.
+(**)
+Includes reverse repurchase agreements.
+(*)
+N/A
+The Group's objectives on capital management are:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+3,752
+4,178
+Core tier 1 capital deductions
+Others
+1,205,924
+1,367,180
+Retained profits
+278,980
+304,876
+General reserve
+261,636
+292,149
+Surplus reserve
+151,968
+149,067
+Valid portion of capital reserve
+356,407
+356,407
+Paid-in capital
+2,247,021
+2,472,774
+Core tier 1 capital
+31 December 2018
+31 December 2019
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+N/A
+1,684,757
+1,058,350
+(391,953)
+873
+132,971
+207,061
+Certificates of deposit
+2,329,296
+14,297
+44,133
+20,996
+306,350
+1,943,520
+other financial institutions (**)
+Due to banks and
+73,573
+73,573
+Derivative financial liabilities
+87,400
+73,634
+9,323
+4,443
+481
+410
+71
+at FVTPL
+Financial liabilities designated as
+Due to central banks
+449
+(1,083)
+341,354
+13,519,006
+(133,897)
+Interest rate mismatch
+25,354,657
+1,237,538
+340,564
+2,716,540
+5,205,901
+15,854,114
+Total liabilities
+495,777
+484,569
+1,467
+1,452
+354
+617,842
+21,408,934
+591,465
+11,468
+283,047
+105,509
+52,694
+176,592
+7,935
+Others
+Debt securities issued
+2,577,977
+4,709,018
+Due to customers
+Liabilities:
+(11,646)
+14,988
+Loans and advances to customers
+Structured products are mainly valued using dealer's quotations.
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc.
+Derivatives
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+Financial investments
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the
+framework of fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter
+solutions. Operating procedures specify measurement operating procedures, valuation date, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for
+daily transactions management. Financial Accounting Department plays a lead role of developing accounting policies of fair
+value measurement, valuation methodologies and system implementation. Risk Management Department is responsible for
+verifying trade details and valuation models.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+The loans and advances to customers valued by the valuation technology are mainly the bill business and the discounted
+cash flow model is used. For the bank acceptance bill, based on the different credit risk of the acceptor, the interest rate
+curve is set up with the actual transaction data in the market as the sample; for the commercial bill, based on the interbank
+offered rate, the interest rate curve is constructed according to the credit risk and liquidity point difference adjustment.
+Notes to the Financial Statements
+282
+valuation techniques which use inputs which have a significant effect on the recorded fair value that are not
+based on observable market data.
+Level 3:
+valuation techniques for which all inputs which have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 2:
+Level 1:
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+52. FAIR VALUE OF FINANCIAL INSTRUMENTS
+15.39%
+16.77%
+ICBC
+Other liabilities designated as at fair value through profit or loss
+For unquoted other liabilities designated as at FVTPL, the discounted cash flow model is used based on current yield curve
+appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied
+based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which is calibrated by active
+market quotes of standard European options with the same underlying.
+Annual Report 2019
+5,276
+measured at FVTPL
+Loans and advances to customers
+159,657
+159,657
+measured at FVTPL
+Reverse repurchase
+Derivative financial assets
+68,311
+1,010
+62,651
+4,650
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+31 December 2019
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+(a) Financial instruments recorded at fair value
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+283
+13.45%
+14.27%
+12.98%
+13.20%
+735
+793
+Valid portion of minority interests
+79,375
+199,456
+Additional tier 1 capital instruments and related premium
+80,110
+200,249
+Additional tier 1 capital
+2,232,033
+2,457,274
+Net core tier 1 capital
+7,980
+7,980
+Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+(3,739)
+(4,451)
+that are not fair valued on the balance sheet
+Cash flow hedge reserves that relate to the hedging of items
+1,927
+2,933
+Other intangible assets other than land use rights
+8,820
+9,038
+Goodwill
+Net tier 1 capital
+15,500
+2,657,523
+Tier 2 capital
+17,190,992
+18,616,886
+2,644,885
+3,121,479
+Refers to risk-weighted assets after capital floor and adjustments.
+(i)
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+Core tier 1 capital adequacy ratio
+Risk-weighted assets (i)
+Net capital base
+financial institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital instruments issued by
+Tier 2 capital deductions
+1,991
+1,707
+Valid portion of minority interests
+127,990
+189,569
+Surplus provision for loan impairment
+202,761
+272,680
+Valid portion of tier 2 capital instruments and related premium
+332,742
+463,956
+2,312,143
+1,149
+27,699,540
+2,025,321
+141
+Due to central banks
+Liabilities:
+30,109,436
+1,968,699
+2,329,574
+3,501,898
+6,521,855
+15,787,410
+Total assets
+542,935
+876
+539,464
+3,395
+Others
+286,561
+286,561
+Property and equipment
+32,490
+32,490
+joint ventures
+Investments in associates and
+5,208,167
+1,812,788
+76
+1,017
+Financial liabilities designated as
+at FVTPL
+3,084,830
+4,670,307
+14,687,406
+Due to customers
+355,428
+6,903
+102,708
+245,817
+Certificates of deposit
+2,529,846
+3,514
+38,624
+38,775
+236,160
+2,212,773
+other financial institutions (**)
+Due to banks and
+85,180
+85,180
+Derivative financial liabilities
+102,242
+69,578
+12,068
+19,762
+834
+2,405,542
+700,577
+289,260
+at amortised cost
+24,664
+842
+52,363
+491,964
+1,317,721
+other financial institutions (*)
+Due from banks and
+3,317,916
+347,058
+2,970,858
+Cash and balances with central banks
+Assets:
+Total
+bearing
+Non-
+interest-
+More than
+five years
+One to
+five years
+months to
+one year
+months
+Three
+Less than
+three
+31 December 2019
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+1,887,554
+24,008
+Derivative financial assets
+68,311
+-Financial investments measured
+1,476,872
+55,263
+278,014
+677,791
+233,683
+232,121
+at FVOCI
+― Financial investments measured
+962,078
+560,518
+102,776
+45,262
+128,720
+124,802
+at FVTPL
+-Financial investments measured
+Financial investments
+16,326,552
+54,370
+135,154
+320,940
+4,966,835
+10,849,253
+Loans and advances to customers
+68,311
+1,365,164
+511,104
+Debt securities issued
+―Financial investments measured
+805,347
+70,027
+127,288
+382,531
+109,835
+115,666
+at FVTPL
+-Financial investments measured
+Financial investments
+15,046,132
+at FVOCI
+57,058
+207,848
+3,723,420
+10,876,334
+Loans and advances to customers
+71,335
+71,335
+Derivative financial assets
+1,696,498
+56,740
+573
+66,142
+181,472
+179,158
+245,075
+715,623
+3,774,890
+4,813,948
+15,720,217
+Total assets
+438,779
+430,003
+192
+8,584
+Others
+290,404
+290,404
+29,124
+29,124
+joint ventures
+Investments in associates and
+4,519,182
+1,454,633
+2,402,746
+421,975
+239,828
+at amortised cost
+-Financial investments measured
+1,430,163
+28,952
+261,355
+313,451
+1,259,592
+other financial institutions (*)
+Due from banks and
+N/A
+1,910,179
+220,030
+1,448,630
+(1,593,786)
+Interest rate mismatch
+27,417,433
+1,261,749
+419,395
+3,281,868
+5,073,225
+17,381,196
+Total liabilities
+623,190
+592,373
+7,211
+15,970
+5,087
+2,549
+Others
+742,875
+349,552
+122,446
+39,201
+231,676
+N/A
+22,977,655
+(*)
+(**)
+3,372,576
+331,521
+3,041,055
+Cash and balances with central banks
+Assets:
+Total
+bearing
+five years
+years
+five
+interest-
+More than
+One to
+months to
+one year
+months
+Non-
+Three
+Less than
+three
+31 December 2018
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+279
+Annual Report 2019
+The data set out in the above table includes trading book's data.
+Includes repurchase agreements.
+Includes reverse repurchase agreements.
+6,425
+Valid portion of minority interests
+measured at FVOCI
+960
+(92)
+(328)
+323
+23
+Other investments
+2,627
+Equity investments
+1,853
+Debt securities
+Financial investments measured at FVOCI
+(10)
+(320)
+Funds and other investments
+297
+5,522
+Equity investments
+67
+7,834
+Debt securities
+Financial investments measured at FVTPL
+44
+410
+measured at FVTPL
+170,240
+444
+31,422
+(1,021)
+155,023
+617
+45
+189,586
+307
+339
+(32)
+19,489
+(19)
+16,232
+143
+(971)
+(882)
+' gd
+649
+143
+151,513
+(3,255)
+(107,271)
+92,119
+20,107
+(157)
+14,445
+34,727
+(3,575)
+Loans and advances to customers
+(43)
+1,100
+Derivative financial assets
+(1,372)
+Financial liabilities designated as at FVTPL
+Financial liabilities:
+219,630
+(1,785)
+(129,989)
+120,670
+(1,682)
+4,726
+227,690
+(340)
+33
+307
+Other investments
+44,895
+47
+(1)
+27,121
+(1,714)
+19,489
+Equity investments
+(142)
+47
+(1)
+143
+(160)
+(109,688)
+107
+(592)
+Financial assets:
+31 December
+2018
+Transfer out of
+level 3
+Disposals and
+Settlements
+Additions
+income
+comprehensive
+in other
+Total gains/
+(losses)
+recorded
+Total gains/
+(losses)
+recorded in
+profit or loss
+2018
+1 January
+(1,644)
+2,003
+351
+(89)
+(363)
+(3,546)
+(1,052)
+1,170
+244
+(89)
+(203)
+(2,174)
+Derivative financial liabilities
+833
+Debt securities
+(7,893)
+Financial liabilities:
+amount
+Carrying
+355,307
+355,307
+31 December 2018
+355,307
+350,204
+355,307
+350,204
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+Fair value
+220,168
+220,168
+92,991
+92,991
+5,293,114
+5,208,167
+5,293,114
+5,208,167
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+Level 2
+Level 1
+Fair value
+4,979,955
+4,979,955
+Level 1
+Level 2
+Level 3
+ICBC
+288
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of the
+Group's assets and liabilities. However, other institutions may use different assumptions and methods. Therefore, the fair
+values disclosed by different financial institutions may not be entirely comparable.
+The fair values of subordinated bonds and tier 2 capital notes are determined with reference to the available market
+values. If quoted market prices are not available, then fair values are estimated on the basis of pricing models or
+discounted cash flows.
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, then fair values are estimated on the basis of pricing models or discounted cash flows.
+(ii)
+(i)
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and financial liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described
+below are adopted to determine the fair values of these financial assets and financial liabilities:
+285,834
+285,834
+285,834
+282,459
+285,834
+282,459
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+213,101
+213,101
+4,280,407
+4,280,407
+67,225
+67,225
+4,560,733
+4,560,733
+4,519,182
+4,519,182
+Financial investments measured at amortised cost
+Financial assets
+Carrying
+amount
+31 December 2019
+No significant difference between the carrying amount and the fair value of the financial assets and financial liabilities not
+measured at fair value, except for the following items:
+(e) Fair value of financial assets and liabilities not carried at fair value
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+(3,546)
+246
+590
+(1,336)
+(2,174)
+240
+|
+291
+(1,143)
+(1,372)
+6
+299
+(193)
+ICBC
+286
+(35)
+(3,011)
+100
+(1,662)
+Derivative financial liabilities
+Loans and advances to customers
+(1,349)
+Financial liabilities designated as at FVTPL
+Gains or losses on level 3 financial instruments included in the statement of net profit or loss for the year comprise:
+227,690
+Net gains for the year
+Realised
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+287
+Annual Report 2019
+As at 31 December 2019, the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were immaterial.
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+(d) Valuation of financial instruments with significant unobservable inputs
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+As at the end of the reporting period, certain financial instruments were transferred out from level 3 to level 2 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+(ii) Transfers between level 2 and level 3
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the reporting
+period.
+(i) Transfers between level 1 and level 2
+(c) Transfers between levels
+10
+(2,005)
+Total
+2018
+Unrealised
+Realised
+2,015
+Total
+4,363
+3,581
+782
+2019
+Unrealised
+Net gains/(losses) for the year
+Financial investments measured at FVOCI
+(135)
+(74)
+31 December 2018
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+measured at FVTPL
+Reverse repurchase
+fair value on a recurring basis:
+Derivative financial assets
+Financial assets which are measured at
+ICBC
+284
+1,083,740
+1,644
+1,078,058
+4,038
+85,180
+1,052
+80,138
+3,990
+Derivative financial liabilities
+102,242
+592
+101,602
+48
+9,144
+592
+8,504
+Level 1
+48
+Level 2
+Total
+408
+7,475
+Equity investments
+243,749
+34,727
+205,220
+3,802
+Debt securities
+Financial investments measured at FVTPL
+360,483
+349,460
+11,023
+measured at FVOCI
+Loans and advances to customers
+1,368
+444
+924
+measured at FVTPL
+Loans and advances to customers
+174,794
+174,794
+71,335
+960
+65,356
+5,019
+Level 3
+20,107
+13,064
+60,454
+Financial investments measured at FVOCI
+962,078
+172,529
+742,913
+46,636
+523,202
+55,444
+441,534
+26,224
+Funds and other investments
+80,619
+64,172
+2,037
+14,410
+Equity investments
+358,257
+52,913
+299,342
+6,002
+Debt securities
+Financial investments measured at FVTPL
+423,993
+416,356
+7,637
+55,444
+Debt securities
+60,454
+341,281
+47
+Others
+Other debt securities issued
+precious metals
+Financial liabilities related to
+19,580
+19,580
+Wealth management products
+Financial liabilities designated as at FVTPL
+896,318
+896,318
+Due to customers
+fair value on a recurring basis:
+Financial liabilities which are measured at
+3,097,336
+219,630
+1,476,872
+44,942
+55,263
+44,895
+9,351
+1,089,632
+2,476,485
+401,221
+342,298
+1,017
+Equity investments
+1,421,609
+1,080,281
+27,990
+13,064
+19,423
+17
+944
+960
+Derivative financial assets
+Financial assets:
+2019
+31 December
+Transfer out of
+level 3
+Disposals and
+Settlements
+Additions
+gains/(losses)
+recorded
+in other
+comprehensive
+income
+(519)
+Total
+gains/(losses)
+recorded in
+profit or loss
+1 January
+Total
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and financial
+liabilities which are recorded at fair value and the movement during the year:
+(b) Movement in level 3 financial instruments measured at fair value
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2019
+Notes to the Financial Statements
+285
+Annual Report 2019
+1,012,620
+3,546
+2019
+1,010
+Loans and advances to customers
+measured at FVTPL
+(127,580)
+Funds and other investments
+31,097
+488
+151,513
+Funds and other investments
+64,172
+(682)
+(172)
+44,899
+20
+20,107
+Equity investments
+52,913
+(637)
+(1,235)
+16,803
+3,255
+34,727
+Debt securities
+Financial investments measured at FVTPL
+1,149
+686
+19
+444
+1,004,958
+4,116
+(392)
+703
+1,430,163
+2,843,490
+19,939
+227,690
+328,017
+281,275
+29,919
+307
+307
+Other investments
+19,489
+9,727
+Equity investments
+1,399,937
+Financial liabilities which are measured at
+143
+280,572
+Debt securities
+Financial investments measured at FVOCI
+805,347
+206,347
+568,300
+30,700
+533,608
+73,573
+151,513
+362,672
+1,119,222
+fair value on a recurring basis:
+1,128,949
+2,287,783
+4,867
+3,986
+Derivative financial liabilities
+2,174
+87,400
+1,372
+85,898
+130
+6,369
+1,372
+Due to customers
+130
+2,285
+67,413
+2,285
+11,480
+67,266
+Others
+Other debt securities issued
+precious metals
+Financial liabilities related to
+11,480
+67,266
+Financial liabilities designated as at FVTPL
+851,647
+851,647
+Wealth management products
+advances to customers
+640,031
+4.38
+4.00
+Annual Report 2019
+Interest income on due from central banks was RMB46,185 million, recording a decrease of RMB3,061 million or 6.2% as
+compared to that of last year, mainly due to the impact of the adjustment of the statutory reserve requirement ratio.
+Discussion and Analysis
+Interest Income on Investment
+Interest income on investment amounted to RMB221,184 million, representing an increase of RMB21,027 million or 10.5%
+as compared to that of last year, mainly due to the increase in investment.
+Interest Income on Due from Central Banks
+55,045
+21
+1,376,398
+14,600,596
+49,299
+707,400
+15,897,368
+Total loans and
+4.03
+57,169
+1,420,231
+Overseas business
+4.38
+214,317
+4,891,776
+4.59
+Interest Income on Due from Banks and Other Financial Institutions
+254,216
+4.45
+Interest income on due from banks and other financial institutions was RMB63,385 million, representing an increase of
+RMB4,725 million or 8.1% as compared to that of last year, principally due to the Bank's relatively abundant liquidity and
+reasonable increase in its efforts to offer fund lending during the reporting period, which resulted in the increase in the size
+of due from banks and other financial institutions.
+Demand deposits
+Interest Expense on Deposits
+5,534,278
+6,417,558
+0.77
+2.30
+98,625
+4,286,839
+2.36
+106,580
+4,506,960
+Time deposits
+Corporate deposits
+(%)
+Interest Expense
+Average cost
+balance
+(%)
+Average
+Average cost
+Interest
+expense
+Average
+balance
+Item
+2018
+2019
+In RMB millions, except for percentages
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+Interest expense on deposits amounted to RMB331,066 million, representing an increase of RMB50,854 million or 18.1%
+over the previous year, principally due to the increase in the cost of deposits by 14 basis points and the expansion in the size
+of due to customers.
+Interest
+expense
+Personal loans
+Item
+14,493
+707,400
+15,897,368
+Total loans and
+4.58
+578,135
+Medium to long-term loans 12,625,488
+4.08
+(%)
+Average yield
+Interest
+income
+135,948
+3,334,008
+3.95
+4.45
+129,265
+Short-term loans
+balance
+(%)
+Average
+Average yield
+Interest
+income
+balance
+Average
+2018
+In RMB millions, except for percentages
+5,983,490
+2019
+3,271,880
+11,266,588
+14,600,596
+504,083
+4.47
+312,438
+3.34
+12,415
+372,127
+Discounted bills
+4.44
+(%)
+Average yield
+Interest
+income
+356,176
+8,019,984
+4.48
+balance
+Average
+Average yield
+(%)
+Interest
+income
+383,600
+8,570,732
+Corporate loans
+balance
+Item
+Average
+2018
+2019
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+advances to customers
+4.38
+640,031
+4.64
+42,012
+10,299
+Subtotal
+(0.6)
+(41)
+7,045
+7,004
+Asset custody business
+22.3
+1,975
+8,861
+10,836
+Guarantee and commitment business
+(3.8)
+(558)
+171,641
+14,582
+Corporate wealth management services
+(0.6)
+(142)
+24,002
+23,860
+Investment banking business
+private banking services
+(0.9)
+(259)
+27,596
+27,337
+Personal wealth management and
+14,024
+16,041
+155,600
+Trust and agency services
+Increase/
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+In RMB millions, except for percentages
+OTHER NON-INTEREST RELATED GAINS
+Discussion and Analysis
+23
+Annual Report 2019
+7.1
+145,301
+(5.9)
+(1,005)
+17,046
+5.7
+9,294
+162,347
+(6.5)
+(183)
+2,798
+2,615
+(18.8)
+(369)
+1,959
+1,590
+The Bank proactively responded to the New Rules on Asset Management and other regulatory requirements, focused on
+serving the real economy and satisfying the financial needs of consumers, and made continuous efforts to promote the
+transformation and innovation of intermediary services. In 2019, the Bank realized a net fee and commission income of
+RMB155,600 million, representing an increase of RMB10,299 million or 7.1% over last year. Specifically, the bank card
+business income recorded an increase of RMB3,335 million, as benefited by the increase in credit card installment service
+income; income on settlement, clearing business and cash management increased by RMB5,536 million, mainly driven by the
+rapid growth of third party payment; income on guarantee and commitment business registered an increase of RMB1,975
+million, mainly due to the increase in income driven by the fast development of commitment business.
+Less: Fee and commission expense
+Net fee and commission income
+Fee and commission income
+Others
+cash management
+17.4
+5,536
+31,785
+0.38
+14,105
+2.43
+108,872
+4,488,128
+0.40 3,719,278
+1.71 8,207,406
+2.30
+20,255
+331,066
+20,847,046
+Total deposits
+880,418
+Overseas business
+154,932
+9,042,110
+Subtotal
+15,399
+3,866,882
+Demand deposits
+2.70
+139,533
+5,175,228
+Time deposits
+Personal deposits
+1.37
+140,637
+10,270,329
+1.43
+155,879
+10,924,518
+122,977
+0.70
+1.50
+16,598
+37,321
+Settlement, clearing business and
+3,335
+43,719
+47,054
+Bank card business
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2018
+2019
+Item
+NET FEE AND COMMISSION INCOME
+In 2019, non-interest income was RMB169,076 million, RMB16,473 million or 10.8% higher than that of last year,
+accounting for 21.8% of the Bank's operating income. Specifically, net fee and commission income increased by 7.1% to
+RMB155,600 million, and other non-interest income rose by 84.6% to RMB13,476 million.
+Non-interest Income
+Interest expense on debt securities issued was RMB36,866 million, indicating an increase of RMB6,493 million or 21.4% over
+last year, mainly attributable to the new issuance of RMB110.0 billion of tier 2 capital bonds by the Bank and the increase
+in the size of the financial bonds, bills and CDs issued by overseas institutions and domestic subsidiaries during the reporting
+period. Please refer to "Note 35. to the Financial Statements: Debt Securities Issued" for the debt securities issued by the
+Bank.
+Interest Expense on Debt Securities Issued
+Discussion and Analysis
+ICBC
+22
+Interest expense on due to banks and other financial institutions was RMB63,296 million, RMB1,695 million or 2.6% lower
+than that of last year, principally attributable to the decrease in the cost of due to banks and other financial institutions.
+Interest Expense on Due to Banks and Other Financial Institutions
+1.45
+280,212
+19,317,269
+1.59
+1.98
+839,534
+Interest income on loans and advances to customers was RMB707,400 million, RMB67,369 million or 10.5% higher as
+compared to that of last year, as affected by the increase in the size of loans and advances to customers and the increase in
+the average yield of loans and advances to customers by 7 basis points.
+7.6
+Interest Income
+balance
+income/ Average yield/
+Average
+income/ Average yield/
+Average
+Interest
+Interest
+2018
+2019
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In RMB millions, except for percentages
+In 2019, net interest income was RMB606,926 million, RMB34,408 million or 6.0% higher than that of last year, accounting
+for 78.2% of the Bank's operating income. Interest income grew by RMB90,060 million or 9.5% to RMB1,038,154 million
+and interest expenses increased by RMB55,652 million or 14.8% to RMB431,228 million. Net interest spread and net interest
+margin came at 2.08% and 2.24%, 8 basis points and 6 basis points lower than those of the previous year, respectively.
+Net Interest Income
+expense
+Discussion and Analysis
+Annual Report 2019
+8.6
+90
+1,047
+1,137
+Non-controlling interests
+company
+4.9
+14,548
+297,676
+312,224
+Attributable to: Equity holders of the parent
+19
+cost (%)
+balance
+expense
+63,385
+2,029,662
+Due from banks and other
+1.56
+49,246
+3,155,407
+1.55
+46,185
+2,979,028
+Due from central banks(2)
+3.65
+200,157
+5,483,420
+3.60
+221,184
+6,141,181
+Investment
+4.38
+640,031
+14,600,596
+4.45
+707,400
+15,897,368
+Loans and advances to customers
+Assets
+Item
+cost (%)
+4.9
+14,638
+298,723
+313,361
+Less: Operating expenses
+7.0
+50,881
+725,121
+776,002
+Operating income
+10.8
+16,473
+152,603
+169,076
+6.0
+34,408
+572,518
+606,926
+(%)
+In RMB millions, except for percentages
+Increase/ Growth rate
+(decrease)
+2018
+2019
+Non-interest income
+Net interest income
+Item
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In 2019, the Bank strictly implemented the financial regulatory requirements, and adhering to the general principle of
+pursuing progress while ensuring stability, better served the real economy, speeded up innovation and transformation
+and strengthened risk prevention and control, so as to promote the high-quality development of various businesses. In
+2019, the Bank realized a net profit of RMB313,361 million, representing an increase of RMB14,638 million or 4.9% as
+compared to the previous year. Return on average total assets stood at 1.08%, and return on weighted average equity was
+13.05%. Operating income amounted to RMB776,002 million, representing an increase of 7.0%, of which, net interest
+income grew by 6.0% to RMB606,926 million; non-interest income was RMB169,076 million, up by 10.8%. Operating
+expenses amounted to RMB207,776 million, representing an increase of 7.0%, and the cost-to-income ratio was 25.79%.
+Impairment losses on assets were RMB178,957 million, indicating an increase of 10.7%. Income tax expense grew by 6.4%
+to RMB78,428 million.
+Income Statement Analysis
+FINANCIAL STATEMENTS ANALYSIS
+Discussion and Analysis
+Growth rate
+207,776
+3.12
+194,203
+7.0
+Net profit
+6.4
+4,738
+73,690
+78,428
+Less: Income tax expense
+5.2
+19,376
+372,413
+391,789
+Profit before taxation
+joint ventures
+(18.4)
+(569)
+3,089
+2,520
+Share of profits of associates and
+5.4
+19,945
+369,324
+389,269
+Operating profit
+10.7
+17,363
+161,594
+178,957
+Less: Impairment losses on assets
+13,573
+Interest Income on Loans and Advances to Customers
+1,628,820
+3.60
+(316)
+(2,745)
+Due from central banks
+21,027
+(2,742)
+23,769
+Investment
+67,369
+10,220
+57,149
+Loans and advances to customers
+Net increase/
+(decrease)
+(3,061)
+Interest rate
+Comparison between 2019 and 2018
+Increase/(decrease) due to
+In RMB millions
+Discussion and Analysis
+Assets
+Item
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+ICBC
+20
+20
+Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+(3)
+(2) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+Volume
+Due from banks and other financial institutions
+12,543
+(7,818)
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+34,408
+(25,845)
+60,253
+55,652
+25,189
+30,463
+6,493
+(254)
+6,747
+(1,695)
+(1,601)
+(94)
+50,854
+27,044
+23,810
+Changes in net interest income
+Changes in interest expenses
+Debt securities issued
+Due to banks and other financial institutions
+Deposits
+Liabilities
+90,060
+(656)
+90,716
+Changes in interest income
+4,725
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses on
+assets represent the average of the balances at the beginning of the year and at the end of the year.
+2.30
+2.24
+Net interest margin
+Due to banks and other
+1.45
+280,212
+19,317,269
+1.59
+331,066
+20,847,046
+Deposits
+Liabilities
+26,691,916
+29,388,576
+Total assets
+on assets
+(387,490)
+(461,121)
+Allowance for impairment losses
+2,211,163
+2,802,458
+Non-interest-generating assets
+3.81
+948,094
+24,868,243
+3.84
+1,038,154
+27,047,239
+Total interest-generating assets
+financial institutions(3)
+2,658,948
+58,660
+63,296
+2,668,229
+2.16
+2.08
+Net interest spread
+572,518
+606,926
+Net interest income
+1,729,863
+24,560,708
+2,085,315
+26,626,751
+Total liabilities
+Non-interest-bearing liabilities
+1.65
+375,576
+22,830,845
+1.76
+431,228
+24,541,436
+Total interest-bearing liabilities
+3.59
+30,373
+845,347
+3.56
+36,866
+1,035,442
+Debt securities issued
+financial institutions(3)
+2.44
+64,991
+2.38
+Item
+82,336
+2018
+Amount
+(%)
+Amount
+9,955,821
+Percentage
+Percentage
+At 31 December 2019
+At 31 December 2018
+In RMB millions, except for percentages
+Personal loans
+Discounted bills
+Corporate loans
+2019
+(%)
+2018
+89,369
+94,189
+99,558
+3,511
+3,644
+4,219
+49,455
+56,366
+63,836
+Total
+Personal loans
+Discounted bills
+2017
+59.4
+9,418,894
+61.0
+100.0
+73.4
+6,914,401
+75.3
+26.6
+2,504,493
+24.7
+(%)
+Amount
+(%)
+Percentage
+Percentage
+At 31 December 2019
+At 31 December 2018
+In RMB millions, except for percentages
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+100.0
+36.6
+5,636,574
+15,419,905
+100.0
+16,761,319
+38.1
+6,383,624
+2.4
+364,437
+2.5
+421,874
+Corporate loans
+9,418,894
+Item
+Unit: RMB100 millions
+3,317,916
+Cash and balances with central banks
+24.4
+6,754,692
+25.4
+7,647,117
+54.3
+15,046,132
+54.2
+16,326,552
+Net loans and advances to customers (1)
+Investment
+Percentage
+(%)
+11.0
+412,731
+Amount
+15,419,905
+At 31 December 2018
+In RMB millions, except for percentages
+478,498
+43,731
+16,761,319
+Amount
+Percentage
+(%)
+At 31 December 2019
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+Add: Accrued interest
+Total loans and advances to customers
+38,958
+3,372,576
+12.2
+Due from banks and other
+Total Loans
+In 2019, the Bank earnestly improved its adaptability to serve the real
+economy, increased its support for financing, and prioritized the funding
+demands of major national projects. It proactively supported the building
+of major infrastructure projects under construction and for weakness
+improvement, highlighted the support for the high-quality development
+of manufacturing and for the financing demands of consumption
+upgrade services such as health care, education, and elderly care, and
+implemented the development strategy for private enterprises and inclusive
+finance comprehensively. As at the end of 2019, total loans amounted to
+RMB16,761,319 million, RMB1,341,414 million or 8.7% higher compared
+with the end of the previous year, of which RMB denominated loans of
+domestic branches were RMB14,923,768 million, RMB1,332,347 million or
+9.8% higher than that at the end of 2018.
+Loan
+Discussion and Analysis
+ICBC
+26
+Note: (1) Please see "Note 23. to the Financial Statements: Loans and Advances to Customers".
+100.0
+27,699,540
+100.0
+30,109,436
+Total assets
+3.0
+829,642
+3.1
+930,297
+Others
+2.6
+734,049
+2.8
+845,186
+Reverse repurchase agreements
+financial institutions
+3.5
+962,449
+3.5
+1,042,368
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+100.0
+Item
+Short-term corporate loans
+Central bank bonds
+Government bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+Note: (1) Includes assets invested by funds raised by the issuance of principal-guaranteed wealth management products by the Bank.
+100.0
+6,754,692
+100.0
+7,647,117
+1.2
+84,361
+1.2
+Policy bank bonds
+90,019
+563,346
+7.3
+558,366
+0.9
+57,909
+1.8
+135,882
+89.6
+6,049,076
+89.7
+6,862,850
+(%)
+8.3
+Other bonds
+Total
+28
+2019
+100.0
+19.8
+1,200,642
+6,049,076
+20.7
+100.0
+6,862,850
+1,421,052
+12.8
+774,732
+9.5
+652,522
+0.5
+32,746
+0.3
+21,979
+66.9
+4,040,956
+69.5
+(%)
+Amount
+(%)
+Amount
+4,767,297
+Percentage
+Percentage
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2019
+ICBC
+Amount
+Percentage
+Percentage
+(%)
+Amount
+193,516
+Personal consumption loans
+81.5
+4,589,961
+80.9
+5,166,279
+(%)
+Amount
+(%)
+Amount
+Residential mortgages
+Item
+Percentage
+Percentage
+At 31 December 2019
+At 31 December 2018
+In RMB millions, except for percentages
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+Discussion and Analysis
+27
+Annual Report 2019
+Corporate loans rose by RMB536,927 million or 5.7% from the end of last year, mainly because the Bank actively supported
+the development and innovation of investment and financing business in key areas such as the Guangdong-Hong Kong-
+Macau Greater Bay Area, the coordinated development of Beijing-Tianjin-Hebei and the Yangtze River Delta Integration, and
+increased its support for the key projects and livelihood projects in fields such as urban infrastructure and public services,
+high-quality development of manufacturing, consumption upgrade, and services related to people's well-being.
+9,955,821
+Total
+7,497,500
+Medium to long-term corporate loans
+Amount
+3.0
+Item
+204,162
+Personal business loans
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2019
+Total
+Accrued interest
+Funds and others(1)
+Equity instruments
+Bonds
+Item
+INVESTMENT
+In 2019, the Bank moderately expanded investment scale and proactively supported the development of the real economy.
+As at the end of 2019, investment amounted to RMB7,647,117 million, representing an increase of RMB892,425
+million or 13.2% from the end of the previous year. Among these, bonds rose by RMB813,774 million or 13.5% to
+RMB6,862,850 million.
+Investment
+Please see the section headed "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and
+their quality.
+Personal loans increased by RMB747,050 million or 13.3% from the end of last year. Specifically, residential mortgages grew
+by RMB576,318 million or 12.6%; personal business loans increased by RMB129,913 million or 60.1%, mainly due to the
+rapid growth of online lending products in the inclusive finance areas such as personal e-Mortgage Quick Loan and Quick
+Lending for Operation; credit card overdrafts increased by RMB51,465 million or 8.2%, primarily due to the steady growth
+of credit card installment balance.
+100.0
+5,636,574
+100.0
+6,383,624
+Total
+11.1
+626,468
+10.7
+677,933
+Credit card overdrafts
+3.8
+215,983
+5.4
+345,896
+3.6
+ASSETS DEPLOYMENT
+2,458,321
+Assets Deployment
+725,121
+100.0
+776,002
+Operating income
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+2019
+100.0
+2018
+SUMMARY OPERATING SEGMENT INFORMATION
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+Segment Information
+Discussion and Analysis
+ICBC
+24
+Income tax expense increased by RMB4,738 million or 6.4% to RMB78,428 million as compared to the previous year.
+The effective tax rate stood at 20.02%. Please see "Note 15. to the Financial Statements: Income Tax Expense" for the
+reconciliation of income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective
+income tax expense.
+Income Tax Expense
+In 2019, the Bank set aside the impairment losses on assets of RMB178,957 million, an increase of RMB17,363 million or
+10.7% as compared to that of last year. Specifically, the impairment losses on loans was RMB162,108 million, indicating
+an increase of RMB14,761 million or 10.0%. Please refer to "Note 23. to the Financial Statements: Loans and Advances to
+Customers; Note 14. to the Financial Statements: Impairment Losses on Assets" for details.
+Impairment Losses on Assets
+year.
+The Bank paid attention to value creation oriented development, and continually strengthened the refined cost
+management. Operating expenses amounted to RMB207,776 million, an increase of RMB13,573 million or 7.0% over last
+In RMB millions, except for percentages
+Corporate banking
+388,408
+50.1
+40.7
+151,714
+40.7
+159,368
+Corporate banking
+100.0
+372,413
+100.0
+391,789
+Profit before taxation
+0.7
+5,288
+0.6
+4,603
+Others
+12.8
+92,484
+12.4
+96,422
+Treasury operations
+37.7
+273,490
+36.9
+286,569
+Personal banking
+48.8
+353,859
+13,573
+Personal banking
+194,203
+20.0
+OPERATING EXPENSES
+Operating Expenses
+Other non-interest related gains amounted to RMB13,476 million, RMB6,174 million or 84.6% higher than that of the
+previous year. Specifically, the increase in net trading income was mainly attributable to the increase in gains from derivatives
+and equity investment; the net loss on financial investments was primarily due to the increase in payments to customers
+resulted from the growth of structured deposits; and the increase in other net operating income was principally derived from
+the increase in the income on operating lease business and decrease in net loss on exchange and exchange rate products.
+84.6
+6,174
+7,302
+13,476
+Total
+180.0
+5,600
+3,111
+8,711
+Item
+Other operating income, net
+(5,027)
+1,345
+(3,682)
+Net (loss)/gain on financial investments
+196.8
+5,601
+2,846
+8,447
+Net trading income
+(%)
+As at the end of 2019, total assets of the Bank amounted to RMB30,109,436 million, RMB2,409,896 million or 8.7%
+higher than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred
+to as "total loans") increased by RMB1,341,414 million or 8.7% to RMB16,761,319 million, investment increased
+by RMB892,425 million or 13.2% to RMB7,647,117 million, and cash and balances with central banks decreased by
+RMB54,660 million or 1.6% to RMB3,317,916 million.
+(decrease)
+(373.8)
+2019
+2018
+In RMB millions, except for percentages
+Increase/
+(decrease)
+7,200
+35,921
+43,121
+Total
+Others
+(1.0)
+(24)
+2,339
+2,315
+Amortisation
+(1.3)
+(104)
+7,781
+7,677
+Taxes and surcharges
+2.3
+625
+27,088
+27,713
+Property and equipment expenses
+4.9
+5,876
+121,074
+126,950
+Staff costs
+(%)
+Growth rate
+207,776
+152,919
+7.0
+144,284
+Bohai Rim
+14.0
+15.6
+61,250
+Pearl River Delta
+20.7
+77,056
+21.0
+Yangtze River Delta
+10.3
+38,506
+10.2
+40,088
+Head Office
+100.0
+372,413
+100.0
+391,789
+Profit before taxation
+7.9
+57,021
+8.0
+61,969
+Overseas and others
+3.9
+27,958
+3.8
+70,099
+29,216
+17.9
+20.3
+In 2019, in response to the complicated development trends externally, the Bank adhered to the prudent and steady
+business strategy based on the macroeconomic policies, performance of the real economy, sources of funds and state of risk
+control, and promoted the moderate growth, continuous structure optimization and coordinated development in quantity
+and price of total assets and liabilities. In addition, the Bank made active efforts to support the development of the real
+economy and adhered to the strategy of integrated development of investment and financing, thereby comprehensively
+improving the efficiency of serving the real economy. It cemented the foundation for deposit business development, thereby
+ensuring a stable and sustainable growth of funding sources. Moreover, the Bank deepened efforts to improve the structure
+of assets and liabilities and established a long-term mechanism for high-quality development of assets and liabilities.
+Balance Sheet Analysis
+39.0
+Discussion and Analysis
+25
+Annual Report 2019
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+8.9
+33,239
+8.8
+34,368
+Overseas and others
+1.5
+5,562
+0.7
+2,743
+Northeastern China
+14.6
+54,409
+15.0
+58,635
+Western China
+9.7
+36,027
+10.8
+42,270
+Central China
+75,483
+Northeastern China
+52,131
+15.0
+100.0
+725,121
+100.0
+776,002
+Operating income
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+2018
+2019
+In RMB millions, except for percentages
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+Please refer to the section headed "Discussion and Analysis - Business Overview" for details on the development of each of
+these operating segments.
+0.2
+587
+0.3
+1,311
+Others
+20.4
+75,828
+20.0
+78,191
+Treasury operations
+38.7
+Head Office
+100,925
+Percentage
+86,107
+13.0
+14.9
+115,747
+Western China
+12.2
+88,192
+12.2
+94,915
+108,518
+18.7
+136,799
+18.5
+143,891
+Bohai Rim
+Central China
+94,375
+13.0
+11.9
+Yangtze River Delta
+128,672
+126,151
+16.6
+Pearl River Delta
+100,667
+13.0
+17.4
+Pearl River Delta
+Overseas and others
+Central China
+Yangtze River Delta
+Northeastern China
+(iv) Rescheduled loans and advances to customers
+37,579
+Less: Rescheduled loans and advances
+overdue for more than three months
+Rescheduled loans and advances overdue
+for less than three months
+31 December
+31 December
+2018
+2019
+Rescheduled loans and advances
+Western China
+0.31%
+Head Office
+(iii) Overdue loans and advances to customers by geographical distribution
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+The definition of overdue loans and advances to customers is set out as follows:
+1.16%
+0.23%
+1.10%
+0.62%
+0.56%
+Over 12 months
+35,846
+Between 6 and 12 months
+0.31%
+Bohai Rim
+51,665
+(1,143)
+40,266
+0.03%
+(0.01%)
+0.23%
+5,984
+6,068
+(0.01%)
+(1,335)
+0.05%
+7,211
+advances
+% of total
+loans and
+% of total
+loans and
+advances
+0.04%
+7,319
+57,177
+31 December 2018
+269,932
+268,216
+13,916
+11,753
+26,474
+37,190
+24,994
+26,608
+33,137
+21,804
+39,223
+41,351
+39,165
+31 December 2019
+Between 3 and 6 months
+Total
+2,033,807
+178,779
+31 December
+2018
+2019
+31 December
+ICBC
+292
+Africa
+Europe
+North and South America
+of which attributed to Hong Kong
+Asia Pacific (excluding Mainland China)
+Mainland China
+(d) Loans and advances to customers (excludes accrued interest)
+(i) Analysis by location of the counterparties
+306,368
+2,340,175
+15,612,279
+118,743
+316,384
+813,546
+7,350
+136,851
+111,012
+51,155
+North and South America
+398,186
+Others
+111,393
+54,698
+76,766
+0.04%
+251,239
+15,483
+1,091,502
+As a percentage of the total gross loans and advances to customers:
+14,411,937
+629,955
+185,132
+94,933
+95,507
+48,523
+52,709
+35,323
+36,916
+Over 12 months
+Between 6 and 12 months
+Between 3 and 6 months
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+31 December
+2018
+2019
+712,383
+31 December
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+(ii) Overdue loans and advances to customers
+15,419,905
+16,761,319
+75,751
+107,615
+152,352
+184,581
+149,910
+144,461
+428,442
+453,503
+(In RMB millions, unless otherwise stated)
+Annual Report 2019
+24
+Unaudited Supplementary Financial Information
+ICBC
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+banks or between banks and other financial institutions
+17
+16
+tax liabilities)
+--
+Defined-benefit pension fund net assets (net of deferred
+15
+risk on fair valued liabilities
+Unrealised gains and losses due to changes in own credit
+14
+Gain on sale related to asset securitisation
+13
+294
+X20
+(4,451)
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+Shortfall of provision for loan impairment
+12
+11
+Deferred tax assets that rely on future profitability
+excluding those arising from temporary differences (net
+of deferred tax liabilities)
+10
+X14-X15
+X16
+8,820
+1,927
+2,933
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+9,038
+Goodwill (net of deferred tax liabilities)
+(3,739)
+Core tier 1 capital: Regulatory adjustments
+Prudential valuation adjustments
+Item
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+of which attributed to Hong Kong
+7,980
+26a
+N/A
+N/A
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+25
+N/A
+N/A
+Reference
+2018
+2019
+Unaudited Supplementary Financial Information
+31 December
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier 1
+capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in core tier 1 capital
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+Deductible amount of significant minority investment
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+investment in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+Deductible amount of non-significant minority
+23
+22
+22
+21
+22
+20
+19
+18
+31 December
+7 8 9
+2,247,021
+2,472,774
+General reserve
+2b
+X21
+261,636
+292,149
+Surplus reserve
+2a
+1,746,540
+1,964,205
+Retained earnings
+2
+X18
+356,407
+304,876
+356,407
+1
+Reference
+31 December
+2018
+31 December
+2019
+Core tier 1 capital:
+Item
+(i) Capital composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(f) Correspondence between balance sheet in published financial statements and capital
+composition
+The Bank is a commercial bank incorporated in Mainland China with its banking business primarily conducted in Mainland
+China. As at 31 December 2019, substantial amounts of the Bank's exposures arose from businesses with Mainland China
+entities or individuals. Analyses of various types of exposures by counterparty have been disclosed in the respective notes to
+the financial statements.
+(e) Exposures to Mainland China non-bank entities
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Paid-in capital
+278,980
+X22
+2c
+Core tier 1 capital before regulatory adjustments
+X25
+3,752
+4,178
+Valid portion of minority interests
+56
+Fill in O for joint stock banks)
+period (only applicable to non-joint stock companies.
+Valid portion to core tier 1 capital during the transition
+4
+X24
+(11,646)
+(1,083)
+Others
+3b
+X19
+151,968
+149,067
+Capital reserve
+За
+public reserves)
+140,322
+147,984
+Accumulated other comprehensive income (and other
+3
+X23
+1,205,924
+1,367,180
+Retained profits
+293
+954,651
+Loans and advances to customers
+762,391
+23,824,295
+25,840,039
+247,348
+302,505
+499,291
+594,828
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+Retained profits
+Reserves
+Other equity instruments
+Share capital
+EQUITY
+356,407
+TOTAL LIABILITIES
+Debt securities issued
+82,946
+92,907
+Income tax payable
+20,646,928
+22,178,290
+Due to customers
+281,380
+297,696
+Certificates of deposit
+300,988
+74,384
+Repurchase agreements
+Other liabilities
+1,644,147
+356,407
+79,375
+56. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+55. COMPARATIVE AMOUNTS
+Issuance of Undated Additional Tier 1 Capital Bonds and Eligible Tier 2 Capital Instruments
+The Board of Directors of the Bank considered and approved the Proposal on the Issuance of Undated Additional Tier 1
+Capital Bonds and Eligible Tier 2 Capital Instruments on 7 January 2020. The Bank planned to issue undated additional
+tier 1 capital bonds in the offshore market in foreign currency of RMB40.0 billion equivalent, which will be used to replenish
+additional tier 1 capital of the Bank; and to issue eligible tier 2 capital instruments of RMB40.0 billion or equivalent foreign
+currency in the domestic and offshore markets to replenish the Bank's tier 2 capital. The undated additional tier 1 capital
+bonds and eligible tier 2 capital instruments issuance plan is still subject to the review and approval by the Shareholders'
+General Meeting of the Bank, after which it is further subject to the approval by the relevant regulatory authorities.
+The First Extraordinary General Meeting of 2018 of the Bank reviewed and approved relevant proposals on issuance of
+domestic and offshore preference shares. In March 2020, the Bank received an approval from CBIRC, consenting to the
+Bank's offshore issuance of preference shares of no more than RMB30.0 billion in equivalent USD, which will be counted as
+the additional tier 1 capital of the Bank in accordance with relevant regulatory requirements.
+Issuance Progress of Overseas Preference Shares
+Since the outbreak of the Coronavirus Disease 2019 ("COVID-19"), the Group has actively implemented relevant national
+decisions and arrangements, fully taken the role as a stabilizer in supporting the real economy, and completely ensured
+various financial services for the epidemic prevention and control. Meanwhile, the Group has been closely following and
+continuously assessing the impacts of the outbreak on its business, and actively taking countermeasures to ensure the
+stability of the Group's financial position and financial performance.
+The impacts of the Coronavirus Disease 2019
+A final dividend of RMB0.2628 (pre-tax) per share after the appropriation of statutory surplus reserve and general reserve,
+was approved at the board of directors' meeting held on 27 March 2020, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2019, the final dividend amounted to approximately RMB93,664 million. The dividend payable was not recognised as a
+liability as at 31 December 2019.
+The Profit Distribution Plan
+54. AFTER THE REPORTING PERIOD EVENT
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+199,456
+289
+General Manager of Finance
+and Accounting Department
+Zhang Wenwu
+Vice Chairman and President
+Gu Shu
+Chen Siqing
+Chairman
+26,072,160
+28,411,462
+2,247,865
+2,571,423
+1,111,446
+1,259,397
+700,637
+756,163
+Annual Report 2019
+The financial statements were approved and authorised for issue by the board of directors on 27 March 2020.
+2,162,131
+42,120
+Financial investments measured at FVOCI
+740,645
+804,076
+6,348,656
+7,087,260
+14,211,777
+15,469,899
+521,393
+38,295
+35,991
+644,278
+1,031,402
+3,313,748
+3,251,450
+1,189,496
+1,212,515
+Financial investments measured at FVTPL
+Reverse repurchase agreements
+Derivative financial assets
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+31 December
+2018
+2019
+31 December
+53. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+Financial Statements for the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+7,980
+ICBC
+Financial investments
+Due to banks and other financial institutions
+1,245,837
+5,070,669
+50,726
+Derivative financial liabilities
+78,737
+85,555
+Financial liabilities designated as at FVTPL
+410
+1,017
+Due to central banks
+26,072,160
+28,411,462
+269,769
+365,179
+56,220
+Financial investments measured at amortised cost
+60,829
+127,518
+LIABILITIES
+TOTAL ASSETS
+Other assets
+Deferred income tax assets
+Property and equipment
+34,242
+34,242
+Investments in associates
+122,110
+145,320
+Investments in subsidiaries
+4,362,174
+124,548
+290
+ICBC
+Unaudited Supplementary Financial Information
+Non-bank
+private
+Official
+Banks and
+other
+financial
+31 December 2019
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head
+Office is located in another country.
+International claims refer to the sum of cross-border claims in all currencies and local claims in foreign currencies, including
+loans and advances to customers, balances with central banks, amounts due from banks and other financial institutions and
+debt investments.
+(c) International claims
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+291
+Annual Report 2019
+investments in overseas subsidiaries, associates and joint ventures.
+institutions
+capital and statutory reserves of overseas branches; and
+property and equipment, net of depreciation charges;
+•
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+133,781
+Net structural position
+27,898
+(269)
+106,152
+36,489
+30,251
+129,671
+(123,433)
+(10,280)
+•
+(417)
+sector
+Asia Pacific
+Asia Pacific
+sector
+sector
+Non-bank
+private
+Official
+Banks and
+other
+financial
+institutions
+31 December 2018
+2,353,093
+136,887
+1,075,152
+409,431
+731,623
+324,254
+sector
+6,579
+126,753
+77,725
+435,036
+2,028,839
+Total
+Others
+130,308
+65,293
+234,694
+62,704
+72,345
+― of which attributed to Hong Kong
+North and South America
+961,955
+282,678
+653,898
+113,197
+1,705
+(11,568)
+(4,443,841)
+(1,593)
+(118)
+(63,983)
+Net option position
+(3,327,804)
+(726,443)
+(122,258)
+(2,479,103)
+Forward sales
+(3,218,867)
+3,216,575
+500,414
+223,694
+2,492,467
+(65,694)
+Forward purchases
+Others
+862,537
+(591,767)
+(451,222)
+(2,175,878)
+Spot liabilities
+31 December 2019
+HKD
+468,597
+2,151,993
+Spot assets
+USD
+(b) Foreign currency concentrations
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and IFRSS
+for the year ended 31 December 2019 (2018: no differences). There are no differences between the equity attributable to
+equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2019 (As at 31 December 2018: no
+differences).
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Total
+3,483,127
+Net (short)/long position
+(74,504)
+118,693
+(866,993)
+(103,944)
+(3,472,904)
+4,296,474
+756,539
+182,036
+3,357,899
+Total
+3,247,466
+(3,053,330)
+Others
+691,979
+(550,857)
+(368,795)
+(2,133,678)
+418,669
+2,136,818
+HKD
+USD
+31 December 2018
+Net (short)/long position
+Net option position
+Forward sales
+Forward purchases
+Spot liabilities
+Spot assets
+107,927
+28,954
+903
+78,070
+Net structural position
+87,337
+43,148
+205,372
+X11
+298
+253,460
+85
+84
+83
+82
+81
+the current period due to phase-out arrangements
+Excluded from core tier 1 capital due to cap
+80
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period
+due to cap
+X04
+181,646
+Valid cap of surplus provision for loan impairment in
+tier 2 capital under the internal ratings-based approach
+79
+X03
+393,682
+460,851
+Surplus provision for loan impairment under the internal
+ratings-based approach
+78
+120,224
+tier 2 capital under the weighted approach
+81,140
+67,102
+Assets
+scope of
+consolidation*
+under
+regulatory
+Balance sheet
+financial
+statements*
+Consolidated
+balance sheet
+as in published
+scope of
+consolidation*
+under
+regulatory
+63,383
+Balance sheet
+balance sheet
+as in published
+31 December 2019 31 December 2019 31 December 2018 31 December 2018
+(ii) Consolidated financial statements
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+297
+Annual Report 2019
+financial
+statements*
+Cash and balances with central banks
+X02
+7,923
+84,515
+Undeducted portion of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+73
+72
+Amounts below the thresholds for deduction
+8.0%
+8.0%
+6.0%
+64,004
+6.0%
+5.0%
+Capital adequacy ratio
+Core tier 1 capital adequacy ratio
+71
+Tier 1 capital adequacy ratio
+70
+69
+Domestic minima for regulatory capital
+5.0%
+7,766
+X05+X07+X08+
+X09+X12+X29+X30
+32,215
+Valid cap of surplus provision for loan impairment in
+77
+X01
+19,049
+17,647
+Provision for loan impairment under the weighted approach
+76
+tier 2 capital
+37,654
+Valid caps of surplus provision for loan impairment in
+60,846
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+75
+N/A
+N/A
+Mortgage servicing rights (net of deferred tax liabilities)
+74
+X06+X10+X13
+57,073
+7.98%
+Due from banks and other financial
+Precious metals
+253,525
+244,846
+244,902
+Fixed assets
+37,104
+29,124
+40,470
+32,490
+Construction in progress
+Long-term equity investments
+4,519,182
+5,155,869
+5,208,167
+― Financial investments measured at
+amortised cost
+1,408,749
+1,430,163
+1,451,357
+1,476,872
+4,481,665
+― Financial investments measured at
+FVOCI
+39,714
+35,081
+Prepared in accordance with PRC GAAP.
+(*)
+27,589,328
+27,699,540
+29,955,543
+30,109,436
+Total assets
+186,769
+39,712
+200,910
+244,283
+Other assets
+58,097
+58,375
+62,536
+62,536
+Deferred income tax assets
+35,079
+230,111
+institutions
+772,191
+921,042
+577,803
+577,803
+567,043
+567,043
+181,292
+181,292
+238,061
+238,061
+Derivative financial assets
+374,509
+450,976
+475,325
+3,372,576
+3,372,576
+3,317,916
+3,317,916
+other financial institutions
+Placements with banks and
+384,646
+805,347
+68,311
+71,335
+962,078
+― Financial investments measured at
+FVTPL
+6,662,605
+6,754,692
+7,528,268
+7,647,117
+Financial investments
+15,045,239
+68,311
+15,046,132
+16,326,552
+Loans and advances to customers
+733,460
+734,049
+841,954
+845,186
+Reverse repurchase agreements
+71,335
+16,325,339
+8.20%
+Consolidated
+1.5%
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Significant minority investments in additional tier 1
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+Deductible amount of non-significant minority
+41a
+40
+40
+31 December
+2019
+39
+Item
+38
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+295
+Annual Report 2019
+Direct or indirect investments in own additional tier 1
+instruments
+37
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+Additional tier 1 capital: Regulatory adjustments
+31 December
+2018
+41b
+46
+Tier 2 capital:
+80,110
+2,312,143
+2,657,523
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+45
+200,249
+Additional tier 1 capital
+Reference
+44
+43
+Undeducted shortfall that should be deducted from tier 2
+capital
+42
+--
+Others that should be deducted from additional tier 1
+capital
+41c
+--
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Total regulatory adjustments to additional tier 1
+capital
+adjustments
+36 Additional tier 1 capital before regulatory
+80,110
+2,232,033
+2,457,274
+Core tier 1 capital
+29
+14,988
+68 Percentage of core tier 1 capital meeting buffers to
+risk-weighted assets
+Total regulatory adjustments to core tier 1 capital
+28
+Additional tier 1 capital:
+additional tier 1 capital and tier 2 capital
+Others that should be deducted from core tier 1 capital
+27
+26c
+subject to consolidation
+financial institutions that are under control but not
+Shortfall in core tier 1 capital instruments issued by
+26b
+60,855
+Undeducted shortfall that should be deducted from
+30
+Additional tier 1 capital instruments and related premium
+199,456
+200,249
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+35
+X26
+735
+793
+Valid portion of minority interests
+34
+transition period
+Invalid instruments to additional tier 1 capital after the
+33
+Including: Portion classified as liabilities
+32
+X28+X32
+79,375
+199,456
+Including: Portion classified as equity
+31
+79,375
+Tier 2 capital instruments and related premium
+272,680
+15,500
+X17
+13.20%
+Core tier 1 capital adequacy ratio
+61
+Requirements for capital adequacy ratio and reserve capital
+2,644,885
+17,190,992
+18,616,886
+Total risk-weighted assets
+60
+12.98%
+3,121,479
+59
+332,742
+463,956
+Tier 2 capital
+58
+Reference
+2018
+2019
+Total capital (tier 1 capital + tier 2 capital)
+31 December
+62
+14.27%
+202,761
+1.5%
+Including: G-SIB buffer requirement
+67
+Including: Countercyclical buffer requirement
+66
+2.5%
+Including: Capital conservation buffer requirement
+Tier 1 capital adequacy ratio
+65
+4.0%
+Institution specific buffer requirement
+64
+15.39%
+16.77%
+Capital adequacy ratio
+63
+13.45%
+4.0%
+31 December
+2.5%
+Unaudited Supplementary Financial Information
+189,569
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+51
+50
+856
+439
+Including: Invalid portion to tier 2 capital after the
+transition period
+49
+463,956
+X27
+1,707
+Valid portion of minority interests
+period
+81,140
+60,855
+Invalid instruments to tier 2 capital after the transition
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+47
+1,991
+127,990
+332,742
+48
+ICBC
+X02+X04
+Item
+--
+296
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+56b
+financial institutions that are under control but not
+subject to consolidation
+Investments in tier 2 capital instruments issued by
+Others that should be deducted from tier 2 capital
+57 Total regulatory adjustments to tier 2 capital
+56c
+instruments issued by financial institutions that are not
+subject to consolidation
+X31
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+55
+54
+53
+52
+56a
+Tier 2 capital: Regulatory adjustments
+is 10 December
+2021, in full or
+partial amount
+10 December in each
+year after the First
+Redemption Date
+18 November 2015
+Perpetual
+No maturity date
+Yes
+The First
+Redemption Date
+is 18 November
+2020, in full or
+partial amount
+Commences on the
+First Redemption
+Date (18 November
+2020) and ends
+on the completion
+date of redemption
+or conversion of
+all the Domestic
+Preference Shares
+Yes
+The First
+Redemption Date
+is 30 July
+2024, in full or
+partial amount
+Redemption of
+present bonds in
+full or in part on
+each Distribution
+Payment Date since
+the First Redemption
+Date (30 July 2024).
+The Issuer has the
+right to redeem the
+rules
+tier 1 capital after
+they are issued due
+to unpredictable
+changes in regulatory
+No maturity date
+Yes
+The First
+Redemption Date
+The First
+Redemption Date
+is 24 September
+present bonds in
+full rather than in
+part if the present
+bonds are no longer
+qualify as additional
+RMB80,000
+Other equity
+N/A
+ICBC
+RMB70,000
+Other equity
+No maturity date
+2024, in full or
+partial amount
+Commences on the
+First Redemption
+Date (24 September
+No maturity date
+10 December 2014
+Perpetual
+No maturity date
+26 July 2019
+Perpetual
+No maturity date
+19 September 2019
+Perpetual
+No
+No
+N/A
+Including: Subsequent call dates,
+N/A
+N/A
+if applicable
+302
+Yes
+2024) and ends
+on the completion
+date of redemption
+or conversion of
+all the Domestic
+Preference Shares
+dividend/coupon
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+any related index
+6% (dividend rate)
+before
+4.5% (dividend rate) 4.45% (interest rate)
+before
+before
+10 December
+18 November
+N/A
+N/A
+2021
+Yes
+2020
+30 July
+2024
+4.2% (dividend rate)
+before
+24 September
+2024
+Yes
+RMB45,000
+Other equity
+Yes
+Yes
+N/A
+N/A
+Including: Coupon rate and
+Fixed to floating
+Undated additional
+Main features of regulatory
+capital instrument
+Ordinary shares
+(A share)
+Ordinary shares
+(H share)
+Preference shares
+(Offshore)
+(Domestic)
+Unaudited Supplementary Financial Information
+Preference shares tier 1 capital bonds
+(Domestic)
+Coupons/dividends
+Including: Fixed or floating
+Floating
+Floating
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Preference shares
+(Domestic)
+EUR 600
+Other equity
+Additional tier
+1 capital
+19 October 2006
+Preference Shares,
+Guidance on
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Regulatory treatment
+Including: Transition arrangement
+Core tier 1 capital
+Core tier 1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Core tier 1 capital
+Core tier 1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Company Law of the
+People's Republic
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Measures on
+The Bank
+360036
+(Domestic)
+Preference shares
+Including: Existence of a
+Governing law(s) of the instrument
+Securities Law of the
+People's Republic of
+China/China
+Securities and Futures
+Ordinance of Hong
+Kong/Hong Kong,
+China
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Undated additional
+(Domestic)
+The Bank
+360011
+Company Law of the
+People's Republic
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Measures on
+Preference Shares,
+Guidance on
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+(Domestic)
+The Bank
+1928018
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+/China
+Preference shares tier 1 capital bonds
+RMB86,795
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+Including: Post-transition
+Governing Capital of Commercial
+contingent call dates and
+redemption amount
+Parent company/
+Group
+Core tier 1
+capital instrument
+RMB168,496
+Parent company/
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+4,542
+Parent company/
+Parent company/
+Group
+Additional tier 1
+capital instrument
+RMB44,947
+Group
+Additional tier 1
+capital instrument
+RMB79,987
+Additional tier 1
+capital instrument
+RMB69,981
+Parent company/
+Group
+Including: Optional call date,
+Perpetual
+RMB269,612
+Share capital,
+Capital reserve
+RMB336,931
+Banks (Provisional)
+Including: Eligible to the parent
+company/group level
+Instrument type
+Amount recognised in regulatory
+capital (in millions, as at the
+latest reporting date)
+Par value of instrument (in millions)
+arrangement of Regulation
+Accounting treatment
+Perpetual or dated
+Including: Original maturity date
+Issuer call (subject to prior
+supervisory approval)
+Parent company/
+Group
+Core tier 1
+capital instrument
+Original date of issuance
+dividend stopper
+Including: Fully discretionary,
+102,242
+mandatory cancellation of
+Main features of regulatory
+capital instrument
+Ordinary shares
+(A share)
+Ordinary shares
+(H share)
+Preference shares
+(Offshore)
+Undated additional
+Preference shares tier 1 capital bonds
+Preference shares
+(Domestic)
+Write-down feature
+No
+No
+No
+No
+(Domestic)
+Yes
+(Domestic)
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+303
+Core tier 1 capital
+N/A
+Core tier 1 capital
+specify instrument
+type convertible into
+Including: If convertible,
+N/A
+No
+N/A
+The Bank
+N/A
+MA
+The Bank
+specify issuer of
+instrument it converts into
+Annual Report 2019
+The Bank
+Core tier 1 capital
+Including: If write-down,
+MA
+when a Tier 2
+Including: If write-down,
+permanent or temporary
+Including: If temporary write-down,
+description of write-up
+mechanism
+Position in subordination
+hierarchy in liquidation
+(specify instrument type
+immediately senior to
+instrument)
+¾ />
+N/A
+N/A
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+Unique identifier
+Event occurs;
+full write-down
+an Additional Tier 1
+Capital Trigger
+write-down when
+Event
+Full or partial
+N/A
+N/A
+N/A
+Additional Tier 1
+N/A
+MA
+write-down trigger(s)
+N/A
+Capital Trigger
+full or partial
+N/A
+NA
+N/A
+N/A
+N/A
+Event or Tier 2
+Capital Trigger
+Including: If write-down,
+partially discretionary or
+N/A
+Including: If convertible,
+No
+Non-cumulative
+No
+No
+N/A
+N/A
+Yes
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Yes
+Additional Tier 1
+Capital Trigger
+No
+N/A
+Yes
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Event
+Event
+Non-cumulative
+No
+Non-cumulative
+No
+coupons/dividends
+Fully discretionary Fully discretionary Partially discretionary Partially discretionary Partially discretionary Partially discretionary
+No
+Including: Redemption incentive
+Non-cumulative
+mechanism
+Including: Non-cumulative
+N/A
+or cumulative
+Including: If convertible,
+conversion trigger(s)
+Including: If convertible, fully
+or partially
+No
+Non-cumulative
+No
+Non-cumulative
+Convertible or non-convertible
+N/A
+ÍM
+N/A
+Event or Tier 2
+Capital Trigger
+Event
+Fully or partially
+convertible when
+an Additional Tier 1
+Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+The initial
+conversion price
+is equal to the
+average trading
+price of the A
+shares of the
+Bank for the
+20 trading days
+preceding 30 August
+2018, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Including: If convertible,
+N/A
+N/A
+mandatory or optional
+conversion
+N/A
+issuance plan
+Mandatory
+N/A
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+Including: If convertible,
+conversion rate
+N/A
+S
+N/A
+Fully or partially
+convertible when
+an Additional Tier 1
+Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+The initial
+conversion price
+N/A
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+Capital Trigger
+Fully or partially
+convertible when
+an Additional Tier 1
+Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+The initial
+conversion price
+is equal to the
+average trading
+price of the A
+shares of the
+Bank for the
+issuance plan
+Mandatory
+Issuer
+14,882
+2,344,883
+Ordinary shares
+(H share)
+The Bank
+1398
+Capital reserve
+149,067
+149,067
+151,968
+151,968
+Other comprehensive income
+(1,266)
+(1,083)
+(11,875)
+(11,646)
+Surplus reserve
+292,291
+292,149
+261,720
+261,636
+86,051
+General reserve
+86,051
+206,132
+339,246
+365,246
+261,639
+Total liabilities
+27,417,433
+27,271,337
+25,354,657
+25,250,947
+Equity
+Share capital
+356,407
+356,407
+356,407
+356,407
+Other equity instruments
+206,132
+305,019
+304,876
+279,064
+(*)
+Prepared in accordance with PRC GAAP.
+Annual Report 2019
+299
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(iii) Description of related items
+Item
+Loans and advances to customers
+Total loans and advances to customers
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+Financial investments
+Financial investments measured at FVTPL
+2,338,381
+9,061
+Capital Trigger
+2,684,206
+278,980
+Retained profits
+1,368,536
+1,367,180
+1,206,666
+1,205,924
+Equity attributable to equity holders of the
+476,415
+parent company
+Minority interests
+15,817
+2,674,728
+9,478
+2,330,001
+2,329,320
+Total equity
+2,692,003
+2,676,186
+Other liabilities
+1,024
+1,217
+Due to banks and other financial institutions
+1,776,320
+1,017
+1,776,320
+481
+1,328,246
+481
+1,328,246
+Placements from banks and other financial
+institutions
+490,253
+490,253
+486,249
+486,249
+Financial liabilities measured at FVTPL
+102,242
+87,400
+1,017
+Due to central banks
+Liabilities
+scope of
+consolidation*
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+31 December 2019 31 December 2019 31 December 2018
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+Balance sheet
+87,399
+under
+scope of
+consolidation*
+Consolidated
+balance sheet
+as in published
+31 December 2018
+Balance sheet
+under
+regulatory
+financial
+statements*
+regulatory
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Derivative financial liabilities
+85,180
+33,636
+33,351
+Taxes payable
+109,601
+109,545
+95,678
+95,318
+Debt securities issued
+742,875
+742,875
+617,842
+617,842
+Deferred income tax liabilities
+1,873
+1,690
+34,960
+35,301
+Employee benefits payable
+21,410,976
+73,573
+73,573
+Repurchase agreements
+263,273
+254,926
+514,801
+513,495
+85,180
+Certificates of deposit
+355,428
+341,354
+341,354
+Due to customers
+22,977,655
+22,977,655
+21,408,934
+355,428
+31 December 2019
+Balance sheet
+under regulatory
+scope of
+consolidation
+16,325,339
+119,469
+X28
+Including: Perpetual bonds
+79,987
+X32
+Capital reserve
+149,067
+X19
+Other comprehensive income
+(1,083)
+X24
+Reserve for changes in fair value of financial assets
+23,560
+Reserve for cash flow hedging
+(4,452)
+Including: Preference shares
+206,132
+Other equity instruments
+X18
+Goodwill
+9,038
+X16
+Long-term deferred expenses
+3,767
+Repossessed assets
+9,123
+Including: Cash flow hedge reserves that relate to the hedging of
+Others
+Debt securities issued
+742,875
+Including: Valid portion of tier 2 capital instruments and their premium
+272,680
+X17
+Share capital
+356,407
+23,724
+162,542
+(4,451)
+items that are not fair valued on the balance sheet
+793
+X26
+Including: Valid portion to tier 2 capital
+1,707
+X27
+Annual Report 2019
+301
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(iv) Main features of eligible capital instruments
+Main features of regulatory
+capital instrument
+Ordinary shares
+(A share)
+The Bank
+601398
+Including: Valid portion to additional tier 1 capital
+X25
+4,178
+Including: Valid portion to core tier 1 capital
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+(1,456)
+(18,144)
+Others
+(591)
+Surplus reserve
+292,149
+X20
+X21
+304,876
+X22
+Retained profits
+1,367,180
+X23
+Minority interests
+9,478
+General reserve
+Preference shares
+(Offshore)
+The Bank
+4604
+X15
+X14
+Including: Non-significant minority investments in tier 2
+72,788
+X08
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at FVOCI
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at amortised cost
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Long-term equity investments
+Including: Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+X07
+3,034
+Including: Non-significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+capital instruments issued by financial institutions that
+are not subject to consolidation
+16,803,837
+Reference
+17,647
+X01
+7,923
+X02
+460,851
+Including: Undeducted portion of non-significant minority
+X03
+X04
+921,042
+90
+X05
+Including: Significant minority investments in core tier 1
+6,144
+X06
+181,646
+16,751
+investments in capital instruments issued by
+financial institutions that are not subject to consolidation
+300
+(In RMB millions, unless otherwise stated)
+31 December 2019
+Balance sheet
+under regulatory
+scope of
+consolidation
+Item
+Other assets
+Interest receivable
+Intangible assets
+Including: Land use rights
+Other receivables
+Reference
+230,111
+2,233
+19,684
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+X13
+27,934
+ICBC
+1,451,357
+7,091
+X09
+3,576
+X10
+X29
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+are not subject to consolidation
+5,155,869
+X30
+X31
+40,470
+7,980
+X11
+24
+X12
+1,488
+Event occurs
+Parent company/
+Group
+N/A
+debts that have been
+issued by the Issuer and
+are pari passu with the
+present bonds; and pari
+passu with other tier 2
+capital instruments that will
+Tier 2 capital bonds
+Subordinated to depositor
+and general creditor; but
+senior to equity capital,
+other tier 1 capital
+instruments and hybrid
+capital bonds; pari passu
+with other subordinated
+and general creditor,
+pari passu with other
+subordinated debts
+Tier 2 capital bonds
+Subordinated to depositor
+hierarchy in liquidation
+(specify instrument type
+immediately senior to
+instrument)
+Position in subordination
+capital instrument
+possibly be issued in the
+future and are pari passu
+with the present bonds
+Main features of regulatory
+Unaudited Supplementary Financial Information
+ICBC
+306
+N/A
+Permanent
+write-down
+full write-down
+Partial or
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which
+the Issuer would become
+non-viable
+Tier 2 capital bonds
+Subordinated to depositor
+and general creditor; but
+senior to equity capital,
+other tier 1 capital
+instruments and hybrid
+capital bonds; pari passu
+with other subordinated
+possibly be issued in the
+future and are pari passu
+with the present bonds
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+307
+N/A
+debts that have been
+issued by the Issuer and
+are pari passu with the
+present bonds; and pari
+passu with other tier 2
+capital instruments that will
+No
+N/A
+No
+N/A
+No
+non-compliant features
+Including: If yes, specify
+Non-compliant transitioned
+features
+Annual Report 2019
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided
+that a write-down is
+necessary, without which
+the Issuer would become
+non-viable; or (ii) any
+relevant authority having
+N/A
+N/A
+instrument it converts into
+type convertible into
+Including: If convertible,
+specify issuer of
+Including: If convertible,
+specify instrument
+optional conversion
+mandatory or
+N/A
+N/A
+Write-down feature
+N/A
+conversion rate
+N/A
+N/A
+름름
+N/A
+N/A
+Including: If convertible,
+Including: If convertible,
+Including: If write-down,
+write-down trigger(s)
+Including: If write-down,
+full write-down
+Permanent
+write-down
+Partial or
+decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which
+the Issuer would become
+non-viable
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided
+that a write-down is
+necessary, without which
+the Issuer would become
+non-viable; or (ii) any
+relevant authority having
+N/A
+N/A
+full write-down
+Permanent
+write-down
+decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which
+the Issuer would become
+non-viable
+Partial or
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided
+that a write-down is
+necessary, without which
+the Issuer would become
+non-viable; or (ii) any
+relevant authority having
+N/A
+N/A
+N/A
+N/A
+Including: If temporary write-down,
+description of write-up mechanism
+permanent or temporary
+Including: If write-down,
+full or partial
+Issuer
+Unique identifier
+Governing law(s) of the
+instrument
+21 March 2019
+Dated
+Debt securities issued
+Debt securities issued Debt securities issued
+RMB10,000
+RMB45,000
+RMB10,000
+Tier 2 capital
+instrument
+RMB10,000
+21 March 2019
+Debt securities issued
+Tier 2 capital
+instrument
+RMB45,000
+Tier 2 capital
+instrument
+RMB10,000
+Tier 2 capital
+instrument
+RMB45,000
+Parent company/
+Group
+Parent company/
+Group
+Parent company/
+Group
+Group
+RMB45,000
+Dated
+25 March 2029
+25 March 2034
+름름
+ICBC
+308
+N/A
+N/A
+N/A
+N/A
+26 April 2029,
+in full amount
+26 April 2024,
+in full amount
+25 March 2029,
+in full amount
+25 March 2024,
+in full amount
+Yes
+Yes
+Yes
+Yes
+24 April 2019
+Dated
+26 April 2034
+24 April 2019
+Dated
+26 April 2029
+Parent company/
+fully or partially
+Tier 2 capital
+Tier 2 capital
+Original date of issuance
+Accounting treatment
+(in millions)
+Par value of instrument
+reporting date)
+(in millions, as at the latest
+regulatory capital
+Perpetual or dated
+Amount recognised in
+the parent
+company/group level
+Including: Eligible to
+Banks (Provisional)
+Capital of Commercial
+Regulation Governing
+Including: Transition
+arrangement of
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+Including: Post-transition
+arrangement of
+Regulatory treatment
+Instrument type
+Including: Original
+maturity date
+Issuer call (subject to prior
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+The Bank
+1928012
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+The Bank
+1928011
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+other applicable
+laws, regulations and
+normative documents
+Inter-bank Bond
+Market, as well as
+The Bank
+1928007
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+The Bank
+1928006
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+and redemption amount
+Including: Subsequent call
+dates, if applicable
+contingent call dates
+supervisory approval)
+Including: Optional call date,
+Tier 2 capital
+N/A
+Tier 2 capital
+Including: If convertible,
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional) and
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional) and
+be governed by, and
+shall be construed in
+accordance with, New
+York law, except that the
+provisions of the Notes
+relating to subordination
+shall be governed by, and
+construed in accordance
+with, PRC law
+Regulatory treatment
+Including: Transition
+arrangement of
+ISIN: USY39656AC06
+The Notes and the Fiscal
+Agency Agreement shall
+The Bank
+Rule 144A
+The Bank
+1728022
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+1728021
+Tier 2 capital bonds
+Governing law(s) of the
+instrument
+Unique identifier
+ISIN: US455881AD47
+Regulation S
+Issuer
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+Regulation Governing
+Tier 2 capital instrument
+RMB44,000
+Tier 2 capital instrument
+RMB equivalent
+Parent company/
+Group
+Parent company/
+Group
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Including: Post-transition
+arrangement of
+Tier 2 capital
+Tier 2 capital
+Par value of instrument
+(in millions)
+(in millions, as at the latest
+reporting date)
+Instrument type
+Amount recognised in
+regulatory capital
+the parent
+company/group level
+Banks (Provisional)
+Including: Eligible to
+Capital of Commercial
+Tier 2 capital
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Subordinated to
+deposits, general
+debts, subordinated
+debts, tier 2 capital
+bonds and undated
+additional tier 1
+capital bonds
+Subordinated to
+deposits, general
+debts, subordinated
+debts, tier 2 capital
+bonds and undated
+additional tier 1
+capital bonds
+shareholders
+shareholders
+debts, and preference debts, and preference
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+N/A
+Subordinated to
+deposits, general
+debts, subordinated
+debts and tier 2
+capital bonds
+write-down
+N/A
+N/A
+N/A
+N/A
+Permanent
+N/A
+N/A
+N/A
+N/A
+Subordinated to
+deposits, general
+debts, subordinated
+debts, tier 2 capital
+bonds and undated
+additional tier 1
+capital bonds
+Non-compliant transitioned features
+Unaudited Supplementary Financial Information
+NA
+N/A
+N/A
+No
+N/A
+N/A
+No
+No
+N/A
+No
+N/A
+No
+No
+N/A
+ICBC
+non-compliant features
+Including: If yes, specify
+Tier 2 capital instrument
+RMB44,000
+13,825
+304
+RMB44,000
+4.45%
+4.45%
+Fixed
+Fixed
+No
+Mandatory
+No
+4.875%
+Fixed
+Tier 2 capital bonds
+Tier 2 capital bonds
+Tier 2 capital bonds
+Including: Redemption
+coupons/dividends
+partially discretionary or
+mandatory cancellation of
+Including: Fully discretionary,
+dividend stopper
+No
+Including: Existence of a
+No
+No
+N/A
+conversion trigger(s)
+USD2,000
+No
+N/A
+No
+N/A
+No
+Including: If convertible,
+Convertible or non-convertible
+cumulative
+Non-cumulative
+Non-cumulative
+Including: Non-cumulative or
+incentive mechanism
+No
+Mandatory
+Mandatory
+Including: Coupon rate and
+any related index
+Non-cumulative
+dividend/coupon
+Yes
+No
+22 November 2027
+08 November 2027
+21 September 2025
+supervisory approval)
+Including: Optional call date,
+contingent call dates and
+Issuer call (subject to prior
+Yes
+maturity date
+RMB44,000
+Debt securities issued
+06 November 2017
+Dated
+21 September 2015
+Dated
+Perpetual or dated
+Accounting treatment
+Original date of issuance
+Debt securities issued
+Including: Original
+N/A
+Debt securities issued
+20 November 2017
+Dated
+22 November 2022,
+08 November 2022,
+in full amount
+Coupons/dividends
+Including: Fixed or floating
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+capital instrument
+Unaudited Supplementary Financial Information
+305
+Annual Report 2019
+For the year ended 31 December 2019
+N/A
+if applicable
+N/A
+Including: Subsequent call dates,
+redemption amount
+in full amount
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+NAG
+N/A
+N/A
+N/A
+N/A
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+is necessary, without
+which the Issuer
+would become
+non-viable
+N/A
+Yes
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+is necessary, without
+which the Issuer
+would become
+non-viable
+Yes
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+Yes
+Yes
+Whichever occurs
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+N/A
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+is necessary, without
+which the Issuer
+would become
+N/A
+N/A
+름름름증
+NA
+optional conversion
+Including: If convertible,
+non-viable
+Including: If convertible,
+specify instrument
+type convertible into
+Including: If convertible,
+specify issuer of
+instrument it converts into
+Write-down feature
+Including: If write-down,
+write-down trigger(s)
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+름름름
+mandatory or
+No
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+NA
+N/A
+N/A
+N/A
+No
+earlier: (i) CBIRC
+having decided that
+write-down
+non-viable; or (ii) any
+Permanent
+Permanent
+Permanent
+write-down
+write-down
+write-down
+N/A
+N/A
+N/A
+N/A
+Subordinated to
+depositor and
+general creditor,
+10,319,962
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+present bonds
+No
+Subordinated to
+depositor and
+general creditor,
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+present bonds
+No
+Subordinated to
+depositor and
+general creditor,
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+present bonds
+No
+Subordinated to
+Including: If convertible,
+conversion rate
+depositor and
+general creditor,
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+Permanent
+a write-down is
+necessary, without
+which the Issuer
+would become
+write-down
+write-down
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+is necessary, without
+which the Issuer
+would become
+non-viable
+Annual Report 2019
+309
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: If write-down,
+full or partial
+Including: If write-down,
+permanent or temporary
+Including: If temporary
+write-down,
+description of write-up
+mechanism
+Position in subordination
+hierarchy in liquidation
+(specify instrument type
+immediately senior to
+instrument)
+Non-compliant transitioned
+features
+Including: If yes, specify
+non-compliant features
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Partial or full
+write-down
+Partial or full
+Partial or full
+Partial or full
+write-down
+fully or partially
+860,783
+conversion trigger(s)
+equities not included in
+505,359
+450,307
+88,091
+860,783
+11,007
+All other liabilities and
+80,286
+NSFR derivative liabilities
+505,359
+530,593
+88,091
+11,007
+Other liabilities:
+123
+13
+12
+11
+matching interdependent assets
+Liabilities with
+10
+2,877,515
+285,748
+184,878
+5,403,030
+386,619
+Other wholesale funding
+the above categories
+3,778,655
+14
+Total ASF
+14,025,884
+49,947
+514,735
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+13,626,434
+11,762
+214,270
+2,372,383
+2,270
+235,934
+3,585,858
+250,665
+1,216,077
+financial institutions
+secured by non-Level 1 HQLA
+and unsecured loans to
+secured by Level 1 HQLA
+Loans to financial institutions
+19
+Loans to financial institutions
+18
+5,296
+Loans and securities:
+17
+operational purposes
+other financial institutions for
+700,358
+98,974
+1,101
+11,529
+184,215
+Deposits held at
+16
+liquid assets (HQLA)
+20,620,124
+Total NSFR high-quality
+Required stable funding (RSF) item
+15
+Including: If convertible,
+2,933
+277,447
+Including: Redemption
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Fixed
+Fixed
+Fixed
+Fixed
+4.26%
+4.51%
+4.40%
+4.69%
+No
+Mandatory
+No
+No
+Mandatory
+No
+No
+Mandatory
+No
+No
+Mandatory
+No
+incentive mechanism
+Including: Non-cumulative or
+cumulative
+Convertible or non-convertible
+Including: If convertible,
+coupons/dividends
+21,244
+partially discretionary or
+mandatory cancellation of
+dividend stopper
+7,252,753
+Operational deposits
+6,656,170
+288,681
+206,122
+5,680,477
+7,639,372
+Wholesale funding:
+10,227,564
+1,957
+12,513
+5,392,103
+5,957,169
+Less stable deposits
+92,398
+6,724
+10,854
+41,862
+37,468
+Stable deposits
+small business customers:
+Industrial and Commercial Bank
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Coupons/dividends
+Including: Fixed or floating
+dividend/coupon
+Including: Coupon rate and
+any related index
+Including: Existence of a
+Including: Fully discretionary,
+present bonds
+No
+Additional requirements, of which:
+N/A
+9
+Secured funding
+19,515
+10
+3,255,199
+1,116,826
+11
+Outflows related to derivative exposures and other collateral requirements
+936,096
+936,096
+12
+Outflows related to loss of funding on debt products
+78,427
+13
+2,319,103
+180,730
+14
+Other contractual funding obligations
+63,556
+62,962
+15
+Other contingent funding obligations
+4,069,242
+126,415
+16
+Total cash outflows
+Credit and liquidity facilities
+78,427
+Unsecured debt
+8
+Total
+weighted
+value
+S/N Item
+High-quality liquid assets
+1 Total high-quality liquid assets (HQLA)
+5,009,252
+Cash outflows
+2
+Retail deposits and deposits from small business customers, of which:
+11,157,778
+1,111,081
+3456
+Stable deposits
+71,773
+2,481
+Less stable deposits
+11,086,005
+1,108,600
+Unsecured wholesale funding, of which:
+12,973,765
+4,291,437
+Operational deposits (excluding those generated from correspondent
+banking activities)
+7,447,242
+1,806,194
+7
+Non-operational deposits (all counterparties)
+5,448,096
+2,406,816
+6,728,236
+Cash inflows
+17
+Secured lending (including reverse repos and securities borrowing)
+31 December 2019
+Unweighted value by residual maturity
+No.
+1
+Item
+Capital:
+No maturity
+< 6 months
+6 months to
+< 1 year
+Weighted
+≥ 1 year
+value
+Available stable funding (ASF) item
+234
+567890
+Regulatory capital
+2,865,732
+2,865,260
+272,901
+272,680
+Other capital instruments
+472
+221
+3,138,633
+3,137,940
+693
+Retail deposits and deposits from
+5,994,637
+5,433,965
+23,367
+8,681
+20
+(i) Quantitative Information Disclosure of Net Stable Funding Ratio (NSFR) Using
+Advanced Approaches
+value
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+ICBC
+995,964
+544,121
+18
+Inflows from fully performing exposures
+1,560,312
+1,135,259
+19
+Other cash inflows
+945,895
+939,606
+20
+Total cash inflows
+3,502,171
+2,618,986
+Total adjusted
+value
+21
+Total HQLA
+22
+Total net cash outflows
+23
+Liquidity coverage ratio (%)
+5,009,252
+4,109,250
+Data of the above table are all the simple arithmetic means of the 92 natural days' figures of the recent quarter.
+121.89%
+312
+Unaudited Supplementary Financial Information
+un-weighted
+Fourth-quarter 2019
+Total
+(h) Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Approaches
+2,002,299
+(15,500)
+31,982,214
+(14,988)
+29,679,878
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets and
+Related Information
+31 December
+S/N
+Item
+2019
+31 December
+2018
+1
+On-balance sheet items (excluding derivatives and SFTs, but including
+collateral)
+29,507,681
+27,120,956
+2
+3
+4
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+(15,500)
+29,492,181
+(14,988)
+27,105,968
+74,843
+76,179
+56
+7
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+70,072
+35,125
+63,890
+68,114
+27,699,540
+(110,212)
+N/A
+N/A
+310
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+(g) Disclosure of Leverage Ratio
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+S/N Item
+1
+2
+345
+Total consolidated assets as per published financial statements
+Consolidated adjustments for accounting purposes but outside
+the scope of regulatory consolidation
+Adjustments for fiduciary assets
+Adjustments for derivative financial instruments
+Adjustment for securities financing transactions
+6
+Adjustment for off-balance sheet items
+7
+Other adjustments
+8
+Balance of adjusted on- and off-balance sheet assets
+31 December
+2019
+31 December
+2018
+30,109,436
+(153,893)
+12,352
+18,975
+2,010,844
+N/A
+8
+(18,334)
+5,025,875
+4,400,110
+18
+Less: Adjustments for conversion to credit equivalent amounts
+(3,015,031)
+(2,397,811)
+19
+Balance of adjusted off-balance sheet assets
+2,010,844
+2,002,299
+20
+Net tier 1 capital
+2,657,523
+2,312,143
+21
+Balance of adjusted on- and off-balance sheet assets
+31,982,214
+29,679,878
+22
+Leverage ratio
+8.31%
+7.79%
+Annual Report 2019
+311
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2019
+(In RMB millions, unless otherwise stated)
+Off-balance sheet exposure at gross notional amount
+Less: Exempted CCP leg of client-cleared trade exposures
+17
+391,994
+(20,180)
+9
+Effective notional amount of written credit derivatives
+32,286
+44,968
+10
+11
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+(71,672)
+(25,408)
+87,195
+139,449
+12
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+373,019
+397,037
+13
+Less: Netted amounts of cash payables and cash receivables of gross
+SFT assets
+14
+CCR exposure for SFT assets
+18,975
+35,125
+15
+Agent transaction exposures
+16
+Total securities financing transaction exposures
+432,162
+Loans to retail and
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+Fax: 021-58792299
+Postcode: 315010
+Tel: 0574-87361162
+Fax: 0574-87361190
+Annual Report 2019
+315
+List of Domestic and Overseas Branches and Offices
+NINGXIA AUTONOMOUS
+REGION BRANCH
+Address: No. 901 Huanghe East
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region, China
+Postcode: 750002
+Tel: 0951-5029200
+Zhejiang Province, China
+Fax: 0951-5042348
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+Postcode: 266071
+Tel: 0532-85809988-621031
+Fax: 0532-85814711
+QINGHAI PROVINCIAL BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Postcode: 810001
+Tel: 0971-6169722/6152326
+Fax: 0971-6152326
+QINGDAO BRANCH
+SHANDONG PROVINCIAL
+West Road, Ningbo City,
+NINGBO BRANCH
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+South Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 210006
+Tel: 025-52858000
+Fax: 025-52858111
+JIANGXI PROVINCIAL BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Province, China
+Postcode: 330008
+LIAONING PROVINCIAL BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+Postcode: 110001
+Address: No. 218 Zhongshan
+Tel: 024-23491600
+INNER MONGOLIA
+AUTONOMOUS REGION
+BRANCH
+Address: No. 10 East 2nd Ring Road,
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region, China
+Postcode: 010060
+Tel: 0471-6940307/6940297
+Fax: 0471-6940048
+Fax: 024-23491609
+Tel: 0431-89569718/89569007
+Fax: 0431-88923808
+BRANCH
+Postcode: 250001
+Postcode: 610020
+Tel: 028-82866000
+Fax: 028-82866025
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Postcode: 300074
+Tel: 022-28400648
+Fax: 022-28400123/28400647
+XIAMEN BRANCH
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Postcode: 361012
+Fax: 0592-5054663
+XINJIANG AUTONOMOUS
+REGION BRANCH
+Address: No. 231 Renmin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Postcode: 830002
+Tel: 0991-5981888
+Fax: 0991-2828608
+TIBET AUTONOMOUS REGION
+BRANCH
+Tel: 0592-5292000
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+SICHUAN PROVINCIAL BRANCH
+Address: No. 45 Zongfu Road,
+Tel: 0755-82246400
+Tel: 0531-66681622
+Fax: 0531-87941749
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Postcode: 030001
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHAANXI PROVINCIAL BRANCH
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Postcode: 710004
+Tel: 029-87602608/87602630
+Fax: 0755-82246247
+Fax: 029-87602999
+Address: No. 9 Pudong Avenue,
+Pudong New District,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58885888
+Fax: 021-58882888
+SHENZHEN BRANCH
+Address: North Block Financial
+Center, No. 5055
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+Postcode: 518015
+SHANGHAI MUNICIPAL BRANCH
+Postcode: 130022
+Jilin Province, China
+JILIN PROVINCIAL BRANCH
+Address: No. 9559 Renmin Avenue,
+Changchun City,
+33
+Total RSF
+234,592
+16,308,694
+34
+Net Stable Funding Ratio (%)
+(*)
+126.70%
+The amount of derivative liabilities shall be recorded for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+314
+1,194,795
+ICBC
+Domestic Institutions
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui Province,
+China
+Postcode: 230001
+Tel: 0551-62869178/62868101
+Fax: 0551-62868077
+BEIJING MUNICIPAL BRANCH
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+List of Domestic and Overseas Branches and Offices
+Postcode: 100031
+473,996
+6,120,143
+32
+50,770
+43,154
+derivative contracts and
+contributions to
+default funds of CCPs
+29
+29
+NSFR derivative assets
+30
+Off-balance sheet items
+NSFR derivative liabilities with
+26,895
+additional variation margin
+posted
+31
+All other assets not included in
+343,706
+396,236
+27,259
+the above categories
+104,038
+134,475*
+Tel: 010-66410579
+Fax: 010-66410579
+CHONGQING MUNICIPAL
+BRANCH
+HAINAN PROVINCIAL BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Postcode: 570203
+Tel: 0898-65303138/65342829
+Fax: 0898-65342986
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Postcode: 050051
+Tel: 0311-66001999/66000001
+Fax: 0311-66001889/66000002
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Postcode: 450011
+Tel: 0851-88620004/88620018
+Fax: 0851-85963911
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+China
+Postcode: 150010
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province, China
+Postcode: 430071
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Postcode: 410011
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+HEILONGJIANG PROVINCIAL
+BRANCH
+Postcode: 550001
+Tel: 0771-5316617
+Fax: 0771-5316617/2806043
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+Postcode: 530022
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+Postcode: 400060
+Tel: 023-62918002
+Fax: 023-62918059
+DALIAN BRANCH
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+Postcode: 116001
+Tel: 0411-82378888
+Fax: 0411-82808377
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+Postcode: 350005
+Tel: 0591-88087819/88087000
+Fax: 0591-83353905/83347074
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Postcode: 730030
+Tel: 0931-8434172
+Fax: 0931-8435166
+GUANGDONG PROVINCIAL
+BRANCH
+Address: No. 123 Yanjiangxi Road,
+Guangzhou City,
+Guangdong Province,
+China
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+Address: No. 31 Jinzhu Mid-Rd.,
+Assets posted as initial margin for
+Lhasa, Tibet Autonomous
+Region
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+Industrial and Commercial Bank
+Tel: +84-28-35208991
+cn
+Email: mai.hoanghau@vn.icbc.com.
+building, 33 Le Duan
+Street, District 1, Ho Chi
+Minh City, Vietnam
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Email: admin@vn.icbc.com.cn
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+of China Limited, Vientiane
+BRANCH
+Industrial and Commercial Bank
+of China Limited, Hanoi BRANCH
+Address: 3rd Floor Daeha Business
+Center, No.360, Kim Ma
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Address: 622 Emporium Tower
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+List of Domestic and Overseas Branches and Offices
+317
+Annual Report 2019
+SWIFT: ICBKPHMM
+Email: info@ph.icbc.com.cn
+Tel: +63-282803300
+Fax: +63-284032023
+32nd Street Corner,
+3rd Ave, BGC, Taguig City,
+Manila 1634, Philippines
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Industrial and Commercial Bank
+of China Limited, Manila BRANCH
+Address: 24F, The Curve,
+Address: Asean Road, Home
+Email: icbcvte@la.icbc.com.cn
+Tel: +7-7272377085
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Email: office@kz.icbc.com.cn
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Fax: +95-019339278
+SWIFT: ICBKMMMY
+Tel: +95-019339258
+Tower, Kyun Taw Road,
+Kamayut Township,
+Yangon, Myanmar
+Address: ICBC Center, Crystal
+Industrial and Commercial
+Bank of China Limited, Yangon
+BRANCH
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+No.358, Unit12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+Tel: +855-23955880
+Street 106, Phnom Penh,
+Cambodia
+Square, No. 19-20,
+Address: 17th Floor, Exchange
+BRANCH
+of China Limited, Phnom Penh
+Industrial and Commercial Bank
+SWIFT: ICBKLALA
+Fax: +856-21258897
+Tel: +856-21258888
+Email: icbckh@kh.icbc.com.cn
+Fax: +7-7272377070
+SWIFT: ICBKKZKX
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+No.393-437, 9 Andar,
+d'Assumpcao,
+Address: Alm. Dr. Carlos
+BRANCH
+of China Limited, Macau
+Industrial and Commercial Bank
+SWIFT: ICBKMOMX
+Fax: +853-28338064
+Tel: +853-28555222
+Edf. Dynasty Plaza, Macau
+Email: icbc@mc.icbc.com.cn
+Fax: +852-26833900
+SWIFT: ICILHKH1
+Tel: +852-26833888
+Email: info@icbci.com.hk
+3 Garden Road, Central,
+Hong Kong
+Address: 37/F, ICBC Tower,
+ICBC International Holdings
+Limited
+Fax: +852-28051166
+SWIFT: UBHKHKHH
+Tel: +852-35108888
+Email: enquiry@icbcasia.com
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Email: icbc@mc.icbc.com.cn
+Fax: +853-28338064
+32nd Floor, Jl. M.H.
+Thamrin No. 81, Jakarta
+Pusat 10310, Indonesia
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+PT. Bank ICBC Indonesia
+Address: The City Tower
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+Industrial and Commercial Bank
+of China Limited, Singapore
+BRANCH
+Fax: +976-77108866
++976-77106677
+Ulaanbaatar, Mongolia
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
+19A Olympic Street,
+Sukhbaatar District-1,
+Shangri-la Office,
+Shangri-la Centre,
+Tel: +853-28555222
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Address: Suite 1108, 11th floor,
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Industrial and Commercial Bank
+of China Limited, Busan BRANCH
+Address: 1st Floor, ABL Life Bldg.,
+# 640 Jungang -daero,
+Busanjin-gu, Busan 47353,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Industrial and Commercial Bank
+of China Limited, Seoul BRANCH
+Address: 16th Floor, Taepyeongno
+Fax: +813-52198525
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Tokyo BRANCH
+Address: 5-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-6512, Japan
+Email: icbctokyo@icbc.co.jp
+Tel: +813-52232088
+Asia-Pacific
+SWIFT: ICBKMOMM
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited Karachi BRANCH
+Address: 15th & 16th Floor, Ocean
+Tower, G-3,
+Block-9, Scheme # 5,
+Main Clifton Road,
+Karachi,
+Address: COCP Fortune Center,
+No. 96 Taipingqiao
+Avenue, Xicheng District,
+Beijing, China
+Postcode: 100032
+Tel: 010-66076588
+Fax: 010-81011513
+ICBC Information and
+Technology Co., Ltd.
+Address: 1/F, Building C,
+Enterprise Office Area,
+Xiongan Citizens Service
+Center, Rongcheng
+County, Xiongan District,
+China (Hebei) Pilot Free
+Trade Zone
+Postcode: 071700
+Tel: 010-58270028
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+ICBC Wealth Management Co.,
+Ltd.
+Address: No.1 Aokang Avenue,
+Bishan District,
+Postcode: 402760
+Tel: 023-85297704
+Fax: 023-85297709
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No.258 Chengnan West
+Road, Pinghu City,
+Zhejiang Province, China
+Postcode: 314200
+Chongqing, China
+Tel: 0573-85139616
+Fax: 0573-85139626
+Tel: 025-58172219
+Province, China
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 650021
+Tel: 0871-65536313
+Fax: 0871-63134637
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Zhejiang Province, China
+Postcode: 310009
+Tel: 0571-87803888
+Fax: 0571-87808207
+Postcode: 211800
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Postcode: 100033
+Tel: 010-66583333
+Fax: 010-66583158
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin, China
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58792288
+ICBC Financial Asset Investment
+Co., Ltd.
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin Road,
+Nanjing City, Jiangsu
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+316
+ICBC
+List of Domestic and Overseas Branches and Offices
+Al Reem Island, Abu Dhabi,
+United Arab Emirates
+P.O. Box 62108
+Address: Addax Tower Offices
+5207, 5208 and 5209,
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+BRANCH
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+P.O.Box: 506856
+United Arab Emirates
+Center, Dubai,
+International Financial
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+Email: dboffice@dxb.icbc.com.cn,
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+BRANCH
+Fax: +91-2271110353
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+G Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66,
+Bank of China Limited, Mumbai
+BRANCH
+Industrial and Commercial
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Pakistan.P.C:75600
+SWIFT: ICBKINBB
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+BRANCH
+Address: Level 20, Burj Doha, Al
+Corniche Street, West Bay,
+Overseas Institutions
+Hong Kong and Macau
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+BRANCH
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong
+Email: icbchk@icbcasia.com
+Tel: +852-25881188
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+318
+ICBC
+SWIFT: ICBKSARI
+Fax: +966-112899879
+Tel: +966-112899800
+Kingdom of Saudi Arabia
+Email: service@sa.icbc.com.cn
+Unit No.:95,
+No: 7277-King Fahad Road
+Al Olaya, Zip Code: 12212,
+Additional No.: 3333,
+Industrial and Commercial Bank
+of China Limited, Riyadh BRANCH
+Address: Level 4&8, A1 Faisaliah
+Tower Building
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+Email: ICBCDOHA@doh.icbc.com.cn
+Tel: +974-44072758
+P.O. BOX: 11217
+Doha, Qatar
+Postcode: 850000
+28
+Tel: 0791-86695682/86695018
+Fax: 0791-86695230
+1,290,981
+26,137
+No.
+Unweighted value by residual maturity
+30 September 2019
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2019
+Unaudited Supplementary Financial Information
+313
+Annual Report 2019
+The amount of derivative liabilities shall be recorded for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+127.54%
+Net Stable Funding Ratio (%)
+240,181
+16,168,093
+Total RSF
+Item
+33
+397,205
+6,408,914
+Off-balance sheet items
+www
+the above categories
+24,884
+332,135
+347,801
+All other assets not included in
+31
+posted
+additional variation margin
+17,139
+66,711
+85,697*
+1,046,966
+No maturity
+< 6 months
+6 months to
+< 1 year
+83,454
+4,831
+14,255
+34,391
+34,115
+Stable deposits
+small business customers:
+10,287,851
+6,979
+43,512
+5,531,933
+5,843,148
+Retail deposits and deposits from
+1,065
+610
+455
+Other capital instruments
+3,115,626
+3,114,561
+273,638
+273,028
+2,841,533
+Regulatory capital
+2,841,988
+Capital:
+5699
+1234
+Available stable funding (ASF) item
+value
+≥ 1 year
+Weighted
+NSFR derivative liabilities with
+30
+NSFR derivative assets
+2229
+under the Basel II
+less than or equal to 35%
+4,363,446
+15,090
+including gold
+2,216
+741
+1,479
+717
+With a risk weight of
+Residential mortgages, of which:
+standardised approach for
+credit risk
+23
+22
+22
+under the Basel II
+less than or equal to 35%
+509,140
+235,104
+346,339
+381,871
+With a risk weight of
+21
+PSES, of which:
+sovereigns, central banks and
+non-financial institutions,
+small business customers,
+8,363,034
+7,683,559
+1,884,342
+1,895,739
+3 Garden Road, Central,
+Hong Kong
+standardised approach for
+Less stable deposits
+credit risk
+Securities that are not in
+default funds of CCPs
+contributions to
+derivative contracts and
+7,169
+8,434
+Assets posted as initial margin for
+28
+including gold
+1,102,696
+31,422
+472,350
+24,884
+332,135
+384,768
+36,967
+Physical traded commodities,
+Other assets:
+ON
+27
+26
+interdependent liabilities
+Assets with matching
+25
+exchange-traded equities
+HQLA, including
+default and do not qualify as
+734,722
+580,912
+247,621
+221,898
+5,296
+24
+5,809,033
+5,135,931
+21,536
+29,257
+Loans and securities:
+18
+Loans to financial institutions
+19
+Loans to financial institutions
+and unsecured loans to
+secured by Level 1 HQLA
+secured by non-Level 1 HQLA
+financial institutions
+17
+20,662,661
+1,251
+706,156
+104,624
+3,452
+3,881,312
+524,328
+1,224,640
+2,478,392
+3,696
+306,019
+13,448,654
+12,703
+210,269
+13,972,341
+92,645
+547,607
+20
+Loans to retail and
+7,276
+1,902,979
+operational purposes
+199,468
+12
+NSFR derivative liabilities
+128,933
+13
+All other liabilities and
+13,850
+914,595
+61,397
+367,585
+other financial institutions for
+412,134
+the above categories
+14
+15
+Total ASF
+Required stable funding (RSF) item
+Total NSFR high-quality
+liquid assets (HQLA)
+16
+Deposits held at
+equities not included in
+2,026,707
+7,528,033
+8,303,612
+3,452
+227,907
+139,537
+667,531
+755,936
+default and do not qualify as
+HQLA, including
+exchange-traded equities
+25
+Securities that are not in
+Assets with matching
+26
+Other assets:
+27
+Physical traded commodities,
+374,455
+30,749
+396,236
+27,259
+5,497,542
+628,804
+interdependent liabilities
+24
+224
+standardised approach for
+credit risk
+small business customers,
+non-financial institutions,
+sovereigns, central banks and
+PSES, of which:
+21
+With a risk weight of
+333,445
+383,520
+247,910
+512,753
+less than or equal to 35%
+under the Basel II
+22
+23
+standardised approach for
+credit risk
+Residential mortgages, of which:
+With a risk weight of
+less than or equal to 35%
+under the Basel II
+1,458
+665
+2,433
+669
+5,030,118
+26,961
+412,134
+496,518
+4,272,541
+18,578
+914,595
+7
+Wholesale funding:
+7,559,760
+6,023,084
+295,735
+303,807
+6,847,050
+8
+61,397
+Operational deposits
+7,262,400
+231,884
+26,661
+4,250
+10,204,397
+9
+13,850
+Other liabilities:
+11
+matching interdependent assets
+Liabilities with
+3,764,722
+3,082,328
+299,557
+269,074
+10
+297,360
+5,791,200
+2,148
+Other wholesale funding
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+the Netherlands
+Email: icbcamsterdam@nl.icbc.com.cn
+Tel: +31-205706666
+Fax: +31-206702774
+SWIFT: ICBKNL2A
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+BRANCH
+Address: 81, Avenue Louise,
+Tel: +32-2-5398888
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam,
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Address: 73 Boulevard Haussmann,
+75008, Paris, France
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+BRANCH
+Fax: +352-26866666
+SWIFT: ICBKLULU
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+1050 Brussels, Belgium
+Email: info@be.icbc.com.cn
+Address: 32, Boulevard Royal,
+Fax: +352-26866666
+Bank of China Limited, Sydney
+BRANCH
+Address: Level 42, Tower 1,
+International Towers,
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Email: info@icbc.com.au
+Tel: +612-94755588
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ2A
+SWIFT: ICBKLULL
+Europe
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Email: icbc@icbc-ffm.de
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+BRANCH
+Fax: +32-2-5398870
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+BRANCH
+SWIFT: ICBKBEBB
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+BRANCH
+Address: Via Tommaso Grossi 2,
+20121, Milano, Italy
+Email: hradmin@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Russia Federation 109028
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+ICBC Turkey Bank Anonim
+Şirketi
+ICBC Austria Bank GmbH
+Address: Kolingasse 4,
+SWIFT: ICBKCHZZ
+Fax: +41-58-9095577
+Tel: +41-58-9095588
+Email: service@ch.icbc.com.cn
+CH-8001, Zurich,
+Switzerland
+Address: Nüschelerstrasse 1,
+Zurich BRANCH
+Industrial and Commercial Bank
+of China Limited, Beijing,
+SWIFT: ICBKCZPP
+Fax: +420-237762899
+Tel: +420-237762888
+Email: info@cz.icbc.com.cn
+Na Strži 1702/65,
+14000 Prague 4 - Nusle,
+Czech Republic
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Address: 12F City Empiria,
+SWIFT: ICBKTRIS
+Tel: +90-2123355011
+Email: gongwen@tr.icbc.com.cn
+No:13 34398 Sariyer,
+İSTANBUL
+Serebryanicheskaya
+embankment, Moscow,
+Address: Building 29,
+company)
+Bank ICBC (joint stock
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Address: Paseo de Recoletos, 12,
+28001, Madrid, España
+Email: icbcspain@es.icbc.com.cn
+Tel: +34-902195588
+Fax: +34-912168866
+SWIFT: ICBKESMM
+Address: Plac Trzech Krzyży 18,
+00-499, Warszawa, Poland
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+SWIFT: ICBKPLPW
+ICBC (London) PLC
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+BRANCH
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Industrial and Commercial
+Bank of China Limited, London
+BRANCH
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: londonmarketing@icbcstandard.com
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Annual Report 2019
+319
+List of Domestic and Overseas Branches and Offices
+Email: admin@icbclondon.com
+Industrial and Commercial
+Address: Maslak Mah. Dereboyu,
+Fax: +965-22281799
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Email: bxgw@br.icbc.com.cn
+Tel: +55-1123956600
+SWIFT: ICBKBRSP
+ICBC PERU BANK
+Address: Calle Las Orquideas 585,
+1090 Vienna, Austria
+Oficina 501, San Isidro,
+Lima, Peru
+Email: perugw2@pe.icbc.com.cn
+Tel: +51-16316801
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Fax: +51-16316803
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Address: Blvd. Cecilia Grierson 355,
+(C1107 CPG)
+Buenos Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+ICBC Investments Argentina
+S.A. Sociedad Gerente de
+Fondos Comunes de Inversión
+Address: Blvd. Cecilia Grierson 355,
+Piso 14, (C1107CPG)
+CABA, Argentina
+Email: alpha.sales@icbc.com.ar
+Tel: +54-1143949432
+Inversora Diagonal S.A.
+Address: Florida 99, (C1105CPG)
+CABA, Argentina
+Tel: +54-1148202200
+Africa
+SWIFT: ICBKPEPL
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Del. Cuauhtemoc,
+Ciudad de Mexico
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma 250,
+Piso 18, Col. Juarez,
+C.P.06600,
+Email: generaldept@at.icbc.com.cn
+Tel: +43-1-9395588
+SWIFT: ICBKATWW
+Americas
+Industrial and Commercial Bank
+of China Limited, New York
+BRANCH
+Address: 725 Fifth Avenue,
+20th Floor, New York,
+NY 10022, USA
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-2128387799
+Fax: +1-2128386688
+SWIFT: ICBKUS33
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 1633 Broadway,
+28th Floor, New York,
+NY 10019
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+Fax: +1-2122193211
+SWIFT: ICBKUS3N
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway,
+28th Floor, New York,
+NY, 10019, USA
+Email: info@icbkfs.com
+Tel: +1-2129937300
+Fax: +1-2129937349
+SWIFT: ICBKUS3F
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario,
+M5H 2R2, Canada
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Address 1: 47 Price Drive,
+SWIFT: ICBKKWKW
+Constantia, Cape Town,
+South Africa, 7806
+Rosebank,
+Address 2: T11, 2nd Floor East,
+30 Baker Street,
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China Limited, Kuwait
+BRANCH
+Address: Building 2A(Al-Tijaria
+Tower), Floor 7&8,
+Email: info@kw.icbc.com.cn
+Tel: +965-22281777
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+www.icbc.com.cn, www.icbc-ltd.com
+Al-Soor Street, Al-Morqab,
+Block3, Kuwait City,
+Kuwait
+ICBC
+Johannesburg, Gauteng,
+中國北京市西城區復興門內大街55號 郵編:100140
+Post Code: 100140
+2 Caddesi
+Email: icbcafrica@afr.icbc.com.cn
+Tel: +27-117215950
+South Africa, 2196
+320
+ICBC
+呂
+Fax: +27-713301141
+At the end of 2019, the number of corporate customers increased by 1,065 thousand over the end of the previous
+year to 8,098 thousand. The balance of corporate loans reached RMB9,955,821 million, representing an increase of
+RMB536,927 million or 5.7%. The balance of corporate deposits hit RMB12,028,262 million, representing an increase
+of RMB547,121 million or 4.8%.
+Manufacturing
+52,957
+postal services
+100.0
+Transportation, storage and
+Unit: RMB100 millions
+Corporate Deposits
+Domestic Corporate Loans by Industry
+The Bank explored the new growth model of corporate deposits, and accelerated the pilot promotion of innovative
+products, to meet the customized financial needs of corporate customers. New technologies such as big data and
+visualization were innovated and adopted to build a fund transfer map and promote the research and implementation
+of closed-loop management of corporate deposit funds. By strengthening research and analysis, the Head Office and
+branches jointly established a normalized competitiveness analysis mechanism for interbank corporate deposits, to
+further enhance the Bank's competitiveness in corporate deposits. Besides, the integrated marketing of corporate
+customers was intensified, to facilitate the steady development of corporate deposits.
+ICBC
++
+22,977,655
+21,408,934
+100.0
+Repurchase Agreements
+Repurchase agreements were RMB263,273 million, a decrease of RMB251,528 million or 48.9% from the end of last year,
+mainly because the Bank appropriately adjusted the size of funds raised based on its internal and external liquidity status.
+Shareholders' Equity
+As at the end of 2019, shareholders' equity amounted to RMB2,692,003 million in aggregate, RMB347,120 million or
+14.8% higher than that at the end of the previous year. Equity attributable to equity holders of the parent company
+recorded an increase of RMB346,185 million or 14.9% to RMB2,676,186 million. Please refer to the "Financial Statements:
+Consolidated Statement of Changes in Equity" for details.
+For details on off-balance sheet items, please refer to "Note 45. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 46. to the Financial Statements: Designated Funds and Loans".
+Analysis on Statement of Cash Flows
+Net cash inflows from operating activities amounted to RMB694,521 million, representing a decrease of RMB29,612 million
+as compared to last year, mainly attributable to cash outflows resulted from the increase of reverse repurchase agreements
+which resulted in cash inflows in the previous year. Specifically, cash outflows of operating assets rose by RMB834,528 million
+and cash inflows of operating liabilities increased by RMB789,710 million.
+Net cash outflows from investing activities amounted to RMB875,967 million. Specifically, cash inflows were
+RMB1,627,653 million, representing an increase of RMB126,265 million, mainly due to the increased cash received from the
+recovery of financial investment; and cash outflows were RMB2,503,620 million, representing an increase of RMB270,487
+million, mainly due to the increase in cash payment for financial investment.
+Net cash inflows from financing activities amounted to RMB112,874 million, of which, cash inflows were
+RMB1,290,731 million, mainly due to the proceeds from the Bank's issuance of debt securities and other equity instruments;
+and cash outflows were RMB1,177,857 million, mainly due to the repayment of debt securities, redemption of USD and RMB
+offshore preference shares and distributed dividend payment.
+32
+Discussion and Analysis
+BUSINESS OVERVIEW
+Corporate Banking
+The Bank further promoted the "full-spectrum corporate" banking strategy. With the focus on national strategies, it
+actively coordinated regional development and supported poverty alleviation and rural rejuvenation, to serve the country's
+comprehensive opening-up strategy. The optimization and adjustment of credit structure was accelerated, to continuously
+improve the quality and efficiency of services for the real economy; new customers were expanded positively, and the
+quality of existing customers was improved, to consolidate the customer base; besides, the Bank could effectively meet the
+diversified financial needs of customers by means of comprehensive services such as bond underwriting, agency investment
+of wealth management products, syndicated distribution, and debt-for-equity swaps.
+The Bank advanced the adjustment of credit structure continuously, and accelerated the adjustment of "One plus
+Three" credit layout, with "One" referring to the basic industrial sectors, and "Three" referring to a triple of sectors,
+i.e. happiness industries, advanced manufacturing and connectivity of the internet of things, made notable progress.
+Effective support was given to the construction of infrastructure and major projects that could "make up for
+shortcomings", to highlight the support for implementation of major strategies such as high-quality development of
+manufacturing, private enterprises and inclusive finance, as well as national strategic regions.
+24.9%
+Upgraded Comprehensive Inclusive Financial Services in An All-around Manner
+The Bank accelerated the innovation of custody products. As one of the first batch of banks that obtained the
+depository and custodian qualification of Chinese Depository Receipt ("CDR") under the "Shanghai-London Stock
+Connect" programme, it successfully conducted the first CDR depositary business and the first domestic GDR
+underlying securities custody business. Besides, the Bank ranked first among peers in terms of the number and scale of
+custody products under the "China-Japan ETF Connectivity" scheme.
+Inclusive Finance
+The Bank upgraded its inclusive financial services in an all-around manner. Taking digitalization as an important means,
+it built a one-stop, three-dimensional and integrated financial service system through online and offline collaboration,
+innovated inclusive financial products, and endeavoured to create a benchmark in terms of integrated financial services for
+small and micro enterprises.
+Annual Report 2019
+33
+Discussion and Analysis
++
+4
+The Bank constantly facilitated the channel building for online and offline integrated services, to improve the inclusive
+financial product system, and enhance the coverage and convenience of inclusive financial services. Product updates
+were accelerated by reliance on FinTech, and a comprehensive inclusive financial service system was constructed
+with the focus on the ICBC Small and Micro Finance Platform and three financing product categories including Quick
+Lending for Operation, Online Revolving Loan and Online Supply Chain. The Bank also further strengthened the
+construction of specialized inclusive financial institutions to keep improving the service quality and efficiency of small
+and micro enterprise banking centers. By the end of 2019, there were 288 small and micro enterprise banking centers
+across the Bank.
+The Bank continued to roll out serial campaigns to bring inclusive financial services to small and micro enterprises. It
+established in-depth cooperative relationships with specialized markets, E-commerce platforms and leading enterprises,
+and signed agreements on deepening cooperation with local governments, industry associations and industrial parks.
+Besides, the Bank actively provided cross-border matchmaking services for small and micro enterprise customers, and
+served China's Belt and Road Initiative by virtue of domestic and overseas branches.
+At the end of 2019, the balance of inclusive loans to small and micro enterprises amounted to RMB471,521 million,
+representing an increase of RMB161,407 million or 52.0% from the year beginning. There were 423 thousand
+micro and small enterprise loan customers, up 153 thousand. The average interest rate of loans granted in the year
+decreased by 0.43 percentage points over the prior year to 4.52%.
+The Bank actively implemented the policies on financial services for agriculture, rural areas and farmers, and set up
+inclusive finance promotion committees at the levels of the Head Office and tier-one branches, to promote financial
+services for agriculture, rural areas and farmers across the board. At the end of 2019, inclusive farmer business
+loans and inclusive small and micro enterprise agriculture-related loans totaled RMB111,576 million, representing
+an increase of RMB22,442 million or 25.2% from the year beginning. There were 83 thousand loan customers, up
+28 thousand.
+On 17 December 2019, the Bank held the first "ICBC
+Small and Micro Customer Festival" in Beijing, released the
+"Thousands Small and Micro Enterprise Growth Plan", and
+comprehensively introduced inclusive financial services 2.0
+with "financing, intelligence and business integration" as
+the core, so that it could devote itself to better serving the
+real economy, speed up its own business transformation,
+and actively explore a sustainable inclusive finance
+development mode with distinctive characteristics.
+CBC 中国工商银行
+2.3%
+怀梦想剑未来
+2199121781 PH 29
+The Bank has always been working with small and micro enterprises to make progress together, and in recent years it has
+further accelerated the development of inclusive finance. It organized the "ICBC Small and Micro Customer Festival" and
+related supporting activities to integrate the Group's advantageous resources, and gave more financial support, so as to
+work hand in hand with entrepreneurs and help them realize "small dreams" and create a "glorious future".
+At the press conference, the Bank also launched the "Thousands Small and Micro Enterprise Growth Plan", in which,
+it would take three years to preferentially select and support 10,000 small and micro enterprises with "products in the
+market, potentiality in the industry, and credibility among enterprises", and provide them with precision services, so
+as to cultivate a group of small and micro customers to become business leaders in the industry segments, develop a
+batch of influential and well-known small and micro enterprise brands, support a lot of small and micro enterprises to
+develop into medium-sized ones, and drive thousands of millions of small and micro customers to grow together.
+In order to improve inclusive financial services in an all-around manner, the Bank introduced "Inclusive Financial
+Services 2.0" with "financing, intelligence and business integration" as the core based on the "Inclusive Financial
+Services 1.0". In terms of "financing", "Employment Loan" was introduced to wage-paying companies for the
+purpose of meeting their employment and payroll needs and benefiting millions of worker families; over RMB150
+billion of "Cross-border Loan" was granted to 150,000 small and micro import/export enterprises; with the help
+of "Cloud Quick Loan", small and micro customers realized digital transformation. In respect of "intelligence",
+campaigns such as "Thousands of Experts Entering Small and Micro Enterprises" and entrepreneurship training camps
+would be carried out extensively, the "E-Intelligence think tank" consulting platform would be opened to all small and
+micro customers, and expert services would be combined with information tools to help small and micro customers
+make decisions scientifically. With regard to "business integration", the Bank would continuously give full play to its
+advantages in institutions and customers, and help small and micro customers realize business development.
+34
+ICBC
+Discussion and Analysis
+Institutional Banking
+The Bank made positive progress in cooperation with the government. It propped up the e-reform of income and
+expenditure accounts of national treasury, enhanced the capabilities of serving fiscal departments and budgetary
+units at all levels, and deeply explored the growth potential of institutional customers in the fields of medical care,
+education, labor union, religion, public resources, land and resources, housing and construction. The "intelligent
+government affairs" system was innovated and promoted, to push forward the implementation of multi-engine
+business cooperation structure consisting of "1 government affairs portal, 12 key extension areas and 22 value-added
+services".
+The Bank carried forward the cooperation with other banks on a steady footing. It newly signed comprehensive
+strategic cooperation agreements with key customers at the Head Office level such as China Development Bank,
+stock exchanges in Shanghai and Shenzhen and China Reinsurance (Group) Corporation, and signed MOUS on bank-
+securities cooperation in STAR market with head brokers to jointly propel the development of the real economy and
+capital market. Bill broking business was launched as a pilot move, and the first bill broking business in the market was
+successfully handled under the Bill Discounting Link.
+The Bank successfully explored a fresh model of poverty alleviation for the animal husbandry, with the combination
+of banks, futures companies and insurers. It innovatively launched customized products such as feed cost insurance,
+meteorological index insurance for green peppercorn and agricultural insurance for walnut planting, to explore and
+implement a long-term mechanism for precision poverty alleviation by virtue of financial services.
+Settlement and Cash Management
++
+The Bank improved its corporate payment and settlement system, to serve diversified settlement scenes. It advanced
+the construction of six product lines including account management, liquidity management, trade finance, risk
+management, investment and wealth management, collection and payment management, to provide comprehensive
+service solutions with the focus on customers.
+首届工行小微客户节开幕式
+The Bank strengthened the application and promotion of advantageous platforms and continued to consolidate
+its leading advantages in the field of corporate payment. It promoted its global cash management platform, and
+deepened its global business by virtue of the Bank's international strategy, to build a global cash management
+business system. Besides, the "ICBC Pooling" financial service platform was generalized, so that financial services could
+be seamlessly embedded into the platform and connect with corporate financial needs, thus realizing an effective
+customer acquisition model via "transaction plus finance".
+2019
+Time deposits
+1.0%
+16.9%
+Total
+50,760
+Leasing and commercial services
+13.9%
+46,357
+Production and supply of
+electricity, heat, gas and water
+10.9%
+Water, environment and public
+10.6%
+utility management
+Real estate
+Demand deposits
+7.5%
+4.7%
+67,326
+64,051
+60,698
+Construction
+2.9%
+Science, education, culture
+and sanitation
+2.4%
+Mining
+2.0%
+2017
+2018
+Lodging and catering
+Others
+Wholesale and retail
+The Bank attracted a group of internationally influential multilateral financial organizations and sovereign fund
+customers such as the International Monetary Fund (IMF), which further enhanced the Bank's brand reputation in the
+international community.
+At the end of 2019, the Bank maintained 9,443 thousand corporate settlement accounts, representing an increase
+of 13.5% over the end of the previous year, and the volume of RMB-denominated corporate settlements reached
+RMB2,399 trillion in the year. There were 1,426 thousand cash management customers, and 7,973 global cash
+management customers, representing an increase of 9.5%.
++
+Private Banking
++
+Targeting at achieving a comprehensive and leading "No.1 Private Bank", the private banking business consolidates
+two major advantages in brand and scale that provides private banking customers with competitive financial products
+selected throughout the market with a full range of non-financial services, to satisfy customers' diversified needs and
+lift their satisfaction on all fronts.
+The Bank rolled out exclusive wealth management products such as "Tian Li Bao" and "Quan Xin Equity", and also
+introduced exclusive insurance products including "Wealth Enjoy", to meet the diversified and personalized needs of
+private banking customers. A premium version of ICBC Mobile Private Banking Online APP was launched to expand the
+types of online services; and its intelligent investment advisory system was improved to make asset allocation services
+in a more professional and convenient way.
+The Bank was awarded the "Best Private Bank in China" by The Banker for two straight years; and it was also awarded
+the "Best (Mega) Private Bank in China" by The Asian Banker for three consecutive years.
+At the end of 2019, the Bank had 90,224 personal customers with financial assets of RMB8 million and above,
+an increase of 9,504 customers or 11.8% from the end of last year. The assets under management totalled
+RMB1,554.7 billion, an increase of RMB161.1 billion or 11.6%. As at the end of 2019, the number of personal
+customers with the average monthly/daily financial assets of RMB6 million and above for the past six months was
+158,156, an increase of 12,085 customers or 8.3% from the end of last year; and the assets under management
+totalled RMB1,895.4 billion, an increase of RMB277.4 billion or 17.1%.
+Annual Report 2019
+37
+Discussion and Analysis
+Bank Card Business
++
++
++
+In 2020, ICBC carries the important quest of establishing the "No.1 Personal Bank". The Bank will continue on bravely
+and with persistence, and strive to succeed in becoming the "No.1 Personal Bank"!
+The Bank promoted debit card online application service. To accelerate the innovation of debit card products, it
+successively launched products such as "Kylin Card", "Forbidden City Card", "Cute Baby Card", "Cute Pet Card"
+"University Graduation Season Card" and "Kid Painting Card".
+The Bank released the ICBC e Life 3.0, and upgraded personalized and intelligent integrated services, to realize the
+aggregation of nine intelligent scenes covering "shopping, catering, housing, travel, entertainment, learning, medical
+care, urban service and poverty alleviation".
+At the end of 2019, the Bank issued 1,072 million bank cards, representing an increase of 80.93 million cards from
+the end of the previous year. Specifically, 913 million debit cards and 159 million credit cards were issued. Overdraft
+balance of credit cards rose by RMB51,465 million or 8.2% from the end of previous year to RMB677,933 million. In
+2019, bank cards registered a spending volume of RMB6.93 trillion, including RMB3.71 trillion of spending with debit
+cards and RMB3.22 trillion of spending with credit cards.
+Asset Management Services
+The Bank carried forward the implementation of the mega asset management strategy in an in-depth manner, pushed
+forward the transformation of asset management business and products in a steady manner and comprehensively enhanced
+investment management and research capabilities. It established a mega asset management business system allowing
+allocation of capital in all markets and value creation across the whole value chain by relying on the strength of the Group's
+asset management, custody and pension businesses as well as the functions of its comprehensive subsidiaries specialized
+in fund, insurance, leasing, investment banking and wealth management, to provide diversified, integrated and specialized
+services for customers.
+Wealth Management Services
+The Bank improved its product system structure and successfully created a number of main product lines such as
+"Tian Li Bao", "Xin De Li", "Xin Wen Li," "Xin Tian Yi", "Bo Gu Tong Li" and "Quan Xin Equity".
+=
+The Bank actively facilitated the construction of its wealth management subsidiary
+- ICBC Wealth Management, to
+promote the coordinated development of the subsidiary and the parent bank in eight aspects including channel sales,
+product layout, project recommendation, risk management and control, system operation, assessment and evaluation,
+regional wealth management, and overseas development.
+At the end of 2019, the balance of non-principal-guaranteed wealth management products stood at RMB2,642,057 million.
+Asset Custody Services
++
+4
+Facing the changes in the external regulatory environment, the Bank achieved sustained and stable development of
+custody business by actively seizing the development opportunities in the occupational annuity, pension insurance
+fund, enterprise annuity, public offering fund and insurance markets, thus further consolidating its status as the largest
+custodian bank in the country.
+The Bank's credit card products were further diversified, with the introduction of "Forbidden City Card", "Women's
+Card", "National Table Tennis Card" and "ICBC Peony Black Card. It carried out "ICBC I Go" campaigns covering
+catering, shopping, travel and other industries at home and abroad.
+International Settlement and Trade Finance
+The transformation to intelligent retail baking advanced continuously, including the drawing of blueprints, building
+of frameworks and establishment of mechanisms, further consolidating the Bank's foundation for personal banking
+business development and lifting the customer attraction and maintenance level. ICBC made new progress in
+expanding customers online and offline. With the focus on "opening outlets on the Internet", the ICBC e Wallet
+gained over 10 million customers online, which strongly boosted the effective development of ETC activities. The
+Bank built the tailor-made intelligent customer service solutions, providing individualized products and services for
+customers. The "Intelligent Experience" project was kicked off successfully, promoting the customer complaints to be
+transformed from passive response to active management.
+Under the strategic guidance of the "No.1 Personal Bank", the Bank's various personal banking businesses
+made historic achievements during the reporting period. The total amount of personal financial assets reached
+RMB14.6 trillion with the increments exceeding RMB1 trillion, of which, the balance of RMB savings deposits topped
+RMB10 trillion. The daily average and time-point increments hit the historical record, topping RMB1 trillion. The
+balance of the Bank's personal loans reached RMB6.4 trillion, increased by RMB747,050 million over the end of last
+year. Both NPLs and NPL ratio of personal loans dropped for three consecutive years and the asset quality of residential
+mortgages achieved the best level for the past ten years. Meanwhile, for the purposes of adapting to market changes
+and implementing the state's policies, ICBC actively promoted the tax deduction with interest of residential mortgages,
+LPR reform and other major work relating to the people's livelihood with regard to personal loans. Innovative initiatives
+such as Al ICBC Fortune Fund Index, agency auto insurance and featured debit cards jointly pushed forward the rapid
+growth in income on personal intermediary business.
+The Bank enhanced the cross-border trade finance service on all fronts. It actively cooperated with the General
+Administration of Customs to fully participate in the construction of financial service function projects for the "single
+window" international trade platform, so as to provide domestic import and export enterprises with financial services
+including one-stop cross-border settlement and financing.
+The Bank strengthened the innovation of trade finance products. It reinforced the special management of forfaiting
+business, and promoted the interbank cooperation. Besides, non-financial guarantee business was vigorously boosted,
+to propel the healthy and rapid development of the bank-wide guarantee business.
+In 2019, domestic branches disbursed an aggregate of USD50,895 million in international trade finance. International
+settlements amounted to USD2,988,556 million, of which USD1,205,334 million was handled by overseas institutions.
+Annual Report 2019
+35
+Discussion and Analysis
+Investment Banking
++
+The Bank continued to elevate the quality and efficiency of investment banking in serving the real economy and its
+capability in financial risk prevention. It stepped up the M&A loan support in key fields such as listed companies,
+industry M&A, reform of state-owned enterprises and the Belt and Road Initiative. It actively explored the new
+collaboration mode for investment/lending business. The ICBC New Energy (Technical Innovation) Fund and ICBC New
+Energy (Debt-for-equity) Fund were established in batches, to enhance the support for strategic emerging industries
+and private economy, and promote the development of technical innovation enterprises. The Bank drove the social
+market to participate in market-oriented debt-for-equity investments, and pushed forward debt restructuring of
+troubled enterprises. It positively moved forward financial services and risk prevention work, and lifted the capability
+of investment banking means in mitigating financial risks. It highlighted the functional and differential positioning
+of structured financing products and intensified efforts in promoting debt financing business such as quasi perpetual
+bonds. The Bank also strengthened active management and investment capacity of asset securitization.
+The Bank further upgraded its financial advisory service product system. Five major functions including Research,
+Expert, Information, Forum and Consulting were put into use on the E-Intelligence think tank; the ICBC e Security
+system could provide big risk data services to effectively prevent and control telecommunications fraud; while the
+Reputation e Credit system could render market risk management cloud services and country risk reporting services to
+interbank customers.
+In 2019, the Bank acted as the lead underwriter for 1,802 Chinese bond projects with a total value of
+RMB1,517,350 million, preserving its No. 1 position in the market in terms of domestic leading underwriting scale.
+Personal Banking
+In 2019, focusing on the strategic objective of building the "No.1 Personal Bank", the Bank developed new retail banking
+models, services and channels which were more intelligent, to further enhance its market competitiveness and achieve rapid
+growth of core business. At the end of 2019, personal financial assets totaled RMB14.6 trillion. The personal deposits arrived
+at RMB10,477,744 million, representing an increase of RMB1,041,326 million or 11.0%. The Bank's personal loans stood at
+RMB6,383,624 million, an increase of RMB747,050 million or 13.3%. Its personal customers increased by 43.29 million to
+650 million, including 14.01 million personal loan customers, up 0.72 million.
+The size of personal customers broke the threshold of 650 million, with the new customers and net increase hitting
+the best level in the past six years. The number of personal mobile banking customers in ICBC Mobile reached 361
+million, with the increment creating a new high in the past three years. ICBC Mobile platform tailored exclusive version
+services for customer groups such as elders, students, small and micro business owners and private banking customers,
+building the individualized service system in an all-round manner.
++
+4
+4
+4
+The Bank promoted the online service of "ICBC e Wallet" and provided customers with financial services such as
+settlement, wealth management and financing in cooperation with JD and Vanke. It also improved the intelligent
+services of offline outlets, to boost their intelligent transformation.
+Targeting at different types of customers, the Bank launched a series of exclusive deposit products such as "ICBC
+Lucky Money" and "Fu Man Yi". It also successively introduced themed CDs including "Suzhou Expo CD" and "Panda
+CD", to continuously deepen the innovation of special CD products.
+The Bank strengthened the cooperation with large developers to steadily advance the development of personal loan
+business. It accelerated product innovation and promotion, improved the function of loans pledged with personal
+financial assets, and expanded personal real estate mortgages, consumption and operating portfolio loans.
+The Bank duly made strategic adjustments according to market changes, to further the transformative development
+of agency sales business. It selected fund products with excellent performance, to meet the diversified investment
+needs of customers. In addition, marketing activities for insurance agency sales such as "AXA Day" and "Huaxia Day"
+were carried out. In 2019, funds under agency sales amounted to RMB589.2 billion, sales of treasury bonds under
+agency arrangement were valued at RMB76.6 billion, and personal insurance products under agency sales reported at
+RMB132.6 billion.
+The Bank was awarded the "Best Mega Retail Bank in China" and "Best Data Analysis Financial Product" by The Asian
+Banker. The Bank also ranked the first place in the global banking brands by retail banking issued by the UK's Brand
+Finance.
+36
+ICBC
+Discussion and Analysis
+Started to Build the "No.1 Personal Bank"
+In conformity with the current macroeconomic development trend and in combination with the business development
+laws of commercial banks, the Bank proposed a strategy of building the "No.1 Personal Bank" in 2019, pointing out
+the direction for the future development of personal banking business. Adhering to "customer-centric", the strategy
+strives to achieve the overall improvement of personal banking business in terms of market competitiveness, value
+contribution, risk control and customer satisfaction, and leads the market on a comprehensive, sustainable and high-
+quality basis.
+4
+4.2
+12.6
+4.1
+Amount
+Percentage
+Percentage
+(%)
+Amount
+At 31 December 2019
+At 31 December 2018
+In RMB millions, except for percentages
+Note: (1) Refers to overdue bonds.
+Total
+Over 5 years
+1 to 5 years
+3 to 12 months
+Less than 3 months
+Undated (1)
+Remaining maturity
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+In terms of distribution by issuers, government bonds increased by RMB726,341 million or 18.0% over the end of last year;
+central bank bonds decreased by RMB10,767 million or 32.9%; policy bank bonds went down by RMB122,210 million
+or 15.8%; and other bonds increased by RMB220,410 million or 18.4%. In order to support the development of the real
+economy, the Bank stepped up the allocation to government bonds and high-quality corporate bonds based on the bond
+market supply and bond investment value.
+(%)
+Discussion and Analysis
+10
+54
+30.0
+1,812,718
+32.8
+2,252,019
+54.9
+3,319,674
+47.6
+3,267,720
+10.9
+660,914
+14.7
+1,007,366
+4.2
+255,716
+4.9
+335,735
+0.0
+0.0
+38
+4.04
+25 June 2022
+Benchmark interest
+plus 0.59%
+17 April 2020
+25 February 2020
+Policy bank bonds 2015
+9,230
+4.25
+13 April 2022
+Policy bank bonds 2015
+9,040
+4.21
+13 April 2025
+Notes: (1)
+(2) The bonds had been repaid on the maturity date.
+Excludes stage 1 allowance for impairment losses set aside in accordance with the expected credit loss model.
+(3)
+Benchmark interest rate refers to the interest rate of one-year time deposits applied by PBC on the value date of each
+interest-bearing period.
+Liabilities
+As at the end of 2019, total liabilities reached RMB27,417,433 million, an increase of RMB2,062,776 million or 8.1%
+compared with the end of last year.
+LIABILITIES
+rate (3)
+9,450
+Policy bank bonds 2010 (2)
+4.20
+Policy bank bonds 2010
+11,050
+3.51
+27 July 2020
+Policy bank bonds 2019
+10,903
+3.47
+20 September 2029
+6,862,850
+Policy bank bonds 2011
+4.62
+Policy bank bonds 2010 (2)
+9,700
+3.65
+22 February 2021
+26 March 2020
+Commercial bank bonds 2017
+9,500
+10,505
+100.0
+6,049,076
+100.0
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+In RMB millions, except for percentages
+Allowance
+for
+Nominal
+Annual
+impairment
+Bond name
+value
+interest rate (%)
+Maturity date
+losses (1)
+Policy bank bonds 2019
+19,620
+3.49
+8 January 2029
+Policy bank bonds 2012
+As at the end of 2019, the Group held RMB1,387,779 million of financial bonds', including RMB652,522 million of policy
+bank bonds and RMB735,257 million of bonds issued by banks and non-bank financial institutions, accounting for 47.0%
+and 53.0% of financial bonds, respectively.
+Discussion and Analysis
+29
+Annual Report 2019
+805,347
+Percentage
+(%)
+11.9
+Financial investments measured at fair value
+through other comprehensive income
+Financial investments measured at amortised
+cost
+1,476,872
+19.3
+1,430,163
+11,400
+21.2
+68.1
+4,519,182
+66.9
+Total
+7,647,117
+100.0
+6,754,692
+100.0
+5,208,167
+In RMB millions, except for percentages
+(%)
+At 31 December 2019
+90.7
+6,221,395
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2019
+At 31 December 2018
+In RMB millions, except for percentages
+Total
+Other foreign currency bonds
+USD-denominated bonds
+RMB-denominated bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+5,547,079
+91.7
+439,219
+6.4
+962,078
+Financial investments measured at fair value
+through profit or loss
+Amount
+Item
+At 31 December 2018
+In RMB millions, except for percentages
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+In terms of currency structure, RMB-denominated bonds rose by RMB674,316 million or 12.2% over the end of last year;
+USD-denominated bonds added by RMB83,185 million or 23.4%; other foreign currency bonds increased by an equivalent
+of RMB56,273 million or 38.6%. During the reporting period, the Bank improved the investment portfolio structure of
+foreign currency bonds, spread portfolio risks and properly increased the investment in bonds denominated in other
+currencies with a focus on the investment in USD-denominated bonds.
+Percentage
+100.0
+100.0
+6,862,850
+2.4
+145,963
+2.9
+202,236
+5.9
+356,034
+6,049,076
+At 31 December 2019
+At 31 December 2018
+Item
+236,797
+1.1
+222,461
+1.0
+22,977,655
+100.0
+21,408,934
+100.0
+Note: (1) Includes outward remittance and remittance payables.
+Annual Report 2019
+31
+Discussion and Analysis
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2019
+Percentage
+1.3
+268,914
+1.0
+234,852
+Time deposits
+Demand deposits
+Subtotal
+Other deposits(1)
+Accrued interest
+Total
+6,149,654
+26.8
+Percentage
+5,505,236
+4,328,090
+18.8
+3,931,182
+18.4
+10,477,744
+45.6
+9,436,418
+44.1
+25.7
+Personal deposits
+Item
+(%)
+Central China
+3,324,189
+14.5
+3,064,753
+14.3
+Western China
+3,801,033
+16.5
+3,591,835
+16.8
+Northeastern China
+1,184,289
+5.2
+1,105,344
+5.2
+Overseas and others
+947,181
+27.7
+5,922,781
+27.0
+6,212,525
+Amount
+(%)
+Head Office
+45,507
+0.2
+56,304
+0.3
+Yangtze River Delta
+Amount
+4,474,455
+4,032,866
+18.8
+Pearl River Delta
+2,988,476
+13.0
+2,726,705
+12.7
+Bohai Rim
+19.5
+908,346
+53.6
+52.3
+742,875
+2.7
+617,842
+2.4
+Others
+Total liabilities
+1,167,057
+27,417,433
+4.2
+998,585
+4.0
+100.0
+25,354,657
+100.0
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bonds.
+30
+ICBC
+Discussion and Analysis
+Debt securities issued
+2.0
+Amount
+514,801
+Amount
+Percentage
+(%)
+Percentage
+Amount
+(%)
+Due to customers
+22,977,655
+83.8
+2,368
+2,349
+21,408,934
+Due to banks and other financial institutions
+2,266,573
+8.3
+1,814,495
+7.2
+Repurchase agreements
+263,273
+1.0
+84.4
+11,481,141
+2,225
+2,689
+Due to Customers
+At 31 December 2018
+Amount
+Percentage
+(%)
+Corporate deposits
+Time deposits
+5,295,704
+23.0
+5,076,005
+23.7
+Demand deposits
+6,732,558
+29.3
+6,405,136
+29.9
+Subtotal
+12,028,262
+In RMB millions, except for percentages
+Accrued interest
+Other deposits
+Corporate deposits Personal deposits
+Due to customers is the Bank's main source of funds. As at the
+end of 2019, due to customers was RMB22,977,655 million,
+RMB1,568,721 million or 7.3% higher than that at the end of the
+previous year. In terms of customer structure, corporate deposits increased
+by RMB547,121 million or 4.8%; and personal deposits increased by
+RMB1,041,326 million or 11.0%. In terms of maturity structure, time
+deposits increased by RMB864,117 million or 8.2%, while demand
+deposits increased by RMB724,330 million or 7.0%. In terms of currency
+structure, RMB deposits stood at RMB21,509,155 million, an increase of
+RMB1,449,862 million or 7.2%. Foreign currency deposits were equivalent
+to RMB1,468,500 million, an increase of RMB118,859 million or 8.8%.
+Due to Customers
+Unit: RMB100 millions
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+Item
+At 31 December 2019
+Percentage
+Amount
+2,885
+(%)
+104,777
+94,364
+85,689
+120,283
+114,811
+107,055
+2018
+2019
+2017
+ICBC
+The Bank deepened the innovation and reforms of systems and mechanisms, and continuously enhanced the overall
+level of mega asset management in the statistics, products, investment research, sales and risk control.
+Pension Services
+On the morning of 8 November 2019, ICBC hosted the ECOS launch event in
+Beijing. Designed to support the transformation and development of the Bank in
+the new era with cutting-edge financial technology, the smart banking ecosystem
+therefore opened a new chapter in the Bank's course of building a smart bank.
+ICBC
+H
+ECOS 1.0
+智慧银行生态系统
+Released ECOS
+Discussion and Analysis
+41
+Annual Report 2019
+1 Corresponding to the Financial Technology Department of the Head Office, Business Research & Development Center, Data Center,
+Software Development Center, ICBC Information and Technology Co., Ltd., and FinTech Research Institute.
+Releasing the ECOS and opening a new chapter in the building of a smart bank. The ECOS, a smart banking
+ecosystem, was characterized by a host of achievements, which included the open and integrated cross-border
+ecology, ubiquitous intelligent applications, highly flexible business support, dual-core IT architecture, automatically
+controllable new technology platform, and componentized R&D model. It would be closely integrated into various
+business areas, thus improving service capabilities and customer experience significantly.
+Transforming ICBC toward a smart bank faster and overhauling/optimizing the FinTech organizational
+structure and R&D model. The Bank spared no effort to deploy a new FinTech framework which consisted of
+"one department, three centers, one subsidiary, and one research institute". To be specific, ICBC Technology was
+established in Xiongan, Hebei; an R&D department was added to the software development centers in Chengdu and
+Xi'an, to undertake such system R&D research functions as anti-fraud, bank collection management, and remote
+banking center; and the FinTech Research Institute was founded to primarily study forward-looking FinTech, enrich
+technology reserve, make strategic planning for key FinTech fields, and engage in innovative application. At the same
+time, the Bank reformed the R&D mechanism, and got the R&D work done with efficiency and quality further assured.
+It adhered to the concept of cultivating composite FinTech talents and leading figures, and worked hard to diversify
+the FinTech team.
+Reinforcing top-level design and formulating the FinTech development plan. In accordance with the FinTech
+Development Plan (2019-2021) issued by PBC as well as the Group's development plan and strategic goal of building
+into a smart bank, the ICBC FinTech Development Plan (2019-2023) (hereinafter referred to as the "FinTech Plan")
+was drafted in a bid to reflect new changes in and new requirements for FinTech development. Centering on the
+requirements to advance the Group's cross-border, cross-industry, and cross-sector transformation and development,
+the FinTech Plan would use "finance plus technology" as two great means to build a smart banking ecosystem, push
+FinTech towards innovative development, and ultimately create a "digital ICBC".
++
++
+The Bank sought for a strategic transformation toward a smart bank, by incorporating ICBC Information and Technology
+Co., Ltd. and FinTech Research Institute and putting in place a new FinTech framework which consisted of "one department,
+three centers, one subsidiary, and one research institute"¹. In the meantime, it unveiled the ECOS through which new
+technologies could be used to construct new ecology and fuel the bank-wide business transformation.
+In 2019, the Bank ranked No.1 among all SGE members in agent trading volume and clearing volume. It was
+recognized as the "Star of Precious Metals in China" by Global Finance and Asiamoney.
+The ECOS was characterized by six achievements, which were being closely
+integrated into various business areas, and improving service capabilities and
+customer experience significantly.
+In terms of channel expansion, the Bank led all other SGE members to realize the program trading function by
+proxy and launch the "special legal entity account" business, making tremendous strides in expanding the base of
+institutional customers.
+With this system, the Bank was intended to establish an open and
+integrated cross-border ecology and became the largest comprehensive
+financial service provider in China. Thanks to it, financial products such
+as payment, financing, wealth management, and investment could
+be seamlessly embedded into many daily consumption scenarios including
+education, medical care, traveling and government affairs as well as
+corporate production scenarios, making financial services as convenient
+and accessible as water and electricity. "Going Global" through API:
+more than 1,000 services and products were made into standardized
+interfaces and opened to over 2,000 partners such as the Palace
+Museum, State Grid, and China Post. "Bringing In" via financial cloud:
+a total of 15 industry applications such as treasury, education, and
+scenic spots were introduced, so that partners could work together to
+provide customers with comprehensive services in the form of "industry
+plus finance". To date, the number of tenants has exceeded 20,000.
+Offering hot or fleeting scenarios with highly adaptive and flexible support. Through the financial cloud platform, the Bank could allocate
+resources and adapt to hot events with high flexibility, effectively guaranteeing business continuity. Therefore, the platform won the
+Bank the first prize of the Banking Technology Development Award.
+Unit: %
+Proportion of Internet Financial Transaction
+The Bank, to make breakthrough in internet-based government affairs and
+industrial development and to achieve the strategic objective of building
+the "No.1 Personal Bank", worked hard on the public services, industrial
+and consumption fronts of internet. The Bank deepened cooperation with
+government agencies comprehensively, speeded up acquiring corporate
+customers and concentrated efforts to improve services to individual
+customers. It added intelligent content into traditional financial services
+and accelerated the development of an open, cooperative and win-win
+financial service ecosphere. In 2019, the internet financial transaction
+amount hit RMB633.05 trillion, and its proportion rose by 0.4 percentage
+points from the end of last year to 98.1%.
+Internet-based Finance
+By the end of 2019, the Bank had 615 patents issued in total. Added with the 54 new patents gained in the
+year, the total patents owned by the Bank numbered 603, ranking first industry-wide. In 2019, the Bank invested
+RMB16,374 million in FinTech. The Bank had about 34.8 thousand people specialized in FinTech, making up 7.8% of
+the Bank's workforce.
+The Bank ranked first industry-wide for six consecutive years in CBIRC's IT supervision ratings. Its seven achievements
+won the annual Banking Technological Development Award from PBC. Of these, the Financial Cloud Building Project
+received the first prize of the above award. Its ECOS was named as one of the Top Ten Events in FinTech Application
+for 2019 by PBC and other related departments. The Bank won the "Best Financial Innovation Award" from The
+Chinese Banker for the fourth consecutive year, the "Top Ten FinTech Innovator Award" and the "Top Ten Blockchain
+Application Innovator Award". Besides, it was rated with two FinTech innovation awards, i.e. "Best Al Initiative" and
+"Best Digital Transformation Project" by The Asian Banker as well as over 20 other awards from a variety of influential
+medias.
++
+The business continuity of information systems and the capability of information security protection were
+improved continuously. The Bank upgraded and transformed the production and operation system, successfully
+completed the city-wide information system switch across the Bank, verified the high availability of core business
+systems, and wrapped up the annual business-level offsite disaster recovery drill, hence justifying that the existing
+disaster recovery technologies could offer sufficient support to business recovery. It worked hard to bring the Group's
+information security under integrated management, raised the group-wide security defense standards, built the
+information security operation center (SOC) which gave the multi-dimensional, multi-angle view of security situation
+awareness across the board, and established a multi-level, three-dimensional security monitoring system based on
+models to improve the bank-wide capability of information security protection. Besides, it continued to carry out
+information security checks, helped security teams to enhance their offense and defense skills, wrapped up the
+building of an industry-leading, bank-wide platform where offense and defense technologies could be drilled as they
+were in actual use, and engaged authoritative third parties to conduct special inspections and security assessments.
+The inspection and assessment results suggested that the Bank's all operations were up to standard.
+The Bank spurred innovative R&D in key areas, by centering on the holistic development strategy. Focusing
+on the Group's business development strategy, it made full use of innovative FinTech results to empower such business
+fields as No.1 Personal Bank, open Internet ecology, full-spectrum corporate banking, full-spectrum institutional
+banking, inclusive finance, mega asset management, risk management, and international/integrated operation.
+Consequently, it managed to sharpen its competitive edges among market players.
+མིང་།
++
+Discussion and Analysis
+ICBC
+42
+The release of the ECOS was another important milestone in the course of ICBC's technology development. Standing at this new starting point,
+the Bank would do more to bring FinTech into innovative application, and build into a "digital ICBC" which could contribute to high-quality
+economic development. In other words, it would use technology to change finance, and let finance help us create a better life.
+Gaining the componentized innovation ability to make flexible combination and rapid R&D. The Bank put in place a componentized
+R&D architecture which offered the largest number of standardized services and the biggest transaction volume across the industry.
+With more than 4,300 product parameters, 95% of products could go online on the T+1 day through parameterized configuration. In
+addition, 3,500 standardized business process components and 500-plus standardized cross-channel user interface components were
+able to be assembled so rapidly that large banks could respond to market and consumer requests agilely.
+Creating the "host plus open platform" dual-core IT architecture: The Bank became the first of its peers in the industry to possess the
+core business processing capabilities based on a distributed, cloud platform. With the architecture, more than 90% of applications and
+systems could be deployed on the open platform, thus giving rise to a complete set of basic business support system which would cover
+account, customer, accounting, and other aspects. In this sense, the IT architecture was a historic breakthrough secured by large Chinese
+banks. As the first large-scaled Chinese bank to build the most complete distributed technology platform, ICBC realized the distributed
+transformation of 138 applications and systems in total, a move that could support the development of key business.
+Forging a series of industry-leading, enterprise-level FinTech platforms. The Bank went all out to diversify many new technology fields
+such as cloud computing, big data, blockchain, artificial intelligence (AI), and Internet of Things (IoT). As a result, it built a number of
+new technology platforms, promoted the integration of emerging technologies and business scenarios for vigorous application, thus
+developing the industry-leading, enterprise-level technical competence and business application ability. For example, it achieved the full
+distribution and localization of big data service cloud for the first time in the finance industry. It became the first Chinese bank to realize
+5G network connectivity, with its full-functional 5G smart outlet debuted in Suzhou, and promoted the building and self-service channel
+innovation at intelligent flagship outlets in Nanjing and Beijing. Also, the Bank's blockchain platform passed the authorized certification
+of the Ministry of Industry and Information Technology of China ahead of its domestic counterparts; the Bank took the lead in getting
+registered with the Cyberspace Administration of China; and the first enterprise-level robotic process automation (RPA) platform was
+put into operation and promoted for extensive use by the Bank for the first time across the finance industry. Additionally, the Bank
+connected 1 million devices to the loT platform and could provide massive loT data as support.
+Rolling out a brand-new innovation model of "Smart Plus". The Bank advocated digital and intelligent applications, and promoted smart
+services, smart products, smart risk control, and smart operation, so as to meet new expectations and needs raised by the real economy and
+Chinese people for financial services. In 2019, it launched the brand-new Personal Mobile Banking Version 5.0 and Enterprise Mobile Banking
+Version 2.0, both of which adopted new technologies to offer many smart services as one-click response and non-inductive payment.
+Besides, a host of products including Quick Lending for Operation were rolled out for small and micro enterprises exclusively. Ahead of all
+other peers, the Bank introduced the Al index and "ICBC e Corporate Payment", an intelligent, online corporate payment and settlement
+product. In doing so, it integrated smart products into as many as business links like customer acquisition, invigoration, and retention. When
+bringing credit risk under intelligent monitoring, the Bank led other Chinese peers to develop the intelligent global anti-money laundering
+system and launch the financial risk information service product "ICBC e Security" to build a smart risk control system.
+In terms of product innovation, the Bank, keenly aware of what consumers really needed, advocated preeminent
+traditional culture, and vigorously developed precious metal products with regional characteristics.
+In terms of service upgrade, the Bank, as the first Chinese commercial bank, launched a precious metal customization
+platform that could link creative design enterprises (on the B end) and retail customers (on the C end) in the name
+of "ICBC (Online Precious Metal) Customized Service", thus enabling custom-made services to be rendered in a
+systematic and large-scaled way. It participated in the infrastructure improvement of the Chinese gold market. To be
+specific, it constructed and operated the Shanghai Gold Exchange International Board Certified Vault (ICBC Shenzhen),
+hence establishing its leading position in developing the gold bonded warehousing and transportation business at
+Guangdong-Hong Kong-Macau Greater Bay Area. Besides, the Bank became one of the first Shanghai Gold Exchange
+(SGE) members to offer the fixing reference prices for "Shanghai Silver Benchmark Price Trading", a move expanding
+the types of precious metal which the Bank could price in RMB. Moreover, it also rolled out a gold buy-back business
+model of "gold bars from other banks bought back at ICBC".
++
+In terms of foreign-currency bond investment, the Bank worked hard to study and predict market trends, timely
+adjusted investment strategies, quickened investment pace at the appropriate time, carried out investment activities
+in more places and currency types, lengthened terms to a proper extent, and scaled up investment volume at a steady
+pace. At the same time, it kept increasing investment in offshore foreign-currency bonds targeted at Chinese-funded
+enterprises, so as to meet their financing needs overseas and support them in international development strategies.
+With respect to RMB bond investment, the Bank continued to study and predict market trends and sped up investment
+pace at the time when the market interest rate was at its peak; it considered the investment value, yield rate and
+comprehensive contribution of bonds in each type as a whole before scaling up investments in high-value bonds; as
+per the bond issue plan, it coordinated efforts to forestall investment value and interest rate risks, and control the
+holistic interest rate risk of each investment portfolio by arranging the term structure reasonably; it ranked first among
+Chinese peers by the new investment and existing investment in local government bonds throughout 2019, offering
+substantial funding support to the real economy sectors such as infrastructure construction; and the new investment
+amounts in both manufacturing enterprise bond and private enterprise bond soared remarkably over last year,
+therefore catering to the financing needs of these enterprises effectively.
+Investment
+In relation to the foreign exchange money market: the Bank seized market opportunities and took multiple measures
+to increase yields and efficiency from foreign fund operation; introduced more types of non-banking counterparty
+engaged in foreign-currency interbank funding business and expanded the business size and customer base
+simultaneously, thus giving a strong impetus to the development of real economy; cooperated with China Foreign
+Exchange Trading System to seek for business innovation, as a move to further consolidate its leading position in the
+Chinese foreign-currency money market business; and launched as one of the first Chinese banks the foreign-currency
+bond repurchase transaction in the interbank market and the foreign-currency bond repurchase business accepting
+RMB bonds as collateral, in a bid to further diversify the mix of foreign-currency financing instruments.
+The Bank took the following actions in the RMB money market: actively increasing inquiry frequency, tapping
+deep into customer demand, and adopting other measures to operate funds with intensified efforts and enhanced
+efficiency; and swiftly responding to the increasingly fierce peer competition and continuously stepping up efforts to
+develop bond lending business.
+4
++
+Money Market Activities
+Financial Market Business
+At the end of 2019, the pension funds under the Bank's trusteeship amounted to RMB197.8 billion; the Bank
+managed 10.76 million individual enterprise annuity accounts, and the pension funds under the Bank's custody totaled
+RMB631.7 billion. The Bank led other domestic banks in terms of the scale of enterprise annuity funds under the
+Bank's trusteeship, number of individual enterprise annuity accounts and enterprise annuity funds under the Bank's
+custody.
+The Bank actively provided inclusive financial services, and organized a series of "Annuity Policies into Enterprises"
+activities for small and medium-sized enterprises, to provide them with quality pension management services.
+The Bank's leading position was further cemented. It successfully obtained the trustee, custodian and investment
+manager qualifications for occupational annuities of central and all the local governmental agencies and administrative
+institutions that have completed bid invitations, with the bid-winning rate ranking first among banks.
++
+At the end of 2019, the net value of assets under the Bank's custody reached RMB16.5 trillion.
+The Bank was awarded the "Best Mega Custodian Bank in China" by The Asian Banker and the "Best Insurance
+Custodian, China" by The Asset.
++
+Discussion and Analysis
+Annual Report 2019
+39
+Discussion and Analysis
+Financing
+Precious Metal Business
+Discussion and Analysis
+ICBC
+40
+40
+The asset securitization business effectively supported the Bank in disposing of non-performing assets, revitalizing stock
+assets and optimizing credit structure. In 2019, the Bank issued 18 tranches of credit asset securitization programs
+totaling RMB140,680 million in the mainland. Specifically, there were 10 tranches of residential mortgage securitization
+programs worth RMB131,239 million in aggregate, four tranches of non-performing personal loans securitization
+programs worth RMB4,157 million, three tranches of non-performing credit card asset securitization programs worth
+RMB1,747 million, and one tranche of M&A loan asset securitization program worth RMB3,537 million.
+Asset Securitization Business
+In the area of foreign institutional investors trading business in the China's Interbank Market, the Bank took an active
+part in serving foreign institutional investors from 50 countries and regions all over the world, and meeting their
+investment and trading needs in the China's Interbank Market. It won the "Contribution Award for Opening Up"
+granted by the National Interbank Funding Center and the "Excellent Settlement Agent" granted by China Central
+Depository & Clearing Co., Ltd.
+98.1
+In terms of the over-the-counter bond business, the Bank continued to promote innovation. It successfully
+accomplished the pilot programs on the first over-the-counter local government bond issuance for 12 provinces or
+municipalities directly under the central governments, thus effectively helping local governments expand the channels
+for bond issuance, investment and trading as well as offering more investment options to customers. Besides, it
+managed to distribute the first China Development Bank Bond Connect Green Bond issued under the theme of
+sustainable development to the over-the-counter investors, in a bid to expand the social effect of green finance. The
+Bank was rated as an "Exemplary Institution in Over-the-Counter Bond Business" and "Contributing Institution in
+Over-the-Counter Local Government Bond Business" by China Central Depository & Clearing Co., Ltd.
+With respect to paper commodity trading, the Bank provided value-added services for paper commodity trading
+customers, satisfying customers' demand for information and increasing customer loyalty. It continued to enhance its
+product lines marketing, and accurately met customers' needs through precision marketing strategy. Consequently,
+the number of customers and trading volume of paper commodity trading business kept increasing steadily.
+In the aspect of franchise foreign exchange settlement and sales and foreign exchange trading, the Bank strove to
+serve enterprises' needs for money exchange and exchange rate hedging, with a focus on serving the real economy
+and in active response to China's Belt and Road Initiative. Besides, it creatively unveiled the RMB foreign exchange
+currency swap business pegged to the LPR floating rate. As a result, the Bank's trading volumes in franchise foreign
+exchange settlement and sales and foreign exchange trading option, foreign exchange swap and currency swap
+surged largely compared with the previous year. Moreover, the Bank successively put into operation the financial
+market-oriented corporate electronic trading platform and the corporate mobile banking-enabled foreign exchange
+settlement and sale business. The diversified product mixes and convenient channels enabled it to better serve the
+development of foreign trade with financial services.
+4
+Franchise Treasury Business
+For details on the Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements:
+33. Certificates of Deposit; 35. Debt Securities Issued".
+In line with its fund operation and liquidity management needs, the Bank reasonably arranged the scale and structure
+of liabilities including interbank borrowing, structured deposits and large-denomination CDs in order to enhance the
+supporting capacity of diverse liabilities to asset business growth.
++
++
+In regard to corporate commodity trading, the Bank successfully attracted a number of leading enterprises to
+participate in commodity hedging business, with remarkable achievements in customer expansion. It assigned
+proprietary traders to key customers, deeply explored customers' potential demand, tried best to offer quotations
+more efficiently, provided customers with better trading experience, and expanded the trading volume of major
+customers steadily. Moreover, it continued to optimize the trading systems and introduce innovative products. As one
+of the first domestic banks to use self-developed corporate electronic trading platform, it managed to simplify the
+trading process and enhance the efficiency and degree of specialization.
+97.7
+FinTech
+2017
++
+Service Enhancement
+At the end of 2019, the Bank had 15,784 outlets, 25,895 self-service banks and 82,191 ATMs whose trading volume
+amounted to RMB8,261.3 billion.
+The Bank actively explored new ways of channel transformation. It diversified the entrances and tools for new channels
+such as QR code, outlet WiFi, WeChat and Weibo, providing customers with a convenient multi-channel service access
+matrix and effectively incorporating its services into online and offline scenarios. The Bank urged its outlets to integrate
+financial services with finance-related industries based on their own regional resources and customer characteristics,
+with a focus on building up their capability to provide professional services in market or industry divisions.
+The Bank advanced the establishment of a new post system for outlets across the board. Following the customer-
+centric philosophy, the Bank built a new post system for outlets featured with division of responsibilities and
+coordination in work among outlet managers, operation supervisors, account managers and customer service
+managers, so as to boost the efficiency of human resource utilization and marketing of services.
+Discussion and Analysis
++
+ICBC
+46
+Outlet improvement continued. The Bank actively improved the geographical distribution of outlets and aligned the
+outlet network structure better with market resources, significantly improving the ability to cover core areas and
+high-quality customer groups. The Bank made further headway in making its outlets smarter by making full use of
+advanced technologies such as blockchain, Internet of Things and artificial intelligence, so as to enrich service scenarios
+for people's wellbeing. It aimed to develop a new generation of smart outlets, and provide customers with more
+efficient, more convenient and smarter financial services. As at the end of 2019, the Bank completed the intelligent
+transformation of 15,684 outlets, put in place 79,555 intelligent devices and covered 287 personal and corporate
+business items with intelligent services.
+Channel Development
+The Bank always put improvement of customer service experience in the first place. Orienting towards provision of
+convenient services, intelligent services and inclusive financial services, the Bank pursued scientific and technological
+innovation, made unremitting efforts to push forward channel transformation and development, and continued to deepen
+the integration of online and offline channels through perfecting the offering of "intelligent plus manual, online plus offline,
+cloud and near-field" services.
+Channel Development and Service Enhancement
+The Bank furthered joint efforts to build consumer finance scenarios. The Bank continued to optimize the features
+of ICBC e Wallet and built open, integrated account financial ecosphere covering 14 product lines of five categories,
+namely account, payment, investment, financing, settlement and value-added service. ICBC Link launched such
+features as Type II account opening, reloading, cash withdrawal, balance detail inquiry and wealth management.
+Through ICBC e Life, the Bank built a consumer finance ecosphere covering all the scenarios, that gathered bank,
+customers and merchants.
+The Bank helped internet transformation of industries, improved economic layout of industrial platform, and fully
+promoted the infrastructure construction of open platforms. API open platform had totally 18 groups of services
+including account management, settlement and acquiring, with over 5,000 cooperative enterprises. The Bank
+introduced nearly 20 cloud service solutions to government affairs, education and other 12 major industries. The Bank
+advanced the standard transformation of Ju Fu Tong platform to perfect such vital functions as financing, payment
+and clearing, significantly enhancing the financial service capability to enterprises on the industrial internet platform.
+The Bank deepened the cooperation with leading internet enterprises to innovate in payment, settlement, cross-border
+finance, etc.
+The Bank strengthened the cooperation in applying digital technology in government affairs, and focused on key fields
+including intelligent government affairs, intelligent transport, intelligent campus, intelligent administration of justice
+and poverty alleviation through e-commerce. In respect of intelligent government affairs, the Bank, together with
+Xiongan New Area Management Committee, launched the "Blockchain Platform for Land Acquisition & Demolition
+Fund Management". The "Business Link", an application developed by government and the Bank, went live to
+integrate the government's supervision and approval management services with the Bank's financial services. The Bank
+cooperated with Ningxia government to release government affairs application "My Ningxia". ICBC Link preliminarily
+established online government affairs module. Electronic social security card was available in 281 cities around the
+nation. With regard to intelligent transport, the Bank released the non-inductive payment product, and completed
+projects including ICBC Car License Payment for Beijing Capital International Airport, non-inductive payment for
+Global Center in Chengdu and for expressway in Jilin. Electronic boarding code was available in 180 cities across the
+nation. As for intelligent campus, an educational payment and management product Campus Affairs Management
+Cloud continued to be updated to practically solve the problems of collection, payment and school roll management
+for schools, parents and students. As to intelligent administration of justice, the Bank became the only bank with the
+judicial auction qualification granted by the Supreme People's Court, developed online judicial auction platform and
+online inquiry platform on ICBC Mall. To facilitate the precision poverty alleviation, the Bank opened special stores on
+the new version of ICBC Mall, helping merchants in national-level poverty-stricken counties achieve trade volume of
+RMB440 million.
++
+The Bank continued to cement the groundwork and outcomes of its efforts to build a "bank to the satisfaction of
+customers", and improved the quality of services across the board. It carried out the "Considerate Services for General
+Public" campaign, and continued to improve customer experience and the quality of its services. It made great efforts
+to build 14,000 "ICBC Sharing Stations" for people's benefit and stayed committed to its original aspiration to serve
+the people. The Bank focused on inclusive public welfare and strengthened the mission of fulfilling its corporate social
+responsibilities.
+The Bank continuously improved business procedures and developed a new mode integrating online and offline
+operation and service, featuring online quick application, central business processing, offline quick delivery and total-
+process transparency, in order to better customer experience with a new operation and service mode. It created a
+model featuring online order placement, central processing and mail shipping for debit card replacement without card
+number change and the issuance of personal credit report. The Bank promoted "ICBC e Letter of Confirmation", a
+quick account opening model for enterprises, to achieve integrated processing and automatic feedback of the Bank's
+confirmation data.
+In 2019, both the Bank's outlet services and internet banking services made into the list of "Financial Enterprise
+Standard Forerunners" in the first award selection activity organized by eight ministries and commissions including the
+State Administration for Market Regulation and PBC.
+Consumer Protection
+ICBC
+48
+94.9
+The organizational structure of the Group's institutions at all levels witnessed further progress. The Bank implemented
+the requirements of the CPC Central Commission for Discipline Inspection and the National Supervisory Commission
+on the dispatched inspection reform, adjusted relevant organizational structures and department functions. It
+established ICBC Wealth Management in accordance with the New Rules on Asset Management. It continued to
+promote the transformation of the Group's FinTech organizational structure by setting up a FinTech Research Institute,
+six innovation laboratories and ICBC Technology, and established software development sub-centers in Chengdu and
+Xi'an. It continuously promoted intensive business management by setting up intensive operation centers in Foshan
+and Chengdu. The Bank stepped up efforts to apply for opening tier-two branches in a number of free trade zones
+and improved tier-one sub-branches in some cities. Based on these efforts, the Bank's institutions have made further
+headway in improving their efficiency.
++
+The Bank continued to enhance the efficiency of human resources management. It carried on the three-year personnel
+planning in depth, controlled the total number of staff appropriately and optimized their structure constantly. The
+Bank continued to build up its image as a good employer through the "ICBC Star" recruitment plan, established the
+"3+3" campus recruitment system to effectively distinguish between excellent potential talents and position-suitable
+talents. It increased social recruitment based on staffing requirements of county-based institutions and other related
+business. A core talent pool of corporate credit customer managers was established to strengthen team building.
+The Bank employed better outlet customer service managers and operation supervisors to improve the efficiency of
+outlet employees. It hired more international talents, improved the total number and composition of expatriates, and
+established a two-way exchange mechanism for employees of the Bank's institutions in the Greater Bay Area. The
+Bank continued to increase employment compensation and benefits and gave post allowances to outlet employees and
+subsidies to employees in impoverished and remote areas.
+4
+Human Resources Management
+4
+Discussion and Analysis
+Annual Report 2019
+In 2019, the Bank's "Customer Service and Complaint Management System" recorded a total of 103 thousand
+customer complaints, mainly from Shandong, Hebei, Shanghai, Zhejiang, and Anhui, involving such businesses as
+credit card, personal banking and internet finance.
+Adhering to the customer-centric business philosophy, the Bank made in-depth efforts to root out problems triggering
+customer complaints, put focus on complaints in key fields and regions, and took multiple measures to improve the
+quality and efficiency of complaint handling. It promoted information system building, continued to refine IT-based
+complaint management, and improved customer experience in dealing with their complaint.
+consumers.
+The Bank implemented regulatory requirements on tax cuts and fee reductions, and further standardized the charging
+of service fees, so as to ensure efficient and high-quality financial products and services with reasonable price. Taking
+initiatives to adapt itself to the diversification of consumer demands for financial literacy, the Bank launched targeted
+financial literacy publicity and education and effectively raised the anti-risk awareness and sense of integrity of
+The Bank implemented the laws, regulations and regulatory requirements on consumer protection. It established
+the Corporate Social Responsibility and Consumer Protection Committee under the Board of Directors, in a bid to
+further improve the customer protection system at the corporate governance level. The Bank prepared and issued the
+Measures for Reviewing Consumer Protection to protect consumers' legitimate rights and interests at the root.
+4
++
+47
++
+Steady progress was made in education and training. The Bank, based on the job requirements of each post, carried
+out adaptive training involving general skills and the promotion of new products, businesses, and procedures to help
+employees adapt to their posts. It focused on business priorities and strategy transmission, and rolled out training
+programs on subjects including intelligent small and micro enterprises, credit management capability, competitiveness
+of key urban branches, outlet managers' practical capability, corporate asset securitization, and approaches to increase
+corporate deposits. To improve the competence and professionalism of its employees, the Bank provided them with
+targeted training programs, such as training for international talents, "311" training for bank leaders, "Defenders
+of Credit Quality" for customer managers, "Rock-solid Plan" for operation supervisors, and "Star Plan" for new
+employees, aiming to develop a tiered talent training system. It rolled out more professional training, made adjustment
+to the certification mechanism of qualifications, and established the Macau Young Financial Talent Training Institute.
+In 2019, the Bank organized a total of 44 thousand training sessions of all kinds with 5.31 million trainees.
+Upholding the core value of "Integrity Leads to Prosperity", the Bank enriched corporate culture in the new era,
+strengthened cultural self-confidence, and enhanced the Group's culture to better unite its employees. It adopted
+new cultural carriers, such as urging outlets to integrate culture into their business operation, setting up a "Corporate
+Culture" column in its newspaper and enriched the column of "Cultural Weekly" on its official Weibo. The Bank
+fostered the value of integrity, produced educational films for warning purpose, and promoted full and rigorous
+governance over the Party and the Bank. The Bank launched the "Responsibility Reinforcement Year" compliance
+culture event. It also held the "Innovative ICBC" competition to build a cross-professional and cross-region
+collaborative innovation platform. It carried out culture events such as the "Considerate Services for General Public"
+campaign. The cultural development in credit and other key areas was deepened. The Bank made innovative efforts
+to hold the ICBC global campaign themed "ONE ICBC, ONE FAMILY" and the 2019 award ceremony, providing
+overseas institutions with a platform to showcase their efforts and achievements. At the ceremony, the Bank rolled out
+such awards as "Touching ICBC", "Innovative ICBC", "ICBC Craftsmanship" and "Outstanding Contribution Award
+for Serving the China International Import Expo", in an effort to motivate its employees to unite together and forge
+ahead. The Bank's tireless struggle made it won the "Chinese Enterprise Spirit Award during 70 Years of Progress in
+Building a New China".
+Discussion and Analysis
+ICBC LINK
+At the end of 2019, ICBC Mall gained 146 million users.
+The Bank updated Version 2.0 of ICBC Mall and launched new mall and mobile seller center to improve customer
+experience and intelligent level in all aspects. The Bank improved online installment service, combining installment
+products with online consumption scenarios flexibly, and continued to propel the layout of special modules including
+procurement, travel, cross-border e-commerce, and judicial auction.
++
++
+ICBC MALL
+At the end of 2019, the number of ICBC Mobile customers reached 361 million. ICBC Mobile maintained its industry-
+dominance in customer size, loyalty and activeness.
+The Bank focused on developing the "No.1 Personal Mobile Banking". It released Version 5.0 of mobile banking, and
+firstly created the voice navigation and sharing public beta version among peers by relying on new technologies, such
+as speech recognition, big data, Al, non-inductive authentication. The Bank built the individualized service system
+comprehensively, and tailored exclusive versions for customer groups like elders, students, small and micro business
+owners and private banking customers. In particular, the version of "Happy Life" targeted at elder customer group
+with eight innovative featured products and functions such as family account, agency account opening and the
+creative service mode of mobile family finance, which provided more convenient, more efficient and safer financial
+services for customers. Based on the identity authentication method of scanning code with mobile banking, the Bank
+provided card-free business processing service by scanning code with intelligent terminal or face recognition over the
+counter, carried out unified order-based management of changing the bank card while maintaining the card number,
+issuing credit certification, and other transactions, so as to realize the seamless connection between online and offline
+services.
++
+ICBC MOBILE
+Advancement of Core Platforms
+Discussion and Analysis
+43
+Annual Report 2019
+Note: The proportion of internet financial transactions refers to the
+number of internet financial transactions divided by the total
+number of transactions of the bank.
+2018
+Building of a Financial Ecosphere
+The Bank released Version 4.0 of ICBC Link, focusing on the positioning of the main portal of scenarios and customer
+information service center, to optimize the layout and service. The Bank built a brand-new scenario cloud platform
+integrating function, service and content to support flexible and rapid expansion and operation of scenarios. The
+Bank preliminarily established a scenario service ecosphere featuring online public service, messenger, sharing center,
+exclusive corporate service accounts, opened 14 thousand official accounts, and pushed over 60 million scenario
+service messages.
+At the end of 2019, ICBC Link had 167 million registered users.
+2019
+The Bank concentrated on terminal innovation and application of account management, payment and settlement, and
+value-added service for small and micro enterprises to serve the private sector and support inclusive finance. The Bank
+released Version 2.0 of ICBC Enterprise Mobile Banking, improving service with intelligent customer service, intelligent
+interaction, intelligent reminder, intelligent marketing, and serving millions of small and micro customers with ICBC
+Small and Micro Finance Platform, ICBC e Security, Small and Micro Enterprise e Management, ICBC e Commerce and
+other products.
+45
+Annual Report 2019
+The Bank continued to improve "Small and Micro Enterprise e Loan", an online financing product system with "Quick
+Lending for Operation", "Online Revolving Loan" and "Digital Supply Chain" as core products. Relying on big data
+technology, "Quick Lending for Operation" built nearly 200 financing scenarios involving settlement, tax, merchant,
+etc., and served over 1 million small and micro customers. The e-Mortgage Quick Loan business was developed
+with vigor to enable customers' online self-service application, online collateral assessment and automatic approval,
+thus effectively boosting the processing efficiency and risk control. The Bank constantly refined digital supply chain
+financing product system. It created such new business modes as "digital credit certificate" and "e-Chain Quick Loan"
+to make supply chain financing service available to small and micro customers at the end of industry chain.
+ICBC Small and Micro Finance Platform was persistently improved to further implement the strategy of serving
+the real economy with financial services. The platform is committed to provide small and micro enterprises with a
+financial service package including account opening, settlement and financing. Functional modules including financial
+management, e-financing, investment, wealth management, and Small and Micro Enterprise e Management were
+launched to help small and micro enterprises improve their capability of operation and management.
+DIGITAL INCLUSIVE FINANCE
+ICBC ENTERPRISE MOBILE BANKING
+CONSUMER FINANCE
+The Bank continued to improve and update "ICBC e Bill Pay" product for better customer experience. The Bank
+launched cross-border bill payment service, and successively rolled out "Party Affairs Management Cloud", "Campus
+Affairs Management Cloud", "Property Management Cloud" and other financial ecosphere cloud services, which
+provided services such as personnel information management, bill management, fund settlement and relevant report
+statistics to customers.
+The Bank enriched the product features, cooperation models and scenario applications of ICBC e-Loan and promoted
+"Credit Granting in Seconds" and "Interconnection" scenario applications in a bid to enhance customers' experience
+with internet-based financing. "Credit Granting in Seconds" has enabled online real-time credit granting and real-
+time lending by importing external credible data such as provident fund, social security and personal tax information
+and adopting risk control methods such as face recognition. As of the end of 2019, "Credit Granting in Seconds" was
+brought online in 178 cities to cover all provident fund, social security and tax scenarios.
+The Bank continued to improve online payment products. It released new online product with functions of
+"aggregation acquisition plus smart clearing" to meet personalized needs of merchants and optimize user experience.
+The Bank applied "e-Payment Intelligent Campus" in such scenarios as canteen, supermarket, recharge, payment,
+parking in campus, providing comprehensive and convenient services integrating financial functions with campus
+applications. The Bank released aggregate collection service of "e-Payment QR Code", for small and micro merchants,
+which has served over 1 million small and micro merchants as at the end of 2019. Moreover, the Bank creatively
+launched the "One-Click Registration" service for third-party payment and carried out a number of convenient and
+preferential campaigns together with WeChat and Alipay.
++
+PAYMENT
+Development of Key Business Lines
+Discussion and Analysis
+ICBC
+44
+In 2019, ICBC Enterprise Mobile Banking had 2.05 million active users, with activeness leading the industry.
+The Bank developed "ICBC e Corporate Payment", a corporate online payment brand embedded into the scenarios of
+the supply-chain core enterprise platform and other various transaction platforms, providing corporate online payment
+and settlement services for these platforms and realizing the combination of fund flows of transactions and their
+information flows. The "Treasury Management Cloud Service" and supply chain cloud platform were built to provide
+online integrated financial services that combined both "financial and non-financial" resources for large and medium-
+sized enterprises. The "Enterprise Link" corporate account opening service was further improved to provide one-stop
+account services for enterprises desired to handle business registration and open corporate accounts.
+ICBC Wealth Management, as the first banking wealth manager approved, was among market leaders in terms of
+business qualifications, product migration and IT system building. It adhered to professional investment management
+and strategy-based product management, and aligned its wealth management products and investments with the
+New Rules on Asset Management. As guided by the New Rules on Asset Management, ICBC Wealth Management
+rolled out over 350 characteristic products at the full spectrum including increased fixed income, cash management,
+equity, projects, asset portfolio, alternative investment, quantitative and cross-border investment under fixed income,
+equity, commodities and financial derivatives as well as hybrid of these four categories, and developed a number of
+star product lines in public offering and private placement including "Tian Li Bao", "Xin De Li", "Quan Xin Equity",
+"Xin Wen Li" and "Bo Gu Tong Li". ICBC Wealth Management adhered to the Group's unified risk appetite and
+established a comprehensive risk control and compliance framework.
+ICBC Technology successfully opened for business in Xiongan New Area. The setup of ICBC Technology represented
+the Banks' strategic move to build a smart bank relying on the nature of finance and leveraging on the Bank's
+strengths in FinTech and integrating innovation capabilities. Since its opening, ICBC Technology has made significant
+progress in intelligent government affairs, commercialization of risk control technology products, building of the
+financial ecosphere cloud, customer system custody service and equity investment in tech startups and corporate
+innovators.
+Annual Report 2019
+51
+52
+2
+ICBC
+Paris Branch (France)
+⑤
+E
+E
+£ ®
+Discussion and Analysis
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+Number of institutions 79
+(country/region) institutions
+Frankfurt Branch (Germany)
+Luxembourg Branch (Luxembourg)
+ICBC (Europe) (Luxembourg)
+Amsterdam Branch
+E
+ICBC Investment focused work on the strategic plans for supply-side structural reform and strengthened coordination
+with the Group. It diversified fundraising channels, strengthened enterprise risk management and control, pursued
+market-oriented debt-for-equity swap business in a proactive and prudent manner and kept improving the quality and
+efficiency of serving the real economy. A number of investment projects represented the first-of-its-kind deals for the
+relevant region, industry or model. Integrated financial services were provided to debt-for-equity enterprises in support
+of their reform and development.
+Discussion and Analysis
+ICBC-AXA made solid progress in business transformation and enhanced professionalism in investment. It managed to
+embrace healthy business development on all insurance fronts based on the Group's channel advantages, recording
+the strongest performance by a number of operating indicators. It explored new models of online customer acquisition
+and built the "health insurance plus health service" insurance business model encompassing all groups of people
+and the entire health cycle. The asset management subsidiary officially commenced operation to build a professional
+investment platform. The risk compliance management continued to be strengthened and the enterprise risk
+management system further improved.
+384,304
+(the Netherlands)
+405,683
+4,090
+4,115
+428
+426
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the Bank's
+gain on investment recognized by the Bank during the reporting period.
+As at the end of 2019, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD405,683 million, an increase of USD21,379 million or 5.6% from the end
+of the previous year, and they accounted for 9.4% of the Group's total assets. Profit before taxation during the
+reporting period was USD4,090 million, representing a decline of USD25 million or 0.6% as compared to last year and
+accounting for 7.3% of the Group's profit before taxation. Total loans amounted to USD200,833 million, and total
+deposits were USD134,749 million, representing an increase of USD3,785 million or 2.9%.
+50
+ICBC
+Diversified Operation
++
++
++
+ICBC Credit Suisse Asset Management actively served the real economy and diverse customer demands, placed equal
+emphasis on intra-group coordination and market-oriented expansion, seized opportunities while preventing risks,
+continued to enhance the investment research capability and investment performance and vigorously developed the
+pension investment management business and non-money-market fund business. It managed to improve the business
+structure continuously and enhance the quality and efficiency steadily.
+ICBC Leasing endeavored to improve its ability to provide professional and integrated financial services and continued
+to pursue transformation to high-quality development while fortifying the groundwork for risk management
+and control. The aviation leasing segment made further progress in supporting national aviation development,
+demonstrating a rising level of professionalism. The shipping leasing segment helped Chinese shipbuilders go abroad
+and innovatively developed an integrated shipping financial service solution that encompassed finance, manufacturing
+and management. The equipment leasing segment explored innovative business models including "captive leasing plus
+inclusive finance" to effectively enhance intra-group synergies.
+ICBC International continued to unleash its growth potential, showing continuous enhancement of market
+competitiveness and steady improvement in operation effectiveness and asset quality across its four major businesses,
+i.e. investment banking, sales and trading, investment management and asset management. It remained among
+top players by size of IPO underwriting, seeing the number of bond underwriting projects rising rapidly. It made
+active explorations for new economic equity investment to pursue greater ability to serve all customers and stronger
+contribution to value of the Group.
+Brussels Branch (Belgium)
+(Hong Kong, China)
+Madrid Branch (Spain)
+Office (Vietnam)
+Vientiane Branch (Lao PDR)
+Phnom Penh Branch (Cambodia)
+Yangon Branch (Myanmar)
+ICBC (Almaty) (Kazakhstan)
+Karachi Branch (Pakistan)
+Mumbai Branch (India)
+Dubai (DIFC) Branch (UAE)
+Abu Dhabi Branch (UAE)
+Doha Branch (Qatar)
+Riyadh Branch (Saudi Arabia)
+Kuwait Branch (Kuwait)
+Sydney Branch (Australia)
+ICBC (New Zealand) (New Zealand)
+America
+Hanoi Branch (Vietnam)
+Number of institutions 151
+New York Branch (USA)
+E
+ICBC (USA) (USA)".
+ICBCFS (USA)
+ICBC (Canada) (Canada)
+ICBC (Mexico) (Mexico)
+Total
+(country/region) institutions
+ICBC (Thai) (Thailand)
+Asia-Pacific Region (except
+Hong Kong and Macau)
+Number of institutions 90
+(country/region) institutions
+Tokyo Branch (Japan)
+Seoul Branch (South Korea)
+Busan Branch (South Korea)
+Mongolia Representative
+Office (Mongolia)
+Singapore Branch (Singapore)
+ICBC (Indonesia) (Indonesia)
+ICBC (Malaysia) (Malaysia)
+Manila Branch (Philippines)
+ICBC (Macau) (Macau, China)
+Macau Branch (Macau)
+Warsaw Branch (Poland)
+Greece Representative Office
+(Greece)
+ICBC (London) (UK)
+London Branch (UK)
+ICBC Standard Bank (UK)
+Bank ICBC (JSC) (Russia)
+ICBC Turkey (Turkey)
+Prague Branch (Czech Republic)
+Zurich Branch (Switzerland)
+ICBC (Austria) (Austria)
+Africa-
+2
+Number of institutions 1
+(country/region) institutions
+Investments in Standard Bank
+(South Africa)
+African Representative Office
+(South Africa)
+Hong Kong and Macau
+Number of institutions 107
+(country/region) institutions
+Hong Kong Branch
+(Hong Kong, China)
+ICBC (Asia) (Hong Kong, China)
+ICBC International
+Milan Branch (Italy)
+Bank(1)
+Ho Chi Minh City Representative
+428
+(in USD millions)
+Profit before taxation
+(in USD millions)
+Number of institutions
+At the end At the end
+At the end At the end
+Item
+of 2019
+Assets
+of 2018
+2018
+of 2019
+of 2018
+Hong Kong and Macau
+197,279
+182,777
+2,105
+2019
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+At the end of 2019, the Bank established 428 institutions in 48 countries and regions and indirectly covered
+20 African countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking
+relationships with 1,445 overseas banking institutions in 143 countries and regions, making its service network
+covering six continents and important international finance centers around the world. The Bank maintained
+129 institutions in 21 countries and regions along the Belt and Road.
+Discussion and Analysis
+ICBC (Brasil) (Brazil)
+Discussion and Analysis
+Internationalized and Diversified Operation
+Internationalized Operation
+The Bank steadily advanced international development and continued to improve its global network. ICBC (Austria) officially
+opened, and ICBC (Europe) Greece Representative Office and Macau Branch were granted licenses. Financial support was
+strengthened for Chinese enterprises "Going Global" and the Belt and Road Initiative. Coordinated efforts were made to
+advance the integrated and joint development mechanism and financial innovation in the Guangdong-Hong Kong-Macau
+Greater Bay Area. The Bank enhanced coordinated domestic and overseas development, pursued in-depth development of
+overseas business and product lines and accelerated the cross-border RMB business development.
++
++
++
+Corporate banking: the Bank actively served the Belt and Road Initiative, promoted international cooperation on
+production capacity and third-party market cooperation on a win-win basis and provided cross-border customers
+with "one-stop" financial services by providing a basket of products, including overseas bond issuance, cross-border
+acquisition, project finance, derivatives trading and global cash management. The Bank remained as the top global
+financial advisor in terms of the number of deals completed for Chinese outbound acquisition transactions according
+to the ranking of "Advisors for Chinese Outbound Acquisition Transactions" promulgated by Refinitiv. The Bank was
+among market leaders in overseas IPO underwriting and sponsorship as well as underwriting and issuance of offshore
+bonds.
+4
+Personal banking: the Bank endeavored to enhance public convenience in the Guangdong-Hong Kong-Macau Greater
+Bay Area by launching the "Bay Area Service Link" and "Bay Area Account Link" services. ICBC e Life created the "Bay
+Area Life" column and launched the "I GO Bay Area" cross-border promotional campaigns. 3.82 million bank cards
+were issued overseas, with efforts focused on developing the "ICBC Virtual Credit Card for Guangdong-Hong Kong-
+Macau Greater Bay Area" and "ICBC Debit Card for Guangdong-Hong Kong-Macau Greater Bay Area".
+Overseas internet financial services: the overseas internet banking product system including personal and corporate
+internet banking and mobile banking covered 41 countries or regions, providing services in 14 languages. ICBC Mall
+cross-border e-commerce consisted of three segments, namely B2C, B2B and outbound financial services, diversifying
+the product categories from Asia, Africa, Europe, Australia, North America and South America. With over 500
+merchants on the platform, it also rolled out cross-border integrated outbound financial service solutions for cross-
+border traders.
+Financial market business: the Bank issued the "China Bond-ICBC RMB Bond Index" worldwide jointly with China
+Central Depository & Clearing Co., Ltd. and Singapore Exchange, and conducted China's first ever foreign exchange
+settlement/sale transaction for Global Depository Receipts (GDRs). The Bank has established bond and foreign
+exchange business relationship in the China's Interbank Market with foreign institutional investors from over 50
+countries or regions, remaining among the top panda bond issuers by underwriting value.
+Global asset management: the Bank enriched and bettered the product lines for cross-border asset management. A
+series of flagship brands were developed, including Global Rotation, Global Select and Global Safe Profit. The UCITS
+bond fund themed by the Belt and Road Initiative was successfully issued in the offshore market.
+Global custody services: the Bank persistently served Chinese tech startups and corporate innovators operating
+overseas, designated among the first qualified depositaries in the pilot program on depository receipts. The Bank
+took the opportunity of capital market connectivity to become the sole GDR underlying securities custodian under
+the Shanghai-London Stock Connect programme and one of the pilot custodians under the China-Japan ETF Connect
+mechanism. The Bank's number of qualified foreign institutional investors continued to maintain the No.1 position
+among Chinese peers.
+The Bank proactively advanced the cross-border RMB business. It promoted the use of RMB in cross-border trade,
+investment and financing, and continuously consolidated its market strengths in RMB business. The Bank continued to
+steadily support RMB internationalization, focusing on promoting the use of RMB in surrounding countries and Africa.
+The Bank accelerated innovations in free trade zones (FTZS) and the Guangdong-Hong Kong-Macau Greater Bay Area,
+and Free Trade Accounting Systems were deployed in Hainan and Shenzhen FTZS etc. The Bank constantly enhanced
+service capabilities of RMB Clearing Banks, and its efforts to assist in RMB capacity building in key markets overseas.
+Besides, the Bank improved the cross-border e-commerce comprehensive service platform by function upgrading and
+expanding, striving to develop new highlights for cross-border RMB business. In 2019, the Bank's cross-border RMB
+business volume surpassed RMB5 trillion.
+Annual Report 2019
+49
+2,017
+426
+107
+Asia-Pacific Region
+149
+Africa Representative Office
+1
+1
+Eliminations
+(37,213)
+(34,100)
+151
+Subtotal
+380,518
+3,714
+Investment in Standard
+3,988
+3,786
+376
+3,729
+386
+401,695
+553
+449
+56,948
+108,867
+98,766
+1,139
+1,025
+90
+91
+(except Hong Kong and
+Macau)
+Europe
+80,926
+76,127
+21
+134
+79
+81
+America
+51,836
+104
+ICBC (Peru) (Peru)
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB10,810 million.
+It mainly provides a full spectrum of corporate banking services including corporate and project loan, trade finance, deposit,
+settlement, securities brokerage, custody, franchise treasury business and securities trading, foreign currency exchange,
+global cash management, investment banking and corporate financial consulting, as well as personal banking services. At
+the end of 2019, Bank ICBC (JSC) recorded total assets of USD961 million and net assets of USD206 million. It generated a
+net profit of USD22.50 million during the year.
+ICBC Investments Argentina (Argentina)
+Inversora Diagonal (Argentina)
+56
+ICBC FINANCIAL LEASING CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the
+Bank holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other
+businesses as approved by CSRC, and owns many business qualifications including mutual fund, QDII, enterprise annuity,
+specific asset management, domestic and overseas investment manager of social security fund, RQFII, insurance asset
+management, non-listed asset management, occupational annuity, manager of basic pension insurance investment. It is one
+of the fund companies with the most comprehensive qualifications in the industry. ICBC Credit Suisse Asset Management
+(International) and ICBC Credit Suisse Investment Management Co., Ltd. are structured under ICBC Credit Suisse Asset
+Management. At the end of 2019, ICBC Credit Suisse Asset Management managed a total of 143 mutual funds and nearly
+500 enterprise annuity accounts and segregated management accounts as well as non-listed assets portfolios, with the
+assets under management amounting to RMB1.29 trillion, and recorded total assets of RMB11,042 million and net assets of
+RMB9,341 million. It generated a net profit of RMB1,536 million during the year.
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+Major Domestic Subsidiaries
+ICBC (Argentina), a controlled subsidiary of the Bank in Argentina, has a share capital of ARS1,345 million, in which the
+Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) provides a full range of
+commercial banking services including working capital loan, syndicated loan, structured financing, trade finance, personal
+loan, auto loan, spot/forward foreign exchange trading, financial markets, cash management, investment banking, bond
+underwriting, asset custody, leasing, international settlement, E-banking, credit card, asset management, etc. At the end of
+2019, ICBC (Argentina) recorded total assets of USD3,622 million and net assets of USD490 million. It generated a net profit
+of USD217 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD120 million. Holding a full-
+functional commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement,
+trade finance, foreign exchange trading, E-banking and other services. At the end of 2019, ICBC (Peru) recorded total assets
+of USD526 million and net assets of USD106 million. It generated a net profit of USD5.09 million during the year.
+ICBC
+ICBC PERU BANK
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+Discussion and Analysis
+55
+Annual Report 2019
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN1,597 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) offers corporate deposit, loan, international settlement, trade finance,
+foreign exchange trading and other services. At the end of 2019, ICBC (Mexico) recorded total assets of USD260 million and
+net assets of USD56 million. It suffered a net loss of USD17.67 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD208.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) provides corporate and retail banking
+services such as deposit, loan, settlement and remittance, trade finance, foreign exchange trading, funds clearing, cross-
+border RMB settlement, RMB currency notes, cash management, E-banking, bank card and investment and financing
+information consulting service. At the end of 2019, ICBC (Canada) recorded total assets of USD1,509 million and net assets
+of USD270 million. It generated a net profit of USD21.06 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+ICBC (Brasil), a wholly-owned subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million. ICBC (Brasil) offers
+commercial banking and investment banking services such as deposit, loan, trade finance, international settlement, fund
+transaction, franchise wealth management and financial advisory. At the end of 2019, ICBC (Brasil) recorded total assets of
+USD552 million and net assets of USD54 million. It suffered a net loss of USD50 thousand during the year.
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers securities brokerage services including securities
+clearing and financing for institutional customers. At the end of 2019, ICBCFS recorded total assets of USD23,983 million
+and net assets of USD91 million. It suffered a net loss of USD13.32 million during the year.
+Discussion and Analysis
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB12,505 million, in which the Bank holds a 60% stake.
+ICBC-AXA engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance,
+and re-insurance of these businesses, businesses in which use of insurance capital is permitted by laws and regulations
+of the State, and other businesses approved by the CBIRC. At the end of 2019, ICBC-AXA recorded total assets of
+RMB160,762 million and net assets of RMB14,825 million. It generated a net profit of RMB1,258 million during the year.
+ICBC (Argentina) (Argentina)
+ICBC
+58
+In November 2019, ICBC joined hands with Standard Bank Group to participate in the Second China International
+Import Expo to seek business opportunities for customers from Africa as a matchmaker. During the Import Expo,
+Standard Bank launched the Africa-China Export Proposition (ACEP) service to provide rapid export process guidance
+for African exporters to explore the Chinese market, and a set of export value chain services. In 2019, ICBC and
+Standard Bank jointly launched the Africa-China Agent Proposition (ACAP) service, which can provide a package of
+comprehensive services for Chinese suppliers and importers in Africa, and is now launched in eight African countries
+including Nigeria, Ghana, Kenya and South Africa. In December 2019, Standard Bank took the lead in launching
+UnionPay digital platform for customers in China and South Africa to facilitate their economic trade and tourism. As
+the only UnionPay card issuer among local mainstream banks in South Africa, Standard Bank is also the first local
+mainstream bank in Africa that provides internet banking service in Chinese language in Africa. In 2019, Standard
+Bank continued to promote the service in its branches in Africa to effectively solve the difficulties for Chinese
+enterprises and individuals to use local financial services in Africa.
+In 2008, ICBC acquired a 20% stake in Standard Bank Group and became its single largest shareholder. At present,
+ICBC and Standard Bank have established and maintained close strategic cooperation relationship, and the two banks
+have carried out in-depth and extensive cooperation in many fields, providing comprehensive and rich financial services
+for China-Africa economic and trade exchanges and the Belt and Road Initiative.
+Founded in 1862, Standard Bank Group, headquartered in Johannesburg, South Africa, operates in 20 African
+countries and has offices in cities including Beijing, London, New York, Dubai and Sao Paulo. It is an integrated
+financial service group based in Africa and operating in the international market. The Standard Bank Group, which is
+listed on multiple exchanges such as the Johannesburg Stock Exchange in South Africa, is the largest bank group in
+Africa in terms of assets. The Standard Bank Group has more than 50 thousand employees worldwide, and its main
+business covers three business units, namely, Personal and Business Banking (PBB), Corporate and Investment Banking
+(CIB), and Wealth. It provides insurance financial services as well through Liberty Holdings Limited, a listed subsidiary in
+South Africa. In 2019, Standard Bank was named the "Best Bank in Africa" and "Best Bank in South Africa" by Global
+Finance, the "Best Bank in South Africa" by The Banker and the largest bank in Africa (ranking by tier 1 capital).
+Standard Bank Group
+A Strategic Partner in the African Continent
+ICBC-AXA ASSURANCE CO., LTD.
+Discussion and Analysis
+Annual Report 2019
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.06% ordinary shares of Standard Bank. Based on mutual
+benefit and win-win cooperation, the two sides furthered their cooperation in equity cooperation, customer expansion,
+project financing, product innovation, risk management, FinTech and staff exchange. At the end of 2019, Standard
+Bank recorded total assets of ZAR2,275,589 million and net assets of ZAR209,484 million. It generated a net profit of
+ZAR30,696 million during the year.
+STANDARD BANK GROUP LIMITED
+Majority Equity Participation Company
+ICBC Wealth Management, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB16.0 billion. It engages
+mainly in the issuance of wealth management products, wealth management advisory and consulting service and other
+activities approved by CBIRC. Qualified for general derivatives trading and foreign exchange business, it is the first wealth
+management subsidiary of a bank approved by regulators in China. At the end of 2019, ICBC Wealth Management recorded
+total assets of RMB16,397 million and net assets of RMB16,330 million. It generated a net profit of RMB330 million during
+the year.
+ICBC WEALTH MANAGEMENT CO., LTD.
+ICBC Investment, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB12.0 billion and is one of the first
+pilot banks in China to conduct debt-for-equity swap authorized by the State Council. It holds the franchise license of non-
+bank financial institution and is mainly engaged in debt-for-equity swap and the supporting business. In 2019, ICBC Capital
+Management Co., Ltd., a private equity fund management subsidiary of ICBC Investment, was licensed to be a private
+equity fund manager. At the end of 2019, ICBC Investment recorded total assets of RMB129,567 million and net assets of
+RMB14,027 million. It generated a net profit of RMB563 million during the year.
+ICBC FINANCIAL ASSET INVESTMENT CO., LTD.
+57
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB18.0 billion. It mainly operates the
+financial leasing of large-scale equipment in critical fields such as aviation, shipping, energy and power, rail transit and
+equipment manufacturing. It also engages in various financial and industrial services including leased assets trading,
+securitization of investment assets, assets management and economic consulting. At the end of 2019, ICBC Leasing
+recorded total assets of RMB270,981 million and net assets of RMB36,206 million, and generated a net profit of
+RMB3,436 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a
+97.86% stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan,
+trade finance, remittance, settlement, leasing and consulting. At the end of 2019, ICBC (Thai) recorded total assets of
+USD8,426 million and net assets of USD1,049 million. It generated a net profit of USD73.56 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR833 million,
+it is able to provide a full range of commercial banking services. At the end of 2019, ICBC (Malaysia) recorded total assets of
+USD1,237 million and net assets of USD285 million. It generated a net profit of USD12.29 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR3.71 trillion, in which the Bank holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loans, trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the
+end of 2019, ICBC (Indonesia) recorded total assets of USD3,806 million and net assets of USD423 million. It generated a
+net profit of USD31.08 million during the year.
+PT. BANK ICBC INDONESIA
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2019, ICBC (Macau) recorded total assets of USD43,860 million
+and net assets of USD3,275 million. It generated a net profit of USD374 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+Annual Report 2019
+ICBC International, a licensed integrated platform for financial services in Hong Kong that is wholly owned by the Bank,
+has a paid-up capital of HKD4,882 million. It mainly renders a variety of financial services, including corporate finance,
+investment management, sales and trading, and asset management. At the end of 2019, ICBC International recorded total
+assets of USD8,521 million and net assets of USD1,378 million. It generated a net profit of USD200 million during the year.
+ICBC (Asia) is a wholly-owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD44,188 million.
+It provides comprehensive commercial banking services and the major businesses, including commercial credit, trade finance,
+investment service, retail banking, e-banking, custody, credit card, receiving bank services for IPOs and dividend distribution
+etc. At the end of 2019, ICBC (Asia) recorded total assets of USD122,446 million and net assets of USD 17,189 million. It
+generated a net profit of USD1,066 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+Major Overseas Subsidiaries
+Major Controlled Subsidiaries and Equity Participating Company
+Discussion and Analysis
+Europe-
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD369 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2019, ICBC (USA) recorded total assets of USD2,902 million and net assets of USD441 million. It generated a net
+profit of USD23.01 million during the year.
+E
+ICBC INTERNATIONAL HOLDINGS LIMITED
+53
+E
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+Discussion and Analysis
+ICBC AUSTRIA BANK GmbH
+ICBC TURKEY BANK ANONIM ŞIRKETI
+Discussion and Analysis
+ICBC
+54
+BANK ICBC (JOINT STOCK COMPANY)
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million, in
+which the Bank holds a 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses such
+as base metals, precious metals, commodities and energy as well as global financial markets businesses such as exchange
+rate, interest rate and credit. At the end of 2019, ICBC Standard Bank recorded total assets of USD24,765 million and net
+assets of USD1,179 million. It suffered a net loss of USD243 million during the year.
+ICBC STANDARD BANK PLC
+ICBC (Turkey), a subsidiary of the Bank in Turkey, has a share capital of TRY860 million, in which the Bank holds a 92.84%
+stake. It holds commercial banking, investment banking and asset management licenses, and provides corporate customers
+with comprehensive financial services including deposit, project loan, syndicated loan, trade finance, small and medium-
+sized enterprise loan, investment and financing advisory, securities brokerage and asset management, and renders personal
+customers with financial services such as deposit, consumption loan, residential mortgages, credit card and E-banking. At the
+end of 2019, ICBC (Turkey) recorded total assets of USD3,093 million and net assets of USD229 million. It generated a net
+profit of USD12.27 million during the year.
+ICBC (LONDON) PLC
+ICBC (Europe), a wholly-owned subsidiary bank of the Bank, was incorporated in Luxembourg with a paid-up capital of
+EUR437 million. Paris Branch, Brussels Branch, Amsterdam Branch, Milan Branch, Madrid Branch, Warsaw Branch and
+Greece Representative Office are structured under ICBC (Europe), which mainly offers financial services including loan,
+trade finance, settlement, treasury, investment banking, custody, franchise wealth management, etc. At the end of
+2019, ICBC (Europe) recorded total assets of USD6,200 million and net assets of USD700 million. It suffered a net loss of
+USD25.69 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD234 million. ICBC
+(New Zealand) provides corporate and personal banking services such as account management, transfer and remittance,
+international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the end of 2019,
+ICBC (New Zealand) recorded total assets of USD1,534 million and net assets of USD173 million. It generated a net profit of
+USD15.45 million during the year.
+ICBC (Austria), a wholly-controlled subsidiary of the Bank in Austria, has a share capital of EUR100 million. ICBC (Austria)
+provides financial services such as corporate deposit, loan, trade finance, international settlement, cash management, cross-
+border RMB business, foreign exchange transactions, and financial advisory for cross-border investment and financing. At the
+end of 2019, ICBC (Austria) recorded total assets of USD372 million and net assets of USD107 million. It suffered a net loss
+of USD4.31 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of
+KZT8,933 million. It principally engages in commercial banking services such as deposit, loan, international settlement and
+trade finance, foreign currency exchange, guarantee, account management, internet banking and bank card service. At the
+end of 2019, ICBC (Almaty) recorded total assets of USD548 million and net assets of USD68 million. It generated a net
+profit of USD12.02 million during the year.
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital of
+USD200 million. It provides banking services such as deposit and exchange, loans, trade finance, international settlement,
+funds clearing, foreign exchange trading and retail banking. At the end of 2019, ICBC (London) recorded total assets of
+USD2,262 million and net assets of USD445 million. It generated a net profit of USD19.54 million during the year.
+3,302
+3,302
+Recoveries of loans
+transfer out
+(97,653)
+5
+(97,562)
+(91)
+34
+(214)
+(248)
+162,322
+86,944
+28,014
+47,364
+and advances
+Charge/(reverse)
+Write-offs and
+previously written off
+78,494
+244
+(5)
+In RMB millions, except for percentages
+Discussion and Analysis
+DISTRIBUTION OF LOANS BY COLLATERAL
+ICBC
+64
+As at the end of 2019, the allowance for impairment losses on loans stood at RMB478,730 million, of which
+RMB478,498 million at amortised cost, and RMB232 million at fair value through other comprehensive income. Allowance to
+NPLs was 199.32%, showing an increase of 23.56 percentage points over the end of last year; allowance to total loans ratio
+was 2.86%, showing an increase of 0.18 percentage points.
+Note: Please see "Note 23. to the Financial Statements: Loans and Advances to Customers" for details.
+31 December 2019
+(0)
+232
+227
+478,498
+184,688
+215,316
+Balance at
+(0)
+(2,204)
+(2,580)
+132
+Other movements
+29,714
+1.43
+(959)
+158,084
+Balance at
+Stage 3
+Stage 2
+Stage 1
+Item
+at FVOCI
+at amortised cost
+Movements of allowance for impairment losses on
+loans and advances to customers measured
+In RMB millions
+Movements of allowance for impairment losses on
+loans and advances to customers measured
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+1.52
+235,084
+100.0
+15,419,905
+At 31 December 2018
+240,187
+100.0
+81,406
+(28,755)
+173,241
+Stage 1
+to stage 3
+5
+(5,907)
+12,775
+(6,868)
+to stage 2
+(2,464)
+(14,987)
+17,451
+to stage 1
+Transfer:
+1 January 2019
+446
+248
+0
+198
+Total
+Stage 3
+Stage 2
+Total
+412,731
+At 31 December 2019
+0.17
+Percentage
+1 to 3 years
+Over 3 years
+Total
+In RMB millions, except for percentages
+At 31 December 2019
+At 31 December 2018
+% of total
+% of total
+Amount
+3 months to 1 year
+loans
+loans
+83,084
+0.50
+91,153
+0.59
+89,625
+0.53
+83,846
+Amount
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+45.8
+16,761,319
+Pledged loans
+1,427,911
+8.5
+1,256,196
+8.1
+Guaranteed loans
+2,078,921
+12.4
+2,157,264
+14.0
+Unsecured loans
+Total
+5,369,713
+16,761,319
+32.0
+100.0
+4,950,419
+15,419,905
+32.1
+100.0
+0.54
+Percentage
+66,848
+63,010
+Borrower B
+Borrower C
+Transportation, storage and postal services
+Transportation, storage and postal services
+Manufacturing
+98,100
+0.6
+59,861
+0.5
+48,651
+loans
+0.3
+47.1
+7,884,774
+Loans secured by mortgages
+(%)
+Amount
+(%)
+Amount
+Item
+7,056,026
+Amount
+Industry
+Borrower
+Borrower A
+0.41
+28,659
+31,923
+0.21
+268,216
+1.60
+269,932
+1.75
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Overdue loans stood at RMB268,216 million, representing a decrease of RMB1,716 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB185,132 million, representing an increase of
+RMB6,353 million.
+RESCHEDULED LOANS
+Rescheduled loans and advances amounted to RMB7,319 million, representing an increase of RMB108 million as compared
+to the end of the previous year. Rescheduled loans and advances overdue for over 3 months amounted to RMB1,335 million,
+representing an increase of RMB192 million.
+Annual Report 2019
+65
+Discussion and Analysis
+BORROWER CONCENTRATION
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted
+for 3.1% and 12.6% of the Bank's net capital base respectively. The total amount of loans granted to the top ten single
+customers was RMB394,406 million, accounting for 2.4% of the total loans. The table below shows the details of the loans
+granted to the top ten single borrowers of the Bank as at the end of 2019.
+In RMB millions, except for percentages
+% of total
+0.40
+0.55
+At 31 December 2018
+10.2
+15,419,905
+100.00
+The asset quality continued to improve. As at the end of 2019, according to the five-category classification, pass loans
+amounted to RMB16,066,266 million, representing an increase of RMB1,332,375 million when compared with the end
+of the previous year and accounting for 95.86% of total loans. Special mention loans stood at RMB454,866 million,
+representing an increase of RMB3,936 million, and accounting for 2.71% of the total, with a drop of 0.21 percentage
+points. NPLs amounted to RMB240,187 million, showing an increase of RMB5,103 million, and NPL ratio was 1.43%, with a
+drop of 0.09 percentage points.
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2019
+Percentage
+NPL ratio
+Percentage
+NPL ratio
+100.00
+Item
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Corporate loans
+9,955,821
+59.4
+Loan
+16,761,319
+0.23
+35,880
+(%)
+16,066,266
+95.86
+14,733,891
+95.56
+454,866
+2.71
+450,930
+2.92
+240,187
+1.43
+235,084
+1.52
+97,864
+0.58
+108,821
+0.70
+113,965
+0.68
+90,383
+0.59
+28,358
+0.17
+200,722
+2.02
+9,418,894
+61.0
+235,084
+1.52
+Corporate NPLs were RMB200, 722 million, showing an increase of RMB6,026 million when compared with the end of the
+previous year, and representing a NPL ratio of 2.02%, with a drop of 0.05 percentage points. Personal NPLs amounted
+to RMB38,842 million, showing a decrease of RMB1,278 million, and represented a NPL ratio of 0.61%, with a drop of
+0.10 percentage points.
+62
+ICBC
+Discussion and Analysis
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+In RMB millions, except for percentages
+At 31 December 2019
+At 31 December 2018
+Percentage
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+100.0
+Amount
+15,419,905
+240,187
+194,696
+2.07
+Discounted bills
+421,874
+2.5
+623
+0.15
+364,437
+2.4
+268
+0.07
+Personal loans
+6,383,624
+38.1
+38,842
+0.61
+5,636,574
+36.6
+40,120
+0.71
+Total
+16,761,319
+100.0
+1.43
+Transportation, storage
+(%)
+Percentage
+Credit risk
+Liquidity risk, interest rate risk
+in the banking book
+Risk Management
+Department
+Credit and Investment
+Management Department
+Asset & Liability
+Management Department
+Internal Control &
+Operational risk, compliance risk Compliance Department
+Reputational risk
+Strategic risk
+IT risk
+country risk
+Legal risk
+Office of Steering Group
+for Deepening Reform
+Financial Technology
+Department
+Legal Affairs Department
+Board of directors of subsidiaries
+Management of Branches
+Senior management of subsidiaries
+Business departments of
+branches and subsidiaries
+First line of defense
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Executive Office
+Enterprise risk, market risk,
+the Board of Directors
+the Board of Directors
+RISK MANAGEMENT
+Discussion and Analysis
+Enterprise Risk Management System
+Enterprise risk management is a process to effectively identify, assess, measure, monitor, control or mitigate and report risks
+in order to ensure the realization of the Group's operating and strategic objectives by setting up effective and balanced risk
+governance structure, fostering robust and prudent risk culture, formulating unified risk management strategies and risk
+appetite, and implementing the risk limit and risk management policies. The principles of enterprise risk management of the
+Bank include full coverage, matching, independence, perspectiveness and effectiveness, etc.
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+Senior Executive
+Vice Presidents
+Chief Risk Officer
+Business departments
+Corporate Banking
+Department
+Personal Banking
+Department
+Institutional Banking
+Department
+Bank Card
+Department
+Global Market
+Department
+Board of Directors
+President
+Board of Supervisors
+Risk Management Committee
+US Risk Committee of
+Audit Committee of
+of the Board of Directors
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+-Second line of defense
+Primary reporting line
+Secondary reporting line
+Credit Risk
+Management Committee
+The Bank continued to perfect policies on personal loans. Focusing on personal loan risk inspection and governance, the
+Bank studied and analyzed the risk of granting loans to second-hand housing projects in key areas and the quality of new
+personal loans. It conducted inspections on personal loan management system reform and collateral management, and
+continued to examine in-depth personal loans. The Bank strengthened daily monitoring of and early warning inspection
+on personal loan risks, optimized its early warning models, and conducted inspections on false mortgage and risk projects
+across the board. It intensified efforts to collect and dispose personal NPLs and actively promoted the securitization of
+personal NPLs.
+Credit Risk Management of Credit Card Business
+The Bank improved policies on credit card risk management. It continued to improve credit granting policies, and promoted
+the development and upgrading of intelligent inspection and approval system, so as to make the Bank's credit management
+smarter. It promoted the building of a big data-based risk control system, and continuously improved access models and
+business strategies by introducing multidimensional external data such as credit reference information of the PBC. BLAZE, a
+decision-making engine, was further put into use in credit card issuance and limit adjustment to make risk control smarter.
+The Bank continued to improve the grade-based management and control system for high default risks arising from the
+lending process, and established a mechanism whereby credit limit of high-risk customers from all channels in the lending
+process can be managed and controlled in a dynamic manner, thus taking the initiative in strengthening management and
+control over high-default and high-risk customers in the lending process.
+Credit Risk Management of Treasury Operations
+Based on the strict implementation of bank-wide, unified credit risk management policy requirements, the Bank
+strengthened pre-investment analysis and management throughout the term of business on credit risk exposed to
+investment business, did a good job in potential risk analysis and inspection, and intensified the monitoring of existing bonds
+in key risk industries. It strictly implemented the regulatory requirements for currency market transactions, strengthened ex-
+ante examination on credit risks of counterparties and collateral, and implemented differentiated and tiered management
+in accordance with the result. The Bank paid close attention to changes in counterparties' qualification, pledged bond value
+and all types of market information, and took proactive measures to prevent risks. The Bank actively promoted the signing of
+ISDA, NAFMII and other legal agreements regarding derivatives, strictly managed and controlled the counterparty credit limit
+through the Global Financial Market Transaction platform, and strengthened regular monitoring and dynamic management
+of client margins and credit limit.
+Annual Report 2019
+61
+Discussion and Analysis
+Credit Risk Analysis
+At the end of 2019, the Bank's maximum exposure to credit risk, without taking into account any collateral and other credit
+enhancements, was RMB32,146,145 million, an increase of RMB1,963,393 million compared with the end of the previous
+year. Please refer to "Note 51. (a)(i) to the Financial Statements: Maximum Exposure to Credit Risk Without Taking Account
+of Any Collateral and Other Credit Enhancements". For mitigated risk exposures of credit risk asset portfolio of the Bank,
+please refer to the section headed "Credit Risk" of the 2019 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited.
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Item
+Pass
+Special mention
+NPLs
+Substandard
+Doubtful
+Loss
+Total
+At 31 December 2019
+In RMB millions, except for percentages
+At 31 December 2018
+Percentage
+Credit Risk Management of Personal Loans
+Amount
+The Bank strengthened risk management in the real estate industry. It made efforts to guarantee public wellbeing in real
+estate industry, strengthened real estate classification, and continued to support first-tier and key second-tier cities featuring
+solid economic foundation and net inflow of population, and whose real estate markets have medium and long-term
+development potential. Specifically, it mainly supported ordinary commercial housing projects aimed to satisfy rigid demands
+that are in line with regulatory policies. The Bank proactively and prudently promoted financing for commercial rental
+housing projects, and for building government-subsidized housing projects in compliance with laws and regulations, and
+strictly controlled financing for commercial property development and shantytown renovation projects for commercial use.
+The Bank intensified credit risk management of small and micro enterprises. It proactively applied the FinTech means to
+comprehensively integrate data information inside and outside the Bank, continued to optimize dynamic model monitoring
+mechanism, and embedded data models into the whole risk management process including pre-lending customer access
+screening, analysis and decision-making in the lending process and post-lending supervision and warning, to build an
+online financing risk management system featured "data-driven, intelligent warning, dynamic management and continuous
+operation". Moreover, the Bank strengthened the risk prevention and control responsibilities of special institutions such as
+the inclusive finance departments and small and micro centers at branches, and improved the entire risk management system
+covering customer access and post-lending management, so as to build a closed loop for efficient risk management.
+ICBC
+Market Risk
+Management Committee
+Operational Risk
+Management Committee
+Internal Audit Bureau
+Internal Audit Sub-bureau
+- Third line of defense
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+At the level of branches
+At the level of Head Office
+At the level of a Beard of Directors
+In 2019, the Bank continued to push for development of the enterprise risk management system, strengthened risk data
+governance, and upgraded risk management technologies and methods, so as to make enterprise risk management
+more forward-looking and effective. It further improved the enterprise risk management system, enhanced risk appetite
+transmission and limit management and control, and intensified the capability of risk response and crisis management. The
+Bank enhanced the Group's foundation for consolidated risk management, boosted business penetration of non-banking
+subsidiaries, and strengthened regional risk management of overseas institutions. It enhanced its capability of managing
+cross risks, strengthened risk management and control of cooperative institutions, and promoted the application of the
+Group's investment and financing risk monitoring platform to achieve risk data integration involving different risks, markets,
+institutions and products. The Bank actively advanced FinTech application such as big data, developed an intelligent risk
+monitoring system and enterprise-level anti-fraud platform, and continued to upgrade risk measurement models for better
+application.
+Annual Report 2019
+59
+Discussion and Analysis
+Credit Risk
+Credit Risk Management
+Credit risk is the risk where loss is caused to the banking business when the borrower or counterparty fails to meet its
+contractual obligations. The Bank's credit risks mainly originate from loans, treasury operations (including due from banks,
+placements with banks, reverse repurchase agreements, corporate bonds and financial bonds investment), receivables and
+off-balance sheet credit business (including guarantees, commitments and financial derivatives trading).
+The Bank strictly adheres to regulatory requirements regarding credit risk management, diligently fulfills established
+strategies and objectives under the leadership of the Board of Directors and the Senior Management, and implements
+an independent, centralized and vertical credit risk management mode. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of credit risk management. The Senior Management is responsible for executing the
+strategies, overall policy and system regarding credit risk management approved by the Board of Directors. The Credit Risk
+Management Committee of the Senior Management is the reviewing and decision-making organ of the Bank in respect of
+credit risk management, is responsible for reviewing material and important affairs of credit risk management, and performs
+its duty in accordance with the Charters of the Credit Risk Management Committee. The credit and investment management
+departments at different levels undertake the responsibility of coordinating credit risk management at respective levels, and
+the business departments implement credit risk management policies and standards for their respective business areas in
+accordance with their functions.
+The Bank's credit risk management has the following characteristics: (1) Unified risk appetite. Unified credit risk appetite is
+implemented for the Bank's credit risk exposures; (2) Entire-process management. The credit risk management covers the
+entire process including customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and
+post-lending monitoring; (3) System management. It continues to enhance the building of credit information system, and
+improve the tools to manage and control credit risk; (4) Strict management over credits. Strict qualification management is
+enforced on the business institutions and the credit practitioners. The Bank supervises and inspects its credits to promote
+compliant and robust operation; (5) The specialized institution is set up to conduct unified risk monitoring over credit
+risk businesses; and (6) The specialized institution is established to effectively coordinate management. The Bank directly
+participates in the collection and disposal of non-performing assets ("NPAS") in a timely manner or guides its branches to do
+SO.
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months in default, anticipated loss rate, credit rating,
+collateral and other quantitative and qualitative factors.
+Credit Risk Management of Corporate Loans
+The Bank continued to strengthen the building of the credit policy system. It revised the regulations on the uniform risk limit
+management for investment and financing of corporate customers across the board, and formulated basic provisions, basic
+procedures, calculation methods and occupation rules concerning uniform investment and financing risk limit management.
+Further advances have been made in improving the customer-oriented limit management system and strengthening the
+coordinated management of the Group's overall credit risks.
+The Bank emphasized the leading role of credit policy. It proactively supported infrastructure projects under construction
+and major projects to strengthen areas of weakness, and gave top priority to advancing high-quality development of
+manufacturing. It stepped up efforts to support the financing needs of service industries related to people's livelihood,
+including healthcare, education, elderly care, tourism and culture, and fully implemented the development strategies for
+private enterprises and inclusive finance. The Bank enhanced the connection between industrial and regional policies, and
+strived to meet requirements of China's major regional strategies, with a focus on the investment and financing business
+development and innovation in key areas such as the Guangdong-Hong Kong-Macau Greater Bay Area, the coordinated
+development of Beijing-Tianjin-Hebei and the Yangtze River Delta Integration as well as the investment and financing needs
+of Xiongan New Area.
+60
+Discussion and Analysis
+8,725
+2,131,892
+17,466
+(%)
+NPLs
+ratio (%)
+Loan
+(%)
+NPLs
+ratio (%)
+Head Office
+774,578
+4.6
+Loan
+20,725
+723,302
+4.7
+20,036
+2.77
+Yangtze River Delta
+3,124,793
+18.6
+26,024
+0.83
+2,823,603
+2.68
+Item
+NPL
+Percentage
+191,146
+2.4
+4,962
+2.60
+Total
+8,559,942
+100.0
+192,093
+2.24
+7,973,527
+100.0
+186,416
+2.34
+In 2019, the Bank earnestly implemented the requirements of serving the real economy and preventing and mitigating
+material risks, and continued to improve the industry's credit structure. Loans to transportation, storage and postal services
+increased by RMB237,467 million as compared with the end of the previous year, representing a growth rate of 12.5%,
+I mainly due to the Bank's efforts to meet financing needs of developing expressways and urban rail transit. Loans to
+water, environment and public utility management grew by RMB140,283 million, representing a growth rate of 18.2%,
+mainly for meeting financing needs arising from significant projects and projects for people's livelihood in the areas of
+urban infrastructure, environmental protection and public services. Loans to leasing and commercial services increased by
+RMB139,201 million, representing a growth rate of 13.3%, mainly for supporting the financing needs of developing projects
+for people's wellbeing, projects for strengthening areas of weakness in infrastructure, and for infrastructure in such strategic
+planned areas as national new areas, free trade zones, and industrial clusters.
+Annual Report 2019
+63
+Discussion and Analysis
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+At 31 December 2019
+In RMB millions, except for percentages
+Borrower D
+Percentage
+NPL
+18.4
+24,195
+0.86
+Pearl River Delta
+2,991,010
+17.8
+40,164
+1.34
+2,735,901
+17.7
+35,572
+1.30
+Northeastern China
+798,691
+4.8
+35,944
+4.50
+759,140
+4.9
+25,186
+3.32
+Overseas and others
+Total
+1,546,077
+9.2
+9,026
+0.58
+1,578,574
+Western China
+3.43
+1.65
+14.3
+2,341,370
+14.0
+23,629
+1.01
+2,072,857
+13.4
+30,480
+1.47
+Bohai Rim
+2,739,585
+16.3
+49,037
+1.79
+2,524,307
+16.4
+54,489
+2.16
+Central China
+2,445,215
+14.7
+35,638
+1.46
+2,202,221
+36,401
+24.9
+6,511
+190,096
+10.9
+1,900
+0.20
+919,768
+11.5
+2,113
+0.23
+of electricity, heat,
+gas and water
+Water, environment
+934,414
+910,504
+4,122
+0.45
+770,221
+9.7
+1,718
+0.22
+and public utility
+management
+Real estate
+638,055
+10.6
+Production and supply
+commercial services
+0.60
+0.82
+1,894,425
+23.8
+15,016
+0.79
+and postal services
+Manufacturing
+1,445,154
+16.9
+73,976
+5.12
+1,385,463
+17.4
+79,790
+5.76
+Leasing and
+1,187,749
+13.9
+11,664
+0.98
+1,048,548
+13.2
+6,279
+7.5
+10,936
+1.71
+592,031
+2.1
+1,461
+0.86
+culture and sanitation
+Mining
+166,434
+2.0
+7,305
+4.39
+185,313
+2.3
+3,966
+2.14
+Lodging and catering
+88,448
+1.0
+7,163
+8.10
+95,530
+1.2
+4,951
+5.18
+Others
+170,315
+2.3
+1.54
+2.4
+7.4
+9,823
+1.66
+Wholesale and retail
+406,532
+4.7
+42,492
+10.45
+488,031
+6.1
+52,588
+10.78
+Construction
+252,104
+2.9
+5,344
+2.12
+232,736
+2.9
+3,749
+1.61
+Science, education,
+208,560
+3,214
+Transportation, storage and postal services.
+5
+0.3
+372,187
+Exposure of on-balance sheet foreign
+RMB
+Item
+At 31 December 2018
+At 31 December 2019
+In RMB (USD) millions
+USD
+equivalent
+53,453
+FOREIGN EXCHANGE EXPOSURE
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities. The Bank's objective of currency
+risk management is to control the impact of exchange rate fluctuations on the Bank's financial position and shareholders'
+equity within a tolerable extent. The Bank mitigates such risk principally by limit management and hedging of risks. The Bank
+carries out sensitivity analysis and stress testing of currency risk on a quarterly basis, and submits currency risk reports to the
+Senior Management and the Market Risk Management Committee.
+Currency Risk Management
+The Bank continued to strengthen trading book market risk management and product control, adopted the value-at-risk
+(VAR), stress testing, sensitivity analysis, exposure analysis, profit/loss analysis, price monitoring and other means to measure
+and manage trading book products. It continued to improve the portfolio-based market risk limit management system,
+refined the limit indicator system and dynamic management mechanism to meet the requirements of new products and
+businesses for timeliness, and realized quick and flexible limit monitoring and dynamic adjustments based on the GMRM
+system. For VaR of the trading book, please refer to "Note 51. (c)(i) to the Financial Statements: VaR".
+Management of Market Risk in the Trading Book
+Discussion and Analysis
+67
+Annual Report 2019
+In 2019, the Bank closely watched the changes in external environment and market conditions, actively took a combination
+of measures such as limit management and hedging of risks to adjust and optimize the aggregate amount and structure of
+foreign exchange assets and liabilities, and strengthened assets and liabilities currency structure management and capital
+fund preservation management of overseas institutions. The currency risk of the Bank was under control.
+In 2019, the Bank continued to improve the Group's market risk management, deepened the establishment of a market
+risk management system at the Group's level, and strengthened market risk management of overseas institutions. The Bank
+improved the group-wide market risk appetite limit transmission mechanism, conducted forward-looking analysis on the
+Group's interest rate risk and currency risk in a timely manner, improved regulations on market data quality management,
+and revised measures to better manage market risk reports. The Bank pushed ahead with the market risk management
+system for better performance, enhanced upgrade, management and application of functions such as stress testing, and
+continuously pushed forward the application and promotion of the Global Market Risk Management (GMRM) system.
+USD
+equivalent
+47,729
+44,365
+ICBC
+Please refer to the section headed "Market Risk" of the 2019 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited issued by the Bank for further information on market risk capital measurement.
+Please refer to "Note 51. (c)(ii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+24,783
+170,270
+28,043
+RMB
+327,917
+195,264
+exchange items, net
+(22,946)
+(157,647)
+(25,410)
+(176,923)
+Exposure of off-balance sheet foreign
+exchange items, net
+Total foreign exchange exposure, net
+The Bank strictly complies with regulatory requirements on market risk management, has implemented an independent,
+centralized and coordinated market risk management model, and formed a management organizational structure featuring
+the segregation of the front, the middle and the back offices in the financial market business. The Board of Directors
+assumes the ultimate responsibility for monitoring market risk management. The Senior Management is responsible for
+executing the strategies, overall policy and system concerning market risk management approved by the Board of Directors.
+The Market Risk Management Committee of the Senior Management is the reviewing and decision-making organ of the
+Bank in respect of market risk management, is responsible for reviewing material affairs of market risk management,
+and performs its duty in accordance with the Working Regulations for the Market Risk Management Committee. The
+risk management departments at different levels undertake the responsibility of coordinating market risk management
+at respective levels, and the business departments implement market risk management policies and standards for their
+respective business areas in accordance with their functions.
+68
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, stock prices and commodity prices). The Bank is primarily exposed to
+interest rate risk and currency risk (including gold).
+0.1
+21,493
+Transportation, storage and postal services
+Borrower H
+0.1
+21,997
+Finance
+Borrower I
+Borrower G
+22,496
+Manufacturing
+Borrower F
+0.2
+36,129
+Borrower E
+Market risk management is the process of identifying, measuring, monitoring, controlling and reporting market risk for
+the purposes of setting up and enhancing the market risk management system, specifying responsibilities and process,
+determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+0.1
+Transportation, storage and postal services
+Transportation, storage and postal services
+0.1
+20,836
+Market Risk
+The Bank consolidated the whole-process risk management of asset management business covering pre-investment
+approval, in-process monitoring and post-investment management, and fully implemented the requirements of new wealth
+management rules. In respect of pre-investment approval, the Bank established and improved examination and approval
+systems and policies of ICBC Wealth Management to steadily advance pre-investment review. It formulated new regulations
+on credit bond investment, upgraded credit rating system and business processes, and developed a credit rating bond
+base with tiered and classified management to improve credit rating efficiency. With respect to in-process monitoring, the
+Bank made active efforts to monitor risks on all fronts and based on this developed a tool for monitoring changes in bond
+implied ratings. It continued to enrich monitoring methods to efficiently monitor changes in investment prices. The Bank
+kept abreast of internal and external information in an all-around way to identify potential risk factors. Under the Group's
+uniform risk management strategy framework, the Bank established more flexible, independent and market-oriented risk
+control indicators to better manage and control risks across the board. In terms of post-investment, the Bank achieved
+complete and thorough post-investment examination and risk inspection, actively pushed for better overall asset quality, and
+made post-investment management more professional and procedure-based.
+Discussion and Analysis
+ICBC
+The Bank actively implemented the requirements of New Rules on Asset Management, continued to develop a system for
+managing asset management risk, and promoted the sound development of asset management business. Based on its actual
+business conditions, the Bank revised fundamental administrative policies for non-standard agency investment business, and
+strengthened the refined and differentiated management of such key businesses as public entrusted loans, asset-backed
+securities and debt-for-equity swap. It improved the foundation of risk management and control over approval authorization
+for agency investment risk and archive management. Efforts were made to build an IT system for asset management
+business, improve management throughout the term of business, upgrade system functions related to non-standard
+cooperative institution access and limit management, and strengthen systematic management to cover the whole-process of
+agency investment business. As a result, the Bank's ability to manage and control risks through the system has seen further
+progress. The Bank enhanced credit risk monitoring, and stepped up examination and analysis on key areas such as cross-
+market risk, government-backed financing platform and real estate industry for early warning of high-risk customers.
+Risk Management for Asset Management
+66
+Large Exposures Management
+2.4
+394,406
+0.1
+20,478
+Transportation, storage and postal services
+Borrower J
+Total
+The Bank actively established and improved the management structure and system for large exposures, improved relevant
+rules and regulations, and clarified requirements on management framework, calculation method, policy and procedures
+related to large exposures management. Efforts were also made to promote the system related to large exposures
+management to effectively manage the Bank's large exposures.
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2019 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+LIQUIDITY EXPOSURE ANALYSIS
+The daily average liquidity coverage ratio for the fourth quarter of 2019 was 121.89%, 0.71 percentage points higher than
+the previous quarter, mainly due to the increase in the balance of eligible high-quality liquid assets. High-quality liquid assets
+cover cash, available central bank reserve under stress and primary and secondary bond assets that can be included in the
+liquidity coverage ratio under the regulatory requirements. For the quantitative information for liquidity coverage ratio based
+on the Administrative Measures for the Information Disclosure of Liquidity Coverage Ratio of Commercial Banks, please refer
+to "Unaudited Supplementary Financial Information".
+72
+ICBC
+Discussion and Analysis
+The Bank also assessed its liquidity risk profile by using liquidity exposure analysis. Deposits maintained steady growth with
+a high deposition rate, and at the same time the Bank made major investment in highly liquid bond assets, and possessed
+sufficient liquidity reserves. Therefore, the overall liquidity of the Bank maintained at a safe level. As at the end of 2019,
+the negative liquidity exposure for the 3 months to 1 year category decreased from the end of last year, mainly due to
+the increase of matured bond investments and the decrease of due to customers within corresponding term. The positive
+liquidity exposure for the 1 to 5 years category decreased, mainly due to the increase of matured due to customers and the
+decrease of bond investments within corresponding term. The positive liquidity exposure for the category of over 5 years
+expanded, which was mainly due to the increase in matured loans and advances to customers and bond investments within
+corresponding term.
+372,311
+In RMB millions
+repayable
+on
+demand
+Less than
+1 month
+At 31 December 2019 (13,148,663)
+(701,406)
+Overdue/
+Net stable funding ratio aims to ensure commercial banks have sufficient stable sources of funding to meet the needs
+for stable funding of assets and off-balance sheet risk exposures. The net stable funding ratio is the ratio of the available
+stable funding to the required stable funding. As at the end of the fourth quarter of 2019, the net stable funding ratio was
+127.54%, 0.84 percentage points higher than that at the end of the previous quarter, mainly because the Bank constantly
+strengthened the Group's liquidity coordination and management to ensure the sufficient sources of stable funds. For the
+quantitative information for net stable funding ratio in accordance with Disclosure Rules on Net Stable Funding Ratio of
+Commercial Banks, please refer to the section headed "Unaudited Supplementary Financial Information".
+Objective of liquidity risk management: by establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity risk
+at the Group level, the Bank, the affiliates, the branches and the business lines, and ensuring the liquidity demand is satisfied
+at a reasonable cost in time under the normal business scenario and the stress scenario.
+Liquidity Risk Analysis
+Liquidity Risk Management
+1 to 3 3 months to
+months
+1 year
+(715,546)
+In 2019, the Bank continued to uphold a steady and prudent liquidity risk management strategy, kept a close eye on factors
+affecting liquidity risk management and took measures to ensure that the Group's liquidity could be stable and safe. It made
+coordinated efforts to manage liquidity risks in both domestic and overseas institutions, in RMB and foreign currencies, and
+on- and off-balance sheet, and improved liquidity risk policy and system to shore up the foundation. The Bank continuously
+intensified efforts to improve and adjust the total size and structure of the fund sources and utilization, in a bid to strike
+a dynamic balance between liquidity risk management and profitability. The Bank strengthened the monitoring over key
+businesses, customers and funds to ensure sound liquidity risk management during payment peak times, major holidays as
+well as critical times. The liquidity risk management system was steadily improved, with more automatic supporting system
+for monitoring, measuring and managing liquidity risks, so as to boost the efficiency and sophistication level of the liquidity
+risk management.
+Liquidity Risk Management System and Governance Structure
+The Bank's liquidity risk management system conforms to the overall development strategy and the overall risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control for liquidity risk and a complete management information system.
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department; and the execution system comprising the Asset and Liability
+Management Department, leading management departments of on- and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs the corresponding functions of decision making, supervision and execution according to
+division of responsibilities.
+Annual Report 2019
+71
+Discussion and Analysis
+Objective, Strategy and Important Policy of Liquidity Risk Management
+The Bank's liquidity risk management strategy and policy are formulated in accordance with the liquidity risk appetite,
+and they cover all businesses on- and off-balance sheet, all domestic and overseas business departments, branches and
+affiliates that are likely to have a material impact on the liquidity risk, and contain the liquidity risk management under
+normal and stressed scenarios. The liquidity risk management strategy specifies the overall objective and mode of liquidity
+risk management and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk
+management are formulated in accordance with external and macro operating environments and business development of
+the Bank, with a view to striking an effective balance among security, liquidity and profitability.
+Liquidity Risk Management Mode
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the Bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+Stress Testing
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress testing
+on liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress testing on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress testing at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+In 2019, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were 43.0% and 85.9% respectively, both
+meeting the regulatory requirements. Loan-to-deposit ratio was 71.6%. Please refer to the section headed "Discussion and
+Analysis Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+1 to 5
+years
+3,498,846
+In 2019, the Bank continued to push the Group's operational risk management to a higher level in line with the regulatory
+focus and operational risk trends. It conducted risk governance in key fields and links on an ongoing basis, and improved
+or updated policies, procedures, systems and mechanisms and the procedure-based hard control over key links. The Bank
+improved the mechanism of risk limit decomposition and implementation, urged its institutions to implement differentiated
+risk limit management, and reinforced prediction and foresighted control of large-value operational risk events. Furthermore,
+the operational risk measurement system was upgraded to an operational risk application and management system to
+continuously enhance effective risk data aggregation and risk reporting. During the reporting period, the operational risk
+management system of the Bank operated smoothly and the operational risk was controllable on the whole.
+At 31 December 2018
+74
+ICBC
+Discussion and Analysis
+Anti-Money Laundering
+In strict compliance with anti-money laundering ("AML") laws and regulations of China and host countries (regions) of
+overseas institutions, the Bank earnestly implemented the "risk-based" regulatory requirements in respect of AML, sincerely
+fulfilled the legal obligations and social responsibilities concerning AML, and kept enhancing the Group's AML management
+system.
+The Bank conducted special governance in customer identification, focused efforts on consolidating the AML foundation of
+domestic institutions, and steadily increased the AML management level of its comprehensive subsidiaries. It strengthened
+AML management of key overseas institutions, established a long-term AML compliance management mechanism for
+overseas institutions, further implemented the AML intelligence system and improved AML monitoring and analysis of
+domestic and overseas institutions. Moreover, it strengthened AML staffing and stepped up training for AML compliance
+personnel. As a result, the Bank improved the compliance and effectiveness of its AML work at the same time.
+Please refer to the section headed "Operational Risk" of the 2019 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for further information on operational risk capital measurement.
+Reputational Risk
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the reputational risk management objective and planning, through
+the establishment and improvement of the reputational risk management system and through daily reputational risk
+management and proper handling of reputational events. Good reputation is central to the operation and management of a
+commercial bank. The Bank highly values its reputation and has incorporated reputational risk management in the corporate
+governance and enterprise risk management system to prevent reputational risk.
+The Board of Directors is responsible for reviewing and finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and effectiveness of reputational risk management across the Bank and
+assuming the ultimate responsibility for reputational risk management. The Senior Management is responsible for leading
+reputational risk management of the Bank, implementing the strategies and policies established by the Board of Directors,
+reviewing and finalizing the rules, measures and operating procedures for reputational risk management and the plans to
+handle extraordinarily major reputational events and ensuring the proper and effective operation of the reputational risk
+management system. The Bank has established a special reputational risk management team to take charge of the daily
+management of reputational risk.
+In 2019, the Bank constantly advanced the building of the reputational risk management policies and mechanism, and
+reinforced the prevention, control and management of the reputational risk sources. It performed reputational risk
+management and protection of consumer rights and interests by synchronized method, actively responded to the comments
+and suggestions of the public, and continued to increase the reputational risk awareness of all the employees. The Bank
+made on-going efforts to organize a series of featured campaigns with great influence for publicity to enhance its brand
+image. It also reinforced the application of information technology in reputational risk management. During the reporting
+period, the Bank's reputational risk was controllable with no material reputational risk event occurred.
+Annual Report 2019
+75
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of
+loans by customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization,
+operating losses, derivatives trading risk and risk associated with its affiliates.
+In 2019, the Bank continued to strengthen legal risk management, by improving the risk prevention and control capacity
+in legal risk management, ensuring the legal and compliant operation, healthy business development and overall business
+stability of the Group. The Bank improved both the vertical linkage and horizontal coordination mechanism between the
+Head Office and branches. By systematically embedding legal risk prevention and control into business negotiations, product
+design, contract signing and other links, the Bank made risk prevention and control more prospective, proactive and
+targeted. Legal risk prevention and control in key areas and links have made headway in line with new financial regulatory
+requirements. The Bank improved the cross-border coordination and management for legal work and strengthened the legal
+risk management of overseas institutions, properly responding to cross-border legal issues emerging in the development of
+international operations. Moreover, the Bank pragmatically strengthened the risk management and control of lawsuit-related
+risks, thereby preventing and mitigating lawsuit-related risks and losses. It actively assisted in online judicial inquiry and
+enforcement, and helped competent authorities in improving the efficiency of law enforcement and case handling as well as
+social credibility building. The Bank developed an electronic signing system on its own to strictly control seal use of business
+contracts during the whole process, and effectively prevent and control operational risk, legal risk and reputational risk
+caused by misuse of contract seal. The Bank reinforced authorization management, related party management, trademark
+management and intellectual property protection, and made continuous efforts to institutionalize risk management and
+control, and refine the structure of the system.
+Based on the objective to ensure legal and compliant operation, the Bank always attaches great importance to establishing
+a sound legal risk management system, forming a full-process legal risk prevention and control mechanism to support
+and secure business innovation and market competition, and to prevent and eliminate various potential or practical legal
+risks. The Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk
+management, and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for
+executing the strategy and policy relating to legal risk management, examining and approving relevant important affairs. The
+Legal Affairs Department of the Head Office is in charge of legal risk management across the Group, with relevant business
+departments providing related support and assistance on legal risk prevention and control. The affiliates, domestic and
+overseas branches undertake the responsibility of legal risk management of their respective institutions.
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arises out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions or requirements of other relevant rules during the Bank's operation; the
+unfavorable legal defects that exist in products, services or information provided to clients, transactions engaged in, and
+contracts, agreements or other documents executed by the Bank; legal disputes (litigation or arbitration proceedings)
+between the Bank and its clients, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally and
+externally.
+Legal Risk
+(12,057,413)
+432,760
+(674,702)
+(1,884,799)
+4,412,116
+years
+10,069,296
+8,793,935
+Undated
+3,317,165
+3,322,986
+Over 5
+Total
+Operational Risk
+Operational Risk Management
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution and delivery and process management constitute major sources of
+operational risk losses of the Bank.
+The Bank strictly followed regulatory requirements on operational risk management and adopted the operational risk
+control mode of "integrated management, classified control". The Board of Directors assumes relevant responsibility for
+the effectiveness of the operational risk management according to the Articles of Association, and the Senior Management
+is responsible for implementing the strategy, overall policy and system for operational risk management approved by the
+Board of Directors. The Operational Risk Management Committee under the Senior Management, as the organizer and
+coordinator of operational risk management of the Bank, is responsible for reviewing and approving significant matters
+related to operational risk management according to the Working Regulations for the Operational Risk Management
+Committee. Marketing and product departments at all levels form the first line of defense of operational risk management,
+which assume direct responsibility for operational risk management in each business line. Internal control and compliance
+departments at various levels are comprehensive management departments for operational risk in institutions at various
+levels and assume the duty of operating the second line of defense of operational risk management, which are responsible
+for the arrangement and organization for the establishment and implementation of operational risk management system at
+each level; security, human resources, IT, finance and accounting, legal affairs, operation management, credit management
+and risk management departments at all levels are classification control departments for operational risk in institutions at
+various levels, which are responsible for management and control on specific types of operational risk. These departments,
+together with comprehensive management departments, form the second line of defense of operational risk management.
+The internal audit departments are responsible for auditing and evaluating the operation of the operational risk management
+system, and form the third line of defense.
+Annual Report 2019
+73
+Discussion and Analysis
+Note: Please refer to "Note 51.(b) to the Financial Statements: Liquidity Risk".
+Liquidity Risk
+In RMB millions
+220,030
+1,058,350
+6,420
+979
+(6,416)
+(979)
+32,313
+6,951
+(29,652)
+(6,951)
+equity
+income
+equity
+income
+Effect on
+Effect on
+net interest
+Effect on
+(3,630)
+net interest
+(43)
+43
+At 31 December 2019
+In RMB millions
+Discussion and Analysis
+INTEREST RATE RISK EXPOSURE
+ICBC
+70
+As at the end of 2019, the Bank had a negative cumulative interest rate sensitivity exposure within one year of
+RMB145,156 million, representing a decrease of RMB380,694 million from the end of the previous year, mainly caused
+by the increase in repriced or matured loans and advances to customers and bond investments within one year. It had a
+positive cumulative interest rate sensitivity exposure above one year of RMB2, 130,209 million, representing a decrease of
+RMB612,898 million, mainly resulted from the increase in repriced or matured due to customers above one year.
+Interest Rate Exposure Analysis
+Note: Please refer to "Note 51.(d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+39,923
+10,007
+1,147
+(1,553)
+(1,144)
+(37,255)
+1,553
+(10,007)
+3,630
+Effect on
+-100 basis points
+Discussion and Analysis
+Management System and Governance Structure for Interest Rate Risk in the Banking Book
+In 2019, the Bank fully implemented relevant regulatory requirements of CBIRC on managing interest rate risk in the
+banking book. With a focus on improving the regulations regarding interest rate risk management at the Group's level,
+the Bank continued to strengthen the construction of the management system and mechanism, promoted building of
+the interest rate risk system and model management, and consolidated the foundation for the Group's interest rate
+risk management. The Bank adopted positive and forward-looking interest rate risk management strategies, applied a
+combination of quantity, pricing and derivative instruments regarding assets and liabilities, and precisely regulated and
+controlled the duration structure and mismatch levels, so as to effectively rise to the challenges in managing interest rate risk
+in the banking book.
+Management of Interest Rate Risk in the Banking Book
+Interest rate risk in the banking book is defined as the risk of loss in the economic value and overall profit of the banking
+book arising from adverse movements in interest rate and maturity structure, etc.
+Interest Rate Risk in the Banking Book
+Discussion and Analysis
+At 31 December 2018
+Less than
+3 months to
+1 year
+1,448,630
+1 to 5 years
+Over 5 years
+1,910,179
+3 months
+(1,593,786)
+(133,897)
+(391,953)
+Note: Please refer to "Note 51. (d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+The Bank's management system for interest rate risk in the banking book conforms to the system importance, risk status
+and business complexity, and fits the Bank's overall development strategy and the enterprise risk management system. The
+system mainly consists of the following elements: an effective risk governance structure; sound risk management strategies,
+policies and procedures; effective risk identification, measurement, monitoring, control and mitigation that cover all areas; a
+complete internal control and review mechanism; a fully-built risk management system; and adequate information disclosure
+and reporting.
+The Bank strictly complied with regulatory requirements for interest rate risk in the banking book, effectively managed
+interest rate risk in the banking book at the Bank and consolidated level, and developed a sound governance structure
+for interest rate risk management in the banking book that is fully built and well-structured, with clearly defined rights
+and responsibilities. The Board of Directors and the Senior Management are vested with the ultimate and executive
+responsibilities, respectively, for managing interest rate risk in the banking book. The Asset & Liability Management
+Department of the Head Office takes the leading role in managing interest rate risk in the banking book, and other
+departments and institutions play their roles in implementing policies and standards concerning interest rate risk in the
+banking book. The Internal Audit Bureau and Internal Control & Compliance Department of the Head Office are responsible
+for reviewing and evaluating duties in respective of interest rate risk in the banking book.
+Objective, Strategy and Important Policy of Management of Interest Rate Risk in the Banking Book
+The objective of management of interest rate risk in the banking book: the Bank aims at maximizing the risk-adjusted net
+interest income within the tolerable level of interest rate risk under its risk management and risk appetite.
+The Bank formulated strategies and clarified objectives and modes for managing interest rate risk in the banking book based
+on risk appetite, risk status, macroeconomic and market changes. Based on the pre-judging of the interest rate trend and
+measurement results of the changes in overall profit and economic value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated approach to using interest rate risk control tools to mitigate and manage
+risks, so as to ensure the Bank's actual interest rate risks conform to its bearing capability and willingness.
++100 basis points
+Total
+Others
+HKD
+USD
+RMB
+Currency
+1,684,757
+Supposing that there is parallel shift of overall market interest rates, and taking no account of possible risk management
+actions taken by the management to mitigate the interest rate risk, the analysis on interest rate sensitivity of the Bank
+categorized by major currencies at the end of 2019 is shown in the following table:
+Analysis on Interest Rate Risk in the Banking Book
+In line with the principles of comprehensiveness, prudence and foresight, the Bank's stress testing on interest rate risk in
+the banking book adopted the interest rate risk exposure measurement approach and standardized duration approach
+to measure the effect of interest rate changes under different stress scenarios on the overall profit and economic value.
+Based on the domestic and overseas regulatory requirements, the bank-wide asset and liability business structure, operation
+and management as well as risk appetite, the Bank set stress testing scenarios for interest rate risk in the banking book
+by taking into account the current interest rate level, historical changes and trends, total assets and liabilities and their
+term characteristics, business development strategies, customer behaviors and other factors, and conducted stress testing
+quarterly.
+Stress Testing
+Discussion and Analysis
+69
+Annual Report 2019
+On the basis of management strategies and objectives, the Bank developed policies and made clear the modes and
+instruments for managing interest rate risk in the banking book. By developing and modifying such methods as on-balance
+sheet adjustment and off-balance sheet hedging to manage interest rate risk, adeptly using quantity, pricing and derivative
+instruments regarding assets and liabilities, and applying limit management system, business plan, performance assessment
+and capital evaluation in all areas for interest rate risk management and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the affiliates and the products and portfolios easily affected by interest
+rate risk.
+Interest Rate Sensitivity Analysis
+Country Risk
+2,692,003
+2,344,883
+The Bank strictly observes regulatory requirements on country risk management. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of country risk management. The Senior Management is responsible for executing the
+country risk management policies approved by the Board of Directors. The Risk Management Committee of the Head Office
+is responsible for reviewing matters regarding country risk management. The Bank manages and controls country risk with
+a series of tools, including country risk assessment and rating, country risk limit, country risk exposure calculation and
+monitoring and stress testing. The Bank reviews the country risk rating and limits at least once every year.
+12.98%
+13.20%
+Core tier 1 capital adequacy ratio
+17,190,992
+18,616,886
+2,644,885
+3,121,479
+Risk-weighted assets (1)
+Net capital base
+Significant minority investments in tier 2 capital instruments issued by
+financial institutions that are not subject to consolidation
+Tier 2 capital deductions
+1,991
+1,707
+Valid portion of minority interests
+127,990
+Tier 1 capital adequacy ratio
+189,569
+14.27%
+Capital adequacy ratio
+292,149
+261,636
+304,876
+278,980
+1,367,180
+1,205,924
+4,178
+3,752
+(1,083)
+78
+(1) Refers to risk-weighted assets after capital floor and adjustments.
+Note:
+15.39%
+(11,646)
+16.77%
+13.45%
+151,968
+Surplus provision for loan impairment
+272,680
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+institutions that are under control but not subject to consolidation
+Investments in core tier 1 capital instruments issued by financial
+that are not fair valued on the balance sheet
+Cash flow hedge reserves that relate to the hedging of items
+7,980
+7,980
+(3,739)
+(4,451)
+1,927
+2,933
+8,820
+9,038
+14,988
+15,500
+Net core tier 1 capital
+202,761
+2,457,274
+Additional tier 1 capital
+Valid portion of tier 2 capital instruments and related premium
+332,742
+463,956
+Tier 2 capital
+2,312,143
+2,657,523
+Net tier 1 capital
+735
+793
+Valid portion of minority interests
+79,375
+199,456
+Additional tier 1 capital instruments and related premium
+80,110
+200,249
+2,232,033
+149,067
+ICBC
+356,407
+2,232,033
+2,040,396
+Net tier 1 capital
+2,657,523
+2,403,000
+356,407
+2,102,348
+Net capital base
+3,121,479
+2,852,663
+2,644,885
+2,419,120
+Core tier 1 capital adequacy ratio
+13.20%
+13.29%
+12.98%
+13.23%
+2,222,316
+Tier 1 capital adequacy ratio
+2,457,274
+Parent
+Company
+In 2019, facing the increasingly complicated international political and economic environment, the Bank strictly abode by
+regulatory requirements and, with consideration of its business development needs, continued to strengthen country risk
+management. The Bank closely observed changes in country risk exposures, constantly tracked, monitored and reported
+country risk, and timely updated and adjusted the country risk rating and limits. It continued to strengthen early warning
+mechanism for country risk, proactively conducted stress testing on country risk and reasonably and effectively controlled
+country risk while pushing ahead with the internationalization strategy.
+76
+ICBC
+CAPITAL MANAGEMENT
+Discussion and Analysis
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly strengthening and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channels, raising capital quality and optimizing capital structure. The Bank's capital management
+covers various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management, capital investment and financing management.
+In 2019, the Bank further deepened the capital management reform, strengthened capital saving and optimization,
+intensified the constraint of economic capital on risk-weighted assets and continued to elevate the capital use efficiency.
+It steadily enhanced the supplementation capacity of endogenous capital, and further consolidated the bank-wide capital
+base to reinforce its capacity in supporting the real economy. In 2019, all capital indicators performed well, of which capital
+adequacy ratio was kept at a sound and appropriate level.
+Capital Adequacy Ratio and Leverage Ratio
+The Bank calculated its capital adequacy ratios at all levels in accordance with the Capital Regulation. According to the
+scope of implementing the advanced capital management approaches as approved by the regulatory authorities, the
+foundation internal ratings-based (IRB) approach was adopted for corporate credit risk, the IRB approach for retail credit risk,
+the internal model approach (IMA) for market risk, and the standardized approach for operational risk meeting regulatory
+requirements. The weighted approach was adopted for credit risk uncovered by the IRB approach and the standardized
+approach for market risk uncovered by the IMA.
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2019
+Item
+Group
+Parent
+Company
+Group
+Net core tier 1 capital
+14.27%
+2,312,143
+14.37%
+2,247,021
+2,472,774
+2018
+2019
+At 31 December
+In RMB millions, except for percentages
+Other intangible assets other than land use rights
+Goodwill
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+Valid portion of capital reserve
+At 31 December
+Core tier 1 capital
+Paid-in capital
+13.45%
+13.63%
+Capital adequacy ratio
+16.77%
+17.06%
+15.39%
+As at the end of 2019, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 13.20%, 14.27% and 16.77%, respectively,
+complying with regulatory requirements.
+Annual Report 2019
+15.68%
+Item
+77
+Discussion and Analysis
+CAPITAL ADEQUACY RATIO
+H Share
+110,984,806,678
+None
+-12,331,645,186
+HKSCC Nominees Limited/
+Hong Kong Securities
+Clearing Company Limited (2)
+SSF(2X3)
+person
+Foreign legal
+Ping An Life Insurance Company
+1,484,707
+31.14
+Unknown
+86,153,149,041
+_
+24.17
+A Share
+34.71
+MOF
+Name of shareholder
+A Share
+Discussion and Analysis
+Huijin
+(%)
+Shareholding
+percentage
+Class of
+shares
+State-owned
+Nature of
+shareholder
+State-owned
+A Share
+Total number of
+shares held
+123,717,852,951
+Number of
+pledged or
+locked-up shares
+the reporting
+period
+None
+OTHER INFORMATION DISCLOSED PURSUANT TO REGULATORY
+0.38
+Traditional
+None
+86.2
+RMB and foreign
+71.6
+71.0
+71.1
+currency
+Pass
+Special mention
+Substandard
+Doubtful
+<=10.0
+3.1
+3.8
+4.9
+12.6
+12.9
+14.2
+1.5
+1.7
+2.7
+26.1
+25.3
+23.2
+83.0
+36.0
+85.9
+Foreign currency
+Increase/
+decrease of
+shares during
+REQUIREMENTS
+Major Regulatory Indicators
+Item
+Liquidity ratio (%)
+Loan-to-deposit ratio (%)
+Percentage of loans to single largest
+customer (%)
+Percentage of loans to top 10
+customers (%)
+Loan migration ratio (%)
+Regulatory
+criteria
+2019
+2018
+2017
+RMB
+>=25.0
+43.0
+43.8
+41.7
+>=25.0
+38.8
+71.1
+ICBC
+1,420,781,042
+0.40
+A Share
+None
+2,416,131,564
+0.68
+A Share
+State-owned
+legal person
+State-owned
+legal person
+Wutongshu Investment Platform
+Co., Ltd.
+None
+3,687,330,676
+1.03
+A Share
+Other entities
+12,331,645,186
+None
+12,331,645,186
+3.46
+A Share
+State-owned
+469,527,578
+None
+Central Huijin Asset Management
+Co., Ltd. (4)
+China Life Insurance Company
+Limited Traditional
+State-owned
+legal person
+Other entities
+88
+(4) Central Huijin Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware
+of any connected relations or concert party action among the afore-mentioned shareholders.
+(3) According to the Notice on Comprehensively Transferring Part of State-Owned Capital to Fortify Social Security Funds (Cai Zi
+[2019] No. 49), MOF transferred 12,331,645,186 shares to the state-owned capital transfer account of SSF in a lump sum.
+According to the Notice of the State Council on Issuing the Implementation Plan for Transferring Part of State-Owned Capital to
+Fortify Social Security Funds (Guo Fa [2017] No. 49), SSF shall perform the obligation of more than 3-year lock-up period as of
+the date of the receipt of transferred shares.
+(2) HKSCC Nominees Limited held 86,153,149,041 H shares, including those held by SSF. According to the Simplified Report of
+Changes in Equity provided by SSF to the Bank on 9 January 2020, SSF held 8,037,177,174 H shares of the Bank. Hong Kong
+Securities Clearing Company Limited held 1,342,677,816 A shares.
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2019.
+Ordinary insurance
+products 022L - CT001 Hu
+363,285,351
+None
+363,285,351
+0.10
+1,342,677,816
+Other entities A Share
+- Ordinary insurance products
+- 005L CT001 Hu
+-368,044,830
+None
+377,670,327
+0.11
+A Share
+None
+1,013,921,700
+0.28
+A Share
+Taiping Life Insurance Co., Ltd.
+Unit: Share
+In RMB millions
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+1,615,956
+1,266,787
+Notional amount of over-the-counter (OTC) derivatives
+7,170,609
+7,130,990
+Trading and available-for-sale securities
+Level 3 assets
+Cross-jurisdictional claims
+Cross-jurisdictional liabilities
+595,768
+432,604
+201,411
+209,554
+2,041,464
+1,885,349
+2,128,717
+2,010,668
+In 2019, the Bank reported RMB155,600 million worth of net fee and commission income, an increase of RMB10,299 million
+or 7.1% over last year. While strictly implementing the New Rules on Asset Management and fee reduction policy, the Bank
+also strengthened the compliance management of fees, and steadily promoted the transformation of income structure,
+achieving a healthy and sustainable growth of intermediary service income.
+II. About the Growth of Fee and Commission Income
+Discussion and Analysis
+ICBC
+84
+Looking ahead to 2020, the competition in the domestic deposit market is expected to remain fierce, and financial
+institutions will still face challenges in maintaining the steady growth of deposit volume while continuously improving the
+deposit structure. Conforming to the macroeconomic policy and the trend of market competition, the Bank will continue to
+adhere to the liability development pattern based on deposit liabilities, give full play to its advantages in integrated financial
+services concerning products, services, channels and technologies, promote the steady growth of deposits by providing high-
+quality products and services, and keep the cost of interest payment at a reasonable level.
+Underwritten transactions in debt and equity markets
+ii. Consolidating the broadest customer base. First, as for personal customers, the Bank enriched online service
+channels, advanced outlet transformation, launched "Intelligent Experience" project for customers in aspects of product,
+procedure, channel, safety and account to improve its intelligent service capability, thus winning 650 million personal
+customers, a net increase of 43,292 thousand customers. Second, with respect to corporate customers, the Bank gave play
+to its strengths in capital, channel, and technology, consolidated its advantages in finance and social security, increased the
+proportion of settlement demand deposits, and concentrated more efforts in medical care, education, elderly care and other
+areas of great potential, thus gaining 8,098 thousand corporate customers, a net increase of 1,065 thousand customers.
+iii. Promoting market-based pricing. Keeping pace with the market-oriented interest rate reform, the Bank advanced
+its market-based pricing mechanism in a steady manner. It depended on models and systems to speed up improvement in
+branches' tiered pricing management regarding deposits, and put more emphasis on coordinating the quantity and price of
+deposits and improving competitiveness efficiently.
+At the end of the reporting period, the Bank's customer deposits increased by RMB1,568,721 million, representing an
+increase of 7.3% over the end of the previous year, which, under the complex and changing macroeconomic and financial
+situation, provided stable and sustained financial support for the development of asset business.
+I. About the Growth of Deposits
+HOT TOPICS IN THE CAPITAL MARKET
+Discussion and Analysis
+83
+Annual Report 2019
+i. Optimizing the structure of deposit growth. First, varieties of deposits saw coordinated and balanced development.
+By grasping the rules of social capital flow and strengthening interconnection among business segments and lines and
+enhancing closed-loop fund management, the Bank's personal deposits increased by RMB1,041,326 million or 11.0%
+over the end of last year, and the balance of personal deposits exceeded RMB10 trillion; corporate deposits increased by
+RMB547,121 million or 4.8%. Second, deposit stability witnessed significant improvement. The Bank managed to keep
+the average daily balance increase of domestic RMB basically even with its time-point increase by continuously developing
+customers, accelerating product innovation, enhancing service quality and efficiency, and taking proactive measures to deal
+with mature deposits. Third, the structure of the term of deposits outperformed most of its peers. The Bank made good use
+of its integrated financial services to strengthen customer loyalty and increase the proportion of settlement demand deposits.
+Fourth, branches in key regions became more competitive. By following the state's key strategies, understanding regional
+economic characteristics like industry relocation and upgrade and demographic migration trends, and devising strategies and
+plans in advance, branches in the Bohai Rim, the Pearl River Delta and the Yangtze River Delta continued to improve their
+competitiveness in deposit business.
+i. The structure transformation of settlement business achieved remarkable results. By accelerating income structure
+transformation and consolidating business development foundation, the Bank realized rapid growth in settlement products,
+recording RMB37,321 million of income from settlement, clearing and cash management businesses, an increase of 17.4%
+over the previous year.
+16,301,370
+Assets under custody
+81
+15.6
+25.2
+10.6
+Note: The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and accounting
+standards applicable to the current period. The comparative figures are not adjusted or restated.
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and Those under IFRSS
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2019 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+Corporate Bonds
+The Bank did not issue any corporate bonds that need to be disclosed as per the "No. 2 Standards on the Content and
+Format of Information Disclosure of Companies with Public Offerings Content and Format of the Annual Report"
+(Revision 2017) or "No. 38 Standards on the Content and Format of Information Disclosure of Companies with Public
+Offerings Content and Format of the Annual Report of Corporate Bonds".
+82
+ICBC
+Discussion and Analysis
+Global Systemically Importance Assessment Indicators of Commercial Banks
+2018
+29,679,878
+Indicator
+2019
+413,391,380
+427,718,826
+Payments settled via payment systems or correspondent banks
+3,947,251
+4,810,820
+Securities and other financing instruments issued
+16,541,581
+1,816,041
+Intra-financial system liabilities
+1,717,824
+2,008,660
+Intra-financial system assets
+31,982,214
+Balance of adjusted on- and off-balance sheet assets
+2,273,368
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+ii. Income from agency services increased rapidly. The Bank made active move to meet diversified needs of residents
+with regard to wealth allocation during the transition period of New Rules on Asset Management, perfected the customer-
+oriented marketing system and steadily propelled the smooth transition of asset management business, witnessing robust
+growth in income from agency services such as agency insurance and precious metals.
+iv. New drivers of growth were discovered. The Bank quickened the promotion and application of new products and
+realized a sharp rise in income from asset securitization service and account transaction products.
+ordinary shares
+2. Foreign shares listed
+86,794,044,550
+24.35
+overseas
+III.
+Total number of shares
+356,406,257,089
+100.00
+356,406,257,089
+100.00
+269,612,212,539
+75.65
+86,794,044,550
+24.35
+356,406,257,089
+100.00
+87
+88
+Annual Report 2019
+As at the end of the reporting period, the Bank had a total number of 527,411 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 120,525 holders of H shares and 406,886 holders of A shares. As at
+the end of the month immediately before the annual results announcement date (29 February 2020), the Bank had a total
+number of 601,971 ordinary shareholders and no holders of preference shares with voting rights restored.
+Number of Shareholders and Particulars of Shareholding
+The Bank did not have any employee shares.
+75.65
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 35. to the Financial
+Statements: Debt Securities Issued; Note 38. to the Financial Statements: Other Equity Instruments" for details.
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares".
+The Bank did not conduct any share issue or issue any convertible bonds during the reporting period.
+Details of Securities Issuance and Listing
+(3) Due to rounding, percentages presented herein are for reference only.
+(2) "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the
+Content and Format of Information Disclosure of Companies with Public Offerings ― Content and Format of the Report of
+Change in Corporate Shareholding" (Revision 2007) of CSRC.
+Notes: (1) The above data are based on the Equity Structure Chart issued by China Securities Depository and Clearing Corporation Limited.
+_
+iii. Bank card income continued to grow. By seizing opportunities brought by financial consumption, the Bank's bank
+card income achieved rapid growth, reaching RMB47,054 million, an increase of 7.6% over the previous year.
+269,612,212,539
+1.
+In 2020, while actively responding to the epidemic outbreak, the Bank will deeply analyze the change in financial
+consumption behaviors and payment methods as well as the approaches to realize compensatory growth after the epidemic,
+make early plans and preparation, seize new opportunities and improve the intermediary service income structure. First,
+the Bank will push ahead with volume and income of settlement products. Second, the Bank will push forward with
+transformation and development of investment banking and asset management business, create new products under the
+New Rules on Asset Management, and safeguard its leading position in wealth management. Third, the Bank will accelerate
+innovation, foster new drivers of growth, continuously upgrade its internet-based financial platforms such as mobile
+banking, ICBC e Life, ICBC e Payment, and ICBC Mall, and build up the influence of syndicated loans, asset securitization
+and other services.
+III. About the Changes Resulted from FinTech Achievements
+The section headed "Discussion and Analysis Business Overview" introduces in detail the Bank's major achievements
+in FinTech and internet finance during the reporting period. This section mainly focuses on positive changes in customers'
+experience driven by FinTech progress, which is investors' focus of attention.
+i. With more convenient services, the intelligent bank ecosystem saved legwork for customers. During the
+reporting period, the Bank completed the ECOS project, rolled out a series of personal and corporate service scenarios
+including debit card replacement without card number change, credit certification, transaction details, thematic certificates
+of deposit, door-to-door collection and confirmation, and developed an integrated online and offline customer service mode
+through whole-process order-based management.
+A customer can apply for debit card replacement without card number change on the mobile banking, and new card will
+be sent to his/her place in about three days, with no need to change quick payment protocols bound to the old card. The
+Bank's mobile banking can automatically process customers' orders, generate encrypted account details with electronic seal
+and send it to the designated e-mail address for customers to download and print. Customers can also apply for door-to-
+door collection on ICBC Link, which uses biometric identification, dynamic verification code, QR code and other technologies
+to complete identification and processing online, providing customers more convenience.
+Annual Report 2019
+85
+Discussion and Analysis
+ii. With more inclusive products, the Bank's services to lower-tiered market better benefited small and micro
+enterprise customers. The Bank expanded the application of Quick Lending for Operation in "Tax Loan", "Account
+Opening Loan", "Cross-border Loan", "Huawei Cloud Quickpass Loan" and other big data-based customer acquisition
+scenarios. It proffered standardized API interface of Quick Lending for Operation in all scenarios to embed financing services
+into external cooperation agencies who have a large number of small and micro enterprise customers. The Bank released
+e-Mortgage Quick Loan for corporate customers to further extend the service channel and customer base of real estate
+mortgage loan business, satisfying more customers' needs with technology. The Bank rolled out e-Chain Quick Loan and
+ICBC e Credit to provide targeted and convenient financial and credit services for small and micro enterprises, individual
+businesses, farmers and other operating entities at the end of the industrial chain. Depending on AI, OCR identification,
+face recognition and other cutting-edge technologies, the Bank launched Version 2.0 of ICBC Enterprise Mobile Banking,
+and developed a "growing version" tailored to long-tail small and micro enterprises, providing them with account opening,
+wealth management, investment, Small and Micro Enterprise e Management and other personalized online financial services.
+iii. With more intelligent experience, flagship outlet led the intelligent transformation and upgrading. During
+the reporting period, the Bank opened a new-generation intelligent banking flagship outlet in Beijing. Following the
+idea of integrating finance, technology and ecology, the outlet applied 54 most up-to-date technologies such as 5G, Al,
+Blockchain and Internet of Things, among which more than 20 were first used in the banking industry, to create more
+advanced, futuristic and intelligent financial services for customers and promote the integration and development of
+finance, technology and ecology. The Bank aimed to build new-generation intelligent outlets that are ecology-friendly and
+equipped with high technology, supported services and interactive scenarios, incorporate intelligent services into bank lobby
+management, business handling, marketing and risk control, and further promote service quality and efficiency.
+iv. With more open ecosystem, the Bank's financial services expanded in multiple areas. During the reporting
+period, the Bank, by giving equal emphasis to "Going Global" and "Bringing In" and leveraging the API open platform and
+ICBC Finance Cloud platform, opened up more than 1,000 financial services to over 2,000 ecological partners, incorporated
+payment, financing, wealth management, investment and other financial products into consumption and production
+scenarios including education, medical care, traveling and public service, and worked with partners to provide customers
+with "industry plus finance" services. The Bank launched a treasury management cloud platform, which is the first "treasury
+plus finance" one-stop product in the industry.
+v. With more secure protection, continuous and efficient technology input made the Bank even more
+trustworthy to customers. During the reporting period, the Bank completed intra-city switch and operation of
+information system, the fastest system switch in history, further evidencing the high usability of the Bank's core business
+system. The Bank carried out annual non-local disaster recovery drills. The continuous operation capacity of information
+system was improved significantly, enabling stable, reliable and powerful services for its customers. The Bank put into
+operation Intelligent Anti-Money Laundering 3.0 system. The Bank built an intelligent anti-fraud system, providing high risk
+identification and prevention services to enterprises and saving customers from losses.
+86
+ICBC
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+Changes in Ordinary Shares
+DETAILS OF CHANGES IN SHARE CAPITAL
+At 31 December 2018
+restrictions on sales
+100.00
+356,406,257,089
+Shares not subject to
+II.
+restrictions on sales
+RMB-denominated
+I. Shares subject to
+Number of shares
+At 31 December 2019
+Increase/decrease
+during the
+reporting period
+Percentage
+(%)
+Unit: Share
+Number of shares
+Percentage
+(%)
+Annual Report 2019
+of China, Ltd. Traditional —
+Ordinary insurance products
+China Securities Finance Co., Ltd.
+2020 is the closing year for building a moderately prosperous society in all respects and for the 13th Five-Year Plan. The Bank
+is presented with favorable conditions for high-quality development. First, despite the impact of the COVID-19, China's
+positive economic fundamentals and long-term trajectory remain unchanged. As China steps up efforts in policy regulation,
+the potential and kinetic energy of domestic economic development will be fully released. Second, the further deepened
+market-based reform and refined socialist market economic system have effectively vitalized economic development and
+injected new vitality into transformation and innovation of banks. Third, China is modernizing its system and capacity
+for governance, laying a solid foundation for banks to implement the new development philosophy and realize healthy
+development.
+32,402,109
+31,982,214
+Balance of adjusted on- and
+2,636,734
+31 December
+2018
+31 March
+2019
+2019
+2019
+30 June
+31 December
+2019
+2,657,523
+2,395,570
+32,093,349
+Net tier 1 capital
+At
+At
+At
+At
+At
+In RMB millions, except for percentages
+LEVERAGE RATIO
+Please refer to the 2019 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+Discussion and Analysis
+In 2020, the Bank will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era to
+carry out the requirements of "keeping the employment, financial sector, foreign trade, foreign and domestic investments
+and expectations stable" and deepen the financial supply-side structural reform and the "three tasks" for financial work.
+It will remain committed to the principles of "Party building and strict governance, customer first and service for the real
+economy, value creation driven by technology, global operation with an international vision, transformation and reform for
+pragmatic progress, risk control and talent as foundation" and play the due role as a large-sized commercial bank in refining
+the highly adaptable, competitive and inclusive financial system. First, it will coordinate the work on the epidemic prevention
+and control and service for stable economic operation, contributing to securing the victory in both fighting the epidemic
+and promoting economic development nationwide. Second, it will improve its system and capacity for governance. The
+Bank will keep up with the times to advance reform in major sectors and key steps, refine its scientific and efficient decision-
+making mechanisms and operation procedures, and enhance penetration of strategies and execution of systems. Third, it
+will focus on high-quality economic development to improve adaptability of financial services. The strategy of "No. 1 Personal
+Bank" will be prioritized to meet the need of citizens for a better life. The full-caliber investment and financing system will
+be matured to support advanced manufacturing for high-quality development, promote financial development of small
+and micro enterprises and private enterprises and actively serve the livelihood-related consumption. The Bank proactively
+responds to national regional development strategies and strives to construct a network of collaborated development,
+featured development and optimized development among major regions. In line with the rural revitalization strategy, it will
+focus on winning the final victory in poverty alleviation. Fourth, technology empowerment will be highlighted to develop
+a digital ICBC. The ECOS project will be completed and an "all-customer, full-channel and omni-product" new ecosystem
+framework set up. Collaboration between technology and business will be enhanced and capacity of agile and iterative
+development will be improved. The intelligent bank strategy will be carried out in depth and the primary online integrated
+service platform built up to promote intelligent customer marketing, operation management and risk control online. Fifth,
+the Bank will improve cross-market platforms to render better integrated services. It will construct the new ecosystem of
+internationalized development by steadily driving forward Renminbi internationalization, striving to become the preferred
+bank for foreign exchange business and facilitating the opening-up at a higher level. It will refine the layout of integrated
+development and connect the whole value chain of financial services, in a bid to satisfy customers' demand for "one-
+stop" financial services. Sixth, the Bank will adhere to the bottom-line thinking and consolidate its risk control foundation.
+By using technological approaches, it will reinforce the "three lines of defense" in risk management and construct a
+comprehensive risk management system covering the whole staff and whole processes globally, so as to build a strong
+"firewall" against cross and imported risks, safeguard the lifeline of asset quality and secure the victory in preventing and
+resolving financial risks.
+Item
+2,395,508
+31,442,163
+30 September
+off-balance sheet assets
+Discussion and Analysis
+2,312,143
+29,679,878
+OUTLOOK
+ICBC
+80
+The Bank further improved the Group's economic capital management system in terms of measurement, allocation and
+assessment, strengthened the Group's economic capital constraint and incentive mechanism, and promoted the Group to
+take the intensive capital development path. It further improved its economic capital measurement policy and optimized its
+economic capital measurement standards and system. The Bank strictly implemented the measures for quota management of
+economic capital, continuously boosted the refined management of economic capital, and reinforced the capital constraint
+on domestic branches, profitability units, overseas institutions and subsidiaries. Moreover, the Bank upgraded the economic
+capital measurement and appraisal policy of credit business and proactively facilitated the adjustment of its credit structure.
+It strengthened trainings on economic capital management for institutions at all levels, and vigorously pushed forward the
+application of economic capital in operational management and business front-line.
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc.
+Allocation and Management of Economic Capital
+79
+Annual Report 2019
+For details on the issuance of capital instruments of the Bank, please refer to the announcements published by the Bank
+on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank. For details on relevant fundraising
+activities, please refer to the section headed "Details of Changes in Share Capital and Shareholding of Substantial
+Shareholders Details of Securities Issuance and Listing".
+The relevant proposals on the issuance of domestic and offshore preference shares were reviewed and approved at the
+First Extraordinary General Meeting of 2018 of the Bank, planning to issue preference shares with the total amount up to
+RMB100.0 billion equivalent in the domestic and offshore markets. The Bank made a non-public issuance of 700 million
+domestic preference shares in September 2019 and raised total RMB70.0 billion funds, which will be used to replenish the
+Bank's additional tier 1 capital after deducting all issuance expenses. In March 2020, the Bank received an approval from
+CBIRC, consenting to the Bank's offshore issuance of preference shares of no more than RMB30.0 billion in equivalent USD,
+which will be counted as the additional tier 1 capital of the Bank in accordance with relevant regulatory requirements.
+The Board of Directors of the Bank considered and approved the Proposal on the Issuance of Undated Additional Tier 1
+Capital Bonds and Eligible Tier 2 Capital Instruments on 7 January 2020. The Bank planned to issue undated additional tier
+1 capital bonds in the offshore market in foreign currency of RMB40.0 billion equivalent, which will be used to replenish
+additional tier 1 capital of the Bank; and to issue eligible tier 2 capital instruments of RMB40.0 billion or equivalent foreign
+currency in the domestic and offshore markets to replenish the Bank's tier 2 capital. The undated additional tier 1 capital
+bonds and eligible tier 2 capital instruments issuance plan is still subject to the review and approval by the Shareholders'
+General Meeting of the Bank, after which it is further subject to the approval by the relevant regulatory authorities.
+Discussion and Analysis
+8.31%
+The Bank publicly issued two tranches of tier 2 capital bonds, each worth RMB55.0 billion, in March and April 2019
+successively in China's national inter-bank bond market. The funds raised totaled RMB110.0 billion, which will be used to
+replenish the Bank's tier 2 capital in accordance with the applicable laws as approved by relevant regulators.
+On the basis of capital replenishment by retained profits, the Bank proactively expanded the channels for external capital
+replenishment and continuously promoted the innovation of capital instruments, to reinforce the capital strength, optimize
+capital structure and control the cost of capital rationally.
+Leverage ratio
+Capital Financing Management
+Note: Please refer to "Unaudited Supplementary Financial Information" for details on disclosed leverage ratio information.
+7.79%
+7.62%
+7.46%
+8.14%
+In July 2019, the Bank publicly issued the undated additional tier 1 capital bonds of RMB80.0 billion in China's national
+inter-bank bond market. The funds raised net of all issuance expenses will be used to replenish the Bank's additional tier 1
+capital, in accordance with the applicable laws and approvals by the relevant regulators.
+H Share
+Computershare Hong Kong Investor Services Limited
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong SAR, China
+Telephone: 852-28628555
+Facsimile: 852-28650990
+Stock name: 工商銀行
+Board of Directors' Office of the Bank
+Place where shares are listed, and their names and codes
+A Share
+Shanghai Stock Exchange
+188 Yanggao South Road, Pudong New Area, Shanghai, China
+Telephone: 86-4008058058
+Location where copies of this annual report are kept
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+Chinese mainland
+Share Registrars
+55th Floor, One Island East, 18 Westlands Road, Quarry Bay,
+Hong Kong SAR, China
+Freshfields Bruckhaus Deringer
+9/F, Three Exchange Square, Central, Hong Kong SAR, China
+Allen & Overy
+Hong Kong SAR, China
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Haiwen & Partners
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+King & Wood Mallesons
+Stock code: 601398
+A Share
+H Share
+Domestic Auditors
+Stock name: ICBC
+KPMG Huazhen LLP
+Legal Advisors
+Name and office address of Auditors
+31 December 2020
+Signatory Sponsor Representatives: Sun Yi and Cheng Yue
+Continuous Supervision Period: 16 October 2019 to
+8 Zhongxinsan Road, Futian District, Shenzhen City,
+Guangdong Province, China
+CITIC Securities Mansion, North Tower, Time Square Excellence II,
+CITIC Securities Co., Ltd.
+31 December 2020
+618 Shangcheng Road, China (Shanghai) Pilot Free Trade Zone
+Signatory Sponsor Representatives: Jin Licheng and Zhang Yi
+Continuous Supervision Period: 16 October 2019 to
+Joint sponsor agencies for domestic preference share "I"
+Guotai Junan Securities Co., Ltd.
+Stock code: 4620
+Stock name: ICBC 20USDPREF
+Stock code: 4604
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC EURPREF1
+Offshore Preference Share
+Stock code: 360036
+Stock name: 12
+Stock code: 360011
+Stock name: I
+Shanghai Stock Exchange
+Domestic Preference Share
+Stock code: 1398
+The Stock Exchange of Hong Kong Limited
+www.hkexnews.hk
+Legal name in English
+www.sse.com.cn
+6
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis - Risk Management" for detailed information.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+Mr. Chen Siqing, Legal Representative of the Bank, Mr. Liao Lin, President in charge of finance of the Bank, and
+Mr. Liu Yagan, General Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that
+the financial statements contained in the Annual Report are authentic, accurate and complete.
+26 March 2021
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.660 (pre-tax) for each
+ten shares for 2020. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2020.
+The Bank did not convert capital reserve to share capital.
+The 2020 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+5
+Annual Report 2020
+China Banking Association
+CHINA BANKING ASSOCIATION
+● 中国银行业协会
+Inclusive Finance
+the Belt and Road Initiative
+Effectiveness Award for Best
+Effectiveness Award for Practicing
+Effectiveness Award for
+Supporting China's Winning the "Three
+Critical Battles"
+Asiamoney
+ASIAMONEY
+Capital Markets 2020
+ICBC
+The "HKEXnews" website of HKEX for publication of
+the annual report in respect of H shares
+Corporate Information
+中國工商銀行股份有限公司(“中國工商銀行")
+Website designated by CSRC for publication of the annual
+report in respect of A shares
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+Selected media for information disclosure
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Telephone: 86-10-66108608
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Guan Xueqing
+Board Secretary and Company Secretary
+Liao Lin and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong SAR, China
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and complaint hotline: 86-95588
+Telephone: 86-10-66106114
+Postal code: 100140
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Registered address and office address
+Chen Siqing
+Legal Representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue,
+Dongcheng District, Beijing, China
+Legal name in Chinese
+CPAs (Practicing): Li Li and He Qi
+Basic earnings per share
+KPMG
+Vision:
+To build a world-class, globally
+competitive modern financial enterprise
+which delivers superior value, sticks to
+the fundamental mission, serves as
+customers' first choice, leads in market
+innovation, preserves security and
+prudence, and devotes to the
+development of people
+Mission:
+Excellence for You
+Excellent services for clients,
+Maximum returns to shareholders
+Real success for our employees, Great
+contribution to society
+11
+Value:
+Integrity Leads to Prosperity
+Integrity, Humanity, Prudence,
+ICBC
+2020
+2019
+2018
+2020
+2019
+2018
+15.39
+16.88
+16.77
+%
+Capital adequacy ratio
+2020
+2019
+inni
+2018
+inni
+inni
+ICBC (
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+EUR Preference Shares Stock Code: 4604
+USD Preference Shares Stock Code: 4620
+2020
+Annual Report
+ICBC E3
+Company Profile
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Through its continuous endeavor and stable
+development, the Bank has developed into the
+leading bank in the world, possessing an excellent
+customer base, a diversified business structure, strong
+innovation capabilities and market competitiveness.
+The Bank regards service as the very foundation
+to seek further development and adheres to
+creating value through services while providing
+a comprehensive range of financial products and
+services to over 8.60 million corporate customers
+and 680 million personal customers. The Bank has
+been consciously integrating the social responsibilities
+with its development strategy and operation
+and management activities, and gaining wide
+recognition in the aspects of supporting pandemic
+containment, promoting inclusive finance, backing
+poverty alleviation and rural revitalization, developing
+green finance and participating in public welfare
+undertakings.
+The Bank always keeps in mind its underlying
+mission of serving the real economy with its principal
+business, and along with the real economy it
+prospers, suffers and grows. Taking a risk-based
+approach and never overstepping the bottom line, it
+constantly enhances its capability of controlling and
+mitigating risks. Besides, the Bank remains steadfast
+in understanding and following the business rules of
+commercial banks to strive to be a century-old bank.
+It also stays committed to seeking progress with
+innovation while maintaining stability, continuously
+enhances the key development strategies, actively
+develops the FinTech and accelerates the digital
+transformation. The Bank unswervingly delivers
+specialized services, and pioneers a specialized
+business model, thus making it "a craftsman in large
+banking".
+The Bank was ranked the 1st place among the Top
+1000 World Banks by The Banker, the 1st place in the
+Global 2000 by Forbes, and the 1st place in the list of
+commercial banks of the Global 500 in Fortune for
+the eighth consecutive year, and took the 1st place
+among the Top 500 Banking Brands of Brand Finance
+for the fifth consecutive year.
+Strategic Objective:
+Guided by Xi Jinping Thought on Socialism with
+Chinese Characteristics for a New Era, ICBC
+will adhere to the general principle of pursuing
+progress while ensuring stability, apply the new
+development philosophy, modernize its governance
+system and capacity, and turn ICBC into a world-
+class and modern financial enterprise with global
+competitiveness.
+Strategic Significance:
+Adherence to the guidance of Party building and strict governance: ICBC
+adheres to and strengthens the Party's leadership over financial work, deepens the building of
+governance system and capacity, and improves the scientific decision-making and effectiveness of
+governance.
+Adherence to the customer first and serving the real economy: ICBC
+sticks to the source of the real economy, commits itself to meeting people's new expectations and
+demands for financial services, and makes every effort to build the No.1 Personal Bank.
+Adherence to the technology driven and value creation: ICBC empowers
+operation and management by FinTech and creates superior value for the real economy, shareholders,
+customers, employees and society.
+Adherence to the international vision and global operation: ICBC actively
+utilizes domestic and overseas markets and resources, improves the layout and content of international
+development, and integrates it into China's new pattern of high-level opening-up.
+Adherence to the pragmatic transformation and reform: ICBC advances
+reform in key areas and key links in keeping pace with the times, and seeks more room for
+transformation and more vitality for reform.
+Adherence to the solid foundation by risk control and talent-oriented
+development: ICBC strengthens the bottom-line thinking, combines prevention and control,
+and holds onto the lifeline of asset quality. ICBC strengthens humanistic care and corporate culture
+building, and enhances staff cohesion.
+Inn
+inni
+Inn
+inn
+1.43
+1.52
+1.58
+Online Banking 2020
+Overall Best Gold Bank
+Best Bank for Domestic Debt
+2020
+2019
+2018
+Unit: RMB100 millions
+Total assets
+2020
+2019
+2018
+1,244
+1,312
+1,306
+3,177
+3,134
+Unit: RMB100 millions
+Net fee and commission income
+2,987
+Unit: RMB100 millions
+Net profit
+Financial Highlights
+7
+Annual Report 2020
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong SAR, China
+Unit: RMB Yuan
+333,451
+301,094
+276,995
+%
+Non-performing loans ratio
+2020
+2019
+8,675
+10,413
+18,630
+11,828
+Unit: RMB100 millions
+Increment of personal deposits
+2020
+International Auditors
+2019
+0.82
+0.86
+0.86
+2018
+11,865
+13,414
+Unit: RMB100 millions
+Increment of loans to customers
+2020
+2019
+2018
+2018
+Best Retail Bank for
+The 2020 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 26 March 2021. All directors of the Bank attended the meeting.
+The Chamber of Hong Kong Listed
+Companies
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+For details on the Bank's fulfillment of corporate social responsibilities, please refer
+to the 2020 Corporate Social Responsibility Report (ESG Report) of Industrial and
+Commercial Bank of China Limited issued by the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+.311
+140
+139
+136
+134
+130
+110
+China Council for Brand Development
+.90
+List of Domestic and Overseas Branches and Offices
+Auditor's Report and Financial Statements
+Organizational Chart
+Significant Events..
+Report of the Board of Supervisors.
+Report of the Board of Directors.
+Corporate Governance Report.
+Directors, Supervisors and Senior Management.
+Shareholding of Substantial Shareholders.
+Details of Changes in Share Capital and
+Bank ICBC (USC)
+.85
+Capital Regulation
+Company Law
+ICBC Investment
+ICBC International
+ICBC Credit Suisse Asset Management
+ICBC (USA)
+ICBC (Turkey)
+ICBC (Thai)
+ICBC (Peru)
+ICBC (New Zealand)
+ICBC (Mexico)
+ICBC (Malaysia)
+ICBC (Macau)
+ICBC (London)
+ICBC (Indonesia)
+ICBC (Europe)
+ICBC (Canada)
+ICBC (Brasil)
+ICBC (Austria)
+ICBC (Asia)
+ICBC (Argentina)
+ICBC (Almaty)
+Hong Kong Listing Rules
+Huijin
+HKEX
+CSRC
+CBIRC
+ICBC Investments Argentina
+ICBC Is in Action to Support Poverty Alleviation
+Hot Topics in the Capital Market
+.32
+Business Overview
+.18
+Financial Statements Analysis.
+.17
+- Economic, Financial and Regulatory Environments.
+17
+Discussion and Analysis
+.14
+President's Statement.
+11
+Chairman's Statement
+.8
+.7
+Financial Highlights.
+Corporate Information
+.6
+Important Notice
+.5
+Major Ranking and Rewards in 2020
+4
+Definitions.
+Contents
+- Corporate Banking
+.83
+Personal Banking
+Financial Market Business
+.81
+Other Information Disclosed Pursuant to Regulatory Requirements
+.80
+Outlook..
+.77
+- Capital Management
+.60
+Risk Management
+.50
+Internationalized and Diversified Operation.
+_
+.48
+Human Resources Management, Employees and Institutions
+.46
+Channel Development and Service Enhancement.
+.43
+Internet Finance
+.40
+.38
+.37
+.35
+.32
+FinTech...
+Asset Management Services
+ICBC Leasing
+101
+ICBC Technology
+Ranking the
+1st place
+for the eighth
+consecutive year
+In the Global 2000
+Ranking the
+1st place
+Fortune
+FORTUNE
+Among commercial banks in
+the Global 500 for the eighth
+consecutive year
+Ranking the
+1st place
+The Banker
+The Banker
+consecutive year
+Among the Top 1000
+World Banks for the eighth
+Ranking the
+1st place
+Major Ranking and Rewards in 2020
+ICBC
+4
+or Industrial and Commercial
+Industrial and Commercial Bank of China Limited;
+Bank of China Limited and its subsidiaries
+The State Council of the People's Republic of China
+Innovation and Excellence
+Standard Bank Group Limited
+National Council for Social Security Fund
+Shanghai Stock Exchange
+Among the Top 500
+Banking Brands for the fifth
+consecutive year
+The Stock Exchange of Hong Kong Limited
+Ranking the
+1st place
+Forbes
+The Asian Banker
+ENAWARDS2020
+Governance
+Corporate
+Excellence Awards
+The Hong Kong Corporate
+Governance
+財
+The Asset
+THE Asset
+in China
+Best Insurance Custodian Bank
+ICBC Standard Bank
+Best Bank, China
+Brand Finance
+THE ASIAN BANKER®
+亚洲银行家
+Management Bank in Asia Pacific
+Best Asian International Cash
+Best Mega Retail Bank in China
+Best API and Open Banking
+Implementation
+Global Finance
+GLOBAL
+FINANCE
+Best Bank in China
+Best Corporate Bank in China
+Most Creative Bank in China
+BRAND-FINANCE®
+In the "Corporate Brand
+Value List" for the
+fifth time
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Best Bond Advisor in China
+The People's Bank of China
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Hong Kong Exchanges and Clearing Limited
+China Securities Regulatory Commission
+Company Law of the People's Republic of China
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated in June 2012
+China Banking and Insurance Regulatory Commission
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+The Bank/The Group
+State Council
+Standard Bank
+SSF
+SSE
+SEHK
+Hong Kong
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+New Rules on Asset Management
+Inversora Diagonal
+IFRSS
+ICBCFS
+ICBC-AXA
+ICBC Wealth Management
+Accounting Standards for Business Enterprises promulgated by MOF
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Industrial and Commercial Bank of China (Argentina) S.A.
+MOF
+ICBC Austria Bank GmbH
+The Guiding Opinions on Regulating the Asset Management Business of Financial
+Institutions jointly promulgated by PBC, CBIRC, CSRC and State Administration
+of Foreign Exchange in 2018 and relevant rules
+Industrial and Commercial Bank of China (Asia) Limited
+Ministry of Finance of the People's Republic of China
+Inversora Diagonal S.A.
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+ICBC Wealth Management Co., Ltd.
+ICBC Information and Technology Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Financial Leasing Co., Ltd.
+ICBC Investments Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión
+ICBC Financial Asset Investment Co., Ltd.
+The International Financial Reporting Standards promulgated by the International Accounting
+Standards Board, which comprise the International Accounting Standards
+ICBC Credit Suisse Asset Management Co., Ltd.
+ICBC International Holdings Limited
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (Malaysia) Berhad
+ICBC PERU BANK
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China (USA) NA
+Industrial and Commercial Bank of China (New Zealand) Limited
+State-owned
+Domestic
+100,000,000
+14.3
+None
+legal person
+preference shares
+BOC International (China)
+Co., Ltd.
+10.0
+Domestic
+70,000,000
+None
+owned legal person
+preference shares
+CCB Trust Co., Ltd.
+China Mobile Communications
+Group Co., Ltd.
+State-owned
+Domestic non-state-
+preference shares
+State-owned
+legal person
+None
+Domestic
+Shareholding
+percentage (%)
+restrictions
+locked-up
+on sales
+shares
+Bosera Asset Management
+Co., Limited
+Domestic
+preference shares
+150,000,000
+21.4
+None
+China Life Insurance Company
+Limited
+State-owned
+Domestic
+120,000,000
+17.1
+legal person
+70,000,000
+Domestic non-state-
+owned legal person
+Domestic non-state-
+owned legal person
+None
+preference shares
+BOCOM Schroders Asset
+Management Co., Ltd.
+Ping An Property & Casualty
+Insurance Company of
+China, Ltd.
+Domestic
+15,000,000
+2.1
+None
+preference shares
+Domestic
+15,000,000
+2.1
+None
+preference shares
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "2" as at 31 December 2020.
+(2) Shanghai Tobacco Group Co., Ltd., China National Tobacco Corporation Shandong Branch and China National Tobacco
+Corporation Heilongjiang Branch are all wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance
+Company Limited - Traditional - Ordinary insurance products-005L - CT001 Hu" is managed by China Life Insurance
+Company Limited. "Ping An Life Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by
+Ping An Life Insurance Company of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty
+Insurance Company of China, Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected
+relations or concert party action among the afore-mentioned preference shareholders and among the afore-mentioned
+preference shareholders and top 10 ordinary shareholders.
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "I" held by preference shareholders
+in total number (700 million shares) of domestic preference shares of "12".
+98
+ICBC
+at the end
+of the period
+owned legal person
+None
+2.9
+20,000,000
+legal person
+preference shares
+China National Tobacco
+Corporation
+Shanghai Tobacco Group
+Co., Ltd.
+Other entities
+Domestic
+50,000,000
+7.1
+None
+10.0
+preference shares
+Domestic
+30,000,000
+4.3
+None
+preference shares
+Bank of Beijing Co., Ltd.
+Domestic non-state-
+Domestic
+Other entities
+pledged or
+A Share
+Shares held
+manager
+Long
+position
+14.02
+3.41
+Co., Ltd.(1)
+SSF(2)
+Beneficial owner
+8,663,703,234
+Long
+9.98
+2.43
+position
+Temasek Holdings
+(Private) Limited
+Management
+Interest of
+Long
+8.43
+2.05
+controlled
+position
+corporations
+China Life Insurance
+Beneficial owner
+205,750,000
+Long
+0.24
+0.06
+(Group) Company (3)
+7,317,475,731
+position
+12,168,809,000
+Ping An Asset
+Long
+position
+corporations
+Total
+Beneficial owner
+124,731,774,651
+110,984,806,678
+Long
+position
+46.26
+41.16
+35.00
+31.14
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2020, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+(2)
+Due to rounding, percentages presented herein are for reference only.
+Annual Report 2020
+Investment
+93
+HOLDERS OF H SHARES
+Number of
+Percentage of
+Name of substantial
+H shares held
+shareholder
+Capacity
+(share)
+Nature of
+interests
+Percentage of
+total ordinary
+H shares (4) (%)
+shares (4) (%)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Interest of
+controlled
+5,005,191,000
+Long
+The number of qualified placees for the Offshore Preference Shares shall not be less than six, and they shall be offered only
+to professional investors instead of retail investors, and shall be non-publicly transferred in the OTC market only.
+For details on the issuance of offshore preference shares of the Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Annual Report 2020
+95
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Reset dividend rate of "I¼1″
+Pursuant to relevant provisions of the Prospectus on Non-public Offering of Preference Shares of Industrial and Commercial
+Bank of China Limited, domestic preference shares non-publicly offered by the Bank in November 2015 (abbreviation "I
+11" and code "360011") were priced at a coupon rate adjusted in stages, with the coupon rate being the benchmark
+interest rate plus a fixed spread. The coupon rates for the first five years remained unchanged from the date of issuance,
+and subsequently the benchmark interest rate will be reset every five years, and the nominal dividend rate during each reset
+period will remain unchanged. In November 2020, the Bank reset the nominal dividend rate of "1" as it lasted five
+years from the issuance date, and the coupon dividend rate after reset became 4.58% from 23 November 2020.
+For details on the reset dividend rate of domestic preference shares of the Bank, please refer to the announcements
+published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Number of Preference Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had one offshore preference shareholder (or proxy), 26 domestic preference
+shareholders of "1" and 32 domestic preference shareholders of "f2". As at the end of the month immediately
+before the annual results announcement date (28 February 2021), the Bank had one offshore preference shareholder (or
+proxy), 25 domestic preference shareholders of "I" and 33 domestic preference shareholders of "2".
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+BANK
+Unit: Share
+145 million shares
+Name of shareholder
+Increase/
+decrease
+during the
+reporting
+Number
+of shares
+Number of
+Shares held
+The Bank of New York
+Depository (Nominees) Limited
+Foreign
+legal person
+Class of shares
+USD offshore
+preference shares
+period
+145,000,000
+at the end of
+the period
+145,000,000
+Shareholding
+percentage
+subject to
+pledged or
+restrictions
+Nature of
+shareholder
+Number of
+shares issued
+Net amount
+of proceeds
+per share
+RMB135.77
+per share
+USD20
+5.77
+1.40
+position
+corporations
+Total
+5,210,941,000
+6.00
+1.46
+Notes: (1) As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on behalf
+of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as investment
+manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by Ping An Asset
+Management Co., Ltd. for the period ended 31 December 2020 (the date of relevant event being 12 June 2019). Both Ping
+An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping An Insurance
+(Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the voting rights in
+respect of such shares on behalf of customers and independently exercise the rights of investment and business management
+in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company of China, Ltd.,
+Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as a holding
+company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities and Futures
+Ordinance of Hong Kong.
+(2) According to the information provided by SSF to the Bank, SSF held 7,946,049,758 H shares of the Bank as at the end of the
+reporting period.
+(3) According to the interest disclosure by China Life Insurance (Group) Company dated 11 November 2020, China Life Insurance
+Company Limited is the controlled corporation of China Life Insurance (Group) Company, and it totally held the long position of
+4,874,071,000 H shares, accounting for 5.62% and 1.37% of H shares and all ordinary shares of the Bank respectively.
+(4)
+Due to rounding, percentages presented herein are for reference only.
+94
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Preference Shares
+Issuance and Listing of Preference Shares in Latest Three Years
+Issuance of "2"
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2019] No. 444 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2019] No. 1048, the Bank made a non-public issuance of 700 million domestic preference shares on 19
+September 2019 at a par value of RMB100 per share. The dividend rate is the benchmark interest rate plus a fixed spread,
+remaining unchanged in the first five years. Subsequently the benchmark interest rate will be reset every five years, with
+the dividend rate kept unchanged in each reset period and the fixed spread remaining constant through the duration of
+the domestic preference shares. The initial dividend rate of the afore-mentioned domestic preference shares is set at 4.2%
+through market inquiry for the first five years. With the consent of SSE by its letter Shang Zheng Han [2019] No. 1752, the
+afore-mentioned domestic preference shares issued were listed for transfer on the Comprehensive Business Platform of SSE
+on 16 October 2019 with the stock name "2" and stock code 360036. Proceeds of the afore-mentioned domestic
+preference shares totaled RMB70.0 billion, all of which was replenished to the additional tier 1 capital of the Bank after
+deduction of issuance expenses.
+For issuance of domestic preference shares of the Bank, please refer to the announcements published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Issuance of offshore preference shares
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2020] No. 138 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2020] No. 1391, the Bank made a non-public issuance of 145 million USD-denominated non-cumulative
+perpetual offshore preference shares (the "Offshore Preference Shares") on 23 September 2020 at an issuance price of
+USD20 per share (see the table below for details). The Offshore Preference Shares were listed on the SEHK on 24 September
+2020. All proceeds from the issuance, after deduction of commission and issuance expenses, will be used to replenish
+additional tier 1 capital and increase capital adequacy ratio.
+Type of offshore
+preference shares
+USD Preference Shares
+Stock code
+4620
+Dividend
+rate
+3.58%
+Total
+issuance
+amount
+USD2.9 billion
+Full amount
+of proceeds
+1,013,921,700
+locked-up
+Interest of
+controlled
+Long
+position
+The Bank had no shares subject to restrictions on sales.
+(3) Total number of shares held by HKSCC Nominees Limited refers to the total H shares held by it as a nominee on behalf of all
+institutional and individual investors registered with accounts opened with HKSCC Nominees Limited as at 31 December 2020,
+which included H shares of the Bank held by SSF, Ping An Asset Management Co., Ltd., Temasek Holdings (Private) Limited and
+China Life Insurance (Group) Company.
+(4) According to the Notice on Comprehensively Transferring Part of State-Owned Capital to Fortify Social Security Funds (Cai Zi
+[2019] No. 49), MOF transferred 12,331,645,186 A shares to the state-owned capital transfer account of SSF in a lump sum in
+December 2019. According to the relevant requirements under the Notice of the State Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned Capital to Fortify Social Security Funds (Guo Fa [2017] No. 49), SSF shall perform the
+obligation of more than 3-year lock-up period as of the date of the receipt of transferred shares. At the end of the reporting
+period, according to the information provided by SSF to the Bank, SSF also held 7,946,049,758 H shares of the Bank and
+20,277,694,944 A and H shares in aggregate, accounting for 5.69% of the Bank's total ordinary shares.
+(5) HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Limited. Central Huijin Asset
+Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware of any connected
+relations or concert party action among the afore-mentioned shareholders.
+Annual Report 2020
+91
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Particulars of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Controlling Shareholders
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Peng Chun. Huijin is a
+wholly-owned subsidiary of China Investment Corporation. It, in accordance with authorization by the State Council, makes
+equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the
+rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the
+goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other business
+activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions it
+controls.
+As at 31 December 2020, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+No.
+(2)
+1
+3
+Company name
+China Development Bank Corporation
+Industrial and Commercial Bank of China (A; H)
+Agricultural Bank of China Limited (A; H)
+4
+Bank of China Limited (A; H)
+5
+China Construction Bank Corporation (A; H)
+6
+China Everbright Group Ltd.
+7
+Hengfeng Bank Co., Ltd.
+2
+8
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2020.
+Traditional
+subject to
+0.33
+1,186,120,253
+None
+-156,557,563
+person
+Central Huijin Asset Management
+Co., Ltd.
+State-owned
+legal person
+A Share
+0.28
+1,013,921,700
+None
+China Life Insurance Company
+Limited Traditional
+Ordinary insurance
+Other entities
+0.13
+470,349,288
+None
+92,678,961
+-Ordinary insurance products
+- 005L CT001 Hu
+Taiping Life Insurance Co., Ltd.
+Other entities
+A Share
+0.11
+387,807,151
+None
+24,521,800
+A Share
+China Export & Credit Insurance Corporation
+9
+China Reinsurance (Group) Corporation (H)
+14.54%
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+(2) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+92
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 31.14% shares of the Bank as at 31
+December 2020. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+Particulars of Other Substantial Shareholders
+SSF. SSF owned 5.69% of the shares of the Bank as at 31 December 2020. Founded in August 2000, SSF is a public service
+institution administered by MOF, having its address at South Tower, Building 11, Fenghuiyuan Fenghui Times Building,
+Xicheng District, Beijing, China, and its legal representative being Liu Wei. With the approval of the State Council and
+pursuant to regulations of MOF and the Ministry of Human Resources and Social Security, SSF has been entrusted to manage
+the following funds: the National Social Security Fund, the subsidy from central government to individual accounts, part of
+the surplus of the enterprise employee's basic pension insurance, basic pension insurance fund and the partial state-owned
+capital transferred. There was no pledge of shares of the Bank by the substantial shareholder.
+Particulars of the De Facto Controller
+None.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of
+Hong Kong
+As at 31 December 2020, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+13.3%
+HOLDERS OF A SHARES
+shareholder
+Huijin(¹)
+MOF
+Percentage of
+total ordinary
+shares (2) (%)
+34.71
+0.38
+0.28
+Number of
+A shares held
+Capacity
+Beneficial owner
+(share)
+Nature of
+interests
+Percentage of
+A shares (2) (%)
+123,717,852,951
+Name of substantial
+30.76%
+40.11%
+20.05%
+10
+New China Life Insurance Company Limited (A; H)
+11
+China Jianyin Investment Limited
+12
+China Galaxy Financial Holdings Company Limited
+13
+Shenwan Hongyuan Group Co., Ltd. (A; H)
+14
+China International Capital Corporation Limited (A; H)
+15
+Jiantou CITIC Asset Management Co., Ltd. (A; H)
+16
+China Galaxy Asset Management Co., Ltd.
+17
+Guotai Junan Investment Management Co., Ltd.
+Huijin's shareholding
+percentage
+34.68%
+34.71%
+40.03%
+64.02%
+57.11%
+63.16%
+53.95%
+73.63%
+71.56%
+31.34%
+100.00%
+69.07%
+45.89
+(%)
+products 022L- CT001 Hu
+shares
+China Mobile Communications
+State-owned
+Group Co., Ltd.
+legal person
+Domestic
+preference shares
+200,000,000
+44.4
+None
+China National Tobacco
+Corporation
+Other entities
+Domestic
+preference shares
+50,000,000
+11.1
+shares
+None
+Limited
+State-owned
+legal person
+Domestic
+35,000,000
+7.8
+None
+preference shares
+Ping An Life Insurance Company
+of China, Ltd.
+Domestic non-state-
+owned legal person
+BOCOM Schroders Asset
+Management Co., Ltd.
+Domestic non-state-
+owned legal person
+China Life Insurance Company
+Domestic
+preference shares
+Domestic
+preference shares
+on sales
+restrictions
+ICBC Beijing Branch contributing to the "Chunnuan Action"
+户型规刻不容缓 中国工商银行在行动
+In 2020, the Bank purchased and helped sell agricultural products from poverty-stricken areas worth over RMB3.0
+billion.
+•
+In its efforts to step up purchase of quality agricultural products in poverty-stricken areas, the Bank organized consumption-
+based poverty alleviation programs including "Chunnuan Action" and "Jinqiu Action", and advocated "buying more is
+helping more".
+ICBC enhanced poverty alleviation through consumption
+Foreign legal
+Notes: (1) The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2020.
+(2)
+As the issuance of the offshore preference shares above was private offering, the register of preference shareholders presented
+the information on proxies of placees.
+(3) The Bank is not aware of any connected relations or concert party action between the afore-mentioned preference shareholder
+and top 10 ordinary shareholders.
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+96
+ICBC
+locked-up
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Unit: Share
+Nature of
+Name of shareholder
+shareholder
+Class of shares
+Increase/
+decrease
+during the
+reporting
+period
+Number
+of shares
+Number of
+Shares held
+subject to
+pledged or
+at the end
+of the period
+Shareholding
+percentage (%)
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I1″
+30,000,000
+6.7
+None
+10,000,000
+2.2
+None
+Corporation Heilongjiang
+Branch
+preference shares
+Ping An Property & Casualty
+Insurance Company of
+China, Ltd.
+Domestic non-state-
+owned legal person
+Domestic
+preference shares
+10,000,000
+2.2
+-
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "1" as at 31 December 2020.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance Company Limited - Traditional
+Ordinary insurance products - 005L - CT001 Hu" is managed by China Life Insurance Company Limited. "Ping An Life
+Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by Ping An Life Insurance Company
+of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China,
+Ltd. have connected relations. Huijin is the controlling shareholder of China International Capital Corporation Limited. Save as
+disclosed above, the Bank is not aware of any connected relations or concert party action among the afore-mentioned preference
+shareholders and among the afore-mentioned preference shareholders and top 10 ordinary shareholders.
+Domestic
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "I" held by preference shareholders
+in total number (450 million shares) of domestic preference shares of "11".
+97
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I"
+Unit: Share
+Nature of
+Name of shareholder
+shareholder
+Class of shares
+Increase/
+decrease
+during the
+reporting
+period
+Number
+of shares
+on sales
+Number of
+Annual Report 2020
+Other entities
+China National Tobacco
+preference shares
+3,000,000
+18,000,000
+4.0
+None
+CCB Trust Co., Ltd.
+China International Capital
+Corporation Limited
+BOC International (China)
+Co., Ltd.
+State-owned
+legal person
+State-owned
+legal person
+Domestic non-state-
+owned legal person
+Domestic
+preference shares
+15,000,000
+3.3
+None
+Domestic
+preference shares
+15,000,000
+15,000,000
+3.3
+None
+Domestic
+preference shares
+15,000,000
+3.3
+I
+None
+China National Tobacco
+Other entities
+Domestic
+10,000,000
+2.2
+None
+Corporation Shandong Branch
+and purchasing Wanyuan chicken in April 2020
+▲ ICBC officials in poverty alleviation visiting the goat industry
+in Nanjiang in April 2020
+None
+Poverty alleviation was combined with attitude change and education support.
+24.18
+H Share
+Foreign legal
+HKSCC Nominees Limited (3)
+None
+110,984,806,678
+31.14
+A Share
+State-owned
+MOF
+None
+period
+the reporting
+86,167,601,631
+pledged or
+locked-up shares
+34.71
+A Share
+State-owned
+Huijin
+Number of
+Shareholding
+percentage
+(%)
+Class of
+shares
+Nature of
+shareholder
+Name of shareholder
+decrease of
+shares during
+Increase/
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Total number of
+shares held
+123,717,852,951
+Unknown
+14,452,590
+person
+Unknown
+ICBC strengthened the endogenous power
+78.4
+EUR offshore
+preference shares
+40,000,000
+21.6
+Unknown
+Hong Kong Securities Clearing
+Company Limited
+legal person
+None
+2,416,131,564
+A Share
+State-owned
+China Securities Finance Co., Ltd.
+Ordinary insurance products
+Traditional —
+of China, Ltd.
+None
+3,687,330,676
+1.03
+A Share
+Other entities
+Ping An Life Insurance Company
+None
+12,331,645,186
+3.46
+A Share
+State-owned
+SSF(4)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+0.68
+As at the end of the reporting period, the Bank had a total number of 693,520 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 116,924 holders of H shares and 576,596 holders of A shares. As at
+the end of the month immediately before the annual results announcement date (28 February 2021), the Bank had a total
+number of 617,297 ordinary shareholders and no holders of preference shares with voting rights restored.
+100.00
+356,406,257,089
+Shares not subject to
+II.
+restrictions on sales
+Shares subject to
+I.
+Percentage
+(%)
+Number of shares
+At 31 December 2020
+Increase/decrease
+during the
+reporting period
+Percentage
+(%)
+Unit: Share
+restrictions on sales
+Number of shares
+DETAILS OF CHANGES IN SHARE CAPITAL
+Changes in Ordinary Shares
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+89
+Annual Report 2020
+The Bank continued to implement the "Candle
+Program" and the "Sailing Program" to train and
+commend excellent rural teachers, fund college
+students, and recruit college graduates from families in
+poverty to extend the poverty alleviation chain through
+education.
+D
+さささ
+▲ An ICBC volunteer teaching an English class in Reshuihe Town
+Central School in Jinyang County in May 2020
+「愉快学习健康成长
+90
+空中英语
+ONIARH
+At 31 December 2019
+1. RMB-denominated
+The Bank launched the "Dream in ICBC" training
+program, and trained more than 100,000 person-
+times of community-level cadres and technicians in the
+four counties and cities.
+The Bank did not conduct any share issue or issue any convertible bonds during the reporting period.
+The Bank did not have any employee shares.
+269,612,212,539
+For details on the issuance of tier 2 capital bonds and the issuance progress of undated additional tier 1 capital bonds of the
+Bank during the reporting period, please refer to the section headed "Discussion and Analysis - Capital Management".
+―
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares".
+Number of Shareholders and Particulars of Shareholding
+Details of Securities Issuance and Listing
+(3) Due to rounding, percentages presented herein are for reference only.
+Change in Corporate Shareholding" (Revision 2007) of CSRC.
+(2) "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the
+Content and Format of Information Disclosure of Companies with Public Offerings Content and Format of the Report of
+Notes: (1) The above data are based on the Equity Structure Chart issued by China Securities Depository and Clearing Corporation Limited.
+100.00
+356,406,257,089
+24.35
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 35. to the Financial
+Statements: Debt Securities Issued; Note 38. to the Financial Statements: Other Equity Instruments" for details.
+2. Foreign shares listed
+86,794,044,550
+86,794,044,550
+24.35
+overseas
+III. Total number of shares
+356,406,257,089
+75.65
+356,406,257,089
+100.00
+269,612,212,539
+75.65
+100.00
+ordinary shares
+Unit: RMB10,000
+Contribution by the
+Directors, Supervisors and Senior Management
+Remuneration from the Bank
+(1)
+(before tax)
+paid
+Remuneration
+Name
+Annual Remuneration
+ICBC
+Annual Report 2020
+On 18 February 2020, the Board of Directors appointed Ms. Xiong Yan and Mr. Song Jianhua as Chief Business Officers
+of the Bank, and their qualifications were approved by CBIRC in April 2020. On 27 March 2020, the Board of Directors
+appointed Mr. Wang Jingwu as Senior Executive Vice President of the Bank, and his qualification was approved by CBIRC
+in April 2020. On 28 April 2020, the Board of Directors appointed Mr. Liao Lin as Chief Risk Officer of the Bank, and
+appointed Mr. Wang Bairong as Chief Business Officer of the Bank, who ceased to act as Chief Risk Officer of the Bank. On
+12 June 2020, the Board of Directors appointed Mr. Zhang Wenwu as Senior Executive Vice President of the Bank, and his
+qualification was approved by CBIRC in July 2020. On 28 August 2020, the Board of Directors appointed Mr. Xu Shouben as
+Senior Executive Vice President of the Bank, and his qualification was approved by CBIRC in October 2020. On 25 February
+2021, the Board of Directors appointed Mr. Liao Lin as President of the Bank, and his qualification was approved by CBIRC in
+March 2021. Mr. Liao Lin ceased to act as Chief Risk Officer of the Bank after he took office as President.
+Senior Management Members
+At the First Extraordinary General Meeting of 2020 held on 8 January 2020, Mr. Yang Guozhong was elected as Shareholder
+Supervisor of the Bank, and his new term of office started from the day of approval by the Shareholders' General Meeting,
+and his term of office as Chairman of the Board of Supervisors of the Bank took effect simultaneously. At the special
+meeting of the first session of employee representative assembly of the Bank held on 15 September 2020, Mr. Wu
+Xiangjiang was elected as Employee Supervisor of the Bank, and his term of office started from the day of approval by the
+employee representative assembly. In September 2020, Mr. Hui Ping ceased to act as Employee Supervisor of the Bank due
+to his age. In March 2021, Mr. Yang Guozhong ceased to act as Shareholder Supervisor and Chairman of the Board of
+Supervisors of the Bank due to change of job assignments.
+Supervisors
+In February 2020, Mr. Hu Hao ceased to act as Executive Director and Senior Executive Vice President of the Bank due to
+change of job assignments. In February 2020, Mr. Dong Shi ceased to act as Non-executive Director of the Bank due to
+change of job assignments. In March 2020, Mr. Ye Donghai ceased to act as Non-executive Director of the Bank due to
+change of job assignments. In March 2020, Ms. Sheila Colleen Bair ceased to act as Independent Non-executive Director of
+the Bank due to expiration of her term of office. In December 2020, Mr. Gu Shu ceased to act as Vice Chairman, Executive
+Director and President of the Bank due to change of job assignments. In February 2021, Ms. Mei Yingchun ceased to act as
+Non-executive Director of the Bank due to expiration of her term of office.
+At the Second Extraordinary General Meeting of 2019 held on 22 November 2019, Mr. Feng Weidong and Ms. Cao
+Liqun were elected as Non-executive Director of the Bank, and their qualifications were approved by CBIRC respectively
+in January 2020. At the Annual General Meeting for the Year 2019 held on 12 June 2020, Mr. Liao Lin was elected as
+Executive Director of the Bank, and his qualification was approved by CBIRC in July 2020; Mr. Shen Si was re-elected as
+Independent Non-executive Director of the Bank, and his new term of office started from the day of approval at the Annual
+General Meeting. On 29 January 2021, the Board of Directors of the Bank nominated Ms. Chen Yifang as a candidate for
+Non-executive Director of the Bank. The appointment of Ms. Chen Yifang as the Bank's non-executive director shall be
+submitted to the Shareholders' General Meeting of the Bank for deliberation and approval, after which, her qualification
+will be submitted to CBIRC for approval. Ms. Chen Yifang's term of office as Non-executive Director of the Bank shall start
+from the day of approval by CBIRC. On 25 February 2021, the Board of Directors of the Bank elected Mr. Liao Lin as Vice
+Chairman of the Bank, and his qualification was approved by CBIRC in March 2021.
+Directors
+Appointment and Removal
+employer to social
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Directors, Supervisors and Senior Management
+107
+No
+remuneration
+before tax
+allowance,
+71.17
+No
+106
+77.82
+15.43
+55.74
+15.88
+61.94
+Liao Lin
+Chen Siqing
+(5)=(1)+(2)+(3)+(4)
+parties or not
+or other related
+remuneration from
+shareholder entities
+Total
+Obtain
+(4)
+(3)
+(2)
+income
+Fees
+insurances
+Other
+monetary
+additional medical
+annuities, and
+insurance, housing
+Mr. Lu Yongzhen, Mr. Zheng Fuqing, Mr. Feng Weidong and Ms. Cao Liqun were recommended by Huijin to serve as
+Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section headed
+"Details of Changes in Share Capital and Shareholding of Substantial Shareholders - Interests and Short Positions Held by
+Substantial Shareholders and Other Persons" for further details.
+Directors, Supervisors and Senior Management
+Song Jianhua, Chief Business Officer
+Mr. Wellink has served as Independent Non-executive Director of the Bank since December 2018. Previously, he served
+as the Treasurer General in the Dutch Ministry of Finance, member of the Executive Board and the President of the Dutch
+Central Bank, member of the Governing Council of the European Central Bank, member of the Group of Ten Central Bank
+Governors and Governor of the International Monetary Fund, member and Chairman of the Board of Directors of the Bank
+for International Settlements, Chairman of the Basel Committee on Banking Supervision, Independent Director of Bank of
+China Limited, Vice Chairman of Supervisory Board of PricewaterhouseCoopers Accountants N.V. and an Emeritus Professor
+at the Free University in Amsterdam. Mr. Wellink also served as member of the supervisory board of a bank, a reinsurance
+company and other enterprises on behalf of the Dutch authorities, Chairman of the Board of Supervisors of the Netherlands
+Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and the Westeinde Hospital in The Hague.
+He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of Orange-
+Nassau since 2011. He received a Master's degree in Law from Leiden University, a Doctorate degree in Economics from
+Erasmus University Rotterdam and an Honorary Doctorate from Tilburg University.
+Nout Wellink, Independent Non-executive Director
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of
+Shanghai Pudong Development Bank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA
+degree. He is a senior economist.
+Shen Si, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region, Director and Chairman
+of Audit Committee of Hang Seng Management College and Vice Chairman of the Council of the Open University of Hong
+Kong. Mr. Yang currently serves as a member of the 13th National Committee of the Chinese People's Political Consultative
+Conference, a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority, a member of the
+board of directors of the Hong Kong Jockey Club and an Independent Non-executive Director of Tencent Holdings Limited.
+Mr. Yang graduated from the London School of Economics and Political Science. He was awarded the degree of Honorary
+Doctor of Social Sciences by The Open University of Hong Kong. He is a Justice of the Peace in Hong Kong. Mr. Yang holds
+the qualification of Chartered Accountants, and is a senior member of the Institute of Chartered Accountants in England and
+Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of Management Accountants.
+Yang Siu Shun, Independent Non-executive Director
+Directors, Supervisors and Senior Management
+103
+Annual Report 2020
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee
+of the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of
+People's Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of
+the Technical Committee of the International Organization of Securities Commissions, a Non-executive Director of Global
+Digital Creations Holdings Limited. He was an Independent Non-executive Director of Link Management Limited, which is
+the Manager of Link Real Estate Investment Trust. He was also an Independent Non-executive Director of China Shenhua
+Energy Company Limited, Bank of China Limited, China Life Insurance Company Limited and New China Life Insurance
+Company Ltd. Mr. Neoh currently serves as an Independent Non-executive Director of CITIC Limited and Chairman of Hong
+Kong Independent Police Complaints Council. He graduated from the University of London with a Bachelor's degree in Law.
+He is Honorary Doctorate of Law of Chinese University of Hong Kong and Open University of Hong Kong and Honorary
+Doctorate of Social Sciences of Lingnan University. He was elected Honorary Fellow of the Hong Kong Securities Institute
+and Academician of the International Euro-Asian Academy of Sciences. Mr. Neoh was appointed as Senior Counsel in Hong
+Kong. He is a barrister of England and Wales. He was admitted to the State Bar of California.
+Anthony Francis Neoh, Independent Non-executive Director
+Fred Zuliu Hu, Independent Non-executive Director
+Ms. Cao has served as Non-executive Director of the Bank since January 2020. She joined Huijin in 2020. Ms. Cao previously
+served as Deputy Director of Regulations Division, General Affairs Department, Director of Regulations Division, General
+Affairs Department, Director of Non-Financial Institutions Inspection Division, Supervision and Inspection Department,
+Director of General Affairs Division, Supervision and Inspection Department, Deputy Director-General of Supervision and
+Inspection Department, Inspector of General Affairs Department (Policy and Regulation Department), Level-Two Inspector of
+General Affairs Department (Policy and Regulation Department) of State Administration of Foreign Exchange, and acted as
+Deputy Director of Administrative Committee of Beijing's Zhongguancun Science Park. Ms. Cao obtained a Bachelor's degree
+in Law from China University of Political Science and Law, a Master's degree in Finance from Renmin University of China, and
+a Master's degree in Public Administration from Peking University. Ms. Cao is an economist.
+Mr. Feng has served as Non-executive Director of the Bank since January 2020. He joined MOF in 1986. He previously
+served as Deputy Director of Academic Affairs Division of Chinese Accounting Correspondence School of Accounting
+Department of MOF (deputy division chief level), Person in charge of Teaching Material Department of National Accountant
+Certification Examination Leading Group Office, Director of Accounting Personnel Management Division and Director of
+Institutional System Division I of Accounting Department of MOF, Deputy Director (deputy director-general level), Deputy
+Director (person in charge), Director (director-general level), Secretary of the Party Committee and Director of National
+Accountant Assessment & Certification Centre of MOF. He concurrently serves as a Managing Director of the 8th Council
+of the Accounting Society of China, a part-time professor and off-campus practice tutor for postgraduate students of the
+School of Economics and Management of Beijing Jiaotong University, and a visiting tutor for postgraduate students in the
+Accounting School of the Central University of Finance and Economics. Mr. Feng obtained a Bachelor's degree in Economics
+from Dongbei University of Finance & Economics and Doctorate degree from Beijing Jiaotong University. Mr. Feng Weidong
+is a senior accountant, researcher, non-practicing certified public accountant and is a recipient of the Special Government
+Allowance by the State Council of China.
+Feng Weidong, Non-executive Director
+Mr. Zheng has served as Non-executive Director of the Bank since February 2015. He joined MOF in 1989, and served
+as Deputy Head and Head of the Administrative Office of Shanxi Finance Ombudsman Office of MOF, and Assistant
+Ombudsman and Associate Counsel of Shanxi Finance Ombudsman Office of MOF. Mr. Zheng graduated from the Party
+School of the Central Committee of CPC majoring in law theory. He is an economist.
+Zheng Fuqing, Non-executive Director
+Directors, Supervisors and Senior Management
+ICBC
+102
+Mr. Liao has served as Vice Chairman, Executive Director and President of the Bank since March 2021, Executive Director
+of the Bank since July 2020, and Senior Executive Vice President, Senior Executive Vice President and concurrently Chief
+Risk Officer since November 2019. Mr. Liao joined China Construction Bank in 1989, and was appointed as Deputy General
+Manager of Guangxi Branch of China Construction Bank, General Manager of Ningxia Branch, Hubei Branch and Beijing
+Branch of China Construction Bank, Chief Risk Officer, Executive Vice President and concurrently Chief Risk Officer of
+China Construction Bank. Mr. Liao graduated from Guangxi Agricultural University. He obtained a Doctorate degree in
+management science from Southwest Jiaotong University. Mr. Liao is a senior economist.
+Lu Yongzhen
+Mr. Lu has served as Non-executive Director of the Bank since August 2019. He joined Huijin in 2019. Mr. Lu previously
+served as Deputy Director of the Administrative Office of the Economic Research Consultation Centre of the State Economic
+and Trade Commission, Director of the Specific Research Department of the Economic Research Centre of the State
+Economic and Trade Commission, Director of the Capital Markets Research Department of the Research Centre of the State-
+owned Assets Supervision and Administration Commission of the State Council, and Director Assistant of the Research
+Centre of the State-owned Assets Supervision and Administration Commission of the State Council with the concurrent post
+as the Director of the Capital Markets Research Department, and Deputy Director of the Research Centre of the State-owned
+Assets Supervision and Administration Commission of the State Council. Mr. Lu obtained a Bachelor's degree and a Master's
+degree in History from Peking University, and a Doctorate degree in Economics from Southwestern University of Finance and
+Economics. He is a researcher.
+Lu Yongzhen, Non-executive Director
+Cao Liqun, Non-executive Director
+Mr. Hu has served as Independent Non-executive Director of the Bank since April 2019. He previously served as a senior
+economist at the International Monetary Fund, Head of Research at the World Economic Forum, the chairman for Greater
+China and a partner at Goldman Sachs Group, Inc., an independent non-executive director of Great Wall Pan Asia Holdings
+Limited (formerly known as SCMP Group Limited), an independent non-executive director of Hang Seng Bank Limited,
+the non-executive director of China Asset Management Co., Ltd., an independent director of Dalian Wanda Commercial
+Management Group Co., Ltd. and an independent director of Shanghai Pudong Development Bank etc. Mr. Hu currently
+serves in various positions such as the chairman of Primavera Capital Group, the non-executive chairman of Yum China
+Holdings, Inc, the independent non-executive director of Hong Kong Exchanges and Clearing Limited, the independent non-
+executive director of Ant Group Co., Ltd., the director of UBS Group AG, the co-chair of The Nature Conservancy's Asia
+Pacific Council and the director of the China Medical Board. Mr. Hu is also a member of the Global Board of Advisors for
+the Council on Foreign Relations, the 21st Century Council of the Berggruen Institute, the Harvard Global Advisory Council,
+the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government, the Stanford Center for International
+Development, and the Jerome A. Chazen Institute of International Business at Columbia University etc. He concurrently
+serves as the co-director of the National Center for Economic Research and a professor at Tsinghua University, and he is also
+an adjunct professor at the Chinese University of Hong Kong and Peking University. Mr. Hu obtained a master's degree in
+engineering science from Tsinghua University, and a master's degree and a PhD in economics from Harvard University.
+104
+ICBC
+Ms. Xiong has served as Chief Business Officer of the Bank since April 2020. She joined ICBC in 1984, and served as
+Deputy Director-General of Kunming Sub-bureau of the Internal Audit Bureau, Deputy General Manager of Yunnan Branch,
+Deputy Director-General of the Sub-bureau directly managed by the Internal Audit Bureau, Deputy General Manager of
+the Corporate Banking Department I (Corporate Banking Department) and General Manager of the Institutional Banking
+Department of the Head Office. Ms. Xiong graduated from Hunan University, and obtained a degree of International Master
+of Business Administration (IMBA) from Fudan University and The University of Hong Kong. She is a senior economist.
+Xiong Yan, Chief Business Officer
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as Head of Suining
+Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of Frankfurt Branch,
+Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General Manager of Banking Department of Sichuan
+Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan was also General Manager of Corporate
+Strategy and Investor Relations Department of the Bank. He graduated from the Southwestern University of Finance and
+Economics and obtained a Doctorate degree in Economics. He is a senior economist.
+Guan Xueqing, Board Secretary
+Mr. Wang has served as Chief Business Officer of the Bank since April 2020. He began his career in 1986. He joined ICBC in
+1991 and previously served as Assistant to Head of Zhejiang Branch and Head of Shaoxing Branch, Deputy Head of Zhejiang
+Branch and General Manager of the Banking Department of Zhejiang Branch, Deputy Head (person in charge) and Head of
+Chongqing Branch and Chief Risk Officer. Mr. Wang graduated from the Party School of the Central Committee of CPC and
+obtained a Master's degree in Economics. He is a senior economist.
+Wang Bairong, Chief Business Officer
+Mr. Xu has served as Senior Executive Vice President of the Bank since October 2020. He joined ICBC in 1995. He was
+appointed as Deputy Head of Guangdong Branch and Head of Shenzhen Branch. Mr. Xu graduated from the Harbin Institute
+of Technology, and he obtained a Doctorate degree in Economics from Sun Yat-sen University. He is a senior economist.
+Xu Shouben, Senior Executive Vice President
+Mr. Zhang has served as Senior Executive Vice President of the Bank since July 2020. He joined ICBC in 1995. He was
+appointed as Deputy General Manager of the Finance & Accounting Department of the Head Office, Deputy Head of
+Liaoning Branch, Executive Director and Chief Financial Officer of ICBC-AXA Assurance Co., Ltd., Director of the Board of
+Supervisors' Office of the Head Office, and General Manager of the Finance & Accounting Department of the Head Office.
+Mr. Zhang graduated from the University of International Business and Economics, and he obtained a Doctorate degree in
+Management from Renmin University of China. He is a senior accountant.
+Zhang Wenwu, Senior Executive Vice President
+Directors, Supervisors and Senior Management
+105
+Annual Report 2020
+Mr. Wang has served as Senior Executive Vice President of the Bank since April 2020. He joined PBC in August 1985, and
+has successively served as Supervision Commissioner (Deputy Director level) of PBC Shijiazhuang Central Sub-branch, Head
+of PBC Shijiazhuang Central Sub-branch and concurrently Director of State Administration of Foreign Exchange (SAFE) Hebei
+Branch, Head of PBC Hohhot Central Sub-branch and concurrently Director of SAFE Inner Mongolia Branch, Head of PBC
+Guangzhou Branch and concurrently Director of SAFE Guangdong Branch, and Director-General of PBC Financial Stability
+Bureau since January 2002. Mr. Wang graduated from the Hebei Banking School, and he received a doctorate degree in
+economics from Xi'an Jiaotong University. He is a research fellow.
+Wang Jingwu, Senior Executive Vice President
+Mr. Shen has served as External Supervisor of the Bank since June 2016. He previously served as the Deputy Chief of the
+Financial Market Division of the Financial System Reform Department, Chief of the System Reform Division and Monetary
+Policy Research Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China.
+Mr. Shen is currently guest professor of Tsinghua University, Zhejiang University and Nankai University. Mr. Shen graduated
+from Renmin University of China, and received a Doctorate degree in Economics. He is a research fellow.
+Shen Bingxi, External Supervisor
+Mr. Qu has served as External Supervisor of the Bank since December 2015. Currently, he is a professor and tutor for
+PhD students of Renmin University of China, Director of China Fiscal and Financial Policy Research Center (a key research
+center of humanities and social sciences of the Ministry of Education), Deputy Director of Capital Market Research Institute
+of Renmin University of China, a council member of China Finance Society and External Expert of China Development Bank.
+He was Head of the Applied Finance Department of the School of Finance, Renmin University of China. Currently, he is also
+External Supervisor of Bank of Beijing. Mr. Qu graduated from Renmin University of China, and received a Doctorate degree
+in Economics.
+Qu Qiang, External Supervisor
+Mr. Wu has served as Employee Supervisor of the Bank since September 2020. He joined ICBC in 1988 and is currently the
+General Manager of Internal Control & Compliance Department of the Bank. He served such positions at the Bank as Deputy
+Head of Zhejiang Branch, General Manager of E-banking Department and General Manager of Internet Finance Department.
+Mr. Wu graduated from Zhejiang University with a Doctorate degree in Management. He is a senior economist.
+Wu Xiangjiang, Employee Supervisor
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently
+the Head of Beijing Branch of the Bank. He served as Deputy General Manager and General Manager of the Banking
+Department as well as Deputy Head and Head of Guizhou Branch of ICBC. Mr. Huang graduated from The University of
+Hong Kong with an MBA degree. He is a senior economist.
+Huang Li, Employee Supervisor
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of the Bank
+since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor of the Board of Supervisors, General
+Manager of the Legal Affairs Department and Chief of Consumer Protection Office of the Bank. He graduated from Peking
+University with a Doctorate degree in Law and is a research fellow.
+Zhang Wei, Shareholder Supervisor
+Mr. Song has served as Chief Business Officer of the Bank since April 2020. He joined ICBC in 1987. He was appointed as
+Deputy General Manager of Jiangsu Branch and General Manager of the Personal Banking Department of the Head Office.
+Mr. Song graduated from Peking University and obtained a Doctorate degree in management science and engineering from
+Nanjing University. He is a senior economist.
+Yes
+Wang Bairong
+Yes
+Yang Guozhong
+Gu Shu
+Directors, Supervisors and Senior Management Leaving Office
+No
+81.14
+16.85
+64.29
+Song Jianhua
+No
+No
+No
+Hu Hao
+222
+17.40
+64.29
+Xiong Yan
+124.72
+23.23
+101.49
+Guan Xueqing
+120.51
+22.33
+98.18
+No
+81.69
+Ye Donghai
+Mei Yingchun
+Dong Shi
+No
+3.75
+Liao Lin, Vice Chairman, Executive Director, President
+3.75
+Yes
+11.50
+11.50
+Yes
+Yes
+Yes
+No
+No
+No
+2 2 2
+6.01
+1.36
+4.65
+77.82
+15.88
+61.94
+77.82
+15.88
+61.94
+Hui Ping
+Sheila Colleen Bair
+33.20
+9.97
+23.23
+Xu Shouben
+Zhang Wei
+Yes
+41.00
+41.00
+Fred Zuliu Hu
+No
+47.00
+47.00
+Nout Wellink
+Yes
+47.00
+47.00
+Shen Si
+Yes
+47.00
+47.00
+Yang Siu Shun
+Yes
+52.00
+52.00
+Anthony Francis Neoh
+Yes
+Cao Liqun
+Yes
+Feng Weidong
+94.42
+Zheng Fuqing
+23.35
+Huang Li
+No
+44.20
+11.68
+32.52
+Zhang Wenwu
+No
+53.85
+12.04
+41.81
+Wang Jingwu
+No
+Shen Bingxi
+No
+25.00
+25.00
+Qu Qiang
+No
+No
+No
+222
+1.25
+1.25
+Wu Xiangjiang
+5.00
+5.00
+117.77
+Mr. Chen has served as Chairman and Executive Director of the Bank since May 2019. He joined Bank of China in 1990.
+Mr. Chen Siqing previously worked in the Hunan Branch of Bank of China before he was dispatched to the Hong Kong
+Branch of China and South Sea Bank Ltd. as Assistant General Manager. Mr. Chen held various positions in Bank of
+China, including Assistant General Manager and Vice General Manager of the Fujian Branch, General Manager of the
+Risk Management Department of the Head Office, General Manager of the Guangdong Branch, Executive Vice President,
+President, Vice Chairman and Chairman of Bank of China. Mr. Chen served concurrently as Chairman of the Board of
+Directors of BOC Aviation Limited, Non-executive Director, Vice Chairman and Chairman of the Board of Directors of BOC
+Hong Kong (Holdings) Limited. Mr. Chen graduated from Hubei Institute of Finance and Economics, and obtained a Master's
+degree in Business Administration (MBA) from Murdoch University, Australia. He is a Certified Public Accountant and a senior
+economist.
+Shen Si
+Biographies of Directors, Supervisors and Senior Management
+Feng Weidong
+February 2015-November 2021
+1963
+Male
+Non-executive Director
+Zheng Fuqing
+August 2019-August 2022
+1967
+Male
+Non-executive Director
+Lu Yongzhen
+Non-executive Director
+President
+1966
+Male
+Vice Chairman, Executive Director,
+May 2019-May 2022
+1960
+Male
+Chairman, Executive Director
+Chen Siqing
+Liao Lin
+Tenure
+year
+Gender
+July 2020-July 2023
+Male
+1964
+January 2020-January 2023
+Fred Zuliu Hu
+December 2018-December 2021
+1943
+Male
+Independent Non-executive Director
+March 2017-June 2023
+1953
+Male
+Independent Non-executive Director
+Nout Wellink
+April 2016-June 2022
+1955
+Male
+Independent Non-executive Director
+Yang Siu Shun
+April 2015-April 2021
+1946
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+January 2020-January 2023
+1971
+Female
+Non-executive Director
+Cao Liqun
+Position
+Name
+Birth
+Basic Information on Directors, Supervisors and Senior Management
+Domestic preference share
+“工行優1"
+2,025
+Dividend
+distributed
+Dividend
+rate
+4.50%
+Dividend
+distributed
+2,025
+Dividend
+rate
+4.50%
+2,025
+4.50%
+Domestic preference share
+distributed
+rate
+Type of preference shares
+Dividend
+Dividend
+2018
+2019
+2020
+In RMB millions, except for percentages
+During the reporting period, the Bank did not distribute any dividend on offshore USD preference shares.
+The table below shows the distribution of dividends on preference shares by the Bank in latest three years:
+Dividends on the Bank's offshore EUR preference shares are paid annually in cash, and calculated based on the aggregate
+value of the offshore preference shares. Dividends on the Bank's offshore EUR preference shares are non-cumulative.
+Holders of offshore EUR preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore EUR preference share issuance proposal, the Bank distributed a dividend of EURO.04
+billion on the offshore EUR preference shares (pre-tax), aggregating to RMB314 million at the rate prevailing on the date
+the dividend was declared. In practice, the dividend was distributed in EUR. According to relevant laws, when the Bank
+distributes dividends for offshore EUR preference shares, the enterprise income tax shall be withheld by the Bank at a rate of
+10%. According to the requirements of the terms and conditions of the offshore EUR preference shares, the Bank will pay
+the relevant taxes, included in the dividends for offshore EUR preference shares.
+Dividends on the Bank's domestic preference shares "1" and "2" are paid annually in cash, and calculated
+based on the aggregate par value of the issued domestic preference shares. Dividends on the Bank's domestic preference
+shares are non-cumulative. Holders of domestic preference shares are only entitled to dividends at the prescribed dividend
+rate, but are not entitled to any distribution of residual profits of the Bank together with the holders of ordinary shares.
+According to the dividend distribution plan in the domestic preference share issuance proposal, the Bank distributed
+dividends of RMB2,025 million (pre-tax) and RMB2.94 billion (pre-tax) respectively on the domestic preference shares "I
+11" and "12".
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "I" at the meeting of its Board of Directors on 28 August 2020, permitting the Bank to
+distribute the dividends on domestic preference shares "If2" on 24 September 2020; the Bank reviewed and approved
+the Proposal on Distribution of Dividends for Offshore EUR Preference Shares and "I" at the meeting of its Board of
+Directors on 30 October 2020, permitting the Bank to distribute the dividends on domestic preference shares "I₹1″ on
+23 November 2020 and on the offshore EUR preference shares on 10 December 2020.
+108
+Dividend Distribution of Preference Shares
+4.20%
+Independent Non-executive Director
+2,940
+N/A
+Directors, Supervisors and Senior Management
+ICBC
+100
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 — Presentation of Financial Instruments promulgated
+by MOF as well as the International Financial Reporting Standard 9 - Financial Instruments and the International Accounting
+Standard 32 Financial Instruments: Presentation promulgated by International Accounting Standards Board and other
+accounting standards and the key terms of issuance of the Bank's preference shares, the issued and existing preference
+shares do not contain contractual obligations to deliver cash or other financial assets or contractual obligations to deliver
+variable equity instruments for settlement, and shall be accounted for as other equity instruments.
+―
+Accounting Policy Adopted for Preference Shares and Rationale
+During the reporting period, the Bank did not restore any voting right of preference share.
+Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+Redemption or Conversion of Preference Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+99
+Annual Report 2020
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+Note: Dividend distributed is tax included.
+2,481
+6.00%
+2,500
+6.00%
+314
+6.00%
+Offshore preference share
+“工行優2"
+N/A
+N/A
+N/A
+Chen Siqing, Chairman, Executive Director
+Male
+April 2019-April 2022
+Male
+Non-executive Director
+Mei Yingchun
+Dong Shi
+Ye Donghai
+Vice President
+June 2019-February 2020
+1962
+Male
+Executive Director, Senior Executive
+Hu Hao
+January 2020-March 2021
+1963
+1963
+Chairman of the Board of Supervisors
+Yang Guozhong
+President
+December 2016-December 2020
+1967
+Male
+Vice Chairman, Executive Director,
+Gu Shu
+Directors, Supervisors and Senior Management Leaving Office
+April 2020-
+1965
+Male
+October 2017-March 2020
+Non-executive Director
+Female
+(6) The full name of Mr. Nout Wellink is Arnout Henricus Elisabeth Maria Wellink.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period held shares or share options or
+were granted restricted shares of the Bank, and there was no change during the reporting period.
+(4) According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in the
+above table shall be the day of his/her first appointment.
+(3) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+(2) The term of Mr. Liao Lin as Executive Director of the Bank is set out in the above table. Please refer to the section headed
+"Biographies of Directors, Supervisors and Senior Management" for the starting time of his term as a Senior Management
+member of the Bank. Mr. Gu Shu served as Board Secretary, Senior Executive Vice President, President, Executive Director and
+Vice Chairman of the Bank from July 2008 to December 2020. Mr. Hu Hao served as Board Secretary, Senior Executive Vice
+President and Executive Director from December 2010 to February 2020.
+Notes: (1) Please refer to the section headed "Appointment and Removal".
+Directors, Supervisors and Senior Management
+101
+Annual Report 2020
+September 2015-September 2020
+1960
+Male
+Employee Supervisor
+Hui Ping
+March 2017–March 2020
+1954
+Female
+Independent Non-executive Director
+Sheila Colleen Bair
+August 2017-February 2020
+1965
+Male
+Non-executive Director
+August 2017-February 2021
+1971
+Male
+Chief Business Officer
+Song Jianhua
+April 2020-
+June 2016-June 2022
+1952
+Male
+External Supervisor
+Shen Bingxi
+December 2015-December 2021
+September 2020-September 2023
+1966
+Male
+External Supervisor
+Qu Qiang
+1962
+Male
+Employee Supervisor
+Wu Xiangjiang
+June 2016-June 2022
+1964
+Male
+Employee Supervisor
+Huang Li
+June 2016-June 2022
+1962
+Male
+Shareholder Supervisor
+Zhang Wei
+Wang Jingwu
+1963
+Senior Executive Vice President
+1966
+1964
+Female
+Chief Business Officer
+Xiong Yan
+July 2016-
+1963
+Male
+Board Secretary
+Guan Xueqing
+April 2020-
+1962
+Male
+Chief Business Officer
+Wang Bairong
+October 2020-
+1969
+Male
+Senior Executive Vice President
+Xu Shouben
+July 2020-
+1973
+Male
+Senior Executive Vice President
+Zhang Wenwu
+April 2020-
+Male
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+7/7
+4/4
+-
+4/4
+8/8
+6/6
+7/7
+7/8
+6/6
+11/12
+Fred Zuliu Hu
+55
+8/8
+11/12
+3/3
+Nout Wellink
+☐
+12/12
+3/3
+8/8
+-
+3/3
+78
+7/8
+10/11
+3/3
+Gu Shu
+Directors Leaving Office
+88
+7/8
+6/7
+3/3
+4/4
+7/7
+5/5
+4/4
+3/3
+4/4
+6/6
+7/7
+4/4
+3/3
+3/5
+Shen Si
+3/3
+10/10
+2/2
+Feng Weidong
+8/8
+12/12
+3/3
+Zheng Fuqing
+8/8
+Cao Liqun
+12/12
+Lu Yongzhen
+Non-executive Directors
+5/5 - 1/11/1
+1/1
+Liao Lin
+4/8
+8/12
+3/3
+3/3
+2/2
+10/10
+6/6
+Yang Siu Shun
+|
+8/8
+12/12
+3/3
+Anthony Francis Neoh
+Independent Non-executive Directors
+4/4
+4/4
+- 4/4
+4/4
+4/4
+6/6
+6/6
+4/4
+7/7
+6/6
+6/6
+6/6
+11/12
+7/8
+4/4
+Hu Hao
+Committee Member
+Committee Member
+Committee Member
+Lu Yongzhen
+Committee Member
+Chairman
+Committee Member
+Liao Lin
+Committee Member
+Chairman
+US Risk
+Committee
+Transactions
+Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Risk
+Management
+Committee
+Audit
+Committee
+Committee
+Committee
+Chen Siqing
+Zheng Fuqing
+Committee Member
+Committee Member
+ICBC
+118
+Chairman
+Committee Member Committee Member Committee Member
+Chairman Committee Member
+Committee Member Committee Member Committee Member
+Committee Member
+Committee Member
+Fred Zuliu Hu
+Nout Wellink
+Chairman Committee Member
+Chairman
+Chairman Committee Member Committee Member
+Committee Member Committee Member Committee Member
+Chairman Committee Member
+Committee Member
+Anthony Francis Neoh Committee Member
+Yang Siu Shun
+Shen Si
+Committee Member
+Committee Member Committee Member Committee Member
+Cao Liqun
+Committee Member
+Committee Member Committee Member Committee Member
+Feng Weidong
+Committee Member
+Directors
+Protection
+Strategy
+Related Party
+2/2
+1/1
+Corporate Governance Report
+4/4
+5/5
+8/8
+12/12
+3/3
+Mei Yingchun
+2/2
+1/1
+1/1
+3/3
+1/1
+Ye Donghai
+☐
+1/1
+2/2
+1/1
+1/1
+Chen Siging
+Sheila Colleen Bair
+4/4
+Corporate
+Social
+Responsibility
+Special Committees under the Board of Directors
+As at the disclosure date of the results, the composition of special committees of the Board of Directors of the Bank is as
+follows:
+The Board of Directors of the Bank has established eight special committees, namely, the Strategy Committee, the Corporate
+Social Responsibility and Consumer Protection Committee, the Audit Committee, the Risk Management Committee,
+the Nomination Committee, the Compensation Committee, the Related Party Transactions Control Committee and the
+US Risk Committee. Except the Strategy Committee and the Corporate Social Responsibility and Consumer Protection
+Committee, chairmen of all the other committees were assumed by Independent Non-executive Directors. More than half
+of the members of the Audit Committee, the Nomination Committee, the Compensation Committee and the Related Party
+Transactions Control Committee were Independent Non-executive Directors.
+Special Committees of the Board of Directors
+Corporate Governance Report
+117
+Annual Report 2020
+Appointment
+For the change of directors, please refer to the section headed "Directors, Supervisors and Senior Management
+and Removal".
+(3)
+(2) Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+"Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+Notes: (1)
+1/1
+0/1
+1/3
+1/1
+2/2
+1/1
+Executive Directors
+Dong Shi
+Committee
+Marketing
+Management
+Profitability
+Units
+Departments
+Risk
+Management
+Department
+Comprehensive
+Administration
+Departments
+Supporting
+Departments
+Directly
+Controlled
+Institutions
+Domestic
+Institutions
+Committee
+Note: The above is the corporate governance framework chart as of the end of 2020.
+Bureau
+Internal Audit
+Sub-bureau
+Overseas
+Institutions
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Responsibilities of the Shareholders' General Meeting
+As the organ of power of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders' General
+Meeting is responsible for, among others, deciding on business policies and significant investment plans of the Bank;
+examining and approving the Bank's annual financial budget, final account proposals, plans for profit distribution and
+loss make-up; electing and replacing directors, supervisors appointed from the shareholder representatives and external
+supervisors; examining and approving work report of the Board of Directors and work report of the Board of Supervisors;
+adopting resolutions on merger, division, dissolution, liquidation, change of corporate form, increase or decrease of the
+Bank's registered capital, issuance of corporate bonds or other securities and public listing, repurchase of the shares and
+issuance of preference shares; and amending the Articles of Association of the Bank.
+110
+ICBC
+Internal Audit
+Promotion
+Finance
+Inclusive
+Management
+Committee
+Risk
+Management
+Committee
+Promotion
+Promotion
+Committee
+Institutional
+Banking
+Internet Finance
+Promotion
+Committee
+Investment
+Banking
+Promotion
+Committee
+Financial
+Assets Service
+Management
+Committee
+Committee
+Financial
+Technology
+Development
+Committee
+Corporate Governance Report
+Responsibilities of the Board of Directors
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report its
+work to, the Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the
+Shareholders' General Meeting; implementing the resolutions of the Shareholders' General Meeting; deciding on the
+business plans, investment proposals and development strategies of the Bank; formulating annual financial budget and
+final accounts of the Bank; formulating plans for profit distribution and loss recovery of the Bank; formulating plans for
+the increase or decrease of the Bank's registered capital, capital replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such as risk management system and internal control system, and
+supervising the implementation of such systems; appointing or removing President and the Board Secretary, and appointing
+or removing Senior Executive Vice Presidents and other senior management members (except the Board Secretary) who
+shall be appointed or removed by the Board of Directors under relevant laws according to the nomination of the President
+and deciding on their compensation, bonus and penalty matters; deciding on or authorizing the President to decide on
+the establishment of relevant offices of the Bank; regularly evaluating and improving corporate governance of the Bank;
+managing information disclosure of the Bank; and supervising and ensuring the President and other Senior Management
+members to perform their management duties effectively.
+Responsibilities of the Board of Supervisors
+Shareholders' Rights
+Proposing the convening of an extraordinary general meeting
+An extraordinary general meeting should be convened within two (2) months from the date when shareholders holding
+more than ten percent (10%) of the voting shares of the Bank, either individually or jointly, request to convene in writing.
+Proposing shareholders shall have the right to request the Board of Directors in writing to convene an extraordinary general
+meeting. The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting
+within ten (10) days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles
+of Association of the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by
+themselves due to the failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted
+from the payment to those negligent directors.
+Annual Report 2020
+113
+Corporate Governance Report
+Submitting interim proposals for the Shareholders' General Meeting
+Shareholders who hold more than three percent (3%) of shares of the Bank, either individually or jointly, may prepare an
+interim proposal and submit it in writing to the Board of Directors ten (10) days before the Shareholders' General Meetings
+convened. The Board of Directors shall issue a supplementary notice for the Shareholders' General Meeting within two (2)
+days upon receipt of the proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Putting forward suggestions and reviewing documents
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, documents on status of share capital and minutes of Shareholders' General Meetings, etc.
+Special provisions on rights of preference shareholders
+In the following circumstances, preference shareholders of the Bank have the right to attend the Shareholders' General
+Meeting and exercise voting rights: (1) amendments to the Articles of Association which relate to preference shares; (2)
+the reduction of the registered capital of the Bank by more than 10% (either separately or in aggregate); (3) merger,
+division and dissolution or change of corporate form of the Bank; (4) issuance of preference shares; and (5) other events
+specified in the Articles of Association that will change or abrogate the rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders' General Meeting shall be given to preference shareholders in accordance
+with the notification procedures applicable to ordinary shareholders as specified in the Articles of Association.
+In the event that the Bank failed to pay the agreed dividend to preference shareholders for three years in aggregate or for
+two consecutive years, from the next day following the date of approval of the proposal not paying the agreed dividend
+for the current year by the Shareholders' General Meeting, preference shareholders shall be entitled to attend and vote
+(together with ordinary shareholders) at the Shareholders' General Meeting. For preference shares the dividend of which is
+non-cumulative, the voting rights shall be temporarily restored until the full payment of the agreed dividend for the current
+year by the Bank.
+Other rights
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis of
+the number of shares held by them; preference shareholders shall be entitled to rights to dividends in priority to payment of
+dividends to ordinary shareholders. Shareholders have other rights conferred by laws, administrative regulations, rules and
+the Articles of Association of the Bank.
+Effective Communication with Shareholders
+The Bank has strictly complied with regulatory rules and fundamental regulations of corporate governance, and has taken
+various measures such as improving information disclosure management, strengthening investor relations management and
+optimizing the operations mechanism of the Shareholders' General Meeting, with a view to safeguarding the rights of all
+shareholders, especially minority investors, and increasing communication and exchange among shareholders.
+During the reporting period, the Bank strictly complied with information disclosure regulations, continued to improve the
+group-wide information transmission mechanism, and actively fulfilled the information disclosure obligations. On the basis
+of well-performance in compulsory information disclosure, the Bank actively promoted the voluntary information disclosure,
+and continuously expanded the width and depth of information disclosure. It took the initiative in disclosing major
+concerns of domestic and overseas investors and capital markets, including the formulation of corporate strategy, business
+development plan, risk management, internationalized and integrated operation and green finance, in an effort to provide
+timely, effective and diversified information for investors and other stakeholders and proactively create good conditions for
+them to understand the Bank's strategy implementation, corporate governance as well as operation and management.
+114
+US Risk
+Committee
+During the reporting period, save as disclosed below, the Bank fully complied with the principles, code provisions and
+recommended best practices stipulated in the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules).
+With regard to the compliance with Article A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing
+Rules), Mr. Gu Shu resigned from his position as President of the Bank on 31 December 2020. The Board of Directors of
+the Bank deliberated and decided that Mr. Chen Siqing, Chairman of the Board of Directors, should perform the duties of
+acting President from the date when Mr. Gu Shu does not perform the management duties in the Bank due to job change
+to the date when the new President appointed by the Board of Directors of the Bank formally takes office. On 16 March
+2021, Mr. Liao Lin took office as President of the Bank, and since that date, Mr. Chen Siqing had ceased to serve as acting
+President.
+Asset & Liability
+Compliance with the Corporate Governance Code
+Development of Corporate Governance Regulations
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report its work to, the
+Shareholders' General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance
+and due diligence of Directors and Senior Management members; supervising the performance of duties by the Board
+of Directors and the Senior Management; conducting exit audits on Directors and Senior Management members when
+necessary; inspecting and supervising financial activities of the Bank; examining financial information such as financial report,
+business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of Directors;
+inspecting and supervising the business decision-making, risk management and internal control of the Bank and guiding
+the internal audit department of the Bank; supervising the engagement, dismissal, reengagement and audit of the external
+auditor as well as the audit work progress of the Bank; formulating the remuneration plans and performance evaluation
+measures of supervisors, conducting the performance evaluation on supervisors, and reporting to the Shareholders' General
+Meeting for approval; presenting proposals to the Shareholders' General Meeting; proposing to convene an extraordinary
+general meeting, and convening and presiding over the extraordinary general meeting in case the Board of Directors fails
+to perform its duty of convening Shareholders' General Meeting; proposing to convene an interim meeting of the Board of
+Directors.
+Responsibilities of the Senior Management
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, the operation and management of the Bank; organizing the implementation
+of operation and investment plans approved by the Board of Directors; formulating specific rules and regulations of the
+Bank; determining plans for compensation distribution and performances evaluation of persons in charge of internal
+departments and branches of the Bank (except the internal audit department); truthfully reporting to the Board of Directors
+or the Board of Supervisors on the business performance; drafting the annual financial budget plan, final account plan, profit
+distribution plan and loss make-up plan, plans for increase or reduction of the registered capital, the issuance of bonds or
+other securities and listing, and making suggestions in that respect to the Board of Directors.
+Annual Report 2020
+111
+Corporate Governance Report
+Overview of Corporate Governance
+During the reporting period, the Bank took improving corporate governance as a primary measure to enhance its core
+competitiveness, and continued to develop its modern corporate governance framework, mechanism and culture with
+reference to regulatory requirements and best practices of the industry. It continuously strengthened enterprise risk
+management, improved the Group's governance system in which all departments perform their duties respectively, have
+their responsibilities clearly defined, coordinate with one another and implement effective management and control, and
+advanced the modernization of governance system and capacity, in a bid to become the governance benchmark of global
+large financial groups. There is no material divergence between actual corporate governance of the Bank and applicable
+regulatory documents regarding corporate governance issued by CSRC.
+During the reporting period, the Bank was widely recognized by the industry for its corporate governance level, received
+the "Hong Kong Corporate Governance Excellence Awards 2020" from the Chamber of Hong Kong Listed Companies and
+the "China's Top 100 Companies Award" from the Forum of China Business Top 100, and ranked first in the "Ranking of
+China's Top 100 Listed Companies" for another year.
+Construction of the Organizational Framework of Corporate Governance
+During the reporting period, the Bank continued to improve the framework of the Board of Directors. The Bank appointed
+and re-appointed some directors and changed the members of some special committees of the Board of Directors to
+further promote the role of the special committees of the Board of Directors in supporting decision-making, actively build
+an independent and diversified Board of Directors that can make decisions scientifically with an international vision, and
+advocate the cultivation of a harmonious and inclusive governance culture. Besides, the Bank stepped up efforts in the
+Group's corporate governance, and kept refining the management and control and collaboration mechanism of the Group
+as well as the corporate governance framework, institutional system and working mechanism of its subsidiaries. The Bank
+built a comprehensive management framework for Group subsidiaries, which takes Party building and corporate governance,
+equity management, cadre management and collaborative management as the "four beams" and strategy, risk, customer,
+capital, authorization, science and technology, finance and culture as the "eight pillars".
+Construction of the Corporate Governance Mechanism
+The Bank promoted the organic integration of the Party's leadership and corporate governance. It strengthened the organic
+connection between the rules of procedure of the Party committee and the decision-making mechanism for corporate
+governance, deeply applied its institutional advantages to the construction of modern governance system, and constantly
+improved the governance efficiency and high-quality development capability.
+The Bank put into good use the key role of the Board of Directors in strategic decision-making and corporate governance.
+The Board of Directors closely followed China's 14th Five-Year Plan and supply-side structural reform to serve the new
+development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing
+each other. Centering on the objectives of driving sustainable growth in corporate value and creating value for customers
+and shareholders, the Board of Directors forged ahead as guided by the strategies, sought progress without compromising
+stability, inherited and innovated in development philosophy, strengthened the enterprise risk management and internal
+control, actively promoted the operational transformation and structural adjustment, and kept track of how the strategies,
+plans and decisions were implemented continuously, to ensure the robust operation and healthy development of the Group.
+It strengthened the construction of supporting rules and regulations for performance standards of the Board of Directors,
+continuously enhanced the all-round and personalized supporting services for performance of directors, and improved the
+mechanism for daily communication and communication prior to the meetings of the Board of Directors, to ensure the Board
+of Directors fulfill its duties in accordance with relevant laws and regulations.
+112
+ICBC
+Corporate Governance Report
+The Bank actively put the supervisory function of the Board of Supervisors into good use, continuously improved its working
+mechanism, and strengthened its supervision over performance of the Board of Directors and the Senior Management.
+The Board of Supervisors focused on the implementation of national economic and financial policies as well as regulatory
+requirements by the Board of Directors and the Senior Management and their efforts in serving China's major policies,
+responding to the COVID-19 pandemic, supporting the real economy, preventing and mitigating financial risks, and
+supervised the formulation and implementation of the Bank's development strategy. Onsite survey, offsite monitoring and
+analysis and other various methods were adopted in supervising financial activities, risk management and internal control.
+The Board of Supervisors effectively fulfilled its important role to corporate governance and promoted the legal and
+compliant operation and development of the Bank.
+The Bank strengthened enterprise risk management and capital management, and intensified internal control, audit
+and supervision. It continued to improve the enterprise risk management policies, paid equal attention to risks on and
+off the balance sheet and risks at home and abroad, constantly improve the global, comprehensive and brand-new risk
+management system involving all personnel, spanning all processes and covering all risk exposures, and deepen the risk
+management of "Three Gates" and "Seven-color Pools" based on the principle of "active prevention, smart control and
+comprehensive management", to ensure that each risk is identifiable, controllable and well managed; stepped up the
+capital management, liquidity management and interest rate management, with the capital adequacy ratio (CAR) remained
+stabilized overall; and reinforced the group-wide compliance management, kept optimizing the internal control environment,
+and continued enhancing the auditing service capacity and the related supervision and inspection standards.
+During the reporting period, the Bank formulated the Occupation Disciplines and Value Code for the Board of Directors to
+further standardize the performance of the Board of Directors and directors, promote the values of the Board of Directors,
+and advocate a sound corporate governance culture, so as to lay an institutional foundation for cultivating corporate
+governance culture of the Board of Directors.
+Retail Banking
+and Consumer
+Promotion
+ICBC
+116
+The Board of Directors highly valued the fulfillment of social responsibility and endeavored to maximize the comprehensive
+value of economy, environment and society. It reviewed and approved proposals on the Donations for Combatting
+COVID-19 in Wuhan, Hubei Province, the Application for Special Authorization Limit for Poverty Alleviation Donations, the
+Corporate Social Responsibility Report 2019, 2020 Business Plan for Inclusive Finance, and the Report on the Implementation
+of Green Finance, etc., and heard the Report on the Progress of COVID-19 Prevention and Control of the Bank and the
+Report on Consumer Protection in 2019.
+The Board of Directors attached great importance to the enterprise risk management, continuously improved risk
+management system and mechanism, and prevented the systemic risk with all strength. It revised the Rules on Enterprise Risk
+Management and the Measures for the Strategic Risk Management, reviewed and approved proposals including the 2019
+and 2020 Interim Risk Management Reports, the Liquidity Risk Management Strategy for 2020, the Management Strategy of
+Interest Rate Risk in the Banking Book for 2020, and heard reports such as Report on Technology Risk Management in 2019.
+The Board of Directors improved asset management and continued to meet the capital needs of supporting the real
+economy and the regulatory requirements on capital management. It reviewed and approved proposals on the 2021-2023
+Capital Planning, the 2019 Risk and Capital Adequacy Assessment Report, the 2019 Capital Adequacy Ratio Report, issuing
+undated additional tier 1 capital bonds, and capital increase to ICBC Investment, etc.
+The Board of Directors made scientific decisions on, and reviewed and approved such proposals as annual operation plan,
+fixed asset investment budget, and donations for pandemic containment in accordance with economic and financial policies
+and major objectives, including serving the real economy, combatting the epidemic, preventing and controlling financial risks
+and deepening financial reform.
+During the reporting period, the Board of Directors of the Bank held 12 meetings, considered 81 proposals, and heard
+35 reports.
+35 reports
+proposals
+81
+meetings
+12
+of Directors
+of the Board
+Meetings
+Heard
+Considered
+Held
+Meetings of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing Directors. With diversified backgrounds,
+the Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed professional and diversified perspectives and views, which ensured scientific decision-making of the Board
+of Directors. As at the disclosure date of the results, the Board of Directors of the Bank consisted of 11 directors, including
+two Executive Directors: Mr. Chen Siqing and Mr. Liao Lin; four Non-executive Directors: Mr. Lu Yongzhen, Mr. Zheng
+Fuqing, Mr. Feng Weidong and Ms. Cao Liqun; and five Independent Non-executive Directors: Mr. Anthony Francis Neoh,
+Mr. Yang Siu Shun, Mr. Shen Si, Mr. Nout Wellink and Mr. Fred Zuliu Hu. Mr. Chen Siqing was Chairman of the Board of
+Directors. Mr. Liao Lin was Vice Chairman of the Board of Directors. The Executive Directors have worked in the areas of
+banking and management for a long time, possesses extensive professional expertise and experience in those areas and are
+familiar with operation and management of the Bank. Non-executive Directors have worked in the fiscal, economic, financial
+and governing sectors for many years, and they have rich practical experience and relatively high level of understanding
+of policies and theories. All of the Independent Non-executive Directors are prestigious Chinese or foreign experts in their
+respective areas, e.g. economy, financial supervision, finance, audit and law, and they are familiar with Chinese and foreign
+regulatory rules and have a good knowledge of corporate governance, finance and bank management. The number of
+Independent Non-executive Directors of the Bank accounted for more than one third of the total members of the Board of
+Directors, complying with relevant regulatory requirements.
+Corporate Governance Report
+Composition of the Board of Directors
+For major proposals reviewed by the Board of Directors, please refer to the announcements of the Bank on the website of
+SSE, the "HKEXnews" website of HKEX or the website of the Bank.
+Attendances in person/Number of meetings that should be attended
+Committee
+Control
+Audit Management Nomination Compensation
+Committee Committee Committee Committee
+Committee
+Protection
+Strategy
+Committee
+of Directors
+Meeting
+Directors
+Board
+General
+Transactions
+Risk
+and Consumer
+Shareholders'
+Related Party
+Responsibility
+Social
+Corporate
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Board of Directors and Special Committees
+Special Committees of the Board of Directors:
+115
+Primary reporting line
+Secondary reporting line
+Board of
+Directors
+Corporate Social
+Responsibility and Risk Management
+Strategy
+Committee
+Consumer Protection
+Committee
+Senior
+Board of
+Supervisors
+Nomination
+Committee
+Compensation
+Committee
+Related Party
+Transactions Control
+Committee
+US Risk
+Committee
+Audit Committee
+Management
+Corporate Governance Report
+Banking
+Corporate
+Shareholders'
+General Meeting
+Corporate Governance Framework
+Committee
+109
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting during the reporting period.
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+Corporate Governance Report
+Annual Report 2020
+During the reporting period, the Bank convened the First Extraordinary General Meeting of 2020 on 8 January 2020, the
+Annual General Meeting for the Year 2019 on 12 June 2020, and the Second Extraordinary General Meeting of 2020 on
+26 November 2020. The afore-mentioned Shareholders' General Meetings were convened and held in strict compliance
+with relevant laws and regulations and the Articles of Association of the Bank. The Bank made announcements on the
+resolutions and disclosed legal opinions in a timely manner in accordance with regulatory requirements. For details of the
+above meetings, please refer to the announcements of the Bank dated 8 January 2020, 12 June 2020 and 26 November
+2020 respectively on the websites of SSE, the "HKEXnews" of HKEX and the Bank.
+Shareholders' General Meeting
+If an ordinary shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share
+certificates and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the
+Bank. For contact details, please refer to the section headed "Corporate Information".
+Contacts
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+shareholders' general meetings of the Bank strictly complied with relevant laws and regulations such as the Company Law,
+ensuring that shareholders could exercise their right of participation in the Shareholders' General Meetings smoothly.
+The Bank improved various communication channels for investors, coordinated pandemic containment and investor relation
+management, and organized a series of activities such as press conferences in relation to periodic results, reverse road
+shows, and domestic and overseas non-trading telephone road shows during the reporting period. Besides, the Bank took
+full advantage of multiple communication platforms including the investor interactive platform of SSE, investor relations
+column on the website of the Group, investor hotline and investor email of the Bank, to understand investors' needs and
+provide sufficient information feedback in a timely manner.
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the Shareholders' General Meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform of
+SSE, investor relations column on the website of the Group, investor hotline and investor email and hotline, fax and email of
+the Shareholders' General Meetings of the Bank as well. For contact details, please refer to the section headed "Corporate
+Governance Report - Investor Relations".
+Directors, Supervisors and Senior Management
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2) During the reporting period, the total remuneration amount paid to Directors, Supervisors and Senior Management members
+was RMB12,482.2 thousand. According to the requirements of relevant government authorities, the total final remuneration
+payable to the Chairman of the Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors,
+Shareholder Supervisors and other Senior Management members is still subject to final confirmation by relevant government
+authorities. Additional details of remuneration will be disclosed when they have been determined.
+(3) During the reporting period, Mr. Lu Yongzhen, Mr. Zheng Fuqing, Mr. Feng Weidong, Ms. Cao Liqun, Mr. Ye Donghai, Ms. Mei
+Yingchun and Mr. Dong Shi did not obtain remuneration from the Bank.
+(4) Fees of Mr. Huang Li, Mr. Wu Xiangjiang and Mr. Hui Ping are their allowances obtained as Employee Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+(5) As the Bank's Independent Non-executive Directors and some Non-executive Directors served as directors or senior management
+of other legal persons or organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or
+organizations became related parties of the Bank. During the reporting period, some of the above-mentioned Directors obtained
+remuneration from such related parties. Except to the extent of the afore-mentioned circumstances, none of the Bank's Directors,
+Supervisors and Senior Management was paid by the Bank's related parties during the reporting period.
+The Bank has developed comprehensive and complete information disclosure system, which specifies the scope, standard,
+division of responsibility and process of information disclosure, management of inside information and insiders, etc.
+During the reporting period, the Bank continued to strengthen the implementation of rules and regulations of information
+disclosure. It constantly consolidated the compliance awareness of the Bank's responsible party for information disclosure
+to effectively improve the initiative and effectiveness of the Group's information disclosure management, by increasing
+compliance publicity and conducting regular self-inspection. The Bank was widely praised for its constant improvement in
+information disclosure and corporate transparency, and rated as A (Excellent) for successive years in the annual information
+disclosure evaluation of listed companies on SSE.
+(6) For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+Annual Report 2020
+Securities Law
+Beijing Office of CSRC: Securities Law
+The Bank's Important Information Systems
+Compliance of Overseas Institutions
+Analysis of Important Financial Indicators
+Opinions of the State Council on Further Improving the Quality of Listed Companies
+Capital Operation
+Capital Market Reform
+SSE: Independent Directors Qualifications
+Introduction trainings for
+newly-appointed directors
+of the Bank
+Corporate Governance
+Special business trainings
+of the Bank
+Investigation and Training of Directors
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+During the reporting period, the Bank developed an overall training plan for the Board of Directors, increased training
+resources, and encouraged and actively organized the Directors to attend trainings in many ways, with the aim of assisting
+the Directors in continuing to improve their ability to perform their duties. Directors of the Bank attended relevant trainings
+according to work needs.
+Corporate Governance Report
+123
+Annual Report 2020
+During the reporting period, Directors of the Bank proactively conducted surveys on departments of the Bank, and domestic
+and overseas branches concerning such topics as large banks supporting the development of advanced manufacturing,
+commercial banks' supply chain-related financial services, fixed asset management of state-owned financial institutions,
+commercial banks' support for pandemic containment and resumption of production and work. In the form of survey reports
+and briefs, such investigations provide the Bank with development ideas and help it promote the implementation of the
+work.
+The Bank has strictly complied with the requirements of the exchanges on which the Bank is listed and the Articles of
+Association of the Bank that Directors are elected by the Shareholders' General Meeting with a term of three years, and the
+appointment shall take effect from the date of approval by CBIRC or upon completion of relevant procedures according to
+the requirements of CBIRC. Directors may be re-appointed through re-election at the Shareholders' General Meeting after
+expiry of their term.
+Term of Directors
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2019 Annual Report,
+the First Quarterly Report of 2020, the 2020 Interim Report and the Third Quarterly Report of 2020 as scheduled.
+Corporate Governance and Operation of the Board of Directors
+Responsibilities of Directors in Respect of Financial Statements
+Trainings held by the
+regulatory authorities
+Training of Board Secretary
+Shareholders'
+General
+Independence and Performance of Duties of Independent Non-executive Directors
+Performance of the US Risk Committee During the reporting period, the US Risk Committee held four
+meetings, considered and approved four proposals, and heard 12 reports. It attached importance to and
+strengthened the compliance management of overseas institutions, revised the Bank's risk appetite in the
+US, reviewed the proposals including the amendments to the Bank's risk management framework and risk
+appetite implementation in the US in 2019, and the US liquidity risk management in the first half of 2020,
+heard the reports on the Bank's risk management, implementation of liquidity risk appetite and liquidity risk
+stress testing in the US, and assisted the Board of Directors in urging the Management to well perform in
+compliance and risk prevention and control in international operation.
+3/3
+9/9
+3/3
+Board of
+Supervisors
+Meeting
+Attendances in person/Number of meetings that should be attended
+Shen Bingxi
+Qu Qiang
+Wu Xiangjiang
+Huang Li
+During the reporting period, the Board Secretary of the Bank attended the relevant specialized trainings, with the training
+hours over 15 hours, which meets relevant regulatory requirements.
+Supervisor
+Zhang Wei
+During the reporting period, the Board of Supervisors held nine meetings, reviewed 18 proposals including the Report
+on the Work of the Board of Supervisors for 2019 and the Report on Development Strategy Assessment Opinions, heard
+eight reports on the business operation, internal control and risk management, and reviewed 49 documents including the
+documents on the supervision in each quarter of 2020 and the remediation progress of issues indicated in the survey reports
+of the Board of Supervisors.
+Meetings of the Board of Supervisors
+As at the disclosure date of the results, the Board of Supervisors of the Bank consisted of five members, including one
+Shareholder Supervisor, namely Mr. Zhang Wei; two Employee Supervisors, namely Mr. Huang Li and Mr. Wu Xiangjiang;
+and two External Supervisors, namely Mr. Qu Qiang and Mr. Shen Bingxi.
+Composition of the Board of Supervisors
+Corporate Governance Report
+Board of Supervisors
+ICBC
+124
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting period,
+please refer to the Work Report of Independent Directors for 2020 issued by the Bank on 26 March 2021.
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of the
+Board of Directors and special committees of the Board of Directors.
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the Bank
+or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent Non-executive Directors and considered that they were independent.
+During the reporting period, Chairman Chen Siqing held discussions with the Bank's Independent Non-executive Directors,
+who provided suggestions with respect to the Bank's development strategies, business transformation, risk control and
+corporate governance. The Bank's Independent Non-executive Directors earnestly attended the meetings of the Board of
+Directors and special committees, and gave independent opinions during consideration of issues. They also held discussions
+with the Management to exchange opinions on the Bank's development strategy, and put forward comments and
+suggestions. The Bank paid close attention to the relevant comments and suggestions, and organized the implementation
+thereof according to the actual conditions.
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+Primary Responsibilities of the US Risk Committee In accordance with the relevant requirements
+in the Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organizations
+established by the Federal Reserve Board, the US Risk Committee supervised the implementation of the US
+business-related risk management framework and relevant policies.
+The
+Primary Responsibilities of the Related Party Transactions Control Committee The Related Party
+Transactions Control Committee is mainly responsible for developing the basic policies governing the
+management of related party transactions, identifying the Bank's related parties, approving related party
+transactions and other related matters within the authority granted by the Board, receiving related party
+transaction statistics for filing purpose, reviewing the related party transactions that are subject to the
+approval of the Board of Directors or the Shareholders' General Meeting, and reporting to the Board
+of Directors on the implementation of the related party transaction management policies as well as the
+conditions on these transactions.
+Corporate Governance Report
+ICBC
+120
+The Audit Committee periodically reviewed the financial reports of the Bank. It had reviewed and submitted
+to the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank.
+It also organized and conducted an internal control assessment of the Group for 2019 and engaged
+external auditors to audit the assessment report and procedures of the Bank in accordance with the
+relevant regulatory requirements. Additionally, it enhanced communication with external auditors, attached
+importance to the supervision of external auditors and heard several reports of external auditors concerning
+audit plan, audit results, and management proposals. The Audit Committee also concerned with the
+compliant development of overseas institutions and heard related branches' reports on internal audit work.
+During the preparation and audit of the 2020 financial statements, the Audit Committee discussed and
+agreed with the external auditors on matters such as audit schedule and progress arrangement, followed
+the status of external audit and conducted supervision over relevant work at appropriate time by means
+of hearing reports and holding informal discussions, and reviewed the unaudited and preliminarily audited
+annual financial statements respectively. The Audit Committee held a meeting on 25 March 2021, and
+considered that the 2020 financial statements truly, accurately and completely reflected the financial
+position of the Bank. The Audit Committee reviewed the summary of audit work for 2020 performed
+by KPMG Huazhen LLP and KPMG, and made an overall and objective assessment on its performance
+and quality of practice in 2020. According to relevant rules, the Audit Committee held a meeting on
+23 December 2020, approving the proposal on engaging Deloitte Touche Tohmatsu Certified Public
+Accountants LLP and Deloitte Touche Tohmatsu as the domestic auditor and international auditor of the
+Bank for 2021 respectively, and engaging Deloitte Touche Tohmatsu Certified Public Accountants LLP as
+the internal control auditor of the Bank for 2021, and presented the proposals to the Board of Directors for
+consideration.
+Reviewing periodic reports
+Performance of the Audit Committee During the reporting period, the Audit Committee held seven
+meetings, considered and approved 10 proposals, and heard 16 reports. The Audit Committee continued
+to oversee the Bank's internal control system, reviewed and approved the Bank's annual internal control
+assessment report, and heard reports on internal control audit results to improve the Group's compliant
+operation. It supervised the implementation of internal and external audits, considered and approved
+proposals on the internal audit plan and the engagement of external auditors, heard reports on the
+implementation of internal audits, the summary of external audit and performance appraisal for KPMG in
+2019 to promote the formation of an effective communication mechanism between internal and external
+audits.
+Primary Responsibilities of the Audit Committee The Audit Committee is mainly responsible for
+constantly overseeing the Bank's internal control system, and supervising, inspecting and evaluating
+financial information and internal audit of the Bank and assessing mechanisms for the Bank's staff to
+report misconducts in financial statements, internal control, etc., and assessing the mechanism for the Bank
+to conduct independent and fair investigations and take appropriate actions in relation to the reported
+matters.
+Committee
+Audit
+Corporate Governance Report
+119
+Risk
+Annual Report 2020
+9/9
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of the
+Board of Directors held eight meetings, considered and approved 18 proposals, and heard four reports.
+Focusing on the Bank's strategic planning, the Strategy Committee considered and approved proposals
+including the 2021-2023 Capital Planning, heard reports on the implementation of the No.1 Personal Bank
+Strategy, the implementation of the Preferred Bank Strategy for Domestic Foreign Exchange Business and
+the implementation of the Strategy for Sharpening Competitive Edge in Key Regions, assisted the Board
+of Directors in guiding and promoting the Bank's reform and innovation, and enhanced key business
+and regional competitiveness to provide strong guarantee for supporting the development of the real
+economy and business transformation. The Strategy Committee also paid close attention to strategic capital
+allocation, and reviewed and approved several proposals including the proposals on issuing perpetual
+capital bonds, the general mandate for shares issued by the Bank, and the 2019 capital adequacy ratio
+management report, providing a driving force for the Bank to promote sustainable development, enhance
+capital strength, and strengthen risk resistance capacity on all fronts.
+Primary Responsibilities of the Strategy Committee The Strategy Committee is mainly responsible
+for considering the Bank's strategic development plan, risk events that bear material influence on the
+overall situation, business and institutional development plan, major investment and financing plan,
+annual social responsibility report and other major matters critical to the Bank's development, making
+recommendations to the Board of Directors, and examining and assessing the soundness of the corporate
+governance framework to ensure financial reporting, risk management and internal control are compliant
+with corporate governance criteria of the Bank.
+Protection
+Committee
+and Consumer
+Responsibility
+Corporate
+Social
+Strategy
+Committee
+During the reporting period, the performance of duties by the special committees of the Board of Directors is set out below:
+Corporate Governance Report
+ICBC
+Primary Responsibilities of the Corporate Social Responsibility and Consumer Protection
+Committee The Corporate Social Responsibility and Consumer Protection Committee is mainly responsible
+for considering the Bank's fulfillment of social responsibilities with respect to environment, society,
+corporate governance, precision poverty alleviation, and corporate culture, the strategy, policy and target of
+consumer protection, green finance strategy, the development plan, basic policy, annual operating plan and
+assessment method of inclusive finance, and making recommendations to the Board of Directors.
+Performance of the Corporate Social Responsibility and Consumer Protection Committee
+Corporate Social Responsibility and Consumer Protection Committee held five meetings, and considered
+and approved six proposals during the reporting period. It attached great importance to the epidemic
+prevention and control, actively performed its social responsibilities, considered and approved the proposals
+on the special donation authorization limit for epidemic prevention and control and the application for
+special authorization limit for poverty alleviation donations, and shouldered the responsibilities of a large
+bank in supporting the epidemic prevention and control and poverty alleviation. The committee focused
+on the development of green finance and inclusive finance, considered and approved the proposals on
+the implementation of green finance and the 2020 annual business plan for inclusive finance, and actively
+practiced China's green development concept and sustainable development strategy.
+Performance of the Related Party Transactions Control Committee During the reporting period, the
+Related Party Transactions Control Committee held three meetings, considered three proposals including
+the proposal on identification of related parties of the Bank, and heard two reports including the report
+on related party transactions in 2019 and the identification of related parties of the Bank in 2019. The
+Related Party Transactions Control Committee focused on reviewing the fairness and objectivity of related
+party transactions, urged the Bank to strengthen the management of related party transactions and inside
+transactions, and assisted the Board of Directors in ensuring the Bank's related party transactions are carried
+out in compliance with laws and regulations.
+Management
+Committee
+The Audit Committee is responsible for constantly monitoring and examining the internal control system
+of the Bank, and examining the effectiveness of the system at least on an annual basis. The Audit
+Committee performed its function of examining the Bank's internal control system through reviewing the
+administrative rules and regulations and their implementation, and examined and assessed the compliance
+and effectiveness of major operating activities of the Bank.
+Committee
+US Risk
+Committee
+Related Party
+Transactions
+Control
+Corporate Governance Report
+ICBC
+122
+Performance of the Compensation Committee During the reporting period, the Compensation
+Committee held four meetings, considered and approved five proposals including the proposals on the
+payment of remuneration to Directors and Senior Management members for 2019, the Senior Management
+performance evaluation plan for 2020, the renewal of directors, supervisors and officers liability insurance
+for 2020-2021 and the Employment Plan of the Group for 2021, and heard the 2019 assessment report
+on the performance of duties of Directors by the Board of Directors. The Compensation Committee,
+in accordance with regulatory requirements, drafted the remuneration of directors, and improved the
+performance evaluation indicators and the incentive and constraint mechanism.
+Primary Responsibilities of the Compensation Committee The Compensation Committee is mainly
+responsible for formulating assessment measures on the performance of duties and compensation plans
+for Directors, organizing the assessment on the performance of duties of Directors, putting forth proposal
+on remuneration distribution for Directors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the performance and
+behaviors of Senior Management members.
+Performance of the Nomination Committee During the reporting period, the Nomination Committee
+held eight meetings, considered and approved the proposals including the proposals on the nomination of
+Mr. Liao Lin and Mr. Shen Si as candidates for Directors of the Bank, Mr. Wang Jingwu, Mr. Zhang Wenwu
+and Mr. Xu Shouben as Senior Executive Vice Presidents of the Bank, and Mr. Wang Bairong, Ms. Xiong Yan
+and Mr. Song Jianhua as Chief Business Officers, and heard the report on the framework of the Board of
+Directors in 2019. The Nomination Committee prudently assessed the organizational structure of the Bank's
+Board of Directors and its special committees, promoted the change of directors in an orderly manner and
+continuously improved and adjusted the composition of special committees of the Board of Directors. In
+order to consolidate the Bank's operation management force, the Nomination Committee reviewed and
+approved the proposal on appointing Chief Business Officers of ICBC to promote the sustainable and
+healthy business development.
+The Articles of Association of the Bank specifies methods and procedures to nominate Directors. Please refer
+to Article 118 of the Articles of Association. During the reporting period, the Bank appointed and renewed
+the appointments of Directors of the Bank in strict accordance with the Articles of Association of the Bank.
+The Nomination Committee reviews the qualifications of candidates for Directors based on whether the
+candidate complies with applicable laws, administrative rules, regulations and the Articles of Association of
+the Bank. According to the requirement on diversified composition of the Board of Directors in the Rules
+for Recommendation and Nomination of Board Candidates of the Bank, the Nomination Committee shall
+pay attention to the complementarity of the candidates in terms of expertise, professional competence
+and experience, cultural and educational background, gender, etc., to ensure the members of the Board of
+Directors are well equipped, experienced and have diversified perspectives and views. In order to implement
+the diversity policy, the Nomination Committee assesses the improvement of diversified composition of the
+Board of Directors during the course of its yearly assessment on the framework, number of Directors and
+composition of the Board of the Directors, and discusses and designs measurable goals according to actual
+conditions. As at the disclosure date of the results, there were five Independent Non-executive Directors,
+accounting for more than one third of the total members of the Board of Directors. The Bank attached
+importance to diversified sources and backgrounds of Directors and continued the efforts to enhance
+the professionalism of the Board of Directors, thus laying the foundation for the effective operation and
+scientific decision-making of the Board of the Directors.
+Examining internal control system
+Primary Responsibilities of the Nomination Committee The Nomination Committee is mainly
+responsible for making recommendations to the Board of Directors on candidates for Directors and
+Senior Management members, nominating candidates for chairmen and members of special committees
+of the Board of Directors, and formulating the standards and procedures for selection and appointment
+of Directors and Senior Management members as well as the training and development plans for Senior
+Management members and key reserved talents. The Nomination Committee is also responsible for
+assessing the structure, size and composition of the Board of Directors on a yearly basis and making
+recommendations to the Board of Directors based on the Bank's development strategy.
+Nomination
+Committee
+Corporate Governance Report
+121
+Annual Report 2020
+The Risk Management Committee is responsible for constantly monitoring and examining the risk
+management system of the Bank, and examining the effectiveness of the system at least on an annual
+basis. Under the enterprise risk management system structure of the Bank, the Risk Management
+Committee performed its function of examining the Bank's risk management system through reviewing
+and revising the risk strategy, risk management policy, risk appetite and the enterprise risk management
+structure, monitoring and evaluating the setup, mode of organization, work procedures and results of risk
+management departments, regularly assessing the risk policy, risk appetite and enterprise risk management
+status, supervising and assessing risk control activities conducted by the Senior Management members
+in terms of credit risk, market risk, operational risk, liquidity risk, compliance risk, reputational risk and
+interest rate risk in the banking book. For details of the risk management, please refer to the section headed
+"Discussion and Analysis ― Risk Management".
+Examining the risk management system
+Performance of the Risk Management Committee During the reporting period, the Risk Management
+Committee held six meetings, considered and approved 21 proposals, and heard five reports. The Risk
+Management Committee continuously supervised enterprise risk management. It considered and approved
+proposals on the 2019 and 2020 Interim Risk Management Report, the 2019 Report on Management
+of Interest Rate Risk in the Banking Book, the 2019 Report on the Risk Appetite Implementation and
+Assessment, the 2019 Compliance Risk Management Report of the Group and the 2019 Case Prevention
+Report and heard reports on technology risk management and the Group's anti-money laundering in
+2019. It has become more foresighted in preventing and controlling financial risks and enhancing the
+risk management mechanism, in a bid to assist the Board of Directors in improving its risk management,
+prevention and control capabilities.
+The Bank has established a vertical and independent internal audit management system responsible and
+reporting to the Board of Directors. The Board of Directors regularly reviews the internal audit plan and
+hears internal audit reports on internal audit activities, audit supporting measures, internal audit team
+building, etc., thus effectively performing the function of risk management. The Audit Committee examines,
+monitors and assesses the internal audit work of the Bank, supervises the internal audit rules and their
+implementation, and makes assessment of audit procedures and results of the internal audit department.
+It is also responsible for urging the Bank to ensure adequate resources for the internal audit department
+and coordinating the communication between the internal audit department and external auditors. The
+internal audit department is accountable to and reports to the Board of Directors, is guided by the Board of
+Supervisors and is under the examination, supervision and assessment of the Audit Committee. For details
+of the internal audit, please refer to the section headed "Corporate Governance Report - Internal Audit".
+Primary Responsibilities of the Risk Management Committee The Risk Management Committee
+is primarily responsible for constantly overseeing the Bank's risk management system, reviewing and
+revising the strategy, policy and procedures of risk management and internal control process of the Bank,
+and supervising and evaluating the performance of Senior Management members and risk management
+departments in respect of risk management.
+Effectiveness of the internal audit function
+•
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing
+internal control, assessing its effectiveness and truthfully disclosing internal control assessment reports
+according to the standard system for enterprise internal control. The objective of the internal control of the
+Bank is to reasonably assure the compliance of its operation and management with relevant laws, safety
+of its assets, as well as the authenticity and completeness of its financial reports and relevant information,
+in order to enhance operation efficiency and results, and to facilitate the realization of its development
+strategy. Due to inherent limitation of internal control, only reasonable assurance can be provided for the
+afore-mentioned objectives. The Board of Directors and the Audit Committee have reviewed and approved
+the 2020 Internal Control Assessment Report of the Bank. For details of the Bank's internal control, please
+refer to the section headed "Corporate Governance Report - Internal Control".
+Compensation
+Committee
+1/1
+Annual Report 2020
+3/3
+Beijing
+Office
+Board of Supervisors
+Internal Audit Bureau
+Senior Management
+Audit Committee
+Board of Directors
+Tianjin
+Office
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Corporate Governance Report
+127
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+The Board of Directors of the Bank conducted an assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines
+issued by five ministries and commissions including MOF, the Guidelines for Internal Control of Listed Companies issued
+by SSE and relevant regulatory requirements of CBIRC. No significant or material deficiencies were detected in the Bank's
+internal control system during the assessment. Risks that may arise from ordinary deficiencies are controllable and corrective
+actions have been or are being taken, which have no material impact on the fulfillment of internal control objectives of the
+Bank. The Bank had maintained effective internal control in all material aspects in accordance with the standard system for
+enterprise internal control and relevant rules.
+Internal Control Evaluation and Defects
+While disclosing the annual report, the Bank also disclosed the 2020 Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2020 (benchmark date). KPMG Huazhen (Special
+General Partnership) has audited the effectiveness of the Bank's internal control over financial reporting as at 31 December
+2020 and issued the standardized audit report on internal control. For details, please refer to the announcements published
+by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Internal Audit
+4/4
+Shanghai
+Office
+Nanjing
+Office
+128
+1 KPMG Huazhen LLP and Deloitte Touche Tohmatsu Certified Public Accountants LLP are Recognized Public Interest Equity Auditor under
+Hong Kong's Financial Reporting Council Ordinance. KPMG and Deloitte Touche Tohmatsu are Registered Public Interest Equity Auditor
+under Hong Kong's Financial Reporting Council Ordinance.
+KPMG Huazhen LLP¹ was the domestic auditors of the Bank for the financial statements audit in 2020, and KPMG' was the
+international auditors of the Bank for the financial statements audit in 2020. KPMG Huazhen LLP was also the auditors of
+internal control of the Bank in 2020.
+Engagement of Auditors
+During the reporting period, internal audit of the Bank actively adapted to the changes in the risk management conditions,
+properly responded to the COVID-19 pandemic, refined the audit management mechanism, optimized the audit mode,
+accelerated the digital transformation of internal audit, actively explored the application of smart audit, enhanced
+professional capability, intensified efforts in organizing personnel trainings, and constantly enhanced the audit service
+capacity and professionalism.
+level.
+During the reporting period, the Bank acted on the regulatory requirements on the industry, implemented risk-oriented audit
+activities and fully accomplished the annual audit plan according to the development strategies and central tasks of the
+Bank. The audit activities covered domestic and overseas key institutions of the Group, major risks, key links and economic
+responsibilities of Senior Management members. The audit activities covered such key areas as financial benefit, credit
+business, emerging business, FinTech, operation management, capital management and internal control. The audit activities
+focused on the cross-conduction between the overseas and the domestic, the macro and the micro, and the real and the
+potential hidden risks, with an emphasis on the Bank supporting the national policies, meeting regulatory requirements,
+advancing business development strategies, etc. The Bank also paid close heed to and made full use of audit findings and
+recommendations, with the aim of continuously enhancing risk management, internal control and corporate governance
+Secondary reporting line
+Primary reporting line
+Office
+Xi'an
+Kunming
+Office
+Chengdu
+Office
+Guangzhou
+Office
+Wuhan
+Office
+Internal Control Assessment Report and Internal Control Audit
+The internal supervision has been significantly enhanced. The three lines of defense for risk prevention and control worked
+together to give play to the big supervision system. The Bank optimized the internal control assessment mechanism, and
+enhanced the ability of "promoting management by assessment". It carried out review of the crackdown on market
+chaos, and strengthened internal audit supervision. The Bank promoted the remediation of problems found in internal and
+external inspections, and clarified that the Responsibility Identification Committee and the Accountability Committee should
+be responsible for investigating responsibility for various risks. The Bank consolidated the closed-loop management of
+supervision and inspection, and improved the accuracy and deterrence of accountability.
+Shenyang
+Office
+The business control measures have been intensified continuously. The Bank promoted the application of intelligent risk
+control system to realize the risk monitoring of the whole spectrum of corporate customers and the whole life cycle
+of accounts. It accelerated the establishment of a new internal accounting management system, and strengthened
+the risk control of internal accounts. The Bank optimized the system governance mechanism, and enhanced its system
+governance capability. The Bank pushed forward the implementation of Internal Control Manual by tier and line to improve
+internal control. It issued the Anti-money Laundering Rules (Version 2020) to further improve the anti-money laundering
+governance system. The Bank improved the "authenticity" review mechanism in the credit field, optimized the underlying
+asset penetration management and transaction management and control system for wealth management business, and
+established the foreign exchange business competitiveness assessment index system and foreign exchange deposit and loan
+pricing authorization mechanism. It continuously optimized the credit card anti-fraud strategy and system function, and
+constantly improved the supervision of key links in the process of and after the event.
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries to all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the afore-said codes of conduct during
+the reporting period.
+Securities Transactions of Directors and Supervisors
+- Appointment and
+-
+Note: For the change of supervisors, please refer to the section headed "Directors, Supervisors and Senior Management
+Removal".
+5/5
+8/9
+3/3
+Hui Ping
+Yang Guozhong
+Supervisor Leaving Office
+9/9
+3/3
+9/9
+The information sharing quality has been constantly improved. The Bank expanded the breadth and depth of information
+disclosure to comprehensively improve the quality of information disclosure. It advanced the construction of smart banking
+ECOS project and new-generation cloud platform to ensure the safe and stable operation of information system. The Bank
+adhered to place equal emphasis on the establishment of a long-acting mechanism of "solid foundation by risk control" and
+the strict punishment of areas with a high incidence of cases, established a grid-based intelligent management and control
+system for abnormal behavior, and strengthened the basic management of case prevention.
+Chairman and President
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be held by two persons, and the Chairman
+shall not concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+2/2
+Annual Report 2020
+Chairman Mr. Chen Siqing is the legal representative of the Bank, and is responsible for leading the Board of Directors
+in considering and formulating business development strategies, risk management, internal control and other significant
+matters of the Bank.
+ICBC
+126
+The risk governance ability has been enhanced in an all-round way. The Bank enriched enterprise risk management in
+the new era, clarified the global, comprehensive and brand-new risk management requirements involving all personnel,
+spanning all processes and covering all risk exposures and the risk governance path of "active prevention, smart control and
+comprehensive management". It built an intelligent credit risk prevention and control system by pool, region and segment,
+and improved the credit risk mitigation measures. The Bank kept a close eye on the business exposures and trading risks of
+global markets and each institution, and made overall planning for market risk management. It comprehensively optimized
+the operational risk management system, and continued to conduct governance and prevention of major operational risks.
+It paid close attention to the impact of the epidemic, external political, economic and other environmental changes, and
+kept tracking and monitoring country risk. It implemented the reporting mechanism composed of monthly report on public
+opinions, daily express and real-time reporting, and consolidated the primary responsibility for reputational risk.
+The internal control environment has been optimized continuously. The Bank continued to improve the operational
+mechanism featuring "scientific decision-making, effective supervision and stable operation", promoted the epidemic
+prevention and control and the Bank's high-quality innovative development, and pushed forward the implementation of
+major strategies such as the No.1 Personal Bank Strategy, the Preferred Bank Strategy for Domestic Foreign Exchange
+Business, and the Strategy for Sharpening Competitive Edge in Key Regions. The Bank practiced the responsibilities of a
+large bank, and continued to promote green credit, inclusive finance and targeted poverty alleviation, and provided credit
+support for epidemic prevention and control and enterprises' resumption of work and production. The Bank carried out the
+campaign of "Year of Policy Governance" to cultivate compliance culture.
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee and the Related Party Transactions Control Committee of the
+Board of Directors perform the responsibilities of internal control management and review the effectiveness of internal
+control. The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-bureau, which adopt a hierarchical
+management system and are responsible to and report to the Board of Directors. The Head Office and branches have internal
+control and compliance departments which are responsible for the organization, promotion and coordination of internal
+control.
+Internal Control
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued to
+strengthen inside information management, timely organized the completion of insider lists and regularly conducted insider
+transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be involved in dealings in
+shares of the Bank who have taken advantage of inside information during the reporting period.
+Corporate Governance Report
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Powers and Functions of the Senior Management
+Mr. Gu Shu resigned from his position as the President of the Bank on 31 December 2020. The Board of Directors of the
+Bank deliberated and decided that Mr. Chen Siqing, Chairman of the Board of Directors, should perform the duties of
+acting President from the date when Mr. Gu Shu does not perform the management duties in the Bank due to job change
+to the date when the new President appointed by the Board of Directors of the Bank formally takes office. On 16 March
+2021, Mr. Liao Lin took office as President of the Bank, and since that date, Mr. Chen Siqing had ceased to serve as acting
+President.
+The President of the Bank is responsible for the daily management of the business operations of the Bank. The President
+is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated in the Articles of
+Association of the Bank and as authorized by the Board of Directors.
+Corporate Governance Report
+125
+Inside Information Management
+Annual Report 2020
+Postal code: 100140
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Investor Enquiries
+In 2021, the Bank will further and proactively deepen the communication and exchange with investors to enhance investors'
+understanding and recognition of the Bank and continue to protect legitimate interests of the investors, and at the same
+time hope to receive more support from, and attention of the investors.
+Investor Relations
+The Bank strove to improve the quality of investor relations services and generate stable return to shareholders following the
+principle of serving investors in a comprehensive, proactive, precise, coordinated and efficient manner.
+Overview of Investor Relations Activities in 2020
+On 23 December 2020, the Board of Directors of the Bank reviewed and approved a proposal on engaging Deloitte Touche
+Tohmatsu Certified Public Accountants LLP¹ as the Bank's domestic auditor for 2021 and Deloitte Touche Tohmatsu' as the
+Bank's international auditor for 2021. This proposal still needs to be subject to the approval by the Shareholders' General
+Meeting for deliberation.
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services including
+professional services for the assets securitization and bonds issuance etc., and received RMB13 million for such professional
+non-audit services.
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for eight consecutive years (2013-2020).
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB211 million for the
+audit of financial statements (including the audit of financial statements of subsidiaries and overseas branches). Of which,
+RMB130 million (including fee for internal control audit of RMB11.00 million) was paid by the Bank.
+Corporate Governance Report
+In 2020, the Board of Directors stepped up guidance for investor relations work, and the members of the Board of Directors
+participated in investor communication activities for many times. The Bank coordinated epidemic prevention and control
+and investor relations management. The Bank made constant and extensive communication with institutional investors and
+minority investors through online and offline channels like press conferences in relation to periodic results announcements,
+reverse roadshows, domestic and overseas non-deal roadshows, investor hotline, investor relations mailbox, investor relations
+website and the online platform of sseinfo.com, which enhanced investors' confidence in economic development of China
+and the operational transformation of the Bank and helped bring the market value in line with the long-term intrinsic value
+of the Bank. The Bank improved investor relations information collection and market information feedback mechanism,
+strengthened dynamic monitoring of share price valuation, analyst reports and media and public opinions, followed and
+analyzed spotlight issues of the capital market, and effectively enhanced the quality of communication with the investors.
+The Bank actively understood and solicited the comments and suggestions of the capital market on the Bank, and assisted
+the Management in making timely reaction with the help of many operation and communication strategies, so as to
+continuously strengthen the level of corporate governance and core values of the Bank.
+129
+94,804
+Principal Business The principal business of the Bank and its subsidiaries is the provision of banking and related
+financial services. Please refer to the section headed "Discussion and Analysis" for the business review of the Bank.
+Cash dividends (pre-tax, in RMB millions)
+2.506
+2.628
+2.660
+Dividend per ten shares (pre-tax, in RMB yuan)
+2018
+2019
+2020
+Item
+The Bank had no plan for converting capital reserve to share capital in the last three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the last three years:
+For dividend-related tax and tax reduction, please refer to the announcements on dividend distribution of the Bank.
+-
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.660 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2020, totaling about RMB94,804 million. The distribution plan will be submitted for
+approval to the Annual General Meeting for the Year 2020. Once approved, the above-mentioned dividends will be paid to
+the holders of A shares and H shares whose names appeared on the share register of the Bank after the close of market on
+5 July 2021. The Bank will suspend the registration procedures of H share ownership transfer on 30 June 2021 (inclusive)
+through 5 July 2021 (inclusive). The holders of H shares of the Bank that desire to receive the proposed cash dividends
+but have not registered the ownership transfer documents are requested to hand over their ownership transfer documents
+together with the H shares to the Bank's H share registrar Computershare Hong Kong Investor Services Limited that is
+located at Room 1712-1716, 17 Floor, Hopewell Center, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30
+p.m. of 29 June 2021. Pursuant to relevant regulatory requirements and operational rules, dividends on A shares and H
+shares will be paid on 6 July 2021 and 27 July 2021, respectively.
+As approved at the Annual General Meeting for the Year 2019 held on 12 June 2020, the Bank has distributed cash
+dividends of about RMB93,664 million, or RMB2.628 per ten shares (pre-tax) for the period from 1 January 2019 to
+31 December 2019 to the ordinary shareholders whose names appeared on the share register after the close of market on
+29 June 2020.
+Profits and Dividends Distribution
+Report of the Board of Directors
+The profit and financial status of the Bank during the reporting period are presented in the Auditor's Report and Financial
+Statements of the Annual Report.
+30.9
+89,315
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies issued by CSRC and the State-owned Assets
+Supervision and Administration Commission of the State Council and relevant provisions of SSE, we, in the capacity
+of Independent Non-executive Directors of the Bank, reviewed external guarantees of the Bank on the principles of
+fairness, impartiality and objectivity, and hereby give our specific explanation and opinions as follows: upon review,
+external guarantees provided by the Bank mainly focus on issuance of letters of guarantee, which is part of the
+ordinary banking services within the business scope of the Bank as approved by relevant regulatory authorities. As at
+31 December 2020, the balance of letters of guarantee issued by the Bank totaled RMB500,821 million.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needs to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and the CBIRC.
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material sub-contract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's assets, which were subject to disclosure.
+Material Contracts and Performance of Obligations thereunder
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws and regulations of China and the relevant accounting standards.
+During the reporting period, the Bank did not enter into any material related party transactions.
+Material Related Party Transactions
+The Audit Committee has reviewed the key audit matters in the audit report and concluded that
+it is unnecessary to provide a supplementary explanation.
+Key Audit Matters
+Significant Events
+ICBC
+136
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Anthony Francis Neoh, Yang Siu Shun, Shen Si, Nout Wellink and Fred Zuliu Hu
+The extensive use of the office information system at the Bank greatly promoted the advances towards green office
+operation. Priority was given to the promotion of paperless meetings and training sessions. According to the energy
+management policy of "developing a thrift lifestyle, creating a beautiful environment, and minimizing energy consumption",
+the Bank implemented energy conservation management measures, pushed forward with energy-saving technological
+transformation, and accelerated the construction of the smart park project, with the unit energy consumption decreased
+steadily. At the same time, it continued to strengthen the scheduling and use of official vehicles, improved the efficiency of
+vehicle use, established a diversified business vehicle pattern, and guided employees to choose safe, healthy, eco-friendly
+transportation means. The Bank actively participated in voluntary tree planting activities, as a move to strengthen employees'
+awareness of environmental protection and promote the advance of ecological civilization.
+The Bank resolutely implemented the arrangements for advancing ecological civilization and responding to climate change,
+fully leveraged the important role of green finance in transitioning to the green and low-carbon production and lifestyle,
+and regarded green finance strengthening as a key strategy for long-term pursuit. With strategic guidance, policy support,
+reform & innovation, and global service comprising a four-wheel drive, it comprehensively promoted the formation of a
+green finance system, to improve economic, social, and ecological benefits simultaneously.
+Environmental Information
+Performance of the Poverty Alleviation Social Responsibility Please refer to the section headed
+"Discussion and Analysis - ICBC Is in Action to Support Poverty Alleviation" for details.
+Implementation of Share Incentive Plan and Employee Stock Ownership Plan during the
+Reporting Period During the reporting period, the Bank did not implement any share incentive plan or any employee
+stock ownership plan.
+Credit Standing During the reporting period, there had not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor had there been any outstanding debt of significant amount.
+Material Assets Acquisition, Sale and Merger During the reporting period, the Bank had no material assets
+acquisition, sale and merger.
+Material Lawsuits or Arbitration Cases During the reporting period, the Bank incurred no material lawsuits
+or arbitration cases. It was involved in several legal disputes in the ordinary course of business. Most of these cases were
+initiated by the Bank to recover non-performing loans, while some were related to disputes with clients. As of 31 December
+2020, the amount of cases pending judgements or arbitrations awards in which the Bank and/or its subsidiaries are
+defendants totaled RMB4,928 million, and the Bank does not expect any material adverse effect from the above-mentioned
+cases on the Bank's business, financial position or operating results.
+Significant Events
+135
+Annual Report 2020
+Save as disclosed above, the Board of Supervisors had no objection to any other matters during the reporting period.
+Implementation of Information Disclosure Rules During the reporting period, the Bank performed its duty
+of information disclosure in compliance with the regulatory requirements, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed was authentic,
+accurate and complete.
+Review of the Internal Control Assessment Report The Board of Supervisors reviewed the 2020 Internal Control
+Assessment Report of the Bank and had no objection to the report.
+Implementation of Resolutions Passed at the Shareholders' General Meeting During the reporting period, the Board
+of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders' General
+Meeting for consideration. The Board of Directors earnestly implemented the resolutions approved at the Shareholders'
+General Meetings.
+The Bank comprehensively used an investment and financing instrument kit with six focuses of "loan, bond, stock, agency,
+lease and consultant" to continuously increase investment and financing support for green industries. It continued to
+improve a set of green finance policies, regularly updated green finance development plans, strengthened the management
+of industry (green) credit policies, intensified special policy support for green finance, and made all-around green
+adjustments to the investment and financing structure. It improved the green finance working mechanism, and rolled out
+more supporting measures for the implementation of green finance. It reinforced the environmental (climate) and social
+risk management, brought all investment and financing activities under green, classified management, and promoted the
+environment (climate) and social risks arising from investment and financing towards systemic management and control.
+As at the end of the reporting period, the balance of green loans for green industries such as energy conservation and
+environmental protection, clean production, clean energy, ecological environment, green infrastructure upgrading, and
+green services reached RMB1,845,719 million.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any circumstance that infringed upon the interests of the Bank. The
+approval, voting, disclosure and implementation of connected transactions complied with applicable laws and regulations
+and the Articles of Association of the Bank.
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders and other related parties of the Bank occupied any fund of the Bank. The
+auditors have issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related
+Parties of Industrial and Commercial Bank of China Limited in 2020.
+137
+Percentage of cash dividends (1) (%)
+ICBC
+138
+Disciplinary Actions During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior
+Management members and controlling shareholders was subject to any investigation by competent authorities, coercive
+measures taken by judicial authorities or disciplinary inspection departments, transferred to judicial authorities or charged for
+criminal responsibility, case filing investigation or administrative penalty by CSRC, restricted access to market, identification
+as unqualified, major penalty by other administrative authorities of environmental protection, safety supervision, taxation,
+etc. or public reprimand by the stock exchanges.
+On 21 November 2018, the First Extraordinary General Meeting of 2018 reviewed and approved the Proposal on the Impact
+of Spot Return Diluted by Issuing Preference Shares and Corresponding Supplementary Measures of ICBC, and formulated
+supplementary measures for dilution of ordinary shareholders' spot return by issuing preference shares. In accordance with
+the relevant regulations of CSRC, the Directors and Senior Management members of the Bank have made a commitment
+that the measures to fill up the return can be effectively performed. For more details of the commitment, please refer to the
+announcements published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of ICBC.
+As at the end of the reporting period, the Bank has strictly implemented the return filling up measures, and there was no
+violation of the above-mentioned commitments by the Bank and its Directors and Senior Management members.
+and did not
+do anything in
+violation of the
+commitment.
+SSF strictly
+fulfilled the above
+commitment
+As at 31
+December 2020,
+As at 31
+December 2020,
+Huijin strictly
+fulfilled the above
+commitment
+and did not
+do anything in
+violation of the
+commitment.
+Fulfillment of
+commitment
+According to the Notice of the State
+Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned
+Capital to Fortify Social Security Funds
+(Guo Fa [2017] No. 49), SSF shall perform
+the obligation of more than 3-year lock-
+up period as of the date of the receipt of
+transferred shares.
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or the
+listing place of the Bank, Huijin will not
+engage in or participate in any competitive
+commercial banking business including but
+not limited to granting loans, attracting
+deposits and providing settlement, fund
+custody, bank card and money exchange
+services. However, Huijin can engage in or
+participate in some competitive businesses
+by investing in other commercial banks.
+In this regard, Huijin has committed that
+it will: (1) fairly treat the investments
+in commercial banks and will not make
+any decision or judgment that will
+have adverse impact on the Bank or be
+beneficial to other commercial banks by
+taking advantage of the status of being
+a shareholder of the Bank or information
+obtained by taking advantage of the status
+of being a shareholder of the Bank; and
+(2) perform the shareholders' rights for the
+maximum interests of the Bank.
+Commitment
+Simplified Report of
+Changes in Equity of
+National Council for
+Social Security Fund
+Annual Report 2020
+Prospectus on A
+Share Rights Issue
+of Industrial and
+Commercial Bank of
+China Limited
+Legal document
+under which the
+for A shares
+lock-up period
+Taking effect from
+December 2019/
+Above three years
+Commitment of
+performing the
+obligation of
+SSF
+November 2010/
+No specific term
+Time and term of
+commitment
+October 2006/
+No specific term
+non-competition
+Type of
+commitment
+Commitment of
+Shareholder
+Huijin
+As at 31 December 2020, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Commitments
+Significant Events
+commitment
+is made
+Prospectus of
+Industrial and
+Commercial Bank
+of China Limited
+on Initial Public
+Offering (A Share)
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+circumstance that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's
+purchase or sale of assets.
+93,664
+30.4
+Preparation of Annual Report Preparation and review procedures of the Bank's Annual Report were in compliance with
+laws, regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly, accurately
+and completely.
+Management Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Equity-linked Agreement The Bank had no equity-linked agreements required to be disclosed by the Hong Kong
+Listing Rules.
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing business growth of the Bank.
+Use of Proceeds from Fundraising Activities
+Report of the Board of Directors
+131
+Annual Report 2020
+Major Customers
+In 2020, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank for the year.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining approval
+of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public offering,
+issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods as
+allowed by applicable laws and administrative regulations or approved by relevant authorities.
+Purchase, Sale and Redemption of Shares During the reporting period, neither the Bank nor any of its
+subsidiaries purchased, sold or redeemed any listed shares of the Bank.
+As at the latest practicable date before the disclosure date of the results, the Bank has maintained the minimum public float
+of 23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the Bank.
+Changes in the share capital of the Bank for the year ended 31 December 2020 are set out in "Note 37. to the Financial
+Statements: Share Capital".
+Share Capital and Public Float
+Directors' and Supervisors' Interests in Transactions, Agreements or Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+_
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2020 are set out in the sections headed
+"Discussion and Analysis - Business Overview" and "Note 25. to the Financial Statements: Investments in Subsidiaries" in
+Donations During the reporting period, the Group made external donations of RMB358.15 million equivalent.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2020 is set
+out in the section headed "Financial Highlights" of this annual report.
+The formulation and implementation of the Bank's cash dividend policy accords with the provisions stipulated in the
+Articles of Association and the requirements provided in the resolutions of the Shareholders' General Meeting, the dividend
+distribution standards and proportion are clear and explicit, and the decision-making procedure and mechanism are
+complete. Moreover, Independent Non-executive Directors had issued their opinions for it. Minority shareholders can fully
+express their opinions and appeals, to completely safeguard their legitimate rights.
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile have regard to the long-term interest of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be substantiated and proved in detail and presented
+in a written substantiating report for Independent Non-executive Directors to issue their opinions, and then the report will be
+submitted to the Shareholders' General Meeting for approval as a special resolution.
+Formulation and Implementation of Cash Dividend Policy
+Report of the Board of Directors
+ICBC
+130
+For details on the distribution of dividends on preference shares of the Bank, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial Shareholders — Preference Shares".
+Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+Note: (1)
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+30.5
+this annual report.
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Bank.
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2020 are set out in
+"Note 39. to the Financial Statements: Reserves" of this annual report.
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and Supervisors As
+at 31 December 2020, none of the Directors or Supervisors of the Bank had any interests or short positions in the shares,
+underlying shares or debentures of the Bank or any of its associated corporations (as defined in Part XV of the Securities and
+Futures Ordinance of Hong Kong) which have to be notified to the Bank and SEHK under Divisions 7 and 8 of Part XV of the
+Securities and Futures Ordinance of Hong Kong (including interests or short positions therein that they shall be deemed to
+have pursuant to such provisions of the Securities and Futures Ordinance of Hong Kong), or any interests or short positions
+which have to be recorded in the register under Section 352 of the Securities and Futures Ordinance of Hong Kong, or
+any interests or short positions which have to be notified to the Bank and SEHK pursuant to the Model Code for Securities
+Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong Listing Rules.
+Compliant Operation During the reporting period, the Board of Directors and the Senior Management of the Bank
+continued to operate in compliance with applicable laws and regulations, and the decision-making procedures complied
+with applicable laws and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the
+Senior Management diligently and faithfully performed their duties, and the Board of Supervisors did not find any violation
+of laws and regulations, or any circumstance that contravened the interests of the Bank in their performance of duties
+during the reporting period.
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors and Supervisors to acquire benefits by means of the acquisition of shares in or
+debentures of the Bank or any other body corporate.
+Supervision on internal control. The Board of Supervisors supervised the effectiveness of the internal control system, the
+performance of internal control duties and the business compliance with laws and regulations. It paid close attention to the
+material risk events, accountability of business losses, internal control system operation, and improvement of policies and
+rules, among other aspects. It strengthened the supervision of compliance management and case prevention efforts, and
+monitored the compliance of important internal control indicators. Close attention was paid to the compliance infrastructure
+construction by overseas institutions, the operation of the Group's supervision system, and the remediation of the problems
+discovered by regulators. The Board of Supervisors resolutely safeguarded the bottom line of incurring no systemic risks,
+and ensured the sound and compliant operation across the Bank. It conducted an array of survey and research programs
+on the administration and development of asset management business amid the COVID-19, AML management by domestic
+institutions, and other topics. These programs were aimed to analyze the investment made under asset management
+business and the operation of the AML management system and mechanism by domestic institutions. Thanks to these
+efforts, the Board of Supervisors put forth suggestions to further intensify the risk management of asset management
+business and optimize the AML management system.
+Risk supervision. The Board of Supervisors supervised the effectiveness and soundness of the risk management system
+and mechanism. It paid close attention to the enterprise risk management, capital management, consolidated management,
+and compliance of major regulatory indicators. It stepped up efforts to supervise the management of risks arising from
+financial businesses that crossed different markets, industries, and sectors, with close attention paid to analyzing and
+exposing the potential major risks and hazards as early as possible. It conducted a host of survey and research programs
+on the credit risk management amid the COVID-19, the disposal of risks arising from private banking services and personal
+wealth management business, and the business development and risk management of debt-for-equity swaps carried out by
+ICBC Investment, among other topics. These programs were tasked to analyze and study the Bank's emergency response
+mechanism for credit risks, trusteeship management and disposal of existing wealth management businesses, and control
+of risks arising from debt-for-equity swap business. Thanks to them, the Board of Supervisors put forth suggestions to do
+better in credit risk emergency forewarning and disposal, improve the risk control system, and fully leverage the Group's
+advantages in overall coordination.
+Report of the Board of Supervisors
+ICBC
+Financial supervision. The Board of Supervisors supervised the Bank's financial activities as well as decisions on and
+implementation of material financial issues. It paid close attention to the major accounting issues, financial approval issues,
+and relevant accounting items of the Bank. It carefully reviewed periodic reports, final accounts and profit distribution
+plan, regularly heard reports on audit findings and business conditions, conducted spot checks on major accounting issues,
+verified the authenticity of financial information, and issued independent opinions in an objective and fair manner. It
+oversaw the independence and effectiveness of external audit work, reminded auditors of the areas of focus in audit and
+evaluated the duty performance of external auditors. It conducted a series of survey and research programs on the allocation
+and utilization of financial resources during the pandemic response, the enhanced coordination between the Group and
+integrated subsidiaries, the internal account management, and other topics. These programs were aimed to analyze the
+operation of the Head Office-branch financial resources allocation mechanism, the strategic coordination between the Group
+and domestic subsidiaries, and internal account management during the pandemic response. Thanks to these efforts, the
+Board of Supervisors put forth suggestions to further optimize the allocation of financial resources, enhance the consistency
+between integrated subsidiaries and the Group in major strategies, and set out explicit duties for internal account
+management.
+Supervision on the performance of duties. The Board of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance with the laws and regulations, the Articles of Association of the
+Bank, and the implementation of the resolutions of the Shareholders' General Meeting and the Board of Directors and the
+regulatory opinions. It paid close attention to how the Board of Directors and the Senior Management upheld the economic
+and financial policies of the state and regulatory requirements, served the implementation of major national strategies,
+responded to the COVID-19 pandemic, supported the real economy, and prevented and defused financial risks. It carried
+out duty performance assessment, talked with members of the Board of Directors and the Senior Management, and general
+managers of the related Head Office departments for comments and suggestions, and then formulated its assessment
+opinions on the duty performance of the Board of Directors, the Senior Management and their members in combination
+with their day-to-day duty performance supervision to promote the legitimate and compliant duty performance. It earnestly
+performed strategic assessment, assessed how scientific, reasonable and effective the Bank's development strategies were
+and the implementation of those strategies to strengthen strategy management.
+Performance of the Board of Supervisors. In 2020, the Board of Supervisors held nine meetings, considered 18
+proposals including proposals on the Annual Report of the Bank, quarterly reports, final accounts and profit distribution
+plan, assessment report on the performance of duties by the Board of Supervisors, and development strategy assessment
+report, heard eight special reports on the topics including the operation, external audit report, and internal control and case
+prevention management of the Bank, and reviewed 49 special reports including the reports on the implementation of the
+Bank's strategies and plans, the Group's AML work, and the annual risk management. It issued opinions in an objective
+and fair manner and appropriately exercised voting rights. The members of the Board of Supervisors diligently and faithfully
+fulfilled their duties, attended three Shareholders' General Meetings, and attended 10 meetings of the Board of Directors
+and 41 meetings of special committees as non-voting attendees. They input adequate time and effort in supervisory
+inspections, attached equal importance to theoretical learning and experience summary from practice, with an aim to further
+build up their duty performance ability. External supervisors of the Bank worked for more than 15 working days in the Bank,
+complying with the relevant requirements.
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations, regulatory requirements
+and the Articles of Association, performed supervision duties earnestly. Relying on a variety of methods such as onsite
+surveying and offsite monitoring, it carried out supervision of duty performance and due diligence, financial activities, risk
+management and internal control, etc. in a down-to-earth way. With its important role in corporate governance exploited
+adequately, it promoted the legal, compliant operation and development across the Bank.
+Work of the Board of Supervisors
+Report of the Board of Supervisors
+133
+Annual Report 2020
+134
+Industrial and Commercial Bank of China Limited
+132
+ICBC
+Board of Directors
+Report of the Board of Directors
+Connected Transactions
+In 2020, the Bank carried out standardized management of the Group's connected transactions in strict accordance with the
+regulations of CBIRC and CSRC as well as listing rules in Shanghai and Hong Kong, and had no connected transaction to be
+submitted to the Board of Directors or the Shareholders' General Meeting for review. All connected transactions occurred
+complied with the disclosure exemptions under the Listing Rules of the Shanghai Stock Exchange and the Hong Kong Listing
+Rules. The disclosure exemptions abided by the provisions of SSE for disclosure of connected transactions as well as the
+provisions of SEHK for reporting and announcement of connected transactions.
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank are not related to one another with respect to finance, business, family, or other
+material relationships which are required to be disclosed.
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved its performance assessment system and incentive restriction mechanism. From the perspectives of economic
+benefit, prevention and control of financial risks and support for the real economy and social responsibilities, the Bank
+adopted a system composed of the Bank's overall operation and management based indicators for the Management and
+duties allocation based indicators for individuals. The remuneration to the Chairman of the Board of Directors, the President,
+the Chairman of the Board of Supervisors and other executives of the Bank has followed the State's policies relating to the
+remuneration reform on executives of central enterprises, which consists of basic annual remuneration, performance-based
+remuneration and incentive income linked to term appraisal. The remuneration to other Senior Management members
+and Shareholder Supervisors consists of basic annual remuneration and performance-based remuneration, and part of
+performance-based remuneration is paid in a deferred manner. The Bank has contributed to statutory retirement programs
+organized by Chinese governmental organizations at different levels for Directors, Supervisors and Senior Management
+members concurrently as the employees of the Bank. Upon obtaining all applicable approvals, the Bank will implement
+a long-term incentive program. As at 31 December 2020, the Bank had not granted any share appreciation rights to any
+Director, Supervisor, Senior Management member, or other core business personnel designated by the Board of Directors.
+Members of the Board of Directors
+As at the disclosure date of the results, the composition of the Board of Directors of the Bank is as follows:
+Executive Directors: Mr. Chen Siqing and Mr. Liao Lin;
+Independent Non-executive Directors: Mr. Anthony Francis Neoh, Mr. Yang Siu Shun, Mr. Shen Si, Mr. Nout Wellink and
+Mr. Fred Zuliu Hu.
+Non-executive Directors: Mr. Lu Yongzhen, Mr. Zheng Fuqing, Mr. Feng Weidong and Ms. Cao Liqun;
+Liability Insurance of Directors, Supervisors and Senior Management Members Pursuant to
+the Articles of Association of the Bank, where conditions permit, the Bank may establish the professional liability insurance
+system of Directors, Supervisors and Senior Management members upon approval of the Shareholders' General Meeting.
+The Bank will use its own assets to compensate each Director, Supervisor and Senior Management member for any liability
+arising during their performance period to the maximum extent permitted by laws and administrative regulations or within
+the scope not prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior Management
+members are otherwise proved to have failed to act honestly or in good faith during their duty performance. During the
+reporting period, the Bank renewed liability insurance for Directors, Supervisors and Senior Management members.
+203
+24. Financial Investments
+281
+56. Approval of the Consolidated
+Financial Statements
+201
+23. Loans and Advances to Customers
+200
+22. Reverse Repurchase Agreements
+281
+21. Derivative Financial Instruments
+195
+281
+54. After the Reporting Period Event
+194
+280
+Financial Position
+20. Due From Banks and Other
+53. Company-Level Statement of
+55. Comparative Amounts
+Financial Institutions
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank") and
+its subsidiaries (the "Group") set out on pages 152 to 281, which comprise the consolidated statement of financial position
+as at 31 December 2020, the consolidated statement of profit or loss, the consolidated statement of profit or loss and other
+comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the
+year then ended, and a summary of significant accounting policies and other explanatory information.
+25. Investments in Subsidiaries
+194
+ICBC
+142
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+Key audit matters
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code") together with any ethical requirements that are
+relevant to our audit of the consolidated financial statements in the People's Republic of China, and we have fulfilled our
+other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis for our opinion.
+Basis for opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
+31 December 2020 and of its consolidated financial performance and its consolidated cash flows for the year then ended
+in accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+Opinion
+UNAUDITED SUPPLEMENTARY FINANCIAL
+TO THE SHAREHOLDERS OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(Incorporated in the People's Republic of China with limited liability)
+Independent Auditor's Report
+141
+Annual Report 2020
+209
+Joint Ventures
+26. Investments in Associates and
+282
+INFORMATION
+207
+KPMG
+19. Cash and Balances With Central Banks
+13. Five Highest Paid Individuals
+Fair Value of Financial Instruments
+191
+14. Impairment Losses on Assets
+46.
+191
+Independent Auditor's Report
+235
+45. Commitments and Contingent Liabilities
+187
+12. Directors' and Supervisors' Emoluments
+235
+Share Appreciation Rights Plan
+44.
+186
+11. Operating Expenses
+234
+Transferred Financial Assets
+43.
+186
+10. Other Operating Income, Net
+Designated Funds and Loans
+47. Assets Pledged as Security
+237
+237
+15. Income Tax Expense
+52.
+193
+18. Earnings Per Share
+249
+Financial Instrument Risk Management
+51.
+193
+17. Dividends
+243
+273
+Segment Information
+192
+of the Parent Company
+238
+Related Party Disclosures
+49.
+16. Profit Attributable to Equity Holders
+237
+48. Fiduciary Activities
+192
+50.
+Key audit matters (continued)
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+assessing management's judgment over
+whether the structured entity should be
+consolidated or not; and
+evaluating management's analysis of the
+structured entity, including qualitative
+analysis and the calculation of the magnitude
+and variability associated with the Group's
+economic interests in the structured entity,
+to assess management's judgment over the
+Group's ability to influence its own returns
+from the structured entity;
+inspecting the risk and reward structure of
+the structured entity, including any capital
+or return guarantee, provision of liquidity
+support, commission paid and distribution of
+the returns, to assess management's judgment
+as to the exposure, or rights, to variable
+returns from the Group's involvement in such
+an entity;
+How the matter was addressed in our audit
+We identified the recognition of interests in and
+consolidation of structured entities as a key audit matter
+because of the complex nature of certain of these
+structured entities and because of the judgment exercised
+by management in the qualitative assessment of the terms
+and the nature of each entity.
+In determining whether the Group should retain any partial
+interests in a structured entity or should consolidate a
+structured entity, management is required to consider the
+power it possesses, its exposure to variable returns, and
+its ability to use its power to affect returns. These factors
+are not purely quantitative and need to be considered
+collectively in the overall substance of the transactions.
+The key audit matter
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+Recognition of interests in and consolidation of structured entities (continued)
+assessing the reasonableness of the disclosures in the
+financial statements in relation to the recognition of
+interests in and consolidation of structured entities
+against prevailing accounting standards.
+Key audit matters (continued)
+ICBC
+146
+inspecting the related contracts, internal
+establishment documents and information
+disclosed to the investors to understand the
+purpose of the establishment of the structured
+entity and the involvement the Group has
+with the structured entity and to assess
+management's judgment over whether the
+Group has the ability to exercise power over
+the structured entity;
+selecting significant structured entities of each
+key product type and performing the following
+procedures:
+making enquiries of management and inspecting
+documents relating to the judgment process over
+whether a structured entity is consolidated or not
+to assess whether the Group has a robust process in
+this regard.
+Our audit procedures to assess the recognition of interests
+in and consolidation of structured entities included the
+following:
+How the matter was addressed in our audit
+The Group may acquire an ownership interest in, or act
+as a sponsor to, a structured entity, through initiating,
+investing or retaining shares in a wealth management
+product, an investment fund, an asset management plan,
+a trust plan, a structured lease or an asset-backed security.
+The Group may also retain partial interests in derecognised
+assets due to guarantees or securitisation structures.
+Structured entities are generally created to achieve a
+narrow and well defined objective with restrictions around
+their ongoing activities which include providing investment
+services and products to customers and managing the
+Group's assets and liabilities.
+Independent Auditor's Report
+The key audit matter
+Annual Report 2020
+Independent Auditor's Report
+ICBC
+148
+assessing the reasonableness of the disclosures in
+the consolidated financial statements in relation to
+fair value of financial instruments against prevailing
+accounting standards, including fair value hierarchy
+information and sensitivity to key inputs.
+assessing the appropriate application of fair value
+adjustment that form an integral part of fair values,
+inquiring of management about any changes in the
+fair value adjustment methodologies and assessing
+the appropriateness of the inputs applied; and
+engaging KPMG's valuation specialists to conduct
+model validation, on a sample basis, for the valuation
+of complex financial instruments.
+involving KPMG's valuation specialists to assess
+whether the valuation method selected is
+appropriate, and assist us in performing independent
+valuations, on a sample basis, of level 2 and level 3
+financial instruments and comparing our valuations
+with the Group's valuations. Our procedures
+included developing parallel models, obtaining inputs
+independently and verifying the inputs.
+assessing the level 1 fair values, on a sample basis,
+by comparing the fair values applied by the Group
+with publicly available market data.
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+valuation, independent price verification, front office
+and back office reconciliations and model approval
+for financial instruments.
+•
+147
+Our audit procedures to assess the fair value of financial
+instruments included the following:
+We identified assessing the fair value of financial
+instruments as a key audit matter because of the degree of
+complexity involved in valuing certain financial instruments
+and because of the degree of judgment exercised by
+management in determining the inputs used in the
+valuation models.
+Global economic uncertainty influenced movements in
+market rates including interest rates, foreign exchange
+rates and commodity prices. Increased market volatility
+resulted in greater ranges of values in management's
+assessment of the valuation of financial instruments held.
+The Group has developed its own models to value certain
+level 2 and level 3 financial instruments, which also involve
+significant management judgment.
+The valuation of the Group's financial instruments, held
+at fair value, is based on a combination of market data
+and valuation models which often require a considerable
+number of inputs. Many of these inputs are obtained
+from readily available data, in particular for level 1 and
+level 2 financial instruments in the fair value hierarchy,
+the valuation techniques for which use quoted market
+prices and observable inputs, respectively. Where one or
+more significant inputs are unobservable in the valuation
+techniques, as in the case of level 3 financial instruments,
+then estimates need to be developed which can involve
+significant management judgment.
+Financial instruments carried at fair value account for a
+significant part of the Group's assets and liabilities. The
+effect of fair value adjustments of financial instruments
+may impact either the profit or loss or other comprehensive
+income.
+The key audit matter
+Refer to the accounting policies on "Note 3. (5) to the Financial Statements: Financial Instruments", "Note 4. to the
+Financial Statements: Significant Accounting Judgments and Estimates" and "Note 52. to the Financial Statements: Fair
+Value of Financial Instruments".
+Fair value of financial instruments
+Key audit matters (continued)
+How the matter was addressed in our audit
+Expected credit loss allowance of loans and advances to customers
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+Key audit matters (continued)
+•
+How the matter was addressed in our audit
+The loss allowance for loans and advances to customers,
+other than those corporate loans and advances which are
+credit-impaired, is measured using the risk parameters
+method. The key parameters include probability of default
+(PD), loss given default (LGD) and exposure at default
+(EAD), which are derived from considerations including the
+historical overdue data, historical loss ratio, internal credit
+grading and other adjustment factors.
+The Group classifies financial instruments into three stages
+and recognises an impairment allowance based on the
+expected credit loss for the next 12 months or the entire
+lifetime of the financial asset, depending on whether credit
+risk on that financial instrument has increased significantly
+since initial recognition and whether an asset is considered
+to be credit-impaired respectively.
+The key audit matter
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Expected credit loss allowance of loans and advances to customers (continued)
+Key audit matters (continued)
+Independent Auditor's Report
+assessing key parameters involving judgments
+by seeking evidence from external sources and
+comparing it with internal records including historical
+loss experience and type of collaterals. As part
+of these procedures, we inquired management
+for the reasons of modifications of estimates and
+model parameters, considered the consistency of
+management judgments, and assessed key internal
+controls over the input of underlying data into the
+models.
+143
+involving KPMG's financial risk specialists, assessing
+the reliability of expected credit loss models and
+parameters used, including evaluating probability
+of default, loss given default, exposure at default,
+discount rate, forward-looking adjustment and
+other adjustment factors, and evaluating the
+reasonableness of key management judgments
+involved.
+assessing the information system controls,
+including general information technology
+control, completeness of key internal historical
+data, data transmission between systems,
+mapping of parameters of expected credit
+loss model, and system calculation of loss
+allowance for expected credit loss.
+assessing the key design and operational
+effectiveness of internal controls of the
+financial reporting process, including credit
+approval, recording, monitoring, re-evaluation
+of periodic credit grading, and the accrual
+of loss allowance; In particular, we assessed
+the design, implementation and operating
+effectiveness of the key internal controls over
+the classification of loans by credit quality
+across all stages;
+evaluating the effectiveness of internal control
+operations related to provision for expected credit
+losses:
+Our audit procedures to assess loss allowance for expected
+credit losses included the following:
+How the matter was addressed in our audit
+Impairment of loans and advances to customers is a
+subjective area due to the degree of judgment applied
+by management in determining impairment allowances.
+From the Group's perspective, the determination of the
+loss allowances for loans and advances to customers is
+heavily dependent on the external macro environment and
+the Group's internal credit risk management strategy, and
+the judgments in determining the loss given default or the
+assessment of recoverable cash flows relating to individual
+loans and advances to customers, where loans and
+advances to customers were unsecured or were subject to
+potential collateral shortfalls. The economic impact of the
+Covid-19 pandemic has increased the degree of estimation
+uncertainty relating to the accounting estimates.
+The Group uses an expected credit loss ("ECL") model
+to measure the loss allowance in accordance with
+International Financial Reporting Standard 9 Financial
+instruments ("IFRS 9").
+The key audit matter
+Annual Report 2020
+Recognition of interests in and consolidation of structured entities
+comparing the forward-looking economic factors
+used in the models with market information to
+assess whether they were aligned to market and
+economic development, with a particular focus on
+the economic impact of COVID-19 pandemic.
+144
+Independent Auditor's Report
+145
+Annual Report 2020
+assessing the reasonableness of the disclosures
+relating to loss allowance for expected credit losses
+against prevailing accounting standards.
+evaluating the experience,
+competence and integrity of the external appraiser
+engaged by the Group to value certain property and
+illiquid collateral, including comparing the valuations
+with externally derived data; and
+independence,
+sources.
+performing credit assessments for the selected credit
+impaired corporate loans and advances by assessing
+the forecast of recoverable cash flows through
+inquiry, applying judgment and our own research.
+We evaluated the timing and means of realisation of
+collateral and considered other sources of repayment
+asserted by management. We also evaluated the
+consistency of management's application of key
+assumptions and compared them with our own data
+selecting samples to assess the reasonableness of
+management judgments on whether the credit risk
+has increased significantly since initial recognition
+and whether credit impairment has occurred. We
+analysed the loan portfolio by industry sector to
+select samples in industries vulnerable to the current
+economic situation and regulation measures. We
+also focused on loans with perceived higher risk
+and selected samples from non-performing loans,
+overdue but performing loans and borrowers with
+negative warning signs or adverse press coverage.
+performing back-testing, and verify the results of the
+model and its changes during the period with actual
+observation data, to assess whether there is any
+indication of management bias.
+.
+We identified the loss allowance for expected credit losses
+as a key audit matter because of the inherent uncertainty
+and management judgments involved, and because the
+loss allowance is significant to the financial results and
+capital of the Group.
+Loss allowances for the credit-impaired corporate loans
+and advances are measured using the discounted cash
+flow method. Management exercises judgment in
+determining recoverable cash flow based on a range
+of factors. These factors include available remedies for
+recovery, the financial situation of the borrowers, collateral
+valuation, the seniority of the claim and the existence
+and cooperativeness of other creditors. Whilst the Group
+appoints an external appraiser for the valuation of certain
+property and other illiquid collateral, enforceability,
+timing and means of realisation also affect the ultimate
+collectability and thereby the amount of expected credit
+loss allowances at the end of the reporting period.
+The key audit matter
+234
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+Expected credit loss allowance of loans and advances to customers (continued)
+Key audit matters (continued)
+Independent Auditor's Report
+ICBC
+How the matter was addressed in our audit
+Statement
+222
+Net Gain/(Loss) on Financial Investments
+3. International Banking Department includes International Settlement
+Documentation Center.
+2. Channel Management Department includes Remote Banking Center.
+Notes: 1. Internet Finance Department includes Innovation Research & Development Center,
+User Development Center and Operation Support Center.
+Asset & Liability
+Management
+Department
+Corporate Strategy and
+Investor Relations
+Department
+Channel
+Management
+Department²
+International
+Banking
+Department³
+Legal Affairs
+Department (Consumer
+Protection Office)
+Internal Control &
+Compliance
+Department
+Risk Management
+Department
+Changchun Institute
+of Financial Managers
+Domestic Branches
+Financial Technology
+Department
+Operation
+Management
+Department
+Information
+Management
+Department
+Corporate
+Culture
+Department
+Human Resources
+Department
+Finance & Accounting
+Department
+Credit Approval
+Department
+Executive Office
+Private Banking
+Department
+Managed
+Institutions
+Directly
+Departments
+Supporting
+4. Operation Management Department includes Intensive Operation Center (Foshan)
+and Intensive Operation Center (Chengdu).
+Party-related
+Affairs
+Department
+Modern Finance
+Research Institute
+ICBC Credit Suisse
+Asset Management
+ICBC Leasing
+Overseas Subsidiaries
+and their Institutions
+(372)
+Overseas Branches
+and their Institutions
+(54)
+Grassroots Branches
+(15,541)
+Banking Departments of Tier-one
+Branches and Tier-two Branches (456)
+(including Directly Managed Branches)
+(36)
+Tier-one Branches
+Overseas Institutions
+Credit and Investment
+Management
+Department
+Domestic Institutions
+Data Center
+Software
+Development Center
+Business Research &
+Development Center
+Hangzhou Institute
+of Financial Managers
+Staff Union Working
+Committee
+Management
+Department
+Retired Staff
+Service and
+Security Department
+Inspection Office of
+the Party Committee
+Domestic Subsidiaries
+and their Branches
+Departments
+Management
+Risk
+Board of Directors'
+Office
+Board of Directors
+Strategy
+Committee
+Risk
+Management
+Committee
+Compensation
+Committee
+Audit Committee
+Internal Audit
+Sub-bureau
+Institutional Banking
+Promotion Committee
+Internal Audit Bureau
+Responsibility and Consumer
+Protection Committee
+Nomination
+Committee
+Related Party
+Transactions Control
+Committee
+US Risk Committee
+Shareholders'
+General Meeting
+Board of Supervisors
+Supervisory Board Office
+Corporate Social
+ICBC-AXA
+Investment Banking
+Promotion Committee
+Senior Management
+Pension Business
+Department
+Special Financing
+Department
+(Banking Department)
+Precious Metal
+Business Department
+Investment Banking
+Department
+ICBC Bills Discounting
+Department
+Comprehensive
+Administration
+Departments
+Head Office Departments, Profitability Units and
+Directly Managed Institutions of the Head Office
+Asset Custody
+Department
+Asset Management
+Department
+Financial Assets Service
+Management Committee
+Global Market
+Department
+Profitability
+( C ) ) ) DO D
+Organizational Chart
+Promotion Committee Development Committee Promotion Committee
+Inclusive Finance
+Financial Technology
+Internet Finance
+Risk Management
+Committee
+Asset & Liability
+Management Committee
+Units
+ICBC Investment
+ICBC Wealth Management
+Rural Banks
+5.
+223
+Other Equity Instruments
+38.
+180
+Estimates
+Share Capital
+37.
+4. Significant Accounting Judgements and
+Impact of Issued But Not Yet Effective
+222
+162
+Summary of Significant Accounting Policies
+3.
+218
+35. Debt Securities Issued
+160
+Basis of Preparation
+2.
+218
+36. Other Liabilities
+34. Due to Customers
+39.
+228
+9.
+42. Notes to the Consolidated Cash Flow
+185
+Net Trading Income
+8.
+232
+Entities
+185
+Net Fee and Commission Income
+Reserves
+7.
+41.
+184
+Net Interest Income
+6.
+231
+Components of Other Comprehensive Income
+40.
+182
+International Financial Reporting Standards
+Involvement With Unconsolidated Structured
+185
+160
+1.
+Statement of Profit or Loss
+215
+Other Assets
+29.
+213
+28. Deferred Income Tax Assets and Liabilities
+211
+27. Property and Equipment
+142
+152
+Consolidated:
+INDEPENDENT AUDITOR'S REPORT
+Pages
+Pages
+CONTENTS
+Auditor's Report and
+Financial Statements
+139
+Annual Report 2020
+Secondary reporting line
+Primary reporting line
+AUDITED FINANCIAL STATEMENTS
+Corporate Information
+30.
+Financial Liabilities Designated as at
+217
+Certificates of Deposit
+33.
+NOTES TO THE FINANCIAL STATEMENTS
+217
+Repurchase Agreements
+32.
+158
+Cash Flow Statement
+Statement of Profit or Loss and
+217
+156
+Statement of Changes in Equity
+31. Due to Banks and Other Financial
+154
+Statement of Financial Position
+216
+Fair Value through Profit or Loss
+153
+Other Comprehensive Income
+Institutions
+Corporate Banking
+Retail Banking
+Promotion Committee Promotion Committee
+Dividends ordinary shares
+Financial investments measured at fair value through
+962,078
+784,483
+Financial investments measured at fair value through
+profit or loss
+7,647,117
+8,591,139
+24
+other comprehensive income
+845,186
+16,326,552
+23
+739,288
+68,311
+134,155
+3,317,916
+1,042,368
+1,081,897
+20
+18,136,328
+1,540,988
+Financial investments measured at amortised cost
+6,265,668
+729,258
+33,345,058
+29
+TOTAL ASSETS
+Other assets
+62,536
+67,713
+28
+Deferred income tax assets
+286,561
+286,279
+27
+Property and equipment
+32,490
+41,206
+26
+Investments in associates and joint ventures
+1,476,872
+5,208,167
+3,537,795
+19
+222222
+Financial investments
+Equity holders of the parent company
+Non-controlling interests
+Total comprehensive income attributable to:
+Total comprehensive income for the year
+324,069
+301,846
+10,708
+(15,839)
+Subtotal of other comprehensive income for the year
+(329)
+1,311
+Others
+4,271
+(16,212)
+(530)
+14
+Other comprehensive income recognised under equity method
+Foreign currency translation differences
+(253)
+The notes on pages 160 to 281 form part of these financial statements.
+480,399
+300,536
+1,310
+Loans and advances to customers
+Reverse repurchase agreements
+21
+Derivative financial assets
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+31 December 2020 31 December 2019
+Notes
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Consolidated Statement of Financial Position
+153
+Annual Report 2020
+324,069
+301,846
+1,216
+322,853
+Reserve from cash flow hedging instruments
+30,109,436
+154
+37
+www
+Reserves
+Other equity instruments
+Share capital
+Equity attributable to equity holders of the parent company
+EQUITY
+356,407
+27,417,433
+TOTAL LIABILITIES
+525,125
+712,770
+36
+Other liabilities
+742,875
+798,127
+30,435,543
+356,407
+38
+225,819
+33,345,058
+2,692,003
+2,909,515
+15,817
+16,013
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+Non-controlling interests
+2,676,186
+2,893,502
+1,368,536
+1,510,558
+Retained profits
+745,111
+800,718
+39
+206,132
+35
+Debt securities issued
+1,873
+2,881
+85,180
+140,973
+21
+Derivative financial liabilities
+1,017
+102,242
+87,938
+30
+Financial liabilities designated as at fair value through profit or loss
+54,974
+Due to central banks
+LIABILITIES
+31 December 2020 31 December 2019
+Notes
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Consolidated Statement of Financial Position
+ICBC
+Due to banks and other financial institutions
+The notes on pages 160 to 281 form part of these financial statements.
+31
+2,266,573
+28
+Deferred income tax liabilities
+96,192
+89,785
+Income tax payable
+22,977,655
+25,134,726
+34
+Due to customers
+355,428
+335,676
+33
+Certificates of deposit
+263,273
+293,434
+32
+Repurchase agreements
+2,784,259
+(64)
+1,051
+other comprehensive income
+Interest expense
+Interest income
+2019
+2020
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2020
+NET INTEREST INCOME
+Consolidated Statement of Profit or Loss
+Annual Report 2020
+26 March 2021
+Central, Hong Kong
+10 Chater Road
+8th Floor, Prince's Building
+Certified Public Accountants
+KPMG
+151
+Fee and commission income
+166
+69
+Net trading income
+130,573
+131,215
+7
+NET FEE AND COMMISSION INCOME
+(15,777)
+(15,453)
+7
+Fee and commission expense
+146,350
+146,668
+632,217
+646,765
+(431,228)
+(445,756)
+1,063,445
+1,092,521
+The engagement partner on the audit resulting in this independent auditor's report is Wong Yuen Shan.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Other information
+Independent Auditor's Report
+149
+Annual Report 2020
+evaluating the design, implementation and
+operating effectiveness of the cybersecurity
+management mechanism, the operational security
+of key information infrastructure, data and client
+information management, and monitoring and
+emergency management.
+evaluating the design, implementation and operating
+effectiveness of the significant accounts-related
+IT automated controls which are relevant to the
+accuracy of system calculation, and the consistency
+of data transmission, covering business in corporate
+loans, financial asset service, interbank business,
+bills, retail business and others, as well as key
+accounting procedures; and
+assessing the design, implementation and
+operating effectiveness of key internal controls
+over the continued integrity of all major IT systems
+fundamental to dealing with the financial data,
+particularly financial reporting.
+We involved KPMG's IT specialists in our assessment of
+the IT systems and controls over financial reporting, which
+included carrying out the following audit procedures:
+How the matter was addressed in our audit
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are
+fundamentally reliant on complex IT systems and control
+processes which are driven by significant transaction
+volumes caused by the size of the customer base both in
+the corporate and the retail banking businesses in China
+and globally.
+With the continuous and rapid increase of the volume
+of on-line transactions of the Group, as well as the
+continuous development and application of new
+technologies, the Group is facing increasing challenges on
+cyber security and data protection.
+Of particular importance are system calculations and data
+logic regarding significant accounts, including interest
+calculations, as well as interfaces between business
+management systems and accounting systems.
+Automated accounting procedures and IT environment
+controls, which include IT governance, controls over
+program development and changes, access to programs
+and data and IT operations, are required to be designed
+and to operate effectively to ensure accurate financial
+reporting.
+As one of the largest banking groups in the world, the
+Group's IT systems are necessarily large and complex.
+IT systems and controls over financial reporting
+The key audit matter
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+8
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+•
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Independent Auditor's Report
+ICBC
+150
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This
+report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report.
+Auditor's responsibilities for the audit of the consolidated financial statements
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+Responsibilities of the directors for the consolidated financial statements
+2,222
+8,447
+Net gain/(loss) on financial investments
+Profit for the year
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2020
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+ICBC
+152
+The notes on pages 160 to 281 form part of these financial statements.
+Details of the dividends declared and paid or proposed are disclosed in Note 17 to the financial statements.
+0.86
+0.86
+18
+0.86
+0.86
+18
+1,137
+313,361
+1,779
+317,685
+312,224
+Other comprehensive income (after tax, net):
+315,906
+Notes
+2019
+8,026
+(3,042)
+fair value through other comprehensive income
+Credit losses of debt instruments measured at fair value through
+Items that may be reclassified subsequently to profit or loss:
+Changes in fair value of debt instruments measured at
+=
+(5)
+8
+(5)
+(38)
+1,289
+Other comprehensive income recognised under equity method
+Others
+fair value through other comprehensive income
+Changes in fair value of equity instruments designated as at
+Items that will not be reclassified to profit or loss:
+40
+313,361
+317,685
+2020
+30,109,436
+313,361
+(78,428)
+PROFIT FOR THE YEAR
+Income tax expense
+PROFIT BEFORE TAXATION
+Share of profits of associates and joint ventures
+OPERATING PROFIT
+Impairment losses on assets
+Operating expenses
+776,002
+800,075
+8,447
+8,044
+10
+OPERATING INCOME
+Other operating income, net
+(3,682)
+11,829
+9
+Attributable to:
+317,685
+Equity holders of the parent company
+Profit for the year
+(74,441)
+15
+391,789
+392,126
+2,520
+1,304
+389,269
+390,822
+(178,957)
+(202,668)
+14
+(207,776)
+(206,585)
+11
+Diluted (RMB yuan)
+Basic (RMB yuan)
+EARNINGS PER SHARE
+Non-controlling interests
+Chen Siqing
+Chairman
+Liao Lin
+Vice Chairman
+and President
+2019
+2020
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2020
+Consolidated Cash Flow Statement
+157
+CASH FLOWS FROM OPERATING ACTIVITIES
+Annual Report 2020
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB2 million and RMB1,194
+million, respectively.
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB53 million and RMB785 million,
+respectively.
+745,111 1,368,536 2,676,186 15,817 2,692,003
+(1,597)
+356,407 206,132 149,139 292,291 305,019 23,280 (18,568) (4,453)
+31 December 2019
+Balance as at
+The notes on pages 160 to 281 form part of these financial statements.
+Profit before taxation
+392,126
+391,789
+202,668
+14
+Impairment losses on assets
+(1,360)
+(1,675)
+Amortisation of financial investments
+2,315
+2,607
+11
+Amortisation
+26,229
+27,046
+Depreciation
+(2,520)
+(1,304)
+Share of profits of associates and joint ventures
+Adjustments for:
+3 3 - 3 - 3
+8
+(8)
+12
+25,955 (25,955)
+25,955
+(30,571)
+30,571
+30,571
+(3)
+subsidiaries
+Change in shareholding in
+(2,901)
+(29,886)
+instruments holders
+Capital deduction by other equity
+149,967
+instruments holders
+Capital injection by other equity
+reserve (ii)
+Appropriation to general
+149,967
+178,957
+149,967
+(32,787)
+(20)
+(20)
+------------ (338) (338)
+Others
+transferred to retained earnings
+Other comprehensive income
+shareholders
+(i)
+57 57
+Dividends to non-controlling
+shareholders
+Capital injection by non-controlling
+(11)
+(8)
+(3)
+(3)
+(32,787)
+(2,901)
+Unrealised (gain)/loss on foreign exchange
+(12,642)
+8,574
+(251,349)
+30,155
+269
+Certificates of deposit
+Repurchase agreements
+447,878
+563,361
+Due to banks and other financial institutions
+12,103
+534
+53,959
+Due to central banks
+(7,530)
+Financial liabilities designated as at fair value through profit or loss
+Net (decrease)/increase in operating liabilities:
+(1,777,326)
+(1,662,922)
+(124,746)
+(51,517)
+9,762
+Other assets
+Due to customers
+2,219,487
+ICBC
+158
+The notes on pages 160 to 281 form part of these financial statements.
+481,240
+1,557,616
+Net cash flows from operating activities
+(72,839)
+(84,552)
+554,079
+1,642,168
+Income tax paid
+Net cash flows from operating activities before tax
+1,926,103
+2,942,248
+173,533
+82,547
+1,533,642
+Other liabilities
+reserve (i)
+(1,416,849)
+Loans and advances to customers
+other assets (other than repossessed assets)
+Net gain on disposal and overage of property and equipment and
+(11,312)
+(12,797)
+Net gain on changes at fair value
+(213,281)
+(243,619)
+Interest income on financial investments
+2,344
+(9,814)
+Net (gain)/loss on financial investments
+(2,356)
+(1,710)
+Accreted interest on impaired loans
+28,116
+25,549
+Interest expense on debt securities issued
+(1,238)
+(2,079,400)
+(1,215)
+9
+(190,149)
+123,955
+Reverse repurchase agreements
+(41,058)
+284,342
+Financial assets measured at fair value through profit or loss
+(139,844)
+(16,064)
+Due from banks and other financial institutions
+135,320
+75,762
+Due from central banks
+Net decrease/(increase) in operating assets:
+405,302
+362,842
+(978)
+(2,355)
+Dividend income
+Key audit matters (continued)
+(4,525)
+(89,315)
+Dividends to other equity
+2019 final (note 17)
+Total comprehensive income
+(469) (15,839)
+(15,370)
+(15,370)
+1,327
+instruments holders (note 17)
+(272)
+(672)
+1,779 317,685
+315,906 315,906
+Subtotal profits
+745,111 1,368,536 2,676,186 15,817 2,692,003
+Total
+controlling
+Total interests equity
+Non-
+(15,753)
+(672)
+(15,753)
+(272)
+subsidiaries
+Change in shareholding in
+19,687
+instruments holders
+Capital injection by other equity
+reserve (ii)
+Appropriation to general
+reserve (i)
+Appropriation to surplus
+(8,839)
+(8,839) (8,839)
+(93,664)
+(93,664) (93,664)
+301,846
+1,310
+(15,370) 315,906 300,536
+1,327
+Retained
+(note 40)
+Other comprehensive income
+Profit for the year
+share equity Capital
+capital instruments
+Cash flow
+Investment currency
+Other
+Issued
+Foreign
+Reserves
+Attributable to equity holders of the parent company
+(i)
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2020
+Consolidated Statement of Changes in Equity
+155
+Annual Report 2020
+The notes on pages 160 to 281 form part of these financial statements.
+General Manager of Finance
+and Accounting Department
+Liu Yagan
+Surplus
+(499)
+General revaluation translation
+Other
+(1,597)
+(4,453)
+(18,568)
+23,280
+305,019
+292,291
+149,139
+206,132
+356,407
+Balance as at 1 January 2020
+reserves
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+hedging
+Dividends to non-controlling
+shareholders
+Other comprehensive income
+Total comprehensive income
+Other comprehensive income
+(note 40)
+Profit for the year
+Balance as at 1 January 2019
+Retained
+hedging Other
+General revaluation translation
+reserve reserve reserve
+reserve
+reserve
+equity Capital Surplus
+capital instruments
+share
+Non-
+Investment currency Cash flow
+Other
+Issued
+Foreign
+Reserves
+Dividends ordinary shares
+Attributable to equity holders of the parent company
+2018 final (note 17)
+(note 17)
+(89,315) (89,315)
+79 10,708
+1,216 324,069
+312,224 322,853
+10,629
+(649) (853)
+10,629
+10,629
+(853)
+(649)
+4,326
+7,805
+7,805 4,326
+14,882 2,344,883
+1,137 313,361
+Total
+controlling
+profits Total interests equity
+reserve reserves Subtotal
+279,064 15,495 (22,894) (3,804) (747) 680,877 1,206,666 2,330,001
+312,224
+312,224
+356,407 86,051 152,043 261,720
+Appropriation to surplus
+Dividends preference shares
+(4,525) (4,525)
+(In RMB millions, unless otherwise stated)
+Consolidated Statement of Changes in Equity
+(337)
+(337)
+(1,279)
+(780)
+(499)
+(499)
+19,687
+19,687
+(34,682)
+34,682
+34,682
+(31,485)
+31,485
+31,485
+Balance as at
+Others
+transferred to retained earnings
+(221)
+Year ended 31 December 2020
+(221)
+(3)
+ICBC
+156
+The notes on pages 160 to 281 form part of these financial statements.
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB11 million and RMB1,435
+million, respectively.
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB101 million and RMB935 million,
+respectively.
+(ii)
+(304) 800,718 1,510,558 2,893,502 16,013 2,909,515
+22,377 (27,882) (4,725)
+356,407 225,819 148,640 322,911 339,701
+31 December 2020
+98
+98
+5,530 (5,432)
+(34)
+(10) 6,439
+(865)
+3
+218
+Independent Auditor's Report
+(634)
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+FVOCI, or at FVTPL.
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+-
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis.
+All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets or both. The Group determines the business model for managing the financial assets according to the facts and based
+on the specific business objective for managing the financial assets determined by the Group's key management personnel.
+In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
+contractual terms of the instrument. For the purposes of this assessment, 'principal' is defined as the fair value of the
+financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk
+associated with the principal amount outstanding during a particular period of time and for other basic lending risks and
+costs, as well as a profit margin. The Group also assesses whether the financial asset contains a contractual term that could
+change the timing or amount of contractual cash flows such that it would not meet this condition.
+Subsequent measurement of financial assets
+Financial assets measured at FVTPL
+(ii) Classification and subsequent measurement of financial assets
+Classification of financial assets
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Financial assets measured at amortised cost
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, through the amortisation process or in order to recognise impairment gains or losses.
+Debt instruments measured at FVOCI
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised
+in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are
+reclassified to profit or loss.
+Equity instruments measured at FVOCI
+These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net
+gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other
+comprehensive income are reclassified to retained earnings.
+(iii) Classification and subsequent measurement of financial liabilities
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+Financial liabilities measured at FVTPL
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+164
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+(3) Associates and Joint ventures
+An associate is an entity in which the Group or Bank has significant influence.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see Note 3(21)).
+162
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(4) Foreign currency translation
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the
+Bank's operations in Chinese Mainland. Each entity in the Group determines its own functional currency and the financial
+statements of each entity are presented using that functional currency.
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. In addition to the overseas business
+operations in a hyperinflationary economy, all items within equity except for retained profits are translated at the exchange
+rates ruling at the dates of the initial transactions. Income and expenses in the statement of profit or loss are translated at
+the weighted average exchange rates for the year. The exchange differences arising on the above translation are taken to
+other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive
+income relating to that particular foreign operation is recognised in profit or loss.
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+(5) Financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(i) Initial recognition of financial instruments
+At initial recognition, financial assets are classified into three categories: financial assets measured at amortised cost,
+financial assets measured at FVOCI and financial assets measured at FVTPL.
+At initial recognition, financial liabilities are classified into two categories: financial liabilities measured at FVTPL and other
+financial liabilities.
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities measured
+at FVTPL, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial
+assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs.
+Measurement of fair value
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+Annual Report 2020
+163
+Notes to the Financial Statements
+For the financial liabilities designated as at FVTPL, the gains and losses arose are accounted for in accordance with the
+following requirements: (i) the amount of changes in the fair value of the financial liability arising from changes in the
+Group's own credit risk should be included in other comprehensive income; (ii) other changes in fair value of the financial
+liabilities are recognised in current profit or loss. If the treatment of the impact of changes in the financial liabilities' own
+credit risk will create or enlarge the accounting mismatch in profit or loss in accordance with (i), the Group shall recognise
+the entire gain or loss of the financial liabilities (including the amount of the impact of changes in its own credit risk) in profit
+and loss. When these liabilities are derecognised, the cumulative gain or loss previously recognised in other comprehensive
+income is reclassified from equity to retained earnings.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Other financial liabilities
+(6) Impairment of the financial assets
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset.
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Securitisation
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets
+are set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets
+are not derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation
+of financial assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent
+of its continuing involvement, derecognise the remaining. The carrying amount of the transferred assets is apportioned
+between the derecognised portion and the retained portion based on their respective relative fair values, and the difference
+between the carrying amount of the derecognised portion and the total consideration paid for the derecognised portion is
+recorded in profit or loss.
+Sales of assets on condition of repurchase
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+Annual Report 2020
+167
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+the Group's contractual rights to the cash flows from the financial asset expire;
+Financial liabilities
+(9) Convertible instruments
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at FVTPL. The equity component is not re-measured.
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+(10) Preference shares and perpetual bonds
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after
+considering the definition of financial assets, financial liabilities and equity instruments.
+Preference shares and perpetual bonds issued containing both equity and liability components are accounted for using the
+accounting policy for convertible instruments containing an equity component. Preference shares and perpetual bonds issued
+not containing an equity component are accounted for using the accounting policy for other convertible instruments not
+containing an equity component.
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instruments' duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redemption price is charged to equity.
+(11) Derivatives and hedge accounting
+Derivatives
+168
+ICBC
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+Financial asset is derecognised when one of the following conditions is met:
+(8) Derecognition of financial assets and liabilities
+Financial assets
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the
+terms are substantially different, the Group derecognises the original financial asset and recognises a 'new' asset under the
+revised terms. If the renegotiation or modification does not result in derecognition, but lead to changes in contractual cash
+flows, the Group assesses whether a significant increase in credit risk has occurred, based on comparing the risk of a default
+occurring under the revised terms as at the end of the reporting period with that as at the date of initial recognition under
+original terms.
+The Group recognises loss allowances for ECL on:
+Financial assets measured at amortised cost;
+Debt instruments measured at FVOCI; and
+Loan commitments and financial guarantee contracts.
+Annual Report 2020
+165
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Financial assets measured at fair value, including debt investments or equity securities measured at FVTPL, equity securities
+designated as at FVOCI and derivative financial assets, are not subject to the ECL assessment.
+Measurement of ECLs
+ECLS are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
+shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows
+that the Group expects to receive).
+The Group's method of measuring expected credit losses of financial instruments reflects the following elements: (i) unbiased
+weighted average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money;
+(iii) reasonable and evidence-based information about past events, current conditions, and future economic forecasts that
+are available at no additional cost or effort at the end of the reporting period.
+The maximum period considered when estimating ECLs is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
+12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the end
+of the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+The Group classifies financial instruments into three stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+The three risk stages are defined as follows:
+Stage 1: A financial instrument of which the credit risk has not significantly increase since initial recognition. The amount
+equal to 12-month expected credit losses is recognised as loss allowance.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount equal to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a)
+credit risk for the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount equal
+to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a) credit risk for the definition of credit-
+impaired financial assets.
+Presentation of allowance for ECL
+ECLs are remeasured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises an impairment gain or loss for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through a loss allowance account; for debt instruments that are measured at FVOCI, the loss
+allowance is recognised in other comprehensive income. The Group recognises loss allowances for loan commitments and
+financial guarantee contracts through other liabilities (allowance for impairment losses on credit commitments).
+Write-off
+The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
+prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines
+that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
+subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order
+to comply with the Group's procedures for recovery of amounts due.
+Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss
+in the period in which the recovery occurs.
+166
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(7) Modification of loan contracts
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+(2) Non-controlling interests
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial liability)
+or it is designated as such on initial recognition.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+150,000
+Repayment of debt securities
+927,759
+(25,137)
+(858,858)
+1,140,674
+(24,989)
+(1,020,942)
+Cash payment for redemption of other equity instruments
+(32,787)
+Acquisition of non-controlling interests
+(1,279)
+(11)
+Dividends paid on ordinary shares
+(93,664)
+(89,315)
+Dividends or interest paid to other equity instrument holders
+(8,839)
+(4,525)
+Dividends paid to non-controlling shareholders
+(337)
+(338)
+Cash payment for other financing activities
+(6,310)
+(4,950)
+Net cash flows from financing activities
+(46,949)
+112,874
+NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
+375,570
+(68,572)
+19,716
+Cash and cash equivalents at beginning of the year
+217,120
+(662,686)
+250,962
+Consolidated Cash Flow Statement
+Year ended 31 December 2020
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses (see
+Note 3(21)).
+(In RMB millions, unless otherwise stated)
+Notes
+2020
+2019
+CASH FLOWS FROM INVESTING ACTIVITIES
+Purchases of property and equipment and other assets
+Proceeds from disposal of property and equipment and
+other assets (other than repossessed assets)
+Purchases of financial investments
+Proceeds from sale and redemption of financial investments
+Investments in associates and joint ventures
+Proceeds from disposal of associates and joint ventures
+Investment returns received
+Net cash flows from investing activities
+CASH FLOWS FROM FINANCING ACTIVITIES
+Proceeds from issuance of other equity instruments
+Capital injection by non-controlling shareholders
+Proceeds from issuance of debt securities
+Interest paid on debt securities
+1,845,743
+(11,690)
+(38,005)
+(34,159)
+8,539
+(3,191,273)
+9,587
+(2,466,939)
+1,613,475
+(2,522)
+627
+752
+(1,135,097)
+1,450,413
+57
+Effect of exchange rate changes on cash and cash equivalents
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS")) that are
+effective in 2020 and relevant to the Group's operation.
+Amendments to IFRS 3
+Amendments to IAS 1 and IAS 8
+Amendments to IFRS 9, IAS 39, and IFRS 7,
+Amendment to IFRS 16
+Business Combinations "Clarifying what is a business"
+Definition of Material
+Interest Rate Benchmark Reform
+Leases "Covid-19-Related Rent Concessions"
+The principal effects of adopting these amended IFRSS are as follows:
+Amendments to IFRS 3, Business Combinations "Clarifying what is a business"
+The IASB has issued amendments to IFRS 3 that seek to clarify the definition of business. The amendments include an
+election to use a concentration test. If a preparer chooses not to apply the concentration test, or the test is failed, then the
+assessment focuses on the existence of a substantive process. The effect of these changes is that the new definition of a
+business is narrower, which could result in fewer business combinations being recognised. The amendments may require a
+complex assessment to decide whether a transaction is a business combination or an asset acquisition.
+The adoption does not have any material impact on financial position and financial performance of the Group.
+Amendments to IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies,
+Changes in Accounting Estimates and Errors, "Definition of Material"
+The amendments clarify the definition of material and how it should be applied by including in the definition guidance that
+until now has featured elsewhere in IFRS Standards. In addition, the explanations accompanying the definition have been
+improved and the amendments ensure that the definition of material is consistent across all IFRS Standards.
+The adoption does not have any material impact on financial position and financial performance of the Group.
+Amendments to IFRS 9, Financial Instruments, IAS 39, Financial Instruments: Recognition and
+Measurement, and IFRS 7, Financial instruments: Disclosures, "Interest Rate Benchmark Reform"
+The IASB issued the amendments to IFRS 9, IAS 39 and IFRS 7, which aims to address uncertainties related to the ongoing
+reform of interbank offered rates ("IBOR").
+The amendments provide targeted relief for financial instruments qualifying for hedge accounting in the lead up to IBOR
+reform. They are mandatory and apply to all hedging relationships directly affected by uncertainties related to IBOR reform.
+The adoption does not have any material impact on financial position and financial performance of the Group.
+Amendment to IFRS 16, Leases "Covid-19-Related Rent Concessions"
+The IASB has issued the amendment to IFRS 16, the amendment allows lessees, as a voluntary practical expedient, not
+to account for rent concessions as lease modifications if they arise as a direct consequence of COVID-19 and meet the
+qualifying criteria. The amendment is effective for annual reporting periods beginning on or after 1 June 2020 with earlier
+application permitted.
+The Group does not adopt the practical expedient of the amendment, therefore the amendment does not have any material
+impact on financial position and financial performance of the Group.
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretations and
+amendments.
+Annual Report 2020
+161
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Subsidiaries
+1,509,523
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding
+who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are
+directed by means of contractual arrangements.
+(3) Change in accounting policies
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to, variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+ICBC
+Notes to the Financial Statements
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+42
+1,791,122
+9,462
+1,450,413
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+Interest paid
+902,804
+(393,080)
+861,270
+(393,469)
+The notes on pages 160 to 281 form part of these financial statements.
+Annual Report 2020
+159
+Notes to the Financial Statements
+(34,861)
+1.
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+160
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4.
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative
+financial instruments, financial assets and financial liabilities measured at fair value through profit or loss ("FVTPL") and
+financial assets measured at fair value through other comprehensive income ("FVOCI"), as further explained in the respective
+accounting policies below.
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+(1) Statement of compliance
+(2) Basis of preparation
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Chinese mainland. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Chinese mainland.
+The Bank's stock codes of A Shares and H Shares listed on the Shanghai Stock Exchange and the Stock Exchange of Hong
+Kong Limited are 601398 and 1398, respectively. The Bank's offshore preference share is listed on the Stock Exchange of
+Hong Kong Limited and the stock code is 4604 and 4620. The Bank's domestic preference shares are listed on the Shanghai
+Stock Exchange and the stock codes are 360011 and 360036.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking and Insurance Regulatory Commission
+(the "CBIRC") of the PRC. The Bank obtained its business license with unified social credit code 91100000100003962T from
+the State Administration for Industry and Commerce of the PRC. The legal representative is Chen Siqing and the registered
+office is located at No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring. On 27 October 2006, the Bank was successfully listed on both Shanghai Stock Exchange and The Stock
+Exchange of Hong Kong Limited.
+CORPORATE INFORMATION
+2. BASIS OF PREPARATION
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organisations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+Post-employment benefits-defined contribution plans
+All eligible employees outside Chinese mainland participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+Short-term employee benefits
+Financial Statements for the year ended 31 December 2020
+(23) Employee benefits
+Cash and cash equivalents refer to short-term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+(22) Cash and cash equivalents
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+In addition, employees in Chinese mainland also participate in a defined contribution retirement benefit plan established
+by the Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the
+employees' previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred.
+The Group pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity
+Plan does not hold sufficient assets to pay all employee benefits.
+174
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+When the Group can no longer withdraw an offer of those benefits;
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+Early retirement benefits
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when they are incurred.
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(24) Fiduciary activities
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+173
+(25) Insurance contracts
+Termination benefits
+Annual Report 2020
+ICBC
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the gross carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+Insurance contracts classification
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+(17) Land use rights
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+(18) Repossessed assets
+Repossessed assets are initially recognised at fair value of assets not retained plus related costs, and are subsequently
+measured at the lower of the carrying value and net recoverable amount. If the recoverable amount is lower than the
+carrying value of the repossessed assets, the assets are written down to the recoverable amount.
+(19) Business combination and goodwill
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+172
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUS) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+(20) Provisions
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+(21) Asset impairment
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUS, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. The contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+177
+(ii)
+Dividend income
+Dividend income is recognised when the Group's right to receive payment is established.
+Net trading income
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+176
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(27) Income tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+Current tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Deferred income tax
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+(i)
+Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+(i)
+(ii)
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+Annual Report 2020
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+The Group does not provide service with an alternative use to the Group, and the Group has an enforceable
+right to payment for performance completed to date.
+The customer controls the service provided by the Group in the course of performance; or
+The customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Insurance income recognition
+Insurance premium income is recognised when:
+(i)
+The insurance contract is issued, and related insurance risk is undertaken by the Group;
+(ii)
+The related economic benefits are likely to flow to the Group;
+(iii) Related income can be reliably measured.
+Insurance contract liabilities
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+Annual Report 2020
+175
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(26) Revenue recognition
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+Interest income
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument, where appropriate, to the
+gross carrying amount of the financial asset, or the amortised cost of financial liability. The calculation takes into account all
+contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs
+that are directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit
+losses.
+Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets and is
+included in interest income, except for:
+(i)
+For purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial
+recognition, by applying the credit adjusted effective interest rate to their amortised cost; and
+(ii) Financial assets that are not purchased or originated credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets improve their qualities so that they are
+no longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after
+the application of the above-mentioned rules, then the interest income is calculated by applying the effective interest
+rate to their gross carrying amount.
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled
+in exchange for transferring promised services to customers, and income is recognised when its performance obligation in
+contracts is satisfied.
+(i)
+(ii)
+The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+(i)
+(In RMB millions, unless otherwise stated)
+170
+Notes to the Financial Statements
+(12) Trade date accounting
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(13) Presentation of financial instruments
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+According to the policy of classification of financial assets (refer to Note 3(5)), the reverse repurchase agreements held by
+the Group were divided into different classification according to the entity's business model for managing the financial
+instruments and the contractual cash flow characteristics of the assets: financial assets measured at amortised cost and
+financial assets measured at FVTPL.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+(15) Precious metals
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(16) Property and equipment
+Net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gain or
+loss on the disposal.
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+Net investment hedges
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+Notes to the Financial Statements
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+If the main contract included in the hybrid contract is an asset within the scope of a new financial instrument standard, the
+embedded derivative is no longer split from the main contract of the financial asset, but the hybrid financial instrument as
+a whole is related to the classification of the financial asset provision. If the main contract included in the hybrid contract is
+not an asset within the scope of the new financial instrument standard, when their economic characteristics and risks are not
+closely related to those of the hybrid contract, those separate instruments with the same terms as the embedded derivative
+would meet the definition of a derivative, and the hybrid instrument is not carried at FVTPL, certain derivatives embedded
+in other financial instruments should be split from the hybrid contract and treated as separate derivatives. These embedded
+derivatives are measured at fair value with the changes in fair value recognised in profit or loss.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Hedge accounting
+At the inception of a hedging relationship, the Group formally designates the hedge instruments and the hedged items,
+and documents the hedging relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash
+flows and are assessed on an ongoing basis to analyse the sources of hedge ineffectiveness which are expected to affect
+the hedging relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness
+requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains
+the same, the Group would rebalance the hedging relationship.
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+Fair value hedges
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVOCI. For fair value hedges, the carrying amount of the hedged item is
+adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the gains
+and losses from both are taken to profit or loss or other comprehensive income.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria
+after taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has
+been sold, terminated or exercised. If the hedged items are derecognised, the unamortised fair value is recorded in profit or
+loss.
+Annual Report 2020
+169
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gain or
+loss existing in other comprehensive income at that time remains in other comprehensive income until the hedged forecast
+transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
+was reported in other comprehensive income is immediately transferred to profit or loss.
+Financial Statements for the year ended 31 December 2020
+Financial Statements for the year ended 31 December 2020
+At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
+the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
+To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
+the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly specified
+in a contract and should be physically distinct, or capacity portion or other portion of an asset that is not physically
+distinct but it represents substantially all of the capacity of the asset and thereby provides the customer with the
+right to obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive
+substitution right throughout the period of use, then the asset is not identified;
+the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period
+of use;
+the lessee has the right to direct the use of the asset.
+For a contract that contains more separate lease components, the lessee and the lessor separate lease components and
+account for each lease component as a lease separately. For a contract that contains lease and non-lease components, the
+lessee and the lessor separate lease components from non-lease components. However, for the leases in which it is a lessee,
+the Group has selected not to separate lease components from non-lease components and account for the lease and non-
+lease components as a single lease component.
+(i) As a lessee
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before
+the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to
+dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the
+condition required by the terms and conditions of the lease.
+A contract is lease if the lessor conveys the right to control the use of an identified asset to lessee for a period of time in
+exchange for consideration.
+The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase
+option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying
+asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful
+life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in
+accordance with the accounting policy described in Note 3 (21).
+A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with
+a corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments
+not included in the measurement of the lease liability is charged to profit or loss or included in the cost of assets where
+appropriate as incurred.
+Under the following circumstances after the commencement date, the Group remeasures lease liabilities based on the
+present value of revised lease payments:
+there is a change in the amounts expected to be payable under a residual value guarantee;
+there is a change in future lease payments resulting from a change in an index or a rate used to determine those
+payments;
+there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option, or
+there is a change in the exercise of the extension or termination option.
+ICBC
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date. Each institution of the Group uses interest rate that a lessee would have to pay to borrow over a similar term, and with
+a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
+environment as incremental borrowing rate.
+When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset,
+or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
+(28) Leases
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+171
+Annual Report 2020
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels. The
+residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from 15 to
+25 years.
+Over the shorter of the economic useful
+lives and remaining lease terms
+14.29%-50%
+2-7 years
+1.94%-20%
+Annual
+depreciation rate
+Estimated residual
+value rate
+0%-3%
+Estimated
+useful life
+5-50 years
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+Properties and buildings
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+(In RMB millions, unless otherwise stated)
+178
+181
+IFRS 3 Amendments
+Notes to the Financial Statements
+ICBC
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+5.
+Interest Rate Benchmark Reform - Phase 2¹
+3
+Effective for annual periods beginning on or after 1 January 2022, earlier adoption is permitted.
+2
+Effective for annual periods beginning on or after 1 January 2021, earlier adoption is permitted.
+1
+Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
+Classification of Liabilities as Current or Non-current
+Insurance Contracts³
+IFRS 10 and IAS 28 Amendments
+IAS 1 Amendments
+IFRS 17 and IFRS 17 Amendments
+Annual Improvements to IFRS Standards 2018-2020²
+Property, Plant and Equipment: Proceeds before Intended Use²
+Onerous Contracts Cost of Fulfilling a Contract
+Reference to the Conceptual Framework?
+IAS 37 Amendments
+IAS 16 Amendments
+from 2021 to 2023, effective for annual periods beginning on or after 1
+IFRS 16 Amendments
+January 2023, early adoption is permitted only for entities that also apply IFRS 9.
+Effective date has been deferred by one year
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IFRS 9, IAS 39, IFRS 7, IFRS 4 and
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+Amendments to IFRS 3, Business Combinations,"Reference to the Conceptual Framework"
+The amendments update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting, and add an exception
+to the requirement for an entity to refer to the Conceptual Framework to determine what constitutes an asset or a liability.
+The exception specifies that, for liabilities and contingent liabilities that would be within the scope of IAS 37, Provisions,
+Contingent Liabilities and Contingent Assets or IFRIC 21, Levies, if they were incurred separately rather than assumed in a
+business combination, an entity applying IFRS 3 should apply the criteria in IAS 37 or IFRIC 21 respectively (instead of the
+Conceptual Framework) to determine whether a present obligation exists at the acquisition date.
+The amendments are expected to have no material impact on financial position and financial performance.
+disclosures.
+changes in the basis for determining contractual cash flows of financial assets, financial liabilities and lease liabilities;
+hedge accounting; and
+•
+The amendments in this final phase relate to:
+The IASB finalised its response to the ongoing reform of inter-bank offered rates ("IBOR") and other interest rate
+benchmarks by issuing a package of amendments to IFRS Standards. The amendments complement those issued in 2019
+and focus on the effects on financial statements when an entity replaces the old interest rate benchmark with an alternative
+benchmark rate as a result of the reform.
+Amendments to IFRS 9, Financial Instruments, IAS 39, Financial Instruments: Recognition
+and Measurement, IFRS 7, Financial Instruments: Disclosures, IFRS 4, Insurance Contracts,
+and IFRS 16, Leases, "Interest Rate Benchmark Reform - Phase 2"
+Further information about those changes that are expected to affect the Group is as follows:
+Effective for annual periods is to be determined, early adoption is permitted.
+retrospectively for annual periods beginning on or after 1 January 2023, early adoption is permitted.
+5
+from 2022 to 2023 - in response to the COVID-19 pandemic, applying
+4
+Effective date has been deferred by two years
+Salaries and bonuses
+For further disclosure in respect of unconsolidated investment funds, wealth management products, asset management
+plans, trust plans and assets-backed securities in which the Group has an interest or for which it is a sponsor, see Note 41.
+(v)
+one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(iv)
+the entity and the Group are joint ventures of the same third party;
+(iii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(ii)
+the entity and the Group are members of the same group;
+(i)
+the party is an entity where any of the following conditions applies:
+(b)
+or
+is a member of the key management personnel of the Group or of a parent of the Group;
+(iii)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+has significant influence over the Group; or
+has control or joint control over the Group;
+(i)
+the party is a person or a close member of that person's family and that person:
+(a)
+A party is considered to be related to the Group if:
+(29) Related parties
+Lease receipts from operating leases is recognised as income using the straight-line method over the lease term. The initial
+direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss over
+the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are recognised
+as income as they are earned.
+Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the
+finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease.
+The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value of
+the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the lease.
+The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return.
+The derecognition and impairment of the finance lease receivable are recognised in accordance with the accounting policy in
+Note 3(5) and 3(6). Variable lease payments not included in the measurement of net investment in the lease are recognised
+as income as they are earned.
+The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified as
+a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset irrespective
+of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance lease.
+When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset
+arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the
+Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
+(ii) As a lessor
+The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of
+12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases in
+profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+182
+(ii)
+(vi) the entity is controlled or jointly controlled by a person identified in (a);
+(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+The Group acts as manager to a number of investment funds, wealth management products, asset management plans, trust
+plans and assets-backed securities. When assessing whether controls such a structured entity, the Group would determine
+whether it exercises the decision-making rights as a principal or an agent and usually focuses on the assessment of the
+aggregate economic interests of the Group in the entity (comprising any carried interests and expected management fees)
+and the decision-making authority of the entity. The Group would also determine whether another entity with decision-
+making rights is acting as an agent for it.
+Investment funds, wealth management products, asset management plans, trust plans and
+asset-backed securities
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+Securitisation vehicles
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls securitisation vehicles, investment funds, wealth management products, asset management plans, trust plans or
+asset-backed securities.
+Determination of control over investees
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+Fair value of financial instruments
+82,416
+Income tax
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+180
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUS to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+Impairment of goodwill
+The measurement of the expected credit loss allowance for financial assets measured at amortised cost and FVOCI and with
+exposure arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex
+models and significant assumptions about future economic conditions and credit behavior (the likelihood of customers
+defaulting and the resulting losses). Refer to Note 51(a) credit risk for the explanation of the inputs, assumptions and
+estimation techniques used in measuring ECL.
+Annual Report 2020
+179
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(30) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments (refer to Note 3(6)) and the amount initially recognised less the cumulative amount of income. Any increase in
+the liability relating to a financial guarantee is taken to the statement of profit or loss.
+Annual Report 2020
+(31) Contingent liabilities
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+4.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that
+have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
+financial period are described below.
+Measurement of the expected credit loss allowance
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+Notes to the Financial Statements
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+Defined
+contribution
+plans
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+before tax
+Fees
+Total
+emoluments
+before tax
+paid
+Remuneration
+Year ended 31 December 2020
+Position
+Name
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+12. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+186
+(1)
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+(ii) The principal auditor's remuneration of RMB224 million for the year (2019: RMB222 million) is included in other
+administrative expenses.
+(2)
+(4)=(1)+(2)+(3)
+155
+At the Annual Meeting of 2019 held on 12 June 2020, Mr. Shen Si was re-elected as Independent Non-executive
+Director of the Bank, and his new term of office commences on the date when the approval from the general meeting
+of shareholders of the Bank is obtained.
+On 15 September 2020, Mr. Wu Xiangjiang was elected as the Employee Representative Supervisor of the bank at
+the special meeting of the first session of employee representative assembly of the Bank, and his term of office as the
+Employee Representative Supervisor commences on 15 September 2020.
+In December 2020, Mr. Gu Shu ceased to act as Vice Chairman of the Board of Directors, Executive Director and
+President of the Bank due to change of job assignments.
+In March 2021, Mr. Yang Guozhong ceased to act as chairman of the Board of Supervisors of the Bank due to change
+of job assignments.
+In February 2021, Ms. Mei Yingchun ceased to act as Non-executive Director due to the expiration of the term.
+In March 2020, Ms. Sheila Colleen Bair ceased to act as Independent Non-executive Director due to the expiration of
+the term.
+(viii) In September 2020, Mr. Hui Ping ceased to act as Employee Representative Supervisor of the Bank citing his age.
+188
+ICBC
+557
+Executive Director, President
+Vice Chairman of the Board of Directors,
+Liao Lin (i)
+159
+619
+Executive Director
+Chairman of the Board of Directors,
+Chen Siging
+(3)
+At the Annual Meeting of 2019 held on 12 June 2020, Mr. Liao Lin was elected as Executive Director of the Bank, and
+his qualification will take effect on the date when the approval of the CBIRC is obtained. At the Board of Directors held
+on 25 February 2021, Mr. Liao Lin was elected as Vice Chairman of the Board of Directors of the Bank and appointed
+as President of the Bank. Mr. Liao Lin will no longer concurrently serve as Chief Risk Officer of the Bank. His term of
+Vice Chairman of the Board of Directors and President of the Bank took effect from the date of review and approval by
+the CBIRC.
+(i)
+206,585
+13,290
+13,689
+property and equipment assets
+Depreciation charge for
+Property and equipment expenses:
+126,950
+126,572
+16,789
+14,241
+defined contribution plans (i)
+Post-employment benefits
+29,408
+29,915
+Staff benefits
+80,753
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Amendments to IAS 16, Property, Plant and Equipment, "Property, Plant and Equipment:
+Proceeds before Intended Use"
+The amendments prohibit an entity from deducting from the cost of property, plant and equipment amounts received from
+selling items produced while the company is preparing the asset for its intended use. Instead, an entity will recognise such
+sales proceeds and related cost in profit or loss.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+Lease expenses in respect of land and buildings
+207,776
+Repairs and maintenance charges
+8,348
+13,813
+15,236
+Others
+7,677
+8,524
+29,308
+25,686
+Taxes and surcharges
+Other administrative expenses (ii)
+2,315
+2,607
+Amortisation
+27,713
+27,960
+2,082
+Zheng Fuqing
+4,151
+4,086
+8,190
+Utility expenses
+Amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets, "Onerous
+Contracts Cost of Fulfilling a Contract"
+(vii)
+(v)
+470
+470
+410
+410
+944
+233
+1,177
+50
+13
+250
+ཞ་
+50
+13
+250
+Shen Bingxi
+External Supervisor
+Gu shu (iv)
+Former Vice Chairman of the Board of
+Directors, Executive Director, President
+470
+619
+470
+470
+Non-executive Director
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Cao Liqun
+Anthony Francis Neoh
+Yang Siu Shun
+Non-executive Director
+Independent Non-executive Director
+Shen Si (ii)
+Nout Wellink
+Fred Zuliu Hu
+Zhang Wei
+Huang Li
+Wu Xiangjiang (iii)
+Qu Qiang
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+Employee Representative Supervisor
+External Supervisor
+778
+712
+520
+520
+470
+(vi)
+159
+Former Executive Director, Vice President
+778
+115
+38
+38
+2,806
+7,089
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's 2020 financial statements. The total compensation packages will be further disclosed when
+determined by the relevant authorities.
+Fees of Mr. Huang Li, Mr. Wu Xiangjiang and Mr. Hui Ping were their allowances obtained as Employee Representative
+Supervisors of the Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+Annual Report 2020
+187
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+As at the approval date of these financial statements, changes of directors and supervisors of the Bank are as follows:
+(i)
+(ii)
+(iii)
+(iv)
+60
+Hu Hao
+778
+115
+46
+Yang Guozhong (v)
+Former Chairman of the Board of Supervisors
+619
+159
+Mei Yingchun (vi)
+Former Non-executive Director
+Ye Donghai
+Former Non-executive Director
+Dong Shi
+Former Non-executive Director
+Sheila Colleen Bair (vii)
+Hui Ping (viii)
+Former Independent Non-executive Director
+༄ཙནྲ | | |,,
+14
+Former Employee Representative Supervisor
+Total
+3,404
+879
+8 རྦ , | | ।।।
+-
+1,837
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+146,668
+146,350
+(15,453)
+(15,777)
+131,215
+130,573
+Asset custody business (i)
+Trust and agency services (i)
+Fee and commission income
+Fee and commission expense (ii)
+Net fee and commission income
+(ii)
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB16,584 million (2019: RMB14,855 million)
+with respect to trust and other fiduciary activities.
+In accordance with the requirements of the Notice on Strictly Implementing Accounting Standards for Enterprises
+and Effectively Strengthening the Work of Enterprises' 2020 Annual Reports issued by the Ministry of Finance of the
+People's Republic of China, State-owned Assets Supervision and Administration Commission of the State Council,
+the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission, the Bank
+reclassified credit card instalment fee income and related expenses from fees and commission income and related
+expenses to interest income and other operating income (net), and adjusted the comparative figures for the same
+period accordingly.
+8. NET TRADING INCOME
+Debt securities
+Equity investments
+Derivatives and others
+2020
+2019
+5,964
+4,013
+3,196
+2,614
+2,316
+3,037
+1,590
+2020
+2019
+Settlement, clearing business and cash management
+39,101
+37,321
+Personal wealth management and private banking services (i)
+29,630
+27,337
+Investment banking business
+21,460
+23,860
+Bank card business (ii)
+18,623
+21,764
+Corporate wealth management services (i)
+15,554
+14,024
+Guarantee and commitment business
+10,101
+10,836
+7,545
+7,004
+1,617
+Others
+(6,938)
+2,118
+2,222
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+10. OTHER OPERATING INCOME, NET
+2020
+2019
+Net premium income
+47,573
+53,857
+Operating cost of insurance business
+(53,366)
+(54,754)
+Net gain on disposal of property and equipment, repossessed assets and others
+1,323
+1,264
+Others
+12,514
+8,080
+8,044
+8,447
+11. OPERATING EXPENSES
+Staff costs:
+2020
+2019
+185
+Annual Report 2020
+(3,682)
+11,829
+8,447
+The above amounts mainly include gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities held for trading.
+9.
+NET GAIN/(LOSS) ON FINANCIAL INVESTMENTS
+2020
+2019
+Dividend income from equity investments designated as at FVOCI, including:
+Derecognised during the year
+133
+Held at the year end
+2,222
+978
+(i)
+Gain/(loss) on financial instruments measured at FVTPL, net
+(6,144)
+Including:
+Loss on financial instruments designated as at FVTPL
+(8,859)
+(19,538)
+Gain on disposal of financial instruments measured at FVOCI, net
+2,389
+1,408
+Others
+(317)
+76
+7,402
+The amendments specify that the "costs of fulfilling a contract" when assessing whether a contract is onerous comprise
+both the incremental costs and an allocation of other direct costs.
+Lu Yongzhen
+(445,756)
+1,063,445
+1,092,521
+46,185
+42,022
+Due from central banks
+63,385
+Interest expense on:
+40,547
+221,184
+243,545
+Financial investments
+12,209
+11,615
+Discounted bills
+Due from banks and other financial institutions
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+NET FEE AND COMMISSION INCOME
+(51,477)
+Due to banks and other financial institutions
+(63,296)
+Debt securities issued
+(30,106)
+(36,866)
+Due to customers
+(431,228)
+646,765
+632,217
+Net interest income
+The above interest income and expense are related to financial instruments which are not measured at FVTPL.
+184
+ICBC
+7.
+283,273
+318,272
+Personal loans
+437,209
+that the meaning of "settlement" is broad and includes "the transfer to the counterparty of cash, equity instruments,
+other assets or service".
+that the classification of liabilities as current or non-current is based on the rights existing at the end of the reporting
+period; and
+•
+The amendments mainly aim to clarify:
+The IASB issued narrow-scope amendments to IAS 1 to clarify how to classify debt and other liabilities as current or non-
+current.
+Amendments to IAS 1, Presentation of Financial Statements, "Classification of Liabilities as
+Current or Non-current"
+The Group is currently assessing the impact of the standard and amendments on its financial position and financial
+performance.
+ease transition by deferring the effective date of IFRS 17 to 2023 and by providing additional relief to reduce the effort
+required when applying IFRS 17 for the first time
+• make financial performance easier to explain; and
+The IASB issued the amendments to IFRS 17 in 2020, which respond to feedback from stakeholders and are designed to:
+reduce costs by simplifying some requirements in the IFRS 17;
+IFRS 17 is issued to resolve the comparison problems created by IFRS 4 by setting out a single principle-based standard for
+the recognition, measurement, presentation and disclosure of insurance contracts in the financial statements of the issuers
+of those contracts.
+IFRS 17 and Amendments to IFRS 17, "Insurance Contracts"
+The Group is currently assessing the impact of the annual improvements on its financial position and financial performance.
+The 2018-2020 cycle of annual improvements make minor amendments to IFRS 1 First-time Adoption of International
+Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the illustrative examples accompanying
+IFRS 16 Leases.
+Annual Improvements to IFRS Standards 2018-2020
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+(331,066)
+Annual Report 2020
+Notes to the Financial Statements
+436,520
+Corporate loans and advances
+732,691
+766,407
+Loans and advances to customers
+Interest income on:
+2019
+2020
+NET INTEREST INCOME
+6.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+The amendments introduce new requirements on loss of control over assets in a transaction with an associate or joint
+venture. These requirements require the full gain to be recognised when the assets transferred meet the definition of a
+"business" under IFRS 3, Business Combinations.
+Amendments to IFRS 10, Consolidated Financial Statements, and IAS 28, Investments in
+Associates and Joint Ventures, "Sale or Contribution of Assets between an Investor and its
+Associate or Joint Venture"
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+183
+(364,173)
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Discussion and Analysis
+唐井
+President: Liao Lin
+646,765
+(%)
+Growth rate
+Increase/
+(decrease)
+2019
+2020
+Non-interest income
+Net interest income
+Item
+ICBC
+In RMB millions, except for percentages
+In 2020, the Bank strived to overcome the impact of the COVID-19 pandemic and changes in the external environment,
+actively implemented the fee reduction and profit concession policy, enhanced financial services for the real economy,
+actively empowered business with technology, and strengthened risk prevention and control, so as to maintain prudential
+operation and development. In the year, the Bank realized a net profit of RMB317,685 million, representing an increase of
+RMB4,324 million or 1.4% as compared to the previous year. Return on average total assets stood at 1.00%, and return
+on weighted average equity was 11.95%. Operating income amounted to RMB800,075 million, representing an increase of
+3.1%, of which, net interest income grew by 2.3% to RMB646,765 million; non-interest income was RMB153,310 million,
+up by 6.6%. Operating expenses amounted to RMB206,585 million, representing a decrease of 0.6%, and the cost-to-
+income ratio was 24.76%. Impairment losses on assets were RMB202,668 million, indicating an increase of 13.2%. Income
+tax expense fell by 5.1% to RMB74,441 million.
+26 March 2021
+FINANCIAL STATEMENTS ANALYSIS
+Discussion and Analysis
+17
+Annual Report 2020
+The asset scale of commercial banks grew steadily, with basically stable quality of credit assets and relatively sufficient risk
+offsetting capacity. At the end of 2020, the total assets of financial institutions in China's banking sector were RMB319.7
+trillion, up 10.1% year on year. The balance of NPLs of commercial banks reached RMB2.7 trillion, with a NPL ratio of 1.84%
+and allowance to NPLs of 184.5%. Besides, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital
+adequacy ratio were 10.72%, 12.04% and 14.7% respectively.
+Major financial indicators performed in line with expectations, and the financial system ran smoothly. At the end of 2020,
+the balance of M2 supply was RMB218.68 trillion, up 10.1% year on year. The outstanding RMB loans reached RMB172.75
+trillion, increasing by 12.8% year on year. The balance of RMB deposits amounted to RMB212.57 trillion, up 10.2% year
+on year. The outstanding social financing scale stood at RMB284.83 trillion, a year-on-year increase of 13.3%. The total
+issuance amount of various bonds in the bond market reached RMB56.9 trillion, up 26% year on year. The stock market
+index rebounded, with the Shanghai Composite Index and the Shenzhen Component Index increasing by 13.9% and 38.7%
+respectively over the end of last year. The central parity of RMB against the US dollar was RMB6.5249, an appreciation of
+6.9% from the end of last year.
+The prudent monetary policy became more flexible and targeted. By comprehensive use of various monetary policy tools
+such as reserve requirement ratio (RRR) cut, relending, rediscounting, medium-term lending facilities (MLF) and open market
+operation, PBC kept the total volume of liquidity matched with market demands. It improved the structural monetary policy
+tool system, introduced three batches of relending and rediscounting policies totaling RMB1.8 trillion at different levels and
+tiers, and innovatively launched two monetary policy tools directly targeting at the real economy. Moreover, PBC deepened
+the Loan Prime Rate (LPR) reform and pushed down the overall market interest rate and lending rate. It improved the
+market-based RMB exchange rate formation mechanism and kept RMB exchange rates basically stable at a reasonable and
+balanced level.
+China's economy continued to recover steadily, making it the only major economy in the world to achieve positive economic
+growth. In 2020, China's gross domestic product (GDP), consumer price index (CPI), fixed asset investment (excluding rural
+households), industrial added value of above-scale enterprises, and total imports and exports rose by 2.3%, 2.5%, 2.9%,
+2.8% and 1.9% year on year respectively, while retail sales of consumer goods dropped by 3.9% year on year.
+In 2020, due to the outbreak of COVID-19, trade protectionism and geopolitical conflicts, international trade and investment
+shrank substantially, and the world economy suffered from the worst recession since World War II. The potential risks in
+the international financial market scaled up, and the stock markets in many countries halted several times, along with sharp
+fluctuation in the world's major exchange rates and wide vibration in the prices of bulk commodities.
+CHANGES OF KEY INCOME STATEMENT ITEMS
+16
+China's long-term sound economic growth fundamentals will not change in 2021. With the launch of the new three-year
+plan, the Bank has entered into a new period of business development. We will firmly take the characteristic of economic
+recovery into consideration, proceed from the "big, comprehensive, stable, new, optimal and strong" orientation of
+development, apply the method of "Three Comparisons, Three Reviews and Three Improvements" into our work, and
+perfect the pattern of "bringing out our strengths to make up for our weaknesses and laying a solid foundation". We will
+carry out all the tasks of the new three-year plan, make financial services more adaptive, competitive and inclusive, and
+endeavor to better support the economy's high-quality development through our high-quality development, risk control and
+transformation. We are confident to take each step forward solidly in the new period of business development, leveraging
+our foresight that transcends time and space and prudent, cross-cycle advantage to repay the trust and support of all the
+shareholders and the public with more stellar results.
+Boosting transformation and innovation while deepening strategy implementation. Being customer-centric, the
+Bank refined the marketing system, strengthened the interactions among government, business and consumption (GBC),
+and further solidified the customer base. The Bank saw an increase of RMB2.48 trillion in domestic RMB deposits (including
+interbank deposits), hitting an all-time high. Key strategies were carried out effectively, comprehensively enhancing the
+personal banking, foreign exchange business and regional development service capabilities. Personal customers reached
+680 million, and the number of monthly active Internet banking customers broke the 100 million-mark at the earliest in
+the banking industry. In alignment with the New Rules on Asset Management, asset management and private banking
+transformation moved ahead in an orderly manner. The Bank optimized the international development strategy, improved
+all-around services, and effectively served global and diversified needs of customers. With a successful progress in ECOS
+development, the Bank continued to lead the industry with advanced IT infrastructure. The acceleration of digitalization
+went side by side with further promotion of core product, business model and service ecosystem innovations. The Bank
+actively empowered the industrial Internet, intelligent government services and intelligent medical care, and provided over
+ten thousand partners with intelligent financial solutions.
+ICBC
+Chairman's Statement
+Group, stabilized the overall quality of our assets. 2020 saw a drop in both the proportions of overdue loans and special
+mention loans of ICBC. We stepped up the management of market risks and liquidity risks, and successfully stabilized
+the trading business amidst drastic market fluctuations. We earnestly fulfilled our responsibilities as a strategic investor
+and supported Jinzhou Bank gradually resuming normal operation. We adopted various measures including fund support,
+technological empowerment and technology output simultaneously to build a line of defense against risks with small and
+medium banks, thus maintaining financial stability.
+Upholding the idea of a community with a shared future for mankind, we continued to improve our international
+development layout and connotation. We expanded global footprint with an international perspective, improved our
+institutional network, and achieved better connection between the domestic market and the overseas market as well as
+better integration of domestic and overseas resources. We integrated domestic and overseas services, local currency and
+foreign currency services, and online and offline services, improved domestic foreign exchange service, and strengthened
+global one-stop service capability. We opened the Auckland Branch in New Zealand and the Panama Branch. Our network
+of overseas institutions covered 49 countries and regions. We provided comprehensive services to China International Import
+Expo (CIIE), China International Fair for Trade in Services (CIFTIS), and China Import and Export Fair (Canton Fair); organized
+financial cooperation forums and meetings of Global Systemically Important Financial Institutions, helped expand the Belt
+and Road Inter-bank Regular Cooperation Mechanism (BRBR) covering 61 countries and regions, and promoted multilateral
+financial cooperation.
+2020 was the final year of ICBC's three-year plan. After continuous hard work, all main goals and tasks listed in the three-
+year plan had been completed. ICBC continued to rank first in total market value in China's financial sector, and ranked
+first in Forbes's Global 2000 and The Banker's Top 1000 World Banks for the eighth consecutive year, with comprehensive
+strength leapt to a new stage.
+In 2020, we continued to regard corporate governance as the key to improving core competitiveness, constantly improving
+the robustness and effectiveness of corporate governance measures. The Executive Committee was established to oversee
+the management of business operations under the leadership of the Bank's Party Committee. We make continuous effort
+to increase corporate governance efficiency by improving our corporate governance structure, which is led by the Bank's
+Party Committee with the Board of Directors acting as the decision-making organ, the Board of Supervisors responsible for
+compliance supervision, and the Management in charge of operation.
+In 2020, Mr. Gu Shu resigned from the positions of Vice Chairman, Executive Director and President of ICBC due to change
+of job assignments. During his tenure, Mr. Gu Shu faithfully and diligently performed his duties and comprehensively
+improved the efficiency of the operation and management of the Bank. On behalf of the Board of Directors, I would like to
+express my sincere gratitude to Mr. Gu for his outstanding contributions to the Bank. On behalf of the Board of Directors, I
+would also like to welcome Mr. Liao Lin as our new Vice Chairman, Executive Director and President, Mr. Feng Weidong and
+Ms. Cao Liqun as new directors, as well as Mr. Wang Jingwu, Mr. Zhang Wenwu and Mr. Xu Shouben as the new Senior
+Executive Vice Presidents. We hope all the new directors and management members will continue to make even greater
+contributions to the Bank and work hard to drive the high-quality development of ICBC.
+2021 marks the 100th anniversary of the founding of the Communist Party of China. It is the first year of the country's 14th
+Five-Year Plan and the Bank's new three-year plan. We will thoroughly study and follow the principles of Xi Jinping Thought
+on Socialism with Chinese Characteristics for a New Era, and put in practice new development concepts in new development
+stages. We will continue to make progress while maintaining stability, step up risk management, support major projects,
+build a services-centered new development pattern, promote high-quality development, and create value for shareholders,
+customers, employees and the society. We will continue to work hard to become a world-class modern financial institution,
+and celebrate the 100th anniversary of the founding of the Communist Party of China with an excellent track record backing us.
+Phon
+Chairman: Chen Siqing
+26 March 2021
+Annual Report 2020
+13
+President's Statement
+President Liao Lin
+14
+ICBC
+President's Statement
+In 2020, facing the disruptions of the novel coronavirus and various unstable and uncertain factors at home and abroad,
+the Management pursued the decisions and plans of the CPC Central Committee and the State Council, acted upon the
+working guideline of "adherence to the guidance of Party building and strict governance, customer first and serving the real
+economy, technology driven and value creation, international vision and global operation, pragmatic transformation and
+reform, and solid foundation by risk control and talent-oriented development" in real earnest, solidified the foundation for
+sound development and made new breakthrough in transformation and innovation with a focus on the "Three Tasks" of
+financial work, and paid efforts to maintain stable and coordinated operations, thereby faring better than expected.
+Making progress while pressing stably ahead with the quality and momentum improvement of operations. At the
+same time of scarifying a reasonable portion of profit to the real economy, the Bank strove to tap potential and raise cost
+effectiveness, and achieved hard-won growth in 2020. The Group recorded RMB317.7 billion in net profit, representing an
+increase of 1.4% from the previous year. Profit before provision was RMB594.8 billion, representing an increase of 4.2%
+from the previous year. Operating income came in at RMB800.1 billion, representing an increase of 3.1% from the previous
+year. With all kinds of risks under effective control, the NPL ratio, at 1.58%, was maintained in a stable range. The ratio of
+both overdue loans and special mention loans fell, and 2020 marked the first year for the price scissors between overdue
+loans and NPLs to turn negative. Allowance to NPLs reached 180.68%. Cost-to-income ratio stood at 24.76%, staying at a
+satisfactory level in the industry.
+Serving the real economy to the best of our abilities as a responsible large bank. The Bank contributed to the
+endeavor of "ensuring stability on six key fronts" and "maintaining security in six key areas" across the board, earnestly
+carried out the counter-cyclical policies and maintained the stability of aggregate investment and financing volumes and the
+continued optimization of structures. The Bank registered new domestic RMB loans of RMB1.88 trillion, RMB549.1 billion
+more than the increment a year ago. Bond investments grew by RMB1.19 trillion over the year beginning, ranking the first
+in the market. The Bank carried out special actions to support COVID-19 relief efforts, resumption of work and production,
+and supply chain stabilization and strengthening, facilitate foreign trade and foreign investment, and help Hubei and Wuhan
+fight COVID-19, financially empowering the coordination between pandemic prevention and control and each work in
+relation to economic and social development. The Bank did well in implementing the loan servicing postponement policy,
+relieving over 0.10 million customers from such pressure, and relevant loans amounted to RMB1.5 trillion. Concerning key
+fields and weak areas, the Bank optimized the financial resources it supplied and provided direct access to targeted financial
+services. Manufacturing loans increased by RMB222.9 billion, with the medium to long-term manufacturing loans growing
+by 46.7%. The Bank actively developed digital supply chain financing, so that premier financial services could benefit more
+micro-, small- and medium-sized enterprises. Loans to private enterprises and inclusive loans rose by 12.4% and 58%,
+respectively. Inclusive finance was pushed to increase volume, expand coverage, enhance quality and cut cost. By actively
+galvanizing the system building and service innovation of green finance, the Bank increased the balance of green loans to
+RMB1.85 trillion.
+Stepping up risk management with the systemic concept. The Bank improved the enterprise risk management system,
+stuck to the route of "active prevention, smart control and comprehensive management", put in place the four-pronged risk
+management approach to people, money, defense line and bottom line, and realized the full coverage and precise control of
+risks in each segment of the institutions and all types of risks. With equal emphasis upon off-risk and process reengineering,
+the Bank reinforced the management of "Three Gates" and "Seven-color Pools", launched the new regulation on credit
+approval, steadily pushed forward the resolving of credit risks in an orderly manner, and continued to improve credit asset
+quality. NPLs recovered and disposed of were valued at RMB217.6 billion, representing an increase of RMB28.9 billion over
+the prior year. The Bank advanced the building of "Rong An e" risk control systems and built the smart risk control brand.
+It strengthened the analysis and anticipation of market conditions, dynamically revised the investing and trading strategies,
+and continued to improve the capacity for identifying, measuring, giving early warning on and controlling market risks
+to effectively tackle market fluctuations. The Bank continued to manage operational, liquidity and reputational risks well,
+fostered the compliance culture and performed compliance management of domestic and overseas institutions.
+Annual Report 2020
+15
+President's Statement
+12
+Income Statement Analysis
+364,641
+14,548
+392,126
+391,789
+337
+0.1
+Less: Income tax expense
+74,441
+78,428
+(3,987)
+(5.1)
+Net profit
+317,685
+313,361
+4,324
+Profit before taxation
+1.4
+315,906
+312,224
+3,682
+1.2
+company
+Non-controlling interests
+1,779
+1,137
+642
+56.5
+18
+ICBC
+We earnestly balanced between development and security to ensure better performance in risk control of new
+loans and risk disposal of existing ones. We adopted a systematic approach in risk management to plan ahead, see the
+big from the small, remedy in time and draw inferences. We improved the top-level design of risk management, integrated
+risk investigation and management, and coordinated the advancement of risk prevention and process reengineering, to
+safeguard the bottom line of avoiding any systemic financial risks. We coordinated credit risk management throughout the
+Attributable to: Equity holders of the parent
+632,217
+joint ventures
+(1,216)
+2.3
+153,310
+143,785
+9,525
+6.6
+Operating income
+800,075
+776,002
+24,073
+3.1
+Less: Operating expenses
+206,585
+207,776
+(48.3)
+(1,191)
+Less: Impairment losses on assets
+202,668
+178,957
+23,711
+13.2
+Operating profit
+390,822
+389,269
+1,553
+0.4
+Share of profits of associates and
+1,304
+2,520
+(0.6)
+372,413
+Keeping in mind our mission as a large state-owned bank, we fully supported COVID-19 control and the
+development of the real economy. In the face of the sudden outbreak of COVID-19, we insisted on putting people's
+life and health first. We set up a leading group and a task force to respond to challenges related to COVID-19 in a timely
+manner, adjusted prevention and control strategies when situation changed, and built a strong line of defense against the
+virus. We donated a total of RMB250 million in cash and in kind. More than 2,800 cadres and employees joined the frontline
+fight against the virus. We firmly shouldered the responsibility of financial support, made well-targeted efforts to ensure
+stability on six key fronts and maintain security in six key areas and carried out special actions to support COVID-19 relief
+efforts, resumption of work and production, and supply chain stabilization and strengthening, facilitate foreign trade and
+foreign investment, and help Hubei and Wuhan fight COVID-19. The increase in our RMB loans and bond investment hit a
+record high. We actively promoted the development of inclusive finance, industrial finance, and scientific innovation finance,
+and continued to improve the adaptability, competitiveness, and inclusiveness of our financial services. Inclusive loans issued
+by us topped RMB1 trillion, and the proportion of medium to long-term manufacturing loans and advanced manufacturing
+loans significantly increased.
+Allowance to NPLs (8)
+Total equity to total assets ratio
+14.61
+15.14
+15.39
+16.77
+16.88
+Capital adequacy ratio (10)
+8.73
+13.42
+13.45
+14.27
+14.28
+Tier 1 capital adequacy ratio (10)
+12.87
+12.77
+12.98
+13.27
+13.20
+8.94
+8.21
+Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(7)
+(6) Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+_
+8.47
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2) Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9
+Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+60.34
+60.96
+62.06
+61.83
+60.35
+Risk-weighted assets to total assets
+8.21
+ratio
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+13.18
+Capital adequacy (%)
+25.71
+25.79
+24.76
+Cost-to-income ratio (6)
+to operating income
+20.67
+17.15
+26.45
+16.83
+Ratio of net fee and commission income
+2.01
+1.89
+1.81
+1.75
+1.64
+Return on risk-weighted assets (5)
+16.40
+Core tier 1 capital adequacy ratio (10)
+27.40
+Non-performing loans ("NPLs") ratio (7)
+2.22
+2.39
+2.68
+2.86
+2.85
+Allowance to total loans ratio (9)
+136.69
+Asset quality (%)
+154.07
+199.32
+180.68
+1.62
+1.55
+1.52
+1.43
+1.58
+175.76
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+Quarterly Financial Data
+2020
+139,625
+144,973
+Operating income
+800,075
+776,002
+725,121
+675,654
+124,394
+641,681
+206,585
+207,776
+194,203
+186,194
+193,112
+Impairment losses on assets
+202,668
+Operating expenses
+178,957
+130,573
+Net fee and commission income(1)
+Following high-quality development requirements, we advanced reform, innovation and transformation in
+depth. Sticking to our duty of serving the real economy and the dual-wheel drive of system reform and technological
+innovation, we continued to strengthen our internal power and growth momentum. We accelerated digital transformation,
+advanced the "Digital ICBC" initiative, improved financial availability, convenience, and accuracy, and helped drive the
+digital transformation of the entire country. We sought self-reliance in technology. With a successful progress in ECOS
+development, we stepped up empowerment through financial inclusion technology. Seizing the opportunity of the factor
+market opening-up, we worked faster to improve the comprehensive service system to make it a comprehensive service
+system with complete functions and smooth coordination. We coordinated our effort to support national and regional
+development initiatives and also to increase our own competitiveness, and gave priority to meeting the financing needs of
+key regions and major projects. We promoted the development of green finance, improved the layout of credit assets, and
+maintained a leading position in the industry in terms of the total value of green loans, actively contributing our financial
+power to the green transformation of the economy.
+Financial Highlights
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Data
+2020
+2019
+2018
+131,215
+2017
+Annual operating results (in RMB millions)
+Net interest income(1)
+646,765
+632,217
+593,677
+522,078
+471,846
+2016
+161,594
+127,769
+87,894
+company
+192,385 190,481 191,318
+82,005 85,926 83,781 60,512
+Q4
+Q3
+Q2
+Q1
+201,818
+196,159 197,901 199,828
+64,296 79,885 87,231
+Net cash flows from operating 1,907,890 (34,157) 146,709 (462,826) 1,008,242 (100,949) 300,928 (726,981)
+Net profit attributable to equity 84,494
+holders of the parent
+Operating income
+Q4
+Q3
+Q2
+Q1
+(In RMB millions)
+2019
+206,187
+activities
+10
+ICBC
+Operating profit
+390,822
+389,269
+369,324
+361,691
+360,675
+Profit before taxation
+Polishing the people-oriented foundation, we continued to meet the people's aspiration for a better life with
+high-quality financial services. Upholding the principle of pursuing development and services that can benefit the people,
+we developed products, improved quality and built the ecosystem based on customer demand, to comprehensively improve
+our personal banking services. We saw a record high increase in savings deposits. ICBC continued to rank first in brand
+value in the global retail banking sector. We continued to optimize the service process to reduce customers' legwork, thus
+improving customer experience and increasing their satisfaction and sense of gain. We took the initiative to undertake public
+welfare responsibilities, and launched free public welfare platforms such as "Emergency Materials Management System" and
+"Campus Anti-pandemic Registration System", forming a public welfare service system with a matrix of 16,000 outlets. In
+the final year of the battle against poverty, we helped all four counties and cities that ICBC was paired up with under the
+targeted poverty alleviation program get rid of poverty as scheduled, and two ICBC units were awarded "National Advanced
+Collective in Poverty Alleviation".
+392,126
+391,789
+ICBC Group's total assets reached RMB33 trillion in 2020. Our net profit stood at RMB317.7 billion, an increase of 1.4%
+over the previous year. Our non-performing loans ratio stood at 1.58%, indicating a high level of financial stability. Our
+capital adequacy ratio reached 16.88%. The Board of Directors of the Bank has proposed to pay RMB2.660 for every 10
+ordinary shares to shareholders as dividends for 2020. The proposal will be submitted to the Shareholders' General Meeting
+for approval.
+The year 2020 was an extraordinary year. It was also a year worth remembering for ICBC as we made remarkable progress
+in reform and development in the year. In the face of challenges brought about by the pandemic and the ever-changing
+environment, ICBC adhered to the principles of Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era and implemented in depth the decisions of the CPC Central Committee and the State Council. In accordance with
+the guideline of "adherence to the guidance of Party building and strict governance, customer first and serving the real
+economy, technology driven and value creation, international vision and global operation, pragmatic transformation and
+reform, solid foundation by risk control and talent-oriented development", we kept forging ahead, despite the challenges,
+continued to serve the real economy, strengthen financial risk management, and deepen financial reforms (i.e., the "Three
+Tasks"). We participated in the prevention of major risks, targeted poverty alleviation and pollution control (i.e., the "Three
+Critical Battles") and achieved steady progress and better-than-expected performance.
+Chairman's Statement
+11
+Annual Report 2020
+Chairman Chen Siqing
+Chairman's Statement
+2.16
+2.22
+22.59
+2.30
+2,676,186
+2,893,502
+Equity attributable to equity holders
+institutions
+2,016,799
+1,706,549
+1,814,495
+2,330,001
+2,266,573
+Due to banks and other financial
+18,113,931
+19,562,936
+22,156,102
+23,945,987
+5,481,174
+5,756,704
+2,784,259
+8,591,139 7,647,117 6,754,692
+30,435,543 27,417,433 25,354,657
+22,977,655 21,408,934
+2,127,491
+of the parent company
+2,110,060
+2,312,143
+2,657,523
+2,872,792
+Net tier 1 capital(3)
+1,874,976
+2,030,108
+1,969,751
+356,407
+356,407
+2,232,033
+2.36
+2,653,002
+Net core tier 1 capital (3)
+356,407
+356,407
+Share capital
+356,407
+25,134,726
+Due to customers
+Total liabilities
+1,557,616
+Net cash flows from operating activities
+of the parent company
+278,249
+286,049
+297,676
+312,224
+481,240
+315,906
+279,106
+287,451
+298,723
+313,361
+317,685
+Net profit
+363,279
+Net profit attributable to equity holders
+529,911
+770,864
+239,221
+Investment
+on loans (2)
+289,512
+340,482
+13,056,846
+14,233,448
+24,137,265
+26,087,043
+27,699,540
+15,419,905
+413,177
+16,761,319
+478,730
+18,624,308
+531,161
+Allowance for impairment losses
+Total loans and advances to customers
+30,109,436
+33,345,058
+Total assets
+As at the end of reporting period (in RMB millions)
+1,954,770
+Net capital base (3)
+2,457,274
+3,121,479
+Profitability (%)
+2016
+2017
+2018
+2019
+3,396,186
+2020
+Return on average total assets (1)
+Financial Indicators
+9
+Annual Report 2020
+The rating results are in the form of "long-term foreign currency deposits rating".
+(4)
+Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments at
+the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(2) Calculated by adding allowance for impairment losses on loans and advances to customers measured at amortised cost with
+allowance for impairment losses on loans and advances to customers measured at fair value through other comprehensive income.
+(3) Calculated in accordance with the Capital Regulation.
+Notes: (1) According to the Notice on Strictly Implementing the Accounting Standards for Business Enterprises and Effectively Strengthening
+the 2020 Annual Report of Enterprises promulgated by MOF, State-owned Assets Supervision and Administration Commission
+of the State Council, CBIRC and CSRC, credit card installment fee income and related expenses are reclassified from fee and
+commission income and expense to interest income and other net operating income. The data in the comparative periods of 2019
+and 2018 are adjusted accordingly, and relevant financial indicators are also restated accordingly.
+Financial Highlights
+A1
+1.00
+1.11
+2.15
+Net interest margin (4)
+2.02
+2.10
+2.20
+2.12
+1.97
+1.08
+Net interest spread(3)
+14.35
+13.79
+13.05
+11.95
+Return on weighted average equity(2)
+1.20
+1.14
+15.24
+A1
+(5)
+A
+5.29
+5.73
+6.30
+A
+7.48
+Net asset value per share(4)
+Per share data (in RMB yuan)
+Basic earnings per share
+14,564,617
+17,190,992
+18,616,886
+20,124,139
+Risk-weighted assets (3)
+2,127,462
+2,406,920
+2,644,885
+15,902,801
+0.86
+6.93
+0.82
+A
+A1
+A1
+A
+0.86
+A
+Moody's (5)
+S&P(5)
+Credit rating
+A1
+0.79
+0.82
+0.86
+0.86
+Diluted earnings per share
+0.77
+0.79
+0.77
+31,267
+38,119
+24,984
+97,444
+Assets
+277
+277
+Notional amounts with remaining life of
+31 December 2019
+Fair values
+Over three
+3,074
+Over
+Liabilities
+(3,119)
+(3,119)
+97,444
+but within
+38,119
+31,267
+3,074
+Interest rate swap contracts
+Total
+five years
+five years
+one year
+months
+Over
+but within
+Within
+24,984
+months
+Over three
+three
+three
+ICBC
+198
+(1,383)
+199
+64,293
+14,841
+47,346
+697
+(1,383)
+Liabilities
+Assets
+199
+one year
+64,293
+47,346
+1,409
+697
+Interest rate swap contracts
+Total
+five years
+five years
+one year
+months
+Over
+but within
+but within
+14,841
+Over
+one year
+94,804
+24,779
+4,002
+51
+62,598
+52,734
+2
+64
+Equity derivative
+(284)
+Liabilities
+Assets
+121
+28,595
+1,045
+20,726
+Within
+52,670
+Currency swap contracts
+Interest rate swap contracts
+Total
+Over
+five years
+1,052
+112,444
+1,077
+(750)
+58,998
+Bonds
+Assets
+hedged items
+instruments
+Effect of hedging
+31 December 2020
+Carrying amount of
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equities are as follows:
+five years
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+ICBC
+196
+(1,041)
+1,201
+141,163
+(7)
+3
+124
+7
+Notes to the Financial Statements
+Liabilities
+(14,779)
+one year
+but within
+(546)
+(1,243)
+4,150
+150,480
+1,211
+77,779
+71,490
+Currency swap contracts
+61
+25,087
+239
+8,730
+15,909
+209
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+five years
+five years
+Equity derivative
+29
+3
+33
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Notional amounts with remaining life of
+Fair values
+months
+31 December 2019
+4,211
+175,635
+242
+9,974
+93,691
+71,728
+(15)
+68
+3
+(1,804)
+on other
+comprehensive
+income during
+the year
+other comprehensive
+income
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges for the current year (2019:
+(4,491)
+(697)
+(111,876)
+32,321
+Other liabilities
+Due to customers/
+Due to banks and
+other financial institutions/
+Certificates of deposit/
+Other assets/
+other financial institutions/
+Due from banks and
+customers
+Debt securities issued
+Loans and advances to
+Financial investments
+measured at amortised cost/
+measured at FVOCI/
+Financial investments
+of financial position
+Line items in the statement
+(4,505)
+Nil).
+Annual Report 2020
+197
+Notes to the Financial Statements
+Fair values
+Notional amounts with remaining life of
+31 December 2020
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+14
+(49)
+218
+1,437
+(204)
+(639)
+(1,486)
+2020
+Hedged items attributable to the hedged risk
+Hedging instruments
+(Loss)/gain arising from fair value hedges, net:
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates. Interest rate swaps are used as hedging instruments to hedge the interest risk of
+financial assets and financial liabilities, respectively.
+Fair value hedges
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+2019
+(104,846)
+6,050
+Others
+58,190 (308,298)
+Others
+(82)
+(65)
+2,278
+Loans
+Due to customers/
+Other liabilities
+Due to banks and
+other financial institutions/
+Certificates of deposit/
+Other assets/
+(19)
+other financial institutions/
+customers
+Debt securities issued
+Loans and advances to
+Financial investments
+measured at amortised cost/
+measured at FVOCI/
+Financial investments
+Line items in the statement
+of financial position
+Accumulated effect
+of hedging
+instruments on
+(31)
+(62)
+Due from banks and
+one year
+(4,524)
+(323,077)
+(17)
+(54)
+2,914
+Loans
+income
+31
+other comprehensive
+of hedging
+instruments on
+Accumulated effect
+63599
+119,466
+(4)
+Effect of hedging
+Liabilities
+(7,030)
+23,357
+Bonds
+Assets
+Carrying amount of
+hedged items
+31 December 2019
+(4,637)
+(146)
+instruments
+on other
+comprehensive
+income during
+the year
+months
+Over
+but within
+4,294
+86,655
+82,807
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+11,449
+2,728
+Other financial institutions operating in Chinese mainland
+373,868
+433,575
+Banks operating in Chinese mainland
+31 December
+2019
+2020
+31 December
+Due from banks and other financial institutions:
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+(ii) Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central
+banks and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve
+deposits mainly consist of deposits placed with the PBOC and central banks of overseas countries or regions. As at 31
+December 2020, the mandatory deposit reserve ratios of the domestic branches of the Bank in respect of customer
+deposits denominated in RMB and foreign currencies were consistent with the requirement of the PBOC. The amounts
+of mandatory reserve deposits placed with the central banks of those countries or regions outside Chinese mainland
+are determined by local jurisdictions.
+3,317,916
+1,501
+3,537,795
+3,914
+523,404
+475,886
+Less: Allowance for impairment losses
+558,984
+567,727
+6,235
+3,279
+559,720
+(736)
+Less: Allowance for impairment losses
+249,018
+262,922
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+218,315
+Accrued interest
+204,585
+months
+94,159
+88,934
+Banks operating in Chinese mainland
+Placements with banks and other financial institutions:
+475,325
+522,913
+(561)
+(491)
+Other financial institutions operating in Chinese mainland
+(i)
+1,734
+250,976
+Basic and diluted earnings per share (RMB yuan)
+356,407
+356,407
+Weighted average number of ordinary shares in issue (in million shares)
+Shares:
+307,699
+307,067
+Profit for the year attributable to ordinary equity holders of the parent company
+(4,525)
+0.86
+(8,839)
+Less: Profit for the year attributable to other equity instruments
+312,224
+315,906
+Profit for the year attributable to equity holders of the parent company
+Earnings:
+2019
+2020
+The calculation of basic and diluted earnings per share of the Group is based on the following:
+93,664
+holders of the parent company
+(684)
+567,043
+0.86
+Annual Report 2020
+322,892
+619,968
+249,836
+2,676,279
+2,601,657
+66,035
+64,833
+2019
+31 December
+2020
+Basic and diluted earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the
+parent company divided by the weighted average number of ordinary shares in issue.
+31 December
+Surplus reserves (ii)
+Mandatory reserves (i)
+Balances with central banks
+Cash on hand
+19. CASH AND BALANCES WITH CENTRAL BANKS
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+193
+Fiscal deposits and others
+2019
+1,081,897
+194
+(30,710)
+13,617
+818,186
+(24,166)
+15,893
+804,987
+Commodity derivatives and others
+(17,888)
+16,436
+2,125,339
+(25,248)
+23,002
+2,199,849
+Interest rate contracts
+(36,582)
+38,258
+4,944,200
+(91,559)
+95,260
+8,784,445
+134,155
+(140,973)
+7,887,725
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+5,779,609
+31 December 2020
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts and equity derivatives that are
+used to protect against exposures to variability of future cash flows.
+Cash flow hedges
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+195
+Annual Report 2020
+(85,180)
+68,311
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out
+below.
+Exchange rate contracts
+Liabilities
+Assets
+230
+70
+160
+1,015
+614
+401
+Total
+banks and other
+financial institutions
+banks and other
+financial institutions
+561
+Placements with
+Charge/(reverse) for the year
+At 31 December 2019 and 1 January 2020
+Charge for the year
+At 1 January 2019
+Due from
+Movements of the allowance for impairment losses during the year are as follows:
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+At 31 December 2020
+1,042,368
+684
+(70)
+amounts
+Liabilities
+Fair values
+Notional
+Fair values
+Assets
+amounts
+Notional
+31 December 2019
+31 December 2020
+1,245
+At the end of the reporting period, the Group had derivative financial instruments as follows:
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+market participants at measured date.
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+1,227
+736
+491
+(18)
+52
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which meet
+the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2020, derivative assets
+and derivative liabilities which meet the criteria for offsetting were RMB48,896 million (31 December 2019: RMB36,547
+million) and RMB51,690 million (31 December 2019: RMB40,614 million) respectively, and the net derivative assets and net
+derivative liabilities were RMB37,045 million (31 December 2019: RMB26,248 million) and RMB39,839 million (31 December
+2019: RMB30,315 million) respectively.
+6,824
+55,772
+1,409
+18. EARNINGS PER SHARE
+Year ended 31 December 2019
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Executive Director
+Chairman of the Board of Directors,
+Chen Siging (i)
+Position
+Name
+2020
+189
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(!!)
+(iii)
+(iv)
+(v)
+(vi)
+(vii)
+At the Second Extraordinary General Meeting of 2019 held on 22 November 2019, Mr. Gu Shu was re-elected as
+Executive Director of the Bank, and his new term of office took effect from the date of review and approval by the
+meeting.
+At the First Extraordinary General Meeting of 2020 held on 8 January 2020, Mr. Yang Guozhong was elected as
+shareholder supervisor and Chairman of the Board of Supervisors of the Bank, and his term of office took effect from
+the date of review and approval by the meeting.
+At the Annual Meeting of 2018 held on 20 June 2019, Mr. Lu Yongzhen was elected as Non-executive Director of the
+Bank, and his term of office took effect from the date of review and approval by the CBIRC.
+At the Second Extraordinary General Meeting of 2019 held on 22 November 2019, Mr. Feng Weidong and Mrs. Cao
+Liqun were elected as Non-executive Director of the Bank, and their terms of office took effect from the date of review
+and approval by the CBIRC.
+At the shareholders' general meeting of 2018 held on 20 June 2019, Mr. Yang Siu Shun has been re-elected as
+Independent Non-executive Director of the Bank, and his new term of office took effect from the date of review and
+approval by the meeting.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Fred Zuliu Hu was elected as
+Independent Non-executive Director of the Bank, and his term of office took effect from the date of review and
+approval by the CBIRC.
+(viii) At the shareholders' general meeting of 2018 held on 20 June 2019, Mr. Zhang Wei and Mr. Shen Bingxi have been
+elected as shareholder supervisor and external supervisor of the Bank respectively, their terms of office took effect from
+the expiry date of their current terms of office.
+Contribution by
+the employer to
+social insurance
+Actual
+(3)
+(2)
+(1)
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+paid before tax
+payment
+(ix)
+remuneration
+emoluments
+before tax
+allowance, etc.
+bonuses
+paid
+Fees
+plans, housing
+Discretionary
+Remuneration
+amount of
+Of which:
+Total
+and welfare
+deferred
+(4)
+(x)
+(xii)
+8,520
+4,933
+63,917
+103,067
+The number of these individuals whose emoluments fell within the following bands is set out below:
+Number of employees
+2020
+2019
+2
+RMB10,500,001 Yuan to RMB11,000,000 Yuan
+RMB12,000,001 Yuan to RMB12,500,000 Yuan
+RMB13,500,001 Yuan to RMB14,000,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+RMB38,500,001 Yuan to RMB39,000,000 Yuan
+-
+1
+1
+1
+1
+1
+1
+1
+1
+5
+5
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2019: Nil).
+14. IMPAIRMENT LOSSES ON ASSETS
+Loans and advances to customers
+Others
+Notes
+23
+11,273
+Compensation for terminating contract
+71
+252
+On 21 June 2019, Mr. Huang Li was elected as the employee supervisor of the bank at the special meeting of the
+first session of employee representative assembly of the Bank, and his new term of office took effect from the date of
+review and approval by the meeting.
+In January 2019, Mr. Yi Huiman ceased to act as Chairman of the Board of Directors and Executive Director of the Bank
+due to change of job assignments.
+At the First Extraordinary General Meeting of 2019 held on 20 May 2019, Mr. Hu Hao and Mr. Tan Jiong were elected
+as Executive Director of the Bank, and their terms of office took effect from the date of review and approval by the
+CBIRC.
+In February 2020, Mr. Hu Hao ceased to act as Executive Director and Vice President of the Bank due to change of job
+assignments.
+(xiii) In September 2019, Mr. Tan Jiong ceased to act as Executive Director and Vice President of the Bank due to change of
+job assignments.
+(xiv) In April 2019, Mr. Cheng Fengchao ceased to act as Non-executive Director of the Bank citing his age.
+(xv) In March 2020, Mr. Ye Donghai ceased to act as Non-executive Director of the Bank due to change of job assignments.
+(xvi) In February 2020, Mr. Dong Shi ceased to act as Non-executive Director of the Bank due to change of job assignments.
+(xvii) In April 2019, Mr. Hong Yongmiao ceased to act as Independent Non-executive Director due to the expiration of the
+term.
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+During the year, there was no arrangement under which a Director or a Supervisor waived or agreed to waive any
+remuneration (2019: Nil).
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2019: Nil).
+190
+ICBC
+(xi)
+Notes to the Financial Statements
+13. FIVE HIGHEST PAID INDIVIDUALS
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 12 and 49(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+2020
+RMB'000
+2019
+RMB'000
+Discretionary bonuses
+Salaries and allowances
+Defined contribution plans
+Others
+15,889
+19,598
+39,256
+67,192
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+2020
+(5)=(1)+(2)+(3)+(4)
+(7)=(5)-(6)
+Dong Shi (xvi)
+Former Non-executive Director
+Ye Donghai (xv)
+Former Non-executive Director
+Cheng Fengchao (xiv)
+Former Executive Director, Vice President
+Tan Jiong (xi)(xiii)
+Former Executive Director, Vice President
+Hu Hao (xi)(xii)
+171
+250
+བྲཱུ, ཡྻུཾgeནྡྲིཡྻུཾཥུངྒིཥྛིངྒེབྦེ, ,,,,,
+1,580
+515
+430
+446
+475
+བྷཟུགཽབྷུཀྑུནྣམྦུ 8 ཝཡྻ '་ྔ
+29
+83
+59
+Former Chairman of the Board of Directors,
+Executive Director
+Yi Huiman (x)
+250
+50
+Former Non-executive Director
+Hong Yongmiao (xvii)
+Former Independent Non-executive Director
+125
+(i)
+As at the approval date of financial statements of 2019, changes of directors and supervisors of the Bank are as follows:
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+The remuneration before tax payable to Directors and Supervisors for 2019 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2019 Annual
+Report.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+8,078
+515
+8,593
+817
+2,986
+1,788
+50
+3,002
+125
+698
+698
+122
+༄ ༔,, ।
+337
+239
+930
+930
+162
+449
+319
+125
+(6)
+2,095
+1,285
+Cao Liqun (v)
+Non-executive Director
+Feng Weidong (v)
+Non-executive Director
+Lu Yongzhen (iv)
+Non-executive Director
+Mei Yingchun
+1,019
+1,019
+166
+499
+354
+Non-executive Director
+Chairman of the Board of Supervisors
+Executive Director, President
+Vice Chairman of the Board of Directors,
+Zheng Fuqing
+Yang Guozhong (iii)
+Gu Shu (ii)
+678
+678
+109
+33
+333
+236
+Non-executive Director
+Anthony Francis Neoh
+Independent Non-executive Director
+475
+581
+308
+423
+445
+430
+,,,,,।བྷུལྦཔྤཀྲུསྟྲ་ཞRཤྩ་་
+External Supervisor
+Shen Bingxi (viii)
+External Supervisor
+Qu Qiang
+Employee Representative Supervisor
+Employee Representative Supervisor
+229
+Hui Ping
+Huang Li (ix)
+Zhang Wei (vii)
+Independent Non-executive Director
+Fred Zuliu Hu (vii)
+Independent Non-executive Director
+Nout Wellink
+Independent Non-executive Director
+Shen Si
+Independent Non-executive Director
+Sheila Colleen Bair
+446
+Independent Non-executive Director
+Yang Siu Shun (vi)
+Shareholder Representative Supervisor
+At the Board of Directors held on 29 April 2019, Mr. Chen Siqing was nominated as Executive Director and elected as
+Chairman of the Board of Directors of the Bank. At the First Extraordinary General Meeting of 2019 held on 20 May
+2019, Mr. Chen Siqing was elected as Executive Director and his term of Chairman of the Board of Directors of the
+Bank and Executive Director took effect from the date of approval by the meeting.
+Annual Report 2020
+Overseas
+2,347
+3,380
+78,145
+84,290
+(3,704)
+(5,862)
+74,441
+(b) Reconciliation between income tax and accounting profit
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Chinese
+mainland during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing
+in the countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect
+thereof. A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate
+to income tax expense at the Group's effective income tax rate is as follows:
+2020
+2019
+Profit before taxation
+392,126
+391,789
+Tax at the PRC statutory income tax rate
+98,032
+97,947
+2,244
+Effects of different applicable rates of tax prevailing in other countries/regions
+Effects of non-deductible expenses (i)
+1,776
+74,022
+171,830
+2019
+162,108
+30,838
+202,668
+16,849
+178,957
+Annual Report 2020
+191
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+15. INCOME TAX EXPENSE
+(a) Income tax expense
+Current income tax expense:
+Chinese mainland
+Hong Kong and Macau
+Deferred income tax expense
+2020
+2019
+78,666
+(1,521)
+78,428
+20,478
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+2020
+2019
+Final ordinary shares dividends for 2019: RMBO.2628 per share
+(2018: RMBO.2506 per share)
+93,664
+89,315
+Dividends or interests declared and paid to other equity instruments holders:
+Dividends on ordinary shares declared and paid:
+Dividends on preference shares
+4,525
+Interests on perpetual bond
+3,560
+8,839
+4,525
+Dividends on ordinary shares proposed for approval
+(not recognised as at 31 December):
+Final ordinary shares dividends for 2020: RMB0.2660 per share
+(2019: RMB0.2628 per share)
+(1,694)
+17. DIVIDENDS
+5,279
+192
+ICBC
+16,585
+Effects of non-taxable income (ii)
+(42,803)
+(34,180)
+Effects of others
+(326)
+581
+(630)
+400
+Effects of profits attributable to associates and joint ventures
+74,441
+78,428
+(i)
+(ii)
+The non-deductible expenses mainly represent non-deductible impairment provision, write-offs and others.
+The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal
+debts, which is exempted from income tax.
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+Income tax expense
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2020 includes
+a profit of RMB304,267 million (2019: RMB296,338 million) which has been dealt with in the financial statements of the
+Bank (Note 39).
+Sao Paulo, Brazil
+Real202 million
+Real202 million
+100
+Commercial
+USD120 million
+Argentina
+Lima, Peru
+100
+Industrial and Commercial Bank of China
+USD120 million
+banking
+100
+banking
+Commercial
+and investment
+100
+10
+100
+NZD234 million
+NZD234 million
+(New Zealand) Limited
+New Zealand
+Auckland,
+banking
+Commercial
+banking
+("ICBC New Zealand")
+ㅎㅎ
+Industrial and Commercial Bank of China
+80
+100
+629
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+100
+ICBC-AXA Assurance Co., Ltd. *
+60
+60
+60
+Industrial and Commercial Bank of China
+80
+80
+80
+RMB12,505 million
+USD369 million
+RMB7,980 million
+USD306 million
+Delaware and
+New York,
+United States
+Shanghai, the PRC
+100
+Broker dealer
+Industrial and Commercial Bank of China
+(Argentina) S.A.("ICBC Argentina")
+ICBC PERU BANK
+100
+10
+50
+80
+100
+ARS18,800 million
+USD904 million
+New York,
+United States
+Buenos Aires,
+Insurance
+Commercial
+banking
+Commercial
+100
+100
+(USA) NA
+00
+Vienna, Austria
+0
+Banking
+Financial asset
+("ICBC Investment")
+investment
+ICBC Austria Bank GmbH
+100
+100
+100
+EUR200 million
+EUR200 million
+USD50.25 million
+Commercial
+banking
+ICBC Wealth Management Co., Ltd.*
+100
+100
+100
+RMB16,000 million
+RMB16,000 million
+Beijing, the PRC
+Wealth
+Management
+*
+These subsidiaries incorporated in Chinese mainland are all limited liability companies.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+London,
+United Kingdom
+Nanjing, the PRC
+100
+RMB12,000 million
+100
+100 MXN1,597 million
+MXN1,597 million
+Mexico City, Mexico
+Mexico S.A.
+ICBC Turkey Bank Anonim Sirketi
+92.84
+92.84
+92.84
+TRY860 million
+USD425 million
+Istanbul, Turkey
+Commercial
+banking
+Commercial
+("ICBC Turkey")
+banking
+ICBC Standard Bank PLC
+("ICBC Standard")
+ICBC Financial Asset Investment Co., Ltd.*
+100
+68
+60
+60
+60
+USD1,083 million
+USD839 million
+100
+RMB12,000 million
+USD50 million
+banking
+80
+100
+IDR3,706,100
+million
+RUB10,810 million
+USD361 million
+Jakarta, Indonesia
+Commercial
+banking
+RUB10,810 million
+Moscow, Russia
+Commercial
+ICBC Financial Leasing Co., Ltd. *
+100
+100
+100
+RMB18,000 million
+RMB11,000 million
+Tianjin, the PRC
+banking
+Leasing
+("ICBC Leasing")
+Industrial and Commercial Bank of China
+89.33
+89.33
+89.33
+MOP589 million
+MOP12,064 million
+(Macau) Limited ("ICBC Macau")
+100
+Zhejiang Pinghu ICBC Rural Bank
+100
+98.61
+530,300
+217,446
+Fund
+89,151
+223,703
+Balance at 31 December 2020
+(4,052)
+(2,542)
+(630)
+(880)
+Co., Ltd. *
+Industrial and Commercial Bank of China
+(Europe) S.A.
+100
+10
+100
+10
+100
+EUR437 million
+EUR437 million
+Luxembourg
+management
+Commercial
+banking
+PT. Bank ICBC Indonesia ("ICBC Indonesia")
+98.61
+98.61
+Bank ICBC (Joint stock company)
+100
+60
+60
+(Canada)
+banking
+Industrial and Commercial Bank of China
+100
+100
+100
+MYR833 million
+MYR833 million
+(Malaysia) Berhad
+Industrial and Commercial Bank of China
+97.86
+97.86
+97.98 THB20,132 million
+THB23,711 million
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+Commercial
+banking
+Commercial
+(Thai) Public Company Limited
+banking
+("ICBC Thai")
+Industrial and Commercial Bank of China
+Financial Services LLC
+100
+10
+100
+Commercial
+60
+Toronto, Canada
+CAD208 million
+60
+60
+RMB200 million
+RMB120 million
+Co., Ltd. *
+Chongqing Bishan ICBC Rural Bank
+100
+100
+00
+100
+RMB100 million
+RMB100 million
+Macau, the PRC
+Zhejiang, the PRC
+Chongqing, the PRC
+Commercial
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+Commercial
+banking
+Commercial
+Co., Ltd. *
+banking
+Industrial and Commercial Bank of China
+80
+80
+80
+80
+CAD218.66 million
+208
+Accrued interest
+Accrued interest
+Assets
+Line items in the statement
+of hedged items
+Accumulated adjustments to the fair value
+Carrying amount of
+hedged items
+31 December 2020
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Other movements
+4,977
+4,977
+previously written off
+Recoveries of loans and advances
+171,201
+(120,324)
+(120,317)
+Write-offs and transfer out
+95,941
+78,244
+(2,984)
+(Reverse)/charge
+58,592
+(53,754)
+(4,838)
+― to stage 3
+Liabilities
+(2,398)
+Assets
+58,827
+Liabilities
+Assets
+Liabilities
+Assets
+of hedged items
+Accumulated adjustments to the fair value
+Carrying amount of
+hedged items
+31 December 2019
+(169)
+68
+8,536
+(15,090)
+77,551
+66
+166
+(10,028)
+13,289
+Others
+1,462
+5,435
+Loans
+of financial position
+Liabilities
+(237)
+6,908
+(5,062)
+Bonds
+Bonds
+9,311
+to stage 2
+11
+9
+6,314
+417,668
+11,078
+403,205
+15,896,134
+17,718,122
+(478,498)
+(530,300)
+16,374,632
+18,248,422
+43,720
+42,311
+4,206
+3,091
+6,383,624
+7,115,279
+155,013
+173,757
+9,788,069
+10,913,984
+9,943,082
+11,087,741
+31 December
+2019
+2020
+31 December
+414,292
+(6,913)
+423,993
+Loans
+(1,495)
+(22,507)
+24,002
+478,498
+184,688
+78,494
+Total
+Stage 3
+Stage 2
+Stage 1
+215,316
+to stage 1
+_
+Balance at 1 January 2020
+Transfer:
+(a) Movements of allowance for impairment losses of loans and advances to customers
+measured at amortised cost are as follows:
+Movements of the allowance for impairment losses on loans and advances to customers are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+201
+Annual Report 2020
+As at 31 December 2020, the Group's allowance for impairment losses on loans and advances to customers measured at
+FVOCI was RMB861 million, see Note 23(b) (31 December 2019: RMB232 million).
+6,425
+16,326,552
+6,425
+3,914
+3,914
+18,136,328
+-
+ICBC
+42,646
+943
+Cash advanced as collateral on
+securities borrowing
+Reverse repurchase agreements-securities
+Measured at FVTPL:
+685,529
+584,676
+(94)
+(117)
+Less: Allowance for impairment losses
+137
+69
+Stage 1
+376,237
+398,535
+Reverse repurchase agreements-securities
+309,249
+186,189
+Reverse repurchase agreements-bills
+31 December
+2019
+31 December
+2020
+Measured at amortised cost:
+Reverse repurchase agreements comprise reverse repurchases of bills, securities and cash advanced as collateral on securities
+borrowing.
+22. REVERSE REPURCHASE AGREEMENTS
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional). The credit risk-weighted assets of the Group's derivative financial instruments
+include counterparty credit default risk-weighted assets, credit value adjustment risk-weighted assets and central
+counterparties credit risk-weighted assets.
+168,955
+198,464
+126,192
+3,060
+120,357
+39,300
+Discounted bills
+― Loans
+Corporate loans and advances
+Measured at FVOCI:
+Less: Allowance for impairment losses of loans and advances to customers
+measured at amortised cost (note 23(a))
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Accrued interest
+Discounted bills
+Personal loans
+- Finance lease
+- Loans
+Corporate loans and advances
+Measured at amortised cost:
+23. LOANS AND ADVANCES TO CUSTOMERS
+ICBC
+200
+As part of the reverse repurchase agreements, the Group has received securities that is allowed to sell or repledge in
+the absence of default by their owners. As at 31 December 2020, the Group had received securities with a fair value
+of approximately RMB184,324 million on such terms (31 December 2019: RMB156,529 million). Of these, securities
+with a fair value of approximately RMB119,984 million have been repledged under repurchase agreements (31
+December 2019: RMB125,320 million). The Group has an obligation to return the securities to its counterparties. If the
+collateral received declines in value, the Group may, in certain circumstances, require additional collateral.
+In accordance with master repurchase agreements and related supplementary agreements, the Group offsets
+reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and
+presents net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the
+financial statement. As at 31 December 2020, reverse repurchase agreements and repurchase agreements which
+meet the criteria for offsetting were RMB203,791 million and RMB218,583 million respectively (31 December
+2019: RMB317,212 million and RMB345,191 million respectively), and the net reverse repurchase agreements and
+net repurchase agreements were RMB116,390 million and RMB131,182 million respectively (31 December 2019:
+RMB119,860 million and RMB147,839 million respectively).
+(ii)
+(i)
+845,186
+739,288
+159,657
+154,612
+28,420
+(120)
+2,351
+48,366
+Financial investments
+measured at FVOCI/
+Line items in the statement
+of financial position
+Financial investments
+financial institutions/
+Repurchase agreements/
+Certificates of deposit
+Reverse repurchase agreements/
+Due to banks and other
+customers
+Loans and advances to
+Debt securities issued
+measured at amortised cost/
+Financial investments
+measured at FVOCI/
+Financial investments
+(11)
+965
+(3,601)
+61,933
+10
+(10)
+(3,481)
+13,962
+Others
+32
+5,325
+Loans
+(11)
+measured at amortised cost/
+34,676
+Debt securities issued
+Loans and advances to
+Reverse repurchase agreements/
+65,927
+71,044
+65,292
+76,703
+131,219
+147,747
+2019
+2020
+31 December
+31 December
+Central counterparties credit risk-weighted assets
+Netting settled credit default risk-weighted assets
+Credit value adjustment risk-weighted assets
+Including: Non-netting settled credit default risk-weighted assets
+Counterparty credit default risk-weighted assets
+The credit risk-weighted assets in respect of the above derivatives of the Group as at the end of the reporting date are as
+follows:
+Counterparty credit risk-weighted assets of derivative financial instruments
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+199
+Annual Report 2020
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+only in limited circumstances. Hedging is undertaken using deposits taken in the same currencies as the functional currencies
+of related branches and subsidiaries which are accounted for as hedges of certain net investment in foreign operations.
+As at 31 December 2020, an accumulated net gain from the hedging instrument of RMB889 million was recognised in
+"Other comprehensive income" on net investment hedges (as at 31 December 2019 net accumulated loss: RMB747 million).
+As at 31 December 2020, there was no ineffectiveness in profit or loss that arises from the net investment hedges (31
+December 2019: Nil).
+Net investment hedges
+Due to banks and other
+financial institutions
+customers
+Stage 2
+Stage 3
+Total
+Listed outside Hong Kong
+Unlisted
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December
+2020
+31 December
+2019
+479,505
+421,919
+169,478
+198,839
+281,215
+306,242
+509,422
+474,271
+Listed in Hong Kong
+19,398
+1,459,018
+1,421,609
+81,970
+55,263
+1,540,988
+1,476,872
+172,667
+163,525
+219,291
+246,091
+1,067,060
+1,011,993
+1,459,018
+1,421,609
+20,338
+2,385
+Equity investments:
+Listed in Hong Kong
+Unlisted
+71,113
+65,561
+93,728
+80,619
+Funds and other investments:
+Listed in Hong Kong
+3,349
+Listed outside Hong Kong
+1,226
+472
+Unlisted
+220,368
+522,730
+Listed outside Hong Kong
+Unlisted
+224,943
+784,483
+962,078
+204
+ICBC
+(b) Financial investments measured at FVOCI
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Accrued interest
+Equity investments (i)
+Analysed into:
+Debt securities:
+523,202
+8,569
+831
+71,016
+240
+2,468
+Annual Report 2020
+205
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Balance at 1 January 2019
+Transfer:
+to stage 1
+― to stage 2
+― to stage 3
+Charge/(reverse)
+Other movements
+22
+Balance at 31 December 2019
+Stage 2
+Stage 3
+Total
+32
+92
+196
+1,910
+(1)
+151
+6
+1,778
+1
+(13)
+80
+NII
+Stage 1
+1,622
+2,206
+Balance at 31 December 2020
+(60)
+54,432
+81,970
+55,263
+1,540,988
+1,476,872
+(i)
+The Group designates part of non-trading equity investments as financial investments measured at FVOCI. During
+the year, dividend income recognised for such equity investments was RMB2,355 million (2019: RMB978 million) and
+the dividend income for the termination of such equity investments during the year was RMB133 million (2019: Nil).
+The value of the Group disposal of such equity investments was RMB2,247 million (2019: RMB112 million) and the
+cumulative gain of transferring into retained earnings from other comprehensive income after disposal was RMB221
+million during the year (2019: the cumulative gain was RMB20 million).
+Movements of the allowance for impairment losses on financial investments measured at FVOCI are as follows:
+Balance at 1 January 2020
+Stage 1
+1,778
+Stage 2
+80
+Stage 3
+198
+Total
+2,056
+Transfer:
+to stage 1
+(6)
+(54)
+Other movements
+472
+48
+18
+8,481
+406
+to stage 3
+2
+(2)
+(78)
+78
+to stage 2
+Charge
+138
+20,122
+6,577
+2019
+962,078
+1,540,988
+1,476,872
+6,265,668
+5,208,167
+8,591,139
+7,647,117
+(a) Financial investments measured at FVTPL
+31 December
+2020
+Financial investments held for trading
+Debt securities (analysed by type of issuers):
+Governments and central banks
+31 December
+2019
+73,219
+31 December
+52,016
+14,794
+5,157
+Banks and other financial institutions
+56,114
+28,578
+Corporate entities
+102,630
+67,886
+246,757
+153,637
+Equity investments
+10,497
+10,121
+257,254
+Policy banks
+163,758
+31 December
+2020
+784,483
+Financial investments measured at amortised cost
+(0)
+861
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Balance at 1 January 2019
+Stage 1
+198
+Stage 2
+0
+Stage 3
+248
+Total
+446
+Transfer:
+to stage 1
+― to stage 2
+(5)
+09
+to stage 3
+Other movements
+34
+Balance at 31 December 2019
+(0)
+227
+15501
+5 --
+5
+(248)
+(214)
+(0)
+5
+232
+24. FINANCIAL INVESTMENTS
+Financial investments measured at FVTPL
+Financial investments measured at FVOCI
+Charge/(reverse)
+Financial investments designated as at FVTPL
+Debt securities (analysed by type of issuers):
+Governments and central banks
+7,020
+188,144
+115,943
+1,827
+5,160
+201,053
+128,123
+83,231
+70,498
+70,167
+60,167
+354,451
+258,788
+784,483
+11,082
+962,078
+Listed in Hong Kong
+2,802
+4,387
+Listed outside Hong Kong
+30,847
+12,373
+Unlisted
+432,163
+341,497
+465,812
+358,257
+Equity investments:
+Listed in Hong Kong
+2,493
+Debt securities:
+2019
+31 December
+2020
+12,858
+8,493
+Policy banks
+1,755
+29,267
+Banks and other financial institutions
+Corporate entities
+Funds and other investments
+3,370
+34,585
+19
+4,152
+18,002
+76,497
+154,776
+463,035
+172,778
+31 December
+Analysed into:
+Funds and other investments
+Equity investments
+Corporate entities
+Banks and other financial institutions
+Listed outside Hong Kong
+Policy banks
+Financial investments measured at FVTPL (mandatory)
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+203
+Annual Report 2020
+539,532
+Debt securities (analysed by type of issuers):
+650
+2
+198
+and operations
+Place of
+incorporation/
+registration
+Principal
+activities
+Hong Kong, the PRC
+Commercial
+banking
+100
+100
+HKD4,882 million
+HKD4,882 million
+Hong Kong, the PRC
+Investment
+100
+80
+Amount
+invested
+by the Bank
+HKD54,738 million
+100
+KZT8,933 million
+Almaty, Kazakhstan
+(Almaty) Joint Stock Company
+ICBC (London) PLC ("ICBC London")
+100
+80
+100
+100
+USD200 million
+USD200 million
+London,
+banking
+Commercial
+banking
+Commercial
+ICBC Credit Suisse Asset Management
+80
+KZT8,933 million
+80
+2020
+HKD44,188 million
+100
+2,712
+2,712
+144,671
+142,608
+147,383
+145,320
+Annual Report 2020
+207
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Nominal value of
+issued share/
+paid-in capital
+Percentage of equity interest % Voting rights %
+100
+Name
+-
+ICBC International Holdings Limited
+100
+("ICBC International")
+Industrial and Commercial Bank of China
+100
+2888
+31 December
+2020
+100
+31 December
+31 December
+2019
+2020
+Industrial and Commercial Bank of China
+80
+RMB200 million
+RMB433 million
+3,302
+previously written off
+Recoveries of loans and advances
+(97,653)
+(97,562)
+(91)
+Write-offs and transfer out
+162,322
+86,944
+28,014
+47,364
+Charge
+29,714
+(28,755)
+3,302
+(959)
+(5,907)
+12,775
+(6,868)
+― to stage 2
+(2,464)
+(14,987)
+17,451
+to stage 1
+Transfer:
+412,731
+173,241
+81,406
+158,084
+Balance at 1 January 2019
+― to stage 3
+Other movements
+244
+132
+United Kingdom
+Beijing, the PRC
+banking
+645
+ICBC
+202
+211
+Balance at 31 December 2020
+(0)
+Other movements
+(16)
+(Reverse)/charge
+― to stage 3
+― to stage 2
+232
+5
+227
+Total
+(2,580)
+(2,204)
+Balance at 31 December 2019
+215,316
+78,494
+184,688
+2019
+478,498
+Balance at 1 January 2020
+Transfer:
+to stage 1
+Stage 1
+Stage 2
+Stage 3
+(b) Movements of the allowance for impairment losses on loans and advances to customers
+measured at FVOCI are as follows:
+8
+2020
+31 December
+40,861
+198
+36,809
+6,270,741
+Less: Allowance for impairment losses
+(5,073)
+6,265,668
+5,211,888
+(3,721)
+5,208,167
+Analysed into:
+Debt securities:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+42,226
+79,031
+6,106,393
+41,955
+36,611
+77,062
+6,227,650
+5,172,805
+Other investments:
+Unlisted
+38,018
+35,362
+38,018
+35,362
+6,265,668
+5,208,167
+Market value of listed securities
+123,820
+120,952
+206
+5,053,788
+ICBC
+40,699
+162
+Other investments (iii)
+2,056
+Allowance for impairment losses on financial investments measured at FVOCI is recognised in other comprehensive income
+without decreasing the carrying amount of financial investments presented in the statement of financial position, and any
+impairment loss or gain is recognised in the profit or loss. The allowance for impairment losses of credit-impaired financial
+investments measured at FVOCI as at 31 December 2020 was RMB240 million (31 December 2019: RMB198 million).
+(c) Financial investments measured at amortised cost
+31 December
+2020
+31 December
+2019
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Including: Special government bond (i)
+Policy banks
+Banks and other financial institutions
+Including: Huarong bonds (ii)
+Corporate entities
+Accrued interest
+Accrued interest
+5,205,346
+85,000
+85,000
+528,587
+412,287
+370,300
+340,708
+90,309
+90,309
+46,759
+44,145
+78,888
+69,483
+6,229,880
+5,175,079
+4,308,456
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Movements of the allowance for impairment losses on financial investments measured at amortised cost are as follows:
+854
+125
+2,483
+Transfer:
+to stage 1
+1
+(1)
+to stage 2
+to stage 3
+Charge
+Other movements
+Balance at 31 December 2019
+695
+486
+1,504
+55
+| | | |│N
+1,181
+1,339
+2
+127
+3,721
+57
+(i)
+(ii)
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the Ministry of Finance of the People's Republic of China (the "MOF") to the Bank in 1998. The bond will mature in
+2028 and bears interest at a fixed rate of 2.25% per annum.
+The Huarong bonds are a series of long-term bonds issued by China Huarong Asset Management Co., Ltd.
+("Huarong") in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The
+proceeds from the issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are
+non-negotiable, with a tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank
+received a notice from the MOF that the maturity dates of the Huarong bonds were extended for ten years. After the
+extension expired, the Bank received another ten-year-extension notice to 12 December 2031. The MOF will continue
+providing funding in support of the repayment of the principal and interest of the bonds. In 2020, the Bank received a
+notice from the MOF to adjust the interest rate of the Huarong bonds from 1 January 2020, which will be determined
+on yearly basis with reference to the average level of five-year government bond yield in the previous year. As at 31
+December 2020, the Bank received accumulated early repayments amounting to RMB222,687 million.
+(iii) Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from January 2021 to November 2032 and bear interest rates ranging from 4.32% to
+6.73% per annum.
+25. INVESTMENTS IN SUBSIDIARIES
+Listed investments, at cost
+Unlisted investments, at cost
+2,255
+Balance at 1 January 2019
+Total
+Stage 3
+Balance at 1 January 2020
+Stage 1
+2,255
+Stage 2
+1,339
+Stage 3
+127
+Total
+3,721
+Transfer:
+to stage 1
+3
+(3)
+to stage 2
+(19)
+19
+to stage 3
+Charge/(reverse)
+16
+1,572
+Stage 2
+Stage 1
+5,073
+121
+2,718
+2,234
+31 December
+Balance at 31 December 2020
+(5)
+(209)
+(21)
+Other movements
+1,587
+(1)
+(235)
+(Asia) Limited ("ICBC Asia")
+Measured at FVTPL:
+Corporate loans and advances
+(714)
+2019
+31 December
+Recognised in
+equity
+Recognised in
+profit or loss
+2019
+1 January
+Deferred income tax assets:
+2,881
+(208)
+1,216
+1,873
+860
+-
+Allowance for impairment losses
+52,438
+10,450
+62,888
+6,290
+(218)
+6,508
+Accrued staff costs
+(5,781)
+(1,962)
+445
+(3,819)
+Change in fair value of financial instruments
+(851)
+(998)
+147
+measured at FVTPL
+Change in fair value of financial instruments
+measured at FVOCI
+415
+Others
+1,149
+Recognised in
+Recognised in
+1 January
+Deferred income tax liabilities:
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+31 December
+213
+67,713
+257
+4,920
+62,536
+(1,122)
+(107)
+Annual Report 2020
+Others
+2020
+equity
+(208)
+1,357
+measured at FVOCI
+Change in fair value of financial instruments
+1,809
+1,173
+profit or loss
+636
+Change in fair value of financial instruments
+(937)
+(402)
+(535)
+Allowance for impairment losses
+2020
+measured at FVTPL
+3,101
+(3,173)
+62
+29. OTHER ASSETS
+Precious metals
+Settlement accounts
+Right-of-use assets (i)
+Land use rights
+Repossessed assets
+Goodwill (ii)
+Advance payments
+Interest receivable
+Others
+Less: Allowance for impairment losses
+(i) Right-of-use assets
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December
+31 December
+2020
+8,878
+9,517
+8,945
+10,917
+7,357
+16,842
+ICBC
+16,225
+34,068
+136,788
+349,590
+239,209
+278,429
+2019
+33,658
+214
+The Group did not have significant unrecognised deferred income tax assets and liabilities at the end of the reporting period.
+1,873
+(401)
+2019
+equity
+31 December
+Recognised in
+Recognised in
+profit or loss
+(134)
+2019
+Deferred income tax liabilities:
+62,536
+(1,900)
+6,061
+58,375
+(10)
+1 January
+6,628
+(535)
+Change in fair value of financial instruments
+457
+199
+1,217
+1,357
+415
+(160)
+575
+Allowance for impairment losses
+Others
+900
+Change in fair value of financial instruments
+measured at FVOCI
+636
+493
+143
+measured at FVTPL
+457
+338
+(1,005)
+(10)
+Others
+differences
+(liabilities)
+Allowance for impairment losses
+281,442
+70,094
+252,387
+62,888
+Change in fair value of financial instruments
+measured at FVTPL
+(9,858)
+(2,470)
+(3,437)
+(851)
+Change in fair value of financial instruments
+measured at FVOCI
+(21,224)
+(5,417)
+67,713
+271,766
+(10)
+(209)
+(1,122)
+(5,106)
+(liabilities)
+Others
+25,162
+6,628
+26,512
+Accrued staff costs
+(5,781)
+(22,954)
+6,290
+differences
+assets/
+Deferred
+income tax
+As at 31 December 2020, the process of obtaining the legal titles for the Group's properties and buildings with an aggregate
+carrying amount of RMB11,203 million (31 December 2019: RMB12,316 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+95,655
+97,485
+1,227
+1,778
+34
+As at 31 December 2020, the carrying amount of aircraft and vessels leased out by the Group under operating leases was
+RMB133,211 million (31 December 2019: RMB134,140 million).
+87
+1,691
+Held in the PRC (other than Hong Kong)
+Held overseas
+Short-term leases (less than 10 years):
+72,387
+77,333
+1,023
+1,193
+250,949
+As at 31 December 2020, the carrying amount of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB77,858 million (31 December 2019: RMB76,007 million).
+ICBC
+(taxable)
+temporary
+31 December 2019
+assets/
+temporary
+Deductible/
+Deferred
+income tax
+212
+(taxable)
+31 December 2020
+Deferred income tax assets:
+(a) Analysed by nature
+28. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Deductible/
+7,715
+62,536
+31 December 2020
+1,652
+415
+12,251
+2,881
+8,486
+1,873
+(b) Movements of deferred income tax
+Deferred income tax assets:
+1 January
+2020
+Recognised in
+profit or loss
+Recognised in
+31 December
+equity
+2020
+Allowance for impairment losses
+62,888
+6,290
+Accrued staff costs
+(5,417)
+364
+(5,781)
+measured at FVOCI
+860
+Change in fair value of financial instruments
+(1,619)
+(851)
+measured at FVTPL
+Change in fair value of financial instruments
+70,094
+7,206
+(2,470)
+3,465
+Others
+1,357
+(assets)
+differences
+liabilities/
+temporary
+liabilities/
+temporary
+differences
+Deferred
+income tax
+(deductible)
+income tax
+(deductible)
+Taxable/
+Taxable/
+Deferred
+31 December 2019
+Deferred income tax liabilities:
+(assets)
+(3,273)
+5,560
+1,149
+4,823
+measured at FVOCI
+Change in fair value of financial instruments
+636
+Allowance for impairment losses
+2,544
+7,236
+measured at FVTPL
+Change in fair value of financial instruments
+(535)
+(1,270)
+(937)
+1,809
+1,985
+2,233
+28,858
+132,600
+1,775
+2,874
+2,315,643
+1,776,320
+Money market takings:
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+159,590
+153,903
+304,413
+329,375
+4,613
+6,975
+468,616
+2,784,259
+490,253
+2,266,573
+32. REPURCHASE AGREEMENTS
+8,980
+184
+263,273
+10,924
+190
+293,434
+229,857
+274,446
+24,252
+7,874
+134,346
+2019
+31 December 31 December
+Accrued interest
+Cash received as collateral on securities lending
+Repurchase agreements-securities
+Repurchase agreements-bills
+Repurchase agreements comprise repurchases of bills, securities and cash received as collateral on securities lending.
+2020
+1,640,846
+2,179,522
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+13,064
+11,574
+60,454
+60,704
+19,580
+4,889
+10,771
+31 December
+2019
+31 December
+(2)
+Others
+Interbank wealth management products
+Financial liabilities related to precious metals
+Debt securities
+30. FINANCIAL LIABILITIES DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS
+Due to the impact of the Covid-19 epidemic, the key assumptions used to estimate the present value of expected future cash
+flows of individual oversea institution business of the Group have changed. As at 31 December 2020, as indicated by the
+impairment test, the Group charged provision for goodwill whose carrying amount exceeds its recoverable amount.
+2020
+33. CERTIFICATES OF DEPOSIT
+9,144
+102,242
+Deposits:
+2019
+31 December
+31 December
+2020
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+87,938
+Notes to the Financial Statements
+216
+There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value of
+the financial liabilities arising from changes in credit risk were not considered significant during the year of 2020 and the
+year of 2019. The changes in fair value of the financial liabilities were mainly attributable to changes in other market factors.
+Financial liabilities related to precious metals and issued debt securities have been matched with precious metals
+or derivative as part of a documented risk management strategy to mitigate market risk, such as interest rate risk.
+An accounting mismatch would arise if these financial liabilities were accounted at amortised cost, whereas the
+related precious metals or derivative were measured at fair value with movements in the fair value taken through
+the statement of profit or loss. By designating these financial liabilities at FVTPL, the movement in their fair values
+is recorded in the statement of profit or loss. As at 31 December 2020, the difference between the fair value of
+the financial liabilities related to precious metals and issued debt securities and the amount that the Group would
+be contractually required to pay to the holders of the financial liabilities related to precious metals and issued debt
+securities upon maturity was not significant.
+The principal-guaranteed interbank wealth management products issued by the Group and the financial assets in
+which the aforesaid products form parts of a group of financial instruments that are managed together on a fair
+value basis, and are classified as financial liabilities and financial assets designated as at FVTPL, respectively. As at 31
+December 2020, the fair value of the interbank wealth management products was approximately the same as the
+amount that the Group would be contractually required to pay to the holders of the wealth management products
+upon maturity (31 December 2019: approximately the same).
+(2)
+(1)
+ICBC
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash flow
+projections are based on financial forecasts approved by management of the subsidiaries. The average growth rates are
+projected based on the similar rates which do not exceed the long-term average growth rate for the business in which the
+CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+Certificates of deposit issued by New York Branch, Dubai (DIFC) Branch, Riyadh Branch, London Branch, Macau Branch,
+Singapore Branch, Tokyo Branch, Seoul Branch, Luxembourg Branch, Doha Branch, Sydney Branch, ICBC Macau, ICBC New
+Zealand and ICBC Asia were recognised at amortised cost.
+217
+Tier 2 Capital Notes issued by
+(1)
+The Bank
+419,032
+336,063
+Subsidiaries
+Accrued interest
+4,285
+8,082
+6,747
+6,059
+430,064
+350,204
+Other debt securities issued by
+(2)
+The Bank
+Subsidiaries
+ICBC
+218
+As at 31 December 2020, the amount of debt securities issued due within one year was RMB120,429 million (31 December
+2019: RMB117,233 million).
+742,875
+798,127
+392,671
+31 December
+2019
+368,063
+1,669
+138,876
+134,038
+251,849
+232,356
+Accrued interest
+1,946
+31 December
+2020
+22,977,655
+25,134,726
+31 December
+2020
+Subordinated bonds and
+35. DEBT SECURITIES ISSUED
+Accrued interest
+Others
+Personal customers
+31 December
+Corporate customers
+Personal customers
+Corporate customers
+Demand deposits:
+34. DUE TO CUSTOMERS
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Time deposits:
+Annual Report 2020
+2019
+6,732,558
+236,797
+267,941
+234,852
+261,389
+11,445,358
+11,953,629
+7,455,160
+6,149,654
+5,295,704
+5,489,700
+11,060,648
+12,651,767
+4,328,090
+5,196,607
+6,463,929
+1,380
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+8,586
+9,317
+1,357
+93
+10,767
+Disposals
+(1,251)
+(1,341)
+(775)
+(3,367)
+At 31 December 2020
+30,529
+16,550
+946
+48,025
+Accumulated depreciation:
+At 1 January 2019
+480
+6,967
+104
+1,143
+5,720
+At 31 December 2019 and 1 January 2020
+(29)
+Additions
+(55)
+6,571
+104
+692
+5,775
+Depreciation charge for the year
+480
+Disposals
+40,625
+1,628
+16,534
+Total
+vehicles
+and vessels
+equipment
+and motor
+Leased
+aircraft
+Leased
+properties
+and buildings
+Cost:
+Leased office
+729,258
+(4,994)
+(5,077)
+485,393
+734,335
+28,514
+480,399
+Depreciation charge for the year
+At 1 January 2019
+13,986
+22,463
+At 31 December 2019 and 1 January 2020
+(1,593)
+(10)
+(741)
+(842)
+16,827
+Disposals
+1,567
+3,289
+6,478
+Additions
+30,884
+71
+11,334
+9,517
+7,089
+91
+At 31 December 2020
+16,719
+15,218
+1,524
+33,461
+18,392
+14,549
+811
+33,752
+Annual Report 2020
+215
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(ii) Goodwill
+Goodwill of the Group are analysed as follows:
+At 1 January
+Adjustment upon exchange rate
+(359)
+9,517
+8,945
+218
+(572)
+9,299
+At 31 December 2019
+9,517
+2020
+31 December
+31 December
+Net carrying amount
+Less: Allowance for impairment losses
+Subtotal
+2019
+Carrying amount:
+316
+119
+Impairment charge for the year
+108
+At 1 January 2019
+Impairment:
+13,957
+135
+24
+1,727
+At 31 December 2020
+(813)
+(60)
+(39)
+Disposals
+7,803
+12,095
+623
+70
+(5)
+197
+(5)
+274
+42
+At 31 December 2020
+101
+Disposals
+18
+94
+108
+| | | |
+173
+24
+At 31 December 2019 and 1 January 2020
+Impairment charge for the year
+Held overseas
+(84)
+158
+Decrease
+income
+recognised
+under equity
+Declared
+Balance of
+provision for
+Other
+distribution of
+comprehensive
+cash dividends
+Increase
+Balance
+at the end
+of the year
+in capital
+in capital
+method
+income
+or profits
+Others
+of the year
+impairment
+at the end
+of the year
+at the beginning
+Balance
+81,530
+88,041
+Group's effective interest
+20.06%
+20.06%
+Group's share of net assets of the associate
+16,355
+17,661
+Name of
+investee
+Goodwill
+10,457
+Carrying amount of the Group's interest in Standard Bank
+in the consolidated financial statements
+25,763
+28,118
+(b) Movements of associates and joint ventures investments of the Group are as follows:
+Movements during the year
+Investment
+9,408
+Gross amounts of net assets of the associate attribute to the parent company
+Joint ventures
+126
+120
+1
+(20)
+(134)
+14,361
+Subtotal
+30,951
+11,564
+(348)
+3
+9
+(890)
+(2,661)
+40,124
+(348)
+Total
+32,838
+11,690
+1,154
+1,887
+25,763
+O
+(627)
+150
+150
+(0)
+(91)
+(15)
+1,430
+Associates
+(2,527)
+Standard Bank
+Others
+2,833
+11,564
+(3)
+13
+1,034
+8
+(870)
+28,118
+(630)
+Reconciled to the Group's interests in the associate
+5,459
+22,345
+9,444
+10,493
+41,554
+32,838
+(348)
+(348)
+41,206
+32,110
+32,490
+Standard Bank Group Limited ("Standard Bank") (i)
+Others
+(i) Financial information of the Group's material associates and joint ventures:
+*
+31 December
+31 December
+2020
+2019
+25,415
+(a) Particulars of the Group's associates and joint ventures are as follows:
+27,770
+2019
+31 December
+2020
+458
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Investments in associates and joint ventures comprise the following:
+Interest in associates
+Interest in joint ventures
+Share of net assets
+Goodwill
+31 December
+Less: Allowance for impairment losses
+31 December
+2020
+2019
+39,776
+30,603
+1,430
+41,206
+1,887
+32,490
+31 December
+12,652
+15,791
+41,206
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(ii) Particulars of the Group's only material associate are as follows:
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts using the equity method in the Group's consolidated financial statements is as follows:
+2020
+2019
+Gross amounts of the associate
+209
+Assets
+1,129,310
+1,127,659
+1,033,331
+1,023,850
+Net assets
+95,979
+103,809
+Profit from continuing operations
+Liabilities
+4,720
+Annual Report 2020
+banking
+32,490
+Name
+Percentage of
+equity interest %
+Voting
+rights %
+Associate directly held by the Bank
+Standard Bank*
+31 December 31 December
+2020
+20.06
+31 December
+2019
+20.06
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the Group
+to widen its customer base in Africa.
+2020
+Principal
+activities
+Issued
+capital
+20.06
+Johannesburg,
+Commercial
+ZAR162 million
+Republic of
+South Africa
+Place of
+registration
+1,304
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+(981)
+6,099
+907
+6,683
+5,554
+19,243
+Impairment charge for the year
+3,691
+3,691
+Depreciation charge for the year
+Disposals
+(104)
+(6,960)
+(4,084)
+(12,127)
+At 31 December 2020
+70,824
+38
+9
+(979)
+61,514
+168,317
+61,791
+6,618
+6,368
+19,658
+Impairment charge for the year
+3,384
+3,384
+Disposals
+(795)
+30,801
+(3)
+(4,187)
+(1,854)
+(6,886)
+At 31 December 2019 and
+1 January 2020
+65,704
+38
+9,983
+(47)
+874
+35,962
+Carrying amount:
+Held in Hong Kong
+Held overseas
+31 December
+2020
+31 December
+2019
+17,671
+21,280
+350
+Held in the PRC (other than Hong Kong)
+231
+530
+18,374
+22,041
+Medium-term leases (10 to 50 years):
+Held in the PRC (other than Hong Kong)
+75,795
+70,906
+Held in Hong Kong
+353
+179,124
+Long-term leases (over 50 years):
+(In RMB millions, unless otherwise stated)
+At 31 December 2019
+95,655
+39,714
+1,945
+15,107
+134,140
+286,561
+At 31 December 2020
+The carrying value of the Group's properties and buildings is analysed based on the remaining terms of the land leases as
+follows:
+97,485
+2,039
+18,371
+133,211
+286,279
+Annual Report 2020
+211
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+35,173
+5,798
+10,786
+152,161
+74,860
+160,821
+432,902
+Additions
+2,430
+14,997
+1,453
+6,155
+10,954
+14,837
+CIP transfer in/out)
+8,962
+(9,918)
+116
+840
+Disposals
+(1,178)
+(449)
+39,872
+(479)
+35,122
+At 1 January 2019
+(2,676)
+41,554
+Depreciation charge for the year
+210
+ICBC
+27. PROPERTY AND EQUIPMENT
+Properties and
+buildings
+Notes to the Financial Statements
+151,145
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Construction
+in progress
+Leasehold
+improvements
+and motor
+vehicles
+Aircraft and
+vessels
+Total
+Cost:
+Office
+equipment
+(4,233)
+(348)
+(17,896)
+(211)
+(7,163)
+(15,469)
+(25,221)
+At 31 December 2020
+168,309
+35,211
+12,825
+(301)
+79,885
+465,403
+Accumulated depreciation and impairment:
+At 1 January 2019
+60,701
+41
+59,360
+22,903
+(11,557)
+169,173
+(2,077)
+9,156
+8,573
+Disposals
+161,359
+1 January 2020
+At 31 December 2019 and
+39,752
+11,928
+76,898
+454,878
+Additions
+164,941
+12,277
+138
+(16,517)
+1,221
+CIP transfer in/out)
+7,806
+11,128
+10,012
+1,108
+35,746
+(i) Overseas preference shares
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+a.
+Dividend
+Fixed rate for a certain period (7 years for EUR tranche and 5 years for USD tranche) after issuance.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Dividends will be paid annually.
+Order of distribution and liquidation method
+Conditions to distribution of dividends
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The
+Group may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+C.
+Dividend stopper
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+d.
+The EUR and USD Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for payment.
+The Preference Shareholders will be subordinated to the depositors, ordinary creditors and holders of convertible bonds,
+holders of subordinated debt, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group,
+but will be senior to the ordinary shareholders of the Group.
+Annual Report 2020
+b.
+(b) Main Clauses
+Mandatory
+Carrying amount
+Equity
+4.20% 100RMB/Share
+223
+50
+450
+45,000
+45,000
+None
+139,156
+Mandatory No
+70,000
+70,000 None
+No
+Total
+1,335
+139,274
+Less: Issue fees
+118
+700
+Notes to the Financial Statements
+a.
+(In RMB millions, unless otherwise stated)
+Dividends will be paid annually.
+224
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+b.
+Conditions to distribution of dividends
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+C.
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+d.
+Order of distribution and liquidation method
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors and holders of convertible bonds, holders
+of subordinated debt, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will
+be senior to the ordinary shareholders of the Group.
+e.
+Mandatory conversion trigger events
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to A
+shares, they may not be converted to Preference Shares again.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were
+converted to A shares, they may not be converted to Preference Shares again.
+Dividend stopper
+Financial Statements for the year ended 31 December 2020
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Dividend
+e.
+Mandatory conversion trigger events
+EUR Preference Shares:
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to H
+shares, they may not be converted to Preference Shares again.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into H shares. If Preference Shares were
+converted to H shares, they may not be converted to Preference Shares again.
+USD Preference Shares:
+Upon the occurrence of any Non-Viability Trigger Event, the Group shall have the right to irrevocably and compulsorily
+convert all or part of the Preference Shares into H shares under the consent of the CBIRC but without the need for the
+consent of the Preference Shareholders or the Ordinary Shareholders. If Preference Shares were converted to H shares, they
+may not be converted to Preference Shares again.
+The initial mandatory conversion price of EUR Preference Shares is 0.4793 Euro; the initial conversion price of USD
+Preference Shares is HKD5.73 per H Share. In case of stock dividends distribution of H shares of the Bank or other
+circumstances, the Bank will make cumulative adjustment to the compulsory conversion price in turn.
+Fixed rate for a certain period (5 years) after issuance.
+f.
+Under the premise of obtaining the approval of the CBIRC and condition of redemption, the Group has right to redeem all
+or some of the Overseas Preference Shares in first call date and subsequent any dividend payment date. Redemption price is
+equal to liquidation price plus accrued dividend in current period.
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+USD Preference Shares: the First Redemption Date is five years after issuance
+g.
+Dividend setting mechanism
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Group shall distribute dividends for the Preference Shares in cash, based on the liquidation preference of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(ii) Domestic preference shares
+Redemption
+4.58% 100RMB/Share
+6,515
+2015-11-18
+2019-09-19
+Nominal
+value
+of shares
+(millions)
+Nominal
+value
+(millions)
+86,795
+86,795
+86,795
+86,795
+269,612
+269,612
+269,612
+269,612
+356,407
+356,407
+356,407
+356,407
+of shares
+31 December 2019
+Number
+Number
+31 December 2020
+7,402
+Among them, the initial mandatory conversion price of domestic preference shares in 2015 was RMB3.44 and the initial
+mandatory conversion price of domestic preference shares in 2019 was RMB5.43. In case of stock dividends distribution of A
+Shares of the bank or other circumstances, the bank will make cumulative adjustment to the compulsory conversion price in
+turn.
+6,005
+5,658
+4,705
+6,008
+6,213
+6,221
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+8,048
+32,373
+29,825
+29,524
+There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2020 (31
+December 2019: Nil).
+37. SHARE CAPITAL
+Issued and fully paid:
+H shares of RMB1 Yuan each
+A shares of RMB1 Yuan each
+32,492
+222
+ICBC
+Notes to the Financial Statements
+2020-09-23
+Equity
+6.00% 15EUR/Share
+3.58% 20USD/Share
+40
+600
+4,558
+None
+Mandatory No
+USD
+145
+19,716
+None
+Mandatory
+No
+Domestic Preference
+Shares in:
+RMB2015
+RMB2019
+2,900
+Equity
+2014-12-10 Equity
+Shares in:
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+38. OTHER EQUITY INSTRUMENTS
+(1) Preference shares
+(a) Preference shares outstanding at the end of the year
+Amount
+In original
+Financial instrument
+outstanding
+Accounting
+Issue date classification
+EUR
+Dividend
+currency
+rate Issue price
+shares)
+(million)
+In RMB
+(million) Maturity
+Conversion
+condition
+Conversion
+Overseas Preference
+(million
+f.
+(million
+After five years having elapsed since the date of issuance/the date of issue termination under the premise of obtaining the
+approval of the CBIRC and compliance with regulatory requirements, the Group has right to redeem all or some of domestic
+preference shares. The redemption period of preference shares ranges from the start date of redemption to the date of full
+redemption or conversion. Redemption price is equal to book value plus accrued dividend in current period.
+None
+None
+No
+Total
+801
+86,691
+Less: Issue fees
+28
+86,663
+Carrying amount
+Note: USD perpetual bond was issued by ICBC Asia, a subsidiary of the Bank.
+(b) Main Clauses
+(i) USD Perpetual Bond
+On 21 July 2016, ICBC Asia issued Basel III-compliant Non-Cumulative Subordinated Additional Tier 1 Capital Securities
+(hereinafter referred to as "Perpetual Bond") in the aggregate amount of US$1 billion (equivalent to approximately
+RMB6,676 million net of related issuance costs). Fixed rate for the first 5 years after issuance of the bond is 4.25%. If
+perpetual bonds are not called, distribution will be reset based on the then prevailing 5-year USA national bonds yield plus a
+fixed initial spread (3.135 per cent. per annum) every 5 years.
+The distribution shall be payable semi-annually, with the first distribution payment date being 21 January 2017. ICBC
+Asia has the right to cancel distribution payment (subject to the requirement as set out in the terms and conditions of the
+perpetual bond) and the distribution cancelled shall not be cumulative.
+226
+ICBC
+80,000
+80,000
+800
+4.45% 100RMB/Piece
+classification
+USD Perpetual bond
+RMB Perpetual bond
+2016-07-21
+2019-07-26
+Equity
+Interest rate Issue price
+4.25%
+pieces)
+(million)
+Notes to the Financial Statements
+(million) Maturity
+Conversion
+1,000USD/Piece
+1
+1,000
+6,691 None
+None
+No
+Equity
+Conversion
+condition
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+The perpetual bond will be written off up to the amount as directed by the Hong Kong Monetary Authority (hereinafter
+referred to as "HKMA") if the HKMA notifies ICBC Asia that in the opinion of the HKMA or a relevant government body,
+ICBC Asia would become non-viable if there is no written off of the principal. The perpetual bond also contains Hong Kong
+Bail-in Power. Each holder of the perpetual bond shall be subject to the exercise by the Hong Kong Resolution Authority to
+any or a combination of the following:
+(1)
+In original
+instrument
+Amount
+currency
+In RMB
+Amount
+currency
+In RMB
+31 December 2020
+Amount
+In RMB
+outstanding
+(million pieces)
+(million)
+(million)
+(million pieces)
+8,090
+Notes to the Financial Statements
+currency
+Issue date
+Movement during the year
+In original
+(c) Changes in perpetual bond outstanding
+(2)
+(3)
+reduction or cancellation of all or a part of the principal and/or distribution of the perpetual bond;
+the conversion of all or a part of the principal and/or distribution of the perpetual bond into shares of ICBC Asia or
+another person; and/or
+the amendment of the maturity, distribution payment date and/or the distribution amount of the perpetual bond.
+ICBC Asia has a call option to redeem all the outstanding perpetual bond from 21 July 2021 or any subsequent distribution
+payment date thereafter.
+(ii) RMB Perpetual Bond
+With the approvals by relevant regulatory authorities, the Bank issued RMB80.0 billion undated capital bonds (hereinafter
+referred to as "Perpetual Bond") in China's national inter-bank bond market on 26 July 2019. Each Perpetual Bond has a par
+value of RMB100, and the annual coupon rate of the Bonds for the first five years is 4.45%, resetting every 5 years. The rate
+is determined by a benchmark rate plus a fixed spread. The fixed spread is the difference between the distribution rate and
+the benchmark rate as determined at the time of issuance. The fixed spread will not be adjusted once determined during the
+duration period.
+The duration of the Perpetual Bond is the same as the continuing operation of the Bank. 5 years after the issuance date of
+the Perpetual Bond, the Bank shall have the right to redeem the Perpetual Bond in whole or in part on each distribution
+payment date (including the fifth distribution payment date since the issuance). Upon the issuance of the Perpetual Bond,
+in the event that the Perpetual Bond is not classified as other tier-one capital bonds due to unpredictable changes in
+regulations, the Bank shall have the right to redeem the Perpetual Bond fully instead of partly.
+1 January 2020
+The claims in respect of the Perpetual Bond, in the event of a winding-up of the Bank, will be subordinated to claims of
+depositors, general creditors, and subordinated indebtedness that rank senior to the Perpetual Bond; will rank in priority to
+all classes of shares held by the Bank's shareholders and rank pari passu with the claims in respect of any other Additional
+Tier 1 Capital instruments of the Bank that rank pari passu with the perpetual bond.
+The Perpetual Bond is paid by non-cumulative interest. The Bank shall have the right to cancel, in whole or in part,
+distributions on the Perpetual Bond and any such cancellation shall not constitute an event of default. The Bank may, at its
+sole discretion, use the proceeds from the cancelled distributions to meet other obligations as they fall due. However, the
+Bank shall not distribute profits to ordinary shareholders until resumption of full interest payment.
+The funds raised by the Bank from the above-mentioned Perpetual Bond will be approved by applicable laws and regulatory
+agencies to supplement other Tier 1 capital of the Bank.
+Annual Report 2020
+227
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Financial
+In original
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Bank falling to
+5.125% or below), with the consent of the CBIRC and without the consent of the bondholders, the Bank has the right to
+write down all or part of the above Perpetual Bond issued and existing at that time in accordance with the total par value,
+in order to restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%. Upon the occurrence of a Non-
+Viability Trigger Event, the Bank has the right to write down all the above Perpetual Bond issued and existing at that time in
+accordance with the total par value without the consent of the bondholders.
+outstanding
+In RMB
+currency
+Amount
+currency
+In RMB
+Amount
+currency
+In RMB
+(million)
+(million shares)
+In RMB
+(million)
+(million shares)
+(million)
+(million)
+Overseas
+EUR
+40
+600
+4,558
+(million)
+40
+currency
+(million)
+outstanding
+g.
+Dividend setting mechanism
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+Annual Report 2020
+225
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(million shares)
+(In RMB millions, unless otherwise stated)
+(c) Changes in preference shares outstanding
+1 January 2020
+Financial
+In original
+Movements during the year
+In original
+31 December 2020
+In original
+instrument
+Amount
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+Redemption
+600
+USD
+Total
+1,190
+N/A
+119,558
+145
+N/A
+19,716
+1,335
+70,000
+N/A
+Note: The RMB amounts of offshore preference shares in Euro and U.S. dollar on 31 December 2020 are translated at the spot
+exchange rate on issuance date.
+(2) Perpetual Bond
+(a) Perpetual bond outstanding at the end of the year
+Financial
+Amount
+In original
+instrument
+Accounting
+139,274
+4,558
+70,000
+45,000
+145
+2,900
+19,716
+145
+2,900
+19,716
+Domestic
+RMB2015
+700
+450
+45,000
+450
+RMB2019
+700
+70,000
+70,000
+5580
+45,000
+45,000
+2019
+(i)
+31 December
+26/04/2034
+26/04/2019
+4.69%
+10,000
+10,000
+100 Yuan
+24/04/2019
+19 ICBC 04 Bond
+(viii)
+28/04/2019
+26/04/2029
+26/04/2019
+4.40%
+45,000
+45,000
+100 Yuan
+24/04/2019
+28/04/2019
+(ix)
+20 ICBC 01 Bond
+22/09/2020
+(xi)
+17/11/2020
+16/11/2030
+16/11/2020
+4.15%
+30,000
+30,000
+100 Yuan
+19 ICBC 03 Bond
+12/11/2020
+(x)
+25/09/2020
+24/09/2030
+24/09/2020
+4.20%
+60,000
+60,000
+100 Yuan
+20 ICBC 02 Bond
+(vii)
+26/03/2019
+25/03/2034
+44,000
+44,000
+100 Yuan
+20/11/2017
+17 ICBC 02 Bond
+(iv)
+10/11/2017
+08/11/2027
+4.45%
+08/11/2017
+44,000
+44,000
+100 Yuan
+06/11/2017
+17 ICBC 01 Bond
+(iii)
+13/07/2012
+13/06/2027
+4.45%
+20 ICBC 03 Bond
+22/11/2017
+23/11/2017
+25/03/2019
+4.51%
+10,000
+10,000
+100 Yuan
+21/03/2019
+19 ICBC 02 Bond
+(vi)
+22/11/2027
+26/03/2019
+25/03/2019
+4.26%
+45,000
+45,000
+100 Yuan
+21/03/2019
+19 ICBC 01 Bond
+(v)
+25/03/2029
+13/06/2012
+12/11/2020
+10,000
+(2) Equity attribute to non-controlling interests of other equity instruments
+(1) Equity attribute to non-controlling interests of ordinary shares
+Total equity attribute to non-controlling interests
+2.
+(2) Equity attribute to other equity instruments holders of the parent company
+(1) Equity attribute to ordinary equity holders of the parent company
+Total equity attribute to equity holders of the parent company
+1.
+Items
+(3) Interests attribute to equity instruments' holders
+Note: The RMB amount of perpetual bond as at 31 December 2020 is translated at the spot exchange rate on issuance date.
+86,691
+N/A
+801
+N/A
+86,691
+N/A
+39. RESERVES
+(a) Capital reserve
+1 January
+2020
+2,676,186
+ICBC
+228
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 26 March 2021, the total appropriation to surplus
+reserve of the Bank was RMB30,550 million (2019: RMB29,786 million), among which an appropriation of 10% of the
+profit of the Bank for the year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to
+the statutory surplus reserve, in the amount of RMB30,449 million (2019: RMB29,733 million) was approved and the total
+surplus reserve made by some overseas branches was RMB101 million (2019: RMB53 million) pursuant to the requirements
+of local authorities.
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+par value.
+(i) Statutory surplus reserve
+(b) Surplus reserves
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of
+801
+(xii)
+15,817
+16,013
+15,817
+225,819
+206,132
+2,667,683
+2,470,054
+31 December
+2020
+2,893,502
+16,013
+Total
+80,000
+80,000
+The Bank has the option to redeem all of the bonds on 22 November 2022 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 8 November 2022 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+(ix)
+(vii)
+(vi)
+(v)
+The Bank has the option to redeem all of the bonds on 25 March 2024 upon the approval of the relevant regulatory
+authorities.
+(iv)
+(ii)
+(i)
+(xii)
+17/11/2020
+16/11/2035
+16/11/2020
+4.45%
+10,000
+(iii)
+100 Yuan
+The Bank has the option to redeem all of the bonds on 25 March 2029 upon the approval of the relevant regulatory
+authorities.
+2020
+800
+80,000
+80,000
+800
+RMB Perpetual bond
+6,691
+1,000
+1
+(viii) The Bank has the option to redeem all of the bonds on 26 April 2024 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 26 April 2029 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 24 September 2025 upon the approval of the relevant regulatory
+authorities.
+6,691
+1
+USD Perpetual bond
+(million)
+(million)
+(million pieces)
+(million)
+(million)
+(xi)
+1,000
+4.99%
+(x)
+20,000
+(iii)
+(iv)
+(v)
+(vi)
+ICBC Financial Leasing issued medium-term debt securities and notes amounting to RMB68,596 million denominated in RMB
+and USD with maturities between 2021 and 2027 at fixed or floating interest rates.
+Of which, Skysea International Capital Management Limited ("Skysea International"), which is controlled by the Group,
+issued guaranteed notes of USD750 million with a fixed interest rate of 4.875% in 2011. As at 31 December 2020, Skysea
+International has redeemed USD153 million and the carrying amount of the Notes were RMB3,895 million. The Notes were
+guaranteed by Hong Kong Branch and were issued at the price fixed at 97.708% of the nominal amount with maturities due
+on 7 December 2021. By satisfying certain conditions, Skysea International has the option to redeem all of the notes at any
+time. The Notes were listed on the Stock Exchange of Hong Kong Limited.
+ICBCIL Finance Co. Ltd., which is controlled by the Group, issued medium-term notes amounting to RMB50,821 million
+denominated in USD with maturities between 2021 and 2027 at fixed or floating interest rates. Of which, in 2020, ICBCIL
+Finance Co. Ltd issued medium-term notes amounting to RMB5,864 million denominated in USD with maturity in 2025 at
+fixed interest rates. By satisfying certain conditions, ICBCIL Finance Co. Ltd. has the option to redeem all of the notes at any
+time. Above notes were guaranteed by ICBC Financial Leasing and listed on the Irish Stock Exchange and the Stock Exchange
+of Hong Kong Limited respectively.
+Hai Jiao 1400 limited, which is controlled by the Group, issued a private placement bond amounting to RMB653 million
+denominated in USD with maturity in 2025 at a fixed interest rate. The bond was guaranteed by The Export-Import Bank of
+Korea.
+ICBC Financial Leasing issued medium-term debt securities and notes inside China amounting to RMB13,227 million
+denominated in RMB with maturities between 2021 and 2024 at fixed interest rates. Of which, in 2020, ICBC Financial
+Leasing issued debt securities inside China amounting to RMB4,791 million denominated in RMB with maturity in 2023 at
+fixed interest rates.
+ICBC Thai issued debt securities amounting to RMB8,670 million denominated in THB with maturities between 2021 and
+2026 at fixed interest rates. Of which, in 2020, ICBC Thai issued debt securities amounting to RMB5,002 million denominated
+in THB with maturities between 2021 and 2024 at fixed interest rates.
+ICBC International issued medium-term debt securities and notes amounting to RMB 13,717 million denominated in USD with
+maturities between 2021 and 2025 at a fixed or floating interest rates. Of which, in 2020, ICBC International issued medium-
+term debt securities and notes amounting to RMB4,564 million denominated in USD with maturity in 2025 at a fixed interest
+rates.
+ICBC New Zealand issued medium-term debt securities and notes amounting to RMB2,470 million denominated in NZD with
+maturities between 2021 and 2024 at fixed or floating interest rates. Of which, in 2020, ICBC New Zealand issued medium-
+term debt securities and notes amounting to RMB569 million denominated in NZD with maturity in 2022 at floating interest
+rates.
+ICBC Financial Asset Investment issued medium-term debt securities and notes amounting to RMB28,000 million denominated
+in RMB with maturities between 2022 and 2025 at fixed interest rates. Of which, in 2020, ICBC Financial Asset Investment
+issued medium-term debt securities amounting to RMB10,000 million denominated in RMB with maturity in 2025 at fixed
+interest rates.
+Annual Report 2020
+221
+Notes to the Financial Statements
+(ii)
+ICBC Asia issued medium-term debt securities and notes amounting to RMB12,585 million denominated in RMB, USD and
+HKD with maturities between 2021 and 2023 at fixed or floating interest rates.
+Subsidiaries:
+In 2020, Macau Branch issued notes amounting to RMB1,713 million denominated in MOP with maturity in 2022 at fixed
+interest rates.
+(iii)
+(iv)
+(v)
+(vi)
+In 2020, Head Office issued debt securities amounting to RMB10,000 million denominated in RMB with maturity in 2023 at
+fixed interest rates.
+Sydney Branch issued notes and interbank deposits amounting to RMB24,072 million denominated in AUD, RMB, EUR, HKD
+and USD with maturities between 2021 and 2026 at fixed or floating interest rates. Of which, in 2020, Sydney Branch issued
+notes amounting to RMB4,218 million denominated in AUD and USD with maturities between 2023 and 2026 at fixed or
+floating interest rates; in 2020, Sydney Branch also issued interbank deposits amounting to RMB10,336 million denominated
+in EUR and USD with maturities between January 2021 and December 2021 at fixed rates.
+Singapore Branch issued notes amounting to RMB51,300 million denominated in RMB, USD and EUR with maturities between
+2021 and 2025 at fixed or floating interest rates. Of which, in 2020, Singapore Branch issued notes amounting to RMB13,024
+million denominated in USD with maturities between 2023 and 2025 at fixed or floating interest rates.
+In 2020, Tokyo Branch issued notes amounting to RMB1,173 million denominated in JPY with maturities between February
+2021 and July 2021 at fixed interest rates.
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+New York Branch issued notes amounting to RMB36,480 million denominated in USD with maturities between 2021 and
+2027 at fixed interest rates. Of which, in 2020, New York Branch issued notes amounting to RMB 19,453 million denominated
+in USD with maturities between January 2021 and July 2021 at fixed interest rates.
+220
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(vii) Dubai (DIFC) Branch issued notes amounting to RMB21,431 million denominated in USD with maturities between 2021 and
+2024 at fixed or floating interest rates.
+(viii) Hong Kong Branch issued notes amounting to RMB47,170 million denominated in USD and HKD with maturities between
+2021 and 2025 at fixed or floating interest rates. Of which, in 2020, Hong Kong Branch issued notes amounting to
+RMB11,714 million denominated in USD with maturities between 2023 and 2025 at fixed or floating interest rates.
+London Branch issued notes amounting to RMB24,081 million denominated in GBP, USD and EUR with maturities between
+2021 and 2023 at floating interest rates. Of which, in 2020, London Branch issued notes amounting to RMB1,306 million
+denominated in USD with maturity in 2023 at floating interest rates.
+(ix)
+(x)
+Luxembourg Branch issued notes amounting to RMB14,936 million denominated in USD and EUR with maturities between
+2022 and 2024 at fixed or floating interest rates. Of which, in 2020, Luxembourg Branch issued notes amounting to RMB652
+million denominated in USD with maturity in 2023 at floating interest rates.
+36. OTHER LIABILITIES
+31 December
+2020
+Others
+219,270
+202,993
+712,770
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+525,125
+(i)
+Maturity analysis of lease liabilities
+530
+Less than one year
+Two to three years
+Three to five years
+More than five years
+Contractual undiscounted cash flows of lease liabilities
+Ending balance of lease liabilities
+(ii)
+31 December
+20,000
+One to two years
+(ii)
+490
+1,044
+31 December
+2019
+Settlement accounts
+Lease liabilities (i)
+394,880
+225,055
+29,825
+29,524
+Early retirement benefits
+Allowance for impairment losses on credit commitments
+Salaries, bonuses, allowances and subsidies payables (ii)
+24,807
+24,036
+Sundry tax payables
+15,595
+13,409
+Promissory notes
+1,193
+28,534
+(i)
+26,710
+As at 31 December 2020, the Group's other debt securities issued mainly include:
+11 ICBC 01 Bond
+(million)
+(million)
+Circulation date Notes
+Maturity date
+Value date
+rate
+(In RMB)
+(In RMB)
+(In RMB)
+Issue date
+Name
+Coupon
+Ending
+balance
+Amount
+Issue price
+As approved by the PBOC and the CBIRC, the Bank issued callable subordinated bonds and Tier 2 Capital Notes through open
+market bidding in 2011, 2012, 2017, 2019 and 2020. Approved by the PBOC, these subordinated bonds and Tier 2 Capital Notes
+were traded in the bond market among banks. The relevant information is set out below:
+29/06/2011
+100 Yuan
+38,000
+38,000
+100 Yuan
+The Bank:
+11/06/2012
+12 ICBC 01 Bond
+(ii)
+17/01/2012
+30/12/2026
+30/12/2011
+The Bank:
+5.50%
+50,000
+100 Yuan
+29/12/2011
+11 ICBC 02 Bond
+(i)
+30/08/2011
+30/06/2031
+5.56%
+50,000
+(1) Subordinated bonds and Tier 2 Capital Notes
+30/06/2011
+The Bank has the option to redeem all of the bonds on 16 November 2030 upon the approval of the relevant regulatory
+authorities.
+15 USD
+Tier 2 Capital Notes
+15/09/2015
+USD
+99.189
+2,000
+13,079
+4.875%
+(million)
+21/09/2015
+(xiii)
+(xiii) On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal
+amount with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and Tier 2
+Capital Notes during the reporting period (2019: Nil).
+Subsidiaries:
+On 23 March 2018, ICBC Thai issued a Tier 2 Capital Notes with an aggregate nominal amount of THB5,000 million, bearing a fixed
+interest rate of 3.5%. The bond was issued with maturity due on 23 September 2028.
+On 12 September 2019, ICBC Macau issued a Tier 2 Capital Notes with an aggregate nominal amount of USD500 million, bearing a
+fixed interest rate of 2.875% per annum. The bond was issued at the price fixed at 99.226% of the nominal amount with maturity
+due on 12 September 2029.
+The Bank has the option to redeem all of the bonds on 16 November 2025 upon the approval of the relevant regulatory
+authorities.
+The above Tier 2 Capital Notes are separately listed on the Thai bond market association and the Stock Exchange of Hong Kong
+Limited. ICBC Thai and ICBC Macau have not had any defaults of principal or interest or other breaches with respect to the Tier 2
+Capital Notes during the period (2019: Nil).
+22/09/2015
+(million)
+21/09/2025
+Circulation date
+Annual Report 2020
+219
+Note
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+In 2015, the Bank issued Tier 2 Capital Notes denominated in USD. Approved by the Stock Exchange of Hong Kong Limited for
+listing and dealing, the Notes are listed on the Stock Exchange of Hong Kong Limited. The relevant information is set out below:
+Amount
+Ending
+balance
+(original
+(2) Other debt securities issued
+Maturity date
+Name
+Issue date Currency
+Issue price
+currency)
+(In RMB)
+Coupon
+rate
+Value date
+(93,664)
+19,687
+Balance as at 31 December 2020
+Others
+(18)
+(i)
+retained earnings
+(93,664)
+Appropriation to general reserve (ii)
+Appropriation to surplus reserve (i)
+(ii)
+Other comprehensive income transferred to
+30,550
+30,550
+holders (note 17)
+(30,550)
+33,247
+33,247
+(33,247)
+(18)
+(211)
+211
+(18)
+(8,839) (8,839)
+(211)
+(1,396)
+2019 final (note 17)
+(4,239)
+356,407 219,143
+(89)
+756,163 1,259,397 2,571,423
+Profit for the year
+304,267
+304,267
+Other comprehensive income
+(2,021)
+157
+152
+Dividends to other equity instruments
+(3,108)
+Total comprehensive income
+(1,396)
+(2,021)
+157
+152
+(3,108) 304,267
+301,159
+Capital injection by other equity
+instruments holders
+19,687
+Dividends ordinary shares
+(3,108)
+153,285
+Losses during the year
+22,342
+Less: Amount transferred to profit or loss from other comprehensive income
+Income tax effect
+1,072
+773
+922
+(2,434)
+(3,042)
+8,026
+Credit losses of debt instruments measured at FVOCI
+1,051
+(64)
+Reserve from cash flow hedging instruments
+9,687
+Less: Income tax effect
+(696)
+(107)
+62
+(253)
+(634)
+Other comprehensive income recognised under equity method
+14
+(530)
+Foreign currency translation differences
+Others
+(76)
+(146)
+317,903 329,209
+(5,036)
+Items that may be reclassified subsequently to profit or loss:
+(2,097) (4,082)
+63 816,623 1,397,575
+2,789,748
+Includes the appropriation made by overseas branches in the amount of RMB101 million (2019: RMB53 million).
+Includes the appropriation made by overseas branches in the amount of RMB11 million (2019: RMB2 million).
+ICBC
+230
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+40. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+2020
+2019
+Changes in fair value of debt instruments measured at FVOCI
+Other comprehensive income recognised under equity method
+Others
+Changes in fair value of equity instruments designated as at FVOCI
+Less: Income tax effect
+1,639
+(53)
+(350)
+15
+1,289
+(38)
+(5)
+11
+8
+(5)
+Items that will not be reclassified to profit or loss:
+197
+(In RMB millions, unless otherwise stated)
+295,962
+Issued
+Other
+share equity
+capital instruments
+Capital
+Surplus
+General revaluation
+Investment currency
+translation
+Cash flow
+hedging
+Other
+Retained
+Foreign
+Total
+reserve
+reserve
+reserve
+reserve
+reserve
+reserves
+Subtotal
+profits equity
+Balance as at 1 January 2019
+356,407
+79,375
+reserve
+156,204
+Reserves
+Financial Statements for the year ended 31 December 2020
+(16,212)
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserve
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(c) General reserve
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+The general reserve balance of the Bank as at 31 December 2020 amounted to RMB329,209 million (31 December 2019:
+RMB295,962 million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+The statement of changes in equity of the Bank during the year are set out below.
+(d) Investment revaluation reserve
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Chinese mainland.
+(f) Cash flow hedge reserve
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(g) Other reserves
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+(h) Distributable profits
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+Annual Report 2020
+229
+Notes to the Financial Statements
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVOCI.
+23,949
+257,567
+19,926
+(29,886)
+(2,901)
+1
+(2,901)
+(32,787)
+Dividends ordinary shares
+2018 final (note 17)
+(89,315)
+(89,315)
+Dividends preference shares (note 17)
+(4,525) (4,525)
+instruments holders
+Appropriation to surplus reserve (i)
+29,786
+(29,786)
+Appropriation to general reserve (ii)
+24,761
+24,761
+(24,761)
+Balance as at 31 December 2019 and
+1 January 2020
+356,407
+199,456
+153,303 287,353
+29,786
+271,201
+Capital deduction by other equity
+149,967
+(294)
+(3,913)
+(54)
+700,637
+1,111,446 2,247,865
+Profit for the year
+296,338 296,338
+Other comprehensive income
+4,023
+218
+(326)
+149,967
+(35)
+3,880
+Total comprehensive income
+4,023
+218
+(326)
+(35)
+3,880
+296,338
+300,218
+Capital injection by other equity
+instruments holders
+3,880
+4,271
+15,957
+68,038
+As at 31 December 2020, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,708,427 million (31 December 2019:
+RMB2,642,057 million) and RMB1,462,393 million (31 December 2019: RMB1,332,184 million) respectively.
+During the year of 2020, the amount of the average exposure of financing transactions through placements and reverse
+repurchase agreements from the Group with non-principal-guaranteed wealth management products sponsored by the
+Group was RMB72,587 million (2019: RMB49,142 million). The transactions were conducted in the ordinary course of
+business under normal terms and conditions.
+(c) Unconsolidated structured entities sponsored by the Group during the year in which
+the Group does not have an interest at 31 December 2020
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2020 but matured before 31 December 2020 was RMB143,192 million (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2019 but matured
+before 31 December 2019 was RMB404,793 million).
+During the year of 2020, the amount of fee and commission income received from non-principal-guaranteed wealth
+management products above by the Group was RMB549 million (2019: RMB1,610 million).
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2020 but matured
+before 31 December 2020 was RMB1,167 million (The aggregated amount of the investment funds sponsored and issued by
+the Group after 1 January 2019 but matured before 31 December 2019 was RMB3,000 million).
+During the year of 2020, the amount of income received from investment funds above was RMB58 million. (2019: RMBO.72
+million).
+Annual Report 2020
+233
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+42. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+Analysis of balances of cash and cash equivalents
+31 December
+2020
+31 December
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds, etc. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2020, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+(b) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest
+63,772
+20,844
+Financial
+investments
+measured at
+FVTPL
+31 December 2019
+Financial
+investments
+measured at
+FVOCI
+Financial
+investments
+measured at
+amortised cost
+2019
+27,225
+17,032
+26,226
+18,330
+68,233
+20,844
+28,410
+527,364
+405,680
+Cash on hand
+19
+64,833
+The following table analyses the carrying amount of the above mentioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+31 December 2020
+Carrying
+amount of
+transferred
+Carrying
+amount of
+associated
+assets
+liabilities
+Repurchase agreements
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities sold under repurchase agreements in the absence of
+default by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase
+or decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral in
+certain circumstance. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+42,124
+30,375
+31 December 2019
+Carrying
+amount of
+transferred
+assets
+Carrying
+amount of
+associated
+liabilities
+29,766
+40,760
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Repurchase transactions and securities lending transactions
+43. TRANSFERRED FINANCIAL ASSETS
+66,035
+Balances with central banks other than restricted deposits
+19
+619,968
+322,892
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+241,109
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+224,374
+239,428
+230,140
+Reverse repurchase agreements with original maturity of
+three months or less
+625,784
+606,972
+1,791,122
+1,450,413
+Placements with banks and other financial institutions with original
+maturity of three months or less
+Securities lending agreements
+Notes to the Financial Statements
+Trust plans
+exposure
+Investment funds
+32,100
+32,100
+27,225
+27,225
+Wealth management products
+311
+311
+Asset management plans
+152,927
+152,927
+422,712
+422,712
+Trust plans
+amount
+exposure
+amount
+Maximum
+1,998
+1,311
+(15,839)
+(329)
+10,708
+Annual Report 2020
+231
+Notes to the Financial Statements
+44,204
+Financial Statements for the year ended 31 December 2020
+41. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in
+the products issued by these structured entities. Such structured entities include investment funds, wealth management
+products, asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of investment products to investors.
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+31 December 2020
+Carrying
+Maximum
+31 December 2019
+Carrying
+(In RMB millions, unless otherwise stated)
+44,204
+44,556
+44,556
+Financial
+investments
+measured at
+FVOCI
+Financial
+investments
+measured at
+amortised cost
+32,100
+311
+136,306
+16,621
+Financial
+investments
+measured at
+FVTPL
+22,807
+7,975
+29,037
+259,562
+7,975
+67,055
+Investment funds
+Asset management plans
+21,397
+Asset-backed securities
+31 December 2020
+232
+Asset-backed securities
+105,050
+105,050
+117,487
+117,487
+334,592
+334,592
+ICBC
+611,980
+The maximum exposures to loss in the above investment funds, wealth management products, asset management plans,
+trust plans and asset-backed securities are the amortised cost or fair value of the assets held by the Group at the reporting
+date.
+The following table sets out an analysis of the line items in the consolidated statement of financial position in which assets
+were recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+Investment funds
+Wealth management products
+Asset management plans
+Trust plans
+Asset-backed securities
+611,980
+255,660
+Note
+297,784
+31 December
+2020
+2019
+1,916,638
+2,361,366
+2,361,289
+1,916,362
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+47. ASSETS PLEDGED AS SECURITY
+Financial assets of the Group including bills and securities have been pledged as collateral for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2020, the carrying value of the
+financial assets of the Group pledged as collateral amounted to approximately RMB249,499 million (31 December 2019:
+RMB227,938 million).
+48. FIDUCIARY ACTIVITIES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+Annual Report 2020
+237
+Notes to the Financial Statements
+31 December
+Designated loans
+Designated funds
+46. DESIGNATED FUNDS AND LOANS
+2020
+1,106,377
+31 December
+2019
+1,306,831
+236
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+As at 31 December 2020, there were a number of legal proceedings and arbitrations outstanding against the Bank and/or its
+subsidiaries with a claimed amount of RMB4,928 million (31 December 2019: RMB4,233 million).
+In the opinion of management, the Group has made adequate allowance for any probable losses based on the current
+facts and circumstances, and the ultimate outcome of these lawsuits and arbitrations will not have a material impact on the
+financial position or operations of the Group.
+(e) Redemption commitments of government bonds
+As an underwriting agent of the MOF, the Bank underwrites certain PRC government bonds and sells the bonds to the
+general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to maturity. The
+redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to the redemption
+date. As at 31 December 2020, the Bank had underwritten and sold bonds with an accumulated amount of RMB81,112
+million (31 December 2019: RMB89,644 million) to the general public, and these government bonds have not yet matured
+nor been redeemed. Management expects that the amount of redemption of these government bonds through the Bank
+prior to maturity will not be material.
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+(f) Underwriting obligations
+As at 31 December 2020, the Group had no unexpired security-underwriting obligations (31 December 2019: RMB1,000
+million).
+(d) Legal proceedings
+(In RMB millions, unless otherwise stated)
+49. RELATED PARTY DISCLOSURES
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+As at 31 December 2020, the Huijin Bonds held by the Group are of an aggregate face value of RMB71.39 billion (31
+December 2019: RMB56.23 billion), with terms ranging from 3 to 30 years and coupon rates ranging from 2.15% to 5.00%
+per annum. The Huijin Bonds are government-backed, short-term financing bills and medium-term notes. The Group's
+subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance with relevant regulatory
+requirements and the corporate governance of the Group.
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the major transactions are as follows:
+Balances at end of the year:
+Debt securities purchased
+Loans and advances to customers
+Due to customers
+238
+As at 31 December 2020, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71% (31 December
+2019: approximately 34.71%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in major state-owned financial enterprises, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State
+in accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial
+assets. Huijin does not conduct any other business or commercial activity. It does not intervene in the day-to-day business
+operations of the firms in which it invests.
+ICBC
+31 December
+2020
+2019
+72,472
+57,436
+4,005
+22,022
+31 December
+31 December
+(ii) Huijin
+38,808
+(a) Shareholders with significant influence
+286,527
+The MOF
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2020, the MOF directly owned approximately 31.14% (31 December
+2019: approximately 31.14%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, details of the major transactions are as follows:
+Balances at end of the year:
+The PRC government bonds and the special government bond
+Transactions during the year:
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 49(g) "transactions with state-owned entities in the PRC".
+Interest income on the PRC government bonds
+2020
+31 December
+2019
+1,495,673
+1,215,664
+2020
+2019
+43,609
+31 December
+Credit risk-weighted assets of credit commitments
+(i)
+2,711,454
+42,797
+31,915
+Annual Report 2020
+235
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(b) Operating lease commitments
+31 December
+2019
+Operating lease commitments
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+Within one year
+Over one year but within five years
+Over five years
+31 December
+31 December
+2020
+Lessor
+2019
+31 December
+At the end of the reporting period, the Group had capital commitments as follows:
+40,760
+2,963,071
+316,902
+29,766
+234
+ICBC
+Notes to the Financial Statements
+Contracted
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+The Group transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may
+acquire some asset-backed securities and fund shares at the subordinated tranche level and accordingly, may retain parts
+of the risks and rewards of the transferred credit assets. The Group would determine whether or not to derecognise the
+associated credit assets by evaluating the extent to which it retains the risks and rewards of the assets.
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the statement of financial position
+in accordance with the Group's continuing involvement and the rest is derecognised. The extent of the Group's continuing
+involvement is the extent of the risks and rewards undertaken by the Group with value changes of the transferred financial
+assets. The amount at the time of transfer of the original credit assets, which the Group determined that it has continuing
+involvement through acquiring some tranches, was RMB521,314 million as at 31 December 2020 (the amount at the time
+of transfer of the original credit assets was RMB384,156 million as at 31 December 2019) and the carrying amount of assets
+that the Group continues to recognise on the statement of financial position was RMB63,808 million as at 31 December
+2020 (31 December 2019: RMB52,016 million).
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid are recorded as a financial liability. As at 31 December 2020, the Group does
+not have carrying amount of transferred assets that did not qualify for derecognition and carrying amount of their associated
+liabilities (31 December 2019: Nil).
+44. SHARE APPRECIATION RIGHTS PLAN
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+45. COMMITMENTS AND CONTINGENT LIABILITIES
+(a) Capital commitments
+Securitisation transactions
+17,218
+2020
+67,210
+343,233
+2019
+311,300
+54,361
+69,634
+446,460
+414,245
+40,932
+2020
+129,015
+91,410
+187,651
+574,420
+625,146
+21,018
+1,021,038
+1,157,478
+156,685
+31 December
+51,517
+31 December
+73,626
+87,494
+94,249
+158,054
+202,761
+(c) Credit commitments
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+Bank acceptances
+Guarantees issued:
+- Financing letters of guarantees
+- Non-financing letters of guarantees
+Sight letters of credit
+Usance letters of credit and other commitments
+Loan commitments:
+With an original maturity of under one year
+With an original maturity of one year or over
+Undrawn credit card limit
+(2,592,541)
+Notes to the Financial Statements
+2,711,454
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-
+current assets.
+Annual Report 2020
+247
+675,725
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Central
+Chinese mainland (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+Head Office
+Overseas
+Western
+Northeastern
+145,460
+Year ended 31 December 2019
+565,802
+3,203,936
+785,796
+7,840,257
+River Delta
+7,250,493
+4,886,621
+7,507,515
+3,811,490
+1,360,916
+838,331
+(6,356,682)
+30,342,877
+Unallocated liabilities
+92,666
+Total liabilities
+30,435,543
+Other segment information:
+Credit commitments
+1,077,366
+999,018
+683,005
+371,823
+River Delta
+Other income/(expense), net (i)
+China
+(1,203)
+Net fee and commission income
+30,922
+26,073
+18,339
+17,235
+11,334
+14,201
+2,960
+11,168
+(1,659)
+130,573
+9,422
+(3,975)
+(614)
+(3,838)
+(1,938)
+Liabilities by geographical areas
+(2,673)
+9,356
+Rim
+13,846
+102,725
+China
+China
+and others
+Eliminations
+Total
+External net interest income
+255,298
+69,436
+68,232
+27,769
+67,470
+90,373
+17,403
+36,236
+632,217
+Internal net interest (expense)/income
+(194,621)
+37,138
+14,710
+18,049
+33,345,058
+446
+67,713
+208
+180
+53
+249
+1,887
+Capital expenditure
+4,692
+5,269
+141
+3,925
+4,072
+5,413
+1,356
+20,457
+51,530
+(i)
+Including net trading income, net gain/(loss) on financial investments and other operating income (net).
+(i)
+6,346
+100
+219
+737
+(503)
+11
+392,126
+Income tax expense
+(74,441)
+Profit for the year
+317,685
+Other segment information:
+Depreciation
+2,146
+2,949
+2,433
+3,708
+3,174
+3,751
+1,372
+2,028
+21,561
+Amortisation
+31 December 2020
+Chinese mainland (HO and domestic branches)
+Assets by geographical areas
+Head Office
+9,665,936
+32,725
+12,791
+21,477
+18,374
+23,164
+9,088
+154,731
+286,279
+Other non-current assets (i)
+14,352
+7,817
+6,065
+7,534
+8,580
+9,950
+2,256
+25,969
+82,523
+Unallocated assets
+13,929
+Total assets
+Property and equipment
+41,206
+Yangtze
+River Delta
+7,183,515
+Pearl
+River Delta
+Bohai
+Rim
+Central
+China
+Western
+Northeastern
+China
+China
+4,935,763
+4,994,061
+3,334,445
+4,249,027
+Overseas and
+others
+4,024,527
+Eliminations
+(6,356,671)
+Total
+33,277,345
+Including: Investments in associates and
+joint ventures
+41,206
+15,768
+2,996,409 3,675,924
+13,212
+4,126,087
+4,256,707
+2,973,119
+3,841,497
+1,140,631
+3,971,298
+(7,330,839)
+30,046,900
+6,380,888
+joint ventures
+32,490
+Property and equipment
+11,964
+32,168
+12,015
+20,252
+18,306
+23,009
+32,490
+Total
+Eliminations
+and others
+29,924
+54,739
+(i)
+Including net trading income, net (loss)/gain on financial investments and other operating income (net).
+(i)
+Assets by geographical areas
+Including: Investments in associates and
+31 December 2019
+Chinese mainland (HO and domestic branches)
+Head Office
+10,687,512
+Yangtze
+River Delta
+Pearl
+River Delta
+Bohai
+Rim
+Central
+China
+Western
+China
+Northeastern
+Overseas
+China
+9,413
+159,434
+286,561
+Other non-current assets (i)
+Unallocated liabilities
+98,064
+Total liabilities
+27,417,433
+Other segment information:
+Credit commitments
+1,266,960
+767,677
+464,593
+655,424
+252,299
+464,788
+122,273
+725,581
+(1,756,524)
+2,963,071
+248
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-
+current assets.
+ICBC
+27,319,369
+1,255
+(7,330,853)
+1,207,528
+13,250
+8,114
+5,975
+7,352
+8,488
+12,370
+2,093
+25,588
+83,230
+Unallocated assets
+62,536
+Total assets
+30,109,436
+Liabilities by geographical areas
+8,135,659
+6,694,114
+4,164,747
+7,051,203
+27,188
+724,638
+1,563
+4,309
+5,103
+(40,400)
+(15,572)
+(15,821)
+(40,049)
+(22,546)
+(21,127)
+(14,150)
+(9,292)
+Impairment losses on assets
+(178,957)
+40,073
+82,336
+61,250
+70,099
+42,270
+58,635
+2,743
+31,848
+Operating profit
+(207,776)
+111
+(20,829)
+Operating income
+101,021
+128,672
+100,667
+143,891
+94,915
+115,747
+29,216
+61,969
+(96)
+776,002
+Operating expenses
+(20,548)
+(30,764)
+(23,596)
+(33,743)
+(30,099)
+(35,985)
+(12,323)
+15
+Share of profits of associates and joint ventures
+2,520
+Profit before taxation
+3,002
+3,404
+1,312
+1,563
+19,069
+Amortisation
+808
+234
+215
+235
+279
+309
+87
+254
+2,421
+Capital expenditure
+3,784
+3,898
+3,092
+3,110
+3,374
+2,108
+1,851
+40,073
+82,336
+61,250
+70,099
+42,270
+58,635
+2,743
+34,368
+15
+55
+389,269
+2,520
+391,789
+Income tax expense
+(78,428)
+Profit for the year
+313,361
+Other segment information:
+Depreciation
+2,719
+146
+2,593
+42,655
+Interest expense
+1,457
+0.33%
+2,066
+0.48%
+242
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+50. SEGMENT INFORMATION
+(a) Operating segments
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+Treasury operations
+%
+5.73%
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers, etc.
+60,893
+66,479
+9.40%
+Due to customers
+17,032
+0.07%
+3,034
+0.01%
+Credit commitments
+12,690
+0.43%
+7,172
+0.24%
+2020
+2019
+Amount
+%
+Amount
+Interest income
+6.08%
+8,004
+Others
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+32,948
+131,818
+(164,766)
+Net fee and commission income
+76,173
+53,761
+1,281
+131,215
+Other income, net (i)
+8,896
+1,436
+7,338
+4,425
+22,095
+Operating income
+393,661
+318,058
+Internal net interest income/(expense)
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+646,765
+131,043
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as
+"internal net interest income/expense". Net interest income and expense relating to third parties are referred to as "external
+net interest income/expense".
+Annual Report 2020
+243
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Year ended 31 December 2020
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Others
+Total
+External net interest income
+275,644
+240,078
+16.52%
+23,290
+Derivative financial liabilities
+4,690
+104
+5,393
+4,794
+Note: The above remuneration before tax payable to key management personnel for 2019 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2019 Annual Report.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2020 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's 2020 financial statements. The total compensation packages will be
+further disclosed when determined by the relevant authorities.
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the
+Group.
+The transactions between the Group and the aforementioned parties for the year are as follows:
+31 December
+31 December
+2020
+2019
+Loans
+RMB'000
+2,363
+RMB'000
+2,423
+There were no other material transactions and balances with key management personnel on an individual basis during the
+year. The Group enters into banking transactions with key management personnel in the normal course of business.
+5,177
+216
+The aggregate balance of loans and credit card overdraft to the person which are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB15.29 million as at 31 December 2020 (31 December 2019:
+RMB3.24 million).
+RMB'000
+2020
+RMB'000
+2019
+65
+7
+33
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+2020
+2019
+Transactions during the year:
+Interest income on loans
+Interest expense on amounts due to customers
+2
+0
+0
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(e) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+The aggregate compensation for the year, other than those for the personnel disclosed in note 12 above, is as follows:
+Short-term employment benefits
+Post-employment benefits
+2019
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+Annual Report 2020
+241
+106,719
+10.24%
+Loans and advances to customers
+15,663
+0.09%
+27,826
+0.17%
+Derivative financial assets
+23,913
+17.82%
+6,251
+9.15%
+Due to banks and other financial institutions
+305,742
+10.98%
+233,412
+10.30%
+24.04%
+260,127
+Due from banks and other financial institutions
+23.59%
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(f) Annuity Fund
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund holds the market value of A shares
+of the Bank with an amount of RMB39.17 million as at 31 December 2020 (31 December 2019: RMB101.36 million), and
+holds bonds issued by the Bank of RMB10.00 million as at 31 December 2020 (31 December 2019: RMB20.28 million).
+(g) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of
+business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and
+those state-owned entities are ultimately controlled or owned by the Government. The Group has also established pricing
+policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned
+entities.
+83,931
+(h) Proportion of major related party transactions
+31 December 2020
+Balances
+%
+31 December 2019
+Balances
+%
+Financial investments
+2,214,553
+25.78%
+1,803,840
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements. When
+calculating the proportion of related party transactions, transactions with the subsidiary are not involved.
+31 December
+4,425
+Operating expenses
+(137,181)
+Net fee and commission income
+76,440
+52,715
+1,418
+130,573
+Other income/(expense), net (i)
+6,825
+3,441
+(1,646)
+4,592
+13,212
+Operating income
+375,590
+305,577
+90,243
+4,592
+129,067
+776,002
+8,114
+632,217
+244
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2019
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Others
+Total
+External net interest income
+284,211
+120,354
+227,652
+Internal net interest income/(expense)
+In accordance with the Bank's transformation and development, the Bank advanced its operating segments and
+adjusted the comparative figures for the same period accordingly.
+Operating expenses
+(109,170)
+72,745
+1,300
+391,789
+Income tax expense
+(78,428)
+313,361
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+8,315
+7,265
+2,946
+543
+19,069
+1,026
+803
+171,194
+(76,305)
+146,550
+2,520
+(16,484)
+(5,817)
+(207,776)
+Impairment losses on assets
+(152,735)
+(25,213)
+(1,014)
+5
+(178,957)
+Operating profit/(loss)
+146,550
+171,194
+72,745
+(1,220)
+389,269
+Share of profits of associates and joint ventures
+2,520
+Profit before taxation
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other
+non-current assets.
+(iii)
+(ii)
+146,903
+174,469
+68,199
+2,555
+392,126
+Income tax expense
+(74,441)
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+317,685
+9,482
+8,742
+3,213
+124
+21,561
+Profit before taxation
+878
+1,304
+Share of profits of associates and joint ventures
+(85,731)
+(103,482)
+(14,730)
+(2,642)
+(206,585)
+Impairment losses on assets
+(161,027)
+(40,107)
+(1,002)
+(532)
+(202,668)
+Operating profit
+146,903
+174,469
+68,199
+1,251
+390,822
+1,304
+520
+296
+193
+101,573
+18,012
+12,167,001
+37,244
+36,616
+286,279
+6,601
+15,357
+82,523
+4,391,690
+110,186
+30,435,543
+Other segment information:
+Credit commitments
+1,716,094
+995,360
+2,711,454
+(i)
+Including net trading income, net gain/(loss) on financial investments and other operating income (net).
+13,766,666
+Segment liabilities
+110,846
+42,553
+Other non-current assets (ii)
+1,887
+Capital expenditure
+22,759
+20,475
+7,696
+600
+51,530
+31 December 2020
+800,075
+Segment assets
+7,454,567
+14,366,145
+184,952
+33,345,058
+Including: Investments in associates and joint ventures
+41,206
+41,206
+Property and equipment
+11,339,394
+31 December
+2020
+ICBC
+240
+Bohai
+Pearl
+Yangtze
+Chinese mainland (HO and domestic branches)
+Year ended 31 December 2020
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+246
+branches located outside Chinese mainland, domestic and overseas subsidiaries, and investments
+in associates and joint ventures.
+including Liaoning, Heilongjiang, Jilin and Dalian.
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+the HO business division (including institutions directly managed by the HO and their offices);
+Central
+Northeastern China:
+Overseas and others:
+Western
+Head Office
+13,968
+95,814
+71,669
+20,128
+74,150
+69,071
+270,017
+External net interest income
+Total
+Eliminations
+Overseas and
+others
+China
+China
+China
+Rim
+River Delta
+River Delta
+Northeastern
+31,948
+Western China:
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+12,850,937
+Segment liabilities
+83,230
+17,329
+7,577
+13,974
+44,350
+Other non-current assets (ii)
+286,561
+46,878
+37,943
+93,773
+107,967
+Property and equipment
+32,490
+32,490
+Including: Investments in associates and joint ventures
+10,912,514
+Bohai Rim:
+Central China:
+3,532,247
+27,417,433
+Chinese mainland (Head Office and domestic branches):
+The distribution of the geographical areas is as follows:
+The Group operates principally in Chinese mainland, and also has branches and subsidiaries operating outside Chinese
+mainland (including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta,
+Moscow, Doha, Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom
+Penh, Vientiane, Lima, Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh, Istanbul, Prague,
+Zurich, Manila, Vienna and Panama City, etc.).
+(b) Geographical information
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+245
+Annual Report 2020
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-
+current assets.
+(ii)
+Including net trading income, net (loss)/gain on financial investments and other operating income (net).
+(i)
+2,963,071
+1,130,938
+1,832,133
+Credit commitments
+Other segment information:
+121,735
+646,765
+Internal net interest (expense)/income
+(219,971)
+(14,543)
+(17,622)
+(19,625)
+(26,376)
+(36,824)
+(12,180)
+(24,212)
+(51,286)
+Impairment losses on assets
+(206,585)
+111
+(20,161)
+(12,127)
+(35,113)
+(29,820)
+(32,781)
+(23,339)
+(202,668)
+(30,917)
+Operating profit
+75,295
+76,322
+67,383
+75,295
+34,081
+Profit before taxation
+1,304
+-
+1,304
+Share of profits of associates and joint ventures
+390,822
+11
+25,884
+2,593
+66,598
+42,655
+76,322
+67,383
+34,081
+(22,438)
+Operating expenses
+800,075
+(1,269)
+10,729
+2,445
+12,950
+8,646
+16,336
+15,433
+23,086
+42,859
+Net fee and commission income
+1,587
+13,027
+15,508
+20,533
+112,918
+14,623
+41,775
+131,215
+Other income/(expense), net (i)
+14,900
+(3,508)
+(100)
+60,588
+32,342
+121,336
+98,851
+145,927
+102,902
+130,424
+30,109,436
+107,805
+22,095
+1,169
+16,324
+2,902
+(2,936)
+(1,997)
+(3,455)
+(1,304)
+Operating income
+176,090
+13,029,624
+6,655,928
+523
+884
+681
+520
+Interest expense on amounts due to banks and other financial institutions
+Fee and commission income
+993
+1,807
+6,233
+3,089
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+(c) Associates and affiliates
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Due to customers
+151
+Interest income on financial investments
+4,945
+1,810
+183,059
+167,454
+5,004
+2,587
+3,293
+7,872
+53,161
+113,755
+Annual Report 2020
+239
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Transactions during the year:
+2020
+2019
+982
+Derivative financial liabilities
+Credit commitments
+31 December
+2020
+128
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+80
+368
+62
+97
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+186
+254
+0
+0
+The major transactions between the Group and the associates and their affiliates mainly comprised debt securities
+purchased, due from banks and other financial institutions, loans and advances to customers and due to banks and other
+financial institutions and the corresponding interest income and interest expense. In the opinion of management, the
+transactions between the Group and the associates and their affiliates were conducted under normal commercial terms and
+conditions.
+(d)
+Joint ventures and affiliates
+Balances at end of the year:
+Loans
+Due to customers
+479
+Interest income on debt securities purchased
+Transactions during the year:
+2019
+31 December
+2019
+12,680
+8,548
+8,549
+4,995
+983
+2,680
+30,150
+3,244
+6,051
+12,397
+3
+0
+3,283
+2,102
+3,023
+2020
+1,279
+66,598
+45,958
+372,441
+240
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group. Details
+of major transactions during the year conducted with these banks and financial institutions are as follows:
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Due to customers
+Credit commitments
+31 December
+2020
+31 December
+2019
+633,728
+530,740
+251,578
+149
+101,724
+717
+1,949
+10,247,794
+Segment assets
+31 December 2019
+Capital expenditure
+54,739
+1,660
+8,539
+20,693
+23,847
+2,421
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+2020
+2019
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+2,360
+561
+10,610
+3,124
+20,669
+1,562
+54
+10
+(b) Subsidiaries
+Balances at end of the year:
+Financial investments
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Reverse repurchase agreements
+Credit commitments
+31 December
+2020
+31 December
+2019
+30,425
+31,174
+1,068
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+44
+110
+4,972
+299,691
+221,015
+20,007
+5,902
+1,065
+1,003
+12,690
+402,276
+7,172
+2019
+Transactions during the year:
+Interest income on debt securities purchased
+18,634
+18,548
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+582
+234
+2020
+1,246,742
+•
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+6,645
+13,211
+22,650
+4,789,276
+Policy banks
+633,828
+213
+2,617
+15,551
+313
+652,522
+Banks and other
+financial institutions
+281,128
+365,377
+18,672
+84,343
+76,046
+825,566
+3,133,011
+Corporate entities
+1,613,759
+of issuers):
+3,012,983
+369,783
+4,621,561
+5,317
+43,574
+81,893
+213,421
+62,224
+162,654 8,054,193
+660,470
+256
+ICBC
+Debt securities (analysed by type
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December 2019
+Unrated
+AAA
+AA
+A
+Below A
+Total
+Governments and central banks
+104,386
+342,866
+25,892
+and other financial
+institutions
+1,073,777
+9,347
+1,083,124
+(1,214)
+(13)
+(1,227)
+Reverse repurchase
+agreements
+584,793
+584,793
+(117)
+(117)
+Loans and advances
+to customers
+17,580,020
+Financial investments
+6,262,762
+Due from banks
+3,537,795
+3,537,795
+with central banks
+63,480
+2,633,101
+3,841,467
+53,826
+176,585
+58,862 595,486
+157,871 6,862,850
+(iii) Analysis on the credit quality of financial instruments
+The Group's credit risk stages of financial instruments are as follows:
+31 December 2020
+141,253
+Stage 1
+Provision for expected credit losses
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+Financial assets measured
+at amortised cost
+Cash and balances
+Gross carrying amount
+Stage 2
+Stage 3
+Corporate entities
+898,658
+72,925
+369,815
+898,658
+Corporate entities
+104,476
+509,422
+46,572
+660,470
+465,812
+1,439,620
+6,148,761
+8,054,193
+Financial
+investments
+31 December 2019
+Financial
+investments
+Financial
+investments
+measured at
+measured at
+measured at
+FVTPL
+281,215
+247,628
+Banks and other financial institutions
+725,625
+investments
+Financial
+investments
+Financial
+investments
+measured at
+measured at
+measured at
+FVTPL
+FVOCI
+FVOCI
+amortised cost
+Governments and central banks
+86,077
+479,505
+5,203,858
+5,769,440
+Policy banks
+27,631
+169,478
+528,516
+Total
+375,083
+7,819
+amortised cost
+Governments and central banks
+Debt securities (analysed by type
+of issuers):
+Unrated
+AAA
+31 December 2020
+AA
+A
+Below A
+Total
+Governments and central banks
+Policy banks
+1,826,872
+710,867
+3,878,911
+13,444
+1,703
+23,941
+11,822
+26,272 5,769,440
+1,233 725,625
+Banks and other
+financial institutions
+333,991
+372,867
+23,110
+95,765
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies where the issuers of debt securities are located. The carrying
+amounts of debt securities investments (excluding accrued interest) analysed by rating as at the end of the reporting period
+are as follows:
+By rating distribution
+6,862,850
+5,103,322
+60,509
+421,919
+4,306,848
+4,789,276
+Policy banks
+41,444
+198,839
+412,239
+652,522
+Total
+Banks and other financial institutions
+Corporate entities
+306,242
+340,218
+825,566
+77,198
+474,271
+44,017
+595,486
+358,257
+1,401,271
+179,106
+Financial
+293,319
+160
+(223,703) (89,151)
+(2,234) (2,718)
+546
+155,741
+(524)
+(333)
+(272)
+(1,129)
+(219,408)
+(80,192)
+(185,087)
+(484,687)
+477,790 240,276 26,789,413
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost, three-stage
+model is not applicable.
+Financial assets measured at
+31 December 2019
+Stage 1
+Carrying amount
+Stage 2
+Stage 3
+Total
+Stage 1
+1,485
+Provision for expected credit losses
+Stage 2
+Stage 3
+153,710
+26,071,347
+leasing and lending
+685,623
+(94)
+(94)
+Loans and advances
+to customers
+15,682,629
+Financial investments
+5,206,604
+452,439
+5,118
+239,564 16,374,632
+166 5,211,888
+(215,316)
+(78,494)
+(184,688)
+(478,498)
+(2,255)
+(1,339)
+(127)
+(3,721)
+Precious metal
+Total
+Total
+FVOCI
+Loans and advances
+(2,005)
+(80)
+(203)
+(2,288)
+(25,266)
+(3,072)
+(196)
+(28,534)
+(b) Liquidity risk
+Liquidity risk is the risk that funds will not be sufficient or will not be raised at a reasonable cost in a timely manner to meet
+the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+•
+optimising the structure of assets and liabilities;
+maintaining the stability of the deposit base;
+projecting cash flows and evaluating the level of current assets; and
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+258
+ICBC
+Notes to the Financial Statements
+1,845,602
+2,963,071
+881
+49,051
+2,913,139
+to customers
+423,370
+623
+423,993
+(227)
+(5)
+(232)
+Financial investments
+1,417,535
+685,623
+4,074
+(1,778)
+(80)
+(198)
+(2,056)
+Total
+1,840,905
+4,074
+623
+Credit commitments
+1,421,609
+agreements
+Reverse repurchase
+(1,245)
+Stage 1
+Provision for expected credit losses
+Stage 2
+Stage 3
+Total
+FVOCI
+Loans and advances
+to customers
+413,633
+659
+414,292
+(211)
+(650)
+(861)
+Financial investments
+1,458,639
+326
+53
+1,459,018
+(2,206)
+(22)
+Total
+Stage 3
+Carrying amount
+Stage 2
+Stage 1
+(217,446)
+(530,300)
+(121)
+(5,073)
+Precious metal
+leasing and lending
+Total
+177,581
+29,216,728
+951
+393,200
+(240)
+161
+293,640
+(479)
+(120)
+(104)
+(703)
+(227,747) (92,002) (217,671)
+(537,420)
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost, three-stage
+model is not applicable.
+Financial assets measured at
+31 December 2020
+178,693
+29,903,568
+18,248,422
+6,270,741
+(2,468)
+1,872,272
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+Financial assets measured
+at amortised cost
+Cash and balances
+with central banks
+3,317,916
+3,317,916
+Due from banks
+and other financial
+institutions
+1,024,865
+18,748
+1,043,613
+(1,219)
+(26)
+Stage 3
+Provision for expected credit losses
+Gross carrying amount
+Stage 2
+Stage 1
+326
+712
+Credit commitments
+2,682,556
+24,509
+4,389
+1,873,310
+2,711,454
+(2,417)
+(22)
+Total
+(890)
+(22,021)
+(2,957)
+(1,732)
+(26,710)
+Annual Report 2020
+257
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December 2019
+(3,329)
+31 December 2020
+Notes to the Financial Statements
+By issuers distribution
+18,136,328
+16,326,552
+638,485
+837,972
+- Financial investments measured at FVOCI
+1,459,018
+1,421,609
+Financial investments measured at amortised cost
+6,265,668
+5,208,167
+Others
+377,563
+181,028
+32,305,364
+29,183,074
+Credit commitments
+Total maximum credit risk exposure
+2,711,454
+2,963,071
+68,311
+845,186
+35,016,818
+3,251,881
+1,042,368
+134,155
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+During the reporting period, the Group took possession of collateral held as security with a carrying amount of RMB377
+million (31 December 2019: RMB599 million).
+(i) Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+As at the end of the reporting period, the maximum credit risk exposure of the Group without taking account of any
+collateral and other credit enhancements is set out below:
+31 December
+2020
+31 December
+2019
+Balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+Financial investments measured at FVTPL
+3,472,962
+1,081,897
+739,288
+32,146,145
+(ii) Risk concentrations
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+3,124,793
+18.64%
+2,746,019
+14.74%
+2,341,370
+13.97%
+3,030,552
+16.27%
+2,739,585
+16.34%
+Central China
+2,789,085
+14.98%
+2,445,215
+14.60%
+Western China
+3,369,916
+18.09%
+2,991,010
+19.24%
+3,582,682
+4.62%
+774,578
+Annual Report 2020
+253
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(1) Loans and advances to customers
+By geographical distribution
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by geographical
+distribution is analysed as follows:
+31 December 2020
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December 2019
+Percentage
+Amount
+Percentage
+Head Office
+Yangtze River Delta
+Pearl River Delta
+Bohai Rim
+772,372
+4.15%
+Amount
+Notes to the Financial Statements
+ICBC
+252
+The principal or interest of loan is past due more than 90 days to the Group;
+(ii)
+(iii)
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral;
+The corporate borrower has the above matters in other financial institutions refers to (i), (ii)
+The Group defines a retail business borrower as in default when single credit assets of borrowers meets one or more of the
+following criteria:
+(i) The principal or interest of loan is past due more than 90 days to the Group;
+(ii)
+Write-offs;
+(iii) The Group considers the borrower is unlikely to pay its credit obligations to the Group in full.
+Impairment assessment
+Generally, a financial asset is considered to be credit-impaired if:
+It has been overdue for more than 90 days;
+•
+In light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+The borrower is probable to be insolvent or carry out other financial restructurings;
+•
+Due to serious financial difficulties, the financial asset cannot continue to be traded in an active market;
+There are other objective evidences that the financial asset is impaired.
+250
+(i)
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria at the timing of
+recognition:
+Definition of default
+Since the outbreak of the COVID-19 pandemic, the Group has provided credit facilities for temporary deferral in principal
+repayment and interest payment to some of the borrowers affected by the epidemic in accordance with the government's
+regulations. The Group classified the credit risk based on the actual situation of the borrower and the judgment of the
+substantive risk of the business for those loans with deferred principal repayment and interest payment. However, the
+temporary deferral in principal repayment and interest payment was not considered as an automatic trigger event in a
+significant increase of credit risk.
+51. FINANCIAL INSTRUMENT RISK MANAGEMENT
+A description and an analysis of the major risks faced by the Group are as follows:
+The board of directors (the "Board") has the ultimate responsibility for the risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The Group has also assigned departments to monitor financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to risk management departments of both the Head Office and the
+management of the relevant branches.
+(a) Credit risk
+Definition and scope
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also give
+rise to credit risk. The Group's credit risk is mainly attributable to its loans, due from banks and other financial institutions
+and financial investments.
+ICBC
+The Group is also exposed to credit risk in other areas in addition to the credit risk arising from the Group's loans, due
+from banks and other financial institutions and financial investments. The credit risk arising from derivative financial
+instruments is limited to derivative financial assets recorded in the statement of financial position. In addition, the Group
+provides guarantees for customers and may therefore be required to make payments on their behalf. These payments will be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk similar
+to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Stage of financial instruments
+The Group classifies financial instruments into three risk stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+Refer to Note 3(6) Impairment of the financial assets for the definition of the three stages.
+Annual Report 2020
+249
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Significant increase in credit risk
+The assessment of significant increase since initial recognition in the credit risk is performed at least on a quarterly basis for
+financial instruments held by the Group. The Group takes into consideration all reasonable and supportable information
+(including forward-looking information) that reflects significantly change in credit risk for the purposes of classifying financial
+instruments. The main considerations are regulatory and operating environment, internal and external credit risk gradings,
+debt-servicing capacity, operating capabilities, contractual terms, and repayment records. The Group compares the risk of
+default of a single financial instrument or a portfolio of financial instruments with similar credit risk characteristics as at the
+end of the reporting period and its risk of default at the date of initial application to determine changes in the risk of default
+during the lifetime of a financial instrument or a portfolio of financial instruments. In determining whether credit risk of a
+financial instrument has increased significantly since initial recognition, the Group considers factors indicating whether the
+probability of default has risen sharply, whether the financial instrument has been past due for more than 30 days, whether
+the market price has been falling to assess deterioration.
+Credit risk assessment method
+17.84%
+Notes to the Financial Statements
+Description of parameters, assumptions, and estimation techniques
+In 2020, the Group has taken into account different macroeconomic scenarios, combined with the impact of factors such as
+the Covid-19 epidemic on economic development trends, and made forward-looking forecasts of macroeconomic indicators.
+Including: quarter-on-quarter GDP growth, used to estimate ECL, ranges from 7.5% to 8.5% in the neutral scenario for
+2021.
+The Group has carried out sensitivity analysis of macroeconomic indicators, used in forward-looking measurement. As at 31
+December 2020, when the important economic indicators in the neutral scenario move up or down by 10%, the ECL will not
+change by more than 5%.
+Write-off policy
+The Group writes off financial assets when it has exhausted practical recovery efforts and has concluded there is no
+reasonable expectation of recovery.
+Contractual modification of financial assets
+The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed
+loans, with a view to maximising recovery.
+Such rescheduling activities include extended payment term arrangements, payment holidays and payment forgiveness.
+Rescheduling policies and practices are based on indicators or criteria which, in the judgment of management, indicate that
+payment will most likely continue. These policies are kept under continuous review. This is only the case for assets which
+have performed in accordance with the new terms for six consecutive months or more.
+The following table includes carrying amount of rescheduled loans and advance to customers:
+Rescheduled loans and advances to customers
+Impaired loans and advances to customers included in above
+31 December
+2020
+11,960
+4,504
+31 December
+2019
+7,319
+2,983
+Collaterals and other credit enhancements
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2020, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB11,509,029 million (31 December 2019:
+RMB10,377,695 million), of which credit exposure covered by collateral amounted to RMB3,534,852 million (31 December
+2019: RMB3,583,296 million).
+Retail loans are mainly collateralised by residential properties. As at 31 December 2020, the gross carrying amount of retail
+loans amounted to RMB7,115,279 million (31 December 2019: RMB6,383,624 million), of which credit exposure covered by
+collateral amounted to RMB6,269,321 million (31 December 2019: RMB5,565,771 million).
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+The following tables present an analysis of debt securities (excluding accrued interest) by types of issuers and investments:
+251
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the Internal Rating-Based Approach under the New Basel
+Capital Accord, taking the forward-looking information into account and deducting the prudential adjustment to reflect the
+debtor's point-in-time (PIT) PD under the current macroeconomic environment;
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. The LGD is depending
+on the type of counterparty, the method and priority of the recourse, and the type of collaterals, with taking the forward-
+looking information into account;
+EAD refers to the total amount of on- and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+There have been no significant changes in estimation techniques or significant assumptions made during the year.
+The impairment loss on credit-impaired corporate loans and advance to customers applied cash flow discount method, if
+there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the loss is measured as
+the difference between the asset's gross carrying amount and the present value of estimated future cash flows discounted
+at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying amount. The
+impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual basis, the
+following factors are considered:
+•
+The sustainability of the borrower's business plan;
+•
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+The borrower's ability to improve performance once a financial difficulty has arisen;
+The estimated recoverable cash flows from projects and liquidation;
+The availability of other financial support and the realisable value of collateral; and
+•
+The timing of the expected cash flows.
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+Forward-looking information contained in ECL
+The calculation of ECL incorporates forward-looking information. The Group has performed historical analysis and
+identified Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"), Purchasing Managers' Index ("PMI") and other
+macroeconomic indicators, including impacting ECL for each portfolio. The impact of these economic variables on the
+PD and LGD has been determined by performing statistical regression analysis to understand the correlations among the
+historical changes of the economic variables, PD and LGD. Forecasts of these economic indicators are provided quarterly by
+the Group and provide the best estimate view of the economy over the next year.
+When calculating the weighted average ECL, the optimism, neutral and pessimism scenarios and its weightings determined
+by a combination of macro-statistical analysis and expert judgment are taken into account by the Group.
+Annual Report 2020
+•
+Northeastern China
+Expected credit losses ("ECL") for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL
+depending on whether a significant increase in credit risk on that financial instrument has occurred since initial recognition
+or whether an asset is considered to be credit-impaired. The loss allowance for loans and advances to customers, other than
+those corporate loans and advance to customers which are credit-impaired, is measured using the risk parameters method.
+The key parameters include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"),
+considering the time value of money. Related definitions are as follows:
+4.52%
+66,039
+Loans secured by mortgages
+40,909
+27,878
+31,687
+8,161
+108,635
+Pledged loans
+3,986
+3,252
+4,999
+1,350
+13,587
+Total
+98,963
+74,820
+72,467
+21,257
+267,507
+7,639
+31 December 2019
+18,985
+19,315
+The composition of the Group's gross overdue loans and advances to customers (excluding accrued interest) by collaterals is
+analysed as follows:
+Overdue
+Overdue for
+for 1 to
+90 days to
+31 December 2020
+Overdue
+for 1 to
+Overdue
+for over
+90 days
+1 year
+3 years
+3 years
+Total
+Unsecured loans
+34,753
+23,590
+16,796
+4,107
+79,246
+Guaranteed loans
+20,100
+Overdue
+for 1 to
+Overdue for
+90 days to
+Pledged loans
+3,193
+5,554
+2,215
+2,123
+13,085
+Total
+83,084
+89,625
+66,848
+28,659
+268,216
+Annual Report 2020
+255
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+841,595
+(2) Debt securities investments
+108,491
+11,186
+25,003
+36,689
+Overdue
+for 1 to
+Overdue
+for over
+90 days
+1 year
+3 years
+3 years
+Total
+Unsecured loans
+27,232
+Overdue loans and advances to customers
+21,684
+5,474
+72,221
+Guaranteed loans
+17,046
+25,698
+21,799
+9,876
+74,419
+35,613
+17,831
+16,761,319
+Loans secured by mortgages
+1,427,911
+Water, environment and public utility management
+1,177,193
+926,499
+Production and supply of electricity, heating, gas and water
+1,085,151
+1,021,366
+Real estate
+958,314
+908,254
+Wholesale and retail
+549,412
+537,326
+Finance
+310,559
+300,159
+Construction
+292,748
+284,949
+Science, education, culture and sanitation
+1,252,193
+1,517,265
+Leasing and commercial services
+1,655,775
+4.77%
+18,624,308
+Overseas and others
+Total
+1,492,087
+18,624,308
+8.01%
+100.00%
+1,546,077
+16,761,319
+9.22%
+272,189
+100.00%
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by industry is analysed as
+follows:
+31 December
+2020
+2019
+Transportation, storage and postal services
+2,659,916
+2,304,923
+Manufacturing
+1,718,400
+By industry distribution
+231,260
+31 December
+798,691
+254
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+By collaterals
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by collaterals is analysed
+as follows:
+Unsecured loans
+Guaranteed loans
+Loans secured by mortgages
+Pledged loans
+16,761,319
+Total
+31 December
+6,259,230
+5,369,713
+2,260,445
+2,078,921
+8,703,068
+Mining
+1,401,565
+7,884,774
+31 December
+2020
+18,624,308
+2019
+Subtotal for corporate loans
+341,885
+321,876
+11,102,733
+9,955,821
+211,241
+Personal mortgage and business loans
+Total for loans and advances to customers
+5,512,175
+Others
+6,249,953
+Others
+871,449
+Subtotal for personal loans
+7,115,279
+6,383,624
+Discounted bills
+406,296
+421,874
+865,326
+219,701
+112
+84
+88
+24
+264
+47
+35
+Lowest
+Highest
+54
+Average
+31 December 2019
+71
+15
+VaR.
+77
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+2019
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(3)
+(2)
+40
+(1)
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaR does not add up to the total portfolio
+64
+140
+108
+91
+6
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+Total portfolio VaR
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major market
+risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Value-at-risk ("VaR") analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the
+parent company and a sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both
+trading and non-trading portfolios).
+Interest rate risk
+Currency risk
+Lowest
+Highest
+Average
+31 December 2020
+2020
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+64
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+263
+ICBC
+Annual Report 2020
+(i) VaR
+Commodity risk
+49
+29
+73
+284
+171
+264
+14
+94
+161
+40
+62
+268
+157
+230
+Total portfolio VaR
+Currency risk
+Commodity risk
+41
+Interest rate risk
+3,258,416
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Others
+(equivalent
+to RMB)
+Total
+(equivalent
+to RMB)
+Assets:
+Cash and balances with central banks
+143,125
+21,381
+114,873
+3,537,795
+Due from banks and other financial institutions (*)
+1,083,840
+591,437
+23,981
+121,927
+1,821,185
+Derivative financial assets
+- Financial investments measured at FVTPL
+The Group considers the market risk arising from stock prices fluctuations in respect of its investment portfolios as
+immaterial.
+Financial investments
+18,136,328
+332,657
+337,456
+(equivalent
+to RMB)
+822,891
+Loans and advances to customers
+134,155
+13,988
+10,693
+31,640
+77,834
+16,643,324
+Notes to the Financial Statements
+to RMB)
+(equivalent
+(ii) Currency risk
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on and off the balance sheet on its monetary assets and liabilities and its forecasted cash flows. The analysis
+calculates the effect of a reasonably possible movement in the currency rates against RMB, with all other variables held
+constant, on profit before taxation and equity. A negative amount in the table reflects a potential net reduction in profit
+before taxation or equity, while a positive amount reflects a potential net increase. This effect, however, is based on the
+assumption that the Group's foreign exchange exposures as at the year end are kept unchanged and, therefore, have not
+incorporated actions that would be taken by the Group to mitigate the adverse impact of this currency risk.
+Currency
+USD
+HKD
+Change in
+currency rate
+Effect on profit
+before taxation
+Effect on equity
+2020
+2019
+2020
+2019
+-1%
+-1%
+(155)
+306
+HKD
+USD
+31 December 2020
+A breakdown of the assets and liabilities analysed by currency is as follows:
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+RMB
+265
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+(1,492)
+(1,552)
+(379)
+(402)
+(146)
+260
+Annual Report 2020
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+356,090
+78,593
+1,066,170 1,686,585
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+1,017
+Financial liabilities designated as at FVTPL
+Due to banks and other financial institutions (*)
+60,547
+1,624,350
+762
+2,062
+23,413
+15,116
+2,501
+104,401
+Certificates of deposit
+Due to customers
+12,463,090
+217,433
+255,480
+52,646
+52,003
+15,025 29,741
+7,917
+3,290
+1,524,557 2,098,686
+14,508,728
+360,741
+Others
+Debt securities issued
+23,959,489
+876
+25,960
+5,012,827
+360,762
+10,886
+111,849
+159,434
+2,558,002
+3,704,857
+98,866
+141
+Financial liabilities:
+736,199
+12,345
+5,769
+5,887
+60
+684
+416,268
+1,212,035
+2,054,055
+1,525,557 5,522,935
+10,342,203
+15,614,659
+3,101,731
+39,373,175
+(*)
+Includes reverse repurchase agreements.
+(**)
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+Due to central banks
+One to
+three
+months
+on demand
+Overdue/
+repayable
+31 December 2019
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+terms.
+The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+Less than
+one month
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between
+the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk in the
+banking book is disclosed in note 51(d).
+362,680
+1,073,629
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Credit commitments
+1,179,024
+113,370
+214,884
+528,653
+361,217
+314,306
+Total
+2,711,454
+Credit commitments
+31 December 2019
+Repayable
+on demand
+Less than
+one month
+One to
+three months
+(c) Market risk
+2,963,071
+124,673
+Total
+More than
+five years
+747,810
+three months
+469,933
+114,410
+1,309,180
+five years
+one year
+One to
+Three
+months to
+197,065
+567,317
+One to
+Repayable
+on demand
+7,539
+5,509,974 4,178,079
+31,018
+18,327
+428,832
+666,108
+28,486,132
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+28
+(208)
+85
+(923)
+240
+(778)
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+Cash outflow
+(2,606)
+31 December 2020
+Management does not expect all of the commitments will be drawn before the expiry of the commitments.
+(iii) Analysis of credit commitments by contractual expiry date
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+Less than
+one month
+262
+(*)
+(7,079)
+5,416,285
+(5,423,364)
+2,696,186 1,616,510 34,653
+(2,717,224) (1,612,491) (34,825)
+(21,038) 4,019
+(172)
+400,059
+(401,263)
+(1,204)
+49,846 619,031
+(52,452) (605,109)
+13,922
+Includes repurchase agreements.
+30,251
+542,935
+12,656
+286,561
+Others
+Total assets
+Liabilities:
+235,342
+103,146
+5,550
+198,897
+21,787
+26,496,471
+2,250,806
+469,500
+892,659
+30,109,436
+Due to central banks
+141
+876
+Due to banks and other financial institutions (**)
+85,180
+10,417
+6,157
+23,546
+45,060
+1,695
+Derivative financial liabilities
+66,942
+22
+14,433
+20,845
+Financial liabilities designated as at FVTPL
+1,017
+102,242
+1,713,312
+751
+186,232
+14,809,532
+869,350
+351,007
+296,663
+16,326,552
+Financial investments
+- Financial investments measured at FVTPL
+909,353
+32,450
+6,076
+14,199
+962,078
+- Financial investments measured at FVOCI
+1,041,158
+320,611
+36,698
+78,405
+Property and equipment
+32,490
+28,427
+152
+930
+2,981
+97,883
+Investments in associates and joint ventures
+61,133
+13,345
+102,767
+5,030,922
+―Financial investments measured at amortised cost
+1,476,872
+5,208,167
+Loans and advances to customers
+658,857
+2,529,846
+2,692,003
+Credit commitments
+2,249,604
+499,355
+78,134
+135,978
+2,963,071
+(*)
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+Annual Report 2020
+267
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(d) Interest rate risk in the banking book
+Interest rate risk in the banking book is defined as the risk of loss in the overall gain and economic value of the banking
+book arising from adverse movements in interest rate and term structure, etc. This risk may occur in the following situations:
+when the interest rate fluctuates, because the repricing period of different financial instruments is different, the debt interest
+rate repricing date is earlier than the asset interest rate when interest rate rising and vice versa. The bank will face to the risk
+of reduced or even negative spreads over certain period of time; when the pricing benchmark interest rates are different,
+the changes in the benchmark interest rates are inconsistent; when there are embedded option terms or implied options in
+the business of holding options derivatives or banking book's on- and off-balance sheet business; and due to changes in
+expected default levels or market liquidity, the market's assessment of the credit quality of financial instruments changes,
+leading to changes in credit spreads.
+ICBC
+268
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming
+year, including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates
+on other comprehensive income, calculated by revaluing fixed rate financial assets measured at FVOCI held at year end,
+including the effect of any associated hedges.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held
+constant, of the Group's net interest income and equity. The data set out in the following tables includes trading book's
+data.
+revenue.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+299,724
+Derivative trading: using interest rate derivatives for hedging management in a timely manner.
+Pricing management: managing the deviation of the pricing of interest-generating assets and the benchmark interest
+rates or market interest rates;
+Duration management: optimising the differences in timing between contractual repricing (maturities) of interest-
+generating assets and interest-bearing liabilities;
+Interest rate prediction: analysing the macroeconomic factors that may impact on the PBOC benchmark interest rates
+and market interest rates;
+•
+•
+The Group manages the interest rate risk of banking book through the Asset and the Liability Management Department,
+following methods have been adopted:
+Quota management: optimising the positions of interest-generating assets and interest-bearing liabilities and control
+the impact on profit and loss and equity; and
+129,911
+18,278
+2,319,816
+Certificates of deposit
+28,202
+231,440
+16,247
+79,539
+355,428
+Due to customers
+21,509,155
+837,901
+369,830
+260,769
+22,977,655
+Debt securities issued
+370,064
+320,025
+11,719
+41,067
+Net long position
+27,417,433
+592,935
+451,222
+2,196,621
+24,176,655
+54,185
+623,190
+19,481
+110,278
+490,017
+Total liabilities
+Others
+742,875
+3,414
+5,377
+68,311
+7,341
+446,262
+1,055,920
+33,345,058
+Due to central banks
+50,796
+523
+3,655
+54,974
+Financial liabilities designated as at FVTPL
+13,183
+6,207
+179
+68,369
+87,938
+Derivative financial liabilities
+84,174
+32,326
+93,958
+23,957
+178,537
+39,224
+Certificates of deposit
+3,077,693
+2,332,753
+175,394
+686,933
+2,182,407
+Due to banks and other financial institutions (**)
+140,973
+13,686
+10,787
+32,959
+335,676
+29,510,123
+251,608
+784,483
+-Financial investments measured at FVOCI
+1,089,386
+311,551
+29,136
+110,915
+1,540,988
+― Financial investments measured at amortised cost
+6,078,227
+107,089
+10,743
+69,609
+6,265,668
+Investments in associates and joint ventures
+14,354
+1,019
+169
+6,613
+157,713
+381,037
+Liabilities:
+Total assets
+Others
+796,971
+286,279
+713
+136,037
+147,506
+Property and equipment
+41,206
+25,664
+2,023
+10,504
+Due to customers
+883,119
+(**)
+Includes repurchase agreements.
+266
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December 2019
+USD
+(equivalent
+HKD
+(equivalent
+RMB
+to RMB)
+to RMB)
+Others
+(equivalent
+to RMB)
+Total
+(equivalent
+to RMB)
+Assets:
+Cash and balances with central banks
+19,773
+30,693
+Derivative financial assets
+1,887,554
+72,944
+37,690
+Includes reverse repurchase agreements.
+562,308
+Due from banks and other financial institutions (*)
+3,317,916
+129,792
+10,890
+141,588
+3,035,646
+1,214,612
+23,571,992
+(*)
+175,595
+377,699
+301,916
+25,134,726
+Debt securities issued
+478,569
+272,067
+4,744
+42,747
+798,127
+Others
+583,037
+196,560
+11,170
+14,669
+805,436
+Total liabilities
+27,003,382
+70,784
+464,057
+2,001,018
+Credit commitments
+2,909,515
+341,526
+2,711,454
+(15,233)
+2,506,741
+Net long/(short) position
+30,435,543
+714,394
+461,495
+2,256,272
+76,481
+369,736
+27,766
+3,097
+(**)
+Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+Annual Report 2020
+259
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December 2019
+Overdue/
+One to
+repayable
+Less than
+three
+Three
+months to
+One to
+on demand
+one month
+2,676,415
+20,743
+3,850
+1,018
+615,890
+Cash and balances with central banks
+Includes reverse repurchase agreements.
+Assets:
+(***)
+Undated
+More than
+five years
+five years
+one year
+months
+Total
+3,317,916
+(*)
+3,351,427
+1,336,721
+3,849,682
+5,194,433
+20,908
+25,134,726
+Debt securities issued
+10,717
+19,554
+90,158
+258,867
+418,831
+798,127
+Others
+Total liabilities
+128,581
+15,821,513
+167,625
+81,164
+30,435,543
+516,448
+5,645,015
+981,145 13,324,640
+4,777,861
+(563,541)
+(209,780)
+335,580
+2,909,515
+(14,309,956)
+1,789,845
+1,884,861
+805,436
+33,956
+95,489
+298,621
+Net liquidity gap
+1,233,220
+Due from banks and other financial institutions (*)
+846,498
+242,037
+759,038
+289,932
+55,263
+1,476,872
+-Financial investments measured at
+amortised cost
+Investments in associates and joint ventures
+Property and equipment
+Others
+Total assets
+66,799
+139,014
+708,768
+2,466,714
+1,824,696
+2,176
+31,242
+27,945
+7,050,034 10,523,523
+21,220
+4,727,670
+1,346,275
+2,037,090
+1,107,679
+87,534
+41,887
+268,114
+286,561
+286,561
+32,490
+32,490
+5,208,167
+78,408
+181,267
+43,068
+962,078
+310,639
+493,006
+55,302
+842
+1,887,554
+Derivative financial assets
+498
+5,045
+6,878
+28,784
+20,962
+6,144
+68,311
+Loans and advances to customers
+31,249
+985,299
+712,711
+133,184
+180,555
+161,035
+421,926
+43,762
+10,955
+-Financial investments measured at FVOCI
+10,661
+Financial investments
+16,326,552
+56,957
+8,190,112
+3,559,038
+2,791,186
+-Financial investments measured at FVTPL
+13,499,762
+Due to customers
+335,676
+1,821,185
+Derivative financial assets
+1,139
+20,613
+25,841
+59,392
+16,793
+10,377
+134,155
+Loans and advances to customers
+36,494
+943,639
+743,562
+2,603,777
+3,038,875
+10,659,555
+110,426
+269,234
+102,340
+77,937
+-Financial investments measured at FVOCI
+784,483
+160,412
+5,289
+240,195
+244,359
+27,728
+21,033
+-Financial investments measured at FVTPL
+Financial investments
+18,136,328
+79,888
+683,550
+36,773
+339,155
+6,115,466
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(i) Maturity analysis of the assets and liabilities
+The tables below summarise the maturity profile of the Group's assets and liabilities. The Group's expected the remaining
+maturity of its financial instruments may vary significantly from the following analysis. For example, demand deposits from
+customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+31 December 2020
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+on demand
+one month
+months
+one year
+One to
+five years
+More than
+five years
+866,392
+227,610
+Due from banks and other financial institutions (*)
+3,537,795
+2,601,656
+20,301
+345,966
+3,238
+910,499
+Cash and balances with central banks
+Assets:
+Total
+(***)
+Undated
+2,101
+325,957
+81,970
+1,540,988
+1,995
+54,974
+Financial liabilities designated as at FVTPL
+60,714
+1,669
+5,268
+1,212
+14,535
+4,540
+87,938
+Derivative financial liabilities
+1,738
+21,579
+32,207
+58,840
+15,722
+10,887
+9,944
+154,694
+111,560
+59,478
+Certificates of deposit
+3,077,693
+52,373
+27,326
+272,281
+202,816
+390,573
+2,130,667
+Due to banks and other financial institutions (**)
+140,973
+54,030
+555
+51
+Due to central banks
+286,279
+Property and equipment
+41,206
+41,206
+Investments in associates and joint ventures
+6,265,668
+286,279
+2,210
+2,751,810
+642,382
+199,800
+108,859
+amortised cost
+-Financial investments measured at
+2,560,607
+74,119
+Others
+179,867
+Liabilities:
+33,345,058
+3,351,427
+796,971
+67,268
+39,108
+13,841,088
+324,947
+18,471
+6,626,160
+1,580,065
+2,220,441
+1,511,557
+Total assets
+28,909
+138,401
+4,214,320
+542,935
+10,868
+30,109,436
+32,352
+3,130,269
+10,474
+337,635
+5,401,402
+21,395
+25,497,225
+Debt securities issued
+Others
+498,427
+16,233,536
+11,012 23,469
+9,467
+5,647
+1,707,120 1,728,787
+112,222
+353,643
+495,458
+995,804
+14,894
+4,569,431
+62,143
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+7,077
+(47)
+(581)
+6,822
+(1,860)
+58,071
+2,743
+Derivative cash flows:
+30,723,617
+582,365
+5,902,378
+619,198
+28,620
+Derivative financial instruments settled on net basis
+Cash outflow
+203,992 276,707
+113,008 154,446
+1,376,867 3,957,547
+13,506,194
+terms.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+31 December 2020
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+Total
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+52
+526
+52,403
+Due to customers
+Certificates of deposit
+2,167,704
+Due to banks and other financial institutions (*)
+88,518
+4,540
+391,443
+59,707
+1,233,820
+14,658
+5,278
+1,671
+61,159
+Financial liabilities designated as at FVTPL
+54,968
+1,987
+1,212
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+97,545
+(95,502)
+2,043
+1,119,090 189,256 26,883
+(846,380) (179,399) (25,437)
+272,710
+9,857
+1,446
+502,881
+59,472
+1,908,790
+6,309,480 12,914,107
+239,473
+24,986,873
+Financial investments
+-Financial investments measured at FVTPL
+10,371
+10,634
+44,638
+399,486
+181,783
+202,154
+131,736
+980,802
+-Financial investments measured at FVOCI
+2,146,968
+3,317,165
+2,941,781
+810,717
+145,481
+67,422
+3,321,529
+-Financial investments measured at amortised cost
+Others
+50,326
+349,679
+843,800
+266,634
+89,714
+43,294
+1,643,447
+980,305 655,210
+(873,719) (494,113)
+106,586 161,097
+2,676,415
+7,463
+314,046
+911,870 3,516,705
+3,068,289
+(2,514,550)
+553,739
+(*)
+Includes repurchase agreements.
+Annual Report 2020
+261
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+31 December 2019
+Overdue/
+One to
+repayable
+on demand
+Less than
+three
+1,018
+181,303 849,397
+34,735 1,060,503
+Loans and advances to customers (**)
+Due from banks and other financial institutions (*)
+615,890
+Total
+(***)
+20,743
+Undated
+five years
+one year
+months
+one month
+One to
+Three
+months to
+More than
+five years
+(*) Includes reverse repurchase agreements.
+1,691
+3,359,551
+Due to customers
+12,461,763
+1,063,032
+1,581,922
+4,725,038
+3,121,105
+24,795
+22,977,655
+Debt securities issued
+14,399
+24,999
+77,835
+276,082
+349,560
+742,875
+Others
+Total liabilities
+5,443,216
+(715,546)
+(701,406)
+372,311
+(13,148,663)
+Net liquidity gap
+2,047,681
+355,428
+1,664,779
+31,614
+60,474
+214,862
+58,588
+148,125
+109,527
+14,256,342
+623,190
+3,551,188
+8,153
+158,141
+Liabilities:
+Due to central banks
+46,122,858
+141
+876
+1,017
+Financial liabilities designated as at FVTPL
+60,486
+760
+2,054
+21,629
+14,812
+2,501
+102,242
+Derivative financial liabilities
+769
+6,547
+78,222
+Certificates of deposit
+2,529,846
+38,629
+46,856
+250,474
+110,912
+215,289
+1,623,797
+Due to banks and other financial institutions (**)
+85,180
+7,128
+22,830
+42,466
+354,801
+454,227
+3,498,846 10,069,296
+5,440
+3,317,165
+826,026
+150,441
+271,393
+115,710
+21,431 28,274 227,824
+82,953 104,163
+109,760 207,927
+27,405 19,349
+1,691,662
+2,152,760
+290,770
+1,786,101
+Others
+-Financial investments measured at amortised cost
+-Financial investments measured at FVOCI
+10,953
+-Financial investments measured at FVTPL
+2,601,656 3,541,307
+2,127,791
+527,557 29,710,420
+595,580
+40,478 298,328
+6,424,534 17,121,574
+765,296
+75,956
+5,231,400
+27,417,433
+10,687,256
+21,214,128
+660,910
+791
+386,509
+88
+8,449
+7,550,757
+3,150
+3,331,990
+761,694
+1,705,647
+9,248
+20,301
+352,359
+3,570,003
+3,136,236
+227,824 867,500
+1,041,610
+Overdue/
+repayable
+on demand
+31 December 2020
+The tables below summarise the maturity profile of the Group's financial instruments based on the contractual undiscounted
+cash flows. The balances of some items in the tables below are different from the balances on the consolidated statement of
+financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's expected cash
+flows on these instruments may vary significantly from the following analysis. For example, demand deposits from customers
+are expected to maintain a stable or increasing balance although they have been classified as repayable on demand in the
+following tables.
+(ii) Maturity analysis of contractual undiscounted cash flows
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Less than
+260
+Includes repurchase agreements.
+2,692,003
+6,750
+341,302
+983,897
+(**)
+Includes reverse repurchase agreements.
+(*)
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+one month
+ICBC
+Loans and advances to customers (**)
+Financial investments
+910,499
+One to
+three
+months
+2,101
+Due from banks and other financial institutions (*)
+Financial assets:
+41,245
+Non-derivative cash flows:
+Cash and balances with central banks
+(***)
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+Total
+15,787,410
+286,561
+6,521,855
+Total assets
+542,935
+539,464
+76
+3,395
+Others
+286,561
+-Financial investments measured
+Property and equipment
+32,490
+---- 32,490
+joint ventures
+Investments in associates and
+5,208,167
+1,812,788
+2,405,542
+700,577
+3,501,898
+289,260
+at amortised cost
+1,476,872
+2,329,574
+102,242
+30,109,436
+Certificates of deposit
+2,529,846
+245,817
+55,263
+3,514
+38,624
+38,775
+236,160
+2,212,773
+other financial institutions (**)
+Due to banks and
+1,968,699
+85,180
+Derivative financial liabilities
+69,578
+12,068
+19,762
+834
+Financial liabilities designated as
+1,017
+876
+141
+Due to central banks
+Liabilities:
+85,180
+278,014
+Due from banks and
+233,683
+3,317,916
+347,058
+2,970,858
+Cash and balances with central banks
+Assets:
+Total
+bearing
+five years
+interest-
+More than
+One to
+five years
+other financial institutions (*)
+one year
+months to
+three
+Non-
+Three
+Less than
+31 December 2019
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+102,708
+ICBC
+270
+months
+1,317,721
+491,964
+52,363
+232,121
+at FVOCI
+-Financial investments measured
+962,078
+560,518
+102,776
+45,262
+128,720
+124,802
+at FVTPL
+-Financial investments measured
+Financial investments
+16,326,552
+54,370
+135,154
+320,940
+4,966,835
+10,849,253
+Loans and advances to customers
+68,311
+68,311
+Derivative financial assets
+1,887,554
+24,664
+842
+677,791
+6,903
+Valid portion of capital reserve
+Due to customers
+4,178
+3,552
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+1,367,180
+1,508,562
+Retained profits
+304,876
+339,486
+292,149
+(10,178)
+322,692
+148,534
+General reserve
+Surplus reserve
+356,407
+356,407
+Paid-in capital
+2,472,774
+2,669,055
+Core tier 1 capital
+31 December 2020 31 December 2019
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+149,067
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(1,083)
+15,500
+199,456
+The data set out in the above table includes trading book's data.
+219,143
+Additional tier 1 capital instruments and related premium
+200,249
+219,790
+Additional tier 1 capital
+2,457,274
+2,653,002
+Net core tier 1 capital
+7,980
+16,053
+7,980
+Investments in core tier 1 capital instruments issued by financial
+(4,451)
+(4,616)
+that are not fair valued on the balance sheet
+Cash flow hedge reserves that relate to the hedging of items
+2,933
+4,582
+Other intangible assets other than land use rights
+9,038
+8,107
+Goodwill
+institutions that are under control but not subject to consolidation
+Notes to the Financial Statements
+ICBC
+272
+419,395
+3,281,868
+5,073,225
+17,381,196
+Total liabilities
+623,190
+592,373
+7,211
+15,970
+5,087
+2,549
+1,261,749
+Others
+349,552
+122,446
+39,201
+231,676
+Debt securities issued
+22,977,655
+511,104
+24,008
+3,084,830
+4,670,307
+14,687,406
+742,875
+27,417,433
+Interest rate mismatch
+(1,593,786)
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy
+ratio in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements. The
+requirements pursuant to these regulations may have certain differences comparing to those applicable in Hong Kong and
+other jurisdictions.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the former CBRC officially
+approved the Bank to adopt advanced capital management approaches. Within the scope of the approval, the foundation
+internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit risk, the internal
+model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory requirements.
+Domestic commercial banks should meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For domestic systemically important banks, minimum
+core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio should reach 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, corresponding minimum ratios should reach 7.50%, 8.50% and
+10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and the
+requirements of capital adequacy ratios differ by countries.
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBIRC. The
+required information is respectively filed with the CBIRC by the Group semi-annually and quarterly.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution policy,
+issue or repurchase own shares, qualifying additional tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+•
+The Group's objectives on capital management are:
+(e) Capital management
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+271
+Annual Report 2020
+The data set out in the above table includes trading book's data.
+Includes repurchase agreements.
+(**)
+Includes reverse repurchase agreements.
+(*)
+N/A
+N/A
+1,910,179
+220,030
+1,448,630
+355,428
+Includes repurchase agreements.
+One to
+five years
+Includes reverse repurchase agreements.
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+269
+Annual Report 2020
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's current interest rate risk profile. This effect, however, does not incorporate actions that
+would be taken by management to mitigate the impact of interest rate risk. The projections above also assume that interest
+rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net interest income
+and equity in the case where some rates change while others remain unchanged.
+39,923
+10,007
+(37,255)
+(10,007)
+31 December 2020
+1,147
+(1,144)
+1,553
+43
+3,630
+(43)
+(3,630)
+6,420
+979
+(6,416)
+(979)
+Total
+(1,553)
+Others
+Less than
+three
+months
+Non-
+10,463,879
+6,912,607
+Loans and advances to customers
+134,155
+134,155
+Derivative financial assets
+1,821,185
+29,611
+5,289
+35,806
+345,048
+Three
+1,405,431
+Due from banks and
+3,537,795
+347,676
+3,190,119
+Cash and balances with central banks
+Assets:
+Total
+bearing
+interest-
+More than
+five years
+months to
+one year
+other financial institutions (*)
+HKD
+USD
+32,313
+(169)
+Total
+Others
+HKD
+USD
+34,753
+27,286
+(31,709)
+(27,286)
+RMB
+equity
+(7,340)
+net interest income
+net interest income
+Currency
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Effect on
+Increased by 100 basis points
+31 December 2020
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Valid portion of minority interests
+equity
+169
+7,345
+(1,734)
+6,951
+(29,652)
+(6,951)
+RMB
+equity
+net interest income
+equity
+net interest income
+Currency
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Increased by 100 basis points
+Effect on
+31 December 2019
+43,935
+29,219
+(40,883)
+(29,219)
+1,769
+30
+(1,766)
+(30)
+68
+1,734
+(68)
+406,172
+(**)
+336,693
+18,136,328
+25,134,726
+571,470
+20,242
+5,137,289
+3,808,680
+15,597,045
+Due to customers
+335,676
+7,010
+154,366
+174,300
+Debt securities issued
+Certificates of deposit
+13,407
+27,239
+52,264
+268,836
+2,715,947
+other financial institutions (**)
+Due to banks and
+140,973
+140,973
+Derivative financial liabilities
+87,938
+3,077,693
+71,271
+169,119
+149,678
+(*)
+N/A
+N/A
+2,884,728
+(1,560,515)
+7,486,102
+(6,378,856)
+Interest rate mismatch
+30,435,543
+1,570,851
+472,750
+60,501
+5,376,554
+18,664,582
+Total liabilities
+805,436
+773,695
+6,426
+16,703
+5,987
+2,625
+Others
+798,127
+418,829
+4,350,806
+14
+11,618
+63
+6,265,668
+2,553,846
+2,688,862
+638,819
+384,141
+at amortised cost
+-Financial investments measured
+1,540,988
+81,970
+314,100
+614,011
+Investments in associates and
+258,282
+at FVOCI
+-Financial investments measured
+784,483
+317,253
+147,550
+71,188
+130,810
+117,682
+at FVTPL
+-Financial investments measured
+Financial investments
+272,625
+joint ventures
+41,206
+41,206
+4,972
+at FVTPL
+Financial liabilities designated as
+54,974
+35
+1,992
+52,373
+574
+Due to central banks
+Liabilities:
+33,345,058
+2,048,907
+3,357,478
+3,816,039
+11,836,908
+12,285,726
+Total assets
+796,971
+793,780
+70
+3,121
+Others
+286,279
+286,279
+Property and equipment
+16,977
+647
+at FVTPL
+Net tier 1 capital
+(592)
+Financial liabilities designated as at FVTPL
+Financial liabilities:
+227,018
+(15,485)
+(32,084)
+51,883
+(528)
+3,602
+219,630
+59,216
+(23)
+(1,424)
+18,298
+(528)
+44,895
+Equity investments
+464
+(47)
+464
+47
+Debt securities
+Financial investments measured at FVOCI
+25,563
+(2,025)
+(12,071)
+(615)
+(1,052)
+2019
+level 3
+31 December
+Transfer out of
+Disposals and
+Settlements
+Additions
+gains/(losses)
+recorded
+in other
+gains/(losses)
+recorded in
+profit or loss
+2019
+1 January
+Total
+Derivative financial liabilities
+Total
+(2,211)
+(1,027)
+377
+(2)
+85
+(1,644)
+(1,596)
+(1,027)
+377
+(2)
+108
+Financial assets:
+(24,268)
+6,575
+(117)
+Derivative financial assets
+Financial assets:
+2020
+31 December
+Transfer in/
+(out) of level 3
+Disposals and
+Settlements
+Additions
+Total losses
+recorded
+in other
+comprehensive
+income
+Total
+gains/(losses)
+recorded in
+profit or loss
+2020
+1,010
+1 January
+(b) Movement in level 3 financial instruments measured at fair value
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+276
+1,083,740
+1,644
+1,078,058
+4,038
+85,180
+1,052
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and financial
+liabilities which are recorded at fair value and the movement during the year:
+782
+33
+(345)
+55,444
+Funds and other investments
+73,710
+(2,182)
+(2,203)
+12,604
+1,319
+64,172
+Equity investments
+66,046
+(19)
+(2,436)
+13,909
+1,679
+52,913
+Debt securities
+Financial investments measured at FVTPL
+328
+(760)
+(61)
+1,149
+measured at FVTPL
+Loans and advances to customers
+1,691
+211
+Derivative financial assets
+80,138
+960
+Loans and advances to customers
+Gains or losses on level 3 financial instruments included in the statement of net profit or loss for the year comprise:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+277
+Annual Report 2020
+(1,644)
+2,003
+351
+(89)
+(363)
+Net gains for the year
+(3,546)
+1,170
+244
+(89)
+(203)
+(2,174)
+Derivative financial liabilities
+(592)
+833
+107
+(160)
+(1,372)
+(1,052)
+Financial liabilities designated as at FVTPL
+Net gains for the year
+(i)
+793
+ICBC
+278
+As at 31 December 2020, the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were immaterial.
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities, asset-backed securities, and certain unlisted equity instruments. These financial instruments are valued using cash
+flow discount method and market approach, which incorporate various non-observable assumptions such as discount rate,
+market rate volatilities, expected rate of return, and market liquidity discounts.
+(d) Valuation of financial instruments with significant unobservable inputs
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+As at the end of the reporting period, certain financial instruments were transferred out from level 3 to level 2 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+(ii) Transfers between level 2 and level 3
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+(c) Transfers between levels
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the reporting
+period.
+3,581
+782
+Total
+2019
+Unrealised
+Realised
+3,687
+2,675
+Total
+2020
+Unrealised
+Realised
+1,012
+Transfers between level 1 and level 2
+4,363
+Financial liabilities:
+219,630
+(1,785)
+64,172
+(682)
+(172)
+44,899
+20
+20,107
+Equity investments
+52,913
+(637)
+(1,235)
+16,803
+Funds and other investments
+3,255
+Debt securities
+Financial investments measured at FVTPL
+1,149
+1,010
+(392)
+(519)
+17
+686
+19
+444
+measured at FVTPL
+34,727
+151,513
+488
+31,097
+(129,989)
+120,670
+(1,682)
+4,726
+227,690
+(340)
+33
+307
+Other investments
+44,895
+47
+(1)
+27,121
+(1,714)
+19,489
+Equity investments
+(142)
+47
+(1)
+143
+Debt securities
+Financial investments measured at FVOCI
+55,444
+(74)
+(127,580)
+944
+3,990
+comprehensive
+income
+102,242
+Loans and advances to customers
+154,612
+154,612
+134,155
+1,691
+127,773
+4,691
+measured at FVTPL
+Reverse repurchase
+Derivative financial assets
+fair value on a recurring basis:
+measured at FVTPL
+Financial assets which are measured at
+Level 3
+Level 2
+Level 1
+31 December 2020
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+(a) Financial instruments recorded at fair value
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+274
+For unquoted other liabilities designated as at FVTPL, the discounted cash flow model is used based on current yield curve
+appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied
+based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which is calibrated by active
+market quotes of standard European options with the same underlying.
+Total
+3,586
+328
+3,914
+Financial investments measured at FVOCI
+784,483
+165,319
+570,156
+49,008
+224,943
+25,563
+175,252
+24,128
+Funds and other investments
+93,728
+73,710
+2,718
+17,300
+Equity investments
+465,812
+66,046
+392,186
+7,580
+Debt securities
+Financial investments measured at FVTPL
+414,292
+414,292
+measured at FVOCI
+Loans and advances to customers
+Other liabilities designated as at fair value through profit or loss
+Debt securities
+The loans and advances to customers valued by the valuation technology are mainly the bill business and the discounted
+cash flow model is used. For the bank acceptance bill, based on the different credit risk of the acceptor, the interest rate
+curve is set up with the actual transaction data in the market as the sample; for the commercial bill, based on the interbank
+offered rate, the interest rate curve is constructed according to the credit risk and liquidity point difference adjustment.
+Structured products are mainly valued using dealer's quotations.
+3,396,186
+Refers to risk-weighted assets after capital floor and adjustments.
+(i)
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+Core tier 1 capital adequacy ratio
+Risk-weighted assets (i)
+Net capital base
+Significant minority investments in tier 2 capital instruments issued by
+financial institutions that are not subject to consolidation
+Tier 2 capital deductions
+1,707
+3,121,479
+1,114
+170,712
+Surplus provision for loan impairment
+272,680
+351,568
+Valid portion of tier 2 capital instruments and related premium
+463,956
+523,394
+Tier 2 capital
+2,657,523
+Derivative financial liabilities
+2,872,792
+Valid portion of minority interests
+20,124,139
+18,616,886
+13.18%
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc.
+Derivatives
+A majority of the financial investments classified as level 2 are RMB bonds. The fair value of these bonds are determined
+based on the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a
+valuation technique for which all significant inputs are observable market data.
+Financial investments valued using valuation techniques mainly consist of debt securities, asset-backed securities, and
+unlisted equity instruments. The main inputs used by the Group in valuing these investments includes either only observable
+data or both observable and non-observable data. Observable inputs include assumptions regarding current interest rates;
+unobservable inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity
+discounts.
+Financial investments
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the
+framework of fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter
+solutions. Operating procedures specify measurement operating procedures, valuation date, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for
+daily transactions management. Financial Accounting Department plays a lead role of developing accounting policies of fair
+value measurement, valuation methodologies and system implementation. Risk Management Department is responsible for
+verifying trade details and valuation models.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+273
+Annual Report 2020
+valuation techniques which use inputs which have a significant effect on the recorded fair value that are not
+based on observable market data.
+valuation techniques for which all inputs which have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+Level 3:
+Level 2:
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 1:
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+52. FAIR VALUE OF FINANCIAL INSTRUMENTS
+16.77%
+16.88%
+14.27%
+14.28%
+13.20%
+Loans and advances to customers
+349,978
+189,569
+464
+742,913
+46,636
+523,202
+55,444
+441,534
+26,224
+Funds and other investments
+80,619
+64,172
+2,037
+14,410
+172,529
+Equity investments
+52,913
+299,342
+6,002
+Debt securities
+Financial investments measured at FVTPL
+423,993
+416,356
+7,637
+measured at FVOCI
+Loans and advances to customers
+6,425
+358,257
+962,078
+Financial investments measured at FVOCI
+Debt securities
+101,602
+1,108,576
+592
+48
+Financial liabilities designated as at FVTPL
+896,318
+896,318
+fair value on a recurring basis:
+Financial liabilities which are measured at
+3,097,336
+219,630
+2,476,485
+401,221
+1,476,872
+44,942
+55,263
+44,895
+9,351
+1,089,632
+342,298
+1,017
+Equity investments
+1,421,609
+47
+1,080,281
+341,281
+1,149
+5,276
+Due to customers
+Loans and advances to customers
+87,938
+615
+86,992
+331
+Financial liabilities designated as at FVTPL
+Derivative financial liabilities
+693,173
+693,173
+Due to customers
+fair value on a recurring basis:
+3,032,444
+227,018
+2,393,245
+412,181
+1,540,988
+59,680
+1,122,826
+358,482
+81,970
+Equity investments
+59,216
+14,250
+1,459,018
+8,504
+5,846
+133,531
+Financial liabilities which are measured at
+140,973
+159,657
+159,657
+measured at FVTPL
+1,596
+Derivative financial assets
+68,311
+1,010
+62,651
+4,650
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Reverse repurchase
+Level 2
+6,177
+Level 3
+913,696
+2,211
+922,084
+Annual Report 2020
+275
+measured at FVTPL
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December 2019
+Level 1
+93,724
+52,709
+42,492
+36,916
+32,328
+Over 12 months
+Between 6 and 12 months
+Between 3 and 6 months
+2019
+95,507
+31 December
+property and equipment, net of depreciation charges;
+31 December
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+(c) Loans and advances to customers (excludes accrued interest)
+(i) Overdue loans and advances to customers
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+ICBC
+282
+investments in overseas subsidiaries, associates and joint ventures.
+capital and statutory reserves of overseas branches; and
+2020
+Unaudited Supplementary Financial Information
+Yangtze River Delta
+185,132
+Overseas and others
+Northeastern China
+Pearl River Delta
+Central China
+Western China
+Bohai Rim
+Head Office
+(ii) Overdue loans and advances to customers by geographical distribution
+The definition of overdue loans and advances to customers is set out as follows:
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+1.10%
+0.90%
+0.56%
+0.50%
+0.31%
+0.23%
+Over 12 months
+Between 6 and 12 months
+0.23%
+0.17%
+Between 3 and 6 months
+As a percentage of the total gross loans and advances to customers:
+168,544
+107,927
+2,151,993
+903
+Net (short)/long position
+Net option position
+Forward sales
+Forward purchases
+Spot liabilities
+Spot assets
+148,338
+26,634
+882
+120,822
+Net structural position
+Net structural position
+16,520
+106,019
+(66,577)
+Net (short)/long position
+(12,006)
+(1,597)
+3,651
+Net option position
+(iii) Rescheduled loans and advances to customers
+(14,060)
+55,962
+28,954
+31 December 2019
+HKD
+468,597
+78,070
+87,337
+43,148
+118,693
+(74,504)
+(65,694)
+(1,593)
+(118)
+(63,983)
+(3,327,804)
+USD
+(726,443)
+(2,479,103)
+3,216,575
+500,414
+223,694
+2,492,467
+Total
+3,483,127
+(3,218,867)
+(591,767)
+(451,222)
+(2,175,878)
+Others
+862,537
+(122,258)
+31 December
+31 December
+2020
+2020
+Retained profits
+2c
+X22
+304,876
+339,486
+General reserve
+2b
+X21
+292,149
+322,692
+1,508,562
+Surplus reserve
+1,964,205
+2,170,740
+Retained earnings
+2
+X18
+356,407
+356,407
+Paid-in capital
+1
+Reference
+2a
+31 December
+2019
+1,367,180
+3
+Core tier 1 capital before regulatory adjustments
+Core tier 1 capital: Regulatory adjustments
+(3,827,849)
+3,552
+Valid portion of minority interests
+56
+period (only applicable to non-joint stock companies.
+Fill in O for joint stock banks)
+Valid portion to core tier 1 capital during the transition
+4
+X24
+(1,083)
+X23
+(10,178)
+3b
+X19
+149,067
+148,534
+Capital reserve
+За
+public reserves)
+147,984
+138,356
+Accumulated other comprehensive income (and other
+Others
+31 December
+Core tier 1 capital:
+(i) Capital composition
+% of total
+31 December 2019
+31 December 2020
+268,216
+267,507
+11,753
+10,705
+37,190
+25,489
+26,608
+Rescheduled loans and advances
+41,772
+28,398
+41,351
+38,411
+40,266
+40,207
+51,665
+46,167
+37,579
+36,358
+2019
+21,804
+Item
+11,960
+% of total
+loans and
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(e) Correspondence between balance sheet in published financial statements and capital
+composition
+The Bank is a commercial bank incorporated in Chinese mainland with its banking business primarily conducted in Chinese
+mainland. As at 31 December 2020, substantial amounts of the Bank's exposures arose from businesses with Chinese
+mainland entities or individuals. Analyses of various types of exposures by counterparty have been disclosed in the respective
+notes to the financial statements.
+(d) Exposures to Chinese mainland non-bank entities
+(In RMB millions, unless otherwise stated)
+Unaudited supplementary financial information for the year ended 31 December 2020
+Unaudited Supplementary Financial Information
+283
+Annual Report 2020
+0.03%
+loans and
+advances
+0.06%
+5,984
+9,905
+Rescheduled loans and advances overdue
+for less than three months
+(0.01%)
+(1,335)
+(0.01%)
+(2,055)
+Less: Rescheduled loans and advances
+overdue for more than three months
+0.04%
+7,319
+advances
+0.05%
+(754,429)
+Property and equipment
+(2,864,682)
+1,189,496
+1,242,972
+3,251,450
+3,459,273
+Financial investments measured at FVTPL
+Financial investments
+Loans and advances to customers
+Reverse repurchase agreements
+Derivative financial assets
+Due from banks and other financial institutions
+90,669
+560,271
+Cash and balances with central banks
+2019
+31 December
+31 December
+2020
+53. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2020
+Notes to the Financial Statements
+279
+Annual Report 2020
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of the
+Group's assets and liabilities. However, other institutions may use different assumptions and methods. Therefore, the fair
+values disclosed by different financial institutions may not be entirely comparable.
+ASSETS
+The fair values of subordinated bonds and tier 2 capital notes are determined with reference to the available market
+values. If quoted market prices are not available, then fair values are estimated on the basis of pricing models or
+discounted cash flows.
+35,991
+17,307,271
+65,858
+Deferred income tax assets
+127,518
+131,865
+2,669,055
+34,242
+34,242
+Investments in associates
+145,320
+147,383
+644,278
+Investments in subsidiaries
+6,108,146
+Financial investments measured at amortised cost
+1,212,515
+1,265,920
+Financial investments measured at FVOCI
+804,076
+574,295
+7,087,260
+7,948,361
+15,469,899
+5,070,669
+60,829
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, then fair values are estimated on the basis of pricing models or discounted cash flows.
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and financial liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described
+below are adopted to determine the fair values of these financial assets and financial liabilities:
+432,954
+430,064
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+138,662
+138,662
+6,072,770
+6,072,770
+88,094
+88,094
+6,299,526
+6,265,668
+6,299,526
+430,064
+6,265,668
+Financial assets
+Level 3
+Level 2
+Level 1
+Fair value
+Carrying
+amount
+31 December 2020
+No significant difference between the carrying amount and the fair value of the financial assets and financial liabilities not
+measured at fair value, except for the following items:
+(e) Fair value of financial assets and liabilities not carried at fair value
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Financial investments measured at amortised cost
+(i)
+432,954
+432,954
+355,307
+355,307
+355,307
+355,307
+350,204
+350,204
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+220,168
+220,168
+4,979,955
+4,979,955
+92,991
+92,991
+31 December 2019
+5,293,114
+5,293,114
+5,208,167
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+Level 2
+Level 1
+Fair value
+amount
+Carrying
+432,954
+5,208,167
+(208,738)
+Other assets
+365,179
+The financial statements were approved and authorised for issue by the board of directors on 26 March 2021.
+56. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+In accordance with the requirements of the Notice on Strictly Implementing Accounting Standards for Enterprises and
+Effectively Strengthening the Work of Enterprises' 2020 Annual Reports issued by the Ministry of Finance of the People's
+Republic of China, State-owned Assets Supervision and Administration Commission of the State Council, the China Banking
+and Insurance Regulatory Commission and the China Securities Regulatory Commission, the Bank reclassified credit card
+instalment fee income and related expenses from fees and commission income and related expenses to interest income and
+other operating income (net), and adjusted the comparative figures for the same period accordingly.
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+55. COMPARATIVE AMOUNTS
+The Bank issued a tier 2 capital bond of RMB30.0 billion in China's national inter-bank bond market in January 2021. All
+proceeds will be used to replenish the Bank's tier 2 capital in accordance with the applicable laws as approved by relevant
+regulatory authorities.
+Issuance of Tier 2 Capital Bonds
+A final dividend of RMBO.2660 (pre-tax) per share after the appropriation of statutory surplus reserve and general reserve,
+was approved at the board of directors' meeting held on 26 March 2021, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2020, the final dividend amounted to approximately RMB94,804 million. The dividend payable was not recognised as a
+liability as at 31 December 2020.
+54. AFTER THE REPORTING PERIOD EVENT
+The Profit Distribution Plan
+Financial Statements for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Annual Report 2020
+Notes to the Financial Statements
+280
+General Manager of Finance
+and Accounting Department
+Liu Yagan
+Vice Chairman and President
+Liao Lin
+Chen Siqing
+Chairman
+28,411,462
+31,630,879
+2,571,423
+2,789,748
+ICBC
+1,259,397
+281
+Unaudited supplementary financial information for the year ended 31 December 2020
+Forward sales
+3,641,381
+457,654
+327,221
+2,856,506
+(3,414,874)
+(713,341)
+(461,495)
+(2,240,038)
+Total
+3,669,310
+Unaudited Supplementary Financial Information
+Others
+1,028,233
+2,195,697
+Forward purchases
+Spot liabilities
+Spot assets
+USD
+31 December 2020
+(b) Foreign currency concentrations
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and IFRSS
+for the year ended 31 December 2020 (2019: no differences). There are no differences between the equity attributable to
+equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2020 (As at 31 December 2019: no
+differences).
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+(In RMB millions, unless otherwise stated)
+HKD
+445,380
+642,714
+1,397,575
+816,623
+297,696
+277,683
+Certificates of deposit
+74,384
+90,113
+Repurchase agreements
+2,162,131
+2,707,115
+Due to banks and other financial institutions
+50,726
+Due to customers
+94,891
+85,555
+70,938
+Financial liabilities designated as at FVTPL
+1,017
+54,304
+Due to central banks
+LIABILITIES
+28,411,462
+31,630,879
+TOTAL ASSETS
+Derivative financial liabilities
+756,163
+24,338,306
+Income tax payable
+199,456
+219,143
+356,407
+356,407
+25,840,039
+28,841,131
+302,505
+461,743
+594,828
+658,765
+22,178,290
+TOTAL EQUITY AND LIABILITIES
+Retained profits
+Reserves
+Other equity instruments
+Share capital
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+92,907
+87,273
+TOTAL EQUITY
+4,178
+2,472,774
+285
+7 8 9
+507,096
+Surplus provision for loan impairment under the internal
+ratings-based approach
+78
+tier 2 capital under the weighted approach
+X02
+7,923
+7,802
+X01
+17,647
+23,204
+Provision for loan impairment under the weighted approach
+Valid cap of surplus provision for loan impairment in
+77
+76
+tier 2 capital
+Valid caps of surplus provision for loan impairment in
+60,846
+65,719
+N/A
+N/A
+X06+X10+X13
+37,654
+460,851
+X03
+79
+162,910
+31 December 2020 31 December 2020 31 December 2019 31 December 2019
+(ii) Consolidated financial statements
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+287
+Annual Report 2020
+63,383
+67,463
+60,855
+40,570
+32,452
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period
+due to cap
+84
+83
+82
+the current period due to phase-out arrangements
+Excluded from core tier 1 capital due to cap
+81
+80
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for
+Valid cap of surplus provision for loan impairment in
+tier 2 capital under the internal ratings-based approach
+X04
+181,646
+85
+X05+X07+X08+
+X09+X12+X29+X30
+84,515
+138,247
+Including: Countercyclical buffer requirement
+66
+2.5%
+2.5%
+Including: Capital conservation buffer requirement
+65
+4.0%
+4.0%
+64
+16.77%
+67
+16.88%
+63
+14.27%
+14.28%
+Tier 1 capital adequacy ratio
+62
+13.20%
+13.18%
+Core tier 1 capital adequacy ratio
+61
+Requirements for capital adequacy ratio and reserve capital
+Capital adequacy ratio
+Consolidated
+Including: G-SIB buffer requirement
+1.5%
+Undeducted portion of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Mortgage servicing rights (net of deferred tax liabilities)
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+75
+74
+73
+72
+8.0%
+8.0%
+6.0%
+6.0%
+5.0%
+1.5%
+5.0%
+Capital adequacy ratio
+Core tier 1 capital adequacy ratio
+71
+Tier 1 capital adequacy ratio
+70
+69
+Domestic minima for regulatory capital
+8.20%
+8.18%
+68 Percentage of core tier 1 capital meeting buffers to
+risk-weighted assets
+Amounts below the thresholds for deduction
+balance sheet
+as in published
+financial
+statements*
+Balance sheet
+244,902
+249,008
+249,067
+Fixed assets
+40,470
+32,490
+49,186
+41,206
+Long-term equity investments
+5,155,869
+244,846
+5,208,167
+6,265,668
+― Financial investments measured at
+amortised cost
+1,451,357
+1,476,872
+1,498,008
+1,540,988
+― Financial investments measured at
+FVOCI
+921,042
+962,078
+732,478
+6,198,842
+784,483
+Construction in progress
+35,166
+Notes to the Financial Statements
+ICBC
+288
+Prepared in accordance with PRC GAAP.
+(*)
+29,955,543
+30,109,436
+33,142,554
+33,345,058
+Total assets
+35,173
+230,111
+440,548
+453,592
+Other assets
+62,536
+62,536
+67,713
+67,713
+Deferred income tax assets
+39,712
+39,714
+244,283
+18,616,886
+― Financial investments measured at
+FVTPL
+7,647,117
+450,976
+475,325
+489,231
+522,913
+3,317,916
+3,317,916
+3,537,795
+3,537,795
+other financial institutions
+Placements with banks and
+277,705
+Precious metals
+Due from banks and other financial
+Cash and balances with central banks
+Assets
+scope of
+consolidation*
+under
+regulatory
+Balance sheet
+financial
+statements*
+Consolidated
+balance sheet
+as in published
+scope of
+consolidation*
+under
+regulatory
+institutions
+7,528,268
+277,705
+238,061
+8,429,328
+8,591,139
+Financial investments
+16,325,339
+16,326,552
+18,134,777
+18,136,328
+Loans and advances to customers
+841,954
+845,186
+238,061
+738,958
+Reverse repurchase agreements
+68,311
+68,311
+134,155
+134,155
+Derivative financial assets
+567,043
+567,043
+558,984
+558,984
+739,288
+X25
+20,124,139
+60
+28
+additional tier 1 capital and tier 2 capital
+Undeducted shortfall that should be deducted from
+Others that should be deducted from core tier 1 capital
+27
+26c
+subject to consolidation
+financial institutions that are under control but not
+Shortfall in core tier 1 capital instruments issued by
+26b
+subject to consolidation
+X11
+7,980
+7,980
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+26a
+N/A
+N/A
+N/A
+N/A
+Reference
+Total regulatory adjustments to core tier 1 capital
+16,053
+29
+Core tier 1 capital
+X26
+793
+647
+Valid portion of minority interests
+34
+transition period
+Invalid instruments to additional tier 1 capital after the
+33
+79,987
+Including: Portion classified as liabilities
+2019
+32
+199,456
+199,456
+139,156
+Including: Portion classified as equity
+31
+219,143
+Additional tier 1 capital instruments and related premium
+30
+Additional tier 1 capital:
+15,500
+2,457,274
+2,653,002
+X28+X32
+2020
+31 December
+31 December
+risk on fair valued liabilities
+Unrealised gains and losses due to changes in own credit
+14
+Gain on sale related to asset securitisation
+13
+Shortfall of provision for loan impairment
+12
+X20
+(4,451)
+(4,616)
+15
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+Deferred tax assets that rely on future profitability
+excluding those arising from temporary differences (net
+of deferred tax liabilities)
+10
+X14-X15
+X16
+9,038
+2,933
+4,582
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+8,107
+Goodwill (net of deferred tax liabilities)
+Prudential valuation adjustments
+11
+35
+Defined-benefit pension fund net assets (net of deferred
+16
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier 1
+capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in core tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+Deductible amount of significant minority investment
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+investment in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+Deductible amount of non-significant minority
+25
+24
+23
+22
+22
+tax liabilities)
+21
+19
+18
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Item
+ICBC
+284
+Reciprocal cross-holdings in core tier 1 capital between
+banks or between banks and other financial institutions
+17
+Direct or indirect investments in own ordinary shares
+20
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+219,790
+200,249
+instruments issued by financial institutions that are not
+subject to consolidation
+--> X31
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+55
+54
+53
+52
+Tier 2 capital: Regulatory adjustments
+X02+X04
+189,569
+463,956
+56a
+523,394
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+51
+50
+439
+Including: Invalid portion to tier 2 capital after the
+transition period
+49
+X27
+1,707
+1,114
+Valid portion of minority interests
+170,712
+48
+Investments in tier 2 capital instruments issued by
+--
+3,121,479
+3,396,186
+Total capital (tier 1 capital + tier 2 capital)
+59
+463,956
+523,394
+Tier 2 capital
+58
+Reference
+2019
+financial institutions that are under control but not
+subject to consolidation
+2020
+31 December
+Others that should be deducted from tier 2 capital
+57 Total regulatory adjustments to tier 2 capital
+56c
+Item
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+286
+ICBC
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+56b
+31 December
+Total risk-weighted assets
+60,855
+Invalid instruments to tier 2 capital after the transition
+period
+Reference
+31 December
+2019
+31 December
+2020
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Significant minority investments in additional tier 1
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+Deductible amount of non-significant minority
+41a
+40
+41b
+40
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+Item
+38
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Annual Report 2020
+Direct or indirect investments in own additional tier 1
+instruments
+37
+Additional tier 1 capital: Regulatory adjustments
+adjustments
+36 Additional tier 1 capital before regulatory
+39
+40,570
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+41c
+47
+X17
+272,680
+351,568
+Tier 2 capital instruments and related premium
+46
+Tier 2 capital:
+2,657,523
+2,872,792
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+--
+45
+219,790
+Additional tier 1 capital
+44
+capital
+Total regulatory adjustments to additional tier 1
+43
+Undeducted shortfall that should be deducted from tier 2
+capital
+42
+--
+Others that should be deducted from additional tier 1
+capital
+200,249
+Institution specific buffer requirement
+Debt securities issued
+94,189
+Volume
+Comparison between 2020 and 2019
+Increase/(decrease) due to
+In RMB millions
+Assets
+Item
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Discussion and Analysis
+19
+Annual Report 2020
+(3) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses on
+assets represent the average of the balances at the beginning of the year and at the end of the year.
+(2)
+Notes: (1)
+2.30
+2.15
+Net interest margin
+2.12
+1.97
+Net interest spread
+632,217
+646,765
+Net interest income
+26,626,751
+2,085,315
+2,114,998
+28,752,429
+Total liabilities
+Interest rate
+Net increase/
+(decrease)
+Loans and advances to customers
+72,793
+4,932
+33,107
+4,169
+28,938
+Changes in net interest income
+Changes in interest expenses
+Debt securities issued
+Due to banks and other financial institutions
+Deposits
+Liabilities
+29,076
+(77,613)
+106,689
+Non-interest-bearing liabilities
+Changes in interest income
+(22,326)
+(512)
+Due from banks and other financial institutions
+(4,163)
+(2,085)
+(2,078)
+Due from central banks
+22,361
+(14,125)
+36,486
+Investment
+33,716
+(39,077)
+(22,838)
+1.76
+431,228
+24,541,436
+Allowance for impairment losses on
+2,802,458
+2,865,115
+Non-interest-generating assets
+3.88
+1,063,445
+27,431,961
+3.64
+1,092,521
+30,055,472
+Total interest-generating assets
+financial institutions (3)
+3.12
+(506,316)
+63,385
+2.02
+40,547
+2,003,882
+Due from banks and other
+1.55
+46,185
+2,979,028
+1.48
+42,022
+2,848,543
+Due from central banks (2)
+3.60
+221,184
+2,029,662
+(16,751)
+(461,121)
+Total assets
+1.67
+445,756
+26,637,431
+Total interest-bearing liabilities
+3.56
+36,866
+1,035,442
+2.93
+30,106
+1,028,929
+financial institutions(3)
+2.38
+63,296
+assets
+2,658,948
+51,477
+2,938,129
+Due to banks and other
+1.59
+331,066
+20,847,046
+1.61
+364,173
+22,670,373
+Deposits
+Liabilities
+29,773,298
+32,414,271
+1.75
+6,141,181
+(11,819)
+(6,523)
+1,421,995
+2.66
+4.26 16,282,090
+766,407
+17,979,409
+Total loans and
+38,979
+1,466,753
+Overseas business
+4.72
+279,507
+5,917,236
+4.77
+314,940
+6,606,897
+Personal loans
+3.34
+12,415
+372,127
+2.68
+11,883
+443,764
+Discounted bills
+4.48
+383,600
+8,570,732
+4.23
+400,605
+57,169
+4.02
+732,691
+4.50
+Corporate deposits
+(%)
+Average cost
+Interest
+expense
+balance
+(%)
+Average
+Average cost
+Interest
+expense
+Average
+balance
+Item
+2019
+2020
+9,461,995
+In RMB millions, except for percentages
+Interest expense on deposits amounted to RMB364,173 million, representing an increase of RMB33,107 million or 10.0%
+over the previous year, principally due to the expansion in the size of due to customers and the increase in the average cost.
+Interest Expense on Deposits
+Interest Expense
+Interest income on due from banks and other financial institutions was RMB40,547 million, representing a decrease of
+RMB22,838 million or 36.0% as compared to that of last year, principally due to overall decline in the interest rates of the
+money market during the reporting period.
+Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from central banks was RMB42,022 million, recording a decrease of RMB4, 163 million or 9.0% as
+compared to that of last year, mainly due to the decrease of the statutory reserve requirement ratio.
+Interest Income on Due from Central Banks
+Interest income on investment amounted to RMB243,545 million, representing an increase of RMB22,361 million or 10.1%
+as compared to that of last year, mainly due to the increase in investment.
+Interest Income on Investment
+Discussion and Analysis
+ICBC
+20
+advances to customers
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+Corporate loans
+(%)
+Average yield
+143,043
+3,934,831
+Short-term loans
+(%)
+Average yield
+Interest
+income
+balance
+(%)
+Average
+Average yield
+Interest
+income
+balance
+Item
+3.64
+Average
+2020
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Interest income on loans and advances to customers was RMB766,407 million, RMB33,716 million or 4.6% higher as
+compared to that of last year, mainly due to the increase in the size of loans and advances to customers.
+Interest Income on Loans and Advances to Customers
+Interest Income
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+14,548
+(58,508)
+73,056
+14,528
+(19,105)
+33,633
+(6,760)
+In RMB millions, except for percentages
+2019
+(237)
+3,656,602
+4.23
+Interest
+income
+balance
+(%)
+Average
+Average yield
+Interest
+income
+balance
+Item
+Average
+2019
+2020
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+154,556
+advances to customers
+732,691
+16,282,090
+4.26
+766,407
+17,979,409
+Total loans and
+4.58
+578,135
+12,625,488
+4.44
+623,364
+14,044,578
+Medium to long-term loans
+4.50
+3.37
+243,545
+7,223,638
+Percentage
+In RMB millions, except for percentages
+At 31 December 2019
+At 31 December 2020
+Total
+Other bonds
+Policy bank bonds
+Central bank bonds
+Government bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+Note: (1) Includes assets invested by funds raised by the issuance of principal-guaranteed wealth management products by the Bank.
+100.0
+7,647,117
+100.0
+8,591,139
+1.2
+90,019
+1.1
+98,448
+7.3
+558,366
+3.1
+262,800
+1.8
+135,882
+2.0
+175,698
+Percentage
+Amount
+5,737,368
+(%)
+Amount
+Percentage
+At 31 December 2020
+At 31 December 2019
+In RMB millions, except for percentages
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+In terms of distribution by issuers, government bonds increased by RMB970,071 million or 20.3% over the end of last year,
+mainly due to the increase in local government bonds and national bonds; central bank bonds increased by RMB10,093
+million or 45.9%; policy bank bonds went up by RMB73, 103 million or 11.2%; and other bonds increased by RMB138,076
+million or 9.7%.
+Discussion and Analysis
+27
+Annual Report 2020
+100.0
+20.7
+1,421,052
+6,862,850
+100.0
+89.7
+8,054,193
+1,559,128
+9.5
+652,522
+9.0
+725,625
+0.3
+21,979
+0.4
+32,072
+69.5
+4,767,297
+71.2
+(%)
+19.4
+6,862,850
+93.8
+8,054,193
+3.0
+193,516
+2.6
+183,716
+Personal consumption loans
+80.9
+5,166,279
+80.5
+5,728,315
+(%)
+Amount
+(%)
+Amount
+Personal business loans
+Residential mortgages
+Percentage
+Percentage
+At 31 December 2020
+At 31 December 2019
+In RMB millions, except for percentages
+Discussion and Analysis
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+ICBC
+26
+Corporate loans rose by RMB1,146,912 million or 11.5% from the end of last year. The Bank actively supported the
+construction of ongoing infrastructure projects and major projects for making up shortcomings, and offered prominent
+support to the high-quality development of manufacturing, to meet funding requirements of customers in anti-epidemic
+service sectors for continuing operations. Therefore, the Bank's corporate loans in key areas such as the Beijing-Tianjin-Hebei
+region, Yangtze River Delta, Guangdong-Hong Kong-Macau Greater Bay Area, Central China and Chengdu-Chongqing
+region remained growing.
+100.0
+75.3
+24.7
+Item
+Percentage
+521,638
+345,896
+Percentage
+(%)
+Amount
+(%)
+Amount
+Percentage
+At 31 December 2020
+Total
+Accrued interest
+Funds and others (1)
+Equity instruments
+Bonds
+Item
+In RMB millions, except for percentages
+At 31 December 2019
+7.3
+In 2020, the Bank proactively supported the development of the real economy and scaled up its investments in local
+government bonds, special anti-epidemic government bonds and other bonds. As at the end of 2020, investment amounted
+to RMB8,591,139 million, representing an increase of RMB944,022 million or 12.3% from the end of the previous year.
+Among these, bonds rose by RMB1,191,343 million or 17.4% to RMB8,054,193 million.
+Please see the section headed "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and
+their quality.
+Personal loans increased by RMB731,655 million or 11.5% from the end of last year. Specifically, residential mortgages grew
+by RMB562,036 million or 10.9%; personal business loans increased by RMB175,742 million or 50.8%, mainly due to the
+rapid growth of key lending products in the inclusive finance areas such as Online Revolving Loan and Quick Lending for
+Operation.
+100.0
+6,383,624
+100.0
+7,115,279
+Total
+10.7
+677,933
+9.6
+681,610
+Credit card overdrafts
+5.4
+Investment
+Remaining maturity
+Amount
+(%)
+100.0
+8,591,139
+Total
+cost
+68.1
+5,208,167
+73.0
+6,265,668
+Financial investments measured at amortised
+19.3
+1,476,872
+17.9
+1,540,988
+7,647,117
+Financial investments measured at fair value
+through other comprehensive income
+(%)
+Percentage
+In RMB millions, except for percentages
+At 31 December 2019
+962,078
+9.1
+Amount
+Percentage
+(%)
+At 31 December 2020
+784,483
+Financial investments measured at fair value
+through profit or loss
+Amount
+Item
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+12.6
+In terms of currency structure, RMB-denominated bonds rose by RMB1,166,954 million or 18.8% over the end of last year;
+USD-denominated bonds decreased by an equivalent of RMB2,838 million or 0.6%; other foreign currency bonds increased
+by an equivalent of RMB27,227 million or 13.5%. During the reporting period, the Bank improved the investment portfolio
+structure of foreign currency bonds and moderately increased the investment in bonds denominated in other currencies.
+100.0
+ICBC
+Investment
+4.50
+732,691
+16,282,090
+4.26
+766,407
+17,979,409
+Loans and advances to customers
+Item
+Assets
+cost (%)
+expense
+balance
+cost (%)
+28
+expense
+income/ Average yield/
+Average
+income/ Average yield/
+Average
+Interest
+Interest
+2020
+In RMB millions, except for percentages
+2019
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In 2020, net interest income was RMB646,765 million, RMB14,548 million or 2.3% higher than that of last year, accounting
+for 80.8% of the Bank's operating income. Interest income grew by RMB29,076 million or 2.7% to RMB1,092,521 million
+and interest expenses increased by RMB14,528 million or 3.4% to RMB445,756 million. Net interest spread and net interest
+margin came at 1.97% and 2.15% respectively, both down 15 basis points from the previous year, mainly because the
+Bank carried forward the conversion of LPR loan pricing benchmark, continued to provide favorable fee policy for the real
+economy and further reduced the financing cost of enterprises.
+Net Interest Income
+Discussion and Analysis
+99,558
+balance
+Time deposits
+100.0
+100.0
+8,054,193
+Total
+32.8
+2,252,019
+38.3
+3,086,756
+Over 5 years
+47.6
+3,267,720
+43.4
+3,493,342
+1 to 5 years
+14.7
+100.0
+1,007,366
+978,923
+3 to 12 months
+4.9
+335,735
+6.1
+495,137
+Less than 3 months
+10
+0.0
+35
+Undated (1)
+(%)
+Amount
+12.2
+6,862,850
+6,862,850
+Note: (1) Refers to overdue bonds.
+8,054,193
+2.9
+202,236
+2.8
+229,463
+6.4
+439,219
+5.4
+436,381
+90.7
+6,221,395
+91.8
+7,388,349
+100.0
+(%)
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2020
+At 31 December 2019
+In RMB millions, except for percentages
+Total
+Other foreign currency bonds
+USD-denominated bonds
+RMB-denominated bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+Amount
+4,757,009
+0.0
+2.35
+13.5
+107,705
+Head Office
+100.0
+776,002
+100.0
+800,075
+Operating income
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+2018
+2019
+2020
+Corporate loans
+Discounted bills
+In RMB millions, except for percentages
+At 31 December 2019
+At 31 December 2020
+Percentage
+Percentage
+Amount
+(%)
+100,925
+13.0
+Yangtze River Delta
+130,424
+3.8
+29,216
+4.0
+32,342
+Northeastern China
+14.9
+115,747
+15.2
+121,336
+Western China
+12.2
+94,915
+12.4
+Amount
+98,851
+18.5
+143,891
+18.1
+145,927
+Bohai Rim
+13.0
+100,667
+12.9
+102,902
+Pearl River Delta
+16.6
+128,672
+16.3
+Central China
+(%)
+11,102,733
+59.6
+Total
+11,102,733
+Percentage
+(%)
+2019
+In RMB millions, except for percentages
+2020
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+Please refer to the section headed "Discussion and Analysis - Business Overview" for details on the development of each of
+these operating segments.
+0.3
+1,300
+0.6
+2,555
+8,459,521
+Others
+72,745
+17.4
+68,199
+Treasury operations
+43.7
+171,194
+44.5
+174,469
+Personal banking
+37.4
+146,550
+37.5
+146,903
+18.6
+Overseas and others
+Medium to long-term corporate loans
+Amount
+9,955,821
+59.4
+406,296
+2.2
+421,874
+2.5
+7,115,279
+38.2
+18,624,308
+100.0
+6,383,624
+16,761,319
+38.1
+100.0
+2,643,212
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+At 31 December 2019
+At 31 December 2020
+Percentage
+(%)
+Amount
+23.8
+2,458,321
+76.2
+7,497,500
+100.0
+9,955,821
+Item
+Short-term corporate loans
+In RMB millions, except for percentages
+60,588
+7.6
+61,969
+2.2
+739,288
+Total assets
+Others
+Reverse repurchase agreements
+financial institutions
+3.5
+1,042,368
+3.2
+1,081,897
+Due from banks and other
+11.0
+3,317,916
+845,186
+10.6
+Cash and balances with central banks
+25.4
+7,647,117
+25.8
+8,591,139
+54.2
+16,326,552
+54.4
+18,136,328
+Net loans and advances to customers (1)
+Investment
+Percentage
+(%)
+478,498
+43,731
+3,537,795
+Amount
+16,761,319
+2.8
+3.8
+111,977
+111,027
+3,644
+4,219
+4,063
+56,366
+63,836
+71,153
+Total
+Personal loans
+Discounted bills
+Corporate loans
+Item
+1,258,611
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Total Loans
+The Bank duly adjusted its credit strategy on the premise of maintaining
+the basic stability of overall credit policy orientation, in an effort to meet
+the funding needs of pandemic containment, work resumption, emergency
+loans, deferred repayment of principal and interest and other special
+phases. It also actively supported the construction of key areas of the real
+economy, and vigorously developed green finance and inclusive finance.
+As at the end of 2020, total loans amounted to RMB 18,624,308 million,
+RMB1,862,989 million or 11.1% higher compared with the end of the
+previous year, of which RMB denominated loans of domestic branches
+were RMB16,805,218 million, up by RMB1,881,450 million or 12.6%.
+Loan
+Discussion and Analysis
+25
+Annual Report 2020
+Note: (1) Please see "Note 23. to the Financial Statements: Loans and Advances to Customers".
+100.0
+30,109,436
+100.0
+33,345,058
+3.1
+930,297
+Unit: RMB100 millions
+Corporate banking
+In RMB millions, except for percentages
+At 31 December 2019
+Amount
+18,624,308
+42,655
+Central China
+17.9
+70,099
+19.4
+76,322
+Bohai Rim
+15.6
+61,250
+17.2
+67,383
+Pearl River Delta
+21.0
+10.9
+82,336
+75,295
+Yangtze River Delta
+10.2
+40,088
+8.7
+34,092
+Head Office
+100.0
+391,789
+100.0
+392,126
+Profit before taxation
+8.0
+19.2
+42,320
+530,300
+42,270
+Western China
+Percentage
+(%)
+At 31 December 2020
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+Add: Accrued interest
+Total loans and advances to customers
+Item
+As at the end of 2020, total assets of the Bank amounted to RMB33,345,058 million, RMB3,235,622 million or 10.7%
+higher than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred
+to as "total loans") increased by RMB1,862,989 million or 11.1% to RMB18,624,308 million, investment increased
+by RMB944,022 million or 12.3% to RMB8,591,139 million, and cash and balances with central banks increased by
+RMB219,879 million or 6.6% to RMB3,537,795 million.
+Assets Deployment
+In 2020, in response to the impact of the pandemic and the complicated development trends externally, the Bank managed
+assets, funds and capital in a coordinated manner, and further enhanced its ability to serve the new development paradigm
+by financial services. The Bank further optimized the asset and liability structure, and continuously improved the operation
+and management efficiency of assets and liabilities. It coordinated the quality, pace, scale and price of investment and
+financing, gave full play to the driving and activating effect of all financial factors, and enhanced the adaptability and
+universality of financial services for the real economy. Furthermore, the Bank strived to cement the deposit development
+foundation and improved the stability of deposit growth. It deepened the reform of the market-oriented pricing mechanism,
+promoted the coordinated development of assets and liabilities in volume and price, and fully supported the reduction of
+financing costs of the real economy.
+Balance Sheet Analysis
+Discussion and Analysis
+ICBC
+24
+10.8
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+34,368
+6.9
+27,188
+Overseas and others
+0.7
+2,743
+0.7
+2,593
+Northeastern China
+15.0
+58,635
+17.0
+66,598
+8.8
+100.0
+Personal loans
+100.0
+(2.1)
+130,573
+642
+0.5
+The Bank focused on serving the real economy and satisfying customer financial needs by continuously transforming and
+innovating intermediary services. In 2020, the Bank's net fee and commission income was RMB146,668 million, an increase
+of RMB318 million over last year. Specifically, income on personal wealth management and private banking services
+increased by RMB2,293 million, as benefited by income increases in agency personal fund service, sale of personal wealth
+management products and investment management fee; income from settlement, clearing business and cash management
+increased by RMB1,780 million, mainly driven by the growth of third party payment business income; income from corporate
+wealth management services registered an increase of RMB1,530 million, mainly due to the income increase from sale of
+corporate wealth management products and bonds underwriting; asset custody business income increased by RMB541
+million, principally attributable to the income increase driven by the size growth of public offered funds under custody.
+Although hit by the pandemic, the Bank persisted in business transformation and implementation of fee reduction and
+profit concession policies, resulting in the income decrease on bank card, investment banking, guarantee and commitment
+businesses.
+22
+ICBC
+OTHER NON-INTEREST RELATED GAINS
+Discussion and Analysis
+In RMB millions, except for percentages
+Growth rate
+Increase/
+Item
+2020
+2019
+(decrease)
+(%)
+Net trading income
+2,222
+8,447
+(6,225)
+(324)
+(73.7)
+15,777
+Net fee and commission income
+Asset custody business
+7,545
+7,004
+541
+7.7
+Trust and agency services
+Others
+Fee and commission income
+1,617
+1,590
+27
+1.7
+3,037
+2,614
+423
+16.2
+146,668
+146,350
+318
+0.2
+Less: Fee and commission expense
+15,453
+131,215
+Net gain/(loss) on financial investments
+11,829
+(3,682)
+Property and equipment expenses
+27,960
+27,713
+247
+0.9
+Taxes and surcharges
+8,524
+7,677
+847
+11.0
+Amortisation
+2,607
+2,315
+292
+12.6
+Others
+Total
+40,922
+43,121
+(2,199)
+(5.1)
+(0.3)
+(378)
+126,950
+126,572
+15,511
+N/A
+Other operating income, net
+8,044
+8,447
+(403)
+(4.8)
+Total
+22,095
+13,212
+(6.8)
+8,883
+Other non-interest related gains amounted to RMB22,095 million, RMB8,883 million or 67.2% higher than that of the
+previous year. Specifically, the decrease in net trading income was mainly attributable to the increase in losses from
+derivative financial instruments; the net gain on financial investments was primarily due to the decrease in payments
+to customers upon maturity of principle-guaranteed wealth management products and the increase in gains on equity
+instrument investments.
+Operating Expenses
+In RMB millions, except for percentages
+Item
+2020
+2019
+Increase/
+(decrease)
+Growth rate
+(%)
+Staff costs
+67.2
+(735)
+10,836
+10,101
+4,509,984
+17,243
+0.38
+3,866,882
+15,399
+0.40
+Subtotal
+10,233,676
+184,396
+1.80
+9,042,110
+154,932
+1.71
+Overseas business
+892,484
+14,048
+1.57
+880,418
+20,255
+2.30
+Total deposits
+Demand deposits
+2.70
+139,533
+5,175,228
+4,506,960
+106,580
+2.36
+Demand deposits
+6,787,204
+53,752
+0.79
+6,417,558
+49,299
+0.77
+22,670,373
+Subtotal
+165,729
+1.44
+10,924,518
+155,879
+1.43
+Personal deposits
+Time deposits
+5,723,692
+167,153
+2.92
+11,544,213
+206,585
+364,173
+20,847,046
+29,630
+27,337
+2,293
+8.4
+private banking services
+Investment banking business
+21,460
+23,860
+(2,400)
+(10.1)
+Bank card business
+18,623
+21,764
+(3,141)
+(14.4)
+Corporate wealth management services
+15,554
+14,024
+1,530
+10.9
+Guarantee and commitment business
+Personal wealth management and
+cash management
+4.8
+1,780
+331,066
+1.59
+Interest Expense on Due to Banks and Other Financial Institutions
+391,789
+Annual Report 2020
+21
+Discussion and Analysis
+Interest Expense on Debt Securities Issued
+Interest expense on debt securities issued was RMB30,106 million, indicating a decrease of RMB6,760 million or 18.3% over
+last year, mainly attributable to the decrease in the interest rates of the CDs, financial bonds and bills issued by overseas
+institutions. Please refer to "Note 35. to the Financial Statements: Debt Securities Issued" for the debt securities issued by
+the Bank.
+Non-interest Income
+1.61
+In 2020, non-interest income was RMB153,310 million, RMB9,525 million or 6.6% higher than that of last year, accounting
+for 19.2% of the Bank's operating income. Specifically, net fee and commission income increased by 0.5% to RMB131,215
+million, and other non-interest income rose by 67.2% to RMB22,095 million.
+In RMB millions, except for percentages
+Item
+2020
+2019
+Increase/
+(decrease)
+Growth rate
+(%)
+Settlement, clearing business and
+39,101
+37,321
+NET FEE AND COMMISSION INCOME
+207,776
+Interest expense on due to banks and other financial institutions was RMB51,477 million, RMB11,819 million or 18.7%
+lower than that of last year, principally attributable to the overall decline in the interest rates of the money market during
+the reporting period.
+(0.6)
+0.6
+4,425
+Others
+11.6
+392,126
+90,243
+10.5
+83,931
+Treasury operations
+39.4
+305,577
+4,592
+39.7
+(1,191)
+Personal banking
+48.4
+375,590
+49.2
+393,661
+(%)
+Operating income
+800,075
+100.0
+776,002
+318,058
+100.0
+0.6
+In RMB millions, except for percentages
+The Bank continually strengthened the refined cost management. Operating expenses amounted to RMB206,585 million, a
+decrease of RMB1,191 million or 0.6% over last year.
+Impairment Losses on Assets
+In 2020, the Bank set aside the impairment losses on assets of RMB202,668 million, an increase of RMB23,711 million or
+13.2% as compared to that of last year. Specifically, the impairment losses on loans was RMB171,830 million, indicating
+an increase of RMB9,722 million or 6.0%. Please refer to "Note 23. to the Financial Statements: Loans and Advances to
+Customers; Note 14. to the Financial Statements: Impairment Losses on Assets" for details.
+Income Tax Expense
+Income tax expense decreased by RMB3,987 million or 5.1% to RMB74,441 million as compared to the previous year.
+The effective tax rate stood at 18.98%. Please see "Note 15. to the Financial Statements: Income Tax Expense" for the
+reconciliation of income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective
+income tax expense.
+Annual Report 2020
+23
+Discussion and Analysis
+Segment Information
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+SUMMARY OPERATING SEGMENT INFORMATION
+Profit before taxation
+Corporate banking
+2020
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+2019
+Subordinated to
+depositor,
+general creditor,
+creditor of the
+subordinated debts, and
+preference shareholders
+Non-compliant transitioned features
+No
+No
+Including: If yes, specify
+름름름름
+N/A
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+The Bank
+1928018
+tier 1 capital bonds
+(Domestic)
+Undated additional
+Banks to Replenish
+Tier 1 Capital/China
+Company Law of the
+People's Republic
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Measures on
+Preference Shares,
+Guidance on the
+Issuance of Preference
+Shares of Commercial
+The Bank
+360011
+Preference shares
+(Domestic)
+Governing law(s) of the instrument
+Unique identifier
+N/A
+Main features of regulatory
+Issuer
+Unaudited Supplementary Financial Information
+No
+N/A
+tier 2 capital bonds and
+undated additional
+tier 1 capital bonds
+Subordinated to
+deposits, general debts,
+subordinated debts,
+N/A
+N/A
+N/A
+preference shareholders
+ICBC
+294
+non-compliant features
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+subordinated debts, and
+N/A
+senior to instrument)
+Unaudited Supplementary Financial Information
+293
+Annual Report 2020
+The Bank
+Core tier 1 capital
+is equal to the average
+trading price of the H shares
+of the Bank for the
+20 trading days preceding
+25 July 2014, the date of
+publication of the Board
+resolution in respect of
+the issuance plan
+Mandatory
+The initial conversion price
+Trigger Event occurs;
+fully convertible when
+a Tier 2 Capital Trigger
+Event occurs
+Fully or partially
+convertible when an
+Additional Tier 1 Capital
+Capital Trigger Event
+N/A
+\ \
+N/A
+N/A
+N/A
+N/A
+N/A
+름름름
+issuer of instrument it converts into
+Including: If convertible, specify
+instrument type convertible into
+Including: If convertible, specify
+or optional conversion
+Including: If convertible, mandatory
+conversion rate
+N/A
+N/A
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Write-down feature
+(specify instrument type immediately
+hierarchy in liquidation
+Subordinated to
+Position in subordination
+N/A
+N/A
+N/A
+N/A
+N/A
+other applicable
+laws, regulations and
+N/A
+N/A
+N/A
+depositor,
+general creditor,
+creditor of the
+No
+z
+No
+(Offshore)
+(H share)
+Preference shares
+Ordinary shares
+Ordinary shares
+(A share)
+of write-up mechanism
+permanent or temporary
+Including: If temporary
+write-down, description
+Including: If write-down,
+Including: If write-down,
+full or partial
+write-down trigger(s)
+Including: If write-down,
+No
+normative
+documents/China
+The Bank
+4620
+The Bank
+amount
+The First Redemption
+Date is 23 September
+2025, in full or partial
+Shares
+of redemption or
+conversion of all the
+Domestic Preference
+Commences on the
+First Redemption
+Date (24 September
+2024) and ends on
+the completion date
+amount
+The First Redemption
+Date is 24 September
+2024, in full or partial
+rules
+changes in regulatory
+due to unpredictable
+after they are issued
+additional tier 1 capital
+bonds in full or in
+part on each Interest
+Date since the First
+Redemption Date
+(30 July 2024). The
+Issuer has the right
+to redeem the present
+bonds in full rather
+than in part if the
+present bonds are no
+longer included in
+Redemption of present
+Shares
+of redemption or
+conversion of all the
+Domestic Preference
+Commences on the
+First Redemption
+Date (18 November
+2020) and ends on
+the completion date
+amount
+The First Redemption
+Date is 30 July 2024,
+in full or partial
+amount
+The First Redemption
+Date is 18 November
+2020, in full or partial
+(Offshore)
+No maturity date
+Yes
+Preference shares
+Preference shares
+(Domestic)
+No maturity date
+Yes
+Undated additional
+tier 1 capital bonds
+(Domestic)
+No maturity date
+Yes
+No maturity date
+Yes
+Preference shares
+(Domestic)
+Including: Subsequent call dates,
+if applicable
+23 September in each
+year after the First
+Redemption Date
+296
+ICBC
+Convertible or non-convertible
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+coupons/dividends
+mandatory cancellation of
+partially discretionary or
+Including: Fully discretionary,
+Including: Existence of a dividend stopper
+3.58% (dividend rate)
+before 23 September
+2025
+4.2% (dividend rate)
+before 24 September
+2024
+4.45% (interest rate)
+before 30 July
+2024
+4.5% (dividend rate)
+before 23 November
+Including: Coupon rate and
+any related index
+Issuer call (subject to prior
+supervisory approval)
+Including: Optional call date,
+contingent call dates and
+redemption amount
+dividend/coupon
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Including: Fixed or floating
+Preference shares
+(Offshore)
+Preference shares
+(Domestic)
+tier 1 capital bonds
+(Domestic)
+Preference shares
+(Domestic)
+Undated additional
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Coupons/dividends
+Main features of regulatory
+Fixed to floating
+Main features of regulatory
+Including: Original maturity date
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Parent company/
+Parent company/
+Including: Eligible to the
+Commercial Banks (Provisional)
+Additional tier 1
+capital
+Additional tier 1
+capital
+Additional tier 1
+capital
+Additional tier 1
+capital
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+Including: Post-transition arrangement of
+Additional tier 1
+capital
+Additional tier 1
+capital
+Additional tier 1
+capital
+Parent company/
+Additional tier 1
+capital
+Regulatory treatment
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+and obligations)
+attached to them are
+Preference Shares
+and the rights and
+obligations (including
+non-contractual rights
+The creation and
+issue of the Offshore
+Including: If convertible,
+Preference shares
+(Offshore)
+Banks to Replenish
+Tier 1 Capital/China
+Issuance of Preference
+Shares of Commercial
+Guidance on the
+Shares Pilot, Trial
+Administrative
+Measures on
+Preference Shares,
+Company Law of the
+People's Republic
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+360036
+Including: Transition arrangement of
+Regulation Governing Capital of
+Preference shares
+(Domestic)
+Parent company/
+Amount recognised in regulatory capital
+295
+Annual Report 2020
+Perpetual
+23 September 2020
+Other equity
+19,687
+USD2,900
+RMB equivalent
+Additional tier 1
+capital instrument
+Other equity
+RMB70,000
+19 September 2019
+Perpetual
+Other equity
+26 July 2019
+Perpetual
+Perpetual
+parent company/group level
+Instrument type
+RMB80,000
+RMB79,987
+18 November 2015
+RMB45,000
+Other equity
+RMB44,947
+Group
+Group
+Group
+Additional tier 1
+capital instrument
+Group
+Additional tier 1
+capital instrument
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Additional tier 1
+capital instrument
+RMB69,981
+fully or partially
+discretionary
+N/A
+Parent company/
+Group
+Core tier 1 capital
+Core tier 1 capital
+Instrument type
+Group
+company/group level
+Parent company/
+Including: Eligible to the parent
+Banks (Provisional)
+Governing Capital of Commercial
+arrangement of Regulation
+Additional tier 1 capital
+Amount recognised in regulatory
+Core tier 1 capital
+Including: Post-transition
+of Commercial Banks (Provisional)
+of Regulation Governing Capital
+Additional tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+Including: Transition arrangement
+accordance
+with, PRC law
+non-contractual
+rights and obligations)
+attached to them
+are governed by, and
+shall be construed in
+of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+The Bank
+4604
+The creation and issue
+Core tier 1 capital
+Hong Kong, China
+instrument
+RMB336,554
+Parent company/
+Group
+Additional tier 1 capital
+instrument
+No maturity date
+No maturity date
+No maturity date
+10 December 2014
+Perpetual
+EUR600
+Other equity
+RMB86,795
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+Perpetual
+19 October 2006
+Share capital,
+Capital reserve
+RMB269,612
+if applicable
+instrument
+RMB168,374
+Including: Subsequent call dates,
+contingent call dates and
+supervisory approval)
+Including: Optional call date,
+Issuer call (subject to prior
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+latest reporting date)
+capital (in millions, as at the
+RMB equivalent 4,542
+redemption amount
+The Bank
+1398
+Securities and Futures
+Ordinance of Hong Kong/
+Securities Law of the
+People's Republic of
+China/China
+Preference shares
+(Offshore)
+339,486
+General reserve
+X21
+322,692
+Surplus reserve
+720
+Others
+(27,518)
+(1,381)
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+items that are not fair valued on the balance sheet
+X22
+X20
+Including: Cash flow hedge reserves that relate to the hedging of
+(4,725)
+Reserve for cash flow hedging
+22,726
+Reserve for changes in fair value of financial assets
+X24
+(10,178)
+Other comprehensive income
+X19
+148,534
+Including: If convertible,
+(4,616)
+Retained profits
+1,508,562
+X23
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+The Bank
+601398
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+Capital reserve
+capital instrument
+Main features of regulatory
+(iv) Main features of eligible capital instruments
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+291
+Annual Report 2020
+X27
+1,114
+Including: Valid portion to tier 2 capital
+X26
+647
+Including: Valid portion to additional tier 1 capital
+X25
+3,553
+Including: Valid portion to core tier 1 capital
+9,159
+Minority interests
+No
+N/A
+No
+N/A
+scope of
+Item
+Other assets
+Interest receivable
+Intangible assets
+Including: Land use rights
+Other receivables
+consolidation
+Reference
+440,548
+1,985
+under regulatory
+20,717
+16,135
+X15
+359,902
+Goodwill
+8,107
+X16
+Long-term deferred expenses
+4,639
+Repossessed assets
+5,325
+Others
+X14
+39,873
+Balance sheet
+Unaudited Supplementary Financial Information
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Including: If convertible,
+Trigger Event or Tier 2
+conversion trigger(s)
+Additional Tier 1 Capital
+N/A
+Yes
+No
+N/A
+No
+Including: If convertible,
+Non-cumulative
+31 December 2020
+Non-cumulative
+No
+Partially
+discretionary
+Yes
+10 December 2021
+No
+No
+mandatory cancellation of
+discretionary
+Fully
+Fully
+ICBC
+Non-cumulative
+Debt securities issued
+798,127
+Including: Valid portion of tier 2 capital instruments and their premium
+Including: Redemption
+coupons/dividends
+partially discretionary or
+Including: Fully discretionary,
+dividend stopper
+Including: Existence of a
+any related index
+Including: Coupon rate and
+dividend/coupon
+Including: Fixed or floating
+capital instrument
+Coupons/dividends
+incentive mechanism
+Including: Non-cumulative
+Main features of regulatory
+292
+First Redemption Date
+year after the
+10 December in each
+in full or partial amount
+N/A
+N/A
+NG
+N/A
+is 10 December 2021,
+The First Redemption Date
+ICBC
+or cumulative
+Convertible or non-convertible
+Unaudited Supplementary Financial Information
+351,568
+X17
+Share capital
+356,407
+X18
+Other equity instruments
+225,819
+Including: Preference shares
+139,156
+X28
+Including: Perpetual bonds
+79,987
+X32
+N/A
+N/A
+6% (dividend rate) before
+N/A
+N/A
+Fixed to floating
+Floating
+Floating
+Preference shares
+(Offshore)
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Yes
+conversion trigger(s)
+capital instruments issued by financial institutions that
+are not subject to consolidation
+2020 to 22 November
+General reserve
+339,701
+339,486
+305,019
+304,876
+Retained profits
+1,510,558
+1,508,562
+292,149
+1,368,536
+Equity attributable to equity holders of the
+parent company
+2,893,502
+Minority interests
+16,013
+2,891,322
+9,159
+2,676,186
+2,674,728
+1,367,180
+292,291
+322,692
+322,911
+356,407
+356,407
+356,407
+Other equity instruments
+225,819
+225,819
+206,132
+206,132
+Capital reserve
+148,534
+148,534
+149,067
+149,067
+Other comprehensive income
+(10,428)
+(10,178)
+(1,266)
+(1,083)
+Surplus reserve
+15,817
+356,407
+9,478
+2,909,515
+X01
+7,802
+X02
+507,096
+X03
+162,910
+X04
+732,478
+23,204
+67
+Including: Significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at FVOCI
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+X05
+Reference
+18,665,077
+18,134,777
+2,900,481
+2,692,003
+2,684,206
+(*)
+Prepared in accordance with PRC GAAP.
+Annual Report 2020
+289
+Unaudited Supplementary Financial Information
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+(iii) Description of related items
+Item
+Loans and advances to customers
+Total loans and advances to customers
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+Financial investments
+Financial investments measured at FVTPL
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+31 December 2020
+Balance sheet
+under regulatory
+scope of
+consolidation
+Total equity
+Including: Non-significant minority investments in tier 2
+Share capital
+27,271,337
+Derivative financial liabilities
+Repurchase agreements
+Certificates of deposit
+54,974
+2,315,643
+54,974
+1,017
+2,315,643
+1,776,320
+Financial liabilities measured at FVTPL
+1,017
+1,776,320
+468,616
+490,253
+490,253
+87,938
+87,938
+102,242
+102,242
+140,973
+468,616
+institutions
+Placements from banks and other financial
+Due to banks and other financial institutions
+Unaudited Supplementary Financial Information
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+31 December 2020 31 December 2020 31 December 2019
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+Balance sheet
+under
+regulatory
+scope of
+consolidation*
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+31 December 2019
+Balance sheet
+under
+regulatory
+scope of
+consolidation*
+Liabilities
+Due to central banks
+140,973
+Equity
+85,180
+293,434
+798,127
+798,127
+742,875
+742,875
+Deferred income tax liabilities
+2,881
+1,994
+1,873
+Debt securities issued
+1,690
+664,715
+483,519
+476,415
+339,246
+Total liabilities
+30,435,543
+30,242,073
+27,417,433
+Other liabilities
+109,545
+109,601
+105,356
+282,458
+263,273
+254,926
+335,676
+335,676
+355,428
+355,428
+Due to customers
+25,134,726
+25,134,726
+22,977,655
+22,977,655
+2020, 4.58%
+(dividend rate)
+from 23 November
+32,460
+32,073
+35,301
+34,960
+Taxes payable
+105,380
+85,180
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Employee benefits payable
+capital instruments issued by financial institutions that
+are not subject to consolidation
+N/A
+Core tier 1 capital
+plan
+Mandatory
+plan
+Mandatory
+N/A
+plan
+Mandatory
+Board resolution in
+respect of the issuance
+issuer of instrument it converts into
+Core tier 1 capital
+Including: If convertible, specify
+Including: If convertible, specify
+or optional conversion
+Including: If convertible, mandatory
+of publication of the
+Board resolution in
+respect of the issuance
+2018, the date
+20 trading days
+preceding 30 August
+price is equal to the
+average trading price
+of the H Shares of
+the Bank for the
+The initial conversion
+instrument type convertible into
+Core tier 1 capital
+The Bank
+N/A
+No
+Yes
+No
+(Offshore)
+Preference shares
+Preference shares
+(Domestic)
+tier 1 capital bonds
+(Domestic)
+Preference shares
+(Domestic)
+Undated additional
+write-down trigger(s)
+Including: If write-down,
+Write-down feature
+Main features of regulatory
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+297
+Annual Report 2020
+The Bank
+The Bank
+Fully or partially
+convertible when an
+Non-Viability Trigger
+Event occurs
+No
+of publication of the
+Board resolution in
+respect of the issuance
+The initial conversion
+price is equal to the
+average trading price
+of the A Shares of
+the Bank for the
+20 trading days
+preceding 30 August
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+Partially
+discretionary
+Non-cumulative
+Partially
+discretionary
+Yes
+Yes
+Yes
+discretionary
+Partially
+Yes
+2025
+Financial investments measured at amortised cost
+Including: Non-significant minority investments in tier 2
+Partially
+discretionary
+Yes
+No
+Additional Tier 1
+Capital Trigger Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when a
+Tier 2 Capital Trigger
+Event occurs
+Trigger Event
+N/A
+of publication of the
+20 trading days
+preceding 25 July
+2014, the date
+convertible when a
+Tier 2 Capital Trigger
+Event occurs
+The initial conversion
+price is equal to
+the average trading
+price of the A shares
+of the Bank for the
+Event occurs; fully
+1 Capital Trigger
+an Additional Tier
+N/A
+or Tier 2 Capital
+Trigger Event
+Fully or partially
+convertible when
+Including: If convertible,
+conversion rate
+Including: If convertible,
+or Tier 2 Capital
+Event
+Capital Trigger Event
+Yes
+Non-Viability Trigger
+Yes
+Additional Tier 1
+N/A
+2018, the date
+N/A
+fully or partially
+N/A
+17
+X12
+investments in capital instruments issued by
+financial institutions that are not subject to consolidation
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+are not subject to consolidation
+27,349
+X13
+290
+Including: Undeducted portion of non-significant minority
+ICBC
+No
+N/A
+N/A
+N/A
+No
+No
+No
+N/A
+bonds
+298
+X11
+7,980
+49,186
+Including: Significant minority investments in tier 2
+Additional Tier 1
+Long-term equity investments
+Including: Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+1,658
+X06
+217
+X07
+126,749
+X08
+1,498,008
+10,998
+X09
+3,445
+X10
+X29
+199
+X30
+X31
+bonds
+bonds
+6,198,842
+bonds and undated
+Including: If write-down,
+NA
+N/A
+N/A
+N/A Permanent write-down
+Capital Trigger Event
+down when a Tier 2
+occurs; full write-
+Capital Trigger Event
+down when an
+Full or partial write-
+Trigger Event
+full or partial
+N/A
+Including: If write-down,
+or Tier 2 Capital
+additional tier 1 capital additional tier 1 capital
+Capital Trigger Event
+N/A
+permanent or temporary
+Including: If temporary
+write-down, description
+of write-up mechanism
+Position in subordination
+hierarchy in liquidation
+(specify instrument type
+immediately senior to instrument)
+Non-compliant transitioned features
+Including: If yes, specify
+non-compliant features
+Additional Tier 1
+Subordinated to
+deposits, general
+debts, subordinated
+additional tier 1 capital
+bonds
+N/A
+bonds and undated
+debts, tier 2 capital debts and tier 2 capital
+4444
+debts, subordinated
+debts, tier 2 capital
+N/A
+름름
+N/A
+Subordinated to
+deposits, general
+debts, subordinated
+bonds and undated
+Subordinated to
+deposits, general
+N/A
+N/A
+occurs
+Subordinated to
+deposits, general
+debts, subordinated
+debts, tier 2 capital
+N/A
+No
+N/A
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+름ㅎ
+N/A
+Tier 2 capital bonds
+N/A
+Subordinated to depositor and
+general creditor, pari passu
+with other subordinated debts
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, other tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+Yes
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+Tier 2 capital bonds
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+N/A
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, other tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+No
+No
+Tier 2 capital bonds
+Yes
+MA
+Non-compliant transitioned features
+Including: If convertible,
+mandatory or optional conversion
+Annual Report 2020
+specify instrument type convertible into
+Including: If convertible,
+specify issuer of instrument it converts into
+300
+ICBC
+N/A
+N/A
+름름
+NA
+N/A
+N/A
+N/A
+N/A
+Unaudited Supplementary Financial Information
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instrument
+Write-down feature
+Including: If write-down,
+write-down trigger(s)
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down,
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+Including: If yes, specify non-compliant features
+301
+Including: Subsequent call dates, if applicable
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date,
+contingent call dates and
+redemption amount
+302
+ICBC
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Parent company/Group Parent company/Group Parent company/Group Parent company/Group
+Tier 2 capital
+instrument
+RMB45,000
+Tier 2 capital
+instrument
+RMB10,000
+Including: If convertible,
+Tier 2 capital
+(in millions, as at the latest reporting date)
+Unaudited Supplementary Financial Information
+Amount recognised in regulatory capital
+Including: Eligible to the
+The Bank
+Main features of regulatory capital instrument
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+Tier 2 capital bonds Tier 2 capital bonds
+The Bank
+1928006
+Tier 2 capital bonds
+The Bank
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+1928007
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+1928011
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+Tier 2 capital bonds
+The Bank
+1928012
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+Regulatory treatment
+Including: Transition arrangement of
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+Including: Post-transition arrangement of
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+parent company/group level
+Instrument type
+Including: If convertible, conversion rate
+Debt securities issued
+20 November 2017
+Dated
+N/A
+Annual Report 2020
+22 November 2027
+RMB44,000
+08 November 2027
+21 September 2025
+Including: Original maturity date
+Dated
+Dated
+Perpetual or dated
+Debt securities issued
+06 November 2017
+Debt securities issued
+21 September 2015
+RMB44,000
+299
+RMB44,000
+RMB equivalent
+12,998
+USD2,000
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Instrument type
+parent company/group level
+Parent company/Group
+RMB44,000
+Unaudited Supplementary Financial Information
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instrument
+instrument
+RMB45,000
+partially discretionary or mandatory
+Including: Existence of a dividend stopper
+Including: Fully discretionary,
+4.45%
+4.45%
+4.875%
+Including: Coupon rate and any related index
+Fixed
+Fixed
+Fixed
+Including: Fixed or floating dividend/coupon
+N/A
+in full amount
+in full amount
+N/A
+N/A
+22 November 2022,
+08 November 2022,
+N/A
+Yes
+Yes
+No
+Tier 2 capital bonds
+Tier 2 capital bonds
+Tier 2 capital bonds
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+Parent company/Group
+Parent company/Group
+Tier 2 capital
+Tier 2 capital
+No
+No
+Mandatory
+Mandatory
+Mandatory
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Convertible or non-convertible
+No
+No
+No
+Including: If convertible, conversion trigger (s)
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+N/A
+cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Unique identifier
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+ISIN:USY39656AC06
+The Notes and the Fiscal
+Agency Agreement shall be
+governed by, and shall be
+construed in accordance with,
+New York law, except that
+the provisions of the Notes
+relating to subordination shall
+be governed by, and construed
+in accordance with, PRC law
+ISIN: US455881AD47
+Regulation S
+The Bank
+1728022
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+1728021
+Rule 144A
+The Bank
+Tier 2 capital bonds
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+Including: Eligible to the
+Commercial Banks (Provisional)
+Regulation Governing Capital of
+Including: Post-transition arrangement of
+Commercial Banks (Provisional)
+Regulation Governing Capital of
+Including: Transition arrangement of
+Regulatory treatment
+Governing law(s) of the instrument
+Main features of regulatory capital instrument
+Issuer
+Tier 2 capital
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+RMB10,000
+74,843
+146,069
+(15,500)
+29,492,181
+(16,053)
+32,582,224
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+4
+3
+2
+29,507,681
+32,598,277
+On-balance sheet items (excluding derivatives and SFTs, but including
+collateral)
+1
+31 December
+2019
+56
+2020
+S/N
+31 December
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets and
+Related Information
+31,982,214
+(15,500)
+(16,053)
+35,300,338
+2,010,844
+18,975
+12,352
+85,324
+29,188
+2,059,325
+30,109,436
+(153,893)
+33,345,058
+(202,504)
+31 December
+2019
+Item
+31 December
+2020
+7
+67,843
+15
+18,975
+29,188
+CCR exposure for SFT assets
+14
+SFT assets
+Less: Netted amounts of cash payables and cash receivables of gross
+13
+373,019
+398,208
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+12
+87,195
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+231,393
+(12,858)
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+11
+10
+32,286
+42,669
+Effective notional amount of written credit derivatives
+9
+(18,334)
+(12,330)
+Less: Exempted CCP leg of client-cleared trade exposures
+8
+70,072
+(71,672)
+Agent transaction exposures
+Balance of adjusted on-and off-balance sheet assets
+Other adjustments
+N/A
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Yes
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+Subordinated to depositor and
+general creditor, but senior
+to equity capital, other tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+N/A
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+Yes
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down,
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+write-down trigger(s)
+N/A
+N/A
+Subordinated to depositor and
+general creditor, but senior
+to equity capital, other tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+NA
+MA
+N/A
+N/A
+NA
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+8
+Yes
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+7
+Adjustment for off-balance sheet items
+6
+Adjustment for securities financing transactions
+Adjustments for derivative financial instruments
+Adjustments for fiduciary assets
+Total consolidated assets as per published financial statements
+Consolidated adjustments for accounting purposes but outside
+the scope of regulatory consolidation
+345
+2
+1
+S/N Item
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+(f) Disclosure of Leverage Ratio
+N/A
+No
+N/A
+No
+No
+N/A
+ICBC
+306
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+Subordinated to depositor and
+general creditor, but senior
+to equity capital, other tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+N/A
+Unaudited Supplementary Financial Information
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+16
+Total securities financing transaction exposures
+427,396
+Total cash outflows
+16
+134,060
+5,123,850
+Other contingent funding obligations
+15
+70,848
+70,870
+Other contractual funding obligations
+14
+140,227
+1,903,436
+Credit and liquidity facilities
+7,703,661
+13
+12
+1,340,772
+1,340,772
+Outflows related to derivative exposures and other collateral requirements
+11
+1,480,999
+3,244,208
+Additional requirements, of which:
+10
+10,387
+Secured funding
+9
+76,543
+Outflows related to loss of funding on debt products
+76,543
+Cash inflows
+Secured lending (including reverse repos and securities borrowing)
+instrument
+ICBC
+308
+123.28%
+Data of the above table are all the simple arithmetic means of the 92 natural days' figures of the recent quarter.
+Liquidity coverage ratio (%)
+4,491,596
+5,530,542
+23
+Total net cash outflows
+22
+Total HQLA
+21
+17
+value
+3,988,785
+Total cash inflows
+20
+1,333,266
+1,336,546
+Other cash inflows
+19
+1,396,166
+1,871,752
+Inflows from fully performing exposures
+18
+482,633
+780,487
+3,212,065
+Unsecured debt
+8
+2,653,915
+Unaudited Supplementary Financial Information
+307
+Annual Report 2020
+8.31%
+8.14%
+Leverage ratio
+22
+31,982,214
+35,300,338
+Balance of adjusted on- and off-balance sheet assets
+21
+2,657,523
+2,872,792
+Unaudited supplementary financial information for the year ended 31 December 2020
+Net tier 1 capital
+2,010,844
+2,059,325
+Balance of adjusted off-balance sheet assets
+19
+(3,015,031)
+(3,668,662)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+5,025,875
+5,727,987
+Off-balance sheet exposure at gross notional amount
+17
+391,994
+20
+(In RMB millions, unless otherwise stated)
+(g) Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Approaches
+S/N Item
+5,847,398
+Non-operational deposits (all counterparties)
+7
+2,052,615
+8,440,160
+Operational deposits (excluding those generated from correspondent
+banking activities)
+4,783,073
+14,364,101
+Unsecured wholesale funding, of which:
+1,221,355
+12,213,547
+Less stable deposits
+2,939
+84,950
+Stable deposits
+3456
+1,224,294
+12,298,497
+Retail deposits and deposits from small business customers, of which:
+2
+Cash outflows
+5,530,542
+Total high-quality liquid assets (HQLA)
+1
+Total
+weighted
+value
+value
+un-weighted
+Fourth-quarter 2020
+Total
+High-quality liquid assets
+N/A
+N/A
+Total adjusted
+N/A
+Write-down feature
+issuer of instrument it converts into
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+름름
+MA
+NG
+N/A
+N/A
+Including: If write-down, write-down trigger(s)
+Including: If convertible, specify
+N/A
+N/A
+Including: If convertible, specify
+N/A
+N/A
+Including: If convertible, mandatory or optional conversion
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+instrument type convertible into
+N/A
+Yes
+Yes
+Permanent write-down Permanent write-down
+Permanent write-down
+N/A
+N/A
+N/A
+Partial or full
+write-down
+Partial or full
+write-down
+Permanent write-down
+Partial or full
+write-down
+Tier 2 capital bonds
+Tier 2 capital bonds Tier 2 capital bonds
+Partial or full
+write-down
+Tier 2 capital bonds
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+description of write-up mechanism
+Including: If write-down, permanent or temporary
+Including: If temporary write-down,
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer would
+become non-viable;
+or (ii) any relevant
+authority having
+decided that a public
+sector injection of
+capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+non-viable
+Main features of regulatory capital instrument
+Including: If write-down, full or partial
+Unaudited Supplementary Financial Information
+303
+Annual Report 2020
+non-viable
+sector injection of
+capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+a write-down is
+necessary, without
+which the Issuer would
+become non-viable;
+or (ii) any relevant
+authority having
+decided that a public
+earlier: (i) CBIRC
+having decided that
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer would
+become non-viable;
+or (ii) any relevant
+authority having
+decided that a public
+sector injection of
+capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+non-viable
+Whichever occurs
+Yes
+Yes
+sector injection of
+capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+non-viable
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer would
+become non-viable;
+or (ii) any relevant
+authority having
+decided that a public
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+N/A
+Including: If convertible, fully or partially
+N/A
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+N/A
+N/A
+N/A
+N/A
+26 April 2029,
+in full amount
+26 April 2024,
+in full amount
+25 March 2029,
+in full amount
+in full amount
+25 March 2024,
+Yes
+Yes
+Main features of regulatory capital instrument
+Coupons/dividends
+Dated
+26 April 2034
+Debt securities issued
+Debt securities issued
+24 April 2019
+Dated
+26 April 2029
+25 March 2034
+Yes
+Yes
+Dated
+Debt securities issued
+21 March 2019
+21 March 2019
+Dated
+Debt securities issued
+RMB10,000
+RMB45,000
+RMB10,000
+N/A
+RMB45,000
+24 April 2019
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+N/A
+N/A
+N/A
+No
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+Fixed
+4.69%
+No
+No
+No
+No
+Fixed
+4.40%
+4.51%
+Fixed
+Fixed
+4.26%
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Including: If convertible, conversion trigger(s)
+N/A
+Subordinated to
+depositor and general
+creditor, but senior
+to equity capital,
+other tier 1 capital
+instruments and
+hybrid capital bonds;
+pari passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are pari
+passu with the present
+25 March 2029
+Subordinated to
+depositor and general
+creditor, but senior
+to equity capital,
+other tier 1 capital
+Including: Existence of a dividend stopper
+Including: Fully discretionary,
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Tier 2 capital bonds
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instrument
+Coupons/dividends
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+305
+Annual Report 2020
+16 November 2030 in full
+amount
+N/A
+16 November 2025 in full
+amount
+N/A
+24 September 2025 in full
+amount
+N/A
+partially discretionary or mandatory
+16 November 2035
+Yes
+24 September 2030
+Yes
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+Including: Original maturity date
+Debt securities issued
+12 November 2020
+Dated
+RMB10,000
+RMB10,000
+Debt securities issued
+12 November 2020
+Dated
+Debt securities issued
+22 September 2020
+Dated
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+RMB30,000
+16 November 2030
+Yes
+RMB30,000
+Fixed
+4.20%
+Fixed
+No
+bonds
+No
+No
+Including: If write-down,
+Write-down feature
+specify issuer of instrument it converts into
+specify instrument type convertible into
+Including: If convertible,
+mandatory or optional conversion
+Including: If convertible, conversion rate
+Including: If convertible,
+Including: If convertible, conversion trigger(s)
+Including: If convertible, fully or partially
+Convertible or non-convertible
+Fixed
+Non-cumulative
+Non-cumulative
+No
+No
+No
+cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Mandatory
+Mandatory
+Mandatory
+No
+No
+No
+4.45%
+4.15%
+Non-cumulative
+RMB60,000
+Including: If convertible,
+Par value of instrument (in millions)
+Including: Transition arrangement of
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+Main features of regulatory capital instrument
+Issuer
+N/A
+N/A
+No
+No
+bonds
+N/A
+No
+N/A
+Regulation Governing Capital of
+No
+instruments and
+hybrid capital bonds;
+pari passu with other
+304
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are pari
+passu with the present
+subordinated debts
+that have been issued
+Subordinated to
+depositor and general
+creditor, but senior
+to equity capital,
+other tier 1 capital
+instruments and
+hybrid capital bonds;
+pari passu with other
+bonds
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are pari
+passu with the present
+Subordinated to
+depositor and general
+creditor, but senior
+to equity capital,
+other tier 1 capital
+instruments and
+bonds
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are pari
+passu with the present
+RMB60,000
+ICBC
+Commercial Banks (Provisional)
+hybrid capital bonds;
+pari passu with other
+subordinated debts
+that have been issued
+subordinated debts
+that have been issued
+Including: Post-transition arrangement of
+Amount recognised in regulatory capital
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Instrument type
+parent company/group level
+Including: Eligible to the
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital instrument
+Tier 2 capital
+Regulation Governing Capital of
+Tier 2 capital
+Commercial Banks (Provisional)
+Unaudited Supplementary Financial Information
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Tier 2 capital bonds
+The Bank
+2028041
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+(in millions, as at the latest reporting date)
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Tier 2 capital bonds
+The Bank
+2028050
+Governed by the Commercial
+Banking Law of the People's
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Tier 2 capital bonds
+The Bank
+2028049
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+21
+sovereigns, central banks and
+non-financial institutions,
+20
+9,152,517
+8,346,908
+With a risk weight of
+2,294,698
+1,958,486
+Loans to retail and
+PSES, of which:
+small business customers,
+14,872,939
+8,105
+205,889
+15,488,858
+124,686
+Loans and securities:
+2,778,255
+2,224
+369,898
+4,427,383
+773,072
+1,288,275
+financial institutions
+secured by Level 1 HQLA
+and unsecured loans to
+Loans to financial institutions
+19
+Loans to financial institutions
+390,050
+18
+3,447
+585,308
+secured by non-Level 1 HQLA
+Assets with matching
+283,596
+25
+exchange-traded equities
+17
+HQLA, including
+default and do not qualify as
+862,136
+707,115
+108,951
+405,366
+3,447
+Securities that are not in
+24
+434,478
+4,764,211
+12,390
+2,484
+434
+standardised approach for
+credit risk
+less than or equal to 35%
+Residential mortgages, of which:
+With a risk weight of
+standardised approach for
+credit risk
+under the Basel II
+23
+22
+22
+under the Basel II
+less than or equal to 35%
+589,759
+5,604,922
+16,777
+2,184
+441
+24,297
+other financial institutions for
+11
+matching interdependent assets
+10 Liabilities with
+3,221,230
+301,795
+312,003
+6,211,900
+301,731
+Other wholesale funding
+4,240,380
+3,936
+60,373
+123
+417,083
+Operational deposits
+7,461,610
+305,731
+372,376
+6,628,983
+8,297,164
+Wholesale funding:
+7
+interdependent liabilities
+11,339,044
+2,791
+12,745
+7,995,433
+Other liabilities:
+12,000
+1,136,562
+126,344
+2,165
+860
+34,170
+212,866
+Deposits held at
+16
+liquid assets (HQLA)
+840,468
+22,566,469
+Total NSFR high-quality
+Required stable funding (RSF) item
+Total ASF
+15
+14
+the above categories
+equities not included in
+352,633
+328,484
+24,297
+1,136,562
+12,000
+All other liabilities and
+100,735
+NSFR derivative liabilities
+352,633
+429,219
+operational purposes
+26
+Fax: 023-62918059
+27
+HAINAN BRANCH
+Tel: 0851-88620004/88620018
+Fax: 0851-85963911
+Postcode: 550001
+Guiyang City, Guizhou
+Province, China
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Fax: 0771-5316617/2806043
+GUIZHOU BRANCH
+Tel: 0771-5316617
+Postcode: 530022
+GUANGXI BRANCH
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Zhuang Autonomous
+Region, China
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+Guangdong Province,
+China
+Guangzhou City,
+Address: No. 54 Heping South
+Address: No. 123 Yanjiangxi Road,
+Fax: 0931-8435166
+Tel: 0931-8434172
+Postcode: 730030
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+GANSU BRANCH
+Fax: 0591-83353905/83347074
+Tel: 0591-88087819/88087000
+Postcode: 350005
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+FUJIAN BRANCH
+Tel: 0411-82378888
+Fax: 0411-82808377
+Postcode: 116001
+GUANGDONG BRANCH
+Road, Haikou City, Hainan
+Province, China
+Postcode: 570203
+Tel: 0898-65303138/65342829
+Fax: 0898-65342986
+Address: No. 9559 Renmin Avenue,
+JILIN BRANCH
+6,183,230
+Fax: 0731-84430039
+Tel: 0731-84428833/84420000
+Postcode: 410011
+City, Hunan Province,
+China
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+HUNAN BRANCH
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+Postcode: 430071
+Wuchang District, Wuhan
+City, Hubei Province, China
+Address: No. 31 Zhongbei Road,
+HUBEI BRANCH
+Fax: 0451-84698115
+Tel: 0451-84668023/84668577
+Postcode: 150010
+China
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+HEILONGJIANG BRANCH
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Postcode: 450011
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Tel: 0311-66000001/66001999
+Fax: 0311-66000002/66001889
+HENAN BRANCH
+Postcode: 050051
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+HEBEI BRANCH
+Dalian City, Liaoning
+Province, China
+Address: No. 5 Zhongshan Square,
+DALIAN BRANCH
+Tel: 023-62918002
+444,995
+349,916
+All other assets not included in
+31
+posted
+additional variation margin
+21,904
+88,599
+109,519*
+NSFR derivative liabilities with
+30
+NSFR derivative assets
+20
+29
+default funds of CCPS
+contributions to
+44,722
+52,614
+1,054,516
+35,547
+357,106
+36,476
+444,995
+391,736
+41,820
+derivative contracts and
+Assets posted as initial margin for
+28
+including gold
+Physical traded commodities,
+36,476
+Other assets:
+215,893
+the above categories
+Postcode: 400060
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+CHONGQING BRANCH
+Fax: 010-66410579
+Tel: 010-66410579
+Postcode: 100031
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+BEIJING BRANCH
+Fax: 0551-62868077
+Tel: 0551-62869178/62868101
+Postcode: 230001
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui Province,
+China
+ANHUI BRANCH
+Domestic Institutions
+List of Domestic and Overseas Branches and Offices
+ICBC
+310
+The amount of derivative liabilities shall be recorded for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+(*)
+256,850
+17,767,036
+127.01%
+Net Stable Funding Ratio (%)
+34
+Total RSF
+33
+7,461,441
+Off-balance sheet items
+32
+952,343
+6,399,862
+9,235,813
+103,581
+854,980
+22,682,101
+Total NSFR high-quality
+Required stable funding (RSF) item
+Total ASF
+15
+14
+the above categories
+equities not included in
+428,726
+404,097
+24,246
+liquid assets (HQLA)
+1,149,204
+All other liabilities and
+13
+106,352
+NSFR derivative liabilities
+12
+428,726
+510,449
+24,246
+1,149,204
+12,506
+Other liabilities:
+11
+12,506
+16
+Deposits held at
+146,018
+small business customers,
+8,500,075
+2,059,580
+2,098,300
+Loans to retail and
+20
+496,675
+15,557,030
+54,073
+15,211,642
+6,757
+190,841
+2,445,607
+3,560
+256,338
+3,928,755
+309,390
+1,181,106
+financial institutions
+secured by non-Level 1 HQLA
+and unsecured loans to
+secured by Level 1 HQLA
+Loans to financial institutions
+19
+Loans to financial institutions
+18
+1,878
+Loans and securities:
+17
+operational purposes
+other financial institutions for
+91,120
+2,090
+584
+30,984
+matching interdependent assets
+non-financial institutions,
+Liabilities with
+2,928,617
+9,478
+24,565
+6,215,325
+6,551,425
+Retail deposits and deposits from
+3,413,522
+3,412,872
+650
+650
+Other capital instruments
+351,568
+3,061,304
+Regulatory capital
+352,218
+11,526,879
+3,061,304
+567890
+-234
+Available stable funding (ASF) item
+Weighted
+value
+≥ 1 year
+31 December 2020
+Unweighted value by residual maturity
+6 months to
+< 1 year
+< 6 months
+No maturity
+Item
+No.
+Changchun City,
+(h) Quantitative Information Disclosure of Net Stable Funding Ratio (NSFR) Using
+Advanced Approaches
+Capital:
+small business customers:
+Stable deposits
+61,904
+294,007
+262,557
+5,605,691
+303,230
+Other wholesale funding
+4,384,357
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+www.icbc.com.cn, www.icbc-ltd.com
+52,147
+444,921
+8,257,098
+Operational deposits
+7,312,974
+301,281
+314,704
+6,050,612
+8,560,328
+Wholesale funding:
+11,421,020
+2,766
+9,904
+6,187,525
+6,489,521
+Less stable deposits
+105,859
+6,712
+14,661
+27,800
+10
+sovereigns, central banks and
+PSES, of which:
+21
+3
+2
+1
+Unweighted value by residual maturity
+30 September 2020
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+309
+Annual Report 2020
+The amount of derivative liabilities shall be recorded for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+128.33%
+(*)
+No.
+Net Stable Funding Ratio (%)
+252,491
+17,674,376
+Total RSF
+33
+869,669
+113,473
+7,664,240
+Off-balance sheet items
+32
+mmm
+the above categories
+28,139
+576,396
+363,615
+34
+Item
+Available stable funding (ASF) item
+Capital:
+6,136
+16,831
+47,089
+38,654
+Stable deposits
+569899
+small business customers:
+11,442,625
+8,927
+29,576
+6,230,319
+6,438,516
+Retail deposits and deposits from
+4
+3,309,601
+3,308,923
+678
+678
+312,787
+312,109
+2,996,814
+2,996,814
+value
+≥ 1 year
+Weighted
+6 months to
+< 1 year
+< 6 months
+No maturity
+Other capital instruments
+Regulatory capital
+All other assets not included in
+31
+posted
+additional variation margin
+796,700
+123,657
+338,158
+1,878
+Securities that are not in
+24
+14
+credit risk
+standardised approach for
+under the Basel II
+less than or equal to 35%
+4,859,640
+12,130
+5,717,269
+16,334
+2,472
+417
+1,801
+429
+Residential mortgages, of which:
+With a risk weight of
+standardised approach for
+credit risk
+23
+22
+22
+under the Basel II
+less than or equal to 35%
+563,887
+283,013
+347,809
+426,953
+With a risk weight of
+910,829
+Less stable deposits
+default and do not qualify as
+exchange-traded equities
+2
+23,188
+106,354
+115,939*
+NSFR derivative liabilities with
+30
+NSFR derivative assets
+2
+29
+default funds of CCPs
+contributions to
+derivative contracts and
+4,862
+5,720
+Assets posted as initial margin for
+28
+including gold
+918,755
+21,034
+225,547
+28,139
+576,396
+388,361
+24,746
+Physical traded commodities,
+27
+Other assets:
+26
+interdependent liabilities
+Assets with matching
+25
+HQLA, including
+Jilin Province, China
+Fax: +95-019339278
+SWIFT: ICBKMMMY
+Tel: 0431-89569718/89569007
+Tel: +352-2686661
+Email: office@eu.icbc.com.cn
+B.P.278 L-2012
+Luxembourg
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+SWIFT: ICBKDEFF
+Fax: +49-6950604708
+Tel: +49-6950604700
+Email: icbc@icbc-ffm.de
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Europe
+Fax: +352-26866666
+SWIFT: ICBKNZ22
+Tel: +64-93747288
+Email: info@nz.icbc.com.cn
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+Industrial and Commercial Bank
+of China Limited, Auckland
+Branch
+List of Domestic and Overseas Branches and Offices
+ICBC
+314
+SWIFT: ICBKNZ2A
+Tel: +64-93747288
+Fax: +64-93747287
+Email: info@nz.icbc.com.cn
+New Zealand
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+Fax: +64-93747287
+SWIFT: ICBKLULL
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Tel: +507-69083179
+SWIFT: ICBKPAPA
+Africa
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Address 1: 47 Price Drive,
+Constantia, Cape Town,
+South Africa, 7806
+Address 2: T11, 2nd Floor East,
+30 Baker Street,
+Rosebank,
+Johannesburg, Gauteng,
+South Africa, 2196
+Email: icbcafrica@afr.icbc.com.cn
+Tel: +27-713301141
+316
+ICBC
+ICBC
+郵編:100140
+Post Code: 100140
+中國北京市西城區復興門內大街55號
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+SWIFT: ICBKLULU
+Fax: +352-26866666
+Tel: +352-2686661
+Email: office@eu.icbc.com.cn
+Luxembourg
+B.P.278 L-2012
+L-2449 Luxembourg,
+Address: 32, Boulevard Royal,
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+Email: info@icbc.com.mx
+Tel: +612-94755588
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Building 1, Dubai
+International Financial
+Center, Dubai,
+Address: Floor 5&6, Gate Village
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+Bank of China Limited, Mumbai
+Branch
+Industrial and Commercial
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Pakistan.P.C:75600
+Main Clifton Road,
+Karachi,
+Block-9, Scheme # 5,
+Tower, G-3,
+Industrial and Commercial Bank
+of China Limited Karachi Branch
+Address: 15th & 16th Floor, Ocean
+United Arab Emirates
+P.O. Box: 506856
+SWIFT: ICBKKZKX
+Email: office@kz.icbc.com.cn
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Tel: +95-019339258
+Kamayut Township,
+Yangon, Myanmar
+Tower, Kyun Taw Road,
+Address: ICBC Center, Crystal
+Bank of China Limited, Yangon
+Branch
+Industrial and Commercial
+SWIFT: ICBKKHPP
+Fax: +855-23965268
+Tel: +855-23955880
+Tel: +7-7272377085
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Address: Level 42, Tower 1,
+International Towers,
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+SWIFT: ICBKKWKW
+Fax: +965-22281799
+Tel: +965-22281777
+Email: info@kw.icbc.com.cn
+Block3, Kuwait City,
+Kuwait
+Al-Soor Street, Al-Morqab,
+Tower), Floor 7&8,
+Address: Building 2A (Al-Tijaria
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Kingdom of Saudi Arabia
+Email: service@sa.icbc.com.cn
+Tel: +966-112899800
+Fax: +966-112899879
+SWIFT: ICBKSARI
+No: 7277-King Fahad Road
+Al Olaya, Zip Code: 12212,
+Additional No.: 3333,
+Unit No.: 95,
+Tower Building
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: Level 4&8, A1 Faisaliah
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+Tel: +974-44072758
+Email: ICBCDOHA@doh.icbc.com.cn
+P.O. BOX: 11217
+Address: Level 20, Burj Doha, Al
+Corniche Street, West Bay,
+Doha, Qatar
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-24998600
+Al Reem Island, Abu Dhabi,
+United Arab Emirates
+P.O. Box 62108
+5207, 5208 and 5209,
+Address: Addax Tower Offices
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Email: info@icbc.com.au
+Republic of Panama
+Panama City,
+Costa del Este
+Bank of China Limited, London
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: londonmarketing@icbcstandard.com
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Bank ICBC (joint stock
+company)
+Address: Building 29,
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Industrial and Commercial
+Email: info@ms.icbc.com.cn
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+ICBC Turkey Bank Anonim
+Şirketi
+Address: Maslak Mah. Dereboyu,
+2 Caddesi
+No:13 34398 Sariyer,
+İSTANBUL
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+Annual Report 2020
+315
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Address: 12F City Empiria,
+Tel: +7-4952873099
+SWIFT: ICBKGB2L
+Fax: +44-2073978899
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Unaudited supplementary financial information for the year ended 31 December 2020
+(In RMB millions, unless otherwise stated)
+Address: 73 Boulevard Haussmann,
+75008, Paris, France
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam,
+the Netherlands
+Email: icbcamsterdam@nl.icbc.com.cn
+Tel: +31-205706666
+Fax: +31-206702774
+SWIFT: ICBKNL2A
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Address: 81, Avenue Louise,
+1050 Brussels, Belgium
+Email: info@be.icbc.com.cn
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Address: Via Tommaso Grossi 2,
+20121, Milano, Italy
+Email: hradmin@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Address: Paseo de Recoletos, 12,
+28001, Madrid, España
+Email: gad.dpt@es.icbc.com.cn
+Tel: +34-912168837
+Fax: +34-912168866
+SWIFT: ICBKESMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+Address: Plac Trzech Krzyży 18,
+00-499, Warszawa, Poland
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+SWIFT: ICBKPLPW
+Industrial and Commercial Bank
+of China (Europe) S.A. Greece
+Representative Office
+Address: Amerikis 13, Athens 106
+72 Greece
+Tel: +30-2166868888
+Fax: +30-2166868889
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Na Strži 1702/65,
+14000 Prague 4-Nusle,
+Czech Republic
+Email: info@cz.icbc.com.cn
+Tel: +420-237762888
+Email: info@icbkfs.com
+Tel: +1-2129937300
+Fax: +1-2129937349
+SWIFT: ICBKUS3F
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario,
+M5H 2R2, Canada
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma 250,
+Piso 18, Col. Juarez,
+C.P.06600,
+Del. Cuauhtemoc,
+Ciudad de Mexico
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Email: bxgw@br.icbc.com.cn
+Tel: +55-1123956600
+SWIFT: ICBKBRSP
+ICBC PERU BANK
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+Email: consultas@pe.icbc.com.cn
+Tel: +51-16316800
+Fax: +51-16316802
+SWIFT: ICBKPEPL
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Address: Blvd. Cecilia Grierson 355,
+(C1107 CPG)
+Buenos Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+ICBC Investments Argentina
+S.A. Sociedad Gerente de
+Fondos Comunes de Inversión
+Address: Blvd. Cecilia Grierson 355,
+Piso 14, (C1107CPG)
+CABA, Argentina
+Email: alpha.sales@icbc.com.ar
+Tel: +54-1143949432
+Inversora Diagonal S.A.
+Address: Florida 99, (C1105CPG)
+CABA, Argentina
+Tel: +54-1148202200
+Industrial and Commercial
+Bank of China Limited, Panama
+Branch
+Address: MMG Tower | 20th Floor |
+Ave. Paseo del Mar |
+28th Floor, New York,
+NY, 10019, USA
+Email: icbckh@kh.icbc.com.cn
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway,
+Fax: +1-2122193211
+Fax: +420-237762899
+SWIFT: ICBKCZPP
+Industrial and Commercial Bank
+of China Limited, Beijing,
+Zurich Branch
+Address: Nüschelerstrasse 1,
+CH-8001, Zurich,
+Switzerland
+Email: service@ch.icbc.com.cn
+Tel: +41-58-9095588
+Fax: +41-58-9095577
+SWIFT: ICBKCHZZ
+ICBC Austria Bank GmbH
+Address: Kolingasse 4,
+1090 Vienna, Austria
+Email: generaldept@at.icbc.com.cn
+Tel: +43-1-9395588
+SWIFT: ICBKATWW
+Americas
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+Address: 725 Fifth Avenue,
+20th Floor, New York,
+NY 10022, USA
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-2128387799
+Fax: +1-2128386688
+SWIFT: ICBKUS33
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 1185 Avenue of the Americas,
+16th Floor, New York,
+NY 10036
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+SWIFT: ICBKUS3N
+Postcode: 130022
+Street 106, Phnom Penh,
+Cambodia
+Address: 17th Floor, Exchange
+XIAMEN BRANCH
+Fax: 022-28400123/28400647
+Tel: 022-28400648
+Postcode: 300074
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+TIANJIN BRANCH
+Fax: 028-82866025
+Tel: 028-82866000
+Postcode: 610020
+SICHUAN BRANCH
+Address: No. 45 Zongfu Road,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Tel: 0755-82246400
+Fax: 0755-82246247
+Postcode: 518015
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+District, Shenzhen City,
+Guangdong Province,
+China
+Center, No. 5055
+Address: North Block Financial
+SHENZHEN BRANCH
+Fax: 021-58882888
+Tel: 021-58885888
+Postcode: 200120
+Address: No. 9 Pudong Avenue,
+Pudong New District,
+Shanghai, China
+SHANGHAI BRANCH
+Fax: 029-87602999
+Tel: 029-87602608/87602630
+Postcode: 710004
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Shennan East Road, Luohu
+Postcode: 361012
+Tel: 0592-5292000
+Fax: 0592-5054663
+Address: Tower A, Xinsheng Plaza,
+Management Co., Ltd.
+ICBC Credit Suisse Asset
+Fax: 0571-87808207
+Tel: 0571-87803888
+Postcode: 310016
+Hangzhou City, Zhejiang
+Province, China
+Address: No. 66 Juyuan Road,
+Jianggan District,
+ZHEJIANG BRANCH
+Fax: 0871-63134637
+Tel: 0871-65536313
+Postcode: 650021
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Address: Bank Mansion, No. 395
+YUNNAN BRANCH
+Fax: 0891-6898001
+Tel: 6898002
+Postcode: 850000
+Lhasa, Tibet Autonomous
+Region
+Address: No. 31 Jinzhu Mid-Rd.,
+TIBET BRANCH
+Fax: 0991-2828608
+Tel: 0991-5981888
+Postcode: 830002
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Address: No. 231 Renmin Road,
+XINJIANG BRANCH
+SHAANXI BRANCH
+No. 5 Financial Street,
+Fax: 0351-6248004
+Postcode: 030001
+West Road, Ningbo City,
+Zhejiang Province, China
+Address: No. 218 Zhongshan
+NINGBO BRANCH
+Tel: 0471-6940307/6940297
+Fax: 0471-6940048
+Postcode: 010060
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region,
+China
+INNER MONGOLIA BRANCH
+Address: No. 10 East 2nd Ring Road,
+Fax: 024-23491609
+Tel: 024-23491600
+Postcode: 110001
+Shenyang City, Liaoning
+Province, China
+Address: No. 88 Nanjing North
+Road, Heping District,
+Postcode: 315010
+LIAONING BRANCH
+Tel: 0791-86695682/86695018
+Postcode: 330008
+Province, China
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+JIANGXI BRANCH
+Fax: 025-52858111
+Tel: 025-52858000
+Postcode: 210006
+South Road, Nanjing City,
+Jiangsu Province, China
+Address: No. 408 Zhongshan
+JIANGSU BRANCH
+Fax: 0431-88923808
+Fax: 0791-86695230
+Tel: 0574-87361162
+Fax: 0574-87361190
+Annual Report 2020
+311
+Province, China
+Taiyuan City, Shanxi
+Address: No. 145 Yingze Street,
+SHANXI BRANCH
+Fax: 0531-87941749/66681200
+Tel: 0531-66681622
+Postcode: 250001
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+SHANDONG BRANCH
+Fax: 0971-6152326
+Tel: 0971-6169722/6152326
+Postcode: 810001
+China
+Address: No. 2 Shengli Road, Xining.
+City, Qinghai Province,
+QINGHAI BRANCH
+Fax: 0532-85814711
+Tel: 0532-85809988-621031
+Postcode: 266071
+City, Shandong Province,
+China
+Shinan District, Qingdao
+Address: No. 25 Shandong Road,
+QINGDAO BRANCH
+Fax: 0951-5890917
+Tel: 0951-5890912
+Postcode: 750002
+NINGXIA BRANCH
+Address: No. 67 Zhonghai Road,
+Jinfeng District, Yinchuan
+City, Ningxia Autonomous
+Region, China
+List of Domestic and Overseas Branches and Offices
+Tel: 0351-6248888/6248011
+Xicheng District, Beijing,
+China
+Postcode: 100033
+Tel: 010-66583333
+Fax: 010-66583158
+Industrial and Commercial Bank
+of China Limited, Manila Branch
+Address: 24F, The Curve,
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+PT. Bank ICBC Indonesia
+Address: The City Tower 32nd Floor,
+Jl. M.H. Thamrin No. 81,
+Jakarta Pusat 10310,
+Indonesia
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Fax: +976-77108866
++976-77106677
+Shangri-la Office,
+Shangri-la Centre,
+19A Olympic Street,
+Sukhbaatar District-1,
+Ulaanbaatar, Mongolia
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
+32nd Street Corner,
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Address: Suite 1108, 11th floor,
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+# 640 Jungang-daero,
+Busanjin-gu, Busan 47353,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Tel: +813-52232088
+Fax: +813-52198525
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 5-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-6512, Japan
+Email: icbctokyo@icbc.co.jp
+Asia-Pacific
+SWIFT: ICBKMOMM
+Fax: +853-28338064
+Tel: +853-28555222
+Email: icbc@mc.icbc.com.cn
+Macau SAR, China
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+3rd Ave, BGC, Taguig City,
+Manila 1634, Philippines
+Email: info@ph.icbc.com.cn
+Tel: +63-282803300
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+SWIFT: ICBKLALA
+Fax: +856-21258897
+Tel: +856-21258888
+Email: icbcvte@la.icbc.com.cn
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+No. 358, Unit 12,
+Sibounheuang Village,
+Address: Asean Road, Home
+of China Limited, Vientiane
+Branch
+Industrial and Commercial Bank
+Email: hcmadmin@vn.icbc.com.cn
+Tel: +84-28-35208991
+building, 33 Le Duan
+Street, District 1, Ho Chi
+Minh City, Vietnam
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+List of Domestic and Overseas Branches and Offices
+313
+Annual Report 2020
+Email: admin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Center, No. 360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Tel: +66-26295588
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+11th-13th Fl., Sukhumvit
+Address: 622 Emporium Tower
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+SWIFT: ICBKPHMM
+Fax: +63-284032023
+No. 393-437, 9 Andar,
+Edf. Dynasty Plaza,
+d'Assumpcao,
+Industrial and Commercial Bank
+of China Limited, Macau Branch
+Address: Alm. Dr. Carlos
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Zhejiang Province, China
+Address: No. 258 Chengnan West
+Road, Pinghu City,
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Fax: 023-85297709
+Tel: 023-85297704
+Postcode: 402760
+District, Chongqing, China
+Biquan Street, Bishan
+Address: No. 8 Xianshan Road,
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Fax: 010-81011513
+Tel: 010-66076588
+Postcode: 100032
+Avenue, Xicheng District,
+Beijing, China
+Address: COCP Fortune Center,
+No. 96 Taipingqiao
+ICBC Wealth Management Co.,
+Ltd.
+Tel: 025-58172219
+Postcode: 211800
+Province, China
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin Road,
+Nanjing City, Jiangsu
+ICBC Financial Asset Investment
+Co., Ltd.
+Tel: 021-5879-2288
+Fax: 021-5879-2299
+Postcode: 200120
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+Postcode: 300457
+ICBC Financial Leasing Co., Ltd.
+Address: No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin, China
+Postcode: 314200
+Square, No. 19-20,
+Tel: 0573-85139616
+312
+Tel: +853-28555222
+Email: icbc@mc.icbc.com.cn
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau SAR, China
+SWIFT: ICILHKH1
+Fax: +852-26833900
+Email: info@icbci.com.hk
+Tel: +852-26833888
+3 Garden Road, Central,
+Hong Kong SAR, China
+Address: 37/F, ICBC Tower,
+ICBC International Holdings
+Limited
+SWIFT: UBHKHKHH
+Fax: +852-28051166
+Tel: +852-35108888
+Email: enquiry@icbcasia.com
+3 Garden Road, Central,
+Hong Kong SAR, China
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+Industrial and Commercial Bank
+SWIFT: ICBKHKHH
+Fax: +852-25881160
+Tel: +852-25881188
+Email: icbchk@icbcasia.com
+3 Garden Road, Central,
+Hong Kong SAR, China
+Address: 33/F, ICBC Tower,
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Hong Kong and Macau
+Overseas Institutions
+List of Domestic and Overseas Branches and Offices
+ICBC
+Fax: 0573-85139626
+Unaudited Supplementary Financial Information
+7,274
+Annual Report 2020
+29.7
+6,732,558
+29.3
+Subtotal
+12,944,860
+51.5
+12,028,262
+52.3
+Personal deposits
+Time deposits
+6,463,929
+25.7
+6,149,654
+26.8
+Demand deposits
+5,196,607
+20.7
+4,328,090
+18.8
+Subtotal
+11,660,536
+46.4
+10,477,744
+7,455,160
+Demand deposits
+23.0
+5,295,704
+104,777
+94,364
+129,449
+120,283
+114,811
+2018
+2019
+2020
+Corporate deposits Personal deposits
+Other deposits
+Accrued interest
+45.6
+In RMB millions, except for percentages
+At 31 December 2020
+Percentage
+Amount
+(%)
+Amount
+Percentage
+(%)
+Corporate deposits
+Time deposits
+5,489,700
+21.8
+At 31 December 2019
+Other deposits(1)
+261,389
+1.0
+0.2
+45,507
+0.2
+Yangtze River Delta
+5,057,963
+20.0
+4,474,455
+19.5
+Pearl River Delta
+3,335,179
+13.3
+Head Office
+2,988,476
+Bohai Rim
+6,733,969
+26.8
+6,212,525
+27.0
+Central China
+3,608,490
+14.4
+3,324,189
+14.5
+Western China
+13.0
+116,605
+(%)
+(%)
+234,852
+1.0
+Accrued interest
+267,941
+1.1
+236,797
+1.1
+Total
+25,134,726
+100.0
+22,977,655
+Amount
+100.0
+30
+ICBC
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+At 31 December 2020
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2019
+Percentage
+Percentage
+Item
+Amount
+Note: (1) Includes outward remittance and remittance payables.
+4,072,459
+Item
+Unit: RMB100 millions
+2.96
+17 April 2030
+Policy bank bonds 2019
+17,646
+3.45
+20 September 2029
+Policy bank bonds 2015
+16,391
+4.29
+7 April 2025
+1
+Policy bank bonds 2019
+13,450
+3.86
+20 May 2029
+Policy bank bonds 2015
+13,435
+3.81
+5 February 2025
+Policy bank bonds 2015
+12,740
+4.25
+13 April 2022
+18,441
+Policy bank bonds 2020
+8 January 2029
+3.48
+Discussion and Analysis
+As at the end of 2020, the Group held RMB1,533,974 million of financial bonds', including RMB725,625 million of policy
+bank bonds and RMB808,349 million of bonds issued by banks and non-bank financial institutions, accounting for 47.3%
+and 52.7% of financial bonds, respectively.
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+In RMB millions, except for percentages
+Allowance
+for
+Nominal
+Annual
+impairment
+Bond name
+value
+Policy bank bonds 2019
+interest rate (%)
+losses(1)
+Policy bank bonds 2015
+21,810
+4.21
+13 April 2025
+Policy bank bonds 2020
+19,460
+3.23
+23 March 2030
+Policy bank bonds 2019
+19,310
+Maturity date
+12,192
+3.74
+12 July 2029
+798,127
+2.6
+742,875
+2.7
+Others
+Total liabilities
+1,424,997
+30,435,543
+4.7
+1,167,057
+4.2
+100.0
+Debt securities issued
+27,417,433
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bonds.
+29
+Discussion and Analysis
+2,679
+2,614
+2,368
+2,349
+2.25
+Due to Customers
+Due to customers is the Bank's main source of funds. As at the end of
+2020, due to customers was RMB25,134,726 million, RMB2,157,071
+million or 9.4% higher than that at the end of the previous year. In terms
+of customer structure, corporate deposits increased by RMB916,598
+million or 7.6%; and personal deposits increased by RMB1,182,792
+million or 11.3%. In terms of maturity structure, time deposits increased
+by RMB508,271 million or 4.4%, while demand deposits increased by
+RMB1,591,119 million or 14.4%. In terms of currency structure, RMB
+deposits stood at RMB23,571,992 million, an increase of RMB2,062,837
+million or 9.6%. Foreign currency deposits were equivalent to
+RMB1,562,734 million, an increase of RMB94,234 million or 6.4%.
+Due to Customers
+100.0
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+1.0
+1.0
+Note: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the expected credit loss model.
+Liabilities
+As at the end of 2020, total liabilities reached RMB30,435,543 million, an increase of RMB3,018,110 million or 11.0%
+compared with the end of last year. Specifically, due to customers amounted to RMB25,134,726 million, an increase of
+RMB2,157,071 million or 9.4%.
+In RMB millions, except for percentages
+At 31 December 2019
+At 31 December 2020
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+263,273
+(%)
+25,134,726
+82.6
+22,977,655
+83.8
+Due to banks and other financial institutions
+2,784,259
+9.1
+2,266,573
+8.3
+Repurchase agreements
+293,434
+Due to customers
+16.2
+42,611
+16.5
+In 2020, discounted bills amounted to RMB1,474,935 million, representing an increase of 8.0% year on year, ranking
+first in the market. Discounted bills for small and micro enterprises reached RMB429,809 million, with an outstanding
+balance of RMB208,907 million.
+Personal Banking
+In 2020, the Bank continued to deepen the No.1 Personal Bank Strategy, consolidated personal customer base, strengthened
+the FinTech empowerment, and further enhanced its market competitiveness. At the end of 2020, personal financial assets
+totaled RMB16.0 trillion. Specifically, the personal deposits arrived at RMB11,660,536 million, representing an increase of
+RMB1,182,792 million or 11.3%; the personal loans stood at RMB7,115,279 million, an increase of RMB731,655 million or
+11.5%. Its personal customers increased by 30.24 million to 680 million.
++
++
++
++
+The Bank launched the "No.1 Personal Bank" brand. Based on the concept of "considerate bank, intelligent bank,
+boundless bank and reliable bank", the Bank made every effort to help meet people's yearning for a better life.
+The Bank strengthened deposit service innovation. It rolled out deposit products for key customer base such as Fu Man
+Yi, Happy Deposit, exclusive deposit of social security card, and themed deposit products like red CDs, and took the
+lead in the industry to launch the function of large-denomination CD negotiability, driving the stable growth of saving
+deposits.
+According to the PBC's requirements on interest rate liberalization reform, the Bank steadily pushed forward the LPR
+conversion for personal loans. It strengthened innovation of loan business focusing on the key consumption markets
+such as pension, automobile, leasing, education and home decoration, and improved the consumer finance services.
+In the face of the impact of COVID-19, the Bank well performed in rendering emergency services in response to the
+call of the state and regulatory requirements, and ensured that personal financial services were uninterrupted without
+losing the quality. It further advanced the transformation of online, digital and intelligent operation transformation,
+and helped enterprises and residents resume production and work and reopen businesses and markets.
+In 2020, funds under agency sales amounted to RMB685.6 billion, government bonds under agency distribution were
+valued at RMB33.5 billion, and personal insurance products under agency sales reported at RMB115.2 billion.
+The Bank was awarded the "Best Mega Retail Bank in China" by The Asian Banker consecutively, and ranked first in
+the global banking brands by retail banking issued by The Banker of the United Kingdom.
+1 Refers to the advisory service, ICBC e Confirmation Service, credit certification, ICBC e Security, ICBC e Intelligence and ICBC e RM.
+Annual Report 2020
+35
+Discussion and Analysis
+Deepened the No.1 Personal Bank Strategy
+In 2020, the Bank made coordinated arrangements for epidemic containment, strategic advancement and business
+development, and achieved good results in personal banking business. It made new breakthroughs in market
+competitiveness, benefit contribution, operation quality and intelligent transformation, laying a solid foundation for
+the continuous deepening of the No.1 Personal Bank Strategy.
+Market competitiveness improved steadily. At the end of the reporting period, the time-point balance of personal
+deposits topped RMB11 trillion, and the time-point growth hit a record high. The rapid growth of personal deposits
+drove the continuous expansion of personal financial assets under management, and the balance of personal financial
+assets under management reached RMB16 trillion, maintaining and consolidating the Bank's leading position in the
+market. Personal non-principal-guaranteed wealth management products amounted to RMB2.15 trillion, maintaining
+an absolute leading position in the market. Personal loans grew remarkably, and the growth of residential mortgages
+ranked first in the industry.
+3,801,033
+4
+Customer base was constantly optimized. The number of personal customers increased by 30.24 million over the
+end of the previous year to 680 million. The number of personal customers with the average monthly/daily financial
+assets of RMB6.00 million and above for the past six months was 182 thousand. The number of personal mobile
+banking customers topped 416 million, and the Bank ranked first in the industry in terms of total number, increment
+and average monthly number of active personal mobile banking customers.
++ The Bank continued to optimize and upgrade innovative products such as "ICBC e Discount", "Supply Chain Bill Pay"
+and "Inclusive Discount", and gave full play to the role of bill products in financing the real economy, especially small
+and micro enterprises, industrial chain and supply chain.
+In 2020, the Bank acted as the lead underwriter for 2,632 Chinese bond projects with a total value of RMB1,904,204
+million, ranking No.1 in the domestic market.
+Settlement and Cash Management
++
++
+The Bank optimized the building of three major platforms. The global cash management platform provides treasury
+management cloud services to help enterprises improve the efficiency of domestic and foreign fund management. The
+small and micro financial service platform rolled out innovative functions, such as convenient payment and foreign
+exchange settlement, providing small and micro enterprises with round-the-clock comprehensive financial services,
+including account opening at the mobile terminal, settlement, investment and financing. The "ICBC Pooling" platform
+launched such innovative products as "Supply Chain Cloud", "Government Procurement Cloud", "Medicine Purchase
+Cloud" and "Construction Cloud", and enhanced the comprehensive service capability of supply chain customer
+groups.
+The Bank constantly facilitated product innovation. It developed "ICBC e Bill Pay" into a smart bill payment platform
+that integrates the functions such as convenient bill payment, donation and community life. The Bank embedded
+the "ICBC e Corporate Payment" in the corporate online payment scenario of public online payment scenario of the
+platform for core enterprises in the supply chain and government affairs, and launched the innovative mode of 020
+payment and small-value convenient payment to provide customers with corporate online settlement services that
+could ensure the capital safety, convenient process and controllable risk. The Bank actively promoted the scenario
+building of the "Corporate Wallet", a digital currency electronic payment tool, enabling corporate digital wallets to be
+used in the scenarios such as "ICBC e BillPay", "ICBC e Corporate Payment" and QR code-based charging. The Bank
+comprehensively optimized the global payroll payment service, allowing customers to pay salaries at home and abroad.
+At the end of 2020, the Bank maintained 10,106 thousand corporate settlement accounts, representing an increase of
+7.0% over the end of the previous year. The volume of corporate settlements reached RMB2,518.24 trillion, up 5.0%.
+The Bank had 1,447 thousand cash management customers. The number of global cash management customers
+reached 8,787, representing an increase of 10.2%.
+International Settlement and Trade Finance Business
++
+4
+Relying on the intensive advantage in customs import and export data, the Bank launched a "single window" financial
+service in an innovative manner, and became one of the first batch of pilot banks which directly connected with the
+cross-border financial blockchain service platform of the State Administration of Foreign Exchange.
+To support the development of new business patterns such as cross-border e-business, the Bank strengthened
+cooperation with domestic and foreign payment institutions, cross-border e-business platforms and other different
+customers in cross-border payment, and launched the "Cross-border e-Business Connect", a comprehensive service
+platform.
+In 2020, domestic branches disbursed an aggregate of USD63,076 million in international trade finance. International
+settlements amounted to USD3,242,127 million, of which USD1,318,726 million was handled by overseas institutions.
+Investment Banking
++
+The Bank constantly enhanced the capability of investment banking in serving the real economy. Through new
+models of investment-loan interconnection and commerce-investment interaction, it increased support for modern
+service industry, strategic emerging industries, digital economy and private economy. The Bank conducted mergers
+and acquisitions focusing on the key fields, including capital market, industrial integration, reform of state-owned
+enterprises, and the Belt and Road Initiative, and maintained a leading position in domestic and foreign merger
+and acquisition markets. The Bank advanced the innovation of advisory services for financing rearrangement and
+debt restructuring of large enterprises in distress, actively moved forward financial services and risk prevention, and
+enhanced the capability of investment banking to resolve risks. It rolled out innovative sustainable debt financing
+mode, helped enterprises optimize their capital structure, and provided financial support for major infrastructure
+projects. It promoted asset securitization investment and securitization of proactively managed assets to meet the
+needs of enterprises for comprehensive financial services.
+34
+ICBC
++
+Discussion and Analysis
+The Bank improved the product system covering "one advisory service, two certificates and three e-services" 1,
+launched an innovative intelligent financial solution, and promoted the intelligent upgrading of advisory services. The
+Bank took the lead in the industry to launch an e-confirmation platform, making it possible to handle the whole bank
+confirmation services online. "ICBC e Security" was designed to effectively prevent and control telecommunication
+frauds by risk screening. "ICBC e Intelligence" accesses to high-quality property transaction information and keeps
+enriching the content of think tank services continuously. "ICBC e RM" adds a new financial benchmarking system for
+listed companies, making its analysis more comprehensive.
+Discounted Bills
+Risk control remained robust. The quality of personal loan assets remained sound despite the epidemic impact, with
+NPL ratios of personal loans and residential mortgages standing at 0.56% and 0.28% respectively. The quality was
+sound as a whole, paving the way for stabilizing the quality of the Bank's credit assets.
+Smart transformation was accelerated. The Bank built a new ecosystem of online customer acquisition, and
+gradually explored a new open banking service mode to adapt to the Internet era with "ICBC e Wallet" as the
+carrier. It has served more than 33.00 million customers. The Bank developed an intelligent customer maintenance
+system, launched a "cloud studio" for customer managers, and sped up the building of a new generation of broadest
+customer base maintenance system. It promoted the building of a series of projects such as intelligent brain, intelligent
+experience and intelligent outbound call, and effectively improved the intelligent customer services. Relying on the
+intelligent brain, the front-line marketing staff provide differentiated and targeted services to 9,546.2 thousand
+customers. The Bank accelerated the intelligent transformation of channels, promoted the construction of 5G
+intelligent bank outlets in some key cities, and built an enterprise-level intelligent service platform.
+2021 is the year when the No.1 Personal Bank Strategy will be deepened. In the year, the Bank will continue to
+promote the strategy to achieve prominent results.
+Asset Custody Services
++
++
+The Bank actively explored hot areas and emerging markets, and further strengthened its leading position in the
+industry. The mutual fund under custody continued to develop quickly and the Bank was the first among domestic
+peers with custody size of more than RMB3 trillion. The insurance assets under custody continued to lead the industry,
+and its leading edge continued to expand, with the custody scale exceeding RMB5.4 trillion. The Bank made an
+important breakthrough in global custody business, acted as the depositor of the first Chinese depository receipt (CDR)
+in China and conducted the first CDR transaction. Seizing the business development opportunities brought by the New
+Rules on Asset Management, the outsourcing of asset management product operation' developed rapidly, with a size
+of over RMB1.5 trillion.
+The building of intelligent custodian bank was advanced steadily. The Bank introduced the main functions of an
+intelligent operation platform, and completed the structuring of an intelligent data platform to realize flexible query
+of managed data. An intelligent customer service platform was put into operation, and a brand-new ICBC Custody
+Mobile Banking was introduced to provide a full spectrum of custody services to customers.
+At the end of 2020, the size of custody business reached RMB19.6 trillion.
+Pension Services
++
+Actively seizing the opportunities brought by the rapid growth of the occupational annuity market, the Bank
+successfully obtained the trustee, custodian and investment manager qualifications for occupational annuities of
+central and all the local governmental agencies and administrative institutions that have completed bid invitations,
+with the total size of occupational annuities of the three qualifications ranking first in the market.
+It continued to improve digital operation of pension business, enhance the building of service channels and functions
+in an all-round way, and made great efforts to promote "ICBC e Pension" service platform, covering more than 80%
+of the customers under the automated and self-service operation mode. During the COVID-19 pandemic, the Bank
+introduced online processing method to ensure the continuity of pension business and efficiency of pension services.
+At the end of 2020, the pension funds under the Bank's trusteeship amounted to RMB326.0 billion; the Bank
+managed 11.36 million individual enterprise annuity accounts, and the enterprise annuity funds and occupational
+annuity funds under the Bank's custody totaled RMB955.7 billion. The Bank led other banks in terms of the scale of
+enterprise annuity funds under the Bank's trusteeship, number of individual enterprise annuity accounts and enterprise
+annuity funds under the Bank's custody.
+Financial Market Business
+Money Market Activities
++
+In the RMB money market, the Bank actively provided liquidity supply during the COVID-19 pandemic, reasonably
+strengthened fund operation, and ensured liquidity support for small and medium financial institutions on the premise
+that risks were controllable, making great contributions to the smooth operation of the money market. It scientifically
+developed financing strategies, rationally devised financing maturities, varieties and counterparty structure, and
+constantly improved the profitability of fund operation.
+In the foreign exchange money market, the Bank enhanced the proactive and forward-looking management of foreign
+exchange liquidity, to ensure the liquidity safety of its foreign currency funds. The Bank took advantage of various
+investment and financing instruments in the foreign exchange money market to improve the profitability of fund
+operation. Both the business volume and the number of customers of non-bank lending went up. It enhanced the
+capability of quotation for non-USD market making, and entered into the first batch of CHF and KRW-denominated
+lending transactions in China Foreign Exchange Trade System. It took an active part in the innovation of the domestic
+foreign exchange money market, and entered into the first EUR, CAD and JPY-denominated repurchase transaction
+with domestic RMB bonds pledged as collateral.
+In 2020, the Bank won many honors, including the "Exemplary Money Market Dealer in Interbank Local Currency
+Market", the "Best Quotation Bank for Foreign Currency Lending", the "Best Foreign Currency Lending Member" and
+the "Best Foreign Currency Repurchase Member" conferred by China Foreign Exchange Trade System.
+1 The outsourcing of asset management product operation means the Bank, as a service provider, is entrusted by various asset management
+institutions to continuously provide financial services, such as accounting and valuation, registration, sales fund clearing and information
+disclosure, for various asset management products.
+38
+ICBC
+Discussion and Analysis
+37
+Annual Report 2020
+The Bank actively advanced the net worth-based transformation of wealth management products and constantly
+improved product structure. Both the product scale and the investment scale under the New Rules on Asset Management
+exceeded RMB1 trillion. At the end of 2020, the balance of non-principal-guaranteed wealth management products stood
+at RMB2,708,427 million. Please refer to the section headed "Business Overview Internationalized and Diversified
+Operation" for the business development of ICBC Wealth Management.
+Private Banking
++
+The Bank adhered to the whole market selection and whole product allocation, actively served the net worth-
+based transformation of wealth management products, effectively undertook the matured customer funds through
+diversified comprehensive allocation, and made every effort to expand wealth management products under the New
+Rules on Asset Management. It customized high-quality selected products on demand, steadily improved exclusive
+insurance products, and developed innovative comprehensive advisory business of family trust.
+The Bank established a professional assessment system for investment consultants and improved the collaborative
+work mechanism between wealth consultants and investment consultants. It took the lead to launch such online
+training brands as "Private Banking Support Station", "Private Bank e Hour" and "Wealth Management Micro Class"
+to comprehensively improve professionalism.
+36
+ICBC
+Discussion and Analysis
++
+4
+Discussion and Analysis
+The Bank established an online service system of "full ecological response and universal service through one-point
+access", accelerated business innovation and technology empowerment, and promoted the function optimization of
+private banking exclusive version of ICBC Mobile. It optimized the online customer service scenario to improve service
+experience of private banking customers.
+At the end of 2020, the Bank had 102 thousand personal customers with financial assets of RMB8.00 million and
+above, an increase of 11,517 or 12.8% over the end of last year; the assets under management totaled RMB1.8
+trillion, an increase of RMB238.7 billion or 15.4%. As at the end of 2020, the number of personal customers with
+the average monthly/daily financial assets of RMB6 million and above for the past six months was 182 thousand, an
+increase of 23,750 or 15.0% over the end of last year; and the assets under management totaled RMB2.2 trillion, an
+increase of RMB282.8 billion or 14.9%.
+Bank Card Business
+ར
+The Bank launched personalized cards such as wedding cards and graduation season cards, and special debit cards,
+including the "Commemorative Card for the 600th Anniversary of the Forbidden City". The Forbidden City debit card
+won the "Elan Award Unique Innovation Award" for 2020 conferred by the International Card Manufacturers
+Association (ICMA), the first time for the Bank's debit card product to win such an international award.
+The Bank advanced its digital transformation by innovating online acquisition products. At the end of October 2020,
+it launched the ICBC UnionPay Unlimited Digital Platinum Card which is an online-only digital card that can be applied
+and activated in seconds. The card has drawn wide attention once it is available to customers.
+On ICBC e Life, by building a platform for credit card spending, the Bank established a financial ecosystem composed
+of APP, WeChat Applets, WeChat Official Accounts and online campaign pages. The platform added financial
+functions such as credit limit increase, password resetting and online installment. It has three major scenarios:
+shopping, bonus point and installment; three major sub-brands: e-Food Coupons, e-Top-selling Products and e-Coffee;
+and three promotion campaigns Seasons: "Top-selling Season, Travel Season and Digital Season". The platform also
+supports live broadcast. Currently, the number of registered subscribers of ICBC e Life has exceeded 90.00 million.
+By the end of 2020, the Bank issued 1,127 million bank cards, an increment of 55.31 million compared with the end
+of last year. Specifically, 967 million debit cards and 160 million credit cards have been issued. The overdraft balance
+of credit cards reached RMB681,610 million. In 2020, ICBC bank cards registered a spending volume of RMB21.46
+trillion, including RMB18.88 trillion from debit cards and RMB2.58 trillion from credit cards.
+Asset Management Services
+The Bank firmly implemented the regulatory requirements, seized development opportunities, pushed forward the
+transformation of asset management business and products in a steady and compliant manner and comprehensively
+enhanced investment management and research capabilities. It established an asset management business system allowing
+allocation of capital in all markets and value creation across the whole value chain by relying on the strength of the Group's
+asset management, custody and pension businesses as well as its comprehensive subsidiaries specialized in fund, insurance,
+leasing, investment banking and wealth management, to provide diversified, integrated and specialized services for
+customers.
+Wealth Management Services
+The Bank won the "Private Wealth Service of the Year in China" by The Asian Banker, the "Best Private Banking
+Experience, China" by The Asset, and the "Best Domestic Private Bank Brand" by the Wealth.
+33
+Benefit contribution hit a new high. The retail sales line provided a strong support for the Bank's operating income
+growth. The total amount and the growth of fee-based business income from personal banking both ranked first in
+the industry.
+The Bank spared no effort to support epidemic prevention and control. As a main channel for allocating anti-epidemic
+funds on behalf of public finance departments at all levels, the Bank could complete the allocation of the funds
+efficiently. It quickly rolled out the "emergency material management system" and "campus epidemic prevention
+registration management system", and launched the special anti-epidemic columns such as "ICBC e Government
+Service" online donation and "ICBC e Social Security", to help with epidemic prevention and control and resumption
+of work and production.
+BUSINESS OVERVIEW
+Corporate Banking
+The Bank actively supported the construction of infrastructure and major projects that could "make up for shortcomings",
+especially the high-quality development of manufacturing, backed the consumption upgrade service industries such as
+healthcare, education and pension, and energetically developed green finance and inclusive finance. The Bank timely
+adjusted its credit strategy to support the development of the real economy, meet the fund demand for epidemic prevention
+and control, resumption of work and production, emergency loans and deferred repayment of principal and interest and that
+in special periods, and properly relieved the temporary operational difficulties of enterprises affected by the epidemic.
++
++
+The volume and price of corporate loans were coordinated and deposit growth remained robust. The Bank increased
+credit granting, and ranked first among peers in terms of the balance of corporate loans, with the growth topping
+RMB1 trillion for the first time. The Bank transformed its pricing benchmark for existing floating-rate loans. Through
+multi-dimensional expansion, flexible pricing, product innovation and other effective measures, the Bank's corporate
+deposit growth reached a record high, and both the balance and the growth of corporate deposits ranked first in the
+industry.
+The Bank stepped up credit support for key fields and key regions. It granted loans of RMB1.65 trillion to
+manufacturing companies, representing an increase of RMB218.9 billion over the end of the previous year, of which
+medium to long-term corporate loans amounted to RMB624.5 billion, up RMB188.7 billion. The Bank ranked first
+in the industry in terms of the balance and growth of loans to manufacturing companies and medium to long-term
+corporate loans, which both hit a record high. Corporate loans granted to private enterprises stood at RMB2.18
+trillion, representing an increase of RMB240.5 billion over the end of the previous year. The priority of newly increased
+corporate loans was given to key regions, with 79% of the Bank's newly increased loans granted to such key regions
+as Beijing-Tianjin-Hebei region, Yangtze River Delta, Guangdong-Hong Kong-Macau Greater Bay Area, Central China
+and Chengdu-Chongqing region.
+At the end of 2020, the number of corporate customers increased by 545 thousand over the end of the previous
+year to 8,643 thousand. The balance of corporate loans reached RMB11,102,733 million, representing an increase
+of RMB1,146,912 million or 11.5%. The balance of corporate deposits hit RMB12,944,860 million, representing an
+increase of RMB916,598 million or 7.6%.
+Corporate loans of domestic branches
+by industry of loan customers
+Corporate Deposits
+Unit: RMB100 millions
+Transportation, storage and
+25.2%
+postal services
+54,897
+Manufacturing
+15.9%
+52,957
+Leasing and commercial services
+Discussion and Analysis
+31
+Annual Report 2020
+Net cash outflows from financing activities amounted to RMB46,949 million. Specifically, cash inflows were RMB947,475
+million, representing a decrease of RMB343,256 million over last year, mainly due to the decreased proceeds from the Bank's
+issuance of debt securities; and cash outflows were RMB994,424 million, representing a decrease of RMB183,433 million
+mainly due to the decreased payment for repayment of debt securities.
+Annual Report 2020
+1,308,155
+5.2
+1,184,289
+5.2
+Overseas and others
+Total
+975,900
+25,134,726
+3.9
+14.8%
+947,181
+100.0
+22,977,655
+100.0
+Shareholders' Equity
+As at the end of 2020, shareholders' equity totalled RMB2,909,515 million, RMB217,512 million or 8.1% higher than
+that at the end of the previous year. Equity attributable to equity holders of the parent company recorded an increase of
+RMB217,316 million or 8.1% to RMB2,893,502 million. Please refer to the "Financial Statements: Consolidated Statement
+of Changes in Equity" for details.
+For details on off-balance sheet items, please refer to "Note 45. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 46. to the Financial Statements: Designated Funds and Loans".
+Analysis on Statement of Cash Flows
+Net cash inflows from operating activities amounted to RMB1,557,616 million, representing an increase of RMB1,076,376
+million as compared to last year, principally due to the increase of cash inflows resulted from the increase of due to
+customers. Specifically, cash outflows of operating assets reduced by RMB114,404 million; and cash inflows of operating
+liabilities increased by RMB1,016,145 million.
+Net cash outflows from investing activities amounted to RMB1,135,097 million. Specifically, cash inflows were
+RMB2,105,871 million, representing an increase of RMB264,937 million over last year, mainly due to the increased cash
+received from the recovery of financial investment; and cash outflows were RMB3,240,968 million, representing an increase
+of RMB737,348 million, mainly due to the increase in cash payment for financial investment.
+4.1
+50,760
+Northeastern China
+11.8%
+Demand deposits
+2020
+Time deposits
+Others
+2.5%
+Inclusive Finance
+The Bank effectively strengthened the supply of inclusive finance, accelerated product innovation, improved risk control,
+coordinated epidemic prevention and control with the support for the resumption of work and production of small and
+micro enterprises, and promoted the high-quality and sustainable development of inclusive finance business.
+32
+ICBC
+Discussion and Analysis
+0.9%
++
+The Bank well performed in deferring the repayment of principal and interest on the loans to small and micro
+enterprises. For the enterprises affected by the epidemic that could not repay principal and interest on time, the Bank
+made the arrangements for deferred repayment of principal and interest by loan renewal, extension, refinancing, grace
+period, adjustment of repayment plan and other ways, so as to ease the financial pressure of enterprises.
+Credit product innovation was accelerated. The Bank diversified online unsecured loan products, and launched Anti-
+epidemic Loan, Reopen Loan and Employment Loan to assist in epidemic prevention and control and resumption of
+work and production of small and micro enterprises. As one of the first batch of banking partners, the Bank signed
+a "Head Office-to-Head Office" cooperation agreement on batch guarantee business with the National Financing
+Guarantee Fund, and took the lead in launching the loan business in China.
+At the end of 2020, the balance of inclusive loans to small and micro enterprises amounted to RMB745,227 million,
+representing an increase of RMB273,706 million or 58.0% over the beginning of the year. The number of such
+customers was 606 thousand, up 183 thousand. The average interest rate on inclusive loans granted in the year
+decreased by 39 basis points from the prior year to 4.13%. Inclusive farmer business loans and inclusive small and
+micro enterprise agriculture-related loans totaled RMB152,187 million, representing an increase of RMB40,611 million
+or 36.4% over the year beginning; the number of such customers was 98 thousand, up 15 thousand; the number of
+small and micro financial business centers was 324, up 36 over the end of the previous year.
+Institutional Banking
++
++
+The Bank assisted with government reform through bank-government services. It actively cooperated with MOF and
+local financial departments to promote the electronic reform of local non-tax collection, and was continuously leading
+the industry in terms of the coverage and scale of agency business. It is the first one in the industry to launch an
+integrated social security service platform. "ICBC e Social Security", making its services available in all provinces and
+autonomous regions in China. The market share of provincial pooling account of old-age insurance ranked first in the
+industry.
+_
+Water, environment and public
+The Bank optimized three categories of online products. The Quick Lending for Operation sped up the data integration
+and application of tax, credit reference, logistics and power, and launched more than 400 financing scenarios,
+including settlement, tax, cross-border and medical security financing. e-Mortgage Quick Loan, an online revolving
+loan, improved business efficiency and customer experience relying on a new model of "online assessment of
+collateral, automatic approval of business and online monitoring of risks". ICBC e Credit, a key product of digital
+supply chain, realized the credit granting throughout the whole industrial chain, and cumulatively exploited nearly
+2,000 industrial chains.
+Lodging and catering
+The Bank stayed ahead in many fields in cooperation with peers. It established a unified management system for the
+centralized clearing agency business of Shanghai Clearing House, fully covering the qualifications of the centralized
+clearing agency business in the interbank market. In order to provide financing support for small and medium
+enterprises, the Bank launched the online standard warehouse receipt pledge financing business in conjunction
+with Shanghai Futures Exchange, making it the only state-owned commercial bank among the institutions that have
+launched the business. The Bank vigorously promoted the commercial paper brokerage business, provided services for
+enterprises through the "Discount Connect" platform of Shanghai Commercial Paper Exchange, and ranked first in the
+industry in terms of the number of enterprises that have signed contracts with the Bank.
+2018
+2019
+Production and supply of
+10.2%
+electricity, heat, gas and water
+Real estate
+7.2%
+Wholesale and retail
+74,552
+67,326
+4.5%
+Construction
+1.8%
+64,051
+Mining
+and sanitation
+utility management
+Science, education, culture
+2.7%
+2.5%
+A group-wide integrated security protection system was established. The information systems of the Group were
+maintained operating safely and stably and the relevant systems were granted with "Excellent Grade" in the network
+security rating and protection assessment in 2020, providing customers with safe and stable financial services. The
+Bank carried out a campaign to improve the security defense capability of the security team, making it lead the
+industry in the security competitions held by the state and regulatory authorities. The Bank increased the output of
+security capability to provide security-related assistance to the construction of financial industrial level security situation
+awareness and the research of financial industry network security situation.
+ICBC
+42
+The organizational structure and layout were optimized. The Bank set up a data intelligence center to fully leverage
+its technical edges in the field of big data and keep up with the development of data industry. The Bank set up an
+information security operation center (SOC) to advance the transformation of the security protection model into a
+practical one. It moved ahead with the construction of a professional FinTech team and built a compound financial
+technology talent team with experienced and skilled members.
+The Bank deepened the layout of FinTech consisting of "one department, three centers, one subsidiary, and one research
+institute". It increased FinTech investment and unleashed the vitality of the Bank's FinTech innovation. In 2020, the Bank
+invested RMB23.819 billion in FinTech and had 35,400 FinTech personnel, accounting for 8.1% of all employees across the
+Bank.
+Discussion and Analysis
+Further Reform of Fintech Governance and Management
+The transformation of production and operation was carried out in an orderly manner. All key applications have been
+modified to have high availability and a production and operation management system adapted to the route of new
+technologies such as automatic controlling and distributed technologies has been gradually formed. The business
+operation monitoring system has been continuously improved, and the monitoring computing efficiency has been
+raised from minute level to 10-second level. The Bank completed annual information system switching locally and
+disaster recovery drills non-locally, continuously increasing the support to business continuity.
++
+Reinforcing Production Safety
+A new rural finance model was created. The Bank established a comprehensive service platform for the digitalization
+of rural areas, which is intended to comprehensively provide comprehensive services such as government affairs,
+finance, rural affairs, Party affairs and finance, etc. in a one-stop way to rural customer groups including rural
+collective organizations, village-run enterprises and villagers. At present, the Bank has contracted with 500 county-
+level agricultural and rural government authorities in 154 cities in 31 provinces, cities and autonomous regions. The
+Bank addressed the "First Mile Problem" of rural customers to whom the services are not accessible and upgraded
+portable intelligent terminals to offer more than 120 businesses such as new card opening, registration of E-banking
+and domestic transfer and remittance. The Bank launched an upgraded Personal Mobile Banking, innovated online
+county-specific services using dialects in different regions, and comprehensively promoted this practice nationwide.
+The level of digital risk control in the industry was improved. The Bank was the first among its peers to create a
+new mode of voiceprint risk control, which uses voiceprint recognition to quickly and insensibly provide customer
+managers with identification and fraud risk judgment basis, thereby comprehensively improving the level of intelligent
+risk control and customer service experience. The Bank upgraded the intelligent anti-money laundering system "ICBC
+Brains" serving the peers, which covers the whole process of anti-money laundering such as know your customer
+(KYC), customer risk classification, large-sum and suspicious transaction monitoring, and provides services to a
+number of peers and non-banking institutions. The Bank improved the risk big data intelligent service product "ICBC
+e Security" and developed nine product systems including blacklist service, risk, intelligence, association and dynamic
+monitoring, which can effectively prevent the risk of external fraud and has served 275 peers and more than 56,000
+enterprise customers.
+Discussion and Analysis
+41
+Annual Report 2020
+A chain financial ecosystem was driven. The Bank closely kept up with the pace of transformation and development
+of leading enterprises in the industry, and extended financial services to a wider range of customer base. The Bank
+delivered accounts, deposits, payments, financing and other financial products to the leading enterprises transforming
+towards digitalization in a centralized manner, enabling various online application scenarios of affiliates. The
+Bank delivered corporate online payment, integrated receipt collection, reconciliation of secure accounts, supply
+chain financing and other services to large industrial Internet platform. Relying on big data, Al, IoT and other new
+technologies, the Bank has developed 109 open and inclusive finance services in five major categories. It cooperated
+with key "Going Global" enterprise customers to facilitate the inclusive service and a prosperous ecosystem. It
+launched innovative "Cloud Flash Loan", "Power e Loan", "Cross-border Loan" and other products, and stepped up
+product innovation and scenario expansion to assist enterprises in digital transformation.
+Construction of the element market of government affairs was accelerated. The Bank actively participated in the
+construction of element market and strengthened the cooperation with provincial-level big data centers. It made
+innovations in financing products by using the government affairs data from multi-dimensional platforms. As the
+only bank, it participated in the first batch of pilot projects of opening Shanghai's public data, and used government
+procurement data to release the innovative "government procurement loan". The Bank launched smart government
+services in Beijing, providing 154 kinds of government services such as social security rights and interests inquiry
+through self-service terminal. It also cooperated to launch "inclusive big data credit loan" based on social security, tax
+and other government data, so as to realize government convenience and benefit services.
+Cloud-based retail business was created. The Bank launched Personal Mobile Banking Version 6.0 to accelerate the
+"integrated connection" between mobile banking and physical outlets and made innovations in Personal Mobile
+Banking and WeChat applets to launch the interactive online "cloud outlets" and "cloud studios" of customer
+managers so as to provide "screen to screen" contactless financial services. Relying on the technology platform based
+on cloud computing and distributed technology, etc., the Bank provided 24×7 financial services both online and
+offline.
+The integrated enterprise-university-research output capacity of the Fintech Institute was developed. The Bank
+cooperated with leading enterprises and scientific research institutes to continuously carry out research and tackle
+key problems in key core technology fields, making contributions to China's independent innovation in science
+and technology. The Bank was the first among its peers to issue the White Paper on Application and Development
+of Blockchain in Finance, White Paper on Banking Innovation in the Era of 5G and other white papers and special
+research reports. Its six projects were designated as the pilot innovation and application projects for innovation and
+supervision of FinTech by PBC, with number of the projects leading the industry.
+Relying on the ECOS, the Bank fully established a new digital business form to boost the coordinated development of retail,
+corporate business, government affairs, rural business, and other fields of business, and realized the replacement of old
+drivers with new ones in business operation, quality upgrading, and efficiency improvement.
+Establishing Digital Business Form
+The Bank took the initiative to deal with the new challenges brought by the complex and volatile external situation and
+technological reforms and reinforced production safety such that the safe production and operation throughout the Group
+is maintained at a high level and the production and operation capacity of technical support, monitoring and analysis,
+emergency response, performance planning and management and control were pushed to a new level.
+The market-oriented technology capacity of the Bank was strengthened. The Bank output professional technological
+capacities at all levels to bolster the business innovation of the Group's major customers and undertook project R&D
+and operation & maintenance for a number of financial institutions and digital transformation enterprises. The Bank
+enhanced cooperation for mutual benefits, improved the blockchain platform for resettlement fund management and
+smart social security public service platform, etc. It promoted cooperation experiences in Xiongan New Area in Jiangsu
+Province, Beijing and other cities and provinces. It launched 18 financial ecosphere cloud products in the fields of
+education, medical care and enterprise services, facilitating intelligent government affairs and digital transformation of
+enterprises.
+The Bank created 5,287 effective internet scenarios in the fields of
+intelligent government service, intelligent travel, healthcare and social
+security, intelligent campus, judicial finance and poverty alleviation through
+consumption.
+The Bank deepened the interconnection of government, business and
+consumption (GBC) fronts, to serve the digital transformation of the
+state, government and enterprises, and enhance customers' financial
+service experience. In 2020, the internet financial transaction amount hit
+RMB640.38 trillion, an increase of 1.2% from the end of the previous year;
+and its proportion rose by 0.6 percentage points from the end of last year
+to 98.7%.
+Intelligent campus: The "Campus Affairs Management Cloud" could provide parents, students and schools with
+integrated services including payment, management, and epidemic prevention and control, which was promoted in a
+total of 21,000 schools, driving the increase of 0.84 million new personal customers.
+Intelligent justice: The Bank served the reform of national judicial system and promoted judicial auction platform
+of ICBC Mall in a total of 258 courts, with a cumulative transaction amount of nearly RMB2.0 billion. Besides, it
+successfully issued the first "judicial auction" loan through ICBC Mall.
+The Bank was put on the list of National Green Data Center of 2020. By promoting the planning and construction
+of new data center, the Bank effectively undertook the stable operation of information system, massive digital asset
+storage and intelligent application under high concurrent services.
+Healthcare and social security: Following the direction of national medical reform, a total of 6.69 million electronic
+vouchers for medical insurance were issued, and the medical insurance clearing mobile payment platform was
+launched in 10 provinces and regions. For the medical device industry, the Bank pioneered an innovative service
+program "Commercial Medical Cloud" integrating the internet, medical devices and finance.
+Discussion and Analysis
+43
+Annual Report 2020
+Intelligent travel: With three core products, namely, ETC, unconscious payment and QR code payment service for
+public transportation launched, the Bank served more than 80 million person-times throughout the year. The "e-Ride"
+mini program was innovatively rolled out, supporting all kinds of scanning codes for ride and covering 200 cities across
+China.
+Intelligent government service: The Bank successfully marketed three provincial-level government service platforms
+including "Beijingtong", "Wanshitong" and "Shanzhengtong" as well as more than 10 prefecture-level government
+service platforms such as "i Xuchang". A management platform for rural development fund was developed and
+launched in cooperation with 13 provincial agricultural and rural departments. The Bank cooperated with 15 local
+governments to realize the interconnection of mortgage registration systems in 300 cities, to provide comprehensive
+services for ten types of provident fund business in 12 provinces and 28 cities. The "ICBC e Government Service"
+product was promoted to provide "government service + financial service", and 31,000 institutional users were
+expanded accumulatively. Besides, full efforts were made to provide services for large-scale national exhibitions such as
+the online Canton Fair and China International Import Expo.
+Internet Finance
+2020
+Note: The proportion of internet financial transactions refers to the
+number of internet financial transactions divided by the total
+number of transactions of the bank.
+2018
+4
++
+Deepening the Digital Transformation of Government
+Service
+98.7
+98.1
+97.7
+Unit: %
+Proportion of Internet Financial Transaction
+2019
+Developing the capability for comprehensive connection to 5G and loT. The Bank has established an IoT technology
+system integrating "end, side and cloud" and built up an enterprise-level audio and video platform to support the
+innovation of cloud outlets, cloud counters and other contactless customer service modes. The Bank was the first in
+the industry to complete the independent construction of 5G Messaging as a Platform (MaaP), and complete piloting
+in MaaP business with China Mobile.
+The Bank was honored as the "Top Investment Houses in Asian G3 Bonds" by The Asset for the third consecutive year.
+A platform of big data and artificial intelligence with "in-depth perception and open application" was built up. The
+Bank was ahead of its peers to enable its big data system to comply with the "Six Integrations" standard as set at
+CCSA (China Communications Standards Association) TC601. An automatically controllable and industry-leading
+enterprise-level artificial intelligence (AI) technical system was fully built so as to perform the five core functions of
+"reading, listening, thinking, speaking and acting" of Al. A one-stop Al modelling workstation was constructed,
+achieving wide application of mainstream Al technologies such as machine learning, Optical Character Recognition
+(OCR), Robot Process Automation (RPA), and knowledge map by using facial, voiceprint, iris recognition and other
+biometric features recognition capabilities.
+Investment
+Discussion and Analysis
+Annual Report 2020
+39
+Discussion and Analysis
+Asset Securitization Business
+The asset securitization business effectively supported the Bank in disposing of non-performing loans, revitalizing
+stock assets, economizing capital occupation and optimizing credit structure. In 2020, the Bank issued 18 asset-
+backed securities totaling RMB142,600 million, including 10 residential mortgage-backed securities (RMBS) totaling
+RMB137,158 million, and eight non-performing asset-backed securities totaling RMB5,442 million.
+Precious Metal Business
+The Bank optimized the supply of physical precious metal financial services from aspects of product innovation and
+service upgrading, to meet customers' demands for the allocation of precious metal hedging assets. It established
+the brand and system development mechanism for physical precious metal products advocating traditional culture,
+red culture and struggling culture, and successfully developed the "Magnificent China" product series. The precious
+metal products of "Lucky Bag" and the "Bright Future Golden Card" were launched in partnership with the Palace
+Museum and the National Museum of China. The Bank established partnership with 26 local governments focusing
+on customized physical products, to advance the marketing of physical precious metals. It advanced the integrated
+development of multiple channels online and offline and within and outside the Bank, and managed to build an
+Internet of Thing platform for physical gold.
+In 2020, the Bank ranked first among all dealers in Shanghai Gold Exchange in terms of trading volume, clearing
+amount and gold leasing scale.
+FinTech
+With a successful progress in ecosystem (ECOS) development, the Bank has made more efforts in the construction of 5G,
+data center, cloud computing and other new-type digital infrastructure, reinforcing production and operation safety. The
+Bank accelerated management system and mechanism reforms, and relied on the fifth generation of core banking system to
+boost the development of digital business forms and digital transformation and upgrading of the Bank.
+In 2020, the Bank was ranked at first place in the banking industry for seven consecutive years in CBIRC's IT supervision
+ratings. Its seven achievements won the annual Banking Technological Development Award from PBC, the most among its
+peers in the industry. In particular, the distributed technology system received the first prize of the above award. The Bank
+won the "Best Financial Innovation Award" from The Chinese Banker for the fifth consecutive year. Besides, it was rated
+with multiple FinTech innovation awards, e.g. "Best Internet of Things Implementation in China", "Best Process Automation
+Implementation in China" and "Best API and Open Banking Implementation" by The Asian Banker.
+Upgrading Digital Infrastructure
+The integration and innovation of technology and business were deepened and the construction of new infrastructure
+was advanced with remarkable achievements made. A series of new enterprise-level technology platforms with strong
+service capability and industry-leading advantages were built up based on 5G+ABCDI', through which a whole-process new
+technology transformation and application mechanism was established, covering forward-looking trend tracking, study and
+prediction, key technology research breakthrough and implementation of business scenario innovation.
++
+A new-type IT architecture was fully built, featuring "core business system + open ecosystem". The Bank was the
+first among its peers to launch a distributed technology platform covering major fields of distributed technology, with
+an average daily service invocation of nearly 6.0 billion times. The new generation of cloud computing platform was
+put in place, and the scale of laaS infrastructure cloud and PaaS platform service cloud has remained in the leading
+position in the industry. Based on the "cloud computing + distributed" open platform architecture system, an open
+platform core banking system consisting of the core business infrastructure support framework, account system and
+products & services has been established. The Bank was the first to complete the most critical debit card account host
+for downward extension of the core system with the largest data size therein, making a historic breakthrough in IT
+infrastructure as a large bank.
+Facilitating the Internet-based Transformation of Industries
+1 Refers to AI, BLOCK-CHAIN, Cloud Computing, Big Data and loT.
++
++
+4
+In terms of RMB bond investment, the Bank actively invested in various bonds to fuel the growth of the real economy.
+It vigorously invested in bonds in the pandemic areas and bonds with proceeds mainly used for pandemic prevention
+and control, in an effort to provide strong financing support for the pandemic prevention and control. Both the quality
+and the efficiency of corporate bond investment in serving the real economy kept improving, and the investment fields
+involved energy, manufacturing, transportation and other important industries. The Bank continued to enhance the
+management of investment portfolios, and took various steps to improve return on investment.
++
++
+Discussion and Analysis
+ICBC
+40
+In the area of foreign institutional investors trading business in the China's Interbank Market, the Bank took an active
+part in serving foreign institutional investment customers from nearly 60 countries and regions all over the world,
+and fully meeting their investment and trading needs in China's Interbank Market. It won the "Contribution Award
+for Opening Up" granted by the National Interbank Funding Center and the "Exemplary Settlement Agency of Global
+Connect Business" granted by China Central Depository & Clearing Co., Ltd.
+In terms of the over-the-counter bond business, the Bank distributed the special government bonds for pandemic
+control, China Development Bank's bonds with the theme of "anti-pandemic", "poverty alleviation", "response to
+climate change" and "protection of the Yangtze River" and the over-the-counter local government bonds in four
+provinces and cities to investors in the over-the-counter market, contributing to the national fight against the virus
+and poverty and supporting economic growth. The Bank was rated as an "Exemplary Undertaking Institution in Over-
+the-Counter Bond Business" and an "Exemplary Underwriting Institution in Over-the-Counter Local Government Bond
+Business" by China Central Depository & Clearing Co., Ltd.
+In terms of corporate commodity derivative trading, the Bank conducted an in-depth survey of customer demands,
+advanced key customer marketing and provided targeted hedging trading strategies. In 2020, the number of
+customers and transaction amount of corporate commodity trading increased steadily. The Bank kept optimizing its
+trading system. It launched the electronic order entry function of spread trading, optimized the delivery scenario of
+corporate franchise business funds, and improved the business process of corporate commodity trading.
+In terms of foreign exchange settlement and sales on behalf of customers and foreign exchange trading, the Bank
+actively assisted with the pandemic prevention and control, organized its foreign exchange settlement and sales line
+to establish a green channel at the first time, and gave priority to the foreign exchange settlement and sales business
+handled for the purpose of pandemic prevention and control. According to the local plans for resumption of work
+and production, the Bank facilitated the money settlement to corporate customers and extended the settlement date
+for more than 100 enterprises. It took the initiative to contact foreign trade customers, continuously enriched foreign
+exchange settlement and sales and foreign exchange trading currencies, improved the trading functions of three
+major online channels, i.e. online banking, mobile banking and electronic trading platform, and enhanced capability of
+serving foreign exchange trading customers.
+A high-value brand of "ICBC Blockchain+" was built. By leveraging more than 150 technological breakthrough
+and filing more than 120 patent applications, the Bank was one of the first batch to pass all certifications under
+special evaluation for "Trusted Blockchain" by the Ministry of Industry and Information Technology. It was also the
+first among its peers in the finance industry to obtain the safety evaluation certificate issued by State Cryptography
+Administration. It took the lead in getting registered with the Cyberspace Administration of China and was awarded
+with Blockchain 50 by Forbes. The Bank has successively applied the blockchain technology in scenarios in multiple
+fields including charitable funds, medical services, engineering construction and bank confirmations, etc., directly
+connecting more than 1000 service institutions.
++
++
++
+Treasury Trading Business on Behalf of Customers
+For details on the Bank's CDs and debt securities issued, please refer to "Note to the Financial Statements: 33.
+Certificates of Deposit; 35. Debt Securities Issued".
+The Bank steadily advanced the online migration of interbank deposits, and actively leveraged the advantages of less
+contact and high efficiency of online transactions during the COVID-19 pandemic. Its online interbank deposit size
+ranked first in the market.
++
++
+Financing
+In terms of foreign-currency bond investment, the Bank met Chinese-funded enterprises' financing demands abroad,
+and strengthened investment in high-rating bonds with a good credit quality, a high credit rating and an ample
+interest spread. Portfolio was optimized to diversify investment risks and enhance the overall yield and credit quality of
+the portfolio.
++
++
+In terms of paper commodities trading, the Bank suspended the opening of new positions and new accounts for
+some paper commodities transactions in response to the drastic fluctuations of international commodity market, so
+as to protect the rights and interests of customers and prevent market risks. The Bank strengthened risk warning
+and investor education, reminded customers to trade rationally, effectively protected the interests of customers, and
+ensured the smooth operation of paper commodities trading.
+API Open Platform: The platform provides customized and component-based API services, opening over 120 products
+that fall in 18 categories and more than 1,900 application interfaces, thus steadily elevating the open capacity and the
+number of partners.
+The Bank made every effort to conduct regular epidemic prevention and control. It reinforced regular epidemic
+prevention and control in the outlets in all aspects, insisted on putting the protection of customer safety and
+improvement of service supply in the first place, and implemented 30 safety protection measures from the six
+aspects of outlet preparation before business operation, protection during and after business operation, disinfection
+management, daily management and employee health protection, so as to maintain the business order of outlets
+under the regular epidemic prevention and control.
+The Bank continuously improved the quality of customer services. By building a new ecosystem of operational service
+process, it promoted an integrated operation model of online channels, offline outlets and back-office centers in 27
+types of personal and corporate scenarios, to facilitate the online, collaborative and efficient operation of customer
+services. With the in-depth development of thematic service enhancement activity "2020 Service First", focus was put
+on seven working measures including improving the service efficiency of outlets, standardizing the service environment
+of outlets, strengthening the care for employees and the services for benefiting the people, and properly handling
+complaints, to effectively enhance customers' experience in financial services.
+Service Enhancement
+Discussion and Analysis
+ICBC
+46
+At the end of 2020, the Bank had 15,800 outlets, 25,167 self-service banks, 79,672 intelligent devices, and 73,059
+ATMs with trading volume of RMB5,907.8 billion.
+The Bank actively explored the transformation and innovation of outlets. By implementing the GBC interconnection
+strategy in an in-depth manner, it constructed special business scenarios such as "outlets + government service",
+"outlets + inclusive finance" and "outlets + precious metals", and built more than 1,200 outlets featuring
+in government service that could provide one-stop services including social security, provident fund, business
+administration and taxation, hence constantly enhancing the comprehensive service capabilities of outlets.
+The Bank deepened the integration and coordination of online and offline channels. It continued to promote the
+coordination and integration of physical outlets, mobile banking, remote banking and new channels. It actively
+responded to the COVID-19 pandemic by providing digital and contactless customer services. The offline intelligent
+self-service channels can be used to handle 299 personal and corporate services, including more than 130 "medialess"
+services, covering the services frequently used by customers. The Bank also promoted the collaboration between
+outlets and online channels. The "Cloud Outlet" service was launched on mobile banking and WeChat mini program,
+and the full entry of personal customer managers was realized, for customers to handle more than 40 items of
+businesses through "Cloud Outlet". In addition, a new service model of "Customer self-service + Remote operator
+assistance and verification" was introduced as a pilot program. ICBC Cloud Banking as the first bank launched "Home
+Agent Customer Service" by Cloud Desktop, and it also comprehensively upgraded ICBC intelligent robot "Gino (Gong
+Xiao Zhi)" which represents ICBC intelligent services.
+Outlets were optimized and adjusted effectively. The Bank optimized and adjusted more than 420 outlets in key areas
+such as the Beijing-Tianjin-Hebei region and the Yangtze River Delta, and established 150 outlets in county markets,
+including 36 outlets in the poverty-stricken counties such as Jinyang in Sichuan and Nagqu in Tibet. It continued to
+intensify the renovation of old and core potential outlets, and completed the overall renovation of 1,611 outlets, to
+provide strong hardware guarantee for customer service.
++
+Channel Development
++
+Channel Development and Service Enhancement
+Note: These data are as at 31 Dec 2020.
+million
+Serving more than 30.00
+personal customers
+Over 380 projects launched
+工銀e錢包
+The Bank propelled the upgrading of public welfare service brand of outlets. It continued to upgrade its service brand
+"ICBC Sharing Stations" for inclusive service and people's benefit, and accelerated the establishment of a five-in-one
+service system including "sharing and convenience for the people, property alleviation for people's benefit, public
+welfare for the people, propagating and supporting the people, integrating and benefiting the people". Intimate and
+meticulous services were also provided for grassroots workers such as sanitation workers and couriers. In addition,
+nearly one hundred outlets that could provide featured services for the elderly customer groups were established to
+enhance the comprehensive service capabilities for these customers.
+ICBC
+Consumer Protection
+48
++
++
+Human Resources Management
+Human Resources Management, Employees and Institutions
+Discussion and Analysis
+47
+Annual Report 2020
+In 2020, the Bank's "Customer Service and Complaint Management System" recorded a total of 141 thousand
+customer complaints, including 892 personal customer complaints per 100 outlets and 446 personal customer
+complaints per RMB100 billion assets, involving such businesses as credit card, personal banking and internet finance,
+which were mainly from areas such as Zhejiang, Sichuan, Hebei, Shandong and Beijing.
+The Bank improved consumer protection rules and measures. In accordance with the latest laws, regulations and
+regulatory requirements, and in combination with the new trends and characteristics of financial consumer behavior, it
+revised consumer protection and complaint management measures, and drafted financial literacy and education rules
+for customers, to continuously consolidate the foundation of consumer protection system.
+The Bank endeavoured to meet the demands for financial services in special periods. It formulated guidelines for
+consumer protection during the COVID-19 pandemic containment and worked out 33 measures on the "fight against
+COVID-19" for ICBC's consumer protection, to clarify the consumer protection requirements for the Bank during the
+pandemic period. The Bank timely handled problems concerning customer loans, credit card repayment and credit
+reports during the pandemic period, to ensure that customers' reasonable demands could be properly satisfied as
+a warm and responsible bank. The Bank also made every effort to appropriately perform such tasks as consumer
+protection review, financial literacy and education, charging regulation and business publicity, to ensure that the rights
+and interests of customers could be fully protected in special periods.
++
++
+The Bank kept improving the quality and effectiveness of education and training. Focusing on strategic transmission,
+key projects were developed, such as the "No.1 Personal Bank" and the "Preferred Bank for Domestic Foreign
+Exchange Business". Concentrating on talent training, it carried out trainings on job knowledge and skills, new
+products, new business and new process promotion, and deepened the implementation of reading activities for
+all employees, to explore advanced trainings covering the entire career cycle and serve the growth of employees'
+performance. In 2020, the Bank took the initiative to seek changes in response to the pandemic prevention and
+control, and actively promoted such training modes as live streaming classroom, e-learning and online training camp.
+A total of 31 thousand online and offline training sessions were held, and 5.89 million person-times were trained in
+2020.
+ICBC Cloud Platform: The "industry + finance" integrated services are provided, covering six major industries and
+19 segments. More than 20 standard cloud services including Education Cloud, Party Building Cloud, Property
+Management Cloud and HR Cloud were launched, to become "available immediately upon renting".
+The Bank also integrated corporate culture into business development. In 2020, ICBC hosted the second "ICBC
+Innovation Contest", aiming at fostering innovation culture for all employees. ICBC initiated a cultural activity themed
+with "red finance", to summarize "July 1st Achievements" as a gift for the 100th Anniversary of the Founding of
+the CPC. In addition, thematic cultural activities such as "ONE ICBC ONE FAMILY" and "ICBC Culture Stories" were
+organized to gather the strength of the whole group and carry forward the spirit of the new age.
+Remuneration Policy
++
+The Bank adopted a remuneration policy that was in line with corporate governance requirements, in combination
+with sustainable development targets, in adaptation to risk management system and talent development strategy, and
+well-matched with employees' value contribution, so as to advance the sound operation and sustainable development
+of the whole bank.
+Employee remuneration consisted of basic remuneration, performance-based remuneration and welfare income. In
+particular, the basic remuneration depended on an employee's value contribution and ability to perform duties, and
+the performance-based remuneration was based on the overall situation of the Bank, the employee's institution or
+department, and the employee's personal performance measurement results. Meanwhile, the performance-based
+remuneration to the Senior Management and employees in positions with a significant impact on risks was subject to
+a deferred payment, stop-payment and pay-back mechanism, so as to balance risks and incentives.
+According to the principle of "efficiency first and consideration of impartiality", the Bank continuously optimized
+the remuneration resource allocation mechanism with value creation as the core, transmitted the Group's strategic
+objectives for business management, and allocated more remuneration resources to the grassroots employees, for the
+purpose of mobilizing and inspiring the business vitality of institutions at all tiers.
+ICBC
+Link
+The Bank fully implemented the coordinated development strategy of serving the country and regions, kept close track
+of the development trend of regional market economy, and assisted in poverty alleviation. With "stabilizing aggregate,
+optimizing layout, making up for deficiencies, and improving efficiency" as the main theme, the Bank comprehensively
+propelled the strategic adjustment and structural optimization of outlets, to effectively improve the service coverage of core
+regions, county markets and high-quality customer groups.
+ICBC
+e Life
+Upgrading Online Personal Services
+Discussion and Analysis
+User activeness ranked
+first in the industry
+3.06 million active users
+ICBC Enterprise Mobile
+Banking
+partners
+Over 10,000
+API Open Platform
+ICBC
++
+44
+connected
+platforms
+110
+Ju Fu Tong
+tenants
+m 33,000
+ICBC Cloud Platform
+ICBC Enterprise Mobile Banking: The Bank innovatively launched Enterprise Mobile Banking 3.0 based on the needs of
+corporate customers, realizing new technology applications such as voiceprint authentication, digital-human customer
+service and OCR recognition. The Bank rolled out functions and products such as Quick Lending for Operation,
+e-Mortgage Quick Loan, foreign exchange settlement, credit report inquiry and payroll payment. It also introduced
+online and offline integrated services including account opening reservation, online application reservation and
+settlement account information change.
+Ju Fu Tong: The "Ju Fu Tong" scenarios-embedded comprehensive financial services were promoted to serve more
+than 10 industries including government service, transportation, medical care, tourism and agriculture. Besides, it
+carried out cooperation with a number of governmental, industrial and internet-based consumption platforms, e.g.
+12306.
+Note: These data are as at 31 Dec 2020.
+ICBC
+The Bank optimized its institutions and employees. By adhering to the human resource efficiency improvement ideas
+of "serving strategy, scientific configuration, reducing consumption and enhancing efficiency, cultivating talents, and
+stimulating vitality", it effectively guaranteed the input of human resources in key strategic areas, business lines and
+professional talent teams. The Head Office's organizational structure and branch system was optimized and adjusted,
+to practically promote the construction of an intensive operation center and steadily implement the centralization of
+domestic and overseas businesses. Besides, the Bank deepened the optimization and adjustment of sub-branch layout,
+streamlined the setting of urban sub-branches, and strengthened the construction of county-level sub-branches, to
+boost efficiency improvement with intensive human resources.
+Mobile Payment: The Bank deeply cultivated the three-party payment and consumption scenarios, and participated
+in the consumption coupon issuance activities sponsored by Beijing and Wuhan municipal governments. It carried
+out such activities of 22 phases in total, reaching 33.80 million person-times of customers, and successfully issued
+nearly 5.00 million consumption coupons, directly driving consumption of approximately RMB0.47 billion. During
+the COVID-19 pandemic period, more than 100 activities on 30 themes were carried out, such as "Cloud Vegetable
+Buying", "Traveling with Peace of Mind", and "ICBC Food Season".
++
+ICBC Link: The Bank refined user experience by upgrading the version 5.0 of ICBC Link and fully optimizing the
+functional layout, process and experience of main interface. The WeChat mini program of customer manager was
+launched to integrate communication and transaction. In addition, the Bank innovatively launched the "gold red
+packet", the first gold accumulation model integrating "financial service + social intercourse" in the banking sector.
+ICBC e Life: The Bank established an open ecosystem composed of online campaign pages, APP, WeChat applets,
+WeChat official account, and life account, to realize the transformation of comprehensive operation. It built nine
+scenarios including "shopping, catering, accommodation, travel, entertainment, education, health, urban services, and
+poverty alleviation and inclusiveness". The platform developed six special columns of "shopping, credit bonus points,
+installment, in-app purchase, poverty alleviation, and recreation".
+ICBC Mall: The Bank completed the version 3.0 upgrade project for ICBC Mall, and launched interactive shopping
+experience functions such as face registration and APP aggregate payment. By adhering to featured and quality
+management, it sped up the layout of key areas such as procurement, travel and cross-border e-commerce, with the
+transaction amount of "5e+4" featured segments' reaching RMB297.6 billion.
+Annual Report 2020
+45
+Discussion and Analysis
+E3
+416
+million customers
+1 "5e+4" featured segments refer to ICBC e Procurement, ICBC e Assets, ICBC e Cross-border, ICBC e Travel, ICBC e Public Welfare, Court
+Affairs Management Cloud, Car Cloud Loan, Ji Ke Platform and Open Platform.
+161 million users
+ICBC Mobile: The Bank strengthened the application of technological innovations. It innovatively launched Mobile
+Banking 6.0, created "Customer Manager Cloud Studio" and "Cloud Outlet", and introduced functions such as vocal
+print login, AR recognition of foreign currency, and Al intelligent recommendation. The Bank guided the rendering
+of services in the lower-tiered market. It launched the "Beautiful Home" version for the county market, to provide
+exclusive financial services for "benefiting the people, benefiting farmers, and benefiting business merchants",
+which were introduced in 1,509 county sub-branches. The Bank implemented service transformation for the elderly.
+It continued to optimize the function and experience of "Happy Life" version for elderly persons, to improve the
+convenience of mobile financial services for the elderly. The Bank promoted the integration of online and offline
+services. During the COVID-19 pandemic, "contactless" functions were quickly introduced, such as online modification
+of card passwords, conversion of LPR interest rate and credit card repayment from other banks; online ordering and
+offline mailing services under 18 scenarios were supported, and 92 kinds of services could be handled at outlets
+through mobile banking code scanning instead of bank cards.
+ICBC topped 100 million
+ICBC
+Mobile
+Mall
+Both customer size and
+activeness led the peers
+91.08 million users
+177 million users
+Monthly active customers
+ICBC e Wallet: The application areas covered government affairs, people's livelihood services, transportation,
+membership management, house purchase services, consumer finance and other scenarios, serving more than
+33.00 million customers. During the pandemic, the "contactless" full online payroll service model was innovatively
+introduced, with the adoption of full online account opening and payroll payment process. As at the end of 2020,
+nearly one million personal customers were served under this online payroll service model. The Bank was also awarded
+the "Best API and Open Banking Implementation" by The Asian Banker and the "Best Internet Banking Service" by
+Asiamoney.
+4.4
+Yangtze River Delta
+2,707
+7,183,515
+21.5
+2,533
+15.2
+62,360
+14.2
+Pearl River Delta
+4,935,763
+14.8
+1,995
+12.0
+48,649
+11.1
+4,994,061
+15.0
+16.3
+Bohai Rim
+558
+15.7
+3.4
+19,243
+12.1
+4,024,527
+Overseas and others
+9.9
+43,588
+9.8
+1,633
+3.7
+1,246,742
+Northeastern China
+68,868
+20.2
+22.2
+3,686
+12.7
+4,249,027
+Western China
+19.3
+85,077
+20.9
+3,479
+10.0
+3,334,445
+Central China
+88,823
+0.2
+Emerging business
+29.0
+FinTech
+8.9%
+Master
+8.8%
+Operation management
+24.4%
+Associate
+12.9%
+Corporate banking
+58.4%
+8.1%
+Bachelor
+16.1%
+Operation and comprehensive
+42.6%
+Personal banking
+Educational Background of Employees
+Employee Specialization
+As at the end of 2020, the Bank had a total of 0.44 million employees, including 417 thousand employees in domestic
+branches, 7 thousand employees in domestic subsidiaries, and 16 thousand employees in overseas institutions.
+Basic Information on Employees and Institutions
+Discussion and Analysis
+23,179
+support
+32
+Risk and compliance management 6.4%
+8.1%
+9,665,936
+Head Office
+(%)
+employees
+Number of
+employees
+(%)
+Number of institutions
+institutions
+(%)
+(in RMB millions)
+Item
+Below associate
+Doctorate
+of
+Percentage
+of assets
+Assets
+Percentage
+Percentage
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES
+As at the end of 2020, the Bank had a total of 16,623 institutions, representing an increase of 18 as compared with
+the end of the previous year. Among them, there were 16,197 domestic institutions and 426 overseas ones. Domestic
+institutions included the Head Office, 36 tier-one branches and branches directly managed by the Head Office, 456
+branches in capital cities and tier-two branches, 15,541 outlets, 31 Head Office-level profitability units along with their
+directly managed institutions and branches, and 132 subsidiaries and their branches.
+1.0%
+2.0%
+Non-banking business
+Others
+2.1%
+0.2%
+of
+5.2
+Profit before taxation
+(6,288,958)
+ICBC Investments
+ICBC (Argentina) (Argentina)
+ICBC (Peru) (Peru)
+ICBC (Brasil) (Brazil)
+ICBC (Mexico) (Mexico)
+ICBC (Canada) (Canada)
+ICBCFS (USA)
+Argentina (Argentina)
+ICBC (USA) (USA)
+America
+ICBC (New Zealand) (New Zealand)
+Auckland Branch (New Zealand)
+Riyadh Branch (Saudi Arabia)
+Kuwait Branch (Kuwait)
+Sydney Branch (Australia)
+Vientiane Branch (Lao PDR)
+Phnom Penh Branch (Cambodia)
+Yangon Branch (Myanmar)
+ICBC (Almaty) (Kazakhstan)
+Karachi Branch (Pakistan)
+Mumbai Branch (India)
+Dubai (DIFC) Branch (UAE)
+Abu Dhabi Branch (UAE)
+Doha Branch (Qatar)
+Ho Chi Minh City Representative
+Office (Vietnam)
+Hanoi Branch (Vietnam)
+ICBC (Thai) (Thailand)
+Institutions (country/region)
+New York Branch (USA)
+Inversora Diagonal (Argentina)
+Panama Branch (Panama)
+E
+E
+53
+Annual Report 2020
+In terms of equipment leasing, the company steadily enhanced the professional customer service capability,
+continuously consolidated the competitive advantages in transport, energy, large-size equipment and other fields, and
+increased the support for clean energy, intelligent transport, high-end equipment manufacturing and other fields. It
+actively explored the business innovation mode in the fields such as culture and sports, healthcare, green energy.
+The company was rated as the "Best Financial Leasing Company of the Year" by the Financial Times for three
+consecutive years, and the "Best Financial Leasing Company of the Year" by the Securities Times.
+In terms of shipping leasing, the company focused on high-quality customers and flagship enterprises in the industry,
+and strengthened the analysis and judgment of the situations of global shipping market. Both new and potential
+projects increased steadily. Its vessel assets covered bulk carriers, container ships, oil tankers, gas ships, luxury cruise
+ships and other high value-added assets, providing domestic and foreign customers with diverse service modes, such
+as financial leasing, operating leasing, joint leasing, index-linked leasing arrangement, and parcel transportation
+service.
+Its aircraft leasing line specially optimized asset layout, and actively improved the efficiency of managing existing
+assets. At the end of 2020, it owned and managed more than 780 aircrafts, and served 82 renowned airline
+companies around the world. Its business spanned over Europe, Asia-Pacific region, North America, South America and
+Africa, etc.
+ICBC Leasing deepened the coordination with the Group's strategy, actively integrated into the Group's "1 + N"
+comprehensive financial service system, and continuously improved the professional customer service capability,
+the ability of serving the Group's strategy and core competency. It continued to strengthen business expansion
+and business model innovation in Beijing-Tianjin-Hebei region, Yangtze River Delta, Guangdong-Hong Kong-Macau
+Greater Bay Area, Central China and Chengdu-Chongqing region.
+4
++
++
+ICBC LEASING
+It actively enhanced investor education. Its investor education base was included in the list of state-level securities and
+futures investor education bases, which was the first state-level internet investor education base in the fund industry
+and rated as an "Advanced Unit in Southbound Stock Connect Investor Education in 2020".
+Product and service innovation was advanced steadily. ICBC Credit Suisse Asset Management continued to strengthen
+the development of equity and hybrid products, took the lead in the industry to issue STIB 50 ETF fund, and made
+every effort to support the building of the Science and Technology Innovation Board. It continuously improved
+customer services, upgraded the features of the ICBC Credit Suisse Fund APP, and launched the Fund Wealth in ICBC
+Mobile, providing customers with a one-stop fund investment services such as query, investment, review, use and
+learning.
+Focusing on the reform and development of capital market, ICBC Credit Suisse Asset Management actively served the
+real economy and met the diversified investment demands of customers. Operating quality and efficiency continuously
+improved, and the total amount of assets under management continued to maintain a sound momentum of steady
+growth. It performed well in investment, and ranked first in terms of the overall return on investment of the stock
+funds under management. Business structure was continuously improved, and the scale of annuity funds, social
+security funds and other pension funds under management totalled RMB527.4 billion, an increase of 44.2% over the
+end of the previous year, continuing to stay ahead in the industry. The scale of non-monetary funds grew quickly, of
+which stock funds increased by 103%.
++
+ICBC CREDIT SUISSE ASSET MANAGEMENT
+Diversified Operation
+Discussion and Analysis
+Manila Branch (Philippines)
+Discussion and Analysis
+Tokyo Branch (Japan)
+Seoul Branch (South Korea)
+Busan Branch (South Korea)
+Mongolia Representative
+Office (Mongolia)
+Singapore Branch (Singapore)
+ICBC (Indonesia) (Indonesia)
+ICBC (Malaysia) (Malaysia)
+Asia-Pacific Region (except
+Brussels Branch (Belgium)
+(the Netherlands)
+Eliminated and
+Paris Branch (France)
+ICBC (Europe) (Luxembourg)
+Institutions (country/region)
+Frankfurt Branch (Germany)
+Luxembourg Branch (Luxembourg) ③
+Europe
+Milan Branch (Italy)
+The background map is sourced from the World Map
+No. GS(2016)1613 produced under the supervision of the
+Ministry of Natural Resources of the People's Republic of China.
+Discussion and Analysis
+ICBC
+52
+51
+Annual Report 2020
+As at the end of 2020, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD422,079 million, an increase of USD16,396 million or 4.0% from the end
+of the previous year, and they accounted for 8.3% of the Group's total assets. Profit before taxation during the
+period was USD3,017 million, representing a decrease of USD1,073 million or 26.2% and accounting for 5.0% of the
+Group's profit before taxation. Total loans amounted to USD202,844 million, representing an increase of USD2,011
+million or 1.0% from the end of the previous year; and total deposits were USD148,221 million, representing an
+increase of USD13,472 million or 10.0%.
+The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the Bank's
+gain on investment recognized by the Bank during the reporting period.
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+Madrid Branch (Spain)
+E
+Warsaw Branch (Poland)
+(Hong Kong, China)
+ICBC (Macau) (Macau, China)
+Macau Branch (Macau, China)
+ICBC (Asia) (Hong Kong, China)
+ICBC International
+(Hong Kong, China)
+Hong Kong and Macau
+Institutions (country/region)
+Hong Kong Branch
+®
+African Representative Office
+(South Africa)
+Institutions (country/region)
+Investments in Standard Bank
+(South Africa)
+Africa
+Zurich Branch (Switzerland)
+ICBC (Austria) (Austria)
+Prague Branch (Czech Republic)
+ICBC Turkey (Turkey)
+Bank ICBC (USC) (Russia)
+ICBC Standard Bank (UK)
+London Branch (UK)
+ICBC (London) (UK)
+(Greece)
+Greece Representative Office
+Hong Kong and Macau)
+Institutions (country/region)
+Note: (1)
+ICBC-AXA
+ICBC-AXA actively advanced the optimization of business mix. It adhered to the transformation of regular payment
+business, and its regular premium income hit a record high. As residents raised awareness about the importance of
+health insurance, it seized the opportunity to develop health insurance business. It paid close attention to the changes
+in the capital market, optimized the investment portfolio, enhanced the risk management of investment assets, and
+achieved a significant improvement in investment returns.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (Austria), a wholly-owned subsidiary of the Bank in Austria, has a share capital of EUR200 million. ICBC (Austria)
+provides financial services such as corporate deposit, loan, trade finance, international settlement, cash management, cross-
+border RMB business, foreign exchange transactions, and financial advisory for cross-border investment and financing. At the
+end of 2020, ICBC (Austria) recorded total assets of USD774 million and net assets of USD237 million. It suffered a net loss
+of USD3.28 million during the year.
+ICBC AUSTRIA BANK GMBH
+ICBC (Turkey), a subsidiary of the Bank in Turkey, has a share capital of TRY860 million, in which the Bank holds a 92.84%
+stake. It holds commercial banking, investment banking and asset management licenses, and provides corporate customers
+with comprehensive financial services including deposit, project loan, syndicated loan, trade finance, small and medium-
+sized enterprise loan, investment and financing advisory, securities brokerage and asset management, and renders personal
+customers with financial services such as deposit, consumption loan, residential mortgages, credit card and E-banking. At the
+end of 2020, ICBC (Turkey) recorded total assets of USD3,391 million and net assets of USD196 million. It generated a net
+profit of USD13.21 million during the year.
+ICBC TURKEY BANK ANONIM ŞIRKETI
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB10,810
+million. It mainly provides a full spectrum of corporate banking services including corporate and project loan, trade finance,
+deposit, settlement, securities brokerage, custody, franchise treasury business and securities trading, foreign currency
+exchange, global cash management, investment banking and corporate financial consulting, as well as personal banking
+services. At the end of 2020, Bank ICBC (JSC) recorded total assets of USD1,067 million and net assets of USD164 million. It
+generated a net profit of USD8.63 million during the year.
+BANK ICBC (JOINT STOCK COMPANY)
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD369 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2020, ICBC (USA) recorded total assets of USD2,901 million and net assets of USD390 million. It suffered a net
+loss of USD51.33 million during the year.
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million, in
+which the Bank holds a 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses such
+as base metals, precious metals, commodities and energy as well as global financial markets businesses such as exchange
+rate, interest rate and credit. At the end of 2020, ICBC Standard Bank recorded total assets of USD27,739 million and net
+assets of USD1,303 million. It generated a net profit of USD117 million during the year.
+Discussion and Analysis
+ICBC
+56
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital of
+USD200 million. It provides banking services such as deposit and exchange, loans, trade finance, international settlement,
+funds clearing, foreign exchange trading and retail banking. At the end of 2020, ICBC (London) recorded total assets of
+USD2,009 million and net assets of USD457 million. It generated a net profit of USD10.59 million during the year.
+ICBC (LONDON) PLC
+ICBC (Europe), a wholly-owned subsidiary of the Bank, was incorporated in Luxembourg with a paid-up capital of EUR437
+million. Paris Branch, Brussels Branch, Amsterdam Branch, Milan Branch, Madrid Branch, Warsaw Branch and Greece
+Representative Office are structured under ICBC (Europe), which mainly offers financial services including loan, trade finance,
+settlement, treasury, investment banking, custody, franchise wealth management, etc. At the end of 2020, ICBC (Europe)
+recorded total assets of USD6,830 million and net assets of USD761 million. It suffered a net loss of USD14.17 million during
+the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC STANDARD BANK PLC
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+ICBCFS, a wholly-owned securities subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million.
+It mainly specializes in securities clearing and financing business in Europe and America, and offers securities brokerage
+services including securities clearing, financing and custody for institutional customers. At the end of 2020, ICBCFS recorded
+total assets of USD23,117 million and net assets of USD97 million. It generated a net profit of USD5.19 million during the
+year.
+Annual Report 2020
+ICBC
+58
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the
+Bank holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other
+businesses as approved by CSRC, and owns many business qualifications including mutual fund, QDII, enterprise annuity,
+specific asset management, domestic and overseas investment manager of social security fund, RQFII, insurance asset
+management, non-listed asset management, occupational annuity, manager of basic pension insurance investment. It is
+one of the fund companies with the most comprehensive qualifications in the industry. At the end of 2020, ICBC Credit
+Suisse Asset Management managed a total of 164 mutual funds and nearly 600 enterprise annuity accounts and segregated
+management accounts as well as non-listed assets portfolios, with the assets under management amounting to RMB1.41
+trillion, and recorded total assets of RMB14,924 million and net assets of RMB11,303 million. It generated a net profit of
+RMB1,973 million during the year.
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+Major Domestic Subsidiaries
+ICBC (Argentina), a wholly-owned subsidiary of the Bank in Argentina, has a share capital of ARS18.8 billion. With the full-
+functional commercial banking license, ICBC (Argentina) provides a full range of commercial banking services including
+working capital loan, syndicated loan, structured financing, trade finance, personal loan, auto loan, spot/forward foreign
+exchange trading, financial markets, cash management, investment banking, bond underwriting, asset custody, leasing,
+international settlement, E-banking, credit card, asset management, etc. At the end of 2020, ICBC (Argentina) recorded total
+assets of USD4,151 million and net assets of USD663 million. It generated a net profit of USD112 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD120 million. Holding a full-
+functional commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement,
+trade finance, foreign exchange trading, E-banking and other services. At the end of 2020, ICBC (Peru) recorded total assets
+of USD824 million and net assets of USD106 million. It generated a net profit of USD8.84 million during the year.
+ICBC PERU BANK
+ICBC (Brasil), a wholly-owned subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million. ICBC (Brasil) offers
+commercial banking and investment banking services such as deposit, loan, trade finance, international settlement, fund
+transaction, franchise wealth management and financial advisory. At the end of 2020, ICBC (Brasil) recorded total assets of
+USD270 million and net assets of USD39 million. It suffered a net loss of USD2.34 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN1,597 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) offers corporate deposit, loan, international settlement, trade finance,
+foreign exchange trading and other services. At the end of 2020, ICBC (Mexico) recorded total assets of USD201 million and
+net assets of USD32 million. It suffered a net loss of USD 18.09 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD208 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) provides corporate and retail banking
+services such as deposit, loan, settlement and remittance, trade finance, foreign exchange trading, funds clearing, cross-
+border RMB settlement, RMB currency notes, cash management, E-banking, bank card and investment and financing
+information consulting service. At the end of 2020, ICBC (Canada) recorded total assets of USD1,944 million and net assets
+of USD278 million. It generated a net profit of USD1.45 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+Discussion and Analysis
+57
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD234 million. ICBC
+(New Zealand) provides corporate and personal banking services such as account management, transfer and remittance,
+international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the end of 2020,
+ICBC (New Zealand) recorded total assets of USD1,477 million and net assets of USD195 million. It generated a net profit of
+USD9.05 million during the year.
+ICBC-AXA strengthened its guidance role of the "High Growth in Value" strategy, coordinated the COVID-19
+containment and business development, and implemented the social responsibilities of risk protection. In support of
+fighting against the pandemic, the company took the initiative to design and provide the exclusive "Medical Angel"
+life insurance product for the medical staff in Hubei Province. A total of 2,258 cases were handled in 2020, with a
+total compensation of RMB40.56 million. It donated a total sum assured of RMB500 billion insurance products for
+people at the front line of fighting against COVID-19 pandemic.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+In light of the New Rules on Asset Management and other regulatory requirements, ICBC Wealth Management
+continuously exploited products and services, and enhanced investment research and the building of core risk control
+capability. It served the demands of 25.68 million individual customers, 89 thousand private banking customers
+and 722 thousand corporate customers for asset allocation and wealth management, and achieved leap-forward
+development starting from scratch to the management scale of more than one trillion.
++
+ICBC WEALTH MANAGEMENT
+Discussion and Analysis
+ICBC
+54
+As one of the first pilot banks to conduct debt-for-equity swap authorized by the State Council, ICBC Investment
+actively and steadily expanded and improved market-oriented debt-for-equity swap business, made strategic
+arrangements with a focus on the supply-side structural reform, and diversified fund-raising channels. It served the
+high-quality development of manufacturing industry, the mixed ownership reform of central enterprises and the
+development of private economy, and continuously improved the quality and efficiency in serving the real economy.
+It was the first in the industry to launch a special fund for the prevention and control of COVID-19 pandemic, in a bid
+to help enterprises resume work and production. It launched the innovative mode of first investing in the headquarters
+of central enterprises through debt-for-equity swap, and made every effort to support China's energy reform.
+ICBC Investment gave full play to the role of shareholder, and sent directors and supervisors to the shareholding
+subsidiaries in which it conducted debt-for-equity swap. It took an active part in these companies' corporate
+governance, and provided comprehensive financial services for them by bank-company interconnection and
+investment-loan interconnection, and energetically supported the reform and development of these enterprises.
+ICBC Wealth Management kept improving its business structure and product portfolio, and advanced the steady
+growth of the proportion of non-cash, hybrid and medium to long-term products. It released the first net worth-based
+product linked to options in the industry. It was the first among all banks to launch a wide-spectrum unsecured bond
+index and an open USD-denominated wealth management product. The "ICBC CSOP FTSE Chinese Government Bond
+Index ETF" was officially listed on Singapore Exchange.
++4
++
+ICBC INVESTMENT
+The four business segments, i.e. investment banking, sales and trading, investment management and asset
+management, achieved smooth development. ICBC International was among the highest echelon of the market in
+terms of the underwriting scale of IPO business, and stayed ahead in the market in the underwriting scale of overseas
+bonds. It was promoted to the Class-B securities firms on the Hong Kong Stock Exchange. It was the first among
+domestic peers to launch cross-border two-way RMB fund pool business. Its market research was awarded the "Best
+Overseas Analyst Team" in the Greater China by the Institutional Investor.
+ICBC International made overall plans to promote the regular pandemic prevention and control and the business
+development, provided sound customer service for listed companies and investors, ensured 24-hour trading services
+for customers, and stabilized market sentiment.
+4
+ICBC INTERNATIONAL
+By the end of 2020, ICBC-AXA had 1.44 million in-force individual customers, representing an increase of 9.7% over
+the end of the previous year, remaining as the first bank-affiliated insurance company in terms of premium income. It
+won the "Ark Award for Model Deeds in COVID-19 Containment of China's Insurance Industry in 2020", the "Best
+Insurance Company in Supporting COVID-19 Containment in 2020" and the "Brand Influence Insurance Company
+in 2020", and ranked first in the comprehensive competitiveness list of foreign-invested life insurance companies in
+2020.
++
+ICBC Wealth Management actively enhanced management capability, continuously consolidated the core advantages
+in fixed-income and project investment, actively cultivated multi-asset, equity, quantified and cross-border investment
+capability, advanced the steady growth of net worth of overall products, and constantly improved the applicability of
+serving the real economy.
+In light of the Group's uniform risk appetite, ICBC Wealth Management built a comprehensive risk control compliance
+framework to strengthen the risk prevention and control for core business and key fields, and quickened the building
+of risk management platform.
+It won a number of industry prestigious awards, including "2020 Golden Bull Award for Banking Wealth
+Management". The numbers of subscribers for the WeChat public account of "ICBC Wealth Management" exceeded
+100 thousand.
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a
+97.86% stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade
+finance, remittance, settlement, leasing and consulting. At the end of 2020, ICBC (Thai) recorded total assets of USD9,005
+million and net assets of USD1,119 million. It generated a net profit of USD79.63 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR833 million,
+it is able to provide a full range of commercial banking services. At the end of 2020, ICBC (Malaysia) recorded total assets of
+USD1,019 million and net assets of USD302 million. It generated a net profit of USD10.11 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR3.71 trillion, in which the Bank holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loans, trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the
+end of 2020, ICBC (Indonesia) recorded total assets of USD3,967 million and net assets of USD429 million. It generated a
+net profit of USD8.51 million during the year.
+PT. BANK ICBC INDONESIA
+Discussion and Analysis
+55
+Annual Report 2020
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2020, ICBC (Macau) recorded total assets of USD50,777 million
+and net assets of USD3,540 million. It generated a net profit of USD298 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+ICBC International, a licensed integrated platform for financial services in Hong Kong that is wholly-owned by the Bank,
+has a paid-up capital of HKD4,882 million. It mainly renders a variety of financial services, including corporate finance,
+investment management, sales and trading, and asset management. At the end of 2020, ICBC International recorded total
+assets of USD7,948 million and net assets of USD1,630 million. It generated a net profit of USD225 million during the year.
+ICBC INTERNATIONAL HOLDINGS LIMITED
+ICBC (Asia) is a wholly-owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD44,188
+million. It provides comprehensive commercial banking services and the major businesses, including commercial credit, trade
+finance, investment service, retail banking, e-banking, custody, credit card, receiving bank services for IPOs and dividend
+distribution, etc. At the end of 2020, ICBC (Asia) recorded total assets of USD120,113 million and net assets of USD 17,773
+million. It generated a net profit of USD713 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+Major Overseas Subsidiaries
+Major Controlled Subsidiaries and Equity Participating Company
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of KZT8,933
+million. It principally engages in commercial banking services such as deposit, loan, international settlement and trade
+finance, foreign currency exchange, guarantee, account management, internet banking and bank card service. At the end
+of 2020, ICBC (Almaty) recorded total assets of USD514 million and net assets of USD72 million. It generated a net profit of
+USD10.45 million during the year.
+428
+Amsterdam Branch
+80,926
+50
+ICBC
+426
+4,090
+3,017
+405,683
+422,079
+Total
+Bank(1)
+376
+158
+3,988
+3,887
+Investment in Standard
+428
+426
+3,714
+2,859
+(37,213)
+401,695
+418,192
+Subtotal
+Global custody service: The Bank seized the opportunity brought by the opening of capital market to achieve rapid
+expansion of custody asset size, and ranked first among domestic banks in terms of the number of qualified foreign
+institutional investors. To promote opening up to the outside world at a high level, the Bank served as the Depository
+Receipt bank for the first Chinese Depository Receipt (CDR) transaction, and successfully provided custody service
+for the first batch of "Shenzhen-Hong Kong ETF Connect" funds and the largest overseas listed China government
+bond ETF fund. It strengthened the risk management of global custody network during the COVID-19 pandemic to
+guarantee the smooth operation of global custody products.
+(44,378)
+Financial market business: The Bank established a green channel, giving priority to the foreign exchange settlement
+and sales business handled for pandemic prevention and control, and helped foreign trade and foreign-invested
+enterprises control exchange rate risk. The Bank established the interbank bond and foreign exchange market business
+partnership with overseas institutional investors from nearly 60 countries and regions. The Bank participated in the
+innovation of opening-up project, and implemented the first FX Spot program trading in the China Foreign Exchange
+market. As a market marker and an agency settlement bank, it completed the first batch of direct transactions in the
+interbank bond market direct investment channel (CIBM Direct) of overseas institutional investor customers and the
+first transaction in the extended trading hours. The Bank took the lead in underwriting the first panda bond issued by
+an international multilateral institution for COVID-19 containment and the first panda bond issued by an internet firm.
+Global asset management services: The Bank constantly improved the foreign exchange wealth management product
+system, strived to develop foreign exchange and cross-border RMB products, expanded the scale of management and
+advisory assets, and actively met the demands of domestic and overseas customers for foreign exchange and cross-
+border wealth management. The government bond index ETF was successfully issued and formally listed on Singapore
+Exchange. ICBC Wealth Management ranked first in terms of the market share of cross-border and foreign-currency
+wealth management products.
+Personal banking: The Bank endeavored to enhance public convenience in the Guangdong-Hong Kong-Macau Greater
+Bay Area by launching the "Bay Area Service Link", "Bay Area Account Link" and "ICBC Pay" services. ICBC e Life
+created the "Bay Area Life" column and the Bank launched the Greater Bay Area virtual credit card. The functions
+of overseas mobile payment and online marketing of "ICBC Partner" and "ICBC e Payment" were improved. The
+discount campaigns of contactless payment were carried out to our customers. Personal consumer finance products,
+such as "card-and-loan-in-one" and "ICBC e Loan", were successfully launched to enable combined online application
+for overseas credit card product and loan product.
+undistributed assets
+Total
+33,345,058
+100.0
+16,623
+100.0
+439,787
+100.0
+Note: Overseas and other assets include investments in associates and joint ventures.
+Annual Report 2020
+49
+Discussion and Analysis
+Internationalized and Diversified Operation
+Internationalized Operation
+The Bank provided comprehensive services for high-level opening-up, and accelerated the implementation of the strategy
+to become the preferred bank for domestic foreign exchange business. The local and foreign-currency integrated operation
+system was improved, and efforts were made to enhance cross-border financial services and provide targeted and
+efficient services for the new development pattern. The Bank harnessed its global operation advantages, and launched the
+"Chunrong Action" to support the stability of foreign trade and investment. It supported enterprises' resumption of work
+and production, and helped maintain the stability of global industrial chain and supply chain. The Bank actively fulfilled its
+social responsibilities in supporting the fight against the COVID-19 pandemic in the countries and regions where its overseas
+institutions are located.
++
+4
+4
++
+Corporate banking: The Bank strengthened financial support for Chinese enterprises "Going Global" and the Belt
+and Road Initiative. It made coordinated efforts to advance the characteristic financial innovation in free trade zones,
+promoted the implementation of large-scale and high-quality overseas cooperation projects, and provided cross-border
+customers with "one-stop" comprehensive financial services. The Bank has remained the first place for six consecutive
+years in terms of the number of deals completed for the cross-border acquisition transactions of Chinese-invested
+enterprises according to the ranking promulgated by Refinitiv. The Bank was among market leaders in Hong Kong IPO
+underwriting and sponsorship, and the underwriting of overseas bonds and offshore China bonds.
++
+Internet financial services: In tune with the development trend of the internet, the Bank offered overseas individual
+and corporate customers internet banking, mobile banking and other online channels, and provided services for 41
+countries and regions, providing services in 14 languages. A full range of financial services, including account query,
+transfer and remittance, investment and wealth management, and payment, were available to customers.
+(18.8)
+Eliminations
+1
+of 2019
+107
+108
+2,105
+1,565
+197,279
+204,181
+Hong Kong and Macau
+of 2020
+2019
+2020
+of 2019
+of 2020
+Item
+At the end At the end
+At the end At the end
+Number of institutions
+(in USD millions)
+(in USD millions)
+4
+Assets
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+Asia-Pacific Region
+1
+118,253
+950
+Africa Representative Office
+151
+152
+449
+42
+51,836
+51,106
+America
+79
+10
+75
+21
+302
+Discussion and Analysis
+89,030
+Europe
+Macau)
+(except Hong Kong and
+90
+90
+1,139
+108,867
+The Bank continued to improve its global network. Auckland Branch officially opened, and Panama Branch was
+granted a banking license. At the end of 2020, the Bank established 426 overseas institutions in 49 countries and
+regions and indirectly covered 20 African countries as a shareholder of Standard Bank Group. It had 124 institutions
+in 21 countries along the Belt and Road. The Bank also established correspondent banking relationships with 1,436
+overseas banking institutions in 143 countries and regions, making its service network covering six continents and
+important international financial centers around the world.
+Cross-border RMB business: The Bank advanced the building of cross-border RMB product system and multi-scenario
+cross-border RMB services, enriched RMB-denominated financial products in the offshore market, and actively
+supported the RMB-denominated settlement, pricing and financing of commodities and foreign contracted projects.
+The Bank promoted the innovative development of cross-border RMB business in key regions, including the Lingang
+New Area in Shanghai, Guangdong-Hong Kong-Macau Greater Bay Area and Hainan Free Trade Port. The Bank
+stepped up its efforts to develop key offshore RMB markets and boost the overall capability of offshore RMB services.
+It continuously improved the features of cross-border e-business service platform and the quality and efficiency of
+customer services. In 2020, the cross-border RMB business volume exceeded RMB7.2 trillion.
+100.0
+2.17
+1,187,749
+13.9
+11,664
+0.98
+commercial services
+Water, environment
+31,242
+1,154,201
+8,425
+0.73
+910,504
+10.6
+4,122
+0.45
+and public utility
+11.8
+14.8
+1,441,688
+Leasing and
+25.2
+20,683
+0.84
+2,131,892
+24.9
+17,466
+0.82
+and postal services
+Manufacturing
+1,555,382
+15.9
+65,361
+4.20
+1,445,154
+16.9
+73,976
+5.12
+management
+2,467,959
+Production and supply
+10.2
+13.78
+406,532
+4.7
+42,492
+10.45
+Construction
+260,667
+60,272
+2.7
+3.31
+252,104
+2.9
+5,344
+2.12
+Science, education,
+245,378
+8,636
+4.5
+437,283
+Wholesale and retail
+3,977
+0.40
+934,414
+10.9
+1,900
+0.20
+of electricity, heat,
+gas and water
+Real estate
+701,094
+7.2
+16,238
+2.32
+638,055
+7.5
+10,936
+1.71
+995,232
+240,187
+Transportation, storage
+NPLs
+521,638
+Personal business loans
+Credit card overdrafts
+loans
+2.30
+4,459
+1.2
+193,516
+2.8
+2.00
+1.43
+183,716
+Personal consumption
+0.23
+11,679
+30.8
+5,166,279
+3,668
+6,760
+1.30
+345,896
+16,761,319
+1.58
+293,978
+100.0
+18,624,308
+Total
+2.21
+14,994
+4.0
+677,933
+1.89
+12,906
+3.7
+681,610
+2.23
+7,710
+2.1
+0.28
+(%)
+16,207
+5,728,315
+92,051
+Corporate NPLs were RMB253,815 million, showing an increase of RMB53,093 million when compared with the end of the
+previous year, and representing a NPL ratio of 2.29%, with a rise of 0.27 percentage points. Personal NPLs amounted to
+RMB39,541 million, showing an increase of RMB699 million, and represented a NPL ratio of 0.56%, with a drop of 0.05
+percentage points.
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY OF LOAN CUSTOMERS
+In RMB millions, except for percentages
+At 31 December 2019
+At 31 December 2020
+Percentage
+NPL ratio
+1.23
+Percentage
+Item
+Loan
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPL ratio
+corporate loans
+Discounted bills
+406,296
+Residential mortgages
+0.61
+38,842
+38.1
+6,383,624
+0.56
+39,541
+38.2
+7,115,279
+Personal loans
+0.15
+623
+2.5
+421,874
+0.15
+622
+2.2
+30.8
+0.9
+Business departments of
+Senior management of subsidiaries
+0.61
+114,438
+1.43
+240,187
+1.58
+293,978
+2.71
+454,866
+2.21
+97,864
+411,900
+(%)
+Amount
+16,066,266
+96.21
+17,918,430
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2020
+95.86
+At 31 December 2019
+0.58
+0.81
+NPL ratio
+Percentage
+At 31 December 2020
+At 31 December 2019
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS AND NPLS
+Discussion and Analysis
+63
+Annual Report 2020
+149,926
+According to the five-category classification, pass loans amounted to RMB17,918,430 million at the end of 2020,
+representing an increase of RMB1,852,164 million when compared with the end of the previous year and accounting for
+96.21% of total loans. Special mention loans stood at RMB411,900 million, representing a decrease of RMB42,966 million,
+and accounting for 2.21% of the total, with a drop of 0.50 percentage points. NPLs amounted to RMB293,978 million,
+showing an increase of RMB53,791 million, and NPL ratio was 1.58%, with a rise of 0.15 percentage points.
+16,761,319
+100.00
+18,624,308
+0.17
+28,358
+0.16
+29,614
+0.68
+113,965
+100.00
+In RMB millions, except for percentages
+Total
+Loss
+The Bank's credit risk management has the following characteristics: (1) Unified risk appetite. Unified credit risk appetite is
+implemented for the Bank's credit risk exposures; (2) Entire-process management. The credit risk management covers the
+entire process including customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and
+post-lending monitoring; (3) System management. It continues to enhance the building of credit information system, and
+improve the tools to manage and control credit risk; (4) Strict management over credits. Strict qualification management is
+enforced on the business institutions and the credit practitioners. The Bank supervises and inspects its credits to promote
+compliant and robust operation; (5) The specialized institution is set up to conduct unified risk monitoring over credit risk
+businesses; and (6) The specialized institution is established to effectively coordinate management and directly participate in
+the collection and disposal of non-performing assets ("NPAS") in a timely manner or guide branches to do so.
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months in default, expected loss ratio, credit rating,
+collateral and other quantitative and qualitative factors.
+The Bank strictly adheres to regulatory requirements regarding credit risk management, diligently fulfills established
+strategies and objectives under the leadership of the Board of Directors and the Senior Management, and implements
+an independent, centralized and vertical credit risk management mode. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of credit risk management. The Senior Management is responsible for executing the
+strategies, overall policy and system regarding credit risk management approved by the Board of Directors. The Credit Risk
+Management Committee of the Senior Management is the reviewing and decision-making organ of the Bank in respect of
+credit risk management, is responsible for reviewing material and important affairs of credit risk management, and performs
+its duty in accordance with the Charters of the Credit Risk Management Committee. The credit and investment management
+departments at different levels undertake the responsibility of coordinating credit risk management at respective levels, and
+the business departments implement credit risk management policies and standards for their respective business areas in
+accordance with their functions.
+Credit risk is the risk where loss is caused to the banking business when the borrower or counterparty fails to meet its
+contractual obligations. The Bank's credit risks mainly originate from loans, treasury operations (including due from banks,
+placements with banks, reverse repurchase agreements, corporate bonds and financial bonds investment), receivables and
+off-balance sheet credit business (including guarantees, commitments and financial derivatives trading).
+Credit Risk Management
+Discussion and Analysis
+Credit Risk
+At the level of Head Office
+At the level of branches
+ICBC
+Credit Risk Management of Corporate Loans
+60
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+Third line of defense
+Internal Audit Sub-bureau
+Internal Audit Bureau
+Primary reporting line
+Secondary reporting line
+Second line of defense.
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+First line of defense
+branches and subsidiaries
+In 2020, the Bank's overall objective was to "build an enterprise risk management framework that matches a world-class
+and modern financial enterprise with global competitiveness". It focused on the "management of personnel, assets, defense
+lines and bottom lines", continuously improved the top-level design of risk management, and enhanced enterprise risk
+management based on the path of "active prevention, smart control and comprehensive management". The Bank revised
+and ameliorated the enterprise risk management system, performed risk management responsibilities, transmitted risk
+management culture, and achieved full coverage of institutions, businesses and personnel with risk management measures.
+Besides, it optimized the risk appetite and risk limit management system, improved risk emergency management capabilities
+and consolidated the foundation of the Group's consolidated risk management, to promote the intelligent construction of
+risk control system, and deepen the application of new technologies such as big data and artificial intelligence.
+The Bank continued to strengthen the building of the credit policy system. A joint prevention and control mechanism was
+established to support key business development and risk management, with the coordinated participation by front-, middle-
+and back-office departments, and an intelligent credit risk management and control model consisting of "Three Gates" and
+"Seven-color Pools"¹ was built, to highlight the strengthening of credit risk management and control. New credit approval
+regulations were implemented in an all-around manner, to optimize the review and approval system, and improve credit risk
+mitigation measures. Besides, the working capital loan management rules were optimized and integrated, the management
+of risk control process was strengthened, and the transformation of supporting systems was completed. The Bank also
+formulated the loan management measures for supporting technological enhancements of manufacturing enterprises, so as
+to provide positive support for the financing needs of these enterprises for technological upgrading and transformation and
+for the construction of high-quality projects.
+1 The intelligent credit risk management solutions of "Three Gates" and "Seven-color Pools" are the systematic summary of the Bank's
+management and control ideas on credit risk. "Three Gates" refer to asset selection at the entrance end, asset management at the
+threshold end and asset disposal at the exit end. "Seven-color Pools" cover seven color pools with risk rating from low to high, which are
+driven by intelligent risk control and can strengthen holistic coordination of the credit risk management and realize differential and precise
+risk management by pool, area and segment.
+Annual Report 2020
+Doubtful
+Substandard
+NPLs
+Special mention
+Pass
+Item
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+At the end of 2020, the Bank's maximum exposure to credit risk, without taking into account any collateral and other credit
+enhancements, was RMB35,016,818 million, an increase of RMB2,870,673 million compared with the end of the previous
+year. Please refer to "Note 51.(a)(i) to the Financial Statements: Maximum Exposure to Credit Risk Without Taking Account
+of Any Collateral and Other Credit Enhancements". For mitigated risk exposures of credit risk asset portfolio of the Bank,
+please refer to the section headed "Credit Risk" of the 2020 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited.
+Credit Risk Analysis
+In terms of investment business, the Bank strengthened pre-investment screening and analysis, paid close attention to the
+redemption risk of bonds due within the year, strengthened the monitoring of exiting bonds in key risk industries, and
+reinforced duration management. With respect to money market business, the Bank tightened up the pre-review and regular
+risk assessment of counterparty access, strengthened the systematic management and control of important risk management
+processes such as authorization, credit extension, counterparty access, collateral, transaction price and concentration, and
+improved ex post duration management, with appropriate potential risk analysis and investigation. As for derivative business,
+the Bank actively promoted the negotiation and signing of ISDA, NAFMII and other legal agreements, strictly managed
+and controlled the credit line of derivative counterparties through the Global Financial Market Transaction platform, and
+maintained regular monitoring of client margins and credit line.
+Credit Risk Management of Treasury Operations
+Discussion and Analysis
+ICBC
+62
+The Bank consolidated the credit management system for credit card business by improving related regulations and
+processes including the joint prevention and control mechanism for review and approval process and the authenticity
+review rules; and it established a scenario-based "1+N" credit management mechanism, to realize functions such as credit
+view, real-time credit granting, and real-time digital card issuance. The Bank innovated the limit management mode and
+built a customer-based financing limit management and control system. In addition, the Bank established and improved a
+multi-dimensional risk monitoring system, and developed a credit default risk management and control system for existing
+customers, to enhance differentiated risk management and control.
+For the purpose of proactively responding to the risks caused by the pandemic, the Bank made every effort to provide
+credit support and service guarantee for personal customers during the outbreak of the pandemic, and strengthened the
+mitigation of credit risk for customers whose repayment capability was severely affected by the pandemic. An intelligent
+implementation plan for credit risk management and control of personal loans was prepared, to strictly manage customer
+access, and strengthen differentiated risk warning and refined management of NPAs. Furthermore, the personal loan risk
+monitoring model was optimized to improve monitoring and warning capabilities, the case prevention management was
+properly conducted to enhance the tracking and remediation of risk events, and close attention was paid to the tracking and
+governance of key risk points.
+Credit Risk Management of Personal Loans
+The Bank strengthened the risk management in the real estate industry. It paid close attention to the risk changes in the
+real estate markets of different regions, focused on supporting ordinary commercial housing projects aimed to satisfy rigid
+demands that are in line with regulatory policies, proactively and prudently promote financing for commercial rental housing
+projects, and provided financial support for the building of government-subsidized housing projects in compliance with
+laws and regulations. In addition, it continued to implement quota management for commercial real estate investment and
+financing, for the purpose of reasonably controlling the total amount of investment and financing for such projects.
+The Bank enhanced the risk management of inclusive loans. In adherence to the whole-process risk prevention and control
+of inclusive loans, the Bank followed the development direction of "digital inclusiveness", and created an inclusive loan
+risk management system featuring "data-driven, intelligent warning, dynamic management, and continuous operation".
+It optimized customer selection and model access, to strictly control customer access. The duration management model
+in combination with on-site inspection and off-site monitoring was constantly prompted, with the performance of on-
+site inspection responsibilities, to continuously enrich off-site monitoring data sources, optimize monitoring models, and
+improve the accuracy and coverage of off-site monitoring. Moreover, the Bank kept monitoring the use of loans related to
+epidemic prevention, strictly implemented bail-in policy arrangements such as deferred principal and interest repayment, and
+reinforced the tracking and monitoring of loans with deferred debt service.
+The Bank strengthened the strategic guidance on credit policies. It actively provided support for the infrastructure projects
+under construction such as highways, railways, airports, urban rail transit and municipal public facilities as well as the
+construction of major projects for tackling areas of weaknesses. It highlighted the support for high-quality customers and
+projects in the emerging manufacturing fields such as new generation information technology and high-end equipment,
+to continuously intensify the differentiated policy management of the traditional manufacturing industry. Besides, active
+support was also given to the financing demand for consumption upgrade in the service industry. Through organic
+connection between industrial and regional policies, the Bank revised and improved the credit policies for key regions such
+as the Yangtze River Delta, the Guangdong-Hong Kong-Macau Greater Bay Area, the Beijing-Tianjin-Hebei region, Central
+China, and the Chengdu-Chongqing economic circle. Priority was given to supporting key investment and financing projects
+along the Belt and Road, upgrading core technologies, stabilizing the global industrial chain, and promoting the dual-cycle
+related business needs at home and abroad.
+Discussion and Analysis
+61
+Percentage
+NPL ratio
+Item
+Loan
+Bank Card
+Department
+Global Market
+Department
+Board of Directors
+President
+Board of Supervisors
+Risk Management Committee
+Audit Committee of
+US Risk Committee
+Department
+of the Board of Directors
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Credit Risk
+Management Committee
+Market Risk
+Management Committee
+Operational Risk
+Management Committee
+Enterprise risk, market risk,
+country risk
+Credit risk
+the Board of Directors
+Institutional Banking
+Personal Banking
+Department
+Corporate Banking
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB18.0 billion. It mainly operates the
+financial leasing of large-scale equipment in critical fields such as aviation, shipping, energy and power, rail transit and
+equipment manufacturing. It also engages in various financial and industrial services including rental transfer, investment
+fund, securitization of investment assets, assets trading and assets management. At the end of 2020, ICBC Leasing recorded
+total assets of RMB281,417 million and net assets of RMB38,148 million, and generated a net profit of RMB3,513 million
+during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB12,505 million, in which the Bank holds a 60% stake.
+ICBC-AXA engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and
+re-insurance of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the
+State, and other businesses approved by the CBIRC. At the end of 2020, ICBC-AXA recorded total assets of RMB209,523
+million and net assets of RMB16,175 million. It generated a net profit of RMB1,451 million during the year.
+ICBC FINANCIAL ASSET INVESTMENT CO., LTD.
+ICBC Investment, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB12.0 billion and is one of the first pilot
+banks in China to conduct debt-for-equity swap authorized by the State Council. It holds the franchise license of non-bank
+financial institution and is mainly engaged in debt-for-equity swap and the supporting business. At the end of 2020, ICBC
+Investment recorded total assets of RMB145,625 million and net assets of RMB15,135 million. It generated a net profit of
+RMB1,122 million during the year.
+ICBC WEALTH MANAGEMENT CO., LTD.
+ICBC Wealth Management, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB16.0 billion. It engages
+mainly in the issuance of wealth management products, wealth management advisory and consulting service and other
+activities approved by CBIRC, and is qualified for general derivatives trading and foreign exchange business. At the end
+of 2020, ICBC Wealth Management recorded total assets of RMB17,861 million and net assets of RMB16,745 million. It
+generated a net profit of RMB408 million during the year.
+Major Equity Participation Company
+STANDARD BANK GROUP LIMITED
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.06% ordinary shares of Standard Bank. Based on mutual
+benefit and win-win cooperation, the two sides furthered their cooperation in equity cooperation, customer expansion,
+project financing, product innovation, risk management, FinTech and staff exchange. At the end of 2020, Standard Bank
+recorded total assets of ZAR2,532,940 million and net assets of ZAR215,272 million. It generated a net profit of ZAR14,513
+million during the year.
+Annual Report 2020
+59
+......
+Discussion and Analysis
+RISK MANAGEMENT
+Enterprise Risk Management System
+Enterprise risk management is a process to effectively identify, assess, measure, monitor, control or mitigate and report risks
+in order to ensure the realization of the Group's operating and strategic objectives by setting up effective and balanced risk
+governance structure, fostering robust and prudent risk culture, formulating unified risk management strategies and risk
+appetite, and implementing the risk limit and risk management policies. The principles of enterprise risk management of the
+Bank include full coverage, matching, independence, perspectiveness and effectiveness, etc.
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+Senior Executive
+Vice Presidents
+Chief Risk Officer
+Business departments
+Liquidity risk, interest rate risk
+2.5
+in the banking book
+Credit and Investment
+Management Department
+130,893
+14.2
+2,643,212
+Short-term corporate
+2.02
+200,722
+59.4
+9,955,821
+2.29
+4.95
+253,815
+11,102,733
+Corporate loans
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+59.6
+2,458,321
+14.7
+108,671
+Asset & Liability
+Management Department
+Internal Control &
+Operational risk, compliance risk Compliance Department
+Reputational risk
+Strategic risk
+IT risk
+Legal risk
+Executive Office
+Office of Steering Group
+for Deepening Reform
+Financial Technology
+Department
+Legal Affairs Department
+Board of directors of subsidiaries
+Management of Branches
+44.7
+7,497,500
+1.45
+122,922
+45.4
+8,459,521
+Medium to long-term
+loans
+4.42
+Risk Management
+Department
+5,462
+Finance
+208,560
+12.1
+2,260,445
+Guaranteed loans
+8.5
+1,427,911
+7.5
+1,401,565
+Pledged loans
+2,078,921
+47.1
+46.8
+8,703,068
+Loans secured by mortgages
+(%)
+Amount
+(%)
+Amount
+Item
+7,884,774
+12.4
+Unsecured loans
+6,259,230
+% of total
+At 31 December 2019
+In RMB millions, except for percentages
+Discussion and Analysis
+At 31 December 2020
+1 to 3 years
+Over 3 years
+Total
+3 months to 1 year
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+ICBC
+66
+100.0
+16,761,319
+32.0
+5,369,713
+33.6
+100.0
+18,624,308
+Total
+Percentage
+% of total
+Percentage
+At 31 December 2019
+Recoveries of loans
+transfer out
+(120,324)
+(7) (120,317)
+Write-offs and
+629
+629
+645
+4,977
+(16)
+95,941
+78,244
+(2,984)
+Charge/(reverse)
+58,592
+(53,754)
+(4,838)
+to stage 3
+171,201
+4,977
+and advances
+previously written off
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS BY COLLATERAL
+As at the end of 2020, the allowance for impairment losses on loans stood at RMB531,161 million, of which RMB530,300
+million at amortised cost, and RMB861 million at fair value through other comprehensive income. Allowance to NPLs was
+180.68%, showing a decrease of 18.64 percentage points over the end of last year; allowance to total loans ratio was
+2.85%, showing a decrease of 0.01 percentage points.
+Note: Please see "Note 23. to the Financial Statements: Loans and Advances to Customers" for details.
+31 December 2020
+861
+650
+(0)
+211
+530,300
+217,446
+89,151
+223,703
+Balance at
+(4,052)
+(2,542)
+(630)
+(880)
+Other movements
+At 31 December 2020
+(2,398)
+Amount
+Amount
+0.2
+32,668
+Production and supply of electricity, heat, gas and water
+Borrower H
+0.2
+37,893
+Finance
+Borrower G
+Borrower I
+Borrower J
+Total
+0.2
+Transportation, storage and postal services
+Borrower F
+0.2
+44,656
+Transportation, storage and postal services
+Borrower E
+0.3
+48,375
+39,407
+Transportation, storage and postal services
+28,646
+0.2
+ICBC
+68
+The Bank strictly complies with regulatory requirements on market risk management, has implemented an independent,
+centralized and coordinated market risk management model, and formed a management organizational structure featuring
+the segregation of the front, the middle and the back offices in the financial market business. The Board of Directors
+assumes the ultimate responsibility for monitoring market risk management. The Senior Management is responsible for
+executing the strategies, overall policy and system concerning market risk management approved by the Board of Directors.
+The Market Risk Management Committee of the Senior Management is the reviewing and decision-making organ of the
+Bank in respect of market risk management, is responsible for reviewing material affairs of market risk management,
+and performs its duty in accordance with the Working Regulations for the Market Risk Management Committee. The
+risk management departments at different levels undertake the responsibility of coordinating market risk management
+at respective levels, and the business departments implement market risk management policies and standards for their
+respective business areas in accordance with their functions.
+Market risk management is the process of identifying, measuring, monitoring, controlling and reporting market risk for
+the purposes of setting up and enhancing the market risk management system, specifying responsibilities and process,
+determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and preventing market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, stock prices and commodity prices). The Bank is primarily exposed to
+interest rate risk and currency risk (including gold).
+Market Risk
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2020 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+The Bank actively implemented the requirements of New Rules on Asset Management, strictly implemented the principle
+of "risk isolation between agency investment and proprietary business", and continued to strengthen the construction of
+system for managing asset management risk, to promote the transformation of such management system. The credit risk
+management mechanism was regulated for non-standardized agency investment business after the establishment of ICBC
+Wealth Management, and the basic management system for non-standardized agency investment business was revised,
+to intensify the refined and differentiated management of key businesses. With the continuous optimization of IT system
+functions related to asset management, the whole-process and systematic management of agency investment business
+was strengthened. The wealth management and investment risks were reviewed, to strictly control the use of wealth
+management funds. To optimize and improve the credit rating mechanism, a credit rating system with full market coverage
+and dynamic adjustment was established. With close attention paid to market fluctuations, market research and judgment
+was intensified, and stress testing was carried out on a regular basis, so that risk management could be more forward-
+looking and effective. Besides, a dynamic and prudent liquidity risk management system was built, to reasonably match
+product maturity and asset maturity, and tighten up liquidity monitoring at key points in time.
+Risk Management for Asset Management
+The Bank actively established and improved the management structure and system for large exposures, improved relevant
+rules and regulations, and clarified requirements on management framework, calculation method, policy and procedures
+related to large exposures management. Efforts were also made to promote the system related to large exposures
+management to effectively manage the Bank's large exposures.
+Large Exposures Management
+Discussion and Analysis
+67
+Annual Report 2020
+2.7
+501,463
+0.1
+28,539
+Transportation, storage and postal services
+ICBC FINANCIAL LEASING CO., LTD.
+loans
+Borrower D
+57,007
+267,507
+0.17
+28,659
+0.11
+21,257
+0.40
+66,848
+0.39
+1.44
+72,467
+89,625
+0.40
+74,820
+0.50
+83,084
+0.54
+98,963
+loans
+0.53
+268,216
+1.60
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Finance
+Borrower C
+0.4
+66,444
+Transportation, storage and postal services
+Borrower B
+0.6
+117,828
+Transportation, storage and postal services
+% of total
+loans
+Amount
+Industry
+Borrower
+Borrower A
+In RMB millions, except for percentages
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted
+for 3.5% and 14.8% of the Bank's net capital base respectively. The total amount of loans granted to the top ten single
+customers was RMB501,463 million, accounting for 2.7% of the total loans. The table below shows the details of the loans
+granted to the top ten single borrowers of the Bank as at the end of 2020.
+BORROWER CONCENTRATION
+Rescheduled loans and advances amounted to RMB11,960 million, representing an increase of RMB4,641 million as
+compared to the end of the previous year. Rescheduled loans and advances overdue for over 3 months amounted to
+RMB2,055 million, representing an increase of RMB720 million.
+RESCHEDULED LOANS
+Overdue loans stood at RMB267,507 million, representing a decrease of RMB709 million from the end of the previous year.
+Among which, loans overdue for over 3 months amounted to RMB168,544 million, representing a decrease of RMB16,588
+million.
+0.3
+2.23
+9,311
+to stage 2
+Head Office
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+772,372
+Loan
+NPL ratio
+Percentage
+NPL ratio
+Percentage
+At 31 December 2019
+At 31 December 2020
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+Item
+4.1
+21,603
+2.80
+2,341,370
+1.15
+31,540
+14.8
+2,746,019
+Pearl River Delta
+0.83
+26,024
+18.6
+3,124,793
+1.26
+45,304
+19.2
+3,582,682
+Yangtze River Delta
+2.68
+20,725
+4.6
+774,578
+Impacted by the COVID-19 pandemic, loans to some customers in the industries of leasing and commercial services,
+wholesale and retail deteriorated, hence the balance of NPLs rose to some extent.
+14.0
+The Bank continued to propel the optimization and adjustment of the industry's credit structure, stepped up efforts to
+shore up the development of the real economy, and made every effort to guarantee the funding needs of key enterprises
+for pandemic containment. Loans to transportation, storage and postal services increased by RMB336,067 million as
+compared with the end of the previous year, representing a growth rate of 15.8%, mainly due to increased credit support
+for key projects in such areas as highways and railways. Loans to leasing and commercial services increased by RMB253,939
+million, representing a growth rate of 21.4%, mainly for supporting the financing needs of developing projects for people's
+wellbeing, projects for strengthening areas of weaknesses in infrastructure, and for serving such strategic planning areas as
+national new areas, development zones and free trade zones. Loans to water, environment and public utility management
+grew by RMB243,697 million, representing a growth rate of 26.8%, mainly for steadily satisfying the investment and
+financing needs arising from significant projects and projects for people's livelihood in the areas of urban infrastructure
+construction, ecological environment protection and public services. Manufacturing loans rose by RMB110,228 million, an
+increase of 7.6%, mainly due to continuously increased credit support for high-end equipment manufacturing, epidemic
+prevention and material guarantee.
+ICBC
+14.00
+11,743
+0.9
+83,886
+Lodging and catering
+4.39
+7,305
+2.0
+88,448
+166,434
+7,593
+1.8
+177,408
+Mining
+culture and sanitation
+1.54
+3,214
+2.4
+4.28
+1.0
+7,163
+8.10
+64
+2.24
+192,093
+100.0
+8,559,942
+2.51
+245,127
+100.0
+9,768,044
+Total
+3.43
+6,511
+2.3
+190,096
+2.22
+5,495
+2.5
+247,866
+Others
+Discussion and Analysis
+(6,913)
+23,629
+Bohai Rim
+Item
+at FVOCI
+at amortised cost
+Movements of allowance for impairment losses on
+loans and advances to customers measured
+Movements of allowance for impairment losses on
+loans and advances to customers measured
+In RMB millions
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+Discussion and Analysis
+Stage 1
+65
+1.43
+240,187
+100.0
+16,761,319
+1.58
+293,978
+100.0
+18,624,308
+Annual Report 2020
+Stage 2
+Stage 3
+Total
+-----
+(1,495)
+(22,507)
+24,002
+to stage 1
+Transfer:
+1 January 2020
+232
+5
+227
+478,498
+184,688
+78,494
+215,316
+Balance at
+Total
+Stage 3
+Stage 2
+Stage 1
+Total
+1.01
+0.58
+9.2
+Western China
+1.46
+35,638
+14.7
+2,445,215
+1.38
+38,584
+15.0
+3,369,916
+2,789,085
+1.79
+49,037
+16.3
+2,739,585
+2.37
+71,763
+16.3
+3,030,552
+Central China
+18.1
+47,788
+1.42
+1,546,077
+0.60
+8,985
+8.0
+1,492,087
+Overseas and others
+4.50
+35,944
+4.8
+798,691
+3.38
+28,411
+4.5
+841,595
+Northeastern China
+1.34
+40,164
+17.8
+2,991,010
+9,026
+Discussion and Analysis
+Credit Risk Management of Credit Card Business
+Management of Interest Rate Risk in the Banking Book
+LEVERAGE RATIO
+In RMB millions, except for percentages
+At
+At
+At
+At
+At
+31 December
+30 September
+Item
+2020
+2020
+30 June
+2020
+Net tier 1 capital
+Please refer to the 2020 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+Balance of adjusted on- and
+2,786,578
+35,490,453
+2,711,433
+35,239,614
+31 March
+2020
+2,744,542
+34,044,105
+31 December
+2019
+2,657,523
+31,982,214
+off-balance sheet assets
+Leverage ratio (%)
+8.14
+7.85
+7.69
+8.06
+8.31
+2,872,792
+35,300,338
+Note: (1) Refers to risk-weighted assets after capital floor and adjustments.
+Capital adequacy ratio (%)
+Tier 1 capital adequacy ratio (%)
+Valid portion of minority interests
+647
+793
+Net tier 1 capital
+2,872,792
+2,657,523
+Tier 2 capital
+523,394
+463,956
+Valid portion of tier 2 capital instruments and related premium
+351,568
+272,680
+Surplus provision for loan impairment
+170,712
+189,569
+Valid portion of minority interests
+1,114
+16.77
+16.88
+14.27
+14.28
+13.20
+13.18
+Note: Please refer to "Unaudited Supplementary Financial Information" for details on disclosed leverage ratio information.
+Core tier 1 capital adequacy ratio (%)
+20,124,139
+Risk-weighted assets (1)
+3,121,479
+3,396,186
+Net capital base
+1,707
+18,616,886
+199,456
+78
+In RMB millions
+Discussion and Analysis
+71
+Annual Report 2020
+2,884,728
+1,910,179
+Over 5 years
+In RMB millions
+(1,560,515)
+220,030
+Note: Please refer to "Note 51.(d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+1,448,630
+1 to 5 years
+1 year
+7,486,102
+(6,378,856)
+(1,593,786)
+3 months
+3 months to
+Liquidity Risk
+Less than
+At 31 December 2020
+INTEREST RATE RISK EXPOSURE
+As at the end of 2020, the Bank had a positive cumulative interest rate sensitivity exposure within one year of
+RMB1,107,246 million, representing an increase of RMB1,252,402 million from the end of the previous year, mainly caused
+by the increase in repriced or matured loans and advances to customers within one year and the decrease in customer
+deposits. It had a positive cumulative interest rate sensitivity exposure above one year of RMB1,324,213 million, representing
+a decrease of RMB805,996 million, mainly resulted from the increase in repriced or matured due to customers above one
+year.
+Interest Rate Exposure Analysis
+Note: Please refer to "Note 51.(d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+43,935
+29,219
+1,769
+30
+(1,766)
+(40,883)
+(30)
+(29,219)
+68
+1,734
+(68)
+At 31 December 2019
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis at a reasonable cost to settle liabilities as
+they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of
+loans by customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization,
+operating losses, derivatives trading risk and risk associated with its affiliates.
+Liquidity Risk Management
+In 2020, the Bank continued to uphold a steady and prudent liquidity risk management strategy, kept strengthening liquidity
+risk management, and took different measures to ensure that the Group's liquidity could be stable and safe. It tightened up
+the monitoring on funds, and maintained reasonable and affluent liquidity reserves, so as to manage liquidity risk properly
+during peak payments, important holidays and key points in time. Besides, the Group's liquidity risk management system
+was optimized constantly, the application of fund operation and monitoring system was strengthened, the automation
+level of liquidity risk measurement and control system was enhanced, and the multi-layer and multi-dimensional liquidity
+monitoring and warning system was upgraded, to further improve the Group's liquidity risk prevention capabilities.
+(715,546)
+(701,406)
+372,311
+(13,148,663)
+At 31 December 2019
+(209,780)
+335,580
+1 to 3 3 months to
+months
+1 month
+Less than
+on
+demand
+(14,309,956)
+At 31 December 2020
+Overdue/
+repayable
+LIQUIDITY EXPOSURE ANALYSIS
+As at the end of 2020, the negative liquidity exposure for 1 month to 3 months decreased from the end of last year, mainly
+due to the decrease of matured due to customers within corresponding term and increase of bond investments. The positive
+liquidity exposure for the 1 to 5 years category decreased, mainly due to the increase of matured due to customers and the
+decrease of loans and advances to customers within corresponding term. The positive liquidity exposure for the category
+of over 5 years expanded, which was mainly due to the increase in matured loans and advances to customers and bond
+investments within corresponding term. Deposits maintained steady growth with a high deposition rate, and at the same
+time the Bank made major investment in highly liquid bond assets, and possessed sufficient liquidity reserves. Therefore, the
+overall liquidity of the Bank maintained at a safe level.
+The daily average liquidity coverage ratio for the fourth quarter of 2020 was 123.28%, 1.88 percentage points lower than
+the previous quarter, mainly because the growth rate of net cash outflows exceeded the eligible high-quality liquid assets.
+High-quality liquid assets cover cash, available central bank reserve under stress and primary and secondary bond assets
+that can be included in the liquidity coverage ratio under the regulatory requirements. For the quantitative information for
+liquidity coverage ratio based on the Administrative Measures for the Information Disclosure of Liquidity Coverage Ratio of
+Commercial Banks, please refer to the section headed "Unaudited Supplementary Financial Information".
+Net stable funding ratio aims to ensure commercial banks have sufficient stable sources of funding to meet the needs
+for stable funding of assets and off-balance sheet risk exposures. The net stable funding ratio is the ratio of the available
+stable funding to the required stable funding. As at the end of the fourth quarter of 2020, the net stable funding ratio was
+128.33%, 1.32 percentage points higher than that at the end of the previous quarter, mainly because the Bank constantly
+strengthened the Group's liquidity coordination and management to ensure the sufficient sources of stable funds. For the
+quantitative information for net stable funding ratio in accordance with Disclosure Rules on Net Stable Funding Ratio of
+Commercial Banks, please refer to the section headed "Unaudited Supplementary Financial Information".
+Liquidity Risk Management System and Governance Structure
+The Bank's liquidity risk management system conforms to the overall development strategy and the overall risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control for liquidity risk and a complete management information system.
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department of the Head Office; and the execution system comprising the
+Asset and Liability Management Department, leading management departments of on- and off-balance sheet businesses,
+the information technology departments, operation management departments of the Head Office and relevant departments
+of branches. Each of these systems performs the corresponding functions of decision making, supervision and execution
+according to division of responsibilities.
+Objective, Strategy and Important Policy of Liquidity Risk Management
+Objective of liquidity risk management: By establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity risk
+at the Group level, the Bank, the affiliates, the branches and the business lines, and ensuring the liquidity demand is satisfied
+at a reasonable cost in time under the normal business scenario and the stress scenario.
+The Bank's liquidity risk management strategy and policy are formulated in accordance with the liquidity risk appetite,
+and they cover all businesses on- and off-balance sheet, all domestic and overseas business departments, branches and
+affiliates that are likely to have a material impact on the liquidity risk, and contain the liquidity risk management under
+normal and stressed scenarios. The liquidity risk management strategy specifies the overall objective and mode of liquidity
+risk management and lists major policies and procedures for liquidity risk management. The policies for liquidity risk
+management are formulated in accordance with external and macro operating environments and business development of
+the Bank, with a view to striking an effective balance among security, liquidity and profitability.
+ICBC
+72
+Discussion and Analysis
+Stress Testing
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress testing
+on liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress testing on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress testing at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+Liquidity Risk Analysis
+The Bank assesses liquidity risk status by comprehensive use of a variety of methods and tools such as liquidity indicator
+analysis and liquidity exposure analysis.
+In 2020, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were 43.2% and 91.4% respectively, both
+meeting the regulatory requirements. Loan-to-deposit ratio was 72.8%. Please refer to the section headed "Discussion and
+Analysis - Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+ICBC
+(1,734)
+219,143
+200,249
+CAPITAL MANAGEMENT
+Discussion and Analysis
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly strengthening and enhancing the capital base and supporting business growth and
+implementation of strategic planning; establishing a value management system focusing on economic capital, reinforcing
+capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding capital
+replenishment channels, raising capital quality and optimizing capital structure. The Bank's capital management covers
+various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management, capital investment and financing management.
+In 2020, the Bank further deepened the capital management reform, strengthened capital saving and optimization, carried
+forward the disposal of low-efficiency capital occupation, intensified the constraint of economic capital management
+on risk-weighted assets and continued to elevate the capital use efficiency. It holistically balanced the endogenous and
+exogenous capital replenishment, and further consolidated the capital base to further reinforce its capacity in supporting
+the real economy. In 2020, all capital indicators performed well, of which capital adequacy ratio was kept at a sound and
+appropriate level.
+Capital Adequacy Ratio and Leverage Ratio
+The Bank calculated its capital adequacy ratios at all levels in accordance with the Capital Regulation. According to the
+scope of implementing the advanced capital management approaches as approved by the regulatory authorities, the
+foundation internal ratings-based (IRB) approach was adopted for corporate credit risk, the IRB approach for retail credit risk,
+the internal model approach (IMA) for market risk, and the standardized approach for operational risk meeting regulatory
+requirements. The weighted approach was adopted for credit risk uncovered by the IRB approach and the standardized
+approach for market risk uncovered by the IMA.
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+In RMB millions, except for percentages
+At 31 December 2019
+At 31 December 2020
+Item
+Group
+Parent
+Company
+Group
+Parent
+Company
+ICBC
+Net core tier 1 capital
+2,404,030
+2,457,274
+2,222,316
+Net tier 1 capital
+2,872,792
+2,605,594
+2,657,523
+2,403,000
+Net capital base
+3,396,186
+3,114,878
+3,121,479
+2,852,663
+Core tier 1 capital adequacy ratio (%)
+2,653,002
+76
+In 2020, facing the increasingly complicated international political and economic environment under the COVID-19
+pandemic, the Bank strictly abode by regulatory requirements and, with consideration of its business development needs,
+continued to strengthen country risk management. The Bank closely observed changes in country risk exposures, constantly
+tracked, monitored and reported country risk, and timely updated and adjusted the country risk rating and limits. It
+continued to strengthen early warning mechanism for country risk, proactively conducted stress testing on country risk and
+reasonably and effectively controlled country risk while steadily promoting internationalization.
+The Bank strictly observes regulatory requirements on country risk management. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of country risk management. The Senior Management is responsible for executing the
+country risk management policies approved by the Board of Directors. The Risk Management Committee of the Head Office
+is responsible for reviewing matters regarding country risk management. The Bank manages and controls country risk with
+a series of tools, including country risk assessment and rating, country risk limit, country risk exposure calculation and
+monitoring and stress testing. The Bank reviews the country risk rating and limits at least once every year.
+1 to 5
+Over 5
+1 year
+years
+years
+(563,541) 981,145 13,324,640
+3,498,846
+Undated
+Total
+3,351,427 2,909,515
+10,069,296 3,317,165 2,692,003
+Note: Please refer to "Note 51.(b) to the Financial Statements: Liquidity Risk".
+Annual Report 2020
+73
+Discussion and Analysis
+Operational Risk
+Operational Risk Management
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution, delivery and process management constitute major sources of
+operational risk losses of the Bank.
+The Bank strictly complies with regulatory requirements on operational risk management. The Board of Directors, the Board
+of Supervisors, the Senior Management and its Operational Risk Management Committee are respectively responsible for
+decision-making, supervision and execution with respect to operational risk management, and relevant departments act as
+the "three lines of defense" for operational risk management pursuant to their management functions, thus forming an
+operational risk management system with close connection and mutual checks and balances. Institutions and departments
+function as the first line of defense, which assume the direct responsibility for respective operational risk management.
+Classified management departments such as Internal Control & Compliance, Legal Affairs, Security, Financial Technology,
+Finance & Accounting, Operation Management and Human Resources as well as cross-risk management departments
+including Credit and Investment Management and Risk Management jointly perform the functions as the second line of
+defense, which are respectively responsible for the lead management of operational risk, the classified management of
+certain type of operational risk and the management of operational risk across credit and market risks. The Internal Audit
+Department performs the functions as the third line of defense and assumes the responsibility for supervision, which is
+responsible for supervising the effectiveness of operational risk management.
+In 2020, the Bank continued to reinforce operational risk management in line with regulatory focuses and operational
+risk trends. It optimized the risk limit decomposition and implementation mechanism, effectively transmitted the Group's
+operational risk management appetite, and strengthened risk warning and forward-looking control of large-value
+operational risk events. The operational risk and control self-assessment under "regulatory red line" was carried out, with
+the focus on key risk points in major areas of regulatory penalties, to further address gaps and energetically improve a
+long-term risk control mechanism. Moreover, the operational risk application and management system was optimized,
+to continuously enhance effective risk data aggregation and risk reporting capabilities. During the reporting period, the
+operational risk management system of the Bank operated smoothly, and the operational risk was controllable on the whole.
+Legal Risk
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arises out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions or requirements of other relevant rules during the Bank's operation; the unfavorable
+legal defects that exist in products, services or information provided to clients, transactions engaged in, and contracts,
+agreements or other documents executed by the Bank; legal disputes (litigation or arbitration proceedings) between the Bank
+and its clients, counterparties and stakeholders; important changes in relevant laws and regulations, administrative rules,
+regulatory provisions and other relevant rules; and other relevant legal events that occur internally and externally.
+Based on the objective to ensure legal and compliant operation, the Bank always attaches great importance to establishing
+a sound legal risk management system, forming a full-process legal risk prevention and control mechanism to support
+and secure business innovation and market competition, and to prevent and eliminate various potential or practical legal
+risks. The Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk
+management, and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for
+executing the strategy and policy relating to legal risk management, examining and approving relevant important affairs. The
+Legal Affairs Department of the Head Office is in charge of legal risk management across the Group, with relevant business
+departments providing related support and assistance on legal risk prevention and control. The affiliates, domestic and
+overseas branches undertake the responsibility of legal risk management of their respective institutions.
+74
+ICBC
+Discussion and Analysis
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+Country Risk
+In 2020, the Bank kept improving the structure of reputational risk management system, to optimize relevant working
+mechanism and enhance reputational risk management. For the improvement of institutional construction, a sound
+responsibility review and identification mechanism for reputational risk events was established, to consolidate the main
+management responsibilities, strengthen the governance of reputational risk sources, and mitigate hidden reputational
+risk in an active and effective manner. In addition, the Bank promptly responded to social focuses and public concerns,
+and organized and promoted influential brand communication activities, to enhance the Bank's brand image. During the
+reporting period, the reputational risk of the Bank was stable and within a controllable range.
+The Board of Directors is responsible for reviewing and finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and effectiveness of reputational risk management across the Bank and
+assuming the ultimate responsibility for reputational risk management. The Senior Management is responsible for leading
+reputational risk management of the Bank, implementing the strategies and policies established by the Board of Directors,
+reviewing and finalizing the rules, measures and operating procedures for reputational risk management, preparing plans for
+responding to and coping with extraordinarily major reputational risk events and ensuring the proper and effective operation
+of the reputational risk management system. The Bank has established a special reputational risk management team to take
+charge of the daily management of reputational risk.
+Discussion and Analysis
+75
+13.18
+Annual Report 2020
+Reputational Risk
+Please refer to the section headed "Operational Risk" of the 2020 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for further information on operational risk capital measurement.
+The Bank pushed forward the all-around building of the Group's AML management capability by starting the "AML
+Management Capability Improvement Project". AML training and education activities covering "learning, training, speaking
+and testing" were organized and conducted, to popularize AML knowledge and improve AML skills. The governance of
+customer identification and the management and control of high-risk areas were effectively boosted, for the purpose
+of comprehensively reconstructing a money laundering risk assessment system integrating "customers, products and
+institutions". Besides, the prevention and control of sensitive information risks was intensified, and the research, judgment
+and reporting of suspicious transactions was reinforced, to facilitate the intelligent construction of AML system in an orderly
+manner, and build an intelligent, open, shared and integrated AML ecosystem.
+In strict compliance with anti-money laundering ("AML") laws and regulations of China and host countries (regions) of
+overseas institutions, the Bank earnestly implemented the "risk-based" regulatory requirements in respect of AML, and
+sincerely fulfilled the legal obligations and social responsibilities concerning AML, thus further enhancing the quality and
+efficiency of AML work.
+Anti-Money Laundering
+In 2020, the Bank continued to strengthen legal risk management, by improving the risk prevention and control capacity
+in legal risk management, ensuring the legal and compliant operation, healthy business development and overall business
+stability of the Group. In accordance with new laws and regulations such as the Civil Code, its business rules and relevant
+agreements were continuously improved, and legal risk prevention and control in key areas and links was further pushed
+forward in line with new requirements of financial regulators. The Bank also improved both the vertical interconnection
+and horizontal coordination mechanism between the Head Office and branches. By systematically embedding legal risk
+prevention and control into business negotiations, product design, contract signing and other links, the Bank made
+risk prevention and control more prospective, proactive and targeted. It improved the cross-border coordination and
+management for legal work and strengthened the legal risk management of overseas institutions, properly responding to
+cross-border legal issues emerging in the development of international operations. Moreover, the Bank ameliorated the
+function design and management mechanic for the electronic signing system, to strengthen its strict control of seal use in
+business contracts during the whole process, and effectively prevent and control operational risk, legal risk and reputational
+risk caused by misuse of contract seal. It reinforced authorization management, related party management, trademark
+management and intellectual property protection, and made efforts to effectively institutionalize risk management and
+control, and refine the structure of the system. A variety of legal means were utilized comprehensively to improve the
+effectiveness of collection, practically cement the risk prevention and control of sued cases, avoid and reduce risk losses.
+In addition to the active assist in online judicial inquiry and enforcement, the Bank played a positive role in improving the
+efficiency of law enforcement and case handling by competent authorities and building a social credibility system.
+Reputational risk is defined as the risk of negative comments on the Bank from stakeholders, the public or the media as a
+result of the behaviors of the Bank or practitioners or external events, thereby damaging brand value, detrimental to normal
+operation, and even affecting market and social stability. Reputational risk may arise in any part of the Bank's operation
+and management, and usually co-exists and correlates with credit risk, market risk, operational risk and liquidity risk. Good
+reputation is central to the operation and management of a commercial bank. The Bank highly values its reputation and has
+incorporated reputational risk management in the corporate governance and enterprise risk management system to prevent
+reputational risk.
+Additional tier 1 capital instruments and related premium
+13.14
+13.29
+149,067
+322,692
+In 2020, the Bank actively responded to the challenges brought about by the deepened interest rate liberalization and the
+impact of the COVID-19 pandemic. It continued to optimize the interest rate risk portfolio control mechanism, improved
+the "group-wide, full-process and full-product" interest rate risk limit management system, developed a systematic
+and intelligent risk warning, prevention and control mechanism, and refined the access assessment, accountability and
+emergency management process, to enhance risk management capabilities in a complex interest rate environment.
+Besides, a proactive and forward-looking interest rate risk management strategy was implemented, cross-cycle policies
+were appropriately designed, and a combination of asset-liability quantitative instruments, price instruments and derivative
+instruments was utilized, to prop up the steady growth of the Group's overall income and long-term value.
+292,149
+339,486
+304,876
+1,508,562
+1,367,180
+3,552
+4,178
+(10,178)
+(1,083)
+16,053
+15,500
+148,534
+8,107
+4,582
+2,933
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+(4,616)
+(4,451)
+Investments in core tier 1 capital instruments issued by financial
+7,980
+7,980
+institutions that are under control but not subject to consolidation
+Net core tier 1 capital
+2,653,002
+2,457,274
+Additional tier 1 capital
+219,790
+9,038
+356,407
+356,407
+2,472,774
+Tier 1 capital adequacy ratio (%)
+14.28
+14.24
+14.27
+14.37
+Capital adequacy ratio (%)
+16.88
+17.02
+16.77
+17.06
+As at the end of 2020, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 13.18%, 14.28% and 16.88%, respectively,
+complying with regulatory requirements.
+Annual Report 2020
+77
+Discussion and Analysis
+CAPITAL ADEQUACY RATIO
+In RMB millions, except for percentages
+At 31 December
+2020
+2,669,055
+2019
+Goodwill
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+13.20
+Retained profits
+Surplus reserve
+Valid portion of capital reserve
+Paid-in capital
+Core tier 1 capital
+Item
+At 31 December
+General reserve
+7,345
+Other intangible assets other than land use rights
+Item
+HKD
+USD
+Currency
+RMB
+Supposing that there is parallel shift of overall market interest rates, and taking no account of possible risk management
+actions taken by the management to mitigate the interest rate risk, the analysis on interest rate sensitivity of the Bank
+categorized by major currencies at the end of 2020 is shown in the following table:
+Interest Rate Sensitivity Analysis
+Analysis on Interest Rate Risk in the Banking Book
+Others
+Interest rate risk in the banking book is defined as the risk of loss in the economic value and overall profit of the banking
+book arising from adverse movements in interest rate and maturity structure, etc.
+Discussion and Analysis
+69
+Annual Report 2020
+Please refer to the section headed "Market Risk" of the 2020 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited issued by the Bank for further information on market risk capital measurement.
+Please refer to "Note 51. (c)(ii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+28,043
+Interest Rate Risk in the Banking Book
+Total
++100 basis points
+In RMB millions
+(7,340)
+(169)
+34,753
+27,286
+(31,709)
+(27,286)
+Effect on
+equity
+income
+equity
+income
+Effect on
+net interest
+Effect on
+net interest
+Effect on
+-100 basis points
+195,264
+169
+31,242
+Total foreign exchange exposure, net
+For VaR of the trading book, please refer to "Note 51. (c)(i) to the Financial Statements: VaR".
+The Bank kept strengthening trading book market risk management and product control, and adopted the value-at-
+risk (VAR), stress testing, sensitivity analysis, exposure analysis, profit/loss analysis, price monitoring and other means to
+measure and manage trading book products. It continued to improve the portfolio-based market risk limit management
+system, refined the limit indicator system, ameliorated the dynamic management mechanism, and realized quick and flexible
+limit monitoring and dynamic adjustments based on the GMRM system, to meet the requirements of new products and
+businesses for timeliness.
+Management of Market Risk in the Trading Book
+In 2020, the Bank continued to improve the Group's market risk management, and deepened the establishment of market
+risk management system at the Group's level, to enrich and ameliorate the market risk management policy system on an
+ongoing basis. It innovated the financial market business and product risk management system, and established a product
+life-cycle risk assessment and review mechanism. To cement the market risk management of overseas institutions, a major
+market risk emergency management plan for overseas institutions was formulated. The Group's market risk appetite and
+limit transmission mechanism was improved, to strictly control the Group's market risk limits. A forward-looking analysis of
+interest rate, exchange rate and commodity risks was conducted in a timely manner, with the establishment of a quick risk
+reporting mechanism during the COVID-19 pandemic. Empowered by technologies, the market risk management system
+was more intelligent, thus enhancing the optimization, management and application of functions such as stress testing and
+continuously promoting the extended application of global market risk management system to overseas institutions.
+Discussion and Analysis
+Management System and Governance Structure for Interest Rate Risk in the Banking Book
+Currency Risk Management
+The Bank's management system for interest rate risk in the banking book conforms to the system importance, risk status
+and business complexity, and fits the Bank's overall development strategy and the enterprise risk management system. The
+system mainly consists of the following elements: an effective risk governance structure; sound risk management strategies,
+policies and procedures; effective risk identification, measurement, monitoring, control and mitigation that cover all areas; a
+complete internal control and review mechanism; a fully-built risk management system; and adequate information disclosure
+and reporting.
+Objective, Strategy and Important Policy of Management of Interest Rate Risk in the Banking Book
+The objective of management of interest rate risk in the banking book: The Bank aims at maximizing the risk-adjusted net
+interest income within the tolerable level of interest rate risk under its risk management and risk appetite.
+The Bank formulated strategies and clarified objectives and modes for managing interest rate risk in the banking book based
+on risk appetite, risk status, macroeconomic and market changes. Based on the pre-judging of the interest rate trend and
+measurement results of the changes in overall profit and economic value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated approach to using interest rate risk control tools to mitigate and manage
+risks, so as to ensure the Bank's actual interest rate risks conform to its bearing capability and willingness.
+On the basis of management strategies and objectives, the Bank developed policies and made clear the modes and
+instruments for managing interest rate risk in the banking book. By developing and modifying such methods as on-balance
+sheet adjustment and off-balance sheet hedging to manage interest rate risk, adeptly using quantity, pricing and derivative
+instruments regarding assets and liabilities, and applying limit management system, business plan, performance assessment
+and capital evaluation in all areas for interest rate risk management and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the affiliates and the products and portfolios easily affected by interest
+rate risk.
+In line with the principles of comprehensiveness, prudence and foresight, the Bank's stress testing on interest rate risk in
+the banking book adopted the interest rate risk exposure measurement approach and standardized duration approach
+to measure the effect of interest rate changes under different stress scenarios on the overall profit and economic value.
+Based on the domestic and overseas regulatory requirements, the bank-wide asset and liability business structure, operation
+and management as well as risk appetite, the Bank set stress testing scenarios for interest rate risk in the banking book
+by taking into account the current interest rate level, historical changes and trends, total assets and liabilities and their
+term characteristics, business development strategies, customer behaviors and other factors, and conducted stress testing
+quarterly.
+Stress Testing
+Discussion and Analysis
+The Bank strictly complied with regulatory requirements for interest rate risk in the banking book, effectively managed
+interest rate risk in the banking book at the Bank and consolidated level, and developed a sound governance structure
+for interest rate risk management in the banking book that is fully built and well-structured, with clearly defined rights
+and responsibilities. The Board of Directors and the Senior Management are vested with the ultimate and executive
+responsibilities, respectively, for managing interest rate risk in the banking book. The Asset & Liability Management
+Department of the Head Office takes the leading role in managing interest rate risk in the banking book, and other
+departments and institutions play their roles in implementing policies and standards concerning interest rate risk in the
+banking book. The Internal Audit Bureau and the Internal Control & Compliance Department of the Head Office are
+responsible for reviewing and evaluating duties in respective of interest rate risk in the banking book.
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities. The Bank's objective of currency
+risk management is to control the impact of exchange rate fluctuations on the Bank's financial position and shareholders'
+equity within a tolerable extent. The Bank mitigates such risk principally by limit management and hedging of risks. The Bank
+carries out sensitivity analysis and stress testing of currency risk on a quarterly basis, and the Senior Management and the
+Market Risk Management Committee review the currency risk reports on a quarterly basis.
+In 2020, the Bank closely watched the changes in external environment and market conditions, actively took a combination
+of measures such as limit management and hedging of risks to improve the matching degree of the Group's foreign
+exchange assets and liabilities, and strengthened capital fund preservation management of overseas institutions. The
+currency risk was controllable in general.
+FOREIGN EXCHANGE EXPOSURE
+exchange items, net
+(25,410)
+(176,923)
+(30,351)
+(198,474)
+Exposure of off-balance sheet foreign
+equivalent
+53,453
+RMB
+372,187
+USD
+USD
+equivalent
+61,593
+RMB
+402,774
+Exposure of on-balance sheet foreign
+exchange items, net
+At 31 December 2019
+At 31 December 2020
+In RMB (USD) millions
+204,300
+ICBC
+70
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and Those under IFRSS
+On the basis of capital replenishment by retained profits, the Bank proactively expanded the channels for external capital
+replenishment and continuously promoted the innovation of capital instruments, to reinforce the capital strength, optimize
+capital structure and control the cost of capital rationally.
+REQUIREMENTS
+Major Regulatory Indicators
+Regulatory
+Item
+Liquidity ratio (%)
+criteria
+2020
+2019
+2018
+RMB
+>=25.0
+43.2
+43.0
+43.8
+Foreign currency
+>=25.0
+OTHER INFORMATION DISCLOSED PURSUANT TO REGULATORY
+91.4
+Discussion and Analysis
+80
+Issuance of Offshore Preference Shares
+The Bank made a non-public issuance of 145 million USD-denominated non-cumulative perpetual offshore preference shares
+in September 2020, raising a total amount of USD2.9 billion. Subject to applicable laws and the approval of regulatory
+authorities, all proceeds from the issuance, after deduction of commissions and issuance expenses, will be used to replenish
+additional tier 1 capital of the Bank. For details, please refer to the section headed "Details of Changes in Share Capital and
+Shareholding of Substantial Shareholders - Preference Shares".
+Issuance Progress of Undated Additional Tier 1 Capital Bonds
+The Bank received a reply from CBIRC in September 2020, pursuant to which, approval was granted to the Bank to issue
+undated additional tier 1 capital bonds in foreign currency of an amount no more than RMB40.0 billion equivalent in the
+offshore market, which will be counted as the additional tier 1 capital of the Bank in accordance with relevant regulatory
+requirements.
+The Proposal on the Issuance of Undated Additional Tier 1 Capital Bonds was reviewed and approved at the Second
+Extraordinary General Meeting of 2020 of the Bank, pursuant to which, the Bank planned to issue undated additional tier
+1 capital bonds with the total amount up to RMB100.0 billion in the domestic market, which will be used to replenish the
+Bank's additional tier 1 capital. The issuance plan of undated additional tier 1 capital bonds is still subject to the approval of
+relevant regulatory authorities.
+Issuance of Tier 2 Capital Bonds
+The Bank publicly issued two tranches of tier 2 capital bonds, worth RMB60.0 billion and RMB40.0 billion, in September
+and November 2020 successively in China's national inter-bank bond market, raising a total amount of RMB100.0 billion.
+The Bank issued a tier 2 capital bond of RMB30.0 billion in China's national inter-bank bond market in January 2021. All
+proceeds will be used to replenish the Bank's tier 2 capital in accordance with the applicable laws as approved by relevant
+regulatory authorities.
+For details on the issuance of capital instruments of the Bank, please refer to the announcements published by the Bank on
+the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Allocation and Management of Economic Capital
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc.
+The Bank further improved the Group's economic capital management system in terms of measurement, allocation and
+assessment, strengthened the Group's economic capital constraint and incentive mechanism, and promoted the Group's
+intensive capital development. It further improved its economic capital measurement policy and optimized its economic
+capital measurement standards and system. The Bank strictly implemented the quota management of economic capital,
+continuously boosted the refined management of economic capital, and reinforced the capital constraint on domestic
+branches, profitability units, overseas institutions and subsidiaries. Moreover, the Bank upgraded the economic capital
+measurement and appraisal policy of credit business and proactively facilitated the adjustment of its credit structure. It
+strengthened trainings on economic capital management for institutions at all levels, and vigorously pushed forward the
+application of economic capital in operational management and business front-line.
+Annual Report 2020
+79
+Discussion and Analysis
+OUTLOOK
+The world today, marked by changes unseen in a century, is under accelerated evolution. The COVID-19 pandemic has a
+far-reaching impact, and the international situation remains complex and grim. Peace and development remain the theme
+of the times. A new round of scientific and technological revolution and industrial reform have been deepened, with the
+concept of a community with a shared future for mankind winning support among the people. China has achieved major
+strategic results in the pandemic containment. China's economy has been in an improving trend in a long term, witnessing
+vast market space, strong development resilience and a stable society overall. The great rejuvenation of the Chinese
+nation displays a brighter future, embarking on a new journey to build a modern socialist country on all fronts. The digital
+finance faces broad development potential, the trend of online and offline integration is accelerating, and the consumer
+finance business is expected to achieve leap-forward development. These will provide favorable conditions for the banking
+industry to accelerate the formation of a new operation and development pattern that is compatible with serving the new
+development paradigm and promoting high-quality development.
+The year 2021 marks the CPC's centenary, the start of the 14th Five-Year Plan period, and also the beginning of the new
+three-year plan of ICBC. The Bank will continue to follow the guidance of the Xi Jinping Thought on Socialism with Chinese
+Characteristics for a New Era, focus on the new development stage, act on the new development philosophy, and establish
+the new development pattern to drive high-quality development for ensuring a good start for the new three-year plan.
+First, it will adhere to Party building and strict governance to shoulder the political responsibility for serving
+the new development pattern and driving high-quality development. The Bank will heighten its political stance,
+better integrate enhanced leadership by the Party and improved corporate governance, and concretely translate institutional
+advantages into the Group's governance efficacy. Second, it will remain committed to putting customers in the first
+place and serving the real economy to seize the focus of serving the new development pattern and driving
+high-quality development. It's important to actively conduct monetary policies, reasonably arrange for quality, pace, size
+and price of investment & financing, and promote to stabilize the size of funds, improve the service quality, optimize the
+financing structure and ensure accurate and direct funding in serving the real economy. Third, it will stay technology-
+driven for value creation to offer stronger impetus for serving the new development pattern and driving high-
+quality development. The Bank will accelerate its digital transformation, implement the technological innovation plan
+and the e-ICBC strategic upgrading program up to high standard, and strive to grow into a great bank in technology and a
+digital ICBC in the race to grasp the commanding heights amid the new-round competition. Fourth, it will proceed with
+global operation with a global vision to expand the sectors of serving the new development pattern and driving
+high-quality development. Focused on domestic and foreign markets that reinforce each other, the Bank will optimize
+its internationalized development strategies and improve services in an all-round way to constantly meet globalized and
+integrated demands of customers. Fifth, it will forge ahead with pragmatic transformation and reform to better
+energize the work in serving the new development pattern and driving high-quality development. Bringing out
+its strengths to make up for weaknesses while consolidating the foundation, the Bank integrates top-level design into
+operational practice, deepens the implementation of major strategies, promotes the business transformation and refines
+the financial service innovation system as ways of exploring effective paths for driving high-quality development. Sixth,
+it will keep consolidating the foundation through risk control and pursuing success through talents for better
+security for serving the new development pattern and driving high-quality development. It's imperative to uphold
+systemic views, promote comprehensive risk management, develop bottom-line thinking, coordinate development and
+safety and facilitate high-quality development with high-quality risk control. The Bank will also reinforce the building of
+official and talent teams, stimulate the vitality of staff with an enterprising spirit and strive to begin a new chapter in serving
+the new development pattern and driving high-quality development and celebrate the CPC's centenary with outstanding
+accomplishments.
+ICBC
+85.9
+83.0
+Loan-to-deposit ratio (%)
+1.7
+36.4
+26.1
+25.3
+60.9
+36.0
+38.8
+19.2
+15.6
+Discussion and Analysis
+Global Systemically Importance Assessment Indicators of Commercial Banks
+Discussion and Analysis
+81
+25.2
+The Bank did not issue any corporate bonds that need to be disclosed as per the "No. 2 Standards on the Content and
+Format of Information Disclosure of Companies with Public Offerings Content and Format of the Annual Report"
+(Revision 2017) or "No. 38 Standards on the Content and Format of Information Disclosure of Companies with Public
+Offerings Content and Format of the Annual Report of Corporate Bonds".
+Corporate Bonds
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2020 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+1.5
+1.7
+12.9
+12.6
+RMB and foreign
+72.8
+71.6
+71.0
+In accordance with the Guidelines on the Disclosure of Global Systemically Importance Assessment Indicators for Commercial
+Banks issued by CBIRC and the Instructions for G-SIB Assessment Exercise issued by the Basel Committee on Banking
+Supervision, the Bank calculated the global systemically importance assessment indicators.
+currency
+Percentage of loans to single largest
+<=10.0
+Note: The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and accounting
+standards applicable to the current period. The comparative figures are not adjusted or restated.
+3.5
+3.8
+customer (%)
+Percentage of loans to top 10
+customers (%)
+Loan migration ratio (%)
+Pass
+Special mention
+Substandard
+Doubtful
+14.8
+3.1
+Annual Report 2020
+In RMB millions
+Rural education loan
+Improving comprehensive financial services. The Bank improved the financial services for poverty-stricken areas and
+poor households in various fields in a multi-pronged approach. It actively improved the geographical distribution and
+optimum adjustment of offline channels, and implemented the overall planning of new outlets in poverty-stricken areas.
+It continued to adopt fee reduction of personal settlements, and set up tailor-made wealth management products and
+certificates of deposit in poverty-stricken areas. It generally upgraded "e-Business Dream Plan" to increase financial service
+support for poverty-stricken areas through online products. It carried out solid special study on the overall planning for the
+development of the whole county-based market, including poverty-stricken areas.
+Increasing loan granting for poverty alleviation. By closely focusing on the financial needs of poor households in
+poverty-stricken areas, especially those in the extreme poor areas of the "Three Regions and Three Prefectures", the Bank
+increased credit resources to them and continued to increase loan granting for precision poverty alleviation. It promoted
+the service model of "precision poverty alleviation and agriculture-related supply chain" to steadily lift poor households out
+of poverty and increase their incomes through loan of industry precision poverty alleviation. FinTech was fully leveraged to
+bring the petty credit products for poverty alleviation online, a move enabling poor population to get financial services more
+efficiently.
+The Bank conducted solid work on all aspects of the poverty alleviation, and achieved the steady growth in precision poverty
+alleviation loans, sustained improvement in comprehensive financial services, remarkable achievements in new poverty
+alleviation model, steady income increase in counties and cities of targeted poverty alleviation, and gradual expansion of
+social influence in poverty alleviation. It continued to improve the assistance mechanism. Guided by the "1+3" working
+principle of "coordinating four counties with priority given to Jinyang", the Bank helped to lift four counties (cities) of
+Sichuan Province, that is, Tongjiang, Nanjiang, Wanyuan, and Jinyang out of poverty through targeted assistance with high
+quality. As a result, Nanjiang, Tongjiang, and Wanyuan shook off poverty in 2018 and 2019 successively, and the extreme
+poor county Jinyang did so in 2020.
+II. Summary of Precision Poverty Alleviation
+Improving the mechanism for poverty alleviation. In 2020, the Head Office's Leading Group for Poverty Alleviation
+through Finance held six themed meetings in many forms, to continually strengthen the leadership and coordination of
+poverty alleviation work. The Bank formulated five guiding documents on precision poverty alleviation including the ICBC
+Work Plan for Precision Poverty Alleviation through Finance (Version 2020), the ICBC Assessment Measures for Work Effects
+Achieved by Precision Poverty Alleviation through Finance (Version 2020), the Work Plan for Targeted Poverty Alleviation in
+2020, the Notice on Further Optimizing the Credit Policy Support for Poverty Alleviation through Finance, and the Notice
+on Strengthening the Loan Granting and Statistics for Precision Poverty Alleviation through Finance to provide a solid policy
+basis for poverty alleviation work.
+Strengthening the leadership and coordination. The Bank paid close attention to the poverty alleviation, and adhered
+to making heads of institutions at all levels assume the overall responsibility for poverty alleviation and pushing forward the
+overall coordinated efforts across the Bank with precise focus and strength. It attached importance to the pooled efforts
+across the Bank and explored effective new model of poverty alleviation to contribute ICBC's wisdom to winning the hard
+battle against poverty.
+I. Overall Precision Poverty Alleviation Planning
+The Bank took poverty alleviation as an important part of fulfilling its social responsibilities, earnestly implemented
+requirements of the CPC Central Committee and the State Council to win the hard battle against poverty. It continuously
+improved the poverty alleviation system and mechanism, enriched means of process management and explored new
+approaches for the poverty alleviation. In doing so, the Bank did its part to win the critical fight against poverty.
+ICBC IS IN ACTION TO SUPPORT POVERTY ALLEVIATION
+Annual Report 2020
+Discussion and Analysis
+84
+III. New mechanism for regional collaboration. The Bank strengthened coordination and interaction between the
+Head Office and branches, established a division of labor and liaison mechanism for bank leaders and senior management
+members in key regions, held joint meetings in due course, and coordinated cross-tier, cross-institution and cross-discipline
+important and difficult issues in regional development. The Bank worked together on the policy, resource, authorization
+and mechanism sides to provide a strong guarantee for the implementation of the strategy. All regions strengthened
+coordination and collaboration, reinforced organization and promotion, regional collaboration and business interaction
+based on their actual development conditions, and deepened strategy implementation, so as to promote the effective
+implementation of the strategy.
+II. New achievements in financial service innovation. First, the Bank held the activity of "Focusing on Demonstration
+Zone, Serving the International Import Expo, and Financially Supporting the Yangtze River Delta", and supported the
+integrated development of the Yangtze River Delta by building the "three centers" of financial innovation, cross-border
+business and financial market trading. Second, the Bank actively supported the construction of Xiongan New Area and
+Beijing Sub-center, signed strategic cooperation agreements with Hubei, Sichuan and other provinces, and comprehensively
+promoted the building of a modern industrial system and the work resumption of enterprises. Focusing on the innovation
+and upgrade of regional featured industries, traditional pillar industries and manufacturing industries, the Bank provided
+all-round investment and financing services. Third, the Bank introduced the reform measures of Shenzhen Branch as a
+pilot bank to actively promote the innovation of cross-border investment and financing, payment and settlement, cross-
+border asset transfer and other businesses, connect the domestic and overseas markets, and build the Guangdong-Hong
+Kong-Macau Greater Bay Area with integrated cross-border financial development. Fourth, the Bank released the Sichuan-
+Chongqing-themed debit card, providing cardholders with the rights and interests of payment and settlement services
+without any difference between Sichuan and Chongqing, and facilitating the construction of the double-city economic circle
+in Chengdu and Chongqing with convenient financial services.
+I. New achievements in serving regional development and value contribution. As at the end of 2020, the Bank
+recorded a loan balance of RMB11,725.2 billion in the Beijing-Tianjin-Hebei region, Yangtze River Delta, Guangdong-Hong
+Kong-Macau Greater Bay Area, Central China and Chengdu-Chongqing region, increased by RMB1,495.8 billion over the
+end of the previous year, and domestic branches in the five regions accounted for 68% of the total loan balance of domestic
+branches. The increment accounted for 78%; the five regions accounted for 76% of the total deposit balance (excluding
+inter-bank deposits) of domestic branches, and the increment accounted for 79%, indicating a continuous increase in the
+operating contribution.
+The Bank took the initiative to integrate into the regional development of the country, leveraged its comprehensive financial
+advantages, and adhered to the six focuses of loan, bond, stock, agency, lease and consultant to build a full-coverage
+investment and financing service system and continuously enhance its comprehensive finance service capacity. The Bank fully
+expanded the channel of financial resources flowing to the real economy, and actively contributed to the integration and
+high-quality development of the country's key regions.
+Hot Topic 2: Competitiveness Enhancement in Key Regions
+Discussion and Analysis
+83
+Annual Report 2020
+ICBC
+V. Providing effective support and risk control to fight against the COVID-19 by joint force. The Bank actively
+helped small and micro enterprises to cope with the impact of the epidemic, implemented the policy of delaying the
+repayment of principal and interest in accordance with the principle of "due extension" and overcame difficulties with these
+enterprises. At the meantime, pursuant to the principle of substantive risk judgment, the Bank strengthened post-lending
+risk monitoring, improved risk control measures, and made risk response ahead of the market curve. As at the end of 2020,
+the NPL ratio of the Bank's inclusive loans was significantly lower than the average level of the Bank's loans, and the risk was
+stable and controllable.
+85
+Rolling out innovative models for precision poverty alleviation. The Bank adhered to the "blood-making" poverty
+alleviation approach, empowering poor people with means to prosper. Giving full play to its superior FinTech, the Bank
+continued to optimize online service channels, and provided the impoverished areas with financial services online. A poverty
+alleviation column was added to the Bank's various platforms, including ICBC Mobile Banking, ICBC Mall, ICBC e Life, ICBC
+e Intelligence, and ICBC Business Matchmaker. The column was designed to promote products of poverty-stricken areas,
+by providing them with sales channels, releasing their investment invitation plans, and displaying their projects in reserve.
+Therefore, it provided poor areas with a superior platform to release information and acquire customer resources. At the
+same time, the Bank engaged in the poverty alleviation through finance with cross-border joint efforts. Overseas institutions
+were encouraged to fully mobilize their resources, and increase the finance-backed poverty alleviation endeavors through
+the group-wide actions. The Bank cemented its cooperation with foreign financial institutions in terms of poverty alleviation,
+and diversified the collaboration channels for poverty alleviation through finance. With the supply and demand information
+available at home and abroad matched up together, it innovatively set up a large-scale platform for joint poverty alleviation
+through finance.
+246,550.10
+Upgrading of rural power network
+160,128.00
+Including: Rural transport facilities
+6,118,646.02
+Loan of project precision poverty alleviation
+1,241,697.34
+Including: Loan of industry precision poverty alleviation
+20,065,731.90
+Discussion and Analysis
+In RMB10,000
+Balance of loans (2)
+I. Finance-backed precision poverty alleviation
+III. Precision Poverty Alleviation Achievements
+ICBC
+86
+Attaching equal importance to regular pandemic control and poverty alleviation. Paying close attention to the needs
+of poor areas arising from pandemic response, the Bank promptly donated masks, disinfectants and other urgently needed
+anti-pandemic supplies to them. It actively supported enterprises of the four counties (cities) with financial difficulties in
+applying for new loans and renewing their existing loans, so as to facilitate the resumption of work and production. At the
+areas receiving poverty alleviation assistance, the Bank opened up a green channel that turned registration of corporate
+users, account opening, and cash settlement management into an electronic process, thus capable of providing contactless
+financial services.
+Launching consumption-based poverty alleviation. The Bank took the "Chunnuan Action" and the "Jinqiu Action" to
+reduce poverty through consumption. It pooled together the bank-wide forces to help the poverty-stricken areas overcome
+the impact of the pandemic. It assisted them in selling agricultural products through multiple channels. Most of its support
+went to the four counties (cities) as its targeted poverty alleviation assistance recipients and the areas of Hubei severely hit by
+the pandemic, to help poor households increase their income stably.
+Continuing to develop education in poverty-stricken areas and help local people increase self-confidence.
+To give full play to the advantages as a major bank, ICBC selected elite executives to take part in poverty alleviation,
+introduced remuneration and benefit guarantee measures for them, and encouraged them to work with no worry and take
+responsibilities boldly. The Bank continued to recruit impoverished college graduates as employees. For the graduates who
+came from impoverished families, got registered as impoverished students in institutions of higher learning, or ever won the
+National Encouragement Scholarship, the minimum academic qualifications were relaxed to the bachelor's degree upgraded
+from the junior college diploma through full-time learning. The Bank supported Jinyang in building a comprehensive training
+center for employment and poverty alleviation, so as to improve the employability of local poor people from the source.
+A targeted recruitment fair was conducted through which vocational high school graduates from the counties receiving
+targeted poverty alleviation assistance could go to Beijing for internship and work, thus training talents for these counties as
+needed by the development of the tertiary industry.
+Focusing on extreme poverty. The Bank gave the top priority of targeted poverty alleviation to Jinyang, an extreme
+poor county, by setting out the assistance principle of "three priorities", and preferentially arranging new anti-poverty
+funds, projects, and measures for it. The Bank focused on bolstering the weak links concerning the "two assurances and
+three guarantees." In practice, it helped the county building schools, hospitals, safe drinking water facilities, training
+and commending teachers in mountain villages, and subsidizing students from impoverished families. Moreover, the
+establishment of Jinyang Sub-branch further boosted the financial service capabilities of the Bank at the local county.
+Consolidating the results of poverty alleviation. The Bank helped to ensure Tongjiang, Nanjiang and Wanyuan, three
+counties that had got out of poverty, never slipped back into poverty. The "precision poverty alleviation insurance" project
+was carried out on a pilot basis, which effectively reduced the possibility of people sinking into or returning to poverty.
+The Bank also shored up poverty alleviation efforts through industries, set up an "SME Industrial Development Fund" on a
+trial basis to preferentially support some distinctive industries related to gazelle, walnut and honeysuckle, and financed the
+counties in extreme poverty to develop large-scale agriculture.
+Discussion and Analysis
+III. Extending the service chain of inclusive finance by developing new scenarios. The Bank built a small and micro
+enterprise financial service platform integrating account opening, settlement and financing functions to provide convenient
+financial services. It launched activities such as "ICBC Inclusive Finance Travel", "One Hundred Branches Serving Ten
+Thousand Enterprises," "One Thousand Experts Serving Small and Micro Enterprises" and "Ten Thousand Small and Micro
+Enterprises Growth Plan" to provide customized exclusive services. It launched the "ICBC Business Matchmaker" cross-
+border matchmaking platform to provide access to the global industrial chain. Moreover, it expanded the scope of small
+and micro financial services, and offered value-added think tank services such as professional consultation and "ICBC e
+Intelligence", to continuously improve the activeness of inclusive finance customers and enhanced customer stickiness.
+IV. Enhancing the comprehensive contribution of inclusive finance business by collaboration with the Group.
+Relying on the Group's comprehensive financial service capability, the Bank tapped into customers' financial needs and
+extended its services to inclusive customers' upstream and downstream along the industry chain, business owners and
+employees, by providing them with services such as clearing and settlement, payroll service and private banking. The Bank
+built an internal circulation system for GBC funds, and build an inclusive ecosystem featuring long-term cooperation, mutual
+prosperity and accompanying growth.
+II. Improving the service quality and efficiency for small and micro enterprises by increasing supplies. As at
+the end of 2020, the Bank recorded an inclusive loan balance of RMB745.2 billion, an increase of RMB273.7 billion or
+58.0% over the year beginning, over-fulfilling the target of "an annual growth rate higher than 40%". The inclusive micro
+and small enterprises with loans reached 606 thousand, an increase of 183 thousand over the year beginning. The Bank
+reasonably set the term of loans according to the characteristics of loans used by enterprises, so as to help small and micro
+enterprises improve fund use efficiency and reduce on-lending costs. In 2020, the average interest rate of newly granted
+loans was 4.13%, indicating a decrease of 0.39 percentage points over the previous year.
+I. Building a new "Digital Inclusive" system empowered by technology. The Bank fully explored the value of internal
+and external data, optimized the online inclusive loan product system, and served the long-tail inclusive finance customer
+group. Through multi-dimensional cross-validation and other methods, the Bank built a digital and intelligent full-process risk
+control system, and gradually formed a set of stable, sustainable and strategic inclusive finance business model. In 2020, the
+proportion of online inclusive loans to the balance of new inclusive loans reached 98%.
+18,540,327
+Assets under custody
+427,718,826
+480,825,563
+Payments settled via payment systems or correspondent banks
+4,810,820
+4,742,888
+Securities and other financing instruments issued
+2,273,368
+16,541,581
+2,874,364
+2,008,660
+2,046,168
+Intra-financial system assets
+32,054,006
+35,316,391
+Balance of adjusted on- and off-balance sheet assets
+2019
+2020
+Indicator
+Intra-financial system liabilities
+Underwritten transactions in debt and equity markets
+1,980,245
+1,615,956
+The Bank has always regarded the development of inclusive finance as an important measure to serve the real economy and
+realize its transformation and development. During the reporting period, relying on the Group's FinTech advantages, the
+Bank substantially strengthened the supply of inclusive finance, accelerated product and service innovation, and stepped up
+scenario construction to promote the rapid and high-quality development of inclusive financial business.
+Hot Topic 1: Supporting High-quality Development of Inclusive Finance
+Discussion and Analysis
+HOT TOPICS IN THE CAPITAL MARKET
+ICBC
+82
+2,128,717
+2,211,697
+2,041,464
+1,965,383
+201,411
+203,050
+595,768
+597,258
+Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+Level 3 assets
+Trading and available-for-sale securities
+7,170,609
+8,581,322
+Notional amount of over-the-counter (OTC) derivatives
+Rural water conservancy facilities
+771,735.11
+Capital Financing Management
+ICBC Zhejiang Branch introducing quality enterprises
+中国工商银行浙江分行
+The Bank launched the "Eyes Care Action" and other
+assistance programs, and worked with financial peers
+to promote "banking + insurance + futures" financial
+services for poverty alleviation.
+By organizing online international promotion meetings,
+overseas institutions helped 116 enterprises in 26
+countries and regions and industrial projects in the
+paired-up areas with matchmaking.
+In 2020, four branches in Beijing, Shanghai, Zhejiang
+and Guangdong were assigned to assist the four
+counties and cities in pairs.
+ICBC took targeted and tailored measures
+examine eyesight of local children in September 2020
+ICBC "Eyes Care Action" in progress in Jinyang to
+88
+Care Action
+|德行一生
+Taking targeted poverty alleviation as its major task, the Bank enhanced coordinated guidance and improved the assistance
+mechanism featuring paired-up assistance by eligible branches, interconnection among the Head Office, branches and sub-
+branches and coordination between domestic and overseas institutions.
+“大爱扶贫·四川通江”签约仪式
+ICBC improved the assistance mechanism
+ICBC is in action to support poverty alleviation
+87
+88
+Annual Report 2020
+(2) The data is disclosed in accordance with the statistical standard as stipulated by CBIRC.
+Notes: (1) The "targeted poverty alleviation" refers to the poverty alleviation efforts in Tongjiang County, Nanjiang County, Jinyang County
+and Wanyuan City in Sichuan Province.
+262,026.00
+Including infrastructure
+construction, industrial
+development, education,
+healthcare, etc.
+3,596.60
+54,157.88
+250,240.99
+2020 was a year of decisive victory for the poverty alleviation. The Bank carried out
+the decisions and deployments of the CPC Central Committee and ensured concrete
+progress in targeted poverty alleviation. It made all-out efforts to support Nanjiang,
+Tongjiang and Wanyuan in Sichuan Province to consolidate their poverty alleviation
+results, and assisted Jinyang County to shake off poverty as planned.
+304,398.87
+800.00
+In 2020, the Bank input and introduced over RMB200
+million funds for poverty alleviation.
+IV. The Group poverty alleviation donations apart from targeted poverty alleviation
+1. Amount of donations
+to sign contract of cooperation with Tongjiang County
+in May 2020
+III. Consumption-based poverty alleviation
+4. Poverty alleviation through jobs
+2. Projects
+1. Poverty alleviation through industries
+2. Poverty alleviation through education
+3. Poverty alleviation through healthcare
+2. Purchase of agricultural products in poor areas
+II. Amount of targeted poverty alleviation input
+4,250.00
+2,720.00
+14,000.00
+ICBC
+In Jinyang, a country in deep poverty, the Bank input
+RMB100 million mainly into prominent problems
+relating to the "two assurances and three guarantees",
+set up Jinyang Sub-branch, and put more withdrawal
+centers for farmers in place to improve financial services
+in the county.
+In Nanjiang, Tongjiang and Wanyuan that were already
+lifted out of poverty, the Bank initiated assistance
+programs focused on industry, education and health,
+explored mechanisms against return to poverty, and set
+up "targeted anti-poverty insurance".
+4,620.00
+1. Assistance in selling agricultural products in poor areas
+Down 0.16 percentage
+points
+32,413.64
+1.42%
+Unit: RMB100 millions
+Cost-to-income ratio
+Non-performing
+loans ratio
+Capital adequacy ratio
+Net tier 1 capital
+18.02%
+ICBC
+ICBC (Brasil)
+Huijin
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Asia) Limited
+ICBC Austria Bank GmbH
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (New Zealand) Limited
+ICBC PERU BANK
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China (USA) NA
+ICBC Credit Suisse Asset Management ICBC Credit Suisse Asset Management Co., Ltd.
+ICBC International
+ICBC Investment
+ICBC Investments Argentina
+ICBC Leasing
+ICBC Standard Bank
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Hong Kong Exchanges and Clearing Limited
+China Securities Regulatory Commission
+ICBC (Almaty)
+ICBC (Argentina)
+ICBC (Asia)
+ICBC (Austria)
+ICBC (Canada)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (London)
+ICBC (Macau)
+ICBC (Malaysia)
+Hong Kong Listing Rules
+ICBC (Mexico)
+ICBC (Peru)
+ICBC (Thai)
+ICBC (Turkey)
+ICBC (USA)
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated in June
+2012
+China Banking and Insurance Regulatory Commission
+Company Law of the People's Republic of China
+ICBC (New Zealand)
+26.36%
+The Guiding Opinions on Regulating the Asset Management Business of Financial
+Institutions jointly promulgated by PBC, CBIRC, CSRC and State Administration of
+Foreign Exchange in 2018 and relevant rules
+ICBC Wealth Management
+Best Custodian Bank in China (Mega Bank)
+Best RMB Clearing Bank in Asia Pacific
+Best Asian International Cash
+Management Bank in Asia Pacific
+nt
+The Asset
+THE Asset
+Best Insurance Custodian Bank
+in China
+Best Bond Advisor, China
+Best Bank, China
+Finance Asia
+Best Bank in China
+Global Finance
+GLOBAL
+FINANCE
+亚洲银行家
+Best Corporate Bank in China
+Best Bank in Asia-Pacific
+World's Best Bank in
+Emerging Markets
+China Federation of Electronics and
+Information Industry
+中国电子信息行业联合会
+The highest Level 5
+certification
+CFEII
+Data Management Capability Maturity
+(DCMM)
+People's Bank of China
+FinTech Development
+Award ECOS Project
+Special Award of
+China Banking Association
+CHINA BANKING ASSOCIATION
+中国银行业协会
+Best Bank in China
+THE ASIAN BANKER®
+The Asian Banker
+Annual Report 2021
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong SAR, China
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and complaint hotline: 86-95588
+Telephone: 86-10-66106114
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Registered address and office address
+Chen Siqing
+Legal Representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+中國工商銀行股份有限公司(「中國工商銀行」)
+Legal name in Chinese
+Corporate Information
+ICBC
+6
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis - Risk Management" for detailed information.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+Mr. Chen Siqing, Legal Representative of the Bank, Mr. Liao Lin, President in charge of finance of the Bank, and Mr.
+Liu Yagan, General Manager of the Finance and Accounting Department of the Bank, hereby warrant that the financial
+statements contained in the Annual Report are authentic, accurate and complete.
+30 March 2022
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.933 (pre-tax) for each
+ten shares for 2021. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2021.
+The Bank did not convert capital reserve to share capital.
+The 2021 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by
+Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu in accordance with Chinese and
+International Standards on Auditing respectively, with standard unqualified auditors' reports being issued.
+The 2021 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 30 March 2022. There were 14 directors eligible for attending the meeting, of whom 13
+directors attended the meeting in person and 1 director by proxy, namely, Mr. Nout Wellink appointed Mr. Anthony Francis
+Neoh to attend the meeting and exercise the voting right on his behalf.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+5
+national commercial banks
+In the 2021 GYROSCOPE
+assessment system among
+Ranking the
+1st place
+China Council for Brand
+Development
+Accounting Standards for Business Enterprises promulgated by MOF
+The People's Bank of China
+24,145
+Ministry of Finance of the People's Republic of China
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting Standards
+Inversora Diagonal S.A.
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+ICBC Wealth Management Co., Ltd.
+ICBC Information and Technology Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Investments Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión
+ICBC Financial Leasing Co., Ltd.
+ICBC Financial Asset Investment Co., Ltd.
+ICBC International Holdings Limited
+The Bank/The Group
+State Council
+Standard Bank
+SSF
+SSE
+SEHK
+Hong Kong
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+New Rules on Asset Management
+MOF
+Inversora Diagonal
+IFRSS
+ICBCFS
+ICBC-AXA
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+ICBC Technology
+The Stock Exchange of Hong Kong Limited
+National Council for Social Security Fund
+"Corporate Brand Value List"
+for the sixth time
+In the
+Ranking the
+1st place
+Brand Finance
+Brand Finance®
+consecutive year
+Among the Top 500
+Banking Brands for the sixth
+Ranking the
+1st place
+Fortune
+Among commercial banks in
+the Global 500 for the ninth
+consecutive year
+Ranking the
+1st place
+Forbes
+Forbes
+•福布斯
+for the ninth
+consecutive year
+In the Global 2000
+Ranking the
+1st place
+The Banker
+The Banker
+consecutive year
+Banks for the ninth
+Among the Top 1000 World
+Ranking the
+1st place
+Major Ranking and Rewards in 2021
+ICBC
+4
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial Bank
+of China Limited and its subsidiaries
+The State Council of the People's Republic of China
+Standard Bank Group Limited
+Shanghai Stock Exchange
+15,767
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+Up 1,048 thousand
+Corporate Governance Report
+39
+Personal Banking
+102
+91
+85
+Up 23.41 million
+Directors, Supervisors and
+Shareholders
+and Shareholding of Substantial
+Hot Topics in the Capital Market
+Details of Changes in Share Capital
+34
+Corporate Banking
+34
+Business Overview
+21
+Financial Statements Analysis
+19
+Regulatory Environments
+Economic, Financial and
+19
+Discussion and Analysis
+84
+- Outlook
+79
+112
+· Capital Management
+Asset Management Services
+Report of the Board of Directors
+List of Domestic and
+52
+Employees and Institutions
+142
+Statements
+Human Resources Management,
+Auditor's Report and Financial
+51
+Service Improvement
+141
+Organizational Chart
+51
+- Outlet Development
+139
+Significant Events
+48
+- Internet Finance
+Environmental and Social Responsibilities 135
+44
+- FinTech
+133
+Report of the Board of Supervisors
+42
+Financial Market Business
+129
+41
+63
+Risk Management
+and Equity Participating Company 61
+ICBC proactively taps resources from both domestic and
+overseas markets, and undertakes to constantly promote
+international development, which well-integrates with
+China's high-level opening-up.
+ICBC empowers its business operations and management
+with FinTech, and creates superior value for the real
+economy, shareholders, customers, employees and the
+society as a whole.
+ICBC remains steadfast in serving the real economy and
+commits to satisfying people's new expectations and
+demands for financial services, making every effort to build
+the No. 1 Personal Finance Bank.
+ICBC upholds the Party's leadership over the financial work,
+and strives to improve the scientific decision-making as
+well as the effectiveness of corporate governance through
+enhanced governance system and capacity building.
+Adhere to laying a solid
+foundation for risk control
+and achieving development
+through talent cultivation:
+transformation and progressing
+through reform:
+pragmatic business
+Adhere to pushing for
+operations:
+Adhere to a broad international
+vision and globalized
+Adhere to technology-driven
+development and value
+creation:
+Adhere to putting the customer
+first and serving the real
+economy:
+Adhere to the guidance of
+the Party building theory and
+exercising rigorous corporate
+governance:
+Strategic Significance:
+Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ICBC will adhere to the general
+principle of pursuing progress while ensuring stability, apply the new development philosophy, modernize its governance
+system and capacity, and turn ICBC into a world-class and modern financial enterprise with global competitiveness.
+Strategic Objective:
+The Bank was ranked the 1st place among the Top
+1000 World Banks by The Banker, the 1st place in the
+Global 2000 by Forbes, and the 1st place in the list of
+commercial banks of the Global 500 in Fortune for the
+ninth consecutive year, and took the 1st place among
+the Top 500 Banking Brands of Brand Finance for the
+sixth consecutive year.
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its
+capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and
+following the business rules of commercial banks to
+strive to be a century-old bank. It also stays committed
+to seeking progress with innovation while maintaining
+stability, continuously enhances the key development
+strategies, actively develops the FinTech and accelerates
+the digital transformation. The Bank unswervingly
+delivers specialized services, and pioneers a specialized
+business model, thus making it "a craftsman in large
+banking".
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Through its continuous endeavor and stable
+development, the Bank has developed into the
+leading bank in the world, possessing an excellent
+customer base, a diversified business structure, strong
+innovation capabilities and market competitiveness.
+The Bank regards service as the very foundation to
+seek further development and adheres to creating
+value through services while providing a comprehensive
+range of financial products and services to over 9.691
+million corporate customers and 704 million personal
+customers. The Bank has been consciously integrating
+the social responsibilities with its development strategy
+and operation and management activities, and gaining
+wide recognition in the aspects of supporting pandemic
+containment, promoting inclusive finance, backing
+rural revitalization, developing green finance and
+participating in public welfare undertakings.
+Company Profile
+ICBC
+H
+2021 Annual Report
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+ICBC E
+Keeping pace with changing times, ICBC endeavors to
+advance reforms in key areas and critical steps, seeking
+room for development through transformation and vitality
+for growth through reform.
+ICBC safeguards the lifeline of asset quality by reinforcing
+bottom-line thinking with a combination of prevention and
+control measures. Meanwhile, corporate culture formation
+and caring for staff are strengthened to increase group
+cohesion.
+-
+Vision
+- Major Controlled Subsidiaries
+58
+Subsidiary Management
+Diversified Operation and
+4567825
+15
+President's Statement
+12
+Chairman's Statement
+Financial Highlights
+Corporate Information
+Important Notice
+― Internationalized Operation
+Major Ranking and Rewards in 2021
+CONTENTS
+Excellence
+Innovation
+Prudence
+Humanity
+Integrity
+Integrity Leads to Prosperity
+Values
+Excellent services for clients
+Maximum returns to shareholders
+Real success for employees
+Great contribution to society
+Excellence for You
+Mission
+To build a world-class, globally
+competitive modern financial
+institution in all aspects, and
+become a long-lasting and
+ever-prosperous bank
+Definitions
+54
+Senior Management
+307
+2020
+3,177
+2021
+3,502
+351,714
+Unit: RMB100 millions
+HKEX
+Total assets
+2019
+2020
+2021
+3,502
+Unit: RMB100 millions
+Net profit
+Financial Highlights
+7
+Annual Report 2021
+35/F, One Pacific Place, 88 Queensway, Hong Kong SAR, China
+Deloitte Touche Tohmatsu
+International Auditor
+Deloitte Touche Tohmatsu Certified Public Accountants LLP
+30/F, 222 East Yan'an Road, Huangpu District, Shanghai, China
+CPAs (Practicing): Wu Weijun and Zeng Hao
+Domestic Auditor
+Name and office address of Auditors
+Stock code: 4620
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC 20USDPREF
+3,134
+Offshore Preference Share
+2019
+Due to customers
+704 million
+9,691 thousand
+ATM
+Self-service banks
+Business outlets
+Corporate customers Personal customers
+229,777
+251,347
+264,418
+301,094
+333,451
+351,714
+2019
+167,613
+2020
+186,243
+2021
+206,672
+264,418
+Overseas Branches and Offices
+2020
+2021
+206,672
+Unit: RMB100 millions
+Unit: RMB100 millions
+Total loans and advances to customers
+Stock code: 360036
+2019
+Stock code: 360011
+Chinese mainland
+Legal Advisors
+The "HKEXnews" website of HKEX for disclosure of
+the annual report in respect of H shares
+www.hkexnews.hk
+www.sse.com.cn
+the annual report in respect of A shares
+Website of SSE for disclosure of
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+Selected newspaper for information disclosure
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Guan Xueqing
+Board Secretary and Company Secretary
+Liao Lin and Guan Xueqing
+CSRC
+CBIRC
+Capital Regulation
+Bank ICBC (JSC)
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+12%
+4.62%
+9.12%
+Stock name: 12
+King & Wood Mallesons
+Haiwen & Partners
+Company Law
+The Stock Exchange of Hong Kong Limited
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Shanghai Stock Exchange
+Domestic Preference Share
+Stock code: 1398
+Stock name: ICBC
+H Share
+Stock code: 601398
+Stock name:
+Shanghai Stock Exchange
+Stock name: I
+Board of Directors' Office of the Bank
+Location where copies of this annual report are kept
+Place where shares are listed, and their names and codes
+A Share
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong SAR, China
+Telephone: 852-28628555
+Hong Kong SAR, China
+Allen & Overy
+9/F, Three Exchange Square, Central, Hong Kong SAR, China
+Freshfields Bruckhaus Deringer
+Facsimile: 852-28650990
+Share Registrars
+55th Floor, One Island East, 18 Westlands Road, Quarry Bay,
+Hong Kong SAR, China
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+188 Yanggao South Road, Pudong New Area, Shanghai, China
+Telephone: 86-4008058058
+H Share
+Computershare Hong Kong Investor Services Limited
+A Share
+Nature of
+interests
+12,168,809,000
+Number of
+H shares held
+(share)
+Capacity
+Investment
+Ping An Asset
+shareholder
+Name of substantial
+(2) According to the information provided by SSF to the Bank, SSF held 7,946,049,758 H shares of the Bank as at the end of the
+reporting period, accounting for 9.16% of the Bank's H shares and 2.23% of the Bank's total ordinary shares.
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2021, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+(2) Due to rounding, percentages presented herein are for reference only.
+31.14
+35.00
+46.26
+41.16
+Long
+position
+124,731,774,651
+110,984,806,678
+manager
+Beneficial owner
+HOLDERS OF H SHARES
+Long
+position
+9.98
+Percentage of
+total ordinary
+shares (3) (%)
+corporations
+Total
+Notes: (1) As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on behalf
+of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as investment
+manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by Ping An Asset
+Management Co., Ltd. for the period ended 31 December 2021 (the date of relevant event being 12 June 2019). Both Ping
+An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping An Insurance
+(Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the voting rights in
+respect of such shares on behalf of customers and independently exercise the rights of investment and business management
+in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company of China, Ltd.,
+Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as a holding
+company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities and Futures
+Ordinance of Hong Kong.
+2.05
+8.43
+2.43
+Long
+position
+Long
+position
+7,317,475,731
+Interest of
+controlled
+corporations
+(Private) Limited
+Temasek Holdings
+8,663,703,234
+Beneficial owner
+SSF(2)
+Management
+Co., Ltd. (1)
+3.41
+Percentage of
+H shares (3) (%)
+14.02
+position
+Particulars of Other Substantial Shareholders
+0.38
+ICBC
+94
+None.
+Particulars of the De Facto Controller
+SSF. SSF owned 5.69% of the shares of the Bank as at 31 December 2021. Founded in August 2000, SSF is a public service
+institution administered by MOF, having its address at South Tower, Building 11, Fenghuiyuan Fenghui Times Building,
+Xicheng District, Beijing, China, and its legal representative being Liu Wei. With the approval of the State Council and
+pursuant to regulations of MOF and the Ministry of Human Resources and Social Security, SSF has been entrusted to manage
+the following funds: the National Social Security Fund, the subsidy from central government to individual accounts, part of
+the surplus of the enterprise employee's basic pension insurance, basic pension insurance fund and the partial state-owned
+capital transferred.
+The second single largest shareholder of the Bank is MOF, which held approximately 31.14% shares of the Bank as at 31
+December 2021. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+93
+Annual Report 2021
+(2) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+14.54%
+Guotai Junan Investment Management Co., Ltd.
+17
+(3) Due to rounding, percentages presented herein are for reference only.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong
+Kong
+As at 31 December 2021, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+HOLDERS OF A SHARES
+Long
+1,013,921,700
+Interest of
+controlled
+34.71
+shares (2) (%)
+Percentage of
+total ordinary
+Percentage of
+A shares (2) (%)
+45.89
+0.28
+Long
+position
+Nature of
+interests
+Number of
+A shares held
+(share)
+Capacity
+Beneficial owner
+MOF
+Huijin(1)
+shareholder
+Name of substantial
+123,717,852,951
+Annual Report 2021
+Industrial and Commercial Bank of China (A; H)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I1″
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+97
+Annual Report 2021
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+(3) The Bank is not aware of any connected relations or concert party action between the afore-mentioned preference shareholder
+and top 10 ordinary shareholders.
+(2) As the issuance of the offshore preference shares above was non-public offering, the register of preference shareholders
+presented the information on the registered holder of the offshore preference shares.
+Notes: (1) The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2021.
+Unknown
+13.30%
+40.11%
+China International Capital Corporation Limited (A; H)
+14
+20.05%
+Shenwan Hongyuan Group Co., Ltd. (A; H)
+13
+69.07%
+China Galaxy Financial Holdings Company Limited
+Increase/
+decrease
+Number
+of shares
+Number of
+pledged/
+44.4
+200,000,000
+shares
+on sales
+marked
+restrictions
+Shareholding
+percentage (%)
+the period
+at the end of
+12
+reporting
+period
+State-owned
+China Mobile Communications
+shareholder
+Name of shareholder
+Nature of
+locked-up/
+subject to
+Shares held
+during the
+Class of shares
+Domestic
+None
+100.00%
+11
+4
+Agricultural Bank of China Limited (A; H)
+3
+2
+China Development Bank Corporation
+1
+Company name
+No.
+As at 31 December 2021, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Peng Chun. Huijin is a
+wholly-owned subsidiary of China Investment Corporation. It, in accordance with authorization by the State Council, makes
+equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the
+rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the
+goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other business
+activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions it
+controls.
+Controlling Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Particulars of Substantial Shareholders
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+92
+(7) The number of shares held by Hong Kong Securities Clearing Company Limited at the end of the period refers to the total A
+shares (Northbound shares of the Shanghai-Hong Kong Stock Connect) held by it as a nominal holder designated by and on
+behalf of Hong Kong and foreign investors as at 31 December 2021.
+(6) According to the Notice on Comprehensively Transferring Part of State-Owned Capital to Fortify Social Security Funds (Cai Zi
+[2019] No. 49), MOF transferred 12,331,645,186 A shares to the state-owned capital transfer account of SSF in a lump sum in
+December 2019. According to the relevant requirements under the Notice of the State Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned Capital to Fortify Social Security Funds (Guo Fa [2017] No. 49), SSF shall perform the
+obligation of more than 3-year lock-up period as of the date of the receipt of transferred shares. At the end of the reporting
+period, according to the information provided by SSF to the Bank, SSF also held 7,946,049,758 H shares of the Bank and
+20,277,694,944 A and H shares in aggregate, accounting for 5.69% of the Bank's total ordinary shares.
+(5) The number of shares held by HKSCC Nominees Limited at the end of the period refers to the total H shares held by it as a
+nominee on behalf of all institutional and individual investors registered with accounts opened with HKSCC Nominees Limited
+as at 31 December 2021, which included H shares of the Bank held by SSF, Ping An Asset Management Co., Ltd. and Temasek
+Holdings (Private) Limited.
+Bank of China Limited (A; H)
+5
+China Construction Bank Corporation (A; H)
+Huijin's shareholding
+percentage
+31.34%
+New China Life Insurance Company Limited (A; H)
+10
+71.56%
+China Reinsurance (Group) Corporation (H)
+9
+73.63%
+China Export & Credit Insurance Corporation
+8
+China Jianyin Investment Limited
+53.95%
+Hengfeng Bank Co., Ltd.
+China Everbright Group Ltd.
+7
+60
+57.11%
+64.02%
+40.03%
+34.71%
+34.68%
+63.16%
+Group Co., Ltd.
+legal person
+preference shares
+Other entities
+China National Tobacco
+preference shares
+None
+2.5
+11,400,000
+11,400,000
+Domestic
+State-owned
+legal person
+Hwabao Trust Co., Ltd.
+preference shares
+legal person
+None
+2.7
+12,290,000
+9,240,000
+Domestic
+State-owned
+CITIC Securities Co., Ltd.
+Domestic
+10,000,000
+2.2
+None
+ICBC
+98
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "1" held by preference shareholders
+in total number (450 million shares) of domestic preference shares of "I".
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "1" as at 31 December 2021.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance Company Limited — Traditional
+Ordinary insurance products ―005L - CT001 Hu" is managed by China Life Insurance Company Limited. "Ping An Life
+Insurance Company of China, Ltd. - Traditional — Ordinary insurance products" is managed by Ping An Life Insurance Company
+of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China,
+Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected relations or concert party action
+among the afore-mentioned preference shareholders and among the afore-mentioned preference shareholders and top 10
+ordinary shareholders.
+None
+2.2
+10,000,000
+Domestic
+preference shares
+Domestic non-state-
+owned legal person
+preference shares
+Ping An Property & Casualty
+Insurance Company of
+China, Ltd.
+Corporation Heilongjiang
+Branch
+None
+2.2
+10,000,000
+Domestic
+Other entities
+China National Tobacco
+preference shares
+Corporation Shandong Branch
+preference shares
+legal person
+None
+3.3
+30,000,000
+Domestic
+Ping An Life Insurance Company Domestic non-state-
+preference shares
+legal person
+Limited
+None
+7.8
+35,000,000
+6.7
+Domestic
+China Life Insurance Company
+preference shares
+Corporation
+None
+11.1
+50,000,000
+Domestic
+Other entities
+China National Tobacco
+State-owned
+(4) Except to the extent unknown to HKSCC Nominees Limited, the top 10 shareholders of the Bank did not participate in any
+margin trading, short selling or refinancing business.
+None
+owned legal person
+15,000,000
+Domestic
+State-owned
+BOC International (China) Co.,
+Ltd.
+preference shares
+None
+3.3
+15,000,000
+Domestic
+of China, Ltd.
+BOCOM Schroders Asset
+State-owned
+legal person
+preference shares
+owned legal person
+Management Co., Ltd.
+None
+4.0
+18,000,000
+Domestic
+Domestic non-state-
+preference shares
+CCB Trust Co., Ltd.
+(3) HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Limited. Central Huijin Asset
+Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware of any connected
+relations or concert party action among the afore-mentioned shareholders.
+(2) The Bank had no shares subject to restrictions on sales.
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2021.
+356,406,257,089
+Shares not subject to
+II.
+restrictions on sales
+I. Shares subject to
+Percentage
+(%)
+Number of shares
+At 31 December 2021
+Increase/decrease
+during the
+reporting period
+Percentage
+(%)
+Unit: Share
+Number of shares
+At 31 December 2020
+DETAILS OF CHANGES IN SHARE CAPITAL
+Changes in Ordinary Shares
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+100
+shares
+on sales
+100.00
+restrictions on sales
+1.
+RMB-denominated
+Notes: (1) The above data are based on the Equity Structure Chart issued by China Securities Depository and Clearing Corporation Limited.
+100.00
+356,406,257,089
+24.35
+86,794,044,550
+75.65
+269,612,212,539
+100.00
+356,406,257,089
+(%)
+100.00
+Total number of shares
+III.
+overseas
+24.35
+86,794,044,550
+2. Foreign shares listed
+ordinary shares
+75.65
+269,612,212,539
+356,406,257,089
+marked
+locked-up/
+pledged/
+For details on the issuance of offshore preference shares of the Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+The number of qualified placees for the Offshore USD Preference Shares shall not be less than six, and they shall be offered
+only to professional investors instead of retail investors, and shall be non-publicly transferred in the OTC market only.
+145 million shares
+Number of
+shares issued
+Net amount
+of proceeds
+per share
+RMB135.77
+USD20
+Full amount
+of proceeds
+per share
+Total
+issuance
+amount
+USD2.9 billion
+Dividend rate
+3.58%
+96
+Stock code
+4620
+preference shares
+Type of offshore
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2020] No. 138 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2020] No. 1391, the Bank made a non-public issuance of 145 million USD-denominated non-cumulative
+perpetual offshore preference shares (the "Offshore USD Preference Shares") on 23 September 2020 at an issuance price
+of USD20 per share (see the table below for details). The Offshore USD Preference Shares were listed on the SEHK on 24
+September 2020. All proceeds from the issuance, after deduction of commission and issuance expenses, will be used to
+replenish additional tier 1 capital and increase capital adequacy ratio.
+Issuance of offshore preference shares
+For issuance of domestic preference shares of the Bank, please refer to the announcements published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2019] No. 444 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2019] No. 1048, the Bank made a non-public issuance of 700 million domestic preference shares on 19
+September 2019 at a par value of RMB100 per share. The dividend rate is the benchmark interest rate plus a fixed spread,
+remaining unchanged in the first five years. Subsequently the benchmark interest rate will be reset every five years, with
+the dividend rate kept unchanged in each reset period and the fixed spread remaining constant through the duration of
+the domestic preference shares. The initial dividend rate of the afore-mentioned domestic preference shares is set at 4.2%
+through market inquiry for the first five years. With the consent of SSE by its letter Shang Zheng Han [2019] No. 1752, the
+afore-mentioned domestic preference shares issued were listed for transfer on the Comprehensive Business Platform of SSE
+on 16 October 2019 with the stock name "2" and stock code 360036. Proceeds of the afore-mentioned domestic
+preference shares totaled RMB70.0 billion, all of which was replenished to the additional tier 1 capital of the Bank after
+deduction of issuance expenses.
+Issuance of "I¼2″
+Issuance and Listing of Preference Shares in Latest Three Years
+Preference Shares
+USD Preference Shares
+(2) "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the
+Content and Format of Information Disclosure of Companies with Public Offerings - Content and Format of the Report of
+Change in Corporate Shareholding" (Revision 2022) of CSRC.
+ICBC
+Reset dividend rate of “I¼1″
+Number of
+Number
+of shares
+subject to
+restrictions
+Shareholding
+percentage
+of the
+period
+145,000,000
+USD offshore
+preference shares
+Depository (Nominees) Limited person
+Foreign legal
+The Bank of New York
+at the end
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Shares held
+Class of shares
+Nature of
+shareholder
+Name of shareholder
+Unit: Share
+BANK
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+As at the end of the reporting period, the Bank had one offshore preference shareholder (or proxy), 25 domestic preference
+shareholders of "1" and 33 domestic preference shareholders of "12". As at the end of the month immediately
+before the annual results announcement date (28 February 2022), the Bank had one offshore preference shareholder (or
+proxy), 26 domestic preference shareholders of "11" and 33 domestic preference shareholders of "Iíƒ₹2″.
+Number of Preference Shareholders and Particulars of Shareholding
+For details on the reset dividend rate of domestic preference shares of the Bank, please refer to the announcements
+published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Increase/
+decrease
+during the
+reporting
+period
+95
+(3) Due to rounding, percentages presented herein are for reference only.
+During the reporting period, the Bank did not issue any shares, did not have any employee shares, employee stock
+ownership plan, did not issue any convertible bonds, or corporate bonds to be disclosed in accordance with Chapter II,
+Section 9 of the "No. 2 Standards on the Content and Format of Information Disclosure of Companies with Public Offerings
+· Content and Format of the Annual Report (Revision 2021)" issued by CSRC.
+0.39
+1,386,451,666
+200,331,413
+A Share
+Foreign legal
+Hong Kong Securities Clearing
+Company Limited(7)
+None
+0.68
+2,416,131,540
+-24
+A Share
+State-owned
+legal person
+China Securities Finance Co., Ltd.
+None
+1.03
+3,687,330,676
+None
+3.46
+12,331,645,186
+None
+Central Huijin Asset Management
+Co., Ltd.
+person
+State-owned
+legal person
+A Share
+products 022L- CT001 Hu
+Traditional Ordinary insurance
+None
+0.12
+426,975,751
+39,168,600
+A Share
+Other entities
+_
+A Share
+Taiping Life Insurance Co., Ltd.
+None
+0.12
+435,910,885
+A Share -34,438,403
+Other entities
+China Life Insurance Company
+Limited Traditional
+None
+0.28
+1,013,921,700
+- Ordinary insurance products
+―005L-CT001 Hu
+Other entities
+Ping An Life Insurance Company
+of China, Ltd. Traditional —
+Ordinary insurance products
+A Share
+Number of
+Shareholding
+Number of shares
+held at the end of
+the reporting
+period
+-
+A Share
+State-owned
+Class of
+shares
+Nature of
+shareholder
+Name of shareholder
+Huijin
+percentage
+Increase/
+decrease of
+shares during
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+91
+Annual Report 2021
+As at the end of the reporting period, the Bank had a total number of 750,894 ordinary shareholders and no holders of
+preference shares with voting rights restored or holders of shares with special voting rights, including 113,054 holders of H
+shares and 637,840 holders of A shares. As at the end of the month immediately before the annual results announcement
+date (28 February 2022), the Bank had a total number of 721,975 ordinary shareholders and no holders of preference shares
+with voting rights restored or holders of shares with special voting rights.
+Number of Shareholders and Particulars of Shareholding
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 35. to the Consolidated
+Financial Statements: Debt Securities Issued; Note 38. to the Consolidated Financial Statements: Other Equity Instruments"
+for details.
+For details on the issuance progress of tier 2 capital bonds and undated additional tier 1 capital bonds of the Bank during
+the reporting period, please refer to the section headed "Discussion and Analysis - Capital Management".
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares".
+Unit: Share
+Details of Securities Issuance and Listing
+pledged or
+(%)
+State-owned
+SSF(6)
+person
+Unknown
+24.17
+86,154,124,549
+-13,477,082
+H Share
+Foreign legal
+reporting period
+HKSCC Nominees Limited (5)
+31.14
+110,984,806,678
+A Share
+State-owned
+MOF
+None
+34.71
+123,717,852,951
+locked-up shares
+None
+China Galaxy Asset Management Co., Ltd.
+Pursuant to relevant provisions of the Prospectus on Non-public Offering of Preference Shares of Industrial and Commercial
+Bank of China Limited, domestic preference shares non-publicly offered by the Bank in November 2015 (abbreviation "I
+1" and code "360011") were priced at a coupon dividend rate adjusted in stages, with the coupon dividend rate being
+the benchmark interest rate plus a fixed spread. The coupon dividend rate for the first five years remained unchanged from
+the date of issuance, and subsequently the benchmark interest rate will be reset every five years, and the nominal dividend
+rate during each reset period will remain unchanged. In November 2020, the Bank reset the nominal dividend rate of "I
+11" as it lasted five years from the issuance date, and the coupon dividend rate after reset became 4.58% from 23
+November 2020.
+30.76%
+ICBC
+90
+III. Pushing for technology self-reliance. First, the IT
+core architecture was transformed and upgraded. The
+Bank has advanced the smart banking ecosystem project
+(ECOS) since 2015. Two core IT infrastructure platforms
+(cloud computing and distributed computing) were
+developed in-house to deal with all the core operations of
+ICBC. The two platforms provided safe and stable financial
+services to over 700 million individual customers and
+nearly 9.70 million corporate customers, with the system
+availability always above 99.99%. Second, digital new
+infrastructures were developed in a faster pace. In
+2021, the Bank became the first bank to receive a five-star
+rating for its maturity of data management capabilities. The
+Bank thoroughly implemented the development philosophy
+that "lucid waters and lush mountains are invaluable
+assets" in a bid to build a world-class green data center.
+The Bank's "National Green Data Center" recorded a daily
+peak of 868 million transactions, equivalent to a carbon
+dioxide emissions reduction of nearly 6,000 tons a year.
+Third, the Bank made a push for new technologies on
+all fronts. With a focus on cutting-edge technologies such
+as artificial intelligence, blockchain, cloud computing and
+big data, the Bank has built a series of new IT platforms,
+including ICBC Turing, ICBC Premier Chain and ICBC
+Nebula, to boost its core capabilities in new infrastructures.
+Among them, ICBC Premier Chain integrates basic
+technical services of blockchain, intelligent operations,
+and financial-level security capabilities. With more than
+150 breakthroughs achieved in security, performance and
+capacity, the Bank was included in Forbes' Blockchain
+50 2021. Fourth, data asset management and data
+security control were enhanced. The Bank developed
+a data architecture focused on "one data lake, two
+databases". It built a big data-based smart cloud platform
+that is first of its type, self-contained, controllable and with
+a distributed architecture. All the Group's data have been
+moved into the "lake".
+Bank developed special sections for key customer groups,
+becoming the first bank to establish interconnection with
+the system of the Ministry of Human Resources and Social
+Security (MOHRSS) and enabling the issuance of "physical
++ electronic" social security cards. The Bank supported
+cross-provincial processing of social security cards and
+built a "smart risk control" platform to safeguard
+customers' funds. Efforts were intensified to monitor
+unusual transactions in high-risk areas, such as sensitive
+transactions, anti-theft and the elderly's fund transfer.
+the "bulk guarantee" credit enhancement mechanism
+to make financing more accessible to small and micro
+businesses. The Bank strengthened the capacity of fully
+digital operations by building a customer marketing
+system covering "targeting, attraction, engagement
+and retention". During the reporting period, the Bank
+kept deepening trade finance and cross-border finance
+in support of cooperation projects under the Belt and
+Road Initiative. The Bank developed the "ICBC Global
+Pay" product series to provide one-stop global cash
+management services, serving nearly 10,000 multinational
+corporations and helping Chinese enterprises going
+global. The "ICBC Business Matchmaker" cross-border
+matchmaking platform was developed. ICBC became
+the first bank to provide closed-loop cross-border
+matchmaking services. Nearly 80% of matched pairs
+intended to cooperate with each other.
+Discussion and Analysis
+89
+Annual Report 2021
+II. Building a GBC digital community. First, on the
+G-end, new models of digital government services
+were introduced. The Bank carried out government data
+partnership with 29 provincial or equivalent governments
+and launched more than 300 government partnership
+scenarios, proactively supporting government affairs to
+be "processed in one network". "My Ningxia" APP built
+and shaped a new brand and image for Ningxia's digital
+government. Second, B-end saw in-depth participation
+in industry digitalization. Keeping pace with digital
+transformation of leading players in modern agriculture,
+advanced manufacturing and modern service industries,
+the Bank provided services along the value chain ranging
+from upstream to downstream customers, and improved its
+financial service capabilities covering the entire industrial
+chain. The Bank launched over 20 "financial + industrial"
+cloud service ecosystem to provide over 2,600 types of
+financial services and products to the public around the
+hot areas of people's livelihood, including healthcare,
+education and mobility, ranking first among peers by
+service types and number of scenarios covered. Third,
+C-end endeavored to build a new service model
+of "ICBC on cloud". The Bank continued to upgrade
+mobile banking and offered abundant online services
+for 469 million users. It developed new models of smart
+marketing, under which Smart Brain was connected to
+channels such as ICBC e-Service, Gino (Gong Xiao Zhi)
+and cloud studios, providing more than 10 million smart
+service solutions for individual customers. The Bank actively
+promoted scenario- and ecosphere-based use of digital
+RMB, getting fully involved in digital public services. The
+Hot Topic 2: D-ICBC
+In 2022, ICBC will adhere to the general principle of
+pursuing progress while ensuring stability, apply the new
+development philosophy in every respect and remain stable
+with sound momentum. The Bank will push for medium-
+term breakthroughs under new plans, deepen digital
+transformation and work hard to break new ground in
+ICBC's high-quality development.
+iii. Laying a solid foundation: focusing on FinTech
+and financial innovation. In terms of FinTech, the
+Bank practiced technology self-reliance, strengthened the
+"dual wheel drive" of technological innovation and system
+reform, and empowered the development of "D-ICBC"
+with technology. The intelligent banking ecosystem ECOS
+was awarded PBC's only special award of the "FinTech
+Development Awards" in 2021. The Bank had the most
+newly added and accumulated patents among Chinese
+banks. In terms of financial innovation, the Bank
+ranked first in both the balance and growth of credits to
+manufacturing, strategic emerging industries, green and
+other key fields among peers. Specifically, the Bank topped
+the RMB2 trillion mark in balance of manufacturing loans,
+a net increase of RMB319.7 billion. The balance of loans
+to strategic emerging industries exceeded RMB1 trillion.
+Outstanding green loans amounted to RMB2.48 trillion, up
+RMB634.9 billion from the beginning of the year, with the
+new green loans issued in the year hitting an all-time high.
+iv. Laying a solid base: focusing on enhancing the
+capacity of enterprise risk management, efficiency
+of GBC interactions and competitiveness of outlets
+and teams. In terms of enterprise risk management
+system, the Bank adhered to the four-pronged risk
+management approach to people, money, defense
+line and bottom line, followed the guiding principle of
+"active prevention, smart control and comprehensive
+management", incorporated investment and financing
+cooperation, secondary risks of intermediate business,
+climate risk and model risk in the enterprise risk
+management system. The "9+X" risks were generally
+under control. In terms of GBC interactions and
+coordination of channels, the Bank made solid progress
+in GBC work, fund taking, "net making and patching"
+program, payroll service, management of investment and
+financing cooperation institutions and competitiveness
+enhancement of outlets. Remarkable achievements were
+Imade in the development of key GBC scenarios. G-end
+added 12 thousand customers and RMB120.0 billion
+of deposits. B-end added 290 thousand customers and
+RMB290.0 billion of deposits. C-end acquired or activated
+52.00 million customers with a payroll service volume of
+RMB1.7 trillion.
+Tianjin-Hebei region, Yangtze River Delta, Guangdong-
+Hong Kong-Macao Greater Bay Area, Central China and
+Chengdu-Chongqing region. In terms of the Urban-
+Rural Collaborative Development Strategy, the Bank
+innovated the rural vitalization service system, introduced
+the "Xingnongtong" brand and provided stronger credit
+resource support. The balance of agriculture-related loans
+reached RMB2.66 trillion.
+Discussion and Analysis
+16
+15
+Jiantou CITIC Asset Management Co., Ltd. (A; H)
+The Bank remained steadfast on the road of digital
+development. In shifting from "bank informatization"
+to "informatized bank", ICBC led the Digital 1.0 stage
+of digital technology-driven business development. The
+Bank keenly grasped the trends in the fresh technological
+revolution and industry transformation and made a push
+for IT architecture transition and the "smart banking
+ecosystem ECOS" project, kick-starting the Digital 2.0
+stage of digitalization-led transformation in every respect.
+During the reporting period, the Bank took the lead in
+developing a five-dimensional plan for "digital ecosystem,
+digital assets, digital technology, digital infrastructure
+and digital genes" and planned to launch a farsighted
+digital brand "D-ICBC". In addition, leveraging on the
+Group's FinTech and data strengths, the Bank deepened
+the D-ICBC development driven by "data and technology"
+on a customer-oriented basis. Keeping in mind the bigger
+picture of building a digital China, ICBC contributed to
+the healthy development of digital economy by promoting
+profound changes in business and service models,
+and improvement of quality and efficiency of product
+innovation. Significant improvements have been made in
+customer experience, service efficiency and business value.
+I. Digital transformation boosted circulation.
+According to the business model and transaction
+characteristics of small and micro customers, the Bank
+continuously upgraded its digital inclusive products and
+their operation system. Inclusive loans issued online
+accounted for 94% of the new balance. More scenarios
+were introduced for "e-Enterprise Quick Loan" to improve
+the service quality and efficiency for small and micro
+customers who hold non-residential real properties. A
+combination of tax, electricity, settlement and other
+data were used to provide credit loan support for the
+activity of small and micro businesses. The digital supply
+chain and industrial chain scenarios-based financial
+services were developed and perfected for national
+strategic sectors such as modern agriculture, "specialized,
+sophisticated, distinctive and innovative" enterprises
+and advanced manufacturing. In cooperation with the
+National Financing Guarantee Fund, the Bank introduced
+Male
+1973
+July 2020-
+Xu Shouben
+October 2020-
+Male
+1969
+Senior Executive Vice President
+Senior Executive Vice President
+Zhang Wenwu
+Shen Bingxi
+1965
+Male
+External Supervisor
+Zhang Jie
+June 2016-June 2022
+1952
+Male
+External Supervisor
+Zhang Weiwu
+September 2020-September 2023
+November 2021-November 2024
+Senior Executive Vice President
+Board Secretary
+1975
+Directors, Supervisors and Senior Management Leaving Office
+April 2020-
+1965
+Male
+Chief Business Officer
+Song Jianhua
+April 2020-
+1964
+Female
+Chief Business Officer
+Male
+Xiong Yan
+1963
+Male
+1962
+Guan Xueqing
+April 2020-
+1962
+Male
+Chief Business Officer
+Wang Bairong
+June 2021-
+July 2016-
+Male
+Male
+Wu Xiangjiang
+1955
+Male
+Independent Non-executive Director
+Yang Siu Shun
+April 2015-April 2021
+1946
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+January 2022-January 2025
+April 2016-June 2022
+1966
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I"
+Unit: Share
+Name of shareholder
+Nature of
+shareholder
+Class of shares
+Increase/
+decrease
+during the
+reporting
+period
+Number
+Number of
+of shares
+Male
+Employee Supervisor
+Shen Si
+Male
+June 2016-June 2022
+1964
+Male
+Employee Supervisor
+Huang Li
+June 2016-June 2022
+1962
+Qu Qiang
+Shareholder Supervisor
+Zhang Wei
+Independent Non-executive Director
+April 2019-April 2022
+Male
+Independent Non-executive Director
+Fred Zuliu Hu
+December 2018-December 2021
+1943
+Male
+Independent Non-executive Director
+Nout Wellink
+March 2017–June 2023
+1953
+1963
+Yang Guozhong
+January 2020-March 2021
+Zheng Fuqing
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently
+the Head of Beijing Branch of the Bank. He served as Deputy General Manager and General Manager of the Banking
+Department as well as Deputy Head and Head of Guizhou Branch of ICBC. Mr. Huang graduated from The University of
+Hong Kong with an MBA degree. He is a senior economist.
+Huang Li, Employee Supervisor
+Directors, Supervisors and Senior Management
+ICBC
+106
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of the Bank
+since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor of the Board of Supervisors, General
+Manager of the Legal Affairs Department and Chief of Consumer Protection Office of the Bank. He graduated from Peking
+University with a Doctorate degree in Law and is a research fellow.
+Zhang Wei, Shareholder Supervisor
+Mr. Hu has served as Independent Non-executive Director of the Bank since April 2019. He previously served as a senior
+economist at the International Monetary Fund, Head of Research at the World Economic Forum, the chairman for Greater
+China and a partner at Goldman Sachs Group, Inc., an independent non-executive director of Great Wall Pan Asia Holdings
+Limited (formerly known as SCMP Group Limited), an independent non-executive director of Hang Seng Bank Limited,
+the non-executive director of China Asset Management Co., Ltd., an independent director of Dalian Wanda Commercial
+Management Group Co., Ltd., an independent director of Shanghai Pudong Development Bank and the independent non-
+executive director of Hong Kong Exchanges and Clearing Limited, etc. Mr. Hu currently serves in various positions such as
+the chairman of Primavera Capital Group, the non-executive chairman of Yum China Holdings, Inc, the independent non-
+executive director of Ant Group Co., Ltd., the director of UBS Group AG, the co-chair of The Nature Conservancy's Asia
+Pacific Council and the director of the China Medical Board. Mr. Hu is also a member of the Global Board of Advisors for
+the Council on Foreign Relations, the 21st Century Council of the Berggruen Institute, the Harvard Global Advisory Council,
+the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government, the Stanford Center for International
+Development, and the Jerome A. Chazen Institute of International Business at Columbia University etc. He concurrently
+serves as the co-director of the National Center for Economic Research and a professor at Tsinghua University, and he is also
+an adjunct professor at the Chinese University of Hong Kong and Peking University. Mr. Hu obtained a master's degree in
+engineering science from Tsinghua University, and a master's degree and a PhD in economics from Harvard University.
+Fred Zuliu Hu, Independent Non-executive Director
+Mr. Wellink has served as Independent Non-executive Director of the Bank since December 2018. Previously, he served
+as the Treasurer General in the Dutch Ministry of Finance, member of the Executive Board and the President of the Dutch
+Central Bank, member of the Governing Council of the European Central Bank, member of the Group of Ten Central Bank
+Governors and Governor of the International Monetary Fund, member and Chairman of the Board of Directors of the Bank
+for International Settlements, Chairman of the Basel Committee on Banking Supervision, Independent Director of Bank of
+China Limited, Vice Chairman of Supervisory Board of PricewaterhouseCoopers Accountants N.V. and an Emeritus Professor
+at the Free University in Amsterdam. Mr. Wellink also served as member of the supervisory board of a bank, a reinsurance
+company and other enterprises on behalf of the Dutch authorities, Chairman of the Board of Supervisors of the Netherlands
+Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and the Westeinde Hospital in The Hague.
+He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of Orange-
+Nassau since 2011. He received a Master's degree in Law from Leiden University, a Doctorate degree in Economics from
+Erasmus University Rotterdam and an Honorary Doctorate from Tilburg University.
+Nout Wellink, Independent Non-executive Director
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of
+Shanghai Pudong Development Bank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA
+degree. He is a senior economist.
+Shen Si, Independent Non-executive Director
+Directors, Supervisors and Senior Management
+105
+Annual Report 2021
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region, Director and Chairman of
+Audit Committee of Hang Seng Management College, Vice Chairman of the Council of the Open University of Hong Kong
+and a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority. Mr. Yang currently serves
+as a member of the 13th National Committee of the Chinese People's Political Consultative Conference, a member of the
+board of directors of the Hong Kong Jockey Club and an Independent Non-executive Director of Tencent Holdings Limited.
+Mr. Yang graduated from the London School of Economics and Political Science. He was awarded the degree of Honorary
+Doctor of Social Sciences by The Open University of Hong Kong. He is a Justice of the Peace in Hong Kong. Mr. Yang holds
+the qualification of Chartered Accountants, and is a senior member of the Institute of Chartered Accountants in England and
+Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of Management Accountants.
+Yang Siu Shun, Independent Non-executive Director
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee
+of the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of
+People's Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the
+Technical Committee of the International Organization of Securities Commissions, Chairman of Hong Kong Independent
+Police Complaints Council, a Non-executive Director of Global Digital Creations Holdings Limited. He was an Independent
+Non-executive Director of Link Management Limited, which is the Manager of Link Real Estate Investment Trust. He was
+also an Independent Non-executive Director of China Shenhua Energy Company Limited, Bank of China Limited, China Life
+Insurance Company Limited and New China Life Insurance Company Ltd. Mr. Neoh currently serves as an Independent Non-
+executive Director of CITIC Limited, Treasurer and Member of Council of The Chinese University of Hong Kong and Chairman
+of the Asian Academy of International Law. He graduated from the University of London with a Bachelor's degree in Law.
+He is Honorary Doctorate of Law of Chinese University of Hong Kong and Open University of Hong Kong and Honorary
+Doctorate of Social Sciences of Lingnan University. He was elected Honorary Fellow of the Hong Kong Securities Institute,
+Fellow of the Hong Kong Academy of Finance and Academician of the International Euro-Asian Academy of Sciences. Mr.
+Neoh was appointed as Senior Counsel in Hong Kong. He is a barrister of England and Wales. He was admitted to the State
+Bar of California.
+Anthony Francis Neoh, Independent Non-executive Director
+Mr. Dong has served as Non-executive Director of the Bank since January 2022. He joined MOF in August 1989. He
+previously served as assistant researcher, researcher and secretary (director level) of the Department of National Defense of
+MOF, a member of the CPC Committee, Deputy Inspector, and Discipline Inspection Team Leader of the Commissioner's
+Office of MOF in Heilongjiang, a member of the CPC Committee, Deputy Inspector and Discipline Inspection Leader of the
+Commissioner's Office of MOF in Beijing, a member of the CPC Committee, Deputy Director, and Discipline Inspection Team
+Leader of the Beijing Regulatory Bureau of MOF. Mr. Dong graduated from the Beijing Normal University and obtained a
+Master's degree in Management from Harbin Engineering University.
+Wu Xiangjiang, Employee Supervisor
+Mr. Wu has served as Employee Supervisor of the Bank since September 2020. He joined ICBC in 1988 and is currently the
+General Manager of Internal Control & Compliance Department of the Bank. He served such positions at the Bank as Deputy
+Head of Zhejiang Branch, General Manager of E-banking Department and General Manager of Internet Finance Department.
+Mr. Wu graduated from Zhejiang University with a Doctorate degree in Management. He is a senior economist.
+Shen Bingxi, External Supervisor
+Mr. Shen has served as External Supervisor of the Bank since June 2016. He previously served as the Deputy Chief of the
+Financial Market Division of the Financial System Reform Department, Chief of the System Reform Division and Monetary
+Policy Research Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China. Mr.
+Shen is currently guest professor of Tsinghua University, Zhejiang University and Nankai University. Mr. Shen graduated from
+Renmin University of China, and received a Doctorate degree in Economics. He is a research fellow.
+ICBC
+108
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang were recommended by Huijin to
+serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section headed
+"Details of Changes in Share Capital and Shareholding of Substantial Shareholders ― Interests and Short Positions Held by
+Substantial Shareholders and Other Persons" for further details.
+Mr. Song has served as Chief Business Officer of the Bank since April 2020. He joined ICBC in 1987. He was appointed as
+Deputy General Manager of Jiangsu Branch and General Manager of the Personal Banking Department of the Head Office.
+Mr. Song graduated from Peking University and obtained a Doctorate degree in management science and engineering from
+Nanjing University. He is a senior economist.
+Song Jianhua, Chief Business Officer
+Ms. Xiong has served as Chief Business Officer of the Bank since April 2020. She joined ICBC in 1984, and served as
+Deputy Director-General of Kunming Sub-bureau of the Internal Audit Bureau, Deputy General Manager of Yunnan Branch,
+Deputy Director-General of the Sub-bureau directly managed by the Internal Audit Bureau, Deputy General Manager of
+the Corporate Banking Department I (Corporate Banking Department) and General Manager of the Institutional Banking
+Department of the Head Office. Ms. Xiong graduated from Hunan University, and obtained a degree of International Master
+of Business Administration (IMBA) from Fudan University and The University of Hong Kong. She is a senior economist.
+Xiong Yan, Chief Business Officer
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as Head of Suining
+Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of Frankfurt Branch,
+Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General Manager of Banking Department of Sichuan
+Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan was also General Manager of Corporate
+Strategy and Investor Relations Department of the Bank. He graduated from the Southwestern University of Finance and
+Economics and obtained a Doctorate degree in Economics. He is a senior economist.
+Guan Xueqing, Board Secretary
+Dong Yang, Non-executive Director
+Mr. Wang has served as Chief Business Officer of the Bank since April 2020. He began his career in 1986. He joined ICBC in
+1991 and previously served as Assistant to Head of Zhejiang Branch and Head of Shaoxing Branch, Deputy Head of Zhejiang
+Branch and General Manager of the Banking Department of Zhejiang Branch, Deputy Head (person in charge) and Head of
+Chongqing Branch and Chief Risk Officer. Mr. Wang graduated from the Party School of the Central Committee of CPC and
+obtained a Master's degree in Economics. He is a senior economist.
+Mr. Zhang has served as Senior Executive Vice President of the Bank since June 2021. He joined ICBC in July 1999, and was
+appointed as General Manager of ICBC (Europe) Amsterdam Branch in January 2011, General Manager of Singapore Branch
+in February 2013 and General Manager of the International Banking Department of the Head Office of ICBC in January
+2017. Mr. Zhang graduated from the Northwest University in China and obtained Master's degree in Political Economy and
+MBA from Hitotsubashi University in Japan. He is a senior economist.
+Zhang Weiwu, Senior Executive Vice President
+Directors, Supervisors and Senior Management
+107
+Annual Report 2021
+Mr. Xu has served as Senior Executive Vice President of the Bank since October 2020. He joined ICBC in 1995. He was
+appointed as Deputy Head of Guangdong Branch and Head of Shenzhen Branch. Mr. Xu graduated from the Harbin Institute
+of Technology, and he obtained a Doctorate degree in Economics from Sun Yat-sen University. He is a senior economist.
+Xu Shouben, Senior Executive Vice President
+Mr. Zhang has served as Senior Executive Vice President of the Bank since July 2020. He joined ICBC in 1995. He was
+appointed as Deputy General Manager of the Finance & Accounting Department of the Head Office, Deputy Head of
+Liaoning Branch, Executive Director and Chief Financial Officer of ICBC-AXA Assurance Co., Ltd., Director of the Board of
+Supervisors' Office of the Head Office, and General Manager of the Finance & Accounting Department of the Head Office.
+Mr. Zhang graduated from the University of International Business and Economics, and he obtained a Doctorate degree in
+Management from Renmin University of China. He is a senior accountant.
+Zhang Wenwu, Senior Executive Vice President
+Mr. Zhang has served as External Supervisor of the Bank since November 2021. He is currently a professor and doctoral
+supervisor of the Renmin University of China, director of the International Monetary Institute, a distinguished professor
+of the Ministry of Education's "Changjiang Scholars Program", a famous teacher of the national "Ten Thousand Talents
+Program", and a national candidate of the "New Century Talents Project". Mr. Zhang is a recipient of the special
+government allowance provided by the State Council to experts, and is engaged in research on the topics of institutional
+finance, China's financial system and financial development. He was the Dean of the School of Finance of Shaanxi Institute
+of Finance and Economics, the Associate Dean of the School of Economics and Finance of Xi'an Jiaotong University, the
+Associate Dean of the School of Finance of Renmin University of China, and the first Secretary General of the College
+Finance Teaching Steering Committee of the Ministry of Education. At present, he is concurrently a researcher of the
+Finance Research Institute of the Counsellor's Office of the State Council, and an executive director of the China Society for
+Finance and Banking. Mr. Zhang graduated from Shaanxi University of Finance and Economics with a Doctorate degree in
+Economics.
+Wang Bairong, Chief Business Officer
+Ms. Chen has served as Non-executive Director of the Bank since August 2021. She joined MOF in August 1985. She
+previously served as Deputy Division Chief of Payment Management Division and Deputy Director of Charge Bill Regulatory
+Center of General Affairs and Reform Department of MOF, Deputy Division Chief of the Charging Fund Policy Management
+Division of the Comprehensive Department of MOF, Division Chief of Charging Fund Division of Policy Planning Department
+of MOF, Division Chief of Housing and Land Division of the Comprehensive Department of MOF, Deputy Director-General of
+the Comprehensive Department of MOF, Member of the Party Group, Inspector and Deputy Secretary of the Party Group of
+Shenzhen Finance Supervision Commissioner Office of MOF, Deputy Secretary of the Party Group, Inspector and Level-one
+Inspector of Shenzhen Regulatory Bureau of MOF, and Level-one Inspector of Fiscal Notes Supervision Center of MOF. Ms.
+Chen obtained a Bachelor's degree in Economics from Jiangxi University of Finance and Economics.
+Chen Yifang, Non-executive Director
+Directors, Supervisors and Senior Management
+The terms of Mr. Liao Lin, Mr. Zheng Guoyu and Mr. Wang Jingwu as Executive Directors of the Bank are set out in the above
+table. Please refer to the section headed "Biographies of Directors, Supervisors and Senior Management" for the starting time of
+their terms as Senior Management members of the Bank.
+(2)
+Notes: (1) Please refer to the section headed "Appointment and Removal".
+Directors, Supervisors and Senior Management
+ICBC
+102
+December 2015-November 2021
+1966
+Male
+August 2017-February 2021
+(3) According to laws, regulations and the Articles of Association of the Bank, before the newly elected directors take office, the
+current directors shall continue to act as directors.
+1971
+February 2015-January 2022
+1963
+Male
+pledged/
+1963
+Male
+External Supervisor
+Non-executive Director
+Mei Yingchun
+Non-executive Director
+Female
+Chairman of the Board of Supervisors
+(4) According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in the
+above table shall be the day of his/her first appointment.
+(6) The full name of Mr. Nout Wellink is Arnout Henricus Elisabeth Maria Wellink.
+ICBC
+104
+Ms. Cao has served as Non-executive Director of the Bank since January 2020. She joined Huijin in 2020. Ms. Cao previously
+served as Deputy Director of Regulations Division, General Affairs Department, Director of Regulations Division, General
+Affairs Department, Director of Non-Financial Institutions Inspection Division, Supervision and Inspection Department,
+Director of General Affairs Division, Supervision and Inspection Department, Deputy Director-General of Supervision and
+Inspection Department, Inspector of General Affairs Department (Policy and Regulation Department), Level-Two Inspector of
+General Affairs Department (Policy and Regulation Department) of State Administration of Foreign Exchange, and acted as
+Deputy Director of Administrative Committee of Beijing's Zhongguancun Science Park. Ms. Cao obtained a Bachelor's degree
+in Law from China University of Political Science and Law, a Master's degree in Finance from Renmin University of China, and
+a Master's degree in Public Administration from Peking University. Ms. Cao is an economist.
+Cao Liqun, Non-executive Director
+Mr. Feng has served as Non-executive Director of the Bank since January 2020. He joined MOF in 1986. He previously
+served as Deputy Director of Academic Affairs Division of Chinese Accounting Correspondence School of Accounting
+Department of MOF (deputy division chief level), Person in charge of Teaching Material Department of National Accountant
+Certification Examination Leading Group Office, Director of Accounting Personnel Management Division and Director of
+Institutional System Division I of Accounting Department of MOF, Deputy Director (deputy director-general level), Deputy
+Director (person in charge), Director (director-general level), Secretary of the Party Committee and Director of National
+Accountant Assessment & Certification Centre of MOF. He concurrently serves as a Managing Director of the 8th Council
+of the Accounting Society of China, a part-time professor and off-campus practice tutor for postgraduate students of the
+School of Economics and Management of Beijing Jiaotong University, and a visiting tutor for postgraduate students in the
+Accounting School of the Central University of Finance and Economics. Mr. Feng obtained a Bachelor's degree in Economics
+from Dongbei University of Finance & Economics and Doctorate degree from Beijing Jiaotong University. Mr. Feng Weidong
+is a senior accountant, researcher, non-practicing certified public accountant and is a recipient of the Special Government
+Allowance by the State Council of China.
+Feng Weidong, Non-executive Director
+Mr. Lu has served as Non-executive Director of the Bank since August 2019. He joined Huijin in 2019. Mr. Lu previously
+served as Deputy Director of the Administrative Office of the Economic Research Consultation Centre of the State Economic
+and Trade Commission, Director of the Specific Research Department of the Economic Research Centre of the State
+Economic and Trade Commission, Director of the Capital Markets Research Department of the Research Centre of the State-
+owned Assets Supervision and Administration Commission of the State Council, and Director Assistant of the Research
+Centre of the State-owned Assets Supervision and Administration Commission of the State Council with the concurrent post
+as the Director of the Capital Markets Research Department, and Deputy Director of the Research Centre of the State-owned
+Assets Supervision and Administration Commission of the State Council. Mr. Lu obtained a Bachelor's degree and a Master's
+degree in History from Peking University, and a Doctorate degree in Economics from Southwestern University of Finance and
+Economics. He is a researcher.
+Lu Yongzhen, Non-executive Director
+Mr. Wang has served as Executive Director, Senior Executive Vice President and concurrently Chief Risk Officer since
+September 2021, and as Senior Executive Vice President of the Bank since April 2020. He joined PBC in August 1985, and
+has successively served as Supervision Commissioner (Deputy Director level) of PBC Shijiazhuang Central Sub-branch, Head of
+PBC Shijiazhuang Central Sub-branch and concurrently Director of State Administration of Foreign Exchange ("SAFE") Hebei
+Branch, Head of PBC Hohhot Central Sub-branch and concurrently Director of SAFE Inner Mongolia Branch, Head of PBC
+Guangzhou Branch and concurrently Director of SAFE Guangdong Branch, and Director-General of PBC Financial Stability
+Bureau since January 2002. Mr. Wang graduated from the Hebei Banking School, and he received a doctorate degree in
+economics from Xi'an Jiaotong University. He is a research fellow.
+Wang Jingwu, Executive Director, Senior Executive Vice President, Chief Risk Officer
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period held shares or share options or
+were granted restricted shares of the Bank, and there was no change during the reporting period.
+Directors, Supervisors and Senior Management
+Annual Report 2021
+Mr. Zheng has served as Executive Director and Senior Executive Vice President of the Bank since December 2021 and
+as Senior Executive Vice President of the Bank since September 2021. He joined Bank of China since November 1988.
+He was appointed as Assistant to General Manager and Deputy General Manager of Hubei Branch, General Manager of
+Shanxi Branch, General Manager of Sichuan Branch, Member of Executive Committee of Bank of China, and Executive Vice
+President of Bank of China. Mr. Zheng graduated from Wuhan Institute of Water Transportation Engineering and obtained a
+Master's degree in Business Administration from Huazhong University of Science and Technology. He is a senior economist.
+Zheng Guoyu, Executive Director, Senior Executive Vice President
+Mr. Huang has served as Chairman of the Board of Supervisors of the Bank since July 2021. He served as the Deputy
+Chief of the Human Resources Department of PBC, President of Nanning Central Sub-branch of PBC and Chief of Guangxi
+Zhuang Autonomous Region Branch of State Administration of Foreign Exchange, General Manager of the Human Resources
+Department, member of the Business Committee, Assistant to President and Vice President of Export-Import Bank of
+China, and Chairman of the Board of Supervisors of the People's Insurance Company (Group) of China Limited. Mr. Huang
+graduated from Renmin University of China and obtained a Master's degree in Law, and is a senior economist.
+Huang Liangbo, Chairman of the Board of Supervisors
+Mr. Liao has served as Vice Chairman, Executive Director and President of the Bank since March 2021, Executive Director
+of the Bank since July 2020, and Senior Executive Vice President, Senior Executive Vice President and concurrently Chief
+Risk Officer since November 2019. Mr. Liao joined China Construction Bank in 1989, and was appointed as Deputy General
+Manager of Guangxi Branch of China Construction Bank, General Manager of Ningxia Branch, Hubei Branch and Beijing
+Branch of China Construction Bank, Chief Risk Officer, Executive Vice President and concurrently Chief Risk Officer of
+China Construction Bank. Mr. Liao graduated from Guangxi Agricultural University. He obtained a Doctorate degree in
+management science from Southwest Jiaotong University. Mr. Liao is a senior economist.
+Liao Lin, Vice Chairman, Executive Director, President
+Mr. Chen has served as Chairman and Executive Director of the Bank since May 2019. He joined Bank of China in 1990. Mr.
+Chen Siqing previously worked in the Hunan Branch of Bank of China before he was dispatched to the Hong Kong Branch
+of China and South Sea Bank Ltd. as Assistant General Manager. Mr. Chen held various positions in Bank of China, including
+Assistant General Manager and Vice General Manager of the Fujian Branch, General Manager of the Risk Management
+Department of the Head Office, General Manager of the Guangdong Branch, Executive Vice President, President, Vice
+Chairman and Chairman of Bank of China. Mr. Chen served concurrently as Chairman of the Board of Directors of BOC
+Aviation Limited, Non-executive Director, Vice Chairman and Chairman of the Board of Directors of BOC Hong Kong
+(Holdings) Limited. Mr. Chen graduated from Hubei Institute of Finance and Economics, and obtained a Master's degree
+in Business Administration (MBA) from Murdoch University, Australia. He is a Certified Public Accountant and a senior
+economist.
+Chen Siqing, Chairman, Executive Director
+Biographies of Directors, Supervisors and Senior Management
+103
+Shares held
+Zhang Jie, External Supervisor
+locked-up/
+year
+Gender
+Position
+Name
+Birth
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors and Senior Management
+101
+Annual Report 2021
+According to the Accounting Standard for Business
+Enterprises No. 22 Recognition and Measurement
+of Financial Instruments, the Accounting Standard for
+Business Enterprises No. 37 Presentation of Financial
+well
+Instruments promulgated by MOF as
+International Financial Reporting Standard 9
+Instruments and the International Accounting Standard
+32 Financial Instruments: Presentation promulgated
+by International Accounting Standards Board and other
+accounting standards and the key terms of issuance of
+the Bank's preference shares, the issued and existing
+preference shares do not contain contractual obligations
+to deliver cash or other financial assets or contractual
+obligations to deliver variable equity instruments for
+settlement, and shall be accounted for as other equity
+instruments.
+as the
+Financial
+Accounting Policy Adopted for Preference
+Shares and Rationale
+During the reporting period, the Bank did not restore any
+voting right of preference share.
+Restoration of Voting Rights of Preference
+Shares
+During the reporting period, the Bank did not convert any
+preference share.
+In 2014, the Bank issued EURO.6 billion offshore
+preference shares. The Board of Directors of the Bank
+reviewed and approved the Proposal on the Exercise of
+Redemption of Offshore EUR Preference Shares on 27
+August 2021. On the premise of obtaining the approval of
+CBIRC, the Bank planned to exercise the right to redeem
+all the abovementioned offshore EUR preference shares on
+10 December 2021. In October 2021, the Bank received
+a reply letter from CBIRC, which had no objection to the
+Bank's redemption of EURO.6 billion offshore preference
+shares. Pursuant to the terms and conditions of the
+offshore EUR preference shares and the reply letter from
+CBIRC, the Bank redeemed the aforementioned offshore
+EUR preference shares in whole on 10 December 2021
+at the redemption price of each offshore EUR preference
+share (being the aggregate of an amount equal to the
+liquidation preference of each offshore EUR preference
+share plus any dividends accrued but unpaid in respect of
+the period from (and including) the immediately preceding
+dividend payment date to (but excluding) the redemption
+date). Subsequent to the redemption and cancellation
+of the aforementioned offshore EUR preference shares
+on the redemption date, there are no EUR preference
+shares issued in the offshore market. Please refer to the
+announcements published by the Bank on the website of
+SSE, the "HKEXnews" website of HKEX and the website of
+the Bank.
+Redemption or Conversion of Preference
+Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+100
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+(3) Offshore USD preference share refers to USD2.9 billion preference shares issued offshore by the Bank at a dividend rate of
+3.58% in 2020.
+Offshore EUR, USD and RMB preference shares refer to EURO.6 billion preference shares, USD2.94 billion preference shares and
+RMB12.0 billion preference shares issued offshore by the Bank at a dividend rate of 6.00% in 2014. The Bank redeemed the
+above offshore USD preference shares and offshore RMB preference shares on 10 December 2019 and the above offshore EUR
+preference shares on 10 December 2021.
+Tenure
+Chen Siqing
+Chairman, Executive Director
+Male
+Lu Yongzhen
+September 2024
+September 2021-
+1966
+Male
+Executive Director, Senior Executive Vice President,
+Chief Risk Officer
+Wang Jingwu
+December 2021-December 2024
+1967
+Male
+Executive Director, Senior Executive Vice President
+(2)
+Zheng Guoyu
+1964
+Male
+Chairman of the Board of Supervisors
+Huang Liangbo
+July 2020-July 2023
+1966
+Male
+Vice Chairman, Executive Director, President
+Liao Lin
+May 2019-May 2022
+1960
+July 2021-July 2024
+Notes: (1) Dividend distributed is tax included.
+N/A
+N/A
+Domestic preference share
+Dividend
+distributed(1)
+rate
+Dividend
+Type of preference
+shares
+2019
+2020
+2021
+The table below shows the distribution of dividends on preference shares by the Bank in latest three years:
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "2" as at 31 December 2021.
+(2) Shanghai Tobacco Group Co., Ltd., China National Tobacco Corporation Shandong Branch and China National Tobacco
+Corporation Heilongjiang Branch are all wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance
+Company Limited - Traditional — Ordinary insurance products ―005L CT001 Hu" is managed by China Life Insurance
+Company Limited. "Ping An Life Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by
+Ping An Life Insurance Company of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty
+Insurance Company of China, Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected
+relations or concert party action among the afore-mentioned preference shareholders and among the afore-mentioned
+preference shareholders and top 10 ordinary shareholders.
+subject to
+4.58%
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "2" held by preference shareholders
+in total number (700 million shares) of domestic preference shares of "2".
+As per the resolution and authorization of the General
+Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "2" and Offshore USD
+Preference Shares at the meeting of its Board of Directors
+on 27 August 2021, permitting the Bank to distribute the
+dividends on domestic preference shares "I" on
+24 September 2021 and on the offshore USD preference
+shares on 23 September 2021; the Bank reviewed and
+approved the Proposal on Distribution of Dividends for
+Offshore EUR Preference Shares and "I" at the
+meeting of its Board of Directors on 29 October 2021,
+permitting the Bank to distribute the dividends on domestic
+preference shares "1" on 23 November 2021 and
+on the offshore EUR preference shares on 10 December
+2021.
+Annual Report 2021
+99
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Dividends on the Bank's domestic preference shares "I
+1" and "I" are paid annually in cash, and
+calculated based on the aggregate par value of the issued
+domestic preference shares. Dividends on the Bank's
+domestic preference shares are non-cumulative. Holders of
+domestic preference shares are only entitled to dividends
+at the prescribed dividend rate, but are not entitled to any
+distribution of residual profits of the Bank together with
+the holders of ordinary shares. According to the dividend
+distribution plan in the domestic preference share issuance
+proposal, the Bank distributed dividends of RMB2,061
+million (pre-tax) on the domestic preference share "
+1" at a dividend rate of 4.58% (pre-tax); and distributed
+dividends of RMB2,940 million (pre-tax) on the domestic
+preference share "2" at a dividend rate of 4.2%
+(pre-tax).
+Dividends on the Bank's offshore EUR preference shares
+are paid annually in cash, and calculated based on the
+liquidation preference of the offshore preference shares.
+Dividends on the Bank's offshore EUR preference shares
+are non-cumulative. Holders of offshore EUR preference
+shares are only entitled to dividends at the prescribed
+dividend rate, but are not entitled to any distribution of
+residual profits of the Bank together with the holders of
+ordinary shares. According to the dividend distribution
+plan in the offshore EUR preference share issuance
+proposal, total dividends of EURO.04 billion (pre-tax) on
+the offshore EUR preference shares were distributed in EUR
+at a dividend rate of 6% (after-tax). According to relevant
+laws, when the Bank distributes dividends for offshore
+EUR preference shares, the enterprise income tax shall be
+withheld by the Bank at a rate of 10%. According to the
+requirements of the terms and conditions of the offshore
+EUR preference shares, the Bank paid the relevant taxes,
+included in the dividends for offshore EUR preference
+shares.
+Dividends on the Bank's offshore USD preference shares
+are paid annually in cash, and calculated based on the
+liquidation preference of the offshore preference shares.
+Dividends on the Bank's offshore USD preference shares
+are non-cumulative. Holders of offshore USD preference
+shares are only entitled to dividends at the prescribed
+dividend rate, but are not entitled to any distribution of
+residual profits of the Bank together with the holders of
+ordinary shares. According to the dividend distribution plan
+in the offshore USD preference share issuance proposal,
+total dividends of about USD115.3 million (pre-tax) on the
+offshore USD preference shares were distributed in USD at
+a dividend rate of 3.58% (after-tax). According to relevant
+laws, when the Bank distributes dividends for offshore
+USD preference shares, the enterprise income tax shall be
+withheld by the Bank at a rate of 10%. According to the
+requirements of the terms and conditions of the offshore
+USD preference shares, the Bank paid the relevant taxes,
+included in the dividends for offshore USD preference
+shares.
+Dividend Distribution of Preference Shares
+Non-executive Director
+RMB2,061 million
+Dividend
+distributed(¹)
+RMB2,025 million
+N/A
+N/A
+million
+3.58%
+About USD115.3
+Offshore USD preference
+share(3)
+RMB800 million
+EUR40 million
+USD196 million
+RMB preference shares(2)
+N/A
+N/A
+6.00%
+rate
+4.50%
+RMB2,940 million
+EUR40 million
+EUR40 million
+6.00%
+Offshore EUR, USD and
+RMB2,940 million
+4.20%
+“工行優2"
+Domestic preference share
+“工行優1"
+Dividend
+distributed (¹)
+RMB2,025 million
+rate
+4.50%
+Dividend
+4.20%
+6.00%
+Male
+Dividend
+August 2019-August 2022
+100,000,000
+14.3
+None
+Group Co., Ltd.
+legal person
+preference shares
+BOC International (China)
+State-owned
+Domestic
+70,000,000
+10.0
+Domestic
+None
+legal person
+preference shares
+CCB Trust Co., Ltd.
+State-owned
+Domestic
+70,000,000
+10.0
+None
+legal person
+preference shares
+China National Tobacco
+Corporation
+Co., Ltd.
+Other entities
+State-owned
+preference shares
+Limited
+None
+17.1
+120,000,000
+Domestic
+State-owned
+China Life Insurance Company
+shares
+on sales
+marked
+restrictions
+China Mobile Communications
+Shareholding
+percentage (%)
+the period
+at the end of
+legal person
+preference shares
+State-owned
+Domestic
+112,750,000
+112,750,000
+16.1
+None
+legal person
+1967
+Domestic
+Hwabao Trust Co., Ltd.
+7.1
+2.1
+None
+preference shares
+Domestic
+preference shares
+15,000,000
+2.1
+None
+Non-executive Director
+Dong Yang
+Feng Weidong
+Female
+15,000,000
+August 2021-August 2024
+Non-executive Director
+Male
+1964
+January 2020-January 2023
+Cao Liqun
+Non-executive Director
+Female
+1971
+January 2020-January 2023
+Chen Yifang
+1964
+50,000,000
+Domestic
+Non-executive Director
+None
+preference shares
+legal person
+Other entities
+Shanghai Tobacco Group
+Co., Ltd.
+Domestic
+None
+5.3
+37,250,000
+37,250,000
+30,000,000
+Domestic
+preference shares
+State-owned
+4.3
+preference shares
+None
+preference shares
+Bank of Beijing Co., Ltd.
+BOCOM Schroders Asset
+Management Co., Ltd.
+Ping An Property & Casualty
+Insurance Company of
+China, Ltd.
+Domestic non-state-
+owned legal person
+Domestic non-state-
+owned legal person
+Domestic non-state-
+owned legal person
+Domestic
+None
+20,000,000
+2.9
+Jiangsu International Trust
+Co., Ltd.
+Committee Member
+Feng Weidong
+Committee Member
+Zheng Fuqing
+Committee Member
+Committee Member
+Lu Yongzhen
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Cao Liqun
+Chairman
+Committee Member
+Committee Member Committee Member
+Nout Wellink
+Chairman
+Committee Member
+Committee Member
+Shen Si
+Yang Siu Shun
+Committee Member
+Committee Member
+Anthony Francis Neoh
+Committee Member
+Committee Member
+Committee Member
+Dong Yang
+Committee Member
+Committee Member
+Committee Member
+Chen Yifang
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Transactions
+Committee Member
+Related Party
+Corporate
+Social
+Responsibility
+Special Committees under the Board of Directors
+As at the disclosure date of the results, the composition of special committees of the Board of Directors of the Bank is as
+follows:
+The Board of Directors of the Bank has established eight special committees, namely, the Strategy Committee, the Corporate
+Social Responsibility and Consumer Protection Committee, the Audit Committee, the Risk Management Committee, the
+Nomination Committee, the Compensation Committee, the Related Party Transactions Control Committee and the US Risk
+Committee. Except the Strategy Committee and the Corporate Social Responsibility and Consumer Protection Committee,
+chairmen of all the other committees are assumed by Independent Non-executive Directors. More than half of the members
+of the Audit Committee, the Nomination Committee, the Compensation Committee and the Related Party Transactions
+Control Committee are Independent Non-executive Directors.
+Special Committees of the Board of Directors
+Special Committees of the Board of Directors
+Corporate Governance Report
+115
+Annual Report 2021
+Appointment
+-
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors and Senior Management
+and Removal".
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+(2)
+Notes: (1) "Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+Committee Member
+Committee Member
+Mei Yingchun
+¿Fuging 33 1/13 88 4455
+and Consumer
+Strategy
+Protection
+Audit
+Wang Jingwu
+Committee Member
+Committee Member Committee Member
+Zheng Guoyu
+Committee Member
+Chairman
+Committee Member
+Liao Lin
+Chairman
+Committee Member Committee Member
+Chen Siging
+US Risk
+Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Risk
+Management
+Committee
+Committee
+Committee
+Committee
+Directors
+Committee
+Committee Member
+During the reporting period, the Bank refined the modern
+corporate governance framework, mechanism and culture.
+The Bank further developed the corporate governance
+structure which was led by the Bank's Party Committee
+with the Board of Directors acting as the decision-
+making organ, the Board of Supervisors responsible for
+compliance supervision, and the Management in charge
+of operation. Under the working guideline of "adhere to
+the guidance of the Party building theory and exercising
+rigorous corporate governance", the Bank strengthened
+the organic connection between the rules of procedure of
+the Party Committee and the decision-making mechanism
+for corporate governance, deeply applied its institutional
+advantages to the construction of modern governance
+system, and constantly improved the governance efficiency
+and high-quality development capability. The Board of
+Directors continued to improve corporate frameworks
+and strengthen strategic guidance. In alignment with
+the national "14th Five-Year Plan" and the long-range
+objectives through the year 2035, the Board of Directors
+Chairman
+110
+10.32
+ICBC
+3.33
+13.65
+No
+Yes
+Yes
+16.32
+Qu Qiang
+16.32
+Directors, Supervisors and Senior Management
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2) During the reporting period, the total remuneration amount paid to Directors, Supervisors and Senior Management members
+was RMB14,157.7 thousand. According to the requirements of relevant government authorities, the total final remuneration
+payable to the Chairman of the Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors,
+Shareholder Supervisors and other Senior Management members is still subject to final confirmation by relevant government
+authorities. Additional details of remuneration will be disclosed when they have been determined.
+(3) In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the President
+and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal results.
+Accordingly, the Bank accrued RMB16 thousand, RMB9.4 thousand, RMB6.5 thousand, RMB5 thousand and RMB3.6 thousand
+for Mr. Chen Siqing, Mr. Liao Lin, Mr. Wang Jingwu, Mr. Zhang Wenwu and Mr. Xu Shouben respectively, as additional
+contribution to the Annuity Plan in 2021.
+(4) During the reporting period, Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang, Mr. Zheng Fuqing and Ms.
+Mei Yingchun did not obtain remuneration from the Bank during their tenure as directors of the Bank.
+(5) Fees of Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding their
+remuneration with the Bank in accordance with the employee remuneration system.
+(6) As the Bank's Independent Non-executive Directors served as directors or senior management of other legal persons or
+organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations became
+related parties of the Bank. During the reporting period, Independent Non-executive Directors obtained remuneration from such
+related parties. Except to the extent of the afore-mentioned circumstances, none of the Bank's Directors, Supervisors and Senior
+Management was paid by the Bank's related parties during the reporting period.
+(7)
+For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+No
+Annual Report 2021
+Mei Yingchun
+Yang Guozhong
+No
+No
+Directors Leaving Office
+No
+No
+Guan Xueqing
+101.02
+29.43
+130.45
+Zheng Fuqing
+No
+96.04
+124.94
+No
+Song Jianhua
+96.04
+27.97
+124.01
+No
+Directors, Supervisors and Senior Management Leaving Office
+Xiong Yan
+Chairman
+111
+Overview of Corporate Governance
+Audit
+Protection
+Committee
+and Consumer
+Responsibility
+Corporate
+Social
+Strategy
+Committee
+During the reporting period, the performance of duties by the special committees of the Board of Directors is set out below:
+Corporate Governance Report
+ICBC
+Committee
+116
+Committee Member
+Committee Member
+Fred Zuliu Hu
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Chairman
+Corporate Governance Report
+Primary Responsibilities of the Strategy Committee The Strategy Committee is mainly responsible for
+considering the Bank's strategic development plan, risk events that bear material influence on the overall
+situation, business and institutional development plan, major investment and financing plan, annual social
+responsibility report and other major matters critical to the Bank's development, making recommendations to
+the Board of Directors, and examining and assessing the soundness of the corporate governance framework
+to ensure financial reporting, risk management and internal control are compliant with corporate governance
+criteria of the Bank.
+Primary Responsibilities of the Corporate Social Responsibility and Consumer Protection Committee
+The Corporate Social Responsibility and Consumer Protection Committee is mainly responsible for
+considering the Bank's fulfillment of social responsibilities with respect to environment, society, corporate
+governance, precision poverty alleviation, and corporate culture, the strategy, policy and target of consumer
+protection, green finance strategy, the development plan, basic policy, annual operating plan and assessment
+method of inclusive finance, and making recommendations to the Board of Directors.
+Corporate Governance Framework
+coordinated the implementation of the "Three Tasks" of
+financial work. Focusing on key missions such as service
+for the high-quality development in manufacturing, self-
+reliance and self-improvement in science and technology,
+rural revitalization, inclusive finance, and "carbon peak
+and carbon neutrality", the Board of Directors formulated
+overall strategic development plans to provide more
+adaptive, competitive, and inclusive financial services.
+The Board of Supervisors gave full play to its supervisory
+function. It focused on how the Board of Directors and the
+Senior Management implemented the important decisions
+and arrangements of the Party Central Committee and
+the State Council, national economic and financial policies
+and regulatory requirements, etc. The Board of Supervisors
+conducted sound supervision on duty performance,
+financial management, risk management, internal control
+and compliance and other aspects, putting its important
+role in corporate governance into good use. There is
+no material divergence between the actual corporate
+governance of the Bank, relevant laws and administrative
+regulations, and the corporate governance-related rules
+issued by CSRC.
+Strategy
+Committee
+Corporate Social
+Responsibility and
+Consumer Protection
+Committee
+ICBC
+118
+The Bank has established a vertical and independent internal audit management system responsible and
+reporting to the Board of Directors. The Board of Directors regularly reviews the internal audit plan and
+hears internal audit reports on internal audit activities, audit supporting measures, internal audit team
+building, etc., thus effectively performing the function of risk management. The Audit Committee examines,
+monitors and assesses the internal audit work of the Bank, supervises the internal audit rules and their
+implementation, and makes assessment of audit procedures and results of the internal audit department.
+It is also responsible for urging the Bank to ensure adequate resources for the internal audit department
+and coordinating the communication between the internal audit department and external auditors. The
+internal audit department is accountable to and reports to the Board of Directors, is guided by the Board of
+Supervisors and is under the examination, supervision and assessment of the Audit Committee. For details of
+the internal audit, please refer to the section headed "Corporate Governance Report - Internal Audit".
+Effectiveness of the internal audit function
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of
+the Board of Directors held eight meetings on 29 January, 26 March, 29 April, 21 June, 27 August, 24
+September, 29 October and 25 November 2021, respectively. At these meetings, the Strategy Committee
+considered and approved 22 proposals, and heard four reports. To promote the coordination between
+bank-wide strategic planning and national strategies, the Strategy Committee considered and approved the
+Bank's 2021-2023 Development Strategy Plan as well as four sub-plans on risk management, international
+development, internal audit development, and group data governance and intelligent application. The
+Strategy Committee also paid close attention to strategic capital allocation, and reviewed and approved
+several proposals including the proposals on issuing tier 2 capital instruments and the 2020 capital adequacy
+ratio management report, providing a driving force for the Bank to promote sustainable development,
+enhance capital strength, and strengthen risk resistance capacity on all fronts.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing
+internal control, assessing its effectiveness and truthfully disclosing internal control assessment reports
+according to the standard system for enterprise internal control. The objective of the internal control of the
+Bank is to reasonably assure the compliance of its operation and management with relevant laws, safety of
+its assets, as well as the authenticity and completeness of its financial reports and relevant information, in
+order to enhance operation efficiency and results, and to facilitate the realization of its development strategy.
+Due to inherent limitation of internal control, only reasonable assurance can be provided for the afore-
+mentioned objectives. The Board of Directors and the Audit Committee have reviewed and approved the
+2021 Internal Control Assessment Report of the Bank. For details of the Bank's internal control, please refer
+to the section headed "Corporate Governance Report - Internal Control".
+Examining internal control system
+During the preparation and audit of the 2021 financial statements, the Audit Committee discussed and
+agreed with the external auditors on matters such as audit schedule and progress arrangement, followed
+the status of external audit and conducted supervision over relevant work at appropriate time by means
+of hearing reports and holding informal discussions, and reviewed the unaudited and preliminarily audited
+annual financial statements respectively. The Audit Committee held a meeting on 29 March 2022, and
+considered that the 2021 financial statements truly, accurately and completely reflected the financial position
+of the Bank.
+The Audit Committee periodically reviewed the financial reports of the Bank. It had reviewed and submitted
+to the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank.
+It also organized and conducted an internal control assessment of the Group for 2020 and engaged
+external auditors to audit the assessment report of the Bank on internal control in accordance with the
+relevant regulatory requirements. Additionally, it enhanced communication with external auditors, attached
+importance to the supervision of external auditors and heard several reports of external auditors concerning
+audit results, and management proposals. The Audit Committee was also concerned with the compliant
+development of overseas institutions and heard related branches' reports on internal audit work.
+Reviewing periodic reports
+Corporate Governance Report
+117
+Annual Report 2021
+Primary Responsibilities of the Audit Committee The Audit Committee is mainly responsible for
+constantly overseeing the Bank's internal control system, and supervising, inspecting and evaluating financial
+information and internal audit of the Bank, proposing the engagement or replacement of external auditors,
+reviewing the reports of external auditors, and coordinating the communication between the internal audit
+departments and external auditors, and assessing mechanisms for the Bank's staff to report misconducts
+in financial statements, internal control, etc., and assessing the mechanism for the Bank to conduct
+independent and fair investigations and take appropriate actions in relation to the reported matters.
+Performance of the Audit Committee During the reporting period, the Audit Committee held five
+meetings on 29 January, 25 March, 28 April, 26 August and 28 October 2021, respectively. At these
+meetings, the Audit Committee considered and approved 10 proposals, and heard 22 reports. The Audit
+Committee continued to oversee the Bank's internal control system, reviewed and approved the Bank's
+annual internal control assessment report, and heard reports on internal control audit results to improve the
+Group's compliant operation. It inspected and supervised the implementation of internal and external audits,
+considered and approved proposals on the internal audit plan and the amendment to the evaluation plan
+of annual performance of external auditors, heard reports on the implementation of internal audits and the
+summary of external audit to promote the formation of an effective communication mechanism between
+internal and external audits.
+Performance of the Corporate Social Responsibility and Consumer Protection Committee During
+the reporting period, the Corporate Social Responsibility and Consumer Protection Committee held three
+meetings on 25 March, 28 April and 26 August 2021, respectively. At these meetings, the Corporate
+Social Responsibility and Consumer Protection Committee considered and approved five proposals. It
+fully performed the political missions and social responsibilities as a major state-owned bank, considered
+and approved the proposals on the donation of anti-epidemic materials in 2020 and the application for
+temporary authorization limit for external donations, etc., providing continuous support for the epidemic
+prevention and control, charity, culture, education and other public-interested activities. The committee
+focused on the development of green finance and inclusive finance, considered and approved the proposals
+on the implementation of green finance and the 2021 annual business plan for inclusive finance, and actively
+practiced China's green development concept and sustainable development strategy.
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. The Audit Committee
+performed its function of examining the Bank's internal control system through reviewing the administrative
+rules and regulations and their implementation, and examined and assessed the compliance and effectiveness
+of major operating activities of the Bank.
+6/7
+Board Strategy
+2/2
+Pursuant to Code Provision C.2.1 of the Corporate
+Governance Code (Appendix 14 to the Hong Kong Listing
+Rules) and the Articles of Association of the Bank, the roles
+of Chairman and President should be held by two persons,
+and the Chairman shall not concurrently hold the position
+of legal representative or chief responsible officer of the
+controlling shareholder.
+Chairman and President
+Mr. Chen Siqing was Chairman of the Board of Directors.
+Mr. Liao Lin was Vice Chairman of the Board of Directors.
+The Executive Directors have worked in the areas of
+banking and management for a long time, possesses
+extensive professional expertise and experience in those
+areas and are familiar with operation and management
+of the Bank. Non-executive Directors have worked in the
+fiscal, economic, financial and governing sectors for many
+years, and they have rich practical experience and relatively
+high level of understanding of policies and theories.
+All of the Independent Non-executive Directors are
+prestigious Chinese or foreign experts in their respective
+areas, e.g. economy, financial supervision, finance, audit
+and law, and they are familiar with Chinese and foreign
+regulatory rules and have a good knowledge of corporate
+governance, finance and bank management. The number
+of Independent Non-executive Directors of the Bank
+accounted for more than one third of the total members of
+the Board of Directors, complying with relevant regulatory
+requirements.
+The Bank formulated relatively complete procedures
+for nominating and electing Directors. With diversified
+backgrounds, the Directors of the Bank complemented
+each other on one hand with regard to their expertise,
+professional competence and experience, which ensured
+scientific decision-making of the Board of Directors. As at
+the disclosure date of the results, the Board of Directors of
+the Bank consisted of 14 directors, including four Executive
+Directors: Mr. Chen Siqing, Mr. Liao Lin, Mr. Zheng Guoyu
+and Mr. Wang Jingwu; five Non-executive Directors: Mr. Lu
+Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen
+Yifang and Mr. Dong Yang; and five Independent Non-
+executive Directors: Mr. Anthony Francis Neoh, Mr. Yang
+Siu Shun, Mr. Shen Si, Mr. Nout Wellink and Mr. Fred Zuliu
+Hu.
+Composition of the Board of Directors
+The Board of Directors of the Bank earnestly and fully
+implemented the resolutions adopted by the Shareholders'
+General Meeting during the reporting period.
+Implementation of Resolutions of the
+Shareholders' General Meeting by the
+Board of Directors
+Corporate Governance Report
+113
+Chairman Mr. Chen Siqing is the legal representative of the
+Bank, and is responsible for leading the Board of Directors
+in considering and formulating business development
+strategies, risk management, internal control and other
+significant matters of the Bank.
+Annual Report 2021
+Board of Directors and Special Committees
+Responsibilities of the Board of Directors
+During the reporting period, the Bank convened the
+Annual General Meeting for the Year 2020 on 21 June
+2021, the First Extraordinary General Meeting of 2021
+on 29 July 2021, and the Second Extraordinary General
+Meeting of 2021 on 25 November 2021. The afore-
+mentioned Shareholders' General Meetings were convened
+and held in strict compliance with relevant laws and
+regulations and the Articles of Association of the Bank.
+The Bank made announcements on the resolutions and
+disclosed legal opinions in a timely manner in accordance
+with regulatory requirements. For details of the above
+meetings, please refer to the announcements of the Bank
+dated 21 June 2021, 29 July 2021 and 25 November
+2021 respectively on the website of SSE, the "HKEXnews"
+website of HKEX and the website of the Bank.
+Convening of the Shareholders' General
+Meeting
+As the organ of power of the Bank, the Shareholders'
+General Meeting involves all shareholders. The
+Shareholders' General Meeting is responsible for, among
+others, deciding on business policies and significant
+investment plans of the Bank; examining and approving
+the Bank's annual financial budget, final account
+proposals, plans for profit distribution and loss make-up;
+electing and replacing directors, supervisors appointed
+from the shareholder representatives and external
+supervisors; examining and approving work report of
+the Board of Directors and work report of the Board of
+Supervisors; adopting resolutions on merger, division,
+dissolution, liquidation, change of corporate form, increase
+or decrease of the Bank's registered capital, issuance of
+corporate bonds or other securities and public listing,
+repurchase of the shares and issuance of preference shares;
+and amending the Articles of Association of the Bank.
+Responsibilities of the Shareholders' General
+Meeting
+Shareholders' General Meeting
+With regard to the compliance with Article C.2.1 of the
+Corporate Governance Code (Appendix 14 to the Hong
+Kong Listing Rules), Mr. Gu Shu resigned from his position
+as President of the Bank on 31 December 2020. The Board
+of Directors of the Bank deliberated and decided that Mr.
+Chen Siqing, Chairman of the Board of Directors, should
+perform the duties of acting President from the date when
+Mr. Gu Shu does not perform the management duties in
+the Bank due to job change to the date when the new
+President appointed by the Board of Directors of the Bank
+formally takes office. On 16 March 2021, Mr. Liao Lin took
+office as President of the Bank, and since that date, Mr.
+Chen Siqing had ceased to serve as acting President.
+During the reporting period, save as disclosed below, the
+Bank fully complied with the principles, code provisions
+and recommended best practices stipulated in the
+Corporate Governance Code (Appendix 14 to the Hong
+Kong Listing Rules).
+Corporate Governance Code
+As the decision-making organ of the Bank, the Board of
+Directors of the Bank is accountable to, and shall report
+its work to, the Shareholders' General Meeting. The Board
+of Directors is responsible for, among others, convening
+the Shareholders' General Meeting; implementing
+the resolutions of the Shareholders' General Meeting;
+deciding on the business plans, investment proposals
+and development strategies of the Bank; formulating
+annual financial budget and final accounts of the
+Bank; formulating plans for profit distribution and loss
+recovery of the Bank; formulating plans for the increase
+or decrease of the Bank's registered capital, capital
+replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such
+as risk management system and internal control system,
+and supervising the implementation of such systems;
+appointing or removing President and the Board Secretary,
+and appointing or removing Senior Executive Vice
+Presidents and other senior management members (except
+the Board Secretary) who shall be appointed or removed
+by the Board of Directors under relevant laws according
+to the nomination of the President and deciding on their
+compensation, bonus and penalty matters; deciding on or
+authorizing the President to decide on the establishment
+of relevant offices of the Bank; regularly evaluating and
+improving corporate governance of the Bank; managing
+information disclosure of the Bank; and supervising and
+ensuring the President and other Senior Management
+members to perform their management duties effectively.
+The Bank has made constant efforts to improve the
+corporate governance and checks and balances mechanism
+comprising the Shareholders' General Meeting, the Board
+of Directors, the Board of Supervisors and the Senior
+Management featuring clearly-defined responsibilities
+and accountability, coordination and effective checks and
+balances, and to optimize responsibilities of the authority
+organ, decision-making organ, supervisory organ and
+executive organ. As a result, the corporate governance
+operation mechanism with scientific decision-making
+process, effective supervision and steady operation has
+been in place.
+President Mr. Liao Lin is responsible for the daily
+management of the business operations of the Bank. The
+President is appointed by and accountable to the Board of
+Directors, and performs his responsibilities as stipulated in
+the Articles of Association of the Bank and as authorized
+by the Board of Directors.
+―
+Risk
+Management
+Audit
+Protection
+General
+and Consumer
+Shareholders'
+Related Party
+Corporate
+Social
+Responsibility
+Attendances in person/Number of meetings that should be attended
+Special Committees of the Board of Directors:
+Mr. Liao Lin took office as President of the Bank on 16
+March 2021. Please refer to the section headed "Corporate
+Governance Report Corporate Governance Code" for
+details.
+The attendance of each of the Directors in Shareholders'
+General Meetings and meetings of the Board of Directors
+and the special committees of the Board of Directors
+during the reporting period is set out below:
+The Board of Directors highly valued the fulfillment of
+social responsibility and endeavored to maximize the
+comprehensive value of economy, environment and
+society. It reviewed and approved proposals on the
+Donations for extreme heavy rainfall in Henan Province, the
+Application for Temporary Authorization Limit for External
+Donations, the Corporate Social Responsibility Report 2020
+(ESG Report), the 2021 Business Plan for Inclusive Finance,
+the Report on the Implementation of Green Finance, the
+2020 Work Report on and 2021 Work Plan for Consumer
+Protection, etc.
+Corporate Governance Report
+ICBC
+114
+The Board of Directors improved asset management and
+continued to meet the capital needs of supporting the
+real economy and the regulatory requirements on capital
+management. It reviewed and approved proposals on the
+2020 Risk and Capital Adequacy Assessment Report, the
+2020 Capital Adequacy Ratio Report, issuing eligible tier 2
+capital instruments, etc.
+The Board of Directors attached great importance to the
+enterprise risk management, continuously improved risk
+management systems, and prevented the systemic risk
+with all strength. It revised the Rules on Enterprise Risk
+Management and the Measures for the Reputational Risk
+Management, reviewed and approved proposals including
+the 2020 and 2021 Interim Risk Management Reports,
+the Liquidity Risk Management Strategy for 2021, the
+Management Strategy of Interest Rate Risk in the Banking
+Book for 2021, and heard reports such as Report on
+Technology Risk Management in 2020.
+The Board of Directors made scientific decisions on, and
+reviewed and approved such proposals as development
+strategy plans for 2021-2023 and establishment of the
+Rural Revitalization Office in accordance with economic
+and financial policies and major objectives, including
+development strategies, preventing and controlling
+financial risks, serving the real economy, deepening
+inclusive finance, and supporting rural revitalization.
+During the reporting period, the Board of Directors of
+the Bank held 13 meetings on 29 January, 25 February,
+26 March, 29 April, 21 June, 8 July, 19 July, 24 July, 27
+August, 24 September, 29 October, 25 November and
+17 December 2021, respectively. At these meetings, the
+Board of Directors considered 78 proposals, and heard 30
+reports.
+Meetings of the Board of Directors
+For major proposals reviewed by the Board of Directors,
+please refer to the announcements of the Bank on the
+website of SSE, the "HKEXnews" website of HKEX or the
+website of the Bank.
+Transactions
+Corporate Governance Report
+112
+Committee
+Consumer Protection
+Committee
+Promotion
+Personal Banking
+Committee
+Management
+Asset & Liability
+Management
+Corporate &
+Investment Banking
+Promotion Committee
+Senior
+US Risk
+Committee
+Related Party
+Transactions Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Risk Management
+Committee
+Board of
+Supervisors
+Primary reporting line
+Secondary reporting line
+2222
+General Meeting
+Audit Committee
+ICBC
+Institutional Banking
+Risk
+Management
+Note: The above is the corporate governance framework chart as of the disclosure date of this report.
+Overseas
+Institutions
+Domestic
+Institutions
+Directly
+Controlled
+Institutions
+Supporting
+Departments
+Comprehensive
+Administration
+Departments
+Risk
+Management
+Department
+Profitability
+Units
+Marketing
+Management
+Departments
+Promotion
+Committee
+Internal Audit
+Sub-bureau
+Internal Audit
+Promotion Committee
+and Rural
+Revitalization
+Inclusive Finance
+Service
+Management
+Committee
+Financial Assets
+and Digital
+Development
+Committee
+Financial Technology
+Committee
+Bureau
+Nomination Compensation
+Control
+US Risk
+5/5
+2/2
+6/7
+4/4
+5/5
+| |
+13/13
+3/3
+Yang Siu Shun
+5/5
+8/8
+3/3
+Anthony Francis Neoh
+Independent Non-executive Directors
+Dong Yang ........
+3/3
+5/5
+1/1
+Chen Yifang
+5/5
+12/13
+5/5
+4/4
+4/4
+5/5
+3/5
+6/8
+99
+11/13
+3/3
+Fred Zuliu Hu
+3/3
+8/8
+13/13
+7/7
+3/3
+5/5
+4/4
+2/2
+4/4
+5/5
+13/13
+3/3
+Shen Si
+4/5
+Nout Wellink
+5/5
+4/4
+5/5
+5/5
+3/3
+7/7
+13/13
+3/3
+Liao Lin
+6/8
+11/13
+3/3
+Zheng Guoyu
+Chen Siging
+Committee
+Committee
+Committee Committee Committee
+Committee
+Committee
+Committee
+of Directors
+Meeting
+Directors
+Executive Directors
+Wang Jingwu
+1/1
+4/4
+3/3
+13/13
+3/3
+Cao Liqun
+7/7
+4/4
+5/5
+13/13
+3/3
+Feng Weidong
+2/2
+-
+4/4
+8/8
+13/13
+3/3
+Lu Yongzhen
+Non-executive Directors
+1/2
+1/1
+1/1
+4/4
+126.12
+28.90
+97.70
+41.03
+10.06
+30.97
+Huang Liangbo
+No
+81.12
+19.70
+Zheng Guoyu
+61.42
+No
+81.99
+20.05
+61.94
+Chen Siging
+(5)=(1)+(2)+(3)+(4)
+(4)
+Liao Lin
+(3)
+18.58
+25.06
+Anthony Francis Neoh
+Dong Yang
+Chen Yifang
+Cao Liqun
+Yes
+Feng Weidong
+Yes
+6.48
+Lu Yongzhen
+75.10
+19.36
+55.74
+Wang Jingwu
+No
+No
+22
+No
+Yang Siu Shun
+(2)
+parties or not
+Remuneration from the Bank
+Annual Remuneration
+Directors, Supervisors and Senior Management
+109
+Annual Report 2021
+On 25 February 2021, the Board of Directors appointed
+Mr. Liao Lin as President of the Bank, and his qualification
+was approved by CBIRC in March 2021. Mr. Liao Lin
+ceased to act as Chief Risk Officer of the Bank after he
+took office as President. On 29 April 2021, the Board of
+Directors appointed Mr. Zhang Weiwu as Senior Executive
+Vice President of the Bank, and his qualification was
+approved by CBIRC in June 2021. On 24 September 2021,
+the Board of Directors appointed Mr. Zheng Guoyu as
+Senior Executive Vice President of the Bank and Mr. Wang
+Jingwu as Chief Risk Officer of the Bank.
+Senior Management Members
+Contribution
+In March 2021, Mr. Yang Guozhong ceased to act as
+Shareholder Supervisor and Chairman of the Board of
+Supervisors of the Bank due to change of job assignments.
+In November 2021, Mr. Qu Qiang ceased to act as External
+Supervisor of the Bank due to change of job assignments.
+Supervisors
+In February 2021, Ms. Mei Yingchun ceased to act as
+Non-executive Director of the Bank due to expiration of
+her term of office. In January 2022, Mr. Zheng Fuqing
+ceased to act as Non-executive Director of the Bank due to
+expiration of his term of office.
+On 25 February 2021, the Board of Directors of the Bank
+elected Mr. Liao Lin as Vice Chairman of the Bank, and
+his qualification was approved by CBIRC in March 2021.
+At the Annual General Meeting for the Year 2020 held
+on 21 June 2021, Ms. Chen Yifang was elected as Non-
+executive Director of the Bank, and her qualification
+was approved by CBIRC in August 2021. At the First
+Extraordinary General Meeting of 2021 held on 29 July
+2021, Mr. Wang Jingwu was elected as Executive Director
+of the Bank, and his qualification was approved by
+CBIRC in September 2021. At the Second Extraordinary
+General Meeting of 2021 held on 25 November 2021,
+Mr. Zheng Guoyu was elected as Executive Director of
+the Bank, and his qualification was approved by CBIRC
+in December 2021; Mr. Dong Yang was elected as Non-
+executive Director of the Bank, and his qualification was
+approved by CBIRC in January 2022. On 30 March 2022,
+the Board of Directors of the Bank nominated Mr. Chen
+Siqing as the candidate for Executive Director of the Bank
+and to be re-elected as Executive Director of the Bank,
+and agreed him to consecutively serve as Chairman of the
+Bank after his re-election as Executive Director is approved
+by the Shareholders' General Meeting of the Bank. The
+appointment of Mr. Chen Siqing as Executive Director of
+the Bank shall be submitted to the Shareholders' General
+Meeting of the Bank for deliberation and voting, and his
+new term of office shall start from the date of review and
+approval by the Shareholders' General Meeting.
+Directors, Supervisors and Senior Management
+Directors
+Appointment and Removal
+Board of
+Directors
+At the First Extraordinary General Meeting of 2021 held
+on 29 July 2021, Mr. Huang Liangbo was elected as
+Shareholder Supervisor of the Bank, and his term of office
+as Shareholder Supervisor of the Bank started from the
+day of approval by the Shareholders' General Meeting,
+and his term of office as Chairman of the Board of
+Supervisors of the Bank took effect simultaneously. At the
+Second Extraordinary General Meeting of 2021 held on
+25 November 2021, Mr. Zhang Jie was elected as External
+Supervisor of the Bank, and his term of office as External
+Supervisor of the Bank started from the day of approval by
+the Shareholders' General Meeting.
+(1)
+by the employer
+to social insurance,
+Obtain
+remuneration
+before tax
+income
+Fees
+insurances
+(before tax)
+Name
+other related
+Unit: RMB10,000
+remuneration
+Total
+Other
+monetary
+annuities, and
+additional medical
+paid
+Remuneration
+housing allowance,
+from shareholder
+entities or
+28.42
+Shareholders'
+222
+No
+5.00
+5.00
+No
+No
+122
+5.00
+5.00
+Huang Li
+121.74
+27.79
+93.95
+Yes
+41.00
+41.00
+Wu Xiangjiang
+Fred Zuliu Hu
+Shen Bingxi
+2.43
+57.61
+15.80
+41.81
+Zhang Weiwu
+75.10
+19.36
+55.74
+Xu Shouben
+75.10
+19.36
+55.74
+Zhang Wenwu
+No
+No
+2.43
+Zhang Jie
+No
+Zhang Wei
+47.00
+47.00
+Wang Bairong
+Yes
+Yes
+Yes
+52.00
+52.00
+Yes
+Shen Si
+47.00
+Yes
+47.00
+47.00
+Yes
+47.00
+Nout Wellink
+Deloitte Touche Tohmatsu Certified Public Accountants
+LLP was the domestic auditors of the Bank for the financial
+statements audit in 2021, and Deloitte Touche Tohmatsu'
+was the international auditors of the Bank for the financial
+statements audit in 2021. Deloitte Touche Tohmatsu
+Certified Public Accountants LLP was also the auditors of
+internal control of the Bank in 2021. KPMG Huazhen LLP¹
+and KPMG resigned from the positions of providers of
+audit services for the Bank after serving a maximum term
+of eight consecutive years from 2013 to 2020.
+1 Deloitte Touche Tohmatsu Certified Public Accountants LLP and KPMG Huazhen LLP are Recognized Public Interest Entity Auditor under
+Hong Kong's Financial Reporting Council Ordinance. Deloitte Touche Tohmatsu and KPMG are Registered Public Interest Entity Auditor
+under Hong Kong's Financial Reporting Council Ordinance.
+Annual Report 2021
+127
+126
+Internal Control Evaluation and Defects
+The Board of Directors of the Bank conducted an
+assessment on the effectiveness of the Group's internal
+control during the reporting period in accordance with
+the Basic Standard for Enterprise Internal Control and
+its supporting guidelines issued by five ministries and
+commissions including MOF, and relevant regulatory
+requirements of SSE and CBIRC. No significant or material
+deficiencies were detected in the Bank's internal control
+system during the assessment. Risks that may arise from
+ordinary deficiencies are controllable and corrective actions
+have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives
+of the Bank. The Bank had maintained effective internal
+control in all material aspects in accordance with the
+standard system for enterprise internal control and relevant
+rules.
+While disclosing the annual report, the Bank also disclosed
+the 2021 Internal Control Assessment Report of Industrial
+and Commercial Bank of China Limited in accordance
+with the requirements of MOF, CSRC and SSE. The report
+stated that the Bank had maintained effective internal
+control over financial reporting in all material aspects
+in accordance with the standard system for enterprise
+internal control and relevant rules as at 31 December 2021
+(benchmark date). Deloitte Touche Tohmatsu Certified
+Public Accountants LLP has audited the effectiveness of
+the Bank's internal control over financial reporting as at
+31 December 2021 and issued the standardized audit
+report on internal control. For details, please refer to the
+announcements published by the Bank on the website of
+SSE, the "HKEXnews" website of HKEX and the website of
+the Bank.
+Internal Control Assessment Report and
+Internal Control Audit
+development of data assets, and boosted the collection,
+processing and analysis of information, ensuring smooth
+and effective internal and external communication. The
+Bank deeply coordinated supervision and inspection,
+optimized the internal control evaluation system, and
+strengthened the dual closed-loop remediation of
+problems, making all-round efforts to implement the new
+accountability mechanism for violations, and enhancing the
+synergistic supervision of the "three lines of defense", in
+an endeavor to ensure stable operations.
+During the reporting period, the Bank continued to
+optimize its internal control mechanism for higher
+quality and efficiency of the Group. The Bank formulated
+and implemented the 2021-2023 Development Plan
+for Internal Control System and continuously refined
+the internal control environment. The Bank improved
+the "9+X" risk assessment technologies and methods,
+focused on case and compliance risk control, and
+enhanced prospective risk identification and response
+capabilities. The Bank optimized the system governance
+mechanism and authorization management, strengthened
+the management on key positions and personnel, and
+improved the process and system management for key
+areas and business links, thus developing better capacities
+in the process control of risk. The Bank advanced the
+The Board of Directors is responsible for formulating
+the basic regulations for internal control and supervising
+the implementation of such regulations. The Audit
+Committee of the Board of Directors supervises the
+development of the internal control system and evaluates
+the compliance and effectiveness of the major operation
+and management activities of the Bank. The Bank has set
+up the Internal Audit Bureau and the Internal Audit Sub-
+bureau, which adopt a hierarchical management system
+and are responsible to and report to the Board of Directors.
+The Senior Management of the Bank is responsible for
+formulating systematic policies, procedures and methods,
+as well as taking risk control measures. Under the Senior
+Management, the Operational Risk and Internal Control
+Management Committee subordinated to the Risk
+Management Committee, performs the responsibilities
+related to internal control and evaluates the sufficiency
+and effectiveness of internal control. The Head Office
+and branches have internal control and compliance
+departments which are responsible for the organization,
+promotion and coordination of internal control.
+There was no factor that affected the assessment
+conclusion of internal control effectiveness from the
+benchmark date to the issuance date of the internal control
+assessment report.
+Engagement of Auditors
+Internal Audit Bureau
+During the reporting period, internal audit of the Bank
+actively adapted to the changes in the risk management
+During the reporting period, the Bank acted on the
+regulatory requirements on the industry, implemented
+risk-oriented audit activities and fully accomplished the
+annual audit plan according to the development strategies
+and central tasks of the Bank. The audit activities covered
+domestic and overseas key institutions of the Group, major
+areas, key processes and the main responsible persons
+of domestic and overseas institutions. The audit activities
+focused on the Bank's performance in supporting national
+policies, meeting regulatory requirements, strengthening
+risk prevention and control, promoting strategy
+implementation and other aspects, covering such key areas
+as financial benefit, credit business, emerging business,
+FinTech, operation management, capital management
+and internal control. The Bank also paid close heed to and
+made full use of audit findings and recommendations,
+with the aim of continuously improving risk management,
+internal control and corporate governance.
+Secondary reporting line
+Primary reporting line
+Beijing Tanin Shenyang Shanghai Nariling Wuhan Guangzhou Chengdu Kumming Vie
+Board of Supervisors
+ICBC
+Audit Committee
+Board of Directors
+Senior Management
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Corporate Governance Report
+Internal Audit
+Internal Control
+conditions, properly responded to the COVID-19 pandemic,
+refined the audit management mechanism, optimized the
+audit mode, accelerated digital transformation, promoted
+the deep integration between technologies and businesses,
+improved audit efficiency and value, strengthened the
+audit team's ability to perform duties, and constantly
+enhanced the audit service capacity and professionalism.
+Postal code: 100140
+An extraordinary general meeting should be convened
+within two (2) months from the date when shareholders
+holding more than ten percent (10%) of the voting
+shares of the Bank, either individually or jointly, request
+to convene in writing. Proposing shareholders shall have
+the right to request the Board of Directors in writing to
+convene an extraordinary general meeting. The Board of
+Directors shall make a written response as to whether
+or not it agrees to convene such a meeting within ten
+(10) days upon receipt of the request in accordance with
+laws, administrative regulations, rules and the Articles of
+Association of the Bank. Reasonable expenses incurred
+from the case where shareholders convene the meeting
+by themselves due to the failure of the Board of Directors
+to convene the meeting shall be borne by the Bank, and
+deducted from the payment to those negligent directors.
+E-mail: ir@icbc.com.cn
+Shareholders who hold more than three percent (3%)
+of shares of the Bank, either individually or jointly, may
+prepare an interim proposal and submit it in writing to the
+Board of Directors ten (10) days before the Shareholders'
+General Meetings convened. The Board of Directors shall
+issue a supplementary notice for the Shareholders' General
+Meeting within two (2) days upon receipt of the proposal
+and submit such proposal to the Shareholders' General
+Meeting for approval.
+Submitting Interim Proposals for the
+Shareholders' General Meeting
+Powers and Functions of the Senior
+Management
+The powers of the Board of Directors and the Senior
+Management are separated in strict compliance with the
+Articles of Association and other corporate governance
+documents of the Bank. During the reporting period, the
+Bank made an inspection on the implementation of the
+plan on authorization of the Board of Directors to the
+President, and no matter was found to be beyond the
+approval authority of the President.
+Putting Forward Suggestions and
+Reviewing Documents
+Shareholders are entitled to supervise business operation
+of the Bank and put forward suggestions or inquiries
+accordingly. Shareholders are entitled to review the
+information of the Bank such as the Articles of Association,
+the register of shareholders, documents on status of share
+capital and minutes of Shareholders' General Meetings,
+etc.
+124
+ICBC
+Corporate Governance Report
+Special Provisions on Rights of Preference
+Shareholders
+In the following circumstances, preference shareholders
+of the Bank have the right to attend the Shareholders'
+General Meeting and exercise voting rights: (1)
+amendments to the Articles of Association which relate
+to preference shares; (2) the reduction of the registered
+capital of the Bank by more than 10% (either separately
+or in aggregate); (3) merger, division and dissolution or
+change of corporate form of the Bank; (4) issuance of
+preference shares; and (5) other events specified in the
+Articles of Association that will change or abrogate the
+rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders' General
+Meeting shall be given to preference shareholders in
+accordance with the notification procedures applicable
+to ordinary shareholders as specified in the Articles of
+Association.
+In the event that the Bank failed to pay the agreed
+dividend to preference shareholders for three years in
+aggregate or for two consecutive years, from the next
+day following the date of approval of the proposal not
+paying the agreed dividend for the current year by the
+Shareholders' General Meeting, preference shareholders
+shall be entitled to attend and vote (together with ordinary
+shareholders) at the Shareholders' General Meeting. For
+preference shares the dividend of which is non-cumulative,
+the voting rights shall be temporarily restored until the full
+payment of the agreed dividend for the current year by the
+Bank.
+Other Rights
+Ordinary shareholders of the Bank have the right to
+collect dividends and other forms of benefits distributed
+on the basis of the number of shares held by them;
+preference shareholders shall be entitled to rights to
+dividends in priority to payment of dividends to ordinary
+shareholders. Shareholders have other rights conferred by
+laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+Inside Information Management
+Facsimile: 86-10-66107571
+Telephone: 86-10-66108608
+If an investor wishes to enquire any questions related to
+operation performance of the Bank, please contact:
+Investor Enquiries
+Corporate Governance Report
+Annual Report 2021
+Address: Corporate Strategy and Investor Relations
+Department, Industrial and Commercial Bank of China
+Limited, 55 Fuxingmennei Avenue, Xicheng District,
+Beijing, China
+In 2022, the Bank will further and proactively deepen the
+communication and exchange with investors to enhance
+investors' understanding and recognition of the Bank and
+continue to protect legitimate interests of the investors,
+and at the same time hope to receive more support from,
+and attention of the investors.
+In 2021, with the consistent adherence to the investor-
+centered approach, the Bank strove to improve the quality
+of investor relations services and generate stable return to
+shareholders following the principle of serving investors
+in a comprehensive, proactive, precise, coordinated and
+efficient manner.
+Effective Communication with Shareholders
+and Review of Investor Relations Activities
+Corporate Governance Report
+Investor Relations
+of insider lists and regularly conducted insider transaction
+self-inspections. After self-inspections, none of the insiders
+of the Bank were found to be involved in dealings in
+shares of the Bank who have taken advantage of inside
+information during the reporting period.
+The Bank manages inside information and insiders in
+accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and
+conducts the collection, delivery, sorting, preparation
+and disclosure of relevant information in compliance
+with applicable laws and regulations. During the
+reporting period, the Bank continued to strengthen inside
+information management, timely organized the completion
+During the reporting period, the Bank proactively carried
+out frequent "online + offline" and "face-to-face +
+screen-to-screen" investor exchanges, and held annual
+and interim results releases through "on-site meetings
++ global teleconferencing + public opinion collection +
+livestreaming". The Bank made constant and extensive
+communication with institutional investors and minority
+investors through online and offline channels like press
+conferences in relation to periodic results announcements,
+reverse roadshows, domestic and overseas non-deal
+roadshows, investor hotline, investor relations mailbox,
+investor relations website and the online platform of sns.
+sseinfo.com. In this way, the Bank presented its operational
+quality, efficiency and strategic achievements to the
+capital market, actively responded to the concerns from
+investors and analysts, and strove to deliver the values
+of ICBC. Besides, it enhanced investors' comprehensive
+and objective understanding and cognition in economic
+development of China and high-quality development of the
+Bank and helped bring the market value in line with the
+long-term intrinsic value of the Bank. The Bank improved
+investor relations information collection and market
+information feedback mechanism, followed and analyzed
+spotlight issues of the capital market, and effectively
+enhanced the quality of communication with the investors.
+The Bank actively understood and solicited the comments
+and suggestions of the capital market on the Bank, and
+assisted the Management in making timely reaction with
+the help of many operation and communication strategies,
+so as to continuously strengthen the level of corporate
+governance and core values of the Bank.
+During the reporting period, the Group paid Deloitte
+Touche Tohmatsu and its member institutions a total fee
+of RMB176 million for the audit of financial statements
+(including the audit of financial statements of subsidiaries
+and overseas branches). Of which, RMB104 million
+(including fee for internal control audit of RMB8.80 million)
+was paid by the Bank.
+125
+Management on Subsidiaries
+Board of
+Supervisors
+Shareholders'
+General
+Meeting
+Shen Bingxi
+Wu Xiangjiang
+Huang Li
+Zhang Wei
+Supervisor
+Huang Liangbo
+Attendances in person/Number of meetings that should be attended
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+During the reporting period, the Board of Supervisors held
+nine meetings, reviewed 20 proposals including the Report
+on the Work of the Board of Supervisors for 2020 and the
+Report on Performance Evaluation, heard nine reports on
+the business operation, development strategy planning, the
+Group's anti-money laundering and other contents, and
+reviewed 43 documents including the documents on the
+supervision in each quarter of 2021 and relevant survey
+reports of the Board of Supervisors.
+Meetings of the Board of Supervisors
+As at the disclosure date of the results, the Board of
+Supervisors of the Bank consisted of six members, including
+two Shareholder Supervisors, namely Mr. Huang Liangbo
+and Mr. Zhang Wei; two Employee Supervisors, namely
+Mr. Huang Li and Mr. Wu Xiangjiang; and two External
+Supervisors, namely Mr. Shen Bingxi and Mr. Zhang Jie.
+1/1
+Composition of the Board of Supervisors
+As the supervisory organ of the Bank, the Board of
+Supervisors is accountable to, and shall report its work
+to, the Shareholders' General Meeting. The Board of
+Supervisors is responsible for, among others, supervising
+the performance and due diligence of Directors and Senior
+Management members; supervising the performance
+of duties by the Board of Directors and the Senior
+Management; conducting exit audits on Directors and
+Senior Management members when necessary; inspecting
+and supervising financial activities of the Bank; examining
+financial information such as financial report, business
+report and profit distribution plan to be submitted to
+the Shareholders' General Meeting by the Board of
+Directors; inspecting and supervising the business decision-
+making, risk management and internal control of the
+Bank and guiding the internal audit department of the
+Bank; formulating performance evaluation measures
+of the Board of Directors and the Senior Management
+and their members as well as supervisors; evaluating the
+performance of the Board of Directors and the Senior
+Management and their members as well as supervisors,
+and reporting to the Shareholders' General Meeting
+for approval; presenting proposals to the Shareholders'
+General Meeting; proposing to convene an extraordinary
+Responsibilities of the Board of Supervisors
+Board of Supervisors
+Corporate Governance Report
+ICBC
+122
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Anthony Francis Neoh, Yang Siu Shun, Shen Si, Nout Wellink and Fred Zuliu Hu
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and duration
+management of provision of guarantee services, and carried out relevant business on such basis.
+In accordance with relevant provisions and requirements of CSRC, we, in the capacity of Independent Non-executive
+Directors of the Bank, reviewed external guarantees of the Bank on the principles of fairness, impartiality and
+objectivity, and hereby give our specific explanation and opinions as follows: upon review, external guarantees
+provided by the Bank mainly focus on issuance of letters of guarantee and standby letters of credit, which is part of
+the ordinary banking services within the business scope of the Bank as approved by relevant regulatory authorities.
+As at 31 December 2021, the balance of letters of guarantee and standby letters of credit issued by the Bank totaled
+RMB494,532 million.
+Independent Non-executive Directors' Special Explanation and Independent
+Opinions on External Guarantees of the Bank
+For the details on performance of duties of Independent
+Non-executive Directors of the Bank during the reporting
+period, please refer to the Work Report of Independent
+Directors for 2021 issued by the Bank on 30 March 2022.
+During the reporting period, the Bank's Independent Non-
+executive Directors did not raise any objection on proposals
+of the Board of Directors and special committees of the
+Board of Directors.
+general meeting, and convening and presiding over
+the extraordinary general meeting in case the Board
+of Directors fails to perform its duty of convening
+Shareholders' General Meeting; proposing to convene an
+interim meeting of the Board of Directors.
+4/4
+3/3
+9/9
+Proposing the Convening of an Extraordinary
+General Meeting
+Shareholders' Rights
+As the executive organ of the Bank, the Senior
+Management is accountable to the Board of Directors.
+The Senior Management is responsible for, among others,
+the operation and management of the Bank; organizing
+the implementation of operation and investment plans
+approved by the Board of Directors; formulating specific
+rules and regulations of the Bank; determining plans for
+compensation distribution and performances evaluation of
+persons in charge of internal departments and branches
+of the Bank (except the internal audit department);
+truthfully reporting to the Board of Directors or the Board
+of Supervisors on the business performance; drafting
+the annual financial budget plan, final account plan,
+profit distribution plan and loss make-up plan, plans for
+increase or reduction of the registered capital, the issuance
+of bonds or other securities and listing, and making
+suggestions in that respect to the Board of Directors.
+Responsibilities of the Senior Management
+Senior Management
+The Bank has adopted a set of codes of conduct
+concerning the securities transactions by directors and
+supervisors which are no less stringent than the standards
+set out in the Model Code for Securities Transactions by
+Directors of Listed Issuers, Appendix 10 to the Hong Kong
+Listing Rules. After making enquiries to all Directors and
+Supervisors of the Bank, each Director and Supervisor
+confirmed that he/she has complied with the provisions
+of the afore-said codes of conduct during the reporting
+period.
+Securities Transactions of Directors and
+Supervisors
+Corporate Governance Report
+123
+Annual Report 2021
+Appointment and
+8/8
+1/1
+-
+Note: For the change of supervisors, please refer to the section headed "Directors, Supervisors and Senior Management
+Removal".
+3/3
+Qu Qiang
+Yang Guozhong
+During the reporting period, Deloitte Touche Tohmatsu
+and its member institutions provided the Group with non-
+audit services including professional services for asset
+securitization and bonds issuance etc., and received RMB7
+million for such professional non-audit services.
+Zhang Jie
+1/1
+9/9
+3/3
+9/9
+3/3
+9/9
+3/3
+comments and suggestions. The Bank paid close attention
+to the relevant comments and suggestions, and organized
+the implementation thereof according to the actual
+conditions.
+During the reporting period, Chairman Chen Siqing held
+discussions with the Bank's Independent Non-executive
+Directors, who provided suggestions with respect to the
+Bank's development strategies, business transformation
+and risk control, etc. The Bank's Independent Non-
+executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, and during
+consideration of issues, gave independent opinions on
+improving the abilities of serving national strategies,
+focusing on risk control and compliance development, and
+speeding up FinTech innovation, etc. They also carried out
+active discussions or surveys on financial support for the
+real economy, climate risk management, green finance
+development, etc., exchanged ideas, and put forward
+Supervisor Leaving Office
+121
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held
+seven meetings on 29 January, 25 February, 28 April, 8 July, 26 August, 24 September and 25 November
+2021, respectively. Through the seven meetings, the Nomination Committee considered and approved
+13 proposals including the proposals on the election of Mr. Liao Lin as Vice Chairman of the Bank, the
+nomination of Mr. Zheng Guoyu and Mr. Wang Jingwu as candidates for Executive Directors of the Bank,
+the nomination of Ms. Chen Yifang and Mr. Dong Yang as candidates for Directors of the Bank, and the
+appointment of Mr. Liao Lin as President of the Bank, Mr. Zheng Guoyu and Mr. Zhang Weiwu as Senior
+Executive Vice Presidents of the Bank, and Mr. Wang Jingwu concurrently as Chief Risk Officer of the Bank,
+and heard the report on the framework of the Board of Directors in 2020. The Nomination Committee
+prudently assessed the organizational structure of the Bank's Board of Directors and its special committees,
+promoted the change of directors in an orderly manner and continuously improved the composition of
+special committees of the Board of Directors.
+US Risk
+Committee
+Committee
+Related Party
+Transactions
+Control
+Compensation
+Committee
+Corporate Governance Report
+119
+Annual Report 2021
+The Articles of Association of the Bank specifies methods and procedures to nominate Directors. Please refer
+to Article 118 of the Articles of Association. During the reporting period, the Bank appointed and renewed
+the appointments of Directors of the Bank in strict accordance with the Articles of Association of the Bank.
+The Nomination Committee reviews the qualifications of candidates for Directors based on whether the
+candidate complies with applicable laws, administrative rules, regulations and the Articles of Association of
+the Bank. The Bank attached importance to diversified sources and backgrounds of Directors and continued
+the efforts to enhance the professionalism of the Board of Directors, thus laying the foundation for the
+effective operation and scientific decision-making of the Board of Directors. According to the requirement
+on diversified composition of the Board of Directors in the Rules for Recommendation and Nomination of
+Board Candidates of the Bank, the Nomination Committee shall pay attention to the complementarity of
+the candidates in terms of expertise, professional competence and experience, cultural and educational
+background, gender, etc., to ensure the members of the Board of Directors are well equipped, experienced
+and have diversified perspectives and views. In order to implement the diversity policy, the Nomination
+Committee discusses and designs measurable goals according to actual conditions and assesses the
+improvement of diversified composition of the Board of Directors during the course of its yearly assessment
+on the framework, number of Directors and composition of the Board of Directors. As at the disclosure date
+of the results, there were five Independent Non-executive Directors, accounting for more than one third of
+the total members of the Board of Directors.
+Primary Responsibilities of the Nomination Committee The Nomination Committee is mainly responsible
+for making recommendations to the Board of Directors on candidates for Directors and Senior Management
+members, nominating candidates for chairmen and members of special committees of the Board of
+Directors, formulating the standards and procedures for selection and appointment of Directors and Senior
+Management members, and formulating the training and development plans for Senior Management
+members and key reserved talents. The Nomination Committee is also responsible for assessing the structure,
+size and composition of the Board of Directors on a yearly basis and making recommendations to the Board
+of Directors based on the Bank's development strategy.
+The Risk Management Committee is responsible for constantly monitoring and examining the risk
+management system of the Bank, and examining the effectiveness of the system at least on an annual basis.
+Under the enterprise risk management system structure of the Bank, the Risk Management Committee
+performed its function of examining the Bank's risk management system through reviewing and revising the
+risk strategy, risk management policy, risk appetite and the enterprise risk management structure, monitoring
+and evaluating the setup, mode of organization, work procedures and results of risk management
+departments, regularly assessing the risk policy, risk appetite and enterprise risk management status,
+supervising and assessing risk control activities conducted by the Senior Management members in terms of
+credit risk, market risk, operational risk, liquidity risk, compliance risk, reputational risk and interest rate risk
+in the banking book. For details of the risk management, please refer to the section headed "Discussion and
+Analysis - - Risk Management".
+Examining the risk management system
+•
+Performance of the Risk Management Committee During the reporting period, the Risk Management
+Committee held four meetings on 25 March, 28 April, 26 August and 28 October 2021, respectively.
+At these meetings, the Risk Management Committee considered and approved 16 proposals, and heard
+five reports. The Risk Management Committee continuously supervised enterprise risk management. It
+considered and approved proposals on the 2020 and 2021 Interim Risk Management Report, the 2020
+Report on Management of Interest Rate Risk in the Banking Book, the 2020 Report on the Risk Appetite
+Implementation and Assessment, the 2020 Compliance Risk Management Report of the Group and the 2020
+Case Prevention Report and heard reports on technology risk management and the Group's anti-money
+laundering in 2020. It has become more foresighted in preventing and controlling financial risks and refining
+the risk management mechanism, in a bid to assist the Board of Directors in improving its risk management,
+prevention and control capabilities.
+Primary Responsibilities of the Risk Management Committee The Risk Management Committee
+is primarily responsible for constantly overseeing the Bank's risk management system, reviewing and
+revising the strategy, policy and procedures of risk management and internal control process of the Bank,
+and supervising and evaluating the performance of Senior Management members and risk management
+departments in respect of risk management.
+Nomination
+Committee
+Management
+Committee
+Corporate Governance Report
+ICBC
+128
+During the reporting period, in accordance with the
+relevant notices of CSRC, the Bank conducted a self-
+inspection amid the governance improvement campaign
+of listed companies. The self-inspection results showed
+that, from 2018 to 2020, the Bank had complete
+internal rules and regulations for corporate governance,
+sound organizational structure, standardized operation
+procedures, smooth mechanism for the communication
+with investors, and stable cash dividend ratio.
+Remediation of Problems in the Self-
+inspection amid the Governance
+Improvement Campaign of Listed
+Companies
+Diversified Operation and Subsidiary
+Management, Major Controlled Subsidiaries and Equity
+Participating Company".
+Business Overview
+Corporate Governance Report
+For the information of management and control on
+subsidiaries, please refer to "Discussion and Analysis
+-
+Primary Responsibilities of the Compensation Committee The Compensation Committee is mainly
+responsible for formulating assessment measures on the performance of duties and compensation plans
+for Directors, organizing the assessment on the performance of duties of Directors, putting forth proposal
+on remuneration distribution for Directors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the performance and
+behaviors of Senior Management members.
+Performance of the Compensation Committee During the reporting period, the Compensation
+Committee held two meetings on 25 March and 26 August 2021, respectively. At these meetings, the
+Compensation Committee considered and approved five proposals including the proposals on the payment
+of remuneration to Directors and Senior Management members for 2020, the Senior Management
+performance evaluation plan for 2021, the coverage of directors, supervisors and officers liability insurance
+for 2021-2022 and the Employment Plan of the Group for 2022, and heard the 2020 assessment report
+on the performance of duties of Directors by the Board of Directors. The Compensation Committee,
+in accordance with regulatory requirements, drafted the remuneration of directors, and improved the
+performance evaluation indicators and the incentive and constraint mechanism.
+Risk
+Performance of the Related Party Transactions Control Committee During the reporting period, the
+Related Party Transactions Control Committee held four meetings on 25 March, 21 June, 26 August and
+17 December 2021, respectively. At these meetings, the Related Party Transactions Control Committee
+considered and approved four proposals including the proposal on identification of related parties of the
+Bank, and heard two reports including the report on related party transactions in 2020 and the identification
+of related parties of the Bank in 2020. The Related Party Transactions Control Committee focused on
+reviewing the fairness and objectivity of related party transactions, urged the Bank to strengthen the
+management of related party transactions and inside transactions, and assisted the Board of Directors in
+ensuring the Bank's related party transactions are carried out in compliance with laws and regulations.
+Primary Responsibilities of the US Risk Committee In accordance with the relevant requirements
+in the Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organizations
+established by the Federal Reserve Board, the US Risk Committee supervised the implementation of the
+US business-related risk management framework and relevant policies.
+Independence and Performance of Duties
+of Independent Non-executive Directors
+The qualifications, number and proportion of the Bank's
+Independent Non-executive Directors comply with
+regulatory requirements. The Bank's Independent Non-
+executive Directors do not have any business or financial
+interests in the Bank or its subsidiaries, and they have not
+assumed any managerial position in the Bank. The Bank
+has received the annual confirmation on independence
+from all Independent Non-executive Directors and
+considered that they were independent.
+During the reporting period, the Board Secretary of the
+Bank attended the relevant specialized trainings, with
+the training hours over 15 hours, which meets relevant
+regulatory requirements.
+Annual Report 2021
+Primary Responsibilities of the Related Party Transactions Control Committee The Related Party
+Transactions Control Committee is mainly responsible for developing the basic policies governing the
+management of related party transactions, identifying the Bank's related parties, approving related party
+transactions and other related matters within the authority granted by the Board, receiving related party
+transaction statistics for filing purpose, reviewing the related party transactions that are subject to the
+approval of the Board of Directors or the Shareholders' General Meeting, and reporting to the Board
+of Directors on the implementation of the related party transaction management policies as well as the
+conditions on these transactions.
+Training of Board Secretary
+Introduction trainings for newly-appointed directors
+Climate risk management and green finance
+Trainings on business of the Bank
+The Listed Companies Association of Beijing:
+"Compliance Operation", "Investor Protection"
+"Innovative Development", "Capital Operation"
+Interpretation of Guidelines on Corporate Governance of Banking and Insurance Institutions and
+Measures for Evaluating the Performance of Directors and Supervisors of Banks and Insurance
+Institutions (Pilot)
+China Banking Association:
+Follow-up training for independent directors of listed companies
+Internal trainings
+SSE:
+Anti-money Laundering
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+ICBC
+External trainings
+120
+Performance of the US Risk Committee During the reporting period, the US Risk Committee held
+five meetings on 25 March, 21 June, 26 August, 28 October and 17 December 2021, respectively.
+At these meetings, the US Risk Committee considered and approved four proposals, and heard
+12 reports. It attached importance to and strengthened the compliance management of overseas
+institutions, reviewed and approved the proposals including the risk management framework and the
+annual audit of risk appetite in the US, and the liquidity stress testing, funding contingency plans,
+key business lines and product liquidity risks in the US, heard the reports on the risk management
+and liquidity risk management in the US in 2020, and assisted the Board of Directors in urging the
+Management to well perform in compliance and risk prevention and control in international operation.
+In accordance with the Articles of Association of the
+Bank, Directors are elected by the Shareholders' General
+Meeting with a term of three years, and the appointment
+shall take effect from the date of approval by CBIRC or
+upon completion of relevant procedures according to the
+requirements of CBIRC. Directors may be re-appointed
+through re-election at the Shareholders' General Meeting
+after expiry of their term.
+The Directors of the Bank acknowledged that they are
+responsible for the preparation of the financial statements
+of the Bank. During the reporting period, in strict
+compliance with relevant provisions, the Bank published
+the 2020 Annual Report, the First Quarterly Report of
+2021, the 2021 Interim Report and the Third Quarterly
+Report of 2021 as scheduled.
+Responsibilities of Directors in Respect of
+Financial Statements
+Corporate Governance Report
+Investigation and Training of Directors
+During the reporting period, Directors of the Bank
+proactively conducted surveys on departments of the
+Bank, branches and subsidiaries concerning such topics as
+serving the new development paradigm, supporting rural
+revitalization, FinTech, green finance, wealth management,
+and pension finance. In the form of survey reports
+and briefs, such investigations provide the Bank with
+constructive suggestions and opinions.
+During the reporting period, the Bank developed an overall
+training plan, increased training resources, and encouraged
+and actively organized the Directors to attend trainings
+in many ways, with the aim of assisting the Directors in
+continuing to improve their ability to perform their duties.
+Directors of the Bank attended relevant trainings according
+to work needs.
+Term of Directors
+Directors' and Supervisors' Interests in
+Transactions, Agreements or Contracts
+of Significance During the reporting period,
+none of the Directors or Supervisors of the Bank had
+any material interests, whether directly or indirectly, in
+any transaction, arrangement or contract of significance
+regarding the Bank's business to which the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries
+of its controlling shareholders was a party. None of the
+Directors or Supervisors of the Bank have entered into any
+service contract with the Bank, which is not determinable
+by the Bank within one year without payment of
+compensation (other than statutory compensation).
+Part XV of the Securities and Futures Ordinance of Hong
+Kong (including interests or short positions therein that
+they shall be deemed to have pursuant to such provisions
+of the Securities and Futures Ordinance of Hong Kong), or
+any interests or short positions which have to be recorded
+in the register under Section 352 of the Securities and
+Futures Ordinance of Hong Kong, or any interests or short
+positions which have to be notified to the Bank and SEHK
+pursuant to the Model Code for Securities Transactions by
+Directors of Listed Issuers as set out in Appendix 10 to the
+Hong Kong Listing Rules.
+Connected Transactions
+Directors' and Supervisors' Rights to
+Acquire Shares or Debentures None of
+the Bank, its subsidiaries, its controlling shareholders or
+subsidiaries of its controlling shareholders entered into
+any agreement or arrangement enabling the Directors and
+Supervisors to acquire benefits by means of the acquisition
+of shares in or debentures of the Bank or any other body
+corporate.
+Directors' Interests in Competing
+Business None of the Bank's Directors held any
+interests in any business competes or competed or is or
+was likely to compete, either directly or indirectly, with the
+Bank.
+Interests in Shares, Underlying Shares,
+and Debentures Held by Directors
+and Supervisors As at 31 December 2021,
+none of the Directors or Supervisors of the Bank had
+any interests or short positions in the shares, underlying
+shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and
+Futures Ordinance of Hong Kong) which have to be
+notified to the Bank and SEHK under Divisions 7 and 8 of
+Report of the Board of Directors
+Management Contracts
+Equity-linked Agreement The Bank had no
+equity-linked agreements required to be disclosed by the
+Hong Kong Listing Rules.
+ICBC
+130
+For future planning disclosed in the public disclosure
+documents such as previous offering prospectuses and
+fund raising prospectuses issued by the Bank which has
+continued during the reporting period, its implementation
+progress conformed to the planning as described after
+verification and analysis.
+The funds raised from the Bank's fundraising activities were
+used for the purposes as disclosed in the prospectuses,
+namely, strengthening the capital base to support the
+ongoing business growth of the Bank.
+In 2021, the Bank carried out standardized management
+of the Group's connected transactions in strict accordance
+with the regulations of CBIRC and CSRC as well as
+listing rules in Shanghai and Hong Kong, and had no
+connected transaction to be submitted to the Board
+of Directors or the Shareholders' General Meeting for
+review. All connected transactions occurred complied
+with the disclosure exemptions under the Listing Rules of
+the Shanghai Stock Exchange and the Hong Kong Listing
+Rules. The disclosure exemptions abided by the provisions
+of SSE for disclosure of connected transactions as well as
+the provisions of SEHK for reporting and announcement of
+connected transactions.
+interest income and other operating income from top five
+customers of the Bank did not exceed 30% of the interest
+income and other operating income of the Bank for the
+year.
+Use of Proceeds from Fundraising
+Activities
+During the reporting
+period, the Bank did not enter into or have any contract
+regarding the management and administration of the
+whole or any important business.
+During the reporting period, the Bank's connected
+transactions under the rules of CBIRC mainly included
+inter-bank lending, bond repurchase, bond investment,
+loans, deposits and financial market derivative transactions
+etc., with a total amount of RMB1,430,056 million
+accumulatively.
+Executive Directors: Mr. Chen Siqing, Mr. Liao Lin,
+Mr. Zheng Guoyu and Mr. Wang Jingwu;
+Participation in Investing in National
+Financing Guarantee Fund Co., Ltd. In
+July 2018, the Bank signed the Promoter's Agreement
+of the National Financing Guarantee Fund Co., Ltd.
+In October 2018, upon the approval of CBIRC, the
+Bank planned to contribute RMB3.0 billion to National
+Financing Guarantee Fund Co., Ltd., which shall be paid by
+instalments. In May 2021, the Bank completed the entire
+contribution. For details on the investment, please refer to
+the announcements published by the Bank on the website
+of SSE, the "HKEXnews" website of HKEX and the website
+of the Bank.
+Industrial and Commercial Bank of China Limited
+Major Customers In 2021, the aggregate
+ICBC
+132
+Mr. Shen Si, Mr. Nout Wellink and Mr. Fred Zuliu Hu.
+Mr. Anthony Francis Neoh, Mr. Yang Siu Shun,
+Independent Non-executive Directors:
+Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and
+Mr. Dong Yang;
+Please refer to "Note 47. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws,
+regulations and accounting standards of China.
+Non-executive Directors: Mr. Lu Yongzhen,
+Members of the Board of Directors
+Management The Bank has clearly documented
+the remuneration policy for Directors, Supervisors and
+Senior Management members, and has continuously
+improved its performance assessment system and incentive
+restriction mechanism. From the perspectives of economic
+benefit, prevention and control of financial risks and
+support for the real economy and social responsibilities,
+the Bank adopted a system composed of the Bank's
+overall operation and management based indicators for
+the Management and duties allocation based indicators
+for individuals. The remuneration to the Chairman of
+the Board of Directors, the President, the Chairman
+of the Board of Supervisors and other executives of
+the Bank has followed the State's policies relating
+to the remuneration reform on executives of central
+enterprises, which consists of basic annual remuneration,
+performance-based remuneration and incentive income
+linked to term appraisal. The remuneration to other Senior
+Management members and Shareholder Supervisors
+consists of basic annual remuneration and performance-
+based remuneration, and part of performance-based
+remuneration is paid in a deferred manner. The Bank has
+contributed to statutory retirement programs organized by
+Chinese governmental organizations at different levels for
+Directors, Supervisors and Senior Management members
+concurrently as the employees of the Bank. Upon obtaining
+all applicable approvals, the Bank will implement a long-
+term incentive program. As at 31 December 2021, the
+Bank had not granted any share appreciation rights to
+any Director, Supervisor, Senior Management member, or
+other core business personnel designated by the Board of
+Directors.
+Remuneration Policy for Directors,
+Supervisors and Senior
+Relations among Directors, Supervisors
+and Senior Management Directors, Supervisors
+and Senior Management members of the Bank are not
+related to one another with respect to finance, business,
+family, or other material relationships which are required to
+be disclosed.
+Participation in Investing in National
+Green Development Fund Co, Ltd. In
+July 2020, the Bank signed the Promoter's Agreement of
+the National Green Development Fund Co, Ltd. In April
+2021, upon the approval of CBIRC, the Bank planned to
+contribute RMB8.0 billion to National Green Development
+Fund Co, Ltd., which shall be paid by instalments. In May
+2021, the Bank completed the first contribution of RMB0.8
+billion. For details on the investment, please refer to the
+announcements published by the Bank on the website of
+SSE, the "HKEXnews" website of HKEX and the website of
+the Bank.
+Report of the Board of Directors
+131
+Annual Report 2021
+As at the disclosure date of the results, the composition of
+the Board of Directors of the Bank is as follows:
+As at the latest practicable date before the disclosure date
+of the results, the Bank has maintained the minimum
+public float of 23.45%, based on the publicly available
+information and to the best knowledge of the Board of
+Directors of the Bank.
+2020
+Share Capital and Public Float
+2.660
+2.933
+2019
+2021
+Percentage of cash dividends (1) (%)
+Cash dividends (pre-tax, in RMB millions)
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+The Bank did not convert any capital reserve to share capital in the last three years. The table below sets out the dividend
+distribution of ordinary shares of the Bank for the last three years:
+about RMB104,534 million. The distribution plan will be
+submitted for approval to the Annual General Meeting
+for the Year 2021. Once approved, the above-mentioned
+dividends will be paid to the holders of A shares and H
+shares whose names appeared on the share register of
+the Bank after the close of market on 11 July 2022. The
+Bank will suspend the registration procedures of H share
+ownership transfer on 6 July 2022 (inclusive) through 11
+July 2022 (inclusive). The holders of H shares of the Bank
+that desire to receive the proposed cash dividends but
+have not registered the ownership transfer documents
+are requested to hand over their ownership transfer
+documents together with the H shares to the Bank's H
+share registrar Computershare Hong Kong Investor
+Services Limited that is located at Room 1712-1716,
+17 Floor, Hopewell Center, 183 Queen's Road East,
+Wanchai, Hong Kong no later than 4:30 p.m. of 5 July
+2022. Pursuant to relevant regulatory requirements and
+operational rules, dividends on A shares and H shares will
+be paid on 12 July 2022 and 27 July 2022, respectively.
+For dividend-related tax and tax reduction, please refer to
+the announcements on dividend distribution of the Bank.
+The Board of Directors of the Bank proposed distributing
+cash dividends of RMB2.933 (pre-tax) for each ten shares
+of 356,406,257,089 ordinary shares for 2021, totaling
+As approved at the Annual General Meeting for the Year
+2020 held on 21 June 2021, the Bank has distributed cash
+dividends of about RMB94,804 million, or RMB2.660 per
+ten shares (pre-tax) for the period from 1 January 2020
+to 31 December 2020 to the ordinary shareholders whose
+names appeared on the share register after the close of
+market on 5 July 2021.
+The profit and financial status of the Bank during the
+reporting period are presented in the Auditor's Report and
+Financial Statements of the Annual Report.
+Profits and Dividends Distribution
+Principal Business The principal business of the
+Bank and its subsidiaries is the provision of banking and
+related financial services. Please refer to the section headed
+"Discussion and Analysis" for the business review of the
+Bank.
+Report of the Board of Directors
+Board of Directors
+104,534
+94,804
+2.628
+93,664
+30.9
+Subsidiaries Particulars of the Bank's major
+subsidiaries as at 31 December 2021 are set out in the
+sections headed "Discussion and Analysis Business
+Overview" and "Note 25. to the Consolidated Financial
+Statements: Investments in Subsidiaries" in this annual
+report.
+Donations During the reporting period, the Group
+made external donations of RMB114.81 million equivalent.
+Pre-emptive Rights The Articles of Association
+of the Bank does not have any mandatory provision
+regarding pre-emptive rights. Pursuant to the Articles of
+Association, the Bank may increase its registered capital
+after obtaining approval of the Shareholders' General
+Meeting and of relevant authorities, by issuing shares
+through public or non-public offering, issuing bonus shares
+to the existing shareholders, converting capital reserve
+to share capital or using other methods as allowed by
+applicable laws and administrative regulations or approved
+by relevant authorities.
+Financial Summary The summary of results,
+assets and liabilities for the five years ended 31 December
+2021 is set out in the section headed "Financial
+Highlights" of this annual report.
+Reserves Details of the
+distributable reserves of the Bank as at 31 December 2021
+are set out in "Note 39. to the Consolidated Financial
+Statements: Reserves" of this annual report.
+Distributable
+Purchase, Sale and Redemption of
+Shares During the reporting period, except the
+redemption of offshore EUR preference shares, neither
+the Bank nor any of its subsidiaries purchased, sold or
+redeemed any listed shares of the Bank. For details on
+the redemption of offshore EUR preference shares, please
+refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders
+Preference Shares".
+The formulation and implementation of the Bank's cash
+dividend policy accords with the provisions stipulated in
+the Articles of Association and the requirements provided
+in the resolutions of the Shareholders' General Meeting,
+the dividend distribution standards and proportion are
+clear and explicit, and the decision-making procedure and
+mechanism are complete. Moreover, Independent Non-
+executive Directors had issued their opinions for it. Minority
+shareholders can fully express their opinions and appeals,
+to completely safeguard their legitimate rights.
+Changes in the share capital of the Bank for the year
+ended 31 December 2021 are set out in "Note 37. to the
+Consolidated Financial Statements: Share Capital".
+Report of the Board of Directors
+Annual Report 2021
+The Articles of Association of the Bank explicitly stipulates
+that the Bank's profit distribution policy shall maintain
+its continuity and stability and meanwhile have regard to
+Formulation and Implementation of
+Cash Dividend Policy
+_
+For details on the distribution of dividends on preference
+shares of the Bank, please refer to the section headed
+"Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders Preference Shares".
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+30.4
+30.9
+129
+Report of the Board of Supervisors
+the long-term interest of the Bank, the overall interests of
+all shareholders and the sustainable development of the
+Bank. It emphasizes the priority to adopt cash dividend
+as the profit distribution method and provides that the
+Bank's adjustment to the profit distribution policy shall be
+discussed by the Board of Directors as a special proposal
+and the grounds for adjustment shall be substantiated and
+proved in detail and presented in a written substantiating
+report for Independent Non-executive Directors to issue
+their opinions, and then the report will be submitted to the
+Shareholders' General Meeting for approval as a special
+resolution.
+During the reporting period, the Board of Supervisors,
+pursuant to relevant laws and regulations, regulatory
+requirements and the Articles of Association, performed
+supervision duties earnestly. Relying on a variety of
+methods such as onsite surveying and offsite monitoring,
+it carried out supervision of duty performance and due
+diligence, financial activities, risk management and internal
+control, etc. in a down-to-earth way. With its important
+role in corporate governance exploited adequately, it
+promoted the legal, compliant operation and development
+across the Bank.
+management in its operation, made use of information
+technology to collect, analyze and summarize historical
+carbon emission data, and provided strong support for
+continuous digital carbon emission management. On the
+basis of the pilot carbon emission inventory conducted
+by the Head Office, Beijing Branch and Hunan Branch,
+the Bank launched the relevant work to find out the real
+carbon emissions data in the past five years. According to
+the total amount and structure of carbon emissions in the
+past, the Bank studied and developed the implementation
+roadmap for carbon neutrality in its operation as well as
+the energy saving and emission reduction pathway, and
+gradually advanced the carbon neutrality in its operation.
+Remarkable results were achieved in green office. The Bank
+implemented independent and controllable localization of
+office platform, optimized the system functions of official
+document processing and business trip reimbursement,
+integrated and upgraded mobile office functions, with the
+daily active users of mobile office increasing by more than
+50% year-on-year.
+International Exchange and Cooperation
+The Bank conducted in-depth researches on topics such as
+low-carbon transformation of commercial banks, financial
+support for carbon market development, and business
+promotion of pilot zones for green finance reform and
+innovation, explored quantitative assessment methods
+for corporate green development, and established an
+assessment mechanism of green finance development
+under the framework of Paris Agreement. It also updated
+and published the 2021 edition of the Belt and Road Green
+Finance (Investment) Indexes Report, launched China's
+first industry standard for environmental information
+disclosure by financial institutions, and developed the
+CERAT online instrument for environmental risk analysis
+to help enterprises and financial institutions quantify
+the environmental risks of overseas projects. It actively
+participated in the global financial governance of the
+Task Force on Climate-Related Financial Disclosures,
+and spared no efforts to push forward climate change
+response and "dual carbon" work through international
+platforms such as United Nations Environment Programme
+Finance Initiative (UNEP FI), Global Investors for Sustainable
+Development Alliance (GISD), Green Investment Principles
+(GIP) for the Belt and Road, and the Belt and Road Inter-
+bank Regular Cooperation Mechanism (BRBR).
+For details of the Bank's fulfillment of corporate social
+responsibilities, please refer to the 2021 Corporate Social
+Responsibility (ESG) Report of Industrial and Commercial
+Bank of China Limited published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the
+website of the Bank.
+Scan for access to the 2021 Corporate Social Responsibility
+(ESG) Report of Industrial and Commercial Bank of China
+Limited
+Consolidation of Achievements in
+Poverty Alleviation and Services for
+Rural Revitalization
+The Bank fully implemented the national strategic plans for
+rural revitalization, and resolutely followed the regulatory
+requirements of financial services for rural revitalization. To
+"address the country's needs, give full play to finance and
+tap into ICBC strengths", the Bank put in place the urban-
+rural collaborative development strategy and made all-
+round efforts to consolidate and expand the achievements
+made in poverty alleviation in coordination with the
+extensive drive for rural vitalization.
+The urban-rural collaborative development strategy was
+put in place. The Bank established the "Steering Group
+for Financial Services for Rural Revitalization" headed
+by the chairman of the Bank and the "Committee for
+Promoting Financial Services for Rural Revitalization"
+with the president of the Bank serving as the director.
+Leveraging the advantages in urban finance, technological
+development and integrated services, the Bank
+formulated and implemented the urban-rural collaborative
+development strategy, released the Action Plan for
+Financial Support to Rural Revitalization, and introduced
+15 action measures. It also launched a uniform brand
+of financial services for rural revitalization "ICBC
+Xingnongtong" to strengthen the urban-rural collaborative
+financial services to rural areas featuring urban areas
+helping rural areas and urban-rural complementarity and
+boost the comprehensive extension of industrial chain,
+supply chain and capital chain from urban to rural areas.
+136
+ICBC
+Environmental and Social Responsibilities
+A rural financial service system was built and relevant
+systems and mechanisms were further refined. The Bank
+established a specialized institution of Rural Vitalization
+Office which was designed to coordinate financial services
+for rural revitalization, and set up the specialized line of
+financial services for rural revitalization. With all these
+efforts, the Bank was committed to building an all-
+round rural financial service system covering agriculture,
+rural areas and farmers, offering rural customer groups
+with meticulous, warm and convenient customer
+experience, and delivering readily available, intelligent and
+wholehearted financial services to boost prosperity in rural
+areas, rural industries and livelihood of rural residents.
+Achievements made in poverty alleviation were
+consolidated and expanded. The Bank continued to provide
+all kinds of support for poverty alleviation with financial
+services, optimized micro loan products for poverty
+alleviation, and strongly supported the financing needs
+of key counties for national rural revitalization assistance.
+Furthermore, the Bank launched the specialized rural
+revitalization recruitment of "ICBC Stars Supporting Rural
+Residents and Enabling Dreams", targeting at college
+students from families that have shaken off poverty, people
+involved in "three supports and one assistance" and
+other key targeted groups and areas of national poverty
+alleviation efforts as well as groups providing support for
+agriculture, rural areas and farmers.
+Targeted assistance for poverty alleviation was continuously
+improved to help the targeted regions realize rural
+revitalization. The Bank formulated and released the Work
+Plan on Targeted Poverty Alleviation for 2021, established
+a
+Environmental and Social Responsibilities
+"Three-to-One" paired assistance mechanism, and
+organized 12 branches to pair up with targeted assistance
+counties to help attract investment and high-caliber
+professionals. It insisted on promoting poverty assistance
+through healthcare and education, business development,
+and consumption growth, in a way to help the invigoration
+of high-caliber talents.
+Innovation was made in rural revitalization product.
+Nearly 100 credit and non-credit products and services
+were launched to form a product and service system
+with ICBC characteristics, covering rural industry, rural
+development, inclusive finance, farmer services, GBC
+interaction and technology empowerment. It made
+breakthrough in launching an online agriculture-related
+inclusive loan product, i.e., "ICBC Prosperous Agriculture
+Loan", and cooperated with the Ministry of Agriculture
+and Rural Affairs to carry out various activities such as
+the "agricultural matchmaking" activity and the "serving
+thousands of villages and accompanying ten thousands
+of households" campaign. It also launched a series of
+training for rural customers on "practical skills for poverty
+alleviation of Jinyang", and promoted the brand of
+"ICBC Training for Rural Revitalization", with the aim to
+create an integrated rural revitalization service with ICBC
+characteristics that combined financing, consulting and
+commercial services.
+As at the end of 2021, the Bank's balance of agriculture-
+related loans exceeded RMB2.6 trillion, an increase of over
+RMB400.0 billion from the beginning of the year. The
+balance of loans placed at areas that have been lifted out
+of poverty was RMB782.0 billion, up over RMB100 billion
+from the beginning of the year. The balance of loans in
+granted for key poverty assistance counties exceeded
+RMB100.0 billion, an increase higher than the average of
+the Bank's loans.
+Consumer Protection
+The Bank conscientiously implemented the laws,
+regulations and regulatory requirements regarding
+consumer protection, took various measures to
+improve the consumer protection governance system,
+and comprehensively enhance its ability to protect
+the legitimate rights and interests of consumers. It
+strengthened the guidance and coordination of the
+consumer protection work of the Board of Directors,
+the Board of Supervisors and the Senior Management,
+and continuously consolidated the management
+groundwork of corporate governance. It incorporated
+the risks of consumer protection into a comprehensive
+risk management system, refined the key rules and
+regulations for consumer protection, and continuously
+improved the systematization and standardization of
+consumer protection. Moreover, it optimized the system
+functions of financial information protection and sales of
+financial products, and enhanced the level of intelligent
+management and control of consumer protection risks
+Annual Report 2021
+137
+Environmental and Social Responsibilities
+in a targeted manner. The Bank also strengthened the
+management of third-party cooperation agencies and
+continuously improved the level of compliance operations.
+By creating the "ICBC with You" elderly customer
+service brand, it worked to make the elderly customers
+more satisfied and happier with financial service and
+to contribute to the effective implementation of the
+national strategy of responding to population aging. It
+also continued to conduct reviews and risk warning on
+policies, procedures, financial products and services related
+to consumer protection, actively protected consumer rights
+and enhanced consumer experience.
+The Bank highly valued the integration of online and
+offline efforts, launching consumer protection promotion
+activities such as "March 15th Consumer Protection
+Publicity Week", "Financial Knowledge Publicity Month,
+Household Financial Knowledge, Be a Rational Investor
+and a Good Financial Internet User ", "Spreading Financial
+Knowledge, Protecting Your Pocket" and "Publicizing
+Financial Knowledge to Walk Ten Thousand Miles",
+where the efforts were especially directed at key contents
+and special groups with an aim to continuously enhance
+consumers' financial literacy and risk prevention capability.
+The Bank designed itself a uniform consumer protection
+logo, established a library of consumer protection materials
+and gave full play to its advantages in channels, brands
+and talented staff. It also made sustained efforts to
+enhance the standardization, quality and efficiency of
+consumer protection promotion endeavors, in an effort to
+build a publicity brand with the Bank's own characteristics.
+The Bank widely rolled out the series of "Chunxun Action"
+training ("Spring Training Action") for consumer protection
+to promote more effective implementation of the laws,
+regulations and regulatory requirements of consumer
+protection in key areas such as personal banking, credit
+cards and Internet finance. Ongoing efforts were made
+to strengthen special training, where corresponding
+training content and focus of consumer protection were
+set in accordance with the management level, profession
+and job responsibilities of the targeted groups, in a bid
+to constantly improve the accuracy and effectiveness of
+training.
+Adhering to putting the customer first, the Bank took
+special measures to tackle the pain points of customer
+experience, carried out "I do practical things for the
+public" service improvement campaign, and implemented
+root-cause rectification in terms of rules and regulations
+formulation, products improvement, processes
+optimization and systems refinement to continuously
+improve the quality of financial services. The Bank also
+established a customer complaint management system
+that is more compatible with customer demands and
+regulatory requirements, and strengthened the full-
+chain management covering monitoring and early
+warning, standardized processing, and supervision and
+implementation. In 2021, the Bank further broadened its
+complaint acceptance channels and optimized the relevant
+process, as part of its effort to listen more to customers'
+voices and respond to and resolve customer appeals in
+a more comprehensive way, with customer satisfaction
+reaching 86.8%.
+138
+ICBC
+Work of the Board of Supervisors
+Service was further delivered in lower-tier market. The
+Bank developed an online-offline integrated rural services
+delivery system highlighting online, streamlined and
+efficient operation. In terms of offline channels, relying
+on rural service sites for inclusive finance, it built a light-
+asset and flexible ICBC messenger operation and service
+model to effectively fill the gap of rural financial services. In
+terms of online channels, the Bank built a comprehensive
+service platform - ICBC "Xingnongtong" APP, effectively
+realizing the service downward penetration of "one-point
+access, borderless rural revitalization".
+135
+Liability Insurance of Directors,
+Supervisors and Senior Management
+Members Pursuant to the Articles of Association
+of the Bank, where conditions permit, the Bank may
+establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members
+upon approval of the Shareholders' General Meeting.
+The Bank will use its own assets to compensate each
+Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the
+maximum extent permitted by laws and administrative
+regulations or within the scope not prohibited by laws and
+administrative regulations, unless the Directors, Supervisors
+and Senior Management members are otherwise proved
+to have failed to act honestly or in good faith during their
+duty performance. During the reporting period, the Bank
+purchased liability insurance for Directors, Supervisors and
+Senior Management members.
+The Bank made steady progress in promoting carbon
+footprint management. It established an information
+statistics and analysis system for carbon footprint
+Annual Report 2021
+Supervision on the performance of duties. The Board
+of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance
+with the laws and regulations, the Articles of Association
+of the Bank, and the implementation of the resolutions
+of the Shareholders' General Meeting and the Board
+of Directors and the regulatory opinions. It paid close
+attention to how the Board of Directors and the Senior
+Management implemented the economic and financial
+policies of the state and regulatory requirements,
+served the implementation of major national strategies,
+responded to the COVID-19 pandemic, supported the
+real economy, promoted the key tasks of "ensuring
+stability on six key fronts" and "maintaining security in
+six key areas", facilitated the inclusive finance and green
+finance development, prevented and defused financial
+risks, and handled information disclosure. It ensured the
+Bank could well-perform the political, social and economic
+responsibilities as a large state-owned bank.
+Financial supervision. The Board of Supervisors
+supervised the Bank's financial activities as well as
+decisions on and implementation of material financial
+issues. It paid close attention to the major accounting
+issues, expected credit loss, financial approval issues, and
+relevant accounting items of the Bank, kept alert to the
+impact of domestic and overseas pandemic situations
+on the Bank's business operation, and conducted in-
+depth analysis on the major factors affecting the Group's
+profitability. It carefully reviewed periodic reports, final
+accounts and profit distribution plan, learned about and
+kept watchful eye on the external audit work, and oversaw
+and evaluated the quality of external audit. It focused on
+the allocation of financial resources and the operation of
+financial management mechanism to intensify supervision
+constantly.
+Risk supervision. The Board of Supervisors supervised
+the effectiveness and soundness of the risk management
+system and mechanism. It paid close attention to the risk
+management strategies, the formulation and transmission
+of risk appetite, and improvement and implementation of
+risk management policies and procedures. It supervised
+capital management, consolidated management, stress
+testing management and regulatory indicators, and
+tracked changes in major risks such as credit risk, market
+risk and liquidity risk. It concerned about the impact
+of continued spreading of pandemic on the domestic
+economy and finance as well as relevant risk prevention
+and control measures taken by the Bank, and strengthened
+the supervision of key regions, key institutions and key
+businesses, to analyze and expose the potential risks and
+hazards as early as possible.
+Supervision on internal control. The Board of
+Supervisors supervised the effectiveness of the internal
+control system, the performance of internal control duties
+and the business compliance with laws and regulations.
+It paid close attention to the operation of internal control
+mechanism, policy system building, implementation of
+regulatory opinions, remediation of inspection findings,
+management of material risk events and accountability
+for operating losses, among other aspects. The Board
+of Supervisors effectively supervised key institutions and
+business areas, paid continuous attention to internal
+control in case prevention management, AML, information
+Annual Report 2021
+133
+Report of the Board of Supervisors
+technology and other aspects, and gave full play to the
+supervision efficiency to effectively improve the Group's
+internal control compliance management.
+Independent Opinions of the Board of
+Supervisors on Relevant Issues
+Compliant Operation During the reporting period,
+the Board of Directors and the Senior Management
+of the Bank continued to operate in compliance with
+applicable laws and regulations, and the decision-making
+procedures complied with applicable laws and regulations
+and the Articles of Association of the Bank. Members
+of the Board of Directors and the Senior Management
+diligently and faithfully performed their duties, and the
+Board of Supervisors did not find any violation of laws
+and regulations, or any circumstance that contravened the
+interests of the Bank in their performance of duties during
+the reporting period.
+Preparation of Annual Report Preparation and
+review procedures of the Bank's Annual Report were in
+compliance with laws, regulations and regulatory rules.
+Contents of this report reflected the actual conditions of
+the Bank truly, accurately and completely.
+Use of Proceeds from Fundraising Activities During
+the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose
+stated in the prospectuses.
+Purchase and Sale of Assets During the reporting
+period, the Board of Supervisors did not find any insider
+trading or any circumstance that contravened the
+shareholders' interests or caused the loss of the Bank's
+assets in the process of the Bank's purchase or sale of
+Performance of the Board of Supervisors. In 2021, the
+Board of Supervisors held nine meetings, considered 20
+proposals including proposals on the 2020 work report
+of the Board of Supervisors and assessment report on
+the duty performance, heard nine reports on the topics
+including the operation, development strategy planning
+and the Group's AML work, and reviewed 43 reports
+including reports on the quarterly supervision and relevant
+surveys of the Board of Supervisors in 2021. It issued
+opinions in an objective and fair manner and appropriately
+exercised voting rights. The members of the Board of
+Supervisors diligently and faithfully fulfilled their duties,
+attended three Shareholders' General Meetings, and
+attended nine meetings of the Board of Directors and 36
+meetings of special committees as non-voting attendees.
+They input adequate time and effort in supervisory
+inspections, attached equal importance to theoretical
+learning and experience summary from practice, with an
+aim to further build up their duty performance ability.
+External supervisors of the Bank worked for more than
+15 working days in the Bank, complying with the relevant
+requirements.
+Connected Transactions During the reporting period,
+the connected transactions of the Bank were conducted
+on normal commercial terms. The Board of Supervisors
+did not find any circumstance that infringed upon the
+interests of the Bank. The approval, voting, disclosure
+and implementation of connected transactions complied
+with applicable laws and regulations and the Articles of
+Association of the Bank.
+Green Office
+assets.
+The Bank was actively engaged in the issuance,
+underwriting and investment of green bonds, and provided
+green financial support for the key areas of ecological
+civilization development, such as ecological protection
+and clean energy. In 2021, it completed the issuance of
+67 green bonds of various categories as lead underwriter,
+and assisted other issuers in raising funds of RMB140,130
+million with a lead underwriting scale of RMB63,637
+million, including 24 carbon-neutral bonds with a lead
+underwriting scale of RMB24,909 million which ranked
+No.1 in the market. In 2021, the total amount of offshore
+green bonds issued by the Bank reached USD13.06 billion,
+with 11 international awards received by the Bank.
+The Bank made sustained efforts to scale up lending to
+new energy, resource recycling, advanced manufacturing
+and other areas of transformation and upgrading, with
+a focus on providing financing support to small and
+micro enterprises in green and low-carbon industries.
+Taking into account the new types of financing needs
+arising from the low-carbon transformation of small and
+micro enterprise customers, the Bank actively developed
+supporting products to promote innovation of small and
+micro financing products. It remained committed to the
+development approach of "digital inclusive finance",
+accelerated the digital transformation of traditional
+credit products for small and micro enterprises, and
+progressively guided and promoted the digital and low-
+carbon transformation of production and operation of
+micro and small enterprises. By actively taking advantage of
+innovative financial instruments such as digital credit note,
+it worked to increase the supply of funds and support for
+small and micro enterprises in green industry chains such as
+clean energy, pollution control and resource recycling.
+of domestic loans granted to such green fields as energy
+saving and environmental protection, clean production,
+clean energy, ecological environment, green upgrade of
+infrastructures and green services, representing an increase
+of RMB634,902 million over the end of the previous year.
+In 2021, green projects supported by the Bank's green
+loans converted into savings of 47,381.3 thousand tons of
+standard coal, a reduction of 98,846.9 thousand tons in
+carbon dioxide emissions.
+Green Finance
+During the reporting period, being fully committed to
+the strategic plan of carbon peak and carbon neutrality,
+the Bank established and improved the green financial
+development system, issued the Work Plan of Industrial
+and Commercial Bank of China Limited for Carbon Peak
+and Carbon Neutrality (Trial), and set up the Steering
+Group for Carbon Peak and Carbon Neutrality to carry
+out the systematic planning and overall deployment of
+the Bank's carbon neutrality efforts. Leveraging on the
+investment and financing toolkit of "loan, bond, stock,
+agency, lease and consultant", the Bank promoted
+investment and financing restructuring across all regions,
+increased financial support for green technology, and
+made every effort to drive innovation in financial products
+and services. Progress was made in approaching the
+national carbon emissions trading market by offering it
+comprehensive financial services. ICBC Credit Suisse, one
+of the Bank's subsidiaries, launched an ESG-themed ETF
+that was the first one of the kind approved in the industry,
+and ICBC Wealth Management released the first ESG-
+themed net worth-based wealth management product in
+the industry. The Bank actively supported the innovation-
+driven development of the national pilot zone for green
+finance reform and innovation, and further strengthened
+the environmental and social risk prevention and control.
+It also launched the "ICBC ESG" column on its official
+website, through which the 2021 interim ESG special
+report was released for the first time globally. Moreover,
+further progress was made in exchange, cooperation and
+prospective studies on green finance.
+Fulfillment of Environmental and
+Corporate Social Responsibilities
+The Bank continuously refined the green finance policy
+system, intensified the implementation of green finance
+planning, and strengthened the policy guidance of
+differentiated investment and financing to positively
+advance the green adjustment of investment and
+financing structure. As part of its efforts to intensify the
+management of environment (climate) and social risks, the
+Bank fully implemented the green-classified management
+of investment and financing business, actively advanced
+systematic control over environment (climate) and social
+risks of investment and financing, and took the initiative to
+conduct the climate risks studies. As at the end of 2021,
+the Bank recorded a balance of RMB2,480,621 million
+ICBC
+134
+Save as disclosed above, the Board of Supervisors had no
+objection to any other matters during the reporting period.
+Implementation of Information Disclosure
+Rules During the reporting period, the Bank performed
+its duty of information disclosure in compliance with the
+regulatory requirements, implemented the information
+disclosure management rules in earnest, and disclosed
+information in a timely and fair manner. Information
+disclosed was authentic, accurate and complete.
+Review of the Internal Control Assessment
+Report The Board of Supervisors reviewed the 2021
+Internal Control Assessment Report of the Bank and had
+no objection to the report.
+Implementation of Resolutions Passed at the
+Shareholders' General Meeting During the reporting
+period, the Board of Supervisors had no objection to the
+reports or proposals presented by the Board of Directors to
+the Shareholders' General Meeting for consideration. The
+Board of Directors earnestly implemented the resolutions
+approved at the Shareholders' General Meetings.
+Environmental and Social Responsibilities
+36.
+Share Capital
+37.
+Application of the New and
+3.
+217
+Other Liabilities
+161
+1.
+2.
+214
+35. Debt Securities Issued
+161
+Corporate Information
+217
+214
+34. Due to Customers
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Basis of Preparation
+Amendments to IFRSS
+39. Reserves
+38.
+42. Interests in Structured Entities
+184
+Net Interest Income
+6.
+225
+Cash and Cash Equivalents
+41.
+183
+Estimates
+162
+224
+40.
+5. Significant Accounting Judgements and
+223
+214
+164
+Summary of Significant Accounting Policies
+4.
+218
+Other Equity Instruments
+Other Comprehensive Income
+Certificates of Deposit
+Statement of Changes in Equity
+159
+209
+28. Deferred Tax Assets and Liabilities
+AUDITED FINANCIAL STATEMENTS
+208
+27. Property and Equipment
+144
+INDEPENDENT AUDITOR'S REPORT
+Pages
+Pages
+CONTENTS
+Dec
+Nov
+Oct
+Sep
+Aug
+July
+June
+May
+Apr
+Mar
+Consolidated:
+33.
+29.
+211
+Statement of Cash Flows
+214
+Repurchase Agreements
+32.
+157
+213
+Institutions
+155
+Statement of Financial Position
+31. Due to Banks and Other Financial
+154
+Other Comprehensive Income
+226
+213
+Fair Value Through Profit or Loss
+Financial Liabilities Designated as at
+30.
+153
+Statement of Profit or Loss
+Statement of Profit or Loss and
+Other Assets
+194
+17. Dividends
+274
+Domestic Branches
+Data Center
+Software
+Development Center
+Business Research &
+Development Center
+of Financial Managers
+Hangzhou Institute
+Changchun Institute
+of Financial Managers
+Department
+Private Banking
+Organizational Chart
+Overseas Institutions
+Domestic Institutions
+Transferred Financial Assets
+227
+8.
+Net Trading Income
+185
+44. Assets Pledged as Security
+228
+Domestic Subsidiaries
+and their Branches
+Tier-one Branches
+(including Directly Managed Branches)
+(36)
+Banking Departments of Tier-one
+Branches and Tier-two Branches (459)
+Inspection Office of
+the Party Committee
+Modern Finance
+Research Institute
+Culture
+Department
+Party-related
+Affairs
+Department
+Management
+Department
+Corporate
+Department
+Information
+Management
+Operation
+Department
+Financial Technology
+9.
+Corporate Strategy and
+} }
+Finance & Accounting
+Department
+D D D D D D G D
+Overseas Subsidiaries
+and their Institutions
+(367)
+Overseas Branches
+and their Institutions
+(54)
+ICBC-AXA
+ICBC Credit Suisse
+Asset Management
+ICBC Leasing
+Grassroots Branches
+(15,508)
+CHROMBRER
+Financial Institutions
+Net Gains on Financial Investments
+45. Share Appreciation Rights Plan
+16. Profit Attributable to Equity Holders
+Statement of Changes in Equity
+of the Parent Company
+192
+of the Bank
+273
+Feb
+193
+52. Events After the Reporting Period
+274
+18. Earnings Per Share
+193
+53. Comparative Amounts
+274
+19. Cash and Balances with Central Banks
+194
+54. Approval of the Consolidated Financial
+20. Due From Banks and Other
+Statements
+51. Statement of Financial Position and
+192
+15. Income Tax Expense
+266
+228
+10. Other Operating Income, Net
+186
+46. Commitments and Contingent Liabilities
+229
+11. Operating Expenses
+186
+47. Related Party Disclosures
+231
+185
+12. Directors' and Supervisors' Remuneration
+48. Segment Information
+237
+13. Five Highest Paid Individuals
+191
+49. Financial Risk Management
+242
+14. Impairment Losses on Assets
+191
+50. Fair Value of Financial Instruments
+187
+Jan
+Material Assets Acquisition, Sale and
+Merger During the reporting period, the Bank had no
+material assets acquisition, sale and merger.
+9
+ICBC
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+Expected credit loss allowance of loans and advances
+to customers measured at amortised cost
+The Group uses an expected credit loss ("ECL") model
+to calculate the loss allowance for loans and advances to
+customers measured at amortised cost in accordance with
+IFRS 9.
+As at 31 December 2021, the Group's loans and
+advances to customers measured at amortised cost was
+RMB20,174,699 million, and the related impairment
+provision was RMB603,764 million.
+The management exercised significant judgements and
+estimation in its assessment of ECL allowance of loans and
+advances to customers measured at amortised cost. They
+include the determination of staging of loans and advances
+to customers including determining whether the credit risk
+has increased significantly and credit impairment events
+have occurred; the determination of key parameters used
+in the ECL model including probability of default (PD), loss
+given default (LGD), exposure at default (EAD), discount
+rate, and forward-looking information for stage 1 and
+2 corporate loans and advances, discounted bills and all
+personal loans and advances; the determination of key
+parameters used in discounted cash flow assessment in
+respect of stage 3 corporate loans and advances including
+recoverable cash flows and discount rates.
+How our audit addressed the key audit matter
+Our audit procedures in respect of expected credit loss
+allowance of loans and advances to customers measured at
+amortised cost included the following:
+(1)
+Design and operating effectiveness of key internal
+controls
+•
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls relating to approval, recording,
+monitoring and regular evaluation of internal
+credit risk ratings which are relevant inputs to
+the ECL model;
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls of ECL model, including the selection,
+approval, and application of ECL model
+methodology, on-going model monitoring,
+input of underlying data and parameters, and
+loan staging based on customer asset quality,
+cash flow projection used in the discounted
+cash flow method, and the review and
+approval of forward-looking information;
+understood, assessed and tested the
+information technology system and design and
+operating effectiveness of the related controls,
+including general information technology
+controls, data transmission between systems,
+mapping of parameters of ECL model, and
+system calculation of loss allowance.
+Annual Report 2021
+145
+Independent Auditor's Report
+Key audit matters (continued)
+144
+Key audit matter
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the Code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code"), and we have fulfilled our other ethical responsibilities
+in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
+basis for our opinion.
+23. Loans and Advances to Customers
+199
+24. Financial Investments
+201
+25. Investments in Subsidiaries
+205
+26. Investments in Associates and
+Joint Ventures
+207
+Annual Report 2021
+143
+Independent Auditor's Report
+Deloitte.
+To the Shareholders of Industrial and Commercial Bank of China Limited
+(Incorporated in the People's Republic of China with limited liability)
+Opinion
+德勤
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank")
+and its subsidiaries (collectively referred to as the "Group") set out on pages 153 to 274, which comprise the consolidated
+statement of financial position as at 31 December 2021, the consolidated statement of profit or loss, the consolidated
+statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
+consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other
+explanatory information.
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
+31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended
+in accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+Basis for opinion
+Key audit matters
+Expected credit loss allowance of loans and advances
+to customers measured at amortised cost (continued)
+Due to the significance of allowance for impairment losses
+of loans and advances to customers measured at amortised
+cost and the associated ECL allowance and the significant
+judgements and estimation exercised by management in
+estimating ECL, we identified this as a key audit matter.
+Refer to Note 4 (10), Note 5, Note 14, Note 23, and Note
+49(a) to the consolidated financial statements for relevant
+disclosures.
+How our audit addressed the key audit matter
+(2)
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+Consolidation of structured entities
+Structured entities mainly include wealth management
+products, investment funds, trust plans, asset management
+plans and asset-backed securities in which the Group has
+interests in them through their initiation, management or
+investment.
+In determining whether the Group has control and
+therefore should consolidate a structured entity,
+management is required to consider the power it
+possesses, its exposure to variable returns, and its ability
+to use its power to affect returns. The Group is required
+to collectively consider the relevant facts and substance to
+assess whether it has control over the structured entity.
+We identified the consolidation of structured entities as a
+key audit matter because the amount involved is significant
+and the evaluation on whether the Group has control
+over the structured entities requires significant accounting
+judgement.
+Refer to Note 4(2), Note 5 and Note 42 to the consolidated
+financial statements for relevant disclosures.
+How our audit addressed the key audit matter
+Our audit procedures in respect of consolidation of
+structured entities included the following:
+Understood, assessed and tested the related design and
+operating effectiveness of the internal controls relating to
+the consolidation of structured entities.
+Selected samples to perform the following audit
+procedures:
+inspected agreements relating to the structured
+entity and understood the purpose of its set
+up; assessed the power the Group has over the
+structured entity according to the Group's rights and
+obligations under different transaction structures and
+its involvement with the structured entity;
+verified the analysis on the Group's variable
+return which includes, but is not limited to, fixed
+management fee and performance fees obtained
+through acting as asset manager, as well as the
+returns obtained from holding an interest in a
+structured entity, and providing liquidity support or
+other support;
+analysed the scope of the Group's decision-
+making power over the structured entity, the level
+of remuneration obtained from providing asset
+management services, the risk of variable return
+borne by holding other interests in the structured
+entity and the substantive rights held by other
+participants, checked the Group's analysis on the
+magnitude and variability of variable return, and
+assessed whether the Group acts as principal or
+agent in the structured transaction;
+assessed
+the management's decision on the
+consolidation of structured entities through carrying
+out the above procedures.
+148
+ICBC
+147
+Annual Report 2021
+performed credit assessments on borrower's
+and guarantor's financial information,
+collateral valuation and other sources of
+repayment for the selected stage 3 credit-
+impaired corporate loans and advances, tested
+the recalculation of impairment provision
+based on the recoverable cash flows and
+discount rates, and evaluated whether there
+was any material misstatement.
+analysed the borrower's financial and non-
+financial information, and other available
+information, and evaluated the reasonableness
+of management's judgement on staging,
+including whether credit risk has increased
+significantly since initial recognition and
+whether credit impairment events have
+occurred by reviewing the credit files,
+interviewing management, independently
+searching for publicly available information and
+exercising professional judgement;
+ECL model
+assessed the reliability and appropriateness
+of the ECL model and the reasonableness of
+key parameters used in the model, including:
+PD, LGD, EAD, discount rate, forward-looking
+adjustments, and evaluated the rationality of
+the key management judgements on those key
+parameters;
+7.
+Net Fee and Commission Income
+185
+43.
+assessed the internal credit risk rating
+benchmark used in the ECL model by reviewing
+its periodic validation and monitoring report to
+evaluate the reasonableness of the validation
+approach, completeness of the validation
+scope and accuracy of the validation, and
+selected samples to verify the accuracy of
+internal rating calculation;
+verified, on a sample basis, the accuracy of
+ECL model data input such as loan agreement
+amount, due date, interest rate, guarantee
+method;
+assessed the reasonableness of the selection
+and weighting of economic indicators, multiple
+macro-economic scenarios, and other inputs
+and assumptions used by management in the
+forward-looking adjustments; assessed the
+reasonableness of forecasted macro-economic
+indicators and industry data by comparing to
+available third party information, and reviewed
+the sensitivity analysis of economic indicators;
+verified, on a sample basis, the calculation of
+ECL model, and tested whether the model
+reasonably reflected management's modelling
+methodology;
+198
+performed back-testing, and verified the results
+of the model using actual observable data, and
+evaluated whether there was any indication of
+management bias.
+ICBC
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+Expected credit loss allowance of loans and advances
+to customers measured at amortised cost (continued)
+How our audit addressed the key audit matter
+(3)
+Risk based sample selection for credit review
+selected samples for credit review by focusing
+on industries that are significantly affected
+by fluctuations of economic cycle and policy
+regulations, regions with high credit risk
+exposure, and loans with other high-risk
+characteristics such as non-performing loans,
+overdue performing loans, rescheduled loans
+and borrowers with negative publicity;
+•
+146
+8
+22. Reverse Repurchase Agreements
+195
+Material Related Party Transactions
+During the reporting period, the Bank did not enter into
+any material related party transactions.
+Occupation of Fund by Controlling
+Shareholders and Other Related
+Parties During the reporting period, none of the
+controlling shareholders and other related parties of the
+Bank occupied any fund of the Bank. The auditors have
+issued the Special Explanation on the Occupation of Fund
+by Controlling Shareholders and Other Related Parties of
+Industrial and Commercial Bank of China Limited in 2021.
+Annual Report 2021
+139
+Significant Events
+Commitments
+Shareholder
+Huijin
+Type of
+commitment
+Commitment of
+non-competition
+SSF
+Commitment of
+performing the
+obligation of
+lock-up period
+for A shares
+Time and term of
+commitment
+October 2006/
+No specific term
+November 2010/
+No specific term
+Taking effect from
+December 2019/
+Above three years
+Legal document
+under which the
+commitment is
+made
+Prospectus of
+Industrial and
+Commercial Bank
+of China Limited
+on Initial Public
+Offering (A Share)
+Prospectus on A
+Share Rights Issue
+of Industrial and
+Commercial Bank
+of China Limited
+Simplified Report of
+Changes in Equity of
+National Council for
+Social Security Fund
+Commitment
+External Guarantees During the reporting
+period, the Bank did not enter any guarantee contract
+against the resolution procedures for external guarantees
+that are prescribed by laws, administrative regulations or
+CSRC.
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or
+the listing place of the Bank, Huijin
+will not engage in or participate in any
+competitive commercial banking business
+including but not limited to granting
+loans, attracting deposits and providing
+settlement, fund custody, bank card
+and money exchange services. However,
+Huijin can engage in or participate in
+some competitive businesses by investing
+in other commercial banks. In this regard,
+Huijin has committed that it will: (1)
+fairly treat the investments in commercial
+banks and will not make any decision or
+judgment that will have adverse impact
+on the Bank or be beneficial to other
+commercial banks by taking advantage
+of the status of being a shareholder of
+the Bank or information obtained by
+taking advantage of the status of being a
+shareholder of the Bank; and (2) perform
+the shareholders' rights for the maximum
+interests of the Bank.
+Key Audit Matters The Audit Committee
+has reviewed the key audit matters in the audit report
+and concluded that it is unnecessary to provide a
+supplementary explanation.
+Material Guarantees The provision of guarantees
+is in the ordinary course of business of the Bank. During
+the reporting period, the Bank did not have any material
+guarantee that needs to be disclosed except for the
+financial guarantee services within the business scope as
+approved by PBC and the CBIRC.
+10
+11
+12
+Auditor's Report and
+Financial 
+Statements
+Secondary reporting line
+Primary reporting line
+Rural Banks
+ICBC Wealth Management
+ICBC Investment
+141
+Staff Union Working
+Committee
+Significant Events
+Material Lawsuits or Arbitration
+Cases During the reporting period, the Bank incurred
+no material lawsuits or arbitration cases. It was involved
+in several legal disputes in its ordinary course of business.
+Most of these cases were initiated by the Bank to recover
+non-performing loans, while some were related to disputes
+with clients. As at 31 December 2021, the amount of
+cases pending judgements or arbitrations awards in which
+the Bank and/or its subsidiaries are defendants totaled
+RMB6, 165 million, and the Bank does not expect any
+material adverse effect from the above-mentioned cases on
+the Bank's business, financial position or operating results.
+Credit Standing During the reporting period,
+neither the Bank nor its controlling shareholders had
+ever failed to fulfil obligations provided in effective legal
+documents issued by court for material lawsuits, nor had
+there been any outstanding debt of significant amount.
+Implementation of Share Incentive Plan
+and Employee Stock Ownership Plan
+during the Reporting Period During the
+reporting period, the Bank did not implement any share
+incentive plan or any employee stock ownership plan.
+Please refer to "Note 47. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws
+and regulations of China and the relevant accounting
+standards.
+Material Contracts and Performance of
+Obligations thereunder
+Material Trust, Sub-contract and
+Lease During the reporting period, the Bank had not
+held on trust to a material extent or entered into any
+material sub-contract or lease arrangement in respect
+of assets of other corporations, which were subject to
+disclosure, and no other corporation had held on trust to
+a material extent or entered into any material sub-contract
+or lease arrangement in respect of the Bank's assets, which
+were subject to disclosure.
+Other Material Contracts During the reporting
+period, the Bank did not have any other material contracts
+which were subject to disclosure.
+According to the Notice of the State
+Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned
+Capital to Fortify Social Security Funds
+(Guo Fa [2017] No. 49), SSF shall perform
+the obligation of more than 3-year lock-
+up period as of the date of the receipt of
+transferred shares.
+Fulfillment of
+commitment
+As at 31
+December 2021,
+Huijin strictly
+fulfilled the above
+commitment
+and did not
+do anything in
+violation of the
+commitment.
+Sub-bureau
+Internal departments and directly managed
+institutions of the Head Office
+Shareholders'
+General Meeting
+Board of Supervisors
+Supervisory Board Office
+Personal Banking
+Promotion Committee
+Financial Technology and
+Digital Development
+Committee
+Consumer Protection
+Committee
+Corporate &
+Investment Banking
+Promotion Committee
+Inclusive Finance and
+Rural Revitalization
+Promotion Committee
+Institutional Banking
+Promotion Committee
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Senior Management
+Financial Assets Service
+Management Committee
+UNAUDITED SUPPLEMENTARY INFORMATION
+21. Derivative Financial Instruments
+Internal Audit Bureau
+Internal Audit
+US Risk Committee
+Audit Committee
+As at 31
+December 2021,
+SSF strictly
+fulfilled the above
+commitment
+and did not
+do anything in
+violation of the
+commitment.
+Disciplinary Actions
+During the reporting period, the Bank was not subject to any case filing investigation for
+suspected crime, nor was any of its controlling shareholders, Directors, Supervisors and Senior Management members
+subject to coercive measures for suspected crime; neither the Bank nor its controlling shareholders, Directors, Supervisors
+and Senior Management members were subject to any criminal penalty or any case filing investigation by CSRC for
+suspected illegality or irregularity or administrative penalty by CSRC or material administrative penalty by other competent
+authority; none of its controlling shareholders, Directors, Supervisors and Senior Management members was held in
+retention by the disciplinary inspection and supervision organ because of suspected serious illegality or irregularity or
+work-related crime, which affected their duty performance; none of its Directors, Supervisors and Senior Management
+members was subject to coercive measures taken by other competent authority for suspected illegality or irregularity, which
+affected their duty performance; neither the Bank nor any of its controlling shareholders, Directors, Supervisors and Senior
+Management members was subject to any administrative or regulatory measures taken by CSRC or disciplinary sanction
+imposed by stock exchanges.
+140
+ICBC
+Board of Directors'
+TO THE CONSOLIDATED FINANCIAL STATEMENTS 275
+Office
+Board of Directors
+Strategy
+Committee
+Risk
+Management
+Committee
+Compensation
+Committee
+Corporate Social
+Responsibility and Consumer
+Protection Committee
+Nomination
+Committee
+Related Party
+Transactions Control
+Committee
+Annual Report 2021
+As at 31 December 2021, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Retired Staff
+Service and Management
+Department
+Security Department
+34,258
+61,782
+26
+6,265,668
+6,830,933
+― Financial investments measured at amortised cost
+Investments in associates and joint ventures
+1,540,988
+1,803,604
+Financial investments measured at fair value through
+other comprehensive income
+784,483
+623,223
+18,136,328
+8,591,139
+9,257,760
+24
+739,288
+134,155
+76,140
+663,496
+20,109,200
+1,081,897
+3,537,795
+3,098,438
+827,150
+20
+19
+22223 2
+21
+Financial investments measured at fair value through
+profit or loss
+41,206
+Property and equipment
+27
+290,296
+30
+Financial liabilities designated as at fair value through profit or loss
+54,974
+39,723
+Due to central banks
+31 December 2020
+31 December 2021
+Notes
+LIABILITIES
+(In RMB millions, unless otherwise stated)
+As at 31 December 2021
+Consolidated Statement of Financial Position
+Financial investments
+155
+The accompanying notes form part of these consolidated financial statements.
+33,345,058
+729,258
+707,862
+35,171,383
+TOTAL ASSETS
+29
+Other assets
+67,713
+79,259
+28
+Deferred tax assets
+286,279
+Annual Report 2021
+Loans and advances to customers
+Reverse repurchase agreements
+Derivative financial assets
+(12,353)
+(v) Foreign currency translation differences
+14
+541
+(iv) Other comprehensive income recognised under the equity
+method
+(253)
+442
+(iii) Reserve from cash flow hedging instruments
+1,051
+1,827
+(3,042)
+1,623
+(16,212)
+fair value through other comprehensive income
+(ii) Credit losses of debt instruments measured at fair value through
+other comprehensive income
+8
+28
+(iii) Other
+(5)
+15
+the equity method
+(ii) Other comprehensive income recognised under
+1,289
+(1,180)
+(i) Changes in fair value of equity instruments designated as at
+fair value through other comprehensive income
+40
+317,685
+(b) Items that may be reclassified subsequently to profit or loss:
+(i) Changes in fair value of debt instruments measured at
+87,180
+(vi) Other
+1,311
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+31 December 2021 31 December 2020
+Notes
+(In RMB millions, unless otherwise stated)
+As at 31 December 2021
+Consolidated Statement of Financial Position
+ICBC
+154
+The accompanying notes form part of these consolidated financial statements.
+301,846
+885
+342,044
+1,955
+Non-controlling interests
+300,536
+340,089
+Equity holders of the parent company
+Total comprehensive income for the year attributable to:
+301,846
+342,044
+Total comprehensive income for the year
+(15,839)
+(8,172)
+Subtotal of other comprehensive income for the year
+1,310
+87,938
+Derivative financial liabilities
+21
+capital instruments
+Capital Surplus
+Non-
+Investment currency Cash flow
+Other
+Share equity
+Foreign
+Reserves
+Attributable to equity holders of the parent company
+(i)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Consolidated Statement of Changes in Equity
+Finance and Accounting Department
+General Manager of
+Liu Yagan
+ICBC
+156
+The accompanying notes form part of these consolidated financial statements.
+and President
+Liao Lin
+Vice Chairman
+Chen Siqing
+Chairman
+33,345,058
+35,171,383
+2,909,515
+3,275,258
+16,013
+reserve
+reserve
+Balance as at 1 January 2021
+356,407 225,819 148,640 322,911
+Capital injection by
+Appropriation to general reserve (ii)
+Appropriation to surplus reserve (i)
+(9,607)
+(9,607) (9,607)
+holders (note 17)
+Distributions to other equity instrument
+(94,804)
+(94,804) (94,804)
+(note 17)
+Dividends ordinary shares 2020 final
+1,955 342,044
+17,503
+77 (8,172)
+Retained
+hedging Other
+controlling
+reserve reserves Subtotal earnings Total interests equity
+(27,882) (4,725) (304) 800,718 1,510,558 2,893,502 16,013 2,909,515
+348,338 348,338 1,878 350,216
+1,469 (8,249)
+(8,249)
+1,469 (8,249) 348,338 340,089
+482
+482
+(12,117)
+1,917
+Total comprehensive income
+(12,117)
+1,917
+Other comprehensive income
+Profit for the year
+General revaluation translation
+reserve reserve
+22,377
+reserve
+339,701
+Total
+350,216
+TOTAL EQUITY AND LIABILITIES
+Non-controlling interests
+2,881
+89,785
+92,443
+5,624
+28
+25,134,726
+26,441,774
+34
+Deferred tax liabilities
+Income tax payable
+Due to customers
+335,676
+290,342
+33
+Certificates of deposit
+293,434
+365,943
+32
+99,251
+Repurchase agreements
+2,784,259
+2,921,029
+31
+Due to banks and other financial institutions
+140,973
+71,337
+35
+791,375
+798,127
+36
+2,893,502
+3,257,755
+1,510,558
+1,620,642
+Retained earnings
+800,718
+926,375
+39
+Reserves
+225,819
+354,331
+38
+TOTAL EQUITY
+Other equity instruments
+356,407
+37
+Share capital
+Equity attributable to equity holders of the parent company
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+30,435,543
+31,896,125
+712,770
+789,355
+356,407
+34,258
+2020
+Note
+Balance as at 1 January 2020
+Other
+equity Capital
+capital instruments
+356,407 206,132 149,139 292,291
+Surplus
+reserve
+reserve
+reserve
+Investment currency
+General revaluation translation
+reserve
+reserve
+305,019 23,280 (18,568)
+Profit for the year
+Other comprehensive income
+(672)
+Total comprehensive income
+(672)
+៩៩
+(15,753)
+(15,753)
+(272) 1,327 (15,370)
+(272) 1,327 (15,370)
+Cash flow
+hedging Other
+Retained
+reserve reserves Subtotal earnings Total interests equity
+(4,453) (1,597) 745,111 1,368,536 2,676,186 15,817 2,692,003
+315,906 315,906 1,779 317,685
+(15,370) (469) (15,839)
+315,906 300,536 1,310
+301,846
+Non-
+controlling
+Total
+Dividends ordinary shares 2019 final
+(note 17)
+(93,664) (93,664)
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+Share
+Foreign
+Reserves
+Attributable to equity holders of the parent company
+other equity instrument holders
+(11,218)
+63
+Dividends to non-controlling shareholders
+Other comprehensive income
+transferred to retained earnings
+334
+334
+(334)
+Balance as at 31 December 2021
+356,407 354,331 148,703 357,169 438,952 24,628 (39,999) (4,243) 1,165
+926,375 1,620,642 3,257,755 17,503 3,275,258
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+139,730
+63
+(11,155)
+(11,155)
+(465) (465)
+(ii)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB56 million and RMB1,764
+million, respectively.
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB47 million and RMB1,746
+million, respectively.
+The accompanying notes form part of these consolidated financial statements.
+Annual Report 2021
+157
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+139,730
+Capital reduction by
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+225,819 148,640 322,911 339,701 22,377 (27,882) (4,725)
+356,407
+Balance as at 31 December 2020
+98
+98
+(34) 5,530 (5,432)
+3
+(3)
+218
+(221)
+(221)
+(10) 6,439
+(865)
+Other
+to retained earnings
+Other comprehensive income transferred
+(337)
+(337)
+Dividends to non-controlling shareholders
+(1,279)
+(780)
+(499)
+(499)
+(499)
+Change in shareholding in subsidiaries
+19,687
+(304) 800,718 1,510,558 2,893,502
+16,013 2,909,515
+(i)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB101 million and RMB935
+million, respectively.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+Auditor's responsibilities for the audit of the consolidated financial statements
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion solely
+to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person
+for the contents of this report.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+(93,664)
+Distributions to other equity instrument
+holders (note 17)
+(8,839) (8,839)
+(8,839)
+Appropriation to surplus reserve (i)
+Responsibilities of the directors for the consolidated financial statements
+Appropriation to general reserve (ii)
+34,682
+31,485
+(31,485)
+34,682
+(34,682)
+Capital injection by other equity
+instrument holders
+ICBC
+158
+The accompanying notes form part of these consolidated financial statements.
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB11 million and RMB1,435
+million, respectively.
+(ii)
+31,485
+other equity instrument holders
+139,730
+(99,251)
+390,822
+422,030
+(202,668)
+(202,623)
+14
+(206,585)
+(236,227)
+11
+800,075
+860,880
+8,044
+11,781
+10
+11,829
+16,440
+2,222
+8,955
+819
+131,215
+133,024
+7
+(15,453)
+(15,703)
+146,668
+148,727
+2,869
+1,304
+424,899
+392,126
+(a) Items that will not be reclassified to profit or loss:
+Other comprehensive income (after tax, net):
+Profit for the year
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+153
+Annual Report 2021
+0.86
+0.95
+0.86
+0.95
+77
+317,685
+1,878
+350,216
+315,906
+348,338
+The accompanying notes form part of these consolidated financial statements.
+18
+18
+00 00
+317,685
+350,216
+(74,441)
+(74,683)
+15
+1,779
+646,765
+690,680
+6
+Interest expense
+Interest income
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Consolidated Statement of Profit or Loss
+ICBC
+152
+30 March 2022
+Certified Public Accountants
+Hong Kong
+Deloitte Touche Tohmatsu
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Wu Wei Jun, David.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
+NET INTEREST INCOME
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+•
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Independent Auditor's Report
+151
+Annual Report 2021
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+•
+(34,258)
+99,251
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+2021
+Fee and commission income
+NET FEE AND COMMISSION INCOME
+(445,756)
+(471,538)
+1,092,521
+1,162,218
+66
+2020
+2021
+Notes
+Diluted (RMB yuan)
+Basic (RMB yuan)
+EARNINGS PER SHARE
+PROFIT FOR THE YEAR
+Fee and commission expense
+Non-controlling interests
+Profit for the year attributable to:
+PROFIT FOR THE YEAR
+Income tax expense
+PROFIT BEFORE TAXATION
+Share of results of associates and joint ventures
+OPERATING PROFIT
+Impairment losses on assets
+Operating expenses
+OPERATING INCOME
+Other operating income, net
+Net gains on financial investments
+Net trading income
+Equity holders of the parent company
+19,687
+19,687
+•
+Key audit matters (continued)
+Key audit matter
+As a large banking group, the Group's IT systems are
+complex.
+To ensure the accuracy of financial reports, IT over
+financial reporting and its related general controls and
+automated controls are required to be designed and
+operated effectively. The related general controls include
+IT governance, controls over program development and
+changes, access to programs and data and IT operations.
+Automated controls include system calculations and data
+logic relating to significant accounts, as well as interfaces
+between business management systems and accounting
+systems.
+With the rapid increase in the volume of on-line
+transactions of the Group, as well as the continuous
+development and application of new technologies and
+open banking that increased third party network access,
+the Group faces increasing challenges on cyber security
+and data protection that warrant close monitoring of their
+potential impact on financial reporting related IT systems.
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are highly
+reliant on complex IT systems and control processes,
+and the IT systems are required to serve the Group's
+global customer base, handle large volumes of frequent
+transactions, and continue to develop in response to
+changing business needs.
+How our audit addressed the key audit matter
+Our audit procedures in respect of IT systems and controls
+over financial reporting included the following:
+understood, assessed and tested the design and
+operating effectiveness of key internal controls of the
+IT systems relevant to financial reporting;
+understood, assessed and tested the design and
+operating effectiveness of automated controls
+relevant to significant accounts and assertions or risk
+of material misstatement, and such IT automated
+controls include accuracy of system calculation
+logic and consistency of data transmission, covering
+business in corporate banking, personal banking,
+and financial markets, as well as financial reporting
+process;
+understood, assessed and tested the design and
+operating effectiveness of controls over cyber
+security management mechanism, the operational
+security of key information infrastructure, data and
+customer information management, and system
+operation monitoring and emergency management.
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Other information
+Independent Auditor's Report
+ICBC
+150
+Independent Auditor's Report
+149
+IT systems and controls over financial reporting
+assessed and verified the valuation techniques used
+in the valuation of complex financial instruments
+valuation, selected samples to perform independent
+valuation and compared the results with the Group's
+valuation.
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+Fair value of financial instruments
+The valuation of the Group's financial instruments
+measured at fair value is based on readily available market
+data or valuation models. For financial instruments without
+readily available market data such as debt securities,
+equities, over-the-counter derivative contracts and
+structured deposits, fair values are measured based on
+valuation techniques. The selection of valuation techniques
+and significant unobservable input data requires significant
+accounting judgement and estimation by management.
+As at 31
+Annual Report 2021
+We identified fair value assessment of financial instruments
+as a key audit matter because the amount involved is
+significant and the valuation requires significant judgement
+and estimation, and particularly for level 3 financial
+instruments due to the uncertainty arising from the use of
+unobservable input data.
+Refer to Note 4(7), Note 5, Note 21, Note 22, Note 23,
+Note 24, Note 30, and Note 50 to the consolidated
+financial statements for relevant disclosures.
+December 2021, the Group's financial
+assets that were measured at fair value amounted to
+RMB3,198,887 million, representing 9.10% of total
+assets; financial liabilities that were measured at fair value
+amounted to RMB454,645 million, representing 1.43%
+of total liabilities. Level 3 financial assets and liabilities
+with significant unobservable input data amounted to
+RMB153,164 million and RMB1,993 million respectively.
+How our audit addressed the key audit matter
+Our audit procedures in respect of fair value assessment of
+financial instruments included the following:
+Understood, assessed and tested the design and operating
+effectiveness of internal controls relating to the valuation
+of financial instruments, independent pricing validation,
+and valuation model validation and approval.
+Selected samples to perform the following audit
+procedures:
+.
+evaluated the fair value of level 1 financial
+instruments by comparing the fair value with publicly
+available market observable data;
+evaluated the appropriateness of the Group's
+valuation techniques, inputs and assumptions for
+level 2 and 3 financial instruments, and compared
+the observable market data with publicly available
+market data;
+Net cash flows from investing activities
+(other than repossessed assets)
+Purchases of financial investments
+Proceeds from sale and redemption of financial investments
+Investments in associates and joint ventures
+Proceeds from disposal of associates and joint ventures
+Investment returns received
+Proceeds from disposal of property and equipment and other assets
+CASH FLOWS FROM FINANCING ACTIVITIES
+(84,552)
+Proceeds from issuance of debt securities
+Interest paid on debt securities
+(27,584)
+(38,005)
+13,008
+(3,344,684)
+8,539
+(3,191,273)
+2,423,298
+1,845,743
+Purchases of property and equipment and other assets
+Proceeds from issuance of other equity instruments
+CASH FLOWS FROM INVESTING ACTIVITIES
+1,756,321
+2021
+2,219,487
+311,773
+82,547
+(21,207)
+2,942,248
+Net cash flows from operating activities before tax
+443,536
+1,642,168
+Income tax paid
+Net cash flows from operating activities
+(82,654)
+360,882
+1,557,616
+The accompanying notes form part of these consolidated financial statements.
+Annual Report 2021
+159
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Note
+2020
+(11,690)
+Dividends paid on ordinary shares
+282,407
+(337)
+Cash payment for other financing activities
+(7,813)
+(6,310)
+Net cash flows from financing activities
+(11,553)
+(46,949)
+NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
+(325,227)
+375,570
+Cash and cash equivalents at beginning of the year
+1,791,122
+1,450,413
+Effect of exchange rate changes on cash and cash equivalents
+(29,138)
+(34,861)
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+41
+1,436,757
+(465)
+206
+Dividends paid to non-controlling shareholders
+(9,607)
+(674,556)
+627
+250,962
+(1,135,097)
+139,793
+19,716
+835,441
+927,759
+(26,320)
+(25,137)
+Repayment of debt securities
+(836,623)
+(858,858)
+Cash payment for redemption of other equity instruments
+(11,155)
+Acquisition of non-controlling interests
+(1,279)
+1,261,998
+(94,804)
+(93,664)
+Dividends or interest paid to other equity instrument holders
+(8,839)
+Other liabilities
+(1,662,922)
+269
+Dividend income
+(2,869)
+(1,304)
+28,194
+27,046
+11
+3,125
+2,607
+14
+202,623
+202,668
+(22,300)
+(12,642)
+27,673
+25,549
+(1,964)
+(1,710)
+(18,349)
+(9,814)
+other assets (other than repossessed assets)
+(245,294)
+Net gains on disposal and stocktake of property and equipment and
+Interest income on financial investments
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes
+2021
+2020
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before taxation
+424,899
+392,126
+Adjustments for:
+Share of results of associates and joint ventures
+Depreciation
+Amortisation
+Impairment losses on assets
+Unrealised gains on foreign exchange
+Interest expense on debt securities issued
+Accreted interest on impaired loans
+Net gains on financial investments
+Net gains on changes in fair value
+Due to customers
+(14,473)
+(2,077)
+(43,570)
+(51,517)
+(1,671,052)
+1,791,122
+Net (decrease)/increase in operating liabilities:
+Financial liabilities designated as at fair value through profit or loss
+(853)
+(7,530)
+Due to central banks
+(15,161)
+53,959
+Due to banks and other financial institutions
+158,557
+563,361
+Repurchase agreements
+77,427
+30,155
+Certificates of deposit
+(37,420)
+Other assets
+(12,797)
+(2,079,400)
+Loans and advances to customers
+(1,238)
+9
+(3,388)
+(2,355)
+358,267
+362,842
+Net decrease/(increase) in operating assets:
+Due from central banks
+155,880
+75,762
+Due from banks and other financial institutions
+157,890
+(16,064)
+Financial assets measured at fair value through profit or loss
+143,496
+284,342
+Reverse repurchase agreements
+99,863
+123,955
+(2,184,611)
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+(262,827)
+939,737
+A party is considered to be related to the Group if:
+(a)
+the party is a person or a close member of that person's family and that person:
+(i)
+has control or joint control over the Group;
+(ii)
+has significant influence over the Group; or
+or
+(b)
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+the party is an entity where any of the following conditions applies:
+the entity and the Group are members of the same group;
+(ii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(iii)
+the entity and the Group are joint ventures of the same third party;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v)
+(6) Related parties
+Where goodwill forms part of a CGU or group of CGUs and part of the operation within that unit is disposed of, the
+goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining
+the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative
+values of the operation disposed of and the portion of the CGU or group of CGUS retained.
+Impairment is determined by assessing the recoverable amount of the CGU or group of CGUS to which the goodwill relates.
+Where the recoverable amount of the CGU or group of CGUS is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in subsequent period.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill at year end date. For the purpose of impairment
+testing, goodwill arising in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or group of CGUS, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(3) Non-controlling interests
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity holders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity holders of the Bank.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+statement of equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss
+is recognised.
+(4) Associates and joint ventures
+An associate is an entity in which the Group has significant influence. A joint venture is an arrangement whereby the
+Group and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the
+arrangement. Other than those measured at fair value through profit or loss, the Group's investments in associates or joint
+ventures are accounted for using the equity method.
+Under the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Unrealised profits and losses resulting from transactions between the Group and the associates or joint
+ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture, the retained interest is not re-measured. Instead,
+the investment continues to be accounted under the equity method, and vice versa.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses.
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(5) Business combination and goodwill
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives from host contracts of the acquiree.
+If the business combination is achieved in stages, the acquirer's previously-held equity interest in the acquiree is re-measured
+to the acquisition date fair value through profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration that is classified as a financial asset or financial liability, is
+recognised in profit or loss. If the contingent consideration is classified as equity, it shall not be re-measured, and its
+subsequent settlement is accounted for within equity.
+Annual Report 2021
+165
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and the fair value of the acquirer's previously-held equity interest in the acquiree
+over the net of the acquisition-date amounts of the identifiable assets and liabilities acquired. If the sum of this consideration
+and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is, after reassessment,
+recognised in profit or loss as gains on bargain purchase.
+Business combinations are accounted for by applying the acquisition method. The Group can elect to apply an optional
+concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether the acquired set
+of assets is not a business. If the concentration test is met, the set of assets is determined not to be a business; otherwise,
+the Group shall then perform an assessment in accordance with the requirements of business. The consideration transferred
+is measured at acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the
+Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in
+exchange for control of the acquiree. Any costs directly attributable to the combination are recognised in profit or loss when
+incurred.
+Notes to the Consolidated Financial Statements
+(vi) the entity is controlled or jointly controlled by a person identified in (a);
+(viii) the entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+(In RMB millions, unless otherwise stated)
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets or both. The Group determines the business model for managing the financial assets according to the facts and based
+on the specific business objective for managing the financial assets determined by the Group's key management personnel.
+In assessing whether the contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding, the Group considers the contractual terms of the instrument. For the purposes of this assessment, principal is
+defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value
+of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for
+other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains
+a contractual term that could change the timing or amount of contractual cash flows such that it would not meet the above
+contractual cash flows characteristics.
+Subsequent measurement of financial assets
+Financial assets measured at FVTPL
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Financial assets measured at amortised cost
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, through the amortisation process or in order to recognise impairment gain or loss.
+Debt instruments measured at FVTOCI
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised
+in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are
+reclassified to profit or loss.
+Equity instruments measured at FVTOCI
+These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net
+gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other
+comprehensive income are reclassified to retained earnings.
+(iii) Classification and subsequent measurement of financial liabilities
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+Financial liabilities measured at FVTPL
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial liability)
+or it is designated as such on initial recognition.
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+168
+ICBC
+Interest paid
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+167
+Annual Report 2021
+166
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(7) Financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(i) Initial recognition and measurement of financial instruments
+At initial recognition, financial assets and financial liabilities are measured at fair value. For financial assets and financial
+liabilities measured at fair value through profit or loss ("FVTPL"), any related directly attributable transaction costs are
+charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable
+transaction costs are included in their initial recognised value.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including the
+condition of the asset; and restrictions, if any, on the sale or use of the asset), and use valuation techniques that are
+appropriate in the circumstances and for which sufficient data and other information are available to measure fair value. The
+adopted valuation techniques mainly include market approach, income approach and cost approach.
+(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); or
+(ii) Classification and subsequent measurement of financial assets
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+fair value through other comprehensive income ("FVTOCI"), or at FVTPL.
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+A financial asset is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:
+-
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis, and the investment should meet the definition of an equity instrument from perspective of the issuer.
+All financial assets not classified as measured at amortised cost or FVTOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+Classification of financial assets
+ICBC
+ICBC
+In the Bank's statement of financial position, investments in subsidiaries are stated at cost less impairment losses.
+(In RMB millions, unless otherwise stated)
+3.
+APPLICATION OF THE NEW AND AMENDMENTS TO IFRSS
+(1) Mandatory amendments to IFRSS effective for the current year
+In the current year, the Group has applied, for the first time, the following amendments to IFRSS issued by the IASB which
+are mandatorily effective for the annual periods beginning on or after 1 January 2021 for the preparation of the Group's
+consolidated financial statements:
+Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform (Phase 2)
+Changes in the basis for determining the contractual cash flows as a result of interest rate
+benchmark reform
+For changes in the basis for determining the contractual cash flows of a financial asset or financial liability as a result of
+interest rate benchmark reform, the Group applies the practical expedient to account for these changes by updating the
+effective interest rate. Such change in effective interest rate normally has no significant effect on the carrying amount of the
+relevant financial asset or financial liability.
+A change in the basis for determining the contractual cash flows is required by interest rate benchmark reform if and only if,
+both these conditions are met:
+For the year ended 31 December 2021
+the change is necessary as a direct consequence of interest rate benchmark reform; and
+For other changes made to a financial asset or financial liability in addition to changes to the basis for determining the
+contractual cash flows required by interest rate benchmark reform, the Group first applies the practical expedient to
+the changes required by interest rate benchmark reform by updating the effective interest rate. The Group then applies
+the applicable requirements in IFRS 9 Financial Instruments on modification of a financial asset or a financial liability for
+additional changes to which the practical expedient does not apply.
+Transition and summary of effects
+The Group's business impacted by interest rate benchmark reform are mainly those linked with London Interbank Offered
+Rate, consisting of loans, debt investments and derivatives. The Group considered the application of this amendment had no
+material impact on the Group's financial positions and performance for the current period.
+_
+The Group has early adopted amendments to IFRS 16 COVID 19 Related Rent Concession Beyond 30 June 2021. The
+amendment has no significant financial and operational impacts to the Group.
+162
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+the new basis for determining the contractual cash flows is economically equivalent to the previous basis.
+(2) Issued but not yet effective IFRSS and amendments to IFRSS
+161
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are disclosed in Note 5.
+902,804
+164
+(351,322)
+(393,080)
+The accompanying notes form part of these consolidated financial statements.
+160
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+Annual Report 2021
+(In RMB millions, unless otherwise stated)
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring. On 27 October 2006, the Bank was listed on both Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited.
+The Bank obtained authorisation to carry out banking business with an institution code of No. B0001H111000001 from the
+China Banking and Insurance Regulatory Commission (the "CBIRC") of the PRC. The Bank obtained its business license with
+unified social credit code 91100000100003962T from the State Administration for Industry and Commerce of the PRC. The
+legal representative is Mr. Chen Siqing and the registered office is located at No. 55 Fuxingmennei Avenue, Xicheng District,
+Beijing, the PRC.
+The Bank's stock codes of A Shares and H Shares listed on Shanghai Stock Exchange and The Stock Exchange of Hong Kong
+Limited are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on The Stock Exchange of Hong
+Kong Limited and the stock code is 4620. The Bank's domestic preference shares are listed on Shanghai Stock Exchange and
+the stock codes are 360011 and 360036.
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal financial services, treasury operations, investment banking, asset management, trust, financial leasing, insurance
+and other financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries
+established in Chinese mainland. Overseas establishments refer to branches and subsidiaries established in jurisdictions
+outside Chinese mainland.
+2. BASIS OF PREPARATION
+(1) Statement of compliance
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") promulgated by the International Accounting Standards Board (the "IASB"), and the disclosure requirements of the
+Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
+Limited.
+(2) Basis of preparation of the financial statements
+The consolidated financial statements have been prepared under the historical cost convention, except for certain financial
+instruments, and certain non-financial assets measured at fair value, as further explained in the respective accounting policies
+below.
+1. CORPORATE INFORMATION
+The Group has not applied the following new and revised IFRSS that have been issued but are not yet effective.
+Notes to the Consolidated Financial Statements
+IFRS 17: Insurance Contracts and the related Amendments
+ease transition by deferring the effective date of IFRS 17 to 2023 and by providing additional relief to reduce the effort
+required when applying IFRS 17 for the first time.
+The Group is currently assessing the impact of the standard and its amendments on the Group's financial position and
+financial performance.
+Other new and revised IFRSS that have been issued but are not yet effective are expected to have no material impact on the
+financial position and financial performance of the Group.
+Annual Report 2021
+163
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+4.
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+make financial performance easier to explain; and
+(1) Functional currency and foreign currency translation
+The functional currency of the Group's domestic establishments is Renminbi ("RMB"). The overseas establishments
+determine their own functional currencies which best represent the economic environment they operate in. These financial
+statements are presented in RMB millions except when otherwise indicated.
+Foreign currency translation
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates at the dates of the
+transactions or deemed exchange rates. Monetary assets and liabilities denominated in foreign currencies are retranslated
+into the functional currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences
+arising on the settlement of monetary items or on translating monetary items at period end rates are recognised in profit or
+loss, with the exception that they are taken directly to other comprehensive income when the monetary items are designated
+as part of the hedge of the Bank's net investment in a foreign entity, and the aggregate exchange differences are not
+recognised in profit or loss until the disposal of such net investment.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as
+at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
+using the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a
+foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition
+are treated as foreign assets and liabilities of the foreign operation and translated at the deemed rates at the end of the
+reporting period. The exchange differences are recognised in profit or loss or in other comprehensive income, depending on
+the nature of non-monetary items.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. For overseas business not operating in a
+hyperinflationary economy, all items within equity except for retained earnings are translated at the exchange rates ruling at
+the dates of the initial transactions. Income and expenses in the statement of profit or loss are translated using the exchange
+rates at the date of the transactions or deemed exchange rates. The exchange differences arising on the above translation
+are taken to other comprehensive income. On disposal of a foreign operation, the deferred cumulative amount recognised
+in other comprehensive income relating to that particular foreign operation is recognised in profit or loss. The effect of
+exchange rate changes on cash and cash equivalents is presented separately in the statement of cash flows.
+(2) Subsidiaries
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding
+who controls the entity, and the relevant activities are directed by means of contractual or other arrangements.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+Functional currency
+reduce costs by simplifying certain requirements in the IFRS 17;
+(In RMB millions, unless otherwise stated)
+The IASB issued the amendments to IFRS 17 in 2020 to provide response to the stakeholders and are designed to:
+Amendments to IFRS 3: Reference to the Conceptual Framework'
+Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture³
+Amendments to IAS 1: Classification of Liabilities as Current or Non-current²
+Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies²
+Amendments to IAS 8: Definition of Accounting Estimates²
+2
+Amendments to IAS 16: Property, Plant and Equipment: Proceeds before Intended Use¹
+Amendments to IAS 37: Onerous Contracts
+Cost of Fulfilling a Contract¹
+Amendments to IFRSS: Annual Improvements to IFRSS 2018-2020¹
+Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction²
+Effective for annual periods beginning on or after 1 January 2022.
+2
+Effective for annual periods beginning on or after 1 January 2023.
+3
+Effective for annual periods beginning on or after a date to be determined.
+Further information about those changes that are expected to affect the Group:
+IFRS 17 Insurance Contracts and the related amendments
+1
+IFRS 17 is issued to resolve the comparability issues created by IFRS 4 Insurance Contracts by setting out a single principle-
+based standard for the recognition, measurement, presentation and disclosure of insurance contracts in the financial
+statements of the issuers of those contracts.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in fair value of
+the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in fair value of the hedging instrument are also recognised in profit or loss.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Hedge accounting
+Fair value hedges are hedges of the Group's exposure to changes in fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVTOCI. For fair value hedges, the carrying amount of the hedged item
+not already measured at fair value is adjusted for the gain or loss attributable to the risk being hedged and is taken to profit
+or loss or other comprehensive income. The gains or losses for hedging instrument re-measured at fair value are taken to
+profit or loss or other comprehensive income.
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss.
+Fair value hedges
+When the hedged item in a fair value hedge is measured at amortised cost, any hedge adjustment to its carrying amount is
+amortised to profit or loss. The amortisation is based on a recalculated effective interest rate at the date when amortisation
+begins.
+At the inception of a hedging relationship, the Group formally designates the hedging instruments and the hedged items,
+and documents the hedging relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash
+flows and are assessed on an on-going basis to analyse the sources of hedge ineffectiveness which are expected to affect
+the hedging relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness
+requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains
+the same, the Group would rebalance the hedging relationship.
+If the host contract included in the hybrid contract is a financial asset, the embedded derivative is no longer split from the
+main contract of the financial asset, and the hybrid financial instrument as a whole is related to the classification of the
+financial asset provision. If the host contract included in the hybrid contract is not a financial asset, when the embedded
+derivative's economic characteristics and risks are not closely related to those of the hybrid contract, those separate
+instruments with the same terms as the embedded derivative would meet the definition of a derivative, and the hybrid
+instrument is not carried at FVTPL, derivatives embedded in other financial instruments should be split from the hybrid
+contract and treated as separate derivatives. These embedded derivatives are measured at fair value with the changes in fair
+value recognised in profit or loss.
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+171
+Annual Report 2021
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+Derivatives
+(13) Derivatives and hedge accounting
+Derecognition of financial liabilities
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is
+sold together with an option to repurchase the financial asset at its fair value at the time of repurchase, the Group will
+derecognise the financial asset.
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria
+after taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has
+been sold, terminated or exercised. If the hedged items are derecognised, the unamortised adjustment to carrying amount is
+recorded in profit or loss.
+(In RMB millions, unless otherwise stated)
+172
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk
+(other than financial risk) transferred from the policyholders, the contract is classified as an insurance contract. Insurance risk
+refers to the risk that the combined cost of claims, administration and policy acquisitions may exceed the aggregate amount
+of premiums received and investment income over time. Where the Group undertakes the risks other than insurance risk, the
+contract is classified as a non-insurance contract. Where the Group undertakes both insurance risk and other risks, forming a
+contract with mixed risks, the following stipulations are applied:
+Notes to the Consolidated Financial Statements
+where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+Sales of assets on condition of repurchase
+(ii)
+(i)
+where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and a significant insurance risk test shall be performed based on
+it. If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted
+for as a non-insurance contract.
+Insurance contracts classification
+(15) Insurance contracts
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+173
+Annual Report 2021
+Securities borrowed are not recognised in the statement of financial position, unless they are then sold to third parties, in
+which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+According to the policy of classification of financial assets, the reverse repurchase agreements held by the Group were
+divided into different classifications according to the entity's business model for managing the financial instruments and the
+contractual cash flow characteristics of the assets: financial assets measured at amortised cost and financial assets measured
+at FVTPL. The difference between the purchase and resale prices of reverse repurchase agreements measured at amortised
+cost is treated as an interest income and is amortised over the life of the agreement using the effective interest method.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement".
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement". The difference between the sale and repurchase prices is treated as an interest
+expense and is amortised over the life of the agreement using the effective interest method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+A net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gains or
+losses on the disposal.
+Net investment hedges
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gains or
+losses existing in other comprehensive income at that time remains in other comprehensive income until the hedged forecast
+transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
+was reported in other comprehensive income is immediately transferred to profit or loss.
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+Cash flow hedges
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+ICBC
+As part of its operational activities, the Group securitises credit assets. When a securitisation of financial assets does not
+qualify for derecognition, the relevant financial assets are not derecognised, and the consideration paid by third parties are
+recorded as a financial liability; when the securitisation of financial assets partially qualifies for derecognition, the Group
+continues to recognise the transferred assets to the extent of its continuing involvement, and derecognises the remaining
+portion. The carrying amount of the transferred assets is apportioned between the derecognised portion and the retained
+portion based on their relative fair values, and the difference between the carrying amount of the derecognised portion and
+the total consideration paid for the derecognised portion is recorded in profit or loss.
+The Group will reclassify all related financial assets when it changes its business model for managing financial assets, and
+the reclassification applies prospectively from the reclassification date (the first day of the first reporting period following the
+change in business model).
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
+of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to
+repay.
+Annual Report 2021
+ECL is a probability-weighted amount that is determined with the respective risks of default occurring as the weight. Credit
+losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in
+accordance with the contract and the cash flows that the Group expects to receive).
+Measurement of ECL
+Financial assets measured at fair value, including debt or equity instruments measured at FVTPL, equity instruments
+designated as at FVTOCI and derivative financial assets, are not subject to ECL assessment.
+loan commitments and financial guarantee contracts.
+debt instruments measured at FVTOCI; and
+financial assets measured at amortised cost;
+The Group recognises loss allowances for expected credit loss ("ECL") on:
+(10) Impairment of financial assets
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+-
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and shall not
+be offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+(9) Presentation of financial instruments
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(8) Trade date accounting
+(iv) Financial instruments reclassification
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+Other financial liabilities
+For the financial liabilities designated as at FVTPL, the gains and losses from changes in fair value of the financial liability
+arising from changes in the Group's own credit risk are included in other comprehensive income; other changes in fair value
+of the financial liabilities are recognised in profit or loss. If the treatment of the impact of changes in the financial liabilities'
+own credit risk will create or enlarge the accounting mismatch in profit or loss, the Group shall recognise the entire gains
+or losses of the financial liabilities (including the amount of the impact of changes in its own credit risk) in profit and loss.
+When these liabilities are derecognised, the cumulative gains or losses previously recognised in other comprehensive income
+are reclassified from reserve to retained earnings.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Insurance income recognition
+Notes to the Consolidated Financial Statements
+169
+Securitisation
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+the Group's contractual rights to the cash flows from the financial asset expire;
+Financial asset is derecognised when one of the following conditions is met:
+(12) Derecognition of financial assets and liabilities
+Derecognition of financial assets
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+ICBC
+170
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the
+terms are substantially different, the Group derecognises the original financial asset and recognises a new asset under the
+revised terms. If the renegotiation or modification does not result in derecognition, but leads to changes in contractual cash
+flows, when assessing whether a significant increase in credit risk has occurred, the Group compares the risk of a default
+occurring under the revised terms as at the end of the reporting period with that as at the date of initial recognition under
+original terms.
+(11) Modification of financial assets contracts
+The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
+prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines
+that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
+subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order
+to comply with the Group's procedures for recovery of amounts due. Subsequent recoveries of an asset that was previously
+written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.
+Write-off
+ECL is re-measured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises impairment gains or losses for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through allowance for impairment loss. For debt instruments that are measured at FVTOCI, the
+loss allowance is recognised in other comprehensive income, which does not decrease the carrying amount of the financial
+assets. The Group recognises loss allowance for loan commitments and financial guarantee contracts through other liabilities
+(provisions for credit commitments).
+Presentation of allowance for ECL
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount that
+equals to lifetime ECL is recognised as loss allowance. Refer to Note 49(a) credit risk for the definition of credit-impaired
+financial assets.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount that equals to lifetime ECL is recognised as loss allowance. Refer to Note 49(a) credit risk for
+the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 1: A financial instrument of which the credit risk has not significantly increased since initial recognition. The amount
+that equals to 12-month ECL is recognised as loss allowance.
+The three risk stages are defined as follows:
+The Group classifies financial instruments into three stages and provides provisions for ECL accordingly, depending on
+whether credit risk on that financial instrument has increased significantly since initial recognition.
+12-month ECL is the portion of ECL that result from default events that are possible within the 12 months after the end of
+the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+Lifetime ECL is the ECL that result from all possible default events over the expected life of a financial instrument.
+The maximum period considered when estimating ECL is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+The Group's method of measuring ECL of financial instruments reflects the following elements: (i) unbiased weighted
+average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money; (iii)
+reasonable and evidence-based information about past events, current conditions, and future economic forecasts that are
+available at no additional cost or effort at the end of the reporting period.
+For the year ended 31 December 2021
+Insurance premium income is recognised when:
+(18) Fiduciary activities
+the insurance contract is issued, and related insurance risk is taken on by the Group;
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the conditions of individual aircraft and vessel. The
+residual values are assessed by an independent appraiser based on historical data. The estimated useful lives range from 15
+to 25 years.
+The shorter of the economic useful
+lives and remaining lease terms
+14.29%-50%
+2-7 years
+1.94%-20%
+Annual
+depreciation rate
+Estimated residual
+value rate
+0%-3%
+Estimated
+useful life
+5-50 years
+Leasehold improvements
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Properties and buildings
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+(20) Property and equipment
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited is
+also recognised. The precious metals deposited with the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+(19) Precious metals
+For an impaired fixed asset, the depreciation is calculated based on the carrying value less the cumulative impairment loss.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+Annual Report 2021
+(i)
+ICBC
+178
+The Group reviews the carrying amount of a provision at the end of reporting period. The carrying amount is adjusted to the
+current best estimate.
+where the contingency involves a large population of items, the best estimate is determined by weighting all possible
+outcomes by their associated probabilities.
+where the contingency involves a single item, the best estimate is the most likely outcome;
+A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation.
+When the effect of the time value of money is material, the best estimate is determined by discounting the related future
+cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency such as
+risks, uncertainties and time value of money. Where there is a range of possible outcome, and each possible outcome in
+that range is as likely as any other, the best estimate is the mid-point of that range. In other cases, the best estimate is
+determined according to the following circumstances:
+Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that an
+outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
+made of the amount of the obligation.
+(24) Provisions
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+I would have been determined, net of any depreciation or amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation or amortisation charge
+is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+The Group assesses at the end of each reporting period whether there is any indication that property and equipment,
+land use rights, right-of-use assets, associates and joint ventures and other non-financial assets may be impaired. If any
+such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the gross carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+(23) Non-financial asset impairment
+Repossessed assets are initially recognised at fair value of assets not retained plus related costs, and are subsequently
+measured at the lower of the carrying value and net recoverable amount. If the recoverable amount is lower than the
+carrying value of the repossessed assets, the assets are written down to the recoverable amount.
+(22) Repossessed assets
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") during the Group's restructuring or the consideration paid. The rights are amortised using the straight-
+line method over the periods of the leases. When the prepaid land lease payments cannot be allocated reliably between the
+land and buildings elements, the entire lease payments are included in the costs of properties and buildings as finance leases
+in property and equipment.
+(21) Land use rights
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+177
+An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from
+its use or disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net
+disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss in the year the asset is
+derecognised.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before
+the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to
+dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the
+condition required by the terms and conditions of the lease.
+(i) As a lessee
+For a contract that contains more than one separate lease components, the lessee and the lessor separate lease components
+and account for each lease component as a lease separately. For a contract that contains lease and non-lease components,
+the lessee and the lessor separate lease components from non-lease components. However, for the leases in which the
+Group is a lessee, the Group has elected not to separate lease components from non-lease components and accounts for the
+lease and non-lease components as a single lease component.
+the lessee has the right to direct the use of the asset.
+the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the
+period of use;
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+174
+ICBC
+the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly in a
+contract and should be physically distinct, or a capacity portion or other portion of an asset that is not physically
+distinct but represents substantially all of the capacity of the asset and thereby provides the customer with the right to
+obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive substitution
+right throughout the period of use, then the asset is not identified;
+At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
+if the contract conveys the right to control the use of one or more identified assets for a period of time in exchange for
+consideration.
+A lease is when the lessor conveys the right to control the use of an asset for a period of time in exchange for the
+consideration of the lessee.
+(16) Leases
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, the adequacy of liability is tested. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on the date of the liability adequacy test, an additional provision shall be
+Imade for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the
+respective insurance contract liabilities.
+Insurance contract liabilities
+(iii) related income can be reliably measured.
+the related economic benefits are likely to flow to the Group; and
+176
+(ii)
+The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase
+option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying
+asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful
+life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in
+accordance with the accounting policy described in Note 4(23).
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate if the interest rate
+implicit in the lease is not readily determinable. Each institution of the Group uses an interest rate that a lessee would have
+to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to
+the right-of-use asset in a similar economic environment as the incremental borrowing rate.
+To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
+Under the following circumstances after the commencement date, the Group re-measures lease liabilities based on the
+present value of revised lease payments:
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are not recorded on the statement of financial position as the Group merely fulfils the responsibility
+as trustee and charges fees in accordance with these agreements without retaining any risks or rewards of the assets under
+custody.
+A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a
+corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not
+included in the measurement of the lease liability are charged to profit or loss or included in the cost of assets where
+appropriate as incurred.
+When the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments and the amount initially recognised less the cumulative amount of income. Any increase in the liability relating
+to a financial guarantee is taken to the statement of profit or loss.
+(17) Financial guarantee contracts
+Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the
+finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease.
+The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value of
+the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the lease.
+The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return.
+The impairment and derecognition of the finance lease receivable are recognised in accordance with the accounting policy
+in Note 4(10) and 4(12). Variable lease payments not included in the measurement of net investment in the lease are
+recognised as income as they are earned.
+The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified as
+a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset irrespective
+of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance lease.
+When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset
+arising from the head lease, not with reference to the underlying asset. If the head lease is a short-term lease to which the
+Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
+(ii) As a lessor
+(In RMB millions, unless otherwise stated)
+Lease receipts from operating leases is recognised as income using the straight-line method over the lease term. The initial
+direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss over
+the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are recognised
+as income as they are earned.
+Notes to the Consolidated Financial Statements
+there is a change in the amounts expected to be payable under a residual value guarantee;
+there is a change in future lease payments resulting from a change in an index or a rate used to determine those
+payments;
+For the year ended 31 December 2021
+there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option, or
+there is a change in the exercise of the extension or termination option.
+When the lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use asset,
+or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of
+12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases in
+profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
+Annual Report 2021
+175
+5.
+Notes to the Consolidated Financial Statements
+182
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and
+no longer at the discretion of the Bank. A dividend for the year that is approved after the end of the reporting period is
+disclosed as an event after the reporting period.
+(32) Dividends
+Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
+against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that
+it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be
+utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be reversed
+accordingly.
+Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when
+the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
+enacted by the end of the reporting period, and reflect the corresponding tax effect.
+at the time of the transaction, it affects neither the accounting profit nor taxable income (or deductible expenses).
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax assets are recognised only to the extent that it is probable that the temporary differences will be reversed in the
+foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
+transaction is not a business combination;
+ICBC
+Deferred tax liabilities are recognised for all taxable temporary differences, except:
+(i)
+Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
+tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
+differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except that deferred tax assets
+are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction and
+that:
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax liabilities are recognised except where the timing of the reversal of the temporary differences can be controlled
+and it is probable that the temporary differences will not be reversed in the foreseeable future.
+where the taxable temporary difference arises from the initial recognition of assets and liabilities in a transaction that
+is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
+income (or deductible expenses).
+(ii)
+where the taxable temporary difference arises from the initial recognition of goodwill;
+(i)
+Deferred tax is provided using the balance sheet liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred tax
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+Notes to the Consolidated Financial Statements
+(ii)
+In the process of applying the Group's accounting policies, management is required to make judgements, estimates and
+assumptions of the effects of uncertain future events on the financial statements. The most significant use of judgements,
+estimates and assumptions concerning the uncertainty of the future at the end of the reporting period that have a significant
+risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
+described below.
+2021
+The measurement of the ECL allowance for financial assets measured at amortised cost and FVTOCI and with exposure
+arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex models and
+significant assumptions about future economic conditions and credit behavior (the likelihood of customers defaulting and
+the resulting losses). Refer to Note 49(a) credit risk for the explanation of the inputs, assumptions and estimation techniques
+used in measuring ECL.
+181
+766,407
+832,136
+Discounted bills
+Personal loans
+Loans and advances to customers:
+Corporate loans and advances
+Interest income on:
+2020
+6. NET INTEREST INCOME
+The Group acts as manager or investor in a number of wealth management products, investment funds, trust plans, asset
+management plans and assets-backed securities. When assessing whether the Group controls such a structured entity, the
+Group would determine whether it exercises the decision-making rights as a principal or an agent and usually focuses on the
+assessment of the aggregate economic interests of the Group in the entity (comprising any carried interests and expected
+management fees) and the decision-making authority of the entity. The Group would also determine whether another entity
+with decision-making rights is acting as an agent for it.
+Wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria at the initial set up of the vehicles. In addition, the Group is exposed to variability of returns from the
+vehicles through holding interests in the vehicles and the day-to-day servicing of the underlying assets in the vehicles which
+is carried out by the Group under a servicing contract. Key decisions are usually required only when underlying assets go into
+default. Therefore, in considering whether it has control, the Group considers whether it can use its power to influence these
+vehicles' returns.
+Measurement of the ECL allowance
+Securitisation vehicles
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+183
+Annual Report 2021
+Management applies its judgement to determine whether the control indicators set out in Note 4(2) indicate that the Group
+controls securitisation vehicles, wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities.
+Determination of control over investees
+If the market for a financial instrument is not active, the Group determines the fair value by using valuation technique,
+including using recent arm's length market transactions between knowledgeable and willing parties, if available, reference to
+the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing
+models. Valuation technique makes maximum use of observable market input. However, where observable market inputs are
+not available, management makes estimates on such unobservable market inputs.
+Fair value of financial instruments
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax provisions
+accordingly. In addition, deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
+available against which the deductible temporary differences can be utilised. This requires significant judgement on the tax
+treatments of certain transactions and also significant assessment on the probability that adequate future taxable profits will
+be available for the deferred tax assets to be recovered.
+Income tax
+The Group assesses whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. The Group allocates the goodwill to the CGU or group of CGUS and makes an estimate
+of the expected future cash flows from the CGU or group of CGUS and also to choose a suitable discount rate in order to
+calculate the present value of those cash flows.
+Impairment of goodwill
+(In RMB millions, unless otherwise stated)
+Annual Report 2021
+Cash and cash equivalents refer to monetary assets, which are short-term, highly liquid, readily convertible into known
+amounts of cash and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash,
+unrestricted balances with central banks, amounts due from banks and other financial institutions and reverse repurchase
+agreements with original maturity of less than three months.
+Current tax
+purchased or originated financial assets that are not credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets quality improve so that they are no
+longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after the
+application of the above-mentioned rules, then the interest income is calculated by applying the effective interest rate
+to their gross carrying amount.
+purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial recognition,
+by applying the credit adjusted effective interest rate to their amortised cost; and
+(ii)
+(i)
+Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets and is
+recognised as interest income, except for:
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVTOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash receipts or payments through the expected life of the financial instrument, where appropriate, to the
+gross carrying amount of the financial asset, or the amortised cost of financial liability. The calculation takes into account all
+contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs
+that are directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit
+losses.
+(29) Revenue recognition
+Interest income
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+179
+Annual Report 2021
+Fee and commission income
+467,973
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(25) Contingent liabilities
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(26) Convertible instruments
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at FVTPL. The equity component is not re-measured.
+If the convertible instrument is converted, the liability component, together with the equity component, are transferred
+to equity. If the convertible instrument is redeemed, the consideration paid and transaction fees for the redemption are
+allocated to the liability and equity components. The method used to allocate the consideration and transaction costs is
+the same as that used for issuance. After allocating the consideration and transaction costs, the difference between the
+allocated and carrying amounts is charged to profit and loss if it relates to the liability component or directly recognised in
+equity if it relates to the equity component.
+(27) Preference shares and perpetual bonds
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+liabilities or equity instruments based on their contractual terms and their economic substance after considering the
+definition of financial liabilities and equity instruments. Preference shares and perpetual bonds issued containing both equity
+and liability components are accounted for using the accounting policy for convertible instruments containing an equity
+component.
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instrument's duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redeemed amount is charged to equity.
+(28) Cash and cash equivalents
+Notes to the Consolidated Financial Statements
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled
+in exchange for transferring promised services to customers, and income is recognised when its performance obligation in
+contracts is satisfied.
+(ii)
+Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except that it
+relates to items recognised directly in equity, in which case it is recognised in equity.
+(31) Income tax
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss.
+Early retirement benefits
+when the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+when the Group can no longer withdraw an offer of those benefits;
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the due date of labor contract or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognises termination benefits in profit or loss at the earlier of:
+Termination benefits
+In addition, employees in Chinese mainland also participate in a defined contribution retirement benefit plan established
+by the Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the
+employees' previous year basic salaries to the Annuity Plan. The Group pays a fixed contribution into the Annuity Plan and
+has no obligation to pay further contributions if the Annuity Plan does not hold sufficient assets to pay all employee benefits.
+The contribution is charged to profit or loss when it is incurred.
+Pursuant to the relevant laws and regulations of the PRC, the Group participates in a defined contribution basic pension
+insurance and unemployment insurance in the social insurance system established and managed by government
+organisations. The Group makes contributions to basic pension insurance and unemployment insurance plans based on
+the applicable benchmarks and rates stipulated by the government. Basic pension insurance and unemployment insurance
+contributions are recognised as liabilities with a corresponding charge to profit or loss or included in the cost of assets where
+appropriate as the related services are rendered by the employees.
+Post-employment benefits-defined contribution plans
+All eligible employees outside Chinese mainland participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies and charge to profit or loss or
+included in the cost of assets where appropriate.
+(i) The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+180
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+(30) Employee benefits
+Dividend income is recognised when the Group's right to receive payment is established, it is probable that the related
+economic benefits will flow to the Group and the related income can be reliably measured.
+Dividend income
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+the Group does not provide service with an alternative use to the Group, and the Group has an enforceable right
+to payment for performance completed to date.
+the customer controls the service provided by the Group in the course of performance; or
+the customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+Short-term employee benefits
+436,520
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+318,272
+100
+310
+Chairman of the Board of Supervisors
+Huang Liangbo (ii)
+811
+197
+614
+Vice Chairman, Executive Director, President
+Liao Lin (i)
+820
+201
+619
+Chairman, Executive Director
+Chen Siqing
+(4)=(1)+(2)+(3)
+(3)
+(2)
+410
+Zheng Guoyu (iii)
+Executive Director, Senior Executive
+Vice President
+Non-executive Director
+Dong Yang (vi)
+Chen Yifang (v)
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Cao Liqun
+Lu Yongzhen
+Feng Weidong
+(1)
+751
+194
+557
+Vice President, Chief Risk Officer
+Executive Director, Senior Executive
+Wang Jingwu (iv)
+251
+65
+186
+351
+RMB'000
+RMB'000
+RMB'000
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+186
+(ii) The principal auditor's remuneration of RMB183 million for the year (2020: RMB224 million) is included in other
+administrative expenses.
+The defined contribution plans mainly include pension insurance, unemployment insurance and the Annuity Plan.
+(i)
+206,585
+12. DIRECTORS' AND SUPERVISORS' REMUNERATION
+236,227
+29,060
+7,024
+8,524
+9,318
+25,686
+26,539
+Taxes and surcharges
+Other administrative expenses (ii)
+15,236
+Non-executive Director
+Details of the directors' and supervisors' remuneration before tax, as disclosed pursuant to the Rules Governing the Listing of
+Securities on The Stock Exchange of Hong Kong Limited and the Hong Kong Companies Ordinance, are as follows:
+the employer
+RMB'000
+before tax
+Fees
+insurances
+before tax
+Position
+Name
+remuneration
+Year ended 31 December 2021
+Contribution by
+medical
+Total
+additional
+Remuneration
+annuities, and
+allowance,
+housing
+insurance,
+to social
+paid
+Anthony Francis Neoh
+Yang Siu Shun
+Shen Si
+(viii) In March 2021, Mr. Yang Guozhong ceased to act as Shareholder Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+(ix)
+(x)
+(xi)
+In January 2022, Mr. Zheng Fuqing ceased to act as Non-executive Director of the Bank due to expiration of his term of
+office.
+In February 2021, Ms. Mei Yingchun ceased to act as Non-executive Director of the Bank due to expiration of her term
+of office.
+In November 2021, Mr. Qu Qiang ceased to act as External Supervisor of the Bank due to change of job assignments.
+188
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Zhang Jie was elected as
+External Supervisor of the Bank, and his term of office as External Supervisor of the Bank started from the day of
+approval by the Shareholders' General Meeting.
+ICBC
+163
+163
+1,068
+3,329
+Total
+Former External Supervisor
+Former Non-executive Director
+Mei Yingchun (x)
+Qu Qiang (xi)
+2,627
+Former Non-executive Director
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Dong Yang was elected as Non-
+executive Director of the Bank, and his qualification was approved by CBIRC in January 2022.
+At the First Extraordinary General Meeting of 2021 held on 29 July 2021, Mr. Wang Jingwu was elected as Executive
+Director of the Bank, and his qualification was approved by CBIRC in September 2021. On 24 September 2021, the
+Board of Directors appointed Mr. Wang Jingwu as Chief Risk Officer of the Bank.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's 2021 consolidated financial statements. The total compensation packages will be further
+disclosed when determined by the relevant authorities.
+Annual Report 2021
+187
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the
+President and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal
+results. Accordingly, the Bank accrued RMB16 thousand, RMB9 thousand and RMB7 thousand for Mr. Chen Siqing, Mr. Liao
+Lin and Mr. Wang Jingwu respectively, as additional contribution to the Annuity Plan in 2021.
+Fees of Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding
+their remuneration with the Bank in accordance with the employee remuneration system.
+At the Annual General Meeting for the Year 2020 held on 21 June 2021, Ms. Chen Yifang was elected as Non-
+executive director of the Bank, and her qualification was approved by CBIRC in August 2021.
+As at the approval date of these financial statements, changes of directors and supervisors of the Bank were as follows:
+(ii)
+(iv)
+(v)
+(vi)
+(vii)
+On 25 February 2021, the Board of Directors elected Mr. Liao Lin as Vice Chairman of the Bank and appointed Mr. Liao
+Lin as President of the Bank, and his qualification was approved by CBIRC in March 2021. Mr. Liao Lin ceased to act as
+Chief Risk Officer of the Bank after he took office as President.
+At the First Extraordinary General Meeting of 2021 held on 29 July 2021, Mr. Huang Liangbo was elected as
+Shareholder Supervisor of the Bank, and his term of office as Shareholder Supervisor of the Bank started from the day
+of approval by the Shareholders' General Meeting, and his term of office as Chairman of the Board of Supervisors of
+the Bank took effect simultaneously.
+On 24 September 2021, the Board of Directors appointed Mr. Zheng Guoyu as Senior Executive Vice President of the
+Bank. At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Zheng Guoyu was elected
+as Executive Director of the Bank, and his qualification was approved by CBIRC in December 2021.
+(i)
+2,607
+Zheng Fuqing (ix)
+33
+470
+470
+520
+520
+222222
+Employee Supervisor
+Huang Li
+278
+470
+939
+Zhang Wei
+Independent Non-executive Director
+Fred Zuliu Hu
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Nout Wellink
+Shareholder Supervisor
+137
+470
+470
+104
+Former Chairman of the Board of Supervisors
+Yang Guozhong (viii)
+24
+24
+External Supervisor
+Zhang Jie (vii)
+External Supervisor
+470
+Shen Bingxi
+50
+Employee Supervisor
+Wu Xiangjiang
+50
+50
+1,217
+410
+410
+50
+3,125
+Amortisation
+27,960
+Fee and commission income
+Other
+Trust and agency services (i)
+Asset custody business (i)
+10,101
+9,756
+Guarantee and commitment business
+15,554
+8,738
+15,165
+18,623
+16,679
+Bank card business
+21,460
+22,416
+29,630
+30,001
+Personal wealth management and private banking services (i)
+Investment banking business
+Corporate wealth management services (i)
+39,101
+7,545
+1,617
+2020
+2021
+Equity investments
+Derivatives and other
+Debt securities
+NET TRADING INCOME
+8.
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB20,999 million (2020: RMB16,584 million)
+with respect to trust and other fiduciary activities for 2021.
+1,808
+Net fee and commission income
+133,024
+(15,453)
+(15,703)
+Fee and commission expense
+146,668
+148,727
+3,037
+2,894
+131,215
+6,781
+41,270
+2020
+Due to banks and other financial institutions (ii)
+(364,173)
+(397,625)
+Due to customers
+Interest expense on:
+1,092,521
+1,162,218
+40,547
+(44,387)
+25,228
+42,022
+42,027
+Due from central banks
+243,545
+262,827
+Financial investments
+11,615
+10,430
+Due from banks and other financial institutions (i)
+Settlement, clearing business and cash management
+(51,477)
+(29,526)
+2021
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(i)
+NET FEE AND COMMISSION INCOME
+7.
+ICBC
+184
+Debt securities issued and certificates of deposit
+The above interest income and expense are related to financial instruments which are not measured at fair value through
+profit or loss.
+Includes interest income on reverse repurchase agreements.
+(i)
+646,765
+690,680
+Net interest income
+(445,756)
+(471,538)
+(30,106)
+(ii) Includes interest expense on due to central banks and repurchase agreements.
+353,733
+5,964
+(6,938)
+Staff benefits
+82,416
+90,250
+Salaries and bonuses
+2020
+2021
+Staff costs:
+11. OPERATING EXPENSES
+30,800
+8,044
+(242)
+265
+1,323
+2,182
+Net gains on disposal of property and equipment, repossessed assets and other
+Other
+12,756
+13,016
+Lease income
+11,781
+(53,366)
+29,915
+defined contribution plans (i)
+28,822
+1,837
+1,947
+Utility expenses
+4,086
+4,106
+Repairs and maintenance charges
+8,348
+Post-employment benefits
+8,173
+13,689
+14,596
+Depreciation charge for property and equipment
+Property and equipment expenses:
+126,572
+139,363
+14,241
+18,313
+Depreciation charge for right-of-use assets and other leasing expense
+2,370
+(49,706)
+47,573
+10,739
+Gains on financial instruments measured at FVTPL, net, including:
+2,222
+3,097
+Held at the year end
+133
+291
+2,355
+7,402
+3,388
+2020
+2021
+9. NET GAINS ON FINANCIAL INVESTMENTS
+The above amounts mainly include gains and losses arising from the buying and selling of, the interest income and expense
+on, and the changes in fair value of financial assets and liabilities held for trading.
+2,222
+8,955
+3,196
+(196)
+Dividend income from equity investments designated as at FVTOCI, including:
+Derecognised during the year
+Operating cost of insurance business
+Net losses on financial instruments designated as at FVTPL
+(8,859)
+46,024
+Net premium income
+2020
+2021
+10. OTHER OPERATING INCOME, NET
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+(17,674)
+185
+11,829
+16,440
+(317)
+229
+Other
+2,389
+2,084
+Net gains on disposal of financial instruments measured at FVTOCI, net
+Annual Report 2021
+Other
+1.02
+259.87
+Up 21.68
+24.76
+26.36
+Cost-to-income ratio(6)
+to operating income
+20.67
+17.15
+16.83
+16.40
+15.45
+Ratio of net fee and commission income
+25.79
+1.89
+1.75
+1.64
+1.68
+Return on risk-weighted assets(5)
+2.22
+2.36
+2.30
+2.15
+2.11
+Net interest margin (4)
+1.81
+25.71
+26.45
+Asset quality (%)
+12.77
+13.20
+13.18
+13.31
+Core tier 1 capital adequacy ratio (10)
+Capital adequacy (%)
+2.39
+2.68
+2.86
+2.85
+2.92
+Allowance to total loans ratio (9)
+154.07
+1.55
+1.52
+175.76
+199.32
+180.68
+205.84
+Allowance to NPLs (8)
+1.43
+1.58
+1.42
+Non-performing loans ("NPLs") ratio (7)
+2.10
+Tier 1 capital adequacy ratio (10)
+2.20
+1.97
+A1
+A1
+A1
+A1
+A1
+A
+A
+A
+A
+A
+Notes: (1) Calculated by adding allowance for impairment losses on loans and advances to customers measured at amortised cost with
+allowance for impairment losses on loans and advances to customers measured at fair value through other comprehensive income.
+Moody's (4)
+Credit rating
+0.79
+0.82
+0.86
+0.86
+0.95
+Diluted earnings per share
+0.79
+0.82
+0.86
+S&P(4)
+(2) Calculated in accordance with the Capital Regulation.
+(3) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments at
+the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(4) The rating results are in the form of "long-term foreign currency deposits rating”.
+1.92
+Net interest spread (3)
+14.35
+13.79
+13.05
+11.95
+12.15
+Return on weighted average equity(2)
+1.14
+1.11
+1.08
+1.00
+Return on average total assets (1)
+Profitability (%)
+2017
+2018
+2019
+2020
+2021
+Financial Highlights
+Financial Indicators
+ICBC
+10
+2.12
+0.86
+14.94
+14.27
+14
+情
+の
+th
+In 2022, we will continue to follow the guidance of Xi
+Jinping Thought on Socialism with Chinese Characteristics
+for a New Era, make economic stability our top priority and
+pursue progress while ensuring stability, thus contributing
+to the goal of achieving a stable performance of the
+macro economy. We will further improve the quality and
+efficiency of services for the real economy, and make
+more progress in achieving high-quality development. We
+will remedy problems identified by the central inspection
+team, and in the course push forward the implementation
+of various reforms to produce real effects. We will work
+hard to build the Bank into a world-class modern financial
+enterprise with Chinese characteristics and set the stage
+for the Party's 20th National Congress with concrete actions
+and remarkable achievements.
+At present, as the world is experiencing a pandemic and
+changes unseen in the past century, a fast-changing global
+political and economic landscape, and chain reactions
+arising from geopolitical conflicts, the global finance,
+energy, transportation and supply chain stability are faced
+with great shocks, and the global banks are facing an ever-
+complex external environment and new challenges in their
+operations. However, the fundamentals of the Chinese
+economy remain unchanged, and they will maintain long-
+term growth and demonstrate strong resilience and vitality.
+As China moves faster to construct a new development
+pattern and implements macro policies in full, the Chinese
+economy is being stimulated on all fronts for steady, sound
+and high-quality growth. The domestic banking sector is
+facing a favorable environment for development.
+From our practices in the past year, we have deepened
+our understanding on improving our financial work. We
+will always follow the guidance of Party building, firmly
+carry out financial work in the right direction, adhere to
+the people-centered principle, and fulfill our responsibility
+of serving the real economy. We will foster and uphold
+the correct view on business performance, unswervingly
+follow the qualitative development path of quality-first,
+efficiency-prioritized and innovation-driven development,
+and strive to become stronger, better and bigger. We will
+stick to the bottom-line thinking, take the initiative to
+guard against and defuse risks, and promote the realization
+of the dynamic balance between high-quality development
+and high-level security. We shall actively shoulder our
+due responsibilities, address difficulties on development
+through reform, and stick to the path of financial
+development with Chinese characteristics.
+On behalf of the Board of Directors, I would like to express
+my sincere gratitude to people from all walks of society for
+their care and support to ICBC, to the Board of Supervisors
+for its effective supervision, and to the Management and
+all employees for their dedication and contribution. Based
+on our good business performance, the Board of Directors
+proposed a dividend of RMB2.933 per ten ordinary shares
+for 2021, which will be submitted to the Shareholders'
+General Meeting for deliberation.
+Our scale merits were further augmented. Our assets
+exceeded RMB35 trillion, operating income topped
+RMB860.0 billion, and net profit surpassed RMB350.0
+billion, consolidating our lead in the banking sector. We
+maintained the first place in assets, capital, deposits and
+loans among banks in the world, and the first place in
+market value and total dividends among Chinese banks.
+The quality of business performance was further
+improved. Our operating efficiency continued to improve,
+with the return on assets ("ROA") and return on equity
+("ROE") reaching 1.02% and 12.15% respectively.
+Through meticulous management and internal potential
+tapping, the change in our net interest margin ("NIM")
+was better than most peers, and the cost-to-income ratio
+was 26.36%, lower than most large banks in the world.
+ICBC
+Chairman's Statement
+Annual Report 2021
+We made every effort to promote the head start of the
+new development plan. We acted swiftly and efficiently
+to implement key strategies and tasks, with notable
+achievements made. We performed well in major operating
+indicators and we became "stronger, better and bigger."
+The foundation for strong development was
+further consolidated. Our capital strength was further
+strengthened. The capital adequacy ratio exceeded 18%,
+one of the highest among the large banks in the world.
+The balance of provisions surpassed RMB600.0 billion, and
+the allowance to NPLs rebounded to over 200% for the
+first time in the past seven years. For the ninth consecutive
+year, the Bank ranked first among Global 2000 by Forbes
+and the Top 1000 World Banks by The Banker.
+We advanced reform more vigorously and strived
+to achieve high-quality development. We focused
+on improving the governance system and capacity, and
+deepened the organic integration of Party leadership
+and corporate governance. We pushed forward the
+arrangements of "bringing out our strengths to make
+up for our weaknesses and laying a solid foundation
+and base." Headways were made in our implementation
+of key strategies such as the No.1 Personal Bank, the
+Preferred Bank for Foreign Exchange Business, Sharpening
+Competitive Edge in Key Regions and Urban-Rural
+Collaborative Development. We accelerated the bank-
+wide digital transformation. Our intelligent banking
+ecosystem ECOS project was awarded PBC's special
+award of the "FinTech Development Awards", and our
+data management capability was given the highest rating
+by the Ministry of Industry and Information Technology.
+Last year, we delivered financial services for the China
+International Import Expo, the China Import and Export
+Fair, the China International Fair for Trade in Services and
+the China International Consumer Products Expo. We
+initiated the China-Europe Business Council, and promoted
+the development of Belt and Road Bankers Roundtable
+("BRBR"). We played an active part in international
+governance of green finance and launched the Beijing
+Initiative on Climate-Friendly Banks.
+off the balance sheet, domestic and overseas, online and
+offline. We tightened control over all kinds of credit risks,
+and increased efforts to improve the asset quality, with
+continuous improvement in the operating capacity of
+risk assets, and simultaneous decline in the NPL ratio and
+overdue loan ratio. We stayed alert to the volatility of the
+financial market, adhered to prudent trading strategies,
+strictly controlled the risk exposure, and kept the market
+risk at an overall stable level.
+We adhered to the bottom-line thinking and spared
+no effort to promote high-quality risk control. We
+continued to plan ahead, see the big from the small,
+remedy in time and draw inferences. By doing so we
+improved the enterprise risk management system, and
+helped maintain economic and financial stability. We
+planned in a well-coordinated way, and managed with
+clear accounting. We improved the risk identification,
+early-warning and risk mitigation mechanism across the
+entire chain, and coordinated efforts to guard against
+and control traditional and emerging risks, risks on and
+We kept in mind national priorities and did our best
+to serve high-quality development. In line with the
+new development paradigm and the requirements for the
+implementation of the 14th Five-Year Plan, we implemented
+the guidance of macro policies, and promoted high-
+level coordination of investment and financing in terms
+of quality, scale, pace and price. We continued to refine
+financial services in key areas and weak links, and led
+the market in terms of credit scale in manufacturing,
+technological innovation and green sectors, with the
+growth of inclusive finance loans topping the rankings. To
+promote common prosperity, we set up special agencies
+to serve rural revitalization, launched the brand "ICBC
+Xingnongtong", and delivered helpful assistance to micro,
+small and medium-sized enterprises and industries in
+need. We strengthened global service synergy, and actively
+promoted opening-up at a higher level and the high-quality
+development of the Belt and Road Initiative. We ensured
+financial support for epidemic prevention and control,
+energy supply, flood control and relief, and vigorously built
+up our image as a responsible large bank.
+The year 2021 was a milestone in the history of the
+Communist Party of China ("CPC" or the "Party") and
+the country as we celebrated the 100th anniversary of the
+founding of the Party. ICBC adhered to Xi Jinping Thought
+on Socialism with Chinese Characteristics for a New Era,
+earnestly implemented the decisions and arrangements
+of the CPC Central Committee and the State Council,
+stayed committed to the general principle of pursuing
+progress while ensuring stability, and continued to uphold
+the "48-character" guideline. Based on the reality of the
+new development stage, we applied the new development
+philosophy, actively served and integrated into the new
+development paradigm, responded to COVID-19 and
+pursued financial security and business development in
+a well-coordinated way, and contributed to high-quality
+economic development while striving to pursue our own
+high-quality development. As a result, we delivered a solid
+performance to celebrate the Party's centenary.
+Chairman's Statement
+ICBC
+Chairman Chen Siqing
+13
+Chairman: Chen Siqing
+30 March 2022
+President's Statement
+ICBC
+18
+Chairman of the Board of Supervisors Huang Liangbo
+17
+Annual Report 2021
+30 March 2022
+President: Liao Lin
+2022 is of great significance in the development progress
+of the Party and the country, as the Communist Party
+of China will hold its 20th National Congress. The Bank
+will continue to fully implement the decisions and
+arrangements of the CPC Central Committee and the
+State Council, and stick to the general principle of
+pursuing progress while ensuring stability. In light of the
+"48-character" guideline, we, with the trust and support
+of all shareholders and people from all walks of society,
+will concentrate on our core responsibilities and businesses,
+place a greater emphasis on integrity and innovation, focus
+on "action, implementation and promotion", and adhere
+to the pattern of "bringing out our strengths to make
+up for our weaknesses and laying a solid foundation and
+base". We will strive for mid-term breakthroughs in the
+implementation of our new plan, step up efforts to build
+a world-class modern financial institution, and stick to the
+path of financial development with Chinese characteristics.
+We will welcome the convening of the Party's 20th National
+Congress with concrete actions aimed at serving the
+new development paradigm and promoting high-quality
+development.
+Such resilience stems from our thorough efforts
+to advance transformation and innovation and
+continuously inspire business vitality and growth
+momentum. In alignment with the 14th Five-Year Plan,
+the Bank launched its new development plan, followed
+through on the pattern of "bringing out our strengths to
+make up for our weaknesses and laying a solid foundation
+and base" and pushed forward the implementation of
+the No.1 Personal Bank Strategy, the Preferred Bank
+Strategy for Foreign Exchange Business, the Strategy for
+Sharpening Competitive Edge in Key Regions and the
+Urban-Rural Collaborative Development Strategy. We
+worked hard to cultivate and shape new advantages for
+high-quality development, advanced the transformation of
+asset management, private banking, bank card and other
+businesses in an orderly manner, and comprehensively
+improved our service quality. We accelerated digital
+transformation and deepened the fusion of technology
+and business. We vigorously developed service scenarios in
+smart government, smart social security, smart education
+and other fields with a focus to help improve people's
+livelihoods, further strengthened the interactions among
+government, business and consumption ("GBC"), and
+achieved substantial results in fundamental work such as
+fund taking and "net making and patching" program.
+With more than 700 million personal customers and
+9.69 million corporate customers, the Bank has a well-
+coordinated customer ecosystem encompassing large,
+medium, small and micro customers, laying a solid
+foundation for high-quality development.
+President's Statement
+ICBC
+16
+Such resilience is built upon our solid measures for
+safeguarding the bottom line of risk management
+and continuously enhancing our ability to defuse
+risks. The Bank placed equal emphasis on development
+and security, adopted a holistic risk management
+approach to people, money and policy system, and
+upgraded the enterprise risk management system through
+"active prevention, smart control and comprehensive
+management". We strengthened the implementation
+of policies and fully implemented new credit review
+regulations across domestic institutions. We carried out
+special actions to improve asset quality, systematically
+inspected and managed risks in key areas and related to
+key customers, and redoubled efforts in the collection and
+disposal of NPLs. The overdue rate, overdue amount and
+price scissors between overdue loans and NPLs continued
+to decline. We overdid the task of reducing existing wealth
+management products. We stayed vigilant against market
+risk and took effective measures to forestall emerging risks
+such as climate risk and model risk. We comprehensively
+improved the effectiveness of internal control and case
+prevention, and achieved notable results in customer
+complaint management.
+year.
+than the increment last year, hitting the new high for the
+same period. Bond investments grew by RMB763.2 billion,
+with the balance remaining at the first position among
+peers. We took precise and targeted actions to support
+the key fields and weak areas of the real economy. Loans
+to manufacturing increased by RMB319.7 billion, with the
+medium to long-term loans to manufacturing growing
+by RMB242.7 billion. We improved financial service
+modes for sci-tech enterprises, and the balance of loans
+to key state-supported high-tech fields surpassed RMB1
+trillion. We actively pushed forward green and low-carbon
+transformation and witnessed the total amount of green
+loans exceeding RMB2.4 trillion, indicating a growth rate
+of 34.4%. We made vigorous efforts in the development
+of digital inclusive finance and supply chain finance,
+and scaled up small and micro loans. We launched the
+"ICBC Xingnongtong" brand, to expand the breadth and
+depth of our financial support for the endeavor of rural
+revitalization. Our inclusive loans grew by over 50% in the
+Such resilience is firmly rooted in our commitments
+to fulfilling our original aspirations and serving
+the real economy. According to the cross-cyclical and
+counter-cyclical policy adjustments, the Bank earnestly
+implemented the requirements for "ensuring stability on
+six key fronts" and "maintaining security in six key areas".
+We arranged the aggregate volume, pace and structure of
+investment and financing in a well-coordinated way, and
+continuously improved the adaptability, competitiveness
+and inclusiveness of financial services, so as to better meet
+the diversified financial needs of the real economy and
+the general public. The Bank registered new domestic
+RMB loans of RMB2.12 trillion, RMB243.3 billion more
+In 2021, the Group recorded RMB860.9 billion in
+operating income, representing an increase of 7.6%
+from the previous year. Profit before provision was
+RMB627.5 billion, representing an increase of 5.5% from
+the previous year. Net profit reached RMB350.2 billion,
+representing an increase of 10.2% from the previous year.
+Return on total average assets and return on weighted
+average equity were both higher than the previous year.
+Capital adequacy ratio stood at 18.02%. NPL ratio was
+1.42%, down 0.16 percentage points from the end of
+the previous year. Allowance to NPLs reached 205.84%.
+These indicators fully reflect the balance and coordination
+between value creation, market standing, risk management
+and capital constraints and demonstrate the Bank's strong
+momentum for high-quality development and extraordinary
+development resilience.
+In 2021, in the face of the complicated and severe external
+environment, the Bank conscientiously implemented the
+decisions and arrangements of the CPC Central Committee
+and the State Council, acted upon the "48-character"
+guideline, stepped foot in the new development stage,
+applied the new development philosophy in full, in
+the right way and in all fields, and actively served and
+integrated into the new development paradigm. We
+coordinated COVID-19 containment efforts and financial
+work, went to all lengths to accomplish the "Three
+Tasks" of financial work, and achieved stable and even
+more remarkable business performance. We made great
+headway in our new development plan and took solid
+steps toward high-quality development.
+President's Statement
+15
+Annual Report 2021
+Liao Lin
+President
+12
+14.28
+Chairman's Statement
+Annual Report 2021
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2) Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+ratio
+60.96
+62.06
+61.83
+60.35
+61.67
+Risk-weighted assets to total assets
+8.21
+8.47
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+8.94
+9.31
+Total equity to total assets ratio
+15.14
+15.39
+16.77
+16.88
+18.02
+Capital adequacy ratio (10)
+13.27
+13.45
+8.73
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(6) Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+612,669 (235,123) 588,904 (605,568) 1,907,890 (34,157) 146,709 (462,826)
+activities
+Net cash flows from operating
+64,296 79,885 87,231
+84,494
+196,159 197,901 199,828
+206,187
+212,286 217,489 216,985
+85,730 77,743 88,348 96,517
+Net profit attributable to equity
+holders of the parent
+company
+Q4
+Q3
+2020
+Q2
+Q1
+Q4
+Q3
+2021
+Q2
+Q1
+214,120
+Operating income
+(In RMB millions)
+Quarterly Financial Data
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+11
+35 thousand
+0.95
+5.73
+312,224
+315,906
+348,338
+Net profit attributable to equity holders
+of the parent company
+287,451
+298,723
+313,361
+317,685
+350,216
+Net profit
+297,676
+364,641
+391,789
+392,126
+424,899
+Profit before taxation
+361,691
+369,324
+389,269
+390,822
+422,030
+Operating profit
+372,413
+286,049
+Net cash flows from operating activities
+360,882
+15,419,905 14,233,448
+16,761,319
+30,109,436 27,699,540 26,087,043
+33,345,058
+18,624,308
+20,667,245
+Total loans and advances to customers
+35,171,383
+Total assets
+(in RMB millions)
+As at the end of reporting period
+2017
+2018
+2019
+2020
+2021
+Financial Data (continued)
+Financial Highlights
+9
+Annual Report 2021
+770,864
+529,911
+481,240
+1,557,616
+127,769
+161,594
+178,957
+202,668
+2017
+2018
+2019
+2020
+2021
+Financial Data
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+2.628
+2019
+USD 245.4 billion
+FinTech input
+FinTech personnel
+Market value
+Unit: RMB100 millions
+[011]
+Financial Highlights
+Dividend per 10 shares
+(pre-tax)
+Unit: RMB yuan
+RMB 2.933
+2021
+2.933
+2020
+2.660
+Annual operating results (in RMB millions)
+Corporate loans
+Net interest income
+646,765
+202,623
+Impairment losses on assets
+186,194
+194,203
+207,776
+206,585
+236,227
+Operating expenses
+675,654
+725,121
+776,002
+800,075
+860,880
+Operating income
+139,625
+124,394
+130,573
+131,215
+133,024
+Net fee and commission income
+522,078
+593,677
+632,217
+690,680
+Basic earnings per share
+12,194,706
+9,955,821
+2,653,002
+2,886,378
+Net core tier 1 capital (2)
+356,407
+356,407
+356,407
+356,407
+356,407
+Share capital
+of the parent company
+2,457,274
+2,127,491
+2,676,186
+2,893,502
+3,257,755
+Equity attributable to equity holders
+institutions
+1,706,549
+1,814,495
+2,266,573
+2,784,259
+2,921,029
+2,330,001
+2,232,033
+2,030,108
+Net tier 1 capital(2)
+6.30
+6.93
+7.48
+8.15
+Net asset value per share(3)
+Per share data (in RMB yuan)
+15,902,801
+17,190,992
+18,616,886
+20,124,139
+21,690,349
+Risk-weighted assets (2)
+2,406,920
+2,644,885
+3,121,479
+3,396,186
+3,909,669
+Net capital base(2)
+2,110,060
+2,312,143
+2,657,523
+2,872,792
+3,241,364
+Due to banks and other financial
+11,102,733
+222,461
+267,941
+9,257,760
+Investment
+on loans (1)
+340,482
+413,177
+478,730
+531,161
+603,983
+Allowance for impairment losses
+351,126
+364,437
+421,874
+406,296
+527,758
+Discounted bills
+4,945,458
+5,636,574
+6,383,624
+7,115,279
+7,944,781
+Personal loans
+8,936,864
+9,418,894
+Total liabilities
+236,797
+31,896,125
+26,441,774
+361,994
+Accrued interest
+288,554
+268,914
+234,852
+261,389
+250,349
+Other deposits
+8,568,917
+9,436,418
+10,477,744
+12.98
+11,660,536
+12,497,968
+Personal deposits
+10,705,465
+11,481,141
+12,028,262
+12,944,860
+13,331,463
+Corporate deposits
+6,754,692 5,756,704
+25,354,657 23,945,987
+21,408,934 19,562,936
+8,591,139 7,647,117
+30,435,543 27,417,433
+25,134,726 22,977,655
+Due to customers
+Lu Yongzhen
+Chairman, Executive Director
+months
+349
+8,772
+82,842
+63,917
+The number of these individuals whose emoluments fell within the following bands is set out below:
+Number of employees
+2021
+2020
+RMB10,500,001 Yuan to RMB11,000,000 Yuan
+RMB11,000,001 Yuan to RMB11,500,000 Yuan
+RMB11,500,001 Yuan to RMB12,000,000 Yuan
+RMB13,500,001 Yuan to RMB14,000,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+RMB25,000,001 Yuan to RMB25,500,000 Yuan
+1
+2
+1
+1
+1
+1
+1
+1
+1
+5
+5
+In 2021, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2020: Nil).
+14. IMPAIRMENT LOSSES ON ASSETS
+Loans and advances to customers (note 23)
+Other
+2021
+168,267
+2020
+39,256
+171,830
+66,495
+15,998
+(iii)
+(iv)
+(v)
+(vi)
+(vii)
+At the Annual General Meeting of the Bank for the Year 2019 held on 12 June 2020, Mr. Liao Lin was elected as
+Executive Director of the Bank, and his qualification was approved by CBIRC in July 2020. On 25 February 2021,
+the Board of Directors of the Bank elected Mr. Liao Lin as Vice Chairman of the Bank and appointed Mr. Liao Lin as
+President of the Bank, and his qualification was approved by CBIRC in March 2021. Mr. Liao Lin ceased to act as Chief
+Risk Officer of the Bank after he took office as President.
+At the Annual General Meeting of the Bank for the Year 2019 held on 12 June 2020, Mr. Shen Si was re-elected as
+Independent Non-executive Director of the Bank, and his new term of office started from the day of approval at the
+Annual General Meeting.
+At the special meeting of the first session of employee representative assembly of the Bank held on 15 September
+2020, Mr. Wu Xiangjiang was elected as Employee Supervisor of the Bank, and his term of office started from the day
+of approval by the employee representative assembly.
+In December 2020, Mr. Gu Shu ceased to act as Vice Chairman, Executive Director and President of the Bank due to
+change of job assignments.
+At the First Extraordinary General Meeting of 2020 held on 8 January 2020, Mr. Yang Guozhong was elected as
+Shareholder Supervisor of the Bank, and his new term of office started from the day of approval by the Shareholders'
+General Meeting, and his term of office as Chairman of the Board of Supervisors of the Bank took effect
+simultaneously. In March 2021, Mr. Yang Guozhong ceased to act as Shareholder Supervisor and Chairman of the
+Board of Supervisors of the Bank due to change of job assignments.
+In February 2021, Ms. Mei Yingchun ceased to act as Non-executive Director of the Bank due to expiration of her term
+of office.
+In March 2020, Ms. Sheila Colleen Bair ceased to act as Independent Non-executive Director of the Bank due to
+expiration of her term of office.
+(viii) In September 2020, Mr. Hui Ping ceased to act as Employee Supervisor of the Bank due to his age.
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+In 2021, there was no arrangement under which a Director or a Supervisor of the Bank waived or agreed to waive any
+remuneration (2020: Nil).
+In 2021, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or upon
+joining the Group or as a compensation for loss of office (2020: Nil).
+190
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+13. FIVE HIGHEST PAID INDIVIDUALS
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 12 and 47(g)
+to the consolidated financial statements. Details of the emoluments in respect of the five highest paid individuals are as
+follows:
+2021
+RMB'000
+2020
+RMB'000
+Salaries and allowances
+Discretionary bonuses
+Other
+15,889
+(ii)
+34,356
+202,623
+202,668
+523,404
+346,806
+4,294
+2,347
+82,807
+90,511
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+2,728
+10,508
+Other financial institutions operating in Chinese mainland
+433,575
+243,440
+Banks operating in Chinese mainland
+Deposits with banks and other financial institutions:
+2020
+2021
+31 December
+31 December
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. They are not available for use in the Group's
+daily operations. As at 31 December 2021, the mandatory deposit reserve ratios of the domestic branches of the Bank
+in respect of customer deposits denominated in RMB and foreign currencies were 10% (31 December 2020: 11%) and
+9% (31 December 2020: 5%) respectively. The mandatory reserve funds placed by domestic subsidiaries of the Group
+are determined by the PBOC. The amounts of mandatory reserve deposits placed with the central banks of those
+countries or regions outside Chinese mainland are determined by local jurisdictions.
+1,402
+3,098,438
+Accrued interest
+(!!)
+(i)
+Less: Allowance for impairment losses
+30,838
+(349)
+74,441
+Annual Report 2021
+191
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+15. INCOME TAX EXPENSE
+(a) Income tax expense
+Current income tax expense:
+Chinese mainland
+Hong Kong SAR and Macau SAR
+Other overseas jurisdictions
+Deferred income tax expense
+2021
+2020
+79,459
+74,022
+1,768
+1,776
+1,950
+2,347
+83,177
+78,145
+(8,494)
+(3,704)
+74,683
+(491)
+3,537,795
+(i)
+(In RMB millions, unless otherwise stated)
+39,839
+51,690
+37,045
+Net amounts
+31 December 2020
+Gross amounts
+48,896
+Net amounts
+25,442
+31,014
+36,220
+41,792
+Gross amounts
+31 December 2021
+Derivative financial liabilities
+Derivative financial assets
+In accordance with the principle of offsetting financial instruments, the Group offsets certain derivative financial assets and
+derivative financial liabilities, and presents the net amounts after offsetting in the financial statements.
+(4) Offsetting of financial instruments
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+197
+Annual Report 2021
+As at 31 December 2021, an accumulated net gains from the hedging instrument of RMB1,650 million was recognised in
+other comprehensive income (31 December 2020: accumulated net gains of RMB889 million). As at 31 December 2021,
+there was no ineffectiveness in profit or loss that arises from the net investment hedges (31 December 2020: Nil).
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+under certain circumstances. Hedging is undertaken by using customer deposits taken in the same currencies as the
+functional currencies of related branches and subsidiaries which are accounted for as hedges of certain net investments in
+foreign operations.
+(3) Net investment hedges
+Other hedged items are included in reverse repurchase agreements, due to banks and other financial institutions,
+repurchase agreements and certificates of deposit.
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+(ii)
+(i)
+(5) Counterparty credit risk-weighted assets of derivative financial instruments
+The credit risk-weighted assets in respect of the above derivatives of the Group as at the end of the reporting period are as
+follows:
+(169)
+Counterparty credit default risk-weighted assets
+Netting settled credit default risk-weighted assets
+Less: Allowance for impairment losses
+Accrued interest
+Reverse repurchase agreements-securities
+Reverse repurchase agreements-bills
+Measured at amortised cost:
+22. REVERSE REPURCHASE AGREEMENTS
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional).
+198,464
+196,315
+2,351
+1,751
+48,366
+67,911
+71,044
+6,525
+76,703
+120,128
+147,747
+126,653
+2020
+2021
+31 December
+31 December
+Central counterparties credit risk-weighted assets
+Credit value adjustment risk-weighted assets
+Including: Non-netting settled credit default risk-weighted assets
+As at the approval date of the consolidated financial statements for the year ended 31 December 2020, changes of directors
+and supervisors of the Bank were as follows:
+8,536
+77,551
+955
+(21)
+2,441
+(3)
+Liabilities
+21
+(339)
+62,768
+Assets
+Liabilities
+Assets
+to the fair value of hedged items
+Carrying amount of hedged items
+Accumulated adjustments
+31 December 2021
+Loans and advances to customers
+Other (ii)
+Debt securities (i)
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+(3,119)
+97,444
+24,984
+38,119
+189
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(6,954)
+(15,090)
+(1)
+66,164
+68
+166
+(10,028)
+13,289
+1,462
+5,435
+Liabilities
+(237)
+6,908
+(5,062)
+58,827
+Assets
+Liabilities
+Assets
+Accumulated adjustments
+to the fair value of hedged items
+Carrying amount of hedged items
+31 December 2020
+Loans and advances to customers
+Other (ii)
+Debt securities (i)
+Other hedged items are included in due from banks and other financial institutions, repurchase agreements and
+customer deposits.
+(ii)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+(i)
+56
+(1)
+(7,293)
+59
+1,501
+249,836
+619,968
+(14,779)
+58,998
+income
+comprehensive
+income during
+the current year
+Liabilities
+Assets
+Accumulated
+effect on other
+Hedging instruments
+Effect on other
+comprehensive
+Carrying amount of hedged items
+31 December 2020
+Loans and advances to customers
+Other (ii)
+Debt securities (i)
+Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and
+other financial institutions, customer deposits and other liabilities.
+(ii)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+(8,839)
+(9,607)
+holders of the parent company
+315,906
+348,338
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity instrument
+Earnings:
+2020
+2021
+(62)
+18. EARNINGS PER SHARE
+(31)
+(65)
+(1,486)
+2,207
+(2,258)
+(51)
+2020
+2021
+ICBC
+196
+Hedged risk relating to the hedged items
+Hedging instruments
+Gain/(loss) arising from fair value hedges, net:
+The changes in fair value of the hedging instruments and net gains or losses arising from the hedged risk relating to the
+hedged items are set out below:
+Fair value hedges are used by the Group to protect against changes in fair value of financial assets and financial liabilities
+due to movements in market interest rates. The Group mainly used interest rate swaps as hedging instruments to hedge the
+interest risk of financial assets and financial liabilities.
+(2) Fair value hedges
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges in 2021 (2020: Nil).
+Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and
+other financial institutions, certificates of deposit, customer deposits and other liabilities.
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+(i)
+(4,637)
+(146)
+(323,077)
+119,466
+(4,524)
+(19)
+(308,298)
+58,190
+(82)
+2,278
+1,437
+94,804
+Final dividend on ordinary shares for 2021: RMB0.2933 per share
+(2020: RMBO.2660 per share)
+Income tax expense
+581
+(890)
+Effects of other
+(326)
+(717)
+Effects of profits attributable to associates and joint ventures
+(42,803)
+(51,427)
+Effects of non-taxable income (ii)
+20,478
+22,319
+(1,521)
+(827)
+Effects of different applicable rates of tax prevailing in other countries/regions
+Effects of non-deductible expenses (i)
+98,032
+106,225
+Tax at the PRC statutory income tax rate
+392,126
+424,899
+Profit before taxation
+2020
+2021
+PRC statutory income tax rate is 25%. Taxes on profits assessable elsewhere have been calculated at the applicable rates
+of tax prevailing in the countries/regions in which the Group operates in. The Group has reconciled income tax expense
+applicable to profit before taxation at the PRC statutory income tax rate to actual income tax expense for the Group as
+follows:
+(b) Reconciliation between income tax and accounting profit
+74,683
+104,534
+74,441
+The non-deductible expenses mainly represent non-deductible impairment provision and write-offs.
+(not recognised as at 31 December):
+Dividends on ordinary shares proposed for approval
+2020
+2021
+8,839
+9,607
+3,560
+3,560
+Interests on perpetual bonds
+5,279
+6,047
+Dividends or interests declared and paid to other equity instrument holders:
+Dividends on preference shares
+93,664
+94,804
+Final dividend on ordinary shares for 2020: RMB0.2660 per share
+(2019: RMBO.2628 per share)
+2020
+2021
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Dividends on ordinary shares declared and paid:
+17. DIVIDENDS
+ICBC
+192
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2021 includes
+a profit of RMB323,100 million (2020: RMB304,267 million) which has been dealt with in the financial statements of the
+Bank (Note 51).
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+(ii) The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal
+debts.
+(i)
+(49)
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+insurance,
+housing
+allowance,
+annuities and
+Actual
+additional
+Total
+Of which:
+amount of
+Discretionary
+medical
+emoluments
+deferred
+remuneration
+Fees Remuneration
+bonuses
+insurances
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+before tax
+RMB'000
+payment
+paid before tax
+RMB'000
+social
+RMB'000
+employer to
+Contribution
+338,551
+236,211
+2,601,657
+2,459,402
+64,833
+62,872
+2020
+31 December
+2021
+31 December
+Fiscal deposits and other
+Surplus reserves (ii)
+Mandatory reserves (i)
+Balances with central banks
+Cash on hand
+19. CASH AND BALANCES WITH CENTRAL BANKS
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+193
+Annual Report 2021
+Name
+Position
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2020
+by the
+(1)
+(2)
+(3)
+(1,071)
+Liabilities
+Assets
+627
+74,357
+21,108
+41,439
+7,187
+4,623
+Total
+five years
+five years
+one year
+Over
+year but
+within
+but within
+three
+months
+Within
+Over one
+Over three
+31 December 2020
+31 December 2021
+Fair values
+Notional amounts with remaining maturity of
+Included in the above derivative financial instruments, those designated as hedging instruments in fair value hedges are
+interest rate swaps and the details are set out below:
+3,074
+31,267
+Profit for the year attributable to ordinary shareholders of the parent company
+Shares:
+338,731
+(4) (5)=(1)+(2)+(3)+(4)
+(6)
+(7)=(5)-(6)
+354
+498
+159
+1,011
+1,011
+319
+448
+154
+921
+31 December
+921
+Liao Lin (i)
+0.86
+0.95
+0.86
+0.95
+356,407
+356,407
+Basic and diluted earnings per share were calculated using the profit for the year attributable to ordinary shareholders of the
+parent company divided by the weighted average number of ordinary shares in issue.
+Diluted earnings per share (RMB yuan)
+Basic earnings per share (RMB yuan)
+Weighted average number of ordinary shares in issue (in million shares)
+307,067
+Chen Siging
+31 December
+277
+2020
+Within
+Over one
+Over three
+Fair values
+Notional amounts with remaining maturity of
+31 December 2020
+(1,190)
+444
+105,675
+131
+6,723
+47,170
+51,651
+(96)
+5,679
+three
+months
+but within
+year but
+months
+25,087
+239
+8,730
+1,211
+Liabilities
+Assets
+Total
+five years
+4
+Over
+one year
+15,909
+77,779
+3
+29
+Equity derivatives
+71,490
+Currency swap contracts
+209
+Interest rate swap contracts
+within
+five years
+49
+1,243
+4,383
+one year
+months
+Over
+within
+year but
+months
+but within
+three
+five years
+Within
+Over three
+Fair values
+Notional amounts with remaining maturity of
+31 December 2021
+Included in the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set
+out below:
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, equity and other derivatives
+that are used to protect against exposures to variability of future cash flows.
+(1) Cash flow hedges
+Over one
+33
+five years
+Assets
+Equity and other derivatives
+(948)
+(146)
+8
+436
+91,644
+1,391
+43,049
+Total
+47,204
+8,352
+127
+5,283
+2,878
+64
+Interest rate swap contracts
+Liabilities
+Currency swap contracts
+3
+150,480
+68
+61
+4,150
+470
+470
+470
+Nout Wellink
+Independent Non-executive Director
+470
+470
+Independent Non-executive Director
+470
+Independent Non-executive Director
+410
+410
+410
+Zhang Wei
+Shareholder Supervisor
+580
+Fred Zuliu Hu
+2021
+Shen Si (ii)
+470
+Vice Chairman, Executive Director, President
+Non-executive Director
+Zheng Fuqing
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Cao Liqun
+470
+Non-executive Director
+Independent Non-executive Director
+520
+520
+520
+Yang Siu Shun
+Independent Non-executive Director
+470
+Anthony Francis Neoh
+(140,973)
+(i)
+374
+31 December 2021
+Loans and advances to customers
+Other (ii)
+Debt securities (i)
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equity are as follows:
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+Carrying amount of hedged items
+Annual Report 2021
+4,211
+175,635
+242
+9,974
+93,691
+71,728
+(546)
+(1,243)
+(15)
+(1,804)
+(4,263)
+Assets
+Hedging instruments
+Effect on other
+comprehensive
+income during
+the current year
+(64,319)
+38,352
+(4,416)
+108
+(28,533)
+14,027
+(8)
+Liabilities
+74
+161
+192
+(35,786)
+19,617
+income
+comprehensive
+Accumulated
+effect on other
+4,708
+134,155
+195
+(71,337)
+159
+1,011
+1,011
+27
+27
+37
+13
+77
+77
+Ye Donghai
+Mei Yingchun (vi)
+Dong Shi
+Former Non-executive Director
+Sheila Colleen Bair (vii)
+Hui Ping (viii)
+Former Independent Non-executive Director
+Former Employee Supervisor
+498
+354
+1,011
+1,011
+250
+250
+250
+Shen Bingxi
+External Supervisor
+Gu shu (iv)
+Yang Guozhong (v)
+115
+Hu Hao
+of Directors, Executive Director, President
+Former Chairman of the Board of Supervisors
+Former Executive Director, Senior Executive
+Vice President
+Former Non-executive Director
+354
+498
+159
+Former Vice Chairman of the Board
+115
+96,863
+409,047
+186,189
+ICBC
+Annual Report 2021
+Fees of Mr. Huang Li, Mr. Wu Xiangjiang and Mr. Hui Ping were their allowances obtained as Employee Supervisors of the
+Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+The remuneration before tax payable to Directors and Supervisors for 2020 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which include the amounts disclosed in the 2020 Annual
+Report.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+8,420
+198
+515
+878
+37
+3,264
+1,988
+2,805
+115
+37
+37
+8,935
+External Supervisor
+739,288
+663,496
+398,535
+59
+69
+(128)
+(117)
+505,841
+584,676
+8,784,445
+Measured at FVTPL:
+114,994
+126,192
+Cash advanced as collateral on securities borrowing
+42,661
+28,420
+157,655
+154,612
+Reverse repurchase agreements-securities
+Qu Qiang
+Former Non-executive Director
+13
+5,107,815
+Exchange rate contracts
+Liabilities
+Assets
+amounts
+Liabilities
+Fair values
+44,956
+Notional
+amounts
+Notional
+31 December 2020
+13
+The notional amounts and fair values of derivative financial instruments held by the Group are set out below:
+A derivative is a financial instrument, the value of which changes in response to the changes in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps, options and futures.
+The notional amount of a derivative represents the underlying amount of the specific financial instruments mentioned above.
+It indicates the volume of business transacted by the Group but does not reflect the risk.
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+Fair values
+Assets
+(41,578)
+5,779,609
+95,260
+76,140
+8,100,994
+(24,166)
+15,893
+804,987
+(14,302)
+15,478
+975,169
+Commodity derivatives and other
+(25,248)
+23,002
+2,199,849
+(15,457)
+15,706
+2,018,010
+Interest rate contracts
+(91,559)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+31 December 2021
+1,285
+559,720
+481,435
+3,279
+3,364
+262,922
+192,030
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+204,585
+188,935
+Other financial institutions operating in Chinese mainland
+88,934
+97,106
+Banks operating in Chinese mainland
+Placements with banks and other financial institutions:
+522,913
+346,457
+ICBC
+234
+2,099
+515
+1,584
+Huang Li
+Employee Supervisor
+50
+50
+50
+Wu Xiangjiang (iii)
+Employee Supervisor
+13
+(742)
+480,693
+827,150
+Less: Allowance for impairment losses
+1,081,897
+194
+(736)
+558,984
+89.33
+Industrial and Commercial Bank of China
+97.86
+97.86
+Industrial and Commercial Bank of China
+THB20,132 million
+THB23,711 million
+Bangkok, Thailand
+(Thai) Public Company Limited ("ICBC Thai")
+Industrial and Commercial Bank of China
+100
+00
+100
+("ICBC International")
+Investment banking
+Commercial banking
+(Malaysia) Berhad
+Jakarta, Indonesia
+Kuala Lumpur, Malaysia
+USD361 million
+MYR833 million
+Hong Kong SAR, the PRC
+89.33
+MOP589 million
+MOP12,064 million
+Macau SAR, the PRC
+Commercial banking
+Commercial banking
+Commercial banking
+(Macau) Limited ("ICBC Macau")
+98.61
+98.61
+Industrial and Commercial Bank of China
+100
+100
+IDR3,706,100 million
+MYR833 million
+PT. Bank ICBC Indonesia
+HKD5,963 million
+163,283
+100
+31 December
+31 December
+31 December
+Amount
+paid-in capital
+Percentage of equity interest %
+Name
+Nominal value
+of issued share/
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+205
+Annual Report 2021
+147,383
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Industrial and Commercial Bank of China
+(Asia) Limited ("ICBC Asia")
+2021
+100
+ICBC International Holdings Limited
+144,671
+160,571
+Total
+Commercial banking
+activities
+Principal
+and operations
+Hong Kong SAR, the PRC
+Place of
+incorporation/
+registration
+invested
+by the Bank
+HKD54,738 million
+2021
+HKD44,188 million
+100
+100
+2020
+HKD5,963 million
+Stage 3
+Corporate entities
+Stage 1
+2,206
+3,349
+Listed outside Hong Kong SAR
+1,521
+1,226
+Unlisted
+106,629
+220,368
+112,194
+224,943
+623,223
+784,483
+202
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Financial investments measured at FVTOCI
+31 December
+2021
+Debt securities, analysed by type of issuers:
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+Accrued interest
+4,044
+Listed in Hong Kong SAR
+Funds and other investments:
+93,728
+Debt securities:
+2,712
+Listed in Hong Kong SAR
+3,301
+2,802
+Listed outside Hong Kong SAR
+21,164
+30,847
+Unlisted
+395,818
+432,163
+Equity investments
+420,283
+Equity investments:
+Listed in Hong Kong SAR
+1,783
+2,493
+Listed outside Hong Kong SAR
+31,675
+20,122
+Unlisted
+57,288
+71,113
+90,746
+465,812
+Stage 2
+Analysed into:
+Listed in Hong Kong SAR
+1,067,060
+1,704,164
+1,459,018
+2,656
+2,385
+5,414
+8,569
+91,370
+71,016
+99,440
+81,970
+1,803,604
+1,540,988
+The Group designates certain non-trading equity investments as financial investments measured at FVTOCI. In 2021,
+dividend income from such equity investments was RMB3,388 million (2020: RMB2,355 million). There was RMB291 million
+dividend income from equity investments derecognised in 2021 (2020: RMB133 million). In 2021, the value of equity
+investments disposed of was RMB6,963 million (2020: RMB2,247 million) and the cumulative losses transferred into retained
+earnings from other comprehensive income after disposal was RMB334 million (2020: cumulative gains of RMB221 million).
+Movements of the allowance for impairment loss on financial investments measured at FVTOCI are accounted for in the
+following way. Allowance for impairment losses on financial investments measured at FVTOCI is recognised in other
+comprehensive income without decreasing the carrying amount of financial investments presented in the consolidated
+statement of financial position, and any impairment gain or loss is recognised in the profit or loss.
+Annual Report 2021
+203
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Balance at 1 January 2021
+Transfer:
+to stage 1
+― to stage 2
+1,355,305
+219,291
+229,406
+172,667
+Listed outside Hong Kong SAR
+Unlisted
+Equity investments:
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+31 December
+2020
+653,774
+479,505
+171,130
+169,478
+Debt securities:
+310,160
+551,757
+509,422
+17,343
+19,398
+1,704,164
+1,459,018
+99,440
+81,970
+1,803,604
+1,540,988
+119,453
+281,215
+2,712
+2,056
+2021
+― to stage 2
+― to stage 1
+Transfer:
+198
+80
+1,778
+Balance at 1 January 2020
+Total
+Stage 3
+Stage 2
+Stage 1
+4,370
+1,341
+355
+2,674
+Balance at 31 December 2021
+(75)
+(13)
+(1)
+78
+(61)
+(78)
+2
+31 December
+2020
+2021
+31 December
+(c) Financial investments measured at amortised cost
+2,468
+240
+22
+2,206
+(60)
+(6)
+(54)
+472
+48
+18
+406
+Balance at 31 December 2020
+Other movements
+Charge for the year
+― to stage 3
+(2)
+Debt securities, analysed by type of issuers:
+Other movements
+1,070
+(5)
+(3)
+(8)
+Balance at 31 December 2021
+5,639
+2,200
+118
+7,957
+Stage 1
+Stage 2
+Stage 3
+Total
+Balance at 1 January 2020
+2,255
+1,339
+127
+3,721
+Transfer:
+784,483
+Other movements
+1,977
+2,892
+3,008
+322
+585
+Charge for the year
+44
+(44)
+― to stage 3
+12
+(12)
+2,468
+240
+22
+222
+402
+(402)
+Stage 3
+121
+Total
+5,073
+to stage 2
+to stage 3
+Charge/(reverse) for the year
+(116)
+Governments and central banks (i)
+Policy banks
+Banks and other financial institutions (ii)
+19
+(19)
+(3
+3
+Other movements
+Charge/(reverse) for the year
+― to stage 3
+to stage 2
+― to stage 1
+Stage 1
+2,234
+to stage 1
+Transfer:
+Balance at 1 January 2021
+Movements of the allowance for impairment losses on financial investments measured at amortised cost are as follows:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+204
+123,820
+16
+179,807
+1,572
+(209)
+31 December
+31 December
+Listed investments, at cost
+Unlisted investments, at cost
+25. INVESTMENTS IN SUBSIDIARIES
+Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from January 2022 to November 2032 and bear interest rates ranging from 4.25% to
+6.60% per annum.
+This includes a special government bond, which is a non-negotiable bond with a nominal value of RMB85,000 million
+(31 December 2020: RMB85,000 million) issued by the Ministry of Finance of the People's Republic of China (the
+"MOF") to the Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+This includes Huarong bonds of RMB90,309 million (31 December 2020: RMB90,309 million). Huarong bonds are a
+series of long-term bonds issued by China Huarong Asset Management Co., Ltd. ("Huarong") in the year of 2000
+and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the issuance of the
+bonds were used to purchase non-performing loans of the Bank. The bonds are non-negotiable, with a tenure of 10
+years and bear interest at a fixed rate of 2.25% per annum. The MOF provides funding support for the repayment
+of principal and interest of the bonds. In 2010, the Bank received a notice from the MOF that the maturity dates of
+the Huarong bonds were extended for ten years. In 2020, the Bank received a notice from the MOF to adjust the
+interest rate of the Huarong bonds, starting from 1 January 2020. Interest rate would be determined on yearly basis
+with reference to the average level of five-year government bond yield in the previous year. In January 2021, the Bank
+received notice from the MOF that the maturity dates of Huarong bonds were further extended for ten years. As at
+31 December 2021, the Bank had received accumulated early repayments amounting to RMB222,687 million (31
+December 2020: RMB222,687 million).
+(iii)
+(ii)
+(i)
+Balance at 31 December 2020
+5,073
+121
+(235)
+1,587
+(1)
+GE
+(5)
+2,718
+2,234
+(21)
+Market value of listed securities
+38,018
+6,265,668
+6,830,933
+38,463
+40,699
+38,341
+122
+Accrued interest
+Other investments (iii)
+6,229,880
+6,800,427
+78,888
+84,598
+46,759
+61,257
+370,300
+432,980
+528,587
+559,808
+5,205,346
+5,661,784
+Accrued interest
+Corporate entities
+162
+40,861
+6,838,890
+Less: Allowance for impairment losses
+(7,957)
+36,094
+38,018
+36,094
+Unlisted
+Other investments:
+6,227,650
+6,794,839
+6,106,393
+6,615,869
+2020
+Unlisted
+147,531
+Listed outside Hong Kong SAR
+42,226
+31,439
+Listed in Hong Kong SAR
+Debt securities:
+Analysed into:
+6,270,741
+(5,073)
+6,265,668
+6,830,933
+79,031
+623,223
+― to stage 3
+331,097
+993,965
+1,033,331
+97,216
+95,979
+Profit from continuing operations
+10,725
+5,459
+Equity method of the associate
+Net assets of the associate attributable to the parent company
+Group's effective interest
+82,364
+81,530
+20.06%
+20.06%
+Group's share of net assets of the associate
+16,522
+16,355
+Goodwill
+8,447
+9,408
+1,129,310
+Balance of the Group's interest in Standard Bank in the
+1,091,181
+Liabilities
+31 December
+31 December
+2021
+2020
+24,621
+25,415
+37,161
+15,791
+61,782
+41,206
+Standard Bank Group Limited ("Standard Bank") is a listed commercial bank registered in Johannesburg, the Republic of
+South Africa with an issued capital of ZAR162 million and a strategic partner of the Group. As at 31 December 2021 and 31
+December 2020, the Group's equity interest and voting rights were 20.06%.
+The accounting policies of Standard Bank are consistent with those of the Group. Its financial information is significant to
+the Group and summarised as follows:
+As at/
+year ended
+31 December
+As at/
+year ended
+31 December
+2021
+2020
+The associate
+Assets
+Net assets
+Standard Bank
+Other
+consolidated financial statements
+25,763
+the equity
+comprehensive cash dividends
+at end
+at end
+of the year
+in capital
+in capital
+method
+income
+or profits
+Others
+of the year
+of the year
+Joint ventures
+1,430
+7
+(193)
+72
+3
+Decrease
+24,969
+Increase
+Balance
+Annual Report 2021
+207
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b)
+Movements of associates and joint ventures investments of the Group are as follows:
+Movements during 2021
+Investment
+income
+recognised
+Declared
+Balance of
+allowance for
+Name of
+investee
+Balance
+at beginning
+under
+Other
+distribution of
+impairment
+(a) Carrying value of the Group's associates and joint ventures are as follows:
+41,206
+61,782
+Lima, Peru
+Beijing, the PRC
+Tianjin, the PRC
+("ICBC Leasing")
+ICBC-AXA Assurance Co., Ltd.*
+60
+60
+RMB12,505 million
+ICBC Financial Asset Investment Co., Ltd.*
+100
+100
+RMB27,000 million
+RMB7,980 million
+RMB27,000 million
+Shanghai, the PRC
+Nanjing, the PRC
+("ICBC Investment")
+ICBC Wealth Management Co., Ltd.*
+100
+100
+RMB16,000 million
+RMB16,000 million
+Beijing, the PRC
+RMB433 million
+RMB11,000 million
+Commercial banking
+Fund management
+Leasing
+USD120 million
+100
+Sao Paulo, Brazil
+Commercial banking
+(Brasil) S.A.
+Industrial and Commercial Bank of China
+100
+100
+ARS28,415 million
+USD904 million
+Buenos Aires, Argentina
+Commercial banking
+(Argentina) S.A
+ICBC Peru Bank ("ICBC Peru")
+100
+100
+ICBC Credit Suisse Asset Management Co., Ltd.*
+80
+80
+ICBC Financial Leasing Co., Ltd.*
+100
+USD120 million
+RMB200 million
+RMB18,000 million
+Insurance
+Financial asset
+investment
+Wealth
+management
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd.*
+31 December
+2021
+31 December
+60,572
+2020
+39,776
+1,210
+61,782
+1,430
+41,206
+31 December
+31 December
+2021
+2020
+47,108
+32,110
+15,039
+9,444
+62,147
+41,554
+(365)
+(348)
+Less: Allowance for impairment losses
+Goodwill
+Share of net assets
+Interests in joint ventures
+60
+60
+Chongqing Bishan ICBC Rural Bank Co., Ltd.*
+100
+100
+RMB200 million
+RMB100 million
+RMB120 million
+RMB100 million
+Zhejiang, the PRC
+Chongqing, the PRC
+Commercial banking
+Commercial banking
+(102)
+*
+As at 31 December 2021 and 31 December 2020, the Group held 97.98% voting rights of ICBC Thai. Apart from ICBC Thai,
+voting rights of other subsidiaries of the Group are in line with the Group's equity interests.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+206
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Interests in associates
+These subsidiaries incorporated in Chinese mainland are all limited liability companies.
+Real202 million
+(7)
+Associates
+30,801
+168,317
+Depreciation charge for the year
+6,099
+907
+6,683
+5,554
+19,243
+Impairment charge for the year
+3,691
+3,691
+Disposals
+(979)
+(104)
+(6,960)
+(4,084)
+(12,127)
+At 31 December 2020 and 1 January 2021
+70,824
+61,791
+38
+9,983
+65,704
+(24,915)
+51
+5,014
+Disposals
+(2,353)
+(601)
+(232)
+(7,516)
+(3,769)
+(14,471)
+At 31 December 2021
+186,949
+18,216
+13,590
+81,632
+180,945
+481,332
+Accumulated depreciation and impairment:
+At 1 January 2020
+38
+19,850
+10,786
+35,962
+41,366
+191,036
+Carrying amount:
+At 31 December 2020
+97,485
+35,173
+2,039
+18,371
+133,211
+286,279
+At 31 December 2021
+111,146
+18,182
+2,097
+19,292
+139,579
+290,296
+208
+ICBC
+62,340
+61,514
+11,493
+75,803
+179,124
+Depreciation charge for the year
+6,353
+866
+7,377
+5,901
+20,497
+Impairment charge for the year
+4
+2,282
+2,286
+Disposals
+(1,374)
+(4)
+(159)
+(6,555)
+(2,779)
+(10,871)
+At 31 December 2021
+34
+CIP transfer in/(out)
+30,400
+10,527
+553
+(913)
+(2,811)
+60,937
+(365)
+Total
+41,554
+21,207
+(206)
+2,869
+556
+(1,015)
+(2,818)
+62,147
+(365)
+27. PROPERTY AND EQUIPMENT
+Office
+equipment
+Properties and
+buildings
+2,797
+Construction
+(13)
+40,124
+Standard Bank
+25,763
+2,101
+537
+(875)
+(2,557)
+24,969
+(348)
+Other
+14,361
+21,200
+(13)
+696
+16
+(38)
+(254)
+35,968
+(17)
+Subtotal
+21,200
+in progress
+Leasehold
+improvements
+and motor
+Disposals
+(2,077)
+(301)
+(211)
+(7,163)
+(15,469)
+(25,221)
+At 31 December 2020 and 1 January 2021
+168,309
+35,211
+12,825
+79,885
+169,173
+465,403
+Additions
+1,143
+8,521
+997
+9,212
+8,573
+138
+(16,517)
+7,806
+Aircraft and
+vehicles
+vessels
+Total
+Cost:
+At 1 January 2020
+161,359
+39,752
+11,928
+1,210
+76,898
+454,878
+Additions
+1,221
+12,277
+1,108
+10,012
+11,128
+35,746
+CIP transfer in/out)
+164,941
+354,451
+Real202 million
+Mexico City, Mexico
+Stage 3
+650
+211
+Stage 2
+Stage 1
+Balance at 31 December 2021
+Other movements
+Write-offs and transfer out
+Reverse for the year
+to stage 3
+― to stage 2
+to stage 1
+Transfer:
+Balance at 1 January 2021
+(b) Movements of the allowance for impairment losses on loans and advances to customers
+measured at FVTOCI are as follows:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+200
+530,300
+Total
+217,446
+861
+(7)
+_
+to stage 2
+to stage 1
+Transfer:
+232
+5
+227
+Balance at 1 January 2020
+Total
+Stage 3
+Stage 2
+Stage 1
+219
+28
+(7)
+(551)
+(84)
+(71)
+(551)
+191
+(13)
+to stage 3
+89,151
+Balance at 31 December 2020
+(6,913)
+― to stage 2
+(1,495)
+(22,507)
+24,002
+― to stage 1
+Transfer:
+478,498
+184,688
+78,494
+215,316
+Balance at 1 January 2020
+Total
+Stage 3
+Stage 2
+Stage 1
+603,764
+223,739
+110,649
+9,311
+223,703
+(2,398)
+(4,838)
+(4,052)
+4,977
+4,977
+(2,542)
+(630)
+(880)
+Other movements
+previously written off
+Recoveries of loans and advances
+(120,324)
+(120,317)
+(7)
+Write-offs and transfer out
+171,201
+95,941
+78,244
+(2,984)
+(Reverse)/charge for the year
+58,592
+(53,754)
+― to stage 3
+(Reverse)/charge for the year
+Other movements
+(16)
+21,791
+Funds and other investments
+18,002
+19
+Corporate entities
+3,370
+1,755
+12,858
+Banks and other financial institutions
+Policy banks
+Governments and central banks
+Debt securities, analysed by type of issuers:
+257,254
+270,335
+10,497
+9,417
+246,757
+260,918
+102,630
+154,776
+92,666
+21,791
+Other financial investments measured at FVTPL
+70,167
+90,403
+83,231
+81,329
+201,053
+159,365
+1,827
+4,536
+188,144
+143,637
+11,082
+11,192
+Analysed into:
+Funds and other investments
+Equity investments
+Corporate entities
+Banks and other financial institutions
+Policy banks
+Debt securities, analysed by type of issuers:
+172,778
+56,114
+58,218
+14,794
+784,483
+623,223
+이 회
+2020
+2021
+31 December
+31 December
+Financial investments measured at amortised cost
+Financial investments measured at FVTOCI
+Financial investments measured at FVTPL
+24. FINANCIAL INVESTMENTS
+861
+650
+211
+Balance at 31 December 2020
+(0)
+(0)
+629
+645
+(b)
+1,803,604
+1,540,988
+6,830,933
+12,670
+73,219
+97,364
+2020
+31 December
+31 December
+2021
+Financial investments designated as at FVTPL
+Equity investments
+Corporate entities
+269,376
+Banks and other financial institutions
+Financial investments held for trading
+Debt securities, analysed by type of issuers:
+Governments and central banks
+(a) Financial investments measured at FVTPL
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+201
+Annual Report 2021
+8,591,139
+9,257,760
+6,265,668
+Policy banks
+Commercial banking
+Balance at 31 December 2021
+(2,268)
+80
+EUR437 million
+EUR437 million
+Luxembourg
+Commercial banking
+(Europe) S.A.
+ICBC (London) PLC
+100
+ICBC Standard Bank PLC
+Bank ICBC (Joint stock company)
+100
+ICBC Turkey Bank Anonim Şirketi
+92.84
+ICBC Austria Bank GmbH
+100
+Industrial and Commercial Bank of China
+(USA) NA
+88888
+100
+100
+100
+92.84
+100
+(New Zealand) Limited ("ICBC New Zealand")
+31 December 2021
+Gross amounts
+116,390
+Based on master repurchase agreements and related supplementary agreements, the Group offsets certain reverse
+repurchase agreements and repurchase agreements, and presents net asset (or liability) amounts as reverse repurchase
+agreements (or repurchase agreements) in the consolidated financial statements in accordance with the accounting
+policy of offsetting.
+(i)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+10
+KZT8,933 million
+KZT8,933 million
+Almaty, Kazakhstan
+Commercial banking
+(Almaty) Joint Stock Company
+Industrial and Commercial Bank of China
+100
+100
+NZD234 million
+NZD234 million
+Auckland, New Zealand
+Commercial banking
+Industrial and Commercial Bank of China
+Reverse repurchase agreements
+Repurchase agreements
+100
+USD200 million
+USD1,083 million
+RUB10,810 million
+80
+80
+80
+CAD208 million
+CAD218.66 million
+Delaware and
+New York, United States
+Toronto, Canada
+Broker dealer and
+margin trading
+Commercial banking
+Industrial and Commercial Bank of China
+Mexico S.A.
+100
+Industrial and Commercial Bank of China
+100
+10
+10
+100
+100
+180
+100
+MXN1,597 million
+MXN1,597 million
+80
+888888
+Industrial and Commercial Bank of China
+(Canada)
+USD50 million
+USD200 million
+USD839 million
+RUB10,810 million
+London, United Kingdom
+London, United Kingdom
+Commercial banking
+Banking
+Moscow, Russia
+Commercial banking
+TRY860 million
+USD425 million
+Istanbul, Turkey
+Commercial banking
+EUR200 million
+USD369 million
+EUR200 million
+USD306 million
+Vienna, Austria
+New York, United States
+Commercial banking
+Commercial banking
+Industrial and Commercial Bank of China
+Financial Services LLC
+100
+100
+USD50.25 million
+Net amounts
+104,765
+131,623
+Gross amounts
+203,791
+31 December 2020
+Net amounts
+(15,581)
+17,860
+530,300
+Total
+Stage 3
+217,446
+89,151
+223,703
+to stage 1
+Transfer:
+Balance at 1 January 2021
+Stage 2
+Stage 1
+(a) Movements of the allowance for impairment losses on loans and advances to customers
+measured at amortised cost are as follows:
+23.2 Impairment provision
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+199
+Annual Report 2021
+(2,279)
+As at 31 December 2021, the Group's allowance for impairment losses on loans and advances to customers measured at
+FVTOCI was RMB219 million, refer to note 23.2(b) (31 December 2020: RMB861 million).
+to stage 2
+14,056
+(564)
+(628)
+Other movements
+9,020
+9,020
+previously written off
+Recoveries of loans and advances
+168,351
+(100,447)
+(100,447)
+Write-offs and transfer out
+67,614
+58,906
+41,831
+Charge for the year
+38,853
+(35,319)
+(3,534)
+Stage 2
+(4,200)
+(9,856)
+3,914
+18,136,328
+3,594
+20,109,200
+Loans
+7,115,279
+173,757
+11,087,741
+10,913,984
+12,181,841
+12,000,191
+181,650
+7,944,781
+31 December
+2020
+2021
+31 December
+Discounted bills
+Personal loans
+― Finance lease
+Corporate loans and advances
+Loans
+Measured at amortised cost:
+23.1 Loans and advances to customers by type of measurement:
+23. LOANS AND ADVANCES TO CUSTOMERS
+As part of the reverse repurchase agreements, the Group has received securities that it is allowed to sell or repledge in
+the absence of default by their owners. As at 31 December 2021, the Group had received securities with a fair value
+of approximately RMB143,559 million on such terms (31 December 2020: RMB184,324 million). Of these, securities
+with a fair value of approximately RMB107,698 million had been repledged under repurchase agreements (31
+December 2020: RMB119,984 million). The Group has an obligation to return the securities to its counterparties at the
+maturity of the contract. If the collateral received declines in value, the Group may, in certain circumstances, require
+additional collateral.
+131,182
+236,536
+263,394
+(ii)
+218,583
+Accrued interest
+2,370
+45,707
+3,091
+42,311
+20,174,699
+Corporate loans and advances
+414,292
+534,671
+9
+12
+11,078
+403,205
+9,271
+525,388
+Measured at FVTPL:
+Accrued interest
+(3,460)
+Discounted bills
+Corporate loans and advances
+Measured at FVTOCI:
+17,718,122
+19,570,935
+(530,300)
+(603,764)
+measured at amortised cost (note 23.2(a))
+Less: Allowance for impairment losses of loans and advances to customers
+18,248,422
+― Loans
+2,718
+(680)
+218
+(b) Movements of deferred income tax
+Deferred tax assets:
+Recognised
+in other
+31 December
+1 January
+2021
+Recognised in
+profit or loss
+comprehensive
+income
+2021
+(In RMB millions, unless otherwise stated)
+Allowance for impairment losses
+11,568
+81,662
+Change in fair value of financial instruments
+measured at FVTPL
+(2,470)
+(985)
+(3,455)
+Change in fair value of financial instruments
+measured at FVTOCI
+(5,417)
+(218)
+70,094
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+209
+(268)
+(3,273)
+(937)
+Change in fair value of financial instruments
+measured at FVTPL
+15,692
+3,635
+7,236
+1,809
+Change in fair value of financial instruments
+measured at FVTOCI
+2,737
+690
+4,823
+1,149
+Other
+6,285
+1,567
+3,465
+860
+24,179
+5,624
+12,251
+2,881
+Annual Report 2021
+(5,635)
+Accrued staff costs
+6,628
+2,056
+Change in fair value of financial instruments
+measured at FVTOCI
+1,149
+(459)
+690
+Other
+860
+707
+1,567
+2,881
+3,202
+(459)
+5,624
+Deferred tax assets:
+1 January
+Recognised in
+Recognised
+in other
+comprehensive
+31 December
+2020
+profit or loss
+income
+2020
+Allowance for impairment losses
+62,888
+7,206
+3,635
+(535)
+1,826
+measured at FVTPL
+8,684
+Other
+(1,122)
+(943)
+68
+(1,997)
+67,713
+11,696
+(150)
+79,259
+Deferred tax liabilities:
+Recognised
+in other
+1 January
+Recognised in
+comprehensive
+31 December
+2021
+profit or loss
+income
+2021
+Allowance for impairment losses
+(937)
+669
+(268)
+Change in fair value of financial instruments
+1,809
+70,094
+Allowance for impairment losses
+differences
+30. FINANCIAL LIABILITIES DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+212
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash flow
+projections are based on financial forecasts approved by management of the subsidiaries. The average growth rates are
+projected based on the similar rates which do not exceed the long-term average growth rate for the business in which the
+CGU operates in. The discount rate is the before-tax rate and reflects the specific risk associated with the CGU.
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+8,586
+8,169
+(359)
+(349)
+Interbank wealth management products
+8,945
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+As at 31 December 2021, the process of obtaining the legal titles for the Group's properties and buildings with an aggregate
+carrying amount of RMB12,798 million (31 December 2020: RMB11,203 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+As at 31 December 2021, the carrying amount of aircraft and vessels leased out by the Group under operating leases was
+RMB139,579 million (31 December 2020: RMB133,211 million).
+As at 31 December 2021, the carrying amount of aircraft and vessels owned by the Group that have been pledged as
+security for liabilities due to banks and other financial institutions was RMB92,426 million (31 December 2020: RMB77,858
+million).
+As at 31 December 2021, the construction in progress for aircraft and vessels was RMB9, 101 million (31 December 2020:
+RMB12,623 million).
+28. DEFERRED TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+Deferred tax assets:
+31 December 2021
+Deductible/
+Deferred
+ICBC
+Financial liabilities related to precious metals
+and account-based investment products
+Debt securities issued
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+31 December
+2020
+2021
+31 December
+Deposits:
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+For 2021 and 2020, there were no significant changes in the credit spread of the Group and therefore the amounts of
+changes in fair value of the financial liabilities arising from changes in the credit risk and the accumulated amounts as at the
+end of the respective years were not significant. The changes in fair value of the financial liabilities were mainly attributable
+to changes in other market factors.
+Financial liabilities related to precious metals and account-based investment products, and certain issued debt
+securities have been matched with precious metals and derivatives of the Group as part of a documented risk
+management strategy to mitigate market risk. An accounting mismatch would arise if these financial liabilities were
+accounted for at amortised cost, whereas the related precious metals and derivative were measured at fair value with
+movements in fair value taken through the statement of profit or loss. By designating these financial liabilities at
+FVTPL, the movement in their fair values is recorded in the statement of profit or loss. As at 31 December 2021 and 31
+December 2020, the difference between the fair values of the financial liabilities related to precious metals, account-
+based investment products and issued debt securities and the amounts that the Group would be contractually required
+to pay to the holders of the financial liabilities related to precious metals, account-based investment products and
+issued debt securities upon maturity was not significant.
+The principal-guaranteed interbank wealth management products issued by the Group and the financial assets which
+the aforesaid products held form part of a group of financial instruments that were managed together on a fair
+value basis, and were classified as financial liabilities and financial assets designated as at FVTPL, respectively. As at
+31 December 2020, the fair value of the interbank wealth management products was approximately the same as the
+amount that the Group would be contractually required to pay to the holders of the wealth management products
+upon maturity.
+(i)
+87,938
+87,180
+10,771
+4,283
+11,574
+18,409
+60,704
+64,488
+4,889
+2020
+2021
+31 December
+31 December
+€ €
+Other
+31 December 2020
+Deductible/
+Deferred
+(taxable)
+temporary
+tax
+assets/
+(7,847)
+(1,997)
+(5,106)
+(1,122)
+319,327
+79,259
+271,766
+67,713
+Deferred tax liabilities:
+31 December 2021
+31 December 2020
+Taxable/
+Deferred
+Taxable/
+Deferred
+(deductible)
+tax
+(deductible)
+tax
+temporary
+liabilities/
+temporary
+liabilities/
+differences
+(assets)
+Other
+(assets)
+6,628
+8,684
+(taxable)
+temporary
+tax
+assets/
+differences
+(liabilities)
+differences
+(liabilities)
+Allowance for impairment losses
+328,794
+81,662
+281,442
+70,094
+Change in fair value of financial instruments
+measured at FVTPL
+(13,823)
+(3,455)
+(9,858)
+(2,470)
+Change in fair value of financial instruments
+measured at FVTOCI
+(22,620)
+(5,635)
+(21,224)
+(5,417)
+Accrued staff costs
+34,823
+26,512
+Change in fair value of financial instruments
+measured at FVTPL
+(851)
+Net carrying amount
+Less: Allowance for impairment losses
+Subtotal
+Exchange difference
+At 1 January
+Goodwill
+(ii)
+31,662
+139
+13,815
+17,708
+2021
+33,752
+14,549
+18,392
+At 31 December 2021
+At 31 December 2020
+Carrying amount:
+251
+219
+32
+At 31 December 2021
+(65)
+316
+811
+2020
+8,945
+9,517
+40,625
+Additions
+9,317
+1,357
+93
+10,767
+Decreases
+(1,251)
+(1,341)
+(775)
+(3,367)
+At 31 December 2020 and 1 January 2021
+30,529
+16,550
+946
+48,025
+Additions
+6,926
+91
+7,017
+Decreases
+(3,191)
+8,518
+(572)
+(427)
+119
+197
+| || |
+(55)
+1,727
+12,095
+At 31 December 2020 and 1 January 2021
+(813)
+(60)
+(39)
+(714)
+Decreases
+7,803
+91
+623
+7,089
+Depreciation charge for the year
+6,967
+104
+1,143
+5,720
+At 1 January 2020
+Accumulated depreciation:
+50,730
+357
+16,109
+34,264
+At 31 December 2021
+(4,312)
+135
+1,628
+13,957
+7,011
+(10)
+Decreases
+274
+42
+At 31 December 2020 and 1 January 2021
+101
+18
+Impairment charge for the year
+173
+24
+At 1 January 2020
+Impairment:
+18,817
+218
+2,075
+16,524
+At 31 December 2021
+(2,837)
+(33)
+(222)
+(2,582)
+Decreases
+7,697
+116
+570
+Depreciation charge for the year
+16,534
+22,463
+At 1 January 2020
+comprehensive
+31 December
+2020
+profit or loss
+income
+2020
+Allowance for impairment losses
+(535)
+(402)
+(937)
+Change in fair value of financial instruments
+measured at FVTPL
+636
+1,173
+1,809
+Change in fair value of financial instruments
+measured at FVTOCI
+1,357
+(208)
+1,149
+Other
+415
+445
+860
+1,873
+Recognised in
+1,216
+1 January
+Recognised
+(1,619)
+(2,470)
+Change in fair value of financial instruments
+measured at FVTOCI
+(5,781)
+364
+(5,417)
+Accrued staff costs
+6,290
+338
+6,628
+Other
+(10)
+(1,005)
+(107)
+(1,122)
+62,536
+4,920
+257
+67,713
+210
+ICBC
+Deferred tax liabilities:
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+in other
+2,286,492
+(208)
+As at 31 December 2021, the Group did not have significant unrecognised deferred tax assets (31 December 2020: Nil).
+Other
+110,574
+28,858
+717,915
+734,335
+Less: Allowance for impairment losses
+(10,053)
+(5,077)
+707,862
+729,258
+Annual Report 2021
+211
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(i) Right-of-use assets
+Leased
+properties
+Leased
+Leased office
+and buildings
+aircraft
+and vessels
+equipment and
+motor vehicles
+Total
+Cost:
+1,985
+2,881
+2,283
+6,211
+29. OTHER ASSETS
+31 December
+31 December
+2021
+2020
+Settlement and clearing balances
+Precious metals
+Right-of-use assets (i)
+Land use rights
+Goodwill (ii)
+Advance payments
+Repossessed assets
+Interest receivable
+267,342
+349,590
+267,239
+278,429
+31,913
+34,068
+15,593
+16,225
+8,518
+8,945
+8,242
+8,878
+7,357
+143,928
+1,269
+of shares
+2,179,522
+134,346
+1,775
+2,315,643
+15/12/2021
+21 ICBC 03 Tier 2 Bond
+13/12/2021
+100 Yuan
+10,000
+3.74%
+14/12/2021 15/12/2036
+이
+Accrued interest
+Issued by subsidiaries
+Issued by the Bank
+15/12/2031
+Other debt securities
+Issued by subsidiaries
+Issued by the Bank
+Subordinated bonds and tier 2 capital bonds
+35. DEBT SECURITIES ISSUED
+As at 31 December 2021, pledged deposits included in above amounted to RMB228,227 million (31 December 2020:
+RMB249,915 million).
+25,134,726
+26,441,774
+267,941
+361,994
+261,389
+250,349
+Accrued interest
+14/12/2021
+3.48%
+50,000
+100 Yuan
+30,000
+4.15%
+16/11/2020
+16/11/2030
+17/11/2020
+20 ICBC 03 Tier 2 Bond
+12/11/2020
+100 Yuan
+10,000
+4.45%
+16/11/2020
+16/11/2035
+17/11/2020
+21 ICBC 01 Tier 2 Bond
+19/01/2021
+100 Yuan
+30,000
+4.15%
+21/01/2021
+21/01/2031
+22/01/2021
+21 ICBC 02 Tier 2 Bond
+13/12/2021
+100 Yuan
+11,953,629
+12,905,739
+6,463,929
+7,107,386
+4.875%
+21/09/2015
+21/09/2025
+22/09/2015
+15 USD
+Tier 2 capital bonds
+The bonds cannot be redeemed before maturity.
+The Bank has not had any defaults in respect of payments of principal or interest or other breaches with respect to the
+subordinated bonds and tier 2 capital bonds in 2021 (2020: Nil).
+Subsidiaries:
+On 23 March 2018, ICBC Thai issued a tier 2 capital bond with an aggregate nominal amount of THB5,000 million, bearing
+a fixed interest rate of 3.5%. The bond will mature on 23 September 2028.
+On 12 September 2019, ICBC Macau issued a tier 2 capital bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 2.875% per annum. The bond will mature on 12 September 2029.
+The above tier 2 capital bonds are separately listed on the Thai Bond Market Association and The Stock Exchange of Hong
+Kong Limited. ICBC Thai and ICBC Macau have not had any defaults of principal or interest or other breaches with respect to
+the tier 2 capital bonds in 2021 (2020: Nil).
+Annual Report 2021
+215
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Other debt securities issued
+The Bank:
+(i)
+(ii)
+Head Office issued debt securities denominated in RMB at fixed interest rates amounting to RMB20,075 million in total
+with maturities between 2023 and 2024.
+Sydney Branch issued notes denominated in AUD, RMB, HKD and USD at fixed or floating interest rates amounting to
+an equivalent of RMB11,372 million in total with maturities between 2022 and 2026.
+(iii) Singapore Branch issued notes denominated in RMB, USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB48,080 million in total with maturities between 2022 and 2025.
+(iv) Tokyo Branch issued notes denominated in JPY at fixed interest rate amounting to an equivalent of RMB249 million in
+total that will mature in 2022.
+12,700
+12/11/2020
+2,000
+USD
+5,489,700
+5,798,353
+12,651,767
+12,923,692
+5,196,607
+5,390,582
+7,455,160
+7,533,110
+31 December
+2020
+31 December
+2021
+15/12/2021
+The Bank has the option to redeem these bonds on specific dates at par value in future upon the approval of the relevant
+regulatory authorities.
+In 2015, the Bank issued tier 2 capital bonds denominated in USD. The bonds were approved for listing and dealing by The
+Stock Exchange of Hong Kong Limited. The relevant information is set out below:
+Name
+Issued
+amount
+Ending
+balance
+Accrued interest
+Issue date
+(In original
+currency)
+(million)
+(In RMB)
+(million)
+Coupon
+rate
+Value date
+Maturity date
+Circulation date
+21/09/2015
+99.189
+20 ICBC 02 Tier 2 Bond
+25/09/2020
+24/09/2030
+(a) Subordinated bonds and tier 2 capital bonds
+The Bank:
+As approved by the PBOC and the CBIRC, the Bank issued callable subordinated bonds and tier 2 capital bonds through
+open market bidding. These subordinated bonds and tier 2 capital bonds were traded on the National Interbank Bond
+Market. The relevant information is set out below:
+Issued and
+Issue price
+nominal amount
+Coupon
+Maturity
+Name
+Issue date
+(In RMB)
+(In RMB million)
+rate
+Value date
+11 ICBC 01
+29/06/2011
+100 Yuan
+38,000
+5.56%
+30/06/2011
+date Circulation date
+30/06/2031
+30/08/2011
+12 ICBC 01
+11/06/2012
+100 Yuan
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+20,000
+Notes to the Consolidated Financial Statements
+214
+2,431,689
+31 December
+31 December
+2021
+2020
+458,688
+419,032
+4,116
+4,285
+8,002
+6,747
+470,806
+430,064
+(b)
+188,243
+232,356
+130,558
+134,038
+1,768
+1,669
+320,569
+368,063
+791,375
+798,127
+As at 31 December 2021, the amount of debt securities issued that were due within one year was RMB124,031 million (31
+December 2020: RMB120,429 million).
+ICBC
+(v)
+4.99%
+13/06/2027
+4.51%
+25/03/2019 25/03/2034
+26/03/2019
+19 ICBC 03 Tier 2 Bond
+24/04/2019
+100 Yuan
+45,000
+4.40%
+26/04/2019
+26/04/2029
+28/04/2019
+19 ICBC 04 Tier 2 Bond
+24/04/2019
+100 Yuan
+10,000
+4.69%
+26/04/2019
+26/04/2034
+28/04/2019
+20 ICBC 01 Tier 2 Bond
+22/09/2020
+100 Yuan
+60,000
+4.20%
+24/09/2020
+10,000
+13/06/2012
+100 Yuan
+19 ICBC 02 Tier 2 Bond
+13/07/2012
+17 ICBC 01 Tier 2 Bond
+06/11/2017
+100 Yuan
+44,000
+4.45%
+08/11/2017
+08/11/2027
+10/11/2017
+17 ICBC 02 Tier 2 Bond
+20/11/2017
+100 Yuan
+44,000
+4.45%
+22/11/2017
+22/11/2027
+23/11/2017
+19 ICBC 01 Tier 2 Bond
+21/03/2019
+100 Yuan
+45,000
+4.26%
+25/03/2019
+25/03/2029
+26/03/2019
+21/03/2019
+New York Branch issued notes denominated in USD at fixed interest rates amounting to an equivalent of RMB14,572
+million in total with maturities between 2022 and 2027.
+Currency Issued price
+(vii) Dubai (DIFC) Branch issued notes denominated in USD at floating interest rates amounting to an equivalent of
+RMB13,415 million in total with maturities between 2022 and 2024.
+2,900
+19,716
+None
+Mandatory
+No
+Domestic Preference
+Shares:
+(vi) Luxembourg Branch issued notes denominated in USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB18,114 million in total with maturities between 2022 and 2024.
+18/11/2015
+Equity
+4.58% 100RMB/Share
+450
+RMB2019
+19/09/2019
+Equity
+4.20% 100RMB/Share
+700
+680
+45,000
+45,000
+None
+70,000
+70,000 None
+Mandatory No
+Mandatory
+No
+145
+Total
+3.58% 20USD/Share
+23/09/2020
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+38. OTHER EQUITY INSTRUMENTS
+(1) Preference shares
+(a) Preference shares outstanding ("Preference Shares"):
+Amount
+In original
+Financial instrument
+outstanding
+Issue date
+Accounting
+classification
+Dividend
+(million
+currency
+In RMB
+Conversion
+rate
+Issue price
+shares)
+(million)
+(million) Maturity
+condition
+Conversion
+Offshore Preference
+Shares:
+USD
+Equity
+Notes to the Consolidated Financial Statements
+134,716
+(102)
+2020
+2021
+31 December
+31 December
+Accrued interest
+Cash received as collateral on securities lending
+Repurchase agreements-securities
+Repurchase agreements-bills
+32. REPURCHASE AGREEMENTS
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+213
+Annual Report 2021
+2,784,259
+468,616
+489,340
+2,921,029
+4,613
+3,968
+304,413
+258,465
+159,590
+226,907
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+Money market takings:
+8,110
+Less: issue fees
+341,718
+16,015
+100
+365,943
+Book value
+134,614
+(b) Main clauses and basic information
+(i) Dividend
+Offshore and domestic dividends are paid annually.
+Offshore and domestic dividends are set at a fixed rate for 5 years after issuance, and are reset every 5 years thereafter to
+the sum of the benchmark rate and the fixed spread. The fixed spread is equal to the spread between the initial dividend
+rate and the benchmark rate at the time of issuance. The fixed spread remains unchanged throughout the term of the
+Preference Shares.
+(ii) Conditions to distribution of dividends
+The Bank can pay offshore and domestic dividends when it has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratios meet
+regulatory requirements. Preference shareholders of the Bank are senior to the ordinary shareholders in respect of the right
+to dividends. The order of payment of Domestic Preference Shares is equal to Offshore Preference Shares. The Bank may
+elect to cancel all or part of offshore and domestic dividends and this shall not constitute a default for any purpose, but such
+cancellation will require a shareholder's resolution to be passed.
+(iii) Dividend stopper and setting mechanism
+For Offshore and Domestic Preference Shares, if the Bank cancels all or part of the dividends to the Preference Shares, the
+Bank shall not make any dividend distribution to ordinary shareholders before the Bank pays the dividends to the preference
+shareholders in full for the current dividend period.
+Non-cumulative dividend is a dividend on Offshore and Domestic Preference Shares which does not cumulate upon omission
+of payment and the passed or omitted dividend of one year is not carried to the following year. After receiving a dividend at
+the agreed dividend rate, preference shareholders of the Bank will not participate in the distribution of residual profits with
+ordinary shareholders.
+The Bank shall distribute dividends for Offshore and Domestic Preference Shares in cash, based on the liquidation preference
+amount for the issued and outstanding Offshore Preference Shares or total amount of issued and outstanding Domestic
+Preference Shares during the corresponding period (i.e. the product of the issue price of Preference Shares and the number
+of the issued and outstanding Preference Shares).
+Other
+Personal customers
+Corporate customers
+Time deposits:
+Personal customers
+Corporate customers
+Demand deposits:
+34. DUE TO CUSTOMERS
+Certificates of deposit issued by certain of the Bank's overseas branches and subsidiaries are measured at amortised cost.
+33. CERTIFICATES OF DEPOSIT
+293,434
+190
+10,924
+7,874
+274,446
+217
+RMB2015
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+Insurance contract liabilities
+Lease liabilities
+317,591
+394,880
+213,457
+170,846
+(i)
+28,340
+29,825
+Provisions for credit commitments
+24,449
+Settlement and clearing balances
+26,710
+(ii)
+32,751
+24,807
+Sundry tax payables
+16,454
+15,595
+Promissory notes
+1,081
+1,193
+Early retirement benefits
+32
+Salaries, bonuses, allowances and subsidies payables
+2020
+2021
+31 December
+(viii) Hong Kong Branch issued notes denominated in USD at fixed or floating interest rates amounting to an equivalent of
+RMB45,726 million in total with maturities between 2022 and 2026.
+(ix) London Branch issued notes denominated in GBP, USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB13,401 million in total with maturities between 2022 and 2025.
+(x)
+Macau Branch issued notes denominated in MOP at fixed interest rates amounting to an equivalent of RMB3,239
+million in total with maturities between 2022 and 2023.
+Subsidiaries:
+(i)
+(ii)
+(iii)
+ICBC Asia issued medium-term debt securities and notes denominated in RMB and USD at fixed or floating interest
+rates amounting to an equivalent of RMB8,469 million in total with maturities between 2022 and 2024.
+ICBC Leasing issued medium-term debt securities and notes denominated in RMB and USD at fixed or floating interest
+rates amounting to an equivalent of RMB70,528 million in total with maturities between 2022 and 2031.
+ICBC Thai issued medium-term debt securities and notes denominated in THB at fixed interest rates amounting to an
+equivalent of RMB8,367 million in total with maturities between 2022 and 2026.
+(iv)
+ICBC International issued medium-term debt securities and notes denominated in USD at fixed interest rates
+amounting to an equivalent of RMB12,709 million in total with maturities between 2022 and 2025.
+(v)
+ICBC New Zealand issued medium-term debt securities and notes denominated in NZD at fixed or floating interest
+rates amounting to an equivalent of RMB2,331 million in total with maturities between 2022 and 2024.
+(vi)
+ICBC Investment issued medium-term debt securities and notes denominated in RMB at fixed interest rates amounting
+to RMB28,000 million in total with maturities between 2022 and 2025.
+Annual Report 2021
+216
+ICBC
+36. OTHER LIABILITIES
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December
+490
+Other
+(vii) ICBC Peru issued short-term debt securities denominated in PEN at fixed interest rates amounting to an equivalent of
+RMB154 million in total that will mature in 2022.
+789,355
+37. SHARE CAPITAL
+Issued and fully paid:
+H shares of RMB1 Yuan each
+A shares of RMB1 Yuan each
+31 December 2020
+Number
+Nominal
+of shares
+value
+(millions)
+Nominal
+value
+31 December 2021
+Number
+(441)
+(millions)
+86,795
+86,795
+86,795
+269,612
+269,612
+269,612
+269,612
+356,407
+356,407
+356,407
+155,200
+356,407
+(ii) There were no overdue payment for staff salaries, bonuses, allowances and subsidies payable as at 31 December 2021 (31
+December 2020: Nil).
+Ending balance of lease liabilities
+86,795
+28,340
+(i)
+29,825
+Lease liabilities
+Less than one year
+One to two years
+Two to three years
+More than five years
+Undiscounted lease liabilities
+31 December
+31 December
+2021
+2020
+Three to five years
+8,090
+29,929
+32,492
+8,315
+6,221
+5,113
+5,210
+6,008
+5,658
+48,424
+712,770
+4,542
+6,515
+6,749
+145
+145
+19,716
+2,900
+2,900
+45
+USD
+600
+(600)
+(40)
+4,558
+40
+EUR
+19,716
+Shares:
+(4,558)
+Domestic Preference
+139,274
+RMB2015
+70,000
+Offshore Preference
+70,000
+700
+45,000
+45,000
+450
+Shares:
+Total
+70,000
+700
+RMB2019
+20
+45,000
+45,000
+450
+70,000
+(million)
+219
+(million) (million shares)
+(c) Changes in preference shares outstanding
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+Annual Report 2021
+Under the premise of obtaining the approval of the CBIRC and compliance with relevant requirements, the Bank has the
+right to redeem all or part of Domestic Preference Shares, after five years having elapsed since the date of issuance/the date
+of closing. The redemption period of Domestic Preference Shares is from the start date of redemption to the date of full
+redemption or conversion. Redemption price of Domestic Preference Shares is equal to book value plus any declared but
+unpaid dividend in current period.
+Subject to obtaining the approval of the CBIRC and satisfying the conditions of redemption, the Bank has the right to
+redeem all or part of the Offshore Preference Shares at the first call date and subsequent any dividend payment date.
+Redemption price of Offshore Preference Shares is equal to liquidation preference price plus any declared but unpaid
+dividend in current period. The first redemption date of Offshore Preference Shares is five years after issuance.
+1 January 2021
+(vi) Redemption
+For Offshore Preference Shares, upon the occurrence of any Non-Viability Trigger Event, the Bank shall have the right
+to irrevocably and compulsorily convert all or part of the outstanding Offshore Preference Shares into H shares, under
+the consent of the CBIRC but without the need for the consent of the offshore preference shareholders or the ordinary
+shareholders. If the Offshore Preference Shares were converted into H shares, they cannot be converted to Preference Shares
+again under any circumstances.
+For Domestic Preference Shares, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital
+Adequacy Ratio of the Bank falling to 5.125% or below), the Bank shall have the right without the need for the consent of
+the domestic preference shareholders to convert all or part of the outstanding face value of Domestic Preference Shares into
+A shares, in order to restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%. If Domestic Preference
+Shares were converted into A shares, they cannot be converted to Preference Shares again under any circumstances. Upon
+the occurrence of a Tier 2 Capital Trigger Event, the Bank shall have the right without the need for the consent of the
+domestic preference shareholders to convert all the outstanding face value of Domestic Preference Shares into A shares. If
+Domestic Preference Shares were converted into A share, they cannot be converted to Preference Shares again under any
+circumstances.
+(v) Mandatory conversion trigger events
+The offshore preference shareholders and domestic preference shareholders will rank equally for payment. The preference
+shareholders will be subordinated to the depositors, general creditors and holders of convertible bonds, holders of
+subordinated debts, holders of tier 2 capital bonds and holders of other tier 2 capital instruments of the Bank, but will be
+senior to the ordinary shareholders of the Bank.
+(iv) Order of distribution and liquidation method
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(4,558)
+The initial mandatory conversion prices are HKD5.73 for Offshore Preference Shares per H share; RMB3.44 for Domestic
+2015 Preference Shares and RMB5.43 for Domestic 2019 Preference Shares. In case of stock dividends distribution of H or A
+shares of the Bank or other circumstances, the Bank will make cumulative adjustment to the compulsory conversion price in
+turn.
+Movement during the year
+Financial
+instrument
+(million)
+(million shares)
+(million)
+In RMB
+currency
+Amount
+In RMB
+currency
+Amount
+In RMB
+In original
+31 December 2021
+In original
+In original
+currency
+(million)
+(million shares)
+outstanding
+Amount
+(million)
+134,716
+4.45%
+(2) Perpetual bond
+Financial
+investments
+measured at
+Financial
+investments
+measured at
+FVTPL
+FVTOCI
+Financial
+investments
+measured at
+amortised cost
+Investment funds
+36,702
+Asset management plans and asset-backed securities
+Trust plans
+18,661
+2,740
+56,596
+1,435
+19,468
+56,798
+2,740
+76,064
+Financial
+investments
+measured at
+FVTPL
+31 December 2020
+Financial
+investments
+measured at
+FVTOCI
+Financial
+investments
+measured at
+amortised cost
+Investment funds
+Wealth management products
+32,100
+311
+31 December 2021
+Asset management plans and asset-backed securities
+Trust plans
+The following tables set out an analysis of the line items in the consolidated statement of financial position in which assets
+were recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+334,592
+amount
+Investment funds
+36,702
+36,702
+32,100
+Wealth management products
+311
+Maximum
+exposure
+32,100
+311
+Asset management plans and
+asset-backed securities
+77,997
+77,997
+257,977
+257,977
+Trust plans
+20,903
+20,903
+44,204
+44,204
+135,602
+135,602
+334,592
+The maximum loss exposures in the above investment funds, wealth management products, asset management plans and
+asset-backed securities, trust plans are the carrying amounts which are measured at amortised cost or the fair value of the
+investments held by the Group at the reporting date.
+exposure
+204,344
+45,658
+transferred
+associated
+assets
+liabilities
+transferred
+assets
+associated
+liabilities
+Repurchase agreements
+33,039
+32,012
+42,124
+40,760
+Securities lending agreements
+361,344
+255,660
+394,383
+32,012
+297,784
+40,760
+Securitisation transactions
+The Group transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may
+acquire some asset-backed securities at the subordinated tranche level and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether or not to derecognise the associated credit
+assets by evaluating the extent to which it retains the risks and rewards of the assets.
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the consolidated statement
+of financial position to the extent of the Group's continuing involvement and the rest is derecognised. The extent of the
+Group's continuing involvement is the extent of the risks and rewards undertaken by the Group with value changes of the
+transferred financial assets. As at 31 December 2021, loans with an original carrying amount of RMB619,736 million at the
+time of derecognition (31 December 2020: RMB521,314 million) have been securitised by the Group under arrangements in
+which the Group retained a continuing involvement in such assets. The carrying amount of assets that the Group continues
+to recognise on the consolidated statement of financial position was RMB74,121 million as at 31 December 2021 (31
+December 2020: RMB63,808 million).
+As at 31 December 2021, the carrying amount of asset-backed securities held by the Group in securitisation transactions
+that were qualified for derecognition was RMB973 million (31 December 2020: RMB1,029 million), and its maximum
+exposure approximated to the carrying amount.
+44. ASSETS PLEDGED AS SECURITY
+Carrying
+amount of
+7,975
+31 December 2020
+Carrying
+amount of
+31 December 2021
+Carrying
+amount of
+22,807
+21,397
+259,562
+7,975
+67,055
+226
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Structured entities sponsored by the Group in which the Group does not consolidate
+but holds an interest
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees from
+managing assets on behalf of investors. These structured entities are financed through the issuance of investment products
+to investors. Interest held by the Group includes investments in the products issued by these unconsolidated structured
+entities and fees charged for providing management services. As at 31 December 2021 and 31 December 2020, the carrying
+amounts of the investments in the products issued by these structured entities and fee receivables being recognised were
+not material in the consolidated financial statements. Management income earned by the Group was included in fee and
+commission income of personal wealth management and private banking services and corporate wealth management
+services set out in Note 7.
+As at 31 December 2021, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,586,393 million (31 December 2020:
+RMB2,708,427 million) and RMB1,810,281 million (31 December 2020: RMB1,462,393 million) respectively.
+In 2021, the amount of the average exposure of financing transactions through placements and reverse repurchase
+agreements from the Group with non-principal-guaranteed wealth management products sponsored by the Group was
+RMB26,699 million (2020: RMB72,587 million). The transactions were conducted in the ordinary course of business under
+normal terms and conditions and at market rates.
+(c) Consolidated structured entities
+The consolidated structured entities of the Group are primarily the principal-guaranteed wealth management products,
+certain investment funds, asset-backed securities and asset management plans issued or initiated and invested by the Group
+or purchased due to regulatory requirements related to wealth management business. The Group controls these entities
+because the Group has power over, is exposed to, or has rights to variable returns from its involvement with these entities
+and has the ability to use its power over these entities to affect the amount of the Group's returns.
+43. TRANSFERRED FINANCIAL ASSETS
+The Group enters into transactions in the ordinary course of business by which it transfers recognised financial assets to
+third parties or structured entities. In some cases these transfers may give rise to full or partial derecognition of the financial
+assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has retained
+substantially all the risks and rewards of these assets, the Group continues to recognise the transferred assets.
+Repurchase transactions and securities lending transactions
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities in the absence of default by the Group, but has an
+obligation to return the securities at the maturity of the contract. If the securities increase or decrease in value, the Group
+may in certain circumstances require additional cash collateral from counterparties or return part of the cash collateral
+to counterparties. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+Annual Report 2021
+227
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The following table analyses the carrying amount of the aforementioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+Carrying
+amount of
+Financial assets of the Group including securities and bills have been pledged as collateral for liabilities or contingent
+liabilities, mainly for repurchase agreements and derivative contracts. As at 31 December 2021, the carrying amount of the
+financial assets of the Group pledged as collateral amounted to approximately RMB319,877 million (31 December 2020:
+approximately RMB249,499 million).
+amount
+Maximum
+(12,117)
+1,951
+(7,915)
+31 December 2021
+24,628
+(39,999)
+(2,972)
+(18,343)
+224
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Other comprehensive income in the consolidated statement of profit or loss and other
+comprehensive income
+Items that will not be reclassified to profit or loss:
+2021
+2020
+(i)
+Changes in fair value of equity instruments designated as at FVTOCI
+(ii) Other comprehensive income recognised under the equity method
+(iii) Other
+(1,180)
+1,289
+15
+(5)
+28
+8
+Items that may be reclassified subsequently to profit or loss:
+2,251
+(i)
+Movement during 2021
+(4,923)
+(h) Distributable profits
+The Bank's distributable profit is based on its retained earnings as determined under PRC GAAP and IFRSS, whichever is
+lower. The amount that the Bank's subsidiaries can legally distribute is determined by referring to their profits as reflected
+in their financial statements prepared in accordance with the accounting regulations and principles promulgated by the
+local regulatory bodies. These profits may differ from those dealt with in these financial statements, which are prepared in
+accordance with IFRSS.
+40. OTHER COMPREHENSIVE INCOME
+(a) Other comprehensive income attributable to equity holders of the parent company in
+the consolidated statement of financial position
+Foreign
+currency
+Investment
+translation
+revaluation
+differences
+Other
+Total
+1 January 2020
+23,280
+(18,568)
+(5,978)
+(1,266)
+Movement during 2020
+(903)
+(9,314)
+1,055
+(9,162)
+31 December 2020 and 1 January 2021
+22,377
+(27,882)
+(10,428)
+31 December 2020
+Carrying
+Changes in fair value of debt instruments measured at FVTOCI
+Less: Amount transferred to profit or loss from other comprehensive
+income and income tax effect
+(5,036)
+Balances with central banks other than restricted deposits
+Deposits with banks and other financial institutions with
+338,551
+619,968
+original maturity of three months or less
+228,082
+241,109
+Placements with banks and other financial institutions with
+original maturity of three months or less
+157,323
+239,428
+Reverse repurchase agreements with original maturity of three months or less
+649,929
+625,784
+1,436,757
+1,791,122
+Annual Report 2021
+225
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+42. INTERESTS IN STRUCTURED ENTITIES
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in
+the products issued by these structured entities. Such structured entities include investment funds, wealth management
+products, asset management plans and asset-backed securities, trust plans and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issuance of investment products to investors.
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+31 December 2021
+Carrying
+64,833
+5,777
+62,872
+2020
+(4,154)
+1,994
+1,623
+(3,042)
+(ii) Credit losses of debt instruments measured at FVTOCI
+1,827
+1,051
+(iii) Reserve from cash flow hedging instruments Gain/(loss) during the year
+Less: Income tax effect
+374
+(146)
+68
+(107)
+442
+(253)
+(v)
+(iv) Other comprehensive income recognised under the equity method
+Foreign currency translation differences
+(vi) Other
+541
+14
+(12,353)
+885
+(8,172)
+(16,212)
+1,311
+(15,839)
+41. CASH AND CASH EQUIVALENTS
+31 December
+31 December
+2021
+Cash on hand
+The Bank redeemed all of the EUR Offshore Preference Shares on 10 December 2021.
+45. SHARE APPRECIATION RIGHTS PLAN
+228
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+220
+The Bank issued USD6.16 billion of undated capital bonds (hereinafter referred to as "Offshore Perpetual Bond") on The
+Stock Exchange of Hong Kong Limited on 24 September 2021. The funds raised by the Bank from the bonds will be used
+to supplement additional tier 1 capital of the Bank in accordance with the relevant laws and approvals by regulatory
+authorities.
+With the approvals of relevant regulatory authorities, the Bank issued RMB80 billion, RMB70 billion and RMB30 billion of
+undated capital bonds on 26 July 2019, 4 June 2021 and 24 November 2021 (hereinafter referred to as "2019 Domestic
+Perpetual Bond", "2021 Domestic Perpetual Bond Series 1" and "2021 Domestic Perpetual Bond Series 2" respectively,
+collectively "Domestic Perpetual Bonds") in the National Interbank Bond Market.
+(b) Main clauses and basic information
+Offshore USD Perpetual Bonds were issued in specific denomination of USD200,000 and integral multiplies of
+USD1,000 in excess thereof at an issue price of 100%.
+Book value
+(i)
+219,717
+(76)
+Less: issue fees
+219,793
+Total
+No
+DO
+None
+None
+30,000
+30,000
+00
+300
+3.65% 100RMB/Unit
+Equity
+(i) Interest
+24/11/2021
+Each Domestic Perpetual Bond has a par value of RMB100, and the interest rate of the bonds for the first five years are
+4.45% for 2019 Domestic Perpetual Bond, 4.04% for 2021 Domestic Perpetual Bond Series 1, and 3.65% for 2021
+Domestic Perpetual Bond Series 2, resetting every 5 years. The rates are determined by a benchmark rate plus a fixed spread.
+The initial fixed spreads are the difference between the interest rate and the benchmark rate as determined at the time
+of issuance. The fixed spread will not be adjusted once determined during the duration period. The interest of Domestic
+Perpetual Bond shall be paid annually.
+(ii) Interest stopper and setting mechanism
+Amount
+In RMB
+currency
+Amount
+31 December 2021
+In original
+Movement during the year
+In original
+In original
+1 January 2021
+instrument
+Financial
+(c) Changes in perpetual bond outstanding
+The duration of the Domestic Perpetual Bonds and Offshore Perpetual Bond is the same as the continuing operation of the
+Bank. Five years after the issuance date of the Domestic Perpetual Bonds and Offshore Perpetual Bond, the Bank shall have
+the right to redeem them in whole or in part on each distribution payment date (including the fifth distribution payment
+date since the issuance). In the event that the perpetual bond is not classified as additional tier 1 capital due to unpredicted
+changes in regulations, the Bank shall have the right to redeem Domestic Perpetual Bonds and Offshore Perpetual Bond fully
+instead of partly.
+(v) Redemption
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+221
+Annual Report 2021
+For Offshore Perpetual Bond, upon the occurrence of a Non-Viability Trigger Event, the Bank has the right to write down all
+the perpetual bonds issued and outstanding at that time up to the total nominal value without the need for the consent of
+the bond holders.
+For 2021 Domestic Perpetual Bond Series 1 and 2021 Domestic Perpetual Bond Series 2, upon the occurrence of a Non-
+Viability Trigger Event, the Bank has the right to write down all or part of the nominal amount of the outstanding perpetual
+bonds without the need for the consent of the bond holders.
+For 2019 Domestic Perpetual Bond, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital
+Adequacy Ratio of the Bank falling to 5.125% or below), the Bank has the right to write down all or part of the total
+nominal amount of the outstanding 2019 Domestic Perpetual Bond with the consent of the CBIRC but without the need for
+the consent of the bond holders, in order to restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%.
+Upon the occurrence of a Tier 2 Capital Trigger Event, without the need for consent of the bond holders, the Bank has the
+right to write down all of the total nominal amount of the outstanding 2019 Domestic Perpetual Bond.
+(iv) Write down conditions
+The claims in respect of Domestic Perpetual Bonds will be subordinated to claims of depositors, general creditors, and
+subordinated indebtedness that rank senior to Domestic Perpetual Bonds, and will rank in priority to all classes of shares held
+by shareholders of the Bank. The claims in respect of Offshore Perpetual Bonds will be subordinated to claims of depositors,
+general creditors, tier 2 capital bond holders and subordinated indebtedness that rank senior to the Offshore Perpetual
+Bond, and will rank in priority to all classes of shares held by shareholders of the Bank. Domestic Perpetual Bond and
+Offshore Perpetual Bond will rank pari passu with the claims in respect of any other Additional Tier 1 Capital instruments of
+the Bank that rank pari passu with the perpetual bonds.
+(iii) Order of distribution and liquidation method
+The interest payment for both the Domestic Perpetual Bonds and Offshore Perpetual Bond is non-cumulative. The Bank
+shall have the right to cancel, in whole or in part, distributions on the interest payment and any such cancellation shall not
+constitute an event of default. The Bank may, at its sole discretion, use the proceeds from the cancelled distributions to meet
+other obligations as they fall due. However, the Bank shall not distribute profits to ordinary shareholders until resumption of
+full interest payment.
+The interest rate of Offshore Perpetual Bond for the first five years is 3.20%, resetting every 5 years. The rate is determined
+by a benchmark rate plus a fixed spread. The dividend shall be paid semi-annually.
+currency
+Perpetual bond Series 2
+No
+N/A
+Note (i)
+3.20%
+Equity
+24/09/2021
+USD Perpetual bond
+Offshore
+Conversion
+Conversion
+In RMB
+(million) Maturity condition
+(million)
+units)
+Issue price
+Interest rate
+classification
+Issue date
+outstanding
+currency
+(million
+Accounting
+instrument
+In original
+Amount
+Financial
+(a) Perpetual bond outstanding
+6,160
+RMB2021
+39,793
+None
+None
+None
+70,000
+70,000
+00
+700
+100RMB/Unit
+4.04%
+Equity
+04/06/2021
+Perpetual bond Series 1
+RMB2021
+No
+None
+None
+80,000
+80,000
+800
+100RMB/Unit
+Equity
+26/07/2019
+Perpetual bond
+RMB2019
+Domestic
+No
+None
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+In RMB
+currency
+39. RESERVES
+ICBC
+222
+(2) Equity attributable to other equity instrument holders of non-controlling interests
+16,013
+17,503
+(1) Equity attributable to ordinary shareholders of non-controlling interests
+16,013
+17,503
+225,819
+354,331
+2,667,683
+2,903,424
+(1) Equity attributable to ordinary shareholders of the parent company
+(2) Equity attributable to other equity instrument holders of the parent company
+Total equity attributable to non-controlling interests
+2.
+2,893,502
+3,257,755
+Total equity attributable to equity holders of the parent company
+1.
+2020
+2021
+Items
+31 December
+31 December
+(3) Interests attributable to equity instruments' holders
+Notes to the Consolidated Financial Statements
+The Group exercised its call option to redeem all of the outstanding USD2016 Perpetual Bond on 21 July 2021.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+ICBC
+Other reserves represent reserves other than the items listed above, including other comprehensive income recognised under
+the equity method.
+(g) Other reserves
+The cash flow hedge reserve comprises the effective portion of the gains or losses on the hedging instruments.
+(f) Cash flow hedge reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Chinese mainland.
+(e) Foreign currency translation reserve
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+223
+Annual Report 2021
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVTOCI.
+(d) Investment revaluation reserve
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2022, the total appropriation to general
+reserve of the Bank was RMB97,505 million (2020: RMB33,247 million), The general reserve balance of the Bank as at 31
+December 2021 amounted to RMB426,714 million, which reached 1.5% of the year-end balance of the Bank's risk assets.
+In accordance with the "Administrative Measures for the Provision of Reserves of Financial Enterprises" (Cai Jin [2012] No.
+20) issued by the MOF, the Bank maintains a general reserve within equity, through the appropriation of profit, which should
+not be less than 1.5% of the period-end balance of its risk assets, to partially cover unidentified possible losses.
+(c) General reserve
+The Bank's overseas entities appropriate their profits to other surplus reserves or statutory reserve in accordance with the
+relevant laws and regulations promulgated by the local regulatory bodies.
+(iii) Other surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under the PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meeting.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(ii) Discretionary surplus reserve
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2022, the total appropriation to surplus
+reserve of the Bank was RMB32,494 million (2020: RMB30,550 million), among which an appropriation of 10% of the profit
+of the Bank for the year determined under the PRC GAAP to the statutory surplus reserve, in the amount of RMB32,438
+million (2020: RMB30,449 million) was approved and a total surplus reserve made by overseas branches was RMB56 million
+(2020: RMB101 million) pursuant to the requirements of local authorities.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+The Bank is required to appropriate 10% of its profit for the year, as determined under the Accounting Standards for
+Business Enterprises and other relevant requirements ("PRC GAAP"), pursuant to the Company Law of the PRC and the
+Articles of the Bank to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+(i) Statutory surplus reserve
+(b) Surplus reserves
+(a) Capital reserve
+Amount
+(i)
+133,102
+USD2016 Perpetual bond(i)
+Offshore
+outstanding
+39,793
+6,160
+NA
+N/A
+39,793
+6,160
+N/A
+(6,691)
+(1,000)
+(1)
+6,691
+1,000
+1
+In RMB
+(million)
+(million)
+(million units)
+(million)
+(million)
+(million units)
+(million)
+(million)
+(million units)
+USD2021 Perpetual bond
+219,793
+Domestic
+800
+86,691
+30,000
+30,000
+300
+30,000
+30,000
+300
+70,000
+70,000
+n0
+700
+70,000
+70,000
+700
+000
+80,000
+80,000
+800
+Total
+Series 2
+RMB2021 Perpetual bond
+Series 1
+RMB2021 Perpetual bond
+80,000
+80,000
+RMB2019 Perpetual bond
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration received is recorded as a financial liability. As at 31 December 2021, transferred
+credit assets that were not qualified for derecognition of the Group amounted to RMB132 million at the time of transfer (31
+December 2020: Nil).
+Other
+31 December
+238
+2,730,369
+98,067
+31,896,125
+31,798,058
+198,061
+4,425,332
+13,213,984
+13,960,681
+35,171,383
+79,259
+80,661
+9,944
+6,304
+20,945
+290,296
+19,546
+37,432
+120,366
+112,952
+43,468
+61,782
+61,782
+35,092,124
+169,482
+14,086,517
+8,399,240
+ICBC
+12,436,885
+728
+982
+2020
+1,284
+775
+31 December
+2021
+31 December
+2020
+33,753
+30,425
+437,377
+375,028
+45,269
+45,958
+7,897
+4,945
+151,307
+183,059
+8,519
+5,004
+60,280
+53,161
+2021
+2020
+Transactions during the year:
+Interest income on financial investments
+1,386
+Interest income on amounts due from banks and other financial institutions
+2021
+31 December 2021
+215
+Profit for the year
+(74,683)
+Income tax expense
+424,899
+3,346
+85,326
+195,658
+140,569
+Profit before taxation
+2,869
+2,869
+Share of results of associates and joint ventures
+422,030
+477
+85,326
+195,658
+140,569
+Operating profit
+(202,623)
+(1,234)
+(9,067)
+(29,341)
+(162,981)
+Impairment losses on assets
+(236,227)
+350,216
+43,331
+Other segment information:
+Capital expenditure
+5,870
+19,027
+18,219
+24,848
+125
+3,370
+10,901
+10,452
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+(ii)
+Includes net trading income, net gains on financial investments and other net operating income.
+(i)
+1,055,600
+1,674,769
+Credit commitments
+Other segment information:
+Total liabilities
+Unallocated liabilities
+Segment liabilities
+Total assets
+Unallocated assets
+Other non-current assets (ii)
+Property and equipment
+Including: Investments in associates and joint ventures
+Segment assets
+Depreciation and amortisation
+(3,346)
+30,000
+31 December
+2020
+31 December
+31 December
+2021
+2020
+64,841
+72,472
+4,005
+60,331
+15,957
+2021
+2020
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+2,306
+2,360
+74
+561
+799
+149
+Huijin holds equity interests in certain other banks and financial institutions under the direction of the State Government.
+The Group enters into transactions with these banks and financial institutions in the ordinary course of business under
+normal commercial terms and the transactions are priced based on market rates. Management considers that these banks
+and financial institutions are competitors of the Group. Details of major transactions during the year conducted with these
+banks and financial institutions are as follows:
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Due to customers
+Derivative financial assets
+Loans and advances to customers
+Balances at end of the year:
+In addition to the transactions detailed elsewhere in these consolidated financial statements, the Group had the following
+transactions with related parties during the year:
+(a) The MOF
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2021, the MOF directly owned approximately 31.14% (31 December
+2020: approximately 31.14%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its ordinary course of business. Details of the major transactions are as follows:
+Balances at end of the year:
+The PRC government bonds and the special government bond
+Transactions during the year:
+Interest income on the government bonds
+31 December
+2021
+31 December
+2020
+1,563,353
+1,495,673
+2021
+2020
+42,953
+43,609
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 47(i) "transactions with state-owned entities in the PRC".
+(b) Huijin
+Central Huijin Investment Ltd. ("Huijin") is a wholly-owned subsidiary of China Investment Corporation, and in accordance
+with the authorisation of the State Government, Huijin makes equity investments in major state-owned financial enterprises,
+and shall, to the extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf
+of the Government in accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-
+owned financial assets. Huijin does not conduct any other businesses or commercial activities nor intervene in the day-to-
+day business operations of the financial enterprises in which it invests. Huijin was established on 16 December 2003 with a
+total registered and paid-in capital of RMB828,209 million. As at 31 December 2021, Huijin directly owned approximately
+34.71% (31 December 2020: approximately 34.71%) of the issued share capital of the Bank.
+As at 31 December 2021, bonds issued by Huijin ("the Huijin Bonds") held by the Group are of an aggregate face value
+of RMB63.66 billion (31 December 2020: RMB71.39 billion), with terms ranging from one to thirty years and coupon rates
+ranging from 2.15% to 4.38% per annum. The Huijin Bonds are government-backed bonds, short-term bills and medium-
+term notes. The Group's subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance
+with relevant regulatory and the corporate governance requirements of the Group.
+Annual Report 2021
+231
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and the transactions are priced based on market rates. Details of the major transactions are as follows:
+Debt securities purchased
+38,000
+Due to banks and other financial institutions
+Due to customers
+110
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+1,026
+1,068
+10
+54
+232
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(c) National Council for Social Security Fund of the People's Republic of China
+National Council for Social Security Fund (the 'SSF') is a public institution managed by the MOF. It is the management and
+operating organisation of the national social security fund. As at 31 December 2021, the SSF held 5.69% (31 December
+2020: 5.69%) of the Bank's issued share capital. The Group entered into banking transactions with the SSF in the ordinary
+course of business under normal commercial terms and the transactions are priced based on market rates. Details of the
+major transactions are as follows:
+Balances at end of the year:
+Due to customers
+Transactions during the year:
+Interest expense on amounts due to customers
+(d) Subsidiaries
+Balances at end of the year:
+Financial investments
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Credit commitments
+31 December
+2021
+52
+Derivative financial liabilities
+Interest income on loans and advances to customers
+665
+Credit commitments
+31 December
+2021
+31 December
+2020
+536,655
+633,728
+198,607
+251,578
+3,794
+10,610
+7,375
+20,669
+289,661
+299,691
+6,318
+917
+8,750
+20,007
+1,065
+12,690
+2021
+2020
+Transactions during the year:
+Interest income on debt securities purchased
+17,805
+18,634
+Interest income on amounts due from banks and other financial institutions
+582
+47. RELATED PARTY DISCLOSURES
+(16,885)
+(94,823)
+ICBC
+234
+Transactions between the Group and joint ventures and their affiliates were conducted in the ordinary course of business
+under normal terms and conditions and priced based on market rates.
+0
+0
+2
+0
+2020
+2021
+7
+18
+65
+2020
+2021
+31 December
+31 December
+Interest expense on amounts due to customers
+Interest income on loans and advances to customers
+Transactions during the year:
+Due to customers
+Loans and advances to customers
+Balances at end of the year:
+(f) Joint ventures and affiliates
+Transactions between the Group and the associates and their affiliates were conducted under normal commercial terms and
+conditions and priced based on market rates.
+0
+Notes to the Consolidated Financial Statements
+0
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control the
+activities of the Group, directly or indirectly, including members of the board of directors and the board of supervisors, and
+executive officers.
+The transactions with state-owned entities are activities conducted in the ordinary course of business under normal terms
+and conditions and priced based on market rates, and that the dealings of the Group have not been significantly or unduly
+affected by the fact that the Group and those state-owned entities are ultimately controlled or owned by the Government.
+The Group has also established pricing policies for products and services and such pricing policies do not depend on whether
+or not the customers are state-owned entities.
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but are not
+limited to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of
+intermediary services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and
+the sale, purchase, and leasing of properties and other assets.
+(i) Transactions with state-owned entities in the PRC
+Apart from the obligations for defined contributions to the Annuity Fund established by the Bank, Annuity Fund held A
+shares of the Bank with market value of RMB3.16 million (31 December 2020: RMB39.17 million), and bonds issued by the
+Bank of RMB324.13 million as at 31 December 2021 (31 December 2020: RMB10.00 million).
+(h) Annuity Fund
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+235
+Annual Report 2021
+The transactions between the Group and the aforementioned parties were conducted in the ordinary course of business
+under normal terms and conditions and priced based on market rates.
+The aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB12.23 million as at 31 December 2021 (31 December 2020:
+RMB15.29 million).
+In 2021, there were no material transactions and balances with key management personnel individually or in the aggregate
+(2020: Immaterial). The Group entered into banking transactions with key management personnel in the ordinary course of
+business.
+Related parties of the Group include key management personnel of the Group and their close relatives, as well as companies
+controlled, jointly controlled or significantly influenced by key management personnel or their close relatives.
+The total compensation packages for senior management have not been finalised in accordance with the regulations of the
+PRC relevant authorities. The total remuneration not yet accrued is not expected to have a significant impact on the Group's
+2021 financial statements. The total compensation packages will be further disclosed when determined by the relevant
+authorities.
+The above remuneration before tax payable to key management personnel for 2020 represents the total amount of their
+annual remunerations, which includes the amount disclosed in the 2020 annual report.
+9,370
+7,142
+In RMB'000
+9,154
+216
+6,787
+355
+In RMB'000
+2020
+2021
+Salaries and other short-term employment benefits
+Post-employment benefits
+The aggregate compensation of key management personnel for the year, other than those disclosed in note 12 above, is as
+follows:
+(g) Key management personnel
+(j) Proportion of major related party transactions
+186
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+2021
+31 December
+31 December
+Credit commitments
+Derivative financial liabilities
+Due to customers
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Debt securities purchased
+Balances at end of the year:
+(e) Associates and affiliates
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+233
+Annual Report 2021
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+6,233
+5,636
+993
+599
+Interest expense on amounts due to banks and other financial institutions
+Fee and commission income
+681
+2020
+95
+13,162
+13,843
+62
+33
+Interest income on loans and advances to customers
+80
+181
+Interest income on amounts due from banks and other financial institutions
+479
+387
+Interest income on debt securities purchased
+Transactions during the year:
+2020
+2021
+3,023
+6,145
+3,283
+2,436
+3
+638
+6,051
+9,858
+3,244
+1,797
+983
+3,672
+8,549
+12,680
+(121,173)
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements. When
+calculating the proportion of related party transactions, transactions with the subsidiaries are excluded.
+31 December 2020
+Balance
+Treasury
+operations
+banking
+banking
+Personal
+Corporate
+2021
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+237
+Annual Report 2021
+Transactions between segments mainly represent the provision of funding to and from individual segments. The internal
+transfer pricing of these transactions are determined with reference to the market rates and have been reflected in the
+performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as "internal
+net interest income or expense". Net interest income and expense relating to third parties are referred to as "external net
+interest income or expense".
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+Other
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers.
+Treasury operations
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services.
+Personal banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services.
+Corporate banking
+The Group is organised into different operating segments, namely corporate banking, personal banking and treasury
+operations, based on internal organisation structure, management requirements and internal reporting system.
+(a) Operating segments
+48. SEGMENT INFORMATION
+523
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Total
+292,402
+Operating expenses
+860,880
+5,057
+111,278
+346,172
+398,373
+Operating income
+37,176
+5,057
+24,292
+(2,800)
+10,627
+Other income/(expense), net (i)
+133,024
+1,182
+53,760
+78,082
+(165,563)
+148,301
+17,262
+Net fee and commission income
+Internal net interest income/(expense)
+690,680
+251,367
+146,911
+External net interest income
+31 December 2021
+Balance Percentage
+Notes to the Consolidated Financial Statements
+6.08%
+305,742
+10.25%
+299,519
+Due to banks and other financial institutions
+17.82%
+23,913
+12.05%
+9,172
+Derivative financial assets
+0.09%
+15,663
+0.04%
+7,466
+Loans and advances to customers
+24.04%
+260,127
+25.68%
+212,450
+Due from banks and other financial institutions
+25.78%
+2,214,553
+23.53%
+2,178,011
+Financial investments
+Percentage
+10.98%
+0.50%
+Derivative financial liabilities
+12.27%
+66,479
+2,232
+Percentage
+Amount
+2020
+ICBC
+236
+0.68%
+5.55%
+64,456
+3,214
+Amount Percentage
+Interest expense
+Interest income
+2021
+0.58%
+15,713
+0.55%
+14,895
+Credit commitments
+0.19%
+47,032
+0.38%
+99,904
+Due to customers
+16.52%
+23,290
+8,754
+653
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in Note 7. Those assets held in a fiduciary capacity are not included in the Group's
+consolidated statement of financial position.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+449,141
+2020
+343,233
+50,114
+54,361
+444,418
+446,460
+54,466
+51,517
+114,733
+2021
+129,015
+91,410
+497,892
+574,420
+1,069,406
+1,021,038
+2,730,369
+2,711,454
+31 December
+31 December
+50,199
+31 December
+Credit risk-weighted assets of credit commitments
+With an original maturity of under one year
+With an original maturity of one year or over
+Undrawn credit card limits
+(g) Fiduciary activities
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+46. COMMITMENTS AND CONTINGENT LIABILITIES
+(a) Capital commitments
+At the end of the reporting period, the Group had capital commitments as follows:
+Contracted but not provided for
+31 December
+2021
+31,307
+31 December
+2020
+42,797
+(b) Credit commitments
+The Group has outstanding commitments to extend credit including approved loans and undrawn credit card limits.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limits are under the assumption that the amounts will be fully advanced. The
+amounts for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be
+recognised at the end of the reporting period had the counterparties failed to perform as contracted.
+Bank acceptances
+Guarantees issued
+- Financing letters of guarantees
+- Non-financing letters of guarantees
+Sight letters of credit
+Usance letters of credit and other commitments
+Loan commitments
+2021
+1,082,099
+2020
+Interest income on loans and advances to customers
+Annual Report 2021
+135,796
+158,054
+The Group is involved in lawsuits and arbitrations during its normal course of operations. As at 31 December 2021, there
+were a number of legal proceedings and arbitrations outstanding against the Bank and/or its subsidiaries with a total claimed
+amount of RMB6, 165 million (31 December 2020: RMB4,928 million).
+In the opinion of management, the Group has made adequate allowance for any probable losses based on the current facts
+and circumstances, and the ultimate outcome of these lawsuits and arbitrations will not have a significant impact on the
+financial position or operations of the Group.
+(e) Redemption commitments of government bonds and securities underwriting
+commitments
+As an underwriting agent of the MOF, the Bank underwrites certain PRC government bonds and sells the bonds to the
+general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to maturity. The
+redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to the redemption
+date. The MOF will not provide funding for the early redemption of these PRC government bonds on a back-to-back basis
+but is obliged to repay the principal and the respective interest upon maturity. The redemption obligations, which represent
+the nominal value of government bonds underwritten and sold by the Group, but not yet matured as at 31 December 2021
+were RMB75,553 million (31 December 2020: RMB81,112 million). Management expects that the redemption obligation of
+these PRC government bonds by the Bank prior to maturity will not be material.
+As at 31 December 2021, the Group's outstanding securities underwriting commitments were RMB6,350 million (31
+December 2020: Nil).
+(f) Designated funds and loans
+Designated funds
+73,626
+Designated loans
+31 December
+2020
+2,361,366
+2,783,961
+2,783,778
+2,361,289
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrust agreements signed by the Group and the trustors. The Group does not bear any risk.
+230
+1,106,377
+31 December
+2021
+59,648
+ICBC
+27,840
+229
+32,192
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(c) Operating leases
+At the end of the reporting period, the Group's total future minimum lease receivables in respect of non-cancellable
+operating leases of assets are as follows:
+Within one year
+Over one year but within two years
+Over two years but within three years
+Notes to the Consolidated Financial Statements
+(d) Legal proceedings and arbitrations
+31 December
+2021
+31 December
+2020
+16,451
+17,218
+15,920
+16,043
+15,937
+Over three years but within five years
+Over five years
+18,975
+7,065,126
+6,249,953
+Subtotal for personal loans
+879,655
+865,326
+7,944,781
+Other
+Personal mortgage and business loans
+341,885
+12,194,706
+Subtotal for corporate loans
+349,997
+Other
+219,701
+239,155
+Mining
+272,189
+312,352
+11,102,733
+7,115,279
+20,667,245
+527,758
+Science, education, culture and sanitation
+6,259,230
+6,988,877
+2020
+31 December
+31 December
+2021
+Total
+Loans secured by mortgages
+Pledged loans
+Guaranteed loans
+Unsecured loans
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by collaterals is analysed
+as follows:
+By collaterals
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+247
+18,624,308
+Annual Report 2021
+Total for loans and advances to customers
+406,296
+Discounted bills
+(In RMB millions, unless otherwise stated)
+1,801,933
+343,860
+3,017,397
+Transportation, storage and postal services
+31 December
+2020
+31 December
+2021
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by industry is analysed as
+follows:
+By industry distribution
+100.00%
+18,624,308
+100.00%
+8.01%
+1,492,087
+6.92%
+1,429,769
+20,667,245
+Total
+Overseas and other
+4.52%
+841,595
+4.33%
+895,238
+2,659,916
+292,748
+Manufacturing
+1,718,400
+Construction
+310,559
+357,229
+Finance
+549,412
+559,559
+Wholesale and retail
+958,314
+932,390
+Real estate
+1,085,151
+1,152,584
+Production and supply of electricity, heating, gas and water
+1,177,193
+1,388,883
+Water, environment and public utility management
+1,517,265
+1,739,367
+Leasing and commercial services
+2,459,887
+2,260,445
+3,269
+8,703,068
+19,315
+Guaranteed loans
+79,246
+4,107
+16,796
+23,590
+34,753
+Unsecured loans
+Total
+3 years
+3 years
+1 year
+90 days
+Overdue
+for over
+Overdue
+for 1 to
+91 days to
+for 1 to
+Overdue for
+Overdue
+20,100
+18,985
+7,639
+66,039
+ICBC
+248
+267,507
+21,257
+72,467
+74,820
+98,963
+Total
+13,587
+31 December 2020
+1,350
+3,252
+3,986
+Pledged loans
+108,635
+8,161
+31,687
+27,878
+40,909
+Loans secured by mortgages
+4,999
+9,497,898
+254,901
+93,247
+22,502
+22,405
+Unsecured loans
+Total
+3 years
+Overdue
+for over
+31 December 2021
+Overdue
+for 1 to
+3 years
+1 year
+90 days
+91 days to
+for 1 to
+Overdue for
+Overdue
+The composition of the Group's gross overdue loans and advances to customers (excluding accrued interest) by collaterals is
+as follows:
+Overdue loans and advances to customers
+18,624,308
+20,667,245
+1,401,565
+1,720,583
+29,315
+Northeastern China
+77,491
+Guaranteed loans
+70,057
+72,444
+Total
+8,979
+1,221
+4,041
+2,495
+1,222
+Pledged loans
+19,153
+110,551
+33,485
+30,029
+38,491
+Loans secured by mortgages
+57,880
+6,117
+26,406
+15,031
+10,326
+8,546
+18.09%
+772,372
+18.13%
+The borrower's ability to improve performance when a financial difficulty arises;
+•
+The sustainability of the borrower's business plan;
+The impairment loss on credit-impaired corporate loans and advance to customers applied discounted cash flow method. If
+there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the loss is measured as
+the difference between the asset's gross carrying amount and the present value of estimated future cash flows discounted
+at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying amount. The
+impairment loss is recognised in the consolidated statement of profit or loss. In determining allowances on an individual
+basis, the following factors are considered:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+244
+There have been no significant changes in estimation techniques or significant assumptions adopted in ECL calculation
+during the year.
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+EAD refers to the total amount of on- and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. LGD depends on the type
+of counterparty, the method and priority of the recourse, and the type of collaterals, taking the forward-looking adjustments
+into account.
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the Internal Ratings-Based Approach under the New Basel
+Capital Accord, taking the forward-looking information into account and deducting the prudential adjustment to reflect the
+debtor's point-in-time PD under the current macro-economic environment.
+ECL for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL depending on whether a
+significant increase in credit risk on that financial instrument has occurred since initial recognition and whether an asset is
+considered to be credit-impaired. The loss allowance for loans and advances to customers, other than those corporate loans
+and advance to customers which are credit-impaired, is measured using the risk parameters method. The key parameters
+include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"), considering the time
+value of money.
+Parameters, assumptions and estimation techniques
+There are other objective evidences that indicate the financial asset is impaired.
+Due to serious financial difficulties, the financial asset cannot continue to be traded in an active market;
+It is probable that the borrower will be insolvent or carry out other financial restructurings;
+•
+•
+•
+The estimated recoverable cash flows from projects and liquidation;
+The availability of other financial support and the realisable value of collateral; and
+11,960
+2020
+2021
+19,134
+31 December
+31 December
+Impaired loans and advances to customers included in above
+Rescheduled loans and advances to customers
+The following table includes carrying amount of rescheduled loans and advance to customers:
+Such modifications include restructuring the loan to provide extended payment term arrangements, payment holidays
+or payment forgiveness. Restructuring policies and practices are based on indicators or criteria which, in the judgement
+of management, indicate that payment will most likely continue, and reviewed regularly. Such restructures are especially
+common for medium-term loans. The classification of a rescheduled loan shall not be upgraded unless it has met certain
+criteria and after an observation period of at least 6 months.
+The Group might modify the terms of loan with a customer based on commercial renegotiations, or when the customer is in
+financial difficulty, with a view to maximise the recovery of loan.
+Financial assets contract modification
+The Group has carried out sensitivity analysis of macro-economic indicators used in forward-looking measurement. As at
+31 December 2021, when the key economic indicators in the neutral scenario moved up or down by 10%, the ECL did not
+change by more than 5% (31 December 2020: less than 5%).
+As at 31 December 2021, the Group has taken into account different macro-economic scenarios, combined with the impact
+of factors such as COVID-19 on economic development trends, and made forward-looking forecasts of macro-economic
+indicators. Of which, the year-on-year GDP growth rate used to estimate ECL is 5.5% in the neutral scenario for 2022.
+When calculating the weighted average ECL provision, the Group determines the optimistic, neutral and pessimistic scenarios
+and their weightings through a combination of macro-statistical analysis and expert judgement.
+The calculation of ECL incorporates forward-looking information. The Group has performed historical data analysis and
+identified Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"), Purchasing Managers' Index ("PMI") and other
+macro-economic indicators as impacting the ECL for each portfolio. The impact of these economic variables on the PD and
+LGD has been determined by performing statistical regression analysis to understand the correlations among the historical
+changes of the economic variables, PD and LGD. Forecasts of these economic variables are carried out at least quarterly by
+the Group that provide the best estimate view of the economy over the next year.
+Forward-looking information contained in ECL
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+The timing of the expected cash flows.
+•
+•
+7,455
+In light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+A financial asset is generally considered to be credit-impaired if:
+The Group classifies financial instruments into three stages and makes provisions for expected credit loss accordingly,
+depending on whether credit risk on that financial instrument has increased significantly and whether the assets have been
+impaired since initial recognition. Refer to Note 4(10) Impairment of financial assets for the definition of the three stages.
+Stage of financial instruments
+Credit risk assessment method
+The Group is also exposed to credit risk in other areas. The credit risk arising from derivative financial instruments is limited
+to derivative financial assets recorded in the consolidated statement of financial position. In addition, the Group provides
+guarantees for customers and may therefore be required to make payments on their behalf. These payments would be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk similar
+to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also give
+rise to credit risk. The Group's credit risk is mainly attributable to its loans, due from banks and other financial institutions
+and financial investments.
+Definition and scope
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(a) Credit risk
+ICBC
+242
+The Bank maintains a dual-reporting risk management structure at the branch level. Under this structure, the risk
+management department of the branches report to both the Group risk management department and the management of
+the branches.
+The Group has clearly defined the roles of each department in monitoring financial risks within the Group. The Credit and
+Investment Management Department monitors credit risk, the Risk Management Department together with the Asset and
+Liability Management Department monitor market and liquidity risks, and the Internal Control and Compliance Department
+monitors operational risk. The Risk Management Department is primarily responsible for establishing and coordinating a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises risk management and reports directly to the Board. He chairs two management committees
+including the Risk Management Committee and the Asset and Liability Management Committee, which set the risk
+management strategies and appetite, evaluate and formulate risk management policies and procedures, and make
+recommendations through the President to the Risk Management Committee of the Board. The Chief Risk Officer assists the
+President to supervise the Bank's risk management.
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+49. FINANCIAL RISK MANAGEMENT
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+Includes net trading income, net gains or losses on financial investments and other net operating income.
+(i)
+Significant increase in credit risk
+It has been overdue for more than 90 days;
+The assessment of significant increase in credit risk and whether the assets have been impaired since initial recognition is
+performed at least on a quarterly basis for financial instruments held by the Group. The Group takes into consideration all
+reasonable and supportable information (including forward-looking information) that reflects significant change in credit
+risk for the purposes of classifying financial instruments. The main considerations are regulatory and operating environment,
+internal and external credit risk rating, debt-servicing capacity, operating capabilities, contractual terms, and repayment
+records. The Group compares the risk of default of a single financial instrument or a portfolio of financial instruments with
+similar credit risk characteristics as at the end of the reporting period and its risk of default at the date of initial recognition
+to determine changes in the risk of default over the expected lifetime of a financial instrument or a portfolio of financial
+instruments. In determining whether credit risk of a financial instrument has increased significantly since initial recognition,
+the Group considers factors indicating whether the probability of default has risen sharply, whether the financial instrument
+has been past due for more than 30 days, whether the market price has been falling continuously and other indicators.
+The Group has provided credit facilities for further extension of deferral in principal repayment and interest payment to the
+inclusive loans to micro and small-sized businesses in accordance with the government's regulations. The Group classifies the
+credit risk based on the actual situation of the borrower and the judgement of the substantive risk of the business for those
+loans with deferred principal repayment and interest payment. However, the temporary deferral in principal repayment and
+interest payment are not considered as an automatic trigger event for a significant increase in credit risk.
+243
+Impairment assessment
+The Group considers the borrower is unlikely to pay its credit obligations to the Group in full.
+(iii)
+(ii) Write-offs of loan; or
+The principal or interest of loan is past due more than 90 days to the Group;
+(i)
+The Group defines a retail business borrower as in default when any single credit asset of a borrower meets one or more of
+the following criteria:
+The corporate borrower has the matters refer to in (i) or (ii) above in other financial institutions.
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral; or
+(2,592,541)
+(iii)
+(ii)
+The principal or interest of loan is past due more than 90 days to the Group;
+(i)
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria:
+Definition of default
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+Annual Report 2021
+4,504
+Annual Report 2021
+245
+Pearl River Delta
+Yangtze River Delta
+Head Office
+Percentage
+Amount
+Percentage
+Amount
+31 December 2020
+31 December 2021
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by geographical
+distribution is analysed as follows:
+By geographical distribution
+(1) Loans and advances to customers
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+246
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location, or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+35,016,818
+36,737,042
+Bohai Rim
+2,711,454
+791,994
+4.15%
+3,746,867
+Western China
+14.98%
+2,789,085
+15.16%
+3,133,539
+Central China
+16.27%
+3,030,552
+16.31%
+3,371,325
+14.74%
+2,746,019
+15.17%
+3,134,781
+19.24%
+3,582,682
+20.15%
+4,163,732
+3.83%
+2,730,369
+Total maximum credit risk exposure
+Credit commitments
+Due from banks and other financial institutions
+Balances with central banks
+2020
+2021
+31 December
+31 December
+As at the end of the reporting period, the maximum credit risk exposure of the Group without taking into account of any
+collateral and other credit enhancements is set out below:
+Maximum exposure to credit risk without taking into account of any collateral and other
+credit enhancements
+(i)
+In 2021, the Group took possession of collateral held as security with a carrying amount of RMB41 million (2020: RMB377
+million).
+The Group monitors the market value of the collaterals and when needed, require additional collateral according to
+agreements. The Group disposes of repossessed assets in an orderly manner.
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid, with
+difficulties in registration or high fluctuations in market value. The value of collateral should be appraised and confirmed by
+the Group or valuation specialists engaged by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The Group takes into consideration the types of collateral, state of condition, liquidity, price volatility and
+realisation cost to determine the loan-to-value ratio of collateral. All collateral has to be registered in accordance with the
+relevant laws and regulations. The credit officers inspect the collateral and assess the changes in the value of collateral
+regularly.
+Retail loans are mainly collateralised by residential properties. As at 31 December 2021, the gross carrying amount of retail
+loans amounted to RMB7,944,781 million (31 December 2020: RMB7,115,279 million), of which credit exposure covered by
+collateral amounted to RMB7,056,652 million (31 December 2020: RMB6,269,321 million).
+Reverse repurchase business is mainly collateralised by bills and investment securities. As part of certain reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2021, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB12,722,464 million (31 December 2020:
+RMB11,509,029 million), of which credit exposure covered by collateral amounted to RMB3,849,616 million (31 December
+2020: RMB3,534,852 million).
+The amount and type of collateral required depends on the assessment of credit risk of the counterparty. Guidelines are in
+place specifying the types of collateral and valuation parameters which can be accepted.
+Collaterals and other credit enhancements
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+3,035,566
+32,305,364
+34,006,673
+377,563
+294,960
+6,265,668
+6,830,933
+― Financial investments measured at amortised cost
+Other
+638,485
+1,459,018
+1,704,164
+3,369,916
+Financial investments measured at FVTOCI
+Financial investments measured at FVTPL
+Financial investments
+18,136,328
+739,288
+134,155
+76,140
+663,496
+20,109,200
+1,081,897
+827,150
+3,472,962
+465,064
+(ii) Risk concentrations
+675,725
+Notes to the Consolidated Financial Statements
+71,669
+95,814
+13,968
+31,948
+646,765
+Internal net interest (expense)/income
+(219,971)
+41,775
+14,623
+112,918
+20,533
+15,508
+13,027
+1,587
+Net fee and commission income
+20,128
+42,859
+74,150
+270,017
+Central
+Western
+Northeastern
+Overseas
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+and other
+Eliminations
+Total
+External net interest income
+69,071
+Bohai
+23,086
+16,336
+130,424
+102,902
+145,927
+98,851
+121,336
+32,342
+60,588
+(100)
+800,075
+Operating expenses
+(22,438)
+(30,917)
+(23,339)
+(32,781)
+(29,820)
+107,805
+15,433
+Operating income
+1,169
+8,646
+12,950
+2,445
+10,729
+(1,269)
+131,215
+Other income/(expense), net (i)
+14,900
+(3,508)
+(1,304)
+(3,455)
+(1,997)
+(2,936)
+2,902
+16,324
+22,095
+Pearl
+Yangtze
+Chinese mainland (HO and domestic branches)
+61,782
+Property and equipment
+13,971
+33,190
+13,729
+20,726
+18,911
+23,331
+8,865
+157,573
+290,296
+Other non-current assets (ii)
+16,056
+7,371
+6,075
+61,782
+7,087
+joint ventures
+35,092,124
+China
+China
+and other
+Eliminations
+Total
+Assets by geographical areas
+8,145,032
+8,248,981
+5,870,705
+5,186,815
+3,786,925
+4,553,489
+1,333,077
+4,100,318
+(6,133,218)
+Including: Investments in associates and
+8,457
+9,685
+2,317
+31,896,125
+Other segment information:
+Credit commitments
+1,123,767
+1,172,580
+791,688 1,001,597
+450,171
+611,013
+147,856
+631,815 (3,200,118)
+2,730,369
+(i)
+(ii)
+Includes net trading income, net gains on financial investments and other net operating income.
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+2020
+Total liabilities
+98,067
+Unallocated liabilities
+31,798,058
+23,613
+80,661
+Unallocated assets
+79,259
+Total assets
+35,171,383
+Liabilities by geographical areas
+(35,113)
+5,470,908
+5,645,178
+7,928,583
+3,568,847
+3,745,729
+1,539,014
+1,088,995
+(6,133,218)
+8,944,022
+China
+(12,127)
+111
+33,277,345
+joint ventures
+41,206
+41,206
+Property and equipment
+13,929
+32,725
+12,791
+21,477
+18,374
+23,164
+9,088
+154,731
+286,279
+Other non-current assets (ii)
+(6,356,671)
+14,352
+4,024,527
+4,249,027
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+and other
+Eliminations
+Total
+9,665,936
+7,183,515
+4,935,763
+4,994,061
+3,334,445
+1,246,742
+Overseas
+7,817
+7,534
+30,342,877
+Unallocated liabilities
+92,666
+Total liabilities
+30,435,543
+Other segment information:
+Credit commitments
+1,077,366
+999,018
+683,005
+785,796
+371,823
+565,802
+145,460
+2,711,454
+(6,356,682)
+6,065
+838,331
+3,811,490
+8,580
+9,950
+2,256
+25,969
+82,523
+Unallocated assets
+67,713
+Total assets
+33,345,058
+Liabilities by geographical areas
+7,250,493
+7,840,257
+4,886,621
+7,507,515
+3,203,936
+1,360,916
+Northeastern
+Western
+Central
+25,884
+11
+390,822
+Share of results of associates and joint
+ventures
+Profit before taxation
+Income tax expense
+Profit for the year
+1,304
+1,304
+34,081
+75,295
+67,383
+76,322
+66,598
+2,593
+2,593
+66,598
+76,322
+(206,585)
+Impairment losses on assets
+(51,286)
+(24,212)
+(12,180)
+(36,824)
+(26,376)
+(19,625)
+(17,622)
+(14,543)
+(202,668)
+Operating profit
+34,081
+75,295
+67,383
+42,655
+27,188
+11
+392,126
+1,356
+20,457
+51,530
+Annual Report 2021
+241
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Assets by geographical areas
+Including: Investments in associates and
+31 December 2020
+Chinese mainland (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+5,413
+4,072
+6,346
+3,925
+(74,441)
+317,685
+Other segment information:
+Depreciation and amortisation
+2,883
+3,168
+2,533
+(20,161)
+3,849
+3,931
+1,425
+2,277
+23,448
+Capital expenditure
+4,692
+5,269
+3,382
+Rim
+42,655
+River Delta
+Other non-current assets (ii)
+42,553
+18,012
+6,601
+15,357
+82,523
+Unallocated assets
+67,713
+Total assets
+33,345,058
+Segment liabilities
+13,733,030
+12,126,286
+4,376,074
+107,487
+286,279
+30,342,877
+36,616
+101,573
+7,696
+600
+51,530
+31 December 2020
+Segment assets
+11,339,394
+7,454,567
+14,366,145
+117,239
+33,277,345
+Including: Investments in associates and joint ventures
+41,206
+41,206
+Property and equipment
+110,846
+37,244
+20,475
+Unallocated liabilities
+Total liabilities
+Bohai Rim:
+Central China:
+Western China:
+Northeastern China:
+the HO business divisions (including institutions directly managed by the HO and its offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+including Liaoning, Heilongjiang, Jilin and Dalian.
+Overseas and other
+Branches located outside Chinese mainland, domestic and overseas subsidiaries, and investments in associates and joint
+ventures.
+Chinese mainland (HO and domestic branches)
+2021
+Pearl River Delta:
+92,666
+Head Office ("HO"):
+Yangtze River Delta:
+The Group operates principally in Chinese mainland, and also has branches and subsidiaries operating outside Chinese
+mainland. The distribution of the geographical areas is as follows:
+30,435,543
+Other segment information:
+Credit commitments
+1,716,094
+995,360
+2,711,454
+(i)
+Includes net trading income, net gains or losses on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+Annual Report 2021
+239
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Geographical information
+Chinese mainland (Head Office and domestic branches)
+22,759
+Capital expenditure
+23,448
+(164,766)
+Net fee and commission income
+76,173
+53,761
+1,281
+131,215
+Other income, net (i)
+8,896
+1,436
+7,338
+4,425
+22,095
+Operating income
+393,661
+318,058
+131,818
+83,931
+32,948
+646,765
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+River Delta
+2020
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Other
+Total
+External net interest income
+275,644
+131,043
+240,078
+Internal net interest income/(expense)
+4,425
+800,075
+Operating expenses
+Profit before taxation
+146,903
+68,199
+2,555
+392,126
+Income tax expense
+(74,441)
+Profit for the year
+317,685
+Other segment information:
+Depreciation and amortisation
+10,360
+9,262
+3,509
+317
+1,304
+1,304
+Share of results of associates and joint ventures
+390,822
+(85,731)
+(103,482)
+(14,730)
+(2,642)
+(206,585)
+Impairment losses on assets
+(161,027)
+Yangtze
+(40,107)
+(532)
+(202,668)
+Operating profit
+146,903
+174,469
+68,199
+1,251
+(1,002)
+Pearl
+174,469
+Central
+422,030
+Share of results of associates and joint
+ventures
+Profit before taxation
+Income tax expense
+Profit for the year
+2,869
+2,869
+58,031
+83,920
+59,699
+64,383
+47,115
+65,477
+1,259
+42,146
+45,015
+1,259
+47,115
+Impairment losses on assets
+(45,081)
+(17,638)
+(21,724)
+(44,135)
+(25,034)
+(22,896)
+(15,400)
+(10,715)
+(202,623)
+Operating profit
+58,031
+83,920
+59,699
+64,383
+65,477
+424,899
+(74,683)
+350,216
+240
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2021
+Chinese mainland (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+Central
+Western
+Northeastern
+Bohai
+Overseas
+Head Office
+43,331
+14,822
+1,501
+4,625
+Other segment information:
+Depreciation and amortisation
+3,910
+2,584
+3,939
+3,358
+4,040
+(236,227)
+1,450
+24,848
+Capital expenditure
+6,089
+4,639
+3,845
+3,710
+4,100
+2,155
+69
+3,412
+(12,923)
+12,041
+38,891
+690,680
+Internal net interest (expense)/income
+(202,860)
+39,174
+11,381
+106,166
+20,293
+12,805
+15,066
+(2,025)
+Net fee and commission income
+47,014
+21,368
+105,129
+77,869
+83,851
+79,643
+Northeastern
+Overseas
+Western
+(21,184)
+Head Office
+River Delta
+River Delta
+14,503
+Rim
+China
+China
+and other
+Eliminations
+Total
+External net interest income
+268,554
+China
+17,067
+24,702
+11,540
+107,474
+145,660
+105,357
+126,799
+74,045
+(69)
+860,880
+Operating expenses
+(32,376)
+(34,986)
+(38,426)
+8,623
+(26,051)
+(37,142)
+(33,208)
+136,544
+135,488
+29,582
+37,176
+(1,572)
+Operating income
+133,024
+Other income/(expense), net (i)
+22,780
+(2,261)
+(2,275)
+(3,641)
+(1,428)
+(2,675)
+114
+25,059
+1,503
+2,361
+12,120
+4,409,851
+8,877
+Due to customers
+13,002,739
+Total liabilities
+1,546,301
+1,491,308
+290,342
+9,544
+301,667
+18,860
+26,441,774
+Debt securities issued
+Other
+28,189
+791,375
+86,298
+109,507
+203,003
+464,341
+5,972,715
+106,765
+26,766
+Certificates of deposit
+4,243
+87,180
+15,336,010
+3,689
+12,378
+Derivative financial liabilities
+165
+10,670
+13,773
+65,193
+12,768
+71,337
+Due to banks and other financial institutions (**)
+2,268,162
+488,000
+175,347
+278,804
+52,944
+23,715
+3,286,972
+7,195
+2,421,997
+one month
+(14,262,606)
+Less than
+three
+Three
+months to
+One to
+Over
+Undated
+on demand
+months
+one year
+repayable
+five years
+(***)
+Total
+Assets:
+Cash and balances with central banks
+910,499
+1,304
+20,301
+2,101
+3,238
+five years
+Net liquidity gap
+One to
+31 December 2020
+(89,448)
+117,672
+1,935,469
+(415,735)
+170,157
+5,130,013
+(377,347)
+173,032
+124,894
+887,422
+6,429,388
+538,067 14,692,050
+643,248
+31,896,125
+Overdue/
+3,190,277
+(*)
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+(***) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+252
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+3,275,258
+622
+3,041
+Financial liabilities designated as at FVTPL
+Loans and advances to customers
+17,882
+12,784
+1,097,463
+14,924
+29,509
+11,996
+6,666
+76,140
+849,883
+3,116,875
+3,219,890
+11,723,988
+83,219
+20,109,200
+Financial investments
+-Financial investments measured at FVTPL
+88,573
+6,662
+23,625
+261
+Derivative financial assets
+1,490,646
+39,484
+One to
+three
+months
+Less than
+one month
+2,601,656
+31 December 2021
+Three
+months to
+one year
+One to
+five years
+Over
+five years
+Undated
+(***)
+Total
+163,412
+Assets:
+621,110
+Due from banks and other financial institutions (*)
+239,523
+9,741
+778,638
+1,965
+225,730
+6,220
+2,459,402
+3,098,438
+204,230
+Cash and balances with central banks
+81,410
+167,956
+91,585
+Other
+106,055
+279,318
+Total assets
+1,073,404
+2,332,549
+59,652
+1,519,734
+136,411
+4,752,666
+80,479
+6,967,455
+290,296
+23,055
+15,335,298
+787,121
+3,190,277
+35,171,383
+Liabilities:
+Due to central banks
+1,111
+36,252
+2,360
+39,723
+102,151
+64,944
+290,296
+61,782
+623,223
+- Financial investments measured at FVTOCI
+66,225
+206,666
+347,980
+702,386
+380,896
+99,451
+1,803,604
+Property and equipment
+-Financial investments measured at
+81,718
+137,289
+748,029
+2,831,810
+3,029,696
+2,391
+6,830,933
+Investments in associates and joint ventures
+61,782
+amortised cost
+3,537,795
+(*)
+227,610
+19,554
+90,158
+258,867
+418,831
+798,127
+Other
+128,581
+167,625
+81,164
+298,621
+95,489
+33,956
+805,436
+Total liabilities
+15,821,513
+1,884,861
+1,789,845
+Net liquidity gap
+(14,309,956)
+10,717
+Debt securities issued
+25,134,726
+20,908
+Due to banks and other financial institutions (**)
+2,130,667
+390,573
+202,816
+272,281
+54,030
+27,326
+3,077,693
+Certificates of deposit
+335,580
+59,478
+154,694
+9,944
+335,676
+Due to customers
+13,499,762
+1,233,220
+1,336,721
+3,849,682
+5,194,433
+111,560
+(209,780)
+4,777,861
+(563,541)
+5,645,015
+One to
+five years
+Over
+five years
+Undated
+(***)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+621,110
+31 December 2021
+Three
+months to
+one year
+9,748
+6,356
+2,459,402
+3,098,594
+Due from banks and other financial institutions (*)
+239,524
+779,758
+227,507
+on demand
+208,024
+1,978
+140,973
+three
+months
+on demand
+516,448
+30,435,543
+981,145 13,324,640
+3,351,427
+2,909,515
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+(***) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+one month
+Annual Report 2021
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(ii)
+Maturity analysis of undiscounted contractual cash flows
+The tables below summarise the maturity profile of the Group's financial instruments based on the undiscounted contractual
+cash flows. The balances of some items in the tables below are different from the balances in the consolidated statement
+of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's actual cash
+flows on these instruments may vary significantly from the following analysis. For example, demand deposits from customers
+are expected to maintain a stable or increasing balance although they have been classified as repayable on demand in the
+following tables.
+Overdue/
+repayable
+One to
+Less than
+253
+10,887
+15,722
+58,840
+- Financial investments measured at FVTPL
+10,868
+21,033
+27,728
+244,359
+79,888
+240,195
+160,412
+784,483
+Financial investments
+-Financial investments measured at FVTOCI
+102,340
+269,234
+683,550
+325,957
+81,970
+1,540,988
+- Financial investments measured at
+amortised cost
+108,859
+199,800
+77,937
+642,382
+18,136,328
+10,659,555
+866,392
+339,155
+345,966
+36,773
+5,289
+1,821,185
+Derivative financial assets
+1,139
+20,613
+110,426
+25,841
+16,793
+10,377
+134,155
+Loans and advances to customers
+36,494
+943,639
+743,562
+2,603,777
+3,038,875
+59,392
+Due from banks and other financial institutions (*)
+2,751,810
+2,210
+33,345,058
+Liabilities:
+Due to central banks
+51
+555
+52,373
+1,995
+54,974
+Financial liabilities designated as at FVTPL
+3,351,427
+60,714
+5,268
+1,212
+14,535
+4,540
+87,938
+Derivative financial liabilities
+1,738
+21,579
+32,207
+1,669
+2,560,607
+13,841,088
+4,214,320
+6,265,668
+Investments in associates and joint ventures
+41,206
+41,206
+Property and equipment
+286,279
+286,279
+Other
+324,947
+6,626,160
+179,867
+28,909
+18,471
+39,108
+67,268
+796,971
+Total assets
+1,511,557
+2,220,441
+1,580,065
+138,401
+Overdue/
+repayable
+6,148,761
+(i) Maturity analysis of assets and liabilities
+Total
+Governments and central banks
+1,826,872
+3,878,911
+13,444
+23,941
+26,272
+5,769,440
+Policy banks
+710,867
+1,703
+11,822
+1,233
+725,625
+Banks and other
+financial institutions
+333,991
+372,867
+23,110
+Below A
+A
+AA
+AAA
+Banks and other
+financial institutions
+380,276
+382,264
+Corporate entities
+165,078
+384,700
+3,133,938
+5,259,285
+95,765
+12,010
+4,868
+41,550
+98,708
+233,289
+64,556
+56,685
+149,283 8,817,345
+942,773
+710,039
+Annual Report 2021
+249
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Unrated
+103,667
+72,925
+898,658
+Corporate entities
+at amortised cost
+Cash and balances
+with central banks
+3,098,438
+3,098,438
+Due from banks and
+other financial institutions
+828,241
+828,241
+Financial assets measured
+(1,091)
+Reverse repurchase agreements
+505,969
+505,969
+(128)
+(128)
+Loans and advances
+to customers
+Financial investments
+19,380,019
+6,832,308
+(1,091)
+754,719
+Total
+Stage 2
+141,253
+3,012,983
+369,783
+5,317
+81,893
+62,224
+660,470
+4,621,561
+43,574
+213,421
+Stage 3
+162,654
+(iii) Three-stage analysis of financial instruments' risk exposure
+The Group's credit risk stages of financial instruments are as follows:
+31 December 2021
+Stage 1
+Gross carrying amount
+Stage 2
+Provision for ECL
+Stage 3
+Total
+Stage 1
+8,054,193
+501,286
+6,425
+Total
+6,409,814
+12,167
+23,862
+171,130
+559,727
+754,719
+Banks and other financial institutions
+201,855
+310,160
+430,758
+942,773
+Corporate entities
+97,202
+551,757
+61,080
+710,039
+420,283
+1,686,821
+6,710,241
+8,817,345
+Financial
+investments
+Policy banks
+6,409,814
+5,658,676
+653,774
+42,720
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(2) Debt securities investments
+By issuers distribution
+The following tables present an analysis of debt securities (excluding accrued interest) by types of issuers and investments:
+31 December 2021
+Financial
+Financial
+investments
+Financial
+31 December 2020
+Financial
+investments
+measured at
+measured at
+measured at
+FVTPL
+FVTOCI
+amortised cost
+Total
+Governments and central banks
+97,364
+investments
+Financial
+investments
+investments
+46,572
+660,470
+465,812
+1,439,620
+8,054,193
+By rating distribution
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies where the issuers of debt securities are located. The carrying
+amounts of debt securities investments (excluding accrued interest) analysed by rating as at the end of the reporting period
+are as follows:
+Unrated
+AAA
+509,422
+31 December 2021
+AA
+Governments and central banks
+1,890,581
+4,454,127
+18,348
+18,747
+Policy banks
+698,003
+38,194
+6,324
+A
+Below A
+28,011
+31
+104,476
+898,658
+measured at
+measured at
+measured at
+FVTPL
+FVTOCI
+amortised cost
+Governments and central banks
+86,077
+479,505
+Corporate entities
+5,203,858
+Policy banks
+27,631
+169,478
+528,516
+725,625
+Banks and other financial institutions
+247,628
+281,215
+369,815
+Total
+5,769,440
+293,394 20,174,699 (269,376) (110,649)
+157 6,838,890 (5,639) (2,200)
+(223,739)
+(603,764)
+(703)
+(227,747)
+(92,002)
+(217,671)
+(537,420)
+Financial assets measured
+31 December 2020
+Gross carrying amount
+Provision for ECL
+Stage 1
+Stage 2
+Stage 3
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+at FVTOCI
+Loans and advances
+(104)
+(120)
+(479)
+178,693
+Loans and advances
+to customers
+Financial investments
+17,580,020
+6,262,762
+375,083
+7,819
+293,319 18,248,422
+160 6,270,741
+(223,703)
+(89,151)
+(217,446)
+to customers
+(530,300)
+(2,718)
+(121)
+(5,073)
+Precious metal leasing
+and lending
+177,581
+Total
+29,216,728
+951
+161
+393,200 293,640 29,903,568
+(2,234)
+413,633
+659
+414,292
+4,389
+2,711,454
+(22,021)
+(2,957)
+(1,732)
+(26,710)
+Annual Report 2021
+251
+Notes to the Consolidated Financial Statements
+24,509
+For the year ended 31 December 2021
+(b) Liquidity risk
+Liquidity risk is the risk that funds will not be sufficient or funds will not be raised at a reasonable cost in a timely manner to
+meet the need of asset growth or repayment of debts due, although the Group remains solvent. This may arise from amount
+or maturity mismatches of assets and liabilities.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Optimising the structure of assets and liabilities;
+Maintaining the stability of the deposit base;
+-
+Projecting cash flows and evaluating the level of current assets; and
+―
+Maintaining an efficient internal fund transfer mechanism to ensure sufficient liquidity at branch level.
+(In RMB millions, unless otherwise stated)
+(117)
+2,682,556
+(3,329)
+(211)
+(650)
+(861)
+Financial investments
+1,458,639
+326
+53
+1,459,018
+(2,206)
+Credit commitments
+(22)
+(2,468)
+Total
+1,872,272
+326
+712
+1,873,310
+(2,417)
+(22)
+(890)
+(240)
+(117)
+584,793
+584,793
+Stage 1
+Stage 2
+Stage 3
+Total
+at FVTOCI
+Loans and advances
+to customers
+534,636
+35
+Total
+534,671
+(28)
+(219)
+Financial investments
+1,703,228
+630
+306
+1,704,164
+(2,674)
+(355)
+(191)
+(1,341)
+Stage 2 Stage 3
+Provision for ECL
+(118)
+(7,957)
+Precious metal leasing
+and lending
+166,184
+Total
+30,811,159
+298
+508,009
+24 166,506
+293,575 31,612,743
+Stage 1
+(1,177)
+(21)
+(1,256)
+(277,411)
+(112,907)
+(223,878)
+(614,196)
+Financial assets measured
+31 December 2021
+Gross carrying amount
+(58)
+The tables below summarise the maturity profile of the Group's assets and liabilities. The Group's expected remaining
+maturity of its financial instruments may vary significantly from the following analysis. For example, demand deposits from
+customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+(4,370)
+2,237,864
+Provision for ECL
+Stage 2
+Stage 3
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+with central banks
+Gross carrying amount
+3,537,795
+Due from banks and
+other financial institutions
+1,073,777
+9,347
+1,083,124
+(1,214)
+(13)
+(1,227)
+Reverse repurchase agreements
+3,537,795
+Total
+31 December 2020
+Notes to the Consolidated Financial Statements
+630
+341 2,238,835
+(2,865)
+(355)
+(1,369)
+(4,589)
+Credit commitments
+2,711,256
+17,598
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+1,515 2,730,369
+(3,581)
+(987)
+(24,449)
+250
+ICBC
+Financial assets measured
+at amortised cost
+Cash and balances
+Stage 1
+(19,881)
+3,340
+1,500,873
+Loans and advances to customers (**)
+(iii) Analysis of credit commitments by contractual expiry date
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+255
+Annual Report 2021
+(*) Includes repurchase agreements.
+7,077
+(47)
+(581)
+Management does not expect all of the commitments to be drawn down before the expiry of the commitments.
+6,822
+553,739
+3,068,289
+(2,514,550)
+655,210 1,119,090 189,256 26,883
+(494,113) (846,380) (179,399) (25,437)
+161,097 272,710
+9,857
+1,446
+980,305
+(873,719)
+106,586
+97,545
+(95,502)
+2,043
+Cash outflow
+Including: Cash inflow
+Derivative financial instruments settled on gross basis
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+(1,860)
+31 December 2021
+Repayable
+on demand
+Less than
+one month
+Over
+five years
+five years
+One to
+Three
+months to
+one year
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+31 December 2020
+Credit commitments
+2,730,369
+280,085
+420,178
+497,709
+215,011
+105,556
+1,211,830
+Credit commitments
+Total
+Over
+five years
+One to
+five years
+Three
+months to
+one year
+three months
+One to
+2,743
+30,723,617
+582,365
+5,902,378
+203,992
+391,443
+2,167,704
+Due to banks and other financial institutions (*)
+88,518
+4,540
+14,658
+1,212
+5,278
+1,671
+61,159
+Financial liabilities designated as at FVTPL
+54,968
+1,987
+52,403
+526
+52
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+Over
+five years
+276,707
+Total
+58,071
+3,130,269
+619,198
+28,620
+62,143
+995,804
+495,458
+353,643
+112,222
+23,469
+5,647 14,894
+1,728,787 4,569,431
+25,497,225
+21,395
+5,401,402
+3,957,547
+337,635
+10,474
+154,446
+113,008
+59,707
+1,233,820 1,376,867
+11,012
+9,467
+1,707,120
+498,427
+16,233,536
+Other
+Debt securities issued
+13,506,194
+Due to customers
+Certificates of deposit
+32,352
+1,179,024
+113,370
+214,884
+257
+Annual Report 2021
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge
+or dispose positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(3)
+(2)
+(1)
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+VaR.
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaRs do not add up to the total portfolio
+73
+284
+14
+94
+62
+268
+29
+Minimum
+171
+264
+40
+41
+Notes to the Consolidated Financial Statements
+157
+For the year ended 31 December 2021
+(ii) Currency risk
+ICBC
+258
+(1,552)
+(402)
+(448)
+(1,331)
+(155)
+306
+566
+-1%
+HKD
+(210)
+-1%
+31 December
+2020
+31 December
+2021
+31 December
+2020
+2021
+31 December
+Change in
+currency rate
+Currency
+USD
+Effect on equity
+Effect on profit
+before taxation
+The tables below indicate a sensitivity analysis of exchange rate changes to which the Group had significant on- and off-
+balance sheet exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect
+of a reasonably possible movement in the currency rates against RMB, with all other variables held constant, on profit before
+taxation and equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity,
+while a positive amount reflects a potential net increase. While the table below indicates the effect on profit before taxation
+and equity of a 1% depreciation of USD and HKD against RMB, there will be an opposite effect with the same amount if
+the currencies appreciate by the same percentage. This effect, however, is based on the assumption that the Group's foreign
+exchange exposures as at the end of the reporting period are kept unchanged and, therefore, have not incorporated actions
+that would be taken by the Group to mitigate the adverse impact of this currency risk.
+The Group manages its currency risk through various methods, including limit management and risk hedging to hedge
+currency risk, and performs currency risk sensitivity analysis and stress testing regularly.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD, and other currencies
+to a lesser extent. The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange
+rate has been pegged to the USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in
+the exchange rate of RMB to USD. Transactions in foreign currencies mainly arise from the Group's foreign currency treasury
+operations, foreign exchange dealings and overseas investments.
+(In RMB millions, unless otherwise stated)
+One to
+five years
+230
+Average
+Average
+Year end
+2021
+Total portfolio VaR
+Commodity risk
+Currency risk
+Interest rate risk
+A summary of VaRs by risk type of trading portfolios is as follows:
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(i) VaR
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+256
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major market
+risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Value-at-risk ("VaR") analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios and a
+sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both trading and non-trading
+portfolios).
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios to be
+immaterial.
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign currency assets and liabilities, and off-balance sheet
+foreign exchange positions arising from derivative transactions.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and interest rate risk arising
+from treasury business positions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches
+between the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk
+in the banking book is disclosed in note 49(d).
+Market risk is the risk of loss, in respect of the Group's on- and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+2,711,454
+314,306
+361,217
+528,653
+Maximum
+49
+Minimum
+88
+Year end
+64
+1111
+161
+Maximum
+2020
+Total portfolio VaR
+Commodity risk
+Currency risk
+Interest rate risk
+80
+347
+198
+144
+12
+105
+37
+14
+71
+288
+172
+95
+46
+153
+72
+31 December 2020
+Three
+months to
+one year
+(c) Market risk
+Less than
+one month
+64,944
+2,268,538
+Due to banks and other financial institutions (*)
+Financial liabilities designated as at FVTPL
+40,089
+2,360
+36,614
+1,114
+1
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+five years
+Over
+One to
+five years
+31 December 2021
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+terms.
+623
+(***)
+1,306
+3,701
+298,841
+31,300 108,543
+36,804 16,089
+1,863,791 5,093,002 6,750,720
+26,881,281
+21,447
+6,274,552
+291,002
+9,076
+109,863
+106,862
+1,510,507 4,519,399
+3,309,032
+24,381
+61,495
+290,018
+175,898
+488,702
+65,201
+1,551,479
+10,862
+286,731
+2,403,599
+15,337,379
+Other
+Debt securities issued
+13,003,897
+Due to customers
+Certificates of deposit
+87,299
+4,249
+12,476
+535,026
+(**)
+48,425,127
+385,083
+212,545
+69,799
+-Financial investments measured at FVTOCI
+677,626
+92,607
+184,838
+106,924
+173,529
+24,438
+6,717
+88,573
+-Financial investments measured at FVTPL
+Financial investments
+32,238,213
+468,472
+19,491,028
+6,198,405
+3,837,204
+1,025,340
+1,194,834
+22,930
+One to
+three
+months
+777,859
+Includes reverse repurchase agreements.
+444,114
+1,989,126
+3,123,357
+23,794,660
+5,657,784 10,613,859
+1,708,257
+2,456,896
+1,070,314
+644,069
+3
+5,041
+83,643
+128,358
+49,188
+279,659
+98,177
+Other
+8,276,626
+3,147
+3,666,299
+3,404,308
+919,230
+167,261
+116,381
+-Financial investments measured at amortised cost
+99,726
+984,572
+(*)
+7,190
+207,927
+109,760
+-Financial investments measured at amortised cost
+1,705,647
+75,956
+386,509
+765,296
+290,770
+104,163
+82,953
+-Financial investments measured at FVTOCI
+826,026
+150,441
+271,393
+115,710
+227,824
+28,274
+21,431
+10,953
+-Financial investments measured at FVTPL
+Financial investments
+2,601,656 3,541,307
+2,127,791
+527,557 29,710,420
+298,328
+17,121,574
+3,331,990
+40,478
+3,136,236
+7,550,757
+on demand
+100,695
+Overdue/
+repayable
+(***) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+terms.
+The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+(**)
+Includes reverse repurchase agreements.
+(*)
+46,122,858
+3,359,551
+660,910
+791
+88
+9,248
+8,449
+5,231,400 10,687,256 21,214,128
+1,691,662
+2,152,760
+1,786,101
+19,349
+27,405
+595,580
+Other
+3,150
+20,301
+352,359
+3,570,003 6,424,534
+761,694
+1,041,610
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Non-derivative cash flows:
+ICBC
+254
+Includes repurchase agreements.
+(*)
+25,138
+306
+23,254
+(22,948)
+65,958 1,097,393 450,359 647,297 179,297
+(65,601) (1,080,685) (449,200) (638,174) (181,812)
+357
+16,708
+1,159 9,123 (2,515)
+31 December 2020
+Cash outflow
+260
+493
+2,138
+1,308
+215
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+Derivative cash flows:
+32,040,784
+983,897
+592,293
+447,509
+4,414
+Overdue/
+2,463,558
+(2,438,420)
+One to
+41,245
+Loans and advances to customers (**)
+341,302
+867,500
+227,824
+Due from banks and other financial institutions (*)
+6,750
+910,499
+Cash and balances with central banks
+Financial assets:
+Total
+2,101
+five years
+Over Undated
+One to
+five years
+Three
+months to
+one year
+months
+one month
+on demand
+three
+(***)
+Less than
+repayable
+joint ventures
+Investments in associates and
+6,265,668
+2,553,846
+2,688,862
+measured at amortised cost
+384,141
+-Financial investments
+41,206
+1,540,988
+638,819
+41,206
+796,971
+286,279
+286,279
+Other
+3,816,039
+Total assets
+3,121
+70
+793,780
+11,836,908
+12,285,726
+81,970
+Property and equipment
+314,100
+Derivative financial assets
+258,282
+29,611
+3,357,478
+5,289
+1,821,185
+134,155
+134,155
+Loans and advances to customers
+6,912,607
+10,463,879
+406,172
+336,693
+16,977
+18,136,328
+Financial investments
+-Financial investments
+measured at FVTPL
+117,682
+130,810
+71,188
+147,550
+317,253
+784,483
+-Financial investments
+measured at FVTOCI
+272,625
+614,011
+2,048,907
+805,436
+Liabilities:
+335,676
+Due to customers
+15,597,045
+3,808,680
+5,137,289
+20,242
+571,470
+25,134,726
+Debt securities issued
+169,119
+60,501
+149,678
+418,829
+798,127
+Other
+2,625
+5,987
+16,703
+6,426
+773,695
+Total liabilities
+18,664,582
+4,350,806
+35,806
+5,376,554
+7,010
+33,345,058
+154,366
+Certificates of deposit
+Due to central banks
+Financial liabilities
+designated as at FVTPL
+574
+52,373
+1,992
+35
+54,974
+4,972
+63
+11,618
+14
+71,271
+87,938
+Derivative financial liabilities
+140,973
+140,973
+Due to banks and other financial
+institutions (**)
+2,715,947
+268,836
+52,264
+27,239
+13,407
+3,077,693
+174,300
+345,048
+61,782
+financial institutions (*)
+1,069
+7,214
+1,066
+3
+39,723
+77,831
+87,180
+Derivative financial liabilities
+71,337
+71,337
+Due to banks and other financial
+institutions (**)
+2,919,746
+302,294
+31,688
+1,547
+31,697
+3,286,972
+Certificates of deposit
+174,720
+109,344
+5,947
+331
+Due to customers
+15,457,811
+2,360
+4,353,175
+36,252
+designated as at FVTPL
+472,750
+2,718,515
+2,939,372
+86,891
+6,830,933
+Investments in associates and
+joint ventures
+61,782
+Property and equipment
+290,296
+290,296
+Other
+4,385
+Total assets
+12,232,675
+13,264,209
+70,493
+3,923,479
+712,243
+787,121
+3,803,984
+1,947,036
+35,171,383
+Liabilities:
+Due to central banks
+Financial liabilities
+1,108
+1,405,431
+5,951,386
+660,872
+Includes repurchase agreements.
+The data set out in the above table includes trading book data.
+Annual Report 2021
+263
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Less than
+Three
+Non-
+three
+months
+months to
+one year
+One to
+five years
+Over
+interest-
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+3,190,119
+347,676
+3,537,795
+Due from banks and other
+(**)
+18,530
+Includes reverse repurchase agreements.
+N/A
+290,342
+26,441,774
+Debt securities issued
+Other
+116,340
+1,968
+62,391
+146,410
+456,464
+9,834
+86,118
+7,133
+Total liabilities
+18,672,762
+4,880,504
+6,224,975
+483,674
+9,770
+782,369
+1,634,210
+791,375
+887,422
+31,896,125
+Interest rate mismatch
+(6,440,087)
+8,383,705
+(2,301,496)
+3,320,310
+N/A
+(*)
+1,570,851
+Financial liabilities designated as at FVTPL
+Interest rate mismatch
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments measured at fair value
+Financial assets:
+Level 1
+31 December 2021
+Level 2
+Level 3
+Total
+Derivative financial assets
+4,440
+70,634
+1,066
+For the year ended 31 December 2021
+76,140
+157,655
+157,655
+Loans and advances to customers measured
+at FVTPL
+3,488
+106
+3,594
+Loans and advances to customers measured
+at FVTOCI
+534,671
+534,671
+Financial investments measured at FVTPL
+Reverse repurchase agreements measured
+at FVTPL
+Notes to the Consolidated Financial Statements
+267
+Annual Report 2021
+18.02%
+16.88%
+(i)
+Refers to risk-weighted assets after the capital floor and adjustments.
+50. FAIR VALUE OF FINANCIAL INSTRUMENTS
+The Group has established policies and internal controls with respect to the measurement of fair values, specifically the
+framework of fair value measurement of financial instruments, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter-
+seeking methods. Operating procedures specify measurement procedures, timing of valuation, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for daily
+transaction management. The Financial Accounting Department plays a lead role in formulating accounting policies of fair
+value measurement, valuation methodologies and system implementation. The Risk Management Department is responsible
+for verifying trade details and validating models.
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+Level 1 inputs: quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 2 inputs: valuation techniques for which all inputs that have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+Level 3 inputs: valuation techniques for which certain inputs that have a significant effect on the recorded fair value are not
+based on observable market data.
+266
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The following is a description of the fair value of financial instruments measured at fair value which are determined using
+valuation techniques. They incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial investments
+Financial investments that use valuation techniques for their valuation include debt securities, asset-backed securities and
+unlisted equity instruments. The Group values such securities by incorporating either only observable data or both observable
+and unobservable data. Observable inputs include assumptions regarding current interest rates; unobservable inputs include
+assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+The majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based
+on the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a
+valuation technique for which all significant inputs are observable market data.
+Derivatives
+Derivatives that use valuation techniques with market observable inputs are mainly interest rate swaps, foreign exchange
+forwards, swaps and options. The most frequently applied valuation techniques include discounted cash flow model and
+Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates, foreign
+exchange rate volatility, interest rate yield curves.
+Structured products are mainly valued using dealer's quotations.
+Loans and advances to customers
+The loans and advances to customers that use valuation techniques are mainly the bill business and discounted cash flow
+model is used. For bank acceptance bill, based on the different credit risk of the acceptor, interest rate yield curve is set up
+using the actual market data; for commercial bill, based on the interbank offered rate, interest rate yield curve is constructed
+according to the credit risk and liquidity point difference adjustment.
+Other liabilities at fair value through profit or loss
+For unquoted other liabilities at FVTPL, discounted cash flow model is used based on current yield curve appropriate for
+the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied based on
+parameters including yields, foreign exchange forward rates, foreign exchange rate volatilities, which are calibrated by active
+market quotes of standard European option with the same underlying items.
+Debt securities
+24,430
+392,013
+3,840
+1,803,604
+396,787
+2,648,936
+153,164
+3,198,887
+Financial liabilities:
+Due to customers
+296,128
+296,128
+735,724
+15
+86,598
+567
+87,180
+Derivative financial liabilities
+4,822
+65,089
+1,426
+71,337
+4,837
+447,815
+1,993
+454,645
+268
+ICBC
+56,666
+Capital adequacy ratio
+1,447,324
+99,440
+420,283
+Equity investments
+15,308
+16,751
+58,687
+90,746
+Funds and other investments
+52,995
+26,400
+32,799
+112,194
+92,733
+435,164
+95,326
+623,223
+Financial investments measured at FVTOCI
+Debt securities
+293,759
+1,407,578
+2,827
+1,704,164
+Equity investments
+5,855
+39,746
+53,839
+299,614
+14.28%
+14.94%
+Tier 1 capital adequacy ratio
+265
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The core tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio calculated after
+implementation of the advanced capital measurement approaches approved by the CBIRC are as follows:
+Core tier 1 capital
+Paid-in capital
+Valid portion of capital reserve
+Surplus reserve
+General reserve
+Retained profits
+Valid portion of minority interests
+Other
+Core tier 1 capital deductions
+31 December 2021
+31 December 2020
+2,903,516
+2,669,055
+356,407
+356,407
+148,597
+148,534
+356,849
+322,692
+438,640
+Annual Report 2021
+339,486
+The capital adequacy ratios and related components of the Group are calculated based on the statutory financial statements
+of the Group prepared under the PRC GAAP. During the year, the Group has complied in full with all its externally imposed
+regulatory capital requirements.
+Since 1 January 2013, the Group commenced calculating the capital adequacy ratios in accordance with the Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the CBIRC officially
+approved the Bank to adopt the advanced capital management approach. Within the approved scope of risk exposures that
+meet the regulatory requirements, the Bank can adopt the foundation internal ratings-based (IRB) approach for its corporate
+credit risk exposures, the IRB approach for its retail credit risk exposures, the internal model approach (IMA) for its market
+risk exposures, and the standardised approach for its operational risk exposures.
+(6,378,856)
+7,486,102
+(1,560,515)
+2,884,728
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+The data set out in the above table includes trading book data.
+264
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(e) Capital management
+The Group has set the following capital management objectives:
+•
+•
+.
+Maintain sound capital adequacy to meet regulatory requirements on capital, keep stable capital base to ensure the
+Group's business growth and the implementation of business development and strategic plans in order to achieve
+comprehensive, balanced, and sustainable development;
+Adopt the advanced capital measurement approach, improve the internal capital adequacy assessment process
+(ICAAP), publicly disclose information on capital management, cover all types of material risks, and ensure stable
+operations of the Group;
+Leverage on the results of quantitative assessments of material risks for daily risk management, establish a bank-
+wide value management mechanism with a core of economic capital, improve the aligned policies, processes, and
+applications in business management, strengthen the capital constraints and capital incentives mechanism, enhance
+the product pricing and decision-making support, and improve the capital allocation efficiency; and
+Make effective use of various capital instruments, continuously enhance capital strengths, refine the capital structure,
+improve capital quality, reduce capital costs, and maximise shareholders' returns.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profiles of its business operations. In order to maintain or adjust the capital structure, the Group may adjust its profit
+distribution policies, issue or repurchase its own shares, qualified additional tier 1 capital instruments, eligible tier 2 capital
+instruments, or convertible bonds.
+The management monitors the capital adequacy ratios regularly based on regulations issued by the CBIRC. The required
+information is semi-annually and quarterly filed with the CBIRC by the Group and the Bank.
+According to Regulation Governing Capital of Commercial Banks (Provisional), Measures for the Assessment of Systemically
+Important Banks, Additional Regulation of Systemically Important Banks (Provisional), and the capital surcharge applied to
+global systemically important banks as required by the Basel Committee on Banking Supervision, the minimum core tier 1
+capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio shall not be lower than 9%, 10% and
+12% respectively. In addition, overseas entities are directly regulated by local banking regulators, and the required capital
+adequacy ratios differ by countries or regions.
+30,435,543
+1,618,142
+3,539
+647
+Net tier 1 capital
+3,241,364
+2,872,792
+Tier 2 capital
+668,305
+523,394
+Valid portion of tier 2 capital instruments and related premiums
+418,415
+351,568
+Surplus provision for loan impairment
+248,774
+170,712
+Valid portion of minority interests
+1,116
+1,114
+Net capital base
+3,909,669
+3,396,186
+Risk-weighted assets (i)
+21,690,349
+20,124,139
+Core tier 1 capital adequacy ratio
+13.31%
+13.18%
+655
+1,508,562
+Valid portion of minority interests
+354,331
+3,552
+(18,658)
+(10,178)
+17,138
+16,053
+Goodwill
+7,691
+8,107
+Other intangible assets other than land use rights
+5,669
+4,582
+Cash flow hedge reserve that relates to the hedging of items that
+are not fair-valued on the balance sheet
+(4,202)
+(4,616)
+Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+7,980
+7,980
+Net core tier 1 capital
+2,886,378
+2,653,002
+Additional tier 1 capital
+354,986
+219,790
+Additional tier 1 capital instruments and related premiums
+219,143
+350,431
+The Group calculates the following core tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital
+adequacy ratio in accordance with the Regulation Governing Capital of Commercial Banks (Provisional) and relevant
+requirements. The requirements pursuant to these regulations may be different from those applicable in Hong Kong SAR and
+other jurisdictions.
+-Financial investments
+Includes repurchase agreements.
+Annual Report 2021
+259
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+USD
+31 December 2020
+HKD
+Other
+Total
+(in RMB
+(**)
+RMB
+(in RMB
+equivalent)
+(in RMB
+equivalent)
+(in RMB
+equivalent)
+Assets:
+Cash and balances with central banks
+3,258,416
+143,125
+21,381
+114,873
+3,537,795
+Due from banks and other financial institutions (*)
+equivalent)
+Includes reverse repurchase agreements.
+(*)
+2,730,369
+35,127
+791,375
+Other
+Total liabilities
+741,923
+117,020
+9,600
+18,879
+887,422
+28,637,664
+2,131,395
+446,184
+680,882
+31,896,125
+Net long position
+2,830,229
+79,225
+64,390
+301,414
+3,275,258
+Credit commitments
+2,085,604
+395,773
+76,881
+172,111
+1,083,840
+591,437
+23,981
+121,927
+10,743
+69,609
+6,265,668
+Investments in associates and joint ventures
+14,354
+1,019
+169
+25,664
+41,206
+Property and equipment
+147,506
+136,037
+713
+2,023
+286,279
+Other
+Total assets
+Liabilities:
+381,037
+157,713
+6,613
+251,608
+796,971
+29,510,123
+2,332,753
+107,089
+593
+6,078,227
+1,540,988
+1,821,185
+Derivative financial assets
+77,834
+31,640
+10,693
+13,988
+134,155
+Loans and advances to customers
+16,643,324
+822,891
+337,456
+332,657
+18,136,328
+Financial investments
+-Financial investments measured at FVTPL
+736,199
+30,251
+5,377
+12,656
+784,483
+― Financial investments measured at FVTOCI
+1,089,386
+311,551
+29,136
+110,915
+― Financial investments measured at amortised cost
+227,278
+528,377
+26,441,774
+76,140
+Loans and advances to customers
+18,705,303
+780,912
+319,687
+303,298
+20,109,200
+Financial investments
+- Financial investments measured at FVTPL
+565,961
+37,844
+6,913
+12,505
+623,223
+- Financial investments measured at FVTOCI
+1,300,499
+338,301
+54,886
+109,918
+1,803,604
+-Financial investments measured at amortised cost
+6,641,400
+106,016
+6,607
+76,910
+11,577
+6,830,933
+5,804
+24,951
+measured at amortised cost
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+A breakdown of the assets and liabilities analysed by currency is as follows:
+31 December 2021
+Assets:
+USD
+RMB
+(in RMB
+equivalent)
+HKD
+(in RMB
+equivalent)
+Other
+(in RMB
+equivalent)
+Total
+(in RMB
+equivalent)
+Cash and balances with central banks
+2,724,409
+174,831
+66,652
+132,546
+3,098,438
+Due from banks and other financial institutions (*)
+871,298
+515,224
+25,637
+78,487
+1,490,646
+Derivative financial assets
+33,808
+446,262
+Investments in associates and joint ventures
+1,010
+79,850
+87,180
+Derivative financial liabilities
+18,897
+35,831
+5,687
+10,922
+71,337
+Due to banks and other financial institutions (**)
+2,354,265
+702,938
+42,953
+186,816
+3,286,972
+Certificates of deposit
+41,707
+177,383
+20,490
+50,762
+290,342
+Due to customers
+24,914,524
+864,226
+366,861
+296,163
+6,719
+35,768
+611
+39,723
+130
+24,874
+61,782
+Property and equipment
+143,897
+143,589
+673
+2,137
+290,296
+Other
+Total assets
+Liabilities:
+454,407
+79,085
+23,585
+230,044
+787,121
+31,467,893
+2,210,620
+510,574
+982,296
+35,171,383
+Due to central banks
+37,360
+2,363
+Financial liabilities designated as at FVTPL
+1,055,920
+Debt securities issued
+Due to central banks
+income
+equity
+RMB
+USD
+HKD
+Other
+Total
+(27,286)
+(31,709)
+27,286
+34,753
+(169)
+(7,340)
+169
+7,345
+(1,734)
+(68)
+1,734
+68
+(30)
+(29,219)
+(1,766)
+30
+1,769
+(40,883)
+29,219
+equity
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the expected movements in net interest income and equity based on the projected yield curve
+scenarios and the Group's current interest rate risk profile. This effect, however, does not incorporate actions other than
+hedging that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same degree and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+income
+Effect on
+net interest
+1,551
+(5,873)
+(1,551)
+6,126
+HKD
+(958)
+(140)
+958
+142
+Other
+1,029
+(1,661)
+(1,029)
+1,694
+Total
+(25,728)
+(47,643)
+25,728
+51,624
+31 December 2020
+Currency
+Increased by 100 basis points
+Effect on
+net interest
+Decreased by 100 basis points
+Effect on
+Effect on
+USD
+262
+Notes to the Consolidated Financial Statements
+Loans and advances to customers
+7,520,367
+11,830,293
+386,803
+327,354
+44,383
+20,109,200
+Financial investments
+-Financial investments
+measured at FVTPL
+33,045
+150,390
+69,283
+164,957
+205,548
+623,223
+-Financial investments
+measured at FVTOCI
+334,480
+340,866
+642,215
+369,260
+116,783
+33,345,058
+1,803,604
+76,140
+ICBC
+76,140
+1,490,646
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities.
+31 December 2021
+Less than
+three
+months
+Three
+months to
+one year
+One to
+Over
+Non-
+interest-
+five years
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,786,830
+311,608
+3,098,438
+Due from banks and
+other financial institutions (*)
+1,207,522
+202,551
+36,170
+3,041
+41,362
+Derivative financial assets
+43,662
+43,935
+23,571,992
+Due to customers
+883,119
+377,699
+301,916
+25,134,726
+Debt securities issued
+478,569
+272,067
+4,744
+42,747
+798,127
+Other
+583,037
+196,560
+11,170
+805,436
+Total liabilities
+27,003,382
+2,256,272
+461,495
+714,394
+30,435,543
+Net long/(short) position
+2,506,741
+76,481
+335,676
+(15,233)
+93,958
+178,537
+50,796
+523
+27,350
+3,655
+54,974
+Financial liabilities designated as at FVTPL
+13,183
+6,207
+179
+68,369
+87,938
+Derivative financial liabilities
+84,174
+32,326
+10,787
+13,686
+140,973
+Due to banks and other financial institutions (**)
+2,182,407
+686,933
+32,959
+175,394
+3,077,693
+Certificates of deposit
+39,224
+23,957
+341,526
+14,669
+2,909,515
+Limit management: optimising the positions of interest-generating assets and interest-bearing liabilities and controlling
+the impact on profit or loss and equity; and
+•
+Hedging: using interest rate derivatives for hedging management in a timely manner.
+The Group measures interest rate risk mainly by analysing the sensitivity of projected net interest income under various
+interest rate movements (scenario analysis). The Group aims to mitigate the impact of prospective interest rate movements
+which might reduce future net interest income, while balancing the cost of hedging on the current revenue.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rate, with all other variables held
+constant, on the Group's net interest income and equity.
+The effect on net interest income is the impact of the assumed changes in interest rates on the net interest income, arising
+from the financial assets and financial liabilities held at the end of the reporting period that are subject to repricing within
+the coming year, including the effect of hedging instruments. The effect on equity is the impact of the assumed changes in
+interest rates on other comprehensive income, calculated by revaluing fixed rate financial assets measured at FVTOCI held at
+the end of the reporting period, including the effect of any associated hedges.
+Annual Report 2021
+261
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2021
+Increased by 100 basis points
+Effect on
+net interest
+Decreased by 100 basis points
+Effect on
+Effect on
+net interest
+Effect on
+Currency
+income
+equity
+income
+equity
+RMB
+(27,350)
+(39,969)
+Pricing management: managing the deviation of the pricing of interest-generating assets and interest-bearing liabilities
+from the benchmark interest rates or market interest rates;
+Duration management: optimising the differences in timing between contractual repricing (maturities) of interest-
+generating assets and interest-bearing liabilities;
+Notes to the Consolidated Financial Statements
+260
+2,001,018
+464,057
+Interest rate prediction: analysing the macro-economic factors that may impact the PBOC benchmark interest rates and
+market interest rates;
+70,784
+175,595
+2,711,454
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+ICBC
+Notes to the Consolidated Financial Statements
+Credit commitments
+(d) Interest rate risk in the banking book
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+•
+•
+The repricing period of different financial instruments are different when the interest rate changes;
+Despite the similarities in maturity periods, changes in the benchmark interest rate vary among on- and off-balance
+sheet business with different pricing benchmark interest rates;
+The Bank or the counterparty can elect to change the level or the maturity of future cash flows of financial instruments
+when the Bank holds equity derivative or when there are embedded option terms or implied options in the on- and
+off-banking book businesses; and
+Due to changes in expected default levels or market liquidity, the market's assessment of the credit quality of financial
+instruments changes, leading to changes in credit spreads.
+The Group manages the interest rate risk in the banking book through the Asset and Liability Management Department, and
+the following methods have been adopted:
+•
+•
+•
+Interest rate risk in the banking book is defined as the risk of loss in the overall return and the economic value of the
+banking book arising from adverse movements in interest rate and term structure. This type of risk may occur in the
+following situations:
+79,582
+79,478
+(146,024)
+13,036
+Net (short)/long position
+USD
+32
+Net structural position
+2,443
+1,342
+Net option position
+3,817
+128,581
+Net structural position
+26,055
+155,439
+Spot assets
+Spot liabilities
+Forward purchases
+Forward sales
+Net option position
+Net (short)/long position
+(2,944,886)
+31 December 2020
+HKD
+445,380
+2,195,697
+803
+(580,802)
+0.14%
+(2,210,989)
+Unaudited Supplementary Information To The Consolidated Financial
+Statements
+Other
+1,028,233
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+1.
+Statement of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and IFRSS
+for year ended 31 December 2021 and 2020. There are no differences between the equity attributable to equity holders of
+the parent company under PRC GAAP and IFRSS as at 31 December 2021 and 31 December 2020.
+2.
+Currency concentrations
+USD
+Spot assets
+Spot liabilities
+(153,095)
+Forward purchases
+31 December 2021
+HKD
+509,771
+Other
+955,285
+Total
+3,531,077
+(2,115,377)
+(446,184)
+(680,182)
+(3,241,743)
+2,112,979
+166,543
+385,249
+2,664,771
+Forward sales
+2,066,021
+Total
+3,669,310
+168,544
+(461,495)
+275
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+3.
+(i)
+Loans and advances to customers (excludes accrued interest)
+Overdue loans and advances to customers
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+31 December
+31 December
+2021
+2020
+Between 3 and 6 months
+28,208
+32,328
+Between 6 and 12 months
+41,849
+42,492
+Over 12 months
+112,400
+93,724
+182,457
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+0.17%
+ICBC
+Annual Report 2021
+investments in overseas subsidiaries, associates and joint ventures.
+•
+capital and statutory reserves of overseas branches; and
+(713,341)
+(3,414,874)
+2,856,506
+327,221
+457,654
+3,641,381
+(2,864,682)
+(208,738)
+(754,429)
+(3,827,849)
+(14,060)
+3,651
+(2,240,038)
+(1,597)
+(66,577)
+106,019
+16,520
+55,962
+120,822
+882
+26,634
+148,338
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+•
+property and equipment, net of depreciation charges;
+•
+(12,006)
+274
+(1,396) (2,021)
+54. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+1 January 2021
+Profit for the year
+Other comprehensive income
+Total comprehensive income
+Dividends ordinary shares 2020 final
+(note 17)
+Distributions to
+19,687
+(8,839)
+(8,839)
+30,550
+30,550
+(30,550)
+33,247
+--- - 33,247
+(33,247)
+19,687
+(211)
+(211)
+211
+(18)
+(18)
+(18)
+356,407
+219,143
+Balance as at 31 December 2020 and
+Other
+transferred to retained earnings
+Other comprehensive income
+Profit for the year
+Between 6 and 12 months
+304,267 304,267
+Other comprehensive income
+157
+152
+(3,108)
+(3,108)
+Total comprehensive income
+Dividends ordinary shares 2019 final
+(note 17)
+Distributions to
+153,285 317,903
+(1,396)
+157
+152
+(3,108) 304,267
+301,159
+(93,664)
+(93,664)
+other equity instrument holders
+(note 17)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve (ii)
+Capital injection by
+other equity instrument holders
+(2,021)
+329,209
+22,342
+(2,097)
+(32,494)
+97,505
+(97,505)
+Capital injection by
+other equity instrument holders
+139,730
+139,730
+Capital reduction by
+other equity instrument holders
+(4,542)
+63
+63
+32,494
+(4,479)
+356,407
+354,331 153,348 350,397 426,714 24,106
+(4,773)
+(3,996)
+2 945,798 1,486,265 3,142,801
+(i)
+(ii)
+Includes the appropriation made by overseas branches in the amount of RMB56 million (2020: RMB101 million).
+Includes the appropriation made by overseas branches in the amount of RMB47 million (2020: RMB11 million).
+52. EVENTS AFTER THE REPORTING PERIOD
+A final dividend of RMBO.2933 (pre-tax) per share after the appropriation of statutory surplus reserve and general reserve,
+was approved at the board of directors' meeting held on 30 March 2022, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2021, the final dividend amounted to approximately RMB104,534 million in total. The dividend payable was not recognised
+as a liability in the consolidated financial statements.
+53. COMPARATIVE AMOUNTS
+Certain comparative amounts have been reclassified to conform to the current year's presentation.
+Balance as at 31 December 2021
+The consolidated financial statements were approved by the board of directors on 30 March 2022.
+(9,607)
+97,505
+(4,082)
+63
+816,623
+1,397,575 2,789,748
+323,100
+323,100
+1,764
+(2,676)
+86
+(61)
+(887)
+(887)
+1,764
+(9,607)
+(2,676)
+(61)
+(887) 323,100
+322,213
+1
+1
+(94,804)
+(94,804)
+other equity instrument holders
+(note 17)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve (ii)
+32,494
+86
+Over 12 months
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+0.23%
+Unrealised gains and losses due to changes in own credit
+| | |
+risk on fair-valued liabilities
+15
+Defined-benefit pension fund net assets (net of deferred
+tax liabilities)
+16
+17
+7
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+banks, or between banks and other financial institutions
+Annual Report 2021
+277
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Item
+18
+Deductible amount of non-significant minority
+19
+20
+21
+22
+23
+24
+25
+investments in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+14
+Gain on sales related to asset securitisation
+13
+Shortfall of provision for loan impairment
+2,903,516
+3,552
+2,669,055
+X25
+Core tier 1 capital: Regulatory adjustments
+7
+Prudential valuation adjustments
+8
+Goodwill (net of deferred tax liabilities)
+7,691
+8,107
+X16
+9
+Deductible amount of significant minority investments
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+4,582
+X14-X15
+10
+Deferred tax assets that rely on future profits excluding
+those arising from temporary differences (net of
+deferred tax liabilities)
+11
+Cash flow hedge reserve that relates to the hedging of
+items that are not fair-valued on the balance sheet
+(4,202)
+(4,616)
+X20
+12
+234
+5,669
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier 1
+capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in core tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+31 December
+2021
+354,331
+219,143
+31
+Including: Portion classified as equity
+354,331
+219,143
+X28+X32
+32
+Including: Portion classified as liabilities
+33
+Invalid instruments to additional tier 1 capital after the
+transition period
+Additional tier 1 capital instruments and related premiums
+34
+655
+647
+X26
+35
+756,163 1,259,397 2,571,423
+354,986
+219,790
+36 Additional tier 1 capital before regulatory
+adjustments
+Additional tier 1 capital: Regulatory adjustments
+37
+Direct or indirect investments in own additional tier 1
+instruments
+Valid portion of minority interests
+Core tier 1 capital before regulatory adjustments
+30
+2,653,002
+31 December
+2020
+Reference
+N/A
+N/A
+N/A
+N/A
+26a
+Investments in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+7,980
+7,980
+X11
+Additional tier 1 capital:
+26b
+financial institutions that are under control but not
+subject to consolidation
+26c
+27
+Other that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+additional tier 1 capital and tier 2 capital
+28
+Total regulatory adjustments to core tier 1 capital
+17,138
+16,053
+29
+Core tier 1 capital
+2,886,378
+Shortfall in core tier 1 capital instruments issued by
+0.20%
+3,539
+56
+30,210
+41,772
+27,324
+25,489
+10,769
+10,705
+254,901
+267,507
+31 December 2021
+31 December 2020
+Rescheduled loans and advances
+19,134
+% of total
+loans and
+advances
+0.09%
+% of total
+loans and
+advances
+11,960
+0.06%
+Less: Rescheduled loans and advances
+overdue for more than three months
+Rescheduled loans and advances overdue
+for less than three months
+(2,301)
+(0.01%)
+(2,055)
+(0.01%)
+16,833
+0.08%
+28,398
+28,978
+38,411
+37,461
+0.54%
+0.50%
+0.88%
+0.90%
+The definition of overdue loans and advances to customers is set out as follows:
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amount of the
+loans and advances would be classified as overdue.
+(ii) Overdue loans and advances to customers by geographical distribution
+Head Office
+Bohai Rim
+Western China
+Central China
+Pearl River Delta
+9,905
+Yangtze River Delta
+Overseas and other
+(iii) Rescheduled loans and advances to customers
+31 December
+31 December
+2021
+2020
+35,969
+36,358
+50,790
+46,167
+33,400
+40,207
+Northeastern China
+0.05%
+276
+ICBC
+339,486
+X22
+2c
+Retained profits
+1,618,142
+1,508,562
+X23
+3
+Accumulated other comprehensive income (and other
+129,939
+138,356
+public reserve)
+438,640
+За
+148,597
+148,534
+X19
+3b
+Other
+(18,658)
+(10,178)
+X24
+4
+Valid portion to core tier 1 capital during the transition
+period (only applicable to non-joint stock companies.
+Fill in 0 for joint stock banks)
+Capital reserve
+Valid portion of minority interests
+General reserve
+X21
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+4.
+Exposures to non-bank entities in Chinese mainland
+The Bank is a commercial bank incorporated in Chinese mainland with its banking business primarily conducted in Chinese
+mainland. As at 31 December 2021 and 31 December 2020, substantial amounts of the Bank's exposures arose from
+businesses with entities or individuals in Chinese mainland. Analyses of various types of exposures by counterparty have been
+disclosed in the respective notes to the financial statements.
+5. Correspondence between balance sheet in published financial statements and capital
+composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(i) Capital composition
+Item
+Core tier 1 capital:
+31 December
+2021
+31 December
+2020
+2b
+Reference
+Paid-in capital
+356,407
+356,407
+X18
+2
+Retained earnings
+2,413,631
+2,170,740
+2a
+Surplus reserve
+356,849
+322,692
+1
+(89)
+Derivative financial liabilities
+(76)
+227,018
+1,040
+(2,937)
+25,737
+(23,109)
+(74,585)
+153,164
+Financial liabilities:
+Financial liabilities designated as at FVTPL
+(615)
+48
+Derivative financial liabilities
+(1,596)
+(82)
+(2,211)
+(34)
+Financial assets:
+(567)
+(28)
+203
+77
+(1,426)
+(28)
+203
+77
+53,839
+(6,318)
+(6,894)
+10,733
+3,840
+Equity investments
+73,710
+(2,826)
+1,878
+(9,187)
+(4,888)
+58,687
+Funds and other investments
+25,563
+4,220
+9,976
+(1,993)
+(5,559)
+32,799
+Financial investments measured at FVTOCI
+Debt securities
+464
+(39)
+2,092
+(311)
+621
+2,827
+Equity investments
+59,216
+(2,898)
+(1,401)
+1 January
+Total
+gains/(losses)
+recorded in
+Total
+effect
+in other
+64,172
+1,319
+12,604
+(2,203)
+(2,182)
+73,710
+Funds and other investments
+55,444
+(117)
+6,575
+(24,268)
+(12,071)
+Equity investments
+25,563
+Debt securities
+47
+464
+(47)
+464
+Equity investments
+44,895
+(528)
+18,298
+(2,025)
+(1,424)
+59,216
+Financial investments measured at FVTOCI
+(62,697)
+66,046
+(2,436)
+2020
+profit or loss
+comprehensive
+income
+Additions
+Disposals and
+settlements
+Transfer
+in/(out) of
+level 3
+31 December
+2020
+Derivative financial assets
+1,010
+782
+33
+(19)
+(345)
+1,691
+Loans and advances to customers
+measured at FVTPL
+1,149
+(61)
+(760)
+328
+Financial investments measured at FVTPL
+Debt securities
+52,913
+1,679
+13,909
+211
+219,630
+(356)
+(154)
+465,812
+Equity investments
+17,300
+2,718
+73,710
+93,728
+Funds and other investments
+24,128
+175,252
+25,563
+224,943
+49,008
+570,156
+165,319
+784,483
+Financial investments measured at FVTOCI
+Debt securities
+349,978
+1,108,576
+464
+1,459,018
+Equity investments
+8,504
+358,482
+14,250
+1,122,826
+66,046
+392,186
+7,580
+Debt securities
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Level 1
+Level 2
+Level 3
+Total
+Financial assets:
+Derivative financial assets
+4,691
+127,773
+59,216
+Reverse repurchase agreements measured
+at FVTPL
+1,691
+134,155
+154,612
+Loans and advances to customers measured
+at FVTPL
+3,586
+328
+3,914
+Loans and advances to customers measured
+at FVTOCI
+414,292
+414,292
+Financial investments measured at FVTPL
+154,612
+81,970
+59,680
+1,540,988
+1 January
+2021
+Total
+(losses)/gains
+recorded in
+profit or loss
+Total
+effects
+in other
+comprehensive
+income
+Additions
+Disposals and
+settlements
+Transfer
+in/(out) of
+level 3
+31 December
+2021
+Derivative financial assets
+1,691
+(191)
+Financial assets:
+57
+98
+1,066
+Loans and advances to customers
+measured at FVTPL
+328
+(9)
+(213)
+106
+16
+Financial investments measured at FVTPL
+Debt securities
+66,046
+(589)
+1,001
+The following table shows the movement of level 3 financial assets and financial liabilities measured at fair value during the
+year:
+(In RMB millions, unless otherwise stated)
+412,181
+2,393,245
+227,018
+3,032,444
+Financial liabilities:
+Due to customers
+693,173
+693,173
+Financial liabilities designated as at FVTPL
+331
+86,992
+615
+(b) Movement of level 3 financial instruments measured at fair value
+87,938
+5,846
+133,531
+1,596
+140,973
+6,177
+913,696
+2,211
+922,084
+Annual Report 2021
+269
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+Derivative financial liabilities
+(4,239)
+3,602
+51,883
+31,630,879
+Due to central banks
+39,648
+54,304
+Financial liabilities designated as at FVTPL
+70,256
+70,938
+Derivative financial liabilities
+39,994
+94,891
+Due to banks and other financial institutions
+2,821,165
+2,707,115
+Repurchase agreements
+178,256
+Certificates of deposit
+238,632
+90,113
+277,683
+Due to customers
+25,659,484
+24,338,306
+Income tax payable
+91,029
+87,273
+Debt securities issued
+33,440,403
+642,714
+630,440
+65,858
+19,310,688
+17,307,271
+8,562,631
+7,948,361
+396,261
+574,295
+Financial investments measured at FVTOCI
+1,522,578
+1,265,920
+Financial investments measured at amortised cost
+6,643,792
+6,108,146
+Other liabilities
+Investments in subsidiaries
+147,383
+Investments in associates
+35,042
+34,242
+Property and equipment
+133,698
+131,865
+Deferred tax assets
+Other assets
+TOTAL ASSETS
+LIABILITIES
+76,066
+163,283
+TOTAL LIABILITIES
+EQUITY
+Share capital
+273
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The statement of changes in equity of the Bank are set out below.
+Reserves
+Foreign
+Other
+Share
+equity
+capital instruments
+Investment currency
+Capital Surplus General revaluation translation
+Cash flow
+Annual Report 2021
+hedging
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+reserves
+Retained
+Total
+Subtotal earnings equity
+Balance as at 1 January 2020
+356,407 199,456
+153,303
+287,353 295,962 23,949
+Other
+560,271
+Finance and Accounting Department
+Liu Yagan
+655,515
+658,765
+503,623
+461,743
+30,297,602
+28,841,131
+356,407
+356,407
+Other equity instruments
+354,331
+219,143
+Reserves
+General Manager of
+945,798
+Retained earnings
+1,486,265
+1,397,575
+TOTAL EQUITY
+3,142,801
+2,789,748
+TOTAL LIABILITIES AND EQUITY
+33,440,403
+31,630,879
+Chen Siqing
+Chairman
+Liao Lin
+Vice Chairman and President
+816,623
+(528)
+523,897
+47,218
+2021
+2020
+296
+1,012
+710
+2,675
+1,006
+3,687
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the reporting
+period.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+In 2021, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the Group
+were not significant.
+(ii) Transfers between level 2 and level 3
+At the end of the reporting period, certain financial instruments were transferred out from level 2 to level 3 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously observable became unobservable.
+At the end of the reporting period, certain financial instruments were transferred out from level 3 of the fair value hierarchy
+for financial assets and liabilities, when significant inputs used in their fair value measurements, which was previously
+unobservable became observable, or when there was a change in valuation technique.
+(d) Valuation of financial instruments with significant unobservable inputs
+Financial instruments valued with significant unobservable inputs primarily include certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using discounted cash flow model. The models
+incorporate various unobservable assumptions such as discount rates and market rate volatilities.
+As at 31 December 2021, the effects of changing the significant unobservable assumptions to reasonably possible alternative
+assumptions were not significant (31 December 2020: not significant).
+Annual Report 2021
+271
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(e) Fair value of financial assets and financial liabilities not carried at fair value
+There are no significant differences between the carrying amount and the fair value of financial assets and financial liabilities
+not measured at fair value, except for the following items:
+31 December 2021
+Transfers between level 1 and level 2
+(i)
+(c) Transfers between levels
+Realised
+Unrealised
+(32,084)
+(15,485)
+227,018
+Financial liabilities:
+Financial liabilities designated as at FVTPL
+(592)
+(23)
+(1,052)
+108
+(1,644)
+85
+22
+Carrying
+amount
+(615)
+377
+(1,027)
+(1,596)
+(2)
+377
+(1,027)
+(2,211)
+270
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Net gains or losses on level 3 financial instruments are set out below:
+(2)
+Fair value
+Level 1
+Level 2
+432,954
+Subject to the existence of an active market such as an authorised stock exchange, the market value is the best reflection
+of the fair value of a financial instrument. As there is no available market value for certain financial assets held and financial
+liabilities issued by the Group, discounted cash flow or other valuation methods described below are adopted to determine
+the fair values of these financial assets and financial liabilities:
+(i)
+(ii)
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, fair values are estimated on the basis of pricing models or discounted cash flows.
+The fair values of subordinated bonds and tier 2 capital bonds are determined with reference to the available market
+values. If quoted market prices are not available, fair values are estimated on the basis of pricing models or discounted
+cash flows.
+All of the aforementioned assumptions and methods provide a consistent basis for the calculation of the fair values of the
+Group's financial assets and financial liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+272
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+51. STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY OF
+THE BANK
+432,954
+The statement of financial position of the Bank are set out below.
+31 December 2020
+ASSETS
+Cash and balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+Financial investments measured at FVTPL
+2,959,034
+998,406
+3,459,273
+1,242,972
+31 December 2021
+90,669
+430,064
+Financial liabilities
+Level 3
+Financial assets
+Financial investments measured at amortised cost
+6,830,933
+6,886,188
+29,158
+6,644,213
+212,817
+Financial liabilities
+Subordinated bonds and tier 2 capital bonds
+470,806
+481,954
+Subordinated bonds and tier 2 capital bonds
+481,954
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+Financial assets
+Financial investments measured at amortised cost
+6,265,668
+6,299,526
+88,094
+6,072,770
+138,662
+31 December 2020
+278
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Securities Law of the
+People's Republic of
+China/China
+Securities and Futures
+Ordinance of Hong Kong/
+Hong Kong SAR, China
+The Bank
+360011
+Company Law of the
+People's Republic of China,
+Securities Law of the
+People's Republic of China.
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative Measures on
+Preference Shares,
+Guidance on
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Core tier 1 capital
+Core tier 1 capital
+Additional tier 1 capital
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Including: Post-transition arrangement of
+Core tier 1 capital
+Core tier 1 capital
+Additional tier 1 capital
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+284
+The Bank
+1398
+ICBC
+Preference shares
+(Domestic)
+Ordinary shares
+(A share)
+The Bank
+601398
+capital instrument
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+Regulatory treatment
+Including: Transition arrangement
+31 December 2021
+Balance sheet
+under regulatory
+scope of
+consolidation
+Reference
+(752)
+(39,707)
+1,609
+356,849
+X21
+438,640
+X22
+1,618,142
+X23
+9,805
+3,539
+X25
+655
+X26
+1,116
+X27
+Ordinary shares
+(H share)
+Main features of regulatory
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Main features of regulatory
+18 November 2015
+Perpetual
+Perpetual
+No maturity date
+No
+No maturity date
+No
+No maturity date
+Yes
+Issuer call (subject to prior supervisory
+approval)
+Including: Optional call date, contingent call
+dates and redemption amount
+Including: Subsequent call dates,
+if applicable
+N/A
+N/A
+N/A
+N/A
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Floating
+Floating
+Including: Coupon rate and any related index
+N/A
+N/A
+Other equity
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+RMB45,000
+Share capital,
+capital reserve
+19 October 2006
+capital instrument
+Ordinary shares
+(A share)
+Including: Eligible to the parent company/
+group level
+Parent company/
+Ordinary shares
+(H share)
+Parent company/
+Group
+Core tier 1
+Group
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+capital instrument
+RMB336,554
+RMB269,612
+Share capital,
+capital reserve
+19 October 2006
+Perpetual
+Preference shares
+(Domestic)
+Parent company/
+Group
+Additional tier 1
+Core tier 1
+capital instrument
+RMB168,374
+capital instrument
+RMB86,795
+RMB44,947
+Including: Existence of a dividend stopper
+(iv) Main features of eligible capital instruments
+Including: Valid portion of additional tier 1 capital
+X29
+6,756,647
+X30
+X31
+Long-term equity investments
+69,762
+Including: Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+7,980
+X11
+Including: Undeducted portion of non-significant minority
+1,686
+X12
+investments in capital instruments issued by
+financial institutions that are not subject to consolidation
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+26,284
+X13
+are not subject to consolidation
+Other asset
+Interest receivable
+430,485
+2,283
+Intangible assets
+21,175
+X14
+X10
+Including: Land use rights
+2,468
+Reference
+Including: Non-significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in tier 2
+X07
+140,871
+X08
+capital instruments issued by financial institutions that
+are not subject to consolidation
+ICBC
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Item
+Financial investments measured at FVTOCI
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at amortised cost
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+31 December 2021
+Balance sheet
+under regulatory
+scope of
+consolidation
+1,743,097
+13,052
+X09
+Including: Valid portion of tier 2 capital
+15,506
+Other receivables
+Other comprehensive income
+(18,658)
+X24
+Reserve for changes in fair value of financial assets
+24,435
+Reserve for cash flow hedging
+(4,243)
+Including: Cash flow hedge reserve that relates to the hedging of
+items that are not fair-valued on the balance sheet
+(4,202)
+X20
+Annual Report 2021
+283
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Item
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+Other
+Surplus reserve
+General reserve
+Retained profits
+Minority interests
+Including: Valid portion of core tier 1 capital
+X19
+X15
+148,597
+X32
+274,468
+Goodwill
+7,691
+X16
+Long-term deferred expenses
+5,541
+Repossessed assets
+3,946
+Other
+115,381
+Debt securities issued
+791,375
+Including: Valid portion of tier 2 capital instruments and their premiums
+418,415
+X17
+Share capital
+356,407
+X18
+Other equity instruments
+354,331
+Including: Preference shares
+134,614
+X28
+Including: Perpetual bonds
+219,717
+Capital reserve
+capital instruments issued by financial institutions that
+are not subject to consolidation
+N/A
+Including: Fully discretionary,
+company/group level
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+call dates and redemption amount
+Parent company/Group
+Parent company/Group
+Additional tier 1 capital
+Additional tier 1 capital
+instrument
+Parent company/Group
+Additional tier 1 capital
+instrument
+RMB69,981
+RMB equivalent 19,687
+RMB70,000
+Other equity
+19 September 2019
+Perpetual
+USD2,900
+Other equity
+23 September 2020
+Perpetual
+instrument
+RMB79,987
+RMB80,000
+Other equity
+Including: Eligible to the parent
+26 July 2019
+Commercial Banks (Provisional)
+Additional tier 1 capital
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+Preference shares
+(Domestic)
+The Bank
+360036
+Preference shares
+(Offshore)
+The Bank
+4620
+Undated additional tier 1
+capital bonds (Domestic)
+The Bank
+1928018
+Company Law of the People's
+Republic of China, Securities
+Law of the People's Republic
+of China, Guidance of the
+State Council on Launch of
+Preference Shares Pilot, Trial
+Administrative Measures on
+Preference Shares, Guidance
+on the Issuance of Preference
+Shares of Commercial Banks to
+Replenish Tier 1 Capital/China
+The creation and issue of the
+Offshore Preference Shares
+and the rights and obligations
+(including non-contractual
+rights and obligations)
+attached to them are governed
+by, and shall be construed in
+accordance with, PRC law
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents/China
+Regulatory treatment
+Including: Transition arrangement
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Including: Post-transition arrangement of
+Additional tier 1 capital
+Additional tier 1 capital
+Regulation Governing Capital of
+ICBC
+Perpetual
+The First Redemption Date is
+24 September 2024, in
+full or partial amount
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially
+discretionary or mandatory cancellation
+of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+Including: If convertible, conversion trigger(s)
+Including: If convertible, fully or partially
+No
+Non-cumulative
+Yes
+Additional Tier 1 Capital
+Trigger Event or Tier 2 Capital
+Trigger Event
+Fully or partially convertible
+when an Additional Tier 1
+Capital Trigger Event occurs;
+fully convertible when a Tier 2
+Capital Trigger Event occurs
+No
+No
+Non-cumulative
+Non-cumulative
+Yes
+No
+Non-viability Trigger Event
+N/A
+Fully or partially convertible
+when a Non-viability Trigger
+Event occurs
+NA
+N/A
+288
+ICBC
+Coupons/dividends
+No maturity date
+Yes
+Fully discretionary
+Fully discretionary
+No maturity date
+Yes
+The First Redemption Date is
+23 September 2025, in
+full or partial amount
+No maturity date
+Yes
+The First Redemption Date is
+30 July 2024, in
+full or partial amount
+Annual Report 2021
+287
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: Subsequent call dates, if applicable
+Preference shares
+(Domestic)
+Commences on the
+First Redemption Date
+(24 September 2024) and
+ends on the completion date
+of redemption or conversion
+of all the Domestic Preference
+Shares
+Preference shares
+(Offshore)
+23 September in each year
+after the First Redemption
+Date
+Undated additional tier 1
+capital bonds (Domestic)
+Redemption of present bonds
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+Date (30 July 2024).
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+capital after
+they are issued due to
+unpredictable changes in
+regulatory rules
+Fixed to floating
+4.45% (interest rate)
+before 30 July 2024
+Fixed to floating
+4.2% (dividend rate)
+before 24 September 2024
+Yes
+Fixed to floating
+3.58% (dividend rate)
+before 23 September 2025
+Yes
+Yes
+Fully discretionary
+N/A
+286
+No
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Ordinary shares
+(A share)
+Ordinary shares
+(H share)
+Preference shares
+(Domestic)
+Including: If convertible, conversion trigger(s)
+N/A
+N/A
+Additional Tier 1 Capital
+Trigger Event or Tier 2
+Including: If convertible, fully or partially
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+Including: If convertible, mandatory or
+optional conversion
+Including: If convertible, specify instrument
+type convertible into
+Including: If convertible, specify issuer of
+instrument it converts into
+Write-down feature
+Unaudited Supplementary Information To The Consolidated Financial Statements
+름름름
+285
+Yes
+Fully discretionary
+Fully discretionary
+partially discretionary or mandatory
+cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+The First Redemption Date
+is 18 November 2020,
+in full or partial amount
+Commences on the
+First Redemption Date
+(18 November 2020) and ends
+on the completion date of
+redemption or
+conversion of all the
+Domestic Preference Shares
+Fixed to floating
+4.5% (dividend rate) before
+23 November 2020,
+4.58% (dividend rate)
+between 23 November 2020
+and 22 November 2025
+Yes
+Fully discretionary
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+Annual Report 2021
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+Subordinated to depositor,
+Subordinated to depositor,
+(specify instrument type immediately
+senior to instrument)
+general creditor,
+creditor of the
+subordinated
+general creditor,
+creditor of the
+subordinated
+debts and
+debts and
+preference shareholders
+preference shareholders
+Subordinated to deposits,
+general debts,
+subordinated debts,
+tier 2 capital bonds and
+undated additional
+tier 1 capital bonds
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+No
+N/A
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+Capital Trigger Event
+Fully or partially
+convertible when an
+Additional Tier 1 Capital
+Trigger Event occurs;
+fully convertible when
+a Tier 2 Capital Trigger
+Event occurs
+The initial conversion price
+is equal to the average
+trading price of the A shares
+of the Bank for the
+20 trading days preceding
+25 July 2014, the date of
+publication of the Board
+resolution in respect of
+the issuance plan
+Mandatory
+Core tier 1 capital
+The Bank
+N/A
+N/A
+3
+No
+No
+No
+Including: If write-down, write-down trigger(s)
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down,
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+X06
+21
+Including: Significant minority investments in core tier 1
+155,815
+138,247
+X05+X07+X08+
+X09+X12+X29+X30
+28,773
+32,452
+X06+X10+X13
+N/A
+74,611
+N/A
+65,719
+Valid caps of surplus provision for loan impairment in
+tier 2 capital
+76
+77
+Provision for loan impairment under the weighted approach
+Valid cap of surplus provision for loan impairment in
+24,545
+23,204
+X01
+15,909
+7,802
+X02
+78
+tier 2 capital under the weighted approach
+Surplus provision for loan impairment under the internal
+ratings-based approach
+579,219
+507,096
+X03
+79
+Undeducted portion of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Mortgage servicing rights (net of deferred tax liabilities)
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+232,865
+75
+73
+2.5%
+2.5%
+66
+Including: Countercyclical buffer requirements
+67
+Including: G-SIB buffer requirements
+1.5%
+1.5%
+68 Percentage of core tier 1 capital meeting buffers to
+risk-weighted assets
+8.31%
+8.18%
+Domestic minima for regulatory capital
+69
+Core tier 1 capital adequacy ratio
+70
+Tier 1 capital adequacy ratio
+71 Capital adequacy ratio
+5.0%
+5.0%
+6.0%
+6.0%
+8.0%
+8.0%
+Amounts below the thresholds for deduction
+72
+74
+Including: Capital conservation buffer requirements
+162,910
+Valid cap of surplus provision for loan impairment in
+tier 2 capital under the internal ratings-based approach
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for
+regulatory
+scope of
+consolidation*
+Assets
+Cash and balances with central banks
+Due from banks and other financial
+institutions
+Precious metals
+Placements with banks and
+other financial institutions
+Derivative financial assets
+3,098,438
+3,098,438
+3,537,795
+3,537,795
+346,457
+301,191
+522,913
+489,231
+265,962
+265,962
+277,705
+277,705
+480,693
+480,693
+under
+X04
+31 December 2020
+Balance sheet
+consolidation*
+80
+81
+the current period due to phase-out arrangements
+Excluded from core tier 1 capital due to cap
+82
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+83
+84
+85
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period
+20,285
+40,570
+37,740
+67,463
+due to cap
+ICBC
+280
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(ii) Consolidated financial statements
+31 December 2021
+31 December 2021
+Balance sheet
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+under
+regulatory
+scope of
+31 December 2020
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+558,984
+65
+4.0%
+45
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+3,241,364
+2,872,792
+Tier 2 capital:
+46
+Tier 2 capital instruments and related premiums
+418,415
+351,568
+X17
+47
+Invalid instruments to tier 2 capital after the transition
+20,285
+40,570
+period
+48
+Valid portion of minority interests
+1,116
+1,114
+X27
+49
+Including: Invalid portion to tier 2 capital after the
+transition period
+50
+51
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+219,790
+248,774
+354,986
+44
+38
+39
+40
+40
+41a
+41b
+41c
+42
+43
+Reciprocal cross-holdings in additional tier 1 capital
+between banks, or between banks and other financial
+institutions
+Deductible amount of non-significant minority
+investments in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+Significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Other that should be deducted from additional tier 1 capital
+Undeducted shortfall that should be deducted from tier 2
+capital
+Total regulatory adjustments to additional tier 1
+31 December
+2021
+31 December
+2020
+Reference
+capital
+Additional tier 1 capital
+4.0%
+170,712
+668,305
+Tier 2 capital
+668,305
+59
+Total capital (tier 1 capital+ tier 2 capital)
+3,909,669
+523,394
+3,396,186
+60
+Total risk-weighted assets
+21,690,349
+20,124,139
+Requirements for capital adequacy ratio and reserve capital
+61
+Core tier 1 capital adequacy ratio
+13.31%
+13.18%
+62
+Tier 1 capital adequacy ratio
+14.94%
+14.28%
+63
+Capital adequacy ratio
+18.02%
+16.88%
+64
+Institution specific buffer requirements
+58
+X02+X04
+Total regulatory adjustments to tier 2 capital
+Other that should be deducted from tier 2 capital
+523,394
+Tier 2 capital: Regulatory adjustments
+52
+53
+54
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks,
+or between banks and other financial institutions
+Deductible portion of non-significant minority investments
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+55
+Significant minority investments in tier 2 capital
+56a
+56b
+instruments issued by financial institutions that are not
+subject to consolidation
+Investments in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+X31
+Annual Report 2021
+279
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Item
+31 December
+2021
+31 December
+2020
+Reference
+56c
+57
+558,984
+76,140
+76,140
+31 December 2020
+Balance sheet
+under
+regulatory
+scope of
+consolidation*
+Equity
+Share capital
+Other equity instruments
+356,407
+356,407
+356,407
+356,407
+354,331
+354,331
+225,819
+225,819
+Capital reserve
+148,597
+148,597
+148,534
+148,534
+Other comprehensive income
+(18,343)
+(18,658)
+(10,428)
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+(10,178)
+scope of
+31 December 2020
+791,375
+798,127
+798,127
+Deferred tax liabilities
+5,624
+Other liabilities
+731,818
+Total liabilities
+31,896,125
+4,648
+508,191
+31,656,178
+2,881
+664,715
+30,435,543
+1,994
+483,519
+30,242,073
+(*)
+Prepared in accordance with PRC GAAP.
+Annual Report 2021
+281
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2021
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+consolidation*
+31 December 2021
+Balance sheet
+under
+regulatory
+791,375
+Surplus reserve
+356,849
+Loans and advances to customers
+31 December 2021
+Balance sheet
+under regulatory
+scope of
+consolidation
+20,107,266
+Reference
+Total loans and advances to customers
+20,711,030
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+24,545
+X01
+15,909
+X02
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+579,219
+X03
+232,865
+X04
+Financial investments
+Financial investments measured at FVTPL
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+282
+560,683
+206
+X05
+Item
+357,169
+(iii) Description of related items
+9,159
+2,900,481
+322,911
+322,692
+General reserve
+438,952
+438,640
+339,701
+339,486
+Retained profits
+1,620,642
+1,618,142
+1,510,558
+1,508,562
+Equity attributable to equity holders of the
+3,257,755
+3,254,308
+2,893,502
+2,891,322
+parent company
+Minority interests
+17,503
+9,805
+Total equity
+3,275,258
+3,264,113
+16,013
+2,909,515
+(*) Prepared in accordance with PRC GAAP.
+Debt securities issued
+105,356
+105,380
+― Financial investments measured at
+amortised cost
+6,830,933
+6,756,647
+6,265,668
+6,198,842
+Long-term equity investments
+61,782
+69,762
+41,206
+49,186
+Fixed assets
+270,017
+269,952
+249,067
+249,008
+Construction in progress
+18,182
+18,172
+35,173
+35,166
+Deferred tax assets
+Other assets
+79,259
+79,259
+67,713
+FVTOCI
+67,713
+1,498,008
+1,743,097
+134,155
+134,155
+Reverse repurchase agreements
+663,496
+662,544
+739,288
+738,958
+Loans and advances to customers
+20,109,200
+20,107,266
+18,136,328
+18,134,777
+Financial investments
+9,257,760
+9,060,427
+8,591,139
+8,429,328
+-Financial investments measured at
+623,223
+560,683
+784,483
+732,478
+FVTPL
+― Financial investments measured at
+1,803,604
+1,540,988
+443,997
+430,485
+453,592
+140,973
+140,973
+Repurchase agreements
+365,943
+351,049
+293,434
+282,458
+Certificates of deposit
+290,342
+290,342
+335,676
+335,676
+Due to customers
+Employee benefits payable
+Taxes payable
+26,441,774
+26,441,774
+25,134,726
+25,134,726
+41,083
+40,659
+32,460
+32,073
+108,897
+108,871
+71,337
+71,337
+Derivative financial liabilities
+87,938
+440,548
+Total assets
+35,171,383
+34,920,291
+33,345,058
+33,142,554
+Liabilities
+Due to central banks
+39,723
+39,723
+54,974
+Due to banks and other financial institutions
+2,431,689
+2,315,643
+54,974
+2,315,643
+Placements from banks and other financial
+489,340
+489,340
+468,616
+468,616
+institutions
+Financial liabilities measured at FVTPL
+87,180
+87,180
+87,938
+2,431,689
+Item
+28
+ICBC
+Western China
+Fee and commission income
+148,727
+146,668
+2,059
+1.4
+Less: Fee and commission expense
+15,703
+15,453
+250
+1.6
+Net fee and commission income
+133,024
+131,215
+1,809
+1.4
+In 2021, the Bank's net fee and commission income was RMB133,024 million, an increase of RMB1,809 million over last
+year. Specifically, income from settlement, clearing business and cash management increased by RMB2, 169 million, mainly
+driven by the growth of third party payment business income; income from investment banking business registered an
+increase of RMB956 million, mainly due to the income increase from securitization service etc.; asset custody business
+income increased by RMB1,193 million, principally attributable to the increasing income from mutual fund custody business.
+The Bank adhered to the business transformation and implemented the policy of fee reduction and profit concessions,
+resulting in the income decrease on bank card, corporate wealth management, guarantee and commitment businesses.
+Annual Report 2021
+25
+Discussion and Analysis
+Other Non-Interest Related Gains
+In RMB millions, except for percentages
+Increase/
+Growth rate
+Item
+2021
+(4.7)
+2020
+(143)
+2,894
+16,679
+18,623
+(1,944)
+(10.4)
+Corporate wealth management services
+15,165
+15,554
+(389)
+(2.5)
+Guarantee and commitment business
+9,756
+10,101
+(345)
+(3.4)
+Asset custody business
+8,738
+7,545
+1,193
+15.8
+Trust and agency services
+1,808
+1,617
+191
+11.8
+Other
+3,037
+Bank card business
+(decrease)
+Net trading income
+183,716
+0.9
+187,316
+Personal consumption loans
+30.8
+5,728,315
+30.8
+6,362,685
+Residential mortgages
+38.2
+7,115,279
+38.4
+7,944,781
+Personal loans
+2.2
+406,296
+2.6
+527,758
+Discounted bills
+45.4
+8,459,521
+45.8
+9,456,964
+Medium to long-term corporate loans
+14.2
+0.9
+(%)
+Personal business loans
+3.4
+8,955
+2,222
+6,733
+303.0
+Net gains on financial investments
+16,440
+11,829
+4,611
+39.0
+Other operating income, net
+11,781
+8,044
+3,737
+100.0
+18,624,308
+100.0
+20,667,245
+Total
+3.7
+681,610
+3.3
+692,339
+Credit card overdrafts
+2.8
+521,638
+702,441
+2,643,212
+4.5
+21,460
+4,929,388
+121,230
+2.46
+4,757,009
+111,977
+2.35
+Demand deposits
+7,133,857
+58,618
+0.82
+Subtotal
+12,063,245
+179,848
+1.49
+6,787,204
+11,544,213
+53,752
+0.79
+165,729
+1.44
+Personal deposits
+Time deposits
+6,337,635
+Demand deposits
+5,091,927
+Subtotal
+Time deposits
+11,429,562
+Corporate deposits
+Average cost
+2.66
+Total loans and
+19,996,414
+832,136
+4.16
+17,979,409
+766,407
+4.26
+advances to customers
+Interest Income on Investment
+Interest income on investment amounted to RMB262,827 million, representing an increase of RMB19,282 million or 7.9% as
+compared to that of last year, mainly due to the increased scale in investment.
+Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from banks and other financial institutions was RMB25,228 million, representing a decrease of
+RMB15,319 million or 37.8% as compared to that of last year, principally due to the factors such as reduced lending size
+and low interest rate environment.
+Interest Expense
+Interest Expense on Deposits
+Interest expense on deposits amounted to RMB397,625 million, representing an increase of RMB33,452 million or 9.2%
+over the previous year, principally due to the expansion in the size of due to customers.
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+2021
+Item
+Average
+balance
+Interest
+expense
+Average cost
+(%)
+Average
+balance
+In RMB millions, except for percentages
+2020
+Interest
+expense
+(%)
+956
+189,118
+18,678
+207,796
+167,153
+Interest Expense on Debt Securities Issued
+Interest expense on debt securities issued was RMB29,526 million, indicating a decrease of RMB580 million or 1.9% over
+last year. Please refer to "Note 35. to the Consolidated Financial Statements: Debt Securities Issued" for the debt securities
+issued by the Bank.
+Non-interest Income
+In 2021, non-interest income was RMB170,200 million, RMB16,890 million or 11.0% higher than that of last year,
+accounting for 19.8% of the operating income. Specifically, net fee and commission income increased by 1.4% to
+RMB133,024 million, and other non-interest related gains rose by 68.3% to RMB37,176 million.
+Net Fee and Commission Income
+Item
+2021
+2020
+In RMB millions, except for percentages
+Increase/
+(decrease)
+Growth rate
+(%)
+Settlement, clearing business and
+41,270
+39,101
+2,169
+5.5
+cash management
+Personal wealth management and
+30,001
+29,630
+371
+1.3
+private banking services
+Investment banking business
+22,416
+Interest expense on due to banks and other financial institutions was RMB44,387 million, RMB7,090 million or 13.8% lower
+than that of last year, principally attributable to the decline in cost as affected by the factors such as market interest rates
+and product maturities.
+2.98 5,723,692
+Interest Expense on Due to Banks and Other Financial Institutions
+ICBC
+2.92
+0.37
+4,509,984
+17,243
+0.38
+1.82
+10,233,676
+184,396
+1.80
+Overseas business
+984,304
+9,981
+1.01
+892,484
+14,048
+1.57
+Total deposits
+24,477,111
+397,625
+1.62
+22,670,373
+364,173
+1.61
+24
+24
+Discussion and Analysis
+38,979
+13.2
+Short-term corporate loans
+145,660
+Bohai Rim
+12.9
+102,902
+12.5
+107,474
+Pearl River Delta
+16.3
+130,424
+15.9
+136,544
+Yangtze River Delta
+13.5
+107,705
+15.8
+135,419
+Head Office
+100.0
+800,075
+100.0
+860,880
+Operating income
+(%)
+Amount
+(%)
+16.9
+Amount
+145,927
+Central China
+Head Office
+100.0
+392,126
+100.0
+424,899
+Profit before taxation
+7.6
+60,588
+8.6
+74,045
+Overseas and other
+4.0
+32,342
+3.4
+29,582
+Northeastern China
+15.2
+121,336
+14.7
+126,799
+46.5
+12.4
+98,851
+12.2
+105,357
+18.1
+58,031
+Item
+Percentage
+Amortisation
+9.3
+794
+8,524
+9,318
+Taxes and surcharges
+3.1
+862
+27,960
+28,822
+Property and equipment expenses
+10.1
+12,791
+126,572
+139,363
+Staff costs
+(%)
+In RMB millions, except for percentages
+Increase/ Growth rate
+(decrease)
+2020
+2021
+Item
+Operating Expenses
+Other non-interest related gains amounted to RMB37,176 million, RMB15,081 million or 68.3% higher than that of the
+previous year. Specifically, the increase in net trading income was mainly attributable to the increase in gains on derivative
+financial instruments; the increase in net gains on financial investments was primarily due to the increase in gains on equity
+instruments and bond investments; and the increase in other net operating income was mainly because of the increase in net
+gains on exchange and exchange rate products.
+68.3
+15,081
+3,125
+Percentage
+2,607
+19.9
+2021
+2020
+In RMB millions, except for percentages
+Discussion and Analysis
+Summary Geographical Segment Information
+ICBC
+Total
+26
+Income tax expense increased by RMB242 million or 0.3% to RMB74,683 million as compared to the previous year. The
+effective tax rate stood at 17.58%. Please see "Note 15. to the Consolidated Financial Statements: Income Tax Expense" for
+the reconciliation of income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective
+income tax expense.
+Income Tax Expense
+Share of results of associates and joint ventures stood at RMB2,869 million, representing an increase of RMB1,565 million
+or 120.0% over last year, mainly due to the increase in the Bank's share of results from Standard Bank, an associate of the
+Bank.
+Share of Results of Associates and Joint Ventures
+In 2021, the Bank set aside the impairment losses on assets of RMB202,623 million, a decrease of RMB45 million as
+compared to that of last year. Specifically, the impairment losses on loans was RMB168,267 million, indicating a decrease
+of RMB3,563 million or 2.1%. Please refer to "Note 23. to the Consolidated Financial Statements: Loans and Advances to
+Customers; Note 14. to the Consolidated Financial Statements: Impairment Losses on Assets" for details.
+Impairment Losses on Assets
+In 2021, operating expenses amounted to RMB236,227 million, an increase of RMB29,642 million or 14.3% over last year.
+14.3
+29,642
+206,585
+236,227
+35.9
+14,677
+40,922
+55,599
+Total
+Other
+518
+2,737,742
+13.6
+8.7
+Total assets
+Other
+Reverse repurchase agreements
+financial institutions
+3.2
+1,081,897
+2.4
+827,150
+Due from banks and other
+10.6
+3,537,795
+8.8
+3,098,438
+Cash and balances with central banks
+25.8
+8,591,139
+26.3
+9,257,760
+54.4
+18,136,328
+57.2
+20,109,200
+Net loans and advances to customers(1)
+Investment
+Percentage
+(%)
+530,300
+663,496
+42,320
+1.9
+2.2
+59.6
+(%)
+Amount
+11,102,733
+59.0
+(%)
+Amount
+12,194,706
+Corporate loans
+Item
+Percentage
+Percentage
+In RMB millions, except for percentages
+At 31 December 2020
+At 31 December 2021
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+and grasped the development opportunities of green
+finance comprehensively. It mainly supported the state's
+food security, stable production and supply of important
+agricultural products, transformation and upgrading
+of agricultural industries and integrated development
+of industrial chains. As at the end of 2021, total loans
+amounted to RMB20,667,245 million, RMB2,042,937
+million or 11.0% higher compared with the end of the
+previous year, of which RMB denominated loans of
+domestic branches were RMB18,929,925 million, up by
+RMB2,124,707 million or 12.6%.
+The Bank continued to improve the quality and efficiency
+of serving the real economy, actively supported the
+construction of ongoing infrastructure projects and major
+projects for making up shortcomings, and implemented
+strategic arrangements such as new urbanization initiatives
+and building a country with strong transportation
+network. It fully supported the high-quality development
+of the manufacturing industry, served the state's energy
+supply security and low-carbon transformation strategy,
+Loan
+Note: (1) Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers".
+100.0
+33,345,058
+100.0
+35,171,383
+3.8
+1,258,611
+3.4
+1,215,339
+739,288
+34,092
+Amount
+18,624,308
+603,764
+17.0
+66,598
+15.4
+65,477
+Western China
+10.9
+42,655
+11.1
+47,115
+Central China
+19.4
+76,322
+15.2
+64,383
+Bohai Rim
+17.2
+67,383
+14.1
+59,699
+Pearl River Delta
+19.2
+75,295
+19.8
+83,920
+Yangtze River Delta
+Northeastern China
+(%)
+1,259
+2,593
+45,719
+20,667,245
+Amount
+Percentage
+At 31 December 2021
+At 31 December 2020
+In RMB millions, except for percentages
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+Add: Accrued interest
+Total loans and advances to customers
+Item
+Discussion and Analysis
+27
+Annual Report 2021
+As at the end of 2021, total assets of the Bank amounted
+to RMB35,171,383 million, RMB1,826,325 million or
+5.5% higher than that at the end of the previous year.
+Specifically, total loans and advances to customers
+(collectively referred to as "total loans") increased by
+RMB2,042,937 million or 11.0% to RMB20,667,245
+million, investment increased by RMB666,621 million or
+7.8% to RMB9,257,760 million, and cash and balances
+with central banks decreased by RMB439,357 million or
+12.4% to RMB3,098,438 million.
+Assets Deployment
+In 2021, in response to the changes in external
+development trends, the Bank earnestly implemented
+macro-economic and financial policies and regulatory
+requirements, and continued to enhance the foresight,
+scientificity and initiative of asset and liability management,
+and appropriately arranged the aggregate amount,
+structure and pace of assets and liabilities. While
+maintaining a moderate growth of the total assets and
+liabilities, the Bank earnestly followed the regulatory
+orientation, continued to promote liability quality
+management, and gradually established a liability quality
+management system that is commensurate with the
+development of liability business. Besides, it strived to
+cement the foundation for deposit development, and
+maintained steady development of liability business. The
+Bank deeply promoted the continuous optimization of the
+asset and liability structure and coordinated development
+of quantity and price, and enhanced the adaptability,
+competitiveness and inclusiveness of serving the real
+economy.
+Balance Sheet Analysis
+Note: Please see "Note 48. to the Consolidated Financial Statements: Segment Information" for details.
+6.9
+27,188
+10.5
+45,015
+Overseas and other
+0.7
+0.3
+22,095
+1,466,753
+32,723
+In 2021, net interest income was RMB690,680 million, RMB43,915 million or 6.8% higher than that of last year, accounting
+for 80.2% of the Bank's operating income. Interest income grew by RMB69,697 million or 6.4% to RMB1,162,218 million
+and interest expenses increased by RMB25,782 million or 5.8% to RMB471,538 million. Net interest spread and net interest
+margin ("NIM") came at 1.92% and 2.11% respectively, down 5 basis points and 4 basis points respectively from the
+previous year, mainly because the Bank continued to provide favorable fee policy for the real economy and further reduced
+the financing cost of enterprises.
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In RMB millions, except for percentages
+2020
+Interest
+2021
+Interest
+Average
+Net Interest Income
+income/ Average yield/
+balance
+expense
+cost (%)
+balance
+expense
+2.32
+Item
+Assets
+cost (%)
+Average
+Discussion and Analysis
+21
+Annual Report 2021
+350,216
+317,685
+32,531
+10.2
+Attributable to: Equity holders
+348,338
+315,906
+32,432
+10.3
+of the parent
+company
+33 Reconciliation of Differences
+between the Financial
+Statements Prepared
+under PRC GAAP and Those
+under IFRSS
+Non-controlling
+interests
+1,878
+1,779
+99
+5.6
+Loans and advances to customers
+0.3
+19,996,414
+4.16
+2.02
+financial institutions(3)
+Total interest-generating assets
+32,656,847
+1,162,218
+3.56
+30,055,472
+1,092,521
+40,547
+3.64
+2,659,895
+2,865,115
+Allowance for impairment losses on
+(574,932)
+(506,316)
+assets
+Total assets
+34,741,810
+Non-interest-generating assets
+2,003,882
+1.42
+25,228
+17,979,409
+766,407
+4.26
+Investment
+7,999,530
+262,827
+3.29
+7,223,638
+243,545
+3.37
+Due from central banks (2)
+2,888,381
+42,027
+1.46
+2,848,543
+42,022
+1.48
+Due from banks and other
+1,772,522
+832,136
+242
+74,441
+74,683
+•
+Operating Expenses
+• Impairment Losses on
+Assets
+• Share of Results of
+Associates and Joint
+Ventures
+• Income Tax Expense
+•
+Summary Geographical
+Segment Information
+27 Balance Sheet Analysis
+• Non-interest Income
+• Assets Deployment
+• Liabilities
+Income Statement Analysis
+In 2021, facing the complicated and tough business environment, the
+Bank maintained sound business quality, constantly elevated the quality
+and efficiency of financial services, and further improved its capability in
+balancing and coordinating sustainable development. In the year, the Bank
+realized a net profit of RMB350,216 million, representing an increase of
+RMB32,531 million or 10.2% as compared to the previous year. Return
+on average total assets stood at 1.02%, and return on weighted average
+equity was 12.15%. Operating income amounted to RMB860,880 million,
+representing an increase of 7.6%, of which, net interest income grew
+by 6.8% to RMB690,680 million; non-interest income was RMB170,200
+million, up by 11.0%. Operating expenses amounted to RMB236,227
+million, representing an increase of 14.3%, and the cost-to-income ratio
+was 26.36%. Impairment losses on assets were RMB202,623 million.
+Income tax expense rose by 0.3% to RMB74,683 million.
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In RMB millions, except for percentages
+Increase/ Growth rate
+Item
+2021
+2020
+• Shareholders' Equity
+• Interest Expense
+• Interest Income
+• Net Interest Income
+Discussion and Analysis
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+In 2021, the global economy recovered on the whole, but
+in the second half of the year, affected by the impact of
+the epidemic, energy shortage, supply chain bottleneck
+and other factors, the economic recovery momentum
+witnessed marginal slowdown and rising inflation. The
+monetary policy shift of major developed economies
+accelerated, with increasing fluctuation in the international
+financial market.
+China's economy continued to recover steadily. In 2021,
+China's gross domestic product (GDP), retail sales of
+consumer goods, fixed asset investment (excluding rural
+households), industrial added value of enterprises above
+designated size, and total (RMB-denominated) imports
+and exports of trade in goods rose by 8.1%, 12.5%,
+4.9%, 9.6% and 21.4% year on year respectively, while
+consumer price index (CPI) increased mildly by 0.9% year
+on year.
+Proactive fiscal policy was implemented to improve quality
+and efficiency. China deepened the reform of the fiscal
+and tax systems, carried out the tax and fee reduction
+policy, optimized the management of special bonds of
+local governments, and improved the regular mechanism
+for targeted allocation of fiscal funds. It continuously
+increased investment in science and technology and
+people's livelihood, and stabilized the industrial chain and
+supply chain. Moreover, China promoted coordinated
+development between urban and rural areas, and
+supported the effective link between the achievements of
+poverty alleviation and rural revitalization.
+The prudent monetary policy was flexible, targeted and
+appropriate. PBC maintained reasonable and adequate
+liquidity by comprehensive use of various tools such as
+reserve requirement ratio (RRR) cut and structural policies.
+It created tools supporting carbon emission reduction,
+launched special relending for clean and efficient utilization
+of coal, and made good use of relending for supporting
+agriculture and small enterprises and two directly targeting
+instruments, to strengthen support for key areas such as
+scientific and technological innovation, manufacturing,
+small and micro enterprises and green development.
+By playing a role of the Loan Prime Rate (LPR), PBC
+pushed forward to reduce comprehensive financing cost
+of enterprises while maintaining it at an overall stable
+level, and optimized the method of determining the self-
+disciplined capping of deposit interest rate, to improve the
+freedom and accuracy of independent pricing of deposit
+interest rate of commercial banks and promote orderly
+competition in the industry. Besides, PBC deepened the
+market-oriented reform of exchange rates and kept the
+flexibility of RMB exchange rates.
+Annual Report 2021
+19
+Discussion and Analysis
+Regulatory policies have
+supported high-quality
+development. The real estate loan concentration
+management, green finance evaluation plan, education
+opinion of "easing the burden of excessive homework and
+off-campus tutoring for students undergoing compulsory
+education" and measures for regulating the economic
+development of internet platforms were promulgated and
+implemented to prevent risks and monopolies in promoting
+development. The Guidelines on Macro Prudential Policies
+(Trial), the Measures for Regulatory Rating of Commercial
+Banks and the Additional Regulation on Systemically
+Important Banks (Trial) were successively issued to enhance
+risk management capability and prudential operation
+of banks. The Guidelines on Corporate Governance of
+Banking and Insurance Institutions and other regulations
+were issued to strengthen shareholder equity supervision
+and regulate the performance of directors and supervisors.
+The pilot program of pension wealth management
+products was launched, and relevant policies on equity-
+convertible capital bonds were improved to support capital
+replenishment of small and medium-sized banks.
+The financial system ran smoothly. At the end of 2021,
+the balance of broad money supply (M2) was RMB238.3
+trillion, up 9.0% year on year. The existing social financing
+scale size stood at RMB314.1 trillion, up 10.3% year on
+year. The outstanding RMB loans reached RMB192.7
+trillion, increasing by 11.6% year on year. The balance
+of RMB deposits amounted to RMB232.3 trillion, up
+9.3% year on year. The total issuance amount of various
+bonds in the bond market reached RMB61.4 trillion, up
+7.8% year on year. The stock market index fluctuated
+upward, with the Shanghai Composite Index and the
+Shenzhen Component Index increasing by 4.8% and
+2.7% respectively over the end of last year. The central
+parity of RMB against the US dollar was RMB6.3757, an
+appreciation of 2.3% from the end of last year.
+The asset scale of commercial banks grew steadily,
+with continuously improving asset quality, stronger
+risk offsetting capacity, robust profitability and steadily
+enhanced global competitiveness. At the end of 2021,
+the RMB and foreign-currency assets of commercial banks
+totaled RMB288.6 trillion, up 8.6% year on year. The
+balance of NPLs reached RMB2.8 trillion, with a NPL ratio
+of 1.73% and allowance to NPLs of 196.9%. The capital
+adequacy ratio was 15.13%. Specifically, the RMB and
+foreign-currency assets of large commercial banks totaled
+RMB138.4 trillion, accounting for 48.0%. The balance of
+NPLs of large commercial banks reached RMB1.1 trillion,
+with a NPL ratio of 1.37% and allowance to NPLs of
+239.2%. The capital adequacy ratio was 17.29%. Among
+the Top 1000 World Banks 2021 by The Banker, six major
+state-owned commercial banks ranked in the top 15.
+In 2021, ICBC steadily pushed forward the strategic
+pattern of "bringing out our strengths to make up for
+our weaknesses and laying a solid foundation and base",
+reinforced the working method of "Three Comparisons,
+Three Reviews and Three Improvements" and achieved
+operating results of making progress while maintaining
+stability and improving quality. The Bank continued
+to consolidate its scale advantage, and ranked first in
+the industry in terms of asset scale, green loans, loans
+to strategic emerging industries, balance of loans to
+manufacturing and balance of deposits. The Bank
+continued to enhance its profitability, and maintained a
+leading position among peers in terms of income scale and
+total profit. Asset quality continued to be consolidated and
+the risk offsetting capacity continued to be enhanced. The
+Bank maintained its advantage in international influence,
+ranking the 1st place among the Top 1000 World Banks by
+The Banker, the 1st place in the Global 2000 by Forbes, and
+the 1st place in the list of commercial banks of the Global
+500 in Fortune for the ninth consecutive year.
+20
+ICBC
+FINANCIAL STATEMENTS ANALYSIS
+Discussion and Analysis
+21 Income Statement Analysis
+(decrease)
+(%)
+Net interest income
+690,680
+Operating profit
+422,030
+390,822
+31,208
+8.0
+Share of results of associates and
+2,869
+1,304
+1,565
+120.0
+• Off-balance Sheet Items
+joint ventures
+Profit before taxation
+424,899
+392,126
+32,773
+8.4
+33 Analysis on Statement of
+Cash Flows
+Less: Income tax expense
+Net profit
+(0.0)
+32,414,271
+(45)
+202,623
+646,765
+43,915
+6.8
+Non-interest income
+170,200
+153,310
+16,890
+11.0
+Operating income
+860,880
+800,075
+60,805
+7.6
+Less: Operating expenses
+236,227
+206,585
+29,642
+14.3
+Less: Impairment losses on assets
+202,668
+Liabilities
+income/ Average yield/
+24,477,111
+4,045,145
+142,549
+3.52
+3,934,831
+143,043
+3.64
+Medium to long-term loans
+15,951,269
+Short-term loans
+689,587
+14,044,578
+623,364
+4.44
+Total loans and
+19,996,414
+832,136
+4.16
+17,979,409
+4.32
+(%)
+Average yield
+Interest
+income
+25,782
+Changes in net interest income
+68,928
+(25,013)
+43,915
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+Interest Income
+Interest Income on Loans and Advances to Customers
+Interest income on loans and advances to customers was RMB832,136 million, RMB65,729 million or 8.6% higher as
+compared to that of last year, mainly due to the increase in the size of loans and advances to customers.
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+In RMB millions, except for percentages
+Item
+Average
+balance
+2021
+Interest
+income
+2020
+Average yield
+Average
+(%)
+balance
+766,407
+4.26
+advances to customers
+Annual Report 2021
+9,461,995
+400,605
+4.23
+Discounted bills
+380,678
+10,266
+2.70
+443,764
+11,883
+2.68
+Personal loans
+7,415,770
+349,572
+4.71
+6,606,897
+314,940
+4.77
+Overseas business
+1,412,759
+4.08
+(11,338)
+439,575
+Corporate loans
+23
+Discussion and Analysis
+Deposits
+In RMB millions, except for percentages
+2021
+2020
+Average
+Interest
+Average yield
+Average
+Interest
+Average yield
+Item
+balance
+income
+(%)
+balance
+income
+(%)
+10,787,207
+37,120
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+(580)
+471,538
+1.64
+26,637,431
+445,756
+1.67
+Non-interest-bearing liabilities
+Total liabilities
+1,991,928
+30,829,623
+28,837,695
+2,114,998
+28,752,429
+690,680
+646,765
+Net interest spread
+1.92
+1.97
+Net interest margin
+2.11
+2.15
+Net interest income
+Total interest-bearing liabilities
+2.93
+30,106
+Changes in interest expenses
+397,625
+1.62
+22,670,373
+364,173
+1.61
+Due to banks and other
+3,287,917
+44,387
+1.35
+2,938,129
+51,477
+1.75
+financial institutions(3)
+Debt securities issued
+1,072,667
+29,526
+2.75
+1,028,929
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses on
+assets represent the average of the balances at the beginning of the year and at the end of the year.
+(2) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+37,176
+22
+Due from banks and other financial institutions
+(3,296)
+(12,023)
+(15,319)
+Changes in interest income
+106,048
+(36,351)
+69,697
+Deposits
+5
+31,185
+33,452
+Due to banks and other financial institutions
+4,663
+(11,753)
+(7,090)
+Debt securities issued
+1,272
+(1,852)
+(3) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements etc.
+2,267
+(570)
+Liabilities
+575
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+ICBC
+Item
+Assets
+Discussion and Analysis
+In RMB millions
+Volume
+Interest rate
+Net increase/
+(decrease)
+Comparison between 2021 and 2020
+Increase/(decrease) due to
+19,282
+83,708
+(17,979)
+65,729
+Investment
+25,061
+(5,779)
+Due from central banks
+Loans and advances to customers
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+No
+No
+No
+Non-cumulative
+No
+No
+N/A
+No
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Write-down feature
+No
+instrument it converts into
+4.45%
+convertible into
+Including: Fully discretionary,
+Mandatory
+4.20%
+No
+Mandatory
+4.15%
+N/A
+No
+Mandatory
+No
+Mandatory
+partially discretionary or
+mandatory cancellation of coupons/dividends
+Annual Report 2021
+297
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+Including: If convertible, conversion trigger(s)
+Including: If convertible, fully or partially
+Including: If convertible, conversion rate
+Including: If convertible, mandatory or
+optional conversion
+Including: If convertible, specify instrument type
+Including: If convertible, specify issuer of
+N/A
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+N/A
+Whichever occurs
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+N/A
+Yes
+Whichever occurs
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+Yes
+Whichever occurs
+Yes
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+non-viable
+Partial or full
+write-down
+non-viable
+Partial or full
+write-down
+Permanent write-down
+N/A
+N/A
+write-up mechanism
+298
+ICBC
+No
+4.69%
+without which the
+Issuer would become
+N/A
+Including: If write-down,
+Including: If temporary write-down,
+description of
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+N/A
+N/A
+NA
+N/A
+Including: If write-down, write-down trigger(s)
+Including: If write-down, full or partial
+Yes
+Whichever occurs
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+non-viable
+Partial or full
+write-down
+Permanent write-down
+permanent or temporary
+N/A
+Permanent write-down
+Fixed
+Issuer would become
+non-viable
+Partial or full
+write-down
+Main features of regulatory
+capital instrument
+Including: Post-transition
+Tier 2 capital bonds
+Tier 2 capital
+Tier 2 capital bonds
+Tier 2 capital
+Tier 2 capital bonds
+Tier 2 capital
+arrangement of Regulation
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Governing Capital of Commercial
+Including: Eligible to the parent
+company/group level
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Banks (Provisional)
+Original date of issuance
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Tier 2 capital
+Regulatory treatment
+Including: Transition arrangement
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+294
+ICBC
+No
+N/A
+No
+N/A
+Tier 2 capital
+Tier 2 capital bonds
+The Bank
+1928006
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Tier 2 capital bonds
+The Bank
+1928007
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Tier 2 capital bonds
+The Bank
+1928011
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Tier 2 capital
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Including: Optional call date, contingent call dates 25 March 2024, in full amount 25 March 2029, in full amount
+26 April 2024, in full amount
+and redemption amount
+Including: Subsequent call dates, if applicable
+N/A
+N/A
+N/A
+26 April 2029
+Yes
+Coupons/dividends
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+Including: If convertible, conversion trigger(s)
+Fixed
+4.26%
+Fixed
+4.51%
+Including: Fixed or floating dividend/coupon
+Yes
+Yes
+Issuer call (subject to prior supervisory approval)
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+RMB45,000
+RMB10,000
+RMB45,000
+RMB10,000
+RMB45,000
+RMB45,000
+Debt securities issued
+24 April 2019
+Dated
+Perpetual or dated
+Debt securities issued
+21 March 2019
+Dated
+Debt securities issued
+21 March 2019
+Dated
+Including: Original maturity date
+25 March 2029
+25 March 2034
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+capital instrument
+N/A
+N/A
+N/A
+convertible into
+Including: If convertible, specify issuer of
+N/A
+N/A
+Including: If convertible, specify instrument type
+N/A
+Write-down feature
+Including: If write-down, write-down trigger(s)
+Yes
+Whichever occurs earlier:
+Yes
+Including: If write-down, full or partial
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+instrument it converts into
+optional conversion
+N/A
+N/A
+Including: If convertible, conversion rate
+Including: If convertible, mandatory or
+Tier 2 capital bonds
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+No
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Issuer would become
+non-viable
+Partial or full
+write-down
+Fixed
+Yes
+Including: Existence of a dividend stopper
+Tier 2 capital bonds
+Subordinated to depositor and
+(specify instrument type immediately
+general creditor,
+senior to instrument)
+pari passu with other
+subordinated debts
+Tier 2 capital bonds
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+Position in subordination hierarchy in liquidation
+Tier 2 capital bonds
+Subordinated to depositor and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+Non-compliant transitioned features
+No
+Including: If yes, specify non-compliant features
+N/A
+Main features of regulatory
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full
+write-down
+Including: If write-down, permanent or temporary
+Permanent write-down
+Permanent write-down
+Permanent write-down
+Including: If temporary write-down,
+description of write-up mechanism
+N/A
+N/A
+N/A
+Annual Report 2021
+293
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+4.40%
+No
+No
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration of
+Financial Bond Issuance
+in China's Inter-bank
+Bond Market, as well
+as other applicable
+laws, regulations and
+normative documents
+Regulatory treatment
+Including: Transition arrangement
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Including: Post-transition
+The Bank
+2028050
+arrangement of Regulation
+Including: Eligible to the parent
+company/group level
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Governing Capital of Commercial
+Banks (Provisional)
+as other applicable
+laws, regulations and
+normative documents
+in China's Inter-bank
+Bond Market, as well
+and the Measures
+for Administration of
+Financial Bond Issuance
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Tier 2 capital bonds
+The Bank
+1928012
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration of
+Financial Bond Issuance
+in China's Inter-bank
+Bond Market, as well
+as other applicable
+laws, regulations and
+normative documents
+Tier 2 capital bonds
+The Bank
+2028041
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration of
+Financial Bond Issuance
+in China's Inter-bank
+Bond Market, as well
+as other applicable
+laws, regulations and
+normative documents
+Tier 2 capital bonds Tier 2 capital bonds
+The Bank
+2028049
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+Perpetual or dated
+ICBC
+Including: Original maturity date
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Debt securities issued
+12 November 2020
+Dated
+RMB10,000
+Debt securities issued
+24 April 2019
+Dated
+26 April 2034
+Yes
+Debt securities issued
+22 September 2020
+Dated
+24 September 2030
+Yes
+16 November 2030
+Yes
+amount
+N/A
+26 April 2029, in full 24 September 2025, in 16 November 2025, in
+full amount
+full amount
+RMB10,000
+16 November 2035
+Yes
+16 November 2030, in
+N/A
+N/A
+N/A
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed
+Fixed
+Fixed
+full amount
+instrument
+RMB10,000
+Debt securities issued
+12 November 2020
+Dated
+RMB30,000
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Parent company/Group Parent company/Group Parent company/Group Parent company/Group
+Tier 2 capital
+instrument
+RMB10,000
+Tier 2 capital
+instrument
+RMB60,000
+RMB60,000
+Tier 2 capital
+Tier 2 capital
+instrument
+RMB30,000
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+Including: If convertible, conversion trigger(s)
+Including: If convertible, fully or partially
+296
+No
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+Annual Report 2021
+295
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+N/A
+No
+Non-cumulative
+Non-cumulative
+No
+Mandatory
+Mandatory
+Mandatory
+Including: If convertible, fully or partially
+Including: If convertible, conversion rate
+Including: If convertible, mandatory or
+optional conversion
+Including: If convertible, specify instrument type
+N/A
+N/A
+N/A
+convertible into
+No
+No
+No
+Non-cumulative
+(In RMB millions, unless otherwise stated)
+N/A
+Main features of regulatory
+Including: If convertible, specify issuer of
+Partial or full
+write-down
+Permanent write-down
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description
+of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+non-viable
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+No
+N/A
+N/A
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+No
+N/A
+Issuer would become
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+instrument it converts into
+Write-down feature
+Including: If write-down, write-down trigger(s)
+Tier 2 capital bonds
+Tier 2 capital bonds
+Tier 2 capital bonds
+N/A
+N/A
+N/A
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+N/A
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+N/A
+Yes
+capital instrument
+Convertible or non-convertible
+N/A
+Main features of regulatory
+Governing Capital of Commercial
+Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Parent company/Group
+Additional tier 1 capital
+instrument
+RMB69,992
+Parent company/Group
+Additional tier 1 capital
+instrument
+Additional tier 1 capital
+RMB70,000
+Other equity
+USD6,160
+Other equity
+Amount recognised in regulatory
+capital (in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+RMB equivalent 39,742
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+arrangement of Regulation
+Undated additional tier 1
+capital bonds (Domestic)
+The Bank
+2128021
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents/China
+Undated additional tier 1
+capital bonds (Offshore)
+The Bank
+Regulation S
+ISIN: XS2383421711
+The Notes and any other non-
+contractual obligations arising
+out of or in connection with
+them shall be governed by
+and construed in accordance
+with English law. However,
+the provisions in the terms
+and conditions of the Notes
+relating to subordination of
+the Notes shall be governed by
+and construed in accordance
+with PRC law and regulations
+Undated additional tier 1
+capital bonds (Domestic)
+The Bank
+2128044
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents/China
+Additional tier 1 capital
+Additional tier 1 capital
+Including: Original maturity date
+Including: Post-transition
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent call dates
+and redemption amount
+4 June 2021
+Perpetual
+No maturity date
+Yes
+290
+ICBC
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Coupons/dividends
+regulatory rules
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+partially discretionary or
+mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+Including: If convertible, conversion trigger(s)
+Including: If convertible, fully or partially
+Undated additional tier 1
+capital bonds (Domestic)
+Fixed to floating
+Including: Existence of a dividend stopper
+Including: Fully discretionary,
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+Date (26 November 2026).
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+capital after
+they are issued due to
+unpredictable changes in
+capital instrument
+No maturity date
+Yes
+The First Redemption Date is
+The First Redemption
+Date is 8 June 2026,
+in full or partial amount
+Redemption of present bonds
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+Date (8 June 2026).
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+capital after
+they are issued due to
+unpredictable changes in
+regulatory rules
+24 September 2021
+Perpetual
+No maturity date
+Yes
+The First Redemption Date is
+24 September 2026,
+in full or partial amount
+Redemption of present bonds
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+Date (24 September 2026).
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+capital after
+they are issued due to
+unpredictable changes in
+regulatory rules
+Parent company/Group
+Additional tier 1 capital
+instrument
+RMB29,997
+RMB30,000
+Other equity
+24 November 2021
+Perpetual
+Including: Subsequent call dates, if applicable
+4.04% (interest rate) before
+8 June 2026
+Yes
+of Commercial Banks (Provisional)
+Regulatory treatment
+Including: If write-down, full or partial
+Mandatory
+Core tier 1 capital
+Core tier 1 capital
+N/A
+The Bank
+The Bank
+Including: If write-down, write-down trigger(s)
+N/A
+No
+Yes
+N/A
+N/A
+Additional Tier 1 Capital
+Trigger Event or Tier 2 Capital
+Trigger Event
+No
+Write-down feature
+issuer of instrument it converts into
+Including: If convertible, specify
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: If convertible, conversion rate
+Preference shares
+(Domestic)
+The initial conversion price is
+equal to the
+average trading price of the
+A shares of the Bank for the
+20 trading days preceding
+30 August 2018, the date
+of publication of the Board
+resolution in respect of the
+issuance plan
+Mandatory
+Preference shares
+(Offshore)
+The initial conversion price is
+equal to the average trading
+price of the H shares of the
+Bank for the 20 trading days
+preceding 30 August 2018,
+the date of publication of the
+Board resolution in respect of
+the issuance plan
+Undated additional tier 1
+capital bonds (Domestic)
+N/A
+N/A
+Including: If convertible, mandatory or
+optional conversion
+Including: If convertible, specify
+instrument type convertible into
+N/A
+Including: Transition arrangement
+of Regulation Governing Capital
+N/A
+write-down when an
+N/A
+capital bonds
+No
+No
+N/A
+N/A
+Annual Report 2021
+capital bonds
+No
+289
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+general debts, subordinated
+debts and tier 2 capital bonds
+Additional Tier 1 Capital
+Trigger Event occurs; full write-
+down when a Tier 2 Capital
+Trigger Event occurs
+Permanent write-down
+Including: If write-down, permanent
+or temporary
+Including: If temporary write-down,
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+N/A
+N/A
+Subordinated to deposits,
+general debts, subordinated
+debts, tier 2 capital bonds
+and undated additional tier 1
+N/A
+N/A
+Subordinated to deposits,
+general debts, subordinated
+debts, tier 2 capital bonds
+and undated additional tier 1
+N/A
+Subordinated to deposits,
+Full or partial
+Fully discretionary
+26 November 2026
+in full or partial amount
+Redemption of present bonds
+Fixed to floating
+3.20% (interest rate) before
+24 September 2026
+Banks (Provisional)
+Including: Eligible to the parent
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Governing Capital of Commercial
+Tier 2 capital instrument
+company/group level
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+RMB equivalent 10,127
+Including: Original maturity date
+Undated additional tier 1
+capital bonds (Offshore)
+Tier 2 capital
+Tier 2 capital bonds
+The Bank
+1728021
+Tier 2 capital bonds
+The Bank
+1728022
+Rule 144A
+ISIN: US455881AD47
+Regulation S
+ISIN: USY39656AC06
+The Notes and the Fiscal
+Agency Agreement shall be
+governed by, and shall be
+construed in accordance with
+New York law, except that
+the provisions of the Notes
+relating to subordination shall
+be governed by, and construed
+in accordance with PRC law
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Tier 2 capital
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+of Commercial Banks (Provisional)
+Including: Post-transition
+Tier 2 capital
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+4.875%
+Fixed
+4.45%
+Fixed
+4.45%
+No
+Mandatory
+No
+Mandatory
+No
+Fixed
+Mandatory
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+No
+amount
+N/A
+Yes
+22 November 2022, in full
+8 November 2022, in full
+amount
+N/A
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+292
+ICBC
+USD2,000
+Debt securities issued
+21 September 2015
+Dated
+RMB44,000
+RMB44,000
+Debt securities issued
+6 November 2017
+Dated
+RMB44,000
+RMB44,000
+Debt securities issued
+20 November 2017
+Dated
+21 September 2025
+No
+8 November 2027
+Yes
+22 November 2027
+N/A
+N/A
+Tier 2 capital bonds
+The Bank
+Including: Transition arrangement
+of Regulation Governing Capital
+arrangement of Regulation
+Governing law(s) of the instrument
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+optional conversion
+Including: If convertible, specify instrument
+type convertible into
+Including: If convertible, specify issuer of
+instrument it converts into
+Write-down feature
+Including: If write-down, write-down trigger(s)
+Including: If convertible, mandatory or
+N/A
+Regulatory treatment
+N/A
+Yes
+Fully discretionary
+Undated additional tier 1
+capital bonds (Domestic)
+Fixed to floating
+3.65% (interest rate) before
+26 November 2026
+Yes
+Fully discretionary
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+N/A
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+N/A
+N/A
+Subordinated to deposits,
+general debts, subordinated
+debts and tier 2 capital bonds
+No
+No
+No
+N/A
+N/A
+Annual Report 2021
+291
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Issuer
+Unique identifier
+N/A
+Subordinated to deposits,
+general debts, subordinated
+debts and tier 2 capital bonds
+Subordinated to deposits,
+general debts, subordinated
+debts and tier 2 capital bonds
+N/A
+N/A
+N/A
+N/A
+Yes
+Non-viability Trigger Event
+Full or partial write-down
+when a Non-viability Trigger
+Event occurs
+Permanent write-down
+N/A
+Yes
+Non-viability Trigger Event
+Full or partial write-down
+when a Non-viability Trigger
+Event occurs
+Permanent write-down
+N/A
+N/A
+Non-viability Trigger Event
+Full or partial write-down
+when a Non-viability Trigger
+Event occurs
+Permanent write-down
+N/A
+Including: If temporary write-down,
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Non-compliant transitioned features
+Yes
+Including: If yes, specify non-compliant features
+Tier 2 capital
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+The Bank
+2128052
+Governed by the Commercial
+Banking Law of the People's
+Including: Transition arrangement of
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Main features of regulatory capital instrument
+Issuer
+Tier 2 capital bonds
+The Bank
+2128051
+Governed by the Commercial
+Banking Law of the People's
+The Bank
+2128002
+Tier 2 capital bonds
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+N/A
+Tier 2 capital
+Tier 2 capital bonds
+Tier 2 capital
+capital (in millions, as at the
+Capital of Commercial Banks (Provisional)
+No
+latest reporting date)
+Amount recognised in regulatory
+Instrument type
+company/group level
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Including: Eligible to the parent
+Banks (Provisional)
+Governing Capital of Commercial
+arrangement of Regulation
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Including: Post-transition
+Regulation Governing
+present bonds
+Par value of instrument (in millions)
+passu with other tier
+2 capital instruments
+that will possibly be
+issued in the future and
+subordinated debts
+instruments and
+hybrid capital bonds;
+pari passu with other
+Subordinated to
+depositor and general
+creditor; but senior
+to equity capital,
+additional tier 1 capital
+Tier 2 capital bonds
+No
+N/A
+present bonds
+are pari passu with the
+instruments and
+hybrid capital bonds;
+pari passu with other
+subordinated debts
+that have been issued
+by the Issuer and are
+pari passu with the
+present bonds; and pari
+passu with other tier
+2 capital instruments
+that will possibly be
+issued in the future and
+that have been issued
+Subordinated to
+depositor and general
+creditor; but senior
+to equity capital,
+additional tier 1 capital
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+(specify instrument type immediately
+senior to instrument)
+Position in subordination hierarchy in liquidation
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Tier 2 capital bonds
+by the Issuer and are
+pari passu with the
+present bonds; and pari
+passu with other tier
+2 capital instruments
+by the Issuer and are
+pari passu with the
+present bonds; and pari
+subordinated debts
+that have been issued
+instruments and
+hybrid capital bonds;
+pari passu with other
+to equity capital,
+additional tier 1 capital
+Tier 2 capital bonds
+Subordinated to
+depositor and general
+creditor; but senior
+No
+N/A
+present bonds
+are pari passu with the
+that will possibly be
+issued in the future and
+passu with other tier
+2 capital instruments
+pari passu with the
+present bonds; and pari
+by the Issuer and are
+that have been issued
+subordinated debts
+instruments and
+hybrid capital bonds;
+pari passu with other
+Tier 2 capital bonds
+Subordinated to
+depositor and general
+creditor; but senior
+to equity capital,
+additional tier 1 capital
+No
+N/A
+present bonds
+that will possibly be
+issued in the future and
+are pari passu with the
+are pari passu with the
+Accounting treatment
+No maturity
+RMB30,000
+20
+20
+Loans to retail and
+2,285,305
+2,251,951
+9,481,714
+10,237,311
+small business customers,
+non-financial institutions,
+sovereigns, central banks and
+PSES, of which:
+21
+With a risk weight of
+387,544
+380,370
+292,979
+562,690
+less than or equal to 35%
+under the Basel II
+standardised approach for
+credit risk
+22
+23
+22
+Residential mortgages, of which:
+With a risk weight of
+1,811
+428
+2,854
+426
+financial institutions
+and unsecured loans to
+secured by non-Level 1 HQLA
+Loans to financial institutions
+Required stable funding (RSF) item
+Total NSFR high-quality
+928,319
+liquid assets (HQLA)
+16
+Deposits held at
+169,469
+47,218
+2,362
+828
+110,594
+other financial institutions for
+operational purposes
+6,174,334
+16,370
+17
+1,204
+18
+Loans to financial institutions
+3,989,223
+474,018
+2,716,285
+177
+16,646,113
+1,589
+16,962,615
+72,037
+869,764
+338,972
+150,690
+450,640
+secured by Level 1 HQLA
+19
+Loans and securities:
+5,248,281
+12,105
+less than or equal to 35%
+under the Basel II
+Assets posted as initial margin for
+338,265
+46,394
+398,452
+33,460
+127,440
+767,339
+39,435
+35,643
+30,297
+derivative contracts and
+contributions to
+default funds of CCPs
+29
+28
+23
+30
+NSFR derivative liabilities with
+63,978
+18,076
+50,086*
+10,017
+additional variation margin
+posted
+31
+All other assets not included
+291,871
+398,452
+33,460
+NSFR derivative assets
+15
+including gold
+27
+standardised approach for
+credit risk
+Annual Report 2021
+305
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+No.
+Item
+24
+Securities that are not in
+default and do not qualify as
+HQLA, including
+exchange-traded equities
+Physical traded commodities,
+30 September 2021
+No maturity
+1,204
+< 6 months
+358,325
+6 months to
+< 1 year
+≥ 1 year
+122,331
+837,786
+Weighted
+value
+954,346
+25
+Assets with matching
+interdependent liabilities
+225
+26
+Other assets:
+Unweighted value
+27,819
+24,374,604
+14
+Net Stable Funding Ratio (%)
+247,195
+19,262,629
+126.20%
+(*)
+The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+304
+ICBC
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+30 September 2021
+Unweighted value
+Item
+1
+Capital:
+2
+No.
+Available stable funding (ASF) item
+Regulatory capital
+No maturity
+< 6 months
+6 months to
+< 1 year
+≥ 1 year
+Weighted
+value
+3,379,104
+358,573
+3,379,104
+358,573
+3,737,677
+3,737,677
+3
+34
+Total RSF
+33
+8,033,526
+28
+Assets posted as initial margin for
+4,638
+3,942
+29
+2
+30
+derivative contracts and
+contributions to
+default funds of CCPs
+NSFR derivative assets
+NSFR derivative liabilities with
+additional variation margin
+Other capital instruments
+61,801
+56,602*
+11,320
+posted
+31
+All other assets not included in
+312,841
+418,055
+37,139
+82,150
+731,640
+the above categories
+32
+Off-balance sheet items
+13,883
+4
+Retail deposits and deposits from
+6,408,762
+6,187,110
+6,131
+280,075
+1,459
+4,561,622
+227,280
+3,162,489
+10
+Liabilities with
+matching interdependent assets
+123
+11
+Other liabilities:
+12,026
+354,326
+893,556
+655,168
+637,737
+12
+NSFR derivative liabilities
+13
+All other liabilities and
+12,026
+893,556
+32,890
+45,902
+609,266
+637,737
+equities not included in
+the above categories
+32,890
+Total ASF
+Other wholesale funding
+590,924
+7,201,693
+11,731
+10,364
+12,275,079
+small business customers:
+569% o
+Stable deposits
+39,189
+50,721
+5,065
+6,613
+96,838
+Less stable deposits
+9
+6,369,573
+6,666
+3,751
+12,178,241
+7
+Wholesale funding:
+8,877,598
+6,778,034
+286,206
+228,739
+7,724,111
+8
+Operational deposits
+8,523,272
+7,150,972
+including gold
+669,514
+32
+SHANGHAI BRANCH
+Address: No. 8 Yincheng Road,
+Pudong New District,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58885888/68088888
+Fax: 021-58882888
+SHENZHEN BRANCH
+Address: North Block Financial
+Center, No. 5055
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+Postcode: 518015
+Tel: 0755-82246400
+Fax: 0755-82246247
+SICHUAN BRANCH
+Address: No. 45 Zongfu Road,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Postcode: 610020
+Tel: 028-82866000
+Fax: 028-82866025
+TIANJIN BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Postcode: 300074
+Tel: 022-28400648
+Fax: 022-28400123/022-28400647
+XIAMEN BRANCH
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Postcode: 361012
+Tel: 0592-5292000
+Fax: 0592-5054663
+XINJIANG BRANCH
+Fax: 029-87602999
+Tel: 029-87602608/87602630
+Postcode: 710004
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Postcode: 750002
+Tel: 0951-5890912
+Fax: 0951-5890917
+QINGDAO BRANCH
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+Postcode: 266071
+Tel: 0532-66211001
+Fax: 0532-85814711
+QINGHAI BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Postcode: 810001
+Address: No. 231 Renmin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Tel: 0971-6169722/6152326
+SHANDONG BRANCH
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+Postcode: 250001
+Tel: 0531-66681114
+Fax: 0531-87941749/66681200
+SHANXI BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Postcode: 030001
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHAANXI BRANCH
+Fax: 0971-6152326
+Postcode: 830002
+Tel: 0991-5981888
+Fax: 0991-2828608
+ICBC Financial Asset Investment
+Co., Ltd.
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin Road,
+Nanjing City, Jiangsu
+Province, China
+Postcode: 211800
+Tel: 025-58172219
+ICBC Wealth Management Co.,
+Ltd.
+Address: No. 6 Financial Street,
+Xicheng District,
+Beijing, China
+Postcode: 100032
+Tel: 010-86509184
+Fax: 010-86509901
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Fax: 021-58792299
+Address: No.8 Xianshan Road,
+District, Chongqing, China
+Postcode: 402760
+Tel: 023-85297704
+Fax: 023-85297709
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No.258 Chengnan West
+Road, Pinghu City,
+Zhejiang Province, China
+Postcode: 314200
+Tel: 0573-85139616
+Fax: 0573-85139626
+308
+ICBC
+Biquan Street, Bishan
+NINGXIA BRANCH
+Address: No. 67 Zhonghai Road,
+Jinfeng District, Yinchuan
+City, Ningxia Autonomous
+Region, China
+Tel: 021-58792288
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+TIBET BRANCH
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+Postcode: 850000
+Tel: 0891-6898002
+Fax: 0891-6898001
+YUNNAN BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 650021
+Tel: 0871-65536313
+Fax: 0871-63134637
+ZHEJIANG BRANCH
+Postcode: 200120
+Address: No. 66 Juyuan Road,
+Jianggan District,
+Postcode: 310016
+Tel: 0571-87803888
+Fax: 0571-87808207
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 100033
+Tel: 010-66583349
+Fax: 010-66583158
+ICBC Financial Leasing Co., Ltd.
+Address: Taida MSD-B1,
+No. 62 Second Street,
+Economic Development
+Zone, Tianjin, China
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+Hangzhou City, Zhejiang
+Province, China
+in the above categories
+List of Domestic and Overseas Branches and Offices
+Annual Report 2021
+Tel: 0411-82378888
+Fax: 0411-82808377
+FUJIAN BRANCH
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+Postcode: 350005
+Tel: 0591-88087819/88087000
+Fax: 0591-83353905/83347074
+GANSU BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Postcode: 730030
+Tel: 0931-8434172
+Fax: 0931-8435166
+GUANGDONG BRANCH
+Address: No. 123 Yanjiang West Road,
+Guangzhou City,
+Guangdong Province,
+China
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+GUANGXI BRANCH
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Zhuang Autonomous
+Region, China
+Postcode: 530022
+Tel: 0771-5316617
+Fax: 0771-5316617/2806043
+GUIZHOU BRANCH
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+Postcode: 550001
+Tel: 0851-88606280/88620018
+Fax: 0851-85963911
+HAINAN BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Postcode: 116001
+Dalian City, Liaoning
+Province, China
+Address: No. 5 Zhongshan Square,
+DALIAN BRANCH
+Off-balance sheet items
+8,051,576
+33
+Total RSF
+246,740
+19,015,607
+34
+Net Stable Funding Ratio (%)
+128.18%
+The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+306
+ICBC
+List of Domestic and Overseas Branches and Offices
+Domestic Institutions
+Postcode: 570203
+ANHUI BRANCH
+China
+Postcode: 230001
+Tel: 0551-62869178/62868101
+Fax: 0551-62868077
+BEIJING BRANCH
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+Postcode: 100031
+Tel: 010-66410579
+Fax: 010-66410579
+CHONGQING BRANCH
+Postcode: 400061
+Tel: 023-62918002
+Fax: 023-62918059
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui Province,
+Tel: 0898-65303138/65342829
+Fax: 0898-65342986
+HEBEI BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Address: No. 408 Zhongshan
+South Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 210006
+Tel: 025-52858000
+Fax: 025-52858111
+JIANGXI BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Province, China
+Postcode: 330008
+Tel: 0791-86695682/86695018
+Fax: 0791-86695230
+LIAONING BRANCH
+JIANGSU BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Postcode: 110001
+Tel: 024-23491600
+Fax: 024-23491609
+INNER MONGOLIA BRANCH
+Address: No. 10 East 2nd Ring Road,
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region,
+China
+Postcode: 010060
+Tel: 0471-6940833/6940297
+Fax: 0471-6940048
+NINGBO BRANCH
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+Postcode: 315010
+Tel: 0574-87361162
+Fax: 0574-87361190
+Shenyang City, Liaoning
+Province, China
+307
+Fax: 0431-88923808
+Postcode: 130022
+Postcode: 050051
+Tel: 0311-66000001
+Fax: 0311-66000002
+HENAN BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Postcode: 450011
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+HEILONGJIANG BRANCH
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+China
+Postcode: 150010
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+Tel: 0431-89569718/89569007
+HUBEI BRANCH
+Wuchang District, Wuhan
+City, Hubei Province, China
+Postcode: 430071
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+HUNAN BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Postcode: 410011
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+JILIN BRANCH
+Address: No. 9559 Renmin Avenue,
+Changchun City,
+Jilin Province, China
+Address: No. 31 Zhongbei Road,
+Original date of issuance
+775,134
+14,349
+37,139
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+8
+Less: Exempted CCP leg of client-cleared trade exposures
+(128)
+(12,330)
+9
+Effective notional amount of written credit derivatives
+37,702
+42,669
+10
+11
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+(33,407)
+(12,858)
+181,005
+231,393
+12
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+408,095
+398,208
+13
+Less: Netted amounts of cash payables and cash receivables of
+gross
+SFT assets
+14
+CCR exposure for SFT assets
+40,027
+7
+67,843
+91,940
+146,069
+Balance of adjusted on- and off-balance sheet assets
+31 December
+2021
+31 December
+2020
+35,171,383
+(251,092)
+104,865
+40,027
+2,244,477
+(17,138)
+37,292,522
+33,345,058
+(202,504)
+85,324
+29,188
+2,059,325
+(16,053)
+35,300,338
+29,188
+(ii) Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets
+and Related Information
+Item
+1
+234
+56
+On-balance sheet items (excluding derivatives and SFTs, but including
+collateral)
+Less: Asset amounts deducted in determining Basel III tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+31 December
+2021
+31 December
+2020
+34,436,056
+32,598,277
+(17,138)
+34,418,918
+84,898
+(16,053)
+32,582,224
+S/N
+15
+Agent transaction exposures
+16
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Capital Management Approach
+The Group discloses liquidity coverage ratio using Advanced Capital Management Approach in accordance with Measures for
+the Disclosure of Information on Liquidity Coverage Ratio by Commercial Banks (Yin Jian Fa [2015] No. 52).
+S/N Item
+High-quality liquid assets
+1
+Fourth-quarter 2021
+Total
+unweighted
+Total
+weighted
+value
+value
+Total high-quality liquid assets (HQLA)
+5,840,091
+Cash outflows
+7.
+2
+13,206,445
+1,317,060
+3 4 5 6
+Stable deposits
+56,472
+2,063
+Less stable deposits
+13,149,973
+1,314,997
+Unsecured wholesale funding, of which:
+14,765,584
+4,798,151
+Operational deposits (excluding those generated from correspondent
+Retail deposits and deposits form small business customers of which:
+Other adjustments
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Total securities financing transaction exposures
+448,122
+427,396
+17
+Off-balance sheet exposure at gross notional amount
+6,328,760
+5,727,987
+18
+Less: Adjustments for conversion to credit equivalent amounts
+(4,084,283)
+(3,668,662)
+19
+Balance of adjusted off-balance sheet assets
+For the year ended 31 December 2021
+2,244,477
+20
+Net tier 1 capital
+3,241,364
+2,872,792
+21
+22
+Balance of adjusted on- and off-balance sheet assets
+Leverage ratio
+37,292,522
+35,300,338
+8.69%
+8.14%
+Annual Report 2021
+301
+2,059,325
+8,996,693
+Adjustment for off-balance sheet items
+Adjustments for derivative financial instruments
+3.74%
+No
+Mandatory
+No
+Mandatory
+No
+Mandatory
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+3.48%
+Fixed
+Fixed
+Fixed
+4.15%
+RMB30,000
+RMB50,000
+RMB50,000
+Debt securities issued
+19 January 2021
+Debt securities issued
+13 December 2021
+RMB10,000
+RMB10,000
+Debt securities issued
+13 December 2021
+Annual Report 2021
+299
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+N/A
+Main features of regulatory capital instrument
+Perpetual or dated
+Tier 2 capital bonds
+Dated
+Tier 2 capital bonds
+Dated
+Including: Original maturity date
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date,
+contingent call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+Including: If convertible, conversion trigger(s)
+21 January 2031
+Yes
+21 January 2026, in full
+amount
+N/A
+15 December 2031
+Yes
+15 December 2026, in full
+amount
+15 December 2036
+Yes
+15 December 2031,
+in full amount
+N/A
+N/A
+Tier 2 capital bonds
+Dated
+N/A
+N/A
+N/A
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+No
+N/A
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+No
+N/A
+300
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+ICBC
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+6. Disclosure of Leverage Ratio
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015).
+(i) Correspondence between Regulatory Leverage Ratio Items and Accounting Items and their
+differences
+S/N
+Item
+1
+2
+3 4 5 6 7∞
+8
+Total consolidated assets as per published financial statements
+Consolidated adjustments for accounting purposes but outside
+the scope of regulatory consolidation
+Adjustments for fiduciary assets
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Adjustment for securities financing transactions
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Whichever occurs earlier:
+N/A
+NA
+N/A
+Yes
+Yes
+Including: If convertible, fully or partially
+Including: If convertible, conversion rate
+Including: If convertible, mandatory or
+optional conversion
+Including: If convertible,
+specify instrument type convertible into
+Including: If convertible,
+specify issuer of instrument it converts into
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+Write-down feature
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down,
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior
+to instrument)
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+No
+N/A
+Including: If write-down, write-down trigger(s)
+148,589
+2,187,318
+789
+1,457
+914
+104,314
+other financial institutions for
+operational purposes
+17
+Loans and securities:
+1,266
+18
+Loans to financial institutions
+3,844,322
+479,994
+2,622,168
+1,701
+16,955,026
+136
+17,156,499
+72,421
+secured by Level 1 HQLA
+19
+Loans to financial institutions
+745,042
+247,457
+171,280
+406,765
+secured by non-Level 1 HQLA
+and unsecured loans to
+financial institutions
+20
+Loans to retail and
+37,813
+165,913
+Deposits held at
+16
+10 Liabilities with
+matching interdependent assets
+11
+Other liabilities:
+10,434
+1,002,488
+24,738
+654,537
+629,422
+12
+NSFR derivative liabilities
+13
+All other liabilities and
+2,327,769
+10,434
+24,738
+47,918
+606,619
+629,422
+equities not included
+in the above categories
+14
+Total ASF
+Required stable funding (RSF) item
+15
+Total NSFR high-quality
+24,308,968
+979,487
+liquid assets (HQLA)
+1,002,488
+2,194,968
+9,550,942 10,295,054
+small business customers,
+≥ 1 year
+2,093
+428
+3,384
+429
+6,376,331
+value
+5,419,938
+14,451
+10,029
+credit risk
+24
+Securities that are not in
+1,266
+289,424
+174,658
+Weighted
+856,337
+default and do not qualify as
+HQLA, including
+exchange-traded equities
+25
+Assets with matching
+interdependent liabilities
+25
+26
+Other assets:
+27
+Physical traded commodities,
+329,722
+16,881
+418,055
+962,321
+3,025,033
+6 months to
+< 1 year
+No maturity
+non-financial institutions,
+sovereigns, central banks and
+PSES, of which:
+21
+With a risk weight of
+491,444
+360,373
+298,663
+607,380
+less than or equal to 35%
+under the Basel II
+standardised approach for
+credit risk
+< 6 months
+Annual Report 2021
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+No.
+Item
+22
+Residential mortgages, of which:
+23
+With a risk weight of
+less than or equal to 35%
+under the Basel II
+standardised approach for
+31 December 2021
+Unweighted value
+303
+banking activities)
+222,275
+5,990,923
+Cash inflows
+17
+Secured lending (including reverse repos and securities borrowing)
+528,439
+292,256
+18
+Inflows from fully performing exposures
+1,501,023
+963,271
+10
+19
+Other cash inflows
+1,112,279
+1,109,461
+20
+Total cash inflows
+3,141,741
+2,364,988
+Total Adjusted
+Value
+21
+Total HQLA
+22
+Total net cash outflows
+23
+Liquidity coverage ratio (%)
+Data of the above table are the simple arithmetic average of the 92 calendar days' figures of the recent quarter.
+106,897
+7,572,721
+Total cash outflows
+16
+5,289,975
+Non-operational deposits (all counterparties)
+5,699,530
+2,541,472
+Unsecured debt
+69,361
+69,361
+Secured funding
+11,893
+10
+11
+Additional requirements, of which:
+3,070,500
+1,261,208
+302
+Outflows related to derivative exposures and other collateral requirements
+1,111,158
+12
+Outflows related to loss of funding on debt products
+13
+Credit and liquidity facilities
+1,959,342
+150,050
+14
+Other contractual funding obligations
+77,534
+77,512
+15
+Other contingent funding obligations
+1,111,158
+ICBC
+5,840,091
+5,207,733
+9
+5698 -
+Stable deposits
+Less stable deposits
+7 Wholesale funding:
+37,393
+42,896
+10,502
+6,973
+93,225
+6,497,443
+7,050,587
+7,036
+small business customers:
+3,191
+8,598,100
+6,565,799
+309,032
+226,568
+7,450,606
+Operational deposits
+8,253,459
+574,876
+14,226
+4,293
+4,425,573
+Other wholesale funding
+344,641
+12,202,751
+294,806
+12,295,976
+17,538
+112.20%
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+8.
+Quantitative Information Disclosure of Net Stable Funding Ratio (NSFR) Using
+Advanced Capital Management Approach
+The Group discloses net stable funding ratio information in accordance with Measures for the Disclosure of Information on
+Net Stable Funding Ratio by Commercial Banks (Yin Bao Jian Fa [2019] No. 11).
+31 December 2021
+Unweighted value
+No. Item
+< 6 months
+6 months to
+< 1 year
+Weighted
+≥ 1 year
+value
+10,164
+Available stable funding (ASF) item
+Capital:
+3,514,552
+418,412
+2
+3
+Regulatory capital
+3,514,552
+418,412
+3,932,964
+3,932,964
+Other capital instruments
+4
+6,534,836
+7,093,483
+1
+Address: No. 61 Taichang Road,
+Nan'an District,
+Chongqing, China
+Retail deposits and deposits from
+Tel: +853-28555222
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+Address: Level 42, Tower 1,
+International Towers,
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Email: info@icbc.com.au
+Tel: +612-94755588
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ2A
+310
+ICBC
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Auckland
+Branch
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ22
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Email: icbc@icbc-ffm.de
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKKWKW
+SWIFT: ICBKDEFF
+Fax: +965-22281799
+Email: info@kw.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Address: Addax Tower Offices
+5207, 5208 and 5209,
+Al Reem Island, Abu Dhabi,
+United Arab Emirates
+P.O. Box 62108
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Address: Level 20, Burj Doha, Al
+Corniche Street, West Bay,
+Doha, Qatar
+P.O. BOX: 11217
+Email: ICBCDOHA@doh.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: Level 4&8, A1 Faisaliah
+Tower Building
+No: 7277-King Fahad Road
+Al Olaya, Zip Code: 12212,
+Additional No.: 3333,
+Unit No.:95,
+Kingdom of Saudi Arabia
+Email: service@sa.icbc.com.cn
+Tel: +966-112899800
+Fax: +966-112899879
+SWIFT: ICBKSARI
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Address: Building 2A(Al-Tijaria
+Tower), Floor 7&8,
+Al-Soor Street, Al-Morqab,
+Block 3, Kuwait City,
+Kuwait
+Tel: +965-22281777
+Email: dboffice@dxb.icbc.com.cn
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+B.P.278 L-2012
+Luxembourg
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Address: Via Tommaso Grossi 2,
+20121, Milano, Italy
+Email: hradmin@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Address: Paseo de Recoletos, 12,
+28001, Madrid, España
+Email: gad.dpt@es.icbc.com.cn
+Tel: +34-912168837
+Fax: +34-912168866
+SWIFT: ICBKESMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+Address: Plac Trzech Krzyży 18,
+00-499, Warszawa, Poland
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+SWIFT: ICBKPLPW
+Industrial and Commercial Bank
+of China (Europe) S.A. Greece
+Representative Office
+Address: Amerikis 13, Athens 106
+72 Greece
+Email: GAD@gr.icbc.com.cn
+Tel: +30-2166868888
+Fax: +30-2166868889
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: londonmarketing@
+icbcstandard.com
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Bank ICBC (joint stock
+company)
+Address: Building 29,
+1050 Brussels, Belgium
+Email: info@be.icbc.com.cn
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+Address: 81, Avenue Louise,
+Fax: +31-205706603
+SWIFT: ICBKNL2A
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-26866666
+SWIFT: ICBKLULL
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-26866666
+SWIFT: ICBKLULU
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+Address: 73 Boulevard Haussmann,
+75008, Paris, France
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam,
+the Netherlands
+Email: office@nl.icbc.com.cn
+Tel: +31-205706666
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+United Arab Emirates
+P.O. Box: 506856
+International Financial
+Center, Dubai,
+Building 1, Dubai
+No.393-437, 9 Andar,
+Edf. Dynasty Plaza,
+Macau SAR, China
+Email: icbc@mc.icbc.com.cn
+Fax: +853-28338064
+SWIFT: ICBKMOMM
+Asia-Pacific
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 5-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-6512, Japan
+Email: icbctokyo@icbc.co.jp
+Tel: +813-52232088
+Fax: +813-52198525
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+# 640 Jungang-daero,
+Busanjin-gu, Busan 47353,
+Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Address: Suite 1108, 11th floor,
+Shangri-la Office,
+Shangri-la Centre,
+19A Olympic Street,
+Sukhbaatar District-1,
+Ulaanbaatar, Mongolia
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
++976-77106677
+Fax: +976-77108866
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+PT. Bank ICBC Indonesia
+Address: The City Tower 32nd Floor,
+JI. M.H. Thamrin No. 81,
+Jakarta Pusat 10310,
+Indonesia
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Industrial and Commercial Bank
+of China Limited, Manila Branch
+Address: 24F, The Curve,
+32nd Street Corner,
+d'Assumpcao,
+3rd Ave, BGC, Taguig City,
+Manila 1634, Philippines
+Industrial and Commercial Bank
+of China Limited, Macau Branch
+Address: Alm. Dr. Carlos
+Tel: +853-28555222
+List of Domestic and Overseas Branches and Offices
+Overseas Institutions
+Hong Kong SAR and Macau
+SAR
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong SAR, China
+Email: icbchk@icbcasia.com
+Tel: +852-25881188
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong SAR, China
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Fax: +852-28051166
+SWIFT: UBHKHKHH
+ICBC International Holdings
+Limited
+Address: 37/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong SAR, China
+Email: info@icbci.com.hk
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICILHKH1
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau SAR, China
+Email: icbc@mc.icbc.com.cn
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Email: info@ph.icbc.com.cn
+Tel: +63-282803300
+Fax: +63-284032023
+Tel: +855-23955880
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Industrial and Commercial
+Bank of China Limited, Yangon
+Branch
+Address: ICBC Center, Crystal
+Tower, Kyun Taw Road,
+Kamayut Township,
+Yangon, Myanmar
+Tel: +95-019339258
+Fax: +95-019339278
+SWIFT: ICBKMMMY
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Email: office@kz.icbc.com.cn
+Tel: +7-7272377085
+SWIFT: ICBKKZKX
+Industrial and Commercial Bank
+of China Limited, Karachi Branch
+Address: 15th & 16th Floor, Ocean
+Tower, G-3,
+Block-9, Scheme # 5,
+Main Clifton Road,
+Karachi,
+Pakistan.P.C:75600
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Industrial and Commercial
+Bank of China Limited, Mumbai
+Branch
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Address: Floor 5&6, Gate Village
+Email: icbckh@kh.icbc.com.cn
+Street 106, Phnom Penh,
+Cambodia
+Square, No. 19-20,
+Address: 17th Floor, Exchange
+SWIFT: ICBKPHMM
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Address: 622 Emporium Tower
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Email: admin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Annual Report 2021
+309
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+List of Domestic and Overseas Branches and Offices
+building, 33 Le Duan
+Street, District 1, Ho Chi
+Minh City, Vietnam
+Email: hcmadmin@vn.icbc.com.cn
+Tel: +84-28-35208991
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Address: Asean Road, Home
+No.358, Unit 12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+Email: icbcvte@la.icbc.com.cn
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Fax: +7-4952873098
+Europe
+ICBC Turkey Bank Anonim
+Şirketi
+Bank of China Limited, Panama
+Branch
+Industrial and Commercial
+Tel: +54-1148202200
+Inversora Diagonal S.A.U.
+Address: Florida 99, (C1105CPG)
+CABA, Argentina
+Email: alpha.sales@icbc.com.ar
+Tel: +54-1143949432
+ICBC Investments Argentina
+S.A.U. Sociedad Gerente de
+Fondos Comunes de Inversión
+Address: Blvd. Cecilia Grierson 355,
+Piso 14, (C1107CPG)
+CABA, Argentina
+Buenos Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+Industrial and Commercial Bank
+of China (Argentina) S.A.U.
+Address: Blvd. Cecilia Grierson 355,
+(C1107 CPG)
+Email: consultas@pe.icbc.com.cn
+Tel: +51-16316800
+Fax: +51-16316802
+SWIFT: ICBKPEPL
+Address: MMG Tower | 20th Floor |
+Ave. Paseo del Mar |
+ICBC PERU BANK
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+Tel: +55-1123956600
+Email: bxgw@br.icbc.com.cn
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Del. Cuauhtemoc,
+Ciudad de Mexico
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma 250,
+Piso 18, Col. Juarez,
+C.P.06600,
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Tel: +1-4163665588
+SWIFT: ICBKBRSP
+Costa del Este
+Panama City,
+Republic of Panama
+SWIFT: ICBKRUMM
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+www.icbc.com.cn, www.icbc-ltd.com
+中國北京市西城區復興門內大街55號
+Post Code: 100140
+郵編:100140
+ICBC
+呂
+ICBC
+312
+Tel: +27-608845323
+Email: icbcafrica@afr.icbc.com.cn
+South Africa, 2196
+Johannesburg, Gauteng,
+Rosebank,
+Address 2: T11, 2nd Floor East,
+30 Baker Street,
+Constantia, Cape Town,
+South Africa, 7806
+Representative Office
+Industrial and Commercial
+Bank of China Limited, African
+Africa
+SWIFT: ICBKPAPA
+Email: panama.branch@pa.icbc.com.cn
+Tel: +507-3205901
+Email: info@icbk.ca
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario,
+M5H 2R2, Canada
+Address 1: 47 Price Drive,
+Tel: +1-2129937300
+Fax: +1-2129937349
+SWIFT: ICBKUS3F
+Fax: +41-58-9095577
+SWIFT: ICBKCHZZ
+Tel: +41-58-9095588
+Email: service@ch.icbc.com.cn
+CH-8001, Zurich,
+Switzerland
+Address: Nüschelerstrasse 1,
+Industrial and Commercial Bank
+of China Limited, Beijing,
+Zurich Branch
+SWIFT: ICBKCZPP
+Fax: +420-237762899
+Tel: +420-237762888
+Email: info@cz.icbc.com.cn
+14000 Prague 4-Nusle,
+Czech Republic
+Address: 12F City Empiria,
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+List of Domestic and Overseas Branches and Offices
+311
+Annual Report 2021
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+Email: gongwen@tr.icbc.com.cn
+No:13 34398 Sariyer,
+İSTANBUL
+Industrial and Commercial Bank
+of China (Canada)
+Address: Maslak Mah. Dereboyu,
+2 Caddesi
+ICBC Austria Bank GmbH
+Address: Kolingasse 4,
+1090 Vienna, Austria
+Na Strži 1702/65,
+Tel: +43-1-9395588
+Email: info@icbkfs.com
+28th Floor, New York,
+NY, 10019, USA
+Email: generaldept@at.icbc.com.cn
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway,
+SWIFT: ICBKUS3N
+Fax: +1-2122193211
+Tel: +1-2122388208
+NY 10036
+Address: 1185 Avenue of the Americas,
+16th Floor, New York,
+Industrial and Commercial Bank
+of China (USA) NA
+Tel: +1-2128387799
+Fax: +1-2125752517
+SWIFT: ICBKUS33
+Email: info@us.icbc.com.cn
+NY 10022, USA
+20th Floor, New York,
+Address: 725 Fifth Avenue,
+Fax: +43-1-9395588-6800
+of China Limited, New York
+Branch
+Industrial and Commercial Bank
+SWIFT: ICBKATWW
+Email: info-nyb@us.icbc.com.cn
+Americas
+3,335,179
+0.2
+Yangtze River Delta
+5,436,282
+20.6
+Pearl River Delta
+20.0
+3,495,325
+13.2
+Bohai Rim
+13.3
+42,611
+5,057,963
+0.1
+At 31 December 2021
+Head Office
+(%)
+Amount
+Percentage
+Percentage
+(%)
+Amount
+Item
+At 31 December 2020
+In RMB millions, except for percentages
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+Note: (1) Includes outward remittance and remittance payables.
+6,885,411
+25,134,726
+100.0
+38,290
+26.0
+100.0
+26.8
+The Bank served the high-quality development of the
+manufacturing. It has carried out the campaign of
+"Year of Financial Services for Manufacturing" for
+three consecutive years, and has signed a strategic
+cooperation agreement with the Ministry of Industry
+and Information Technology to strengthen product
+innovation and resource guarantee. At the end of
+2021, the balance of manufacturing loans exceeded
+RMB2 trillion, ranking first among peers in terms of
+both the balance and increment.
+100.0
+As at the end of 2021, shareholders' equity totaled
+RMB3,275,258 million, RMB365,743 million or 12.6%
+higher than that at the end of the previous year. Equity
+attributable to equity holders of the parent company
+recorded an increase of RMB364,253 million or 12.6% to
+RMB3,257,755 million. Please refer to the "Consolidated
+Financial Statements: Consolidated Statement of Changes
+in Equity" for details.
+Shareholders' Equity
+Discussion and Analysis
+ICBC
+32
+100.0
+3.9
+975,900
+25,134,726
+26,441,774
+Total
+3.7
+955,294
+6,733,969
+Overseas and other
+1,308,155
+5.3
+1,410,376
+Northeastern China
+16.2
+4,072,459
+16.3
+4,320,355
+Western China
+14.4
+3,608,490
+14.8
+3,900,441
+Central China
+5.2
+26,441,774
+(%)
+267,941
+Demand deposits
+21.8
+5,489,700
+21.9
+5,798,353
+Time deposits
+(%)
+Percentage
+Amount
+In RMB millions, except for percentages
+At 31 December 2020
+2.9%
+Amount
+Percentage
+At 31 December 2021
+7,533,110
+Corporate deposits
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+RMB837,432 million or 7.2%. In terms of maturity
+structure, time deposits increased by RMB952,110 million
+or 8.0%, while demand deposits increased by RMB271,925
+million or 2.1%. In terms of currency structure, RMB
+deposits stood at RMB24,914,524 million, an increase of
+RMB1,342,532 million or 5.7%. Foreign currency deposits
+were equivalent to RMB1,527,250 million, a decrease of
+RMB35,484 million or 2.3%.
+Due to customers is the Bank's main source of funds. As at
+the end of 2021, due to customers was RMB26,441,774
+million, RMB1,307,048 million or 5.2% higher than that
+at the end of the previous year. In terms of customer
+structure, corporate deposits increased by RMB386,603
+million or 3.0%; and personal deposits increased by
+Due to Customers
+Discussion and Analysis
+31
+Annual Report 2021
+100.0
+30,435,543
+100.0
+4.7
+1,424,997
+4.3
+1,376,004
+31,896,125
+Item
+1.1
+28.5
+29.7
+1.4
+361,994
+1.0
+261,389
+0.9
+250,349
+46.4
+11,660,536
+47.3
+12,497,968
+20.7
+5,196,607
+20.4
+5,390,582
+7,455,160
+25.7
+26.9
+7,107,386
+Total
+Accrued interest
+Other deposits (1)
+Subtotal
+Demand deposits
+Time deposits
+Personal deposits
+51.5
+12,944,860
+50.4
+13,331,463
+Subtotal
+6,463,929
+Demand deposits
+Adhering to using corporate banking services as an important means
+to boost the high-quality development of the real economy, the Bank
+innovated the corporate credit layout of new manufacturing, new services,
+new basic industries and high-tech customer groups, improved the supply
+of financial resources for the key areas and weak links in the real economy,
+and actively shouldered the responsibilities as a large bank. At the end
+of 2021, corporate loans reached RMB12,194,706 million, representing
+an increase of RMB1,091,973 million or 9.8% over the end of last year.
+Corporate deposits stood at RMB13,331,463 million, representing an
+increase of RMB386,603 million or 3.0%.
+2020
+Personal banking
+346,172
+40.2
+318,058
+39.7
+Treasury operations
+111,278
+12.9
+83,931
+10.5
+42 Financial Market Business
+Other
+5,057
+0.6
+49.2
+4,425
+Profit before
+424,899
+100.0
+392,126
+100.0
+taxation
+44 FinTech
+Corporate banking
+140,569
+33.1
+146,903
+37.5
+Personal banking
+195,658
+0.6
+46.0
+46.3
+Corporate banking
+Total liabilities
+The off-balance sheet items of the Bank mainly include
+derivative financial instruments, contingencies and
+commitments. For details on the nominal amount and
+fair value of derivatives financial instruments, please refer
+to "Note 21. to the Consolidated Financial Statements:
+Derivative Financial Instruments". For details on
+contingencies and commitments, please refer to "Note 46.
+to the Consolidated Financial Statements: Commitments
+and Contingent Liabilities".
+Analysis on Statement of Cash Flows
+Net cash inflows from operating activities amounted
+to RMB360,882 million, representing a decrease of
+RMB1,196,734 million as compared to last year, principally
+due to the decrease of cash inflows resulted from the
+decrease of net increase of due to customers and due to
+banks and other financial institutions. Specifically, cash
+outflows of operating assets increased by RMB8,130
+million; and cash inflows of operating liabilities decreased
+by RMB1,185,927 million.
+Net cash outflows from investing activities amounted
+to RMB674,556 million. Specifically, cash inflows were
+RMB2,718,919 million, representing an increase of
+RMB613,048 million over last year, mainly due to the
+increased cash proceeds from the sale and redemption
+of financial investments; and cash outflows were
+RMB3,393,475 million, representing an increase of
+RMB152,507 million, mainly due to the increase in cash
+payment for financial investments.
+Net cash outflows from financing activities amounted
+to RMB11,553 million. Specifically, cash inflows were
+RMB975,234
+an
+million, representing
+increase of
+RMB27,759 million over last year, mainly due to the
+increased cash proceeds from the issuance of other equity
+instruments; and cash outflows were RMB986,787 million,
+representing a decrease of RMB7,637 million mainly due
+to the decreased cash payment for repayment of debt
+securities.
+Reconciliation of Differences between
+the Financial Statements Prepared
+under PRC GAAP and Those under IFRSS
+In respect of the financial statements of the Bank prepared
+under PRC GAAP and those under IFRSS, net profit
+attributable to equity holders of the parent company for
+the year ended 31 December 2021 and equity attributable
+to equity holders of the parent company as at the end of
+the reporting period have no differences.
+Annual Report 2021
+33
+Discussion and Analysis
+BUSINESS OVERVIEW
+34 Corporate Banking
+SUMMARY OPERATING SEGMENT INFORMATION
+398,373
+In RMB millions, except for percentages
+2020
+39 Personal Banking
+Percentage
+Item
+Amount
+(%)
+Amount
+Percentage
+(%)
+Operating income
+860,880
+100.0
+800,075
+100.0
+41 Asset Management Services
+2021
+2021
+174,469
+48 Internet Finance
+15.2%
+Manufacturing
+15.1%
+Off-balance Sheet Items
+● Water, environment and public
+utility management
+12.5%
+75,331.10
+74,551.60
+Production and supply of
+9.7%
+67,325.58
+electricity, heat, gas and water
+⚫ Real estate
+6.5%
+Leasing and commercial services
+Wholesale and retail
+57,983.53
+54,897.00
+52,957.04
+●Construction
+2.9%
+Science, education, culture
+2.6%
+and sanitation
+● Mining
+1.9%
+2019
+Lodging and catering
+Others
+0.7%
+Time deposits
+4.2%
+44.5
+postal services
+Transportation, storage and
+Treasury operations
+85,326
+20.1
+68,199
+17.4
+Other
+3,346
+0.8
+2,555
+0.6
+51 Outlet Development
+Note: Please see "Note 48. to the Consolidated Financial Statements: Segment
+Information" for details.
+51 Service Improvement
+52 Human Resources
+25.8%
+Management, Employees
+and Institutions
+58 Diversified Operation and
+Subsidiary Management
+61 Major Controlled Subsidiaries
+and Equity Participating
+Company
+Corporate Banking
++
+New breakthroughs have been achieved in customer base. The
+Bank deeply conducted the "net making and patching" program,
+expanded the customer base, improved customer quality, activated
+customer transactions, and enhanced customer expansion and
+maintenance capability. While focusing on high-quality customer
+marketing, the Bank vigorously expanded medium-sized enterprise
+customer groups to establish a coordinated, active and loyal
+customer base comprising large, medium and small enterprises. At
+the end of 2021, the number of corporate customers increased by
+12.1% over the end of the previous year to 9,691 thousand.
+34
+ICBC
+4
+4
+Corporate loans of domestic branches
+by industry of loan customers
+Discussion and Analysis
+Corporate Deposits
+Unit: RMB100 millions
+54 Internationalized Operation
+Other
+100.0
+798,127
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2020
+In RMB millions, except for percentages
+At 31 December 2021
+Note: (1) Refers to overdue bonds.
+Total
+Over 5 years
+1 to 5 years
+3 to 12 months
+Less than 3 months
+Undated(1)
+Remaining maturity
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+Discussion and Analysis
+29
+Annual Report 2021
+In terms of distribution by issuers, government bonds increased by RMB634,239 million or 11.1% over the end of last year,
+mainly due to the increase in local government bonds and national bonds; central bank bonds increased by RMB6,135
+million or 19.1%; policy bank bonds went up by RMB29,094 million or 4.0%; and other bonds increased by RMB93,684
+million or 6.0%.
+100.0
+19.4
+1,559,128
+8,054,193
+100.0
+18.7
+1,652,812
+8,817,345
+9.0
+167
+0.0
+35
+0.0
+Percentage
+At 31 December 2021
+At 31 December 2020
+In RMB millions, except for percentages
+Total
+Other foreign currency bonds
+USD-denominated bonds
+RMB-denominated bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+100.0
+8,054,193
+100.0
+8,817,345
+725,625
+38.3
+40.4
+3,556,934
+43.4
+3,493,342
+39.9
+3,517,415
+12.2
+978,923
+13.9
+1,228,144
+6.1
+495,137
+5.8
+514,685
+3,086,756
+8.6
+754,719
+0.4
+2.0
+175,698
+2.1
+190,186
+93.8
+8,054,193
+95.2
+8,817,345
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+148,166
+In RMB millions, except for percentages
+At 31 December 2020
+Total
+Accrued interest
+Funds and other
+Equity instruments
+Bonds
+Item
+In 2021, the Bank continued to reinforce its financial
+service capability for the real economy and scaled up its
+investments in local government bonds, green bonds and
+other bonds. As at the end of 2021, investment amounted
+to RMB9,257,760 million, representing an increase of
+RMB666,621 million or 7.8% from the end of the previous
+year. Among these, bonds rose by RMB763,152 million or
+9.5% to RMB8,817,345 million.
+Investment
+Please see the section headed "Discussion and Analysis
+Risk Management" for detailed analysis of the Bank's loans
+and their quality.
+good reputation and increasing market shares of online
+inclusive finance product "e-Mortgage Quick Loan".
+Personal loans increased by RMB829,502 million
+11.7% from the end of last year. Specifically, residential
+mortgages grew by RMB634,370 million or 11.1%;
+personal business loans increased by RMB180,803 million
+or 34.7%, and the rapid growth is mainly because of the
+or
+Corporate loans rose by RMB1,091,973 million or
+9.8% from the end of last year. Specifically, short-term
+corporate loans and medium to long-term corporate
+loans increased by RMB94,530 million and RMB997,443
+million respectively. The Bank continued to increase credit
+allocation to manufacturing, strategic emerging industries,
+inclusive finance, green finance, rural revitalization and
+other key fields, and the Bank's corporate loans in key
+strategic areas such as the Beijing-Tianjin-Hebei region,
+Yangtze River Delta, Guangdong-Hong Kong-Macao
+Greater Bay Area, Central China and Chengdu-Chongqing
+economic circle continued to grow.
+Discussion and Analysis
+At 31 December 2021
+Percentage
+1.6
+3.1
+32,072
+0.4
+38,207
+71.2
+5,737,368
+72.3
+6,371,607
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2021
+262,800
+At 31 December 2020
+Total
+Other bonds
+Policy bank bonds
+Central bank bonds
+Government bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+8,591,139
+100.0
+9,257,760
+1.1
+98,448
+1.1
+102,063
+In RMB millions, except for percentages
+Amount
+(%)
+Amount
+13,500
+Policy bank bonds 2020
+20 October 2030
+3.70
+14,256
+Policy bank bonds 2020
+26 October 2030
+3.79
+15,135
+Policy bank bonds 2020
+☐ ☐
+7 April 2025
+8 January 2029
+4.29
+3.74
+16,250
+3.48
+17,071
+Policy bank bonds 2019
+20 September 2029
+3.45
+17,663
+Policy bank bonds 2019
+17 April 2030
+2.96
+18,440
+Policy bank bonds 2020
+23 March 2030
+3.23
+19,461
+Policy bank bonds 2015
+Policy bank bonds 2020
+16 November 2030
+13,435
+2.5
+791,375
+Debt securities issued
+1.0
+293,434
+1.1
+365,943
+Repurchase agreements
+9.1
+2,784,259
+9.2
+2,921,029
+Due to banks and other financial institutions
+82.6
+Policy bank bonds 2015
+(%)
+82.9
+26,441,774
+Due to customers
+Percentage
+Percentage
+(%)
+Amount
+Item
+In RMB millions, except for percentages
+At 31 December 2020
+At 31 December 2021
+As at the end of 2021, total liabilities reached RMB31,896,125 million, an increase of RMB1,460,582 million or 4.8%
+compared with the end of last year.
+Liabilities
+Note: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the expected credit loss model.
+5 February 2025
+3.81
+Amount
+25,134,726
+2.6
+13 April 2025
+20,700
+In RMB millions, except for percentages
+At 31 December 2020
+784,483
+6.7
+Amount
+Percentage
+(%)
+At 31 December 2021
+623,223
+Financial investments measured at fair value
+through profit or loss
+Amount
+Item
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+In terms of currency structure, RMB-denominated bonds rose by RMB721,712 million or 9.8% over the end of last year;
+USD-denominated bonds increased by an equivalent of RMB14,066 million or 3.2%; other foreign currency bonds increased
+by an equivalent of RMB27,374 million or 11.9%. During the reporting period, the Bank improved the investment portfolio
+structure of foreign currency bonds and moderately increased the investment in bonds denominated in other currencies.
+100.0
+8,054,193
+Percentage
+100.0
+2.8
+229,463
+2.9
+256,837
+5.4
+436,381
+5.1
+450,447
+91.8
+7,388,349
+92.0
+8,110,061
+The Bank supported the high-level self-reliance
+and self-improvement in science and technology.
+It upgraded the financial service system for
+technological innovation, signed a strategic
+cooperation agreement with the Ministry of Science
+and Technology, carried out the campaign of
+"Financial Service for National High-tech Industrial
+Development Zones and High-tech Enterprises"
+and initially formed a service pattern driven by
+"technological innovation and strategic emerging
+industries". At the end of 2021, the balance of loans
+to enterprises in key high-tech fields and strategic
+emerging industries supported by the state both
+exceeded RMB1 trillion.
+(%)
+8,817,345
+4.21
+(%)
+Financial investments measured at fair value
+through other comprehensive income
+Financial investments measured at amortised
+cost
+Policy bank bonds 2015
+losses(1)
+Maturity date
+impairment
+Annual
+interest rate (%)
+value
+Bond name
+Nominal
+for
+Allowance
+In RMB millions, except for percentages
+Discussion and Analysis
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+ICBC
+9.1
+30
+As at the end of 2021, the Group held RMB1,607,183 million of financial bonds', including RMB754,719 million of policy
+bank bonds and RMB852,464 million of bonds issued by banks and non-bank financial institutions, accounting for 47.0%
+and 53.0% of financial bonds, respectively.
+100.0
+8,591,139
+100.0
+9,257,760
+Total
+73.0
+6,265,668
+73.8
+6,830,933
+17.9
+1,540,988
+19.5
+1,803,604
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bonds.
+The Bank provided comprehensive financial
+services for private enterprises. It implemented the
+"Eight Comprehensive Measures" to serve private
+enterprises, and carried out the "Project of Improving
+Services for Private Enterprise Partners". At the end
+of 2021, the balance of loans to private enterprises
+reached RMB3.39 trillion.
+393,661
+green industries such as clean energy and green
+transportation. At the end of 2021, the balance of
+green loans amounted to RMB2.48 trillion. The Bank,
+as the lead underwriter, underwrote RMB63,637
+million worth of green bonds (including carbon
+neutrality bonds) in the year.
+The Bank deeply served the broadest customer
+base, and made a breakthrough in "net making
+and patching" program. It gave full play to the
+advantages of settlement finance to serve large
+customers, and provided comprehensive financial
+services for group enterprises and large and
+medium enterprises relying on the advantages of
+cash management business. It served medium-sized
+customers with high-quality settlement products,
+upgraded the "ICBC Pooling" platform, embedded
+the "ICBC E Enterprise Payment" into the trading
+platform, and provided efficient online payment
+and settlement services for traders. It offered
+digital batch service for small and micro customers,
+embedded "non-financial + financial" services in
+enterprise operation and management through
+small and micro financial service platform, realized
+targeted marketing, big data operation and digital
+risk control, and effectively improved the coverage
+and capability of services for small and micro
+enterprises.
+At the end of 2021, the Bank maintained
+11,216 thousand corporate settlement accounts,
+representing an increase of 1,110 thousand over the
+end of the previous year. It had 1,609 thousand cash
+management customers, including 9,615 global cash
+management customers. The volume of corporate
+settlements reached RMB2,598.13 trillion.
+Annual Report 2021
+37
+Discussion and Analysis
+Strengthening Settlement Finance Support and
+Coordination to Serve the Bank's Strategy
+Facilitating to build the "No.1 Personal Bank”. The Bank promoted the interactions among government, business
+and consumption ("GBC") through ICBC e BillPay. In 2021, it handled payment services of RMB713 billion for
+customers, served 144 million individual customers in total, and saw an increase in the flows of both corporate and
+individual customer. In 2021, ICBC e Bill Pay was awarded the "Best Aggregate Payment Product in China" by The
+Asian Banker.
+Facilitating to build the "Preferred Bank for Foreign Exchange Business". It took a global response approach
+to extend global cash management services to more than 80 countries and regions. It deepened bank-enterprise
+cooperation, and effectively served 64 "going global" state-owned enterprises directly under the central government,
+accounting for 77% of total, and 149 customers out of the Fortune Global 500. In 2021, the Bank was awarded the
+"Best Asian International Cash Management Bank in Asia Pacific" by The Asian Banker.
+Facilitating to implement the Strategy for Sharpening Competitive Edge in Key Regions. Focusing on the
+building of two zones in Beijing, it launched the pilot project of domestic and foreign currency integrated cash pool.
+Focusing on the building of Guangdong-Hong Kong-Macao Greater Bay Area, the Bank took the lead in the industry
+to launch the universal free trade (FT) cash pool business in Guangzhou and Hengqin. Focusing on the Yangtze River
+Delta Integration, the Bank provided strategic customers with innovative services for cross-border cash pool under the
+Shanghai Free Trade Zone policy.
+Facilitating to implement the Urban-Rural Collaborative Development Strategy. It was the first to launch
+the "rural collective intelligent account opening service", provided door-to-door services with portable intelligent
+terminals, and comprehensively improved the service experience of agro-related non-enterprise accounts. It carried
+out chain marketing with a focus on leading enterprises in agricultural industrialization, and assisted high-quality
+enterprises with reserve grain purchase projects.
+Investment Banking
++ The Bank served the high-quality development
+of the real economy, focusing on key areas such
+as the reform of state-owned enterprises, capital
+market, industrial integration, and the Belt and Road
+Initiative. As the first bank to issue more than RMB1
+trillion of M&A financing accumulatively, the Bank
+increased credit supply in manufacturing industry
+and maintained a leading position in domestic and
+overseas M&A markets. By number of M&A deals
+led by the Bank, the Bank ranked first in China
+in Refinitiv's ranking of Any Chinese Involvement
+Completed and first in the ranking of China
+Outbound Announced M&A.
+The Bank assisted with the supply-side structural
+reform through the new model of investment-
+loan interconnection and interaction
+commercial banking and
+between
+investment banking.
+The Bank actively participated in publicly offered
+REITS to support infrastructure construction, and
+strengthened services for scientific and technological
+innovation,
++
+environmental protection and other industries.
+The Bank innovated equity financing products to
+help enterprises optimize their capital structure
+and provide fund support for major infrastructure
+projects. The Bank expanded actively managed
+asset securitization business to meet the needs of
+enterprises for comprehensive financial services.
+The Bank accelerated the financing rearrangement
+and enterprise debt restructuring, and mitigated the
+liquidity pressure and potential risks of customers.
+The Bank enriched the mobile scenarios of customer
+services, upgraded the functions of "ICBC e
+Confirmation Service", "ICBC e Intelligence", "ICBC
+e Security", "ICBC e RM" and "ICBC ISP" and
+enhanced the new driving force of digital services.
+In 2021, the Bank acted as the lead underwriter for
+2,673 Chinese bond projects with a total value of
+RMB1,807,765 million, ranking first in the market for
+15 consecutive years. It acted as the lead underwriter
+for a total of RMB81,357 million worth of ESG bonds
+such as green bonds (including carbon neutrality
+bonds), sustainability-linked bonds and rural
+revitalization bonds, ranking first in the market.
+38
+ICBC
+The Bank drove green development with green
+finance. It actively supported green and low-carbon
+transformation, especially the financial needs of
+The Bank provided high-quality account services in a
+customer-centric manner. It actively implemented the
+requirements for "delegating power, streamlining
+administration and optimizing government
+services" and strengthened the digital convenient
+service coverage of settlement accounts in various
+typical scenarios. It enhanced cooperation with
+government departments, and provided enterprises
+with source account opening services through the
+"Enterprise Link" business. It broadened customer
+base by platform, and made the account opening
+appointment interface available to help improve the
+business environment.
++
+advanced manufacturing, green
+of multi-level capital market, strove to be the capital
+hub and leading bank in the capital market, and
+signed a tripartite strategic cooperation agreement
+with the National Equities Exchange and Quotations
+Co., Ltd. and Beijing Stock Exchange. It helped
+with interbank risk prevention and control through
+FinTech, and provided nearly 30 small and medium
+banks, securities companies, insurance and other
+interbank customers with five categories of scientific
+and technological products, including "ICBC
+BRAINS" intelligent anti-money laundering system
+and credit management system.
+The Bank actively integrated into the regional
+coordinated development strategy. It stepped
+up financial support focusing on coordinated
+development of the Beijing-Tianjin-Hebei region,
+integrated development of the Yangtze River
+Delta, Guangdong-Hong Kong-Macao Greater Bay
+Area, the rise of central China, and the Chengdu-
+Chongqing economic circle. At the end of 2021,
+RMB corporate loans in key regions reached
+RMB7.54 trillion, accounting for 71% of the balance
+of RMB corporate loans of domestic branches,
+representing an increase of RMB884.0 billion over
+the end of the previous year.
+Settlement and Cash Management
+Inclusive Finance
+In light of China's 14th Five-Year Plan and vision for the
+year 2035, the Bank implemented the new development
+concept, served the new development paradigm,
+and promoted high-quality development in the new
+development stage. With the high-quality development
+of inclusive finance as an important measure to better
+serve the real economy and enhance its competitiveness,
+the Bank continued to push forward product innovation,
+strengthen service channels, improve comprehensive
+services and promote the high-quality and sustainable
+development of inclusive financial services.
+35
+Discussion and Analysis
++
+4
+The Bank continuously provided stable and efficient
+inclusive credits. It adhered to digital inclusive
+development, accelerated the improvement of
+the centralized operation system and online and
+offline integrated service channels in line with
+the characteristics of "digital inclusive finance",
+and supported the sustained and rapid growth of
+inclusive loans and customers.
+The Bank provided targeted support for the key
+links of inclusive finance. Catering for the needs
+of the real economy, it increased first loans, loan
+renewal, credit loans and manufacturing loans for
+small and micro enterprises. It optimized the regional
+layout, and promoted the rapid business growth
+in the regions with active operation of small and
+micro enterprises, to attain the key regions-driven
+development. It stepped up support for regions with
+weak business foundation to achieve sustainable
+regional development.
+Innovation of inclusive finance products was
+advanced constantly. The Bank upgraded the "Quick
+Lending for Operation", accelerated the integration
+and application of multidimensional data, and
+improved the non-contact service mode. The Bank
+launched innovative scenarios such as "Technical
+Innovation Loan", "Prosperous Agriculture Loan"
+and "Solar Power Loan" to better meet the needs
+of market segments. The Bank continued to
+promote the online transformation of the whole
+process of "e-Mortgage Quick Loan" product, to
+improve business processing efficiency and customer
+experience; "e-Enterprise Quick Loan", an innovative
+financing product, was launched to further enrich
+online collateral products. The Bank optimized the
+financial service platform for supply chain, created
+a unified service portal for digital supply chain
+financing, and further enhanced its service capability.
+The Bank continuously enhanced the capability
+of inclusive finance services. It deeply identified
+customer needs, strengthened strategic coordination,
+and leveraged the Group's comprehensive business
+advantages to render the inclusive finance services
+that combined financing, consulting and commercial
+services; it continued to carry out a series of
+activities such as "ICBC Inclusive Finance Travel",
+"One Thousand Experts Serving Small and Micro
+Enterprises", "Ten Thousand Small and Micro
+Enterprises Growth Plan" and "Specialization,
+Refinement, Differentiation and Innovation •
+Chunfeng Action", and gradually formed a set
+of inclusive finance service models with strategic
+value; it gave full play to the advantages of the
+Group's domestic and foreign service outlets,
+Annual Report 2021
+At the end of 2021, inclusive small and micro
+enterprise loans amounted to RMB1,099,012 million,
+representing an increase of RMB378,448 million or
+52.5% over the beginning of the year; inclusive small
+and micro enterprise loan customers numbered 795
+thousand, representing an increase of 204 thousand;
+the average interest rate of newly granted inclusive
+loans was 4.10%. The balance of agriculture-related
+loans was RMB2,661,317 million, representing an
+increase of RMB404,101 million or 17.9% over the
+beginning of the year; the Bank had 1,182 thousand
+agriculture-related loan customers, representing
+an increase of 240 thousand; the average interest
+rate of newly granted agriculture-related loans was
+4.13%, down 19 basis points from the previous year.
+The Bank had 342 small and micro financial business
+centers, up 18 over the end of the previous year.
+registration and settlement, guarantee funds,
+payment systems and other financial infrastructure
+customers, and facilitated the development of
+financial institutions through platform services. It was
+among those first successfully participating in the
+commodity clearing business in Shanghai Clearing
+House, and ranked first in the market in terms of
+contractual customers and clearing amount. It was
+also among those first obtaining the online financing
+qualification of standard warehouse receipts on
+Dalian Commodity Exchange and carried out the first
+interbank transaction. The Bank served the building
+upgraded and built version 2.0 of the "ICBC Business
+Matchmaker", a cross-border matchmaking platform
+that provides intelligent, full-process and closed-
+loop cross-border matchmaking services consisting
+of five features, i.e. events, marketplace, feature
+zone, financial service and information message, and
+allows 7x24-hour, one-point access to the global
+industrial chain for small and medium enterprises.
+The Bank gave full play to the advantages of FinTech
+and tapped the growth potential in education,
+healthcare, public resources, social organizations and
+other fields. In the field of education, it took the lead
+in the industry to launch the "Education and Training
+Cloud" supervision platform, carried out IT-based
+fund supervision cooperation with 938 education
+authorities at all levels in China, and assisted to
+strengthen the management of education and
+training institutions and the supervision of training
+funds. In the medical field, the Bank launched
+the "ICBC Cloud Healthcare", an open platform
+of intelligent healthcare, and formed a matrix of
+intelligent healthcare products and services in 45
+sub-categories out of five categories, covering all
+services and products in line with the major policies
+on the national "healthcare, medical insurance and
+medicine" interconnection reform. It was awarded
+the "excellent case of digital healthcare innovation
+services" at the 16th China Health Information
+Technology Application and Exchange Conference
+of the Information Center of the National Health
+Commission. In the field of public resource trading,
+the Bank independently developed the "e-Enterprise
+Guarantee", a blockchain e-guarantee platform that
+provides a new online service mode of e-guarantee
+with automatic processing, real-time receiving and
+whole-process management in the field, and helps
+improve the business environment. In the field of
+social organizations, the Bank launched a "Civil
+Affairs Capital Verification Link" and cooperated
+with local civil affairs departments to provide
+online capital verification services for new social
+organizations.
++
+Discussion and Analysis
++
+ICBC
+36
+The Bank consolidated its dominant position in
+traditional fields such as finance and social security,
+and served the national reform. In the financial field,
+the Bank strengthened basic financial services for
+financial funds and provided high-quality financial
+services to financial departments and budget units
+at all levels; in the field of social security, "ICBC
+e Social Security" services were made available in
+all provinces and autonomous regions in China; in
+the field of agriculture, rural areas and farmers, it
+took the lead in the industry to launch the "Digital
+Villages" comprehensive service platform to assist
+agricultural and rural authorities at all levels in
+strengthening the standardized management of rural
+collective economy and improving the smart public
+services and social governance in rural areas, which
+have covered 31 provinces, 260 prefectures and
+cities across the country. The Bank has established
+information technology-based cooperation with
+770 district and county-level agricultural and rural
+departments. Its project was rated as "2021 Excellent
+Project of New Technology, New Product and New
+Model of Digital Agriculture in Rural Areas" by the
+Ministry of Agriculture and Rural Affairs.
+Institutional Banking
+The Bank built a new model of cooperation in
+financial institutions to serve the real economy.
+It improved the mechanism for customer service,
+established a "systematic, digital, ecological and
+professional" service system, and served thousands
+of customers of different types identified by level,
+class, group or category. It launched the "Gong
+Tong Ying", an innovative comprehensive service
+platform for financial customers, which provides
+customers with all-round and one-stop services. The
+Bank deepened financial infrastructure cooperation,
+optimized innovation support for exchanges,
+Bank Card Business
+In line with the buyer's market trend of wealth
+management, the Bank grasped the diversified needs
+of private banking customers, shifted from single
+product marketing to comprehensive service, and
+built a comprehensive service ecosystem for private
+banking customers jointly built in multiple scenarios
+of "individuals, families, enterprises and social
+responsibility".
+At the end of 2021, the Bank had 199.5 thousand
+private banking customers, representing an increase
+of 17.6 thousand or 9.7% over the end of the
+previous year. The assets under management
+totaled RMB2.32 trillion, representing an increase of
+RMB144.2 billion or 6.6%.
+The Bank was awarded the "Overall Best State-
+Owned Private Bank in China" by the Asiamoney, the
+"Excellent Private Bank of the Year" by the National
+Business Daily, and the "The Competitive Private
+Bank in 2021" by the China Business Journal.
+The Bank spared no effort to promote innovation
+in the field of green finance, worked with ICBC
+Wealth Management to create "Hengrui" series of
+green finance themed products, helped serve major
+strategies such as national rural revitalization and
+common prosperity, and carried forward China's
+contemporary entrepreneurship.
+The Bank adhered to product and service innovation.
+It made efforts to build a service ecosystem
+for entrepreneurs, and listed 100 branches as
+"Entrepreneurs Service Center". It jointly issued
+the Report on ICBC Entrepreneur Wealth Health
+Index with renowned universities. The Bank strove
+to build a comprehensive service platform for
+family customers, vigorously developed family trust
+consulting business, and successfully launched
+insurance trust, fund trust, equity trust and other
+full-spectrum family wealth management services.
+Based on the crossover scenario of "finance plus
+tourism", the Bank issued the co-branded credit
+card of ICBC Universal Beijing Resort with exclusive
+authorization. It also issued various innovative
+debit cards and carried out continuous promotional
+campaigns such as "Palace Museum Card Applicant
+Gifts" and "CNPC UnionPay Cloud Flash Pay
+Discount".
+ICBC
++
+Private Banking
+Discussion and Analysis
+In light of the "customer-centric" business philosophy, the Bank comprehensively promoted the transformation from
+"business-oriented" to "customer-oriented", strengthened the overall planning to meet the needs of customers, and
+significantly improved the cohesion and competitiveness of personal banking. Focusing on the building of personal
+customer ecosystem and customers' needs to spend money, make money, borrow money and manage money, the
+Bank promoted the comprehensive building of wealth management, consumer finance, payment and settlement
+and smart account business system, with the operation of key customer groups as the foothold. The Bank further
+strengthened capacity-building, assessment orientation and digital transformation, and established a digital operation,
+investment research and consulting, and innovation empowerment team of the Head Office, providing stronger
+support and guarantee for building the No.1 Personal Bank to the satisfaction of the people.
+In light of the core objective of strategic breakthrough, the Bank strengthened the upgrading of financial supply side
+services, and promoted high-quality business development. Personal deposits exceeded RMB12 trillion, hitting a new
+high. The cost was effectively controlled and the capacity of volume-price coordination was significantly enhanced. The
+balance of personal loans approached to RMB8 trillion. The quality of assets improved steadily, and the balance and
+ratio of non-performing loans both declined. Income from fee-based personal banking increased steadily.
+Focusing on the financial business "serving, benefiting and reassuring the people", the Bank improved the
+adaptability, competitiveness and inclusiveness of financial services, with the total number of personal customers
+topping 700 million. Among them, the number of mobile banking customers reached 469 million. Credit card
+consumption tended to recover gradually, giving an impetus to services for the strategy of expanding domestic
+demand. Focusing on the goal of common prosperity, the Bank vigorously developed wealth management business,
+managed personal financial assets of nearly RMB17 trillion, remaining in the leading position in the industry. The
+balance of personal wealth management products under the new rules stood at RMB1.71 trillion, representing an
+increase of 102.71% over the end of the previous year. Relying on "Rural Revitalization • Funong Card", the Bank
+quickened the pace of expanding county markets, and promoted financial services at the grass-roots level. It launched
+the "ICBC with You" service brand, created products, services, channels and theme activities suitable for the elderly,
+and accelerated the building of all-in-one social security card as a move to fulfill the responsibility of a large bank. It
+held nearly half of the newly increased market share of social security cards.
+The Bank accelerated the building of ICBC e Life
+platform by creatively promoting "credit card plus
+e-CNY" closed loop where both e-CNY payment and
+QR code payment could be completed with the e
+Life APP. The Bank supported the acceptance of Visa
+overseas cards in its e-CNY wallet to back up the
+Winter Olympic Games.
+In 2021, the Bank quickened the pace of deepening the No.1 Personal Bank Strategy, made new progress and new
+breakthroughs, and took on a new look.
++
+By the end of 2021, the Bank had issued 1,169
+million bank cards, an increment of 41.70 million
+compared with the end of last year. Specifically,
+1,006 million debit cards and 163 million credit
+cards had been issued. The overdraft balance of
+credit cards reached RMB692,339 million. In 2021,
+ICBC bank cards registered a spending volume of
+RMB22.99 trillion, including RMB20.43 trillion from
+debit cards and RMB2.56 trillion from credit cards.
+The building of intelligent custodian bank was
+advanced steadily. The Bank officially released the
+"ICBC Intelligent Custody System", launched the
+ICBC custody mobile banking and the intelligent
+investment service platform, and comprehensively
+improved its custody service.
+The Bank firmly implemented the regulatory requirements,
+seized development opportunities, pushed forward
+the transformation of asset management business
+and products in a steady and compliant manner and
+comprehensively enhanced investment management and
+research capabilities. It established an asset management
+business system allowing allocation of capital in all markets
+and value creation across the whole value chain by relying
+on the strength of the Group's asset management, custody
+and pension businesses as well as its comprehensive
+subsidiaries specialized in fund, insurance, leasing,
+investment banking and wealth management, to serve
+direct financing, and provide diversified, integrated and
+specialized services for customers.
+ICBC Deepened the No.1 Personal Bank Strategy
+Financial Market Business
+At the end of 2021, the annuity funds under custody
+amounted to RMB407.0 billion. The Bank managed
+11.98 million individual enterprise annuity accounts,
+and the annuity funds under custody reached
+RMB1,152.3 billion. The Bank obtained the trustee,
+custodian and investment manager qualifications
+for occupational annuities in 33 regions under
+overall planning, with the total size of occupational
+annuities of the three qualifications ranking first in
+the market. The Bank ranked first among peers in
+terms of the scale of enterprise annuity funds under
+custody, number of individual enterprise annuity
+accounts and annuity funds under custody.
++
+The Bank won the "Tianji Award for Pension
+Financial Services Bank of the Year" by the
+Securities Times, the "2021 Top 10 Supply Wealth
+Management Innovation" by The Chinese Banker,
+and the "2020-2021 Investible Pension Financial
+Institution" by the Economic Observer.
+In light of China's strategy of actively responding to
+the aging population, the Bank made every effort
+to promote the transformation and development of
+pension business to pension finance business, build
+a business ecosystem centering on pension fund
+finance, senior care service finance and senior care
+industry finance, help improve people's well-being
+and fulfill the responsibilities of a large bank.
+Pension Services
+At the end of 2021, the size of custody business
+reached RMB22.1 trillion.
+Asset Management Services
+The Bank was awarded the "Best Custodian Bank in
+China" and the "Best Insurance Custodian Bank in
+China" by The Asset and the "Best Custodian Bank
+in China (Mega Bank)" by The Asian Banker.
++
+4
++
+Asset Custody Services
+Discussion and Analysis
+41
+Annual Report 2021
+Wealth Management Services
+New breakthroughs were made in key products,
+and the Bank's leading position in the industry
+was further consolidated. The mutual funds under
+custody amounted to RMB3.7 trillion, representing
+an increase of RMB663.7 billion over the end of
+the previous year. The pension funds under custody
+totaled RMB2.3 trillion, an increase of RMB359.1
+billion. The enterprise annuity funds, occupational
+annuity funds and pension fund products under
+custody ranked first in the industry. The insurance
+asset under custody was RMB5.9 trillion, an increase
+of RMB479.8 billion. The Bank achieved an important
+breakthrough in global custody business, and was
+approved eligible for the first batch of pilot custody
+and clearing bank under "Southbound Bond
+Connect" scheme. The outsourcing business of asset
+management products developed rapidly, with a size
+over RMB2.5 trillion.
+2021
+39
+2019
+Discussion and Analysis
+Money Market Activities
+Annual Report 2021
+At the end of 2021, the number of personal
+customers increased by 23.41 million over the end of
+the previous year to 704 million. Personal financial
+assets totaled RMB 16.96 trillion. Specifically,
+personal deposits reached RMB12,497,968 million,
+representing an increase of RMB837,432 million
+or 7.2%. Personal loans stood at RMB7,944,781
+million, representing an increase of RMB829,502
+million or 11.7%. Funds under agency sales
+amounted to RMB645.4 billion, government bonds
+under agency distribution were valued at RMB57
+billion, and personal insurance products under
+agency sales reported at RMB108.2 billion.
+The Bank fully met customers' consumer financing
+needs. Adhering to the guideline that "housing is
+for living in, not for speculation", the Bank satisfied
+the reasonable needs of customers, including first
+time home buyers, and continued to carry out
+special marketing activities, such as "Home-backed
+Finance", "Merchants Mate", "Online Merchants
+Loan" and "Entrepreneurship Dream".
+Bank promoted the transformation and
+development of wealth management business. It
+organized and carried out activities such as "828
+ICBC Wealth Season" and "AXA Theme Day",
+launched a series of wealth management products
+that are open, selected, best-selling and exclusive
+under new financial regulations, and promoted
+intelligent asset allocation services.
+The
+The broadest customer base service system was
+upgraded comprehensively. Being customer-centric,
+the Bank launched "ICBC Star Privileges", a brand-
+new high-star personal customer value-added
+equity brand, and deeply carried out the activities,
+including "March Forward with Wealth and Gift", a
+medium and high-end customer marketing activity,
+"Treasure Hunt", a credit reward activity, and "Star
+Promotion", a targeted marketing activity. The
+number of customers with the average monthly/daily
+financial assets of RMB50,000 and above increased
+by 6.5% over the end of the previous year.
+4
+It upgraded the "intelligent brain" decision pivot.
+Relying on the "intelligent brain", the Bank drew
+up a plan for differentiated and targeted services,
+and developed the overall plan and strategy for
+personal customer marketing services through online
+and offline multi-channel service outlets. A total of
+34 intelligent models have been developed and put
+into operation to realize automatic triggering and
+real-time response, strengthen the empowerment
+support for marketing and management
+personnel, and promote the digital and intelligent
+transformation of personal banking.
++
+In 2021, the Bank continued to deepen the No.1 Personal
+Bank Strategy, to make it a bank satisfactory to the
+people. Focusing on the building of an individual customer
+ecosystem, the Bank promoted the high-quality business
+development relying on the "intelligent brain" decision
+pivot and full-spectrum operation system.
+Personal Banking
+In 2021, discounted bills amounted to
+RMB1,708,223 million, representing an increase of
+15.8% year on year, ranking first in the market.
+Discounted bills for small and micro enterprises
+reached RMB473,966 million. At the end of 2021,
+the balance of discounted bills for small and micro
+enterprises was RMB213,796 million.
+The Bank grasped the development trend of financial
+services, successfully made a debut of banker's
+acceptance rediscounting service of supply chain bill
+in China, and launched featured products such as
+"Monthly Discount", "Weekend Discount", "ICBC
+i Green Discount", "Supply Chain Bill Pay Plus",
+"ICBC e Discount + Agreed Interest". The "bill
+business platform scenario" project was connected
+with the high-quality industrial platform to further
+improve the user function experience of bill business
+in corporate internet banking channels.
++
+Discounted Bills
+40
+2020
+Personal Deposits
+Personal Loans
+Demand deposits
+2021
+2020
+Time deposits
+2019
+71,073.86
+64,639.29
+61,496.54
+HE H
+Ht
+79,447.81
+71,152.79
+63,836.24
+53,905.82
+51,966.07
+43,280.90
+Unit: RMB100 millions
+Unit: RMB100 millions
+In terms of RMB, the Bank actively fulfilled its
+responsibilities as a large bank and assisted in
+maintaining the smooth operation of the money
+market. It rationally devised financing maturities,
+varieties and counterparty structure, and constantly
+improved the profitability of fund operation. As
+it steadily promoted business innovation and
+development, it completed the first batch of offshore
+RMB negotiable certificate of deposit ("NCD")
+investments via "Southbound Connect".
+In compliance with regulatory requirements and
+New Rules on Asset Management, the Bank made
+comprehensive use of wealth management product
+undertaking, asset return to the balance sheet and
+market-based transfer and other measures that
+comply with the new regulations, and overdid the
+task of rectifying and reducing existing wealth
+management products during the transition
+period. At the end of 2021, the balance of wealth
+management products reached RMB2,586.9 billion.
+Please refer to the section headed "Business
+Overview Diversified Operation and Subsidiary
+Management" for details on the business
+development of ICBC Wealth Management.
+ICBC
+Accelerating Reforms of Technology
+Governance Mechanisms
+Innovating in ecosystem cooperation. The Bank built
+the "1+N" intelligent government services product
+system and established the "all-in-one network"
+government service platform to fully empower
+government services. It promoted integration
+of government service data across the board
+and launched more than 300 bank-government
+cooperation scenarios in 29 branches. The Bank
+I was one of the first contracted data traders of
+the Shanghai Data Exchange, concluded the first
+transaction and the first financing based on the data
+asset voucher at the Shanghai Data Exchange, and
+strengthened innovation in cooperation with local
+data markets. The Bank built an intelligent industry
+ecosystem, by establishing a series of platforms
+such as Julian and Jurong, connecting to supply
+chain scenarios in the upstream and downstream
+sections of large enterprises such as procurement
+and sales management, providing a package of
+personalized financial services, and empowering the
+transformation and upgrading into digital supply
+chains.
++
+Discussion and Analysis
+ICBC
+46
+Strengthening product innovation. The Bank
+upgraded the intelligent custody platform,
+launched the featured deposit product "Intelligent
+Corporate Deposit Express", added e-CNY support
+into ICBC e Bill Pay and bank-enterprise interlink,
+and completed the industry's first public e-CNY
+payment with the State Grid e-commerce platform,
+the first of its kind in the industry. The Bank
+empowered cross-border finance. It established
+the "Southbound Bond Connect" business system
+to support the development of cross-border
+RMB business. It promoted the innovation and
+application of the Intelligent Trade Finance Platform.
+It was the first among its peers to join the cross-
+border financial blockchain service platform of
+the State Administration of Foreign Exchange
+as an authentication node, it was among the
+first institutions in the industry to complete the
+connection to the electronic L/C forfaiting system
+of PBC, and it was also the first in the industry
+to embed L/C products into the customs' Single
+Window platform. The Bank innovated in inclusive
+finance and launched "ICBC Inclusive", the three-
+in-one online channel brand that combines "an
+exclusive version of personal mobile banking, a
+WeChat applet, and a dedicated zone in enterprise
+mobile banking". It upgraded the cross-border
+business matchmaking platform, "ICBC Business
+Matchmaker", and launched its 2.0, which provides
+intelligent, whole-process closed-loop cross-border
+business matchmaking services to small and medium
+enterprises. The Bank empowered rural revitalization.
+It creatively launched the ICBC Xingnongtong APP,
+an online financial service channel for rural areas
+featured by services and functions concerning
+people's livelihood, agency services, inclusive finance
+services, village affairs, etc. It also established
+three service platforms, namely, the Xingnong
+matchmaking platform, the rural revitalization
+statistical monitoring platform, and the "Digital
+Villages" comprehensive service platform, to assist in
+the digital transformation of rural finance.
++
+Promoting model innovation. The Bank encouraged
+innovation in non-contact services. It was the first
+among its peers to launch the "Cloud ICBC" brand
+system. By integrating and optimizing diverse service
+scenarios such as cloud business handling, screen-
+to-screen handling of urgent matters, around-the-
+clock communication, service integration, open-
+type intelligent ecosystem, etc., the system allows
+customers to handle their banking business anytime
+anywhere. The Bank promoted innovation in
+integration of data and intelligent technology. The
+Bank was the first in the industry to establish the
+enterprise-level data middle-office and was also
+the first to load the whole group's data into the
+data lake. It deposited 14 categories of customer
+features and provided more than 1,000 enterprise-
+level data services to business systems in the fields of
+customer marketing, product innovation, risk control,
+operation management, etc., which fully improved
+the capability to convert enterprise data into value.
+The Bank upgraded "intelligent brain" marketing
+and offered intelligent service solutions that are
+unique to 700 million personal customers. By
+using interactive techniques such as digital human,
+intelligent Q&As and voice interaction, the Bank
+intensified application of "Machine substitution" at
+the front office of customer service, the back office
+of business operation, etc. and launched more than
+600 intelligent application scenarios with digital
+employee attributes.
++
+Centering on the needs of national strategies such as
+serving the real economy, preventing financial risks and
+deepening the financial reform, based on the intelligent
+banking ecosystem development project ECOS, the Bank
+deepened technological empowerment from the three
+dimensions of model innovation, production innovation,
+and ecosystem opening up and innovation and developed a
+series of quality services that the people are satisfied with.
+Promoting Innovation as a Drive of High-
+quality Development of the Bank
+Discussion and Analysis
+45
+Annual Report 2021
+Group's information security protection
+capability was further improved. The Bank promoted
+the implementation of version 2.0 of network
+security rating and protection regulations and
+completed external evaluations for all its protection
+systems, all of were granted the highest grade
+of "Excellent". The Bank established the group-
+wide integrated intelligent information security
+management sub-center, allowing tier-one (directly
+managed) branches to conduct automated and
+visual management of tier-two branches within their
+jurisdiction. The Bank preliminarily established a
+financial attack-defense range and a safe operation
+model that uses attack to improve defense which
+won the first place in many security competitions
+held by the relevant departments. As the first
+financial institution member of the technology team
+of the China National Vulnerability Database (CNVD),
+the Bank fulfilled its responsibilities as a large bank
+and actively looked for 0 day vulnerabilities.
+The
+The Bank deepened the layout of FinTech consisting of
+"one department, three centers, one subsidiary, and one
+research institute". It stepped up efforts in mechanism
+innovation, promoted penetration of the technology
+gene, continued to improve financial innovation response
+efficiency and supply capability, and unleashed the
+vitality of the Bank's FinTech innovation. The Bank
+invested RMB25,987 million in FinTech in 2021, and it
+had 35 thousand FinTech personnel at the end of 2021,
+accounting for 8.1% of all employees across the Bank.
++
+-
+targeted incentives to unleash talents' innovation
+vitality. Meanwhile, the Bank established the open
+competition mechanism to encourage innovation,
+implemented the agile R&D model across the board,
+and organized more than one hundred flexible teams
+for agile R&D, who efficiently responded market
+demand. ICBC Information and Technology (Beijing)
+Co., Ltd. was established to reinforce the value
+output capability and market influence.
+In terms of foreign currencies, the Bank continued
+to strengthen research of global central banks'
+monetary policies and closely tracked changes in the
+fund liquidity and interest rates of foreign currency
+markets. While ensuring liquidity safety, it flexibly
+employed foreign currency market operation tools to
+support the foreign currency financing needs of the
+real economy. The Bank was among the first on the
+market to make foreign currency repurchase with
+domestic foreign currency NCD and bonds under
+custody of China Bond as collaterals. In 2021, the
+Bank won many honors, including the "Best Foreign
+Currency Lending Panel Bank", the "Best Foreign
+Currency Lending Member" and the "Best Foreign
+Currency Repo Member" conferred by China Foreign
+Exchange Trade System.
+ICBC
+48
+Deepening online and offline integrated
+development. A total of 16 thousand "cloud"
+outlets, 28 thousand wealth managers, over 100
+remote customer service representatives provided
+online and offline integrated services in the
+"intelligent manual" and "text + voice + video"
+forms via "cloud outlets, cloud studios and cloud
+customer service", making the Bank, employees
+and services available online. The services and
+functions of "cloud" outlets were upgraded, and
+capabilities in online and offline marketing and
+publicity, characteristic operation and collaborative
+output were improved. Twelve cloud outlets with
+ancient building characteristics and benchmarking
+"cloud" outlets on Universal City Walk were created,
+and marketing of characteristic outlet brands was
+strengthened. Enterprise-level WeChat accounts
+were integrated and upgraded, resulting in resource
+concentration and efficient operation of the WeChat
+ecosystem. Moreover, connection between mobile
+banking and remote banking and outlets was
+deepened, with the launch of the real-time same-
+screen tutoring service, an upgrade from "face
+Improving the functions and user experience of
+enterprise mobile banking and internet banking.
+The Bank launched Enterprise Mobile Banking 4.0,
+improved the basic platform service capability of
+enterprise internet finance, and carried out the
+"Excellence Project" of frequently used functions
+of corporate internet banking. In 2021, average of
+the monthly active customers of corporate internet
+banking hit 4.41 million, and that of Enterprise
+Mobile Banking 1.60 million. The Bank maintained a
+leading position by customer activity in the industry.
+Deepening government-business-consumption
+coordination and assisting in "net making and
+patching" program. Seizing the opportunities of
+reforms to streamline administration and delegate
+power, improve regulation, and upgrade services
+and the development of digital economy, the Bank
+promoted bank-government-enterprise cooperation
+in depth. Through "Ju Fu Tong", it connected to
+nearly 200 platforms and served 73 government
+and public service platforms. The Bank assisted
+customers in traditional manufacturing circulation
+fields in going online and served 26 thousand
+corporate customers. In the field of consumer
+internet, the Bank actively explored cross-border
+e-commerce business, intensified marketing of cross-
+border e-commerce platforms, and strengthened
+cooperation with rural revitalization related
+platforms. In this field, it served 19.60 million
+personal customers.
+Building No.1 Personal Mobile Bank and empowering
+the No.1 Personal Bank Strategy. The Bank launched
+Version 7.0 of personal mobile banking that features
+"five intelligent companionships", namely, wealth
+companionship, cloud companionship, exclusive
+companionship, account companionship, and
+privilege companionship and provides interaction
+in all respects and companionship throughout the
+whole customer journey. The Bank established a
+personalized service system. It released exclusive
+versions including Happy Life Version 2.0, Beautiful
+Home Version 2.0, Inclusive Finance for Small and
+Micro Enterprises Version 1.0, the English version
+and the payroll payment agency service zone, "ICBC
+Salary Manager", improved exclusive services for
+key customer groups such as elderly customers,
+customers in counties, small and micro enterprises,
+cross-border service customers and payroll payment
+agency service customers, and met customers'
+diversified financial needs. The Bank improved
+user experience of mobile banking by upgrading a
+number of frequently used transaction functions.
+It also intensified precision marketing of financial
+products. Wealth management, fund and insurance
+transaction volume via online channels accounted
+for over 95%. At the end of 2021, personal mobile
+banking customers recorded 469 million, and ICBC
+Mobile Banking became the first application in
+banking industry that topped 100 million monthly
+active users ("MAU"), with over 150 million MAUS
+at mobile terminals, leading the industry in terms of
+customer size and activity.
+Accelerating Platform Innovation and
+Deepening Synergy among Channels
+Finance.
+The transformation of production and operation
+maintenance was carried out in an orderly manner.
+The Bank strengthened technical support capacity.
+Based on the distributed system framework,
+it realized the betterment of high-availability
+architecture deployment of key business lines such
+as mobile banking, internet banking, fast payment,
+financial markets, etc. The Bank improved emergency
+response capability. It was the first among its peers
+to complete the total switching drill of the cloud
+platform, and successfully simulated cross-park quick
+emergency switch at the ten-thousand node level
+under large-scale, complex fault scenarios. The drill
+verified the high availability level of key technology
+infrastructure. The Bank optimized the business
+operation monitoring system and realized full-link
+integrated monitoring of application and equipment
+in key applications, and formed correlation analysis
+and full-link tracking capabilities of cross-application
+transactions.
+The Bank actively adapted to new needs of the digital
+development of the national economy. Based on key
+strategies, it accelerated reform and innovation, made
+overall plans for all channels, services via all channels and
+online customer operation, promoted the development
+of e-ICBC 4.0, and built the "One Body, Two Wings"
+development pattern featuring "own platforms + open
+banking". In 2021, transaction volume via electronic
+channels hit RMB732.85 trillion, an increase of 14.4%
+from the previous year, and business handled via electronic
+channels accounted for 98.8%. The Bank won a number of
+important awards in the field of internet finance, including
+"Best Digital Consumer Bank in China" and "Best
+Corporate/Institutional Digital Bank in China" from Global
+Discussion and Analysis
+47
+Annual Report 2021
+launch", which has supported and assisted in the
+spreading of creativity across the Bank.
+-
+-
+Building an innovation culture. The Bank has held
+the ICBC Cup FinTech Innovation Competition for
+National College Students outside the Bank for
+12 consecutive years. In 2021, more than 40,000
+students from some 700 universities across the
+country signed up and submitted over 8,000 works.
+The Competition focused on hot issues and key
+fields, stimulated students' innovation vitality, and
+created a good technological innovation atmosphere.
+Within the Bank, by holding "Creative ICBC" series
+activities and establishing the incubation system,
+the Bank has formed the long-acting mechanism
+of "gathering tutoring - testing incubation
+Deepening industry-university-research-application.
+The Bank gave play to the R&D capabilities of the
+FinTech Institute and laboratories and strengthened
+joint innovation and R&D. Centering on prospective
+technology fields such as secure multi-party
+computation, federal learning, quantum technology,
+blockchain, 5G application, etc., joint laboratories
+such as financial information infrastructure, financial
+application of 5G, Al, etc. were built, assisting in
+China's independent technological innovation. The
+Bank cooperated with scientific research institutes
+and leading enterprises and focused on cutting-edge
+technologies. The Bank was the first in the industry
+to release the White Paper on Privacy Computing in
+Promoting the Development of the Data Ecosystem
+of the Financial Industry, and a total of 12 projects
+were designated as the pilot projects for innovation
+and supervision of FinTech, among which "IoT-
+based Item Traceability Certification Management
+and Supply Chain Finance" was among the first pilot
+projects completed for whole-process innovation and
+supervision of FinTech in China.
+Internet Finance
+The Bank took the initiative to deal with the new
+challenges brought by the complex and volatile external
+situation and technological reforms, adhered to the
+bottom line of safe production, further promoted the
+transformation of production, operation and maintenance,
+and upgraded and built in an information security defense
+system for the whole group and the whole process. The
+Group's production safety was maintained at a high level.
+Building an active pattern and increasing innovation
+supply. The Bank implemented the FinTech talent
+development project, carried out the "Tech Elite"
+training program, and actively introduced high-
+end social technical personnel. It fully promoted
+the "trained by technology used by business"
+talent pool mechanism and used layered and
+The Bank explored new "highlands" in cutting-
+edge technologies. By integrating satellite remote
+sensing technology with Al technology and using
+high-definition satellite remote sensing data and
+intelligent monitoring models, the Bank conducted
+post-lending monitoring of crop growth and
+construction of large engineering projects. The
+Bank was the first in the industry to complete the
+homemade intelligent POS monitoring system with
+the Beidou Navigation Satellite System as its only
+signal source. It made breakthroughs in the feasibility
+testing and pilot application of quantum technology
+in important financial encryption scenarios. It
+employed the privacy computation technology to
+develop innovative post-lending risk monitoring
+measures regarding small and micro enterprises.
+Asset Securitization Business
+Discussion and Analysis
+43
+Annual Report 2021
+an
+In terms of foreign exchange settlement and sales on
+behalf of customers and foreign exchange trading,
+the Bank continuously enriched foreign exchange
+settlement and sales and foreign exchange trading
+currencies, improved the trading functions of online
+channels, and provided convenient service for
+enterprises in exchange rate risk management. In
+terms of corporate commodity derivative trading,
+under the routine pandemic control mechanism, the
+Bank actively carried out online business promotion
+and marketing to attract customers, delivered good
+service to existing customers, promptly responded
+to customer queries and trading needs, and helped
+corporate customers properly respond to commodity
+price fluctuation risks during the pandemic. In terms
+of RMB interest rate derivative business, the Bank
+continued to provide interest rate risk management
+service to corporate customers like small and micro
+enterprises and manufacturing enterprises. In terms
+of the over-the-counter ("OTC") bond business,
+the Bank distributed China Development Bank's
+financial bonds with the themes of "Coordinated
+Development of the Beijing-Tianjin-Hebei Region"
+"Carbon Neutrality" and "Ecological Protection and
+High-quality Development of the Yellow River Basin",
+Agricultural Development Bank of China's "Carbon
+Neutrality" financial bonds and the OTC local
+government bonds in 36 provinces (autonomous
+regions, municipalities directly under the Central
+Government, and cities specifically designated in
+the state plan) to investors in the OTC market,
+contributing to the coordinated development of
+key regions and assisting in green finance, rural
+revitalization and regional development. The Bank
+was awarded the "Excellent Underwriter Award
+for Over-the-counter Circulating Bonds" and
+"Excellent Underwriter Award for Over-the-
+Counter Local Government Bonds" by China Central
+Depository & Clearing Co., Ltd. In terms of foreign
+institutional investors trading business in China's
+inter-bank market, the Bank took an active part in
+serving foreign institutional investors from more
+than 60 countries and regions. It won the "Opening-
+Up Contribution Award" granted by the National
+Interbank Funding Center and the "Excellent
+Settlement Agent under Global Connect Business"
+granted by China Central Depository & Clearing Co.,
+Ltd.
+Discussion and Analysis
+The Bank reasonably adjusted the financing structure
+based on liquidity management requirements, and
+operating benefit improved steadily. It actively
+advanced the development of the business system,
+improved the level of refined business management,
+and promoted the steady development of the
+financing business. For details on the Bank's CDs and
+debt securities issued, please refer to "Note to the
+Consolidated Financial Statements: 33. Certificates of
+Deposit; 35. Debt Securities Issued".
++
+Financing
+In 2021, the Bank was honored as the "Top
+Investment Houses in Asian G3 Bonds" by The Asset.
+In terms of foreign-currency bonds, the Bank
+steadily increased investments, moderately expanded
+portfolio investments, optimized the portfolio
+structure, and intensified support to the real
+economy and green finance. It completed the first
+batch of foreign-currency bond transactions via
+"Southbound Connect".
+In terms of RMB bonds, the Bank continued to
+strengthen its capability to serve the real economy.
+It actively invested in local government bonds in
+strategic regions and key fields, and the scale of
+new investment in local government bonds ranked
+No.1 in the market for the seventh consecutive year.
+The Bank actively practiced green and low-carbon
+development and the rural revitalization strategy.
+It was among the first banks to invest in carbon
+neutrality bonds and sustainability linked bonds,
+and increased investment in rural revitalization
+bonds. Meanwhile, the Bank actively invested
+in energy supply guarantee related bonds, and
+bonds of advanced manufacturing industry and
+private enterprises, to give full play to the financial
+guarantee for energy security effect.
++
+Investment
+Reinforcing Production Safety
+42
++
+The asset securitization business effectively
+supported the Bank in disposing of non-performing
+assets and optimizing credit structure, and further
+improved the Bank's capability to serve the real
+economy. In 2021, the Bank issued 19 asset-backed
+securities totaling RMB112,592 million, including the
+first green vehicle installment asset-backed securities
+issued by a commercial bank in China. By introducing
+cross-border funds via "Bond Connect", it further
+promoted financial cooperation between domestic
+and foreign institutions and the two-way opening up
+of the Chinese green bond market.
+Treasury Trading Business on Behalf of
+Customers
+Precious Metal Business
+A series of leading enterprise-level independent
+innovation technology platforms were built. The
+Bank built the first, reliable, efficient and scalable
+big data platform among peers, and established a
+big data service ecosystem integrating technology,
+data and services. It upgraded Al technology systems.
+It was the first among its peers to complete the
+enterprise-level Robot Process Automation ("RPA")
+platform, and also the first to pass the application
+maturity assessment of RPA systems and tools by
+the Ministry of Industry and Information Technology
+and the China Academy of Information and
+Communications Technology. A blockchain platform
+with proprietary intellectual property rights was built,
+which has integrated more than 150 technology
+breakthroughs. It was among the first batch to pass
+the five certifications under special evaluation for
+"Trusted Blockchain" by the Ministry of Industry and
+Information Technology and the China Academy of
+Information and Communications Technology, and
+was selected as part of the 2021 Blockchain 50 by
+Forbes.
+stack basic resources for independent innovation.
+The Bank sought technology breakthroughs in key
+fields such as cloud platforms, operating system
+and database in a centralized way, connected
+key breakpoints in the independent innovation
+and transformation of the financial industry, and
+developed a complete package of technical solutions
+that can be copied and promoted for various fields
+including office management, data analysis, risk
+control, business management, regulatory reporting,
+etc., providing a model template for independent
+innovation, transformation, upgrading, application
+and promotion for the financial industry.
+Discussion and Analysis
+ICBC
+44
+1 Refers to AI, BLOCK-CHAIN, Cloud Computing, Big Data and IoT.
+The Bank spared no effort to promote technology
+breakthroughs in key fields. The Bank was the first
+among its peers to realize the deployment of the
+"one cloud with multiple cores" architecture and to
+complete the compatible adaption of cloud platforms
+with general open platforms and the independent
+innovation technology system, which provided the
+Bank with the large-scale supply capacity of full
+The Bank adhered to technology self-reliance, promoted
+technology breakthrough in key fields of infrastructure
+system, and strengthened research and application of
+cutting-edge technologies. A series of new enterprise-
+level technology platforms with strong service capability
+and industry-leading advantages were built up based on
+5G+ABCDI'. As at the end of 2021, the Bank had the most
+newly added and accumulated patents among Chinese
+banks.
+Fortifying Digital Infrastructure
+The Bank built the world-leading "cloud computing
++ distributed" technology architecture, leading the
+industry to transform from a traditional centralized
+one to a fully distributed one. The Bank completed
+the world's largest financial cloud platform with the
+strongest technological capacity and full coverage
+of business scenarios. With the platform, it realized
+automated and intensive management and full
+stack independent innovation cloud service supply.
+The Bank was the first among its peers to meet the
+Level 4 security capacity requirement for private
+clouds and the Level 3 security capacity requirement
+for ecosystem clouds, and it declared more than
+200 patents for invention. It also established the
+distributed technology system with the most systems
+and the most extensive application among its peers,
+with an average daily service invocation of over 12.0
+billion times.
+Discussion and Analysis
+Centering on the FinTech development plan (2021-2023),
+the Bank practiced technology self-reliance, strengthened
+the "dual wheel drive" of technological innovation
+and system reform, built new advantages in FinTech
+development, and empowered the development of
+"D-ICBC" with technology, which assisted in the Bank's
+high-quality development and better fostered a new
+development pattern.
+FinTech
+The Bank promoted
+development of the physical precious metal
+business, to meet customers' demands for quality
+improvement in investment and consumption. It
+launched physical precious metal products with the
+theme of China International Import Expo, and on
+the basis of the "Magnificent China" theme, it rolled
+out "Most Beautiful Hometown" and "Beautiful
+Countryside" physical precious metal product
+series to fully demonstrate the appearance of rural
+revitalization. It also promoted the green and low-
+carbon development of the precious metal leasing
+business and opened up new space for business
+development. In 2021, the Bank ranked first among
+all dealers in Shanghai Gold Exchange in terms of
+gold and silver trading volume, clearing amount and
+gold leasing scale, was reelected "First Prize Winner
+of the Excellent Financial Member" by Shanghai Gold
+Exchange, and was named "Best Provider of Precious
+Metals Services" by Global Finance.
+transformation and
+the
+In 2021, the Bank was ranked at first place in the
+banking industry for the eighth consecutive year in
+CBIRC's IT supervision ratings. The intelligent banking
+ecosystem ECOS won PBC's special award of the "FinTech
+Development Awards". The Bank became the first
+enterprise in the Chinese financial industry to obtain the
+highest Data Management Capability Maturity (DCMM)
+rating (Level 5), and it won the "Best Financial Innovation
+Award" from The Chinese Banker for the sixth consecutive
+year.
++
+56
+Institutions (country/region)
+Asia-Pacific Region (except Hong Kong SAR and Macau SAR)
+reporting period was USD3,414 million, representing
+an increase of USD397 million or 13.2% and
+accounting for 5.1% of the Group's profit before
+taxation. Total loans amounted to USD197,279
+million, representing a decrease of USD5,565 million
+or 2.7% from the end of the previous year; and total
+deposits were USD149,273 million, representing an
+increase of USD1,052 million or 0.7%.
+ICBC
+DISTRIBUTION OF OVERSEAS INSTITUTIONS
+Tokyo Branch (Japan)
+Discussion and Analysis
+Seoul Branch (South Korea)
+Busan Branch (South Korea)
+Mongolia Representative
+ICBC (New Zealand) (New
+Zealand)
+ICBC (Thai) (Thailand)
+Hanoi Branch (Vietnam)
+Ho Chi Minh City Representative
+Office (Vietnam)
+Vientiane Branch (Lao PDR)
+Phnom Penh Branch (Cambodia)
+Yangon Branch (Myanmar)
+ICBC (Almaty) (Kazakhstan)
+Karachi Branch (Pakistan)
+Mumbai Branch (India)
+Dubai (DIFC) Branch (UAE)
+Abu Dhabi Branch (UAE)
+Doha Branch (Qatar)
+Riyadh Branch (Saudi Arabia)
+Kuwait Branch (Kuwait)
+Sydney Branch (Australia)
+Europe
+As at the end of 2021, total assets of overseas
+institutions (including overseas branches, subsidiaries
+and investment in Standard Bank) of the Bank were
+USD455,419 million, representing an increase of
+USD33,340 million or 7.9% from the end of the
+previous year, and they accounted for 8.2% of the
+Group's total assets. Profit before taxation during the
+Auckland Branch (New Zealand)
+Office (Mongolia)
+Singapore Branch (Singapore)
+ICBC (Indonesia) (Indonesia)
+ICBC (Malaysia) (Malaysia)
+Manila Branch (Philippines)
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the Bank's
+gain on investment recognized by the Bank during the reporting period.
+Subtotal
+421
+Institutions (country/region)
+Eliminations
+(51,999)
+(44,378)
+451,549
+418,192
+3,084
+2,859
+421
+426
+426
+3,870
+3,887
+330
+158
+Total
+455,419
+422,079
+3,414
+3,017
+Investment in Standard Bank(1)
+Frankfurt Branch (Germany)
+Luxembourg Branch (Luxembourg)
+ICBC (Europe) (Luxembourg)
+Paris Branch (France)
+Amsterdam Branch
+At the end of 2021, ICBC Credit Suisse Asset
+Management managed 207 mutual funds, and more
+than 690 annuities, special accounts and special
+portfolios, with assets totaling RMB1.72 trillion.
+Brussels Branch (Belgium)
+Milan Branch (Italy)
+Madrid Branch (Spain)
+Warsaw Branch (Poland)
+Greece Representative Office
+(Greece)
+Argentina (Argentina)
+Inversora Diagonal (Argentina)
+Panama Branch (Panama)
+Annual Report 2021
+57
+Discussion and Analysis
+Diversified Operation and Subsidiary
+Management
+The Bank remained committed to serving the real
+economy and supply-side structural reform, focused on
+main business, refined specialized business, and gradually
+created a diversified operation pattern covering fund,
+leasing, overseas investment banking, insurance, wealth
+management, debt-for-equity swap and technology.
+Strategic coordination efficiency was continuously raised.
+The Bank made unremitting efforts in perfecting the
+management system of "Four Beams and Eight Columns",
+issued the Rules for Management of Overseas Institutions,
+Rules for Management of Domestic Integrated Subsidiaries
+and other important policies, and established a subsidiary
+management mechanism featuring "leading coordination
+and focusing on lines" to promote the perfection of the
+subsidiary management system.
+The Bank optimized the governance structure of
+subsidiaries, strengthened the support for duty
+performance by directors and supervisors assigned
+to subsidiaries, promoted the organic integration of
+Party building and corporate governance of domestic
+subsidiaries, and continuously improved the effectiveness
+of corporate governance of subsidiaries. The Bank
+promoted the deep and accurate transmission of the
+Group's strategy to subsidiaries, and improved the Group's
+full-product, full-market, full-process and full-lifecycle
+service system and value chain. The Bank improved the
+efficiency of capital use, and optimized the assessment
+mechanism and resource allocation. The industry influence,
+core competitiveness and customer service capability of
+subsidiaries were constantly enhanced.
+The Bank strictly abided by local regulatory requirements,
+developed the Group's unified risk management strategy
+and risk appetite based on the work idea of "plan
+ahead, see the big from the small, remedy in time and
+draw inferences", promoted inclusion of investment and
+financing data of domestic subsidiaries into the data lake
+to effectively identify, measure, monitor, control and report
+various risks, and enhanced enterprise risk management.
+The Bank adopted strict consolidated and penetration
+management, improved risk prevention & control and
+internal control & compliance capabilities, and pursued
+high-quality development.
+ICBC CREDIT SUISSE ASSET MANAGEMENT
+ICBC Credit Suisse Asset Management is mainly engaged
+in fund raising, fund sales, asset management and other
+businesses approved by CSRC. It had many business
+qualifications such as mutual fund, QDII, enterprise
+annuity, specific asset management, domestic (foreign)
+investment manager of social security fund, RQFII,
+insurance fund management, special asset management,
+occupational annuity and basic endowment insurance
+investment manager, and was one of the "fully qualified"
+fund companies in the industry.
++
+ICBC Credit Suisse Asset Management quickened
+steps in high-quality development, and continuously
+improved the value contribution. The investment
+performance remained in a leading position and
+the average yields of equity funds and bond funds
+actively managed remained in the forefront of
+large fund companies. ICBC Credit Suisse Asset
+Management practiced the concept of socially
+responsible investing, and won the "Gold Fund SRI
+(ESG) Return Fund Management Company Award"
+of Shanghai Securities News.
+ICBC Credit Suisse Asset Management served the
+wealth management needs of residents. It upgraded
+the customer service mode and provided the
+whole process companion service of "investment +
+advisory". It set up an investor protection committee,
+strengthened the protection of investors' legitimate
+rights and interests, and further promoted investor
+education, which was evaluated as excellent in the
+assessment of the national securities and futures
+investor education base.
+ICBC LEASING
+ICBC Leasing was mainly engaged in financial leasing
+of large-scale equipment in key areas such as aviation,
+shipping, energy and power, rail transit and equipment
+manufacturing, and provided a number of financial and
+industrial services such as rent transfer, investment fund,
+investment asset securitization, asset trading and asset
+management.
+58
+ICBC
+1
+ICBC (Argentina) (Argentina)
+ICBC Investments
+ICBC (Peru) (Peru)
+ICBC (Mexico) (Mexico)
+ICBC (Brasil) (Brazil)
+ICBC (Canada) (Canada)
+ICBC (London) (UK)
+London Branch (UK)
+ICBC Standard Bank (UK)
+Bank ICBC (JSC) (Russia)
+ICBC Turkey (Turkey)
+Prague Branch (Czech Republic)
+Zurich Branch (Switzerland)
+ICBC (Austria) (Austria)
+Hong Kong SAR and Macau SAR
+Institutions (country/region)
+Hong Kong Branch
+(Hong Kong, China)
+ICBC (Asia) (Hong Kong, China)
+(the Netherlands)
+ICBC International
+Macau Branch (Macau, China)
+Africa
+Institutions (country/region)
+Investments in Standard Bank
+(South Africa)
+African Representative Office
+(South Africa)
+ДД
+America
+Institutions (country/region)
+New York Branch (USA)
+ICBC (USA) (USA)
+ICBCFS (USA)
+(Hong Kong, China)
+1
+ICBC (Macau) (Macau, China)
+152
+8.1%
+⚫ FinTech
+49.3%
+⚫ Female
+8.9%
+◆ Operation management
+50.7%
+12.7%
+Corporate banking
+● Operation and comprehensive 16.5%
+support
+41.9%
+Personal banking
+Employee Specialization
+Risk and compliance
+29.5%
+23.0%
+41-50 years old
+26.9%
+31-40 years old
+20.6%
+●Below 30 years old
+0
+Structure of Employee Age
+Male
+O
+Structure of Employee Gender
+7.2%
+Below associate
+Above 51 years old
+6.5%
+management
+Emerging business
+33
+23.2
+8,145,032
+Head Office
+(%)
+employees
+(%)
+institutions
+(%)
+millions)
+Item
+employees
+Number of
+Percentage of
+Percentage of
+institutions
+Number of
+Percentage
+of assets
+Assets
+(in RMB
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES
+by the Head Office, 459 branches in capital cities
+and tier-two branches, 15,508 outlets, 32 Head
+Office-level profitability units along with their
+directly managed institutions and branches, and 133
+subsidiaries and their branches.
+As at the end of 2021, the Bank had a total of
+16,590 institutions. Among them, there were
+16,169 domestic institutions and 421 overseas ones.
+Domestic institutions included the Head Office, 36
+tier-one branches and branches directly managed
+Discussion and Analysis
+53
+Annual Report 2021
+2.3%
+⚫ Others
+1.0%
+Non-banking business
+2.1%
+22.3%
+Associate
+60.5%
+0.2%
+9.8%
+Outlet services were improved continuously. The
+Bank carried out the campaign of "Financial
+Standards for the Benefit of People and Enterprises",
+took a combination of measures to improve the
+service quality of outlets and endeavored to become
+a service benchmark of outlets. The Bank enriched
+barrier-free facilities, upgraded 4,691 outlets for the
+elderly, promoted the service functions of self-service
+devices for the elderly, and put in place ATMs with
+passbook function to meet the needs of the elderly
+to provide them with more convenient and intimate
+and faster services. In 2021, 110 outlets of the Bank
+were named 1,000 Best Role Model Units in China's
+banking industry.
+At the end of 2021, the Bank had 15,767 outlets,
+24,145 self-service banks, 79,793 intelligent
+devices, and 66,563 ATMs with trading volume of
+RMB5,312.6 billion.
++
+Continuing to enrich outlets' pan-finance services
+and functions. With a focus on reforms to streamline
+administration and delegate power, improve
+regulation, and upgrade services, the Bank promoted
+one-stop government services and added 3,020
+outlets that offer "outlet +" one-stop government
+services. The Bank led the industry in launching such
+functions as issuance of electronic social insurance
+cards, printing of credit reports and issuance of
+electronic medical insurance vouchers in intelligent
+devices. As a result, outlets' "finance + pan-finance"
+comprehensive service capability further improved.
+Accelerating digital transformation of outlets. The
+Bank extensively applied new technological means
+such as big data, Al, intelligent voice and RPA in the
+layout, location selection, systems & platforms, self-
+service devices, business operation, etc. of outlets,
+which further improved the resource utilization
+efficiency of outlets. It continued to promote the
+mode of operations services featuring convenient
+online acceptance, intensive and efficient handling
+and speedy delivery of services at outlets, and
+completed its promotion and application in the
+scenarios of the five major fields of products in kind,
+information, cash, account, and foreign exchange.
+In addition, the Bank continuously optimized
+the combined service process of intelligent teller
+machines and expanded "medialess" services at
+outlets to cover more than 150 high-frequency
+transactions including debit card deposit and draw-
+down, transfer & remittance, account information
+query, etc.
+Service Improvement
+Steadily promoting outlet optimization and
+adjustment. Throughout 2021, the Bank optimized
+the layout of 714 outlets, and renovated 1,528
+outlets. The Bank effectively increased service
+supply in counties by setting up 151 new outlets in
+counties, including 15 counties that had never had
+an ICBC outlet before. The Bank practiced the green
+financial development philosophy. It piloted "zero
+carbon outlets" in Guangdong, Tianjin, Guangxi,
+etc. and actively fulfilled its responsibilities as a large
+bank.
+4
+4
+Outlet Development
+Discussion and Analysis
+ICBC
+50
+Establishing a diversified service system. A personalized service system has been established to meet customers'
+diversified financial service needs. For elderly customers, the Bank has launched Happy Life 2.0, which helps elderly
+customers cross the "digital divide" with larger characters and simpler interaction. For people with visual impairment,
+barrier-free services have been upgraded. By adding the screen reading function on the function interface, it has made
+it easier for people with visual impairment to use the mobile application. For key markets in counties, the Bank has
+launched Beautiful Home 2.0. It has developed exclusive products designed to bring tangible benefits to the people,
+business and customers in rural areas and made quality financial services available in counties, towns and villages,
+making financial contributions to the implementation of the national strategy of rural revitalization. For small and
+micro enterprise customers, the Bank has launched the Inclusive Finance version. With "one-stop" inclusive financial
+services with financing at the core and a series of "Small and Micro Enterprise e Loan" products including credit loans,
+pledged loans and digital supply chain, it has improved the inclusiveness and availability of financial services.
+The new version of mobile banking has strengthened value creation with "human + digital" resources, and it has
+focused more on leveraging platform advantages, paid more attention to users' mindset and experience and attached
+more importance to common growth with users' wealth. It has delivered a value to users, that is, "companionship
+itself is the best wealth". It has completed the transformation from "face to face" interaction at traditional physical
+outlets to online "screen to screen" interaction, from traditional wealth management product recommendation and
+sales to professional wealth investment advice giving that focuses on long-term growth, and from simple recording
+of account payments to deep connection of finance with scenarios. It has made financial life more convenient and
+friendlier to users, and has injected new vitality and connotation into the Bank's brand of "By Your Side and As Your
+Trust".
+Innovating in "cloud" service modes. The new version has launched the same-screen tutoring service. When having
+difficulties transferring or remitting money via mobile banking, customers can contact a remote customer service
+representative via one button, and the remote customer service representative will assist customers completing the
+whole business procedures by "checking the page via video and explaining services and instructing customers via
+voice", thus solving customers' difficulties in a "screen-to-screen" way. In addition, "cloud" outlets, "cloud" studios
+and "cloud" customer service have introduced "online malls" of 16 thousand ICBC outlets and 28 thousand wealth
+managers to provide "one-to-one" exclusive service to customers online.
+Upgrading the wealth management service. The new version has upgraded from wealth management product sales
+to wealth companionship and established a set of wealth companionship service system running through the whole
+investment process (before, during and after investment). Before investment, it can detect the health condition of
+the customer's asset allocation via one button and generate personalized investment advice; during investment, it
+can provide friendly interactive experience of product transaction; and after investment, it can provide customers
+with bank statements and fund taking services. In addition, the new version has added the intelligent payroll
+planning service, which, with a focus on salary payment, check and use journeys, can meet customers' remuneration
+management needs.
+Building the "intelligent operation engine". The new version of mobile banking has adopted the leading "intelligent
+brain operation engine" technology. Supported by strong GPU server computing power and data storage
+and management capabilities and hundreds of intelligent algorithms, it can push suitable contents like product
+information, news and privileges in a targeted manner to customers when they use relevant services of mobile
+banking, thus providing personalized, guided journey services.
+On 18 November 2021, the Bank officially launched Mobile Banking 7.0. After a decade, ICBC Mobile Banking has
+become the most trustworthy banking APP with the most users. Themed by "companionship", with comprehensive
+upgrades in wealth management, services, personality, interaction and privileges, Mobile Banking 7.0 aims to provide
+all-round interaction and whole-journey companionship to nearly 470 million customers.
+ICBC Launched Mobile Banking 7.0
+Discussion and Analysis
+49
+Annual Report 2021
+In serving consumption relating to people's
+livelihood, the Bank assisted in ensuring basic
+living standards and improving the quality of and
+expanding consumption. Centering on the fields
+of education, healthcare, etc., the Bank provided
+convenient online financial services such as "Campus
+Affairs Management Cloud" "Commercial Medical
+Cloud", electronic certificates of medical insurance
+and electronic social insurance cards to more than
+25 thousand schools, some 100 medical institutions
+and over ten million personal customers. Using the
+strategy of expanding domestic consumption as an
+opportunity, with a focus on the fields of travel,
+shopping, catering, entertainment, e-commerce,
+etc., the Bank continued to carry out series payment
+activities aimed to benefit the people, and expanded
+e-CNY application scenarios, contributing to quality
+improvement and expansion of consumption.
+In serving small and micro enterprises, the Bank
+actively implemented bailout policy and inclusive
+finance. The Bank rolled out the exclusive personal
+mobile banking version of Inclusive Finance for Small
+and Micro Enterprises and the inclusive finance zone
+on Enterprise Mobile Banking. By putting together
+urgent financial services such as online credit limit
+testing and speedy loan granting and adopting
+video interview, face recognition and other technical
+means, it improved the efficiency and risk control
+level of application, approval, contract signing, draw-
+down, payment and repayment procedures.
+payment, village affairs and business matchmaking,
+the Bank launched four types of agriculture-
+related services, namely, people's livelihood related
+finance, inclusive finance, government services
+related finance, and agricultural assistance finance,
+and developed new farm tools, new supermarkets
+and new platforms that are easy to operate for
+"Sannong" (agriculture, farmers and rural areas)
+customers and which they are willing to use. The
+Bank also upgraded the county edition of mobile
+banking to version 2.0. At the end of 2021,
+customers of the county version 2.0 of mobile
+banking reached 16.03 million. Moreover, the Bank
+continued to use ICBC Mall to assist Sannong. Rural
+revitalization related transaction volume of ICBC Mall
+recorded RMB2.76 billion.
+In serving the rural revitalization strategy, the
+Bank promoted common prosperity and interactive
+development of urban and rural areas. Adhering to
+going online, going digital and going ecological,
+the Bank established the new-type rural financial
+service system in which online and offline services
+are integrated and complement each other, and
+developed the "ICBC Xingnongtong" APP. Based on
+its core financial capabilities such as account, loan,
+Serving the Real Economy and Building an
+Ecological Bank
+to face" service at outlets to "screen to screen"
+interaction online. The scope of remote online
+video review business was expanded to include
+more frequently used services including debit card
+password changing, cancellation of loss reporting of
+debit cards, etc. Card-free and certificate-free service
+scenarios at outlets and medialess service scenarios
+of intelligent devices were enriched by launching
+the "Scan and take a queue number" function and
+the counter service evaluation function on mobile
+banking. The "ordering online and mailing offline"
+service of mobile banking covered ten scenarios
+including issuance of credit certification, printing of
+details of history, query of loan details, etc., and its
+replacement rate of outlet services exceeded 90%.
+Accelerating interconnection between domestic
+and overseas business and serving domestic and
+international circulations. Centering on mobile
+finance, corporate service and cross-border scenarios,
+the Bank worked faster to improve the quality and
+standard of overseas online financial services. Version
+6.0 of overseas personal mobile banking was fully
+upgraded at pilot institutions including ICBC (Asia),
+ICBC (Macau), Singapore Branch, and ICBC (Thai).
+Overseas corporate internet financial services were
+further improved, and the global version of corporate
+internet banking was continuously promoted at
+overseas institutions. New highlights such as overseas
+study remittance and payment were developed
+in cross-border business scenarios, the overseas
+study remittance product was launched in personal
+mobile banking, and the overseas services of ICBC
+e-Payment were promoted, making overseas mobile
+payment more convenient.
++
+Discussion and Analysis
+More services were supplied for the people's
+livelihood. Relying on 15.5 thousand "ICBC Sharing
+Stations", the Bank carried out more than 40
+thousand diverse public welfare activities with the
+theme of warm care in winter, volunteer service
+publicity, support for national college entrance
+exam and anti-fraud on the Double Ninth Festival
+etc., cumulatively serving more than 40 million
+person-times customers. It constantly enriched the
+connotation of public welfare service of "ICBC
+Sharing Stations" and cooperated with All-China
+Federation of Trade Unions to build "Trade Union's
+Service Stations for Outdoor Workers ICBC Sharing
+Stations".
+0.2
+An
+The intelligent transformation of customer services
+was accelerated. The Bank expanded the intelligent
+service entrances of ICBC intelligent robot "Gino
+(Gong Xiao Zhi)" to 96, including incoming and
+outgoing calls, audio + text, online + offline and
+inside + outside of the Bank. The accuracy of audio
+and text recognition was above 97%. 630 million
+Doctorate
+⚫ Master
+Bachelor
+0
+Educational Background of Employees
+As at the end of 2021, the Bank had a total of 434,089 employees, including 410,766 employees in the Head Office
+and domestic branches, 7,467 employees in domestic subsidiaries, and 15,856 employees in overseas institutions.
+Basic Information on Employees and Institutions
+The Bank's 2021 remuneration plan was prepared
+and implemented as per the internal decision-making
+process. The execution of total annual salaries was
+reported to the authority for filing according to
+national regulations. During the reporting period, the
+Bank's Senior Management fulfilled the indicators
+concerning economic, risk and social responsibilities
+well, and final results will be determined after
+deliberation by the Board of Directors.
+The Bank continuously optimized the remuneration
+resource allocation mechanism with value creation
+as the core, resolutely maintained a fair allocation
+concept with incentive commensurate with restraint,
+transmitted the Group's strategic objectives
+for business management, and allocated more
+remuneration resources to the grassroots employees,
+for the purpose of mobilizing and inspiring the
+business vitality of institutions at all tiers.
++
+Discussion and Analysis
+ICBC
+52
+remuneration consisted of basic
+remuneration, performance-based remuneration and
+welfare income. In particular, the basic remuneration
+depended on an employee's value contribution and
+ability to perform duties, and the performance-based
+remuneration was based on the overall situation of
+the Bank, the employee's institution or department,
+and the employee's personal performance
+measurement results. Meanwhile, the performance-
+based remuneration to the Senior Management and
+employees on key positions was subject to a deferred
+payment and recourse deduction mechanism, so
+as to balance risks and incentives. For employees
+who violated regulations and disciplines or had
+abnormal exposure of risk losses within their duties,
+the performance-based remuneration for the
+corresponding period shall be deducted, stopped in
+payment and recovered according to the severity.
+During the reporting period, according to relevant
+measures, the Bank deducted or stopped payment of
+corresponding performance-based remuneration to
+employees who were subject to disciplinary action or
+other treatment due to violation of regulations and
+disciplines or abnormal exposure of risk losses within
+their duties.
+Employee
+The Bank adopted a remuneration policy that was
+in line with corporate governance requirements,
+combination with high-quality development
+targets, in adaptation to risk management system
+and talent development strategy, and well-matched
+with employees' value contribution, so as to advance
+the sound operation and high-quality development
+of the whole bank. The Bank's remuneration
+management policy was formulated and adjusted
+in strict accordance with applicable national
+regulations, regulatory requirements and corporate
+governance procedures.
+in
+Remuneration Policy
+management and executive English training for
+managers to enhance their management capabilities.
+The Bank continued to carry out thematic training
+on FinTech, inclusive finance, AML and ESG to
+improve the professional competency and business
+capabilities of professionals. The Bank started cross-
+provincial rotating training for the heads of front-
+line outlets, coordinated and strengthened training
+for personnel on other positions, extensively
+carried out the bank-wide reading campaign and
+helped employees perform duties and grow up on
+appropriate positions.
+African Representative Office
+The Bank endeavored to promote the acceptance of
+corporate culture. The Bank, focusing on its strategy,
+expanded the connotation of corporate culture,
+strengthened cultural transmission, and reinforced
+employees' strategic consensus and cultural identity
+by preparing and publishing white papers on cultural
+building and producing micro-videos to interpret the
+strategy. The Bank carried forward the "Innovative
+ICBC" project, put into production the incubation
+system, and created an atmosphere of innovation
+for all employees. ICBC continued to implement
+the cultural event "That's China, That's ICBC" to
+promote cultural integration and dissemination. The
+Bank launched "Red Financial Footprint" campaign
+to guide employees to inherit the tradition and spirit
+of revolution. The Bank produced special educational
+films such as "Comprehensive and Strict Governance
+Iover Party and ICBC", carried out special warning
+education on "Financial Criminal Cases", to foster a
+clean and honest financial culture.
+With the focus on high-quality development of
+operation and areas vital to market competition,
+the Bank assigned more human resources to
+strategic areas. The Bank deepened technological
+empowerment, moved ahead with the construction
+of retail and FinTech teams and improved operation
+through the transformation and upgrading of
+human resources. The Bank expanded frontline
+marketing service personnel to strongly support
+the competitiveness enhancement of outlets. In
+line with the trend of digital transformation, the
+Bank optimized institutional function setting and
+deepened online and offline integrated development.
+The Bank increased support for personnel in key
+counties and rural areas and promoted financial
+service resources to lower tiers.
++
++
+Human Resources Management
+Human Resources Management,
+Employees and Institutions
+intelligent services were provided, up 11% from last
+year. In the First Intelligent Service Robot Contest
+held by China Banking Association, the Bank was
+ranked No. 1 in intelligent audio robot and No. 2 in
+intelligent text robot.
+Discussion and Analysis
+51
+Annual Report 2021
+experience monitoring and evaluation
+system was established. The Bank launched a
+special campaign to solve the hotspot problems
+complained by customers. The Bank established a
+system for "feedback of customers" and "voice
+of employees", set up a customer satisfaction
+monitoring system combining instant feedback and
+special survey, conducted experience monitoring
+in multiple dimensions and strove to enhance
+customer satisfaction. In 2021, the Bank's customer
+satisfaction stood at 86.8%, and 92.9% of problems
+reported via phone by customers were solved at first
+instance, ranking at the forefront among its peers.
+19,812
+The Bank continued to develop tiered and
+classified training programs to meet the needs of
+business development and talent team building.
+The Bank concentrated efforts on implementing
+leadership training camp, Mini MBA Program, credit
+Yangtze River Delta
+2020
+2021
+of 2020
+of 2021
+Item
+At the end
+At the end
+At the end
+At the end
+Number of institutions
+(in USD millions)
+Profit before taxation
+(in USD millions)
+of 2021
+Assets
+Discussion and Analysis
+55
+Annual Report 2021
+The Bank continued to improve its global network
+layout. Panama Branch was officially opened. At
+the end of 2021, the Bank established 421 overseas
+institutions in 49 countries and regions and indirectly
+covered 20 African countries as a shareholder of
+Standard Bank Group. It had 125 institutions in 21
+countries along the Belt and Road. The Bank also
+established correspondent banking relationships with
+1,404 overseas banking institutions in 142 countries
+and regions, making its service network covering
+six continents and important international financial
+centers around the world.
+Cross-border RMB business: The Bank pressed head
+with the construction of cross-border RMB product
+system and multi-scenario services, fostered offshore
+RMB market, innovated offshore RMB investment
+and financing products, and continued to promote
+RMB-denominated settlement in the whole process
+of bulk commodity transactions. The Bank promoted
+the construction of the account system of the
+separate accounting units in free trade zones, and
+supported the innovative development of cross-
+border RMB business in key areas such as Shanghai
+Lingang Special Area, Greater Bay Area and Hainan
+Free Trade Port. The Bank strengthened cooperation
+with payment institutions, cross-border e-commerce
+platforms and other entities, continuously optimized
+the cross-border payment business platform of
+"Cross-border e-Business Connect", and supported
+the development of new cross-border e-commerce
+firms. In 2021, cross-border RMB business exceeded
+RMB8.5 trillion.
+Global custody business: The global custody
+business hit another record high. Specifically,
+the custody of domestic investment by overseas
+customers surpassed RMB200.0 billion. The Bank
+was approved eligible for pilot custody clearing bank
+of the first batch of "Southbound Bond Connect"
+and completed the first batch of trading. The
+Bank was among the first batch to support QFIs
+to complete securities investment and refinancing
+securities lending in Beijing Stock Exchange, and
+the first exercise of employees' CDR right. It further
+reinforced innovation advantages of cross-border
+custody.
+Financial market business: The Bank completed
+"Southbound Connect" investment trading with
+its own funds in the first batch, assisted overseas
+institutions in financing in the interbank market
+through panda bond underwriting service, and
+established the interbank bond and foreign
+exchange market business partnership with
+overseas institutional investors from more than 60
+countries and regions. The Bank provided prime
+trading services for "Going Global" and "Bringing
+In" customers, and increased foreign exchange
+settlement and sale business for spot (10 currencies
+such as CZK) and forward (6 currencies such as HKD)
+difference delivery. The Bank entered the first prime
+brokerage trading for foreign exchange swap in
+RMB in the interbank foreign exchange market and
+the first USD rate swap of USD-linked SOFR, and
+constantly enhanced market making capabilities and
+market competitiveness of foreign exchange trading.
+Global asset management business: The Bank
+further advanced the steady development of foreign
+exchange and cross-border wealth management
+business. At the end of 2021, China CGB Index Fund
+"ICBC CSOP WGBI CGB Index ETF" for which ICBC
+Wealth Management and ICBC Asset Management
+(Global) provided investment advisory service, as
+the world's largest offshore pure CGB ETF product,
+become an important channel for overseas funds to
+invest in CGB assets. "ICBC CSOP Bloomberg CGB+
+Policy Bank Bond Index ETF" became the largest
+Chinese rate bond ETF product in Hong Kong's
+market.
+Internet financial services: Through internet banking,
+mobile banking and other online channels, the Bank
+offered services across 46 countries and regions
+in 15 languages. A full range of financial services,
+including account query, transfer and remittance,
+investment and wealth management, payroll, fund
+payment and cross-border payment were available
+to customers. Focusing on key products, scenarios
+and regions, the Bank promoted online business
+innovation and characteristic development of
+overseas institutions.
++
+Discussion and Analysis
+ICBC
+54
+Personal banking: The Bank was the first to launch
+"Cross-boundary Wealth Management Connect"
+business in Guangdong-Hong Kong-Macao Greater
+Bay Area, providing "Southbound Connect" and
+"Northbound Connect" investment services for the
+customers in nine cities in the Pearl River Delta, Hong
+Kong SAR and Macau SAR. The Bank built a cross-
+border service platform for entrepreneurs through
+"Entrepreneurs Service Center" in the Greater
+Bay Area. The Bank gathered pace in overseas
+bank card product innovation and digital service
+improvement, rolled out new products (digital bank
+card, private banking credit card and debit card of
+wealth management) abroad and diversified online
+financial services (such as card opening, installment
+and acquiring). The Bank continued to optimize the
+functions of overseas mobile payment and acquiring
+products of bank cards, promoted ICBC e Payment,
+and further promoted the interconnection of cross-
+border payment in the Greater Bay Area.
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+of 2020
+Hong Kong SAR and
+214,414
+4.6
+152
+42
+253
+51,106
+59,548
+America
+75
+75
+302
+401
+89,030
+83,726
+Europe
+and Macau SAR)
+(except Hong Kong SAR
+90
+90
+91
+950
+1,057
+118,253
+Asia-Pacific Region
+Macau SAR
+108
+102
+1,565
+1,373
+204,181
+by Refinitiv. The Bank was among market leaders in
+Hong Kong IPO underwriting and sponsorship, and
+the underwriting of overseas bonds and offshore
+China bonds.
+Corporate banking: The Bank provided "one-stop"
+financial services in local and foreign currencies for
+Chinese enterprises "Going Global" and foreign
+enterprises "Bringing In" by making comprehensive
+use of financial products such as overseas bond
+issuance, cross-border merger and acquisition,
+project financing, international trade financing,
+derivative trading and global cash management.
+The Bank has remained the first place in terms
+of the number of deals completed for the cross-
+border acquisition transactions of Chinese-invested
+enterprises according to the ranking promulgated
+145,860
+The Bank served and integrated into the high-level
+opening-up of the state, actively grasped changes in
+foreign investment and trade patterns, deeply implemented
+the strategy to become the preferred bank for foreign
+exchange business, officially unveiled the financial product
+brand of "YES ICBC" for foreign exchange, and proactively
+drove domestic business development and the Group's
+market competitiveness enhancement through high-quality
+internationalized development.
+4,553,489
+Western China
+19.2
+83,257
+20.8
+3,453
+10.8
+3,786,925
+Central China
+15.7
+68,065
+16.4
+2,713
+14.7
+5,186,815
+Bohai Rim
+48,234
+11.9
+1,983
+16.7
+5,870,705
+Pearl River Delta
+14.2
+61,639
+15.3
+2,537
+23.5
++
+8,248,981
+12.9
+3,678
+11.1
+87,859
+Internationalized Operation
+Note: Overseas and other assets include investments in associates and joint ventures.
+22.2
+100.0
+434,089
+100.0
+16,590
+35,171,383
+Total
+unallocated assets
+(17.3)
+(6,053,959)
+Eliminated and
+5.4
+100.0
+3.3
+Northeastern China
+23,323
+3.8
+1,639
+1,333,077
+41,900
+9.9
+9.6
+Overseas and other
+4,100,318
+11.7
+554
+20.2
+13.2
+2,737,742
+Short-term corporate
+2.29
+107,390
+253,815
+59.6
+12,194,706
+2.09
+254,887
+59.0
+Corporate loans
+(%)
+NPLs
+3.92
+Loan
+(%)
+11,102,733
+2,643,212
+1.45
+130,893
+2.2
+(%)
+622
+406,296
+2.6
+527,758
+Discounted bills
+corporate loans
+14.2
+122,922
+8,459,521
+1.56
+147,497
+45.8
+9,456,964
+Medium to long-term
+loans
+4.95
+45.4
+NPLs
+293,429
+Loan
+114,438
+0.66
+134,895
+1.58
+293,978
+1.42
+2.21
+411,900
+0.61
+1.99
+96.21
+(%)
+Amount
+17,918,430
+96.59
+19,961,778
+(%)
+0.15
+Amount
+412,038
+(%)
+128,983
+149,926
+Item
+NPL ratio
+Percentage
+NPL ratio
+Percentage
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2020
+DISTRIBUTION OF LOANS AND NPLS
+0.62
+According to the five-category classification, pass loans amounted to RMB19,961,778 million at the end of 2021,
+representing an increase of RMB2,043,348 million when compared with the end of the previous year and accounting for
+96.59% of total loans. Special mention loans stood at RMB412,038 million, representing an increase of RMB138 million, and
+accounting for 1.99% of the total, with a drop of 0.22 percentage points. NPLs amounted to RMB293,429 million, showing
+a decrease of RMB549 million, and NPL ratio was 1.42%, with a decrease of 0.16 percentage points.
+18,624,308
+100.00
+20,667,245
+0.16
+29,614
+0.14
+29,551
+0.81
+100.00
+Personal loans
+NPL ratio
+38.4
+Percentage
+Percentage
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2020
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY OF LOAN CUSTOMERS
+Discussion and Analysis
+ICBC
+66
+NPL ratio
+Corporate NPLs were RMB254,887 million, showing an increase of RMB1,072 million when compared with the end of the
+previous year, and representing a NPL ratio of 2.09%, with a decrease of 0.20 percentage points. Personal NPLs amounted
+to RMB38,542 million, showing a decrease of RMB999 million, and represented a NPL ratio of 0.49%, with a decrease of
+0.07 percentage points.
+293,978
+100.0
+18,624,308
+1.42
+293,429
+100.0
+20,667,245
+Total
+1.58
+1.89
+Item
+(%)
+Percentage
+Leasing and
+and postal services
+0.84
+20,683
+25.2
+2,467,959
+0.88
+Loan
+24,762
+2,816,789
+Transportation, storage
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+25.8
+7,944,781
+12,906
+681,610
+0.9
+187,316
+Personal
+0.28
+16,207
+30.8
+5,728,315
+0.24
+3,092
+15,460
+6,362,685
+Residential mortgages
+0.56
+39,541
+38.2
+7,115,279
+0.49
+38,542
+30.8
+3.7
+1.65
+0.9
+1.90
+13,179
+3.3
+692,339
+Credit card overdrafts
+loans
+1.30
+6,760
+183,716
+2.8
+0.97
+6,811
+3.4
+702,441
+Personal business
+consumption loans
+2.00
+3,668
+521,638
+Percentage
+13.49
+In RMB millions, except for percentages
+Commercial banking
+KZT8,933 million
+599.72
+83.51
+18.80
+Industrial and Commercial Bank of China
+(New Zealand) Limited
+Commercial banking
+NZD234 million
+1,530.75
+192.38
+7.89
+Industrial and Commercial Bank of China
+(Europe) S.A.
+Commercial banking
+EUR437 million
+7,148.71
+687.53
+(7.58)
+81.88
+ICBC (London) PLC
+1,114.66
+THB20,132 million
+3,720.41
+282.98
+(Macau) Limited
+PT. Bank ICBC Indonesia
+Commercial banking
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+Commercial banking
+IDR3.71 trillion
+MYR833 million
+4,421.83
+435.04
+167.08
+13.87
+987.88
+299.77
+11.01
+Industrial and Commercial Bank of China
+(Thai) Public Company Limited
+Industrial and Commercial Bank of China
+(Almaty) Joint Stock Company
+Commercial banking
+9,120.79
+Commercial banking
+USD200 million
+1,432.36
+218.02
+(0.56)
+2,991.49
+404.80
+14.92
+Industrial and Commercial Bank of China
+Financial Services LLC
+Broker dealer,
+USD50 million
+24,631.67
+80.76
+(20.61)
+securities margin
+trading
+Industrial and Commercial Bank of China
+(Canada)
+Commercial banking
+CAD208 million
+1,801.00
+291.67
+975.56
+EUR200 million
+USD369 million
+Commercial banking
+Industrial and Commercial Bank of China
+(USA) NA
+466.86
+15.35
+ICBC Standard Bank PLC
+Banking
+USD1,083 million
+26,268.36
+1,369.84
+98.50
+54,595.95
+Bank ICBC (Joint stock company)
+ICBC Turkey Bank Anonim Şirketi
+Commercial banking
+TRY860 million
+2,978.87
+125.03
+14.10
+ICBC Austria Bank GmbH
+Commercial banking
+Commercial banking
+13.97
+MOP589 million
+Industrial and Commercial Bank of China
++
+It fully accommodated the requirements of the new
+regulations on wealth management business, pushed
+forward the net-worth transformation of products,
+and continued to develop products and services. It
+was the first among peers to exceed RMB2 trillion in
+wealth management products, significantly increased
+the proportion of non-cash management and open
+net worth products, and provided customers with
+richer asset allocation choices. In 2021, it won more
+than 30 important awards in the industry such
+as the "Golden Bull Award for Banking Wealth
+Management Company" from China Securities
+Journal. It was ranked first among domestic wealth
+management companies on the list of IPE Top 500
+Global Asset Management Companies.
+It accelerated business transformation and
+innovation, continuously enhanced the adaptability
+and competitiveness of serving the high-quality
+development of the real economy, and shouldered
+its social responsibility. It innovated financial services
+for senior care, became the first batch of pilot
+institutions for wealth management business for
+senior care in China, and released ICBC Wealth
+Management Yi Xiang An Tai wealth management
+products for senior care and helped the construction
+of the national multi-level senior care system. It
+innovated green finance services, and was the
+first in the industry to issue "carbon neutrality"
+asset allocation index and green finance themed
+wealth management products. It innovated inclusive
+finance services, developed fixed-income products
+suitable for the risk-return appetite of county and
+rural residents, and expanded the coverage of
+rural wealth by financial services. It innovated and
+opened up financial services, steadily promoted the
+establishment of joint ventures, actively participated
+in the pilot business of "Cross-boundary Wealth
+Management Connect" in the Greater Bay Area,
+innovated and developed new wealth management
+products with the theme of "Southbound Connect"
+under new regulations, and contributed to the
+internationalization of RMB and the interconnection
+between Hong Kong and Chinese mainland.
+As at the end of 2021, the balance of ICBC Wealth
+Management's wealth management products was
+RMB2,021,804 million, an increase of RMB951,731
+million over the end of the previous year, all of which
+were net-worth products. By fundraising methods,
+the balance of public offering wealth management
+products was RMB1,975,907 million, an increase
+of RMB940,656 million, accounting for 97.73%;
+the balance of private offering wealth management
+products was RMB45,897 million, an increase of
+RMB11,075 million, accounting for 2.27%. By
+customer types, the balance of personal wealth
+management products was RMB1,714,603 million,
+an increase of RMB889,838 million, accounting
+for 84.81%. The balance of corporate wealth
+management products was RMB307,201 million,
+an increase of RMB61,893 million, accounting for
+15.19%.
+DIRECT AND INDIRECT INVESTMENTS IN WEALTH MANAGEMENT PRODUCTS AS AT THE END OF 2021
+In RMB millions, except for percentages
+Asset type
+Cash, deposits and negotiable certificate of deposit
+Placement with banks and other financial institutions and
+Amount
+Percentage
+(%)
+718,591
+34.2
+36,546
+1.7
+bonds under reverse repurchase agreements
+ICBC Wealth Management engages mainly in the issuance
+of wealth management products, wealth management
+advisory and consulting service and other activities
+approved by CBIRC.
+Bonds
+ICBC WEALTH MANAGEMENT
+59
++
+Discussion and Analysis
+It effectively consolidated its market position in terms
+of aviation business, deeply developed high-quality
+customers, and explored innovative business areas
+such as cargo aircraft leasing. It actively implemented
+the Belt and Road Initiative in terms of maritime
+business. It deepened strategic cooperation with
+key customers, boosted the transformation and
+upgrading of China's shipbuilding industry, and
+supported domestic shipyards to build high-tech and
+high value-added ships.
+Regarding domestic comprehensive leasing
+business, it continuously stepped up marketing
+and business development efforts in the fields of
+"New infrastructure", "New infrastructure, New
+urbanization initiatives and Major projects", "New
+manufacturing, New services, New basic industries
+and High-tech industries", concretely promoted
+innovation and transformation, actively optimized
+asset structure, extensively carried out marketing
+interconnection between banks and companies,
+deeply tapped needs of key customers, strengthened
+business reserves and investment, and drove key
+strategic regional markets through key projects.
+ICBC INTERNATIONAL
+ICBC International is a Hong Kong licensed financial service
+integrated platform wholly owned by the Bank, mainly
+providing various financial services such as corporate
+financing, investment management, sales transaction and
+asset management.
++
+Focusing on key industries and fields, it provided
+all-round investment and financing services for the
+real economy, and made every effort to build the
+characteristic brand of investment banking. The four
+business segments, i.e. investment banking, sales
+and trading, investment management and asset
+management, achieved smooth development. ICBC
+International was among the top-tier market players
+of Hong Kong market by IPO underwriting volume,
+and stayed ahead in the bond market for Chinese
+offshore investment-grade enterprises by overseas
+bond underwriting. It was still among the Class-B
+securities firms on the Hong Kong Stock Exchange. It
+made a breakthrough in double GP actively managed
+fund business. It was awarded "Best Bond Advisor in
+Hong Kong" by The Asset.
+ICBC-AXA
+ICBC-AXA operated various insurance businesses such as
+life insurance, health insurance and accident insurance,
+as well as reinsurance of the aforesaid businesses,
+business permitted by national laws and regulations to use
+insurance funds and other businesses approved by CBIRC.
++
+It took a customer-centric approach to improve
+services. It greatly expanded the customer coverage
+of the service, continued to adequately settle
+customer claims, and optimized the claim settlement
+process, with the odds of small claims reaching
+99.34%. Operations were digitally transformed in a
+push for online underwriting, policy owner service
+and claim settlement for personal insurance.
+It gave full play to the role of insurance as a
+social stabilizer, activated the contingency plan
+against natural disasters such as rainstorm in a
+timely manner, and opened a green channel for
+claim settlement, so as to ensure full and fast
+compensation. It adhered to the principle of
+"insurance for the benefit of people", boosted
+inclusive insurance projects, and actively participated
+in the "Huimin Insurance" business.
+ICBC INVESTMENT
+ICBC Investment is one of the first pilot banks in China to
+conduct debt-for-equity swap. It holds the franchise license
+of non-bank financial institution and is mainly engaged in
+debt-for-equity swap and the supporting business.
+ICBC Investment actively and steadily expanded and
+improved market-oriented debt-for-equity swap
+business, focused on supply-side structural reform,
+strengthened coordination with the Group, exerted
+strict customer access and diversified fund-raising
+channels. The "headquarters-to-headquarters"
+cooperation based on fund of funds was innovatively
+carried out to boost the clean energy development
+and continuously improve the quality and efficiency
+in serving the real economy. ICBC Investment actively
+played its part as a shareholder, and sent directors
+and supervisors to the shareholding subsidiaries in
+which it conducted debt-for-equity swap. It provided
+comprehensive financial services for debt-for-equity
+swap enterprises, and energetically supported the
+reform and development of these enterprises.
+Annual Report 2021
+Discussion and Analysis
+1,016,593
+48.3
+Non-standard debt assets
+paid-in capital
+millions)
+millions)
+Net profit
+(in USD
+millions)
+Industrial and Commercial Bank of China
+Commercial banking
+HKD44,188 million
+118,979.38
+18,416.05
+726.58
+(Asia) Limited
+ICBC International Holdings Limited
+Investment banking
+HKD5,963 million
+7,954.56
+1,680.45
+2.74
+Principal business
+Institution
+(in USD
+Net assets
+Other assets
+Total
+98,541
+4.7
+233,083
+11.1
+2,103,354
+100.0
+Commercial banking
+60
+Discussion and Analysis
+Major Controlled Subsidiaries and Equity Participating Company
+Major Overseas Subsidiaries
+At 31 December 2021
+2021
+Issued share
+capital/
+Total assets
+(in USD
+ICBC
+Industrial and Commercial Bank of China
+Mexico S.A.
+Commercial banking
+MXN1,597 million
+Management of Branches
+Business departments of
+branches and subsidiaries
+First line of defense
+Credit risk
+Liquidity risk, interest rate risk
+in the banking book
+Credit and Investment
+Management Department
+Asset & Liability
+Management Department
+Internal Control &
+Operational risk, compliance risk Compliance Department
+Reputational risk
+Strategic risk
+IT risk
+Legal risk
+Executive Office
+Office of Steering Group
+for Deepening Reform
+Financial Technology
+Department
+Legal Affairs Department
+Risk Management
+Department
+Board of directors of subsidiaries
+Enterprise risk, market risk,
+country risk
+the Board of Directors
+Discussion and Analysis
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+Senior Executive
+Vice Presidents
+Business departments
+Corporate Banking
+Department
+Personal Banking
+Department
+InDepartmanking
+Bank Card
+Department
+Global Market
+Department
+Board of Directors
+President
+Board of Supervisors
+Risk Management Committee
+Audit Committee of
+US Risk Committee
+of the Board of Directors
+Chief Risk Officer
+Senior management of subsidiaries
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+specialized" credit risk management of personal loans,
+continued to strengthen the application of "smart brain"
+to empower personal loan credit risk management,
+improved the comprehensive risk monitoring system of
+personal loans, enhanced the credit risk management
+capability of key business links, and stepped up efforts in
+the risk prevention and control of important risk points
+such as customer access and mortgage projects.
+The Bank imposed stringent control over risks in fields
+of local government debt, real estate, high polluting,
+etc.
+high energy-consuming industries,
+The Bank
+strictly implemented the national laws and regulations
+and regulatory policies on local debt management
+and financing platforms, continued with credit access
+management and monitoring, firmly held the bottom
+line for regional systemic risks, and actively studied and
+prevented operation risks in commercial construction.
+The Bank steadily cooperated with local governments
+and financing platform companies to resolve the risks in
+existing financing due, and devoted great efforts in debt
+risk mitigation and financing monitoring & analysis. The
+Bank strictly implemented the national policy guidance for
+real estate, steadily carried out the prudential management
+requirements for real estate, continued to implement limit
+management for commercial real estate investment and
+financing, paid close attention to the changes of real estate
+market risks in various regions, strictly guarded against
+the risks of real estate group customers engaging high-
+leverage expansion, and improved refined management.
+The Bank implemented the concept of green development,
+further strengthened the investment and financing
+control over the high polluting, high energy-consuming
+industries, and strengthened the adjustment of investment
+and financing structure and risk prevention & control in
+a forward-looking manner, to promote the "low-carbon
+transformation" of high-carbon industries.
+Credit Risk Analysis
+At the end of 2021, the Bank's maximum exposure to
+credit risk, without taking into account of any collateral
+and other credit enhancements, was RMB36,737,042
+million, an increase of RMB1,720,224 million compared
+with the end of the previous year. Please refer to "Note
+49.(a)(i) to the Consolidated Financial Statements:
+Maximum Exposure to Credit Risk Without Taking
+Into Account of Any Collateral and Other Credit
+Enhancements". For mitigated risk exposures of credit
+risk asset portfolio of the Bank, please refer to the section
+headed "Credit Risk" of the 2021 Capital Adequacy
+Ratio Report of Industrial and Commercial Bank of China
+Limited.
+Annual Report 2021
+65
+Discussion and Analysis
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Item
+Pass
+Special mention
+NPLs
+Substandard
+Doubtful
+Loss
+Total
+At 31 December 2021
+According to the regulatory requirement on loan risk
+classification, the Bank implemented five-category
+classification management in relation to loan quality
+and classified loans into five categories: pass, special
+mention, substandard, doubtful and loss, based on the
+possibility of collecting the principal and interest of loans.
+In order to implement sophisticated management of credit
+asset quality and improve risk management, the Bank
+implemented the twelve-category internal classification
+system for corporate loans. The Bank applied five-category
+classification management to personal credit assets and
+ascertained the category of the loans based on the number
+of months in default, expected loss ratio, credit rating,
+collateral and other quantitative and qualitative factors.
+The Bank accurately grasped the layout and direction
+of investment and financing business and strengthened
+credit risk management. The Bank continued to strengthen
+the construction of credit policy system, optimized
+credit product rules, and continuously consolidated the
+foundation of non-standard agency investment policies.
+The Bank highlighted support for key industries, key
+regions, key customers, key projects and other "four
+key and one major" quality credit markets. The Bank
+actively supported the consumption upgrading service
+sectors such as "New infrastructure, New urbanization
+initiatives and Major projects", high-quality development
+of manufacturing industry, medical care, education and
+senior care. The Bank provided key support for strategic
+emerging industries, inclusive finance, green finance, rural
+revitalization, etc. The Bank actively implemented the
+development strategies of five key regions (namely, Beijing-
+Tianjin-Hebei region, Yangtze River Delta, Guangdong-
+Hong Kong-Macao Greater Bay Area, central China and
+Chengdu-Chongqing economic circle), kept improving
+differentiated region credit policies, and actively supported
+the financing needs of relevant industries boosting
+domestic and international circulations and improving
+the global supply chain in the Chinese market. The Bank
+constantly promoted "mobile, digital, intelligent and
+important affairs of credit risk management, and performs
+its duty in accordance with the Charters of the Credit
+Risk Management Committee. The credit and investment
+management departments at different levels undertake
+the responsibility of coordinating credit risk management
+at respective levels, and the business departments
+implement credit risk management policies and standards
+for their respective business areas in accordance with their
+functions.
+Discussion and Analysis
+ICBC
+Credit Risk
+Management Committee
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Market Risk
+Management Committee
+Operational Risk
+Management Committee
+Internal Audit Bureau
+Internal Audit Sub-bureau
+Second line of defense
+Primary reporting line
+Secondary reporting line
+63
+-Third line of defense ―
+At the level of branches
+At the level of Head Office
+At the level of the Board of Directors
+Credit Risk
+Credit Risk Management
+Credit risk is the risk where loss is caused to the banking
+business when the borrower or counterparty fails to
+meet its contractual obligations. The Bank's credit risks
+mainly originate from loans, treasury operations (including
+deposits with banks and other financial institutions,
+placements with banks and other financial institutions,
+reverse repurchase agreements, corporate bonds and
+financial bonds investment), receivables and off-balance
+sheet credit business (including guarantees, commitments
+and financial derivatives trading).
+The Bank strictly adheres to regulatory requirements
+regarding credit risk management, diligently fulfills
+established strategies and objectives under the leadership
+of the Board of Directors and the Senior Management,
+and implements an independent, centralized and vertical
+credit risk management mode. The Board of Directors
+assumes the ultimate responsibility for the effectiveness
+of credit risk management. The Senior Management is
+responsible for executing the strategies, overall policy
+and system regarding credit risk management approved
+by the Board of Directors. The Credit Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of credit
+risk management, is responsible for reviewing material and
+64
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+Annual Report 2021
+78 Country Risk
+Enterprise risk management is a process to effectively identify, assess,
+measure, monitor, control or mitigate and report risks in order to ensure
+the realization of the Group's operating and strategic objectives by setting
+up effective and balanced risk governance structure, fostering robust and
+prudent risk culture, formulating unified risk management strategies and
+risk appetite, and implementing the risk limit and risk management policies.
+The principles of enterprise risk management of the Bank include full
+coverage, matching, independence, perspectiveness and effectiveness, etc.
+In 2021, the Bank adhered to the risk management path of "active
+prevention, smart control and comprehensive management", promoted
+the implementation of key measures for "management of personnel,
+assets, defense lines and bottom lines" and improved enterprise risk
+management results. The Bank developed and implemented a three-
+year plan for risk management, perfected the risk management system,
+reinforced three lines of defense for risk management, and carried out risk
+management responsibilities. The Bank strengthened risk appetite and limit
+management, intensified risk monitoring and early warning, and made
+risk prevention and control more proactive and foresighted. Relying on
+intelligent platforms such as ICBC e Shield, the Bank accelerated the digital
+and intelligent transformation of risk management. The Bank strengthened
+risk management in emerging fields, incorporated climate risk into the
+enterprise risk management system, established a climate risk governance
+framework, stepped up climate risk identification and management, and
+carried out climate risk stress testing.
+61
+Discussion and Analysis
+Major Domestic Subsidiaries
+At 31 December 2021
+Issued share
+In RMB100 millions
+2021
+capital/
+Institution
+Principal business
+paid-in capital
+Total assets
+Net assets
+Net profit
+ICBC Credit Suisse Asset Management Co., Ltd. Fund management
+2
+176.27
+Annual Report 2021
+(Argentina) S.A.
+82.17
+877.76
+269.41
+34.16
+2.39
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+Commercial banking
+BRL202 million
+260.49
+35.20
+140.92
+(2.17)
+Commercial banking
+Industrial and Commercial Bank of China
+Commercial banking
+USD120 million
+ARS28,415 million
+1,477.99
+99.11
+7.95
+4,767.40
+ICBC PERU BANK
+At 31 December 2020
+27.94
+Leasing
+8.92
+Major Equity Participation Company
+STANDARD BANK GROUP LIMITED
+Standard Bank is the largest commercial bank in Africa. Its
+scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank
+holds 20.06% ordinary shares of Standard Bank. Based
+on mutual benefit and win-win cooperation, the two
+sides furthered their cooperation in equity cooperation,
+customer expansion, project financing, product innovation,
+risk management, FinTech and staff exchange. At the
+end of 2021, Standard Bank recorded total assets of
+ZAR2,725,817 million and net assets of ZAR242,849
+million. It generated a net profit of ZAR28,059 million
+during the year.
+62
+ICBC
+RISK MANAGEMENT
+Discussion and Analysis
+63 Enterprise Risk Management
+System
+64 Credit Risk
+71 Market Risk
+72 Interest Rate Risk in the
+Banking Book
+74 Liquidity Risk
+76 Operational Risk
+78 Reputational Risk
+Enterprise Risk Management System
+177.00
+187.91
+160
+Wealth management
+180
+2,948.03
+399.90
+22.36
+ICBC-AXA Assurance Co., Ltd.
+Insurance
+125.05
+2,581.34
+ICBC Financial Leasing Co., Ltd.
+183.01
+ICBC Financial Asset Investment Co., Ltd.
+Financial asset
+270
+1,725.91
+401.23
+101.97
+investment
+ICBC Wealth Management Co., Ltd.
+16.07
+RUB10,810 million
+1,252.37
+2.7
+8,095
+0.7
+73,063
+Lodging and catering
+4.28
+7,593
+1.8
+11.08
+177,408
+3,470
+1.9
+203,130
+Mining
+culture and sanitation
+2.23
+5,462
+1.71
+2.5
+83,886
+11,743
+100.0
+2.22
+5,495
+2.5
+247,866
+9,768,044
+2.22
+242,380
+0.9
+100.0
+Total
+1.80
+5,732
+2.9
+317,641
+Other
+14.00
+10,938,653
+245,127
+245,378
+6,947
+2.32
+16,238
+7.2
+701,094
+4.79
+33,820
+6.5
+Wholesale and retail
+705,714
+gas and water
+0.40
+3,977
+10.2
+995,232
+0.81
+8,653
+Real estate
+2.42
+464,169
+38,558
+2.6
+287,601
+Science, education,
+3.31
+8,636
+260,667
+1.77
+4.2
+5,538
+312,849
+Construction
+13.78
+60,272
+4.5
+437,283
+8.31
+2.9
+2.51
+The Bank continued to propel the optimization and
+adjustment of the industry's credit structure and stepped
+up efforts to shore up the development of the real
+economy. Loans to transportation, storage and postal
+services increased by RMB348,830 million as compared
+with the end of the previous year, representing a growth
+rate of 14.1%, mainly due to active support for the
+liquidity needs of highway, railway, airport and berth
+projects and large transportation group companies.
+Loans to leasing and commercial services increased by
+RMB225,688 million, representing a growth rate of 15.7%,
+mainly for supporting the financing needs of developing
+projects for "New infrastructure, New urbanization.
+initiatives and Major projects", people's wellbeing, projects
+for strengthening areas of weaknesses in infrastructure,
+and of enterprise headquarters, parks and commercial
+complex management service customers. Loans to water,
+environment and public utility management grew by
+RMB216,051 million, representing a growth rate of 18.7%,
+mainly for steadily satisfying the investment and financing
+needs arising from significant projects and projects for
+people's livelihood in the areas of urban infrastructure
+construction, ecological environment protection and
+public services. Manufacturing loans rose by RMB99,228
+million, an increase of 6.4%, mainly due to continuously
+increased support for manufacturing, faster credit granting
+structure adjustment and fast growth of loans to leading
+and backbone enterprises in manufacturing of electrical
+equipment, general equipment, food and medicine.
+2.37
+71,763
+16.3
+3,030,552
+2.14
+72,241
+16.3
+Central China
+3,371,325
+1.15
+31,540
+14.8
+2,746,019
+1.08
+33,860
+15.2
+Bohai Rim
+3,134,781
+3,133,539
+40,046
+895,238
+Northeastern China
+1.42
+47,788
+18.1
+3,369,916
+1.26
+15.2
+47,031
+3,746,867
+Western China
+1.38
+38,584
+15.0
+2,789,085
+1.28
+18.1
+Pearl River Delta
+1.26
+45,304
+NPLs
+(%)
+Loan
+Item
+NPL ratio
+Percentage
+NPL ratio
+(%)
+Percentage
+In RMB millions, except for percentages
+At 31 December 2021
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+Discussion and Analysis
+67
+Annual Report 2021
+The Bank continued to strengthen risk management of
+financing in various industries, intensified the disposal
+of non-performing assets with RMB190.1 billion NPLs
+recovered or disposed accumulatively, and actively
+promoted the transformation of risk asset management.
+Except for the deterioration of loans to customers in
+some industries due to external factors such as COVID-19
+pandemic, the loan quality was generally stable.
+At 31 December 2020
+Loan
+(%)
+NPLs
+19.2
+3,582,682
+0.84
+35,149
+20.2
+4,163,732
+Yangtze River Delta
+2.80
+21,603
+4.1
+772,372
+2.74
+21,668
+3.8
+791,994
+Head Office
+(%)
+9.7
+1,065,459
+of electricity, heat,
+management
+Stage 1
+211
+Stage 2
+Stage 3
+Total
+650
+861
+1 January 2021
+530,300
+Transfer:
+17,860
+(15,581)
+(2,279)
+to stage 2
+(9,856)
+14,056
+(4,200)
+to stage 1
+217,446
+Total
+Stage 3
+100.0
+293,978
+1.58
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+In RMB millions
+Movements of allowance for
+Production and supply
+customers measured at amortised cost
+Movements of allowance for
+Item
+Stage 1
+Stage 2
+Balance at
+223,703
+89,151
+impairment losses on loans and advances to
+customers measured at FVTOCI
+to stage 3
+18,624,308
+(3,534)
+38,853
+(628)
+269,376
+(564)
+110,649
+(2,268)
+(3,460)
+(7)
+223,739
+603,764
+Balance at
+191
+28
+219
+31 December 2021
+Note: Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers" for details.
+As at the end of 2021, the allowance for impairment losses on loans stood at RMB603,983 million, of which RMB603,764
+million at amortised cost, and RMB219 million at fair value through other comprehensive income. Allowance to NPLs was
+205.84%, showing an increase of 25.16 percentage points over the end of last year; allowance to total loans ratio was
+2.92%, showing an increase of 0.07 percentage points.
+68
+ICBC
+(7)
+Other movements
+previously written off
+and advances
+Charge/(reverse)
+41,831
+58,906
+67,614
+168,351
+(13)
+(71)
+(84)
+Write-offs and
+(100,447)
+(100,447)
+(551)
+(551)
+transfer out
+Recoveries of loans
+9,020
+9,020
+(35,319)
+1.42
+impairment losses on loans and advances to
+100.0
+0.73
+8,425
+11.8
+1,154,201
+0.83
+11,379
+12.5
+1,370,252
+Water, environment
+4.20
+65,361
+293,429
+and public utility
+15.9
+15.2
+33,824
+2.03
+1,441,688
+14.8
+31,242
+2.17
+commercial services
+Manufacturing
+1,654,610
+15.1
+61,602
+1,667,376
+3.72
+1,555,382
+3.42
+4.3
+4.5
+28,411
+3.38
+Overseas and other
+1,429,769
+6.9
+12,834
+0.90
+1,492,087
+8.0
+8,985
+0.60
+Total
+20,667,245
+30,600
+841,595
+0.45
+Amount
+loans
+loans
+72,444
+0.35
+98,963
+0.54
+70,057
+0.34
+74,820
+0.09
+19,153
+0.40
+72,467
+93,247
+0.39
+254,901
+1.23
+36.0
+60.9
+41.2
+26.1
+36.4
+20.1
+31 December
+2019
+1.5
+1.7
+1.6
+2021
+31 December
+At
+At
+0.11
+At
+Doubtful
+Substandard
+Special mention
+Pass
+Item
+LOAN MIGRATION RATIO
+Rescheduled loans and advances amounted to RMB19,134 million, representing an increase of RMB7,174 million as
+compared to the end of the previous year. Rescheduled loans and advances overdue for over 3 months amounted to
+RMB2,301 million, representing an increase of RMB246 million.
+RESCHEDULED LOANS
+Overdue loans stood at RMB254,901 million, representing a decrease of RMB12,606 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB182,457 million, representing an increase of
+RMB13,913 million.
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+1.44
+21,257
+267,507
+In percentages
+Amount
+31 December
+2020
+% of total
+(%)
+Amount
+(%)
+Loans secured by mortgages
+9,497,898
+46.0
+8,703,068
+46.8
+Pledged loans
+1,720,583
+8.3
+1,401,565
+7.5
+Guaranteed loans
+2,459,887
+11.9
+2,260,445
+12.1
+Unsecured loans
+Total
+6,988,877
+20,667,245
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2020
+At 31 December 2021
+In RMB millions, except for percentages
+Total
+Over 3 years
+1 to 3 years
+3 months to 1 year
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+% of total
+100.0
+100.0
+33.6
+6,259,230
+33.8
+14.3
+DISTRIBUTION OF LOANS BY COLLATERAL
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2020
+At 31 December 2021
+18,624,308
+19.2
+14.8
+Annual Report 2021
+Liquidity ratio (%)
+Item
+At the end of 2021, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were 41.5% and 88.9% respectively,
+both meeting the regulatory requirements. Loan-to-deposit ratio was 77.3%.
+The Bank assesses liquidity risk status by comprehensive use of a variety of methods and tools such as liquidity indicator
+analysis and liquidity exposure analysis.
+Liquidity Risk Analysis
+Discussion and Analysis
+Loan-to-deposit ratio (%)
+ICBC
+In 2021, the Bank adhered to a steady and prudent
+liquidity management strategy, and the Group's liquidity
+was stable. The Bank intensified the monitoring of funds
+and maintained a proper and sufficient liquidity reserve.
+The Bank optimized and upgraded the liquidity risk
+management mechanism and system, and continuously
+enhanced the automation and intelligence level of liquidity
+risk monitoring, measurement and control. The Bank
+strengthened on- and off-balance sheet liquidity risk
+management in local and foreign currencies in domestic
+and overseas institutions, optimized the multi-level and
+multi-dimensional liquidity monitoring and early warning
+system, and further enhanced the Group's liquidity risk
+prevention and emergency response capabilities.
+Objective of liquidity risk management: By establishing
+and improving the liquidity risk management system,
+the Bank aims at realizing effective identification,
+measurement, monitoring and control of the liquidity
+risk at the Group level, the Bank, the affiliates, the
+branches and the business lines, and ensuring the liquidity
+demand is satisfied at a reasonable cost in time under
+the normal business scenario and the stress scenario. The
+Bank's liquidity risk management strategy and policy are
+formulated in accordance with the liquidity risk appetite,
+and they cover all businesses on- and off-balance sheet,
+all domestic and overseas business departments, branches
+and affiliates that are likely to have a material impact on
+the liquidity risk, and contain the liquidity risk management
+under normal and stressed scenarios. The liquidity risk
+management strategy specifies the overall objective and
+mode of liquidity risk management and lists major policies
+and procedures. The policies for liquidity risk management
+are formulated in accordance with external and macro
+operating environments and business development of the
+Bank, with a view to striking an effective balance among
+security, liquidity and profitability. The Bank conducts stress
+testing quarterly or by subject by fully considering various
+macro and micro factors that may affect the liquidity of
+the Bank, changes in the external operating environment,
+regulatory requirements, and business characteristics and
+complexity of the Bank.
+2,884,728
+3,320,310
+The Bank's liquidity risk management system conforms
+to the overall development strategy and the overall risk
+management system, and is commensurate with the
+business scale, business nature, complexity and other
+aspects of the Bank. The system includes the following
+fundamental elements: effective governance structure
+for liquidity risk management; sound strategy, policy
+and procedures for liquidity risk management; effective
+identification, measurement, monitoring and control for
+liquidity risk and a complete management information
+system. In respect of liquidity risk management, the Bank's
+governance structure embodies the decision-making
+system comprising the Board of Directors and its special
+committees as well as the Asset and Liability Management
+Committee and the Risk Management Committee of
+the Head Office; the supervision system comprising the
+Board of Supervisors, the Internal Audit Bureau and the
+Internal Control and Compliance Department of the
+Head Office; and the execution system comprising the
+Asset and Liability Management Department, leading
+management departments of on- and off-balance sheet
+businesses, the information technology departments,
+operation management departments of the Head Office
+and relevant departments of branches. Each of these
+systems performs the corresponding functions of decision
+making, supervision and execution according to division of
+responsibilities.
+Liquidity Risk Management
+74
+Liquidity risk is the risk that the Bank is unable to raise
+funds on a timely basis at a reasonable cost to settle
+liabilities as they fall due, or perform other payment
+obligations and satisfy other funding demands arising from
+the normal course of business. Liquidity risk may arise from
+the following events or factors: material adverse changes
+in market liquidity, withdrawal of customers' deposits,
+drawing of loans by customers, overdue payment of
+debtors, mismatch between assets and liabilities, difficulties
+in assets realization, operating losses and risk associated
+with its affiliates.
+At
+At
+88.9
+>=25.0
+Foreign currency
+RMB and foreign
+currency
+43.0
+43.2
+41.5
+At
+>=25.0
+2019
+31 December
+31 December
+2020
+2021
+31 December
+Regulatory
+criteria
+RMB
+Liquidity Risk
+Note: Please refer to "Note 49.(d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+(1,560,515)
+25,728
+1,694
+(1,029)
+(1,661)
+(47,643)
+(25,728)
+1,029
+51,624
+142
+(140)
+(958)
+6,126
+(1,551)
+(5,873)
+1,551
+958
+Note: Please refer to "Note 49.(d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+Interest Rate Exposure Analysis
+As at the end of 2021, the Bank had a positive cumulative
+interest rate sensitivity exposure within one year of
+RMB1,943,618 million, representing an increase of
+RMB836,372 million from the end of the previous year,
+7,486,102
+(2,301,496)
+Over 5 years
+1 to 5 years
+3 months to
+1 year
+8,383,705
+15.6
+Less than
+At 31 December 2020
+At 31 December 2021
+In RMB millions
+INTEREST RATE RISK EXPOSURE
+Discussion and Analysis
+73
+Annual Report 2021
+mainly caused by the increase in repriced or matured
+loans and advances to customers within one year. It had a
+positive cumulative interest rate sensitivity exposure above
+one year of RMB1,018,814 million, representing a decrease
+of RMB305,399 million, mainly resulted from the increase
+in repriced or matured due to customers above one year.
+91.4
+85.9
+77.3
+72.8
+In 2021, the Bank continued to strengthen legal risk
+management, by improving the risk prevention and control
+capacity in legal risk management, ensuring the legal and
+compliant operation, healthy business development and
+overall business stability of the Group. In accordance with
+new laws and regulations such as the Personal Information
+Protection Law, its business rules and relevant agreements
+were continuously improved, and legal risk prevention and
+control in key areas and links was further pushed forward
+in line with new requirements of financial regulators.
+The Bank also conducted ongoing monitoring of legal
+risks and improved both the vertical interconnection and
+horizontal coordination mechanism between the Head
+Office and branches. By systematically embedding legal risk
+prevention and control into business negotiations, product
+design, contract signing and other links, the Bank made
+risk prevention and control more prospective, proactive
+and targeted. It improved the cross-border coordination
+and management for legal work and strengthened the
+legal risk management of overseas institutions, properly
+responding to cross-border legal issues emerging in the
+development of international operations. Moreover, the
+Based on the objective to ensure legal and compliant
+operation, the Bank always attaches great importance
+to establishing a sound legal risk management system,
+forming a full-process legal risk prevention and control
+mechanism to support and secure business innovation and
+market competition, and to prevent and eliminate various
+potential or practical legal risks. The Board of Directors
+is responsible for reviewing and determining the strategy
+and policy relating to legal risk management, and assumes
+the ultimate responsibility of legal risk management.
+The Senior Management is responsible for executing the
+strategy and policy relating to legal risk management,
+examining and approving relevant important affairs.
+The Legal Affairs Department of the Head Office is in
+charge of legal risk management across the Group, with
+relevant business departments providing related support
+and assistance on legal risk prevention and control. The
+affiliates, domestic and overseas branches undertake the
+responsibility of legal risk management of their respective
+institutions.
+other documents executed by the Bank; legal disputes
+(litigation or arbitration proceedings) between the Bank
+and its clients, counterparties and stakeholders; important
+changes in relevant laws and regulations, administrative
+rules, regulatory provisions and other relevant rules;
+and other relevant legal events that occur internally and
+externally.
+Discussion and Analysis
+ICBC
+76
+Bank ameliorated the function design and management
+mechanic for the electronic signing system, to strengthen
+its strict control of seal use in business contracts during
+the whole process, and effectively prevent and control
+operational risk, legal risk and reputational risk caused
+by misuse of contract seal. It reinforced authorization
+management, related party management, trademark
+management and intellectual property protection, and
+made efforts to effectively institutionalize risk management
+and control, and refine the structure of the system.
+The Bank devoted great energy to strongly deal with
+lawsuit cases to protect the Bank's rights and interests
+in accordance with law and avoid and reduce risk losses.
+In addition to the active assistance in online judicial
+inquiry and enforcement, the Bank played a positive role
+in improving the efficiency of law enforcement and case
+handling by competent authorities and building a social
+credibility system.
+Legal risk is the risk of incurring legal sanctions, regulatory
+penalties, financial losses, reputational losses or other
+negative consequences that arises out of or in connection
+with the failure of the Bank to comply with relevant laws,
+regulations, administrative rules, regulatory provisions or
+requirements of other relevant rules during the Bank's
+operation; the unfavorable legal defects that exist in
+products, services or information provided to clients,
+transactions engaged in, and contracts, agreements or
+In 2021, the Bank continued to reinforce operational
+risk management in line with regulatory focuses and
+operational risk trends. It optimized the risk limit
+management mechanism, and effectively transmitted
+the Group's operational risk management appetite. The
+Bank formulated and issued 2021-2023 Development
+Plan for the Internal Control System, and kept perfecting
+internal control mechanism with all-round coverage,
+whole-process control and all-employee participation. The
+operational risk and control self-assessment of special lines
+under "regulatory red line" was carried out. In view of
+serious risks, the Bank promoted optimization of policies,
+processes, systems and mechanisms. The Bank carried out
+risk governance in key business areas, strengthened case
+warning education, and continuously tightened employee
+behavior control. Moreover, the operational risk application
+and management system was optimized, to continuously
+enhance effective risk data aggregation and risk reporting
+capabilities. During the reporting period, the operational
+risk management system of the Bank operated smoothly,
+and the operational risk was controllable on the whole.
+risk across credit and market risks. The Internal Audit
+Department performs the functions as the third line of
+defense and assumes the responsibility for supervision,
+which is responsible for supervising the effectiveness of
+operational risk management.
+The Bank strictly complies with regulatory requirements
+on operational risk management. The Board of Directors,
+the Board of Supervisors, the Senior Management and its
+Operational Risk Management Committee are respectively
+responsible for decision-making, supervision and
+execution with respect to operational risk management,
+and relevant departments act as the "three lines of
+defense" for operational risk management pursuant to
+their management functions, thus forming an operational
+risk management system with close connection and
+mutual checks and balances. Institutions and departments
+function as the first line of defense, which assume
+the direct responsibility for respective operational risk
+management. Classified management departments such
+as Internal Control & Compliance, Legal Affairs, Security,
+Financial Technology, Finance & Accounting, Operation
+Management and Human Resources as well as cross-
+risk management departments including Credit and
+Investment Management and Risk Management jointly
+perform the functions as the second line of defense, which
+are respectively responsible for the lead management of
+operational risk, the classified management of certain type
+of operational risk and the management of operational
+Operational risk is defined as the risk of loss resulting from
+insufficient or problematic internal processes, employees
+and IT systems or from external events, including legal
+risk, but excluding strategic and reputational risk. There
+are seven major types of operational risks faced by the
+Bank, including internal fraud, external fraud, employment
+system and workplace safety, customers, products and
+business activities, damage to physical assets, IT system,
+execution and delivery and process management. Among
+these, external fraud, execution, delivery and process
+management constitute major sources of operational risk
+losses of the Bank.
+Operational Risk Management
+Operational Risk
+Legal Risk
+Anti-Money Laundering
+In strict compliance with anti-money laundering ("AML")
+laws and regulations of China and host countries (regions)
+of overseas institutions, the Bank sincerely fulfilled the
+legal obligations and social responsibilities concerning
+AML. The Bank actively adapted to AML changes in the
+new era, established the global, comprehensive and brand-
+new money laundering risk management concept involving
+all personnel, spanning all processes and covering all
+risk exposures, accommodated to "cross-border, cross-
+industrial and cross-sector" development requirements,
+practiced the management principle of "active prevention,
+smart control and comprehensive management", and
+coordinated it efforts to strengthen Group-wide money
+laundering risk management. The Bank continuously
+improved the Group's AML governance system, constantly
+promoted the comprehensive management regarding
+customer identification, implemented new regulations
+on money laundering risk assessment, created a digital
+AML ecosystem, ramped up efforts in overseas AML
+infrastructure, etc. The quality and efficiency of money
+laundering risk management has been further improved.
+Please refer to the section headed "Operational Risk"
+of the 2021 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited issued by the
+Bank for further information on operational risk capital
+ICBC
+78
+In 2021, facing the increasingly complicated, severe and
+uncertain external environment, the Bank strictly abode
+by regulatory requirements and, with consideration of its
+business development needs, continued to strengthen
+country risk management. The Bank closely observed
+changes in country risk exposures, constantly tracked,
+monitored and reported country risk, and timely updated
+and adjusted the country risk rating and limits. It continued
+to strengthen early warning mechanism for country risk,
+proactively conducted stress testing on country risk and
+reasonably and effectively controlled country risk while
+steadily promoting internationalization.
+The Bank strictly observes regulatory requirements on
+country risk management. The Board of Directors assumes
+the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible
+for executing the country risk management policies
+approved by the Board of Directors. The Risk Management
+Committee of the Head Office is responsible for reviewing
+matters regarding country risk management. The Bank
+manages and controls country risk with a series of tools,
+including country risk assessment and rating, country risk
+limit, country risk exposure calculation and monitoring and
+stress testing. The Bank reviews the country risk rating and
+limits at least once every year.
+Country risk is the risk incurred to a bank arising from
+the inability or refusal by the borrower or debtor to repay
+bank debt, losses suffered by the Bank or its commercial
+presence in such country or region and other losses due
+to economic, political and social changes and events
+in a country or a region. Country risk may be triggered
+by deterioration of economic conditions, political and
+social turmoil, asset nationalization or expropriation,
+government's refusal to pay external debt, foreign
+exchange control or currency depreciation in a country or a
+region.
+Country Risk
+actively responded to social concerns, and organized and
+promoted influential brand communication activities, to
+enhance the Bank's brand image. During the reporting
+period, the reputational risk of the Bank was stable and
+within a controllable range.
+In 2021, the Bank kept improving the structure of
+reputational risk management system, to optimize relevant
+working mechanism and enhance reputational risk
+management. The Bank revised and issued the Measures
+for Reputational Risk Management of ICBC (Version 2021)
+and further improved the construction of the whole-
+process reputational risk management system across
+the Group. The Bank raised the efficiency of "dual-line
+management" (speciality and local) and prevented hidden
+reputational risks at the source. In addition, the Bank
+The Board of Directors is responsible for reviewing and
+finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of
+the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and
+effectiveness of reputational risk management across
+the Bank and assuming the ultimate responsibility for
+reputational risk management. The Senior Management
+is responsible for leading reputational risk management
+of the Bank, implementing the strategies and policies
+established by the Board of Directors, reviewing and
+finalizing the rules, measures and operating procedures
+for reputational risk management, preparing plans for
+responding to and coping with extraordinarily major
+reputational risk events and ensuring the proper and
+effective operation of the reputational risk management
+system. The Bank has established a special reputational
+risk management team to take charge of the daily
+management of reputational risk.
+Reputational risk is defined as the risk of negative
+comments on the Bank from stakeholders, the public
+or the media as a result of the behaviors of the Bank or
+practitioners or external events, thereby damaging brand
+value, detrimental to normal operation, and even affecting
+market and social stability. Reputational risk may arise
+in any part of the Bank's operation and management,
+and usually co-exists and correlates with credit risk,
+market risk, operational risk and liquidity risk. Good
+reputation is central to the operation and management of
+a commercial bank. The Bank highly values its reputation
+and has incorporated reputational risk management in the
+corporate governance and enterprise risk management
+system to prevent reputational risk.
+Reputational Risk
+Discussion and Analysis
+77
+Annual Report 2021
+measurement.
+Note: Please refer to "Note 49. (b) to the Consolidated Financial Statements: Liquidity Risk".
+43,662
+(14,309,956)
+(14,262,606)
+Less than
+on
+In RMB millions
+repayable
+Overdue/
+LIQUIDITY EXPOSURE ANALYSIS
+1 to 3 3 months to
+Discussion and Analysis
+Annual Report 2021
+of Liquidity Coverage Ratio of Commercial Banks, please
+refer to the section headed "Unaudited Supplementary
+Information to the Consolidated Financial Statements".
+As at the end of 2021, the liquidity exposure for less
+than 1 month turned negative from positive from the end
+of last year, mainly due to the increase of matured due
+to customers within corresponding term. The negative
+liquidity exposure for 1 to 3 months expanded, mainly
+due to the increase of matured due to customers within
+corresponding term. The negative liquidity exposure for
+3 months to 1 year decreased slightly, mainly due to the
+increase of matured loans and advances to customers with
+corresponding term. The positive liquidity exposure for 1
+to 5 years decreased slightly mainly due to the increase
+of matured due to customers within corresponding
+term. The positive liquidity exposure for the category
+of over 5 years expanded, which was mainly due to the
+increase in matured loans and advances to customers and
+bond investments within corresponding term. Deposits
+maintained steady growth with a high deposition rate,
+and at the same time the Bank made major investment in
+highly liquid bond assets, and possessed sufficient liquidity
+reserves. Therefore, the overall liquidity of the Bank was
+maintained at a safe level.
+The daily average liquidity coverage ratio for the fourth
+quarter of 2021 was 112.20%, 0.96 percentage points
+higher than the previous quarter, mainly because of the
+continuous growth of qualified high-quality liquid assets.
+High-quality liquid assets cover cash, available central bank
+reserve under stress and primary and secondary bond
+assets that can be included in the liquidity coverage ratio
+under the regulatory requirements. For the quantitative
+information for liquidity coverage ratio based on the
+Administrative Measures for the Information Disclosure
+Net stable funding ratio aims to ensure commercial banks
+have sufficient stable sources of funding to meet the needs
+for stable funding of assets and off-balance sheet risk
+exposures. The net stable funding ratio is the ratio of the
+available stable funding to the required stable funding. As
+at the end of the fourth quarter of 2021, the net stable
+funding ratio was 126.20%, 1.98 percentage points lower
+than that at the end of the previous quarter, mainly due
+to the rapid growth of stable funds required. For the
+quantitative information for net stable funding ratio in
+accordance with Disclosure Rules on Net Stable Funding
+Ratio of Commercial Banks, please refer to the section
+headed "Unaudited Supplementary Information to the
+Consolidated Financial Statements".
+Note: The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and accounting
+standards applicable to the current period. The comparative figures are not adjusted or restated.
+71.6
+75
+1 to 5
+Over 5
+demand
+At 31 December 2021
+Total
+years
+Undated
+14,692,050 3,190,277 3,275,258
+13,324,640 3,351,427 2,909,515
+981,145
+(563,541)
+(209,780)
+335,580
+538,067
+(377,347)
+(415,735)
+(89,448)
+years
+1 year
+months
+1 month
+At 31 December 2020
+27,350
+3 months
+(6,440,087)
+(6,378,856)
+(27,350)
+Borrower G
+0.2
+42,660
+Transportation, storage and postal services
+Borrower F
+0.2
+Transportation, storage and postal services
+48,999
+Borrower E
+(39,969)
+49,479
+Finance
+Borrower D
+0.2
+Transportation, storage and postal services.
+50,828
+42,375
+Borrower H
+Discussion and Analysis
+ICBC
+70
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2021 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+2.7
+554,249
+0.2
+0.2
+0.2
+36,781
+0.2
+40,095
+Finance
+Finance
+Finance
+Borrower I
+Borrower J
+Total
+34,468
+Market Risk
+Finance
+0.3
+3.6
+2021
+31 December
+At
+At
+At
+31 December
+2020
+3.5
+Loan concentration to the single largest borrower (%)
+Loan concentration to the top ten borrowers (%)
+As at the end of 2021, the total amount of loans granted by the Bank to the single largest borrower and top ten single
+borrowers accounted for 3.6% and 14.2% of the Bank's net capital base respectively. The total amount of loans granted to
+the top ten single borrowers was RMB554,249 million, accounting for 2.7% of the total loans.
+BORROWER CONCENTRATION
+The Bank carried out large exposures management in strict accordance with regulatory requirements, improved the large
+exposures management system, optimized large exposures limit management, promoted the construction of large exposures
+management related systems, and continuously improved the Group's large exposures management.
+Large Exposures Management
+Discussion and Analysis
+69
+Item
+Borrower C
+31 December
+2019
+14.2
+67,107
+Transportation, storage and postal services
+Borrower B
+0.8
+141,457
+Transportation, storage and postal services
+3.1
+loans
+Industry
+Borrower
+Borrower A
+% of total
+In RMB millions, except for percentages
+The table below shows the details of the loans granted to the top ten single borrowers of the Bank as at the end of 2021.
+12.6
+Amount
+Market risk is defined as the risk of loss to the Bank's
+on- and off-balance sheet activities caused by adverse
+movements in market rates (including interest rates,
+exchange rates, stock prices and commodity prices). The
+Bank is primarily exposed to interest rate risk and currency
+risk (including gold). Market risk management is the
+process of identifying, measuring, monitoring, controlling
+and reporting market risk. The objective of market risk
+management is to control market risk exposures within a
+tolerable level and maximize risk-adjusted return according
+to the Bank's risk appetite.
+0.2
+In 2021, the Bank continued to deepen the Group's market
+risk management, tightened the Group's market risk limit
+control, and verified and issued the Group's market risk
+limit plan for 2021. A forward-looking analysis of interest
+rate, exchange rate and commodity risks was conducted in
+a timely manner. It continuously conducted global financial
+market monitoring and perfected the fast risk reporting
+mechanism. Empowered by technologies, the market risk
+management system was more intelligent. It continuously
+promoted the extended application of Global Market Risk
+Interest Rate Sensitivity Analysis
+Analysis on Interest Rate Risk in the
+Banking Book
+and continuously deepened the new pattern of cross-
+cyclical stable interest rate risk management. The Bank
+strengthened the research and anticipation of interest
+rate risk strategy in a forward-looking and active manner,
+made combined use of asset and liability amount, price
+and derivative tools to accurately adjust the allocation
+structure of the Group's asset and liability interest rate
+portfolio, effectively resisted the impact of global economic
+and financial operation and internal and external risk
+challenges, and realized the balanced growth of current
+income and long-term value.
+In 2021, the Bank implemented the new development
+concept, improved the combined regulation mechanism
+for whole process management, all-factor regulation
+and full-lifecycle coverage of interest rate risk, built an
+intelligent interest rate risk monitoring, early warning and
+business control platform, improved the ability to respond
+quickly and actively to complex market environment,
+In line with the principles of comprehensiveness, prudence
+and foresight, the Bank's stress testing on interest rate
+risk in the banking book adopted the interest rate risk
+exposure measurement approach and standardized
+duration approach to measure the effect of interest rate
+changes under different stress scenarios on the overall
+profit and economic value. Based on the domestic and
+overseas regulatory requirements, the bank-wide asset and
+liability business structure, operation and management as
+well as risk appetite, the Bank set stress testing scenarios
+for interest rate risk in the banking book by taking into
+account the current interest rate level, historical changes
+and trends, total assets and liabilities and their term
+characteristics, business development strategies, customer
+behaviors and other factors, and conducted stress testing
+quarterly.
+Discussion and Analysis
+Supposing that there is parallel shift of overall market
+interest rates, and taking no account of possible risk
+management actions taken by the management to mitigate
+the interest rate risk, the analysis on interest rate sensitivity
+of the Bank categorized by major currencies at the end of
+2021 is shown in the following table:
+ICBC
+The objective of management of interest rate risk in the
+banking book: The Bank aims at maximizing the risk-
+adjusted net interest income within the tolerable level
+of interest rate risk under its risk management and risk
+appetite. The Bank formulated strategies and clarified
+objectives and modes for managing interest rate risk
+in the banking book based on risk appetite, risk status,
+macroeconomic and market changes. Based on the pre-
+judging of the interest rate trend and measurement
+results of the changes in overall profit and economic
+value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated
+approach to using interest rate risk control tools to
+mitigate and manage risks, so as to ensure the Bank's
+actual interest rate risks conform to its bearing capability
+and willingness. On the basis of management strategies
+and objectives, the Bank developed policies and made clear
+the modes and instruments for managing interest rate risk
+in the banking book. By developing and modifying such
+methods as on-balance sheet adjustment and off-balance
+sheet hedging to manage interest rate risk, adeptly using
+quantity, pricing and derivative instruments regarding
+assets and liabilities, and applying limit management
+system, business plan, performance assessment and capital
+evaluation in all areas for interest rate risk management
+and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the
+affiliates and the products and portfolios easily affected by
+interest rate risk.
+the ultimate and executive responsibilities, respectively,
+for managing interest rate risk in the banking book. The
+Asset & Liability Management Department of the Head
+Office takes the leading role in managing interest rate
+risk in the banking book, and other departments and
+institutions play their roles in implementing policies and
+standards concerning interest rate risk in the banking
+book. The Internal Audit Bureau and the Internal Control &
+Compliance Department of the Head Office are responsible
+for reviewing and evaluating duties in respective of interest
+rate risk in the banking book.
+The Bank's management system for interest rate risk in
+the banking book conforms to the system importance, risk
+status and business complexity, and fits the Bank's overall
+development strategy and the enterprise risk management
+system. The system mainly consists of the following
+elements: an effective risk governance structure; sound
+risk management strategies, policies and procedures;
+effective risk identification, measurement, monitoring,
+control and mitigation that cover all areas; a complete
+internal control and review mechanism; a fully-built risk
+management system; and adequate information disclosure
+and reporting. The Bank strictly complied with regulatory
+requirements for interest rate risk in the banking book,
+effectively managed interest rate risk in the banking book
+at the Bank and consolidated level, and developed a sound
+governance structure for interest rate risk management in
+the banking book that is fully built and well-structured,
+with clearly defined rights and responsibilities. The Board
+of Directors and the Senior Management are vested with
+Management of Interest Rate Risk in the
+Banking Book
+Interest Rate Risk in the Banking Book
+Interest rate risk in the banking book is defined as the
+risk of loss in the economic value and overall profit of the
+banking book arising from adverse movements in interest
+rate and maturity structure, etc.
+Please refer to the section headed "Market Risk" of the
+2021 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for
+further information on market risk capital measurement.
+72
+Please refer to "Note 49. (c)(ii) to the Consolidated
+Financial Statements: Currency Risk" for the exchange rate
+sensitivity analysis.
+Currency
+RMB
+HKD
+equity
+income
+Effect on
+net interest
+Effect on
+equity
+income
+USD
+The Bank strictly complies with regulatory requirements
+on market risk management, has implemented an
+independent, centralized and coordinated market
+risk management model, and formed a management
+organizational structure featuring the segregation of the
+front, the middle and the back offices in the financial
+market business. The Board of Directors assumes the
+ultimate responsibility for monitoring market risk
+management. The Senior Management is responsible
+for executing the strategies, overall policy and system
+concerning market risk management approved by
+the Board of Directors. The Market Risk Management
+Committee of the Senior Management is the reviewing and
+decision-making organ of the Bank in respect of market
+risk management, is responsible for reviewing material
+affairs of market risk management, and performs its duty
+in accordance with the Working Regulations for the Market
+Risk Management Committee. The risk management
+departments at different levels undertake the responsibility
+of coordinating market risk management at respective
+levels, and the business departments implement market
+risk management policies and standards for their respective
+business areas in accordance with their functions.
+-100 basis points
+Effect on
++100 basis points
+In RMB millions
+Total
+Other
+Effect on
+31,242
+net interest
+26,484
+USD
+At 31 December 2020
+In RMB (USD) millions
+At 31 December 2021
+FOREIGN EXCHANGE EXPOSURE
+Discussion and Analysis
+71
+Annual Report 2021
+In 2021, the Bank closely watched the changes in external
+environment and market conditions, actively took a
+combination of measures such as limit management
+and hedging of risks to improve the matching degree of
+the Group's foreign exchange assets and liabilities, and
+strengthened capital fund preservation management of
+overseas institutions. The currency risk was controllable in
+general.
+Currency risk is the risk of adverse movements of exchange
+rate resulting in losses on the foreign currency exposure,
+which is due to the currency structure's mismatch between
+foreign currency assets and liabilities. The Bank's objective
+of currency risk management is to control the impact of
+exchange rate fluctuations on the Bank's financial position
+and shareholders' equity within a tolerable extent. The
+Bank mitigates such risk principally by limit management
+and hedging of risks. The Bank carries out sensitivity
+analysis and stress testing of currency risk on a quarterly
+basis, and the Senior Management and the Market Risk
+Management Committee review the currency risk reports
+on a quarterly basis.
+The Bank kept strengthening trading book market risk
+management and product control, and adopted the value-
+at-risk (VaR), stress testing, sensitivity analysis, exposure
+analysis, profit/loss analysis, price monitoring and other
+means to measure and manage trading book products.
+It continued to improve the portfolio-based market
+risk limit management system, refined limit indicators,
+ameliorated the dynamic management mechanism to meet
+the requirements of new products and businesses for
+timeliness, and realized quick and flexible limit monitoring
+and dynamic adjustments based on the GMRM system.
+For VaR of the trading book, please refer to "Note 49. (c)(i)
+to the Consolidated Financial Statements: VaR".
+Book
+Management of Market Risk in the Trading
+204,300
+Management ("GMRM") system to overseas institutions
+and steadily pushed forward the implementation of the
+standardized market risk approach of Basel III Final Reform
+Package issued by Basel Committee.
+USD
+Item
+Currency Risk Management
+(30,351)
+168,475
+RMB
+exchange items, net
+(198,474)
+(43,435)
+(276,298)
+Exposure of off-balance sheet foreign
+Total foreign exchange exposure, net
+equivalent
+61,593
+RMB
+402,774
+69,919
+444,773
+equivalent
+Exposure of on-balance sheet foreign
+exchange items, net
+Risk resilience was further boosted
+Discussion and Analysis
+Price scissors
+Overdue rate
+-450
+0
+-150
+150
+300
+Unit: %
+450
+Unit: RMB100 millions, %
+-300
+2020
+200.00%
+250.00%
+1.40%
+1.20%
+1.00%
+0.80%
+0.60%
+0.40%
+0.20%
+0.00%
+150.00%
+2021
+Asset quality continued to improve
+◆ NPL ratio
+1.60%
+ICBC
+Higher proportion of non-interest income
+percentage points over the end of last year. Allowance to
+total loans ratio was 2.92%, representing an increase of
+7 basis points. Credit cost ratio was 0.86%, down 0.11
+percentage points. Fifth, capital discipline worked
+effectively. RWA grew by 7.8%, 3.2 percentage points
+slower than growth of credit assets. Sixth, the input/
+output efficiency was high. Cost-to-income ratio was
+26.36%, still relatively low among global peers despite a
+rise of 1.60 percentage points over last year.
+2.92%
+First, net interest margin ("NIM") remained good.
+NIM stood at 2.11%, still an outstanding level in the
+banking sector. Against the backdrop of persistently low
+interest rates worldwide and narrowing banking spreads,
+the contraction (-4 basis points) in NIM outperformed
+NIM remained good
+Unit: %
+2.20%
+2.16%
+2.15
+2.13%
+2.09%
+0.55%
+0.35%
+0.15%
+2.11
+86
+-0.05%
+19.16
+19.77
+-0.04
+-0.25%
+2021
+2020
+2021
+-0.15
+2.06%
+2020
+Decline rate
+NIM
+Third, asset quality further improved. NPL ratio was
+1.42%, down 16 basis points from the end of last year,
+and basically returned to the pre-pandemic level. The
+overdue loan rate was 1.23%, down 21 basis points.
+The price scissors between overdue loans and NPLs
+was RMB-38.5 billion, maintaining negative for seven
+consecutive quarters, representing a record low. Fourth,
+risk resilience was further boosted and the base
+of risk allowances further fortified. Allowance to
+NPLs was 205.84%, representing an increase of 25.16
+Unit: %
+2.84%
+2020
+2021
+195,000
+130,000
+65,000
+0
+2020
+Investment in bonds
+2021
+Loans and advances to customers
+Total assets
+Total deposits
+Unit: RMB100 millions
+350,000
+280,000
+210,000
+260,000
+140,000
+0
+2020
+Customer deposits
+2021
+Total liabilities
+Fifth, the Bank remained in the first place in
+international rankings. The Bank was ranked the 1st
+place among the Top 1000 World Banks by The Banker,
+the 1st place in the Global 2000 by Forbes, and the 1st
+place in the list of commercial banks of the Global 500
+in Fortune for the ninth consecutive year, demonstrating
+strong overall capacity and market influence. Sixth, brand
+value kept increasing. According to the "2022 Top 500
+Banking Brand" by Brand Finance, a research institute of
+global brand value, the Bank took the 1st place among the
+world's top banking brands with a brand value of USD75.1
+billion for the sixth consecutive year.
+IV. Major breakthroughs made in "bringing
+out our strengths to make up for our
+weaknesses and laying a solid foundation
+and base"
+i. Bringing out our strengths: focusing on cementing
+strengths in institutional banking, corporate banking,
+settlement and transaction banking. In terms of
+settlement service, RMB corporate settlement generated
+RMB11.3 billion of fee income, ranking first among peers.
+In terms of institutional banking, the customer base
+hit a five-year high in growth, and deposits from banks
+and other financial institutions remained in the first
+place among comparable peers, manifesting a notable
+competitive edge. In terms of corporate banking,
+the Bank still took the first spot in both the number of
+corporate customers and the amount of corporate loans
+and deposits among comparable peers. The Bank was the
+first commercial bank to break the RMB10 trillion mark of
+RMB corporate loans. The asset quality improved steadily.
+In terms of transaction banking, the financial market
+business generated more than RMB100 billion of net
+profit, investment banking continued to rank first among
+domestic peers by income from advisory and consulting
+services, and mega asset management totaled RMB27
+trillion, representing a growth of 11.24%.
+ii. Making up for our weaknesses: focusing on
+personal banking, foreign exchange business, key
+areas and urban-rural collaborative development. In
+terms of No.1 Personal Bank Strategy, personal assets
+under management ("AUM", close to RMB17 trillion)
+still led the market. The number of individual customers
+exceeded 700 million and the number of mobile banking
+customers reached 469 million. The Bank was the first
+bank to have more than 100 million monthly active users
+("MAU") of mobile banking. The balance of personal
+loans reached nearly RMB8 trillion, and payroll service
+reached over RMB5 trillion of distributions to more than
+100 million customers. In terms of the Strategy of the
+Preferred Bank for Foreign Exchange Business, the
+Bank launched the "YES ICBC" financial service brand.
+The average daily balance of domestic foreign exchange
+deposits increased by 35% over the previous year. The
+Group's cross-border RMB business volume exceeded
+RMB8.5 trillion. The Bank became one of the first eligible
+pilot banks for the "Southbound Bond Connect" scheme
+and the "Cross-boundary Wealth Management Connect"
+scheme in the Guangdong-Hong Kong-Macao Greater
+Bay Area. It played a leading role as a big bank to serve
+two-way opening-up of the financial market. In terms
+of Strategy for Sharpening Competitive Edge in Key
+Regions, the Bank enjoyed a dominance in total balance
+of deposits and loans in five key areas, namely the Beijing-
+88
+ICBC
+II. Capital profitability and risk control
+capability continuously improved
+70,000
+-2.75%
+325,000
+Unit: RMB100 millions
+Allowance to NPLs
+◆ Allowance to total loans ratio
+III. Scale merits and brand value leading the
+world
+First, the Bank ranked No. 1 by total income among
+global banks. The Bank recorded RMB860.9 billion in
+operating income, up 7.6% from the previous year, with
+net fee and commission income maintaining its leading
+position among domestic banks. Second, the Bank
+ranked No. 1 by total profits among global banks.
+Net profit reached RMB350.2 billion, representing an
+increase of 10.2% over the previous year. Profit before
+provision was RMB627.5 billion, up 5.5% from last year.
+Third, the Bank ranked No. 1 by total assets among
+global banks. Total assets reached RMB35,171.4 billion,
+representing an increase of 5.5% over the end of the
+previous year. Loans and advances to customers totaled
+RMB20,667.2 billion, up 11.0% from the end of the
+previous year. Investment in bonds was RMB8,817.3
+billion, up 9.5% from the end of the previous year.
+Fourth, the Bank ranked No. 1 by total deposits
+among global banks. Due to customers amounted to
+RMB26,441.8 billion, an increase of 5.2% from the end of
+the previous year.
+Income and profit ranked first worldwide
+Unit: RMB100 millions, %
+10,000
+8,000
+6,000
+4,000
+2,000
+0
+2020
+390,000
+Net profit
+16.0%
+12.0%
+8.0%
+4.0%
+-0.0%
+2021
+Growth rate of net profit
+Growth rate of profit before provision
+Growth rate of operating income
+Annual Report 2021
+88
+87
+Discussion and Analysis
+Total assets
+Profit before provision
+Operating income
+Discussion and Analysis
+comparable domestic banks. The Bank demonstrated
+a strong ability to manage assets and liabilities, and
+implemented the policy of fee reduction and profit
+concessions and serving the real economy. Second, the
+profit structure was optimized with an increasing
+proportion of non-interest income. Non-interest income
+accounted for 19.77% of operating income, up 0.61
+percentage points compared with the previous year.
+Annual Report 2021
+Risk-weighted assets (1)
+3,909,669
+21,690,349
+20,124,139
+Core tier 1 capital adequacy ratio (%)
+13.31
+13.18
+Tier 1 capital adequacy ratio (%)
+14.94
+Net capital base
+14.28
+18.02
+16.88
+Note: (1) Refers to risk-weighted assets after capital floor and adjustments.
+80
+ICBC
+RISK-WEIGHTED ASSETS
+Item
+Credit risk-weighted assets
+Parts covered by internal ratings-based approach
+Parts uncovered by internal ratings-based approach
+Capital adequacy ratio (%)
+Market risk-weighted assets
+1,116
+170,712
+Additional tier 1 capital
+354,986
+219,790
+Additional tier 1 capital instruments and related premiums
+354,331
+219,143
+Valid portion of minority interests
+655
+647
+Valid portion of minority interests
+Net tier 1 capital
+2,872,792
+Tier 2 capital
+668,305
+523,394
+Valid portion of tier 2 capital instruments and related premiums
+418,415
+351,568
+Surplus provision for loan impairment
+248,774
+3,241,364
+The Bank implements a group-based capital management
+mechanism, and takes capital as the object and an
+instrument for its management activities, including
+planning, measurement, allocation, application and
+operation. The Bank's capital management aims at
+maintaining appropriate capital adequacy ratio and
+continuously meeting capital supervisory regulations
+and policies; ceaselessly strengthening and enhancing
+the capital base and supporting business growth and
+implementation of strategic planning; establishing a
+value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism
+and improving capital allocation efficiency; innovating
+and expanding capital replenishment channels, raising
+capital quality and optimizing capital structure. The Bank's
+capital management covers various operating entities in
+the Group, and its contents include capital adequacy ratio
+management, economic capital management, capital
+investment and financing management.
+Parts covered by internal model approach
+Operational risk-weighted assets
+At
+At
+At
+At
+At
+31 December
+30 September
+Item
+2021
+In RMB millions, except for percentages
+2021
+31 March
+2021
+31 December
+2020
+Net tier 1 capital
+Balance of adjusted on- and
+3,241,364
+37,292,522
+3,132,095
+37,682,357
+3,009,641
+37,370,525
+30 June
+2021
+Parts uncovered by internal model approach
+LEVERAGE RATIO
+20,124,139
+Total
+Discussion and Analysis
+At 31 December
+2021
+In RMB millions
+At 31 December
+2020
+20,042,955
+18,535,324
+13,472,715
+Please refer to the 2021 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+12,279,663
+6,255,661
+153,686
+174,784
+51,014
+94,238
+102,672
+80,546
+1,493,708
+21,690,349
+1,414,031
+6,570,240
+In 2021, the Bank further deepened the capital
+management reform, strengthened capital saving and
+optimization, carried forward the disposal of low-efficiency
+capital occupation, intensified the constraint of economic
+capital management on risk-weighted assets and continued
+to elevate the capital use efficiency. It holistically balanced
+the endogenous and exogenous capital replenishment, and
+further consolidated the capital base to further reinforce
+its capacity in supporting the real economy. In 2021,
+all capital indicators performed well, of which capital
+adequacy ratio was kept at a sound and appropriate level.
+Capital Adequacy Ratio and Leverage
+Ratio
+438,640
+322,692
+356,849
+148,534
+148,597
+356,407
+356,407
+2,669,055
+2020
+339,486
+At 31 December
+At 31 December
+2021
+In RMB millions, except for percentages
+Other intangible assets other than land use rights
+Goodwill
+Core tier 1 capital deductions
+Other
+Valid portion of minority interests
+Retained profits
+General reserve
+2,903,516
+Surplus reserve
+1,618,142
+3,539
+85
+2,653,002
+2,886,378
+Net core tier 1 capital
+institutions that are under control but not subject to consolidation
+7,980
+7,980
+Investments in core tier 1 capital instruments issued by financial
+Cash flow hedge reserve that relates to the hedging of items
+that are not fair-valued on the balance sheet
+1,508,562
+(4,616)
+4,582
+5,669
+8,107
+7,691
+16,053
+17,138
+(10,178)
+(18,658)
+3,552
+(4,202)
+Valid portion of capital reserve
+Paid-in capital
+Core tier 1 capital
+Net capital base
+2,605,594
+2,872,792
+2,944,636
+3,241,364
+Net tier 1 capital
+2,404,030
+2,653,002
+2,614,392
+3,909,669
+2,886,378
+Parent
+Company
+Group
+Parent
+Company
+Group
+Item
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2020
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+The Bank calculated its capital adequacy ratios at
+all levels in accordance with the Capital Regulation.
+According to the scope of implementing the advanced
+capital management approaches as approved by the
+regulatory authorities, the Bank adopted the foundation
+internal ratings-based ("IRB") approach for corporate
+credit risk, the IRB approach for retail credit risk, the
+internal model approach ("IMA") for market risk, and
+the standardized approach for operational risk meeting
+regulatory requirements. The weighted approach was
+adopted for credit risk uncovered by the IRB approach and
+the standardized approach was adopted for market risk
+uncovered by the IMA.
+Net core tier 1 capital
+3,600,883
+3,396,186
+3,114,878
+Item
+CAPITAL ADEQUACY RATIO
+Discussion and Analysis
+79
+Annual Report 2021
+As at the end of 2021, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 13.31%, 14.94% and 18.02%, respectively,
+complying with regulatory requirements.
+17.02
+16.88
+18.30
+18.02
+Capital adequacy ratio (%)
+14.24
+14.28
+14.97
+14.94
+Tier 1 capital adequacy ratio (%)
+13.14
+13.18
+13.29
+13.31
+Core tier 1 capital adequacy ratio (%)
+Discussion and Analysis
+CAPITAL MANAGEMENT
+1,114
+3,396,186
+2021
+2,988,192
+3,121,151
+2,591,743
+480,825,563
+18,157,690
+7,448,878
+864
+68,030
+16,065
+35,300,338
+8,085,879
+Assets of non-banking affiliates
+790,093
+872,495
+Wealth management business
+1,637,344
+Balance of wealth management products issued by the wealth management subsidiary
+Cross-jurisdictional claims and liabilities
+1,070,072
+4,222,848
+Annual Report 2021
+83
+Securities measured at fair value
+Discussion and Analysis
+2020
+Number of domestic operating institutions
+7,966,381
+784,582
+153,164
+2,092,121
+2,069,735
+82
+ICBC
+Discussion and Analysis
+Assessment Indicators of Domestic Systemically Important Banks
+Derivatives
+In accordance with the Measures for Assessment of Systemically Important Banks issued by PBC and CBIRC and the Notice
+on Launching the Assessment Data Completion of Systemically Important Banks issued by CBIRC, the Bank calculated and
+disclosed the 2020 assessment indicators of domestic systemically important banks.
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system assets
+Intra-financial system liabilities
+Securities and other financing instruments issued
+Payments settled via payment systems or correspondent banks
+Assets under custody
+Agency and commission-based business
+Number of corporate customers (in 10,000)
+Number of personal customers (in 10,000)
+Indicator
+OUTLOOK
+In 2022, the global economy is expected to continue
+its rebound, but tensions in the global supply chain and
+energy supplies may persist, and the prices of major asset
+categories show a divergent trend. The accelerated shift in
+monetary policy of major economies and the upward shift
+in interest rate centers will pose challenges to the banking
+sector in terms of liquidity management, asset allocation
+and optimization of the debt structure. At present, the
+Chinese economy faces pressures from three fronts,
+namely shrinking demand, supply shock and weakening
+expectations, but the momentum of sustained recovery
+and development has not changed, and its economic
+fundamentals remain strong in the long term. China is
+stepping up efforts to foster a new development paradigm
+featuring dual circulation, in which domestic and overseas
+markets reinforce each other, with the domestic market as
+the mainstay. This will bring new opportunities to the high-
+quality development in the banking sector.
+Adhering to Xi Jinping Thought on Socialism with Chinese
+Characteristics for a New Era, ICBC will continue to
+earnestly implement the decisions and arrangements
+of the Central Committee of the Communist Party of
+China and the State Council, advance full and accurate
+implementation of the new development philosophy in the
+new development stage, and actively serve and integrate
+into the new development paradigm. The Bank will stay
+committed to the general principle of pursuing progress
+while ensuring stability, keep hold of the requirement
+of "stability", fight for achievements in "progress",
+redouble efforts in "reform", stick to the path of financial
+development with Chinese characteristics, follow the
+"48-character" guideline, and pursue its own high-
+quality development while contributing to the country's
+high-quality economic and social development. First, it
+will reinforce the Party's establishment in a high-
+quality manner. The Bank will uphold and strengthen
+the Party's leadership, further integrate it with corporate
+governance, better align the procedural rules of the
+Party Committee and the decision-making mechanism in
+corporate governance, and improve the modern financial
+enterprise system. The Bank will give full play to its
+role in full and strict Party self-governance in providing
+political guidance and guarantees and strengthen strict
+management and atmosphere. Second, it will serve
+the new development paradigm in a high-quality
+manner. The Bank will continue to focus on its main
+responsibilities and businesses, scale up support for
+manufacturing enterprises and small and micro enterprises,
+and improve the service quality and efficiency for scientific
+and technological innovation and green development.
+The Bank will bring into full play to its dual functions as
+monetary policy tools in the total amount and structure of
+investment and financing, implement the cross-cyclical and
+84
+Unit: %
+12.15%
+38,000
+12.07%
+36,000
+12.00%
+34,000
+11.92%
+32,000
+Higher operating efficiency
+1.04%
+1.01%
+0.99%
+-30,000
+11.85%
+0.98%
+2020
+2021
+ROE
+⚫ ROA
+1.02%
+40,000
+Net capital base
+Capital adequacy ratio
+ICBC
+counter-cyclical policy arrangements, and provide targeted
+support for the implementation of major projects during
+the 14th Five-Year Plan period to keep the macro-economy
+on an even keel. The Bank will integrate financial services
+into the processes of production, distribution, circulation
+and consumption to help build a complete demand system
+and smoothen the circulation of the national economy and
+the global economy. Third, it will implement the new
+development plan at a high-quality standard. The
+Bank will give greater prominence to quality, efficiency and
+innovation, make itself stronger and better based on actual
+conditions, and improve qualitative development. It will
+push forward the implementation of key strategies such
+as the No.1 Personal Bank, the Preferred Bank for Foreign
+Exchange Business, Sharpening Competitive Edge in Key
+Regions, and Urban-Rural Collaborative Development. The
+Bank will strive to achieve new results while "bringing
+out our strengths to make up for our weaknesses and
+laying a solid foundation and base" and make mid-term
+breakthroughs in the implementation of new development
+plan. Fourth, it will carry out the high-quality
+enterprise risk management. Adhering to the systematic
+thinking pattern, the Bank will strengthen risk awareness
+and bottom-line thinking, comprehensively sort out and
+identify potential risks, and develop targeted response
+plans and countermeasures. The Bank will improve credit
+risk management, and further stabilize the asset quality.
+It will refine the risk management mechanism for online
+and emerging businesses, and strictly forestall market risks.
+The Bank will comprehensively enhance the effectiveness
+of internal control and case prevention measures to ensure
+that no major risk events and cases occur. Fifth, it will
+press ahead with high-quality financial reform. The
+Bank will further promote the organic integration of the
+Party's leadership and corporate governance, put in place
+the sound system of modern financial enterprise, and
+modernize the governance system and capacity. It will fully
+exploit its advantages in technology and data to boost
+the development of the digital economy and ramp up its
+efforts in building "D-ICBC". The Bank will roll out new
+cutting-edge and controllable financial technology and
+take solid measures to ensure the security in the process
+of digital transformation. Sixth, it will reinforce the
+building of talent teams in a high-quality manner. The
+Bank will strengthen the top-level design for talent-related
+work, devise and implement a new round of bank-wide
+talent development plans. It will improve the evaluation,
+appraisal and monitoring systems, refine the incentive and
+restraint mechanisms, strengthen employee management
+and supervision, and improve employee care. By doing
+so, the Bank aims to build a strong bank with top-notch
+talent teams and forge synergy for ICBC's high-quality
+development.
+HOT TOPICS IN THE CAPITAL MARKET
+Discussion and Analysis
+Hot Topic 1: An Impressive "Answer
+Sheet" from ICBC
+In 2021, ICBC adhered to the "48-character" guideline and
+coordinated COVID-19 prevention and control efforts with
+business development. Through high-quality investment
+and financing, the Bank provided comprehensive services
+against a new development paradigm, implemented the
+new development plan by steadily pushing forward the
+mantra of "bringing out our strengths to make up for
+our weaknesses and laying a solid foundation and base",
+strengthened risk control on every front by improving the
+risk management system and comprehensively deepened
+reform and innovation through well-focused efforts to
+enhance governance capacity. While contributing to high-
+quality economic growth, the Bank further improved its
+sustainability, further cemented the foundation for its
+own high-quality development and delivered remarkable
+performance in main business indicators. In summary, ICBC
+continued to highlight the qualities of "strong, excellent
+and large" and delivered to investors an impressive
+'answer sheet".
+"I
+I. The input and output efficiency of assets
+and capital constantly enhanced
+First, operational efficiency was further boosted.
+ROE reached 12.15% and ROA was 1.02%, up 20 basis
+points and 2 basis points from last year, respectively, an
+outstanding level among world's largest banks. Second,
+the capital base was increasingly strengthened.
+Capital adequacy ratio stood at 18.02%, an increase
+of 1.14 percentage points from the end of last year,
+maintaining a leading position in the global banking sector.
+Core tier 1 capital adequacy ratio was 13.31%, up 0.13
+percentage points, and tier 1 capital adequacy ratio was
+14.94%, up 0.66 percentage points. Net capital base was
+RMB3,909.7 billion, an increase of 15.1% from the end of
+last year, remaining at a leading position worldwide.
+Stronger capital base
+Unit: RMB100 millions, %
+20.0%
+16.0%
+12.0%
+8.0%
+4.0%
+0.0%
+2020
+Core tier 1 capital adequacy ratio
+Tier 1 capital adequacy ratio
+Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+In RMB millions, unless otherwise specified
+Trading and available-for-sale securities
+For details on the issuance of capital instruments of the
+Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of
+HKEX and the website of the Bank.
+The Second Extraordinary General Meeting of 2021 of the
+Bank reviewed and approved the Proposal on the Issuance
+of Eligible Tier 2 Capital Instruments, which approved the
+Bank's issuance of eligible tier 2 capital instruments in
+domestic and offshore markets to replenish the Bank's tier
+2 capital. The issuance plan of the eligible tier 2 capital
+instruments is still subject to the approval of relevant
+regulatory authorities.
+2 capital bonds of RMB60.0 billion and RMB40.0 billion
+in the national inter-bank bond market, respectively. All
+proceeds were used to replenish the Bank's tier 2 capital
+in accordance with the applicable laws as approved by
+relevant regulatory authorities.
+Discussion and Analysis
+81
+Annual Report 2021
+In 2021, the Bank received the approvals from CBIRC
+and PBC respectively, for the Bank to publicly issue tier 2
+capital bonds of no more than RMB190.0 billion in China's
+national inter-bank bond market. In December 2021
+and January 2022, the Bank issued two tranches of tier
+The Bank issued a tier 2 capital bond of RMB30.0 billion
+in China's national inter-bank bond market in January
+2021. All proceeds were used to replenish the Bank's tier 2
+capital in accordance with the applicable laws as approved
+by relevant regulatory authorities.
+Issuance Progress of Tier 2 Capital Bonds
+The Bank publicly issued two tranches of undated
+additional tier 1 capital bonds of RMB70.0 billion and
+RMB30.0 billion in China's national inter-bank bond
+market in June and November 2021 respectively. All
+proceeds from these issuances, after deduction of issuance
+expenses, were used to replenish the Bank's additional tier
+1 capital in accordance with applicable laws and approvals
+by the regulatory authorities.
+Issuance of Undated Additional Tier 1
+Capital Bonds
+The Bank issued undated additional tier 1 capital bonds of
+USD6.16 billion in the offshore market in September 2021.
+All proceeds from this issuance, after deduction of issuance
+expenses, were used to replenish the Bank's additional tier
+1 capital in accordance with applicable laws and approvals
+by the regulatory authorities.
+On the basis of capital replenishment by retained profits,
+the Bank proactively expanded the channels for external
+capital replenishment and continuously promoted the
+innovation of capital instruments, to reinforce the capital
+strength, optimize capital structure and control the cost of
+capital rationally.
+Capital Financing Management
+Note: Please refer to "Unaudited Supplementary Information to the Consolidated Financial Statements" for details on disclosed leverage
+ratio information.
+8.14
+8.12
+8.05
+8.69
+Leverage ratio (%)
+off-balance sheet assets
+35,300,338
+2,872,792
+2,956,971
+36,423,221
+Level 3 assets
+The Bank further improved the Group's economic capital
+management system in terms of measurement, allocation
+and assessment, strengthened the Group's economic
+capital constraint and incentive mechanism, and promoted
+the Group's intensive capital development. It further
+improved its economic capital measurement policy and
+optimized its economic capital measurement standards
+and system. The Bank strictly implemented the quota
+management of economic capital, continuously boosted
+the refined management of economic capital, and
+reinforced the capital constraint on domestic branches,
+profitability units, overseas institutions and subsidiaries.
+Moreover, the Bank upgraded the economic capital
+measurement and appraisal policy of credit business and
+proactively facilitated the adjustment of its credit structure.
+It strengthened trainings on economic capital management
+for institutions at all levels, and vigorously pushed
+forward the application of economic capital in operational
+management and business front-line.
+Allocation and Management of
+Economic Capital
+8.31
+Assessment Indicators of Systemically
+Important Banks
+Notional amount of over-the-counter ("OTC") derivatives
+Economic capital management of the Bank includes three
+major aspects: measurement, allocation and application.
+Economic capital indicators include Economic Capital (EC),
+Risk-Adjusted Return on Capital (RAROC) and Economic
+Value-added (EVA). All of the above are applied in credit
+resource allocation, quota management, performance
+assessment, expenditure allocation, product pricing and
+customer management, etc.
+1,259,003
+Trading volume of listed equities and other securities
+6,582,443
+2,272,838
+Underwritten transactions in debt and equity markets
+19,980,932
+Assets under custody
+493,730,289
+Payments settled via payment systems or correspondent banks
+5,080,700
+Securities and other financing instruments issued
+Trading volume of fixed-income securities
+Intra-financial system liabilities
+2,947,997
+In accordance with the Guidelines on the Disclosure of
+Global Systemically Importance Assessment Indicators for
+Commercial Banks issued by CBIRC and the Instructions for
+G-SIB Assessment Exercise issued by the Basel Committee
+on Banking Supervision, the Bank calculated and disclosed
+the global systemically importance assessment indicators.
+Global Systemically Importance Assessment
+Indicators of Commercial Banks
+2021
+Indicator
+In RMB millions
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system assets
+37,560,752
+2,088,082
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+Telephone: 852-28628555
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong SAR, China
+Computershare Hong Kong Investor Services Limited
+Corporate and Social Responsibility (CSR),
+Environmental, Social and Governance (ESG),
+H Share
+188 Yanggao South Road, Pudong New Area, Shanghai, China
+Telephone: 86-4008058058
+Facsimile: 852-28650990
+A Share
+9/F, Three Exchange Square, Central, Hong Kong SAR, China
+Share Registrars
+55th Floor, One Island East, 18 Westlands Road, Quarry Bay,
+Hong Kong SAR, China
+Freshfields Bruckhaus Deringer
+Allen & Overy
+Hong Kong SAR, China
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+Location where copies of this annual report are kept
+Haiwen & Partners
+King & Wood Mallesons
+Board of Directors' Office of the Bank
+Stock code: 360011
+Shanghai Stock Exchange
+Deloitte Touche Tohmatsu Certified Public Accountants LLP
+30/F, 222 East Yan'an Road, Huangpu District, Shanghai, China
+CPAs (Practicing): Wu Weijun and Zeng Hao
+International Auditor
+Chinese mainland
+Domestic Auditor
+Name and office address of Auditors
+Stock code: 4620
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC 20USDPREF
+Offshore Preference Share
+Stock code: 360036
+Stock name: I12
+Stock name: I11
+Shanghai Stock Exchange
+Domestic Preference Share
+Stock code: 1398
+Stock name: ICBC
+The Stock Exchange of Hong Kong Limited
+H Share
+Stock code: 601398
+Stock name: 工商銀行
+Place where shares are listed, and their names and codes
+A Share
+Legal Advisors
+Chen Siqing
+www.sse.com.cn
+Legal Representative
+Registered address and office address
+Securities Times, Economic Information Daily
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Telephone: 86-10-66106114
+Business enquiry and complaint hotline: 86-95588
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Principal place of business in Hong Kong SAR, China
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong SAR, China
+Authorized representatives
+Liao Lin and Guan Xueqing
+Board Secretary and Company Secretary
+Guan Xueqing
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Selected newspaper for information disclosure
+China Securities Journal, Shanghai Securities News,
+Deloitte Touche Tohmatsu
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+中國工商銀行股份有限公司(「中國工商銀行」)
+Legal name in Chinese
+the annual report in respect of A shares
+Website of SSE for disclosure of
+Digital Solutions
+Market Leader
+Euromoney
+Annual Report 2022
+5
+Important Notice
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+The 2022 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 30 March 2023. All directors of the Bank attended the meeting.
+The "HKEXnews" website of HKEX for disclosure of
+the annual report in respect of H shares
+www.hkexnews.hk
+The 2022 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by
+Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu in accordance with Chinese and
+International Standards on Auditing respectively, with unqualified auditors' reports being issued.
+The Board of Directors of Industrial and Commercial Bank of China Limited
+30 March 2023
+Mr. Chen Siqing, Legal Representative of the Bank, Mr. Liao Lin, President in charge of finance of the Bank, and Mr. Wang
+Gang, Person in charge of Finance and Accounting Department of the Bank, hereby warrant that the financial statements
+contained in the Annual Report are authentic, accurate and complete.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis - Risk Management" for detailed information.
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+6
+ICBC
+Corporate Information
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB3.035 (pre-tax) for each
+ten shares for 2022. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2022.
+The Bank did not convert capital reserve to share capital.
+35/F, One Pacific Place, 88 Queensway, Hong Kong SAR, China
+2%
+7
+26.36%
+27.43%
+180.68%
+30%
+24.76%
+200%
+150%
+20%
+100%
+10%
+50%
+0
+2020
+2021
+2022
+0
+2020
+Corporate Banking, SME Banking,
+1.42%
+209.47%
+2021
+205.84%
+40%
+1.58%
+16%
+1.38%
+12%
+8%
+1%
+4%
+0
+2020
+2021
+2022
+0
+2020
+2021
+2022
+Cost-to-income ratio
+Allowance to NPLs
+Unit: %
+Unit: %
+250%
+16.88%
+20%
+3%
+2021
+2020
+186,243
+206,672
+232,123
+232,123
+Unit: RMB100 millions
+Total loans and advances to customers
+2022
+2021
+2020
+ill
+3,610
+3,502
+3,177
+3,610
+Unit: RMB100 millions
+Net profit
+Financial Highlights
+2022
+Non-performing loans ("NPLs") ratio
+Total assets
+Unit: RMB100 millions
+19.26%
+18.02%
+Unit: %
+Unit: %
+Capital adequacy ratio
+2022
+2021
+2020
+251,347
+Annual Report 2022
+264,418
+298,705
+Due to customers
+2022
+2021
+2020
+333,451
+351,714
+396,097
+396,097
+298,705
+China
+ICBC Wealth Management
+THE ASIAN BANKER®
+FinTech
+Environmental and Social
+46
+Financial Market Business
+133
+Report of the Board of Supervisors
+45
+Asset Management Services
+129
+Report of the Board of Directors
+42
+Personal Banking
+110
+Corporate Governance Report
+36
+Corporate Banking
+100
+87
+Details of Changes in Share Capital
+Economic, Financial and
+and Shareholding of Substantial
+Regulatory Environments
+18
+47
+Shareholders
+Financial Statements Analysis
+20
+Directors, Supervisors and Senior
+Business Overview
+36
+Management
+91
+Responsibilities
+135
+Internet Finance
+311
+Diversified Operation and
+Subsidiary Management
+60
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Overseas Branches and Offices
+Articles of Association
+Capital Regulation
+CBIRC
+Company Law
+CSRC
+HKEX
+Hong Kong Listing Rules
+Huijin
+Bank ICBC (JSC)
+86
+56
+List of Domestic and
+50
+Significant Events
+140
+Outlet Building and Service
+Organizational Chart
+142
+Internationalized Operation
+Improvement
+Auditor's Report and Financial
+Human Resources Management,
+Statements
+143
+Employees and Institutions
+54
+53
+ICBC (Almaty)
+81
+63
+Adhere to laying a solid
+foundation for risk control and
+achieving development through
+talent cultivation
+Keeping pace with changing times, ICBC endeavors
+to advance reforms in key areas and critical
+steps, seeking room for development through
+transformation and vitality for growth through
+reform.
+Adhere to pushing for pragmatic
+business transformation and
+progressing through reform
+ICBC proactively taps resources from both domestic
+and overseas markets, and undertakes to constantly
+promote international development, which well-
+integrates with China's high-level opening-up.
+Adhere to a broad international
+vision and globalized operations
+ICBC remains steadfast in serving the real economy
+and commits to satisfying people's new expectations
+and demands for financial services, making every
+effort to build the No.1 Personal Bank.
+the customer first and
+serving the real economy
+Adhere to putting
+empowers its business operations and
+management with FinTech, and creates superior
+value for the real economy, shareholders, customers,
+employees and the society as a whole.
+ICBC
+Adhere to technology-driven
+development and value creation
+ICBC upholds the Party's leadership over the
+financial work, and strives to improve the scientific
+decision-making as well as the effectiveness of
+corporate governance through enhanced governance
+system and capacity building.
+Adhere to the guidance of
+the Party building theory and
+exercising rigorous corporate
+governance
+Strategic Significance
+the new development philosophy on all fronts, modernize its governance system and capacity,
+and turn ICBC into a world-class and modern financial enterprise with Chinese characteristics.
+Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ICBC will adhere to
+the general working principle of pursuing progress while ensuring stability, fully and faithfully apply
+Strategic Objective
+2022
+ICBC
+H
+63
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+2022
+ICBC safeguards the lifeline of asset quality by
+reinforcing bottom-line thinking with a combination
+of prevention and control measures. Meanwhile,
+corporate culture formation and caring for staff are
+strengthened to increase group cohesion.
+Annual Report
+中国銀行
+Company Profile
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+The Bank has devoted itself to building a world-
+class and modern financial enterprise with Chinese
+characteristics. The Bank has a high quality customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek
+further development and adheres to creating value
+through services while providing abundant financial
+products and superior financial services to over 10
+million corporate customers and 720 million personal
+customers around the world. It has served the high-
+quality development of the economy and society with
+its own high-quality development. The Bank has been
+consciously integrating the social responsibilities with its
+development strategy and operation and management
+activities, and gaining wide recognition in the aspects
+of serving manufacturing industry, promoting inclusive
+finance, backing rural revitalization, developing
+green finance and participating in public welfare
+undertakings.
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its
+capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and
+following the business rules of commercial banks to
+strive to be a century-old bank. It also stays committed
+to seeking progress with innovation while maintaining
+stability, continuously enhances the key development
+strategies, actively develops the FinTech and accelerates
+the digital transformation. The Bank unswervingly
+delivers specialized services, and pioneers a specialized
+business model, thus making it "a craftsman in large
+banking".
+The Bank was ranked the 1st place among the Top 1000
+World Banks by The Banker, and the 1st place in the
+list of commercial banks of the Global 500 in Fortune
+for the tenth consecutive year, and took the 1st place
+among the Top 500 Banking Brands of Brand Finance
+for the seventh consecutive year.
+ICBC
+MISSION
+Excellence for You
+Excellent services for clients
+Chairman's Statement
+President's Statement
+12
+15
+Discussion and Analysis
+18
+Financial Highlights
+45678258
+and Equity Participating
+Company
+Risk Management
+Capital Management
+Outlook
+Hot Topics in the Capital Market
+880 88
+Major Controlled Subsidiaries
+65
+Corporate Information
+Major Ranking and Rewards in 2022
+Maximum returns to shareholders
+Real success for employees
+Great contribution to society
+VISION
+To build a world-class modern
+financial institution with Chinese
+characteristics in all aspects, and
+become a long-lasting and ever-
+prosperous bank
+VALUES
+Important Notice
+Integrity Leads to Prosperity
+Humanity
+Prudence
+Innovation
+Excellence
+Contents
+Definitions
+Integrity
+The Asian Banker
+ICBC (Argentina)
+ICBC (Austria)
+中国银行业协会
+among national commercial banks for
+the second consecutive year
+In the GYROSCOPE assessment system
+st
+Ranking the
+place
+In the "Corporate Brand Value List"
+for the seventh time
+st
+Ranking the
+place
+Brand Finance
+Brand FinanceⓇ
+Among the Top 500 Banking Brands
+for the seventh
+consecutive year
+Ranking the
+st place
+Fortune
+in the Global 500 for the tenth
+consecutive year
+Among commercial banks
+st
+Ranking the
+place
+Shanghai Stock Exchange
+National Council for Social Security Fund
+Standard Bank Group Limited
+The State Council of the People's Republic of China
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial Bank
+of China Limited and its subsidiaries
+4
+CHINA BANKING ASSOCIATION
+ICBC
+Ranking the
+place
+st
+Among the Top 1000
+World Banks for the tenth
+consecutive year
+The Banker
+The Banker
+Major Ranking and Rewards in 2022
+A
+MSCI ESG Ratings
+China Council for
+Brand Development
+China Federation
+of Electronics and
+Information Industry
+Global Finance
+Best Bank for Sustainable Finance,
+China
+Forum (IFF)
+Best Bond Advisor, China
+Best Custodian Bank, Onshore, China
+The Asset
+nt
+The Strongest Bank in China
+Best International Cash
+Management Bank in China
+Best Data Management Initiative in
+China
+亚洲银行家
+THE Asset
+The Stock Exchange of Hong Kong Limited
+International Finance
+FINANCE AWARD
+China Banking
+Association
+MSCI
+IFF Global Green Finance Award -
+Innovation Award
+2022 Data Management
+Top 10 Brand Enterprises
+IFF 全球绿色金融奖
+CFEII
+Best Bank in China
+Best Corporate Bank in China
+Best Bank for Belt and Road in China
+GLOBAL
+FINANCE
+IFF GLOBAL GREEN
+中国电子信息行业联合会
+ICBC (Asia)
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+The People's Bank of China
+SSF
+SSE
+SEHK
+Hong Kong
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+New Rules on Asset Management
+MOF
+Inversora Diagonal
+IFRSS
+ICBCFS
+ICBC-AXA
+ICBC Technology
+ICBC Standard Bank
+ICBC Leasing
+ICBC Investments Argentina
+ICBC (Brasil)
+ICBC (Canada)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (London)
+ICBC (Macau)
+ICBC (Malaysia)
+ICBC (Mexico)
+Standard Bank
+ICBC (New Zealand)
+ICBC (Thai)
+ICBC (Turkey)
+ICBC (USA)
+ICBC Credit Suisse Asset Management
+ICBC International
+ICBC Investment
+ICBC (Peru)
+State Council
+The Bank/The Group
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (joint stock company)
+Industrial and Commercial Bank of China (USA) NA
+ICBC Credit Suisse Asset Management Co., Ltd.
+ICBC International Holdings Limited
+ICBC Financial Asset Investment Co., Ltd.
+ICBC Investments Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión
+ICBC Financial Leasing Co., Ltd.
+ICBC Turkey Bank Anonim Şirketi
+ICBC Standard Bank PLC
+ICBC Wealth Management Co., Ltd.
+ICBC-AXA Assurance Co., Ltd.
+Industrial and Commercial Bank of China Financial Services LLC
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting Standards
+Inversora Diagonal S.A.
+Ministry of Finance of the People's Republic of China
+The Guiding Opinions on Regulating the Asset Management Business of Financial
+Institutions jointly promulgated by PBC, CBIRC, CSRC and State Administration of
+Foreign Exchange in 2018 and relevant rules
+ICBC Information and Technology Co., Ltd.
+Accounting Standards for Business Enterprises promulgated by MOF
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+Industrial and Commercial Bank of China (New Zealand) Limited
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated in June
+2012
+China Banking and Insurance Regulatory Commission
+Company Law of the People's Republic of China
+China Securities Regulatory Commission
+Hong Kong Exchanges and Clearing Limited
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+ICBC PERU BANK
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Industrial and Commercial Bank of China (Asia) Limited
+ICBC Austria Bank GmbH
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (Argentina) S.A.
+ICBC
+Unit: RMB100 millions
+Number
+of shares
+pledged/
+locked-up/
+restrictions
+marked
+(%)
+on sales
+shares
+Unit: Share
+Number of
+100
+Notes: (1) The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2022.
+(2) As the issuance of the offshore preference shares above was non-public offering, the register of preference shareholders
+presented the information on the registered holder of the offshore preference shares.
+(3) The Bank is not aware of any connected relations or concert party action between the afore-mentioned preference shareholder
+and top 10 ordinary shareholders.
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+96
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Unknown
+Number
+of shares
+subject to
+Shareholding
+percentage
+at the end
+of the
+period
+145,000,000
+For details on the reset dividend rate of domestic preference shares of the Bank, please refer to the announcements
+published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Number of Preference Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had one offshore preference shareholder (or proxy), 27 domestic
+preference shareholders of "1" and 34 domestic preference shareholders of "2". As at the end of the month
+immediately before the annual results announcement date (28 February 2023), the Bank had one offshore preference
+shareholder (or proxy), 27 domestic preference shareholders of "I" and 35 domestic preference shareholders of "I
+行優2”.
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+BANK
+Increase/
+decrease
+Shares held
+during the
+Name of shareholder
+Nature of
+shareholder
+reporting
+Class of shares
+period
+The Bank of New York Depository
+Foreign legal person
+(Nominees) Limited
+USD offshore
+preference shares
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I√1″
+Pursuant to relevant provisions of the Prospectus on Non-public Offering of Preference Shares of Industrial and Commercial
+Bank of China Limited, domestic preference shares non-publicly offered by the Bank in November 2015 (abbreviation "I
+1" and code "360011") were priced at a coupon dividend rate adjusted in stages, with the coupon dividend rate being
+the benchmark interest rate plus a fixed spread. The coupon dividend rate for the first five years remained unchanged from
+the date of issuance, and subsequently the benchmark interest rate will be reset every five years, and the nominal dividend
+rate during each reset period will remain unchanged. In November 2020, the Bank reset the nominal dividend rate of "I
+11" as it lasted five years from the issuance date, and the coupon dividend rate after reset became 4.58% from 23
+November 2020.
+Unit: Share
+Number of
+Shares held
+Domestic non-state-owned
+Domestic preference shares
+30,000,000
+6.7
+None
+legal person
+Domestic non-state-owned
+None
+Domestic preference shares
+4.0
+None
+Management Co., Ltd.
+legal person
+CCB Trust Co., Ltd.
+State-owned legal person
+Domestic preference shares
+18,000,000
+7.8
+35,000,000
+Domestic preference shares
+Other entities
+pledged/
+during the
+reporting
+at the end
+of the
+Shareholding
+percentage
+subject to
+locked-up/
+restrictions
+marked
+Name of shareholder
+Nature of shareholder
+Class of shares
+Domestic preference shares
+50,000,000
+11.1
+None
+State-owned legal person
+Increase/
+decrease
+15,000,000
+Reset dividend rate of "IT"
+95
+35.00
+31.14
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2022, Huijin held 123,717,852,951 shares in the
+Bank, while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+(2) Due to rounding, percentages presented herein are for reference only.
+94
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+HOLDERS OF H SHARES
+34.71
+0.28
+Name of substantial
+shareholder
+Capacity
+Investment manager
+Number of
+H shares held
+(share)
+12,168,809,000
+Nature of
+Percentage of
+Percentage of
+total ordinary
+interests
+Long position
+H shares (4) (%)
+Ping An Asset Management
+shares (2) (%)
+Percentage of
+total ordinary
+41.16
+As at 31 December 2022, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+Huijin(1)
+MOF
+Number of
+Capacity
+Beneficial owner
+Interest of controlled
+corporations
+Total
+Beneficial owner
+A shares held
+(share)
+123,717,852,951
+Nature of
+interests
+Long position
+Percentage of
+A shares (2) (%)
+45.89
+1,013,921,700 Long position
+0.38
+124,731,774,651
+110,984,806,678
+46.26
+Long position
+shares (4) (%)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+14.02
+Co., Ltd. (1)
+Issuance of offshore preference shares
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2020] No. 138 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2020] No. 1391, the Bank made a non-public issuance of 145 million USD-denominated non-cumulative
+perpetual offshore preference shares (the "Offshore USD Preference Shares") on 23 September 2020 at an issuance price
+of USD20 per share (see the table below for details). The Offshore USD Preference Shares were listed on the SEHK on 24
+September 2020. All proceeds from the issuance, after deduction of commission and issuance expenses, were used to
+replenish additional tier 1 capital and increase capital adequacy ratio.
+Total
+Full amount
+Type of offshore
+preference shares
+USD Preference Shares
+Issuance and Listing of Preference Shares in Latest Three Years
+Stock code Dividend rate
+4620
+3.58%
+of proceeds
+per share
+USD20
+Net amount
+of proceeds
+per share
+RMB135.77
+Number of
+shares issued
+145 million shares
+The number of qualified placees for the Offshore USD Preference Shares shall not be less than six, and they shall be offered
+only to professional investors instead of retail investors, and shall be non-publicly transferred in the OTC market only.
+For details on the issuance of offshore preference shares of the Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Annual Report 2022
+issuance
+amount
+USD2.9 billion
+Preference Shares
+(3) According to the declaration of interests filed by China Taiping Insurance Group Ltd. and its subsidiaries, Taiping Asset
+Management Co., Ltd., in the capacity of an investment manager, held 4,415,314,000 H shares of the Bank, including
+4,360,174,000 H shares of the Bank held by Taiping Life Insurance Co., Ltd. as beneficial owner (disclosed on 25 November
+2022). China Taiping Insurance Group Ltd. and China Taiping Insurance Holdings Company Limited, as holding groups of
+Taiping Life Insurance Co., Ltd., indirectly held 4,405,157,000 H shares of the Bank (disclosed on 22 November 2022).
+(4) Due to rounding, percentages presented herein are for reference only.
+(2) According to the information provided by SSF to the Bank, SSF held 8,053,958,573 H shares of the Bank as at the end of the
+reporting period, accounting for 9.28% of the Bank's H shares and 2.26% of the Bank's total ordinary shares.
+SSF(2)
+Temasek Holdings (Private)
+Beneficial owner
+Interest of controlled
+8,663,703,234 Long position
+7,317,475,731 Long position
+9.98
+2.43
+8.43
+2.05
+Limited
+corporations
+Taiping Asset Management
+Co., Ltd. (3)
+Investment manager
+4,415,314,000
+Long position
+5.09
+1.24
+Notes: (1) As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on
+behalf of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as
+investment manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by
+Ping An Asset Management Co., Ltd. for the period ended 31 December 2022 (the date of relevant event being 12 June
+2019). Both Ping An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping
+An Insurance (Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the
+voting rights in respect of such shares on behalf of customers and independently exercise the rights of investment and business
+management in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company
+of China, Ltd., Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as
+a holding company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities
+and Futures Ordinance of Hong Kong.
+3.41
+BOC International (China) Co., Ltd.
+State-owned legal person
+Hwabao Trust Co., Ltd.
+Domestic non-state-owned Domestic preference shares
+legal person
+15,000,000
+2.1
+None
+Annual Report 2022
+97
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+legal person
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "2" as at 31 December 2022.
+(2) Shanghai Tobacco Group Co., Ltd., China National Tobacco Corporation Shandong Branch and China National Tobacco
+Corporation Heilongjiang Branch are all wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance
+Company Limited - Traditional - Ordinary insurance products - 005L - CT001 Hu" is managed by China Life Insurance Company
+Limited. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China, Ltd. have
+connected relations. Save as disclosed above, the Bank is not aware of any connected relations or concert party action among
+the afore-mentioned preference shareholders and among the afore-mentioned preference shareholders and top 10 ordinary
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "2" held by preference shareholders
+in total number (700 million shares) of domestic preference shares of "I탼¸2″.
+Dividend Distribution of Preference Shares
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "I2" and Offshore USD Preference Shares at the meeting of its Board of Directors on 30
+August 2022, permitting the Bank to distribute the dividends on domestic preference shares "12" on 26 September
+2022 and on the offshore USD preference shares on 23 September 2022; the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "I" at the meeting of its Board of Directors on 28 October 2022, permitting the Bank
+to distribute the dividends on domestic preference shares "11" on 23 November 2022.
+Dividends on the Bank's domestic preference shares "1" and "2" are paid annually in cash, and calculated
+based on the aggregate par value of the issued domestic preference shares. Dividends on the Bank's domestic preference
+shares are non-cumulative. Holders of domestic preference shares are only entitled to dividends at the prescribed dividend
+rate, but are not entitled to any distribution of residual profits of the Bank together with the holders of ordinary shares.
+According to the dividend distribution plan in the domestic preference share issuance proposal, the Bank distributed
+dividends of RMB2,061 million (pre-tax) on the domestic preference share "1" at a dividend rate of 4.58% (pre-tax);
+and distributed dividends of RMB2,940 million (pre-tax) on the domestic preference share "2" at a dividend rate of
+4.2% (pre-tax).
+Dividends on the Bank's offshore USD preference shares are paid annually in cash, and calculated based on the liquidation
+preference of the offshore preference shares. Dividends on the Bank's offshore USD preference shares are non-cumulative.
+Holders of offshore USD preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore USD preference share issuance proposal, total dividends of about USD115.3 million
+(pre-tax) on the offshore USD preference shares were distributed in USD at a dividend rate of 3.58% (after-tax). According
+to relevant laws, when the Bank distributes dividends for offshore USD preference shares, the enterprise income tax shall
+be withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the offshore USD
+preference shares, the Bank paid the relevant taxes, included in the dividends for offshore USD preference shares.
+The table below shows the distribution of dividends on preference shares by the Bank in latest three years:
+2022
+shareholders.
+None
+2.1
+15,000,000
+State-owned legal person
+Other entities
+Domestic non-state-owned
+Domestic preference shares
+37,250,000
+5.3
+None
+Domestic preference shares
+30,000,000
+4.3
+None
+Domestic preference shares
+-4,400,000
+15,600,000
+2.2
+None
+legal person
+Domestic non-state-owned
+Domestic preference shares
+ICBC
+None
+98
+(2) Offshore EUR preference shares refer to EURO.6 billion preference shares issued offshore by the Bank at a dividend rate of 6.00%
+in 2014. The Bank redeemed the above offshore EUR preference shares on 10 December 2021.
+4.20%
+Domestic preference share "2"
+RMB2,061 million
+4.58%
+Domestic preference share "1"
+distributed (1)
+rate
+Offshore EUR preference shares (2)
+Dividend
+Dividend
+distributed (1)
+rate
+Dividend
+Dividend
+distributed (1)
+rate
+Type of preference shares
+Dividend
+Dividend
+N/A
+RMB2,940 million
+N/A
+4.58%
+4.20%
+Notes: (1) Dividend distributed is tax included.
+EUR40 million
+N/A
+N/A
+About USD115.3 million
+3.58%
+About USD115.3 million
+3.58%
+Offshore USD preference share(3)
+6.00%
+EUR40 million
+6.00%
+RMB2,940 million
+4.20%
+RMB2,940 million
+RMB2,025 million
+4.50%
+RMB2,061 million
+(3) Offshore USD preference share refers to USD2.9 billion preference shares issued offshore by the Bank at a dividend rate of 3.58%
+in 2020.
+7.1
+50,000,000
+None
+Domestic non-state-owned
+Domestic preference shares
+10,000,000
+2.2
+None
+Insurance Company of China, Ltd.
+legal person
+None
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "1" as at 31 December 2022.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance Company Limited - Traditional -
+Ordinary insurance products - 005L - CT001 Hu" is managed by China Life Insurance Company Limited. Ping An Life Insurance
+Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China, Ltd. have connected relations. Save as
+disclosed above, the Bank is not aware of any connected relations or concert party action among the afore-mentioned preference
+shareholders and among the afore-mentioned preference shareholders and top 10 ordinary shareholders.
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I 2″
+Unit: Share
+Increase/
+decrease
+during the
+reporting
+Shares held
+at the end
+Shareholding
+percentage
+Number
+of shares
+subject to
+Number of
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "1" held by preference
+shareholders in total number (450 million shares) of domestic preference shares of "I1″.
+2.2
+10,000,000
+Domestic preference shares
+China National Tobacco Corporation
+Shandong Branch
+China National Tobacco Corporation
+Heilongjiang Branch
+Ping An Property & Casualty
+State-owned legal person
+Other entities
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+15,000,000
+1,710,000
+13,110,000
+10,000,000
+3322
+None
+None
+2.9
+None
+None
+Other entities
+pledged/
+locked-up/
+restrictions
+marked
+BOCOM Schroders Asset
+Management Co., Ltd.
+Ping An Property & Casualty
+Insurance Company of China, Ltd.
+State-owned legal person
+Domestic preference shares
+Domestic preference shares
+112,750,000
+16.1
+None
+100,000,000
+14.3
+None
+State-owned legal person
+State-owned legal person
+Other entities
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+70,000,000
+10.0
+None
+-6,000,000
+64,000,000
+9.1
+China National Tobacco Corporation
+Jiangsu International Trust Co., Ltd.
+Shanghai Tobacco Group Co., Ltd.
+Bank of Beijing Co., Ltd.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions Pursuant to
+Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong Kong
+CCB Trust Co., Ltd.
+Group Co., Ltd.
+Name of shareholder
+Nature of shareholder
+China Life Insurance Company
+State-owned legal person
+Class of shares
+Domestic preference shares
+period
+of the period
+(%)
+on sales
+shares
+120,000,000
+17.1
+None
+Limited
+Hwabao Trust Co., Ltd.
+State-owned legal person
+China Mobile Communications
+BOC International (China) Co., Ltd.
+None.
+Particulars of the De Facto Controller
+SSF. SSF owned 5.72% of the shares of the Bank as at 31 December 2022. Founded in August 2000, SSF is a public service
+institution administered by MOF, having its address at South Tower, Building 11, Fenghuiyuan Fenghui Times Building,
+Xicheng District, Beijing, China, and its legal representative being Liu Wei. With the approval of the State Council and
+pursuant to regulations of MOF and the Ministry of Human Resources and Social Security, SSF has been entrusted to
+manage the following funds: the National Social Security Fund, the subsidy from central government to individual accounts,
+part of the surplus of the enterprise employee's basic pension insurance, basic pension insurance fund and the partial
+state-owned capital transferred.
+Unit: Share
+Number of
+Increase/
+decrease of
+shares during
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+91
+Annual Report 2022
+As at the end of the reporting period, the Bank had a total number of 734,420 ordinary shareholders and no holders of
+preference shares with voting rights restored or holders of shares with special voting rights, including 110,635 holders of H
+shares and 623,785 holders of A shares. As at the end of the month immediately before the annual results announcement
+date (28 February 2023), the Bank had a total number of 752,712 ordinary shareholders and no holders of preference
+shares with voting rights restored or holders of shares with special voting rights.
+Number of Shareholders and Particulars of Shareholding
+2020
+For details on the issuance progress of tier 2 capital bonds and undated additional tier 1 capital bonds of the Bank during
+the reporting period, please refer to the section headed "Discussion and Analysis - Capital Management".
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in
+Share Capital and Shareholding of Substantial Shareholders – Preference Shares".
+During the reporting period, the Bank did not issue any shares, did not have any employee shares, employee stock
+ownership plan, did not issue any convertible bonds, or corporate bonds to be disclosed in accordance with Chapter II,
+Section 9 of the "No. 2 Standards on the Content and Format of Information Disclosure of Companies with Public Offerings
+- Content and Format of the Annual Report (Revision 2021)" issued by CSRC.
+Number of
+shares held
+Details of Securities Issuance and Listing
+Notes: (1) The above data are based on the Equity Structure Chart issued by China Securities Depository and Clearing Corporation Limited.
+(2) "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the
+Content and Format of Information Disclosure of Companies with Public Offerings - Content and Format of the Report of
+Change in Corporate Shareholding" (Revision 2022) of CSRC.
+100.00
+356,406,257,089
+24.35
+86,794,044,550
+75.65
+269,612,212,539
+100.00
+356,406,257,089
+100.00
+356,406,257,089
+III. Total number of shares
+(3) Due to rounding, percentages presented herein are for reference only.
+pledged/
+Shareholding
+locked-up/
+H Share
+Foreign legal person
+None
+31.14
+110,984,806,678
+A Share
+State-owned
+None
+34.71
+123,717,852,951
+A Share
+State-owned
+shares
+(%)
+reporting period
+period
+shares
+Nature of shareholder
+HKSCC Nominees Limited (5)
+MOF
+Huijin
+Name of shareholder
+marked
+percentage
+at the end of
+the reporting
+Class of
+overseas
+24.35
+86,794,044,550
+2. Foreign shares listed
+In the future, the Bank will adhere to systematic thinking,
+strengthen FinTech empowerment, coordinate the
+development of "GBC+" projects, provide a strong growth
+momentum for the customer ecosystem and accelerate
+the cultivation of a balanced, coordinated and sustainable
+ecosystem of high-quality development.
+Payment, which won the first prize of the PBC's FinTech
+Development Awards. In serving the public wellbeing,
+the service processes were continuously streamlined, and
+Mobile Banking 8.0 and ICBC e Life 5.0 were launched
+to provide over 500 million customers with personalized
+service experience. The Bank was the first to complete
+aging and barrier-free transformation of internet services.
+In strengthening government-bank cooperation, the Bank
+unleashed its technological and data strengths to facilitate
+the digital government construction. It was the only bank
+to develop the nationwide pooling system for pension
+insurance funds, and cooperated with local governments
+in developing the dedicated government App. The annual
+transaction value of the Anxin fund supervision platform
+exceeded RMB330.0 billion. In terms of ECOS technology
+ecosystem, driven by both technology and data, the cloud
+computing platform continued to lead in the banking
+sector by size, with the data scale growing rapidly in excess
+of 270PB, up about 30% year on year, and the number of
+intelligent models in use exceeding 2,200. The distributed
+and open architecture transition was deepened, with more
+than 5,000 open API services exported. The Bank helped
+deepen innovation in the R&D mechanism and adopted
+the open competition mechanism to better unleash the
+vitality of sci-tech innovation. The requirement R&D cycle
+was shortened by 11% year-on-year, suggesting significant
+improvements in quality and effectiveness of R&D.
+-
+In addition, the Bank stepped up efforts to build the
+D-ICBC digital ecosystem and the ECOS technology
+ecosystem, providing a powerhouse for the GBC+
+customer ecosystem. In terms of the D-ICBC digital
+ecosystem, empowering industry development, the Bank
+participated deeply in digital transformation of the industry
+and innovated the ICBC Global Pay Overseas Direct
+exceeded RMB3.2 million, far ahead of peers by both total
+size and increment. Fund inflows from merchants totaled
+RMB3.79 trillion, an increase of 5.8%. Incremental savings
+deposits and financial assets reached RMB127.7 billion
+and RMB149.3 billion, up 59% and 43%, respectively,
+providing a new model and a new driving force for the
+Bank's profit growth.
+Fifth, key customer groups grew at a faster pace.
+Though urban-rural collaboration, the Bank as a top-notch
+player has had its rural revitalization work take root in
+rural markets. During the reporting period, the personal,
+corporate and institutional customers in county areas
+increased by 4%, 14% and 11%, respectively. The balance
+of agriculture-related loans exceeded RMB3 trillion to hit a
+record high, leading the banking sector in both increment
+and growth rate. Payroll service deepened interaction
+between business segments and integration of resources
+to achieve growth on multiple fronts in parallel. During the
+reporting period, the Bank provided payroll service for 814
+thousand corporate customers, an increase of 87 thousand
+corporations, serving a total of 110 million personal
+customers, an increase of 1.25 million individuals, with
+the balance of relevant AUM growing by RMB844.5 billion
+to RMB6.9 trillion. The number of merchant customers
+exceeded 10 million, the first to break the mark
+worldwide, and the number of new merchant customers
+Fourth, the coordination of channels gained
+momentum. Basic strengths in offline channels were
+consolidated to boost the competitiveness of outlets.
+New areas of online services were opened up and mobile
+banking and other online channels were improved
+to provide customers with faster, stronger and more
+interesting experience of digital finance. The Bank pursued
+in-depth integration of online and offline channels so that
+all channels could complement each other better to enable
+"one-point access, all-channel response", providing strong
+support for the implementation of key strategies and
+development of various work of the Bank.
+Third, the inner circulation of funds was unimpeded.
+Backed by the GBC panoramic fund flow data system,
+the Bank continued to use high-quality financial services
+to promote the improvement of quality and increase of
+fund retention from existing customers and attracted new
+customers to open accounts with the Bank. During the
+reporting period, the fund returning ratio of the Bank
+reached 43.58%, an increase of 3 percentage points.
+fueled an increase of RMB178.0 billion in savings deposits
+compared with the end of the previous year. The Bank
+registered a substantially larger number of corporate
+customers with average daily financial assets of more than
+RMB10,000 and personal customers with average daily
+financial assets of more than RMB50,000, showing an
+improving quality of customers. The number of corporate
+borrowers increased by nearly 30%, and corporate loans
+rose by RMB1.63 trillion from the end of the previous year,
+hitting a record high.
+Discussion and Analysis
+BOCOM Schroders Asset
+Ping An Life Insurance Company of
+China Life Insurance Company
+Limited
+China National Tobacco Corporation
+China, Ltd.
+Group Co., Ltd.
+None
+44.4
+200,000,000
+Domestic preference shares
+State-owned legal person
+China Mobile Communications
+shares
+on sales
+(%)
+period
+period
+Annual Report 2022
+-8,788,188
+89
+Hot Topic 4: New Breakthroughs in
+High-quality Development of Deposits
+75.65
+269,612,212,539
+1. RMB-denominated ordinary
+shares
+restrictions on sales
+100.00
+356,406,257,089
+II. Shares not subject to
+on sales
+Percentage
+(%)
+Number of shares
+At 31 December 2022
+Increase/decrease
+during the
+reporting period
+Percentage
+(%)
+Unit: Share
+Number of shares
+At 31 December 2021
+I. Shares subject to restrictions
+DETAILS OF CHANGES IN SHARE CAPITAL
+Changes in Ordinary Shares
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+ICBC
+90
+Fifth, deposits showed a prominent feature of
+coordinated volume and price development. The Bank
+took the initiative to adapt to the market-oriented reform
+of deposit interest rates and actively implemented the
+market-oriented adjustment mechanism for deposit interest
+rates. In September, the Bank lowered the quoted rate of
+RMB deposits, which marks an important step forward in
+promoting the market-oriented reform of deposit interest
+rates. Tools were flexibly used to improve the deposit mix
+to stabilize the proportion of demand deposits. The deposit
+cost was kept at a relatively low level among comparable
+peers by constantly optimizing the terms, interest rates and
+structure of deposits. The Bank has enhanced its ability to
+coordinate volume with price of deposits and create value.
+Sixth, the overall customer base continued to
+consolidate. The Bank fully harnessed its strengths in
+comprehensive financial services including products,
+services, channels and technology and strengthened its
+overall customer base with higher-quality financial products
+and better comprehensive services, retaining funds more
+efficiently. The customer base expanded effectively on
+the G (government), B (business) and C (consumer) ends.
+With stronger ability to reach customers with targeted
+services, the Bank saw a broader range and a higher
+activity level of customers, a higher ratio of fund retention
+from institutional and corporate customers, a higher
+on-boarding ratio of target customers outside the Bank
+and a higher retention rate of payroll service customers.
+The Bank continued to improve the customer ecosystem
+and the structure of new deposits with well-coordinated
+quality and quantity, volume and price. The Bank
+sharpened its competitive edge in market by effective
+growth of daily average deposits and boosted the ability
+to provide more stable and sustainable funding support
+for the real economy while pursuing its own high-quality
+development.
+Fourth, the competitiveness in deposits in key regions
+has steadily improved. The Bank served the coordinated
+regional development strategies of China, focused on
+the changing spatial patterns of the national economy
+such as industrial upgrading, redistribution of factors of
+production and evolution of metropolitan areas. It actively
+seized business opportunities in key regions and tapped
+deep into the deposit markets in key regions, leading the
+market by both balance and increment of deposits in the
+Beijing-Tianjin-Hebei region, the Yangtze River Delta, the
+Guangdong-Hong Kong-Macao Greater Bay Area, Central
+China and Chengdu-Chongqing region.
+Third, breakthroughs were made in the coordinated
+growth across deposit business segments. The Bank
+scientifically grasped the new trends and features of
+fund flows to expand the flow and stock and enlarge
+the deposit and AUM capacity. The balance of domestic
+personal deposits in RMB and foreign currencies exceeded
+RMB14 trillion. Domestic corporate deposits in RMB and
+foreign currencies broke the mark of RMB13 trillion, with
+a focus on payroll service, pensions, new urban residents,
+merchants, county areas and entrepreneurs, and stronger
+synergies among sectors and business lines. Incremental
+personal deposits and corporate deposits reached a record
+high for the same period.
+First, the Bank had a stronger influence in aggregate
+deposit base. With its farsightedness in the pattern of
+fund flows in the society, the Bank was a frontrunner
+in competing for deposits and achieved rapid growth of
+total deposits. The balance of domestic deposits in RMB
+and foreign currencies (including deposits from banks
+and other financial institutions) exceeded RMB30 trillion
+to reach RMB30.9 trillion, an increase of RMB3.5 trillion
+over the end of last year, and RMB2 trillion higher than
+the same period last year, providing more stable and
+sustainable financial support for the real economy. The
+incremental size hit an all-time high for the same period.
+Second, the average daily growth in deposits
+led the banking sector. The Bank attaches great
+importance to the daily accumulation of deposits,
+highlighting the daily average level. The deposit base has
+been gradually stabilized and increased by expanding
+channels, strengthening product portfolio, improving
+system functions and enhancing service experience. The
+equilibrium rate of new deposits reached the highest level
+in recent years, with the deposit curve trending up steadily
+and upward, leaving a "distinctive curve" pointing to an
+average daily increment ahead of peers.
+In 2022, the Bank worked hard to build the customer
+base and progressed steadily towards volume-price
+coordination, making new breakthroughs in the
+high-quality development of deposits. At the end of
+the year, due to customers increased by RMB3.43
+trillion over the end of last year, RMB2.12 trillion more
+than the increase at the same period of last year. The
+deposits showed continued improvements in stability and
+equilibrium, leading the market by both aggregate and
+incremental size.
+Discussion and Analysis
+86,145,336,361
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 36. to the Consolidated
+Financial Statements: Debt Securities Issued; Note 39. to the Consolidated Financial Statements: Other Equity Instruments"
+for details.
+Unknown
+16
+Bank of Hunan Corporation Limited
+Shenwan Hongyuan Group Co., Ltd. (A; H)
+New China Life Insurance Company Limited (A; H)
+China International Capital Corporation Limited (A; H)
+Hengfeng Bank Co., Ltd.
+15
+14
+13
+12
+11
+China Galaxy Financial Holdings Company Limited
+10
+China Reinsurance (Group) Corporation (H)
+China Jianyin Investment Limited
+9
+8
+China Export & Credit Insurance Corporation
+7
+China Everbright Group Ltd.
+6
+China Construction Bank Corporation (A; H)
+5
+Bank of China Limited (A; H)
+4
+3
+Agricultural Bank of China Limited (A; H)
+Industrial and Commercial Bank of China (A; H)
+China Development Bank Corporation
+Company name
+2
+Jiantou CITIC Asset Management Co., Ltd. (A; H)
+1
+17
+18
+Particulars of Other Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 31.14% shares of the Bank as at 31
+December 2022. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+93
+Annual Report 2022
+(2) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+14.54%
+13.30%
+30.76%
+20.00%
+53.95%
+40.11%
+31.34%
+20.05%
+69.07%
+100.00%
+71.56%
+24.17
+63.16%
+57.11%
+64.02%
+40.03%
+34.71%
+34.68%
+Huijin's shareholding
+percentage
+Guotai Junan Investment Management Co., Ltd.
+China Galaxy Asset Management Co., Ltd.
+No.
+73.63%
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Peng Chun. Huijin is
+a wholly-owned subsidiary of China Investment Corporation. In accordance with authorization by the State Council, Huijin
+makes equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution,
+exercise the rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to
+achieve the goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other
+business activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions
+it controls.
+A Share
+State-owned legal person
+Taiping Life Insurance Co., Ltd.
+-005L CT001 Hu
+-Traditional Ordinary insurance products
+China Life Insurance Company Limited
+Central Huijin Asset Management Co., Ltd.
+None
+0.53
+1,900,078,921
+513,627,255
+A Share
+Foreign legal person
+Hong Kong Securities Clearing Company Limited (7)
+None
+0.68
+2,416,131,540
+A Share
+State-owned legal person
+None
+3.46
+12,331,645,186
+A Share
+State-owned
+China Securities Finance Co., Ltd.
+SSF(6)
+As at 31 December 2022, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+1,013,921,700
+0.28
+2021
+Other entities
+Controlling Shareholders
+None
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Particulars of Substantial Shareholders
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+(8) "ICBC - SSE 50 Exchange Traded Securities Investment Funds" are securities investment funds raised as approved by CSRC
+Zheng Jian Ji Jin Zi [2004] No. 196 Document dated 22 November 2004, with China Asset Management Co., Ltd. as the fund
+manager and ICBC as fund custodian.
+(7) The number of shares held by Hong Kong Securities Clearing Company Limited at the end of the period refers to the total A
+shares (Northbound shares of the Shanghai-Hong Kong Stock Connect) held by it as a nominal holder designated by and on
+behalf of Hong Kong and foreign investors as at 31 December 2022.
+(6) According to the Notice on Comprehensively Transferring Part of State-Owned Capital to Fortify Social Security Funds (Cai Zi
+[2019] No. 49), MOF transferred 12,331,645,186 A shares to the state-owned capital transfer account of SSF in a lump sum in
+December 2019. According to the relevant requirements under the Notice of the State Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned Capital to Fortify Social Security Funds (Guo Fa [2017] No. 49), SSF shall perform the
+obligation of more than 3-year lock-up period as of the date of the receipt of transferred shares. At the end of the reporting
+period, according to the information provided by SSF to the Bank, SSF also held 8,053,958,573 H shares of the Bank and
+20,385,603,759 A and H shares in aggregate, accounting for 5.72% of the Bank's total ordinary shares.
+(5) The number of shares held by HKSCC Nominees Limited at the end of the period refers to the total number of H shares held
+by it as a nominee on behalf of all institutional and individual investors registered with accounts opened with HKSCC Nominees
+Limited as at 31 December 2022, which included H shares of the Bank held by China Taiping Insurance Group Ltd. and its
+persons acting in concert, SSF, Ping An Asset Management Co., Ltd. and Temasek Holdings (Private) Limited.
+(4) Except to the extent unknown to HKSCC Nominees Limited, the top 10 shareholders of the Bank did not participate in any
+margin trading, short selling or refinancing business.
+(3) HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Limited. Central Huijin Asset
+Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware of any connected
+relations or concert party action among the afore-mentioned shareholders.
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2022.
+(2) The Bank had no shares subject to restrictions on sales.
+None
+92
+300,225,253
+541,168,980
+A Share
+0.08
+977,079,865
+None
+ICBC - SSE 50 Exchange Traded Securities
+Investment Funds (8)
+0.27
+State-owned legal person
+Other entities
+A Share
+A Share
+370,944,126
+917,700
+538,741,372
+0.15
+None
+Nout Wellink
+Xu Shouben
+Shen Bingxi
+Wu Xiangjiang
+Zhang Wei
+34.45
+Zheng Fuqing
+29.86
+43.76
+Huang Liangbo
+Directors, Supervisors and Senior Management Leaving Office
+No
+99.81
+Song Jianhua
+No
+11.51
+13.75
+Wang Bairong
+5.00
+27.26
+No
+132.34
+No
+45.96
+No
+No
+130.27
+5.00
+105.08
+No
+8.58
+32.47
+No
+11.75
+11.75
+Yes
+No
+57.51
+41.05
+30.46
+20.44
+Xiong Yan
+5.00
+No
+14.00
+14.00
+Yes
+43.25
+Liu Lanbiao
+Zhang Jie
+Huang Li
+Norman Chan Tak Lam
+Fred Zuliu Hu
+No
+48.50
+48.50
+Yes
+47.00
+47.00
+5.00
+No
+25.00
+25.00
+No
+136.55
+31.47
+105.08
+Guan Xueqing
+No
+79.51
+20.44
+99.81
+59.07
+No
+79.51
+59.07
+Zhang Wenwu
+Yes
+12.99
+12.99
+No
+Zhang Weiwu
+43.25
+129.67
+52.00
+Senior Executive Vice President
+Wang Bairong
+Xu Shouben
+June 2016-June 2022
+September 2020-January 2023
+June 2016-April 2022
+December 2018-March 2022
+February 2015-January 2022
+1952
+Male
+External Supervisor
+Shen Bingxi
+1962
+Male
+Employee Supervisor
+Wu Xiangjiang
+1962
+Male
+Shareholder Supervisor
+Zhang Wei
+1943
+Male
+Independent Non-executive Director
+Nout Wellink
+1963
+Male
+Non-executive Director
+Male
+1969
+October 2020-August 2022
+Chief Business Officer
+Mr. Feng has served as Non-executive Director of the Bank since January 2020. He joined MOF in 1986. He previously
+served as Deputy Director of Academic Affairs Division of Chinese Accounting Correspondence School of MOF (deputy
+division chief level), Person in charge of Teaching Material Department of National Accountant Certification Examination
+Leading Group Office, Director of Accounting Personnel Management Division and Director of Institutional System Division
+I of Accounting Department of MOF, Deputy Director (deputy director-general level), Deputy Director (person in charge),
+Director (director-general level), Secretary of the Party Committee and Director of National Accountant Assessment &
+Certification Centre of MOF, and member of the Accounting Conceptual Framework Committee of the International
+Public Sector Accounting Standards Board (IPSASB). He concurrently serves as a Managing Director of the 8th Council of
+the Accounting Society of China, a part-time professor and off-campus practice tutor for postgraduate students of the
+School of Economics and Management of Beijing Jiaotong University, and a visiting tutor for postgraduate students in the
+Accounting School of the Central University of Finance and Economics. Mr. Feng obtained a Bachelor's degree in Economics
+from Dongbei University of Finance & Economics and Doctorate degree from Beijing Jiaotong University. Mr. Feng Weidong
+is a senior accountant, researcher, non-practicing certified public accountant and is a recipient of the Special Government
+Allowance by the State Council of China.
+Feng Weidong, Non-executive Director
+Mr. Lu has served as Non-executive Director of the Bank since August 2019. He joined Huijin in 2019. Mr. Lu previously
+served as Deputy Director of the Administrative Office of the Economic Research Consultation Centre of the State
+Economic and Trade Commission, Director of the Specific Research Department of the Economic Research Centre of the
+State Economic and Trade Commission, Director of the Capital Markets Research Department of the Research Centre of
+the State-owned Assets Supervision and Administration Commission of the State Council, and Director Assistant of the
+Research Centre of the State-owned Assets Supervision and Administration Commission of the State Council with the
+concurrent post as the Director of the Capital Markets Research Department, and Deputy Director of the Research Centre
+of the State-owned Assets Supervision and Administration Commission of the State Council. Mr. Lu obtained a Bachelor's
+degree and a Master's degree from Peking University, and a Doctorate degree in Economics from Southwestern University
+of Finance and Economics. He is a researcher.
+Lu Yongzhen, Non-executive Director
+Directors, Supervisors and Senior Management
+101
+Annual Report 2022
+Mr. Wang has served as Executive Director, Senior Executive Vice President and concurrently Chief Risk Officer since
+September 2021, and as Senior Executive Vice President of the Bank since April 2020. He joined PBC in August 1985, and
+has successively served as Supervision Commissioner (Deputy Director level) of PBC Shijiazhuang Central Sub-branch, Head
+of PBC Shijiazhuang Central Sub-branch and concurrently Director of State Administration of Foreign Exchange ("SAFE")
+Hebei Branch, Head of PBC Hohhot Central Sub-branch and concurrently Director of SAFE Inner Mongolia Branch, Head
+of PBC Guangzhou Branch and concurrently Director of SAFE Guangdong Branch, and Director-General of PBC Financial
+Stability Bureau since January 2002. Mr. Wang graduated from the Hebei Banking School, and he received a Doctorate
+degree in Economics from Xi'an Jiaotong University. He is a research fellow.
+Wang Jingwu, Executive Director, Senior Executive Vice President, Chief Risk Officer
+Mr. Zheng has served as Executive Director and Senior Executive Vice President of the Bank since December 2021 and
+as Senior Executive Vice President of the Bank since September 2021. He joined Bank of China since November 1988.
+He was appointed as Assistant to General Manager and Deputy General Manager of Hubei Branch, General Manager of
+Shanxi Branch, General Manager of Sichuan Branch, Member of Executive Committee of Bank of China, and Executive
+Vice President of Bank of China. Mr. Zheng graduated from Wuhan Institute of Water Transportation Engineering and
+obtained a Master's degree in Business Administration from Huazhong University of Science and Technology. He is a senior
+economist.
+Zheng Guoyu, Executive Director, Senior Executive Vice President
+Mr. Liao has served as Vice Chairman, Executive Director and President of the Bank since March 2021, Executive Director
+of the Bank since July 2020, and Senior Executive Vice President, Senior Executive Vice President and concurrently Chief
+Risk Officer since November 2019. Mr. Liao joined China Construction Bank in 1989, and was appointed as Deputy General
+Manager of Guangxi Branch of China Construction Bank, General Manager of Ningxia Branch, Hubei Branch and Beijing
+Branch of China Construction Bank, Chief Risk Officer, Executive Vice President and concurrently Chief Risk Officer of
+China Construction Bank. Mr. Liao graduated from Guangxi Agricultural University. He obtained a Doctorate degree in
+Management Science from Southwest Jiaotong University. Mr. Liao is a senior economist.
+Liao Lin, Vice Chairman, Executive Director, President
+Zheng Fuqing
+Mr. Chen has served as Chairman and Executive Director of the Bank since May 2019. He joined Bank of China in 1990.
+Mr. Chen Siqing previously worked in the Hunan Branch of Bank of China before he was dispatched to the Hong Kong
+Branch of China and South Sea Bank Ltd. as Assistant General Manager. Mr. Chen held various positions in Bank of
+China, including Assistant General Manager and Vice General Manager of the Fujian Branch, General Manager of the
+Risk Management Department of the Head Office, General Manager of the Guangdong Branch, Executive Vice President,
+President, Vice Chairman and Chairman of Bank of China. Mr. Chen served concurrently as Chairman of the Board of
+Directors of BOC Aviation Limited, Non-executive Director, Vice Chairman and Chairman of the Board of Directors of
+BOC Hong Kong (Holdings) Limited. Mr. Chen graduated from Hubei Institute of Finance and Economics, and obtained a
+Master's degree in Business Administration (MBA) from Murdoch University, Australia. He is a Certified Public Accountant
+and a senior economist.
+Biographies of Directors, Supervisors and Senior Management
+Directors, Supervisors and Senior Management
+ICBC
+100
+(6) The full name of Mr. Nout Wellink is Arnout Henricus Elisabeth Maria Wellink.
+(4) According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in
+the above table shall be the day of his/her first appointment. According to the Articles of Association of the Bank, the term of
+the Bank's directors and supervisors is three years and they can be re-elected and reappointed upon expiration of their term.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period held shares or share options or
+were granted restricted shares of the Bank, and there was no change during the reporting period.
+108
+(3) According to the Articles of Association of the Bank, before the newly elected directors take office, the current directors shall
+continue to act as directors.
+(2) The terms of Mr. Liao Lin, Mr. Zheng Guoyu and Mr. Wang Jingwu as Executive Directors of the Bank are set out in the above
+table. Please refer to the section headed "Biographies of Directors, Supervisors and Senior Management" for the starting time
+of their terms as Senior Management members of the Bank.
+Notes: (1) Please refer to the section headed "Appointment and Removal".
+April 2020-December 2022
+1962
+Male
+Chen Siqing, Chairman, Executive Director
+Cao Liqun, Non-executive Director
+July 2021-September 2022
+Male
+Zhang Wenwu
+Since June 2022
+1966
+Male
+External Supervisor
+Liu Lanbiao
+Since November 2021
+1965
+Male
+External Supervisor
+Zhang Jie
+Since June 2016
+1964
+Male
+Employee Supervisor
+Huang Li
+Since September 2022
+1954
+Male
+Independent Non-executive Director
+Norman Chan Tak Lam
+Since April 2019
+1963
+Male
+Independent Non-executive Director
+Fred Zuliu Hu
+Since March 2017
+Senior Executive Vice President
+Male
+1973
+Since July 2020
+Chairman of the Board of Supervisors
+Huang Liangbo
+Directors, Supervisors and Senior Management Leaving Office
+Since April 2020
+1965
+Male
+Chief Business Officer
+Song Jianhua
+Since April 2020
+1964
+Female
+Chief Business Officer
+Xiong Yan
+1964
+Since July 2016
+Male
+Board Secretary
+Guan Xueqing
+Since March 2023
+1969
+Male
+Senior Executive Vice President
+Duan Hongtao
+Since June 2021
+1975
+Male
+Senior Executive Vice President
+Zhang Weiwu
+1963
+Yes
+Ms. Cao has served as Non-executive Director of the Bank since January 2020. She joined Huijin in 2020. Ms. Cao previously
+served as Deputy Director of Regulations Division, General Affairs Department, Director of Regulations Division, General
+Affairs Department, Director of Non-Financial Institutions Inspection Division, Supervision and Inspection Department,
+Director of General Affairs Division, Supervision and Inspection Department, Deputy Director-General of Supervision and
+Inspection Department, Inspector of General Affairs Department (Policy and Regulation Department), Level-Two Inspector
+of General Affairs Department (Policy and Regulation Department) of State Administration of Foreign Exchange, and acted
+as Deputy Director of Administrative Committee of Beijing's Zhongguancun Science Park. Ms. Cao obtained a Bachelor's
+degree in Law from China University of Political Science and Law, a Master's degree in Finance from Renmin University of
+China, and a Master's degree in Public Administration from Peking University. Ms. Cao is an economist.
+ICBC
+Chen Siging
+Liao Lin
+(5)=(1)+(2)+(3)+(4)
+(4)
+(3)
+(2)
+(1)
+or not
+before tax
+income
+Fees
+insurances
+paid (before tax)
+Name
+related parties
+entities or other
+from shareholder
+Total
+remuneration
+Other monetary
+medical
+Remuneration
+additional
+annuities, and
+Obtain
+remuneration
+Unit: RMB10,000
+housing allowance,
+social insurance,
+the employer to
+65.63
+21.14
+86.77
+No
+52.00
+Shen Si
+Yang Siu Shun
+Anthony Francis Neoh
+Yes
+Dong Yang
+Yes
+Yes
+Chen Yifang
+Cao Liqun
+Yes
+Feng Weidong
+Yes
+Contribution by
+Lu Yongzhen
+79.51
+20.44
+59.07
+Wang Jingwu
+No
+79.51
+20.44
+59.07
+Zheng Guoyu
+No
+86.77
+21.14
+65.63
+No
+102
+Remuneration from the Bank
+In August 2022, Mr. Xu Shouben ceased to act as Senior Executive Vice President of the Bank due to change of job
+assignments. In December 2022, Mr. Wang Bairong ceased to act as Chief Business Officer of the Bank due to his age.
+Mr. Liu has served as External Supervisor of the Bank since June 2022. He is currently a Vice Dean of the School of Finance
+of Nankai University, Member of the Branch Party Committee, professor, doctoral supervisor of the School of Finance of
+Nankai University, a co-advisor at postdoctoral research station of Nankai University, Director of the Northeast Asia Financial
+Cooperation Research Center of Nankai University and Government Debt Management Research Center of the School of
+Finance of Nankai University. Mr. Liu has long been engaged in research in areas such as commercial bank management,
+monetary economics, systemic financial risk management, local government debt management, financial technology and
+international financial cooperation. Mr. Liu was a Vice Dean of the Institute of State Economy of Nankai University and
+External Supervisor of Liaoshen Bank Co., Ltd. At present, Mr. Liu is concurrently an Expert at the MOF Financial Risk
+Research Center, Government Debt Expert Consultant at the MOF Debt Research and Assessment Center, Member of the
+China Financial Standardization Technical Committee, Deputy Director of the Asia-Pacific Profession Committee at the
+Chinese Social and Economic Systems Analysis Research Association, Independent Director of NYOCOR Co., Ltd, Chief
+Expert for the key special program "Research on the Prevention and Management of China's Debt Crisis and Effective
+Mitigation Measures" under the National Social Science Fund of China. Mr. Liu graduated from Nankai University with a
+Doctorate degree in Economics.
+Liu Lanbiao, External Supervisor
+Mr. Zhang has served as External Supervisor of the Bank since November 2021. He is currently a professor and doctoral
+supervisor of the Renmin University of China, director of the International Monetary Institute, a distinguished professor
+of the Ministry of Education's "Changjiang Scholars Program", a famous teacher of the national "Ten Thousand Talents
+Program", and a national candidate of the "New Century Talents Project". Mr. Zhang is a recipient of the special
+government allowance provided by the State Council to experts, and is engaged in research on the topics of institutional
+finance, China's financial system and financial development. He was the Dean of the School of Finance of Shaanxi Institute
+of Finance and Economics, the Associate Dean of the School of Economics and Finance of Xi'an Jiaotong University, the
+Associate Dean of the School of Finance of Renmin University of China, and the first Secretary General of the College
+Finance Teaching Steering Committee of the Ministry of Education. At present, he is concurrently an executive director of
+the China Society for Finance and Banking. Mr. Zhang graduated from Shaanxi University of Finance and Economics with a
+Doctorate degree in Economics.
+Zhang Jie, External Supervisor
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently
+the Head of Beijing Branch of the Bank. He served as Deputy General Manager and General Manager of the Banking
+Department as well as Deputy Head and Head of Guizhou Branch of ICBC. Mr. Huang graduated from The University of
+Hong Kong with an MBA degree. He is a senior economist.
+Huang Li, Employee Supervisor
+Mr. Chan has served as Independent Non-executive Director of the Bank since September 2022. He previously served as
+Chief Executive of the Hong Kong Monetary Authority, Deputy Director of the Office of the Exchange Fund of Hong Kong,
+Director of the Chief Executive's Office of the Hong Kong Special Administrative Region Government, Vice Chairman,
+Asia of Standard Chartered Bank and other positions. He currently serves as Chairman of the Board of Directors of RD
+Wallet Technologies Limited, Chairman of the Board of Directors of RD ezLink Limited, Chairman and Executive Director
+of HK Acquisition Corporation, Senior Adviser of the Hong Kong Academy of Finance and Chairman of the Board of
+Trustees of Chung Chi College of The Chinese University of Hong Kong. He obtained a Bachelor's degree in Social
+Sciences from The Chinese University of Hong Kong, an Honorary Fellowship from The Chinese University of Hong Kong,
+an Honorary Doctorate of Business Administration from City University of Hong Kong and an Honorary Doctorate of
+Business Administration from Lingnan University. Mr. Chan was awarded the Silver Bauhinia Star by the Hong Kong Special
+Administrative Region and the Gold Bauhinia Star by the Hong Kong Special Administrative Region. He is a Fellow of
+The Hong Kong Institute of Bankers. He was awarded the IFTA FinTech Achievement Award by the Institute of Financial
+Technologists of Asia (IFTA), the Leadership Lifetime Achievement Award by The Asian Banker and was appointed as
+Honorary Advisory President by The Hong Kong Institute of Bankers.
+Norman Chan Tak Lam, Independent Non-executive Director
+Directors, Supervisors and Senior Management
+ICBC
+104
+Mr. Hu has served as Independent Non-executive Director of the Bank since April 2019. He previously served as a
+senior economist at the International Monetary Fund, Head of Research at the World Economic Forum, the chairman
+for Greater China and a partner at Goldman Sachs Group, Inc., an independent non-executive director of Great Wall
+Pan Asia Holdings Limited (formerly known as SCMP Group Limited), an independent non-executive director of Hang
+Seng Bank Limited, the non-executive director of China Asset Management Co., Ltd., an independent director of Dalian
+Wanda Commercial Management Group Co., Ltd., an independent director of Shanghai Pudong Development Bank, the
+independent non-executive director of Hong Kong Exchanges and Clearing Limited and the independent non-executive
+director of Ant Group Co., Ltd., etc. Mr. Hu currently serves in various positions such as the chairman of Primavera Capital
+Group, the non-executive chairman of Yum China Holdings, Inc, the director of UBS Group AG, the co-chair of The Nature
+Conservancy's Asia Pacific Council and the director of the China Medical Board. Mr. Hu is also a member of the Global
+Board of Advisors for the Council on Foreign Relations, the 21st Century Council of the Berggruen Institute, the Harvard
+Global Advisory Council, the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government, the Stanford
+Center for International Development, and the Jerome A. Chazen Institute of International Business at Columbia University
+etc. He concurrently serves as the co-director of the National Center for Economic Research and a professor at Tsinghua
+University, and he is also an adjunct professor at the Chinese University of Hong Kong and Peking University. Mr. Hu
+obtained a Master's Degree in Engineering Science from Tsinghua University, and a master's degree and a PhD in Economics
+from Harvard University.
+Fred Zuliu Hu, Independent Non-executive Director
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of
+Shanghai Pudong Development Bank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA
+degree. He is a senior economist.
+Shen Si, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region, Director and Chairman of
+Audit Committee of Hang Seng Management College, Vice Chairman of the Council of the Open University of Hong Kong
+and a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority. Mr. Yang currently serves
+as a member of the 14th National Committee of the Chinese People's Political Consultative Conference, a member of the
+board of directors of the Hong Kong Jockey Club and an Independent Non-executive Director of Tencent Holdings Limited,
+Man Wah Holdings Limited and Xinyi Glass Holdings Limited. Mr. Yang graduated from the London School of Economics
+and Political Science. He was awarded the degree of Honorary Doctor of Social Sciences by The Open University of Hong
+Kong. He is a Justice of the Peace in Hong Kong. Mr. Yang holds the qualification of Chartered Accountants, and is a
+senior member of the Institute of Chartered Accountants in England and Wales, the Hong Kong Institute of Certified Public
+Accountants and the Chartered Institute of Management Accountants.
+Yang Siu Shun, Independent Non-executive Director
+Directors, Supervisors and Senior Management
+103
+Annual Report 2022
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee
+of the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of
+People's Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the
+Technical Committee of the International Organization of Securities Commissions, Chairman of Hong Kong Independent
+Police Complaints Council, a Non-executive Director of Global Digital Creations Holdings Limited. He was an Independent
+Non-executive Director of Link Management Limited, which is the Manager of Link Real Estate Investment Trust. He was
+also an Independent Non-executive Director of China Shenhua Energy Company Limited, Bank of China Limited, China
+Life Insurance Company Limited and New China Life Insurance Company Ltd. Mr. Neoh currently serves as an Independent
+Non-executive Director of CITIC Limited, Treasurer and Member of Council of The Chinese University of Hong Kong and
+Chairman of the Asian Academy of International Law. He graduated from the University of London with a Bachelor's degree
+in Law. He is Honorary Doctorate of Law of Chinese University of Hong Kong and Open University of Hong Kong and
+Honorary Doctorate of Social Sciences of Lingnan University. He was elected Honorary Fellow of the Hong Kong Securities
+Institute, Fellow of the Hong Kong Academy of Finance and Academician of the International Euro-Asian Academy of
+Sciences. Mr. Neoh was appointed as Senior Counsel in Hong Kong. He is a barrister of England and Wales. He was
+admitted to the State Bar of California.
+Anthony Francis Neoh, Independent Non-executive Director
+Mr. Dong has served as Non-executive Director of the Bank since January 2022. He joined MOF in August 1989. He
+previously served as assistant researcher, researcher and secretary (director level) of the Department of National Defense of
+MOF, a member of the CPC Committee, Deputy Inspector, and Discipline Inspection Team Leader of the Commissioner's
+Office of MOF in Heilongjiang, a member of the CPC Committee, Deputy Inspector and Discipline Inspection Leader of the
+Commissioner's Office of MOF in Beijing, a member of the CPC Committee, Deputy Director, and Discipline Inspection Team
+Leader of the Beijing Regulatory Bureau of MOF. Mr. Dong graduated from the Beijing Normal University and obtained a
+Master's degree in Management from Harbin Engineering University.
+Dong Yang, Non-executive Director
+Ms. Chen has served as Non-executive Director of the Bank since August 2021. She joined MOF in August 1985. She
+previously served as Deputy Division Chief of Payment Management Division and Deputy Director of Charge Bill Regulatory
+Center of General Affairs and Reform Department of MOF, Deputy Division Chief of the Charging Fund Policy Management
+Division of the Comprehensive Department of MOF, Division Chief of Charging Fund Division of Policy Planning Department
+of MOF, Division Chief of Housing and Land Division of the Comprehensive Department of MOF, Deputy Director-General of
+the Comprehensive Department of MOF, Member of the Party Group, Inspector and Deputy Secretary of the Party Group of
+Shenzhen Finance Supervision Commissioner Office of MOF, Deputy Secretary of the Party Group, Inspector and Level-one
+Inspector of Shenzhen Regulatory Bureau of MOF, and Level-one Inspector of Fiscal Notes Supervision Center of MOF. Ms.
+Chen obtained a Bachelor's degree in Economics from Jiangxi University of Finance and Economics.
+Chen Yifang, Non-executive Director
+Directors, Supervisors and Senior Management
+Annual Report 2022
+105
+Directors, Supervisors and Senior Management
+Zhang Wenwu, Senior Executive Vice President
+On 17 January 2023, the Board of Directors of the Bank appointed Mr. Duan Hongtao as Senior Executive Vice President of
+the Bank, and his qualification was approved by CBIRC in March 2023.
+Senior Management Members
+Directors, Supervisors and Senior Management
+107
+Annual Report 2022
+In April 2022, Mr. Zhang Wei ceased to act as Shareholder Supervisor of the Bank due to his age. In June 2022, Mr. Shen
+Bingxi ceased to act as External Supervisor of the Bank due to expiration of his term of office. In September 2022, Mr.
+Huang Liangbo ceased to act as Shareholder Supervisor and Chairman of the Board of Supervisors of the Bank due to
+change of job assignments. In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to
+his age.
+At the Annual General Meeting for the Year 2021 held on 23 June 2022, Mr. Liu Lanbiao was elected as External Supervisor
+of the Bank, and his term of office as External Supervisor of the Bank started from the date of review and approval by the
+Annual General Meeting.
+Supervisors
+In January 2022, Mr. Zheng Fuqing ceased to act as Non-executive Director of the Bank due to expiration of his term of
+office. In March 2022, Mr. Nout Wellink ceased to act as Independent Non-executive Director of the Bank due to expiration
+of his term of office.
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Dong Yang was elected as
+Non-executive Director of the Bank, and his qualification was approved by CBIRC in January 2022. At the Annual General
+Meeting for the Year 2021 held on 23 June 2022, Mr. Chen Siqing was re-elected as Executive Director of the Bank, and
+his new term of office started from the date of review and approval by the Annual General Meeting; Mr. Norman Chan
+Tak Lam was elected as Independent Non-executive Director of the Bank, and his qualification was approved by CBIRC in
+September 2022; Mr. Fred Zuliu Hu was re-elected as Independent Non-executive Director of the Bank, and his new term
+of office started from the date of review and approval by the Annual General Meeting. At the First Extraordinary General
+Meeting of 2022 held on 25 November 2022, Mr. Lu Yongzhen was re-elected as Non-executive Director of the Bank, and
+his new term of office started from the date of review and approval by the Shareholders' General Meeting. On 23 February
+2023, the Board of Directors of the Bank nominated Mr. Feng Weidong and Ms. Cao Liqun as the candidates to be
+re-elected as Non-executive Directors of the Bank, and agreed that they would consecutively hold relevant posts at special
+committees of the Board of Directors of the Bank after their re-election as Non-executive Directors is approved by the
+Shareholders' General Meeting of the Bank. The appointment of Mr. Feng Weidong and Ms. Cao Liqun as Non-executive
+Directors of the Bank shall be submitted to the Shareholders' General Meeting of the Bank for deliberation and voting, and
+their new terms of office shall start from the date of review and approval by the Shareholders' General Meeting.
+Directors
+Appointment and Removal
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Annual Remuneration
+Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang were recommended by Huijin
+to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders - Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+Directors, Supervisors and Senior Management
+Song Jianhua, Chief Business Officer
+ICBC
+106
+Ms. Xiong has served as Chief Business Officer of the Bank since April 2020. She joined ICBC in 1984 and served as Deputy
+Director-General of Kunming Sub-bureau of the Internal Audit Bureau, Deputy General Manager of Yunnan Branch,
+Deputy Director-General of the Sub-bureau directly managed by the Internal Audit Bureau, Deputy General Manager of
+the Corporate Banking Department | (Corporate Banking Department) and General Manager of the Institutional Banking
+Department of the Head Office. Ms. Xiong graduated from Hunan University and obtained a degree of International Master
+of Business Administration (IMBA) from Fudan University and The University of Hong Kong. She is a senior economist.
+Xiong Yan, Chief Business Officer
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as General
+Manager of Suining Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of
+Frankfurt Branch, Deputy General Manager of Sichuan Branch, Deputy General Manager of Sichuan Branch and General
+Manager of Banking Department of Sichuan Branch, and General Manager of Hubei Branch and Sichuan Branch. Previously
+Mr. Guan was also General Manager of Corporate Strategy and Investor Relations Department of the Bank. He graduated
+from the Southwestern University of Finance and Economics and obtained a Doctor's degree in Economics. He is a senior
+economist.
+Guan Xueqing, Board Secretary
+Mr. Duan has served as Senior Executive Vice President of the Bank since March 2023. Before joining ICBC, he successively
+served as the General Manager of Yangtze River Sub-branch of China Construction Bank Hubei Branch, the General
+Manager of the Compliance Department and the General Manager of the Human Resources Department of Hubei Branch,
+the Assistant to General Manager and Deputy General Manager of Hubei Branch, General Manager of Qingdao Branch,
+General Manager of Shandong Branch, and Director of the Executive Office of the China Construction Bank Head Office.
+Mr. Duan graduated from Wuhan University of Technology and obtained a Doctor's degree in Management. He is a senior
+economist.
+Duan Hongtao, Senior Executive Vice President
+Mr. Zhang has served as Senior Executive Vice President of the Bank since June 2021. He joined ICBC in July 1999, and was
+appointed as General Manager of ICBC (Europe) Amsterdam Branch in January 2011, General Manager of Singapore Branch
+in February 2013 and General Manager of the International Banking Department of the Head Office of ICBC in January
+2017. Mr. Zhang graduated from the Northwest University in China and obtained Master's degree in Political Economy and
+an MBA degree from Hitotsubashi University in Japan. He is a senior economist.
+Zhang Weiwu, Senior Executive Vice President
+Mr. Zhang has served as Senior Executive Vice President of the Bank since July 2020. He joined ICBC in 1995, and was
+appointed as Deputy General Manager of the Finance & Accounting Department of the Head Office, Deputy Head of
+Liaoning Branch, Executive Director and Chief Financial Officer of ICBC-AXA Assurance Co., Ltd., Director of the Board of
+Supervisors' Office of the Head Office, and General Manager of the Finance & Accounting Department of the Head Office.
+Mr. Zhang graduated from the University of International Business and Economics, and he obtained a Doctor's degree in
+Management from Renmin University of China. He is a senior accountant.
+Mr. Song has served as Chief Business Officer of the Bank since April 2020. He joined ICBC in 1987. He was appointed as
+Deputy General Manager of Jiangsu Branch and General Manager of the Personal Banking Department of the Head Office.
+Mr. Song graduated from Peking University and obtained a Doctor's degree in management science and engineering from
+Nanjing University. He is a senior economist.
+ICBC
+1953
+Shen Si
+Lu Yongzhen
+President, Chief Risk Officer
+Since September 2021
+1966
+Male
+Executive Director, Senior Executive Vice
+Wang Jingwu
+Since December 2021
+1967
+Male
+Since July 2020
+1966
+Male
+Non-executive Director
+Vice Chairman, Executive Director, President
+Executive Director, Senior Executive Vice
+President
+Since May 2019
+1960
+Male
+Chairman, Executive Director
+Chen Siqing
+Liao Lin
+Tenure
+Birth year
+Gender
+Position
+Name
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors and Senior Management
+99
+Zheng Guoyu
+Male
+1967
+Since August 2019
+Independent Non-executive Director
+Male
+Independent Non-executive Director
+Yang Siu Shun
+Since April 2015
+1946
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+Since January 2022
+1966
+Male
+Non-executive Director
+Dong Yang
+Since August 2021
+1964
+Female
+Non-executive Director
+Chen Yifang
+Since January 2020
+1971
+Female
+Non-executive Director
+Cao Liqun
+Since January 2020
+1964
+Male
+Non-executive Director
+Feng Weidong
+Annual Report 2022
+1955
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments promulgated
+by MOF as well as the International Financial Reporting Standard 9 - Financial Instruments and the International Accounting
+Standard 32 Financial Instruments: Presentation promulgated by International Accounting Standards Board and other
+accounting standards and the key terms of issuance of the Bank's preference shares, the issued and existing preference
+shares do not contain contractual obligations to deliver cash or other financial assets or contractual obligations to deliver
+variable equity instruments for settlement, and shall be accounted for as other equity instruments.
+Accounting Policy Adopted for Preference Shares and Rationale
+Male
+-
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+Since April 2016
+During the reporting period, the Bank did not redeem or convert any preference share.
+Restoration of Voting Rights of Preference Shares
+Redemption or Conversion of Preference Shares
+During the reporting period, the Bank did not restore any voting right of preference share.
+9/10
+4/4
+5/5
+-
+70
+8/8
+10/10
+2/2
+Shen Si
+4/4
+4/4
+5/5
+4/4
+8/8
+10/10
+2/2
+Yang Siu Shun
+4/4
+5/5
+4/5
+7/17
+7/8
+8/9
+2/2
+717
+2/2
+9/10
+(2) Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+Notes: (1) "Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+0/1
+1/1
+0/0
+2/4
+0/0
+212
+1/2
+2/3
+Nout Wellink
+0/0
+0/0
+Zheng Fuqing
+Directors Leaving Office
+1/1
+1/1
+2/2
+3/3
+3/3
+1/1
+Norman Chan Tak Lam
+3/4
+5/5
+8/9
+Fred Zuliu Hu
+6/8
+As the decision-making organ of the Bank, the Board of
+Directors of the Bank is accountable to, and shall report
+its work to, the Shareholders' General Meeting. The Board
+of Directors is responsible for, among others, convening
+the Shareholders' General Meeting; implementing
+the resolutions of the Shareholders' General Meeting;
+deciding on the business plans, investment proposals
+and development strategies of the Bank; formulating
+annual financial budget and final accounts of the
+Bank; formulating plans for profit distribution and loss
+recovery of the Bank; formulating plans for the increase
+or decrease of the Bank's registered capital, capital
+replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such
+as risk management system and internal control system,
+and supervising the implementation of such systems;
+appointing or removing President and the Board Secretary,
+and appointing or removing Senior Executive Vice
+Presidents and other senior management members (except
+the Board Secretary) who shall be appointed or removed
+by the Board of Directors under relevant laws according
+to the nomination of the President and deciding on their
+compensation, bonus and penalty matters; deciding on or
+authorizing the President to decide on the establishment
+of relevant offices of the Bank; regularly evaluating and
+improving corporate governance of the Bank; managing
+information disclosure of the Bank; and supervising and
+ensuring the President and other Senior Management
+members to perform their management duties effectively.
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors and Senior Management - Appointment
+and Removal".
+Strategy Committee
+During the reporting period, the performance of duties by the special committees of the Board of Directors is set out below:
+Corporate Governance Report
+115
+Annual Report 2022
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Norman Chan Tak Lam
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Fred Zuliu Hu
+Committee Member
+Committee Member
+Chairman
+Committee Member
+Chairman
+Chairman
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Chairman
+Shen Si
+Committee Member
+Corporate Social
+Responsibility and
+Consumer Protection
+Committee
+Audit Committee
+Primary Responsibilities of the Strategy Committee The Strategy Committee is
+mainly responsible for considering the Bank's strategic development plan, risk events that
+bear material influence on the overall situation, business and institutional development
+plan, major investment and financing plan, annual social responsibility report and other
+major matters critical to the Bank's development, making recommendations to the Board
+of Directors, and examining and assessing the soundness of the corporate governance
+framework to ensure that financial reporting, risk management and internal control are
+compliant with corporate governance criteria of the Bank.
+Performance of the Strategy Committee During the reporting period, the Strategy
+Committee held nine meetings on 25 January, 30 March, 29 April, 20 May, 23 June,
+30 August, 23 September, 28 October and 20 December 2022, respectively. At these
+meetings, the Strategy Committee considered and approved 22 proposals, and heard
+four reports. To promote the coordination between bank-wide strategic planning and
+national strategies, the Strategy Committee considered and approved the Bank's strategic
+development plan for the 14th Five-Year Plan period. The Strategy Committee also
+paid close attention to strategic capital allocation, and reviewed and approved several
+proposals including the proposals on issuing undated additional tier 1 capital bonds and
+the 2021 capital adequacy ratio management report, providing a driving force for the
+Bank to promote sustainable development, enhance capital strength, and strengthen risk
+resistance capacity on all fronts.
+Implementation of Resolutions of the
+Shareholders' General Meeting by the Board
+of Directors
+ICBC
+118
+The Risk Management Committee is responsible for constantly monitoring and examining
+the risk management system of the Bank, and examining the effectiveness of the system
+at least on an annual basis. Under the enterprise-wide risk management system structure
+of the Bank, the Risk Management Committee performed its function of examining the
+Bank's risk management system through reviewing and revising the risk strategy, risk
+management policy, risk appetite and the enterprise-wide risk management structure,
+monitoring and evaluating the setup, mode of organization, work procedures and results
+of risk management departments, regularly assessing the risk policy, risk appetite and
+enterprise-wide risk management status, supervising and assessing risk control activities
+conducted by the Senior Management members in terms of credit risk, market risk,
+operational risk, liquidity risk, compliance risk, reputational risk and interest rate risk in
+the banking book. For details of the risk management, please refer to the section headed
+"Discussion and Analysis Risk Management".
+Examining the risk management system
+Performance of the Risk Management Committee During the reporting period, the
+Risk Management Committee held seven meetings on 25 January, 25 February, 29 March,
+28 April, 20 May, 29 August and 23 September 2022, respectively. At these meetings,
+the Risk Management Committee considered and approved 19 proposals, and heard
+two reports. The Risk Management Committee continuously supervised enterprise-wide
+risk management. It considered and approved proposals on the 2021 Risk Report and
+Risk Appetite Assessment, the Management Report on Interest Rate Risk in the Banking
+Book of the Group for 2021 and the 2022 Management Strategy, 2022 Liquidity Risk
+Management Strategy, and the 2021 Compliance Risk and AML Management Report of
+the Group and heard reports on technology risk management in 2021. It has become
+more foresighted in preventing and controlling financial risks and enhancing the risk
+management mechanism, in a bid to assist the Board of Directors in improving its risk
+management, prevention and control capabilities.
+Primary Responsibilities of the Risk Management Committee The Risk Management
+Committee is primarily responsible for constantly overseeing the Bank's risk management
+system, reviewing and revising the strategy, policy and procedures of risk management
+and internal control process of the Bank, and supervising and evaluating the performance
+of Senior Management members and risk management departments in respect of risk
+management.
+activities, audit supporting measures, internal audit team building, etc., thus effectively
+performing the function of risk management. The Audit Committee examines, monitors
+and assesses the internal audit work of the Bank, supervises the internal audit rules and
+their implementation, and makes assessment of audit procedures and results of the
+internal audit department. It is also responsible for urging the Bank to ensure adequate
+resources for the internal audit department and coordinating the communication between
+the internal audit department and external auditors. The internal audit department
+is accountable to and reports to the Board of Directors, is guided by the Board of
+Supervisors and is under the examination, supervision and assessment of the Audit
+Committee. For details of the internal audit, please refer to the section headed "Corporate
+Governance Report ― Internal Audit".
+Committee
+Risk Management
+Corporate Governance Report
+117
+Annual Report 2022
+Yang Siu Shun
+The Bank has established a vertical and independent internal audit management system
+responsible and reporting to the Board of Directors. The Board of Directors regularly
+reviews the internal audit plan and hears internal audit reports on internal audit
+The Board of Directors of the Bank is responsible for establishing, improving and
+effectively implementing internal control, assessing its effectiveness and truthfully
+disclosing internal control assessment reports according to the standard system for
+enterprise internal control. The objective of the internal control of the Bank is to
+reasonably assure the compliance of its operation and management with relevant laws,
+safety of its assets, as well as the authenticity and completeness of its financial reports
+and relevant information, in order to enhance operation efficiency and results, and
+to facilitate the realization of its development strategy. Due to inherent limitation of
+internal control, only reasonable assurance can be provided for the afore-mentioned
+objectives. The Board of Directors and the Audit Committee have reviewed and
+approved the 2022 Internal Control Assessment Report of the Bank. For details of the
+Bank's internal control, please refer to the section headed "Corporate Governance
+Report Internal Control".
+The Audit Committee is responsible for constantly monitoring and examining the internal
+control system of the Bank, and examining the effectiveness of the system at least on
+an annual basis. The Audit Committee performed its function of examining the Bank's
+internal control system through reviewing the administrative rules and regulations and
+their implementation, and examined and assessed the compliance and effectiveness of
+major operating activities of the Bank.
+Examining internal control system
+During the preparation and audit of the 2022 financial statements, the Audit Committee
+discussed and agreed with the external auditors on matters such as audit schedule and
+progress arrangement, followed the status of external audit and conducted supervision
+over relevant work at appropriate time by means of hearing reports and holding informal
+discussions, and reviewed the unaudited and preliminarily audited annual financial
+statements respectively. The Audit Committee held a meeting on 29 March 2023, and
+considered that the 2022 financial statements truly, accurately and completely reflected
+the financial position of the Bank.
+The Audit Committee periodically reviewed the financial reports of the Bank. It had
+reviewed and submitted to the Board of Directors to approve the annual report, interim
+report and quarterly reports of the Bank. It also organized and conducted an internal
+control assessment of the Group and engaged external auditors to audit the effectiveness
+of the internal control over financial reporting in accordance with the relevant regulatory
+requirements. Additionally, it enhanced communication with external auditors, attached
+importance to the supervision of external auditors and heard several reports of external
+auditors concerning audit results, and management proposals.
+Reviewing periodic reports
+Performance of the Audit Committee During the reporting period, the Audit
+Committee held eight meetings on 25 January, 25 February, 29 March, 30 March, 28
+April, 29 August, 23 September and 27 October 2022, respectively. At these meetings,
+the Audit Committee considered and approved 12 proposals, and heard 16 reports. The
+Audit Committee continued to oversee the Bank's internal control system, reviewed and
+approved the Bank's annual internal control assessment report, and heard reports on
+internal control audit results to improve the Group's compliant operation. It inspected and
+supervised the implementation of internal and external audits, considered and approved
+proposals on the internal audit plan, heard reports on the implementation of internal
+audits and the summary of external audit to promote the formation of an effective
+communication mechanism between internal and external audits.
+Corporate Governance Report
+ICBC
+116
+Primary Responsibilities of the Audit Committee The Audit Committee is mainly
+responsible for constantly overseeing the Bank's internal control system, and supervising,
+inspecting and evaluating financial information and internal audit of the Bank, proposing
+the engagement or replacement of external auditors, reviewing the reports of external
+auditors, and coordinating the communication between the internal audit departments
+and external auditors, and assessing mechanisms for the Bank's staff to report
+misconducts in financial statements, internal control, etc., and assessing the mechanism
+for the Bank to conduct independent and fair investigations and take appropriate actions
+in relation to the reported matters.
+Performance of the Corporate Social Responsibility and Consumer Protection
+Committee During the reporting period, the Corporate Social Responsibility and
+Consumer Protection Committee held five meetings on 25 January, 25 February, 28
+April, 29 August and 23 September 2022, respectively. At these meetings, the Corporate
+Social Responsibility and Consumer Protection Committee considered and approved
+four proposals and heard two reports. It actively urged the Bank to perform the social
+responsibilities, considered and approved the proposals on the application for temporary
+authorization limit for external donations, etc., providing continuous support for charity,
+culture, education and other public-interested activities. The committee focused on
+the development of green finance and inclusive finance, considered and approved the
+proposals on the 2022 annual business plan for inclusive finance, heard the reports on
+the financial services for rural revitalization and actively practiced China's sustainable
+development strategy and rural revitalization strategy. The committee focused on the
+consumer protection, and considered and approved the proposal on the consumer
+protection in 2021 and consumer protection plan for 2022.
+Primary Responsibilities of the Corporate Social Responsibility and Consumer
+Protection Committee The Corporate Social Responsibility and Consumer Protection
+Committee is mainly responsible for considering the Bank's fulfillment of social
+responsibilities with respect to environment, society, corporate governance, precision
+poverty alleviation, and corporate culture, the strategy, policy and target of consumer
+protection, green finance strategy, the development plan, basic policy, annual operating
+plan and assessment method of inclusive finance, and making recommendations to the
+Board of Directors.
+Effectiveness of the internal audit function
+Chairman
+Committee Member
+Committee Member
+Zheng Guoyu
+Committee Member
+Liao Lin
+Chairman
+Chen Siging
+US Risk
+Committee
+Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Transactions
+Risk
+Management
+Committee
+Audit Committee
+Committee
+Committee Member
+Committee
+Protection
+Strategy
+and Consumer
+Related Party
+Special Committees under the Board of Directors
+Corporate Social
+Responsibility
+As at the disclosure date of the results, the composition of special committees of the Board of Directors of the Bank is as
+follows:
+The Board of Directors of the Bank has established eight special committees, namely, the Strategy Committee, the
+Corporate Social Responsibility and Consumer Protection Committee, the Audit Committee, the Risk Management
+Committee, the Nomination Committee, the Compensation Committee, the Related Party Transactions Control Committee
+and the US Risk Committee. Except for the Strategy Committee and the Corporate Social Responsibility and Consumer
+Protection Committee, chairmen of all the other committees are assumed by Independent Non-executive Directors. More
+than half of the members of the Audit Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee are Independent Non-executive Directors.
+Special Committees of the Board of Directors
+Special Committees of the Board of Directors
+Corporate Governance Report
+ICBC
+114
+Directors
+Anthony Francis Neoh
+Chairman
+Committee Member
+Committee Member
+Anthony Francis Neoh
+Committee Member
+Committee Member
+Committee Member
+Dong Yang
+Committee Member
+Committee Member
+Committee Member
+Chen Yifang
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Cao Liqun
+Committee Member
+Committee Member
+Committee Member
+Feng Weidong
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Lu Yongzhen
+Committee Member
+Committee Member
+Committee Member
+Wang Jingwu
+Committee Member
+Directors
+0/0
+4/4
+(4) According to relevant rules of the Bank, Senior Management members of the Head Office and employees in positions that
+have a significant influence on the risks of the Head Office, including Chairman, Vice Chairman, Executive Director, President,
+Chairman of the Board of Supervisors and Senior Executive Vice President of the Head Office, Senior Management members
+such as Chief Business Officer, Board Secretary and tier-1 approver. During the reporting period, the Bank's tier-1 approvers
+were assumed by Mr. Zheng Guoyu, Mr. Wang Jingwu, Mr. Zhang Wenwu, Mr. Zhang Weiwu, Ms. Xiong Yan and Mr. Xu
+Shouben concurrently. As at the disclosure date, the Senior Management members of the Head Office and the employees
+in positions that have a significant influence on the risks of the Head Office had not been involved in the circumstances that
+require the recourse and rebate of performance-based remuneration in 2022.
+(5) During the reporting period, Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang, Mr. Dong Yang and Mr.
+Zheng Fuqing did not obtain remuneration from the Bank during their tenure as directors of the Bank.
+(6) Fees of Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding
+their remuneration with the Bank in accordance with the employee remuneration system. Mr. Shen Bingxi has not obtained any
+allowances from the Bank since June 2016 in accordance with the regulations of relevant government authorities.
+(7) As the Bank's Independent Non-executive Directors and External Supervisors served as directors or senior management of
+other legal persons or organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or
+organizations became related parties of the Bank. During the reporting period, some Independent Non-executive Directors
+and External Supervisors obtained remuneration from such related parties. Except to the extent of the afore-mentioned
+circumstances, none of the Bank's Directors, Supervisors and Senior Management was paid by the Bank's related parties during
+the reporting period.
+(8) For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+Annual Report 2022
+109
+Corporate Governance Report
+Overview of Corporate Governance
+During the reporting period, the Bank continued to
+refine the modern corporate governance framework,
+mechanism and culture. The Bank constantly developed
+the corporate governance structure which was led by
+the Bank's Party Committee with the Board of Directors
+acting as the decision-making organ, the Board of
+Supervisors responsible for compliance supervision,
+and the Management in charge of operation. The
+Bank strengthened the top-level design of corporate
+governance, revised and improved the Articles of
+Association, and continued to push forward the organic
+integration between the Party's leadership and corporate
+governance. The Bank deeply applied its institutional
+advantages to the construction of modern governance
+system, and constantly improved the governance efficiency
+and high-quality development capability. The Board of
+Directors adhered to the political and people-oriented
+nature of financial work, continued to improve corporate
+governance frameworks and strengthen strategic guidance
+and risk management. It formulated overall strategic
+development plans, completely, comprehensively and
+Corporate Governance Framework
+accurately applied the new development philosophy, and
+served the new pattern of development, in an effort to
+drive the high-quality development on all fronts. The Board
+of Directors coordinated the implementation of the "Three
+Tasks" of financial work to continuously provide more
+adaptive, competitive and inclusive financial services and
+actively advanced towards the goal of turning ICBC into a
+world-class and modern financial enterprise with Chinese
+characteristics. The Board of Supervisors gave full play to
+its supervisory function. It focused on how the Board of
+Directors and the Senior Management implemented the
+important decisions and arrangements of the Party Central
+Committee and the State Council, national economic and
+financial policies and regulatory requirements, etc. The
+Board of Supervisors conducted sound supervision on duty
+performance, financial management, risk management,
+internal control and compliance and other aspects,
+putting its important role in corporate governance into
+good use. There is no material divergence between
+the actual corporate governance of the Bank, relevant
+laws and administrative regulations, and the corporate
+governance-related rules issued by CSRC.
+Shareholders'
+General
+Meeting
+Primary reporting line
+Secondary reporting line
+Strategy
+Committee
+Corporate Social
+Responsibility and
+Consumer Protection
+Committee
+Board of
+Directors
+Board of
+Supervisors
+Risk Management
+Committee
+(3) In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the
+President and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal
+results. Accordingly, the Bank accrued RMB16 thousand, RMB9.4 thousand, RMB6.5 thousand, RMB5 thousand and RMB3.6
+thousand for Mr. Chen Siqing, Mr. Liao Lin, Mr. Wang Jingwu, Mr. Zhang Wenwu and Mr. Xu Shouben respectively, as
+additional contribution to the Annuity Plan in 2022.
+Nomination
+Committee
+(2) During the reporting period, the total remuneration amount paid to Directors, Supervisors and Senior Management members
+was RMB14,294.2 thousand. According to the requirements of relevant government authorities, the total final remuneration
+payable to the Chairman of the Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors,
+Shareholder Supervisors and other Senior Management members is still subject to final confirmation by relevant government
+authorities. Additional details of remuneration will be disclosed when they have been determined.
+Directors, Supervisors and Senior Management
+The attendance of each of the Directors in Shareholders'
+General Meetings and meetings of the Board of Directors
+and the special committees of the Board of Directors
+during the reporting period is set out below:
+For major proposals reviewed by the Board of Directors,
+please refer to the announcements of the Bank on the
+website of SSE, the "HKEXnews" website of HKEX or the
+website of the Bank.
+The Board of Directors highly valued the fulfillment of
+social responsibility and endeavored to maximize the
+comprehensive value of economy, environment and
+society. It reviewed and approved proposals on the
+Application for Temporary Authorization Limit for External
+Donations, the Corporate Social Responsibility Report
+2021, the 2022 Business Plan for Inclusive Finance, the
+2021 Work Report on and 2022 Work Plan for Consumer
+Protection, etc.
+The Board of Directors enhanced capital management and
+continued to meet the capital needs of supporting the
+real economy and the regulatory requirements on capital
+management. It reviewed and approved proposals on the
+2021 Internal Capital Adequacy Assessment Report, the
+2021 Capital Adequacy Ratio Report, issuing undated
+additional tier 1 capital bonds, etc.
+The Board of Directors attached great importance to the
+enterprise-wide risk management, continuously improved
+risk management systems, and prevented the systemic risk
+with all strength. It revised the Rules on Enterprise-wide
+Risk Management, reviewed and approved proposals
+including the 2021 Risk Report and Risk Appetite
+Assessment, the Liquidity Risk Management Strategy for
+2022, the Management Report on Interest Rate Risk in the
+Banking Book of the Group for 2021 and the Management
+Strategy for 2022, and heard reports such as Report on
+Technology Risk Management in 2021.
+The Board of Directors made scientific decisions on, and
+reviewed and approved proposals such as development
+strategy plans for the 14th Five-Year Plan period and the
+annual inclusive finance business plan in accordance with
+economic and financial policies and major objectives,
+including strategic planning and development, preventing
+and controlling financial risks, serving the real economy,
+deepening inclusive finance, and supporting rural
+revitalization.
+During the reporting period, the Board of Directors of
+the Bank held 10 meetings on 25 January, 25 February,
+30 March, 29 April, 20 May, 23 June, 30 August,
+23 September, 28 October and 20 December 2022,
+respectively. At these meetings, the Board of Directors
+considered 75 proposals, and heard 24 reports.
+Meetings of the Board of Directors
+President Mr. Liao Lin is responsible for the daily
+management of the business operations of the Bank. The
+President is appointed by and accountable to the Board of
+Directors, and performs his responsibilities as stipulated in
+the Articles of Association of the Bank and as authorized
+by the Board of Directors.
+Chairman Mr. Chen Siqing is the legal representative
+of the Bank, and is responsible for leading the Board
+of Directors in considering and formulating business
+development strategies, risk management, internal control
+and other significant matters of the Bank.
+Pursuant to Code Provision C.2.1 of the Corporate
+Governance Code (Appendix 14 to the Hong Kong Listing
+Rules) and the Articles of Association of the Bank, the roles
+of Chairman and President should be held by two persons,
+and the Chairman shall not concurrently hold the position
+of legal representative or chief responsible officer of the
+controlling shareholder.
+Chairman and President
+Corporate Governance Report
+ICBC
+112
+Mr. Chen Siqing was Chairman of the Board of Directors.
+Mr. Liao Lin was Vice Chairman of the Board of Directors.
+The Executive Directors have worked in the areas of
+banking and management for a long time, possesses
+extensive professional expertise and experience in those
+areas and are familiar with operation and management
+of the Bank. Non-executive Directors have worked in the
+fiscal, economic, financial and governing sectors for many
+years, and they have rich practical experience and relatively
+high level of understanding of policies and theories.
+All of the Independent Non-executive Directors are
+prestigious Chinese or foreign experts in their respective
+areas, e.g. economy, financial supervision, finance, audit
+and law, and they are familiar with Chinese and foreign
+regulatory rules and have a good knowledge of corporate
+governance, finance and bank management. The number
+of Independent Non-executive Directors of the Bank
+accounted for more than one third of the total members of
+the Board of Directors, complying with relevant regulatory
+requirements.
+The Bank formulated relatively complete procedures
+for selecting, nominating and electing Directors. With
+diversified backgrounds, the Directors of the Bank
+complemented each other with regard to their expertise,
+professional competence, professional experience, region,
+gender and many other aspects, which ensured scientific
+decision-making of the Board of Directors. As at the
+disclosure date of the results, the Board of Directors of the
+Bank consisted of 14 directors, including four Executive
+Directors: Mr. Chen Siqing, Mr. Liao Lin, Mr. Zheng Guoyu
+and Mr. Wang Jingwu; five Non-executive Directors: Mr.
+Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms.
+Chen Yifang and Mr. Dong Yang; and five Independent
+Non-executive Directors: Mr. Anthony Francis Neoh,
+Mr. Yang Siu Shun, Mr. Shen Si, Mr. Fred Zuliu Hu and
+Mr. Norman Chan Tak Lam. The Board of Directors has
+reviewed the implementation and effectiveness of its board
+diversity policy. The members of the Board of Directors
+have included two female directors, both of whom have
+contributed to the scientific and efficient decision-making
+of the Board of Directors by offering a unique female
+perspective. In the future, the Bank will take full account
+of the gender composition of candidates in the selection.
+of Directors in accordance with relevant policies for the
+diversified backgrounds of Directors, in order to further
+improve the gender diversity of members of the Board of
+Directors.
+Composition of the Board of Directors
+The Board of Directors of the Bank earnestly and fully
+implemented the resolutions reviewed and approved by
+the Shareholders' General Meeting during the reporting
+period.
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+Annual Report 2022
+Compensation
+Committee
+US Risk
+Committee
+Internal Audit
+Sub-bureau
+Corporate Governance Report
+The Bank has made constant efforts to improve the
+corporate governance and checks and balances mechanism
+comprising the Shareholders' General Meeting, the Board
+of Directors, the Board of Supervisors and the Senior
+Management featuring clearly-defined responsibilities
+and accountability, coordination and effective checks and
+balances, and to optimize responsibilities of the authority
+organ, decision-making organ, supervisory organ and
+executive organ. As a result, the corporate governance
+operation mechanism with scientific decision-making
+process, effective supervision and steady operation has
+been in place.
+Corporate Governance Code
+During the reporting period, the Bank complied with
+the principles, code provisions and recommended best
+practices stipulated in the Corporate Governance Code
+(Appendix 14 to the Hong Kong Listing Rules).
+With regard to the compliance with Article B. (f) of Part I
+of the Corporate Governance Code (Appendix 14 to the
+Hong Kong Listing Rules), Mr. Nout Wellink ceased to
+serve as Independent Non-executive Director of the Bank
+on 31 March 2022 due to expiration of his term of office.
+On 23 June 2022, Mr. Norman Chan Tak Lam was elected
+as Independent Non-executive Director of the Bank at
+the Annual General Meeting for the Year 2021, and his
+qualification was approved by CBIRC in September 2022.
+The Bank has met the aforesaid provisions.
+Amendment to the Articles of Association
+On 23 June 2022, the Bank's Annual General Meeting
+for the Year 2021 reviewed and adopted the Proposal
+on the Amendment to the Articles of Association.
+The amendments covered the business purpose, the
+responsibilities of the Board of Directors, the Board of
+Supervisors, the Shareholders' General Meeting and the
+Senior Management, risk management, remuneration
+incentive, social responsibilities and ESG, green finance,
+consumer protection and information disclosure, etc.
+Currently, the new version of the Articles of Association.
+is being reviewed and approved by the CBIRC. Before the
+approval takes effect, the current Articles of Association of
+the Bank shall remain in force. For details, please refer to
+the circular issued by the Bank on 6 May 2022.
+Shareholders' General Meeting
+Responsibilities of the Shareholders' General
+Meeting
+Independent Non-executive
+Convening of the Shareholders' General
+Meeting
+During the reporting period, the Bank convened the
+Annual General Meeting for the Year 2021 on 23 June
+2022, and the First Extraordinary General Meeting of 2022
+on 25 November 2022. The afore-mentioned Shareholders'
+General Meetings were convened and held in compliance
+with relevant laws and regulations and the Articles of
+Association of the Bank. The Bank made announcements
+on the resolutions and disclosed legal opinions in a timely
+manner in accordance with regulatory requirements.
+For details of the above meetings, please refer to the
+announcements of the Bank dated 23 June 2022 and 25
+November 2022 respectively on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the
+Bank.
+Annual Report 2022
+111
+Corporate Governance Report
+Board of Directors and Special
+Committees
+Responsibilities of the Board of Directors
+Internal Audit
+Bureau
+Related Party
+Transactions Control
+Committee
+Overseas
+Institutions
+110
+Audit Committee
+Asset & Liability
+Management
+Committee
+Senior
+Management
+Personal Banking
+Promotion
+Committee
+Consumer Protection
+Committee
+Corporate &
+Investment Banking
+Promotion Committee
+Institutional Banking
+Promotion
+Committee
+Risk
+Management
+Committee
+Financial Technology
+and Digital Development
+Committee
+Financial Assets
+Service Management
+Committee
+Inclusive Finance
+and Rural Revitalization
+Promotion Committee
+Internal departments and directly managed
+institutions of the Head Office
+Domestic
+Institutions
+Note: The above is the corporate governance framework chart of the Bank as at the end of 2022.
+ICBC
+113
+As the organ of power of the Bank, the Shareholders'
+General Meeting involves all shareholders. The
+Shareholders' General Meeting is responsible for, among
+others, deciding on business policies and significant
+investment plans of the Bank; examining and approving
+the Bank's annual financial budget, final account
+proposals, plans for profit distribution and loss make-up;
+electing and replacing directors, supervisors appointed
+from the shareholder representatives and external
+supervisors; examining and approving work report of
+the Board of Directors and work report of the Board of
+Supervisors; adopting resolutions on merger, division,
+dissolution, liquidation, change of corporate form, increase
+or decrease of the Bank's registered capital, issuance of
+corporate bonds or other securities and public listing,
+repurchase of the shares and issuance of preference
+shares; and amending the Articles of Association of the
+Bank.
+Corporate
+8/8
+10/10
+2/2
+Feng Weidong
+5/5
+717
+9/9
+10/10
+717
+2/2
+Non-executive Directors
+3/4
+3/4
+4/7
+10/10
+2/2
+Wang Jingwu
+717
+Lu Yongzhen
+5/5
+S
+Cao Liqun
+Corporate Governance Report
+4/4
+5/5
+4/4
+4/4
+9/9
+10/10
+2/2
+Dong Yang
+5/5
+9/9
+10/10
+2/2
+Chen Yifang
+717
+8/8
+5/5
+10/10
+2/2
+5/5
+8/9
+7/17
+Responsibility
+Committee
+Committee
+Directors
+Meeting
+Directors
+Audit
+Strategy
+Board of
+Committee
+General
+Risk
+Consumer
+Shareholders'
+Related Party
+Special Committees of the Board of Directors
+and
+Attendances in person/Number of meetings that should be attended
+Social
+Transactions
+Management
+Committee
+Protection
+Compensation
+2/2
+Zheng Guoyu
+Nomination
+5/5
+9/9
+10/10
+2/2
+Liao Lin
+7/9
+8/10
+5/5
+Chen Siging
+2/2
+Control
+Committee
+Committee
+9/10
+US Risk
+Committee
+Executive Directors
+Committee
+Introductory trainings for newly-appointed directors
+Anti-money Laundering training
+Series trainings on business lines
+Trainings themed laws and regulations and investor protection, capital market operation,
+ESG management of listed companies, prevention and identification of financial fraud,
+and analysis of annual report
+The Listed Companies Association of Beijing:
+"Duty Performance of Independent Directors of Listed Companies" Salon
+China Association for Public Companies:
+Initial training for directors, supervisors and senior management of listed companies
+SSE:
+Internal trainings
+External trainings
+The Directors of the Bank acknowledged that they are
+responsible for the preparation of the financial statements
+of the Bank. During the reporting period, in strict
+compliance with relevant provisions, the Bank published
+the 2021 Annual Report, the First Quarterly Report of
+2022, the 2022 Interim Report and the Third Quarterly
+Report of 2022 as scheduled.
+During the reporting period, the Bank advanced overall
+training for Directors, constantly increased training
+resources, and actively expanded the channels and forms
+of training for Directors, with the aim of assisting the
+Directors in continuing to improve their ability to perform
+their duties. Directors of the Bank attended relevant
+trainings according to work needs.
+Training of Board Secretary
+During the reporting period, Directors of the Bank
+proactively conducted surveys on departments, branches
+and subsidiaries of the Bank concerning such topics
+as commercial banks serving the enterprises featuring
+"Specialization, Refinement, Differentiation and
+Innovation", developing green finance, supporting rural
+revitalization, refining capital replenishment mechanism,
+pushing forward the transformation of banking outlets
+and the operation and management of the Bank's
+branches and affiliates. In the form of survey reports,
+such investigations provide the Bank with constructive
+suggestions and opinions.
+Investigation and Training of Directors
+Follow-up training for independent directors of listed companies
+The topics of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+Guangzhou
+Office
+Independence and Performance of Duties of
+Independent Non-executive Directors
+general meeting, and convening and presiding over
+the extraordinary general meeting in case the Board
+of Directors fails to perform its duty of convening
+Shareholders' General Meeting; proposing to convene an
+extraordinary meeting of the Board of Directors.
+As the supervisory organ of the Bank, the Board of
+Supervisors is accountable to, and shall report its work
+to, the Shareholders' General Meeting. The Board of
+Supervisors is responsible for, among others, supervising
+the performance and due diligence of Directors and Senior
+Management members; supervising the performance
+of duties by the Board of Directors and the Senior
+Management; conducting exit audits on Directors and
+Senior Management members when necessary; inspecting
+and supervising financial activities of the Bank; examining
+financial information such as financial report, business
+report and profit distribution plan to be submitted
+to the Shareholders' General Meeting by the Board
+of Directors; inspecting and supervising the business
+decision-making, risk management and internal control
+of the Bank and guiding the internal audit department of
+the Bank; formulating performance evaluation measures
+of the Board of Directors and the Senior Management
+and their members as well as supervisors; evaluating the
+performance of the Board of Directors and the Senior
+Management and their members as well as supervisors,
+and reporting to the Shareholders' General Meeting
+for approval; presenting proposals to the Shareholders'
+General Meeting; proposing to convene an extraordinary
+Responsibilities of the Board of Supervisors
+Board of Supervisors
+Corporate Governance Report
+ICBC
+122
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Anthony Francis Neoh, Yang Siu Shun, Shen Si, Fred Zuliu Hu and Norman Chan Tak Lam
+The Bank has attached great importance to the management of risks arising from such business, formulated strict
+rules on the credit ratings of the entities to which the guarantee was provided and on the operation process and
+duration management of provision of guarantee services, and carried out relevant business on such basis.
+In accordance with relevant provisions and requirements of CSRC, we, in the capacity of Independent Non-
+executive Directors of the Bank, reviewed external guarantees of the Bank on the principles of fairness, impartiality
+and objectivity, and hereby give our specific explanation and opinions as follows: upon review, external guarantees
+provided by the Bank mainly focus on issuance of letters of guarantee or standby letters of credit, which is part of
+the ordinary banking services within the business scope of the Bank as approved by relevant regulatory authorities.
+As at 31 December 2022, the balance of letters of guarantee or standby letters of credit issued by the Bank totaled
+RMB557,419 million.
+Independent Non-executive Directors' Special Explanation and Independent
+Opinions on External Guarantees of the Bank
+For the details on performance of duties of Independent
+Non-executive Directors of the Bank during the reporting
+period, please refer to the Work Report of Independent
+Directors for 2022 issued by the Bank on 30 March 2023.
+During the reporting period, the Bank's Independent
+Non-executive Directors did not raise any objection on
+proposals of the Board of Directors and special committees
+of the Board of Directors.
+strategic planning and promoting the implementation of
+these strategies, enhancing ESG management, facilitating
+digital development, etc., and put forward relevant
+comments and suggestions. The Bank paid close attention
+to the relevant comments and suggestions, and organized
+the implementation thereof according to the actual
+conditions.
+During the reporting period, Chairman Chen Siqing held
+discussions with the Bank's Independent Non-executive
+Directors, who provided suggestions with respect to the
+Bank's corporate governance and operation of the Board
+of Directors, etc. The Bank's Independent Non-executive
+Directors earnestly attended the meetings of the Board
+of Directors and special committees, gave independent
+opinions on the issues for consideration, and put forward
+opinions and suggestions in terms of improving the
+capacity of financial services in serving the real economy,
+reinforcing risk control and compliance management,
+speeding up FinTech innovation and promoting the
+high-quality development of overseas institutions, etc.
+They actively attended various meetings, symposia, forums
+and other activities in the Bank, actively exchanged ideas
+on deepening financial reform, formulating the Group's
+Corporate Governance Report
+121
+Annual Report 2022
+The Bank conducted the appointment of Independent
+Non-executive Directors in strict accordance with the
+relevant regulatory rules, the Articles of Association of
+the Bank and other provisions. The qualifications, number
+and proportion of the Bank's Independent Non-executive
+Directors comply with regulatory requirements. The Bank's
+Independent Non-executive Directors do not have any
+business or financial interests in the Bank or its subsidiaries,
+and they have not assumed any managerial position in
+the Bank. The Bank has received the annual confirmation
+on independence from all Independent Non-executive
+Directors and considered that they were independent.
+During the reporting period, the Board Secretary of the
+Bank attended the relevant specialized trainings, with
+the training hours over 15 hours, which met relevant
+regulatory requirements.
+Responsibilities of Directors in Respect of
+Financial Statements
+Compensation Committee
+Term of Directors
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Primary reporting line
+Secondary reporting line
+Senior
+Management
+Board of
+Directors
+Audit Committee
+Internal Audit
+Bureau
+Internal Audit
+Board of
+Supervisors
+Tianjin
+Office
+Shenyang
+Office
+Shanghai
+Office
+Nanjing
+Office
+Wuhan
+Office
+Composition of the Board of Supervisors
+Chengdu
+Office
+Beijing
+Office
+Corporate Governance Report
+ICBC
+Corporate Governance Report
+Corporate Governance Report
+ICBC
+120
+Performance of the US Risk Committee During the reporting period, the US Risk
+Committee held four meetings on 29 March, 23 June, 29 August and 20 December
+2022, respectively. At these meetings, the US Risk Committee considered and approved
+two proposals, and heard 13 reports. It attached importance to and strengthened the
+compliance management of overseas institutions, reviewed and approved the proposals
+including the risk management framework and the annual audit of risk appetite in the
+US, and the liquidity stress testing, funding contingency plans, key business lines and
+product liquidity risks in the US, heard the reports on the risk management and liquidity
+risk management in the US in 2021, and assisted the Board of Directors in urging
+the Management to well perform in compliance and risk prevention and control in
+international operation.
+Primary Responsibilities of the US Risk Committee In accordance with the relevant
+requirements in the Enhanced Prudential Standards for Bank Holding Companies and
+Foreign Banking Organizations established by the Federal Reserve Board, the US Risk
+Committee supervised the implementation of the US business-related risk management
+framework and relevant policies.
+Performance of the Related Party Transactions Control Committee During the
+reporting period, the Related Party Transactions Control Committee held four meetings
+on 29 March, 29 August, 23 September and 20 December 2022, respectively. At these
+meetings, the Related Party Transactions Control Committee considered and approved
+five proposals including the proposal on identification of related parties of the Bank, and
+heard the special report on related parties and related party transactions in 2021. The
+Related Party Transactions Control Committee focused on reviewing the fairness and
+objectivity of related party transactions, urged the Bank to strengthen the management of
+related party transactions and inside transactions, and assisted the Board of Directors in
+ensuring the Bank's related party transactions are carried out in compliance with laws and
+regulations.
+Primary Responsibilities of the Related Party Transactions Control Committee The
+Related Party Transactions Control Committee is mainly responsible for developing the
+basic policies governing the management of related party transactions, identifying the
+Bank's related parties, approving related party transactions and other related matters
+within the authority granted by the Board, receiving related party transaction statistics for
+filing purpose, reviewing the related party transactions that are subject to the approval of
+the Board of Directors or the Shareholders' General Meeting, and reporting to the Board
+of Directors on the implementation of the related party transaction management policies
+as well as the conditions on these transactions.
+Performance of the Compensation Committee During the reporting period, the
+Compensation Committee held five meetings on 25 February, 23 June, 29 August, 23
+September and 27 October 2022, respectively. At these meetings, the Compensation
+Committee considered and approved eight proposals including the proposals on the
+payment of remuneration to Directors and Senior Management members for 2021,
+the Senior Management performance evaluation plan for 2022 and the renewal of
+directors, supervisors and officers liability insurance for 2022-2023, and heard the 2021
+assessment report on the performance of duties of Directors by the Board of Directors.
+The Compensation Committee, in accordance with regulatory requirements, drafted the
+remuneration of directors, and improved the performance evaluation indicators and the
+incentive and constraint mechanism.
+US Risk Committee
+Related Party Transactions
+Control Committee
+Corporate Governance Report
+119
+Annual Report 2022
+Primary Responsibilities of the Compensation Committee The Compensation
+Committee is mainly responsible for formulating assessment measures on the
+performance of duties and compensation plans for Directors, organizing the assessment
+on the performance of duties of Directors, putting forth the proposal on remuneration
+distribution for Directors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the
+performance and behaviors of Senior Management members.
+Performance of the Nomination Committee During the reporting period, the
+Nomination Committee held five meetings on 25 February, 29 March, 28 April, 29
+August and 23 September 2022, respectively. Through these meetings, the Nomination
+Committee considered and approved seven proposals including the proposals on the
+nomination of Mr. Chen Siqing as candidate for Executive Director of the Bank and
+extension of his tenure of relevant positions in the Board of Directors, the nomination
+of Mr. Norman Chan Tak Lam as candidate for Independent Director of the Bank, the
+nomination of Mr. Fred Zuliu Hu as candidate for Independent Director of the Bank and
+extension of his tenure of relevant positions in the special committees of the Board of
+Directors, and the nomination of Mr. Lu Yongzhen as candidate for Non-executive Director
+of the Bank and extension of his tenure of relevant positions in the special committees of
+the Board of Directors, and heard the report on the framework of the Board of Directors
+in 2021. The Nomination Committee prudently assessed the organizational structure
+of the Bank's Board of Directors and its special committees, promoted the change of
+directors in an orderly manner and continuously improved and adjusted the composition
+of special committees of the Board of Directors.
+Primary Responsibilities of the Nomination Committee The Nomination Committee is
+mainly responsible for making recommendations to the Board of Directors on candidates
+for Directors and Senior Management members, nominating candidates for chairmen and
+members of special committees of the Board of Directors, formulating the standards and
+procedures for selection and appointment of Directors and Senior Management members,
+and formulating the training and development plans for Senior Management members
+and key reserved talents. The Nomination Committee is also responsible for assessing the
+structure, size and composition of the Board of Directors on a yearly basis and making
+recommendations to the Board of Directors based on the Bank's development strategy.
+The Articles of Association of the Bank specifies procedures and methods to nominate
+Directors. Please refer to Article 118 of the Articles of Association. During the reporting
+period, the Bank appointed and renewed the appointments of Directors of the Bank
+in strict accordance with the Articles of Association of the Bank. The Nomination
+Committee reviews the qualifications of candidates for Directors based on whether the
+candidate complies with applicable laws, administrative rules, regulations and the Articles
+of Association of the Bank. The Bank attached importance to diversified sources and
+backgrounds of Directors and continued the efforts to enhance the professionalism of the
+Board of Directors, thus laying the foundation for the effective operation and scientific
+decision-making of the Board of Directors. According to the requirement on diversified
+composition of the Board of Directors in the Rules for Recommendation and Nomination
+of Board Candidates of the Bank, the Nomination Committee shall pay attention to the
+complementarity of the candidates in terms of expertise, professional competence and
+experience, cultural and educational background, gender, etc., to ensure the members of
+the Board of Directors are well equipped, experienced and have diversified perspectives
+and views. In order to implement the diversity policy, the Nomination Committee
+discusses and designs measurable goals according to actual conditions and assesses the
+improvement of diversified composition of the Board of Directors during the course of its
+yearly assessment on the framework, number of Directors and composition of the Board
+of Directors. As at the disclosure date of the results, there were five Independent Non-
+executive Directors, accounting for more than one third of the total members of the
+Board of Directors.
+Nomination Committee
+In accordance with the Articles of Association of the
+Bank, Directors are elected by the Shareholders' General
+Meeting with a term of three years, and the appointment
+shall take effect from the date of approval by CBIRC or
+upon completion of relevant procedures according to the
+requirements of CBIRC. Directors may be re-appointed
+through re-election at the Shareholders' General Meeting
+after expiration of their term.
+As at the disclosure date of the results, the Board of
+Supervisors of the Bank consisted of three members,
+including one Employee Supervisor, namely Mr. Huang Li;
+and two External Supervisors, namely Mr. Zhang Jie and
+Mr. Liu Lanbiao.
+Proposing the Convening of an Extraordinary
+General Meeting
+During the reporting period, the Board of Supervisors held
+six meetings, reviewed 19 proposals including the Report
+on the Work of the Board of Supervisors for 2021 and
+the Report on Performance Evaluation, heard 19 reports
+on the quarterly business operation, implementation of
+strategy planning, the Group's compliance risk and AML
+management and other contents, and reviewed 35 special
+reports including the reports on the supervision in each
+quarter of 2022 and relevant survey reports of the Board
+of Supervisors.
+Effective Communication with Shareholders
+and Review of Investor Relations Activities
+Investor Relations
+self-inspections. After self-inspections, none of the insiders
+of the Bank were found to be involved in dealings in
+shares of the Bank who have taken advantage of inside
+information during the reporting period.
+The Bank manages inside information and insiders in
+accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and
+conducts the collection, delivery, sorting, preparation
+and disclosure of relevant information in compliance
+with applicable laws and regulations. During the
+reporting period, the Bank continued to strengthen inside
+information management, timely organized the completion
+of insider lists and regularly conducted insider transaction
+Inside Information Management
+Ordinary shareholders of the Bank have the right to
+collect dividends and other forms of benefits distributed
+on the basis of the number of shares held by them;
+preference shareholders shall be entitled to rights to
+dividends in priority to payment of dividends to ordinary
+shareholders. Shareholders have other rights conferred by
+laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+Other Rights
+In the event that the Bank fails to pay the agreed dividend
+to preference shareholders for three years in aggregate or
+for two consecutive years, from the next day following the
+date of approval of the proposal not paying the agreed
+dividend for the current year by the Shareholders' General
+Meeting, preference shareholders shall be entitled to
+attend and vote (together with ordinary shareholders) at
+the Shareholders' General Meeting. For preference shares
+the dividend of which is non-cumulative, the voting rights
+shall be temporarily restored until the full payment of the
+agreed dividend for the current year by the Bank.
+In the following circumstances, preference shareholders
+of the Bank have the right to attend the Shareholders'
+General Meeting and exercise voting rights: (1)
+amendments to the Articles of Association which relate
+to preference shares; (2) the reduction of the registered
+capital of the Bank by more than 10% (either separately
+or in aggregate); (3) merger, division and dissolution or
+change of corporate form of the Bank; (4) issuance of
+preference shares; and (5) other events specified in the
+Articles of Association that will change or abrogate the
+rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders'
+General Meeting shall be given to preference shareholders
+in accordance with the notification procedures applicable
+to ordinary shareholders as specified in the Articles of
+Association.
+Special Provisions on Rights of Preference
+Shareholders
+Corporate Governance Report
+ICBC
+124
+Shareholders are entitled to supervise business operation
+of the Bank and put forward suggestions or inquiries
+accordingly. Shareholders are entitled to review the
+information of the Bank such as the Articles of Association,
+the register of shareholders, documents on status of share
+capital and minutes of Shareholders' General Meetings,
+etc.
+Putting Forward Suggestions and Reviewing
+Documents
+The powers of the Board of Directors and the Senior
+Management are separated in strict compliance with the
+Articles of Association and other corporate governance
+documents of the Bank. During the reporting period, the
+Bank made an inspection on the implementation of the
+plan on authorization of the Board of Directors to the
+President, and no matter was found to be beyond the
+approval authority of the President.
+Powers and Functions of the Senior
+Management
+The Bank carried out the investor relations management
+in accordance with the regulatory requirements in the
+place of listing. With the consistent adherence to the
+investor-centered approach, the Bank has established an
+effective communication mechanism with investors based
+on the principle of serving investors in a comprehensive,
+proactive, precise, coordinated and efficient manner. The
+Bank made constant and extensive communication with
+all investors and analysts through channels like press
+conferences in relation to periodic results announcements,
+domestic and overseas non-deal roadshows, investor
+hotline, investor relations mailbox, investor relations
+website and the online platform of SSE E-interactive, and
+made records of these activities according to relevant
+regulatory requirements, striving to improve its work
+accuracy and service quality regarding investor relations.
+During the reporting period, the Bank creatively held the
+press conference on annual results in the form of webcast
+message and cloud visit to strengthen multi-dimensional
+interaction with investors. It was awarded the "Best
+Practice of the Annual Report Presentation of Listed
+Companies" again by the China Association for Public
+Companies. Through online + offline, one-to-one and
+one-to-many forms, the Bank carried out proactive and
+targeted investor relation activities at a high frequency,
+held multiple special communications on corporate
+governance and organized special investor relation
+activities such as green finance and ESG, FinTech and
+wealth management, so as to alleviate investors' concerns
+with market-oriented, international and professional
+expressions. The Bank took solid steps to protect the
+legitimate rights and interests of small and medium-sized
+investors. It also held the "performance presentation and
+special investor relation management activity" especially
+targeting small and medium-sized investors, so as to
+actively respond to the inquiries about the platforms
+and channels such as SSE E-interactive, investor hotline,
+investor relation mailbox, etc.
+Shareholders who hold more than three percent (3%)
+of shares of the Bank, either individually or jointly, may
+prepare an interim proposal and submit it in writing to the
+Board of Directors ten (10) days before the Shareholders'
+General Meetings convened. The Board of Directors shall
+issue a supplementary notice for the Shareholders' General
+Meeting within two (2) days upon receipt of the proposal
+and submit such proposal to the Shareholders' General
+Meeting for approval.
+In 2023, the Bank will further and proactively deepen the
+communication and exchange with investors to enhance
+investors' understanding and recognition of the Bank and
+continue to protect legitimate interests of the investors,
+and at the same time the Bank hopes to receive more
+support and attention from its investors.
+125
+The Board of Directors of the Bank conducted an
+assessment on the effectiveness of the Group's internal
+control during the reporting period in accordance with
+the Basic Standard for Enterprise Internal Control and
+its supporting guidelines issued by five ministries and
+commissions including MOF, the Circular on Further
+Improving the Effectiveness of Internal Control over
+Financial Reports of Listed Companies issued by MOF and
+CSRC, the Self-regulatory Guidelines for Listed Companies
+No. 1 == Standardized Operation issued by SSE and
+relevant regulatory requirements of SSE and CBIRC. No
+material or significant deficiencies were detected in the
+Bank's internal control system during the assessment.
+Risks that may arise from ordinary deficiencies are
+controllable and corrective actions have been or are being
+taken, which have no material impact on the fulfillment
+of internal control objectives of the Bank. The Bank had
+maintained effective internal control in all material aspects
+in accordance with the standard system for enterprise
+internal control and relevant rules.
+Kunming
+Office
+Internal Control Evaluation and Defects
+While disclosing the annual report, the Bank also disclosed
+the 2022 Internal Control Assessment Report of Industrial
+and Commercial Bank of China Limited in accordance
+with the requirements of MOF, CSRC and SSE. The report
+stated that the Bank had maintained effective internal
+control over financial reporting in all material aspects
+in accordance with the standard system for enterprise
+internal control and relevant rules as at 31 December 2022
+(benchmark date). Deloitte Touche Tohmatsu Certified
+Public Accountants LLP has audited the effectiveness of
+the Bank's internal control over financial reporting as
+at 31 December 2022 and issued the unqualified audit
+report on internal control. For details, please refer to the
+announcements published by the Bank on the website of
+SSE, the "HKEXnews" website of HKEX and the website of
+the Bank.
+Internal Control Assessment Report and
+Internal Control Audit
+and efficiency of supervision, inspection and internal
+control assessment, further refined accountability system,
+made great efforts to strengthen the performance of
+responsibilities for case prevention and case investigation,
+in an endeavor to ensure stable operations.
+During the reporting period, the Bank continued to
+optimize its internal control system for higher governance
+capability in internal control of the Group. The Bank
+advanced the orderly implementation of the 2021-2023
+Development Plan for Internal Control System, improved
+internal governance, organization structure and assessment
+system, and clarified internal control responsibilities. The
+Bank promoted the compliance culture building, carried
+out the campaign with the theme of "Year for Value
+Improvement", and continuously refined the internal
+control environment. The Bank improved methods and
+instruments, and enhanced the "9+X" foresighted
+identification and assessment of various risks. The Bank
+strengthened dynamic risk monitoring in an effort to
+improve the capability of proactive prevention. The Bank
+optimized the authorization management and system
+governance, and actively leveraged digital technologies
+and methods to strengthen the management on key
+positions, key areas and key links, thus constantly
+developing better capacities in the whole-process
+control. The Bank advanced the development of data
+assets and the application of information technology,
+and boosted the collection, processing and analysis of
+information, with the aim of improving the efficiency
+and effectiveness of communication, and supporting the
+Bank's decision-making, implementation and supervision
+of business management. The Bank improved the quality
+The Senior Management of the Bank is responsible for
+formulating systematic policies, procedures and methods,
+as well as taking risk control measures. Under the Senior
+Management, the Operational Risk and Internal Control
+Management Committee subordinated to the Risk
+Management Committee, performs the responsibilities
+related to internal control and evaluates the sufficiency
+and effectiveness of internal control. The Head Office
+and branches have internal control and compliance
+departments which are responsible for the organization,
+promotion and coordination of internal control.
+Internal Control
+Postal code: 100140
+Address: Corporate Strategy and Investor Relations
+Department, Industrial and Commercial Bank of
+China Limited, 55 Fuxingmennei Avenue, Xicheng
+District, Beijing, China
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Telephone: 86-10-66108608
+If an investor wishes to enquire any questions related to
+operation performance of the Bank, please contact:
+Investor Enquiries
+Corporate Governance Report
+Annual Report 2022
+Submitting Interim Proposals for the
+Shareholders' General Meeting
+An extraordinary general meeting should be convened
+within two (2) months from the date when shareholders
+holding more than ten percent (10%) of the voting
+shares of the Bank, either individually or jointly, request
+to convene in writing. Proposing shareholders shall have
+the right to request the Board of Directors in writing to
+convene an extraordinary general meeting. The Board of
+Directors shall make a written response as to whether
+or not it agrees to convene such a meeting within ten
+(10) days upon receipt of the request in accordance with
+laws, administrative regulations, rules and the Articles of
+Association of the Bank. Reasonable expenses incurred
+from the case where shareholders convene the meeting
+by themselves due to the failure of the Board of Directors
+to convene the meeting shall be borne by the Bank, and
+deducted from the payment to those negligent directors.
+Shareholders' Rights
+2/2
+6/6
+6/6
+Board of
+Supervisors
+2/2
+2/2
+General Meeting
+Shareholders'
+Attendances in person/Number of meetings that should be attended
+Huang Liangbo
+Supervisors Leaving Office
+Liu Lanbiao
+Newly appointed Supervisor
+Zhang Jie
+Huang Li
+Supervisor
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+3/3
+Zhang Wei
+Wu Xiangjiang
+Shen Bingxi
+As the executive organ of the Bank, the Senior
+Management is accountable to the Board of Directors.
+The Senior Management is responsible for, among others,
+the operation and management of the Bank; organizing
+the implementation of operation and investment plans
+approved by the Board of Directors; formulating specific
+rules and regulations of the Bank; determining plans for
+compensation distribution and performances evaluation of
+persons in charge of internal departments and branches
+of the Bank (except for the internal audit department);
+truthfully reporting to the Board of Directors or the Board
+of Supervisors on the business performance; drafting
+the annual financial budget plan, final account plan,
+profit distribution plan and loss recovery plan, plans for
+increase or reduction of the registered capital, the issuance
+of bonds or other securities and listing, and making
+suggestions in that respect to the Board of Directors.
+Responsibilities of the Senior Management
+Senior Management
+The Bank has adopted a set of codes of conduct
+concerning the securities transactions by directors and
+supervisors which are no less stringent than the standards
+set out in the Model Code for Securities Transactions by
+Directors of Listed Issuers, Appendix 10 to the Hong Kong
+Listing Rules. After making enquiries to all Directors and
+Supervisors of the Bank, each Director and Supervisor
+confirmed that he/she has complied with the provisions
+of the afore-said codes of conduct during the reporting
+period.
+Securities Transactions of Directors and
+Supervisors
+Corporate Governance Report
+123
+Annual Report 2022
+Meetings of the Board of Supervisors
+Note: For the change of supervisors, please refer to the section headed "Directors, Supervisors and Senior Management - Appointment and
+Removal".
+1/1
+5/6
+2/2
+2/2
+0/0
+3/4
+1/1
+ངgསྲུང
+3/3
+Xi'an
+There was no factor that affected the assessment
+conclusion of internal control effectiveness from the
+benchmark date to the issuance date of the internal
+control assessment report.
+During the reporting period, the Bank implemented
+risk-oriented audit activities according to the development
+strategies and central tasks of reform and transformation
+of the Bank. The Bank strengthened the audit and
+supervision of key institutions, major areas, key processes
+and the main responsible persons of domestic and overseas
+institutions, and fully accomplished the annual audit plan.
+The audit activities focused on the Bank's performance
+in supporting national policies, meeting regulatory
+requirements, improving the quality and efficiency of
+strategy implementation, strengthening risk prevention
+and control and other aspects, covering such key areas
+as financial benefit, credit business, emerging business,
+FinTech, operation management, capital management
+and internal control. The Bank also paid close heed to and
+made full use of audit findings and recommendations,
+with the aim of continuously improving risk management,
+internal control and corporate governance.
+126
+Office
+ICBC
+128
+Anti-corruption Policy
+Regarding the whistleblowing for violations of internal
+rules and regulations by the Bank's institutions or
+employees, the Bank followed the principles of "seeking
+truth from facts, complying with laws and regulations,
+safeguarding legal rights and taking responsibility at
+different levels", and formulated the measures for
+Whistleblowing Rules
+In accordance with the relevant notices of CSRC, the
+Bank conducted a self-inspection amid the governance
+improvement campaign of listed companies. The
+self-inspection results showed that the Bank had complete
+internal rules and regulations for corporate governance,
+sound organizational structure, standardized operation
+procedures, smooth mechanism for the communication
+with investors, and stable cash dividend ratio.
+Remediation of Problems in the
+Self-inspection amid the Governance
+Improvement Campaign of Listed
+Companies
+For the information of management and control on
+subsidiaries, please refer to "Discussion and Analysis
+Business Overview - Diversified Operation and Subsidiary
+Management".
+Management on Subsidiaries
+The Bank adhered to systematic governance, actively
+sought to tackle both the manifestations and the sources
+of corruption to ensure all personnels do not dare to, are
+unable to and have no desire to commit corruption. The
+Bank strengthened the investigation and handling of cases,
+and sternly investigated and punished serious violations
+of disciplines and laws. The Bank formulated relevant
+supporting measures, strengthened cooperation between
+ICBC and national supervisory authorities in punishing
+financial corruption, and enhanced the joint force of
+the discipline inspection and supervision departments,
+the internal audit departments and the internal control
+& compliance departments in detecting and punishing
+financial corruption. The Bank established a complete
+four-in-one reporting and acceptance system of "network,
+telephone, letter and visit" and actively unblocked the
+channels of inquiries and complaints. The Bank deepened
+the governance of integrity risk in key areas, conducted
+integrity risk investigation in the Head Office, clarified the
+responsibilities for integrity risk prevention and control
+and improved the joint prevention and control mechanism
+against regulation violations, rule-breaking, legal cases
+and corruption. The Bank actively promoted case-based
+warning education, reinforced warning education and
+publicity by holding bank-wide warning education
+conferences, issuing circulars on typical cases, shooting
+and organising viewings of special warning educational
+films.
+During the reporting period, Deloitte Touche Tohmatsu
+and its member institutions provided the Group with
+non-audit services including professional services for asset
+securitization and bonds issuance etc., and received RMB9
+million for such professional non-audit services.
+reporting and handling violations. It gave full play to the
+role of whistleblowing in supervision, timely discovered
+cases and risk clues, investigated and handled violations,
+so as to maintain business order and protect the legitimate
+rights and interests of whistleblowers.
+During the reporting period, the Bank actively adapted
+to the changes in the risk management conditions,
+increased the allocation of audit resources, refined the
+audit project operation mechanism, and improved audit
+efficiency and value. The Bank continued to consolidate
+the basis for audit management, reinforced the
+institutional development of internal audit policies, and
+further improved internal audit system. The Bank sped
+up the digital transformation of audit, accelerated the
+upgrading of audit information system, and expanded the
+coverage of audit model system. The Bank adhered to the
+closed-loop management of audit findings, deepened the
+governance of the root cause of problems, and enhanced
+the remediation supervision and implementation effects.
+Deloitte Touche Tohmatsu Certified Public Accountants
+LLP1 was the domestic auditors of the Bank for the
+financial statements audit in 2022, and Deloitte Touche
+Tohmatsu was the international auditors of the Bank for
+the financial statements audit in 2022. Deloitte Touche
+Tohmatsu Certified Public Accountants LLP was also the
+auditors of internal control of the Bank in 2022. Deloitte
+Touche Tohmatsu Certified Public Accountants LLP and
+Deloitte Touche Tohmatsu (collectively, the "Deloitte
+Touche Tohmatsu") have rendered audit services for
+the Bank for two consecutive years (2021-2022). KPMG
+Huazhen LLP1 and KPMG¹ resigned from the positions of
+providers of audit services for the Bank after serving a
+maximum term of eight consecutive years from 2013 to
+2020.
+During the reporting period, the Group paid Deloitte
+Touche Tohmatsu and its member institutions a total fee
+of RMB183 million for the audit of financial statements
+(including the audit of financial statements of subsidiaries
+and overseas branches), of which, RMB104 million
+(including fee for internal control audit of RMB8.80 million)
+was paid by the Bank.
+Engagement of Auditors
+Deloitte Touche Tohmatsu Certified Public Accountants LLP and KPMG Huazhen LLP are Recognized Public Interest Entity Auditor
+under Hong Kong's Financial Reporting Council Ordinance. Deloitte Touche Tohmatsu and KPMG are Registered Public Interest Entity
+Auditor under Hong Kong's Financial Reporting Council Ordinance.
+Annual Report 2022
+127
+Corporate Governance Report
+1
+Directors' and Supervisors' Interests in
+Transactions, Agreements or Contracts
+of Significance During the reporting period,
+none of the Directors or Supervisors of the Bank had
+any material interests, whether directly or indirectly, in
+any transaction, arrangement or contract of significance
+regarding the Bank's business to which the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries
+of its controlling shareholders was a party. None of the
+Directors or Supervisors of the Bank have entered into any
+service contract with the Bank, which is not determinable
+by the Bank within one year without payment of
+compensation (other than statutory compensation).
+130
+Management Contracts During the reporting
+period, the Bank did not enter into or have any contract
+regarding the management and administration of the
+whole or any important business.
+Equity-linked Agreement The Bank had no
+equity-linked agreements required to be disclosed by the
+Hong Kong Listing Rules.
+Report of the Board of Directors
+ICBC
+For future planning disclosed in the public disclosure
+documents such as previous offering prospectuses and
+fund raising prospectuses issued by the Bank which has
+continued during the reporting period, its implementation
+progress conformed to the planning as described after
+verification and analysis.
+As at the latest practicable date before the disclosure date
+of the results, the Bank has maintained the minimum
+public float of 23.45%, based on the publicly available
+information and to the best knowledge of the Board of
+Directors of the Bank.
+Use of Proceeds from Fundraising
+Activities
+Major Customers In 2022, the aggregate
+interest income and other operating income from top five
+customers of the Bank did not exceed 30% of the interest
+income and other operating income of the Bank for the
+year.
+Pre-emptive Rights The Articles of Association of
+the Bank does not have any mandatory provision regarding
+pre-emptive rights. Pursuant to the Articles of Association,
+the Bank may increase its registered capital after obtaining
+approval of the Shareholders' General Meeting and of
+relevant authorities, by issuing shares through public or
+non-public offering, issuing bonus shares to the existing
+shareholders, converting capital reserve to share capital
+or using other methods as allowed by applicable laws
+and administrative regulations or approved by relevant
+authorities.
+Purchase, Sale and Redemption of
+Shares During the reporting period, neither the Bank
+nor any of its subsidiaries purchased, sold or redeemed any
+listed shares of the Bank.
+Particulars on the share capital of the Bank for the year
+ended 31 December 2022 are set out in "Note 38. to the
+Consolidated Financial Statements: Share Capital".
+Directors' Interests in Competing
+Business None of the Bank's Directors held any
+interests in any business competes or competed or is or
+was likely to compete, either directly or indirectly, with the
+Bank.
+The funds raised from the Bank's fundraising activities were
+used for the purposes as disclosed in the prospectuses,
+namely, strengthening the capital base to support the
+ongoing business growth of the Bank.
+Directors' and Supervisors' Rights to
+Acquire Shares or Debentures None of
+the Bank, its subsidiaries, its controlling shareholders or
+subsidiaries of its controlling shareholders entered into
+any agreement or arrangement enabling the Directors and
+Supervisors to acquire benefits by means of the acquisition
+of shares in or debentures of the Bank or any other body
+corporate.
+organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the
+employees of the Bank. Upon obtaining all applicable
+approvals, the Bank will implement a long-term incentive
+program. As at 31 December 2022, the Bank had not
+granted any share appreciation rights to any Director,
+Supervisor, Senior Management member, or other core
+business personnel designated by the Board of Directors.
+of the Securities and Futures Ordinance of Hong Kong), or
+any interests or short positions which have to be recorded
+in the register under Section 352 of the Securities and
+Futures Ordinance of Hong Kong, or any interests or short
+positions which have to be notified to the Bank and SEHK
+pursuant to the Model Code for Securities Transactions by
+Directors of Listed Issuers as set out in Appendix 10 to the
+Hong Kong Listing Rules.
+Independent Non-executive Directors:
+Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and
+Mr. Dong Yang;
+As at the disclosure date of the results, the composition of
+the Board of Directors of the Bank is as follows:
+Executive Directors: Mr. Chen Siqing, Mr. Liao Lin,
+Mr. Zheng Guoyu and Mr. Wang Jingwu;
+Non-executive Directors: Mr. Lu Yongzhen,
+Members of the Board of Directors
+Share Capital and Public Float
+Remuneration Policy for Directors,
+Supervisors and Senior Management The
+Bank has clearly documented the remuneration policy
+for Directors, Supervisors and Senior Management
+members, and has continuously improved its performance
+assessment system and incentive restriction mechanism.
+From the perspectives of economic benefit, prevention
+and control of financial risks and support for the real
+economy and social responsibilities, the Bank adopted
+a system composed of the Bank's overall operation and
+management based indicators for the Management and
+duties allocation based indicators for individuals. The
+remuneration to the Chairman of the Board of Directors,
+the President, the Chairman of the Board of Supervisors
+and other executives of the Bank has followed the
+State's policies relating to the remuneration reform on
+executives of central enterprises, which consists of basic
+annual remuneration, performance-based remuneration
+and incentive income linked to term appraisal. The
+remuneration to other Senior Management members
+and Shareholder Supervisors consists of basic annual
+remuneration and performance-based remuneration,
+and part of performance-based remuneration is paid in a
+deferred manner. The Bank has contributed to statutory
+retirement programs organized by Chinese governmental
+Interests in Shares, Underlying Shares,
+and Debentures Held by Directors
+and Supervisors As at 31 December 2022, none
+of the Directors or Supervisors of the Bank had any
+interests or short positions in the shares, underlying
+shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and
+Futures Ordinance of Hong Kong) which have to be
+notified to the Bank and SEHK under Divisions 7 and 8 of
+Part XV of the Securities and Futures Ordinance of Hong
+Kong (including interests or short positions therein that
+they shall be deemed to have pursuant to such provisions
+Relations among Directors, Supervisors
+and Senior Management Directors,
+Supervisors and Senior Management members of the Bank
+are not related to one another with respect to finance,
+business, family, or other material relationships which are
+required to be disclosed.
+131
+Annual Report 2022
+Liability Insurance of Directors,
+Supervisors and Senior Management
+Members Pursuant to the Articles of Association
+of the Bank, where conditions permit, the Bank may
+establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members
+upon approval of the Shareholders' General Meeting.
+The Bank will use its own assets to compensate each
+Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the
+maximum extent permitted by laws and administrative
+regulations or within the scope not prohibited by laws and
+administrative regulations, unless the Directors, Supervisors
+and Senior Management members are otherwise proved
+to have failed to act honestly or in good faith during their
+duty performance. During the reporting period, the Bank
+purchased liability insurance for Directors, Supervisors and
+Senior Management members.
+Please refer to "Note 48. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws,
+regulations and accounting standards of China.
+At the end of the reporting period, the Bank's balance
+of credit connected transactions and the balance of
+non-credit connected transactions under the rules of CBIRC
+amounted to RMB1,838 million and RMB19,996 million,
+respectively.
+Connected Transactions In 2022, the Bank
+carried out standardized management of the Group's
+connected transactions in strict accordance with the
+regulations of CBIRC and CSRC as well as listing rules
+in Shanghai and Hong Kong, and had no connected
+transaction to be submitted to the Board of Directors
+or the Shareholders' General Meeting for review. All
+connected transactions occurred complied with the
+disclosure exemptions under the Listing Rules of the
+Shanghai Stock Exchange and the Hong Kong Listing
+Rules. The disclosure exemptions abided by the provisions
+of SSE for disclosure of connected transactions as well as
+the provisions of SEHK for reporting and announcement of
+connected transactions.
+Report of the Board of Directors
+Subsidiaries Particulars of the Bank's major
+subsidiaries as at 31 December 2022 are set out in the
+sections headed "Discussion and Analysis Business
+Overview" and "Note 25. to the Consolidated Financial
+Statements: Investments in Subsidiaries" in this annual
+report.
+For details on the distribution of dividends on preference
+shares of the Bank, please refer to the section headed
+"Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders Preference Shares".
+Financial Summary The summary of results,
+assets and liabilities for the five years ended 31 December
+2022 is set out in the section headed "Financial
+Highlights" of this annual report.
+2021
+2022
+3.035
+Percentage of cash dividends (1) (%)
+Cash dividends (pre-tax, in RMB millions)
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+2020
+The Bank did not convert any capital reserve to share capital in the last three years. The table below sets out the dividend
+distribution of ordinary shares of the Bank for the last three years:
+The Board of Directors of the Bank proposed distributing
+cash dividends of RMB3.035 (pre-tax) for each ten shares
+of 356,406,257,089 ordinary shares for 2022, totaling
+As approved at the Annual General Meeting for the Year
+2021 held on 23 June 2022, the Bank has distributed cash
+dividends of about RMB104,534 million, or RMB2.933 per
+ten shares (pre-tax) for the period from 1 January 2021
+to 31 December 2021 to the ordinary shareholders whose
+names appeared on the share register after the close of
+market on 11 July 2022.
+The profit and financial status of the Bank during the
+reporting period are presented in the Auditor's Report and
+Financial Statements of the Annual Report.
+Profits and Dividends Distribution
+Principal Business The principal business of
+the Bank and its subsidiaries is the provision of banking
+and related financial services. Please refer to the section
+headed "Discussion and Analysis" for the business review
+of the Bank.
+Report of the Board of Directors
+about RMB108,169 million. The distribution plan will be
+submitted for approval to the Annual General Meeting
+for the Year 2022. Once approved, the above-mentioned
+dividends will be paid to the holders of A shares and H
+shares whose names appeared on the share register of
+the Bank after the close of market on 14 July 2023. The
+Bank will suspend the registration procedures of H share
+ownership transfer on 8 July 2023 (inclusive) through 14
+July 2023 (inclusive). The holders of H shares of the Bank
+that desire to receive the proposed cash dividends but
+have not registered the ownership transfer documents
+are requested to hand over their ownership transfer
+documents together with the H shares to the Bank's H
+share registrar Computershare Hong Kong Investor
+Services Limited that is located at Room 1712-1716,
+17 Floor, Hopewell Center, 183 Queen's Road East,
+Wanchai, Hong Kong no later than 4:30 p.m. of 7 July
+2023. Pursuant to relevant regulatory requirements and
+operational rules, dividends on A shares and H shares will
+be paid on 17 July 2023 and 18 August 2023, respectively.
+For dividend-related tax and tax reduction, please refer to
+the announcements on dividend distribution of the Bank.
+Donations During the reporting period, the Group
+made external donations of RMB128.63 million equivalent.
+2.933
+31.3
+Reserves Details of the
+distributable reserves of the Bank as at 31 December 2022
+are set out in "Note 40. to the Consolidated Financial
+Statements: Reserves" of this annual report.
+Distributable
+The formulation and implementation of the Bank's cash
+dividend policy accords with the provisions stipulated in
+the Articles of Association and the requirements provided
+in the resolutions of the Shareholders' General Meeting,
+the dividend distribution standards and proportion are
+clear and explicit, and the decision-making procedure
+and mechanism are complete. Moreover, Independent
+Non-executive Directors had issued their opinions for it.
+Minority shareholders can fully express their opinions and
+appeals, to completely safeguard their legitimate rights.
+Report of the Board of Directors
+129
+Annual Report 2022
+108,169
+the long-term interest of the Bank, the overall interests of
+all shareholders and the sustainable development of the
+Bank. It emphasizes the priority to adopt cash dividend
+as the profit distribution method and provides that the
+Bank's adjustment to the profit distribution policy shall be
+discussed by the Board of Directors as a special proposal
+and the grounds for adjustment shall be substantiated and
+proved in detail and presented in a written substantiating
+report for Independent Non-executive Directors to issue
+their opinions, and then the report will be submitted
+to the Shareholders' General Meeting for approval as a
+special resolution.
+Formulation and Implementation of Cash
+Dividend Policy
+Mr. Anthony Francis Neoh, Mr. Yang Siu Shun,
+Mr. Shen Si, Mr. Fred Zuliu Hu and
+Mr. Norman Chan Tak Lam.
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the
+parent company for the period.
+30.9
+2.660
+94,804
+104,534
+30.9
+The Articles of Association of the Bank explicitly stipulates
+that the Bank's profit distribution policy shall maintain
+its continuity and stability and meanwhile have regard to
+Industrial and Commercial Bank of China Limited
+Board of Directors
+Consolidation of Achievements in
+ICBC
+The Bank made ongoing efforts to build up its influence
+in green finance. At the side event Banking Initiatives for
+Nature and Climate at the second phase of COP15, it
+shared its experience and practice in financially supporting
+biodiversity and greatly developing green finance. At the
+5th China International Import Expo, the Bank officially
+launched the green finance brand "ICBC Green Bank +".
+Advocating the "harmony, integration and amity" concept,
+the Bank put into full play the leading role as a large bank
+and provided professional, comprehensive and perspective
+financial support for green development to realize "More
+Green Contributions for More Beautiful Home".
+order.
+Efforts were ramped up
+in environmental, social
+and governance (ESG) risk management. The Bank
+comprehensively practiced green and categorized
+management of investment and financing such as loans,
+bonds, wealth management, and leasing. It actively
+furthered the systematic management of ESG risks and
+applied the big data technology for automated risk control
+throughout the credit process. By establishing the mapping
+relation between customers' industry and projects and green
+industries, the Bank combined intelligent system recognition
+and manual verification and rectification to effectively
+improve the efficiency and management of green loan
+identification. Research on climate risk was conducted, and
+regulator-guided stress testing for climate risk proceeded in
+Environmental and Social Responsibilities
+ICBC
+136
+Green Operation
+加更多家更美
+ICBC
+financing policies, and practiced differentiated management
+in various dimensions such as performance assessment, FTP,
+capital at risk, etc. The Bank was guided to make greater
+arrangements for green and low-carbon industries, and
+the carbon-reduction supporting tool as a monetary policy
+was actively applied. Regarding its own operation, the Bank
+rolled out carbon footprint management for its operation
+and took the lead in domestic financial peers to achieve
+information-based management of carbon footprint data,
+realizing digitalized information completion, standardized
+approval, and automated collection.
+The Bank promoted the green adjustment of investment
+and financing structure in a forward-looking manner. It
+highlighted the "green" orientation on all fronts in annual
+industrial investment and financing policies. Corporate
+indicators such as technology, environmental protection
+and energy consumption were included into selection
+criteria for customers and projects in major industries.
+Development of green and low-carbon circular economy
+was greatly supported. Major sectors including clean
+energy, green transportation, energy conservation and
+environmental protection, etc. were identified for active or
+moderate involvement. Efforts were made to strictly control
+blind development of projects of high energy consumption
+and high emission, enhance categorized management of
+customers, and prevent investment and financing risks.
+The Bank advanced the carbon peak and carbon neutrality
+work in a well-coordinated way. It set up the Steering
+Group for Carbon Peak and Carbon Neutrality and released
+the Work Plan for Carbon Peak and Carbon Neutrality of
+ICBC (Trial). With respect to assets, the Bank fully embedded
+low-carbon elements into the investment and financing
+policy system, issued annual industrial investment and
+financing business. Covering the key points of ESG risk
+identification, minimum access standards, outstanding
+standards, and green sectors to grant loans to, the policy
+efficiently made ESG risk prevention and control more
+effective and pertinent.
+The policies and systems on green finance were
+continuously improved. The Bank earnestly carried out the
+Green Finance Guidelines for the Banking and Insurance
+Industries. It issued the Green Guide for Investment and
+Financing of ICBC (Trial), a policy dedicated to green
+finance, to provide an informative operation manual for
+preventing and controlling ESG risks in investment and
+The Bank continued to step up support for green industrial
+investment and financing. As at the end of 2022, the Bank's
+balance of green loans (under the CBIRC's criteria) amounted
+to RMB3,978,458 million, with the total amount and
+increment both surpassed those of other banks. RMB10.0
+billion green finance bond themed carbon neutrality was
+successfully issued, which was the first green finance bond
+themed carbon neutrality of commercial banks in China
+and also the country's first green bond introducing the new
+version of EU-China Common Ground Taxonomy. In addition,
+the Bank successfully issued multi-currency overseas green
+bonds themed "carbon neutrality" globally through Hong
+Kong Branch, Singapore Branch, London Branch, and Dubai
+Branch.
+绿色银行
+The Bank put into use an independently developed
+statistical system for carbon footprint management
+data that supported digitalized information completion,
+standardized approval, and automated collection, laying a
+solid foundation for the Bank to continue with the carbon
+peak and carbon neutrality work. By using the historical
+carbon emission data collected by the statistical system,
+the Bank finished the attribution analysis of historical data,
+unfolded research on carbon peak and carbon neutrality
+in its own operation, and analyzed its potential for energy
+conservation and carbon reduction, offering technical
+support for the low-carbon operation management for the
+next step. Third-party specialists were engaged to verify the
+data through on-site inventory check, document review, etc.
+Committed to "promoting green development, advocating
+green and low carbon, building a green bank", the Bank
+called for paperless office and actively advanced green
+office. During the reporting period, by holding paperless
+meetings online, it saved roughly 19 million sheets of paper,
+totaling around 98 tons in weight.
+Poverty Alleviation and Services for Rural
+Revitalization
+The Bank earnestly implemented the strategy of rural
+revitalization. To "address the country's needs, give full play
+to finance and tap into ICBC strengths", it took financially
+supporting the consolidation and expansion of achievements
+in poverty alleviation and fully advancing rural revitalization
+as important operation responsibilities. The positive progress
+made in rendering financial services for rural revitalization
+was continuously cemented.
+132
+ICBC
+138
+The Bank practically launched concentrated consumer
+protection promotion activities such as "March 15th
+Consumer Protection Publicity Week", "Financial Knowledge
+Publicity Month, Household Financial Knowledge, Be a
+Rational Investor and a Good Financial Internet User",
+"Spreading Financial Knowledge, Protecting Your Pocket"
+and "Publicizing Financial Knowledge to Walk Ten Thousand
+Miles". The efforts were especially directed at key contents
+such as financial fraud prevention, investment and wealth
+management, and personal information protection and
+special groups such as new citizens, the elderly, and rural
+residents with an aim to continuously enhance financial
+literacy and risk prevention capability of the public. The Bank
+integrated the promotion activities with brand services such
+as "ICBC Aixiangban", "ICBC Sharing Station", and "ICBC
+Xingnongtong" and other activities such as "rural customer
+festival", directed the promotion for mutual support with
+operation management and business development, and
+enhanced case and experience-based interactive promotion
+and risk warning to improve the accuracy and effectiveness
+of regular promotion activities. For the elderly population,
+the Bank gave tips for using online and offline self-services
+protection related indicators into the operation performance
+assessment of branches, the evaluation of professional lines,
+and assessment of the Head Office departments, to further
+refine the internal assessment mechanism for consumer
+protection. By giving full play to the early risk-warning and
+prevention functions of consumer-centered contract review,
+the Bank continued to integrate the Civil Code, the Personal
+Information Protection Law and other laws, regulations and
+regulatory requirements into key parts of business such
+as marketing, publicity and information disclosure, and
+enhanced personal information protection and third-party
+partner management to effectively control risks and hazards
+in key sectors. The mechanisms of new product (business)
+access for consumer protection and post-evaluation
+management were studied and set up, and institutional
+measures, products, systems, procedures and services were
+further refined to better protect the rights and interests of
+consumers. The Bank strengthened consumer protection
+in coordination with national efforts of responding to
+population aging, supporting rural revitalization, providing
+better financial service for new citizens, and preventing
+and eliminating financial risks, augmented supply of
+products and services and support in resource input to
+make customers more satisfied and happier with financial
+services. The Bank eased consumers' burden and provided
+emergency service for business handling as per consumer
+demand during the pandemic period to efficiently handle
+the related customer appeals. Through fee reduction and
+profit concessions, financial service for new citizens, etc. in
+the special period of time, the Bank effectively improved the
+service experience of customers.
+The Bank conscientiously implemented the laws, regulations
+and regulatory requirements regarding consumer protection,
+took various measures to improve the consumer protection
+governance system, and comprehensively enhance its
+ability to protect the legitimate rights and interests of
+consumers. It set up the Consumer Protection Committee
+at the Senior Management level as a planning, coordinating
+and organizing body to study and solve major issues with
+the management of consumer protection and customer
+complaints. The Bank developed assessment and evaluation
+measures for consumer protection, which added consumer
+Consumer Protection
+The Bank supported targeted counties and cities to consolidate
+the foundation of poverty alleviation. The anti-poverty fund
+program was rolled out, expanding the coverage to the entire
+rural population and dynamically monitoring the households
+lifted out of poverty and those prone to poverty as key target.
+Support continued to be ramped up in compulsory education,
+housing, drinking water safety, basic medical security, and
+building of rural talent teams. In light of local resource
+endowment, the Bank introduced e-commerce platform
+frontrunners to drive the development of high-quality featured
+industries. The consumer assistance campaign was unfolded in
+combination to help farmers reap higher income sustainably.
+Achievements made in poverty alleviation were further
+consolidated. The Bank made ongoing efforts to consolidate
+and expand the achievements made in poverty alleviation in
+coordination with the extensive drive for rural vitalization. To
+help key counties for national rural revitalization assistance, it
+continued with financial support and made greater efforts in
+favored credit resource allocation, assistance for people lifted
+out of poverty, and driving of specialty industries to help
+areas having overcome poverty develop key fields and address
+weak links. More micro loans were extended to poverty
+elimination and the healthy development of microcredit for
+people lifted out of poverty was facilitated. As at the end
+of December, the Bank had 1,123 outlets in 832 counties
+that overcame poverty, covering 68.6% of the counties,
+and had 152 outlets in 160 key counties for national rural
+revitalization assistance, covering 56.9% of them.
+furthered the "agricultural matchmaking" activity and
+the "serving thousands of villages and accompanying ten
+thousands of households" campaign. Construction of the
+financial ecosystem picked up the pace. Rural financial
+services were further empowered with technology, and
+the "Digital Villages" comprehensive service platform
+was promoted with greater efforts. The ICBC digital and
+intelligent service platform for prosperous agriculture was
+staged to boost the digital service capacity for the rural
+market.
+Environmental and Social Responsibilities
+137
+Annual Report 2022
+The quality and efficiency of agriculture-related financial
+services were fully improved. Focused on key sectors related
+to agriculture and rural areas, the Bank kept solidifying
+the foundation of urban-rural collaborative services,
+initiated the campaign of serving rural revitalization with
+finance, and enlarged agriculture-related financial supply.
+Input of credit resource was stepped up. For key sectors
+such as high-standard farmland, modern seed industry,
+food processing and circulation, and rural infrastructure
+construction, the Bank launched the "Planting e Loan" and
+the "Prosperous Agriculture Industrial Loan". It continued
+to grant more loans and made all-out efforts to increase
+the proportion of mid - and long-term loans to support
+the stable fundamentals of agriculture. The focus of service
+was further shifted to lower-tier market. The building of
+rural service sites for inclusive finance and ICBC messenger
+teams was accelerated, and market promotion of ICBC
+"Xingnongtong" APP was ramped up to advance the
+asset-light and flexible delivery system of rural financial
+service and construct an "online offline" integrated
+agriculture-related service ecosystem. Featured services
+were delivered precisely. The Bank optimized the service for
+new-type agriculture operators and popularized the "credit
+express channel" for them. It offered "thousand chains and
+ten thousands of households" supply chain financial services
+for leading enterprises in agricultural industrialization, and
+areas.
+Environmental and Social Responsibilities
+135
+The Bank put into place and improved the "1+6" new
+framework of financial services for rural revitalization.
+Following the Urban-Rural Collaborative Development
+Strategy, it continued to drive forward building of the
+six basic systems for rural financial services, including
+organization management, fundamental systems, rural
+service delivery, entire product system, categorized execution,
+and unified service brands. The "1+6" basic framework
+of financial services for rural revitalization with ICBC
+characteristics was continuously deepened to advance urban
+support for rural areas and urban-rural complementarity and
+facilitate the extension of financial services further into rural
+In 2022, the Bank firmly implemented the decisions and
+arrangements of the Central Committee of the CPC for
+ecological civilization development and carbon peak and
+carbon neutrality. By fully seizing the opportunities of
+green finance development, it drove forward building
+of the Group's work system in carbon peak and carbon
+neutrality, facilitated the green and low-carbon transition
+of investment and financing structure, and advanced green
+finance development on all fronts such as organizational
+structure, policies and systems, management procedures,
+business innovation, its own performance, and brand
+promotion. With green industrial investment and financing
+surging, the amount of green loans ranked first among
+large commercial banks and their growth was higher
+than the average of various loans for multiple years
+consecutively. Innovation in full-product investment such as
+green bonds, wealth management and funds sped up. The
+environmental and social risks of investment and financing
+were effectively prevented and controlled. Prominent results
+were achieved in prospective study and foreign cooperation
+in green finance. Due to its outstanding contribution in
+green finance, climate finance and financial support for
+biodiversity, the Bank scored the highest in the green bank
+evaluation by CBIRC and China Banking Association and
+was awarded the 2022 Global Green Finance Award
+Innovation Award and the GF60 Green Finance Awards -
+Best Financial Institution Award by domestic and foreign
+media.
+Independent Opinions of the Board of
+Supervisors on Relevant Issues
+Supervision on internal control. The Board of
+Supervisors supervised the soundness and effectiveness
+of the internal control system. It paid close attention to
+the development and operation of relevant policies and
+systems, operation of the internal control mechanism,
+performance of duties by "three lines of defense",
+operation of the supervisory inspection system and
+regulatory penalties, among other aspects. It reinforced
+the supervision of internal control and compliance
+management in key institutions and key areas, with focus
+placed on case prevention, related party transactions,
+consumer protection, AML, IT security and data
+governance, among other aspects. Besides, it closely
+tracked the progress made by overseas institutions
+and integrated subsidiaries in developing their internal
+control mechanisms as well as the weak links spotted in
+key business fields of the Bank with respect to internal
+control, to effectively improve the Group's internal control
+compliance management.
+Report of the Board of Supervisors
+133
+Annual Report 2022
+Financial supervision. The Board of
+supervised the Bank's financial operations as well as
+decisions on and implementation of material financial
+issues. It paid close attention to the major issues
+concerning financial approval and accounting, reform of
+the performance appraisal system, financial compliance
+management, expected credit loss management, and other
+financial management systems and mechanisms of the
+Bank. Meanwhile, it kept track of many issues that could
+impact the business results of the Bank, including the
+stability of deposit growth, growth of non-interest income,
+and interest rate spread movements. It carefully reviewed
+periodic reports, final accounts and profit distribution plan,
+learned about the external audit work, and oversaw and
+evaluated the quality of external audit. With these efforts,
+the Board of Supervisors enabled the Bank to strengthen
+its financial management and allocate resources more
+effectively.
+Compliant Operation During the reporting period,
+the Board of Directors and the Senior Management
+of the Bank continued to operate in compliance with
+applicable laws and regulations, and the decision-making
+procedures complied with applicable laws and regulations
+and the Articles of Association of the Bank. Members
+of the Board of Directors and the Senior Management
+diligently and faithfully performed their duties, and the
+Board of Supervisors did not find any violation of laws
+and regulations, or any circumstance that contravened the
+interests of the Bank in their performance of duties during
+the reporting period.
+Supervisors
+Supervision on the performance of duties. The Board
+of Supervisors supervised the Board of Directors, Senior
+Management and their members on their implementation
+of economic and financial policies rolled out by the Party
+and the state, compliance with the laws and regulations
+and the Articles of Association of the Bank, and execution
+of the resolutions of the Shareholders' General Meeting
+and the Board of Directors as well as the regulatory
+opinions. It paid close attention to how the Group served
+the implementation of major national strategies and
+Performance of the Board of Supervisors. In 2022,
+the Board of Supervisors held six meetings, considered 19
+proposals including proposals on the 2021 work report
+of the Board of Supervisors and assessment report on
+the duty performance, heard 19 reports on the topics
+including the quarterly operation, strategy planning and
+implementation as well as the Group's compliance risk
+and AML management, and reviewed 35 special reports
+including reports on the quarterly supervision and relevant
+surveys of the Board of Supervisors in 2022. The members
+of the Board of Supervisors issued opinions in an objective
+and fair manner, appropriately exercised voting rights, and
+diligently and faithfully fulfilled their duties. They attended
+two Shareholders' General Meetings, and attended 10
+meetings of the Board of Directors and 47 meetings of
+special committees as non-voting attendees. They input
+adequate time and effort in supervisory inspections and
+surveys, and attached equal importance to theoretical
+learning and experience summary from practice, with
+an aim to continuously build up their duty performance
+ability. External supervisors of the Bank worked for more
+than 15 working days in the Bank, complying with the
+relevant requirements.
+During the reporting period, the Board of Supervisors,
+pursuant to relevant laws and regulations, regulatory
+requirements and the Articles of Association, performed
+supervision duties earnestly. It carried out supervision of
+duty performance and due diligence, financial activities,
+risk management, internal control and compliance, etc. in
+a down-to-earth way, while focusing on institutional issues
+and major risks. With its supervisory role in corporate
+governance exploited adequately, the Board of Supervisors
+promoted the legal, compliant operation and development
+across the Bank.
+Work of the Board of Supervisors
+Annual Report 2022
+Report of the Board of Supervisors
+pressed ahead with operational transformation across the
+Bank, focused on a series of key tasks such as "ensuring
+stability on six key fronts" and "maintaining security in
+six key areas", rural revitalization, sci-tech innovation and
+common prosperity, worked hard to help stabilize the
+macro economy, serve the real economy, prevent and
+defuse financial risks, develop inclusive finance and green
+finance, facilitate carbon peak and carbon neutrality, and
+increase funding support for key fields. It ensured the Bank
+could practically perform the responsibilities as a large
+state-owned bank.
+Preparation of Annual Report Preparation and
+review procedures of the Bank's Annual Report were in
+compliance with laws, regulations and regulatory rules.
+Contents of this report reflected the actual conditions of
+the Bank truly, accurately and completely.
+Risk supervision. The Board of Supervisors supervised
+the soundness and effectiveness of the risk management
+system and mechanism. It paid close attention to many
+risk areas such as enterprise-wide risk management,
+capital management, real estate loans, local government
+debts, and risks associated with wealth management
+business, and risks caused by the Russia-Ukraine conflict. It
+supervised capital management, consolidated management
+and stress testing management, tracked changes in major
+risks such as credit risk, market risk and liquidity risk, and
+monitored how risk-related regulatory indicators were
+changed and reached the target. It stepped up offsite
+monitoring efforts, intensified the supervision of risk
+management across different markets, industries, and
+fields, and analyzed and exposed the potential risks and
+hazards as early as possible, thus helping the Group raise
+its enterprise-wide risk management standards.
+Purchase and Sale of Assets During the reporting
+period, the Board of Supervisors did not find any insider
+trading or any circumstance that contravened the
+shareholders' interests or caused the loss of the Bank's
+assets in the process of the Bank's purchase or sale of
+governance-related matters for listed companies. To
+continuously improve the performance capability, the
+directors of the Bank actively participated in various
+thematic trainings in ESG, green finance, anti-money
+laundering, etc. organized by regulators and the Bank.
+The Senior Management of the Bank optimized functions
+of the Green Finance (ESG and Sustainable Finance)
+Committee under the Risk Management Committee and
+made it a supportive decision-making body to support the
+Senior Management to coordinate, lead and advance the
+green finance and ESG work. The Bank revised and issued
+the Basic Regulations on Corporate Social Responsibility
+(ESG and Sustainable Finance) Work (Version 2023) and the
+Administrative Measures for Corporate Social Responsibility
+(ESG and Sustainable Finance) Information Disclosure (Version
+2023).
+The directors were in deep involvement in the ESG
+work. During the reporting period, the directors of the
+Bank attended the ESG training organized by the Listed
+Companies Association of Beijing to study in depth ESG
+Use of Proceeds from Fundraising Activities During
+the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose
+stated in the prospectuses.
+The Board of Directors attached great importance to the
+Bank's environmental, social and governance performance.
+It developed the Bank's strategic development plan fully in
+light of China's 14th Five-Year Plan, advanced implementation
+of the goals for carbon peak and carbon neutrality by the
+Bank, regularly reviewed social responsibility reports, risk
+management reports and other proposals, and enhanced
+supervision and management over ESG matters. During the
+reporting period, it reviewed and approved the Proposal
+on the Strategic Development Plan of ICBC in the 14th
+Five-Year Plan Period, strengthened the building of green
+finance system, enhanced disclosure of ESG information
+and climate finance information and contributed to
+the economic transformation and upgrading and the
+sustainable development of finance. The Board of Directors
+reviewed, adopted and disclosed the 2021 Corporate Social
+Responsibility (ESG) Report of Industrial and Commercial
+Bank of China Limited, communicating to the capital market
+the Bank's practice of its mission as a large bank. In addition,
+paying close attention to ESG development, the Board of
+Directors actively fueled the development of green finance,
+studied in depth the Bank's solutions of building up green
+finance brands, and proposed opinions and suggestions for
+improvement accordingly.
+The Board of Directors of the Bank actively performed its
+role in strategic decision-making and supervision, paid
+close attention to ESG work, made continuous efforts to
+deepen ESG governance and refined the ESG governance
+framework. The Strategy Committee established under the
+Board of Directors was responsible for reviewing annual
+social responsibility report and proposing suggestions to
+the Board of Directors. The Corporate Social Responsibility
+and Consumer Protection Committee under the Board
+of Directors was responsible for listening to the Bank's
+performance of social responsibility in environmental,
+social, governance, precision poverty alleviation and
+corporate culture. It also reviewed the Bank's strategies,
+policies and goals in consumer protection, strategies in
+green finance, development plans on inclusive finance
+business, basic management systems, annual operation
+plans for inclusive finance business, and methods of
+assessment and evaluation, and put forward suggestions
+to the Board of Directors.
+Green Finance
+Environmental and Social Responsibilities
+ICBC
+ESG Governance Framework
+Save as disclosed above, the Board of Supervisors had no
+objection to any other matters during the reporting period.
+Implementation of Information Disclosure
+Rules During the reporting period, the Bank performed
+its duty of information disclosure in compliance with the
+regulatory requirements, implemented the information
+disclosure management rules in earnest, and disclosed
+information in a timely and fair manner. Information
+disclosed was authentic, accurate and complete.
+Review of the Internal Control Assessment
+Report The Board of Supervisors reviewed the 2022
+Internal Control Assessment Report of the Bank and had
+no objection to the report.
+Implementation of Resolutions Passed at the
+Shareholders' General Meeting During the reporting
+period, the Board of Supervisors had no objection to the
+reports or proposals presented by the Board of Directors to
+the Shareholders' General Meeting for consideration. The
+Board of Directors earnestly implemented the resolutions
+approved at the Shareholders' General Meetings.
+Connected Transactions During the reporting period,
+the connected transactions of the Bank were conducted
+on normal commercial terms. The Board of Supervisors
+did not find any circumstance that infringed upon the
+interests of the Bank. The approval, voting, disclosure
+and implementation of connected transactions complied
+with applicable laws and regulations and the Articles of
+Association of the Bank.
+assets.
+134
+47. Commitments and Contingent Liabilities
+187
+11. Operating Expenses
+232
+231
+46. Share Appreciation Rights Plan
+187
+10. Other Operating Income, Net
+44. Transferred Financial Assets
+45. Assets Pledged as Security
+186
+9. Net Gains on Financial Investments
+230
+186
+Net Trading Income
+12. Directors' and Supervisors' Remuneration
+8.
+231
+188
+of the Parent Company
+234
+229
+17. Dividends
+Statement of Changes in Equity
+193
+52. Statement of Financial Position and
+16. Profit Attributable to Equity Holders
+269
+51. Fair Value of Financial Instruments
+48. Related Party Disclosures
+193
+245
+50. Financial Risk Management
+192
+14. Impairment Losses on Assets
+240
+49. Segment Information
+192
+13. Five Highest Paid Individuals
+15. Income Tax Expense
+43. Interests in Structured Entities
+Corporate Information
+Net Fee and Commission Income
+37. Other Liabilities
+162
+Basis of Preparation
+2.
+216
+36. Debt Securities Issued
+162
+216
+219
+35. Due to Customers
+1.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+215
+34. Certificates of Deposit
+215
+33. Repurchase Agreements
+160
+Statement of Cash Flows
+194
+186
+3. Application of the New and
+Amendments to IFRSS
+38. Share Capital
+7.
+228
+42. Cash and Cash Equivalents
+185
+Net Interest Income
+6.
+227
+41. Other Comprehensive Income
+163
+184
+226
+40. Reserves
+5. Significant Accounting Judgements and
+221
+39. Other Equity Instruments
+165
+4. Summary of Significant Accounting Policies
+221
+Estimates
+of the Bank
+Deloitte
+18. Earnings Per Share
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost (continued)
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+ICBC
+146
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls of the ECL model, including the
+selection, approval, and application of ECL
+model methodology, underlying parameters
+updating and periodic validation, input of
+underlying data and parameters, and loan
+staging based on quality of loans and advances
+to customers, cash flow projection used in the
+discounted cash flow method, and the review
+and approval of forward-looking information;
+understood, assessed and tested the
+information technology system and design and
+operating effectiveness of the related controls,
+including general information technology
+controls, data transmission between systems,
+mapping of parameters of the ECL model, and
+system calculation of loss allowance.
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls relating to approval, recording,
+monitoring and regular evaluation of internal
+credit risk ratings which are relevant inputs to
+the ECL model;
+How our audit addressed the key audit matter
+Design and operating effectiveness of key internal
+controls
+Our audit procedures in respect of allowance for
+impairment losses on loans and advances to customers
+measured at amortised cost included the following:
+How our audit addressed the key audit matter
+The management exercised significant judgements and
+estimation in its assessment of allowance for impairment
+losses on loans and advances to customers measured at
+amortised cost. They include the determination of staging
+of loans and advances to customers including determining
+whether the credit risk has increased significantly and
+credit impairment events have occurred; the determination
+of key parameters used in the ECL model including
+probability of default (PD), loss given default (LGD),
+exposure at default (EAD), discount rate, and forward-
+looking information for stage 1 and 2 corporate loans
+and advances, discounted bills and all personal loans and
+advances; the determination of key parameters used in
+discounted cash flow assessment in respect of stage 3
+corporate loans and advances including recoverable cash
+flows and discount rates.
+As at 31 December 2022, the Group's loans and
+advances to customers measured at amortised cost was
+RMB22,107,213 million, and the related impairment
+allowance was RMB672,224 million.
+The Group uses the expected credit loss ("ECL") model
+to calculate the loss allowance for loans and advances to
+customers measured at amortised cost in accordance with
+IFRS 9.
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost
+Key audit matter
+Key audit matters (continued)
+(1)
+Due to the significance of allowance for impairment (2)
+losses on loans and advances to customers measured
+at amortised cost and the significant judgements and
+estimation exercised by management in estimating ECL,
+we identified this as a key audit matter.
+Refer to Note 4 (10), Note 5, Note 14, Note 23, and Note
+50(a) to the consolidated financial statements for relevant
+disclosures.
+ECL model
+ICBC
+148
+performed credit assessments on borrower's
+and guarantor's financial information,
+collateral valuation and other sources of
+repayment for the selected stage 3 corporate
+loans and advances, tested the recalculation
+of impairment allowance based on the
+recoverable cash flows and discount rates,
+and evaluated whether there was any material
+misstatement.
+analysed the borrower's financial and non-
+financial information, and other available
+information, and evaluated the reasonableness
+of management's judgement on staging,
+including whether credit risk has increased
+significantly since initial recognition and
+whether credit impairment events have
+occurred by reviewing the credit files,
+interviewing management, independently
+searching for publicly available information
+and exercising professional judgement;
+Risk based sample selection for credit review
+selected samples for credit review by focusing
+on industries that are significantly affected
+by fluctuations of economic cycle and policy
+regulations, regions with high credit risk
+exposure, and loans with other high-risk
+characteristics such as non-performing loans,
+overdue performing loans, rescheduled loans
+and borrowers with negative publicity;
+•
+(3)
+How our audit addressed the key audit matter
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost (continued)
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+147
+Annual Report 2022
+performed back-testing, and verified the
+results of the model using actual observable
+data, and evaluated whether there was any
+indication of management bias.
+assessed the reasonableness of the selection of
+economic indicators, the weighting of multiple
+macro-economic scenarios, and other inputs
+and assumptions used by management in the
+forward-looking adjustments; assessed the
+reasonableness of forecasted macro-economic
+and industry indicators by comparing to
+available third party information, and reviewed
+the sensitivity analysis of economic indicators;
+verified, on a sample basis, the calculation of
+ECL model, and tested whether the model
+reasonably reflected management's modelling
+methodology;
+verified, on a sample basis, the accuracy of
+ECL model data input such as loan agreement
+amount, due date, interest rate, guarantee
+method;
+assessed the internal credit risk rating
+benchmark used in the ECL model by reviewing
+its periodic validation and monitoring report to
+evaluate the reasonableness of the validation
+approach, completeness of the validation
+scope and accuracy of the validation, and
+selected samples to verify the accuracy of
+internal rating calculation;
+assessed the reliability and appropriateness
+of the ECL model and the reasonableness of
+key parameters used in the model, including:
+PD, LGD, EAD, discount rate, forward-looking
+information, and evaluated the rationality of
+the key management judgements on those key
+parameters;
+Independent Auditor's Report
+276
+145
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
+opinion on these matters.
+278
+TO THE CONSOLIDATED FINANCIAL STATEMENTS
+UNAUDITED SUPPLEMENTARY INFORMATION
+196
+21. Derivative Financial Instruments
+277
+Statements
+195
+22. Reverse Repurchase Agreements
+Financial Institutions
+20. Due From Banks and Other
+277
+54. Comparative Amounts
+195
+19. Cash and Balances with Central Banks
+277
+53. Events after the Reporting Period
+194
+55. Approval of the Consolidated Financial
+199
+23. Loans and Advances to Customers
+200
+Key audit matters
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the Code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code"), and we have fulfilled our other ethical responsibilities
+in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
+a basis for our opinion.
+Basis for opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
+31 December 2022, and of its consolidated financial performance and its consolidated cash flows for the year then ended
+in accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank")
+and its subsidiaries (collectively referred to as the "Group") set out on pages 154 to 277, which comprise the consolidated
+statement of financial position as at 31 December 2022, the consolidated statement of profit or loss, the consolidated
+statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
+consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other
+explanatory information.
+Opinion
+To the Shareholders of Industrial and Commercial Bank of China Limited
+(Incorporated in the People's Republic of China with limited liability)
+德勤
+215
+Independent Auditor's Report
+ICBC
+144
+208
+Joint Ventures
+26. Investments in Associates and
+206
+25. Investments in Subsidiaries
+202
+24. Financial Investments
+Annual Report 2022
+Fair Value through Profit or Loss
+Internal departments of the Head Office
+Statement of Changes in Equity
+Committee
+Strategy
+Internal Audit
+Sub-bureau
+Office
+Board of Directors'
+ICBC
+142
+141
+Board of
+Annual Report 2022
+Participation in Investing in National Green Development Fund Co., Ltd. In July 2020,
+the Bank signed the Promoter's Agreement of the National Green Development Fund Co., Ltd. In April 2021, upon the
+approval of CBIRC, the Bank planned to contribute RMB8.0 billion to National Green Development Fund Co., Ltd., which
+shall be paid by instalments. In May 2021, the Bank completed the first contribution of RMBO.8 billion. In December 2022,
+the Bank completed the first tranche of RMB1.0 billion for the second contribution. For details on the investment, please
+refer to the announcements published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the
+website of the Bank.
+As at 31 December
+2022, SSF strictly
+fulfilled the above
+commitment and
+did not do anything
+in violation of the
+commitment.
+commitment.
+did not do anything
+in violation of the
+As at 31 December
+2022, Huijin strictly
+fulfilled the above
+commitment and
+Fulfillment of
+commitment
+Provided that Huijin continues to hold any share of the
+Bank or is deemed as the controlling shareholder of the
+Bank or the related party of the controlling shareholder of
+the Bank according to the laws or listing rules of China or
+the listing place of the Bank, Huijin will not engage in or
+participate in any competitive commercial banking business
+including but not limited to granting loans, attracting
+deposits and providing settlement, fund custody, bank
+card and money exchange services. However, Huijin can
+engage in or participate in some competitive businesses by
+investing in other commercial banks. In this regard, Huijin
+has committed that it will: (1) fairly treat the investments
+in commercial banks and will not make any decision or
+judgment that will have adverse impact on the Bank or be
+beneficial to other commercial banks by taking advantage
+of the status of being a shareholder of the Bank or
+information obtained by taking advantage of the status
+of being a shareholder of the Bank; and (2) perform the
+shareholders' rights for the maximum interests of the Bank.
+According to the Notice of the State Council on Issuing the
+Implementation Plan for Transferring Part of State-Owned
+Capital to Fortify Social Security Funds (Guo Fa [2017] No.
+49), SSF shall perform the obligation of more than 3-year
+lock-up period as of the date of the receipt of transferred
+shares.
+Commitment
+Disciplinary Actions During the reporting period, the Bank was not subject to any case filing investigation for
+suspected crime, nor was any of its controlling shareholders, Directors, Supervisors and Senior Management members
+subject to coercive measures for suspected crime; neither the Bank nor its controlling shareholders, Directors, Supervisors
+and Senior Management members were subject to any criminal penalty or any case filing investigation by CSRC for
+suspected illegality or irregularity or administrative penalty by CSRC or material administrative penalty by other competent
+authority; none of its controlling shareholders, Directors, Supervisors and Senior Management members was held in
+retention by the disciplinary inspection and supervision organ because of suspected serious illegality or irregularity or
+work-related crime, which affected their duty performance; none of its Directors, Supervisors and Senior Management
+members was subject to coercive measures taken by other competent authority for suspected illegality or irregularity, which
+affected their duty performance; neither the Bank nor any of its controlling shareholders, Directors, Supervisors and Senior
+Management members was subject to any administrative or regulatory measures taken by CSRC or disciplinary sanction
+imposed by stock exchanges.
+Simplified Report of Changes
+in Equity of National Council
+for Social Security Fund
+Directors
+Compensation
+Committee
+Promotion
+Committee
+Personal Banking
+Risk Management
+Committee
+Asset & Liability
+Management
+Committee
+Supervisory Board
+Office
+Board of
+Supervisors
+Senior Management
+institutions of the Head Office
+Risk Management
+Committee
+Internal departments and directly managed
+Internal Audit Bureau
+US Risk Committee
+Committee
+Related Party
+Transactions Control
+Nomination
+Committee
+Responsibility and Consumer
+Protection Committee
+Corporate Social
+Audit Committee
+Shareholders'
+General Meeting
+Financial Technology Consumer Protection
+and Digital Development
+Committee
+commitment is made
+Prospectus of Industrial and
+Commercial Bank of China
+Limited on Initial Public
+Offering (A Share)
+Prospectus on A Share
+Rights Issue of Industrial and
+Commercial Bank of China
+Limited
+Taking effect from
+December 2019/Above
+three years
+Material Contracts and Performance of
+Obligations thereunder
+Please refer to "Note 48. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws
+and regulations of China and the relevant accounting
+standards.
+Credit Standing During the reporting period,
+neither the Bank nor its controlling shareholders had
+ever failed to fulfil obligations provided in effective legal
+documents issued by court for material lawsuits, nor had
+there been any outstanding debt of significant amount.
+Material Assets Acquisition, Sale and
+Merger During the reporting period, the Bank had no
+material assets acquisition, sale or merger.
+Material Lawsuits or Arbitration
+Cases During the reporting period, the Bank incurred
+no material lawsuits or arbitration cases. It was involved in
+several legal lawsuits and arbitration in its ordinary course
+of business. Most of these cases were initiated by the
+Bank to recover non-performing loans, while some were
+related to disputes with clients. As at 31 December 2022,
+the amount of cases pending judgements or arbitrations
+awards in which the Bank and/or its subsidiaries are
+defendants totaled RMB4,738 million, and the Bank
+does not expect any material adverse effect from the
+above-mentioned cases on the Bank's business, financial
+position or operating results.
+Significant Events
+139
+Annual Report 2022
+Material Trust, Sub-contract and Lease During
+the reporting period, the Bank had not held on trust
+to a material extent or entered into any material
+sub-contract or lease arrangement in respect of assets
+of other corporations, which were subject to disclosure,
+and no other corporation had held on trust to a material
+extent or entered into any material sub-contract or lease
+arrangement in respect of the Bank's assets, which were
+subject to disclosure.
+To present a more accurate picture of customer complaints, the Report has deleted repeated complaints and complaints about the
+"Card Close Action" against new-type cyber-telecom crimes in reporting the number of individual customer complaints in 2022.
+Scan for access to the 2022 Corporate Social Responsibility
+(ESG) Report of Industrial and Commercial Bank of China
+Limited
+For details of the Bank's fulfillment of corporate social
+responsibilities, please refer to the 2022 Corporate Social
+Responsibility (ESG) Report of Industrial and Commercial
+Bank of China Limited published by the Bank on the website
+of SSE, the "HKEXnews" website of HKEX and the website
+of the Bank.
+In 2022, the Bank received 238,400 complaints from
+individual customers', averaged at 1,524 complaints from
+individual customers every 100 outlets and 3,293 every
+10 million individual customers. By type of business, the
+complaints were concentrated in credit cards and personal
+banking. Specifically, the complaints in credit cards
+were mainly about repayment negotiations, automobile
+installments, interest and fee disputes, and credit records,
+while those in personal banking were mainly about
+account control, personal housing loans, and savings
+deposit. By region, the complaints were mainly distributed
+in Guangdong, Hebei, Beijing, Henan, and Shandong.
+According to statistics released by the Financial Consumer
+Protection Bureau, PBC, among the complaints accepted
+by the PBC institutions at various levels in 2022, the Bank
+ranked fourth among six large state-owned commercial
+banks in terms of number of complaints every 100 outlets
+(in descending order by quantity, similarly hereinafter) and
+ranked sixth among the six banks in terms of number of
+complaints every RMB100 billion assets.
+mechanisms and enhance responsibility supervision and
+implementation at various links, so as to solve contradictions
+and disputes immediately and on the spot. The Bank sped
+up in promoting the smart governance approaches for
+customer complaints and actively introduced big data,
+artificial intelligence, and other technology measures to
+upgrade functions of the complaint management system
+and pursue greater effects in complaint governance.
+Remaining true to its original aspiration of finance for
+the people, the Bank continued to improve the complaint
+governance capability and efficiently solved the most
+pressing difficulties and problems that were of great concern
+to customers. Amid its efforts of building a bank that the
+people are satisfied with, the Bank recorded a surveyed
+customer satisfaction rate of 90.43%. In the "Management
+Year for Complaints from Individual Customers" campaign,
+it focused on most complained issues in personal banking,
+credit cards and other major fields and implemented
+root-cause rectification in terms of rules and regulations
+formulation, products improvement, processes optimization
+and systems refinement to fully refine customer services.
+Follow-up evaluation of the effects of complaint governance
+was conducted, and the root-cause governance measures
+were further optimized in greater details to provide financial
+services of excellent quality. Ongoing efforts were made to
+improve the complaint response, handling and feedback
+The Bank organized serial trainings on consumer protection
+review, customer complaint management, and consumer
+protection, focusing on key fields such as personal banking,
+credit cards, and Internet finance and key contents such as
+business marketing and promotion and personal information
+protection. The trainings were intended to standardize
+behaviors of related institutions and personnel in business
+operation and service and help improve the customer
+satisfaction and their experience in having their appeals
+handled. Consumer protection trainings, mainly real-world
+scenario and case-based ones, were especially stepped
+up for outlets and key positions to boost the consumer
+protection awareness and capability of pertinent institutions
+and personnel. Quality courses of the Head Office and
+branches on consumer protection were made available at
+the internal training platform of the Bank to get customer
+managers, customer service managers, wealth management
+managers, and new employees updated of consumer
+protection knowledge and normative requirements in
+business operation and further solidify the basis of consumer
+protection throughout the Bank.
+such as the "Happy Life" version of mobile banking and the
+elderly version of smart terminals, promoted elderly-oriented
+facilities at outlets, and popularized financial knowledge
+closely tied with the elderly life such as prevention of illegal
+fund-raising, pension frauds and illegal financial advertising,
+to help the elderly enhance the risk awareness, protect their
+pocket and cross the "digital gap" at ease.
+Environmental and Social Responsibilities
+1
+Legal document under which the
+Material Guarantees The provision of guarantees
+is in the ordinary course of business of the Bank. During
+the reporting period, the Bank did not have any material
+guarantee that needs to be disclosed except for the
+financial guarantee services within the business scope as
+approved by PBC and CBIRC.
+Other Material Contracts During the reporting
+period, the Bank did not have any other material contracts
+which were subject to disclosure.
+Commitment of
+performing the
+obligation of lock-
+up period for A
+shares
+SSF
+November 2010/No
+specific term
+term
+Time and term of
+commitment
+October 2006/No specific
+Type of
+commitment
+Commitment of
+non-competition
+Huijin
+Shareholder
+Implementation of Share Incentive Plan
+and Employee Stock Ownership Plan
+during the Reporting Period During the
+reporting period, the Bank did not implement any share
+incentive plan or any employee stock ownership plan.
+As at 31 December 2022, all of the continuing commitments made by the shareholders were properly fulfilled and were
+listed as follows:
+Significant Events
+ICBC
+140
+Occupation of Fund by Controlling
+Shareholders and Other Related
+Parties During the reporting period, none of the
+controlling shareholders and other related parties of the
+Bank occupied any fund of the Bank for non-operating
+purpose. The auditors have issued the Special Explanation
+on the Occupation of Fund by Controlling Shareholders
+and Other Related Parties of Industrial and Commercial
+Bank of China Limited in 2022.
+During the reporting period, the Bank did not enter into
+any material related party transactions.
+Material Related Party Transactions
+External Guarantees During the reporting
+period, the Bank did not enter any guarantee contract
+against the resolution procedures for external guarantees
+that are prescribed by laws, administrative regulations or
+CSRC.
+Key Audit Matters The Audit Committee has
+reviewed the key audit matters in the audit report
+and concluded that it is unnecessary to provide a
+supplementary explanation.
+Commitments
+Committee
+Financial Assets Service
+Management
+Committee
+Corporate &
+Investment Banking
+Pages
+Pages
+Contents
+JE
+TMJ
+1
+Financial Statements
+Auditor's Report and
+INDEPENDENT AUDITOR'S REPORT
+Secondary reporting line
+Directly managed institutions of the Head Office
+Rural Banks
+ICBC Wealth
+Management
+ICBC Investment
+ICBC-AXA
+ICBC Credit Suisse
+Asset Management
+ICBC Leasing
+Overseas Subsidiaries and their
+Institutions (362)
+Primary reporting line
+Overseas Branches and their
+Institutions (54)
+145
+209
+32. Financial Liabilities Measured at
+156
+Statement of Financial Position
+214
+Institutions
+155
+Other Comprehensive Income
+31. Due to Banks and Other Financial
+27. Property and Equipment
+214
+154
+Statement of Profit or Loss
+Statement of Profit or Loss and
+212
+29. Other Assets
+Consolidated:
+210
+28. Deferred Tax Assets and Liabilities
+AUDITED FINANCIAL STATEMENTS
+30. Impairment Allowance
+(15,386)
+Grassroots Branches
+(458)
+Business Department
+Asset Management
+Department
+Global Market
+Department
+Bank Card Department
+Operation
+Management
+Department
+Information
+Management
+Department
+Corporate
+Culture
+Department
+Department (Consumer
+Protection Office)
+Finance & Accounting
+Institutional Banking
+Department
+Personal Banking
+Department
+Domestic
+Branches
+Internal Control &
+Corporate
+Banking
+Department
+Executive Office
+Organizational Chart
+Domestic Institutions
+Promotion Committee Promotion Committee
+Institutional Banking
+Promotion Committee
+Rural Revitalization
+Inclusive Finance and
+Risk Management
+Asset Custody
+Department
+ICBC Bills Discounting
+D
+Tier-two Branches
+(36)
+(including Directly Managed Branches)
+Tier-one Branches
+Domestic
+Subsidiaries and
+their Branches
+Development Center
+Business Research &
+Development Center
+Hangzhou Institute
+of Financial Managers
+Changchun Institute
+of Financial Managers
+Department
+Special Financing
+Department
+(Banking Department)
+Pension Business
+Department
+Investment Banking
+Security Department
+Retired Staff Service and
+Management
+Department
+Staff Union Working
+Committee
+Party-related
+Affairs
+Department
+Modern Finance
+Research Institute
+Inspection Office of
+the Party Committee
+Financial Technology
+Department
+Corporate Strategy and
+Investor Relations
+Human Resources
+Credit and Investment
+Management
+Department
+Credit Approval
+Department
+Internet Finance
+Department
+Inclusive Finance
+Department (Rural
+Revitalization Office)
+Settlement & Cash
+Management
+Department
+158
+Overseas Institutions
+Attributable to equity holders of the parent company
+Reserves
+Deloitte Touche Tohmatsu
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance
+in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
+describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when,
+in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Wu Wei Jun, David.
+Certified Public Accountants
+Hong Kong
+30 March 2023
+Annual Report 2022
+153
+Consolidated Statement of Profit or Loss
+For the year ended 31 December 2022
+(In RMB millions, unless otherwise stated)
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements
+or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
+obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease
+to continue as a going concern.
+Notes
+2021
+Interest income
+Interest expense
+NET INTEREST INCOME
+Fee and commission income
+60
+60
+69
+1,280,376
+1,162,218
+(586,689)
+2022
+(471,538)
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+•
+understood, assessed and tested the design and
+operating effectiveness of controls over cyber
+security management mechanism, the operational
+security of key information infrastructure, data and
+customer information management, and system
+operation monitoring and emergency management.
+Annual Report 2022
+151
+Independent Auditor's Report
+Other information
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
+and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
+statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+Responsibilities of the directors for the consolidated financial statements
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for
+such internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or error.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
+Group's internal control.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+Auditor's responsibilities for the audit of the consolidated financial statements
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
+free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion
+solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other
+person for the contents of this report.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+152
+ICBC
+Independent Auditor's Report
+Auditor's responsibilities for the audit of the consolidated financial statements (Continued)
+•
+•
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+693,687
+690,680
+145,818
+(236,227)
+Impairment losses on assets
+14
+(182,419)
+(202,623)
+OPERATING PROFIT
+418,138
+422,030
+Share of results of associates and joint ventures
+4,427
+158
+(240,884)
+PROFIT BEFORE TAXATION
+424,899
+Income tax expense
+15
+(61,527)
+(74,683)
+PROFIT FOR THE YEAR
+361,038
+350,216
+Profit for the year attributable to:
+Equity holders of the parent company
+Non-controlling interests
+422,565
+11
+Operating expenses
+Foreign
+148,727
+Fee and commission expense
+7
+(16,553)
+(15,703)
+NET FEE AND COMMISSION INCOME
+7
+129,265
+133,024
+Net trading income
+8
+8,610
+8,955
+Net gains on financial investments
+9
+6,315
+16,440
+Other operating income, net
+10
+O
+3,564
+11,781
+OPERATING INCOME
+841,441
+860,880
+understood, assessed and tested the design and
+operating effectiveness of key internal controls of
+the IT systems relevant to financial reporting;
+understood, assessed and tested the design and
+operating effectiveness of automated controls
+relevant to significant accounts and assertions or risk
+of material misstatement, and such IT automated
+controls include accuracy of system calculation
+logic and consistency of data transmission, covering
+business in corporate banking, personal banking,
+and financial markets, as well as financial reporting
+process;
+•
+Our audit procedures in respect of IT systems and controls
+over financial reporting included the following:
+How our audit addressed the key audit matter
+Appropriation to surplus reserve (i)
+Appropriation to general reserve (ii)
+Distributions to other equity instrument
+holders (Note 17)
+(Note 17)
+Dividends-ordinary shares 2021 final
+1,144 357,855
+(3,772) 360,483 356,711
+(2,294)
+20,808 1,256
+(23,542)
+Total comprehensive income
+Subtotal profits Total interests equity
+926,375 1,620,642 3,257,755 17,503 3,275,258
+360,483 360,483 555 361,038
+(3,772) 589 (3,183)
+35,318
+(3,772)
+1,256
+20,808
+(23,542)
+Other comprehensive income
+Profit for the year
+(4,243) 1,165
+Total
+controlling
+Retained
+Other
+reserve reserves
+reserve reserve reserve
+438,952 24,628 (39,999)
+(2,294)
+57,767
+Dividends to non-controlling shareholders
+Other comprehensive income
+transferred to retained earnings
+The accompanying notes form part of these consolidated financial statements.
+Includes the appropriation to general reserve made by subsidiaries in the amounts of RMB4, 196 million.
+(ii)
+Includes the appropriation to surplus reserve made by overseas branches and subsidiaries in the amounts of RMB68 million
+and RMB907 million, respectively.
+(i)
+767 (17,241) (2,987) (1,129) 1,016,896 1,767,537 3,495,171 18,655 3,513,826
+356,407 354,331 148,280 392,487 496,719
+Balance as at 31 December 2022
+85
+36
+49
+1,527 (1,478)
+1,950
+(423)
+Other
+(319) 319
+(319)
+(28)
+20
+57,767 (57,767)
+35,318 (35,318)
+(14,810)
+(14,810) (14,810)
+(104,534)
+(104,534) (104,534)
+357,169
+PROFIT FOR THE YEAR
+148,703
+356,407
+Key audit matter
+Fair value of financial instruments
+The valuation of the Group's financial instruments
+measured at fair value is based on readily available market
+data or valuation models. For financial instruments without
+readily available market data such as debt securities,
+equities, over-the-counter derivative contracts and
+structured deposits, fair values are measured based on
+valuation techniques. The selection of valuation techniques
+and significant unobservable input data requires significant
+accounting judgement and estimation by management.
+As at 31
+December 2022, the Group's financial
+assets that were measured at fair value amounted to
+RMB4,293,735 million, representing 10.84% of total
+assets; financial liabilities that were measured at fair value
+amounted to RMB540,849 million, representing 1.50%
+of total liabilities. Level 3 financial assets and liabilities
+with significant unobservable input data amounted to
+RMB156,343 million and RMB3,496 million respectively.
+We identified fair value assessment of financial instruments
+as a key audit matter because the amount involved is
+significant and the valuation requires significant judgement
+and estimation, and particularly for level 3 financial
+instruments.
+Refer to Note 4(7), Note 5, Note 21, Note 22, Note 23,
+Note 24, Note 32, and Note 51 to the consolidated
+financial statements for relevant disclosures.
+How our audit addressed the key audit matter
+Our audit procedures in respect of fair value assessment of
+financial instruments included the following:
+Understood, assessed and tested the design and operating
+effectiveness of internal controls relating to the valuation
+of financial instruments, independent pricing validation,
+and valuation model validation and approval.
+Selected samples to perform the following audit
+procedures:
+Key audit matters (continued)
+•
+evaluated the appropriateness of the Group's
+valuation techniques, inputs and assumptions for
+level 2 and 3 financial instruments, and compared
+the observable market data with publicly available
+market data;
+assessed and verified the valuation techniques used
+in the valuation of complex financial instruments
+valuation, selected samples to perform independent
+valuation and compared the results with the Group's
+valuation.
+150
+ICBC
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+IT systems and controls over financial reporting
+As a large banking group, the Group's IT systems are
+complex.
+To ensure the accuracy of financial reports, IT over
+financial reporting and its related general controls and
+automated controls are required to be designed and
+operated effectively. The related general controls include
+IT governance, controls over program development and
+changes, access to programs and data and IT operations.
+Automated controls include system calculations and data
+logic relating to significant accounts, as well as interfaces
+between business management systems and accounting
+systems.
+With the rapid increase in the volume of on-line
+transactions of the Group, as well as the continuous
+development and application of new technologies and
+open banking that increased third party network access,
+the Group faces increasing challenges on cyber security
+and data protection that warrant close monitoring of their
+potential impact on financial reporting related IT systems.
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are highly
+reliant on complex IT systems and control processes,
+and the IT systems are required to serve the Group's
+global customer base, handle large volumes of frequent
+transactions, and continue to develop in response to
+changing business needs and technological change
+accelerating.
+evaluated the fair value of level 1 financial
+instruments by comparing the fair value with publicly
+available market observable data;
+Independent Auditor's Report
+149
+Annual Report 2022
+Balance as at 1 January 2022
+reserve
+reserve
+hedging
+General revaluation translation
+Share equity Capital Surplus
+capital instruments
+Non-
+Investment currency Cash flow
+Other
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+Consolidation of structured entities
+Structured entities mainly include wealth management
+products, investment funds, trust plans, asset management
+plans and asset-backed securities in which the Group has
+interests in them through their initiation, management or
+investment.
+In determining whether the Group has control and
+therefore should consolidate a structured entity,
+management is required to consider the power it
+possesses, its exposure to variable returns, and its ability
+to use its power to affect returns. The Group is required
+to collectively consider the relevant facts and substance to
+assess whether it has control over the structured entity.
+How our audit addressed the key audit matter
+Our audit procedures in respect of consolidation of
+structured entities included the following:
+Understood, assessed and tested the related design and
+operating effectiveness of the internal controls relating to
+the consolidation of structured entities.
+We identified the consolidation of structured entities as a
+key audit matter because the amount involved is significant
+and the evaluation on whether the Group has control •
+over the structured entities requires significant accounting
+judgement.
+Refer to Note 4(2), Note 5 and Note 43 to the consolidated
+financial statements for relevant disclosures.
+Selected samples to perform the following audit
+procedures:
+inspected agreements relating to the structured
+entity and understood the purpose of its set
+up; assessed the power the Group has over the
+structured entity according to the Group's rights and
+obligations under different transaction structures and
+its involvement with the structured entity;
+verified the analysis on the Group's variable
+return which includes, but is not limited to, fixed
+management fee and performance fees obtained
+through acting as asset manager, as well as the
+returns obtained from holding an interest in a
+structured entity, and providing liquidity support or
+other support;
+analysed the scope of the Group's decision-
+making power over the structured entity, the level
+of remuneration obtained from providing asset
+management services, the risk of variable return
+borne by holding other interests in the structured
+entity and the substantive rights held by other
+participants, checked the Group's analysis on the
+magnitude and variability of variable return, and
+assessed whether the Group acts as principal or
+agent in the structured transaction;
+assessed
+the management's decision on the
+consolidation of structured entities through carrying
+out the above procedures.
+354,331
+360,483
+2,869
+555
+32
+64,126
+87,180
+Derivative financial liabilities
+21
+96,350
+71,337
+Repurchase agreements
+33
+574,778
+365,943
+Financial liabilities measured at fair value through profit or loss
+Certificates of deposit
+375,452
+290,342
+Due to customers
+Income tax payable
+Debt securities issued
+35
+29,870,491
+26,441,774
+85,581
+92,443
+36
+34
+2,921,029
+39,723
+145,781
+3,185,564
+27
+293,887
+290,296
+Deferred tax assets
+28
+101,600
+79,259
+Other assets
+TOTAL ASSETS
+29
+605,684
+39,609,657
+348,338
+707,862
+35,171,383
+The accompanying notes form part of these consolidated financial statements.
+156
+ICBC
+Consolidated Statement of Financial Position
+As at 31 December 2022
+(In RMB millions, unless otherwise stated)
+Notes 31 December 2022 31 December 2021
+LIABILITIES
+Due to central banks
+Due to banks and other financial institutions
+31
+905,953
+Property and equipment
+791,375
+37
+1,767,537
+1,620,642
+3,495,171
+3,257,755
+Non-controlling interests
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+18,655
+3,513,826
+17,503
+3,275,258
+39,609,657
+Retained profits
+35,171,383
+Chairman
+Liao Lin
+Vice Chairman
+and President
+Wang Gang
+Person in charge of
+Finance and Accounting Department
+The accompanying notes form part of these consolidated financial statements.
+Annual Report 2022
+157
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2022
+(In RMB millions, unless otherwise stated)
+Chen Siqing
+926,375
+1,016,896
+40
+3,800
+787,955
+5,624
+789,355
+36,095,831
+31,896,125
+Deferred tax liabilities
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+Equity attributable to equity holders of the parent company
+Share capital
+38
+356,407
+356,407
+Other equity instruments
+39
+354,331
+354,331
+Preference shares
+134,614
+134,614
+Perpetual bonds
+219,717
+219,717
+Reserves
+40
+28
+61,782
+ICBC
+26
+(12,353)
+21,345
+(v) Foreign currency translation reserve
+541
+(313)
+(iv) Other comprehensive income recognised under the equity
+method
+(vi) Other
+442
+(iii) Cash flow hedging reserve
+1,827
+3,831
+(ii) Credit losses of debt instruments measured at fair value through
+other comprehensive income
+1,623
+(24,375)
+1,284
+(i) Changes in fair value of debt instruments measured at fair value
+through other comprehensive income
+(1,975)
+Subtotal of other comprehensive income for the year
+342,044
+357,855
+1,955
+1,144
+Non-controlling interests
+340,089
+885
+356,711
+Total comprehensive income for the year attributable to:
+342,044
+357,855
+Total comprehensive income for the year
+(8,172)
+(3,183)
+Equity holders of the parent company
+The accompanying notes form part of these consolidated financial statements.
+28
+15
+0.97
+18
+0.95
+0.97
+18
+ICBC
+0.95
+154
+- Diluted (RMB yuan)
+-
+- Basic (RMB yuan)
+EARNINGS PER SHARE
+1,878
+350,216
+361,038
+The accompanying notes form part of these consolidated financial statements.
+13
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+(In RMB millions, unless otherwise stated)
+(25)
+(1,180)
+(2,968)
+41
+350,216
+2021
+For the year ended 31 December 2022
+2022
+361,038
+(b) Items that may be reclassified subsequently to profit or loss:
+(ii) Other comprehensive income recognised under the equity method
+(iii) Other
+(i) Changes in fair value of equity instruments designated as at fair
+value through other comprehensive income
+(a) Items that will not be reclassified to profit or loss:
+Other comprehensive income (after tax, net):
+Profit for the year
+Note
+65,878
+Annual Report 2022
+Consolidated Statement of Financial Position
+23
+663,496
+24
+10,527,292
+Investments in associates and joint ventures
+6,830,933
+7,634,395
+Financial investments measured at amortised cost
+1,803,604
+2,178,018
+other comprehensive income
+Financial investments measured at fair value through
+155
+623,223
+714,879
+Financial investments measured at fair value through
+profit or loss
+20,109,200
+9,257,760
+76,140
+87,205
+864,067
+22,593,648
+827,150
+As at 31 December 2022
+(In RMB millions, unless otherwise stated)
+ASSETS
+Notes
+31 December 2022
+21
+Cash and balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+31 December 2021
+Loans and advances to customers
+Financial investments
+222222
+19
+20
+3,427,892
+1,042,504
+3,098,438
+Reverse repurchase agreements
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
+the principal amount outstanding.
+ICBC
+168
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis, and the relevant investment should meet the definition of equity instrument from the perspective of
+the issuer.
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
+the principal amount outstanding.
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+A financial asset is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+167
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(vi) the entity is controlled or jointly controlled by a person identified in (a);
+(vii)
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); or
+(viii) the entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+Annual Report 2022
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(7) Financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(i) Initial recognition and measurement of financial instruments
+At initial recognition, financial assets and financial liabilities are measured at fair value. For financial assets and financial
+liabilities measured at fair value through profit or loss ("FVTPL"), any related directly attributable transaction costs are
+charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable
+transaction costs are included in their initial recognised value.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market
+participants would take those characteristics into account when pricing the asset or liability at the measurement date
+(including the condition of the asset; and restrictions, if any, on the sale or use of the asset), and use valuation techniques
+that are appropriate in the circumstances and for which sufficient data and other information are available to measure fair
+value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+(ii) Classification and subsequent measurement of financial assets
+Classification of financial assets
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+fair value through other comprehensive income ("FVTOCI"), or at FVTPL.
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
+FVTPL:
+All financial assets not classified as measured at amortised cost or FVTOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+(iv)
+IFRS 17 is to be applied retrospectively unless impracticable, in which case the modified retrospective approach or the fair
+value approach is applied.
+Investment returns received
+Proceeds from disposal of associates and joint ventures
+Investments in associates and joint ventures
+Proceeds from sale and redemption of financial investments
+Purchases of financial investments
+(other than repossessed assets)
+Proceeds from disposal of property and equipment and other assets
+Purchases of property and equipment and other assets
+CASH FLOWS FROM INVESTING ACTIVITIES
+2021
+2022
+Note
+For the year ended 31 December 2022
+(In RMB millions, unless otherwise stated)
+Consolidated Statement of Cash Flows
+ICBC
+160
+The accompanying notes form part of these consolidated financial statements.
+Other liabilities
+155,187
+311,773
+3,886,641
+1,756,321
+Net cash flows from operating activities before taxation
+Net cash flows from investing activities
+1,493,153
+Income tax paid
+(88,496)
+(82,654)
+Net cash flows from operating activities
+1,404,657
+360,882
+443,536
+1,261,998
+CASH FLOWS FROM FINANCING ACTIVITIES
+Proceeds from issuance of debt securities
+(9,607)
+(14,810)
+Dividends or interest paid to other equity instrument holders
+(94,804)
+(104,534)
+Dividends paid on ordinary shares
+(11,155)
+Cash payment for redemption of other equity instruments
+(836,623)
+(870,573)
+Repayment of debt securities
+(26,320)
+(25,721)
+835,441
+955,862
+139,793
+(674,556)
+Interest paid on debt securities
+(23,128)
+(27,584)
+10,018
+(4,415,567)
+13,008
+(3,344,684)
+3,192,493
+Proceeds from issuance of other equity instruments
+2,423,298
+(21,207)
+2,811
+206
+326,066
+282,407
+(910,621)
+(3,314)
+3,194,252
+Due to customers
+(37,420)
+358,267
+354,205
+(3,388)
+(4,072)
+9
+(1,548)
+(14,473)
+11,558
+(262,827)
+(298,722)
+Dividend income
+Net gains on disposal and stocktake of property and equipment and
+other assets (other than repossessed assets)
+Net losses/(gains) on changes in fair value
+Interest income on financial investments
+(18,349)
+(22,850)
+(1,964)
+3,721
+3,125
+14
+182,419
+202,623
+Unrealised losses/(gains) on foreign exchange
+Net (increase)/decrease in operating assets:
+8,870
+Interest expense on debt securities issued
+28,067
+27,673
+Accreted interest on impaired loans
+Net gains on financial investments
+(1,695)
+(22,300)
+Due from central banks
+(147,741)
+155,880
+Financial liabilities measured at fair value through profit or loss
+(11,808)
+(853)
+Due to central banks
+105,849
+(15,161)
+Net (decrease)/increase in operating liabilities:
+Due to banks and other financial institutions
+158,557
+Repurchase agreements
+186,956
+77,427
+Certificates of deposit
+62,306
+193,899
+Dividends paid to non-controlling shareholders
+(1,671,052)
+(43,570)
+Due from banks and other financial institutions
+(4,067)
+157,890
+Financial assets measured at fair value through profit or loss
+(45,211)
+143,496
+(2,747,693)
+Reverse repurchase agreements
+99,863
+Loans and advances to customers
+(2,511,204)
+(2,184,611)
+Other assets
+60,745
+(100,215)
+(28)
+(465)
+Cash payment for other financing activities
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+statement of equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss
+is recognised.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity holders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between
+non-controlling interests and the equity holders of the Bank.
+(3) Non-controlling interests
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+165
+Annual Report 2022
+In the Bank's statement of financial position, investments in subsidiaries are stated at cost less impairment losses.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in
+deciding who controls the entity, and the relevant activities are directed by means of contractual or other arrangements.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+(2) Subsidiaries
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. For overseas business not operating in
+a hyperinflationary economy, all items within equity except for retained profits are translated at the exchange rates ruling
+at the dates of the initial transactions. Income and expenses in the statement of profit or loss are translated using the
+exchange rates at the date of the transactions or deemed exchange rates. The exchange differences arising on the above
+translation are taken to other comprehensive income. On disposal of a foreign operation, the deferred cumulative amount
+recognised in other comprehensive income relating to that particular foreign operation is recognised in profit or loss. The
+effect of exchange rate changes on cash and cash equivalents is presented separately in the statement of cash flows.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as
+at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
+using the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a
+foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition
+are treated as foreign assets and liabilities of the foreign operation and translated at the deemed rates at the end of the
+reporting period. The exchange differences are recognised in profit or loss or in other comprehensive income, depending on
+the nature of non-monetary items.
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates at the dates of the
+transactions or deemed exchange rates. Monetary assets and liabilities denominated in foreign currencies are retranslated
+into the functional currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences
+arising on the settlement of monetary items or on translating monetary items at period end rates are recognised in profit
+or loss, with the exception that they are taken directly to other comprehensive income when the monetary items are
+designated as part of the hedge of the Bank's net investment in a foreign entity, and the aggregate exchange differences
+are not recognised in profit or loss until the disposal of such net investment.
+Foreign currency translation
+The functional currency of the Group's domestic establishments is Renminbi ("RMB"). The overseas establishments
+determine their own functional currencies which best represent the economic environment they operate in. These financial
+statements are presented in RMB millions except when otherwise indicated.
+4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Functional currency and foreign currency translation
+Functional currency
+(In RMB millions, unless otherwise stated)
+Further information about those changes that are expected to affect the Group:
+IFRS 17 Insurance Contracts and the related amendments
+IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and
+supersedes IFRS 4 Insurance Contracts.
+IFRS 17 outlines a general model, which is modified for insurance contracts with direct participation features, described as
+the variable fee approach. The general model is simplified if certain criteria are met by measuring the liability for remaining
+coverage using the premium allocation approach. The general model uses current assumptions to estimate the amount,
+timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It takes into account
+market interest rates and the impact of policyholders' options and guarantees.
+In June 2020, the IASB issued amendments to IFRS 17 to address concerns and implementation challenges that were
+identified after IFRS 17 was published. The amendments defer the date of initial application of IFRS 17 (incorporating the
+amendments) to annual reporting periods beginning on or after 1 January 2023.
+(4) Associates and joint ventures
+In December 2021, the IASB issued Amendment to IFRS 17 Initial Application of IFRS 17 and IFRS 9 - Comparative
+Information to address implementation challenges that were identified after IFRS 17 was published. The amendment
+addresses challenges in the presentation of comparative information.
+Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single
+Transaction
+The amendments narrow the scope of the recognition exemption of deferred tax liabilities and deferred tax assets so that it
+no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.
+Upon the application of the amendments, the Group will recognise a deferred tax asset (to the extent that it is probable
+that taxable profit will be available against which the deductible temporary difference can be utilised) and a deferred tax
+liability for all deductible and taxable temporary differences associated with the right-of-use assets and the lease liabilities.
+The adoption of the amendment is expected to have no material impact on the financial position and financial performance
+of the Group.
+Other new and revised IFRSS that have been issued but are not yet effective are expected to have no material impact on the
+financial position and financial performance of the Group.
+164
+ICBC
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The adoption of the new and revised IFRS is expected to have no material impact on the financial position and financial
+performance of the Group.
+An associate is an entity in which the Group has significant influence. A joint venture is an arrangement whereby the
+Group and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the
+arrangement. Other than those measured at fair value through profit or loss, the Group's investments in associates or joint
+ventures are accounted for using the equity method.
+Under the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less
+any impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the
+associate or joint venture. Unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture, the retained interest is not re-measured. Instead,
+the investment continues to be accounted under the equity method, and vice versa.
+has control or joint control over the Group;
+(ii)
+has significant influence over the Group; or
+or
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+(i)
+(b)
+(i)
+the entity and the Group are members of the same group;
+(ii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of
+the other entity);
+(iii)
+the entity and the Group are joint ventures of the same third party;
+the party is an entity where any of the following conditions applies:
+Notes to the Consolidated Financial Statements
+the party is a person or a close member of that person's family and that person:
+A party is considered to be related to the Group if:
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses.
+(5) Business combination and goodwill
+Business combinations are accounted for by applying the acquisition method. The Group can elect to apply an optional
+concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether the acquired set
+of assets is not a business. If the concentration test is met, the set of assets is determined not to be a business; otherwise,
+the Group shall then perform an assessment in accordance with the requirements of business. The consideration transferred
+is measured at acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the
+Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group
+in exchange for control of the acquiree. Any costs directly attributable to the combination are recognised in profit or loss
+when incurred.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives from host contracts of the acquiree.
+If the business combination is achieved in stages, the acquirer's previously-held equity interest in the acquiree is re-
+measured to the acquisition date fair value through profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date.
+Subsequent changes to the fair value of the contingent consideration that is classified as a financial asset or financial
+liability, is recognised in profit or loss. If the contingent consideration is classified as equity, it shall not be re-measured, and
+its subsequent settlement is accounted for within equity.
+(a)
+166
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and the fair value of the acquirer's previously-held equity interest in the
+acquiree over the net of the acquisition-date amounts of the identifiable assets and liabilities acquired. If the sum of this
+consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is,
+after reassessment, recognised in profit or loss as gains on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill at year end date. For the purpose of impairment
+testing, goodwill arising in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or group of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU or group of CGUS to which the goodwill relates.
+Where the recoverable amount of the CGU or group of CGUS is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in subsequent period.
+Where goodwill forms part of a CGU or group of CGUs and part of the operation within that unit is disposed of, the
+goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining
+the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative
+values of the operation disposed of and the portion of the CGU or group of CGUS retained.
+(6) Related parties
+ICBC
+11
+163
+Effective for annual periods beginning on or after 1 January 2024.
+The Bank obtained authorisation to carry out banking business with an institution code of No. B0001H111000001 from the
+China Banking and Insurance Regulatory Commission (the "CBIRC") of the PRC. The Bank obtained its business license with
+unified social credit code 91100000100003962T from the Beijing Municipal Administration for Market Regulation. The legal
+representative is Mr. Chen Siqing and the registered office is located at No. 55 Fuxingmennei Avenue, Xicheng District,
+Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring. On 27 October 2006, the Bank was listed on both Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited.
+CORPORATE INFORMATION
+1.
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+161
+Annual Report 2022
+The accompanying notes form part of these consolidated financial statements.
+(351,322)
+939,737
+1,040,678
+(451,918)
+Interest paid
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+1,436,757
+1,926,851
+42
+(4,985)
+(7,813)
+Net cash flows from financing activities
+(64,789)
+(11,553)
+NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
+The Bank's stock codes of A Shares and H Shares listed on Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on The Stock Exchange
+of Hong Kong Limited and the stock code is 4620. The Bank's domestic preference shares are listed on Shanghai Stock
+Exchange and the stock codes are 360011 and 360036.
+429,247
+Cash and cash equivalents at beginning of the year
+1,436,757
+1,791,122
+Effect of exchange rate changes on cash and cash equivalents
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+60,847
+(29,138)
+(325,227)
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate financial
+services, personal financial services, treasury operations, investment banking, asset management, trust, financial leasing,
+insurance and other financial services. Domestic establishments refer to the Head Office of the Bank, branches and
+subsidiaries established in Chinese mainland. Overseas establishments refer to branches and subsidiaries established in
+jurisdictions outside Chinese mainland.
+2. BASIS OF PREPARATION
+(1) Statement of compliance
+The Group has not applied the following new and revised IFRSS that have been issued but are not yet effective.
+IFRS 17: Insurance Contracts and the related Amendments 1
+Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint
+Venture²
+Amendments to IFRS 16: Lease Liability in a Sale and Leaseback³
+Amendments to IAS 1: Classification of Liabilities as Current or Non-current³
+Amendments to IAS 1: Non-current Liabilities with Covenants³
+(2) Issued but not yet effective IFRSS and amendments to IFRSS
+Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies¹
+Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction¹
+1
+Effective for annual periods beginning on or after 1 January 2023.
+2
+Effective for annual periods beginning on or after a date to be determined.
+3
+Amendments to IAS 8: Definition of Accounting Estimates¹
+Annual Report 2022
+The adoption of the above-mentioned amendments to IFRSS has had no material impact on the financial position and
+financial performance of the Group.
+Cost of Fulfilling a Contract
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") promulgated by the International Accounting Standards Board (the "IASB"), and the disclosure requirements of
+the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong
+Kong Limited.
+(2) Basis of preparation of the financial statements
+The consolidated financial statements have been prepared under the historical cost convention, except for certain financial
+instruments, and certain non-financial assets measured at fair value, as further explained in the respective accounting
+policies below.
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are disclosed in Note 5.
+162
+ICBC
+Amendments to IFRSS: Annual Improvements to IFRSS 2018-2020
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(1) Mandatory amendments to IFRSS effective for the current year
+In the current year, the Group has applied, for the first time, the following amendments to IFRSS issued by the IASB which
+are mandatorily effective for the annual periods beginning on or after 1 January 2022 for the preparation of the Group's
+consolidated financial statements:
+Amendments to IFRS 3: Reference to the Conceptual Framework
+Amendments to IAS 16: Property, Plant and Equipment: Proceeds before Intended Use
+Amendments to IAS 37: Onerous Contracts
+-
+3. APPLICATION OF THE NEW AND AMENDMENTS TO IFRSS
+==
+(2,077)
+Amortisation
+equity
+(8,249)
+(8,249) 348,338 340,089
+1,955 342,044
+Dividends ordinary shares 2020 final
+(Note 17)
+(94,804)
+(94,804)
+(94,804)
+Distributions to other equity instrument
+holders (Note 17)
+(9,607) (9,607)
+(9,607)
+Appropriation to surplus reserve (i)
+34,258
+34,258
+(34,258)
+Appropriation to general reserve (ii)
+99,251
+99,251
+Total
+Retained
+hedging Other
+reserve reserves Subtotal profits Total interests
+339,701 22,377 (27,882) (4,725) (304) 800,718 1,510,558 2,893,502 16,013 2,909,515
+348,338 348,338 1,878 350,216
+(8,249) 77 (8,172)
+1,917 (12,117) 482 1,469
+1,917 (12,117) 482 1,469
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2022
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Other
+Investment currency Cash flow
+Non-
+Share equity
+(99,251)
+Capital Surplus
+capital instruments
+Balance as at 1 January 2021
+356,407 225,819
+148,640
+reserve reserve
+322,911
+reserve reserve reserve
+Profit for the year
+Other comprehensive income
+Total comprehensive income
+General revaluation translation
+Capital injection by other equity
+controlling
+139,730
+Impairment losses on assets
+Annual Report 2022
+159
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2022
+(In RMB millions, unless otherwise stated)
+Notes
+2022
+CASH FLOWS FROM OPERATING ACTIVITIES
+The accompanying notes form part of these consolidated financial statements.
+Profit before taxation
+424,899
+Adjustments for:
+Share of results of associates and joint ventures
+Depreciation
+(4,427)
+(2,869)
+30,319
+28,194
+instrument holders
+422,565
+Includes the appropriation to general reserve made by overseas branches and subsidiaries in the amounts of RMB47 million
+and RMB1,746 million, respectively.
+2021
+139,730
+Includes the appropriation to surplus reserve made by overseas branches and subsidiaries in the amounts of RMB56 million
+and RMB1,764 million, respectively.
+139,730
+Capital reduction by other equity
+instrument holders
+(11,218) 63
+Dividends to non-controlling shareholders
+(11,155)
+(11,155)
+(465) (465)
+Other comprehensive income
+63
+(ii)
+334
+334 (334)
+Balance as at 31 December 2021
+356,407 354,331 148,703 357,169 438,952 24,628 (39,999) (4,243) 1,165
+926,375 1,620,642 3,257,755
+17,503 3,275,258
+(i)
+transferred to retained earnings
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+169
+Annual Report 2022
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial
+liability) or it is designated as such on initial recognition.
+Financial liabilities measured at FVTPL
+Hedge accounting
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+For the financial liabilities measured at FVTPL, the gains and losses from changes in fair value of the financial liability arising
+from changes in the Group's own credit risk are included in other comprehensive income; other changes in fair value
+of the financial liabilities are recognised in profit or loss for the period. If the treatment of the impact of changes in the
+financial liabilities' own credit risk will create or enlarge the accounting mismatch in profit or loss, the Group shall recognise
+the entire gains or losses of the financial liabilities (including the amount of the impact of changes in its own credit risk)
+in profit and loss. When these liabilities are derecognised, the cumulative gains or losses previously recognised in other
+comprehensive income are reclassified from reserve to retained earnings.
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+(iv) Financial instruments reclassification
+The Group will reclassify all related financial assets when it changes its business model for managing financial assets, and
+the reclassification applies prospectively from the reclassification date (the first day of the first reporting period following
+the change in business model).
+(8) Trade date accounting
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that
+requires delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(9) Presentation of financial instruments
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and shall not
+be offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both of the following conditions are satisfied:
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+(iii) Classification and subsequent measurement of financial liabilities
+Other financial liabilities
+These assets are subsequently measured at fair value. Dividend income is recognised in profit or loss for the period. Other
+net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in
+other comprehensive income are reclassified to retained earnings.
+(In RMB millions, unless otherwise stated)
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are
+recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income
+are reclassified to profit or loss.
+(10) Impairment of financial assets
+Notes to the Consolidated Financial Statements
+173
+Annual Report 2022
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria
+after taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has
+been sold, terminated or exercised. If the hedged items are derecognised, the unamortised adjustment to carrying amount
+is recorded in profit or loss.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in fair value of
+the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in fair value of the hedging instrument are also recognised in profit or loss.
+When the hedged item in a fair value hedge is measured at amortised cost, any hedge adjustment to its carrying amount is
+amortised to profit or loss. The amortisation is based on a recalculated effective interest rate at the date when amortisation
+begins.
+Fair value hedges are hedges of the Group's exposure to changes in fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVTOCI. For fair value hedges, the carrying amount of the hedged item
+not already measured at fair value is adjusted for the gain or loss attributable to the risk being hedged and is taken to profit
+or loss or other comprehensive income. The gains or losses for hedging instrument re-measured at fair value are taken to
+profit or loss or other comprehensive income.
+Fair value hedges
+Equity instruments measured at FVTOCI
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets, or both. The Group determines the business model for managing the financial assets according to the facts and
+based on the specific business objective for managing the financial assets determined by the Group's key management
+personnel.
+In assessing whether the contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding, the Group considers the contractual terms of the instrument. For the purposes of this assessment, principal is
+defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value
+of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for
+other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains
+a contractual term that could change the timing or amount of contractual cash flows such that it would not meet the above
+contractual cash flows characteristics.
+Subsequent measurement of financial assets
+Financial assets measured at FVTPL
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Financial assets measured at amortised cost
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, amortised or impaired.
+Debt instruments measured at FVTOCI
+At the inception of a hedging relationship, the Group formally designates the hedging instruments and the hedged items,
+and documents the hedging relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash
+flows and are assessed on an on-going basis to analyse the sources of hedge ineffectiveness which are expected to affect
+the hedging relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness
+requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship
+remains the same, the Group would rebalance the hedging relationship.
+The Group recognises loss allowances for expected credit loss ("ECL") on:
+If the host contract included in the hybrid contract is a financial asset, the embedded derivative is no longer split from the
+main contract of the financial asset, and the hybrid financial instrument as a whole is related to the classification of the
+financial asset provision. If the host contract included in the hybrid contract is not a financial asset, when the embedded
+derivative's economic characteristics and risks are not closely related to those of the host contract, those separate
+instruments with the same terms as the embedded derivative would meet the definition of a derivative, and the hybrid
+instrument is not carried at FVTPL, derivatives embedded in other financial instruments should be split from the hybrid
+contract and treated as separate derivatives. These embedded derivatives are measured at fair value with the changes in fair
+value recognised in profit or loss.
+debt instruments measured at FVTOCI; and
+Derecognition of financial assets
+Financial asset is derecognised when one of the following conditions is met:
+the Group's contractual rights to the cash flows from the financial asset expire;
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
+of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required
+to repay.
+Securitisation
+As part of its operational activities, the Group securitises credit assets. When a securitisation of financial assets does not
+qualify for derecognition, the relevant financial assets are not derecognised, and the consideration paid by third parties are
+recorded as a financial liability; when the securitisation of financial assets partially qualifies for derecognition, the Group
+continues to recognise the transferred assets to the extent of its continuing involvement, and derecognises the remaining
+portion. The carrying amount of the transferred assets is apportioned between the derecognised portion and the retained
+portion based on their relative fair values, and the difference between the carrying amount of the derecognised portion and
+the total consideration paid for the derecognised portion is recorded in profit or loss.
+Sales of assets on condition of repurchase
+(12) Derecognition of financial assets and liabilities
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is
+sold together with an option to repurchase the financial asset at its fair value at the time of repurchase, the Group will
+derecognise the financial asset.
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+(13) Derivatives and hedge accounting
+Derivatives
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+ICBC
+172
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+Derecognition of financial liabilities
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+171
+loan commitments and financial guarantee contracts.
+Financial assets measured at fair value, including debt or equity instruments measured at FVTPL, equity instruments
+designated as at FVTOCI and derivative financial assets, are not subject to ECL assessment.
+Measurement of ECL
+ECL is a probability-weighted amount that is determined with the respective risks of default occurring as the weight. Credit
+losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity
+in accordance with the contract and the cash flows that the Group expects to receive).
+ICBC
+170
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The Group's method of measuring ECL of financial instruments reflects the following elements: (i) unbiased weighted
+average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money; (iii)
+reasonable and evidence-based information about past events, current conditions, and future economic forecasts that are
+available at no additional cost or effort at the end of the reporting period.
+The maximum period considered when estimating ECL is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+Lifetime ECL is the ECL that result from all possible default events over the expected life of a financial instrument.
+12-month ECL is the portion of ECL that result from default events that are possible within the 12 months after the end of
+the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+The Group classifies financial instruments into the following three stages and provides provisions for ECL accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+Stage 1: A financial instrument of which the credit risk has not significantly increased since initial recognition. The amount
+that equals to 12-month ECL is recognised as loss allowance.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount that equals to lifetime ECL is recognised as loss allowance. Refer to Note 50(a) credit risk for
+the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount that
+equals to lifetime ECL is recognised as loss allowance. Refer to Note 50(a) credit risk for the definition of credit-impaired
+financial assets.
+Presentation of allowance for ECL
+ECL is re-measured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises impairment gains or losses for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through allowance for impairment loss. For debt instruments that are measured at FVTOCI, the
+loss allowance is recognised in other comprehensive income, which does not decrease the carrying amount of the financial
+assets. The Group recognises loss allowance for loan commitments and financial guarantee contracts through other
+liabilities (provisions for credit commitments).
+Write-off
+The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
+prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines
+that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
+subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order
+to comply with the Group's procedures for recovery of amounts due. Subsequent recoveries of an asset that was previously
+written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.
+(11) Modification of financial assets contracts
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the
+terms are substantially different, the Group derecognises the original financial asset and recognises a new asset under the
+revised terms. If the renegotiation or modification does not result in derecognition, but leads to changes in contractual cash
+flows, when assessing whether a significant increase in credit risk has occurred, the Group compares the risk of a default
+occurring under the revised terms as at the end of the reporting period with that as at the date of initial recognition under
+original terms.
+Annual Report 2022
+financial assets measured at amortised cost;
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly
+used by market participants. Inputs to valuation models are determined from observable market data wherever possible,
+including foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the
+fair values are mainly determined by quoted prices from dealers.
+Net investment hedges
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+(19) Precious metals
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+177
+Annual Report 2022
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and
+regulations. The assets under custody are not recorded on the statement of financial position as the Group merely fulfils the
+responsibility as trustee and charges fees in accordance with these agreements without retaining any risks or rewards of the
+assets under custody.
+When the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited is
+also recognised. The precious metals deposited with the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(18) Fiduciary activities
+(17) Financial guarantee contracts
+Lease receipts from operating leases is recognised as income using the straight-line method over the lease term. The initial
+direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss
+over the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are
+recognised as income as they are earned.
+The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return.
+The impairment and derecognition of the finance lease receivable are recognised in accordance with the accounting policy
+in Note 4(10) and 4(12). Variable lease payments not included in the measurement of net investment in the lease are
+recognised as income as they are earned.
+Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the
+finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease.
+The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value
+of the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the
+lease.
+When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset
+arising from the head lease, not with reference to the underlying asset. If the head lease is a short-term lease to which the
+Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
+The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified
+as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset
+irrespective of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance
+lease.
+(ii) As a lessor
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+176
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments and the amount initially recognised less the cumulative amount of income. Any increase in the liability relating
+to a financial guarantee is taken to the statement of profit or loss.
+ICBC
+(20) Property and equipment
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gains
+or losses existing in other comprehensive income at that time remains in other comprehensive income until the hedged
+forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or
+loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+ICBC
+178
+An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from
+its use or disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net
+disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss in the year the asset is
+derecognised.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+For an impaired fixed asset, the depreciation is calculated based on the carrying value less the cumulative impairment loss.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The
+estimated useful lives and depreciation methods are determined according to the conditions of individual aircraft and vessel.
+The residual values are assessed by an independent appraiser based on historical data. The estimated useful lives range from
+15 to 25 years.
+14.29% -50%
+The shorter of the economic useful
+lives and remaining lease terms
+1.94% -20%
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+depreciation rate
+2 - 7 years
+value rate
+0% - 3%
+5 - 50 years
+Estimated residual
+Estimated
+useful life
+Leasehold improvements
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Properties and buildings
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Annual
+The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term
+of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases
+in profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option,
+or there is a change in the exercise of the extension or termination option.
+the insurance contract is issued, and related insurance risk is taken on by the Group;
+(i)
+Insurance premium income is recognised when:
+Insurance income recognition
+where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and a significant insurance risk test shall be performed based on
+it. If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted
+for as a non-insurance contract.
+where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+(ii)
+(i)
+Insurance contracts classification
+(ii)
+(15) Insurance contracts
+174
+ICBC
+Securities borrowed are not recognised in the statement of financial position, unless they are then sold to third parties, in
+which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+According to the policy of classification of financial assets, the reverse repurchase agreements held by the Group were
+divided into different classifications according to the entity's business model for managing the financial instruments and the
+contractual cash flow characteristics of the assets: financial assets measured at amortised cost and financial assets measured
+at FVTPL. The difference between the purchase and resale prices of reverse repurchase agreements measured at amortised
+cost is treated as an interest income and is amortised over the life of the agreement using the effective interest method.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement".
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of
+financial position as a "repurchase agreement". The difference between the sale and repurchase prices is treated as an
+interest expense and is amortised over the life of the agreement using the effective interest method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+When the lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use
+asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
+A net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gains or
+losses on the disposal.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+the related economic benefits are likely to flow to the Group; and
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk
+(other than financial risk) transferred from the policyholders, the contract is classified as an insurance contract. Insurance
+risk refers to the risk that the combined cost of claims, administration and policy acquisitions may exceed the aggregate
+amount of premiums received and investment income over time. Where the Group undertakes the risks other than
+insurance risk, the contract is classified as a non-insurance contract. Where the Group undertakes both insurance risk and
+other risks, forming a contract with mixed risks, the following stipulations are applied:
+Insurance contract liabilities
+there is a change in future lease payments resulting from a change in an index or a rate used to determine those
+payments;
+there is a change in the amounts expected to be payable under a residual value guarantee;
+(iii) related income can be reliably measured.
+Under the following circumstances after the commencement date, the Group re-measures lease liabilities based on the
+present value of revised lease payments:
+A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a
+corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not
+included in the measurement of the lease liability are charged to profit or loss or included in the cost of assets where
+appropriate as incurred.
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate if the interest rate
+implicit in the lease is not readily determinable. Each institution of the Group uses an interest rate that a lessee would have
+to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to
+the right-of-use asset in a similar economic environment as the incremental borrowing rate.
+The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase
+option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying
+asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful
+life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in
+accordance with the accounting policy described in Note 4(23).
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before
+the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to
+dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the
+condition required by the terms and conditions of the lease.
+For a contract that contains more than one separate lease components, the lessee and the lessor separate lease components
+and account for each lease component as a lease separately. For a contract that contains lease and non-lease components,
+the lessee and the lessor separate lease components from non-lease components. However, for the leases in which the
+Group is a lessee, the Group has elected not to separate lease components from non-lease components and accounts for
+the lease and non-lease components as a single lease component.
+the lessee has the right to direct the use of the asset.
+the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the
+period of use;
+(i) As a lessee
+(16) Leases
+Notes to the Consolidated Financial Statements
+175
+Annual Report 2022
+the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly in a
+contract and should be physically distinct, or a capacity portion or other portion of an asset that is not physically
+distinct but represents all of the capacity of the asset and thereby provides the customer with the right to obtain
+substantially all of the economic benefits from the use of the asset. If the supplier has a substantive substitution right
+throughout the period of use, then the asset is not identified;
+To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
+At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
+if the contract conveys the right to control the use of one or more identified assets for a period of time in exchange for
+consideration.
+A lease is when the lessor conveys the right to control the use of an asset for a period of time in exchange for the
+consideration of the lessee.
+(In RMB millions, unless otherwise stated)
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, the adequacy of liability is tested. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on the date of the liability adequacy test, an additional provision shall be
+Imade for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the
+respective insurance contract liabilities.
+1,947
+29,034
+27,457
+28,822
+Taxes and surcharges
+3,721
+3,125
+Other administrative expenses (ii)
+2,000
+Amortisation
+Utility expenses
+Property and equipment expenses:
+3,082
+Repairs and maintenance charges
+8,173
+7,976
+Depreciation charge for right-of-use assets and other leasing expense
+14,596
+15,976
+Depreciation charge for property and equipment
+139,363
+26,539
+143,501
+4,106
+10,100
+Remuneration
+Other
+18,313
+before
+Total
+additional
+annuities, and
+housing
+allowance,
+insurance,
+to social
+the employer
+Year ended 31 December 2022
+Contribution by
+Details of the directors' and supervisors' remuneration before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on The Stock Exchange of Hong Kong Limited and the Hong Kong Companies Ordinance, are as follows:
+9,318
+12. DIRECTORS' AND SUPERVISORS' REMUNERATION
+Notes to the Consolidated Financial Statements
+187
+Annual Report 2022
+The principal auditor's remuneration of RMB192 million for the year (2021: RMB183 million) is included in other
+administrative expenses.
+(ii)
+The defined contribution plans mainly include pension insurance, unemployment insurance and the annuity plan.
+(i)
+236,227
+240,884
+29,060
+27,071
+(In RMB millions, unless otherwise stated)
+18,207
+Held at the end of current year
+30,800
+ICBC
+186
+16,440
+6,315
+229
+897
+2,084
+3,047
+(17,674)
+(6,231)
+10,739
+(1,701)
+(Losses)/gains on financial instruments measured at FVTPL, net, including:
+Net losses on financial instruments designated as at FVTPL
+Net gains on disposal of financial instruments measured at FVTOCI, net
+Other
+3,097
+3,531
+medical
+291
+541
+Derecognised during the year
+3,388
+4,072
+Dividend income from equity investments designated as at FVTOCI, including:
+2021
+10. OTHER OPERATING INCOME, NET
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2022
+Net premium income
+31,918
+Staff benefits
+90,250
+93,376
+Salaries and bonuses
+Staff costs:
+2021
+2022
+11. OPERATING EXPENSES
+11,781
+3,564
+Post-employment benefits - defined contribution plans (i)
+265
+1,590
+(6,561)
+Other
+Net gains on disposal of property and equipment, repossessed assets
+and other assets
+13,016
+12,075
+Net lease income
+(49,706)
+(51,867)
+Operating cost of insurance business
+2021
+46,024
+48,327
+2,182
+remuneration
+Non-executive Director
+Position
+250
+250
+50
+50
+140
+140
+433
+433
+485
+485
+470
+130
+470
+520
+37
+137
+438
+Former Chairman of the Board of Supervisors
+Huang Liangbo (iv)
+External Supervisor
+Liu Lanbiao (iii)
+External Supervisor
+Zhang Jie
+Employee Supervisor
+520
+Huang Li
+130
+Zheng Fuqing (v)
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Supervisors of the Bank have not been finalised in accordance with the
+regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a significant impact
+on the Group's 2022 consolidated financial statements. The total compensation packages will be further disclosed when
+determined by the relevant authorities.
+Note: Since January 2015, the remuneration of the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State Government's policies relating to the remuneration
+reform on executives of central enterprises.
+6,956
+2,645
+1,054
+3,257
+Total
+Former External Supervisor
+Shen Bingxi (ix)
+50
+50
+575
+Former Employee Supervisor
+410
+85
+325
+Former Shareholder Supervisor
+Zhang Wei (vii)
+117
+=17
+117
+Former Independent Non-executive Director
+Nout Wellink (vi)
+Former Non-executive Director
+Wu Xiangjiang (viii)
+Name
+Independent Non-executive Director
+Independent Non-executive Director
+591
+Vice President
+Executive Director, Senior Executive
+Zheng Guoyu
+868
+212
+656
+Vice Chairman, Executive Director, President
+868
+212
+656
+204
+Chairman, Executive Director
+(3) (4)=(1)+(2)+(3)
+(2)
+(1)
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+before tax
+Fees
+insurances
+tax paid
+Chen Siqing
+Liao Lin
+Norman Chan Tak Lam (ii)
+795
+Wang Jingwu
+Fred Zuliu Hu
+Independent Non-executive Director
+Shen Si
+Independent Non-executive Director
+Yang Siu Shun
+Independent Non-executive Director
+Anthony Francis Neoh
+2022
+Non-executive Director
+Dong Yang (i)
+Chen Yifang
+95
+Non-executive Director
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Lu Yongzhen
+95
+795
+204
+24
+591
+Vice President, Chief Risk Officer
+Executive Director, Senior Executive
+Cao Liqun
+9. NET GAINS ON FINANCIAL INVESTMENTS
+41,270
+8,955
+Deferred tax liabilities are recognised for all taxable temporary differences, except:
+Deferred tax is provided using the balance sheet liability method on temporary differences at the end of the reporting
+period between the tax bases of assets and liabilities and their carrying amounts.
+Deferred tax
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+182
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
+from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
+or substantively enacted by the end of each reporting period.
+Current tax
+Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except that it
+relates to items recognised directly in equity, in which case it is recognised in equity.
+(31) Income tax
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss.
+Early retirement benefits
+when the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+when the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination
+plan or a curtailment proposal;
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the due date of labor contract or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognises termination benefits in profit or loss at the earlier of:
+Termination benefits
+In addition, employees in Chinese mainland also participate in a defined contribution retirement benefit plan established
+by the Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the
+employees' previous year basic salaries to the Annuity Plan. The Group pays a fixed contribution into the Annuity Plan
+and has no obligation to pay further contributions if the Annuity Plan does not hold sufficient assets to pay all employee
+benefits. The contribution is charged to profit or loss when it is incurred.
+Pursuant to the relevant laws and regulations of the PRC, the Group participates in a defined contribution basic pension
+insurance and unemployment insurance in the social insurance system established and managed by government
+organisations. The Group makes contributions to basic pension insurance and unemployment insurance plans based on
+the applicable benchmarks and rates stipulated by the government. Basic pension insurance and unemployment insurance
+contributions are recognised as liabilities with a corresponding charge to profit or loss or included in the cost of assets
+where appropriate as the related services are rendered by the employees.
+Post-employment benefits-defined contribution plans
+All eligible employees outside Chinese mainland participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies and charge to profit or loss or
+included in the cost of assets where appropriate.
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+Short-term employee benefits
+(In RMB millions, unless otherwise stated)
+(i)
+188
+(ii)
+where the taxable temporary difference arises from the initial recognition of assets and liabilities in a transaction that
+is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
+income (or deductible expenses).
+If the market for a financial instrument is not active, the Group determines the fair value by using valuation technique,
+including using recent arm's length market transactions between knowledgeable and willing parties, if available, reference
+to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option
+pricing models. Valuation technique makes maximum use of observable market input. However, where observable market
+inputs are not available, management makes estimates on such unobservable market inputs.
+Fair value of financial instruments
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax provisions
+accordingly. In addition, deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
+available against which the deductible temporary differences can be utilised. This requires significant judgement on the tax
+treatments of certain transactions and also significant assessment on the probability that adequate future taxable profits will
+be available for the deferred tax assets to be recovered.
+Income tax
+The measurement of the ECL allowance for financial assets measured at amortised cost and FVTOCI, and with exposure
+arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex models and
+significant assumptions about future economic conditions and credit behavior (the likelihood of customers defaulting and
+the resulting losses). Refer to Note 50(a) credit risk for the explanation of the inputs, assumptions and estimation techniques
+used in measuring ECL.
+Measurement of the ECL allowance
+In the process of applying the Group's accounting policies, management is required to make judgements, estimates and
+assumptions of the effects of uncertain future events on the financial statements. The most significant use of judgements,
+estimates and assumptions concerning the uncertainty of the future at the end of the reporting period that have a
+significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
+year are described below.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+5.
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Notes to the Consolidated Financial Statements
+183
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and
+no longer at the discretion of the Bank. A dividend for the year that is approved after the end of the reporting period is
+disclosed as an event after the reporting period.
+(32) Dividends
+Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
+against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
+The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that
+it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be
+utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be reversed
+accordingly.
+Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when
+the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
+enacted by the end of the reporting period, and reflect the corresponding tax effect.
+at the time of the transaction, it affects neither the accounting profit nor taxable income (or deductible expenses).
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax assets are recognised only to the extent that it is probable that the temporary differences will be reversed in
+the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
+transaction is not a business combination;
+(ii)
+(i)
+Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
+tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
+differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except that deferred
+tax assets are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a
+transaction and that:
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax liabilities are recognised except where the timing of the reversal of the temporary differences can be controlled
+and it is probable that the temporary differences will not be reversed in the foreseeable future.
+Annual Report 2022
+181
+Annual Report 2022
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at FVTPL. The equity component is not re-measured.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+(26) Convertible instruments
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(25) Contingent liabilities
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+179
+Annual Report 2022
+The Group reviews the carrying amount of a provision at the end of reporting period. The carrying amount is adjusted to
+the current best estimate.
+If the convertible instrument is converted, the liability component, together with the equity component, are transferred
+to equity. If the convertible instrument is redeemed, the consideration paid and transaction fees for the redemption are
+allocated to the liability and equity components. The method used to allocate the consideration and transaction costs is
+the same as that used for issuance. After allocating the consideration and transaction costs, the difference between the
+allocated and carrying amounts is charged to profit and loss if it relates to the liability component or directly recognised in
+equity if it relates to the equity component.
+where the contingency involves a large population of items, the best estimate is determined by weighting all possible
+outcomes by their associated probabilities.
+A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation.
+When the effect of the time value of money is material, the best estimate is determined by discounting the related future
+cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency such as
+risks, uncertainties and time value of money. Where there is a range of possible outcome, and each possible outcome in
+that range is as likely as any other, the best estimate is the mid-point of that range. In other cases, the best estimate is
+determined according to the following circumstances:
+Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that an
+outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
+made of the amount of the obligation.
+(24) Provisions
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation or amortisation, had no impairment loss been recognised for the
+asset in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation or amortisation
+charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic
+basis over its remaining useful life.
+The Group assesses at the end of each reporting period whether there is any indication that property and equipment,
+land use rights, right-of-use assets, associates and joint ventures and other non-financial assets may be impaired. If any
+such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the
+asset belongs. Where the gross carrying amount of an asset exceeds its recoverable amount, the asset is considered to be
+impaired and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash
+flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the
+time value of money and the risks specific to the asset.
+(23) Non-financial asset impairment
+Repossessed assets are initially recognised at fair value of assets not retained plus related costs, and are subsequently
+measured at the lower of the carrying value and net recoverable amount. If the recoverable amount is lower than the
+carrying value of the repossessed assets, the assets are written down to the recoverable amount.
+(22) Repossessed assets
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") during the Group's restructuring or the consideration paid. The rights are amortised using the straight-
+line method over the periods of the leases. When the prepaid land lease payments cannot be allocated reliably between
+the land and buildings elements, the entire lease payments are included in the costs of properties and buildings as finance
+leases in property and equipment.
+(21) Land use rights
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+where the contingency involves a single item, the best estimate is the most likely outcome;
+Determination of control over investees
+(27) Preference shares and perpetual bonds
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instrument's duration is treated as
+profit appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms,
+the redeemed amount is charged to equity.
+(30) Employee benefits
+Dividend income is recognised when the Group's right to receive payment is established, it is probable that the related
+economic benefits will flow to the Group and the related income can be reliably measured.
+Dividend income
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+the Group does not provide service with an alternative use to the Group, and the Group has an enforceable
+right to payment for performance completed to date.
+the customer controls the service provided by the Group in the course of performance; or
+the customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+(ii)
+(i) The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be
+entitled in exchange for transferring promised services to customers, and income is recognised when its performance
+obligation in contracts is satisfied.
+Fee and commission income
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+liabilities or equity instruments based on their contractual terms and their economic substance after considering the
+definition of financial liabilities and equity instruments. Preference shares and perpetual bonds issued containing both equity
+and liability components are accounted for using the accounting policy for convertible instruments containing an equity
+component.
+purchased or originated financial assets that are not credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets quality improve so that they are no
+longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after
+the application of the above-mentioned rules, then the interest income is calculated by applying the effective interest
+rate to their gross carrying amount.
+(ii)
+(i)
+Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets and is
+recognised as interest income, except for:
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVTOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash receipts or payments through the expected life of the financial instrument, where appropriate, to the
+gross carrying amount of the financial asset, or the amortised cost of financial liability. The calculation takes into account all
+contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs
+that are directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit
+losses.
+Interest income
+(29) Revenue recognition
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+180
+Cash and cash equivalents refer to monetary assets, which are short-term, highly liquid, readily convertible into known
+amounts of cash and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash,
+unrestricted balances with central banks, amounts due from banks and other financial institutions and reverse repurchase
+agreements with original maturity of less than three months.
+(28) Cash and cash equivalents
+purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial recognition,
+by applying the credit adjusted effective interest rate to their amortised cost; and
+Management applies its judgement to determine whether the control indicators set out in Note 4(2) indicate that the Group
+controls securitisation vehicles, wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities.
+184
+ICBC
+Trust and agency services
+Other
+Asset custody business
+9,756
+8,803
+Guarantee and commitment business
+15,165
+14,172
+Corporate wealth management services
+16,679
+17,736
+Bank card business
+8,709
+22,416
+Investment banking business
+30,001
+26,253
+Personal wealth management and private banking services
+45,439
+Settlement, clearing business and cash management
+Fee and commission income on:
+2021
+2022
+NET FEE AND COMMISSION INCOME
+7.
+19,586
+(In RMB millions, unless otherwise stated)
+8,738
+1,808
+8,610
+(196)
+(2,360)
+2,370
+5,332
+6,781
+5,638
+2021
+2022
+Equity investments
+Derivatives and other
+1,894
+Debt securities
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB22,290 million (2021: RMB20,999 million) with
+respect to trust and other fiduciary activities for 2022.
+Net fee and commission income
+133,024
+129,265
+(15,703)
+(16,553)
+Fee and commission expense
+148,727
+145,818
+2,894
+3,226
+8. NET TRADING INCOME
+The above amounts mainly include gains and losses arising from the buying and selling of, the interest income and expense
+on, and the changes in fair value of financial assets and liabilities held for trading.
+Notes to the Consolidated Financial Statements
+Annual Report 2022
+262,827
+298,722
+Financial investments
+10,430
+15,947
+Discounted bills
+353,733
+376,950
+Personal loans
+467,973
+507,252
+Due from central banks
+Corporate loans and advances
+900,149
+Loans and advances to customers
+Interest income on:
+2021
+2022
+6. NET INTEREST INCOME
+The Group acts as manager or investor in a number of wealth management products, investment funds, trust plans, asset
+management plans and assets-backed securities. When assessing whether the Group controls such a structured entity,
+the Group would determine whether it exercises the decision-making rights as a principal or an agent and usually focuses
+on the assessment of the aggregate economic interests of the Group in the entity (comprising any carried interests and
+expected management fees) and the decision-making authority of the entity. The Group would also determine whether
+another entity with decision-making rights is acting as an agent for it.
+Wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria at the initial set up of the vehicles. In addition, the Group is exposed to variability of returns from the
+vehicles through holding interests in the vehicles and the day-to-day servicing of the underlying assets in the vehicles which
+is carried out by the Group under a servicing contract. Key decisions are usually required only when underlying assets go
+into default. Therefore, in considering whether it has control, the Group considers whether it can use its power to influence
+these vehicles' returns.
+Securitisation vehicles
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+832,136
+185
+45,425
+Due from banks and other financial institutions (i)
+The above interest income and expense are related to financial instruments which are not measured at fair value through
+profit or loss.
+Includes interest expense on due to central banks and repurchase agreements.
+(ii)
+Includes interest income on reverse repurchase agreements.
+(i)
+Net interest income
+690,680
+693,687
+(471,538)
+(586,689)
+(29,526)
+42,027
+(35,874)
+(44,387)
+(70,732)
+Due to banks and other financial institutions (ii)
+(397,625)
+(480,083)
+Due to customers
+Interest expense on:
+1,162,218
+1,280,376
+25,228
+36,080
+Debt securities issued and certificates of deposit
+where the taxable temporary difference arises from the initial recognition of goodwill;
+ICBC
+216,985
+0.95
+0.86
+0.86
+0.82
+Diluted earnings per share
+0.97
+0.95
+0.97
+0.86
+0.82
+Credit rating
+S&P(4)
+Moody's (4)
+A
+A
+A
+0.86
+Basic earnings per share
+6.30
+6.93
+2,872,792
+2,657,523
+2,312,143
+Net capital base(2)
+Risk-weighted assets (2)
+4,281,079
+22,225,272 21,690,349
+3,909,669
+3,396,186
+3,121,479
+2,644,885
+20,124,139
+18,616,886 17,190,992
+Per share data (in RMB yuan)
+Net asset value per share(3)
+8.81
+8.15
+7.48
+A
+3,241,364
+A
+A1
+1.11
+Return on weighted average equity(2)
+11.43
+12.15
+11.95
+13.05
+13.79
+1.08
+Net interest spread(3)
+1.92
+1.97
+2.12
+2.20
+Net interest margin (4)
+1.92
+2.11
+1.73
+1.00
+1.02
+0.97
+A1
+A1
+A1
+Notes: (1) Calculated by adding allowance for impairment losses on loans and advances to customers measured at amortised cost with
+allowance for impairment losses on loans and advances to customers measured at fair value through other comprehensive
+income.
+(2) Calculated in accordance with the Capital Regulation.
+(3) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments
+at the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(4) The rating results are in the form of "long-term foreign currency deposits rating".
+10
+ICBC
+Financial Indicators
+Financial Highlights
+2022
+2021
+2020
+2019
+2018
+Profitability (%)
+Return on average total assets(1)
+A1
+3,475,995
+Net tier 1 capital(2)
+2,232,033
+527,758
+406,296
+421,874
+364,437
+Allowance for impairment losses
+672,762
+603,983
+1,148,785
+531,161
+413,177
+on loans (1)
+Investment
+10,527,292
+Total liabilities
+36,095,831
+Due to customers
+478,730
+Discounted bills
+5,636,574
+6,383,624
+Financial Data (continued)
+2022
+2021
+2020
+2019
+2018
+As at the end of reporting period
+(in RMB millions)
+Total assets
+39,609,657
+Total loans and advances to customers
+Corporate loans
+Personal loans
+35,171,383 33,345,058
+23,212,312 20,667,245 18,624,308
+13,826,966 12,194,706 11,102,733
+8,236,561 7,944,781
+9,955,821
+30,109,436 27,699,540
+16,761,319 15,419,905
+9,418,894
+7,115,279
+29,870,491
+Corporate deposits
+Personal deposits
+12,497,968
+2,266,573
+1,814,495
+institutions
+Equity attributable to equity holders
+3,495,171
+3,257,755
+2,893,502
+2,676,186
+2,330,001
+of the parent company
+Share capital
+356,407
+Net common equity tier 1 capital (2)
+3,121,080
+356,407
+2,886,378
+356,407
+356,407
+2,653,002 2,457,274
+356,407
+2,784,259
+2.15
+2,921,029
+Due to banks and other financial
+9,257,760 8,591,139
+31,896,125 30,435,543
+26,441,774 25,134,726
+14,671,154 13,331,463 12,944,860
+14,545,306
+7,647,117 6,754,692
+27,417,433 25,354,657
+22,977,655 21,408,934
+12,028,262 11,481,141
+11,660,536
+10,477,744
+9,436,418
+Other deposits
+199,465
+250,349
+261,389
+234,852
+268,914
+Accrued interest
+454,566
+361,994
+267,941
+236,797
+222,461
+3,185,564
+Financial Highlights
+2.30
+Return on risk-weighted assets (5)
+清
+の
+Pb off
+ICBC
+14
+The
+year 2023 is the first year to fully implement the guiding principles of the 20th CPC National Congress and a critical
+year for ICBC to continue its strategic plan. ICBC will earnestly study and implement Xi Jinping Thought on Socialism with
+Chinese Characteristics for a New Era and the guiding principles of the 20th CPC National Congress and fully and faithfully
+apply the new development philosophy on all fronts. We will advance all our work around the task of serving Chinese
+modernization through finance and concentrate efforts on maintaining stable growth, adjusting the structure, fostering new
+drivers, preventing risks, and breaking new ground. We will further our role as a large state-owned bank in serving the new
+pattern of development and supporting high-quality development, and help set the stage for building a modern socialist
+country in all respects, and celebrate the 40th anniversary of the establishment of ICBC with excellent performance.
+We are forging ahead with devotion and determination and time is our witness. On 1 January 2024, ICBC will celebrate its
+40th anniversary of establishment. Since its establishment, ICBC has always been keeping in mind its original aspiration and
+mission, integrating its own development into the great cause of national progress, the people's happiness and national
+rejuvenation, and adhering to professional, steady and pragmatic practices. We have actively seized opportunities and
+responded to challenges, continued to deepen reform and promote transition and achieved new breakthroughs and new
+progress in reforms. Since the 18th CPC National Congress, we have studied and implemented in depth General Secretary Xi
+Jinping's important discourse on financial work and fully carried out the three tasks of serving the real economy, preventing
+and resolving financial risks and deepening the financial reform. We have firmly striven towards becoming a stronger,
+better and larger bank and achieved a new leap in the building of a world-class and modern financial enterprise with
+Chinese characteristics. Standing at the historical juncture of inheriting the past and ushering in the future, we will draw
+nourishment from our 40 years of hard work, uphold the value of integrity leading to prosperity, pursue a path of financial
+development with Chinese characteristics and with greater courage, intelligence and drive, and push ICBC's high-quality
+development to a new level as we embark on a journey in a new era.
+Chairman: Chen Siqing
+Through the efforts of the past year, the overall quality of ICBC's business development has further improved. At the
+end of 2022, ICBC Group's total assets reached RMB39.6 trillion and net profit stood at RMB361 billion, representing
+an increase of 3.1% compared to last year. Return on average total assets was 0.97% and return on weighted average
+equity maintained at a sound level at 11.43%. NPL ratio remained within a moderate range of 1.38%. Capital adequacy
+ratio reached 19.26%. The Bank's Board of Directors proposed a dividend of RMB3.035 (pre-tax) per 10 ordinary shares
+for 2022, which will be submitted to the Shareholders' General Meeting for consideration. Here, on behalf of the Board
+of Directors, I'd like to express my sincere appreciation to all sectors of society for your care and assistance to ICBC, to
+the Board of Supervisors for your effective supervision, and to the Management and all employees for your hard work and
+contributions.
+Chairman's Statement
+13
+Annual Report 2022
+We pursued security in development in a well-coordinated manner and focused on strengthening the foundation
+for preventing and mitigating risks. We upheld the value of holistic national security, enhanced the bottom-
+line thinking, and refined the risk governance system with pragmatic measures. We strengthened the role of the Risk
+Management Committee in leading and making overall planning of relevant work, expanded the coverage of accredited risk
+officers, highlighted the risk management responsibilities of the first line of defense, and effectively strengthened internal
+audit and supervision. In response to new changes in the risk situation, we implemented in depth the Five-pronged Risk
+Management Approach, namely the overall risk management of domestic and overseas institutions, on- and off-balance
+sheet businesses, commercial banking and investment banking and other services, online and offline business, and Head
+Office and subordinate institutions. Moreover, we improved the joint prevention and control mechanism for "five major
+markets", namely, monetary, foreign exchange, bond, stock, and commodity. As a result, our risk control became more
+holistic and effective. Meanwhile, we steadily advanced a new round of asset quality improvement. Our NPL ratio decreased
+steadily. Our allowance to NPLs and capital adequacy ratio maintained at a relatively high level, further strengthening the
+foundation of stable development.
+We actively took on missions and put forth efforts on improving the quality and efficiency of services for the
+real economy. We earnestly followed the orientation of the central government's policies, scientifically arranged the total
+amount, structure, pace and price for investment and financing, and took the lead in ensuring proper countercyclical credit
+supply. RMB denominated loans of domestic branches increased by RMB2.6 trillion. Meanwhile, we employed financial
+instruments such as bond, lease and debt-for-equity swaps in a well-coordinated manner, which provided strong support
+to maintaining stable macroeconomic performance. We adhered to the direction of serving high-quality development and
+allocated more resources to key areas concerning the national economy and the people's livelihood as well as weak links
+in economic development. Our balance of loans to manufacturing exceeded RMB3 trillion and loans to strategic emerging
+industries, green industries, inclusive areas, private sector and agriculture-related areas achieved rapid growth. The interest
+rate of new loans further declined, and we continued to reduce fees and offer benefits to the real economy. We upheld
+the people-centric development philosophy and spared no effort in resolving the pressing difficulties and problems that
+concerned them most. We actively developed innovative products, enriched scenarios and improved services. We issued
+integrated financial service solutions for new urban residents and accelerated the digitalization of financial products and the
+implementation of elderly-friendly innovation in outlets. We made new progress in the building of a bank satisfactory to the
+people.
+We continued to adhere to the guidance of Party building theory and strive to improve on modernization of
+governance standards. Based on the rectification following the disciplinary inspection by the CPC Central Committee,
+we revised the Articles of Association in a high quality manner pursuant to the latest guiding principles of the CPC
+Central Committee. While improving on corporate governance, we further strengthened the leadership of the Party,
+which consolidated the foundation of the financial development path with Chinese characteristics. We strengthened
+dynamic connections between the rules of procedure of the CPC ICBC Party Committee and the corporate governance
+decision-making mechanism, optimized the structure of the Board of Directors, enhanced the performance of the Board of
+Supervisors, and revised the Working Regulations for the Executive Committee. These efforts enabled governing subjects
+to be more fully-played on their roles and provided for a scientific decision-making process. We improved transparency
+and investor protection, refined the communication and interaction mechanism with domestic and overseas investors, and
+actively promoted environmental, social and governance (ESG) practices. As a result, our governance efficiency further
+improved.
+The year 2022 was a highly important year in the history of the development of the Communist Party of China ("CPC" or
+the "Party") and the nation and was also an extraordinary year in the development course of ICBC. ICBC adhered to Xi
+Jinping Thought on Socialism with Chinese Characteristics for a New Era and studied and implemented in depth the guiding
+principles of the 20th CPC National Congress and the decisions and plans of the CPC Central Committee and the State
+Council. We stayed committed to the general working principle of pursuing progress while ensuring stability and earnestly
+putting in place the important requirements of responding effectively to COVID-19, maintaining economic stability, and
+ensuring security in development. According to the "48-character" guideline of the CPC ICBC Committee, we applied
+the new development philosophy, served the new pattern of development and pushed for high-quality development. As a
+result, we achieved positive results in all work.
+We continued to uphold fundamental principles and break new ground and put forth effort to unleash reform
+drive and vitality. We implemented in depth the Group's strategic plan and substantially advanced the strategic layout
+of "leveraging our strengths, tackling areas of weaknesses and solidifying the foundation". We highlighted our strengths
+in operation, worked faster to shore up weak links, and strengthened the foundation. We adhered to combining serving
+national reforms and deepening our own reforms. We formulated a comprehensive reform plan and carried out 117
+reform measures in five key areas. Every effort has been made to build a tech-empowered bank and D-ICBC. We issued the
+overall work plan for digitalization and launched Mobile Banking 8.0. Positive progress was made in the digitalization and
+the building of ecosystem of outlets. ICBC led the market in the implementation of the pilot program of e-CNY. Closely
+following the national opening-up policy, we deepened global operations and increased our overseas RMB clearing network
+institutions to 10. We actively fulfilled our responsibilities as Chair of the BRICS Business Council Chinese Chapter, playing
+the optimal role of the Belt and Road Interbank Regular Cooperation Mechanism (BRBR), and continuously enhanced our
+capability in serving internal and external circulations.
+30 March 2023
+President's Statement
+President Liao Lin
+We take reforms as the fundamental driving force and innovation as the first of such driving force, formulated and
+implemented the comprehensive reform plan, and accelerated connotative development. We deepened mechanisms
+innovation. We refined the supervision and assessment system, optimized the competitiveness evaluation indicator system,
+improved the green finance management mechanism, enhanced ESG management efficiency, and boosted the balanced,
+coordinated, sustainable high-quality development state. We deepened innovation in services, launching series service
+solutions for new urban residents, rolling out the first personal pension savings product, and continued to expand high-
+frequency service scenarios concerning people's livelihood such as government affairs, medical and pension. We also
+deepened innovation in channels. We accelerated the building of "Cloud ICBC", strengthened online and offline integrated
+operations, enriched functions of "ICBC Sharing Stations" for the benefit of the people, and continued to improve outlets'
+competitiveness and customer satisfaction.
+"Reform" means constantly energizing growth drive through reform, innovation and digitalization.
+We continued our efforts in fundamental work and in areas that are good for long-term development. Based on our
+strength in customer base and interactions among government, business and consumer (GBC), we continued to implement
+fundamental projects including Net Making and Patching, fund retention, urban-rural collaboration, agency business,
+merchant marketing, etc. and sped up the formation of the customer ecosystem with coordinated development of micro,
+small, medium and large enterprises and personal customers. At the end of 2022, corporate customers, cash settlement
+accounts and merchants all exceeded 10 million, and the number of personal customers increased by 16.72 million to 720
+million. The synergistic effect became more apparent, and a record high in annual increase in customer deposits exceeding
+RMB3.4 trillion was set.
+President's Statement
+ICBC
+16
+We revised the strategic plan for the development of the Group to effectively align with the national 14th Five-Year Plan.
+We adhered to the combination of overall advancement and breakthrough-making in key areas, and accelerated the
+implementation of the strategic layout of "leveraging our strengths, tackling areas of weaknesses and solidifying the
+foundation". The leading strengths of business segments such as corporate finance, settlement finance, institutional finance
+and financial markets were consolidated. New achievements were made in strategic focuses including personal finance,
+foreign exchange business, key areas and urban-rural collaboration and some potential segments have been growing into
+new growth drivers. Personal financial assets maintained the leading position in terms of scale; international settlement,
+cross-border RMB settlement, and foreign exchange sale and settlement saw their business value increase by about 5%,
+and the ICBC Xingnongtong APP covered over 1,800 counties in the year of launch.
+"Progress" means continuing to strengthen the foundation of high-quality development by promoting
+implementation of plans and basic projects.
+Risk is the biggest variable in business. The Bank adheres to the coordinated development and security, and earnestly
+implements arrangements to prevent and resolve major economic and financial risks, and adjusts risk prevention and control
+strategies based on the circumstances. Our asset quality is stable overall and all types of risks are generally under control.
+We advanced the Five-pronged Risk Management Approach in depth, strengthened the bonding force of the three lines of
+defense, and upgraded the enterprise-wide risk management system. We refined the system of new rules and regulations
+on credit approval, enriched the application of intelligent risk control, and focused on improving risk governance in key
+areas and key large accounts. We enhanced joint control of market risks, which effectively responded to fluctuations in
+global financial markets. We actively share risk control technologies and tools with over 300 peers, thereby helping them to
+maintain financial stability.
+Always keeping in mind the top priorities of the country, we placed our focus of operation on serving the real economy
+and implemented a full range of policies and follow-up measures to stabilize the economy. Through instruments such as
+loans, bonds, leasing, and debt-for-equity swaps, we provided a total of over RMB6.4 trillion funds of all types to the real
+economy. RMB denominated loans of domestic branches increased by RMB2.6 trillion, representing a year-on-year increase
+of RMB428.3 billion. While maintaining a reasonable growth in volume, we continued to adjust and optimize the structure
+to make our financial services more adaptable, competitive and inclusive. The Bank maintained the lead in terms of the
+size of loans to manufacturing, green industries, and sci-tech innovations, and the growth rate of loans for key areas such
+as inclusive and agriculture-related areas was significantly higher than the growth of total loans. We innovated in supply
+of financial services and optimized the payment environment, which helped improve the quality and expand the scale of
+consumption. We intensified support to ensure stable performance in foreign trade and foreign investment and actively
+served high-standard opening up and the high-quality development of the Belt and Road.
+"Stability" means effectively ensuring overall economic stability by serving policies and measures to stabilize the
+economy and effectively controlling risks.
+These results were mainly attributed to the Bank's efforts in "stability, progress and reform”.
+The core indicators about the "Strong, Excellent and Large” orientation of development continued to improve. The
+Bank maintained its position among top large global banks in terms of assets and profit. In terms of being "Strong", the
+Bank's capital adequacy ratio rose to 19.26% and allowance to NPLs registered 209.47%, maintaining at a sound level. The
+balance of asset allowance was nearly RMB800.0 billion, indicating stronger risk resistance. NPL ratio decreased to 1.38%,
+marking an eighth consecutive quarterly decrease. In terms of being "Excellent", return on average total assets ("ROA")
+stood at 0.97% and return on weighted average equity ("ROE") stood at 11.43%. Net interest margin ("NIM") recorded
+1.92%, indicating more profit concessions for the real economy and maintaining at a reasonable range. In terms of being
+"Large", total assets rose by 12.6% to RMB39.6 trillion, operating income was RMB841.4 billion, and net profit increased
+by 3.1% and reached a new record high of RMB361.0 billion. The foregoing performance results have fully reflected an
+overall balance in value creation, market position, risk control and capital constraint and again demonstrated the Bank's
+stable operation feature and strong development resilience as well as great potential for growth in future.
+In 2022, facing the complex and severe external environment, the Bank fully and faithfully apply the new development
+philosophy on all fronts, centering on the 20th CPC National Congress and its guiding principles. We acted on the general
+working principle of pursuing progress while ensuring stability and fully implemented the important requirements of
+responding effectively to COVID-19, maintaining economic stability, and ensuring security in development. We improved our
+work through rectification following the disciplinary inspection by the CPC Central Committee. We took proactive actions
+to overcome difficulties and promoted our own high-quality development while serving the new pattern of development.
+As a result, we delivered an operating performance that improves quality whilst ensuring stability.
+President's Statement
+15
+Annual Report 2022
+Chairman's Statement
+We took digitalization as a new driver of growth. We sped up the development of D-ICBC, promoted digital upgrading of
+businesses, products and services, and continued to cultivate new growth engines. We launched Mobile Banking 8.0 and
+ICBC e Life 5.0 and established an open wealth community. The number of mobile banking personal customers reached
+516 million and monthly active users on the mobile end exceeded 174 million, both ranking first in the industry. We
+upgraded the ECOS and intensified efforts to achieve breakthroughs in core technologies of key areas, further consolidating
+the technical foundation. The Bank ranked first among domestic banks in terms of new and cumulative numbers of patents
+granted in the year, and comprehensive technological strength continued to lead the industry.
+ICBC
+12
+Q2
+Q1
+Q4
+Q3
+Q2
+Q1
+(In RMB millions)
+Q3
+2021
+Quarterly Financial Data
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(6) Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+2022
+Q4
+Operating income
+226,858
+Chairman's Statement
+11
+Annual Report 2022
+activities
+(235,123) 588,904 (605,568)
+612,669
+(437,894)
+203,186 432,146
+1,207,219
+77,743 88,348 96,517
+ratio
+212,286 217,489
+214,120
+85,730
+190,322
+94,661
+216,930 207,331
+80,873 94,316
+90,633
+Net profit attributable to equity
+holders of the parent company
+Net cash flows from operating
+Chairman Chen Siqing
+The year 2023 is the first year to fully implement the guiding principles for the 20th CPC National Congress and a critical
+year to continue to implement the Bank's strategic plan. The greatest truths are the simplest, and hard work is the key. The
+Bank will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, study and
+implement in depth the guiding principles for the 20th CPC National Congress, act on the political and people-centric nature
+of financial work, and take solid steps to serve Chinese modernization. We will, with the trust and support of shareholders,
+customers and all sectors of society, focus on maintaining stable growth, adjusting the structure, cultivating new drivers
+of growth, preventing risks and making a good start for all tasks. We will give back to shareholders and investors and
+celebrate the 40th anniversary of establishment of ICBC with new progress and new performance achievements in building a
+world-class and modern financial enterprise with Chinese characteristics.
+/*
+President: Liao Lin
+1.42
+1.58
+1.43
+1.52
+Allowance to NPLs (8)
+209.47
+205.84
+1.38
+180.68
+175.76
+Allowance to total loans ratio (9)
+2.90
+2.92
+2.85
+2.86
+2.68
+199.32
+Non-performing loans ("NPLs") ratio (7)
+Asset quality (%)
+25.71
+1.64
+1.68
+1.64
+1.75
+1.81
+Ratio of net fee and commission income
+15.36
+15.45
+16.40
+16.83
+17.15
+to operating income
+Cost-to-income ratio (6)
+27.43
+26.36
+24.76
+25.79
+Capital adequacy (%)
+Common equity tier 1 capital adequacy
+14.04
+13.31
+8.47
+Risk-weighted assets to total assets
+56.11
+61.67
+60.35
+61.83
+62.06
+ICBC
+18
+Prudent monetary policy was more flexible and moderate.
+PBC lowered the reserve requirement ratio twice and
+turned over RMB1.13 trillion of profit to the central
+government. It applied multiple methods such as relending
+and rediscount, medium-term lending facility and open
+market operation to reasonably inject liquidity in a short,
+medium and long term manner. With the structural
+monetary policy "focusing on key areas, and maintaining
+reasonable and appropriate pace with up and down
+adjustments", PBC gave play to the triple advantages
+of aggregate, structure and price, and launched special
+relending for sci-tech innovation, inclusive elderly care
+services, transport and logistics sector and equipment
+upgrading to strengthen precise support for key areas.
+It guided the establishment of two batches of policy
+development financial instruments totaling RMB739.9
+billion, to support infrastructure construction with effective
+investment. PBC guided the Loan Prime Rate ("LPR")
+for loans with a term of one year and over five years to
+decline by 15 basis points and 35 basis points respectively,
+and promoted the reduction of comprehensive financing
+cost of the real economy. It built up a deposit rate market-
+oriented adjustment mechanism, and stabilized the cost
+of bank liabilities. It established the dynamic adjustment
+mechanism of the housing loan interest rate for first-time
+buyers, and pushed forward the development of a long-
+term real estate mechanism in an orderly manner. The RMB
+exchange rate basically maintained stable at a reasonable
+and balanced level.
+China
+In 2022, the global inflation remained at a historic high,
+major developed economies continued to raise interest
+rates and scale down their balance sheets, the momentum
+of world economic recovery weakened, and global financial
+markets fluctuated sharply. In the face of the complicated
+and severe domestic and international situation and
+the impact of multiple unexpected factors, China's
+economy has achieved reasonable growth, the economic
+aggregate has climbed to a new level, and the high-
+quality development has achieved new results. China's
+gross domestic product (GDP), fixed asset investment
+(excluding rural households), and total (RMB-denominated)
+imports and exports of trade in goods rose by 3.0%, 5.1%
+and 7.7% year on year respectively, while retail sales of
+consumer goods dropped by 0.2% year on year. The value
+added of industrial enterprises above designated size, value
+added of services, and consumer price index (CPI) rose by
+3.6%, 2.3% and 2.0% year on year respectively.
+Proactive fiscal policy improved efficiency.
+implemented the new combined tax and fee support
+policy, stepped up efforts to reduce the burden of bailout,
+and strengthened the vitality of market players. In 2022,
+the scale of new tax and fee cuts, tax rebates, and tax
+and fee deferral exceeded RMB4.2 trillion. It reasonably
+arranged the debt scale, maintained an appropriate
+spending intensity, and optimized the structure of fiscal
+expenditure. China issued RMB750.0 billion special
+government bonds and increased special local government
+bonds by RMB4.04 trillion. It also allocated financial
+resources to the grassroots, supported them to "ensure
+people's basic livelihood, wages and operation", and
+strived to stabilize the general macroeconomic situation.
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Discussion and Analysis
+17
+Annual Report 2022
+30 March 2023
+8.94
+2.36
+8.73
+8.87
+13.18
+13.20
+12.98
+ratio (10)
+Tier 1 capital adequacy ratio (10)
+15.64
+14.94
+14.28
+14.27
+13.45
+Capital adequacy ratio (10)
+19.26
+18.02
+16.88
+16.77
+15.39
+Total equity to total assets ratio
+9.31
+9
+Annual Report 2022
+529,911
+2021
+2020
+2019
+2018
+Annual operating results (in RMB millions)
+Net interest income
+693,687
+690,680
+2022
+646,765
+593,677
+Net fee and commission income
+129,265
+133,024
+131,215
+130,573
+124,394
+Operating income
+632,217
+Financial Data
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified,
+are consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+with balance exceeding
+1.7 trillion
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+Corporate customers Personal customers
+Business outlets
+Financial Highlights
+Personal mobile
+banking customers
+10,693 thousand
+720 million
+Up 1,002 thousand
+Up 16.72 million
+15,639
+516 million
+Green loans
+Loans to manufacturing
+Agriculture-related
+loans
+Loans to strategic
+emerging industries
+with balance of
+3.98 trillion
+with balance exceeding
+3 trillion
+with balance exceeding
+3.3 trillion
+841,441
+860,880
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2) Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that
+Offer Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision
+2010) issued by CSRC.
+776,002
+391,789
+372,413
+Net profit
+361,038
+350,216
+317,685
+313,361
+298,723
+Net profit attributable to equity holders
+of the parent company
+360,483
+348,338
+312,224
+297,676
+Net cash flows from operating activities
+1,404,657
+360,882
+1,557,616
+481,240
+800,075
+392,126
+424,899
+315,906
+Profit before taxation
+725,121
+422,565
+240,884
+236,227
+206,585
+Operating expenses
+194,203
+Impairment losses on assets
+182,419
+207,776
+202,668
+178,957
+161,594
+Operating profit
+418,138
+422,030
+390,822
+369,324
+202,623
+389,269
+187
+260
+100
+547
+Executive Director, Senior Executive Vice President
+Zheng Guoyu (i)
+112
+156
+Wang Jingwu (iv)
+547
+Chairman of the Board of Supervisors
+201
+1,084
+1,084
+197
+515
+372
+Vice Chairman, Executive Director, President
+1,095
+1,095
+519
+375
+Chairman, Executive Director
+Chen Siging
+Liao Lin (i)
+Executive Director, Senior Executive Vice President,
+Huang Liangbo (ii)
+338
+Anthony Francis Neoh
+194
+470
+Independent Non-executive Director
+Shen Si
+470
+Independent Non-executive Director
+Yang Siu Shun
+520
+Independent Non-executive Director
+(7)=(5)-(6)
+Non-executive Director
+Dong Yang (vi)
+Non-executive Director
+467
+Chen Yifang (v)
+Cao Liqun
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Lu Yongzhen
+Chief Risk Officer
+999
+999
+333
+333
+65
+8གྷ
+Non-executive Director
+(6)
+deferred
+(3)
+Contribution
+Year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+189
+Annual Report 2022
+In June 2022, Mr. Shen Bingxi ceased to act as External Supervisor of the Bank due to expiration of his term of office.
+(ix)
+(viii) In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to his age.
+In April 2022, Mr. Zhang Wei ceased to act as Shareholder Supervisor of the Bank due to his age.
+In March 2022, Mr. Nout Wellink ceased to act as Independent Non-executive Director of the Bank due to expiration
+of his term of office.
+In January 2022, Mr. Zheng Fuqing ceased to act as Non-executive Director of the Bank due to expiration of his term
+of office.
+In September 2022, Mr. Huang Liangbo ceased to act as Shareholder Supervisor and Chairman of the Board of
+Supervisors of the Bank due to change of job assignments.
+At the Annual General Meeting for the Year 2021 held on 23 June 2022, Mr. Liu Lanbiao was elected as External
+Supervisor of the Bank, and his new term of office started from the day of approval at the Annual General Meeting.
+At the Annual General Meeting for the Year 2021 held on 23 June 2022, Mr. Norman Chan Tak Lam was elected as
+Independent Non-executive Director of the Bank, and his qualification was approved by CBIRC in September 2022.
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Dong Yang was elected as
+Non-executive Director of the Bank, and his qualification was approved by CBIRC in January 2022.
+(vii)
+(vi)
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+As at the approval date of the consolidated financial statements for the year ended 31 December 2022, changes of directors
+and supervisors of the Bank were as follows:
+Fees for Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding
+their remuneration with the Bank in accordance with the employee remuneration system.
+In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the
+President and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal
+results. Accordingly, the Bank accrued RMB16 thousand, RMB9 thousand and RMB7 thousand for Mr. Chen Siqing, Mr. Liao
+Lin and Mr. Wang Jingwu respectively, as additional contribution to the Annuity Plan in 2022.
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+by the
+employer to
+(4) (5)=(1)+(2)+(3)+(4)
+social
+housing
+(2)
+3
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+before tax paid
+payment
+before tax
+insurances
+bonuses
+Fees Remuneration
+Position
+Name
+Actual
+amount of
+remuneration
+Nout Wellink
+emoluments
+medical
+Discretionary
+Of which:
+Total
+additional
+annuities and
+allowance,
+insurance,
+Independent Non-executive Director
+470
+Fred Zuliu Hu
+In February 2021, Ms. Mei Yingchun ceased to act as Non-executive Director of the Bank due to expiration of her term
+of office.
+In January 2022, Mr. Zheng Fuqing ceased to act as Non-executive Director of the Bank due to expiration of his term
+of office.
+(xi)
+(x)
+(ix)
+(viii) In March 2021, Mr. Yang Guozhong ceased to act as Shareholder Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Zhang Jie was elected as
+External Supervisor of the Bank, and his term of office as External Supervisor of the Bank started from the day of
+approval by the Shareholders' General Meeting.
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Dong Yang was elected as
+Non-executive Director of the Bank, and his qualification was approved by CBIRC in January 2022.
+At the Annual General Meeting for the Year 2020 held on 21 June 2021, Ms. Chen Yifang was elected as Non-
+executive director of the Bank, and her qualification was approved by CBIRC in August 2021.
+At the First Extraordinary General Meeting of 2021 held on 29 July 2021, Mr. Wang Jingwu was elected as Executive
+Director of the Bank, and his qualification was approved by CBIRC in September 2021. On 24 September 2021, the
+Board of Directors appointed Mr. Wang Jingwu as Chief Risk Officer of the Bank.
+On 24 September 2021, the Board of Directors appointed Mr. Zheng Guoyu as Senior Executive Vice President of
+the Bank. At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Zheng Guoyu was
+elected as Executive Director of the Bank, and his qualification was approved by CBIRC in December 2021.
+At the First Extraordinary General Meeting of 2021 held on 29 July 2021, Mr. Huang Liangbo was elected as
+Shareholder Supervisor of the Bank, and his term of office as Shareholder Supervisor of the Bank started from the day
+of approval by the Shareholders' General Meeting, and his term of office as Chairman of the Board of Supervisors of
+the Bank took effect simultaneously.
+In November 2021, Mr. Qu Qiang ceased to act as External Supervisor of the Bank due to change of job assignments.
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+On 25 February 2021, the Board of Directors elected Mr. Liao Lin as Vice Chairman of the Bank and appointed Mr.
+Liao Lin as President of the Bank, and his qualification was approved by CBIRC in March 2021. Mr. Liao Lin ceased to
+act as Chief Risk Officer of the Bank after he took office as President.
+(vi)
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+As at the approval date of the consolidated financial statements for the year ended 31 December 2021, changes of directors
+and supervisors of the Bank were as follows:
+Fees for Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding
+their remuneration with the Bank in accordance with the employee remuneration system.
+In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the
+President and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal
+results. Accordingly, the Bank accrued RMB16 thousand, RMB9 thousand and RMB7 thousand for Mr. Chen Siqing, Mr. Liao
+Lin and Mr. Wang Jingwu respectively, as additional contribution to the Annuity Plan in 2021.
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+(vii)
+In 2022, there was no arrangement under which a Director or a Supervisor of the Bank waived or agreed to waive any
+remuneration (2021: None).
+In 2022, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or upon
+joining the Group or as a compensation for loss of office (2021: Nil).
+Annual Report 2022
+1
+1
+1
+1
+1
+RMB10,500,001 Yuan to RMB11,000,000 Yuan
+RMB11,000,001 Yuan to RMB 11,500,000 Yuan
+RMB11,500,001 Yuan to RMB12,000,000 Yuan
+RMB12,500,001 Yuan to RMB13,000,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+RMB25,000,001 Yuan to RMB25,500,000 Yuan
+2021
+2022
+Number of employees
+The number of these individuals whose emoluments fell within the following bands is set out below:
+82,842
+88,201
+349
+66,495
+74,004
+78
+15,998
+14,119
+Salaries and allowances
+Discretionary bonuses
+Other
+RMB'000
+RMB'000
+2021
+2022
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in Notes 12 and 48(g)
+to the consolidated financial statements. Details of the emoluments in respect of the five highest paid individuals are as
+follows:
+13. FIVE HIGHEST PAID INDIVIDUALS
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+191
+190
+470
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred and will be determined based on the future performance.
+Note: Since January 2015, the remuneration of the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State Government's policies relating to the remuneration
+reform on executives of central enterprises.
+Shen Bingxi
+50
+50
+50
+1,696
+538
+410
+470
+470
+520
+520
+ន ន ន ន ឧ ទ ទ
+External Supervisor
+50
+Wu Xiangjiang
+50
+Employee Supervisor
+Huang Li
+2,234
+278
+1,341
+615
+Shareholder Supervisor
+Zhang Wei
+410
+Independent Non-executive Director
+Employee Supervisor
+Zhang Jie (vii)
+External Supervisor
+24
+8,563
+538
+9,101
+1,068
+3,344
+2,062
+2,627
+163
+0.95
+163
+163
+Total
+Former External Supervisor
+Qu Qiang (xi)
+Former Non-executive Director
+Mei Yingchun (x)
+Zheng Fuqing (ix)
+182
+24
+24
+22
+182
+33
+86
+63
+Former Chairman of the Board of Supervisors
+Yang Guozhong (vii)
+The remuneration before tax of Directors and Supervisors for 2021 set out in the table above represents the total amount of
+annual remuneration for each of these individuals, which include the amounts disclosed in the 2021 Annual Report.
+Former Non-executive Director
+0.97
+1
+Interest rate swap contracts
+64
+one year
+2,878
+five years
+five years
+Total
+Assets
+Liabilities
+5,283
+127
+8,352
+8
+(146)
+Currency swap contracts
+47,204
+43,049
+1,391
+131
+6,723
+47,170
+51,651
+(96)
+5,679
+months
+4
+1,243
+4,383
+Equity and other derivatives
+(948)
+436
+91,644
+49
+105,675
+Over
+year but
+Liabilities
+(38)
+Currency swap contracts
+74,270
+81,348
+4,999
+160,617
+1,739
+(3,561)
+Equity and other derivatives
+4,730
+5,002
+66
+4
+9,802
+44
+(126)
+79,886
+months
+but within
+three
+Within
+Over one
+Over three
+Fair values
+within
+Notional amounts with remaining maturity of
+(3,725)
+1,986
+178,527
+4
+9,150
+89,487
+31 December 2021
+444
+(1,190)
+196
+Other (ii)
+31 December 2021
+Carrying amount of hedged items
+Hedging instruments
+Effect on other
+comprehensive
+income during
+the current year
+Accumulated
+effect on other
+comprehensive
+income
+Assets
+Liabilities
+19,617
+(35,786)
+192
+161
+4,708
+74
+(8)
+(28,533)
+108
+Hedging instruments
+Gains/(losses) arising from fair value hedges, net:
+The changes in fair value of the hedging instruments and net gains or losses arising from the hedged risk relating to the
+hedged items are set out below:
+Fair value hedges are used by the Group to protect against changes in fair value of financial assets and financial liabilities
+due to movements in market interest rates. The Group mainly used interest rate swaps as hedging instruments to hedge the
+interest risk of financial assets and financial liabilities.
+(b) Fair value hedges
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges in 2022 and 2021.
+Loans and advances to customers
+Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and other
+financial institutions, customer deposits and other liabilities.
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost
+and debt securities issued.
+(4,263)
+374
+(64,319)
+38,352
+(4,416)
+(ii)
+Debt securities (i)
+(i)
+Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and other
+financial institutions, customer deposits and other liabilities.
+Accumulated
+effect on other
+Hedging instruments
+Effect on other
+comprehensive
+income during
+the current year
+Liabilities
+Assets
+Carrying amount of hedged items
+comprehensive
+31 December 2022
+Loans and advances to customers
+Debt securities (i)
+(i)
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equity are as follows:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+Other (ii)
+Assets
+203
+income
+(49,433)
+(ii)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost
+and debt securities issued.
+(2,995)
+1,268
+(109,851)
+65,604
+34,288
+(3,340)
+(60,418)
+30,693
+8
+623
+345
+184
+1,076
+8,108
+4,085
+3,137
+Deposits with banks and other financial institutions:
+Banks operating in Chinese mainland
+232,042
+243,440
+Other financial institutions operating in Chinese mainland
+14,556
+10,508
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+116,014
+90,511
+3,406
+2,347
+366,018
+346,806
+Less: Allowance for impairment losses
+(393)
+(349)
+3,364
+5,273
+192,030
+198,571
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+188,935
+2021
+185,380
+97,106
+288,728
+Banks operating in Chinese mainland
+Placements with banks and other financial institutions:
+346,457
+365,625
+Other financial institutions operating in Chinese mainland
+2022
+31 December
+31 December
+Cash on hand
+(ii)
+(i)
+31 December
+2022
+31 December
+Balances with central banks
+19. CASH AND BALANCES WITH CENTRAL BANKS
+ICBC
+194
+Basic and diluted earnings per share were calculated using the profit for the year attributable to ordinary shareholders of
+the parent company divided by the weighted average number of ordinary shares in issue.
+0.95
+0.97
+Diluted earnings per share (RMB yuan)
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+677,952
+Mandatory reserves (i)
+Fiscal deposits and other
+Accrued interest
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted deposits.
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain central
+banks of overseas countries or regions where it has operations. They are not available for use in the Group's daily operations.
+As at 31 December 2022, the mandatory reserve deposits ratios of the domestic branches of the Bank in respect of customer
+deposits denominated in RMB and foreign currencies were 9.5% (31 December 2021: 10%) and 6% (31 December 2021:
+9%) respectively. The mandatory reserve funds placed by domestic subsidiaries of the Group are determined by the PBOC.
+The amounts of mandatory reserve deposits placed with the central banks of those countries or regions outside Chinese
+mainland are determined by local jurisdictions.
+3,098,438
+1,640
+3,427,892
+1,402
+Surplus reserves (ii)
+236,211
+338,551
+516,558
+2,459,402
+2,647,750
+2021
+62,872
+66,340
+195,604
+The hedged items
+481,435
+(1,073)
+(15,457)
+Commodity derivatives and other
+937,006
+8,387,877
+10,011
+87,205
+(17,746) 975,169
+(96,350) 8,100,994
+15,478
+(14,302)
+76,140
+(71,337)
+(a) Cash flow hedges
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, equity and other derivatives
+that are used to protect against exposures to variability of future cash flows.
+Included in the above derivative financial instruments, those designated as hedging instruments in the Group's cash flow
+hedges are set out below:
+31 December 2022
+Notional amounts with remaining maturity of
+Fair values
+Over three
+886
+Interest rate swap contracts
+Total
+five years
+five years
+one year
+15,706
+months
+within
+year but
+months
+but within
+three
+Within
+Over one
+Over
+2,018,010
+(23,760)
+24,945
+Notional
+31 December 2021
+31 December 2022
+The notional amounts and fair values of derivative financial instruments held by the Group are set out below:
+A derivative is a financial instrument, the value of which changes in response to the changes in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps, options and futures.
+The notional amount of a derivative represents the underlying amount of the specific financial instruments mentioned
+above. It indicates the volume of business transacted by the Group but does not reflect the risk.
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+Fair values
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2022
+827,150
+1,042,504
+480,693
+676,879
+(742)
+195
+Less: Allowance for impairment losses
+Notional
+amounts
+3,139,900
+Interest rate contracts
+(41,578)
+44,956
+5,107,815
+(54,844)
+Fair values
+52,249
+Exchange rate contracts
+Liabilities
+Assets
+amounts
+Liabilities
+Assets
+4,310,971
+2022
+14,027
+4,721
+79,459
+1,898
+1,768
+Basic earnings per share (RMB yuan)
+356,407
+356,407
+Weighted average number of ordinary shares in issue (in million shares)
+338,731
+345,673
+Profit for the year attributable to ordinary shareholders of the parent company
+Shares:
+(9,607)
+(14,810)
+348,338
+360,483
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity instrument holders of the
+parent company
+2021
+2022
+Earnings:
+18. EARNINGS PER SHARE
+104,534
+108,169
+(2021: RMBO.2933 per share)
+Dividends on ordinary shares for 2022: RMB0.3035 per share
+(not recognised as at 31 December):
+Dividends on ordinary shares proposed for approval
+76,152
+2021
+2021
+2022
+1
+1
+1
+5
+5
+In 2022, no emolument was paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group or as a compensation for loss of office (2021: Nil).
+14. IMPAIRMENT LOSSES ON ASSETS
+Loans and advances to customers (Note 23)
+Other
+ICBC
+192
+2022
+143,173
+9,607
+2021
+39,246
+34,356
+182,419
+202,623
+15. INCOME TAX EXPENSE
+(a) Income tax expense
+Current income tax expense
+Chinese mainland
+Hong Kong SAR and Macau SAR
+Other overseas jurisdictions
+Deferred income tax expense
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+168,267
+1
+14,810
+9,013
+Effects of profits attributable to associates and joint ventures
+(51,427)
+(58,688)
+Effects of non-taxable income (ii)
+22,319
+18,135
+Effects of non-deductible expenses (i)
+(827)
+(869)
+Effects of different applicable rates of tax prevailing in other countries/regions
+106,225
+105,641
+Tax at the PRC statutory income tax rate
+2021
+424,899
+422,565
+Profit before taxation
+2022
+PRC statutory income tax rate is 25%. Taxes on profits assessable elsewhere have been calculated at the applicable rates
+of tax prevailing in the countries/regions in which the Group operates in. The Group has reconciled income tax expense
+applicable to profit before taxation at the PRC statutory income tax rate to actual income tax expense for the Group as
+follows:
+3,584
+(b) Reconciliation between income tax and accounting profit
+74,683
+61,527
+(8,494)
+(20,107)
+83,177
+Effects of other
+(439)
+(2,253)
+(717)
+(890)
+Interests on perpetual bonds distributed
+6,047
+5,797
+Dividends on preference shares
+Dividends or interests declared and paid to other equity instrument holders:
+94,804
+104,534
+(2020: RMBO.2660 per share)
+Dividends on ordinary shares for 2021: RMBO.2933 per share
+Dividends on ordinary shares declared and paid:
+2021
+2022
+3,560
+17. DIVIDENDS
+Notes to the Consolidated Financial Statements
+193
+Annual Report 2022
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2022 includes
+a profit of RMB346,056 million (2021: RMB323,100 million) which has been dealt with in the financial statements of the
+Bank (Note 52).
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal debts.
+(ii)
+The non-deductible expenses mainly represent non-deductible impairment allowance and write-offs.
+(i)
+74,683
+61,527
+Income tax expense
+(In RMB millions, unless otherwise stated)
+81,634
+1,950
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost
+and debt securities issued.
+95,808
+(8,327)
+(592)
+127
+Liabilities
+(94)
+(ii)
+Other hedged items are included in due from banks and other financial institutions and repurchase agreements.
+31 December 2021
+Accumulated adjustments
+22
+Carrying amount of hedged items
+Assets
+Liabilities
+Debt securities (i)
+62,768
+(339)
+Assets
+21
+Liabilities
+Loans and advances to customers
+Other (ii)
+2,441
+to the fair value of hedged items
+(21)
+(10)
+1,267
+21,108
+74,357
+627
+(1,071)
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+(i)
+Debt securities (i)
+Loans and advances to customers
+Other (ii)
+31 December 2022
+(6,528)
+Accumulated adjustments
+to the fair value of hedged items
+Liabilities
+Assets
+89,761
+(1,799)
+(493)
+Liabilities
+105
+4,780
+(89)
+Carrying amount of hedged items
+Assets
+41,439
+955
+(6,954)
+(7,293)
+year but
+within
+months
+but within
+three
+Within
+Over one
+Over three
+Fair values
+Notional amounts with remaining maturity of
+31 December 2021
+31 December 2022
+Included in the above derivative financial instruments, those designated as hedging instruments in fair value hedges are
+interest rate swaps and the details are set out below:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+197
+Annual Report 2022
+(51)
+(2,258)
+(4,752)
+(31)
+2,207
+Over
+66,164
+months
+five years
+(1)
+59
+56
+(i)
+(ii)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost
+and debt securities issued.
+Other hedged items are included in due from banks and other financial institutions, repurchase agreements and customer
+deposits.
+(c) Net investment hedges
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+under certain circumstances. Hedging is undertaken by using customer deposits taken in the same currencies as the
+functional currencies of related branches and subsidiaries which are accounted for as hedges of certain net investments in
+foreign operations.
+As at 31 December 2022, an accumulated net losses from the hedging instrument of RMB675 million was recognised
+in other comprehensive income (31 December 2021: accumulated net gains of RMB1,650 million). There was no
+ineffectiveness in profit or loss that arises from the net investment hedges in 2022 and 2021.
+198
+ICBC
+Assets
+725
+108,003
+30,892
+61,752
+12,383
+2,976
+4,623
+Total
+five years
+one year
+7,187
+Tianjin, the PRC
+100
+RMB11,000 million
+ICBC Peru Bank
+Buenos Aires, Argentina
+USD904 million
+ARS55,446 million
+USD120 million
+100
+Industrial and Commercial Bank of China (Argentina) S.A.
+Commercial banking
+Commercial banking
+Commercial banking
+Commercial banking
+Broker dealer and
+margin trading
+Commercial banking
+Commercial banking
+New York, United States
+Delaware and New York,
+United States
+Toronto, Canada
+Mexico City, Mexico
+Sao Paulo, Brazil
+Real202 million
+USD120 million
+Lima, Peru
+Commercial banking
+Commercial banking
+ICBC Credit Suisse Asset Management Co., Ltd. *
+80
+RMB18,000 million
+Fund management
+Beijing, the PRC
+RMB433 million
+RMB200 million
+80
+100
+888 8
+ICBC Financial Asset Investment Co., Ltd.*
+60
+ICBC-AXA Assurance Co., Ltd. ("ICBC-AXA"). *
+100
+100
+ICBC Financial Leasing Co., Ltd. * ("ICBC Leasing")
+100
+100
+Auckland, New Zealand
+100
+100
+Industrial and Commercial Bank of China
+USD369 million
+80
+80
+Industrial and Commercial Bank of China (USA) NA
+100
+Commercial banking
+EUR200 million
+EUR200 million
+100
+100
+ICBC Austria Bank GmbH
+USD425 million
+Moscow, Russia
+Istanbul, Turkey
+Vienna, Austria
+TRY5,368 million
+USD50 million
+Financial Services LLC
+60
+Real202 million
+100
+100
+Industrial and Commercial Bank of China (Brasil) S.A.
+CAD218.66 million
+MXN1,597 million
+USD306 million
+USD50.25 million
+MXN1,597 million
+100
+Industrial and Commercial Bank of China Mexico S.A.
+CAD208 million
+80
+80
+Industrial and Commercial Bank of China (Canada)
+100
+460,398
+92.84
+ICBC Turkey Bank Anonim Şirketi
+ICBC (London) PLC
+Commercial banking
+Luxembourg
+EUR437 million
+EUR437 million
+100
+100
+100
+(New Zealand) Limited ("ICBC New Zealand")
+Commercial banking
+NZD234 million
+NZD234 million
+10
+100
+Industrial and Commercial Bank of China (Europe) S.A.
+92.84
+100
+USD200 million
+RUB10,810 million
+RUB10,810 million
+100
+100
+Bank ICBC (joint stock company)
+Banking
+USD200 million
+London, United Kingdom
+USD1,083 million
+60
+60
+ICBC Standard Bank PLC
+Commercial banking
+London, United Kingdom
+USD839 million
+RMB12,505 million
+395,818
+Shanghai, the PRC
+Repurchase agreements
+(ii)
+31 December 2022
+Gross amounts
+200,039
+209,817
+Net amounts
+108,815
+118,593
+31 December 2021
+Gross amounts
+Net amounts
+236,536
+Reverse repurchase agreements
+104,765
+131,623
+As part of the reverse repurchase agreements, the Group has received collateral that it is allowed to sell or repledge in
+the absence of default by their owners. As at 31 December 2022, the Group had received securities with a fair value of
+approximately RMB164,498 million on such terms (31 December 2021: RMB143,559 million). Of these, securities with a
+fair value of approximately RMB121,679 million had been repledged under repurchase agreements (31 December 2021:
+RMB107,698 million). The Group has an obligation to return the securities to its counterparties at the maturity of the
+contract. If the collateral received declines in value, the Group may, in certain circumstances, require additional collateral.
+23. LOANS AND ADVANCES TO CUSTOMERS
+23.1 Loans and advances to customers by type of measurement:
+31 December
+2022
+31 December
+2021
+Measured at amortised cost:
+Corporate loans and advances
+- Loans
+263,394
+- Finance lease
+Based on master repurchase agreements and related supplementary agreements, the Group offsets certain reverse repurchase
+agreements and repurchase agreements, and presents net asset (or liability) amounts as reverse repurchase agreements (or
+repurchase agreements) in the consolidated financial statements in accordance with the accounting policy of offsetting.
+(In RMB millions, unless otherwise stated)
+2021
+144,409
+564,615
+544
+96,863
+409,047
+59
+(475)
+(128)
+709,093
+505,841
+Measured at FVTPL:
+Reverse repurchase agreements-securities
+(i)
+122,036
+Cash advanced as collateral on securities borrowing
+32,938
+42,661
+154,974
+157,655
+864,067
+663,496
+Annual Report 2022
+199
+Notes to the Consolidated Financial Statements
+114,994
+Personal loans
+Discounted bills
+13,813,025
+13,614,804
+198,221
+8,236,561
+534,671
+2,780
+22,593,648
+3,594
+20,109,200
+As at 31 December 2022, the Group's allowance for impairment losses on loans and advances to customers measured at
+FVTOCI was RMB538 million (31 December 2021: RMB219 million), refer to Note 23.2(b).
+200
+ICBC
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+23.2 Allowance for impairment losses on loans and advances
+(a) Movements of the allowance for impairment losses on loans and advances to customers
+measured at amortised cost are as follows:
+1,155,879
+Balance at 1 January 2022
+Stage 2
+Stage 3
+Total
+269,376
+110,649
+223,739
+603,764
+Transfer:
+- to stage 1
+31,002
+Stage 1
+12
+37
+9,271
+525,388
+12,181,841
+12,000,191
+181,650
+7,944,781
+Accrued interest
+4,104
+53,523
+2,370
+45,707
+22,107,213
+20,174,699
+Less: Allowance for impairment losses on loans and advances to customers
+measured at amortised cost (Note 23.2(a))
+(672,224)
+(603,764)
+21,434,989
+19,570,935
+Measured at FVTOCI:
+Corporate loans and advances
+- Loans
+Discounted bills
+Accrued interest
+Measured at FVTPL:
+Corporate loans and advances
+- Loans
+11,161
+1,144,681
+2022
+31 December
+31 December
+Less: Allowance for impairment losses
+(b) Financial investments measured at FVTOCI
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+203
+Annual Report 2022
+623,223
+714,879
+112,194
+124,453
+106,629
+119,131
+Debt securities (analysed by type of issuers):
+Unlisted
+2,805
+Listed outside Hong Kong SAR
+4,044
+2,517
+Listed in Hong Kong SAR
+Funds and other investments:
+90,746
+97,743
+57,288
+69,483
+1,521
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+99,440
+93,126
+5,252
+1,704,164
+2,079,640
+17,343
+19,584
+551,757
+560,640
+310,160
+349,500
+171,130
+210,680
+653,774
+939,236
+2021
+31 December
+2022
+31 December
+Equity investments
+Other debt investments
+Accrued interest
+Corporate entities
+Unlisted
+(28,109)
+31,675
+Listed outside Hong Kong SAR
+31 December
+31 December
+2022
+2021
+116,655
+126,653
+80,534
+120,128
+36,121
+6,525
+Central counterparties credit risk-weighted assets
+40,729
+8,840
+1,751
+166,224
+196,315
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional). The risk-weighted assets for counterparty credit risk of derivatives of the Group
+were calculated in accordance with the Rules on Measuring Derivative Counterparty Default Risk Assets since 1 January
+2019.
+22. REVERSE REPURCHASE AGREEMENTS
+Measured at amortised cost:
+Reverse repurchase agreements-bills
+Reverse repurchase agreements-securities
+Accrued interest
+67,911
+Credit value adjustment risk-weighted assets
+Netting settled credit default risk-weighted assets
+Including: Non-netting settled credit default risk-weighted assets
+1,783
+2,443
+Listed in Hong Kong SAR
+Equity investments:
+420,283
+492,683
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(d) Offsetting of financial instruments
+In accordance with the principle of offsetting financial instruments, the Group offsets certain derivative financial assets and
+derivative financial liabilities, and presents the net amounts after offsetting in the financial statements.
+Derivative financial assets
+Derivative financial liabilities
+31 December 2022
+Gross amounts
+57,400
+60,494
+Net amounts
+30,970
+31 December 2021
+Gross amounts
+36,220
+Net amounts
+25,442
+34,064
+41,792
+31,014
+(e) Counterparty credit risk-weighted assets of derivative financial instruments
+The credit risk-weighted assets in respect of the above derivatives of the Group as at the end of the reporting period are as
+follows:
+Counterparty credit default risk-weighted assets
+25,817
+2,178,018
+(2,893)
+(11,705)
+Financial investments measured at FVTOCI
+(b)
+2,178,018
+1,803,604
+Financial investments measured at amortised cost
+(c)
+7,634,395
+6,830,933
+10,527,292
+9,257,760
+623,223
+202
+(a) Financial investments measured at FVTPL
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December
+31 December
+2022
+2021
+Financial investments held for trading
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Policy banks
+123,257
+97,364
+ICBC
+11,498
+714,879
+Financial investments measured at FVTPL
+- to stage 2
+- to stage 3
+Reverse for the year
+Write-offs and transfer out
+Other movements
+Balance at 31 December 2021
+(13)
+(71)
+(84)
+(551)
+회
+(551)
+28
+219
+(7) --
+191
+In 2022, the changes of gross carrying amounts of loans and advances to customers with a significant impact on the
+Group's impairment allowance were mainly resulted from the credit business in Chinese mainland, including: the gross
+carrying amount of domestic branches loans and advances to customers transferred from Stage 1 to Stage 2 was
+RMB497,668 million (2021: RMB491,330 million); the gross carrying amount of domestic branches loans transferred from
+Stage 2 to Stage 3 was RMB122,174 million (2021: RMB93,855 million); the gross carrying amount of domestic branches
+loans transferred from Stage 2 to Stage 1 was RMB147,733 million (2021: RMB78,888 million). The changes of impairment
+allowance resulting from loans transferred from Stage 1 to Stage 3, Stage3 to Stage1 and Stage3 to Stage 2 were not
+significant (2021: not significant).
+24. FINANCIAL INVESTMENTS
+31 December
+31 December
+2022
+2021
+(7)
+12,670
+Banks and other financial institutions
+73,139
+143,637
+3,549
+4,536
+177,913
+159,365
+87,032
+81,329
+105,376
+90,403
+370,321
+157,946
+331,097
+623,223
+Analysed into:
+Debt securities:
+Listed in Hong Kong SAR
+2,177
+3,301
+Listed outside Hong Kong SAR
+30,108
+21,164
+Unlisted
+714,879
+11,192
+16,418
+Funds and other investments
+58,218
+Corporate entities
+106,876
+92,666
+314,770
+260,918
+Equity investments
+10,711
+9,417
+325,481
+270,335
+Financial investments designated as at FVTPL
+Funds and other investments
+19,077
+21,791
+19,077
+21,791
+Other financial investments measured at FVTPL
+Debt securities (analysed by type of issuers):
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Equity investments
+- to stage 1
+Transfer:
+861
+650
+672,224
+Stage 1
+Stage 2
+Balance at 1 January 2021
+223,703
+89,151
+Stage 3
+217,446
+Total
+530,300
+Transfer:
+251,923
+- to stage 1
+(15,581)
+(2,279)
+- to stage 2
+(9,856)
+14,056
+(4,200)
+- to stage 3
+(3,534)
+(35,319)
+38,853
+17,860
+141,586
+278,715
+Balance at 31 December 2022
+15,684
+(3,979)
+- to stage 3
+(4,594)
+(49,676)
+54,270
+(Reverse)/charge for the year
+(6,642)
+92,227
+57,271
+142,856
+Write-offs and transfer out
+(85,157)
+(85,157)
+Recoveries of loans and advances
+previously written off
+9,529
+9,529
+Other movements
+1,278
+811
+(857)
+1,232
+Charge for the year
+- to stage 2
+41,831
+67,614
+- to stage 3
+Charge for the year
+Other movements
+Balance at 31 December 2022
+Stage 1
+191
+Stage 2
+-
+Stage 3
+Total
+28
+219
+- to stage 2
+317
+510
+317
+2
+28
+538
+Balance at 1 January 2021
+Stage 1
+211
+Stage 2
+Stage 3
+Total
+2
+- to stage 1
+Transfer:
+Balance at 1 January 2022
+168,351
+Write-offs and transfer out
+(100,447)
+(100,447)
+Recoveries of loans and advances
+previously written off
+9,020
+9,020
+Other movements
+(628)
+(564)
+(2,268)
+(3,460)
+Balance at 31 December 2021
+269,376
+110,649
+223,739
+603,764
+Annual Report 2022
+201
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Movements of the allowance for impairment losses on loans and advances to customers
+measured at FVTOCI are as follows:
+58,906
+1,803,604
+Analysed into:
+Debt securities:
+Kuala Lumpur, Malaysia
+Commercial banking
+Jakarta, Indonesia
+USD361 million
+MYR833 million
+98.61 IDR3,706,100 million
+MYR833 million
+100
+100
+Industrial and Commercial Bank of China
+98.61
+PT. Bank ICBC Indonesia
+(Macau) Limited ("ICBC Macau")
+Commercial banking
+Macau SAR, the PRC
+MOP12,064 million
+MOP589 million
+89.33
+89.33
+Industrial and Commercial Bank of China
+("ICBC International")
+Investment banking
+HKD5,963 million Hong Kong SAR, the PRC
+Commercial banking
+(Malaysia) Berhad
+Industrial and Commercial Bank of China
+97.98
+8,616
+8,447
+Closing balance of the Group's interest in Standard Bank in the
+consolidated statement of financial position
+26,296
+24,969
+208
+ICBC
+Industrial and Commercial Bank of China
+(Almaty) Joint Stock Company
+Commercial banking
+HKD5,963 million
+Almaty, Kazakhstan
+KZT8,933 million
+100
+100
+Industrial and Commercial Bank of China
+(Thai) Public Company Limited ("ICBC Thai")
+Commercial banking
+Bangkok, Thailand
+THB23,711 million
+THB20,107 million
+97.86
+KZT8,933 million
+Goodwill
+100
+ICBC International Holdings Limited
+163,283
+163,283
+2,712
+160,571
+160,571
+2,712
+2021
+2022
+31 December
+31 December
+ICBC
+206
+Unlisted investments, at cost
+Listed investments, at cost
+(iii) Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from February 2023 to November 2032 and bear interest rates ranging from 3.86% to 6.60%
+per annum.
+This includes Huarong bonds of RMB90,309 million (31 December 2021: RMB90,309 million). Huarong bonds are a series
+of long-term bonds issued by China Huarong Asset Management Co., Ltd. ("Huarong") in the year of 2000 and 2001 to
+the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the issuance of the bonds were used to
+purchase non-performing loans of the Bank. The bonds are non-negotiable, with a tenure of 10 years and bear interest at a
+fixed rate of 2.25% per annum. The MOF provides funding support for the repayment of principal and interest of the bonds.
+In 2010, the Bank received a notice from the MOF that the maturity dates of the Huarong bonds were extended for ten
+years. In 2020, the Bank received a notice from the MOF to adjust the interest rate of the Huarong bonds, starting from 1
+January 2020. Interest rate would be determined on yearly basis with reference to the average level of five-year government
+bond yield in the previous year. In January 2021, the Bank received notice from the MOF that the maturity dates of Huarong
+bonds were further extended for ten years. As at 31 December 2022, the Bank had received accumulated early repayments
+amounting to RMB222,687 million (31 December 2021: RMB222,687 million).
+RMB7,980 million
+(ii)
+7,957
+118
+2,200
+5,639
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Nominal value of
+issued share/
+(Asia) Limited ("ICBC Asia")
+Commercial banking
+Hong Kong SAR, the PRC
+Principal
+activities
+and operations
+by the Bank
+HKD54,738 million
+HKD44,188 million
+100
+100
+Industrial and Commercial Bank of China
+100
+2022
+2022
+Name
+registration
+Place of
+incorporation/
+Amount
+invested
+31 December
+31 December
+31 December
+paid-in capital
+Percentage of equity interest %
+2021
+(8)
+16,522
+Group's share of net assets of the associate
+*
+These subsidiaries incorporated in Chinese mainland are all limited liability companies.
+As at 31 December 2022, the voting rights of subsidiaries of the Group are in line with the Group's equity interests. As
+at 31 December 2021, the Group held 97.98% voting rights of ICBC Thai. Apart from ICBC Thai, voting rights of other
+subsidiaries of the Group are in line with the Group's equity interests.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+Annual Report 2022
+207
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Interests in associates
+Interests in joint ventures
+Share of net assets
+Goodwill
+Less: Allowance for impairment losses
+31 December
+2022
+31 December
+2021
+62,661
+60,572
+Commercial banking
+Chongqing, the PRC
+RMB100 million
+RMB100 million
+100
+RMB27,000 million
+RMB27,000 million
+Nanjing, the PRC
+("ICBC Investment")
+Leasing
+Insurance
+Financial asset
+investment
+ICBC Wealth Management Co., Ltd.*
+100
+100
+3,217
+65,878
+RMB16,000 million
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd. *
+60
+60
+RMB200 million
+RMB120 million
+Beijing, the PRC
+Zhejiang, the PRC
+Wealth management
+Commercial banking
+Chongqing Bishan ICBC Rural Bank Co., Ltd. *
+100
+100
+RMB16,000 million
+17,680
+1,210
+31 December
+The accounting policies of Standard Bank are consistent with those of the Group. Its financial information is significant to
+the Group and summarised as follows:
+The associate
+Assets
+Liabilities
+Net assets
+As at/year ended
+31 December 2022
+As at/year ended
+31 December 2021
+1,177,404
+1,071,270
+1,091,181
+993,965
+Profit from continuing operations
+106,134
+97,216
+14,398
+10,725
+Equity method of the associate
+Net assets of the associate attributable to the parent company
+91,322
+82,364
+Group's effective interest
+19.36%
+20.06%
+Standard Bank Group Limited ("Standard Bank") is a listed commercial bank registered in Johannesburg, the Republic of
+South Africa with an issued capital of ZAR168 million and a strategic partner of the Group. As at 31 December 2022, the
+Group's equity interest and voting rights were 19.36% (31 December 2021: 20.06%).
+61,782
+65,878
+37,161
+31 December
+2022
+2021
+51,349
+47,108
+14,894
+15,039
+66,243
+62,147
+(365)
+61,782
+(365)
+61,782
+(a) Carrying value of the Group's associates and joint ventures are as follows:
+Standard Bank
+Other
+31 December
+31 December
+2022
+2021
+25,948
+24,621
+39,930
+65,878
+(3)
+This includes a special government bond, which is a non-negotiable bond with a nominal value of RMB85,000 million (31
+December 2021: RMB85,000 million) issued by the Ministry of Finance of the People's Republic of China (the "MOF") to the
+Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+2,892
+12
+(12)
+Balance at 31 December 2021
+Other movements
+Charge for the year
+- to stage 3
+- to stage 2
+- to stage 1
+Transfer:
+2,468
+240
+22
+2,206
+Balance at 1 January 2021
+Total
+Stage 3
+Stage 2
+Stage 1
+9,328
+3,527
+1,009
+4,792
+Balance at 31 December 2022
+(44)
+137
+44
+322
+510,609
+559,808
+523,274
+5,661,784
+6,437,548
+Corporate entities
+Banks and other financial institutions (ii)
+Policy banks
+Governments and central banks (i)
+31 December
+2021
+2022
+31 December
+Debt securities (analysed by type of issuers):
+(c) Financial investments measured at amortised cost
+4,370
+(75)
+(13)
+1,341
+355
+2,674
+(1)
+(61)
+1,977
+1,070
+585
+9
+21
+107
+91,370
+84,655
+5,414
+4,506
+2,656
+3,965
+5,252
+Listed outside Hong Kong SAR
+Unlisted
+Listed in Hong Kong SAR
+Equity investments:
+Unlisted
+Other debt investments:
+1,704,164
+2,079,640
+1,355,305
+1,687,369
+Unlisted
+229,406
+299,962
+Listed outside Hong Kong SAR
+119,453
+92,309
+Listed in Hong Kong SAR
+93,126
+99,440
+2,178,018
+1,803,604
+Other movements
+4,821
+2,072
+545
+2,204
+Charge for the year
+105
+(86)
+(19)
+- to stage 3
+174
+432,980
+(174)
+- to stage 1
+Transfer:
+Total
+4,370
+Stage 3
+1,341
+Stage 2
+355
+Stage 1
+2,674
+Balance at 1 January 2022
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+204
+The Group designates certain non-trading equity investments as financial investments measured at FVTOCI. In 2022,
+dividend income from such equity investments was RMB4,072 million (2021: RMB3,388 million), of which RMB541 million
+dividend income relates to derecognised equity investments (2021: RMB291 million). The value of equity investments
+disposed of was RMB12,337 million (2021: RMB6,963 million) and the cumulative gains transferred into retained profits
+from other comprehensive income after disposal was RMB429 million (2021: cumulative losses of RMB334 million).
+Allowance for impairment losses on financial investments measured at FVTOCI is recognised in other comprehensive income
+without decreasing the carrying amount of financial investments presented in the consolidated statement of financial
+position, and any impairment gain or loss is recognised in the profit or loss. Movements of the allowance for impairment
+losses on financial investments measured at FVTOCI are as follows:
+- to stage 2
+64,055
+61,257
+Accrued interest
+Other movements
+24,568
+1,772
+(241)
+23,037
+830
+(830)
+3
+(3)
+Charge/(reverse) for the year
+-to stage 3
+-
+- to stage 2
+7,957
+Total
+Stage 3
+118
+Stage 2
+2,200
+Stage 1
+5,639
+- to stage 1
+Transfer:
+Balance at 1 January 2022
+Movements of the allowance for impairment losses on financial investments measured at amortised cost are as follows:
+(In RMB millions, unless otherwise stated)
+68
+(21)
+47
+Balance at 31 December 2022
+(116)
+3,008
+(i)
+Balance at 31 December 2021
+Other movements
+Charge/(reverse) for the year
+- to stage 3
+- to stage 2
+(402)
+402
+- to stage 1
+Notes to the Consolidated Financial Statements
+Transfer:
+121
+Total
+Stage 3
+Stage 2
+2,718
+2,234
+Balance at 1 January 2021
+Stage 1
+32,572
+2,699
+1,132
+28,741
+5,073
+(5)
+205
+179,807
+7,634,395
+(7,957)
+(32,572)
+Less: Allowance for impairment losses
+6,838,890
+Annual Report 2022
+122
+38,463
+6,830,933
+40,678
+40,575
+103
+Accrued interest
+Other investments (iii)
+6,800,427
+7,626,289
+84,598
+90,803
+38,341
+Analysed into:
+7,666,967
+Listed in Hong Kong SAR
+Debt securities:
+36,094
+36,094
+36,832
+36,832
+7,634,395
+223,682
+Market value of listed securities
+Unlisted
+Other investments:
+6,794,839
+6,830,933
+6,615,869
+7,597,563
+32,267
+31,439
+25. INVESTMENTS IN SUBSIDIARIES
+194,467
+147,531
+7,370,829
+Listed outside Hong Kong SAR
+Unlisted
+361,994
+454,566
+250,349
+199,465
+12,905,739
+15,148,817
+8,553,919
+5,798,353
+6,594,898
+14,067,643
+5,390,582
+5,991,387
+7,533,110
+7,107,386
+12,923,692
+41,366
+26,441,774
+2,286
+Disposals and other movements
+(1,374)
+(4)
+(159)
+(6,555)
+(2,779)
+(10,871)
+At 31 December 2021 and 1 January 2022
+75,803
+34
+11,493
+62,340
+2,282
+8,076,256
+Depreciation charge for the year
+7,034
+903
+8,039
+6,710
+22,686
+Impairment charge for the year
+3,477
+3,477
+Disposals and other movements
+(682)
+(37)
+(4,188)
+191,036
+4
+Impairment charge for the year
+20,497
+6,427
+Disposals and other movements
+(1,232)
+(206)
+(143)
+(4,743)
+8,422
+2,098
+At 31 December 2022
+191,703
+17,106
+14,335
+83,383
+198,453
+504,980
+Accumulated depreciation and allowance for
+impairment losses:
+At 1 January 2021
+70,824
+38
+10,786
+61,514
+35,962
+179,124
+Depreciation charge for the year
+6,353
+866
+7,377
+5,901
+(1,199)
+106
+(6,106)
+82,155
+Deferred
+31 December 2021
+Deductible/
+Deferred
+(taxable)
+temporary
+tax
+assets/
+(taxable)
+temporary
+tax
+assets/
+differences
+(liabilities)
+differences
+(liabilities)
+Allowance for impairment losses
+Deductible/
+403,252
+328,794
+81,662
+Change in fair value of financial instruments
+measured at FVTPL
+(2,826)
+ICBC
+218
+(ix) Macau Branch issued notes denominated in USD and MOP at fixed or floating interest rates amounting to an
+equivalent of RMB3,463 million in total with maturities between 2023 and 2024.
+(viii) London Branch issued notes denominated in GBP, USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB14,718 million in total with maturities between 2023 and 2025.
+(vii) Hong Kong Branch issued notes denominated in USD and HKD at fixed or floating interest rates amounting to an
+equivalent of RMB36,450 million in total with maturities between 2023 and 2026.
+Dubai (DIFC) Branch issued notes denominated in RMB and USD at fixed or floating interest rates amounting to an
+equivalent of RMB10,826 million in total with maturities between 2023 and 2025.
+Luxembourg Branch issued notes denominated in USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB9,948 million in total with maturities between 2023 and 2024.
+New York Branch issued notes denominated in USD at fixed interest rates amounting to an equivalent of RMB9,660
+million in total with maturities between 2023 and 2027.
+100,079
+31 December 2022
+Deferred tax assets:
+(a) Analysed by nature
+34
+12,359
+66,191
+50,354
+211,093
+Carrying amount:
+At 31 December 2021
+111,146
+18,182
+2,097
+19,292
+139,579
+290,296
+At 31 December 2022
+109,548
+17,072
+1,976
+17,192
+148,099
+293,887
+Annual Report 2022
+209
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+As at 31 December 2022, the process of obtaining the legal titles for the Group's properties and buildings with
+an aggregate carrying amount of RMB8,372 million (31 December 2021: RMB12,798 million) was still in progress.
+Management is of the view that the aforesaid matter would neither affect the rights of the Group to these assets nor have
+any significant impact on the business operation of the Group.
+As at 31 December 2022, the carrying amount of aircraft and vessels leased out by the Group under operating leases was
+RMB148,099 million (31 December 2021: RMB139,579 million).
+As at 31 December 2022, the carrying amount of aircraft and vessels owned by the Group that have been pledged as
+collateral for liabilities due to banks and other financial institutions was RMB86,163 million (31 December 2021: RMB92,426
+million).
+As at 31 December 2022, the construction in progress for aircraft and vessels was RMB9,225 million (31 December 2021:
+RMB9,101 million).
+28. DEFERRED TAX ASSETS AND LIABILITIES
+At 31 December 2022
+(11,154)
+4,621
+CIP transfer in/(out)
+(37)
+(66)
+3,217
+Associates
+Standard Bank
+24,969
+2,670
+(344)
+(1,355)
+356
+26,296
+(348)
+Other
+of the year
+35,968
+(2,800)
+1,731
+6
+(1,226)
+137
+36,730
+(17)
+Subtotal
+60,937
+2,914
+(2,800)
+4,401
+(338)
+2,914
+of the year
+Other
+or profits
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Movements of associates and joint ventures investments of the Group are as follows:
+Movements during the year
+Investment
+income
+recognised
+Balance at
+beginning
+Investment
+Investment
+under
+the equity comprehensive cash dividends
+Other
+Declared
+distribution of
+Balance of
+allowance for
+Balance
+impairment
+at end
+at end
+of the year
+increase
+decrease
+Joint ventures
+1,210
+2,095
+(11)
+method
+income
+26
+(2,581)
+493
+63,026
+(365)
+9,212
+10,527
+30,400
+CIP transfer in/(out)
+19,850
+(24,915)
+51
+5,014
+Disposals and other movements
+(2,353)
+(601)
+(232)
+(7,516)
+(3,769)
+(14,471)
+At 31 December 2021 and 1 January 2022
+186,949
+18,216
+13,590
+81,632
+180,945
+481,332
+Additions
+1,365
+10,250
+888
+6,388
+2,659
+21,550
+997
+(vi)
+8,521
+Additions
+Total
+62,147
+5,009
+(2,811)
+4,427
+(338)
+(2,618)
+427
+66,243
+(365)
+27. PROPERTY AND EQUIPMENT
+Office
+equipment
+Aircraft
+Properties and
+buildings
+Construction
+in progress
+Leasehold
+improvements
+and motor
+and
+vehicles
+vessels
+Total
+Cost:
+At 1 January 2021
+168,309
+35,211
+12,825
+79,885
+169,173
+465,403
+1,143
+(v)
+(iv)
+(iii) Singapore Branch issued notes denominated in USD at fixed or floating interest rates amounting to an equivalent of
+RMB35,381 million in total with maturities between 2023 and 2025.
+100 Yuan
+22/09/2020
+20 ICBC 01 Tier 2 Bond
+28/04/2019
+26/04/2034
+26/04/2019
+4.69%
+10,000
+100 Yuan
+24/04/2019
+19 ICBC 04 Tier 2 Bond
+28/04/2019
+26/04/2029
+60,000
+26/04/2019
+45,000
+100 Yuan
+24/04/2019
+19 ICBC 03 Tier 2 Bond
+26/03/2019
+25/03/2034
+4.51% 25/03/2019
+10,000
+100 Yuan
+21/03/2019
+19 ICBC 02 Tier 2 Bond
+26/03/2019
+25/03/2029
+4.40%
+4.20%
+24/09/2020 24/09/2030
+25/09/2020
+15/12/2021
+3.48%
+50,000
+100 Yuan
+13/12/2021
+21 ICBC 02 Tier 2 Bond
+22/01/2021
+21/01/2031
+21/01/2021
+4.15%
+30,000
+100 Yuan
+19/01/2021
+21 ICBC 01 Tier 2 Bond
+17/11/2020
+16/11/2035
+16/11/2020
+4.45%
+10,000
+100 Yuan
+12/11/2020
+20 ICBC 03 Tier 2 Bond
+17/11/2020
+16/11/2020 16/11/2030
+4.15%
+30,000
+100 Yuan
+12/11/2020
+20 ICBC 02 Tier 2 Bond
+25/03/2019
+4.26%
+45,000
+100 Yuan
+314,323
+1,768
+1,749
+130,558
+108,698
+188,243
+203,876
+(b)
+Accrued interest
+Issued by subsidiaries
+Issued by the Bank
+Other debt securities issued
+470,806
+591,630
+8,002
+10,365
+Accrued interest
+4,116
+458,688
+571,848
+9,417
+Issued by subsidiaries
+Issued by the Bank
+(a)
+Subordinated bonds and tier 2 capital bonds issued
+31 December
+2021
+2022
+31 December
+36. DEBT SECURITIES ISSUED
+As at 31 December 2022, the Group's pledged deposits included in above amounted to RMB201,787 million (31 December
+2021: RMB228,227 million).
+320,569
+15/12/2031
+905,953
+As at 31 December 2022, the amount of debt securities issued that were due within one year was RMB122,602 million (31
+December 2021: RMB124,031 million).
+21/03/2019
+19 ICBC 01 Tier 2 Bond
+30/08/2011
+30/06/2031
+30/06/2011
+5.56%
+38,000
+100 Yuan
+29/06/2011
+11 ICBC 01
+Circulation date
+date
+Value date
+rate
+(In RMB million)
+(In RMB)
+Issue date
+Name
+Maturity
+Coupon
+Issued and
+nominal amount
+Issue price
+As approved by the PBOC and the CBIRC, the Bank issued callable subordinated bonds and tier 2 capital bonds through
+open market bidding. These subordinated bonds and tier 2 capital bonds were traded on the National Interbank Bond
+Market. The relevant information is set out below:
+The Bank:
+(a) Subordinated bonds and tier 2 capital bonds issued
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+216
+In 2022, the Group has not had any defaults in respect of payments of principal or interest or other breaches with respect
+to the bonds (2021: Nil).
+791,375
+29,870,491
+16/12/2021
+13/12/2021
+Currency
+Issue date
+Name
+(In original
+(In original
+Ending
+balance
+Issued
+amount
+Issued
+price
+In 2015, the Bank issued tier 2 capital bonds denominated in USD. The bonds were approved for listing and dealing by The
+Stock Exchange of Hong Kong Limited. The relevant information is set out below:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+217
+Annual Report 2022
+currency)
+The Bank has the option to redeem these bonds in whole or in part on specific dates at par value in future upon the
+approval of the relevant regulatory authorities.
+22/12/2037
+22/12/2022
+23/12/2022
+22/12/2032
+22/12/2022
+3.70%
+3.85%
+5,000
+100 Yuan
+20/12/2022
+25,000
+100 Yuan
+20/12/2022
+22 ICBC 05A Tier-2 Capital Bonds
+22 ICBC 05B Tier-2 Capital Bonds
+23/12/2022
+currency)
+(In RMB)
+Coupon
+rate
+Sydney Branch issued notes denominated in AUD, RMB, HKD and USD at fixed or floating interest rates amounting to
+an equivalent of RMB8,600 million in total with maturities between 2023 and 2027.
+Head Office issued debt securities and interbank certificates of deposit, denominated in RMB at fixed interest rates
+amounting to RMB74,830 million in total with maturities between 2023 and 2025.
+(ii)
+(i)
+The Bank:
+(b) Other debt securities issued
+The above tier 2 capital bonds are separately traded on the Thai Bond Market Association, The Stock Exchange of Hong
+Kong Limited and the National Interbank Bond Market.
+On 15 March 2022, ICBC-AXA issued a capital supplementary bond with an aggregate nominal amount of RMB5,000
+million, bearing an initial fixed interest rate of 3.7%. The bond will mature on 17 March 2032. The issuer has an option to
+redeem the capital supplementary bond in whole or in part at par values at the end of the fifth interest-bearing year. If the
+issuer does not exercise the redemption option, the coupon rate would increase to 4.7% from the sixth interest-bearing
+year.
+On 12 September 2019, ICBC Macau issued a tier 2 capital bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 2.875%. The bond will mature on 12 September 2029.
+On 23 March 2018, ICBC Thai issued a tier 2 capital bond with an aggregate nominal amount of THB5,000 million, bearing
+a fixed interest rate of 3.5%. The bond will mature on 23 September 2028.
+Subsidiaries:
+The bonds cannot be redeemed before maturity.
+22/09/2015
+21/09/2025
+21/09/2015
+4.875%
+13,900
+2,000
+99.189
+USD
+21/09/2015
+Tier 2 capital bonds
+15 USD
+(million)
+(million)
+(million)
+Circulation date
+Maturity date
+Value date
+11/11/2022
+10/11/2037
+10/11/2022
+10,000 3.34%
+15/04/2022
+14/04/2022 14/04/2032
+3.50%
+45,000
+100 Yuan
+12/04/2022
+22 ICBC 03 Tier 2 Bond
+21/01/2022
+20/01/2037
+20/01/2022
+3.60%
+5,000
+100 Yuan
+18/01/2022
+22 ICBC 02 Tier 2 Bond
+21/01/2022
+20/01/2032
+20/01/2022
+3.28%
+35,000
+100 Yuan
+18/01/2022
+22 ICBC 01 Tier 2 Bond
+16/12/2021
+15/12/2036
+15/12/2021
+3.74%
+10,000
+100 Yuan
+22 ICBC 04 Tier 2 Bond
+21 ICBC 03 Tier 2 Bond
+12/04/2022
+5,000
+100 Yuan
+08/11/2022
+22 ICBC 04B Tier-2 Capital Bonds
+11/11/2022
+10/11/2032
+3.00% 10/11/2022
+50,000
+100 Yuan
+08/11/2022
+22 ICBC 04A Tier-2 Capital Bonds
+23/08/2022
+22/08/2022 22/08/2037
+3.32%
+10,000
+100 Yuan
+18/08/2022
+22 ICBC 03B Tier-2 Capital Bonds
+23/08/2022
+22/08/2032
+22/08/2022
+3.02%
+30,000
+100 Yuan
+18/08/2022
+22 ICBC 03A Tier-2 Capital Bonds
+15/04/2022
+14/04/2037
+14/04/2022
+3.74%
+100 Yuan
+2021
+1,013
+2022
+68
+(1,997)
+67,713
+11,696
+(150)
+79,259
+Annual Report 2022
+211
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Deferred tax liabilities:
+Recognised
+in other
+1 January
+Recognised in
+comprehensive
+31 December
+2021
+profit or loss
+income
+2021
+Allowance for impairment losses
+(937)
+669
+(268)
+Change in fair value of financial instruments
+measured at FVTPL
+1,809
+1,826
+3,635
+(943)
+(1,122)
+Other
+8,684
+(631)
+(1,193)
+3,800
+Deferred tax assets:
+Recognised
+in other
+1 January
+2021
+Recognised in
+profit or loss
+comprehensive
+31 December
+income
+2021
+Allowance for impairment losses
+70,094
+Change in fair value of financial instruments
+measured at FVTOCI
+11,568
+Change in fair value of financial instruments
+measured at FVTPL
+(2,470)
+(985)
+(3,455)
+Change in fair value of financial instruments
+measured at FVTOCI
+(5,417)
+(218)
+(5,635)
+Accrued staff costs
+6,628
+2,056
+-
+81,662
+1,149
+(459)
+690
+Interest receivable
+Other
+6,204
+6,211
+2,941
+2,283
+113,832
+110,574
+618,263
+717,915
+Less: Allowance for impairment losses
+(12,579)
+(10,053)
+605,684
+Repossessed assets
+707,862
+ICBC
+(a) Right-of-use assets
+Cost:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Aircraft
+Office
+Properties
+and
+and buildings
+vessels
+equipment and
+motor vehicles
+Total
+At 1 January 2021
+30,529
+212
+5,624
+8,242
+8,518
+Other
+860
+707
+1,567
+2,881
+3,202
+(459)
+5,624
+As at 31 December 2022, the Group did not have significant unrecognised deferred tax assets (31 December 2021: Nil).
+29. OTHER ASSETS
+31 December
+2022
+31 December
+2021
+Precious metals
+6,056
+275,183
+Settlement and clearing balances
+156,278
+267,342
+Right-of-use assets
+(a)
+33,653
+31,913
+Land use rights
+14,935
+15,593
+Goodwill
+Advance payments
+(b)
+9,181
+267,239
+16,550
+2,035
+1,567
+liabilities/
+differences
+(assets)
+differences
+(assets)
+Allowance for impairment losses
+1,086
+130
+(535)
+(268)
+Change in fair value of financial instruments
+measured at FVTPL
+9,906
+2,138
+15,692
+3,635
+Change in fair value of financial instruments
+measured at FVTOCI
+(2,607)
+(503)
+2,737
+690
+Other
+8,172
+2,035
+6,285
+1,567
+16,557
+3,800
+temporary
+liabilities/
+temporary
+Deferred
+tax
+(3,455)
+Change in fair value of financial instruments
+measured at FVTOCI
+(9,645)
+(2,786)
+(22,620)
+(5,635)
+Accrued staff costs
+43,808
+10,929
+34,823
+8,684
+Other
+(23,466)
+24,179
+(5,861)
+(1,997)
+411,123
+101,600
+319,327
+79,259
+Deferred tax liabilities:
+31 December 2022
+31 December 2021
+Taxable/
+Deferred
+Taxable/
+(deductible)
+tax
+(deductible)
+(7,847)
+5,624
+210
+ICBC
+(5,861)
+79,259
+19,476
+2,865
+101,600
+Deferred tax liabilities:
+Recognised
+in other
+1 January
+Recognised in
+comprehensive
+31 December
+2022
+profit or loss
+income
+16
+2022
+(268)
+398
+130
+Change in fair value of financial instruments
+measured at FVTPL
+3,635
+(1,497)
+2,138
+Change in fair value of financial instruments
+measured at FVTOCI
+690
+(1,193)
+(503)
+Other
+Allowance for impairment losses
+468
+(3,880)
+Other
+(b) Movements of deferred income tax
+Deferred tax assets:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Recognised
+in other
+31 December
+1 January
+Recognised in
+comprehensive
+2022
+profit or loss
+income
+Allowance for impairment losses
+81,662
+(1,997)
+18,417
+Change in fair value of financial instruments
+measured at FVTPL
+(3,455)
+2,694
+(761)
+Change in fair value of financial instruments
+measured at FVTOCI
+(5,635)
+2,849
+(2,786)
+Accrued staff costs
+8,684
+2,245
+10,929
+2022
+100,079
+31 December
+946
+Additions
+24,449
+2,807
+384
+27,640
+37,741
+2,907
+(1,548)
+87
+40,200
+691,075
+182,419
+(87,849)
+9,616
+3,232
+798,493
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Deposits:
+31 December
+31 December
+2022
+2021
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+2,524,293
+2,286,492
+137,552
+143,928
+3,056
+1,269
+2,664,901
+13,685
+338
+(1,121)
+3,477
+47
+1,466
+Reverse repurchase agreements
+128
+338
+88 - 9
+475
+Loans and advances to
+customers
+603,983
+143,173
+(85,157)
+9,529
+1,234
+2,431,689
+672,762
+12,327
+29,389
+(23)
+207
+41,900
+Investments in associates and
+joint ventures
+Property and equipment
+Credit commitments
+Other
+Total
+365
+365
+10,991
+Financial investments
+Money market takings:
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+213,002
+Cash received as collateral on securities lending
+Accrued interest
+34. CERTIFICATES OF DEPOSIT
+31 December
+31 December
+2022
+2021
+6,430
+545,080
+8,110
+341,718
+16,814
+16,015
+6,454
+100
+574,778
+Repurchase agreements-securities
+365,943
+Annual Report 2022
+215
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+35. DUE TO CUSTOMERS
+Demand deposits:
+Corporate customers
+Personal customers
+Time deposits:
+Corporate customers
+Personal customers
+Other
+Accrued interest
+31 December
+Certificates of deposit issued by certain of the Bank's overseas branches and subsidiaries are measured at amortised cost.
+328
+Repurchase agreements-bills
+In 2022 and 2021, there were no significant changes in the credit spread of the Group and therefore the amounts of
+changes in fair value of the financial liabilities arising from changes in the credit risk and the accumulated amounts as at the
+end of the respective years were not significant. The changes in fair value of the financial liabilities were mainly attributable
+to changes in other market factors.
+226,907
+300,860
+258,465
+6,801
+3,968
+520,663
+489,340
+3,185,564
+2,921,029
+214
+ICBC
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+32. FINANCIAL LIABILITIES MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Financial liabilities related to precious metals
+33. REPURCHASE AGREEMENTS
+and account-based investment products (i)
+Debt securities issued (i)
+31 December
+31 December
+2022
+2021
+55,549
+64,488
+5,218
+18,409
+3,359
+4,283
+64,126
+87,180
+(i)
+Financial liabilities related to precious metals and account-based investment products, and certain issued debt securities have
+been matched with precious metals and derivatives of the Group as part of a documented risk management strategy to
+mitigate market risk. An accounting mismatch would arise if these financial liabilities were accounted for at amortised cost,
+whereas the related precious metals and derivative were measured at fair value with movements in fair value taken through
+the statement of profit or loss. By designating these financial liabilities at FVTPL, the movement in their fair values is recorded
+in the statement of profit or loss. As at 31 December 2022 and 31 December 2021, the difference between the fair values
+of the financial liabilities related to precious metals, account-based investment products and issued debt securities and the
+amounts that the Group would be contractually required to pay to the holders of the financial liabilities related to precious
+metals, account-based investment products and issued debt securities upon maturity was not significant.
+Other
+48,025
+1,091
+Due from banks and other
+7,011
+570
+116
+7,697
+Decreases and other movements
+(2,582)
+(222)
+(33)
+(2,837)
+At 31 December 2021 and 1 January 2022
+16,524
+2,075
+218
+18,817
+Depreciation charge for the year
+6,892
+624
+117
+7,633
+Decreases and other movements
+(2,260)
+817
+(10)
+(1,453)
+At 31 December 2022
+21,156
+3,516
+325
+24,997
+Depreciation charge for the year
+13,957
+135
+1,727
+6,926
+91
+7,017
+Decreases and other movements
+(3,191)
+(441)
+(680)
+(4,312)
+At 31 December 2021 and 1 January 2022
+34,264
+16,109
+357
+50,730
+Additions
+Allowance for impairment losses:
+6,632
+6,700
+Decreases and other movements
+(3,059)
+4,309
+(30)
+1,220
+At 31 December 2022
+37,837
+20,418
+395
+58,650
+Accumulated depreciation:
+At 1 January 2021
+12,095
+68
+At 1 January 2021
+42
+274
+2022
+2021
+8,518
+8,945
+663
+(427)
+9,181
+8,518
+(382)
+(349)
+8,799
+8,169
+Goodwill arising from business combinations has been allocated to the Group's cash-generating units ("CGU"), which is not larger
+than the reportable segment of the Group, for impairment testing.
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash flow
+projections are based on financial forecasts approved by management of the subsidiaries. The average growth rates are projected
+based on the similar rates which do not exceed the long-term average growth rate for the business in which the CGU operates in.
+The discount rate is the before-tax rate and reflects the specific risk associated with the CGU.
+32,763
+Annual Report 2022
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+30. IMPAIRMENT ALLOWANCE
+At
+1 January
+2022
+Charge for
+the year
+Write-offs
+and
+transfer
+out
+Recoveries
+of
+previous
+write-offs
+At
+31 December
+Other
+2022
+213
+financial institutions
+70
+16,646
+Decreases and other movements
+(10)
+(55)
+At 31 December 2021 and 1 January 2022
+32
+219
+Other movements
+3
+636
+At 31 December 2022
+35
+855
+316
+(65)
+16,047
+251
+890
+Carrying amount:
+At 31 December 2021
+At 31 December 2022
+(b)
+Goodwill
+At 1 January
+Exchange difference
+Subtotal
+Less: Allowance for impairment losses
+17,708
+13,815
+139
+31,662
+639
+(13,823)
+(761)
+5,113
+(vi) Redemption conditions
+Subject to obtaining the approval of the CBIRC and satisfying the conditions of redemption, the Bank has the right to
+redeem all or part of the Offshore Preference Shares at the first call date and any subsequent dividend payment date.
+Redemption price of Offshore Preference Shares is equal to liquidation preference price plus any declared but unpaid
+dividend in current period. The first redemption date of Offshore Preference Shares is five years after issuance.
+Under the premise of obtaining the approval of the CBIRC and compliance with relevant requirements, the Bank has the
+right to redeem all or part of Domestic Preference Shares, after five years having elapsed since the date of issuance/the date
+of closing. The redemption period of Domestic Preference Shares is from the start date of redemption to the date of full
+redemption or conversion. Redemption price of Domestic Preference Shares is equal to book value plus any declared but
+unpaid dividend in current period.
+222
+ICBC
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(c) Changes in preference shares outstanding
+1 January 2022
+Financial
+In original
+Movement during the year
+In original
+31 December 2022
+In original
+instrument
+Amount
+outstanding
+(million shares)
+Shares:
+Offshore Preference
+In RMB
+(million)
+(million)
+(million) (million shares)
+currency
+The initial mandatory conversion prices are HKD5.73 for Offshore Preference Shares per H share; RMB3.44 for Domestic
+2015 Preference Shares and RMB5.43 for Domestic 2019 Preference Shares. In case of stock dividends distribution of H or
+A shares of the Bank or other circumstances, the Bank will make cumulative adjustment to the compulsory conversion price
+in turn.
+Amount
+currency
+(million)
+(million shares)
+(million)
+Amount
+In RMB
+currency
+(million)
+In RMB
+USD
+For Domestic Preference Shares, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Common Equity Tier
+1 Capital Adequacy Ratio of the Bank falling to 5.125% or below), the Bank shall have the right without the need for the
+consent of the domestic preference shareholders to convert all or part of the outstanding face value of Domestic Preference
+Shares into A shares, in order to restore the Common Equity Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%. If
+Domestic Preference Shares were converted into A shares, they cannot be converted to Preference Shares again under any
+circumstances. Upon the occurrence of a Tier 2 Capital Trigger Event, the Bank shall have the right without the need for the
+consent of the domestic preference shareholders to convert all the outstanding face value of Domestic Preference Shares
+into A shares. If Domestic Preference Shares were converted into A share, they cannot be converted to Preference Shares
+again under any circumstances.
+(v) Mandatory conversion trigger events
+18/11/2015 Equity
+19/09/2019 Equity
+4.58% RMB100/Share
+4.20% RMB100/Share
+50
+450
+45,000
+45,000 None
+Mandatory
+No
+700
+70,000
+70,000
+None
+Mandatory
+No
+Total
+134,716
+(b) Main clauses and basic information
+The offshore preference shareholders and domestic preference shareholders will rank equally for payment. The preference
+shareholders will be subordinated to the depositors, general creditors and holders of convertible bonds, holders of
+subordinated debts, holders of tier 2 capital bonds and holders of other tier 2 capital instruments of the Bank, but will be
+senior to the ordinary shareholders of the Bank.
+(iv) Order of distribution and liquidation method
+The Bank shall distribute dividends for Offshore and Domestic Preference Shares in cash, based on the liquidation preference
+amount for the issued and outstanding Offshore Preference Shares or total amount of issued and outstanding Domestic
+Preference Shares during the corresponding period (i.e. the product of the issue price of Preference Shares and the number
+of the issued and outstanding preference shares).
+Non-cumulative dividend is a dividend on Offshore and Domestic Preference Shares which does not cumulate upon omission
+of payment and the passed or omitted dividend of one year is not carried to the following year. After receiving a dividend
+at the agreed dividend rate, preference shareholders of the Bank will not participate in the distribution of residual profits
+with ordinary shareholders.
+For Offshore and Domestic Preference Shares, if the Bank cancels all or part of the dividends to the Preference Shares, the
+Bank shall not make any dividend distribution to ordinary shareholders before the Bank pays the dividends to the preference
+shareholders in full for the current dividend period.
+(iii) Dividend stopper and setting mechanism
+For Offshore Preference Shares, upon the occurrence of any Non-Viability Trigger Event, the Bank shall have the right
+to irrevocably and compulsorily convert all or part of the outstanding Offshore Preference Shares into H shares, under
+the consent of the CBIRC but without the need for the consent of the offshore preference shareholders or the ordinary
+shareholders. If the Offshore Preference Shares were converted into H shares, they cannot be converted to Preference
+Shares again under any circumstances.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2022
+The Bank can pay offshore and domestic dividends when it has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratios meet
+regulatory requirements. Preference shareholders of the Bank are senior to the ordinary shareholders in respect of the right
+to dividends. The order of payment of Domestic Preference Shares is equal to Offshore Preference Shares. The Bank may
+elect to cancel all or part of offshore and domestic dividends and this shall not constitute a default for any purpose, but
+such cancellation will require a shareholder's resolution to be passed.
+(ii) Conditions to distribution of dividends
+Offshore and domestic dividends are set at a fixed rate for 5 years after issuance, and are reset every 5 years thereafter
+to the sum of the benchmark rate and the fixed spread. The fixed spread is equal to the spread between the initial
+offshore and domestic dividend rate and the benchmark rate at the time of issuance. The fixed spread remains unchanged
+throughout the term of the Preference Shares.
+Offshore and domestic dividends are paid annually.
+(i) Dividend
+221
+RMB2019
+1445
+2,900
+Amount
+(million
+In original
+currency
+In RMB
+Conversion
+rate
+Issue price
+units)
+(million)
+(million) Maturity condition Conversion
+Offshore
+USD Perpetual bond
+24/09/2021
+Equity
+3.20%
+Note (i)
+NA
+RMB100/Unit
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+4.45%
+Equity
+26/07/2019
+Perpetual bond
+Interest
+RMB2019
+No
+None
+None
+39,793
+6,160
+N/A
+Domestic
+145
+Accounting
+classification
+Initial
+19,716
+45
+145
+2,900
+19,716
+Domestic Preference
+Shares:
+RMB2015
+450
+45,000
+45,000
+RMB2019
+700
+70,000
+70,000
+700
+Total
+outstanding
+instrument
+Financial
+(a) Perpetual bonds outstanding
+(2) Perpetual bonds
+The carrying amount of preference shares issued by the Bank, net of related issuance fees, was RMB134,614 million as at
+31 December 2022 (31 December 2021: RMB134,614 million).
+Issue date
+134,716
+70,000
+700
+45,000
+45,000
+450
+134,716
+70,000
+RMB2015
+Shares:
+Domestic Preference
+15
+384
+Balance at 31 December 2022
+20,783
+6,611
+246
+27,640
+Stage 1
+Stage 2
+Balance at 1 January 2021
+22,021
+2,957
+Stage 3
+1,732
+Total
+26,710
+Transfer:
+- to stage 1
+Other movements
+(1,966)
+(735)
+670
+(1,901)
+(Reverse)/charge for the year
+56
+2
+- to stage 3
+120
+(120)
+- to stage 2
+(121)
+121
+(2)
+(240)
+313
+2,807
+28,629
+28,340
+Annual Report 2022
+219
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(c) Provisions for credit commitments
+Balance at 1 January 2022
+Transfer:
+Stage 1
+Stage 2
+19,881
+3,581
+Stage 3
+987
+Total
+24,449
+- to stage 1
+(740)
+2,860
+687
+Charge/(reverse) for the year
+14
+(12)
+Other movements
+(2)
+(30)
+249
+(219)
+- to stage 2
+(123)
+123
+- to stage 3
+(43)
+(12)
+(295)
+39. OTHER EQUITY INSTRUMENTS
+(1) Preference shares
+(a) Preference shares ("Preference Shares") outstanding:
+Amount
+In original
+Financial instrument
+outstanding
+Accounting
+Issue date classification
+Dividend
+(million
+currency
+In RMB
+Conversion
+rate Issue price
+shares)
+(million)
+(million) Maturity
+condition
+No
+Mandatory
+None
+19,716
+2,900
+45
+Except for the dividends of H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+145
+Equity
+23/09/2020
+USD
+Shares:
+Offshore Preference
+Conversion
+3.58% USD20/Share
+356,407
+356,407
+356,407
+31 December 2022
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+A shares of RMB1 Yuan each
+H shares of RMB1 Yuan each
+Issued and fully paid:
+Number
+38. SHARE CAPITAL
+220
+24,449
+987
+3,581
+19,881
+Balance at 31 December 2021
+ICBC
+800
+of shares
+(millions)
+Number
+356,407
+269,612
+269,612
+269,612
+269,612
+86,795
+31 December 2021
+86,795
+86,795
+Nominal
+value
+(millions)
+value
+of shares
+Nominal
+86,795
+80,000
+80,000
+None
+reserve
+reserve
+Other
+Total
+1 January 2021
+22,377
+(27,882)
+(4,923)
+(10,428)
+Movement during the year
+2,251
+(12,117)
+1,951
+(7,915)
+31 December 2021 and 1 January 2022
+24,628
+(39,999)
+Reverse repurchase agreements with original maturity of three months or less
+749,854
+649,929
+1,926,851
+1,436,757
+228
+Foreign
+currency
+translation
+ICBC
+(1,038)
+22,758
+(23,861)
+Movement during the year
+(18,343)
+(2,972)
+(2,141)
+157,323
+Investment
+revaluation
+41. OTHER COMPREHENSIVE INCOME
+Annual Report 2022
+225
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+40. RESERVES
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(b) Surplus reserves
+(i) Statutory surplus reserve
+The Bank is required to appropriate 10% of its profit for the year, as determined under the Accounting Standards for
+Business Enterprises and other relevant requirements ("PRC GAAP"), pursuant to the Company Law of the PRC and the
+Articles of the Bank to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2023, the total appropriation to surplus
+reserve of the Bank was RMB34,411 million (2021: RMB32,494 million), among which an appropriation of 10% of
+the profit of the Bank for the year determined under the PRC GAAP to the statutory surplus reserve, in the amount of
+RMB34,343 million (2021: RMB32,438 million) was approved and a total surplus reserve appropriated by overseas branches
+was RMB68 million (2021: RMB56 million) pursuant to the requirements of local authorities.
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under the PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meeting.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserve
+The Bank's overseas entities appropriate their profits to other surplus reserve or statutory reserve in accordance with the
+relevant laws and regulations promulgated by the local regulatory bodies.
+(c) General reserve
+The Bank's distributable profit is based on its retained profits as determined under PRC GAAP and IFRSS, whichever is
+lower. The amount that the Bank's subsidiaries can legally distribute is determined by referring to their profits as reflected
+in their financial statements prepared in accordance with the accounting regulations and principles promulgated by the
+local regulatory bodies. These profits may differ from those dealt with in these financial statements, which are prepared in
+accordance with IFRSS.
+(h) Distributable profits
+Other reserves represent reserves other than the items listed above, including other comprehensive income recognised
+under the equity method.
+(g) Other reserves
+The cash flow hedging reserve comprises the effective portion of the gains or losses on the hedging instruments.
+(f) Cash flow hedging reserve
+(a) Other comprehensive income attributable to equity holders of the parent company in
+the consolidated statement of financial position
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Chinese mainland.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+226
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVTOCI.
+(d) Investment revaluation reserve
+In accordance with the "Administrative Measures for the Provision of Reserves of Financial Enterprises" (Cai Jin [2012] No.
+20) issued by the MOF, the Bank maintains a general reserve within equity, through the appropriation of profit for the year,
+which should not be less than 1.5% of the year-end balance of its risk assets, to partially cover unidentified possible losses.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2023, the total appropriation to general
+reserve of the Bank was RMB53,571 million (2021: RMB97,505 million). The general reserve balance of the Bank as at 31
+December 2022 amounted to RMB480,285 million, which reached 1.5% of the year-end balance of the Bank's risk assets.
+(e) Foreign currency translation reserve
+365,112
+original maturity of three months or less
+Placements with banks and other financial institutions with
+1,827
+3,831
+1,623
+(24,375)
+(4,154)
+3,394
+5,777
+(27,769)
+Changes in fair value of debt instruments measured at FVTOCI
+Less: Amount transferred to profit or loss from other comprehensive
+income and income tax effect
+(i)
+Items that may be reclassified subsequently to profit or loss:
+28
+13
+15
+(25)
+(1,180)
+(2,968)
+(17,241)
+(4,010)
+(20,484)
+Annual Report 2022
+227
+Notes to the Consolidated Financial Statements
+(ii)
+(In RMB millions, unless otherwise stated)
+Items that will not be reclassified to profit or loss:
+2022
+2021
+(i)
+(ii)
+Changes in fair value of equity instruments designated as at FVTOCI
+Other comprehensive income recognised under the equity method
+(iii) Other
+(b) Other comprehensive income in the consolidated statement of profit or loss and other
+comprehensive income
+Credit losses of debt instruments measured at FVTOCI
+(iii)
+Cash flow hedging reserve:
+Cash on hand
+Balances with central banks other than restricted deposits
+Deposits with banks and other financial institutions with
+original maturity of three months or less
+31 December
+31 December
+42. CASH AND CASH EQUIVALENTS
+2022
+66,340
+62,872
+516,558
+338,551
+228,987
+228,082
+2021
+(2) Equity attributable to other equity instrument holders of non-controlling interests
+(8,172)
+885
+Gain during the year
+Less: Income tax effect
+1,268
+374
+16
+68
+(3,183)
+1,284
+(iv) Other comprehensive income recognised under the equity method
+(v) Foreign currency translation reserve
+(vi) Other
+(313)
+541
+21,345
+(12,353)
+(1,975)
+442
+29,929
+17,503
+(1) Equity attributable to ordinary shareholders of non-controlling interests
+(i) Interest
+Each Domestic Perpetual Bond has a par value of RMB100, and the interest rate of the bonds for the first five years are
+4.45% for 2019 Domestic Perpetual Bond, 4.04% for 2021 Domestic Perpetual Bond Series 1, and 3.65% for 2021
+Domestic Perpetual Bond Series 2, resetting every 5 years. The rates are determined by a benchmark rate plus a fixed
+spread. The initial fixed spreads are the difference between the interest rate and the benchmark rate as determined at
+the time of issuance. The fixed spread will not be adjusted once determined during the duration period. The interest of
+Domestic Perpetual Bonds shall be paid annually.
+The interest rate of Offshore Perpetual Bond for the first five years is 3.20%, resetting every 5 years. The rate is determined
+by a benchmark rate plus a fixed spread, and the fixed spread will remain unchanged during the duration period. The
+dividend shall be paid semi-annually.
+(ii) Interest stopper and setting mechanism
+The interest payment for both the Domestic Perpetual Bonds and Offshore Perpetual Bond is non-cumulative. The Bank
+shall have the right to cancel, in whole or in part, distributions on the interest payment and any such cancellation shall
+not constitute an event of default. The Bank may, at its sole discretion, use the proceeds from the cancelled distributions
+to meet other obligations as they fall due. However, the Bank shall not distribute profits to ordinary shareholders until
+resumption of full interest payment.
+(iii) Order of distribution and liquidation method
+The claims in respect of Domestic Perpetual Bonds will be subordinated to claims of depositors, general creditors, and
+subordinated indebtedness that rank senior to Domestic Perpetual Bonds, and will rank in priority to all classes of shares
+held by shareholders of the Bank. The claims in respect of Offshore Perpetual Bond will be subordinated to claims of
+depositors, general creditors, tier 2 capital bond holders and subordinated indebtedness that rank senior to the Offshore
+Perpetual Bond, and will rank in priority to all classes of shares held by shareholders of the Bank. Domestic Perpetual
+Bonds and Offshore Perpetual Bond will rank pari passu with the claims in respect of any other Additional Tier 1 Capital
+instruments of the Bank that rank pari passu with the perpetual bonds.
+(iv) Write down conditions
+For 2019 Domestic Perpetual Bond, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Common Equity Tier
+1 Capital Adequacy Ratio of the Bank falling to 5.125% or below), the Bank has the right to write down all or part of the
+total nominal amount of the outstanding 2019 Domestic Perpetual Bond with the consent of the CBIRC but without the
+need for the consent of the bond holders, in order to restore the Common Equity Tier 1 Capital Adequacy Ratio of the Bank
+to above 5.125%. Upon the occurrence of a Tier 2 Capital Trigger Event, without the need for the consent of the bond
+holders, the Bank has the right to write down all the total nominal amount of the outstanding 2019 Domestic Perpetual
+Bond.
+For 2021 Domestic Perpetual Bond Series 1 and 2021 Domestic Perpetual Bond Series 2, upon the occurrence of a Non-
+Viability Trigger Event, the Bank has the right to write down all or part of the nominal amount of the outstanding perpetual
+bonds without the need for the consent of the bond holders.
+For Offshore Perpetual Bond, upon the occurrence of a Non-Viability Trigger Event, the Bank has the right to write down all
+or part of the perpetual bonds issued and outstanding at that time up to the total nominal value without the need for the
+consent of the bond holders.
+224
+ICBC
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(v) Redemption conditions
+The duration of the Domestic Perpetual Bonds and Offshore Perpetual Bond is the same as the continuing operation of
+the Bank. Five years after the issuance date of the Domestic Perpetual Bonds and Offshore Perpetual Bond, the Bank shall
+have the right to redeem them in whole or in part on each distribution payment date (including the fifth distribution
+payment date since the issuance). In the event that the perpetual bonds are not classified as additional tier 1 capital due
+to unpredicted changes in regulations, the Bank shall have the right to redeem Domestic Perpetual Bonds and Offshore
+Perpetual Bond fully instead of partly.
+(c) Changes in perpetual bond outstanding
+(million units)
+Amount
+In RMB
+currency
+Amount
+original
+(In RMB millions, unless otherwise stated)
+original
+In
+In
+In
+31 December 2022
+Movement during the year
+1 January 2022
+original
+(million)
+Notes to the Consolidated Financial Statements
+Annual Report 2022
+None
+No
+RMB2021
+Perpetual bond Series 1
+RMB2021
+04/06/2021
+Equity
+4.04% RMB100/Unit
+700
+70,000
+70,000
+None
+None
+No
+Perpetual bond Series 2
+24/11/2021
+Equity
+3.65% RMB100/Unit
+The funds raised by the Bank from the bonds were used to supplement additional tier 1 capital of the Bank in accordance
+with the relevant laws and approvals by regulatory authorities.
+The Bank issued USD6, 160 million of undated capital bonds (hereinafter referred to as "Offshore Perpetual Bond") on The
+Stock Exchange of Hong Kong Limited on 24 September 2021.
+With the approvals of relevant regulatory authorities, the Bank issued RMB80,000 million, RMB70,000 million and
+RMB30,000 million of undated capital bonds on 26 July 2019, 4 June 2021 and 24 November 2021 (hereinafter referred to
+as "2019 Domestic Perpetual Bond", "2021 Domestic Perpetual Bond Series 1" and "2021 Domestic Perpetual Bond Series
+2" respectively, collectively Domestic Perpetual Bonds) in the National Interbank Bond Market.
+(b) Main clauses and basic information
+Offshore USD Perpetual Bond was issued in specific denomination of USD200,000 and integral multiplies of USD1,000 in
+excess thereof at an issue price of 100%.
+(i)
+223
+219,793
+No
+None
+None
+30,000
+30,000
+300
+Total
+(million)
+(million units)
+currency
+(million)
+800
+80,000
+80,000
+700
+70,000
+70,000
+300
+30,000
+30,000
+219,793
+The carrying amount of perpetual bonds issued by the Bank, net of related issuance fees, was RMB219,717 million as at 31
+December 2022 (31 December 2021: RMB219,717 million).
+(3) Interests attributable to equity instruments' holders
+31 December
+31 December
+Items
+2022
+2021
+17,503
+18,655
+Total equity attributable to non-controlling interests
+2.
+354,331
+354,331
+60
+(2) Equity attributable to other equity instrument holders of the parent company
+3,140,840
+(1) Equity attributable to ordinary shareholders of the parent company
+3,257,755
+3,495,171
+Total equity attributable to equity holders of the parent company
+1.
+2,903,424
+39,793
+6,160
+N/A
+6,160
+N/A
+USD Perpetual bond
+Offshore
+outstanding
+instrument
+39,793
+Financial
+(million)
+(million)____(million units)
+In RMB
+currency
+Amount
+In RMB
+(million)
+18,655
+Domestic
+800
+219,793
+Total
+30,000
+30,000
+300
+RMB2021 Perpetual bond
+Series 2
+RMB2019 Perpetual bond
+70,000
+700
+Series 1
+RMB2021 Perpetual bond
+80,000
+80,000
+00
+70,000
+30,297
+31 December 2022
+4,625
+Insurance contract liabilities
+243,718
+213,457
+Salaries, bonuses, allowances and subsidies payables
+Lease liabilities
+Provisions for credit commitments
+317,591
+이 회
+32,751
+(b)
+28,629
+28,340
+27,640
+24,449
+41,282
+280,230
+Settlement and clearing balances
+31 December
+2021
+767
+Subsidiaries:
+(i) ICBC Asia issued medium-term debt securities and notes denominated in RMB and USD at fixed or floating interest
+rates amounting to an equivalent of RMB5,384 million in total with maturities between 2023 and 2025.
+(!!)
+ICBC Leasing issued medium-term debt securities and notes denominated in RMB and USD at fixed or floating interest
+rates amounting to an equivalent of RMB66,976 million in total with maturities between 2023 and 2031.
+(iii) ICBC Thai issued short-term, medium-term and long-term debt securities and notes denominated in THB at fixed
+interest rates amounting to an equivalent of RMB8,163 million in total with maturities between 2023 and 2026.
+ICBC International issued medium-term debt securities and notes denominated in RMB and USD at fixed interest rates
+amounting to an equivalent of RMB10,294 million in total with maturities between 2023 and 2025.
+(v)
+ICBC New Zealand issued medium-term debt securities and notes denominated in NZD at fixed or floating interest
+rates amounting to an equivalent of RMB2,094 million in total with maturities between 2023 and 2025.
+(vi)
+ICBC Investment issued financial bonds denominated in RMB at fixed interest rates amounting to RMB13,800 million
+in total with maturities between 2024 and 2025.
+(vii) ICBC Macau issued medium-term and long-term debt securities and notes denominated in RMB at fixed interest rates
+amounting to RMB1,987 million in total that will mature in 2024.
+37. OTHER LIABILITIES
+31 December
+2022
+Sundry tax payables
+16,493
+(iv)
+Promissory notes
+Undiscounted lease liabilities
+Ending balance of lease liabilities
+31 December
+31 December
+2022
+2021
+More than five years
+8,923
+6,473
+6,749
+4,542
+5,704
+16,454
+5,210
+8,315
+Three to five years
+4,572
+One to two years
+Two to three years
+756
+Early retirement benefits
+19
+32
+149,188
+155,200
+1,081
+789,355
+Less than one year
+787,955
+Lease liabilities
+Other
+There were no overdue payment for staff salaries, bonuses, allowances and subsidies payable as at 31 December 2022 (31
+December 2021: Nil).
+(a)
+(b)
+31 December
+31 December
+1,284
+2021
+2022
+38,000
+2022
+48,000
+2021
+2022
+31 December
+2,028
+(c) National Council for Social Security Fund of the People's Republic of China
+Interest expense on amounts due to customers
+Transactions during the year:
+Due to customers
+Balances at end of the year:
+National Council for Social Security Fund (the "SSF") is a public institution managed by the MOF. It is the management and
+operating organisation of the national social security fund. As at 31 December 2022, the SSF held approximately 5.72%
+(31 December 2021: approximately 5.69%) of the Bank's issued share capital. The Group entered into banking transactions
+with the SSF in the ordinary course of business under normal commercial terms and the transactions were priced based on
+market rates. Details of the major transactions are as follows:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+235
+Annual Report 2022
+10
+8
+31 December
+Interest expense on amounts due to customers
+(d) Subsidiaries
+2021
+Due to banks and other financial institutions
+Financial investments
+8
+2021
+2022
+60,280
+60,370
+Credit commitments
+8,519
+8,680
+Derivative financial liabilities
+2,581
+Repurchase agreements
+151,307
+187,431
+7,897
+6,183
+Derivative financial assets
+45,269
+79,639
+Loans and advances to customers
+26,481
+15,423
+410,896
+422,401
+33,753
+42,242
+Reverse repurchase agreements
+Due from banks and other financial institutions
+Balances at end of the year:
+2
+7,375
+1,018
+Due to banks and other financial institutions
+Transactions during the year:
+7,767
+Derivative financial assets
+3,794
+1,336
+Loans and advances to customers
+23,796
+49,410
+174,811
+207,170
+536,655
+238,492
+641,257
+Due from banks and other financial institutions
+Debt securities purchased
+Balances at end of the year:
+31 December
+2021
+2022
+31 December
+Huijin holds equity interests in certain other banks and financial institutions under the direction of the State Government.
+The Group entered into transactions with these banks and financial institutions in the ordinary course of business under
+normal commercial terms and the transactions were priced based on market rates. Management considers that these banks
+and financial institutions are competitors of the Group. Details of major transactions conducted with these banks and
+financial institutions are as follows:
+799
+658
+74
+49
+2,306
+Reverse repurchase agreements
+276,415
+Repurchase agreements
+6,200
+2,191
+Interest expense on amounts due to banks and other financial institutions
+52
+37
+Interest income on loans and advances to customers
+42
+12
+Interest income on reverse repurchase agreements
+623
+999
+Interest income on amounts due from banks and other financial institutions
+17,805
+16,174
+Interest income on debt securities purchased
+2021
+2022
+Transactions during the year:
+8,750
+8,821
+Credit commitments
+917
+646
+Due to customers
+6,318
+7,409
+Derivative financial liabilities
+13,246
+Interest expense on repurchase agreements
+Interest income on financial investments
+13,652
+1,386
+44
+2021
+2022
+31 December
+31 December
+Interest expense on amounts due to customers
+Interest income on loans and advances to customers
+Transactions during the year:
+Due to customers
+Loans and advances to customers
+Balances at end of the year:
+(f) Joint ventures and affiliates
+Transactions between the Group and the aforementioned parties were conducted under normal commercial terms and
+conditions and priced based on market rates.
+Interest expense on amounts due to customers
+0
+41
+95
+70
+other financial institutions
+Interest expense on amounts due to banks and
+33
+80
+0
+1
+181
+49
+Interest income on reverse repurchase agreements
+Interest income on loans and advances to customers
+4
+other financial institutions
+18
+2021
+ICBC
+238
+The transactions between the Group and the aforementioned parties were conducted in the ordinary course of business
+under normal terms and conditions and priced based on market rates.
+The Bank's aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties
+according to the relevant rules of CBIRC was RMB 195.17 million as at 31 December 2022 (31 December 2021: RMB183.71
+million).
+The aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB11.32 million as at 31 December 2022 (31 December 2021:
+RMB12.23 million).
+In 2022, there were no material transactions and balances with key management personnel individually or in the aggregate
+(2021: Immaterial). The Group entered into banking transactions with key management personnel in the ordinary course of
+business.
+Related parties of the Group include key management personnel of the Group and their close relatives, as well as
+companies controlled, jointly controlled or significantly influenced by key management personnel or their close relatives.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, Shareholder Supervisors of the Bank, and other Senior Management members have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The total remuneration not yet accrued is
+not expected to have a significant impact on the Group's 2022 consolidated financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+The above remuneration before tax payable to key management personnel for 2021 represents the total amount of their
+annual remunerations, which includes the amount disclosed in the 2021 annual report.
+21,673
+In RMB'000
+In RMB'000
+14,294
+2021
+2022
+Salaries and benefits
+The aggregate compensation of key management personnel is as follows:
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control the
+activities of the Group, directly or indirectly, including members of the board of directors and the board of supervisors, and
+executive officers.
+(g) Key management personnel
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+237
+Annual Report 2022
+Transactions between the Group and the aforementioned parties were conducted in the ordinary course of business under
+normal terms and conditions and priced based on market rates.
+0
+0
+0
+4
+2022
+1,495
+Interest income on amounts due from banks and
+344
+Balances at end of the year:
+2021
+2022
+31 December
+31 December
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(e) Associates and affiliates
+ICBC
+236
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+5,636
+4,108
+Fee and commission income
+22
+Interest expense on repurchase agreements
+599
+3,086
+Interest expense on amounts due to banks and other financial institutions
+653
+1,359
+Interest income on loans and advances to customers
+13
+70
+Interest income on reverse repurchase agreements
+715
+1,666
+Interest income on amounts due from banks and other financial institutions
+Debt securities purchased
+387
+Due from banks and other financial institutions
+11,265
+Interest income on debt securities purchased
+Transactions during the year:
+2021
+2022
+6,145
+5,085
+Credit commitments
+2,436
+3,108
+Derivative financial liabilities
+638
+1,568
+Due to customers
+9,858
+2,250
+Due to banks and other financial institutions
+1,797
+3,085
+Derivative financial assets
+3,672
+3,815
+Loans and advances to customers
+191
+1,469
+1,833
+4,652
+13,162
+Reverse repurchase agreements
+2021
+Interest income on the government bonds
+60,331
+230
+As at 31 December 2022, the par value of the financial assets transferred to third parties that did not qualify for
+derecognition in the repurchase agreements and securities lending transactions were RMB156,154 million and RMB23,314
+million respectively.
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements. The
+counterparties are allowed to sell or repledge those securities in the absence of default by the Group, but has an obligation
+to return the securities at the maturity of the contract. For securities lent out, if the securities increase or decrease in
+value, the Group may in certain circumstances require additional cash collateral from counterparties or return part of
+the cash collateral to counterparties. The Group has determined that it retains substantially all the risks and rewards of
+these securities and therefore has not derecognised them. In addition, it recognises a financial liability for cash received as
+collateral.
+Repurchase transactions and securities lending transactions
+The Group enters into transactions in the ordinary course of business by which it transfers recognised financial assets
+to third parties or structured entities. In some cases, these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continues to recognise the transferred assets.
+44. TRANSFERRED FINANCIAL ASSETS
+The consolidated structured entities of the Group are primarily the principal-guaranteed wealth management products,
+certain investment funds, asset-backed securities and asset management plans issued or initiated and invested by the Group
+or purchased due to regulatory requirements related to wealth management business. The Group controls these entities
+because the Group has power over, is exposed to, or has rights to variable returns from its involvement with these entities
+and has the ability to use its power over these entities to affect the amount of the Group's variable returns.
+(c) Consolidated structured entities
+In 2022, the amount of the average exposure of financing transactions through placements and reverse repurchase
+agreements from the Group with non-principal-guaranteed wealth management products sponsored by the Group was
+RMB21,631 million (2021: RMB26,699 million). The transactions were conducted in the ordinary course of business under
+normal terms and conditions and at market rates.
+As at 31 December 2022, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,143,978 million (31 December 2021:
+RMB2,586,393 million) and RMB1,713,743 million (31 December 2021: RMB1,810,281 million) respectively.
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issuance of investment
+products to investors. Interest held by the Group includes investments in the products issued by these unconsolidated
+structured entities and fees charged for providing management services. As at 31 December 2022 and 31 December 2021,
+the carrying amounts of the investments in the products issued by these structured entities and fee receivables being
+recognised were not material in the consolidated financial statements. Management fee income earned by the Group was
+included in fee and commission income of personal wealth management and private banking services and corporate wealth
+management services set out in Note 7.
+(b) Structured entities sponsored by the Group in which the Group does not consolidate
+but holds an interest
+ICBC
+(In RMB millions, unless otherwise stated)
+229
+Annual Report 2022
+76,064
+2,740
+56,798
+19,468
+1,435
+56,596
+2,740
+18,661
+36,702
+amortised cost
+Notes to the Consolidated Financial Statements
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Securitisation transactions
+The Group transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may
+acquire some asset-backed securities at the subordinated tranche level and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether to derecognise the associated credit assets by
+evaluating the extent to which it retains the risks and rewards of the assets.
+- Financing letters of guarantees
+Guarantees issued
+Bank acceptances
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limits are under the assumption that the amounts will be fully advanced. The
+amounts for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be
+recognised at the end of the reporting period had the counterparties failed to perform as contracted.
+The Group has outstanding commitments to extend credit including approved loans and undrawn credit card limits.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+(b) Credit commitments
+31,307
+19,427
+2021
+2022
+31 December
+31 December
+Contracted but not provided for
+At the end of the reporting period, the Group had capital commitments as follows:
+(a) Capital commitments
+47. COMMITMENTS AND CONTINGENT LIABILITIES
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+231
+Annual Report 2022
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board
+of directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will
+be valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+46. SHARE APPRECIATION RIGHTS PLAN
+The Group's collaterals for liabilities or contingent liabilities include financial assets such as securities and bills, which mainly
+serve as collaterals for repurchase agreements, securities borrowing, derivatives, or local statutory requirements. As at
+31 December 2022, the par value of the financial assets of the Group pledged as collateral amounted to approximately
+RMB940,239 million (31 December 2021: approximately RMB319,877 million).
+45. ASSETS PLEDGED AS SECURITY
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration received is recorded as a financial liability. As at 31 December 2022, transferred
+credit assets that were not qualified for derecognition of the Group amounted to RMB132 million at the time of transfer (31
+December 2021: RMB132 million).
+As at 31 December 2022, the carrying amount of asset-backed securities held by the Group in securitisation transactions
+that were qualified for derecognition was RMB721 million (31 December 2021: RMB973 million), and its maximum exposure
+approximated to the carrying amount.
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the consolidated statement
+of financial position to the extent of the Group's continuing involvement and the rest is derecognised. The extent of the
+Group's continuing involvement is the extent of the risks and rewards undertaken by the Group with value changes of the
+transferred financial assets. As at 31 December 2022, loans with an original carrying amount of RMB627,857 million at
+the time of transfer (31 December 2021: RMB619,736 million) have been securitised by the Group under arrangements in
+which the Group retained a continuing involvement in such assets. The carrying amount of assets that the Group continues
+to recognise on the consolidated statement of financial position was RMB75,925 million as at 31 December 2022 (31
+December 2021: RMB74,121 million).
+FVTOCI
+FVTPL
+Financial
+investments
+measured at
+Financial
+investments
+measured at
+16,732
+16,732
+Trust plans
+77,997
+77,997
+79,311
+79,311
+asset-backed securities
+Asset management plans and
+36,702
+36,702
+41,342
+41,342
+Investment funds
+exposure
+amount
+exposure
+amount
+Maximum
+31 December 2021
+Carrying
+Maximum
+31 December 2022
+Carrying
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+products issued by these structured entities. Such structured entities include investment funds, asset management plans and
+asset-backed securities, trust plans and the Group does not consolidate these structured entities. The nature and purpose
+of these structured entities are to generate fees from managing assets on behalf of investors and are financed through the
+issuance of investment products to investors.
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+43. INTERESTS IN STRUCTURED ENTITIES
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+20,903
+- Non-financing letters of guarantees
+20,903
+137,385
+Financial
+investments
+measured at
+31 December 2021
+61,112
+8,769
+67,504
+15,528
+1,204
+45,584
+8,769
+24,958
+41,342
+Financial
+investments
+measured at
+amortised cost
+FVTOCI
+FVTPL
+Financial
+investments
+measured at
+Financial
+investments
+measured at
+31 December 2022
+Trust plans
+Asset management plans and asset-backed securities
+Investment funds
+Trust plans
+Asset management plans and asset-backed securities
+Investment funds
+The following tables set out an analysis of the line items in the consolidated statement of financial position in which assets
+were recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+The maximum loss exposures in the above investment funds, asset management plans and asset-backed securities, trust
+plans are the carrying amounts which are measured at amortised cost, or the fair value of the investments held by the
+Group as at the reporting date.
+135,602
+135,602
+137,385
+Sight letters of credit
+Usance letters of credit
+Loan commitments
+31 December
+31 December
+Transactions during the year:
+The PRC government bonds and the special government bond
+Balances at end of the year:
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2022, the MOF directly owned approximately 31.14% (31 December
+2021 approximately 31.14%) of the issued share capital of the Bank. The Group entered into banking transactions with
+the MOF in its ordinary course of business. Details of the major transactions are as follows:
+(a) The MOF
+In addition to the transactions detailed elsewhere in these consolidated financial statements, the Group had the following
+transactions with related parties during the reporting year:
+48. RELATED PARTY DISCLOSURES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included
+in "net fee and commission income" set out in Note 7. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+(g) Fiduciary activities
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+233
+Annual Report 2022
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrust agreements signed by the Group and the trustors. The Group does not bear any risk.
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third
+parties as designated by them. The credit risk remains with the trustors.
+2,783,961
+2,783,778
+3,420,373
+3,420,106
+Designated loans
+Designated funds
+2021
+2022
+31 December
+31 December
+(f) Designated funds and loans
+As at 31 December 2022, the Group has not had any outstanding securities underwriting commitments (31 December
+2021: RMB6,350 million).
+2022
+As an underwriting agent of the MOF, the Bank underwrites certain PRC government bonds and sells the bonds to the
+general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to maturity. The
+redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to the redemption
+date. The MOF will not provide funding for the early redemption of these PRC government bonds on a back-to-back basis
+but is obliged to repay the principal and the respective interest upon maturity. The redemption obligations, which represent
+the nominal value of government bonds underwritten and sold by the Group, but not yet matured as at 31 December 2022
+were RMB62,140 million (31 December 2021: RMB75,553 million). Management expects that the redemption obligation of
+these PRC government bonds by the Bank prior to maturity will not be material.
+2021
+1,563,353
+11,813
+19,015
+64,841
+51,083
+2021
+2022
+31 December
+31 December
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+Interest income on debt securities purchased
+Transactions during the year:
+Due to customers
+Loans and advances to customers
+Debt securities purchased
+Balances at end of the year:
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and the transactions were priced based on market rates. Details of the major transactions are as follows:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+234
+As at 31 December 2022, bonds issued by Huijin ("the Huijin Bonds") held by the Group were of an aggregate face value
+of RMB50,237 million (31 December 2021: RMB63,660 million), with terms ranging from one to thirty years and coupon
+rates ranging from 2.15% to 4.38%. The Huijin Bonds are government-backed bonds, short-term bills and medium-term
+notes. The Group's subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance with
+relevant regulatory and the corporate governance requirements of the Group.
+Central Huijin Investment Ltd. ("Huijin") is a wholly-owned subsidiary of China Investment Corporation, and in accordance
+with the authorisation of the State Government, Huijin makes equity investments in major state-owned financial enterprises,
+and shall, to the extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf
+of the State Government in accordance with applicable laws, to achieve the goal of preserving and enhancing the value of
+state-owned financial assets. Huijin does not conduct any other businesses or commercial activities nor intervene in the day-
+to-day business operations of the financial enterprises in which it invests. Huijin was established on 16 December 2003 with
+a total registered and paid-in capital of RMB828,209 million. As at 31 December 2022, Huijin directly owned approximately
+34.71% (31 December 2021: approximately 34.71%) of the issued share capital of the Bank.
+(b) Huijin
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in Note 48(i) "Transactions with state-owned entities in the PRC".
+42,953
+46,812
+2021
+2022
+1,935,944
+2022
+commitments
+In the opinion of management, the Group has made adequate allowance for any probable losses based on the current facts
+and circumstances, and the ultimate outcome of these lawsuits and arbitrations will not have any significant impact on the
+financial position or operations of the Group.
+ICBC
+232
+Credit risk-weighted assets of credit commitments
+2,730,369
+2,971,045
+1,069,406
+1,111,002
+497,892
+348,202
+- With an original maturity of one year or over
+Undrawn credit card limits
+50,199
+108,102
+- With an original maturity of under one year
+114,733
+112,606
+54,466
+53,646
+444,418
+501,054
+50,114
+56,365
+449,141
+680,068
+2021
+2022
+31 December
+31 December
+31 December
+(e) Redemption commitments of government bonds and securities underwriting
+2022
+31 December
+The Group is involved in lawsuits and arbitrations during its normal course of operations. As at 31 December 2022, there
+were a number of legal proceedings and arbitrations outstanding against the Bank and/or its subsidiaries with a total
+claimed amount of RMB4,738 million (31 December 2021: RMB6, 165 million).
+(d) Legal proceedings and arbitrations
+135,796
+129,075
+59,648
+57,258
+27,840
+24,864
+15,937
+14,627
+15,920
+15,380
+16,451
+16,946
+2021
+2022
+31 December
+31 December
+Over three years but within five years
+Over five years
+Over two years but within three years
+Over one year but within two years
+Within one year
+At the end of the reporting period, the Group's total future minimum lease receivables in respect of non-cancellable
+operating leases of assets are as follows:
+(c) Operating leases
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+1,082,099
+2021
+1,113,801
+13,678
+98,067
+65,878
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Other
+Total
+Segment assets
+14,683,048
+8,658,389
+15,992,193
+174,427
+39,508,057
+31 December 2022
+Including: Investments in associates and joint ventures
+65,878
+Property and equipment
+106,222
+141,504
+27,976
+18,185
+293,887
+Other non-current assets (ii)
+45,386
+22,659
+5,610
+9,649
+83,304
+Unallocated assets
+65,878
+33,513
+139
+3,501
+(1,039)
+(182,419)
+Operating profit
+165,771
+198,355
+52,740
+1,272
+418,138
+Share of results of associates and joint ventures
+4,427
+4,427
+Profit before taxation
+165,771
+198,355
+52,740
+5,699
+422,565
+16,618
+13,255
+Capital expenditure
+26,706
+111
+2,781
+101,600
+13,271
+Depreciation and amortisation
+Other segment information:
+361,038
+Profit for the year
+(61,527)
+Income tax expense
+10,543
+Total assets
+39,609,657
+Segment liabilities
+Internal net interest income/(expense)
+17,262
+148,301
+(165,563)
+Net fee and commission income
+78,082
+53,760
+1,182
+133,024
+Other income/(expense), net (i)
+10,627
+(2,800)
+24,292
+5,057
+37,176
+Operating income
+398,373
+(9,067)
+(29,341)
+(162,981)
+Impairment losses on assets
+(236,227)
+(3,346)
+690,680
+(16,885)
+(94,823)
+Operating expenses
+860,880
+5,057
+111,278
+346,172
+(121,173)
+(30,822)
+251,367
+292,402
+15,448,837
+15,326,369
+5,039,830
+191,414
+36,006,450
+Unallocated liabilities
+Total liabilities
+89,381
+36,095,831
+Other segment information:
+Credit commitments
+1,861,309
+1,109,736
+2,971,045
+(i)
+(ii)
+Includes net trading income, net gains on financial investments and other net operating income.
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+External net interest income
+Total
+Other
+operations
+banking
+banking
+146,911
+Treasury
+Corporate
+2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+241
+Annual Report 2022
+Personal
+(1,234)
+(24,851)
+Impairment losses on assets
+Due to banks and other financial institutions
+240,742
+7.56%
+286,273
+9.80%
+Repurchase agreements
+6,200
+1.08%
+13,246
+3.62%
+Derivative financial liabilities
+10,517
+10.92%
+8,754
+12.05%
+12.27%
+62,031
+0.21%
+99,904
+0.38%
+Credit commitments
+13,906
+0.47%
+14,895
+0.55%
+2022
+2021
+Amount
+Interest income
+66,394
+Due to customers
+9,172
+12.44%
+10,852
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(h) Annuity fund
+Apart from the obligations for defined contributions to the annuity fund established by the Bank, annuity fund held A
+shares of the Bank with market value of RMBO as at 31 December 2022 (31 December 2021: RMB3.16 million), and bonds
+issued by the Bank of RMB527.91 million as at 31 December 2022 (31 December 2021: RMB324.13 million).
+(i) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the reporting year, the Group entered into extensive banking transactions with these state-owned entities including, but are
+not limited to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of
+intermediary services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and
+the sale, purchase, and leasing of properties and other assets.
+The transactions with state-owned entities are activities conducted in the ordinary course of business under normal terms
+and conditions and priced based on market rates, and the dealings of the Group have not been significantly or unduly
+affected by the fact that the Group and those state-owned entities are ultimately controlled or owned by the Government.
+The Group has also established pricing policies for products and services and such pricing policies do not depend on
+whether or not the customers are state-owned entities.
+(j) Proportion of major related party transactions
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements. When
+calculating the proportion of related party transactions, transactions with the subsidiaries are excluded.
+31 December 2021
+Balance
+Percentage
+Financial investments
+2,639,549
+31 December 2022
+Balance Percentage
+25.07%
+2,178,011
+23.53%
+Due from banks and other financial institutions
+211,822
+Derivative financial assets
+0.04%
+7,466
+0.11%
+24,210
+Loans and advances to customers
+Interest expense
+3.62%
+5.89%
+50,879
+Reverse repurchase agreements
+22.78%
+188,463
+20.32%
+23,987
+4,998
+Percentage
+5.19%
+0.85%
+Amount
+291,628
+132,168
+269,891
+693,687
+Internal net interest income/(expense)
+14,267
+167,717
+(181,984)
+Net fee and commission income
+74,554
+54,228
+483
+129,265
+Other income/(expense), net (i)
+8,466
+(8,010)
+11,984
+(240,884)
+(3,738)
+(16,812)
+(122,897)
+(97,437)
+Operating expenses
+External net interest income
+841,441
+100,374
+346,103
+388,915
+Operating income
+18,489
+6,049
+6,049
+(125,707)
+Total
+operations
+64,456
+Percentage
+5.55%
+3,214
+0.68%
+Annual Report 2022
+239
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+49. SEGMENT INFORMATION
+(a) Operating segments
+The Group is organised into different operating segments, namely corporate banking, personal banking and treasury
+operations, based on internal organisation structure, management requirements and internal reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government
+agencies and financial institutions. The products and services include corporate loans, trade financing, deposit-taking
+activities, corporate wealth management services, custody activities and various types of corporate intermediary services.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services.
+Treasury operations
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions for its own accounts or on
+behalf of customers.
+banking
+banking
+Treasury
+Personal
+Corporate
+2022
+Other
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+ICBC
+240
+Transactions between segments mainly represent the provision of funding to and from individual segments. The internal
+transfer pricing of these transactions is determined with reference to the market rates and have been reflected in the
+performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as "internal
+net interest income or expense". Net interest income and expense relating to third parties are referred to as "external net
+interest income or expense".
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the
+accounting policies adopted for preparing and presenting the financial statements of the Group.
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+Other
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+65,878
+(202,623)
+140,569
+(26,794) (37,485)
+(34,096)
+(38,699)
+(13,050)
+(23,849)
+68
+(240,884)
+Impairment losses on assets
+(53,708)
+(13,775) (26,978)
+(21,243)
+(20,634)
+(30,262)
+(4,286)
+(36,619)
+(11,533)
+Operating profit
+257
+98,133
+59,687
+95,094
+60,079
+61,841
+11,878
+31,169
+418,138
+Share of results of associates and joint
+ventures
+Profit before taxation
+Income tax expense
+(182,419)
+(30,360)
+Operating expenses
+841,441
+42,134
+20,667
+14,954
+17,965
+9,327
+10,437
+2,621
+12,830
+(1,670)
+129,265
+Other income/(expense), net (i)
+11,096
+(1,992)
+(1,078)
+(1,057)
+(594)
+(1,297)
+(68)
+66,551
+29,214
+130,802
+114,809
+153,822
+Profit for the year
+113,459
+84,325
+Operating income
+18,489
+1,602
+12,651
+(842)
+148,527
+4,427
+4,427
+257
+31 December 2022
+Chinese mainland (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+Central
+Western
+Northeastern
+Overseas
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+and other
+joint ventures
+Including: Investments in associates and
+39,508,057
+4,365,670 (6,034,973)
+1,469,644
+5,174,047
+(In RMB millions, unless otherwise stated)
+4,396,769
+6,583,520
+9,418,551
+8,069,477
+Assets by geographical areas
+Total
+Eliminations
+6,065,352
+Net fee and commission income
+Notes to the Consolidated Financial Statements
+Annual Report 2022
+98,133
+59,687
+95,094
+60,079
+61,841
+11,878
+35,596
+422,565
+(61,527)
+361,038
+Other segment information:
+Depreciation and amortisation
+4,534
+3,946
+2,696
+3,972
+3,511
+33,513
+12,509
+1,099
+3,547
+3,292
+2,933
+243
+2,796
+3,758
+Capital expenditure
+26,706
+2,370
+1,471
+4,206
+3,579
+Operating profit
+(2,646)
+18,105
+banking
+operations
+Other
+Total
+Segment assets
+12,436,885
+8,399,240
+14,086,517
+169,482
+35,092,124
+Including: Investments in associates and joint ventures
+61,782
+61,782
+Property and equipment
+banking
+112,952
+37,432
+19,546
+290,296
+Other non-current assets (ii)
+43,468
+20,945
+6,304
+9,944
+80,661
+Unallocated assets
+79,259
+35,171,383
+Total assets
+Segment liabilities
+120,366
+Treasury
+Personal
+Corporate
+195,658
+85,326
+477
+422,030
+Share of results of associates and joint ventures
+2,869
+2,869
+Profit before taxation
+140,569
+195,658
+85,326
+3,346
+424,899
+Income tax expense
+(74,683)
+Profit for the year
+350,216
+31 December 2021
+43,331
+215
+5,870
+19,027
+18,219
+13,960,681
+Capital expenditure
+125
+3,370
+10,901
+10,452
+Depreciation and amortisation
+Other segment information:
+24,848
+13,213,984
+4,425,332
+198,061
+Pearl
+Bohai
+Central
+Western Northeastern
+Overseas
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+and other
+Eliminations
+Total
+External net interest income
+290,613
+28,413
+125,852
+18,670
+52,414
+(259,518)
+Internal net interest (expense)/income
+Yangtze
+693,687
+8,725
+103,557
+77,663
+11,062
+80,913
+77,438
+43,716
+18,710
+Chinese mainland (HO and domestic branches)
+Branches located outside Chinese mainland, domestic and overseas subsidiaries, and investments in associates and joint
+ventures.
+31,798,058
+Unallocated liabilities
+Total liabilities
+31,896,125
+Other segment information:
+Credit commitments
+1,674,769
+1,055,600
+2,730,369
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(!!)
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+242
+ICBC
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Geographical information
+The Group operates principally in Chinese mainland, and also has branches and subsidiaries operating outside Chinese
+mainland. The distribution of the geographical areas is as follows:
+including Liaoning, Heilongjiang, Jilin and Dalian.
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+the HO business divisions (including institutions directly managed by the HO and its offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+2022
+Overseas and other
+Western China:
+Central China:
+Bohai Rim:
+Pearl River Delta:
+Head Office ("HO"):
+Yangtze River Delta:
+Chinese mainland (Head Office and domestic branches)
+Northeastern China:
+32,205
+136,544
+The principal or interest of any credit business is past due more than 90 days to the Group;
+Unallocated assets
+79,259
+80,661
+23,613
+9,685
+8,457
+7,087
+6,075
+Total assets
+7,371
+Other non-current assets (ii)
+290,296
+157,573
+8,865
+23,331
+18,911
+20,726
+13,729
+16,056
+33,190
+35,171,383
+5,470,908
+611,013
+450,171
+791,688 1,001,597
+1,123,767 1,172,580
+Credit commitments
+Other segment information:
+31,896,125
+Total liabilities
+Liabilities by geographical areas
+Unallocated liabilities
+31,798,058
+(6,133,218)
+1,088,995
+1,539,014
+3,745,729
+7,928,583 3,568,847
+5,645,178
+8,944,022
+98,067
+13,971
+Property and equipment
+61,782
+Bohai
+Pearl
+River Delta
+River Delta
+Head Office
+Yangtze
+Chinese mainland (HO and domestic branches)
+31 December 2021
+(In RMB millions, unless otherwise stated)
+Central
+Notes to the Consolidated Financial Statements
+244
+43,331
+14,822
+1,501
+4,625
+4,100
+3,710
+3,845
+ICBC
+Western
+Northeastern
+Overseas
+61,782
+joint ventures
+Including: Investments in associates and
+(6,133,218) 35,092,124
+4,100,318
+1,333,077
+4,553,489
+5,186,815 3,786,925
+5,870,705
+8,248,981
+8,145,032
+Assets by geographical areas
+Total
+Eliminations
+and other
+China
+China
+China
+Rim
+147,856
+631,815
+(3,200,118)
+2,730,369
+The impairment loss on credit-impaired corporate loans and advance to customers applied discounted cash flow method.
+If there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the loss is
+measured as the difference between the asset's gross carrying amount and the present value of estimated future cash
+flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying
+amount. The impairment loss is recognised in the consolidated statement of profit or loss. In determining allowances on an
+individual basis, the following factors are considered:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+247
+Annual Report 2022
+There have been no significant changes in estimation techniques or significant assumptions adopted in ECL calculation
+during the year.
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+EAD refers to the total amount of on- and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+the sustainability of the borrower's business plan;
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. LGD depends on the
+type of counterparty, the method and priority of the recourse, and the type of collateral, taking the forward-looking
+adjustments into account.
+ECL for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL depending on whether a
+significant increase in credit risk on that financial instrument has occurred since initial recognition and whether an asset is
+considered to be credit-impaired. The loss allowance for loans and advances to customers, other than those corporate loans
+and advance to customers which are credit-impaired, is measured using the risk parameters method. The key parameters
+include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"), considering the time
+value of money.
+Parameters, assumptions and estimation techniques
+there are other objective evidences that indicate the financial asset is impaired.
+due to serious financial difficulties, the financial asset cannot continue to be traded in an active market;
+it is probable that the borrower will be insolvent or carry out other financial restructurings;
+in light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+it has been overdue for more than 90 days;
+-
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the IRB approach under the New Basel Capital Accord,
+taking the forward-looking information into account and deducting the prudential adjustment to reflect the debtor's point-
+in-time PD under the current macro-economic environment.
+the borrower's ability to improve performance when a financial difficulty arises;
+the estimated recoverable cash flows from projects and liquidation;
+the availability of other financial support and the realisable value of collateral; and
+7,455
+6,425
+2021
+19,134
+2022
+26,229
+31 December
+31 December
+ICBC
+248
+Impaired loans and advances to customers included in above
+Rescheduled loans and advances to customers
+The following table includes carrying amount of rescheduled loans and advance to customers:
+Such modifications include restructuring the loan to provide extended payment term arrangements, payment holidays
+or payment forgiveness. Restructuring policies and practices are based on indicators or criteria which, in the judgement
+of management, indicate that payment will most likely continue, and reviewed regularly. Such restructures are especially
+common for medium-term loans. The classification of a rescheduled loan shall not be upgraded unless it has met certain
+criteria and after an observation period of at least 6 months.
+The Group might modify the terms of loan with a customer based on commercial renegotiations, or when the customer is
+in financial difficulty, with a view to maximise the recovery of loan.
+Financial assets contract modification
+The Group has carried out sensitivity analysis of macro-economic indicators used in forward-looking measurement. As at 31
+December 2022, when the key economic indicators in the neutral scenario moved up or down by 10%, the ECL changed by
+no more than 5% (31 December 2021: no more than 5%).
+The assessment of significant increase in credit risk and the calculation of ECL incorporate forward-looking information. The
+Group has performed historical data analysis and identified Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"),
+Purchasing Managers' Index ("PMI") and other macro-economic indicators as impacting the ECL for each portfolio. The
+impact of these economic variables on the PD and LGD has been determined by performing statistical regression analysis
+to understand the correlations among the historical changes of the economic variables, PD and LGD. The impact of these
+economic variables on the PD and LGD varies according to different types of business. Forecasts of these economic variables
+are carried out at least quarterly by the Group that provide the best estimate view of the economy over the next year.
+When calculating the weighted average ECL provision, the Group determines the optimistic, neutral and pessimistic
+scenarios and their weightings through a combination of macro-statistical analysis and expert judgement. The neutral,
+optimistic and pessimistic scenarios are of comparable weightings, of which, the weighting of neutral scenario is slightly
+higher than the other two scenarios. The weightings of the scenarios are consistent with those as at 31 December 2021.
+As at 31 December 2022, the Group has taken into account different macro-economic scenarios, combined with the impact
+of factors such as effect of prior period base data on economic development trends, and made forward-looking forecasts
+of macro-economic indicators. Of which, the year-on-year GDP growth rate used to estimate ECL under each scenario is as
+follows: 5.3% under neutral scenario, 6.0% under optimistic scenario, and 4.6% under pessimistic scenario.
+Forward-looking information contained in ECL
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to
+identify impairment through the combined effect of several events. The impairment losses are evaluated at the end of each
+reporting period, unless unforeseen circumstances require more careful attention.
+the timing of the expected cash flows.
+A financial asset is generally considered to be credit-impaired if:
+4,639
+Impairment assessment
+(iii)
+Credit risk assessment method
+The Group is also exposed to credit risk in other areas. The credit risk arising from derivative financial instruments is limited
+to derivative financial assets recorded in the consolidated statement of financial position. In addition, the Group provides
+guarantees for customers and may therefore be required to make payments on their behalf. These payments would be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk
+similar to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also give
+rise to credit risk. The Group's credit risk is mainly attributable to its loans, due from banks and other financial institutions
+and financial investments.
+Definition and scope
+(a) Credit risk
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+245
+Staging of financial instruments
+Annual Report 2022
+The Group has clearly defined the roles of each department in monitoring financial risks within the Group. The Credit and
+Investment Management Department monitors credit risk, the Risk Management Department together with the Asset and
+Liability Management Department monitor market and liquidity risks, and the Internal Control and Compliance Department
+monitors operational risk. The Risk Management Department is primarily responsible for establishing and coordinating a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises risk management and reports directly to the Board. He chairs two management committees
+including the Risk Management Committee and the Asset and Liability Management Committee, which set the risk
+management strategies and appetite, evaluate and formulate risk management policies and procedures, and make
+recommendations through the President to the Risk Management Committee of the Board. The Chief Risk Officer assists
+the President to supervise the Bank's risk management.
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+50. FINANCIAL RISK MANAGEMENT
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+(ii)
+Includes net trading income, net gains on financial investments and other net operating income.
+(i)
+The Bank maintains a dual-reporting risk management structure at the branch level. Under this structure, the risk
+management department of the branches report to both the Group risk management department and the management of
+the branches.
+The Group classifies financial instruments into three stages and makes provisions for expected credit loss accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition and
+whether the assets have been credit-impaired. Refer to Note 4(10) Impairment of financial assets for the definition of the
+three stages.
+During the reporting year, based on the requirements of the Implementation Rules on Expected Credit Loss Approach of
+Commercial Banks, the Group has analysed the historical data of credit risk exposures and the current risk profile, identified
+various factors that are most relevant to credit risk changes, optimised and adjusted the criteria of financial instruments
+staging.
+Classification of credit risk exposures
+(ii)
+The principal or interest of loan is past due more than 90 days;
+(i)
+Write-offs of loan; or
+The Group defines a retail business borrower as in default when any single credit asset of a borrower meets one or more of
+the following criteria:
+The corporate borrower has the matters refer to in (i) or (ii) above in other financial institutions.
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral; or
+(iii)
+(ii)
+(i)
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria:
+Definition of default
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+246
+The Group has further facilitated the deferral in principal repayment and interest payment credit arrangements for the
+inclusive loans to micro and small-sized businesses in accordance with the government's regulations. The Group classifies
+the credit risk based on the actual situation of the borrower and the judgement of the substantive risk of the business
+for those loans with deferred principal repayment and interest payment. However, the temporary deferral in principal
+repayment and interest payment are not considered as an automatic trigger event for a significant increase in credit risk.
+The assessment of significant increase in credit risk since initial recognition is performed at least on a quarterly basis for
+financial instruments held by the Group. The Group takes into consideration all reasonable and supportable information
+(including forward-looking information) that reflects significant change in credit risk for the purposes of classifying financial
+instruments. The main considerations are regulatory and operating environment, internal and external credit risk rating,
+debt-servicing capacity, operating capabilities, contractual terms, and repayment willingness and records. The Group
+compares the risk of default of a single financial instrument or a portfolio of financial instruments with similar credit risk
+characteristics as at the end of the reporting period and its risk of default at the date of initial recognition to determine
+changes in the risk of default over the expected lifetime of a financial instrument or a portfolio of financial instruments.
+In determining whether credit risk of a financial instrument has increased significantly since initial recognition, the Group
+considers factors indicating whether the probability of default has risen above threshold, the background for financing
+have been authenticated, the financial instrument has been past due for more than 30 days, the loan has been modified in
+payment term of principal or interest, any significant negative issue has been arisen and any other indicators of increase in
+risk have been noticed.
+Significant increase in credit risk
+The Group classifies credit risk exposures with sufficient information by considering factors such as internal ratings-
+based ("IRB") segmentation, product types, customer types, industry risk characteristics, and response to macro-economic
+changes.
+The retail business borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the
+Group to actions such as liquidation against collateral.
+6,089
+2,317
+24,848
+Eliminations
+and other
+China
+China
+China
+Rim
+River Delta
+River Delta
+Total
+Head Office
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Chinese mainland (HO and domestic branches)
+2021
+Overseas
+External net interest income
+268,554
+79,643
+21,368
+47,014
+Net fee and commission income
+(2,025)
+15,066
+12,805
+20,293
+106,166
+11,381
+39,174
+(202,860)
+Internal net interest (expense)/income
+690,680
+38,891
+12,041
+105,129
+77,869
+24,702
+83,851
+Includes net trading income, net gains on financial investments and other net operating income.
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+14,503
+(ii)
+2,971,045
+101,600
+Unallocated assets
+83,304
+25,849
+2,469
+9,769
+8,359
+6,812
+Total assets
+6,149
+16,623
+Other non-current assets (ii)
+293,887
+166,216
+8,403
+22,240
+18,542
+19,853
+7,274
+39,609,657
+Liabilities by geographical areas
+5,335,535
+(3,866,486)
+796,832
+160,799
+680,902
+624,496
+931,972 1,106,387
+1,157,911 1,378,232
+Credit commitments
+Other segment information:
+36,095,831
+Total liabilities
+89,381
+Capital expenditure
+36,006,450
+1,139,365 (6,034,973)
+1,819,550
+4,599,017 4,842,967
+5,833,211 9,263,328
+9,208,450
+(i)
+17,067
+Unallocated liabilities
+11,540
+59,699
+83,920
+58,031
+Profit before taxation
+ventures
+Share of results of associates and joint
+422,030
+42,146
+1,259
+65,477
+47,115
+64,383
+59,699
+83,920
+58,031
+Operating profit
+(202,623)
+(10,715)
+(15,400)
+64,383
+(22,896)
+47,115
+1,259
+8,623
+2,155
+1,450
+4,040
+3,358
+3,939
+2,584
+3,412
+3,910
+Depreciation and amortisation
+Other segment information:
+350,216
+(74,683)
+424,899
+45,015
+2,869
+Profit for the year
+Income tax expense
+29
+65,477
+(44,135) (25,034)
+2,869
+(17,638)
+107,474
+12,750
+135,488
+Operating income
+37,176
+1,503
+25,059
+114
+(2,675)
+(1,428)
+(2,261)
+(3,641)
+22,780
+Other income/(expense), net (1)
+133,024
+(1,572)
+12,120
+(21,724)
+2,361
+145,660
+105,357
+(2,275)
+29,582
+Impairment losses on assets
+(45,081)
+126,799
+(236,227)
+69
+(21,184)
+(12,923)
+(33,208)
+Property and equipment
+(38,426)
+(26,051)
+74,045
+(34,986)
+(32,376)
+Operating expenses
+(69)
+(37,142)
+860,880
+Policy banks
+23,862
+171,130
+559,727
+Banks and other financial institutions
+Corporate entities
+201,855
+97,202
+942,773
+6,409,814
+310,160
+430,758
+754,719
+5,658,676
+measured at
+97,364
+Governments and central banks
+Total
+amortised cost
+FVTOCI
+FVTPL
+measured at
+measured at
+investments
+Financial
+investments
+551,757
+Financial
+31 December 2021
+Financial
+investments
+653,774
+61,080
+Policy banks
+420,283
+financial institutions
+442,644
+10,059,499
+Banks and other
+761,736
+7,475,822
+35,191
+360
+13,310
+3,222
+44,454
+700,390
+47,631
+30,519
+710,039
+5,155,283
+Governments and central banks
+Total
+Below A
+A
+AA
+AAA
+Unrated
+31 December 2022
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies where the issuers of debt securities are located. The carrying
+amounts of debt securities investments (excluding accrued interest) analysed by rating as at the end of the reporting period
+are as follows:
+By rating distribution
+8,817,345
+6,710,241
+1,686,821
+2,207,198
+7,506,760
+70,057
+492,683
+By issuers distribution
+(2) Debt securities investments
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+251
+Annual Report 2022
+254,901
+19,153
+93,247
+72,444
+Total
+8,979
+1,221
+4,041
+2,495
+1,222
+Pledged loans
+110,551
+8,546
+33,485
+30,029
+38,491
+Loans secured by mortgages
+57,880
+6,117
+26,406
+412,047
+The following tables present an analysis of the Group's debt securities (excluding accrued interest) by types of issuers and
+investments:
+Financial
+investments
+31 December 2022
+Financial
+investments
+Financial
+734,918
+63,853
+560,640
+110,425
+Corporate entities
+1,087,023
+506,438
+349,500
+231,085
+Banks and other financial institutions
+761,736
+523,140
+210,680
+2,060,056
+27,916
+7,475,822
+6,413,329
+939,236
+123,257
+Governments and central banks
+Total
+amortised cost
+FVTOCI
+FVTPL
+measured at
+measured at
+measured at
+investments
+Policy banks
+24,171
+(384)
+Corporate entities
+(32,572)
+(672,224)
+(141,586) (251,923)
+(1,132) (2,699)
+(278,715)
+(28,741)
+321,135 22,107,213
+3,139 7,666,967
+685,365
+2,935
+(36)
+Financial investments
+21,100,713
+to customers
+Loans and advances
+(475)
+(475)
+(1,466)
+(1,466)
+1,043,970
+709,568
+709,568
+Reverse repurchase agreements
+1,043,970
+other financial institutions
+Due from banks and
+3,427,892
+3,427,892
+with central banks
+Cash and balances
+at amortised cost
+Financial assets measured
+Precious metal leasing
+and lending
+184,267
+Total
+15,031
+Cash outflow
+(65,601)
+357
+(1,080,685)
+(449,200)
+(638,174)
+(181,812)
+(22,948)
+2,463,558
+(2,438,420)
+16,708
+1,159
+9,123
+(2,515)
+Total
+306
+(i)
+Includes reverse repurchase agreements.
+(ii)
+The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+terms.
+(iii)
+Includes repurchase agreements.
+(iv)
+Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+258
+ICBC
+2,718
+541
+187,526
+691,018 324,815 35,143,136
+34,127,303
+25,138
+Stage 3
+Stage 2
+Stage 1
+6,324
+38,194
+698,003
+Policy banks
+18,747
+18,348
+4,454,127
+1,890,581
+Governments and central banks
+Below A
+A
+AA
+AAA
+12,167
+Unrated
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+252
+165,873 10,059,499
+289,885
+62,126
+3,509,086 6,032,529
+1,087,023
+734,918
+80,953
+49,369
+101,736
+4,214
+420,745
+158,854
+31 December 2021
+127,208
+28,011
+31
+754,719
+Total
+Provision for ECL
+Gross carrying amount
+Stage 2
+Stage 3
+Stage 1
+31 December 2022
+The Group's credit risk stages of financial instruments are as follows:
+(iii) Three-stage analysis of financial instruments' risk exposure
+8,817,345
+149,283
+233,289
+41,550
+5,259,285
+3,133,938
+Total
+6,409,814
+710,039
+98,708
+4,868
+384,700
+165,078
+Corporate entities
+942,773
+64,556
+103,667
+12,010
+382,264
+380,276
+financial institutions
+Banks and other
+56,685
+10,326
+3.22%
+77,491
+16.31%
+3,371,325
+16.45%
+3,816,621
+15.17%
+3,134,781
+15.60%
+3,621,603
+20.15%
+4,163,732
+3.83%
+Percentage
+100
+791,994
+Amount
+31 December 2021
+20.68%
+23,254
+4,798,204
+747,980
+Amount
+Percentage
+31 December 2022
+Total
+Overseas and other
+Northeastern China
+Western China
+15.34%
+3,133,539
+15.16%
+18.20%
+1,980,076
+Leasing and commercial services
+1,801,933
+2,068,044
+Manufacturing
+3,017,397
+3,357,175
+Transportation, storage and postal services
+2021
+2022
+31 December
+31 December
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by industry is as follows:
+Central China
+By industry distribution
+4,225,369
+3,561,290
+100.00%
+20,667,245
+100.00%
+23,212,312
+4.33%
+6.92%
+1,429,769
+6.30%
+895,238
+4.21%
+978,246
+1,462,999
+18.13%
+3,746,867
+1,739,367
+Bohai Rim
+Yangtze River Delta
+76,140
+87,205
+864,067
+827,150
+1,042,504
+3,035,566
+3,361,552
+2021
+2022
+31 December
+31 December
+Financial investments
+Loans and advances to customers
+Reverse repurchase agreements
+Derivative financial assets
+Due from banks and other financial institutions
+Balances with central banks
+As at the end of the reporting period, the maximum credit risk exposure of the Group without taking into account of any
+collateral and other credit enhancements is set out below:
+(i) Maximum exposure to credit risk without taking into account of any collateral and other
+credit enhancements
+The Group monitors the market value of the collateral and when needed, require additional collateral according to
+agreements. The Group disposes of repossessed assets in an orderly manner.
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be appraised and
+confirmed by the Group or valuation specialists engaged by the Group. The value of collateral should adequately cover
+the outstanding balance of loans. The Group takes into consideration the types of collateral, state of condition, liquidity,
+price volatility and realisation cost to determine the loan-to-value ratio of collateral. All collateral has to be registered in
+accordance with the relevant laws and regulations. The credit officers inspect the collateral and assess the changes in the
+value of collateral regularly.
+Retail loans are mainly collateralised by residential properties. As at 31 December 2022, the gross carrying amount of retail
+loans amounted to RMB8,236,561 million (31 December 2021: RMB7,944,781 million), of which credit exposure covered by
+collateral amounted to RMB7,361,305 million (31 December 2021: RMB7,056,652 million).
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2022, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB14,975,751 million (31 December 2021:
+RMB12,722,464 million), of which credit exposure covered by collateral amounted to RMB4,680,161 million (31 December
+2021: RMB3,849,616 million).
+owners.
+Reverse repurchase business is mainly collateralised by bills and investment securities. As part of certain reverse repurchase
+agreements, the Group has received collateral that it is allowed to sell or repledge in the absence of default by their
+The amount and type of collateral required depends on the assessment of credit risk of the counterparty. Guidelines are in
+place specifying the types of collateral and valuation parameters which can be accepted.
+Collateral and other credit enhancements
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+663,496
+22,593,648
+20,109,200
+Financial investments measured at FVTPL
+Head Office
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by geographical
+distribution is as follows:
+By geographical distribution
+(1) Loans and advances to customers
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+249
+Annual Report 2022
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or
+have comparable economic features. In addition, different geographic areas and industrial sectors have their unique
+characteristics in terms of economic development, and could present a different credit risk.
+(ii) Risk concentrations
+36,737,042
+41,277,224
+2,730,369
+Pearl River Delta
+2,971,045
+Credit commitments
+34,006,673
+38,306,179
+294,960
+93,560
+Other
+6,830,933
+7,634,395
+Financial investments measured at amortised cost
+465,064
+1,704,164
+2,084,892
+Financial investments measured at FVTOCI
+544,356
+Total maximum credit risk exposure
+Water, environment and public utility management
+1,531,163
+1,388,883
+38,550
+37,795
+44,182
+Loans secured by mortgages
+53,634
+5,674
+20,007
+16,734
+11,219
+Guaranteed loans
+89,164
+3,304
+30,694
+22,052
+33,114
+Unsecured loans
+Total
+3 years
+Overdue
+for over
+Overdue
+for 1 to
+3 years
+1 year
+90 days
+91 days to
+for 1 to
+Overdue for
+Overdue
+31 December 2022
+9,999
+130,526
+Pledged loans
+5,287
+3,269
+29,315
+22,502
+22,405
+Unsecured loans
+Total
+3 years
+3 years
+1 year
+90 days
+for over
+Overdue
+Overdue
+for 1 to
+The composition of the Group's gross overdue loans (excluding accrued interest) by collateral is as follows:
+91 days to
+Overdue for
+Overdue
+31 December 2021
+284,031
+19,543
+91,177
+79,509
+93,802
+Total
+10,707
+566
+1,926
+2,928
+for 1 to
+Overdue loans
+20,667,245
+23,212,312
+Personal mortgage and business loans
+12,194,706
+13,826,966
+Subtotal for corporate loans
+349,997
+383,705
+Other
+239,155
+263,109
+Mining
+312,352
+368,149
+Science, education, culture and sanitation
+Other
+343,860
+Construction
+357,229
+584,594
+Finance
+559,559
+608,722
+Wholesale and retail
+932,390
+976,460
+Real estate
+1,152,584
+1,313,234
+Production and supply of electricity, heating, gas and water
+392,535
+Guaranteed loans
+7,362,031
+874,530
+Subtotal for personal loans
+1,720,583
+2,469,508
+9,497,898
+9,977,153
+2,459,887
+2,544,651
+6,988,877
+8,221,000
+31 December
+2021
+2022
+31 December
+Total
+Loans secured by mortgages
+Pledged loans
+7,065,126
+Guaranteed loans
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by collateral is as
+follows:
+By collateral
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+250
+20,667,245
+23,212,312
+Total for loans and advances to customers
+527,758
+1,148,785
+Discounted bills
+879,655
+7,944,781
+8,236,561
+Unsecured loans
+179,297
+7,660,893
+(1,454)
+(310,851)
+3,428,197
+Due from banks and other financial institutions (i)
+231,187
+1,151,140
+202,631
+275,217
+59,009
+1,919,184
+Loans and advances to customers (ii)
+40,595
+1,213,398
+1,255,510
+5,133,983
+7,016,225
+20,395,144
+525,600
+35,580,455
+Financial investments
+Financial investments measured at FVTPL
+91,682
+8,491
+2,647,750
+4,579
+2,566
+3,478
+The tables below summarise the maturity profile of the Group's financial instruments based on the undiscounted
+contractual cash flows. The balances of some items in the tables below are different from the balances in the consolidated
+statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's
+actual cash flows on these instruments may vary significantly from the following analysis. For example, demand deposits
+from customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+31 December 2022
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+One to
+on demand
+one month
+23,953
+months
+five years
+Over
+five years
+Undated
+(iv)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+766,050
+3,774
+one year
+216,392
+128,644
+209,268
+545,397
+1,209,629
+2,821,060
+2,017,208
+7,159,314
+11,654,883
+25,865,777
+3,370,710
+54,098,581
+Financial liabilities:
+39
+Due to central banks
+16,923
+122,938
+1,038
+147,031
+Due to banks and other financial institutions (iii)
+2,509,380
+541,567
+206,552
+436,973
+97,907
+6,132
+(ii) Maturity analysis of undiscounted contractual cash flows
+92,825
+128,658
+99,746
+778,176
+Financial investments measured at FVTOCI
+134,557
+241,166
+384,006
+991,935
+632,472
+94,446
+2,478,582
+17,734
+Financial investments measured at amortised cost
+237,093
+1,018,492
+3,436,757
+4,536,068
+3,129
+9,368,590
+Other
+80,115
+172,649
+53,377
+137,051
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+256
+39,723
+Due to banks and other financial institutions (ii)
+2,268,162
+488,000
+175,347
+278,804
+52,944
+23,715
+3,286,972
+Financial liabilities measured at FVTPL
+2,360
+64,944
+1,304
+12,378
+3,689
+4,243
+87,180
+Derivative financial liabilities
+165
+10,670
+13,773
+26,766
+622
+12,768
+36,252
+Due to central banks
+6,830,933
+61,782
+61,782
+290,296
+290,296
+106,055
+279,318
+59,652
+136,411
+80,479
+1,111
+23,055
+787,121
+1,073,404
+2,332,549
+1,519,734
+4,752,666
+6,967,455
+15,335,298
+3,190,277
+35,171,383
+Liabilities:
+102,151
+17,746
+7,195
+Certificates of deposit
+Total liabilities
+15,336,010
+2,421,997
+1,935,469
+5,130,013
+6,429,388
+643,248
+31,896,125
+Net liquidity gap
+(14,262,606)
+887,422
+(89,448)
+(377,347)
+538,067 14,692,050
+3,190,277
+3,275,258
+(i)
+Includes reverse repurchase agreements.
+(ii)
+Includes repurchase agreements.
+(iii)
+Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+(415,735)
+71,337
+124,894
+170,157
+65,193
+106,765
+109,507
+8,877
+290,342
+Due to customers
+13,002,739
+1,546,301
+1,491,308 4,409,851
+5,972,715
+173,032
+18,860
+Debt securities issued
+9,544
+28,189
+86,298
+203,003
+464,341
+791,375
+Other
+301,667
+117,672
+26,441,774
+3,810,125
+Financial liabilities measured at FVTPL
+56,884
+92,607
+677,626
+Financial investments measured at FVTOCI
+69,799
+212,545
+385,083
+777,859
+444,114
+99,726
+1,989,126
+184,838
+Financial investments measured at amortised cost
+167,261
+919,230
+3,404,308
+3,666,299
+3,147
+8,276,626
+Other
+98,177
+279,659
+49,188
+116,381
+128,358
+106,924
+24,438
+3,098,594
+Due from banks and other financial institutions (i)
+239,524
+779,758
+227,507
+208,024
+42,720
+3,340
+1,500,873
+Loans and advances to customers (ii)
+173,529
+22,930
+1,025,340
+3,837,204
+6,198,405
+19,491,028
+468,472
+32,238,213
+Financial investments
+Financial investments measured at FVTPL
+88,573
+6,717
+1,194,834
+2,459,402
+83,643
+3
+623
+1,306
+12,476
+3,701
+4,249
+87,299
+Certificates of deposit
+65,201
+106,862
+109,863
+64,944
+9,076
+Due to customers
+13,003,897
+1,551,479
+1,510,507
+4,519,399
+6,274,552
+21,447
+26,881,281
+Debt securities issued
+Other
+291,002
+5,041
+Financial liabilities measured at FVTPL
+24,381
+644,069
+1,070,314
+2,456,896
+1,708,257
+5,657,784
+10,613,859
+23,794,660
+3,123,357
+48,425,127
+Financial liabilities:
+3,309,032
+Due to central banks
+1,114
+36,614
+2,360
+40,089
+Due to banks and other financial institutions (iii)
+2,268,538
+488,702
+175,898
+290,018
+61,495
+1
+2,391
+6,356
+9,748
+673,025
+1,120,786
+248,535
+38,301
+16,524
+34,445
+94,479
+432,284
+16,847,694
+2,794,366
+297,722
+2,117,482
+7,357,699
+806,560
+36,307,952
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+817
+464
+1,529
+1,542
+100
+6,384,151
+4,452
+107,640
+9,558
+65
+578
+2,403
+3,598
+668
+64,196
+Certificates of deposit
+68,186
+126,364
+177,563
+32,841
+6,649
+Due to customers
+14,281,430
+1,920,323
+1,695,923
+5,520,110
+6,916,340
+20,642
+30,354,768
+Debt securities issued
+Other
+378,762
+1,978
+Derivative financial instruments settled on gross basis
+85,965
+Annual Report 2022
+257
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2021
+Overdue/
+repayable
+Less than
+One to three Three months
+One to
+Over
+Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+on demand
+months
+to one year
+five years
+five years
+Undated (iv)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+621,110
+one month
+Including: Cash inflow
+(iv)
+(iii)
+Cash outflow
+(88,580)
+979,392 586,504
+(975,680) (593,312)
+849,091
+263,153
+37,805
+2,801,910
+(849,885)
+(265,245)
+(38,589)
+Includes repurchase agreements.
+(2,811,291)
+3,712
+(6,808)
+(794)
+(2,092)
+(784)
+(9,381)
+(i)
+Includes reverse repurchase agreements.
+(ii)
+The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+terms.
+(2,615)
+3,029,696
+2,831,810
+748,029
+(355)
+(1,341)
+(4,370)
+Total
+2,237,864
+630
+341
+2,238,835
+(2,865)
+(355)
+(2,674)
+(1,369)
+As at 31 December 2022 and 2021, credit risk exposures of credit commitments were mainly classified in Stage 1.
+(b) Liquidity risk
+Liquidity risk is the risk that funds will not be sufficient or funds will not be raised at a reasonable cost in a timely manner
+to meet the need of asset growth or repayment of debts due, although the Group remains solvent. This may arise from
+amount or maturity mismatches of assets and liabilities.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+optimising the structure of assets and liabilities;
+maintaining the stability of the deposit base;
+projecting cash flows and evaluating the extent of current assets; and
+maintaining an efficient internal fund transfer mechanism to ensure sufficient liquidity at branch level.
+254
+ICBC
+(4,589)
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+1,704,164
+630
+31 December 2021
+Gross carrying amount
+Provision for ECL
+Stage 1
+Stage 2
+Stage 3
+Total
+Stage 1
+Stage 2
+Stage 3
+306
+Total
+at FVTOCI
+Loans and advances
+to customers
+Financial investments
+534,636
+1,703,228
+35
+534,671
+(191)
+(28)
+(219)
+Financial assets measured
+(614,196)
+(i) Maturity analysis of assets and liabilities
+31 December 2022
+199,613
+269,497
+57,506
+1,906,571
+Derivative financial assets
+1,228
+14,136
+20,960
+25,225
+16,705
+1,148,778
+8,951
+Loans and advances to customers
+32,364
+1,110,110
+1,048,838
+4,280,564
+3,772,395
+12,253,435
+95,942
+22,593,648
+Financial investments
+87,205
+The tables below summarise the maturity profile of the Group's assets and liabilities. The Group's actual remaining maturity
+of its financial instruments may vary significantly from the following analysis. For example, demand deposits from customers
+are expected to maintain a stable or increasing balance although they have been classified as repayable on demand in the
+following tables.
+231,177
+3,427,892
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+One to
+on demand
+one month
+months
+one year
+Due from banks and other financial institutions (i)
+five years
+Undated
+Total
+Assets:
+Cash and balances with central banks
+766,050
+3,771
+3,471
+2,534
+4,316
+2,647,750
+Over
+five years
+Financial investments measured at FVTPL
+(223,878)
+(1,256)
+10,534
+886
+2,084,892
+(4,792)
+(1,009)
+(3,527)
+(9,328)
+Total
+3,229,316
+10,534
+2,073,472
+921
+(5,302)
+(1,009)
+(3,555)
+(9,866)
+Annual Report 2022
+253
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2021
+Gross carrying amount
+3,240,771
+Provision for ECL
+Financial investments
+(28)
+(1,874)
+(142,754)
+(255,006)
+(708,611)
+Financial assets measured
+31 December 2022
+Gross carrying amount
+Provision for ECL
+Stage 1
+Stage 2 Stage 3
+(538)
+Total
+Stage 2
+Stage 3
+Total
+at FVTOCI
+Loans and advances
+to customers
+1,155,844
+35
+1,155,879
+(510)
+Stage 1
+(112,907)
+Stage 1
+Stage 3
+6,832,308
+501,286
+6,425
+293,394 20,174,699
+(269,376)
+(110,649) (223,739)
+(603,764)
+157 6,838,890
+(5,639)
+(2,200)
+(118)
+Financial investments
+(7,957)
+and lending
+166,184
+298
+Total
+30,811,159
+508,009
+24 166,506
+293,575 31,612,743
+(1,177)
+(277,411)
+(58)
+(21)
+Precious metal leasing
+Stage 2
+19,380,019
+Loans and advances
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+Financial assets measured
+at amortised cost
+Cash and balances
+with central banks
+3,098,438
+to customers
+3,098,438
+financial institutions
+828,241
+828,241
+(1,091)
+-- (1,091)
+Reverse repurchase agreements
+505,969
+505,969
+(128)
+(128)
+Due from banks and other
+10,862
+Financial investments measured at FVTOCI
+Investments in associates and joint ventures
+One to
+Three
+repayable
+Less than
+three
+months to
+One to
+Over
+Undated
+on demand
+Overdue/
+one month
+one year
+five years
+five years
+Total
+Assets:
+Cash and balances with central banks
+621,110
+9,741
+1,965
+6,220
+months
+2,459,402
+31 December 2021
+255
+Total liabilities
+16,839,828
+2,809,563
+2,216,425
+6,437,620 6,978,726
+813,669
+36,095,831
+Net liquidity gap
+(15,631,491)
+(105,382)
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(415,942)
+660,016 15,932,097
+3,406,648
+3,513,826
+(i)
+Includes reverse repurchase agreements.
+(ii)
+Includes repurchase agreements.
+(iii)
+Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2022
+(332,120)
+877,336
+3,098,438
+239,523
+Financial investments measured at amortised cost
+Investments in associates and joint ventures
+Property and equipment
+Other
+Total assets
+88,573
+6,662
+23,625
+163,412
+81,410
+647,297
+167,956
+623,223
+66,225
+206,666
+347,980
+702,386
+380,896
+99,451
+1,803,604
+81,718
+137,289
+91,585
+Due from banks and other financial institutions (i)
+Financial investments measured at FVTPL
+20,109,200
+778,638
+225,730
+204,230
+39,484
+3,041
+1,490,646
+Derivative financial assets
+261
+12,784
+14,924
+Financial investments
+29,509
+6,666
+76,140
+Loans and advances to customers
+17,882
+1,097,463
+849,883
+3,116,875
+3,219,890
+11,723,988
+83,219
+11,996
+Financial investments measured at amortised cost
+191,534
+167,139
+65,878
+293,887
+293,887
+85,836
+183,562
+67,726
+137,432
+32,700
+89,833
+110,195
+65,878
+707,284
+2,704,181
+1,800,483
+6,105,500
+7,638,742
+16,745,766
+3,406,648
+39,609,657
+Liabilities:
+Due to central banks
+6,127
+1,208,337
+16,882
+7,634,395
+3,686,681
+Property and equipment
+Other
+Total assets
+91,682
+7,792
+22,371
+206,585
+96,657
+190,726
+99,066
+620
+714,879
+234,407
+345,296
+867,833
+516,140
+93,310
+2,178,018
+115,000
+203,097
+838,367
+2,790,630
+121,032
+129,849
+121,734
+145,781
+125,796
+175,348
+6,209
+375,452
+Due to customers
+14,271,619
+1,913,802
+1,683,372
+5,432,348
+6,551,322
+68,099
+18,028
+Debt securities issued
+6,899
+29,260
+86,443
+203,986
+579,365
+905,953
+Other
+256,480
+132,334
+29,870,491
+1,038
+Certificates of deposit
+7,965
+Due to banks and other financial institutions (ii)
+2,509,370
+540,163
+204,501
+421,705
+68,494
+16,109
+3,760,342
+Financial liabilities measured at FVTPL
+56,884
+96,350
+61
+2,338
+3,597
+668
+64,126
+Derivative financial liabilities
+1,955
+17,932
+23,702
+30,565
+14,231
+578
+31,300
+Financial investments measured at FVTOCI
+298,841
+16,089
+100,695
+7,190
+447,509
+15,337,379
+2,403,599
+1,863,791
+5,093,002
+6,750,720
+592,293
+32,040,784
+36,804
+Derivative cash flows:
+108,543
+215
+1,308
+2,138
+493
+260
+4,414
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+65,958
+1,097,393
+Derivative financial instruments settled on net basis
+286,731
+450,359
+535,026
+984,572
+27,678
+17,030
+203,301
+127,443
+Total liabilities
+Other
+Debt securities issued
+Due to customers
+Certificates of deposit
+96,350
+15,588
+31,896,125
+15,856
+33,778
+31,128
+Derivative financial liabilities
+64,126
+55,219
+3,707
+5,200
+Financial liabilities measured at FVTPL
+3,760,342
+375,452
+28,153,014
+937,078
+418,526
+6,997
+298,260
+2,855,985
+Net long position
+36,095,831
+755,854
+525,235
+2,107,220
+32,707,522
+877,336
+10,588
+14,136
+138,878
+713,734
+905,953
+26,693
+2,317
+191,789
+685,154
+29,870,491
+361,873
+255,786
+57,370
+598,689
+2,848,497
+26,221
+189
+2,728
+36,740
+Investments in associates and joint ventures
+7,634,395
+97,363
+57,165
+166,488
+7,313,379
+Financial investments measured at amortised cost
+2,178,018
+117,091
+8,989
+389,335
+1,662,603
+Financial investments measured at FVTOCI
+714,879
+9,306
+8,122
+32,710
+65,878
+352,584
+Property and equipment
+153,536
+Due to banks and other financial institutions (ii)
+145,781
+2,429
+143,352
+Due to central banks
+Liabilities:
+39,609,657
+1,108,438
+532,232
+2,405,480
+35,563,507
+707,284
+237,614
+38,442
+84,400
+346,828
+Total assets
+Other
+293,887
+2,366
+643
+137,342
+3,513,826
+Credit commitments
+2,379,809
+2,137
+673
+143,589
+143,897
+Property and equipment
+61,782
+24,874
+130
+1,010
+35,768
+Investments in associates and joint ventures
+6,830,933
+76,910
+6,607
+106,016
+6,641,400
+Financial investments measured at amortised cost
+623,223
+1,803,604
+109,918
+54,886
+338,301
+290,296
+1,300,499
+Other
+79,085
+Financial liabilities measured at FVTPL
+3,286,972
+186,816
+42,953
+702,938
+2,354,265
+Due to banks and other financial institutions (ii)
+39,723
+2,363
+37,360
+Due to central banks
+Liabilities:
+Total assets
+35,171,383
+982,296
+510,574
+2,210,620
+31,467,893
+787,121
+230,044
+23,585
+454,407
+664,741
+Financial investments measured at FVTOCI
+6,913
+174,831
+2,724,409
+Cash and balances with central banks
+Total
+(in RMB
+equivalent)
+Other
+(in RMB
+equivalent)
+HKD
+(in RMB
+equivalent)
+USD
+(in RMB
+equivalent)
+RMB
+31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Assets:
+ICBC
+262
+(ii) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(i)
+2,971,045
+183,777
+8,896
+398,563
+66,652
+12,505
+132,546
+Due from banks and other financial institutions (i)
+37,844
+565,961
+Financial investments measured at FVTPL
+Financial investments
+20,109,200
+303,298
+319,687
+780,912
+18,705,303
+Loans and advances to customers
+76,140
+11,577
+5,804
+33,808
+24,951
+Derivative financial assets
+1,490,646
+78,487
+25,637
+515,224
+871,298
+3,098,438
+Financial investments measured at FVTPL
+Financial investments
+87,205
+22,593,648
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(i) VaR
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+259
+Annual Report 2022
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major market
+risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Value-at-risk ("VaR") analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios and
+a sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both trading and non-
+trading portfolios).
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios to be
+immaterial.
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign currency assets and liabilities, and off-balance sheet
+foreign exchange positions arising from exchange rate derivative transactions.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and interest rate risk arising
+from treasury business positions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches
+between the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk
+in the banking book is disclosed in Note 50(d).
+Market risk is the risk of loss, in respect of the Group's on- and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+(c) Market risk
+2,730,369
+280,085
+420,178
+Total
+Over
+five years
+One to
+five years
+Three
+months to
+one year
+497,709
+One to
+three months
+215,011
+105,556
+A summary of VaRs by risk type of trading portfolios is as follows:
+1,211,830
+2022
+End of year
+121
+89
+411
+179
+411
+7
+33
+12
+32
+83
+297
+160
+297
+Total portfolio VaR
+Commodity risk
+Currency risk
+30
+121
+67
+Minimum
+Maximum
+Average
+Interest rate risk
+Interest rate risk
+Credit commitments
+Repayable
+on demand
+Includes repurchase agreements.
+The data set out in the above table includes trading book data.
+Annual Report 2022
+267
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(e) Capital management
+The Group has set the following capital management objectives:
+maintain sound capital adequacy to meet regulatory requirements on capital, keep stable capital base to ensure the
+Group's business growth and the implementation of business development and strategic plans in order to achieve
+comprehensive, balanced, and sustainable development;
+adopt the advanced capital measurement approach, improve the internal capital adequacy assessment process
+(ICAAP), publicly disclose information on capital management, cover all types of material risks, and ensure stable
+operations of the Group;
+leverage on the results of quantitative assessments of material risks for daily risk management, establish a bank-
+wide value management mechanism with a core of economic capital, improve the aligned policies, processes, and
+applications in business management, strengthen the capital constraints and capital incentives mechanism, enhance
+the product pricing and decision-making support, and improve the capital allocation efficiency; and
+ICBC
+268
+The capital adequacy ratios and related components of the Group are calculated based on the statutory financial statements
+of the Group prepared under the PRC GAAP. During the reporting year, the Group has complied in full with all its externally
+imposed regulatory capital requirements.
+The Group calculates the following common equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the
+capital adequacy ratio in accordance with the Regulation Governing Capital of Commercial Banks (Provisional) and relevant
+requirements. The requirements pursuant to these regulations may be different from those applicable in Hong Kong SAR
+and other jurisdictions.
+According to Regulation Governing Capital of Commercial Banks (Provisional), Measures for the Assessment of Systemically
+Important Banks, Additional Regulation of Systemically Important Banks (Provisional), and the capital surcharge applied to
+global systemically important banks as required by the Basel Committee on Banking Supervision, the minimum common
+equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio of the Group shall
+not be lower than 9%, 10% and 12% respectively. In addition, overseas entities are directly regulated by local banking
+regulators, and the required capital adequacy ratios differ by countries or regions.
+Since 1 January 2013, the Group commenced calculating the capital adequacy ratios in accordance with the Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the CBIRC officially
+approved the Bank to adopt the advanced capital management approach. Within the approved scope of risk exposures that
+meet the regulatory requirements, the Bank can adopt the foundation IRB approach for its corporate credit risk exposures,
+the IRB approach for its retail credit risk exposures, the internal model approach (IMA) for its market risk exposures, and the
+standardised approach for its operational risk exposures.
+make effective use of various capital instruments, continuously enhance capital strengths, refine the capital structure,
+improve capital quality, reduce capital costs, and maximise shareholders' returns.
+N/A
+The management monitors the capital adequacy ratios regularly based on regulations issued by the CBIRC. The required
+information is quarterly filed with the CBIRC by the Group and the Bank.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profiles of its business operations. In order to maintain or adjust the capital structure, the Group may adjust its profit
+distribution policies, issue or repurchase its own shares, eligible additional tier 1 capital instruments, eligible tier 2 capital
+instruments, or convertible bonds.
+(ii)
+Less than
+one month
+Includes reverse repurchase agreements.
+N/A
+31 December 2021
+2,971,045
+182,555
+490,874
+682,822
+273,992
+Total
+Over
+five years
+five years
+one year
+One to
+Three
+months to
+One to
+three months
+Less than
+one month
+112,499
+1,228,303
+Credit commitments
+Repayable
+on demand
+31 December 2022
+Management does not expect all of the commitments to be drawn down before the expiry of the commitments.
+(iii) Analysis of credit commitments by contractual expiry date
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(i)
+611
+Currency risk
+Total portfolio VaR
+HKD
+(in RMB
+equivalent)
+USD
+(in RMB
+equivalent)
+RMB
+31 December 2022
+A breakdown of the assets and liabilities analysed by currency is as follows:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+261
+Annual Report 2022
+(1,331)
+(1,279)
+566
+817
+-1%
+(448)
+(890)
+(210)
+522
+-1%
+HKD
+USD
+Other
+2021
+(in RMB
+equivalent)
+Assets:
+347,995
+352,901
+752,795
+21,139,957
+Loans and advances to customers
+15,798
+15,269
+29,132
+27,006
+Derivative financial assets
+1,906,571
+118,717
+35,575
+644,064
+Due from banks and other financial institutions (i)
+3,427,892
+135,967
+14,937
+150,292
+3,126,696
+Cash and balances with central banks
+Total
+(in RMB
+equivalent)
+Commodity risk
+2022
+2022
+80
+347
+198
+144
+12
+105
+37
+14
+71
+288
+172
+95
+46
+153
+88
+72
+Minimum
+Maximum
+Average
+End of year
+2021
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaRs do not add up to the total portfolio
+2021
+VaR.
+(1)
+currency rate
+Currency
+31 December
+31 December
+31 December
+31 December
+Change in
+Effect on equity
+Effect on profit
+before taxation
+The tables below indicate a sensitivity analysis of exchange rate changes of the main foreign currencies to which the Group
+had significant on- and off-balance sheet exposure on its monetary assets and liabilities and its forecasted cash flows. The
+analysis calculates the effect of a reasonably possible movement in the currency rates against RMB, with all other variables
+held constant, on profit before taxation and equity. A negative amount in the table reflects a potential net reduction in
+profit before taxation or equity, while a positive amount reflects a potential net increase. While the table below indicates
+the effect on profit before taxation and equity of a 1% depreciation of USD and HKD against RMB, there will be an
+opposite effect with the same amount if the currencies appreciate by the same percentage. This effect, however, is based
+on the assumption that the Group's foreign exchange exposures as at the end of the reporting period are kept unchanged
+and, therefore, have not incorporated actions that would be taken by the Group to mitigate the adverse impact of this
+currency risk.
+The Group manages its currency risk through various methods, including limit management and risk hedging to hedge
+currency risk, and performs currency risk sensitivity analysis and stress testing regularly.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD, and other currencies
+to a lesser extent. The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange
+rate has been pegged to the USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes
+in the exchange rate of RMB to USD. Transactions in foreign currencies mainly arise from the Group's foreign currency
+treasury operations, foreign exchange dealings and overseas investments.
+(ii) Currency risk
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+260
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge
+or dispose positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to hedge or
+dispose all positions fully;
+(3)
+(2)
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+6,719
+1,108,215
+87,180
+36,095,831
+877,336
+905,953
+12,113
+770,214
+1,684,915
+569,208
+62,243
+648,895
+3,954,749
+9,363,578 (2,593,546)
+(7,457,653)
+Interest rate exposure
+167,260
+34,116
+29,870,491
+693,281
+16,484
+6,347,993
+375,452
+1,190
+6,159
+172,644
+5,273,380
+62,121
+8,304
+6,049,400 6,589,093
+21,123,528
+Total liabilities
+17,539,353
+95,251
+2,459
+Other
+N/A
+Debt securities issued
+N/A
+Includes reverse repurchase agreements.
+Due from banks and other financial
+2,786,830
+Cash and balances with central banks
+3,098,438
+311,608
+Total
+interest-
+bearing
+Over
+five years
+One to
+five years
+Non-
+Three
+months to
+one year
+three
+months
+Less than
+31 December 2021
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Assets:
+ICBC
+266
+The data set out in the above table includes trading book data.
+Includes repurchase agreements.
+(ii)
+(i)
+institutions (i)
+Due to customers
+Certificates of deposit
+1,931,613
+707,284
+630,356
+55,653
+4,603,644
+18,290
+3,995,547
+15,412,978
+13,665,875
+Total assets
+2,634
+351
+Other
+293,887
+293,887
+Property and equipment
+65,878
+65,878
+ventures
+Investments in associates and joint
+91,337 7,634,395
+3,572,321
+2,677,684
+39,609,657
+195,459
+Liabilities:
+Due to banks and other financial
+96,350
+96,350
+Derivative financial liabilities
+64,126
+58,505
+27
+1,421
+1,168
+3,005
+Financial liabilities measured at FVTPL
+3,760,342
+53,262
+933
+31,106
+410,049
+3,264,992
+145,781
+1,038
+121,734
+23,009
+institutions (ii)
+Due to central banks
+1,207,522
+202,551
+36,170
+Derivative financial liabilities
+87,180
+77,831
+1,066
+7,214
+1,069
+Financial liabilities measured at FVTPL
+3,286,972
+31,697
+1,547
+31,688
+302,294
+2,919,746
+39,723
+3
+2,360
+36,252
+1,108
+institutions (ii)
+Due to banks and other financial
+Due to central banks
+71,337
+Liabilities:
+71,337
+174,720
+791,375
+26,441,774
+660,872
+9,770
+782,369
+1,634,210
+79,850
+887,422
+18,530
+456,464
+7,133
+483,674
+3,320,310
+146,410
+62,391
+9,834
+86,118
+4,880,504 6,224,975
+8,383,705 (2,301,496)
+(6,440,087)
+Interest rate exposure
+18,672,762
+Total liabilities
+116,340
+1,968
+Other
+Debt securities issued
+290,342
+331
+5,947
+5,951,386
+109,344
+4,353,175
+15,457,811
+Due to customers
+Certificates of deposit
+35,171,383
+1,947,036
+3,803,984
+Financial investments measured at
+FVTOCI
+623,223
+205,548
+164,957
+69,283
+150,390
+33,045
+Financial investments measured
+at FVTPL
+Financial investments
+20,109,200
+44,383
+327,354
+386,803
+11,830,293
+7,520,367
+Loans and advances to customers
+76,140
+76,140
+1,490,646
+41,362
+3,041
+334,480
+340,866
+642,215
+369,260
+787,121
+712,243
+70,493
+3,923,479
+4,385
+13,264,209
+12,232,675
+Total assets
+Other
+290,296
+290,296
+Property and equipment
+825,606
+61,782
+ventures
+Investments in associates and joint
+6,830,933
+86,891
+2,939,372
+735,724 2,718,515
+350,431
+amortised cost
+Financial investments measured at
+116,783 1,803,604
+61,782
+467,447
+Derivative financial assets
+2,178,018
+Notes to the Consolidated Financial Statements
+ICBC
+264
+The effect on net interest income is the impact of the assumed changes in interest rates on the net interest income, arising
+from the financial assets and financial liabilities held at the end of the reporting period that are subject to repricing within
+the coming year, including the effect of hedging instruments. The effect on equity is the impact of the assumed changes in
+interest rates on other comprehensive income, calculated by revaluing fixed rate financial assets measured at FVTOCI held at
+the end of the reporting period, including the effect of any associated hedges.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rate, with all other variables held
+constant, on the Group's net interest income and equity.
+The Group measures interest rate risk mainly by analysing the sensitivity of projected net interest income under various
+interest rate movements (scenario analysis). The Group aims to mitigate the impact of prospective interest rate movements
+which might reduce future net interest income, while balancing the cost of hedging on the current revenue.
+hedging: using interest rate derivatives for hedging management in a timely manner.
+limit management: optimising the positions of interest-generating assets and interest-bearing liabilities and controlling
+the impact on profit or loss and equity; and
+pricing management: managing the deviation of the pricing of interest-generating assets and interest-bearing
+liabilities from the benchmark interest rates or market interest rates;
+duration management: optimising the differences in timing between contractual repricing (or maturities) of interest-
+generating assets and interest-bearing liabilities;
+interest rate prediction: analysing the macro-economic factors that may impact the PBOC benchmark interest rates
+and market interest rates;
+The Group manages the interest rate risk in the banking book through the Asset and Liability Management Department,
+and the following methods have been adopted:
+due to changes in expected default levels or market liquidity, the market's assessment of the credit quality of financial
+instruments changes, leading to changes in credit spreads.
+the Bank or the counterparty can elect to change the level or the maturity of future cash flows of financial
+instruments when the Bank holds option derivatives or when there are embedded option terms or implied options in
+the on- and off-banking book businesses; and
+despite the similarities in maturity periods, changes in the benchmark interest rate vary among on- and off-balance
+sheet business with different pricing benchmark interest rates;
+the repricing period of different financial instruments are different when the interest rate changes;
+Interest rate risk in the banking book is defined as the risk of loss in the overall return and the economic value of the
+banking book arising from adverse movements in interest rate and term structure. This type of risk may occur in the
+following situations:
+(d) Interest rate risk in the banking book
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+263
+Annual Report 2022
+(In RMB millions, unless otherwise stated)
+Includes repurchase agreements.
+31 December 2022
+Decreased by 100 basis points
+1,563
+(809)
+HKD
+4,945
+469
+(4,663)
+(469)
+USD
+63,210
+29,467
+(56,877)
+(29,467)
+RMB
+equity
+Effect on
+Effect on net
+interest income
+equity
+interest income
+Currency
+Effect on
+Effect on net
+Increased by 100 basis points
+(ii)
+(i)
+2,730,369
+296,163
+366,861
+864,226
+24,914,524
+290,342
+50,762
+20,490
+177,383
+41,707
+Total liabilities
+Other
+Debt securities issued
+Due to customers
+Certificates of deposit
+71,337
+Financial investments measured at
+amortised cost
+10,922
+5,687
+35,831
+18,897
+Derivative financial liabilities
+26,441,774
+528,377
+227,278
+593
+3,275,258
+301,414
+172,111
+76,881
+395,773
+2,085,604
+Credit commitments
+64,390
+79,225
+2,830,229
+Net long position
+809
+31,896,125
+446,184
+2,131,395
+28,637,664
+887,422
+18,879
+9,600
+117,020
+741,923
+791,375
+35,127
+680,882
+(1,642)
+Includes reverse repurchase agreements.
+(436)
+51,637
+266,013
+1,540,885
+3,427,892
+325,120
+4,152
+2,534
+3,096,086
+Cash and balances with central banks
+Due from banks and other financial
+institutions (i)
+Assets:
+Total
+interest-
+bearing
+five years
+Over
+One to
+five years
+months to
+one year
+Non-
+Three
+Less than
+three
+months
+31 December 2022
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+1,906,571
+(In RMB millions, unless otherwise stated)
+Derivative financial assets
+87,205
+481,951
+112,896
+770,266
+372,109
+440,796
+Financial investments measured at
+FVTOCI
+Other
+714,879
+224,892
+179,668
+67,841
+210,224
+32,254
+Financial investments measured
+at FVTPL
+Financial investments
+22,593,648
+52,006
+314,051
+405,677
+8,088,056 13,733,858
+Loans and advances to customers
+87,205
+Notes to the Consolidated Financial Statements
+48,036
+Effect on net
+(27,350)
+RMB
+equity
+interest income
+equity
+interest income
+Currency
+Effect on
+Effect on
+Effect on net
+Decreased by 100 basis points
+31 December 2021
+Increased by 100 basis points
+67,868
+31,181
+265
+(61,267)
+(1,290)
+(31,181)
+Total
+436
+(39,969)
+27,350
+1,355
+43,662
+25,728
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the expected movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's current interest rate risk profile. This effect, however, does not incorporate actions other
+than hedging that would be taken by management to mitigate the impact of interest rate risk. The projections above also
+assume that interest rates of all maturities move by the same degree and, therefore, do not reflect the potential impact on
+net interest income and equity in the case where some rates change while others remain unchanged.
+(47,643)
+(25,728)
+1,694
+(1,029)
+(1,661)
+51,624
+142
+958
+(140)
+1,029
+Annual Report 2022
+(958)
+6,126
+(1,551)
+(5,873)
+1,551
+USD
+HKD
+Other
+Total
+(5,744)
+68,484
+32,799
+(2,163)
+(2)
+9,164
+(3,478)
+Funds and other investments
+14,959
+1,111
+58,687
+Equity investments
+3,158
+574
+(2,149)
+109
+(218)
+3,840
+Debt securities
+Financial investments measured at FVTPL
+36,320
+582
+(567)
+(1,200)
+Debt securities
+(111)
+Financial liabilities measured at FVTPL
+Financial liabilities:
+156,343
+(3,662)
+(21,646)
+28,464
+1,223
+153,164
+47,024
+(1,974)
+Financial investments measured at FVTOCI
+(6,320)
+(1,198)
+53,839
+Equity investments
+362
+(63)
+(74)
+(2,764)
+363
+(2)
+1
+2,827
+2,677
+102
+296,128
+106
+1,993
+447,815
+4,837
+71,337
+1,426
+65,089
+4,822
+Derivative financial liabilities
+87,180
+567
+86,598
+15
+Financial liabilities measured at FVTPL
+296,128
+Due to customers
+Financial liabilities:
+3,198,887
+153,164
+2,648,936
+396,787
+56,666
+Derivative financial liabilities
+1,803,604
+454,645
+12
+272
+Notes to the Consolidated Financial Statements
+measured at FVTPL
+Loans and advances to customers
+886
+(36)
+(1,080)
+88
+848
+1,066
+Derivative financial assets
+Financial assets:
+2022
+31 December
+Transfer
+(out)/in of
+level 3
+Disposals and
+settlements
+Additions
+Total effects
+in other
+comprehensive
+income
+profit or loss
+2022
+Total
+gains/(losses)
+recorded in
+1 January
+The following table shows the movement of level 3 financial assets and financial liabilities measured at fair value:
+(b) Movement of level 3 financial instruments measured at fair value
+(In RMB millions, unless otherwise stated)
+ICBC
+(1,426)
+203
+(1,993)
+227,018
+53,839
+(6,318)
+(6,894)
+10,733
+(2,898)
+59,216
+Equity investments
+2,827
+621
+(311)
+2,092
+(39)
+464
+Debt securities
+Financial investments measured at FVTOCI
+32,799
+(1,401)
+(5,559)
+9,976
+4,220
+25,563
+Funds and other investments
+1,040
+58,687
+(2,937)
+(23,109)
+(In RMB millions, unless otherwise stated)
+1,447,324
+Notes to the Consolidated Financial Statements
+273
+Annual Report 2022
+(1,993)
+77
+203
+(28)
+(34)
+(2,211)
+(1,426)
+77
+(28)
+(82)
+(1,596)
+Derivative financial liabilities
+48
+(615)
+Financial liabilities measured at FVTPL
+Financial liabilities:
+153,164
+(74,585)
+25,737
+(4,888)
+(9,187)
+1,878
+Disposals and
+settlements
+Additions
+in other
+comprehensive
+income
+profit or loss
+2021
+recorded in
+1 January
+Total effects
+Total
+(losses)/gains
+(3,496)
+(90)
+1,189
+(354)
+(2,185)
+407
+1,022
+(14)
+(1,311)
+(497)
+167
+(340)
+Financial assets:
+(2,248)
+Transfer
+in/(out) of
+level 3
+31 December
+2021
+1,691
+(2,826)
+73,710
+Equity investments
+3,840
+(62,697)
+(356)
+1,001
+(154)
+66,046
+Debt securities
+Financial investments measured at FVTPL
+(2,174)
+n6
+(213)
+1,066
+98
+(589)
+57
+(9)
+328
+measured at FVTPL
+Loans and advances to customers
+Derivative financial assets
+(191)
+106
+299,614
+Valid portion of minority interests
+53,839
+(a) Financial instruments measured at fair value
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+270
+For unquoted other liabilities at FVTPL, discounted cash flow model is used based on current yield curve appropriate for
+the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied based on
+parameters including yields, foreign exchange forward rates, foreign exchange rate volatilities, which are calibrated by
+active market quotes of standard European option with the same underlying items.
+Other liabilities at fair value through profit or loss
+The loans and advances to customers that use valuation techniques are mainly the bill business and discounted cash flow
+model is used. For bank acceptance bill, based on the different credit risk of the acceptor, interest rate yield curve is
+set up using the actual market data; for commercial bill, based on the interbank offered rate, interest rate yield curve is
+constructed according to the credit risk and liquidity point difference adjustment.
+Loans and advances to customers
+Structured products are mainly valued using dealer's quotations.
+Derivatives that use valuation techniques with market observable inputs are mainly interest rate swaps, foreign exchange
+forwards, swaps and options. The most frequently applied valuation techniques include discounted cash flow model and
+Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates, foreign
+exchange rate volatility, interest rate yield curves.
+Derivatives
+The majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based
+on the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a
+valuation technique for which all significant inputs are observable market data.
+Financial investments that use valuation techniques for their valuation include debt securities, asset-backed securities,
+investment funds, unlisted equity instruments and asset management plans. The Group values such securities by
+incorporating either only observable data or both observable and unobservable data. Observable inputs include assumptions
+regarding current interest rates; unobservable inputs include assumptions regarding expected future default rates,
+prepayment rates, discount rates and market liquidity discounts.
+Financial investments
+The following is a description of the fair value of financial instruments measured at fair value which are determined using
+valuation techniques. They incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Level 3 inputs: valuation techniques for which certain inputs that have a significant effect on the recorded fair value are
+not based on observable market data.
+Level 2 inputs: valuation techniques for which all inputs that have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+Level 1 inputs: quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the
+characteristics of the financial instruments and relevant market information. The Group uses the following hierarchy for
+determining and disclosing the fair value of financial instruments:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+269
+Annual Report 2022
+Financial assets:
+The Group has established policies and internal controls with respect to the measurement of fair values, specifically the
+framework of fair value measurement of financial instruments, fair value measurement methodologies and operating
+procedures. Fair value measurement policies specify valuation techniques, parameter selection and relevant concepts, models
+and parameter-seeking methods. Operating procedures specify measurement procedures, timing of valuation, market
+parameter selection and corresponding allocation of responsibilities. In the process of fair value measurement, front office
+is responsible for daily transaction management. The Finance and Accounting Department plays a lead role in formulating
+accounting policies of fair value measurement, valuation methodologies and system implementation. The Risk Management
+Department is responsible for verifying trade details and validating models.
+Level 1
+Level 3
+Equity investments
+492,683
+3,158
+456,620
+32,905
+Debt securities
+Financial investments measured at FVTPL
+1,155,879
+1,155,879
+Loans and advances to customers measured
+at FVTOCI
+2,780
+109
+2,671
+Loans and advances to customers measured
+at FVTPL
+154,974
+154,974
+Reverse repurchase agreements measured
+at FVTPL
+87,205
+886
+82,589
+3,730
+Derivative financial assets
+Total
+31 December 2022
+Level 2
+51. FAIR VALUE OF FINANCIAL INSTRUMENTS
+(i) Refers to risk-weighted assets after the capital floor and adjustments.
+18.02%
+655
+584
+354,331
+354,331
+Additional tier 1 capital instruments and related premiums
+354,986
+354,915
+Additional tier 1 capital
+2,886,378
+3,121,080
+Net common equity tier 1 capital
+7,980
+7,980
+Investments in common equity tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+(4,202)
+(2,962)
+not fair-valued on the balance sheet
+Cash flow hedging reserve that relates to the hedging of items that are
+5,669
+7,473
+Other intangible assets other than land use rights
+7,691
+Net gains or losses on level 3 financial instruments of the Group are set out below:
+Net tier 1 capital
+3,475,995
+3,241,364
+Tier 2 capital
+19.26%
+Capital adequacy ratio
+14.94%
+15.64%
+Tier 1 capital adequacy ratio
+13.31%
+14.04%
+Common equity tier 1 capital adequacy ratio
+21,690,349
+22,225,272
+Risk-weighted assets (i)
+16,925
+1,116
+3,909,669
+Net capital base
+1,013
+Valid portion of minority interests
+248,774
+275,764
+Surplus provision for loan impairment
+418,415
+528,307
+Valid portion of tier 2 capital instruments and related premiums
+668,305
+805,084
+4,281,079
+12,334
+68,484
+97,743
+Financial investments measured at FVTPL
+534,671
+534,671
+Loans and advances to customers measured
+at FVTOCI
+3,594
+106
+3,488
+Loans and advances to customers measured
+at FVTPL
+157,655
+157,655
+Reverse repurchase agreements measured
+at FVTPL
+76,140
+1,066
+70,634
+4,440
+Derivative financial assets
+Financial assets:
+Total
+Level 3
+Level 2
+Level 1
+31 December 2021
+(In RMB millions, unless otherwise stated)
+Debt securities
+24,430
+392,013
+3,840
+39,746
+5,855
+Equity investments
+1,704,164
+2,827
+1,407,578
+293,759
+Debt securities
+Financial investments measured at FVTOCI
+623,223
+95,326
+Notes to the Consolidated Financial Statements
+435,164
+112,194
+32,799
+26,400
+52,995
+Funds and other investments
+90,746
+58,687
+16,751
+15,308
+Equity investments
+420,283
+92,733
+99,440
+271
+540,849
+93,126
+47,024
+38,310
+7,792
+Equity investments
+5,252
+5,252
+Other debt investments
+2,079,640
+362
+1,749,383
+329,895
+Debt securities
+Financial investments measured at FVTOCI
+714,879
+107,962
+524,413
+82,504
+124,453
+36,320
+55,459
+32,674
+Funds and other investments
+337,687
+1,792,945
+47,386
+2,178,018
+3,496
+532,389
+4,964
+96,350
+2,185
+89,962
+4,203
+Derivative financial liabilities
+64,126
+1,311
+62,054
+Annual Report 2022
+761
+144,959
+144,959
+Repurchase agreements
+235,414
+235,414
+Due to customers
+Financial liabilities:
+4,293,735
+156,343
+3,713,471
+423,921
+Financial liabilities measured at FVTPL
+Realised
+158,427
+(c) Transfers between levels
+354,331 153,348 350,397
+356,407
+and 1 January 2022
+Balance as at 31 December 2021
+(4,479)
+63
+63
+(4,542)
+instrument holders
+Capital reduction by other equity
+139,730
+139,730
+instrument holders
+Capital injection by other equity
+(97,505)
+97,505
+(32,494)
+32,494
+97,505
+32,494
+Appropriation to general reserve
+Appropriation to surplus reserve (i)
+(9,607)
+426,714
+24,106
+(4,773)
+(3,996)
+(Note 17)
+Dividends-ordinary shares 2021 final
+334,424
+346,056
+(11,632)
+(191)
+907
+3,245
+(15,593)
+Total comprehensive income
+(11,632)
+(9,607)
+(11,632)
+907
+3,245
+(15,593)
+Other comprehensive income
+346,056
+346,056
+Profit for the year
+3,142,801
+1,486,265
+945,798
+2
+(191)
+(94,804)
+(94,804)
+holders (Note 17)
+153,285
+356,407 219,143
+Balance as at 1 January 2021
+profits equity
+reserves Subtotal
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+317,903
+capital instruments
+Retained
+Other
+hedging
+General revaluation translation
+Surplus
+Capital
+equity
+Share
+Cash flow
+currency
+Investment
+Total
+Distributions to other equity instrument
+329,209
+(2,097)
+Distributions to other equity instrument
+(Note 17)
+Dividends-ordinary shares 2020 final
+322,213
+323,100
+(887)
+(61)
+86
+(2,676)
+1,764
+Total comprehensive income
+22,342
+(887)
+(61)
+86
+(2,676)
+1,764
+Other comprehensive income
+323,100 323,100
+Profit for the year
+1,397,575 2,789,748
+816,623
+63
+(4,082)
+(887)
+holders (Note 17)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve
+(2,115,377)
+Total
+3,531,077
+Other
+955,285
+509,771
+2,066,021
+HKD
+USD
+31 December 2021
+Net (short)/long position
+Net option position
+Forward sales
+(446,184)
+Forward purchases
+Spot assets
+167,377
+27,582
+832
+138,963
+Net structural position
+145,272
+82,971
+(96,126)
+Net (short)/long position
+12,318
+Spot liabilities
+(3,292)
+(680,182)
+2,112,979
+ICBC
+278
+investments in overseas subsidiaries, associates and joint ventures.
+capital and statutory reserves of overseas branches; and
+property and equipment, net of depreciation charges;
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+155,439
+26,055
+13,036
+79,582
+79,478
+803
+(3,241,743)
+128,581
+3,817
+32
+2,443
+1,342
+(2,944,886)
+(580,802)
+(153,095)
+(2,210,989)
+2,664,771
+385,249
+166,543
+(146,024)
+Other
+1,468
+Net option position
+Unaudited Supplementary Information to the Consolidated Financial Statements
+277
+Annual Report 2022
+The consolidated financial statements were approved by the board of directors on 30 March 2023.
+55. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+Certain comparative amounts have been reclassified to conform to the presentation of 2022.
+54. COMPARATIVE AMOUNTS
+A final dividend of RMBO.3035 (pre-tax) per share after the appropriation of statutory surplus reserve and general reserve,
+was approved at the board of directors' meeting held on 30 March 2023, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2022, the final dividend amounted to approximately RMB108,169 million in total. The dividend payable was not recognised
+as a liability in the consolidated financial statements.
+53. EVENTS AFTER THE REPORTING PERIOD
+Includes the appropriation made by overseas branches in the amount of RMB68 million (2021: RMB56 million).
+(3,089) (189) 1,022,148 1,624,995 3,357,881
+(In RMB millions, unless otherwise stated)
+(1,528)
+354,331 153,348 384,808 480,285
+356,407
+53,571 (53,571)
+53,571
+34,411 (34,411)
+34,411
+(14,810) (14,810)
+(104,534)
+(104,534)
+(i)
+Balance as at 31 December 2022
+8,513
+14,142
+1.
+There are no differences between the profit attributable to equity holders of the parent company under IFRSS and PRC
+GAAP for the year ended 31 December 2022 and 2021. There are no differences between the equity attributable to equity
+holders of the parent company under IFRSS and PRC GAAP as at 31 December 2022 and 31 December 2021.
+(2,790,684)
+(691,849)
+(96,680)
+(2,002,155)
+Forward sales
+2,433,174
+453,110
+247,474
+1,732,590
+Forward purchases
+(3,370,003)
+Statement of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+(754,849)
+(2,089,919)
+Spot liabilities
+Total
+3,860,467
+Other
+1,079,851
+HKD
+531,400
+2,249,216
+Spot assets
+USD
+31 December 2022
+Currency concentrations
+2.
+(525,235)
+Unrealised
+Foreign
+The statement of changes in equity of the Bank are set out below.
+Level 2
+Level 1
+8,320
+Goodwill
+17,138
+20,811
+(18,658)
+(20,839)
+3,539
+3,293
+1,618,142
+1,766,288
+438,640
+496,406
+356,849
+392,162
+148,597
+148,174
+356,407
+356,407
+2,903,516
+3,141,891
+Common equity tier 1 capital deductions
+Level 3
+Financial assets
+Financial investments measured at amortised cost
+6,830,933
+ASSETS
+31 December
+2021
+31 December
+2022
+The statement of financial position of the Bank are set out below.
+52. STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY OF
+THE BANK
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+275
+Annual Report 2022
+All of the aforementioned assumptions and methods provide a consistent basis for the calculation of the fair values of the
+Group's financial assets and financial liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+The fair values of subordinated bonds and tier 2 capital bonds are determined with reference to the available
+market values. If quoted market prices are not available, fair values are estimated on the basis of pricing models or
+discounted cash flows.
+Other
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, fair values are estimated on the basis of pricing models or discounted cash flows.
+(i)
+Subject to the existence of an active market such as an authorised stock exchange, the market value is the best reflection
+of the fair value of a financial instrument. As there is no available market value for certain financial assets held and financial
+liabilities issued by the Group, discounted cash flow or other valuation methods described below are adopted to determine
+the fair values of these financial assets and financial liabilities:
+481,954
+481,954
+470,806
+Subordinated bonds and tier 2 capital bonds
+Financial liabilities
+212,817
+6,644,213
+29,158
+6,886,188
+(ii)
+Valid portion of minority interests
+Retained profits
+General reserve
+There are no significant differences between the carrying amount and the fair value of financial assets and financial
+liabilities not measured at fair value, except for the following items:
+(e) Fair value of financial assets and financial liabilities not carried at fair value
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+274
+As at 31 December 2022, the effects of changing the significant unobservable assumptions to reasonably possible
+alternative assumptions were not significant (31 December 2021: not significant).
+Financial instruments valued with significant unobservable inputs primarily include certain structured derivatives, asset-
+backed securities, investment funds, unlisted equity instruments and asset management plans. These financial instruments
+are valued using discounted cash flow model, net asset value method and market comparison approach. The models
+incorporate various unobservable assumptions such as expected future default rates, prepayment rates, discount rates and
+market liquidity discounts.
+(d) Valuation of financial instruments with significant unobservable inputs
+At the end of the reporting period, certain financial instruments were transferred out from level 3 of the fair value hierarchy
+for financial assets and liabilities, when significant inputs used in their fair value measurements, which was previously
+unobservable became observable, or when there was a change in valuation technique.
+At the end of the reporting period, certain financial instruments were transferred out from level 2 to level 3 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously observable became unobservable.
+31 December 2022
+(ii) Transfers between level 2 and level 3
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these
+securities. Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the
+reporting period.
+1,006
+(1,025)
+710
+(727)
+296
+(298)
+2021
+2022
+(i) Transfers between level 1 and level 2
+In 2022 and 2021, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of
+the Group were not significant.
+Cash and balances with central banks
+Carrying
+amount
+Level 1
+Surplus reserve
+Valid portion of capital reserve
+Paid-in capital
+Common equity tier 1 capital
+31 December 2022 31 December 2021
+The common equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio of the
+Group calculated after implementation of the advanced capital measurement approaches approved by the CBIRC are as
+follows:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Fair value
+Carrying
+amount
+31 December 2021
+594,718
+Fair value
+594,718
+Subordinated bonds and tier 2 capital bonds
+Financial liabilities
+211,469
+7,549,514
+42,594
+7,803,577
+7,634,395
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+Level 2
+591,630
+Due from banks and other financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+Perpetual bonds
+Preference shares
+30,297,602
+34,393,656
+503,623
+451,633
+655,515
+786,799
+91,029
+82,932
+25,659,484
+Reserves
+28,986,751
+317,123
+178,256
+400,490
+39,994
+59,300
+Other equity instruments
+Share capital
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+238,632
+Income tax payable
+Retained profits
+TOTAL LIABILITIES AND EQUITY
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Person in charge of Finance and
+Accounting Department
+Wang Gang
+Vice Chairman and President
+33,440,403
+37,751,537
+3,142,801
+3,357,881
+1,486,265
+1,624,995
+945,798
+TOTAL EQUITY
+1,022,148
+219,717
+134,614
+134,614
+354,331
+354,331
+356,407
+356,407
+ICBC
+276
+Liao Lin
+Chen Siqing
+Chairman
+219,717
+Reserves
+Due to customers
+Derivative financial liabilities
+Investments in subsidiaries
+6,643,792
+7,352,726
+Financial investments measured at amortised cost
+1,522,578
+1,928,908
+Financial investments measured at FVTOCI
+396,261
+466,374
+8,562,631
+9,748,008
+163,283
+19,310,688
+523,897
+686,682
+47,218
+51,163
+998,406
+1,194,812
+2,959,034
+3,347,555
+Financial investments measured at FVTPL
+Financial investments
+Loans and advances to customers
+21,761,362
+Certificates of deposit
+163,283
+36,183
+Repurchase agreements
+70,256
+55,936
+Financial liabilities measured at FVTPL
+2,821,165
+3,106,929
+Due to banks and other financial institutions
+39,648
+145,763
+Due to central banks
+33,440,403
+Investments in associates
+37,751,537
+TOTAL ASSETS
+630,440
+534,276
+Other assets
+76,066
+100,306
+Deferred tax assets
+133,698
+127,907
+Property and equipment
+35,042
+LIABILITIES
+Net structural position
+(567)
+X17
+(ii) Consolidated financial statements
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+284
+cap
+37,740
+38,000
+Excluded from tier 2 capital for the current period due to
+85
+20,285
+Valid cap to common equity tier 1 capital instruments for
+the current period due to phase-out arrangements
+Excluded from common equity tier 1 capital due to cap
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+84
+83
+82
+81
+80
+Valid cap of surplus provision for loan impairment in tier
+2 capital under the internal ratings-based approach
+Capital instruments subject to phase-out arrangements
+31 December 2022 31 December 2022 31 December 2021 31 December 2021
+X04
+Consolidated
+balance sheet
+as in published
+Balance sheet
+Derivative financial assets
+other financial institutions
+Placements with banks and
+Precious metals
+institutions
+Due from banks and other financial
+Cash and balances with central banks
+Assets
+consolidation*
+financial
+statements*
+scope of
+under
+regulatory
+Balance sheet
+Consolidated
+balance sheet
+as in published
+consolidation*
+scope of
+under
+regulatory
+financial
+statements*
+3,427,892
+232,865
+79
+Item
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+283
+Annual Report 2022
+N/A
+74,611
+101,072
+N/A
+Mortgage servicing rights (net of deferred tax liabilities)
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+75
+74
+28,773 X06+X10+X13
+X30
+155,815 X05+X07+X08+
+X09+X12+X29+
+176,987
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+are not subject to consolidation
+73
+Valid caps of surplus provision for loan impairment in
+tier 2 capital
+255,944
+31 December
+2022
+X03
+579,219
+641,029
+Surplus provision for loan impairment under the internal
+ratings-based approach
+78
+X02
+15,909
+19,820
+Valid cap of surplus provision for loan impairment in tier
+2 capital under the weighted approach
+77
+X01
+24,545
+31,195
+Provision for loan impairment under the weighted
+approach
+76
+Reference
+2021
+31 December
+3,427,892
+3,098,438
+3,098,438
+269,952
+270,017
+274,771
+274,839
+Other assets
+Deferred tax assets
+Construction in progress
+Fixed assets
+69,762
+61,782
+73,858
+65,878
+Long-term equity investments
+amortised cost
+6,756,647
+6,830,933
+7,549,344
+17,072
+7,634,395
+17,002
+18,172
+145,781
+145,781
+Due to central banks
+Liabilities
+Total assets
+34,920,291
+35,171,383
+39,336,059
+39,609,657
+430,485
+443,997
+328,887
+334,371
+79,259
+79,259
+101,072
+101,600
+18,182
+Financial investments measured at
+1,743,097
+1,803,604
+Reverse repurchase agreements
+76,140
+76,140
+87,205
+87,205
+480,693
+480,693
+676,879
+676,879
+265,962
+265,962
+273,289
+273,289
+301,191
+346,457
+323,131
+365,625
+864,067
+858,304
+663,496
+662,544
+2,115,023
+2,178,018
+Financial investments measured at FVTOCI
+560,683
+623,223
+637,851
+714,879
+Financial investments measured at FVTPL
+Undeducted portion of non-significant minority
+9,060,427
+10,302,218
+10,527,292
+Financial investments
+20,107,266
+20,109,200
+22,591,551
+22,593,648
+Loans and advances to customers
+9,257,760
+72
+Amounts below the thresholds for deduction
+8.0%
+45
+354,986
+354,915
+Additional tier 1 capital
+44
+capital
+Total regulatory adjustments to additional tier 1
+43
+capital
+Undeducted shortfall that should be deducted from tier 2
+42
+Other that should be deducted from additional tier 1
+capital
+41c
+by financial institutions that are under control but not
+subject to consolidation
+Shortfall in additional tier 1 capital instruments issued
+41b
+--
+Tier 1 capital (common equity tier 1 capital +
+additional tier 1 capital)
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+3,475,995
+Tier 2 capital:
+51
+Valid portion of surplus provision for loan impairment
+50
+Including: Invalid portion to tier 2 capital after the
+transition period
+49
+X27
+1,116
+1,013
+Valid portion of minority interests
+48
+period
+418,415
+20,285
+Invalid instruments to tier 2 capital after the transition
+47
+528,307
+Tier 2 capital instruments and related premiums
+46
+3,241,364
+41a
+--
+Significant minority investments in additional tier 1 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+33
+Reference
+2021
+31 December
+31 December
+2022
+Item
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+281
+Annual Report 2022
+Including: Portion classified as liabilities
+32
+X28+X32
+354,331
+354,331
+354,331
+Including: Portion classified as equity
+31
+Invalid instruments to additional tier 1 capital after the
+transition period
+34
+Valid portion of minority interests
+584
+40
+issued by financial institutions that are not subject to
+consolidation
+investments in additional tier 1 capital instruments
+--
+Deductible amount of non-significant minority
+39
+Reciprocal cross-holdings in additional tier 1 capital
+between banks, or between banks and other financial
+institutions
+38
+Tier 2 capital before regulatory adjustments
+Direct or indirect investments in own additional tier 1
+instruments
+354,986
+354,915
+Additional tier 1 capital: Regulatory adjustments
+36 Additional tier 1 capital before regulatory
+adjustments
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+35
+X26
+655
+37
+39,723
+275,764
+805,084
+X02+X04
+66
+99
+2.5%
+2.5%
+Including: Capital conservation buffer requirements
+65
+4.0%
+4.0%
+Institution specific buffer requirements
+64
+18.02%
+19.26%
+Capital adequacy ratio
+63
+14.94%
+15.64%
+Tier 1 capital adequacy ratio
+Including: Countercyclical buffer requirements
+62
+67
+1.5%
+8.0%
+6.0%
+6.0%
+5.0%
+5.0%
+Capital adequacy ratio
+71
+Tier 1 capital adequacy ratio
+70
+Common equity tier 1 capital adequacy ratio
+69
+Domestic minima for regulatory capital
+8.31%
+9.04%
+Percentage of common equity tier 1 capital meeting
+buffers to risk-weighted assets
+68
+1.5%
+Including: G-SIB buffer requirements
+13.31%
+14.04%
+Common equity tier 1 capital adequacy ratio
+31 December
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+financial institutions that are under control but not
+subject to consolidation
+Investments in tier 2 capital instruments issued by
+instruments issued by financial institutions that are not
+subject to consolidation
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks,
+or between banks and other financial institutions
+Deductible portion of non-significant minority investments
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+56b
+56a
+55
+54
+53
+52
+Tier 2 capital: Regulatory adjustments
+Item
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+282
+31 December
+2022
+2021
+Reference
+61
+Requirements for capital adequacy ratio and reserve capital
+21,690,349
+22,225,272
+60 Total risk-weighted assets
+3,909,669
+4,281,079
+Total capital (tier 1 capital+ tier 2 capital)
+248,774
+668,305
+59
+805,084
+Other that should be deducted from tier 2 capital
+Total regulatory adjustments to tier 2 capital
+Tier 2 capital
+58
+57
+56c
+X31
+--
+--
+668,305
+Due to banks and other financial institutions
+2,664,901
+2,664,901
+Long-term deferred expenses
+X16
+8,320
+Goodwill
+154,823
+Other receivables
+X15
+14,847
+Including: Land use rights
+X14
+22,320
+2,941
+Intangible assets
+Interest receivable
+328,887
+Other assets
+Including: Undeducted portion of significant minority investments in capital
+instruments issued by financial institutions that are not subject to
+consolidation
+6,604
+X13
+Repossessed assets
+Other
+X32
+219,717
+Including: Perpetual bonds
+X28
+134,614
+Including: Preference shares
+354,331
+Other equity instruments
+X18
+356,407
+Share capital
+X17
+528,307
+Including: Valid portion of tier 2 capital instruments and their premiums
+900,807
+Debt securities issued
+130,474
+3,405
+28,083
+X12
+2,710
+Including: Non-significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+Financial investments measured at FVTOCI
+Item
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+X08
+159,641
+X07
+63
+ICBC
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to consolidation
+Including: Non-significant minority investments in additional tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+286
+X06
+130
+Including: Significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X05
+57
+Including: Significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to consolidation
+Financial investments measured at amortised cost
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to consolidation
+Including: Significant minority investments in tier 2 capital instruments issued by
+financial institutions that are not subject to consolidation
+Including: Undeducted portion of non-significant minority investments in capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X11
+7,980
+Including: Investments in common equity tier 1 capital instruments issued by
+financial institutions that are under control but not subject to
+consolidation
+73,858
+Long-term equity investments
+X31
+X30
+Capital reserve
+7,549,344
+X10
+2,625
+X09
+Reference
+14,516
+2,115,023
+scope of
+consolidation
+31 December 2022
+Balance sheet
+under regulatory
+X29
+Including: Non-significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+148,174
+Annual Report 2022
+Preference shares
+1 Capital/China
+Preference shares
+(Domestic)
+The Bank
+360011
+Company Law of the People's
+Republic of China, Securities Law
+of the People's Republic of China,
+Guidance of the State Council on
+Launch of Preference Shares Pilot,
+Trial Administrative Measures on
+Preference Shares, Guidance on the
+Issuance of Preference Shares of
+Commercial Banks to Replenish Tier
+X27
+1,013
+X26
+584
+X25
+3,293
+11,761
+X23
+1,766,288
+X22
+496,406
+X21
+392,162
+(346)
+(Domestic)
+(17,457)
+The Bank
+Company Law of the People's
+Republic of China, Securities Law
+of the People's Republic of China,
+Guidance of the State Council on
+Launch of Preference Shares Pilot,
+Trial Administrative Measures on
+Preference Shares, Guidance on the
+Issuance of Preference Shares of
+Commercial Banks to Replenish Tier
+ICBC
+288
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Additional tier 1 capital
+Additional tier 1 capital
+Common equity tier 1 capital
+Common equity tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Common equity tier 1 capital
+Common equity tier 1 capital
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+1 Capital/China
+360036
+(582)
+X20
+(2,962)
+Including: Valid portion of additional tier 1 capital
+Including: Valid portion of common equity tier 1 capital
+Minority interests
+Retained profits
+General reserve
+Surplus reserve
+Other
+Foreign currency translation reserve
+Changes in share of other owners' equity of associates and joint ventures
+Including: Cash flow hedging reserve that relates to the hedging of items that
+are not fair-valued on the balance sheet
+Reserve for cash flow hedging
+Reserve for changes in fair value of financial assets
+Other comprehensive income
+Item
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+287
+Including: Valid portion of tier 2 capital
+(iv) Main features of eligible capital instruments
+Main features of regulatory capital instrument
+Issuer
+(2,987)
+533
+X24
+(20,839)
+Reference
+consolidation
+scope of
+31 December 2022
+Balance sheet
+under regulatory
+X19
+Securities and Futures
+Ordinance of Hong Kong/
+Hong Kong SAR, China
+1398
+Ordinary shares
+(H share)
+The Bank
+The Bank
+601398
+(A share)
+Ordinary shares
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+Securities Law of the People's
+Republic of China/China
+354,331
+637,851
+Financial investments
+31,896,125
+508,191
+731,818
+4,648
+5,624
+3,706
+464,748
+35,831,369
+36,095,831
+Total liabilities
+722,049
+Other liabilities
+3,800
+Deferred tax liabilities
+791,375
+791,375
+900,807
+905,953
+Debt securities issued
+31,656,178
+108,871
+(*)
+Annual Report 2022
+under
+regulatory
+Balance sheet
+statements*
+financial
+Consolidated
+balance sheet
+as in published
+consolidation*
+scope of
+under
+regulatory
+Balance sheet
+statements*
+financial
+balance sheet
+as in published
+Consolidated
+31 December 2022 31 December 2022 31 December 2021 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+285
+Prepared in accordance with PRC GAAP.
+108,897
+102,031
+102,074
+71,337
+96,350
+96,350
+Derivative financial liabilities
+87,180
+87,180
+64,126
+64,126
+Financial liabilities measured at FVTPL
+institutions
+489,340
+489,340
+520,663
+520,663
+Placements from banks and other financial
+39,723
+2,431,689
+2,431,689
+71,337
+Repurchase agreements
+574,778
+573,279
+Taxes payable
+40,659
+41,083
+49,034
+49,413
+Employee benefits payable
+26,441,774
+26,441,774
+scope of
+29,870,491
+Due to customers
+290,342
+290,342
+375,452
+375,452
+Certificates of deposit
+351,049
+365,943
+29,870,491
+Financial investments measured at FVTPL
+consolidation*
+Share capital
+(*)
+9,805
+3,264,113
+3,275,258
+3,504,690
+3,513,826
+Total equity
+17,503
+11,761
+18,655
+Minority interests
+parent company
+3,254,308
+3,257,755
+3,492,929
+3,495,171
+Equity attributable to equity holders of the
+1,618,142
+Prepared in accordance with PRC GAAP.
+1,620,642
+(iii) Description of related items
+Loans and advances to customers
+X04
+255,944
+X03
+641,029
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in tier 2 capital
+under the internal ratings-based approach
+X02
+19,820
+X01
+31,195
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2 capital
+under the weighted approach
+Reference
+23,263,775
+22,591,551
+consolidation
+scope of
+31 December 2022
+Balance sheet
+under regulatory
+Total loans and advances to customers
+Item
+1,766,288
+1,767,537
+Retained profits
+219,717
+219,717
+Perpetual bonds
+134,614
+134,614
+134,614
+134,614
+354,331
+354,331
+354,331
+354,331
+356,407
+356,407
+356,407
+356,407
+Preference shares
+Other equity instruments
+219,717
+219,717
+Capital reserve
+148,174
+438,640
+438,952
+496,406
+496,719
+General reserve
+356,849
+357,169
+392,162
+Equity
+392,487
+(18,658)
+(18,343)
+(20,839)
+(20,484)
+Other comprehensive income
+148,597
+148,597
+148,174
+Surplus reserve
+Additional tier 1 capital instruments and related premiums
+30,838
+Additional tier 1 capital:
+0.08%
+16,833
+0.10%
+23,948
+Rescheduled loans and advances overdue
+for less than three months
+(0.01%)
+(2,301)
+(0.01%)
+(2,281)
+Less: Rescheduled loans and advances
+overdue for more than three months
+0.09%
+19,134
+0.11%
+26,229
+Rescheduled loans and advances
+advances
+% of total
+loans and
+% of total
+loans and
+advances
+31 December 2021
+31 December 2022
+254,901
+284,031
+10,769
+15,309
+27,324
+Annual Report 2022
+279
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+4.
+356,849
+392,162
+Surplus reserve
+2a
+2,413,631
+2,654,856
+Retained earnings
+2
+X18
+356,407
+356,407
+Paid-in capital
+25,550
+1
+2021
+2022
+31 December
+31 December
+Common equity tier 1 capital:
+Item
+(i) Capital composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa [2013] No. 33)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+Correspondence between balance sheet in published financial statements and capital
+composition
+5.
+The Bank is a commercial bank incorporated in Chinese mainland with its banking business primarily conducted in Chinese
+mainland. As at 31 December 2022 and 31 December 2021, substantial amounts of the Bank's exposures arose from
+businesses with entities or individuals in Chinese mainland. Analyses of various types of exposures by counterparty have
+been disclosed in the respective notes to the financial statements.
+Exposures to non-bank entities in Chinese mainland
+Reference
+30,210
+26,399
+28,978
+0.21%
+Over 12 months
+Between 6 and 12 months
+0.14%
+0.13%
+As a percentage of the total gross loans and advances to customers:
+182,457
+190,229
+112,400
+110,720
+41,849
+48,882
+0.20%
+28,208
+Over 12 months
+Between 6 and 12 months
+Between 3 and 6 months
+2021
+2022
+31 December
+31 December
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+Loans and advances to customers (excludes accrued interest)
+(i) Overdue loans and advances to customers
+3.
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+30
+30,627
+X21
+0.48%
+0.82%
+48,177
+37,461
+39,140
+33,400
+41,139
+50,790
+45,934
+35,969
+42,383
+2021
+2022
+31 December
+0.54%
+31 December
+Overseas and other
+Northeastern China
+Yangtze River Delta
+Pearl River Delta
+Central China
+Western China
+Bohai Rim
+Head Office
+(ii) Overdue loans and advances to customers by geographical distribution
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amount of the
+loans and advances would be classified as overdue.
+The definition of overdue loans and advances to customers is as follows:
+0.88%
+(iii) Rescheduled loans and advances to customers
+2b
+Between 3 and 6 months
+496,406
+2021
+2022
+31 December
+31 December
+capital instruments issued by financial
+institutions
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in common
+equity tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation and
+undeducted portion of deferred tax assets arising from
+temporary differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in common equity tier 1
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+Mortgage servicing rights
+Deductible amount of significant minority investments
+in common equity tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+investments in common equity tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+Deductible amount of non-significant minority
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in common equity tier 1 capital
+between banks, or between banks and other financial
+institutions
+Reference
+23
+21
+22
+20
+19
+18
+17
+16
+Item
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+tax liabilities)
+280
+22
+Defined-benefit pension fund net assets (net of deferred
+N/A
+24
+2,886,378
+General reserve
+3,121,080
+Common equity tier 1 capital
+29
+17,138
+20,811
+Total regulatory adjustments to common equity tier
+1 capital
+28
+additional tier 1 capital and tier 2 capital
+Undeducted shortfall that should be deducted from
+27
+N/A
+Other that should be deducted from common equity tier
+Shortfall in common equity tier 1 capital instruments
+issued by financial institutions that are under control
+but not subject to consolidation
+26b
+X11
+7,980
+7,980
+Investments in common equity tier 1 capital instruments
+issued by financial institutions that are under control
+but not subject to consolidation
+26a
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+25
+N/A
+N/A
+Including: Deductible amount of mortgage servicing
+rights
+26c
+15
+1 capital
+3
+Common equity tier 1 capital before regulatory
+adjustments
+3,293
+Valid portion to common equity tier 1 capital during the
+transition period (only applicable to non-joint stock
+companies. Fill in 0 for joint stock banks)
+Valid portion of minority interests
+56
+4
+X24
+(18,658)
+Other
+3b
+X19
+148,597
+148,174
+3,141,891
+Capital reserve
+public reserve)
+129,939
+127,335
+Accumulated other comprehensive income (and other
+X23
+1,618,142
+1,766,288
+Retained profits
+2c
+X22
+438,640
+risk on fair-valued liabilities
+За
+3,539
+2,903,516
+(20,839)
+Common equity tier 1 capital: Regulatory adjustments
+| | |
+Unrealised gains and losses due to changes in own credit
+14
+Gain on sales related to asset securitisation
+13
+Shortfall of provision for loan impairment
+X25
+X20
+(4,202)
+(2,962)
+Cash flow hedge reserve that relates to the hedging of
+items that are not fair-valued on the balance sheet
+11
+those arising from temporary differences (net of
+deferred tax liabilities)
+Deferred tax assets that rely on future profits excluding
+12
+X16
+X14-X15
+10
+Prudential valuation adjustments
+8
+Goodwill (net of deferred tax liabilities)
+7,691
+9
+8,320
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+7,473
+5,669
+7
+11.5
+145,818
+4.8
+332
+2,894
+3,226
+Other
+Fee and commission income
+86
+(29)
+1,894
+Trust and agency services
+(0.3)
+8,738
+8,709
+Asset custody business
+9,756
+(9.8)
+148,727
+(953)
+1,808
+(2,909)
+480,083
+Less: Fee and commission expense
+2021
+2022
+8,803
+Item
+Growth rate
+Increase/
+In RMB millions, except for percentages
+OTHER NON-INTEREST RELATED GAINS
+Discussion and Analysis
+25
+Annual Report 2022
+In 2022, the Bank's net fee and commission income was RMB129,265 million, a decrease of RMB3,759 million or 2.8%
+over last year. Specifically, income from settlement, clearing business and cash management increased by RMB4,169 million,
+mainly driven by an increase in income from third party payment, spot exchange settlement and sale as well as foreign
+exchange trading business; income from bank card business registered an increase of RMB1,057 million, mainly due to the
+increase in income from partnership services and acquiring business. Affected by the volatile capital markets, income from
+personal wealth management and private banking, corporate wealth management, asset custody and other businesses
+dropped. The decrease in fee rates for investment banking, guarantee and commitment businesses resulted in a decline in
+revenue from these businesses.
+(2.8)
+(3,759)
+133,024
+129,265
+Net fee and commission income
+5.4
+850
+15,703
+16,553
+(2.0)
+Guarantee and commitment business
+(%)
+(993)
+Growth rate
+Increase/
+(decrease)
+2021
+2022
+Item
+In RMB millions, except for percentages
+NET FEE AND COMMISSION INCOME
+In 2022, non-interest income was RMB147,754 million, which was RMB22,446 million or 13.2% lower than that of last
+year, accounting for 17.6% of the operating income. Specifically, net fee and commission income decreased by RMB3,759
+million or 2.8% to RMB129,265 million, and other non-interest related gains fell by RMB18,687 million or 50.3% to
+RMB18,489 million.
+Non-interest Income
+Discussion and Analysis
+ICBC
+24
+Interest expense on debt securities and certificates of deposits issued was RMB35,874 million, indicating an increase of
+RMB6,348 million or 21.5% over last year, mainly due to the ascending interest rates of debt securities, such as certificates
+of deposit, issued by overseas institutions.
+Interest Expense on Debt Securities and Certificates of Deposit Issued
+Interest expense on due to banks and other financial institutions was RMB70,732 million, RMB26,345 million or 59.4%
+higher than that of last year, principally attributable to the 15.4% increase in the average balance of borrowing funds and
+the rising average cost year on year as affected by the factors such as currency and product duration.
+Interest Expense on Due to Banks and Other Financial Institutions
+1.62
+397,625
+24,477,111
+(decrease)
+1.75
+Settlement, clearing business and
+(6.5)
+45,439
+4,169
+15,165
+14,172
+Corporate wealth management services
+6.3
+1,057
+16,679
+17,736
+Bank card business
+(12.6)
+(2,830)
+22,416
+19,586
+Investment banking business
+private banking services
+(12.5)
+(3,748)
+30,001
+26,253
+Personal wealth management and
+cash management
+10.1
+41,270
+(%)
+9,040
+8,610
+Net increase/
+(decrease)
+Loans and advances to customers
+90,009
+(21,996)
+68,013
+Investment
+33,495
+2,400
+35,895
+Due from central banks
+1,665
+1,733
+3,398
+Due from banks and other financial institutions
+1,812
+10,852
+240,884
+(1.9)
+(1,071)
+55,599
+Interest rate
+54,528
+Volume
+In RMB millions
+34,322,243
+27,364,627
+30,829,623
+Net interest income
+693,687
+690,680
+Net interest spread
+Net interest margin
+1.73
+1.92
+1.92
+2.11
+Notes:
+(1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses on
+assets represent the average of the balances at the beginning of the year and at the end of the year.
+(2) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(3) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements etc.
+Annual Report 2022
+21
+Discussion and Analysis
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Item
+Assets
+Comparison between 2022 and 2021
+Increase/(decrease) due to
+Net trading income
+Total
+19.1
+In RMB millions, except for percentages
+Operating Expenses
+Other non-interest related gains amounted to RMB18,489 million, RMB18,687 million or 50.3% lower than that of the
+previous year. Specifically, the decrease in net gains on financial investments was primarily due to the decreasing valuation
+of equity instruments as affected by volatile capital markets and the unrealized losses generated on bond investments, while
+the decrease in other net operating income was mainly because of the net losses on exchange and exchange rate products.
+(50.3)
+(18,687)
+37,176
+18,489
+Total
+(69.7)
+(8,217)
+11,781
+3,564
+Other operating income, net
+(61.6)
+(10,125)
+16,440
+6,315
+Net gains on financial investments
+(3.9)
+(345)
+8,955
+Item
+Other
+Staff costs
+2021
+596
+3,125
+3,721
+Amortisation
+8.4
+782
+9,318
+10,100
+Taxes and surcharges
+0.7
+212
+28,822
+29,034
+Property and equipment expenses
+3.0
+4,138
+139,363
+143,501
+(%)
+Growth rate
+Increase/
+(decrease)
+2022
+Total deposits
+income
+9,981
+Average
+2021
+2022
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+Discussion and Analysis
+ICBC
+22
+advances to customers
+4.16
+832,136
+19,996,414
+4.05
+900,149
+22,248,094
+Total loans and
+4.32
+689,587
+15,951,269
+4.25
+743,441
+Interest
+17,508,798
+Average yield
+Interest
+10,266
+380,678
+1.79
+15,546
+866,735
+Discounted bills
+4.08
+439,575
+10,787,207
+3.86
+467,313
+12,091,996
+Corporate loans
+(%)
+Total liabilities
+balance
+(%)
+income
+balance
+Item
+Average yield
+Average
+2.70
+Medium to long-term loans
+142,549
+(61,916)
+64,923
+115,151
+53,093
+62,058
+6,348
+4,505
+1,843
+26,345
+16,768
+9,577
+82,458
+31,820
+50,638
+Changes in net interest income
+Changes in interest expenses
+Debt securities and certificates of deposit issued
+Due to banks and other financial institutions
+Deposits
+Liabilities
+118,158
+3,007
+3.52
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+Interest Income on Loans and Advances to Customers
+4,045,145
+3.31
+156,708
+4,739,296
+Short-term loans
+(%)
+income
+balance
+(%)
+Interest Average yield
+Average
+Interest Average yield
+income
+balance
+Item
+Average
+2021
+2022
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+customers.
+Interest income on loans and advances to customers was RMB900,149 million, RMB68,013 million or 8.2% higher as
+compared to that of last year, mainly due to the increase of 11.3% in the average balance of loans and advances to
+Interest Income
+Personal loans
+7,922,153
+371,740
+Time deposits
+Personal deposits
+1.49
+179,848
+12,063,245
+1.65
+218,035
+13,208,952
+Subtotal
+0.82
+58,618
+7,133,857
+0.92
+68,024
+7,405,878
+Demand deposits
+2.46
+121,230
+4,929,388
+2.59
+150,011
+7,742,072
+5,803,074
+223,607
+6,337,635
+984,304
+2.13
+21,434
+1,006,596
+Overseas business
+1.82
+207,796
+11,429,562
+1.83
+240,614
+13,149,079
+Subtotal
+0.37
+18,678
+5,091,927
+0.31
+17,007
+5,407,007
+Demand deposits
+2.98
+189,118
+2.89
+Time deposits
+Corporate deposits
+(%)
+Interest income on investment amounted to RMB298,722 million, representing an increase of RMB35,895 million or 13.7%
+as compared to that of last year, mainly due to the increase of 12.5% in the average balance of investment.
+Interest Income on Investment
+advances to customers
+4.16
+832,136
+19,996,414
+4.05
+900,149
+22,248,094
+Total loans and
+2.32
+32,723
+1,412,759
+3.33
+45,550
+1,367,210
+Overseas business
+4.71
+349,572
+7,415,770
+4.69
+Interest Income on Due from Central Banks
+Interest income on due from central banks was RMB45,425 million, representing an increase of RMB3,398 million or 8.1%
+as compared to that of last year, principally due to the rising average interest rate of due from overseas central banks and
+the increased size of due from domestic central bank.
+Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from banks and other financial institutions was RMB36,080 million, representing an increase of
+RMB10,852 million or 43.0% as compared to that of last year, primarily due to the ascending interest rate of foreign-
+currency lending funds.
+expense
+balance
+(%)
+expense
+balance
+Item
+Average cost
+Interest
+Average
+Average cost
+1.01
+Interest
+2021
+2022
+In RMB millions, except for percentages
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+Interest expense on deposits amounted to RMB480,083 million, representing an increase of RMB82,458 million or 20.7%
+over the previous year, primarily due to the increase of 11.8% in the average balance of due to customers and rise of 13
+basis points in the average cost.
+Interest Expense on Deposits
+Interest Expense
+Discussion and Analysis
+23
+Annual Report 2022
+Average
+1,991,928
+3.1
+Non-interest-bearing liabilities
+100.0
+422,565
+Profit before taxation
+8.6
+74,045
+7.9
+66,551
+Overseas and other
+3.4
+29,582
+3.5
+29,214
+Northeastern China
+14.7
+126,799
+15.5
+130,802
+Western China
+12.2
+105,357
+13.6
+424,899
+114,809
+100.0
+257
+14.2
+60,079
+Central China
+15.2
+64,383
+22.5
+95,094
+Bohai Rim
+14.1
+59,699
+14.1
+59,687
+Pearl River Delta
+19.8
+83,920
+23.2
+98,133
+Yangtze River Delta
+13.6
+58,031
+0.1
+Head Office
+47,115
+Central China
+145,660
+(%)
+Amount
+Item
+Percentage
+Percentage
+2021
+2022
+In RMB millions, except for percentages
+Discussion and Analysis
+Summary Geographical Segment Information
+ICBC
+26
+Income tax expense decreased by RMB13,156 million or 17.6% to RMB61,527 million as compared to the previous year.
+The effective tax rate stood at 14.56%, lower than the statutory tax rate of 25%, primarily because the interest income on
+Chinese government bonds and local government bonds were exempted from tax under the relevant tax law.
+Income Tax Expense
+Share of results of associates and joint ventures stood at RMB4,427 million, representing an increase of RMB1,558 million
+or 54.3% over last year, mainly due to the increase in subsidiaries' share of results of associates and joint ventures.
+Share of Results of Associates and Joint Ventures
+In 2022, the Bank set aside the impairment losses on assets of RMB182,419 million, a decrease of RMB20,204 million or
+10.0% as compared to that of last year. Specifically, the impairment losses on loans were RMB143,173 million, indicating a
+decrease of RMB25,094 million or 14.9%. Please refer to "Note 14. to the Consolidated Financial Statements: Impairment
+Losses on Assets; Note 30. to the Consolidated Financial Statements: Impairment Allowance" for details.
+Impairment Losses on Assets
+2.0
+4,657
+Discussion and Analysis
+Amount
+16.9
+(%)
+841,441
+18.3
+153,822
+Bohai Rim
+12.5
+107,474
+13.5
+113,459
+Pearl River Delta
+15.9
+136,544
+17.7
+148,527
+Yangtze River Delta
+15.8
+135,419
+10.0
+84,257
+Head Office
+100.0
+860,880
+100.0
+Operating income
+Regulatory policies supported the steady development
+of the banking sector. The Administrative Measures for
+Related Party Transactions of Banking Insurance Institutions
+and the Administrative Measures for the Implementation
+of the Expected Credit Loss Law of Commercial Banks, etc.
+were promulgated, and the Administrative Measures for
+Corporate Governance Supervision of Banking Insurance
+Institutions was revised and issued, to guide financial
+institutions to strengthen internal governance and improve
+the long-term risk prevention and control mechanism.
+The list of systemically important banks was released to
+strengthen supervision over systemically important banks.
+The Administrative Measures for Acceptance, Discounting
+and Rediscounting of Commercial Bills was revised
+and issued to promote the standardized and healthy
+development of the bill market. To support real economy
+with financial services, 23 measures were introduced, a
+long-term mechanism was promoted to provide financial
+services to small and micro enterprises that dare to lend,
+are willing to lend, able to lend and good at lending, and
+16 measures were introduced to support the steady and
+healthy development of the real estate market and stabilize
+the overall macroeconomic performance. The individual
+pension system was officially launched with supporting
+policies, preliminarily forming an individual pension system
+and management system. More facilitation measures were
+provided for foreign institutional investors to invest in and
+raise funds in the Chinese bond market, expanding the
+two-way opening of the financial market.
+11.1
+61,841
+Due from banks and other financial institutions
+8.8
+3,098,438
+8.7
+3,427,892
+Cash and balances with central banks
+26.3
+9,257,760
+26.6
+10,527,292
+Investment
+57.2
+20,109,200
+57.0
+22,593,648
+Net loans and advances to customers(1)
+Percentage
+(%)
+603,764
+45,719
+Amount
+20,667,245
+In RMB millions, except for percentages
+At 31 December 2021
+1,042,504
+672,224
+2.6
+2.4
+(8,823)
+ICBC
+28
+The Bank planned and managed the scale, pace and structure of credit grants, and continued to improve the quality
+and efficiency of serving the real economy. It actively supported the construction of ongoing infrastructure projects and
+major projects making up for deficiencies in new urbanization and transportation areas, and effectively implemented the
+rural revitalization strategy. It grasped the development opportunities of green finance comprehensively, and continued
+to increase its investment and financing support for key fields of the advanced manufacturing industry such as intelligent
+manufacturing, digital economy, strategic emerging industries and transformation and upgrading of traditional industries.
+As at the end of 2022, total loans amounted to RMB23,212,312 million, RMB2,545,067 million or 12.3% higher compared
+with the end of the previous year, of which, RMB denominated loans of domestic branches were RMB21,482,964 million,
+up by RMB2,553,039 million or 13.5%.
+Loan
+Note: (1) Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers".
+100.0
+35,171,383
+100.0
+39,609,657
+Total assets
+3.4
+1,215,339
+2.9
+1,154,254
+Other
+1.9
+663,496
+2.2
+864,067
+Reverse repurchase agreements
+827,150
+Western China
+53,560
+Amount
+Discussion and Analysis
+27
+Annual Report 2022
+As at the end of 2022, total assets of the Bank amounted to RMB39,609,657 million, RMB4,438,274 million or 12.6%
+higher than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred
+to as "total loans") increased by RMB2,545,067 million or 12.3% to RMB23,212,312 million, investment increased by
+RMB1,269,532 million or 13.7% to RMB10,527,292 million, and cash and balances with central banks increased by
+RMB329,454 million or 10.6% to RMB3,427,892 million.
+Assets Deployment
+In 2022, in response to the changes in external development trends, the Bank earnestly implemented macro-economic
+and financial policies and regulatory requirements, enhanced the service efficiency for the real economy on all fronts,
+continued to promote the balanced, coordinated and sustainable development of asset and liability management business,
+and holistically arranged the aggregate amount, structure and pace of assets and liabilities. While maintaining a moderate
+growth of the total assets and liabilities, the Bank deeply promoted the continuous optimization of the asset and liability
+structure, coordinated development of quantity and price, and realized effective promotion in the quality of assets and
+liabilities and proper growth in their quantity.
+Balance Sheet Analysis
+Note: Please see "Note 49. to the Consolidated Financial Statements: Segment Information" for details.
+10.5
+45,015
+8.5
+35,596
+Overseas and other
+0.3
+1,259
+2.8
+11,878
+Northeastern China
+15.4
+65,477
+14.6
+Structure of assets
+23,212,312
+Item
+Add: Accrued interest
+(%)
+Percentage
+At 31 December 2022
+3.4%
+Other
+2.9%
+1.9%
+Reverse repurchase agreements
+2.2%
+2.4%
+Due from banks and
+other financial institutions
+8.8%
+Cash and balances with central banks
+26.3%
+Investment
+57.2%
+Net loans and advances to customers
+57.0%
+26.6%
+8.7%
+2.6%
+2021
+2022
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+Total loans and advances to customers
+2,030,317
+The financial system ran smoothly. At the end of 2022,
+the balance of broad money supply (M2) was RMB266.43
+trillion, up 11.8% year on year. The existing social
+financing scale size stood at RMB344.21 trillion, up
+9.6% year on year. The outstanding RMB loans reached
+RMB213.99 trillion, increasing by 11.1% year on year.
+The balance of RMB deposits amounted to RMB258.50
+trillion, up 11.3% year on year. The total issuance amount
+year.
+4.16
+Investment
+9,001,876
+298,722
+3.32
+7,999,530
+262,827
+3.29
+Due from central banks(2)
+2,991,645
+45,425
+1.52
+2,888,381
+42,027
+1.46
+Due from banks and other financial
+1,866,884
+36,080
+1.93
+1,772,522
+25,228
+832,136
+1.42
+19,996,414
+900,149
+Net Interest Income
+In 2022, net interest income was RMB693,687 million, RMB3,007 million or 0.4% higher than that of last year, accounting
+for 82.4% of the Bank's operating income. Interest income grew by RMB118,158 million or 10.2% to RMB1,280,376
+million and interest expenses increased by RMB115,151 million or 24.4% to RMB586,689 million. Net interest spread and
+net interest margin ("NIM") came at 1.73% and 1.92% respectively, both down 19 basis points from the previous year,
+largely due to the Bank's enhanced support for the real economy, multiple reductions in the Loan Prime Rate ("LPR”), a
+steady decrease in loan yield, and a rise in the average deposit interest rate driven by the increasing proportion of time
+deposits.
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In RMB millions, except for percentages
+2021
+Interest
+2022
+Interest
+Average
+income/ Average yield/
+Average
+income/ Average yield/
+balance
+expense
+cost (%)
+balance
+expense
+cost (%)
+Item
+Assets
+Loans and advances to customers
+22,248,094
+4.05
+Discussion and Analysis
+institutions(3)
+36,108,499
+70,732
+1.86
+3,287,917
+44,387
+1.35
+financial institutions(3)
+Debt securities and certificates of
+1,132,767
+35,874
+3.17
+1,072,667
+29,526
+2.75
+deposit issued
+Total interest-bearing liabilities
+32,291,926
+586,689
+1.82
+28,837,695
+471,538
+1.64
+3,794,532
+Total interest-generating assets
+1.62
+24,477,111
+1,280,376
+3.55
+32,656,847
+1,162,218
+3.56
+Non-interest-generating assets
+2,520,529
+2,659,895
+Allowance for impairment losses on
+(683,492)
+(574,932)
+assets
+Total assets
+37,945,536
+34,741,810
+Liabilities
+Deposits
+Due to banks and other
+27,364,627
+480,083
+1.75
+397,625
+of various bonds in the bond market reached RMB61.45
+trillion, basically keeping flat year on year. The major index
+of stock market fell back, with the Shanghai Composite
+Index and the Shenzhen Component Index dropping
+by 15.1% and 25.9% respectively over the end of last
+year. The central parity of RMB against the US dollar was
+RMB6.9646, a depreciation of 8.5% from the end of last
+ICBC
+(70.4)
+(%)
+Net interest income
+693,687
+690,680
+3,007
+0.4
+236,227
+27 Balance Sheet Analysis
+• Assets Deployment
+• Liabilities
+• Shareholders' Equity
+Off-balance Sheet Items
+Non-interest income
+147,754
+170,200
+(22,446)
+(13.2)
+Operating income
+841,441
+860,880
+(19,439)
+(2.3)
+Less: Operating expenses
+(decrease)
+240,884
+2021
+Item
+Total assets of commercial banks grew steadily, with stable
+credit asset quality and sufficient risk offsetting capacity
+on the whole. At the end of 2022, the RMB and foreign-
+currency assets of commercial banks totaled RMB319.81
+trillion, up 10.8% year on year. The balance of NPLs of
+commercial banks reached RMB2.98 trillion, with a NPL
+ratio of 1.63% and allowance to NPLs of 205.85%. The
+capital adequacy ratio was 15.17%. Specifically, the RMB
+and foreign-currency assets of large commercial banks
+totaled RMB156.26 trillion, up 12.9% year on year.
+The balance of NPLs of large commercial banks reached
+RMB1.21 trillion, with a NPL ratio of 1.31% and allowance
+to NPLs of 245.04%. The capital adequacy ratio was
+17.76%.
+In 2022, ICBC stayed true to the general principle of
+pursuing progress while ensuring stability, fully and
+faithfully applied the new development philosophy
+on all fronts, and worked to create a new pattern of
+development. The Bank has stepped into a new stage of
+high-quality development and taken new steps towards the
+building of a world-class and modern financial enterprise
+with Chinese characteristics. The Bank was ranked the 1st
+place among the Top 1000 World Banks by The Banker,
+and the 1st place in the list of commercial banks of the
+Global 500 in Fortune for the tenth consecutive year, and
+took the 1st place among the Top 500 Banking Brands of
+Brand Finance for the seventh consecutive year, further
+demonstrating ICBC's international influence.
+Annual Report 2022
+19
+Discussion and Analysis
+FINANCIAL STATEMENTS ANALYSIS
+20 Income Statement Analysis
+• Net Interest Income
+• Interest Income
+• Interest Expense
+• Non-interest Income
+• Operating Expenses
+• Impairment Losses on
+Assets
+• Share of Results of
+Associates and Joint
+Ventures
+• Income Tax Expense
+Income Statement Analysis
+In 2022, the Bank maintained steady progress, improved quality in
+operation, and continuously improved its capability to achieve balanced,
+coordinated and sustainable development. The Bank actively performed
+its responsibilities as a large bank and continued to strengthen its support
+for the real economy. In the year, the Bank realized a net profit of
+RMB361,038 million, representing an increase of RMB10,822 million or
+3.1% as compared to the previous year. Return on average total assets
+stood at 0.97%, and return on weighted average equity was 11.43%.
+Operating income amounted to RMB841,441 million, representing a
+decrease of 2.3%. Specifically, net interest income grew by 0.4% to
+RMB693,687 million; non-interest income was RMB147,754 million,
+down by 13.2%. Operating expenses amounted to RMB240,884 million,
+representing an increase of 2.0%, and the cost-to-income ratio was
+27.43%. Impairment losses on assets were RMB182,419 million. Income
+tax expense decreased by 17.6% to RMB61,527 million.
+.
+Summary Geographical
+Segment Information
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In RMB millions, except for percentages
+Increase/ Growth rate
+2022
+20
+236,227
+2.0
+(13,156)
+(17.6)
+Net profit
+361,038
+350,216
+10,822
+Attributable to: Equity holders
+360,483
+348,338
+12,145
+3.5
+of the parent
+35 Reconciliation of Differences
+between the Financial
+Statements Prepared
+under PRC GAAP and Those
+under IFRSS
+company
+Non-controlling
+interests
+555
+1,878
+(1,323)
+74,683
+4,657
+61,527
+35 Analysis on Statement of
+Cash Flows
+Less: Impairment losses on assets
+182,419
+202,623
+(20,204)
+(10.0)
+Operating profit
+418,138
+422,030
+(3,892)
+(0.9)
+Share of results of associates and
+4,427
+2,869
+1,558
+54.3
+joint ventures
+Profit before taxation
+422,565
+424,899
+(2,334)
+(0.5)
+Less: Income tax expense
+Changes in interest income
+126,981
+The Bank
+2128044
+N/A
+The Bank
+Including: If convertible, specify issuer of instrument it
+N/A
+N/A
+N/A
+Common equity tier 1 capital
+Including: If convertible, specify instrument type
+convertible into
+conversion
+N/A
+N/A
+N/A
+Mandatory
+N/A
+Including: If convertible, mandatory or optional
+the Board resolution in respect of
+2018, the date of publication of
+trading days preceding 30 August
+H shares of the Bank for the 20
+NA
+N/A
+N/A
+VA
+N/A
+Non-viability Trigger Event occurs
+The initial conversion price is equal
+to the average trading price of the
+Including: If convertible, conversion rate
+N/A
+N/A
+the issuance plan
+N/A
+converts into
+Annual Report 2022
+Full or partial write-down when an
+Additional Tier 1 Capital Trigger
+Event occurs; full write-down
+when a Tier 2 Capital Trigger Event
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+N/A
+N/A
+N/A
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, permanent or temporary
+Including: If write-down, full or partial
+Event
+Non-viability Trigger Event
+Yes
+Yes
+Non-viability Trigger Event
+Additional Tier 1 Capital Trigger
+Event or Tier 2 Capital Trigger
+N/A
+Including: If write-down, write-down trigger(s)
+Yes
+No
+capital bonds (Offshore)
+Undated additional tier 1
+Undated additional tier 1
+capital bonds (Domestic)
+Undated additional tier 1
+capital bonds (Domestic)
+Preference shares
+(Offshore)
+Main features of regulatory capital instrument
+Write-down feature
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+291
+N/A
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+Fully or partially convertible when a
+N/A
+Yes
+Yes
+Including: Existence of a dividend stopper
+8 June 2026
+4.04% (interest rate) before
+Fixed to floating
+4.45% (interest rate) before
+30 July 2024
+23 September 2025
+3.58% (dividend rate) before
+Fixed to floating
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed to floating
+The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Payment Date since the First
+Redemption Date (8 June 2026).
+Yes
+Redemption of present bonds in
+full or in part on each Distribution
+The First Redemption Date is
+8 June 2026, in full or partial
+Payment Date since the First
+Redemption Date (30 July 2024).
+The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Redemption of present bonds in
+full or in part on each Distribution
+amount
+The First Redemption Date is
+30 July 2024, in full or partial
+Coupons/dividends
+partial amount
+23 September in each year
+after
+the First Redemption Date
+Including: Subsequent call dates, if applicable
+The First Redemption Date is
+23 September 2025, in full or
+Including: Optional call date, contingent call dates and
+redemption amount
+Yes
+Yes
+Yes
+amount
+Fully discretionary
+Fully discretionary
+Fully discretionary
+N/A
+N/A
+Non-viability Trigger Event
+Including: If convertible, conversion trigger(s)
+No
+No
+No
+Yes
+Convertible or non-convertible
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Including: Non-cumulative or cumulative
+No
+No
+No
+No
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+Including: Fully discretionary, partially discretionary or
+Fully discretionary
+Yes
+24 September 2026
+3.20% (interest rate) before
+Fixed to floating
+Payment Date since the First
+Redemption Date (24 September
+2026). The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Redemption of present bonds in
+full or in part on each Distribution
+The First Redemption Date is
+24 September 2026, in full or
+partial amount
+Including: If convertible, fully or partially
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+occurs
+Permanent write-down
+N/A
+The First Redemption Date is
+Including: Subsequent call dates, if applicable
+redemption amount
+Including: Optional call date, contingent call dates and
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Main features of regulatory capital instrument
+26 November 2026 in full or partial
+25 March 2029, in full amount
+N/A
+Yes
+Yes
+No
+Yes
+25 March 2029
+21 September 2025
+Dated
+Dated
+21 March 2019
+21 March 2019
+Debt securities issued
+Debt securities issued
+25 March 2024, in full amount
+amount
+Redemption of present bonds in
+full or in part on each Distribution
+Payment Date since the First
+Redemption Date (26 November
+2026). The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+No
+No
+No
+Convertible or non-convertible
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+No
+Mandatory
+Mandatory
+Mandatory
+Fully discretionary
+No
+No
+Yes
+26 November 2026
+4.51%
+Fixed
+Fixed
+4.26%
+Fixed
+4.875%
+3.65% (interest rate) before
+Fixed to floating
+N/A
+N/A
+MA
+mandatory cancellation of coupons/dividends
+Including: Fully discretionary, partially discretionary or
+Including: Existence of a dividend stopper
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Coupons/dividends
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Debt securities issued
+21 September 2015
+Dated
+Perpetual
+No maturity date
+24 November 2021
+RMB10,000
+The Bank
+1928007
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+1928006
+law
+shall be governed by, and
+construed in accordance with PRC
+except that the provisions of the
+Notes relating to subordination
+Tier 2 capital bonds
+The Bank
+Rule 144A ISIN: US455881AD47
+Regulation S ISIN: USY39656AC06
+The Notes and the Fiscal Agency
+Agreement shall be governed
+by, and shall be construed in
+accordance with New York law,
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+Unique identifier
+Undated additional tier 1
+capital bonds (Domestic)
+Main features of regulatory capital instrument
+Issuer
+N/A
+N/A
+N/A
+N/A
+No
+No
+No
+No
+additional tier 1 capital bonds
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Permanent write-down
+N/A
+Permanent write-down
+N/A
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Perpetual
+No maturity date
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+RMB45,000
+USD2,000
+RMB30,000
+Other equity
+Tier 2 capital bonds
+RMB10,000
+Tier 2 capital bonds
+RMB45,000
+Tier 2 capital bonds
+RMB equivalent 8,307
+RMB29,997
+capital bonds (Domestic)
+Undated additional tier 1
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+292
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Additional tier 1 capital instrument
+Instrument type
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Additional tier 1 capital
+Including: Post-transition arrangement of Regulation
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Additional tier 1 capital
+Regulatory treatment
+No
+No maturity date
+Perpetual
+No
+No
+No
+Fully discretionary
+Yes
+Fully discretionary
+Yes
+and 22 November 2025
+rate) between 23 November 2020
+Non-cumulative
+Fully discretionary
+N/A
+N/A
+Non-cumulative
+No
+No
+Including: If convertible, conversion trigger(s)
+Convertible or non-convertible
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+N/A
+Fully discretionary
+Including: Fully discretionary, partially discretionary or
+Including: Existence of a dividend stopper
+4.2% (dividend rate) before 24
+September 2024
+4.5% (dividend rate) before 23
+November 2020, 4.58% (dividend
+Fixed to floating
+Fixed to floating
+Non-cumulative
+Non-cumulative
+No
+N/A
+Including: If convertible, specify instrument type
+convertible into
+Main features of regulatory capital instrument
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+289
+Annual Report 2022
+Mandatory
+Mandatory
+The initial conversion price is equal
+to the average trading price of the
+A shares of the Bank for the 20
+trading days preceding 30 August
+2018, the date of publication of
+the Board resolution in respect t of
+the issuance plan
+occurs
+Event occurs; fully convertible
+when a Tier 2 Capital Trigger Event
+The initial conversion price is equal
+to the average trading price of
+the A shares of the Bank for the
+20 trading days preceding 25 July
+2014, the date of publication of
+the Board resolution in respect of
+the issuance plan
+occurs
+Fully or partially convertible when
+an Additional Tier 1 Capital Trigger
+Event occurs; fully convertible
+when a Tier 2 Capital Trigger Event
+N/A
+N/A
+NA
+conversion
+Including: If convertible, mandatory or optional
+N/A
+N/A
+Including: If convertible, conversion rate
+.
+N/A
+NA
+N/A
+Including: If convertible, fully or partially
+Yes
+Additional Tier 1 Capital Trigger
+Event or Tier 2 Capital Trigger
+Event
+Fully or partially convertible when
+an Additional Tier 1 Capital Trigger
+Yes
+Additional Tier 1 Capital Trigger
+Event or Tier 2 Capital Trigger
+Event
+Floating
+N/A
+Including: If convertible, specify issuer of instrument it
+N/A
+Floating
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+RMB70,000
+RMB45,000
+RMB86,795
+RMB69,981
+RMB44,947
+RMB168,374
+RMB269,612
+RMB336,554
+Par value of instrument (in millions)
+Issuer call (subject to prior supervisory approval)
+(in millions, as at the latest reporting date)
+capital instrument
+capital instrument
+Additional tier 1 capital instrument
+Additional tier 1 capital instrument
+Common equity tier 1
+Common equity tier 1
+Instrument type
+Preference shares
+(Domestic)
+Preference shares
+(Domestic)
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+Main features of regulatory capital instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Amount recognised in regulatory capital
+Share capital, capital reserve
+19 October 2006
+Perpetual
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+Commences on the First
+Redemption Date (24 September
+2024) and ends on the completion
+date of redemption or conversion
+of all the Domestic Preference
+Shares
+partial amount
+The First Redemption Date is
+24 September 2024, in full or
+Perpetual
+No maturity date
+Yes
+The First Redemption Date is
+18 November 2020, in full or
+partial amount
+Commences on the First
+Redemption Date (18 November
+2020) and ends on the completion
+date of redemption or conversion
+of all the Domestic Preference
+Shares
+N/A
+MA
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+Yes
+No maturity date
+Perpetual
+Perpetual
+19 September 2019
+18 November 2015
+19 October 2006
+Other equity
+Other equity
+Share capital, capital reserve
+N/A
+N/A
+Including: Optional call date, contingent call dates and
+No
+No
+No maturity date
+No maturity date
+Including: Coupon rate and any related index
+converts into
+Write-down feature
+Including: If write-down, write-down trigger(s)
+Parent company/Group
+Additional tier 1 capital instrument
+Parent company/Group
+Additional tier 1 capital instrument
+Parent company/Group
+Additional tier 1 capital instrument
+RMB equivalent 19,687
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+RMB79,987
+Additional tier 1 capital
+Regulatory treatment
+relating to subordination of the
+Notes shall be governed by and
+construed in accordance with PRC
+law and regulations
+However, the provisions in the
+terms and conditions of the Notes
+be governed by and construed
+in accordance with English law.
+of or in connection with them shall
+Regulation S ISIN: XS2383421711
+The Notes and any other non-
+contractual obligations arising out
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+The Bank
+2128021
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+The creation and issue of the
+Offshore Preference Shares
+and the rights and obligations
+(including non-contractual rights
+and obligations) attached to them
+are governed by, and shall be
+construed in accordance with, PRC
+law
+I
+1928018
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+RMB69,992
+Parent company/Group
+Additional tier 1 capital instrument
+RMB equivalent 39,742
+Par value of instrument (in millions)
+Undated additional tier 1
+Undated additional tier 1
+capital bonds (Domestic)
+Undated additional tier 1
+capital bonds (Domestic)
+(Offshore)
+Perpetual
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Main features of regulatory capital instrument
+Perpetual or dated
+Preference shares
+Yes
+Perpetual
+No maturity date
+capital bonds (Offshore)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+N/A
+No
+ICBC
+290
+24 September 2021
+Other equity
+USD6,160
+4 June 2021
+Other equity
+RMB70,000
+26 July 2019
+23 September 2020
+Other equity
+RMB80,000
+USD2,900
+Other equity
+Original date of issuance
+Accounting treatment
+Undated additional tier 1
+capital bonds (Offshore)
+The Bank
+The Bank
+Undated additional tier 1
+capital bonds (Domestic)
+Undated additional tier 1
+capital bonds (Domestic)
+N/A
+N/A
+No
+No
+=
+No
+=
+No
+류류류를 증
+The Bank
+Common equity tier 1 capital
+(Domestic)
+Preference shares
+The Bank
+Common equity tier 1 capital
+Preference shares
+(Domestic)
+NA
+N/A
+N/A
+NA
+NA
+N/A
+NA
+N/A
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, permanent or temporary
+Including: If write-down, full or partial
+N/A
+No maturity date
+N/A
+N/A
+(Offshore)
+The Bank
+4620
+Preference shares
+Governing law(s) of the instrument
+Unique identifier
+Main features of regulatory capital instrument
+Issuer
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+N/A
+No
+No
+N/A
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+Subordinated to depositor,
+general creditor, creditor of the
+subordinated debts and preference
+shareholders
+No
+N/A
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+shareholders
+subordinated debts and preference
+general creditor, creditor of the
+Subordinated to depositor,
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Non-cumulative
+25 March 2034
+Non-cumulative
+RMB50,000
+RMB30,000
+RMB10,000
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+RMB10,000
+RMB50,000
+RMB30,000
+RMB10,000
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+RMB10,000
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Amount recognised in regulatory capital
+Including: Eligible to the parent company/group level
+Instrument type
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Parent company/Group
+Debt securities issued
+Original date of issuance
+Perpetual or dated
+4.15%
+4.45%
+Fixed
+Fixed
+Fixed
+Fixed
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+15 December 2031, in full amount
+15 December 2026, in full amount
+21 January 2026, in full amount
+Including: Optional call date, contingent call dates and 16 November 2030, in full amount
+15 December 2036
+Yes
+15 December 2031
+Yes
+Debt securities issued
+13 December 2021
+Dated
+Debt securities issued
+13 December 2021
+Dated
+Debt securities issued
+19 January 2021
+Dated
+21 January 2031
+Yes
+Yes
+Issuer call (subject to prior supervisory approval)
+16 November 2035
+Including: Original maturity date
+12 November 2020
+Dated
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Regulatory treatment
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Permanent write-down
+N/A
+Partial or full write-down
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+Yes
+N/A
+Permanent write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Yes
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+N/A
+Partial or full write-down
+Permanent write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+3.48%
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+The Bank
+2128052
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+2128051
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Tier 2 capital bonds
+The Bank
+2128002
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Non-cumulative
+Governing law(s) of the instrument
+Tier 2 capital bonds
+The Bank
+2028050
+Unique identifier
+Issuer
+Main features of regulatory capital instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+296
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+subordinated debts that have been
+capital instruments and hybrid
+capital bonds; pari passu with other
+N/A
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+3.74%
+No
+Permanent write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Yes
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+N/A
+Partial or full write-down
+Permanent write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+N/A
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Whichever occurs earlier: (i) CBIRC
+Whichever occurs earlier: (i) CBIRC
+Including: If write-down, write-down trigger(s)
+Yes
+Yes
+Write-down feature
+converts into
+N/A
+NA
+MA
+N/A
+N/A
+having decided that a write-
+down is necessary, without which
+Yes
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+ICBC
+298
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+subordinated debts that have been
+capital instruments and hybrid
+capital bonds; pari passu with other
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Permanent write-down
+N/A
+Partial or full write-down
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+NA
+N/A
+MA
+Including: If convertible, specify issuer of instrument it
+Tier 2 capital bonds
+No
+No
+No
+=
+Convertible or non-convertible
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+297
+Annual Report 2022
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+No
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+No
+No
+Tier 2 capital bonds
+Including: Existence of a dividend stopper
+=
+Including: If convertible, conversion trigger(s)
+convertible into
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+Including: If convertible, specify instrument type
+conversion
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+No
+having decided that a write-
+down is necessary, without which
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Whichever occurs earlier: (i) CBIRC
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+N/A
+No
+N/A
+No
+N/A
+N/A
+MA
+No
+No
+ICBC
+294
+Including: If yes, specify non-compliant features
+Main features of regulatory capital instrument
+Non-compliant transitioned features
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Permanent write-down
+N/A
+N/A
+Permanent write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Issuer
+Unique identifier
+Tier 2 capital bonds
+The Bank
+1928011
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Including: Eligible to the parent company/group level
+Instrument type
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Regulatory treatment
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+2028049
+The Bank
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+2028041
+Tier 2 capital bonds
+The Bank
+1928012
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Tier 2 capital
+Tier 2 capital bonds
+Yes
+Whichever occurs earlier: (i) CBIRC
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+N/A
+NA
+Including: If convertible, specify instrument type
+convertible into
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+conversion
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+NA
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+No
+No
+No
+No
+Non-cumulative
+N/A
+N/A
+N/A
+NA
+Tier 2 capital bonds
+Yes
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Partial or full write-down
+viable
+Yes
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Permanent write-down
+N/A
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, full or partial
+Yes
+Non-viability Trigger Event
+Including: If write-down, write-down trigger(s)
+Write-down feature
+Tier 2 capital bonds
+Undated additional tier 1
+capital bonds (Domestic)
+Main features of regulatory capital instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+N/A
+NA
+293
+Annual Report 2022
+MA
+N/A
+N/A
+MA
+N/A
+N/A
+HAP
+Including: If convertible, specify issuer of instrument it
+converts into
+MA
+N/A
+Partial or full write-down
+Parent company/Group
+Subordinated to depositor and
+general creditor, pari passu with
+other subordinated debts
+Parent company/Group
+Tier 2 capital instrument
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+No
+=
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+No
+No
+=
+Convertible or non-convertible
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+295
+Annual Report 2022
+Non-cumulative
+Non-cumulative
+No
+N/A
+No
+N/A
+Including: If convertible, mandatory or optional
+Whichever occurs earlier: (i) CBIRC
+Including: If write-down, write-down trigger(s)
+Yes
+Yes
+Write-down feature
+converts into
+N/A
+NA
+MA
+Tier 2 capital instrument
+N/A
+NA
+N/A
+MA
+Including: If convertible, specify issuer of instrument it
+convertible into
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+Including: If convertible, specify instrument type
+conversion
+N/A
+N/A
+N/A
+N/A
+N/A
+Non-cumulative
+N/A
+No
+24 September 2025, in full amount
+26 April 2029, in full amount
+26 April 2024, in full amount
+Including: Optional call date, contingent call dates and
+16 November 2030
+Yes
+24 September 2030
+Yes
+12 November 2020
+Dated
+Debt securities issued
+Debt securities issued
+22 September 2020
+Dated
+24 April 2019
+Dated
+26 April 2034
+Yes
+24 April 2019
+Dated
+26 April 2029
+Yes
+Issuer call (subject to prior supervisory approval)
+Debt securities issued
+Debt securities issued
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+RMB30,000
+RMB30,000
+RMB60,000
+RMB10,000
+RMB45,000
+RMB60,000
+RMB10,000
+RMB45,000
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Non-cumulative
+16 November 2025, in full amount
+redemption amount
+Par value of instrument (in millions)
+N/A
+Including: Subsequent call dates, if applicable
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+No
+Mandatory
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+No
+No
+No
+No
+Including: Existence of a dividend stopper
+Mandatory
+Coupons/dividends
+4.15%
+N/A
+N/A
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed
+N/A
+Fixed
+Fixed
+4.40%
+4.69%
+Fixed
+4.20%
+conversion
+convertible into
+N/A
+NA
+N/A
+N/A
+N/A
+NA
+Including: If convertible, specify issuer of instrument it
+Including: If convertible, specify instrument type
+KA
+Whichever occurs earlier: (i) CBIRC
+NA
+N/A
+NA
+N/A
+N/A
+MA
+N/A
+converts into
+Write-down feature
+Yes
+Yes
+Including: If write-down, write-down trigger(s)
+MA
+N/A
+Including: If convertible, fully or partially
+N/A
+=
+Convertible or non-convertible
+Whichever occurs earlier: (i) CBIRC
+No
+No
+Tier 2 capital bonds
+No
+Tier 2 capital bonds
+=
+No
+Including: If convertible, conversion trigger(s)
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+300
+ICBC
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Issuer
+Unique identifier
+Tier 2 capital bonds
+The Bank
+092280065
+Tier 2 capital bonds
+The Bank
+092280066
+Tier 2 capital bonds
+The Bank
+092280134
+Tier 2 capital bonds
+The Bank
+092280135
+Tier 2 capital bonds
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+having decided that a write-
+down is necessary, without which
+N/A
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Yes
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Permanent write-down
+N/A
+Yes
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+No
+Tier 2 capital bonds
+Main features of regulatory capital instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+RMB35,000
+RMB5,000
+RMB45,000
+RMB5,000
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+RMB35,000
+Tier 2 capital
+RMB5,000
+Tier 2 capital
+Including: Eligible to the parent company/group level
+Instrument type
+Governing law(s) of the instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instrument
+Issuer
+Unique identifier
+Tier 2 capital bonds
+The Bank
+2228004
+Tier 2 capital bonds
+The Bank
+2228005
+Tier 2 capital bonds
+The Bank
+2228024
+Tier 2 capital bonds
+The Bank
+2228025
+Governing law(s) of the instrument
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Amount recognised in regulatory capital
+Main features of regulatory capital instrument
+RMB45,000
+Debt securities issued
+3.60%
+3.50%
+3.74%
+Including: Existence of a dividend stopper
+No
+No
+No
+Including: Fully discretionary, partially discretionary or
+Mandatory
+Mandatory
+Mandatory
+No
+Mandatory
+mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+No
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Annual Report 2022
+299
+3.28%
+RMB5,000
+Fixed
+Fixed
+18 January 2022
+Dated
+20 January 2032
+Issuer call (subject to prior supervisory approval)
+Yes
+Debt securities issued
+18 January 2022
+Dated
+20 January 2037
+Yes
+Debt securities issued
+Debt securities issued
+12 April 2022
+Dated
+14 April 2032
+Yes
+12 April 2022
+Dated
+14 April 2037
+Yes
+Including: Optional call date, contingent call dates and
+20 January 2027, in full amount
+20 January 2032, in full amount
+14 April 2027, in full amount
+14 April 2032, in full amount
+redemption amount
+Including: Subsequent call dates, if applicable
+N/A
+N/A
+N/A
+N/A
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed
+Fixed
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+12
+Convertible or non-convertible
+High-quality liquid assets
+S/N Item
+The Group discloses liquidity coverage ratio using Advanced Capital Management Approach in accordance with Measures
+for the Disclosure of Information on Liquidity Coverage Ratio by Commercial Banks (Yin Jian Fa [2015] No. 52).
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Capital Management Approach
+7.
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+305
+Annual Report 2022
+37,292,522
+8.69%
+8.32%
+Leverage ratio
+22
+41,780,554
+Balance of adjusted on- and off-balance sheet assets
+21
+3,241,364
+3,475,995
+Net tier 1 capital
+20
+2,244,477
+1 Total high-quality liquid assets (HQLA)
+Cash outflows
+Fourth-quarter 2022
+Total
+unweighted
+value
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Yes
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+2,328,504
+Partial or full write-down
+Permanent write-down
+55,650
+Stable deposits
+3
+1,509,558
+15,130,987
+Retail deposits and deposits form small business customers of which:
+2
+6,660,490
+Total
+weighted
+value
+Partial or full write-down
+Permanent write-down
+N/A
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Balance of adjusted off-balance sheet assets
+(4,084,283)
+(33,407)
+(20,193)
+Less: Adjusted effective notional deductions for written credit derivatives
+11 Total derivative exposures
+10
+37,702
+25,369
+Effective notional amount of written credit derivatives
+9
+(128)
+(58)
+Less: Exempted CCP leg of client-cleared trade exposures
+8
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+7
+91,940
+84,921
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+56
+84,898
+94,240
+34,436,056
+(17,138)
+34,418,918
+184,279
+181,005
+12
+2
+(4,727,721)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+6,328,760
+7,056,225
+Off-balance sheet exposure at gross notional amount
+17
+448,122
+598,596
+Total securities financing transaction exposures
+19
+16
+15
+40,027
+39,728
+CCR exposure for SFT assets
+14
+Less: Netted amounts of cash payables and cash receivables of gross
+SFT assets
+13
+408,095
+558,868
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+Agent transaction exposures
+38,669,175
+having decided that a write-
+down is necessary, without which
+Whichever occurs earlier: (i) CBIRC
+Mandatory
+No
+Mandatory
+mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+No
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Annual Report 2022
+301
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instrument
+Tier 2 capital bonds
+Tier 2 capital bonds
+Convertible or non-convertible
+=
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+No
+22 August 2032, in full amount
+10 November 2027, in full amount
+10 November 2032, in full amount
+redemption amount
+N/A
+N/A
+N/A
+N/A
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+No
+Including: Coupon rate and any related index
+Fixed
+Fixed
+Fixed
+3.02%
+3.32%
+3.00%
+3.34%
+Including: Existence of a dividend stopper
+No
+No
+Fixed
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+No
+Tier 2 capital bonds
+N/A
+KA
+N/A
+NA
+N/A
+convertible into
+Including: If convertible, specify issuer of instrument it
+MA
+N/A
+NA
+N/A
+N/A
+MA
+NA
+N/A
+converts into
+Write-down feature
+Yes
+Yes
+Including: If write-down, write-down trigger(s)
+Whichever occurs earlier: (i) CBIRC
+N/A
+NA
+Including: If convertible, specify instrument type
+conversion
+=
+No
+Including: If convertible, conversion trigger(s)
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+Tier 2 capital bonds
+No
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+N/A
+22 August 2027, in full amount
+38,689,986
+(20,811)
+4
+Tier 2 capital
+N/A
+22 December 2027, in full amount
+Yes
+22 December 2032
+Debt securities issued
+20 December 2022
+Dated
+RMB25,000
+RMB25,000
+Coupons/dividends
+Including: Subsequent call dates, if applicable
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent call dates
+and redemption amount
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Parent company/Group
+Tier 2 capital instrument
+Including: Eligible to the parent company/group level
+Instrument type
+Tier 2 capital
+Tier 2 capital
+Parent company/Group
+Tier 2 capital instrument
+RMB5,000
+RMB5,000
+Debt securities issued
+Non-cumulative
+Non-cumulative
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+Tier 2 capital
+No
+Including: Existence of a dividend stopper
+3.85%
+Fixed
+Fixed
+3.70%
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+N/A
+22 December 2032, in full amount
+22 December 2037
+Yes
+20 December 2022
+Dated
+No
+Annual Report 2022
+documents
+Governed by the Commercial Banking
+Law of the People's Republic of China,
+capital instruments and hybrid
+capital bonds; pari passu with other
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned feature
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Permanent write-down
+N/A
+Partial or full write-down
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-
+down is necessary, without which
+Yes
+N/A
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+The Bank
+232280008
+Tier 2 capital bonds
+Bond Issuance in China's Inter-bank
+Bond Market, as well as other applicable
+laws, regulations and normative
+documents
+the Regulation Governing Capital of
+Commercial Banks (Provisional) and the
+Measures for Administration of Financial
+Governed by the Commercial Banking
+Law of the People's Republic of China,
+The Bank
+232280007
+Tier 2 capital bonds
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Regulatory treatment
+Governing law(s) of the instrument
+the Regulation Governing Capital of
+Commercial Banks (Provisional) and the
+Measures for Administration of Financial
+Bond Issuance in China's Inter-bank
+Bond Market, as well as other applicable
+laws, regulations and normative
+Unique identifier
+Main features of regulatory capital instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+302
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+Issuer
+Less: Asset amounts deducted in determining Basel Ill tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+303
+(In RMB millions, unless otherwise stated)
+Other adjustments
+7
+Adjustment for off-balance sheet items
+Adjustment for securities financing transactions
+56
+Adjustments for derivative financial instruments
+4
+Adjustments for fiduciary assets
+Total consolidated assets as per published financial statements
+Consolidated adjustments for accounting purposes but outside
+3
+the scope of regulatory consolidation
+2
+1
+Item
+S/N
+(i) Correspondence between Regulatory Leverage Ratio Items and Accounting Items and their
+differences
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015).
+6. Disclosure of Leverage Ratio
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+ICBC
+304
+8
+Balance of adjusted on- and off-balance sheet assets
+31 December
+31 December
+3
+2
+On-balance sheet items (excluding derivatives and SFTs)
+1
+31 December
+2021
+2022
+Item
+S/N
+31 December
+(ii) Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets
+and Related Information
+N/A
+37,292,522
+(20,811)
+41,780,554
+2,244,477
+40,027
+104,865
+97,074
+39,728
+2,328,504
+(251,092)
+(273,598)
+2021
+35,171,383
+39,609,657
+2022
+(17,138)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+No
+Subordinated to depositor and general
+creditor; but senior to equity capital,
+additional tier 1 capital instruments and
+hybrid capital bonds; pari passu with
+other subordinated debts that have been
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+No
+Tier 2 capital bonds
+Tier 2 capital bonds
+Including: If write-down, write-down trigger(s)
+Write-down feature
+Including: If convertible, specify issuer of instrument it
+converts into
+convertible into
+Including: If convertible, specify instrument type
+conversion
+Including: If convertible, mandatory or optional
+Including: If convertible, conversion rate
+Including: If convertible, fully or partially
+Including: If convertible, conversion trigger(s)
+Main features of regulatory capital instrument
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+hybrid capital bonds; pari passu with
+other subordinated debts that have been
+issued by the Issuer and are pari passu
+with the present bonds; and pari passu
+with other tier 2 capital instruments that
+will possibly be issued in the future and
+are pari passu with the present bonds
+Subordinated to depositor and general
+creditor; but senior to equity capital,
+additional tier 1 capital instruments and
+N/A
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+issued by the Issuer and are pari passu
+with the present bonds; and pari passu
+with other tier 2 capital instruments that
+will possibly be issued in the future and
+are pari passu with the present bonds
+Including: If write-down, full or partial
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-down is
+necessary, without which the Issuer
+would become non-viable; or (ii) any
+relevant authority having decided that
+a public sector injection of capital or
+equivalent support is necessary, without
+which the Issuer would become non-
+viable
+Yes
+Partial or full write-down
+Permanent write-down
+viable
+a public sector injection of capital or
+equivalent support is necessary, without
+which the Issuer would become non-
+Whichever occurs earlier: (i) CBIRC
+having decided that a write-down is
+necessary, without which the Issuer
+would become non-viable; or (ii) any
+relevant authority having decided that
+Yes
+NP
+N/A
+N/A
+Partial or full write-down
+Permanent write-down
+Including: Optional call date, contingent call dates and
+Including: Subsequent call dates, if applicable
+10 November 2032
+Yes
+Loans to financial institutions secured by
+Level 1 HQLA
+18
+551
+Loans and securities:
+17
+for operational purposes
+1,160,260
+105,537
+4,626,668 3,589,345 18,251,096 18,991,605
+451,518
+66,803
+1,024
+33,176
+175,102
+Deposits held at other financial institutions
+10 November 2037
+Yes
+Total NSFR high-quality liquid assets (HQLA)
+15
+Required stable funding (RSF) item
+279
+27,424,812
+55
+Loans to financial institutions secured by
+324,602
+804,618
+579,290
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+21
+sovereigns, central banks and PSES, of
+which:
+customers, non-financial institutions,
+19
+3,049,467 10,480,034 11,646,149
+Loans to retail and small business
+20
+non-Level 1 HQLA and unsecured loans
+to financial institutions
+662,853
+287,449
+391,059
+1,199,164
+2,612,458
+Total ASF
+14
+723,143
+229,331
+501,415
+1,644 14,130,384
+4,910
+101,885
+8,197
+15,778
+8,170,565
+45,385
+8,517,939
+9,207,060 7,701,069
+8,864,675 519,213
+342,385 7,181,856
+37,455
+9,841 14,232,269
+20,688
+7,213,206 8,563,324
+528,307 4,298,835
+528,307 4,298,835
+Weighted
+value
+≥ 1 year
+7,175,751
+23,875
+4,079 4,707,961
+477,540
+723,143
+749,238
+69,338
+679,900
+71,649
+852,606
+7,418
+All other liabilities and equities not included
+in the above categories
+13
+NSFR derivative liabilities
+12
+71,649
+852,606
+7,418
+Other liabilities:
+11
+assets
+3,462,604
+225,252
+888,892
+Annual Report 2022
+307
+Unaudited Supplementary Information to the Consolidated Financial Statements
+16,209
+81,043*
+NSFR derivative liabilities with additional
+variation margin posted
+30
+62,200
+NSFR derivative assets
+29
+31
+funds of CCPS
+6,119
+7,199
+Assets posted as initial margin for derivative
+28
+10,729
+793,357
+130,711
+contracts and contributions to default
+All other assets not included in the above
+288,491
+448,318
+ICBC
+308
+The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+128.82%
+(*)
+Net Stable Funding Ratio (%)
+34
+21,289,731
+Total RSF
+33
+8,430,008 238,972
+Off-balance sheet items
+32
+categories
+760,300
+61,312
+30,814
+30,814
+year
+448,318
+Physical traded commodities, including gold
+months
+maturity
+Weighted
+< 6
+No
+to <1
+6 months
+year
+Unweighted value
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+23
+Residential mortgages, of which:
+22
+Item
+No.
+(In RMB millions, unless otherwise stated)
+31 December 2022
+≥ 1 year
+2,474
+445
+3,182
+27
+Other assets:
+26
+liabilities
+Assets with matching interdependent
+25
+1,030,244 1,130,658
+145,637
+361,054
+551
+Securities that are not in default and do
+not qualify as HQLA, including exchange-
+traded equities
+24
+10,857
+15,788
+434
+value
+5,485,142
+6,453,314
+301,113
+12,622
+to < 1
+16
+Other wholesale funding
+Unsecured wholesale funding, of which:
+5
+1,507,534
+15,075,337
+Less stable deposits
+4
+2,024
+16,495,064
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+5,569,319
+Operational deposits (excluding those generated from correspondent
+banking activities)
+3,427,024
+Additional requirements, of which:
+10
+9,077
+Secured funding
+9
+70,974
+6
+70,974
+8
+3,198,279
+6,959,050
+Non-operational deposits (all counterparties)
+7
+2,300,066
+9,465,040
+Unsecured debt
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+RMB30,000
+RMB10,000
+RMB50,000
+RMB10,000
+Accounting treatment
+Debt securities issued
+18 August 2022
+Dated
+22 August 2032
+Yes
+Debt securities issued
+18 August 2022
+Dated
+22 August 2037
+Debt securities issued
+Debt securities issued
+8 November 2022
+Dated
+8 November 2022
+Dated
+Yes
+Issuer call (subject to prior supervisory approval)
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+RMB10,000
+Amount recognised in regulatory capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+10 Liabilities with matching interdependent
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+RMB30,000
+RMB10,000
+RMB50,000
+1,416,587
+11
+Tier 2 capital
+1,243,785
+Item
+No.
+No
+6 months
+31 December 2022
+Unweighted value
+The Group discloses net stable funding ratio information in accordance with Measures for the Disclosure of Information on
+Net Stable Funding Ratio by Commercial Banks (Yin Bao Jian Fa [2019] No. 11).
+Quantitative Information Disclosure of Net Stable Funding Ratio (NSFR) Using
+Advanced Capital Management Approach
+maturity
+8.
+ICBC
+306
+118.27%
+Data of the above table are the simple arithmetic average of the 92 calendar days' figures of the recent quarter.
+Liquidity coverage ratio (%)
+5,638,048
+6,660,490
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+< 6
+months
+Available stable funding (ASF) item
+Capital:
+Outflows related to derivative exposures and other collateral requirements
+Operational deposits
+9
+8
+569∞ ∞ 2
+7 Wholesale funding:
+Less stable deposits
+Stable deposits
+business customers:
+Retail deposits and deposits from small
+Other capital instruments
+Regulatory capital
+4
+3
+3,770,528
+2
+3,770,528
+23
+Total net cash outflows
+1
+Total HQLA
+106,549
+8,694,935
+Total cash outflows
+16
+5,775,330
+Other contingent funding obligations
+15
+83,877
+Cash inflows
+Other contractual funding obligations
+172,802
+2,183,239
+Credit and liquidity facilities
+13
+Outflows related to loss of funding on debt products
+22
+1,243,785
+14
+17
+83,845
+20
+Total Adjusted
+3,056,887
+3,967,971
+Total cash inflows
+21
+1,224,325
+1,226,288
+Secured lending (including reverse repos and securities borrowing)
+Other cash inflows
+19
+1,241,478
+1,889,237
+Inflows from fully performing exposures
+18
+591,084
+852,446
+Value
+Email: info@us.icbc.com.cn
+Fax: +1-2122193211
+Tel: +1-2122388208
+SWIFT: ICBKCAT2
+Address: 1185 Avenue of the
+Industrial and Commercial Bank
+of China (USA) NA
+SWIFT: ICBKUS33
+Fax: +1-2125752517
+Americas, 16th Floor, New
+York, NY 10036
+SWIFT: ICBKUS3N
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario, M5H
+2R2, Canada
+Floor, New York, NY,
+10019, USA
+Email: info@icbkfs.com
+Tel: +1-2129937300
+Fax: +1-2129937349
+SWIFT: ICBKUS3F
+Industrial and Commercial Bank
+of China (Canada)
+Email: info@icbk.ca
+Tel: +1-4163665588
+Tel: +1-2128387799
+Fax: +1-4166072000
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway, 28th
+Email: info-nyb@us.icbc.com.cn
+6 months
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+< 6
+months
+Industrial and Commercial Bank
+of China Mexico S.A.
+maturity
+to <1
+year
+No. Item
+No
+Unweighted value
+30 September 2022
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+Email: service@ch.icbc.com.cn
+Tel: +41-58-9095588
+Fax: +41-58-9095577
+SWIFT: ICBKCHZZ
+ICBC Austria Bank GmbH
+Address: Kolingasse 4, 1090
+Vienna, Austria
+Email: generaldept@at.icbc.com.cn
+Tel: +43-1-9395588
+Fax: +43-1-9395588-6800
+SWIFT: ICBKATWW
+Americas
+Address: 725 Fifth Avenue, 20th
+Floor, New York, NY
+10022, USA
+Address: Paseo de la Reforma
+250, Piso 18, Col.
+Juarez, C.P.06600, Del.
+Cuauhtemoc, Ciudad de
+Mexico
+ICBC
+Tel: +52-5541253388
+сп
+Tel: +507-3205901
+SWIFT: ICBKPAPA
+Africa
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Address 1: 47 Price Drive,
+Constantia, Cape Town,
+South Africa, 7806
+Address 2: T11, 2nd Floor East, 30
+Baker Street, Rosebank,
+Johannesburg,
+Gauteng, South Africa,
+2196
+Panama City, Republic of Panama
+Email: panama.branch@pa.icbc.com.
+Email: icbcafrica@afr.icbc.com.cn
+Tel: +27-608845323
+L
+ICBC
+郵編:100140
+Post Code: 100140
+中國北京市西城區復興門內大街55號
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+www.icbc.com.cn, www.icbc-ltd.com
+year
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+Industrial and Commercial Bank
+of China Limited, Beijing, Zurich
+Branch
+316
+Address: MMG Tower | 20th Floor
+| Ave. Paseo del Mar |
+Costa del Este
+Bank of China Limited, Panama
+Branch
+Industrial and Commercial
+SWIFT: ICBKMXMM
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Address: Av. Brigadeiro Faria
+Lima, 3477-Block B-6
+andar-SAO PAULO/
+SP-Brasil
+Email: bxgw@br.icbc.com.cn
+Tel: +55-1123956600
+SWIFT: ICBKBRSP
+ICBC PERU BANK
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+Email: consultas@pe.icbc.com.cn
+Tel: +51-16316800
+Fax: +51-16316802
+SWIFT: ICBKPEPL
+Industrial and Commercial Bank
+of China (Argentina) S.A.U.
+Address: Blvd. Cecilia Grierson
+355, (C1107 CPG) Buenos
+Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+ICBC Investments Argentina
+S.A.U. Sociedad Gerente de
+Fondos Comunes de Inversión
+Address: Blvd. Cecilia Grierson 355,
+Piso 14, (C1107CPG)
+CABA, Argentina
+Email: alpha.sales@icbc.com.ar
+Tel: +54-1143949432
+Inversora Diagonal S.A.U.
+Address: Florida 99, (C1105CPG)
+CABA, Argentina
+Tel: +54-1148202200
+Email: info@icbc.com.mx
+≥ 1 Weighted
+value
+SWIFT: ICBKLULU
+1
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Postcode: 200120
+Tel: 021-5879-2288
+Fax: 021-5879-2299
+ICBC Financial Asset Investment
+Co., Ltd.
+Second Street, Economic
+Development Zone,
+Tianjin, China
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Road, Nanjing City,,
+Jiangsu Province, China
+Postcode: 211800
+Tel: 025-58172219
+ICBC Wealth Management Co.,
+Ltd.
+Address: No. 6 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 100032
+Area, No. 211 Pubin
+ICBC Financial Leasing Co., Ltd.
+Address: Taida MSD-B1, No. 62
+Tel: 010-66583349
+Fax: 010-66583158
+Postcode: 100033
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+Postcode: 850000
+Tel: 0891-6898002
+Fax: 0891-6898001
+YUNNAN BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 650021
+Tel: 0871-65536313
+Fax: 0871-63134637
+ZHEJIANG BRANCH
+Address: No. 66 Juyuan Road,
+Shangcheng District,
+Hangzhou City, Zhejiang
+Province, China
+Postcode: 310016
+Tel: 0571-87803888
+Fax: 0571-87808207
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Tel: 010-86509184
+TIBET BRANCH
+Fax: 010-86509901
+Address: No.8 Xianshan Road,
+Tel: +852-25881188
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong SAR, China
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Email: icbchk@icbcasia.com
+Fax: +852-28051166
+ICBC International Holdings
+Limited
+Address: 37/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong SAR, China
+Email: info@icbci.com.hk
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICILHKH1
+Industrial and Commercial Bank
+of China (Macau) Limited
+SWIFT: UBHKHKHH
+Garden Road, Central,
+Hong Kong SAR, China
+Address: 33/F, ICBC Tower, 3
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Biquan Street, Bishan
+District, Chongqing,
+China
+Postcode: 402760
+Tel: 023-85297704
+Fax: 023-85297709
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No.258 Chengnan West
+Road, Pinghu City,
+Zhejiang Province, China
+Postcode: 314200
+Tel: 0573-85139616
+Fax: 0573-85139626
+312
+ICBC
+List of Domestic and Overseas Branches and Offices
+Overseas Institutions
+Hong Kong SAR and Macau
+SAR
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Address: 18th Floor, ICBC Tower,
+Fax: 0991-2828608
+Postcode: 830002
+Tel: +31-205706666
+Email: icbcamsterdam@nl.icbc.com.cn
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam, the
+Netherlands
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+SWIFT: ICBKFRPP
+Fax: +33-140065899
+Tel: +33-140065858
+Address: Nüschelerstrasse 1,
+Email: administration@fr.icbc.com.cn
+QINGHAI BRANCH
+Address: No. 2 Shengli Road,
+Xining City, Qinghai
+Province, China
+Postcode: 810001
+Tel: 0971-6169722/6152326
+Fax: 0971-6152326
+SHANDONG BRANCH
+Address: No. 310 Jingsi Road,
+Jinan City, Shandong
+Province, China
+Address: 73 Boulevard Haussmann,
+75008, Paris, France
+Fax: +31-205706603
+SWIFT: ICBKNL2A
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Address: 81, Avenue Louise, 1050
+Brussels, Belgium
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Address: 81 King William Street,
+London EC4N 7BG, UK
+ICBC (London) PLC
+Email: GAD@gr.icbc.com.cn
+Tel: +30-2166868888
+Fax: +30-2166868889
+Address: Amerikis 13, Athens 106
+72 Greece
+Industrial and Commercial Bank
+of China (Europe) S.A. Greece
+Representative Office
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+SWIFT: ICBKPLPW
+Address: Plac Trzech Krzyży 18,
+00-499, Warszawa,
+Poland
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+Fax: +34-912168866
+SWIFT: ICBKESMM
+Address: Paseo de Recoletos, 12,
+28001, Madrid, España
+Email: gad.dpt@es.icbc.com.cn
+Tel: +34-912168837
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Email: banking@it.icbc.com.cn
+Tel: +39-0200668899
+Address: Via Tommaso Grossi 2,
+20121, Milano, Italy
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Email: info@be.icbc.com.cn
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Postcode: 250001
+Tel: 0991-5981888
+Tel: 0531-66681114
+SHANXI BRANCH
+SICHUAN BRANCH
+Address: No. 45 Zongfu Road,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Postcode: 610020
+Tel: 028-82866000
+Fax: 028-82866025
+TIANJIN BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Postcode: 300074
+Tel: 022-28400648
+Fax: 0755-82246247
+Fax: 022-28400123/022-28400647
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Postcode: 361012
+Tel: 0592-5292000
+Fax: 0592-5054663
+XINJIANG BRANCH
+Address: No. 231 Renmin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+XIAMEN BRANCH
+Tel: 0755-82246400
+Postcode: 518015
+Shennan East Road,
+Luohu District, Shenzhen
+City, Guangdong
+Province, China
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Postcode: 030001
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHAANXI BRANCH
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Postcode: 710004
+Tel: 029-87602608/87602630
+Fax: 029-87602999
+SHANGHAI BRANCH
+Address: No. 8 Yincheng Road,
+Pudong New District,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58885888/68088888
+Fax: 021-58882888
+SHENZHEN BRANCH
+Address: North Block Financial
+Center, No. 5055
+Fax: 0531-87941749/66681200
+Macau Landmark, 555
+Avenida da Amizade,
+Macau SAR, China
+Email: icbc@mc.icbc.com.cn
+Tel: +853-28555222
+Address: Level 20, Burj Doha, Al
+Corniche Street, West
+Bay, Doha, Qatar P.O.
+BOX: 11217
+Email: icbcdoha@doh.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: Level 4&8, A1 Faisaliah
+Tower Building
+No:7277-King Fahad
+Road Al Olaya, Zip Code:
+12212, Additional No.:
+3333, Unit No.:95,
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Kingdom of Saudi Arabia
+Tel: +966-112899800
+Fax: +966-112899879
+SWIFT: ICBKSARI
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Address: Building 2A(Al-Tijaria
+Tower), Floor 7&8,
+Al-Soor Street,
+Al-Morqab, Block3,
+Kuwait City, Kuwait
+Email: info@kw.icbc.com.cn
+Tel: +965-22281777
+Email: service@sa.icbc.com.cn
+SWIFT: ICBKAEAA
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-24998600
+Fax: +971-24998622
+5207, 5208 and 5209, Al
+Reem Island, Abu Dhabi,
+United Arab Emirates P.O.
+Box 62108
+SWIFT: ICBKKZKX
+Industrial and Commercial Bank
+of China Limited, Karachi Branch
+Address: 15th & 16th Floor, Ocean
+Tower, G-3, Block-9,
+Scheme # 5, Main Clifton
+Road, Karachi, Pakistan.
+P.C:75600
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Industrial and Commercial
+Bank of China Limited, Mumbai
+Branch
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+International Financial
+Center, Dubai, United Arab
+Emirates P.O. Box: 506856
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Address: Addax Tower Offices
+Fax: +965-22281799
+Tel: +7-7272377085
+SWIFT: ICBKKWKW
+Address: Level 42, Tower 1,
+International Towers,
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+SWIFT: ICBKDEFF
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-2686 66 6000
+Fax: +49-6950604708
+SWIFT: ICBKLULL
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-2686 66 6000
+Industrial and Commercial Bank
+Tel: +49-6950604700
+Email: icbc@icbc-ffm.de
+Address: Bockenheimer Landstraße
+39, 60325 Frankfurt am
+Main, Germany
+Email: info@icbc.com.au
+Tel: +612-94755588
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay
+Street, Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ2A
+ICBC
+314
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Auckland
+Branch
+Address: Level 11, 188 Quay
+Street, Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ22
+Europe
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+Email: office@kz.icbc.com.cn
+Kazakhstan. 050046
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Tel: +976-77108822,
++976-77106677
+Fax: +976-77108866
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+PT. Bank ICBC Indonesia
+Address: The City Tower 32nd Floor,
+JI. M.H. Thamrin No. 81,
+Jakarta Pusat 10310,
+Indonesia
+cn
+Email: cs@ina.icbc.com.cn
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Kuala Lumpur City
+Centre, 50088 Kuala
+Lumpur, Malaysia
+Available stable funding (ASF) item
+cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Industrial and Commercial Bank
+of China Limited, Manila Branch
+Address: 24F, The Curve, 32nd
+Tel: +62-2123556000
+Email: mgdbcgw@dccsh.icbc.com.
+Shangri-la Office,
+Shangri-la Centre,
+19A Olympic Street,
+Sukhbaatar District-1,
+Ulaanbaatar, Mongolia
+Address: Suite 1108, 11th floor,
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Industrial and Commercial Bank
+of China Limited, Macau Branch
+Address: Alm. Dr. Carlos
+d'Assumpcao,
+No.393-437, 9 Andar,
+Edf. Dynasty Plaza, Macau
+SAR, China
+Email: icbc@mc.icbc.com.cn
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMM
+Asia-Pacific
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 5-1 Marunouchi
+1-Chome, Chiyoda-ku
+Tokyo, 100-6512, Japan
+Email: icbctokyo@tk.icbc.com.cn
+Tel: +813-52232088
+Fax: +813-52198525
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+# 640 Jungang -daero,
+Busanjin-gu, Busan
+47353, Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Street Corner, 3rd Ave,
+BGC, Taguig City, Manila
+1634, Philippines
+Email: info@ph.icbc.com.cn
+Tel: +63-282803300
+Fax: +63-284032023
+SWIFT: ICBKPHMM
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Email: icbcvte@la.icbc.com.cn
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Address: 17th Floor, Exchange
+Square, No. 19-20,
+Street 106, Phnom Penh,
+Cambodia
+Email: icbckh@kh.icbc.com.cn
+Tel: +855-23955880
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Industrial and Commercial
+Bank of China Limited, Yangon
+Branch
+Address: ICBC Center, Crystal
+Tower, Kyun Taw Road,
+Kamayut Township,
+Yangon, Myanmar
+Tel: +95-019339258
+Fax: +95-019339278
+SWIFT: ICBKMMMY
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Chanthabouly District,
+Vientiane Capital, Lao
+PDR
+Industrial and Commercial
+No.358, Unit12,
+Sibounheuang Village,
+of China Limited, Vientiane
+Branch
+Address: 622 Emporium Tower
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton,
+Khlong Toei, Bangkok,
+Thailand
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Email: hanoiadmin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Annual Report 2022
+313
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+building, 33 Le Duan
+Street, District 1, Ho Chi
+Minh City, Vietnam
+Email: hcmadmin@vn.icbc.com.cn
+Tel: +84-28-35208991
+Industrial and Commercial Bank
+Address: Asean Road, Home
+Bank of China Limited, London
+Branch
+Email: icbcmalaysia@my.icbc.com.
+Email: admin@icbclondon.com
+Residential mortgages, of which:
+23
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+30 September 2022
+Unweighted value
+6 months
+No
+22
+< 6
+≥ 1
+Weighted
+maturity
+months
+2,775
+477
+year
+3,159
+441
+year
+to < 1
+Item
+No.
+(In RMB millions, unless otherwise stated)
+-
+1,276,200
+450,809
+247,989
+664,823
+20
+Loans to financial institutions secured by
+non-Level 1 HQLA and unsecured loans
+to financial institutions
+Loans to retail and small business
+customers, non-financial institutions,
+sovereigns, central banks and PSES, of
+which:
+2,602,441 3,054,870 10,201,415 11,400,356
+21
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+540,183
+763,065
+325,428
+849,077
+Annual Report 2022
+309
+Unaudited Supplementary Information to the Consolidated Financial Statements
+value
+Address: 81 King William Street,
+London EC4N 7BG, UK
+6,485,998
+16,242
+Assets posted as initial margin for derivative
+35,600
+30,260
+contracts and contributions to default
+funds of CCPS
+29
+NSFR derivative assets
+131,973
+28
+30
+155,175*
+31,035
+variation margin posted
+31
+All other assets not included in the above
+293,870 492,999
+31,710
+NSFR derivative liabilities with additional
+39,975
+879,285
+31,710 239,967
+11,182
+24
+Securities that are not in default and do
+not qualify as HQLA, including exchange-
+traded equities
+615
+339,567
+123,934
+1,008,729
+1,090,681
+25
+Assets with matching interdependent
+liabilities
+26
+Other assets:
+27
+Physical traded commodities, including gold
+340,899
+47,029
+492,999
+5,512,982
+19
+47
+3,632,772 17,944,178 18,771,497
+102,655
+17,085
+7,644
+100,027
+Less stable deposits
+6,784,970
+8,442,445
+27,150
+40,202
+2,638 13,731,747
+Operational deposits
+Other wholesale funding
+10 Liabilities with matching interdependent
+assets
+Other liabilities:
+9,252,232
+8,184,297
+Wholesale funding:
+39,959
+Stable deposits
+569∞ ∞ =
+Capital:
+3,680,528
+2
+3
+Regulatory capital
+3,680,528
+438,479 4,119,007
+438,479 4,119,007
+Other capital instruments
+4
+Retail deposits and deposits from small
+6,824,929 8,482,647
+44,235
+10,282 13,831,774
+business customers:
+7
+8
+9
+394,603
+203,822 8,431,710
+8,892,911
+584,054
+Required stable funding (RSF) item
+15
+Total NSFR high-quality liquid assets (HQLA)
+16
+Deposits held at other financial institutions
+195,577
+69,618
+274
+1,004
+1,084,851
+133,985
+for operational purposes
+17
+Loans and securities:
+615
+18
+Loans to financial institutions secured by
+Level 1 HQLA
+4,911,316
+690,333
+26,982,881
+72,394
+Total ASF
+600,390
+25,229
+359,321 7,600,243
+369,374
+5,031
+198,791
+4,756,128
+3,675,582
+11
+8,275 1,053,973
+32,512
+12
+NSFR derivative liabilities
+13
+All other liabilities and equities not included
+in the above categories
+8,275 1,053,973
+32,512
+708,929
+133,071
+575,858
+600,390
+14
+778,015
+CH-8001, Zurich,
+Switzerland
+32
+Postcode: 266071
+Tel: 0532-66211001
+Fax: 0532-85814711
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+QINGDAO BRANCH
+Fax: 0951-5890917
+Tel: 0951-5029739
+Postcode: 750002
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region,
+China
+SWIFT: ICBKCZPP
+NINGXIA BRANCH
+Address: No. 67 Zhonghai
+311
+Annual Report 2022
+Fax: 0574-87361190
+Tel: 0574-87361162
+Postcode: 315010
+West Road, Ningbo City,
+Zhejiang Province, China
+Address: No. 218 Zhongshan
+List of Domestic and Overseas Branches and Offices
+Fax: +420-237762899
+Tel: +420-237762888
+Email: info@cz.icbc.com.cn
+Email: londonmarketing@
+icbcstandard.com
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Bank ICBC (joint stock company)
+Address: Building 29,
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+ICBC Turkey Bank Anonim
+Şirketi
+Address: Maslak Mah. Dereboyu,
+2 Caddesi No:13 34398
+Sariyer, ISTANBUL
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+Annual Report 2022
+315
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Address: 12F City Empiria, Na Strži
+1702/65, 14000 Prague 4
+- Nusle, Czech Republic
+NINGBO BRANCH
+London, United Kingdom,
+EC2V 7JE
+Fax: 0471-6940048
+Postcode: 010060
+Tel: 0431-89569718/89569007
+Fax: 0431-88923808
+Postcode: 130022
+Avenue, Changchun City,
+Jilin Province, China
+Address: No. 9559 Renmin
+JILIN BRANCH
+Fax: 0731-84430039
+Tel: 0731-84428833/84420000
+JIANGSU BRANCH
+Postcode: 410011
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+HUNAN BRANCH
+Fax: 027-69908040
+Tel: 027-69908676/69908658
+Wuchang District, Wuhan
+City, Hubei Province,
+China
+Address: No. 31 Zhongbei Road,
+categories
+City, Hunan Province,
+China
+Address: No. 408 Zhongshan
+South Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 210006
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region,
+China
+Address: No. 10 Silk Road Avenue,
+INNER MONGOLIA BRANCH
+Fax: 024-23491609
+Tel: 024-23491600
+Postcode: 110001
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+LIAONING BRANCH
+Fax: 0791-86695230
+Tel: 0791-86695682/86695018
+Postcode: 330008
+Jiangxi Province, China
+District, Nanchang City,
+Address: No. 888, Fenghe Middle
+Avenue, Honggutan
+JIANGXI BRANCH
+Fax: 025-52858111
+Tel: 025-52858000
+Tel: 0471-6940833/6940297
+Address: 20 Gresham Street,
+Postcode: 430071
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+Fuxingmen South Street,
+Xicheng District, Beijing,
+China
+8,400,045
+Tel: 010-66410579
+Fax: 010-66410579
+CHONGQING BRANCH
+Address: No. 61 Taichang
+Road, Nan'an District,
+Chongqing, China
+Postcode: 400061
+Tel: 023-62918002
+Fax: 023-62918059
+DALIAN BRANCH
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+Postcode: 116001
+Tel: 0411-82378888
+Fax: 0411-82808377
+FUJIAN BRANCH
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+Mansion, No. 2
+Postcode: 350005
+Address: Tower B, Tianyin
+Fax: 0551-62868077
+Off-balance sheet items
+ICBC Standard Bank PLC
+33
+Total RSF
+34
+Net Stable Funding Ratio (%)
+244,112
+21,113,730
+127.80%
+(*)
+The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+310
+ICBC
+List of Domestic and Overseas Branches and Offices
+Domestic Institutions
+ANHUI BRANCH
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui
+Province, China
+Postcode: 230001
+Tel: 0551-62869178/62868101
+BEIJING BRANCH
+Tel: 0591-88087819/88087000
+Postcode: 100031
+GANSU BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Postcode: 570203
+Tel: 0898-65303138/65342829
+Fax: 0898-65342986
+HEBEI BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Postcode: 050051
+Tel: 0311-66000001/66001999
+Fax: 0311-66000002
+HENAN BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Postcode: 450011
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+HEILONGJIANG BRANCH
+Address: No. 218 Zhongyang
+Street, Daoli District,
+Harbin City, Heilongjiang
+Province, China
+Fax: 0591-83353905/83347074
+Tel: 0451-84668139/84668577
+Fax: 0451-84698115
+HUBEI BRANCH
+HAINAN BRANCH
+Tel: 0851-88620584/88620018
+Fax: 0851-85963911
+Postcode: 150010
+Postcode: 550001
+Postcode: 730030
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Fax: 0931-8435166
+GUANGDONG BRANCH
+Address: No. 123 Yanjiang West
+Road, Guangzhou City,
+Guangdong Province,
+China
+Postcode: 510120
+Tel: 020-81308130
+Tel: 0931-8436609
+GUANGXI BRANCH
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Zhuang Autonomous
+Region, China
+Postcode: 530022
+Tel: 0771-5316617
+Fax: 0771-5316617/2806043
+GUIZHOU BRANCH
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+Fax: 020-81308789
+0.6
+5,057
+0.7
+6,049
+Other
+46 Financial Market Business
+12.9
+Treasury operations
+12.0
+100,374
+40.2
+346,172
+41.1
+Profit before taxation
+111,278
+422,565
+33.1
+424,899
+20.1
+85,326
+12.5
+52,740
+Treasury operations
+46.0
+195,658
+46.9
+198,355
+Personal banking
+47 FinTech
+50 Internet Finance
+140,569
+39.2
+165,771
+Corporate banking
+100.0
+100.0
+346,103
+As at the end of 2022, shareholders' equity totaled RMB3,513,826 million, RMB238,568 million or 7.3% higher than
+that at the end of the previous year. Equity attributable to equity holders of the parent company recorded an increase of
+RMB237,416 million or 7.3% to RMB3,495,171 million. Please refer to the "Consolidated Statement of Changes in Equity"
+for details.
+46.3
+SUMMARY OPERATING SEGMENT INFORMATION
+36 Corporate Banking
+BUSINESS OVERVIEW
+Discussion and Analysis
+35
+Annual Report 2022
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable
+to equity holders of the parent company for the year ended 31 December 2022 and equity attributable to equity holders of
+the parent company as at the end of the reporting period have no differences.
+In RMB millions, except for percentages
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and Those under IFRSS
+Net cash outflows from investing activities amounted to RMB910,621 million. Specifically, cash inflows were RMB3,531,388
+million, representing an increase of RMB812,469 million over last year, mainly due to the increased cash proceeds from the
+sale and redemption of financial investments; and cash outflows were RMB4,442,009 million, representing an increase of
+RMB1,048,534 million, mainly due to the increase in cash payment for financial investments.
+Net cash inflows from operating activities amounted to RMB1,404,657 million, representing an increase of RMB1,043,775
+million as compared to last year, principally due to the increase of net increase of due to customers. Specifically, cash
+outflows of operating assets increased by RMB1,076,641 million; and cash inflows of operating liabilities increased by
+RMB2,130,320 million.
+Analysis on Statement of Cash Flows
+The off-balance sheet items of the Bank mainly include derivative financial instruments, contingencies and commitments.
+For details on the nominal amount and fair value of derivatives financial instruments, please refer to "Note 21. to the
+Consolidated Financial Statements: Derivative Financial Instruments". For details on contingencies and commitments, please
+refer to "Note 47. to the Consolidated Financial Statements: Commitments and Contingent Liabilities".
+Off-balance Sheet Items
+Other
+Shareholders' Equity
+Net cash outflows from financing activities amounted to RMB64,789 million. Specifically, cash inflows were RMB955,862
+million, representing a decrease of RMB19,372 million over last year, mainly because no new preference shares, perpetual
+bonds or other equity instruments were issued in the year; and cash outflows were RMB1,020,651 million, representing an
+increase of RMB33,864 million, mainly due to the increased cash payment for repayment of debt securities.
+Personal banking
+2022
+42 Personal Banking
+398,373
+46.2
+388,915
+Corporate banking
+45 Asset Management Services
+100.0
+860,880
+2021
+100.0
+Operating income
+Percentage
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+841,441
+5,699
+80,762.56
+3,346
+Science, education, culture
+and sanitation
+2.9%
+Construction
+4.2%
+Wholesale and retail
+54,897.00
+57,983.53
+2.7%
+65,948.98
+Real estate
+electricity, heating, gas and water
+9.6%
+Production and supply of
+utility management
+74,551.60
+12.0%
+5.8%
+Water, environment and public
+2022
+2020
+Distribution of loans by business line
+Repurchase agreements amounted to RMB574,778 million, RMB208,835 million or 57.1% higher than that at the end of
+the previous year, principally because the Bank moderately borrowed funds based on management needs.
+ICBC
+38
+The Bank further developed digital inclusive services
+and continued to refine the three major digital
+inclusive product systems, namely, Online Revolving
+Loan, Quick Lending for Operation and Digital Supply
+Chain. In terms of Online Revolving Loan, the Bank
+launched e-Mortgage Quick Loan, an innovative
+online mortgage service that enables whole-process
+online handling of mortgage services. It enriched
+the online assessment function for e-Enterprise
+Quick Loan based on nonstandard collateral such as
+factory buildings and commercial buildings. In terms
+Driven by innovation and transformation, the Bank
+further developed the "digital inclusive" model, improved
+the product system, and innovated the service model.
+It continuously improved the comprehensive services
+of inclusive finance to promote the sustainable and
+high-quality development of the inclusive finance sector.
+The Bank was rated the best in the regulatory evaluation of
+financial services of commercial banks for small and micro
+enterprises conducted by CBIRC for two consecutive years.
+At the end of 2022, inclusive small and micro enterprise
+loans amounted to RMB1,550,316 million, representing
+an increase of RMB451,304 million or 41.1% over the
+beginning of the year. Inclusive small and micro enterprise
+loan customers numbered 1,016 thousand, representing
+an increase of 221 thousand. The average interest rate of
+inclusive small and micro enterprise loans granted in 2022
+was 3.84%. The balance of agriculture-related loans stood
+at RMB3,300,196 million, representing an increase of
+RMB648,976 million or 24.5%. The average interest rate
+of agriculture-related loans granted in 2022 was 3.86%,
+down 27 basis points from the previous year. The Bank
+had 355 small and micro financial business centers.
+Inclusive Finance
+2021
+The Bank actively integrated into the regional
+coordinated development strategy. It stepped
+up financial support focusing on coordinated
+development of the Beijing-Tianjin-Hebei region,
+integrated development of the Yangtze River
+Delta, Guangdong-Hong Kong-Macao Greater
+Bay Area, the rise of Central China, and the
+Chengdu-Chongqing economic circle. At the end
+of 2022, the balance of RMB corporate loans in
+key regions reached RMB8.81 trillion, accounting
+for 71.7% of the balance of RMB corporate loans
+of domestic branches, representing an increase of
+RMB1.27 trillion over the end of the previous year.
+The Bank provided comprehensive financial services
+for private enterprises. It cooperated with the
+All-China Federation of Industry and Commerce to
+jointly carry out the campaign of sci-tech innovation
+in financial services for private enterprises, to help
+private enterprises accelerate sci-tech innovation.
+At the end of 2022, the balance of loans to private
+enterprises reached RMB3.77 trillion.
++
++
+4
+5.3%
+1.8%
+Mining
+Other
+The Bank drove green development with green
+finance. It actively supported green and low-carbon
+transformation, especially the financial needs of
+green industries such as clean energy and green
+transportation. It took full advantage of structural
+monetary policy tools such as carbon emission
+reduction support tools and the clean and efficient
+use of coal. At the end of 2022, the balance of
+green loans (under the CBIRC's criteria) amounted
+to RMB3,978,458 million. The Bank, as the lead
+underwriter, underwrote RMB56,338 million green
+bonds in China in the year.
+75,331.10
+15.1%
+Leasing and commercial services
+New breakthroughs have been achieved in customer
+base. The Bank deeply conducted the "Net Making
+and Patching" program, expanded the customer
+base, improved customer quality, activated customer
+transactions, and enhanced customer expansion and
+maintenance capability. While focusing on marketing
+to four types of high-quality customers, i.e.,
+central enterprises, local state-owned enterprises,
+multinational enterprises and listed companies, the
+Bank vigorously expanded medium-sized enterprise
+customer groups. At the end of 2022, the number
+of corporate customers increased by 1,002 thousand
+over the end of the previous year to 10,693
+thousand, maintaining a leading position among
+peers by total number and growth of corporate
+customers.
++
+4
+Discussion and Analysis
+ICBC
+36
+Insisting on making efforts early on and making targeted and appropriate
+efforts, the Bank deepened the corporate credit layout of new
+manufacturing, new services, new basic industries and high-tech customer
+groups, and constantly improved the adaptability and competitiveness
+of services for the real economy. The Bank increased the counter- and
+cross-cyclical credit supply, and carried out a series of activities to help
+stabilize the macro-economy. It was the first in the industry to launch
+the campaign of "financing 10,000 enterprises to help stabilize the
+macro-economy", and held the cloud signing activity of "trillion financing
+for 100 big projects to promote investment and stabilize economic
+growth". The Bank strengthened the innovation of corporate digital
+product system, upgraded the digital industrial finance platforms such
+as ICBC Finance Pool and ICBC Chain, built the "government service +
+finance" and "industry + finance" ecosystem, and effectively empowered
+the digital government building and corporate digital transformation.
+At the end of 2022, corporate loans reached RMB13,826,966 million,
+representing an increase of RMB1,632,260 million or 13.4% since the
+end of last year. Corporate deposits stood at RMB14,671,154 million,
+representing an increase of RMB1,339,691 million or 10.0%.
+The Bank served the high-quality development of
+the manufacturing. It carried out the campaign of
+"Financial Service Quality Enhancement Program
+for Manufacturing", and launched innovative
+measures such as "professional layout, special list,
+specific assessment and dedicated resources". At
+Corporate Banking
+60 Diversified Operation and
+Subsidiary Management
+56 Internationalized Operation
+Management, Employees
+and Institutions
+54 Human Resources
+Note: Please see "Note 49. to the Consolidated Financial Statements: Segment
+Information" for details.
+53 Outlet Building and Service
+Improvement
+0.8
+63 Major Controlled Subsidiaries
+and Equity Participating
+Company
+the end of 2022, loans to manufacturing exceeded
+RMB3 trillion, ranking first among peers in terms
+of both the balance and increment of loans to
+manufacturing, medium to long-term loans to
+manufacturing and credit loans to manufacturing.
+self-
+The Bank supported self-reliance and
+enhancement in advanced science and technology.
+The Bank carried out the campaign of "Chunmiao
+Action" targeting high and new technology
+enterprises, enterprises featuring "Specialization,
+Refinement, Differentiation and Innovation"
+and other key customer groups, and launched
+the campaign of "Financial Service for National
+High-tech Industrial Development Zones and
+High-tech Enterprises" in conjunction with the Torch
+High Technology Industry Development Center of
+the Ministry of Science and Technology. At the end
+of 2022, the balance of loans to enterprises in the
+high-tech fields supported by the state and that
+of loans to strategic emerging industries reached
+RMB1.23 trillion and RMB1.75 trillion respectively.
+15.5%
+Manufacturing
+postal services
+25.1%
+Transportation, storage and
+deposits
+Demand
+Time
+deposits
+Unit: RMB100 millions
+Corporate deposits
+by industry of loan customers
+Corporate loans of domestic branches
+Discussion and Analysis
+37
+Annual Report 2022
+Offshore wind power project in Jiazi Town, Shanwei City, Guangdong Province
+中国广核 72
+1.4
+Repurchase Agreements
+6,249,754
+ICBC
+2,921,029
+8.8
+3,185,564
+Due to banks and other financial institutions
+82.9
+26,441,774
+82.8
+29,870,491
+Due to customers
+(%)
+Amount
+(%)
+9.2
+Amount
+Percentage
+Percentage
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2022
+4.3%
+Other
+4.3%
+2.5%
+Debt securities issued
+2.5%
+1.1%
+Item
+Repurchase agreements
+Repurchase agreements
+1.6
+49.1%
+2021
+2022
+O
+Distribution of due to customers by business line
+Discussion and Analysis
+33
+Annual Report 2022
+Due to customers is the Bank's main source of funds. As at the end of 2022, due to customers was RMB29,870,491 million,
+RMB3,428,717 million or 13.0% higher than that at the end of the previous year. In terms of customer structure, corporate
+deposits increased by RMB1,339,691 million or 10.0%; and personal deposits increased by RMB2,047,338 million or
+16.4%. In terms of maturity structure, time deposits increased by RMB2,243,078 million or 17.4%, while demand deposits
+increased by RMB1,143,951 million or 8.9%. In terms of currency structure, RMB deposits stood at RMB28,153,014 million,
+an increase of RMB3,238,490 million or 13.0%. Foreign currency deposits were equivalent to RMB1,717,477 million, an
+increase of RMB190,227 million or 12.5%.
+Due to Customers
+100.0
+31,896,125
+574,778
+100.0
+1,376,004
+4.3
+1,559,045
+36,095,831
+Total liabilities
+Other
+2.5
+791,375
+2.5
+905,953
+Debt securities issued
+1.1
+365,943
+4.3
+1.6%
+other financial institutions
+9.2%
+7 April 2025
+4.29
+16,389
+Policy bank bonds 2015
+20 September 2029
+3.45
+17,641
+Policy bank bonds 2019
+8 January 2029
+17 April 2030
+23 March 2030
+3.48
+Policy bank bonds 2020
+18,263
+2.96
+18,446
+Policy bank bonds 2020
+3.23
+19,460
+Policy bank bonds 2020
+5 September 2023
+1.65
+20,900
+Policy bank bonds 2022
+13 April 2025
+4.21
+Policy bank bonds 2019
+15,145
+3.79
+26 October 2030
+Due to banks and
+8.8%
+82.9%
+Due to customers
+82.8%
+2021
+2022
+Discussion and Analysis
+O
+Structure of liabilities
+ICBC
+32
+Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bonds.
+1
+The Bank fully implemented regulatory requirements, established a liability quality management system commensurate
+with the size and complexity of liabilities, set up an organizational system and governance structure for liability quality, and
+defined the management strategy and policy for liability quality that are consistent with the business strategy, risk appetite
+and overall business characteristics. The Bank attached great importance to the control of total quantity, structure and price
+of liabilities, and promoted the coordinated development of deposit quantity and price. It strengthened the basic work of
+liability quality management, consolidated the customer base, and enhanced the service capacity. As a result, the liability
+business achieved steady development and relevant indicators met regulatory requirements. As at the end of 2022, total
+liabilities reached RMB36,095,831 million, an increase of RMB4,199,706 million or 13.2% compared with the end of last
+year.
+Liabilities
+Reverse repurchase agreements amounted to RMB864,067 million, RMB200,571 million or 30.2% higher than that at
+the end of the previous year, principally because the Bank reasonably arranged fund operation strategies based on fund
+changes and moderately increased the lending size.
+Reverse Repurchase Agreements
+Note: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the expected credit loss model.
+16 November 2030
+3.74
+13,500
+Policy bank bonds 2020
+20 October 2030
+3.70
+14,244
+Policy bank bonds 2020
+Corporate deposits
+Discussion and Analysis
+48.7%
+47.3%
+13.2
+3,495,325
+13.6
+4,048,164
+Pearl River Delta
+20.6
+5,436,282
+20.9
+Yangtze River Delta
+0.1
+38,290
+0.1
+Bohai Rim
+35,579
+(%)
+Amount
+Percentage
+Percentage
+(%)
+Amount
+Item
+At 31 December 2022
+At 31 December 2021
+In RMB millions, except for percentages
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+Note: (1) Includes outward remittance and remittance payables.
+100.0
+Head Office
+1.4
+7,629,312
+6,885,411
+34
+100.0
+3.7
+955,294
+26,441,774
+100.0
+29,870,491
+Total
+3.6
+1,067,072
+Overseas and other
+5.3
+1,410,376
+25.5
+5.4
+Northeastern China
+16.3
+4,320,355
+16.0
+4,776,285
+Western China
+14.8
+3,900,441
+14.9
+4,455,782
+Central China
+26.0
+1,608,543
+361,994
+26,441,774
+100.0
+29,870,491
+7,533,110
+27.0
+8,076,256
+Demand deposits
+21.9
+5,798,353
+22.1
+6,594,898
+Time deposits
+Corporate deposits
+Percentage
+(%)
+Amount
+28.5
+At 31 December 2021
+(%)
+Amount
+Percentage
+At 31 December 2022
+Item
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+1.4%
+Accrued interest
+1.5%
+0.9%
+Other deposits
+0.7%
+In RMB millions, except for percentages
+Subtotal
+14,671,154
+49.1
+1.5
+454,566
+0.9
+250,349
+0.7
+199,465
+47.3
+12,497,968
+48.7
+14,545,306
+20.4
+5,390,582
+20.1
+5,991,387
+26.9
+7,107,386
+28.6
+8,553,919
+Total
+Accrued interest
+Other deposits(1)
+Subtotal
+Demand deposits
+Time deposits
+Personal deposits
+50.4
+13,331,463
+Personal deposits
+50.4%
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Annual Report 2022
+190,186
+1.8
+190,869
+95.2
+8,817,345
+95.6
+10,059,499
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+In RMB millions, except for percentages
+At 31 December 2021
+2.1
+At 31 December 2022
+Accrued interest
+Funds and other
+Equity instruments
+Bonds
+Item
+In 2022, the Bank supported the implementation of the national development strategies, stepped up efforts to serve the
+real economy, actively conducted bond investments, and reasonably arranged the variety and term structure of the bond
+portfolio to enhance the efficiency of fund use. As at the end of 2022, investment amounted to RMB10,527,292 million,
+representing an increase of RMB1,269,532 million or 13.7% from the end of the previous year. Among these, bonds rose
+by RMB1,242,154 million or 14.1% to RMB10,059,499 million.
+Investment
+Discussion and Analysis
+29
+Annual Report 2022
+Please see the section headed "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and
+their quality.
+The Bank took full advantages of the popularity of bill business among enterprises and the flexibility in services, and
+dedicated efforts to meeting enterprises' demands for bill discounting, boosting the development of the real economy. The
+amount of discounted bills increased by RMB621,027 million, a 117.7% growth of the number by the end of last year.
+Focusing on the customers, the Bank strengthened the overall planning of personal loan business, stepped up market
+expansion of consumption and business loan products through multiple channels, and continuously optimized the digital
+inclusive product system, to satisfy customers' diversified financing needs and promote sustainable recovery of consumption.
+Personal loans increased by RMB291,780 million or 3.7% from the end of last year. Specifically, personal consumption loans
+grew by RMB47,062 million or 25.1%; and personal business loans increased by RMB227,599 million or 32.4%.
+The Bank continued to strengthen its support for manufacturing, strategic emerging industries, green finance, inclusive
+finance, rural revitalization and other key fields, and steadily carried forward the corporate credit distribution to "New
+manufacturing, New services, New basic industries and High-tech industries" customer groups. As a result, the Bank's
+corporate loans in key strategic areas such as the Beijing-Tianjin-Hebei region, Yangtze River Delta, Guangdong-Hong Kong-
+Macao Greater Bay Area, Central China and Chengdu-Chongqing economic circle continued to grow. Corporate loans rose
+by RMB1,632,260 million or 13.4% from the end of last year. Specifically, short-term corporate loans and medium to long-
+term corporate loans increased by RMB412,775 million and RMB1,219,485 million respectively.
+100.0
+Total
+20,667,245
+166,434
+148,166
+56,817
+72.3
+6,371,607
+73.8
+7,419,005
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2022
+At 31 December 2021
+In RMB millions, except for percentages
+1.6
+Total
+Policy bank bonds
+Central bank bonds
+Government bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+100.0
+9,257,760
+100.0
+10,527,292
+1.1
+102,063
+1.0
+110,490
+1.6
+Other bonds
+0.5
+100.0
+Total
+Medium to long-term corporate loans
+13.2
+2,737,742
+13.5
+3,150,517
+59.0
+12,194,706
+59.6
+13,826,966
+(%)
+Amount
+(%)
+Amount
+Short-term corporate loans
+10,676,449
+Corporate loans
+Percentage
+Percentage
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2022
+38.4%
+2.6%
+Discounted bills
+Personal loans
+35.5%
+4.9%
+59.0%
+Corporate loans
+59.6%
+2021
+Item
+23,212,312
+46.1
+45.8
+3.3
+692,339
+2.7
+640,152
+Credit card overdrafts
+3.4
+702,441
+4.0
+930,040
+Personal business loans
+0.9
+187,316
+1.1
+234,378
+9,456,964
+Personal consumption loans
+6,362,685
+27.7
+6,431,991
+Residential mortgages
+38.4
+7,944,781
+35.5
+8,236,561
+Personal loans
+2.6
+527,758
+4.9
+1,148,785
+Discounted bills
+30.8
+38,207
+0.4
+761,736
+Percentage
+At 31 December 2021
+In RMB millions, except for percentages
+623,223
+6.8
+Amount
+Percentage
+(%)
+At 31 December 2022
+714,879
+Financial investments measured at fair value
+through profit or loss
+Amount
+Item
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+In terms of currency structure, RMB-denominated bonds rose by RMB1,103,169 million or 13.6% over the end of last
+year; USD-denominated bonds increased by an equivalent of RMB109,306 million or 24.3%; other foreign currency bonds
+increased by an equivalent of RMB29,679 million or 11.6%. During the reporting period, the Bank improved the investment
+portfolio structure of foreign currency bonds, reasonably arranged the currency structure in consideration of bond liquidity,
+security and profitability, and improved the efficiency of foreign-currency fund use.
+(%)
+100.0
+100.0
+10,059,499
+2.9
+256,837
+2.8
+286,516
+5.1
+450,447
+5.6
+559,753
+92.0
+8,110,061
+91.6
+9,213,230
+8,817,345
+(%)
+6.7
+2,178,018
+Bond name
+value
+interest rate (%)
+Maturity date
+losses (1)
+Policy bank bonds 2015
+22,117
+impairment
+Annual
+Nominal
+for
+Allowance
+In RMB millions, except for percentages
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+Financial investments measured at fair value
+through other comprehensive income
+As at the end of 2022, the Group held RMB1,758,450 million of financial bonds', including RMB761,736 million of policy
+bank bonds and RMB996,714 million of bonds issued by banks and non-bank financial institutions, accounting for 43.3%
+and 56.7% of financial bonds, respectively.
+31
+100.0
+9,257,760
+100.0
+10,527,292
+Total
+73.8
+6,830,933
+72.5
+7,634,395
+Financial investments measured at amortised
+cost
+19.5
+1,803,604
+20.7
+Discussion and Analysis
+Amount
+(%)
+Amount
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2022
+Discussion and Analysis
+Note: (1) Refers to overdue bonds.
+Total
+Over 5 years
+1 to 5 years
+3 to 12 months
+(%)
+Less than 3 months
+Remaining maturity
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+ICBC
+30
+In terms of distribution by issuers, government bonds increased by RMB1,047,398 million or 16.4% over the end of last
+year, mainly due to the increase in local government bonds and Chinese government bonds; central bank bonds increased
+by RMB18,610 million or 48.7%; policy bank bonds went up by RMB7,017 million or 0.9%; and other bonds increased by
+RMB169,129 million or 10.2%, mainly because the Bank appropriately increased its investments in credit bonds with sound
+liquidity and high qualification.
+100.0
+18.7
+1,652,812
+8,817,345
+100.0
+18.1
+1,821,941
+10,059,499
+8.6
+754,719
+7.6
+Undated (1)
+284
+0.0
+167
+Percentage
+Percentage
+At 31 December 2022
+At 31 December 2021
+Total
+Other foreign currency bonds
+USD-denominated bonds
+RMB-denominated bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+100.0
+8,817,345
+100.0
+10,059,499
+40.4
+3,556,934
+43.2
+0.0
+694,455
+6.9
+514,685
+5.8
+1,371,872
+2022
+13.6
+13.9
+3,649,193
+36.3
+3,517,415
+39.9
+4,343,695
+1,228,144
+Discussion and Analysis
+In RMB millions, except for percentages
+Annual Report 2022
+Investment
+accompany
+Open Wealth
+Community
+Product research
+and selection
+E
+Market research
+Product selection
+Marketing events
+Open Wealth
+Management Platform
+Smart
+recommendation
+Fund
+companies
+Insurance
+companies
+Investment education
+and promotion
+Wealth
+management
+companies
+Product label
+Customer
+suitability
+External partners
+Intelligent
+Brain
+Channel
+recommendation
+Marketing
+strategies
+Fund sale
+system
+Smart assessment
+i accompany
+Wealth Management
+Investment and Research
+System
+Fund back-
+office system
+0.0
+The Bank thoroughly implemented the national strategy of common prosperity, performed the political mission and
+responsibility of a large state-owned bank, and adhered to the "people-centered" concept. It continued to deepen
+the No.1 Personal Bank Strategy, innovated wealth management services, and launched an open wealth management
+platform. The Bank provided customers with full-process companionship services before, during and after investment
+through investment education and promotion, investment accompany, product research and selection and other
+new service modes. The Bank made wealth investment more universal, convenient and considerate with such full-
+process companionship services as market research, product selection, smart recommendation, smart assessment and
+i accompany.
+to Promote Common Prosperity Strategy
+Innovating Wealth Management Services
+-
+The Bank launched the first green and low-carbon
+credit card "ICBC-China Southern Power Grid
+Co-branded Credit Card". The Bank also launched
+the "Xinrui Future Card" for new citizens who
+start business or get employed in urban areas after
+graduation from universities or secondary specialized
+or technical schools, and the "ICBC i Future Credit
+Card" for young customers of Generation Z, so as
+to improve customers' financial service experience
+through exclusive customer group products.
+By the end of 2022, the Bank had issued 1,219
+million bank cards, an increment of 50.33 million
+compared with the end of last year. Specifically,
+1,054 million debit cards and 165 million credit
+cards had been issued. The overdraft balance of
+credit cards reached RMB640,152 million. In 2022,
+ICBC bank cards registered a spending volume of
+RMB19.71 trillion, including RMB17.42 trillion from
+debit cards and RMB2.29 trillion from credit cards.
+Personal deposits
+Unit: RMB100 millions
+Time deposits
+Demand deposits
+59,913.87
+53,905.82
+51,966.07
+85,539.19
+71,073.86
+64,639.29
+Personal loans
+Unit: RMB100 millions
+82,365.61
+79,447.81
+71,152.79
+2022
+2021
+2020
+2022
+2021
+2020
+43
+Discussion and Analysis
+44
+Internal and
+Financial
+Information
+external systems
+First, researching the market and following the trend. The community selected market data, industry research
+reports and other information, and provided professional analysis on macro-economy, market sentiment, asset
+allocation, industry dynamics, etc. in a timely manner. It also provided exclusive interviews with industry elites, to closely
+track market hot spots and changes, and help customers keep their head clear and make rational choices at all times.
+Second, selecting products and striving for excellence. The Bank evaluated and labeled products using both
+quantitative and qualitative methods, and quickly located products with long-term investment value among thousands of
+wealth management products. It built a product research and selection pool, and optimized it from time to time through
+long-term performance tracking and risk monitoring.
+In terms of foreign currencies, the Bank closely
+tracked changes in the fund liquidity and interest
+rates of foreign currency markets. While ensuring
+liquidity safety, it flexibly employed foreign currency
+market operation tools to support the foreign
+currency financing needs of the real economy. The
+Bank enriched foreign currency market operation
+tools, and was among the first to conduct foreign
+currency C-lending transactions in the interbank
+market, foreign currency bilateral repo transactions
+for bonds under CCDC custody and third-party
+foreign currency repo transactions with ESG bond
+basket as collateral. In 2022, the Bank won many
+honors, including the "Best Foreign Currency
+Lending Panel Bank" and the "Best Foreign Currency
+Lending Member" conferred by China Foreign
+Exchange Trade System.
+Investment
++
+4
+In terms of RMB bonds, the Bank adhered to
+serving the real economy, and played a key role
+in financial services. It ranked first in the market
+for eight consecutive years in terms of the balance
+and increment of local government bonds. The
+Bank continued to well conduct investment in
+the enterprises of key fields, including green
+development, rural revitalization and advanced
+manufacturing.
+In terms of foreign currency bonds, the Bank
+constantly strengthened study and judgment on the
+trends of foreign currency interest rates and credit
+spread and steadily engaged in foreign currency
+bond investment. The Bank dynamically adjusted the
+structure of investment portfolios, actively promoted
+investment in non-USD currencies, such as AUD and
+EUR, and improved the use efficiency of foreign
+currency funds. The Bank increased support for
+green finance and steadily advanced "Southbound
+Connect" transactions. In 2022, the Bank came in
+first among Chinese banks in the selection of "Top
+Investment Houses in Asian G3 Bonds" by The Asset.
+Treasury Trading Business on Behalf of
+Customers
++
+In terms of foreign exchange settlement and
+sales and foreign exchange trading on behalf
+of customers, the Bank actively publicized the
+concept of foreign exchange risk neutrality through
+online and offline channels, centralized salons and
+door-to-door visits, traditional media and new
+media, so as to help enterprises manage exchange
+rate risks. The Bank constantly improved online
+transaction functions and customer experience, and
+enriched tradable currencies to meet the diversified,
+convenient and personalized exchange hedging
+needs of customers. The Bank promoted business
+innovation and development, and entered into the
+first RMB/foreign exchange options transactions on
+behalf of customers on the bank-enterprise platform.
+It promoted forward settlement and sales of foreign
+exchange under third-party guarantee to small and
+medium-sized foreign trade enterprises, and the
+USD interest rate swap transactions on behalf of
+customers linked to SOFR in combination with the
+reform of international benchmark interest rates.
+In terms of corporate commodity derivative trading,
+the Bank exploited the Group's advantages to help
+enterprises cope with the risk of price fluctuations in
+the global commodity markets and achieved smooth
+operation of commodity trading.
+In terms of the over-the-counter ("OTC") bond
+business, the Bank distributed the first financial
+bond with the themes of major water conservancy
+projects and green bond of the Agricultural
+Development Bank of China, as well as the OTC local
+government bonds in 35 provinces (autonomous
+regions, municipalities directly under the Central
+Government, and cities specifically designated in
+the state plan), assisting in major projects, green
+finance and regional development. The Bank was
+awarded the "Excellent Underwriter Award for
+Over-the-Counter Circulating Bonds" and the
+"Excellent Underwriter Award for Over-the-Counter
+Local Government Bonds" by China Central
+Depository & Clearing Co., Ltd., and the "Excellent
+Participant in OTC Bond Business" by Shanghai
+Clearing House.
+46
+ICBC
+Discussion and Analysis
+4
+The
+-
+Bank actively served foreign institutional
+investors from more than 60 countries and regions,
+to meet their needs of investing and trading in
+China's interbank market. It won the "Award
+for Market Influence of the Year Opening-Up
+Participants" and the "Market Innovation Award
+Cross-border Service Innovation" granted by the
+National Interbank Funding Center, the "Excellent
+Settlement Agent under Global Connect Business"
+and the "Excellent Contributors to International
+Business" granted by China Central Depository &
+Clearing Co., Ltd., and the "Bond Connect Market
+Promotion Award" granted by Bond Connect Co.,
+Ltd.
+Asset Securitization Business
++
+In 2022, the Bank issued four asset-backed
+securities, of which one was a personal residential
+mortgage securitization program and three were
+non-performing loans securitization programs, with
+a total amount of RMB11,375 million.
+Precious Metal Business
+4
+The Bank developed high-quality physical precious
+metal products for the customers of different
+scenarios and regions. The Bank carried out circle
+marketing to parents and Generation Z customer
+groups, and launched the first "Harry Potter" series
+co-brand products designed by fans. Focusing on
+regional cultural characteristics, the Bank developed
+regional brand products such as the "Magnificent
+Jilin", the "Magnificent Liaoning" and the
+"Magnificent Shanxi", integrating the representative
+cultural elements of each region.
+The Bank improved precious metal services for
+corporate and institutional customers. Focusing
+on the green and low-carbon transformation and
+development needs of enterprises in the industrial
+chain of precious metals, the Bank realized the
+leasing of precious metals to enterprises in emerging
+fields for the first time. It steadily promoted
+corporate agency price asking, trading on behalf of
+customers and interbank precious metal business. In
+2022, the Bank ranked first in the market in terms of
+the amount of clearing on behalf of Shanghai Gold
+Exchange, and the scale of gold enterprise leasing
+and interbank leasing, and was reelected "First
+Prize Winner of the Excellent Financial Member" by
+Shanghai Gold Exchange.
+FinTech
+In terms of RMB, the Bank actively fulfilled its
+responsibilities as a large bank, took the initiative
+to increase financing and assisted in maintaining a
+proper and adequate level of liquidity supply and the
+stable operation of interest rates in the interbank
+money market. The Bank kept a close eye on macro
+situation and market trend, scientifically formulated
+financing strategies, reasonably designed financing
+varieties and maturity structure, and improved the
+efficiency of capital operation. The Bank persisted
+in taking the initiative to prevent risks, continued
+to improve rules and systems, strictly implemented
+risk control requirements, and ensured business
+compliance.
+ICBC e Life platform was upgraded in all respects. The
+Bank launched a new version of e Life 5.0 focusing
+on the four major segments, i.e., "Life Spending,
+Installment Products, Credit Rewards, Bank Account".
+The Bank created a non-financial ecosystem centering
+on three life circles - "scenario life, office life and
+community life", and initially formed an online and
+offline consumption ecosystem. Based on the business
+development philosophy of "mega merchants",
+the Bank established a pan-financial ecosystem
+of merchants through GBC+ interconnection and
+diversified operation, and utilized its digitization
+achievements to facilitate the diversified operation of
+merchant customers.
++
+Money Market Activities
+Third, smart recommendation specific to customers. The Bank innovatively launched Five Dream Plans with a profound
+insight into the needs of different groups, including wealth beginners, influencers in wealth management, parents, wage
+earners and the elderly. According to the risk appetite and risk tolerance of customers, the Bank provided them with
+personalized long-term companionship services before, during and after investment, including asset planning, product
+allocation and position diagnosis, so as to help all customers realize their wealth dreams.
+Fourth, long-lasting smart assessment. The Bank was committed to evaluating the wealth health of each customer,
+analyzing investment profits and losses, measuring the income and anti-risk capability of the products held, the cost
+effectiveness of investment and the management ability of fund managers, and assisting customers in adjusting their
+asset portfolios in a well-timed manner.
+Fifth, i accompany with care. Relying on powerful financial technology, the Bank accompanies every customer on their
+journey of wealth growth by enabling wealth management virtually.
+In the future, the Bank will continue to adhere to its original intention of serving the national economy and the people's
+livelihood, continue to diversify financial services, and accelerate the building of a people-centered mega wealth
+management system, so that customers can effectively experience the sense of access to wealth services, happiness and
+security. The Bank will contribute to the common prosperity of all people.
+ICBC
+.99
+Discussion and Analysis
+Asset Management Services
+The Bank strictly implemented regulatory requirements,
+actively seized development opportunities, and enhanced
+investment management and research capabilities on all
+fronts. A customer-centered "ICBC Asset Management"
+brand was launched to improve the professionalism of
+financial services such as wealth management, fund,
+insurance, pension, etc. The Bank leveraged the license
+advantages of diversified subsidiaries of fund, insurance,
+leasing, investment banking and wealth management to
+jointly meet customers' diversified financial needs for both
+products and investments.
+4
+Brand value and industry influence improved
+significantly. The Bank held the "Full Custody"
+service brand presentation, launched the first custody
+service brand in the industry, and improved the
+service philosophy of "accompanying you all the way
+with comprehensive and considerate services". It was
+awarded the "Best Custodian Bank, Onshore, China"
+and the "Best Insurance Custodian, Onshore, China"
+by The Asset and the "Tianji Award for Outstanding
+Asset Custodian Bank" by Securities Times.
+At the end of 2022, the size of custody business¹
+reached RMB20.9 trillion.
+Wealth Management Services
+The Bank implemented the New Rules on Asset
+Management and regulatory requirements, seized the
+market development opportunities, and cultivated
+qualified investor customer groups. It adhered to
+investment research and technology empowerment,
+steadily reduced existing wealth management size
+and improved duration management. At the end of
+2022, the balance of wealth management products
+reached RMB2,144,256 million. Specifically, the balance
+of wealth management products of ICBC Wealth
+Management was RMB1,762,288 million. Please refer
+to the section headed "Business Overview - Diversified
+Operation and Subsidiary Management" for details on
+the business development of ICBC Wealth Management.
+Asset Custody Services
+New breakthroughs were made in key products, and
+the Bank's leading position in the industry was further
+consolidated. Some innovation products were newly
+under custody, including Specialization, Refinement,
+Differentiation and Innovation Index Fund, Carbon
+Neutrality Index Fund and BSE 50 Index Fund. The
+first batch of pension and wealth management
+products, personal pension insurance products and
+other personal pension products were under the
+Bank's custody. The Bank also stayed ahead of peers
+in terms of the scale of "Southbound Connect"
+custody business. At the end of 2022, the insurance
+assets under the Bank's custody amounted to RMB6.3
+trillion. The mutual funds under custody reached
+RMB3.5 trillion. The pension funds under custody
+stood at RMB2.5 trillion. The outsourcing business of
+asset management products totaled RMB2.3 trillion.
+All these products ranked first in the industry.
+Pension Services
++
+Personal pension business was promoted steadily.
+The Bank worked closely with the regulatory
+authorities to carry out personal pension policy
+research, process design and system building. The
+Bank made every effort to create a personal pension
+financial service system satisfactory to the people,
+and helped formulate and promote personal pension
+system. The Bank actively participated in the pilot
+projects of specific pension savings, pension wealth
+management products and other pension financial
+products, created a full-category, shelf-type personal
+pension product system, and highlighted the pension
+attribute and inclusive features in respect of product
+design, investment arrangement, rate setting, etc.
+The quality and efficiency of operation service
+kept improving. The Bank improved customer
+services, continuously strengthened the classified
+management of customers, and paid return visits
+to customers through multiple channels. The Bank
+initiated the centralized operation of pension
+business on a trial basis, refined the operation
+service process, and improved intensive operation of
+business remarkably.
+At the end of 2022, the annuity funds under custody
+amounted to RMB473.9 billion. The Bank managed
+12.49 million individual enterprise annuity accounts,
+and the annuity funds under custody reached
+RMB1,245.7 billion. The Bank led other banks
+in terms of the scale of enterprise annuity funds
+under the Bank's trusteeship, number of individual
+enterprise annuity accounts and annuity funds under
+the Bank's custody. The Bank won the "Tianji Award
+for Pension Financial Services Bank" by Securities
+Times and the "Top 10 Digital Wealth Management
+Innovation" by The Chinese Banker.
+1
+According to the latest regulatory criteria of CBIRC, fund supervision business is not included in the size of custody business.
+Annual Report 2022
+45
+Discussion and Analysis
+Financial Market Business
++
+Bank Card Business
+11
+The Bank was awarded the "Best Private Bank,
+China" by The Asset, the "World's Best Private Bank
+for Entrepreneurs" by Global Finance, and "High Net
+Worth Professional Service of the Year in China" by
+The Asian Banker.
+platform to cooperate with education authorities in
+the supervision of education and training funds, and
+assist in supervising more than 33,000 education
+and training institutions. Closely focusing on the
+reform of judicial system, the Bank took the lead
+in the industry to launch the "Intelligent Politics
+and Laws" comprehensive service platform, helped
+judicial agencies at all levels in China to achieve the
+whole-process refined management of case funds,
+improve the efficiency of return of case funds, and
+reduce the case cycle.
+Financial market services were further developed in
+all respects. The Bank strengthened the collaboration
+with development financial institutions and policy
+banks, and gave play to the complementary
+advantages to meet the financing needs of national
+infrastructure and major projects. It enhanced the
+syndicate cooperation of strategic projects such
+as equipment manufacturing, green energy and
+infrastructure connectivity, and consolidated and
+promoted the cooperation of the Belt and Road
+development projects. The Bank continued to
+strengthen the connection of financial infrastructure
+services, and was among those in the industry
+which first obtained the qualification of depository
+bank designated by Shanghai Futures Exchange for
+commodity exchange, first conducted registration
+cooperation in warehouse receipt pledge and
+completed financing registration with Dalian
+Commodity Exchange, and first obtained the
+qualification of settlement bank for connectivity
+cooperation in the domestic bond market. It was also
+among those which were first allowed to engage
+the margin depository business on Guangzhou
+Futures Exchange. The Bank established a new
+model of financial services for the real economy,
+strengthened the innovation of the investment and
+loan interconnection between banking and securities
+institutions, and gave play to the complementary
+advantages of banking and insurance institutions.
+The Bank worked with Dalian Commodity Exchange
+to promote the establishment of the "standard
+delivery warehouse for pigs" in Dazhou City, Sichuan
+Province, in order to help upgrade the local farming
+industry. It provided bill brokerage services for more
+than 8,000 corporate customers and gathered new
+momentum to serve small and micro enterprises.
+The output of FinTech had new bright spots. The
+Bank provided 54 interbank customers with FinTech
+service programs such as anti-money laundering
+and risk management, and won the "Outstanding
+Contribution Award for Financial Risk Control" at
+the 2022 China Fintech Research Conference.
+40
+40
+ICBC
+ICBC
+Focusing on needs of national strategies such as serving
+the real economy, preventing financial risks and deepening
+the financial reform, the Bank deepened FinTech
+empowerment and data application from the dimensions
+of marketing, risk control and operation etc., and
+developed a series of quality services satisfactory to the
+people.
+Enhancing the Capability of Rendering
+Financial Services
+middle-office data empowerment was
+enhanced. The Bank promoted the data entry and
+sharing of the data lake, with a total of 45,000
+tables entered into the data lake. It established a
+hierarchical data center system, adding knowledge
+map, customer tag, data service and other elements,
+and supported the construction of more than 300
+key scenarios such as bank-wide digital operation,
+joint risk prevention and control, and outlet connect.
+The Bank intensified data asset management,
+activated data element ecosystem, and completed
+the preparation of 11 industry standards for the
+fields such as data security management and federal
+learning.
+The
+The technical support capabilities of enterprise-level
+new technology platform were enhanced. Its Al
+technology platform was the first in the financial
+industry to pass the "application maturity of Al
+development platforms" universal assessment and
+obtain the highest level of certification. Its blockchain
+integrated multi-party security computing technology
+to facilitate the safe and reliable circulation of
+data assets. The Bank has been selected as part
+of "Global Blockchain 50" by Forbes for two
+consecutive years. "ICBC Anxin Asset Management
+Blockchain" was selected as one of the national
+blockchain innovation and application pilot projects.
+The Bank's privacy computing platform was the only
+pilot demonstration project for big data industry
+development selected by the Ministry of Industry and
+Information Technology in the banking industry.
+core platforms. It continued to promote the new
+generation of cloud platform, and stayed ahead
+of peers in terms of the scale of cloud access and
+platform capabilities. Its financial cloud platform
+has been awarded the "International Best Cloud
+Computing Project" by The Asian Banker for two
+consecutive years. The Bank's distributed technology
+system was further enhanced, with an average daily
+service invocation of over 17 billion times, and won
+the First Prize of "Dingxin Cup" in digital technology
+innovation conferred by the China Academy of
+Information and Communication Technology.
+The Bank strengthened the capabilities of technical
+support for "cloud computing + distributed"
++
+The Bank adhered to technology self-reliance, updated
+ECOS technology ecosystem, promoted technology
+breakthrough in key fields of infrastructure system, and
+strengthened research and application of cutting-edge
+technologies. A series of new enterprise-level technology
+platforms with industry-leading advantages were built
+up. As at the end of 2022, the Bank had the most newly
+added and accumulated patents among Chinese banks,
+and led the industry in terms of the number of industry
+standards it established.
+Deepening Innovative Technology-Driven
+Capabilities
+The management of data security and information
+protection kept improving. The Bank facilitated the
+implementation of tiered and classified data security
+standards and the protection of customers' sensitive
+information, and strengthened the implementation
+of industry standards. The Bank launched a data
+security management module of the enterprise-level
+data governance platform, established an
+identification rule library to drive the automatic
+implementation of standards, and enhanced the data
+security management based on data classification.
+The Bank conducted risk self-assessment on the data
+security in the fields of data security management,
+data security protection, and data security operation
+and maintenance, and continued to improve the
+bank-wide data security protection.
+transformation of production, operation
+maintenance was advanced as scheduled.
+The Bank established an open platform disaster
+recovery system. It was the first in the banking
+industry to successfully complete sudden and
+practical emergency drills organized by regulatory
+authorities, and successfully winded up the annual
+business-level nonlocal disaster recovery drill. The
+completeness of the emergency management system
+was effectively verified. The Bank built an operation
+and maintenance data center and an operation and
+maintenance service platform, which effectively
+improved the monitoring efficiency of important
+application systems, and significantly reduced the
+switching time of emergency response.
+and
+The reform services in the key areas of China have
+been deepened. The Bank served the integrated
+fiscal budget reform, and was the first in the industry
+to launch a digital integrated system of fiscal budget
+management. The Bank exerted its utmost to render
+supporting financial services for the overall reform of
+social security, constantly improved the features of
+"ICBC e Social Security" service, and continued to
+expand the coverage of "social security and banking
+integrated outlets". The Bank energetically assisted
+with the building of a mobile payment and clearing
+system for medical insurance, and comprehensively
+promoted the online, convenient and information
+technology-based medical insurance public services.
+"ICBC Cloud Healthcare", an intelligent healthcare
+open platform, was launched to provide "finance
++ industry" comprehensive intelligent healthcare
+scenario program for medical management
+departments and healthcare institutions at all levels.
+The Bank established an all-in-one service system
+- "Intelligent Education", and took the lead in
+the industry to launch the "Intelligent Vocational
+Education Cloud" to advance the development
+of vocational education. The Bank established
+an industry-leading ICBC Anxin fund supervision
+Institutional Banking
+Following the development of "digital inclusiveness",
+the Bank formed a financing risk management
+system characterized by "data driven, intelligent
+warning, dynamic management and continuous
+operation", which further consolidated the
+foundation of risk management. The Bank
+constantly optimized and iterated access, rating and
+credit models, and accurately judged customers'
+substantial risk status through model control, online
+and offline cross-validation, and other methods.
+It strengthened anti-fake and anti-fraud work,
+selected customer groups with good credit and
+stable operation, and strictly controlled customer
+access. By comprehensively integrating internal and
+external data sources such as financing, settlement,
+justice, credit reference, taxation and customs, the
+Bank built a "1+N" intelligent risk control system
+adapted to the risk characteristics of small and
+micro enterprises, in order to accurately identify
+the risk changes during the period of financing. It
+strengthened the dynamic risk monitoring and early
+warning, and established a risk control mechanism
+of "off-site warning by the Head Office + on-site
+verification by branches".
+Discussion and Analysis
+Discussion and Analysis
+of Quick Lending for Operation, the Bank created
+national scenarios such as settlement, taxation,
+employment and cross-border business, as well as
+regional scenarios including planting, breeding, and
+specialized markets. It launched "Merchant Loan"
+based on acquiring information to effectively support
+inclusive long-tail customers such as self-employed
+businesses. In terms of Digital Supply Chain, the
+Bank actively further enhanced cooperation with
+leading enterprises in key industries, built a financial
+service system for industrial chain scenarios, and
+launched customized online financing products to
+effectively meet the diversified financial needs of
+production, purchase and sales. It established a
+supply chain-related financial service platform and
+accelerated the promotion of platform customization
+and full-scenario financing services.
+The Bank shouldered the responsibilities as a large
+bank to help enterprises solve difficulties. Focusing
+on key areas and weak links, the Bank refined and
+implemented 19 special measures to strengthen
+financial services and solve difficulties for small
+and micro customers. It improved the emergency
+financing service system, and enhanced the financial
+support for the industries such as wholesale and
+retailing, accommodation, catering, and foreign
+trade. The Bank conscientiously implemented the
+policy of deferred repayment of principal and
+interest, well conducted fund continuation services,
+improved online loan renewal procedures, and
+enabled customer self-service application and
+automatic system approval.
+The Bank strengthened the dual supply of
+credit funds and business opportunities, built a
+comprehensive financial service system of "financing,
+consulting and commercial services" for small and
+micro enterprises, and created a sound development
+ecosystem. The Bank promoted a series of activities
+such as "ICBC Inclusive Finance Travel" and "Ten
+Thousand Small and Micro Enterprises Growth
+Plan", and provided small and micro enterprises
+with a package of comprehensive financial services,
+including financing, settlement and payroll payment
+agency service. "ICBC Business Matchmaker",
+a
+cross-border matchmaking service platform,
+helped small and micro enterprises access industrial
+and supply chains, attracted more than 170,000
+enterprises from 75 countries and regions, and
+promoted more than 16,000 cooperation intentions.
+ICBC
+工银“兴农通”
+The
+工银“兴农通”APP
+ICBC
+At the end of 2022, the Bank had 226.0 thousand
+private banking customers, representing an increase
+of 26.5 thousand or 13.3% over the end of the
+previous year. The assets under management
+totaled RMB2.63 trillion, representing an increase of
+RMB302.9 billion or 13.0%.
+兴农贷、幸福存
+福农卡、兴农摄合
+数字乡村
+扫描下载”兴农通”app
+"ICBC Xingnongtong" APP, an innovative financial product of the Bank,
+was launched to help improve the rural financial service system and facilitate rural revitalization.
+Annual Report 2022
+39
+普惠服务 数学兴农
+the cultivation of network security professionals and
+the research and reserve of core capabilities of attack
+and defense, and jointly built the first comprehensive
+financial attack and defense shooting range in the
+industry with domestic leading research institutions
+in the field of network security.
+48
++
+Bills Discounting Business
++
+At the end of 2022, the number of personal customers
+increased by 16.72 million over the end of the previous
+year to 720 million. Personal financial assets totaled
+RMB18.66 trillion. Specifically, personal deposits
+reached RMB14,545,306 million, representing an
+increase of RMB2,047,338 million or 16.4%. Personal
+loans stood at RMB8,236,561 million, representing
+an increase of RMB291,780 million or 3.7%. Funds
+under agency sales amounted to RMB368.8 billion,
+government bonds under agency distribution were
+valued at RMB62.2 billion, and personal insurance
+products under agency sales reported at RMB114.4
+billion.
+The Bank followed the trend of providing
+differentiated bill services for key fields and
+industrial customers. It advanced supply chain bill
+business steadily and efficiently, and launched
+the universal supply chain bill business on Bill
+Financing Comprehensive Management System. It
+I was one of the first institutions connected with the
+new-generation bill business system of Shanghai
+Commercial Paper Exchange. The Bank had also
+put "ICBC Manufacturing Companionship" bill
+innovation project in support of manufacturing
+industry into service with all functions, and
+launched "Rural Revitalization Discounting", a
+pioneer bill product that provides chain services for
+agriculture-related industries.
+In 2022, the Bank had discounted bills at an amount
+of RMB2,204,409 million, featuring an increase
+of 29.0% as compared to last year, and kept the
+leading position in the market. The Bank was
+awarded "Excellent Market Organization", "Excellent
+Underwriter", "Excellent Discounting Organization"
+and "Excellent Dealer" by Shanghai Commercial
+Paper Exchange.
+Personal Banking
+In 2022, the Bank focused on the strategic requirements
+of further building the No.1 Personal Bank and accelerated
+the ecological construction and digital transformation
+of personal banking. Being customer-centric, the Bank
+continued to improve the tiered and classified maintenance
+of customers. Focusing on the core financial needs of
+personal customers, it built a new ecosystem of wealth
+management, consumer finance, payment and settlement,
+and account management services, and promoted
+high-quality business development.
+The Bank accelerated the ecological construction of
+personal customers and enhanced GBC three-end
+collaborative operation capability. The Bank seized
+market opportunities such as rural revitalization, the
+third pillar of pension and new citizens and actively
+developed new customers. For the customer groups
+such as payroll payment agency service, generation
+Z, and the elderly, the Bank worked on the operation
+and promotion of key customer service brands such as
+"ICBC Salary Manager", "ICBC i Xiaoyu", and "ICBC
+Aixiangban". Focusing on high-frequency life scenarios
+such as living, travel and education, as well as different
+local life scenarios, the Bank integrated financial
+services into daily life to improve the applicability and
+availability of services. Tailored to customer needs, the
+Bank integrated personal customer financing services,
+Discussion and Analysis
++
+and formed a new full-process service model of credit
+card, credit loan, collateralized loan.
+ICBC
+Discussion and Analysis
+Private Banking
++
++
+In cooperation with China Charity Alliance,
+China Charity Federation and other authoritative
+associations and organizations, the Bank established
+the "Partner Charity Trust", pooled funds to assist
+scientific research and charity, and connected wealth
+to public service fields.
+Bank adhered to product and service
+innovation. Relying on the advantages of group
+financial services, the Bank integrated the service
+resources of investment and financing products,
+and strengthened the operation and maintenance
+management of the whole lifecycle of products.
+It built a product selection system, and worked
+with ICBC Wealth Management to steadily expand
+the agency sales of wealth management products
+of other institutions. The Bank comprehensively
+upgraded the exclusive rights and interests of family
+trust business, held two entrepreneur seminars, and
+created scenarios to improve customer's sense of
+respect and experience. 420 "Entrepreneurs Service
+Centers" were listed in 280 key cities and regions of
+China.
+42
+41
+Annual Report 2022
+The Bank continued to consolidate its advantages
+in bond underwriting, and, as a lead underwriter,
+underwrote 2,716 domestic bond projects in 2022,
+with a total amount of RMB2,028,748 million. The
+Bank fully supported the national ESG transformation
+strategy, and, as a lead underwriter, underwrote
+RMB145,713 million worth of ESG bonds, including
+green bonds, sustainable development-linked bonds,
+and social responsibility bonds.
+Discussion and Analysis
+47
+Annual Report 2022
+The Group's network and information security
+system kept improving. The Bank took the initiative
+to reinforce external threat intelligence monitoring
+and protection measures, and improved the
+dynamic security capability of the Group by building
+a comprehensive honeynet system, deploying a
+host security protection system, and introducing
+a pilot zero trust system framework. The Bank
+actively promoted the security protection of key
+information infrastructure, and was named as a pilot
+demonstration unit for security protection of key
+information infrastructure. The Bank strengthened
+The Bank actively responded to the complicated and
+changing external situation and the new challenges
+brought by technological innovation, adhered to the
+production safety measures, and deepened the intelligent
+transformation
+and
+of operation
+maintenance. It
+accelerated the upgrading of its security system, and
+enhanced the technical capability of data security. The
+availability of the Bank's information system remained
+above 99.99%, providing strong support for the Bank's
+digital transformation.
+Reinforcing the Production Safety
+In 2022, the Bank was ranked at first place in the banking
+industry in CBIRC's IT supervision ratings, keeping the
+leading position among peers. The Bank's six technical
+achievements won PBC's "FinTech Development Awards",
+of which ICBC global payment and clearing system won
+the First Prize, staying ahead of peers in terms of the
+number of awards. The Bank was the only one in the
+banking industry to win the title of "Top 10 Brands in Data
+Management for the Year 2022". The Bank won the "Best
+Financial Innovation Award" and the "Top 10 FinTech
+Innovation Award" conferred by The Chinese Banker and
+the "International Best Cloud Computing Project" and the
+"Best Data Management Project" again conferred by The
+Asian Banker.
+Centering on the FinTech development plan during
+the 14th Five-Year Plan period and the general plan for
+deepening digital transformation, the Bank facilitated the
+building of a "tech-empowered bank" and "D-ICBC",
+reinforced production safety and deepened the innovative
+technology-driven capacity. It strengthened the application
+of data governance and empowerment, enhanced the
+capacity of rendering financial services, continued to
+improve the scientific and technological innovation system
+and actively promoted the high-quality development
+throughout the Bank.
+Discussion and Analysis
+Settlement and Cash Management
+The Bank promoted the digital transformation
+and development of settlement finance, pushed
+forward the process optimization and intelligent
+transformation of the operation mode, and
+established a new model of ecological marketing
+services for settlement financial scenarios covering
+large, medium, small and micro customers. It actively
+explored supply chain, industrial chain and "financial
++ non-financial" services, and constantly diversified
+services. The Bank actively responded to and
+implemented the national policy of reducing fees,
+and steadily promoted the reduction of fees for small
+and micro enterprises and self-employed businesses.
+The Bank independently developed a treasury
+information system, gave full play to the advantages
+of cash management products and services, met
+the capital management needs in the building of
+enterprise treasury system through product output,
+and enabled the financial digital transformation
+of large domestic enterprises. In line with the
+development trend of global financial and asset
+management, the Bank boosted the global treasury
+management of corporate customers with the help
+of "zero time lag" information decision-making
+support, efficient and safe global capital settlement
+and cross-border position management, rich and
+comprehensive capital appreciation products and
+risk mitigation tools. It was awarded the "Best
+International Cash Management Bank" by The Asian
+Banker for seven consecutive years and the "Best
+Global Cash Management Bank" by Treasury China
+for four consecutive years.
+By the end of 2022, the Bank maintained
+12,283 thousand corporate settlement accounts,
+representing an increase of 1,067 thousand over
+the end of the previous year. It had 1,874 thousand
+cash management customers, including 10,433
+global cash management customers. The volume of
+corporate settlements reached RMB2,649 trillion in
+2022.
+Investment Banking
+The Bank specially strengthened financing support
+for manufacturing M&A transactions, focusing
+on key areas such as the reform of state-owned
+enterprises, capital market, industrial integration,
+and the Belt and Road initiative. It built an intelligent
+marketing system, strengthened the services for key
+customers such as listed companies, and continued
+to maintain a leading position in terms of the market
+share of M&A financing at home and abroad. By
+number of M&A deals led by the Bank, the Bank
+ranked first in China in Refinitiv's ranking of Any
+Chinese Investment Completed and first in the
+ranking of China Outbound Announced M&A.
+The Bank facilitated the digital transformation of
+personal banking. The Bank improved the unified view
+of personal customers, strengthened the construction
+of "Intelligent Brain" to steer the marketing services
+of personal banking, and make personal customer
+marketing more intelligent and targeted. Centering
+on the core needs of customers, the Bank pooled
+resources to create new product and service
+architectures such as open wealth management
+platform, a new generation of personal loan
+system and ICBC Lingtong Account, and improved
+professional service capabilities. With "mobile
+banking + ICBC e Life" as a main platform, the Bank
+strengthened the promotion of an open wealth
+community, advanced the building of open banks
+such as Ju Fu Tong and e Wallet, and created an open
+platform and a light portal. While building a unified
+risk view for personal customers, the Bank made
+efforts to enhance intelligent risk control capabilities
+and the capabilities of early warning, in-process
+intervention and ex post verification of risks.
+The Bank actively assisted in rehabilitating existing
+assets and expanding effective investment. It
+supported the innovative development of publicly
+offered REITs, and strengthened services for
+infrastructure, sci-tech innovation, advanced
+manufacturing, green environmental protection
+and other fields. The Bank innovated equity
+financing products to help enterprises optimize
+their capital structure. It expanded actively managed
+asset securitization business to meet the needs of
+customers for comprehensive financial services.
+It
+advanced the financing rearrangement and
+enterprise debt restructuring, and defused the
+liquidity pressure and potential risks of customers.
+The Bank enriched the digital investment banking
+service scenarios and cultivated the brands
+such as ICBC ISP, "Al+", ICBC e Intelligence
+"Platform+", ICBC e Security "Risk Control+",
+ICBC e RM "Financial Management+", and ICBC
+e Confirmation Service "Credit+".
+Focusing on customer needs and capital flows,
+the Bank acquired new customers and new funds,
+and improved the quality and efficiency of existing
+customers. The Bank increased the supply of deposit
+products for key customer groups, and constantly
+enhanced the stability of personal deposit growth.
+In response to the changes in the market, the Bank
+enhanced financing support for market entities
+such as small and micro enterprises, self-employed
+businesses and truck drivers, continued to optimize
+the structure of personal loan products, and launched
+innovative products, including Ease Long-term Loan,
+Consolidate Preferential Loan and Revolving e Loan.
+Consumer loans and business loans both achieved
+rapid development. The Bank built an "own platform
++ third-party payment + e-CNY” payment ecosystem,
+which provides customers with intelligent and
+scenario-based payment and settlement services.
+The
++
+85,048
+91
+(except Hong Kong SAR
+and Macau SAR)
+Europe
+1,057
+83,726
+871
+91
+1,289
+2022
+135,854
+401
+(in USD millions)
+platforms and other entities. It launched the pilot
+project of the cross-border e-commerce collection
+model based on public service platforms for
+cross-border e-commerce in Shanghai. In 2022,
+cross-border RMB business exceeded RMB9 trillion.
+As at the end of 2022, the Bank had established 416
+overseas institutions in 49 countries and regions,
+and indirectly covered 20 African countries as a
+shareholder of Standard Bank Group. It had 125
+institutions in 21 countries along the Belt and Road.
+The Bank also established business relationships with
+1,438 foreign banks in 142 countries and regions. Its
+service network covered six continents and important
+international financial centers around the world, and
+its global network layout continued to improve.
+Profit before taxation
+(in USD millions)
+At the end At the end
+Item
+of 2022
+of 2021
+2021
+Number of institutions
+At the end At the end
+of 2022
+Hong Kong SAR and
+213,726
+214,414
+1,050
+1,373
+of 2021
+97
+102
+Macau SAR
+Asia-Pacific Region
+145,860
+74
+253
+America
+3,538
+451,549
+444,177
+Subtotal
+(51,999)
+(50,786)
+Eliminations
+1
+1
+African Representative Office
+152
+153
+328
+The Bank innovated diversified and open service
+channels and models. It deeply promoted the
+"Cloud ICBC" non-contact service brand, and
+upgraded and promoted "Cloud Outlets" and
+"Cloud Studio" relying on mobile banking, the
+Bank's WeChat official account and applet. The
+Bank provided online financial services via more
+than 15 thousand "Cloud Outlets" and 28 thousand
+wealth managers, and registered more than 800
+million visits to "Cloud Outlets" in 2022. The Bank
+innovated the "Ma Shang Ying" partner marketing
+model, comprehensively promoted corporate
+WeChat platforms, improved the online contact with
+customers and empowered offline outlet marketing
+services.
+Assets
+3,084
+75
+416
+Investment in Standard Bank(1)
+60,335
+59,548
+ICBC
+58
+of USD14,148 million or 7.2% from the end of
+the previous year; and due to customers were
+USD152,036 million, representing an increase of
+USD2,763 million or 1.9%. Profit before taxation
+during the reporting period was USD3,922 million,
+representing an increase of USD508 million or
+14.9%, and accounting for 6.4% of the Group's
+profit before taxation.
+As at the end of 2022, total assets of the Bank's
+overseas institutions (including overseas branches,
+subsidiaries and investment in Standard Bank) were
+USD447,911 million, representing a decrease of
+USD7,508 million or 1.6% from the end of the
+previous year, and they accounted for 7.9% of
+the Group's total assets. Total loans amounted
+to USD183,131 million, representing a decrease
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the
+Bank's gain on investment recognized by the Bank during the reporting period.
+421
+416
+3,414
+330
+384
+3,922
+3,870
+455,419
+3,734
+447,911
+Total
+421
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+The Bank continued to promote the online and
+offline integrated operation mode. In 2022, its online
+and offline integrated service had covered 33 types
+of individual and corporate business scenarios, with
+45.3 million transactions handled. In key scenarios,
+more than 90% of transactions had been carried out
+online.
+Laos, Kazakhstan and Pakistan were qualified as
+RMB clearing banks, causing the total number of
+overseas RMB clearing banks to rise to 10. The Bank
+participated in two-way opening up of financial
+markets and became the partner bank of the central
+counterparty for clearing in the "Interconnected
+Cooperation between Hong Kong and Chinese
+Mainland in Interest Rate Swap Market" business.
+The Bank promoted the construction of the account
+system of the separate accounting units in free trade
+zones, and supported the innovative development
+of cross-border RMB business in key areas such as
+Shanghai Lingang Special Area, Guangdong-Hong
+Kong-Macao Greater Bay Area and Hainan Free
+Trade Port. The Bank strengthened cooperation
+with payment institutions, cross-border e-commerce
+of
+The
+The Bank adopted a remuneration policy that is in
+line with corporate governance requirements, in
+combination with high-quality development targets,
+in adaptation to risk management system and
+talent development strategy, and well-matched with
+employees' value contribution, so as to advance
+the sound operation and high-quality development
+of the whole bank. The Bank's remuneration
+management policy was formulated and adjusted
+in strict accordance with applicable national
+regulations, regulatory requirements and corporate
+governance procedures. The Bank continuously
+optimized the remuneration resource allocation
+mechanism with value creation as the core,
+resolutely maintained a fair allocation concept with
+incentive commensurate with restraint, transmitted
+the Group's strategic objectives for business
+management, and allocated more remuneration
+resources to the grassroots employees, for the
+purpose of mobilizing and inspiring the business
+vitality of institutions at all tiers.
++
++
+Remuneration Policy
+Discussion and Analysis
+ICBC
+54
+The Bank developed quality training programs and
+conducted tiered and classified training sessions
+effectively. For management personnel, the Bank
+mainly carried out training programs aimed to
+improve the capabilities of credit division heads
+(dispatched credit risk officers) and newly appointed
+personal banking division heads and the operation
+management capability of heads of tier-one
+sub-branches to strengthen their strategic thinking
+and management competence. For professionals,
+the Bank advanced such training programs as
+"Practical Capability Training Camp for the Discipline
+Inspection Line", "Elite Program for Full-time
+Committee Members" and "Digital Elite Program"
+to further improve their professional competency
+and business capabilities. For front-line employees,
+the Bank implemented the online rotating training
+program
+for
+and
+outlet heads, coordinated
+strengthened the training for front-line employees
+such as customer mangers and customer service
+managers to continue to improve their job qualities
+and service capabilities. For society and customers,
+the Bank held training programs like "ICBC Training
+for Rural Revitalization" and "Advanced Financial
+Studies Class" among the cadres working at
+primary-level governmental organs of the counties
+that ICBC is paired up for assistance under the rural
+revitalization strategy, private enterprise customers,
+etc. to serve their business expansion and support
+the development of the real economy. Focusing on
+the growth of talents, the Bank held series programs
+including Young and Middle-aged Cadres Training,
+International Talents Training, ICBC Star Program
+New Employees Training, etc., and built a full-chain,
+systematic training system.
+actively fostered innovation culture. It held the
+3rd "Innovative ICBC", in which 74 domestic and
+overseas institutions recommended a total of 468
+projects and nearly 270,000 employees participated
+online. It created a good atmosphere across the Bank
+that encourages, supports and upholds innovation.
+Meanwhile, the Bank actively carried forward the
+enterprising spirit by putting on the "Enterprising
+ICBC" micro video show, which showcased ICBC
+employees' enterprising outlook and motivated them
+to make new achievements in the new era. The
+Bank promoted cultural communication and mutual
+learning, holding the Selection of "Advanced Units
+in Culture Building at ICBC Overseas Institutions"
+& Commendation of the 30th Anniversary of
+Internationalization. The Bank held the third cultural
+event "That's China, That's ICBC", which sent about
+20,000 cultural books to all 416 overseas institutions
+in 49 countries (regions).
++
+Bank's employee remuneration consisted
+basic remuneration, performance-based
+remuneration and welfare income. In particular, the
+basic remuneration depended on an employee's
+value contribution and ability to perform duties, and
+the performance-based remuneration was based on
+the overall situation of the Bank, the employee's
+institution or department, and the employee's
+personal performance measurement results.
+Meanwhile, the performance-based remuneration
+to the Senior Management and employees in
+positions that have a significant influence on risks
+was subject to a deferred payment and recourse
+deduction mechanism, so as to balance risks and
+incentives. For employees who violated regulations
+and disciplines or had abnormal exposure of risk
+losses within their duties, their performance-based
+remuneration for the corresponding period shall be
+deducted, withheld and recovered according to the
+severity of the violation. During the reporting period,
+according to relevant measures, the Bank deducted,
+The Bank took solid steps to promote the building
+of corporate culture to unite employees for
+better operation and development. The Bank
++
+Human Resources Management
+Human Resources Management,
+Employees and Institutions
+The Bank gave full play to the supporting role of
+the business continuity operation system. To ensure
+the continuity and stability of online business and
+customer services, the Bank provided customers
+with convenient, efficient and stable round-the-clock
+financial services through mobile banking, internet
+banking, WeChat official account and other
+online platforms. The Bank effectively ensured
+the services of key regional outlets, established a
+multi-node Head Office-branch backup system, and
+comprehensively completed the task of business
+continuity management and security in special
+periods such as the Winter Olympics and the power
+shortage period in summer.
+and account opening, and created 46 intelligent
+scenarios in total, with an annual processing volume
+of 280 million intelligent transactions in the field
+of business operation. The Bank promoted the
+intelligent transformation of self-service equipment,
+and enabled customers to handle 11 types of
+transactions with one submission, one signature
+and one review of new debit cards, significantly
+improving the efficiency and experience of customer
+services at outlets.
+Discussion and Analysis
+53
+Annual Report 2022
+Digital empowerment operation services were
+reinforced. The Bank actively participated in the
+construction of the national digital government
+system, and promoted the bank-government
+interconnection services such as electronic social
+security, tax and fee payment, smart medical
+insurance, credit report, and e-CNY at the smart
+ATMs of outlets. It created the "government service
+halls" by the side of customers, and added 1,603
+one-stop government service outlets in 2022. The
+Bank deepened the construction of the corporate
+digital operation and service system, strengthened
+the ecological co-building with government agencies,
+enterprises and public institutions, created a series
+of brands such as ICBC e-Confirmation Service,
+OFD Cloud Receipt, Cloud Reconciliation, etc., and
+promoted the green and low-carbon transformation
+of corporate customers through upgrading of
+banking services. The Bank improved the quality
+and efficiency of enterprise account services, refined
+the exclusive brand of "ICBC Account Link" of
+corporate account services, provided online and
+offline integrated convenient account opening
+services for small and micro start-ups, and launched
+the "Supply Chain 1+1", an off-site witness account
+opening services for industrial chain development
+enterprises. The Bank deepened the application
+of intelligent technology, built and applied on a
+large scale of digital employees, further realized
+the intelligent processing of complex business such
+as remote authorization, cross-border payment
+benefit of the people. Relying on 15,500 "ICBC
+Sharing Stations", the Bank carried out nearly 120
+thousand "care" series of theme activities, and
+I gave full play to the scale advantages of channel
+resources. It continued to deepen financial services
+for the benefit of the people, enriched the functions
+of relevant services, and provided customers with
+considerate "financial + pan-financial" services. The
+Bank carried out the campaign of customer service
+improvement season with the theme of "staying true
+to the original aspiration and satisfying the people".
+It strove to consolidate the foundation of service
+management of outlets, enhance customer service
+management, and improve service experience and
+service value from the perspectives of beautifying
+outlets, strengthening services for special groups,
+and devoting to publicity and education of consumer
+protection knowledge. The Bank carried out the
+Management Year for Complaints from Customers,
+and continued to promote the solution of hot issues
+based on the feedback of customers and voice
+of employees, so as to improve customer service
+experience.
+Solid steps were taken to advance the construction
+of a "bank satisfactory to the people". The "ICBC
+Outlets System" platform was established, which
+fully integrated the outlet system, reduced the
+manual operations of outlets, and improved
+the efficiency of business processing. The Bank
+deepened the construction of "ICBC Sharing
+Station+" public welfare service system for the
+The Bank advanced the construction of rural inclusive
+financial service points as scheduled. The Bank
+established asset-light and online inclusive financial
+service points that integrated scenario ecosystem
+in rural areas. It had set up a total of 3,756
+service points in 1,470 counties and 2,543 towns.
+Focusing on rural Party building, government affairs,
+agricultural product production and marketing, the
+Bank explored ecological co-building with county
+and township-level governments, village committees,
+large leading enterprises, local enterprises,
+self-employed businesses and other partners, and
+orderly promoted services in the countryside.
+With the focus on high-quality development of
+operation and areas vital to market competition,
+the Bank assigned more human resources to
+strategic areas and improved operation through the
+transformation and upgrading of human resources.
+The Bank focused on building four kinds of talented
+workforce, namely, leading talents, innovative
+talents, professional talents and young talents.
+Centering on key areas such as emerging business,
+international business, risk control and security,
+sci-tech data, etc., the Bank cultivated, introduced
+and made good use of talents in all respects, and put
+forth effort to build a high-end financial workforce
+that meets the requirements of financial work in
+the New Era. In addition, the Bank accelerated
+digital transformation, deepened technology-driven
+empowerment, optimized institutional function
+setting, enriched the frontline marketing service
+personnel team, and promoted financial service
+resources to lower tiers.
+The Bank promoted the optimization of outlet layout,
+efficiency improvement, experience improvement
+and model upgrading. The Bank actively pushed
+forward the optimization and adjustment of outlet
+layout, and built and relocated 587 outlets in 2022,
+of which more than 60% were located in China's
+key areas, 91 outlets were newly established in
+central cities, emerging markets and other areas
+with potential, 65 outlets were established in
+counties and towns, including some counties of
+Guizhou, Sichuan and Yunnan where the Bank
+had no outlets previously. The coverage of outlets
+in counties steadily increased to 86.2%. The Bank
+integrated the philosophy of green environmental
+protection and low-carbon energy saving into the
+construction of outlets, decorated 1,246 outlets,
+and continuously improved the hardware facilities
+and services of outlets. The Bank upgraded the
+outlet construction standards adapted to the elderly,
+and increased the service facilities and convenience
+service equipment suitable for the elderly, focusing
+on the building of thousands of core elderly
+service outlets. It well conducted the upgrading of
+machinery and equipment suitable for the elderly,
+and enhanced the supply of services for the elderly.
+At the end of 2022, the Bank had 15,639 outlets,
+22,636 self-service banks, 75,889 intelligent devices
+and 60,204 automatic teller machines ("ATMs"). The
+transaction volume of ATMs reached RMB4,608.6
+billion in the year.
+withheld or recovered payment of corresponding
+performance-based remuneration to employees who
+were subject to disciplinary action or other treatment
+due to violation of regulations and disciplines or
+abnormal exposure of risk losses within their duties.
+The Bank's 2022 remuneration plan was prepared
+and implemented as per the internal decision-making
+process. The execution of total annual salaries was
+reported to the authority for filing according to
+national regulations. During the reporting period, the
+Bank's Senior Management fulfilled the indicators
+concerning economic, risk and social responsibilities
+well, and final results will be determined after
+deliberation by the Board of Directors.
+overseas
+21.4%
+41-50 years old
+27.2%
+31-40 years old
+22.4%
+Below 30 years old
+50.3%
+49.7%
+Male
+Female
+Structure of employee gender
+6.2%
+Below associate
+20.3%
+Basic Information on Employees and
+Institutions
+Associate
+Bachelor
+10.5%
+Master
+0.2%
+Doctorate
+Structure of employee age
+Structure of employee educational background
+Discussion and Analysis
+55
+Annual Report 2022
+As at the end of 2022, the Bank had a total of
+16,456 institutions. Among them, there were
+16,040 domestic institutions and 416 overseas ones.
+Domestic institutions included the Head Office, 36
+tier-one branches and branches directly managed by
+the Head Office, 458 branches in capital cities and
+tier-two branches, 15,386 outlets, 26 institutions
+directly managed by the Head Office and their
+branches, and 133 subsidiaries and their branches.
+As at the end of 2022, the Bank had a total of
+427,587 employees, including 404,090 employees
+in the Head Office and domestic branches, 7,619
+employees in domestic subsidiaries, and 15,878
+employees in
+institutions. The Bank's
+maintained
+employee gender ratio
+generally
+balanced and there was no significant change from
+the end of last year. In future, the Bank will continue
+to pay attention to the employee gender structure,
+strengthen tracking and monitoring in areas such as
+personnel exit and recruitment, and take effective
+measures to maintain a balanced and stable gender
+ratio.
+62.8%
+Above 51 years old
+Outlet Building and Service Improvement
+99
+Discussion and Analysis
++
+multi-dimensional special incentive mechanism
+for digital transformation to reward key talents of
+key projects and those who made key technology
+breakthroughs. It provided more suitable incentives
+for outstanding technological innovation talents, and
+fully unleashed the innovation vitality of talents.
+The Bank stepped up efforts to cultivate sci-tech
+talents and laid a solid foundation of innovation
+talents. The Bank further strengthened the
+introduction of sci-tech talents, carried out special
+social recruitment of sci-tech and data talents for
+the first time, and conducted cross-department joint
+cultivation of digital elites and centralized cultivation
+of sci-tech elites. The Bank deepened the flow of
+sci-tech and business talents at different levels,
+selected nearly 1,000 sci-tech talents for business
+exchange and grass-roots job training, and promoted
+the penetration and integration of the sci-tech gene
+into business management through talent flow.
+Internet Finance
+The Bank accelerated the construction of digital finance
+service system, promoted the innovation of online platforms
+as a whole, and cultivated new drives of digital operation
+to boost the digital development of economy and society.
+In 2022, digital business accounted for 98.9% of total.
+The Bank won a number of major awards for internet
+finance, including the "Best Digital Consumer Bank in Asia
+Pacific", the "Best Digital Consumer Bank in China" and
+the "Best Digital Corporate Bank in China" awarded by
+Global Finance and the "Best Mobile Banking Technology
+Implementation in China" by The Asian Banker.
+Building A New Pattern of "Own + Open"
+Online Platform Construction
++
+The Bank made every effort to develop the "Best
+Mobile Banking". It launched Personal Mobile
+Banking 8.0, reshaped 18 categories of services,
+improved more than 500 functions, and brought
+customers new experience of faster, stronger and
+more interesting digital finance. The Bank applied
+such technologies as face scanning and gravity
+sensing, innovated global green pass, carbon
+account book, digital collection and other new
+functions, and further enhanced digital intelligence.
+The Bank launched the special columns and editions
+of wealth community, new citizens, personal pension
+and youth edition, and further strengthened its
+wealth companionship services. The Bank innovated
+the family trust account service, and took the lead in
+the industry to complete the aging and barrier-free
++
++
+transformation of internet banking. It was among
+those which first obtained the "information
+barrier-free" logo from the Ministry of Industry and
+Information Technology, further improved its aging
+services. At the end of 2022, the Bank had 516
+million personal mobile banking customers, with
+more than 174 million monthly active mobile users,
+ranking first in the industry in terms of customer
+base and activity.
+49
+The Bank built a core business and service platform
+of corporate digital finance. The Bank continued
+to consolidate the market advantages of corporate
+internet banking and mobile banking to cater for the
+needs of corporate customers for online account,
+payment, investment and financing. The Bank
+assisted in the expansion and quality improvement
+of inclusive finance, deployed credit, mortgage,
+supply chain and other inclusive scenarios online
+in corporate internet banking and mobile banking,
+and continued to iterate the exclusive version of
+inclusive corporate mobile banking. Focusing on the
+field of "Specialization, Refinement, Differentiation
+and Innovation", the Bank accurately matched
+differentiated online financing services with
+corporate internet banking and mobile banking, and
+systematically supported the transformation and
+upgrading of modern manufacturing and strategic
+emerging industries. At the end of 2022, the Bank
+had 13.56 million corporate internet banking
+customers, 5.14 million monthly active corporate
+internet banking customers and 2.13 million monthly
+active corporate mobile banking customers, leading
+the industry in terms of customer size and activity.
+The Bank empowered GBC+ customer ecological
+expansion with open finance. It built a
+platform-based financial service system to boost
+digital transformation of governments and industries.
+The Bank accelerated the market expansion of "ICBC
+Ju Fu Tong" platform, innovated the "Education
+Cloud 2.0" smart campus construction plan and
+sped up the expansion of the basic education
+market. It applied the "Industry and Finance Cloud"
+platform to the digital transformation of production,
+supply and marketing of traditional enterprises.
+The Bank accelerated the deployment of financial
+service channels in counties and rural areas. "ICBC
+Xingnongtong" APP, an innovative financial product
+of the Bank, was launched to help improve the
+rural financial service system and facilitate rural
+revitalization. The Bank continued to enrich product
+capabilities and ecological scenarios, launched 12
+basic financial services such as card application, loan
+and payment, and deployed the exclusive channel of
+ICBC
+Discussion and Analysis
+ICBC for the credit express services of the Ministry
+of Agriculture and Rural Affairs. It integrated
+the "Digital Villages" rural government platform
+and the "Agricultural Matchmaking" agricultural
+sales platform, and introduced the "Farmers'
+Classroom" and other agriculture-related production
+and life scenarios. By the end of 2022, "ICBC
+Xingnongtong" APP service had covered more than
+1,800 counties.
+Cultivating New Drives of Remote Services,
+Digital Operation and Digital Risk Control
++
++
+The Bank accelerated the upgrading of remote
+banking services. The Bank reinforced intelligent
+services, human-machine collaboration and
+cross-channel collaboration, enhanced the
+capabilities of online problem solving, business
+handling and complaint handling, and created
+comprehensive remote intelligent services. It
+established the most complete new media matrix in
+the industry, and expanded new channel contacts.
+The Bank's remote banking center has made it the
+first institution in the industry to integrate online
+omni-channel access and operation as well as
+remote intelligent services. The Bank accelerated
+the intelligent transformation of remote services,
+widely used new technologies such as multi-round
+dialogs, knowledge graph, RPA robot scenarios,
+and innovated the "answer before asking" service
+prediction model to improve service efficiency. In
+2022, the intelligent customer service-Gino was
+awarded the "Best Chatbot Application in China" by
+The Asian Banker. Through various forms of remote
+services such as "On-site Customer Service + Home
+Agent Customer Service", "intelligent + self-service
++ manual", and "voice + text + audio and video",
+the Bank ensured the continuous stability of remote
+services. In 2022, the Bank provided remote banking
+services for more than 1.1 billion customers, with
+nearly 2 billion transactions.
+The Bank established an online customer operation
+system and formed an intensive and refined online
+operation mode centered on customers. The Bank
+improved the full-journey services for customers,
+and realized the intelligent and online promotion
+of financial products to better meet customers'
+financial service needs. The Bank coordinated the
+basic operation of online customers, and developed
+"Xianghui Thursday", "Huiju Weekend" and other
+campaign brands, with more than 200 million
+participants in each campaign month. The Bank
+advanced the building of "Zhike", an enterprise-level
+digital customer operation platform, realized the
+one-point access to all strategies, and made entire
+online scenarios available. The Bank deepened the
+building of a collaborative online customer operation
+mechanism, and promoted the online access for all
+customers.
+Digital risk prevention and control was strengthened.
+The Bank kept improving the in-process risk
+control system for online financial transactions
+and established a risk transaction identification
+mechanism of "intelligent model + expert rules +
+various lists". In 2022, the in-process risk control
+system for online financial transactions successfully
+blocked more than 200,000 fraudulent transactions,
+avoiding customer losses of over RMB1 billion.
+Accelerating Online and Offline Integrated
+Development
++
+50
+Discussion and Analysis
+Annual Report 2022
+Organizational structure kept improving. Centering
+on the needs of the national strategy of regional
+coordinated development, the Bank established
+eight digital transformation demonstration banks,
+and further improved and extended the significance
+of digital transformation and digital finance through
+practice. It explored effective ways of in-depth
+integration of business, data and technology,
+promoted financial digital transformation in all areas
+by pilot projects in certain areas, and better met
+the development needs of key regions. The Bank
+developed a new operation layout, established an
+operation center of data middle-office, and set up
+a FinTech ecosystem expansion team and promoted
+business ecosystem expansion through technological
+cooperation.
+ICBC
+52
+Exclusive services for customers made the digital space more diversified. The Bank strengthened the concept of
+"customers exclusive", and met the diversified needs of customer groups through multi-level services. For the elderly
+customers, it launched "Happy Life" version 2.0, completed the aging and barrier-free transformation of 28 functions and
+141 common pages, and was among those which first obtained the "information barrier-free" logo from the Ministry
+of Industry and Information Technology. It launched a family trust account to establish the account trust relationship
+between parents and children based on family ties. For Generation Z, the youth version was launched to create a dream
+space and establish emotional connection in an online, highly interactive, green, low-carbon and fun manner. For new
+citizens, the Bank created a new citizen column, which gathered various quality service resources to provide a package
+of services such as medical treatment and medicine purchase with medical insurance certificates, social security card
+application and replacement and treatment qualification certification, and help city builders live a new life.
+"Lighter" services made financial experience simpler. Aiming at lighter system, simpler interaction, more refined
+functions and more flexible services, the Bank upgraded seven categories, 38 columns and over 100 common functions,
+improving the core high-frequency transaction response efficiency by more than 20%. The Bank launched a new carbon
+account book, identified the green behavior of users in the financial scenarios, introduced professional carbon emission
+measurement rules to measure carbon emission reduction, and recorded individual low carbon footprint. The Bank
+launched a digital collection library, where customers could receive, view and use the exquisite digital collections issued
+by the Bank. The digital collections were also used in head portraits to create a unique digital image. In the meantime,
+the "face scanning" technology makes face recognition more accurate and efficient. The "gravity sensing" technology
+enables customers to easily and safely exit mobile banking by turning over their mobile phones.
+A new wealth community made wealth companionship services stronger. Through the "Wealth" open mechanism,
+the Bank introduced well-known investment institutions in the fields of fund and wealth management to recommend
+popular products in the market to customers. The Bank selected quality investment research reports from senior expert
+teams to deliver the latest market information and industry analysis. The Bank launched a full-journey investment
+companion before, during and after investment to help customers make better investment decisions. The Bank provided
+manager services integrating products, knowledge and information, formulated customized wealth plans for different
+customer groups, and helped everyone realize their wealth dreams.
+A new "Discovery" tab further enhanced intelligent capability. The Bank was the first in the banking industry to
+launch the "Discovery" tab. With an insight into big data from six dimensions such as customer portraits and behavior
+preferences, the tabs accurately display the products, functions, scenarios, activities and information specific to customers,
+and achieve customization for every customer. "Zhike", an enterprise-level digital operation platform, was launched to
+achieve the instant response to customer behavior and needs by analyzing 17,000 pages and 30 billion pieces of big data
+per day. Through the close cooperation between the Intelligent Brain and the full-journey engine, hundreds of millions
+of journey programs were outputted with billions of calculations every year, providing customers with highly interactive,
+full-journey and companionship services.
+工行手机银行8.0 重新定义手机银行
+发现你的财富之美
+8.0
+ICBC 中国工商银行
+On 18 November 2022, the Bank officially launched Mobile Banking 8.0. With the theme of "Wealth Discovery",
+Mobile Banking 8.0 reshaped 18 categories of services, and improved more than 500 functions. With innovations of
+smart discovery, wealth management, simple experience and customer group exclusiveness, it brought customers new
+experience of faster, stronger and more interesting digital finance, and achieved intergenerational leapfrog development.
+The release of version 8.0 further won market recognition and enabled the Bank to take the lead in the banking industry
+to have more than 500 million mobile banking customers.
+ICBC Launched Mobile Banking 8.0
+The Bank closely followed the guidance of national
+sci-tech policies and improved the incentive system
+for sci-tech innovation. The Bank established a
+во
+51
+Annual Report 2022
+"
+Discussion and Analysis
++
++
+Digital marketing capability was strengthened.
+The Bank took full advantage of Al and big data
+and upgraded the "Intelligent Brain" of marketing
+throughout the front, middle and back offices to
+meet the different needs of all customers. The Bank
+established a fully connected credit card marketing
+service system to transmit data between marketing
+resources, marketing channels and marketing
+nodes in the market, realized the digital marketing
+and intelligent service of credit card products, and
+enabled the marketing staff to actively remind and
+serve target customers. The Bank innovated the
+corporate banking marketing management system,
+established the differentiated smart marketing
+system and the special version of mobile smart
+marketing, carried out digital marketing for various
+corporate customer groups, and enriched digital
+services such as GBC fund retention and corporate
+boutique smart marketing.
+The Bank enhanced digital risk control and advanced
+the building of "ICBC e" series of risk control
+systems. Based on "ICBC e Security", the first
+financial risk information service product in the
+banking industry, and hundreds of risk categories
+and more than 3 billion data, the Bank provided
+multi-channel service modes such as API, APP
+and web page using big data and information
+technology. It served nearly 100,000 domestic
+enterprise customers and over 300 customers in
+the banking industry. "ICBC e Prevention" credit
+risk monitoring system provided comprehensive
+services for the Group's credit risk prevention
+and control, and achieved post-lending intelligent
+monitoring of infrastructure, green energy and other
+fields relying on big data and industrial remote
+sensing identification technology. The Bank built
+an enterprise-level anti-fraud platform "ICBC e
+Shield" to enhance the capabilities of managing
+and monitoring enterprise-wide risk, market risk and
+personal customer risk. It supports round-the-clock
+real-time blocking of transaction risk. The Bank
+established the brand of "ICBC e Control” to meet
+the needs of the Group's business scenarios such
+as internal control and compliance management,
+supervision, inspection and evaluation, operational
+risk of case prevention and anti-money laundering
+management, and provide strong system support
+for the Group's internal control and compliance
+management.
+A digital operation system was built. The Bank
+utilized OCR technology to realize the intelligent
+identification of business voucher elements such as
+cheques and power of attorney, with an average
+monthly processing volume of more than 17 million
+transactions. It utilized voice recognition, voiceprint
+recognition, voice synthesis and other technologies
+to build complete voice recognition and feedback
+capabilities, which were widely used in various
+business scenarios such as intelligent customer
+service and intelligent marketing. It covered 108
+channels and 2,400 business scenarios such as
+mobile banking and telephone banking, as well as
+multiple business fields including personal banking
+and inclusive finance. The volume of intelligent
+service sessions reached 620 million. The Bank
+accelerated the application of the "technology in
+lieu of man" scenario, releasing workload of more
+than 18,000 persons in the year. It was the first in
+the industry to launch a digital employee operation
+management platform, and innovatively launched
+digital employees such as Gong Xiao Ban, Gong Xiao
+Xun and Gino (Gong Xiao Zhi).
+Continuously Improving Technical
+Innovation System
+The Bank implemented the national decisions on the
+reform of sci-tech system and mechanism and the building
+of sci-tech talent team, deepened the reform of FinTech
+system, and consolidated the foundation of scientific and
+technological innovation talents. It promote penetration
+of the sci-tech gene, continued to improve financial
+innovation response efficiency and supply capability, and
+unleashed the vitality of the Bank's FinTech innovation.
+The Bank invested RMB26,224 million in FinTech in 2022,
+and it had 36 thousand FinTech personnel, accounting for
+8.3% of all employees across the Bank. It had more than
+7,700 data analysts.
+Discussion and Analysis
+29.0%
+The Bank gave play to the role of remote banking
+in online and offline connection. It strengthened
+the connection between remote banking and
+mobile banking and intelligent machines and tools
+at outlets, and continued to enrich "screen to
+screen non-contact consulting, auditing and other
+services. In 2022, the business volume of "screen to
+screen" non-contact services reached 5.12 million
+accumulatively.
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES
+Eliminated and unallocated
+5.5
+23,497
+3.3
+549
+11.0
+4,365,670
+Overseas and other
+9.4
+40,243
+9.9
+1,626
+(5,933,373)
+3.7
+Northeastern China
+20.2
+86,503
+22.1
+3,634
+13.1
+5,174,047
+Western China
+18.9
+80,850
+20.9
+3,438
+1,469,644
+11.1
+(15.0)
+Total
+Structure of employee specialization
+57
+Annual Report 2022
+Cross-border RMB business: The Bank promoted
+the construction of cross-border RMB product
+system and multi-scenario services, fostered offshore
+RMB market, innovated offshore RMB investment
+and financing products. The Bank's branches in
+Global custody business: The Bank has further
+reinforced and expanded its position as a market
+leader in the cross-border custody business. It
+maintained the lead in the industry in terms of the
+number of global custody and depositary clients.
+Its global custody business exceeded RMB1 trillion,
+and it has further extended its reach by successfully
+launching the first depository receipt business under
+the interconnection mechanism of domestic and
+overseas securities exchanges.
+Global asset management services: The Bank further
+advanced the steady development of its foreign
+exchange and cross-border wealth management
+business and promoted overseas investors'
+investment in the Chinese bond market. "ICBC
+CSOP FTSE Chinese Government Bond Index ETF",
+for which ICBC Wealth Management and ICBCAMG
+acted as the investment advisor, had an asset
+scale of RMB7.3 billion. "ICBC CSOP FTSE Chinese
+Government and Policy Bank Bond Index ETF", for
+which ICBCAMG acted as the investment advisor,
+had an asset scale of RMB5.4 billion, and became
+the first Chinese government bond ETF approved by
+the Mandatory Provident Fund Schemes Authority
+(MPFA) of Hong Kong SAR, China.
+Financial market business: The Bank underwrote 18
+panda bonds, raising funds of RMB37.2 billion in
+total. It established the interbank bond and foreign
+exchange market business partnership with overseas
+institutional investors from more than 60 countries
+and regions. The Bank's foreign exchange trading
+capacity improved further to fully support our
+customers. Nine overseas branches including Sydney,
+Seoul, Luxembourg and Singapore have successfully
+entered into interest rate swaps linked with Risk Free
+Rates (RFRS), alternative rates of IBORS. The Bank
+maintained market leadership in the scale of offshore
+RMB market making, and its offshore RMB exchange
+rate trading capability and market influence further
+continued to improve. The Bank was among the
+first banks in the domestic market to conduct
+foreign currency interbank lending matchmaking
+transaction and was also among the first to conclude
+the tri-party repo transaction with green bonds as
+collateral.
+rolled out the payroll service that allows overseas
+enterprises to pay salaries to domestic accounts in
+RMB, the first of its kind in the industry.
+Internet finance service: Through internet banking,
+mobile banking and other online channels, the
+Bank offered services across 46 countries and
+regions in 15 languages. A full range of financial
+services, including account inquiry, transfer and
+remittance, investment and wealth management,
+payroll payment agency service, and trade finance
+were available to customers. Focusing on key
+products, scenarios and regions, the Bank promoted
+online business innovation and characteristic
+development of overseas institutions and enhanced
+the basic service capabilities of overseas corporate
+online banking platforms. The Bank made a major
+breakthrough in cross-border payroll scenarios. It
+Personal banking: The Bank strengthened
+sophisticated and classified management of retail
+business and gradually built a level-by-level,
+category-by-category customer management system.
+ICBC (Thai) launched Kylin Card, Student Card
+and Digital Card for its three key customer groups,
+namely, payroll customers, student customers and
+new-generation customers. Vientiane Branch rolled
+out a brand new non-contact debit card. ICBC (Asia)
+obtained the qualification to provide "Greater Bay
+Area Account Service" in Hong Kong. The Bank
+accelerated digital transformation and development
+of overseas bank card business, facilitated
+interconnection of domestic and overseas mobile
+payment, and expanded the coverage of the "ICBC e
+Payment" mobile payment platform among overseas
+institutions. ICBC (Malaysia) and ICBC (Canada)
+launched local and cross-border QR code payment
+functions. The Bank also accelerated global layout of
+offshore family business. ICBC (Asia) and Singapore
+Branch launched family trust service, meeting the
+needs of private banking customers in family wealth
+inheritance.
+Global", foreign enterprises "Bringing In" and global
+trade companies. The number of outbound merger
+and acquisition of Chinese-funded enterprises
+continued to rank first in Refinitiv's list. The Bank
+was among market leaders in Hong Kong IPO
+underwriting and sponsorship, and the underwriting
+of overseas bonds and offshore China bonds. The
+Bank actively provided convenient services to foreign
+trade and foreign-funded companies by continuing
+to optimize the financial services on the "Single
+Window" platform such as international settlement
+and trade financing. The Bank developed the
+innovative product "ICBC Global Pay", building a
+self-reliant and controllable global direct payment
+platform. It covers 16 countries and regions, and
+provides important financial guarantee for improving
+domestic and international circulations.
+Discussion and Analysis
+assets
++
+56
+Corporate banking: The Bank, by leveraging its
+linked advantage of "global response through
+one-point access", provided "one-stop" financial
+services in local and foreign currencies for key
+customers such as Chinese enterprises "Going
+Bank for Belt and Road", the "Outstanding Sustainable
+Financing in Emerging Markets (Asia-Pacific)" by the
+Global Finance and the "Project Finance House, China" by
+The Asset.
+The Bank actively gave play to its advantage in global
+operation, deeply implemented the Preferred Bank
+Strategy for Foreign Exchange Business, refined the
+integrated operation system combining domestic and
+overseas operations as well as local and foreign currencies,
+supported the high-quality development of the Belt and
+Road Initiative, and served China's high-level opening up
+to the outside world. The Bank was awarded the "Best
+Internationalized Operation
+Note: Overseas and other assets include investments in associates and joint ventures.
+100.0
+427,587
+100.0
+16,456
+100.0
+39,609,657
+ICBC
+4,396,769
+Discussion and Analysis
+15.6
+millions)
+% of total
+assets
+Number of
+institutions
+% of total
+Number of
+% of total
+institutions
+Item
+employees
+Head Office
+8,069,477
+20.4
+27
+0.2
+20,415
+4.8
+employees
+Yangtze River Delta
+Assets
+(in RMB
+1.1%
+Central China
+Personal banking
+41.5%
+Operation and comprehensive 15.8%
+support
+⚫ Corporate banking
+13.2%
+2.5%
+Operation management
+FinTech
+8.3%
+Risk and compliance
+management
+Emerging business
+2.0%
+Non-banking business
+⚫ Other
+9.2%
+9,418,551
+6.4%
+12.0
+1,973
+15.3
+6,065,352
+66,918
+Bohai Rim
+11.2
+2,527
+15.3
+23.8
+61,382
+14.4
+Pearl River Delta
+47,779
+6,583,520
+16.6
+16.3
+2,682
+paid-in capital
+3,307.53
+TRY5,368 million
+Commercial banking
+184.81
+357.59
+2,970.24
+RUB10,810 million
+Commercial banking
+Bank ICBC (joint stock company)
+ICBC Turkey Bank Anonim Şirketi
+ICBC Austria Bank GmbH
+313.45
+1,678.32
+166.03
+(3.79)
+Commercial banking
+EUR200 million
+22.11
+296.33
+2,056.18
+CAD208 million
+Commercial banking
+Industrial and Commercial Bank of
+China (Canada)
+(7.66)
+73.10
+23,437.44
+22,628.37
+USD50 million
+18.67
+423.47
+2,885.79
+USD369 million
+Commercial banking
+Industrial and Commercial Bank of
+China (USA) NA
+Industrial and Commercial Bank of
+China Financial Services LLC
+1.27
+206.71
+972.24
+Securities clearing,
+securities margin
+trading
+USD1,083 million
+China (Europe) S.A.
+11.44
+Annual Report 2022
+63
+Discussion and Analysis
+At 31 December 2022
+2022
+Issued share
+Total assets
+10.60
+millions)
+capital/
+(in USD
+(in USD
+Net profit
+(in USD
+Institution
+Principal business
+Net assets
+Banking
+189.07
+NZD234 million
+468.13
+1,537.20
+USD200 million
+Commercial banking
+ICBC Standard Bank PLC
+ICBC (London) PLC
+(13.40)
+1,415.76
+544.62
+EUR437 million
+Commercial banking
+Industrial and Commercial Bank of
+millions)
+millions)
+Industrial and Commercial Bank of
+Commercial banking
+8,017.13
+Commercial banking
+Institution
+292.46
+Wealth management
+ICBC Wealth Management Co., Ltd.
+investment
+41.07
+426.49
+1,801.86
+270
+160
+Financial asset
+(22.87)
+163.52
+2,807.23
+125.05
+Insurance
+ICBC-AXA Assurance Co., Ltd.
+3.23
+ICBC Financial Asset Investment Co., Ltd.
+419.86
+199.60
+12.36
+Industrial and Commercial Bank of
+China (New Zealand) Limited
+80 Country Risk
+79 Reputational Risk
+77 Operational Risk
+75 Liquidity Risk
+74 Interest Rate Risk in the
+Banking Book
+72 Market Risk
+189.10
+66 Credit Risk
+Discussion and Analysis
+RISK MANAGEMENT
+ICBC
+64
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank continued to hold 324,963,464 shares or 19.36% of Standard
+Bank and to be its single largest shareholder. Based on mutual benefit and win-win cooperation, the two sides furthered
+their cooperation in equity cooperation, customer expansion, project financing, product innovation, risk management,
+FinTech and staff exchange, etc. At the end of 2022, Standard Bank recorded total assets of ZAR2,883,841 million and net
+assets of ZAR259,956 million. It generated a net profit of ZAR39,383 million during the year.
+STANDARD BANK GROUP LIMITED
+Major Equity Participation Company
+65 Enterprise-wide Risk
+Management System
+2,943.24
+180
+26.78
+949.54
+USD120 million
+ARS55,446 million
+Commercial banking
+Industrial and Commercial Bank of
+Commercial banking
+ICBC PERU BANK
+China (Brasil) S.A.
+114.98
+(2.09)
+399.97
+BRL202 million
+Commercial banking
+Industrial and Commercial Bank of
+China Mexico S.A.
+7.61
+43.37
+35.02
+13.41
+6,592.73
+984.01
+167.88
+203.22
+2
+Fund management
+Leasing
+Net profit
+Net assets
+Total assets
+Issued share
+capital/
+paid-in capital
+Principal business
+ICBC Financial Leasing Co., Ltd.
+ICBC Credit Suisse Asset Management Co., Ltd.
+2022
+At 31 December 2022
+In RMB100 millions
+Major Domestic Subsidiaries
+China (Argentina) S.A.
+90.45
+MXN1,597 million
+27.75
+Publicly
+627.73
+offered
+Classified by
+96.9
+1,707,212
+1,190
+(%)
+Amount
+fundraising
+Percentage
+tranches Amount
+493,558
+596
+185,754
+451
+1,975,907
+1,335
+Enterprise-wide Risk Management System
+Number of
+tranches
+Amount
+Privately
+45,897
+474 194,032
+50 23,601
+1,714,603
+307,201
+1,411
+99
+Corporate
+customer
+Personal
+Classified by
+175
+offered
+3.1
+55,076
+173
+22,626
+75
+31,879
+73
+method
+tranches
+Amount
+tranches
+ICBC Leasing is mainly engaged in financial leasing of
+large-scale equipment in key areas such as aviation,
+shipping, energy and power, rail transit, equipment
+manufacturing and areas requiring "specialization,
+refinement, differentiation and innovation". It provides a
+number of financial and industrial services such as transfer
+of leasing assets, asset trading and asset management.
++
+In aviation business, ICBC Leasing actively optimized
+its business layout, steadily increased the proportion
+of domestic business, actively supported the
+implementation of the large homemade aircraft
+strategy, and consolidated its leading position in
+strategic cooperation with COMAC. Seizing the
+opportunities presented by recovery of quality
+markets overseas, ICBC Leasing actively marketed
+and expanded business layout and completed its
+first used passenger-to-freighter aircraft conversion
+project and the first operating lease project of
+aircraft engines among domestic financial leasing
+peers.
+In maritime business, ICBC Leasing actively
+responded to the strategy of strengthening maritime
+power and a transportation power and seized the
+market opportunity when global industrial chains and
+supply chains were being reshaped. On the basis of
+continuing to consolidate its strength in cooperation
+with container liners, large bulk transporters and
+large cruise ship owners, ICBC Leasing further
+increased the scale of liquefied natural gas carrier
+business and actively expanded the shipping market
+of exported Chinese automobiles. ICBC Leasing paid
+close attention to the development of new areas of
+maritime economy and made sound progress in the
+expansion of underwater construction equipment
+areas such as cable ships and the offshore wind
+power installation maintenance market.
+In domestic comprehensive leasing business,
+ICBC Leasing continued to intensify support to
+key innovation and transformation areas such
+as new infrastructure, high-end manufacturing,
+green and low-carbon development, culture &
+tourism, "specialization, refinement, differentiation
+and innovation", etc. to help maintain stable
+macroeconomic performance.
+ICBC-AXA
+ICBC-AXA operated various insurance businesses such as
+life insurance, health insurance and accident insurance,
+as well as reinsurance of the aforesaid businesses,
+business permitted by national laws and regulations to use
+insurance funds and other businesses approved by CBIRC.
+ICBC Leasing
+ICBC-AXA supported the implementation of the
+national elderly care strategy and actively seized
+the development opportunities of the elderly care
+industry. Under the "ICBC Elderly Care" overall
+brand framework, with annuity products at the core
+and elderly care services as the support, ICBC-AXA
+launched an elderly care sub-brand and built a
+full-process integrated elderly care service model.
+Meanwhile, it refined the diversified product line,
+completed the upgrade of critical illness insurance,
+and promoted the R&D and launch of whole life
+insurance products in an orderly manner. Based
+on the Group's business needs and new regulatory
+requirements, it rebuilt the accident insurance
+product system and provided quality insurance and
+service to new urban residents.
+In 2022, ICBC-AXA won "Extraordinary Insurance
+Company of the Year" of Jiemian News of Shanghai
+United Media Group, "Most Competitive Financial
+Institution of the Year" on the top financial list of
+The Paper, etc.
+Annual Report 2022
+61
+Discussion and Analysis
+ICBC International
+ICBC International is a wholly owned subsidiary of the
+Bank in Hong Kong SAR, China. It is mainly engaged in
+sponsorship and underwriting for listing, underwriting for
+bond issuance, financial consulting, direct investment, sales
+and trading, asset management, market research, etc. and
+provides all-round cross-border integrated financial services
+to corporate and personal customers.
+ICBC International continued to consolidate and
+strengthen its four major product lines, namely,
+corporate financing, investment, sales and trading,
+and asset management. It remained in the top
+league of the market in terms of shares and bond
+underwriting. It set a record in the underwriting of
+green bonds. ICBC International participated in the
+IPO of China Tourism Group Duty Free Corporation
+Ltd., Sunshine Insurance Group Company Limited
+and Onewo Inc. and also in the issuance of Hainan
+Provincial Government's offshore RMB bonds, Saudi
+Arabia Public Investment Fund's green sovereign US
+dollar bonds, etc. It vigorously expanded investment
+and financing presence in key industries such as
+infrastructure, advanced manufacturing, sci-tech
+innovation, modern agriculture, healthcare and
+pharmaceuticals. Its sales and trading product and
+service system is continuously improving and its
+asset management business is further optimized
+and restructured. In 2022, ICBC International was
+awarded "Best Bond Adviser - HKSAR" by The Asset
+for the fourth year straight.
+Upholding the customer-centric philosophy,
+ICBC-AXA provided proactive care service of
+customers' rights and interests and increased the
+coverage and depth of customer services. It built
+a digital service platform, which improved both
+customer experience and service efficiency. It
+promoted transformation to intelligent operation,
+upgraded operating service capability, optimized
+the claim payment procedures, and continued to
+improve the time effectiveness of claim and security.
+ICBC-AXA also supported inclusive insurance projects
+and actively participated in the "Huimin Insurance"
+business in many cities.
+Discussion and Analysis
+ICBC
+60
+Item
+Matured products
+Number of
+Number of
+Products issued
+At 31 December 2021
+Number of
+In RMB millions, except for tranches and percentages
+At 31 December 2022
+WEALTH MANAGEMENT PRODUCTS OF ICBC WEALTH MANAGEMENT THAT WERE ISSUED, MATURED, AND EXISTED
+DURING THE REPORTING PERIOD
+Discussion and Analysis
+ICBC
+62
+of
+ICBC Wealth Management actively integrated into
+the building of the Group wealth management
+community, promoted optimization of the product
+structure and development of quality products,
+intensified layout of stable wealth management
+products with low fluctuations, and developed and
+launched themed wealth management products
+such as "specialization, refinement, differentiation
+and innovation" area wealth management products
+and ESG wealth management products. ICBC
+Wealth Management built a well-established
+elderly care wealth management brand. It was
+among the first companies approved to open
+personal pension wealth management business,
+supporting the building of the multi-tiered elderly
+care finance system of the third pillar. It continued
+to improve asset allocation capability and diversified
+strategic investment capability, refined diversified,
+balanced asset allocation strategies and increased
+the investment proportion in green industries,
+manufacturing, technological innovation, etc. Its
+capability to serve the real economy was further
+strengthened. On 1 August 2022, Goldman Sachs
+ICBC Wealth Management Co., Ltd., a wealth
+management joint-venture established by ICBC
+Wealth Management and Goldman Sachs Asset
+Management, L.P., was officially set up in Shanghai.
+ICBC Wealth Management upgraded companionship
+customer services, strengthened protection
+investors' rights and interests, and established an
+all-round investor education system, in an effort to
+become a wealth management company that the
+people are satisfied with. In 2022, ICBC Wealth
+Management won "Golden Bull Award for Wealth
+Management CSR in the Banking Industry" from
+China Securities Journal. At the end of 2022, the
+balance of ICBC Wealth Management's wealth
+management products was RMB1,762,288 million,
+all of which were net-worth products.
+ICBC Wealth Management engages mainly in the issuance
+of wealth management products, wealth management
+advisory and consulting service and other activities
+approved by CBIRC.
+reform, and kept improving the quality of bank
+assets. ICBC Investment further played its part as a
+shareholder and sent directors and supervisors to
+the enterprises in which it conducted debt-for-equity
+swap according to law. It deeply engaged in
+the enterprises' corporate governance, provided
+integrated financial services, and promoted healthy
+and sustainable development of the enterprises.
+ICBC Wealth Management
+By giving full play to its debt-for-equity swap license
+and professional advantage, ICBC Investment,
+with a focus on serving the real economy and
+deepening the supply-side structural reform,
+strengthened coordination within the Group and
+between investment and loan businesses, developed
+diversified financial services, enriched and expanded
+debt-for-equity swap investment plans and private
+fund products, and steadily promoted increase in
+coverage and quality improvement of market-based
+debt-for-equity swap, effectively supporting
+enterprises reducing leverage, preventing risks and
+advancing reforms. Meanwhile, ICBC Investment
+continued to improve the capability and effect of
+coordinating Group efforts to resolve risk assets,
+assisted enterprises getting out of trouble through
+ICBC Investment is one of the first pilot banks in China to
+conduct debt-for-equity swap. It holds the franchise license
+of non-bank financial institution and is mainly engaged in
+debt-for-equity swap and the supporting business.
+ICBC Investment
+628
+43
+106.28
+499,214
+16,970
+82.0
+57,350.38
+(349.82)
+1,410.35
+7,453.45
+HKD5,963 million
+MOP589 million
+Commercial banking
+Investment banking
+3,815.26
+ICBC International Holdings Limited
+Industrial and Commercial Bank of
+China (Macau) Limited
+PT. Bank ICBC Indonesia
+18,410.86
+118,609.94
+(in USD
+millions)
+millions)
+millions)
+paid-in capital
+HKD44,188 million
+Commercial banking
+772.39
+Industrial and Commercial Bank of
+China (Asia) Limited
+285.01
+Industrial and Commercial Bank of
+China (Malaysia) Berhad
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+KZT8,933 million
+Commercial banking
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+87.54
+1,164.77
+8,375.11
+THB20,107 million
+Commercial banking
+Commercial banking
+296.97
+935.35
+16.79
+413.28
+3,693.20
+IDR3.71 trillion
+MYR833 million
+Commercial banking
+12.88
+Principal business
+Institution
+(in USD
+Other assets
+Non-standard debt assets
+Bonds
+Cash, deposits and reverse repurchase agreements
+Asset type
+DIRECT AND INDIRECT INVESTMENTS OF ICBC WEALTH MANAGEMENT IN WEALTH MANAGEMENT PRODUCTS AS
+AT THE END OF 2022
+100.0
+Total
+1,762,288
+516,184
+671
+217,633
+524
+1,510 2,021,804
+type
+Total
+18.0
+1,363
+Major Controlled Subsidiaries and Equity Participating Company
+Major Overseas Subsidiaries
+In RMB millions, except for percentages
+Net profit
+Net assets
+Total assets
+(in USD
+Issued share
+capital/
+2022
+At 31 December 2022
+100.0
+1,878,348
+4.7
+87,683
+4.1
+76,377
+58.1
+1,091,829
+33.1
+622,459
+Amount Percentage (%)
+1,257 1,444,248
+106 318,040
+Enterprise-wide risk management is a process to effectively identify, assess,
+measure, monitor, control or mitigate and report risks in order to ensure
+the realization of the Group's operating and strategic objectives by setting
+up effective and balanced risk governance structure, fostering robust
+and prudent risk culture, formulating unified risk management strategies
+and risk appetite, and implementing the risk limit and risk management
+policies. The principles of enterprise-wide risk management of the Bank
+include full coverage, matching, independence, perspectiveness and
+effectiveness, etc.
+The Bank deepened risk management. Based on the risk
+management principles of "plan ahead, see the big from
+the small, remedy in time and draw inferences", the Bank
+formulated and optimized risk management policies,
+refined the Group-wide risk management system that can
+cover the risk characteristics of integrated subsidiaries. The
+Bank intensified penetrating management and monitor of
+subsidiaries and strengthened systematic, standardized and
+intelligent management of equity investment information.
+Meanwhile, the Bank stepped up efforts in the building
+of the three lines of defense of subsidiaries, improved risk
+prevention & control and internal control and compliance
+capabilities, and pursued high-quality development.
+Annual Report 2022
+0.9
+187,316
+1.70
+3,985
+1.1
+234,378
+3,092
+Personal consumption
+15,460
+30.8
+6,362,685
+0.39
+25,394
+27.7
+0.24
+6,431,991
+1.65
+Personal business loans
+692,339
+1.83
+11,722
+2.7
+640,152
+Credit card overdrafts
+loans
+0.97
+3.4
+702,441
+0.91
+8,454
+4.0
+930,040
+6,811
+Residential mortgages
+0.49
+38,542
+46.1
+10,676,449
+Medium to long-term
+loans
+3.92
+107,390
+172,549
+13.2
+3.14
+99,066
+13.5
+3,150,517
+Short-term corporate
+2.09
+2,737,742
+1.62
+9,456,964
+45.8
+38.4
+7,944,781
+0.60
+49,555
+35.5
+8,236,561
+Personal loans
+2.6
+527,758
+4.9
+1,148,785
+Discounted bills
+corporate loans
+1.56
+147,497
+3.3
+13,179
+1.90
+Total
+ICBC (Canada) (Canada)
+ICBC (Mexico) (Mexico)
+ICBC (Brasil) (Brazil)
+ICBC (Peru) (Peru)
+ICBC (Argentina) (Argentina)
+ICBC Investments Argentina
+(Argentina)
+Inversora Diagonal (Argentina)
+Panama Branch (Panama)
+New York Branch (USA)
+ICBC (USA) (USA)
+ICBCFS (USA)
+Discussion and Analysis
+Hong Kong Branch (Hong Kong,
+China)
+ICBC (Asia) (Hong Kong, China)
+ICBC International (Hong Kong,
+China)
+ICBC (Macau) (Macau, China)
+Macau Branch (Macau, China)
+Europe
+Institutions
+(country/region)
+Frankfurt Branch (Germany)
+Hong Kong SAR and
+Macau SAR
+Institutions
+(country/region)
+America
+Institutions
+(country/region)
+ICBC (New Zealand) (New Zealand)
+Auckland Branch (New Zealand)
+Riyadh Branch (Saudi Arabia)
+Kuwait Branch (Kuwait)
+Sydney Branch (Australia)
+DISTRIBUTION OF OVERSEAS INSTITUTIONS
+Asia-Pacific Region (except Hong
+Kong SAR and Macau SAR)
+Institutions
+(country/region)
+Tokyo Branch (Japan)
+Seoul Branch (South Korea)
+Busan Branch (South Korea)
+Mongolia Representative Office
+(Mongolia)
+Singapore Branch (Singapore)
+ICBC (Indonesia) (Indonesia)
+ICBC (Malaysia) (Malaysia)
+Manila Branch (Philippines)
+ICBC (Thai) (Thailand)
+Hanoi Branch (Vietnam)
+M
+Ho Chi Minh City Representative
+Office (Vietnam)
+Vientiane Branch (Lao PDR)
+Phnom Penh Branch (Cambodia)
+Yangon Branch (Myanmar)
+ICBC (Almaty) (Kazakhstan)
+Karachi Branch (Pakistan)
+Mumbai Branch (India)
+Dubai (DIFC) Branch (UAE)
+Abu Dhabi Branch (UAE)
+Doha Branch (Qatar)
+M Mad
+254,887
+Luxembourg Branch (Luxembourg)
+ICBC (Europe) (Luxembourg)
+Paris Branch (France)
+Amsterdam Branch
+Milan Branch (Italy)
+ICBC Credit Suisse Asset Management is mainly engaged
+in fund raising, fund sales, asset management and other
+businesses approved by CSRC. It had many business
+qualifications such as mutual fund, QDII, enterprise
+annuity, specific asset management, domestic (foreign)
+investment manager of social security fund, RQFII,
+insurance fund management, special asset management,
+occupational annuity and basic endowment insurance
+investment manager, and was one of the "fully qualified"
+fund companies in the industry.
+ICBC Credit Suisse Asset Management maintained
+stable business development. Its total assets under
+management remained stable, pension business and
+fixed-income funds grew well, equity fund shares
+were stable, and long-term investment performance
+is among the best in the industry. ICBC Credit Suisse
+Asset Management supported the building of the
+third pillar of pension business and launched the first
+personal pension business. A number of its funds
+were included into the directory of first personal
+pension funds released by CSRC. ICBC Credit
+Suisse Asset Management served the real economy
+in making better use of existing assets and made
+positive progress in publicly offered REITS business.
+ICBC Credit Suisse Asset Management strengthened
+the protection of investors' rights and interests, and
+further promoted investor education, which was
+again rated as excellent in the assessment of the
+national securities and futures investor education
+base. In 2022, ICBC Credit Suisse Asset Management
+won "Golden Bull Award for Fund Company" of
+China Securities Journal, "Gold Fund Top Company
+Award" of Shanghai Securities News, "Top 10 Star
+Fund Companies" of Securities Times, etc.
+At the end of 2022, ICBC Credit Suisse Asset
+Management managed 227 mutual funds, and more
+than 660 annuities, special accounts and special
+portfolios, with assets totaling RMB1.72 trillion.
+ICBC
+68
+In 2022, the Bank adhered to the principle of "laying a sound
+foundation for risk control". The Bank promoted the iterative upgrade
+of enterprise-wide risk management system with the over-arching
+Five-pronged Risk Management Approach, namely the overall risk
+management of domestic and overseas institutions, on-and off-balance
+sheet business, commercial banking and investment banking and other
+services, online and offline business, and Head Office and subordinate
+institutions. The Bank strengthened the top-level design for risk
+management by formulating and implementing the risk management
+plan of the Bank for the "14th Five-Year Plan" period, to ameliorate the
+risk management system, consolidate the responsibilities of the three
+defense lines for risk management, and enhance the effectiveness of
+enterprise-wide risk management. The Bank conducted comprehensive
+inspection of various potential risks, continuously improved the capability of
+overseas institutions and subsidiaries in risk data penetration management,
+to reflect the overall picture of the Group's risks in a sufficient and
+dynamic manner. Besides, the Bank strengthened risk prevention and
+control in emerging fields, strictly implemented regulatory requirements
+for wealth management business, and intensified the risk management of
+cooperation institutions in investment and financing business.
+ICBC Credit Suisse Asset Management
+1.42
+100.0
+20,667,245
+1.38
+321,170
+100.0
+23,212,312
+293,429
+The Bank continued to refine the Group's integrated
+governance system, strengthened the management
+mechanism featuring "leading coordination and focusing
+on lines", and consolidated and improved the Group
+headquarters' integrated governance capability. The
+Bank continuously optimized the integrated subsidiary
+governance model with Party building, corporate
+governance and equity management at its core, promoted
+synergy between
+the integration strategy and the
+internationalization strategy in a coordinated manner,
+and further refined the Group control and coordination
+mechanism. The Bank also optimized the subsidiary
+governance mechanism, strengthened the efficiency
+of the role of full-time and part-time directors, and
+promoted deep integration of Party building and corporate
+governance of domestic subsidiaries. Meanwhile, the
+Bank optimized the strategic evaluation mechanism and
+promoted deep and accurate transmission of the Group's
+strategy to subsidiaries. The Bank strengthened capital
+management, promoted IT building, data governance and
+digital transformation, and further improved the influence
+of subsidiaries in their industries as well as their core
+competitiveness and customer service capabilities.
+The Bank remained committed to serving national
+strategies and the real economy, focused on main business,
+refined specialized business, and formed a multi-field
+integrated development layout covering fund, leasing,
+insurance, debt-for-equity swap, wealth management,
+FinTech, overseas investment banking, etc. Total market
+financial service capability further improved.
+Diversified Operation and Subsidiary
+Management
+Madrid Branch (Spain)
+Warsaw Branch (Poland)
+Greece Representative Office
+(Greece)
+ICBC (London) (UK)
+London Branch (UK)
+ICBC Standard Bank (UK)
+Bank ICBC (JSC) (Russia)
+ICBC Turkey (Turkey)
+Prague Branch (Czech Republic)
+Zurich Branch (Switzerland)
+ICBC (Austria) (Austria)
+Africa
+Institutions
+(country/region)
+Investments in Standard Bank
+(South Africa)
+African Representative Office
+(South Africa)
+Annual Report 2022
+59
+Discussion and Analysis
+(the Netherlands)
+Brussels Branch (Belgium)
+59.0
+At the end of 2022, corporate NPLs were RMB271,615 million, showing an increase of RMB16,728 million when compared
+with the end of the previous year, and representing a NPL ratio of 1.96%, with a decrease of 0.13 percentage points.
+Personal NPLs amounted to RMB49,555 million, showing an increase of RMB11,013 million, and represented a NPL ratio of
+0.60%, with an increase of 0.11 percentage points.
+1.96
+Market Risk
+Management Committee
+Credit Risk
+Management Committee
+Risk Management
+Committee
+Asset & Liability
+Management Committee
+Primary reporting line
+Secondary reporting line
+Second line f defense
+Operational Risk
+Management Committee
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Management of Branches
+Board of directors of subsidiaries
+Legal Affairs Department
+Financial Technology
+Department
+Office of Steering Group
+Executive Office
+Senior management of subsidiaries
+Internal Control &
+Compliance Department
+Internal Audit Bureau
+Third line of defense
+The Bank continued to strengthen the construction of
+credit risk management system and consolidated the
+foundation for credit risk management. It improved
+the construction of the Group's unified investment and
+financing risk limit management system, optimized
+the limit review and approval procedure for sovereign
+customers, and intensified the construction of risk limit
+management system for the Group's affiliates. Moreover,
+the Bank clarified the life cycle management requirements
+for credit products, and included the responsibilities of
+three defense lines for risk management in the credit
+product risk management system, to fulfill the primary
+responsibility for risk control.
+According to the regulatory requirement on loan risk
+classification, the Bank implemented five-category
+classification management in relation to loan quality
+and classified loans into five categories: pass, special
+mention, substandard, doubtful and loss, based on the
+possibility of collecting the principal and interest of loans.
+In order to implement sophisticated management of credit
+asset quality and improve risk management, the Bank
+implemented the twelve-category internal classification
+system for corporate loans. The Bank applied five-category
+classification management to personal credit assets and
+ascertained the category of the loans based on the number
+of months in default, expected loss ratio, credit rating,
+collateral and other quantitative and qualitative factors.
+Discussion and Analysis
+ICBC
+66
+credit risk management mode. The Board of Directors
+assumes the ultimate responsibility for the effectiveness
+of credit risk management. The Senior Management is
+responsible for executing the strategies, overall policy
+and system regarding credit risk management approved
+by the Board of Directors. The Credit Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of credit
+risk management, is responsible for reviewing material and
+important affairs of credit risk management, and performs
+its duty in accordance with the Charters of the Credit
+Risk Management Committee. The credit and investment
+management departments at different levels undertake
+the responsibility of coordinating credit risk management
+at respective levels, and the business departments
+implement credit risk management policies and standards
+for their respective business areas in accordance with their
+functions.
+Internal Audit Sub-bureau
+The Bank strictly adheres to regulatory requirements
+regarding credit risk management, diligently fulfills
+established strategies and objectives under the leadership
+of the Board of Directors and the Senior Management,
+and implements an independent, centralized and vertical
+Credit Risk Management
+Credit Risk
+and the Board of Supervisor to
+At the level of Head Office
+At the level of branches
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+Credit risk is the risk where loss is caused to the banking
+business when the borrower or counterparty fails to
+meet its contractual obligations. The Bank's credit risks
+mainly originate from loans, treasury operations (including
+deposits with banks and other financial institutions,
+placements with banks and other financial institutions,
+reverse repurchase agreements, corporate bonds and
+financial bonds investment), receivables and off-balance
+sheet credit business (including guarantees, commitments
+and financial derivatives trading).
+Asset & Liability
+Management Department
+Credit and Investment
+Management Department
+Risk Management
+Department
+Bank Card
+Department
+Institutional Banking
+Department
+Personal Banking
+Corporate Banking
+Department
+Business departments
+Senior Executive Vice President
+(Chief Risk Officer)
+Global Market
+Vice Presidents
+President
+Board of Directors
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+Discussion and Analysis
+65
+12,194,706
+Senior Executive
+Department
+Business departments of
+branches and subsidiaries
+Legal risk
+IT risk
+Strategic risk
+Reputational risk
+Operational risk, compliance risk,
+money laundering risk
+Liquidity risk, interest rate risk
+in the banking book
+Credit risk
+-Enterprise-wide risk, market risk, country risk
+the Board of Directors
+of the Board of Directors
+Audit Committee of
+US Risk Committee
+Risk Management Committee
+Board of Supervisors
+First line of defense
+The Bank accurately grasped the layout and direction
+of investment and financing business and strengthened
+credit risk management. In terms of corporate credit
+business, the Bank actively supported the infrastructure
+construction projects involving "New infrastructure, New
+urbanization initiatives and Major projects", implemented
+the rural revitalization and new urbanization strategies,
+and continued to provide more investment and financing
+support for the areas of manufacturing industry such
+as intelligent manufacturing, digital economy, strategic
+emerging industries and transformation and upgrading
+of traditional industries. It actively implemented the
+development strategies of five key regions (namely,
+Beijing-Tianjin-Hebei region, Yangtze River Delta,
+Guangdong-Hong Kong-Macao Greater Bay Area, central
+China and Chengdu-Chongqing economic circle), and kept
+improving differentiated region credit policies. In terms of
+personal credit business, the Bank continued to facilitate
+the construction of "digital post-loan" system, accelerated
+the digital transformation of risk control area for personal
+loans and optimized the risk model deployment strategy, to
+enhance the efficiency of risk control. It also strengthened
+the refined management and collection of overdue loans,
+and optimized the personal loan disposal policy.
+for Deepening Reform
+Credit Risk Analysis
+100.00
+20,667,245
+100.00
+0.14
+29,551
+0.19
+44,224
+23,212,312
+According to the five-category classification, pass loans amounted to RMB22,439,514 million at the end of 2022,
+representing an increase of RMB2,477,736 million when compared with the end of the previous year and accounting for
+96.67% of total loans. Special mention loans stood at RMB451,628 million, representing an increase of RMB39,590 million,
+and accounting for 1.95% of the total, with a drop of 0.04 percentage points. NPLs amounted to RMB321,170 million,
+showing an increase of RMB27,741 million, and NPL ratio was 1.38%, with a decrease of 0.04 percentage points.
+0.62
+0.51
+118,574
+0.66
+134,895
+0.68
+158,372
+1.42
+128,983
+DISTRIBUTION OF LOANS AND NPLS
+At 31 December 2022
+In RMB millions, except for percentages
+At 31 December 2021
+271,615
+59.6
+The Bank prevented and mitigated the risks in key fields
+such as local government debts, real estate, high polluting
+and high energy-consuming industries. The Bank strictly
+implemented the national laws, regulations and regulatory
+policies on the management of local government debts
+and financing platforms, continued with credit access
+management and monitoring, and firmly held the bottom
+line for no regional systemic risks. The Bank strictly
+implemented the real estate macro-control policy, with
+the focus on the objectives of "stabilizing land prices,
+housing prices and expectations", and maintained stable
+and orderly disbursement of real estate loans. To positively
+respond to the changes in real estate market, the Bank
+carried out the risk resolution project M&A loan business,
+targeting key real estate enterprises, in a steady and
+orderly manner. With adherence to the market-oriented
+and law-based principles, the Bank actively provided
+financial services for "ensuring housing delivery", thus
+protecting the legitimate rights and interests of housing
+finance consumers according to law. Besides, the Bank
+further strengthened the investment and financing control
+over the high polluting and high energy-consuming
+industries, rigidly controlled customer access with the
+implementation of differentiated credit investment
+and financing strategy, and tightened up customer
+classification, to optimize customer structure and reinforce
+the use and management of credit funds.
+Corporate loans
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Loan
+Item
+NPL ratio
+Percentage
+NPL ratio
+Percentage
+293,429
+1.38
+13,826,966
+321,170
+At the end of 2022, the Bank's maximum exposure to
+credit risk, without taking into account of any collateral
+and other credit enhancements, was RMB41,277,224
+million, an increase of RMB4,540,182 million compared
+with the end of the previous year. Please refer to "Note
+50.(a)(i) to the Consolidated Financial Statements:
+Maximum Exposure to Credit Risk Without Taking
+Into Account of Any Collateral and Other Credit
+Enhancements". For mitigated risk exposures of credit
+risk asset portfolio of the Bank, please refer to the section
+headed "Credit Risk" of the 2022 Capital Adequacy
+Ratio Report of Industrial and Commercial Bank of China
+Limited.
+Annual Report 2022
+67
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Item
+Pass
+Special mention
+NPLs
+Substandard
+Doubtful
+Loss
+Total
+In RMB millions, except for percentages
+At 31 December 2022
+Discussion and Analysis
+19,961,778
+451,628
+96.59
+96.67
+22,439,514
+(%)
+Amount
+1.95
+At 31 December 2021
+1.99
+(%)
+Amount
+Percentage
+Percentage
+412,038
+Discussion and Analysis
+In accordance with the relevant regulatory requirements of CBIRC's Measures for the Management of Large Exposures of
+Commercial Banks and other relevant regulatory rules, the Bank carried out various work on large exposures management
+in an orderly manner, further improved the large exposures management system, including the construction of related
+systems, and reported relevant information as required by regulators, to strengthen large exposures limit management, and
+to continuously improve large exposures management.
+71
+Annual Report 2022
+BORROWER CONCENTRATION
+As at the end of 2022, the total amount of loans granted by the Bank to the single largest borrower and top ten single
+borrowers accounted for 3.8% and 16.0% of the Bank's net capital base respectively. The total amount of loans granted to
+the top ten single borrowers was RMB684,780 million, accounting for 3.0% of the total loans.
+Large Exposures Management
+Substandard
+Loan concentration to the single largest borrower (%)
+Loan concentration to the top ten borrowers (%)
+Note: Calculated according to the Circular on Amending the Definitions and Calculation Formula of Basic Indicators for Off-site Supervision
+of the Banking Sector issued by CBIRC in 2022, and measured at the Group's level.
+At
+At
+At
+31 December
+2022
+3.8
+31 December
+2021
+3.6
+Item
+51.7
+21.0
+42.5
+Doubtful
+At
+At
+In percentages
+At
+31 December
+2022
+31 December
+2021
+31 December
+2020
+31 December
+2020
+1.1
+1.1
+1.2
+17.3
+26.8
+36.6
+46.4
+66.5
+47.6
+3.5
+Finance
+14.2
+0.3
+Borrower E
+Borrower F
+Production and supply of electricity, heating, gas and water
+Transportation, storage and postal services
+60,000
+0.3
+50,492
+0.2
+Borrower G
+Borrower H
+Borrower I
+Borrower J
+Total
+0.2
+42,271
+0.2
+43,022
+0.2
+48,879
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+66,199
+Transportation, storage and postal services
+Borrower D
+0.3
+14.8
+The table below shows the details of the loans granted to the top ten single borrowers of the Bank as at the end of 2022.
+In RMB millions, except for percentages
+% of total
+Borrower
+Industry
+Amount
+loans
+16.0
+Borrower A
+163,586
+0.7
+Borrower B
+Borrower C
+Special mention
+89,711
+0.4
+Finance
+78,801
+Transportation, storage and postal services
+Pass
+Loans secured by mortgages
+LOAN MIGRATION RATIO
+DISTRIBUTION OF LOANS BY COLLATERAL
+Discussion and Analysis
+ICBC
+70
+As at the end of 2022, the allowance for impairment losses on loans stood at RMB672,762 million, of which RMB672,224
+million at amortised cost, and RMB538 million at fair value through other comprehensive income. Allowance to NPLs was
+209.47%, showing an increase of 3.63 percentage points over the end of last year; allowance to total loans ratio was
+2.90%, showing a decrease of 0.02 percentage points.
+538
+28
+11.0
+2,459,887
+11.9
+Unsecured loans
+Total
+8,221,000
+35.4
+6,988,877
+33.8
+23,212,312
+At 31 December 2022
+100.0
+In RMB millions, except for percentages
+At 31 December 2021
+Percentage
+2,544,651
+Guaranteed loans
+8.3
+1,720,583
+10.6
+2,469,508
+Pledged loans
+46.0
+41,819
+9,497,898
+43.0
+9,977,153
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+20,667,245
+100.0
+OVERDUE LOANS
+0.34
+91,177
+0.40
+93,247
+0.45
+19,543
+0.08
+19,153
+0.09
+284,031
+1.22
+254,901
+1.23
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Overdue loans stood at RMB284,031 million, representing an increase of RMB29,130 million from the end of the previous
+year, among which, loans overdue for over 3 months amounted to RMB190,229 million, representing an increase of
+RMB7,772 million.
+RESCHEDULED LOANS
+Rescheduled loans and advances amounted to RMB26,229 million, representing an increase of RMB7,095 million as
+compared to the end of the previous year. Specifically, rescheduled loans and advances overdue for over 3 months
+amounted to RMB2,281 million, representing a decrease of RMB20 million.
+70,057
+0.34
+79,509
+0.35
+At 31 December 2022
+Overdue periods
+Less than 3 months
+3 months to 1 year
+1 to 3 years
+Over 3 years
+Total
+In RMB millions, except for percentages
+Item
+At 31 December 2021
+% of total
+Amount
+loans
+Amount
+loans
+93,802
+0.40
+72,444
+% of total
+0.2
+Item
+3.0
+Less than
+3 months to
+1 year
+9,363,578
+8,383,705
+1 to 5 years
+Over 5 years
+3 months
+(7,457,653)
+(6,440,087)
+(2,593,546)
+(2,301,496)
+Note: Please refer to "Note 50. (d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+3,954,749
+3,320,310
+Liquidity Risk
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis at a reasonable cost to settle liabilities as
+they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: material adverse changes in market liquidity,
+withdrawal of customers' deposits, drawing of loans by customers, overdue payment of debtors, mismatch between assets
+and liabilities, difficulties in assets realization, operating losses and risk associated with its affiliates.
+Annual Report 2022
+75
+Discussion and Analysis
+Liquidity Risk Management
+The Bank's liquidity risk management system conforms
+to its overall development strategy and overall risk
+management system, and is commensurate with the
+business scale, business nature, complexity and other
+aspects of the Bank. The system includes the following
+fundamental elements: effective governance structure
+for liquidity risk management; sound strategy, policy
+and procedures for liquidity risk management; effective
+identification, measurement, monitoring and control for
+liquidity risk and a complete management information
+system. In respect of liquidity risk management, the Bank's
+governance structure embodies the decision-making
+system comprising the Board of Directors and its special
+committees as well as the Asset and Liability Management
+Committee and the Risk Management Committee of
+the Head Office; the supervision system comprising the
+Board of Supervisors, the Internal Audit Bureau and the
+Internal Control and Compliance Department of the
+Head Office; and the execution system comprising the
+Asset and Liability Management Department, leading
+management departments of on- and off-balance sheet
+businesses, the information technology departments,
+operation management departments of the Head Office
+and relevant departments of branches. Each of these
+systems performs the corresponding functions of decision
+making, supervision and execution according to division of
+responsibilities.
+At 31 December 2021
+Objective of liquidity risk management: By establishing
+and improving the liquidity risk management system,
+the Bank aims at realizing effective identification,
+measurement, monitoring and control of the liquidity
+risk at the Group level, the Bank, the affiliates, the
+branches and the business lines, and ensuring the liquidity
+demand is satisfied at a reasonable cost in time under
+the normal business scenario and the stress scenario. The
+Bank's liquidity risk management strategy and policy are
+formulated in accordance with the liquidity risk appetite,
+and they cover all businesses on- and off-balance sheet, all
+domestic and overseas business departments, branches and
+At 31 December 2022
+INTEREST RATE RISK EXPOSURE
+469
+4,945
+(809)
+1,563
+809
+(1,642)
+(436)
+(1,290)
+436
+1,355
+(31,181)
+(61,267)
+31,181
+67,868
+Note: Please refer to "Note 50.(d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+Interest Rate Exposure Analysis
+As at the end of 2022, the Bank had a positive cumulative interest rate sensitivity exposure within one year of
+RMB1,905,925 million, representing a decrease of RMB37,693 million from the end of the previous year, mainly caused
+by the increase in repriced or matured due to customers within one year. The Bank had a positive cumulative interest rate
+sensitivity exposure above one year of RMB1,361,203 million, representing an increase of RMB342,389 million, mainly
+resulted from the increase in repriced or matured investment in bonds above one year.
+In RMB millions
+affiliates that are likely to have a material impact on the
+liquidity risk, and contain the liquidity risk management
+under normal and stressed scenarios. The liquidity risk
+management strategy specifies the overall objective and
+mode of liquidity risk management and lists major policies
+and procedures. The policies for liquidity risk management
+are formulated in accordance with external and macro
+operating environments and business development of the
+Bank, with a view to striking an effective balance among
+security, liquidity and profitability. The Bank conducts stress
+testing quarterly or by subject by fully considering various
+macro and micro factors that may affect the liquidity of
+the Bank, changes in the external operating environment,
+regulatory requirements, and business characteristics and
+complexity of the Bank.
+In 2022, the Bank adhered to a steady and prudent
+liquidity management strategy, and the Group's liquidity
+was stable. The Bank intensified the monitoring of funds
+and maintained a proper and sufficient liquidity reserve,
+with stable and orderly liquidity and customer payment.
+The Bank facilitated the ongoing upgrading of liquidity risk
+management mechanism and system, and continuously
+enhanced the automation and intelligence level of liquidity
+risk monitoring, measurement and control. The Bank
+strengthened on- and off-balance sheet liquidity risk
+management in local and foreign currencies in domestic
+and overseas institutions, optimized the multi-level and
+multi-dimensional liquidity monitoring and early warning
+system, and enhanced the Group's liquidity risk prevention
+and emergency response capabilities.
+Liquidity Risk Analysis
+>=25.0
+106.1
+88.9
+91.4
+Loan-to-deposit ratio (%)
+RMB and foreign
+76.7
+77.3
+72.8
+currency
+76
+ICBC
+Discussion and Analysis
+Net stable funding ratio aims to ensure commercial banks
+have sufficient stable sources of funding to meet the
+needs for stable funding of assets and off-balance sheet
+risk exposures. The net stable funding ratio is the ratio of
+the available stable funding to the required stable funding.
+As at the end of the fourth quarter of 2022, the net stable
+funding ratio was 128.82%, 1.02 percentage points higher
+than that at the end of the previous quarter, mainly due
+to the rapid growth of stable funds available for use. For
+the quantitative information for net stable funding ratio
+in accordance with CBIRC's Disclosure Rules on Net Stable
+Funding Ratio of Commercial Banks, please refer to the
+section headed "Unaudited Supplementary Information to
+the Consolidated Financial Statements".
+The daily average liquidity coverage ratio for the fourth
+quarter of 2022 was 118.27%, 2.43 percentage points
+lower than the previous quarter, mainly because of the
+decreased cash inflows in the next 30 days. High-quality
+liquid assets cover cash, available central bank reserve
+under stress and primary and secondary bond assets that
+can be included in the liquidity coverage ratio under the
+regulatory requirements. For the quantitative information.
+for liquidity coverage ratio based on CBIRC's Administrative
+Measures for the Information Disclosure of Liquidity
+Coverage Ratio of Commercial Banks, please refer to the
+section headed "Unaudited Supplementary Information to
+the Consolidated Financial Statements".
+As at the end of 2022, the negative liquidity exposure for
+less than 1 month expanded, mainly due to the increase
+of matured due to customers within corresponding term.
+The negative liquidity exposure for 3 months to 1 year
+decreased slightly, mainly due to the increase of matured
+loans and advances to customers with corresponding term.
+The positive liquidity exposure for 1 to 5 years and over
+5 years expanded, which was mainly due to the increase
+in matured loans and advances to customers and bond
+investments within corresponding term. In 2022, the
+Bank maintained stable and abundant funds, balanced
+and steady growth in assets and liabilities, reasonable and
+appropriate cash flows of various maturities, and safe and
+steady liquidity operation.
+Foreign currency
+43.2
+NPL ratio
+-2
+The Bank assesses liquidity risk status by comprehensive
+use of a variety of methods and tools such as liquidity
+indicator analysis and liquidity exposure analysis.
+At the end of 2022, RMB liquidity ratio and foreign
+currency liquidity ratio of the Bank were 42.3% and
+106.1% respectively, both meeting the regulatory
+requirements. Loan-to-deposit ratio was 76.7%.
+At
+At
+At
+Item
+Liquidity ratio (%)
+Regulatory
+criteria
+(4,663)
+31 December
+31 December
+2022
+2021
+2020
+RMB
+>=25.0
+42.3
+41.5
+31 December
+(469)
+63,210
+29,467
+RMB
+Exposure of on-balance sheet foreign
+exchange items, net
+657,841
+USD
+equivalent
+94,678
+USD
+RMB
+444,773
+equivalent
+69,919
+Exposure of off-balance sheet foreign
+(345,192)
+(49,681)
+(276,298)
+(43,435)
+exchange items, net
+312,649
+44,997
+168,475
+Item
+At 31 December 2021
+At 31 December 2022
+In RMB (USD) millions
+For credit risk capital measurement, please refer to
+the section headed "Credit Risk" of the 2022 Capital
+Adequacy Ratio Report of Industrial and Commercial Bank
+of China Limited.
+Market Risk
+Market risk is defined as the risk of loss to the Bank's
+on- and off-balance sheet activities caused by adverse
+movements in market rates (including interest rates,
+exchange rates, stock prices and commodity prices). The
+Bank is primarily exposed to interest rate risk and currency
+risk (including gold). Market risk management is the
+process of identifying, measuring, monitoring, controlling
+and reporting market risk. The objective of market risk
+management is to control market risk exposures within a
+tolerable level and maximize risk-adjusted return according
+to the Bank's risk appetite.
+The Bank strictly complies with regulatory requirements
+on market risk management, has implemented an
+independent, centralized and coordinated market
+risk management model, and formed a management
+organizational structure featuring the segregation of the
+front, the middle and the back offices in the financial
+market business. The Board of Directors assumes the
+ultimate responsibility for monitoring market risk
+72
+ICBC
+Discussion and Analysis
+26,484
+management. The Senior Management is responsible
+for executing the strategies, overall policy and system
+concerning market risk management approved by
+the Board of Directors. The Market Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of
+market risk management, is responsible for reviewing
+material affairs of market risk management, and performs
+its duty in accordance with the Working Regulations
+for the Market Risk Management Committee. The risk
+management departments at different levels undertake the
+responsibility of coordinating market risk management at
+respective levels, and the business departments implement
+market risk management policies and standards for
+their respective business areas in accordance with their
+functions.
+Management of Market Risk in the Trading
+Book
+The Bank kept strengthening trading book market risk
+management and product control, and adopted the
+value-at-risk (VAR), stress testing, sensitivity analysis,
+exposure analysis, profit/loss analysis, price monitoring
+and other means to measure and manage trading book
+products.
+For VaR of the trading book, please refer to "Note 50. (c)(i)
+to the Consolidated Financial Statements: VaR".
+Currency Risk Management
+Currency risk is the risk of adverse movements of exchange
+rate resulting in losses on the foreign currency exposure,
+which is due to the currency structure's mismatch between
+foreign currency assets and liabilities. The Bank's objective
+of currency risk management is to control the impact of
+exchange rate fluctuations on the Bank's financial position
+and shareholders' equity within a tolerable extent. The
+Bank mitigates such risk principally by limit management
+and hedging of risks. The Bank carries out sensitivity
+analysis and stress testing of currency risk on a quarterly
+basis, and the Senior Management and the Market Risk
+Management Committee review the currency risk reports
+on a quarterly basis.
+In 2022, the Bank positively responded to external
+environment changes and market fluctuations. By adhering
+to the currency risk neutrality principle, it comprehensively
+took measures such as limit management and hedging,
+actively adjusted the size of foreign exchange exposure
+and currency structure, improved the matching degree of
+the Group's asset and liability currencies, and strengthened
+capital fund preservation management of overseas
+institutions. In general, the currency risk was controlled
+within a reasonable range.
+FOREIGN EXCHANGE EXPOSURE
+In 2022, the Bank continued to deepen the Group's
+market risk management, innovated the financial market
+business and product risk management system, and
+established the product life cycle risk assessment and
+review mechanism. With the verification and issuance
+of the Group's market risk limit plan for 2022, the Bank
+strictly controlled the Group's market risk limit. The interest
+rate, exchange rate and commodity risks were analyzed in
+a timely manner. Global financial market monitoring was
+conducted on an ongoing basis, and a fast risk reporting
+mechanism was established. The Bank also kept enhancing
+the intelligent level of market risk management system,
+promoted the extended application of Global Market Risk
+Management system to overseas institutions, and pushed
+forward the implementation of the standardized market
+risk approach of Basel III Final Reform Package issued by
+Basel Committee.
+684,780
+Total foreign exchange exposure, net
+Please refer to the section headed "Market Risk" of the
+2022 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for
+further information on market risk capital measurement.
+in interest rate
+Effect on
+Currency
+RMB
+USD
+HKD
+Other
+Total
+net interest
+Effect on
+net interest
+Effect on
+income
+equity
+income
+equity
+(29,467)
+(56,877)
+100 basis points
+In RMB millions
+Effect on
+in interest rate
+Annual Report 2022
+73
+Discussion and Analysis
+Interest Rate Risk in the Banking Book
+Interest rate risk in the banking book is defined as the
+risk of loss in the economic value and overall profit of the
+banking book arising from adverse movements in interest
+rate and maturity structure, etc.
+Management of Interest Rate Risk in the
+Banking Book
+The Bank's management system for interest rate risk in
+the banking book conforms to the system importance,
+risk status and business complexity, and fits the Bank's
+overall development strategy and the enterprise-wide
+risk management system. The system mainly consists
+of the following elements: an effective risk governance
+structure; sound risk management strategies, policies and
+procedures; effective risk identification, measurement,
+monitoring, control and mitigation that cover all areas; a
+complete internal control and review mechanism; a fully-
+built risk management system; and adequate information
+disclosure and reporting. The Bank strictly complied
+with regulatory requirements for interest rate risk in the
+banking book, effectively managed interest rate risk in
+the banking book at the Bank and consolidated level,
+and developed a sound governance structure for interest
+rate risk management in the banking book that is fully
+built and well-structured, with clearly defined rights and
+responsibilities. The Board of Directors and the Senior
+Management are vested with the ultimate and executive
+responsibilities, respectively, for managing interest rate risk
+in the banking book. The Asset & Liability Management
+Department of the Head Office takes the leading role
+in managing interest rate risk in the banking book, and
+other departments and institutions play their roles in
+implementing policies and standards concerning interest
+rate risk in the banking book. The Internal Audit Bureau
+and the Internal Control & Compliance Department of the
+Head Office are responsible for reviewing and evaluating
+duties in respective of interest rate risk in the banking
+book.
+The objective of management of interest rate risk in the
+banking book: The Bank aims at maximizing the risk-
+adjusted net interest income within the tolerable level
+of interest rate risk under its risk management and risk
+appetite. The Bank formulated strategies and clarified
+objectives and modes for managing interest rate risk
+in the banking book based on risk appetite, risk status,
+macroeconomic and market changes. Based on the pre-
+judging of the interest rate trend and measurement
+results of the changes in overall profit and economic
+value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated
+Please refer to "Note 50. (c)(ii) to the Consolidated Financial
+Statements: Currency Risk" for the exchange rate sensitivity
+analysis.
+approach to using interest rate risk control tools to
+mitigate and manage risks, so as to ensure the Bank's
+actual interest rate risks conform to its bearing capability
+and willingness. On the basis of management strategies
+and objectives, the Bank developed policies and made clear
+the modes and instruments for managing interest rate risk
+in the banking book. By developing and modifying such
+methods as on-balance sheet adjustment and off-balance
+sheet hedging to manage interest rate risk, adeptly using
+quantity, pricing and derivative instruments regarding
+assets and liabilities, and applying limit management
+system, business plan, performance assessment and capital
+evaluation in all areas for interest rate risk management
+and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the
+affiliates and the products and portfolios easily affected by
+interest rate risk.
+In 2022, the Bank, in adherence to a prudent interest rate
+risk appetite, smoothly responded to the complicated and
+changing economic and financial environments and the
+risk challenges at home and abroad and improved the
+dynamic adjustment mechanism for its forward-looking,
+scientific and active interest rate risk management
+strategy, so as to accurately control asset-liability layout
+and interest rate exposures, continuously optimize its
+interest rate risk management model, and consolidate
+the quality and effectiveness of the Group's robust
+cross-cyclical operations. With the coordinated balance
+between stable growth and risk prevention, the Bank
+improved the combined regulation mechanism for whole
+process management, all-factor regulation and full-lifecycle
+coverage of interest rate risk, kept enhancing the digital
+management of interest rate risk, and maintained
+regulatory indicators compliant with standards and interest
+rate risk controllable, thus achieving balanced growth of
+the Group's current income and long-term value.
+74
+ICBC
+Discussion and Analysis
+Analysis on Interest Rate Risk in the Banking Book
+Interest Rate Sensitivity Analysis
+Supposing that there is parallel shift of overall market interest rates, and taking no account of possible risk management
+actions taken by the Management to mitigate the interest rate risk, the analysis on interest rate sensitivity of the Bank
+categorized by major currencies at the end of 2022 is shown in the following table:
++100 basis points
+In line with the principles of comprehensiveness, prudence
+and foresight, the Bank's stress testing on interest rate risk
+in the banking book adopted the interest rate risk exposure
+measurement approach and standardized duration
+approach to measure the effect of interest rate exposure
+changes under different stress scenarios on the overall
+profit and economic value. Based on the domestic and
+overseas regulatory requirements, the bank-wide asset and
+liability business structure, operation and management as
+well as risk appetite, the Bank set stress testing scenarios
+for interest rate risk in the banking book by taking into
+account the current interest rate level, historical changes
+and trends, total assets and liabilities and their term
+characteristics, business development strategies, customer
+behaviors and other factors, and conducted stress testing
+quarterly.
+Note: Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers" for details.
+(%)
+2
+0.61
+19,324
+25.1
+3,149,183
+Transportation, storage
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Loan
+Discussion and Analysis
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY OF LOAN CUSTOMERS
+In RMB millions, except for percentages
+At 31 December 2021
+At 31 December 2022
+2,816,789
+Percentage
+25.8
+0.88
+15.2
+1,667,376
+2.02
+38,188
+15.1
+1,892,850
+Leasing and
+3.72
+61,602
+15.1
+1,654,610
+3.02
+58,944
+15.5
+1,949,461
+Manufacturing
+and postal services
+24,762
+NPL ratio
+Percentage
+LIQUIDITY EXPOSURE ANALYSIS
+(377,347)
+538,067
+15,932,097
+14,692,050
+3,406,648
+3,513,826
+3,190,277
+3,275,258
+Note: Please refer to "Note 50.(b) to the Consolidated Financial Statements: Liquidity Risk".
+Operational Risk
+Operational Risk Management
+Operational risk is defined as the possibility of loss
+resulting from insufficient or problematic internal
+processes, employees and IT systems or from external
+events, including legal risk, but excluding strategic
+and reputational risk. There are seven major types of
+operational risks faced by the Bank, including internal
+fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage
+to physical assets, IT system, execution and delivery and
+process management. Among these, external fraud,
+execution, delivery and process management constitute
+major sources of operational risk losses of the Bank.
+Annual Report 2022
+77
+Discussion and Analysis
+The Bank strictly complies with regulatory requirements
+on operational risk management. The Board of Directors,
+the Board of Supervisors, the Senior Management and its
+Operational Risk Management Committee are respectively
+responsible for decision-making, supervision and execution
+with respect to operational risk management, and
+relevant departments act as the "three lines of defense"
+for operational risk management pursuant to their
+management functions, thus forming an operational risk
+management system with close connection and mutual
+checks and balances. Institutions and departments function
+as the first line of defense, assume the direct responsibility
+for respective operational risk management. Classified
+management departments such as Internal Control &
+Compliance, Legal Affairs, Security, Financial Technology,
+Finance & Accounting, Operation Management and
+Human Resources as well as cross-risk management
+departments including Credit and Investment Management
+and Risk Management jointly perform the functions
+as the second line of defense, which are respectively
+responsible for the lead management of operational risk,
+the classified management of certain type of operational
+risk and the management of operational risk across credit
+and market risks. The Internal Audit Department performs
+the functions as the third line of defense and assumes
+the responsibility for supervision, and is responsible
+for supervising the effectiveness of operational risk
+management.
+In 2022, the Bank deepened operational risk management
+and improved the business continuity management system
+in line with regulatory focuses and operational risk trends,
+to ensure continuous business operation. In alignment
+with the regulatory requirements of the Basel Committee
+and the CBIRC for operational risk management, the
+Bank strengthened loss data management, optimized
+the operational risk management system, steadily
+advanced the project on meeting new operational risk
+regulations, and coordinated the self-assessment of
+operational risk and control, to enhance operational
+risk control in a constant manner. To improve the long-
+term case prevention mechanism, the Bank issued the
+Administrative Measures for the Responsibility System for
+the Prevention of Criminal-related Cases, to consolidate
+the main responsibilities for case prevention, deepen the
+joint prevention and control of criminal-related cases
+and risk events, and normalize and standardize case
+warning and education in the whole bank. Besides, it
+continued to strengthen the grid-based intelligent control
+mechanism for abnormal employee behavior, carried out
+special governance in key business areas, and intensified
+(415,735)
+(89,448)
+(14,262,606)
+At 31 December 2021
+In RMB millions
+Overdue/
+repayable
+on demand
+Less than 1
+1 to 3
+month
+months
+3 months to
+1 year
+1 to 5
+years
+33,824
+Over 5
+Undated
+Total
+At 31 December 2022
+(15,631,491)
+(105,382)
+(415,942)
+(332,120)
+660,016
+years
+the analysis of abnormal employee behavior, so as to
+enhance the capability in preventing violations. During the
+reporting period, the operational risk control system of
+the Bank operated smoothly, and the operational risk was
+controllable on the whole.
+2.03
+Water, environment and
+2,706
+1.8
+226,500
+Mining
+culture and sanitation
+2.42
+6,947
+2.6
+287,601
+2.45
+8,337
+2.7
+340,146
+Science, education,
+1.77
+5,538
+2.9
+1.19
+312,849
+203,130
+3,470
+510
+10,938,653
+2.08
+260,931
+100.0
+12,555,491
+Total
+3.54
+13,827
+3.6
+390,704
+2.65
+17,422
+5.3
+657,994
+Other
+1.71
+1.9
+2.09
+7,513
+2.9
+8,653
+9.7
+1,065,459
+0.69
+8,406
+9.6
+1,211,580
+Production and supply of
+public utility management
+0.83
+11,379
+12.5
+1,370,252
+1.58
+23,864
+12.0
+1,511,785
+0.81
+electricity, heating,
+Real estate
+724,802
+359,345
+Construction
+8.31
+38,558
+4.2
+464,169
+5.96
+31,696
+commercial services
+4.2
+Wholesale and retail
+4.79
+33,820
+6.5
+705,714
+6.14
+44,531
+5.8
+531,845
+Please refer to the section headed "Operational Risk"
+of the 2022 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited issued by the
+Bank for further information on operational risk capital
+measurement.
+gas and water
+Legal risk is the risk of incurring legal sanctions, regulatory
+penalties, financial losses, reputational losses or other
+negative consequences that arises out of or in connection
+with the failure of the Bank to comply with relevant laws,
+regulations, administrative rules, regulatory provisions or
+requirements of other relevant rules during the Bank's
+operation; the unfavorable legal defects that exist in
+products, services or information provided to clients,
+transactions engaged in, and contracts, agreements or
+other documents executed by the Bank; legal disputes
+(litigation or arbitration proceedings) between the Bank
+and its clients, counterparties and stakeholders; important
+changes in relevant laws and regulations, administrative
+rules, regulatory provisions and other relevant rules;
+and other relevant legal events that occur internally and
+externally.
+293,429
+1.42
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+Movements of allowance for
+impairment losses on loans and advances to
+customers measured at amortised cost
+In RMB millions
+Movements of allowance for
+Item
+Stage 1
+Balance at
+269,376
+Stage 2
+110,649
+impairment losses on loans and advances to
+customers measured at FVTOCI
+Stage 3
+Total
+223,739
+603,764
+100.0
+Stage 1
+191
+1,232
+672,224
+1.38
+895,238
+4.3
+30,600
+3.42
+Overseas and other
+1,462,999
+6.3
+11,371
+0.78
+1,429,769
+6.9
+12,834
+0.90
+Total
+23,212,312
+100.0
+321,170
+20,667,245
+Stage 2
+Stage 3
+Total
+Write-offs and
+(85,157)
+(85,157)
+transfer out
+Recoveries of loans
+9,529
+9,529
+and advances
+previously written
+off
+Other movements
+Balance at
+31 December 2022
+1,278
+278,715
+811
+141,586
+(857)
+251,923
+Legal Risk
+317
+317
+142,856
+57,271
+28
+219
+1 January 2022
+Transfer:
+to stage 1
+31,002
+(28,109)
+(2,893)
+2.99
+(11,705)
+(3,979)
+to stage 3
+(4,594)
+(49,676)
+54,270
+(Reverse)/charge
+(6,642)
+92,227
+15,684
+29,203
+to stage 2
+978,246
+ICBC
+Loan
+(%)
+NPLs
+(%)
+Head Office
+747,980
+3.2
+18,443
+2.47
+791,994
+3.8
+21,668
+2.74
+Yangtze River Delta
+4,798,204
+20.7
+NPLs
+(%)
+Loan
+Item
+Based on the objective to ensure legal and compliant
+operation, the Bank always attaches great importance
+to establishing a sound legal risk management system,
+forming a full-process legal risk prevention and control
+mechanism to support and secure business innovation and
+market competition, and to prevent and eliminate various
+potential or practical legal risks. The Board of Directors
+is responsible for reviewing and determining the strategy
+and policy relating to legal risk management, and assumes
+the ultimate responsibility of legal risk management.
+The Senior Management is responsible for executing the
+strategy and policy relating to legal risk management,
+examining and approving relevant important affairs.
+The Legal Affairs Department of the Head Office is in
+charge of legal risk management across the Group, with
+relevant business departments providing related support
+and assistance on legal risk prevention and control. The
+affiliates, domestic and overseas branches undertake the
+responsibility of legal risk management of their respective
+institutions.
+4.2
+78
+100.0
+242,380
+2.22
+The Bank continued to propel the optimization and
+adjustment of the credit industry structure and stepped up
+efforts to shore up the development of the real economy.
+Loans to transportation, storage and postal services
+increased by RMB332,394 million as compared with the
+end of the previous year, representing a growth rate of
+11.8%, mainly due to active support for the construction
+of highway, railway, airport and berth projects and
+liquidity needs of large transportation group companies.
+Manufacturing loans increased by RMB294,851 million,
+an increase of 17.8%. The Bank continuously increased
+its support for the manufacturing industry. Loans to
+enterprises in advanced manufacturing fields such as
+new-generation information technology, automobile
+manufacturing, pharmaceutical manufacturing, large-scale
+refining and chemical projects, and electrical equipment
+increased rapidly. Loans to leasing and commercial services
+increased by RMB225,474 million, representing a growth
+rate of 13.5%, mainly to provide financing support
+for infrastructure, public services and major people's
+livelihood projects, as well as to meet the financing needs
+of industrial R&D and high-tech park construction. Loans
+to the production and supply of electricity, heating, gas
+and water increased by RMB146,121 million, an increase
+of 13.7%, mainly to support the financing needs of
+core electric power enterprises and the construction
+of key projects such as power grid transmission and
+distribution projects, clean energy and others. Loans to
+water, environment and public utility management grew
+by RMB141,533 million, representing a growth rate of
+10.3%, mainly for steadily satisfying the investment and
+financing needs arising from significant projects and
+projects for people's livelihood in the areas of urban
+infrastructure construction, water conservancy facilities,
+ecological environment protection and public services.
+The Bank continued to strengthen risk management of
+financing in various industries, improved the quality and
+efficiency in the disposal of non-performing assets, and
+properly carried out risk prevention and mitigation in key
+areas. With these efforts, the loan quality was generally
+stable.
+32,910
+Annual Report 2022
+Discussion and Analysis
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+At 31 December 2022
+In RMB millions, except for percentages
+At 31 December 2021
+Percentage
+NPL ratio
+NPL ratio
+69
+0.69
+Percentage
+20.2
+3,561,290
+15.3
+40,888
+1.15
+3,133,539
+15.2
+40,046
+1.28
+Central China
+4,225,369
+71,038
+1.68
+3,746,867
+18.1
+47,031
+4,163,732
+1.26
+Northeastern China
+18.2
+2.14
+Western China
+16.3
+Pearl River Delta
+72,241
+3,621,603
+15.6
+47,328
+3,134,781
+15.2
+33,860
+1.31
+0.84
+Bohai Rim
+3,816,621
+16.5
+69,989
+1.83
+1.08
+3,371,325
+35,149
+In RMB millions, except for percentages
+At
+At
+31 March
+2022
+8.40
+2021
+3,241,364
+8.04
+39,560,645
+31 December
+3,321,161
+3,475,995
+41,780,554
+8.32
+Leverage ratio (%)
+sheet assets
+3,296,397
+41,006,112
+3,391,913
+41,802,773
+Balance of adjusted on- and off-balance
+Net tier 1 capital
+2022
+30 September
+2022
+37,292,522
+30 June
+8.11
+8.69
+Global Systemically Importance Assessment
+Indicators of Commercial Banks
+Capital Financing Management
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system assets
+2022
+In RMB millions
+2022
+Indicator
+Interconnectedness
+Size
+Indicator category
+In accordance with the Guidelines on the Disclosure of
+Global Systemically Importance Assessment Indicators for
+Commercial Banks issued by CBIRC and the Instructions for
+G-SIB Assessment Exercise issued by the Basel Committee
+on Banking Supervision, the Bank calculated and disclosed
+the global systemically importance assessment indicators.
+Assessment Indicators of Systemically
+Important Banks
+Economic capital management of the Bank includes three
+major aspects: measurement, allocation and application.
+Economic capital indicators include Economic Capital (EC),
+Allocation and Management of Economic
+Capital
+For details on the issuance of capital instruments of the
+Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of
+HKEX and the website of the Bank.
+The Bank continuously improved the EVA value ecosystem
+and leveraged the leading and driving role of capital. It
+further optimized the economic capital measurement
+policy, and increased the preferential allocation to key
+areas such as manufacturing, green development, sci-tech
+innovation, strategic emerging industries and rural
+revitalization. The Bank improved the capital constraint
+mechanism and comprehensively strengthened capital
+management of domestic and overseas branches,
+controlled institutions and departments of the Head
+Office. It increased the use of economic capital in incentive
+assessment, and actively promoted the optimization of
+asset structure and the enhancement of value creation
+capacity.
+Risk-Adjusted Return on Capital (RAROC) and Economic
+Value-added (EVA). All of the above are applied in
+credit resource allocation, risk constraint, performance
+assessment, expenditure allocation, product pricing and
+customer management, etc.
+In October 2022, the Bank received the approvals from
+CBIRC, for the Bank to publicly issue tier 2 capital bonds
+of no more than RMB200.0 billion in China's national
+inter-bank bond market and record into the Bank's tier
+2 capital according to relevant regulations. In November
+and December 2022, the Bank issued two tranches of tier
+2 capital bonds of RMB60.0 billion and RMB30.0 billion
+in the national inter-bank bond market, respectively. All
+proceeds were used to replenish the Bank's tier 2 capital
+in accordance with the applicable laws as approved by
+relevant regulatory authorities.
+The Bank issued three tranches of tier 2 capital bonds of
+RMB40.0 billion, RMB50.0 billion and RMB40.0 billion
+respectively in China's national inter-bank bond market in
+January, April and August 2022. All proceeds were used
+to replenish the Bank's tier 2 capital in accordance with
+the applicable laws as approved by relevant regulatory
+authorities.
+Issuance Progress of Tier 2 Capital Bonds
+Discussion and Analysis
+83
+Annual Report 2022
+The First Extraordinary General Meeting of 2022 of the
+Bank reviewed and approved the Proposal on the Issuance
+of Undated Additional Tier 1 Capital Bonds. The Bank
+planned to issue undated additional tier 1 capital bonds
+of no more than RMB130.0 billion in China's domestic
+market. All proceeds from the issuance were used to
+replenish the Bank's additional tier 1 capital. The issuance
+plan of the undated additional tier 1 capital bonds is still
+subject to the approval of relevant regulatory authorities.
+Issuance Progress of Undated Additional Tier
+1 Capital Bonds
+On the basis of capital replenishment by retained profits,
+the Bank proactively expanded the channels for external
+capital replenishment and continuously promoted the
+innovation of capital instruments, to optimize capital
+structure, reinforce the capital strength and control the
+cost of capital rationally.
+Note: Please refer to "Unaudited Supplementary Information to the Consolidated Financial Statements" for details on disclosed leverage
+ratio information.
+Item
+15.64
+At
+Parts covered by internal ratings-based approach
+Parts uncovered by internal ratings-based approach
+Credit risk-weighted assets
+Item
+RISK-WEIGHTED ASSETS
+ICBC
+82
+Note: (1) Refers to risk-weighted assets after capital floor and adjustments.
+18.02
+19.26
+Capital adequacy ratio (%)
+14.94
+Tier 1 capital adequacy ratio (%)
+13.31
+14.04
+Common equity tier 1 capital adequacy ratio (%)
+21,690,349
+22,225,272
+Risk-weighted assets (1)
+3,909,669
+4,281,079
+Net capital base
+1,116
+42,074,963
+Market risk-weighted assets
+31 December
+Parts covered by internal model approach
+Total
+At
+At
+LEVERAGE RATIO
+Please refer to the 2022 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+21,690,349
+1,493,708
+102,672
+122,624
+1,533,579
+22,225,272
+51,014
+153,686
+80,583
+203,207
+6,570,240
+7,240,149
+13,472,715
+20,042,955
+20,488,486
+13,248,337
+2021
+2022
+At 31 December
+In RMB millions
+At 31 December
+Discussion and Analysis
+Parts uncovered by internal model approach
+Operational risk-weighted assets
+2,467,410
+Discussion and Analysis
+3,225,190
+Fifth, it will break new ground in the guidance of
+the Party building. The Bank will keep cementing the
+results of the disciplinary inspection by the CPC Central
+Committee, continue to refine the implementation
+mechanism for the major decisions and arrangements of
+the CPC Central Committee, and promote the guiding
+principles of the 20th CPC National Congress to be carried
+out throughout the Bank and produce vivid practice. It
+will remain firmly committed to the full and strict Party
+self-governance, continue with strict keynote, measures
+and atmosphere in the long run, and strive to build
+a clean, righteous, practical and accountable political
+environment.
+Third, it will provide driving forces by enhancing
+support in technology, data and talents. The Bank
+I will accurately follow the direction of modern financial
+development and remain committed to technology
+self-reliance, development empowered by digital
+technology and development led and driven by talents. It
+will advance the building of "D-ICBC", a strong bank with
+technology advantages and top-notch talent teams, and
+first-class think tanks. Continuous efforts will be made to
+improve customer experience, business efficiency and value
+creation capability. The Bank will continue to plan in a
+well-coordinated way and fully deepen the comprehensive
+reform to build new engines for high-quality development.
+Fourth, it will prevent risks and put up new
+high-level defense lines for security. Adhering to
+a holistic approach to national security, the Bank will
+refine the Five-pronged Risk Management Approach,
+strengthen source control and joint prevention, and
+keep a close eye on major fields, weak links and critical
+positions in promoting the iteration and upgrading of the
+comprehensive risk management system. It will enhance
+building, execution and supervision of the internal control
+system and unremittingly reinforce production safety to
+effectively prevent and eliminate major risks.
+Second, it will adjust structure to create the new
+ecosystem of high-quality development. Aiming to
+develop into a world-class and modern financial enterprise
+with Chinese characteristics, the Bank will construct a
+balanced and coordinated customer structure, a stable
+and reasonable asset structure, a diverse income structure,
+an innovative and leading product structure, and a fully
+integrated channel structure. In doing so, it will solidify
+the "Strong, Excellent and Large" features and move
+closer towards balanced, coordinated and sustainable
+developments.
+First, it will stabilize growth to fully serve the Chinese
+path to modernization. The Bank will firmly implement
+the decisions and arrangements of the Central Committee
+of the CPC, put stability first and pursue progress
+while ensuring stability, and fulfill its responsibilities
+as a large bank in promoting larger domestic demand,
+optimized supply and smooth circulation. It will deepen
+the implementation of key strategies such as the No.1
+Personal Bank, the Preferred Bank for Foreign Exchange
+Business, Sharpening Competitive Edge in Key Regions,
+and Urban-Rural Collaborative Development. By providing
+high-quality financial services, the Bank will contribute to
+the efforts of stabilizing growth, employment and price.
+ICBC will continue to follow the guidance of Xi Jinping
+Thought on Socialism with Chinese Characteristics for
+a New Era, study and carry out in depth the guiding
+principles of the 20th National Congress of the CPC, and
+fully and faithfully apply the new development philosophy
+on all fronts. Following the "48-character" guideline,
+the Bank will focus on serving the Chinese path to
+modernization and driving high-quality development. It will
+strive to further practice the arrangements of "leveraging
+our strengths, tackling areas of weaknesses and solidifying
+the foundation" and seek new breakthroughs in
+development plans. With concrete action, the Bank will
+contribute to the efforts to kick off to a good start for
+building a modern socialist country in all respects.
+2022 was an extraordinary year. Adhering to Xi Jinping
+Thought on Socialism with Chinese Characteristics for
+a New Era, ICBC continued to earnestly implement the
+decisions and arrangements of the Central Committee
+of the Communist Party of China ("CPC") and the State
+Council. Following the "48-character" guideline, the Bank
+coordinated development and safety, and advanced the
+"Strong, Excellent and Large" features by making efforts in
+"stability, progress and reform". It achieved the admirable
+performance of making progress and improving quality
+while ensuring stability, which was better than the
+expected and the best over recent years, and reached
+a new stage in the high-quality development of the Bank.
+2023 is the start for comprehensively implementing the
+guiding principles of the 20th National Congress of the
+CPC. The fundamentals of the Chinese economy remain
+unchanged, and they will maintain long-term growth
+and demonstrate strong resilience, great potential and
+sufficient vitality. The economic operation is expected
+to recover in general, creating favorable conditions for
+the high-quality development of the banking industry.
+However, the world has entered a new period of turmoil
+and changes and the world economy may be troubled by
+stagflation, producing adverse influence for the stable and
+healthy operation of banking.
+OUTLOOK
+Discussion and Analysis
+85
+Annual Report 2022
+4,161,856
+Cross-jurisdictional claims and liabilities
+management subsidiary
+2,021,804
+Balance of wealth management products issued by the wealth
+563,640
+Wealth management business
+969,234
+Assets of non-banking affiliates
+784,582
+Securities measured at fair value
+8,118,630
+16,036
+86
+Number of domestic operating institutions
+Derivatives
+ICBC
+Hot Topic 1: Bright Spots in High-quality
+Development
+Valid portion of minority interests
+ICBC
+88
+Second, the Bank's customer base achieved bigger
+size and higher quality. During the reporting period,
+the number of either corporate customers or corporate
+accounts exceeded 10 million, a historical high. New
+corporate customers drove an increase of RMB283.8
+billion in corporate deposits and new personal customers
+First, key GBC (government, business and consumer)
+scenarios were effectively implemented. With a focus
+on 22 key scenarios including rural revitalization, basic
+living consumption and medical insurance services, the G
+(government), B (business) and C (consumer) are integrated
+and mutually promoted to achieve all-round development.
+During the reporting period, the key scenarios created
+6,994 new G-end customers (up 195% year-on-year), 473
+thousand new B-end customers (up 141% year-on-year),
+and 72.75 million new and active C-end customers
+(up 85% year-on-year), showing faster improvement
+of the customer ecosystem. G-end customers' deposits
+increased by RMB151.9 billion, B-end customers' deposits
+increased by RMB338.8 billion and payroll service for
+C-end customers amounted to RMB1.9 trillion, indicating
+remarkable results of deposit taking and customer
+attraction.
+In 2022, the Bank made solid progress in deepening the
+development of "GBC+" projects. With the construction
+of scenario-based financial services and digital marketing
+as the core means, the optimal integration of online
+and offline channels as effective support and customer
+groups such as "agriculture, rural areas and farmers",
+payroll service customers and merchants as the important
+points of breakthrough, the Bank improved the customer
+ecosystem where customers of different sizes are well
+coordinated and customers at different age groups are
+well balanced. It further optimized the D-ICBC digital
+ecosystem and the ECOS technology ecosystem, unblocked
+the internal circulation of funds and effectively achieved
+rapid growth of deposits in 2022.
+Hot Topic 3: Working Hard on "GBC+"
+Projects to Improve the Customer
+Ecosphere
+Integration, the Yangtze River Economic Belt, the
+Guangdong-Hong Kong-Macao Greater Bay Area and
+the Chengdu-Chongqing Economic Circle grew faster
+than the beginning of the year. In addition, in 2022, the
+Bank continued to deepen and improve the LPR pricing
+authorization system for classified loans and accurately
+implemented loan pricing. On the other hand, the Bank
+applied strict "access control" to new loans, maintaining a
+low NPL ratio through the year.
+Second, the allocation of credit funds became more
+targeted to further sharpen the competitive edge.
+The Bank recorded an increase of RMB775.1 billion
+in loans to new basic industries when compared with
+the beginning of the year, leading the market by both
+total size and increment, with a focus on five key areas
+(including the financing of infrastructure fund-backed
+projects and the transportation, water conservancy
+and energy network infrastructures) and the marketing
+of key projects in the 14th Five-Year Plan. Focused on
+primary responsibilities and core businesses, loans to
+manufacturing increased by nearly RMB870.0 billion
+when compared with the beginning of the year. Industry
+chain-wide financial service plans were rolled out for
+integrated circuits, the automobile industry and machinery
+and equipment. Targeted efforts were made at the
+intersection of innovation and industrial chains.
+Bank's loans to emerging industries increased by 65%
+from the beginning of the year, and loans to enterprises
+featuring "Specialization, Refinement, Differentiation
+and Innovation" increased by more than 85%. The
+inclusive service models were innovated. The Bank
+forged a "targeted, smooth and smart" new image of
+digital inclusive finance and continued to improve the
+three product lines of e-Mortgage Quick Loan, Quick
+Lending for Operation and Digital Supply Chain. The
+inclusive loans increased by more than RMB450.0 billion
+or 40% from the beginning of the year, and the number
+of customers exceeded 1 million. The green finance
+layout was optimized. The Bank built the green finance
+brand "ICBC Green Bank+", and improved the "green
+technological transformation" product line. At the end of
+2022, the balance of green loans reached nearly RMB4
+trillion, leading the banking sector in both balance and
+increment. The Bank launched the "Chunrong Action" to
+stabilize foreign trade and foreign investment. More than
+RMB1.17 trillion of new loans were issued to foreign trade
+and foreign-funded enterprises in the fields of advanced
+manufacturing, "Specialization, Refinement, Differentiation
+and Innovation" fields and domestic and foreign trade
+integration. Making the most of its global network,
+the Bank issued more than USD48.5 billion of loans to
+overseas upstream and downstream of key foreign traders
+and foreign-funded enterprises. The Bank boosted its
+competitiveness in major regional credit markets leveraging
+its strengths in comprehensive financial services, and its
+RMB loans in key regions, such as the Beijing-Tianjin-Hebei
+The
+with the structural monetary policy instruments for carbon
+emission reduction, clean and efficient use of coal, sci-tech
+innovation and transportation and logistics, and supplied
+the largest amount of funding for these fields across the
+banking sector.
+Discussion and Analysis
+87
+Annual Report 2022
+First, aggregate investment and financing grew fast
+to support profit growth. The continuity and stability of
+financing were boosted to help stabilize the economy and
+growth while maintaining strong momentum for income
+and profit growth. Total credit supply expanded. The
+Bank introduced a series of financial service policy tools,
+including 30 measures to help stabilize the macroeconomy.
+Credit supply registered higher year-on-year growth than
+a year ago, leading the banking sector in both quantity
+and quality. In 2022, the Bank's RMB denominated
+loans of domestic branches increased by RMB2.6 trillion
+from the end of last year, with the increment increased
+by RMB428.3 billion year-on-year. Quarterly growth of
+loans registered a higher year-on-year increase thanks
+to all-out, front-loaded and targeted lending at a more
+balanced pace. A combination of financing channels
+was utilized. An all-time high of more than RMB6.4
+trillion of financing was channeled into the real economy
+in the form of loans, bonds, leasing and debt-for-equity
+swaps. In addition, the Bank aligned its lending activity
+In 2022 when domestic and international situations were
+complicated by various risks and challenges, the Bank
+adhered to the principle of commercial sustainability,
+maintained a prudent risk appetite, selected customers and
+projects on the basis of merit, and effectively transmitted
+the monetary policy. Moreover, the Bank expanded the
+total supply of financial resources, boosted precise and
+direct access to funding, provided high-quality support
+for the real economy and effectively bolstered business
+development and competitiveness enhancement.
+Hot Topic 2: Serving the Real Economy as
+a Pillar to Ensure its Stable Growth
+Fourth, the "specialized" brand image was
+effectively enhanced. Loans to manufacturing, sci-tech
+innovation, green and other specialty fields registered
+faster-than-average growth, maintaining an edge over
+peers. Specifically, the balance of loans to manufacturing
+exceeded RMB3 trillion, and both the balance and
+increment of such ranked first in the industry. Total loans
+to strategic emerging industries exceeded RMB1.7 trillion.
+The balance of agriculture-related loans exceeded RMB3
+trillion.
+peers to break the mark of RMB300.0 billion, RMB350.0
+billion and RMB360.0 billion respectively, an all-time high
+topping the world.
+Third, the strengths in "large" scale were effectively
+consolidated. Scale indicators registered further
+growth. Total assets rose to nearly RMB40 trillion from
+RMB28 trillion. Total loans expanded from RMB15 trillion
+to more than RMB23 trillion. The balance of deposits
+(including deposits from banks and other financial
+institutions) exceeded RMB32 trillion from RMB23 trillion,
+leading the global banking industry. Net capital base
+grew from RMB3 trillion to RMB4 trillion. Profitability
+continued to improve. Operating income grew to
+RMB841.4 billion from RMB725.1 billion, being the
+first bank to break the mark of RMB800.0 billion in the
+domestic banking sector. Net profit rose to RMB361.0
+billion from RMB298.7 billion, the first among comparable
+First, the "strong" foundation was effectively
+cemented. The capital adequacy ratio rose to over 19%,
+remaining on the rise for 10 consecutive quarters since
+2019 and cementing the Bank's position among the
+world's top banks. Allowance to NPLs was stable at around
+200%, suggesting strong resilience to risks. Asset quality
+was further consolidated with NPL ratio standing at 1.38%
+in 2022, in a downtrend for 8 quarters in a row.
+Second, the "excellent" quality was effectively
+maintained. In 2019-2021, the Bank's return on average
+total assets ("ROA") remained above 1% and the return
+on weighted average equity ("ROE") was kept at around
+12%, both at relatively good level. Net interest margin
+("NIM") stayed above 2.1%. ROA and ROE were 0.97%
+and 11.43% in 2022, respectively, and NIM stood at
+1.92%. The Bank maintained a comparable range of
+profitability and return to those of its peers.
+Since 2019, ICBC has adhered to the
+guideline, implemented the strategy of "leveraging our
+strengths, tackling areas of weaknesses and solidifying
+the foundation", strived to be stronger, bigger and better
+in a push for high-quality development and managed to
+make its financial services more adaptable, competitive
+and inclusive. The Bank delivered better-than-expected
+results and year-on-year improvements in major
+performance indicators, showing steady progress with
+higher quality. With more evident features of high-quality
+development, ICBC has made fresh headway in its drive for
+a world-class and modern financial enterprise with Chinese
+characteristics.
+'48-character"
+HOT TOPICS IN THE CAPITAL MARKET
+Complexity
+70,371
+Number of personal customers (in 10,000)
+Cross-jurisdictional liabilities
+2,402,511
+Cross-jurisdictional claims
+jurisdictional)
+activity
+Global (cross-
+156,343
+Level 3 assets
+804,507
+7,338,366
+Notional amount of over-the-counter ("OTC") derivatives
+Trading and available-for-sale securities
+Complexity
+1,704,443
+Trading volume of listed equities and other securities
+8,676,152
+Trading volume of fixed-income securities
+2,058,880
+Underwritten transactions in debt and equity markets
+20,047,724
+640,334,459
+Payments settled via payment systems or correspondent banks
+Assets under custody
+Substitutability
+5,460,907
+Securities and other financing instruments issued
+2,244,014
+84
+ICBC
+Discussion and Analysis
+969
+13,087,091
+19,980,932
+493,730,289
+2,566,987
+3,287,766
+3,402,184
+37,292,522
+2021
+In RMB millions, unless otherwise specified
+Number of corporate customers (in 10,000)
+Intra-financial system liabilities
+Agency and commission-based business
+Securities and other financing instruments issued
+Intra-financial system liabilities
+Intra-financial system assets
+Balance of adjusted on- and off-balance sheet assets
+Indicator
+Substitutability
+Interconnectedness
+Size
+Indicator category
+In accordance with the Measures for Assessment of Systemically Important Banks issued by PBC and CBIRC and the Notice
+on Launching the Assessment Data Completion of Systemically Important Banks issued by CBIRC, the Bank calculated and
+disclosed the 2021 assessment indicators of domestic systemically important banks.
+Assessment Indicators of Domestic Systemically Important Banks
+Payments settled via payment systems or correspondent banks
+Assets under custody
+248,774
+1,013
+528,307
+18.30
+As at the end of 2022, the common equity tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy
+ratio calculated by the Bank in accordance with the Capital Regulation stood at 14.04%, 15.64% and 19.26%, respectively,
+complying with regulatory requirements.
+CAPITAL ADEQUACY RATIO
+Item
+Common equity tier 1 capital
+Paid-in capital
+Valid portion of capital reserve
+Surplus reserve
+General reserve
+18.02
+Retained profits
+2022
+In RMB millions, except for percentages
+At 31 December At 31 December
+2021
+3,141,891
+2,903,516
+356,407
+356,407
+148,174
+148,597
+392,162
+Valid portion of minority interests
+356,849
+19.60
+Capital adequacy ratio (%)
+Net tier 1 capital
+Tier 2 capital
+3,152,660
+3,241,364
+2,944,636
+Net capital base
+4,281,079
+3,945,322
+3,909,669
+19.26
+3,600,883
+14.04
+14.03
+13.31
+13.29
+Tier 1 capital adequacy ratio (%)
+15.64
+15.66
+14.94
+14.97
+Common equity tier 1 capital adequacy ratio (%)
+2,614,392
+496,406
+1,766,288
+financial institutions that are under control but not subject to
+consolidation
+Net common equity tier 1 capital
+3,121,080
+2,886,378
+Additional tier 1 capital
+Additional tier 1 capital instruments and related premiums
+354,915
+354,331
+354,986
+7,980
+354,331
+584
+Net tier 1 capital
+275,764
+Surplus provision for loan impairment
+418,415
+3,475,995
+Valid portion of tier 2 capital instruments and related premiums
+668,305
+805,084
+Valid portion of minority interests
+438,640
+7,980
+(4,202)
+1,618,142
+Discussion and Analysis
+In 2022, the Bank continued to strengthen legal risk
+management, by improving the risk prevention and control
+capacity in legal risk management, ensuring the legal
+and compliant operation, healthy business development
+and overall business stability of the Group. In accordance
+with new laws and regulations, its business rules, relevant
+agreements and system construction were improved, and
+legal risk prevention and control in key areas and links
+was further pushed forward in line with new requirements
+of financial regulators. The Bank also conducted ongoing
+monitoring of legal risks and improved both the vertical
+interconnection and horizontal coordination mechanism
+between the Head Office and branches. By systematically
+embedding legal risk prevention and control into business
+negotiations, product design, contract signing and other
+links, the Bank made risk prevention and control more
+prospective, proactive and targeted. It improved the
+cross-border coordination and management for legal
+work, strengthened the legal risk management of overseas
+institutions, and enhanced the training of legal talents for
+overseas business, thus properly responding to cross-border
+legal issues emerging in the development of international
+operations. Moreover, the Bank ameliorated the function
+design and management mechanism for the electronic
+signing system, to further enhance its risk control
+capability and usability, and effectively prevent and control
+operational risk, legal risk and reputational risk caused
+by misuse of contract seal. It continuously reinforced
+authorization management, related party management,
+trademark management and intellectual property
+protection, and made efforts to constantly institutionalize
+risk management and control, and refine the structure of
+the system. The Bank devoted great energy to strongly
+deal with lawsuit cases to protect the Bank's rights and
+interests in accordance with law and avoid and reduce risk
+losses. In addition to the active assistance in online judicial
+inquiry and enforcement, the Bank played a positive role
+in improving the efficiency of law enforcement and case
+handling by competent authorities and building a social
+credibility system.
+Money Laundering Risk
+3,293
+3,539
+Other
+(20,839)
+(18,658)
+Investments in common equity tier 1 capital instruments issued by
+Common equity tier 1 capital deductions
+17,138
+Goodwill
+8,320
+7,691
+Other intangible assets other than land use rights
+7,473
+5,669
+Cash flow hedge reserve that relates to the hedging of items that are
+not fair-valued on the balance sheet
+(2,962)
+20,811
+2,886,378
+3,475,995
+3,121,080
+16.0%
+20.0%
+Unit: RMB100 millions, %
+Capital adequacy ratio
+The Bank calculated its capital adequacy ratios at
+all levels in accordance with the Capital Regulation.
+According to the scope of implementing the advanced
+capital management approaches as approved by the
+regulatory authorities, the Bank adopted the foundation
+internal ratings-based ("IRB") approach for corporate
+credit risk, the IRB approach for retail credit risk, the
+internal model approach ("IMA") for market risk, and
+the standardized approach for operational risk meeting
+regulatory requirements. The weighted approach was
+adopted for credit risk uncovered by the IRB approach and
+the standardized approach was adopted for market risk
+uncovered by the IMA.
+Capital Adequacy Ratio and Leverage
+Ratio
+the cost of capital, thus laying a solid capital foundation
+for the Bank to enhance its market competitiveness and
+serve the real economy. In 2022, all capital indicators
+performed well, of which capital adequacy ratio was kept
+at a sound and appropriate level.
+In 2022, the Bank established and refined the lean
+capital management, continuously improved scientific
+capital raising, efficient allocation, precise measurement,
+long-term constraint and normal optimization management
+mechanism, and continued to elevate the capital use
+efficiency. It improved the long-term capital replenishment
+mechanism, optimized the capital structure and reduced
+The Bank implements a group-based capital management
+mechanism, and takes capital as the object and an
+instrument for its management activities, including
+planning, measurement, allocation, application and
+operation. The Bank's capital management aims at
+maintaining appropriate capital adequacy ratio and
+continuously meeting capital supervisory regulations
+and policies; ceaselessly strengthening and enhancing
+the capital base and supporting business growth and
+implementation of strategic planning; establishing a
+value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism
+and improving capital allocation efficiency; innovating
+and expanding capital replenishment channels, raising
+capital quality and optimizing capital structure. The Bank's
+capital management covers various operating entities in
+the Group, and its contents include capital adequacy ratio
+management, economic capital management, capital
+investment and financing management.
+Discussion and Analysis
+CAPITAL MANAGEMENT
+ICBC
+80
+2,824,565
+The Bank strictly observes regulatory requirements on
+country risk management. The Board of Directors assumes
+the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible
+for executing the country risk management policies
+approved by the Board of Directors. The Risk Management
+Committee of the Head Office is responsible for reviewing
+matters regarding country risk management. The Bank
+manages and controls country risk with a series of tools,
+including country risk assessment and rating, country risk
+limit, country risk exposure monitoring and stress testing.
+The Bank reviews the country risk rating and limits at least
+once every year.
+Country risk is the risk incurred to a bank arising from
+the inability or refusal by the debtor to repay bank debt,
+losses suffered by the Bank or its commercial presence in
+such country or region and other losses due to political,
+economic and social changes and events in a country or
+a region. Country risk may be triggered by deterioration
+of economic conditions, political and social turmoil, asset
+nationalization or expropriation, government's refusal to
+pay external debt, foreign exchange control or currency
+depreciation in a country or a region.
+Country Risk
+In 2022, the Bank deepened the implementation of
+the Group's reputational risk management rules and
+requirements, continuously improved the group-wide
+and whole-process reputational risk management system
+and kept optimizing the reputational risk working
+mechanism, for the constant improvement of reputational
+risk management. It strengthened the normalization
+of reputational risk management, consolidated the
+responsibilities of management entities, and intensified
+the prevention and control of risk sources, to elevate
+the quality and efficiency of management. In addition,
+regarding the issues of social focusing, the Bank timely
+responded to social concerns, organized and promoted
+influential brand communication activities, to enhance
+the Bank's brand image. During the reporting period, the
+reputational risk of the Bank stood in a controllable range.
+The Board of Directors is responsible for reviewing and
+finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of
+the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and
+effectiveness of reputational risk management across
+the Bank and assuming the ultimate responsibility for
+reputational risk management. The Senior Management
+is responsible for leading reputational risk management
+of the Bank, implementing the strategies and policies
+established by the Board of Directors, reviewing and
+finalizing the rules, measures and operating procedures
+for reputational risk management, preparing plans for
+responding to and coping with extraordinarily major
+reputational risk events and ensuring the proper and
+effective operation of the reputational risk management
+system. The Bank has established a special reputational
+risk management team to take charge of the daily
+management of reputational risk.
+Discussion and Analysis
+79
+Annual Report 2022
+Reputational risk is defined as the risk of negative
+comments on the Bank from stakeholders, the public
+or the media as a result of the behaviors of the Bank
+or practitioners or external events and so on, thereby
+damaging brand value, detrimental to normal operation,
+and even affecting market and social stability. Reputational
+risk may arise in any part of the Bank's operation and
+management, and usually co-exists and correlates with
+credit risk, market risk, operational risk and liquidity
+risk. Good reputation is central to the operation and
+management of a commercial bank. The Bank highly
+values its reputation and has incorporated reputational
+risk management in the corporate governance and
+enterprise-wide risk management system to prevent
+reputational risk.
+Reputational Risk
+In strict compliance with anti-money laundering ("AML")
+laws and regulations of China and host countries
+(regions) of overseas institutions, the Bank sincerely
+fulfilled the legal obligations and social responsibilities
+concerning AML. Focusing on foundation solidifying,
+technology-driven empowerment and team building,
+the Bank reinforced the Group's money laundering risk
+management in a planned manner. It enhanced domestic
+institutions' capabilities in solidifying foundation for AML
+and established an AML customer due diligence system. It
+promoted the construction of a long-term mechanism for
+overseas AML management, and set up a sanction-related
+risk management framework. To appropriately implement
+money laundering risk assessment, the Bank also built
+a new AML ecosystem and big data supervision and
+management system. Besides, the campaign of "AML
+Training and Publicity Season" was launched to effectively
+enhance the ability of employees to perform AML
+responsibilities, and strengthen the public's awareness
+of resisting money laundering crimes and intensifying
+self-protection. With these efforts, the quality and
+efficiency of AML has been further improved.
+12.0%
+8.0%
+In 2022, the Bank strictly abode by regulatory requirements
+and, with consideration of its business development
+needs, continued to strengthen country risk management,
+facing the increasingly complicated and severe external
+environment. The Bank closely observed changes in
+country risk exposures, constantly tracked, monitored and
+reported country risk, and timely updated and adjusted the
+country risk rating and limits. It continued to strengthen
+early warning mechanism for country risk, proactively
+conducted stress testing on country risk and reasonably
+and effectively controlled country risk while steadily
+promoting internationalization.
+18.02%
+2021
+2022
+Annual Report 2022
+81
+Discussion and Analysis
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+0
+In RMB millions, except for percentages
+At 31 December 2021
+Item
+Net common equity tier 1 capital
+Group
+Parent Company
+Group Parent Company
+4.0%
+At 31 December 2022
+0
+655
+3,241,364
+Net capital base
+45,000
+36,000
+◆ Capital adequacy ratio
+27,000
+19.26%
+9,000
+• Net common equity tier 1 capital
+Net tier 1 capital
+18,000
+Excellence
+Contents
+Discussion and Analysis
+Major Ranking and Rewards in 2023
+Important Notice
+Corporate Information
+Financial Highlights
+Chairman's Statement
+Definitions
+62
+Risk Management
+Innovation
+Capital Management
+78
+Outlook
+83
+Hot Topics in the Capital Market
+84
+Highlights of High-quality
+4567821
+Prudence
+To build a world-class modern
+financial institution with Chinese
+characteristics in all aspects, and
+become a long-lasting and ever-
+prosperous bank
+Integrity
+ICBC upholds the Party's leadership over the
+financial work, and strives to improve the scientific
+decision-making as well as the effectiveness of
+corporate governance through enhanced governance
+system and capacity building.
+Adhere to technology-driven
+development and value creation
+ICBC
+empowers its business operations and
+management with FinTech, and creates superior
+value for the real economy, shareholders, customers,
+employees and the society as a whole.
+Adhere to pushing for pragmatic
+business transformation and
+progressing through reform
+Keeping pace with changing times, ICBC endeavors
+to advance reforms in key areas and critical
+steps, seeking room for development through
+transformation and vitality for growth through
+reform.
+Adhere to putting
+the customer first and
+serving the real economy
+The 2023 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by
+Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu in accordance with Chinese and
+International Standards on Auditing respectively, with unqualified auditors' reports being issued.
+Adhere to a broad international
+vision and globalized operations
+Humanity
+ICBC proactively taps resources from both domestic
+and overseas markets, and undertakes to constantly
+promote international development, which well-
+integrates with China's high-level opening-up.
+MISSION
+Excellence for You
+Excellent services for clients
+Maximum returns to shareholders
+Real success for employees
+Great contribution to society
+VISION
+VALUES
+Integrity Leads to Prosperity
+ICBC safeguards the lifeline of asset quality by
+reinforcing bottom-line thinking with a combination
+of prevention and control measures. Meanwhile,
+corporate culture formation and caring for staff are
+strengthened to increase group cohesion.
+Adhere to laying a solid
+foundation for risk control and
+achieving development through
+talent cultivation
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB3.064 (pre-tax) for each
+ten shares for 2023. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2023.
+The Bank did not convert capital reserve to share capital.
+Adhere to the guidance of
+the Party building theory and
+exercising rigorous corporate
+governance
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+The Stock Exchange of Hong Kong Limited
+Shanghai Stock Exchange
+National Council for Social Security Fund
+Standard Bank Group Limited
+The State Council of the People's Republic of China
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial Bank
+of China Limited and its subsidiaries
+4
+Annual Report 2023
+Major Ranking and Rewards in 2023
+Ranking
+the
+st
+1st
+place
+Ranking
+the
+1ST
+st
+place
+Ranking
+the
+Accounting Standards for Business Enterprises promulgated by MOF
+The People's Bank of China
+National Financial Regulatory Administration
+Ministry of Finance of the People's Republic of China
+NFRA
+PBC
+PRC GAAP
+Securities and Futures Ordinance of
+Hong Kong
+SEHK
+SSE
+SSF
+Standard Bank
+Among the Top 1000 World
+Banks for the eleventh
+consecutive year
+State Council
+ICBC International Holdings Limited
+ICBC Financial Asset Investment Co., Ltd.
+ICBC Investments Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión
+ICBC Financial Leasing Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Wealth Management Co., Ltd.
+ICBC-AXA Assurance Co., Ltd.
+Industrial and Commercial Bank of China Financial Services LLC
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting Standards
+Inversora Diagonal S.A.
+The Bank/The Group
+MOF
+The Banker
+Among commercial banks
+in the Global 500 for the
+eleventh consecutive year
+Best Custodian Bank,
+China
+HE Asset #
+The Asset
+財
+資
+AA
+MSCI ESG Ratings
+MSCI
+Best Wealth Management Bank in
+Asia Pacific
+Green and Sustainable Bank of the
+Year in China
+Best International Cash
+Management Bank in China
+亚洲银行家
+THE ASIAN BANKER®
+The Asian Banker
+Best Domestic Bank in China
+Best Corporate Bank in China
+Best Bank for Digital Solutions
+in China
+Asiamoney
+Best Inclusive Financial
+Service Bank of the Year
+Best Private Bank, China
+Digital Bank of the Year,
+China
+China Banking
+Association
+CHINA BANKING ASSOCIATION
+Fortune
+1st
+place
+Among the Top 500
+Banking Brands for the
+eighth consecutive year
+Brand FinanceⓇ
+Brand Finance
+Ranking
+the
+1st
+place
+The Banker
+In the "Corporate Brand
+Value List" for the
+eighth time
+Best Bank in China
+Best Corporate Bank in China
+Best Bank for Belt and Road in
+China
+GLOBAL
+FINANCE
+Global Finance
+st
+Ranking
+the
+1st
+place
+In the GYROSCOPE assessment
+system among national
+commercial banks for the
+third consecutive year
+● 中国银行业协会
+China Council for
+Brand Development
+Corporate Governance Report
+Inversora Diagonal
+ICBCFS
+Significant Events
+141
+Organizational Chart
+143
+Auditor's Report and Financial
+54
+Statements
+144
+List of Domestic and Overseas
+57
+Branches and Offices
+319
+60
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Articles of Association
+Bank ICBC (JSC)
+Capital Regulation (Provisional)
+Capital Regulation/New Capital
+135
+Responsibilities
+Environmental and Social
+133
+Strategic Significance
+Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ICBC will adhere to
+the general working principle of pursuing progress while ensuring stability, fully and faithfully apply
+the new development philosophy on all fronts, modernize its governance system and capacity,
+and turn ICBC into a world-class and modern financial enterprise with Chinese characteristics.
+Strategic Objective
+The Bank was ranked the 1st place among the Top 1000
+World Banks by The Banker and the 1st place in the list
+of commercial banks of the Global 500 in Fortune for
+the eleventh consecutive year, and took the 1st place
+among the Top 500 Banking Brands of Brand Finance
+for the eighth consecutive year.
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its
+capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and
+following the business rules of commercial banks to
+strive to be a long-lasting and ever-prosperous bank.
+It also stays committed to seeking progress with
+innovation while maintaining stability, continuously
+enhances the key development strategies, actively
+develops the FinTech and accelerates the digital
+transformation. The Bank unswervingly delivers
+specialized services, and pioneers a specialized business
+model, thus making it "a craftsman in large banking".
+The Bank has devoted itself to building a world-
+class and modern financial enterprise with Chinese
+characteristics. The Bank has a high-quality customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek further
+development and adheres to creating value through
+services while providing abundant financial products
+and superior financial services to over 12.05 million
+corporate customers and 740 million personal
+customers around the world. It has served the high-
+quality development of the economy and society
+with its own high-quality development. The Bank has
+been consciously integrating social responsibilities
+into its development strategy and operation and
+management activities, and gaining wide recognition
+in the aspects of serving the manufacturing industry,
+promoting inclusive finance, backing rural revitalization,
+developing green finance and participating in public
+welfare undertakings.
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured into a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Company Profile
+Annual Report
+Regulation
+2023
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+L
+ΠΠ
+ICBC E
+110
+Report of the Board of Directors
+129
+45
+Report of the Board of Supervisors
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+IFRSS
+CSRC
+HKEX
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Asia) Limited
+ICBC Austria Bank GmbH
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (New Zealand) Limited
+ICBC PERU BANK
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China (USA) NA
+ICBC Credit Suisse Asset Management ICBC Credit Suisse Asset Management Co., Ltd.
+ICBC International
+ICBC Investment
+ICBC Investments Argentina
+ICBC Leasing
+ICBC Standard Bank
+ICBC Wealth Management
+ICBC-AXA
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Hong Kong Exchanges and Clearing Limited
+Former China Banking and Insurance Regulatory Commission
+Hong Kong Listing Rules
+Huijin
+ICBC (Almaty)
+ICBC (Argentina)
+ICBC (Asia)
+ICBC (Austria)
+ICBC (Brasil)
+ICBC (Canada)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (London)
+Former CBIRC
+ICBC (Macau)
+ICBC (Mexico)
+ICBC (New Zealand)
+ICBC (Peru)
+ICBC (Thai)
+ICBC (Turkey)
+ICBC (USA)
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (joint stock company)
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated in June 2012
+Regulation Governing Capital of Commercial Banks
+China Securities Regulatory Commission
+ICBC (Malaysia)
+2447 258
+ICBC remains steadfast in serving the real economy
+and commits to satisfying people's new expectations
+and demands for financial services, making every
+effort to build the No.1 Personal Bank.
+49
+44,697,079 RMB million
+Unit: RMB millions
+Total assets
+2023
+2022
+2021
+III
+362,110 365,116
+350,216
+365,116 RMB million
+Unit: RMB millions
+Net profit
+Financial Highlights
+7
+Annual Report 2023
+35/F, One Pacific Place, 88 Queensway, Hong Kong SAR, China
+Deloitte Touche Tohmatsu
+Deloitte Touche Tohmatsu Certified Public Accountants LLP
+30/F, 222 East Yan'an Road, Huangpu District, Shanghai, China
+CPAs (Practicing): Wu Weijun and Zeng Hao
+Domestic Auditor
+Name and office address of Auditors
+Stock code: 4620
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC 20USDPREF
+Offshore Preference Share
+Stock code: 360036
+Stock name: 12
+Stock code: 360011
+Stock name: 1
+Shanghai Stock Exchange
+Domestic Preference Share
+44,697,079
+Stock code: 1398
+39,610,146
+2021
+20%
+3%
+18.02%
+19.10%
+19.26%
+Unit: %
+Unit: %
+Capital adequacy ratio
+Non-performing loans ("NPLs") ratio
+2023
+2022
+2021
+26,441,774
+29,870,491
+33,521,174
+2023
+2022
+2021
+20,667,245
+23,210,376
+26,086,482
+33,521,174 RMB million
+Unit: RMB millions
+Due to customers
+26,086,482 RMB million
+Unit: RMB millions
+Total loans and advances to customers
+2023
+2022
+35,171,383
+16%
+Stock name: ICBC
+H Share
+Facsimile: 86-10-66107571
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Guan Xueqing
+Board Secretary and Company Secretary
+Liao Lin and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong SAR, China
+Principal place of business in Hong Kong SAR, China
+Business enquiry and complaint hotline: 86-95588
+Website: www.icbc.com.cn, www.icbc-ltd.com
+51
+The Board of Directors of Industrial and Commercial Bank of China Limited
+27 March 2024
+Mr. Liao Lin, Legal Representative and Person in charge of finance of the Bank, and Mr. Xu Zhisheng, Person in charge of
+Finance and Accounting Department of the Bank, hereby warrant that the financial statements contained in the Annual
+Report are authentic, accurate and complete.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis Risk Management" for detailed information.
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+6
+Annual Report 2023
+Corporate Information
+Legal name in Chinese
+中國工商銀行股份有限公司(“中國工商銀行")
+Legal name in English
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal Representative
+Liao Lin
+Registered address and office address
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Telephone: 86-10-66106114
+E-mail: ir@icbc.com.cn
+The Stock Exchange of Hong Kong Limited
+Selected newspaper for information disclosure
+Website of SSE for disclosure of
+Stock code: 601398
+Stock name: 工商銀行
+Shanghai Stock Exchange
+Place where shares are listed, and their names and codes
+A Share
+Board of Directors' Office of the Bank
+Location where copies of this annual report are kept
+Facsimile: 852-28650990
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong SAR, China
+Telephone: 852-28628555
+Computershare Hong Kong Investor Services Limited
+H Share
+188 Yanggao South Road, Pudong New Area, Shanghai, China
+Telephone: 86-4008058058
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+A Share
+Share Registrars
+Hong Kong SAR, China
+11th Floor, Alexandra House, Chater Road, Central,
+Linklaters LLP
+25th Floor, Three Exchange Square, 8 Connaught Place,
+Central, Hong Kong SAR, China
+DLA Piper
+Hong Kong SAR, China
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Haiwen & Partners
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+King & Wood Mallesons
+Chinese mainland
+Legal Advisors
+The "HKEXnews" website of HKEX for disclosure of
+the annual report in respect of H shares
+www.hkexnews.hk
+www.sse.com.cn
+the annual report in respect of A shares
+China Securities Journal, Shanghai Securities News,
+Securities Times, Economic Information Daily
+2%
+International Auditor
+1.38%
+87
+Asset Quality
+32
+Enterprise Risk Management and
+17
+85
+Real Economy
+15
+57223
+Personal Banking
+Solidifying the Ecological
+Corporate Banking
+Financial Statements Analysis
+Regulatory Environments
+and Efficiency of Serving the
+Economic, Financial and
+Constantly Improving the Quality
+84
+Development
+Best Green Finance Service
+Bank of the Year
+金融时报
+FINANCIAL NEWS
+Business Overview
+Special Column: New
+Breakthroughs Made in
+Personal Wealth Management
+Major Controlled Subsidiaries and
+Equity Participating Company
+1.42%
+Comprehensive Operation and
+Subsidiary Management
+Human Resources Management,
+Employees and Institutions
+Improvement
+International Operation
+Outlet Building and Service
+Internet Finance
+FinTech
+43
+Financial Market Business
+Pension Finance Service
+101
+Management
+Achievements Made in
+Directors, Supervisors and Senior
+Special Column: Great
+93
+90
+88
+Foundation by GBC+ Projects
+Continuous Deepening of D-ICBC
+Details of Changes in Share Capital
+and Shareholding of Substantial
+Shareholders
+Asset Management Services
+39
+Financial News
+Institution of Excellence in
+41
+2022
+28.28%
+27.22%
+213.97%
+205.84% 209.47%
+40%
+Unit: %
+Allowance to NPLs
+Unit: %
+Cost-to-income ratio
+80
+200%
+2023
+2023
+2022
+2021
+0
+0
+4%
+1%
+8%
+1.36%
+Financial Innovation
+2021
+30% 26.36%
+250%
+20%
+EBA
+CHINESE
+银行家
+The Chinese Banker
+The Chinese Banker
+Annual Report 2023
+150%
+Important Notice
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+The 2023 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 27 March 2024. All directors of the Bank attended the meeting.
+Annual Report 2023
+2023
+5
+12%
+2021
+2023
+2022
+2021
+0
+0
+50%
+10%
+2022
+100%
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+BANK
+Unit: Share
+Name of shareholder
+Nature of
+shareholder
+USD offshore
+preference shares
+Shares held
+at the end
+Class of shares
+period
+Foreign legal person
+of the
+period
+145,000,000
+As at the end of the reporting period, the Bank had one offshore preference shareholder (or proxy), 27 domestic
+preference shareholders of "1" and 37 domestic preference shareholders of "I". As at the end of the month
+immediately before the annual results announcement date (29 February 2024), the Bank had one offshore preference
+shareholder (or proxy), 29 domestic preference shareholders of "1" and 37 domestic preference shareholders of "I
+行優2”.
+Increase/
+decrease
+during the
+reporting
+The Bank of New York Depository
+(Nominees) Limited
+Name of shareholder
+The Bank did not issue any preference shares in the past three years.
+Issuance and Listing of Preference Shares in the Past Three Years
+Preference Shares
+According to the information provided by SSF to the Bank, SSF held 6,836,411,180 H shares of the Bank as at the end of the
+reporting period, accounting for 7.88% of the Bank's H shares and 1.92% of the Bank's total ordinary shares.
+Due to rounding, percentages presented herein are for reference only.
+As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on
+behalf of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as
+investment manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by
+Ping An Asset Management Co., Ltd. for the period ended 31 December 2023 (the date of relevant event being 31 January
+2023). Both Ping An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of
+Ping An Insurance (Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise
+the voting rights in respect of such shares on behalf of customers and independently exercise the rights of investment and
+business management in its capacity as investment manager, and is completely independent from Ping An Insurance (Group)
+Company of China, Ltd., Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in
+such shares as a holding company under the aggregation exemption and disclosing the holding of the same in accordance
+with the Securities and Futures Ordinance of Hong Kong.
+(3)
+(2)
+Notes: (1)
+corporations
+1.70
+6.99
+Long position
+Shareholding
+percentage
+6,065,074,305
+Number of Preference Shareholders and Particulars of Shareholding
+Number
+of shares
+subject to
+at the end
+of the
+pledged/
+1.95
+marked
+restrictions
+locked-up/
+pledged/
+Number of
+Number
+of shares
+subject to
+Shareholding
+percentage
+during the
+reporting
+Shares held
+Increase/
+decrease
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I1″
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+97
+Annual Report 2023
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+(3) The Bank is not aware of any connected relations or acting-in-concert relations between the aforementioned preference
+shareholder and top 10 ordinary shareholders.
+The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2023.
+(2) As the issuance of the offshore preference shares above was non-public offering, the register of preference shareholders
+presented the information on the registered holder of the offshore preference shares.
+(1)
+Notes:
+Unknown
+100
+shares
+on sales
+(%)
+marked
+restrictions
+locked-up/
+Number of
+7.99
+124,731,774,651
+110,984,806,678
+6,938,013,180
+HOLDERS OF H SHARES
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Annual Report 2023
+96
+As at 31 December 2023, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+Due to rounding, percentages presented herein are for reference only.
+(2)
+According to the register of shareholders of the Bank, as at 31 December 2023, Huijin held 124,004,660,940 shares in the
+Bank, while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+Notes: (1)
+31.14
+41.16
+Long position
+35.00
+46.26
+shares (%)
+34.71
+0.28
+Percentage of
+total ordinary
+45.89
+0.38
+1,013,921,700 Long position
+Percentage of
+A shares (%)
+Nature of
+interests
+Long position
+123,717,852,951
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+Huijin(¹)
+MOF
+Capacity
+Beneficial owner
+Interest of controlled
+corporations
+Total
+Beneficial owner
+Number of
+A shares held
+(share)
+Nature of shareholder
+Name of substantial
+shareholder
+Ping An Asset Management
+Co., Ltd. (1)
+Capacity
+Investment manager
+Beneficial owner
+Interest of controlled
+31.34%
+40.11%
+80.00%
+53.95%
+20.00%
+30.76%
+13.30%
+14.54%
+Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary
+Central Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015
+in Beijing. With a registered capital of RMB5 billion, the company runs an asset management business.
+Annual Report 2023
+95
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 31.14% shares of the Bank as at 31
+December 2023. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+Long position
+Particulars of Other Substantial Shareholders
+Particulars of the De Facto Controller
+None.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions Pursuant to
+Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong Kong
+20.05%
+Temasek Holdings (Private)
+Limited
+SSF(2)
+3.41
+shares (%)
+13.98
+Percentage of
+total ordinary
+Percentage of
+H shares (%)
+Nature of
+interests
+Long position
+12,137,786,000
+Number of
+H shares held
+(share)
+SSF. SSF owned 5.38% of the shares of the Bank as at 31 December 2023. Founded in August 2000, SSF is a public service
+institution administered by MOF, having its address at South Tower, Building 11, Fenghuiyuan Fenghui Times Building,
+Xicheng District, Beijing, China, and its legal representative being Liu Wei. With the approval of the State Council and
+pursuant to regulations of MOF and the Ministry of Human Resources and Social Security, SSF has been entrusted to
+manage the following funds: the National Social Security Fund, the subsidy from central government to individual accounts,
+part of the surplus of the enterprise employee's basic pension insurance, basic pension insurance fund and the partial state-
+owned capital transferred.
+Class of shares
+Domestic preference shares
+period
+locked-up/
+marked
+(%)
+on sales
+shares
+17.1
+None
+Limited
+Hwabao Trust Co., Ltd.
+State-owned legal person
+112,750,000
+16.1
+None
+China Mobile Communications
+State-owned legal person
+pledged/
+Domestic preference shares
+Unit: Share
+Number of
+Shareholding
+percentage
+None
+legal person
+Notes: (1)
+(2)
+(3)
+The above data are based on the Bank's register of domestic preference shareholders of "If1" as at 31 December 2023.
+China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are
+both wholly-owned subsidiaries of China National Tobacco Corporation. Ping An Life Insurance Company of China, Ltd. and
+Ping An Property & Casualty Insurance Company of China, Ltd. have connected relations. Save as disclosed above, the Bank
+is not aware of any connected relations or acting-in-concert relations among the aforementioned preference shareholders
+and among the aforementioned preference shareholders and top 10 ordinary shareholders.
+"Shareholding percentage" refers to the percentage of domestic preference shares of "I1" held by preference
+shareholders in total number (450 million shares) of domestic preference shares of "Iíƒ1″.
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I"
+Name of shareholder
+Nature of shareholder
+China Life Insurance Company
+State-owned legal person
+Class of shares
+Domestic preference shares
+Increase/
+decrease
+during the
+reporting
+period
+Shares held
+at the end
+of the
+period
+120,000,000
+Number
+of shares
+subject to
+restrictions
+2.2
+100,000,000
+None
+None
+27,600,000
+30,700,000
+4.4
+None
+Other entities
+Domestic non-state-owned
+legal person
+Domestic preference shares
+Domestic preference shares
+30,000,000
+4.3
+None
+15,000,000
+2.1
+None
+98
+Annual Report 2023
+5.3
+14.3
+37,250,000
+7.1
+Group Co., Ltd.
+CCB Trust Co., Ltd.
+BOC International (China) Co., Ltd.
+China National Tobacco Corporation
+Jiangsu International Trust Co., Ltd.
+Everbright Securities Asset
+Management Co., Ltd.
+Shanghai Tobacco Group Co., Ltd.
+Ping An Property & Casualty
+Insurance Company of China, Ltd.
+State-owned legal person
+State-owned legal person
+Other entities
+State-owned legal person
+State-owned legal person
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+64,000,000
+9.1
+None
+-17,500,000
+52,500,000
+7.5
+None
+50,000,000
+None
+period
+10,000,000
+Domestic non-state-owned
+7.8
+None
+Ping An Life Insurance Company
+of China, Ltd.
+CCB Trust Co., Ltd.
+Domestic non-state-owned
+legal person
+State-owned legal person
+Domestic preference shares
+30,000,000
+6.7
+None
+Domestic preference shares
+15,000,000
+3.3
+None
+BOC International (China) Co., Ltd.
+State-owned legal person
+35,000,000
+Domestic preference shares
+Domestic preference shares
+None
+(%)
+on sales
+shares
+China Mobile Communications
+Group Co., Ltd.
+State-owned legal person
+Domestic preference shares
+200,000,000
+44.4
+None
+China National Tobacco Corporation
+China Life Insurance Company Limited
+Other entities
+Domestic preference shares
+50,000,000
+11.1
+State-owned legal person
+Domestic preference shares
+15,000,000
+None
+11,200,000
+2.5
+None
+legal person
+Other entities
+Domestic preference shares
+10,000,000
+2.2
+None
+Other entities
+Domestic preference shares
+10,000,000
+2.2
+None
+Ping An Property & Casualty Insurance
+Company of China, Ltd.
+-6,800,000
+3.3
+Domestic preference shares
+None
+Hwabao Trust Co., Ltd.
+State-owned legal person
+Management Co., Ltd.
+Sun Life Everbright Asset
+BOCOM Schroders Asset
+Management Co., Ltd.
+China National Tobacco Corporation
+Shandong Branch
+China National Tobacco Corporation
+Heilongjiang Branch
+State-owned legal person
+Domestic preference shares
+Domestic preference shares
+13,110,000
+2.9
+None
+11,715,000
+11,715,000
+2.6
+Domestic non-state-owned
+69.07%
+The above data are based on the Bank's register of shareholders as at 31 December 2023.
+The Bank had no shares subject to restrictions on sales.
+71.56%
+At 31 December 2023
+Percentage
+(%)
+Percentage
+(%)
+during the
+reporting period
+Number of shares
+on sales
+II. Shares not subject to
+356,406,257,089
+100.00
+restrictions on sales
+1. RMB-denominated ordinary
+shares
+269,612,212,539
+75.65
+2. Foreign shares listed
+86,794,044,550
+Unit: Share
+24.35
+Increase/decrease
+At 31 December 2022
+Third, continuously consolidating business support
+system and enhancing enterprise-level digital
+capacity. The digital product system has been increasingly
+rich. The Bank leveraged its advantages of a global
+clearing network to upgrade global cash management
+services such as "ICBC Global Pay", providing strong
+support for the global operation and digital transformation
+of multinational institutions. The Bank enhanced the
+capability of one-stop, comprehensive, and digital
+services for enterprises' financial and asset management,
+continuously improved the treasury service system, and
+assisted in building the treasury system for large and
+medium-sized customers. It has served more than 200
+large group customers, maintaining a leading position
+in the industry. The Bank optimized cloud services such
+as financial and asset management cloud, assisted small
+and medium-sized enterprises in digital transformation,
+and provided financial digital services for more than five
+thousand enterprises cumulatively. The Bank launched the
+enterprise manager cloud for micro, small and medium-
+sized enterprises, and developed four service segments:
+Salary Manager, Account Manager, Bill Manager, and
+Fee Manager, to comprehensively empower the digital
+transformation of medium, small and micro customers.
+As at the end of 2023, 37 branches had completed
+platform registration for 180 thousand customers.
+The Bank strengthened the supply of digital inclusive
+products, launched a new product "Personal e-Enterprise
+Quick Loan" for self-employed businesses, farmers and
+other customers in an innovative way, and upgraded
+and optimized digital inclusive products such as Quick
+Lending for Operation, Online Revolving Loan, and
+Digital Supply Chain, to fully meet the needs of small and
+micro enterprises for credit, collateral, and transaction
+financing. As at the end of 2023, the balance of inclusive
+loans exceeded RMB2.2 trillion, maintaining a leading
+position among peers in terms of growth rate. The Bank
+established a sound digital operation system, continuously
+polished the three digital operation platforms of personal,
+corporate, and online banking, and enhanced the
+capability of enterprise-level customers, products, flows,
+activities, data, and overall collaborative operation. In
+2023, over 70 thousand digital operation strategies were
+deployed, with a focus on intensive operations for mid-
+Annual Report 2023
+91
+Discussion and Analysis
+tier and long-tail customers, driving the sales of funds,
+insurance, and wealth management products to over
+RMB540.0 billion on online platforms. The Bank enhanced
+enterprise risk management capability and advanced
+the intelligent transformation of risk management. The
+Bank upgraded the enterprise-level risk data platform,
+strengthened data penetration within the Group, and
+achieved the "Five-pronged Risk Management Approach"
+view. The Bank improved the joint risk prevention and
+control system, and significantly reduced the accounts
+involved in telecommunications fraud. The Bank offered
+risk prevention and control tools and services to over 400
+peers, improving overall risk prevention and control in the
+industry.
+effective
+Fourth, continuously consolidating data technology
+support system and promoting the
+empowerment of dual elements. In terms of data
+support, new progress has been made in the cultivation
+of data capabilities. The Bank won the title of "2022
+Top Ten Brand-name Enterprises for Data Management"
+at the China Data Governance Annual Conference. It
+also won the award of the "Best Data Management
+Implementation" conferred by The Asian Banker. The
+Bank strengthened the construction of an enterprise-
+level data middle office, and introduced more external
+data such as government affairs, operators and internet
+companies in compliance with regulations. The Bank
+established an operation center for the data middle office
+to drive business model transformation with richer data
+elements and new data service models. Focusing on
+digital customer identification, acquisition, activation and
+retention, the Bank promoted high-value data analysis
+products to empower grassroots and reduce their burden.
+The Bank's customer segmentation project was awarded
+the "Best Data Analysis Project" by The Asset. Its data
+security management kept improving. In terms of technical
+support system, the Bank took the lead in the industry
+to complete the largest and most important technical
+architecture transformation of retail banking segment.
+The availability rate of the Bank's information system has
+reached a high level of over 99.99%. A high-availability
+and disaster recovery guarantee system has been refined
+to systematically enhance cyber security capabilities.
+The Bank was the first among domestic peers to build a
+billion-level Al big model technology system and put it
+into operation. It continued to deepen the construction of
+digital employees, undertaking the workload of more than
+30 thousand natural persons in various scenarios, so as to
+empower employees and reduce their burden.
+92
+2
+Annual Report 2023
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+Changes in Ordinary Shares
+DETAILS OF CHANGES IN SHARE CAPITAL
+1. Shares subject to restrictions
+Number of shares
+overseas
+356,406,257,089
+100.00
+Number of Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had a total number of 646,115 ordinary shareholders and no holders of
+preference shares with voting rights restored or holders of shares with special voting rights, including 108,162 holders of H
+shares and 537,953 holders of A shares. As at the end of the month immediately before the annual results announcement
+date (29 February 2024), the Bank had a total number of 605,300 ordinary shareholders and no holders of preference
+shares with voting rights restored or holders of shares with special voting rights.
+Annual Report 2023
+93
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Unit: Share
+Increase/
+decrease of
+shares during
+Number of
+Number of
+shares held
+pledged/
+Shareholding
+locked-up/
+Class of
+the reporting
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 36. to the Consolidated
+Financial Statements: Debt Securities Issued; Note 39. to the Consolidated Financial Statements: Other Equity Instruments"
+for details.
+For details on the issuance progress of tier 2 capital bonds and undated additional tier 1 capital bonds of the Bank during
+the reporting period, please refer to the section headed "Discussion and Analysis - Capital Management".
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in
+Share Capital and Shareholding of Substantial Shareholders - Preference Shares".
+During the reporting period, the Bank did not issue any shares, did not have any employee shares, employee stock
+ownership plan, did not issue any convertible bonds, or corporate bonds to be disclosed in accordance with Chapter II,
+Section 9 of the "No. 2 Standards on the Content and Format of Information Disclosure of Companies with Public Offerings
+Content and Format of the Annual Report (Revision 2021)" issued by CSRC.
+356,406,257,089
+100.00
+269,612,212,539
+75.65
+86,794,044,550
+24.35
+356,406,257,089
+integration of marketing tasks, business performance,
+portrait views, and entrance of contact points. The smart
+office platform launched a brand-new version of ICBC
+e Office 5.0 centered on users, and promoted a series
+of user experience services such as "My To-do List" and
+"Satisfaction Assessment". It accelerated the integration
+and satisfactory operation of platforms and systems,
+greatly simplified office procedures, and improved
+employees' work efficiency.
+100.00
+Notes: (1)
+(2)
+(3)
+The above data are based on the Equity Structure Chart issued by China Securities Depository and Clearing Corporation
+Limited.
+"Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the
+Content and Format of Information Disclosure of Companies with Public Offerings -Content and Format of the Report of
+Change in Corporate Shareholding" (Revision 2022) of CSRC.
+Due to rounding, percentages presented herein are for reference only.
+Details of Securities Issuance and Listing
+III. Total number of shares
+at the end of
+First, continuously improving customer service system
+and strengthening external service platforms to
+better empower market expansion. In terms of open
+banking, the Bank developed comprehensive solutions
+for financial empowerment and value transformation,
+and deepened innovation cooperation, focusing on
+key scenarios such as digital livelihood, digital villages,
+digital industry, digital education, and digital government
+service. The Bank provided "financial + non-financial"
+digital comprehensive services for large enterprise
+groups, and consolidated and deepened comprehensive
+strategic cooperation relationships with them. The Bank
+continuously enhanced the output capacity of financial
+services, diversified services, innovated service models,
+expanded customer base, released special columns of
+SRDI and inclusive services, introduced third-party industry
+clouds, and built a "financial expert + business manager"
+service ecosystem. As at the end of 2023, open banking
+transactions exceeded RMB313 trillion, maintaining a
+leading position among peers. In terms of mobile banking,
+the Bank launched an innovative panoramic financial
+service system (version 9.0), focusing on five areas: mega
+wealth, full financing, consumption promotion, strong
+intelligence, and excellent experience. It refined key high-
+frequency functions such as login and transfer, pioneered
+services such as family wealth and minimalist homepage
+in the industry, and upgraded a new experience of one-
+stop query and use of customer privileges. As at the
+end of 2023, the number of monthly active mobile
+banking customers reached 229 million, ranking first in
+the industry. ICBC e Life built a new ecosystem of 6.0
+platform-based life services, and collaborated with high-
+quality leading platforms to create eight major ecosystems
+and three major life circles, significantly improving
+customers' immersive service experience. As at the end
+of 2023, ICBC e Life had 14.66 million average monthly
+active customers and more than 400 thousand merchant
+customers, maintaining a leading position in the industry.
+Second, shaping an efficient and intensive new
+business management model, and improving internal
+service platforms to better empower employees. The
+Bank completed the construction of the main functions
+of the Counter Express, developed a new digital service
+terminal in an innovative manner, and cultivated remote
+on-site integrated service capabilities for outlets based on
+audiovisual technology. The Bank promoted the scenario-
+based reconstruction of difficult business processes such
+as account opening, cancellation and change, account
+unlocking, and wealth inheritance. It accelerated the
+promotion of online booking services, laying a foundation
+for the transition of outlets towards light operations. The
+Bank upgraded the Marketing Express, and enhanced
+account manager service efficiency through the
+Annual Report 2023
+89
+Discussion and Analysis
+Fourth, channel collaboration momentum went
+up. In terms of strengthening competitiveness of
+outlets, the sharpening of outlets' competitive edge has
+significantly enhanced the "combat capabilities" of outlets.
+The average savings and corporate deposits of outlets
+increased by 15.0% and 14.0%, respectively, compared
+to the beginning of the year, while the average number
+of high-quality personal and enterprise customers rose by
+5.8% and 10.7%, respectively, compared to the beginning
+of the year. In terms of mobile banking APP, the digital
+comprehensive service capabilities continued to improve,
+and digital operations achieved practical results, and
+continued to play a primary role in business operations.
+As at the end of December, the Bank had 552 million
+mobile banking customers and 229 million monthly active
+mobile customers, with an annual cumulative transaction
+amount of RMB99.6 trillion, both ranking first in the
+industry. The online and offline integration has been
+advanced deeply, with a penetration rate of 93.0%
+for mobile banking in-store customers, representing
+a year-on-year increase of 3.3 percentage points. The
+value of online personal fund, insurance and wealth
+management transactions accounted for 97.5% of the
+total. The penetration rate of mobile banking agency
+E
+payment customers was 89.7%, representing an increase
+of 3.4 percentage points year-on-year. The joint combat
+capabilities of various channels have been enhanced,
+providing strong support for the implementation of the
+Bank's key strategies and the development of various work
+through "one-point access, all-channel response".
+Hot Topic 5: Continuous Deepening of
+D-ICBC
+In 2023, the construction of the D-ICBC was quickened,
+and new momentum and vitality were constantly
+unleashed. The Bank continuously upgraded and polished
+key external and internal service platforms, and basically
+formed a "digital financial service window" with ICBC
+characteristics, to better serve customers and empower
+employees. The Bank continued to consolidate the two
+support systems of business and data technology, and
+further improved the efficiency of digital services. The
+Bank's Financial Digital Capability Maturity (FDCM) was the
+first and only one to obtain the highest level of certification,
+and the Bank released the industry's first White Paper on
+Digital Transformation of the Banking Industry (2023), both
+significantly enhancing the brand influence of D-ICBC.
+D
+ICBC 数字工行
+Continuously improving customer service system and strengthening external service
+platforms to better empower market expansion
+Monthly active mobile
+Monthly active ICBC
+banking customers
+174 million
+229 million
+Annual Report 2023
+2022
+Third, the Bank accelerated the development of
+key customer groups. The urban-rural collaborative
+development promoted rural revitalization. There
+were 2.01 million farmer customers with outstanding
+loans from the Bank, representing an increase of 51.32%
+over the year beginning. Agriculture-related loans grew
+by RMB960.0 billion, with a balance of nearly RMB4.24
+trillion, continuing to consolidate the leading advantage
+among comparable peers. In terms of payment agency
+service, the total number of corporate and personal
+customers receiving payment agency service from the
+Bank and the amount of funds paid on behalf of these
+customers increased steadily. The number of corporate
+customers of payment agency services reached 898.3
+thousand, representing an increase of 84.8 thousand over
+the year beginning. The number of personal customers
+receiving payment agency service stood at 110 million, up
+960 thousand; the fund paid on behalf of these customers
+amounted to RMB5.72 trillion, representing a year-on-
+year increase of RMB337.9 billion or 6.28%. In terms
+of merchant marketing, the Bank developed 4,593
+thousand new merchant customers, bringing the total
+number of merchant customers to 12.12 million. Acquiring
+transactions amounted to RMB4.49 trillion, representing
+an increase of 18.4%.
+customer expansion and quality
+improvement were advanced simultaneously. During
+the reporting period, the number of personal customers
+increased by nearly 20 million. The number of enterprise
+customers rose by more than 1.3 million over the year
+beginning. The number of institutional customers climbed
+by 50 thousand compared to the year beginning. The
+number of corporate, institutional and personal customers
+Discussion and Analysis
+Third, the Bank improved the value chain relying on the service chain. While actively meeting customers' financial
+needs, the Bank tapped the commercial value such as an increase in deposits and income, in an effort to improve
+comprehensive contributions.
+Capital
+flow
+Customer
+chain
+GBC+
+Value
+chain
+Service
+chain
+工银云区
+ICBC IIRU
+F IKBC 智慧政法综合服务平台
+Scenario construction + digital empowerment +
+online & offline support + multi-business
+line collaboration
+In 2023, driven by GBC + projects, the Bank continuously
+solidified the foundation for high-quality development,
+and accelerated the improvement of a balanced and
+coordinated customer ecosystem.
+First, the construction of key scenarios produced the
+desired results. Focusing on the 26 key GBC+ scenarios
+at the Head Office level, including medical insurance
+services, intelligent housing, culture and tourism, and
+e-CNY promotion, the Bank had cumulatively developed
+34 thousand G-end customers (representing a year-on-
+year increase of 89%), 660 thousand B-end customers
+(representing a year-on-year increase of 22%), and 120
+million C-end active customers (representing a year-on-year
+increase of 33%), accelerating the improvement of the
+customer ecosystem. G- and B-end deposits increased by
+RMB182.2 billion and RMB430.9 billion, respectively, and
+realized the diversion of C-end payment agency service of
+RMB2.8 trillion, indicating a remarkable achievement in
+increase of deposits and diversion.
+Second,
+with average daily financial assets of RMB10 thousand or
+more increased by 370 thousand, 18 thousand and 5.23
+million over the year beginning.
+e Life customers
+14.66 million
+100.00%
+Open banking
+Digital operation system
+Online fund, insurance
+and wealth management
+transactions amounted
+to RMB540.0 billion
+Enterprise risk management
+Risk view of "Five-pronged
+Risk Management Approach"
+Significantly reducing
+the accounts involved in
+telecommunication frauds
+Continuously consolidating data technology support system and promoting the effective
+empowerment of dual elements
+Cloud &
+Distributed
+Computing
+Information on over 700
+million personal customers
+Reinforcing the building
+of an enterprise-level data
+middle office
+Data
+Technical
+Providing services for
+over 30 thousand employees
+Over 1 billion personal
+accounts
+Reinforcing a data middle
+office operation
+Billion-level big model
+technology system
+90
+Ranking high among
+peers in terms of
+growth rate
+central enterprises and
+SOEs cumulatively
+Serving more than 200
+Digital inclusive products
+transaction value
+More than RMB310 trillion API
+A year-on-year increase of nearly 8%
+➤Shaping an efficient and intensive new business management model, and improving
+internal service platforms to better empower employees
+Counter Express
+construction progress
+Marketing Express
+construction progress
+Discussion and Analysis
+100% 301 decoding tasks
+The proportion of active corporate customers
+Covering 55 thousand personal account managers
+E Office
+construction progress
+100%
+Launching a brand-new
+version 5.0
+Continuously consolidating business support system and enhancing enterprise-level digital
+capacity
+Global cash
+Treasury service
+system
+100% increased by 40%
+percentage
+management
+Serving 11 thousand
+enterprise customers
+cumulatively
+Name of shareholder
+Huijin(5)
+As at 31 December 2023, Huijin held approximately 34.79% shares of the Bank. It held shares directly in the institutions
+listed below:
+No.
+1
+2
+3
+4
+Company name
+China Development Bank Corporation
+Industrial and Commercial Bank of China ✩✩
+Agricultural Bank of China Limited ★☆
+Bank of China Limited ★☆
+5
+China Construction Bank Corporation ✰✰
+6
+China Everbright Group Ltd.
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Peng Chun. Huijin is
+a wholly-owned subsidiary of China Investment Corporation. In accordance with authorization by the State Council, Huijin
+makes equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution,
+exercise the rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to
+achieve the goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other
+business activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions
+it controls.
+7
+Controlling Shareholders
+New China Life Insurance Company Limited ✰✰
+(5)
+(6)
+(7)
+(8)
+(9)
+HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Limited. Central Huijin
+Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware of any
+connected relations or acting-in-concert relations among the aforementioned shareholders.
+Except to the extent unknown to HKSCC Nominees Limited, the top 10 shareholders of the Bank did not participate in any
+margin trading, short selling or refinancing business.
+According to Industrial and Commercial Bank of China Limited's Announcement in Relation to Increase in Shareholding
+of the Bank by Its Controlling Shareholders published by the Bank dated 11 October 2023, Huijin intended to continue to
+increase, in its own capacity, its shareholding in the Bank by acquiring shares of the Bank in the secondary market within the
+next six months commencing from the date of the increase in shareholding. As at the end of the month immediately before
+the annual results announcement date (29 February 2024), Huijin cumulatively increased its holding of 286,807,989 A shares
+of the Bank from the date of the increase in shareholding, accounting for approximately 0.08% of the Bank's total share
+capital.
+The number of shares held by HKSCC Nominees Limited at the end of the period refers to the total number of H shares
+held by it as a nominee on behalf of all institutional and individual investors registered with accounts opened with HKSCC
+Nominees Limited as at 31 December 2023, which included H shares of the Bank held by Ping An Asset Management Co.,
+Ltd., SSF and Temasek Holdings (Private) Limited.
+According to the Notice on Comprehensively Transferring Part of State-Owned Capital to Fortify Social Security Funds
+(Cai Zi [2019] No. 49), MOF transferred 12,331,645,186 A shares to the state-owned capital transfer account of SSF in a
+lump sum in December 2019. According to the relevant requirements under the Notice of the State Council on Issuing the
+Implementation Plan for Transferring Part of State-Owned Capital to Fortify Social Security Funds (Guo Fa [2017] No. 49), SSF
+shall perform the obligation of more than 3-year lock-up period as of the date of the receipt of transferred shares. At the
+end of the reporting period, according to the information provided by SSF to the Bank, SSF also held 6,836,411,180 H shares
+of the Bank and 19,168,056,366 A and H shares in aggregate, accounting for 5.38% of the Bank's total ordinary shares.
+The number of shares held by Hong Kong Securities Clearing Company Limited at the end of the period refers to the total A
+shares (Northbound shares of the Shanghai-Hong Kong Stock Connect) held by it as a nominal holder designated by and on
+behalf of Hong Kong and foreign investors as at 31 December 2023.
+"ICBC SSE 50 Exchange Traded Securities Investment Funds" are securities investment funds raised as approved by CSRC
+Zheng Jian Ji Jin Zi [2004] No. 196 Document dated 22 November 2004, with China Asset Management Co., Ltd. as the fund
+manager and ICBC as fund custodian.
+(10) The "Industrial and Commercial Bank of China Limited - Huatai-PB CSI 300 ETF" is a securities investment fund approved
+by CSRC in CSRC Document [2012] No. 392 dated 23 March 2012. Huatai-PineBridge Fund Management Co., Ltd. acts as
+the fund manager and ICBC acts as the fund custodian.
+94
+Annual Report 2023
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+(4)
+China Export & Credit Insurance Corporation
+China Reinsurance (Group) Corporation
+Guotai Junan Investment Management Co., Ltd.
+19
+China Galaxy Asset Management Co., Ltd.
+18
+Jiantou CITIC Asset Management Co., Ltd. ★☆
+marked
+17
+Bank of Hunan Corporation Limited
+16
+Hengfeng Bank Co., Ltd.
+15
+Zhong Hui Life Insurance Co., Ltd.
+14
+China International Capital Corporation Limited ★☆
+13
+Notes:
+8
+(1)
+represents H share listed company.
+9
+China Jianyin Investment Limited
+10
+China Galaxy Financial Holdings Company Limited
+11
+Shenwan Hongyuan Group Co., Ltd. ★☆
+73.63%
+63.16%
+57.14%
+64.13%
+40.14%
+34.79%
+34.68%
+Huijin's shareholding
+percentage
+(2)
+represents A share listed company, while
+None
+Particulars of Substantial Shareholders
+261,775,057
+H Share
+-1,215,755
+86,144,120,606
+24.17
+Unknown
+SSF(7)
+China Securities Finance Co., Ltd.
+State-owned
+A Share
+12,331,645,186
+3.46
+None
+State-owned legal person
+A Share
+2,416,131,540
+Foreign legal person
+None
+31.14
+110,984,806,678
+MOF
+HKSCC Nominees Limited (6)
+Nature of shareholder
+shares
+period
+reporting period
+(%)
+0.07
+shares
+A Share
+286,807,989
+124,004,660,940
+34.79
+None
+State-owned
+A Share
+State-owned
+0.68
+12
+A Share
+0.12
+427,259,195
+127,033,942
+A Share
+Other entities
+None
+0.28
+1,013,921,700
+A Share
+State-owned legal person
+Securities Investment Funds (9)
+Central Huijin Asset Management Co., Ltd.
+ICBC-SSE 50 Exchange Traded
+None
+0.63
+None
+None
+353,764,334
+Hexie Health Insurance Co., Ltd.
+Foreign legal person
+118,415,100
+A Share
+Other entities
+None
+0.10
+372,432,300
+321,384,187
+-Universal insurance products
+A Share
+(3)
+(2)
+Notes: (1)
+-Huatai-PB CSI 300 ETF (10)
+Industrial and Commercial Bank of China
+Hong Kong Securities Clearing Company Limited (8)
+Other entities
+2,253,843,255
+Male
+1975
+Zheng Guoyu
+Since June 2021
+Duan Hongtao
+Senior Executive Vice President
+Male
+1969
+Since March 2023
+Yao Mingde
+Guan Xueqing
+Senior Executive Vice President
+Board Secretary
+Male
+1970
+Since March 2024
+Male 1963
+Xiong Yan
+Executive Director, Senior Executive Vice President Male
+Female 1964
+Song Jianhua
+Chief Business Officer
+Male 1965
+Since April 2020
+Tian Fenglin
+Chief Business Officer
+Male 1967
+Since December 2023
+Directors, Supervisors and Senior Management Leaving Office
+Chen Siqing
+Chairman, Executive Director
+Male
+1960
+May 2019-February 2024
+Since July 2016
+Since April 2020
+Chief Business Officer
+Mr. Wang has served as Executive Director, Senior Executive Vice President and concurrently Chief Risk Officer since
+September 2021, and as Senior Executive Vice President of the Bank since April 2020. He joined PBC in August 1985, and
+has successively served as Supervision Commissioner (Deputy Director level) of PBC Shijiazhuang Central Sub-branch, Head
+of PBC Shijiazhuang Central Sub-branch and concurrently Director of State Administration of Foreign Exchange ("SAFE")
+Hebei Branch, Head of PBC Hohhot Central Sub-branch and concurrently Director of SAFE Inner Mongolia Branch, Head
+of PBC Guangzhou Branch and concurrently Director of SAFE Guangdong Branch, and Director-General of PBC Financial
+Stability Bureau since January 2002. Mr. Wang graduated from the Hebei Banking School, and he received a Doctorate
+degree in Economics from Xi'an Jiaotong University. He is a research fellow.
+Anthony Francis Neoh
+(2)
+(3)
+(4)
+(5)
+The terms of Mr. Liao Lin, Mr. Zheng Guoyu and Mr. Wang Jingwu as Executive Directors of the Bank are set out in the
+above table. Please refer to the section headed "Biographies of Directors, Supervisors and Senior Management" for the
+starting time of terms of Mr. Liao Lin and Mr. Wang Jingwu as Senior Management members of the Bank. Mr. Liao Lin has
+acted as Chairman of the Bank since February 2024. Mr. Zheng Guoyu acted as Senior Executive Vice President of the Bank
+from September 2021 to April 2023.
+According to the Articles of Association of the Bank, before the newly elected directors take office, the current directors shall
+continue to act as directors.
+According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in
+the above table shall be the day of his/her first appointment. According to the Articles of Association of the Bank, the term
+of the Bank's directors and supervisors is three years and they can be re-elected and reappointed upon expiration of their
+term.
+Please refer to the section headed "Appointment and Removal".
+During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period held shares or share options
+or were granted restricted shares of the Bank, and there was no change during the reporting period.
+101
+Directors, Supervisors and Senior Management
+Biographies of Directors, Supervisors and Senior Management
+Liao Lin, Chairman, Executive Director
+Mr. Liao has served as Chairman and Executive Director of the Bank since February 2024, and Executive Director of the
+Bank since July 2020. He served as Senior Executive Vice President, Senior Executive Vice President and concurrently Chief
+Risk Officer, Vice Chairman, Executive Director and President as of November 2019. Mr. Liao joined China Construction
+Bank in 1989, and was appointed as Deputy General Manager of Guangxi Branch of China Construction Bank, General
+Manager of Ningxia Branch, Hubei Branch and Beijing Branch of China Construction Bank, Chief Risk Officer, Executive Vice
+President and concurrently Chief Risk Officer of China Construction Bank. Mr. Liao graduated from Guangxi Agricultural
+University. He obtained a Doctorate degree in Management Science from Southwest Jiaotong University. Mr. Liao is a senior
+economist.
+Wang Jingwu, Executive Director, Senior Executive Vice President, Chief Risk Officer
+Senior Executive Vice President
+Lu Yongzhen, Non-executive Director
+Annual Report 2023
+(1)
+Notes:
+September 2023-September 2023
+Independent Non-executive Director
+Male
+1946
+April 2015-March 2024
+Wu Xiangjiang
+Employee Supervisor
+Male
+1962
+Zhang Wenwu
+Senior Executive Vice President
+Male
+1973
+Xie Taifeng
+Chief Business Officer
+Male
+1972
+December 2021-April 2023
+September 2020-January 2023
+July 2020-March 2024
+1967
+Zhang Weiwu
+4.20%
+Male 1966
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+99
+Annual Report 2023
+Offshore USD preference share refers to USD2.9 billion preference shares issued offshore by the Bank at a dividend rate of
+3.58% in 2020.
+(3)
+(2) Offshore EUR preference shares refer to EURO.6 billion preference shares issued offshore by the Bank at a dividend rate of
+6.00% in 2014. The Bank redeemed the above offshore EUR preference shares on 10 December 2021.
+Notes: (1) Dividend distributed is tax included.
+Offshore USD preference share(3)
+3.58% About USD115.36 million
+3.58% About USD115.36 million
+3.58% About USD115.36 million
+Redemption or Conversion of Preference Shares
+EUR40 million
+RMB2,940 million
+4.20%
+RMB2,061 million
+4.58%
+distributed (¹)
+rate
+Dividend
+Dividend
+Dividend
+distributed (1)
+RMB2,061 million
+RMB2,940 million
+N/A
+N/A
+4.20%
+4.58%
+6.00%
+rate
+During the reporting period, the Bank did not redeem or convert any preference share.
+During the reporting period, the Bank did not restore any voting right of preference share.
+Mr. Lu has served as Non-executive Director of the Bank since August 2019. He joined Huijin in 2019. Mr. Lu previously
+served as Deputy Director of the Administrative Office of the Economic Research Consultation Centre of the State Economic
+and Trade Commission, Director of the Specific Research Department of the Economic Research Centre of the State
+Economic and Trade Commission, Director of the Capital Markets Research Department of the Research Centre of the
+State-owned Assets Supervision and Administration Commission of the State Council, and Director Assistant of the Research
+Centre of the State-owned Assets Supervision and Administration Commission of the State Council with the concurrent
+post as the Director of the Capital Markets Research Department, and Deputy Director of the Research Centre of the State-
+owned Assets Supervision and Administration Commission of the State Council. Mr. Lu obtained a Bachelor's degree and a
+Master's degree from Peking University, and a Doctorate degree in Economics from Southwestern University of Finance and
+Economics. He is a researcher.
+Male 1964
+Non-executive Director
+Feng Weidong
+Since August 2019
+1967
+Male
+Non-executive Director
+Lu Yongzhen
+Since September 2021
+1966
+Executive Director, Senior Executive Vice President, Male
+Chief Risk Officer
+Restoration of Voting Rights of Preference Shares
+Wang Jingwu
+1966
+Male
+Chairman, Executive Director
+Tenure
+Gender Birth year
+Position
+Name
+Liao Lin
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors and Senior Management
+100 Annual Report 2023
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments promulgated
+by MOF as well as the International Financial Reporting Standard 9 Financial Instruments and the International
+Accounting Standard 32 -
+Financial Instruments: Presentation promulgated by International Accounting Standards Board
+and other accounting standards and the key terms of issuance of the Bank's preference shares, the issued and existing
+preference shares do not contain contractual obligations to deliver cash or other financial assets or contractual obligations
+to deliver variable equity instruments for settlement, and shall be accounted for as other equity instruments.
+Accounting Policy Adopted for Preference Shares and Rationale
+Since July 2020
+Since June 2022
+Dividend
+N/A
+Since March 2017
+Fred Zuliu Hu
+Independent Non-executive Director
+Male
+1963
+Since April 2019
+Norman Chan Tak Lam Independent Non-executive Director
+Male
+1954
+Since September 2022
+Herbert Walter
+Independent Non-executive Director
+1953
+Male
+Since March 2024
+Huang Li
+Employee Supervisor
+Male
+1964
+Since June 2016
+Zhang Jie
+External Supervisor
+Male 1965
+Since November 2021
+Liu Lanbiao
+External Supervisor
+1953
+Dividend
+distributed (¹)
+RMB2,061 million
+RMB2,940 million
+N/A
+Male
+Shen Si
+Offshore EUR preference shares (2)
+Domestic preference share "2"
+4.58%
+Domestic preference share "1"
+rate
+Type of preference shares
+Dividend
+2021
+2022
+2023
+The table below shows the distribution of dividends on preference shares by the Bank in the past three years:
+Dividends on the Bank's offshore USD preference shares are paid annually in cash, and calculated based on the liquidation
+preference of the offshore preference shares. Dividends on the Bank's offshore USD preference shares are non-cumulative.
+Holders of offshore USD preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore USD preference share issuance proposal, total dividends of about USD115.36 million (pre-
+tax) on the offshore USD preference shares were distributed in USD at a dividend rate of 3.58% (after-tax). According to
+relevant laws, when the Bank distributes dividends for offshore USD preference shares, the enterprise income tax shall be
+withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the offshore USD
+preference shares, the Bank paid the relevant taxes, included in the dividends for offshore USD preference shares.
+Independent Non-executive Director
+Dividends on the Bank's domestic preference shares "1" and "2" are paid annually in cash, and calculated
+based on the aggregate par value of the issued domestic preference shares. Dividends on the Bank's domestic preference
+shares are non-cumulative. Holders of domestic preference shares are only entitled to dividends at the prescribed dividend
+rate, but are not entitled to any distribution of residual profits of the Bank together with the holders of ordinary shares.
+According to the dividend distribution plan in the domestic preference share issuance proposal, the Bank distributed
+dividends of RMB2,061 million (pre-tax) on the domestic preference share "1" at a dividend rate of 4.58% (pre-tax);
+and distributed dividends of RMB2,940 million (pre-tax) on the domestic preference share "2" at a dividend rate of
+4.2% (pre-tax).
+Dividend Distribution of Preference Shares
+"Shareholding percentage" refers to the percentage of domestic preference shares of "If2" held by preference
+shareholders in total number (700 million shares) of domestic preference shares of "I₹2″.
+The above data are based on the Bank's register of domestic preference shareholders of "2" as at 31 December 2023.
+Shanghai Tobacco Group Co., Ltd., China National Tobacco Corporation Shandong Branch and China National Tobacco
+Corporation Heilongjiang Branch are all wholly-owned subsidiaries of China National Tobacco Corporation. Ping An Life
+Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China, Ltd. have connected
+relations. Sun Life Everbright Asset Management Co., Ltd. and Everbright Securities Asset Management Co., Ltd. have
+connected relations. Save as disclosed above, the Bank is not aware of any connected relations or acting-in-concert relations
+among the aforementioned preference shareholders and among the aforementioned preference shareholders and top 10
+ordinary shareholders.
+(3)
+Notes: (1)
+(2)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Since January 2022
+Yang Siu Shun
+Independent Non-executive Director
+Male
+1955
+Since April 2016
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "2" and Offshore USD Preference Shares at the meeting of its Board of Directors on 30
+August 2023, permitting the Bank to distribute the dividends on domestic preference shares "12" on 25 September
+2023 and on the offshore USD preference shares on 25 September 2023; the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "1" at the meeting of its Board of Directors on 27 October 2023, permitting the Bank
+to distribute the dividends on domestic preference shares "f1" on 23 November 2023.
+Feng Weidong, Non-executive Director
+Yes
+102
+42.00
+42.00
+Yes
+No
+888
+5.00
+No
+25.00
+No
+25.00
+Yes
+82.51
+No
+82.51
+No
+No
+138.96
+No
+133.83
+No
+133.62
+Yes
+No
+44.00
+No
+from shareholder
+entities or other
+related parties
+or not
+income
+before tax
+(4)
+(5)=(1)+(2)+(3)+(4)
+89.96
+No
+82.51
+No
+Since January 2020
+Yes
+Yes
+Yes
+Yes
+47.00
+47.00
+No
+49.00
+49.00
+44.00
+No
+Huang Li
+5.00
+Zhang Wenwu
+Xie Taifeng
+108
+67.26
+15.13
+22.70
+89.96
+No
+5.35
+20.48
+No
+52.00
+52.00
+No
+No
+82.51
+No
+No
+60.53
+21.98
+Annual Report 2023
+Wu Xiangjiang
+Anthony Francis Neoh
+Zheng Guoyu
+Chen Siging
+Zhang Jie
+25.00
+Liu Lanbiao
+25.00
+Zhang Weiwu
+60.53
+21.98
+Duan Hongtao
+60.53
+21.98
+Obtain
+remuneration
+Yao Mingde
+107.67
+31.29
+Xiong Yan
+102.25
+31.58
+Song Jianhua
+102.25
+31.37
+Tian Fenglin
+Directors, Supervisors and Senior Management Leaving Office
+Guan Xueqing
+Unit: RMB10,000
+remuneration
+Total
+Zhang Jie, External Supervisor
+Mr. Zhang has served as External Supervisor of the Bank since November 2021. He is currently a professor and doctoral
+supervisor of the Renmin University of China, director of the International Monetary Institute, a distinguished professor
+of the Ministry of Education's "Changjiang Scholars Program", a famous teacher of the national "Ten Thousand Talents
+Program", and a national candidate of the "New Century Talents Project". Mr. Zhang is a recipient of the special
+government allowance provided by the State Council to experts, and is engaged in research on the topics of institutional
+finance, China's financial system and financial development. He was the Dean of the School of Finance of Shaanxi Institute
+of Finance and Economics, the Associate Dean of the School of Economics and Finance of Xi'an Jiaotong University, the
+Associate Dean of the School of Finance of Renmin University of China, and the first Secretary General of the College
+Finance Teaching Steering Committee of the Ministry of Education. At present, he is concurrently an executive director of
+the China Society for Finance and Banking. Mr. Zhang graduated from Shaanxi University of Finance and Economics with a
+Doctorate degree in Economics.
+Liu Lanbiao, External Supervisor
+Mr. Liu has served as External Supervisor of the Bank since June 2022. He is currently a Member of the Branch Party
+Committee, professor, doctoral supervisor of the School of Finance of Nankai University, a co-advisor at postdoctoral
+research station of Nankai University, Director of the Northeast Asia Financial Cooperation Research Center of Nankai
+University and Government Debt Management Research Center of the School of Finance of Nankai University. Mr. Liu has
+long been engaged in research in areas such as commercial bank management, monetary economics, systemic financial risk
+management, local government debt management, financial technology and international financial cooperation. Mr. Liu
+was a Vice Dean of the School of Finance and Vice Dean of the Institute of State Economy of Nankai University and External
+Supervisor of Liaoshen Bank Co., Ltd. At present, Mr. Liu is concurrently an Expert at the MOF Financial Risk Research
+Center, Government Debt Expert Consultant at the MOF Debt Research and Assessment Center, Member of the China
+Financial Standardization Technical Committee, Deputy Director of the Asia-Pacific Profession Committee at the Chinese
+Social and Economic Systems Analysis Research Association, and Independent Director of NYOCOR Co., Ltd., etc. He is a
+Chief Expert for the key special program "Research on the Prevention and Management of China's Debt Crisis and Effective
+Mitigation Measures" under the National Social Science Fund of China. Mr. Liu graduated from Nankai University with a
+Doctorate degree in Economics.
+Zhang Weiwu, Senior Executive Vice President
+Mr. Zhang has served as Senior Executive Vice President of the Bank since June 2021. He joined ICBC in July 1999, and was
+appointed as General Manager of ICBC (Europe) Amsterdam Branch in January 2011, General Manager of Singapore Branch
+in February 2013 and General Manager of the International Banking Department of the Head Office of ICBC in January
+2017. Mr. Zhang graduated from the Northwest University in China and obtained Master's degree in Political Economy and
+an MBA degree from Hitotsubashi University in Japan. He is a senior economist.
+Duan Hongtao, Senior Executive Vice President
+Mr. Duan has served as Senior Executive Vice President of the Bank since March 2023. Before joining ICBC, he successively
+served as the General Manager of Yangtze River Sub-branch of China Construction Bank Hubei Branch, the General
+Manager of the Compliance Department and the General Manager of the Human Resources Department of Hubei Branch,
+the Assistant to General Manager and Deputy General Manager of Hubei Branch, General Manager of Qingdao Branch,
+General Manager of Shandong Branch, and Director of the Executive Office of the China Construction Bank Head Office.
+Mr. Duan graduated from Wuhan University of Technology and obtained a Doctor's degree in Management. He is a senior
+economist.
+Annual Report 2023
+105
+Directors, Supervisors and Senior Management
+Yao Mingde, Senior Executive Vice President
+Mr. Yao has served as Senior Executive Vice President of the Bank since March 2024. He joined Agricultural Bank of China
+in August 1998, he has successively served as Deputy General Manager of the Financial Accounting Department and Deputy
+General Manager of the Financial Accounting Department/County Area Banking Accounting and Assessment Center of
+the Head Office of Agricultural Bank of China since April 2009, General Manager of the Financial Accounting Department/
+Office of Assessment Center/County Area Banking Accounting and Assessment Center (County Area Banking/Inclusive
+Finance Accounting and Assessment Center) of the Head Office since March 2017 and President of Shenzhen Branch since
+May 2022 (he served concurrently as Chairman of Agricultural Bank of China (Moscow) Limited from May 2021 to August
+2022). Mr. Yao Mingde obtained a Bachelor's degree in Central University of Finance and Economics and obtained a
+Doctor's degree in Management from Central University of Finance and Economics. He is a senior accountant.
+Guan Xueqing, Board Secretary
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as General
+Manager of Suining Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of
+Frankfurt Branch, Deputy General Manager of Sichuan Branch, Deputy General Manager of Sichuan Branch and General
+Manager of Banking Department of Sichuan Branch, and General Manager of Hubei Branch and Sichuan Branch. Previously
+Mr. Guan was also General Manager of Corporate Strategy and Investor Relations Department of the Bank. He graduated
+from the Southwestern University of Finance and Economics and obtained a Doctor's degree in Economics. He is a senior
+economist.
+Xiong Yan, Chief Business Officer
+Ms. Xiong has served as Chief Business Officer of the Bank since April 2020. She joined ICBC in 1984 and served as Deputy
+Director-General of Kunming Sub-bureau of the Internal Audit Bureau, Deputy General Manager of Yunnan Branch,
+Deputy Director-General of the Sub-bureau directly managed by the Internal Audit Bureau, Deputy General Manager of
+the Corporate Banking Department I (Corporate Banking Department) and General Manager of the Institutional Banking
+Department of the Head Office. Ms. Xiong graduated from Hunan University and obtained a degree of International Master
+of Business Administration (IMBA) from Fudan University and The University of Hong Kong. She is a senior economist.
+Song Jianhua, Chief Business Officer
+Mr. Song has served as Chief Business Officer of the Bank since April 2020. He joined ICBC in 1987. He was appointed as
+Deputy General Manager of Jiangsu Branch and General Manager of the Personal Banking Department of the Head Office.
+Mr. Song graduated from Peking University and obtained a Doctor's degree in management science and engineering from
+Nanjing University. He is a senior economist.
+Tian Fenglin, Chief Business Officer
+Mr. Tian has served as Chief Business Officer of the Bank since December 2023. He joined ICBC in 1992, and served as
+Deputy General Manager of Singapore Branch, Executive Director and General Manager of ICBC (Malaysia), Vice Chairman
+of ICBC (Argentina), Deputy General Manager of Jiangsu Branch and General Manager of Suzhou Branch, General Manager
+of Jiangsu Branch, and General Manager of the Corporate Banking Department and the Investment Banking Department
+of the Bank. Mr. Tian graduated from Huazhong Agricultural University. He obtained a Master's degree in Economics from
+Huazhong Agricultural University and an MBA degree from the University of Chicago. He is a senior economist.
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently
+the Regional Chief Officer and the Head of Beijing Branch of ICBC. He served as Deputy General Manager and General
+Manager of the Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC. Mr. Huang graduated
+from The University of Hong Kong with an MBA degree. He is a senior economist.
+Huang Li, Employee Supervisor
+Directors, Supervisors and Senior Management
+Annual Report 2023
+Annual Report 2023
+Directors, Supervisors and Senior Management
+Cao Liqun, Non-executive Director
+Ms. Cao has served as Non-executive Director of the Bank since January 2020. She joined Huijin in 2020. Ms. Cao previously
+served as Deputy Director of Regulations Division, General Affairs Department, Director of Regulations Division, General
+Affairs Department, Director of Non-Financial Institutions Inspection Division, Supervision and Inspection Department,
+Director of General Affairs Division, Supervision and Inspection Department, Deputy Director-General of Supervision and
+Inspection Department, Inspector of General Affairs Department (Policy and Regulation Department), Level-Two Inspector
+of General Affairs Department (Policy and Regulation Department) of State Administration of Foreign Exchange, and acted
+as Deputy Director of Administrative Committee of Beijing's Zhongguancun Science Park. Ms. Cao obtained a Bachelor's
+degree in Law from China University of Political Science and Law, a Master's degree in Finance from Renmin University of
+China, and a Master's degree in Public Administration from Peking University. Ms. Cao is an economist.
+Chen Yifang, Non-executive Director
+Ms. Chen has served as Non-executive Director of the Bank since August 2021. She joined MOF in August 1985. She
+previously served as Deputy Division Chief of Payment Management Division and Deputy Director of Charge Bill Regulatory
+Center of General Affairs and Reform Department of MOF, Deputy Division Chief of the Charging Fund Policy Management
+Division of the Comprehensive Department of MOF, Division Chief of Charging Fund Division of Policy Planning Department
+of MOF, Division Chief of Housing and Land Division of the Comprehensive Department of MOF, Deputy Director-General
+of the Comprehensive Department of MOF, Member of the Party Group, Inspector and Deputy Secretary of the Party Group
+of Shenzhen Finance Supervision Commissioner Office of MOF, Deputy Secretary of the Party Group, Inspector and Level-
+one Inspector of Shenzhen Regulatory Bureau of MOF, and Level-one Inspector of Fiscal Notes Supervision Center of MOF.
+Ms. Chen obtained a Bachelor's degree in Economics from Jiangxi University of Finance and Economics.
+Dong Yang, Non-executive Director
+Mr. Dong has served as Non-executive Director of the Bank since January 2022. He joined MOF in August 1989. He
+previously served as assistant researcher, researcher and secretary (director level) of the Department of National Defense of
+MOF, a member of the CPC Committee, Deputy Inspector, and Discipline Inspection Team Leader of the Commissioner's
+Office of MOF in Heilongjiang, a member of the CPC Committee, Deputy Inspector and Discipline Inspection Leader of the
+Commissioner's Office of MOF in Beijing, a member of the CPC Committee, Deputy Director, and Discipline Inspection Team
+Leader of the Beijing Regulatory Bureau of MOF. Mr. Dong graduated from the Beijing Normal University and obtained a
+Master's degree in Management from Harbin Engineering University.
+Yang Siu Shun, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region, Director and Chairman of
+Audit Committee of Hang Seng Management College, Vice Chairman of the Council of the Open University of Hong Kong
+and a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority. Mr. Yang currently serves
+as a member of the 14th National Committee of the Chinese People's Political Consultative Conference, a member of the
+board of directors of the Hong Kong Jockey Club and an Independent Non-executive Director of Tencent Holdings Limited,
+Man Wah Holdings Limited and Xinyi Glass Holdings Limited. Mr. Yang graduated from the London School of Economics
+and Political Science. He was awarded the degree of Honorary Doctor of Social Sciences by The Open University of Hong
+Kong. He is a Justice of the Peace in Hong Kong. Mr. Yang holds the qualification of Chartered Accountants, and is a
+senior member of the Institute of Chartered Accountants in England and Wales, the Hong Kong Institute of Certified Public
+Accountants and the Chartered Institute of Management Accountants.
+Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang were recommended by Huijin
+to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders - Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+Shen Si, Independent Non-executive Director
+Annual Report 2023
+103
+Directors, Supervisors and Senior Management
+Fred Zuliu Hu, Independent Non-executive Director
+Mr. Hu has served as Independent Non-executive Director of the Bank since April 2019. He previously served as a senior
+economist at the International Monetary Fund, Head of Research at the World Economic Forum, the co-director of the
+National Center for Economic Research and a professor at Tsinghua University, an adjunct professor at the Chinese
+University of Hong Kong and Peking University, the chairman for Greater China and a partner at Goldman Sachs Group, Inc.,
+an independent non-executive director of Great Wall Pan Asia Holdings Limited (formerly known as SCMP Group Limited),
+an independent non-executive director of Hang Seng Bank Limited, the non-executive director of China Asset Management
+Co., Ltd., an independent director of Dalian Wanda Commercial Management Group Co., Ltd., an independent director
+of Shanghai Pudong Development Bank, the independent non-executive director of Hong Kong Exchanges and Clearing
+Limited and the independent non-executive director of Ant Group Co., Ltd., etc. Mr. Hu currently serves in various positions
+such as the chairman of Primavera Capital Group, the non-executive chairman of Yum China Holdings, Inc, the director of
+UBS Group AG, the director of Taikang Insurance Group Co., Ltd., the co-chair of The Nature Conservancy's Asia Pacific
+Council and the director of the China Medical Board. Mr. Hu is also a member of the Global Board of Advisors for the
+Council on Foreign Relations, the Harvard Global Advisory Council, the Harvard Kennedy School Mossavar-Rahmani Center
+for Business and Government, the Jerome A. Chazen Institute of International Business at Columbia University etc. Mr. Hu
+obtained a Master's Degree in Engineering Science from Tsinghua University, and a master's degree and a PhD in Economics
+from Harvard University.
+Norman Chan Tak Lam, Independent Non-executive Director
+Mr. Chan has served as Independent Non-executive Director of the Bank since September 2022. He previously served as
+Chief Executive of the Hong Kong Monetary Authority, Director of the Chief Executive's Office of the Hong Kong Special
+Administrative Region Government, Vice Chairman, Asia of Standard Chartered Bank and other positions. He currently
+serves as Chairman of the Board of Directors of RD Wallet Technologies Limited, Chairman of the Board of Directors of RD
+ezLink Limited, Chairman of Hong Kong Acquisition Corporation, Founding Chairman of Hong Kong Institute of Web 3.0,
+Senior Adviser of the Hong Kong Academy of Finance, Chairman of the Board of Trustees of Chung Chi College of The
+Chinese University of Hong Kong, Vice Chairman of The Chinese University of Hong Kong Council, Chairman of the Board
+of CUHK Innovation Limited. He obtained a Bachelor's degree in Social Sciences from The Chinese University of Hong Kong,
+an Honorary Fellowship from The Chinese University of Hong Kong, an Honorary Doctorate of Business Administration from
+City University of Hong Kong, an Honorary Doctorate of Business Administration from Lingnan University, an Honorary
+Doctorate of Business Administration from Hong Kong Shue Yan University, an Honorary Doctorate of Social Sciences of The
+Chinese University of Hong Kong. Mr. Chan was awarded the Silver Bauhinia Star by the Hong Kong Special Administrative
+Region and the Gold Bauhinia Star by the Hong Kong Special Administrative Region. He is a Fellow of The Hong Kong
+Institute of Bankers, Fellow of Hong Kong Academy of Finance. He was awarded the IFTA FinTech Achievement Award by
+the Institute of Financial Technologists of Asia (IFTA), the Leadership Lifetime Achievement Award by The Asian Banker.
+Herbert Walter, Independent Non-executive Director
+Mr. Walter has served as an Independent Non-executive Director of the Bank since March 2024. He previously served
+as Chairman of the Board of Dresdner Bank AG, a member of the Holding Board of Allianz SE, a member of the Group
+Executive Committee and the Global Head of Retail, Private and Commercial Banking of Deutsche Bank. He previously
+served as Chairman of the German Financial Market Stabilisation Authority (FMSA), and served as Chairman of the
+German National Resolution Authority (NRA) and as a Plenary Member of the European Single Resolution Board (SRB). He
+previously served as an Independent Non-executive member of the Supervisory Boards of financial institutions and other
+companies, including Banco Português de Investimento (BPI), S.A. (Porto), and DEPFA Bank plc (Dublin), ERGO Insurance
+Group AG, Deutsche Börse Group AG, E.ON Ruhrgas AG and Lufthansa Group AG. He was Chairman of the Advisory Board
+of the Institute for Law and Finance at the Goethe University Frankfurt am Main and the Karajan Academy of the Berlin
+Philharmonic Orchestra, and a member of the Advisory Boards of Amundi Asset Management Group (Germany), Consileon
+Consultancy Group and Scope European Ratings Group. He is currently an Independent Non-executive member of the
+Supervisory Board of AKBANK AG. He obtained a Master's degree in Business Administration from the Ludwig Maximilian
+University in Munich and holds a Doctorate in Political Science.
+104
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of
+Shanghai Pudong Development Bank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA
+degree. He is a senior economist.
+Mr. Feng has served as Non-executive Director of the Bank since January 2020. He joined MOF in 1986. He previously
+served as Deputy Director of Academic Affairs Division of Chinese Accounting Correspondence School of MOF (deputy
+division chief level), Person in charge of Teaching Material Department of National Accountant Certification Examination
+Leading Group Office, Director of Accounting Personnel Management Division and Director of Institutional System Division
+I of Accounting Department of MOF, Deputy Director (deputy director-general level), Deputy Director (person in charge),
+Director (director-general level), Secretary of the Party Committee and Director of National Accountant Assessment &
+Certification Centre of MOF, and member of the Accounting Conceptual Framework Committee of the International
+Public Sector Accounting Standards Board (IPSASB). He concurrently serves as a Managing Director of the 9th Council of
+the Accounting Society of China, a part-time professor and off-campus practice tutor for postgraduate students of the
+School of Economics and Management of Beijing Jiaotong University, and a visiting tutor for postgraduate students in the
+Accounting School of the Central University of Finance and Economics. Mr. Feng obtained a Bachelor's degree in Economics
+from Dongbei University of Finance & Economics and Doctorate degree from Beijing Jiaotong University. Mr. Feng Weidong
+is a senior accountant, researcher, non-practicing certified public accountant and is a recipient of the Special Government
+Allowance by the State Council of China.
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Annual Report 2023
+Fees
+(1)
+(2)
+(3)
+Liao Lin
+Wang Jingwu
+Lu Yongzhen
+Feng Weidong
+Cao Liqun
+Chen Yifang
+67.26
+22.70
+60.53
+21.98
+Dong Yang
+Yang Siu Shun
+Shen Si
+Fred Zuliu Hu
+Norman Chan Tak Lam
+Herbert Walter
+Other monetary
+medical insurances
+(before tax)
+Name
+additional
+Directors, Supervisors and Senior Management
+Appointment and Removal
+Directors
+At the Annual General Meeting for the Year 2022 held on 29 June 2023, Mr. Feng Weidong and Ms. Cao Liqun were re-
+elected as Non-executive Directors of the Bank, and each of their new terms of office started from the date of consideration
+and approval by the Annual General Meeting. At the First Extraordinary General Meeting of 2023 held on 30 November
+2023, Mr. Herbert Walter was elected as Independent Non-executive Director of the Bank, and his qualification was
+approved by NFRA in March 2024. Mr. Herbert Walter has confirmed that he obtained the legal advice required under
+Rule 3.09D of the Hong Kong Listing Rules on 6 March 2024 (prior to the approval of his qualification by NFRA) and
+understood his obligations as a director of the Bank. On 1 February 2024, the Board of Directors of the Bank elected Mr.
+Liao Lin as Chairman of the Board of Directors of the Bank, and his qualification was approved by NFRA in February 2024.
+On 29 February 2024, the First Extraordinary General Meeting of 2024 of the Bank elected Mr. Zhang Wenwu as Executive
+Director of the Bank, and his qualification is subject to the approval by NFRA¹; and elected Mr. Murray Horn as Independent
+Non-executive Director of the Bank, and his qualification is subject to the approval by NFRA.
+In April 2023, Mr. Zheng Guoyu ceased to act as Executive Director of the Bank due to change of job assignments. In
+February 2024, Mr. Chen Siqing ceased to act as Chairman of the Board of Directors and Executive Director of the Bank
+due to his age. In March 2024, Mr. Anthony Francis Neoh ceased to act as Independent Non-executive Director of the Bank
+due to expiration of his term.
+Supervisors
+In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to his age.
+Senior Management Members
+On 17 January 2023, the Board of Directors of the Bank appointed Mr. Duan Hongtao as Senior Executive Vice President of
+the Bank, and his qualification was approved by the former CBIRC in March 2023. On 29 June 2023, the Board of Directors
+of the Bank appointed Mr. Xie Taifeng as Chief Business Officer of the Bank, and his qualification was approved by NFRA in
+September 2023. On 29 June 2023, the Board of Directors of the Bank appointed Mr. Tian Fenglin as Chief Business Officer
+of the Bank, and his qualification was approved by NFRA in December 2023. On 29 February 2024, the Board of Directors
+of the Bank appointed Mr. Yao Mingde as Senior Executive Vice President of the Bank, and his qualification was approved
+by NFRA in March 2024.
+In April 2023, Mr. Zheng Guoyu ceased to act as Senior Executive Vice President of the Bank due to change of job
+assignments. In September 2023, Mr. Xie Taifeng ceased to act as Chief Business Officer of the Bank due to change of job
+assignments. In February 2024, Mr. Liao Lin resigned as President of the Bank due to adjustment of job assignments. In
+order to ensure the normal operation and management of the Bank, Mr. Liao Lin performs the functions and powers of the
+President on behalf of the Bank in accordance with regulatory requirements and the Articles of Association of the Bank, and
+the period for performing the duties on behalf of the President will end on the date when the new President formally takes
+office. In March 2024, Mr. Zhang Wenwu ceased to act as Senior Executive Vice President of the Bank due to change of job
+assignments.
+106
+1
+107
+Directors, Supervisors and Senior Management
+Annual Remuneration
+Remuneration from the Bank
+Contribution by
+the employer to
+social insurance,
+housing allowance,
+annuities, and
+Remuneration paid
+Mr. Zhang Wenwu has resigned all his posts including Senior Executive Vice President of the Bank. For details, please refer to the
+changes in the Senior Management members.
+Cao Liqun
+Annual Report 2023
+Female 1971
+Non-executive Director
+1966
+Non-executive Director
+Dong Yang
+Male
+Female 1964
+Non-executive Director
+Chen Yifang
+Since January 2020
+Since August 2021
+2/2
+5/5
+5/8
+4/5
+10/11
+Fred Zuliu Hu
+5/5
+4/4
+2/3
+4/5
+3/4
+2/3
+ཚེ|ཚེ
+5/5
+Norman Chan Tak Lam
+5/5
+11/11
+1/2
+2/3
+0/0
+Zheng Guoyu
+4/5
+10/11
+2/2
+2/2
+Directors Leaving Office
+Herbert Walter
+7/8
+7/8
+7/8
+4/5
+Chen Siging
+7/8
+10/11
+2/2
+8/8
+8/8
+5/5
+Cao Liqun
+2/2
+11/11
+3/3
+8/8
+8/8
+Chen Yifang
+2/2
+11/11
+5/5
+3/3
+Dong Yang
+2/2
+11/11
+Shen Si
+7/8
+0/1
+2/2
+Yang Siu Shun
+Directors
+10/11
+Independent Non-executive
+3/3
+5/5
+5/5
+5/5
+8/8
+5/5
+5/5
+1/2
+8/8
+2/2
+Nomination
+Committee
+Committee Member
+Compensation
+Committee
+Control
+Committee
+US Risk
+Committee
+Wang Jingwu
+Committee Member
+Committee Member
+Committee Member
+Lu Yongzhen
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Feng Weidong
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Dong Yang
+Committee Member
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Cao Liqun
+Committee Member
+Chen Yifang
+Chairman
+Liao Lin
+Transactions
+For the change of directors, please refer to the section headed "Directors, Supervisors and Senior Management
+Appointment and Removal".
+(3)
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+"Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+(2)
+(1)
+114
+Notes:
+3/3
+5/5
+11/11
+8/8
+5/5
+11/11
+5/5
+Anthony Francis Neoh
+Annual Report 2023
+Special Committees of the Board of Directors
+Risk
+Management
+Committee
+Audit Committee
+Committee
+Committee
+Directors
+Protection
+Corporate Governance Report
+Strategy
+Related Party
+Special Committees under the Board of Directors
+Corporate Social
+Responsibility
+As at the disclosure date of the results, the composition of special committees of the Board of Directors of the Bank is as
+follows:
+The Board of Directors of the Bank has established eight special committees, namely, the Strategy Committee, the
+Corporate Social Responsibility and Consumer Protection Committee, the Audit Committee, the Risk Management
+Committee, the Nomination Committee, the Compensation Committee, the Related Party Transactions Control Committee
+and the US Risk Committee. Except for the Strategy Committee and the Corporate Social Responsibility and Consumer
+Protection Committee, chairmen of all the other committees are assumed by Independent Non-executive Directors. More
+than half of the members of the Audit Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee are Independent Non-executive Directors.
+Special Committees of the Board of Directors
+and Consumer
+2/2
+2/2
+3/3
+Asset and Liability
+Management Committee
+("Five Priorities" Committee)
+Personal Banking
+Committee
+Institutional Banking Committee
+(Pension Finance Committee)
+Inclusive Finance and Rural
+Revitalization Committee
+Risk Management
+Committee
+Corporate Banking Committee
+(Technology Finance Committee)
+Financial Market and
+Asset Management
+Committee
+Digital Finance
+Committee
+Consumer Protection
+Committee
+Board of
+Supervisors
+Green Finance (ESG and
+Sustainable Finance) Committee
+Internal Audit
+Bureau
+Internal departments and directly managed
+institutions of the Head Office
+Domestic
+Institutions
+Overseas
+Institutions
+110
+Annual Report 2023
+Bank.
+During the reporting period, the Bank convened the
+Annual General Meeting for the Year 2022 on 29 June
+2023, and the First Extraordinary General Meeting of 2023
+on 30 November 2023. The aforementioned Shareholders'
+General Meetings were convened and held in compliance
+with relevant laws and regulations and the Articles of
+Association of the Bank. The Bank made announcements
+on the resolutions and disclosed legal opinions in a timely
+manner in accordance with regulatory requirements.
+For details of the above meetings, please refer to the
+announcements of the Bank dated 29 June 2023 and 30
+November 2023 respectively on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the
+Convening of the Shareholders' General
+Meeting
+As the organ of power of the Bank, the Shareholders'
+General Meeting involves all shareholders. The
+Shareholders' General Meeting is responsible for, among
+others, deciding on business policies and significant
+investment plans of the Bank; examining and approving
+the Bank's annual financial budget, final account
+proposals, plans for profit distribution and loss make-up;
+electing and replacing directors, supervisors appointed
+from the shareholder representatives and external
+supervisors; examining and approving work report of
+the Board of Directors and work report of the Board of
+Supervisors; and adopting resolutions on merger, division,
+dissolution, liquidation, change of corporate form, increase
+or decrease of the Bank's registered capital, issuance of
+corporate bonds or other securities and public listing,
+acquisition of the shares, issuance of preference shares
+and amending the Articles of Association of the Bank.
+Responsibilities of the Shareholders' General
+Meeting
+Shareholders' General Meeting
+Senior
+Management
+On 23 June 2022, the Bank's Annual General Meeting
+for the Year 2021 reviewed and adopted the Proposal
+on the Amendment to the Articles of Association.
+The amendments covered the business purpose, the
+responsibilities of the Board of Directors, the Board of
+Supervisors, the Shareholders' General Meeting and the
+Senior Management, risk management, remuneration
+incentive, social responsibilities and ESG, green finance,
+consumer protection and information disclosure, etc. The
+new version of the Articles of Association has been put
+into effect upon the approval of NFRA in November 2023.
+During the reporting period, the Bank complied with
+the principles, code provisions and recommended best
+practices stipulated in the Corporate Governance Code
+(Appendix C1 to the Hong Kong Listing Rules).
+Corporate Governance Code
+Special committees were set up under the Senior
+Management for the overall coordination responsibilities
+of the "Five Priorities" and the promotion of technology
+finance, green finance, inclusive finance, pension
+finance and digital finance correspondingly, establishing
+an integrated decision-making and implementation
+mechanism to serve the "Five Priorities", and forming a
+closed loop of organic synergies of the "first, second and
+third lines of defense" and co-control-and-management.
+The Bank has made constant efforts to improve the
+corporate governance and checks and balances mechanism
+comprising the Shareholders' General Meeting, the Board
+of Directors, the Board of Supervisors and the Senior
+Management featuring clearly-defined responsibilities
+and accountability, coordination and effective checks and
+balances, and to optimize responsibilities of the authority
+organ, decision-making organ, supervisory organ and
+executive organ. As a result, the corporate governance
+operation mechanism with a scientific decision-making
+process, effective supervision and steady operation has
+been in place.
+Corporate Governance Report
+Internal Audit
+Sub-bureau
+Amendment to the Articles of Association
+Audit
+Committee
+US Risk
+Committee
+Related Party
+Transactions Control
+Committee
+Fees of Mr. Huang Li are his allowances obtained as Employee Supervisor of the Bank, excluding his remuneration with the
+Bank in accordance with the employee remuneration system.
+During the reporting period, Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang did
+not obtain remuneration from the Bank during their tenure as Directors of the Bank.
+According to relevant rules of the Bank, Senior Management members of the Head Office and employees in positions that
+have a significant influence on the risks of the Head Office include executives of the Bank such as Chairman, Vice Chairman,
+Executive Director, President and Senior Executive Vice President of the Head Office, Senior Management members such as
+Board Secretary and Chief Business Officer, and tier-1 approver. During the reporting period, the Bank's tier-1 approvers were
+assumed by Mr. Wang Jingwu, Mr. Zhang Wenwu, Mr. Zhang Weiwu, Mr. Duan Hongtao, Ms. Xiong Yan and Mr. Zheng
+Guoyu concurrently. As at the disclosure date, the Senior Management members of the Head Office and the employees in
+positions that have a significant influence on the risks of the Head Office had not been involved in the circumstances that
+require the recourse and rebate of performance-based remuneration in 2023.
+During the reporting period, the total remuneration amount paid to Directors, Supervisors and Senior Management members
+was RMB12,258.5 thousand. According to the requirements of relevant government authorities, the total final remuneration
+payable to the Chairman of the Board of Directors, the President, Executive Directors and other Senior Management
+members is still subject to final confirmation by relevant government authorities. Additional details of remuneration will be
+disclosed when they have been determined.
+Since January 2015, the remuneration to the Chairman of the Board of Directors, the President and other executives of the
+Bank has followed the State's policies relating to the remuneration reform on executives of central enterprises.
+Directors, Supervisors and Senior Management
+As the Bank's Independent Non-executive Directors and External Supervisors served as directors or senior management of
+other legal persons or organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or
+organizations became related parties of the Bank. During the reporting period, some Independent Non-executive Directors
+and External Supervisors obtained remuneration from such related parties. Except to the extent of the aforementioned
+circumstances, none of the Bank's Directors, Supervisors and Senior Management was paid by the Bank's related parties
+during the reporting period.
+(7)
+(5)
+(4)
+(3)
+(2)
+(1)
+Notes:
+(6)
+Annual Report 2023
+For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed
+"Appointment and Removal".
+109
+Compensation
+Committee
+Nomination
+Committee
+Risk
+Management
+Committee
+Corporate Social
+Responsibility and Consumer
+Protection Committee
+Strategy
+Committee
+Board of
+Directors
+Annual Report 2023
+- Secondary reporting line
+Shareholders'
+General Meeting
+oriented nature of financial work in all respects. With
+the fundamental purpose of serving the real economy,
+the Board of Directors ensured both development and
+security, and urged the Bank to maintain stable growth,
+adjust structure, foster new drivers, prevent risks, and
+boost development, and play a pivotal role in serving
+the real economy and a ballast stone role in maintaining
+financial stability. The Board of Directors took solid
+steps to fulfill its responsibilities of strategic decisions
+and risk prevention and control. It fully, accurately, and
+comprehensively applied the new development philosophy,
+promoted the improvement of governance mechanisms
+such as risk control, remuneration incentives, and social
+responsibility, and strove to create better value for all
+stakeholders. The Board of Supervisors gave full play to
+its supervisory function. It focused on how the Board of
+Directors and the Senior Management implemented the
+important decisions and deployments of the Party Central
+Committee and the State Council, national economic
+and financial policies and regulatory requirements, etc.
+The Board of Supervisors conducted supervision on duty
+performance, financial activities, risk management, internal
+control and compliance and other aspects, giving full
+play to its important role in corporate governance. There
+is no material divergence between the actual corporate
+governance of the Bank, relevant laws and administrative
+regulations, and the corporate governance-related rules
+issued by CSRC.
+Corporate Governance Framework
+During the reporting period, the Bank has always
+regarded the improvement of corporate governance
+as a fundamental project for achieving high-quality
+development in the new era, and effectively refined the
+modern corporate governance framework, mechanism
+and culture. The Bank constantly developed the
+corporate governance structure which was led by the
+Bank's Party Committee with the Board of Directors
+acting as the decision-making organ, the Board of
+Supervisors responsible for compliance supervision,
+and the Management in charge of operation. The
+Bank strengthened the top-level design of corporate
+governance, revised and improved the Articles of
+Association, and continuously deepened the organic
+integration between the Party's leadership and corporate
+governance. The Bank translated the political and
+institutional advantages of the Party's leadership into
+financial governance efficiency, and stayed committed
+to financial development with Chinese characteristics.
+Focusing on serving Chinese modernization and promoting
+high-quality development, the Board of Directors acted on
+the general principle of pursuing progress while ensuring
+stability. It thoroughly implemented the country's various
+decisions and deployments and financial regulatory
+requirements, and practiced the political and people-
+Overview of Corporate Governance
+Corporate Governance Report
+Primary reporting line
+Feng Weidong
+111
+Board of Directors and Special
+Committees
+Audit
+Directors
+Meeting
+Directors
+Committee
+Committee
+Committee
+Management
+Committee
+Nomination
+Compensation
+Control
+US Risk
+Committee Committee
+Committee
+Committee
+Executive Directors
+Liao Lin
+8/8
+5/5
+11/11
+Yang Siu Shun
+Lu Yongzhen
+Non-executive Directors
+Protection
+4/5
+6/8
+11/11
+2/2
+Wang Jingwu
+11/1 5/5 3/3 5/5
+22
+4/4
+Strategy
+Board of
+General
+Meetings of the Board of Directors
+On 1 February 2024, Mr. Chen Siqing resigned as
+Chairman of the Bank due to his age. The Board of
+Directors elected Mr. Liao Lin as Chairman of the Bank.
+Due to change of job assignments, Mr. Liao Lin resigned as
+President of the Bank on the same day. In order to ensure
+the smooth operation and management of the Bank, Mr.
+Liao Lin, according to the regulation and the Articles, shall
+perform the duties and powers of the President up to the
+date on which the new President of the Bank officially
+takes office. Mr. Liao Lin's qualification as Chairman of the
+Bank was approved by NFRA in February 2024.
+Pursuant to Code Provision C.2.1 of the Corporate
+Governance Code (Appendix C1 to the Hong Kong Listing
+Rules) and the Articles of Association of the Bank, the roles
+of Chairman and President should be held by two persons,
+and the Chairman shall not concurrently hold the position
+of legal representative or chief responsible officer of the
+controlling shareholder. The President is appointed by and
+accountable to the Board of Directors, and performs his
+responsibilities as stipulated in the Articles of Association
+of the Bank and as authorized by the Board of Directors.
+During the reporting period, Mr. Chen Siqing is the
+legal representative and Chairman of the Bank, and
+is responsible for leading the Board of Directors in
+considering and formulating business development
+strategies, risk management, internal control and other
+significant matters of the Bank. During the reporting
+period, Mr. Liao Lin is the President of the Bank, and is
+responsible for the daily management of the business
+operations of the Bank.
+Chairman and President
+Corporate Governance Report
+The Executive Directors of the Bank have worked in
+the areas of banking and management for a long time,
+possess extensive professional expertise and experience
+in those areas and are familiar with the operation and
+management of the Bank. Non-executive Directors have
+worked in the fiscal, economic, financial and governing
+sectors for many years, and they have rich practical
+experience and a relatively high level of understanding of
+policies and theories. All of the Independent Non-executive
+Directors are prestigious Chinese or foreign experts in
+their respective areas, e.g. economy, financial supervision,
+finance, audit and law, and they are familiar with Chinese
+and foreign regulatory rules and have a good knowledge
+of corporate governance, finance and bank management.
+The number of Independent Non-executive Directors
+of the Bank accounted for more than one-third of the
+total members of the Board of Directors, complying with
+relevant regulatory requirements.
+During the reporting period, the Board of Directors of the
+Bank held 11 meetings on 17 January, 23 February, 30
+March, 13 April, 28 April, 29 June, 30 August, 27 October,
+9 November, 30 November and 21 December 2023,
+respectively. At these meetings, the Board of Directors
+reviewed 59 proposals, and heard 23 reports.
+The Bank formulated relatively complete procedures
+for selecting, nominating and electing Directors. With
+diversified backgrounds, the Directors of the Bank
+complemented each other with regard to their expertise,
+professional competence, professional experience, region,
+gender and many other aspects, which ensured the
+scientific decision-making of the Board of Directors. As at
+the disclosure date of the results, the Board of Directors of
+the Bank consisted of 12 directors, including two Executive
+Directors: Mr. Liao Lin and Mr. Wang Jingwu; five Non-
+executive Directors: Mr. Lu Yongzhen, Mr. Feng Weidong,
+Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang; and
+five Independent Non-executive Directors: Mr. Yang Siu
+Shun, Mr. Shen Si, Mr. Fred Zuliu Hu, Mr. Norman Chan
+Tak Lam and Mr. Herbert Walter. The Board of Directors
+has reviewed the implementation and effectiveness of
+its board diversity policy. The members of the Board of
+Directors have included two female directors, both of
+whom have contributed to the scientific and efficient
+decision-making of the Board of Directors by offering a
+unique female perspective. In the future, the Bank will
+take full account of the gender composition of candidates
+in the selection of Directors in accordance with relevant
+policies for the diversified backgrounds of Directors, in
+order to further improve the gender diversity of members
+of the Board of Directors.
+The Board of Directors of the Bank earnestly and fully
+implemented the resolutions reviewed and approved by
+the Shareholders' General Meeting during the reporting
+period.
+Implementation of Resolutions of the
+Shareholders' General Meeting by the Board
+of Directors
+Annual Report 2023
+112
+As the decision-making organ of the Bank, the Board of
+Directors of the Bank is accountable to, and shall report
+its work to, the Shareholders' General Meeting. The Board
+of Directors is responsible for, among others, convening
+the Shareholders' General Meeting; implementing the
+resolutions of the Shareholders' General Meeting; deciding
+on the Bank's business plans and investment proposals,
+formulating its development strategies and supervising
+the implementation of such strategies; formulating
+annual financial budget and final accounts of the Bank;
+formulating plans for profit distribution and loss recovery
+of the Bank; formulating plans for the increase or decrease
+of the Bank's registered capital, capital replenishment and
+financial restructuring of the Bank; formulating policies
+and basic management systems of the Bank such as risk
+tolerance, risk management system and internal control
+system, supervising the implementation of such systems,
+and assuming the ultimate responsibility for enterprise
+risk management; appointing or removing President and
+the Board Secretary, and appointing or removing Senior
+Executive Vice Presidents and other senior management
+members (except the Board Secretary) who shall be
+appointed or removed by the Board of Directors under
+relevant laws according to the nomination of the President
+and deciding on their compensation, bonus and penalty
+matters; deliberating the policy objectives and related
+matters of the Bank's fulfillment of social responsibility in
+respect of environmental, social, and governance (ESG);
+deliberating the Bank's development strategies, basic
+management systems, annual business plans, assessment
+measures and other matters related to inclusive finance;
+determining the Bank's consumer protection strategies,
+policies and objectives, and safeguarding the legitimate
+rights and interests of financial consumers and other
+stakeholders; establishing a mechanism for identifying,
+reviewing, and managing conflicts of interest between
+the Bank and shareholders, especially major shareholders;
+undertaking the management responsibility for
+shareholders' affairs; and formulating and implementing a
+Senior Management accountability system, and clarifying
+specific ways to investigate responsibilities for dereliction
+of duty and improper performance of duty.
+Responsibilities of the Board of Directors
+Composition of the Board of Directors
+Corporate Governance Report
+The Board of Directors made scientific decisions in
+accordance with economic and financial policies and major
+objectives, with a focus on providing financial services for
+the real economy, developing inclusive finance, promoting
+high-quality development and so on. Meanwhile, the Bank
+continuously reinforced capital management, and made
+efforts to consolidate the foundation of the Bank's support
+for the development of the real economy. The Board
+of Directors reviewed the proposals including the 2023
+business plan, the plan for inclusive finance business in
+2023, the report on internal capital adequacy assessment
+in 2022, the report on capital adequacy ratio in 2022 and
+the planned issuance limit of capital instruments, and
+heard the reports on the annual, interim and quarterly
+operating results and the priorities of the Board of
+Directors in 2023.
+The Board of Directors actively practiced the ESG
+development philosophy and endeavored to help the
+Bank maximize the comprehensive value of economy,
+environment and society. It revised the Administrative
+Measures for Consumer Protection, reviewed proposals
+on the Application for Temporary Authorization Limit for
+External Donations, the Corporate Social Responsibility
+(ESG) Report 2022, the 2022 Work Report on and 2023
+Work Plan for Consumer Protection, etc.
+Transactions
+Risk
+Consumer
+Shareholders'
+Related Party
+and
+The Board of Directors ensured both development and
+security, attached great importance to risk prevention
+and control, continuously improved the enterprise risk
+management systems and mechanisms, and prevented
+the systemic risk with all strength. It revised the Rules
+for Enterprise Risk Management, the Data Security
+Management Measures and other relevant rules, reviewed
+proposals including the 2022 Risk Report and Risk Appetite
+Assessment, the Liquidity Risk Management Strategy for
+2023, the Management Report on Interest Rate Risk in the
+Banking Book of the Group for 2022 and the Management
+Strategy for 2023, and heard reports such as Report on
+Technology Risk Management in 2022.
+Responsibility
+Attendances in person/Number of meetings that should be attended
+Special Committees of the Board of Directors
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Corporate Governance Report
+113
+Annual Report 2023
+For major proposals reviewed by the Board of Directors,
+please refer to the announcements of the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the
+website of the Bank.
+Corporate
+Social
+Committee Member
+7/8
+Chairman
+116
+Primary Responsibilities of the Strategy Committee The Strategy Committee is
+mainly responsible for considering the Bank's strategic development plan, risk events
+that bear material influence on the overall situation, annual financial budget and final
+account, strategic capital allocation and asset and liability management objectives,
+significant institution restructuring and adjustment plan, major investment and financing
+proposal, merger and acquisition proposal, strategic development plan for domestic and
+overseas branches and institutions, strategic development plan for human resources, IT
+development and other special strategic development plans, strategic arrangements for
+social responsibility and annual corporate social responsibility report (ESG report), etc.,
+and making recommendations to the Board of Directors. The Strategy Committee is also
+responsible for planning on the overall development of various financial businesses, and
+examining and assessing the soundness of the corporate governance framework.
+Performance of the Strategy Committee During the reporting period, the Strategy
+Committee held five meetings on 23 February, 30 March, 30 August, 27 October and
+30 November 2023, respectively. At these meetings, the Strategy Committee reviewed
+12 proposals, and heard three reports. The Strategy Committee paid attention to major
+strategic issues, reviewed the proposed issuance limit of capital instruments, annual fixed
+assets investment budget, report on the management of capital adequacy ratio, profit
+distribution plan and other proposals to promote the Bank's high-quality development.
+Primary Responsibilities of the Corporate Social Responsibility and Consumer
+Protection Committee The Corporate Social Responsibility and Consumer Protection
+Committee is mainly responsible for hearing and considering the Bank's policy, target
+and issues related to the performance of corporate social responsibility in respect of
+environmental, social and governance (ESG), rural revitalization services, the Bank's
+corporate culture construction, etc., and understanding the Bank's fulfillment of social
+responsibility. The committee is responsible for studying major issues and important
+policies related to the Bank's consumer protection, guiding and pushing forward the
+establishment and improvement of a management system for consumer protection,
+and reviewing and supervising the implementation of the Bank's consumer protection
+strategies, policies, targets, and work reports. The committee shall also consider the
+Bank's policies and targets, such as green finance strategies, climate risk management and
+green bank construction, as well as the development strategy, basic management system,
+annual business plan and assessment method of inclusive finance.
+Performance of the Corporate Social Responsibility and Consumer Protection
+Committee During the reporting period, the Corporate Social Responsibility and
+Consumer Protection Committee held three meetings on 23 February, 28 April and
+30 August 2023, respectively. At these meetings, the Corporate Social Responsibility
+and Consumer Protection Committee reviewed four proposals and heard one report. It
+actively urged the Bank to perform social responsibilities, considered the proposals on
+the application for temporary authorization limit for external donations, etc., providing
+continuous support for charity and other public-interested activities. The committee
+focused on the business development of green finance and inclusive finance, and
+considered and approved the proposals on the 2023 annual business plan for inclusive
+finance. The committee focused on consumer protection, considered and approved the
+proposal on the consumer protection in 2022 and consumer protection plan for 2023,
+and heard the report on consumer protection work for the first half of 2023.
+Primary Responsibilities of the Audit Committee The Audit Committee is mainly
+responsible for constantly overseeing the Bank's internal control system, and supervising,
+inspecting and evaluating financial information and internal audit of the Bank, proposing
+the engagement or replacement of external auditors, reviewing the reports of external
+auditors, and coordinating the communication between the internal audit departments
+and external auditors, and assessing mechanisms for the Bank's staff to report
+misconducts in financial statements, internal control, etc., and assessing the mechanism
+for the Bank to conduct independent and fair investigations and take appropriate actions
+in relation to the reported matters.
+Annual Report 2023
+Corporate Governance Report
+Performance of the Audit Committee During the reporting period, the Audit
+Committee held eight meetings on 17 January, 23 February, 29 March, 13 April, 27 April,
+29 August, 27 October and 20 December 2023, respectively. At these meetings, the
+Audit Committee reviewed nine proposals, and heard 16 reports. The Audit Committee
+continued to oversee the Bank's internal control system, reviewed the Bank's annual
+internal control assessment report, heard reports on internal control audit results, and
+supervised the improvement of the Group's compliant operation. It inspected and
+supervised the implementation of internal and external audits, considered proposals on
+the internal audit plan, heard reports on the implementation of internal audits and the
+summary of external audit and so on to advance the continuous improvement of an
+effective communication mechanism between internal and external audits.
+Reviewing periodic reports
+The Audit Committee periodically reviewed the financial reports of the Bank. It had
+reviewed the annual report, interim report and quarterly reports of the Bank and reported
+the review opinion to the Board of Directors. It also organized and conducted an internal
+control assessment of the Group and engaged external auditors to audit the effectiveness
+of the internal control over financial reporting in accordance with the relevant regulatory
+requirements. Additionally, it enhanced communication with external auditors, attached
+importance to the supervision of external auditors and heard several reports of external
+auditors concerning audit results, and management proposals etc.
+During the preparation and audit of the 2023 financial statements, the Audit Committee
+discussed and agreed with the external auditors on matters such as audit schedule and
+progress arrangement, followed the status of external audit and conducted supervision
+over relevant work at the appropriate time by means of hearing reports and holding
+informal discussions, and reviewed the unaudited and preliminarily audited annual
+financial statements respectively. The Audit Committee held a meeting on 27 March
+2024, and considered that the 2023 financial statements truly, accurately and completely
+reflected the financial position of the Bank.
+Examining internal control system
+Audit Committee
+The Audit Committee is responsible for constantly monitoring and examining the internal
+control system of the Bank, and examining the effectiveness of the system at least on
+an annual basis. The Audit Committee performed its function of examining the Bank's
+internal control system through reviewing the administrative rules and regulations and
+their implementation, and examined and assessed the compliance and effectiveness of
+major operating activities of the Bank.
+Annual Report 2023 117
+Corporate Governance Report
+Risk Management
+Committee
+Effectiveness of the internal audit function
+The Bank has established a vertical and independent internal audit management system
+responsible and reporting to the Board of Directors. The Board of Directors regularly
+reviews the internal audit plan and hears internal audit reports on internal audit activities,
+audit supporting measures, internal audit team building, etc., thus performing the function
+of risk management. The Audit Committee examines, monitors and assesses the internal
+audit work of the Bank, supervises the internal audit rules and their implementation, and
+makes assessment of audit procedures and results of the internal audit department. It is
+also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department
+and external auditors. The internal audit department is accountable to and reports to the
+Board of Directors, is guided by the Board of Supervisors and is under the examination,
+supervision and assessment of the Audit Committee. For details of the internal audit,
+please refer to the section headed "Corporate Governance Report - Internal Audit".
+Primary Responsibilities of the Risk Management Committee The Risk Management
+Committee is primarily responsible for reviewing and revising the Bank's risk strategy,
+risk management policy, risk appetite, enterprise risk management framework and
+internal control process, and supervising and assessing its implementation progress
+and results. The committee is also responsible for continuously monitoring the Bank's
+risk management system, monitoring and evaluating the setup, mode of organization,
+working procedures and results of risk management departments, supervising and
+assessing the Senior Management members' control of strategy risk, credit risk, market
+risk, operational risk (case prevention), liquidity risk, compliance risk, reputational risk, IT
+risk, interest rate risk in banking book, country risk and other risks, and putting forward
+suggestions on the improvement in risk management and internal control of the Bank;
+clarifying the requirements for risk data and reporting, making sure that risk reporting is
+compatible with the Bank's business pattern, risk status and internal management needs
+etc., and proposing improvement requirements to the Senior Management when risk data
+and reporting cannot meet requirements.
+Performance of the Risk Management Committee During the reporting period, the
+Risk Management Committee held eight meetings on 23 February, 29 March, 27 April,
+28 June, 29 August, 27 October, 30 November and 20 December 2023, respectively. At
+these meetings, the Risk Management Committee reviewed 19 proposals, and heard four
+reports. The Risk Management Committee continuously urged the Bank to strengthen
+enterprise risk management. It considered and approved proposals on the 2022 Risk
+Report and Risk Appetite Assessment, the Management Report on Interest Rate Risk in the
+Banking Book of the Group for 2022 and the 2023 Management Strategy, 2023 Liquidity
+Risk Management Strategy, and the 2022 Compliance Risk and AML Management Report
+of the Group and heard reports on technology risk management in 2022. It has become
+more foresighted in preventing and controlling financial risks and enhancing the risk
+management mechanism, in a bid to assist the Board of Directors in improving its risk
+management, prevention and control capabilities.
+Examining the risk management system
+The Risk Management Committee is responsible for constantly monitoring and examining
+the risk management system of the Bank, and examining the effectiveness of the system
+at least on an annual basis. Under the enterprise risk management system structure of
+the Bank, the Risk Management Committee performed its function of examining the
+Bank's risk management system through reviewing and revising the risk strategy, risk
+management policy, risk appetite, the enterprise risk management structure and internal
+control process, monitoring and evaluating the setup, mode of organization, working
+procedures and results of risk management departments, regularly assessing the risk
+policy, risk appetite and enterprise risk management status, supervising and assessing risk
+control activities conducted by the Senior Management members in terms of credit risk,
+market risk, operational risk (case prevention), liquidity risk, compliance risk, reputational
+risk, IT risk, interest rate risk in the banking book, country and climate risk, model risk
+and other new risks. For details of risk management, please refer to the section headed
+"Discussion and Analysis Risk Management".
+Annual Report 2023
+Shen Si
+The Board of Directors of the Bank is responsible for establishing, improving and effectively
+implementing internal control, assessing its effectiveness and truthfully disclosing internal
+control assessment reports according to the standard system for enterprise internal control.
+The objective of the internal control of the Bank is to reasonably assure the compliance
+of its operation and management with relevant laws, safety of its assets, as well as the
+authenticity and completeness of its financial reports and relevant information, in order
+to enhance operation efficiency and effectiveness, and to facilitate the realization of its
+development strategy. Due to inherent limitation of internal control, only reasonable
+assurance can be provided for the aforementioned objectives. The Board of Directors and
+the Audit Committee have reviewed and approved the 2023 Internal Control Assessment
+Report of the Bank. For details of the Bank's internal control, please refer to the section
+headed "Corporate Governance Report - Internal Control".
+Corporate Social
+Responsibility and
+Consumer Protection
+Committee
+118
+During the reporting period, the performance of duties by the special committees of the Board of Directors is set out below:
+Strategy Committee
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Norman Chan Tak Lam
+Committee Member
+Committee Member
+Committee Member
+Herbert Walter
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Fred Zuliu Hu
+Chairman
+Chairman
+115
+Corporate Governance Report
+Committee Member
+Committee Member
+Annual Report 2023
+Committee Member
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Committee Member
+Chairman
+Performance of the Compensation Committee During the reporting period, the
+Compensation Committee held three meetings on 23 February, 30 August and 27
+October 2023, respectively. At these meetings, the Compensation Committee reviewed six
+proposals including the proposals on the payment of remuneration to Directors and Senior
+Management members for 2022, the Senior Management performance evaluation plan
+for 2023 and the renewal of directors, supervisors and officers liability insurance for 2023-
+2024, and heard the 2022 assessment report on the performance of duties of Directors
+by the Board of Directors. The Compensation Committee, in accordance with regulatory
+requirements, drafted the remuneration of directors, and improved the performance
+evaluation indicators and the incentive and constraint mechanism.
+Primary Responsibilities of the Related Party Transactions Control Committee The
+Related Party Transactions Control Committee is mainly responsible for developing the
+basic policies governing the management of related party transactions, identifying the
+Bank's related parties; approving related party transactions and other related matters
+within the authority granted by the Board; receiving related party transaction statistics for
+filing purpose; reviewing the related party transactions that are subject to the approval of
+the Board of Directors or the Shareholders' General Meeting; and reporting to the Board
+of Directors on the implementation of the related party transaction management policies
+as well as the conditions on these transactions.
+Performance of the Related Party Transactions Control Committee During the
+reporting period, the Related Party Transactions Control Committee held four meetings on
+29 March, 27 April, 29 August and 30 November 2023, respectively. At these meetings,
+the Related Party Transactions Control Committee reviewed and approved three proposals
+including the proposal on identification of related parties of the Bank, and heard the
+special report on related parties and related party transactions in 2022. The Related Party
+Transactions Control Committee focused on reviewing the fairness and objectivity of
+related party transactions, urged the Bank to strengthen the management of related party
+transactions and inside transactions, and assisted the Board of Directors in ensuring the
+Bank's related party transactions are carried out in compliance with laws and regulations.
+Primary Responsibilities of the US Risk Committee In accordance with the relevant
+requirements in the Enhanced Prudential Standards for Bank Holding Companies and
+Foreign Banking Organizations established by the Federal Reserve Board, the US Risk
+Committee supervised the implementation of the US business-related risk management
+framework and relevant policies.
+Performance of the US Risk Committee During the reporting period, the US Risk
+Committee held five meetings on 29 March, 28 June, 29 August, 30 November and 20
+December 2023, respectively. At these meetings, the US Risk Committee reviewed three
+proposals, and heard 11 reports. It attached importance to and strengthened the risk and
+compliance management of overseas institutions, reviewed and approved the proposals
+including the risk management framework, revision of risk appetite and risk management
+in the US, and the liquidity stress testing, funding contingency plans, key business lines
+and product liquidity risks in the US, heard the reports on the risk management and
+liquidity risk management in the US in 2022, and assisted the Board of Directors in urging
+the Management to continuously strengthen compliance and risk prevention and control
+in international operation.
+120
+Annual Report 2023
+Corporate Governance Report
+Investigation and Training of Directors
+In accordance with the Articles of Association of the
+Bank, Directors are elected by the Shareholders' General
+Meeting with a term of three years, and the appointment
+shall take effect from the date of approval by NFRA or
+upon completion of relevant procedures according to the
+requirements of NFRA. Directors may be re-appointed
+through re-election at the Shareholders' General Meeting
+after expiration of their term.
+Responsibilities of Directors in Respect of
+Financial Statements
+The Directors of the Bank acknowledged that they are
+responsible for the preparation of the financial statements
+of the Bank. During the reporting period, in strict
+compliance with relevant provisions, the Bank published
+the 2022 Annual Report, the First Quarterly Report of
+2023, the 2023 Interim Report and the Third Quarterly
+Report of 2023 as scheduled.
+During the reporting period, Directors of the Bank
+proactively conducted surveys on departments, branches
+and subsidiaries of the Bank concerning such topics as
+optimization of asset structure and income structure,
+discussions and issues on the practice of expected
+credit loss approach, risk management and sustainable
+development for inclusive finance, building of risk
+warning mechanism, ESG and green finance development,
+financial services for boosting manufacturing strength and
+technological innovation, overseas institutions assisting in
+building the Belt and Road Initiative and serving the high-
+standard opening up of the country, and the operation
+and management of the Bank's branches and affiliates. In
+the form of survey reports, such investigations provide the
+Bank with constructive suggestions and opinions.
+During the reporting period, the Bank advanced overall
+training for Directors, constantly increased training
+resources, and actively expanded the channels and forms
+of training for Directors, with the aim of assisting the
+Directors in continuing to improve their ability to perform
+their duties. Directors of the Bank attended relevant
+trainings according to work needs.
+The topics of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+US Risk Committee
+Term of Directors
+Related Party Transactions
+Control Committee
+An extraordinary general meeting should be convened
+within two (2) months from the date when shareholders
+holding more than ten percent (10%) of the voting
+shares of the Bank, either individually or jointly, request
+to convene in writing. Proposing shareholders shall have
+the right to request the Board of Directors in writing to
+convene an extraordinary general meeting. The Board of
+Directors shall make a written response as to whether
+or not it agrees to convene such a meeting within ten
+(10) days upon receipt of the request in accordance with
+laws, administrative regulations, rules and the Articles of
+Association of the Bank. Reasonable expenses incurred
+from the case where shareholders convene the meeting
+by themselves due to the failure of the Board of Directors
+to convene the meeting shall be borne by the Bank, and
+deducted from the payment to those negligent directors.
+119
+Internal trainings
+Shareholders are entitled to supervise business operation
+of the Bank and put forward suggestions or inquiries
+accordingly. Shareholders are entitled to review the
+information of the Bank such as the Articles of Association,
+the register of shareholders, documents on the status
+of share capital and minutes of Shareholders' General
+Meetings, etc.
+Putting Forward Suggestions and Reviewing
+Documents
+The powers of the Board of Directors and the Senior
+Management are separated in strict compliance with the
+Articles of Association and other corporate governance
+documents of the Bank. During the reporting period, the
+Bank made an inspection on the implementation of the
+plan on authorization of the Board of Directors to the
+President, and no matter was found to be beyond the
+approval authority of the President.
+Powers and Functions of the Senior
+Management
+Shareholders who hold more than three percent (3%)
+of shares of the Bank, either individually or jointly, may
+prepare an interim proposal and submit it in writing to the
+Board of Directors ten (10) days before the Shareholders'
+General Meetings convened. The Board of Directors shall
+issue a supplementary notice for the Shareholders' General
+Meeting within two (2) days upon receipt of the proposal
+and submit such proposal to the Shareholders' General
+Meeting for approval.
+Submitting Interim Proposals for the
+Shareholders' General Meeting
+Corporate Governance Report
+Proposing the Convening of an Extraordinary
+General Meeting
+Corporate Governance Report
+Nomination Committee
+Compensation Committee
+Primary Responsibilities of the Nomination Committee The Nomination Committee is
+mainly responsible for making recommendations to the Board of Directors on candidates
+for Directors and Senior Management members, nominating candidates for chairmen and
+members of special committees of the Board of Directors, formulating the standards and
+review procedures for selection and appointment of Directors and Senior Management
+members, and hearing the training and development plans for Senior Management
+members and key reserved talents. The Nomination Committee is also responsible for
+assessing the structure, size and composition of the Board of Directors and making
+recommendations to the Board of Directors based on the Bank's development strategy.
+The Articles of Association of the Bank specifies procedures and methods to nominate
+Directors. Please refer to Article 118 of the Articles of Association. During the reporting
+period, the Bank appointed and renewed the appointments of Directors of the Bank
+in strict accordance with the Articles of Association of the Bank. The Nomination
+Committee reviews the qualifications of candidates for Directors based on whether the
+candidate complies with applicable laws, administrative rules, regulations and the Articles
+of Association of the Bank. The Bank attached importance to diversified sources and
+backgrounds of Directors and continued the efforts to enhance the professionalism of the
+Board of Directors, thus laying the foundation for the effective operation and scientific
+decision-making of the Board of Directors. According to the requirement on diversified
+composition of the Board of Directors in the Rules for Recommendation and Nomination
+of Board Candidates of the Bank, the Nomination Committee shall pay attention to the
+complementarity of the candidates in terms of expertise, professional competence and
+experience, cultural and educational background, gender, etc., to ensure the members of
+the Board of Directors are well equipped, experienced and have diversified perspectives
+and views. In order to implement the diversity policy, the Nomination Committee
+discusses and designs measurable goals according to actual conditions and assesses the
+improvement of diversified composition of the Board of Directors during the course of its
+yearly assessment on the framework, number of Directors and composition of the Board
+of Directors. As at the disclosure date of the results, there were five Independent Non-
+executive Directors, accounting for more than one-third of the total members of the
+Board of Directors.
+Performance of the Nomination Committee During the reporting period, the
+Nomination Committee held five meetings on 17 January, 23 February, 29 June, 9
+November and 21 December 2023, respectively. Through these meetings, the Nomination
+Committee reviewed seven proposals including the proposals on the nomination of the
+candidate for Non-executive Director of the Bank and extension of tenure of relevant
+positions in the special committees of the Board of Directors, nomination of the candidate
+for Independent Director, appointment of Senior Executive Vice President and Chief
+Business Officer and suggestions on adjusting some of the chairpersons and members
+of special committees of the Board of Directors. The Nomination Committee promoted
+the change of directors and appointment of Senior Management members in an orderly
+manner and continuously improved and adjusted the composition of special committees
+of the Board of Directors.
+Primary Responsibilities of the Compensation Committee The Compensation
+Committee is mainly responsible for formulating assessment rules of the Board of Directors
+on the performance of duties and compensation plans for Directors, organizing the
+assessment of the Board of Directors on the performance of duties of Directors, putting
+forth the proposal on remuneration distribution for Directors, formulating and reviewing
+the assessment measures and compensation plans for Senior Management members of
+the Bank and evaluating the performance and behaviors of Senior Management members.
+Annual Report 2023
+Shareholders' Rights
+The Listed Companies Association of Beijing:
+Training on the strategic management of listed companies
+Training on the information disclosure of listed companies
+As at the disclosure date of the results, the Board of
+Supervisors of the Bank consisted of three members,
+including one Employee Supervisor, namely Mr. Huang Li;
+and two External Supervisors, namely Mr. Zhang Jie and
+Mr. Liu Lanbiao.
+Training on the performance of duties of directors, supervisors and senior management
+As the supervisory organ of the Bank, the Board of
+Supervisors is accountable to, and shall report its work
+to, the Shareholders' General Meeting. The Board of
+Supervisors is responsible for, among others, supervising
+the Board of Directors to establish the prudent business
+vision and value criteria, and formulating a development
+strategy in line with the actual situation of the Bank;
+assessing the soundness, rationality and prudence of the
+Bank's development strategy, and forming assessment
+reports; formulating measures for assessing the
+performance of duties of the Board of Directors, Senior
+Management members and Supervisors, and supervising
+and assessing the performance of duties of the Board of
+Directors, Senior Management members and Supervisors;
+conducting leave audits towards Directors and Senior
+Management personnel when necessary; inspecting and
+supervising financial activities of the Bank; examining
+financial information such as financial accounting report,
+business report and profit distribution plan to be submitted
+to the Shareholders' General Meeting by the Board of
+Directors; inspecting and supervising the business decision-
+making, risk management and internal control of the Bank,
+and urging the remedial actions; nominating Shareholder
+Supervisors, Employee Supervisors, External Supervisors,
+and Independent Directors; supervising the selection and
+appointment of Directors; supervising the implementation
+of the Bank's remuneration management policy and the
+soundness and rationality of the remuneration plan for
+Senior Management members; formulating remuneration
+plan for Supervisors and submitting it to the Shareholders'
+General Meeting for review and decision; supervising the
+engagement, dismissal, renewal of the Bank's external
+auditing institution, and its auditing work, and guiding
+and supervising the internal audit work of the Bank;
+raising proposals to the Shareholders' General Meeting;
+proposing to convene an extraordinary general meeting
+of shareholders, and convening and presiding over the
+extraordinary general meeting of shareholders in case the
+Board of Directors fails to perform its duty of convening
+Shareholders' General Meeting; and proposing to convene
+an interim meeting of the Board of Directors, etc.
+Composition of the Board of Supervisors
+124
+Meetings of the Board of Supervisors
+During the reporting period, the Board of Supervisors held
+nine meetings, reviewed 17 proposals including the Report
+on the Work of the Board of Supervisors for 2022, the
+Report on Performance Evaluation and the Report on the
+Assessment Opinions about the Development Strategy,
+heard 34 reports including the business operation,
+implementation of strategy planning and risk management
+of the Bank, and reviewed 35 special reports including the
+quarterly supervision, special survey reports of the Board
+of Supervisors and the implementation of supervision
+suggestions of the Board of Supervisors.
+Attendance of Supervisors of the Bank in meetings during the reporting period was as follows:
+Responsibilities of the Board of Supervisors
+Supervisor
+Zhang Jie
+Attendances in person/Number of meetings that should be attended
+Shareholders'
+General Meeting
+2/2
+2/2
+2/2
+Board of
+Supervisors
+Huang Li
+Training on the ESG report of listed companies
+Board of Supervisors
+Annual Report 2023
+Training on strengthening the market capitalization of listed companies
+Training on investor relations management
+Training on the measures for independent director management of SSE-listed companies
+in Beijing
+Anti-money Laundering training
+Trainings on business line
+Training of Board Secretary
+During the reporting period, the Board Secretary of the
+Bank attended the relevant specialized training sessions,
+with the training hours over 15 hours, which met relevant
+regulatory requirements.
+Independence and Performance of Duties of
+Independent Non-executive Directors
+Corporate Governance Report
+The Bank conducted the appointment of Independent
+Non-executive Directors in strict accordance with the
+relevant regulatory rules, the Articles of Association of
+the Bank and other provisions. The qualifications, number
+and proportion of the Bank's Independent Non-executive
+Directors comply with regulatory requirements.
+Corporate Governance Report
+The Bank's Independent Non-executive Directors do not
+have any business or financial interests in the Bank or its
+subsidiaries, and they have not assumed any managerial
+position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent
+Non-executive Directors and considered that they were
+independent.
+During the reporting period, the Bank's Independent
+Non-executive Directors earnestly attended the meetings
+of the Board of Directors and special committees, gave
+independent opinions on the issues for consideration,
+and put forward suggestions in terms of improving the
+capacity of financial services in serving the real economy,
+reinforcing risk control and compliance management,
+facilitating digital development, strengthening capital
+management, and promoting the high-quality development
+of the Group, etc. In accordance with the Corporate
+Governance Code (Appendix C1 to the Hong Kong
+Listing Rules), Independent Non-executive Directors and
+the Chairman of the Board of Directors held discussions
+without the participation of other Directors, fully
+communicated and exchanged information on the Bank's
+risk compliance, digital transformation, internationalization
+strategy, talent management, etc. Meanwhile, Independent
+Non-executive Directors actively attended various meetings,
+symposia, surveys, trainings and other activities of the
+Bank, to gain a deep understanding of the Bank's ESG and
+green finance, IT, digital transformation of commercial
+banks, enterprise risk management, implementation of the
+Group's international development strategy, and operation
+and management of branches. Independent Non-executive
+Directors put forward a series of valuable suggestions in
+each of the performance activities, which have been highly
+valued by the Bank and implemented according to the
+actual conditions.
+During the reporting period, the Bank's Independent Non-
+executive Directors did not raise any objection to proposals
+of the Board of Directors and special committees of the
+Board of Directors.
+For the details on performance of duties of Independent
+Non-executive Directors of the Bank during the reporting
+period, please refer to the Work Report of Independent
+Directors for 2023 issued by the Bank on 27 March 2024.
+122
+Annual Report 2023 121
+Annual Report 2023
+Internal Control
+Special Provisions on Rights of Preference
+Shareholders
+During the reporting period, the Bank implemented risk-
+oriented audit activities according to the development
+strategies and central tasks of reform and transformation
+of the Bank. The Bank expanded the audit coverage
+of major areas, various risks, key institutions, and key
+minorities, and comprehensively accomplished the annual
+audit plan. The audit focused on the Bank's performance
+in implementing national policies, meeting regulatory
+requirements, improving the quality and efficiency of
+strategy implementation, strengthening risk prevention and
+control and other aspects, covering such areas as credit
+business, financial benefit, emerging business, FinTech,
+operation management, capital management and internal
+control. The Bank also paid close heed to and made full
+use of audit findings and recommendations, with the
+aim of continuously improving risk management, internal
+control and corporate governance.
+Xi'an
+Office
+Kunming
+Office
+Chengdu
+Office
+Guangzhou
+Office
+Wuhan
+Office
+Nanjing
+Office
+During the reporting period, the Bank actively adapted
+to the changes in the risk management conditions,
+promoted the transformation of operation model of audit
+projects, increased the allocation of audit resources and
+continuously improved audit efficiency and value. The Bank
+sped up the digital transformation of audit, enhanced the
+information system support capabilities, and expanded
+the coverage of audit model system. The Bank deepened
+the transformation of the internal audit mechanism,
+strengthened the cultivation, selection and management
+of audit personnel, and improved the ability to perform
+the duties of the audit team. The Bank well conducted
+"second half of the chapter" of the audit remediation,
+Shanghai
+Office
+Tianjin
+Office
+Beijing
+Office
+Board of
+Supervisors
+Internal Audit
+Bureau
+Audit Committee
+Senior
+Management
+Board of
+Directors
+Shenyang
+Office
+Primary reporting line
+Secondary reporting line
+improved the quality and efficiency of supervision and
+audit coordination, strengthened the interconnection with
+other supervisions, and effectively enhanced the cohesion
+of internal and external supervisions.
+Deloitte Touche Tohmatsu Certified Public Accountants
+LLP was the domestic auditor of the Bank for the financial
+statements audit in 2023, and Deloitte Touche Tohmatsu¹
+was the international auditor of the Bank for the financial
+statements audit in 2023. Deloitte Touche Tohmatsu
+Certified Public Accountants LLP was also the auditors
+of internal control of the Bank in 2023. Deloitte Touche
+Tohmatsu Certified Public Accountants LLP, Deloitte
+Touche Tohmatsu (collectively, the "Deloitte Touche
+Tohmatsu"), Audit Project Partner and Signatory Certified
+Public Accountant (Wu Weijun), and Signatory Certified
+Public Accountant (Zeng Hao) have rendered audit services
+for the Bank for three consecutive years (2021-2023).
+During the reporting period, the Group paid Deloitte
+Touche Tohmatsu and its member institutions a total fee
+of RMB184 million for the audit of financial statements
+(including the audit of financial statements of subsidiaries
+and overseas branches), of which, RMB104 million
+(including fee for internal control audit of RMB8.80 million)
+was paid by the Bank.
+Annual Report 2023
+128
+The Bank adhered to tackling both the manifestations
+and the sources of corruption, and deepened systematic
+governance to ensure all personnel do not dare to, are
+unable to and have no desire to commit corruption. The
+Bank focused on key issues, key areas, key targets, new
+corruption and hidden corruption, and enhanced the
+joint efforts of regulatory supervision, audit supervision,
+compliance supervision and judicial supervision in finding
+and punishing financial corruption. It intensified the
+investigation and handling of cases, formulated the
+guidelines for the release of information on serious
+duty-related illegal and criminal cases, and continuously
+enhanced the deterrent effect of investigation and
+handling of cases. The Bank improved the working
+mechanism of promoting reform through cases and
+promoting governance through cases, established a list of
+rights and responsibilities and a system of responsibilities,
+improved the power operation mechanism that links
+decision-making, review, implementation, supervision
+and accountability, strengthened the prevention and
+control of integrity risks, and spared no efforts to block
+all kinds of risk loopholes. The Bank actively promoted
+the building of a clean and honest ICBC in the new era,
+formulated the system to accelerate the building of a clean
+and honest ICBC, and established a clean and honest
+culture and education base. It also launched the "Clean+"
+campaign, actively cultivated a clean and honest culture,
+publicized the concept of integrity and integrity models,
+promoted the honest family tutoring and family style,
+and regularly carried out integrity education. Moreover,
+the Bank deepened case-based learning, created new
+warning education methods, and strengthened classified
+warning education and exposure to different management
+levels through various methods such as WeChat publicity,
+shooting warning films, making and issuing warning
+documents, and holding warning education conferences,
+to build a solid anti-corruption dam.
+Anti-corruption Policy
+the governance of sources of complaint letters and visits,
+and intensified special remediations against repeated
+whistleblowing, so as to constantly improve the quality
+and efficiency of supervision by the public.
+The Bank continued to improve the
+whistleblowing and acceptance system of "network,
+telephone, letter, and visit", and adhered to designated
+personnel acceptance, collective investigation and
+judgment, ledger management, tracking and supervision.
+Regarding the whistleblowing matters, the Bank followed
+the principles of "seeking truth from facts, complying with
+laws and regulations, safeguarding legal rights and taking
+responsibility at different levels". In terms of institutional
+and mechanism development, the Bank formulated the
+working system for handling reporting and accusations,
+and clearly defined a territorial jurisdiction and multi-level
+and classified handling mechanism for reporting clues, as
+well as the protection mechanism for whistleblowers, etc.
+In terms of system development and staffing, it developed
+a whistleblowing management system in the Group's
+Internal Control and Compliance Management Platform
+(GICC), and appointed whistleblowing management
+personnel in all domestic branches. In terms of daily
+management, the Bank pushed forward the development
+of risk reminder mechanism, analysis and summary
+mechanism, and communication, investigation and
+negotiation mechanism. It gave full play to the role of
+whistleblowing in supervision, timely discovered cases
+and risk clues, investigated and handled violations, so
+as to maintain business order. The Bank also deepened
+four-in-one
+Engagement of Auditors
+Whistleblowing Rules
+For the information of management and control on
+subsidiaries, please refer to "Discussion and Analysis
+Management on Subsidiaries
+During the reporting period, Deloitte Touche Tohmatsu
+and its member institutions provided the Group with non-
+audit services including professional services for asset
+securitization and bonds issuance etc., and received RMB8
+million for such professional non-audit services.
+Corporate Governance Report
+127
+Annual Report 2023
+1 Deloitte Touche Tohmatsu Certified Public Accountants LLP is the Recognized Public Interest Entity Auditor under Hong Kong's Financial
+Reporting Council Ordinance. Deloitte Touche Tohmatsu is the Registered Public Interest Entity Auditor under Hong Kong's Financial
+Reporting Council Ordinance.
+Business Overview Comprehensive Operation and
+Subsidiary Management · Major Controlled Subsidiaries
+and Equity Participating Company".
+The Bank established a vertical and independent internal audit management system composed of the Internal Audit Bureau
+and ten Internal Audit Sub-Bureaus, which are accountable to and report to the Board of Directors, and shall accept the
+inspection, supervision and evaluation by the Audit Committee of the Board of Directors and the supervision and guidance
+by the Board of Supervisors. The Internal Audit Sub-bureaus, acting as the subordinate agencies of the Internal Audit
+Bureau, are accountable to, and shall report to, the Internal Audit Bureau. The chart below illustrates the internal audit
+management and reporting framework of the Bank:
+Internal Audit
+Corporate Governance Report
+Investor Enquiries
+Corporate Governance Report
+125
+Annual Report 2023
+In 2024, the Bank will further and proactively deepen the
+communication and exchange with investors to enhance
+investors' understanding and recognition of the Bank and
+continue to protect legitimate interests of the investors,
+at the same time, the Bank hopes to receive more support
+and attention from its investors.
+During the reporting period, the Bank had effective
+communication with the investors. The Bank held the
+briefing conference on annual results in the form of "on-
+site meeting + webcast + global telephone" in Hong
+Kong and Beijing simultaneously. It was awarded the
+"Best Practice of the Annual Report Presentation of Listed
+Companies" again by the China Association for Public
+Companies. The Bank strengthened multi-dimensional
+interaction with investors, carried out proactive and
+targeted investor relation activities at a high frequency
+through "online + offline", "one-to-one and one-to-
+many" forms, held investor relation activities themed
+ESG and green finance and reverse roadshow of "path
+to high-quality development" etc., so as to alleviate
+investors' concerns with market-oriented, international
+and professional expressions. The Bank took solid steps
+to protect the legitimate rights and interests of small and
+medium-sized investors, actively responded to inquiries
+about the platforms and channels such as SSE E-interactive,
+investor hotline, investor relation mailbox, etc., and held a
+series of special ICBC activities of "understanding my listed
+company- accessing to blue chip".
+The Bank carried out the investor relations management
+in accordance with the regulatory requirements in the
+place of listing. With consistent adherence to the investor-
+centered approach, the Bank has established an effective
+communication mechanism with investors based on the
+principle of serving investors in a comprehensive, proactive,
+precise, coordinated and efficient manner. The Bank made
+constant and extensive communication with investors and
+analysts through channels like press conferences in relation
+to periodic results announcements, domestic and overseas
+non-deal roadshows, investor hotline, investor relations
+mailbox, investor relations website and the online platform
+of SSE E-interactive, and made records of these activities
+according to relevant regulatory requirements, striving to
+improve its work accuracy and service quality regarding
+investor relations.
+If an investor wishes to enquire any questions related to
+operation performance of the Bank, please contact:
+Effective Communication with Shareholders
+and Review of Investor Relations Activities
+self-inspections. After self-inspections, none of the insiders
+of the Bank were found to be involved in dealings in
+shares of the Bank who have taken advantage of inside
+information during the reporting period.
+The Bank manages inside information and insiders in
+accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and
+conducts the collection, delivery, sorting, preparation
+and disclosure of relevant information in compliance
+with applicable laws and regulations. During the
+reporting period, the Bank continued to strengthen inside
+information management, timely organized the completion
+of insider lists and regularly conducted insider transaction
+Inside Information Management
+Ordinary shareholders of the Bank have the right to
+collect dividends and other forms of benefits distributed
+on the basis of the number of shares held by them;
+preference shareholders shall be entitled to rights to
+dividends in priority to payment of dividends to ordinary
+shareholders. Shareholders have other rights conferred by
+laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+Other Rights
+In the event that the Bank fails to pay the agreed dividend
+to preference shareholders for three years in aggregate or
+for two consecutive years, from the next day following the
+date of approval of the proposal not paying the agreed
+dividend for the current year by the Shareholders' General
+Meeting, preference shareholders shall be entitled to
+attend and vote (together with ordinary shareholders) at
+the Shareholders' General Meeting. For preference shares
+the dividend of which is non-cumulative, the voting rights
+shall be temporarily restored until the full payment of the
+agreed dividend for the current year by the Bank.
+In the following circumstances, preference shareholders
+of the Bank have the right to attend the Shareholders'
+General Meeting and exercise voting rights: (1)
+amendments to the Articles of Association which relate
+to preference shares; (2) the reduction of the registered
+capital of the Bank by more than 10% (either separately
+or in aggregate); (3) merger, division and dissolution or
+change of corporate form of the Bank; (4) issuance of
+preference shares; and (5) other events specified in the
+Articles of Association that will change or abrogate the
+rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders'
+General Meeting shall be given to preference shareholders
+in accordance with the notification procedures applicable
+to ordinary shareholders as specified in the Articles of
+Association.
+Investor Relations
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Annual Report 2023
+126
+9+X risks include credit risk, market risk, operational risk, liquidity risk, interest rate risk in banking book, reputational risk, strategic risk,
+country risk, information technology and cyber security risk, compliance risk, money laundering risk, product risk, climate risk and other risks.
+There was no factor that affected the assessment conclusion
+of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+The Board of Directors of the Bank conducted an assessment
+of the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard
+for Enterprise Internal Control and its supporting guidelines
+issued by five ministries and commissions including MOF, the
+Circular on Further Improving the Effectiveness of Internal
+Control over Financial Reports of Listed Companies issued
+by MOF and CSRC, the Self-regulatory Guidelines for Listed
+Companies No. 1 Standardized Operation issued by SSE
+and relevant regulatory requirements of NFRA. No material or
+significant deficiencies were detected in the Bank's internal
+control system during the assessment. Risks that may arise
+from ordinary deficiencies are controllable and corrective
+actions have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives of the
+Bank. The Bank had maintained effective internal control in all
+material aspects in accordance with the standard system for
+enterprise internal control and relevant rules.
+Internal Control Evaluation and Defects
+While disclosing the annual report, the Bank also disclosed
+the 2023 Internal Control Assessment Report of Industrial
+and Commercial Bank of China Limited in accordance with
+the requirements of MOF, CSRC and SSE. The report stated
+that the Bank had maintained effective internal control
+over financial reporting in all material aspects in accordance
+with the standard system for enterprise internal control and
+relevant rules as at 31 December 2023 (benchmark date).
+Deloitte Touche Tohmatsu Certified Public Accountants LLP
+has audited the effectiveness of the Bank's internal control
+over financial reporting as at 31 December 2023 and issued
+the unqualified audit report on internal control. For details,
+please refer to the announcements published by the Bank on
+the website of SSE, the "HKEXnews" website of HKEX and
+the website of the Bank.
+Internal Control Assessment Report and
+Internal Control Audit
+emphasis on improving control design and strengthening
+implementation, and continuously developed better capacities
+in the whole-process control; the Bank deeply pushed forward
+the development of D-ICBC, strengthened the collection,
+processing and analysis of information, and facilitated smooth
+and effective exchange on internal and external information;
+the Bank deepened the coordination of supervision and
+inspection, and connection of various forms of supervision,
+strengthened closed-loop remediation of issues and accurate
+and serious accountability, and enhanced the connection
+between "regulations, discipline and laws" for supervision
+cohesion to ensure high-level of security.
+1
+During the reporting period, the Bank promoted the building
+of internal control system and put forth efforts on improving
+the adaptability of internal control in a forward-looking
+manner, according to the changes in external risk situation
+and the need for implementation of internal operation and
+management strategies. The Bank continued to implement
+the 2021-2023 Development Plan for Internal Control System
+and carried out the compliance culture activity with the theme
+of "Year for Value Improvement" in depth to continuously
+enhance the Group's employees' awareness of internal control
+compliance; in alignment with the New Capital Regulation, the
+Bank deepened the application of big data and IT, improved
+risk assessment techniques and methods, and strove to
+enhance the ability to identify with foresight and to respond
+to "9+X" risks; the Bank steadily promoted the development
+and optimization of policies, deeply implemented the
+optimization of procedures and system control, placed equal
+The Board of Directors of the Bank is responsible for
+formulating the basic systems for internal control and
+supervising the implementation of such systems; the Audit
+Committee of the Board of Directors is responsible for
+supervising the establishment of internal control system and
+evaluating the compliance and effectiveness of the Bank's
+significant business and management activities. The Bank
+has set up the Internal Audit Bureau and Internal Audit Sub-
+bureaus under vertical management, which are accountable to
+and report to the Board of Directors. The Senior Management
+of the Bank is responsible for formulating systematic policies,
+procedures and methods, as well as taking risk control
+measures. Under the Senior Management, the Operational
+Risk and Internal Control Management Committee
+subordinated to the Risk Management Committee, performs
+the responsibilities related to internal control and evaluates
+the sufficiency and effectiveness of internal control. The Head
+Office and tier-one branches (branches directly managed
+by the Head Office) have internal control and compliance
+departments which are responsible for the organization,
+promotion and coordination of internal control.
+7/9
+Postal code: 100140
+Strategy and Investor
+Department, Industrial and Commercial Bank of
+China Limited, 55 Fuxingmennei Avenue, Xicheng
+District, Beijing, China
+Relations
+Address: Corporate
+Corporate Governance Report
+9/9
+External trainings
+Liu Lanbiao
+9/9
+As the executive organ of the Bank, the Senior
+Management is accountable to the Board of Directors.
+The Senior Management is responsible for, among others,
+the operation and management of the Bank; organizing
+the implementation of operation and investment plans
+approved by the Board of Directors; formulating specific
+rules and regulations of the Bank; determining plans for
+compensation distribution and performances evaluation of
+persons in charge of internal departments and branches
+of the Bank (except for the internal audit department);
+truthfully reporting to the Board of Directors or the Board
+of Supervisors on the business performance; drafting
+the annual financial budget plan, final account plan,
+profit distribution plan and loss recovery plan, plans for
+increase or reduction of the registered capital, the issuance
+of bonds or other securities and listing, and making
+suggestions in that respect to the Board of Directors.
+Responsibilities of the Senior Management
+Senior Management
+The Bank has adopted a set of codes of conduct
+concerning the securities transactions by directors and
+supervisors which are no less stringent than the standards
+set out in the Model Code for Securities Transactions by
+Directors of Listed Issuers (Appendix C3 to the Hong Kong
+Listing Rules). After making enquiries to all Directors and
+Supervisors of the Bank, each Director and Supervisor
+confirmed that he/she has complied with the provisions
+of the aforesaid codes of conduct during the reporting
+period.
+Corporate Governance Report
+123
+Securities Transactions of Directors and
+Supervisors
+Appointment
+For the change of Supervisors, please refer to the section headed "Directors, Supervisors and Senior Management
+and Removal".
+Note:
+1/1
+0/0
+Wu Xiangjiang
+Supervisor Leaving Office
+Annual Report 2023
+Use of Proceeds from Fundraising Activities During
+the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose
+stated in the prospectuses.
+management policies and procedures, capital
+management, consolidated management mechanism,
+group-wide implementation of the Five-pronged Risk
+Management Approach, measures to improve the four-
+pronged risk management approach to people, money,
+defense line and bottom line, and risk management
+requirements for "active prevention, smart control and
+comprehensive management". It regularly monitored the
+compliance of major risk indicators, and paid attention
+to and analyzed changes in regulatory policies and their
+impact on business operations of the Bank, in an effort
+to optimize or upgrade the enterprise risk management
+system. The Board of Supervisors conducted an in-depth
+survey on the risk management of local government debt
+financing and the competitiveness of sub-branches in
+counties. Particular attention was paid to exposing the
+holistic, systematic, rooted, and trend-revealing risks and
+hazards, as well as preventing and defusing material risks.
+Supervision on internal control. The Board of
+Supervisors supervised the improvement of the internal
+control system made by the Board of Directors and
+Senior Management, and performed duties in relation
+to internal control and compliance management. It paid
+close attention to a wide array of areas such as the
+construction of compliance culture across the Group, the
+adequacy and effectiveness of the internal control system,
+the soundness of policies and systems, the operation
+of the internal control mechanism, the operation of
+the supervisory inspection system, and the empowering
+role of smart internal control. The Board of Supervisors
+reviewed the annual internal control assessment report of
+the Group, focused on regulatory concerns, development
+strategies, bank-wide central work and employee behavior
+management, and strengthened guidance on internal
+audit and internal control and compliance. It advanced
+the supervision on the internal control compliance
+management in major areas and for key institutions, and
+conducted in-depth special surveys on the internal control
+and compliance management, inclusive finance business
+development and internal control management of key
+institutions, to enhance the Group's internal control and
+compliance management capacity.
+Independent Opinions of the Board of
+Supervisors on Relevant Issues
+Compliant Operation During the reporting period, the
+Board of Directors and the Senior Management of the
+Bank continued to operate in compliance with applicable
+laws and regulations, and the decision-making procedures
+complied with applicable laws and regulations and the
+Articles of Association. Members of the Board of Directors
+and the Senior Management diligently and faithfully
+performed their duties, and the Board of Supervisors did
+not find any violation of laws and regulations, or any
+circumstance that contravened the interests of the Bank in
+their performance of duties during the reporting period.
+Preparation of Annual Report Preparation and
+review procedures of the Bank's Annual Report were in
+compliance with laws, regulations and regulatory rules.
+Contents of this report reflected the actual conditions of
+the Bank truly, accurately and completely.
+Purchase and Sale of Assets During the reporting
+period, the Board of Supervisors did not find any insider
+trading or any circumstance that contravened the
+shareholders' interests or caused the loss of the Bank's
+assets in the process of the Bank's purchase or sale of
+assets.
+Environmental and Social Responsibilities
+Implementation of Resolutions Passed at the
+Shareholders' General Meeting During the reporting
+period, the Board of Supervisors had no objection to the
+reports or proposals presented by the Board of Directors to
+the Shareholders' General Meetings for consideration. The
+Board of Directors earnestly implemented the resolutions
+approved at the Shareholders' General Meetings.
+Review of the Internal Control Assessment
+Report The Board of Supervisors reviewed the 2023
+Internal Control Assessment Report of the Bank and had
+no objection to the report.
+Implementation of Information Disclosure
+Rules During the reporting period, the Bank performed
+its duty of information disclosure in compliance with the
+regulatory requirements, implemented the information
+disclosure management rules in earnest, and disclosed
+information in a timely and fair manner. Information
+disclosed was authentic, accurate and complete.
+Save as disclosed above, the Board of Supervisors had no
+objection to any other matters during the reporting period.
+134
+Annual Report 2023
+risk
+Related Party Transactions During the reporting
+period, the related party transactions of the Bank were
+conducted on normal commercial terms. The Board of
+Supervisors did not find any circumstance that infringed
+upon the interests of the Bank. The approval, voting,
+disclosure and implementation of related party transactions
+complied with applicable laws and regulations and the
+Articles of Association of the Bank.
+Report of the Board of Supervisors
+Supervision on the performance of duties. The Board
+of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance with
+the laws, regulations and the Articles of Association, on
+their implementation of decisions and plans made by the
+CPC Central Committee, on their attendance of meetings
+and expression of opinions, and on their execution of the
+resolutions reached at the Shareholders' General Meetings
+and the meetings of the Board of Directors. Focused on
+Annual Report 2023
+As at the disclosure date of the results, the composition of
+the Board of Directors of the Bank is as follows:
+Executive Directors: Mr. Liao Lin and Mr. Wang Jingwu;
+Non-executive Directors: Mr. Lu Yongzhen, Mr. Feng
+Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong
+Yang;
+Independent Non-executive Directors: Mr. Yang Siu Shun,
+Mr. Shen Si, Mr. Fred Zuliu Hu, Mr. Norman Chan Tak Lam
+and Mr. Herbert Walter.
+Industrial and Commercial Bank of China Limited
+Board of Directors
+132
+Annual Report 2023
+Report of the Board of Supervisors
+133
+Work of the Board of Supervisors
+Performance of the Board of Supervisors. In 2023,
+the Board of Supervisors held nine meetings, reviewed 17
+proposals including proposals on the 2022 work report
+of the Board of Supervisors, assessment report on the
+duty performance, and report regarding the assessment
+opinions on development strategies, heard 34 reports
+on the topics including the operation, strategy planning
+and implementation, and risk management of the Bank,
+and reviewed 35 special reports including reports on the
+quarterly supervision, special surveys conducted by the
+Board of Supervisors, and implementation of supervisory
+recommendations by the Board of Supervisors. The
+members of the Board of Supervisors diligently and
+faithfully fulfilled their duties, issued opinions in an
+objective and fair manner, and appropriately exercised
+voting rights. They attended two Shareholders' General
+Meetings, and attended nine meetings of the Board of
+Directors and 28 meetings of special committees as non-
+voting attendees. They input adequate time and efforts
+in supervisory inspections and surveys. They sent 14
+supervisory proposal letters to relevant departments, giving
+full play to the role in supervising corporate governance.
+They attached great importance to theoretical learning
+and actively participated in training and seminars, with
+an aim to continuously build up their duty performance
+ability. External supervisors worked for more than 15
+working days in the Bank, complying with the relevant
+requirements.
+ESG Governance Framework
+functioning as the key role in serving the real economy and
+the ballast stone role in maintaining financial stability, the
+Board of Supervisors made coordinated efforts to advance
+various aspects of work such as maintaining stable growth,
+adjusting structure, fostering new drivers, preventing risks
+and breaking new ground, implemented major strategic
+decisions of the state and strategies of the Bank, promoted
+operational transition to attain high-quality development,
+and stepped up financial support in the fields of inclusive
+finance, green finance, sci-tech innovation, manufacturing
+sector, and rural revitalization, in a bid to prevent and
+defuse financial risks and regulate the operation of the
+corporate governance system. The Board of Supervisors
+made special evaluations on the implementation of the
+strategic assessment and information disclosure system,
+and effectively carried out the annual performance
+assessment. The Board of Supervisors conducted in-depth
+research on supporting the rural revitalization strategy
+and enhancing the competitiveness of outlets, and
+played an active role in promoting the implementation
+of the strategies, deepening the structural adjustment,
+and improving the management efficiency and value
+contribution of outlets.
+Financial supervision.
+regularly heard the reports on the operations of the Bank
+and the auditing results of financial reports, earnestly
+reviewed periodic reports, final accounts, and profit
+distribution plan. Meanwhile, it oversaw the work done
+by the external auditor, and assessed the performance
+of duties of the auditor annually. It supervised major
+financial decisions and their implementation, conducted
+spot checks on major financial approval and accounting
+matters, and strengthened the management of expected
+credit losses and the supervision of provisioning and
+retention. It strengthened the supervision over financial
+resource allocation and financial compliance management,
+focusing on performance assessment, formulation and
+implementation of expense allocation policies, and
+implementation of internal and external supervision and
+inspection opinions. The Board of Supervisors conducted
+in-depth special surveys on financial expense management
+and centralized procurement management, promoted the
+efficiency of financial resource allocation, and reinforced
+the prevention and control of centralized procurement
+risks.
+The Board of Supervisors
+Risk supervision. The Board of Supervisors supervised
+the soundness and effectiveness of the risk management
+system. It paid close attention to a wide array of areas
+such as the risk control mechanism, risk management
+strategies, risk appetite and its transmission mechanism,
+During the reporting period, the Board of Supervisors,
+pursuant to relevant laws and regulations, regulatory
+requirements and the Articles of Association, performed
+supervision duties earnestly. It carried out supervision of
+duty performance and due diligence, financial activities,
+risk management, internal control and compliance, etc. in
+a down-to-earth way. Focusing on institutional issues and
+major risks of the whole Bank, the Board of Supervisors
+I gave play to its supervisory role in corporate governance,
+and promoted the legal, compliant operation and
+development across the Bank.
+The Board of Directors of the Bank actively performed its
+role in strategic decision-making and supervision, made
+continuous efforts to deepen ESG governance and refined
+the ESG governance framework. The Strategy Committee
+established under the Board of Directors was responsible
+for reviewing the annual social responsibility report and
+proposing suggestions to the Board of Directors. The
+Corporate Social Responsibility and Consumer Protection
+Committee under the Board of Directors was responsible
+for studying and deliberating the Bank's performance of
+social responsibility in environmental, social, governance,
+rural revitalization services and corporate culture,
+the Bank's strategies, policies and goals in consumer
+protection; strategies in green finance, development plans
+on inclusive finance business, basic management systems,
+annual operation plans for inclusive finance business,
+and measures of assessment and evaluation, and putting
+forward suggestions to the Board of Directors. The Board
+of Directors attached great importance to and continued
+to deepen the Bank's ESG governance. It actively promoted
+the Bank to improve its ESG governance framework and
+relevant governance systems and mechanisms by reviewing
+proposals, listening to reports, holding seminars and
+conducting surveys, and promoted the Bank to integrate
+environmental, social and governance requirements into its
+operation and development.
+Environmental and Social Responsibilities
+ESG and sustainable finance strategies and objectives,
+coordinating and promoting ESG and sustainable finance-
+related work of all business lines of all ICBC institutions,
+and guiding the development, operation and management
+of ESG and sustainable finance across the Bank.
+1
+activity called "Year for In-Depth Improvement of Financial
+Services for Rural Revitalization". As a result, financial
+supply for "agriculture, rural areas and farmers" was
+increased greatly, with the range covered by services
+expanding and the quality and efficiency of services
+improving continuously. The positive development
+momentum of financial services for rural revitalization was
+continuously cemented.
+The Bank increased the supply of credit in support of
+rural revitalization. Committed to "securing bottom
+lines, bolstering vitalization, and reinforcing support", it
+kept increasing credit support for a wide range of areas
+such as food security, consolidation of achievements in
+poverty alleviation, rural industry, rural construction, rural
+governance, and rise of farmers' income, formulated and
+implemented on a pilot basis the investment and financing
+policy for high-standard cropland, and devised a program
+of exclusive services for modern protected agriculture,
+continuously improving the financial supply in key areas of
+rural revitalization. As at the end of 2023, the balance of
+agriculture-related loans of the Bank exceeded RMB4.24
+trillion, representing an increase of more than RMB960.0
+billion from the beginning of the year.
+The Bank continuously shifted the focus of services
+downwards. It rolled out "Planting e Loan", a digital
+inclusive credit loan product focused on planting scenarios,
+and launched "Grain Planting Loan" for grain and oil
+producers to meet the capital needs arising from the
+planting and production processes. The Bank enriched
+financial services for new citizens by providing farmers,
+new citizens, and other groups with accessible, convenient
+and safe financial services. Besides, it developed a rural
+financial service delivery system integrated both online and
+offline, constructed inclusive financial service stations in
+rural areas, introduced the "Xingnongtong" APP of ICBC,
+and launched the "Going into the Countryside" campaign
+to provide financial services there.
+The basic framework of service, with the Urban-Rural Collaborative Development Strategy as the center and the six basic systems for
+rural financial services as the pillars, including organization management, fundamental systems, rural service delivery, entire product
+system, categorized execution, and unified service brands.
+Annual Report 2023
+"1+6" basic framework of financial services for rural
+revitalization', and continued to carry out the themed
+137
+others to increase income. Such featured service modes as
+"Bank-Guarantee Express" and "Bank-Insurance Express"
+were extensively promoted to provide "point-to-point"
+financial services for new agricultural business entities such
+as family farms and farmers' cooperatives. Meanwhile,
+the Bank facilitated intelligent rural governance relying
+on the "Digital Villages" comprehensive service platform,
+which covered all provinces nationwide and reached
+informatization cooperations with 1,244 agricultural and
+rural departments at the district and county level or above.
+The construction of the "ICBC Prosperous Agriculture"
+digital and intelligent service platform was promoted
+continuously to explore the application scenarios and
+value of new technologies such as big data, artificial
+intelligence, blockchain, and satellite-based remote sensing
+in the agricultural sector. Moreover, FinTech was used to
+optimize and innovate financial services for "agriculture,
+rural areas and farmers".
+New progress was made in the field of targeted assistance.
+Focusing on "addressing local needs, giving full play
+to finance and tapping into ICBC strengths", the Bank
+increased the supply of financial services, innovated
+in financial assistance measures, selected the best and
+allocated more assistance forces, and solidly promoted the
+high-quality completion of annual assistance tasks. The
+characteristic industries of Nanjiang gazelle, Tongjiang
+white fungus, Wanyuan black chicken and Jinyang green
+zanthoxylum maintained healthy development, and the
+key assisted enterprises achieved annual sales growth.
+The Bank carried out brand assistance projects such as
+"Candlelight Program" for the 21st consecutive year and
+"Sailing Project" for the 20th year, and commended and
+trained 400 excellent rural teachers in the four counties
+and cities throughout the year. The Bank provided
+financial support to more than 1,800 students with living
+difficulties; and steadily promoted the "ICBC Agricultural
+Talent Training Program", covering more than 127
+thousand grassroots talents in the four counties and
+cities. The Bank increased the investment in assistance,
+and supported the four counties and cities to continue
+to implement assistance projects in weak areas such as
+education, medical care and bottom-line support, to firmly
+hold the bottom line of no large-scale relapse into poverty.
+In 2023, the Bank won a host of awards in the field of
+rural revitalization, including the "Top 10 Cases in Financial
+Support for Key Counties Designated to Receive Assistance
+for Rural Revitalization" from China Banking and Insurance
+News, the "Outstanding Cases in Financial Innovation for
+Rural Revitalization" from JRJ.com, the "Case of Inclusive
+Finance for Rural Revitalization" from China Banking
+Association, and the "Excellent Practice Cases of Financial
+Services for Rural Revitalization" from China Urban-Rural
+Financial News.
+Consumer Protection
+Guided by the philosophy of "finance for the people" and
+closely combined with the diversified needs of consumers
+for financial services under the new circumstances, the
+Bank was committed to incorporating the concept of
+financial consumer protection into the whole process
+of products and services to put consumer protection
+management on a solid footing and boost the customer
+complaints governance capabilities. The Board of Directors,
+the Board of Supervisors, and the Senior Management of
+the Bank worked harder to coordinate, guide, and oversee
+the consumer protection work, with consumer protection
+better embedded in corporate governance and operation
+and management strategies. The Consumer Protection
+Committee functioned as a deliberative and coordinating
+mechanism to actively perform the consumer protection
+duties of the Bank in terms of researching, planning,
+coordination, etc., ensuring the effective implementation
+of consumer protection management objectives and
+requirements. The committee further strengthened the
+"firewall" of policy, proactively aligned itself with the
+latest regulatory requirements, and improved a series of
+systems for consumer protection management, consumer
+protection review, financial education and literacy, etc.,
+to refine the work requirements and strengthen the
+unified management of the Group in keeping with the
+times. To better play its role in appraisal and supervision,
+the committee optimized the appraisal indicators for
+consumer protection, increased the weight of appraisal,
+and oversaw and provided guidance for the Bank in
+performing efficient and in-depth consumer protection. It
+made concrete efforts to prevent risks in a more forward-
+looking manner, intensified consumer protection reviews
+on products in key segments such as personal banking,
+stepped up efforts to implement basic projects such as
+the competitiveness enhancement of outlets and the
+development of mobile banking APPS and the consumer
+protection under innovative businesses including inclusive
+finance and pension services, and made sure that
+consumer protection requirements could be fully met in
+terms of product design, policies and agreements, system
+development, marketing and publicity, etc. The committee
+established the new product (business) access control and
+post-evaluation mechanism for consumer protection, and
+embedded consumer protection requirements in the entire
+process (product design, product approval and launch,
+change and exit, etc.), so as to better safeguard the rights
+and interests of consumers. To actively get consumer
+protection thoroughly integrated with brand building
+projects and key initiatives such as rural revitalization,
+services for new citizens, and construction of an age-
+friendly society, the committee introduced a number of
+pro-people policies targeted at customers in rural areas
+and new citizens, diversified and optimized elderly-oriented
+138
+Annual Report 2023
+Environmental and Social Responsibilities
+The Senior Management of the Bank was responsible for
+ESG management. The Senior Management set up the
+ESG and Sustainable Finance Committee and made it a
+supportive decision-making body to support the Senior
+Management to coordinate, lead and advance the green
+finance and ESG work. The ESG and Sustainable Finance
+Committee was responsible for implementing the Group's
+The Bank implemented the strategic arrangements for
+building up China's strength in agriculture at a faster
+pace, focused on "addressing the country's needs, giving
+full play to finance, and tapping into strengths of ICBC",
+continued to improve the rural financial service system,
+carried out the Urban-Rural Collaborative Development
+Strategy in depth, continuously consolidated the
+Committed to "promoting green development, advocating
+green and low carbon, and building a green bank", the
+Bank actively advanced green office. During the reporting
+period, by holding paperless meetings, it saved nearly 6
+million sheets of paper.
+The domestic institutions at all levels implemented the ESG
+and sustainable development concepts in their operation
+and management activities in accordance with laws,
+regulations and regulatory requirements, and the overseas
+institutions implemented them in accordance with local
+standards and regulatory requirements.
+Green Finance
+In 2023, the Bank persistently developed green finance
+from a strategic height and constructed a green finance
+system in a profound way. Under the coordinated
+leadership of the Board of Directors, the Senior
+Management, and the Green Finance Committee, the Bank
+systematically built a green finance development model
+with ICBC's characteristics from a number of dimensions
+such as governance structure, policy systems, product
+innovation, risk management, its own performance, brand
+promotion, international cooperation, and prospective
+study. Its all-around efforts to develop green finance met
+scheduled milestones. The Bank won a string of awards
+and honors, including the "Green and Sustainable Bank
+of the Year in China" by The Asian Banker, the "Best
+Green Finance Service Bank of the Year" by the Financial
+News (China), the "Top 1 Bank in China's New Finance
+Competitiveness List (Green Finance)" by Southern Weekly,
+and the "Green Finance Service Provider of the Year 2023"
+by China Times. In 2023, ICBC saw its MSCI ESG rating
+upgraded to AA, becoming the first listed bank in China to
+reach such rating.
+Annual Report 2023
+135
+Members of the Board of Directors
+Consolidating and Building on
+Achievements in Poverty Alleviation and
+Services for Rural Revitalization
+The Bank continuously promoted the green and low-
+carbon transition of investment and financing structure.
+In terms of policy systems, centering around key areas
+of green development, the Bank, through medium and
+long-term investment and financing planning, adjusted
+its investment and financing layout with foresight.
+In investment and financing policies, it stressed the
+"green" orientation. In terms of industries, it positioned
+green industries like clean energy, clean production
+and energy conservation and environmental protection
+as key industries to extend support to, and developed
+differentiated policies. In terms of customers, it embedded
+enterprises' technology, environmental protection, energy
+consumption and other indicators into the selection
+criteria of key industry customers and projects. In terms
+of supporting mechanism, the Bank focused on key areas
+of green industries and increased weighted support in
+economic capital occupancy, authorization, pricing, scale,
+evaluation, etc. By the end of 2023, the Bank's balance of
+green loans (by the statistical standard of the NFRA) was
+nearly RMB5.4 trillion, representing an increase of nearly
+RMB1.4 trillion from the beginning of the year.
+The Bank improved environmental, social and governance
+risk control. The Bank strengthened the classification
+management for
+green investment and financing
+business, and actively prompted bond, leasing, and non-
+standard wealth management businesses to implement
+the green classification management. To exercise ESG risk
+control in a more systematic way, the Bank applied big
+data technology to the full credit process for automatic
+identification and intelligent control of risks, and supported
+the real-time collection of corporate ESG information in
+the process and the automatic risk alerts in the system.
+It promoted prospective study and risk management of
+biodiversity finance, innovatively implemented the risk
+control map system of ecological red lines, added the
+decision-making function of ecological red lines on the
+site selection of loan projects and gradually incorporated
+it into the whole-process management of credit business.
+The project results were published during the Second G20
+Sustainable Finance Working Group meeting, providing an
+innovative solution to the worldwide common problem of
+biodiversity risk management which financial institutions
+face. With climate risk incorporated into its enterprise
+risk management system, the Bank further improved
+climate risk identification and assessment approaches,
+upgraded localized calibration techniques for Network of
+Central Banks and Supervisors for Greening the Financial
+System (NGFS) stress scenarios, completed annual stress
+testing for climate risk, promoted the inclusion of climate
+factors into the management application of internal
+rating, continuously updated climate risk database, and
+strengthened climate risk management training within the
+Group during the reporting period.
+136 Annual Report 2023
+Environmental and Social Responsibilities
+The Bank expanded the influence of its green finance. It
+continued to build the green finance brand "ICBC Green
+Bank+", advocated the "harmony, integration and amity"
+concept, and provided professional, comprehensive, and
+perspective financial support for green development. ICBC
+got actively involved in global exchanges and cooperation.
+It participated in side events of the United Nations
+Biodiversity Conference, the United Nations Climate
+Change Conference, etc., to share ICBC's solutions and
+make its voice heard. The Bank took advantage of the
+Belt and Road Inter-bank Regular Cooperation Mechanism
+(BRBR) to promote the international cooperation in the Belt
+and Road green and sustainable finance, and released the
+Belt and Road Green Finance (Investment) Index.
+Green Operation
+By using the independently developed statistical system
+for carbon footprint management data, the Bank collected
+historical emission data, conducted data attribution
+analysis, continuously carried out research on carbon peak
+and carbon neutrality in its own operation, and analyzed
+its potential for energy conservation and carbon reduction,
+offering data support for the low-carbon operation for the
+next step. Third-party professional companies were hired
+to verify the collected data through on-site inventory,
+document review and other methods, thus laying a solid
+foundation for carrying out the carbon peak and carbon
+neutrality-related work continuously.
+The Bank accelerated the innovation of green finance
+products and services. Utilizing a variety of means such as
+credit, bonds, equity, leasing, and funds, it continued to
+enrich its green finance "toolbox" and built a diversified
+green finance service system. The Bank issued its first
+global multi-currency carbon-neutral overseas green bond
+and the first carbon-neutral green finance bond among
+domestic commercial banks. The Bank issued overseas
+green bonds of USD4.23 billion and domestic green
+bonds of RMB60.0 billion in 2023. In addition, it launched
+innovative ESG-themed financial products and issued a
+number of green funds invested in the fields of ecological
+protection, ESG, carbon neutrality, etc. While continuously
+expanding a comprehensive package of green finance
+services, the Bank rolled out personal carbon accounts
+in mobile banking, which supported the redemption of
+green reward points to encourage green consumption.
+It took the lead in the industry in creating the service
+modes based on OFD cloud receipts and cloud statements,
+helping corporate customers reduce carbon emissions
+through financial digitalization.
+enterprises, which consists of basic annual remuneration,
+performance-based remuneration and incentive income
+linked to term appraisal. The remuneration to other
+Senior Management members consists of basic annual
+remuneration and performance-based remuneration,
+and part of performance-based remuneration is paid in a
+deferred manner. The Bank has contributed to statutory
+retirement programs organized by Chinese governmental
+organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the
+employees of the Bank. Upon obtaining all applicable
+approvals, the Bank will implement a long-term incentive
+program. As at 31 December 2023, the Bank had not
+granted any share appreciation rights to any Director,
+Supervisor, Senior Management member, or other core
+business personnel designated by the Board of Directors.
+The Bank unveiled innovative services with ICBC's
+characteristics. It released the "Agricultural Matchmaking"
+Top 10 Model Cases in cooperation with the Ministry of
+Agriculture and Rural Affairs of China, and carried out a
+wide range of matchmaking activities to strongly support
+the integrated development of the agricultural industry.
+The "Agricultural Matchmaking • Rural Industry Leader"
+training program and new farmer
+"Partner
+program
+Bellwether Plan" were carried out to help cultivate
+entrepreneurial villagers in the new era who would lead
+Relations among Directors, Supervisors
+and Senior Management Directors,
+Supervisors and Senior Management members of the Bank
+are not related to one another with respect to finance,
+business, family, or other material relationships which are
+required to be disclosed.
+Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the
+parent company for the period.
+For details on the distribution of dividends on preference
+shares, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial
+Shareholders Preference Shares".
+Formulation and Implementation of Cash
+Dividend Policy
+The Articles of Association of the Bank explicitly stipulates
+that the Bank's profit distribution policy shall maintain
+its continuity and stability and meanwhile have regard to
+the long-term interest of the Bank, the overall interests of
+all shareholders and the sustainable development of the
+Bank. It emphasizes the priority to adopt cash dividend
+as the profit distribution method and provides that the
+Bank's adjustment to the profit distribution policy shall be
+discussed by the Board of Directors as a special proposal
+and the grounds for adjustment shall be substantiated and
+proved in detail and presented in a written substantiating
+report for Independent Non-executive Directors to issue
+their opinions, and then the report will be submitted
+to the Shareholders' General Meeting for approval as a
+special resolution.
+Annual Report 2023 129
+2.933
+104,534
+30.9
+Report of the Board of Directors
+Distributable
+of the
+Reserves Details
+distributable reserves of the Bank as at 31 December 2023
+are set out in "Note 40. to the Consolidated Financial
+Statements: Reserves" of this annual report.
+Financial Summary The summary of results,
+assets and liabilities for the five years ended 31 December
+2023 is set out in the section headed "Financial
+Highlights" of this annual report.
+Donations During the reporting period, the Group
+made external donations of RMB135.35 million equivalent.
+Debentures Issued During
+The formulation and implementation of the Bank's cash
+dividend policy accords with the provisions stipulated in
+the Articles of Association and the requirements provided
+in the resolutions of the Shareholders' General Meeting,
+the dividend distribution standards and proportion are
+clear and explicit, and the decision-making procedure
+and mechanism are complete. Moreover, Independent
+Non-executive Directors had issued their opinions for it.
+Minority shareholders can fully express their opinions and
+appeals, to completely safeguard their legitimate rights.
+2021
+2022
+3.035
+108,169
+31.3
+109,203
+31.3
+Remuneration Policy for Directors,
+Supervisors and Senior Management The
+Bank has clearly documented the remuneration policy for
+Directors, Supervisors and Senior Management members,
+and has continuously improved its performance assessment
+system and incentive restriction mechanism. From the
+perspectives of creating economic benefit, serving the
+real economy and fulfilling social responsibilities, as
+well as preventing and controlling financial risks, the
+Bank adopted a system composed of the Bank's overall
+operation and management based indicators for the
+Management and duties allocation based indicators for
+individuals. The remuneration to the Chairman of the
+Board of Directors, the President and Senior Executive
+Vice Presidents has followed the State's policies relating
+to the remuneration reform on executives of central
+Report of the Board of Directors
+Profits and Dividends Distribution
+The profit and financial status of the Bank during the
+reporting period are presented in the Auditor's Report and
+Financial Statements of this annual report.
+As approved at the Annual General Meeting for the Year
+2022 held on 29 June 2023, the Bank has distributed cash
+dividends of about RMB108,169 million, or RMB3.035 per
+ten shares (pre-tax) for the period from 1 January 2022
+to 31 December 2022 to the ordinary shareholders whose
+names appeared on the share register after the close of
+market on 14 July 2023.
+The Board of Directors of the Bank proposed distributing
+cash dividends for ordinary shares of RMB3.064 (pre-
+tax) for each ten shares of 356,406,257,089 ordinary
+shares for 2023, totaling about RMB109,203 million.
+The distribution plan will be submitted to the Annual
+General Meeting for the Year 2023 for approval. Once
+approved, the above-mentioned dividends will be paid
+to the holders of A shares and H shares whose names
+appeared on the share register of the Bank after the close
+of market on 15 July 2024. The Bank will suspend the
+registration procedures of H share ownership transfer on
+10 July 2024 (inclusive) through 15 July 2024 (inclusive).
+The holders of H shares of the Bank that desire to receive
+the proposed cash dividends but have not registered the
+ownership transfer documents are requested to hand over
+their ownership transfer documents together with the
+relevant share certificates to the Bank's H share registrar
+Computershare Hong Kong Investor Services Limited
+that is located at Rooms 1712-1716, 17 Floor, Hopewell
+Center, 183 Queen's Road East, Wanchai, Hong Kong no
+later than 4:30 p.m. on 9 July 2024. Pursuant to relevant
+regulatory requirements and operational rules, dividends
+on A shares and H shares will be paid on 16 July 2024 and
+19 August 2024, respectively.
+For dividend-related tax and tax reduction, please refer to
+the announcements on dividend distribution of the Bank.
+The Bank did not convert any capital reserve to share capital in the last three years. The table below sets out the cash
+dividend distribution of ordinary shares for the last three years:
+Item
+Dividend per ten shares (pre-tax, in RMB yuan)
+Cash dividends (pre-tax, in RMB millions)
+Percentage of cash dividends (1) (%)
+Note: (1)
+2023
+3.064
+the
+reporting
+Principal Business The principal business of
+the Bank and its subsidiaries is the provision of banking
+and related financial services. Please refer to the section
+headed "Discussion and Analysis" for the business review
+of the Bank.
+Subsidiaries Particulars of the Bank's major
+subsidiaries as at 31 December 2023 are set out in the
+sections headed "Discussion and Analysis Business
+Overview" and "Note 25. to the Consolidated Financial
+Statements: Investments in Subsidiaries" in this annual
+report.
+Competing
+Business None of the Bank's Directors held any
+interests in any business competes or competed or is or
+was likely to compete, either directly or indirectly, with the
+Bank.
+Directors' and Supervisors' Rights to
+Acquire Shares or Debentures None of
+the Bank, its subsidiaries, its controlling shareholders or
+subsidiaries of its controlling shareholders entered into
+any agreement or arrangement enabling the Directors or
+Supervisors to acquire benefits by means of the acquisition
+of shares in or debentures of the Bank or any other body
+corporate.
+Interests in Shares, Underlying Shares,
+and Debentures Held by Directors
+and Supervisors As at 31 December 2023,
+none of the Directors or Supervisors of the Bank had
+any interests or short positions in the shares, underlying
+shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and
+Futures Ordinance of Hong Kong) which have to be
+notified to the Bank and SEHK under Divisions 7 and 8 of
+Part XV of the Securities and Futures Ordinance of Hong
+Kong (including interests or short positions therein that
+they shall be deemed to have pursuant to such provisions
+of the Securities and Futures Ordinance of Hong Kong), or
+any interests or short positions which have to be recorded
+in the register under Section 352 of the Securities and
+Futures Ordinance of Hong Kong, or any interests or short
+positions which have to be notified to the Bank and SEHK
+pursuant to the Model Code for Securities Transactions by
+Directors of Listed Issuers as set out in Appendix C3 to the
+Hong Kong Listing Rules.
+Related Party (Connected) Transactions
+Directors' Interests in
+In 2023, the Bank carried out standardized management
+of the Group's related party (connected) transactions
+in strict accordance with the regulations of NFRA and
+CSRC as well as listing rules in Shanghai and Hong Kong,
+and had no related party (connected) transaction to be
+submitted to the Board of Directors or the Shareholders'
+General Meeting for review. All related party (connected)
+transactions occurred complied with the disclosure
+exemptions under the Listing Rules of the Shanghai Stock
+Exchange and the Hong Kong Listing Rules. The disclosure
+exemptions abided by the provisions of SSE for disclosure
+of related party transactions as well as the provisions
+of SEHK for reporting and announcement of connected
+transactions.
+Please refer to "Note 48. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws,
+regulations and accounting standards of China.
+Insurance
+Liability
+of Directors,
+Supervisors and Senior Management
+Members Pursuant to the Articles of Association
+of the Bank, where conditions permit, the Bank may
+establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members
+Annual Report 2023
+131
+Report of the Board of Directors
+period, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial
+Shareholders Details of Securities Issuance and Listing"
+for information on the debentures issued by the Bank.
+At the end of the reporting period, the Bank's balance of
+credit related party transactions and the balance of non-
+credit related party transactions under the rules of NFRA
+amounted to RMB900,672 million and RMB386,973
+million, respectively. The increase in the scale of related
+party transactions was mainly because the scope of
+related party identification of the Bank was expanded to
+cover all domestic and overseas subsidiaries of the Group
+after the official implementation of the Administrative
+Measures for Related-Party Transactions of Banking and
+Insurance Institutions (CBIRC Decree [2022] No. 1) since 1
+March 2023, and the number of related party transactions
+increased correspondingly.
+Directors' and Supervisors' Interests
+in Transactions, Arrangements or
+Contracts of Significance During the
+reporting period, none of the Directors or Supervisors
+of the Bank or their connected entities had any material
+interests, whether directly or indirectly, in any transaction,
+arrangement or contract of significance regarding the
+Bank's business to which the Bank, its subsidiaries, its
+controlling shareholders or subsidiaries of its controlling
+shareholders was a party. None of the Directors or
+Supervisors of the Bank have entered into any service
+contract with the Bank, which is not determinable by the
+Bank within one year without payment of compensation
+(other than statutory compensation).
+upon approval of the Shareholders' General Meeting.
+The Bank will use its own assets to compensate each
+Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the
+maximum extent permitted by laws and administrative
+regulations or within the scope not prohibited by laws and
+administrative regulations, unless the Directors, Supervisors
+and Senior Management members are otherwise proved
+to have failed to act honestly or in good faith during their
+duty performance. During the reporting period, the Bank
+purchased liability insurance for Directors, Supervisors and
+Senior Management members.
+Equity-linked Agreement The Bank had no
+equity-linked agreements required to be disclosed by the
+Hong Kong Listing Rules.
+Shares During the reporting period, neither the Bank
+nor any of its subsidiaries purchased, sold or redeemed any
+listed shares of the Bank.
+Purchase, Sale and Redemption of
+Pre-emptive Rights The Articles of Association of
+the Bank does not have any mandatory provision regarding
+pre-emptive rights. Pursuant to the Articles of Association,
+the Bank may increase its registered capital after obtaining
+approval of the Shareholders' General Meeting and of
+relevant authorities, by issuing shares through public or
+non-public offering, issuing bonus shares to the existing
+shareholders, converting capital reserve to share capital
+or using other methods as allowed by applicable laws
+and administrative regulations or approved by relevant
+authorities.
+Major Customers In 2023, the
+aggregate
+Management Contracts During the reporting
+period, the Bank did not enter into or have any contract
+regarding the management and administration of the
+whole or any important business.
+Use of Proceeds from Fundraising
+Activities
+interest income and other operating income from top five
+customers of the Bank did not exceed 30% of the interest
+income and other operating income of the Bank for the
+year.
+For future planning disclosed in the public disclosure
+documents such as previous offering prospectuses and
+fund raising prospectuses issued by the Bank which has
+continued during the reporting period, its implementation
+progress conformed to the planning as described after
+verification and analysis.
+Share Capital and Public Float
+Particulars on the share capital of the Bank for the year
+ended 31 December 2023 are set out in "Note 38. to the
+Consolidated Financial Statements: Share Capital".
+As at the latest practicable date before the disclosure date
+of the results, the Bank has maintained the minimum
+public float of 23.45%, based on the publicly available
+information and to the best knowledge of the Board of
+Directors of the Bank.
+130 Annual Report 2023
+Report of the Board of Directors
+All the funds raised from the Bank's fundraising
+activities were used for the purposes as disclosed in the
+prospectuses, namely, strengthening the capital base to
+support the ongoing business growth of the Bank.
+17.
+282
+of the Bank
+197
+of the Parent Company
+Income Tax Expense
+Profit Attributable to Equity Holders
+16.
+Statement of Financial Position and
+52.
+197
+15.
+Statement of Changes in Equity
+Dividends
+54.
+53.
+Due From Banks and Other
+275
+Approval of the Consolidated Financial
+55.
+199
+Cash and Balances with Central Banks
+198
+19.
+Comparative Figures
+198
+Earnings Per Share
+18.
+283
+Events after the Reporting Period
+283
+20.
+12.
+51.
+Operating Expenses
+11.
+238
+Commitments and Contingent Liabilities
+47.
+191
+191
+Other Operating (Expense)/Income, Net
+237
+Share Appreciation Rights Plan
+46.
+190
+Statements
+Net Gains on Financial Investments
+10.
+Fair Value of Financial Instruments
+48.
+240
+196
+Impairment Losses on Assets
+14.
+251
+Financial Risk Management
+50.
+Related Party Disclosures
+196
+13.
+246
+Segment Information
+49.
+192
+Directors' and Supervisors' Remuneration
+Five Highest Paid Individuals
+283
+Key audit matters
+199
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost
+The Group uses the expected credit loss ("ECL") model
+to calculate the loss allowance for loans and advances to
+customers measured at amortised cost in accordance with
+IFRS 9.
+As at 31 December 2023, the Group's loans and
+advances to customers measured at amortised cost was
+RMB24,841,245 million, and the related impairment
+allowance was RMB756,001 million.
+The management exercised significant judgements and
+estimation in its assessment of allowance for impairment
+losses on loans and advances to customers measured at
+amortised cost. They include the determination of staging
+of loans and advances to customers including determining
+whether the credit risk has increased significantly
+and credit impairment events have occurred; the
+determination of key parameters used in the ECL model
+including probability of default (PD), loss given default
+(LGD), exposure at default (EAD), discount rate, and
+forward-looking information for stage 1 and 2 corporate
+loans and advances, discounted bills and all personal loans
+and advances; the determination of key parameters used
+in discounted cash flow assessment in respect of stage 3
+corporate loans and advances including recoverable cash
+flows and discount rates.
+How our audit addressed the key audit matter
+Our audit procedures in respect of allowance for
+impairment losses on loans and advances to customers
+measured at amortised cost included the following:
+(1)
+Design and operating effectiveness of key internal
+controls
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls relating to approval, recording,
+monitoring and regular evaluation of internal
+credit risk ratings which are relevant inputs to
+the ECL model;
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls of the ECL model, including the
+selection, approval, and application of ECL
+model methodology, optimization of ECL
+model, underlying parameters updating and
+periodic validation, input of underlying data
+and parameters, and loan staging based on
+quality of loans and advances to customers,
+cash flow projection used in the discounted
+cash flow method, and the review and
+approval of forward-looking information;
+understood, assessed and tested the
+information technology system and design and
+operating effectiveness of the related controls,
+including general information technology
+controls, data transmission between systems,
+mapping of parameters of the ECL model, and
+system calculation of loss allowance.
+Annual Report 2023
+147
+Independent Auditor's Report
+9.
+Annual Report 2023
+148
+performed back-testing, and verified the results
+of the model using actual observable data, and
+evaluated whether there was any indication of
+management bias.
+assessed the reasonableness of the selection of
+economic indicators, the weighting of multiple
+macro-economic scenarios, and other inputs
+and assumptions used by management in the
+forward-looking adjustments; assessed the
+reasonableness of forecasted macro-economic
+and industry indicators by comparing to
+available third party information, and reviewed
+the sensitivity analysis of economic indicators;
+verified, on a sample basis, the calculation of
+ECL model, and tested whether the model
+reasonably reflected management's modelling
+methodology;
+verified, on a sample basis, the accuracy of
+ECL model data input such as loan agreement
+amount, due date, interest rate, guarantee
+method;
+Annual Report 2023
+assessed the internal credit risk rating
+benchmark used in the ECL model by reviewing
+its periodic validation and monitoring report to
+evaluate the reasonableness of the validation
+approach, completeness of the validation
+scope and accuracy of the validation, and
+selected samples to verify the accuracy of
+internal rating calculation;
+ECL model
+Refer to Note 4 (10), Note 5, Note 14, Note 23, and Note
+50(a) to the consolidated financial statements for relevant
+disclosures.
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost (continued)
+Due to the significance of allowance for impairment (2)
+losses on loans and advances to customers measured
+at amortised cost and the significant judgements and
+estimation exercised by management in estimating ECL,
+we identified this as a key audit matter.
+How our audit addressed the key audit matter
+Key audit matter
+Key audit matters (continued)
+assessed the reliability and appropriateness
+of the ECL model and the reasonableness of
+key parameters used in the model, including:
+PD, LGD, EAD, discount rate, forward-looking
+information, and evaluated the rationality of
+the key management judgements on those key
+parameters;
+146
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
+opinion on these matters.
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the Code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code"), and we have fulfilled our other ethical responsibilities
+in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
+provide a basis for our opinion.
+Financial Investments
+24.
+204
+Loans and Advances to Customers
+23.
+203
+206
+Reverse Repurchase Agreements
+284
+TO THE CONSOLIDATED FINANCIAL STATEMENTS
+200
+Derivative Financial Instruments
+21.
+UNAUDITED SUPPLEMENTARY INFORMATION
+22.
+Financial Institutions
+25.
+211
+Basis for opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
+31 December 2023, and of its consolidated financial performance and its consolidated cash flows for the year then ended
+in accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank")
+and its subsidiaries (collectively referred to as the "Group") set out on pages 155 to 283, which comprise the consolidated
+statement of financial position as at 31 December 2023, the consolidated statement of profit or loss, the consolidated
+statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
+consolidated statement of cash flows for the year then ended, and a summary of material accounting policy information
+and other explanatory information.
+Opinion
+To the Shareholders of Industrial and Commercial Bank of China Limited
+(Incorporated in the People's Republic of China with limited liability)
+德勤
+Investments in Subsidiaries
+Deloitte.
+145
+Annual Report 2023
+213
+Joint Ventures
+Investments in Associates and
+26.
+Independent Auditor's Report
+237
+Department
+45.
+Internal departments of the Head Office
+Directly managed institutions of the Head Office
+Primary reporting line
+Secondary reporting line
+Auditor's Report and
+Financial Statements
+16975.95
+4000.90
+20567.
+Contents
+Pages
+Pages
+INDEPENDENT AUDITOR'S REPORT
+146
+Organizational Chart
+27.
+214
+AUDITED FINANCIAL STATEMENTS
+28.
+Deferred Tax Assets and Liabilities
+215
+Consolidated:
+29.
+Other Assets
+217
+Statement of Profit or Loss
+155
+30.
+Impairment Allowance
+Property and Equipment
+219
+Rural Banks
+ICBC Investment
+Grassroots Branches
+(15,227)
+Overseas Branches and their
+Institutions (55)
+Overseas Subsidiaries and their
+Institutions (358)
+Institutional Banking
+Department
+Inclusive Finance
+Department (Rural
+Revitalization Office)
+Settlement & Cash
+Management
+Department
+Internet Finance
+Department
+Credit and Investment
+Management
+Department
+Credit Approval
+Department
+Human Resources
+ICBC Wealth
+Management
+Department
+Asset & Liability
+Management
+Department
+Corporate Strategy and
+Investor Relations
+Department
+International
+Banking
+Department
+Financial Technology
+Department
+Modern Finance
+Research Institute
+Inspection Office of
+the Party Committee
+Security Department
+Retired Staff Service and
+Management
+Department
+Staff Union Working
+Committee
+Investment Banking
+Department
+Special Financing
+Department
+(Banking Department)
+Pension Business
+Department
+Changchun Institute
+of Financial Managers
+Hangzhou Institute
+of Financial Managers
+Business Research &
+Development Center
+Development Center
+Domestic
+Subsidiaries and
+their Branches
+ICBC Leasing
+ICBC Credit Suisse
+Asset Management
+ICBC-AXA
+Department
+Party-related
+Affairs
+Department
+Tier-two Branches
+(459)
+Statement of Profit or Loss and
+Due to Banks and Other Financial
+163
+3.
+Application of New and
+37.
+Other Liabilities
+225
+Amendments to IFRSS
+164
+38.
+Share Capital
+227
+4.
+Summary of Material Accounting
+Basis of Preparation
+39.
+227
+Policy Information
+167
+40.
+Reserves
+232
+5.
+Significant Accounting Judgements and
+41.
+Other Comprehensive Income
+233
+Estimates
+188
+Other Equity Instruments
+31.
+2.
+Debt Securities Issued
+Other Comprehensive Income
+156
+Institutions
+220
+Statement of Financial Position
+157
+32.
+Financial Liabilities Measured at
+Statement of Changes in Equity
+159
+Fair Value through Profit or Loss
+221
+33.
+222
+Statement of Cash Flows
+Repurchase Agreements
+221
+34.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Certificates of Deposit
+221
+35.
+Due to Customers
+222
+1.
+Corporate Information
+163
+36.
+161
+42.
+(36)
+Tier-one Branches
+Please refer to "Note 48. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws
+and regulations of China and the relevant accounting
+standards.
+Material Contracts and Performance of
+Obligations thereunder
+Material Trust, Sub-contract and Lease During
+the reporting period, the Bank had not held on trust
+to a material extent or entered into any material sub-
+contract or lease arrangement in respect of assets of
+other corporations, which were subject to disclosure,
+and no other corporation had held on trust to a material
+extent or entered into any material sub-contract or lease
+arrangement in respect of the Bank's assets, which were
+subject to disclosure.
+Material Guarantees The provision of guarantees is
+in the ordinary course of business of the Bank. During
+the reporting period, the Bank did not have any material
+guarantee that needs to be disclosed except for the
+financial guarantee services within the business scope as
+approved by regulatory authorities.
+Other Material Contracts During the reporting
+period, the Bank did not have any other material contracts
+which were subject to disclosure.
+External Guarantees During the reporting
+period, the Bank did not enter any guarantee contract
+against the resolution procedures for external guarantees
+that are prescribed by laws, administrative regulations or
+CSRC.
+Occupation of Fund by Controlling
+Shareholders and Other Related
+Parties During the reporting period, none of the
+controlling shareholders and other related parties of the
+Bank occupied any fund of the Bank. The auditors have
+issued the Special Explanation on the Occupation of Fund
+by Controlling Shareholders and Other Related Parties of
+Industrial and Commercial Bank of China Limited in 2023.
+Annual Report 2023
+141
+Significant Events
+Commitments
+As at 31 December 2023, all of the continuing commitments made by the shareholders were properly fulfilled and were
+listed as follows:
+Shareholder
+During the reporting period, the Bank did not enter into
+any material related party transactions.
+Huijin
+Time and term of
+commitment
+Legal document under
+which the commitment
+Commitment
+of non-
+competition
+October 2006/
+No specific term
+November 2010/
+No specific term
+SSF
+Commitment
+of performing
+Taking effect from
+December 2019/
+Above three years
+the obligation
+of lock-up
+period for A
+shares
+is made
+Prospectus of Industrial
+and Commercial Bank of
+China Limited on Initial
+Public Offering (A Share)
+Prospectus on A Share
+Rights Issue of Industrial
+and Commercial Bank of
+China Limited
+Simplified Report of
+Changes in Equity of
+National Council for
+Social Security Fund
+Commitment
+Provided that Huijin continues to hold any share of
+the Bank or is deemed as the controlling shareholder
+of the Bank or the related party of the controlling
+shareholder of the Bank according to the laws or
+listing rules of China or the listing place of the
+Bank, Huijin will not engage in or participate in any
+competitive commercial banking business including
+but not limited to granting loans, attracting deposits
+and providing settlement, fund custody, bank card
+and money exchange services. However, Huijin
+I can engage in or participate in some competitive
+businesses by investing in other commercial banks. In
+this regard, Huijin has committed that it will: (1) fairly
+treat the investments in commercial banks and will
+not make any decision or judgment that will have
+adverse impact on the Bank or be beneficial to other
+commercial banks by taking advantage of the status
+of being a shareholder of the Bank or information
+obtained by taking advantage of the status of being
+a shareholder of the Bank; and (2) perform the
+shareholders' rights for the maximum interests of the
+Bank.
+Type of
+commitment
+According to the Notice of the State Council on
+Issuing the Implementation Plan for Transferring Part
+of State-Owned Capital to Fortify Social Security
+Funds (Guo Fa [2017] No. 49), SSF shall perform the
+obligation of more than 3-year lock-up period as of
+the date of the receipt of transferred shares.
+Material Related Party Transactions
+Implementation of Share Incentive Plan
+and Employee Stock Ownership Plan
+during the Reporting Period During the
+reporting period, the Bank did not implement any share
+incentive plan or any employee stock ownership plan.
+Assets Pledged as Security
+Environmental and Social Responsibilities
+products and services, and carried out the "Delivering
+Tangible Results for the People" campaign. In short,
+the consumer protection efforts better empowered the
+improvement and upgrading of financial services.
+The Bank effectively fulfilled its social responsibilities to
+help consumers improve their financial literacy and skills
+for fraud identification and prevention. It made great
+efforts to carry out a series of activities such as "March
+15th Consumer Protection Publicity Week", "Publicizing
+Financial Knowledge to Walk Ten Thousand Miles", and
+"Financial Education and Literacy Month". Focusing
+on key groups such as "senior citizens, young people,
+and new citizens" and highlighting critical missions of
+"carrying forward the spirit of Lei Feng", "ensuring
+fund security", "supporting consumption recovery", and
+"bringing together financial strength to create a better
+life", the Bank carried out a series of publicity activities of
+"visiting the rural, communities, campuses, enterprises,
+and business districts", which popularized the eight basic
+rights for consumers, risk identification and response
+measures, knowledge about safeguarding rights lawfully
+and rationally, and knowledge of investment and financial
+management, among others. Relying on 15.5 thousand
+ICBC Sharing Stations, the Bank organized the "Volunteer
+to Warm up the Spring, You and Me together" and
+other volunteering programs learning from Lei Feng,
+and a variety of activities themed on growth care, health
+care, and career care, providing a series of public benefit
+services for the public to meet the diversified needs of
+consumers. It made efforts to create a distinctive mode
+for digitalized publicity and innovatively used new media,
+artificial intelligence, and other diversified means, to
+carry out a host of popular activities such as consumer
+protection knowledge quizzes, Al-enabled interactions,
+scene plays, short videos, and microfilms, through which
+financial knowledge and anti-fraud techniques were
+disseminated to consumers plainly and straightforwardly,
+and the consumers are guided to learn, understand, trust
+and use finance.
+The
+Bank continuously enhanced the coverage,
+coordination, and relevance of consumer protection
+training. With a series of bank-wide training courses on
+consumer protection, customer complaints management,
+customer service and experience management, and
+management of inclusive finance consumer protection
+organized with coordinated efforts, it focused on key
+business areas such as personal banking, bank cards,
+online banking, and precious metals to continuously instill
+consumer protection standards into employees through
+activities such as policy interpretation, business operations,
+and experience sharing. The Bank prioritized increasing
+the training of frontline staff such as customer service
+managers, wealth management managers, and outlet
+heads, which combined knowledge of consumer protection
+with business scenarios, analyzed typical cases of on-site
+services (business premises), standardized marketing and
+publicity activities, and dealt with customer complaints,
+etc., so as to effectively enhance the awareness of
+consumer protection and business skills among the
+primary-level employees and key position holders, and
+implement the concepts of and requirements for consumer
+protection effectively.
+The Bank continued to strengthen customer complaints
+management, efficiently resolved the pressing difficulties
+and problems that concerned customers, and made every
+effort to build a bank satisfactory to the people, recording
+a customer satisfaction rate of 90.81% in 2023. The
+"Year for Deepening Complaint Management in Personal
+Finance" campaign was carried out, focusing on the
+businesses prone to customer complaints such as early
+repayment of personal loans, repayment negotiations
+about credit card debt, and automobile installments.
+Targeted solutions were devised to address these problems
+from the source, comprehensively improving the level
+of customer service. Meanwhile, the Bank constantly
+built up its complaints handling capacity, enhanced the
+online processing capacity of its customer service hotline
+(95588), and made the best of diverse dispute settlement
+mechanisms such as third-party mediation to resolve
+customers complaints and disputes quickly, in an effort
+to resolve conflicts and disputes as early as possible. The
+Bank quickened the transformation of and innovation
+in digital finance, promoted the intelligent governance
+mode for customer complaints, applied technologies such
+as robotics, natural language processing, and artificial
+intelligence generated content (AIGC) to the main
+sectors of complaints handling and management, and
+made monitoring and analysis activities more intelligent,
+thus achieving more remarkable results in complaints
+governance.
+In 2023, the Bank received 204.9 thousand complaints
+from individual customers', averaging at 1,323 complaints
+from individual customers every 100 outlets and 2,758
+every 10 million individual customers. By type of business,
+the complaints were concentrated in credit cards, personal
+banking, etc. Specifically, the complaints in credit cards
+were mainly about automobile installments, repayment
+negotiations, interest and fee disputes, and bank card
+application & change, while those in personal banking
+were mainly about residential mortgages, account control,
+1
+To present a more accurate picture of customer complaints, the Report has deleted repeated complaints and complaints about the
+"Card Close Action" against new-type cyber-telecom crimes in reporting the number of individual customer complaints in 2023.
+Annual Report 2023
+Key Audit Matters The Audit Committee
+has reviewed the key audit matters in the audit report
+and concluded that it is unnecessary to provide a
+supplementary explanation.
+139
+and savings deposits. By region, the complaints were
+mainly distributed in Guangdong, Hubei, Jiangsu, Hebei,
+Sichuan, etc.
+Public Welfare and Volunteer Activities
+Public welfare brand building. In order to continuously
+deepen the long-term public welfare mechanism and
+polish the Group's public welfare brand, the Bank
+continued to carry out public welfare activities with clear
+themes and diversified forms under the leadership of
+"ICBC Sight Initiative". The Bank built a good situation
+of "sharing public welfare resources and jointly building
+public welfare projects", further demonstrating the
+responsibilities as a large state-owned bank. Through the
+"Lifeline Express" hospital project, the Bank donated a
+total of RMB33.40 million to carry out free eye surgery for
+nearly 14 thousand cataract patients to help them regain
+their sight. In cooperation with the Central Committee
+of the Communist Youth League and its affiliated
+foundations, the Bank supported the construction of the
+left-behind child care stations of the "Childlike Innocence
+Harbor" program in the four counties and cities, i.e.,
+Nanjiang, Tongjiang, Wanyuan and Jinyang in Sichuan. A
+total of 150 "Childlike Innocence Harbor" stations were
+built, and the investment exceeded RMB10 million. Relying
+on the "Childlike Innocence Harbor" program, the Bank
+continued to improve the resource sharing and project co-
+building mechanism, well conducted matching of public
+welfare projects, served more than 10,000 rural left-behind
+children, and carried out more than 1,000 activities.
+Volunteer activities. During the reporting period, 125
+thousand young volunteers of the Bank participated in
+volunteer activities, raised nearly RMB1.30 million and
+served more than 1,912 thousand people. In order to
+consolidate the achievements in poverty alleviation, the
+Bank, together with the Blue Letter Rural Child Care
+Center, launched the Blue Letter Companion Program,
+starting the volunteer service tour with a monthly letter
+from young volunteers of ICBC to accompany the growth
+of rural children. In the 6th China Youth Volunteer
+Service Public Entrepreneurship Competition (National
+Competition), the program won the national gold award.
+During the reporting period, the Bank relied on 15.5
+thousand "ICBC Sharing Stations" to expand the supply
+of convenience services in an orderly manner. The Bank
+carried out more than 95 thousand care-themed activities
+such as "Volunteer Spring, You and Me", "Trio of Summer
+Care" and "ICBC Sharing Station, Golden Autumn Care".
+It benefited more than 12.00 million people, including
+new citizens, outdoor workers, students taking the senior
+high school and college entrance examinations, and the
+elderly. Meanwhile, relying on the services of "ICBC
+Sharing Station", the Bank strengthened collaboration
+with volunteer service organizations to provide volunteer
+services, charity assistance and other public welfare services
+to the society, to build a "warm home" of volunteerism,
+care and aid.
+For details of the Bank's fulfillment of social
+responsibilities, please refer to the 2023 Corporate Social
+Responsibility (ESG) Report of Industrial and Commercial
+Bank of China Limited published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX, and
+the website of the Bank.
+QR Code link of the 2023 Corporate Social Responsibility
+(ESG) Report of Industrial and Commercial Bank of China
+Limited
+140
+Annual Report 2023
+Significant Events
+Material Lawsuits or Arbitration
+Cases During the reporting period, the Bank incurred
+no material lawsuits or arbitration cases. It was involved in
+several legal lawsuits and arbitration in its ordinary course
+of business. Most of these cases were initiated by the
+Bank to recover non-performing loans, while some were
+related to disputes with clients. As at 31 December 2023,
+the amount of cases pending judgments or arbitrations
+awards in which the Bank and/or its subsidiaries are
+defendants totaled RMB6,659 million, and the Bank does
+not expect any material adverse effect from the above-
+mentioned cases on the Bank's business, financial position
+or operating results.
+Material Assets Acquisition, Sale and
+Merger During the reporting period, the Bank had no
+material assets acquisition, sale or merger.
+Credit Standing During the reporting period,
+neither the Bank nor its controlling shareholders had
+ever failed to fulfil obligations provided in effective legal
+documents issued by court for material lawsuits, nor had
+there been any outstanding debt of a significant amount.
+Environmental and Social Responsibilities
+(including Directly Managed Branches)
+Fulfillment of
+commitment
+did not do anything
+Institutional Banking
+Committee (Pension
+Finance Committee)
+Finance Committee)
+Senior Management
+Financial Market and
+Asset Management
+Committee
+Inclusive Finance and
+Rural Revitalization
+Committee
+Digital Finance
+Committee
+Consumer Protection
+Committee
+Executive Office
+Corporate
+Banking
+Risk Management
+Department
+Internal Control &
+Compliance
+Corporate Banking
+Department
+Legal Affairs
+Personal Banking
+Department
+Department (Consumer
+Protection Office)
+Finance & Accounting
+Operation
+Management
+Department
+Information
+Management
+Department
+Corporate
+Culture
+Bank Card Department
+Global Market
+Department
+Asset Management
+Department
+Business Department
+Domestic
+Branches
+Asset Custody
+Department
+ICBC Bills Discounting
+Domestic Institutions
+Overseas Institutions
+Department
+As at 31 December
+2023, Huijin strictly
+fulfilled the above
+commitment and
+Personal Banking Committee (Technology
+Supervisory Board
+Office
+in violation of the
+commitment.
+As at 31 December
+2023, SSF strictly
+fulfilled the above
+commitment and
+did not do anything
+in violation of the
+commitment.
+Disciplinary Actions During the reporting period, the Bank was not subject to any case filing investigation for
+suspected crime, nor was any of its controlling shareholders, Directors, Supervisors and Senior Management members
+subject to coercive measures for suspected crime; neither the Bank nor its controlling shareholders, Directors, Supervisors
+and Senior Management members were subject to any criminal penalty or any case filing investigation by CSRC for
+suspected illegality or irregularity or administrative penalty by CSRC or material administrative penalty by other competent
+authority; none of its controlling shareholders, Directors, Supervisors and Senior Management members was held in
+retention by the disciplinary inspection and supervision organ because of suspected serious illegality or irregularity or
+work-related crime, which affected their duty performance; none of its Directors, Supervisors and Senior Management
+members was subject to coercive measures taken by other competent authority for suspected illegality or irregularity, which
+affected their duty performance; neither the Bank nor any of its controlling shareholders, Directors, Supervisors and Senior
+Management members was subject to any administrative or regulatory measures taken by CSRC or disciplinary sanction
+imposed by stock exchanges.
+142
+Annual Report 2023
+Annual Report 2023
+143
+Board of Directors"
+Office
+Strategy
+Committee
+Board of
+Directors
+Risk Management
+Committee
+Compensation
+Committee
+Audit Committee
+Committee
+Corporate Social
+Nomination
+Committee
+Related Party
+Transactions Control
+Committee
+US Risk Committee
+Internal Audit
+Sub-bureau
+Internal Audit Bureau
+Shareholders'
+General Meeting
+Internal departments and directly managed
+institutions of the Head Office
+Asset and Liability
+Committee
+Management Committee Risk Management
+("Five Priorities"
+Committee)
+Board of
+Supervisors
+Responsibility and Consumer
+Protection Committee
+Cash and Cash Equivalents
+234
+Net Trading Income
+Net Interest Income
+189
+43.
+Interests in Structured Entities
+235
+7.
+6.
+190
+Net Fee and Commission Income
+190
+8.
+Transferred Financial Assets
+44.
+236
+Repurchase agreements
+31
+231,374
+3,369,858
+145,781
+Financial liabilities measured at fair value through profit or loss
+32
+62,859
+64,287
+Derivative financial liabilities
+21
+76,251
+96,350
+3,187,712
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+574,778
+Other liabilities
+Deferred tax liabilities
+36,094,727
+40,920,491
+3,950
+784,392
+3,930
+818,642
+37
+28
+905,953
+1,369,777
+36
+85,581
+63,322
+29,870,491
+33,521,174
+35
+Debt securities issued
+Income tax payable
+Due to customers
+375,452
+385,198
+34
+Certificates of deposit
+1,018,106
+33
+Due to banks and other financial institutions
+Due to central banks
+26
+Investments in associates and joint ventures
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
+free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion
+solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other
+person for the contents of this report.
+8,806,849
+Financial investments measured at amortised cost
+2,223,096
+2,230,862
+other comprehensive income
+Financial investments measured at fair value through
+747,474
+811,957
+64,778
+understood, assessed and tested the design and
+operating effectiveness of controls over cyber
+security management mechanism, the operational
+security of key information infrastructure, data and
+customer information management, and system
+operation monitoring and emergency management.
+•
+Our audit procedures in respect of IT systems and controls
+over financial reporting included the following:
+How our audit addressed the key audit matter
+With the rapid increase in the volume of on-line
+transactions of the Group, as well as the continuous
+development and application of new technologies and
+open banking that increased third party network access,
+the Group faces increasing challenges on cyber security
+and data protection that warrant close monitoring of their
+potential impact on financial reporting related IT systems.
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are highly
+reliant on complex IT systems and control processes,
+and the IT systems are required to serve the Group's
+global customer base, handle large volumes of frequent
+transactions, and continue their rapid development in
+response to changing business needs and technological
+advancement.
+To ensure the accuracy of financial reports, IT over
+financial reporting and its related general controls and
+automated controls are required to be designed and
+operated effectively. The related general controls include
+IT governance, controls over program development and
+changes, access to programs and data and IT operations.
+Automated controls include system calculations and data
+logic relating to significant accounts, as well as interfaces
+between business management systems and accounting
+systems.
+IT systems and controls over financial reporting
+As a large banking group, the Group's IT systems are
+complex.
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+151
+Annual Report 2023
+understood, assessed and tested the design and
+operating effectiveness of key internal controls of
+the IT systems relevant to financial reporting;
+understood, assessed and tested the design and
+operating effectiveness of automated controls
+relevant to significant accounts and assertions or risk
+of material misstatement, and such IT automated
+controls include accuracy of system calculation
+logic and consistency of data transmission, covering
+business in corporate banking, personal banking,
+and financial markets, as well as financial reporting
+process;
+TOTAL LIABILITIES
+65,790
+27
+LIABILITIES
+(restated)
+31 December 2022
+31 December 2023
+Notes
+(In RMB millions, unless otherwise stated)
+As at 31 December 2023
+Consolidated Statement of Financial Position
+157
+Annual Report 2023
+The accompanying notes form part of these consolidated financial statements.
+Property and equipment
+39,610,146
+TOTAL ASSETS
+452,223
+533,547
+29
+Other assets
+101,117
+104,669
+28
+Deferred tax assets
+293,887
+298,878
+44,697,079
+EQUITY
+354,331
+Share capital
+21,560
+7,906
+Other operating (expense)/income, net
+10
+(4,400)
+4,828
+OPERATING INCOME
+806,458
+842,352
+9
+Operating expenses
+Impairment losses on assets
+==
+(238,698)
+(239,351)
+14
+(150,816)
+(182,677)
+OPERATING PROFIT
+416,944
+11
+420,324
+Net gains on financial investments
+14,928
+1,278,674
+(750,026)
+(586,689)
+19
+6
+655,013
+691,985
+7
+137,891
+8,308
+145,818
+7
+(18,534)
+(16,493)
+NET FEE AND COMMISSION INCOME
+7
+119,357
+129,325
+Net trading income
+8
+Fee and commission expense
+Share of results of associates and joint ventures
+5,022
+4,396
+40
+40
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+Non-controlling interests
+Retained profits
+Reserves
+219,717
+219,717
+1,134,082
+Perpetual bonds
+134,614
+Preference shares
+354,331
+assessed and verified the valuation techniques used
+in the valuation of complex financial instruments
+valuation, selected samples to perform independent
+valuation and compared the results with the Group's
+valuation.
+39
+Other equity instruments
+356,407
+356,407
+38
+134,614
+1,013,624
+1,912,067
+1,771,747
+PROFIT BEFORE TAXATION
+421,966
+424,720
+Income tax expense
+15
+(56,850)
+Annual Report 2023
+158
+The accompanying notes form part of these consolidated financial statements.
+Person in charge of Finance and
+Accounting Department
+Xu Zhisheng
+Executive Director
+Wang Jingwu
+Chairman
+Liao Lin
+3,515,419
+39,610,146
+44,697,079
+19,310
+19,701
+3,776,588
+3,496,109
+3,756,887
+Equity attributable to equity holders of the parent company
+evaluated the appropriateness of the Group's
+valuation techniques, inputs and assumptions for
+level 2 and 3 financial instruments, and compared
+the observable market data with publicly available
+market data;
+7,563,132
+•
+(restated)
+2022
+2023
+Note
+(ii) Credit losses of debt instruments measured at fair value through
+other comprehensive income
+(i) Changes in fair value of debt instruments measured at fair value
+through other comprehensive income
+(b) Items that may be reclassified subsequently to profit or loss:
+(ii) Other comprehensive income recognised under the equity method
+(iii) Other
+(i) Changes in fair value of equity instruments designated as at fair
+value through other comprehensive income
+(a) Items that will not be reclassified to profit or loss:
+365,116
+Other comprehensive income (after tax, net):
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2023
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+155
+Annual Report 2023
+0.97
+0.98
+0.97
+0.98
+362,110
+Profit for the year
+362,110
+41
+1,530
+(3,557)
+1,405,039
+(5,145)
+(vi) Other
+21,276
+1,823
+(224)
+(372)
+(v) Foreign currency translation reserve
+method
+(iv) Other comprehensive income recognised under the equity
+(iii) Cash flow hedging reserve
+1,284
+117
+3,830
+205
+(24,220)
+21,104
+13
+(28)
+(25)
+(7)
+evaluated the fair value of level 1 financial
+instruments by comparing the fair value with publicly
+available market observable data;
+365,116
+Subtotal of other comprehensive income for the year
+978
+361,132
+For the year ended 31 December 2023
+Consolidated Statement of Profit or Loss
+Annual Report 2023
+154
+27 March 2024
+Certified Public Accountants
+Hong Kong
+Deloitte Touche Tohmatsu
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance
+in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
+describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when,
+in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Wu Wei Jun, David.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+(In RMB millions, unless otherwise stated)
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements
+or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
+obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease
+to continue as a going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
+Group's internal control.
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Independent Auditor's Report
+153
+Annual Report 2023
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+•
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Notes
+2023
+2022
+363,993
+The accompanying notes form part of these consolidated financial statements.
+18
+18
+00 00
+- Diluted (RMB yuan)
+- Basic (RMB yuan)
+-
+EARNINGS PER SHARE
+PROFIT FOR THE YEAR
+Non-controlling interests
+Equity holders of the parent company
+Profit for the year attributable to:
+362,110
+365,116
+PROFIT FOR THE YEAR
+(62,610)
+96
+Fee and commission income
+NET INTEREST INCOME
+Interest expense
+Interest income
+(restated)
+1,123
+19,227
+(2,927)
+How our audit addressed the key audit matter
+In determining whether the Group has control and
+therefore should consolidate a structured entity,
+management is required to consider the power it
+possesses, its exposure to variable returns, and its ability
+to use its power to affect returns. The Group is required
+to collectively consider the relevant facts and substance to
+assess whether it has control over the structured entity.
+Structured entities mainly include wealth management
+products, investment funds, trust plans, asset management
+plans and asset-backed securities in which the Group has
+interests in them through their initiation, management or
+investment.
+Consolidation of structured entities
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+149
+Annual Report 2023
+performed credit assessments on borrower's
+and guarantor's financial information,
+collateral valuation and other sources of
+repayment for the selected stage 3 corporate
+loans and advances, tested the recalculation
+of impairment allowance based on the
+recoverable cash flows and discount rates,
+and evaluated whether there was any material
+misstatement.
+analysed the borrower's financial and non-
+financial information, and other available
+information, and evaluated the reasonableness
+of management's judgement on staging,
+including whether credit risk has increased
+significantly since initial recognition and
+whether credit impairment events have
+occurred by reviewing the credit files,
+interviewing management, independently
+searching for publicly available information
+and exercising professional judgement;
+Risk based sample selection for credit review
+selected samples for credit review by focusing
+on industries that are significantly affected
+by fluctuations of economic cycle and policy
+regulations, regions with high credit risk
+exposure, and loans with other high-risk
+characteristics such as non-performing loans,
+overdue performing loans, rescheduled loans
+and borrowers with negative publicity;
+How our audit addressed the key audit matter
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost (continued)
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+Financial investments measured at fair value through
+profit or loss
+22,591,676
+10,533,702
+11,849,668
+24
+25,386,933
+We identified the consolidation of structured entities as a
+key audit matter because the amount involved is significant
+and the evaluation on whether the Group has control
+over the structured entities requires significant accounting
+judgement.
+Refer to Note 4(2), Note 5 and Note 43 to the consolidated
+financial statements for relevant disclosures.
+(4,550)
+Our audit procedures in respect of consolidation of
+structured entities included the following:
+Selected samples to perform the following audit
+procedures:
+Understood, assessed and tested the design and operating
+effectiveness of internal controls relating to the valuation
+of financial instruments, independent valuation validation,
+and valuation model validation and approval.
+Our audit procedures in respect of fair value assessment of
+financial instruments included the following:
+How our audit addressed the key audit matter
+Refer to Note 4(7), Note 5, Note 21, Note 22, Note
+23, Note 24, Note 32, Note 33 and Note 51 to the
+consolidated financial statements for relevant disclosures.
+instruments.
+We identified fair value assessment of financial instruments
+as a key audit matter because the amount involved is
+significant and the valuation requires significant judgement
+and estimation, and particularly for level 3 financial
+December 2023, the Group's financial
+assets that were measured at fair value amounted to
+RMB4,460,361 million, representing 9.98% of total
+assets; financial liabilities that were measured at fair value
+amounted to RMB370,260 million, representing 0.90%
+of total liabilities. Level 3 financial assets and liabilities
+with significant unobservable input data amounted to
+RMB160,052 million and RMB3,017 million respectively.
+The valuation of the Group's financial instruments
+measured at fair value is based on readily available market
+data or valuation models. For financial instruments without
+readily available market data such as debt securities,
+equities, over-the-counter derivative contracts and
+structured deposits, fair values are measured based on
+valuation techniques. The selection of valuation techniques
+and significant unobservable input data requires significant
+accounting judgement and estimation by management.
+As at 31
+Fair value of financial instruments
+23
+Key audit matter
+Independent Auditor's Report
+Annual Report 2023
+150
+the management's decision on the
+consolidation of structured entities through carrying
+out the above procedures.
+assessed
+analysed the scope of the Group's decision-
+making power over the structured entity, the level
+of remuneration obtained from providing asset
+management services, the risk of variable return
+borne by holding other interests in the structured
+entity and the substantive rights held by other
+participants, checked the Group's analysis on the
+magnitude and variability of variable return, and
+assessed whether the Group acts as principal or
+agent in the structured transaction;
+verified the analysis on the Group's variable
+return which includes, but is not limited to, fixed
+management fee and performance fees obtained
+through acting as asset manager, as well as the
+returns obtained from holding an interest in a
+structured entity, and providing liquidity support or
+other support;
+inspected agreements relating to the structured
+entity and understood the purpose of its set
+up; assessed the power the Group has over the
+structured entity according to the Group's rights and
+obligations under different transaction structures and
+its involvement with the structured entity;
+Selected samples to perform the following audit
+procedures:
+Understood, assessed and tested the related design and
+operating effectiveness of the internal controls relating to
+the consolidation of structured entities.
+Key audit matters (continued)
+864,122
+(3)
+1,192,532
+422
+Non-controlling interests
+356,548
+383,921
+Equity holders of the parent company
+Total comprehensive income for the year attributable to:
+357,560
+384,343
+Total comprehensive income for the year
+152
+1,012
+87,205
+Other information
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
+and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
+statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+Responsibilities of the directors for the consolidated financial statements
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for
+such internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+Auditor's responsibilities for the audit of the consolidated financial statements
+Independent Auditor's Report
+384,343
+Annual Report 2023
+The accompanying notes form part of these consolidated financial statements.
+357,560
+1,116,717
+75,339
+1,224,257
+20
+3,427,892
+4,042,293
+19
+Financial investments
+Loans and advances to customers
+Reverse repurchase agreements
+21
+222222
+Due from banks and other financial institutions
+Cash and balances with central banks
+31 December 2023 31 December 2022
+(restated)
+Notes
+ASSETS
+(In RMB millions, unless otherwise stated)
+As at 31 December 2023
+Consolidated Statement of Financial Position
+Annual Report 2023
+Derivative financial assets
+156
+(2,987)
+(3,745) 19,928
+86
+1,633
+21,954
+(1,129) 1,016,896 1,767,537 3,495,171 18,655 3,513,826
+(4,848) (3,272) 4,210 938 655 1,593
+(5,977) 1,013,624 1,771,747 3,496,109 19,310 3,515,419
+1,123 365,116
+363,993 363,993
+Profit for the year
+19,928 (701) 19,227
+Other comprehensive income
+Total comprehensive income
+Appropriation to surplus reserve (i)
+1,633
+98
+86
+(3,745) 19,928 363,993 383,921
+422 384,343
+Dividends ordinary shares 2022 final
+(Note 17)
+Distributions to other equity instrument
+holders (Note 17)
+35,872
+(17,241)
+21,954
+2,343
+Appropriation to general reserve (ii)
+354,331
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2023
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Other
+Share equity
+capital instruments
+Balance as at 31 December 2022
+356,407 354,331
+Investment currency Cash flow
+Capital Surplus General revaluation translation hedging
+reserve reserve
+148,280 392,487
+148,280 392,487 496,719
+Non-
+reserve reserve reserve
+496,719
+reserve
+Other
+reserves Subtotal profits Total interests equity
+controlling
+Total
+Consolidated Statement of Changes in Equity
+(2,987)
+Changes in accounting policies (Note 3.1)
+1,576
+Balance as at 1 January 2023
+356,407
+Retained
+64,918
+767 (17,241)
+(108,169) (108,169)
+(14,964)
+Dividends or interest paid to other equity instrument holders
+(104,534)
+(108,169)
+Dividends paid on ordinary shares
+(870,573)
+(956,689)
+Repayment of debt securities
+(25,721)
+(49,151)
+Interest paid on debt securities
+955,862
+1,422,308
+Proceeds from issuance of debt securities
+(910,621)
+(891,852)
+326,066
+10,018
+(4,415,567)
+Proceeds from sale and redemption of financial investments
+3,453,713
+3,192,493
+Investments in associates and joint ventures
+(1,372)
+(14,810)
+(3,314)
+Investment returns received
+Net cash flows from investing activities
+CASH FLOWS FROM FINANCING ACTIVITIES
+2,730
+2,811
+360,575
+Proceeds from disposal of associates and joint ventures
+Dividends paid to non-controlling shareholders
+(31)
+(28)
+1,926,851
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+Interest paid
+1,117,401
+1,040,678
+(617,791)
+2,755,732
+(451,918)
+162
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+1. CORPORATE INFORMATION
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring. On 27 October 2006, the Bank was listed on both Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited.
+The accompanying notes form part of these consolidated financial statements.
+(4,683,824)
+42
+60,847
+Cash payment for other financing activities
+(7,860)
+(4,985)
+Net cash flows from financing activities
+285,444
+Dividends to non-controlling shareholders
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+NET INCREASE IN CASH AND CASH EQUIVALENTS
+429,247
+Cash and cash equivalents at beginning of the year
+1,926,851
+1,436,757
+Effect of exchange rate changes on cash and cash equivalents
+18,287
+810,594
+The Bank obtained authorisation to carry out banking business with an institution code of No. B0001H111000001 from
+the former China Banking and Insurance Regulatory Commission (the former "CBIRC") of the PRC. The Bank obtained its
+business license with unified social credit code 91100000100003962T from the Beijing Municipal Administration for Market
+Regulation. The legal representative is Liao Lin and the registered office is located at No. 55 Fuxingmennei Avenue, Xicheng
+District, Beijing, the PRC.
+Purchases of financial investments
+(other than repossessed assets)
+Repurchase agreements
+193,643
+160,197
+Due to banks and other financial institutions
+105,849
+85,524
+Due to central banks
+(11,808)
+(714)
+Financial liabilities measured at fair value through profit or loss
+Net (decrease)/increase in operating liabilities:
+(2,747,693)
+(3,098,980)
+73,750
+(104,618)
+Other assets
+(2,511,044)
+Due from central banks
+(178,368)
+(147,741)
+Due from banks and other financial institutions
+85,731
+(17,337)
+437,224
+Financial assets measured at fair value through profit or loss
+(45,211)
+Reverse repurchase agreements
+23,917
+(100,110)
+Loans and advances to customers
+(2,898,902)
+(26,740)
+186,956
+Certificates of deposit
+2,116
+Annual Report 2023
+161
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2023
+(In RMB millions, unless otherwise stated)
+CASH FLOWS FROM INVESTING ACTIVITIES
+The accompanying notes form part of these consolidated financial statements.
+Purchases of property and equipment and other assets
+2023
+2022
+(restated)
+(31,201)
+(23,128)
+Proceeds from disposal of property and equipment and other assets
+Note
+7,527
+1,404,657
+(87,320)
+1,417,002
+62,306
+Due to customers
+Other liabilities
+3,531,968
+3,194,252
+120,166
+(88,496)
+151,385
+3,882,583
+Net cash flows from operating activities before taxation
+Income tax paid
+Net cash flows from operating activities
+1,504,322
+1,493,153
+4,336,481
+Net (increase)/decrease in operating assets:
+The Bank's stock codes of A Shares and H Shares listed on Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on The Stock Exchange
+of Hong Kong Limited and the stock code is 4620. The Bank's domestic preference shares are listed on Shanghai Stock
+Exchange and the stock codes are 360011 and 360036.
+2. BASIS OF PREPARATION
+Amendments to IAS 21: Lack of Exchangeability³
+Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements²
+Amendments to IAS 1: Non-current Liabilities with Covenants²
+Amendments to IAS 1: Classification of Liabilities as Current or Non-current²
+Amendments to IFRS 16: Lease Liability in a Sale and Leaseback²
+Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint
+Venture¹
+The Group has not applied the following amendments to IFRS that have been issued but are not yet effective:
+(2) Amendments to IFRS in issue but not yet effective
+The adoption of the other above-mentioned amendments to IFRSS has had no material impact on the financial position and
+financial performance of the Group.
+The amendments introduced a temporary exception to the requirements to recognise and disclose information about
+deferred tax assets and liabilities related to Pillar Two model rules ("Pillar Two legislation") published by the Organisation for
+Economic Co-operation and Development ("OECD"), as an exception to IAS 12. The Group apply the temporary exception
+immediately upon the issue of the amendments. In periods in which Pillar Two legislation is enacted or substantively
+enacted but not yet in effect, the amendments also requires the disclosure of qualitative and quantitative information about
+its exposure to Pillar Two legislation. To the extent information is not known or reasonably estimable, an entity shall instead
+disclose a statement to that effect and disclose information about the entity's progress in assessing its exposure. For impact
+of Pillar Two legislation on the financial statements of the Group, please refer to Note 15 to the consolidated financial
+statements.
+Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+165
+Annual Report 2023
+The adoption of the above amendments to IFRSS has had no material impact on the financial position and financial
+performance of the Group.
+The amendments mainly relate to the scope of initial recognition exemptions for deferred income tax in the International
+Accounting Standards (IAS) 12 - Income Taxes, and clarifies that the individual transaction 1) that is not arising from
+business combination; 2) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
+transaction; and 3) that the equivalent taxable temporary differences and deductible temporary differences are generated
+due to the initially recognised assets and liabilities is not applicable to the regulations on the exemptions from initially
+recognised deferred tax liabilities and deferred tax assets. With the amendments, the Group has been required to recognise
+one deferred tax asset (to the extent that taxable income is likely to be obtained to offset the deductible temporary
+difference) and one deferred tax liability for all deductible and taxable temporary differences relating to right-of-use assets
+and lease liabilities.
+39,610,146
+489
+Total liabilities
+36,095,831
+36,094,727
+(1,104)
+1
+Equity attributable to equity holders of the parent company
+Total equity
+3,496,109
+938
+3,513,826
+3,515,419
+1,593
+Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities Arising from a Single
+Transaction
+3,495,171
+Effective for annual periods beginning on or after a date to be determined.
+2
+Effective for annual periods beginning on or after 1 January 2024.
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in
+deciding who controls the entity, and the relevant activities are directed by means of contractual or other arrangements.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+In the Bank's statement of financial position, investments in subsidiaries are stated at cost less impairment losses.
+(3) Non-controlling interests
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity holders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between
+non-controlling interests and the equity holders of the Bank.
+(2) Subsidiaries
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+statement of equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss
+is recognised.
+An associate is an entity in which the Group has significant influence. A joint venture is an arrangement whereby the
+Group and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the
+arrangement. Other than those measured at fair value through profit or loss, the Group's investments in associates or joint
+ventures are accounted for using the equity method.
+Under the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less
+any impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the
+associate or joint venture. Unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture, the retained interest is not re-measured. Instead,
+the investment continues to be accounted under the equity method, and vice versa.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses.
+168
+Annual Report 2023
+(4) Associates and joint ventures
+39,609,657
+(In RMB millions, unless otherwise stated)
+167
+3 Effective for annual periods beginning on or after 1 January 2025.
+Revised IFRSS that have been issued but are not yet effective are expected to have no material impact on the financial
+position and financial performance of the Group in the foreseeable future.
+166
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
+Notes to the Consolidated Financial Statements
+(1) Functional currency and foreign currency translation
+The functional currency of the Group's domestic establishments is Renminbi ("RMB"). The overseas establishments
+determine their own functional currencies which best represent the economic environment they operate in. These financial
+statements are presented in RMB millions except when otherwise indicated.
+Foreign currency translation
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates at the dates of the
+transactions or deemed exchange rates. Monetary assets and liabilities denominated in foreign currencies are retranslated
+into the functional currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences
+arising on the settlement of monetary items or on translating monetary items at period end rates are recognised in profit
+or loss, with the exception that they are taken directly to other comprehensive income when the monetary items are
+designated as part of the hedge of the Bank's net investment in a foreign entity, and the aggregate exchange differences
+are not recognised in profit or loss until the disposal of such net investment.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as
+at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
+using the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a
+foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition
+are treated as foreign assets and liabilities of the foreign operation and translated at the deemed rates at the end of the
+reporting period. The exchange differences are recognised in profit or loss or in other comprehensive income, depending on
+the nature of non-monetary items.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. For overseas business not operating in
+a hyperinflationary economy, all items within equity except for retained profits are translated at the exchange rates ruling
+at the dates of the initial transactions. Income and expenses in the statement of profit or loss are translated using the
+exchange rates at the date of the transactions or deemed exchange rates. The exchange differences arising on the above
+translation are taken to other comprehensive income. On disposal of a foreign operation, the deferred cumulative amount
+recognised in other comprehensive income relating to that particular foreign operation is recognised in profit or loss. The
+effect of exchange rate changes on cash and cash equivalents is presented separately in the statement of cash flows.
+Annual Report 2023
+Functional currency
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate financial
+services, personal financial services, treasury operations, investment banking, asset management, trust, financial leasing,
+insurance and other financial services. Domestic establishments refer to the Head Office of the Bank, branches and
+subsidiaries established in Chinese mainland. Overseas establishments refer to branches and subsidiaries established in
+jurisdictions outside Chinese mainland.
+(71,263)
+7,634,395
+Adjustments
+2022
+2022
+(originally
+stated)
+The major effect of the above changes in accounting policies on the Group's financial items is set out below:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+164
+The associate of the Group, Standard Bank Group Limited (hereinafter referred to as the Standard Bank") has also
+adopted the New Insurance Contract Standard and the Group has restated the relevant comparative figures under the
+equity method accordingly.
+"
+The Group has implemented the New Insurance Contract Standard on 1 January 2023 and made retrospective adjustments
+to the financial statements figures for comparative periods in accordance with the transition requirements. To facilitate
+smooth transition to the New Insurance Contract Standard, the Group has reassessed the business model for managing its
+relevant financial assets, reclassified and remeasured certain financial assets and restated the financial statement line items
+for comparative periods in accordance with the requirements.
+The definition of insurance contract has been elaborated in the New Insurance Contract Standard which specified the
+combination and separation of insurance contract, introduced the concept of insurance contract group and refined the
+measurement model of insurance contract. It also made an adjustment to the principle of revenue recognition for insurance
+services and refined the measurement methods of contract service margins. The New Insurance Contract Standard outlines
+a general measurement model, which is modified for insurance contracts with direct participation features, described as the
+variable fee approach. The general measurement model is simplified if certain criteria are met by measuring the liability for
+remaining coverage using the premium allocation approach. The general measurement model uses current assumptions to
+estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It
+takes into account market interest rates and the impact of policyholders' options and guarantees.
+IFRS 17 Insurance Contracts and its amendments (hereinafter referred to as the "New Insurance Contract Standard")
+establishes the principles of recognition, measurement, presentation and disclosure of insurance contracts and replaces IFRS
+4 Insurance Contracts.
+IFRS 17 Insurance Contracts and its amendments
+Amendments to IAS 12: International Tax Reform - Pillar Two Model Rules
+Amendments to IAS 12: Deferred Tax related to Assets and Liabilities Arising from a Single Transaction
+Amendments to IAS 8: Definition of Accounting Estimates
+Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies
+(1) Statement of compliance
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") promulgated by the International Accounting Standards Board (the "IASB"), and the disclosure requirements of
+the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong
+Kong Limited.
+(2) Basis of preparation of the financial statements
+The consolidated financial statements have been prepared under the historical cost convention, except for certain financial
+instruments, and certain non-financial assets measured at fair value, as further explained in the respective accounting
+policies below.
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are disclosed in Note 5.
+Annual Report 2023
+(restated)
+163
+(In RMB millions, unless otherwise stated)
+3.
+APPLICATION OF NEW AND AMENDMENTS TO IFRSS
+(1) New and amendments to IFRSs that are mandatorily effective for the current year
+In the current year, the Group has applied, for the first time, the following new and amendments to IFRSS issued by the
+IASB which are mandatorily effective for the annual periods beginning on or after 1 January 2023 for the preparation of the
+Group's consolidated financial statements:
+IFRS 17 and its amendments: Insurance Contracts
+Notes to the Consolidated Financial Statements
+Operating income
+841,441
+842,352
+Financial investments
+10,527,292
+(restated)
+10,533,702
+6,410
+Financial investments measured at fair value through
+profit or loss
+stated)
+714,879
+32,595
+Financial investments measured at fair value through other
+comprehensive income
+2,178,018
+2,223,096
+45,078
+Financial investments measured at amortised cost
+747,474
+7,563,132
+(originally
+31 December
+2022
+911
+Profit before taxation
+422,565
+424,720
+2,155
+Net profit
+Adjustments
+361,038
+1,072
+Net profit attributable to equity holders of the parent company
+360,483
+361,132
+649
+31 December
+2022
+362,110
+358,263
+(64,789)
+(4,179)
+(14,810) (14,810)
+(104,534)
+(104,534) (104,534)
+266,821
+----------
+Other comprehensive income
+transferred to retained earnings
+Dividends to non-controlling shareholders
+Distributions to other equity instrument
+holders (Note 17)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve (ii)
+Dividends ordinary shares 2021 final
+(Note 17)
+(14,810)
+1,012 357,560
+(3,154)
+1,256
+(23,425) 20,739
+Total comprehensive income
+(4,584) 34 (4,550)
+(3,154) (4,584)
+1,256
+(23,425) 20,739
+Other comprehensive income
+1,888
+(4,584) 361,132 356,548
+35,318
+57,767
+35,318
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2023
+Consolidated Statement of Cash Flows
+Annual Report 2023
+160
+The accompanying notes form part of these consolidated financial statements.
+(ii) Includes the appropriation to general reserve made by subsidiaries in the amounts of RMB4, 196 million.
+(i) Includes the appropriation to surplus reserve made by overseas branches and subsidiaries in the amounts of RMB68 million and
+RMB907 million, respectively.
+19,310 3,515,419
+356,407 354,331 148,280 392,487 496,719 2,343 (17,241) (2,987) (5,977) 1,013,624 1,771,747 3,496,109
+Balance as at 31 December 2022
+85
+36
+1,527 (1,478) 49
+1,950
+(423)
+Other
+(319) 319
+-- (319) 31
+(28)
+84
+57,767 (57,767)
+(35,318)
+787
+18,290 3,277,146
+978 362,110
+1,165 926,375 1,620,642 3,257,755
+(3,988) (2,460) 3,561 1,101
+(2,823) 923,915 1,624,203 3,258,856
+361,132 361,132
+Profit for the year
+(4,243)
+Annual Report 2023
+The accompanying notes form part of these consolidated financial statements.
+(ii) Includes the appropriation to general reserve made by subsidiaries in the amounts of RMB654 million.
+Includes the appropriation to surplus reserve made by overseas branches and subsidiaries in the amounts of RMB112 million
+and RMB891 million, respectively.
+(i)
+356,407 354,331 148,270 428,359 561,637 24,047 (15,608) (2,901) (9,722) 1,134,082 1,912,067 3,756,887 19,701 3,776,588
+Balance as at 31 December 2023
+(10)
+(10)
+(250) 250
+(250)
+Other
+transferred to retained earnings
+Other comprehensive income
+(31)
+(31)
+(64,918)
+64,918
+35,872 (35,872)
+(14,964)
+(14,964)
+(14,964)
+(108,169)
+159
+CASH FLOWS FROM OPERATING ACTIVITIES
+Consolidated Statement of Changes in Equity
+Other
+26,087 (39,930)
+438,952
+357,169
+148,703
+356,407 354,331
+Balance as at 1 January 2022
+438,952 24,628 (39,999) (4,243)
+1,459 69
+Changes in accounting policies
+148,703 357,169
+356,407 354,331
+Balance as at 31 December 2021
+reserve reserve reserve reserve
+reserve reserve
+Restated
+Total
+reserves Subtotal profits Total interests equity
+17,503 3,275,258
+controlling
+Non-
+Retained
+Other
+Investment currency Cash flow
+General revaluation translation hedging
+Foreign
+Attributable to equity holders of the parent company
+Reserves
+Share equity Capital Surplus
+capital instruments
+For the year ended 31 December 2023
+(In RMB millions, unless otherwise stated)
+Profit before taxation
+Total assets
+150,816
+182,677
+14
+Impairment losses on assets
+3,716
+4,429
+11
+Amortisation
+30,297
+30,345
+(4,396)
+(5,022)
+Depreciation
+424,720
+421,966
+(restated)
+2022
+2023
+Notes
+Adjustments for:
+Unrealised (gains)/losses on foreign exchange
+(4,444)
+Share of results of associates and joint ventures
+Interest expense on debt securities issued
+8,870
+(4,020)
+9
+(1,548)
+(1,813)
+(2,711)
+(297,106)
+(338,267)
+(22,743)
+(23,510)
+11,583
+(1,915)
+Dividend income
+Net gains on stocktake and disposal of property and equipment and
+other assets (other than repossessed assets)
+Net (gains)/losses on changes in fair value
+Net gains on financial investments
+Accreted interest on impaired loans
+Interest income on financial investments
+28,067
+(1,695)
+40,967
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gains
+or losses existing in other comprehensive income at that time remains in other comprehensive income until the hedged
+forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or
+loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+Net investment hedges
+A net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gains or
+losses on the disposal.
+Annual Report 2023
+177
+Notes to the Consolidated Financial Statements
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement".
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of
+financial position as a "repurchase agreement". The difference between the sale and repurchase prices is treated as an
+interest expense and is amortised over the life of the agreement using the effective interest method.
+According to the policy of classification of financial assets, the reverse repurchase agreements held by the Group were
+divided into different classifications according to the entity's business model for managing the financial instruments and the
+contractual cash flow characteristics of the assets: financial assets measured at amortised cost and financial assets measured
+at FVTPL. The difference between the purchase and resale prices of reverse repurchase agreements measured at amortised
+cost is treated as an interest income and is amortised over the life of the agreement using the effective interest method.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+(15) Insurance contracts
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+Securities borrowed are not recognised in the statement of financial position, unless they are then sold to third parties, in
+which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly
+used by market participants. Inputs to valuation models are determined from observable market data wherever possible,
+including foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the
+fair values are mainly determined by quoted prices from dealers.
+When the hedged item in a fair value hedge is measured at amortised cost, any hedge adjustment to its carrying amount is
+amortised to profit or loss. The amortisation is based on a recalculated effective interest rate at the date when amortisation
+begins.
+(13) Derivatives and hedge accounting
+Identification of insurance contracts
+Derivatives
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+If the host contract included in the hybrid contract is a financial asset, the embedded derivative is no longer split from the
+main contract of the financial asset, and the hybrid financial instrument as a whole is related to the classification of the
+financial asset provision. If the host contract included in the hybrid contract is not a financial asset, when the embedded
+derivative's economic characteristics and risks are not closely related to those of the host contract, those separate
+instruments with the same terms as the embedded derivative would meet the definition of a derivative, and the hybrid
+instrument is not carried at FVTPL, derivatives embedded in other financial instruments should be split from the hybrid
+contract and treated as separate derivatives. These embedded derivatives are measured at fair value with the changes in fair
+value recognised in profit or loss.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in fair value of
+the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria
+after taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has
+been sold, terminated or exercised. If the hedged items are derecognised, the unamortised adjustment to carrying amount
+is recorded in profit or loss.
+Hedge accounting
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss.
+176
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Fair value hedges
+Fair value hedges are hedges of the Group's exposure to changes in fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVTOCI. For fair value hedges, the carrying amount of the hedged item
+not already measured at fair value is adjusted for the gain or loss attributable to the risk being hedged and is taken to profit
+or loss or other comprehensive income. The gains or losses for hedging instrument re-measured at fair value are taken to
+profit or loss or other comprehensive income.
+At the inception of a hedging relationship, the Group formally designates the hedging instruments and the hedged items,
+and documents the hedging relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash
+flows and are assessed on an on-going basis to analyse the sources of hedge ineffectiveness which are expected to affect
+the hedging relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness
+requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship
+remains the same, the Group would rebalance the hedging relationship.
+debt instruments measured at FVTOCI; and
+Presentation of allowance for ECL
+The Group identifies portfolios of insurance contracts. A portfolio comprises contracts subject to similar risks and managed
+together. The Group further divides portfolios of insurance contracts into groups of insurance contracts, which are taken as
+the unit of measurement. Insurance contracts issued less than one year apart and having similar expected profitability are
+included in the same group.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount that equals to lifetime ECL is recognised as loss allowance. Refer to Note 50(a) credit risk for
+the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount that
+equals to lifetime ECL is recognised as loss allowance. Refer to Note 50(a) credit risk for the definition of credit-impaired
+financial assets.
+(In RMB millions, unless otherwise stated)
+ECL is re-measured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises impairment gains or losses for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through allowance for impairment loss. For debt instruments that are measured at FVTOCI, the
+loss allowance is recognised in other comprehensive income, which does not decrease the carrying amount of the financial
+assets. The Group recognises loss allowance for loan commitments and financial guarantee contracts through other
+liabilities (provisions for credit commitments).
+Write-off
+The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
+prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines
+that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
+subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order
+to comply with the Group's procedures for recovery of amounts due. Subsequent recoveries of an asset that was previously
+written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.
+Stage 1: A financial instrument of which the credit risk has not significantly increased since initial recognition. The amount
+that equals to 12-month ECL is recognised as loss allowance.
+174
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(11) Modification of financial assets contracts
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the
+terms are substantially different, the Group derecognises the original financial asset and recognises a new asset under the
+revised terms. If the renegotiation or modification does not result in derecognition, but leads to changes in contractual cash
+flows, when assessing whether a significant increase in credit risk has occurred, the Group compares the risk of a default
+occurring under the revised terms as at the end of the reporting period with that as at the date of initial recognition under
+original terms.
+(12) Derecognition of financial assets and liabilities
+Derecognition of financial assets
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, amortised or impaired.
+Annual Report 2023
+Grouping of contracts
+The Group classifies financial instruments into the following three stages and provides provisions for ECL accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+Lifetime ECL is the ECL that result from all possible default events over the expected life of a financial instrument.
+If a group of insurance contracts is onerous at the date of initial recognition, or if additional loss is caused by contracts
+added to the group of onerous contracts, the Group recognizes a loss as insurance service expenses.
+Except for groups of onerous contracts, the Group reasonably determines the coverage units of contract groups for each
+accounting period of the coverage period based on the modes to provide insurance contract services and allocates the
+carrying amount of contract service margin as the insurance revenue for the current and subsequent periods.
+178
+Annual Report 2023
+loan commitments and financial guarantee contracts.
+Financial assets measured at fair value, including debt or equity instruments measured at FVTPL, equity instruments
+designated as at FVTOCI and derivative financial assets, are not subject to ECL assessment.
+12-month ECL is the portion of ECL that result from default events that are possible within the 12 months after the end of
+the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Measurement of ECL
+ECL is a probability-weighted amount of credit losses on financial instruments that is determined with the respective risks
+of default occurring as the weight. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference
+between all cash flows discounted at original interest rates and receivable in accordance with the contract and all cash
+flows that the Group expects to receive).
+The Group's method of measuring ECL of financial instruments reflects the following elements: (i) unbiased weighted
+average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money; (iii)
+reasonable and evidence-based information about past events, current conditions, and future economic forecasts that are
+available at no additional cost or effort at the end of the reporting period.
+The maximum period considered when estimating ECL is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+173
+Notes to the Consolidated Financial Statements
+Financial assets measured at amortised cost
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+(viii) the entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); or
+(vii)
+(vi) the entity is controlled or jointly controlled by a person identified in (a);
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(v)
+one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(iv)
+the entity and the Group are joint ventures of the same third party;
+(iii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of
+the other entity);
+(ii)
+the entity and the Group are members of the same group;
+(i)
+the party is an entity where any of the following conditions applies:
+(b)
+is a member of the key management personnel of the Group or of a parent of the Group;
+(iii)
+or
+99
+has significant influence over the Group; or
+(ii)
+has control or joint control over the Group;
+(i)
+the party is a person or a close member of that person's family and that person:
+(7) Financial instruments
+(a)
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+At initial recognition, financial assets and financial liabilities are measured at fair value. For financial assets and financial
+liabilities measured at fair value through profit or loss ("FVTPL"), any related directly attributable transaction costs are
+charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable
+transaction costs are included in their initial recognised value.
+Annual Report 2023 175
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Financial assets measured at FVTPL
+Subsequent measurement of financial assets
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023 171
+In assessing whether the contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding, the Group considers the contractual terms of the instrument. For the purposes of this assessment, principal is
+defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value
+of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for
+other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains
+a contractual term that could change the timing or amount of contractual cash flows such that it would not meet the above
+contractual cash flows characteristics.
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets, or both. The Group determines the business model for managing the financial assets according to the facts and
+based on the specific business objective for managing the financial assets determined by the Group's key management
+personnel.
+All financial assets not classified as measured at amortised cost or FVTOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis, and the relevant investment should meet the definition of equity instrument from the perspective of
+the issuer.
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
+the principal amount outstanding.
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+A financial asset is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
+the principal amount outstanding.
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
+FVTPL:
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+fair value through other comprehensive income ("FVTOCI"), or at FVTPL.
+Classification of financial assets
+(ii) Classification and subsequent measurement of financial assets
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+170
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market
+participants would take those characteristics into account when pricing the asset or liability at the measurement date
+(including the condition of the asset; and restrictions, if any, on the sale or use of the asset), and use valuation techniques
+that are appropriate in the circumstances and for which sufficient data and other information are available to measure fair
+value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+(i) Initial recognition and measurement of financial instruments
+A party is considered to be related to the Group if:
+The Group is exposed to insurance risk due to the issuance of insurance contracts. Insurance risk is the risk, other than
+financial risk, transferred from the holder of a contract to the issuer. The Group assesses the significance of insurance risk
+contract by contract. A contract is an insurance contract only if it transfers significant insurance risk. A contract that is
+assessed as meeting the definition of an insurance contract at the contract commencement date will not be re-assessed
+subsequently. An insurance contract shall be derecognized if the obligations under such contract are discharged due to
+fulfilment, cancellation or expiration.
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+For the financial liabilities measured at FVTPL, the gains and losses from changes in fair value of the financial liability arising
+from changes in the Group's own credit risk are included in other comprehensive income; other changes in fair value
+of the financial liabilities are recognised in profit or loss for the period. If the treatment of the impact of changes in the
+financial liabilities' own credit risk will create or enlarge the accounting mismatch in profit or loss, the Group shall recognise
+the entire gains or losses of the financial liabilities (including the amount of the impact of changes in its own credit risk)
+in profit and loss. When these liabilities are derecognised, the cumulative gains or losses previously recognised in other
+comprehensive income are reclassified from reserve to retained earnings.
+Other financial liabilities
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+(iv) Financial instruments reclassification
+The Group will reclassify all related financial assets when it changes its business model for managing financial assets, and
+the reclassification applies prospectively from the reclassification date (the first day of the first reporting period following
+the change in business model).
+(8) Trade date accounting
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that
+requires delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(9) Presentation of financial instruments
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and shall not
+be offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both of the following conditions are satisfied:
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+(10) Impairment of financial assets
+The Group recognises loss allowances for expected credit loss ("ECL") on:
+financial assets measured at amortised cost;
+the Group's contractual rights to the cash flows from the financial asset expire;
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
+of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required
+to repay.
+Securitisation
+As part of its operational activities, the Group securitises credit assets. When a securitisation of financial assets does not
+qualify for derecognition, the relevant financial assets are not derecognised, and the consideration paid by third parties are
+recorded as a financial liability; when the securitisation of financial assets partially qualifies for derecognition, the Group
+continues to recognise the transferred assets to the extent of its continuing involvement, and derecognises the remaining
+portion. The carrying amount of the transferred assets is apportioned between the derecognised portion and the retained
+portion based on their relative fair values, and the difference between the carrying amount of the derecognised portion and
+the total consideration paid for the derecognised portion is recorded in profit or loss.
+Sales of assets on condition of repurchase
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is
+sold together with an option to repurchase the financial asset at its fair value at the time of repurchase, the Group will
+derecognise the financial asset.
+(6) Related parties
+Derecognition of financial liabilities
+Annual Report 2023
+Financial asset is derecognised when one of the following conditions is met:
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+(3) the qualified hybrid contract that contains embedded derivatives.
+169
+172
+Notes to the Consolidated Financial Statements
+Annual Report 2023
+Where goodwill forms part of a CGU or group of CGUS and part of the operation within that unit is disposed of, the
+goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining
+the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative
+values of the operation disposed of and the portion of the CGU or group of CGUS retained.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill at year end date. For the purpose of impairment
+testing, goodwill arising in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or group of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and the fair value of the acquirer's previously-held equity interest in the
+acquiree over the net of the acquisition-date amounts of the identifiable assets and liabilities acquired. If the sum of this
+consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is,
+after reassessment, recognised in profit or loss as gains on bargain purchase.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date.
+Subsequent changes to the fair value of the contingent consideration that is classified as a financial asset or financial
+liability, is recognised in profit or loss. If the contingent consideration is classified as equity, it shall not be re-measured, and
+its subsequent settlement is accounted for within equity.
+If the business combination is achieved in stages, the acquirer's previously-held equity interest in the acquiree is re-
+measured to the acquisition date fair value through profit or loss.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives from host contracts of the acquiree.
+Business combinations are accounted for by applying the acquisition method. The Group can elect to apply an optional
+concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether the acquired set
+of assets is not a business. If the concentration test is met, the set of assets is determined not to be a business; otherwise,
+the Group shall then perform an assessment in accordance with the requirements of business. The consideration transferred
+is measured at acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the
+Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group
+in exchange for control of the acquiree. Any costs directly attributable to the combination are recognised in profit or loss
+when incurred.
+(5) Business combination and goodwill
+Impairment is determined by assessing the recoverable amount of the CGU or group of CGUS to which the goodwill relates.
+Where the recoverable amount of the CGU or group of CGUS is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in subsequent period.
+Debt instruments measured at FVTOCI
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+A financial liability may be designated as at FVTPL upon initial recognition if:
+(1) such designation eliminates or significantly reduces accounting mismatch;
+the Group makes management and performance evaluation on a fair value basis for a portfolio of financial liabilities
+or a portfolio of financial assets and financial liabilities, in accordance with the Group's formally documented risk
+management or investment strategy, and reports to key management personnel on that basis;
+Financial liabilities measured at FVTPL
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial
+liability) or it is designated as such on initial recognition.
+(iii) Classification and subsequent measurement of financial liabilities
+These assets are subsequently measured at fair value. Dividend income is recognised in profit or loss for the period. Other
+net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in
+other comprehensive income are reclassified to retained earnings.
+Equity instruments measured at FVTOCI
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are
+recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income
+are reclassified to profit or loss.
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+(2)
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+Dividend income
+Dividend income is recognised when the Group's right to receive payment is established, it is probable that the related
+economic benefits will flow to the Group and the related income can be reliably measured.
+(29) Employee benefits
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Short-term employee benefits
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+In addition, employees in Chinese mainland also participate in defined contribution retirement benefit plans established
+by the Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the
+employees' previous year basic salaries to the Annuity Plan. The Group pays a fixed contribution into the Annuity Plan
+and has no obligation to pay further contributions if the Annuity Plan does not hold sufficient assets to pay all employee
+benefits. The contribution is charged to profit or loss when it is incurred.
+Post-employment benefits-defined contribution plans
+Pursuant to the relevant laws and regulations of the PRC, the Group participates in a defined contribution basic pension
+insurance and unemployment insurance in the social insurance system established and managed by government
+organisations. The Group makes contributions to basic pension insurance and unemployment insurance plans based on the
+applicable benchmarks and rates stipulated by the organisations. Basic pension insurance and unemployment insurance
+contributions are recognised as liabilities with a corresponding charge to profit or loss or included in the cost of assets
+where appropriate as the related services are rendered by the employees.
+Annual Report 2023
+185
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+the Group does not provide service with an alternative use to the Group, and the Group has an enforceable
+right to payment for performance completed to date.
+Termination benefits
+All eligible employees outside Chinese mainland participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies and charge to profit or loss or
+included in the cost of assets where appropriate.
+the customer controls the service provided by the Group in the course of performance; or
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVTOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash receipts or payments through the expected life of the financial instrument, where appropriate, to the
+gross carrying amount of the financial asset, or the amortised cost of financial liability. The calculation takes into account all
+contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs
+that are directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit
+losses.
+(i) The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the due date of labour contract or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognises termination benefits in profit or loss at the earlier of:
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(26) Preference shares and perpetual bonds
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+liabilities or equity instruments based on their contractual terms and their economic substance after considering the
+definition of financial liabilities and equity instruments.
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instrument's duration is treated as
+profit appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms,
+the redeemed amount is charged to equity.
+(27) Cash and cash equivalents
+Cash and cash equivalents refer to monetary assets, which are short-term, highly liquid, readily convertible into known
+amounts of cash and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash,
+unrestricted balances with central banks, amounts due from banks and other financial institutions and reverse repurchase
+agreements with original maturity of less than three months.
+(28) Revenue recognition
+Interest income
+Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets and is
+recognised as interest income, except for:
+(i)
+(ii)
+purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial recognition,
+by applying the credit adjusted effective interest rate to their amortised cost; and
+purchased or originated financial assets that are not credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets quality improve so that they are no
+longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after
+the application of the above-mentioned rules, then the interest income is calculated by applying the effective interest
+rate to their gross carrying amount.
+184
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be
+entitled in exchange for transferring promised services to customers, and income is recognised when its performance
+obligation in contracts is satisfied.
+the customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+when the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination
+plan or a curtailment proposal;
+Annual Report 2023
+Early retirement benefits
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and
+no longer at the discretion of the Bank. A dividend for the year that is approved after the end of the reporting period is
+disclosed as an event after the reporting period.
+(25) Contingent liabilities
+187
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+5.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+In the process of applying the Group's accounting policies, management is required to make judgements, estimates and
+assumptions of the effects of uncertain future events on the financial statements. The most significant use of judgements,
+estimates and assumptions concerning the uncertainty of the future at the end of the reporting period that have a
+significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
+year are described below.
+(31) Dividends
+Measurement of the ECL allowance
+Income tax
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax provisions
+accordingly. In addition, deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
+available against which the deductible temporary differences can be utilised. This requires significant judgement on the tax
+treatments of certain transactions and also significant assessment on the probability that adequate future taxable profits will
+be available for the deferred tax assets to be recovered.
+Fair value of financial instruments
+If the market for a financial instrument is not active, the Group determines the fair value by using valuation technique,
+including using recent arm's length market transactions between knowledgeable and willing parties, if available, reference
+to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option
+pricing models. Valuation technique makes maximum use of observable market input. However, where observable market
+inputs are not available, management makes estimates on such unobservable market inputs.
+Determination of control over investees
+Management applies its judgement to determine whether the control indicators set out in Note 4(2) indicate that the Group
+controls securitisation vehicles, wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities.
+188
+Annual Report 2023
+The measurement of the ECL allowance for financial assets measured at amortised cost and FVTOCI, and with exposure
+arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex models and
+significant assumptions about future economic conditions and credit behaviour (the likelihood of customers defaulting and
+the resulting losses). Refer to Note 50(a) credit risk for the explanation of the inputs, assumptions and estimation techniques
+used in measuring ECL.
+Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
+against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
+The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that
+it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be
+utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be reversed
+accordingly.
+Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when
+the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
+enacted by the end of the reporting period, and reflect the corresponding tax effect.
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss.
+(30) Income tax
+Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except that it
+relates to items recognised directly in equity, in which case it is recognised in equity.
+Current tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
+from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
+or substantively enacted by the end of each reporting period.
+Deferred tax
+Deferred tax is provided using the balance sheet liability method on temporary differences at the end of the reporting
+period between the tax bases of assets and liabilities and their carrying amounts.
+Deferred tax liabilities are recognised for all taxable temporary differences, except:
+(i)
+where the taxable temporary difference arises from the initial recognition of goodwill;
+(ii)
+where the taxable temporary difference arises from the initial recognition of assets and liabilities in a transaction that
+is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
+income (or deductible expenses), and such transaction does not give rise to equivalent taxable temporary differences
+and deductible temporary differences.
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax liabilities are recognised except where the timing of the reversal of the temporary differences can be controlled
+and it is probable that the temporary differences will not be reversed in the foreseeable future.
+186 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
+tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
+differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except that deferred
+tax assets are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a
+transaction and that:
+(i)
+transaction is not a business combination;
+(ii) at the time of the transaction, it affects neither the accounting profit nor taxable income (or deductible expenses);
+(iii) such transaction does not give rise to equivalent taxable temporary differences and deductible temporary differences.
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax assets are recognised only to the extent that it is probable that the temporary differences will be reversed in
+the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
+when the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+(In RMB millions, unless otherwise stated)
+Properties and buildings
+Annual Report 2023 183
+A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a
+corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not
+included in the measurement of the lease liability are charged to profit or loss or included in the cost of assets where
+appropriate as incurred.
+Under the following circumstances after the commencement date, the Group re-measures lease liabilities based on the
+present value of revised lease payments:
+there is a change in the amounts expected to be payable under a residual value guarantee;
+there is a change in future lease payments resulting from a change in an index or a rate used to determine those
+payments;
+there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option,
+or there is a change in the exercise of the extension or termination option.
+When the lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use
+asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
+The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term
+of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases
+in profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
+180
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate if the interest rate
+implicit in the lease is not readily determinable. Each institution of the Group uses an interest rate that a lessee would have
+to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to
+the right-of-use asset in a similar economic environment as the incremental borrowing rate.
+Annual Report 2023
+The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified
+as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset
+irrespective of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance
+lease.
+When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset
+arising from the head lease, not with reference to the underlying asset. If the head lease is a short-term lease to which the
+Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
+Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the
+finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease.
+The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value
+of the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the
+lease.
+The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return.
+The impairment and derecognition of the finance lease receivable are recognised in accordance with the accounting policy
+in Notes 4(10) and 4(12). Variable lease payments not included in the measurement of net investment in the lease are
+recognised as income as they are earned.
+Lease receipts from operating leases is recognised as income using the straight-line method over the lease term. The initial
+direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss
+over the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are
+recognised as income as they are earned.
+(17) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments and the amount initially recognised less the cumulative amount of income. Any increase in the liability relating
+to a financial guarantee is taken to the statement of profit or loss.
+(18) Fiduciary activities
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+When the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase
+option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying
+asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful
+life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in
+accordance with the accounting policy described in Note 4(23).
+As a lessee
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Recognition and measurement of insurance contracts
+On initial recognition, the Group measures a group of insurance contracts at the total of the fulfilment cash flows and
+the contractual service margin, and recognises an insurance contract liability. Contractual service margin represents the
+unearned profit the Group will recognise as it provides services under insurance contracts in the future. The fulfilment
+cash flows comprise estimates of future cash flows directly attributable to fulfilling insurance contracts, an adjustment to
+reflect the time value of money and the financial risks and a risk adjustment for non-financial risk. An Group's own non-
+performance risk is not taken into account in estimating the fulfilment cash flows. Risk adjustment for non-financial risk
+represents the compensation the Group requires for bearing the uncertainty about the amount and timing of future cash
+flows that arises from non-financial risk as the entity fulfils insurance contracts.
+The Group measures insurance contracts with the general model, applying the variable fee approach or premium allocation
+approach, and subsequently measures the insurance contract liabilities at the end of the reporting period at the sum of the
+liability for remaining coverage and the liability for incurred claims. The Group recognises the reduction in the liability for
+remaining coverage because of services provided in the period as insurance revenue. The Group recognises the increase
+in the liability for incurred claims because of claims and expenses incurred in the period and any subsequent changes in
+fulfilment cash flows relating to incurred claims and incurred expenses as insurance service expenses. The Group allocates
+insurance acquisition cash flows to each accounting period of the coverage period as insurance revenue and recognises the
+same amount as insurance service expenses.
+The Group recognises the change in the liability for remaining coverage and the liability for incurred claims because of the
+effect of the time value of money and the effect of financial risk as financial changes of insurance contracts. The Group
+elects to disaggregate financial changes of insurance contracts and include such changes in insurance finance income or
+expenses for the period and other comprehensive income.
+(16) Leases
+A lease is when the lessor conveys the right to control the use of an asset for a period of time in exchange for the
+consideration of the lessee.
+At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
+if the contract conveys the right to control the use of one or more identified assets for a period of time in exchange for
+consideration.
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before
+the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to
+dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the
+condition required by the terms and conditions of the lease.
+To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
+the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the
+period of use;
+the lessee has the right to direct the use of the asset.
+For a contract that contains more than one separate lease component, the lessee and the lessor separate lease components
+and account for each lease component as a lease separately. For a contract that contains lease and non-lease components,
+the lessee and the lessor separate lease components from non-lease components. However, for the leases in which the
+Group is a lessee, the Group has elected not to separate lease components from non-lease components and accounts for
+the lease and non-lease components as a single lease component.
+Annual Report 2023
+179
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(i)
+the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly in a
+contract and should be physically distinct, or a capacity portion or other portion of an asset that is not physically
+distinct but represents substantially all of the capacity of the asset and thereby provides the customer with the
+right to obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive
+substitution right throughout the period of use, then the asset is not identified;
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and
+regulations. The assets under custody are not recorded on the statement of financial position as the Group merely fulfils the
+responsibility as trustee and charges fees in accordance with these agreements without retaining any risks or rewards of the
+assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+Annual Report 2023 181
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from
+its use or disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net
+disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss in the year the asset is
+derecognised.
+182
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(21) Land use rights
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") during the Group's restructuring or the consideration paid. The rights are amortised using the straight-
+line method over the periods of the leases. When the prepaid land lease payments cannot be allocated reliably between
+the land and buildings elements, the entire lease payments are included in the costs of properties and buildings as finance
+leases in property and equipment.
+(22) Repossessed assets
+For an impaired fixed asset, the depreciation is calculated based on the carrying value less the cumulative impairment loss.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+Repossessed assets are initially recognised at fair value of assets not retained plus related costs, and are subsequently
+measured at the lower of the carrying value and net recoverable amount. If the recoverable amount is lower than the
+carrying value of the repossessed assets, the assets are written down to the recoverable amount.
+The Group assesses at the end of each reporting period whether there is any indication that property and equipment,
+land use rights, right-of-use assets, associates and joint ventures and other non-financial assets may be impaired. If any
+such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the
+asset belongs. Where the gross carrying amount of an asset exceeds its recoverable amount, the asset is considered to be
+impaired and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash
+flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the
+time value of money and the risks specific to the asset.
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation or amortisation, had no impairment loss been recognised for the
+asset in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation or amortisation
+charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic
+basis over its remaining useful life.
+(24) Provisions
+Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that an
+outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
+made on the amount of the obligation.
+A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation.
+When the effect of the time value of money is material, the best estimate is determined by discounting the related future
+cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency such as
+risks, uncertainties and time value of money. Where there is a range of possible outcome, and each possible outcome in
+that range is as likely as any other, the best estimate is the mid-point of that range. In other cases, the best estimate is
+determined according to the following circumstances:
+where the contingency involves a single item, the best estimate is the most likely outcome;
+where the contingency involves a large population of items, the best estimate is determined by weighting all possible
+outcomes by their associated probabilities.
+The Group reviews the carrying amount of a provision at the end of reporting period. The carrying amount is adjusted to
+the current best estimate.
+(23) Non-financial asset impairment
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The
+estimated useful lives and depreciation methods are determined according to the conditions of individual aircraft and vessel.
+The estimated residual values are assessed by an independent appraiser based on historical data. The estimated useful lives
+range from 15 to 25 years.
+The shorter of the economic
+useful lives and remaining lease terms
+14.29% -50%
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(19) Precious metals
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited is
+also recognised. The precious metals deposited with the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(20) Property and equipment
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value rate and the
+annual depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Annual
+Estimated
+useful life
+5 - 50 years
+Estimated residual
+value rate
+0% - 3%
+depreciation rate
+1.94% -20%
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+2-7 years
+Notes to the Consolidated Financial Statements
+(ii) As a lessor
+900,063
+Other deposits
+4,058,487
+Due to banks and other
+1.89
+589,688
+31,141,446
+Deposits
+Liabilities
+37,946,913
+42,409,884
+Total assets
+assets
+(682,871)
+(776,831)
+Allowance for impairment losses on
+2,549,781
+2,510,696
+Non-interest-generating assets
+3.54
+1,278,674
+36,080,003
+3.45
+8.87
+1,405,039
+8.45
+16.77
+Common equity tier 1 capital adequacy
+13.72
+14.04
+14.04
+13.31
+13.18
+13.20
+ratio (10)
+Tier 1 capital adequacy ratio (10)
+15.17
+15.64
+15.64
+14.94
+14.28
+14.27
+Capital adequacy ratio (10)
+19.10
+19.26
+19.26
+18.02
+16.88
+Total equity to total assets ratio
+Capital adequacy (%)
+40,676,019
+institutions (3)
+25,006,605
+Loans and advances to customers
+Investment
+Assets
+(%)
+expense
+balance
+(%)
+expense
+balance
+Item
+yield/cost
+income/
+Average
+yield/cost
+income/
+Average
+Average
+Interest
+Average
+Interest
+2022
+951,845
+Total interest-generating assets
+3.81
+8.88
+1.93
+36,080
+1,867,047
+2.81
+61,112
+2,172,554
+Due from banks and other financial
+1.52
+45,425
+2,991,645
+1.67
+53,815
+3,230,841
+Due from central banks(2)
+3.31
+297,106
+8,975,046
+3.30
+338,267
+10,266,019
+4.05
+22,246,265
+2.86
+2.85
+2.92
+2020
+2019
+Profitability (%)
+Return on average total assets (1)
+0.87
+0.97
+0.97
+1.02
+1.00
+1.08
+Return on weighted average equity(2)
+10.66
+11.43
+11.45
+12.15
+11.95
+13.05
+Net interest spread (3)
+1.41
+1.73
+1.72
+2021
+1.92
+Original Restated
+2022
+A1
+A
+A
+A
+A1
+A1
+A1
+Notes:
+(1)
+(2)
+Since 1 January 2023, the Group has implemented IFRS 17 - Insurance Contracts. In accordance with the IFRS requirements,
+the Group made retroactive adjustments to relevant data and indicators for the comparable periods in 2022. According to
+the accounting requirements of the Interim Measures for the Administration of the Gold Leasing Business issued by PBC, the
+Group has made adjustments to the presentation of the interbank gold leasing business since 2023 and adjusted relevant
+data for the comparable periods in 2022 accordingly.
+Calculated by adding allowance for impairment losses on loans and advances to customers measured at amortised cost with
+allowance for impairment losses on loans and advances to customers measured at fair value through other comprehensive
+income.
+(3)
+Calculated in accordance with the Capital Regulation (Provisional).
+(4)
+(5)
+Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity
+instruments at the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+The rating results are in the form of "long-term foreign currency deposits rating".
+10
+Annual Report 2023
+Financial Indicators
+Financial Highlights
+2023
+1.97
+2.12
+Net interest margin (4)
+24.76
+25.79
+Asset quality (%)
+Non-performing loans ("NPLs") ratio (7)
+1.36
+1.38
+1.38
+1.42
+1.58
+1.43
+Allowance to NPLs (8)
+213.97
+209.47
+209.47
+205.84
+180.68
+199.32
+Allowance to total loans ratio (9)
+2.90
+2.90
+2.90
+26.36
+27.22
+27.43
+28.28
+1.61
+1.92
+1.92
+2.11
+2.15
+2.30
+Return on risk-weighted assets(5)
+1.56
+1.64
+1.65
+2023
+1.68
+1.75
+Ratio of net fee and commission income
+14.80
+15.36
+15.35
+15.45
+16.40
+16.83
+to operating income
+Cost-to-income ratio (6)
+1.64
+A1
+In RMB millions, except for percentages
+In 2023, net interest income was RMB655,013 million, RMB36,972 million or 5.3% lower than that of last year, accounting
+for 81.2% of the Bank's operating income. Interest income grew by RMB126,365 million or 9.9% to RMB1,405,039 million
+and interest expenses increased by RMB163,337 million or 27.8% to RMB750,026 million. Affected by factors such as
+reduction in the LPR and changes in the structure of deposit maturities, net interest spread and net interest margin ("NIM")
+declined to 1.41% and 1.61% respectively, both down 31 basis points from the previous year.
+The highlights of growth driver are that the new quality productive forces of ICBC rapidly formed, and the digital growth
+driver was running at full throttle. Determined to deepen reforms, ICBC maintained continuous increase in technological
+input and accelerated the construction of D-ICBC. ICBC consolidated its basis of technology, took the lead in building a
+hundreds of billion-level Al model technology system, and was certified as the highest level in the Financial Digital Capability
+Maturity (FDCM). ICBC iteratively upgraded its Mobile Banking, Open Banking and other platforms, to enabling enterprise
+to serve new urban residents and county-based rural customers. The number of monthly active mobile banking customers
+reached 229 million, maintaining the leading position among peers. The services for financial infrastructure such as payment
+settlement and pension custody were improved, driving the steady growth of non-interest income. We profoundly realized
+that, facing the new round of scientific and technological revolution and industrial transformation, we must master more
+key core technologies, and accelerate digital transformation, in a bid to empower the present and win the future.
+Chairman's Statement
+13
+Annual Report 2023
+"Five-pronged Risk Management Approach" refers to the overall risk management system of Head Office and branches, domestic and
+overseas institutions, on- and off-balance sheet businesses, commercial banking and investment banking subordinated institutions.
+1
+Mutual promotion of foundation and growth drivers. The highlights of foundation are that we stepped up the
+establishment of the customer system where "large, medium, small and micro enterprises and personal customers" were
+well coordinated and developed, and ecologically cemented the high-quality development. The Bank, with the people's
+aspiration for a better life in mind, innovated its products, built the "ICBC Aixiangban" service brand, set up 15.5 thousand
+"ICBC Sharing Stations", and served Chengdu FISU World University Games and the Asian Games Hangzhou, to polish our
+brand image of "By Your Side and As Your Trust". The Bank dynamically upgraded the "GBC+" projects. The number of
+personal customers increased by nearly 20.00 million, and ICBC was the first one to have its corporate customers exceeding
+12.00 million. The increment of domestic RMB deposits reached a new height, while rate of interest payment remained
+stable with a slight decline. Moreover, funds, assets and capital become more balanced.
+An effective coordination between development and safety. Adhering to a holistic approach to national security, the
+Bank proactively adapted to stricter regulations trend, persisted on "active prevention, smart control and comprehensive
+management" and enhanced the prevention, mitigation, and management of various types of risks, so as to maintain
+the robust banking feature. We continued to refine the "Five-pronged Risk Management Approach"¹, optimized the risk
+officer system, added new credit approval rules and promoted internal audit mechanism reform, to strengthen the bonding
+force of the three lines of defense. We continuously advanced asset quality improvement, and maintained negative price
+scissors for 15 consecutive quarters. We also strengthened risk control in key areas, pushed forward "Three Major Projects"
+and supported the real estate industry to explore new development models. We improved the compliance management
+system, enhanced the smart risk control level, strengthened management of product risks, information technology, and
+cyber security. We are more convinced that security is the prerequisite for development and only through development can
+security be ensured. We must distinguish rights and responsibility as well as speed and stability, and stick to the risk and
+safety bottom lines, so as to firmly grasp the initiative of work.
+Integration and interaction of real economy and finance. The Bank actively utilized cross- and counter-cyclical
+adjustment policies, focused on primary responsibilities and core businesses, and optimized financial supply. Throughout the
+year, loans and bond investments increased by RMB2.88 trillion and RMB1.29 trillion, up by 12.4% and 12.9%, respectively,
+which strongly supported the economic recovery while ensuring ICBC's own stable growth of assets and interest income.
+We established and improved the work promotion mechanism and service system regarding "Five Priorities" of technology
+finance, green finance, inclusive finance, pension finance and digital finance, and strengthened high-quality financial
+services concerning major strategies and in key areas and weak aspects. The growth rate of loans to manufacturing, sci-
+tech innovation, green industries, inclusive service, rural revitalization, personal consumption, etc. was higher than the
+average, the number of private enterprises with outstanding loans rose rapidly, and the incremental proportion on retail
+and inclusive loans increased persistently. The number of overseas RMB clearing banks rose to 11, enhancing our abilities in
+serving high-level opening-up and jointly building the Belt and Road Initiative. Thus, we gained a deeper understanding that
+the real economy is the "root" or the foundation while finance is the "vein". Therefore, a bank must adhere to the original
+aspiration and constantly make financial services more adaptable, competitive and inclusive to steadily go further.
+In 2023, ICBC's balance sheet became much cleaner and healthier, and income statement became more balanced and
+sustainable. Its core indicators of being "Strong, Excellent and Large" were expected to maintain the leading position
+among global peers or rank among the forefront, which fully demonstrated a balance in value creation, market position,
+risk control and capital constraint and showcased the Bank's strong development resilience.
+In 2023, the Bank achieved effective improvement in development quality. The Bank's ROA, ROE, and cost-to-income ratio
+were 0.87%, 10.66% and 28.28%, respectively, all at a relatively good level. The Bank achieved proper growth in quantity.
+Net profit rose to RMB365.1 billion, and assets, deposits and loans all increased by more than 10%, achieving a record
+high. The Bank achieved precise risk prevention and control. NPL ratio decreased by 2BP to 1.36%, allowance to NPLs
+climbed to 213.97%, and capital adequacy ratio reached 19.10%, maintaining a relatively high level.
+2023 marks the opening of fully implementing the guiding principles of the 20th National Congress of the Communist Party
+of China ("CPC" or the "Party"). ICBC adhered to Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, earnestly studied and implemented the guiding principles of the 20th CPC National Congress and the Central Financial
+Work Conference. Taking the 40th anniversary of the establishment of ICBC as the impetus, we coordinated our efforts
+in maintaining stable growth, adjusting the structure, fostering new drivers, preventing risks, and breaking new ground.
+In serving China's modernization, we have achieved to promote ICBC's high-quality development by sticking to seeking
+progress while maintaining stability, enhancing stability through progress, and promoting quality amid stability.
+Chairman's Statement
+Annual Report 2023
+12
+Chairman Liao Lin
+Chairman's Statement
+11
+Annual Report 2023
+432,146 (437,894)
+203,186
+In the past year, we adhered to the guidance of the Party building theory and exercising rigorous corporate
+governance. We carried out thematic education and united the whole Bank under the guidance of the Xi Jinping
+Thought on Socialism with Chinese Characteristics for a New Era. We remain committed to "Two Affirmations" and "Two
+Upholds" implemented them to the letter. We earnestly rectified problems discovered during central inspections, audits,
+and supervisions, resolutely fought corruption, and unceasingly conducted full and rigorous Party self-governance to forge
+a clean ICBC. We pushed forward the organic integration between the Party's leadership and corporate governance.
+The newly revised Articles of Association has been approved by the regulatory authority and come into effect, and the
+governance system of a modern financial enterprises with Chinese characteristics continued to be improved.
+1,207,219
+In February 2024, due to his age, Mr. Chen Siqing resigned from his positions as Chairman of the Board of Directors,
+Executive Director, and Chairman and Member of the Strategy Committee of the Board of Directors. During his tenure, Mr.
+Chen Siqing fulfilled his duties diligently and conscientiously and made outstanding contributions to the development of the
+Bank. On behalf of the Board of Directors, I would like to hereby express heartfelt gratitude to Mr. Chen Siqing! Gratitude
+also goes to directors leaving office since last year! We also warmly welcome our new directors!
+Spring is a time when we look ahead to all the possibilities. The year 2024 marks the 75th anniversary of the founding
+of the People's Republic of China, is a pivotal year for achieving the goals and tasks in the 14th Five-Year Plan, and also the
+first year for ICBC to hit the road again. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, ICBC will act on the general working principle of pursuing progress while ensuring stability, promoting stability through
+progress, and establishing the new before abolishing the old, and fully and faithfully apply the new development philosophy
+on all fronts. ICBC will uphold the goal of building a financial power, stick to the political and people-oriented nature of
+financial work, deepen the implementation of the "Four Strategies", advance our work centering on "layout modernization,
+smart risk control, digital growth drivers, diversified structure, and ecological foundation", cultivate and carry forward
+financial culture with Chinese characteristics, and play the key role in serving the real economy and the ballast stone role in
+maintaining financial stability, so as to make greater contributions to building China into a great modern socialist country
+and advancing the great rejuvenation of the Chinese nation.
+Annual Report 2023
+16
+In 2023, the Bank focused on the central task of serving
+Chinese modernization, the primary task of pursuing high-
+quality development, and the strategic task of building a
+new development pattern. Coordinated steps were taken
+to "maintain stable growth, adjust structure, foster new
+drivers, prevent risks and break new ground". In addition,
+it introduced targeted and effective measures to serve
+the real economy, keep all kinds of risks under control,
+and enhance the ability of balanced, coordinated and
+sustainable development. The Bank was ranked the 1st
+place among the Top 1000 World Banks by The Banker
+for the eleventh consecutive year, and the 1st place in the
+list of commercial banks of the Global 500 in Fortune
+for the eleventh consecutive year, and took the 1st place
+among the Top 500 Banking Brands of Brand Finance for
+the eighth consecutive year, steadily enhancing ICBC's
+international influence.
+Total assets of commercial banks grew steadily, with stable
+credit asset quality and sufficient risk offsetting capacity
+on the whole. At the end of 2023, the RMB and foreign-
+currency assets of commercial banks totaled RMB354.85
+trillion, up 11.0% year on year. The balance of NPLs of
+commercial banks reached RMB3.23 trillion, with a NPL
+ratio of 1.59% and allowance to NPLs of 205.14%. The
+capital adequacy ratio was 15.06%.
+amounted to RMB284.26 trillion, up 10.0% year on year.
+The total issuance amount of various bonds in the bond
+market reached RMB71.0 trillion, up 14.8% year on year.
+Shanghai Composite Index and the Shenzhen Component
+Index dropped by 3.7% and 13.5% respectively over the
+end of last year. The central parity of RMB against the USD
+was RMB7.0827, a depreciation of 1.7% from the end of
+last year.
+The overall financial system ran smoothly. At the end
+of 2023, the balance of broad money supply (M2) was
+RMB292.27 trillion, up 9.7% year on year. The outstanding
+aggregate financing to the real economy (AFRE) stood at
+RMB378.09 trillion, up 9.5% year on year. The outstanding
+RMB loans reached RMB237.59 trillion, increasing by
+10.6% year on year. The balance of RMB deposits
+Significant progress has been made in the financial
+regulatory system reform, providing robust assurances
+for the high-quality development of finance and the
+prevention and resolution of risks. To deepen reforms,
+steps have been taken to implement the Reform Plan
+for the Party and State Institutions, and accelerate the
+formation of a new financial supervision pattern composed
+of "PBC, NFRA and CSRC". To prevent risks, a package
+of policies has been introduced, including the Regulation
+Governing Capital of Commercial Banks to improve the
+capital regulatory rules for commercial banks and enhance
+the risk management capability of banks; the Rules on Risk
+Classification of Financial Assets of Commercial Banks to
+promote accurate assessment of credit risks by commercial
+banks; and the Rules on Operational Risk Management
+of Banking and Insurance Institutions to further improve
+the regulatory rules for operational risk management
+of banking and insurance institutions, and clarify risk
+governance and management responsibilities. In order
+to promote development, the Implementation Opinions
+on Promoting the High-quality Development of Inclusive
+Finance was issued to promote the development of a high-
+level inclusive financial system; and 25 specific measures
+were put in place for strengthening financial support to
+the private sector and promoting its development and
+growth.
+Discussion and Analysis
+15
+Annual Report 2023
+The prudent monetary policy was both targeted and
+effective. PBC has cut the reserve requirement ratio
+("RRR") twice by 0.5 percentage points to maintain
+reasonably abundant liquidity and ensure a moderate
+volume and a steady pace of monetary credit. As a result
+of the two policy interest rate cuts, the 1-year and 5-year
+loan market quoted rates ("LPR") were lowered by 20 basis
+points and 10 basis points, respectively. PBC has also led
+commercial banks to reduce interest rates on existing first-
+time home loans in an orderly manner. Structural monetary
+policy tools have been applied to provide targeted support
+for key areas such as technology innovation, advanced
+manufacturing, and green development, and to steer more
+funds towards weak links such as private micro and small
+enterprises and rural revitalization, so as to promote the
+stable and healthy development of the real estate market.
+Moreover, efforts have been made in a timely manner,
+including up-regulating the macro-prudential parameters
+for cross-border financing and lowering the RRR for
+foreign exchange deposits, to maintain the stability of RMB
+exchange rate at a reasonable and balanced level.
+coordinated regional development. To improve people's
+livelihood, China issued an additional RMB1 trillion in
+government bonds to support post-disaster recovery and
+reconstruction, as well as to enhance disaster prevention,
+mitigation, and relief capabilities. Efforts have also been
+made to dissolve the risk of local government debts.
+The proactive fiscal policy was pursued with intensified
+efforts to improve efficiency. China has improved its
+tax and fee support policies, reducing the tax burden
+on businesses. It used special bond funds to effectively
+support a full range of key projects in transportation,
+water conservancy, energy, and other sectors that provide
+both present and future benefits. By investing in key areas,
+China has promoted high-quality development of the
+manufacturing industry, supported sci-tech innovation,
+promoted comprehensive rural revitalization, and boosted
+In 2023, the global economy continued to recover, but
+with divergent prospects. It faced challenges such as high
+inflation, interest rates and debt, while financial risks were
+accumulating. China has increased its efforts to regulate
+the macroeconomy by focusing on expanding domestic
+demand, optimizing structure, boosting confidence, and
+forestalling and defusing risks. The Chinese economy
+has rebounded and improved steadily, with both supply
+and demand improving and high-quality development
+advancing solidly. China's gross domestic product (GDP),
+fixed asset investment (excluding rural households),
+and total imports and exports of trade in goods (RMB-
+denominated) rose by 5.2%, 3.0% and 0.2% year on year
+respectively, while retail sales of consumer goods increased
+by 7.2% year on year. The value added of industrial
+enterprises above designated size, value added of services,
+and consumer price index (CPI) rose by 4.6%, 5.8% and
+0.2% year on year respectively.
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Discussion and Analysis
+27 March 2024
+Chairman: Liao Lin
+TEK
+Annual Report 2023
+14
+The glory of the previous journey inaugurates a new journey. 1 January 2024 marks the 40th anniversary of ICBC.
+In the past 40 years, we unswervingly integrated our own development into the great causes of progress of the nation,
+national rejuvenation, and people's well-being, and realized a historic leap from small to large, from local to global, and
+from a domestic bank to a modern state-owned large-scale financial institution. Looking to future from the perspective of
+historical coordinates, we are even more confident that the Chinese economy has great resilience and potential, and its
+strong fundamentals will not change in the long run. This is the biggest foundation and strongest support for the high-
+quality development of the financial industry. Only by firmly following the path of financial development with Chinese
+characteristics can ICBC take root downward, grow upward and make breakthroughs in building a world-class and modern
+financial institute with Chinese characteristics.
+Discussion and Analysis
+(492,117)
+191,655
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(6)
+Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(5)
+Calculated by dividing net interest income by the average balance of interest-generating assets.
+(4)
+(3)
+Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that
+Offer Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision
+2010) issued by CSRC.
+Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting
+period.
+(2)
+Notes: (1)
+61.83
+60.35
+61.67
+56.11
+56.11
+55.13
+Risk-weighted assets to total assets ratio
+8.94
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+611,850
+(9)
+Quarterly Financial Data
+1,105,614
+to equity holders of
+the parent company
+Net cash flows from
+operating activities
+189,799
+94,566
+Q4
+Q3
+208,392
+94,896
+Q2
+217,730
+81,525
+226,431
+90,145
+Q1
+Q4
+182,938
+95,320
+Q3
+194,614
+94,929
+83,580
+90,164
+Net profit attributable
+210,445
+218,461
+Operating income
+Q2
+Q1
+(In RMB millions)
+2022 (Restated)
+2023
+Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation (Provisional).
+FINANCIAL STATEMENTS ANALYSIS
+17 Income Statement Analysis
+• Net Interest Income
+362,110
+365,116
+Net profit
+(9.2)
+(5,760)
+62,610
+56,850
+Less: Income tax expense
+(0.6)
+(2,754)
+424,720
+421,966
+Profit before taxation
+joint ventures
+31 Analysis on Statement of
+Cash Flows
+14.2
+626
+4,396
+5,022
+Share of results of associates and
+(0.8)
+3,006
+(3,380)
+0.8
+Attributable to: Equity holders
+Net Interest Income
+Discussion and Analysis
+17
+Annual Report 2023
+interests
+under PRC GAAP and Those
+under IFRSS
+Statements Prepared
+between the Financial
+31 Reconciliation of Differences
+14.8
+145
+978
+1,123
+Non-controlling
+company
+Policies
+of the parent
+0.8
+2,861
+361,132
+363,993
+31 Changes of Major Accounting
+420,324
+416,944
+Operating profit
+2023
+In RMB millions, except for percentages
+Increase/ Growth rate
+CHANGES OF KEY INCOME STATEMENT ITEMS
+• Shareholders' Equity
+• Assets Deployment
+• Liabilities
+23 Balance Sheet Analysis
+Operating income
+Non-interest income
+Net interest income
+Item
+In 2023, adhering to the general principle of seeking progress while
+maintaining stability, the Bank actively responded to multiple internal
+and external challenges, coordinated development and security,
+continuously improved the quality and efficiency of financial services, and
+simultaneously promoted its own high-quality development. In the year,
+the Bank realized a net profit of RMB365,116 million, representing an
+increase of RMB3,006 million or 0.8% as compared to the previous year.
+Return on average total assets stood at 0.87%, and return on weighted
+average equity was 10.66%. Operating income amounted to RMB806,458
+million, representing a decrease of 4.3%. Specifically, net interest income
+decreased by 5.3% to RMB655,013 million; non-interest income was
+RMB151,445 million, up by 0.7%. Operating expenses amounted to
+RMB238,698 million, representing a decrease of 0.3%, and the cost-to-
+income ratio was 28.28%. Impairment losses on assets were RMB150,816
+million. Income tax expense decreased by 9.2% to RMB56,850 million.
+Income Statement Analysis
+Summary Geographical
+Segment Information
+•
+• Income Tax Expense
+Operating Expenses
+Impairment Losses on
+Assets
+.
+•
+• Non-interest Income
+• Interest Expense
+• Interest Income
+2022
+(decrease)
+(%)
+655,013
+(17.4)
+(31,861)
+182,677
+150,816
+Less: Impairment losses on assets
+(0.3)
+(653)
+239,351
+238,698
+Less: Operating expenses
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+• Off-balance Sheet Items
+(35,894)
+842,352
+806,458
+0.7
+1,078
+150,367
+151,445
+(5.3)
+(36,972)
+691,985
+(4.3)
+A
+A
+Moody's(5)
+119,357
+Net fee and commission income
+632,217
+646,765
+690,680
+691,985
+693,687
+655,013
+Net interest income
+Annual operating results (in RMB millions)
+2019
+2020
+2021
+Restated(1)
+Original(¹)
+2023
+2022
+Financial Data
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified,
+are consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+with balance of
+2.7 trillion
+4.24 trillion
+with balance of
+with balance of
+3.8 trillion
+with balance of
+5.4 trillion
+ЛП
+129,265
+129,325
+133,024
+131,215
+420,324
+418,138
+416,944
+Operating profit
+178,957
+202,668
+202,623
+182,677
+182,419
+150,816
+Impairment losses on assets
+207,776
+¥
+206,585
+239,351
+240,884
+238,698
+Operating expenses
+776,002
+800,075
+860,880
+842,352
+841,441
+806,458
+Operating income
+130,573
+236,227
+Loans to strategic
+emerging industries
+Agriculture-related
+loans
+Loans to
+manufacturing
+750,026
+2.04
+Non-interest-bearing liabilities
+Total liabilities
+2,065,143
+38,773,224
+32,291,926
+2,029,137
+34,321,063
+586,689
+1.82
+Net interest income
+655,013
+691,985
+Net interest spread
+36,708,081
+1.41
+Net interest margin
+1.61
+1.92
+Notes:
+(1)
+The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+on assets represent the average of the balances at the beginning of the year and at the end of the year.
+(2)
+Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(3)
+Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks
+and other financial institutions includes the amount of repurchase agreements etc.
+18
+Annual Report 2023
+1.72
+422,030
+Total interest-bearing liabilities
+3.17
+Green loans
+552 million
+15,495
+Up 1,366 thousand Up 19.80 million
+740 million
+12.059 million
+Personal mobile
+banking customers
+Financial Highlights
+Business outlets
+Personal customers
+Corporate customers
+8.73
+deposit issued
+103,529
+27,364,627
+3,794,532
+480,083
+1.75
+70,732
+1.86
+financial institutions (3)
+Debt securities and certificates of
+1,508,148
+56,809
+3.77
+1,132,767
+35,874
+2.55
+390,822
+9.31
+Profit before taxation
+Per share data (in RMB yuan)
+Risk-weighted assets (3)
+Net capital base (3)
+Net tier 1 capital(3)
+Net common equity tier 1 capital (3)
+Share capital
+of the parent company
+2,893,502 2,676,186
+3,496,109 3,257,755
+3,495,171
+3,756,887
+Equity attributable to equity holders
+institutions
+236,797
+2,266,573
+234,852
+261,389
+267,941
+2,784,259
+199,465 250,349
+454,566 361,994
+3,187,712 2,921,029
+454,566
+3,185,564
+3,369,858
+Due to banks and other financial
+535,493
+Accrued interest
+199,465
+210,185
+10,477,744
+356,407 356,407 356,407
+3,381,941 3,121,080 3,121,080
+3,736,919 3,475,995 3,475,995
+4,707,100 4,281,079 4,281,079
+24,641,631 22,225,272 22,225,272
+356,407 356,407 356,407
+2,886,378 2,653,002 2,457,274
+3,241,364 2,872,792 2,657,523
+3,909,669 3,396,186 3,121,479
+21,690,349 20,124,139 18,616,886
+Net asset value per share(4)
+9.55
+S&P(5)
+Credit rating
+2019
+2020
+2021
+2022
+2023
+0.86
+0.86
+0.95
+0.97
+0.97
+9,257,760 8,591,139 7,647,117
+31,896,125 30,435,543 27,417,433
+25,134,726 22,977,655
+12,944,860 12,028,262
+0.98
+0.86
+0.86
+0.95
+0.97
+0.97
+0.98
+Basic earnings per share
+6.93
+389,269
+8.15
+8.82
+8.81
+Diluted earnings per share
+13,331,463
+12,497,968 11,660,536
+7.48
+11,849,668 10,527,292 10,533,702
+40,920,491 36,095,831 36,094,727
+33,521,174 29,870,491 29,870,491
+16,209,928 14,671,154 14,671,154
+16,565,568 14,545,306 14,545,306
+1,404,657
+1,404,657
+360,882 1,557,616
+481,240
+Annual Report 2023
+9
+Financial Highlights
+Financial Data (continued)
+2022
+2023
+Original (1)
+Restated (1)
+2021
+2019
+As at the end of reporting period
+(in RMB millions)
+Total assets
+Total loans and advances to customers
+Corporate loans
+1,417,002
+Personal loans
+Net cash flows from operating activities
+315,906
+26,441,774
+421,966
+422,565
+424,720
+424,899
+392,126
+391,789
+Net profit
+365,116
+361,038
+362,110
+350,216
+317,685
+313,361
+Net profit attributable to equity holders
+of the parent company
+363,993
+360,483
+361,132
+348,338
+312,224
+Discounted bills
+2020
+406,296
+531,161
+Investment
+Total liabilities
+Due to customers
+Corporate deposits
+Personal deposits
+Allowance for impairment losses
+on loans (2)
+44,697,079
+26,086,482 23,212,312 23,210,376 20,667,245 18,624,308 16,761,319
+16,145,204 13,826,966 13,826,966 12,194,706 11,102,733 9,955,821
+8,653,621 8,236,561 8,234,625 7,944,781 7,115,279 6,383,624
+1,287,657 1,148,785 1,148,785 527,758
+756,391 672,762 672,762 603,983
+39,609,657 39,610,146 35,171,383 33,345,058 30,109,436
+478,730
+421,874
+NET FEE AND COMMISSION INCOME
+7.
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(589,688)
+Annual Report 2023
+The above interest income and expense are related to financial instruments which are not measured at fair value through
+profit or loss.
+2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+189
+2022
+Fee and commission income on:
+Settlement, clearing business and cash management
+8,803
+7,296
+Guarantee and commitment business
+8,709
+7,994
+Asset custody business
+14,172
+11,770
+Corporate wealth management services
+Securitisation vehicles
+17,736
+Bank card business
+19,586
+20,060
+Investment banking business
+26,253
+22,582
+Personal wealth management and private banking services
+45,439
+45,418
+17,906
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria at the initial set up of the vehicles. In addition, the Group is exposed to variability of returns from the
+vehicles through holding interests in the vehicles and the day-to-day servicing of the underlying assets in the vehicles which
+is carried out by the Group under a servicing contract. Key decisions are usually required only when underlying assets go
+into default. Therefore, in considering whether it has control, the Group considers whether it can use its power to influence
+these vehicles' returns.
+Wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities
+The Group acts as manager or investor in a number of wealth management products, investment funds, trust plans, asset
+management plans and assets-backed securities. When assessing whether the Group controls such a structured entity,
+the Group would determine whether it exercises the decision-making rights as a principal or an agent and usually focuses
+on the assessment of the aggregate economic interests of the Group in the entity (comprising any carried interests and
+expected management fees) and the decision-making authority of the entity. The Group would also determine whether
+another entity with decision-making rights is acting as an agent for it.
+61,112
+36,080
+1,405,039
+1,278,674
+Interest expense on:
+(ii) Includes interest expense on due to central banks and repurchase agreements.
+(i) Includes interest income on reverse repurchase agreements.
+Net interest income
+691,985
+655,013
+(586,689)
+(750,026)
+(35,874)
+(56,809)
+Debt securities issued and certificates of deposit
+(70,732)
+(103,529)
+Due to banks and other financial institutions (ii)
+(480,083)
+Due from banks and other financial institutions (i)
+45,425
+53,815
+Trust and agency services
+6. NET INTEREST INCOME
+2023
+2022
+Interest income on:
+Loans and advances to customers
+951,845
+900,063
+Corporate loans and advances
+581,117
+Due to customers
+507,252
+353,039
+376,864
+Discounted bills
+17,689
+15,947
+Financial investments
+338,267
+297,106
+Due from central banks
+Personal loans
+Other
+9.
+1,894
+10,684
+Net operating lease business income
+2022
+2023
+10. OTHER OPERATING (EXPENSE)/INCOME, NET
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+190
+7,906
+21,560
+(7)
+660
+904
+2,596
+Net gains on disposal of financial instruments measured at amortised cost
+Other
+3,638
+3,136
+12,075
+Held at the end of current year
+Net insurance business expense
+(5,778)
+In 2023, no emolument was paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group or as a compensation for loss of office (2022: Nil).
+Staff benefits
+92,793
+93,496
+Salaries and bonuses
+Staff costs:
+2022
+2023
+11. OPERATING EXPENSES
+4,828
+(4,400)
+(196)
+(3,756)
+1,590
+1,925
+(7,785)
+Net losses from foreign exchange and foreign exchange products
+Other
+Net gains on disposal of property and equipment, repossessed assets
+and other assets
+(9,028)
+541
+884
+Derecognised during the year
+2022
+2023
+Equity investments
+Derivatives and other
+Debt securities
+8. NET TRADING INCOME
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB17,179 million with respect to trust and other
+fiduciary activities for 2023 (2022: RMB22,290 million).
+119,357
+Net fee and commission income
+129,325
+(16,493)
+(18,534)
+Fee and commission expense
+145,818
+137,891
+3,226
+2,915
+12,063
+5,638
+4,421
+5,332
+4,179
+4,020
+3,047
+3,788
+(4,747)
+(4,163)
+Net losses on financial instruments designated as at FVTPL
+Net gains on disposal of financial instruments measured at FVTOCI
+Dividend income from equity investments designated as at FVTOCI, including:
+(217)
+1,950
+10,496
+2022
+2023
+NET GAINS ON FINANCIAL INVESTMENTS
+The above amounts mainly include gains and losses arising from the buying and selling of, the interest income and expense
+on, and the changes in fair value of financial assets and liabilities held for trading.
+8,308
+14,928
+(2,662)
+(1,556)
+Net gains/(losses) on financial instruments measured at FVTPL, including:
+697
+14. IMPAIRMENT LOSSES ON ASSETS
+29,422
+Note:
+8,469
+8,469
+1,054
+2,844
+1,926
+2,645
+Total
+Former External Supervisor
+Shen Bingxi (ix)
+50
+50
+50
+Former Employee Supervisor
+Wu Xiangjiang (viii)
+755
+755
+85
+460
+210
+Former Shareholder Supervisor
+Zhang Wei (vii)
+117
+117
+117
+Former Independent Non-executive Director
+Nout Wellink (vi)
+Former Non-executive Director
+Zheng Fuqing (v)
+194
+Since January 2015, the remuneration of the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State Government's policies relating to the remuneration
+reform on executives of central enterprises.
+The remuneration before tax of Directors and Supervisors for 2022 set out in the table above represents the total amount
+of annual remuneration for each of these individuals, which include the amounts disclosed in the 2022 Annual Report.
+Annual Report 2023
+59,475
+14,119
+2022
+RMB'000
+2023
+RMB'000
+16,672
+Salaries and allowances
+Discretionary bonuses
+Other
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in Notes 12 and 48(g)
+to the consolidated financial statements. Details of the emoluments in respect of the five highest paid individuals are as
+follows:
+13. FIVE HIGHEST PAID INDIVIDUALS
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+195
+Annual Report 2023
+In 2023, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or upon
+joining the Group or as a compensation for loss of office (2022: Nil).
+In 2023, there was no arrangement under which a Director or a Supervisor of the Bank waived or agreed to waive any
+remuneration (2022: None).
+(ix) In June 2022, Mr. Shen Bingxi ceased to act as External Supervisor of the Bank due to expiration of his term of office.
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+749
+(viii) In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to his age.
+(vi) In March 2022, Mr. Nout Wellink ceased to act as Independent Non-executive Director of the Bank due to expiration
+of his term of office.
+In January 2022, Mr. Zheng Fuqing ceased to act as Non-executive Director of the Bank due to expiration of his term
+of office.
+(v)
+(iv) In September 2022, Mr. Huang Liangbo ceased to act as Shareholder Supervisor and Chairman of the Board of
+Supervisors of the Bank due to change of job assignments.
+(iii) At the Annual General Meeting for the Year 2021 held on 23 June 2022, Mr. Liu Lanbiao was elected as External
+Supervisor of the Bank, and his term of office started from the day of approval at the Annual General Meeting.
+At the Annual General Meeting for the Year 2021 held on 23 June 2022, Mr. Norman Chan Tak Lam was elected
+as Independent Non-executive Director of the Bank, and his qualification was approved by the former CBIRC in
+September 2022.
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Dong Yang was elected as
+Non-executive Director of the Bank, and his qualification was approved by the former CBIRC in January 2022.
+(ii)
+(i)
+As at the approval date of the consolidated financial statements for the year ended 31 December 2022, changes of
+directors and supervisors of the Bank were as follows:
+Fees of Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding
+their remuneration with the Bank in accordance with the employee remuneration system.
+In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the
+President and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal
+results. Accordingly, the Bank accrued RMB16 thousand, RMB9 thousand and RMB7 thousand for Mr. Chen Siqing, Mr.
+Liao Lin and Mr. Wang Jingwu respectively, as additional contribution to the Annuity Plan in 2022.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred and will be determined based on the future performance.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(vii) In April 2022, Mr. Zhang Wei ceased to act as Shareholder Supervisor of the Bank due to his age.
+74,004
+749
+356
+External Supervisor
+Zhang Jie
+Employee Supervisor
+Huang Li
+Independent Non-executive Director
+Norman Chan Tak Lam (ii)
+Independent Non-executive Director
+Fred Zuliu Hu
+485
+Independent Non-executive Director
+Shen Si
+470
+Independent Non-executive Director
+Yang Siu Shun
+520
+Independent Non-executive Director
+Anthony Francis Neoh
+Non-executive Director
+Dong Yang (i)
+Non-executive Director
+Chen Yifang
+Non-executive Director
+Cao Liqun
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Lu Yongzhen
+Chief Risk Officer
+Executive Director, Senior Executive Vice President,
+Liu Lanbiao (i)
+External Supervisor
+Huang Liangbo (iv)
+Former Chairman of the Board of Supervisors
+256
+130
+130
+130
+250
+250
+250
+50
+50
+50
+140
+140
+140
+433
+137
+433
+485
+485
+470
+470
+520
+520
+1
+1,031
+1,031
+204
+481
+346
+g'
+་་་་་ 'ཊྛཛྫི8s ཋཡྻཧི་
+433
+Wang Jingwu
+430
+76,577
+88,201
+As of December 31, 2023, 16 of the jurisdictions where the Group's overseas operating institutions are located, including
+the UK and Luxembourg, had enacted Pillar Two legislation which will be implemented in 2024 or later. Therefore, the
+legislation in the aforementioned jurisdictions has no impact on the financial position and financial performance of the
+Group for the year 2023. According to the rules of Pillar Two legislation, low-tax jurisdictions with effective tax rate
+below 15% may have a Top-up Tax impact. There are differences in the computation of effective tax rate between Pillar
+Two legislation and IFRSS. The Group is continuing to assess the impact of the Pillar Two legislation on future financial
+performance.
+(b) Reconciliation between income tax and accounting profit
+PRC statutory income tax rate is 25%. Taxes on profits assessable elsewhere have been calculated at the applicable rates
+of tax prevailing in the countries/regions in which the Group operates in. The Group has reconciled income tax expense
+applicable to profit before taxation at the PRC statutory income tax rate to actual income tax expense for the Group as
+follows:
+2023
+Profit before taxation
+421,966
+2022
+424,720
+Tax at the PRC statutory income tax rate
+105,492
+106,180
+Effects of different applicable rates of tax prevailing in other countries/regions
+(288)
+(869)
+Effects of non-deductible expenses (i)
+19,580
+18,679
+Effects of non-taxable income (ii)
+(65,266)
+(58,688)
+Effects of profits attributable to associates and joint ventures
+(449)
+(439)
+Effects of other
+(2,219)
+(2,253)
+Income tax expense
+56,850
+62,610
+(i)
+The Group has applied the amendments to IAS 12 on Pillar Two legislation. Therefore, the Group shall neither recognise nor
+disclose information about deferred tax assets and liabilities related to Pillar Two legislation.
+62,610
+56,850
+(19,024)
+Loans and advances to customers (Note 23)
+Other
+196
+Annual Report 2023
+2023
+143,422
+2022
+143,173
+7,394
+39,504
+150,816
+182,677
+15. INCOME TAX EXPENSE
+(a) Income tax expense
+Current income tax expense
+The non-deductible expenses mainly represent non-deductible impairment allowance and write-offs.
+(ii) The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal debts.
+Chinese mainland
+Other overseas jurisdictions
+Deferred income tax expense
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2023
+2022
+58,651
+76,152
+1,191
+1,898
+5,211
+3,584
+65,053
+81,634
+(8,203)
+Hong Kong SAR and Macau SAR
+78
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+Annual Report 2023
+(14,810)
+Profit for the year attributable to ordinary shareholders of the parent company
+Shares:
+346,322
+Weighted average number of ordinary shares in issue (in million shares)
+Basic earnings per share (RMB yuan)
+356,407
+356,407
+0.98
+0.97
+Diluted earnings per share (RMB yuan)
+0.98
+0.97
+Basic and diluted earnings per share were calculated using the profit for the year attributable to ordinary shareholders of
+the parent company divided by the weighted average number of ordinary shares in issue.
+198
+Annual Report 2023
+5
+1
+1
+5
+2
+1
+21
+1
+1
+2022
+2023
+Number of employees
+RMB11,000,001 Yuan to RMB13,000,000 Yuan
+RMB13,000,001 Yuan to RMB15,000,000 Yuan
+RMB15,000,001 Yuan to RMB 17,000,000 Yuan
+RMB17,000,001 Yuan to RMB 19,000,000 Yuan
+RMB19,000,001 Yuan to RMB21,000,000 Yuan
+RMB21,000,001 Yuan to RMB23,000,000 Yuan
+RMB23,000,001 Yuan to RMB25,000,000 Yuan
+RMB25,000,001 Yuan to RMB27,000,000 Yuan
+The number of these individuals whose emoluments fell within the following bands is set out below:
+(14,964)
+361,132
+363,993
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity instrument holders of the
+parent company
+197
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+17. DIVIDENDS
+2023
+2022
+Dividends on ordinary shares declared and paid:
+Dividends on ordinary shares for 2022: RMB0.3035 per share
+(2021: RMB0.2933 per share)
+108,169
+104,534
+Dividends or interests declared and paid to other equity instrument holders:
+Dividends on preference shares
+5,842
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2023 includes
+a profit of RMB347,516 million (2022: RMB346,056 million) which has been dealt with in the financial statements of the
+Bank (Note 52).
+5,797
+9,122
+9,013
+14,964
+14,810
+Dividends on ordinary shares proposed for approval
+(not recognised as at 31 December):
+Dividends on ordinary shares for 2023: RMB0.3064 per share
+(2022: RMB0.3035 per share)
+109,203
+108,169
+18. EARNINGS PER SHARE
+Earnings:
+2023
+2022
+Interests on perpetual bonds distributed
+1,031
+349,029
+204
+insurances
+tax paid
+remuneration
+medical
+before
+Total
+Remuneration
+Fees
+Position
+additional
+annuities, and
+housing
+allowance,
+insurance,
+to social
+the employer
+Year ended 31 December 2023
+Contribution by
+Name
+before tax
+RMB'000
+RMB'000
+25
+825
+220
+605
+59
+Vice President, Chief Risk Officer
+Executive Director, Senior Executive
+Chairman, Executive Director
+Liao Lin (i)
+Wang Jingwu
+900
+227
+673
+(3) (4)=(1)+(2)+(3)
+(2)
+(1)
+RMB'000
+RMB'000
+Details of the directors' and supervisors' remuneration before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on The Stock Exchange of Hong Kong Limited and the Hong Kong Companies Ordinance, are as follows:
+12. DIRECTORS' AND SUPERVISORS' REMUNERATION
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+2,105
+Utility expenses
+3,047
+2,955
+Repairs and maintenance charges
+7,847
+7,479
+Depreciation charge for right-of-use assets and other leasing expense
+15,935
+15,995
+Depreciation charge for property and equipment
+Property and equipment expenses:
+142,633
+141,405
+18,095
+18,487
+Post-employment benefits - defined contribution plans (i)
+1,993
+Lu Yongzhen
+28,534
+Amortisation
+191
+Annual Report 2023
+(iii) In 2023, the Group incurred RMB4,593 million (2022: RMB4,304 million) of expensed research and development expenditures
+and RMB1,590 million (2022: RMB1,749 million) of capitalized research and development expenditures.
+(i) The defined contribution plans mainly include pension insurance, unemployment insurance and the annuity plan.
+(ii) The principal auditor's remuneration of RMB192 million for the year (2022: RMB 192 million) is included in other administrative
+expenses.
+239,351
+238,698
+26,928
+24,226
+10,097
+10,662
+27,155
+29,442
+Other
+Taxes and surcharges
+Other administrative expenses (ii)
+3,716
+4,429
+28,822
+31,745
+Non-executive Director
+Non-executive Director
+(iv) In April 2023, Mr. Zheng Guoyu ceased to act as Executive Director and Senior Executive Vice President of the Bank
+due to change of job assignments.
+(v)
+In March 2024, Mr. Anthony Francis Neoh ceased to act as Independent Non-executive Director of the Bank due to
+expiration of his term of office.
+(vi) In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to his age.
+Annual Report 2023
+193
+Notes to the Consolidated Financial Statements
+At the First Extraordinary General Meeting of 2023 held on 30 November 2023, Mr. Herbert Walter was elected as
+Independent Non-executive Director of the Bank, and his qualification was approved by NFRA in March 2024.
+(iii) In February 2024, Mr. Chen Siqing ceased to act as Chairman of the Board of Directors and Executive Director of the
+Bank due to his age.
+(In RMB millions, unless otherwise stated)
+Contribution
+by the
+employer
+to social
+insurance,
+housing
+900
+250
+Year ended 31 December 2022
+In February 2024, Mr. Liao Lin resigned as President of the Bank due to adjustment of job assignments. In order
+to ensure the normal operation and management of the Bank, Mr. Liao Lin performs the functions and powers of
+the President on behalf of the Bank in accordance with regulatory requirements and the Articles of Association of
+the Bank, and the period for performing the duties on behalf of the President will end on the date when the new
+President formally takes office. On 1 February 2024, the Board of Directors of the Bank elected Mr. Liao Lin as
+Chairman of the Board of Directors of the Bank, and his qualification was approved by NFRA in February 2024.
+(ii)
+(i)
+Anthony Francis Neoh (v)
+Former Independent Non-executive Director
+5209
+520
+Wu Xiangjiang (vi)
+Former Employee Supervisor
+Total
+2,102
+728
+2,890
+5,720
+Note: Since January 2015, the remuneration of the Chairman of the Board of Directors, the President and other executives of the
+Bank has followed the State Government's policies relating to the remuneration reform on executives of central enterprises.
+The total compensation packages for the Chairman of the Board of Directors, President and Executive Directors of the
+Bank have not been finalized in accordance with the regulations of the PRC relevant authorities. The remuneration not
+yet accrued is not expected to have a significant impact on the Group's 2023 consolidated financial statements. The total
+compensation packages will be further disclosed when determined by the relevant authorities.
+192
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Fees of Mr. Huang Li are his allowances obtained as Employee Supervisor of the Bank, excluding his remuneration with the
+Bank in accordance with the employee remuneration system.
+As at the approval date of the consolidated financial statements for the year ended 31 December 2023, changes of
+directors and supervisors of the Bank were as follows:
+250
+250
+50
+ཨཡྻཡྻ '
+490
+490
+470
+470
+Independent Non-executive Director
+Norman Chan Tak Lam
+Independent Non-executive Director
+Fred Zuliu Hu
+Independent Non-executive Director
+Independent Non-executive Director
+Yang Siu Shun
+Shen Si
+Non-executive Director
+Dong Yang
+Non-executive Director
+Chen Yifang
+Non-executive Director
+Cao Liqun
+440
+Feng Weidong
+440
+420
+227
+སྶཛ
+151
+Former Executive Director, Senior Executive Vice President
+Zheng Guoyu (iv)
+673
+Former Chairman, Executive Director
+External Supervisor
+250
+External Supervisor
+Chen Siqing (ii)
+Liu Lanbiao
+Zhang Jie
+Employee Supervisor
+Huang Li
+Independent Non-executive Director
+Herbert Walter (ii)
+420
+205
+54
+Actual
+1,031
+RMB'000
+RMB'000
+RMB'000
+before tax paid
+payment
+before tax
+bonuses
+Fees Remuneration
+Position
+RMB'000
+Name
+deferred
+emoluments
+medical
+Discretionary
+amount
+Of which:
+Total
+additional
+annuities and
+allowance,
+of remuneration
+RMB'000
+insurances
+RMB'000
+481
+346
+Executive Director, Senior Executive Vice President
+RMB'000
+1,129
+1,129
+212
+533
+384
+Vice Chairman, Executive Director, President
+1,129
+1,129
+Zheng Guoyu
+533
+212
+(1)
+(2)
+(4) (5)=(1)+(2)+(3)+(4)
+(6)
+(3)
+(7)=(5)-(6)
+Chen Siging
+Liao Lin
+Chairman, Executive Director
+384
+(4,594)
+(28,109)
+- to stage 2
+(11,705)
+15,684
+(3,979)
+- to stage 3
+(2,893)
+(49,676)
+57,271
+(Reverse)/charge for the year
+(6,642)
+92,227
+142,856
+Write-offs and transfer out
+(85,157)
+(85,157)
+31,002
+54,270
+- to stage 1
+31 December
+603,764
+Recoveries of loans and advances
+(352)
+(1,626)
+(1,723)
+Balance at 31 December 2023
+342,730
+156,240
+257,031
+Transfer:
+756,001
+Stage 2
+2023
+Stage 3
+Total
+Balance at 1 January 2022
+269,376
+110,649
+223,739
+Stage 1
+previously written off
+9,529
+9,529
+In 2023, the changes of gross carrying amounts of loans and advances to customers with a significant impact on the
+Group's impairment allowance were mainly resulted from the credit business in Chinese mainland, including: the gross
+carrying amount of domestic branches loans and advances to customers transferred from Stage 1 to Stage 2 was
+RMB436,289 million (2022: RMB497,668 million); the gross carrying amount of domestic branches loans transferred
+from Stage 2 to Stage 3 was RMB101,522 million (2022: RMB122,174 million); the gross carrying amount of domestic
+branches loans transferred from Stage 2 to Stage 1 was RMB223,294 million (2022: RMB147,733 million). The changes of
+impairment allowance resulting from loans transferred from Stage 1 to Stage 3, Stage 3 to Stage 1 and Stage 3 to Stage 2
+were not significant (2022: not significant).
+538
+28
+-2
+317
+510
+2
+317
+Balance at 31 December 2022
+Other movements
+Charge for the year
+- to stage 3
+- to stage 2
+- to stage 1
+Transfer:
+219
+28
+191
+Balance at 1 January 2022
+24. FINANCIAL INVESTMENTS
+Financial investments measured at FVTPL
+Financial investments measured at FVTOCI
+Financial investments measured at amortised cost
+31 December
+2023
+811,957
+2022
+747,474
+2,230,862
+2,223,096
+8,806,849
+7,563,132
+11,849,668
+Total
+206 Annual Report 2023
+(a) Financial investments measured at FVTPL
+31 December
+Financial investments held for trading
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Equity investments
+Financial investments designated as at FVTPL
+31 December
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+이 이 회
+Stage 3
+Stage 1
+Stage 3
+Stage 2
+-
+Stage 1
+510
+Balance at 1 January 2023
+(b) Movements of the allowance for impairment losses on loans and advances to customers
+measured at FVTOCI are as follows:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+205
+Annual Report 2023
+672,224
+251,923
+141,586
+278,715
+Balance at 31 December 2022
+1,232
+(857)
+811
+1,278
+Other movements
+Total
+28
+538
+Transfer:
+390
+29
+361
+Balance at 31 December 2023
+6
+1
+5
+Other movements
+(270)
+Stage 2
+(270)
+116
+224
+(108)
+(Reverse)/charge for the year
+46
+(46)
+- to stage 3
+- to stage 2
+- to stage 1
+Write-offs and transfer out
+10,533,702
+73,139
+186,993
+705,593
+827,906
+Less: Allowance for impairment losses
+(3,134)
+(1,107)
+702,459
+1,116,717
+826,799
+1,192,532
+Annual Report 2023 199
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+A derivative is a financial instrument, the value of which changes in response to the changes in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps, options and futures.
+The notional amount of a derivative represents the underlying amount of the specific financial instruments mentioned
+above. It indicates the volume of business transacted by the Group but does not reflect the risk.
+The notional amounts and fair values of derivative financial instruments held by the Group are set out below:
+31 December 2023
+31 December 2022
+Notional
+amounts
+Fair values
+Assets
+Notional
+Fair values
+Liabilities
+amounts
+Assets
+Liabilities
+Exchange rate contracts
+6,015,214
+52,830
+Interest rate contracts
+4,231,434
+5,761
+Commodity derivatives and other
+7,591
+200,951
+1,728,516
+2,142,652
+2,124,706
+Other debt investments:
+Unlisted
+Equity investments:
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+208 Annual Report 2023
+5,421
+5,264
+5,681
+3,965
+4,363
+4,506
+72,745
+84,655
+82,789
+93,126
+2,230,862
+2,223,096
+265,904
+394,590
+Other financial institutions operating in Chinese mainland
+209,164
+226,604
+Banks and other financial institutions operating outside Chinese mainland
+222,934
+Accrued interest
+1,003,045
+11,249,693
+15,142
+7,367
+75,339
+99
+(6)
+Currency swap contracts
+42,935
+82,685
+4,322
+129,942
+761
+(1,052)
+Equity and other derivatives
+922
+322
+82
+2
+1,328
+74
+(17)
+43,857
+85,424
+6,267
+2
+135,550
+934
+(1,075)
+31 December 2022
+Notional amounts with remaining maturity of
+Fair values
+Over three
+Over one
+4,280
+1,863
+2,417
+Interest rate swap contracts
+(41,618) 4,310,971
+(16,273) 3,139,900
+(18,360) 937,006
+(76,251) 8,387,877
+52,249
+(54,844)
+24,945
+(23,760)
+10,011
+(17,746)
+87,205
+(96,350)
+(a) Cash flow hedges
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, equity and other derivatives
+that are used to protect against exposures to variability of future cash flows.
+Included in the above derivative financial instruments, those designated as hedging instruments in the Group's cash flow
+hedges are set out below:
+31 December 2023
+Notional amounts with remaining maturity of
+1,679,980
+Fair values
+Over one
+Within
+three
+months
+but within
+year but
+within
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Over three
+Unlisted
+303,881
+339,324
+13,037
+16,418
+166,690
+157,946
+2,517
+3,549
+182,244
+177,913
+90,396
+87,032
+123,874
+107,163
+396,514
+372,108
+811,957
+747,474
+Debt securities:
+Listed in Hong Kong SAR
+3,204
+2,177
+Listed outside Hong Kong SAR
+20,629
+30,276
+Unlisted
+516,336
+460,797
+540,169
+493,250
+Annual Report 2023
+Analysed into:
+Funds and other investments
+Equity investments
+Corporate entities
+123,419
+21,338
+11,872
+64,517
+255
+84,302
+106,907
+357,150
+315,337
+14,650
+10,711
+371,800
+326,048
+Debt securities (analysed by type of issuers):
+207
+Governments and central banks
+372
+181
+Corporate entities
+222
+775
+Funds and other investments
+42,868
+49,318
+43,643
+49,318
+Other financial investments measured at FVTPL
+Debt securities (analysed by type of issuers):
+Policy banks
+Banks and other financial institutions
+Banks and other financial institutions
+2022
+Notes to the Consolidated Financial Statements
+Equity investments:
+811,957
+747,474
+31 December
+31 December
+2023
+2022
+1,076,400
+982,051
+184,168
+211,905
+293,463
+349,923
+566,522
+560,850
+22,099
+19,977
+2,142,652
+2,124,706
+5,421
+82,789
+5,264
+93,126
+2,230,862
+2,223,096
+Analysed into:
+Debt securities:
+Listed in Hong Kong SAR
+123,348
+92,309
+Listed outside Hong Kong SAR
+156,481
+166,742
+150,982
+160,996
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+Funds and other investments:
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+(b) Financial investments measured at FVTOCI
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Accrued interest
+Other debt investments
+Equity investments
+(In RMB millions, unless otherwise stated)
+31 December
+31 December
+2022
+2,937
+2,443
+27,188
+25,817
+74,921
+69,483
+105,046
+97,743
+3,353
+2,517
+2,393
+2,982
+2023
+Other movements
+Less: Allowance for impairment losses
+14,915
+Carrying amount of hedged items
+Assets
+Liabilities
+34,288
+(49,433)
+184
+Hedging instruments
+Effect on other
+comprehensive
+income during
+the current year
+Accumulated
+effect on other
+comprehensive
+income
+345
+623
+8
+30,693
+(60,418)
+1,076
+(3,340)
+65,604
+(109,851)
+1,268
+(2,995)
+(i)
+31 December 2022
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost and
+debt securities issued.
+Other (ii)
+Securities (i)
+Securities (i)
+Loans and advances to customers
+Other (ii)
+4,733
+(27,775)
+248
+593
+39,997
+169
+169
+30,146
+(41,615)
+(290)
+(3,630)
+74,876
+(69,390)
+127
+(2,868)
+(i)
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost, debt
+securities issued and certificates of deposit.
+(ii) Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and other
+financial institutions, customer deposits and other liabilities.
+Loans and advances to customers
+(ii) Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and other
+financial institutions, customer deposits and other liabilities.
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges in 2023 and 2022.
+(b) Fair value hedges
+year but
+within
+Over
+months
+one year
+five years
+five years
+Total
+2,270
+18,042
+45,069
+17,020
+82,401
+Assets
+2,955
+Liabilities
+(416)
+2,976
+12,383
+61,752
+30,892
+108,003
+725
+months
+but within
+three
+Within
+Over one
+Fair value hedges are used by the Group to protect against changes in fair value of financial assets and financial liabilities
+due to movements in market interest rates. The Group mainly used interest rate swaps as hedging instruments to hedge the
+interest risk of financial assets and financial liabilities.
+The changes in fair value of the hedging instruments and net gains or losses arising from the hedged risk relating to the
+hedged items are set out below:
+Gains/(losses) arising from fair value hedges, net:
+Hedging instruments
+The hedged items
+2023
+2022
+1,919
+4,721
+(1,988)
+(69)
+income
+(4,752)
+Annual Report 2023
+201
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Included in the above derivative financial instruments, those designated as hedging instruments in fair value hedges are
+interest rate swaps and the details are set out below:
+31 December 2023
+31 December 2022
+Notional amounts with remaining maturity of
+Fair values
+Over three
+(31)
+(94)
+comprehensive
+Liabilities
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+(ii) Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted deposits.
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain central
+banks of overseas countries or regions where it has operations. They are not available for use in the Group's daily operations.
+As at 31 December 2023, the mandatory reserve deposits ratios of the domestic branches of the Bank in respect of customer
+deposits denominated in RMB and foreign currencies were 9% (31 December 2022: 9.5%) and 4% (31 December 2022: 6%)
+respectively. The mandatory reserve funds placed by domestic subsidiaries of the Group are determined by the PBOC. The
+amounts of mandatory reserve deposits placed with the central banks of those countries or regions outside Chinese mainland
+are determined by local jurisdictions.
+3,427,892
+1,822
+4,042,293
+1,640
+516,558
+195,604
+188,923
+952,050
+2,647,750
+2,832,799
+Fiscal deposits and other
+Accrued interest
+Surplus reserves (ii)
+Mandatory reserves (i)
+Balances with central banks
+Cash on hand
+(i)
+2022
+66,340
+66,699
+2023
+31 December
+31 December
+31 December
+31 December
+2022
+Banks operating in Chinese mainland
+Placements with banks and other financial institutions:
+365,733
+414,258
+(393)
+(426)
+Less: Allowance for impairment losses
+366,126
+414,684
+3,406
+3,885
+116,014
+164,954
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+14,556
+24,145
+Other financial institutions operating in Chinese mainland
+232,150
+221,700
+Banks operating in Chinese mainland
+Deposits with banks and other financial institutions:
+2023
+19. CASH AND BALANCES WITH CENTRAL BANKS
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+year but
+66
+4
+9,802
+44
+(126)
+79,886
+89,487
+9,150
+4
+178,527
+1,986
+(3,725)
+200 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equity are as follows:
+31 December 2023
+Within
+Carrying amount of hedged items
+Hedging instruments
+Effect on other
+comprehensive
+Accumulated
+effect on other
+Assets
+5,002
+4,730
+Equity and other derivatives
+(3,561)
+within
+Over
+months
+one year
+five years
+five years
+Total
+Interest rate swap contracts
+886
+3,137
+income during
+the current year
+4,085
+Assets
+203
+Liabilities
+(38)
+Currency swap contracts
+74,270
+81,348
+4,999
+-
+160,617
+1,739
+8,108
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+Securities (i)
+Loans and advances to customers
+Measured at FVTOCI:
+Corporate loans and advances
+- Loans
+Discounted bills
+Accrued interest
+Measured at FVTPL:
+Corporate loans and advances
+- Loans
+31 December
+2023
+31 December
+2022
+16,128,752
+15,940,237
+13,813,025
+13,614,804
+188,515
+198,221
+8,653,621
+8,234,625
+2,755
+4,104
+Less: Allowance for impairment losses on loans and advances to customers
+measured at amortised cost (Note 23.2(a))
+56,117
+Accrued interest
+Personal loans
+564,670
+909
+544
+(97)
+(475)
+1,183,743
+709,148
+40,514
+154,974
+1,224,257
+864,122
+Annual Report 2023
+203
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+23. LOANS AND ADVANCES TO CUSTOMERS
+23.1 Loans and advances to customers by type of measurement:
+Measured at amortised cost:
+Corporate loans and advances
+- Loans
+- Finance lease
+Discounted bills
+53,487
+24,841,245
+22,105,241
+46,568
+(42,004)
+(4,564)
+- to stage 2
+(7,253)
+12,411
+(5,158)
+- to stage 3
+(2,596)
+(44,930)
+47,526
+Charge for the year
+27,041
+89,529
+26,736
+143,306
+Write-offs and transfer out
+(72,721)
+(72,721)
+Recoveries of loans and advances
+previously written off
+- to stage 1
+Transfer:
+Total
+672,224
+Stage 3
+251,923
+(756,001)
+(672,224)
+24,085,244
+21,433,017
+10,348
+1,284,902
+11,161
+1,144,681
+335
+37
+1,295,585
+1,155,879
+144,409
+6,104
+25,386,933
+As at 31 December 2023, the Group's allowance for impairment losses on loans and advances to customers measured at
+FVTOCI was RMB390 million (31 December 2022: RMB538 million), refer to Note 23.2(b).
+204 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+23.2 Allowance for impairment losses on loans and advances
+(a) Movements of the allowance for impairment losses on loans and advances to customers
+measured at amortised cost are as follows:
+Balance at 1 January 2023
+Stage 1
+Stage 2
+278,715
+141,586
+2,780
+22,591,676
+109,077
+1,073,854
+2022
+2023
+Assets
+Liabilities
+Securities (i)
+89,761
+(1,799)
+(493)
+105
+Loans and advances to customers
+Other (ii)
+4,780
+(89)
+1,267
+(6,528)
+(10)
+22
+95,808
+(8,327)
+(592)
+127
+(i)
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost and
+debt securities issued.
+(ii) Other hedged items are included in due from banks and other financial institutions and repurchase agreements.
+Liabilities
+to the fair value of hedged items
+Carrying amount of hedged items
+Assets
+Accumulated adjustments
+Other (ii)
+31 December 2023
+Accumulated adjustments
+Carrying amount of hedged items
+Assets
+73,809
+Liabilities
+(1,404)
+Assets
+to the fair value of hedged items
+Liabilities
+(703)
+62
+(c) Net investment hedges
+3,429
+3,267
+(92)
+80,505
+(1,404)
+(885)
+62
+(i)
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost and
+debt securities issued.
+(ii) Other hedged items are included in due from banks and other financial institutions and repurchase agreements.
+31 December 2022
+(90)
+14,915
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+under certain circumstances. Hedging is undertaken by using customer deposits taken in the same currencies as the
+functional currencies of related branches and subsidiaries which are accounted for as hedges of certain net investments in
+foreign operations.
+202 Annual Report 2023
+116,655
+48,975
+80,534
+37,546
+36,121
+36,563
+40,729
+4,678
+8,840
+127,762
+166,224
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional). The risk-weighted assets for counterparty credit risk of derivatives of the Group
+were calculated in accordance with the Rules on Measuring Derivative Counterparty Default Risk Assets since 1 January
+2019.
+22. REVERSE REPURCHASE AGREEMENTS
+Measured at amortised cost:
+Reverse repurchase agreements-bills
+Reverse repurchase agreements-securities
+Accrued interest
+Measured at FVTPL:
+Reverse repurchase agreements-securities and cash advanced as collateral on
+securities borrowing
+31 December
+31 December
+86,521
+2022
+2023
+31 December
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(d) Offsetting of financial instruments
+In accordance with the principle of offsetting financial instruments, the Group offsets certain derivative financial assets,
+derivative financial liabilities and variation margin and presents the net amounts after offsetting in the financial statements.
+Derivative financial assets
+Derivative financial liabilities
+31 December 2023
+Gross amounts
+71,381
+72,958
+Net amounts
+24,048
+26,884
+31 December 2022
+Gross amounts
+57,400
+As at 31 December 2023, an accumulated net losses from the hedging instrument of RMB1,002 million was recognised in
+other comprehensive income (31 December 2022: accumulated net losses of RMB675 million). There was no ineffectiveness
+in profit or loss that arises from the net investment hedges in 2023 and 2022.
+Net amounts
+months
+but within
+60,494
+34,064
+(e) Counterparty credit risk-weighted assets of derivative financial instruments
+The credit risk-weighted assets in respect of the above derivatives of the Group as at the end of the reporting period are as
+follows:
+Counterparty credit default risk-weighted assets
+Including: Non-netting settled credit default risk-weighted assets
+Netting settled credit default risk-weighted assets
+Credit value adjustment risk-weighted assets
+Central counterparties credit risk-weighted assets
+31 December
+30,970
+three
+differences
+of the year
+RMB27,000 million
+100
+100
+ICBC Financial Asset Investment Co., Ltd.*
+RMB12,505 million
+60
+60
+ICBC-AXA Assurance Co., Ltd. ("ICBC-AXA"). *
+RMB11,000 million
+RMB18,000 million
+100
+100
+ICBC Financial Leasing Co., Ltd. * ("ICBC Leasing")
+RMB433 million
+RMB200 million
+80
+80
+MXN1,597 million
+Real202 million
+USD904 million
+Mexico City, Mexico
+Sao Paulo, Brazil
+Commercial banking
+Commercial banking
+Buenos Aires, Argentina
+Commercial banking
+RMB7,980 million
+RMB27,000 million
+ICBC Peru Bank
+100
+USD120 million
+USD120 million
+Lima, Peru
+Commercial banking
+ICBC Credit Suisse Asset Management Co., Ltd. *
+100
+ARS171,933 million
+Beijing, the PRC
+Tianjin, the PRC
+Shanghai, the PRC
+Nanjing, the PRC
+("ICBC Investment")
+Less: Allowance for impairment losses
+Goodwill
+Share of net assets
+Interests in joint ventures
+Interests in associates
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+212
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+As at 31 December 2023 and 31 December 2022, voting rights of the subsidiaries of the Group are in line with the Group's
+equity interests.
+These subsidiaries incorporated in Chinese mainland are all limited liability companies.
+*
+Commercial banking
+Wealth management
+Commercial banking
+Insurance
+Financial asset
+investment
+ICBC Wealth Management Co., Ltd.*
+100
+100
+RMB16,000 million
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd. *
+60
+Fund management
+60
+100
+100
+RMB200 million
+RMB100 million
+RMB16,000 million
+RMB120 million
+RMB100 million
+Beijing, the PRC
+Zhejiang, the PRC
+Chongqing, the PRC
+Leasing
+Chongqing Bishan ICBC Rural Bank Co., Ltd. *
+31 December
+100
+Industrial and Commercial Bank of China (Argentina) S.A.
+USD425 million
+TRY8,845 million
+92.84
+92.84
+ICBC Turkey Bank Anonim Şirketi
+RUB10,810 million
+RUB10,810 million
+100
+100
+Bank ICBC (joint stock company)
+Banking
+London, United Kingdom
+USD839 million
+USD1,083 million
+60
+60
+ICBC Standard Bank PLC
+100
+100
+ICBC (London) PLC
+100
+100
+88
+ICBC Austria Bank GmbH
+EUR437 million
+Luxembourg
+Commercial banking
+USD200 million
+USD200 million
+London, United Kingdom
+Commercial banking
+EUR437 million
+100
+100
+EUR200 million
+Real202 million
+100
+100
+Industrial and Commercial Bank of China (Brasil) S.A.
+MXN1,597 million
+100
+100
+Industrial and Commercial Bank of China Mexico S.A.
+("ICBC Canada")
+Commercial banking
+Commercial banking
+Broker dealer and
+margin trading
+Commercial banking
+New York, United States
+Delaware and New York,
+United States
+Toronto, Canada
+CAD218.66 million
+CAD208 million
+80
+80
+80
+Industrial and Commercial Bank of China (Canada)
+EUR200 million
+Moscow, Russia
+Istanbul, Turkey
+Vienna, Austria
+Commercial banking
+Commercial banking
+Industrial and Commercial Bank of China (USA) NA
+80
+100
+80
+Industrial and Commercial Bank of China
+100
+100
+USD50 million
+USD306 million
+USD50.25 million
+Financial Services LLC
+USD369 million
+31 December
+2023
+61,868
+(1,778)
+(355)
+3,226
+26,208
+Standard Bank
+Associates
+2,910
+199
+(193)
+(313)
+3,217
+Joint ventures
+the year
+the year
+Other
+or profits
+income
+Balance at
+beginning
+under
+Other
+Declared
+distribution of
+Investment
+Investment
+(1,559)
+the equity
+Balance at
+end of
+Balance of
+allowance for
+impairment
+at end of
+increase
+decrease
+method
+comprehensive cash dividends
+recognised
+25,742
+Other
+Office
+27. PROPERTY AND EQUIPMENT
+(519)
+65,297
+(1,543)
+(3,234)
+(379)
+5,022
+(2,096)
+1,372
+66,155
+Total
+(519)
+62,387
+(1,742)
+(3,234)
+(379)
+36,730
+1,372
+(1,783)
+1,989
+(24)
+(1,456)
+(348)
+(183)
+(171)
+Subtotal
+62,938
+1,372
+(1,783)
+5,215
+36,645
+income
+Investment
+Movements during the year
+65,790
+64,778
+39,930
+39,384
+25,860
+25,394
+2022
+2023
+31 December
+31 December
+Standard Bank
+Other
+(a) Carrying value of the Group's associates and joint ventures are as follows:
+65,790
+64,778
+(365)
+(519)
+66,155
+2022
+62,573
+2,910
+3,217
+64,778
+65,790
+31 December
+Standard Bank is a listed commercial bank registered in Johannesburg, the Republic of South Africa with an issued capital
+of ZAR168 million and a strategic partner of the Group. As at 31 December 2023, the Group's equity interest and voting
+rights in Standard Bank were 19.39% (31 December 2022: 19.36%).
+31 December
+2022
+50,973
+51,261
+14,324
+14,894
+65,297
+2023
+The accounting policies of Standard Bank are consistent with those of the Group. Its financial information is significant to
+the Group and summarised as follows:
+As at/year ended As at/year ended
+31 December 2023 31 December 2022
+Group's share of net assets of the associate
+17,657
+17,592
+Goodwill
+8,085
+8,616
+19.36%
+Closing balance of the Group's interest in Standard Bank in the
+consolidated statement of financial position
+26,208
+Annual Report 2023
+213
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Movements of associates and joint ventures investments of the Group are as follows:
+25,742
+Industrial and Commercial Bank of China (Europe) S.A.
+19.39%
+90,868
+The associate
+Assets
+Liabilities
+Net assets
+1,174,552
+1,068,458
+1,176,814
+1,071,125
+Group's effective interest
+106,094
+17,129
+14,235
+Profit from continuing operations
+Equity method of the associate
+Net assets of the associate attributable to the parent company
+91,062
+105,689
+(New Zealand) Limited ("ICBC New Zealand")
+Commercial banking
+Auckland, New Zealand
+9,743
+13,885
+9
+9,734
+13,869
+16
+Accrued interest
+Other investments (iii)
+7,584,724
+8,831,683
+90,410
+98,590
+63,855
+68,061
+510,192
+542,365
+522,148
+593,513
+(In RMB millions, unless otherwise stated)
+(c) Financial investments measured at amortised cost
+Debt securities (analysed by type of issuers):
+31 December
+2023
+31 December
+8,845,568
+2022
+Policy banks
+Banks and other financial institutions (ii)
+Corporate entities
+Accrued interest
+7,529,154
+6,398,119
+Governments and central banks (i)
+Notes to the Consolidated Financial Statements
+7,594,467
+(38,719)
+19
+Total
+31,335
+2,699
+Stage 3
+23
+28,613
+Stage 2
+Stage 1
+- to stage 1
+Transfer:
+Balance at 1 January 2023
+Movements of the allowance for impairment losses on financial investments measured at amortised cost are as follows:
+223,682
+7,131
+7,563,132
+7,131
+11,254
+11,254
+8,806,849
+236,482
+7,556,001
+(31,335)
+8,806,849
+7,563,132
+Analysed into:
+Debt securities:
+Listed in Hong Kong SAR
+Less: Allowance for impairment losses
+Listed outside Hong Kong SAR
+Unlisted
+Unlisted
+Market value of listed securities
+38,843
+200,976
+8,555,776
+32,267
+194,467
+7,329,267
+8,795,595
+Other investments:
+209
+Annual Report 2023
+9,330
+4,835
+Balance at 31 December 2023
+(330)
+(417)
+24
+63
+Other movements
+568
+659
+(78)
+(13)
+(Reverse)/charge for the year
+- to stage 3
+49
+(49)
+- to stage 2
+(40)
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+As at 31 December 2023, the accumulated unrealized profit of the Group's debt securities and other debt investments
+measured at FVTOCI was RMB19,296 million and RMB66 million (31 December 2022: the accumulated unrealized loss of
+RMB10,144 million and RMB41 million).
+The Group designates certain non-trading equity investments as financial investments measured at FVTOCI. As at December
+31, 2023, the cumulated fair value floating profit of equity investments was RMB4,267 million (December 31, 2022:
+RMB2,902 million) In 2023, dividend income from such equity investments was RMB4,020 million (2022: RMB4,179 million).
+There was RMB884 million dividend income from equity investments derecognised (2022: RMB541 million). The value of
+equity investments disposed of was RMB20,496 million (2022: RMB12,337 million) and the cumulative gains transferred
+into retained earnings from other comprehensive income after disposal was RMB366 million (2022: RMB429 million).
+Allowance for impairment losses on financial investments measured at FVTOCI is recognised in other comprehensive income
+without decreasing the carrying amount of financial investments presented in the consolidated statement of financial
+position, and any impairment gain or loss is recognised in the profit or loss. Movements of the allowance for impairment
+losses on financial investments measured at FVTOCI are as follows:
+Balance at 1 January 2023
+Stage 1
+4,794
+Stage 2
+964
+Stage 3
+1,009
+3,527
+9,330
+Transfer:
+_ to stage 1
+40
+Total
+3,769
+9,568
+Stage 1
+Charge for the year
+2,203
+545
+2,072
+4,820
+Other movements
+105
+107
+9
+137
+Balance at 31 December 2022
+4,794
+1,009
+3,527
+21
+(19)
+(86)
+- to stage 3
+Stage 2
+Stage 3
+Total
+Balance at 1 January 2022
+2,677
+355
+(19)
+1,341
+Transfer:
+-
+- to stage 1
+- to stage 2
+(174)
+174
+4,373
+Properties
+- to stage 2
+Charge for the year
+Commercial banking
+Macau SAR, the PRC
+MOP12,064 million
+MOP589 million
+89.33
+89.33
+Industrial and Commercial Bank of China
+("ICBC International")
+Investment banking
+Hong Kong SAR, the PRC
+HKD5,963 million
+HKD5,963 million
+100
+100
+ICBC International Holdings Limited
+(Asia) Limited ("ICBC Asia")
+Principal
+activities
+Commercial banking
+31 December
+31 December
+Name
+2023
+2022
+2023
+(Macau) Limited ("ICBC Macau")
+Industrial and Commercial Bank of China
+100
+HKD44,188 million
+Amount
+invested
+by the Bank
+HKD54,738 million
+Place of
+incorporation/
+registration
+and operations
+Hong Kong SAR, the PRC
+100
+31 December
+PT. Bank ICBC Indonesia
+98.61
+NZD234 million
+NZD234 million
+100
+100
+Industrial and Commercial Bank of China
+(Almaty) Joint Stock Company
+Commercial banking
+Almaty, Kazakhstan
+KZT8,933 million
+KZT8,933 million
+100
+100
+Industrial and Commercial Bank of China
+(Thai) Public Company Limited ("ICBC Thai")
+Commercial banking
+Bangkok, Thailand
+THB23,711 million
+Industrial and Commercial Bank of China
+100
+100
+IDR3,706,100 million
+MYR833 million
+USD361 million
+MYR833 million
+Jakarta, Indonesia
+98.61
+Commercial banking
+Commercial banking
+(Malaysia) Berhad
+Industrial and Commercial Bank of China
+97.98
+97.98
+THB20,107 million
+Kuala Lumpur, Malaysia
+paid-in capital
+Percentage of equity interest %
+Nominal value of
+issued share/
+Balance at 31 December 2022
+Other movements
+Charge for the year
+- to stage 3
+- to stage 2
+- to stage 1
+Transfer:
+6,461
+Total
+Stage 3
+118
+Stage 2
+850
+Stage 1
+5,493
+Balance at 1 January 2022
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+210
+38,719
+(2)
+7,385
+2
+-
+4
+7,389
+(i)
+Other movements
+1
+(5)
+Balance at 31 December 2023
+36,009
+11
+2,699
+(6)
+(3)
+3
+(830)
+31 December
+2023
+2022
+2,712
+2,712
+160,571
+31 December
+160,571
+163,283
+Annual Report 2023
+211
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+163,283
+- to stage 3
+Unlisted investments, at cost
+25. INVESTMENTS IN SUBSIDIARIES
+830
+23,055
+68
+1,772
+24,827
+(21)
+47
+Listed investments, at cost
+28,613
+2,699
+31,335
+This includes a special government bond, which is a non-negotiable bond with a nominal value of RMB85,000 million (31
+December 2022: RMB85,000 million) issued by the Ministry of Finance of the People's Republic of China (the "MOF") to the
+Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+(ii) This includes Huarong bonds of RMB90,309 million (31 December 2022: RMB90,309 million). Huarong bonds are a series of
+long-term bonds issued by the former China Huarong Asset Management Co., Ltd. ("Huarong") in the year of 2000 and 2001
+to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the issuance of the bonds were used to
+purchase non-performing loans of the Bank. The bonds are non-negotiable, with a tenure of 10 years and bear interest at a
+fixed rate of 2.25% per annum. The MOF provides funding support for the repayment of principal and interest of the bonds.
+In 2010, the Bank received a notice from the MOF that the maturity dates of the Huarong bonds were extended for ten years.
+In 2020, the Bank received a notice from the MOF to adjust the interest rate of the Huarong bonds, starting from 1 January
+2020. Interest rate would be determined on yearly basis with reference to the average level of five-year government bond yield
+in the previous year. In January 2021, the Bank received notice from the MOF that the maturity dates of Huarong bonds were
+further extended for ten years. As at 31 December 2023, the Bank had received accumulated early repayments amounting to
+RMB222,687 million (31 December 2022: RMB222,687 million).
+(iii) Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from March 2024 to December 2033 and bear interest rates ranging from 3.50% to 6.33% per
+annum.
+23
+equipment
+(assets)
+and
+31 December
+2023
+2022
+Settlement and clearing balances
+213,951
+155,789
+Precious metals
+140,230
+125,717
+Right-of-use assets
+(a)
+28,538
+33,653
+Land use rights
+14,438
+14,935
+Goodwill
+2,941
+3,425
+6,204
+6,502
+(c)
+Other
+31 December
+Interest receivable
+6,056
+7,034
+9,181
+9,357
+(b)
+Advance payments
+Repossessed assets
+121,963
+29. OTHER ASSETS
+3,950
+1 January
+Recognised
+in profit
+Recognised
+in other
+comprehensive
+31 December
+2022
+Allowance for impairment losses
+(268)
+or loss
+72
+income
+2022
+(196)
+Change in fair value of financial instruments
+measured at FVTPL
+3,841
+(1,163)
+(368)
+5,481
+1,591
+(527)
+1,556
+As at 31 December 2023 and 31 December 2022, the Group did not have significant unrecognised deferred tax assets.
+562
+710
+(636)
+1,346
+Change in fair value of financial instruments
+measured at FVTOCI
+1,845
+(1,996)
+Other
+110,285
+545,438
+464,761
+58,650
+Additions
+6,231
+1,106
+162
+7,499
+Disposals and other movements
+(4,877)
+(6,873)
+1,051
+(10,699)
+At 31 December 2023
+39,191
+14,651
+1,608
+55,450
+Accumulated depreciation:
+(10)
+817
+(2,260)
+Disposals and other movements
+7,633
+117
+395
+624
+Depreciation charge for the year
+18,817
+218
+2,075
+16,524
+At 1 January 2022
+6,892
+20,418
+37,837
+At 31 December 2022 and 1 January 2023
+and buildings
+Aircraft
+Properties
+Office
+Aircraft
+(a) Right-of-use assets
+vessels
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+452,223
+533,547
+(12,538)
+(11,891)
+Less: Allowance for impairment losses
+217
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+equipment and
+motor vehicles
+Cost:
+1,220
+(30)
+4,309
+(3,059)
+Disposals and other movements
+6,700
+Total
+68
+Additions
+50,730
+357
+16,109
+34,264
+At 1 January 2022
+6,632
+(1,453)
+Deferred tax liabilities:
+101,117
+31 December
+1 January
+2023
+Recognised in
+profit or loss
+comprehensive
+income
+2023
+Allowance for impairment losses
+99,753
+12,014
+111,767
+Change in fair value of financial instruments
+measured at FVTPL
+(1,194)
+(3,027)
+(4,221)
+Change in fair value of financial instruments
+101,117
+(5,278)
+1,496
+(942)
+(5,832)
+Other
+in other
+11,623
+10,839
+Accrued staff costs
+(9,222)
+(6,773)
+(2,449)
+measured at FVTOCI
+784
+8,829
+Recognised
+(b) Movements of deferred income tax
+liabilities/
+(assets)
+Allowance for impairment losses
+(109)
+(38)
+(219)
+(196)
+Change in fair value of financial instruments
+measured at FVTPL
+7,729
+1,701
+8,735
+1,845
+Change in fair value of financial instruments
+measured at FVTOCI
+(146)
+64
+2,245
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+215
+Annual Report 2023
+3,950
+17,156
+Deferred tax assets:
+3,930
+1,591
+6,395
+2,203
+8,912
+Other
+710
+16,386
+(5,277)
+104,669
+Deferred tax liabilities:
+31 December
+2022
+profit or loss
+income
+2022
+Allowance for impairment losses
+81,662
+18,091
+99,753
+Change in fair value of financial instruments
+measured at FVTPL
+(3,455)
+2,261
+(1,194)
+Change in fair value of financial instruments
+measured at FVTOCI
+(5,635)
+3,202
+18,656
+79,259
+(5,832)
+16
+(3,851)
+comprehensive
+(1,997)
+10,839
+2,155
+8,684
+Accrued staff costs
+(2,449)
+3,186
+Other
+Recognised in
+1 January
+Recognised
+in other
+Change in fair value of financial instruments
+(38)
+158
+(196)
+Allowance for impairment losses
+2023
+measured at FVTPL
+income
+2023
+31 December
+comprehensive
+Recognised in
+1 January
+Recognised
+in other
+profit or loss
+216 Annual Report 2023
+1,845
+1,701
+Deferred tax assets:
+3,930
+(646)
+626
+3,950
+2,203
+(144)
+612
+Other
+64
+(646)
+710
+measured at FVTOCI
+Change in fair value of financial instruments
+1,591
+At 31 December 2022 and 1 January 2023
+and
+3,516
+(6,106)
+(1,199)
+(4,188)
+(37)
+3,477
+3,477
+22,686
+6,710
+8,039
+903
+191,036
+41,366
+62,340
+11,493
+༈ ། । | སྐུ | ।।
+Disposals and other movements
+Impairment charge for the year
+impairment losses:
+At 1 January 2022
+75,803
+34
+Depreciation charge for the year
+7,034
+12,359
+Impairment charge for the year
+(682)
+At 31 December 2022 and 1 January 2023
+21,156
+34
+Depreciation charge for the year
+7,011
+Disposals and other movements
+Accumulated depreciation and allowance for
+66,191
+211,093
+15,609
+1,860
+24,186
+107,766
+At 31 December 2023
+293,887
+148,099
+17,192
+1,976
+17,072
+109,548
+At 31 December 2022
+Carrying amount:
+At 31 December 2023
+223,556
+54,316
+68,149
+854
+8,182
+6,811
+22,858
+1,297
+1,297
+50,354
+(1,229)
+(6,224)
+(4,146)
+(11,692)
+87,937
+34
+13,120
+(93)
+522,434
+203,773
+83,758
+Disposals and other movements
+6,427
+106
+(11,154)
+4,621
+CIP transfer in/(out)
+21,550
+2,659
+6,388
+888
+10,250
+1,365
+Additions
+481,332
+180,945
+81,632
+13,590
+Construction
+Leasehold
+and motor
+and
+buildings
+in progress
+(1,232)
+improvements
+vessels
+Total
+Cost:
+At 1 January 2022
+186,949
+18,216
+vehicles
+(206)
+(143)
+(4,743)
+(10,685)
+136
+4,645
+Disposals and other movements
+(2,413)
+(155)
+5,904
+(106)
+(3,280)
+(12,304)
+At 31 December 2023
+195,703
+24,220
+14,980
+(6,350)
+149,457
+CIP transfer in/out)
+3,955
+8,422
+2,098
+At 31 December 2022 and 1 January 2023
+191,703
+17,106
+14,335
+29,758
+83,383
+504,980
+Additions
+509
+17,954
+751
+6,589
+198,453
+298,878
+82,155
+Annual Report 2023
+890
+(324)
+566
+Carrying amount:
+At 31 December 2022
+At 31 December 2023
+16,646
+15,590
+16,047
+11,330
+70
+32,763
+1,052
+27,972
+(b) Goodwill
+At 1 January
+Exchange difference
+Subtotal
+Less: Allowance for impairment losses
+Goodwill arising from business combinations has been reasonably allocated to the CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+The goodwill is attributable to the expected synergies arising from acquisition of several subsidiaries such as ICBC Asia and ICBC
+Macau in prior year.
+8,799
+8,967
+(382)
+(390)
+639
+9,181
+663
+176
+8,518
+9,181
+2022
+2023
+9,357
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash flow
+projections are based on financial forecasts approved by management of the subsidiaries. The average growth rates are projected
+based on the similar rates which do not exceed the long-term average growth rate for the business in which the CGU operates in.
+The discount rate is the before-tax rate and reflects the specific risk associated with the CGU.
+251
+36
+325
+24,997
+Depreciation charge for the year
+6,730
+689
+95
+7,514
+Disposals and other movements
+(4,321)
+(1,414)
+136
+214
+At 31 December 2023
+23,565
+2,791
+556
+26,912
+At 31 December 2023
+(325)
+1
+Other movements
+855
+35
+530
+At 31 December 2022 and 1 January 2023
+3
+Other movements
+219
+32
+At 1 January 2022
+Allowance for impairment losses:
+636
+218
+(5,599)
+differences
+differences
+(liabilities)
+differences
+(liabilities)
+Allowance for impairment losses
+450,033
+tax
+assets/
+111,767
+99,753
+Change in fair value of financial instruments
+measured at FVTPL
+(16,762)
+(4,221)
+(4,560)
+401,947
+(1,194)
+(taxable)
+temporary
+temporary
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+As at 31 December 2023, the process of obtaining the legal titles for the Group's properties and buildings with an
+aggregate carrying amount of RMB6,421 million (31 December 2022: RMB8,372 million) was still in progress. Management
+is of the view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant
+impact on the business operation of the Group.
+As at 31 December 2023, the carrying amount of aircraft and vessels leased out by the Group under operating leases was
+RMB149,457 million (31 December 2022: RMB148,099 million).
+As at 31 December 2023, the carrying amount of aircraft and vessels owned by the Group that have been pledged as
+collateral for liabilities due to banks and other financial institutions was RMB72,257 million (31 December 2022: RMB86,163
+million).
+As at 31 December 2023, the carrying amount of aircraft and vessel construction in progress was RMB17,670 million (31
+December 2022: RMB9,225 million).
+tax
+assets/
+28. DEFERRED TAX ASSETS AND LIABILITIES
+31 December 2023
+Deductible/
+Deferred
+31 December 2022
+Deductible/
+Deferred
+(taxable)
+Deferred tax assets:
+Change in fair value of financial instruments
+(a) Analysed by nature
+(35,609)
+temporary
+measured at FVTOCI
+liabilities/
+temporary
+tax
+tax
+(deductible)
+Deferred
+Taxable/
+Deferred
+Taxable/
+31 December 2022
+31 December 2023
+Deferred tax liabilities:
+101,117
+(deductible)
+104,669
+409,193
+(2,449)
+Accrued staff costs
+11,623
+43,448
+(9,222)
+10,839
+46,529
+(21,244)
+422,947
+Other
+(5,832)
+(23,345)
+(8,297)
+(5,278)
+39. OTHER EQUITY INSTRUMENTS
+(1) Preference shares
+(a) Preference shares ("Preference Shares") outstanding:
+Except for the dividends of H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+In original
+Financial instrument
+outstanding
+Issue date
+Accounting
+classification
+Dividend
+(million
+currency
+Amount
+(million)
+Conversion
+rate
+Issue price
+shares)
+(million)
+Maturity
+condition Conversion
+Offshore Preference
+Shares:
+356,407
+USD
+23/09/2020
+In RMB
+356,407
+A shares of RMB1 Yuan each
+356,407
+30,297
+Equity
+Closing balance of lease liabilities
+24,849
+28,629
+226 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+38. SHARE CAPITAL
+31 December 2023
+Number
+of shares
+(millions)
+Issued and fully paid:
+356,407
+H shares of RMB1 Yuan each
+Nominal
+value
+shares
+(millions)
+Nominal
+value
+86,795
+86,795
+86,795
+86,795
+269,612
+269,612
+269,612
+269,612
+31 December 2022
+Number of
+3.58%
+134,716
+145
+Total
+(b) Main clauses and basic information
+(i) Dividend
+Offshore and domestic dividends are paid annually.
+Offshore and domestic dividends are set at a fixed rate for 5 years after issuance and are reset every 5 years thereafter
+to the sum of the benchmark rate and the fixed spread. The fixed spread is equal to the spread between the initial
+offshore and domestic dividend rate and the benchmark rate at the time of issuance. The fixed spread remains unchanged
+throughout the term of the Preference Shares.
+(ii) Conditions to distribution of dividends
+The Bank can pay offshore and domestic dividends when it has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratios meet
+regulatory requirements. Preference shareholders of the Bank are senior to the ordinary shareholders in respect of the right
+to dividends. The order of payment of domestic dividends is equal to offshore dividends. The Bank may elect to cancel all
+or part of offshore and domestic dividends and this shall not constitute a default for any purpose, but such cancellation will
+require a shareholder's resolution to be passed.
+Annual Report 2023 227
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(iii) Dividend stopper and setting mechanism
+For Offshore and Domestic Preference Shares, if the Bank cancels all or part of the dividends to the Preference Shares, the
+Bank shall not make any dividend distribution to ordinary shareholders before the Bank pays the dividends to the preference
+shareholders in full for the current dividend period.
+Non-cumulative dividend is a dividend on Offshore and Domestic Preference Shares which does not cumulate upon omission
+of payment and the passed or omitted dividend of one year is not carried to the following year. After receiving a dividend
+at the agreed dividend rate, preference shareholders of the Bank will not participate in the distribution of residual profits
+with ordinary shareholders.
+The Bank shall distribute dividends for Offshore and Domestic Preference Shares in cash, based on the liquidation preference
+amount for the issued and outstanding Offshore Preference Shares or total amount of issued and outstanding Domestic
+Preference Shares during the corresponding period (i.e. the product of the issue price of Preference Shares and the number
+of the issued and outstanding preference shares).
+(iv) Order of distribution and liquidation method
+The offshore preference shareholders and domestic preference shareholders will rank equally for payment. The preference
+shareholders will be subordinated to the depositors, general creditors and holders of convertible bonds, holders of
+subordinated debts, holders of tier 2 capital bonds and holders of other tier 2 capital instruments of the Bank but will be
+senior to the ordinary shareholders of the Bank.
+(v) Mandatory conversion trigger events
+For Offshore Preference Shares, upon the occurrence of any Non-Viability Trigger Event, the Bank shall have the right to
+irrevocably and compulsorily convert all or part of the outstanding Offshore Preference Shares into H shares, under the
+consent of the National Financial Regulatory Administration (hereinafter referred to as the "NFRA") but without the need
+for the consent of the offshore preference shareholders or the ordinary shareholders. If the Offshore Preference Shares were
+converted into H shares, they cannot be converted to Preference Shares again under any circumstances.
+For Domestic Preference Shares, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Common Equity Tier
+1 Capital Adequacy Ratio of the Bank falling to 5.125% or below), the Bank shall have the right without the need for the
+consent of the domestic preference shareholders to convert all or part of the outstanding face value of Domestic Preference
+Shares into A shares, in order to restore the Common Equity Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%. If
+Domestic Preference Shares were converted into A shares, they cannot be converted to Preference Shares again under any
+circumstances. Upon the occurrence of a Tier 2 Capital Trigger Event, the Bank shall have the right without the need for the
+consent of the domestic preference shareholders to convert all the outstanding face value of Domestic Preference Shares
+into A shares. If Domestic Preference Shares were converted into A share, they cannot be converted to Preference Shares
+again under any circumstances.
+The initial mandatory conversion prices are HKD5.73 per H share for Offshore Preference Shares; RMB3.44 for Domestic
+2015 Preference Shares and RMB5.43 for Domestic 2019 Preference Shares. In case of stock dividends distribution of H or
+A shares of the Bank or other circumstances, the Bank will make cumulative adjustment to the compulsory conversion price
+in turn.
+(vi) Redemption conditions
+Subject to obtaining the approval of the NFRA and satisfying the conditions of redemption, the Bank has the right to
+redeem all or part of the Offshore Preference Shares at the first call date and any subsequent dividend payment date.
+Redemption price of Offshore Preference Shares is equal to liquidation preference price plus any declared but unpaid
+dividend in current period. The first redemption date of Offshore Preference Shares is five years after issuance.
+Under the premise of obtaining the approval of the NFRA and compliance with relevant requirements, the Bank has the
+right to redeem all or part of Domestic Preference Shares, after five years having elapsed since the date of issuance/the date
+of closing. The redemption period of Domestic Preference Shares is from the start date of redemption to the date of full
+redemption or conversion. Redemption price of Domestic Preference Shares is equal to book value plus any declared but
+unpaid dividend in current period.
+228
+Annual Report 2023
+27,335
+No
+Mandatory
+None
+70,000
+45
+2,900
+19,716
+None
+Mandatory
+No
+Domestic Preference
+Shares:
+RMB2015
+18/11/2015
+Equity
+4.58%
+USD20/Share
+RMB100/Share
+19/09/2019 Equity
+4.20%
+RMB100/Share
+560
+450
+45,000
+45,000
+None
+Mandatory
+No
+700
+70,000
+RMB2019
+Undiscounted lease liabilities
+100 Yuan
+3,023
+Demand deposits:
+35. DUE TO CUSTOMERS
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+221
+Annual Report 2023
+Certificates of deposit issued by certain of the Bank's overseas branches and subsidiaries are measured at amortised cost.
+34. CERTIFICATES OF DEPOSIT
+574,778
+1,018,106
+142,430
+28,174
+Total
+Repurchase agreements-securities and cash received as collateral on securities
+lending
+Measured at FVTPL:
+432,348
+989,932
+Corporate customers
+Personal customers
+Time deposits:
+Corporate customers
+15,148,817
+19,324,964
+8,553,919
+10,481,727
+6,594,898
+8,843,237
+14,067,643
+13,450,532
+Subtotal
+5,991,387
+8,076,256
+7,366,691
+2022
+31 December
+31 December
+2023
+Accrued interest
+Other
+Personal customers
+6,083,841
+6,454
+9,855
+6,430
+419,464
+31 December
+31 December
+and account-based investment products (i)
+Debt securities issued (i)
+Other
+Financial liabilities related to precious metals
+32. FINANCIAL LIABILITIES MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+220
+2023
+3,187,712
+522,811
+528,473
+6,801
+10,857
+303,008
+288,883
+213,002
+228,733
+3,369,858
+210,185
+2022
+55,549
+11,738
+968,339
+Accrued interest
+Repurchase agreements-securities
+Repurchase agreements-bills
+2022
+31 December
+31 December
+2023
+Measured at amortised cost:
+51,843
+33. REPURCHASE AGREEMENTS
+Financial liabilities related to precious metals and account-based investment products, and certain issued debt securities
+have been matched with precious metals or derivatives of the Group as part of a documented risk management strategy to
+mitigate market risk. An accounting mismatch would arise if these financial liabilities were accounted for at amortised cost,
+whereas the related precious metals or derivatives were measured at fair value with movements in fair value taken through the
+statement of profit or loss. By designating these financial liabilities at FVTPL, the movement in their fair values is recorded in
+the statement of profit or loss. As at 31 December 2023 and 31 December 2022, the difference between the fair values of the
+financial liabilities related to precious metals, account-based investment products and issued debt securities and the amounts
+that the Group would be contractually required to pay to the holders of the financial liabilities related to precious metals,
+account-based investment products and issued debt securities upon maturity was not significant.
+(i)
+64,287
+62,859
+3,520
+5,369
+5,218
+5,647
+In 2023 and 2022, there were no significant changes in the credit spread of the Group and therefore the amounts of
+changes in fair value of the financial liabilities arising from changes in the credit risk and the accumulated amounts as at the
+end of the respective years were not significant. The changes in fair value of the financial liabilities were mainly attributable
+to changes in other market factors.
+199,465
+535,493
+454,566
+19 ICBC 01 Tier 2 Bond
+30/08/2011
+30/06/2031
+30/06/2011
+5.56%
+38,000
+100 Yuan
+29/06/2011
+21/03/2019
+11 ICBC 01
+Circulation
+Maturity
+date
+Value
+date
+rate
+(In RMB million)
+(In RMB)
+Issue date
+Name
+date
+Coupon
+100 Yuan
+4.26%
+26/04/2029
+26/04/2019
+4.40%
+45,000
+100 Yuan
+24/04/2019
+19 ICBC 03 Tier 2 Bond
+26/03/2019
+45,000
+25/03/2034
+4.51%
+10,000
+100 Yuan
+21/03/2019
+19 ICBC 02 Tier 2 Bond
+26/03/2019
+25/03/2029
+25/03/2019
+25/03/2019
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+Issued and
+nominal amount
+As approved by the PBOC and the former CBIRC, the Bank issued callable subordinated bonds and tier 2 capital bonds in
+the National Interbank Bond Market through open market bidding. These subordinated bonds and tier 2 capital bonds were
+traded on the National Interbank Bond Market. The relevant information is set out below:
+12,402
+9,417
+9,543
+571,848
+682,184
+Accrued interest
+Issued by subsidiaries
+Issued by the Bank
+10,365
+(a)
+2022
+2023
+31 December
+31 December
+36. DEBT SECURITIES ISSUED
+As at 31 December 2023, the Group's pledged deposits included in above amounted to RMB171,113 million (31 December
+2022: RMB201,787 million).
+29,870,491
+33,521,174
+Subordinated bonds and tier 2 capital bonds
+Issue price
+704,129
+Other debt securities
+The Bank:
+(a) Subordinated bonds and tier 2 capital bonds issued
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+222 Annual Report 2023
+In 2023, the Group has not had any defaults in respect of payments of principal or interest or other breaches with respect
+to the bonds (2022: Nil).
+As at 31 December 2023, the amount of debt securities issued that were due within one year was RMB476,234 million (31
+December 2022: RMB122,602 million).
+905,953
+1,369,777
+591,630
+314,323
+1,749
+2,324
+108,698
+108,393
+203,876
+554,931
+(b)
+Issued by the Bank
+Issued by subsidiaries
+Accrued interest
+665,648
+28/04/2019
+Money market takings:
+2,841,385
+Property and equipment
+joint ventures
+Investments in associates and
+48,287
+228
+(563)
+7,957
+40,665
+Financial investments
+756,391
+(1,717)
+14,915
+(72,991)
+143,422
+672,762
+Loans and advances to customers
+97
+Credit commitments
+Other
+Total
+365
+797,251
+39,691
+686
+226
+(1,298)
+4,625
+40,159
+24,185
+9
+130
+27,640
+11,522
+159
+(3,619)
+1,297
+13,685
+519
+154
+(3,585)
+(387)
+475
+Reverse repurchase agreements
+3,386
+(2,799)
+(3,116)
+6,204
+6,502
+387
+624
+5,817
+3,405
+5,878
+2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+30. IMPAIRMENT ALLOWANCE
+Less: Allowance for impairment losses
+Subtotal
+Other
+Properties and buildings
+(c) Repossessed assets
+2022
+150,816
+Write-offs
+At
+3,560
+20
+2,040
+1,500
+financial institutions
+Due from banks and other
+2023
+Other
+Recoveries
+31 December
+previous
+write-offs
+of
+and
+transfer
+out
+for the year
+2023
+reverse
+1 January
+Charge or
+At
+(78,471)
+15,141
+(485)
+(1,555)
+2,911
+37,706
+Other
+27,640
+384
+2,807
+24,449
+87
+Credit commitments
+338
+(1,121)
+3,477
+10,991
+Property and equipment
+365
+365
+joint ventures
+13,685
+Investments in associates and
+1,010
+Total
+4,256
+137,552
+138,308
+2,524,293
+2,698,821
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+2022
+2023
+40,159
+31 December
+Deposits:
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+797,251
+3,232
+9,616
+(87,856)
+182,677
+689,582
+31 December
+3,056
+2,664,901
+40,665
+-
+Other
+31 December
+At
+previous
+write-offs
+out
+of
+Recoveries
+Write-offs
+and
+transfer
+2022
+Charge for
+the year
+1 January
+At
+Due from banks and other
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+219
+Annual Report 2023
+884,252
+2022
+207
+financial institutions
+324
+(23)
+29,647
+10,834
+Financial investments
+672,762
+1,234
+9,529
+(85,157)
+1,126
+143,173
+Loans and advances to customers
+475
+9
+338
+128
+Reverse repurchase agreements
+1,500
+-- 50
+603,983
+19 ICBC 04 Tier 2 Bond
+(82)
+100 Yuan
+251,811
+277,321
+279,634
+2022
+2023
+296,443
+31 December
+31 December
+Other
+Early retirement benefits
+Promissory notes
+Sundry tax payables
+Lease liabilities
+Provisions for credit commitments
+Salaries, bonuses, allowances and subsidies payables
+Insurance business liabilities
+Settlement and clearing balances
+37. OTHER LIABILITIES
+(b)
+이 회
+44,768
+41,282
+- to stage 1
+Transfer:
+Balance at 1 January 2023
+(b) Provisions for credit commitments
+(a) There were no overdue payment for staff salaries, bonuses, allowances and subsidies payable as at 31 December 2023 (31
+December 2022: Nil).
+784,392
+138,128
+133,407
+818,642
+(viii) ICBC Macau issued debt securities denominated in RMB at fixed interest rates amounting to RMB4,988 million in total
+with maturities between 2024 and 2026. The coupon rates range from 2.58% to 3.09%.
+19
+756
+1,716
+16,493
+15,941
+28,629
+24,849
+27,640
+24,185
+12
+(vii) ICBC Canada issued interbank certificates of deposit denominated in CAD at fixed interest rates amounting to
+RMB183 million in total that will mature in 2024. The coupon rate is 0%.
+(vi) ICBC Investment issued debt securities denominated in RMB at fixed interest rates amounting to RMB14,000 million
+in total with maturities between 2024 and 2025. The coupon rates range from 2.20% to 3.70%.
+ICBC International issued notes denominated in RMB and USD at fixed interest rates amounting to an equivalent of
+RMB9,707 million in total with maturities between 2024 and 2025. The coupon rates range from 1.10% to 3.70%.
+ICBC New Zealand issued notes denominated in NZD at fixed or floating interest rates amounting to an equivalent of
+RMB2,701 million in total with maturities between 2024 and 2026. The coupon rates range from 2.61% to 6.78%.
+Sydney Branch issued debt securities, notes, and interbank certificates of deposit denominated in AUD, RMB, HKD
+and USD at fixed or floating interest rates amounting to an equivalent of RMB6,749 million in total with maturities
+between 2024 and 2027. The coupon rates range from 0% to 7.00%.
+Head Office issued debt securities or interbank certificates of deposit, denominated in RMB at fixed interest rates
+amounting to RMB422,984 million in total with maturities between 2024 and 2026. The coupon rates range from 0%
+to 2.80%.
+(ii)
+(i)
+The Bank:
+(b) Other debt securities issued
+The above tier 2 capital bonds are separately traded on the Thai Bond Market Association, The Stock Exchange of Hong
+Kong Limited and the National Interbank Bond Market.
+On 15 March 2022, ICBC-AXA issued a capital supplementary bond with an aggregate nominal amount of RMB5,000
+million, bearing an initial fixed interest rate of 3.7%. The bond will mature on 17 March 2032. The issuer has an option to
+redeem the capital supplementary bond in whole or in part at par value at the end of the fifth interest-bearing year. If the
+issuer does not exercise the redemption option, the coupon rate would increase to 4.7% from the sixth interest-bearing
+year.
+(iii) Singapore Branch issued debt securities and notes denominated in RMB and USD at fixed or floating interest rates
+amounting to an equivalent of RMB32,657 million in total with maturities between 2024 and 2026. The coupon rates
+range from 1.00% to 6.47%.
+On 12 September 2019, ICBC Macau issued a tier 2 capital bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 2.875%. The bond will mature on 12 September 2029.
+Subsidiaries:
+The bonds cannot be redeemed before maturity.
+22/09/2015
+21/09/2025
+21/09/2015
+4.875%
+14,200
+2,000
+On 23 March 2018, ICBC Thai issued a tier 2 capital bond with an aggregate nominal amount of THB5,000 million, bearing
+a fixed interest rate of 3.5%. The bond will mature on 23 September 2028.
+- to stage 2
+(iv)
+(vi)
+ICBC Thai issued debt securities denominated in THB at fixed interest rates amounting to an equivalent of RMB7,237
+million in total with maturities between 2024 and 2027. The coupon rates range from 0% to 3.70%.
+ICBC Leasing issued debt securities and notes denominated in RMB and USD at fixed or floating interest rates
+amounting to an equivalent of RMB61,855 million in total with maturities between 2024 and 2031. The coupon rates
+range from 1.25% to 6.68%.
+(v)
+(iv)
+(iii)
+(ii)
+(i) ICBC Asia issued debt securities and interbank certificates of deposit denominated in RMB and USD at fixed interest
+rates amounting to an equivalent of RMB7,722 million in total with maturities between 2024 and 2026. The coupon
+rates range from 3.15% to 5.60%.
+Subsidiaries:
+(v)
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+224
+Macau Branch issued debt securities and notes denominated in USD and MOP at fixed or floating interest rates
+amounting to an equivalent of RMB3,541 million in total that will mature in 2024. The coupon rates range from
+4.70% to 6.15%.
+(ix)
+(viii) London Branch issued notes denominated in GBP, USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB9,676 million in total with maturities between 2025 and 2026. The coupon rates range from 1.63%
+to 6.04%.
+(vii) Hong Kong Branch issued notes denominated in USD and HKD at fixed or floating interest rates amounting to an
+equivalent of RMB40,151 million in total with maturities between 2024 and 2026. The coupon rates range from
+1.20% to 6.39%.
+Dubai (DIFC) Branch issued notes denominated in RMB and USD at fixed or floating interest rates amounting to an
+equivalent of RMB16,511 million in total with maturities between 2024 and 2026. The coupon rates range from
+1.48% to 6.40%.
+Luxembourg Branch issued notes denominated in USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB11,956 million in total with maturities between 2024 and 2026. The coupon rates range from
+0.13% to 6.50%.
+New York Branch issued debt securities and notes denominated in USD at fixed interest rates amounting to an
+equivalent of RMB10,706 million in total with maturities between 2024 and 2027. The coupon rates range from 0%
+to 3.54%.
+Annual Report 2023
+Stage 1
+20,783
+Stage 2
+6,611
+20,783
+Balance at 31 December 2022
+384
+15
+56
+313
+Other movements
+2,807
+6,611
+(740)
+687
+Charge/(reverse) for the year
+14
+(12)
+(2)
+- to stage 3
+(30)
+(219)
+2,860
+- to stage 2
+246
+(c) Lease liabilities
+24/04/2019
+More than five years
+5,704
+5,441
+4,572
+4,689
+6,473
+6,109
+27,640
+8,923
+Three to five years
+Two to three years
+One to two years
+Less than one year
+2022
+2023
+31 December
+31 December
+8,073
+99.189
+(123)
+24,449
+98
+Other movements
+(3,585)
+223
+(855)
+(2,953)
+(Reverse)/charge for the year
+184
+31
+(113)
+- to stage 3
+301
+(301)
+(341)
+341
+27,640
+Total
+Stage 3
+246
+(71)
+123
+1
+Balance at 31 December 2023
+987
+3,581
+19,881
+Total
+Stage 3
+Stage 2
+Stage 1
+- to stage 1
+130
+Transfer:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+225
+Annual Report 2023
+24,185
+654
+5,634
+17,897
+Balance at 1 January 2022
+USD
+249
+(million)
+5,000
+100 Yuan
+18/01/2022
+22 ICBC 02 Tier 2 Bond
+21/01/2022
+20/01/2022 20/01/2032
+3.28%
+35,000
+3.60%
+100 Yuan
+22 ICBC 01 Tier 2 Bond
+16/12/2021
+15/12/2036
+15/12/2021
+3.74%
+10,000
+100 Yuan
+13/12/2021
+18/01/2022
+21 ICBC 03 Tier 2 Bond
+20/01/2022 20/01/2037
+22 ICBC 03 Tier 2 Bond
+30,000
+100 Yuan
+18/08/2022
+22 ICBC 03A Tier-2 Capital Bonds
+15/04/2022
+14/04/2037
+14/04/2022
+3.74%
+21/01/2022
+5,000
+12/04/2022
+22 ICBC 04 Tier 2 Bond
+15/04/2022
+14/04/2032
+3.50% 14/04/2022
+45,000
+100 Yuan
+12/04/2022
+100 Yuan
+3.02%
+16/12/2021
+15/12/2021
+30,000
+100 Yuan
+12/11/2020
+20 ICBC 02 Tier 2 Bond
+25/09/2020
+24/09/2030
+24/09/2020
+4.20%
+4.15%
+60,000
+22/09/2020
+20 ICBC 01 Tier 2 Bond
+28/04/2019
+26/04/2034
+26/04/2019
+4.69%
+21/09/2015
+10,000
+100 Yuan
+15/12/2031
+16/11/2020
+20 ICBC 03 Tier 2 Bond
+3.48%
+50,000
+100 Yuan
+13/12/2021
+21 ICBC 02 Tier 2 Bond
+22/01/2021
+21/01/2021 21/01/2031
+4.15%
+16/11/2030
+30,000
+19/01/2021
+21 ICBC 01 Tier 2 Bond
+17/11/2020
+16/11/2020 16/11/2035
+4.45%
+10,000
+100 Yuan
+12/11/2020
+100 Yuan
+22/08/2022
+17/11/2020
+23/08/2022
+31/08/2023
+30/08/2023 30/08/2038
+3.18%
+25,000
+100 Yuan
+28/08/2023
+23 ICBC 02B Tier-2 Capital Bonds
+31/08/2023
+The Bank has the option to redeem these bonds in whole or in part on specific dates at par value in future upon the
+approval of the relevant regulatory authorities.
+30/08/2033
+3.07%
+30,000
+100 Yuan
+28/08/2023
+13/04/2023
+12/04/2038
+3.58% 12/04/2023
+20,000
+30/08/2023
+100 Yuan
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+Maturity date
+Circulation date
+22/08/2032
+Value date
+Coupon
+rate
+(In RMB)
+currency)
+(million)
+currency)
+223
+Issue date Currency
+(In original
+Ending
+balance
+Issued
+price
+Tier 2 capital bonds
+15 USD
+Name
+In 2015, the Bank issued tier 2 capital bonds denominated in USD. The bonds were approved for listing and dealing by The
+Stock Exchange of Hong Kong Limited. The relevant information is set out below:
+(In RMB millions, unless otherwise stated)
+(In original
+10/04/2023
+Issued
+amount
+12/04/2033
+3.34%
+10,000
+100 Yuan
+08/11/2022
+11/11/2022
+10/11/2032
+10/11/2022
+3.00%
+50,000
+100 Yuan
+22 ICBC 04A Tier-2 Capital Bonds
+22 ICBC 04B Tier-2 Capital Bonds
+22 ICBC 05A Tier-2 Capital Bonds
+22 ICBC 05B Tier-2 Capital Bonds
+23 ICBC 01A Tier-2 Capital Bonds
+23 ICBC 01B Tier-2 Capital Bonds
+23 ICBC 02A Tier-2 Capital Bonds
+23/08/2022
+22/08/2037
+22/08/2022
+3.32%
+13/04/2023
+22 ICBC 03B Tier-2 Capital Bonds
+10,000
+18/08/2022
+10/11/2022
+10/11/2037
+08/11/2022
+11/11/2022
+100 Yuan
+10/04/2023
+35,000
+22/12/2022 22/12/2037
+3.85%
+5,000
+100 Yuan
+20/12/2022
+23/12/2022
+23/12/2022
+12/04/2023
+20/12/2022
+100 Yuan
+25,000
+3.49%
+22/12/2022
+22/12/2032
+3.70%
+currency
+(million)
+In RMB
+(million
+currency
+In RMB
+(million)
+units)
+(million)
+(million)
+Offshore
+USD Perpetual bond
+N/A
+Series 1
+RMB2019 Perpetual bond
+39,793
+N/A
+6,160
+39,793
+Domestic
+RMB2021 Perpetual bond
+800
+00
+80,000
+80,000
+800
+80,000
+units)
+80,000
+6,160
+(million)
+1 January 2023
+units)
+(ii) Interest stopper and setting mechanism
+The interest payment for both the Domestic Perpetual Bonds and Offshore Perpetual Bond is non-cumulative. The Bank
+shall have the right to cancel, in whole or in part, distributions on the interest payment and any such cancellation shall
+not constitute an event of default. The Bank may, at its sole discretion, use the proceeds from the cancelled distributions
+to meet other obligations as they fall due. However, the Bank shall not distribute profits to ordinary shareholders until
+resumption of full interest payment.
+700
+(iii) Order of distribution and liquidation method
+The claims in respect of Domestic Perpetual Bonds will be subordinated to claims of depositors, general creditors, and
+subordinated indebtedness that rank senior to Domestic Perpetual Bonds, and will rank in priority to all classes of shares
+held by shareholders of the Bank. The claims in respect of Offshore Perpetual Bond will be subordinated to claims of
+depositors, general creditors, tier 2 capital bond holders and subordinated indebtedness that rank senior to the Offshore
+Perpetual Bond, and will rank in priority to all classes of shares held by shareholders of the Bank. Domestic Perpetual
+Bonds and Offshore Perpetual Bond will rank pari passu with the claims in respect of any other Additional Tier 1 Capital
+instruments of the Bank that rank pari passu with the perpetual bonds.
+(iv) Write down conditions
+For 2019 Domestic Perpetual Bond, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Common Equity Tier
+1 Capital Adequacy Ratio of the Bank falling to 5.125% or below), the Bank has the right to write down all or part of the
+total nominal amount of the outstanding 2019 Domestic Perpetual Bond with the consent of the NFRA but without the
+need for the consent of the bond holders, in order to restore the Common Equity Tier 1 Capital Adequacy Ratio of the Bank
+to above 5.125%. Upon the occurrence of a Tier 2 Capital Trigger Event, without the need for the consent of the bond
+holders, the Bank has the right to write down all the total nominal amount of the outstanding 2019 Domestic Perpetual
+Bond.
+For 2021 Domestic Perpetual Bond Series 1 and 2021 Domestic Perpetual Bond Series 2, upon the occurrence of a Non-
+Viability Trigger Event, the Bank has the right to write down all or part of the nominal amount of the outstanding perpetual
+bonds without the need for the consent of the bond holders.
+For Offshore Perpetual Bond, upon the occurrence of a Non-Viability Trigger Event, the Bank has the right to write down all
+or part of the perpetual bonds issued and outstanding at that time up to the total nominal value without the need for the
+consent of the bond holders.
+230
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(v) Redemption conditions
+The duration of the Domestic Perpetual Bonds and Offshore Perpetual Bond is the same as the continuing operation of
+the Bank. Five years after the issuance date of the Domestic Perpetual Bonds and Offshore Perpetual Bond, the Bank shall
+have the right to redeem them in whole or in part on each distribution payment date (including the fifth distribution
+payment date since the issuance). In the event that the perpetual bonds are not classified as additional tier 1 capital due
+to unpredicted changes in regulations, the Bank shall have the right to redeem Domestic Perpetual Bonds and Offshore
+Perpetual Bond fully instead of partly.
+(c) Changes in perpetual bond outstanding
+Movement during the year
+In
+outstanding
+(million
+In RMB
+currency
+(million
+Financial instrument
+(million)
+original
+original
+Amount
+original
+Amount
+31 December 2023
+In
+In
+Amount
+70,000
+Notes to the Consolidated Financial Statements
+700
+19,310
+(2) Equity attributable to other equity instrument holders of non-controlling interests
+Annual Report 2023
+231
+(In RMB millions, unless otherwise stated)
+40. RESERVES
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(b) Surplus reserves
+(i) Statutory surplus reserve
+The Bank is required to appropriate 10% of its profit for the year, as determined under the Accounting Standards for
+Business Enterprises and other relevant requirements ("PRC GAAP"), pursuant to the Company Law of the PRC and the
+Articles of the Bank to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 27 March 2024, the total appropriation to surplus
+reserve of the Bank was RMB34,981 million (2022: RMB34,411 million), among which an appropriation of 10% of
+the profit of the Bank for the year determined under the PRC GAAP to the statutory surplus reserve, in the amount of
+RMB34,869 million (2022: RMB34,343 million) was approved and a total surplus reserve appropriated by overseas branches
+was RMB112 million (2022: RMB68 million) pursuant to the requirements of local authorities.
+(ii) Discretionary surplus reserve
+19,701
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under the PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meeting.
+Subject to the approval of the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+The Bank's overseas entities appropriate their profits to other surplus reserves or statutory reserve in accordance with the
+relevant laws and regulations promulgated by the local regulatory bodies.
+(c) General reserve
+In accordance with the "Administrative Measures for the Provision of Reserves of Financial Enterprises" (Cai Jin [2012] No.
+20) issued by the MOF, the Bank maintains a general reserve within equity, through the appropriation of profit for the year,
+which should not be less than 1.5% of the year-end balance of its risk assets, to partially cover unidentified possible losses.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+Pursuant to the resolution of the board of directors' meeting held on 27 March 2024, the total appropriation to general
+reserve of the Bank was RMB64,264 million (2022: RMB53,571 million). The general reserve balance of the Bank as at 31
+December 2023 amounted to RMB544,549 million, which reached 1.5% of the year-end balance of the Bank's risk assets.
+(d) Investment revaluation reserve
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVTOCI.
+232 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Chinese mainland.
+(f) Cash flow hedging reserve
+The cash flow hedging reserve comprises the effective portion of the gains or losses on the hedging instruments.
+(g) Other reserves
+The interest rate of Offshore Perpetual Bond for the first five years is 3.20%, resetting every 5 years. The rate is determined
+by a benchmark rate plus a fixed spread, and the fixed spread will remain unchanged during the duration period. The
+dividend shall be paid semi-annually.
+Other reserves represent reserves other than the items listed above, including other comprehensive income recognised
+under the equity method.
+(iii) Other surplus reserves
+(1) Equity attributable to ordinary shareholders of non-controlling interests
+19,310
+19,701
+70,000
+70,000
+RMB2021 Perpetual bond
+Series 2
+300
+30,000
+30,000
+Total
+219,793
+300
+30,000
+30,000
+219,793
+The carrying amount of perpetual bonds issued by the Bank, net of related issuance fees, was RMB219,717 million as at 31
+December 2023 (31 December 2022: RMB219,717 million).
+(3) Interests attributable to equity instruments' holders
+31 December
+31 December
+Items
+Total equity attributable to non-controlling interests
+2.
+354,331
+354,331
+(2) Equity attributable to other equity instrument holders of the parent company
+3,141,778
+70,000
+3,402,556
+3,496,109
+3,756,887
+Total equity attributable to equity holders of the parent company
+1.
+2022
+2023
+(1) Equity attributable to ordinary shareholders of the parent company
+Each Domestic Perpetual Bond has a par value of RMB100, and the interest rate of the bonds for the first five years are
+4.45% for 2019 Domestic Perpetual Bond, 4.04% for 2021 Domestic Perpetual Bond Series 1, and 3.65% for 2021
+Domestic Perpetual Bond Series 2, resetting every 5 years. The rates are determined by a benchmark rate plus a fixed
+spread. The initial fixed spreads are the difference between the interest rate and the benchmark rate as determined at
+the time of issuance. The fixed spread will not be adjusted once determined during the duration period. The interest of
+Domestic Perpetual Bonds shall be paid annually.
+134,716
+(In RMB millions, unless otherwise stated)
+45
+145
+2,900
+19,716
+Domestic Preference
+Shares:
+RMB2015
+450
+45,000
+45,000
+RMB2019
+700
+70,000
+70,000
+19,716
+Total
+45,000
+45,000
+700
+70,000
+70,000
+134,716
+The carrying amount of preference shares issued by the Bank, net of related issuance fees, was RMB134,614 million as at
+31 December 2023 (31 December 2022: RMB134,614 million).
+(2) Perpetual bond
+(a) Perpetual bond outstanding
+Financial instrument
+Accounting
+Initial
+interest
+Amount
+(million
+In original
+450
+currency
+2,900
+145
+(h) Distributable profits
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+1 January 2023
+Movement during the year
+Amount
+Financial instrument
+(million
+In original
+currency
+Amount
+In original
+Amount
+31 December 2023
+In original
+In RMB
+45
+(million
+shares)
+(million)
+(million)
+shares)
+currency
+(million)
+In RMB
+(million
+(million)
+shares)
+currency
+(million)
+In RMB
+(million)
+Offshore Preference
+Shares:
+USD
+outstanding
+(i) Interest
+In RMB
+outstanding
+04/06/2021
+Equity
+4.04% RMB100/Unit
+700
+70,000
+70,000
+None
+None
+No
+RMB2021 Perpetual bond
+Series 2
+24/11/2021
+Equity
+3.65% RMB100/Unit
+300
+Series 1
+30,000
+None
+None
+No
+Total
+219,793
+(i)
+Offshore USD Perpetual Bond was issued in specific denomination of USD200,000 and integral multiplies of USD1,000 in
+excess thereof at an issue price of 100%.
+(b) Main clauses and basic information
+With the approvals of relevant regulatory authorities, the Bank issued RMB80,000 million, RMB70,000 million and
+RMB30,000 million of undated capital bonds on 26 July 2019, 4 June 2021 and 24 November 2021 (hereinafter referred to
+as "2019 Domestic Perpetual Bond", "2021 Domestic Perpetual Bond Series 1" and "2021 Domestic Perpetual Bond Series
+2" respectively, collectively Domestic Perpetual Bonds) in the National Interbank Bond Market.
+The Bank issued USD6,160 million of undated capital bonds (hereinafter referred to as "Offshore Perpetual Bond") on The
+Stock Exchange of Hong Kong Limited on 24 September 2021.
+The funds raised by the Bank from the bonds were used to supplement additional tier 1 capital of the Bank in accordance
+with the relevant laws and approvals by regulatory authorities.
+Annual Report 2023
+229
+Notes to the Consolidated Financial Statements
+30,000
+Conversion
+RMB2021 Perpetual bond
+None
+Issue date classification
+rate
+Issue price
+units)
+(million)
+(million) Maturity condition Conversion
+Offshore
+USD Perpetual bond
+24/09/2021
+Equity
+3.20%
+Note (i)
+NA
+N/A
+No
+6,160
+None
+None
+No
+Domestic
+RMB2019
+Perpetual bond
+26/07/2019
+Equity
+4.45%
+RMB100/Unit
+800
+80,000
+80,000
+None
+39,793
+The Bank's distributable profit is based on its retained profits as determined under PRC GAAP and IFRSS, whichever is
+lower. The amount that the Bank's subsidiaries can legally distribute is determined by referring to their profits as reflected
+in their financial statements prepared in accordance with the accounting regulations and principles promulgated by the
+local regulatory bodies. These profits may differ from those dealt with in these financial statements, which are prepared in
+accordance with IFRSS.
+Investment funds
+(a) Other comprehensive income attributable to equity holders of the parent company in
+the consolidated statement of financial position
+28,614
+Asset management plans and asset-backed securities
+Trust plans
+31 December 2022
+Financial
+investments
+measured at
+Financial
+investments
+Financial
+investments
+measured at
+measured at
+FVTPL
+FVTOCI
+amortised cost
+43,128
+32,987
+46,405
+8,769
+37,309
+1,785
+91,311
+8,769
+39,094
+Annual Report 2023
+235
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Structured entities sponsored by the Group in which the Group does not consolidate
+but holds an interest
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees from
+managing assets on behalf of investors. These structured entities are financed through the issuance of investment products
+to investors. Interest held by the Group includes investments in the products issued by these unconsolidated structured
+entities and fees charged for providing management services. As at 31 December 2023 and 31 December 2022, the carrying
+amounts of the investments in the products issued by these structured entities and fee receivables being recognised were
+not significant in the consolidated financial statements. Management fee income earned by the Group was included in fee
+and commission income of personal wealth management and private banking services and corporate wealth management
+services set out in Note 7.
+As at 31 December 2023, the balance of the unconsolidated non-principal-guaranteed wealth management products and
+investment funds, which are sponsored by the Group, were RMB1,857,056 million (31 December 2022: RMB2,143,978
+million) and RMB1,756,215 million (31 December 2022: RMB1,713,743 million) respectively.
+In 2023, the amount of the average exposure of financing transactions through placements and reverse repurchase
+agreements from the Group with non-principal-guaranteed wealth management products sponsored by the Group was
+RMB386 million (2022: RMB21,631 million). The transactions were conducted in the ordinary course of business under
+normal terms and conditions and at market rates.
+(c) Consolidated structured entities
+The consolidated structured entities of the Group are primarily the principal-guaranteed wealth management products,
+certain investment funds, asset-backed securities and asset management plans issued or initiated and invested by the Group
+or purchased due to regulatory requirements related to wealth management business. The Group controls these entities
+because the Group has power over, is exposed to, or has rights to variable returns from its involvement with these entities
+and has the ability to use its power over these entities to affect the amount of the Group's variable returns.
+15,196
+44. TRANSFERRED FINANCIAL ASSETS
+84,538
+19,576
+asset-backed securities
+85,277
+85,277
+79,065
+79,065
+Trust plans
+35,859
+35,859
+16,981
+16,981
+159,557
+159,557
+139,174
+139,174
+772
+The maximum loss exposures in the above investment funds, asset management plans and asset-backed securities, and
+trust plans are the carrying amounts which are measured at amortised cost, or the fair value of the investments held by the
+Group as at the reporting date.
+31 December 2023
+Financial
+investments
+measured at
+Financial
+investments
+measured at
+FVTPL
+FVTOCI
+Financial
+investments
+measured at
+amortised cost
+Investment funds
+38,421
+Asset management plans and asset-backed securities
+30,606
+26,829
+27,842
+Trust plans
+15,511
+The following tables set out an analysis of the line items in the consolidated statement of financial position in which assets
+were recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+Asset management plans and
+The Group enters into transactions in the ordinary course of business by which it transfers recognised financial assets to
+third parties or special purpose entities. In some cases, these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continues to recognise the transferred assets in
+the statement of financial position.
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements. The
+counterparties are allowed to sell or repledge those securities in the absence of default by the Group but has an obligation
+to return the securities at the maturity of the contract. For securities lent out, if the securities increase or decrease in
+value, the Group may in certain circumstances require additional cash collateral from counterparties or return part of
+the cash collateral to counterparties. The Group has determined that it retains substantially all the risks and rewards of
+these securities and therefore has not derecognised them. In addition, it recognises a financial liability for cash received as
+collateral.
+Usance letters of credit
+Loan commitments
+31 December
+2023
+804,061
+31 December
+2022
+680,068
+32,048
+56,365
+540,709
+501,054
+53,099
+53,646
+148,803
+112,606
+Sight letters of credit
+- With an original maturity of under one year
+108,102
+- With an original maturity of one year or over
+443,749
+348,202
+Undrawn credit card limits
+1,126,870
+1,111,002
+3,184,180
+2,971,045
+Credit risk-weighted assets of credit commitments
+1,158,895
+1,113,801
+238
+Annual Report 2023
+34,841
+Repurchase transactions and securities lending transactions
+- Non-financing letters of guarantees
+Guarantees issued
+236
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Securitisation transactions
+The Group transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may
+acquire some asset-backed securities at the subordinated tranche level and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether to derecognise the associated credit assets by
+evaluating the extent to which it retains the risks and rewards of the assets.
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the consolidated statement
+of financial position to the extent of the Group's continuing involvement and the rest is derecognised. The extent of the
+Group's continuing involvement is the extent of the risks and rewards undertaken by the Group with value changes of the
+transferred financial assets. As at 31 December 2023, loans with an original carrying amount of RMB627,857 million at
+the time of transfer (31 December 2022: RMB627,857 million) have been securitised by the Group under arrangements in
+which the Group retained a continuing involvement in such assets. The carrying amount of assets that the Group continues
+to recognise on the consolidated statement of financial position was RMB73,786 million as at 31 December 2023 (31
+December 2022: RMB75,925 million).
+As at 31 December 2023, the carrying amount of asset-backed securities held by the Group in securitisation transactions
+that were qualified for derecognition was RMB791 million (31 December 2022: RMB721 million), and its maximum exposure
+approximated to the carrying amount.
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration received is recorded as a financial liability. As at 31 December 2023, transferred
+credit assets that were not qualified for derecognition of the Group amounted to RMB132 million at the time of transfer (31
+December 2022: RMB132 million).
+45. ASSETS PLEDGED AS SECURITY
+The Group's collaterals for liabilities or contingent liabilities include financial assets such as securities and bills, which mainly
+serve as collaterals for repurchase agreements, securities borrowing, derivatives, or local statutory requirements. As at
+31 December 2023, the par value of the financial assets of the Group pledged as collateral amounted to approximately
+RMB1,474,996 million (31 December 2022: approximately RMB940,239 million).
+46. SHARE APPRECIATION RIGHTS PLAN
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board
+of directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will
+be valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+Annual Report 2023
+237
+- Financing letters of guarantees
+Notes to the Consolidated Financial Statements
+47. COMMITMENTS AND CONTINGENT LIABILITIES
+(a) Capital commitments
+At the end of the reporting period, the Group had capital commitments as follows:
+Contracted but not provided for
+(b) Credit commitments
+31 December
+31 December
+2023
+2022
+26,804
+19,427
+The Group has outstanding commitments to extend credit including approved loans and undrawn credit card limits.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limits are under the assumption that the amounts will be fully advanced. The
+amounts for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be
+recognised at the end of the reporting period had the counterparties failed to perform as contracted.
+Bank acceptances
+(In RMB millions, unless otherwise stated)
+41. OTHER COMPREHENSIVE INCOME
+43,128
+38,421
+(In RMB millions, unless otherwise stated)
+(b) Other comprehensive income in the consolidated statement of profit or loss and other
+comprehensive income
+Items that will not be reclassified to profit or loss:
+2023
+2022
+(i)
+Changes in fair value of equity instruments designated as at FVTOCI
+Less: Income tax effect
+1,748
+(2,106)
+(218)
+(821)
+1,530
+(2,927)
+(ii) Other comprehensive income recognised under the equity method
+(iii) Other
+Notes to the Consolidated Financial Statements
+(7)
+(28)
+13
+Items that may be reclassified subsequently to profit or loss:
+(i)
+Changes in fair value of debt instruments measured at FVTOCI
+30,515
+(27,483)
+Less: Amount transferred to profit or loss from other comprehensive income
+Less: Income tax effect
+(3,593)
+(2,853)
+(5,818)
+6,116
+21,104
+(24,220)
+(25)
+(ii) Credit losses of debt instruments measured at FVTOCI
+233
+(4,078)
+Investment
+revaluation
+Foreign
+currency
+translation
+reserve
+reserve
+Other
+Total
+1 January 2022
+26,087
+(39,930)
+(6,960)
+(20,803)
+Movement during the year
+(23,744)
+22,689
+Annual Report 2023
+(1,898)
+31 December 2022 and 1 January 2023
+2,343
+(17,241)
+(8,858)
+(23,756)
+Movement during the year
+21,704
+1,633
+(3,659)
+19,678
+31 December 2023
+24,047
+(15,608)
+(12,517)
+(2,953)
+43,128
+Less: Income tax effect
+5,790
+Deposits with banks and other financial institutions with
+original maturity of three months or less
+331,464
+228,987
+Placements with banks and other financial institutions with
+original maturity of three months or less
+272,302
+365,112
+Reverse repurchase agreements with original maturity of three months or less
+1,133,217
+749,854
+2,755,732
+1,926,851
+234
+516,558
+Annual Report 2023
+43. INTERESTS IN STRUCTURED ENTITIES
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+products issued by these structured entities. Such structured entities include investment funds, asset management plans
+and asset-backed securities, and trust plans and the Group does not consolidate these structured entities. The nature and
+purpose of these structured entities are to generate fees from managing assets on behalf of investors and are financed
+through the issuance of investment products to investors.
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+31 December 2023
+Carrying
+Maximum
+31 December 2022
+Carrying
+Maximum
+amount
+exposure
+amount
+exposure
+Investment funds
+38,421
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+98
+952,050
+66,699
+107
+(1,960)
+205
+3,830
+(iii) Cash flow hedging reserve:
+Gain during the year
+126
+1,268
+Less: Income tax effect
+(9)
+16
+117
+1,284
+(iv) Other comprehensive income recognised under the equity method
+66,340
+(372)
+(v) Foreign currency translation reserve
+(vi) Other
+1,823
+21,276
+(5,145)
+(3,557)
+19,227
+(4,550)
+42. CASH AND CASH EQUIVALENTS
+Cash on hand
+Balances with central banks other than restricted deposits
+31 December
+31 December
+2023
+2022
+(224)
+(c) Changes in preference shares outstanding
+Repurchase agreements
+6,200
+19,802
+5,487
+8,549
+76,492
+Unallocated assets
+104,669
+Total assets
+44,697,079
+Segment liabilities
+16,989,789
+17,454,497
+6,226,481
+182,472
+40,853,239
+Unallocated liabilities
+67,252
+Total liabilities
+42,654
+Other non-current assets (ii)
+298,878
+25,280
+banking
+banking
+operations
+Other
+Total
+Segment assets
+17,203,589
+8,983,095
+40,920,491
+18,228,557
+44,592,410
+Including: Investments in associates and joint ventures
+64,778
+64,778
+Property and equipment
+108,123
+137,558
+27,917
+177,169
+Treasury
+Other segment information:
+2,058,377
+Internal net interest income/(expense)
+14,267
+167,717
+(181,984)
+Net fee and commission income
+74,554
+54,288
+483
+129,325
+Other income/(expense), net (i)
+8,466
+(5,457)
+11,984
+6,049
+21,042
+Operating income
+388,915
+691,985
+269,891
+130,466
+291,628
+1,125,803
+3,184,180
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+Annual Report 2023
+247
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Credit commitments
+2022
+Personal
+Treasury
+banking
+banking
+operations
+Other
+Total
+External net interest income
+Corporate
+Personal
+Corporate
+31 December 2023
+Net fee and commission income
+72,556
+46,060
+741
+119,357
+Other income/(expense), net (i)
+7,619
+(2,263)
+21,464
+5,268
+32,088
+Operating income
+381,914
+317,856
+101,420
+5,268
+806,458
+(211,406)
+211,174
+232
+Internal net interest income/(expense)
+Transactions between segments mainly represent the provision of funding to and from individual segments. The internal
+transfer pricing of these transactions is determined with reference to the market rates and have been reflected in the
+performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as "internal
+net interest income or expense". Net interest income and expense relating to third parties are referred to as "external net
+interest income or expense".
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+246 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2023
+Corporate
+Personal
+Treasury
+Operating expenses
+banking
+operations
+Other
+Total
+External net interest income
+301,507
+62,885
+290,621
+655,013
+banking
+(98,156)
+(120,738)
+(15,881)
+421,966
+Income tax expense
+(56,850)
+Profit for the year
+365,116
+Other segment information:
+Depreciation and amortisation
+11,031
+7,381
+13,138
+108
+27,099
+Capital expenditure
+17,386
+21,020
+4,454
+173
+43,033
+2,822
+347,014
+77,165
+186,946
+(3,923)
+(238,698)
+Impairment (losses)/gains on assets
+(96,812)
+(46,644)
+(8,374)
+1,014
+(150,816)
+150,474
+Operating profit
+150,474
+77,165
+2,359
+416,944
+Share of results of associates and joint ventures
+5,022
+5,022
+Profit before taxation
+186,946
+100,374
+6,049
+842,352
+Annual Report 2023
+243
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(g) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control the
+activities of the Group, directly or indirectly, including members of the board of directors and the board of supervisors, and
+executive officers.
+The aggregate compensation of key management personnel is as follows:
+Salaries and benefits
+2023
+2022
+In RMB'000
+12,258
+In RMB'000
+21,212
+The above remuneration before tax payable to key management personnel for 2022 represents the total amount of their
+annual remunerations, which includes the amount disclosed in the 2022 annual report.
+The total compensation packages for the Chairman of the Board of Directors, President, Executive Directors, and other
+Senior Management members have not been finalised in accordance with the regulations of the PRC relevant authorities.
+The total remuneration not yet accrued is not expected to have a significant impact on the Group's 2023 consolidated
+financial statements. The total compensation packages will be further disclosed when determined by the relevant
+authorities.
+Related parties of the Group include key management personnel of the Group and their close relatives, as well as
+companies controlled, jointly controlled or significantly influenced by key management personnel or their close relatives.
+In 2023, there were no material transactions and balances with key management personnel individually or in the aggregate
+(2022: Immaterial). The Group entered into banking transactions with key management personnel in the ordinary course of
+business.
+Transactions between the Group and the aforementioned parties were conducted in the ordinary course of business under
+normal terms and conditions and priced based on market rates.
+0
+0
+6
+36,094,727
+Other segment information:
+Credit commitments
+1,861,309
+1,109,736
+2,971,045
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+The aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMBO.21 million as at 31 December 2023 (31 December 2022:
+RMB11.32 million).
+248 Annual Report 2023
+44
+608
+32
+4
+2023
+2022
+17
+4
+(c) Operating leases
+The Bank's aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties
+according to the relevant rules of the NFRA was RMB64.24 million as at 31 December 2023 (31 December 2022:
+RMB195.17 million).
+The transactions between the Group and the aforementioned parties were conducted in the ordinary course of business
+under normal terms and conditions and priced based on market rates.
+244
+82,951
+6.78%
+50,879
+5.89%
+Loans and advances to customers
+19,776
+0.08%
+24,210
+Reverse repurchase agreements
+0.11%
+10,494
+13.93%
+10,852
+12.44%
+Due to banks and other financial institutions
+341,658
+10.14%
+240,742
+Derivative financial assets
+Total liabilities
+19.06%
+19.55%
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(h) Annuity fund
+Apart from the obligations for defined contributions to the annuity fund established by the Bank, annuity fund held A
+shares of the Bank with market value of RMB38.14 million as at 31 December 2023 (31 December 2022: Nil), and bonds
+issued by the Bank of RMB292.72 million as at 31 December 2023 (31 December 2022: RMB527.91 million).
+(i) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the reporting year, the Group entered into extensive banking transactions with these state-owned entities including, but
+not limited to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of
+intermediary services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and
+the sale, purchase, and leasing of properties and other assets.
+The transactions with state-owned entities are activities conducted in the ordinary course of business under normal terms
+and conditions and priced based on market rates, and the dealings of the Group have not been significantly or unduly
+affected by the fact that the Group and those state-owned entities are ultimately controlled or owned by the Government.
+The Group has also established pricing policies for products and services and such pricing policies do not depend on
+whether or not the customers are state-owned entities.
+(j) Proportion of major related party transactions
+227,301
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements. When
+calculating the proportion of related party transactions, transactions with the subsidiaries are excluded.
+Financial investments
+3,239,639
+31 December 2023
+Balance Percentage
+27.34%
+Percentage
+2,640,624
+25.07%
+Due from banks and other financial institutions
+218,284
+31 December 2022
+Balance
+Management monitors the operating results of the Group's operating segments separately for the purpose of making
+decisions about resources allocation and performance assessment. Segment information is prepared in conformity with the
+accounting policies adopted for preparing and presenting the financial statements of the Group.
+89,531
+36,005,196
+179,219
+187,093
+52,740
+5,668
+424,720
+Income tax expense
+(62,610)
+Profit for the year
+362,110
+Other segment information:
+Depreciation and amortisation
+10,543
+13,105
+2,781
+111
+26,540
+Capital expenditure
+Profit before taxation
+4,396
+4,396
+Share of results of associates and joint ventures
+Operating expenses
+(97,437)
+(121,364)
+(16,812)
+(3,738)
+(239,351)
+Impairment losses on assets
+(112,259)
+13,255
+(38,557)
+(1,039)
+(182,677)
+Operating profit
+179,219
+187,093
+52,740
+1,272
+420,324
+(30,822)
+16,618
+3,501
+139
+27,976
+18,185
+293,887
+Other non-current assets (ii)
+45,386
+20,133
+5,610
+9,649
+141,504
+80,778
+101,117
+Total assets
+39,610,146
+Segment liabilities
+15,448,837
+15,325,115
+5,039,830
+191,414
+Unallocated assets
+Unallocated liabilities
+106,222
+65,790
+33,513
+31 December 2022
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Property and equipment
+Other
+Segment assets
+14,683,048
+8,659,449
+15,992,193
+174,339
+39,509,029
+Including: Investments in associates and joint ventures
+65,790
+Total
+7.55%
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions for its own accounts or on
+behalf of customers.
+Loans and advances to customers
+3,240
+1,336
+Derivative financial assets
+8,058
+7,767
+Due to banks and other financial institutions
+336,930
+238,492
+Repurchase agreements
+3,400
+6,200
+Derivative financial liabilities
+7,582
+7,409
+Due to customers
+10,420
+49,410
+79,687
+222,649
+212,218
+11,813
+2023
+2022
+1,397
+421
+70
+1,833
+49
+658
+Huijin holds equity interests in certain other banks and financial institutions under the direction of the State Government.
+The Group entered into transactions with these banks and financial institutions in the ordinary course of business under
+normal commercial terms and the transactions were priced based on market rates. Management considers that these banks
+and financial institutions are competitors of the Group. Details of major transactions conducted with these banks and
+financial institutions are as follows:
+646
+31 December
+2023
+2022
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Reverse repurchase agreements
+821,752
+641,606
+31 December
+19,374
+Credit commitments
+8,821
+123
+8
+Annual Report 2023
+241
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(c) National Council for Social Security Fund of the People's Republic of China
+National Council for Social Security Fund (the "SSF") is a public institution managed by the MOF. It is the management and
+operating organisation of the national social security fund. As at 31 December 2023, the SSF held approximately 5.38%
+(31 December 2022: approximately 5.72%) of the Bank's issued share capital. The Group entered into banking transactions
+with the SSF in the ordinary course of business under normal commercial terms and the transactions were priced based on
+market rates. Details of the major transactions are as follows:
+Balances at end of the year:
+Due to customers
+Transactions during the year:
+Interest expense on amounts due to customers
+(d) Subsidiaries
+31 December
+31 December
+2023
+2022
+Interest expense on amounts due to customers
+2
+0
+Interest expense on repurchase agreements
+Transactions during the year:
+2023
+2022
+Interest income on debt securities purchased
+27,829
+16,184
+Interest income on amounts due from banks and other financial institutions
+1,554
+7,026
+1,055
+87
+12
+Interest income on loans and advances to customers
+70
+37
+Interest expense on amounts due to banks and other financial institutions
+2,539
+2,191
+Interest income on reverse repurchase agreements
+19,015
+12,009
+51,083
+In the opinion of management, the Group has made adequate allowance for any probable losses based on the current facts
+and circumstances, and the ultimate outcome of these lawsuits and arbitrations will not have any significant impact on the
+financial position or operations of the Group.
+(e) Redemption commitments of government bonds and securities underwriting
+commitments
+As an underwriting agent of the MOF, the Bank underwrites certain PRC government bonds and sells the bonds to the
+general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to maturity. The
+redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to the redemption
+date. The MOF will not provide funding for the early redemption of these PRC government bonds on a back-to-back basis
+but is obliged to repay the principal and the respective interest upon maturity. The redemption obligations, which represent
+the nominal value of government bonds underwritten and sold by the Group, but not yet matured as at 31 December 2023
+were RMB57,256 million (31 December 2022: RMB62,140 million). Management expects that the redemption obligations of
+these PRC government bonds by the Bank prior to maturity will not be material.
+As at 31 December 2023, the Group has not had any outstanding securities underwriting commitments (31 December
+2022: Nil).
+(f) Designated funds and loans
+Designated funds
+Designated loans
+31 December
+31 December
+2023
+2022
+3,420,373
+3,857,252
+3,857,046
+3,420,106
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third
+parties as designated by them. The credit risk remains with the trustors.
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrust agreements signed by the Group and the trustors. The Group does not bear any risk.
+The Group is involved in lawsuits and arbitrations during its normal course of operations. As at 31 December 2023, there
+were a number of legal proceedings and arbitrations outstanding against the Bank and/or its subsidiaries with a total
+claimed amount of RMB6,659 million (31 December 2022: RMB4,738 million).
+(d) Legal proceedings and arbitrations
+129,075
+124,471
+The Group acts as a lessor principally through operating leases undertaken by its subsidiary ICBC Leasing. Under irrevocable
+operating lease contracts, the expected undiscounted minimum lease payments receivable by the Group in the future period
+amounted to:
+Within one year
+Over one year but within two years
+Over two years but within three years
+Over three years but within five years
+Over five years
+31 December
+2023
+31 December
+2022
+Annual Report 2023
+18,228
+16,037
+15,380
+14,878
+14,627
+23,914
+24,864
+51,414
+57,258
+16,946
+239
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Central Huijin Investment Ltd. ("Huijin") is a wholly-owned subsidiary of China Investment Corporation, and in accordance
+with the authorisation of the State Government, Huijin makes equity investments in major state-owned financial enterprises,
+and shall, to the extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf
+of the State Government in accordance with applicable laws, to achieve the goal of preserving and enhancing the value of
+state-owned financial assets. Huijin does not conduct any other businesses or commercial activities nor intervene in the day-
+to-day business operations of the financial enterprises in which it invests. Huijin was established on 16 December 2003 with
+a total registered and paid-in capital of RMB828,209 million. As at 31 December 2023, Huijin directly owned approximately
+34.79% (31 December 2022: approximately 34.71%) of the issued share capital of the Bank.
+As at 31 December 2023, bonds issued by Huijin ("the Huijin Bonds") held by the Group were of an aggregate face value
+of RMB40,427 million (31 December 2022: RMB50,237 million), with terms ranging from one to thirty years and coupon
+rates ranging from 2.44% to 4.20%. The Huijin Bonds are government-backed bonds, short-term bills and medium-term
+notes. The Group's subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance with
+relevant regulatory and the corporate governance requirements of the Group.
+240
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and the transactions were priced based on market rates. Details of the major transactions are as follows:
+Balances at end of the year:
+Debt securities purchased
+(b) Central Huijin Investment Ltd.
+Loans and advances to customers
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+31 December
+31 December
+2023
+2022
+41,036
+Due to customers
+64,000
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in Note 48(i) "Transactions with state-owned entities in the PRC".
+53,525
+(g) Fiduciary activities
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included
+in "net fee and commission income" set out in Note 7. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+48. RELATED PARTY DISCLOSURES
+In addition to the transactions detailed elsewhere in these consolidated financial statements, the Group had the following
+transactions with related parties during the reporting year:
+(a) The MOF
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2023, the MOF directly owned approximately 31.14% (31 December
+2022: approximately 31.14%) of the issued share capital of the Bank. The Group entered into banking transactions with
+the MOF in its ordinary course of business. Details of the major transactions are as follows:
+Balances at end of the year:
+The PRC government bonds and the special government bond
+46,817
+Transactions during the year:
+31 December
+31 December
+2023
+2022
+2,365,572
+1,936,670
+2023
+2022
+Interest income on the government bonds
+48,000
+2023
+2022
+other financial institutions
+Interest expense on amounts due to customers
+41
+70
+46
+41
+Transactions between the Group and the aforementioned parties were conducted under normal commercial terms and
+conditions and priced based on market rates.
+(f) Joint ventures and affiliates
+Balances at end of the year:
+Loans and advances to customers
+Due to banks and other financial institutions
+Due to customers
+Transactions during the year:
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+31 December
+2023
+Interest expense on amounts due to banks and
+1
+80 - 100
+49
+Derivative financial liabilities
+2,271
+3,108
+Credit commitments
+4,293
+5,085
+2023
+2022
+31 December
+Transactions during the year:
+274
+344
+Interest income on amounts due from banks and
+other financial institutions
+Interest income on reverse repurchase agreements
+Interest income on loans and advances to customers
+50
+1
+174
+Interest income on debt securities purchased
+2022
+0.33%
+249
+5,131
+Percentage
+6.08%
+0.68%
+Amount
+66,465
+4,998
+Percentage
+5.20%
+0.85%
+Annual Report 2023
+245
+Interest expense
+Notes to the Consolidated Financial Statements
+49. SEGMENT INFORMATION
+(a) Operating segments
+The Group is organised into different operating segments, namely corporate banking, personal banking and treasury
+operations, based on internal organisation structure, management requirements and internal reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government
+agencies and financial institutions. The products and services include corporate loans, trade financing, deposit-taking
+activities, corporate wealth management services, custody activities and various types of corporate intermediary services.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services.
+Treasury operations
+(In RMB millions, unless otherwise stated)
+1,568
+85,399
+Amount
+1.08%
+Derivative financial liabilities
+9,853
+12.92%
+10,517
+10.92%
+Due to customers
+94,915
+Interest income
+0.28%
+0.21%
+Credit commitments
+11,319
+0.36%
+13,906
+0.47%
+2023
+2022
+62,031
+Other
+1,089
+2,250
+Due to banks and other financial institutions
+171,189
+187,431
+Repurchase agreements
+1,904
+2,581
+Derivative financial liabilities
+6,827
+8,680
+Credit commitments
+42,500
+60,370
+2023
+2022
+Transactions during the year:
+Interest income on financial investments
+2,048
+6,183
+4,003
+Derivative financial assets
+79,639
+2,306
+2,028
+31 December
+31 December
+2023
+2022
+Balances at end of the year:
+Financial investments
+1,495
+Due from banks and other financial institutions
+41,126
+42,242
+330,455
+425,329
+12,002
+15,423
+Loans and advances to customers
+108,761
+Reverse repurchase agreements
+Interest income on amounts due from banks and other financial institutions
+3,094
+1,666
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Reverse repurchase agreements
+11,279
+11,265
+6,066
+4,652
+2022
+3,264
+Loans and advances to customers
+4,278
+3,815
+Derivative financial assets
+2,436
+3,085
+Due to banks and other financial institutions
+4,120
+1,469
+Due to customers
+2023
+31 December
+Interest income on reverse repurchase agreements
+12
+70
+Interest income on loans and advances to customers
+3,021
+1,359
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on repurchase agreements
+3,737
+31 December
+3,086
+22
+Fee and commission income
+4,611
+4,108
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+242 Annual Report 2023
+(e) Associates and affiliates
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+50
+3,400
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2,129,970
+21.53%
+4,798,204
+20.68%
+Pearl River Delta
+4,055,692
+15.54%
+3,621,603
+15.60%
+Bohai Rim
+4,285,481
+16.44%
+3,816,621
+16.45%
+Central China
+4,064,415
+15.58%
+3,561,290
+15.34%
+Western China
+4,766,575
+18.27%
+4,225,369
+18.20%
+Northeastern China
+1,082,666
+5,616,187
+Yangtze River Delta
+3.22%
+747,980
+128,358
+43,420,076
+38,493,712
+Credit commitments
+Maximum credit risk exposure
+3,184,180
+2,971,045
+46,604,256
+41,464,757
+(ii) Risk concentrations
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or
+have comparable economic features. In addition, different geographic areas and industrial sectors have their unique
+characteristics in terms of economic development, and could present a different credit risk.
+Annual Report 2023 255
+4.15%
+Notes to the Consolidated Financial Statements
+(1) Loans and advances to customers
+By geographical distribution
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by geographical
+distribution is as follows:
+31 December 2023
+31 December 2022
+Amount
+Percentage
+Amount
+Percentage
+Head Office
+754,746
+2.89%
+(In RMB millions, unless otherwise stated)
+107,719
+978,246
+Overseas and other
+1,014,138
+976,460
+Wholesale and retail
+757,022
+608,722
+Finance
+635,529
+584,594
+Construction
+462,957
+392,535
+Science, education, culture and sanitation
+410,202
+368,149
+Mining
+340,250
+263,109
+Other
+458,345
+383,705
+Subtotal for corporate loans
+16,145,204
+13,826,966
+Personal mortgage and business loans
+7,635,604
+Real estate
+1,313,234
+1,690,911
+Production and supply of electricity, heating, gas and water
+1,460,720
+5.60%
+Total
+26,086,482
+100.00%
+1,461,063
+23,210,376
+6.30%
+100.00%
+By industry
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by industry is as follows:
+31 December
+31 December
+4.21%
+2023
+Transportation, storage and postal services
+3,782,387
+3,357,175
+Manufacturing
+2,454,786
+2,068,044
+Leasing and commercial services
+2,396,063
+1,980,076
+Water, environment and public utility management
+1,742,614
+1,531,163
+2022
+7,362,031
+Other
+8,806,849
+The principal or interest of loan is past due more than 90 days (not inclusive);
+(ii)
+(iii)
+The retail business borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the
+Group to actions such as liquidation against collateral.
+Impairment assessment
+A financial asset is generally considered to be credit-impaired if:
+it has been overdue for more than 90 days (not inclusive);
+in light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+it is probable that the borrower will be insolvent or carry out other financial restructurings;
+due to serious financial difficulties, the financial asset cannot continue to be traded in an active market; and
+there are other objective evidences that indicate the financial asset is impaired.
+Parameters, assumptions and estimation techniques
+Loss allowance for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL depending on
+whether a significant increase in credit risk on that financial instrument has occurred since initial recognition and whether
+an asset is considered to be credit-impaired. ECL for loans and advances to customers, other than those corporate loans
+and advance to customers which are credit-impaired, is measured using the risk parametric modelling method. The key
+parameters include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"), considering
+the time value of money.
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the IRB approach under the New Basel Capital Accord,
+taking the forward-looking information into account and deducting the prudential adjustment to reflect the debtor's point-
+in-time PD under the current macro-economic environment.
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. LGD depends on the
+type of counterparty, the method and priority of the recourse, and the type of collateral, taking the forward-looking
+adjustments into account.
+EAD refers to the total amount of on- and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+During the year, based on the requirements of the Administrative Measures for the Implementation of the Expected Credit
+Loss Method of Commercial Banks, the Group conducted internal and external verification and re-verification of the
+measurement of expected credit losses, and continued to optimize the model according to the results of the re-verification,
+including updating the criteria of financial instruments stage, forward-looking information, model parameters, risk grouping,
+and other.
+Annual Report 2023 253
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The calculation of impairment loss on credit-impaired corporate loans and advance to customers applies the discounted cash
+flow method. If there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the
+loss is measured as the difference between the asset's gross carrying amount and the present value of estimated future cash
+flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying
+amount. The impairment loss is recognised in the consolidated statement of profit or loss. In determining allowances, the
+following factors are considered:
+the sustainability of the borrower's business plan;
+the borrower's ability to improve performance when a financial difficulty arises;
+the estimated recoverable cash flows from projects and liquidation;
+(i)
+Write-offs of loan; or
+The Group defines a retail business borrower as in default when any single credit asset of a borrower meets one or more of
+the following criteria:
+(iii) The corporate borrower has the matters refer to in (i) or (ii) above in other financial institutions.
+The Bank maintains a dual-reporting risk management structure at the branch level. Under this structure, the risk
+management department of the branches report to both the Group risk management department and the management of
+the branches.
+Annual Report 2023
+251
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(a) Credit risk
+Definition and scope
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also
+give rise to credit risk. The Group's credit risk is mainly attributable to its credit assets, due from banks and other financial
+institutions and financial investments.
+The Group is also exposed to credit risk in other areas. The credit risk arising from derivative financial instruments is limited
+to derivative financial assets recorded in the consolidated statement of financial position. In addition, the Group provides
+guarantees for customers and may therefore be required to make payments on their behalf. These payments would be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk
+similar to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Credit risk assessment method
+Staging of financial instruments
+The Group classifies financial instruments into three stages and makes provisions for expected credit loss accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition and
+whether the assets have been credit-impaired. Refer to Note 4(10) Impairment of financial assets for the definition of the
+three stages.
+the availability of other financial support and the realisable value of collateral; and
+Classification of credit risk exposures
+Significant increase in credit risk
+The assessment of significant increase in credit risk since initial recognition is performed at least on a quarterly basis for
+financial instruments held by the Group. The Group takes into consideration all reasonable and supportable information
+(including forward-looking information) that reflects significant change in credit risk for the purposes of staging of financial
+instruments. The main considerations are regulatory and operating environment, internal and external credit risk rating,
+debt-servicing capacity, operating capabilities, contractual terms, and repayment behaviour and willingness. The Group
+compares the risk of default of a single financial instrument or a portfolio of financial instruments with similar credit risk
+characteristics as at the end of the reporting period and its risk of default at the date of initial recognition to determine
+changes in the risk of default over the expected lifetime of a financial instrument or a portfolio of financial instruments.
+In determining whether credit risk of a financial instrument has increased significantly since initial recognition, the Group
+considers factors indicating whether the probability of default has risen above threshold, the background for financing
+have been authenticated, the financial instrument has been past due for more than 30 days, the loan has been modified in
+payment term of principal or interest, any significant negative issue has been arisen and any other indicators of increase in
+risk have been noticed.
+The Group has further facilitated the deferral in principal repayment and interest payment credit arrangements for the
+inclusive loans to micro and small-sized businesses in accordance with the government's regulations. The Group classifies
+the credit risk based on the actual situation of the borrower and the judgement of the substantive risk of the business
+for those loans with deferred principal repayment and interest payment. However, the temporary deferral in principal
+repayment and interest payment is not considered as an automatic trigger event for a significant increase in credit risk.
+252
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Definition of default
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria:
+(i)
+The principal or interest of any credit business is past due more than 90 days (not inclusive) to the Group;
+(ii)
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral; or
+The Group classifies credit risk exposures of expected credit losses with sufficient information by considering factors such
+as internal ratings-based ("IRB") segmentation, product types, customer types, industry risk characteristics, and response to
+macro-economic changes.
+7,563,132
+the timing of the expected cash flows.
+Forward-looking information contained in ECL
+Balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+31 December
+31 December
+2023
+2022
+3,975,594
+3,361,552
+1,116,717
+1,192,532
+75,339
+1,224,257
+87,205
+864,122
+25,386,933
+22,591,676
+Financial investments measured at FVTPL
+578,595
+575,165
+Financial investments measured at FVTOCI
+2,148,073
+Financial investments measured at amortised cost
+As at the end of the reporting period, the maximum credit risk exposure of the Group without taking into account any
+collateral and other credit enhancements is set out below:
+(i) Maximum exposure to credit risk without taking into account of any collateral and other
+credit enhancements
+The Group monitors the market value of the collateral and when needed, require additional collateral according to
+agreements. The Group disposes of repossessed assets in an orderly manner.
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be appraised and
+confirmed by the Group or valuation agencies engaged by the Group. The value of collateral should adequately cover
+the outstanding balance of loans. The Group takes into consideration the types of collateral, state of condition, liquidity,
+price volatility and realisation cost to determine the loan-to-value ratio of collateral. All collateral has to be registered in
+accordance with the relevant laws and regulations. The credit officers inspect the collateral and assess the changes in the
+value of collateral regularly.
+The assessment of significant increase in credit risk and the calculation of ECL incorporate forward-looking information. The
+Group has performed historical data analysis and identified Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"),
+Broad Money Supply ("M2"), Consumer Confidence Index and other macro-economic indicators as impacting the ECL for
+each portfolio. The impact of these economic variables on the PD and LGD has been determined by performing statistical
+regression analysis to understand the correlations among the historical changes of the economic variables, PD and LGD. The
+impact of these economic variables on the PD and LGD varies according to different types of business. Forecasts of these
+economic variables are carried out at least quarterly by the Group to provide the best estimate view of the economy over
+the next year.
+When calculating the weighted average ECL provision, the Group determines the optimistic, neutral and pessimistic
+scenarios and their weightings through a combination of macro-statistical analysis and expert judgement. The optimistic and
+pessimistic scenarios are of comparable weightings, of which, the weighting of neutral scenario is slightly higher than that
+of the other two scenarios. The weightings of the scenarios are consistent with those as at 31 December 2022.
+As at 31 December 2023, the Group has taken into account different macro-economic scenarios, combined with the impact
+of factors such as effect of prior period base data on economic development trends, and made forward-looking forecasts
+of macro-economic indicators. Of which, the year-on-year GDP growth rate used to estimate ECL under each scenario is as
+follows: 5.0% under neutral scenario, 6.3% under optimistic scenario, and 4.0% under pessimistic scenario.
+The Group has carried out sensitivity analysis of macro-economic indicators used in forward-looking measurement. As at 31
+December 2023, when the key economic indicators in the neutral scenario moved up or down by 10%, the ECL changed by
+no more than 5% (31 December 2022: no more than 5%).
+Financial assets contract modification
+The Group might modify the terms of loan with a customer based on commercial renegotiations, or when the customer is
+in financial difficulty, with a view to maximising the recovery of loan.
+Such modifications include restructuring the loan to provide extended payment term arrangements, payment holidays
+or payment forgiveness. Restructuring policies and practices are based on indicators or criteria which, in the judgement
+of management, indicate that payment will most likely continue, and these policies and practices are reviewed regularly.
+Such restructures are especially common for medium-term and long-term loans. During the year, based on the rules on
+risk classification of financial assets of commercial banks, the group optimized and adjusted the criteria of assessment of
+financial difficulty and the identification of rescheduled loans.
+During the year, based on the requirement of China's National Financial Regulatory Administration Reducing the Interest
+Rate of First Residential Mortgages, the Group adjusted the interest rate of conforming stocking residential mortgages. The
+accounting policy refer to Note 4(11) Modification of financial assets contracts.
+The following table includes carrying amount of rescheduled loans and advance to customers:
+Rescheduled loans and advances to customers
+Including: Impaired loans and advances to customers
+254
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to
+identify impairment through the combined effect of several events. The impairment losses are evaluated at the end of each
+reporting period unless there are other unforeseen circumstances.
+Annual Report 2023
+2023
+82,723
+15,607
+31 December
+2022
+26,229
+6,425
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Collateral and other credit enhancements
+The amount and type of collateral required depend on the assessment of credit risk of the counterparty. Guidelines are in
+place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills and marketable securities. As part of certain reverse repurchase
+agreements, the Group has received collateral that it is allowed to sell or repledge in the absence of default by their
+owners.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2023, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB17,432,861 million (31 December 2022:
+RMB14,975,751 million), of which credit exposure covered by collateral amounted to RMB5,344,849 million (31 December
+2022: RMB4,680,161 million).
+Personal loans are mainly collateralised by residential properties. As at 31 December 2023, the gross carrying amount of
+personal loans amounted to RMB8,653,621 million (31 December 2022: RMB8,234,625 million), of which credit exposure
+covered by collateral amounted to RMB7,719,465 million (31 December 2022: RMB7,359,369 million).
+31 December
+Other
+1,018,017
+872,594
+540,296
+1,065,147
+Corporate entities
+87,041
+566,522
+67,834
+721,397
+540,169
+2,120,553
+8,697,005
+11,357,727
+Financial
+investments
+31 December 2022
+Financial
+investments
+Financial
+investments
+measured at
+measured at
+measured at
+FVTPL
+FVTOCI
+amortised cost
+Governments and central banks
+123,419
+982,051
+6,373,902
+293,463
+231,388
+Banks and other financial institutions
+811,946
+257
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(2) Debt securities investments
+By issuers
+The following tables present an analysis of the Group's debt securities investments (excluding accrued interest) by types of
+issuers and investments:
+Financial
+investments
+31 December 2023
+Financial
+investments
+Financial
+investments
+measured at
+measured at
+Total
+7,479,372
+measured at
+FVTOCI
+amortised cost
+Total
+Governments and central banks
+187,365
+1,076,400
+7,495,472
+8,759,237
+Policy banks
+34,375
+184,168
+593,403
+FVTPL
+Annual Report 2023
+Policy banks
+211,905
+Policy banks
+732,015
+55,943
+8,934
+11,754
+3,300
+Banks and other financial institutions
+409,850
+380,700
+47,941
+173,791
+52,865
+811,946
+1,065,147
+Corporate entities
+159,202
+5,943
+121,625
+43,359
+721,397
+3,762,208
+6,967,323
+126,088
+359,994
+142,114
+11,357,727
+Total
+8,759,237
+42,590
+52,824
+63,270
+522,014
+762,209
+Banks and other financial institutions
+Corporate entities
+231,085
+349,923
+506,021
+1,087,029
+110,456
+560,850
+63,654
+734,960
+493,250
+28,290
+2,104,729
+10,063,570
+By rating
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies in the countries where the issuers of debt securities are
+located. The carrying amounts of debt securities investments (excluding accrued interest) analysed by rating as at the end of
+the reporting period are as follows:
+31 December 2023
+Unrated
+AAA
+AA
+A
+Below A
+Governments and central banks
+2,461,141
+6,139,412
+7,465,591
+284,031
+19,543
+91,177
+26,086,482
+23,210,376
+Overdue loans
+The composition of the Group's gross overdue loans (excluding accrued interest) by collateral is as follows:
+31 December 2023
+Overdue
+Overdue for
+for 1 to
+91 days to
+90 days
+1 year
+Overdue
+for 1 to
+3 years
+Overdue
+for over
+3 years
+Total
+Unsecured loans
+31,987
+33,514
+29,897
+7,368
+102,766
+Guaranteed loans
+13,790
+19,151
+16,805
+2,467,572
+2,979,342
+9,977,153
+10,444,304
+Subtotal for personal loans
+8,653,621
+8,234,625
+Discounted bills
+1,287,657
+1,148,785
+Total for loans and advances to customers
+26,086,482
+23,210,376
+256
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+11,400
+By collateral
+Unsecured loans
+Guaranteed loans
+Loans secured by mortgages
+Pledged loans
+Total
+31 December
+31 December
+2023
+2022
+9,947,491
+8,221,000
+2,715,345
+2,544,651
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by collateral is as
+follows:
+61,146
+Loans secured by mortgages
+58,876
+33,114
+22,052
+30,694
+3,304
+89,164
+Guaranteed loans
+11,219
+16,734
+20,007
+5,674
+53,634
+Loans secured by mortgages
+Unsecured loans
+44,182
+38,550
+9,999
+130,526
+Pledged loans
+5,287
+2,928
+1,926
+566
+10,707
+Total
+93,802
+79,509
+37,795
+The Group has clearly defined the roles of each department in monitoring financial risks within the Group. The Credit
+Management Department monitors credit risk, the Risk Management Department together with the Asset and Liability
+Management Department monitor market and liquidity risks, and the Internal Control and Compliance Department
+monitors operational risk. The Risk Management Department is primarily responsible for establishing and coordinating a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+Total
+3 years
+48,272
+37,285
+14,429
+158,862
+Pledged loans
+2,583
+952
+3,131
+984
+7,650
+Total
+107,236
+3 years
+101,889
+34,181
+330,424
+31 December 2022
+Overdue
+Overdue for
+for 1 to
+91 days to
+Overdue
+for 1 to
+Overdue
+for over
+90 days
+1 year
+87,118
+258
+The President supervises risk management and reports directly to the Board. He chairs two management committees
+including the Risk Management Committee and the Asset and Liability Management Committee, which set the risk
+management strategies and appetite, evaluate and formulate risk management policies and procedures, and make
+recommendations through the President to the Risk Management Committee of the Board. The Chief Risk Officer assists
+the President to supervise the Bank's risk management and make decisions.
+50. FINANCIAL RISK MANAGEMENT
+2,216
+27,099
+Capital expenditure
+4,125
+3,120
+2,545
+3,294
+2,926
+2,936
+882
+23,205
+43,033
+Annual Report 2023
+249
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2023
+Chinese mainland (HO and domestic branches)
+Head
+Yangtze
+Pearl
+Central
+Western
+Northeastern
+Overseas
+1,538
+4,194
+3,617
+3,927
+33,312
+416,944
+Share of results of associates and
+joint ventures
+Profit before taxation
+5,022
+(16,378)
+95,935
+60,159
+104,324
+57,560
+70,825
+Office
+11,207
+5,022
+.
+421,966
+Income tax expense
+(56,850)
+Profit for the year
+365,116
+Other segment information:
+Depreciation and amortisation
+4,719
+4,093
+2,795
+38,334
+11,207
+River Delta
+Bohai Rim
+298,878
+Other non-current assets (ii)
+17,001
+7,087
+6,253
+6,837
+8,392
+9,998
+2,338
+18,756
+(170)
+76,492
+Unallocated assets
+104,669
+Total assets
+44,697,079
+Liabilities by geographical areas
+5,554,090
+9,781,890
+6,342,124
+10,346,856
+4,965,877
+5,207,532
+1,986,209 1,012,218
+(4,343,557)
+175,441
+7,996
+21,517
+18,074
+China
+China
+China
+and other
+Eliminations
+Total
+Assets by geographical areas
+8,502,997
+10,215,437
+6,993,931
+6,680,826
+4,946,259
+River Delta
+5,743,425
+4,255,879
+(4,343,557)
+44,592,410
+Including: Investments in associates and
+joint ventures
+64,778
+64,778
+Property and equipment
+11,663
+31,346
+13,544
+19,297
+1,597,213
+40,853,239
+70,825
+104,324
+Rim
+China
+China
+China
+and other
+Eliminations
+Total
+External net interest income/(expense)
+325,228
+61,311
+63,780
+(12,379)
+71,307
+96,072
+4,604
+45,090
+655,013
+Internal net interest (expense)/income
+(349,200)
+73,626
+37,282
+158,627
+35,925
+25,492
+23,176
+River Delta
+River Delta
+Office
+Overseas
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Geographical information
+The Group operates principally in Chinese mainland, and also has branches or subsidiaries operating outside Chinese
+mainland. The distribution of the geographical areas is as follows.
+Chinese mainland (Head Office and domestic branches)
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+Bohai Rim:
+Central China:
+Western China:
+Northeastern China:
+Overseas and other
+the HO business divisions (including institutions directly managed by the HO and its offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+(4,928)
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+including Liaoning, Heilongjiang, Jilin and Dalian.
+Branches located outside Chinese mainland, domestic and overseas subsidiaries, and investments in associates and joint
+ventures.
+2023
+Chinese mainland (HO and domestic branches)
+Head
+Yangtze
+Pearl
+Bohai
+Central
+Western Northeastern
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+57,560
+Net fee and commission income
+21,597
+Operating expenses
+(26,727)
+(37,168)
+(27,117)
+(38,395)
+(34,320)
+(39,076)
+(13,242)
+(22,711)
+58
+(238,698)
+Impairment losses on assets
+(14,547)
+(22,613)
+(27,990)
+(19,273)
+(25,326)
+(22,577)
+(5,980)
+(12,510)
+(150,816)
+Operating profit
+(16,378)
+95,935
+60,159
+806,458
+(58)
+68,533
+30,429
+14,911
+17,021
+10,576
+11,680
+2,739
+12,232
+(1,505)
+119,357
+Other income/(expense), net (i)
+18,762
+(818)
+(707)
+30,106
+(1,277)
+(766)
+(90)
+16,139
+1,447
+32,088
+Operating income
+24,896
+155,716
+115,266
+161,992
+117,206
+132,478
+(602)
+Unallocated liabilities
+67,252
+40,920,491
+250
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Chinese mainland (HO and domestic branches)
+Head
+Yangtze
+Pearl
+Central
+Western
+Northeastern
+Office
+River Delta
+River Delta
+Bohai Rim
+China
+China
+China
+Overseas
+and other
+Eliminations
+Total
+Assets by geographical areas
+8,069,477
+9,418,551
+33,513
+12,509
+1,099
+3,547
+60,079
+61,841
+11,878
+37,751
+424,720
+Income tax expense
+(62,610)
+Profit for the year
+362,110
+Other segment information:
+Depreciation and amortisation
+4,534
+6,583,520
+3,946
+3,972
+3,511
+4,206
+1,471
+2,204
+26,540
+Capital expenditure
+3,758
+3,579
+2,796
+2,933
+3,292
+2,696
+95,094
+6,065,352
+5,174,047
+39,610,146
+Liabilities by geographical areas
+5,335,535
+9,208,450
+5,833,211 9,263,328
+4,599,017
+4,842,967 1,819,550
+1,138,111
+(6,034,973) 36,005,196
+Unallocated liabilities
+89,531
+Total liabilities
+36,094,727
+Other segment information:
+Credit commitments
+1,157,911
+1,378,232
+931,972 1,106,387
+624,496
+680,902
+160,799
+796,832
+(3,866,486)
+2,971,045
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+Total assets
+101,117
+Unallocated assets
+80,778
+1,469,644
+4,366,642 (6,034,973)
+39,509,029
+Including: Investments in associates and
+joint ventures
+65,790
+65,790
+Property and equipment
+12,750
+32,205
+13,678
+19,853
+4,396,769
+18,542
+8,403
+166,216
+293,887
+Other non-current assets (ii)
+16,623
+7,274
+6,149
+6,812
+8,359
+9,769
+2,469
+23,323
+22,240
+59,687
+98,133
+257
+External net interest income
+290,613
+77,438
+80,913
+11,062
+77,663
+103,557
+8,725
+42,014
+691,985
+Internal net interest (expense)/income
+(259,518)
+52,414
+18,670
+125,852
+28,413
+18,105
+18,710
+(2,646)
+Net fee and commission income
+42,134
+20,667
+14,954
+17,965
+9,327
+Total
+Eliminations
+and other
+China
+Total liabilities
+Other segment information:
+Credit commitments
+1,140,709 1,742,306
+1,132,348
+1,305,493
+735,849
+878,791
+170,587
+788,274 (4,710,177)
+3,184,180
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+10,437
+2022
+Head
+Yangtze
+Pearl
+Central
+Western Northeastern
+Overseas
+Office
+River Delta
+River Delta
+Bohai Rim
+China
+China
+Chinese mainland (HO and domestic branches)
+2,621
+12,890
+(1,670)
+(22,316)
+68
+(239,351)
+Impairment losses on assets
+(53,708)
+(13,775) (26,978)
+(21,243)
+(20,634)
+(30,262)
+(4,286)
+(11,791)
+(182,677)
+(13,050)
+Operating profit
+98,133
+59,687
+95,094
+60,079
+61,841
+11,878
+33,355
+420,324
+Share of results of associates and joint ventures
+4,396
+4,396
+Profit before taxation
+257
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management system through the Risk Management Committee and the Audit Committee of the Board.
+(34,096) (38,699)
+(26,794)
+129,325
+Other income/(expense), net (i)
+11,096
+(1,992)
+(1,078)
+(1,057)
+(594)
+(1,297)
+(842)
+15,204
+1,602
+21,042
+(37,485)
+Operating income
+148,527
+113,459
+153,822
+114,809
+130,802
+29,214
+67,462
+(68)
+842,352
+Operating expenses
+(30,360)
+(36,619)
+84,325
+Annual Report 2023
+391,268
+25,865,754
+35,191
+Total
+7,479,372
+Policy banks
+700,863
+44,454
+3,222
+30,519
+13,310
+Banks and other financial institutions
+442,644
+412,053
+24,171
+127,208
+80,953
+360
+5,156,655
+2,209,376
+Governments and central banks
+147,031
+1,038
+122,938
+16,923
+6,132
+Due to central banks
+Financial liabilities:
+54,098,114
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Unrated
+AAA
+AA
+A
+Below A
+762,209
+1,087,029
+Corporate entities
+158,706
+420,935
+Total
+Financial assets measured
+at amortised cost
+Cash and balances
+with central banks
+4,042,293
+4,042,293
+Due from banks and
+other financial institutions
+1,120,116
+161
+1,120,277
+(3,399)
+(161)
+(3,560)
+Stage 3
+Due to banks and other financial institutions (iii)
+Stage 2
+Total
+4,214
+101,736
+49,369
+734,960
+3,511,589 6,034,097
+62,126
+289,885
+165,873
+10,063,570
+(iii) Three-stage analysis of financial instruments' risk exposure
+The Group's credit risk stages of financial instruments are as follows:
+31 December 2023
+Stage 1
+Gross carrying amount
+Stage 2 Stage 3
+Provision for ECL
+Stage 1
+Reverse repurchase agreements
+2,509,380
+206,552
+1,542
+1,529
+464
+817
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+100
+36,303,279
+7,357,699
+2,114,125 6,381,103
+2,795,937
+16,847,855
+425,302
+94,479
+806,560
+4,452
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+85,965
+(2,615)
+(2,811,291)
+(38,589)
+(265,245)
+(849,885)
+(593,312)
+(975,680)
+(88,580)
+Cash outflow
+2,801,910
+37,805
+263,153
+849,091
+586,504
+979,392
+34,445
+13,476
+34,944
+247,958
+126,364
+68,186
+Certificates of deposit
+64,357
+668
+3,598
+2,403
+578
+65
+57,045
+Financial liabilities measured at FVTPL
+3,812,273
+17,746
+97,907
+436,973
+177,563
+543,715
+6,649
+Due to customers
+Other
+1,120,786
+673,025
+297,722
+107,640
+32,841
+9,558
+Debt securities issued
+30,354,768
+20,642
+6,916,340
+5,520,110
+1,695,923
+1,920,323
+14,281,430
+378,762
+3,712
+1,183,840
+(97)
+(2,699)
+(31,335)
+(141,609)
+(254,622)
+(705,534)
+Financial assets measured
+(23)
+at FVTOCI
+to customers
+1,155,844
+Financial investments
+2,118,550
+Total
+3,274,394
+Loans and advances
+(672,224)
+(141,586) (251,923)
+(278,715)
+(28,613)
+(309,303)
+709,623
+709,623
+(475)
+(475)
+Loans and advances
+to customers
+21,098,741
+685,365
+Financial investments
+7,591,165
+163
+Total
+34,021,453
+685,528
+321,135 22,105,241
+3,139 7,594,467
+324,274 35,031,255
+10,534
+10,534
+35 1,155,879
+886 2,129,970
+921 3,285,849
+(510)
+(28)
+(i) Maturity analysis of assets and liabilities
+The tables below summarise the maturity profile of the Group's assets and liabilities. The actual remaining maturity of
+the Group's financial instruments may vary significantly from the following analysis. For example, demand deposits from
+customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+31 December 2023
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+One to
+Over
+Undated
+on demand
+one month
+months
+one year
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Reverse repurchase agreements
+Annual Report 2023
+maintaining an efficient internal fund transfer mechanism to ensure sufficient liquidity at branch level.
+(538)
+(4,794)
+(5,304)
+(1,009)
+(3,527)
+(9,330)
+(1,009)
+(3,555)
+(9,868)
+As at 31 December 2023 and 2022, credit risk exposures of credit commitments were mainly classified in Stage 1.
+(b) Liquidity risk
+Liquidity risk is the risk that funds will not be sufficient or raised at a reasonable cost in a timely manner to meet the need
+of asset growth or repayment of debts due, although the Group remains solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+optimising the structure of assets and liabilities;
+maintaining the stability of the deposit base;
+projecting cash flows and evaluating the level of current assets; and
+260
+1,183,840
+-- (1,500)
+-- 1,194,032
+(156,251)
+(259,891)
+(798,377)
+Financial assets measured
+at FVTOCI
+Loans and advances
+(382,235)
+to customers
+Financial investments
+2,136,289
+11,509
+275
+Total
+3,431,837
+1,295,548
+(38,719)
+(2,699)
+(11)
+(97)
+Loans and advances
+to customers
+23,773,666
+Financial investments
+8,840,215
+Total
+38,960,130
+714,114
+2,214
+716,328
+353,465 24,841,245
+3,139 8,845,568
+356,765 40,033,223
+(342,730)
+(156,240)
+(257,031)
+(756,001)
+(36,009)
+11,509
+312
+37 1,295,585
+2,148,073
+3,443,658
+(361)
+Stage 3
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+Financial assets measured
+at amortised cost
+Cash and balances with
+central banks
+3,427,892
+- 3,427,892
+Due from banks and
+other financial institutions
+1,194,032
+Stage 2
+(1,500)
+Stage 1
+Gross carrying amount
+(29)
+(390)
+(4,835)
+(964)
+(3,769)
+(9,568)
+(5,196)
+(964)
+(3,798)
+(9,958)
+Annual Report 2023
+259
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Provision for ECL
+(6,808)
+(794)
+(2,092)
+36,996
+192,730
+8,450,363
+Financial investments measured at amortised cost
+2,230,862
+95,848
+126,760
+38,971
+1,736,925
+Financial investments measured at FVTOCI
+811,957
+8,266
+10,832
+30,975
+359,118
+8,806,849
+Investments in associates and joint ventures
+36,804
+5,658
+174,586
+333,577
+Total assets
+Other
+298,878
+2,135
+674
+161,870
+134,199
+Property and equipment
+64,778
+25,682
+196
+2,096
+761,884
+Financial investments measured at FVTPL
+Financial investments
+25,386,933
+8,133
+168,210
+3,741,187
+Cash and balances with central banks
+Assets:
+Total
+(in RMB
+equivalent)
+(in RMB
+equivalent)
+Other
+HKD
+(in RMB
+equivalent)
+USD
+(in RMB
+equivalent)
+RMB
+31 December 2023
+A breakdown of the assets and liabilities analysed by currency is as follows:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+124,763
+124,395
+4,042,293
+1,612,535
+352,637
+346,152
+690,350
+23,997,794
+Loans and advances to customers
+75,339
+11,378
+7,455
+25,973
+30,533
+Derivative financial assets
+2,340,974
+261,176
+39,665
+427,598
+Due from banks and other financial institutions (i)
+267
+638,216
+2,233,506
+583,968
+1,995,622
+37,512,684
+Total liabilities
+885,894
+79,302
+828,217
+24,334
+569,117
+1,369,777
+29,356
+2,058
+187,762
+1,150,601
+213,141
+40,920,491
+Net long/(short) position
+3,323,117
+3,370,710
+268 Annual Report 2023
+(ii) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(i)
+3,184,180
+183,704
+49,055
+426,002
+2,525,419
+Credit commitments
+3,776,588
+304,823
+(89,236)
+237,884
+33,521,174
+376,941
+434,579
+871,819
+2,250
+4,937
+Financial liabilities measured at FVTPL
+231,374
+4,387,964
+1,128
+243,973
+73,509
+482,444
+3,588,038
+Due to banks and other financial institutions (ii)
+230,246
+Due to central banks
+Liabilities:
+44,697,079
+1,133,040
+494,732
+4
+40,835,801
+55,668
+Derivative financial liabilities
+31,837,835
+385,198
+32,553
+40,857
+208,441
+103,347
+Other
+Debt securities issued
+Due to customers
+Certificates of deposit
+76,251
+9,296
+8,627
+29,765
+28,563
+62,859
+Annual Report 2023
+(1,279)
+(889)
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and interest rate risk arising
+from treasury business positions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches
+between the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk
+in the banking book is disclosed in Note 50(d).
+Market risk is the risk of loss, in respect of the Group's on- and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+(c) Market risk
+2,971,045
+182,555
+490,874
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the foreign exchange exposures arising from currency structural imbalance
+between foreign currency assets and liabilities, and off-balance sheet foreign exchange exposures arising from currency
+derivative transactions.
+682,822
+Total
+Over
+five years
+One to
+five years
+Three
+months to
+one year
+months
+three
+273,992
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios to be
+immaterial.
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major
+market risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other
+non-trading portfolios. The Value-at-risk (VaR) analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a Value-at-risk (VaR) analysis by risk type of the Group's trading
+portfolios and a sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both trading
+and non-trading portfolios).
+Annual Report 2023
+Minimum
+Maximum
+Average
+End of year
+2023
+Total portfolio VaR
+Commodity risk
+Currency risk
+Interest rate risk
+A summary of VaRs of trading book by risk type is as follows:
+VaR is a measure index which estimates the potential maximum losses that could occur on risk positions taken due to
+movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level of
+confidence. The Bank adopts a historical simulation method to calculate and monitor the VaRs of trading portfolios with
+250 days' historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(i) VaR
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+265
+Less than
+one month
+112,499
+1,228,303
+Credit commitments
+Repayable
+on demand
+One to
+31 December 2023
+Management does not expect all of the commitments to be drawn down before the expiry of the commitments.
+(iii) Analysis of credit commitments by contractual expiry date
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+264
+(iv) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+(iii) Includes repurchase agreements.
+terms.
+(ii) The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+Includes reverse repurchase agreements.
+(i)
+(9,381)
+(784)
+Repayable
+on demand
+87
+Less than
+one month
+Three
+months to
+One to
+31 December 2022
+3,184,180
+207,576
+510,386
+690,830
+359,067
+145,907
+1,270,414
+Credit commitments
+Total
+Over
+five years
+One to
+five years
+one year
+months
+three
+112
+209
+43
+The tables below indicate a sensitivity analysis of exchange rate changes of the main foreign currencies to which the Group
+had significant on- and off-balance sheet exposure on its monetary assets and liabilities and its estimated future cash
+flows. The analysis calculates the effect of a reasonably possible movement in the currency rates against RMB, with all
+other variables held constant, on profit before taxation and equity, The impact on equity only includes the impact on other
+comprehensive income. A negative amount in the table reflects a potential net reduction in profit before taxation or equity,
+while a positive amount reflects a potential net increase. While the table below indicates the effect on profit before taxation
+and equity of a 1% depreciation of USD and HKD against RMB, there will be an opposite effect with the same amount
+if the currencies appreciate by the same percentage. This effect, however, is based on the assumption that the Group's
+foreign exchange exposures as at the end of the reporting period are kept unchanged and, therefore, has not incorporated
+actions that would be taken by the Group to mitigate the adverse impact of this currency risk.
+The Group manages its currency risk exposure through various methods, including limit management and risk hedging to
+hedge currency risk, and performs currency risk sensitivity analysis and stress testing regularly.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD, and other currencies
+to a lesser extent. The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange
+rate has been pegged to the USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes
+in the exchange rate of RMB to USD. Transactions in foreign currencies mainly arise from the Group's foreign currency
+treasury operations, commissioned foreign exchange dealings for clients and overseas investments.
+(ii) Currency risk
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+266
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge
+or dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in
+the specified range, and the correlation between these market prices will remain basically unchanged. This may not
+fully reflect the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to
+hedge or dispose of all positions fully;
+(3)
+(2)
+(1)
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+VaR.
+Currency
+USD
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaRs do not add up to the total portfolio
+HKD
+Effect on equity
+(629)
+(1,443)
+817
+327
+-1%
+522
+267
+-1%
+2022
+2023
+31 December
+31 December
+31 December
+2022
+2023
+31 December
+Change in
+exchange rate
+Effect on profit
+before taxation
+five years
+89
+179
+Average
+End of year
+2022
+180
+412
+312
+245
+26
+44
+37
+38
+131
+406
+256
+258
+Maximum
+411
+Minimum
+121
+411
+Total portfolio VaR
+7
+33
+12
+32
+Commodity risk
+83
+297
+160
+297
+Currency risk
+30
+121
+67
+Interest rate risk
+five years
+47,631
+Total
+137,501
+101,117
+462,665
+964,058
+802,982
+83,534
+Financial investments measured at FVTOCI
+2,551,857
+118,767
+377,001
+1,075,522 4,070,282
+5,072,783
+3,130
+10,717,485
+Financial investments measured at amortised cost
+878,999
+105,763
+226,856
+54,533
+1,353,001
+1,534,912
+5,839,403
+8,646,048
+19,669,390
+671,048
+37,768,335
+Financial investments
+Financial investments measured at FVTPL
+81,529
+9,384
+24,206
+246,219
+185,042
+Other
+105,707
+195,642
+20,713
+460,705
+301,577
+953,779
+51,671
+7,802
+4,461,285
+Financial liabilities measured at FVTPL
+56,799
+180
+165
+1,414
+5,463
+357
+64,378
+Certificates of deposit
+2,685,751
+Loans and advances to customers (ii)
+Due to banks and other financial institutions (iii)
+159,718
+46,739
+45,605
+51,849
+466,255
+1,771,743
+3,281,804
+2,241,827 8,008,315
+13,958,692
+25,823,864
+3,696,274
+58,782,519
+Financial liabilities:
+Due to central banks
+6,565
+66,840
+233,123
+2,357,046
+4
+42,474
+2,810,996
+2,213,696
+6,435,173 6,981,338
+813,535
+36,094,727
+Net liquidity gap
+(15,617,408)
+(107,581)
+(412,689)
+(344,569)
+658,151 15,935,539
+3,403,976
+3,515,419
+(i)
+Includes reverse repurchase agreements.
+16,839,989
+(ii) Includes repurchase agreements.
+Total liabilities
+191,400
+6,551,322
+18,028
+29,870,491
+Debt securities issued
+6,899
+29,260
+86,443
+203,986
+579,365
+905,953
+Other
+255,765
+129,605
+164,692
+132,461
+873,923
+58,475
+(iii) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2023
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+1,192,880
+4,654
+4,028
+2,998
+5,183
+2,832,799
+4,042,542
+Due from banks and other financial institutions (i)
+337,094
+1,462,855
+179,850
+334,769
+Total
+262
+(iv)
+Over
+five years
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(ii) Maturity analysis of undiscounted contractual cash flows
+The tables below summarise the maturity profile of the Group's financial instruments based on the undiscounted
+contractual cash flows. The balances of some items in the tables below are different from the balances in the consolidated
+statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's
+actual cash flows on these instruments may vary significantly from the following analysis. For example, demand deposits
+from customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+31 December 2023
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+One to
+on demand
+one month
+months
+one year
+five years
+Undated
+5,432,348
+123,722
+22,905
+354,211
+59,009
+2,069,267
+Loans and advances to customers (ii)
+40,595
+1,213,028
+244,334
+1,255,195
+7,016,225
+20,395,144
+525,600
+35,578,483
+Financial investments
+Financial investments measured at FVTPL
+5,132,696
+1,180,526
+231,187
+Due from banks and other financial institutions (i)
+one year
+five years
+five years
+(iv)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+766,050
+3,774
+3,478
+2,566
+4,579
+2,647,750
+3,428,197
+93,469
+8,495
+24,050
+218,327
+9,245,933
+Other
+92,591
+143,086
+12,698
+35,490
+17,734
+92,825
+39
+394,463
+1,223,892
+2,820,517
+2,017,984
+7,144,022
+11,655,235
+3,129
+months
+4,446,184
+1,015,478
+151,910
+221,742
+99,746
+817,739
+Financial investments measured at FVTOCI
+134,663
+241,424
+385,254
+998,386
+709,859
+94,446
+2,564,032
+Financial investments measured at amortised cost
+136,945
+236,805
+3,407,392
+one month
+on demand
+Undated
+19,738
+59,849
+51,921
+430,416
+16,427,597
+2,639,315
+2,971,226
+8,787,293
+9,618,428
+858,395
+41,302,254
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+207
+1,555
+35,260
+(11,256)
+263,648
+780,131
+391,219
+Due to customers
+13,685,047
+1,831,542
+2,335,694
+7,090,386
+9,148,344
+18,184
+34,109,197
+Debt securities issued
+Other
+18,200
+107,968
+376,141
+330,196
+1,612,636
+186,117
+2,322
+(7,239)
+terms.
+(iii) Includes repurchase agreements.
+(iv) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2023
+263
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Overdue/
+One to
+repayable
+Less than
+three
+Three
+months to
+One to
+Over
+(ii) The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+(67)
+Includes reverse repurchase agreements.
+(6,946)
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+1,229,409
+Cash outflow
+(1,212,090)
+583,502 1,758,108
+(589,874) (1,772,475)
+367,431
+(370,714)
+57,583
+3,996,033
+(57,826)
+(4,002,979)
+17,319
+(6,372)
+(!!!)
+(3,283)
+(243)
+(i)
+1,683,372
+(14,367)
+14,271,619
+5,508
+4,387,964
+Financial liabilities measured at FVTPL
+56,799
+141
+123
+46,034
+633
+316
+62,859
+Derivative financial liabilities
+17,999
+20,057
+22,859
+4,847
+907,359
+284,933
+458,379
+3,175,267
+1,994,117
+6,797,850
+9,438,745
+17,912,066
+3,614,927
+44,697,079
+Liabilities:
+Due to central banks
+6,549
+66,676
+158,149
+231,374
+Due to banks and other financial institutions (ii)
+2,685,751
+10,909
+4,427
+76,251
+Certificates of deposit
+268,158
+132,389
+149,244
+161,415
+174,688
+885,894
+Total liabilities
+16,426,099
+2,657,447
+3,059,130
+8,759,653 9,139,669
+878,493
+40,920,491
+Net liquidity gap
+(14,661,992)
+Other
+1,764,107
+1,369,777
+215,269
+58,396
+122,826
+182,299
+21,677
+385,198
+Due to customers
+13,683,549
+1,830,012 2,325,939
+6,986,876 8,679,518
+15,280
+33,521,174
+Debt securities issued
+17,813
+106,187
+352,234
+678,274
+Total assets
+638,216
+101,817
+9,989
+17,197
+30,865
+11,194
+6,094
+75,339
+Loans and advances to customers
+36,677
+1,233,059
+1,299,690
+4,848,837
+4,967,058
+12,873,541
+128,071
+25,386,933
+Derivative financial assets
+Financial investments
+2,340,974
+39,718
+1,913,802
+Assets:
+Cash and balances with central banks
+1,192,880
+4,640
+3,980
+2,908
+5,086
+2,832,799
+4,042,293
+Due from banks and other financial institutions (i)
+337,094
+1,458,823
+178,151
+327,184
+4
+517,820 (1,065,013) (1,961,803) 299,076 17,033,573
+Financial investments measured at FVTPL
+9,082
+620
+8,806,849
+Investments in associates and joint ventures
+64,778
+64,778
+Property and equipment
+298,878
+298,878
+Other
+115,927
+222,172
+40,247
+50,709
+61,395
+45,949
+4,141,536
+81,529
+3,345,609
+338,685
+22,165
+235,722
+156,408
+201,903
+105,148
+811,957
+Financial investments measured at FVTOCI
+132,916
+94,002
+425,812
+852,277
+82,816
+2,230,862
+Financial investments measured at amortised cost
+104,586
+875,813
+3,614,927
+643,039
+(i)
+26,799
+44,653
+32,770
+89,434
+107,611
+553,340
+153,780
+1,222,581
+1,801,007
+6,090,604
+7,639,489
+16,749,074
+3,403,976
+39,610,146
+2,703,415
+98,293
+Total assets
+Other
+2,223,096
+Financial investments measured at amortised cost
+115,000
+203,067
+836,644
+2,771,349
+3,636,452
+620
+7,563,132
+Investments in associates and joint ventures
+65,790
+65,790
+Property and equipment
+293,887
+293,887
+Liabilities:
+Due to central banks
+6,127
+16,882
+1,955
+17,932
+23,702
+30,565
+14,231
+7,965
+96,350
+Certificates of deposit
+68,099
+125,796
+175,348
+6,209
+3,776,588
+375,452
+Due to customers
+Derivative financial liabilities
+93,310
+64,287
+3,597
+121,734
+1,038
+145,781
+Due to banks and other financial institutions (ii)
+2,509,370
+542,311
+204,501
+68,494
+16,109
+3,762,490
+Financial liabilities measured at FVTPL
+57,045
+61
+578
+2,338
+668
+561,208
+421,705
+345,296
+one year
+five years
+five years
+(iii)
+Total
+Assets:
+Cash and balances with central banks
+766,050
+3,771
+3,471
+2,534
+4,316
+2,647,750
+3,427,892
+Due from banks and other financial institutions (i)
+months
+231,177
+one month
+Over
+Includes reverse repurchase agreements.
+(ii) Includes repurchase agreements.
+(iii) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+867,843
+Annual Report 2023
+261
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Overdue/
+repayable
+One to
+Three
+Less than
+three
+months to
+One to
+Undated
+1,178,164
+on demand
+348,491
+234,407
+12,253,435
+95,942
+22,591,676
+Financial investments
+Financial investments measured at FVTPL
+7,792
+3,772,395
+22,464
+116,605
+199,594
+99,066
+747,474
+241,316
+Financial investments measured at FVTOCI
+121,032
+208,484
+4,279,277
+93,469
+1,048,523
+Derivative financial assets
+2,056,654
+1,228
+14,136
+20,960
+16,705
+57,506
+25,225
+8,951
+87,205
+Loans and advances to customers
+32,364
+1,109,740
+1,779,868
+institutions (ii)
+553,340
+Liabilities:
+Due to central banks
+145,781
+Due to banks and other financial
+39,610,146
+Financial liabilities measured at FVTPL
+Debt securities issued
+Derivative financial liabilities
+Certificates of deposit
+Due to customers
+Interest rate exposure
+Other
+Total liabilities
+1,038
+121,734
+476,412
+23,009
+440,796
+55,653
+4,607,349
+3,522,497
+2,634
+15,490,860
+526,625
+113,289 2,223,096
+770,277
+372,109
+1,766,288
+Financial investments measured
+at amortised cost
+467,417
+823,892
+2,658,476
+18,290
+3,996,217
+90,850 7,563,132
+ventures
+Property and equipment
+Other
+Total assets
+65,790
+65,790
+293,887
+293,887
+351
+13,735,852
+Investments in associates and joint
+3,623
+Tier 2 capital
+560
+647
+584
+Net tier 1 capital
+3,736,919
+3,475,995
+970,181
+805,084
+Valid portion of tier 2 capital instruments and related premiums
+635,672
+528,307
+Valid portion of minority interests
+Surplus provision for loan impairment
+275,764
+Valid portion of minority interests
+1,127
+Net capital base
+4,707,100
+Financial investments measured
+at FVTOCI
+1,013
+4,281,079
+Risk-weighted assets (i)
+22,225,272
+24,641,631
+333,382
+3,293
+354,331
+354,978
+354,331
+(20,839)
+Common equity tier 1 capital deductions
+22,091
+20,811
+Goodwill
+8,488
+8,320
+Other intangible assets other than land use rights
+8,490
+7,473
+354,915
+Cash flow hedging reserve that relates to the hedging of items that are not fair-
+valued on the balance sheet
+(2,962)
+Investments in common equity tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+7,980
+7,980
+Net common equity tier 1 capital
+3,381,941
+3,121,080
+Additional tier 1 capital
+Additional tier 1 capital instruments and related premiums
+(2,867)
+747,474
+316
+188,523
+Financial liabilities measured at FVTPL
+3,647
+633
+4,847
+53,416
+62,859
+Derivative financial liabilities
+Certificates of deposit
+Due to customers
+76,251
+181,578
+Debt securities issued
+Other
+17,501,563
+172,151
+4,292
+Total liabilities
+Interest rate exposure
+21,352,271
+180,896
+6,643,611
+311,141
+12,526
+8,231,400
+(5,622,895) 8,976,842
+19,878
+8,618,565
+2,846
+385,198
+4,387,964
+34,011
+10
+13,684
+Other
+298,878
+Common equity tier 1 capital adequacy ratio
+2,457
+Total assets
+15,729,376
+7,674
+17,208,242
+40,169
+4,735,833
+24,485
+5,174,775
+563,431
+14,862
+638,216
+44,697,079
+Liabilities:
+Due to central banks
+73,225
+158,149
+231,374
+Due to banks and other financial
+institutions (ii)
+3,415,815
+924,444
+1,848,853
+742,573
+33,521,174
+193,484
+3,096,086
+2,534
+4,152
+325,120
+3,427,892
+1,611,486
+345,007
+51,637
+48,524 2,056,654
+Derivative financial assets
+Cash and balances with central banks
+Due from banks and other financial
+institutions (i)
+87,205
+8,087,371 13,732,571
+405,677
+314,051
+52,006
+87,205
+22,591,676
+Financial investments
+Financial investments measured
+at FVTPL
+32,345
+212,113
+87,708
+Loans and advances to customers
+226,785
+Assets:
+interest-
+bearing
+54,930
+8,905,388
+(4,169,555)
+678,275
+29,349
+722,812
+4,451,963
+14,726
+784,797
+1,708,620
+1,369,777
+885,894
+40,920,491
+N/A
+N/A
+(i)
+Includes reverse repurchase agreements.
+Total
+(ii) Includes repurchase agreements.
+272
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Less than
+three
+months
+Three
+months to
+one year
+Non-
+One to
+five years
+Over
+five years
+The data set out in the above table includes trading book data.
+13.72%
+12,334
+Tier 1 capital adequacy ratio
+Loans and advances to customers measured
+at FVTPL
+2,671
+109
+2,780
+Loans and advances to customers measured
+at FVTOCI
+1,155,879
+1,155,879
+Financial investments measured at FVTPL
+Debt securities investments
+32,905
+457,187
+3,158
+493,250
+Equity investments
+16,925
+68,484
+97,743
+Funds and other investments
+34,460
+85,701
+154,974
+154,974
+Reverse repurchase agreements measured
+at FVTPL
+87,205
+3,133
+71,939
+1,179
+76,251
+4,595
+362,648
+3,017
+370,260
+Annual Report 2023
+277
+36,320
+Notes to the Consolidated Financial Statements
+31 December 2022
+Level 1
+Level 2
+Level 3
+Total
+Financial assets:
+Derivative financial assets
+3,730
+82,589
+886
+(In RMB millions, unless otherwise stated)
+156,481
+84,290
+555,222
+235,414
+235,414
+Repurchase agreements
+144,959
+144,959
+Financial liabilities measured at FVTPL
+761
+62,215
+1,311
+64,287
+Due to customers
+Derivative financial liabilities
+89,962
+2,185
+96,350
+4,964
+532,550
+3,496
+541,010
+278
+298,878
+Annual Report 2023
+4,203
+Derivative financial liabilities
+Financial liabilities:
+156,343
+107,962
+747,474
+Financial investments measured at FVTOCI
+Debt securities investments
+333,378
+1,790,966
+362
+2,124,706
+Other debt investments
+5,264
+4,371,408
+5,264
+7,792
+38,310
+47,024
+93,126
+341,170
+1,834,540
+47,386
+2,223,096
+429,190
+3,785,875
+Equity investments
+62,859
+1,838
+59,559
+For unquoted other liabilities at FVTPL, discounted cash flow model is used based on current yield curve appropriate for
+the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied based on
+parameters including yields, foreign exchange forward rates, foreign exchange rate volatilities, which are calibrated by
+active market quotes of standard European option with the same underlying items.
+276 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments measured at fair value
+Financial assets:
+Level 1
+31 December 2023
+Level 2
+Level 3
+Total
+Derivative financial assets
+Other liabilities at fair value through profit or loss
+3,333
+515
+75,339
+Reverse repurchase agreements measured
+at FVTPL
+40,514
+40,514
+Loans and advances to customers measured
+at FVTPL
+5,990
+114
+6,104
+Loans and advances to customers measured
+at FVTOCI
+71,491
+1,295,585
+The loans and advances to customers that use valuation techniques for valuation are mainly the bills and discounted cash
+flow model is used. For bank acceptance bill, based on the different credit risk of the acceptor, interest rate yield curve is
+set up using the actual market data; for commercial bill, based on the interbank offered rate, interest rate yield curve is
+constructed, with spreads adjusted for credit risk and liquidity.
+Structured derivatives are mainly valued using dealer's quotations.
+Capital adequacy ratio
+15.17%
+15.64%
+19.10%
+19.26%
+(i) Refers to risk-weighted assets after the capital floor and adjustments.
+51. FAIR VALUE OF FINANCIAL INSTRUMENTS
+The Group has established policies and internal controls with respect to the measurement of fair values, specifically the
+framework of fair value measurement of financial instruments, fair value measurement methodologies and operating
+procedures. Fair value measurement methodologies specify valuation techniques, parameter selection and relevant concepts,
+models and parameter-seeking methods. Operating procedures specify measurement procedures, timing of valuation,
+market parameter selection and corresponding allocation of responsibilities. In the process of fair value measurement,
+front office is responsible for daily transaction management. The Finance and Accounting Department plays a lead role in
+formulating accounting policies of fair value measurement, valuation methodologies and system implementation. The Risk
+Management Department is responsible for verifying trade details and validating models.
+Annual Report 2023
+275
+Loans and advances to customers
+Notes to the Consolidated Financial Statements
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the
+characteristics of the financial instruments and relevant market information. The Group uses the following hierarchy for
+determining and disclosing the fair value of financial instruments:
+Level 1 inputs: quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 2 inputs: valuation techniques are used, for which all inputs that have a significant effect on the recorded fair value
+are observable, either directly or indirectly; and
+Level 3 inputs: valuation techniques are used, for which certain inputs that have a significant effect on the recorded fair
+value are not based on observable market data.
+The following is a description of the fair value of financial instruments measured at fair value which are determined using
+valuation techniques. They incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial investments
+Financial investments that use valuation techniques for their valuation include debt securities, asset-backed securities,
+investment funds, unlisted equity instruments and asset management plans. The Group values such investments by
+incorporating either only observable data or both observable and unobservable data. Observable inputs include assumptions
+regarding current interest rates; unobservable inputs include assumptions regarding expected default rates, prepayment
+rates, discount rates and market liquidity.
+The majority of the debt securities investments classified as level 2 are RMB bonds. The fair values of these bonds are
+determined based on the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined
+based on a valuation technique for which all significant inputs are observable market data.
+Derivatives
+Derivatives that use valuation techniques with market observable inputs are mainly interest rate swaps, currency forwards,
+swaps and options. The most frequently applied valuation techniques include discounted cash flow model and Black-Scholes
+model. The models incorporate various inputs including foreign exchange spot and forward rates, foreign exchange rate
+volatility, interest rate yield curves.
+(In RMB millions, unless otherwise stated)
+14.04%
+1,295,585
+Debt securities investments
+Equity investments
+8,761
+33,556
+40,472
+82,789
+347,312
+1,843,078
+40,472
+2,230,862
+429,385
+5,421
+3,870,924
+4,460,361
+Financial liabilities:
+Due to customers
+202,976
+202,976
+Repurchase agreements
+28,174
+28,174
+Financial liabilities measured at FVTPL
+1,462
+160,052
+Financial investments measured at FVTPL
+5,421
+2,142,652
+21,412
+515,389
+3,368
+540,169
+Equity investments
+19,885
+10,935
+74,226
+105,046
+Funds and other investments
+Other debt investments
+37,443
+41,357
+166,742
+78,740
+614,266
+118,951
+811,957
+Financial investments measured at FVTOCI
+Debt securities investments
+338,551
+1,804,101
+87,942
+Property and equipment
+76,251
+64,778
+1,707,681
+389,335
+8,989
+117,091
+2,223,096
+Financial investments measured at amortised cost
+7,242,116
+166,488
+57,165
+97,363
+7,563,132
+Investments in associates and joint ventures
+36,740
+2,728
+189
+26,133
+65,790
+Property and equipment
+137,342
+Financial investments measured at FVTOCI
+747,474
+9,306
+8,122
+1,108,378
+644,064
+35,575
+268,637
+2,056,654
+Derivative financial assets
+27,006
+29,132
+15,269
+153,536
+15,798
+Loans and advances to customers
+21,137,985
+752,795
+352,901
+347,995 22,591,676
+Financial investments
+Financial investments measured at FVTPL
+697,336
+32,710
+87,205
+Due from banks and other financial institutions (i)
+643
+293,887
+5,361
+3,707
+55,219
+64,287
+Derivative financial liabilities
+31,128
+33,778
+15,856
+15,588
+96,350
+Certificates of deposit
+Due to customers
+Debt securities issued
+Other
+Total liabilities
+127,443
+203,301
+17,030
+27,678
+Financial liabilities measured at FVTPL
+3,762,490
+257,934
+57,370
+Other
+Total assets
+342,804
+84,400
+38,442
+87,694
+553,340
+35,564,084
+2,405,480
+2,366
+532,232
+39,610,146
+Liabilities:
+Due to central banks
+143,352
+2,429
+145,781
+Due to banks and other financial institutions (ii)
+2,848,497
+598,689
+1,108,350
+375,452
+3,427,892
+14,937
+The common equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio of the
+Group calculated after implementation of the advanced capital measurement approaches approved by the former CBIRC are
+as follows:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+274 Annual Report 2023
+The capital adequacy ratios and related data of the Group are calculated based on the statutory financial statements of
+the Group prepared under the PRC GAAP. During the reporting year, the Group has complied in full with all its externally
+imposed regulatory capital requirements.
+The Group calculates the following common equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the
+capital adequacy ratio in accordance with the Regulation Governing Capital of Commercial Banks (Provisional) and relevant
+requirements. The requirements pursuant to these regulations may be different from those applicable in Hong Kong SAR
+and other jurisdictions.
+According to Regulation Governing Capital of Commercial Banks (Provisional), Measures for the Assessment of Systemically
+Important Banks, Additional Regulation of Systemically Important Banks (Provisional), and the capital surcharge applied to
+global systemically important banks as required by the Basel Committee on Banking Supervision, the minimum common
+equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio of the Group shall
+not be lower than 9%, 10% and 12% respectively. In addition, overseas entities are directly regulated by local banking
+regulators, and the required capital adequacy ratios differ by countries or regions.
+Since 1 January 2013, the Group commenced calculating the capital adequacy ratios in accordance with the Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the former CBIRC
+officially approved the Bank to adopt the advanced capital management approach. Within the approved scope of risk
+exposures that meet the regulatory requirements, the Bank can adopt the foundation IRB approach for its corporate credit
+risk exposures, the IRB approach for its retail credit risk exposures, the internal model approach (IMA) for its market risk
+exposures, and the standardised approach for its operational risk exposures.
+The Group monitors the capital adequacy ratios regularly based on regulations issued by the former CBIRC. The required
+information is quarterly filed with the NFRA by the Group and the Bank.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profiles of its business operations. In order to maintain or adjust the capital structure, the Group may adjust its profit
+distribution policies, issue or repurchase its own shares, eligible additional tier 1 capital instruments, eligible tier 2 capital
+instruments, or convertible bonds.
+make effective use of various capital instruments, continuously enhance capital strengths, refine the capital structure,
+improve capital quality, reduce capital costs, and maximise shareholders' returns.
+leverage on the results of quantitative assessments of material risks fully, establish a bank-wide value management
+mechanism with a core of economic capital, improve the aligned policies, processes, and applications in business
+management, strengthen the capital constraints and capital incentives mechanism, enhance the abilities of product
+pricing and decision-making support, and improve the capital allocation efficiency; and
+adopt the advanced capital measurement approach, improve the internal capital adequacy assessment process
+(ICAAP), publicly disclose information on capital management, cover all types of material risks, and ensure stable
+operations of the Group;
+maintain sound capital adequacy to meet regulatory and policy requirements on capital, keep stable capital base to
+ensure the implementation of the Group's business growth and strategic plans in order to achieve comprehensive,
+balanced, and sustainable development;
+The Group has set the following capital management objectives:
+(e) Capital management
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+273
+Annual Report 2023
+31 December
+2023
+31 December
+2022
+Common equity tier 1 capital
+64,778
+1,905,968
+410,049
+496,406
+561,303
+392,162
+428,007
+148,174
+148,164
+The data set out in the above table includes trading book data.
+356,407
+3,141,891
+3,404,032
+Other
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+Valid portion of capital reserve
+Paid-in capital
+356,407
+135,967
+(ii) Includes repurchase agreements.
+N/A
+1,421
+1,168
+3,005
+3,762,490
+53,262
+933
+31,106
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+RMB
+USD
+(in RMB
+equivalent)
+HKD
+(in RMB
+equivalent)
+Other
+(in RMB
+equivalent)
+Total
+(in RMB
+equivalent)
+Assets:
+Cash and balances with central banks
+3,126,696
+150,292
+27
+58,666
+64,287
+96,350
+N/A
+36,094,727
+873,923
+766,801
+1,681,663
+62,243
+648,895
+3,958,454
+905,953
+12,113
+569,208
+29,870,491
+(i) Includes reverse repurchase agreements.
+693,281
+375,452
+1,190
+6,159
+6,347,993
+172,644
+5,273,380
+62,121
+167,260
+8,304
+34,116
+6,049,400 6,589,093
+9,441,460 (2,592,876)
+(7,389,824)
+21,125,676
+17,539,353
+95,251
+2,459
+195,459
+96,350
+16,484
+28,153,014
+3,267,140
+418,526
+458
+(1,290)
+(458)
+1,355
+(30,292)
+(67,984)
+30,292
+76,381
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the estimated movements in net interest income and equity based on the projected yield curve scenarios
+and the Group's current interest rate risk profile. This effect, however, does not incorporate actions other than hedging that
+would be taken by management to mitigate the impact of interest rate risk. The projections above also assume that interest
+rates of all maturities move by the same degree and, therefore, do not reflect the potential impact on net interest income
+and equity in the case where some rates change while others remain unchanged.
+Annual Report 2023
+271
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+31 December 2023
+Less than
+three
+months
+Three
+Non-
+months to
+one year
+(1,642)
+809
+1,563
+(809)
+Effect on
+Currency
+interest income
+equity
+interest income
+equity
+RMB
+(29,472)
+(63,594)
+One to
+five years
+29,472
+USD
+HKD
+ventures
+Other
+Total
+(469)
+(4,663)
+469
+4,945
+71,723
+Effect on net
+Over
+five years
+Total
+234,428
+125,924
+194,907
+223,376
+811,957
+Financial investments measured
+at FVTOCI
+272,320
+420,740
+803,302
+629,586
+104,914 2,230,862
+Financial investments measured
+at amortised cost
+580,346
+3,198,040
+4,079,888
+99,037 8,806,849
+Investments in associates and joint
+937,078
+33,322
+Financial investments measured
+at FVTPL
+Financial investments
+25,386,933
+Assets:
+Cash and balances with central banks
+Due from banks and other financial
+institutions (i)
+3,707,044
+2,498
+4,303
+328,448
+4,042,293
+1,946,422
+323,422
+interest-
+bearing
+35,293
+2,340,974
+Derivative financial assets
+75,339
+75,339
+Loans and advances to customers
+9,187,465 15,369,942
+528,802
+245,909
+54,815
+35,837
+Effect on
+849,538
+Decreased by 100 basis points
+(d) Interest rate risk in the banking book
+Interest rate risk in the banking book is defined as the risk of loss in the overall return and the economic value of the
+banking book arising from adverse movements in interest rate and term structure. This type of risk may occur in the
+following situations:
+the repricing period of different financial instruments are different when the interest rate changes;
+despite the similarities in maturity periods, changes in the benchmark interest rate vary among on- and off-balance
+sheet business in the banking book with different pricing benchmark interest rates;
+the Bank or the counterparty can elect to change the level or the maturity of future cash flows of financial
+instruments when the Bank holds option derivatives or when there are embedded option terms or implied options in
+the on- and off-balance sheet businesses in the banking book; and
+due to changes in expected default levels or market liquidity, the market's assessment of the credit quality of financial
+instruments changes, leading to changes in credit spreads.
+The Group manages the interest rate risk in the banking book through the Asset and Liability Management Department,
+and the following methods have been adopted:
+interest rate prediction: analysing the macro-economic factors that may impact the PBOC benchmark interest rates
+and market interest rates;
+duration management: optimising the differences in timing between contractual repricing (or maturities) of interest-
+generating assets and interest-bearing liabilities;
+pricing management: managing the deviation of the pricing of interest-generating assets and interest-bearing
+liabilities from the benchmark interest rates or market interest rates;
+limit management: optimising the positions of interest-generating assets and interest-bearing liabilities and controlling
+the impact on profit or loss and equity; and
+hedging: using interest rate derivatives for hedging management in a timely manner.
+The Group measures interest rate risk mainly by analysing the sensitivity of projected net interest income under various
+interest rate movements (scenario analysis). The Group aims to mitigate the impact of prospective interest rate movements
+which might reduce future net interest income, while balancing the cost of hedging on the current revenue.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rate, with all other variables held
+constant, on the Group's net interest income and equity.
+270 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2023
+Increased by 100 basis points
+Decreased by 100 basis points
+Effect on net
+Effect on
+Effect on net
+Effect on
+Currency
+interest income
+equity
+The effect on net interest income is the impact of the assumed changes in interest rates on the net interest income, arising
+from the financial assets and financial liabilities held at the end of the reporting period that are subject to repricing within
+the coming year, including the effect of hedging instruments. The effect on equity is the impact of the assumed changes in
+interest rates on other comprehensive income, calculated by revaluing fixed rate financial assets measured at FVTOCI held at
+the end of the reporting period, including the effect of any associated hedging instruments.
+Annual Report 2023 269
+(ii) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+Effect on net
+361,873
+29,870,491
+685,154
+191,789
+2,317
+26,693
+905,953
+712,469
+138,878
+14,136
+8,440
+873,923
+32,706,418
+2,107,220
+525,235
+Net long position
+2,857,666
+298,260
+6,997
+755,854
+352,496
+3,515,419
+Credit commitments
+2,379,809
+398,563
+8,896
+183,777
+2,971,045
+(i)
+interest income
+equity
+36,094,727
+(14,922)
+91,766
+16,673
+(79,879)
+(16,673)
+RMB
+Total
+74
+(1,008)
+1,439
+(20)
+31 December 2022
+Other
+1,008
+(95)
+(73,298)
+14,922
+84,941
+USD
+96
+(1,320)
+1,320
+6,655
+HKD
+(1,439)
+(6,466)
+Increased by 100 basis points
+158,427
+138,963
+82,971
+145,272
+investments in overseas subsidiaries, associates and joint ventures.
+27,494
+31 December
+31 December
+Overdue loans and advances to customers
+(i)
+Loans and advances to customers (excluding accrued interest)
+3.
+832
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+284
+(96,126)
+capital and statutory reserves of overseas branches; and
+property and equipment, net of depreciation charges;
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange transactions. Structural assets and liabilities
+include:
+167,289
+Annual Report 2023
+12,318
+(96,680)
+1,468
+31 December 2022
+Net structural position
+Net (short)/long position
+Net option position
+Forward sales
+Forward purchases
+Spot liabilities
+Spot assets
+173,663
+26,781
+870
+146,012
+Net structural position
+(30,878)
+31,956
+USD
+(3,292)
+HKD
+531,400
+14,142
+(2,790,684)
+(691,849)
+2023
+(2,002,155)
+2,433,174
+453,110
+247,474
+1,732,590
+(3,370,003)
+(754,849)
+(525,235)
+(2,089,919)
+Total
+3,860,467
+Other
+1,079,851
+2,249,216
+2022
+190,229
+Between 3 and 6 months
+18,899
+26,399
+33,009
+48,177
+54,727
+39,140
+42,126
+41,139
+53,866
+45,934
+48,059
+42,383
+46,984
+25,550
+2022
+31 December
+31 December
+31 December 2023
+(iii) Rescheduled loans and advances to customers
+Overseas and other
+Northeastern China
+Yangtze River Delta
+Pearl River Delta
+Central China
+Western China
+Bohai Rim
+Head Office
+(ii) Overdue loans and advances to customers by geographical distribution
+2023
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+95,216
+15,309
+38,972
+30,627
+Between 6 and 12 months
+Over 12 months
+62,917
+48,882
+121,299
+110,720
+223,188
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+0.15%
+0.13%
+Between 6 and 12 months
+32,754
+Over 12 months
+0.21%
+0.46%
+0.48%
+0.85%
+0.82%
+The definition of overdue loans and advances to customers is as follows:
+Loans and advances to customers with a specific repayment date are classified as overdue when the principal or interest is
+overdue.
+For loans and advances to customers repayable by regular instalments, if part of the instalments is overdue, the whole
+amount of the loans and advances would be classified as overdue.
+Rescheduled loans and advances to customers
+to customers
+% of total
+loans and
+advances
+31 December 2022
+284,031
+330,424
+0.24%
+(158,050)
+(245) 1,139,911 1,750,135 3,600,784
+(30,774)
+(1,528)
+(3,089)
+(189)
+1,022,148
+1,624,995
+82,723
+3,357,881
+Profit for the year
+Other comprehensive income
+347,516
+347,516
+17,821
+794
+(39)
+(56)
+18,520
+18,520
+Total comprehensive income
+17,821
+794
+99
+(39)
+(56) 18,520 347,516
+366,036
+Dividends-ordinary shares 2022 final
+Distributions to other equity instrument
+holders (Note 17)
+8,513
+480,285
+354,331 153,348 384,808
+356,407
+(191)
+(11,632)
+(11,632)
+Total comprehensive income
+(15,593)
+3,245
+907
+(191)
+(11,632)
+346,056 334,424
+Dividends-ordinary shares 2021 final
+(Note 17)
+(104,534)
+(108,169) (108,169)
+(104,534)
+holders (Note 17)
+(14,810)
+(14,810)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve
+34,411
+53,571
+34,411
+(34,411)
+53,571
+(53,571)
+Balance as at 31 December 2022
+and 1 January 2023
+Distributions to other equity instrument
+Net (short)/long position
+(14,964) (14,964)
+Appropriation to general reserve
+31 December 2023
+USD
+HKD
+Spot assets
+2,069,540
+493,862
+Other
+1,105,223
+Total
+3,668,625
+Spot liabilities
+(1,977,668)
+(583,968)
+(827,181)
+(3,388,817)
+Forward purchases
+2,555,132
+307,986
+524,807
+3,387,925
+Forward sales
+(2,784,831)
+(124,849)
+(758,157)
+(3,667,837)
+Net option position
+(20,223)
+2,185
+(12,736)
+Currency concentrations
+2.
+There are no differences between the profit attributable to equity holders of the parent company under IFRSS and PRC
+GAAP for the year ended 31 December 2023 and 2022. There are no differences between the equity attributable to equity
+holders of the parent company under IFRSS and PRC GAAP as at 31 December 2023 and 31 December 2022.
+Statement of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+34,981
+64,264
+34,981
+(34,981)
+64,264
+(64,264)
+Other comprehensive income carried
+forward to retained earnings
+(2)
+(2)
+2
+Balance as at 31 December 2023
+356,407 354,331 153,348 419,789 544,549
+Appropriation to surplus reserve (i)
+26,332
+(3,128)
+(i) Includes the appropriation made by overseas branches in the amount of RMB112 million (2022: RMB68 million).
+53. EVENTS AFTER THE REPORTING PERIOD
+A final dividend of RMB0.3064 (pre-tax) per share after the appropriation of statutory surplus reserve and general reserve,
+was approved at the board of directors' meeting held on 27 March 2024, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2023, the final dividend amounted to approximately RMB109,203 million in total. The dividend payable was not recognised
+as a liability in the consolidated financial statements.
+54. COMPARATIVE FIGURES
+In accordance with the requirements of the New Insurance Contract standards and the Provisional Regulation Governing
+Gold Leasing Business, the Group has implemented the aforesaid requirements from 2023 onwards and adjusted certain
+comparative figures accordingly to conform to the current reporting period's presentation.
+55. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+The consolidated financial statements were approved by the board of directors on 27 March 2024.
+Annual Report 2023
+283
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+1.
+(734)
+0.32%
+10
+% of total
+loans and
+advances
+Additional tier 1 capital:
+30
+Additional tier 1 capital instruments and related premiums
+354,331
+31
+Including: Portion classified as equity
+354,331
+354,331
+354,331
+X28+X32
+32
+Including: Portion classified as liabilities
+Annual Report 2023
+287
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December
+31 December
+2023
+2022
+Reference
+Items
+33
+Invalid instruments to additional tier 1 capital after the
+transition period
+34
+Valid portion of minority interests
+647
+584
+3,121,080
+3,381,941
+Common equity tier 1 capital
+29
+2023
+2022
+Reference
+N/A
+N/A
+--
+N/A
+N/A
+25
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+26a
+Investments in common equity tier 1 capital instruments
+issued by financial institutions that are under control but
+not subject to consolidation
+7,980
+X26
+7,980
+26b
+Shortfall in common equity tier 1 capital instruments
+issued by financial institutions that are under control but
+not subject to consolidation
+26c
+Other that should be deducted from common equity tier 1
+capital
+27
+Undeducted shortfall that should be deducted from
+additional tier 1 capital and tier 2 capital
+28
+Total regulatory adjustments to common equity tier
+1 capital
+22,091
+20,811
+X11
+35
+Including: Invalid portion to additional tier 1 capital after
+the transition period
+36 Additional tier 1 capital before regulatory
+adjustments
+45
+Tier 1 capital (common equity tier 1 capital +
+additional tier 1 capital)
+3,736,919
+3,475,995
+Tier 2 capital:
+46
+47
+Tier 2 capital instruments and related premiums
+Invalid instruments to tier 2 capital after the transition
+period
+635,672
+528,307
+X17
+48
+Valid portion of minority interests
+354,915
+1,127
+X27
+49
+Including: Invalid portion to tier 2 capital after the
+transition period
+50
+Valid portion of surplus provision for loan impairment
+333,382
+51
+Tier 2 capital before regulatory adjustments
+970,181
+275,764
+805,084
+X02+X04
+288
+Annual Report 2023
+1,013
+31 December
+354,978
+44
+354,978
+354,915
+Additional tier 1 capital: Regulatory adjustments
+37
+Direct or indirect investments in own additional tier 1
+instruments
+38
+Reciprocal cross-holdings in additional tier 1 capital
+between banks, or between banks and other financial
+institutions
+39
+40
+40
+Deductible amount of non-significant minority investments
+in additional tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in additional tier 1 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+--
+--
+Additional tier 1 capital
+41a
+41b
+Shortfall in additional tier 1 capital instruments issued
+--
+by financial institutions that are under control but not
+subject to consolidation
+41c
+Other that should be deducted from additional tier 1
+capital
+--
+42
+Undeducted shortfall that should be deducted from tier 2
+capital
+43
+Total regulatory adjustments to additional tier 1
+capital
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+26,229
+31 December
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+356,407
+356,407
+X18
+2
+Retained earnings
+2,895,278
+2,654,856
+2a
+Surplus reserve
+428,007
+392,162
+X21
+2b
+General reserve
+561,303
+496,406
+X22
+2c
+Retained profits
+1,905,968
+1,766,288
+X23
+3
+Accumulated other comprehensive income (and other
+148,724
+127,335
+public reserve)
+Paid-in capital
+1
+Reference
+2022
+to customers
+0.11%
+Less: Rescheduled loans and advances to
+customers overdue for more than
+three months
+(8,575)
+(0.03%)
+(2,281)
+(0.01%)
+Rescheduled loans and advances to customers
+overdue for less than three months
+74,148
+0.29%
+23,948
+За
+0.10%
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+4.
+Exposures to non-bank entities in Chinese mainland
+The Bank is a commercial bank incorporated in Chinese mainland with its banking business primarily conducted in Chinese
+mainland. As at 31 December 2023 and 31 December 2022, substantial amounts of the Bank's exposures arose from
+businesses with entities or individuals in Chinese mainland. Analyses of various types of exposures by counterparty have
+been disclosed in the respective notes to the financial statements.
+5.
+Correspondence between balance sheet in published financial statements and capital
+composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, [2013] No. 33)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(i) Capital composition
+Items
+Common equity tier 1 capital:
+31 December
+31 December
+2023
+Annual Report 2023 285
+Capital reserve
+148,164
+148,174
+14
+15
+Cash flow hedging reserve that relates to the hedging of
+items that are not fair-valued on the balance sheet
+Shortfall of provision for loan impairment
+Gain on sales related to asset securitisation
+Unrealised gains and losses due to changes in own credit
+risk on fair-valued liabilities
+Defined-benefit pension fund net assets (net of deferred
+tax liabilities)
+286
+Annual Report 2023
+(2,867)
+(2,962)
+X20
+13
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+16
+17
+18
+19
+20
+21
+22
+23
+24
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in common equity tier 1 capital
+between banks, or between banks and other financial
+institutions
+Deductible amount of non-significant minority investments
+in common equity tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+Deductible amount of significant minority investments
+in common equity tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation.
+Mortgage servicing rights
+Items
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in common
+equity tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation and
+undeducted portion of deferred tax assets arising from
+temporary differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in common equity tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+12
+those arising from temporary differences (net of
+deferred tax liabilities)
+X19
+3b
+Other
+560
+(20,839)
+X24
+4
+Valid portion to common equity tier 1 capital during the
+transition period (only applicable to non-joint stock
+companies. Fill in 0 for joint stock banks)
+Valid portion of minority interests
+56
+3,623
+Common equity tier 1 capital before regulatory
+adjustments
+3,404,032
+11
+3,293
+3,141,891
+Common equity tier 1 capital: Regulatory adjustments
+7
+Prudential valuation adjustments
+8
+Goodwill (net of deferred tax liabilities)
+8,488
+9
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+8,490
+8,320
+7,473
+X16
+X14-X15
+907
+Deferred tax assets that rely on future profits excluding
+X25
+3,245
+(Note 17)
+Other comprehensive income
+32,799
+9,164
+(3,478)
+(2,163)
+36,320
+Financial investments measured at FVTOCI
+Debt securities investments
+2,827
+1
+(2)
+363
+(2,764)
+(63)
+362
+Equity investments
+53,839
+(1,198)
+2,677
+(6,320)
+(1,974)
+47,024
+Funds and other investments
+68,484
+(5,744)
+14,959
+(36)
+886
+Loans and advances to customers
+measured at FVTPL
+106
+12
+102
+(111)
+109
+60
+153,164
+Financial investments measured at FVTPL
+3,840
+(218)
+1,111
+(2,149)
+74
+574
+3,158
+Equity investments
+58,687
+582
+Debt securities investments
+1,223
+(1,200)
+28,464
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Net gains or losses on level 3 financial instruments of the Group are set out below:
+Realised
+Unrealised
+(c) Transfers between levels
+(i) Transfers between level 1 and level 2
+2023
+2022
+391
+279
+(298)
+(727)
+1,611
+(1,025)
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these
+securities. Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the
+reporting period.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+In 2023 and 2022, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities
+measured at fair value of the Group were not significant.
+(ii) Transfers between level 2 and level 3
+At the end of the reporting period, certain financial instruments were transferred out from level 2 to level 3 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which were
+previously observable became unobservable.
+At the end of the reporting period, certain financial instruments were transferred out from level 3 of the fair value hierarchy
+for financial assets and liabilities, when significant inputs used in their fair value measurements, which were previously
+unobservable became observable, or when there was a change in valuation technique.
+(d) Valuation of financial instruments with significant unobservable inputs
+1,220
+(1,080)
+Annual Report 2023
+(90)
+(21,646)
+(3,662)
+156,343
+Financial liabilities:
+Financial liabilities measured at FVTPL
+(567)
+(74)
+(340)
+167
+(497)
+(3,496)
+(1,311)
+(1,426)
+(2,174)
+(14)
+1,022
+407
+(2,185)
+(1,993)
+(2,248)
+(354)
+1,189
+Derivative financial liabilities
+88
+848
+1,066
+(9)
+14
+114
+Financial investments measured at FVTPL
+Debt securities investments
+3,158
+412
+511
+(800)
+87
+515
+3,368
+68,484
+(99)
+16,612
+(10,237)
+(534)
+74,226
+Funds and other investments
+36,320
+588
+10,484
+Equity investments
+(6,035)
+15
+24
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Movement of level 3 financial instruments measured at fair value
+The following tables show the movement of level 3 financial assets and financial liabilities measured at fair value:
+1 January
+Total
+gains/(losses)
+recorded in
+2023
+(15,593)
+Total effects
+in other
+comprehensive
+income
+Additions
+(587)
+Disposals and
+settlements
+31 December
+2023
+Financial assets:
+Derivative financial assets
+886
+177
+Loans and advances to customers
+measured at FVTPL
+109
+14
+Transfer
+in/(out) of
+level 3
+Financial instruments valued with significant unobservable inputs primarily include certain structured financial derivatives,
+asset-backed securities, investment funds, unlisted equity instruments and asset management plans. These financial
+instruments are valued using discounted cash flow model, net asset value method and market comparison approach. The
+models incorporate various unobservable assumptions such as expected default rates, prepayment rates, discount rates and
+market liquidity.
+41,357
+Debt securities investments
+224
+(1,838)
+(77)
+396
+12
+(1,179)
+(672)
+620
+12
+(3,017)
+(595)
+Total
+gains/(losses)
+1 January
+2022
+recorded in
+profit or loss
+in other
+comprehensive
+income
+Additions
+Disposals and
+settlements
+Transfer
+(out)/in of
+level 3
+31 December
+2022
+Derivative financial assets
+Total effects
+Financial investments measured at FVTOCI
+Financial assets:
+(3,496)
+362
+(362)
+Equity investments
+47,024
+1,495
+1,488
+(9,535)
+40,472
+156,343
+1,092
+519
+1,495
+(27,565)
+(432)
+160,052
+Financial liabilities:
+Financial liabilities measured at FVTPL
+(1,311)
+(156)
+Derivative financial liabilities
+(2,185)
+675
+29,119
+As at 31 December 2023, the effects of changing the significant unobservable assumptions to reasonably possible
+alternative assumptions were not significant (31 December 2022: not significant).
+profit or loss
+Annual Report 2023
+28,986,751
+61,462
+82,932
+1,250,598
+786,799
+465,975
+451,633
+39,304,461
+34,393,656
+Reserves
+32,621,398
+Retained profits
+TOTAL LIABILITIES AND EQUITY
+356,407
+356,407
+354,331
+354,331
+134,614
+134,614
+219,717
+219,717
+1,139,911
+TOTAL EQUITY
+1,022,148
+317,123
+400,490
+Due to banks and other financial institutions
+3,250,269
+3,106,929
+Financial liabilities measured at FVTPL
+52,306
+55,936
+Repurchase agreements
+Derivative financial liabilities
+Certificates of deposit
+Due to customers
+370,623
+Income tax payable
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+Share capital
+Other equity instruments
+Preference shares
+Perpetual bonds
+51,234
+59,300
+949,247
+Debt securities issued
+145,763
+1,750,135
+3,600,784
+reserve
+reserve
+reserve
+reserve
+reserve
+reserves Subtotal
+profits
+equity
+Balance as at 1 January 2022
+356,407
+reserve
+354,331
+350,397
+426,714 24,106
+(4,773)
+(3,996)
+2
+945,798
+1,486,265 3,142,801
+Profit for the year
+346,056 346,056
+280
+153,348
+1,624,995
+Total
+Other
+3,357,881
+42,905,245
+37,751,537
+Liao Lin
+Chairman
+282 Annual Report 2023
+Wang Jingwu
+Executive Director
+Xu Zhisheng
+Person in charge of Finance and
+Accounting Department
+Retained
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Reserves
+Foreign
+Investment currency
+Cash flow
+Share
+equity
+capital instruments
+Capital
+Surplus
+General revaluation translation
+hedging
+The statement of changes in equity of the Bank is set out below.
+231,349
+Other
+37,751,537
+Level 2
+Level 3
+Financial assets
+Financial investments measured at amortised cost
+7,563,132
+7,728,298
+42,594
+7,503,935
+181,769
+Financial liabilities
+Level 1
+Subordinated bonds and tier 2 capital bonds issued
+594,718
+594,718
+Subject to the existence of an active market, such as an authorised stock exchange, the market value is the best reflection
+of the fair value of a financial instrument. As there is no available market value for certain financial assets held and financial
+liabilities issued by the Group, discounted cash flow or other valuation methods described below are adopted to determine
+the fair values of these financial assets and financial liabilities:
+(i)
+(ii)
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, fair values are estimated on the basis of pricing models or discounted cash flows.
+The fair values of subordinated bonds and tier 2 capital bonds issued are determined with reference to the available
+market values. If quoted market prices are not available, fair values are estimated on the basis of pricing models or
+discounted cash flows.
+All of the aforementioned assumptions and methods provide a consistent basis for the calculation of the fair values of the
+Group's financial assets and financial liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+Annual Report 2023 281
+Notes to the Consolidated Financial Statements
+591,630
+(In RMB millions, unless otherwise stated)
+Fair value
+31 December 2022
+Due to central banks
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+There are no significant differences between the carrying amount and the fair value of financial assets and financial
+liabilities not measured at fair value, except for the following items:
+31 December 2023
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+Carrying
+amount
+Financial assets
+8,806,849
+9,083,501
+75,260
+8,830,559
+177,682
+Financial liabilities
+Subordinated bonds and tier 2 capital bonds issued
+704,129
+705,809
+705,809
+Financial investments measured at amortised cost
+52. STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY OF
+THE BANK
+(e) Fair value of financial assets and financial liabilities not carried at fair value
+31 December
+2023
+1,928,908
+Financial investments measured at amortised cost
+8,592,769
+7,352,726
+Investments in subsidiaries
+163,283
+163,283
+Investments in associates
+36,183
+Property and equipment
+123,642
+127,907
+Deferred tax assets
+103,196
+100,306
+Other assets
+TOTAL ASSETS
+LIABILITIES
+458,765
+371,880
+42,905,245
+1,913,887
+Financial investments measured at FVTOCI
+36,042
+504,918
+466,374
+2022
+(restated)
+ASSETS
+Cash and balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+3,983,898
+3,347,555
+31 December
+1,357,208
+1,209,201
+Financial investments measured at FVTPL
+9,748,008
+11,011,574
+21,761,362
+The statement of financial position of the Bank is set out below.
+686,682
+51,163
+1,144,948
+52,312
+24,618,384
+37,751
+9.1
+38,334
+Overseas and other
+2.8
+11,878
+2.7
+11,207
+Northeastern China
+14.6
+16.8
+70,825
+Western China
+14.1
+8.8
+13.6
+57,560
+Central China
+22.4
+95,094
+61,841
+60,079
+with central banks
+Balance Sheet Analysis
+8.7%
+Cash and balances
+9.0%
+26.6%
+Investment
+26.5%
+57.0%
+Net loans and advances to customers
+56.8%
+2022
+2023
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+Total loans and advances to customers
+Add: Accrued interest
+Item
+Structure of assets
+Discussion and Analysis
+23
+Annual Report 2023
+As at the end of 2023, total assets amounted to RMB44,697,079 million, RMB5,086,933 million or 12.8% higher than that
+at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as "total loans")
+increased by RMB2,876,106 million or 12.4% to RMB26,086,482 million, investment increased by RMB1,315,966 million or
+12.5% to RMB11,849,668 million, and cash and balances with central banks increased by RMB614,401 million or 17.9% to
+RMB4,042,293 million.
+Assets Deployment
+In 2023, in response to the changes in external development trends, the Bank earnestly implemented macro-economic and
+financial policies and regulatory requirements, and continued to strengthen its emergency response capacity to market
+fluctuations and various risk events. The Bank dynamically optimized the aggregate amount of assets and liabilities and
+structural distribution strategy to ensure that the aggregate amount of assets and liabilities matches its market position,
+aligns to its capital level and accommodates to the demand of the real economy, and maintained a reasonable level of
+profit contribution and return on capital. The Bank adhered to the integrated development strategy of investment and
+financing, and continued to improve high-quality financial supply. The Bank insisted on the principle of taking customer
+deposits as the main funding source, built a multi-channel funding source mechanism, and steadily enhanced the support
+of liability business to asset business.
+Note: Please see "Note 49. to the Consolidated Financial Statements: Segment Information" for details.
+24.7
+67,462
+Bohai Rim
+29,214
+3.8
+30,429
+Northeastern China
+15.5
+130,802
+16.4
+132,478
+Western China
+3.5
+13.6
+14.5
+117,206
+Central China
+18.3
+153,822
+20.1
+161,992
+Bohai Rim
+13.5
+114,809
+Overseas and other
+68,533
+8.5
+14.1
+59,687
+14.3
+60,159
+Pearl River Delta
+23.1
+98,133
+22.7
+95,935
+Yangtze River Delta
+0.1
+257
+(3.9)
+(16,378)
+Head Office
+100.0
+424,720
+100.0
+421,966
+Profit before taxation
+8.0
+104,324
+2.5%
+39,610,146
+3.0%
+Item
+Percentage
+Percentage
+At 31 December 2023
+At 31 December 2022
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+35.5%
+4.9%
+59.6%
+Corporate loans
+Discounted bills
+Personal loans
+61.9%
+4.9%
+33.2%
+2022
+2023
+O
+Distribution of loans by business line
+Discussion and Analysis
+Annual Report 2023
+24
+While maintaining stable and controllable asset quality, the Bank made every effort to enhance the adaptability of credit
+structure to the real economy, and promoted the targeted and direct credit supply. The Bank continued to increase credit
+support for key fields such as green finance, manufacturing, inclusive finance, strategic emerging industries, sci-tech
+innovation and rural revitalization. As at the end of 2023, total loans amounted to RMB26,086,482 million, RMB2,876,106
+million or 12.4% higher compared with the end of the previous year, of which, RMB denominated loans of domestic
+branches were RMB24,391,525 million, up by RMB2,908,561 million or 13.5%.
+Loan
+Corporate loans
+Note: (1) Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers".
+Short-term corporate loans
+(%)
+Personal loans
+4.9
+1,148,785
+4.9
+1,287,657
+Discounted bills
+46.0
+10,676,449
+47.8
+12,464,140
+Medium to long-term corporate loans
+13.6
+3,150,517
+14.1
+3,681,064
+59.6
+13,826,966
+61.9
+16,145,204
+(%)
+Amount
+Amount
+Due from banks and
+100.0
+100.0
+11,849,668
+57.0
+22,591,676
+56.8
+25,386,933
+Net loans and advances to customers (1)
+Investment
+672,224
+53,524
+Amount
+23,210,376
+756,001
+56,452
+26,086,482
+Amount
+Percentage
+(%)
+Percentage
+(%)
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+2.5%
+2.2%
+other financial institutions
+Reverse repurchase agreements
+Other
+2.7%
+2.5%
+26.5
+113,459
+10,533,702
+Cash and balances with central banks
+44,697,079
+Total assets
+2.5
+1,000,222
+2.5
+1,077,211
+Other
+2.2
+864,122
+2.7
+1,224,257
+Reverse repurchase agreements
+3.0
+1,192,532
+2.5
+1,116,717
+Due from banks and other financial institutions
+8.7
+3,427,892
+9.0
+4,042,293
+26.6
+14.3
+565
+Pearl River Delta
+480,083
+2.13
+21,434
+1.83
+240,614
+1.76 13,149,079
+4.41 1,006,596
+1.89 27,364,627
+47,006
+589,688
+31,141,446
+Total deposits
+1.75
+1,066,762
+269,969
+15,342,455
+Subtotal
+Personal wealth management and
+22,582
+26,253
+(3,671)
+(14.0)
+private banking services
+Overseas business
+Interest Expense on Due to Banks and Other Financial Institutions
+Interest expense on due to banks and other financial institutions was RMB103,529 million, RMB32,797 million or 46.4%
+higher than that of last year, principally attributable to the increase in the interest rates of foreign-currency borrowing
+funds.
+20
+In 2023, the Bank's net fee and commission income was RMB119,357 million, representing a decrease of RMB9,968 million
+or 7.7% over last year. Affected by the volatile capital markets, changes in the investors' risk appetite, reform of public fund
+fee rate and other factors, income from personal wealth management and private banking, corporate wealth management,
+asset custody and other businesses dropped. The decreased fee rates of guarantee and commitment business resulted in a
+decline in relevant income.
+cash management
+(0.0)
+(21)
+45,439
+45,418
+Settlement, clearing business and
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2022
+2023
+Item
+NET FEE AND COMMISSION INCOME
+In 2023, non-interest income was RMB151,445 million, which was RMB1,078 million or 0.7% higher than that of last year,
+accounting for 18.8% of the operating income. Specifically, net fee and commission income decreased by RMB9,968 million
+or 7.7% to RMB119,357 million, and other non-interest related gains rose by RMB11,046 million or 52.5% to RMB32,088
+million.
+Non-interest Income
+Interest expense on debt securities and certificates of deposits issued was RMB56,809 million, indicating an increase of
+RMB20,935 million or 58.4% over last year, mainly due to the increased scale of the negotiable certificates of deposit
+("NCDs") and the rising interest rates of debt securities, such as certificates of deposit, issued by overseas institutions.
+Interest Expense on Debt Securities and Certificates of Deposit Issued
+Discussion and Analysis
+Annual Report 2023
+20
+Investment banking business
+20,060
+19,586
+474
+3.0
+Other
+2,915
+3,226
+(311)
+(9.6)
+Fee and commission income
+137,891
+145,818
+(7,927)
+(5.4)
+Less: Fee and commission expense
+18,534
+16,493
+2,041
+12.4
+Net fee and commission income
+119,357
+129,325
+(9,968)
+(7.7)
+56
+Annual Report 2023
+1,894
+Trust and agency services
+2.4
+Bank card business
+17,906
+17,736
+170
+1.0
+Corporate wealth management services
+11,770
+14,172
+(2,402)
+(16.9)
+Asset custody business
+7,994
+8,709
+(715)
+(8.2)
+Guarantee and commitment business
+7,296
+8,803
+(1,507)
+(17.1)
+1,950
+Discussion and Analysis
+OTHER NON-INTEREST RELATED GAINS
+Item
+Discussion and Analysis
+Summary Geographical Segment Information
+Annual Report 2023
+22
+Income tax expense decreased by RMB5,760 million or 9.2% to RMB56,850 million as compared to the previous year. The
+effective tax rate stood at 13.47%, lower than the statutory tax rate of 25%, primarily because the interest income on
+Chinese government bonds and local government bonds were exempted from tax under the relevant tax law.
+Income Tax Expense
+In 2023, the Bank set aside the impairment losses on assets of RMB150,816 million, with a decrease of RMB31,861 million
+or 17.4% as compared to that of last year. Specifically, the impairment losses on loans were RMB143,422 million, indicating
+an increase of RMB249 million or 0.2%. Please refer to "Note 14. to the Consolidated Financial Statements: Impairment
+Losses on Assets; Note 30. to the Consolidated Financial Statements: Impairment Allowance" for details.
+Impairment Losses on Assets
+(0.3)
+(653)
+239,351
+(0.8)
+(415)
+54,083
+53,668
+238,698
+Total
+Other
+19.2
+713
+3,716
+4,429
+2023
+Amortisation
+In RMB millions, except for percentages
+Percentage
+17.6
+148,527
+19.3
+155,716
+Yangtze River Delta
+10.0
+84,257
+3.1
+24,838
+Head Office
+100.0
+842,352
+100.0
+806,458
+Operating income
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+2022
+115,266
+5.6
+10,662
+4,828
+(4,400)
+172.7
+13,654
+7,906
+21,560
+79.7
+6,620
+8,308
+14,928
+(%)
+(decrease)
+2022
+2023
+Growth rate
+Increase/
+In RMB millions, except for percentages
+Total
+Other operating (expense)/income, net
+Net gains on financial investments
+Net trading income
+(9,228)
+10,097
+(191.1)
+21,042
+Taxes and surcharges
+(1.0)
+(288)
+28,822
+28,534
+Property and equipment expenses
+(0.9)
+(1,228)
+142,633
+141,405
+Staff costs
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2022
+2023
+Item
+Operating Expenses
+Other non-interest related gains amounted to RMB32,088 million, RMB11,046 million or 52.5% higher than that of the
+previous year. Among these, the increase in net trading income was mainly due to the increase in bond investment income,
+the increase in net gains on financial investments was primarily due to the increase in net gains on financial assets measured
+at fair value through profit or loss, while other net operating expense was mainly because of the increase in net losses on
+exchange and exchange rate products.
+52.5
+11,046
+32,088
+21
+17,007
+33.2
+Amount
+Percentage
+Percentage
+At 31 December 2023
+In RMB millions, except for percentages
+At 31 December 2022
+Discussion and Analysis
+Note: (1) Refers to overdue bonds.
+Total
+Over 5 years
+1 to 5 years
+3 to 12 months
+Less than 3 months
+Undated (1)
+Remaining maturity
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+Annual Report 2023
+26
+In terms of distribution by issuers, government bonds increased by RMB1,298,422 million or 17.5% over the end of last
+year, mainly due to the increase in local government bonds and Chinese government bonds; central bank bonds decreased
+by RMB18,557 million or 32.7%; policy bank bonds went up by RMB49,737 million or 6.5%; and other bonds decreased by
+RMB35,445 million or 1.9%.
+100.0
+10,063,570
+100.0
+18.1
+1,821,989
+15.8
+1,786,544
+11,357,727
+(%)
+Amount
+(%)
+117
+Percentage
+Percentage
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+43.2
+100.0
+4,347,196
+10,063,570
+100.0
+11,357,727
+43.6
+4,952,134
+36.3
+7.6
+3,649,538
+4,219,958
+13.6
+1,372,035
+13.2
+1,495,238
+6.9
+694,517
+6.0
+690,280
+0.0
+284
+0.0
+37.2
+Item
+762,209
+811,946
+1.6
+168,855
+1.5
+183,391
+1.8
+190,869
+1.6
+187,835
+95.5
+(%)
+Amount
+10,063,570
+95.9
+11,357,727
+(%)
+Amount
+Percentage
+Percentage
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+Accrued interest
+Total
+Funds and other
+Equity instruments
+Bonds
+Item
+In 2023, the Bank supported the implementation of the national development strategies, stepped up efforts to serve the
+real economy, actively conducted bond investments, and reasonably arranged the bond variety and term structure. As at
+the end of 2023, investment amounted to RMB11,849,668 million, representing an increase of RMB1,315,966 million or
+12.5% from the end of the previous year. Among these, bonds rose by RMB1,294,157 million or 12.9% to RMB11,357,727
+million.
+120,715
+1.0
+110,408
+1.1
+0.5
+56,817
+0.3
+38,260
+73.8
+7,422,555
+76.8
+8,720,977
+(%)
+Amount
+(%)
+Amount
+7.1
+Percentage
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+Other bonds
+Total
+Policy bank bonds
+Central bank bonds
+Government bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+100.0
+10,533,702
+100.0
+11,849,668
+Percentage
+Investment
+RMB-denominated bonds
+(%)
+19 August 2032
+17 April 2030
+2.90
+17,850
+Policy bank bonds 2022
+2.96
+18,041
+Policy bank bonds 2020
+24 October 2032
+2.77
+19,408
+Policy bank bonds 2022
+losses(1)
+impairment
+23 March 2030
+13 April 2025
+Maturity date
+In RMB millions, except for percentages
+Allowance for
+3.23
+19,460
+Policy bank bonds 2020
+4.21
+22,495
+Policy bank bonds 2015
+interest rate (%)
+Policy bank bonds 2019
+17,480
+3.45
+20 September 2029
+0.31
+Annual Report 2023
+28
+Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bonds.
+1
+The Bank fully implemented regulatory requirements, established a liability quality management system commensurate with
+the size and complexity of liabilities, and defined the management strategy and policy for liability quality that are consistent
+with the business strategy, risk appetite and overall business characteristics. As a result, the liability business maintained
+steady development. The Bank solidly carried forward the "GBC+" projects, continued to improve the coordinated ecology
+of "large, medium, small and micro enterprises and personal customers" and promoted the continued high-quality
+development of deposits in recent years. The Bank also built a multi-channel funding source mechanism including financial
+bonds and NCDs. As at the end of 2023, total liabilities reached RMB40,920,491 million, representing an increase of
+RMB4,825,764 million or 13.4% compared with the end of last year.
+Liabilities
+Reverse repurchase agreements amounted to RMB1,224,257 million, RMB360,135 million or 41.7% higher than that at
+the end of the previous year, principally because the Bank reasonably arranged fund operation strategies based on fund
+changes and moderately increased the lending size.
+Reverse Repurchase Agreements
+Note: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the expected credit loss model.
+25 May 2028
+2.52
+value
+14,615
+8 January 2029
+3.48
+15,082
+Policy bank bonds 2019
+26 October 2030
+3.79
+15,136
+Policy bank bonds 2020
+7 April 2025
+4.29
+16,493
+Policy bank bonds 2015
+Policy bank bonds 2023
+Amount
+Bond name
+Nominal
+At 31 December 2022
+At 31 December 2023
+In RMB millions, except for percentages
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+In terms of currency structure, RMB-denominated bonds rose by RMB1,279,851 million or 13.9% over the end of last year;
+USD-denominated bonds decreased by an equivalent of RMB5,016 million or 0.9%; other foreign currency bonds increased
+by an equivalent of RMB19,322 million or 6.7%. During the reporting period, the Bank reasonably arranged the currency
+structure based on foreign-currency fund positions, in consideration of bond liquidity, security and profitability.
+100.0
+10,063,570
+100.0
+2.8
+286,515
+2.7
+305,837
+11,357,727
+Total
+Other foreign currency bonds
+5.6
+559,753
+4.9
+554,737
+USD-denominated bonds
+91.6
+(%)
+Amount
+9,217,302
+8,653,621
+92.4
+10,497,153
+Percentage
+Percentage
+Item
+Amount
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+As at the end of 2023, the Group held RMB1,786,784 million of financial bonds', including RMB811,946 million of policy
+bank bonds and RMB974,838 million of bonds issued by banks and non-bank financial institutions, accounting for 45.4%
+and 54.6% of financial bonds, respectively.
+Discussion and Analysis
+27
+Annual Report 2023
+100.0
+10,533,702
+100.0
+11,849,668
+Total
+71.8
+7,563,132
+Annual
+74.3
+21.1
+2,223,096
+18.8
+2,230,862
+Financial investments measured at fair value
+through other comprehensive income
+Financial investments measured at amortised
+cost
+7.1
+747,474
+811,957
+Financial investments measured at fair value
+through profit or loss
+(%)
+Amount
+(%)
+8,806,849
+Discussion and Analysis
+6.9
+Annual Report 2023
+15,546
+1.79
+Personal loans
+8,225,400
+348,029
+4.23
+Overseas business
+1,300,743
+75,477
+5.80
+Total loans and
+25,006,605
+951,845
+3.81
+7,920,324
+1,367,210
+22,246,265
+371,718
+4.69
+45,486
+3.33
+900,063
+4.05
+advances to customers
+Annual Report 2023
+19
+Discussion and Analysis
+866,735
+1.47
+17,341
+1,179,865
+900,063
+4.05
+advances to customers
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+In RMB millions, except for percentages
+2023
+2022
+Average
+Interest Average yield
+Average
+Interest Average yield
+Item
+Interest Income on Investment
+balance
+(%)
+balance
+income
+(%)
+Corporate loans
+14,300,597
+510,998
+3.57
+12,091,996
+467,313
+3.86
+Discounted bills
+income
+22,246,265
+Interest income on investment amounted to RMB338,267 million, representing an increase of RMB41,161 million or 13.9%
+as compared to that of last year, mainly due to the increase of 14.4% in the average balance of investment.
+Interest income on due from central banks was RMB53,815 million, representing an increase of RMB8,390 million or 18.5%
+as compared to that of last year, principally due to the rising average interest rate of due from overseas central banks and
+the increased size of due from domestic central bank.
+1.02
+7,405,878
+68,024
+0.92
+Subtotal
+14,732,229
+272,713
+1.85
+13,208,952
+218,035
+1.65
+Personal deposits
+Time deposits
+9,535,044
+254,834
+2.67
+7,742,072
+223,607
+2.89
+Demand deposits
+5,807,411
+15,135
+0.26
+5,407,007
+25
+73,564
+7,228,582
+Demand deposits
+2.59
+Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from banks and other financial institutions was RMB61,112 million, representing an increase of
+RMB25,032 million or 69.4% as compared to that of last year, primarily due to the rising interest rate of foreign-currency
+lending funds.
+Interest Expense
+Interest Expense on Deposits
+Interest expense on deposits amounted to RMB589,688 million, representing an increase of RMB109,605 million or 22.8%
+over the previous year, primarily due to the increase of 13.8% in the average balance of due to customers and rise of 14
+basis points in the average cost.
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+In RMB millions, except for percentages
+2023
+Average
+Interest
+Average cost
+Average
+Interest Income on Due from Central Banks
+Item
+(%)
+balance
+2022
+Interest
+expense
+Average cost
+(%)
+Corporate deposits
+Time deposits
+7,503,647
+199,149
+2.65
+5,803,074
+150,011
+balance
+3.81
+expense
+25,006,605
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Item
+Assets
+In RMB millions
+Comparison between 2023 and 2022
+Increase/(decrease) due to
+Volume
+Net increase/
+(decrease)
+Interest rate
+Loans and advances to customers
+105,173
+(53,391)
+51,782
+Discussion and Analysis
+Investment
+(898)
+41,161
+Due from central banks
+3,903
+4,487
+8,390
+Due from banks and other financial institutions
+8,602
+16,430
+25,032
+Changes in interest income
+159,737
+42,059
+(33,372)
+8,234,625
+Residential mortgages
+Please see the section headed "Discussion and Analysis Risk Management" for a detailed analysis of the Bank's loans
+and their quality.
+951,845
+Focusing on the customers, the Bank strengthened the overall planning of personal loan business, vigorously marketed
+personal credit loan products, and continuously strengthened credit product innovation and service optimization through
+precise customer selection, proactive credit pre-approval, online real-time lending, multi-scenario access and other
+measures, so as to enhance residents' efficient and convenient credit financing experience and support sustainable recovery
+of consumption. Personal loans increased by RMB418,996 million or 5.1% from the end of last year. Specifically, personal
+consumption loans grew by RMB95,844 million, and personal business loans increased by RMB417,096 million.
+The Bank actively contributed to the construction of a modern industrial system, continued to strengthen its support for
+manufacturing, strategic emerging industries, green finance, inclusive finance, rural revitalization and other key fields, and
+actively supported the construction of major projects in roads, railways, airports, urban rail transit, new urbanization and
+other fields. It also supported the reasonable financing needs of real estate enterprises, and increased the financial support
+for rental housing. As a result, the Bank's corporate loans in key strategic areas such as the Beijing-Tianjin-Hebei region,
+Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, Central China and Chengdu-Chongqing economic
+circle continued to grow. Corporate loans rose by RMB2,318,238 million or 16.8% from the end of last year. Specifically,
+short-term corporate loans and medium to long-term corporate loans increased by RMB530,547 million and RMB1,787,691
+million respectively.
+100.0
+23,210,376
+100.0
+2.8
+640,152
+2.6
+689,731
+26,086,482
+Total
+35.5
+Credit card overdrafts
+930,040
+5.2
+1,347,136
+Personal business loans
+1.0
+232,442
+1.3
+328,286
+27.7
+6,431,991
+24.1
+6,288,468
+4.0
+126,365
+Personal consumption loans
+Deposits
+Average
+Interest
+Average yield
+Average
+Interest Average yield
+Item
+balance
+income
+(%)
+balance
+income
+(%)
+2022
+Short-term loans
+3.10
+4,737,467
+156,622
+3.31
+Medium to long-term loans
+19,351,287
+776,403
+4.01
+17,508,798
+743,441
+Liabilities
+4.25
+5,655,318
+2023
+175,442
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Due to banks and other financial institutions
+Debt securities and certificates of deposit issued
+In RMB millions, except for percentages
+Changes in interest expenses
+Changes in net interest income
+Note:
+71,295
+38,310
+109,605
+6,615
+26,182
+32,797
+14,138
+6,797
+Total loans and
+92,048
+Interest Income
+71,289
+163,337
+67,689
+(104,661)
+(36,972)
+Interest Income on Loans and Advances to Customers
+20,935
+Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the
+changes in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the
+changes resulted from business volume.
+Interest income on loans and advances to customers was RMB951,845 million, RMB51,782 million or 5.8% higher as
+compared to that of last year, mainly due to the increase of 12.4% in the average balance of loans and advances to
+customers, and the decrease of 24 basis points in the average yield partially offset the effect of scale growth.
+Instrument type
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+RMB44,947
+RMB269,612
+RMB69,981
+RMB170,503
+(Domestic)
+Amount recognised in regulatory capital
+Additional tier 1
+capital instrument
+Additional tier 1
+capital instrument
+Common equity tier 1
+capital instrument
+capital instrument
+Common equity tier 1
+RMB342,731
+RMB86,795
+19 October 2006
+RMB70,000
+Including: Original maturity date
+Perpetual
+Perpetual
+Perpetual or dated
+19 October 2006
+Original date of issuance
+Share capital, capital reserve
+Accounting treatment
+Yes
+No maturity date
+Perpetual
+19 September 2019
+18 November 2015
+Other equity
+Other equity
+RMB45,000
+Share capital, capital reserve
+360036
+Preference shares
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Company Law of the People's
+Republic of China, Securities Law
+of the People's Republic of China,
+Guidance of the State Council on
+Launch of Preference Shares Pilot,
+Trial Administrative Measures on
+Preference Shares, Guidance on the
+Issuance of Preference Shares of
+Commercial Banks to Replenish Tier
+1 Capital/China
+1 Capital/China
+Company Law of the People's
+Republic of China, Securities Law
+of the People's Republic of China,
+Guidance of the State Council on
+Launch of Preference Shares Pilot,
+Trial Administrative Measures on
+Preference Shares, Guidance on the
+Issuance of Preference Shares of
+Commercial Banks to Replenish Tier
+The Bank
+(Domestic)
+Preference shares
+Common equity tier 1 capital
+Preference shares
+(Domestic)
+The Bank
+360011
+Securities Law of the People's
+Republic of China/China
+601398
+The Bank
+Ordinary shares
+(H share)
+No maturity date
+Ordinary shares
+(A share)
+The Bank
+1398
+Securities and Futures Ordinance of
+Hong Kong/Hong Kong SAR, China
+(Domestic)
+Common equity tier 1 capital
+Additional tier 1 capital
+Preference shares
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+294
+Additional tier 1 capital
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Additional tier 1 capital
+Additional tier 1 capital
+Common equity tier 1 capital
+Common equity tier 1 capital
+Parent company/Group
+No maturity date
+Including: If convertible, mandatory or optional
+No
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+No
+Non-cumulative
+No
+Fully discretionary
+N/A
+MA
+N/A
+Including: If convertible, fully or partially
+N/A
+No
+N/A
+M.
+conversion
+N/A
+Tier 2 Capital Trigger Event
+Fully or partially convertible when
+an Additional Tier 1 Capital Trigger
+Event occurs;
+X27
+Capital Trigger Event or
+Additional Tier 1
+Yes
+Non-cumulative
+Yes
+Non-cumulative
+Non-cumulative
+No
+Fully discretionary
+Yes
+Fully discretionary
+Yes
+and 22 November 2025
+rate) between 23 November 2020
+No
+Issuer call (subject to prior supervisory approval)
+No
+Convertible or non-convertible
+September 2024, in full or
+The First Redemption Date is 24
+Perpetual
+No maturity date
+Yes
+Commences on the First
+Redemption Date (18 November
+2020) and ends on the completion
+date of redemption or
+conversion of all the
+Domestic Preference Shares
+partial amount
+The First Redemption Date is 18
+November 2020, in full or
+N/A
+NA
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+N/A
+N/A
+Including: Optional call date, contingent call dates and
+No
+partial amount
+Commences on the First
+Redemption Date (24 September
+2024) and ends on the completion
+date of redemption or
+conversion of all the
+Domestic Preference Shares
+Coupons/dividends
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+N/A
+Fully discretionary
+Including: Fully discretionary, partially discretionary or
+Including: Existence of a dividend stopper
+4.2% (dividend rate) before 24
+September 2024
+Including: If convertible, conversion trigger(s)
+4.5% (dividend rate) before 23
+November 2020, 4.58% (dividend
+N/A
+Including: Coupon rate and any related index
+Fixed to floating
+Fixed to floating
+Floating
+Floating
+Including: Fixed or floating dividend/coupon
+N/A
+1,127
+Financial investments measured at FVTOCI
+647
+2,265
+X09
+16,623
+Reference
+scope of
+consolidation
+2,112,431
+Balance sheet
+under regulatory
+31 December 2023
+Including: Undeducted portion of non-significant minority investments in capital
+instruments issued by financial institutions that are not subject to
+consolidation
+by financial institutions that are under control but not subject to
+consolidation
+Including: Investments in common equity tier 1 capital instruments issued
+Long-term equity investments
+issued by financial institutions that are not subject to consolidation
+Including: Significant minority investments in tier 2 capital instruments issued by
+financial institutions that are not subject to consolidation
+Including: Non-significant minority investments in tier 2 capital instruments
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to consolidation
+Financial investments measured at amortised cost
+Including: Significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X10
+X29
+8,787,988
+X30
+X14
+22,854
+Intangible assets
+3,425
+Interest receivable
+385,866
+Other assets
+Including: Non-significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X13
+Including: Undeducted portion of significant minority investments in capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X12
+2,822
+X11
+7,980
+72,758
+X31
+27,281
+Including: Land use rights
+Items
+X08
+36,710
+Reference
+26,142,934
+25,386,933
+scope of
+consolidation
+31 December 2023
+Balance sheet
+under regulatory
+Including: Non-significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+Financial investments measured at FVTPL
+Financial investments
+tier 2 capital under the internal ratings-based approach
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in
+in tier 2 capital under the weighted approach
+Including: Valid cap of surplus provision for loan impairment
+Less: Provision for loan impairment under the weighted approach
+fully convertible when a Tier 2
+Capital Trigger Event occurs
+The initial conversion price is equal
+to the average trading price of
+the A shares of the Bank for the
+20 trading days preceding 25 July
+2014, the date of publication of
+the Board resolution in respect of
+X01
+5,427
+X02
+719,291
+163,171
+Annual Report 2023
+292
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to consolidation
+Including: Non-significant minority investments in additional tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X07
+176
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+X06
+Including: Significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X05
+50
+686,139
+X04
+327,955
+X03
+166
+X26
+14,364
+Other receivables
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+Main features of regulatory capital instruments
+(iv) Main features of eligible capital instruments
+Including: Valid portion of tier 2 capital
+Including: Valid portion of additional tier 1 capital
+Including: Valid portion of common equity tier 1 capital
+Minority interests
+Retained profits
+General reserve
+Surplus reserve
+Other
+Foreign currency translation reserve
+31 December 2023
+Balance sheet
+under regulatory
+scope of
+consolidation
+Reference
+560
+X25
+3,623
+X23
+1,905,968
+X22
+561,303
+X21
+Changes in share of other owners' equity of associates and joint ventures
+428,007
+(15,948)
+(748)
+X20
+(2,867)
+(2,901)
+21,160
+X24
+(1,003)
+X15
+Including: Cash flow hedging reserve that relates to the hedging of items that
+are not fair-valued on the balance sheet
+Reserve for changes in fair value of financial assets
+X17
+635,672
+Including: Valid portion of tier 2 capital instruments and their premiums
+1,364,630
+Debt securities issued
+139,895
+Other
+3,432
+Repossessed assets
+7,060
+Long-term deferred expenses
+X16
+8,488
+Goodwill
+200,712
+Share capital
+356,407
+X18
+Other equity instruments
+Other comprehensive income
+Items
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+293
+Annual Report 2023
+X19
+Reserve for cash flow hedging
+148,164
+X32
+219,717
+Including: Perpetual bonds
+X28
+134,614
+Including: Preference shares
+354,331
+Capital reserve
+the issuance plan
+Mandatory
+capital bonds (Offshore)
+Tier 2 Capital Trigger Event
+N/A
+N/A
+Mandatory
+Including: If convertible, mandatory or optional
+the issuance plan
+the Board resolution in respect of
+H shares of the Bank for the 20
+trading days preceding 30 August
+2018, the date of publication of
+NA
+N/A
+NA
+N/A
+N/A
+NA
+Non-viability Trigger Event occurs
+The initial conversion price is equal
+to the average trading price of the
+Including: If convertible, conversion rate
+N/A
+conversion
+Including: If convertible, specify instrument type
+convertible into
+Common equity tier 1 capital
+Undated additional tier 1
+capital bonds (Domestic)
+Preference shares
+(Offshore)
+Main features of regulatory capital instruments
+Write-down feature
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+297
+Annual Report 2023
+N/A
+converts into
+N/A
+N/A
+The Bank
+Including: If convertible, specify issuer of instrument it
+N/A
+N/A
+N/A
+N/A
+Undated additional tier 1
+capital bonds (Domestic)
+N/A
+Fully or partially convertible when a
+Fully discretionary
+Fully discretionary
+Fully discretionary
+Fully discretionary
+Yes
+Yes
+Yes
+Yes
+September 2026
+3.20% (interest rate) before 24
+2026
+2024
+September 2025
+3.58% (dividend rate) before 23 4.45% (interest rate) before 30 July 4.04% (interest rate) before 8 June
+Fixed to floating
+No
+No
+No
+No
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+Non-viability Trigger Event
+Including: If convertible, conversion trigger(s)
+No
+N/A
+No
+Yes
+Convertible or non-convertible
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Including: Non-cumulative or cumulative
+No
+Fixed to floating
+Undated additional tier 1
+No
+Regulatory treatment
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+The Bank
+1928007
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+1928006
+law
+shall be governed by, and
+construed in accordance with PRC
+except that the provisions of the
+Notes relating to subordination
+Tier 2 capital bonds
+The Bank
+Rule 144A ISIN: US455881AD47
+Regulation S ISIN: USY39656AC06
+The Notes and the Fiscal Agency
+Agreement shall be governed
+by, and shall be construed in
+accordance with New York law,
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Additional tier 1 capital
+Tier 2 capital
+Tier 2 capital
+Annual Report 2023
+298
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+The Bank
+2128044
+Parent company/Group
+Additional tier 1 capital instrument
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Additional tier 1 capital
+Including: Post-transition arrangement of Regulation
+Tier 2 capital
+Instrument type
+Total loans and advances to customers
+Unique identifier
+Main features of regulatory capital instruments
+Issuer
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, permanent or temporary
+N/A
+Including: If write-down, full or partial
+Event
+Non-viability Trigger Event
+Yes
+Yes
+Non-viability Trigger Event
+Additional Tier 1 Capital Trigger
+Event or Tier 2 Capital Trigger
+N/A
+Including: If write-down, write-down trigger(s)
+Yes
+N/A
+N/A
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+No
+N/A
+N/A
+N/A
+N/A
+No
+No
+No
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Undated additional tier 1
+capital bonds (Domestic)
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Permanent write-down
+N/A
+Permanent write-down
+N/A
+occurs
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+Permanent write-down
+N/A
+Full or partial write-down when an
+Additional Tier 1 Capital Trigger
+Event occurs; full write-down
+when a Tier 2 Capital Trigger Event
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Fixed to floating
+Fixed to floating
+Including: Redemption incentive mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Subordinated to depositor,
+general creditor, creditor of the
+subordinated debts and preference
+shareholders
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+Governing law(s) of the instrument
+Unique identifier
+The Bank
+1928018
+Undated additional tier 1
+capital bonds (Domestic)
+(Offshore)
+The Bank
+4620
+Main features of regulatory capital instruments
+Issuer
+Preference shares
+N/A
+N/A
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+N/A
+No
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+No
+N/A
+Subordinated to depositor,
+general creditor, creditor of the
+subordinated debts and preference
+shareholders
+No
+N/A
+No
+The creation and issue of the
+Offshore Preference Shares
+and the rights and obligations
+(including non-contractual rights
+and obligations) attached to them
+are governed by, and shall be
+construed in accordance with, PRC
+law
+N/A
+No
+Including: If write-down, permanent or temporary
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+Write-down feature
+converts into
+Including: If convertible, specify issuer of instrument it
+Including: If convertible, specify instrument type
+convertible into
+Main features of regulatory capital instruments
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+295
+Annual Report 2023
+Mandatory
+the issuance plan
+Fully or partially convertible when
+an Additional Tier 1 Capital Trigger
+Event occurs;
+fully convertible when a Tier 2
+Capital Trigger Event occurs
+The initial conversion price is equal
+to the average trading price of the
+A shares of the Bank for the 20
+trading days preceding 30 August
+2018, the date of publication of
+the Board resolution in respect of
+Including: If temporary write-down, description of
+write-up mechanism
+Ordinary shares
+(A share)
+Ordinary shares
+(H share)
+Preference shares
+(Domestic)
+=
+No
+No
+=
+The Bank
+The Bank
+N/A
+=
+MA
+Common equity tier 1 capital
+Common equity tier 1 capital
+N/A
+N/A
+NA
+(Domestic)
+Preference shares
+N/A
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Undated additional tier 1
+capital bonds (Domestic)
+The Bank
+2128021
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Perpetual
+No maturity date
+Perpetual
+No maturity date
+Yes
+No maturity date
+Yes
+Perpetual
+capital bonds (Offshore)
+Undated additional tier 1
+Undated additional tier 1
+capital bonds (Domestic)
+Undated additional tier 1
+capital bonds (Domestic)
+(Offshore)
+Preference shares
+Including: Subsequent call dates, if applicable
+Including: Optional call date, contingent call dates and
+redemption amount
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Main features of regulatory capital instruments
+Perpetual or dated
+Perpetual
+No maturity date
+Yes
+Yes
+The First Redemption Date is 23
+September 2025, in full or
+partial amount
+23 September in each year
+after
+the First Redemption Date
+Including: Fully discretionary, partially discretionary or
+mandatory cancellation of coupons/dividends
+Including: Existence of a dividend stopper
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Coupons/dividends
+Payment Date since the First
+Redemption Date (24 September
+2026). The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Redemption of present bonds in
+full or in part on each Distribution
+The First Redemption Date is 24
+September 2026, in full or
+partial amount
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Redemption of present bonds in
+full or in part on each Distribution
+partial amount
+2026, in full or
+The First Redemption Date is 8 June
+Redemption of present bonds in
+full or in part on each Distribution
+Payment Date since the First
+Redemption Date (30 July 2024).
+The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+July 2024, in full or
+partial amount
+The First Redemption Date is 30
+Payment Date since the First
+Redemption Date (8 June 2026).
+296 Annual Report 2023
+24 September 2021
+Other equity
+Amount recognised in regulatory capital
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+(in millions, as at the latest reporting date)
+Additional tier 1 capital
+Additional tier 1 capital
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Regulatory treatment
+relating to subordination of the
+Notes shall be governed by and
+construed in accordance with PRC
+law and regulations
+However, the provisions in the
+terms and conditions of the Notes
+Undated additional tier 1
+capital bonds (Offshore)
+The Bank
+Regulation S ISIN: XS2383421711
+The Notes and any other non-
+contractual obligations arising out
+of or in connection with them shall
+be governed by and construed
+in accordance with English law.
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Additional tier 1 capital
+Additional Tier 1
+Capital Trigger Event or
+Par value of instrument (in millions)
+Parent company/Group
+Additional tier 1 capital instrument
+4 June 2021
+26 July 2019
+23 September 2020
+Other equity
+Other equity
+USD6,160
+RMB70,000
+Parent company/Group
+Additional tier 1 capital instrument
+RMB equivalent 19,687
+RMB80,000
+Original date of issuance
+Accounting treatment
+Additional tier 1 capital instrument
+RMB equivalent 39,742
+RMB69,992
+RMB79,987
+Parent company/Group
+Parent company/Group
+Additional tier 1 capital instrument
+USD2,900
+Other equity
+Loans and advances to customers
+12,868
+(iii) Description of related items
+X03
+79
+Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+327,955
+255,944
+X04
+Capital instruments subject to phase-out arrangements
+80
+81
+641,029
+82
+84
+85
+Valid cap to common equity tier 1 capital instruments for
+the current period due to phase-out arrangements
+Excluded from common equity tier 1 capital due to cap
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period due to
+cap
+290 Annual Report 2023
+38,000
+38,000
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(ii) Consolidated financial statements
+31 December 2023 31 December 2023 31 December 2022
+83
+Consolidated
+balance sheet
+as in published
+719,291
+78
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Items
+Valid caps of surplus provision for loan impairment
+in tier 2 capital
+31 December
+31 December
+2023
+2022
+Surplus provision for loan impairment under the internal
+ratings-based approach
+Reference
+Provision for loan impairment under the weighted
+approach
+36,710
+31,195
+X01
+77
+Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+5,427
+19,820
+X02
+76
+financial
+statements*
+Balance sheet
+under
+regulatory
+Placements with banks and other financial
+institutions
+702,459
+702,459
+826,799
+826,799
+Derivative financial assets
+75,339
+75,339
+123,858
+87,205
+Reverse repurchase agreements
+1,224,257
+1,216,562
+864,122
+858,304
+Loans and advances to customers
+25,386,933
+25,386,933
+22,591,676
+87,205
+123,858
+139,425
+139,425
+scope of
+consolidation*
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+31 December 2022
+Balance sheet
+under
+regulatory
+scope of
+consolidation*
+Assets
+Cash and balances with central banks
+4,042,293
+4,042,293
+3,427,892
+3,427,892
+Due from banks and other financial
+institutions
+414,258
+378,539
+365,733
+323,131
+Precious metals
+Annual Report 2023 289
+N/A
+101,072
+103,831
+Deferred tax assets arising from temporary differences (net
+of deferred tax liabilities)
+Other that should be deducted from tier 2 capital
+Total regulatory adjustments to tier 2 capital
+Tier 2 capital
+970,181
+805,084
+59
+Total capital (tier 1 capital+ tier 2 capital)
+4,707,100
+4,281,079
+60 Total risk-weighted assets
+24,641,631
+58
+22,225,272
+61
+Common equity tier 1 capital adequacy ratio
+13.72%
+14.04%
+62
+Tier 1 capital adequacy ratio
+15.17%
+15.64%
+63
+Requirements for capital adequacy ratio and reserve capital
+57
+56c
+--
+Items
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Items
+Tier 2 capital: Regulatory adjustments
+52
+53
+54
+55
+56a
+56b
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks,
+or between banks and other financial institutions
+Deductible portion of non-significant minority investments
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+Investments in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+31 December
+31 December
+2023
+2022
+Reference
+- X31
+Capital adequacy ratio
+22,591,551
+19.10%
+64
+6.0%
+6.0%
+8.0%
+8.0%
+Amounts below the thresholds for deduction
+72
+Undeducted portion of non-significant minority
+182,842
+176,987
+5.0%
+73
+X05+X07+X08+
+X09+X12+X29+
+X30
+29,712
+30,838
+X06+X10+X13
+74
+Mortgage servicing rights (net of deferred tax liabilities)
+N/A
+75
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+are not subject to consolidation
+5.0%
+Capital adequacy ratio
+71
+Institution specific buffer requirements
+4.0%
+4.0%
+65
+Including: Capital conservation buffer requirements
+2.5%
+2.5%
+868
+66
+Including: Countercyclical buffer requirements
+67
+Including: G-SIB buffer requirements
+1.5%
+1.5%
+68 Percentage of common equity tier 1 capital meeting
+buffers to risk-weighted assets
+8.72%
+9.04%
+Domestic minima for regulatory capital
+69
+Common equity tier 1 capital adequacy ratio
+70
+19.26%
+Financial investments
+Tier 1 capital adequacy ratio
+11,586,558
+Balance sheet
+under
+regulatory
+scope of
+consolidation*
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+Balance sheet
+under
+regulatory
+scope of
+statements*
+consolidation*
+356,407
+356,407
+356,407
+356,407
+Other equity instruments
+354,331
+354,331
+354,331
+354,331
+Share capital
+financial
+balance sheet
+as in published
+Consolidated
+1,369,777
+1,364,630
+905,953
+900,807
+Deferred tax liabilities
+3,930
+Other liabilities
+Total liabilities
+750,603
+40,920,491
+3,857
+465,166
+40,619,849
+3,950
+718,486
+36,094,727
+3,706
+462,600
+35,831,369
+Annual Report 2023
+291
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Equity
+31 December 2023 31 December 2023 31 December 2022 31 December 2022
+Preference shares
+Debt securities issued
+134,614
+134,614
+Retained profits
+1,912,067
+1,905,968
+1,771,747
+1,766,288
+Equity attributable to equity holders of the
+parent company
+3,756,887
+3,754,740
+496,406
+3,496,109
+Minority interests
+Total equity
+19,701
+3,776,588
+12,868
+3,767,608
+19,310
+3,515,419
+11,761
+3,504,690
+11,849,668
+(*) Prepared in accordance with PRC GAAP.
+3,492,929
+496,719
+561,303
+561,637
+134,614
+Perpetual bonds
+219,717
+219,717
+219,717
+219,717
+Capital reserve
+148,164
+148,174
+148,174
+Other comprehensive income
+(4,078)
+560
+(23,756)
+(20,839)
+Surplus reserve
+428,359
+428,007
+392,487
+392,162
+General reserve
+134,614
+102,031
+148,164
+79,171
+73,858
+272,832
+272,738
+274,839
+274,771
+24,186
+24,156
+17,072
+17,002
+65,790
+104,669
+101,117
+101,072
+395,982
+385,866
+330,341
+328,398
+44,697,079
+44,387,457
+39,610,146
+103,831
+72,758
+64,778
+7,549,344
+10,533,702
+10,302,218
+102,074
+Financial investments measured at FVTPL
+811,957
+686,139
+747,474
+Financial investments measured at FVTOCI
+2,230,862
+2,112,431
+2,223,096
+637,851
+2,115,023
+Financial investments measured at
+amortised cost
+Long-term equity investments
+Fixed assets
+Construction in progress
+Deferred tax assets
+Other assets
+8,806,849
+7,563,132
+39,336,059
+Total assets
+8,787,988
+Due to central banks
+Repurchase agreements
+1,018,106
+1,007,607
+574,778
+573,279
+Certificates of deposit
+385,198
+385,198
+375,452
+96,350
+Due to customers
+33,522,328
+29,870,491
+29,870,491
+Employee benefits payable
+52,098
+51,693
+49,413
+Liabilities
+49,034
+33,521,174
+96,350
+375,452
+76,251
+231,374
+Due to banks and other financial institutions
+2,841,385
+231,374
+2,841,385
+145,781
+2,664,901
+145,781
+2,664,901
+Placements from banks and other financial
+institutions
+79,263
+528,473
+Taxes payable
+76,251
+522,811
+522,811
+Financial liabilities measured at FVTPL
+62,859
+62,716
+64,287
+64,126
+528,473
+Derivative financial liabilities
+Including: Original maturity date
+RMB35,000
+RMB5,000
+RMB45,000
+Debt securities issued
+Debt securities issued
+18 January 2022
+Dated
+20 January 2032
+Perpetual or dated
+Yes
+Debt securities issued
+18 January 2022
+Dated
+20 January 2037
+Yes
+Debt securities issued
+RMB5,000
+Issuer call (subject to prior supervisory approval)
+RMB5,000
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+RMB45,000
+RMB5,000
+RMB35,000
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Original date of issuance
+Tier 2 capital instrument
+Fixed
+12 April 2022
+No
+No
+No
+Parent company/Group
+Including: Existence of a dividend stopper
+3.74%
+3.50%
+3.60%
+3.28%
+Fixed
+Fixed
+Fixed
+Including: Coupon rate and any related index
+12 April 2022
+Dated
+14 April 2032
+Yes
+Including: Fixed or floating dividend/coupon
+N/A
+N/A
+N/A
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+14 April 2032, in full amount
+14 April 2027, in full amount
+20 January 2032, in full amount
+20 January 2027, in full amount
+Including: Optional call date, contingent call dates and
+14 April 2037
+Yes
+Dated
+Coupons/dividends
+Tier 2 capital
+No
+Tier 2 capital
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+subordinated debts that have been
+capital instruments and hybrid
+capital bonds; pari passu with other
+N/A
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Permanent write-down
+N/A
+Partial or full write-down
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Including: Fully discretionary, partially discretionary or
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+304 Annual Report 2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Issuer
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Amount recognised in regulatory capital
+Including: Eligible to the parent company/group level
+Instrument type
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Regulatory treatment
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Tier 2 capital
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+2228025
+The Bank
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+2228024
+Tier 2 capital bonds
+The Bank
+2228005
+Tier 2 capital bonds
+The Bank
+2228004
+Unique identifier
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Mandatory
+capital bonds (Domestic)
+Mandatory
+Permanent write-down
+N/A
+Partial or full write-down
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+Yes
+N/A
+Permanent write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+N/A
+Partial or full write-down
+Permanent write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Yes
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, write-down trigger(s)
+Write-down feature
+converts into
+N/A
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Undated additional tier 1
+RMB29,997
+Tier 2 capital bonds
+RMB equivalent 5,672
+Amount recognised in regulatory capital
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Main features of regulatory capital instruments
+25 March 2029, in full amount
+25 March 2024, in full amount
+N/A
+The First Redemption Date is 26
+Yes
+Yes
+No
+Yes
+25 March 2034
+25 March 2029
+NA
+21 September 2025
+Dated
+21 March 2019
+21 March 2019
+Debt securities issued
+Debt securities issued
+RMB10,000
+RMB45,000
+USD2,000
+Debt securities issued
+21 September 2015
+Dated
+Perpetual
+No maturity date
+24 November 2021
+RMB30,000
+Other equity
+Tier 2 capital bonds
+RMB10,000
+Tier 2 capital bonds
+RMB45,000
+Dated
+N/A
+NA
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+No
+=
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+No
+No
+=
+Convertible or non-convertible
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+N/A
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+No
+Mandatory
+305
+Mandatory
+N/A
+Including: If convertible, fully or partially
+NA
+N/A
+NA
+Including: If convertible, specify issuer of instrument it
+convertible into
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+Including: If convertible, specify instrument type
+N/A
+conversion
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+Partial or full write-down
+Permanent write-down
+N/A
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+The Bank
+2128052
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+2128051
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Tier 2 capital bonds
+The Bank
+2128002
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+Tier 2 capital bonds
+The Bank
+2028050
+Unique identifier
+Issuer
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+302
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+pari passu with other tier 2 capital
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+RMB10,000
+RMB50,000
+RMB30,000
+RMB10,000
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+RMB10,000
+RMB50,000
+RMB30,000
+RMB10,000
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+issued by the Issuer and are pari
+passu with the present bonds; and
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Amount recognised in regulatory capital
+Including: Eligible to the parent company/group level
+Instrument type
+Governing Capital of Commercial Banks (Provisional)
+Tier 2 capital instrument
+subordinated debts that have been
+capital instruments and hybrid
+capital bonds; pari passu with other
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Yes
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, write-down trigger(s)
+Write-down feature
+converts into
+N/A
+NA
+N/A
+NA
+N/A
+NA
+N/A
+NA
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Including: If convertible, specify issuer of instrument it
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+Including: If convertible, specify instrument type
+conversion
+N/A
+N/A
+N/A
+N/A
+convertible into
+Debt securities issued
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Partial or full write-down
+Permanent write-down
+N/A
+(in millions, as at the latest reporting date)
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Permanent write-down
+N/A
+Partial or full write-down
+viable
+the Issuer would become non-
+viable
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+Yes
+N/A
+Permanent write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+N/A
+injection of capital or equivalent
+support is necessary, without which
+Permanent write-down
+Original date of issuance
+12 November 2020
+Dated
+N/A
+KA
+N/A
+N/A
+NA
+Including: If convertible, specify instrument type
+conversion
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+NA
+N/A
+convertible into
+Including: If convertible, specify issuer of instrument it
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+equity capital, additional tier 1
+general creditor; but senior to
+Subordinated to depositor and
+N/A
+Partial or full write-down
+Permanent write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+No
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, write-down trigger(s)
+Write-down feature
+converts into
+N/A
+NA
+N/A
+NA
+N/A
+NA
+N/A
+NA
+Yes
+=
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+4.15%
+4.45%
+Fixed
+Fixed
+Fixed
+Fixed
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+3.48%
+Including: Subsequent call dates, if applicable
+15 December 2031, in full amount
+15 December 2026, in full amount
+21 January 2026, in full amount
+Including: Optional call date, contingent call dates and 16 November 2030, in full amount
+15 December 2036
+Yes
+15 December 2031
+Yes
+Debt securities issued
+13 December 2021
+Dated
+Debt securities issued
+13 December 2021
+Dated
+Debt securities issued
+19 January 2021
+Dated
+21 January 2031
+Yes
+Yes
+Issuer call (subject to prior supervisory approval)
+16 November 2035
+Including: Original maturity date
+redemption amount
+Perpetual or dated
+3.74%
+No
+No
+No
+=
+Convertible or non-convertible
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+303
+Annual Report 2023
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Including: Existence of a dividend stopper
+Non-cumulative
+No
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+No
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+No
+No
+No
+Par value of instrument (in millions)
+Debt securities issued
+22 September 2020
+Dated
+Original date of issuance
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Debt securities issued
+RMB10,000
+RMB50,000
+RMB10,000
+RMB30,000
+RMB10,000
+RMB50,000
+RMB10,000
+RMB30,000
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Including: Eligible to the parent company/group level
+Instrument type
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+18 August 2022
+Dated
+22 August 2032
+Yes
+Debt securities issued
+18 August 2022
+Dated
+22 August 2037
+Yes
+Debt securities issued
+Debt securities issued
+No
+Including: Existence of a dividend stopper
+3.34%
+3.00%
+3.32%
+3.02%
+Fixed
+Fixed
+Fixed
+Fixed
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+Tier 2 capital
+N/A
+N/A
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+10 November 2032, in full amount
+10 November 2027, in full amount
+22 August 2032, in full amount
+22 August 2027, in full amount
+Including: Optional call date, contingent call dates and
+10 November 2037
+Yes
+10 November 2032
+Yes
+8 November 2022
+Dated
+8 November 2022
+Dated
+N/A
+No
+Tier 2 capital
+Tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+No
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Regulatory treatment
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+The Bank
+092280135
+Tier 2 capital
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+092280066
+Tier 2 capital bonds
+The Bank
+092280065
+Unique identifier
+Issuer
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+306 Annual Report 2023
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+Tier 2 capital bonds
+The Bank
+092280134
+No
+No
+Including: Fully discretionary, partially discretionary or
+N/A
+Permanent write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+N/A
+Partial or full write-down
+Permanent write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Yes
+Yes
+Yes
+Yes
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+Write-down feature
+converts into
+N/A
+NA
+MA
+N/A
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+N/A
+Annual Report 2023
+308
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+subordinated debts that have been
+N/A
+capital instruments and hybrid
+capital bonds; pari passu with other
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned feature
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Permanent write-down
+N/A
+Partial or full write-down
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+NA
+N/A
+N/A
+=
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+No
+No
+=
+Convertible or non-convertible
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+307
+Annual Report 2023
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+Non-cumulative
+Including: If convertible, conversion trigger(s)
+Including: If convertible, conversion trigger(s)
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+NA
+Including: If convertible, specify issuer of instrument it
+convertible into
+Including: If convertible, specify instrument type
+conversion
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+Accounting treatment
+No
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+N/A
+NA
+299
+Annual Report 2023
+MA
+N/A
+N/A
+MA
+N/A
+MA
+N/A
+N/A
+HAP
+NA
+N/A
+N/A
+NA
+N/A
+NA
+Including: If convertible, specify issuer of instrument it
+converts into
+convertible into
+Including: If convertible, specify instrument type
+N/A
+N/A
+N/A
+Undated additional tier 1
+capital bonds (Domestic)
+Tier 2 capital bonds
+Write-down feature
+Including: If write-down, write-down trigger(s)
+Non-compliant transitioned features
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor, pari passu with
+other subordinated debts
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+(specify instrument type immediately senior to
+instrument)
+Position in subordination hierarchy in liquidation
+Permanent write-down
+N/A
+N/A
+Permanent write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+N/A
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Partial or full write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Tier 2 capital bonds
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Partial or full write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+Permanent write-down
+N/A
+Including: If temporary write-down, description
+of write-up mechanism
+Including: If write-down, permanent or temporary
+Including: If write-down, full or partial
+Yes
+Non-viability Trigger Event
+Tier 2 capital bonds
+Yes
+Whichever occurs earlier: (i) NFRA
+No
+Including: If convertible, mandatory or optional
+conversion
+N/A
+Mandatory
+Fully discretionary
+No
+No
+Yes
+26 November 2026
+4.51%
+Fixed
+Fixed
+4.26%
+Fixed
+4.875%
+3.65% (interest rate) before
+Fixed to floating
+N/A
+N/A
+NA
+Including: Existence of a dividend stopper
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Coupons/dividends
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Redemption of present bonds in
+full or in part on each Distribution
+Payment Date since the First
+Redemption Date (26 November
+2026). The Issuer has the right to
+amount
+November 2026 in full or partial
+Including: Subsequent call dates, if applicable
+Including: Optional call date, contingent call dates and
+redemption amount
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Perpetual or dated
+Mandatory
+No
+Mandatory
+Including: Fully discretionary, partially discretionary or
+mandatory cancellation of coupons/dividends
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+N/A
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+Convertible or non-convertible
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+No
+No
+Including: If yes, specify non-compliant features
+N/A
+4.15%
+4.20%
+4.69%
+4.40%
+Fixed
+Fixed
+Fixed
+Fixed
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+16 November 2025, in full amount
+24 September 2025, in full amount
+26 April 2029, in full amount
+26 April 2024, in full amount
+Including: Optional call date, contingent call dates and
+16 November 2030
+Yes
+24 September 2030
+Yes
+12 November 2020
+Dated
+Debt securities issued
+24 April 2019
+Dated
+26 April 2034
+Yes
+Including: Existence of a dividend stopper
+No
+No
+No
+Tier 2 capital bonds
+No
+No
+No
+=
+Convertible or non-convertible
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+301
+Annual Report 2023
+Non-cumulative
+Non-cumulative
+24 April 2019
+Dated
+26 April 2029
+Yes
+Non-cumulative
+No
+No
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+No
+Non-cumulative
+Issuer call (subject to prior supervisory approval)
+Debt securities issued
+Debt securities issued
+Regulatory treatment
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+2028049
+The Bank
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+1928012
+Tier 2 capital bonds
+The Bank
+1928011
+Unique identifier
+Issuer
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+300 Annual Report 2023
+N/A
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+Tier 2 capital bonds
+The Bank
+2028041
+=
+Including: Post-transition arrangement of Regulation
+Including: Eligible to the parent company/group level
+Instrument type
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+RMB30,000
+RMB30,000
+RMB60,000
+RMB10,000
+RMB45,000
+Par value of instrument (in millions)
+RMB60,000
+RMB10,000
+RMB45,000
+Governing Capital of Commercial Banks (Provisional)
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Parent company/Group
+Tier 2 capital instrument
+Including: If convertible, mandatory or optional
+14
+Deposits held at other financial institutions
+11
+Other liabilities:
+9,103
+891,549
+144,638
+1,030,545
+1,054,825
+12
+NSFR derivative liabilities
+57,141
+13
+assets
+All other liabilities and equities not included
+in the above categories
+891,549
+144,638
+973,404 1,054,825
+Total ASF
+30,872,838
+Required stable funding (RSF) items
+15
+Total NSFR high-quality liquid assets (HQLA)
+16
+Deposits held at other financial institutions
+228,237
+9,103
+20,316
+2,221 4,410,426
+140,602 4,695,453
+142,823 9,105,879
+7 Wholesale funding:
+569∞ ∞ 2
+8
+9
+Operational deposits
+Other wholesale funding
+10 Liabilities with matching interdependent
+to < 1
+year
+≥ 1 year
+Weighted
+value
+8,586
+1,018,763
+523,674
+523,674 4,623,876
+7,354,378 10,498,156
+13,499
+3,947 16,088,258
+33,192
+7,321,186
+55,964
+10,442,192
+8,620,911 10,171,629
+8,280,621 527,202
+340,290 9,644,427
+8,462
+2,200
+94,937
+5,037
+1,747 15,993,321
+1,027,349
+4,623,876
+2,239
+3,690
+1,518,072
+129,326
+< 6
+to <1
+Weighted
+No.
+Items
+maturity
+months
+year
+≥ 1 year
+22
+Residential mortgages, of which:
+No
+3,591
+23
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+2,368
+1,006
+6,314,285
+66,498
+value
+5,357,458
+45,023
+24
+Securities that are not in default and do
+not qualify as HQLA, including exchange-
+traded equities
+2,270
+291,204
+3,415
+6 months
+Unweighted value
+31 December 2023
+for operational purposes
+17
+Loans and securities:
+2,270
+18
+Loans to financial institutions secured by
+Level 1 HQLA
+143
+5,516,388 3,922,982 20,076,829 20,970,581
+567,123
+84,787
+117
+19
+1,559,256 407,349
+195,707
+633,387
+20
+Loans to financial institutions secured by
+non-Level 1 HQLA and unsecured loans
+to financial institutions
+Loans to retail and small business
+customers, non-financial institutions,
+sovereigns, central banks and PSES, of
+which:
+3,095,214 3,360,971 12,530,369 13,789,564
+21
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+679,415
+841,040
+313,569
+950,646
+Annual Report 2023 315
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Less stable deposits
+Stable deposits
+business customers:
+Retail deposits and deposits from small
+86,880
+9
+Secured funding
+11,859
+10
+Additional requirements, of which:
+3,631,265
+1,441,553
+11
+Outflows related to derivative exposures and other collateral requirements
+1,250,518
+86,880
+1,250,518
+Outflows related to loss of funding on debt products
+13
+Credit and liquidity facilities
+14
+Other contractual funding obligations
+15
+Other contingent funding obligations
+16
+Total cash outflows
+2,380,747
+191,035
+12
+Unsecured debt
+8
+4,050,371
+unweighted
+value
+Total
+weighted
+value
+2
+Retail deposits and deposits from small business customers of which:
+17,127,129
+1,709,451
+3
+Stable deposits
+51,899
+1,928
+4
+Less stable deposits
+17,075,230
+1,707,523
+5
+Unsecured wholesale funding, of which:
+17,212,843
+6,173,534
+6
+Operational deposits (excluding those generated from correspondent
+banking activities)
+8,373,703
+2,036,283
+7
+Non-operational deposits (all counterparties)
+8,752,260
+89,038
+151,104 1,036,351
+89,019
+96,472
+122.03%
+314
+Annual Report 2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+8.
+Quantitative Information Disclosure of Net Stable Funding Ratio (NSFR) Using
+Advanced Capital Management Approach
+The Group discloses net stable funding ratio information in accordance with Measures for the Disclosure of Information on
+Net Stable Funding Ratio by Commercial Banks (Yin Bao Jian Fa [2019] No. 11).
+31 December 2023
+Unweighted value
+6 months
+No
+No.
+Data of the above table are the simple arithmetic average of the 92 calendar days' figures of the recent quarter.
+Items
+< 6
+months
+Available stable funding (ASF) items
+1
+Capital:
+4,100,202
+2
+4,100,202
+3
+4
+Regulatory capital
+Other capital instruments
+maturity
+Liquidity coverage ratio (%)
+5,996,906
+7,303,208
+9,521,888
+Cash inflows
+17
+Secured lending (including reverse repos and securities borrowing)
+1,167,241
+914,067
+18
+Inflows from fully performing exposures
+2,096,795
+1,367,885
+19
+Other cash inflows
+1,245,113
+1,243,030
+20
+Total cash inflows
+4,509,149
+3,524,982
+Total Adjusted
+Value
+21
+Total HQLA
+22
+Total net cash outflows
+23
+6,668,947
+1,105,385
+25
+Assets with matching interdependent
+Annual Report 2023
+317
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+No.
+Items
+22
+Residential mortgages, of which:
+23
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+30 September 2023
+305,444 907,055
+Unweighted value
+to < 1
+No
+< 6
+Weighted
+maturity
+months
+year
+≥ 1 year
+2,176
+782
+3,442
+6,412,165
+6 months
+605,105
+845,734
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+16
+181,618
+26,306
+1,579
+2,131
+107,121
+for operational purposes
+17
+Loans and securities:
+2,471 6,353,025 3,856,617 19,809,048 20,953,325
+18
+Loans to financial institutions secured by
+Level 1 HQLA
+1,059,538
+19
+158,300
+-
+1,564,085 475,252
+246,450
+718,963
+7
+274
+20
+Loans to financial institutions secured by
+non-Level 1 HQLA and unsecured loans
+to financial institutions
+Loans to retail and small business
+customers, non-financial institutions,
+sovereigns, central banks and PSES, of
+which:
+3,282,299 3,247,418 12,067,732 13,420,905
+21
+value
+5,443,723
+1,250,981
+780
+31,931
+NSFR derivative liabilities with additional
+98,755*
+19,751
+variation margin posted
+31
+All other assets not included in the above
+282,081
+324,828
+31,780
+306,932
+897,092
+30
+categories
+Off-balance sheet items
+9,028,265 231,126
+33
+Total RSF
+34
+Net Stable Funding Ratio (%)
+23,497,728
+130.17%
+(*) The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+318
+Annual Report 2023
+32
+83,987
+NSFR derivative assets
+29
+24
+Securities that are not in default and do
+not qualify as HQLA, including exchange-
+traded equities
+2,471
+444,927
+130,498
+1,082,427 1,211,434
+25
+Assets with matching interdependent
+liabilities
+26
+Other assets:
+27
+Physical traded commodities, including gold
+316,583
+34,502
+324,828
+31,780
+401,515
+955,175
+29,326
+28
+Assets posted as initial margin for derivative
+10,596
+9,006
+contracts and contributions to default
+funds of CCPS
+47,737
+Fourth-quarter 2023
+Total
+Total NSFR high-quality liquid assets (HQLA)
+Required stable funding (RSF) items
+30,829
+191,052
+741,877
+categories
+32
+Off-balance sheet items
+9,821,690 234,623
+33
+Total RSF
+23,647,317
+34
+344,037
+Net Stable Funding Ratio (%)
+(*) The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+316
+Annual Report 2023
+No. Items
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Available stable funding (ASF) items
+1
+2
+3
+Capital:
+Regulatory capital
+130.56%
+280,183
+All other assets not included in the above
+31
+liabilities
+26
+Other assets:
+27
+Physical traded commodities, including gold
+299,709
+19,526
+344,037
+30,829
+269,615
+794,715
+16,597
+28
+Assets posted as initial margin for derivative
+26,689
+22,686
+contracts and contributions to default
+funds of CCPS
+29
+NSFR derivative assets
+51,874
+30
+NSFR derivative liabilities with additional
+67,773*
+13,555
+variation margin posted
+30 September 2023
+15
+Unweighted value
+No
+6,572
+473,024
+14,819
+458,205
+3,665
+2,118 15,832,800
+90,813
+142,747 8,986,380
+4,029 4,523,281
+138,718 4,463,099
+assets
+11
+Other liabilities:
+8,672
+710,635
+173,904
+12,151
+1,130,381 1,136,731
+NSFR derivative liabilities
+89,273
+13
+All other liabilities and equities not included
+in the above categories
+8,672
+710,635
+173,904
+1,041,108 1,136,731
+14
+Total ASF
+30,586,002
+12
+45,539
+10,423,924
+8,915,305 10,495,133
+8,588,338 435,348
+326,967 10,059,785
+10 Liabilities with matching interdependent
+Other wholesale funding
+maturity
+< 6
+months
+3,993,450
+3,993,450
+to < 1
+year
+≥ 1 year
+Weighted
+value
+545,829
+545,829
+4,539,278
+4,539,278
+Other capital instruments
+4
+Retail deposits and deposits from small
+7,193,196 10,469,463
+18,723
+5,783 15,923,613
+business customers:
+7
+8
+9
+569∞ ∞ =
+Stable deposits
+Less stable deposits
+34,046
+7,159,150
+Wholesale funding:
+Operational deposits
+6 months
+Cash outflows
+7,303,208
+High-quality liquid assets
+conversion
+Including: If convertible, specify instrument type
+convertible into
+Including: If convertible, specify issuer of instrument it
+NA
+NA
+N/A
+N/A
+KA
+N/A
+NA
+N/A
+N/A
+NA
+N/A
+N/A
+MA
+NA
+N/A
+converts into
+Write-down feature
+Yes
+Yes
+Yes
+N/A
+N/A
+N/A
+N/A
+Tier 2 capital bonds
+Convertible or non-convertible
+=
+No
+No
+Tier 2 capital bonds
+No
+Tier 2 capital bonds
+=
+No
+Including: If convertible, conversion trigger(s)
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+Yes
+Tier 2 capital bonds
+Including: If write-down, write-down trigger(s)
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+No
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+310 Annual Report 2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+1 Total high-quality liquid assets (HQLA)
+The Bank
+232380036
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Including: If yes, specify non-compliant features
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+Non-compliant transitioned features
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Main features of regulatory capital instruments
+309
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Parent company/Group
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital
+RMB25,000
+RMB35,000
+RMB20,000
+RMB25,000
+RMB5,000
+RMB35,000
+RMB20,000
+Debt securities issued
+Debt securities issued
+Debt securities issued
+Debt securities issued
+Original date of issuance
+RMB5,000
+Tier 2 capital
+Tier 2 capital
+Accounting treatment
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Issuer
+Unique identifier
+Tier 2 capital bonds
+The Bank
+232280007
+Tier 2 capital bonds
+The Bank
+232280008
+Tier 2 capital bonds
+The Bank
+232380015
+Tier 2 capital bonds
+Governing law(s) of the instrument
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+The Bank
+232380016
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Perpetual or dated
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+20 December 2022
+Dated
+Dated
+3.49%
+3.58%
+Including: Existence of a dividend stopper
+No
+No
+No
+No
+Including: Fully discretionary, partially discretionary or
+Mandatory
+Mandatory
+Mandatory
+3.85%
+Mandatory
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+No
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Annual Report 2023
+mandatory cancellation of coupons/dividends
+3.70%
+Fixed
+Fixed
+Including: Original maturity date
+22 December 2032
+Issuer call (subject to prior supervisory approval)
+Yes
+22 December 2037
+Yes
+10 April 2023
+Dated
+12 April 2033
+10 April 2023
+Dated
+12 April 2038
+Yes
+Yes
+Including: Optional call date, contingent call dates and 22 December 2027, in full amount
+22 December 2032, in full amount
+12 April 2028, in full amount
+12 April 2033, in full amount
+redemption amount
+Including: Subsequent call dates, if applicable
+N/A
+N/A
+N/A
+N/A
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed
+Fixed
+20 December 2022
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Tier 2 capital bonds
+The Bank
+232380037
+31 December
+2022
+1
+On-balance sheet items (excluding derivatives and SFTs)
+43,095,556
+2
+3
+4
+Less: Asset amounts deducted in determining Basel Ill tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+(22,091)
+43,073,465
+38,689,986
+(20,811)
+38,669,175
+2023
+88,029
+56
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+100,331
+84,921
+7
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+8
+Less: Exempted CCP leg of client-cleared trade exposures
+(58)
+9
+Effective notional amount of written credit derivatives
+94,240
+18,815
+Items
+31 December
+Adjustments for fiduciary assets
+Tier 2 capital bonds
+Adjustments for derivative financial instruments
+56
+Adjustment for securities financing transactions
+Adjustment for off-balance sheet items
+7
+Other adjustments
+8
+Balance of adjusted on- and off-balance sheet assets
+31 December
+S/N
+2023
+44,697,079
+(309,622)
+39,610,146
+(274,087)
+114,745
+97,074
+8,650
+2,489,886
+(22,091)
+46,978,647
+39,728
+2,328,504
+(20,811)
+41,780,554
+(ii) Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets
+and Related Information
+31 December
+2022
+25,369
+10
+Less: Adjusted effective notional deductions for written credit derivatives
+11 Total derivative exposures
+19
+Balance of adjusted off-balance sheet assets
+2,489,886
+2,328,504
+20
+Net tier 1 capital
+3,736,919
+3,475,995
+21
+Balance of adjusted on- and off-balance sheet assets
+46,978,647
+(4,727,721)
+41,780,554
+Leverage ratio
+7.95%
+8.32%
+Annual Report 2023
+313
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+7.
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Capital Management Approach
+The Group discloses liquidity coverage ratio using Advanced Capital Management Approach in accordance with Measures
+for the Disclosure of Information on Liquidity Coverage Ratio by Commercial Banks (Yin Jian Fa [2015] No. 52).
+S/N Items
+22
+(5,542,150)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+(17,091)
+(20,193)
+190,084
+184,279
+12
+2
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+1,216,562
+558,868
+13
+Less: Netted amounts of cash payables and cash receivables of gross
+SFT assets
+14
+CCR exposure for SFT assets
+8,650
+39,728
+15
+Agent transaction exposures
+16
+Total securities financing transaction exposures
+1,225,212
+598,596
+17
+Off-balance sheet exposure at gross notional amount
+8,032,036
+7,056,225
+Total consolidated assets as per published financial statements
+Consolidated adjustments for accounting purposes but outside
+3
+4
+2
+Debt securities issued
+28 August 2023
+Dated
+30 August 2033
+Yes
+30 August 2028, in full amount
+N/A
+RMB25,000
+Debt securities issued
+28 August 2023
+Dated
+30 August 2038
+Yes
+30 August 2033, in full amount
+N/A
+Fixed
+3.07%
+RMB30,000
+Fixed
+No
+No
+Mandatory
+Mandatory
+No
+No
+Non-cumulative
+Non-cumulative
+the scope of regulatory consolidation
+311
+Unaudited Supplementary Information to the Consolidated Financial Statements
+3.18%
+Parent company/Group
+Tier 2 capital instrument
+RMB25,000
+Tier 2 capital instrument
+RMB30,000
+Parent company/Group
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Including: Transition arrangement of Regulation Governing
+Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation Governing
+Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent call dates
+and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Annual Report 2023
+Including: If convertible, conversion trigger(s)
+Yes
+Convertible or non-convertible
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without
+which the Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+312 Annual Report 2023
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts that have
+been issued by the Issuer and
+are pari passu with the present
+bonds; and pari passu with other
+tier 2 capital instruments that will
+possibly be issued in the future and
+are pari passu with the present
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts that have
+N/A
+been issued by the Issuer and
+are pari passu with the present
+bonds; and pari passu with other
+tier 2 capital instruments that will
+possibly be issued in the future and
+are pari passu with the present
+bonds
+No
+N/A
+No
+N/A
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+6. Disclosure of Leverage Ratio
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015).
+(i) Correspondence between Regulatory Leverage Ratio Items and Accounting Items and their
+differences
+S/N
+Items
+1
+bonds
+Partial or full write-down
+Permanent write-down
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+Yes
+Including: If convertible, fully or partially
+Including: If convertible, conversion rate
+Including: If convertible, mandatory or optional conversion
+Including: If convertible, specify instrument type convertible into
+Including: If convertible, specify issuer of instrument it converts
+into
+Write-down feature
+Including: If write-down, write-down trigger(s)
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of write-up
+mechanism
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without
+which the Issuer would become
+non-viable
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+N/A
+N/A
+Postcode: 230001
+Province, China
+Hefei City, Anhui
+Tel: 0551-62869178/62868101
+ANHUI BRANCH
+Domestic Institutions
+List of Domestic and Overseas Branches and Offices
+Address: No. 189 Wuhu Road,
+Fax: 0551-62868077
+www.icbc.com.cn | www.icbc-ltd.com
+Address: Tower B, Tianyin
+Area, No. 211 Pubin
+Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 211800
+Tel: 025-58172219
+ICBC Wealth Management Co.,
+Ltd.
+Address: No. 6 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 100032
+Tel: 010-86509184
+Fax: 010-86509901
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Address: No. 8 Xianshan Road,
+Biquan Street, Bishan
+District, Chongqing,
+China
+Postcode: 402760
+Tel: 023-85297704
+Fax: 023-85297709
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Address: No. 258 Chengnan
+West Road, Pinghu City,
+Zhejiang Province, China
+Postcode: 314200
+Tel: 0573-85139616
+Fax: 0573-85139626
+320
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+ICBC Financial Asset Investment
+Co., Ltd.
+Fax: 021-5879-2299
+Tel: 021-5879-2288
+Address: No. 31 Jinzhu Middle
+Road, Lhasa, Tibet
+Autonomous Region
+Postcode: 850000
+Tel: 0891-6898002
+Fax: 0891-6898001
+YUNNAN BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Postcode: 650021
+Tel: 0871-65536313
+Fax: 0871-63134637
+ZHEJIANG BRANCH
+Address: No. 66 Juyuan Road,
+Shangcheng District,
+Hangzhou City, Zhejiang
+Province, China
+Postcode: 310016
+Annual Report 2023
+Tel: 0571-87803888
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 100033
+Tel: 010-66583349
+Fax: 010-66583158
+ICBC Financial Leasing Co., Ltd.
+Address: Taida MSD-B1, No. 62
+Second Street, Economic
+Development Zone,
+Tianjin, China
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Postcode: 200120
+Fax: 0571-87808207
+List of Domestic and Overseas Branches and Offices
+Overseas Institutions
+Hong Kong SAR and Macau
+SAR
+1-Chome, Chiyoda-ku
+Tokyo, 100-6512, Japan
+Email: icbctokyo@tk.icbc.com.cn
+Tel: +813-52232088
+Fax: +813-52198525
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+# 640 Jungang-daero,
+Busanjin-gu, Busan
+47353, Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Address: Suite 1108, 11th floor,
+Shangri-la Office,
+Shangri-la Centre,
+19A Olympic Street,
+Sukhbaatar District-1,
+Ulaanbaatar, Mongolia
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
++976-77106677
+Fax: +976-77108866
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 5-1 Marunouchi
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Kuala Lumpur City
+Centre, 50088 Kuala
+Lumpur, Malaysia
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Industrial and Commercial Bank
+of China Limited, Manila Branch
+Address: 24F, The Curve, 32nd
+Street Corner, 3rd Ave,
+BGC, Taguig City, Manila
+1634, Philippines
+Email: info@ph.icbc.com.cn
+Tel: +63-282803300
+Fax: +63-284032023
+SWIFT: ICBKPHMM
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Address: 622 Emporium Tower
+PT. Bank ICBC Indonesia
+Address: The City Tower 32nd Floor,
+JI. M.H. Thamrin No. 81,
+Jakarta Pusat 10310,
+Indonesia
+TIBET BRANCH
+Asia-Pacific
+Email: icbc@mc.icbc.com.cn
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Address: 33/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong SAR, China
+Email: icbchk@icbcasia.com
+Tel: +852-25881188
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong SAR, China
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMM
+Fax: +852-28051166
+ICBC International Holdings
+Limited
+Address: 37/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong SAR, China
+Email: info@icbci.icbc.com.cn
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICILHKH1
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau SAR, China
+Email: icbc@mc.icbc.com.cn
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Industrial and Commercial Bank
+of China Limited, Macau Branch
+Address: Alm. Dr. Carlos
+d'Assumpcao, No. 393-
+437, 9 Andar, Edf.
+Dynasty Plaza, Macau
+SAR, China
+SWIFT: UBHKHKHH
+11th-13th Fl., Sukhumvit
+Fax: 0991-2828608
+Postcode: 830002
+Tel: 0791-86695682/86695018
+Fax: 0791-86695230
+LIAONING BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+Postcode: 110001
+Tel: 024-23491600
+Fax: 024-23491609
+INNER MONGOLIA BRANCH
+Address: No. 10 Silk Road Avenue,
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region,
+China
+Postcode: 010060
+Tel: 0471-6940833/6940297
+Fax: 0471-6940048
+NINGBO BRANCH
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+Postcode: 315010
+Tel: 0574-87361162
+Fax: 0574-87361190
+Annual Report 2023
+319
+List of Domestic and Overseas Branches and Offices
+NINGXIA BRANCH
+Address: No. 67 Zhonghai Road,
+Jinfeng District, Yinchuan
+City, Ningxia Autonomous
+Region, China
+Postcode: 750002
+Tel: 0951-5029739
+Postcode: 330008
+Jiangxi Province, China
+District, Nanchang City,
+Address: No. 888, Fenghe Middle
+Avenue, Honggutan
+Postcode: 150010
+Tel: 0451-84668270/84668577
+Fax: 0451-84698115
+HUBEI BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province,
+China
+Postcode: 430071
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+HUNAN BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Postcode: 410011
+Tel: 0731-84428833/84420000
+Fax: 0951-5890917
+Fax: 0731-84430039
+Address: No. 9559 Renmin
+Avenue, Changchun City,
+Jilin Province, China
+Postcode: 130022
+Tel: 0431-89569718/89569523
+Fax: 0431-88923808
+JIANGSU BRANCH
+Address: No. 408 Zhongshan
+South Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 210006
+Tel: 025-52858000
+Fax: 025-52858111
+JIANGXI BRANCH
+JILIN BRANCH
+QINGDAO BRANCH
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+Fax: 021-58882888
+SHENZHEN BRANCH
+Address: North Block, Financial
+Center, No. 5055
+Shennan East Road,
+Luohu District, Shenzhen
+City, Guangdong
+Province, China
+Postcode: 518015
+Tel: 0755-82246400
+Fax: 0755-82246247
+SICHUAN BRANCH
+Address: No. 45 Zongfu Road,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Postcode: 610020
+Tel: 028-82866000
+Fax: 028-82866025
+Tel: 021-68088888/58885888
+TIANJIN BRANCH
+Postcode: 300074
+Tel: 022-28400648
+Fax: 022-28400123/022-28400647
+XIAMEN BRANCH
+BEIJING BRANCH
+Postcode: 361012
+Tel: 0592-5292000
+Fax: 0592-5054663
+XINJIANG BRANCH
+Address: No. 231 Renmin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Tel: 0991-5982005
+Postcode: 200120
+SHANGHAI BRANCH
+Postcode: 266071
+Tel: 0532-66211001
+Fax: 0532-85814711
+QINGHAI BRANCH
+Address: No. 2 Shengli Road,
+Xining City, Qinghai
+Province, China
+Postcode: 810001
+Tel: 0971-6169722/6152326
+Fax: 0971-6152326
+SHANDONG BRANCH
+Address: No. 310 Jingsi Road,
+Jinan City, Shandong
+Province, China
+Postcode: 250001
+Tel: 0531-66681114
+Address: No. 8 Yincheng Road,
+Pudong New Area,
+Shanghai, China
+Fax: 0531-87941749/66681200
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Postcode: 030001
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHAANXI BRANCH
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Postcode: 710004
+Tel: 029-87602608/87602630
+Fax: 029-87602999
+SHANXI BRANCH
+HEILONGJIANG BRANCH
+Address: No. 218 Zhongyang
+Street, Daoli District,
+Harbin City, Heilongjiang
+Province, China
+Road, Khlong Ton,
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Address: Maslak Mah. Dereboyu,
+2 Caddesi No: 13 34398
+Sariyer, ISTANBUL
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+Annual Report 2023
+323
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Address: 12F City Empiria, Na Strži
+1702/65, 14000 Prague 4
+- Nusle, Czech Republic
+Email: info@cz.icbc.com.cn
+Tel: +420-237762888
+Fax: +420-237762899
+SWIFT: ICBKCZPP
+Industrial and Commercial Bank
+of China Limited, Beijing, Zurich
+Branch
+Address: Nüschelerstrasse 1,
+CH-8001, Zurich,
+Switzerland
+Email: service@ch.icbc.com.cn
+Tel: +41-58-9095588
+Fax: +41-58-9095577
+SWIFT: ICBKCHZZ
+ICBC Austria Bank GmbH
+Address: Kolingasse 4, 1090
+Vienna, Austria
+Email: generaldept@at.icbc.com.cn
+Tel: +43-1-9395588
+Fax: +43-1-9395588-6800
+SWIFT: ICBKATWW
+Americas
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+Address: 725 Fifth Avenue, 20th
+Floor, New York, NY
+10022, USA
+Email: info-nyb@us.icbc.com.cn
+ICBC Turkey Bank Anonim
+Şirketi
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+Bank ICBC (joint stock company)
+Address: Building 29,
+Email: londonmarketing@icbcstandard.com
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Address: Via Tommaso Grossi 2,
+20121, Milano, Italy
+Email: banking@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Address: Paseo de Recoletos, 12,
+28001, Madrid, España
+Email: gad.dpt@es.icbc.com.cn
+Tel: +34-912168837
+Fax: +34-912168866
+SWIFT: ICBKESMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+Address: Plac Trzech Krzyży 18, 00-
+499, Warszawa, Poland
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Tel: +1-2128387799
+Fax: +48-222788090
+Industrial and Commercial Bank
+of China (Europe) S.A. Greece
+Representative Office
+Address: Amerikis 13, Athens 106
+72 Greece
+Email: GAD@gr.icbc.com.cn
+Tel: +30-2166868888
+Fax: +30-2166868889
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: londonadmin@ld.icbc.com.cn
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: londonadmin@ld.icbc.com.cn
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+SWIFT: ICBKPLPW
+Fax: +1-2125752517
+SWIFT: ICBKUS33
+Industrial and Commercial Bank
+of China (USA) NA
+Inversora Diagonal S.A.U.
+Address: Florida 99, (C1105CPG)
+CABA, Argentina
+Tel: +54-1148202200
+Industrial and Commercial
+Bank of China Limited, Panama
+Branch
+Address: MMG Tower | 20th Floor
+| Ave. Paseo del Mar |
+Costa del Este
+Panama City, Republic of
+Panama
+Email: panama.branch@pa.icbc.com.cn
+Tel: +507-3205901
+SWIFT: ICBKPAPA
+Africa
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Email: alpha.sales@icbc.com.ar
+Tel: +54-1143949432
+Address 1: 47 Price Drive,
+Address 2: T11, 2nd Floor East, 30
+Baker Street, Rosebank,
+Johannesburg,
+Gauteng, South Africa,
+2196
+Email: icbcafrica@afr.icbc.com.cn
+Tel: +27-608845323
+324
+Annual Report 2023
+ICBC
+中國北京市西城區復興門內大街55號郵編:100140
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China | Post Code: 100140
+Constantia, Cape Town,
+South Africa, 7806
+Email: info@be.icbc.com.cn
+ICBC Investments Argentina
+S.A.U. Sociedad Gerente de
+Fondos Comunes de Inversión
+Address: Blvd. Cecilia Grierson 355,
+Piso 14, (C1107CPG)
+CABA, Argentina
+355, (C1107 CPG) Buenos
+Aires, Argentina
+Address: 1185 Avenue of the
+Americas, 16th Floor,
+New York, NY 10036
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+Fax: +1-2122193211
+SWIFT: ICBKUS3N
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway, 28th
+Floor, New York, NY,
+10019, USA
+Email: info@icbkfs.com
+Tel: +1-2129937300
+Fax: +1-2129937349
+SWIFT: ICBKUS3F
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario, M5H
+2R2, Canada
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+of China Mexico S.A.
+Address: Paseo de la Reforma
+250, Piso 18, Col.
+Juarez, C.P.06600, Del.
+Cuauhtemoc, Ciudad de
+Mexico
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-
+SAO PAULO/SP-Brasil
+Email: bxgw@br.icbc.com.cn
+Tel: +55-1123956600
+SWIFT: ICBKBRSP
+ICBC PERU BANK
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+Email: consultas@pe.icbc.com.cn
+Tel: +51-16316800
+Fax: +51-16316802
+SWIFT: ICBKPEPL
+Industrial and Commercial Bank
+of China (Argentina) S.A.U.
+Address: Blvd. Cecilia Grierson
+Industrial and Commercial Bank
+Khlong Toei, Bangkok,
+Thailand
+Address: 81, Avenue Louise, 1050
+Brussels, Belgium
+Tel: +31-205706666
+Fax: +31-205706603
+SWIFT: ICBKNL2A
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Email: office@kz.icbc.com.cn
+Tel: +7-7272377085
+SWIFT: ICBKKZKX
+Industrial and Commercial
+Bank of China Limited, Karachi
+Branch
+Address: 15th & 16th Floor, Ocean
+Tower, G-3, Block-9,
+Scheme #5, Main Clifton
+Road, Karachi, Pakistan.
+P.C: 75600
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Industrial and Commercial
+Bank of China Limited, Mumbai
+Branch
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+International Financial
+Center, Dubai, United
+Arab Emirates P.O.Box:
+506856
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Address: Addax Tower Offices
+5207, 5208 and 5209, Al
+Reem Island, Abu Dhabi,
+United Arab Emirates P.O.
+Box 62108
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Address: Level 20, Burj Doha, Al
+Corniche Street, West
+Bay, Doha, Qatar P.O.
+BOX: 11217
+Email: icbcdoha@doh.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: Level 4&8, A1 Faisaliah
+Tower Building
+No: 7277-King Fahad
+Road Al Olaya, Zip Code:
+12212, Additional No.:
+3333, Unit No.: 95,
+Kingdom of Saudi Arabia
+Email: service@sa.icbc.com.cn
+Tel: +966-112899888
+SWIFT: ICBKMMMY
+Fax: +95-019339278
+Tel: +95-019339258
+Tower, Kyun Taw Road,
+Kamayut Township,
+Yangon, Myanmar
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No. 360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Email: hanoiadmin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Annual Report 2023
+321
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+building, 33 Le Duan
+Street, District 1, Ho Chi
+Minh City, Vietnam
+Email: hcmadmin@vn.icbc.com.cn
+Tel: +84-28-35208991
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Address: Asean Road, Home
+No. 358, Unit12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao
+PDR
+Fax: +966-112899879
+SWIFT: ICBKSARI
+Email: icbcvte@la.icbc.com.cn
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Address: 17th Floor, Exchange
+Square, No. 19-20,
+Street 106, Phnom Penh,
+Cambodia
+Email: icbckh@kh.icbc.com.cn
+Tel: +855-23955880
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Industrial and Commercial
+Bank of China Limited, Yangon
+Branch
+Address: ICBC Center, Crystal
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Address: Building 2A (Al-Tijaria
+Tower), Floor 7&8, Al-
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-2686 66 6000
+SWIFT: ICBKLULL
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Luxembourg
+Tel: +352-2686661
+Fax: +352-2686 66 6000
+SWIFT: ICBKLULU
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+Address: 73 Boulevard Haussmann,
+75008, Paris, France
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam, the
+Netherlands
+Email: icbcamsterdam@nl.icbc.com.cn
+Email: office@eu.icbc.com.cn
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Email: icbc@icbc-ffm.de
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Soor Street, Al-Morqab,
+Block 3, Kuwait City,
+Kuwait
+Email: info@kw.icbc.com.cn
+Tel: +965-22281777
+Fax: +965-22281799
+SWIFT: ICBKKWKW
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+Address: Level 42, Tower 1,
+International Towers,
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Email: info@icbc.com.au
+Tel: +612-94755588
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay
+Street, Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+Address: Bockenheimer Landstraße
+39, 60325 Frankfurt am
+Main, Germany
+SWIFT: ICBKNZ2A
+Annual Report 2023
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Auckland
+Branch
+Address: Level 11, 188 Quay
+Street, Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ22
+Europe
+322
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Fax: 0771-5316617/2806043
+GUIZHOU BRANCH
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+Postcode: 550001
+Tel: 0851-88609116/88620018
+Fax: 0851-85963911
+HAINAN BRANCH
+Road, Haikou City, Hainan
+Province, China
+Postcode: 570203
+Tel: 0898-65303138/65342829
+Fax: 0898-65342986
+HEBEI BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Postcode: 050051
+Tel: 0311-66000001/66001999
+Fax: 0311-66000002
+HENAN BRANCH
+Province, China
+Postcode: 450011
+Mansion, No. 2
+Fuxingmen South Street,
+Xicheng District, Beijing,
+China
+Postcode: 100031
+Tel: 010-66410579
+Fax: 010-66410579
+CHONGQING BRANCH
+Address: No. 61 Taichang
+Road, Nan'an District,
+Chongqing, China
+Postcode: 400061
+Tel: 0771-5316617
+Postcode: 530022
+Address: No. 54 Heping South
+GUANGXI BRANCH
+Postcode: 116001
+Address: No. 5 Zhongshan Square,
+DALIAN BRANCH
+Fax: 023-62918059
+Tel: 023-62918002
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Zhuang Autonomous
+Region, China
+Tel: 0411-82378888
+Fax: 0411-82808377
+FUJIAN BRANCH
+Province, China
+Fuzhou City, Fujian
+Province, China
+Address: No. 108 Gutian Road,
+Tel: 0591-88087819/88087000
+Fax: 0591-83353905/83347074
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+China
+Address: No. 123 Yanjiang West
+Road, Guangzhou City,
+Guangdong Province,
+GUANGDONG BRANCH
+Fax: 0931-8435166
+Postcode: 350005
+Dalian City, Liaoning
+Postcode: 730030
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+GANSU BRANCH
+Tel: 0931-8436609
+29,870,491
+33,521,174
+0.6
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+100.0
+100.0
+Accrued interest
+454,566
+1.6
+535,493
+(1) Includes outward remittance and remittance payables.
+Note:
+Total
+0.7
+199,465
+At 31 December 2023
+1.5
+In RMB millions, except for percentages
+At 31 December 2022
+Shareholders' Equity
+Percentage
+20.9
+210,185
+6,249,754
+21.2
+7,120,750
+Yangtze River Delta
+0.1
+Percentage
+35,579
+32,408
+Head Office
+(%)
+Amount
+(%)
+Amount
+Item
+0.1
+Other deposits (1)
+22.0
+14,545,306
+22.1
+6,594,898
+26.4
+8,843,237
+Time deposits
+Corporate deposits
+(%)
+Percentage
+Amount
+Demand deposits
+(%)
+Item
+Percentage
+At 31 December 2022
+At 31 December 2023
+In RMB millions, except for percentages
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+Discussion and Analysis
+29
+Annual Report 2023
+Amount
+48.7
+7,366,691
+8,076,256
+49.4
+16,565,568
+20.1
+5,991,387
+18.1
+6,083,841
+28.6
+8,553,919
+31.3
+Pearl River Delta
+10,481,727
+Demand deposits
+Time deposits
+Personal deposits
+49.1
+14,671,154
+48.4
+16,209,928
+Subtotal
+27.0
+Subtotal
+4,618,362
+Overseas and other
+4,048,164
+806,458
+Operating income
+(%)
+Amount
+Percentage
+Percentage
+(%)
+Amount
+Item
+37 Personal Banking
+100.0
+In RMB millions, except for percentages
+2022
+SUMMARY OPERATING SEGMENT INFORMATION
+32 Corporate Banking
+BUSINESS OVERVIEW
+Discussion and Analysis
+31
+Annual Report 2023
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable
+to equity holders of the parent company for the year ended 31 December 2023 and equity attributable to equity holders of
+the parent company as at the end of the reporting period have no differences.
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and Those under IFRSS
+Since 2017, the International Accounting Standards Board has successively promulgated IFRS 17 — Insurance Contracts
+and the Amendments to IFRS 17. In accordance with the implementation requirements of the International Accounting
+Standards Board, the Group has implemented the above-mentioned new IFRS since 1 January 2023. Please refer to "Note
+3.(1) New and amendments to IFRSS that are mandatorily effective for the current year" for details.
+2023
+Changes of Major Accounting Policies
+842,352
+Corporate banking
+179,219
+6,049
+0.7
+5,268
+Other
+11.9
+100,374
+12.6
+101,420
+100.0
+Treasury operations
+347,014
+39.4
+317,856
+Personal banking
+41 Asset Management Services
+46.2
+388,915
+47.3
+381,914
+41.2
+13.8
+Net cash inflows from financing activities amounted to RMB285,444 million. Specifically, cash inflows were RMB1,422,308
+million, representing an increase of RMB466,446 million over last year, mainly due to the increased cash proceeds from
+debt securities issued; and cash outflows were RMB1,136,864 million, representing an increase of RMB116,213 million,
+mainly due to the increased cash payment for repayment of debt securities.
+Net cash inflows from operating activities amounted to RMB1,417,002 million, representing an increase of RMB12,345
+million as compared to last year, principally due to the increase of net increase of due to customers. Specifically, cash
+outflows of operating assets increased by RMB351,287 million; and cash inflows of operating liabilities increased by
+RMB453,898 million.
+1,608,543
+5.3
+1,768,620
+Northeastern China
+16.0
+4,776,285
+15.6
+5,219,348
+Western China
+5.4
+14.9
+14.5
+4,855,178
+Central China
+25.5
+7,629,312
+26.3
+8,811,355
+Bohai Rim
+13.6
+4,455,782
+Net cash outflows from investing activities amounted to RMB891,852 million. Specifically, cash inflows were RMB3,824,545
+million, representing an increase of RMB293,157 million over last year, mainly due to the increased cash proceeds from the
+sale and redemption of financial investments; and cash outflows were RMB4,716,397 million, representing an increase of
+RMB274,388 million, mainly due to the increase in cash payment for financial investments.
+1.5%
+3.2
+Analysis on Statement of Cash Flows
+The off-balance sheet items of the Bank mainly include derivative financial instruments, contingencies and commitments.
+For details on the nominal amount and fair value of derivatives financial instruments, please refer to "Note 21. to the
+Consolidated Financial Statements: Derivative Financial Instruments". For details on contingencies and commitments, please
+refer to "Note 47. to the Consolidated Financial Statements: Commitments and Contingent Liabilities".
+Off-balance Sheet Items
+As at the end of 2023, shareholders' equity totaled RMB3,776,588 million, RMB261,169 million or 7.4% higher than
+that at the end of the previous year. Equity attributable to equity holders of the parent company recorded an increase of
+RMB260,778 million or 7.5% to RMB3,756,887 million. Please refer to the "Consolidated Statement of Changes in Equity"
+for details.
+Corporate banking
+Discussion and Analysis
+Annual Report 2023
+30
+Debt securities issued amounted to RMB1,369,777 million, RMB463,824 million or 51.2% higher than that at the end of
+the previous year, principally due to the increased size of NCDs and tier 2 capital bonds issued by the Bank.
+1,095,153
+Debt Securities Issued
+Repurchase Agreements
+100.0
+29,870,491
+100.0
+100.0
+33,521,174
+Total
+3.6
+1,067,072
+Repurchase agreements amounted to RMB1,018,106 million, RMB443,328 million or 77.1% higher than that at the end of
+the previous year, principally because the Bank moderately borrowed funds based on management needs.
+Accrued interest
+Personal deposits
+0.7%
++
+Product system has become increasingly compatible.
+A digital inclusive center was set up to improve
+the development mode of digital inclusive. The
+Bank launched a new-generation Quick Lending for
+Operation featuring open application and flexible
+withdrawal, upgraded digital credit products, and
+significantly improved the capability and coverage
+of inclusive finance services. The Bank simplified
+the "Online Revolving Loan" procedures, advanced
+the direct connection of mortgage registration
+system, improved processing efficiency, launched
+innovative scenarios such as "Personal e-Enterprise
+Quick Loan", and expanded credit support for self-
+employed businesses. Focusing on the key fields
+of supply chain, the Bank developed a customized
+financing plan to stabilize, consolidate and reinforce
+the supply chain. With the standardized product
+system, the Bank accurately focused on regional
+and customer characteristics, furthered innovation
+in specific scenarios for branches, and improved the
+pertinence and adaptability of services for small and
+micro customers.
+Channel operation has become increasingly efficient.
+The Bank actively developed an integrated online
+and offline small and micro customer service model,
+making inclusive finance services accessible. The
+Bank developed an inclusive edition of mobile
+banking online to provide a one-stop exclusive
+service channel for inclusive finance. It strengthened
+the inclusive finance service capability of outlets,
+and expanded the coverage of inclusive services of
+outlets.
+Risk control system has become increasingly sound.
+In order to apply technology to risk control, the
+Bank established and improved a multi-dimensional
+credit risk prevention and control system for "One
+Customer+ N Products", and developed a full-
+process risk management system featuring "data
+driven, intelligent warning, dynamic management
+and continuous operation". The Bank combined
+digital risk control with loan management by
+experts, and strengthened online and offline cross-
+validation to effectively identify risks. It has achieved
+"active prevention, smart control and comprehensive
+management", laying solid foundation for
+sustainable development of inclusive finance.
+a
+34
+Annual Report 2023
+Discussion and Analysis
+Comprehensive services have been increasingly
+considerate. The Bank improved the comprehensive
+service system that combined financing, consulting
+and commercial services, creating a sound ecosystem
+of growing with small and micro enterprises. The
+Bank promoted a series of activities such as "ICBC
+Inclusive Finance Travel" and "Visiting Tens of
+Thousands of Enterprises, Enhancing Confidence and
+Improving Services", promoted the "ICBC Business
+Matchmaking" and "Agricultural Matchmaking"
+platforms, and provided one-stop services such
+as product recommendation, supply and demand
+matchmaking, and financing support.
+Institutional Banking
+Catering to customer demands, the Bank continuously
+improved the coverage, accessibility and satisfaction
+of inclusive financial services, and made efforts to
+alleviate the difficulties of small and micro customers in
+accessing financing. As at the end of 2023, the balance
+of inclusive small and micro enterprise loans amounted
+to RMB2,227,752 million, representing an increase of
+RMB677,436 million or 43.7% over the beginning of the
+year. Inclusive small and micro enterprise loan customers
+numbered 1,467 thousand, representing an increase
+of 451 thousand. The average interest rate of inclusive
+small and micro enterprise loans newly granted in the
+year was 3.55%, significantly reducing financing costs. In
+2023, the Bank was awarded the "Best Inclusive Financial
+Service Bank of the Year" by the Financial News (China).
+Its inclusive finance services that combined financing,
+consulting and commercial services were awarded
+"Example Cases of Innovative Service Delivery" by China
+International Fair for Trade in Services for the third
+consecutive year, and the innovation case of its digital
+inclusive product - "Planting e Loan" was awarded the
+"Outstanding Case of Inclusive Finance Service Innovation
+of the Year" by The Chinese Banker.
+The Bank cooperated with local governments
+throughout China to show its responsibilities as
+a large bank. The Bank facilitated the reform of
+the national fiscal system, and assisted the central
+budget units in launching the integrated system of
+agency fiscal budget. It served the circulation of
+fiscal funds in a safe and efficient manner, and did
+a good job in the centralized payment on behalf
+of the treasury. More than 400 political and legal
+organ customers at all levels have been unveiled on
+the "Intelligent Politics and Laws", a political and
+legal case fund management platform, including
+over 200 unveiled in 2023. The Bank consolidated
+the foundation of a lead bank for social security
+business, with more than 4,000 "social security-bank
+integrated outlets" in China, ranking first among
+peers.
+Trust Protection Fund Co., Ltd. The Bank has ranked
+first in the market for five consecutive years in terms
+of innovative services to meet the financing needs
+of small and medium-sized enterprises, and newly
+added bill brokerage customers that have signed
+contracts with the Bank. The Bank joined forces
+with key property insurance companies to promote
+enterprise risk management solutions for 10
+industries on a pilot basis, to support enterprises in
+forestalling and defusing production and operation
+risks. The Bank deepened strategic cooperation
+with the Beijing, Shanghai and Shenzhen stock
+exchanges, actively participated in capital market
+reform and innovation, and developed an exclusive
+interactive service model for commercial banking and
+investment.
+Cooperation with peers in digital finance was
+advanced. The Bank pressed forward with the output
+of digital projects such as data analysis, data security,
+digital transformation consulting and data platforms
+to peers, launched the bill brokerage functions
+of Xingnongtong APP, enriched the scenarios of
+acquiring third-party depository customers of the
+"Intelligent Brain" and "Ma Shang Ying" digital
+platforms, and continued to empower the digital
+transformation of financial peers.
+Settlement and Cash Management
+The Bank continued to deepen the digital
+transformation of settlement finance, and improved
+corporate account services to continuously improve
+the depth and breadth of settlement financial
+services, and effectively boost the high-quality
+development of small and micro enterprises. The
+Bank actively responded to and implemented
+the national policy of reducing fees, and steadily
+promoted reduction of fees for small and micro
+enterprises and self-employed businesses. In 2023, it
+benefited 10.44 million small and micro enterprises
+and self-employed businesses, living up to the
+responsibilities of a large bank.
+Annual Report 2023
+35
+Discussion and Analysis
++
+The Bank developed a one-stop, comprehensive
+and digital service solution for enterprises'
+treasury, integrating FinTech capabilities. The Bank
+improved the treasury information system to assist
+enterprises in improving their fund management
+and preventing fund management risks. The Bank
+enriched treasury management cloud services and
+created a differentiated and matrix-based financial
+management service system. The Bank facilitated
+state-owned enterprises to deepen reform, and
+extended treasury services to local state-owned
+enterprise customers. It has established cooperation
+with hundreds of provincial and municipal state-
+owned enterprises in treasury services.
+ICBC profoundly participated in the building
+of overseas treasury centers for multinational
+enterprises, assisted Chinese-funded enterprises
+in going global through internal and external
+collaboration, and provided customers with global
+treasury comprehensive solutions relying on its
+global network, domestic and overseas integrated
+technology system and professional service team.
+At the end of 2023, the Bank maintained
+13,738 thousand corporate settlement accounts,
+representing an increase of 1,455 thousand over the
+end of the previous year. It had 2,027 thousand cash
+management customers, including 11,563 global
+cash management customers.
+The Bank collaborated with peers in serving the
+real economy. The Bank developed a financial
+industry consortium with the characteristics of
+ICBC, to jointly support the real economy. The Bank
+assisted China Securities Depository & Clearing
+Corporation Limited in successfully completing the
+first batch of cross-border fund clearing on newly
+added Southbound Trading Link trading days, and
+established a comprehensive partnership with China
+Inclusive Finance
+2023
+2022
+Unit: RMB millions
+Transportation, storage and postal services
+Manufacturing
+24.1%
+15.8%
+Leasing and commercial services
+15.5%
+16,209,928
+Water, environment and public utility management
+14,671,154
+11.6%
+13,331,463
+Production and supply of electricity, heating, gas and water 10.7%
+Real estate
+5.1%
+Wholesale and retail
+4.6%
+Construction
+2.9%
+Science, education, culture and sanitation
+2.6%
+Mining
+2.0%
+Other
+5.1%
+2021
+and provided comprehensive financial support for
+expanding effective investment, mitigating debt risks,
+and serving the real economy. The Bank expanded
+the full-scenario asset securitization services for
+enterprises, optimized the full-process services of
+"REITS+", and launched the first Belt and Road asset
+securitization project in China as a project arranger.
+The Bank developed its restructuring consulting
+service model, enriched the product "toolkit", and
+helped enterprises improve operating quality and
+efficiency, thus effectively preventing and defusing
+financial risks. The Bank integrated the advantages
+of industry research, risk control, and FinTech
+resources of the Group to provide customers with
+professional consulting services such as financial
+advisory, risk control advisory, and management
+consulting. Relying on the "ICBC e Security" big data
+risk control platform, the Bank assisted customers in
+achieving early risk identification and warning.
+The Bank continued to consolidate its advantages in
+bond underwriting and underwrote 2,711 domestic
+bonds in 2023, with a total amount of RMB2.08
+trillion. The Bank underwrote 95 ESG bonds with
+a total amount of RMB112,875 million, including
+green bonds, sustainability bonds, and social bonds.
+The Bank underwrote 33 panda bonds for 20
+overseas customers, with a total amount of RMB21.4
+billion.
+Investment Banking
+2023
+2021
+2022
+2023
+Annual Report 2023
+37
+Discussion and Analysis
+4
+The
+Bank was awarded the "Best Wealth
+Management Bank in Asia Pacific" and "Best Digital
+Brand Campaign" by The Asian Banker, and the
+"Outstanding Retail Bank" and "Outstanding Wealth
+Management Bank" by JRJ.com. At the end of
+2023, the number of personal customers increased
+by 19.80 million over the end of the previous year
+to 740 million. Assets under management totaled
+RMB20.71 trillion. Specifically, personal deposits
+reached RMB16,565,568 million, representing
+an increase of RMB2,020,262 million or 13.9%.
+Personal loans stood at RMB8,653,621 million,
+representing an increase of RMB418,996 million
+or 5.1%. Funds under agency sales amounted to
+RMB419.7 billion, government bonds under agency
+distribution were valued at RMB52.2 billion, and
+personal insurance products under agency sales were
+reported at RMB97.4 billion.
+Private Banking
++
+4
++
+The Bank strengthened the full-journey construction
+of customer services, advanced customer
+segmentation services, and built a full-chain product
+service ecosystem composed of "research, selection,
+selling and management". The Bank created a new
+paradigm for serving entrepreneurial customers,
+and released the entrepreneurial partner banking
+service system with the theme of "Forwarding
+with Our Partners for Entrepreneurial Glory". It has
+set up approximately 900 "Entrepreneurs Service
+Centers". To achieve the upgrading and promotion
+of family trusts, the Bank collaborated with partners
+to release the innovative "Collective Charity Trust
+Service Ecosystem" version 2.0 (Donor-advised Fund
+model), and won the "Shanghai Financial Innovation
+Award of the Year" from the Shanghai Municipal
+Government. The Bank collaborated with partners to
+launch the "Prolong Life Joyfully" series of special
+purpose family trust for elderly care in an innovative
+manner, thus solving customers' pain points in the
+field of elderly care security. It also advanced the
+implementation of family office comprehensive
+consulting services.
+The Bank was awarded the "Best Entrepreneur
+Client Service in Private Banking in China" by The
+Asian Banker and the Wealth, and the "Best Private
+Bank for Big Data Analytics and Al in China" by the
+Financial Times of the UK.
+At the end of 2023, the Bank maintained 262.9
+thousand private banking customers, representing
+an increase of 36.9 thousand or 16.3% over the
+end of the previous year. Assets under management
+totaled RMB3.07 trillion, representing an increase of
+RMB443.1 billion or 16.9%.
+Bank Card Business
++
+Under the framework of "GBC+", the Bank
+deepened the basic project of merchant marketing,
+continuously expanded the coverage of financial
+services for merchants, and provided a package
+of comprehensive services. The total number
+of merchants has exceeded 12 million, and the
+acquiring transaction value has reached RMB4.5
+trillion. Service quality and efficiency have been
+improved markedly. The Bank carried out an action
+to "stimulate domestic demands and consumption
+in cooperation with tens of millions of merchants to
+offer preferential services for hundreds of millions
+of customers" and more than 500 "ICBC I GO"
+sales promotion activities focusing on the clothing,
+food, housing, transportation, sports, tourism, and
+entertainment of residents. It was the first one
+among domestic financial institutions to support the
+building of a cultural tourist station, and increased
+credit support for automobiles, home decoration and
+other bulk consumptions, to help expand domestic
+demand and stabilize economic growth.
+A new ecosystem of lifestyle services based on ICBC
+e Life 6.0 platform was created. In cooperation with
+high-quality top platforms, the Bank developed eight
+ecosystems composed of "takeout, catering, tourism,
+shopping, supermarket, theme parks, digital movie,
+and car owner life", and three life circles of "office
+life, community life, and scenario life", achieving
+mutual promotion between B end and C end,
+enriching the rights and interests service system, and
+providing better customer feedback.
+Product innovation was intensified. The Bank
+developed innovative ride codes across Hong
+Kong, Macao and Zhuhai. It simultaneously issued
+fashionable Macao-themed cards at home and
+abroad. The "China-Laos Railway" online ticketing
+APP acquiring project was developed and put into
+service. To support the payment acceptance for the
+FISU World University Games and the Asian Games,
+the Bank launched "tied foreign card" products
+in an innovative way, ensuring the convenience of
+mobile payments for overseas visitors to China, and
+providing a "safe, efficient, diverse and convenient"
+payment environment.
+As at the end of 2023, the Bank had issued 1,230
+million bank cards, up 10.88 million over the end of
+the previous year, including 1,077 million debit cards
+and 153 million credit cards. The balance of credit
+card overdrafts was RMB689,731 million. In 2023,
+ICBC bank cards registered a consumption volume of
+RMB20.84 trillion, including RMB18.60 trillion from
+debit cards and RMB2.24 trillion from credit cards.
+38
+Annual Report 2023
+2022
+Corporate deposits
+2021
+14,545,306
++ The Bank actively implemented the country's key
+strategies through "M&A plus" full-process services,
+with a focus on strategic emerging industries, sci-
+tech innovation and green industry development. In
+2023, by the number of M&A deals led by the Bank,
+the Bank ranked first in Refinitiv's ranking of Any
+Chinese Investment Completed, and was awarded
+the "Best Bank for M&A in China" by the Global
+Finance.
++
+36
+The Bank supported the high-quality development
+of sci-tech innovation enterprises through diversified
+equity financing, and improved the financial service
+support system featuring "equity, loan, debt and
+guarantee" interconnection. The Bank enriched
+equity financing products, and optimized the multi-
+dimensional and multi-level equity business system of
+"branch + subsidiary", "primary market + secondary
+market", and "financing + consulting", to enhance
+financial services for enterprises throughout the
+whole lifecycle.
+The Bank assisted in rehabilitating existing assets in
+line with the needs of governments and enterprises,
+Annual Report 2023
+Discounted Bills Business
++ Through such products and services as "ICBC
+Manufacturing Companionship", "ICBC Rural
+Revitalization Discounting" and "ICBC i Green
+Discount", the Bank intensified bills financing
+services for key fields such as sci-tech innovation,
+advanced manufacturing and green development,
+as well as key strategies such as "SRDI" and
+'rural revitalization". The Bank also promoted the
+transformation and development of bill business
+through operation innovations, including adopting a
+flexible interest rate strategy, speeding up turnover
+and building a bill purchase platform.
+In 2023, the Bank had discounted bills at an amount
+of RMB2,716,741 million, contributing an increase
+of 23.2% over the previous year, and kept the
+leading position in the market. In 2023, the Bank
+was awarded "Excellent Integrated Bank", "Excellent
+Discount Institution", "Excellent Trading Institution",
+"Excellent Settlement Institution" and "Excellent
+Innovative Product Cooperative Institution" by
+Shanghai Commercial Paper Exchange.
+Discussion and Analysis
+Personal Banking
+In 2023, the Bank deepened the implementation of the
+strategy of building the "No.1 Personal Bank". Catering
+to customers' needs to spend money, make money,
+borrow money and manage money, the Bank built a new
+ecosystem of wealth management, consumer finance,
+payment and settlement, and account management
+services, and accelerated the transformation of business
+operation mode focusing on the building of "master
+payment account master wealth account
+relationship account" of personal customers.
+master
+Transformation of operation was accelerated.
+The Bank promoted the transition from "selling
+products" to "serving customers", integrated
+service resources, created new services and products
+and optimized service process based on customer
+demands, and realized the Bank's value by creating
+value for customers. The Bank built a multi-layer
+customer segmentation system for all customers,
+and seized new markets and new opportunities such
+as counties, new urban residents, personal pension,
+and Generation Z. It expanded customer sources in
+batches, developed exclusive products and services,
+and cultivated exclusive brands. The Bank deepened
+the digital transformation of personal banking, and
+leveraged digital technology to serve customers and
+empower employees. In terms of serving customers,
+the Bank built a coordination center for implementing
+the "Intelligent Brain" marketing strategy, refined
+marketing services targeted at all customers, and
+deeply implemented the "intelligent experience"
+project. By establishing a closed loop of management
+for identifying and resolving customers' problems,
+the Bank effectively improved customers' satisfaction
+and experience. In terms of empowering employees,
+the Bank created a digital intelligent management
+platform for personal banking (DIMO) and "Marketing
+Express" personal account manager work platform to
+improve work efficiency and effectiveness.
+4
+High-quality business development was pushed
+forward. The Bank kept improving the customer fund
+circulation ecosystem, accelerated the innovation of
+personal deposit products, and developed exclusive
+deposits and wealth management products for key
+customers, to better meet the differentiated service
+needs of different customer groups. Faced with the
+new situation of significant changes in the supply
+and demand relationship of the real estate market,
+the Bank pursued city-specific differentiated policies
+to meet the rigid and improving housing needs of
+residents, and actively and prudently adjusted the
+interest rates of existing residential mortgages.
+The Bank increased personal business loans and
+consumer loans focusing on areas such as self-
+employed business, private economy and bulk
+consumption. It launched innovative student loans
+based on the needs of college students at different
+stages, including enrollment, study, and graduation.
+The Bank focused on creating customer value. With
+the goal of asset preservation and appreciation for
+customers, the Bank enhanced investment research
+capabilities, created open product shelves, and
+comprehensively promoted wealth communities and
+intelligent asset allocation services. An integrated
+online and offline business pattern has been
+established to meet customers' personalized and
+companionship wealth management needs. The
+"ICBC Wealth" brand has been established. The
+"Money Link Account" service brand was launched,
+providing full lifecycle account services that cover
+intelligent account opening, intelligent account
+management, and intelligent account protection. It
+improved the process of featured debit cards and
+personalized services, and steadily increased the
+penetration rate of basic settlement products such as
+third-party payments and ICBC Messenger.
+Personal deposits
+Unit: RMB millions
+Personal loans
+Unit: RMB millions
+8,653,621
+8,234,625
+7,944,781
+16,565,568
+12,497,968
+ווה
+Corporate loans of domestic branches by
+industry of loan customers
+Discussion and Analysis
+33
+3,369,858
+82.8
+(%)
+Amount
+29,870,491
+81.9
+33,521,174
+(%)
+Amount
+Percentage
+Percentage
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+4.3%
+Other
+4.1%
+2.5%
+Debt securities issued
+3.3%
+1.6%
+Repurchase agreements
+2.5%
+8.8%
+Due to banks and
+other financial institutions
+8.2%
+82.8%
+8.2
+Due to customers
+3,187,712
+1,018,106
+Other deposits
+48.7%
+44.3
+49.1%
+Corporate deposits
+2022
+2023
+48.4%
+49.4%
+0.6%
+O
+Distribution of due to customers by business line
+Due to customers is the Bank's main source of funds. As at the end of 2023, due to customers was RMB33,521,174 million,
+RMB3,650,683 million or 12.2% higher than that at the end of the previous year. In terms of customer structure, corporate
+deposits increased by RMB1,538,774 million or 10.5%; and personal deposits increased by RMB2,020,262 million or
+13.9%. In terms of maturity structure, time deposits increased by RMB4,176,147 million or 27.6%, while demand deposits
+decreased by RMB617,111 million or 4.4%. In terms of currency structure, RMB deposits stood at RMB31,837,835 million,
+representing an increase of RMB3,684,821 million or 13.1%. Foreign currency deposits were equivalent to RMB1,683,339
+million, with a decrease of RMB34,138 million or 2.0%.
+100.0
+36,094,727
+100.0
+40,920,491
+4.3
+1,555,793
+4.1
+1,641,576
+2.5
+905,953
+3.3
+1,369,777
+1.6
+574,778
+2.5
+8.8
+1.6%
+81.9%
+2023
+7,381
+1.7
+5,668
+1.3
+47 Internet Finance
+Note: Please see "Note 49. to the Consolidated Financial Statements: Segment
+Information" for details.
+49 Outlet Building and Service
+Improvement
+51 Human Resources
+Management, Employees
+and Institutions
+54 International Operation
+57 Comprehensive Operation and
+Subsidiary Management
+Corporate Banking
+Focusing on the services for the real economy, the Bank optimized
+the guideline on corporate banking credit, reasonably expanded total
+financing, accurately supported key areas and weak links of the real
+economy, enhanced the adaptability of credit structure to the real
+economy, and ensured the targeted credit supply. The Bank continuously
+improved customer structure, with a breakthrough made in medium
+customers. It promoted the in-depth development of systematic marketing,
+and accelerated the building of a customer structure composed of large,
+medium, small and micro enterprises and personal customers in balanced
+proportions. At the end of 2023, corporate loans reached RMB16,145,204
+million, representing an increase of RMB2,318,238 million or 16.8% over
+the end of last year. Corporate deposits stood at RMB16,209,928 million,
+representing an increase of RMB1,538,774 million or 10.5%. Corporate
+customers numbered 12,059 thousand, up 1,366 thousand.
+60 Major Controlled Subsidiaries
+and Equity Participating
+Company
+32
+Annual Report 2023
+Discussion and Analysis
++
+The Bank consolidated its credit advantage in the
+manufacturing industry. Guided by the strategies
+of building a great power in manufacturing
+and science & technology, the Bank served the
+breakthroughs in core technologies of key industrial
+chains, and actively supported high-quality
+advanced manufacturing enterprises. The Bank
+solidified the foundation of financial services for the
+manufacturing industry, and launched a special plan
+for providing financial support for the development
+of advanced manufacturing clusters in conjunction
+with the Ministry of Industry and Information
+Technology. The balance of loans to manufacturing
+stood at RMB3.8 trillion, representing an increase of
+RMB828,870 million or 27.3% over the end of the
+previous year.
+The Bank continued to optimize the construction
+of specialized technology finance institutions,
+established the Head Office's Technology Finance
+Center, and preliminarily formed a four-level
+interconnective professional service system for
+the Head Office, branches, sub-branches and
+outlets. It deepened the "Chunmiao Action", and
+increased financing for technology enterprises. The
+Bank strengthened the "equity, loan, debt and
+insurance" interconnection, granted more loans
+to Specialization, Refinement, Differentiation and
+Innovation ("SRDI") enterprises, gave play to the
+role of sci-tech innovation in driving the modern
+industrial system, and supported the virtuous
+circle of "sci-tech industry finance". The
+balance of loans to strategic emerging industries
+reached RMB2.7 trillion, representing an increase of
+RMB948,405 million or 54.1% over the end of the
+previous year.
+-
+The Bank continuously stepped up financial support
+for private enterprises and kept improving financial
+services for these enterprises. It held a private
+enterprise symposium, and released the Financial
+Support Action Plan for High-quality Development of
+Private Enterprises. The bank-wide "Five Emphases"
+series activities were held to support the high-
+quality development of private enterprises. The
+Bank also held financial training programs for senior
+management of private enterprises.
+The Bank advanced the comprehensive development
+of green finance and kept its leading position.
+The Opinions on Promoting the High-quality
+Development of Green Finance of ICBC were
+developed, upgrading the seven major systems
+of green finance, including layout, products, risk
+control, management, research and organization.
+As at the end of 2023, green loans under the
+NFRA's criteria amounted to nearly RMB5.4 trillion,
+representing an increase of nearly RMB1.4 trillion
+over the end of the previous year.
+The Bank endeavored to support the major strategies
+and key fields in relation to the high-level opening
+up and the Belt and Road Initiative. The Bank also
+held a forum on facilitating the optimization of
+business environment for foreign investment, and
+released a financial proposal for foreign-invested
+enterprises at the forum. The Bank provided full-
+spectrum financial services for over 120 thousand
+foreign-invested enterprises to come to China for
+business development and expansion. In the fields
+of ensuring the supply of strategic resources, serving
+Chinese manufacturing enterprises "Going Global",
+and supporting infrastructure connectivity and green
+and low-carbon development, the Bank vigorously
+supported Chinese enterprises in laying out high-
+quality resources abroad, advanced manufacturing
+enterprises in making the best of both domestic
+and overseas markets, and pushed forward the
+implementation of landmark infrastructure projects.
+In 2023, the Bank won the "Best Domestic Bank for
+Belt and Road" award from the Global Finance and
+the "Project Finance House of the Year" award from
+The Asset again.
+Annual Report 2023
+Other
+2022
+12.4
+18.3
+Discussion and Analysis
+Due to Customers
+Total liabilities
+Other
+Debt securities issued
+Repurchase agreements
+Due to banks and other financial institutions
+Due to customers
+Item
+Structure of liabilities
+424,720
+100.0
+421,966
+Profit before taxation
+43 Financial Market Business
+0.7
+42.2
+Personal banking
+150,474
+35.7
+187,093
+44.1
+45 FinTech
+Treasury operations
+77,165
+52,740
+186,946
+45
+Intelligent upgrading of remote banking services was
+pushed forward. The "Intelligent Service Center"
+has been upgraded with high quality. The Bank was
+the first among peers to apply large-scale model
+technology to scenarios such as seat assistant,
+in order to ensure multilingual services during
+significant events such as the Chengdu FISU World
+University Games and the Asian Games Hangzhou.
+The annual service volume was 2.15 billion, and
+the answering rate and intelligent diversion rate
+stayed ahead of peers. The Bank accelerated the
+construction of the "Digital Operation Center",
+established a billion-level customer contact platforms
+such as WeChat ecosystem, intelligent outbound
++
+In terms of foreign institutional investors trading
+business in China's interbank market, the Bank
+actively served foreign institutional investors from
+more than 60 countries and regions throughout
+the world, to meet their needs for investment and
+trading in China's interbank market. The Bank
+won the "Excellent Settlement Agent under Global
+Connect Business" and the "Excellent Contributors
+to International Business" granted by China Central
+Depository & Clearing Co., Ltd., and the "Cross-
+border Subscription Pioneer (Underwriter)" granted
+by Bond Connect Co., Ltd.
+Asset Securitization Business
+In 2023, the Bank issued eight asset-backed
+securities, all of which were NPL securitization
+programs, with a total amount of RMB5,966 million.
+Precious Metal Business
+The Bank enhanced the inclusiveness of precious
+metal physical products, and launched a new
+version of small specification affordable Ruyi gold
+bars, lowering the threshold for purchasing gold.
+Tailored to the preferences of young customers, the
+Bank developed the second phase of "Harry Potter"
+products. In line with regional characteristics, it
+developed the "Magnificent Sichuan • Traveling
+Panda" series products, and won the "Happy Tianfu
+Chengdu Gift" gold award.
+•
+Precious metal services targeted at corporate and
+institutional customers were improved. Focusing
+on the construction of a modern industrial system,
+the Bank consolidated financial services for
+enterprises in the industry chain of precious metals,
+and developed raw material financing services for
+emerging industries that apply precious metals,
+such as petroleum refining, photovoltaics, and new
+materials. The Bank actively satisfied the demand
+for interbank gold leasing, and steadily promoted
+the cooperation of banks in association to gold
+accumulation products, to further meet the asset
+allocation needs of customers in urban and rural
+markets.
+In 2023, the Bank ranked first in the market in terms
+of the amount of clearing on behalf of Shanghai
+Gold Exchange, and the scale of enterprise gold
+leasing and interbank gold leasing. The Bank was
+awarded "First Prize of the Excellent Financial
+Member" and "Best Product Promotion Contributor"
+again by the Shanghai Gold Exchange.
+44
+Annual Report 2023
+Discussion and Analysis
+FinTech
+Adhering to technology-driven development and value
+creation, the Bank quickened the pace of building a tech-
+empowered bank and D-ICBC. It cemented the foundation
+of production and operation safety, enhanced the ability
+to drive innovation by technology, deeply cultivated the
+D-ICBC digital ecosystem, and deepened the reform
+of information technology systems and mechanisms to
+develop a new engine that meets the requirements of
+high-quality development.
+In 2023, the Bank was ranked first place in the banking
+industry in NFRA's IT supervision ratings, keeping the
+leading position among peers. The Bank's five technical
+achievements won PBC's "FinTech Development
+Awards", of which the banking FinTech online database
+transformation project won the First Prize. The Bank
+won a number of FinTech awards, including the "Best
+Process Automation Project", the "Best Data Management
+Implementation" and the "Best Banking as a Service
+Technology in China" granted by The Asian Banker, and
+the "Institution of Excellence in Financial Innovation" and
+the "Outstanding Cases of Fintech Innovation" granted
+by The Chinese Banker. The Bank's Al big model was
+ranked first in the "Top 10 Financial Informatization Events
+in 2023" by the Financial Computerizing of PBC. It was
+the only innovative application of big model technology
+selected in the banking industry. The Bank was the first
+and the only one to receive the highest level of financial
+digital capability maturity certification from the National
+Financial Technology Certification Center.
+Consolidating the Foundation of Production
+and Operation Safety
+The Bank actively responded to the complicated and
+changing external situation and the new challenges
+brought by technological innovation, adhered to
+the production safety measures, and deepened the
+transformation of production, operation and maintenance.
+It improved the cyber security defense capability on all
+fronts, and further enhanced the technical capability of
+data security. The availability of the Bank's information
+system remained above 99.99%, providing strong support
+for the Bank's digital transformation.
+In terms of foreign exchange settlement and
+sales and foreign exchange trading on behalf of
+customers, the Bank strengthened dissemination of
+the foreign exchange risk-neutral philosophy, and
+promoted the philosophy and currency risk hedging
+products to foreign-related enterprises online and
+offline by various means, in order to help enhance
+the awareness of risk aversion and the capability of
+managing currency risk. Support for micro, small and
+medium-sized enterprises was enhanced. A number
+of branches have completed the first currency risk
+hedging transaction for micro, small and medium-
+sized enterprises under the third-party guarantee
+within their jurisdiction, effectively lowering the
+business access threshold and transaction costs
+for customers. The Bank accelerated product and
+service innovation, and added seven cash exchange
+currencies, to provide high-quality financial services
+for major events such as the Chengdu FISU World
+University Games and the Asian Games Hangzhou.
+It launched RMB foreign exchange option services in
+electronic trading platforms and Chat Dealing system
+to improve customers' experience.
+The Group's cyber security defense capability was
+improved. The Bank continuously improved the
+overall management mechanism for cyber security,
+enriched the threat information bank, enhanced
+vulnerability threat awareness, strengthened the
+disposal of internet attack sources, and regularly
+verified its effectiveness. It stepped up efforts in
+building the cyber security team and enhancing
+the capability of defensing cyber-attacks, actively
+optimized and upgraded the enterprise-level cyber
+range, and carried out innovation in distributed
+range in conjunction with national labs. The
+Bank actively carried out special investigations
+and reinforcement of cyber security throughout
+the Group, improved cyber security plans such as
+ransomware attacks, and enhanced the overall
+capability of cyber security protection of the Group.
+A leading operation maintenance and disaster
+recovery backup system has been put in place.
+The Bank strengthened modular operation and
+maintenance service capabilities from a business
+perspective, and enhanced production and
+maintenance capabilities such as end-to-end
+monitoring of the entire chain, and high availability
+of disaster recovery. It upgraded the architecture
+of operation and maintenance tools, and steadily
+pushed forward the transformation of production
+and maintenance. The Bank comprehensively
+upgraded the disaster recovery support system,
+enhanced the high intra-city availability of important
+business systems and the practical capability of
+non-local disaster recovery takeover, promoted
+the construction of non-local autonomous and
+controllable disaster recovery cloud platforms, and
+strengthened the disaster recovery capabilities of
+core business scenarios on all fronts.
+4
+Discussion and Analysis
+Fifth, elderly industry finance achieved sound development. Closely following the country's layout of the
+silver economy and the pension industry planning of each region, the Bank optimized credit policies and increased
+financial support for the elderly industry, to boost the high-quality development of the silver economy. The Bank
+provided comprehensive financial service solutions to meet the financial needs of enterprises in the pension
+industry for investment and financing, account management, payment and settlement, and digital and intelligent
+scenario construction. The Bank made good use of the policy instrument of special refinancing for inclusive
+pensions to provide good financial services for inclusive pension enterprises.
+42
+Annual Report 2023
+.99
+Discussion and Analysis
+Financial Market Business
+Money Market Activities
++
++
+Digital
+In terms of RMB, the Bank effectively fulfilled
+the responsibilities assigned by PBC for primary
+dealers in the open market, efficiently assisted with
+the dissemination and transmission of prudent
+monetary policies, and actively increased funding
+support for financial institutions in the market. The
+Bank scientifically developed financing strategies,
+rationally devised financing maturities, varieties and
+counterparty structures, and constantly improved
+the efficiency of treasury operations.
+transformation was deepened on all fronts. Fully
+leveraging advantages of independent research
+and development, the Bank launched the functions
+such as automatic inquiry via artificial intelligence
+machine and intelligent transaction assistant, and
+achieved further breakthroughs in the fields such as
+intelligent transactions and risk control throughout
+the entire business process. The Bank continuously
+refined system functions and institutional
+systems, monitored and assessed the credit status
+of counterparties in a forward-looking way,
+effectively prepared risk response plans, and strictly
+implemented various risk prevention and control
+measures, in order to ensure fund security.
+In terms of foreign currencies, the Bank
+strengthened the analysis and judgment of changes
+in the fund liquidity and interest rates of foreign
+currency markets. While ensuring liquidity safety,
+it flexibly devised financing maturity and currency
+variety to improve the use quality and efficiency
+of foreign currency funds. As a quotation bank in
+the interbank foreign currency lending market, the
+Bank actively participated in the settlement express
+project of China Foreign Exchange Trade System and
+other business innovations, continuously maintaining
+its leading position in China's foreign currency
+market. In 2023, the Bank continuously won many
+honors, including the "Best Foreign Currency
+Lending Panel Bank", the "Best Foreign Currency
+Lending Member" and the "Best Foreign Currency
+Repurchase Member" granted by China Foreign
+Exchange Trade System.
+Investment
+In terms of RMB bonds, the Bank persisted in serving
+the real economy, and gave play to its role as a large
+state-owned bank in financial services. It constantly
+consolidated its advantages in government bond
+investment, providing strong fund support for
+economic development. The Bank continuously
+facilitated enterprise bond investments in key fields
+such as green development, advanced manufacturing
+and sci-tech innovation.
+In terms of foreign currency bonds, the Bank steadily
+engaged in foreign currency bond investment, and
+domestically adjusted the structure of investment
+portfolios. It continuously improved the security and
+yields of the portfolios, and stepped up supports to
+advanced manufacturing, sci-tech innovation, green
+finance and so on. Furthermore, it activated the
+offshore market and steadily advanced "Southbound
+Connect" bond investment transactions. The Bank
+I came in first among Chinese-funded banks in the
+selection of "Top Investment Houses in Asian G3
+Bonds" by The Asset for the third consecutive year,
+constantly improving its market image.
+Annual Report 2023
+43
+Treasury Trading Business on Behalf of
+Customers
+The data security management system was refined.
+The Bank improved data security management
+system, intensified data security organization
+guarantees, and formed an integrated data security
+management organization structure featuring
+interaction between the Head Office and branches
+and well-defined responsibilities. The Bank
+optimized the data security technology management
+framework, reinforced the data security technology
+defense system, ameliorated the data security
+technology platform, and accumulated standardized
+data security technology capabilities. The Bank
+continuously pressed for the implementation of
+tiered and classified data security standards, carried
+out data security risk assessment and emergency
+drills, and intensified promotion and training in this
+regard to enhance the bank-wide awareness of
+protecting data security.
+Annual Report 2023
+48
+Annual Report 2023
+46
+Technical innovation mechanism was improved. The
+Bank continuously refined the open competition
+mechanism, did a good job in selecting and
+evaluating the projects in key business and
+technology fields, and selected and rewarded
+the technology projects of great significance
+to the Bank and typical outstanding projects in
+digital transformation, which highlighted the
+practice and performance-oriented approach, and
+exerted the benchmark and demonstration effect.
+The Bank continuously improved the product
+management mechanism, implemented enterprise
+risk management requirements, expanded the
+coverage of the Group's product catalog, created
+a normalized operation mechanism, improved the
+experience enhancement mechanism featuring the
+internal closed loop of technology, and increased the
+proportion of resolved R&D experience problems.
++
+The Bank kept improving information technology
+innovation mechanisms, and reinforced the building of
+information technology talent teams. It deepened the
+information technology basic governance, continued
+to improve financial innovation response efficiency and
+supply capability, and unleashed the vitality of the Bank's
+FinTech innovation. The Bank invested RMB27,246 million
+in FinTech in 2023, and it had 36 thousand FinTech
+personnel, accounting for 8.6% of all employees across
+the Bank.
+Deepening the Reform of Technical System
+and Mechanism
+For details, please refer to the section headed "Hot
+Topics in the Capital Market - Hot Topic 5: Continuous
+Deepening of D-ICBC".
+The Bank continuously deepened the integration of
+technology, data, and business, and steadily promoted
+the development of D-ICBC. A series of digital innovation
+achievements have been made. D-ICBC has been
+playing an increasingly pivotal role in empowering the
+transformation and innovative development of the Bank.
+Deeply Cultivating the Digital Ecosystem of
+D-ICBC
+regulators. The Bank released the Research Report on
+Quantum Computing Financial Application to actively
+explore quantum computing application in the
+financial industry. It also joined forces with leading
+enterprises to promote collaborative innovation. The
+quantum key distribution and encryption functions
+were launched in external business terminals to
+enhance the security of financial data transmission.
+The Bank accelerated the exploration of applying
+cutting-edge technology research achievements. It
+explored the application of privacy computing in
+cross-institution scenarios, collaborated with financial
+peers to achieve interbank fund flow verification
+based on such technology, and received acclaim from
+The cultivation of new technology platform support
+capabilities and scenario applications were advanced.
+The Bank established the first 100 billion-level fully
+stack autonomous and controllable Al big model
+technology system in the industry, and took the
+lead in achieving innovative applications in multiple
+financial business fields. It enhanced the technical
+capability of the enterprise-level data middle office
+and big data platform with the real-time data
+warehousing capability, thereby optimizing data
+permission and comprehensively improving the
+timeliness and availability of big data resources. The
+Bank continuously advanced the construction of
+Robot Process Automation (RPA) technology platform
+and its application to business. The platform has
+been applied in 37 business lines. 13 comprehensive
+digital employees and over 1,000 digital employees
+for process automation were under construction,
+with an intelligent efficiency of over 30 thousand
+people per year, helping to improve employees'
+burden.
+The Bank's flexible, reliable clouds and distributed
+technology system was upgraded. The Bank actively
+promoted the plan on Group-wide clouding
+infrastructure construction, bringing the number
+of cloud nodes to more than 200 thousand, and
+the number of business containers to over 140
+thousand. The scale kept the bank in an industry-
+leading position. Customer information and personal
+accounts have been fully migrated to the "cloud +
+distributed" autonomous and controllable platform,
+and achieved full architecture transformation of retail
+banking. More than 80% of the business volume
+in the Bank's core system was based on the single
+track operation of an open platform. The Bank has
+smoothly tackled the real test of multiple business
+peaks and complex scenarios in 2023.
++
+Upholding the philosophy of technology self-reliance,
+the Bank upgraded the ECOS technology ecosystem,
+promoted technology breakthroughs in key fields of core
+technologies, accelerated the transformation of cutting-
+edge technological research results into business value,
+and fully empowered digital transformation, to support
+overall business development with high-end technologies.
+Enhancing the Innovative Technology-driven
+Capabilities
+Discussion and Analysis
+4
+Discussion and Analysis
+The governance of technology and data foundation
+was deepened. The Bank strengthened product
+and demand management, organized the exit of
+inefficient products and functions, and developed
+a demand integration and improvement plan.
+The Bank deepened the integration of R&D and
+operation, enhanced the "One Click Deployment"
+capability of application versions, and built a
+one-stop production workbench for application,
+operation and maintenance personnel, significantly
+improving efficiency. The Bank refined the basic
+management of technology equipment resources
+and developed a plan to enhance the management
+of technology equipment resources. The Bank carried
+out data asset inventory and ownership confirmation,
+continuously expanded data resources, deepened
+data governance, and solidified the foundation of
+digital management. In the exploration of FinTech
+ethics, the Bank issued the Administrative Measures
+for FinTech Ethics, and embedded the requirements
+of FinTech ethics throughout the entire process
+of technology application, innovation and R&D, in
+order to enhance the effectiveness of technology
+management in the new context.
+The building of the technical data talent team was
+enhanced. The Bank continuously optimized the
+structure of technology talents. Relying on the "Tech
+Elite" recruitment brand and the centralized training
+mechanism, the Bank accelerated the transformation
+of grassroots FinTech functions towards innovative
+R&D and marketing service support, and
+strengthened the high-quality technology supply
+capacity. The Bank kept improving the environment
+for the development of information technology
+talents, and actively carried out exchange projects
+such as targeted support for information technology
+talents, in an effort to build a top-notch information
+technology talent team. The Bank continuously
+enhanced the professional capabilities of information
+technology talents, and deployed multi-level talent
+training programs targeted at leading and backbone
+talents, focusing on digital transformation and
+FinTech. The Bank promoted the in-depth integration
+of data talent cultivation and business development.
+The Group had 9,375 data analysts, covering various
+professional lines and coming from domestic and
+overseas institutions. It has formed a digital talent
+foundation, which consists of junior, middle and
+senior levels, and combines full-time and part-time
+positions. Through modeling competitions, data
+elites, cross-sector exchanges, integration of industry,
+academia, and research, and systematic training
+and practice, the Bank set up a flexible analyst team
+dedicated to "data + business + application", to
+deepen the integration of data and industry, and
+empower business development.
+Initial progress has been achieved in the building
+of a digital operation system. The Bank created
+an integrated chain of understanding, acquiring
+and activating customers and transforming value
+online in the digital era, and built a digital customer
+contact matrix. Based on platforms such as personal
+mobile banking, corporate mobile banking,
+internet banking, and enterprise WeChat, the Bank
+capitalized on new digital tools to promote the
+acquisition, retention, activation, and prevention of
+loss of all customers in a layered manner throughout
+the lifecycle of customers. The Bank carried out
+intensive, online, and large-scale maintenance of
+long-tail customers, and deepened joint operation
+for key customer groups such as wealth, credit
+card, third-party payment, agency issuance, and
+inclusive small and micro customers, to support
+the appreciation of customers' financial assets, and
+make digital financial services accessible to more
+customers.
+Customer services were promoted in a coordinated
+manner for better quality. The Bank built an
+enterprise-level digital experience management
+platform to understand feedback from customers
+and employees, thus continuously improving the
+capability of digital management of customer
+experience. The Bank deepened the root cause
+management and online centralized handling of
+complaint issues, optimized product experience,
+strengthened the ability of remote customer service
+personnel to deal with complaints online, and
+improved customer service assessment. To solve
+customers' pressing difficulties and problems, the
+Bank carried out a mobile banking experience
+activity for all staff, and further refined process
+design focusing on key functions such as registration
+and login, account management, transfer and
+remittance, and facial recognition authentication, in
+an effort to improve customer experience.
+calling, and outbound SMS, and created the most
+comprehensive media matrix in the industry, covering
+mainstream high-traffic platforms in the industry.
+The Bank improved the efficiency in building the
+"Business Empowerment Center", with more than
+700 million intelligent outbound calling in the year.
+The scale of intelligent outbound calling was the
+largest and widest. The Bank actively promoted the
+upgrading of capabilities such as content production
+of new media, customer experience analysis, online
+risk prevention and control, and employee business
+support, in order to empower business development
+and brand promotion.
+Annual Report 2023
++
+Cultivating New Momentum of Digital
+Operation and Enhancing Enterprise-level
+Digitalization Capability
+Overseas internet finance developed steadily. The
+Bank launched a column of mobile banking services
+for the Greater Bay Area, achieving mutual identity
+recognition, scenario sharing, and fund connectivity.
+"Cross-border e Payroll" services were rendered in
+nine countries and regions, and overseas internet
+finance services have covered 43 countries and
+regions. Overseas personal mobile banking (version
+8.0) and overseas enterprise internet banking
+(intelligent version) were launched in an innovative
+way, providing more choices for overseas institutions
+to develop local markets.
+Dual-driven online services were offered for rural
+revitalization. The Bank built an online accessible
+service system focusing on ICBC "Xingnongtong"
+App and "Xingnongtong" mobile banking version,
+to assist in promoting financial services in rural
+areas. The Bank provided exclusive loans, large-
+value deposits and other financial services for
+rural customers in county areas, serving over 160
+million active customers accumulatively. The Bank
+launched featured products such as Planting e Loan,
+county-level exclusive deposits, and large-value
+certificates of deposits, and provided "Agricultural
+Matchmaking" services for over 350 thousand
+agriculture operators. In conjunction with China
+CO-OP Group and the supply and marketing
+cooperatives at all levels, the Bank integrated finance
+into core supply and marketing business scenarios
+such as agricultural materials trade and agricultural
+product sales. The Bank established a "targeted
+assistance and consumption column" to assist in
+revitalizing rural industries.
+Fourth, elderly wealth management kept improving. The Bank integrated various products such as deposits,
+wealth management, funds, insurance, etc. to meet the wealth preservation and appreciation needs of elderly
+customers and those who were getting old, and launched multiple exclusive products and related rights and
+interests, providing diversified financial investment modes for personal customers to achieve their elderly care
+goals. Relying on holding themed activities on elderly related holidays by outlets and online channels, the Bank
+delivered lectures on pension policies and pension investment knowledge to assist residents in reserving elderly
+care funds.
++
+Discussion and Analysis
+47
+Annual Report 2023
+The Bank opened a new chapter in the open banking
+ecosystem. Relying on corporate internet banking
+and mobile banking, the Bank created the "ICBC e
+Cloud" corporate digital financial service platform,
+and launched the SRDI service column, inclusive
+column, and other services for exclusive customer
+groups, providing customers with ecological services
+that integrate multiple financial and business
+scenarios. At the end of 2023, the Bank had 15.12
+million corporate internet banking customers, with
+6.17 million monthly active corporate internet
+banking customers, ranking first in the industry
+in terms of customer base and activity. The Bank
+built the "ICBC e Pooling" open financial service
+platform, to enhance basic service capabilities from
+the perspective of users. It launched a new portal for
+open banking services, and formed a comprehensive
+service solution tailored to the needs of platform-
+based customers. It also provided integrated and
+comprehensive financial services to meet customers'
+diversified financial needs.
+The building of the "Best Mobile Banking" has
+stepped up to a new stage. Towards the direction
+of intelligence, simplicity and humanization,
+the Bank launched innovative personal mobile
+banking (version 9.0), focusing on mega wealth,
+full financing, consumption promotion, strong
+intelligence, and better experience, to create a
+panoramic digital financial service system. The
+Bank took the lead in the industry to launch such
+services as family wealth, inclusive financing for
+people and enterprises, wrap-around homepage,
+3D precious metal exhibition hall, etc., continuously
+enhancing the momentum of digital innovation.
+The Bank innovated the scenarios of consumption,
+rural areas, convenient services, and cross-border
+business, upgraded the right and interest center 2.0,
+and provided new experiences for customers in one-
+stop inquiry about and use of customer rights and
+interests. At the end of 2023, the Bank had 552
+million personal mobile banking customers, with
+more than 229 million monthly active mobile users,
+leading the industry in terms of customer base and
+activity.
+Reinforcing New Infrastructure of Digital
+Finance and Deepening the Construction of
+Core Platforms
+Aiming at building D-ICBC, the Bank accelerated the
+construction of a digital financial service system that is
+compatible with a modern economic system, to develop
+a new mode of digital financial development with a focus
+on building platforms, enhancing capabilities, expanding
+scenarios, and building ecosystems. In 2023, digital
+business accounted for 99.0% of the total.
+Internet Finance
++
+Third, remarkable achievements were made in elderly customer services. Adhering to the philosophy of
+loving, assisting, and serving the elderly, the Bank actively provided considerate pension finance products and
+services for the people. Focusing on the needs of elderly customers, the Bank pushed forward the upgrading of
+outlet facilities catering to the needs of elderly customers, refined the "ICBC Aixiangban" elderly customer service
+brand, improved the functions of the "Happy Life" version of mobile banking, developed an "ICBC Sharing Station
++ Elderly Care" outlet service scenario, and promoted the complementary connection of online and offline service
+channels. The Bank carried out various "respecting and loving the elderly" actions, launched comprehensive
+financial account security locks, and provided financial security education to help the elderly build a line of defense
+for financial fraud.
+In terms of the over-the-counter ("OTC") bond
+business, the Bank was among those that first
+participated in the issuance of Shanghai Clearing
+House OTC bonds issued by the Export-Import
+Bank of China and the Agricultural Development
+Bank of China to small and medium-sized financial
+institutions. It also distributed the financial bonds
+and green bonds of the Agricultural Development
+Bank of China with the themes such as "supporting
+the construction of high-standard farmland", as well
+as the OTC local government bonds in 35 provinces
+(autonomous regions, municipalities directly under
+the Central Government, and cities specifically
+designated in the state plan), to assist in building
+a multi-level bond market system, and actively
+support green finance, agricultural development and
+regional development. The Bank won the "Excellent
+Underwriter Award for Over-the-Counter Circulating
+Bonds", the "Excellent Underwriter Award for Over-
+the-Counter Local Government Bonds" granted by
+China Central Depository & Clearing Co., Ltd. and
+the "Excellent Participant in OTC Bond Business" by
+Shanghai Clearing House.
+In 2023, the Bank continued to improve the layout of pension finance work under the guideline of the
+Central Financial Work Conference. The Bank optimized the supply of pension finance products and services,
+and promoted innovation in comprehensive and ecological service models, to effectively meet the needs of
+governments, enterprises, and individuals for pension finance. Through continuous development, the Bank has
+established a pension finance operation pattern featuring standardized management, professional teams, complete
+products, and efficient operation, maintaining a leading position in basic pension insurance, annuity management,
+personal pension, elderly customer services, and elderly industry finance.
+Model forecast
+Reach
+coordination
+Outlet front marketing
+¦ Online active reach
+Anti-disturbance monitoring
+.99
+Annual Report 2023
+39
+Discussion and Analysis
+BB
+III.
+IV.
+Leveraging Channel Advantages to Create an Ecological Service System
+First, building a full-journey wealth companionship system. Relying on the mobile banking wealth
+community, the Bank launched three innovative tools: automatic fund investment plan, index-based
+fund selection, and hot topic-based fund selection, to meet the personalized and companionship wealth
+management needs of customers and create the "Wise Gold" brand. Meanwhile, the Bank took the
+lead in the industry to launch family finance service mode, providing such services as family relationship
+management, family asset management and family interests management. The service was upgraded from
+serving one person to serving one family. As at the end of 2023, the number of followers of the wealth
+community exceeded 39 million, and the wealth community received wide recognition from customers.
+Second, strengthening the integrated online and offline operations. The Bank actively carried out
+the "ICBC Wealth 518, 828 and 1118" series activities to continuously expand the full customer service
+scenarios, strengthen the advantages of digitalization of wealth community service elements, dynamic
+operation location, automated path access, personalized investment companionship, intelligent sales
+adaptation, and customer business clustering, and improve refined operation and customer experience.
+Empowering Outlets Services and Implement Platform-based Business Management
+First, jointly creating a new ecosystem of digital services. Adhering to the service philosophy of "digital
+finance" and relying on digital assets and digital technology, the Bank explored data-driven new models
+in the field of wealth management, provided platform support for digital management of products, multi-
+dimensional customer profiling, marketing strategy coordination, digital operation of customer groups,
+and ultimate experience evaluation, and comprehensively structured a new ecosystem of ONE-ICBC digital
+services. Second, endeavoring to cultivate new capabilities of digital operation. The Bank launched
+the Digital Intelligent Operation Platform for Personal Banking (DIMO), which integrates 28 professional
+systems, applies digital thinking to deconstruct the logic of personal banking transformation, builds four
+innovative segments: intelligent decision-making, intelligent reach, intelligent operation, and intelligent
+management, creates a one-stop workbench for operation and management, empowers outlets to improve
+service quality and efficiency, and achieves more efficient business management and more targeted customer
+service.
+40
+40
+Intelligent
+decision-making
+Expert rules
+Strategy
+computing
+Intelligent Brain
+First, the layout of pension finance kept improving. The Bank provides financial solutions targeted at
+governments, enterprises and individuals. It actively gave play to the organizational role of the Pension Finance
+Committees of the Head Office and branches, strengthened cross-sector, cross-level and cross-customer group
+coordination and collaboration across the Group, and formed a pattern of unified planning and classified
+management. The Bank improved the product and service system of pension fund finance, elderly service finance,
+and elderly industry finance, took the lead in the industry to establish a pension finance business indicator system
+covering nine lines and 31 indicators, and developed and put into operation a pension finance data platform.
+Second, the Bank stays ahead of its peers in terms of pension management. The Bank launched a
+panoramic view of pension finance services, allowing customers to conveniently query the pillar 1, pillar 2, and
+pillar 3 pension assets through mobile banking, and independently carry out pension planning and measurement.
+In terms of pillar 1 basic pension insurance, the Bank comprehensively provided financial services to support
+various reforms of social security, actively participated in social security informatization, and went all out to
+ensure the operation of social security funds. The Bank ranked high among peers in terms of the scale of social
+security deposits and the number of financial social security cards issued. In terms of pillar 2 enterprise annuity
+and occupational annuity, the Bank and its subsidiary ICBC Credit Suisse Asset Management Co., Ltd. have "full-
+license" qualifications for trusteeship management of annuity, account management, custody, and investment
+management. As at the end of 2023, total pensions under management of the Group reached RMB4.1 trillion.
+In terms of pillar 3 personal pension, the Bank took the lead among financial institutions to launch personal
+pension business, and developed a diversified product line covering pension savings, pension wealth management,
+pension target funds, and commercial pension insurance. It provides customers with full-process services such as
+account opening, fund contribution, product investment, benefit receipt, and personal income tax withholding and
+payment.
+Discussion and Analysis
+вв
+New Breakthroughs Made in
+Personal Wealth Management
+In 2023, the Bank continued to deeply implement the No.1 Personal Bank Strategy, with the goal of creating
+customer value and improving customer experience. It accelerated the construction of a new ecosystem of
+digital customer services, promoted the construction of "master wealth accounts" for customers, strengthened
+its customer reach, and improved the quality and efficiency of internal business management, to help residents
+generate more property income. During the reporting period, the balance of personal financial assets of the Bank
+exceeded RMB20 trillion, maintaining a leading position in the market.
+I.
+II.
+Increasing Diversified Supply to Meet Customer Needs
+Business view
+First, improving savings deposit products and services. While providing customers with full maturities
+and full varieties of savings deposit products, the Bank launched the "Zhi Cun Bao" service to render digital
+services such as periodic automatic deposits and receipts for customers and better respond to their demand
+for convenient services. Second, building an open inclusive wealth management system. Relying on
+the digital financial capabilities of ICBC, the Bank launched an innovative automatic investment plan. The
+Bank set a purchase threshold at RMB1 based on the inclusive philosophy, so as to meet the three types
+of fund management needs of customers, i.e. "spare money management, sound profitability, and income
+advancement", and provide product support for customers to create long-term value. Third, increasing the
+supply of stable fund products. Based on market trends and customer appetite, the Bank increased the
+supply of index fund products, launched innovative personalized investment tools such as "target investment
+and automatic intelligent fund investment", and guided customers with high and medium risk appetite to
+make investments in adverse situations and improve return elasticity.
+First, continuously iterating the "Intelligent Brain" strategies and functions. With the "Intelligent
+Brain" as the center of marketing strategy, the Bank made efforts to improve customer perception and
+computational accuracy. A total of 61 intelligent models and 7,200 marketing service strategies have been
+deployed, covering over 50 thousand products, services, and promotion activities. It generated real-time
+differentiated service plans for a total of 740 million customers, forming a new approach and mechanism
+of digital services for personal customers. In 2023, the "Intelligent Brain" strategy service was provided to
+200 million customers, directly facilitating customers to purchase key products worth RMB1.87 trillion, 2.14
+times that of 2022. Second, improving the "intelligent asset allocation" service system. The Bank
+accelerated the iteration and upgrading of asset diagnosis and planning functions, restructured the scenario
+models of children's education, elderly care planning, and large-value expenditures, and developed a one-
+stop, personalized asset allocation service platform. In 2023, the Bank provided intelligent asset allocation
+services for nearly 6 million customers, driving AUM up more than RMB440.0 billion and facilitating product
+transactions of approximately RMB500.0 billion.
+Investment and wealth management
+Lending and financing
+Consumption payment Customer
+Account management
+perception
+Process monitoring Assessment
+Effect statistics
+and feedback
+Promoting Intelligent Asset Allocation to Improve Value
+Digital Intelligent Operation Platform
+for Personal Banking (DIMO)
+E3
+ICBC
+Intelligent wealth
+management
+Wealth Management Services
++
+At the end of 2023, the balance of wealth
+management products reached RMB1,857,056
+million, of which RMB1,607,477 million was the
+balance of wealth management products of ICBC
+Wealth Management. Please refer to the section
+headed "Business Overview Comprehensive
+Operation and Subsidiary Management" for details
+on the business development of ICBC Wealth
+Management.
+Asset Custody Services
+The Bank continued to refine product structure,
+and provided innovative custody services for broad-
+based index funds such as STIB 100 ETF, CSI 2000
+ETF and BSE 50 Index, as well as theme index funds
+such as SOE ETF and Sci-Tech Innovation Theme ETF.
+It provided custody service for the first new energy
+REITS product in the market. The Bank stayed ahead
+of its peers in terms of the scale of "Southbound
+Bond Connect" custody business and the number
+of clients. At the end of 2023, the insurance assets
+under custody totaled RMB7.0 trillion, the mutual
+funds under custody amounted to RMB3.7 trillion,
+and the pension funds under custody of the Bank
+stood at RMB2.8 trillion, all ranking first in the
+industry.
+The Bank accelerated service innovation. It held
+a custody innovation cooperation forum, to
+disseminate custody service and its concept of
+"integration for win-win results, and building
+ecosystem", opening a new chapter in platform-
+based ecological development. It was awarded
+the "Best Custodian Bank in China" by The Asian
+Banker and the "Model Custodian Bank for Mutual
+Funds over 25 Years" by the China Fund News and
+the "Tianji Award for Outstanding Asset Custodian
+Bank" by the Securities Times.
+Pension Services
+The Bank advanced the overall planning of pension
+finance in an orderly manner. The Bank kept
+improving the top-level design, strengthened overall
+planning and promotion, and achieved positive
+results in the ecosystem construction of scenarios
+such as "Net Making and Patching", "Civil Affairs +
+Elderly Care + Finance", and Mobile Banking Pension
+Finance Column.
+The
+Bank strengthened annuity marketing
+capabilities. It successfully won the bids for the
+qualifications of entrusted management and account
+management of multiple large enterprises' annuities.
+It actively carried out tiered marketing, and
+promoted the coordinated development of large,
+medium, and small customers. The pilot program of
+personal pension was launched steadily. It took the
+lead in passing the acceptance of connection with
+the new versions of the Personal Pension Information
+Management Service Platform and the Personal
+Pension Banking and Insurance Industry Information
+Platform of the Ministry of Human Resources
+and Social Security, and stayed ahead of peers in
+achieving closed-loop management of the entire
+business process.
+New achievements have been made in digital
+transformation. The Bank took the lead in the
+industry to launch a panoramic view of mobile
+banking pension finance services, achieving a unified
+display of the "three pillars" of pension assets. It
+continuously enhanced the service capability of the
+pension entrusted investment monitoring system,
+and refined the user experience of "ICBC e Pension".
+At the end of 2023, the entrusted annuity funds
+amounted to RMB554.1 billion. The Bank managed
+13.14 million individual enterprise annuity accounts,
+and the annuity funds under custody reached
+RMB1,378.1 billion. The Bank ranked first among
+peers in terms of the scale of entrusted enterprise
+annuity funds, number of individual enterprise
+annuity accounts and annuity funds under custody.
+The Bank won the "Tianji Award for Pension
+Financial Services Bank" granted by the Securities
+Times again. It also won such awards as "Pension
+Finance Organizations of the Year" granted by
+the yicai.com.
+Annual Report 2023
+41
+Discussion and Analysis
+Great Achievements Made in Pension Finance Service
+Intelligent
+operation
+Actively seizing opportunities for development, the
+Bank enhanced its investment management and
+research capabilities on all fronts and tried to satisfy
+diversified financial demands at the two ends of product
+and investment. At the product end, it improved the
+professionalism of financial services such as wealth
+management, mutual fund, insurance, pension fund, etc.
+and developed the "ICBC Asset Management" brand to
+satisfy customers' demands for wealth preservation and
+appreciation. In terms of wealth management, the Bank
+leveraged its advantage in inclusive wealth management
+service to better satisfy the diversified demands of
+investors, and saw a rapid growth of key inclusive
+finance customers, including new urban residents, rural
+residents and self-employed businesses. In terms of fund,
+it actively catered to the diversified demands of investors
+and bettered companionship for them by tapping into
+its comprehensive advantages such as great business
+varieties, a rich product system and good performance in
+medium- and long-term investment. In terms of insurance,
+the Bank vigorously explored the issuance of insurance
+asset management products, strengthened its diversified
+investment and project development capabilities, and
+actively enhanced the quality and efficiency of its
+response to customer demands. At the investment end,
+the Bank fully capitalized on the wealth management,
+fund and insurance licenses of its integrated subsidiaries,
+focused on product selling through various channels,
+project recommendation, risk control and assessment,
+and intensified supports to investments in high-end
+manufacturing, SRDI enterprises, inclusive small and micro
+enterprises, sci-tech innovation, green development and
+so on, in a bid to fuel China's modern economy system
+building with new development philosophy.
+Asset Management Services
+At the end of 2023, assets under custody (excluding
+fund escrow business) reached RMB21.9 trillion,
+which included assets under fund administration of
+RMB2.4 trillion.
+.99
+Intelligent
+reach
+Discussion and Analysis
+Intelligent brain
+Data report
+Cash flow tracing
+Customer reach
+Customer group
+operation
+Ecological scenario
+Data management
+Data customization
+Marketing resources
+Annual Report 2023
+Intelligent
+management
+Compliance
+management
+Ultimate experience
+Team management
+Intelligent account
+Risk management
+Structure of employee age
+О
+Male
+Female
+Discussion and Analysis
+Below 30 years old
+50.7%
+Structure of employee gender
+49.3%
+5.2%
+⚫ Master
+•
+17.7%
+Associate
+65.1%
+Bachelor
+11.8%
+0.2%
+25.1%
+Doctorate
+Below Associate
+31-40 years old
+● Emerging business
+41-50 years old
+Above 51 years old
+Structure of employee educational background
+Non-banking business
+⚫
+1.8%
+2.4%
+⚫ Other
+6.5%
+Risk and compliance management
+8.5%
+⚫ FinTech
+9.6%
+Operation management
+13.9%
+Corporate banking
+Operation and comprehensive support 14.8%
+41.5%
+Personal banking
+0
+Structure of employee specialization
+27.2%
+20.4%
+27.3%
++
+1.0%
+52
+Annual Report 2023
+50
+Digital empowerment was deepened to open up
+new prospects in operation services. The Bank
+accelerated the reform of outlet operations. It
+comprehensively pushed forward the construction
+of full-journey customer services, and promoted
+online booking and identification and guidance
+services in stores throughout the bank. Scenario-
+based transformation and process reengineering
+were implemented for difficult business operations
+of outlets such as account opening and closure,
+foreign exchange remittance, and inheritance, to
+provide powerful tools to solve customers' pressing
+difficulties and problems. The Bank accelerated the
+empowerment of intelligent technology in business
+operations and the application of new technologies
+such as digital humans and big models in the
+field of operations. The first intelligent assistant
+for outlet employees based on big models was
+officially put into operation, to improve outlet
+efficiency. The annual volume of intelligent business
+processing in the field of operations reached 320
+million, representing an increase of 14% over the
+previous year. Initial progress has been achieved
+in the digital transformation of cash operations.
+Over 200 outlets have introduced the centralized
+physical delivery service model for personal expense
+accounts, deposits and withdrawals and other
+scenarios on a trial basis. Online booking services
+for local and foreign currency banknotes and small
+changes were promoted throughout the Bank. The
+Bank also comprehensively promoted a new task-
+driven treasury operation model. The functions
+and scenarios of self-service channels constantly
+expanded. The Bank promoted bank-government
+interconnection services such as electronic social
+security, tax and fee payment, smart medical
+insurance, credit report, and e-CNY at the smart
+ATMs of outlets. It created the "government service
+halls" by the side of customers. It accelerated the
+upgrading of elderly services at the intelligent
+terminal, launched the function of automatically
+shifting to large font interface for the elderly
+customers, and placed the high-frequency usage
+function of elderly customers on the homepage, so
+as to significantly reduce the threshold for elderly
+customers to use self-service devices.
+and Gong Xiao Cheng" digital employees, covering
+all online and offline channels such as mobile
+banking, remote banking and outlets, and serving
+960 million customers in 2023. The Bank further
+promoted service collaboration among online
+platforms, physical outlets, remote customer service,
+and account managers, to achieve a consistent
+experience of "one-point access, all-channel
+response".
+The Bank expedited all-channel layout and promoted
+channel coordination. The Bank advanced the
+construction of a core service platform for digital
+finance, and established an intelligent, ubiquitous,
+and integrated channel system. It accelerated the
+construction of "ICBC Customer Services" official
+account, with more than 100 million followers.
+It upgraded the cloud outlets 2.0, and formed
+"online stores of outlets" and "cloud outlets
+of customers", with more than 1.2 billion visits
+annually. The Bank released the "Gong Xiao Zheng
+The Bank continuously improved the services of its
+outlets. It fully leveraged the scale advantage of
+physical channel resources, enhanced "ICBC Sharing
+Station+" public welfare services for the benefit
+of the people, and enriched the functions of such
+services. In 2023, it established 6,156 ecological
+outlets with the themes of "ICBC Sharing Station+"
+governance, life, wealth, public welfare, happiness,
+and inclusive finance, increasing the total number
+to more than 11 thousand. The Bank organized
+15.5 thousand ICBC Sharing Stations to expand the
+supply of convenient services in an orderly manner,
+and serve key groups such as outdoor workers,
+students participating in senior high school and
+college entrance examinations, and the elderly. In
+2023, a total of 95 thousand activities were carried
+out, including the Learn-from-Lei Feng voluntary
+service activity entitled "Voluntary Action with You
+in Warm Spring", the "Summer Care Trio" series
+of theme activities, and the "ICBC Aixiangban for
+Double Ninth Festival", benefiting more than 12
+million people. A total of 20 outlets of the Bank
+were awarded "Top 100 Demonstration Units of
+the Chinese Banking Industry for Civilized and
+Standardized Services" by the China Banking
+Association, ranking first in the industry.
+The Bank advanced the construction of inclusive
+finance service points in rural areas in an orderly way.
+Focusing on rural Party building, government affairs,
+agricultural product production and marketing, the
+Bank explored ecological co-building with county
+and township-level governments, village committees,
+large leading enterprises, local enterprises, and self-
+employed businesses. It has set up 4,760 inclusive
+finance service points in rural areas, covering 1,523
+counties across the country. In 2023, the Bank
+handled 3,323 thousand transactions for rural
+customers, and carried out 51 thousand activities
+to combat telecommunications fraud, cherish
+credit, protect consumers' rights and interests and
+disseminate basic financial knowledge, which served
+1,347 thousand customers and effectively improved
+the capability of rural financial services.
++
+Discussion and Analysis
+49
+Annual Report 2023
+The Bank took solid steps to promote the
+optimization of outlets. While strengthening the
+management of outlet access and maintaining overall
+stability, the Bank consolidated the scale competition
+advantage of outlets, increased the number of
+outlets in counties and towns, scientifically dissolved
+inefficient and dense outlets, and continuously
+optimized the layout and structure of outlets. In
+2023, 670 outlets were reorganized, 52 new outlets
+were set up in key areas of cities with relatively
+insufficient service supply, and 57 new outlets
+started operations in county-level areas, covering
+15 counties where there were no ICBC outlets
+previously. The coverage rate of county-level outlets
+increased to 86.9%. Outlet resources have been
+increasingly compatible with regional socio-economic
+resources. The Bank deepened the construction of
+low-carbon outlets and elderly service outlets, and
+decorated 1,045 outlets to ensure outlets are always
+beautiful and new. It continuously improved the
+hardware facilities and services of outlets. At the end
+of 2023, the Bank had 15,495 outlets, 21,023 self-
+service banks, 76,203 intelligent devices and 53,745
+automatic teller machines ("ATMs"). The transaction
+volume of ATMs reached RMB4,587.0 billion in the
+year.
+Outlet Building and Service Improvement
+Positive results have been achieved in the pilot
+promotion of e-CNY. The Bank promoted business
+innovation to achieve online payment of taxes
+in e-CNY, completed the first bulk commodity
+clearing in Shanghai Clearing House, and launched
+intelligent prepaid manager products in the prepaid
+consumption scenarios. It launched the supply chain
+financial service solutions based on e-CNY smart
+contracts, allowing merchants to make payments
+through one QR code. It continuously expanded the
+scale of e-CNY salary payment, and developed e-CNY
+SIM card hardware wallets and other products. The
+innovation of the pilot e-CNY application scenario
+in the securities industry won the first prize in
+the second Capital Financial Innovation Incentive
+Program. In 2023, the number of effective e-CNY
+personal wallets increased by 15.85 million; the
+number of corporate wallets increased by 1.34
+million; and the number of e-CNY merchant stores
+increased by 2.71 million.
+living scenarios. It strengthened education payment
+supervision, alleviated school reconciliation pressure,
+and enriched parental payment methods, serving
+I over 31 thousand primary and middle schools and
+kindergartens, and covering over 12 million parental
+payment customers.
+Serving the digital industry. The Bank innovated
+industry solutions for automobile production
+and sales, industrial chain platforms, and factor
+resource markets, catering to the needs for margin
+management in the trading market, integrated
+payment and settlement of production, supply
+and sales, and financing needs of upstream and
+downstream enterprises in the industrial chain.
+Serving digital livelihoods. The Bank deepened
+cooperation with leading online freight platforms
+and well-known life service platforms, to provide
+considerate services such as agency salary payment,
+inclusive loans, credit cards, medical insurance
+and social security, daily payment, and exclusive
+rights for new urban residents, including truck
+drivers, delivery men, and takeaway riders. Serving
+digital government. Keeping up with the pace of
+digital government construction, the Bank provided
+comprehensive financial service solutions for
+segmented scenarios, covering areas such as "All-
+in-One Code", "All-in-One Network", "Intelligent
+City", "Intelligent Politics and Law", and "Intelligent
+Culture and Tourism", to improve the digitalization
+and intelligence in government affairs. Serving digital
+education. Catering to the digital transformation
+needs of the education market, the Bank innovated
+the "Education Cloud" comprehensive ecological
+service solution, embedding financial services
+such as "collection, payment, reconciliation, and
+clearing" into campus registration, examination,
+accommodation, logistics and other academic and
++
+Building a New Digital Openness Ecosystem
+and Fully Serving the Real Economy
+The digital risk control capability of online platforms
+kept improving. The Bank strengthened the
+prevention and control of risks in online fraudulent
+transactions, established a tiered management
+system for e-banking customer limits, improved the
+accuracy of limit control for personal customers, and
+implemented dynamic management of corporate
+internet banking payment limits. The Bank improved
+the intelligent risk identification mechanism for
+online transactions, deepened the application of
+new device fingerprint technologies, and promoted
+the facial recognition function of enterprise internet
+banking, to effectively prevent the risks arising from
+online fraudulent transactions, and protect the
+security of customer funds. The Bank consolidated
+compliance risk management, achieved the
+collaborative control of personal customers with a
+high money laundering risk through online channels,
+improved APP personal information protection
+policies, and further strengthened the protection of
+customer information in the e-banking system.
+4
+Discussion and Analysis
+Discussion and Analysis
+Annual Report 2023
++
+Human Resources Management,
+Employees and Institutions
+42
+As at the end of 2023, the Bank had a total of
+419,252 employees, including 7,210 employees in
+major domestic subsidiaries, and 15,767 in overseas
+institutions. The Bank's employee gender ratio
+remained generally balanced and there was no
+significant change from the end of last year. In the
+future, the Bank will continue to pay attention to
+the employee gender structure, strengthen tracking
+and monitoring in areas such as personnel exit and
+recruitment, and take effective measures to maintain
+a balanced and stable gender ratio.
++
+Basic Information on Employees and
+Institutions
+The Bank's 2023 remuneration plan was prepared
+and implemented as per the internal decision-making
+process. The execution of total annual salaries was
+reported to the authority for filing according to
+national regulations. During the reporting period, the
+Bank's Senior Management fulfilled the indicators
+concerning economic, risk and social responsibilities
+well, and the final results will be determined after
+deliberation by the Board of Directors.
+4
+The Bank's employee remuneration consisted of basic
+remuneration, performance-based remuneration and
+welfare income. In particular, the basic remuneration
+depended on an employee's value contribution and
+ability to perform duties, and the performance-based
+remuneration was based on the overall situation of
+the Bank, the employee's institution or department,
+and the employee's personal performance
+measurement results. Meanwhile, the performance-
+based remuneration to the Senior Management
+and employees in positions that have a significant
+influence on risks was subject to a deferred payment
+and recourse deduction mechanism, so as to balance
+risks and incentives. For employees who violated
+regulations and disciplines or had abnormal exposure
+to risk losses within their duties, their performance-
+based remuneration for the corresponding period
+shall be deducted, withheld and recovered according
+to the severity of the violation. During the reporting
+period, according to relevant measures, the Bank
+deducted, withheld or recovered payment of
+corresponding performance-based remuneration to
+employees who were subject to disciplinary action or
+other treatment due to violation of regulations and
+disciplines or abnormal exposure of risk losses within
+their duties.
++ The Bank adopted a remuneration policy that is in
+line with corporate governance requirements, in
+combination with high-quality development targets,
+in adaptation to the risk management system and
+talent development strategy, and well-matched with
+employees' value contribution, so as to advance
+the sound operation and high-quality development
+of the whole bank. The Bank's remuneration
+management policy was formulated and adjusted
+in strict accordance with applicable national
+regulations, regulatory requirements and corporate
+governance procedures. The Bank continuously
+optimized the remuneration resource allocation
+mechanism with value creation as the core,
+resolutely maintained a fair allocation concept of
+incentives commensurate with restraints, transmitted
+the Group's strategic objectives for business
+management, and allocated more remuneration
+resources to the grassroots employees, for the
+purpose of mobilizing and inspiring the business
+vitality of institutions at all tiers.
+Remuneration Policy
+Discussion and Analysis
+51
+Annual Report 2023
+"Iron triangle" refers to corporate customer managers of sub-branches, outlet heads and account managers of outlets.
+1
+"1
+Focusing on building a learning organization and a
+learning bank, ICBC strove to implement a number
+of high-quality training programs, to effectively
+facilitate training at all levels and continuously
+enhance the comprehensive quality and performance
+capability of cadres and employees. For management
+personnel, the Bank implemented training programs
+such as "ICBC Leadership" training for heads
+of domestic institutions, training for heads of
+overseas institutions, capability improving program
+for heads in charge of credit division, capabilities
+improving program for newly appointed heads in
+charge of personal financial services, and operating
+capabilities improving program for heads of tier-
+two branches, to strengthen their strategic thinking
+and management competence. For professionals,
+the Bank implemented programs such as ICBC
+Modern Finance Lecture, "D-ICBC" training, "Sword
+Sharpening Program" for discipline inspection line,
+and training for organization heads from institutions
+directly managed by the Head Office, to improve
+their professional and business capabilities. For front-
+line employees, the Bank implemented the rotating
+training program for outlet heads, "iron triangle"
+training for "GBC+" outlets to continuously
+improve the competence and services of outlet
+staff. Focusing on the growth of talents, the Bank
+implemented a series of programs including Training
+for Young and Middle-aged Cadres, Training for
+International Talents Training, Training for Expatriate
+and Reserve Talents, Training for New Employees
+and Management Trainees, and Training for
+New Employee Mentor, building a full-chain, and
+systematic training system.
+era, the Bank established probity culture research
+center, advanced the construction of education
+base for probity culture, and produced a series of
+warning and educational films to learn lessons from
+cases, and further deepen the comprehensive and
+strict governance of the Party. The Bank established
+the first innovative cultural education base in the
+financial industry, and developed it into an important
+platform for transmission of innovation culture, so
+as to stimulate innovation and creativity throughout
+the Bank. Its corporate culture cultivation was
+awarded "10-year Typical Experience of Corporate
+Culture in the New Era" by China Research Institute
+of Enterprise Culture, improving ICBC's cultural
+influence.
+The Bank carried forward the excellent traditional
+culture of China, adhered to honesty and
+trustworthiness, profit from righteousness, prudence,
+integrity and innovation, and compliance with
+laws, and continuously enriched and improved the
+corporate culture of ICBC in the new period. The
+Bank carried out rich and diverse cultural activities,
+and launched 80 cultural model units to promote
+exchange and mutual learning of corporate culture.
+To reinforce probity culture construction in the new
+With the focus on high-quality development of
+operations, centering on key areas of business
+development and competition, the Bank assigned
+more human resources to strategic areas and
+improved operating capability by enhancing the
+quality and efficiency of human resources. Focusing
+on key areas such as sci-tech innovation, green
+development, emerging business, inclusive finance,
+and digital transformation, the Bank continued to
+propel the building of marketing, credit, technology,
+and data teams, improved talent cultivation,
+introduction, motivation, and utilization, and strove
+to build a high-level financial team that meets the
+requirements of building a financial robust country.
+The Bank expedited the empowerment of sci-tech
+data, refined organizational functions, and improved
+the development mechanism for frontline employees
+to stimulate talent vitality.
++
+Human Resources Management
+The Bank took solid steps to provide sound financial
+services for the FISU World University Games and
+the Asian Games. As the exclusive official banking
+partner for the 31st Chengdu FISU World University
+Games and the 19th Asian Games Hangzhou, the
+Bank successfully completed the cash exchange,
+foreign bank card acceptance and e-CNY services
+during the two international events by launching
+universal outlets, mobile banking vehicles, new
+currency exchange machines, exclusive customer
+service hotlines, mobile banking column, exclusive
+APP financial service column, and other multi-level
+and three-dimensional online and offline service
+channels. There were no errors, complaints, or public
+opinions about the Bank during the events.
+As at the end of 2023, the Bank had a total of
+16,297 institutions, representing a decrease of
+159 as compared with the end of the previous
+year. Among them, there were 15,884 domestic
+institutions and 413 overseas ones. Domestic
+institutions included the Head Office, 36 tier-one
+(in USD millions)
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES AT THE END OF 2023
+3,573
+Investment in Standard Bank (1)
+416
+413
+3,538
+3,245
+444,177
+416,635
+Subtotal
+(50,786)
+(50,847)
+Eliminations
+1
+1
+African Representative Office
+3,722
+153
+454
+Total
+Asia-Pacific Region (except Hong Kong SAR and Macau SAR)
+Hong Kong SAR and Macau SAR
+Institutions (country/region)
+DISTRIBUTION OF OVERSEAS INSTITUTIONS
+Discussion and Analysis
+55
+Annual Report 2023
+As at the end of 2023, total assets of the Bank's overseas institutions (including overseas branches, overseas
+subsidiaries and investment in Standard Bank) were USD420,208 million, representing 6.7% of the Group's total
+assets. Specifically, total loans amounted to USD180,356 million, and due to customers was USD151,895 million.
+Profit before taxation during the period was USD3,699 million, accounting for 6.2% of the Group's profit before
+taxation.
++
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the
+Bank's gain on investment recognized by the Bank during the reporting period.
+416
+413
+3,935
+3,699
+447,899
+420,208
+397
+153
+328
+386
+95
+of 2022
+of 2023
+551
+213,726
+201,941
+2022
+2023
+of 2022
+of 2023
+Macau SAR
+Hong Kong SAR and
+Item
+At the end At the end
+Number of institutions
+97
+Asia-Pacific Region
+136,959
+135,854
+60,335
+41,367
+America
+74
+74
+871
+786
+Institutions (country/region)
+85,048
+Europe
+and Macau SAR)
+(except Hong Kong SAR
+91
+90
+1,289
+1,522
+87,215
+At the end At the end
+Hong Kong Branch (Hong Kong, China)
+ICBC (Asia) (Hong Kong, China)
+ICBC International (Hong Kong, China)
+Tokyo Branch (Japan)
+Annual Report 2023
+The aviation business segment achieved
+results in supporting the high-quality development
+of domestic air
+aircraft
+transportation and
+manufacturing industries through innovation and
+collaboration. ICBC Leasing continuously expanded
+cooperation with high-quality domestic airlines to
+cement the foundation of the civil aviation industry.
+It released the ARJ21 Aircraft Value White Paper
+in conjunction with COMAC and Civil Aviation
+University of China, to enhance the brand influence
+of "YES ICBC" through active marketing and
+promotion abroad. The Bank successfully launched
+the Airbus full lifecycle management project through
+innovation and collaboration across business
+segments. Positive results have been achieved in the
+innovation of the leasing business in the aviation
+industry chain and aircraft engines.
+new
+ICBC Leasing is mainly engaged in the financial leasing
+of large-scale equipment in key areas such as aviation,
+shipping, energy and power, rail transit, equipment
+manufacturing and areas requiring SRDI. It provides
+a range of financial and industrial services such as
+the transfer of leasing assets, asset trading and asset
+management.
+At the end of 2023, ICBC Credit Suisse Asset
+Management managed 247 mutual funds, and 590
+annuities, separately managed accounts and special
+portfolios, with assets totaling RMB1.72 trillion.
+ICBC Leasing
+In response to multiple challenges such as
+fluctuations in the capital market and the
+introduction of new regulations on fund fee
+reductions, ICBC Credit Suisse Asset Management
+strictly controlled various risks, enhanced investment
+and research professionalism, and strengthened
+intra-group collaboration, to maintain stable business
+development on the whole. ICBC Credit Suisse Asset
+Management accelerated the development of social
+security fund, annuities, personal pension and other
+pillar III pension investment management business,
+and constantly and steadily expanded its scale. ICBC
+Credit Suisse Asset Management improved customer
+service system and quality, and enhanced post-
+investment companionship. ICBC Credit Suisse Asset
+Management strengthened investor protection, and
+continuously promoted investor education, which
+was evaluated as excellent for five consecutive years
+in the assessment of the national securities and
+futures investor education base.
++
+occupational annuity, basic endowment insurance
+investment manager and mutual fund investment advisor,
+and was one of the "fully qualified" fund companies in
+the industry.
+ICBC Credit Suisse Asset Management is mainly engaged
+in fund raising, fund sales, asset management and other
+businesses approved by CSRC. It had many business
+qualifications such as mutual fund, QDII, enterprise
+annuity, specific asset management, domestic (foreign)
+investment manager of social security fund, RQFII,
+insurance fund management, special asset management,
+ICBC Credit Suisse Asset Management
+Based on the risk management route of "active prevention,
+smart control and comprehensive management", the
+Bank implemented requirements of the "Five-pronged
+Risk Management Approach" in depth, and refined the
+Group-wide risk management system that can cover the
+risk characteristics of integrated subsidiaries. The Bank
+intensified penetrating management and monitoring of
+subsidiaries and strengthened systematic, standardized and
+intelligent management of equity investment information.
+Meanwhile, the Bank stepped up efforts in the building
+of the three lines of defense of subsidiaries, improved risk
+prevention & control and internal control and compliance
+capabilities, and pursued high-quality development.
+The Bank continued to refine the Group's integrated
+governance system, strengthened the management
+mechanism featuring "leading coordination and focusing
+on lines", and consolidated and improved the Group
+headquarters' integrated governance capability. The
+Bank continuously optimized the integrated subsidiary
+governance model with Party building, corporate
+governance and equity management at its core, promoted
+synergy between the integration strategy and the
+internationalization strategy in a coordinated manner,
+and further refined the Group control and coordination
+mechanism. The Bank also optimized the subsidiary
+governance mechanism, strengthened the efficiency
+of the role of full-time and part-time directors, and
+promoted deep integration of Party building and corporate
+governance of domestic subsidiaries. Meanwhile, the
+Bank optimized the strategic evaluation mechanism and
+promoted deep and accurate transmission of the Group's
+strategy to subsidiaries. The Bank strengthened capital
+management, promoted IT building, data governance and
+digital transformation, and further improved the influence
+of subsidiaries in their industries as well as their core
+competitiveness and customer service capabilities.
+The Bank remained committed to serving national
+strategies and the real economy, focused on main
+business, refined specialized business, and formed a multi-
+field integrated development layout covering fund, leasing,
+insurance, debt-for-equity swap, wealth management,
+FinTech, overseas investment banking, etc. Total market
+financial service capability further improved.
+Comprehensive Operation and Subsidiary
+Management
+Discussion and Analysis
+57
+Investments in Standard Bank (South Africa)
+African Representative Office (South Africa)
+Discussion and Analysis
+In terms of maritime business, ICBC Leasing
+supported domestic shipping and shipbuilding
+industries in making new breakthroughs. ICBC
+Leasing supported the building of China's first
+modern transoceanic communication optical cable
+laying ship, and steadily promoted the reserve and
+implementation of innovative marine economic
+projects such as marine fisheries, cultural tourism, oil
+and gas, and green energy projects.
+branches and branches directly managed by the
+Head Office, 459 branches in capital cities and tier-
+two branches, 15,227 outlets, 27 institutions directly
+managed by the Head Office and their branches, and
+134 major subsidiaries and their branches.
+Annual Report 2023
+58
+International continued to refine the
+development layout of corporate financing,
+investment, sales and trading, asset management,
+and market research. Focusing on the financing
+needs of high-quality enterprises in key industries,
+ICBC International assisted customers in strategic
+emerging industries to go public in Hong Kong.
+The scale of green bond underwriting hit a new
+high, and the stock and bond underwriting business
+I was among the first echelon in the market. ICBC
+International steadily enhanced its planning
+capability for investment and financing in key
+areas such as rural revitalization, green and low-
+carbon development, healthcare and medicine,
+advanced manufacturing, and sci-tech innovation.
+ICBC International actively promoted innovation
+in product sales and trading as well as customer
+development, continuously refined and restructured
+asset management business, and strove to build
+an investment banking research brand with market
+influence.
+ICBC
+ICBC International is a wholly owned subsidiary of the
+Bank in Hong Kong SAR, China. It is mainly engaged in
+sponsorship and underwriting for listing, underwriting for
+bond issuance, financial consulting, direct investment, sales
+and trading, asset management, market research, etc. and
+provides all-round cross-border comprehensive financial
+services for corporate and personal customers.
+ICBC-AXA was awarded the "Ark Award for
+Insurance Services for Health and Elderly Care" by
+the Securities Times, the "Best Insurance Institution
+for the People" by the yicai.com and the "Golden
+Dragon Award
+Best Life Insurance Subsidiary of
+Banks of the Year" by the Financial News (China).
+ICBC International
+To improve customer experience, ICBC-AXA steadily
+expanded health and elderly care service and
+improved its efficiency. It innovated the coordinated
+mode of elderly care institutions, reserved high-
+quality elderly service resources, and collaborated
+with six institutions to complete institutional care
+services. ICBC-AXA continued to iterate and upgrade
+the value-added services of critical illness and medical
+insurance products, and expanded and reinforced
+the coverage of inclusive insurance, benefiting about
+400 thousand people, with a cumulative insurance
+amount of approximately RMB1.38 trillion.
+the construction of the "Insurance Code" platform
+of the Shanghai Insurance Exchange. It undertook
+the first inclusive accident insurance product co-
+insurance project of the "Insurance Code", and
+launched multiple exclusive products, such as
+accident insurance and medical insurance.
+It intensified the supply of diversified products in
+line with regulatory policies and market changes.
+Two personal pension insurance products have
+been put on the market in the first batch, which are
+available throughout all channels. ICBC-AXA also
+enriched the product content and open channels of
+auxiliary product lines such as accident insurance,
+medical insurance, and group insurance. ICBC-AXA
+actively participated in inclusive security, and joined
+ICBC-AXA persisted in leveraging the strengths
+of insurance to satisfy the needs of the people
+in light of the Group's strategy. It supported
+the construction of a multi-level security system,
+vigorously developed commercial health and pension
+insurance business, actively participated in the pillar
+III personal pension account business and inclusive
+medical projects, explored and enriched the security
+plans for special groups such as new citizens,
+and practiced the philosophy of insurance for the
+people. ICBC-AXA continued to promote digital
+transformation and improve customers' full-journey
+experience.
+4
+ICBC-AXA operates various insurance businesses such as
+life insurance, health insurance and accident insurance,
+as well as reinsurance of the aforesaid businesses,
+businesses permitted by national laws and regulations to
+use insurance funds and other businesses approved by
+regulatory authorities.
+ICBC-AXA
+Domestic comprehensive leasing business was carried
+out focusing on key areas of the real economy, such
+as manufacturing, strategic emerging industries,
+SRDI, green, private enterprises, inclusive, and
+agriculture. The first distributed photovoltaic project
+was launched to provide targeted support for small
+and medium-sized SRDI enterprises. ICBC Leasing
+actively explored a host of high-quality leading
+potential customers in professional machinery and
+equipment industries, such as engineering machinery
+and agricultural machinery. ICBC Leasing supported
+rural public infrastructure construction through the
+Qingdao fishery and photovoltaic complementary
+project, making helpful explorations in supporting
+rural revitalization with financial leasing.
++
+Annual Report 2023
+56
+Institutions (country/region)
+Paris Branch (France)
+Frankfurt Branch (Germany)
+Luxembourg Branch (Luxembourg)
+ICBC (Europe) (Luxembourg)
+Institutions (country/region)
+Europe
+ICBC (New Zealand) (New Zealand)
+Auckland Branch (New Zealand)
+Riyadh Branch (Saudi Arabia)
+Kuwait Branch (Kuwait)
+Sydney Branch (Australia)
+Yangon Branch (Myanmar)
+ICBC (Almaty) (Kazakhstan)
+Karachi Branch (Pakistan)
+Mumbai Branch (India)
+Dubai (DIFC) Branch (UAE)
+Abu Dhabi Branch (UAE)
+Doha Branch (Qatar)
+Phnom Penh Branch (Cambodia)
+Vientiane Branch (Lao PDR)
+Office (Vietnam)
+Ho Chi Minh City Representative
+Hanoi Branch (Vietnam)
+ICBC (Thai) (Thailand)
+Singapore Branch (Singapore)
+ICBC (Indonesia) (Indonesia)
+ICBC (Malaysia) (Malaysia)
+Manila Branch (Philippines)
+Seoul Branch (South Korea)
+Busan Branch (South Korea)
+Mongolia Representative Office
+(Mongolia)
+Amsterdam Branch (the Netherlands)
+Brussels Branch (Belgium)
+Milan Branch (Italy)
+Madrid Branch (Spain)
+Warsaw Branch (Poland)
+Africa
+Inversora Diagonal (Argentina)
+Panama Branch (Panama)
+ICBC (Argentina) (Argentina)
+ICBC Investments Argentina
+(Argentina)
+ICBC (Canada) (Canada)
+ICBC (Mexico) (Mexico)
+ICBC (Brasil) (Brazil)
+ICBC (USA) (USA)
+ICBCFS (USA)
+ICBC (Peru) (Peru)
+New York Branch (USA)
+ICBC (Macau) (Macau, China)
+Macau Branch (Macau, China)
+Institutions (country/region)
+ICBC (Austria) (Austria)
+Prague Branch (Czech Republic)
+Zurich Branch (Switzerland)
+Bank ICBC (JSC) (Russia)
+ICBC Turkey (Turkey)
+ICBC Standard Bank (UK)
+ICBC (London) (UK)
+London Branch (UK)
+10
+Greece Representative Office (Greece)
+America
+Profit before taxation
+1,050
+3.3
+12.1
+47,503
+(in USD millions)
+Discussion and Analysis
+Assets
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+Annual Report 2023
+54
+Stable yet improving performance by overseas
+institutions amidst a complicated international
+environment. The Bank continuously enhanced
+global financial servicing capabilities in corporate
+& investment banking, global cash management,
+retail banking, internet finance, project financing,
+financial markets, asset management, and asset
+custody among others. The Bank established a global
+financial service system for personal customers
+to improve cross-border servicing capacity, which
+supports business scenarios in "ICBC Global Pay"
+and brazes the "YES ICBC" service brand.
+Global network was further optimized. The Jeddah
+Branch officially started business operations in Saudi
+Arabia. As at the end of 2023, the Bank had been
+operating 413 overseas institutions in 49 countries
+and regions, coupled with indirect coverage of 20
+African countries as a shareholder of the Standard
+Bank Group. In total, it had 259 institutions in 30
+countries that have participated in the Belt and
+Road initiative. The Bank also entered into business
+relationships with 1,445 foreign banks in 143
+countries and regions. Its service network has full
+coverage of six continents and key international
+financial centers around the world.
+International cooperation was enhanced
+continuously. As the chair of the BRICS Business
+Council Chinese Chapter, the Bank lived up to its
+responsibilities and effectively served the multilateral
+cooperation among BRICS countries. The Bank has
+been facilitating the upgrading of China-Europe
+economic and trade relations relying on China-
+Europe Business Council ("CEBC"). The Bank
+strengthened the Belt and Road Bankers Roundtable
+("BRBR") mechanism to promote high-quality
+development of the Belt and Road. A number of
+achievements have been included in the official
+achievement list of the third "Belt and Road"
+Forum for International Cooperation. The Bank
+actively served international exhibitions, including
+China International Import Expo, China Import and
+Export Fair and China International Fair for Trade in
+Services, to facilitate high-standard opening up.
++
++
+RMB internationalization was promoted in a steady
+and prudent way. The Bank deeply carried out
+"Chunxu Action" to provide pro-active solutions for
+global market players in cross-border RMB businesses
+such as cross-border settlement, investment and
+financing as well as risk management. With the
+designation as the official RMB clearing bank in
+Brazil, the Bank has been authorized as the official
+RMB clearer in 11 countries. The Bank pushed
+forward the account system building supporting
+separate accounting units in Free Trade Zones,
+established China-Indonesia Cross-border RMB
+Service Center" in Fujian, and actively supported
+the innovative development of cross-border
+RMB business in Shanghai Lingang Special Area,
+Guangdong-Hong Kong-Macao Greater Bay Area
+and Hainan Free Trade Port. The Bank facilitated
+the execution of the country's first-ever LNG import
+transaction settled in cross-border RMB. It provided
+innovative services for multinational companies
+in trade settlement and treasury management,
+facilitating FDI investment and utilization. Cross-
+border RMB business application scenarios were
+built to support the development of micro, small
+and medium-sized enterprises. In 2023, cross-border
+RMB business reached RMB9.24 trillion.
+The strategy of becoming the "Preferred Bank for
+Foreign Exchange Business" was implemented in
+depth. The Bank deeply served the construction
+of a strong trading power, continuously stepped
+up with the "Chunrong Action" to strengthen
+support to key export companies and foreign-
+funded enterprises, and continuously upgraded its
+financial services in international settlement and
+trade finance via the "single window" platform.
+It continuously solidified the foundation for high-
+quality development of foreign exchange business,
+promoted the construction of grassroots flagship
+institutions for foreign exchange business, enhanced
+flexible support for grassroots foreign exchange
+business, and comprehensively improved compliance
+management of foreign exchange risk control.
++
+Taking the "international vision for global operation"
+principle, the Bank has made constant efforts to improve
+its operation system both in and outside China, integrating
+local and international currencies. Leveraging on its global
+operation edge, the Bank has been constantly sharpening
+cross-border financial services, with a view to supporting
+high-quality implementation of the Belt and Road and
+China's high-level opening-up.
+International Operation
+Discussion and Analysis
+1,966
+15.6
+6,993,931
+Pearl River Delta
+millions)
+% of total
+assets
+Number of
+institutions
+% of total
+institutions
+Number of
+employees
+% of total
+employees
+Head Office
+8,502,997
+19.0
+53
+28
+21,294
+5.1
+Yangtze River Delta
+10,215,437
+22.9
+2,513
+15.4
+60,802
+14.5
+0.2
+Item
+Annual Report 2023
+100.0
+20.2
+84,745
+22.0
+3,586
+12.8
+5,743,425
+Western China
+18.6
+78,004
+20.9
+3,402
+11.1
+4,946,259
+Central China
+15.6
+65,433
+16.3
+2,655
+14.9
+Northeastern China
+1,597,213
+3.6
+1,600
+419,252
+100.0
+16,297
+100.0
+44,697,079
+Total
+unallocated assets
+(9.4)
+(4,238,888)
+Note: Overseas and other assets include investments in associates and joint ventures.
+Eliminated and
+22,977
+11.3
+547
+9.5
+4,255,879
+Overseas and other
+9.2
+38,494
+9.8
+5.5
+6,680,826
+Bohai Rim
+Assets
+(in RMB
+Amount Percentage (%)
+5.8
+724,802
+5.37
+40,957
+5.1
+762,226
+Real estate
+heating, gas and water
+0.69
+8,406
+9.6
+1,211,580
+0.79
+12,537
+44,531
+10.7
+6.14
+679,049
+64
+Annual Report 2023
+Discussion and Analysis
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Item
+Pass
+Special mention
+NPLs
+Substandard
+Doubtful
+Loss
+Total
+At 31 December 2023
+Amount Percentage (%)
+25,250,275
+Wholesale and retail
+1,594,025
+Production and supply of electricity,
+management
+58,944
+15.5
+1,949,461
+2.35
+55,359
+15.8
+2,351,044
+Manufacturing
+services
+0.61
+19,324
+25.1
+3,149,183
+0.49
+17,530
+3.02
+At the end of 2023, the Bank's maximum exposure to
+credit risk, without taking into account any collateral
+and other credit enhancements, was RMB46,604,256
+million, representing an increase of RMB5, 139,499 million
+compared with the end of the previous year. Please
+refer to "Note 50.(a)(i) to the Consolidated Financial
+Statements: Maximum Exposure to Credit Risk Without
+Taking Into Account of Any Collateral and Other Credit
+Enhancements". For mitigated risk exposures of credit
+risk asset portfolio of the Bank, please refer to the section
+headed "Credit Risk" of the 2023 Capital Adequacy
+Ratio Report of Industrial and Commercial Bank of China.
+Limited.
+Leasing and commercial services
+15.5
+1.58
+23,864
+12.0
+1,511,785
+1.19
+20,493
+11.6
+1,722,981
+Water, environment and public utility
+2.02
+38,188
+15.1
+1,892,850
+1.91
+43,958
+2,295,720
+Credit Risk Analysis
+The Bank fully promoted the digitalization of credit risk
+management, explored the multi-scenario application
+of big data, Al and other advanced technologies, and
+promoted the construction of a multi-dimensional and
+visual risk monitoring and early warning system. The
+Bank launched a number of digital projects, including an
+investment and financing operation management platform
+and an intelligent risk control platform for retail credits, to
+enhance the intelligent assistance capability of systems in
+management and decision-making.
+The Bank earnestly implemented macro-control policies
+such as "16-point set of financial measures for the
+real estate", and maintained reasonable and moderate
+real estate financing, giving an impetus to the positive
+circulation of finance and real estate. The Bank struck
+a sound balance between new supply of financing and
+the prevention and resolution of existing risks, actively
+responded to changes in the real estate market, and
+effectively managed risks in the real estate sector. The
+Bank continuously ameliorated the direction of new
+financing, and promoted the high-quality and stable
+development of real estate investment and financing.
+The Bank strictly implemented various national laws,
+regulations and policies on the management of local debts,
+and strictly secured the bottom line of legality, compliance
+and no regional systemic risk. For small and medium-sized
+financial institutions, the Bank, based on the impacts of
+the measures for the risk classification of financial assets
+and the New Capital Regulation, stepped up routine
+monitoring capability to strictly prevent risk spillovers.
+Credit risk
+Liquidity risk, interest rate risk
+in the banking book
+Operational risk, compliance risk,
+money laundering risk
+Reputational risk
+Strategic risk
+IT and cyber security risk
+-Enterprise risk, market risk, country risk
+Legal risk
+Production safety management
+Risk Management
+Department
+Credit and Investment
+Management Department
+Asset & Liability
+Management Department
+Internal Control &
+Compliance Department
+Executive Office
+Operational risk
+the Board of Directors
+of the Board of Directors
+US Risk Committee
+Senior Executive
+Senior Executive Vice President
+Vice Presidents
+(Chief Risk Officer)
+Business departments
+Personal Banking
+Department
+Institutional Banking
+Bank Card
+Department
+Global Market
+Business departments of
+branches and subsidiaries
+First line of defense
+Department
+Board of Supervisors
+Risk Management Committee
+Audit Committee of
+Office of Steering Group
+for Deepening Reform
+Financial Technology Department
+Internal Control & Compliance Department
+Legal Affairs
+Department
+Credit Risk
+Credit Risk Management
+Credit risk is the risk where loss is caused to the banking
+business when the borrower or counterparty fails to
+meet its contractual obligations. The Bank's credit risks
+mainly originate from loans, treasury operations (including
+deposits with banks and other financial institutions,
+placements with banks and other financial institutions,
+reverse repurchase agreements, corporate bonds and
+financial bonds investment), receivables and off-balance
+sheet credit business (including guarantees, commitments
+and financial derivatives trading).
+The Bank strictly adheres to regulatory requirements
+regarding credit risk management, diligently fulfills
+established strategies and objectives under the leadership
+of the Board of Directors and the Senior Management,
+and implements an independent, centralized and vertical
+credit risk management mode. The Board of Directors
+assumes the ultimate responsibility for the effectiveness
+of credit risk management. The Senior Management is
+responsible for executing the strategies, overall policy
+and system regarding credit risk management approved
+by the Board of Directors. The Credit Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of credit
+risk management, is responsible for reviewing material and
+important affairs of credit risk management, and performs
+its duty in accordance with the Charters of the Credit
+Risk Management Committee. The credit and investment
+management departments at different levels undertake
+the responsibility of coordinating credit risk management
+at respective levels, and the business departments
+implement credit risk management policies and standards
+for their respective business areas in accordance with their
+functions.
+Annual Report 2023
+63
+At the be
+At the level of Head Office
+At the level of the Board of Directors
+Discussion and Analysis
+According to the regulatory requirement on loan risk
+classification, the Bank implemented five-category
+classification management in relation to loan quality
+and classified loans into five categories: pass, special
+mention, substandard, doubtful and loss, based on the
+possibility of collecting the principal and interest of loans.
+In order to implement sophisticated management of credit
+asset quality and improve risk management, the Bank
+implemented the twelve-category internal classification
+system for corporate loans. The Bank applied five-category
+classification management to personal credit assets and
+ascertained the category of the loans based on the number
+of months in default, expected loss ratio, credit rating,
+collateral and other quantitative and qualitative factors.
+The Bank continued to ameliorate investment and
+financing operation mechanisms. At the entrance end,
+the Bank improved customer access management.
+At the threshold end, the Bank restructured duration
+management system from perspectives of portfolio and
+concentration. At the exit end, the Bank highlighted the
+governance of compliance risks in the disposal of non-
+performing assets. It comprehensively empowered the
+construction of the intelligent credit risk control system
+"Three Gates, Seven-color Pools". The Bank deepened
+the management of basic rules on credit risk, refined
+the management framework of financial asset risk
+classification, continuously advanced the building of the
+unified investment and financing risk limit management
+system for integrated subsidiaries, and specified the risk
+management requirements for off-balance sheet business.
+The Bank continued to deepen the special governance of
+integrity risks arising from credit areas, and adhered to
+the comprehensive and integrated remediation of credits,
+covering various investment and financing business.
+The Bank accurately grasped the layout and direction of
+investment and financing business and strengthened credit
+risk management. In terms of corporate credit business,
+the Bank continued to give more support for such areas as
+strategic emerging industries, sci-tech innovation, digital
+economy and intelligent manufacturing; the Bank actively
+bolstered major projects under construction and projects
+making up for deficiencies in the "14th Five-Year Plan";
+the Bank actively supported the urban-rural collaborative
+development, focusing on areas such as urban-rural
+integration, key county-level infrastructure, agriculture-
+related industry chains, and agricultural modernization;
+the Bank deeply explored and cultivated green credit
+market, and boosted the development of various green
+investment and financing business such as green loans,
+green bonds, green wealth management and green leasing
+in an all-round way; it also kept improving differentiated
+region credit policies with the focus on the coordinated
+development strategies for the regions, including Beijing-
+Tianjin-Hebei, Greater Bay Area, Yangtze River Delta
+and Chengdu-Chongqing Economic Circle. In terms of
+personal credit business, the Bank strictly controlled the
+"entrance end" of loans and standardized personal loan
+business requirements based on product characteristics;
+the Bank strengthened the risk prevention and control of
+residential mortgages, and strictly implemented the key
+links of substantial risk prevention and control such as
+authentic "customers, transactions, mortgages, housing
+prices, and down payments"; the Bank enhanced the
+management of personal loan collateral and promoted the
+application of "online evaluation" of collateral; the Bank
+continuously refined post-lending management, focusing
+on key tasks such as monitoring, collection, and disposal.
+It also continued to iterate and upgrade the monitoring
+model strategy, and pushed forward the digitalization and
+upgrade of post-lending management.
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+24.1
+Third line of defense _
+Internal Audit Bureau
+Operation Management
+Department
+Security Department
+Board of directors of subsidiaries
+Management of Branches
+Senior management of subsidiaries
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Second line of defense
+Primary reporting line
+Secondary reporting line
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Credit Risk
+Management Committee
+Market Risk
+Management Committee
+Operational Risk
+Management Committee
+Internal Audit Sub-bureau
+3,583,967
+Transportation, storage and postal
+(%)
+14.1
+3,681,064
+Short-term corporate loans
+1.96
+271,615
+59.6
+13,826,966
+1.81
+292,745
+61.9
+16,145,204
+Corporate loans
+(%)
+NPLs
+(%)
+91,426
+Loan
+2.48
+13.6
+1,148,785
+4.9
+1,287,657
+Discounted bills
+1.62
+172,549
+46.0
+10,676,449
+1.62
+201,319
+47.8
+12,464,140
+Medium to long-term corporate loans
+3.14
+99,066
+3,150,517
+4.9
+(%)
+(%)
+116,527
+0.68
+158,372
+0.38
+98,527
+1.38
+321,170
+1.36
+353,502
+1.95
+451,628
+1.85
+96.67
+22,437,578
+96.79
+0.45
+NPLs
+118,574
+138,448
+26,086,482
+Loan
+Item
+NPL ratio
+Percentage
+NPL ratio
+At 31 December 2023
+Percentage
+In RMB millions, except for percentages
+At 31 December 2022
+DISTRIBUTION OF LOANS AND NPLS
+According to the five-category classification, pass loans amounted to RMB25,250,275 million at the end of 2023,
+representing an increase of RMB2,812,697 million when compared with the end of the previous year and accounting for
+96.79% of total loans. Special mention loans stood at RMB482,705 million, representing an increase of RMB31,077 million,
+and accounting for 1.85% of the total, with a drop of 0.10 percentage points. NPLs amounted to RMB353,502 million,
+showing an increase of RMB32,332 million, and NPL ratio was 1.36%, with a decrease of 0.02 percentage points.
+100.00
+23,210,376
+100.00
+0.19
+44,224
+0.53
+0.51
+In RMB millions, except for percentages
+At 31 December 2022
+Personal loans
+33.2
+65
+Annual Report 2023
+At the end of 2023, corporate NPLs were RMB292,745 million, showing an increase of RMB21,130 million when compared
+with the end of the previous year, and representing a NPL ratio of 1.81%, with a decrease of 0.15 percentage points.
+Personal NPLs amounted to RMB60,757 million, showing an increase of RMB11,202 million, and represented a NPL ratio of
+0.70%, with an increase of 0.10 percentage points.
+1.38
+321,170
+100.0
+23,210,376
+1.36
+353,502
+100.0
+1.83
+11,722
+2.8
+640,152
+2.45
+66
+16,901
+99
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY OF LOAN CUSTOMERS
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Loan
+Item
+NPL ratio
+Percentage
+NPL ratio
+Percentage
+At 31 December 2022
+At 31 December 2023
+In RMB millions, except for percentages
+Discussion and Analysis
+8,653,621
+2.6
+Total
+0.39
+25,394
+27.7
+6,431,991
+0.44
+27,827
+24.1
+6,288,468
+Residential mortgages
+0.60
+49,555
+35.5
+8,234,625
+0.70
+60,757
+Personal consumption loans
+689,731
+26,086,482
+328,286
+4,390
+Credit card overdrafts
+0.91
+8,454
+4.0
+930,040
+0.86
+11,639
+482,705
+1,347,136
+Personal business loans
+1.71
+3,985
+1.0
+232,442
+1.34
+1.3
+5.2
+At 31 December 2022
+Note: Calculated according to the Circular on Amending the Definitions and Calculation Formula of Basic Indicators for Off-site
+Supervision of the Banking Sector issued by the former CBIRC in 2022, and measured at the Group's level.
+278,715
+Balance at 1 January 2023
+Stage 2
+Total
+Stage 3
+Stage 2
+Stage 1
+141,586
+Item
+In RMB millions
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+1.38
+321,170
+100.0
+23,210,376
+1.36
+Movements of allowance for impairment losses on loans
+and advances to customers measured at amortised cost
+251,923
+672,224
+Movements of allowance for impairment losses on loans
+and advances to customers measured at FVTOCI
+Stage 1
+510
+47,526
+(44,930)
+(2,596)
+to stage 3
+(5,158)
+12,411
+(7,253)
+to stage 2
+(4,564)
+(42,004)
+46,568
+to stage 1
+Transfer:
+538
+28
+Total
+Stage 3
+353,502
+100.0
+26,086,482
+Total
+4,225,369
+1.43
+68,298
+18.3
+4,766,575
+Western China
+1.15
+40,888
+15.3
+3,561,290
+1.06
+43,192
+15.6
+4,064,415
+Central China
+1.83
+69,989
+18.2
+(46)
+71,038
+Northeastern China
+0.78
+11,371
+6.3
+1,461,063
+2.14
+31,284
+5.6
+1,460,720
+Overseas and other
+2.99
+29,203
+4.2
+978,246
+2.06
+22,301
+4.2
+1,082,666
+1.68
+16.5
+46
+27,041
+2,715,345
+Guaranteed loans
+10.6
+2,467,572
+11.4
+2,979,342
+Pledged loans
+10.4
+43.0
+40.1
+10,444,304
+Loans secured by mortgages
+(%)
+Amount
+(%)
+Amount
+9,977,153
+2,544,651
+11.0
+Unsecured loans
+In RMB millions, except for percentages
+At 31 December 2023
+Total
+Over 3 years
+1 to 3 years
+3 months to 1 year
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+100.0
+23,210,376
+100.0
+35.4
+8,221,000
+38.1
+9,947,491
+26,086,482
+Total
+Item
+Percentage
+Percentage
+At 31 December 2022
+Balance at 31 December 2023
+Other movements
+previously written off
+14,915
+14,915
+Recoveries of loans and advances
+(270)
+(270)
+(72,721)
+(72,721)
+Write-offs and transfer out
+116
+224
+(108)
+143,306
+26,736
+89,529
+255
+342,730
+Charge/(reverse)
+(352)
+(1,723)
+At 31 December 2023
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS BY COLLATERAL
+Discussion and Analysis
+67
+Annual Report 2023
+As at the end of 2023, the allowance for impairment losses on loans stood at RMB756,391 million, of which RMB756,001
+million at amortised cost, and RMB390 million at fair value through other comprehensive income. Allowance to NPLs was
+213.97%, showing an increase of 4.50 percentage points over the end of last year; allowance to total loans ratio was
+2.90%, keeping flat with the end of the previous year.
+Note: Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers" for details.
+390
+29
+6
+1
+361
+756,001
+257,031
+156,240
+5
+(1,626)
+% of total
+3,816,621
+63,835
+% of total
+4.6
+Amount
+loans
+Amount
+loans
+107,236
+29,886
+0.42
+0.40
+101,889
+0.39
+79,509
+0.34
+87,118
+President
+93,802
+4.40
+531,845
+4.2
+340,146
+2.31
+8,882
+2.6
+383,799
+Science, education, culture and
+2.09
+7,513
+2.9
+359,345
+3.25
+14,078
+2.9
+432,570
+Construction
+5.96
+31,696
+0.33
+91,177
+0.40
+34,181
+31 December
+31 December
+2023
+2022
+2021
+1.05
+1.12
+1.09
+18.61
+21.03
+17.31
+61.74
+36.62
+46.39
+77.49
+42.55
+47.63
+31 December
+2.7
+In percentages
+At
+At
+0.13
+19,543
+0.08
+330,424
+1.27
+284,031
+1.22
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Overdue loans stood at RMB330,424 million, representing an increase of RMB46,393 million from the end of the previous
+year, among which, loans overdue for over 3 months amounted to RMB223,188 million, representing an increase of
+RMB32,959 million.
+RESCHEDULED LOANS
+Rescheduled loans and advances measured in accordance with the Measures for Risk Classification of Financial Assets
+of Commercial Banks amounted to RMB82,723 million. Specifically, rescheduled loans and advances overdue for over 3
+months amounted to RMB8,575 million.
+LOAN MIGRATION RATIO
+Item
+Pass
+Special mention
+Substandard
+Doubtful
+At
+1.49
+8,337
+sanitation
+2.47
+18,443
+3.2
+747,980
+3.95
+29,793
+2.9
+Yangtze River Delta
+754,746
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Head Office
+5,616,187
+21.5
+36,930
+16.4
+4,285,481
+Bohai Rim
+1.31
+47,328
+15.6
+3,621,603
+1.43
+57,869
+15.5
+4,055,692
+Pearl River Delta
+0.69
+32,910
+20.7
+4,798,204
+0.66
+Loan
+Item
+NPL ratio
+Percentage
+17,422
+5.3
+657,994
+2.16
+16,474
+5.1
+761,866
+Other
+1.19
+2,706
+1.8
+226,500
+0.89
+2,619
+2.0
+295,219
+Mining
+2.65
+2.45
+Total
+100.0
+NPL ratio
+Percentage
+At 31 December 2023
+At 31 December 2022
+In RMB millions, except for percentages
+Discussion and Analysis
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+Annual Report 2023
+The Bank continued to strengthen risk management of
+financing in various industries, improved the quality and
+efficiency in the disposal of non-performing assets, and
+properly carried out risk prevention and mitigation in key
+areas. With these efforts, the loan quality was generally
+stable.
+increased by RMB382,445 million, representing a growth
+rate of 31.6%, mainly to enhance the adaptability with the
+national industrial structure adjustment, increase financing
+support for clean energy transformation, and achieve
+balanced growth in the coal power supply guarantee and
+clean energy fields. Loans to water, environment and
+public utility management grew by RMB211,196 million
+or 14.0%, mainly for major projects in the areas of new
+urbanization and water conservancy facilities as well as the
+areas of people's livelihood such as urban public utilities
+and environmental remediation.
+The Bank continued to propel the optimization and
+adjustment of the credit industry structure and stepped
+up efforts to shore up the development of the real
+economy. Loans to transportation, storage and postal
+services increased by RMB434,784 million or 13.8% over
+the end of the previous year, which were mainly used to
+strongly support key transportation projects in the Yangtze
+River Delta, Guangdong-Hong Kong-Macao Greater Bay
+Area and other regions, and transportation construction
+projects making up for deficiencies in the western regions.
+Loans to leasing and commercial services increased by
+RMB402,870 million, up 21.3%, which were mainly used
+to meet the increased financing needs of customers in
+areas such as investment and asset management, and
+enterprise headquarters, park and commercial complex
+management services. Loans to manufacturing increased
+by RMB401,583 million, up 20.6%, mainly granted to
+leading backbone enterprises and key projects in high-
+end manufacturing such as new-generation information
+technology, integrated circuits, new energy vehicles,
+and large-scale refining and chemical projects. Loans to
+production and supply of electricity, heating, gas and water
+2.08
+260,931
+100.0
+12,555,491
+1.77
+262,773
+14,862,466
+Board of Directors
+68
+Discussion and Analysis
+RUB10,810 million
+4,238.62
+526.36
+237.14
+Commercial banking
+TRY8,845 million
+3,411.74
+172.67
+(17.95)
+Commercial banking
+EUR200 million
+1,435.51
+219.27
+4.94
+Industrial and Commercial Bank of
+China (USA) NA
+Industrial and Commercial Bank of
+China Financial Services LLC
+Commercial banking
+USD369 million
+Commercial banking
+33.56
+336.77
+2,327.21
+CAD208 million
+(51.04)
+Commercial banking
+22.92
+USD50 million
+Securities clearing,
+securities margin
+trading
+Commercial banking
+Industrial and Commercial Bank of
+China (Canada)
+Industrial and Commercial Bank of
+China Mexico S.A.
+23.24
+446.71
+2,956.72
+4,629.73
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure of the Bank is illustrated below:
+1,869.45
+23,187.95
+Commercial banking
+China (Almaty) Joint Stock Company
+Industrial and Commercial Bank of
+China (New Zealand) Limited
+Industrial and Commercial Bank of
+China (Europe) S.A.
+36.60
+144.50
+767.03
+KZT8,933 million
+NZD234 million
+Commercial banking
+of China (Thai) Public Company Limited
+90.52
+1,255.53
+7,956.60
+THB20,107 million
+Commercial banking
+Industrial and Commercial Bank of
+MXN1,597 million
+1,496.98
+11.93
+USD1,083 million
+26.24
+501.62
+1,514.15
+USD200 million
+Commercial banking
+Banking
+200.83
+Bank ICBC (joint stock company)
+ICBC Turkey Bank Anonim Şirketi
+ICBC Austria Bank GmbH
+ICBC (London) PLC
+(54.87)
+540.70
+5,693.51
+EUR437 million
+Commercial banking
+ICBC Standard Bank PLC
+Industrial and Commercial Bank
+486.08
+1.73
+2
+228.06
+187.32
+19.42
+ICBC Financial Leasing Co., Ltd.
+Leasing
+180
+2,783.81
+429.40
+7.59
+ICBC-AXA Assurance Co., Ltd.
+Insurance
+125.05
+3,179.89
+162.62
+7.03
+ICBC Financial Asset Investment Co., Ltd.
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank continued to hold 324,963,464 shares or 19.39% of Standard
+Bank and to be its single largest shareholder. Based on mutual benefit and win-win cooperation, the two sides furthered
+their cooperation in equity cooperation, customer expansion, project financing, product innovation, risk management,
+FinTech and staff exchange, etc. As at the end of 2023, Standard Bank recorded total assets of ZAR3,065,745 million and
+net assets of ZAR276,920 million. It generated a net profit of ZAR50,303 million in the year.
+Standard Bank Group Limited
+Major Equity Participating Company
+13.25
+202.57
+205.14
+Fund management
+160
+ICBC Wealth Management Co., Ltd.
+44.73
+475.22
+1,786.25
+270
+Financial asset
+investment
+Wealth management
+ICBC Credit Suisse Asset Management Co., Ltd.
+Net profit
+Net assets
+134.90
+628.44
+USD120 million
+ARS171,933 million
+Commercial banking
+Industrial and Commercial Bank of
+Commercial banking
+13.81
+ICBC PERU BANK
+2.11
+40.35
+389.57
+BRL202 million
+Commercial banking
+Industrial and Commercial Bank of
+China (Brasil) S.A.
+50.83
+4,809.13
+126.59
+Total assets
+paid-in capital
+Principal business
+Institution
+2023
+In RMB100 millions
+880.89
+capital/
+At 31 December 2023
+Discussion and Analysis
+Major Domestic Subsidiaries
+Annual Report 2023
+60
+China (Argentina) S.A.
+Issued share
+Annual Report 2023
+of China (Malaysia) Berhad
+300.14
+54,880
+3.4
+method
+offered
+Fixed-
+927 1,630,751
+537
+300,016
+558
+321,334
+906
+1,552,905
+96.6
+Classified by
+income
+investment
+Equity
+300,016
+537
+1,762,288
+1,363
+Total
+137
+190
+0.3
+53
+509
+4
+57
+6,237
+379 125,300
+Hybrid
+type
+5,578
+39,618
+90
+38,036
+In RMB millions, except for tranches and percentages
+WEALTH MANAGEMENT PRODUCTS OF ICBC WEALTH MANAGEMENT THAT WERE ISSUED, MATURED, AND EXISTED
+DURING THE REPORTING PERIOD
+At the end of 2023, the balance of ICBC Wealth
+Management products reached RMB1,607,477
+million, all of which were net-worth products.
+Enriching wealth management product shelves
+to provide diversified investment options. Deeply
+grasping the wealth preservation and appreciation
+needs of residents, ICBC Wealth Management
+released a new product system of "Wen Xin Zhi
+Yuan", increasing the proportion of low-risk
+products with stable performance, small draw-
+down and good experience. It launched innovative
+products with the themes of the Belt and Road,
+rural revitalization, and the Great Bay Area, and
+took the lead in the industry to roll out the first
+batch of personal pension products. It won the
+"People's Craftsmanship Brand Award" conferred
+by people.cn, and the "Golden Bull Award - Wealth
+Management Subsidiary of Banks" conferred by
+China Securities Journal.
+tech innovation, advanced manufacturing, green
+and low-carbon development as well as key regions,
+and kept raising the funding for modern industry
+system and its proportion. It was awarded "Best
+Asset Management Organization for Responsible
+Investment" by finance.sina.com and the "Top 50
+ESG Practices Responsible Wealth Management
+Subsidiary" by The Economic Observer.
+Integrating into the overall wealth management
+landscape and enhancing customer service
+capabilities. ICBC Wealth Management developed
+the customer service system of "comprehensive
+response through one-point access" and the "Cai
+Ming Bai" customer companionship brand, launched
+online columns such as "product translator",
+"concept research society" and "market express",
+and conducted offline activities like "walking tens of
+thousands of miles to hold one thousand activities in
+100 cities" and other series of activities. By visiting
+rural areas, universities and communities, it delivered
+financial knowledge to customers, and saw a rapid
+growth in the number of key inclusive customers,
+including new citizens, customers in rural areas
+and self-employed businesses. It was awarded the
+"Best Wealth Management Subsidiary of Banks for
+Investment Education Brand of the Year" by the
+Financial News (China) and the "Excellent Investment
+Education Companionship Case" by JRJ.com.
+-
+Item
+Leveraging professional investment advantages
+to improve the quality and efficiency of the real
+economy. ICBC Wealth Management continuously
+strengthened the capabilities of major assets
+allocation and diversified strategic investment,
+deepened investment-research linkage, and explored
+high-quality assets. It increased investment in sci-
+ICBC Wealth Management
++ By giving full play to its debt-for-equity swap
+license and professional advantage in this field
+and focusing on serving the real economy and
+preventing and defusing financial risks, ICBC
+Investment strengthened the bank-corporate
+cooperation and the investment-loan coordination,
+improved integrated financial services that combine
+equity and debt, enriched the varieties of debt-
+for-equity investment plans and private equity
+fund products, and made steady progress in the
+quality development of market-based debt-for-
+equity swap projects. Meanwhile, ICBC Investment
+greatly supported enterprises in their de-leveraging,
+leverage stabilizing, strength gaining, and reform
+promoting. It continuously enhanced the ability
+and effectiveness of risky asset disposal across the
+Group, played an active role in the formulation
+of corporate debt restructuring, debt-for-equity
+swap plans and reorganization plans, standardized
+corporate governance and production & operation,
+helped enterprises tide over difficulties through
+reform and continuously improved the asset quality
+of banks. Further playing its role as a shareholder,
+ICBC Investment dispatched directors and supervisors
+to the debt-for-equity swap enterprises and got
+deeply involved in the corporate governance of
+such enterprises, and promoted the healthy and
+sustainable development of enterprises.
+ICBC Investment is one of the first pilot institutions in
+China to conduct debt-for-equity swaps of banks. It holds
+the franchise license of non-bank financial institution and
+is mainly engaged in debt-for-equity swaps and supporting
+businesses.
+ICBC Investment
+Discussion and Analysis
+Annual Report 2023
+ICBC Wealth Management engages mainly in the issuance
+of wealth management products, wealth management
+advisory and consulting services as well as other activities
+approved by NFRA.
+699
+Publicly
+Products issued
+107
+55,076
+173
+offered
+Privately
+fundraising
+Classified by
+At 31 December 2022
+Number of
+tranches
+1,190
+96.6
+Percentage
+At 31 December 2023
+Number of
+tranches Amount
+1,011 1,552,597
+Matured products
+Number of
+tranches Amount
+609 317,053
+tranches Amount
+430 261,980
+Amount
+1,707,212
+Number of
+(%)
+14.78
+34,828
+356,671
+48,994
+Net profit
+(in USD
+millions)
+Industrial and Commercial Bank of China Commercial banking
+HKD44,188 million
+117,271.56
+19,174.54
+825.26
+(Asia) Limited
+ICBC International Holdings Limited
+Investment banking
+HKD5,963 million
+7,209.00
+925.89
+(484.27)
+Industrial and Commercial Bank of China
+Commercial banking
+MOP589 million
+1,075.70
+MYR833 million
+Commercial banking
+Industrial and Commercial Bank
+20.51
+438.87
+millions)
+2,931.31
+Commercial banking
+PT. Bank ICBC Indonesia
+(Macau) Limited
+7.59
+3,829.93
+46,051.23
+IDR3.71 trillion
+millions)
+(in USD
+(in USD
+Major Overseas Subsidiaries
+Major Controlled Subsidiaries and Equity Participating Company
+Other assets
+Total
+Non-standard debt assets
+Bonds
+Cash, deposits and reverse repurchase agreements
+In RMB millions, except for percentages
+Amount Percentage (%)
+Asset type
+Discussion and Analysis
+59
+Annual Report 2023
+100.0
+1,201 1,607,477
+3.1
+DIRECT AND INDIRECT INVESTMENTS OF ICBC WEALTH MANAGEMENT IN WEALTH MANAGEMENT PRODUCTS AS
+AT THE END OF 2023
+242
+728,853
+857,583
+Net assets
+Total assets
+Issued share
+capital/
+paid-in capital
+Principal business
+Institution
+2023
+42.4
+At 31 December 2023
+1,718,415
+4.6
+79,527
+3.1
+52,452
+49.9
+100.0
+61
+185.60
+62
+Corporate Banking
+Annual Report 2023
+62
+Cyber Security Risk
+Discussion and Analysis
+77 Information Technology and
+etc.
+Enterprise risk management is a process to effectively identify, assess,
+measure, monitor, control or mitigate and report risks in order to ensure
+the realization of the Group's operating and strategic objectives by setting
+up an effective and balanced risk governance structure, fostering robust
+and prudent risk culture, formulating unified risk management strategies
+and risk appetite, and implementing the risk limit and risk management
+policies. The principles of enterprise risk management of the Bank include
+full coverage, matching, independence, perspectiveness and effectiveness,
+Enterprise Risk Management System
+In 2023, the Bank adhered to the principle of "laying a sound foundation
+for risk control", and deeply applied the "Five-pronged Risk Management
+Approach" to the iterative upgrade and implementation of the enterprise
+risk management system. The Bank strengthened the top-level design for
+risk management, ameliorated the rules for enterprise risk management
+and other systems, and established and improved the risk officer
+management mechanism. The Bank consolidated the responsibilities of the
+three defense lines for risk management, and enhanced the effectiveness
+of enterprise risk management. The Bank conducted a comprehensive
+inspection of various potential risks, and continuously improved the
+I capability of overseas institutions and subsidiaries in risk data penetration
+management, to reflect the overall picture of the Group's risks in a
+sufficient and dynamic manner. The Bank intensified risk prevention and
+control throughout the whole process of digitalization, and sped up the
+building of an enterprise-level intelligent risk control platform. The Bank
+strengthened risk prevention and control in emerging fields, intensified the
+risk management of cooperation institutions in investment and financing
+business, and well conducted the risk management of products throughout
+their whole lifecycle.
+76 Reputational Risk
+74 Operational Risk
+72 Liquidity Risk
+71 Interest Rate Risk in the
+Banking Book
+69 Market Risk
+63 Credit Risk
+Management System
+77 Country Risk
+62 Enterprise Risk
+RISK MANAGEMENT
+70
+44,984
+312,561
+Total foreign exchange exposure, net
+142,785
+Annual Report 2023
+20,088
+Discussion and Analysis
+6,655
+Please refer to the section headed "Market Risk" of the
+2023 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for
+further information on market risk capital measurement.
+Interest Rate Risk in the Banking Book
+Interest rate risk in the banking book is defined as the
+risk of loss in the economic value and overall profit of
+the banking book arising from adverse movements in the
+interest rate and maturity structure, etc.
+Management of Interest Rate Risk in the
+Banking Book
+The Bank's management system for interest rate risk in
+the banking book conforms to the system importance,
+risk status and business complexity, and fits the Bank's
+overall development strategy and the enterprise risk
+management system. The system mainly consists of the
+following elements: a sound risk system; an effective risk
+governance structure; sound risk management strategies,
+policies and procedures; effective risk identification,
+measurement, monitoring, control and mitigation that
+cover all areas; a complete internal control and review
+mechanism; a fully-built risk management system; and
+adequate information disclosure and reporting. The Bank
+strictly complied with regulatory requirements for interest
+rate risk in the banking book, effectively managed interest
+rate risk in the banking book at the Bank and consolidated
+level, and developed a sound governance structure for
+interest rate risk management in the banking book that is
+fully built and well-structured, with clearly defined rights
+and responsibilities. The Board of Directors and the Senior
+Management are vested with the ultimate and executive
+responsibilities, respectively, for managing interest rate risk
+in the banking book. The Asset & Liability Management
+Department of the Head Office takes the leading role
+in managing interest rate risk in the banking book, and
+other departments and institutions play their roles in
+implementing policies and standards concerning interest
+rate risk in the banking book. The Internal Audit Bureau
+and the Internal Control & Compliance Department of the
+Head Office are responsible for reviewing and evaluating
+duties in respect of interest rate risk in the banking book.
+The objective of management of interest rate risk in the
+banking book: The Bank aims at maximizing the risk-
+adjusted net interest income within the tolerable level
+of interest rate risk under its risk management and risk
+appetite. The Bank formulated strategies and clarified
+objectives and modes for managing interest rate risk
+in the banking book based on risk appetite, risk status,
+macroeconomic and market changes. Based on the pre-
+judging of the interest rate trend and measurement
+results of the changes in overall profit and economic
+value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated
+approach to using interest rate risk control tools to
+mitigate and manage risks, so as to ensure the Bank's
+actual interest rate risks conform to its bearing capability
+and willingness. On the basis of management strategies
+and objectives, the Bank developed policies and made clear
+the modes and instruments for managing interest rate risk
+in the banking book. By developing and modifying such
+methods as on-balance sheet adjustment and off-balance
+sheet hedging to manage interest rate risk, adeptly using
+quantity, pricing and derivative instruments regarding
+assets and liabilities, and applying the limit management
+system, business plan, performance assessment and capital
+evaluation in all areas for interest rate risk management
+and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the
+affiliates and the products and portfolios easily affected by
+interest rate risk.
+exchange items, net
+Please refer to "Note 50. (c)(ii) to the Consolidated
+Financial Statements: Currency Risk" for the exchange rate
+sensitivity analysis.
+(49,681)
+RMB
+453,471
+(43,709)
+In RMB (USD) millions
+At 31 December 2023
+At 31 December 2022
+USD
+Item
+Exposure of on-balance sheet foreign
+In line with the principles of comprehensiveness, prudence
+and foresight, the Bank's stress testing on interest rate risk
+in the banking book adopted the interest rate risk exposure
+measurement approach and standardized duration
+approach to measure the effect of interest rate exposure
+changes under different stress scenarios on the overall
+profit and economic value. Based on the domestic and
+overseas regulatory requirements, the bank-wide asset and
+liability business structure, operation and management as
+well as risk appetite, the Bank set stress testing scenarios
+for interest rate risk in the banking book by taking into
+account the current interest rate level, historical changes
+and trends, total assets and liabilities and their term
+characteristics, business development strategies, customer
+behaviors and other factors, and conducted stress testing
+quarterly.
+equivalent
+RMB
+63,797
+657,753
+USD
+equivalent
+94,665
+exchange items, net
+Exposure of off-balance sheet foreign
+(310,686)
+(345,192)
+In 2023, adhering to a steady and prudent interest rate
+risk appetite, the Bank grasped changes in the monetary
+policy cycles and market expectations in a forward-looking
+manner, improved the mechanism for dynamic adjustment
+to interest rate risk management strategies, and continued
+to optimize the interest rate exposure and duration
+mismatch structure of assets and liabilities. The Bank
+strengthened the ability to predict and respond to interest
+rate fluctuations in domestic and foreign currencies, bonds,
+credits, and other markets, and kept improving the digital
+management of interest rate risks, to consolidate the high-
+quality operating results from balanced, coordinated and
+sustainable current earnings and long-term value.
+- 100 basis points
+71
+income
+equity
+income
+equity
+(14,922)
+(73,298)
+14,922
+84,941
+(1,320)
+(6,466)
+1,320
+(1,439)
+(95)
+1,439
+96
+Effect on
+net interest
+Effect on
+net interest
+Discussion and Analysis
+Analysis on Interest Rate Risk in the Banking Book
+Interest Rate Sensitivity Analysis
+Supposing that there is parallel shift of overall market interest rates, and taking no account of possible risk management
+actions taken by the Management to mitigate the interest rate risk, the analysis on interest rate sensitivity of the Bank
+categorized by major currencies at the end of 2023 is shown in the following table:
++100 basis points
+in interest rate
+Effect on
+Annual Report 2023
+In RMB millions
+in interest rate
+Effect on
+Currency
+RMB
+USD
+HKD
+Other
+Total
+FOREIGN EXCHANGE EXPOSURE
+In 2023, the Bank kept a close eye on the changes in
+market trends. By adhering to the currency risk neutrality
+principle, it actively took multiple management measures
+such as limit management and hedging, and improved the
+matching degree of the Group's foreign exchange asset
+and liability currencies. The currency risk of the Group was
+maintained within a reasonable range.
+Market risk is defined as the risk of loss to a bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, stock prices and commodity prices). The Bank is primarily exposed
+to interest rate risk and currency risk (including gold). Market risk management is the process of identifying, measuring,
+monitoring, controlling and reporting market risk. The objective of market risk management is to control market risk
+exposures within a tolerable level and maximize risk-adjusted return according to the Bank's risk appetite.
+Currency Risk Management
+In RMB millions, except for percentages
+% of total
+Borrower
+Industry
+Amount
+loans
+Borrower A
+Borrower B
+Production and supply of electricity, heating, gas and water
+Transportation, storage and postal services
+211,750
+0.8
+175,022
+0.7
+Borrower C
+Transportation, storage and postal services
+The table below shows the details of the loans granted to the top ten single borrowers of the Bank as at the end of 2023.
+14.2
+16.0
+3.6
+Discussion and Analysis
+Large Exposures Management
+In accordance with relevant regulatory rules, the Bank strictly carried out various work on large exposures management
+in an orderly manner, and further improved the large exposures management system, including the construction of large
+exposure management systems, to strengthen large exposures limit management, and to continuously improve large
+exposures management.
+BORROWER CONCENTRATION
+As at the end of 2023, the total amount of loans granted by the Bank to the single largest borrower and top ten single
+borrowers accounted for 4.5% and 23.5% of the Bank's net capital base, respectively. The total amount of loans granted
+to the top ten single borrowers was RMB1,105,393 million, accounting for 4.2% of the total loans.
+Item
+Loan concentration to the single largest borrower (%)
+Loan concentration to the top ten borrowers (%)
+131,941
+At
+At
+31 December
+2023
+31 December
+2022
+31 December
+2021
+4.5
+23.5
+3.8
+At
+Currency risk is the risk of adverse movements of exchange
+rate resulting in losses to the bank on the foreign currency
+exposure, which is due to the currency structure's
+mismatch between foreign currency assets and liabilities.
+The Bank's objective of currency risk management is to
+control the impact of exchange rate fluctuations on the
+Bank's financial position and shareholders' equity within
+a tolerable extent. The Bank manages such risk principally
+by the limit management and hedging of risks. The Bank
+carries out sensitivity analysis and stress testing of currency
+risk on a quarterly basis, and the Senior Management
+and the Market Risk Management Committee review the
+currency risk reports on a quarterly basis.
+0.5
+Finance
+64,216
+0.2
+1,105,393
+4.2
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2023 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+Market Risk
+(20)
+Annual Report 2023
+69
+Discussion and Analysis
+on
+The Bank strictly complies with regulatory requirements
+market risk management, has implemented an
+independent, centralized and coordinated market
+risk management model, and formed a management
+organizational structure featuring the segregation of the
+front, the middle and the back offices in the financial
+market business. The Board of Directors assumes the
+ultimate responsibility for monitoring market risk
+management. The Senior Management is responsible
+for executing the strategies, overall policy and system
+concerning market risk management approved by
+the Board of Directors. The Market Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of
+market risk management, is responsible for reviewing
+material affairs of market risk management, and performs
+its duty in accordance with the Working Regulations
+for the Market Risk Management Committee. The risk
+management departments at different levels undertake the
+responsibility of coordinating market risk management at
+respective levels, and the business departments implement
+market risk management policies and standards for
+their respective business areas in accordance with their
+functions.
+In 2023, the Bank continued to deepen the Group's
+market risk management. In light of the new regulations
+and the latest management practices, the Bank improved
+the market risk management system, and revised core
+institutional documents such as market risk management
+rules. It effectively disseminated the Group's risk appetite,
+approved the Group's market risk limit plan for 2023,
+optimized trading strategies, refined limit monitoring,
+and strengthened early warning and prompt, in an
+effort to enhance the limit management of domestic
+and overseas institutions. It took solid steps to promote
+the implementation of the New Capital Regulation,
+strengthened the Group's capability of consolidated
+measurement of capital requirements under the new
+market risk standards, and actively promoted the
+implementation of the internal model method for market
+risk under the New Capital Regulation. It deeply refined
+the market risk management system, established and
+improved the model library and management mechanism,
+and continuously ameliorated the intelligence of the
+market risk management system.
+Management of Market Risk in the Trading
+Book
+The Bank kept strengthening trading book market risk
+management and product control, and adopted the value-
+at-risk (VaR), stress testing, sensitivity analysis, exposure
+analysis, profit/loss analysis, price monitoring and other
+means to measure and manage trading book products.
+For VaR of the trading book, please refer to "Note 50.(c)(i)
+to the Consolidated Financial Statements: VaR".
+0.2
+65,520
+Transportation, storage and postal services
+Finance
+Borrower |
+Borrower J
+Total
+127,667
+0.5
+Borrower E
+Finance
+114,281
+0.4
+Borrower F
+Borrower D
+Borrower G
+Production and supply of electricity, heating, gas and water
+Production and supply of electricity, heating, gas and water
+Transportation, storage and postal services
+77,833
+0.3
+69,500
+0.3
+67,663
+0.3
+Borrower H
+(1,008)
+1,008
+(16,673)
+In 2023, the Bank deepened the implementation of
+the Group's reputational risk management rules and
+requirements, and continuously improved the group-wide
+and whole-process reputational risk management system
+and working mechanism, to improve the quality and
+efficiency of reputational risk management. It strengthened
+the normalization of reputational risk management, and
+deepened the governance of risk sources, to safeguard the
+Bank's image. In addition, regarding the issues of social
+focusing, the Bank timely responded to social concerns,
+organized and promoted influential brand communication
+activities, to enhance the Bank's brand image. The
+Bank leads the market in terms of network influence
+and reputation value. During the reporting period, the
+reputational risk of the Bank stood in a controllable range.
+Discussion and Analysis
+Country Risk
+Country risk is the risk incurred to a bank arising from
+the inability or refusal by the debtor to repay bank debt,
+losses suffered by the bank or its commercial presence in
+such country or region and other losses due to political,
+economic and social changes and events in a country or a
+region. Country risk may be triggered by the deterioration
+of economic conditions, political and social turmoil, asset
+nationalization or expropriation, government's refusal to
+pay external debt, foreign exchange control or currency
+depreciation in a country or a region.
+The Bank strictly observes regulatory requirements on
+country risk management. The Board of Directors assumes
+the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible
+for executing the country risk management policies
+approved by the Board of Directors. The Risk Management
+Committee of the Head Office is responsible for reviewing
+matters regarding country risk management. The Bank
+manages and controls country risk with a series of tools,
+including country risk assessment and rating, country risk
+limit, country risk exposure monitoring and stress testing.
+The Bank reviews the country risk rating and limits at least
+once every year.
+In 2023, facing the increasingly complicated and severe
+external environment, the Bank strictly abode by regulatory
+requirements and, with consideration of its business
+development needs, continued to strengthen country
+risk management. The Bank closely observed changes
+in country risk exposures, constantly tracked, monitored
+and reported country risk, and timely updated and
+adjusted the country risk rating and limits. It continued
+to strengthen early warning mechanism for country risk,
+proactively conducted stress testing on country risk and
+effectively controlled country risk while steadily promoting
+internationalization.
+Information Technology and Cyber
+Security Risk
+Reputational risk is defined as the risk of negative
+comments on a bank from stakeholders, the public
+or the media as a result of the behaviors of the bank
+or practitioners or external events and so on, thereby
+damaging brand value, detrimental to normal operation,
+and even affecting market and social stability. Reputational
+risk may arise in any part of the Bank's operation and
+management, and usually co-exists and correlates with
+credit risk, market risk, operational risk and liquidity
+risk. Good reputation is central to the operation and
+management of a commercial bank. The Bank highly
+values its reputation and has incorporated reputational risk
+management in the corporate governance and enterprise
+risk management system to prevent reputational risk.
+The Board of Directors is responsible for reviewing and
+finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of
+the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and
+effectiveness of reputational risk management across
+the Bank and assuming the ultimate responsibility for
+reputational risk management. The Senior Management
+is responsible for leading reputational risk management
+of the Bank, implementing the strategies and policies
+established by the Board of Directors, reviewing and
+finalizing the rules, measures and operating procedures
+for reputational risk management, preparing plans for
+responding to and coping with extraordinarily major
+reputational risk events and ensuring the proper and
+effective operation of the reputational risk management
+system. The Bank has established a special reputational
+risk management team to take charge of the daily
+management of reputational risk.
+Information technology and cyber security risk refers
+to the operational, legal or reputational risk incurred in
+various IT activities by natural factors, human factors,
+technical vulnerabilities and managerial deficiencies, mainly
+involving areas such as technology governance, cyber and
+information security, innovative research and development,
+production and operation, business continuity, and
+technology outsourcing. The Bank incorporated
+information technology and cyber security risk into its
+enterprise risk management system, and established and
+continuously refined the long-term mechanism of joint
+prevention and control for the three lines of defense.
+Annual Report 2023
+77
+Discussion and Analysis
+CAPITAL MANAGEMENT
+The Bank implements a group-based capital management
+mechanism, and takes capital as the object and an
+instrument for its management activities, including
+planning, measurement, allocation, application and
+operation. The Bank's capital management aims at
+maintaining an appropriate capital adequacy ratio and
+continuously meeting capital supervisory regulations
+and policies; ceaselessly strengthening and enhancing
+the capital base and supporting business growth and
+implementation of strategic planning; establishing a
+value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism
+and improving capital allocation efficiency; innovating
+and expanding capital replenishment channels, raising
+capital quality and optimizing capital structure. The Bank's
+capital management covers various operating entities in
+the Group, and its contents include capital adequacy ratio
+management, economic capital management, capital
+investment and financing management.
+In 2023, the Bank established and refined the lean capital
+management, continuously improved scientific capital
+raising, efficient allocation, precise measurement, long-
+term constraint and normal optimization management
+mechanism, and continued to elevate the capital
+use efficiency. It appropriately conducted capital
+replenishment, optimized the capital structure and reduced
+the cost of capital, thus laying a solid capital foundation
+for the Bank to serve the real economy. The Bank actively
+responded to the implementation of the New Capital
+Regulation to ensure the smooth switching of regulatory
+rules and the smooth operation of the capital adequacy
+ratio. In 2023, all capital indicators performed well, of
+which the capital adequacy ratio was kept at a sound and
+appropriate level.
+In 2023, the Bank coordinated development and security,
+and regarded the prevention and control of information
+technology and cyber security risk as an important part of
+FinTech work, for the purpose of high-quality development
+through high-standard security. The Bank continuously
+improved cyber security capabilities, strengthened
+support for information system production and operation,
+reinforced special inspection on cyber security, and
+improved contingency plan for cyber security, to
+consolidate the foundation for production and operation
+safety. The Bank strengthened the prevention and control
+of digital transformation risks, and kept an eye on
+emerging and traditional risks in the digital environment.
+During the reporting period, the Bank's overall risks were
+controllable.
+Capital Adequacy Ratio and Leverage
+Ratio
+Reputational Risk
+76
+operational risks faced by the Bank, including internal
+fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage
+to physical assets, IT system, execution and delivery and
+process management. Among these, external fraud,
+execution, delivery and process management constitute
+major sources of operational risk losses of the Bank.
+74
+Annual Report 2023
+Discussion and Analysis
+The Bank strictly complies with regulatory requirements
+on operational risk management. The Board of Directors,
+the Board of Supervisors, the Senior Management and its
+Operational Risk Management Committee are respectively
+responsible for decision-making, supervision and execution
+with respect to operational risk management, and
+relevant departments act as the "three lines of defense"
+for operational risk management pursuant to their
+management functions, thus forming an operational risk
+management system with close connection and mutual
+checks and balances. Institutions and departments function
+as the first line of defense, assume the direct responsibility
+for respective operational risk management. Classified
+management departments such as Internal Control &
+Compliance, Legal Affairs, Security, Financial Technology,
+Finance & Accounting, Operation Management and
+Human Resources as well as cross-risk management
+departments including Credit and Investment Management
+and Risk Management jointly perform the functions
+as the second line of defense, which are respectively
+responsible for the lead management of operational risk,
+the classified management of certain type of operational
+risk and the management of operational risk across credit
+and market risks. The Internal Audit Department performs
+the functions as the third line of defense and assumes
+the responsibility for supervision, and is responsible
+for supervising the effectiveness of operational risk
+management.
+In 2023, the Bank improved the standards for collecting
+operational risk loss data, restructured operational
+risk management system and consolidated the quality
+of operational risk loss data, in line with regulatory
+focuses and operational risk trends, the operational
+risk management requirements of NFRA, and its own
+management needs. It steadily advanced the project on
+meeting operational risk standard approach under the New
+Capital Regulation, and coordinated the self-assessment
+of operational risk and control, to enhance operational
+risk control in a constant manner. To improve the long-
+term case prevention mechanism, the Bank consolidated
+the primary responsibilities for case prevention, deepened
+the case risk governance in key fields, optimized case
+assessment mechanism, stimulated internal motivation for
+self-examination and self-correction, and continuously and
+deeply carried out case warning and education. Besides, it
+strengthened the grid-based intelligent control mechanism
+for abnormal employee behavior, consolidated and
+examined the primary responsibility for management and
+control, and deepened the special governance of abnormal
+behavior. During the reporting period, the operational risk
+control system of the Bank operated smoothly, and the
+operational risk was controllable on the whole.
+Please refer to the section headed "Operational Risk"
+of the 2023 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited issued by the
+Bank for further information on operational risk capital
+measurement.
+Legal Risk
+Annual Report 2023
+Legal risk is the risk of incurring legal sanctions, regulatory
+penalties, financial losses, reputational losses or other
+negative consequences that arises out of or in connection
+with the failure of a bank to comply with relevant laws,
+regulations, administrative rules, regulatory provisions or
+requirements of other relevant rules during the bank's
+operation; the unfavorable legal defects that exist in
+products, services or information provided to clients,
+transactions engaged in, and contracts, agreements or
+other documents executed by the bank; legal disputes
+(litigation or arbitration proceedings) between the bank
+and its clients, counterparties and stakeholders; important
+changes in relevant laws and regulations, administrative
+rules, regulatory provisions and other relevant rules;
+and other relevant legal events that occur internally and
+externally.
+In 2023, the Bank continued to strengthen legal risk
+management, by improving the risk prevention and control
+capacity in legal risk management, ensuring the legal
+and compliant operation, healthy business development
+and overall business stability of the Group. In accordance
+with new laws and regulations, its business rules, relevant
+agreements and system construction were improved, and
+legal risk prevention and control in key areas and links
+was further pushed forward in line with new requirements
+of financial regulators. The Bank also conducted ongoing
+monitoring of legal risks and improved both the vertical
+interconnection and horizontal coordination mechanism
+between the Head Office and branches. By systematically
+embedding legal risk prevention and control into business
+negotiations, product design, contract signing and other
+links, the Bank made risk prevention and control more
+prospective, proactive and targeted. It improved the cross-
+border coordination and management for legal work,
+Annual Report 2023
+75
+Discussion and Analysis
+strengthened the legal risk management of overseas
+institutions, and enhanced the training of legal talents
+for overseas business, thus properly responding to cross-
+border legal issues emerging in the development of
+international operations. Moreover, the Bank ameliorated
+the function design and management mechanism for
+the electronic signing system, to further enhance its risk
+control capability and usability, and effectively prevent
+and control operational risk, legal risk and reputational
+risk caused by misuse of contract seal. It continuously
+reinforced authorization management, related party
+management, and trademark management, and made
+efforts to constantly institutionalize risk management and
+control, and refine the structure of the system. The Bank
+devoted great energy to strongly dealing with lawsuit cases
+to protect the Bank's rights and interests in accordance
+with laws and avoid and reduce risk losses. In addition
+to the active assistance in online judicial inquiry and
+enforcement, the Bank played a positive role in improving
+the efficiency of law enforcement and case handling by
+competent authorities and building a social credibility
+system. The Bank widely carried out legal training and
+education activities to enhance the awareness of legality
+and compliance among the Group's employees.
+Money Laundering Risk
+Money laundering risk refers to the possibility that the
+products and services provided by a bank in the course
+of business operation and management are used for
+money laundering, terrorist financing, proliferation
+financing and other upstream criminal activities of money
+laundering, thereby causing the bank to suffer losses. Any
+money laundering risk event or case may bring serious
+reputational risk and legal risk, and lead to customer loss,
+business loss and financial loss.
+In strict compliance with anti-money laundering ("AML")
+laws and regulations of China and host countries (regions)
+of overseas institutions, the Bank sincerely fulfilled the
+legal obligations and social responsibilities concerning
+AML, and took the initiative to adapt to the AML situation
+in the new era. Guided by the "risk-based" principle and
+focusing on "one basic framework and four management
+pillars", the Bank continuously improved the Group's AML
+governance structure, optimized customer due diligence
+mechanisms, and strengthened money laundering risk
+assessment and control. It deepened the construction of
+a digital AML ecosystem, strengthened AML supervision,
+inspection and auditing, and advanced AML training and
+team building. Besides, it gradually developed an AML
+management mode with its own characteristics in line with
+international standards, thus further improving the quality
+and efficiency of AML management. During the reporting
+period, the Bank's money laundering risk was controllable.
+Based on the objective to ensure legal and compliant
+operation, the Bank always attaches great importance
+to establishing a sound legal risk management system,
+forming a full-process legal risk prevention and control
+mechanism to support and secure business innovation and
+market competition, and to prevent and eliminate various
+potential or practical legal risks. The Board of Directors
+is responsible for reviewing and determining the strategy
+and policy relating to legal risk management, and assumes
+the ultimate responsibility of legal risk management.
+The Senior Management is responsible for executing the
+strategy and policy relating to legal risk management,
+examining and approving relevant important affairs.
+The Legal Affairs Department of the Head Office is in
+charge of legal risk management across the Group, with
+relevant business departments providing related support
+and assistance on legal risk prevention and control. The
+affiliates, domestic and overseas branches undertake the
+responsibility of legal risk management of their respective
+institutions.
+At the end of 2023, the Bank calculated its capital
+adequacy ratios at all levels in accordance with the
+Capital Regulation (Provisional). According to the scope
+of implementing the advanced capital management
+approaches as approved by the regulatory authorities, the
+Bank adopted the foundation internal ratings-based ("IRB")
+approach for corporate credit risk, the IRB approach for
+retail credit risk, the internal model approach ("IMA") for
+market risk, and the standardized approach for operational
+risk that met the regulatory requirements. The regulatory
+weighting approach was adopted for credit risk uncovered
+by the IRB approach and the standardized approach was
+adopted for market risk uncovered by the IMA.
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+In RMB millions, except for percentages
+At 31 December 2022
+13.55
+14.04
+14.03
+Tier 1 capital adequacy ratio (%)
+15.17
+15.00
+15.64
+15.66
+13.72
+Capital adequacy ratio (%)
+19.28
+19.26
+19.60
+As at the end of 2023, the common equity tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy
+ratio calculated by the Bank in accordance with the Capital Regulation (Provisional) stood at 13.72%, 15.17% and 19.10%,
+respectively, complying with regulatory requirements¹.
+1
+The Bank's capital adequacy ratios comply with additional regulatory requirements on systemically important banks.
+78
+Annual Report 2023
+19.10
+Common equity tier 1 capital adequacy ratio (%)
+3,945,322
+4,281,079
+At 31 December 2023
+Item
+Group
+Parent
+Company
+Group
+Parent
+Company
+Net common equity tier 1 capital
+3,381,941
+3,065,855
+3,121,080
+2,824,565
+Net tier 1 capital
+3,736,919
+3,393,346
+3,475,995
+3,152,660
+Net capital base
+4,707,100
+4,361,390
+74
+Operational Risk Management
+Operational risk is defined as the possibility of loss
+resulting from insufficient or problematic internal
+processes, employees and IT systems or from external
+events, including legal risk, but excluding strategic
+and reputational risk. There are seven major types of
+Please refer to "Note 50. (b) to the Consolidated Financial Statements: Liquidity Risk".
+Discussion and Analysis
+Liquidity Risk Management
+The Bank's liquidity risk management system conforms
+to its overall development strategy and overall risk
+management system, and is commensurate with the
+business scale, business nature, complexity and other
+aspects of the Bank. The system includes the following
+fundamental elements: a sound risk system; effective
+governance structure for liquidity risk management;
+sound strategy, policy and procedures for liquidity risk
+management; effective identification, measurement,
+monitoring and control for liquidity risk and a complete
+management information system. In respect of liquidity
+risk management, the Bank's governance structure
+embodies the decision-making system comprising the
+Board of Directors and its special committees as well
+as the Asset and Liability Management Committee
+and the Risk Management Committee of the Head
+Office; the supervision system comprising the Board
+of Supervisors, the Internal Audit Bureau and the
+Internal Control and Compliance Department of the
+Head Office; and the execution system comprising the
+Asset and Liability Management Department, leading
+management departments of on- and off-balance sheet
+businesses, the information technology departments,
+operation management departments of the Head Office
+and relevant departments of branches. Each of these
+systems performs the corresponding functions of decision
+making, supervision and execution according to division of
+responsibilities.
+Objective of liquidity risk management: By establishing
+and improving the liquidity risk management system,
+the Bank aims at realizing effective identification,
+measurement, monitoring and control of the liquidity
+risk at the Group level, the Bank, the affiliates, the
+branches and the business lines, and ensuring the liquidity
+demand is satisfied at a reasonable cost in time under
+the normal business scenario and the stress scenario. The
+Bank's liquidity risk management strategy and policy are
+formulated in accordance with the liquidity risk appetite,
+and they cover all businesses on- and off-balance sheet, all
+domestic and overseas business departments, branches and
+affiliates that are likely to have a material impact on the
+liquidity risk, and contain the liquidity risk management
+under normal and stressed scenarios. The liquidity risk
+management strategy specifies the overall objective and
+mode of liquidity risk management and lists major policies
+and procedures. The policies for liquidity risk management
+are formulated in accordance with external and macro
+operating environments and business development of the
+Bank, with a view to striking an effective balance among
+security, liquidity and profitability. The Bank conducts stress
+testing quarterly or by subject by fully considering various
+macro and micro factors that may affect the liquidity of
+the Bank, changes in the external operating environment,
+regulatory requirements, and business characteristics and
+complexity of the Bank.
+In 2023, the Bank adhered to a steady and prudent
+liquidity management strategy, and the Group's liquidity
+was stable. The Bank intensified the monitoring of funds
+and maintained a proper and sufficient liquidity reserve,
+with stable and orderly liquidity and customer payment.
+The Bank facilitated the ongoing upgrading of the liquidity
+risk management mechanism and system, and continuously
+enhanced the automation and intelligence level of liquidity
+risk monitoring, measurement and control. The Bank
+strengthened on- and off-balance sheet liquidity risk
+management in local and foreign currencies in domestic
+and overseas institutions, optimized the multi-level and
+multi-dimensional liquidity monitoring and early warning
+system, and enhanced the Group's liquidity risk prevention
+and emergency response capabilities.
+Liquidity Risk Analysis
+The Bank assesses liquidity risk status by comprehensive
+use of a variety of methods and tools such as liquidity
+indicator analysis and liquidity exposure analysis.
+At the end of 2023, RMB liquidity ratio and foreign
+currency liquidity ratio of the Bank were 54.5% and
+88.8% respectively, both meeting the regulatory
+requirements. Loan-to-deposit ratio was 76.7%.
+At
+At
+At
+Item
+2023
+Regulatory 31 December 31 December 31 December
+criteria
+2022
+Operational Risk
+Annual Report 2023
+72
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis at a reasonable cost to settle liabilities as
+they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: material adverse changes in market liquidity,
+withdrawal of customers' deposits, drawing of loans by customers, overdue payment of debtors, mismatch between assets
+and liabilities, difficulties in assets realization, operating losses and risk associated with its affiliates.
+4,451,963
+3,958,454
+(79,879)
+16,673
+91,766
+Note: Please refer to "Note 50.(d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+Interest Rate Exposure Analysis
+As at the end of 2023, the Bank had a positive cumulative interest rate sensitivity exposure within one year of
+RMB3,353,947 million, representing an increase of RMB1,302,311 million from the end of the previous year, mainly because
+of the increase in repriced or matured loans and advances to customers within one year. The Bank had a positive cumulative
+interest rate sensitivity exposure above one year of RMB282,408 million, representing a decrease of RMB1,083,170 million,
+mainly resulted from the increase in repriced or matured due to customers above one year.
+INTEREST RATE RISK EXPOSURE
+In RMB millions
+RMB
+At 31 December 2023
+Note:
+Less than
+3 months
+(5,622,895)
+(7,389,824)
+3 months to
+1 year
+8,976,842
+9,441,460
+1 to 5 years
+(4,169,555)
+(2,592,876)
+Over 5 years
+Please refer to "Note 50. (d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+Liquidity Risk
+At 31 December 2022
+>=25.0
+2021
+42.3
+54.5
+1 month
+1 to 3
+months
+At 31 December 2023
+(14,661,992)
+At 31 December 2022
+(15,617,408)
+517,820
+(107,581)
+Overdue/
+repayable
+on demand
+(1,065,013)
+(412,689)
+1 to 5
+years
+299,076
+Over
+5 years
+Undated
+(344,569)
+658,151
+17,033,573
+15,935,539
+Total
+3,614,927 3,776,588
+3,403,976 3,515,419
+Note:
+3 months
+to 1
+1 
+year
+(1,961,803)
+In RMB millions
+Less than
+As at the end of 2023, the liquidity exposure for less than
+1 month turned from negative to positive, mainly due to
+the increase of matured reverse repurchase agreements
+within corresponding term. The negative liquidity exposure
+for 1 to 3 months and 3 months to 1 year expanded and
+the positive liquidity exposure for 1 to 5 years decreased,
+I mainly due to the increase of matured due to customers
+within corresponding term. The positive liquidity exposure
+for over 5 years expanded, which was mainly due to the
+increase in matured loans and advances to customers and
+bond investments within corresponding term. In 2023,
+the Bank maintained stable and abundant funds, balanced
+and steady growth in assets and liabilities, reasonable and
+appropriate cash flows of various maturities, and safe and
+steady liquidity operation.
+41.5
+Liquidity ratio (%)
+Foreign currency
+>=25.0
+88.8
+106.1
+LIQUIDITY EXPOSURE ANALYSIS
+Loan-to-deposit ratio (%)
+RMB and foreign currency
+88.9
+76.7
+77.3
+Annual Report 2023
+73
+Discussion and Analysis
+Net stable funding ratio aims to ensure commercial banks
+have sufficient stable sources of funding to meet the
+needs for stable funding of assets and off-balance sheet
+risk exposures. The net stable funding ratio is the ratio of
+the available stable funding to the required stable funding.
+As at the end of the fourth quarter of 2023, the net stable
+funding ratio was 130.56%, 0.39 percentage points higher
+than that at the end of the previous quarter, mainly due
+to the rapid growth of stable funds available for use. For
+the quantitative information for net stable funding ratio
+in accordance with the former CBIRC's Disclosure Rules
+on Net Stable Funding Ratio of Commercial Banks, please
+refer to the section headed "Unaudited Supplementary
+Information to the Consolidated Financial Statements".
+The daily average liquidity coverage ratio for the fourth
+quarter of 2023 was 122.03%, 1.00 percentage point
+lower than the previous quarter, mainly because of the
+decreased cash inflows in the next 30 days. High-quality
+liquid assets cover cash, available central bank reserve
+under stress and primary and secondary bond assets that
+can be included in the liquidity coverage ratio under the
+regulatory requirements. For the quantitative information
+for liquidity coverage ratio based on the former CBIRC's
+Administrative Measures for the Information Disclosure
+of Liquidity Coverage Ratio of Commercial Banks, please
+refer to the section headed "Unaudited Supplementary
+Information to the Consolidated Financial Statements".
+76.7
+Valid portion of minority interests
+Valid portion of capital reserve
+Retained profits
+General reserve
+Surplus reserve
+Common equity tier 1 capital
+Paid-in capital
+3,502
+2023
+At 31 December At 31 December
+In RMB millions, except for percentages
+Discussion and Analysis
+CAPITAL ADEQUACY RATIO
+Other
+Item
+Common equity tier 1 capital deductions
+2022
+3,404,032
+First, the Bank reinforced the customer chain along
+the capital chain, leveraged the financial advantages
+of industrial chain and supply chain, identified target
+customers, and continuously expanded the customer chain,
+focusing on customers' capital and information flows.
+The Bank applied digital means to targeted marketing
+of fund undertaking, provided support for maintaining
+internal customers and expanding external customers,
+and promoted the circulation of funds within the Bank.
+In 2023, the Bank developed 13,219 targeted customers,
+bringing in new deposits of RMB33.63 billion.
+Second, the Bank refined the service chain focusing
+on the customer chain, and built scenarios and
+platforms. It exclusively built the "National Coordinated
+Fund Management System for Pension Insurance",
+expanded the "ICBC Anxin Asset Management" scenario
+in an innovative way, and developed the "e-Nong Xin
+An" migrant worker salary supervision product. The
+Bank provided GBC customers with a one-stop supply of
+"finance + government service", "finance + industry",
+and "finance + people's livelihood", and continuously
+enhanced customer loyalty.
+Note:
+7,760
+8,065
+8,001
+8,424
+8,609
+In 2023, the Bank promoted the GBC + projects in a
+coordinated manner, comprehensively covering eight tasks:
+GBC interaction, fund undertaking, the "Net Making and
+Patching" program, sharpening of outlets' competitive
+edge, construction of mobile banking APP, rural
+revitalization by urban-rural collaborative development,
+payment agency service, and merchant marketing.
+The Bank deepened scenario construction, digital
+empowerment, channel support, and comprehensive
+collaboration, achieved collaboration and mutual
+promotion and extension of capital chain, customer
+chain, service chain and value chain, and consolidated
+the foundation for high-quality development.
+Faced with multiple business challenges, the Bank
+continuously improved its refined management, stimulated
+endogenous business momentum, and successfully tackled
+multiple disadvantages to income. The Group recorded a
+total operating income of RMB806.5 billion for 2023, with
+the year-on-year decrease limited to 4.3%. Consequently,
+net profit rose by 0.8% year-on-year to RMB365.1 billion,
+hitting a record high.
+II.
+business, and inclusive services significantly higher than
+that of total loans. The Bank reasonably arranged the
+rhythm of lending, and achieved the highest loan balance
+in recent years. Second, bond investment increased by
+over RMB1 trillion. Bond investment hit a new high of
+RMB11.36 trillion, representing an increase of RMB1.29
+trillion. Third, deposit competitiveness improved
+markedly. Deposits reached RMB33.5 trillion, up RMB3.7
+trillion over the beginning of the year, increasing by
+more than RMB3 trillion for the second consecutive
+year and continuously giving an impetus to the real
+economy. Personal and corporate deposits developed in
+a balanced and coordinated manner. Fourth, customer
+base was continuously consolidated. The Bank was
+the first among peers to see a number of corporate
+customers exceeding 12.00 million. A customer ecosystem
+in which large, medium, small and micro customers
+were coordinated kept improving. The total number of
+customers further increased, with the number of personal
+customers rising to 740 million.
+The Bank continuously improved the quality and efficiency
+of financial services, to accurately satisfy the needs of
+the real economy and effectively help stabilize economic
+growth. As at the end of 2023, the Group's total assets
+amounted to nearly RMB45 trillion, maintaining its leading
+position in the world. First, total loans increased while
+loan structure improved. Loans rose by RMB2.88 trillion
+or 12.4% over the beginning of the year to RMB26.1
+trillion, maintaining a leading position among peers.
+Highlighting the major responsibilities and core business,
+the Bank saw a growth of loans to key businesses such
+as manufacturing, green business, strategic and emerging
+Going All Out to Serve the Real Economy
+and Effectively Improving Service Quality
+I.
+In 2023, the Bank boosted the high-quality economic
+development with high-standard financial services, pursued
+the strategy of "leveraging our strengths, tackling areas of
+weaknesses and solidifying the foundation", and improved
+and reinforced the balance between speed and quality,
+development and security as well as other important
+relations. It effectively responded to the evident narrowing
+of net interest margin, higher volatility of financial market,
+and more risk control challenges, and achieved stable
+operating results with sound momentum and improved
+quality. The Bank continued to demonstrate the "Strong,
+Excellent and Large" features, and delivered a remarkable
+performance to investors.
+Hot Topic 1: Highlights of High-quality
+Development
+HOT TOPICS IN THE CAPITAL MARKET
+Comprehensively Tapping Potential and
+Improving Efficiency, and Achieving
+Reasonable Profit Growth
+Hot Topic 4: Solidifying the Ecological
+Foundation by GBC+ Projects
+foundation for centralized and unified management of
+models. In terms of climate risk management, the Bank
+actively conducted climate risk research, strengthened
+climate risk rating, monitoring and reporting, and
+information disclosure, and continuously improved climate
+risk management mechanisms, according to international
+regulatory requirements. Based on the stress scenario of
+the Central Banks and Supervisors Network for Greening
+the Financial System (NGFS) and the actual conditions in
+China, the Bank achieved localized calibration of stress
+scenarios, and established a transmission model related to
+the transformation risk of climate risk, to conduct climate
+risk stress testing in a forward-looking manner. In terms
+of risk management for investment and financing
+cooperation institutions, the Bank expanded the
+coverage of risk management, continuously improved the
+access management and collective review of cooperation
+institutions and products, and strengthened the monitoring
+and control of risks arising from cooperation institutions
+and businesses.
+Annual Report 2023
+Personnel
+management
+Business
+management
+Data and
+System
+Management
+of lines of
+defense
+Management
+of the
+bottom line
+Head Office and
+subordinate institutions
+Key fields
+Active
+prevention
+Smart
+control
+Comprehensive
+management
+Annual Report 2023
+87
+Discussion and Analysis
+II.
+Strengthening the Prevention,
+Resolution and Governance of Risks in
+Key Fields and Steadily Improving Asset
+Quality
+Adhering to the intelligent credit risk control of "Three
+Gates and Seven-color Pools", the Bank further applied
+new credit approval rules to overseas institutions and
+integrated subsidiaries, intensified investment and
+financing planning and duration management, promoted
+the continuous optimization of investment and financing
+structure, defused risks in key areas in an orderly manner,
+and achieved positive results in asset quality improvement.
+At the end of 2023, the Group's NPL ratio was 1.36%,
+with a decrease of 0.02 percentage points from the year
+beginning. Following the principles of marketization and
+commercial sustainability, the Bank maintained a stable
+and orderly granting of real estate credits, to satisfy the
+reasonable financing needs of the real estate enterprises.
+The Bank strengthened intelligent monitoring and early
+warning of real estate loans, developed differentiated
+risk control plans for each real estate customer, and
+accelerated the risk disposal of key real estate enterprises.
+At the end of 2023, the NPL ratio of loans to the real
+estate of domestic branches was 5.37%, down 0.77
+percentage points over the beginning of the year. In the
+field of local debts, the Bank, following the principle of
+business sustainability, granted most of related loans
+to regions with sound economic and financial strength
+and appropriate debt taking, and to the market-oriented
+operation projects with sufficient cash flows from
+operating activities such as projects vital to the people's
+livelihood and industrial support projects. The Bank
+strengthened the risk investigation of existing financing,
+mitigated risks in a forward-looking manner, and steadily
+cooperated with local governments to prevent and resolve
+financing risks by multiple market-oriented methods.
+III. Improving Intelligent Risk Management
+to Effectively Respond to Emerging Risks
+The Bank sped up the construction of an enterprise-level
+intelligent risk control platform, continuously improved
+the ICBC e-series intelligent risk management systems,
+and continuously enhanced the capability of early
+identification, warning, exposure, and resolution of risks,
+so as to effectively prevent risk contagion across markets,
+businesses, and fields. The Bank strengthened risk control
+in the digital environment, covering various elements of the
+entire digital transformation process, as well as emerging
+and traditional risks in the digital environment, to support
+the development of new digital business formats and
+models. In terms of model risk management, the Bank
+established a sound full-lifecycle management mechanism
+for model risks, covering the entire process of model
+development, validation, deployment, evaluation, and
+exit, so as to enhance the systematic management of
+model risks. The Bank regularly conducted the centralized
+inventory and risk assessment of models to strengthen the
+88
+Discussion and Analysis
+83
+Annual Report 2023
+The Bank will adhere to the connotative high-quality
+development, promote the realization of effective
+improvement in quality, proper growth in quantity, and
+precise risk prevention and control, and build a healthier
+and cleaner balance sheet and a balanced and sustainable
+income statement. The Bank will continue to grow stronger
+and do better, consolidate its position as the largest bank,
+balance the relationship among value creation, market
+position, risk control and capital constraints, improve
+operational efficiency and risk resistance capability,
+and enhance global layout capacity and international
+competitiveness, to accelerate the building of a strong
+financial institution.
+Number of personal customers (in 10,000)
+Number of corporate customers (in 10,000)
+Agency and commission-based business
+Payments settled via payment systems or correspondent banks
+Assets under custody
+Securities and other financing instruments issued
+Substitutability
+1,069
+8,448,017
+20,047,724
+640,334,459
+2,567,839
+3,806,517
+3,881,035
+41,780,554
+2022
+In RMB millions, unless otherwise specified
+Intra-financial system liabilities
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system assets
+Indicator
+Number of domestic operating institutions
+Derivatives
+Authorization
+and Risk limit
+72,043
+Complexity
+Focusing on serving the Chinese modernization, the Bank
+will take solid steps in "Five Priorities" of technology
+finance, green finance, inclusive finance, pension finance
+and digital finance, actively support the construction of
+"three major projects" of affordable housing construction,
+dual-use public infrastructure construction, and urban
+village reconstruction, and reinforce services to major
+national strategies, key areas and weak aspects. The
+Bank will focus on manufacturing and other major
+businesses, promote the development of new quality
+productive forces, and lay out the future to build financial
+infrastructure with ICBC characteristics.
+The Bank will stick to a blueprint to the end, adhere to
+the combination of strategic heritage and innovation, and
+consolidate the four strategic layouts of "leveraging our
+strengths, tackling areas of weaknesses and solidifying
+the foundation". It will deepen the implementation of
+key strategies of No.1 Personal Bank, Preferred Bank for
+Foreign Exchange Business, Key Regions and Urban-Rural
+Collaborative Development, etc., and continue to exert
+its advantages, fill up the gaps, strengthen the bottom
+lines and forge new strengths. The Bank will strive to
+promote the "five transformations" of modern layout,
+diversified structure, ecological foundation, digital driver
+and intelligent risk control, and spare no efforts to build
+an incorruptible, modern, stable, digital and trustworthy
+ICBC by your side.
+2024 marks the 75th anniversary of the founding of the
+People's Republic of China, a crucial year for achieving
+the goals and tasks of the 14th Five-Year Plan, and also
+the first year of the new journey for ICBC after its 40th
+anniversary. Under the guidance of Xi Jinping Thought on
+Socialism with Chinese Characteristics for a New Era, the
+Bank will firmly follow the path of financial development
+with Chinese characteristics, uphold the goal of building
+a strong nation with financial power, focus on the vision
+of building a world-class modern financial institution with
+Chinese characteristics, and adhere to the leading role of
+high-quality Party building for high-quality development
+and high-level safety. Moreover, the Bank will give full play
+to the crucial role of high-efficiency reform, endeavor to
+provide high-quality services, and effectively play the key
+role in serving the real economy and the ballast stone role
+in maintaining financial stability.
+Discussion and Analysis
+OUTLOOK
+Annual Report 2023
+82
+4,646,525
+Cross-jurisdictional claims and liabilities
+management subsidiary
+1,762,288
+Balance of wealth management products issued by the wealth
+381,280
+Wealth management business
+1,010,151
+Assets of non-banking affiliates
+804,507
+Securities measured at fair value
+8,416,358
+15,907
+Building an enterprise risk management system
+suitable for world-class modern financial institutions
+with Chinese characteristics
+Monitoring and
+Investigation
+Risk
+governance
+In 2023, the Bank continued to implement economic and
+financial policies, adhered to the principle of commercial
+sustainability, accurately grasped the market needs during
+the recovery and development of the real economy, and
+improved the quantity and quality of financial supply.
+Meanwhile, the Bank attached importance to the building
+of a sound business ecosystem, and promoted its high-
+quality development to bring greater returns to investors.
+I.
+Shouldering the Responsibilities as a
+Large Bank, and Hitting a Record High
+in the Total Amount and Growth of
+Investment and Financing
+In 2023, the Bank insisted on producing effect early
+on and making sufficient efforts to actively support
+stable growth. At the end of 2023, domestic RMB
+loans (excluding placements with banks and other
+financial institutions) rose by RMB2.91 trillion over the
+year beginning, representing a year-on-year increase of
+RMB355.5 billion, ranking first in the market in terms of
+balance and growth. The balance of RMB-denominated
+bond investment reached RMB10.5 trillion, up RMB1.28
+trillion over the year beginning. The Bank granted full-
+spectrum financing of over RMB4.7 trillion to the real
+economy by diversified financial services, including on-
+and off-balance sheet loans, bond investment and equity
+investment. The growth of such financing hit a record high
+and maintained a leading position in the market.
+Annual Report 2023
+85
+Discussion and Analysis
+12.8%
+13.5%
+12.6%
+13.5%
+12.3%
+12.6%
+11.6%
+11.1%
+10.6%
+9.8%
+13,323
+Note:
+Hot Topic 2: Constantly Improving the
+Quality and Efficiency of Serving the Real
+Economy
+2019
+In the next stage, the Bank will adhere to the principle
+of pursuing progress while ensuring stability, promoting
+stability through progress, and establishing the new
+before abolishing the old, to improve the quality of
+financial supply. The Bank will strive to build a clean and
+healthy balance sheet and a balanced, coordinated, and
+sustainable income statement, and endeavor to open up
+new prospects in the course of high-quality development
+of ICBC.
+operating capacity, thus effectively preventing structural
+risk. Third, the quality and efficiency of risk assets
+continued to improve. The Bank continued to promote
+the intensive, standardized and specialized disposal of NPLs
+through comprehensively application and innovation of
+various disposal methods, continuous optimization of the
+disposal structure and unblocked disposal channels of risk
+assets, and improved the utilization efficiency of financial
+3,621
+3,651
+3,134
+3,177
+Net profit
+(RMB100 millions)
+2019
+2020
+2021
+2022
+2023
+Since 1 January 2023, the Group has implemented IFRS 17 - Insurance Contracts. In accordance with the Standard,
+the Group made retroactive adjustments to relevant data and indicators for the comparable periods in 2022.
+84
+Annual Report 2023
+Discussion and Analysis
+First, asset and capital investment efficiency
+remained stable. ROA and ROE were 0.87% and
+10.66%, respectively, both maintaining a relatively good
+level among comparable peers. The Group's NIM was
+1.61%, consistent with the change trend of peers. The
+cost on domestic RMB deposits remained stable with a
+slight decline, and the interest rate on new time deposits
+has significantly decreased year-on-year. Second, the
+Bank continuously enhanced the stability and
+sustainability of non-interest income. In 2023, the
+Bank generated a non-interest income of RMB151.4
+billion, representing a year-on-year increase of 0.7%.
+Specifically, net fee and commission income amounted
+to RMB119.4 billion, ranking first among peers; fee-
+based income from such products as credit card, third-
+party payment, syndicate arrangement underwriting and
+management, spot foreign exchange settlement and
+trading and agency insurance grew remarkably. The Bank
+recorded other non-interest income of RMB32.1 billion,
+representing a year-on-year increase of 52.5%. Third,
+quality and efficiency improved in a cost-effective
+manner. Operating expenses amounted to RMB238.7
+billion in 2023, representing a year-on-year decrease of
+0.3%. Cost-to-income ratio was 28.28%, showing a good
+input-output efficiency compared to peers.
+III. Making Every Effort to Stabilize Asset
+Quality and Effectively Forestalling and
+Controlling Credit Risk
+The
+credit risk control capability was enhanced
+continuously, and the quality of the Group's credit assets
+was stable and controllable. First, core indicators
+improved steadily. The Group's NPL ratio decreased by
+2BP from the year beginning to 1.36%. The balance of
+loan allowance stood at RMB756.4 billion, up RMB83.6
+billion over the year beginning; allowance to total loans
+ratio was 2.90%, the same as that at the beginning of
+the year, and allowance to NPLs ratio was 213.97%, up
+4.5 percentage points over the year beginning, indicating
+that the Bank's risk resistance capacity has been further
+enhanced. The price scissors between overdue loans and
+NPLs have remained negative for 15 consecutive quarters.
+Second, the investment and financing structure
+was continuously optimized. The Bank strengthened
+planning and guidance, reinforced policy empowerment,
+and well managed the direction, volume and pace of
+investment. It made a sound layout for investment and
+financing business in a forward-looking manner, and
+continued to promote the management of the shift of
+existing loans. As a result, the investment and financing
+structure has been increasingly adapted to the national
+strategy, regional resource endowment and the Bank's
+resources.
+Interconnectedness
+1,723
+25,530
+Το
+promote the high-quality development of
+inclusive finance, the Bank built a digital inclusive
+center, and boosted the development of small and micro
+enterprises relying on the three core online businesses
+"Online Revolving Loan, Quick Lending for Operation
+and Digital Supply Chain". The balance of inclusive
+loans exceeded RMB2.2 trillion, representing a growth
+of 43.7%. The Bank gave priority to retail loans and
+adhered to the No.1 Personal Bank Strategy. In 2023,
+personal non-mortgage loans increased by RMB562.5
+billion, representing a year-on-year growth of RMB342.0
+billion. The Bank refined the products such as "Repay as
+You Wish" and their functions. Personal business loans
+increased by RMB417.1 billion in 2023, representing a
+year-on-year growth of RMB189.5 billion. Seizing the
+opportunity for consumption recovery, the Bank saw an
+increase of more than RMB140.0 billion in the balance
+of personal consumption loans and credit card
+overdrafts, representing a growth of RMB152.5 billion
+year-on-year. Actively responding to changes in the real
+estate market, the Bank expedited business transformation,
+and granted nearly RMB300.0 billion of second-hand
+housing loans cumulatively in 2023. The proportion
+of such loans in total housing loans increased by 9.0
+percentage points compared to the previous year.
+Discussion and Analysis
+V. Solidifying Operating Foundation and
+Maintaining a Reasonable Interest
+Margin
+The Bank adhered to the pricing of loan risks,
+conscientiously implemented the market-oriented
+adjustment mechanism for deposit interest rates, and
+promoted the three adjustments of nominal deposit
+rates and floating points. It guided the optimization of
+deposit term structure, and made achievements in the cost
+management and control for cost on RMB deposits.
+In 2024, the Bank will continue to launch more powerful,
+consolidated and targeted financial services, focusing on the
+development of the real economy and customer demand.
+It will continue to refine the funding supply structure, and
+achieve high-quality development of credit operations.
+Hot Topic 3: Enterprise Risk Management
+and Asset Quality
+Adhering to the eternal theme of preventing and
+controlling financial risks, the Bank continuously improved
+the enterprise risk management system of "Five-
+pronged Risk Management Approach" for domestic and
+overseas institutions, on- and off-balance sheet business,
+commercial and investment banking and other business,
+online and offline business, as well as the Head Office
+and subordinate institutions. It refined the four-pronged
+approach to people, money, defense lines, and bottom
+lines, and reinforced "active prevention, smart control
+and comprehensive management". The Bank consolidated
+the three defense lines for risk management, enhanced
+enterprise risk management capabilities, and served as a
+cornerstone for ensuring financial stability.
+I.
+Continuously Deepening the "Five-
+pronged Risk Management Approach"
+and Comprehensively Upholding Security
+The Bank established a risk officer management system,
+and reinforced the staffing and management of risk
+officers in the first defense line departments of the
+Head Office, domestic branches, overseas institutions,
+and integrated subsidiaries, to improve the quality and
+efficiency of enterprise risk management. The Bank
+improved the risk monitoring mechanism of "Five-pronged
+Risk Management Approach", regularly investigated
+potential enterprise risks of all institutions, customers and
+products, and dynamically updated response plans and
+prevention measures, to respond to risks in a forward-
+looking manner. The Bank established a sound product risk
+management system, refined product risk identification,
+assessment, and review processes, strengthened product
+catalog and system management, and enhanced product
+risk control throughout the entire lifecycle. Upholding
+the risk-neutral philosophy, the Bank strengthened the
+monitoring and early warning of risks in bond, money,
+foreign exchange, commodity and stock, and tightened
+the management of risk limits, to effectively respond to
+various external risk events and market fluctuations. The
+Bank further improved the enterprise risk management
+mechanism, incorporated operational risk and production
+safety into the enterprise risk management, continuously
+solidified the bottom line for compliant operations at
+home and abroad, continuously strengthened information
+technology and cyber security risk control, and cemented
+the foundation for management of various risks.
+Domestic and overseas
+institutions
+Five-
+pronged
+Risk
+Manage-
+On- and off-balance
+sheet business
+Commercial banking,
+investment banking and
+other business
+Online and offline
+business
+ment
+Approa
+-ch
+IV. Focusing on Value Creation and Steadily
+Advancing Retail and Inclusive Business
+29,086
+supply of high-quality rural revitalization financial
+supply. Agriculture-related loans rose by RMB960.0 billion
+or over 29%, maintaining a leading position among peers.
+At the end of 2023, the growth rate of loans in key
+areas such as the Beijing-Tianjin-Hebei Integration, the
+Yangtze River Delta, the Guangdong-Hong Kong-Macao
+Greater Bay Area, the Chengdu-Chongqing Economic
+Circle, and the central region was higher than the
+average of the Bank.
+Strengthening High-quality Financial
+Services for Key Fields
+21,247
+18,815
+Loan growth
+(RMB100 millions)
+Year-on-year growth
+(RMB100 millions)
+Growth rate of ICBC loans
+5,491
+4,283
+2,433
+3,555
+Growth rate of loans of
+all financial institutions
+2020
+2021
+2022
+2023
+The above figure shows the growth of domestic RMB loans.
+II. Highlighting Major Responsibilities
+and Core Business and Contributing to
+Building a Modern Industrial System
+Endeavoring to serving the development of the
+manufacturing industry. The Bank advanced the
+construction of a "leading financial service provider
+for manufacturing", and initiated the Special Plan for
+Supporting the Development of Advanced Manufacturing
+Cluster through Financing. The balance of loans to
+manufacturing exceeded RMB3.8 trillion, representing an
+increase of over RMB800.0 billion, maintaining a leading
+position among peers in terms of both total amount
+and growth. The Bank comprehensively enhanced
+infrastructure service capabilities, and increased loans
+to key projects such as transportation, water conservancy
+and energy. Domestic corporate loans increased by RMB2.3
+trillion, representing a year-on-year growth of RMB690.1
+billion.
+III. Optimizing Credit Structure and
+The advantages of sci-tech innovation finance
+continued to expand. Special services such as "Chunmiao
+Action" were carried out, targeting high-tech and SRDI key
+customer groups. Loans to strategic emerging industries
+rose by nearly RMB950.0 billion, with a growth rate of over
+54%. To improve and upgrade green finance brand,
+the Bank accelerated innovation in financing products
+such as green bonds, funds, and wealth management. At
+the end of 2023, green loans by the statistical standard of
+the NFRA reached nearly RMB5.4 trillion, representing an
+increase of nearly RMB1.4 trillion over the end of last year,
+maintaining a leading position among peers in terms of
+total amount and growth. The Bank deeply implemented
+the special action of rural revitalization, and increased the
+86
+Annual Report 2023
+Operating income
+(RMB100 millions)
+Indicator category
+Size
+Assessment Indicators of Domestic Systemically Important Banks
+15.64
+15.17
+Tier 1 capital adequacy ratio (%)
+14.04
+13.72
+Common equity tier 1 capital adequacy ratio (%)
+4,281,079
+22,225,272
+24,641,631
+Capital adequacy ratio (%)
+Risk-weighted assets (1)
+Net capital base
+1,013
+1,127
+Valid portion of minority interests
+275,764
+333,382
+Surplus provision for loan impairment
+528,307
+4,707,100
+19.10
+19.26
+Note: (1) Refers to risk-weighted assets after capital floor and adjustments.
+20,488,486
+15,331,991
+22,860,683
+2022
+2023
+At 31 December
+In RMB millions
+At 31 December
+Total
+Parts uncovered by internal model approach
+Operational risk-weighted assets
+Parts covered by internal model approach
+Market risk-weighted assets
+Parts covered by internal ratings-based approach
+Parts uncovered by internal ratings-based approach
+Credit risk-weighted assets
+Item
+RISK-WEIGHTED ASSETS
+Discussion and Analysis
+79
+Annual Report 2023
+635,672
+Valid portion of tier 2 capital instruments and related premiums
+805,084
+970,181
+8,320
+8,488
+Goodwill
+20,811
+22,091
+(20,839)
+3,293
+3,623
+560
+1,766,288
+1,905,968
+496,406
+561,303
+392,162
+428,007
+148,174
+148,164
+356,407
+356,407
+3,141,891
+Other intangible assets other than land use rights
+13,248,337
+8,490
+Cash flow hedge reserve that relates to the hedging of items that are not
+Tier 2 capital
+3,475,995
+3,736,919
+Net tier 1 capital
+584
+354,915
+354,331
+354,978
+354,331
+647
+Valid portion of minority interests
+Additional tier 1 capital instruments and related premiums
+Additional tier 1 capital
+3,121,080
+3,381,941
+Net common equity tier 1 capital
+institutions that are under control but not subject to consolidation
+7,980
+Investments in common equity tier 1 capital instruments issued by financial
+fair-valued on the balance sheet
+(2,962)
+(2,867)
+7,473
+7,528,692
+7,240,149
+234,534
+Payments settled via payment systems or correspondent banks
+Assets under custody
+Substitutability
+6,434,397
+Securities and other financing instruments issued
+3,429,792
+Intra-financial system liabilities
+2,248,245
+47,393,490
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system assets
+2023
+In RMB millions
+Indicator
+Interconnectedness
+Indicator category
+Size
+In accordance with the Guidelines on the Disclosure of
+Global Systemically Importance Assessment Indicators
+for Commercial Banks issued by the former CBIRC and
+the Instructions for G-SIB Assessment Exercise issued by
+the Basel Committee on Banking Supervision, the Bank
+calculated and disclosed the global systemically importance
+assessment indicators.
+Global Systemically Importance Assessment
+Indicators of Commercial Banks
+Assessment Indicators of Systemically
+Important Banks
+The Bank continuously improved the EVA value ecosystem
+and leveraged the leading and driving role of capital. It
+further optimized the economic capital measurement
+policy, and increased the preferential allocation to key
+areas such as manufacturing, green development, sci-
+tech innovation, strategic emerging industries and rural
+revitalization. The Bank improved the capital constraint
+mechanism and comprehensively strengthened capital
+management of domestic and overseas branches,
+controlled institutions and departments of the Head
+Office. It increased the use of economic capital in incentive
+assessment, and actively promoted the adjustment of asset
+structure and the enhancement of value creation capacity.
+Economic capital management of the Bank includes three
+major aspects: measurement, allocation and application.
+Economic capital indicators include Economic Capital (EC),
+Risk-Adjusted Return on Capital (RAROC) and Economic
+Value-added (EVA). All of the above are applied in
+credit resource allocation, risk constraint, performance
+assessment, expenditure allocation, product pricing and
+customer management, etc.
+718,647,269
+Allocation and Management of Economic
+Capital
+21,062,084
+2,304,370
+Discussion and Analysis
+81
+Annual Report 2023
+2,182,999
+2,540,971
+160,052
+Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+Level 3 assets
+Global (cross-jurisdictional) activity
+765,333
+Trading and available-for-sale securities
+9,906,744
+Notional amount of over-the-counter ("OTC") derivatives
+Complexity
+1,231,759
+Trading volume of listed equities and other securities
+8,896,224
+Trading volume of fixed-income securities
+Underwritten transactions in debt and equity markets
+In accordance with the Measures for Assessment of Systemically Important Banks and the Notice on Launching the
+Assessment Data Completion of Systemically Important Banks issued by PBC and the former CBIRC, the Bank calculated and
+disclosed the 2022 assessment indicators of domestic systemically important banks.
+For details on the issuance of capital instruments of the
+Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of
+HKEX and the website of the Bank.
+Issuance Progress of Total Loss-Absorbing
+Capacity Non-capital Debt Instruments
+Net tier 1 capital
+30 June
+2023
+2023
+2023
+Item
+31 December 30 September
+At
+At
+At
+LEVERAGE RATIO
+Please refer to the 2023 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+22,225,272
+1,533,579
+1,546,414
+24,641,631
+122,624
+111,264
+80,583
+123,270
+203,207
+3,736,919
+In February 2024, the First Extraordinary General Meeting
+of 2024 of the Bank reviewed and approved the Proposal
+on the Issuance Amount of Total Loss-Absorbing Capacity
+Non-capital Debt Instruments, approving the Bank to issue
+no more than RMB60.0 billion total loss-absorbing capacity
+non-capital debt instruments. The issuance plan of total
+loss-absorbing capacity non-capital debt instruments is still
+subject to the approval by relevant regulatory authorities.
+Balance of adjusted on- and off-balance sheet assets
+Leverage ratio (%)
+7.95
+Discussion and Analysis
+Annual Report 2023
+88
+80
+In November 2023, the First Extraordinary General Meeting
+of 2023 of the Bank reviewed and approved the Proposal
+on the Issuance Amount of Capital Instruments, approving
+the Bank to issue tier 2 capital instruments of RMB240.0
+billion or foreign currency equivalent. In order to meet the
+latest regulatory requirements, the issuance amount of
+RMB130.0 billion or foreign currency equivalent of undated
+capital bonds with write-down feature that have not been
+issued after being reviewed and approved by the First
+Extraordinary General Meeting of 2022 will no longer be
+used. The above-mentioned amount has been incorporated
+into the proposal for re-application. The issuance plan of
+the above-mentioned capital instruments is still subject to
+the approval of relevant regulatory authorities.
+The Bank issued two tranches of tier 2 capital bonds of
+RMB55.0 billion each in China's national inter-bank bond
+market in April and August 2023. All proceeds were used
+to replenish the Bank's tier 2 capital in accordance with
+the applicable laws as approved by relevant regulatory
+authorities.
+Issuance Progress of Capital Instruments
+On the basis of capital replenishment by retained profits,
+the Bank proactively expanded the channels for external
+capital replenishment and continuously promoted the
+innovation of capital instruments, to reinforce capital
+strength, optimize capital structure and control the cost of
+capital rationally.
+Capital Financing Management
+Note: The Bank's leverage ratio complies with additional regulatory requirements on systemically important banks. Please refer to
+"Unaudited Supplementary Information to the Consolidated Financial Statements" for details on disclosed leverage ratio
+information.
+8.32
+8.05
+31 March 31 December
+2023
+2022
+3,560,849 3,475,995
+44,231,978 41,780,554
+At
+At
+In RMB millions, except for percentages
+45,931,590
+7.74
+3,556,297
+3,637,990
+47,246,121
+7.70
+46,978,647
+7,980